SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
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GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant To Section 12(g) of the Securities Exchange Act of 1934
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Net Master Consultants, Inc.
formerly Houston Produce Corporation
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Texas 76-027334
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
34700 Pacific Coast Highway, Suite 303, Capistrano Beach CA 92624
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 248-1765
The following Securities are to be registered pursuant to Section 12(g) of the
Act:
Class-A Common Voting Equity Stock
3,167,800
November 23, 1999
The EXHIBIT INDEX is located at page 39 - of this Registration Statement
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PART I
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Unnumbered Item: Introduction
This registration statement is voluntarily filed pursuant to Section 12(g)
of the Securities Exchange Act of 1934, in order to comply with the requirements
of National Association of Securities Dealers for continued quotation on the
Over the Counter Bulletin Board, often called "OTCBB". This Registrant's common
stock is presently quoted on the OTCBB. The requirements of the OTCBB are that
the financial statements and information about the Registrant be reported
periodically to the Commission and be and become information that the public can
access easily. This issuer wishes to report and provide disclosure voluntarily,
and will file periodic reports in the event that its obligation to file such
reports is suspended under the Exchange Act.
This Registrant may be the subject of a "Reverse Acquisition". A reverse
acquisition is the acquisition of a private ("Target") company by a public
company, by which the private company's shareholders acquire control of the
public company. While no negotiations are in progress, and no potential targets
have been identified, the business plan of this Registrant is to find such a
target or targets, and attempt to acquire them for stock. While no such
arrangements or plans have been adopted or are presently under consideration, it
would be expected that a reverse acquisition of a target company or business
would be associated with some private placements and/or limited offerings of
common stock of this Registrant for cash. Such placements, or offerings, if and
when made or extended, would be made with disclosure and reliance on the
businesses and assets to be acquired, and not upon the present condition of this
Registrant.
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Item 1. Description of Business.
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(a) Business Development.
(1) Form and Year of Organization. This Corporation ("the Registrant") Net
Masters Consultants, Inc. was incorporated in Texas on December 28, 1988, as
Houston Produce Corporation. The company intended to import fruits and
vegetables from Latin America for sale in the United States market; however, it
has remained dormant until its reactivation in March of 1997. As of this date,
the issuer continues to be a development stage company. On June 24, 1997, the
issuer changed its name to Net Masters Consultants, Inc. and increased and
changed its authorized capital to 100,000,000 shares of par value $0.0001. The
Registrant had intended to become a global Internet Media company that would
offer a network of branded World-Wide Web programming that would serve millions
of users daily. The Registrant intended to provide targeted resources and
communications services, attracting a broad range of audiences, based upon
demographic, key-subject and geographic interests. To date the Registrant has
not succeeded in launching operations pursuant to its business plan, and that
plan was abandoned, on October 1, 1999. Management is presently engaged in a
search for a profitable business opportunity, by acquisition or combination.
This Registrant has never been a "Blank Check Company", commonly called a
"Blind Pool", as referred to in either Rule 419 or Rule 504, or at any time its
founders or others were offered, purchased or acquired the outstanding
securities of this Registrant. After abandoning its business plan, it became a
company whose business plan was to find a profitable business combination. As a
practical matter, the Registrant is required to register its common stock
pursuant to ss.12(g) of the 1934 Act, and to pursue continued acceptance for
quotation on the OTCBB if it is to have any chance to compete in with other
issuers or registrants, for business combinations by reverse acquisition. There
are no lock-up or shareholder pooling agreements between or among shareholders
of this Registrant.
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All shares are owned and controlled independently by the persons to whom they
are issued. This Registrant has no Internet address.
Founders Shares: On December 29, 1988, 33,000 shares of common stock were
issued in exchange for organizational services and costs, valued by management
at $33.00. These shares were issued to the two founding shareholders. On March
27, 1997, the Issuer authorized a 1,000 to one forward split of the existing
33,000 shares to 33,000,000 shares of par value $0.0001, immediately following
which forward split, the Corporation resolved to cancel and replace the
founders' 33,000,000 shares with 3,000,000 replacement founders' shares.
Further Issuances: On May 22, 1997, the Issuer authorized the issuance of
20,000 shares for $100,000.00, pursuant to Regulation D, Rule 504. On May 12,
1998, the Issuer authorized the issuance of 2,800 shares for $2,800.00, pursuant
to Regulation D, Rule 504. As a result of the foregoing, on October 16, 1998,
the Issuer had 3,022,800 shares issued and outstanding, among 48 shareholders.
On or about December 29, 1998, the company made a further issuance of 50,000
shares to a single investor, pursuant Regulation D, Rule 504, for $5,000.00
cash; and similarly on March 3, 1999, a further placement for cash, of 95,000
shares, pursuant to the Rule.
As a result of the foregoing, on March 31, 1998, and May 15, 1999 the
Issuer had 3,167,800 shares issued and outstanding, among approximately 51
shareholders, as follows:
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Issuance:
Reference Number Original Forward Split
Exemption Issuances 1 to 1,000
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1-ss.4(2) 33,000 33,000,000
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2- ss.4(2) Founders
Adjustment (30,000,000)
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Subtotal 33,000 3,000,000
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3-ss.504 20,000
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4-ss.504 2,800
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5-ss.504 50,000
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6-ss.504 95,000
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Subtotal 167,800
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Totals 3,167,800
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Substantially all of its non-affiliate owned shares have become or were
from issuance free of restriction in conformity with Rule 144, and might be
resold in brokerage transactions, in compliance with that Rule. Please see ITEM
8 of this PART I, DESCRIPTION OF SECURITIES, for more information.
(2) Bankruptcy, Receivership or Similar Proceeding. None from inception to
date.
(b) Business of the Issuer. This Company has no current business. Its business
plan is to seek one or more profitable business combinations or acquisitions to
secure profitability for shareholders. It has no day to day operations at the
present time. Its officers and directors devote only insubstantial time and
attention to the affairs of this issuer at the present time, for the reason that
only such attention is presently required. Management has adopted a conservative
and patient policy of seeking opportunities
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of exceptional quality, in management's view, and to accept that it may have to
wait longer, as a result, before consummating any transactions to create
profitability for its shareholder. Management recognizes that the higher the
standards it imposes upon itself, the greater may be it's competitive
disadvantages with other more attractive acquiring interests or entities. Due to
circumstances unique to this Registrant, it is not in a position to consider any
specific proposal for the use of this Registrant in reverse merger transactions,
for the reason that it is not now qualified for continued quotation on the OTC
Bulletin Board on or after February of 2000. Management has determined that it
must so qualify itself by this 1934 Act Registration of its common stock, as a
class, pursuant to ss.12(g) of the Securities Act of 1934, before it can present
itself as a viable competitor in the reverse acquisition arena.
Limited Scope and Number of Possible Acquisitions: The Company does not
intend to restrict its consideration to any particular business or industry
segment, and the Company may consider, among others, finance, brokerage,
insurance, transportation, communications, research and development, service,
natural resources, manufacturing or high-technology. Of course, because of the
Company's limited resources, the scope and number of suitable candidate business
ventures available will be limited accordingly, and most likely the Company will
not be able to participate in more than a single business venture. Accordingly,
it is anticipated that the Company will not be able to diversify, but may be
limited to one merger or acquisition because of limited financing. This lack of
diversification will not permit the Company to offset potential losses from one
business opportunity against profits from another. To a large extent, a decision
to participate in a specific business opportunity may be made upon management's
analysis of the quality of the other firm's management and personnel, the
anticipated acceptability of new products or marketing concepts, the merit of
technological changes and numerous other factors which are difficult, if not
impossible, to analyze through the application of any objective criteria. In
many instances, it is anticipated that the historical operations of a specific
firm may not necessarily be indicative of the potential for the future because
of the necessity to substantially shift a marketing approach, expand operations,
change product emphasis, change or substantially augment management, or make
other changes. The Company will be dependent upon the management of a business
opportunity to identify such problems and to implement, or be primarily
responsible for the implementation of, required changes. Because the Company may
participate in a business opportunity with a newly organized firm or with a firm
which is entering a new phase of growth, it should be emphasized that the
Company may incur further risk due to the failure of the target's management to
have proven its abilities or effectiveness, or the failure to establish a market
for the target's products or services, or the failure to prove or predict
profitability.
Probable Industry Segments for Acquisition. While the Company does not
intend to rule out its consideration to any particular business or industry
segment, Management has determined to focus its principal interest in evaluating
development stage companies in the electronic commerce, high- technology,
communication technologies, information services and internet industry segments.
It is nevertheless possible that an outstanding opportunity may develop in other
industry segments, such as finance, brokerage, insurance, transportation,
communications, research and development, service, natural resources,
manufacturing or other high-technology areas.
Reporting under the 1934 Act. Following the effectiveness of this 1934 Act
Registration of the common stock of this Registrant, certain periodic reporting
requirements will be applicable. First and foremost, a 1934 Registrant is
required to file an Annual Report on Form 10-K or 10-KSB, 90 days following the
end of its fiscal year. The key element of such annual filing is Audited
Financial Statement prepared in accordance with standards established by the
Commission. A 1934 Act Registrant also reports on the share ownership of
affiliates and 5% owners, initially, currently and annually. In addition to the
annual reporting, a Registrant is required to file quarterly reports on Form
10-Q or 10-QSB, containing audited or un-audited financial statements, and
reporting other material events. Some events are deemed material enough to
require the filing of a Current Report on Form 8-K.
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Any events may be reported currently, but some events, like changes or
disagreements with auditors, resignation of directors, major acquisitions and
other changes require aggressive current reporting. All reports are filed and
become public information. The practical effects of the foregoing requirements
on the criteria for selection of a target company are two-fold: first, the
target must have audited or auditable financial statements, and the target must
complete an audit for filing promptly upon the consummation of any acquisition;
and, second, that the target management must be ready, willing and able to carry
forth those reporting requirements or face de-listing from the OTCBB, if listed,
and delinquency and possible liability for failure to report.
Transactions with Management. There is no present or foreseeable potential
that this Registrant will acquire a target business or company in which its
present management or principal shareholder, or affiliates, have an ownership
interest. Consideration has been given to corporate policy in this regard, and
it has been determined not to permit any transaction in other than an arm's
length acquisition of business assets owned and controlled by unrelated third
party interests. The basis for this policy is two fold: first, that related
party transactions are unnecessary in the judgment of management and involve
risks not necessary to invite; and second that related party transaction do not
offer the potential profitability for shareholders, that management believes
exists presently in the market place for public issuers amenable to reverse
merger transactions.
Finders fee for Management. No finder's fees will be payable to Management
in connection with any forseeable reverse acquisition. Management is identified
with the principal shareholder. The Principal Shareholder's remaining share
ownership following any reverse acquisition, and the Principal Shareholder might
be expected to sell its controlling interest for consideration from the
acquiring shareholders of the acquisition target. Depending on the quality of
the target company, the principal shareholder may sell all, some, or none of the
control block, as matters for arm's length deal-making, when it comes to that
stage. Additionally, the Principal Shareholder is the Principal Consultant and
provides, has provided and may provide corporate services to the Registrant,
billable hourly in an established and customary manner. No finders fees,
commissions or other bonuses to Management, Principal Shareholder, or
affiliates, for securing or in connection with any acquisition, will be paid or
payable, as a matter of both current economic conditions and corporate policy.
Management has determined that in its view of the current market for such
transactions, such fees or bonuses are not justifiable.
Consultants. This Registrant has only a single consultant, namely Intrepid
International Ltd., a Nevada Corporation, in which one or more of the
Registrant's Officers and directors is an affiliate. No other consultants are
presently engaged nor are there any plans to retain any consultants currently or
for the foreseeable future. It is, of course, conceivable that should a target
business be acquired, one or more consultants may be sought out by the
management of the acquired entity, following a change of control. As of this
time, there is no basis upon which Management could base anything more than mere
speculation as to what manner of consultant, what criteria for seeking or
selecting consultants, or what term of service any such consultant might
require; for the reason that all such consideration would be matters before the
Management of the Registrant only after a change of control which would result
from a reverse acquisition.
Loan Financing not anticipated. There are no foreseeable circumstances
under which loan financing will be sought or needed during Registrant's present
development stage.
Dependence on Management. This Company is required to rely on Management's
skill, experience and judgement, both in regard to extreme selectivity, and in
any final decision to pursue any particular business venture, as well as the
form of any business combination, should agreement be reached at some point to
acquire or combine. Please see Item 2 of this Part, MANAGEMENTS DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION, and also Item 7 of this Part, CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS.
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(1) Principal Products or Services and their Markets. None.
(2) Distribution Methods of the products or services. None.
(3) Status of any publicly announced new product or service. None.
(4) Competitive business conditions and the small business issuer's
competitive position in the industry. Other better capitalized firms are engaged
in the search for acquisitions or business combinations which firms may be able
to offer more and may be more attractive to acquisition candidates. This
Registrant became a candidate for reverse acquisition transactions only this
past October. Management, in evaluating market conditions and unsolicited
proposals, has formed the estimate that the selection of a business combination
is probable within the next twelve months. There is no compelling reason why
this Registrant should be preferred over other reverse-acquisition public
corporation candidates. It has no significant pool of cash it can offer and no
capital formation incentive for its selection. It has a limited shareholder base
insufficient for acquisition target wishing to proceed for application to
NASDAQ. In comparison to other "public shell companies" this Registrant is
unimpressive, in the judgement of management, and totally lacking in unique
features which would make it more attractive or competitive than other "public
shell companies". While management believes that the competition of other
"public shell companies" is intense and growing, it has no basis on which to
quantify its impression. This Registrant is not desperate or overly eager to
find a business partner, and its management has resolved to allow such time as
may be required to find an opportunity of superior value and potential.
Notwithstanding the confidence of management in its knowledge, skill and that of
its consultants and principal shareholder, there can be no assurance that this
issuer will prove competitively attractive to the kinds of transactions it
seeks. Please See the Item 2 of this part, MANAGEMENT DISCUSSION AND ANALYSIS,
for more information and disclosure.
(5) Principal Products or Services and their Markets. None.
(6) Distribution Methods of the products or services. None.
(7) Status of any publicly announced new product or service. None.
(8) Sources of and availability of raw Materials and the names of
principal suppliers. Not Applicable
(9) Dependence on one or a few major customers. Not Applicable
(10) Patents, Trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts. None.
(11) Need for any government approval of principal products or services and
status. Not Applicable
(12) Effect of existing or probable governmental regulations on the
business. Not Applicable. However, this issuer would expect to maintain its
corporate status with the State of its incorporation, and would file its tax
returns and reports required to be filed with the Commission. This issuer wishes
to report and provide disclosure voluntarily, and will file periodic reports in
the event that its obligation to file such reports is suspended under the
Exchange Act. If and when this 1934 Act Registration is effective and clear of
comments by the staff, this issuer will be eligible for continued quotation on
the OTCBB for the purchase and sale of the shares of its common stock in
brokerage transactions. In connection with such continuation on the OTCBB, this
Registrant would expect to comply with NASD regulations, to the extent that any
such regulations are applicable to the conduct of the Registrant's affairs.
(13) Estimate of amount spent on research and development in each of last
two years. None.
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(14) Costs and effects of compliance with environmental laws. Not
Applicable
(15) Number of total employees and full-time employees. None. The
Registrant has two officers who devote an insubstantial amount of time to the
affairs of this Registrant and who serve without compensation.
(16) Year 2000 Compliance, effect on customers and suppliers. None. The
issuer has no computers or digital equipment of its own, no suppliers or
customers. Accordingly, the issuer has determined that it is faced with no year
2000 compliance issues other than those shared by the public in general.
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Item 2. Managements Discussion and Analysis or Plan of Operation.
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(a) Plan of Operation. This Company has no current business. Its business plan
is to seek one or more profitable business combinations or acquisitions to
secure profitability for shareholders.
(1) Plan of Operation for the next twelve months. This Issuer's Management,
and this Issuer's Principal shareholder are in continuous receipt of proposals
from high-technology, telecommunication and internet projects, some new
start-up, some with significant research and development in progress. It has not
been and is not believed to be necessary for this Issuer to advertise, or for
management to travel in search of candidates. It is likely that management might
travel in connection with a candidate it intends to select and with which it
intends to enter into a committed relationship. Extensive due diligence and
evaluation of proposals is made by the principal shareholder in connection with
its own business, and perforce for the benefit of this Issuer.
(i) Cash Requirements and of Need for additional funds, twelve months. This
Company has no immediate or forseeable need for additional funding, from
sources outside of its circle of shareholders, and their consultants,
during the next twelve months. The expenses of its audit, legal and
professional requirements, including expenses in connection with this 1934
Act Registration of its common stock, have been and continue to be advanced
by its management and principal shareholder. No significant cash or funds
are required for its Management to evaluate possible transactions.
Management reports that proposals are regularly made to the management and
that it has not proven necessary for management to engage in costly search
procedures. The issuer enjoys the non-exclusive use of office,
telecommunication and incidental supplies of stationary, provided by its
Officer and Attorneys, who are related to its sole Consultant. These
Officers, Directors, and Attorneys of this Registrant are substantially the
same as those of its sole consultant, such that its maintenance expenses
are minimal and manageable during this period and for the foreseeable
future.
In the event, contrary to the expectation of management, that no
combination is made within the next twelve months, this issuer may be
forced to deal with minimal costs involved in maintenance of corporate
franchise and filing reports as may be required, when and if this 1934 Act
registration is effective. Should this become necessary, the maximum amount
of such advances is estimated not to exceed $20,000.00. Theses expenses
would involve legal and auditing expenses. The Consultant and Counsel have
agreed, informally, to defer compensation, pending acquisition. It is
possible that any advances may be settled by compensation in common stock.
Should further auditing be required, such services by the Independent
Auditor may not be the subject of deferred compensation.
The following language is found in Note 1-a of the independent auditor:
"The Company is in the development stage according to Financial Accounting
Standards Board Statement No. 7 and is currently focusing its intention on
raising capital in order to pursue its goals." Then, at Note 2: "It is
management's plan to find an operating company to merge with." Again at Note 3:
"The Company is
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a development stage company as defined in Financial Accounting Standards Board
Statement No. 7. It is concentrating substantially all of its efforts in raising
capital and developing its business operations in order to generate significant
revenues.
After some unsuccessful efforts to launch operations, the original business
plan was abandoned, on or about October 15, 1999. The Registrant has no present
business or business plan other than to seek a profitable business combination,
most likely in a reverse acquisition or similar transaction. Accordingly, its
plan is to seek one or more profitable business combinations or acquisitions to
secure profitability for shareholders. The issuer will be concentrating on
selecting a business combination candidate, when its 1934 Act Registration is
effective and complete. No current fund raising programs are being conducted or
contemplated before merger, acquisition or combination is announced, and then
any such capital formation would be offered to investors based upon the assets
and businesses to be acquired, and not on this Registrant in its present
condition, without businesses, revenues, or income producing assets.
It is unlikely that this company can attract capital before it identifies
an acquisition target. It is likely that this company can attract capital when
it has done so, based upon the attractiveness of businesses and assets to be
acquired.
This Issuer does not anticipate any contingency upon which it would
voluntarily cease filing reports with the SEC, even though it may cease to be
required to do so. It is in the compelling interest of this Issuer to report its
affairs quarterly, annually and currently, as the case may be, generally to
provide accessible public information to interested parties, and also
specifically to maintain its qualification for the OTCBB, if and when the
Issuer's intended application for submission be effective.
(ii) Summary of Product Research and Development. None.
(iii) Expected purchase or sale of plant and significant equipment.
None.
(iv) Expected significant change in the number of employees. None.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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(b) Discussion and Analysis of Financial Condition and Results of Operations.
(i) Operations and Results for the past two fiscal years. This
Registrant has not succeeded in launching operations during the past
two fiscal years. It has had no revenues to date. It has incurred some
expenses during these periods.
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1998 1997
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Auditing 1,853
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Bank Charges 109
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Travel 3,636
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Legal and Professional 28,695 72,100
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Filing Fees 690
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Other Accounting 250
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Transfer Agency 500
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Contract Services 2,500 2,500
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Misc 990
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TOTALS 33,798 80,025
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(ii) Future Prospects. The Company is unable to predict when it may
participate in a business opportunity. The reason for this uncertainty
arises from its limited resources, and competitive disadvantages with
respect to other public or semi-public issuers. Notwithstanding the
foregoing cautionary statements, assuming the continuation of current
conditions, this issuer would expect to proceed to select a business
combination within no sooner than six months nor expect to close an
acquisition in a shorter period than within the next twelve months. It
cannot attract a partner before it can perfect the continued quotation
of its common stock on the OTCBB by this 1934 Act Registration.
(c) Reverse Acquisition Candidate. The Issuer is searching for a profitable
business opportunity. The acquisition of such an opportunity could and likely
would result in some change in control of the Issuer at such time. This would
likely take the form of a reverse acquisition. That means that this issuer would
likely acquire businesses and assets for stock in an amount that would
effectively transfer control of this issuer to the acquisition target company or
ownership group. It is called a reverse- acquisition because it would be an
acquisition by this issuer in form, but would be an acquisition of this issuer
in substance. Capital formation issues for the future of this Issuer would arise
only when targeted business or assets have been identified. Until such time,
this Issuer has no basis upon which to propose any substantial infusion of
capital from sources outside of its circle of affiliates.
Targeted acquisitions for stock may be accompanied by capital formation
programs, involving knowledgeable investors associated with or contacted by the
owners of a target company. While no such arrangements or plans have been
adopted or are presently under consideration, it would be expected that a
reverse acquisition of a target company or business would be associated with
some private placements and/or limited offerings of common stock of this Issuer
for cash. Such placements, or offerings, if and when made or extended, would be
made with disclosure of and reliance on the businesses and assets to be
acquired, and not upon the present or future condition of this Issuer without
revenues or substantial assets.
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Item 3. Description of Property.
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The Issuer has no property and enjoys the non-exclusive use of offices and
telephone of its officers and attorneys.
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Item 4. Security Ownership of Certain Beneficial Owners and Management.
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(a) Security Ownership of Certain Beneficial Owners. To the best of Registrant's
knowledge and belief the following disclosure presents the total security
ownership of all persons, entities and groups, known to or discoverable by
Registrant, to be the beneficial owner or owners of more than five percent of
any voting class of Registrant's stock. These following 5% or more shareholders
are unrelated to Management or to its sole consultant. Neither management, nor
any affiliate of management, or of the consultant to management, has any
interest in any of the following shareholders, nor do any of the following
shareholders possess any interest or affiliation with either management or its
consultant.
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5% Owners # Shares % of Total
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MFC Merchant Bank S.A. 270,000 8.52
6, Cours de Rive
CH-1211 Geneva 3
Switzerland
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Euroswiss Securities Ltd. 270,000 8.52
Queensway House
Queen Street
St. Helier, Jersey
Channel Islands
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Harpings Management Ltd. 270,000 8.52
Market Street
Douglas, Isle of Man
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MFC Securities AG 270,000 8.52
Burglistrasse 6
CH-8002 Zurich
Switzerland
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First Capital Invest Corp. 270,000 8.52
Muhlebachstrasse 54
CH-8032 Zurich
Switzerland
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Valorinvest Ltd. 270,000 8.52
Quai des Bergues
CH-1201 Geneva
Switzerland
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Value Invest Ltd. 270,000 8.52
Letzigraben 89
CH-8040 Zurich
Switzerland
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Pensbreigh Holdings Ltd. 270,000 8.52
Chancery Chambers
Bridgetown, Barbados
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Volendam Securities C.V. 270,000 8.52
Veerkade 2
NL-3016 de Rotterdam
Postbus 23444
NL-3001 KK Rotterdam
Netherlands
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Noble Trading 270,000 8.52
Shipley House
So. Shipley Street
P.O. Box N-7755
Nassau, Bahamas
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Total 5% Owners 2,700,000 85.23
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Total Issued and Outstanding 3,167,800 100.00
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(b) Security Ownership of Management. To the best of Registrant's knowledge and
belief the following disclosure presents the total beneficial security ownership
of all Directors and Nominees, naming them, and by all Officers and Directors as
a group, without naming them, of Registrant, known to or discoverable by
Registrant.
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NAME AND ADDRESS OF BENEFICIAL OWNER ACTUAL %
SHARES
OWNED
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Nora Coccaro (1) -0- 0.00
1177 W. Hastings, Suite 1818
Vancouver BC V6E 2K3
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J. Dan Sifford, Jr. (1) -0- 0.00
62 Bay Heights Drive
Miami, Florida 33133
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All Officers and Directors as a Group 0 0.00
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Total Shares Issued and Outstanding 3,167,800 100.00
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(1) Mr. Sifford and Ms. Coccaro are presently Interim Officers and Directors,
for the benefit of Shareholders. Mr. Sifford is an officer of the Registrant's
sole consultant. Neither Mr. Sifford nor the consultant are shareholders of the
Registrant. Please see the following Items 5, 6 and 7 for expanded disclosure
and further information.
(c) Changes in Control. There are no arrangements known to Registrant, including
any pledge by any persons, of securities of Registrant, which may at a
subsequent date result in a change of control of the Issuer. The Issuer is
searching for a profitable business opportunity. The Issuer is searching for a
profitable business opportunity. The acquisition of such an opportunity could
and likely would result in some change in control of the Issuer at such time.
This would likely take the form of a reverse acquisition. That means that this
issuer would likely acquire businesses and assets for stock in an amount that
would effectively transfer control of this issuer to the acquisition target
company or ownership group. It is called a reverse-acquisition because it would
be an acquisition by this issuer in form, but would be an acquisition of this
issuer in substance.
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Item 5. Directors, Executive Officers, Promoters and Control Persons.
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The following persons are Officers/Directors of Registrant, to serve until
their successors might be elected or appointed. The time of the next meeting of
shareholders has not been determined and is not likely to take place before a
targeted acquisition or combination is determined.
J. Dan Sifford, Jr. (age 61) is a director and President of Registrant. He
grew up in Coral Gables, Florida, where he attended Coral Gables High School and
the University of Miami. After leaving the University of Miami, Mr. Sifford
formed a wholesale consumer goods distribution company which operated throughout
the southeastern United States and all of Latin America. In 1965, as an
extension of the operations of the original company, he founded Indiasa
Corporation (Indiasa), a Panamanian company which was involved in supply and
financing arrangements with many of the Latin American Governments, in
particular, their air forces and their national airlines. As customer
requirements dictated, separate subsidiaries were established to handle specific
activities. During each of the past five years he has served as President of
Indiasa, which serves only as a holding company owning: 100% of Indiasa Aviation
Corp. (a company which owns aircraft but has no operations); 100% of Overseas
Aviation Corporation (a company which owns Air Carrier Certificates but has no
operations); 50% of Robmar International, S.A. (a company operates a
manufacturing plant in Argentina and Brazil, but in which Mr. Sifford holds no
office). In addition to his general aviation experience, Mr. Sifford, an Airline
Transport rated pilot, has twenty two years experience in the airline business,
and is currently the President of Airline of the Virgin Islands, Ltd. a commuter
passenger airline operating in the Caribbean, and has been its president
continuously during each of the past five years.
Mr. Sifford is not and has never been a broker-dealer. He has acted
primarily as consultant, and in some cases has served as an interim officer and
director of public companies in their development stage. The following
disclosure identifies those public companies: Air Epicurean, Inc., All American
Aircraft, Earth Industries, DP Charters, Inc., Ecklan Corporation, EditWorks,
Ltd., Market., Market Formulation & Research, Inc., NetAir.com, Inc., NSJ
Mortgage Capital Corporation, Inc., North American Security & Fire, Oasis 4th
Movie Project, Professional Recovery Systems, Inc., Richmond Services, Inc.,
Telecommunications Technologies, Ltd., and World Staffing II, Inc.
Of these last mentioned companies, he is currently serving in this
Registrant, in DP Charters, in Ecklan Corporation, in Oasis 4th Movie Project,
in Richmond Services, Inc, and in NetAir.com, Inc.
Nora Coccaro (age 43) is a director and corporate secretary of Registrant.
She grew up in Montevideo, Uruguay, where she attended medical school at the
University of Uruguay. She has been involved in the North and South American
financial communities for the past 15 years during which time she has gained
extensive experience in management of public companies and particularly in
Canadian and American mining activities in South America. She was Venezuelan
Operations Manager of Ourominas Minerals Inc. from 1995 until 1997. In 1996 and
1997, she was retained by Homestake Mining Company as consultant in Central
America to review mineral title administration procedures, land status and
market research. In 1998, Ms. Ms Coccaro was appointed Director of Americana
Gold & Diamond Holdings, Inc. a Nasdaq Bulletin Board company and from 1998
until May 1999 she was Director and Executive Vice-President of Black Swan Gold
Mines, a Toronto Senior company. Since September 1998 she also served as the
Consul of Uruguay to Western Canada.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
12
<PAGE>
- --------------------------------------------------------------------------------
Item 6. Executive Compensation.
- --------------------------------------------------------------------------------
Neither J. Dan Sifford nor Nora Coccaro are compensated directly by this
Registrant. Mr. Sifford is compensated indirectly as an Officer of the
Registrant's Sole consultant, Intrepid International, S. A. (Panama)/Intrepid
International, Ltd. ("Intrepid US"). Intrepid bills the Registrant on a time/fee
basis. Mr. Sifford's compensation from Intrepid is not directly related or
linked to the amount of fees billed by Intrepid for Mr. Sifford's actual
time/fee. For more information and expanded disclosure, please refer to the
following Item 7, and to Exhibit 6.1.
- --------------------------------------------------------------------------------
Item 7. Certain Relationships and Related Transactions.
- --------------------------------------------------------------------------------
Intrepid International, S. A. ("Intrepid") is the sole consultant of this
Registrant. The Officer/Director of this Registrant is an affiliate of Intrepid.
Intrepid International, S. A. was incorporated in the Republic of Panama in 1984
to offer financial services to natural resource companies, primarily those
engaged in the production of oil and gas. Following the world wide collapse of
oil prices in the mid-eighties, Intrepid broadened the focus of its universe of
support services to include a wider range of companies, with an emphasis on
public companies and private companies, companies engaged in the transition from
privately held to publicly held, and development stage companies, whether public
or private, requiring professional business and corporate guidance. In August of
1997 the Company sought a United States Representative and entered into a
relationship with a group of corporate and business specialists who, after
contracting with the Company, incorporated as Intrepid International, Ltd.
("Intrepid US") to provide the required representation and agency for the
Company in North America and Europe. Intrepid US is incorporated in the State of
Nevada. Intrepid is not an investment banker, nor a broker or dealer in
securities. Intrepid is a provider of technical support services to client
companies, generally, and an occasional investor for its own account. It is not,
and its officers and affiliates are not shareholders of this Registrant. The
services of Intrepid and its associated counsel are billed monthly on a time/fee
basis. Please see Exhibits 6.1, 6.2 and 6.3 for the retainer agreements by which
Intrepid and its associated counsel were and are retained.
J. Dan Sifford, Jr., is the United States Managing Director for Intrepid
International, S.A. (Panama). He is fluent in the Spanish Language. His
biographical information is found under Item 5 of this Part, DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The officers and directors of Intrepid International, Ltd. (Nevada)
(Intrepid US) are two individuals; KIRT W. JAMES, and J. DAN SIFFORD, JR. The
Officers, Owners and Directors of the Panama parent do not direct or participate
in the management of this Registrant.
For purposes of the following paragraphs of this Item, "Company" refers to
the consultant Intrepid International, S.A., a Panama Corporation, and does not
refer to the Registrant.
Laurencio Jaen O., an original incorporator who has served as President and
Director of the Company since its inception in 1984, resides in Panama City,
Republic of Panama. He is, and has been for the past twenty five years, Vice
President of Indiasa Corporation ("Indiasa"), a Panamanian corporation, which,
through one of its subsidiaries, Robmar International, is involved in the
manufacture and distribution of chemical products in Argentina and Brazil and
which, through its former subsidiary Indiasa Aviation Corporation, was, for
eight years ending in 1981, engaged in aviation consulting, the leasing,
purchase and sale of aircraft, and the operation of a cargo airline, primarily
in Latin America. Mr. Jaen was a founder of PAISA, Panama's international
airline, served as president of the Colon Free Zone (the world's largest free
trade zone), and as Director of Panama's
13
<PAGE>
Social Security Administration. He has also served as the President of the
Panamanian Chamber of Commerce, and as a member of the Board of Presidential
Advisors of the Republic of Panama.
Teodoro F. Franco L., Secretary and a Director of the Company, has, for
thirty years, been a specialist in maritime and aviation law. Mr. Franco is a
partner in Franco and Franco, a Panama law firm with offices around the world.
In addition to his law practice he has served as Panamanian Consul to Liverpool,
England and for the past five years as Ambassador to Great Britain. The firm of
Franco and Franco is regarded with the highest degree of integrity and
professionalism in the business and political community in Panama with its
partners and several of its associates holding or having held public office in
Panama. The firm practices maritime, aviation and commercial law and currently
is the legal firm for: IBERIA (the Spanish national airline), KLM (the Dutch
national airline), VIASA (the Venezuelan national airline), Aeroflot (the
Russian national airline) and various smaller Latin American national airlines
as well as being the registered agents for thousands of ocean going ships around
the world flying the Panamanian flag. Mr. Franco brings to the Company a wealth
of international legal, commercial and diplomatic experience.
Leopoldo Kennion G., Treasurer and a Director of the Company, is, and has
for twenty years, been a Certified Public Accountant specializing in
international accounting and is an associate in the law firm of Franco and
Franco. Mr. Kennion practices maritime, aviation and commercial accounting
serving the specialized needs of the transnational clients of Franco and Franco
by providing an interface between them and their auditors.
- --------------------------------------------------------------------------------
Item 8. Description of Securities.
- --------------------------------------------------------------------------------
The Company's Capital Authorized and Issued. The Issuer Company is
authorized to issue 100,000,000 shares of a single class of Common Voting Stock,
of par value $0.0001, of which 3,167,800 are issued and outstanding, as of
October 15, 1999.
Common Stock. All shares of Common Stock when issued were fully paid for
and nonassessable. Each holder of Common Stock is entitled to one vote per share
on all matters submitted for action by the stockholders. All shares of Common
Stock are equal to each other with respect to the election of directors and
cumulative voting is not permitted; therefore, the holders of more than 50% of
the outstanding Common Stock can, if they choose to do so, elect all of the
directors. The terms of the directors are not staggered. Directors are elected
annually to serve until the next annual meeting of shareholders and until their
successor is elected and qualified. There are no preemptive rights to purchase
any additional Common Stock or other securities of the Company. The owners of a
majority of the common stock may also take any action without prior notice or
meeting which a majority of shareholders could have taken at a regularly called
shareholders meeting, giving notice to all shareholders thereafter of the action
taken. In the event of liquidation or dissolution, holders of Common Stock are
entitled to receive, pro rata, the assets remaining, after creditors, and
holders of any class of stock having liquidation rights senior to holders of
shares of Common Stock, have been paid in full.
Secondary Trading refers to the marketability to resell the securities of
this issuer in brokerage transactions, and that marketability is generally
governed by Rule 144, promulgated by the Securities and Exchange Commission
pursuant to ss.3 of the Securities Act of 1933. Securities which have not been
registered pursuant to the Securities Act of 1933, but were exempt from such
registration when issued, are generally "Restricted Securities" as defined by
Rule 144(a). The impact of the restrictions of Rule 144 are (a) a basic one year
holding period from purchase; and (b) a limitation of the amount any shareholder
may sell during the second year, as to non-affiliates of the Issuer; however, as
to shares owned by affiliates of the Issuer, the second-year limitation of
amounts attaches and continues,
14
<PAGE>
at least until such person has ceased to be an affiliate for 90 days or more.
The limitation of amounts is generally 1% of the total issued and outstanding in
any 90 day period.
Unrestricted Shares of Common Stock. 3,167,800 shares of common stock are
issued and outstanding, of which 3,000,000 shares are held by affiliates of the
Registrant, and of which 167,800 shares are owned by non-affiliates of the
Registrant and are believed to be unrestricted securities which could be sold in
brokerage transaction in compliance with Rule 144. These 167,800 shares were
issued pursuant to Rule 504 on or before April 6, 1999, and were not, when
issued Restricted Securities, as defined by Rule 144(a). The affiliate shares
were issued on or about December 29, 1988, pursuant to ss.4(2) of the 1933 Act,
and are more than two years old. Rule 144 would permit affiliate sales in
limited amounts, as discussed in the previous paragraph. Sales in amount limited
by Rule 144 are commonly called "dribbling".
Options and Derivative Securities. There are no outstanding options or
derivative securities of this Registrant. There are no shares issued or reserved
which are subject to options or warrants to purchase, or securities convertible
into common stock of this Registrant.
Risks of "Penny Stock." The Company's common stock may be deemed to be
"penny stock" as that term is defined in Reg.Section 240.3a51-1 of the
Securities and Exchange Commission. Penny stock share stocks (i) with a price of
less than five dollars per share; (ii) that are not traded on a "recognized"
national exchange; (iii) whose prices are not quoted on the NASDAQ automated
quotation system (NASDAQ) listed stocks must still meet requirement (i) above);
or (iv) in issuers with net tangible assets less than $2,000,000 (if the issuer
has been in continuous operation for at least three years) or $5,000,000 (if in
continuous operation for less than three years), or with average revenues of
less than $6,000,000 for the last three years.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Reg.
Section 240.15g-2 of the Securities and Exchange Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in the Company's
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock."
Moreover, Reg. Section 240.15g-9 of the Securities and Exchange Commission
requires broker-dealers in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for investors in
the Company's common stock to resell their shares to third parties or to
otherwise dispose of them.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
15
<PAGE>
- --------------------------------------------------------------------------------
PART II
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Item 1.
Market Price of and Dividends on Registrant's Common Equity
and Shareholder Matters Equity and Shareholder Matters.
- --------------------------------------------------------------------------------
(a) Market Information. The Common Stock of this Issuer is quoted Over the
Counter on the Bulletin Board ("OTCBB"). There was no substantial market
activity before December 1998. Based upon standard reporting sources, the
following information is provided:
<TABLE>
<CAPTION>
=============================================================================================================
PERIOD HIGH BID LOW BID PERIOD HIGH BID LOW BID
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1st 1998 1st 1999 6.25 4.50
- -------------------------------------------------------------------------------------------------------------
2nd 1998 2nd 1999 7.00 5.00
- -------------------------------------------------------------------------------------------------------------
3rd 1998 3rd 1999 5.19 2.88
- -------------------------------------------------------------------------------------------------------------
4th 1998 Oct 1999 3.44 2.88
=============================================================================================================
</TABLE>
The foregoing price information is based upon inter-dealer prices without
retail mark-up, mark- down or commissions and may not reflect actual
transactions, and is based upon standard reporting sources, taken off the
Internet.
(b) Holders. There are presently approximately 65 shareholders of the common
stock of this Registrant.
(c) Dividends. No cash dividends have been paid by the Company on its Common
Stock or other Stock and no such payment is anticipated in the foreseeable
future.
(d) Reverse Acquisitions. A reverse acquisition of a target business or company
would be expected to involve a change of control of the Registrant, and the
designation of new management. The financial statements of this Registrant would
become largely unreflective of the true condition of the Registrant after such
an acquisition. Shareholder approval would be solicited, pursuant to the laws of
the State of Nevada, to approve the acquisition, change of control, and any
material corporate changes incidental to the reorganization of this Registrant.
In connection with the solicitation of shareholder approval, whether or not
proxies are solicited, the Registrant would provide shareholders with the
fullest possible disclosure of all information material to shareholder
consideration, and such disclosure would include audited financial statements of
the target entity, if available. If shareholder approval is sought in advance of
audited financial statements of an acquisition target, the authority of
management to consummate any transaction would be contingent on a proper audit
of the target meeting the criteria of any un-audited information relied upon by
shareholders.
- --------------------------------------------------------------------------------
Item 2. Legal Proceedings.
- --------------------------------------------------------------------------------
There are no proceedings, legal, enforcement or administrative, pending,
threatened or anticipated involving or affecting this Issuer.
16
<PAGE>
- --------------------------------------------------------------------------------
Item 3. Changes in and Disagreements with Accountants.
- --------------------------------------------------------------------------------
There have been no disagreements of any sort or kind with Auditors or
Accountants respecting any matter or item reflected in the financial statements
of this Issuer.
- --------------------------------------------------------------------------------
Item 4. Recent Sales of Unregistered Securities.
- --------------------------------------------------------------------------------
The following disclosure presents:
(a) The date, title and amount of unregistered securities sold within the
past three years.
(b) Principal Underwriters, if any. If the small business issuer did not
publicly offer any securities, identify the persons or class of persons to whom
the small business issuer sold the securities.
No Underwriters or Underwriting. No discounts or commissions.
(c) For securities sold for cash, the total offering price and the total
underwriting discounts or commissions. For securities sold other than for cash,
describe the transaction and the type and amount of consideration received by
the small business issuer.
(d) The Section of the Securities Act or the rule of the Commission under
which the small business issuer claimed exemption from registration and the
facts relied upon to make the exemption available.
(e) If the securities sold are convertible or exchangeable into equity
securities, or are warrants or options representing equity securities, disclose
the terms of conversion or exercise of the securities.
No convertible or exchangeable securities, warrants or options.
<TABLE>
<CAPTION>
====================================================================================================================
Date Title Exemption Price Amount Cash
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
May 22, 1997 Common Stock Rule 504 $5.00 20,000 shares $100,000
- --------------------------------------------------------------------------------------------------------------------
Purchased by 18 sophisticated investors with preexisting relationships to
management.
====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================
Date Title Exemption Price Amount Cash
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
May 12, 1998 Common Stock Rule 504 $1.00 2,800 $2,800
- --------------------------------------------------------------------------------------------------------------------
Purchases by a single accredited investor.
====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================
Date Title Exemption Price Amount Cash
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
12/12/98 Common Stock Rule 504 $0.10 50,000 $5,000
- --------------------------------------------------------------------------------------------------------------------
Purchased by a single accredited investor.
====================================================================================================================
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Date Title Exemption Price Amount Services
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3/3/99 Common Stock Rule 504 $0.10 95,000 $9,500
- --------------------------------------------------------------------------------------------------------------------
Issued for professional and consulting services, to Intrepid International, S.A., 24843 Del Prado Suite 318, Dana
Point, CA 92629. "Services" included repayment of substantial advances for legal services, copying, printing and
various filing fees and miscellaneous expenses. These shares are no longer owned by or for Intrepid, they having
been sold into the market in brokerage transactions.
====================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Item 5. Indemnification of Officers and Directors.
- --------------------------------------------------------------------------------
(a) The Articles of Incorporation provide: Each Director and officer or Former
Director or officer or any person who may have served at the request of this
corporation as a Director or officer of another corporation in which this
corporation owns shares of capital stock or of which this corporation is a
creditor (and their heirs, executors, and administrators) may be indemnified by
the corporation against reasonable costs and expenses incurred by him in
connection with any action, suit, or proceeding to which he may be made a party
by reason of his being or having been such Director or officer, except in
relation to any actions, suits, or proceedings in which he has been adjudged
liable because of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office, or in the event
of a settlement, each Director and officer (and his heirs, executors, and
administrators) may be indemnified by the corporation against payments made,
including reasonable costs and expenses, provided that such indemnity shall be
conditioned upon the prior determination by a resolution of two-thirds (2/3) of
those members of the Board of Directors of the corporation who are not involved
in the action, suit, or proceeding that the Director or officer has no liability
by reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office, and provided
further that if a majority of the members of the Board of Directors of the
corporation are involved in the action, suit, or proceedings, such determination
shall have been made by a written opinion of independent counsel. Amount paid in
settlement shall not exceed costs, fees, and expenses which would have been
reasonable incurred if the action, suit, or proceeding had been litigated to a
conclusion. Such a determination by the Board of Directors, or by independent
counsel, and the payments of amounts by the corporation on the basis thereof
shall not prevent a shareholder from challenging such indemnification by
appropriate legal proceedings on the grounds that the person indemnified was
liable to the corporation or its security holders by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office. The foregoing rights and indemnification
shall not be exclusive of any other rights to which the officers and Directors
may be entitled according to law.
(b) The By-Laws provide: "The Corporation shall indemnify its present or former
Directors and officers, employees, agents and other persons to the fullest
extent permissible by, and in accordance with the procedures contained in,
Article 2.02-1 of the Texas Business Corporation Act. Such indemnification shall
not be deemed to be exclusive of any other rights to which a director, officer,
agent or other person may be entitled, consistent with law, under any provision
of the Articles of Incorporation or By-Laws of the Corporation, any general or
specific action of the Board of Directors, the terms of any contract, or as may
be permitted or required by common law."
18
<PAGE>
- --------------------------------------------------------------------------------
PART F/S
- --------------------------------------------------------------------------------
Audited Financial Statements: for the six months ended June 30, 1999, and
for the years ended December 31, 1998 and 1997, are provided as FINANCIAL
STATEMENT: F-1, in the body this filing, following this page, and incorporated
herein by this reference as though fully set forth on this page as well.
Un-Audited Financial Statements: for the months ended September 30, 1999,
are provided as FINANCIAL STATEMENT: F-2, in the body of this filings, following
F-1, and incorporated herein by this reference as though fully set forth on this
page as well.
Selected Financial Information
<TABLE>
<CAPTION>
==============================================================
9/30/99 6/30/99 12/31/98 12/31/97
==============================================================
==========================================================================================
<S> <C> <C> <C> <C>
Total Assets $705 $705 $705 $19,975
- ------------------------------------------------------------------------------------------
Revenues 0 0 0 0
- ------------------------------------------------------------------------------------------
Operating Expenses 0 0 33,798 80,025
- ------------------------------------------------------------------------------------------
Net Earnings or (Loss) (0) (0) (33,798) (80,025)
- ------------------------------------------------------------------------------------------
Per Share (Loss) (.0) (.0000) (0.011) (0.003)
- ------------------------------------------------------------------------------------------
Average Common
Shares Outstanding 0 3,167,800 3,045,800 29,624,712
==========================================================================================
</TABLE>
19
<PAGE>
- --------------------------------------------------------------------------------
F-1
AUDITED FINANCIAL STATEMENTS
of
Net Master Consultants, Inc.
for June 30, 1999, December 31, 1998 and 1997
- --------------------------------------------------------------------------------
<PAGE>
Net Master Consultants, Inc.
(a Development Stage Company)
Financial Statements
June 30, 1999, December 31, 1998 and 1997
<PAGE>
C O N T E N T S
Independent Auditors' Report..................................................3
Balance Sheets................................................................4
Statements of Operations......................................................5
Statements of Stockholders' Equity............................................6
Statements of Cash Flows......................................................7
Notes to the Financial Statements.............................................8
<PAGE>
[LETTERHEAD OF CROUCH, BIERWOLF & CHISHOLM]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Net Master Consultants, Inc.
We have audited the accompanying balance sheets of Net Master Consultants, Inc.
(a Development Stage Company) as of June 30, 1999, December 31, 1998 and 1997
and the related statements of operations, stockholders' equity and cash flows
for the six months ended June 30, 1999 and the years ended December 31, 1998 and
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Net Master Consultants, Inc. (a
Development Stage Company) as of June 30, 1999, December 31, 1998 and 1997 and
the results of its operations and cash flows for the six months ended June 30,
1999 and the years ended December 31, 1998 and 1997 in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, the Company's
recurring operating losses and lack of working capital raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to those matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
August 19, 1999
<PAGE>
Net Master Consultants, Inc.
(a Development Stage Company)
Balance Sheets
Assets
<TABLE>
<CAPTION>
December 31,
June 30, -------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Current assets
Cash $ 705 $ 705 $ 19,975
--------- --------- ---------
Total Current Assets 705 705 19,975
--------- --------- ---------
Total Assets $ 705 $ 705 $ 19,975
========= ========= =========
Liabilities and Stockholders' Equity
Liabilities $ -- $ -- $ --
--------- --------- ---------
Stockholders' Equity
Common Stock, authorized
100,000,000 shares of $.0001 par value,
issued and outstanding 3,167,800, 3,167,800
and 3,020,000 shares respectively 317 317 302
Additional Paid in Capital 117,016 117,016 99,731
Deficit Accumulated During the
Development Stage (113,856) (113,856) (80,058)
Stock Subscriptions (2,772) (2,772) --
--------- --------- ---------
Total Stockholders' Equity 705 705 19,975
--------- --------- ---------
Total Liabilities and Stockholders' Equity $ 705 $ 705 $ 19,975
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE>
Net Master Consultants, Inc.
(a Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
For the
Six Months For the Years Cumulative
Ended Ended December 31, Total
June 30, ------------------------------ Since
1999 1998 1997 Inception
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues: $ -- $ -- $ -- $ --
Expenses:
General and administrative -- 33,798 80,025 113,856
------------ ------------ ------------ ------------
Total Expenses -- 33,798 80,025 113,856
------------ ------------ ------------ ------------
Net (Loss) -- $ (33,798) $ (80,025) $ (113,856)
============ ============ ============ ============
Net Loss Per Share $ (.000) $ (0.011) $ (.003) $ (0.004)
============ ============ ============ ============
Weighted average shares outstanding 3,167,800 3,045,800 29,624,712 25,940,222
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE>
Net Master Consultants, Inc.
(a Development Stage Company)
Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock paid-in Development
Shares Amount capital Stage
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Inception at December 28, 1988 -- $ -- $ -- $ --
Shares issued for services 33,000,000 3,300 (3,267) --
Net loss for the years ended
December 31, 1988-1996 -- -- -- (33)
----------- ----------- ----------- -----------
Balances, December 31, 1996 33,000,000 3,300 (3,267) (33)
Canceled 30,000,000 shares (30,000,000) (3,000) 3,000 --
Issuance of stock at $5 per share on June 17, 1997 20,000 2 99,998 --
Net loss for the year ended December 31, 1997 (80,025)
----------- ----------- ----------- -----------
Balances, December 31, 1997 3,020,000 $ 302 $ 99,731 $ (80,058)
Stock issued at $.10 for services valued at $9,500 95,000 10 9,490 --
Stock issued for subscription agreement 52,800 5 7,795 --
Net loss for the year ended December 31, 1998 (33,798)
----------- ----------- ----------- -----------
Balances, December 31, 1998 3,167,800 317 117,016 (113,856)
Net loss for the six months ended
June 30, 1999 --
----------- ----------- ----------- -----------
Balances, June 30, 1999 3,167,800 $ 317 $ 117,016 $ (113,856)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE>
Net Master Consultants, Inc.
(a Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
For the
Six Months For the years Cumulative
Ended ended December 31, Total
June 30, ------------------------- Since
1999 1998 1997 Inception
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Cash Flows form Operating
Activities
Net loss $ -- $ (33,798) $ (80,025) $(113,856)
Adjustments to reconcile -- -- -- --
--------- --------- --------- ---------
Net cash flows provided
(used) by operating activities -- (33,798) (80,025) (113,856)
--------- --------- --------- ---------
Cash Flows from Investment
Activities: -- -- -- --
--------- --------- --------- ---------
Cash Flows from Financing
Activities:
Stock subscriptions received -- 5,028 -- 5,028
Stock issued for organization cost -- -- -- 33
Issued common stock for cash -- -- 100,000 100,000
Issued common stock for services -- 9,500 -- 9,500
--------- --------- --------- ---------
Net cash flows provided
(Used) by financing activities -- 9,500 100,000 114,561
--------- --------- --------- ---------
Net increase (decrease) in cash -- (19,720) 19,975 705
Cash, beginning of year 705 19,975 -- --
--------- --------- --------- ---------
Cash, end of period $ 705 $ 705 $ 19,975 $ 705
========= ========= ========= =========
Supplemental Cash Flow Information:
Cash paid for:
Interest $ -- $ -- $ -- $ --
Taxes $ -- $ -- $ -- $ --
</TABLE>
The accompanying notes are an integral part of these financial statements
7
<PAGE>
Net Master Consultants, Inc.
(a Development Stage Company)
Notes to the Financial Statements
June 30, 1999, December 31, 1998 and 1997
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
Net Master Consultants, Inc. (the "Company") was incorporated as
Houston Produce Corporation under the laws of the State of Texas on
December 28, 1988. The Company was organized primarily for the purpose of
importing fruits and vegetables from Latin America for sale in the United
States market however it has remained dormant until its reactivation in
March of 1997. In June 1997 the Company changed the name to Net Master
Consultants, Inc.
The Company is in the development stage according to Financial
Accounting Standards Board Statement No. 7 and is currently focusing its
attention on raising capital in order to pursue its goals.
b. Accounting Method
The Company recognizes income and expense on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating
loss carryforwards totaling approximately $113,856 that will be offset
against future taxable income. These NOL carryforwards begin to expire in
the year 2004. No tax benefit has been reported in the financial statements
because the Company believes there is a 50% or greater chance the
carryforward will expire unused.
8
<PAGE>
Net Master Consultants, Inc.
(a Development Stage Company)
Notes to the Financial Statements
June 30, 1999, December 31, 1998 and 1997
NOTE 1 - Summary of Significant Accounting Policies (Continued)
e. Provision for Income Taxes (Continued)
Deferred tax assets and the valuation account is as follows at June
30, 1999, December 31, 1998 and 1997.
June 30, December 31,
-------- ---------------------
1999 1998 1997
-------- -------- --------
Deferred tax asset:
NOL carrryforward $ 27,654 $ 27,654 $ 15,470
Valuation allowance (27,654) (27,654) (15,470)
-------- -------- --------
Total $ -- $ -- $ --
======== ======== ========
f. Organization Costs
The Company incurred $33 of organization costs in 1989. These costs,
which were paid by shareholders of the Company were exchanged for
33,000,000 shares of common stock. Organization costs were being amortized
on a straight line method over a 60 month period. These costs will be
recovered only if, the Company is able to generate a positive cash flow
from operations.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has few tangible
assets and has had recurring operating losses for the past few years and is
dependent upon financing to continue operations. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty. It is management's plan to find an operating company to merge
with, thus creating necessary operating revenue.
NOTE 3 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating
substantially all of its efforts in raising capital and developing its
business operations in order to generate significant revenues.
NOTE 4 - Stock Split
In 1997, the Company's Board of Directors authorized a 1,000 for one
forward stock split and the cancellation of 30,000,000 shares as part of
the reorganization and reincorporation. The Company's financial statements
have been retroactively restated to show the effects of the stock split.
9
<PAGE>
- --------------------------------------------------------------------------------
F-2
Un-Audited Financial Statements
for the nine months ended September 30, 1999
- --------------------------------------------------------------------------------
<PAGE>
NET MASTER CONSULTANTS, INC.
INDEX TO FINANCIAL STATEMENTS
Page
----
Balance Sheets for the years ended December 31, 1997,
December 31, 1998 and September 30, 1999 (unaudited) ................ F-2
Statements of Loss and Accumulated Deficit for the years ended
December 31, 1997, December 31, 1998 and
September 30, 1999 (unaudited) ...................................... F-3
Statements of Changes in Financial Position for the years ended
December 31, 1997, December 31, 1998 and
September 30, 1999 (unaudited) ...................................... F-4
Statements of Stockholders' (Deficit) Equity for the period from
inception (December 28, 1998) through December 31, 1988,
for the years ended December 31, 1989, through December 31,
1998 and the period ended September 30, 1999 (unaudited) ............ F-5
Notes to Financial Statements ............................................ F-6
<PAGE>
NET MASTER CONSULTANTS, INC.
BALANCE SHEETS (UNAUDITED)
for the fiscal years ended December 31, 1998 and 1997
and for the nine months ended September 30, 1999
<TABLE>
<CAPTION>
December 31,
September 30, ----------------------
1999 1998 1997
--------- --------- ---------
ASSETS
CURRENT ASSETS
<S> <C> <C> <C>
Cash $ 705 $ 705 $ 19,975
Total Current Assets 705 705 19,975
--------- --------- ---------
TOTAL ASSETS $ 705 $ 705 $ 19,975
========= ========= =========
LIABILITIES & STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY
Common Stock, $.0001 par value; authorized 100,000,000
shares authorized, 3,020,000 shares issued and
outstanding as of December 31, 1997,
3,167,800 shares outstanding as of
December 31, 1998 and April 30,1999 317 317 302
Additional paid-in capital 117,016 117,016 99,731
Accumulated deficit during the development stage (108,828) (108,828) (80,058)
Stock Subscriptions (7,800) (7,800)
--------- --------- ---------
Total Stockholders' Equity 705 705 19,975
--------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 705 $ 705 $ 19,975
========= ========= =========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-2
<PAGE>
NET MASTER CONSULTANTS, INC.
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT (UNAUDITED)
for the fiscal years ended December 31, 1998 and 1997
and for the nine months ended September 30, 1999
December 31,
September 30, ---------------------- Cumulative
1999 1998 1997 Amounts
--------- --------- --------- ---------
REVENUES $ -0- $ -0- $ -0- $ -0-
--------- --------- --------- ---------
OPERATING EXPENSES
Consulting -0- 23,722 72,500 96,222
Office -0- 1,200 1,200
Accounting -0- 5,048 2,559 7,607
Travel -0- 3,766 3,766
Amortization 33
--------- --------- --------- ---------
Total Operating Expense -0- 28,770 80,025 108,828
--------- --------- --------- ---------
NET INCOME (LOSS) $ -0- $ (28,770) $ (80,025) $(108,828)
========= ========= ========= =========
NET (LOSS) PER SHARE $ -0- $(0.00953) $(0.02659) $(3.29782)
========= ========= ========= =========
The accompanying notes are an integral part
of these financial statements.
page F-3
<PAGE>
NET MASTER CONSULTANTS, INC.
STATEMENT OF STOCKHOLDERS' (DEFICIT) EQUITY
for the period from inception (December 28, 1988) through December 31, 1988,
for the years ended December 31, 1998 through December 31, 1998
and for the nine months ended September 30, 1999
<TABLE>
<CAPTION>
Common Stock
----------------------------- Additional Accumulated Total Stock-
Number of Par Paid-In Surplus holders' Equity
Shares Value Capital (Deficit) (Deficit)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Inception (December 28, 1988) $ 0 $ 0 $ 0 $ 0 $ 0
Inception through December
31, 1988: Stock issued for
cash and services 33,000,000 3,300 (3,267) (1) 32
Year ended December 31, 1989 -0- -0- -0- (7) 25
Year ended December 31, 1990 -0- -0- -0- (7) 18
Year ended December 31, 1991 -0- -0- -0- (7) 11
Year ended December 31, 1992 -0- -0- -0- (7) 4
Year ended December 31, 1993 -0- -0- -0- (4) 0
Year ended December 31, 1994 -0- -0- -0- -0- -0-
Year ended December 31, 1995 -0- -0- -0- -0- -0-
Year ended December 31, 1996 -0- -0- -0- -0- -0-
----------- ----------- ----------- ----------- -----------
Balances December 31, 1996 33,000,000 3,300 (3,267) (33) -0-
Canceled 30,000,000 shares (30,000,000) (3,000) 3,000
Sale of Common Stock for
cash at $5.00 per share 20,000 2 99,998
Net Loss for year ended1997 (80,025)
----------- ----------- ----------- ----------- -----------
Balances, December 31, 1997 3,020,000 $ 302 $ 99,731 $ (80,058) $ 19,975
Issuance of Common Stock for
services at $0.10 per share 95,000 10 9,491
Issuance of Common Stock for
subscriptions agreement 52,800 5 7,795
Net Loss for 1998 (28,770)
----------- ----------- ----------- ----------- -----------
Balances, December 31, 1998 3,167,800 $ 317 $ 117,016 $ (108,828) $ 8,505
----------- ----------- ----------- ----------- -----------
Balances, September 30, 1999 3,167,800 $ 317 $ 117,016 $ (108,828) $ 8,505
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-4
<PAGE>
NET MASTER CONSULTANTS, INC.
STATEMENTS OF CASH FLOW (UNAUDITED)
for the fiscal years ended December 31, 1998 and 1997
and for the nine months ended September 30, 1999
<TABLE>
<CAPTION>
December 31,
September 30, ------------------------- Cumulative
1999 1998 1997 Amounts
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ -0- $ (28,770) $ (80,025) $(108,795)
Add item not requiring the use of cash 33
--------- --------- --------- ---------
Net use of cash from operating activities -0- (28,770) (80,025) (108,795)
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Organization costs (33)
---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from increase in accounts payable 9,500 9,500
Proceeds from issuance of comon stock 100,000 100,000
--------- --------- ---------
NET INCREASE IN CASH -0- (19,270) 19,975 705
CASH AT BEGINNING OF PERIOD 705 19,975 -0- -0-
--------- --------- --------- ---------
CASH AT END OF PERIOD $ 705 $ 705 $ 19,975 $ 705
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
page F-5
<PAGE>
Net Master Consultants, Inc.
(a Development Stage Company)
Notes to the Financial Statements (unaudited)
September 30, 1999, December 31, 1998 and 1997
NOTE I - Summary of Significant Accounting Policies
a. Organization
Net Master Consultants, Inc. (the "Company) was incorporated as
Houston Produce Corporation under the laws of the State of Texas on
December 28, 1988. The Company was organized primarily for the purpose of
importing fruits and vegetables from Latin America for sale in the United
States market however it has remained dormant until its reactivation in
March of 1997. In June 1997 the Company changed the name to Net Master
Consultants, Inc.
The Company is in the development stage according to Financial
Accounting Standards Board Statement No. 7 and is currently focusing its
attention on raising capital in order to pursue its goals.
b. Accounting Method
The Company recognizes income and expense on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating
loss carryforwards totaling approximately $104,624 that will be off-set
against future taxable income. These NOL carryforwards begin to expire in
the year 2004. No tax benefit has been reported in the financial statements
because the Company believes there is a 50% or greater chance the
carryforward will expire unused.
page F-6
<PAGE>
Net Master Consultants, Inc.
(a Development Stage Company)
Notes to the Financial Statements (unaudited)
September 30, 1999, December 31, 1998 and 1997
NOTE I - Summary of Significant Accounting Policies (Continued)
e. Provision for Income Taxes (Continued)
Deferred tax assets and the valuation account is as follows at
September 30, 1999, December 31, 1998 and 1997.
December 31,
September 30, -----------------------
1999 1998 1997
-------- -------- --------
Deferred tax asset:
NOL carryforward $ 35,185 $ 35,185 $ 27,220
Valuation allowance (35,185) (35,185) (27,220)
-------- -------- --------
Total $ -0- $ -0- $ -0-
======== ======== ========
f. Organization Costs
The Company incurred $33 of organization costs in 1989. These costs,,
which were paid by shareholders of the Company were exchanged for
33,000,000 shares of common stock. Organization costs were being amortized
on a straight line method over a 60 month period. These costs will be
recovered only if, the Company is able to generate a positive cash flow
from operations.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has few tangible
assets and has had recurring operating losses for the past few years and is
dependent upon financing to continue operations. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty. It is management's plan to find an operating company to merge
with, thus creating necessary operating revenue.
NOTE 3 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating
substantially all of its efforts in raising capital and developing its
business operations in order to generate significant revenues.
NOTE 4 - Stock Split
In 1997, the Company's Board of Directors authorized a 1,000 for one
forward stock split and the cancellation of 30,000,000 shares as part of
the reorganization and reincorporation. The Company's financial statements
have been retroactively restated to show the effects of the stock split.
page F-7
<PAGE>
- --------------------------------------------------------------------------------
PART III
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Item 1. Index to Exhibits.
- --------------------------------------------------------------------------------
Exhibit Index
================================================================================
EXHIBIT TABLE CATEGORY / DESCRIPTION OF EXHIBIT PAGE
TABLE NUMBER
#
- --------------------------------------------------------------------------------
[2] ARTICLES/CERTIFICATES OF INCORPORATION, AND BY-LAWS
- --------------------------------------------------------------------------------
2.1 ARTICLES OF INCORPORATION: Houston Produce Corporation 40
- --------------------------------------------------------------------------------
2.2 ARTICLES OF AMENDMENT: Net Master Consultants, Inc. 50
- --------------------------------------------------------------------------------
2.3 BY-LAWS 54
- --------------------------------------------------------------------------------
[6] MATERIAL CONTRACTS
- --------------------------------------------------------------------------------
6.1 FINANCIAL SERVICES CONSULTING AGREEMENT 61
- --------------------------------------------------------------------------------
6.2 ATTORNEY DISCLOSURE AND SPECIAL RELATIONSHIP AGREEMENT 76
- --------------------------------------------------------------------------------
6.3 ATTORNEY DISCLOSURE AND SPECIAL RELATIONSHIP AGREEMENT 80
================================================================================
38
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to signed on its behalf by the undersigned, thereunto
authorized.
Net Master Consultants, Inc.
formerly Houston Produce Corporation
by
/s/ /s/
- ----------------------------- -----------------------------
J. Dan Sifford Nora Coccaro
Director and President Director and Secretary
39
- --------------------------------------------------------------------------------
Exhibit 2.1
Articles of Incorporation
Houston Produce Corporation
filed December 28, 1988
- --------------------------------------------------------------------------------
<PAGE>
FILED
In the Office of the
Secrectary of Texas
DEC 28 1988
Corporations Section
ARTICLES OF INCORPORATION
OF
HOUSTON PRODUCE CORPORATION
PREAMBLE
We, the undersigned natural persons, of the age of eighteen (18) years or
more, acting as incorporators of a corporation under the Texas Business
Corporation Act, do hereby adopt the following Articles of Incorporation for
such corporation:
I.
NAME
The name of the corporation is HOUSTON PRODUCE CORPORATION.
II.
DURATION
The period of duration of the corporation is perpetual.
III.
PURPOSE
The purposes for which the corporation is organized are to engage in any
and all lawful business for which corporations may be incorporated under the
Business Corporation Act of the State of Texas.
IV.
SHARES
Preferred Shares Series "A" with Par Value.
Preferred Shares Series "B" without Par Value.
Preferred Shares Series "C" with Par Value.
And Common Shares with Par Value.
The corporation is authorized to issue four classes of shares to be
designated respectively "Preferred Shares Series "A", "Preferred Shares Series
"B", "Preferred Shares Series "C", and "Common Shares". The total number of
Preferred Shares Series "A" the corporation is authorized to issue is 15,000,000
and the par value of each such share is $10.00. The total number of Preferred
Shares Series "B" the corporation is authorized to issue is 100,000 and all such
shares are without par value. The total number of Preferred Shares Series "C"
the corporation is authorized to issue is 15,000,000 and the par value of each
such share is $10.00. The total number of Common Shares the corporation is
authorized to issue is 100,000 and par value of each such share is $1.00.
ARTICLES OF INCORPORATION Page 1 of 8 Pages
<PAGE>
Dividends on Preferred Shares
Series "A" and "C"
The holders of the preferred shares Series "A" and "C" shall be entitled to
receive dividends out of any funds legally available therefor, at the rate of
nine and one-half percent (9 1/2%) per annum of the par value thereof, and no
more, payable in preference and priority to any payment of any dividend on
common shares and payable in cash quarterly in the months of March, June,
September and December, or otherwise, as the Board of Directors may from time to
time determine. The right to such dividends on preferred shares shall not be
cumulative, and no right shall accrue to the holders of such shares by reason of
the Board's failure to pay or declare and set apart dividends thereon for any
given period as herein provided.
Noncumulative and Nonparticipating Liquidation Preferences
On any voluntary or involuntary liquidation of the corporation, the holders
of the preferred shares shall receive an amount equal to the par value of such
shares plus any dividends declared and unpaid thereon, and no more, before any
amount shall be paid to the holders of the common shares. If the assets of the
corporation should be insufficient to permit payment to the preferred
shareholders of their full preferential amounts as herein provided, then such
assets shall be distributed ratably among the outstanding preferred shares.
Subject to such preferential rights, the holders of the common shares shall
receive, ratably, all remaining assets of the corporation. A consolidation or
merger of the corporation with or into any other corporation, or a sale of all
or substantially all of the assets of the corporation shall not be deemed a
liquidation, dissolution, or winding up of the corporation within the meaning of
this paragraph.
Redemption Clause
(1) The corporation, at the option of the Board of Directors, may at any
time redeem the whole, or from time to time redeem any part, of the Series "A"
and/or Series "C" preferred shares but not Series "B" preferred shares
outstanding by paying in cash or equivalent property value therefore the sum of
$10.00 per share, [plus all dividends declared but unpaid] thereon as provided
in this Article to and including the date of redemption, hereinafter referred to
as the "redemptive price," and by giving to each Series "A" and/or Series "C"
preferred shareholder of record at his last known address, as shown on the
records of the corporation, at least twenty, but not more than fifty, day's
prior notice personally or in writing, by mail, postage prepaid, stating the
class or series or part of any class or series of shares to be redeemed and the
date and plan of redemption, the redemptive price, and the place where the
shareholders may obtain payment of the redemptive price on surrender of their
respective share certificates, hereinafter called the "redemption notice."
Should only a part of the outstanding preferred shares be redeemed, such
redemption shall be effected by lot, or pro rata, as prescribed by the Board of
Directors; provided, however, that no preferred shares shall be redeemed unless
all accrued dividends on all outstanding preferred shares shall have been paid
for all
ARTICLES OF INCORPORATION Page 2 of 8 Pages
<PAGE>
past dividend periods and full dividends for the current period on all
outstanding preferred shares, except those to be redeemed, shall have been paid
or declared and set apart for payment. On or after the date fixed for
redemption, each holder of shares called for redemption shall, unless he shall
have previously exercised his option to convert his preferred shares as provided
in this Article, surrender his certificate for such shares to the corporation at
the place designated in the redemption notice and shall thereupon be entitled to
receive payment of the redemptive price. Should less than all the shares
represented by any surrendered certificate be redeemed, a new certificate for
the unredeemed shares shall be issued. If the redemption notice is duly given
and if sufficient funds are available therefor on the date fixed for redemption,
then, whether or not the certificates evidencing the shares to be redeemed are
surrendered, all rights with respect to such shares shall terminate on the date
fixed for redemption, except for the right of the holders to receive the
redemption price, without interest, on surrender of their certificate therefor.
(2) If, on or prior to any date fixed for redemption of preferred shares as
herein provided, the corporation deposits with any bank or trust company in
Texas, or any bank or trust company in the United States duly appointed and
acting as transfer agent for the corporation, as a trust fund, a sum sufficient
to redeem, on the date fixed for redemption thereof, the shares called for
redemption, with irrevocable instructions and authority to the bank or trust
company to publish the notice of redemption thereof, or to complete such
publication if theretofore commenced, and to pay, on and after the date fixed
for redemption or prior thereto, the redemptive price of the shares to their
respective holders on surrender of their share certificates, then from and after
the date of the deposit, even though such date may be prior to the date fixed
for redemption, the shares so called shall be deemed to be redeemed and
dividends on those shares shall cease to accrue after the date fixed for
redemption. The deposit shall be deemed to constitute full payment of the shares
to their holders and from and after the date of the deposit the shares shall be
deemed to be no longer outstanding, and the holders thereof shall cease to be
shareholders with respect to such shares and shall have no rights with respect
thereto, except the right to receive from the bank or trust company payment of
the redemptive price of the shares, without interest, on surrender of their
certificates therefor, or the right to convert said shares to common stock as
provided in this Article. Any money so deposited on account of the redemptive
price of preferred shares converted after the making of the deposit shall be
repaid to the corporation forthwith on the conversion of such preferred shares.
(3) Shares redeemed by the corporation shall be restored to the status of
authorized but unissued shares of the corporation.
(4) Series "B" preferred shares shall not be redeemable.
Conversion Rights of Series "B" Preferred Shares
(1) The holder of any Series "B" preferred shares, shall at his option on
delivery to the corporation of his written notice electing to convert said
shares to common shares and on surrender at the office of the corporation or
office of the transfer agent for such shares, duly endorsed
ARTICLES OF INCORPORATION Page 3 of 8 Pages
<PAGE>
to the corporation, be entitled to receive ninety-nine one hundredths (.99)
share of common stock for each share of Series "B" preferred stock so converted.
(2) Provided, however, that the number of common shares to be issued as
provided in Subparagraph 1 of this Paragraph shall be adjusted by appropriate
amendment of said Subparagraph 1 to take into account any and all increases or
reduction in the number of outstanding common shares which may have accrued
since the date of the first issuance of the Series "B" preferred shares by
reason of a stock split, share dividend, merger, consolidation, or other capital
change or reorganization affecting the number of outstanding common shares so as
fairly and equitably to preserve so far as reasonably possible the original
conversion rights of the preferred shares, and provided further that when such
adjustment is required no notice of redemption shall be given until such
amendment and adjustment shall have been accomplished.
(3) Neither fractional shares, nor scrip or other certificates evidencing
such shares, shall be issued by the corporation on conversion of the Series "B"
preferred shares as herein provided, but the corporation shall pay in lieu
therof the full value in cash to the holders who would but for this provision be
entitled to receive such fractional shares.
(4) Series "B" preferred shares so converted shall not be reissued.
(5) The corporation shall at all times reserve and keep available out of
its authorized but Unicode common shares solely for the purpose of effecting
conversion of its Series "B" preferred shares the full number of common shares
deliverable on conversion of all Series "B" preferred shares from time to time
outstanding and shall obtain and keep in force such permits with the Texas
Securities Commissioner or other appropriate authorities as may be required in
order to enable it lawfully to issue and deliver such number of common shares.
Voting Rights of Common Stock and Preferred Shares Series "B"
Holders of common stock and Preferred Shares Series "B" stock in this
corporation shall be entitled to one vote for each and every share standing in
his, her or its name at any and all meetings of the stockholders of the
corporation. The common stock shall be entitled as a class to elect one (1) of
the directors of this corporation, and the Preferred Shares Series "B" stock
shall be entitled as a class to elect two (2) of the directors of this
corporation, so long as the By-Laws provide for three (3) directors. If the
By-Laws provide for a different number of directors (but never less than one),
the common stock shall be entitled to elect one less the Preferred Shares Series
"B" stock, and the Preferred Shares Series 'B' stock shall be entitled to elect
one or more directors than the common stock.
Restrictions on Preemptive Rights
No holder of any shares of any class of stock of the corporation shall, as
such holder, have any preemptive or preferential right to receive, purchase, or
subscribe to (1) any unissued or treasury shares of any class of stock (whether
now or hereafter authorized) of the corporation, (2) any obligations, evidences
of indebtedness, or other securities of the
ARTICLES OF INCORPORATION Page 4 of 8 Pages
<PAGE>
Corporation convertible into or exchangeable for, or carrying or accompanied by
any rights to receive, purchase, or subscribe to, any such unissued or treasury
shares, (3) any right of subscription to or to receive, or any warrant or option
for the purchase of, any of the foregoing securities, (4) any other securities
that may be issued or sold by the corporation, other than such (if any) as the
Board of Directors of the corporation, in its sole and absolute discretion, may
determine from time to time.
No shareholder shall have the right to cumulate his votes at any election
for directors of this corporation.
Transfer Restrictions
Before there can be a valid sale or transfer of any of the shares of the
corporation by any holder thereof, such holder shall first offer said shares to
the corporation and then to the other holders of common shares in the following
manner:
(1) Such offering shareholder shall deliver a notice in writing by mail or
otherwise, to the Secretary of the corporation stating the price, terms, and
conditions of such proposed sale or transfer, the number of shares to be sold or
transferred, and his intention to so sell or transfer such shares. Within thirty
(30) days thereafter, the corporation shall have the prior right to purchase
such shares so offered at the price and on the terms and conditions stated in
the notice; provided, however, that the corporation shall not at any time be
permitted to purchase all of its outstanding voting shares. Should the
corporation fail to purchase the shares at the expiration of the thirty (30) day
period, or prior thereto decline to purchase the shares, the Secretary of the
corporation shall, within five (5) days thereafter, mail or deliver to each of
the other (common) shareholders of record a copy of the notice given by the
shareholder to the Secretary. Such notice may be delivered to the shareholders
personally, or may be mailed to them at their last known address as such address
may appear on the books of the corporation. Within thirty (30) days after the
mailing or delivering of the copies of the orders to the shareholders, any such
shareholder or shareholders desiring to acquire any part or all of the shares
referred to in the notice shall deliver by mail, or otherwise, to the Secretary
of the corporation a written offer or offers, expressed to be acceptable
immediately, to purchase a specified number of such shares at the price and on
the terms stated in the notice. Each such offer shall be accompanied by the
purchase price therefor with authorization to pay such price against delivery of
the shares.
(2) If the total number of shares specified in the offers to purchase
exceeds the number of shares to be sold or transferred, each offering
shareholder shall be entitled to purchase such proportion of such shares as the
number of shares of the corporation which he holds bears to the total number of
shares held by all shareholders desiring to purchase the shares.
(3) If all the shares to be sold or transferred are not disposed of under
such appointment, each shareholder desiring to purchase shares in a number in
excess of his proportionate share, as provided above, shall be entitled to
purchase such proportion of those shares which remain thus
ARTICLES OF INCORPORATION Page 5 of 8 Pages
<PAGE>
undisposed of, as the total number of shares which he holds bears to the total
number of shares held by all of the shareholders desiring to purchase shares in
excess of those to which they are entitled under such appointment.
(4) If within said thirty (30) day period, the offer or offers to purchase
aggregate less than the number of shares to be sold or transferred, the
shareholder desiring to sell or transfer such shares shall not be obligated to
accept any such offer or offers and may dispose of all of the shares referred to
in his notice to any person or persons whomsoever; provided, however, that he
shall not sell or transfer such shares at a lower price or on terms more
favorable to the purchaser or transferee than those specified in his notice to
the Secretary of the corporation.
Voting Rights of
Preferred Shares Series "A" and "C"
Preferred Shares Series "A" and Series "C" shall have no voting rights
except those granted by law. The holders of Common Stock and Preferred Shares
Series "B" shall have the exclusive voting rights and powers, including the
exclusive right to notice of shareholders meetings.
V.
REQUIRED CAPITAL
The corporation will not commence business until it has received for the
issuance of its shares consideration of the value of One Thousand Dollars
($1,000.00), consisting of money, labor done, or property actually received,
which sum is not less than One Thousand Dollars ($1,000.00).
VI.
REGISTERED OFFICE AND AGENT
The address of its registered office is 2001 Kirby Drive, Suite 1008,
Houston, Texas 77019, and the name of its registered agent at such address is
JAMES T. MAHAN.
VII.
VOTING REOUIREMENTS FOR CORPORATE ACTIONS
Subject to the Business Corporation Act of the State of Texas and as
permitted by Article 9.08 of such Act, the decision to amend its Articles of
Incorporation, to sell any and all of its assets, to enter into a corporate
merger or acquisition, to issue securities, to dissolve the corporation or to
take any action required by shareholders in accordance with such Act, may be
made by the affirmative vote of shareholders owning at least fifty-one percent
(51%) of the issued and outstanding shares of the common stock of the
corporation at the time of voting.
ARTICLES OF INCORPORATION Page 6 of 8 Pages
<PAGE>
VII
INTERESTED TRANSACTIONS
Except as may be otherwise provided in the Texas Business Corporation Act,
no contract, act, or transaction of the corporation with any person or persons,
firm, trust, or association, or any other corporation shall be affected or
invalidated by the fact that any Director, officer, or shareholder of this
corporation is a party to, or is interested in, such contract, act, or
transaction, or in any way connected with any such person or persons, firm,
trust, or association, or is a Director, officer, or shareholder of, or
otherwise interested in, any such other corporation, nor shall any duty to pay
damages on account of this corporation be imposed upon such Director, officer,
or shareholder of this corporation solely by reason of such fact, regardless of
whether the vote, action, or presence of any such Director, officer, or
shareholder may be, or may have been, necessary to obligate this corporation on,
or in connection with, such contract, act, or transaction, provided that, if
such vote, action, or presence is, or shall have been, necessary, such interest
or connection (other than an interest as a non-controlling shareholder of any
such other corporation) be known or disclosed to the Board of Directors of this
corporation.
IX.
INDEMNIFICATION
Each Director and officer or former Director or officer or any person who
may have served at the request of this corporation as a Director or officer of
another corporation in which this corporation owns shares of capital stock or of
which this corporation is a creditor (and their heirs, executors, and
administrators) may be indemnified by the corporation against reasonable costs
and expenses incurred by him in connection with any action, suit, or proceeding
to which he may be made a party by reason of his being or having been such
Director or officer, except in relation to any actions, suits, or proceedings in
which he has been adjudged liable because of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office, or in the event of a settlement, each Director and officer (and his
heirs, executors, and administrators) may be indemnified by the corporation
against payments made, including reasonable costs and expenses, provided that
such indemnity shall be conditioned upon the prior determination by a resolution
of two-thirds (2/3) of those members of the Board of Directors of the
corporation who are not involved in the action, suit, or proceeding that the
Director or officer has no liability by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of his office, and provided further that if a majority of the members of
the Board of Directors of the corporation are involved in the action, suit, or
proceedings, such determination shall have been made by a written opinion of
independent counsel. Amounts paid in settlement shall not exceed costs,
ARTICLES OF INCORPORATION Page 7 of 8 Pages
<PAGE>
fees, and expenses which would have been reasonably incurred if the action,
suit, or proceeding had been litigated to a conclusion. Such a determination by
the Board of Directors, or by independent counsel, and the payments of amounts
by the corporation on the basis thereof shall not prevent a shareholder from
challenging such indemnification by appropriate legal proceedings on the grounds
that the person indemnified was liable to the corporation or its security
holders by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office. The
foregoing rights and indemnification shall not be exclusive of any other rights
to which the officers and Directors may be entitled according to law.
X.
DIRECTORS
The number of Directors constituting the initial Board of Directors is one
(1), and the name and address of the person who is to serve as Director until
the first annual meeting of the shareholders or until his successor is elected
and qualified is:
James S. Clifton, Jr.
24115 Griffin Lane
Houston, Texas 77449
XI.
INCORPORATORS
The names and addresses of the incorporators which includes all of the
initial subscribers to the corporation's shares and securities evidencing the
right to acquire its shares are:
James S. Clifton, Jr.
24115 Griffin Lane
Houston, Texas 77449
IN WITNESS WHEREOF, we have executed these Articles of Incorporation on
this 27th day of December 1988.
/s/ James S. Clifton, Jr.
------------------------------------
JAMES S. CLIFTON, JR.
THE STATE OF TEXAS
COUNTY OF HARRIS
I, the undersigned, a notary public, do hereby certify that on this 27th
day of December 1988, personally appeared before me JAMES S. CLIFTON JR., who
being by me first duly sworn, declared that he is the person who signed the
foregoing document as incorporator, and that the statements therein contained
are true.
[ILLEGIBLE]
------------------------------------
Notary Public, State of Texas
12-27-92
ARTICLES OF INCORPORATION Page 8 of 8 Pages
<PAGE>
[GRAPHIC]
The State of Texas
SECRETARY OF STATE
CERTIFICATE OF INCORPORATION
OF
HOUSTON PRODUCE CORPORATION
Charter No. 1099120
The undersigned, as Secretary of State of Texas, hereby certifies that
Articles of lncorporation for the above corporation duly signed pursuant to the
provisions of the Texas Business Corporation Act, have been received in this
Office and are found to conform to law.
ACCORDINGLY the undersigned, as such Secretary of State, and by virtue of
the authority vested in the Secretary by law, hereby issues this Certificate of
Incorporation and attaches hereto a copy of the Articles of Incorporation.
Issuance of this Certificate of Incorporation does not authorize the use of
a corporate name in this State in violation of the rights of another under the
federal Trademark Act of 1946, the Texas trademark law, the Assumed Business or
Professional Name Act, or the common law.
Dated Dec. 28 1988
[SEAL OF THE
STATE OF TEXAS]
/s/ [ILLEGIBLE]
------------------------------------
Secretary of State
- --------------------------------------------------------------------------------
Exhibit 2.2
Articles of Amendment
Net Master Consultants, Inc.
filed June 24, 1997
- --------------------------------------------------------------------------------
<PAGE>
---------------------------
FILED
In the Office of the
Secretary of State of Texas
JUN 24 1997
Corporations Section
---------------------------
ARTICLES OF AMENDENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business Corporation
Act, the undersigned corporation adopts the following Articles of Amendment to
its Articles of Incorporation.
ARTICLE ONE
The name of the corporation is HOUSTON PRODUCE CORPORATION.
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted by the
shareholders of the corporation on May 12, 1997.
This amendment:
i. deletes Article I. of the original Articles of Incorporation in
its entirety and provides for a new Article I. as set forth
below; and
ii. deletes Article IV. SHARES of the original Articles of
Incorporation in its entirety and provides for a new Article IV,
SHARES as set forth below.
The amendment deletes the language in Article I. of the original Articles
of Incorporation and the full text of Article I shall be as follows:
I.
NAME
The name of the corporation is NET MASTER CONSULTANTS, INC.
The amendment deletes the language in Article IV. SHARES of the original
Articles of Incorporation and the full text of Article IV. SHARES shall be as
follows:
IV.
SHARES
The aggregate number of shares in which the corporation shall have
authority to issue is 100,000,000 shares of the par value of $0.0001 each Common
Voting Equity Stock, such shares to carry the short title "Common", and no other
class of stock.
The Board of Directors may further create separate series within any class
of stock
ARTICLE THREE
The number of shares of the corporation outstanding at the time of such
adoption was 33,000; and the number of shares entitled to vote thereon was
33,000.
<PAGE>
ARTICLE FOUR
The number of shares voted for such amendment was 33,000; and the number of
shares voted against such amendment was 0.
ARTICLE FIVE
The manner in which any exchange, reclassification or cancellation of
issued shares provided for in the amendment shall be effected, is as follows:
The Officers are empowered and directed to effectuate a 1000 to 1 forward
split of the Company's Common Stock; such that the existing 33,000 shares shall
become 33,000,000 of par value $0,0001.
ARTICLE SIX
The manner in which such amendment effects a change in the amount of stated
capital, and the amount of stated capital as changed by such amendment, are as
follows:
This amendment empowers and directs the Officers to effectuate a I 000 to I
forward split of the Company's Common Stock; such that the existing issued and
outstanding 33,000 Common Shares of $1.00 par value shall become 33,000,000
Common Shares of $0.0001 par value.
This amendment will have the effect of reducing stated capital by $29,700.
Dated 12 May, 1997
HOUSTON PRODUCE CORPORATION
/s/ J. DAN SIFFORD
- -----------------------------
J. DAN SIFFORD
- -----------------------------
Printed Name
President
<PAGE>
[GRAPHIC]
The State of Texas
SECRETARY OF STATE
CERTIFICATE OF AMENDMENT
OF
NET MASTER CONSULTANTS, INC.
FORMERLY
HOUSTON PRODUCE CORPORATION
The undersigned, as Secretary of State of Texas, hereby certifies that the
attached Articles of Amendment for the above named entity have been received in
this office and are found to conform to law.
ACCORDINGLY the undersigned, as Secretary of State, and by virtue of the
authority vested in the Secretary by law, hereby issues this Certificate of
Amendment.
Dated: June 24, 1997
Effective: June 24, 1997
[SEAL OF THE
STATE OF TEXAS] /s/ [ILLEGIBLE]
------------------------------------
Antonio O. Garza, Jr.
Secretary of State
- --------------------------------------------------------------------------------
Exhibit 2.3
By-Laws
- --------------------------------------------------------------------------------
<PAGE>
BY-LAWS
OF
NET MASTER CONSULTANTS, INC.
ARTICLE I - OFFICES
1. REGISTERED OFFICE AND AGENT
The registered office of the corporation shall be maintained at
3131 Southwest Freeway
Suite 46
Houston, TX 77098
The registered office or the registered agent, or both, may be changed by
resolution of the board of directors, upon filing the statement required by law.
2. PRINCIPAL OFFICE
The principal office of the corporation shall be at
24843 Del Prado
Suite 318
Dana Point, CA 92629
provided that the board of directors shall have power to change the location of
the principal office in its discretion.
3. OTHER OFFICES
The corporation may also maintain other offices at such places within or
without the State of Texas as the board of directors may from time to time
appoint or as the business of the corporation may require.
ARTICLE II - SHAREHOLDERS
1. PLACE OF MEETING
All meetings of shareholders, both regular and special, shall be held
either at the principal office of the corporation in Texas or at such other
places, either within or without the state, as shall be designated in the notice
of the meeting.
2. ANNUAL MEETING
The annual meeting of shareholders for the election of directors and for
the transaction of all other business which may come before the meeting shall be
held on the 15th day of April in each year (if not a legal holiday and, if a
legal holiday, then on the next business day following) at the hour specified in
the notice of meeting.
If the election of directors shall not be held on the day above designated
for the annual meeting, the board of directors shall cause the election to be
held as soon thereafter as conveniently may be at a special meeting of the
shareholders called for the purpose of holding such election.
The annual meeting of shareholders may beheld for any other purpose in
addition to the election of directors which may be specified in a notice of such
meeting. The meeting may be called by resolution of the board of directors or by
a writing filed with the secretary signed either by a majority of the directors
or by shareholders owning a majority in amount of the entire capital stock of
the corporation issued and outstanding and entitled to vote at any such meeting.
3. NOTICE OF SHAREHOLDERS' MEETING
A written or printed notice stating the place, day and hour of the meeting,
and in case of a special meeting, the purpose or purposes for which the meeting
is called, shall be delivered not less than ten (10) more than fifty (50) days
before the date of the meeting, either personally or by mail, by or at the
direction of the president, secretary or the officer or person calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail addressed to the shareholder at his address as it appears on the
share transfer books of the corporation, with postage thereon prepaid.
4. VOTING OF SHARES
Each outstanding share with voting privileges, regardless of class, shall
be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders, except to the extent that the voting rights of the shares of any
class or classes are limited or denied by the Articles of Incorporation or by
law.
Treasury shares, shares of its own stock owned by another corporation the
majority of the voting stock of which is owned or controlled by this
corporation, and shares of its own stock held by this corporation in a fiduciary
capacity shall not be voted, directly or indirectly, at any meeting, and shall
not be counted in determining the total number of outstanding shares at any
given time.
1
<PAGE>
A shareholder may vote either in person or by proxy executed in writing by
the shareholder or by his duly authorized attorney-in-fact. No proxy shall be
valid after eleven (11) months from the date of its execution unless otherwise
provided in the proxy. Each proxy shall be revocable unless expressly provided
therein to be irrevocable, and in no event shall it remain irrevocable for a
period of more than eleven (11) months.
At each election for directors every shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected and
for whose election he has a right to vote, or unless prohibited by the articles
of incorporation, to cumulate his votes by giving one candidate as many votes as
the number of such directors multiplied by the number of his shares shall equal,
or by distributing such votes on the same principal among any number of such
candidates. Any shareholder who intends to cumulate his votes as herein
authorized shall give written notice of such intention to the secretary of the
corporation on or before the day preceding the election at which such
shareholder intends to cumulate his votes.
5. CLOSING TRANSFER BOOKS AND FIXING RECORD DATE
For the purpose of determining shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the board of directors may provide
that the share transfer books shall be closed for a stated period not exceeding
fifty (50) days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten (10) days immediately
preceding such meeting. In lieu of closing the stock transfer books, the by-laws
or in the absence of an applicable by-law the board of directors, may fix in
advance a date as the record date for any such determination of shareholders,
not later than fifty (50) days and, in case of a meeting of shareholders, not
earlier than ten (10) days prior to the date on which the particular action,
requiring such determination of shareholders is to be taken. If the share
transfer books are not closed and no record date is fixed for the determination
of shareholders entitled to notice of or to vote at a meeting of shareholders,
or shareholders entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the resolution of the board
of directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof, except where the determination has been made through the closing of
share transfer books and the stated period of closing has expired.
6. QUORUM OF SHAREHOLDERS
Unless otherwise provided in the articles of incorporation, the holders of
a majority of the shares entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of shareholders, but in no event shall a
quorum consist of the holders of less than one-third (1/3) of the shares
entitled to vote and thus represented at such meeting. The vote of the holders
of a majority of the shares entitled to vote and thus represented at a meeting
at which a quorum is present shall be the act of the shareholders' meeting,
unless the vote of a greater number is required by law, the articles of
incorporation of the by-laws.
7. VOTING LISTS
The officer or agent having charge of the share transfer books for the
shares of the corporation shall make, at least ten (10) days before each meeting
of shareholders, a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, which list, for a period of
ten (10) days prior to such meeting, shall be kept on file at the registered
office of the corporation and shall be subject to inspection by any shareholder
at any time during usual business hours. Such list shall also be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting. The original
share transfer books shall be prima-facie evidence as to who are the
shareholders entitled to examine such list or transfer books or to vote any
meeting of shareholders.
8. INFORMAL ACTION BY STOCKHOLDERS
Any action required or permitted to be taken at a meeting of the
stockholders may be taken without meeting if a written consent thereto is signed
by the stockholders holding at least a majority of the voting power, except that
if a different proportion of voting power is required for such an action at a
meeting, then that proportion of written consent is required; provided however,
that written notice of any action so taken must be promptly given to all
stockholders
ARTICLE III - DIRECTORS
1. BOARD OF DIRECTORS
The business and affairs of the corporation shall be managed by a board of
directors. Directors need not be residents of the State of Texas nor be
shareholders in the corporation.
2. NUMBER AND ELECTION OF DIRECTORS
The number of directors shall be 3 provided that the number may be
increased or decreased from time to time by an amendment to these by-laws, but
no decrease shall have the effect of shortening the term of any incumbent
director. At each annual election the shareholders shall elect directors to hold
office until the next succeeding annual meeting.
2
<PAGE>
3. VACANCIES
Any vacancy occurring in the board of directors may be filled by the
affirmative vote of the remaining directors, though less than a quorum of the
board. A director elected to fill a vacancy shall be elected for the unexpired
term of his predecessor in office. Any directorship to be filled by reason of an
increase in the number of directors shall be filled by election at an annual
meeting or at a special meeting of shareholders called for that purpose.
4. QUORUM OF DIRECTORS
A majority of the board of directors shall constitute a quorum for the
transaction of business. The act of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the board of directors.
5. ANNUAL MEETING OF DIRECTORS
Within thirty days after each annual meeting of shareholders the board of
directors elected at such meeting shall hold an annual meeting at which they
shall elect officers and transact such other business as shall come before the
meeting.
6. REGULAR MEETING OF DIRECTORS
A regular meeting of the board of directors may be held at such time as
shall be determined from time to time by resolution of the board of directors.
7. SPECIAL MEETINGS OF DIRECTORS
The secretary shall call a special meeting of the board of directors
whenever requested to do so by the president or by two directors. Such special
meeting shall be held at the time specified in the notice of meeting.
8. PLACE OF DIRECTORS' MEETINGS
All meetings of the board of directors (annual, regular or special) shall
be held either at the principal office of the corporation or at such other
place, either within or without the State of Texas, as shall be specified in the
notice of meeting.
9. NOTICE OF DIRECTORS' MEETINGS
All meetings of the board of directors (annual, regular or special) shall
be held upon five (5) days' written notice stating the date, place and hour of
meeting delivered to each director either personally or by mail or at the
direction of the president or the secretary or the officer or person calling the
meeting.
In any case where all of the directors execute a waiver of notice of the
time and place of meeting, no notice thereof shall be required, and any such
meeting (whether annual, regular or special) shall be held at the time and at
the place (either within or without the State of Texas) specified in the waiver
of notice. Neither the business to be transacted at, nor the purpose of, any
annual, regular or special meeting of the board of directors need be specified
in the notice or waiver of notice of such meeting.
3
<PAGE>
10. COMPENSATION
Directors, as such, shall not receive any stated salary for their services,
but by resolution of the board of directors a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each annual, regular or
special meeting of the board, provided, that nothing herein contained shall be
construed to preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
11. ACTION BY CONSENT OF DIRECTORS
In lieu of a formal meeting, action may be taken by unanimous written
consent of the directors.
ARTICLE IV - OFFICERS
1. OFFICERS ELECTION
The officers of the corporation shall consist of a president, one or more
vice-presidents, a secretary, and a treasurer. All such officers shall be
elected at the annual meeting of the board of directors provided for in Article
III, Section 5. If any office is not filled at such annual meeting, it may be
filled at any subsequent regular or special meeting of the board. The board of
directors at such annual meeting, or at any subsequent regular or special
meeting may also elect or appoint such other officers and assistant officers and
agents as may be deemed necessary. Any two or more offices may be held by the
same person, except the offices of president and secretary.
All officers and assistant officers shall be elected to serve until the
next meeting of directors (following the next annual meeting of shareholders) or
until their successors are elected; provided, that any officer or assistant
officer elected or appointed by the board of directors may be removed with or
without cause at any regular or special meeting of the board whenever in the
judgment of the board of directors the best interests of the corporation will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Any agent appointed shall serve for
such term, not longer than the next annual meeting of the board of directors, as
shall be specified, subject to like right of removal by the board of directors.
2. VACANCIES
If any office becomes vacant for any reason, the vacancy may be filled by
the board of directors.
3. POWER OF OFFICERS
Each officer shall have, subject to these by-laws, in addition to the
duties and powers specifically set forth herein, such powers and duties as are
commonly incident to this office and such duties and powers as the board of
directors shall from time to time designate. All officers shall perform their
duties subject to the directions and under the supervision of the board of
directors. The president may secure the fidelity of any and all officers by bond
or otherwise.
4. PRESIDENT
The president shall be the chief executive officer of the corporation. He
shall preside at all meetings of the directors and shareholders. He shall see
that all orders and resolutions of the board are carried out, subject however,
to the right of the directors to delegate specific powers, except such as may be
by statute exclusively conferred on the president, to any other officers of the
corporation.
He or any vice-president shall execute bonds, mortgages and other
instruments requiring a seal, in the name of the corporation, and, when
authorized by the board, he or any vice-president may affix the seal to any
instrument requiring the same, and the seal when so affixed shall be attested by
the signature of either the secretary or an assistant secretary. He or any
vice-president shall sign certificates of stock.
The President shall be ex-officio a member of all standing committees.
He shall submit a report of the operations of the corporation for the year
to the directors at their meeting next preceding the annual meeting of the
shareholders and to the shareholders at their annual meeting.
5. VICE-PRESIDENTS
The vice-president shall, in the absence or disability of the president,
perform the duties and exercise the powers of the president, and they shall
perform such other duties as the board of directors shall prescribe.
6. THE SECRETARY AND ASSISTANT SECRETARIES
The secretary shall attend all meetings of the board and all meetings of
the shareholders and shall record all votes and the minutes of all proceedings
and shall perform like duties for the standing committees when required. He
shall give or cause to be given notice of all meetings of the shareholders and
all meetings of the board of directors and shall perform such other duties as
may be prescribed by the board. He shall keep in safe custody the seal of the
corporation, and when authorized by the board, affix the same to any instrument
requiring it, and when so affixed, it shall be attested by his signature or by
the signature of an assistant secretary.
The assistant secretary shall, in the absence or disability of the
secretary, perform the duties and exercise the powers of the secretary, and they
shall perform such other duties as the board of directors shall prescribe.
4
<PAGE>
In the absence of the secretary or an assistant secretary, the minutes of
all meetings of the board and shareholders shall be recorded by such person as
shall be designated by the president or by the board of directors.
7. THE TREASURER AND ASSISTANT TREASURERS
The treasurer shall have the custody of the corporate funds and securities
and shall keep full and accurate accounts of receipts and disbursements in books
belonging to the corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the corporation in such depositories as
may be designated by the board of directors.
The treasurer shall disburse the funds of the corporation as may be ordered
by the board of directors, taking proper vouchers for such disbursements. He
shall keep and maintain the corporation's books of account and shall render to
the president and directors an account of all of his transactions as treasurer
and of the financial condition of the corporation and exhibit his books, records
and accounts to the president or directors at any time. He shall disburse funds
for capital expenditures as authorized by the board of directors and in
accordance with the orders of the president, and present to the president for
his attention any requests for disbursing funds if in the judgment of the
treasurer any such request is not property authorized. He shall perform such
other duties as may be directed by the board of directors or by the president.
If required by the board of directors, he shall give the corporation a bond
in such sum and with such surety or sureties as shall be satisfactory to the
board for the faithful performance of the duties of his office and for the
restoration to the corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.
The assistant treasurers in the order of their seniority shall, in the
absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer, and they shall perform such other duties as the board
of directors shall prescribe.
ARTICLE V - CERTIFICATES OF STOCK: TRANSFER. ETC.
1. CERTIFICATES OF STOCK
The certificates for shares of stock of the corporation shall be numbered
and shall be entered in the corporation as they are issued. They shall exhibit
the holder's name and number of shares and shall be signed by the president or a
vice-president and the secretary or an assistant secretary and shall be sealed
with the seal of the corporation or a facsimile thereof. If the corporation has
a transfer agent or a registrar, other than the corporation itself or an
employee of the corporation, the signatures of any such officer may be
facsimile. In case any officer or officers who shall have signed or whose
facsimile signature or signatures shall have been used on any such certificate
or certificates shall cease to be such officer or officers of the corporation,
whether because of death, resignation or otherwise, before said certificate may
nevertheless be issued by the corporation with the same effect as though the
person or persons who signed such certificates or whose facsimile signature or
signatures shall have been used thereon had been such officer or officers at the
date of its issuance. Certificates shall be in such form as shall in conformity
to law be prescribed from time to time by the board of directors.
The corporation may appoint from time to time transfer agents and
registrars, who shall perform their duties under the supervision of the
secretary.
2. TRANSFERS OF SHARES
Upon surrender to the corporation or the transfer agent of the corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate, and record the transaction upon its books.
3. REGISTERED SHAREHOLDERS
The corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and, accordingly shall
not be bound to recognize any equitable or other claim to or interest in such
share on the part of any other person, whether or not is shall have express or
other notice thereof, except as otherwise provided by law.
4. ISSUANCE OF ADDITIONAL SHARES
The corporation shall be enabled to issue additional common shares or to
create additional classes of stock, however any such issuance shall require
approval by three quarters (75%) of the then outstanding shares.
5. LOST CERTIFICATE
The board of directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost. when
authorizing such issue of a new certificate or certificates, the board of
directors in its discretion and as a condition precedent to the issuance
thereof, may require the owner of such lost or destroyed certificate or
certificates or his legal representatives to advertise the same in such manner
as it shall require or to give the corporation a bond with surety and in form
satisfactory to the corporation (which bond shall also name the corporation's
transfer agents and registrars, if any, as obligees) in such sum as it may
direct as indemnity against any claim that may be made against the corporation
or other obligees with respect to the certificate alleged to have been lost or
destroyed, or to advertise and also give such bond.
ARTICLE VI - DIVIDEND
1. DECLARATION
5
<PAGE>
The board of directors may declare at any annual, regular or special
meeting of the board and the corporation may pay, dividends on the outstanding
shares in cash, property or in the shares of the corporation to the extent
permitted by, and subject to the provisions of, the laws of the State of Texas.
2. RESERVES
Before payment of any dividend there may be set aside out of any funds of
the corporation available for dividends such sum or sums as the directors from
time to time in their absolute discretion think proper as a reserve fund to meet
contingencies or for equalizing dividends or for repairing or maintaining any
property of the corporation or for such other purpose as the directors shall
think conducive to the interest of the corporation, and the directors may
abolish any such reserve in the manner in which it was created.
ARTICLE VII - MISCELLANEOUS
1. INFORMAL ACTION
Any action required to be taken or which may be taken at a meeting of the
shareholders, directors or members of the executive committee, may be taken
without a meeting if a consent in writing setting forth the action so taken
shall be signed by all of the shareholders, directors, or members of the
executive committee, as the case may be, entitled to vote with respect to the
subject matter thereof, and such consent shall have the same force and effect as
a unanimous vote of the shareholders, directors, or members of the executive
committee, as the case may be, at a meeting of said body.
2. SEAL
The corporate seal shall be circular in form and shall contain the name of
the corporation, the year of its incorporation and the name "TEXAS". The seal
may be used by causing it or a facsimile to be impressed or affixed or in any
other manner reproduced. The corporate seal may be altered by order of the board
of directors at any time.
3. CHECKS
All checks or demands for money and notes of the corporation shall be
signed by such officer or officers or such other person or persons as the board
of directors may from time to time designate.
4. FISCAL YEAR
The fiscal year of the corporation shall be determined by resolution of the
Board of Directors.
5. DIRECTORS' ANNUAL STATEMENT
The board of directors shall present at each annual meeting of shareholders
a full and clear statement of the business and condition of the corporation.
6. CLOSE CORPORATIONS: MANAGEMENT BY SHAREHOLDERS
If the articles of incorporation of the corporation and each certificate
representing its issued and outstanding shares states that the business and
affairs of the corporation shall be managed by the shareholders of the
corporation rather than by a board of directors, then, whenever the context so
requires by the shareholders of the corporation shall be deemed the directors of
the corporation for purposes of applying any provision of these bylaws.
7. AMENDMENTS
(a) By Directors
The board of directors may amend or repeal the by-laws, or adopt new
by-laws, unless:
1. The Articles of Incorporation or the State reserves the power
exclusively to the shareholders in whole or in part;
or
2. The shareholders in amending, repealing or adopting a particular
by-law expressly provide that the board of directors may not amend that
by-law.
(b) By Shareholders
Unless the Articles of Incorporation or by-law adopted by the shareholders
provides otherwise as to all or some portion of the by-laws, the shareholders
may amend, repeal or adopt the by-laws even though the by-laws may also be
amended, repealed or adopted by the board of directors.
The above by-laws approved and adopted by the Board of Directors on January
5, 1999.
/s/
-----------------------------
Kirt W. James, President
6
- --------------------------------------------------------------------------------
Exhibit 6.1
FINANCIAL SERVICES CONSULTING AGREEMENT
- --------------------------------------------------------------------------------
<PAGE>
Intrepid International
Financial Services
CONSULTING AGREEMENT
This Agreement is made by and between INTREPID INTERNATIONAL, LTD., a Nevada
Corporation, (hereafter AIIL@), and NET MASTER CONSULTANTS, INC. a Texas
Corporation, (hereafter AClient@) and dated January 1, 1999. In consideration of
the mutual promises contained herein, and on the terms and conditions herein set
forth, the parties agree as follows:
1. Retainer Agreement.
Intrepid International, Ltd. is hereby retained as financial services
consultants for the Client, consistent with that certain DESCRIPTION OF MISSION
AND SERVICES OFFERED, a copy of which is Attachment 1 to this Consulting
Agreement, and incorporated herein by this reference as though fully set forth
herein. Among the services to be provided and contemplated by this arrangement
are the services of its President, Kirt W. James (billable at $125.00/hr), its
prime consultant, J. Dan Sifford Jr. (billable at $200.00/hr), and such
incidental secretarial services (billable at $85.00/hr) as may be reasonably and
necessarily performed by its secretary. Additional services may be performed by
subcontractors of IIL, subject to arrangements approved by Client in advance.
2. Services
IIL agrees to provide, as requested, the widest possible range of and
Financial Consulting services, to Management of Client, subject to, limited by
and consistent with that certain DESCRIPTION OF MISSION AND SERVICES OFFERED, a
copy of which is Attachment 1 to this Consulting Agreement, and incorporated
herein by this reference as though fully set forth herein. Such services
include, as requested by Client, coordination of public relations, shareholder
relations, audit coordination, certificate and transfer coordination,
coordination of relationships with market-makers and broker dealers in the
securities of Client and consulting services, incidental analysis and, where
appropriate, and subject to the accompanying ATTORNEY DISCLOSURE AGREEMENT,
written legal opinions by IIL Counsel acting, as requested by Client, as Special
Securities Counsel with Limited Authority, and the preparation and coordination
of annual, quarterly and current filings as may be required of the Client
pursuant to the Securities and Exchange Act of 1934 and Regulations of the
Securities and Exchange Commission promulgated pursuant to the 1934 Act.
3. Compensation
In consideration for such services, Client agrees to pay IIL pursuant to
fee schedule set forth in paragraph 1 above. Billings for services shall be
invoiced by IIL and paid upon receipt.
<PAGE>
Financial Services
CONSULTING AGREEMENT Page 2
4. Payment of Expenses
IIL must secure in writing approval in advance for any expense that may be
contracted on behalf of Client in excess of $400 in the aggregate. Expenses, if
approved, are to be invoiced by IIL and paid upon receipt. In addition to
charges for services, Client will be billed for all normal and incidental
identifiable costs such as copying charges, telephone expenses, delivery fees,
filing fees, and transcription fees; however, travel expenses, expert witness
fees and other extraordinary charges will not be incurred without prior
approval.
5. Unpaid Charges
It is agreed that if at any time any invoice rendered by this Firm to
Client for investment banking, appropriate legal services and expenses remains
unpaid for any reason for longer than 30 days, we shall have the right to
discontinue performance of further services and to withdraw as your attorneys,
regardless of the status of any matter in which we will be involved and
regardless of any event or proceeding which may then be pending, unless we have
reached a subsequent written agreement with respect thereto.
6. Late Charges
An amount past due will incur a late charge, after 30 days, of 1.5% per
month (18% per annum) of the total unpaid balance. Late charges will continue to
accrue at the same rate on any unpaid balance during any collection efforts and
until the entire bill is paid in full, unless a subsequent agreement with
respect to such charges is made and reduced to writing. Should it become
necessary to seek collection of any past due statement, you agree to pay all
reasonable costs of collection including reasonable attorneys' fees and all
interest incurred.
7. Arbitration of Any Disputes
It is agreed that any dispute arising our of this Agreement, or the Firm's
representation of you, shall be resolved by binding arbitration in Las Vegas,
Nevada, by the American Arbitration Association.
8. Liability of IIL
In furnishing Client with advice and other services as requested, neither
IIL nor any owner, employee or agent of IIL, shall be liable to Client or its
creditors for ordinary errors of judgment or for anything except gross
negligence, wilful malfeasance, or bad faith, in the performance of its duties
or reckless disregard of its obligations and duties under the terms of this
agreement. It is further understood and agreed that IIL may rely upon
information furnished to it reasonably believed to be accurate and reliable and
that, except as herein provided, IIL shall not be accountable for any loss
suffered by Client by reason of Client's action or non-action on the basis of
advice, recommendation or approval of IIL, its owners, employees or agents.
<PAGE>
Financial Services
CONSULTING AGREEMENT Page 3
9. Good Faith and Fair Dealing
All parties to this agreement hereby covenant expressly to deal with each
other honestly, fairly and in good faith in all respects, and to provide each
other with reasonable further assurances in furtherance of their mutual
performances with respect to this Agreement.
10. Independent Contractor
IIL is and shall at all times be understood and deemed to be an independent
contractor without authority to act or represent Client or its clients, except
as provided or authorized in this agreement.
11. Non-exclusivity
Client recognizes and acknowledges that this agreement is non-exclusive,
and that accordingly IIL now renders and may in the future render services to
other clients, some of which may be of a nature similar to those agreed to be
performed herein, or to clients with similar businesses, needing similar advice.
IIL is and shall be free to render any such service or advice and shall not be
required to devote full-time and attention to its obligations under this
agreement, but only such amount as is reasonably necessary.
12. Control
Nothing contained herein shall be deemed to require any action by any
Corporation contrary to law or its constituent documents or to relieve the board
of directors thereof from responsibility for control of the affairs of such
corporation.
13. Ownership of Files and Records
Except as to original records or any records or files which we accept upon
the understanding that they belong to you, it hereby is agreed that all files,
copies of documents, correspondence or other materials which we may accumulate
in connection with your representation, including copies of materials filed with
any regulatory agency, shall be the property of IIL. Upon the termination of the
engagement, IIL will return any property belonging to you upon your request.
Copies of our files and other materials which IIL may have accumulated during
our representation will be made available to Client at its expense; however, it
is specifically agreed that IIL shall have the right, in its discretion, to
dispose of these files at such times as it determines reasonably that such files
need not be retained any longer. After such destruction, such files will no
longer be available.
14. Termination
The term of this agreement shall begin with the complete execution hereof,
and shall continue in effect for until terminated by either party in writing.
Upon termination, all accrued charges shall be promptly invoiced and paid.
<PAGE>
Financial Services
CONSULTING AGREEMENT Page 4
15. Miscellaneous
This agreement sets forth the entire agreement and understanding between
the parties and supersedes all prior discussions, agreements and understandings,
if any, of any and every kind and nature, between them. This agreement is made
and shall be construed and interpreted according to the laws of the Client's
place of Incorporation if that be Nevada or Texas, and if not, pursuant to the
laws of the State of Nevada.
Accordingly the parties cause this agreement to be signed by their duly
authorized representative, as of the date written below.
Intrepid International, Ltd.
by
/s/
--------------------------
Kirt W. James, President
The above is understood and agreed to and I state under the penalties of perjury
that I am authorized to execute this letter agreement:
Net Master Consultants, Inc.
Date: 1/1/99 By: /s/
----------------------- -------------------------------
Dan Sifford, President
<PAGE>
Attachment 1
Description of Mission and Services Offered
<PAGE>
Intrepid International, S. A.
Description of Mission and Services Offered
I. Mission Statement
Intrepid International, S. A. (Athe Company@) was incorporated in the
Republic of Panama in 1984 to offer financial services to natural resource
companies, primarily those engaged in the production of oil and gas. Following
the world wide collapse of oil prices in the mid-eighties, the Company broadened
the focus of its universe of support services to include a wider range of
companies, with an emphasis on public companies and private companies, companies
engaged in the transition from privately held to publicly held, and development
stage companies, whether public or private, requiring professional business and
corporate guidance. In August of 1997 the Company sought a United States
Representative and entered into a relationship with a group of corporate and
business specialists who, after contracting with the Company, incorporated as
Intrepid International, Ltd. (AIntrepid US@) to provide the required
representation and agency for the Company in North America and Europe. Intrepid
US is incorporated in the State of Nevada.
Intrepid enjoys a wide range of brokerage community and financial services
relationships which form the basis of its ability to introduce client companies
to consultants, professionals, broker dealers and others who may be of service
to client companies in pursuing the business plan and other objectives the
client may have.
Intrepid is not an investment banker, nor a broker or dealer in securities.
Intrepid is a provider of technical support services to client companies.
Intrepid does not practice law or supply legal services generally, however,
Intrepid's counsel may, under appropriate circumstances be available to client's
counsel, where such assistance is requested and appropriate.
Intrepid provides its services on a negotiated time/fee basis. Intrepid
does not provide services for commissions based upon the success or failure of
any corporate program, and Intrepid is not a fund-raiser or a source of capital
financing. However, sources of capital financing exist, and Intrepid is often
able to provide the introductions to suitable professionals, business brokers
and securities professionals who may be able to assist an issuer in developing
or executing such fund raising programs as the issuer may adopt.
The principal focus and benefit of the services offered by Intrepid are not
its client's capital formation nor fund raising activities, but the refinement
of client's business plan, analysis of its corporate structure, evaluation of
its current filing status and filing responsibilities, currency and accuracy of
financial information and auditability or status of current and past audits and
audit procedures, to assist managers in making the conceptual and procedural
transitions imposed upon Officers and Directors, with respect to shareholders,
shareholder rights, and maintenance of the kinds current public information
necessary to position a company to consider public trading of its existing
securities, and to maintain its impeccability as a publicly trading company if
and when its securities are exposed to the public markets.
<PAGE>
Intrepid International, S. A.
DESCRIPTION OF MISSION AND SERVICES OFFERED
Page 2
Accordingly, the mission of Intrepid is to assist client companies in
avoiding costly mistakes and pitfalls in corporate management, going public,
being public, and in handling the various different relationships with
professionals and the public which are appropriate, practical, efficient and
cost-effective in managing a public corporation.
II. Services to Issuers
Every Corporation and Issuer of Securities is unique. Its businesses,
structure, aspirations status and time horizons are particular to the interest
of its shareholders, and the policies of its Management. Intrepid's services may
address the full spectrum of corporate situations.
A. PUBLIC AND PRIVATE COMPANIES
1. Closely Held Private Companies are corporations, limited partnerships
and limited liability companies, held by a relatively small group of
shareholders, often the founders, and usually not less than two nor more
than 35 shareholders. Typically, the shareholders know each other and/or
some or all of the managers. Such a company may have determined to stay
small and never go public. Such a company may intend to grow, and keep open
the vision of expanding into public ownership at some future time. There
are important considerations for mangers of this latter group, chiefly the
understanding that all public companies must be auditable. This means not
only that books and records be kept in an orderly and consistent manner,
but that some corporate understanding the special accounting rules of
Regulation SX (promulgated by the Securities and Exchange Commission) be
developed and considered in connection with the acquisition of assets or
the issuance of stock for property or other rights, particularly. It is
also important to develop an understanding, policy, format and consistent
procedure for meetings of Directors, Shareholders and maintaining proper
corporate minutes, from inception and thereafter.
2. More widely held Private Companies are companies whose securities do not
trade on any public market, but which have a growing shareholder base no
longer characterized by personal relationships between shareholders and
management. Such companies may wish to remain private; however, pressure to
deal with public company issues may arise, invited or not, as the
shareholder base expands, the business grows in profitability, size and
extent of operations and the passage of time, the passing of original
shareholders and the inheritance of ownership by a family group, the need
to attract new investment, the desire of original owners to retire and to
develop an exist strategy for the sale of their business or ownership
thereof. Going public is a series of successive headaches, best cured by
knowledge of potential pitfalls and early preparation for eventualities.
The best policy is always to gather information early and prepare.
<PAGE>
Intrepid International, S. A.
DESCRIPTION OF MISSION AND SERVICES OFFERED
Page 3
3. Public Companies come in more than one distinctive status, with
different corporate responsibilities and opportunities. It is essential for
all issuers of any size and status to be mindful of anti-fraud and similar
provisions in connection with any transaction in securities.
(a) 15c2-11 Companies are those which do not and are not required to file
reports directly to the Securities an Exchange Commission, but whose
securities trade over-the-counter, normally on the OTC Bulletin Board
maintained by the NASD. The OTC Bulletin board is not and must not be
confused with NASDAQ. The term Athe over the counter market@ was once used
to refer to NASDAQ, but that reference or the use of that terminology today
is inappropriate and potentially wrongful. A 15c2-11 company has not
registered the issuance of its securities under the Securities Act of 1933,
nor has it registered any class of its securities for trading under the
Securities Exchange Act of 1934. Such a company has acquired its
shareholder base by one or more private placements or limited public
offerings, perhaps pursuant to Regulations A or D, or other exemption
available under the 1933 Securities Act or promulgated by the Commission
pursuant to the 1933 Act. 15c2-11 Companies, which do not report to SEC,
must report to current information to their market makers and others with
respect to a form commonly called their A15c2-11 Report@. The company must
be audited and the audit must be brought current at least each fiscal year,
and preferably more often. Current unaudited financial statements are
important between audit cycles, and changes in the business and operations
of the company, significant share ownership information, and other material
information must be available to the public. Failure to do so may result in
de-listing, stop trading, or even liability in extreme cases.
The OTCBB is in transistion to phase in the the requirement that companies
be or become reporting companies.
(b) (ss.)15(d) Companies are those which have issued securities pursuant to
an effective Registration Statement, under the Securities Act of 1933.
While the securities of such companies do not trade on NASDAQ or any
National or Regional Exchange, such companies are required to furnish
Annual Reports, Quarterly Reports, and Current Reports, in the forms
prescribed by the Commission. The securities of such companies may trade on
the OTC Bulletin Board, or not at all. The reporting requirements are not
contingent upon whether such a company is active, trading, or not. It is
vital that the financial and other information be gathered at the end of
each reporting cycle and that it be presented in its appropriate form and
properly and propitiously filed.
(c) (ss.)13 Companies are those with securities that do trade on NASDAQ or
an Exchange, or even if not trading, which have a class of securities
registered under (ss.)(ss.)12(b) or 12(g) of the Securities Exchange Act of
1934. Such Issuers have extensive additional reporting requirement under
(ss.)13 of the 1934 Act and Regulations promulgated with respect thereto.
These companies must be concerned with reports of insider trading, and must
observe special rules for calling shareholder meetings whether or not
proxies are solicited, among other specific and detailed requirements.
<PAGE>
Intrepid International, S. A.
DESCRIPTION OF MISSION AND SERVICES OFFERED
Page 4
(d) the most common pitfall of private companies which have become public
by submission through a broker/dealer (market maker) to the NASD for
permission to publish a quote on the OTC Bulletin Board is quite simply
stated: once the Company is up, and conditions change, or time passes, the
public information concerning the company grows stale. Companies must
maintain a regular updating process, chiefly of financal information,
un-audited quarterly financial statements, and an annual year-end audit.
15c2-11 Companies, which do not report to SEC, must report to current
information to their market makers and others with respect to a form
commonly called their A15c2-11 Report@. Reporting Companies use SEC forms
and file quarterly, annually. Current significant events must be disclosed
promptly in any case. The company must be audited and the audit must be
brought current at least each fiscal year, and preferably more often.
Current unaudited financial statements are important between audit cycles,
and changes in the business and operations of the company, significant
share ownership information, and other material information must be
available to the public. Failure to do so may result in de-listing, stop
trading, or even liability in extreme cases.
B. INTREPID OFFERS technical, clerical, and professional support for
private and public issuers at each of the stages of corporate development. Its
particular services are those that the particular issuer requires and requests.
Intrepid has no fixed program. It can provide some or all of the appropriate
services, to complement and support the skills, knowledge, experience and
availabilities of corporate management.
1. Audit Coordination. The basic and fundamental focus of responsible
corporate management is the maintenance of proper financial information in
auditable form. A company which is not auditable cannot go public, and may
find itself unsalable even privately. A public company cannot acquire a
private company or its business unless the target of acquisition is capable
of being audited. Reg SX audits involve special considerations and must be
conducted by auditors professionally equipped, and preferably experienced,
for doing audits designed to meet the standards and possible review by NASD
and/or SEC examiners. The audit is the table on which the house of cards
rests. Its importance cannot be overstated. Many issuers find it useful to
obtain audit coordination services, to assist them in communicating
effectively with their independent auditor, and in identifying the
information to be gathered for the auditor, and submitting such information
in the form must useful to the auditor for efficiency and accuracy.
Intrepid can provide references to any one or all of a number of
experienced auditors, with special expertise in various business segments,
or can assist the issuer in working with any qualified auditor of its
choice. Intrepid can evaluate the adequacy of audit procedures and alert
the issuer if something not considered should require attention. Intrepid
does not conduct audits or instruct or control auditors or the results of
any audit. Intrepid facilitates effective communication between auditor and
issuer, if and as desired by its clients. Intrepid's evaluation of auditors
for its clients is limited to whether the designated auditor is effectively
conversant with Regulation SX, and whether the auditors experience and
qualifications appear reasonably suitable for the size and scope of the
audit required.
<PAGE>
Intrepid International, S. A.
DESCRIPTION OF MISSION AND SERVICES OFFERED
Page 5
2. Business Plans and Mission Statements are important documents for any
corporation public or private. The Mission Statement sets for the goals of
the business. The Business Plan describes the business, its personnel, its
operations, earnings, facilities and perhaps its projections for future
years of operation based upon assumptions carefully considered. The
effectiveness and credibility of these documents, for any purpose, depends
upon their meeting the formal and contextual expectations of persons who
read such plans regularly. Intrepid can assist any company in development
of such documents to any standard the client may require. Such documents
are not offering documents. They should not be confused with offers of
securities or solicitations of investment. While they may be useful in
connection with such activities, offering documents require special
attention and must never be casually constructed or disseminated.
3. Business Valuation and Appraisals are often useful to owners and
managers of business. Intrepid can provide detailed professional evaluation
and appraisals of any going concern, which meet the highest professional
standards. Such appraisals may be useful for internal information, or in
connection with purchase or sale of a given business. Such Valuations and
Appraisals of businesses are not audits or financial statements respecting
the issuer of securities and should not be confused with offers of
securities or solicitations of investment. While they may be useful in
connection with such activities, offering documents require special
attention and must never be casually constructed or disseminated.
4. Certificate and Transfer Agency. Intrepid is not a Transfer Agent nor
Agent for maintaining the Certificate and Transfer Records of its
issuer-clients. Many small or private issuers maintain their own records
and perform their own Certificate and Transfer function. When the
securities of an issuer are traded publicly, or when private transactions
become other than routine and rare, the company should retain the services
of a bonded Certificate and Transfer Agent, for its own protection and to
insure the orderly and professional handling of its Certificate and
Transfer function. Intrepid can recommend such agencies from a number of
reputable choices, and, whatever choice, can assist and coordinate the
process by which the Agent is engaged, a certified shareholder list
prepared, and Intrepid can co-ordinate communication between the issuer and
its Transfer Agent, if desired by its client.
5. Legal Opinions. Many different corporate transactions require or are
facilitated by a legal opinion by an attorney. There is no reason why such
opinions could not or should not be prepared by the client's own counsel or
independent counsel of the client's choice. Some clients express the
preference that certain legal opinions be provided or secured by Intrepid
as a part of the services selected and requested by the client. Depending
upon the nature of the opinion required, Intrepid's counsel may be able to
provide appropriate legal opinions on the issuer's behalf of for the
issuer's benefit; provided that at all times material to such
participation, and to any participation, by Intrepid Counsel, it be clearly
and expressly understood that Intrepid Counsel is counsel to Intrepid, and
not to the Issuer, and that should the Issuer request for its own benefit
that Intrepid Counsel be regarded or referred to as ASpecial Counsel@ to
the Issuer, it be understood and intended
<PAGE>
Intrepid International, S. A.
DESCRIPTION OF MISSION AND SERVICES OFFERED
Page 6
that any such participation be limited to the specific purposes for which
Intrepid may have been retained, and limited to the specific tasks
requested of Intrepid which are appropriately referred to its Counsel.
Intrepid Counsel shall not become or be construed to be an advisor or
confidant of any client outside the scope of activities requested by the
Client of Intrepid. Intrepid Counsel shall be available to consult with
Client's counsel in a normal and professional manner, in furtherance of the
responsibilities assigned to Intrepid by the client, or at arms length as
between Intrepid and its Client.
6. Reporting Documents. Intrepid, and its Counsel can assist any issuer in
preparing and causing the assembly and filing of reports required of public
companies, with information supplied by the issuer. Most common are Annual,
Quarterly and Current Reports, for reporting companies, and Issuer
Information Statements pursuant respect to form 15c2-11 with respect to
non-reporting companies.
7. Offerings and Offering Documents. Any offering or solicitation of any
transactions in securities requires careful conformity to law and
regulation of the United States and possibly State or other local
Jurisdictions. Intrepid can assist any issuer-client in the preparation of
offering documents, of several varieties, and Intrepid, with the assistance
of its counsel can provide information as to the apparent availability or
non-availability of any form of offering, if requested by its clients.
Intrepid does not conduct offering for the issuer, but assists the
management of the issuer in doing so. Intrepid does not solicit investors
or investment for its clients. Intrepid may provide introductions which may
result in negotiations between sophisticated persons, but Intrepid does not
take part in soliciting capital, other than its technical, clerical, and
other specific support for management activities. It is appropriate and
proper that most solicitations, if there are to by any, be conducted for
the issuer through registered broker/dealers. Any activity by Intrepid in
fund raising or capital formation activities by or for an issuer-client
shall be limited to ministerial performance and execution of matters passed
upon and directed by management.
8. Mergers and Acquisitions. Intrepid has considerable experience in
assisting issuers engaged in merger, acquisitions or other forms of
corporate reorganizations. Intrepid does not broker mergers or
acquisitions. Intrepid can provide substantial assistance to issuers so
engaged, with the participation of its counsel, with respect to the formal
and legal requirements of tendering, calling shareholder meetings and
conducting them properly, preparing minutes and certifications of
shareholder meetings, whether or not proxies be requested, and executing
filing requirements with respect to such transactions before and after
their consummation as may be appropriate. Intrepid does not search for
merger and acquisition candidates, but it is often contacted by such
candidates (who are not its clients). In the event that an introduction by
Intrepid results in a transaction, Intrepid will not claim or receive any
finders fee or commission for such introduction, but will continue in its
invariable practice of billing clients for time and effort expended at
pre-agreed hourly rates.
<PAGE>
Intrepid International, S. A.
DESCRIPTION OF MISSION AND SERVICES OFFERED
Page 7
9. Market Coordination, Shareholder and Broker Relations. It is the
function and responsibility of each issuer to deal with relationships
arising from public interest and access to its securities. The volume of
calls and kinds of technical information requested may become burdensome to
managements of limited size, resources or expertise. Intrepid can accept
the ministerial delegation of such management functions and can participate
public relations, shareholder relations, broker relations and market
co-ordination; provided that such delegation shall be confined to carrying
out corporate policy, and provided that information disseminated shall be
authorized and directed by the issuer, and shall not include any public or
private offering, solicitation or advertising, in connection with any offer
or sale of securities.
Structuring Deals. Intrepid does not structure deals for its clients. It does
present to clients its knowledge and experience commended for consideration by
management in management's development of its own plans and programs. Intrepid
neither recommends nor discourages any company's going public. It offers the
following GENERAL CONSIDERATIONS FOR COMPANIES EVALUATING GOING PUBLIC, a copy
of which is provided herewith.
III. Management of Intrepid
A. INTREPID INTERNATIONAL, S.A. The officers and directors of Intrepid
International, S. A. (Panama) are comprised of three individuals; Laurencio Jaen
O., Teodoro F. Franco L. and Leopoldo Kennion G. All three of these individuals
are Panamanian citizens and each serves as an officer and a director of the
Company.
Laurencio Jaen O., an original incorporator who has served as President and
Director of the Company since its inception in 1984, resides in Panama City,
Republic of Panama. He is, and has been for the past twenty five years, Vice
President of Indiasa Corporation ("Indiasa"), a Panamanian corporation, which,
through one of its subsidiaries, Robmar International, is involved in the
manufacture and distribution of chemical products in Argentina and Brazil and
which, through its former subsidiary Indiasa Aviation Corporation, was, for
eight years ending in 1981, engaged in aviation consulting, the leasing,
purchase and sale of aircraft, and the operation of a cargo airline, primarily
in Latin America. Mr. Jaen was a founder of PAISA, Panama's international
airline, served as president of the Colon Free Zone (the world's largest free
trade zone), and as Director of Panama's Social Security Administration. He has
also served as the President of the Panamanian Chamber of Commerce, and as a
member of the Board of Presidential Advisors of the Republic of Panama.
Teodoro F. Franco L., Secretary and a Director of the Company, has, for
thirty years, been a specialist in maritime and aviation law. Mr. Franco is a
partner in Franco and Franco, one of the most prestigious law firms in Panama
with offices around the world. In addition to his law practice he has served as
Panamanian Consul to Liverpool, England and for the past five years as
Ambassador to Great Britain. The firm of Franco and Franco is regarded with the
highest degree of integrity and professionalism in the business and political
community in Panama with its partners and several of its associates holding or
having held public office. Teodoro Franco's
<PAGE>
Intrepid International, S. A.
DESCRIPTION OF MISSION AND SERVICES OFFERED
Page 8
brother and partner, Dr. Juaquin F. Franco, Jr., has held many public offices
over the past four decades, most recently as the Governor of Colon Province, the
state containing the Atlantic entrance to the Panama Canal and the Colon Free
Zone. His nephew and associate in the firm, Juaquin F. Franco, III, has served
as the Minister of Commerce and is currently a member of the House of
Representatives and a candidate for President of the Republic. The firm
practices maritime, aviation and commercial law and currently is the legal firm
for: IBERIA (the Spanish national airline), KLM (the Dutch national airline),
VIASA (the Venezuelan national airline), Aeroflot (the Russian national airline)
and various smaller Latin American national airlines as well as being the
registered agents for thousands of ocean going ships around the world flying the
Panamanian flag. Mr. Franco brings to the Company a wealth of international
legal, commercial and diplomatic experience.
Leopoldo Kennion G., Treasurer and a Director of the Company, is, and has
for twenty years, been a Certified Public Accountant specializing in
international accounting and is an associate in the law firm of Franco and
Franco. Mr. Kennion practices maritime, aviation and commercial accounting
serving the specialized needs of the transnational clients of Franco and Franco
by providing an interface between them and their auditors.
J. Dan Sifford, Jr., is the United States Managing Director for Intrepid
International, S.A. (Panama). He is fluent in the Spanish Language. His
biographical information is found below.
B. INTREPID INTERNATIONAL, LTD. The officers and directors of Intrepid
International, Ltd. (Nevada) are comprised of two individuals; KIRT W. JAMES,
and J. DAN SIFFORD, JR. In addition, WILLIAM STOCKER, Esq. serves as the United
States General Counsel. All three of these individuals are U. S. citizens.
Kirt W. James, President and Director, has a lifelong background in
marketing and sales. From 1972 to 1987, Mr. James was responsible for sales and
business administrative matters for Glade N. James Sales Co., Inc.; and from
1987 to 1990 Mr. James built retail markets for American International Medical
Supply Co., a Public Company. In 1990 he formed and become President of HJS
Financial Services, Inc., and is responsible for day to day business of the firm
and consults Client's business and Product Development. During the past five
years Mr. James has been involved in the valuation, sale and acquisition of
numerous private businesses and planning for the entry of private corporations
into the public market place for their securities.
J. Dan Sifford, Jr., Executive Vice President, Secretary/Treasurer and
Director, brings to the Company an extensive experience in Corporate management
and familiarity with transnational business, particularly in Latin America. From
1970 to 1982, he was President and sole shareholder of Overseas Aviation
Corporation, an all cargo airline, with operations throughout South America and
Africa. He was founder, President and Chief Executive Officer of Airline of the
Virgin Islands from 1982 until 1993. He served for many years as President of
Indiasa Corporation which, through one of its subsidiaries, was involved in the
manufacture and distribution of chemical products in Argentina and Brazil, and
which, through another subsidiary, was for eight years engaged in aviation
consulting, the leasing, purchase and sale of aircraft, and
<PAGE>
Intrepid International, S. A.
DESCRIPTION OF MISSION AND SERVICES OFFERED
Page 9
the operation of a cargo airline, primarily in Latin America. In recent years he
has been engaged continuously in a wide variety of business activities,
including the development of new business ventures.
William Stocker, U.S. Counsel, is an attorney with extensive experience in
real estate, business law and bankruptcy litigation. During the past five years,
he has restricted his practice to general corporate law and services to
corporate clients, dealing with acquisitions, reorganizations and mergers
involving young and emerging businesses. He was admitted to practice in
California on January 13, 1969, and has been a member in good standing
continuously since admission. He is also admitted to practice before the United
States Supreme Court, the United States Court of Claims, the United States Court
of Appeals for the Ninth Circuit, and the United States District Courts for
several of the Federal Districts.
From 1969 until 1980, Mr. Stocker was associated with Fadem, Kanner, Berger
and Stocker a real property litigation firm. Following which, from about 1980 to
1984, he was Chief of Litigation for Bear, Kotob, Ruby and Gross, a general
business, tax and bankruptcy firm. From 1984 through 1986, Mr. Stocker served as
Chief of Litigation for the business firm of Davis, Bolt and Lee. From 1987 to
the present, he has been in private corporate practice, involved in business
formation, and development stage corporate securities matters, and has served as
General or Special Securities Counsel to more than forty development stage
issuers. From 1991 to the present, Mr. Stocker has been Counsel to Mr. James,
and HJS Financial Services, Inc.
- --------------------------------------------------------------------------------
Exhibit 6.2
ATTORNEY DISCLOSURE AND SPECIAL RELATIONSHIP AGREEMENT
- --------------------------------------------------------------------------------
<PAGE>
ATTORNEY DISCLOSURE AND
SPECIAL RELATIONSHIP AGREEMENT
Karl E. Rodriguez
ATTORNEY AT LAW
This Agreement is made by and between INTREPID INTERNATIONAL, LTD., a
Nevada Corporation, (hereafter "Intrepid"), and NET MASTER CONSULTANTS,
INC. a Texas Corporation, (hereafter "Intrepid-Client"), and KARL E.
RODRIGUEZ, Exim International, Inc.'s General Counsel, and dated January 1,
1999. In consideration of the mutual promises contained herein, and on the
terms and conditions herein set forth, the parties agree as follows:
A. SUMMARY.
Net Master Consultants, Inc. has employed Intrepid International, Ltd. to
perform certain financial services to Client, some of which services are to be
provided for Client, and in the Client's name, by attorneys with established and
continuing relationship to Intrepid. The purpose of this agreement is to provide
full written disclosure, and to define special character of both the ostensible
and actual relationships between the parties.
KARL E. RODRIGUEZ is actually General Counsel of Exim International, Inc.
KARL E. RODRIGUEZ will be authorized by this agreement to act as ostensible
Special Transactional Counsel for Net Master Consultants, Inc..
A. RECITALS
1. Intrepid Retainer Agreement. Intrepid International, Ltd. is or will be
hereby retained as financial services consultants for the Intrepid-Client,
pursuant to that certain FINANCIAL SERVICES CONSULTING AGREEMENT of even
date herewith. Among the services contemplated to be provided by that
Agreement are the services of KARL E. RODRIGUEZ, attorney at law, as
Special Transactional Counsel for the Intrepid-Client.
2. Exim International, Inc., is a financial consulting firm, not a broker,
dealer or registered investment advisor, a principal consultant to Intrepid
International, Ltd.
3. Exim General Counsel. Karl E. Rodriguez, attorney at law, is General
Counsel to Intrepid's Consultant, Exim International, Inc., first and
foremost and always, and this paramount status and relationship has been
and is hereby fully disclosed, in connection with the Intrepid-Client's
consideration of the potential services of Karl E. Rodriguez as Special
Counsel with Limited Authority, in connection with, and only in connection
with the services requested and agreed to between Intrepid and the
Intrepid-Client.
4. Definition of "Special Counsel with Limited Authority". As used in this
Attorney Disclosure Agreement, this expression shall have the following
meaning, consistently and without exception: Exim General Counsel Karl E.
Rodriguez is authorized, where appropriate to employ the designation
"Special Counsel" or "Special Transactional Counsel" for the
Intrepid-Client, in connection with, and only in connection with services
to and for the Intrepid-Client requested by the Intrepid-Client to be
performed by Intrepid
<PAGE>
Attorney Disclosure and
Special Relationship Agreement
Karl E. Rodriguez
ATTORNEY AT LAW Page 2
pursuant to the FINANCIAL SERVICES CONSULTING AGREEMENT of even date
herewith. Exim General Counsel, Karl E. Rodriguez as between such Counsel
and the Intrepid- Client, is not Intrepid-Client's Counsel, nor counsel to
the Intrepid-Client generally, or in any other manner than specified in
this definition. Special Counsel will not take action which is not
authorized by the Intrepid-Client nor represent to any person any general
authority to speak for or bind the Intrepid-Client in any manner."
5. Intrepid-Client's right to decline the relationship. The Intrepid-Client
has been informed, and is informed hereby, that the Intrepid-Client is not
required to join in the special relationship disclosed and defined herein.
Intrepid-Client may employ or require its own counsel or independent
counsel for any and all purposes at its expense and in addition to its
obligations to Intrepid. The Intrepid-Client is advised to retain its own
counsel, as it may deem appropriate, to review and advise the
Intrepid-Client as to any matter arising from its relationship to Intrepid
or Exim's Counsel.
6. Management's Preference. It is the desire of sophisticated management
that the unnecessary expense of cumulative counsel with respect to purely
technical matters is not warranted, necessary or appropriate, with respect
to the limited authority and scope of the Special Counsel relationship, as
defined, and that no conflict of interest exists or is likely to arise from
the strict and precise observance of that relationship as defined.
Accordingly management understands, accepts and affirmatively requests such
an arrangement.
B. SPECIAL COUNSEL AGREEMENT
1. Special Counsel. The Intrepid-Client and Intrepid Counsel hereby agree
and adopt that special technical relationship of Special Counsel with
Limited Authority as defined hereinabove, for the sole and separate purpose
of allowing Intrepid Counsel to perform services appropriate to the
services of Intrepid requested by the Intrepid-Client.
2. Billings. Special Counsel (Exim's Counsel) shall invoice and bill
applicable time and services to Intrepid, separately with respect to
matters applicable to this Intrepid-Client. Time shall be billable at
$250.00/hr, and such incidental secretarial services shall be billable at
$85.00/hr, as may be reasonably and necessarily performed by its secretary.
Additional services may be performed by subcontractor attorneys, subject to
arrangements approved by the Intrepid-Client in advance. Intrepid shall be
responsible, as between Intrepid and its counsel, for the compensation and
discharge of its Counsel's billings. Intrepid shall include Counsel's
segregated billings along with its own, and, as between Intrepid and the
Intrepid-Client, the Intrepid-Client shall be responsible to Intrepid for
the total of its own and Counsel's billings. Certain special minimum fixed
fees shall apply to Legal Opinions: (a) Opinions for the Issuance of free
trading stock, $2,500.00; Opinions to remove restriction on issued
restricted securities; $2,000.00; Opinions to issue restricted securities,
as defined in Rule 144(a), $1,000.00.
<PAGE>
Attorney Disclosure and
Special Relationship Agreement
Karl E. Rodriguez
ATTORNEY AT LAW Page 3
3. Termination. The terms of this agreement may be terminate by either
Intrepid-Client or Special Counsel at any time upon written or other
reasonable notice to the other.
4. Miscellaneous This agreement sets forth the entire agreement and
understanding between the parties and supersedes all prior discussions,
agreements and understandings, if any, of any and every kind and nature,
between them. This agreement is made and shall be construed and interpreted
according to the laws of the Intrepid-Client's place of Incorporation if
that be Nevada or Texas, and if not, pursuant to the laws of the State of
Nevada.
Accordingly the parties cause this agreement to be signed by their duly
authorized representative, as of the date written below.
Intrepid International, Ltd.
by
/s/ /s/
- ----------------------------- -------------------------------
Kirt W. James, President Karl E. Rodriguez
attorney at law
The above is understood and agreed to and I state under the penalties of perjury
that I am authorized to execute this letter agreement:
Net Master Consultants, Inc.
Date: 1/1/99 By: /s/
----------------------- ---------------------------
Dan Sifford, President
- --------------------------------------------------------------------------------
Exhibit 6.3
ATTORNEY DISCLOSURE AND SPECIAL RELATIONSHIP AGREEMENT
- --------------------------------------------------------------------------------
<PAGE>
ATTORNEY DISCLOSURE AND
SPECIAL RELATIONSHIP AGREEMENT
William Stocker
ATTORNEY AT LAW
This Agreement is made by and between Intrepid International, Ltd., a Nevada
Corporation, (hereafter "Intrepid"), and Net Master Consultants, Inc. a Texas
Corporation, (hereafter "Intrepid-Client"), and William Stocker, Intrepid's
General Counsel, and dated January 1, 1999. In consideration of the mutual
promises contained herein, and on the terms and conditions herein set forth, the
parties agree as follows:
A. Summary.
Net Master Consultants, Inc. has employed Intrepid International, Ltd. to
perform certain financial services to Client, some of which services are to be
provided for Client, and in the Client's name, by attorneys with established and
continuing relationship to Intrepid. The purpose of this agreement is to provide
full written disclosure, and to define special character of both the ostensible
and actual relationships between the parties.
William Stocker is actually General Counsel of Intrepid International, Ltd.
William Stocker will be authorized by this agreement to act as ostensible
Special Securities Counsel for Net Master Consultants, Inc..
B. Recitals
1. Intrepid Retainer Agreement. Intrepid International, Ltd. is or will be
hereby retained as financial services consultants for the Intrepid-Client,
pursuant to that certain Financial Services Consulting Agreement of even
date herewith. Among the services contemplated to be provided by that
Agreement are the services of its General Counsel William Stocker, attorney
at law, as Special Securities Counsel for the Intrepid-Client.
2. Intrepid General Counsel. William Stocker, attorney at law, is General
Counsel to Intrepid, first and foremost and always, and this paramount
status and relationship has been and is hereby fully disclosed, in
connection with the Intrepid-Client's consideration of the potential
services of William Stocker as Special Counsel with Limited Authority, in
connection with, and only in connection with the services requested and
agreed to between Intrepid and the Intrepid-Client.
3. Definition of "Special Counsel with Limited Authority". As used in this
Attorney Disclosure Agreement, this expression shall have the following
meaning, consistently and without exception: Intrepid General Counsel is
authorized, where appropriate to employ the designation "Special Counsel"
or "Special Securities Counsel" for the Intrepid-Client, in connection
with, and only in connection with services to and for the Intrepid-Client
requested by the Intrepid-Client to be performed by Intrepid pursuant to
the Financial Services Consulting Agreement of even date herewith. Intrepid
General Counsel, as
<PAGE>
ATTORNEY DISCLOSURE AND
SPECIAL RELATIONSHIP AGREEMENT
William Stocker
ATTORNEY AT LAW Page 2
between such Counsel and the Intrepid-Client, is not Intrepid-Client's
Counsel, nor counsel to the Intrepid-Client generally, or in any other
manner than specified in this definition. Special Counsel will not take
action which is not authorized by the Intrepid-Client nor represent to any
person any general authority to speak for or bind the Intrepid-Client in
any manner."
4. Intrepid-Client's right to decline the relationship. The Intrepid-Client
has been informed, and is informed hereby, that the Intrepid-Client is not
required to join in the special relationship disclosed and defined herein.
Intrepid-Client may employ or require its own counsel or independent
counsel for any and all purposes at its expense and in addition to its
obligations to Intrepid. The Intrepid-Client is advised to retain its own
counsel, as appropriate, to review and advise the Intrepid-Client as to any
matter arising from its relationship to Intrepid or Intrepid's Counsel.
5. Management's Preference. It is the desire of sophisticated management
that the unnecessary expense of cumulative counsel with respect to purely
technical matters is not warranted, necessary or appropriate, with respect
to the limited authority and scope of the Special Counsel relationship, as
defined, and that no conflict of interest exists or is likely to arise from
the strict and precise observance of that relationship as defined.
Accordingly management understands, accepts and affirmatively requests such
an arrangement.
C. Special Counsel Agreement
1. Special Counsel. The Intrepid-Client and Intrepid Counsel hereby agree
and adopt that special technical relationship of Special Counsel with
Limited Authority as defined hereinabove, for the sole and separate purpose
of allowing Intrepid Counsel to perform services appropriate to the
services of Intrepid requested by the Intrepid-Client.
2. Billings. Special Counsel (Intrepid's Counsel) shall invoice and bill
applicable time and services to Intrepid, separately with respect to
matters applicable to this Intrepid-Client. Time shall be billable at
$250.00/hr, and such incidental secretarial services shall be billable at
$85.00/hr, as may be reasonably and necessarily performed by its secretary.
Additional services may be performed by subcontractor attorneys, subject to
arrangements approved by the Intrepid-Client in advance. Intrepid shall be
responsible, as between Intrepid and its counsel, for the compensation and
discharge of its Counsel's billings. Intrepid shall include Counsel's
segregated billings along with its own, and, as between Intrepid and the
Intrepid-Client, the Intrepid-Client shall be responsible to Intrepid for
the total of its own and Counsel's billings. Certain special minimum fixed
fees shall apply to Legal Opinions: (a) Opinions for the Issuance of free
trading stock, $2,500.00; Opinions to remove restriction on issued
restricted securities; $2,000.00; Opinions to issue restricted securities,
as defined in Rule 144(a), $1,000.00.
<PAGE>
ATTORNEY DISCLOSURE AND
SPECIAL RELATIONSHIP AGREEMENT
William Stocker
ATTORNEY AT LAW Page 2
3. Termination. The terms of this agreement may be terminate by either
Intrepid-Client or Special Counsel at any time upon written or other
reasonable notice to the other.
4. Miscellaneous This agreement sets forth the entire agreement and
understanding between the parties and supersedes all prior discussions,
agreements and understandings, if any, of any and every kind and nature,
between them. This agreement is made and shall be construed and interpreted
according to the laws of the Intrepid-Client's place of Incorporation if
that be Nevada or Texas, and if not, pursuant to the laws of the State of
Nevada.
Accordingly the parties cause this agreement to be signed by their duly
authorized representative, as of the date written below.
Intrepid International, Ltd.
by
/s//s/
- ----------------------------- -------------------------------
Kirt W. James, President William Stocker
attorney at law
The above is understood and agreed to and I state under the penalties of perjury
that I am authorized to execute this letter agreement:
Net Master Consultants, Inc.
Date: 1/1/99 By: /s/
----------------------- -------------------------------
Dan Sifford, President
