<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
Amendment No. 1
to
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of the Securities Exchange Act of 1934
INTERALLIED GROUP, INC.
(Name of Small Business Issuer in Its Charter)
Nevada 14-1775226
---------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
1 Jacqueline Street
Suite 102
New Windsor, New York 12553
(Address of principal executive offices)
(914) 534-4909
(Issuer's telephone number, including area code)
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
------------------- ------------------------------
Not applicable Not applicable
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $0.01 per share
================================================================================
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PART I
Item 1. Description of Business.
Introduction
Interallied Group, Inc. (the "Company") through its subsidiary Dining
Experience, Inc. ("Dining Experience") is engaged in establishing and marketing
a monthly gourmet meal. The Company acquired Dining Experience in March 1999.
Dining Experience was formed in December 1998 and has developed a unique
marketing concept for its products. The sale of the Company's products will be
sold through a network of independent participants in a multi level marketing
program. As its original product and concept Dining Experience has developed a
gourmet meal of the month program (for two or more) delivered fresh to the
Purchaser's home via overnight carrier. It is anticipated that Dining Experience
will commence operations in the fourth quarter of 1999.
Dining Experience is currently the only significant operation of the Company.
Commencing in 1996 the Company was engaged in establishing franchised
restaurants. The Company had an arrangement with Damon International, Inc. which
owns franchises and operates Damon's The Place for Ribs Restaurant and
Clubhouse, a sports and family oriented ribs style chain restaurant. Pursuant to
that arrangement, the Company entered into a joint venture with Damon's opening
a Damon's Restaurant in Buffalo, New York. The Company owned 51% of the joint
venture. The Company opened a second Damon's The Place for Ribs Restaurant in
Rochester, New York owning a 25% interest in the entity operating the
restaurant. These restaurants did not generate a significant amount of income
and operated at a loss. The Company sold its interest in the Buffalo restaurant
in January 1999. Other than the maintenance of its minority interest in an
entity operating the Rochester restaurant, the Company has ceased all activities
relating to Damon's restaurants.
During 1998 the Company contemplated acquiring a woman's accessory company
designing handbags with a cigar box theme. An option was entered into in
September 1998 to acquire this Company. The Company also entered into consulting
agreements to provide marketing and consulting services to several entities
including cigar manufacturers and cigar distributors. The option to acquire the
accessory company was modified in December 1998 with shares issued in connection
with the option returned. The Company did not exercise the option. During 1999
all the consulting arrangements were terminated.
The Company was formed as European American Leasing Corporation in Nevada on May
27, 1975. In November 1993, it acquired in a reverse acquisition a corporation
organized to engage in the restaurant business. At that time the Company changed
its name from Sunnyland Tours, Inc. to Interallied Restaurant Group, Inc. In
January 1999 it changed its name to Interallied Group, Inc.
2
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The Company is located at One Jacqueline Street, Suite 102, New Windsor, New
York 12553. As used herein unless otherwise indicated by the contract the term
"Company" includes the Company and its subsidiaries.
Dining Experience
Introduction
Dining Experience was formed in 1998 to implement a monthly Gourmet meal plan.
Each month a member or participant of the Plan would receive all the ingredients
for a gourmet meal pursuant to a recipe from a participating restaurant. The
Company proposes providing to its members through courier delivery substantially
all the ingredients for the meal with a recipe and instructions for the
preparation of the gourmet meal. The Company's strategy is to establish a
network of participating members to market the meal plan and other products. The
Company will also market the plan through participating merchants.
Each member would receive a membership card entitling the member to certain
additional benefits. Each month the subscriber would receive a package through a
courier. The package will contain the featured entree for two. All condiments
are provided together with a vegetable and, should the recipe call for it, rice
or pasta, soup and/or an appetizer. Dessert and salad will be included with
every meal. The monthly package would also contain:
1. A complete history covering the restaurant and the city where it's
located
2. Information about the chef who created the recipe.
3. Origin of the main course.
4. All necessary ingredients to prepare a main entree for two, other than
dairy and egg thereby eliminates the need to search for out of season
ingredients.
5. All necessary ingredients for vegetable side dish, rice or pasta, soup
and/or appetizer as well as desert.
6. A complete list of all the ingredients included.
7. A nutritional fact sheet.
8. Simple instructions to guide the subscriber through complete preparation
of the meal. Full-color photographs to assist in the creation of the
meal.
While the Company has not began to commence delivery of the meal plan it has
taken several steps toward implementation.
The Company is in the process of obtaining Agreements with a number of upscale
restaurants from coast to coast. The type of restaurants desired by the Company
will range be from cozy country inns to big city restaurants. Included with the
meal will be a history of the restaurant,
3
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information about the owner(s) and the chef and a detailed signature recipe. It
has entered into agreements with several restaurants including four Italian
restaurants, two Spanish restaurants and three Continental restaurants, to
utilize the recipe's of these restaurants for the meal plan. The restaurant
supplies the recipe and other information without cost to the Company. The name
of the restaurant is promoted through the plan and is featured in the monthly
package.
The Company has also entered into an arrangement with an unaffiliated firm in
the Philadelphia area to deliver the meals to plan members. This firm obtains
and assembles the ingredients on behalf of the Company in accordance with the
specifications of the particular monthly recipe provided by the restaurant. All
deliveries through the courier will be made by this firm on behalf of the
Company. The Company is not required to maintain an inventory.
The heart of the Company's plan is creation of a network of sale participants in
the program as consumers and marketers. The sale participants are independent
contractors. The Company hopes that each sale participant will bring in
additional sale participants. The Company has formulated its distribution
program, prepared a manual for its participating members as well as other
promotional materials for the marketing of the Plan. The program calls for
nominal payment by the distributor member of less than $100. The plan envisions
five levels of achievement for sale participants depending on the number of
sales made by the sale participants and the number of additional sale
participants which becomes part of the program through such participant. The
compensation and discounts for products which a sale participant receives is
dependent on the level of sales and other levels achieved by the sale
participants. The Company has entered into arrangements with 76 sale
participants.
The Company has also formulated a program for merchant participants. The Company
will provide for the merchant an area listing on the "Participating Merchants
Page" of the Company's web site, including merchants' name, address, telephone
number, description of business and incentive or discounts being offered, in
addition to a window decal, a counter card with logo, a merchants' card for
their personal use and listings in the Company's promotional material.
Participating merchants will not be limited to restaurants, but will including
cleaners, florists, hair salons and other stores.
Future Plans
Future plans for additional products include Dietetic meals, Vegetarian meals,
Kosher meals, Once-a-Year Picnic packages and Holiday season packages.
The Company is in the process of adding gourmet food and food related items to
its product line, such as a Wine of the Month program, spice rack, aged Balsamic
Vinegar, extra virgin olive oil package and pasta serving bowls including
plates.
4
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All participants will receive a Participant Membership Card which will entitle
the holder to discounts from participating restaurants nationwide. These
locations will be published in the Company's newsletter and will be listed on
the Company's web site.
To increase the Dining Experience's customer base, the Company intends to sell
Participating Memberships through local area fund raising organizations, Little
League, civic organizations and religious organizations, etc. which will create
corporate exposure and potential customers for Dining Experience products. The
Company intends to saturate specific demographic markets which will create
sufficient merchant participation providing a broad selection of outlets for the
Dining Experience participants.
The Company intends to hold gourmet food and cooking seminars. These seminars
will be held at participating restaurants, local hotels and in selected areas
utilizing the Company's mobile kitchen.
The Company anticipates by First Quarter of the Year 2000 to produce a corporate
and product infomercial.
Employees
The Company has two paid employees and Dining Experience has two paid employees.
Competition
The Company is not aware of any competing monthly gourmet meal plan.
Nevertheless, the Company may face substantial competition for disposable income
for gourmet food from restaurants and gourmet food stores. The Company also
believes a substantial amount of its income may be generated from participants
and potential participants who may view the plan is marketing organization in
which the participant may also derive income. There are a substantial number of
competing marketing organizations as Amway.
Trademark
Dining Experience has developed a logo, but it has not caused the trademark to
be registered.
Item 2. Management's Discussion and Analysis and Plan of Operation.
Plan of Operation
The Company's first priority is to inaugurate the meal plan of its subsidiary
Dining Experience. Dining Experience prior to the acquisition by the Company has
and continues to:
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o enter into arrangements with restaurants;
o develop its sales participation and membership program;
o enter into arrangements for distribution of is monthly meal; and
o develop promotional and marketing material.
The Company believes it will be in a position to implement Dining Experience's
monthly meal plan program in the first quarter of 2000.
Thereafter it anticipates developing additional variations to its gourmet meal
plan, develop additional products and introduce food seminars to strengthen its
marketing program.
General
The following discussion and analysis should be read in conjunction with the
financial statements and related notes contained elsewhere in this statement.
As the Company has determined to pursue its Dining Experience operations
comparisons between 1998 and 1997 and future periods may not be appropriate.
Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998
(unaudited)
During the six months ending June 30, 1998, the company had revenues of
$710,036.00 and no revenues in the six months period ended June 30, 1999. All
the revenues in the six month period ended June 30, 1998 were derived from the
operations at the Damon's Restaurant in Buffalo. The Company sold its interest
in this restaurant in January 1999 and had not commenced operations of Dining
Experience.
During the six month period ended June 30, 1999 the Company's general,
administrative and operating expenses amounted to approximately $158,125
primarily due to the start-up activities with respect to Dining Experience. The
Company had a one time gain in January 1999 of $176,880 upon the sale of its 51%
interest in the Damon Buffalo resturant. Because cumulative losses exceeded its
basis the Company did not record any loss related to its interest in Rochester
during this period. The Company had net income of $19,860 during the six months
ended June30, 1999 compared to a loss of approximately $82,100 for the
comparable period.
Fiscal Year 1998 compared to Fiscal Year 1997
During 1998 and 1997 all revenues were derived from the Company's Damon Buffalo
restaurant. Revenues amounted to approximately $1,321,000 in 1998 and $1,320,000
in 1997. Cost of sales increases in 1998 so that the Company's gross profit
decreased by approximately $21,000 from $902,000 to $881,000. General,
administrative and operating expenses decreased by $103,000 during the 1998
period due in part to a $56,000 reduction in rent expense for the restuarant
site. After reflecting the minority interests' 49% share of loss, the Company's
loss from the operations of Damon Buffalo decreased from $80,000 in 1997 to
$35,000 in 1998.
6
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The Company was therefore able to reduce its net loss to approximately $265,000
in 1998 from approximately $277,000 in the prior period.
Liquidity
The Company was able to derive all its operating capital from advances by
shareholders and sales of common stock. Dining Experience has received advances
of $75,000.
Item 3. Description of Property.
The Company's executive offices are located at 1 Jacqueline Street, Suite 102,
New Windsor, New York 12553, where it leases approximately 750 square feet. This
lease expires on February 28, 2001. The annual base rental for this space is
approximately $800.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information as of the date hereof
regarding the ownership of the Company's common stock by: each person we know
owns 5% or more of our outstanding shares; each of our directors; and all
officers and directors of the Company as a group. Each owner of the common stock
has sole voting and investment power for all shares listed below, except as
otherwise indicated.
Name and Amount and
Address of Nature of Percent
Beneficial Beneficial of
Owner Ownership Class
---------- ---------- -------
Joseph Columbo 300,000 19%
Rhonda Rabetsky 150,000 10%
Ira Keeperman 45,000 2%
Maureen Siruell -0- -
Patrice Croghan 45,000 2%
All directors and officers
as a group (3 persons)1 90,000 6%
-------- -----
630,000 39%
1 Does not include shares owned by Mr. Columbo's spouse or on entity in which
his spouse has an interest. Mr. Columbo denies beneficial ownership of such
shares.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and executive officers of the Company are as follows:
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Name Age Position
---- --- --------
Ira Keeperman 47 President, Chief Executive Officer and Director
Patrice Croghan 38 Secretary/Treasurer
Maureen Sirull 42 Vice President
Scott Morris 36 President, Dining Experience
Ira Keeperman, was one of the original Founders of the Company in 1994 and has
served as President and Director since the Company's inception. Mr. Keeperman
was responsible for the development of the Company's two Franchise Restaurants,
Damon's Place For Ribs. Prior to joining the Company and continuing to this
date, Mr. Keeperman is President of Keep Food Brokers. Mr. Keeperman is
presently responsible for the implementation and overseeing of the Company's
sales and marketing strategies.
Patrice Croghan, served as Secretary/Treasurer and a Director of the Company
since its inception. Ms. Croghan's responsibilities include overseeing the
financial and accounting areas for the Company along with marketing research and
survey analysis.
Maureen Sirull, joined the Company in 1995 and worked as Assistant to the
President and was responsible for the daily operation of the Company. Ms. Sirull
was appointed to the position of Vice President and serves as an Officer and
Director of the Company. Prior to joining the Company, Ms. Sirull was employed
for over ten years as a legal assistant. Her duties included training of staff,
interviewing clients and overseeing all aspects of the case and preparing the
case for trial. Ms. Sirull manages the Company's staff and is directly
responsible for sales and marketing material along with the Company's daily
accounting. In addition, Ms. Sirull serves on the board of directors of Dining
Experience, Inc.
Scott Morris, from 1998 Mr. Morris has been engaged in devoting substantially
all his time to the affairs of Dining Experience. From 1988 to 1998 he was
employed by Express Industries as a Marketing Consultant.
Directors are elected to serve until the next annual meeting of stockholders of
the Company or until their successors are elected and qualified. There are no
audit, compensation or other committees of the board of directors.
Item 6. Executive Compensation.
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The following table sets forth information concerning compensation paid or
accrued by the Company or its subsidiaries for services rendered during fiscal
years 1998 and 1997 to our chief executive officer. No other executive officer's
compensation exceeded $100,000 during either of these fiscal years.
Summary Compensation Table
Name and Principal Position Year Salary
- --------------------------- ---- ------
Ira Keeperman, Chief Executive Officer 1998 $ 0
1997 $ 0
Item 7. Certain Relationships and Related Transactions.
In April 1999 the Company exchanged 500,000 shares of its common stock for all
the issued and outstanding shares of Dining Experience, Inc. a start-up venture
intending to market gourmet meals pursuant to monthly and various other Plans.
The aforesaid 500,000 shares were issued to Dining Experience's three
shareholders, two of whom became affiliates as follows:
Joseph Columbo 300,000
Rhonda Rabetsky 150,000
A corporation owned by the spouse of or an affiliate of the Company is the
lessor of the Company's offices pursuant to a five year lease with a base annual
rent of $9,600.
Item 8. Legal Proceedings.
There are no legal proceeding involving the Company.
Item 9. Market For Common Equity and Related Stockholder Matters.
Our common stock is currently quoted on the OTC Bulletin Board under the symbol
"ILRG".
Set forth below are the high and low closing bid quotations for our common stock
for the periods indicated as reflected on the electronic bulletin board. Such
quotations reflect interdealer prices without retail mark-up, mark-down or
commissions, and may not reflect actual transactions. The prices below do not
reflect a one for twenty stock split effected in September, 1998 for periods
prior to such date.
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Period Ending High Low
-------------- ------ ------
June 30, 1999 $5.500 $4.750
March 31, 1999 5.250 4.625
December 31, 1998 4.250 4.000
September 30, 1998 0.313 0.063
June 30, 1998 0.125 0.063
March 31, 1998 0.375 0.063
December 31, 1997 0.125 0.125
September 30, 1997 0.688 0.375
June 30, 1997 0.375 0.250
March 31, 1997 1.313 0.063
As of October 15, 1999, there were approximately 195 recordholders of the our
common stock, although we believe that there are more than five hundred
beneficial owners of our common stock. There are no shares of preferred stock
currently outstanding.
Item 10. Recent Sales of Unregistered Securities.
In September and October 1998, the Company sold shares of its common stock.
Consideration for such shares included cash and forgiveness of debt owed by it
to some of the purchasers. Sales occured at prices ranging from $.20 per share
to $1.00 per share. The shares were issued as a transaction exempt from the
registration requirements pursuant to Rule 504.
As consideration for the issuance of an option to acquire a women's accessory
company the Company issued shares of Preferred Stock which converted into
245,000 shares of common stock in consideration of the options. The shares were
issued pursuant to an exemption from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof. All these shares were returned
to the Company and cancelled upon modification of this Option which was not
exercised.
In March 1999, the Company issued 500,000 shares of its common stock to three
individuals in exchange for shares of Dining Experience. The Company believes
the issuance of such shares is exempt from the registration requirements
pursuant to Section 4(2) of the Securities Act.
Item 11. Description of Securities.
The Company is currently authorized to issue 20,000,000 shares of common stock,
$.01 par value and 5,000,000 shares of preferred stock, par value $.001 per
share.
Common Stock
Each share of common stock entitles the holder thereof to one vote on all
matters submitted to a vote of the stockholders. Since the holders of common
stock do not have cumulative voting rights, holders of more than 50% of the
outstanding shares can elect all of the directors of Company and
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holders of the remaining shares by themselves cannot elect any directors. The
holders of common stock do not have preemptive rights or rights to convert their
common stock into other securities. In the event of a liquidation, dissolution
or winding up of the Company, holders of the common stock have the right to a
ratable portion of the assets remaining after payment of liabilities. All of the
outstanding shares of common stock are duly authorized, validly issued, fully
paid and non-assessable.
The holders of shares of common stock are entitled to dividends when and as
declared by the board of directors from funds legally available therefor. The
Company has never declared or paid cash dividends on its common stock. The
Company intends to retain its net income, if any, to increase its capital base
and, accordingly, does not currently anticipate paying cash dividends. Any
decision on the future payment of dividends is solely at the discretion of the
board of directors and will depend on various factors including the results of
our operations and our financial condition.
Preferred Stock
The Company's certificate of incorporation authorizes the issuance of "blank
check" preferred stock with whatever designation, rights and preferences as may
be determined by the board of directors. Accordingly, the board is empowered,
without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of common stock. The preferred stock
could be utilized, under certain circumstances, as a method of discouraging,
delaying or preventing a change in control of the Company. Although we do not
currently intend to issue any shares of preferred stock, there can be no
assurance that we will not do so.
Transfer Agent
The transfer agent for the Company's common stock is Jersey Transfer Trust
Company. Its telephone number is (973) 239-2712.
Item 12. Indemnification of Directors and Officers.
The By-law authorize indemnification of officers and directors.
11
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Item 13. Financial Statements
12
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Item 14. Changes in and Disagreements with Accountants.
None of the events described in Item 304 of Regulation S-B has occurred within
the past twenty-four months.
Item 15. Financial Statements and Exhibits.
[List separately all financial statements filed a part of the Registration
Statement.]
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(B) Exhibits
Exhibit No. Description
- ----------- -----------
3.1 Certificate of Incorporation
3.2 Amendment to Certificate of Incorporation
By-Laws
10.1 Agreement dated December 27, 1998 between the Company and H&H
Management LLC for sale of interest in Interallied Restaurant
Group of Buffalo, Inc.
10.2 Exchange Agreement dated March 31, 1999 among the Company and
Shareholder of Dining Experience.
21.1 Subsidiary List
27 Financial Data Schedule
14
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, hereunto duly authorized.
Date: November 30, 1999
INTERALLIED GROUP, INC.
By: /s/ Maureen Siruell
----------------------------
Maureen Siruell
15
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INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Interallied Group, Inc.
We have audited the accompanying consolidated balance sheet of Interallied
Group, Inc. and subsidiaries as of December 31, 1998 and the related
consolidated statements of operations, stockholders' equity (deficiency), and
cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Interallied Group, Inc. and subsidiaries as of December 31, 1998, and the
consolidated results of their operations and their cash flows for the year then
ended in conformity with generally accepted accounting principles.
Richard A. Eisner & Company, LLP
New York, New York
June 12, 1999
F-1
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INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Interallied Group, Inc.
We have audited the accompanying consolidated statements of operations,
stockholders' deficiency and cash flows for the year ended December31, 1997 of
Interallied Restaurant Group, Inc. and subsidiaries (the "Company"). These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We did not audit the financial
statements of Interallied Restaurant Group of Buffalo, Inc., a 51% owned
subsidiary, which statements reflect total assets constituting approximately 88%
of consolidated total assets and 73% of consolidated total liabilities as of
December 31, 1997. Such financial statements were audited by other auditors
whose report has been furnished to us, and our opinion, insofar as it relates to
the amounts included for Interallied Restaurant Group of Buffalo, Inc. is based
solely on the report of such other auditors.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, based on our audit and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the results of the Company's operations and its cash flows
for the year ended December 31, 1997 in conformity with generally accepted
accounting principles.
Scarano & Tomaro, P.C.
Syosset, New York
May 13, 1998
F-2
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INTERALLIED GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 2,417 $ 8,281
Note receivable (Note C) 42,943
Other receivables, including $12,154 due from stockholder in 1999 50,224 30,201
----------- -----------
Total current assets 95,584 38,482
Fixed assets, net 17,547 1,135
Intangible asset, net (Note H) 244,658
----------- -----------
$ 357,789 $ 39,617
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable and accrued expenses $ 18,033 $ 30,391
Due to stockholder 30,848 30,848
Net liabilities applicable to subsidiary to be sold (Note C) 15,431
Notes payable (Note H) 76,775
----------- -----------
Total current liabilities 125,656 76,670
----------- -----------
Commitment (Note I)
Stockholders' equity (deficiency) (Note G):
Preferred stock; $.001 par value; 5,000,000 shares authorized;
no shares issued or outstanding
Common stock; $.01 par value; 20,000,000 shares authorized;
1,661,297 and 1,161,297 shares issued and outstanding 16,613 11,613
Additional paid-in capital 1,280,874 1,035,874
Accumulated deficit (1,065,354) (1,084,540)
----------- -----------
232,133 (37,053)
----------- -----------
$ 357,789 $ 39,617
=========== ===========
</TABLE>
See notes to financial statements
F-3
<PAGE>
INTERALLIED GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Six Months Ended Years Ended
June 30, December 31,
------------------------- -------------------------
1999 1998 1998 1997
---------- ---------- ---------- ----------
(unaudited)
(Note C) (Note C)
<S> <C> <C> <C> <C>
Sales $ 710,035 $1,321,156 $1,322,945
Cost of sales 226,076 439,915 421,238
---------- ---------- ----------
Gross profit 483,959 881,241 901,707
General, administrative and other operating expenses $ 135,918 539,757 1,100,011 1,203,661
Amortization of intangible asset 22,207
---------- ---------- ---------- ----------
Loss before other income (expense) and minority
interest (158,125) (55,798) (218,770) (301,954)
---------- ---------- ---------- ----------
Other income (expense):
Gain on sale of subsidiary 176,880
Share of loss of affiliate (18,767) (59,621) (22,879)
Interest income (expense) 431 (12,960) (20,163) (28,828)
---------- ---------- ---------- ----------
177,311 (31,727) (79,784) (51,707)
---------- ---------- ---------- ----------
Income (loss) before minority interest 19,186 (87,525) (298,554) (353,661)
Minority interest's share of loss 5,418 33,857 76,538
---------- ---------- ---------- ----------
Net income (loss) $ 19,186 $ (82,107) $ (264,697) $ (277,123)
========== ========== ========== ==========
Net income (loss) per share - basic and diluted $ .01 $ (.33) $ (.58) $ (1.13)
========== ========== ========== ==========
Weighted average shares outstanding 1,411,297 248,572 460,049 245,106
========== ========== ========== ==========
</TABLE>
See notes to financial statements
F-4
<PAGE>
INTERALLIED GROUP, INC. AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity (Deficiency)
<TABLE>
<CAPTION>
Total
Common Stock Additional Stock Stockholders'
--------------------- Paid-in Accumulated Subscription Equity
` Shares Amount Capital Deficit Receivable (Deficiency)
---------- ---------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1997 266,734 $ 53,102 $1,271,160 $ (542,720) $(840,000) $(58,458)
Proceeds from stock
subscription receivable 242,500 242,500
Stock dividend 53,538 10,669 (10,669) 0
Net loss for the year (277,123) (277,123)
--------- --------- ---------- ----------- --------- --------
Balance at December 31, 1997 320,272 63,771 1,260,491 (819,843) (597,500) (93,081)
Issuance of common stock in
connection with an offering
at $.20 per share 50,000 10,000 10,000
Issuance of common stock in
connection with services
provided to the Company 32,500 6,500 6,500
Issuance of common stock in
connection with repayment
of loans and accrued interest 657,500 131,500 131,500
Rescind issuance of stock (71,700) (14,340) (583,160) 597,500 0
Transfer par value of common
stock in connection with
1 for 20 reverse stock split (187,545) 187,545 0
Issuance of common stock in
connection with an offering
at $1 per share 145,000 1,450 143,550 145,000
Issuance of common stock in
connection with repayment
of loans 27,725 277 27,448 27,725
Net loss for the year (264,697) (264,697)
--------- --------- ---------- ----------- --------- --------
Balance at December 31, 1998 1,161,297 11,613 1,035,874 (1,084,540) 0 (37,053)
Stock issued for acquisition
of subsidiary 500,000 5,000 245,000 250,000
Net income for the period 19,186 19,186
--------- --------- ---------- ----------- --------- --------
Balance at June 30, 1999
(unaudited) 1,661,297 $ 16,613 $1,280,874 $(1,065,354) $ 0 $232,133
========= ========= ========== =========== ========= ========
</TABLE>
See notes to financial statements
F-5
<PAGE>
INTERALLIED GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
----------------------- -----------------------
1999 1998 1998 1997
--------- --------- --------- ---------
(unaudited)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 19,186 $ (82,107) $(264,697) $(277,123)
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Depreciation and amortization 22,941 1,739 1,942 5,267
Expenses paid by issuance of stock 6,500
Gain on sale of subsidiary (176,880)
Share of loss of affiliate 18,767 59,621 22,879
Changes in:
Other receivables (8,369) (11,069) (30,201)
Accounts payable and accrued expenses (20,807) 26,313 1,767 (15,965)
Net liabilities applicable to subsidiary to be sold 25,974 35,238 54,162
--------- --------- --------- ---------
Net cash used in operating activities (163,929) (20,383) (189,830) (210,780)
--------- --------- --------- ---------
Cash flows from investing activities:
Investment in affiliate (82,500)
Proceeds from sale of subsidiary 118,506
Net cash acquired in connection with acquisition of
subsidiary 14,559
--------- ---------
Net cash provided by (used in) investing
activities 133,065 (82,500)
--------- ---------
Cash flows from financing activities:
Advances from stockholders 19,830 41,725 13,645
Proceeds from notes payable 25,000
Proceeds from sale of stock 155,000
Collections on stock subscriptions receivable 242,500
--------- --------- --------- ---------
Net cash provided by financing activities 25,000 19,830 196,725 256,145
--------- --------- --------- ---------
Net increase (decrease) in cash (5,864) (553) 6,895 (37,135)
Cash, beginning of period 8,281 1,386 1,386 38,521
--------- --------- --------- ---------
Cash, end of period $ 2,417 $ 833 $ 8,281 $ 1,386
========= ========= ========= =========
Supplemental disclosures of noncash activities:
Issuance of stock for acquisition of subsidiary $ 250,000
Issuance of stock in repayment of stockholder loans $ 165,965
Recission of stock not paid for $ 597,500 $ 597,500
Note received in connection with sale of subsidiary $ 61,449
</TABLE>
See notes to financial statements
F-6
<PAGE>
INTERALLIED GROUP, INC. AND SUBSIDIARIES
Notes to Financial Statements
Unaudited With Respect to June 30, 1999 and
for the Six-Month Periods Ended June 30, 1999 and 1998
NOTE A - GENERAL
Interallied Group, Inc. (the "Company"), which changed its name from Interallied
Restaurant Group, Inc. on January 12, 1999, is a holding company. During 1997
and 1998 the Company owned a 51% interest in a franchised restaurant which was
sold in January 1999, (see Note C). The Company continues to hold a 25% interest
in a second franchised restaurant which was acquired in 1997 (see Note D).
During March 1999 the Company acquired a development stage marketing company
which will provide the experience of dining out in a customer's own home.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[1] Interim periods:
The unaudited interim financial statements for the six months ended June 30,
1999 and 1998 included herein have been prepared by the Company, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission and, in the opinion of the Company, reflect all adjustments
(consisting only of normal recurring accruals) which are necessary for a
fair presentation. The results of operations for the six months ended June
30, 1999 are not necessarily indicative of the results for the year ending
December 31, 1999.
[2] Principles of consolidation:
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary, Dining Experience, Inc. (from the date of
its acquisition in March 1999), and its 51% owned subsidiary, Interallied
Restaurant Group of Buffalo, LLC ("Interallied of Buffalo") which was sold
in January 1999. Interallied of Buffalo has adopted a 52/53 week fiscal
year, ending on the Sunday closest to December 31. All significant
intercompany transactions have been eliminated in consolidation. The Company
has a 25% interest in Interallied Restaurant Group of Rochester, LLC which
is accounted for under the equity method.
The 1997 financial statements have been reclassified to conform with the
1998 presentation. In addition, the stockholders' deficiency at December 31,
1997, as previously reported, has been increased by $5,000 to reflect a
reduction of proceeds from stock subscription receivable.
[3] Inventory:
Inventory (included in net liabilities applicable to subsidiary to be sold)
consists of food, beverages and supplies, and is valued at the lower of cost
or market value. Cost is determined using the first-in, first-out method.
[4] Revenue recognition:
Revenue is recognized at the time of sale.
[5] Per share data:
Net income (loss) per share is computed based on the weighted average number
of shares of common stock outstanding during each period after giving
retroactive effect to the 1 for 20 reverse split and excluding rescinded
shares from the calculation.
The number of shares and per share prices reflected in the financial
statements and accompanying footnotes give retroactive effect to a 1 for 20
reverse split of common effected September 30, 1998.
F-7
<PAGE>
INTERALLIED GROUP, INC. AND SUBSIDIARIES
Notes to Financial Statements
Unaudited With Respect to June 30, 1999 and
for the Six-Month Periods Ended June 30, 1999 and 1998
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
[6] Use of estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
NOTE C - SALE OF SUBSIDIARY
During January 1999, effective as of December 27, 1998, the Company sold at a
gain of $176,880 its 51% interest in Interallied of Buffalo to one of the
minority stockholders. Interallied of Buffalo operated a "Damons the Place for
Ribs", restaurant in the Buffalo, New York area under a franchise agreement. The
sales price was $161,449 of which $100,000 was paid in cash on January 15, 1999,
and $61,449 was paid by a note which bears interest at 8% and is due in 16
monthly installments of $4,062 beginning February 1, 1999. In addition, the
sales agreement provides for additional consideration not to exceed $68,051 due
over the next five years through 2003 based upon the profits of Interallied of
Buffalo. The balance of the note as of June 30, 1999 totaled $42,943.
The assets and liabilities of Interallied of Buffalo as of December 31, 1998,
which are classified in the balance sheet as net liabilities applicable to
subsidiary to be sold, consisted of the following:
Assets:
Cash $ 33,038
Inventory 15,686
Other current 71,179
Equipment under capital leases, fixtures and leasehold
improvements, net of accumulated amortization of
$215,203 312,280
---------
Total assets 432,183
---------
Liabilities:
Accounts payable and accrued expenses (301,658)
Capital lease obligations (139,953)
Minority interest (6,003)
---------
Total liabilities (447,614)
---------
Net liabilities $ (15,431)
=========
F-8
<PAGE>
INTERALLIED GROUP, INC. AND SUBSIDIARIES
Notes to Financial Statements
Unaudited With Respect to June 30, 1999 and
for the Six-Month Periods Ended June 30, 1999 and 1998
NOTE C - SALE OF SUBSIDIARY (CONTINUED)
Results of operations of Interallied of Buffalo included in the accompanying
statements of operations follows:
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, ------------------------
1998 1998 1997
-------- ---------- ----------
(unaudited)
<S> <C> <C> <C>
Sales $710,035 $1,321,156 $1,322,945
Cost of sales 226,076 439,915 421,238
-------- ---------- ----------
Gross profit 483,959 881,241 901,707
General, administrative and other operating expenses 486,242 934,302 1,036,678
Interest expense 8,774 16,033 21,229
-------- ---------- ----------
Loss before minority interest (11,057) (69,094) (156,200)
Minority interests' share of loss 5,418 33,857 76,538
-------- ---------- ----------
Net loss $ (5,639) $ (35,237) $ (79,662)
======== ========== ==========
</TABLE>
Rent expense for the restaurant site for the years ended December 31, 1998 and
1997 was $60,000 and $115,523, respectively.
Royalty expense incurred pursuant to a franchise agreement with an affiliate of
one of the minority stockholders for the years ended December 31, 1998 and 1997
amounted to $52,868 and $49,948, respectively. Management fees incurred pursuant
to an agreement with an affiliate of one of the minority stockholders for the
years ended December 31, 1998 and 1997 amounted to $26,434 and $31,998,
respectively. Included in accounts payable are $114,822 of unpaid royalties and
management fees at December 31, 1998.
NOTE D - INVESTMENT IN AFFILIATE
In 1997, the Company invested $82,500 for a 25% interest in Interallied of
Rochester, LLC ("Rochester") which was formed in 1997 to build and operate under
a franchise agreement a "Damons the Place for Ribs" restaurant. The restaurant
commenced operations in December 1997. The Company accounts for its investment
under the equity method and reflected losses of $59,621 in 1998 and $22,879 in
1997 as its share of losses incurred by Rochester. The Company's share of
Rochester's losses in excess of its investment in Rochester, amounting to
$15,772 for the six months ended June 30, 1999 and $6,490 for the year ended
December 31, 1998, have not been reflected in the accompanying financial
statements as the Company has not guaranteed obligations of Rochester and is not
otherwise committed to provide financial support to Rochester.
F-9
<PAGE>
INTERALLIED GROUP, INC. AND SUBSIDIARIES
Notes to Financial Statements
Unaudited With Respect to June 30, 1999 and
for the Six-Month Periods Ended June 30, 1999 and 1998
NOTE D - INVESTMENT IN AFFILIATE (CONTINUED)
Condensed financial information of Rochester follows:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
------------- ------------
(unaudited)
<S> <C> <C>
Assets $ 856,379 $ 1,019,460
Liabilities (945,425) (1,045,418)
------------ -----------
Members' deficiency $ (89,046) $ (25,958)
============ ===========
Six Months Ended Years Ended
June 30, December 31,
---------------------- ------------------------
1999 1998 1998 1997
-------- ---------- ---------- --------
(unaudited)
<S> <C> <C> <C> <C>
Sales $994,546 $1,037,495 $1,865,737 $890,937
======== ========== ========== ========
Net loss $(63,088) $ (75,068) $(264,442) $(91,516)
======== ========== ========= ========
</TABLE>
NOTE E - NOTES AND ADVANCES PAYABLE - STOCKHOLDERS
On June 30, 1995, the Company issued a promissory note in connection with a
$88,000 loan from a stockholder. Such note is unsecured and bears an interest
rate of 5.75% per annum. The balance of the note and accrued interest at both
June 30, 1999 and December 31, 1998 totaled $30,848. Interest accrued on the
note through November 20, 1998, at which time substantially all of the note was
repaid through the issuance of common stock valued at $75,000. In August 1999,
the holder of the note agreed to accept 61,696 shares of common stock in payment
of the balance of the note and the accrued interest. Interest expense related to
the note amounted to $4,908 and $5,351 for the years ended December 31, 1998 and
1997, respectively.
During 1996, the Company issued a promissory note in connection with a $42,500
loan from another stockholder. Such note was unsecured, payable during 1998, and
bore an interest rate of 5.75% per annum. Interest expense related to the note
amounted to $2,035 and $2,567 for the years ended December 31, 1998 and 1997,
respectively. Such note was paid by the issuance of common stock during the year
ended December 31, 1998. In connection therewith, accrued interest of $6,740 was
forgiven, and credited to interest expense.
During the year ended December 31, 1998, the Company received advances from
stockholders totaling $41,725 which were repaid during the year by the issuance
of common stock. No interest was charged on these advances.
NOTE F - INCOME TAXES
Income taxes consist of taxes currently due plus deferred taxes related to net
operating loss carryforwards and to differences between the financial statement
and tax bases of assets and liabilities. Deferred tax assets and liabilities
represent the future tax return consequences of these temporary differences,
which will either be taxable or deductible when the assets and liabilities are
recovered or settled.
F-10
<PAGE>
INTERALLIED GROUP, INC. AND SUBSIDIARIES
Notes to Financial Statements
Unaudited With Respect to June 30, 1999 and
for the Six-Month Periods Ended June 30, 1999 and 1998
INTERALLIED GROUP, INC. AND SUBSIDIARIES
Notes to Financial Statements Unaudited With Respect to June 30, 1999 and for
the Six-Month Periods Ended June 30, 1999 and 1998
NOTE F - INCOME TAXES (CONTINUED)
A reconciliation of the income tax provision (benefit) computed at the federal
statutory tax rate to income tax provision (benefit) reflected in the financial
statements is as follows:
<TABLE>
<CAPTION>
Six Months Ended Years Ended
June 30, December 31,
------------------ ----------------
1999 1998 1998 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Federal tax provision (benefit) at statutory income tax rate 34% (34)% (34)% (34)%
Increases (reductions) resulting from:
State and local income tax, net of federal effect 6 (6) (6) (6)
Utilization of NOL carryforward (40)
Increase in valuation allowance 40 40 40
--- --- --- ---
Income tax provision (benefit) reflected in financial statements 0% 0% 0% 0%
=== === === ===
</TABLE>
The net deferred tax asset is comprised of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---------- ------------
<S> <C> <C>
Net operating loss carryforward $ 296,500 $ 313,000
Valuation allowance (296,500) (313,000)
--------- ---------
Net deferred tax asset $ 0 $ 0
========= =========
</TABLE>
As of December 31, 1998 the Company had a NOL carryforward of $782,500, which
expires from 2011 through 2018. The Company has provided a valuation allowance
offsetting the deferred tax asset since management could not determine that it
was more likely than not that the deferred tax asset would be realized in the
future. The valuation allowance increased by $105,900 and $110,800 for the years
ended December 31, 1998 and 1997, respectively and decreased by $16,500 for the
six months ended June 30, 1999, resulting from utilization of the NOL
carryforward during the 1999 period.
NOTE G - STOCKHOLDERS' EQUITY
[1] Offering of common stock:
On June 17, 1996, the Company commenced a sale under Rule 504 of Regulation
D of the Exchange Act of 96,000 shares of common stock to a limited number
of accredited investors at price of $10 per share. The Company agreed that
the common stock purchased may be paid by cash or by short term eight
percent notes fully secured by marketable securities of the purchasers and
due 120 days from the date of sale. During the year ended December 31, 1996,
the entire 96,000 shares of common stock were subscribed, however, during
the year ended December 31, 1998, 59,750 of such shares (together with
additional shares issued as a stock dividend totaling 11,950 shares) were
rescinded for non-payment of the related notes.
F-11
<PAGE>
INTERALLIED GROUP, INC. AND SUBSIDIARIES
Notes to Financial Statements
Unaudited With Respect to June 30, 1999 and
for the Six-Month Periods Ended June 30, 1999 and 1998
NOTE G - STOCKHOLDERS' EQUITY (CONTINUED)
[2] Stock dividend:
On February 3, 1997, the Company declared and issued 53,538 shares of common
stock representing a 20% stock dividend. As the Company had an accumulated
deficit, the dividend was charged to additional paid-in capital.
[3] Offering of common stock:
On September 29, October 30, and November 20, 1998, the Company commenced
additional sales under Rule 504 of Regulation D of the Exchange Act of
740,000, 145,000 and 27,725 shares, respectively, of common stock to a
limited number of accredited investors and certain debt holders of the
Company at prices of $.20, $1.00 and $1.00 per share, respectively. Total
proceeds, in the form of cash, repayment of amounts due the subscribers and
services provided, were $148,000, $145,000 and $27,725, respectively.
NOTE H - ACQUISITION OF SUBSIDIARY
During March 1999, the Company acquired all of the outstanding stock of Dining
Experience, Inc. in return for the issuance of 500,000 shares of the Company's
common stock valued at $250,000. Dining Experience, Inc., which was formed in
December 1998, has developed a unique marketing concept for its products which
will involve sales through a network of independent participants in a
multi-level marketing program. As its original product and concept, it has
developed a gourmet meal of the month program delivered fresh to the purchaser's
home via overnight carrier. It is anticipated that Dining Experience, Inc. will
commence operations in the fourth quarter of 1999. As Dining Experience, Inc. is
in the development stage, the transaction has been accounted for as the
acquisition of assets, the principal asset being an intangible valued at
$266,865 which is being amortized on a straight-line basis over thirty-six
months. Amortization for the six months ended June 30, 1999 totaled $22,207.
Liabilities of the acquired company at date of acquisition, which exceeded
tangible assets, consisting principally of cash, receivables and fixed assets,
by $16,865, amounted to $60,224, including $50,000 of notes payable bearing
interest at 9% and due in March 2000. Subsequent to the acquisition, an
additional $25,000 was loaned to Dining Experience, Inc. on the same terms.
NOTE I - LEASES
During May 1995, the Company entered into an operating lease for office space
which expires on May 1, 2000. Rent expense under this operating lease for the
years ended December 31, 1998 and 1997 amounted to $4,500 and $6,300,
respectively. As of December 31, 1998 future minimum rentals payable under the
lease are $6,300 in 1999 and $2,100 in 2000.
During January 1999, the Company entered into a month-to-month operating lease
for office space from a company owned by the wife of a party who became a
significant stockholder of the Company during March 1999.
F-12
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
MAR 28 1994
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
SUNNY LAND TOURS, INC.
Pursuant to the applicable provisions of the Nevada Business
Corporations Act, SUNNY LAND TOURS, INC. (the "Corporation") adopts the
following Articles of Amendment to its Articles of Incorporation by stating the
following:
FIRST: The present name of the corporation is SUNNY LAND TOURS, INC.
SECOND: The following amendments to its Articles of Incorporation were
adopted by majority vote of shareholders of the Corporation on November 8, 1993
in the manner prescribed by Nevada law.
1. Article I is amended to read as follows:
Name. The name of the corporation shall be Interallied Restaurant
Group, Inc.
2. Article IV is hereby amended to read as follows:
Capitalization. (a) Common Stock. The Corporation shall have the
authority to issue 10,000,000 shares of common stock having a par value
of $.01. All common stock of the Corporation shall be of the same class
and shall have the same rights and preferences. Fully paid common stock
of this Corporation shall not be liable for further assessment. The
authorized common shares shall be issued at the discretion of the
Directors.
(b) Preferred Stock. The Corporation shall have the
authority to 5,000,000 shares of preferred stock each having a par
value of $.001, with such rights, preferences and designations and to
be issued in such series as determined by the Board of Directors of the
Corporation.
3. The Corporation has effectuated a 1-for-10 reverse stock split of
its shares of common stock outstanding as of December 8, 1993 decreasing said
outstanding shares from 618,793 to 61,879
<PAGE>
shares [after cancellation of 3,735,107 common shares by the majority
shareholder of the Corporation], said reverse split to be effective with the
commencement of business on December 10, 1993.
THIRD: The number of shares of the corporation outstanding and
entitled to vote at the time of the adoption of said amendment was 4,455,900.
FOURTH: The number of shares voted for such amendments was 3,735,107
(83%) and the number voted against such amendment was 0.
DATED this 8th day of December, 1993.
SUNNY LAND TOURS, INC.
BY /s/ Ira Reeperman
--------------------
IRA REEPERMAN
President
VERIFICATION
------------
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
The undersigned being first duly sworn, deposes and states: that the
undersigned is the President of Sunny Land Tours, Inc., that the undersigned has
read the Articles of Amendment and knows the contents thereof and that the same
contains a truthful statement of the amendment duly adopted by the stockholders
of the Corporation.
/s/ Deborah Guerra
-------------------
<PAGE>
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned Notary Public in and for the said County
and State, personally appeared the President of Sunny Land Tours, Inc., a Nevada
corporation, and signed the foregoing Articles of Amendment as their own free
and voluntary act and deed pursuant to a corporation resolution for the uses and
purposes set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 8th day
of December, 1993.
/s/ Deborah Guerra
-----------------------------
NOTARY PUBLIC
Residing at Rockland County
My Commission Expires:
January 22, 1995
- --------------------------------
DEBORAH GUERRA
Notary Public State of New York
Qualified in Rockland County
#4978358
Commission Expires January 22, 1995
<PAGE>
SUNNY LAND TOURS, INC.
By: /s/ Patrice E. Croghan
------------------------------
PATRICE E. CROGHAN, Secretary
VERIFICATION
------------
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
The undersigned being first duly sworn, deposes and states: that the
undersigned is the Secretary of Sunny Land Tours, Inc., that the undersigned has
read the Articles of Amendment and knows the contents thereof and that the same
contains a truthful statement of the amendment duly adopted by the stockholders
of the Corporation.
By: /s/ Patrice E. Croghan
------------------------------
PATRICE E. CROGHAN, Secretary
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned Notary Public in and for the said County
and State, personally appeared the Secretary of Sunny Land Tours, Inc., a Nevada
corporation, and signed the foregoing Articles of Amendment as their own free
and voluntary act and deed pursuant to a corporation resolution for the uses and
purposes set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 3rd day
of March, 1994.
/s/ Sophie Tasolides
----------------------------
NOTARY PUBLIC
Residing at ________________
My Commission Expires:
SOPHIE TASOLIDES
Notary Public State of New York
No. ????????
- -----------------------------------
Certificate New York County
Commission Expires 11/24/94
<PAGE>
BY-LAWS
-------
OF
--
EUROPEAN AMERICAN LEASING CORP.
------------------------------
ARTICLE I - OFFICES
-------------------
The office of the Corporation shall be located in the City and State designated
in the Articles of Incorporation. The Corporation may also maintain offices at
such other places within or without the United States as the Board of Directors
may, from time to time, determine.
ARTICLE II - MEETING OF SHAREHOLDERS
------------------------------------
Section 1 - Annual Meetings:
- ---------------------------
The annual meeting of the shareholders of the Corporation shall be held within
five months after the close of the fiscal year of the Corporation, for the
purpose of electing directors, and transacting such other business as may
properly come before the meeting.
Section 2 - Special Meetings:
- ----------------------------
Special meetings of the shareholders may be called at any time by the Board of
Directors or by the President, and shall be called by the President or the
Secretary at the written request of the holders of ten per cent (10%) of the
shares then outstanding and entitled to vote thereat, or as otherwise required
under the provisions of the Business Corporation Act.
Section 3 - Place of Meetings:
- -----------------------------
All meetings of shareholders shall be held at the principal office of the
Corporation, or at such other places as shall be designated in the notices or
waivers of notice of such meetings.
By-Laws - 1
<PAGE>
Section 4 - Notice of Meetings:
- ------------------------------
(a) Except as otherwise provided by Statute, written notice of each meeting of
shareholders, whether annual or special, stating the time when and place where
it is to be held, shall be served either personally or by mail, not less than
ten or more than fifty days before the meeting, upon each shareholder of record
entitled to vote at such meeting, and to any other shareholder to whom the
giving of notice may be required by law. Notice of a special meeting shall
also state the purpose or purposes for which the meeting is called, and shall
indicate that it is being issued by, or at the direction of, the person or
persons calling the meeting. If, at any meeting, action is proposed to be taken
that would, if taken, entitle shareholders to receive payment for their shares
pursuant to Statute, the notice of such meeting shall include a statement of
that purpose and to that effect. If mailed, such notice shall be directed to
each such shareholder at his address, as it appears on the records of the
shareholders of the Corporation, unless he shall have previously filed with the
Secretary of the Corporation a written request that notices intended for him be
mailed to some other address, in which case, it shall be mailed to the address
designated in such request.
(b) Notice of any meeting need not be given to any person who may become a
shareholder of record after the mailing of such notice and prior to the meeting,
or to any shareholder who attends such meeting, in person or by proxy, or to any
shareholder who, in person or by proxy, submits a signed waiver of notice either
before or after such meeting. Notice of any adjourned meeting of shareholders
need not be given, unless otherwise required by statute.
Section 5 - Quorum:
- ------------------
(a) Except as otherwise provided herein, or by statute, or in the Certificate of
Incorporation (such Certificate and any amendments thereof being hereinafter
collectively referred to as the "Certificate of Incorporation"), at all meetings
of shareholders of the Corporation, the presence at the commencement of such
meetings in person or by proxy of shareholders holding of record a majority of
the total number of shares of the Corporation then issued and outstanding and
entitled to vote,
By-Laws - 2
<PAGE>
shall be necessary and sufficient to constitute a quorum for the transaction of
any business. The withdrawal of any shareholder after the commencement of a
meeting shall have no effect on the existence of a quorum, after a quorum has
been established at such meeting.
(b) Despite the absence of a quorum at any annual or special meeting of
shareholders, the shareholders, by a majority of the votes cast by the holders
of shares entitled to vote thereon, may adjourn the meeting. At any such
adjourned meeting at which a quorum is present, any business may be transacted
at the meeting as originally called if a quorum had been present.
Section 6 - Voting:
- ------------------
(a) Except as otherwise Provided by statute or by the Certificate of
Incorporation, any corporate action, other than the election of directors, to be
taken by vote of the shareholders, shall be authorized by a majority of votes
cast at a meeting of shareholders by the holders of shares entitled to vote
thereon.
(b) Except as otherwise provided by statute or by the Certificate of
Incorporation, at each meeting of shareholders, each holder of record of stock
of the Corporation entitled to vote thereat, shall be entitled to one vote for
each share of stock registered in his name on the books of the Corporation.
(c) Each shareholder entitled to vote or to express consent or dissent without a
meeting, may do so by proxy; provided, however, that the instrument authorizing
such proxy to act shall have been executed in writing by the shareholder
himself, or by his attorney-in-fact thereunto duly authorized in writing. No
proxy shall be valid after the expiration of eleven months from the date of its
execution, unless the person executing it shall have specified therein the
length of time it is to continue in force. Such instrument shall be exhibited to
the Secretary at the meeting and shall be filed with the records of the
Corporation.
By-Laws - 3
<PAGE>
(d) Any resolution in writing, signed by all of the shareholders entitled to
vote thereon, shall be and constitute action by such shareholders to the effect
therein expressed, with the same force and effect as if the same had been duly
passed by unanimous vote at a duly called meeting of shareholders and such
resolution so signed shall be inserted in the Minute Book of the Corporation
under its proper date.
ARTICLE III - BOARD OF DIRECTORS
--------------------------------
Section 1 - Number, Election and Term of Office:
- -----------------------------------------------
(a) The number of the directors of the Corporation shall be three (3), unless
and until otherwise determined by vote of a majority of the entire Board of
Directors. The number of Directors shall not be less than three, unless all of
the outstanding shares are owned beneficially and of record by less than three
shareholders, in which event the number of directors shall not be less than the
number of shareholders permitted by statute.
(b) Except as may otherwise be provided herein or in the Certificate of
Incorporation, the members of the Board of Directors of the Corporation, who
need not be shareholders, shall be elected by a majority of the votes cast at a
meeting of shareholders, by the holders of shares, present in person or by
proxy, entitled to vote in the election.
(c) Each director shall hold office until the annual meeting of the shareholders
next succeeding his election, and until his successor is elected and qualified,
or until his prior death, resignation or removal.
Section 2 - Duties and Powers:
- -----------------------------
The Board of Directors shall be responsible for the control and management of
the affairs, property and interests of the Corporation, and may exercise all
powers of the Corporation, except as are in the Certificate of Incorporation or
by statute expressly conferred upon or reserved to the shareholders.
Section 3 - Annual and Regular Meetings; Notice:
- -----------------------------------------------
(a) A regular annual meeting of the Board of Directors shall be held immediately
following the annual meeting of the shareholders, at the place of such annual
meeting of shareholders.
By-Laws - 4
<PAGE>
(b) The Board of Directors, from time to time, may provide by resolution for the
holding of other regular meetings of the Board of Directors, and may fix the
time and place thereof.
(c) Notice of any regular meeting of the Board of Directors shall not be
required to be given and, if given, need not specify the purpose of the meeting;
provided, however, that in case the Board of Directors shall fix or change the
time or place of any regular meeting, notice of such action shall be given to
each director who shall not have been present at the meeting at which such
action was taken within the time limited, and in the manner set forth in
paragraph (b) Section 4 of this Article III, with respect to special meetings,
unless such notice shall be waived in the manner set forth in paragraph (c) of
such Section 4.
Section 4 - Special Meetings; Notice:
- ------------------------------------
(a) Special meetings of the Board of Directors shall be held whenever called by
the President or by one of the directors, at such time and place as may be
specified in the respective notices or waivers of notice thereof.
(b) Except as otherwise required by statute, notice of special meetings shall
be mailed directly to each director, addressed to him at his residence or usual
place of business, at least two (2) days before the day on which the meeting is
to be held, or shall be sent to him at such place by telegram, radio or cable,
or shall be delivered to him personally or given to him orally, not later than
the day before the day on which the meeting is to be held. A notice, or waiver
of notice, except as required by Section 8 of this Article III, need not specify
the purpose of the meeting.
(c) Notice of any special meeting shall not be required to be given to any
director who shall attend such meeting without protesting prior thereto or at
its commencement, the lack of notice to him, or who submits a signed waiver of
notice, whether before or after the meeting. Notice of any adjourned meeting
shall not be required to be given.
Section 5 - Chairman:
- --------------------
At all meetings of the Board of Directors, the Chairman of the Board, if any and
if present, shall preside. If there shall be no Chairman, or he shall be absent,
then the President shall preside, and in his absence, a Chairman chosen by the
directors
[COPY MISSING]
<PAGE>
not be construed to impair or invalidate or in any way affect any contract or
other transaction which would otherwise be valid under the law (common,
statutory or otherwise) applicable thereto.
Section 13 - Committees:
- -----------------------
The Board of Directors, by resolution adopted by a majority of the entire Board,
may from time to time designate from among its members an executive committee
and such other committees, and alternate members thereof, as they may deem
desirable, each consisting of three or more members, with such powers and
authority (to the extent permitted by law) as may be provided in such
resolution. Each such committee shall serve at the pleasure of the Board.
ARTICLE IV - OFFICERS
---------------------
Section 1 - Number, Qualifications, Election and Term of Office:
- ---------------------------------------------------------------
(a) The officers of the Corporation shall consist of a President, a Secretary, a
Treasurer, and such other officers, including a Chairman of the Board of
Directors, and one or more Vice Presidents as the Board of Directors may from
time to time deem advisable. Any officer other than the Chairman of the Board of
Directors may be, but is not required to be, a director of the Corporation. Any
two or more offices may be held by the same person.
(b) The officers of the Corporation shall be elected by the Board of Directors
at the regular annual meeting of the Board following the annual meeting of
shareholders.
(c) Each officer shall hold office until the annual meeting of the Board of
Directors next succeeding his election, and until his successor shall have been
elected and qualified, or until his death, resignation or removal.
Section 2 - Resignation:
- -----------------------
Any officer may resign at any time by giving written notice of such resignation
to the Board of Directors, or to the President or the Secretary of the
Corporation. Unless otherwise specified in such written notice, such resignation
shall take effect upon receipt thereof by the Board of Directors or by such
officer, and the acceptance of such resignation shall not be necessary to make
it effective.
By-Laws - 8
<PAGE>
Section 3 - Removal:
- -------------------
Any officer may be removed, either with or without cause, and a successor
elected by a majority vote of the Board of Directors at any time.
Section 4 - Vacancies:
- ---------------------
A vacancy in any office by reason of death, resignation, inability to act,
disqualification, or any other cause, may at any time be filled for the
unexpired portion of the term by a majority vote of the Board of Directors.
Section 5 - Duties of Officers:
- ------------------------------
Officers of the Corporation shall, unless otherwise provided by the Board of
Directors, each have such powers and duties as generally pertain to their
respective offices as well as such powers and duties as may be set forth in
these by-laws, or may from time to time be specifically conferred or imposed by
the Board of Directors. The President shall be the chief executive officer of
the Corporation.
Section 6 - Sureties and Bonds:
- ------------------------------
In case the Board of Directors shall so require, any officer, employee or agent
of the Corporation shall execute to the Corporation a bond in such sum, 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, funds or
securities of the Corporation which may come into his hands.
Section 7 - Shares of Other Corporations:
- ----------------------------------------
Whenever the Corporation is the holder of shares of any other Corporation, any
right or power of the Corporation as such shareholder (including the
attendance, acting and voting at shareholders' meetings and execution of
waivers, consents, proxies or other instruments) may be exercised on behalf of
the Corporation by the President, any Vice President, or such other person as
the Board of Directors may authorize.
ARTICLE V - SHARES OF STOCK
---------------------------
Section 1 - Certificate of Stock:
- --------------------------------
(a) The certificates representing shares of the Corporation shall
By-Laws - 9
<PAGE>
be in such form as shall be adopted by the Board of Directors, and shall be
numbered and registered in the order issued. They shall bear the holder's name
and the number of shares, and shall be signed by (i) the Chairman of the Board
or the President or a Vice President, and (ii) the Secretary or Treasurer, or
any Assistant Secretary or Assistant Treasurer, and shall bear the corporate
seal.
(b) No certificate representing shares shall be issued until the full amount of
consideration therefor has been paid, except as otherwise permitted by law.
(c) To the extent permitted by law, the Board of Directors may authorize the
issuance of certificates for fractions of a share which shall entitle the holder
to exercise voting rights, receive dividends and participate in liquidating
distributions, in proportion to the fractional holdings; or it may authorize the
payment in cash of the fair value of fractions of a share as of the time when
those entitled to receive such fractions are determined; or it may authorize the
issuance, subject to such conditions as may be permitted by law, of scrip in
registered or bearer form over the signature of an officer or agent of the
Corporation, exchangeable as therein provided for full shares, but such scrip
shall not entitle the holder to any rights of a shareholder, except as therein
provided.
Section 2 - Lost or Destroyed Certificates:
- ------------------------------------------
The holder of any certificate representing shares of the Corporation shall
immediately notify the Corporation of any loss or destruction of the certificate
representing the same. The Corporation may issue a new certificate in the place
of any certificate theretofore issued by it, alleged to have been lost or
destroyed. On production of such evidence of loss or destruction as the Board of
Directors in its discretion may require, the Board of Directors may, in its
discretion, require the owner of the lost or destroyed certificate, or his legal
representatives, to give the Corporation a bond in such sum as the Board may
direct, and with such surety or sureties as may be satisfactory to the Board, to
indemnify the Corporation against any claims, loss, liability or damage it may
suffer on account of the issuance of the new certificate. A new certificate may
be issued without requiring any such evidence or bond when, in the judgment of
the Board of Directors, it is proper so to do.
By-Laws - 10
<PAGE>
Section 3 - Transfers of Shares:
- -------------------------------
(a) Transfers of shares of the Corporation shall be made on the share records
of the Corporation only by the holder of record thereof, in person or by his
duly authorized attorney, upon surrender for cancellation of the certificate or
certificate representing such shares, with an assignment or power of transfer
endorsed thereon or delivered therewith, duly executed, with such proof of the
authenticity of the signature and of authority to transfer and of payment of
transfer taxes as the Corporation or its agents may require.
(b) The Corporation shall be entitled to treat the holder of record of any share
or shares as the absolute owner thereof for all purposes and, accordingly, shall
not be bound to recognize any legal, equitable or other claim to, or interest
in, such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise expressly
provided by law.
Section 4 - Record Date:
- -----------------------
In lieu of closing the share records of the Corporation, the Board of Directors
may fix, in advance, a date not exceeding fifty days, nor less than ten days, as
the record date for the determination of shareholders entitled to receive notice
of, or to vote at, any meeting of shareholders, or to consent to any proposal
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividends, or allotment of any rights, or for the purpose
of any other action. If no record date is fixed, the record date for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if no notice is given, the day on which the
meeting is held; the record date for determining shareholders for any other
purpose shall be at the close of business on the day on which the resolution of
the directors relating thereto is adopted. When a determination of shareholders
of record entitled to notice of or to vote at any meeting of shareholders has
been made as provided for herein, such determination shall apply to any
adjournment thereof, unless the directors fix a new record date for the
adjourned meeting.
By-Laws - 11
<PAGE>
ARTICLE VI - DIVIDENDS
----------------------
Subject to applicable law, dividends may be declared and paid out of any funds
available therefor, as often, in such amounts, and at such time or times as the
Board of Directors may determine.
ARTICLE VII -- FISCAL YEAR
--------------------------
The fiscal year of the Corporation shall be fixed by the Board of Directors from
time to time, subject to applicable law.
ARTICLE VIII - CORPORATE SEAL
-----------------------------
The corporate seal, if any, shall be in such form as shall be approved from time
to time by the Board of Directors.
ARTICLE IX - AMENDMENTS
-----------------------
Section 1 - By Shareholders:
- ---------------------------
All by-laws of the Corporation shall be subject to alteration or repeal, and new
by-laws may be made, by the affirmative vote of shareholders holding of record
in the aggregate at least a majority of the outstanding shares entitled to vote
in the election of directors at any annual or special meeting of shareholders,
provided that the notice or waiver of notice of such meeting shall have
summarized or set forth in full therein, the proposed amendment.
Section 2 - By Directors:
- ------------------------
The Board of Directors shall have power to make, adopt, alter, amend and repeal,
from time to time, by-laws of the Corporation; provided, however, that the
shareholders entitled to vote with respect thereto as in this Article IX
above-provided may alter, amend or repeal by-laws made by the Board of
Directors, except that the Board of Directors shall have no power to change the
quorum for meetings of shareholders or of the Board of Directors, or to change
any provisions of the by-laws with respect to the removal of directors or the
filling of vacancies in the Board resulting from the removal by the
shareholders. If any by-law regulating an impending election of directors is
adopted, amended or repealed by the Board of Directors, there shall be set forth
in the notice of the next meeting of shareholders for the election of directors,
the by-law so adopted, amended or repealed, together with a concise statement of
the changes made.
By-Laws - 12
<PAGE>
ARTICLE X - INDEMNITY
---------------------
(a) Any person made a party to any action, suit or proceeding, by reason of the
fact that he, his testator or intestate representative is or was a director,
officer or employee of the Corporation, or of any Corporation in which he served
as such at the request of the Corporation, shall be indemnified by the
Corporation against the reasonable expenses, including attorney's fees, actually
and necessarily incurred by him in connection with the defense of such action,
suit or proceedings, or in connection with any appeal therein, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding, or in connection with any appeal therein that such officer, director
or employee is liable for negligence or misconduct in the performance of his
duties.
(b) The foregoing right of indemnification shall not be deemed exclusive of any
other rights to which any officer or director or employee may be entitled apart
from the provisions of this section.
(c) The amount of indemnity to which any officer or any director may be entitled
shall be fixed by the Board of Directors, except that in any case where there is
no disinterested majority of the Board available, the amount shall be fixed by
arbitration pursuant to the then existing rules of the American Arbitration
Association.
By-Laws - 13
<PAGE>
F I L E D
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
MAR - 6 1978
WM. SWACKHAMER - SECRETARY OF STATE
/s/ Wm. D. Swackhamer
No. 1568-75
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION
OF
EUROPEAN AMERICAN LEASING CORP.
The Certificate of Incorporation of European American Leasing Corp. is
amended as follows:
1. The present name of the corporation is European American Leasing
Corp.
2. The name of the corporation is hereby changed to Sunny Land Tours,
Inc.
3. The number of authorized shares of the corporation is changed to
10,000,000 shares, one ($.01) cent par value per share.
4. The corporate purposes of the corporation shall include the engaging
in the creation and promotion of wholesale tour packages, together with any
other activities within the purposes for which corporations may be organized
under the Nevada general corporation law.
5. The power to adopt, amend or repeal by the by-laws of the
corporation is expressly conferred upon the directors, provided that such power
shall not divest the stockholders of the power to adopt, amend or repeal by-laws
which have been adopted, amended or repealed by the directors.
6. Each of the above amendments were adopted by the shareholders of the
corporation on November 21, 1977. On such date the number of outstanding shares
of the corporation was 217,945 shares of which 205,800 voted in favor of the
above amendment and 5,050 shares voted against such amendment.
ATTEST: EUROPEAN AMERICAN LEASING CORP.
/s/ Leonora Grassano By: /s/ Elie Sidawi
- ------------------------------- --------------------------
Leonora Grassano, Elie Sidawi, President
Secretary
Sworn and subscribed to before me this 20th day of February, 1978.
/s/ Carol A. Schnell
--------------------------
CAROL A. SCHNELL
A Notary Public of New Jersey
<PAGE>
OFFICE OF
WM. D. SWACKHAMER
SECRETARY OF STATE
THE STATE OF NEVADA
DEPARTMENT OF STATE
I, Wm. D. Swackhamer, the duly elected, qualified and acting Secretary
of State of the State of Nevada, do hereby certify that the annexed is a true,
full and correct transcript of the original certificate of Amendment of Articles
of Incorporation of
EUROPEAN AMERICAN LEASING CORP.
CHANGING NAME TO:
SUNNY LAND TOURS, INC.
as the same appears on file and of record in this office.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the Great Seal of State, at my office in Carson City,
Nevada, this SIXTH day of MARCH, A.D., 1978
/s/ William D. Swackhamer
-----------------------------------------------
Secretary of State
By ____________________________________________
Deputy
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
INTERALLIED RESTAURANT GROUP, INC.
Under Title 7 Chapter 78 Section 390 of the
General Corporation Law of the
State of Nevada
- --------------------------------------------------------------------------------
Pursuant to the provisions of Section 390 of the General Corporation
Law of the State of Nevada, the undersigned, being the President and Secretary
of the Corporation, hereby certify:
FIRST: The name of the corporation is:
INTERALLIED RESTAURANT GROUP, INC.
SECOND: That the Certificate of Incorporation was filed by the
Secretary of State of Nevada on May 27, 1975.
THIRD: The corporation hereby amends its Certificate of Incorporation
as follows:
Paragraph 1 of the Certificate of Incorporation relating to
the corporate title of the corporation, is hereby amended to
read as follows:
"1. The name of the corporation is Interallied Group, Inc."
FOURTH: The amendment effected herein was authorized by the consent in
writing, setting forth the action so taken, signed by the
holders of at least a majority of the outstanding shares
entitled to vote thereon via written consent of the
shareholders of the Company pursuant to Section 390 of the
General Corporation Law of Nevada. Said authorization being
subsequent to the affirmative vote of the Board of Directors.
IN WITNESS WHEREOF, I hereunto sign my name and affirm that the
statements made herein are true under the penalties of perjury this 12th day of
January, 1999.
By: /s/ Ira Keeperman
---------------------------------
Ira Keeperman, President
By: /s/ Maureen Sirull
---------------------------------
Maureen Sirull, Assistant Secretary
<PAGE>
CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS
Of
SERIES A PREFERRED STOCK
Of
INTERALLIED RESTAURANT GROUP, INC.
Interallied Restaurant Group, Inc., a corporation organized and
existing under the General Corporation Law of the State of Nevada
("Corporation"), hereby certifies that, pursuant to the authority vested in the
Board of Directors of the Corporation ("Board of Directors") under its
Certificate of Incorporation, and in accordance with Section 78.1955 of the
Nevada General Corporation Law, the Board of Directors has adopted the following
resolution:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, the Board of Directors does hereby create,
authorize and provide for the issuance of a series of the Corporation's
preferred stock, par value $0.01 per share, and hereby states the designation
and number of shares, and fixes the relative rights, preferences, privileges,
powers and restrictions thereof as follows:
The designation of this series, which consists of 5,000,000 shares of
Preferred Stock, is the Series A Preferred Stock ("Preferred Stock") and the
stated value shall be Two Dollars ("Stated Value or Liquidation Preferred").
1. Rank. All shares of the Preferred Stock shall rank senior to the
Corporation's common stock, ("Common Stock"), and to any other class of capital
stock or series of preferred stock now existing or hereafter established by the
Board of Directors (collectively, "Junior Securities"), as to the distribution
of assets upon liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary.
2. Dividends. The Corporation is not required to pay any dividends on
the Preferred Stock, but as long as any shares of Preferred Stock remain
outstanding, no dividends or distributions of any kind shall be declared or paid
by the Corporation on or with respect to holders of any Junior Securities of the
Corporation unless such dividends also declared and paid on the same basis to
the holders of Preferred Stock.
<PAGE>
3. Preference Upon Liquidation and Other Events.
Liquidation. If the Corporation shall commence a voluntary
case under the Federal bankruptcy laws or any other applicable Federal or State
bankruptcy, insolvency or similar law, or consent to the entry of an order for
relief in an involuntary case under any law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Corporation or of any substantial part of its property, or make
an assignment for the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due, or if a decree or order
for relief in respect of the Corporation shall be entered by a court having
Jurisdiction in the premises in an involuntary case under the Federal bankruptcy
laws or any other applicable Federal or State bankruptcy, insolvency or similar
law resulting in the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Corporation or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and any such decree or order shall be unstayed and in effect for a
period of 60 consecutive days and, on account of any such event, the Corporation
shall liquidate, dissolve or wind up, or if the Corporation shall otherwise
liquidate, dissolve or wind up (any and all of the foregoing being referred to
as a "Liquidation Event", no distribution shall be made to the holders of any
Junior Securities upon liquidation, dissolution or winding up unless prior
thereto the holders of shares of the Preferred Stock shall have received the
"Liquidation Preference" with respect to each share. If upon the occurrence of a
Liquidation Event, the assets and funds available for distribution among the
holders of the Preferred Stock shall be insufficient to permit the payment to
such holders of the Liquidation Preference payable thereon, then the entire
assets and funds of the Corporation legally available for distribution to the
Preferred Stock shall be distributed ratably among such shares in proportion to
the ratio that the Liquidation Preference payable on each such share bears to
the aggregate Liquidation Preference payable on all such shares.
(b) Notice. The Corporation shall not effect any distribution
as a result of a Liquidation Event, unless each holder of Preferred Stock has
been mailed written notice of such distribution at least 20 days prior thereto
and in no event later than 10 days prior to the record date for the
determination of stockholders entitled to participate in such distribution.
4. Conversion.
(a) Mandatory Conversion. The Preferred Stock shall
automatically convert into shares of Common Stock upon filing of a Certificate
of Amendment of the Certificate of Incorporation or other document which
increases the shares of Common Stock by 5,000,000 and/or provides for a reverse
stock split. Each share of Preferred Stock shall be converted into one share of
Common Stock or such fractional number of shares of Common Stock to reflect any
reverse split.
<PAGE>
5. Voting Rights.
The holders of record of shares of Preferred Stock shall be
entitled to the following voting rights:
(i) those voting rights required by applicable
law; and
(ii) the right to vote together with the holders
of the Common Stock upon any matter submitted to such holders for a vote.
6. Cancellation of Preferred Stock. In the event any shares of
Preferred Stock shall be converted, liquidated or redeemed, the shares so
converted, liquidated or redeemed shall be cancelled, shall return to the status
of unauthorized, but unissued preferred stock of no designated series, and shall
not be issuable by the Corporation as Class A Preferred Stock.
IN WITNESS WHEREOF, INTERALLIED RESTAURANT GROUP, INC. has caused this
Certificate of Designations to be duly executed by its President, who affirms
that the information contained in the foregoing Certificate of Designations,
Preferences and Rights is true under the penalties of perjury this ___ day of
September, 1998.
INTERALLIED RESTAURANT GROUP, INC.
By: /s/ Ira Keeperman
---------------------------------
President
By: /s/ Patrice E. Croghan
---------------------------------
Secretary
State of New York )
)ss.
County of New York )
On ______________________, personally appeared before me, a Notary
Public, ____________________________________, who acknowledged that they
executed the above instrument.
--------------------------------------
Signature of Notary
(NOTARY STAMP OR SEAL)
<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
INTERALLIED RESTAURANT GROUP, INC.
INTERALLIED RESTAURANT GROUP, INC., a Nevada corporation (the
"Corporation"), hereby certifies as follows:
FIRST: That the Board of Directors of the Corporation, adopted by
written consent, in lieu of a meeting, resolutions proposing and declaring
advisable the following amendments to the Amended Certificate of Incorporation
of the Corporation, and declaring that such proposed amendments be submitted for
consideration by the stockholders of the Corporation entitled to vote in respect
thereof. The resolution setting forth the proposed amendments is as follows:
RESOLVED, that the Certificate of Incorporation of this Corporation be
amended, as follows:
Article FOUR of the Certificate of Incorporation, relating to the
capitalization of the Corporation, be amended as follows:
"FOURTH: (a) the Corporation shall be authorized to issue the following
shares:
Class Number of Shares Par Value
----- ---------------- ---------
Common Stock 20,000,000 $.01
Preferred Stock 5,000,000 $.001
(b) The board of directors is hereby empowered to
authorize by resolution or resolutions from time to time the issuance
of one or more classes or series of Preferred Stock and to fix the
voting powers, full or limited or no voting powers, and such
designations, powers, references and relative, participating, optional
or other rights, if any, and the qualifications, limitations or
restrictions thereof, if any, with respect to each such class or series
of Preferred Stock (including, without limitation, liquidation
preferences, dividend rates, conversion rights and redemption
provisions), and the number of shares constituting each such class or
series, and to increase or decrease the number of shares of any such
class or series to the extent permitted by the General Corporation Law
of Nevada.
(c) No holder of any of the shares of any class of
the Corporation shall be entitled as of right to subscribe for,
purchase, or otherwise acquire any shares of any class of the
Corporation which the Corporation proposes to issue or any rights or
options which the Corporation proposes to grant for the purchase of
shares of any class of the Corporation or for the purchase of any
shares, bonds, securities, or obligations of the
<PAGE>
Corporation which are convertible into or exchangeable for, or which
carry any rights to subscribe for, purchase, or otherwise acquire
shares of any class of the Corporation; and any and all of such shares,
bonds, securities or obligations of the Corporation, whether now or
hereafter authorized or created, may be issued, or may be reissued or
transferred if the same have been reacquired and have treasury status,
and any and all of the such rights and options may be granted by the
Board of Directors to such persons, firms, corporations and
associations, and for such lawful consideration, and on such terms, as
the Board of Directors in its discretion may determine, without first
offering the same, or any thereof, to any said holder."
All issued and outstanding shares of Common Stock of this Corporation
held by each holder of record on September 30, 1998 shall be
automatically combined in a reverse stock split at the rate of
1-for-20, without any further action on the part of the holders thereof
or this Corporation. No fractional shares of Common Stock shall be
issued. All fractional shares shall be increased to the next higher
whole number of shares."
The number of shares of the corporation outstanding and entitled to
vote on an amendment to the Articles of Incorporation is 5,388,234 that the said
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/ Ira Keeperman
---------------------------------
President
/s/ Patrice E. Croghan
---------------------------------
Secretary
State of New York )
)ss.
County of New York )
On ______________________, personally appeared before me, a Notary
Public, ____________________________________, who acknowledged that they
executed the above instrument.
----------------------------------
Signature of Notary
(NOTARY STAMP OR SEAL)
2
<PAGE>
AGREEMENT, as of December 27, 1998 between INTERALLIED RESTAURANT GROUP, INC.
("Seller"), having an address at 125 Jackson Avenue, New Windsor, New York
12553, and H&H MANAGEMENT, LLC ("Purchaser"), having its principal place of
business at 708 Third Avenue, New York, New York 10017.
W I T N E S S E T H
WHEREAS, Seller is the owner of 51 Units of Interallied Restaurant
Group of Buffalo, LLC ("Company") and of certain right, title and Interest as a
member of the Company; and
WHEREAS, Seller wishes to sell, and Purchaser wishes to purchase,
Seller's 51 Units in the Company and all of Seller's right, title and interest
as a member of the Company;
NOW, THEREFORE, in consideration of the premises and agreements
hereinafter set forth, the parties agree as follows:
1. Purchase and Sale of Units and Right, Title and Interest: Seller
hereby sells, and Purchaser hereby purchases, all of Seller's 51 Units in the
Company and all of Seller's right, title and interest as a member of the
Company.
2. Purchase Price:
(a) The Purchase Price is (i) $161,449.00 (ii) plus the Contingent
Purchase Price (as defined In paragraph 3 below).
(b) The Purchase Price is payable as follows:
(i) concurrent with the execution of this Agreement,
Purchaser shall pay to Seller $100,000.00 by certified or bank check;
(ii) concurrent with the execution of this Agreement,
Purchaser shall deliver to Seller a promissory note in the amount of $61,449.00
in the form annexed hereto as Exhibit A, and a UCC-1 and Security Agreement in
the forms annexed hereto as Exhibit B.
(iii) within ninety days of each of the years ending 1999,
2000, 2001, 2002 and 2003, Purchaser shall pay to Seller the portion, if any, of
the Contingent Purchase Price arising from the year last expired (the "Annual
Contingent Purchase Price Payment")
3. Contingent Purchase Price:
(a) The Contingent Purchase Price shall be the lesser of (i) $68,051 or
(ii) the sum of the Annual Contingent Purchase Price Payments.
<PAGE>
(b) Annual Contingent Purchase Price Payments to be paid in reduction
of the Contingent Purchase Price shall be determined as follows:
(i) For each of the Company's fiscal years, 1999 through 2003
inclusive and specifically to the exclusion of all other fiscal years of the
Company, the Purchaser shall calculate the Company's EBITDA for the fiscal year
just completed (the "Annual EBITDA") Annual EBITDA is defined, for purposes of
this Agreement, as the fiscal year earnings of the Company before deducting
interest expense, income based taxes, depreciation and amortization.
(ii) the Purchaser shall determine the amount which is the
product derived by multiplyinq the Annual EBITDA by 5.5.
(iii) the Purchaser shall determine the amount of debt and
current liabilities (less current assets) owed by the Company at the close of
the fiscal year and subtract it from the amount determined under Section
3(b)(ii) above, the resultant amount being the "Gross Value Amount".
(iv) the Purchaser shall calculate fifty-one (51%) percent of
the Gross Value Amount, the resultant amount being the "Seller's Gross Value
Amount".
(v) the Purchaser shall subtract the sum of (a) $161,449.00
and (b) the sum of all previous Annual Contingent Purchase Payments, from the
Seller's Gross Value Amount which remainder, if any, shall constitute the Annual
Contingent Purchase Price Payment.
(c) In each of the fiscal years 1999 through 2003 inclusive Purchaser
warrants that as the majority member of the Company, it shall not allow the
management fees paid by the Company to exceed three (3%) percent of Gross
Revenues.
(d) Purchaser further warrant that during the fiscal years 1999 through
2003 inclusive it shall use commercially reasonable standards in the operation
of the Company.
(e) Purchaser shall forward its calculation of each Annual Contingent
Purchase Price Payment to Seller within sixty days of each of the year's end.
Purchaser's calculation of each Annual Contingent Purchase Price Payment shall
be binding upon Seller unless, within five days of Seller's receipt of said
calculation, Seller sends written notice to Purchaser that it does not agree
with said calculation. In such event, Seller may have its accountant review the
books and records of the Company at Seller's own expense. If Seller's accountant
determines that the
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Annual Contingent Purchase Price Payment does not exceed Purchaser's calculation
by more than ten (10%) percent, the parties shall split the difference. If
Seller's accountant determines that the Annual Contingent Purchase Price Payment
exceeds Purchaser's calculation by 10%, the parties shall each appoint an
accountant, and the two accountants shall then appoint a third, independent
accountant to determine the Annual Contingent Purchase Price Payment. The cost
of the third accountant shall be shared equally by Seller and Purchaser and said
accountant's determination shall be binding.
4. Closing: The closing shall take place by mail. At the closing,
Seller shall convey to Purchaser, by all necessary documents, its 51 Units in
the Company and all of its right, title and interest as a member of the Company,
and Purchaser shall deliver to Seller $100,000.00 by certified or bank check,
the promissory note for $61,449.00, the UCC-1 and Pledge Agreement.
5. Legal Fees: At the closing, Seller shall pay $1,000 to Purchaser
towards legal fees and related costs for the preparation of this agreement and
the closing documents associated with this transaction.
6. Auditing Fees: Seller shall be solely responsible for all auditing
fees, if any, arising from its ownership of 51 units in the Company during 1998,
and thereafter arising from its sale of 51 units in the Company to Purchaser.
7. Releases:
(a) Purchaser hereby releases, and shall indemnify and hold harmless,
Seller and the Company from any and all claims Seller may have, if any, to the
amount of approximately $11,000 currently reflected on the books of the Company
as due to Seller.
(b) In addition to the above stated release and indemnification, each
of the parties hereto hereby releases and holds harmless the other from any
claim of any nature whatsoever, except as to those claims which may arise in
enforcing the terms of this Agreement.
8. Additional Assurances: The parties hereto agree to take such further
actions, and to execute, acknowledge and deliver such additional documents as
may be reasonably requested by the other party hereto in order to effectuate the
purpose and terms and provisions of this Agreement.
9. Notices: Any notice requested or permitted to be given any party
under this Agreement shall be in writing and shall be deemed to be given when
sent by facsimile and first class mail and addressed as follows:
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(a) To Seller: Interallied Restaurant Group,
Inc.
Attn: Mr. Ira Keeperman
125 Jackson Avenue
New Windsor, New York 12553
Fax: (914) 497-3939
(b) To Purchaser: H&H Management, LLC
708 Third Avenue
New York, New York 10017
Fax: (212) 983-8415
10. Modification: This Agreement may not be modified or terminated
other than by a writing signed by the party against whom enforcement of the
modification or termination is sought.
11. Waiver: This Agreement shall not be affected by any delay, or full
or partial waiver or release by either party of any right hereunder.
12. Binding Effect: This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns.
13. Severability: In the event that any part of this Agreement shall
for any reason be held to be invalid or unenforceable in any respect, the
balance of this Agreement shall remain in full force and effect.
14. Governing Law: This Agreement shall be governed and construed in
accordance with the laws of the State of New York.
15. Counterparts: This Agreement may be signed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
INTERALLIED RESTAURANT GROUP, INC. H&H MANAGEMENT, LLC
BY: /s/Ira Keeperman BY: /s/Howard Freedman
--------------------------- -------------------------------
Ira Keeperman, President Howard Freedman,
Managing Member
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<PAGE>
PROMISSORY NOTE
$61,449.00 As of December 27, 1998
FOR VALUE RECEIVED, H&H Management, LLC, a New York limited liability
company ("Maker"), having an address at 708 Third Avenue, New York, New York
10017, hereby promises to pay to the order of INTERALLIED RESTAURANT GROUP, INC.
("Payee"), the principal sum of $61,449.00, together with interest at the rate
of ten (10%) percent per annum, in sixteen (16) monthly installments, inclusive
of interest, each in the amount of $4,061.81. The first installment shall be
due and payable on February 1, 1999, and installments shall be due and payable
monthly and consecutively thereafter, on the 1st day of each month, to and
including May 1, 2000.
Payment of this Note shall be made to Payee at 125 Jackson Avenue, New
Windsor, New York 12553, or at such other place as the holder hereof may
designate in writing,
This Note is secured by that certain Security Agreement of even date
herewith.
Upon the happening of any of the following events: Maker shall fail to
make any payment of principal or interest on this Note when due; if a petition
in bankruptcy is filed by or against Maker, or any proceeding under any
bankruptcy or insolvency law or any other law relating to the relief of debtors,
readjustment of indebtedness, reorganization, receivership, composition or
extension is commenced by or against Maker, then, and in any such event, the
entire principal amount of this Note and all interest accrued and unpaid hereon
shall become immediately due and payable without demand or notice. After this
Note becomes due, at stated maturity, or on acceleration, any unpaid balance
hereof shall bear interest from the date it becomes due until paid at the
highest rate permitted by law.
Maker shall have the right to prepay this Note in whole at any time or
in part from time to time, without penalty, provided that on each prepayment
Maker shall pay accrued interest on the principal amount so prepaid to the date
of such prepayment, and each partial prepayment shall be applied to the
installments of this Note in the inverse order of their stated maturities. All
prepayments shall at least $1,000 in principal.
Maker hereby waives presentment, demand for payment, protest, notice of
dishonor, notice of protest, and any or all other notices or demands in
connection with this Note. The liability of Maker shall be unconditional and
shall not be in any manner affected by any indulgence whatsoever granted or
consented to by the Payee, including but not limited to any extension of
<PAGE>
time, renewal, waiver or other modification. Any failure of Payee to exercise
any right hereunder shall not be construed as a waiver of the right to exercise
the same or any other right at any time and from time to time.
In any litigation to enforce or collect this Note, Maker waives the
right to interpose any set-off, counterclaim or defense of any kind or nature.
In the event of litigation between Payee and Maker over any matter connected
with this Note or resulting from transactions hereunder, the right to a trial by
jury is waived by Maker. Maker agrees that if an attorney is retained by Payee
to enforce or collect this Note, and the Note is successfully enforced or
collected, then Payee's reasonable attorneys' fees, costs and expenses shall be
paid by Maker.
This Note shall be governed and construed in accordance with the laws
of the State of New York.
H&H MANAGEMENT, LLC
By: __________________________________
Howard Freedman, Managing Member
<PAGE>
EXCHANGE AGREEMENT made as of March 31, 1999, by and among Interallied Group,
Inc., a Nevada corporation ("Interallied") and those persons executing this
Agreement whose names and addresses are set forth in the signature pages
(collectively, the "Shareholders"), owning all of the issued and outstanding
shares of Dining Experience, Inc., a Delaware corporation (the "Acquired
Company").
INTRODUCTION
WHEREAS, Interallied has in the past been engaged in various aspects of
the restaurant business and desires to expand its business;
WHEREAS, the Acquired Company was formed in 1998 to engage in the
business of selling gourmet meal plans for home delivery but has not commenced
operations;
WHEREAS, the Shareholders own all the issued and outstanding shares of
common stock of the Acquired Company ("Acquired Company Shares");
WHEREAS, the Shareholders desire to exchange (the "Exchange") their
Acquired Company Shares for an aggregate of 500,000 shares ("Interallied
Shares") of Interallied's common stock with the result that the Acquired Company
will become a wholly owned subsidiary of Interallied and Interallied desires to
effect the Exchange; and
WHEREAS, the parties intend by executing this Agreement, to adopt a tax
free transaction.
NOW, THEREFORE, in consideration of the premises, the parties hereto do
mutually agree as follows:
ARTICLE I
DEFINITIONS, DISCLOSURE SCHEDULE
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the meanings indicated below:
"Balance Sheet" shall refer to the trial balance sheet delivered to
Interallied pursuant to Section 4.14 hereof
"Balance Sheet Date" shall be February 26, 1999.
"Contract" shall mean any agreement, contract, license, indenture,
lease, mortgage, license, plan, arrangement, commitment or instrument including
any note or other debt instrument (whether written or oral).
<PAGE>
"Consents" shall refer to the consents or approval of any third party
including any governmental agency or registered securities association required
in connection with the Transactions.
"Enforceability Exceptions" shall mean the extent to which
enforceability of an obligation may be limited by applicable bankruptcy,
insolvency, re-organization or other similar laws affecting the enforcement of
creditors' rights generally and by principles of equity regarding the
availability of remedies.
"GAAP" shall refer to generally accepted accounting principles as
applicable in the jurisdiction of the entity to whose financial statements or as
otherwise stated herein.
"Knowledge" shall mean with respect to a party's awareness of the
presence or absence of a fact, event or condition (a) actual knowledge plus, if
different, (b) the knowledge that would be obtained if such party conducted
itself faithfully and exercised a sound discretion in the management of his own
affairs.
"Laws" shall mean all laws, common laws, rules, regulations,
ordinances, codes, judgments, injunctions, orders, decrees, permits, policies,
judgments, guidelines and other requirements of the United States and other
jurisdictions to which Interallied and the Acquired Company, as applicable, are
subject, including all foreign and local governments and all agencies and
instrumentalities thereof including any administrative agencies or body created
by any such government..
"Liabilities" shall mean any indebtedness, liability, claim, loss,
damage, deficiency, obligation or responsibility, fixed or unfixed, choate or
inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute,
contingent or otherwise, whether or not of a kind required by generally accepted
accounting principles to be set forth on a financial statement including the
notes thereto.
"Lien" means any mortgage, pledge, lien, encumbrance, charge, adverse
claim or restriction of any kind affecting title or resulting in an encumbrance
against property, real or personal, tangible or intangible, or a security
interest of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any third party option or other
agreement to sell and any filing of or agreement to give, any financing
statement under the Uniform Commercial Code (or equivalent statute) of any
jurisdiction).
"Material Adverse Effect" or "Material Adverse Change" with respect to
a party means an adverse change which would in the aggregate have material
adverse effect on the assets, liabilities (whether absolute, accrued, contingent
or otherwise), condition (financial or otherwise), results of operations,
business or prospects on a consolidated or combined basis of such party.
"Person" shall mean any natural person, corporation, division of a
corporation, partnership, trust, joint venture, association, company, estate,
unincorporated organization or governmental entity.
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<PAGE>
"Returns" shall mean all returns (including, without limitation,
information returns and other material information), reports and forms relating
to Taxes.
"Subsidiary" shall refer to any corporations or other entities in which
the Acquired Company has a majority interest or which is otherwise controlled by
the Acquired Company.
"Taxes" shall mean any income, alternative or add-on minimum, business,
employment, franchise, occupancy, payroll, property, sales, transfer, use, value
added, withholding or other tax, levy, impost, fee, imposition, assessment or
similar charge together with any related addition to tax, interest, penalty or
fine thereon.
"Transactions" shall mean, in respect of any party, all transactions
set forth in or contemplated by this Agreement that involve, relate to or affect
such party, including, without limitation, the Exchange.
ARTICLE II
THE EXCHANGE
2.1 Exchange. On the "Closing Date" as provided in Section 2.2 all the
Acquired Company Shares shall be exchanged solely for the Interallied Shares on
a pro-rata basis. No Shareholder shall have any right to receive fractional
shares but any fractional share shall be rounded to the nearest whole share.
2.2 Closing. The closing of the Exchange contemplated hereby (the
"Closing") shall be held two business days after all conditions set forth in
Articles VII and VIII have been fulfilled or waived or such earlier date as the
parties may agree. The Closing shall be held at such place and at such time as
the parties may mutually agree. The date upon which such Closing shall occur
shall be referred to as the "Closing Date."
2.3 Disclosure Schedules. Simultaneously with execution of this
Agreement the Shareholders shall deliver schedules to Interallied relating to
the Acquired Company ("Acquired Company Disclosure Schedule"), and Interallied
shall deliver to the Acquired Company Shareholders schedules relating to
Interallied (the "Interallied Disclosure Schedule"). The Interallied Disclosure
Schedule and the Acquired Company Disclosure Schedule shall be referred to as
the "Disclosure Schedules". The Disclosure Schedules shall set forth the matters
required or permitted to be set forth therein as described elsewhere in this
Agreement and shall be deemed to be part of this Agreement.
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<PAGE>
ARTICLE III
CLOSING DELIVERIES
3.1 Shareholders' Closing Deliveries. At the Closing, in addition to
documents referred to elsewhere herein, the Shareholders shall deliver, or cause
to be delivered from the Acquired Company or other third parties, including
officers of the Acquired Company, to Interallied:
(1) Stock Certificates owned by the Shareholders representing
all the Acquired Company Shares duly transferred to Interallied;
(2) Minute books and corporate records of the Acquired
Company;
(3) Copies of all Consents;
(4) Such other documents as Interallied or its counsel may
reasonably request;
(5) Certificate of Shareholders and officers of the Acquired
Company affirming the accuracy of representations, as of the Closing Date; and
All such documents shall be satisfactory to Interallied and its counsel.
3.2 Closing Deliveries to the Shareholders. At the Closing, in addition
to documents referred to elsewhere, Interallied shall deliver to the
Shareholders or to others at the direction of the Shareholders:
(1) Certificates representing the Interallied Shares issuable
upon consummation of the Exchange;
(2) Such other documents as the Shareholders or their counsel
may reasonably request.
All such documents shall be satisfactory to the Shareholders and their counsel.
4
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Except as set forth in the (the Acquired Company Disclosure Schedule),
the Shareholders individually represent and warrant to Interallied the
representations and warrants contained in sections 4.3 and 4.5 as it pertains to
them jointly and severally represent and warrant to Interallied as follows on
the date hereof with the knowledge and understanding that Interallied is relying
materially upon such representations and warranties.
4.1 Organization and Standing of the Acquired Company and Subsidiary.
Each of the Acquired Company and the Acquired Company Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of Florida. Each of the Acquired Company and the Acquired Company Subsidiary has
the corporate power to carry on its business as now conducted and to own its
assets and is duly qualified to transact business as a foreign corporation in
each jurisdiction where such qualification is necessary except where the failure
to qualify will not have a Material Adverse Effect. The copies of the Articles
of Incorporation and By-laws of the Acquired Company, as amended to date, and
delivered to Interallied, are true and complete copies of those documents as now
in effect.
4.2 Capitalization. The authorized capital stock of the Acquired
Company, consists of 1,500 shares of Common Stock of which 1,000 shares are
issued and outstanding. All of such shares of capital stock of the Acquired
Company that are issued and outstanding are duly authorized, validly issued and
outstanding, fully paid and nonassessable, and were not issued in violation of
the preemptive rights of any person. There are no outstanding (a) options,
warrants or rights to purchase or subscribe for any equity securities, or other
ownership interests of the Acquired Company (b) obligations of the Acquired
Company whether absolute or contingent, to issue any shares of equity securities
or other ownership interests, (c) debt or equity securities directly or
indirectly convertible into any equity securities of the Acquired Company or (d)
any shareholder agreements, options, rights of first refusal or other similar
rights with respect to the capital stock of the Acquired Company.
4.3 Share Ownership. Each of the Shareholders is the record and
beneficial owner of the number of Acquired Company Shares listed after such
Shareholder's name on the signature page free and clear of all liens and
encumbrances and claims of any kind. Upon execution of this Agreement and
deliveries at closing of the certificates for Acquired Company Shares and
transfer of the Interallied Shares pursuant to the Exchange, Interallied shall
receive marketable title to such Acquired Company Shares free and clear of all
Liens and encumbrances and claims of third parties.
4.4 Subsidiaries. The Acquired Company has no Subsidiary and no equity
interest in any other corporation, partnership, joint venture or other entity.
The Acquired Company is the record and beneficial owner of all the Acquired
Company Subsidiarys' shares free and clear of all liens and encumbances.
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<PAGE>
4.5 Investment. Each Shareholder hereby represents, warrants and agrees
that such Shareholder will be acquiring the Interallied Shares for investment,
for their own account, and not with a view to the distribution of the
Interallied Shares. In such connection, each Shareholder further represent and
warrant that they understands that Interallied is issuing the Interallied Shares
to such shareholder in reliance upon an exemption from registration requirements
pursuant to Section 5 of the Securities Act of 1933, as amended (the "Act") and
the rules and regulations thereunder. Each Shareholders agrees that the
Interallied Shares may not be sold, transferred, pledged, hypothecated, assigned
or otherwise disposed of by such Shareholder unless Interallied shall have been
supplied with evidence satisfactory to it and counsel that such transfer is not
in violation of the Act. Furthermore, each Shareholder understands that the
certificates for the Interallied Shares shall bear an appropriate restrictive
legend and stop transfer instructions will be placed against the Interallied
Shares with respect thereto, to reflect the foregoing restrictions. Each
Shareholder consents to the placing of such legend on the certificates for the
Interallied Shares.
4.6 Authority. This Agreement constitutes, when executed and delivered
by the Shareholders in accordance herewith, the valid and binding obligations of
the Shareholders, enforceable in accordance with their respective terms, subject
to the Enforceability Exceptions.
4.7 Assets. The Acquired Company has good and marketable title to or
licenses to all of the assets and properties which it purports to own as
reflected on the Acquired Company Balance Sheet or thereafter acquired. No
material portion of the assets of the Acquired Company is subject to any lien or
any governmental decree or other to be sold or is being condemned, expropriated
or otherwise taken by any public authority with or without payment of
compensation therefore, nor, to their knowledge, has any such condemnation,
expropriation or taking been proposed. None of the material assets of the
Acquired Company is subject to any restriction which would prevent continuation
of the use currently made thereof or materially adversely affect the value
thereof.
4.8 Contracts. The Acquired Company Disclosure Schedule 4.8 consists of
a true and complete list of all Contracts to which the Acquired Company is a
party or by which it is bound other than agreements requiring payments or
receipts less than $50,000 per year or (ii) made in the ordinary course of
business and terminable by the Acquired Company on notice of sixty (60) days or
more without penalty or the Acquired Company being liable for damages. All such
contracts shall hereinafter be referred to as "Material Contracts").
All of the Material Contracts are valid and binding upon the Acquired
Company, as applicable, and to the shareholders' Knowledge, the other parties
thereto and are in full force and effect and enforceable in accordance with
their terms, and neither the Acquired Company, nor to the Knowledge of the
Shareholders, any other party to any Material Contract has breached any material
provision of, and no event has occurred which, with the lapse of time or action
by a third party, could result in a material default under the terms thereof.
6
<PAGE>
4.9 Litigation. There is no claim, action, proceeding, or investigation
pending or, to the Shareholders Knowledge, threatened against or affecting the
Acquired Company before or by any court, arbitrator or governmental agency or
authority which, in their reasonable judgment, could have a Material Adverse
Effect on the Acquired Company. There are no decrees, injunctions or orders of
any court, governmental department, agency or arbitration outstanding against
the Acquired Company and with respect to any action or claim covered by
insurance, the Acquired Company has complied with all requirements of any such
policy which are conditions to the defense and continued defense of such claim
or action.
4.10 Taxes. The Acquired Company has duly filed all Returns required to
be filed by it. All such Returns were, when filed, and to the Knowledge of the
Shareholders are, accurate and complete in all material respects and were
prepared in conformity with applicable laws and regulations. The Acquired
Company has paid or will pay in full or has adequately reserved against all
Taxes otherwise assessed against it through the Closing Date.
The Acquired Company is not a party to any pending action or
proceeding by any governmental authority for the assessment of any Tax, and, to
the knowledge of the Shareholders no claim for assessment or collection of any
Tax related to the Acquired Company has been asserted against the Acquired
Company that has not been paid. There are no Tax liens upon the assets (other
than the lien of property taxes not yet due and payable) of the Acquired
Company. There is no valid basis, to the knowledge of the Shareholders, except
as set forth in the Acquired Company Disclosure Schedule, for any assessment,
deficiency, notice, or similar intention to assess any Tax to be issued to the
Acquired Company by any governmental authority.
4.11 No Provision.
4.12 No Conflict. The execution and performance of this Agreement and
any other agreements contemplated hereby will not (i) conflict with or violate
the Articles of Incorporation or the by-laws of the Acquired Company, (ii)
violate in any material respect any laws, ordinances, rules, or regulations, or
any order, writ, injunction or decree to which the Acquired Company is a party
or by which any of its material assets, businesses, or operations may be bound
or affected or (iii) result in any breach or termination of, or constitute a
default under, or constitute an event which, with notice or lapse of time, or
both, would become a default under, or result in the creation of any encumbrance
upon any material asset under, or create any rights of termination, cancellation
or acceleration in any person under, any Material Contract.
4.13 Financial Statements. The Shareholders have delivered to
Interallied true and complete copies of the Acquired Company's financial
statements listed in Schedule 4.13 of the Acquired Company Disclosure Statement.
The Balance Sheet has been prepared from the books and records of the Acquired
Company in accordance with GAAP, are complete and correct and fairly reflect, in
all material respects, the financial condition of the Acquired Company as of the
Balance Sheet Date indicated. The books and accounts of the Acquired Company
have been maintained in
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<PAGE>
all material respects in accordance with sound business practices, and to the
best of the Shareholders' knowledge there have been no transactions involving
the Acquired Company that properly should have been set forth therein in
accordance with GAAP that have not been accurately so set forth.
4.14 Compliance With Law-General. The Acquired Company complies with
all material laws applicable to it.
4.15 Employee Benefit Plans. The Acquired Company has never maintained
or contributed to any employee benefit plan, or any stock purchase plan, stock
option plan, fringe benefit plan, bonus plan or any other deferred compensation
agreement, plan or funding arrangement, whether or not such plan has been
terminated and whether or not such plan is of legally binding nature in the form
of an informal understanding ("Employee Benefit Plan"). With respect to the
Plans, the laws as applicable, have been fulfilled in all material respects and
no event has occurred nor does any condition exist which would subject the
Acquired Company to any material penalty, excise tax or liability.
4.16 Consents. Except with respect to the Consents, no authorization,
license, franchise, approval, order or consent of, and no registration,
declaration or filing by the Acquired Company with, any governmental authority,
domestic or foreign, federal, state or local, is required in connection with the
execution, delivery and performance of this Agreement, and consummation of the
Transaction, the continuation of the business of the Acquired Company as now
conducted after the transfer of the Acquired Company Shares to Interallied.
4.17 Liabilities. The Acquired Company has no material Liabilities
other than (i) Liabilities fully and adequately reflected or reserved against on
the Balance Sheet, (ii) Liabilities incurred since the Balance Sheet Date in the
ordinary course of the business of the Acquired Company or to be insured in
connection with this transaction and any related transaction, or (iii)
Liabilities otherwise disclosed in this Agreement, including the Acquired
Company Disclosure Schedule.
4.18 Accuracy of Representations. None of the representations or
warranties contained in this Agreement, including the Acquired Company Schedule,
contains, or will contain at the Closing Date, any false or misleading
statement, or omits, or will omit at the Closing Date, any fact or statement
necessary to make the other statements or facts set forth herein or therein not
false or misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF INTERALLIED
Except as set forth in the Interallied Disclosure Schedule, Interallied
represents and warrants to, and agrees with, the Shareholders as follows as of
the date hereof and the Closing Date with the
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knowledge and understanding that Shareholders are relying materially upon such
representations and warranties:
5.1 Organization and Standing of Interallied. Interallied is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada and has the corporate power to carry on its business as
now conducted and to own its assets and is duly qualified to transact business
as a foreign corporation in each state where such qualification is necessary
except where the failure to qualify will not have a Material Adverse Effect. The
copies of the Articles of Incorporation and By-laws of Interallied and delivered
to the Shareholders, are true and complete copies of those documents as now in
effect.
5.2 Capitalization. The Authorized capital stock of Interallied
consists of 50,000,000 shares of Common Stock, par value $.001 and 500,000
shares of Preferred Stock, $.001 par value. As of the date hereof, approximately
9,000,000 shares of Common Stock and no shares of Preferred stock are presently
issued and outstanding. All issued and outstanding shares of Common Stock are
duly authorized, validly issued, fully paid, and non-assessable, and were not
issued in violation of any Laws on the pre-emptive rights of any person. There
are no outstanding rights, subscriptions, warrants, puts, calls, unsatisfied
preemptive rights, options or other agreements (including shareholder
agreements), of any kind relating to shares of Common Stock, or any other
security of Interallied and there are no authorized or outstanding securities
convertible into or exchangeable for any such Common Stock or other security of
Interallied.
5.3 Governmental Approval; Consents. No authorization, license, permit,
franchise, approval, order or consent of, and no registration, declaration or
filing by Interallied with, any governmental authority, domestic or foreign,
federal, state or local, is required in connection with Interallied's execution,
delivery and performance of this Agreement and consummation of the transaction.
No Consents of any other parties are required to be received by or on the part
of Interallied to enable Interallied to enter into and carry out this Agreement.
5.4 Authority. This Agreement constitutes, and all other agreements
contemplated hereby will constitute, when executed and delivered by Interallied
in accordance herewith, the valid and binding obligations of Interallied
enforceable in accordance with their respective terms, subject to the
Enforceability Exceptions.
5.5 Financial Statements. The Interallied has delivered to Shareholders
true and complete copies of the Acquired Company's financial statements listed
in Schedule 5.5 of the Acquired Company Disclosure Statement including the
latest financial statements of the Acquired Company. These financial statements
(i) have been prepared from the books and records of the Acquired Company in
accordance with GAAP consistently applied with prior periods, (ii) are complete
and correct and fairly reflect, in each case in all material respects, the
financial condition and results of operations of the Acquired Company as of the
dates and for the periods indicated thereon, and (iii) reflect all assets at the
lower of their cost or net realizable value except as otherwise
9
<PAGE>
indicated. The books and accounts of the Acquired Company have been maintained
in all material respects in accordance with sound business practices, and to the
best of the Interallied's' knowledge there have been no transactions involving
the Acquired Company that properly should have been set forth therein in
accordance with GAAP that have not been accurately so set forth.
5.6 No Breaches. The making and performance of this Agreement and any
other agreements contemplated hereby will not (i) conflict with or violate the
Articles of Incorporation or the by-laws of Interallied, (ii) violate in any
material respect any laws, ordinances, rules, or regulations, or any order,
writ, injunction or decree to which Interallied is a party or by which any of
its material assets, businesses, or operations may be bound or affected or (iii)
result in any breach or termination of, or constitute a default under, or
constitute an event which, with notice or lapse of time, or both, would become a
default under, or result in the creation of any encumbrance upon any material
asset.
5.7 Governmental Approvals. No authorization, license, permit,
franchise, approval, order or consent of, and no registration, declaration or
filing by Interallied with, any governmental authority, domestic or foreign,
federal, state or local, is required in connection with Interallied's execution,
delivery and performance of this Agreement and consummation of the transaction.
5.8 Accuracy of Representations. None of the representations or
warranties contained in this Agreement, including the Interallied Disclosure
Schedule, contains, or will contain at the Closing Date, any false or misleading
statement, or omits, or will omit at the Closing Date, any fact or statement
necessary to make the other statements or facts set forth herein or therein not
false or misleading.
ARTICLE VI.
COVENANTS PENDING CLOSING
During the period between the date hereof and the earlier of the
Closing Date or Termination.
6.1 Access for Parties. Each party shall give or (in the case of the
Shareholders cause the Acquired Company) to give to other parties and to their
counsels, accountants and other representatives full and reasonable access,
during normal business hours throughout the period prior to the Closing Date, to
all of the entity's properties, books, contracts, commitments, reimbursement and
accounting records relating to the Assets, and all aspects of the equities
business. Such entity shall furnish to any party, during such period, all
information concerning the assets and the business that any party may reasonably
request. Any such investigation or inspection by any party shall not be deemed a
waiver of, or otherwise limit, the representations, warranties and covenants of
other party or parties contained herein.
10
<PAGE>
6.2 Conduct of Business or Status. The Shareholders shall cause the
business to be operated by the Acquired Company solely in the usual and ordinary
course and in compliance with the terms of this Agreement. Without limiting the
generality of the foregoing, the Shareholders will cause the Acquired Company to
use its best efforts to preserve the business and its organization so as to (i)
keep available the services of the present employees and agents of the Acquired
Company; (ii) complete or maintain all of the Contracts in full force and effect
in accordance with their existing terms, unimpaired by litigation; (iii)
maintain the integrity of all confidential information regarding the business
presently conducted by it; (iv) maintain in full force and effect the insurance
policies (or policies providing substantially the same coverage; and (v)
preserve the goodwill of, and the business and contractual relationship with,
suppliers, customers and others having relations with the business.
6.3 Certain Prohibitions. The Shareholders shall cause the Acquired
Company not to and Interallied shall not do anything that would result in a
breach of any representations or warranties of Interallied or the Acquired
Company contained herein..
6.4 Consents and Notices. Each of the Shareholders, Interallied and the
Acquired Company shall, on or prior to the Closing Date, at their own expense,
obtain all Consents.
6.5 Mutual Cooperation. The parties hereto will cooperate with each
other, and will use all reasonable efforts to cause the fulfillment of the
conditions to the parties' obligations hereunder and to obtain as promptly as
possible all Consents, authorizations, orders or approvals from each and every
third party, whether private or governmental, required in connection with the
transactions contemplated by this Agreement.
6.6 Changes in Representations and Warranties. Between the date of this
Agreement and the Closing Date, neither the Shareholders or the Acquired Company
or Interallied shall directly or indirectly enter into any transaction, take any
action, or by inaction permit an event to occur, which would result in any of
its or his representations and warranties herein contained not being true and
correct at and as of the Closing Date. Each party shall promptly give written
notice to the other upon becoming aware of (A) any fact which, if known on the
date hereof, would have been required to be set forth or disclosed pursuant to
this Agreement and (B) any threatened breach in any material respect of any of
their respective representations and warranties contained in this Agreement and
with respect to the latter shall use all reasonable efforts to remedy same.
6.7 Exclusivity to Interallied. Neither the Shareholders nor the
Acquired Company, its officers, directors, representatives, or agents, as
appropriate, shall from the date hereof until the Closing or termination, hold
discussions with any person other than Interallied concerning the sale of the
Acquired Company shares or its assets or the business, solicit, negotiate or
entertain any inquiries, proposals or offers to purchase its assets, shares or
business from any person other than Interallied, or disclose any information
concerning the business to any person other than Interallied. This restriction
shall lapse if the Closing shall not have occurred by April 28, 1999.
11
<PAGE>
6.8 Confidentiality. Neither party will at any time divulge, furnish to
or make access to anyone any information with respect to confidential
information or trade secrets of the other party.
6.9 Public Announcement. Neither party shall make a public announcement
of this transaction without the prior approval of the other party. In the case
of Interallied such approval shall not be unreasonably or delayed and shall be
given promptly.
ARTICLE VII
CONDITIONS TO SHAREHOLDERS' OBLIGATIONS
In addition to the deliveries provided for in Article III the
Shareholders' obligation to consummate the Closing is subject to the following
conditions:
7.1 Compliance by Interallied. Interallied shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by Interallied prior to or on the Closing Date.
7.2 Accuracy of Interallied's Representations. Interallied's
representations and warranties contained in this Agreement (including the
exhibits hereto) or any schedule, certificate, or other instrument delivered
pursuant to the provisions hereof or in connection with the transactions
contemplated hereby shall be true in all material respects at and as of the
Closing Date.
7.3 Litigation. No litigation seeking to enjoin the transactions
contemplated by this Agreement or to obtain damages on account hereof shall be
pending or threatened.
7.4 Consents. The Consents shall have been obtained.
7.5 Documents. All documents and instruments to be delivered by
Interallied to the Shareholders at the Closing pursuant to Section 3.2 shall
have been delivered in accordance with such section.
12
<PAGE>
ARTICLE VIII
CONDITIONS TO INTERALLIED'S OBLIGATIONS
In addition to the deliveries provided for in Article 3, Interallied's
obligation to consummate the Closing is subject to the following conditions:
8.1 Compliance by the Shareholders. The Shareholders shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by the Acquired Company or the
Shareholders prior to or on the Closing Date.
8.2 Accuracy of The Shareholders' Representations. The representations
and warranties of the Shareholders contained in this Agreement (including the
exhibits hereto and the Disclosure Schedule) or any schedule, certificate, or
other instrument delivered pursuant to the provisions hereof or in connection
with the transactions contemplated hereby shall be true in all material
respects.
8.3 Material Adverse Change. Except as set forth in the Disclosure
Schedule, no Material Adverse Change shall have occurred subsequent to the date
hereof in the financial position, results of operations, liabilities of the
business or the assets of the Acquired Company, nor shall any event or
circumstance have occurred which would result in a Material Adverse Change in
the financial position, results of operations, liabilities, of the business or
the assets of the Acquired Company.
8.4 Litigation. No litigation seeking to enjoin the transactions
contemplated by this Agreement or to obtain damages on account hereof shall be
pending or to Interallied's Knowledge be threatened.
8.5 Consents. The Consents shall have been obtained.
8.6 Documents. All documents and instruments to be delivered to
Interallied by the Shareholders at the Closing shall have been delivered
pursuant to Section 3.1 and in accordance with such section.
13
<PAGE>
ARTICLE IX
BROKERS
9. Brokers. Interallied represents to the Shareholders, and the
Shareholders represent to Interallied, that there is no broker or finder
entitled to a fee or other compensation for bringing the parties together to
effect the Exchange.
ARTICLE X
MISCELLANEOUS
10.1 Expenses. Except as otherwise provided herein, the Shareholders
and Interallied shall each pay its own expenses incident to the negotiation,
preparation, and carrying out of this Agreement, including all fees and expenses
of its counsel and accountants for all activities of such counsel and
accountants undertaken pursuant to this Agreement, irrespective of whether or
not the transactions contemplated hereby are consummated.
10.2 Survival of Representations, Warranties and Covenants. All
statements contained in this Agreement or in any certificate delivered by or on
behalf of the Shareholders or Interallied pursuant hereto, or in connection with
the transactions contemplated hereby shall be deemed representations, warranties
and covenants by the Shareholders or Interallied, as the case may be, hereunder.
All representations, warranties, and covenants made by the Shareholders or
Interallied in this Agreement, or pursuant hereto, shall survive the Closing,
but shall terminate two years from the Closing Date.
10.3 Succession and Assignments; Third Party Beneficiaries. This
Agreement may not be assigned (either voluntarily or involuntarily) by any party
hereto without the express written consent of the other party. Any attempted
assignment in violation of this Section shall be void and ineffective for all
purposes. In the event of an assignment permitted by this Section, this
Agreement shall be binding upon the heirs, successors and assigns of the parties
hereto. There shall be no third party beneficiaries of this Agreement.
10.4 Notices. All notices, requests, demands, or other communications
with respect to this Agreement shall be in writing and shall be (i) sent by
facsimile transmission, (ii) or with respect of notices from the United States
sent by the United States Postal Service, registered or certified mail, return
receipt requested, or (iii) personally delivered by a nationally recognized
express overnight
14
<PAGE>
courier service, charges prepaid, to the following addresses (or such other
addresses as the parties may specify from time to time in accordance with this
Section):
(a) Interallied Group, Inc.
1 Jacqueline Street
Suite 102
New Windsor, New York 12553
Fax. No.: (914) 534-9637
With a copy to:
Parker Duryee Rosoff & Haft
529 Fifth Avenue
New York, New York 10017
Attn: Michael DiGiovanna, Esq.
Fax No.: (212) 972-9487
(b) To Shareholders
at the address set forth on the signature
page hereof
All such notices shall, when sent in accordance with the preceding sentence, be
deemed to have been given and received on the earliest of (i) the day delivered
to such address or sent by facsimile transmission, (ii) the fifth business day
following the date deposited with the United States Postal Service, or (iii) the
next business day after shipment by such courier service.
10.5 Construction. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of Florida without giving effect
to the principles of conflicts of law thereof.
10.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same Agreement.
10.7 No Implied Waiver; Remedies. No failure or delay on the part of
the parties hereto to exercise any right, power, or privilege hereunder or under
any instrument executed pursuant hereto shall operate as a waiver nor shall any
single or partial exercise of any right, power, or privilege preclude any other
or further exercise thereof or the exercise of any other right, power, or
privilege.
15
<PAGE>
All rights, powers, and privileges granted herein shall be in addition to other
rights and remedies to which the parties may be entitled at law or in equity.
10.8 Entire Agreement. This Agreement, including any exhibits and
Disclosure Schedules attached hereto, sets forth the entire understandings of
the parties with respect to the subject matter hereof, and it incorporates and
merges any and all previous communications, understandings, oral or written as
to the subject matter hereof, and cannot be amended, waived or changed except in
writing, signed by the party to be bound thereby.
10.9 Headings. The headings of the Sections of this Agreement, where
employed, are for the convenience of reference only and do not form a part
hereof and in no way modify, interpret or construe the meanings of the parties.
10.10 Severability. To the extent that any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted hereof and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
date hereof.
INTERALLIED GROUP, INC.
By:__________________________________
16
<PAGE>
Investors - Signature & Address Shares Number of Shares of Interallied
to be Received Upon
the Exchange
50,000
- --------------------------------
George Zarcadoolas
c/o Dining Experience, Inc.
P.O. Box 95
Varls Gate, New York 12584
150,000
- ---------------------------------
Rhonda Rabetsky
c/o Dining Experience, Inc.
P.O. Box 95
Varls Gate, New York 12584
300,000
- ---------------------------------
Joseph Columbo
17
<PAGE>
Subsidiary List
(to come)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains financial information extracted from Balance Sheet,
Statement of Operations, Statement of Cash Flows and Notes thereto incorporated
in Part 1, Item 13 of this Form 10-SB and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,417
<SECURITIES> 0
<RECEIVABLES> 93,167
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 95,584
<PP&E> 17,547
<DEPRECIATION> 0
<TOTAL-ASSETS> 357,789
<CURRENT-LIABILITIES> 125,656
<BONDS> 0
16,613
0
<COMMON> 0
<OTHER-SE> 1,280,874
<TOTAL-LIABILITY-AND-EQUITY> 357,789
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 135,918
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (431)
<INCOME-PRETAX> 19,186
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,186
<EPS-BASIC> 0.01
<EPS-DILUTED> 0.01
</TABLE>
