<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED
July 31, 1989 COMMISSION NO. 0-6649
JILCO INDUSTRIES, INC.
(exact name of registrant as specified in its charter)
California 95-207885
- ---------------------------- ------------------
(State or other jurisdiction I.R.S. Employer
of organization) Identification No.
P. O. Box 10539
Beverly Hills, California 90213
- ------------------------- -----
(Address or principal (Zip Code)
executive offices)
Registrant's telephone number, including area code is (310) 274-1986. Securities
registered pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
- --------------------------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes No X
------- -------
As of July 31, 1989, there were 449,991 shares of common stock outstanding.
<PAGE> 2
ITEM 1. Business
Registrant is not engaged in any business operations and has
not been so engaged since 1968.
ITEM 2. Properties
Registrant does not have an interest in any properties.
ITEM 3. Legal Proceedings
None.
PART II.
ITEM 5. Market for the Registrant's Common Stock and Related Security Holder
Matters
Increase and Decrease in Outstanding Securities Indebtedness
None.
Changes in Securities and Changes in Securities for
Registered Securities
None.
Defaults Upon Senior Securities
None.
Approximate Number of Equity Security Holders
- 2 -
<PAGE> 3
Number of Record Holders
Title of Class As of July 31, 1989
-------------- ---------------------
Common Stock 785
Submission of Matters to a Vote of Security Holders
Not applicable.
ITEM 6. Selected Financial Data
Five Year Summary of Operations
<TABLE>
<CAPTION>
Year ended July 31,
---------------------------------------------------
1989 1988 1987 1986 1985
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Expenses $ 6,577 $ 5,722 $ 3,300 $ 3,171 $ 2,962
Net loss $(6,577) $(5,722) $(3,300) $(3,171) $(2,962)
Loss per share $ (0.01) $ (0.01) $ (0.01) $ (0.01) $ (0.01)
(Note 2)
Total Assets $ 2,280 $ 1,882 $ 965 $ 835 $ 436
</TABLE>
The numerical note referred to above is included in the Notes to Financial
Statements. Registrant has not conducted any business operations during its last
five (5) fiscal years, except that during the above fiscal years it has incurred
expenses necessary to keep its good standing in its state of residence.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Refer to notes and financial statements.
ITEM 8. Financial Statements and Supplementary Data
The financial statements of Registrant are attached hereto as Exhibit
14(a).
- 3 -
<PAGE> 4
PART III.
ITEM 10. Directors and Executive Officers of the Registrant
<TABLE>
<CAPTION>
First Common Shares
Principal Elected Owned Beneficially
Name Occupation Age Director On July 31, 1989
---- ---------- --- -------- -----------------
<S> <C> <C> <C> <C>
Martha J. Kretzmer President, 56 1987 -0-
Secretary and
Treasurer of
Registrant
</TABLE>
ITEM 11. Management Remuneration and Transaction
No officer or director of Registrant receives any remuneration.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
Leonard M. Ross owns 400,955 shares of the issued and outstanding
stock of Registrant which constitutes approximately 89% of such stock.
Registrant does not have any subsidiaries.
Indemnification of Directors and Officers
The by-laws of the Corporation provide that the Corporation shall
indemnify each of its officers and directors, whether or not then in office, to
the extent permitted by the California General Corporation Law against all
reasonable expenses actually and necessarily incurred by such individuals in
connection with the defense of any litigation to which he or she may have been
made a party because he or she is or was a director or officer of the
Corporation. Directors and officers have no right to reimbursement in relation
to any matter in which such officer or director has been adjudged liable to the
Corporation for gross negligence or comparable misconduct in the performance of
his or her duties.
PART IV
- 4 -
<PAGE> 5
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The Registrant's financial statements are attached hereto.
(b) No materially important events occurred during the fiscal year
of Registrant that would require filing of Form 8-K.
(c) The Exhibits listed in the accompanying Exhibit Index on Page
12 are filed as part of this Form 10-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned thereunto duty authorized.
(Registrant) JILCO INDUSTRIES, INC.
By: /s/ MARTHA J. KRETZMER
--------------------------
Martha J. Kretzmer
President
Date: August 7, 1997
- 5 -
<PAGE> 6
JILCO INDUSTRIES, INC.
List of Financial Statements
The following financial statements of Jilco Industries, Inc. are
included in Item 8:
Balance sheets -- Years ended July 31, 1989 and 1988.
Statements of operations -- Years ended July 31, 1989, 1988
and 1987.
Statements of cash flows -- Years ended July 31, 1989, 1988
and 1987.
Notes to financial statements -- July 31, 1989.
- 6 -
<PAGE> 7
JILCO INDUSTRIES, INC.
BALANCE SHEETS
AS OF JULY 31,
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
1989 1988
--------- ---------
<S> <C> <C>
ASSETS
Cash $ 2,280 $ 1,882
--------- ---------
TOTAL ASSETS $ 2,280 $ 1,882
========= =========
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable $ -0- $ -0-
Notes payable to shareholder
(Note 3) 45,000 36,925
Accrued expenses (Note 3) 13,045 9,145
--------- ---------
Total current liabilities 58,045 51,070
--------- ---------
SHAREHOLDERS' DEFICIENCY
Common stock, no par value
1,500,000 shares authorized
449,991 shares issued and
outstanding 749,950 749,950
Accumulated deficit (805,715) (793,416)
--------- ---------
Total shareholders'
deficiency (55,765) (43,466)
--------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS'
DEFICIENCY $ 2,280 $ 965
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 7 -
<PAGE> 8
JILCO INDUSTRIES, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEARS ENDED JULY 31,
(UNAUDITED)
<TABLE>
<CAPTION>
1989 1988 1987
--------- --------- ---------
<S> <C> <C> <C>
EXPENSES
Professional
fees $ 1,795 $ 1,783 $ 1,500
Fees and
licenses 255 1,155 1,035
Interest expense
(Note 3) 4,085 2,519 500
State franchise
tax 405 200 200
Sundry 37 65 65
--------- --------- ---------
Total
expenses 6,577 5,722 3,300
--------- --------- ---------
NET LOSS (6,577) (5,722) (3,300)
ACCUMULATED DEFICIT,
BEGINNING OF
YEAR (799,138) (793,416) (790,116)
--------- --------- ---------
ACCUMULATED DEFICIT,
END OF YEAR $(805,715) $(799,138) (790,116)
========= ========= =========
NET LOSS PER SHARE
(NOTE 2) $ (0.01) $ (0.01) $ (0.01)
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 8 -
<PAGE> 9
JILCO INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JULY 31,
<TABLE>
<CAPTION>
1989 1988 1987
------- ------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(6,577) $(5,722) $ 3,300
Increase
(decrease) in
Accounts payable
and accrued
expenses 3,900 2,639 430
------- ------- -------
Net cash used
in operating
activities (2,677) (3,083) 130
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from
notes payable to
shareholder, net 3,075 4,000 -0-
------- ------- -------
Net cash
provided by
financing
activities 3,075 4,000 -0-
------- ------- -------
NET INCREASE
(DECREASE) IN
CASH 398 917 130
-------
CASH. BEGINNING
OF YEAR 1,882 965 835
------- ------- -------
CASH, END OF YEAR $ 2,280 $ 1,882 965
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 9 -
<PAGE> 10
NOTE 1 - THE COMPANY
The Company has been inactive since April 2, 1968 when it was discharged from
bankruptcy under its previous name of Sportways, Inc. The expenses the Company
has incurred represent those necessary to keep the Company in good standing in
its state of residence.
Fair Value of Financial Instruments
The Company measures its financial assets and liabilities in accordance with
generally accepted accounting principles. For certain of the Company's financial
instruments, including cash, accounts payable, and accrued expenses, the
carrying amounts approximate fair value due to their short maturities. The
amounts shown as notes payable also approximate fair value because current
interest rates offered to the Company for notes payable of similar maturities
are substantially the same.
Estimates
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements, as well as the reported amounts of expenses during the reporting
period. Actual results could differ from those estimates.
NOTE 2 - LOSS PER SHARE
All per share computations are based on 449,991 shares outstanding. There are no
common stock equivalents.
- 10 -
<PAGE> 11
NOTE 3 - NOTES PAYABLE TO SHAREHOLDER
Notes payable to shareholder consist of the following:
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991 1990 1989
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revolving note
payable (A) $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
Revolving note
payable (B) 8,250 8,250 8,250 5,250 4,250 2,000 1,000 -0-
Term note
payable (C) 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
------- ------- ------- ------- ------- ------- ------- -------
TOTAL $53,250 $53,250 $53,250 $50,250 $49,250 $47,000 $46,000 $45,000
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
(A) Accrued interest at 9% per annum. Principal and accrued interest due
on demand.
(B) Accrued interest at 11% per annum. Principal and accrued interest due
on demand.
(C) Accrued interest at 10% per annum. Principal and accrued interest due
on demand.
- 11 -
<PAGE> 12
EXHIBIT INDEX
Exhibit No. Description
3(1) Articles of Incorporation of the Company, as amended.
3(2) By-laws of the Company, as amended.
10(1) Revolving Demand Note, dated December 18, 1987, between the
Company and Leonard M. Ross.
10(2) Note Extension and Modification Agreement, dated July 13, 1988,
between the Company and Leonard M. Ross.
10(3) Promissory Note Extension Agreement, dated August 8, 1986,
between the Company and Leonard M. Ross.
- 12 -
<PAGE> 1
EXHIBIT 3(1)
ARTICLES OF INCORPORATION
OF
SPORTSWAYS, INC.
KNOW ALL MEN BY THESE PRESENTS:
We, the undersigned, have this day voluntarily associated
ourselves together for the purpose of forming a corporation under the laws of
the State of California.
I
The name of this corporation is:
SPORTSWAYS, INC.
II
The purposes for which this corporation are formed as follows:
A. The primary business is to engage in a general merchandise
business at wholesale and retail, and the manufacture, fabrication,
acquisition, production, distribution and sales of all forms of sporting goods,
equipment and products, health products, exercising devices and to otherwise
sell and deal in such personal property.
B. To carry on any business whatsoever which this corporation may
deem proper or convenient in connection with any of the foregoing purposes, or
otherwise, or which may be calculated, directly or indirectly, to promote the
interests of this corporation or to enhance the value of its property or
business.
C. To have and to exercise all of the powers and rights conferred
by the laws of the State of California upon corporations formed under the laws
pursuant to and under which this corporation is formed, as such laws are now in
effect or may at any time hereafter be enacted or amended.
D. To act as principal, agent, joint venturer, partner or in any
other capacity which may be authorized or approved by the board of directors of
this corporation.
E. To transact business in the State of California or in any
other jurisdiction of the United States of America or in the District of
Columbia or in the territories of the United States and in foreign countries.
The foregoing statement of purposes shall be construed as a statement
of both purposes and powers, and the purposes and powers in each clause shall,
except where otherwise expressed, by in no wise limited or restricted by
reference to or inference from the terms or provisions of any other clause, but
shall be regarded as independent purposes and powers.
III
The principal office of the corporation for the transaction of
business of the corporation is to be located in the County of Los Angeles,
State of California.
IV
The total number of shares authorized to be issued is one thousand
(1000) shares, which shares are without nominal or par value. Such shares may
be issued from time to
1
<PAGE> 2
time for such consideration as the directors from time to time determine.
V
The number of directors of this corporation shall be three (3), and
the names and addresses of the directors hereby appointed to act as first
directors of this corporation are:
RICHARD M. KLINE 9413 Sawyer Street
Los Angeles, California
JULES BISNO 9563 Olympic Boulevard
Beverly Hills, California
BARBARA JEAN KLINE 9413 Sawyer Street
Los Angeles, California
IN WITNESS WHEREOF, these Articles of Incorporation have been
subscribed by each person named therein as a director on this ___ day of April,
1958.
/s/ Richard M. Kline
------------------------------
RICHARD M. KLINE
/s/ Jules Bisno
------------------------------
JULES BISNO
/s/ Barbara Jean Kline
------------------------------
BARBARA JEAN KLINE
[ACKNOWLEDGMENT]
2
<PAGE> 3
[FILED STAMP]
CERTIFICATE OF AMENDMENT OF ARTICLES
OF INCORPORATION OF SPORTSWAYS, INC.
The undersigned, RICHARD M. KLINE and PHILIP SHORE, certify that they
now are and at all times herein mentioned have been the duly elected and acting
President and Secretary of SPORTSWAYS, INC., a California corporation, and
that: **
I
At a special meeting of the Board of Directors of the corporation duly
held at 6050 West Jefferson Boulevard, Los Angeles 16, California, on the 9th
day of February 1959, at 2:00 P. M., the following resolutions were duly
adopted:
RESOLVED that the provisions of Article IV of the Articles of
Incorporation be and the same are hereby stricken from the Articles of
Incorporation of this corporation, and in lieu thereof, there be
substituted the following provision as Article IV: "The total number
of shares authorized to be issued is TWO THOUSAND (2,000) shares,
which shares are without nominal or par value. Such shares may be
issued from time to time for such consideration as the Directors from
time to time determine. The total number of shares authorized to be
issued hereunder, cannot be increased, changed or altered except by
the vote or written consent of the holders of 100 per cent of the
outstanding voting shares."
RESOLVED FURTHER that the said amendment is hereby adopted and
approved.
RESOLVED FURTHER that the provisions of Article V of the
Articles of Incorporation which now read, "The number of Directors of
this corporation shall be three (3)" be amended to read: "The number
of Directors of this corporation shall be five (5)."
II
At a special meeting of the shareholders of the corporation duly held
at 6050 West Jefferson Boulevard, Los Angeles 16, California, at 3:00 P. M. on
the 9th day of February, 1959, the foregoing amendments to the Articles of
Incorporation were ratified and approved by resolutions identical in form to
said Directors' resolutions set forth in Paragraph I of this certificate.
III
The foregoing amendments were adopted and approved at said
shareholders meeting by the total vote of 1,000 shares.
3
<PAGE> 4
IV
The total number of shares of the corporation entitled to vote on or
consent to the adoption of such amendment is 1,000 shares.
DATED: February 9, 1959
/s/ Richard M. Kline
---------------------------------
RICHARD M. KLINE, President of
SPORTSWAYS, INC., a
California corporation
/s/ Philip Shore
---------------------------------
PHILIP SHORE, Secretary of
SPORTSWAYS, INC., a California
corporation
The undersigned, RICHARD M. KLINE, President and a Director of
SPORTSWAYS, INC., a California corporation, declares under penalty of perjury
that the foregoing is true and correct and that this certificate was executed
on the 9th day of February, 1959 at Los Angeles, California.
/s/ Richard M. Kline
---------------------------------
RICHARD M. KLINE
The undersigned, PHILIP SHORE, Secretary-Treasurer and a Director of
SPORTSWAYS, INC., a California corporation, declares under penalty of perjury
that the foregoing is true and correct and that this certificate was executed
on the 9th day of February, 1959 at Los Angeles, California.
/s/ Philip Shore
---------------------------------
PHILIP SHORE
4
<PAGE> 5
[FILED STAMP]
Number of shares without par value changed from 2,000 to 5,000
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
OF SPORTSWAYS, INC.
The undersigned, RICHARD M. KLINE and WILLIAM S. BARTMAN, certify that
they now are and at all times herein mentioned have been the duly elected and
acting President and Assistant Secretary of SPORTSWAYS, INC., a California
corporation, and that:
I
At a special meeting of the Board of Directors of the corporation duly
held at 6505 Wilshire Boulevard, Los Angeles, California, on the 5th day of
May, 1959, at 4:00 P. M., the following resolutions were duly adopted:
RESOLVED that the provisions of Article IV of the Articles of
Incorporation as amended by Paragraph I of Certificate of Amendment of
Articles of Incorporation of SPORTSWAYS, INC., dated February 9, 1959,
be and the name are hereby stricken from the Articles of Incorporation
of this corporation, and in lieu thereof, there be substituted the
following provision as Article IV: "The total number of shares
authorized to be issued is FIVE THOUSAND (5,000) shares, which shares
are without nominal or par value. Such shares may be issued from time
to time for such consideration as the Directors from time to time
determine. The total number of shares authorized to be issued
hereunder cannot be increased, changed or altered except by the vote
or written consent of the holders of 100 per cent of the outstanding
voting shares."
RESOLVED FURTHER that the said amendment is hereby adopted and
approved.
RESOLVED FURTHER that the provisions of Article V of the
Articles of Incorporation as amended by Paragraph I of the Certificate
of Amendment of Articles of Incorporation of Sportsways, Inc., dated
February 9, 1959, be further amended to add at the end of the Article
the following clause: "The number of Directors of this corporation as
provided for by this Article cannot be increased, changed or altered
except by the vote or written consent of the holders NINETY PER CENT
(90 per cent) of the outstanding voting shares. This number cannot be
changed by amendment of the By-laws of the corporation."
RESOLVED FURTHER that the said amendment is hereby adopted and
approved.
II
At a special meeting of the shareholders of the corporation duly held
at 6505 Wilshire Boulevard, Los Angeles, California, at 5:00 P. M. on the 5th
day of May, 1959, the foregoing amendments to the Articles of Incorporation
were ratified and approved by resolutions identical in form to said Directors'
resolutions set forth in Paragraph I of this
5
<PAGE> 6
certificate.
III
The foregoing amendments were adopted and approved at said
shareholders' meeting by the total vote of 1,000 shares.
IV
The total number of shares of the corporation entitled to vote on or
consent to the adoption of such amendment is 1,000 shares.
DATED: May 22, 1959
/s/ Richard M. Kline
----------------------------------
RICHARD M. KLINE, President of
SPORTSWAYS, INC., a
California corporation
/s/ William S. Bartman
----------------------------------
WILLIAM S. BARTMAN, Assistant
Secretary of SPORTSWAYS, INC.,
a California corporation
The undersigned, RICHARD M. KLINE, President and a Director of
SPORTSWAYS, INC., a California corporation, declares under penalty of perjury
that the foregoing is true and correct and that this certificate was executed
on the 22nd day of May, 1959 at Los Angeles, California.
/s/ Richard M. Kline
----------------------------------
RICHARD M. KLINE
The undersigned, WILLIAM S. BARTMAN, Assistant Secretary and a
Director of SPORTSWAYS, INC., a California corporation, declares under penalty
of perjury that the foregoing is true and correct and that this certificate was
executed on the 22nd day of May, 1959 at Los Angeles, California.
/s/ William S. Bartman
----------------------------------
WILLIAM S. BARTMAN
6
<PAGE> 7
[FILED STAMP]
Number of shares without par value changed from 5,000 to 1,500,000.
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
SPORTSWAYS, INC.
The undersigned, SAMUEL LECOCQ and WILLIAM S. BARTMAN, certify that
they now are and at all times herein mentioned, have been the duly elected and
acting Vice-President and Secretary of SPORTSWAYS, INC., a California
corporation, and that:
1. At a special meeting of the Board of Directors of the
corporation, duly held at Suite 1206, 6505 Wilshire Boulevard, Los Angeles 48,
California, on the 16th day of June, 1961, at 10:00 o'clock a.m., the following
resolutions were duly adopted:
RESOLVED that the provisions of Article IV of the Articles of
Incorporation be and the same are hereby stricken from the
Articles of Incorporation of this corporation, and in lieu
thereof there be substituted the following provisions as
Article IV:
"The total number of shares authorized to be issued
is 1,500,000 shares, which shares are to be without
nominal or par value. Such shares may be issued from
time to time for such consideration as the Directors
from time to time determine."
2. At a special meeting of the shareholders of the corporation,
duly held at Suite 1206, 6505 Wilshire Boulevard, Los Angeles 48, California,
on the 16th day of June, 1961, at 11:00 o'clock a.m., the foregoing amendments
to the Articles of Incorporation were ratified and approved by resolutions
identical in form to the Directors' resolutions set forth in Paragraph "1" of
this Certificate.
3. The foregoing amendments were adopted and approved at said
shareholders' meeting by the total vote of 5,000 shares, representing all of
the issued and outstanding shares of the corporation as of the date of the
meeting.
DATED this 23rd day of June, 1961.
/s/ Samuel Lecocq
----------------------------------
Samuel Lecocq
/s/ William S. Bartman
----------------------------------
William S. Bartman
7
<PAGE> 8
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
We are the Vice-President and Secretary, respectively, of SPORTSWAYS,
INC.; we have read the foregoing CERTIFICATE OF AMENDMENT OF ARTICLES OF
INCORPORATION OF SPORTSWAYS, INC., and know the contents thereof; and we
certify that the same is true of our own knowledge, except as to the matters
which are therein stated upon our information or belief; and as to those
matters we believe it to be true.
/s/ Samuel Lecocq
-------------------------------------
Samuel Lecocq
/s/ William S. Bartman
-------------------------------------
William S. Bartman
[ACKNOWLEDGEMENT]
8
<PAGE> 9
[FILED STAMP]
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
SPORTSWAYS, INC.
The undersigned, FRED PLOTKIN and WILLIAM S. BARTMAN, certify that
they now are, and at all times herein mentioned have been, the duly elected and
acting President and Secretary, respectively, of SPORTSWAYS, INC., a California
corporation, and further state that:
1. At a special meeting of the Board of Directors of the
corporation, duly held at Suite 1206, 6505 Wilshire Boulevard, Los Angeles 48,
California, on the 31st day of July, 1961, at 1 o'clock p.m., the following
resolutions were duly adopted:
RESOLVED: That Article IV of the Articles of Incorporation of
this corporation shall be and the same is hereby amended to add the following
paragraph only to said Article IV:
"The presently issued and outstanding shares of the
corporation, to wit: 5,000 shares without nominal or
par value, shall each be divided and split up into
180 shares without nominal or par value. The effect
of this amendment on all of the presently issued and
outstanding no par common stock of the corporation
will be to split up, subdivide and reconstitute each
such outstanding share into 180 no par value shares.
The shares of stock resulting from the division and
split up provided herein shall be included within the
1,500,000 shares authorized to be issued by the
corporation."
RESOLVED FURTHER: That the President and the Secretary of the
corporation be, and they are, hereby authorized and directed
to procure the adoption and approval of the foregoing
amendment by the vote or written consent of the Shareholders
of this corporation holding a majority of the voting power,
and thereafter to sign, execute, acknowledge and verify by
their oath and to file a Certificate of Amendment of Articles
of Incorporation in the form and manner required by Section
3672 of the California Corporations Code and in general to do
any thing necessary to effectuate said amendment.
2. At a special meeting of the Shareholders of the corporation,
duly held at Suite 1206, 6505 Wilshire Boulevard, Los Angeles 48, California,
on the 31st day of July, 1961, at 2 o'clock p.m., the following foregoing
amendments to the Articles of Incorporation were ratified and approved by
resolutions identical in form to the Directors' resolution set forth in
Paragraph 1 of this Certificate.
3. The foregoing amendments were adopted and approved at said
Shareholders meeting by the total vote of 5,000 shares, representing all of the
issued and outstanding
9
<PAGE> 10
shares of the corporation as of the date of the meeting.
DATED this 16th day of August, 1961.
/s/ Fred Plotkin
------------------------------
FRED PLOTKIN
/s/ William S. Bartman
------------------------------
WILLIAM S. BARTMAN
[ACKNOWLEDGEMENT]
10
<PAGE> 11
[FILED STAMP]
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
SPORTSWAYS, INC.
The undersigned, FRED PLOTKIN and WILLIAM S. BARTMAN, certify that
they now are, and at all times herein mentioned have been, the duly elected and
acting President and Secretary, respectively, of SPORTSWAYS, INC., a California
corporation, and further state that:
1. At a special meeting of the Board of Directors of said
corporation, duly held at Suite 1206, 6505 Wilshire Boulevard, Los Angeles 48,
California, on the 18th day of August, 1961, at 1:00 p.m., the following
resolution was duly adopted:
WHEREAS, it is deemed by the Board of Directors of this
corporation to be to its best interests and to the best
interests of its shareholders that its Articles of
Incorporation be amended as hereinafter provided:
NOW, THEREFORE, BE IT RESOLVED:
That the provisions of Article V of the Articles of
Incorporation be and the same hereby are stricken from the
Articles of Incorporation of this corporation, and in lieu
thereof the following provisions be adopted as new Article V
of the Articles of Incorporation of this corporation:
"V
"The number of directors of this corporation shall be
three (3). The number of directors may be changed by a
by-law, or an amendment thereof, duly adopted by the
shareholders. The names and addresses of the directors
appointed to act as first directors of this corporation are:
RICHARD M. KLINE 9413 Sawyer Street
Los Angeles, California
JULES BISNO 9563 Olympic Boulevard
Beverly Hills, California
BARBARA JEAN KLINE 9413 Sawyer Street
Los Angeles, California
2. At a special meeting of the Shareholders of the corporation,
duly held at Suite 1206, 6505 Wilshire Boulevard, Los Angeles 48, California,
on the 18th day of August, 1961, at 2:00 p.m., the foregoing amendment to the
Articles of Incorporation was approved, adopted and ratified by resolution
identical in form to the resolution of the Board of Directors, as set forth in
Paragraph 1 of this Certificate.
3. The foregoing amendment was approved, ratified and adopted at
said Shareholders' meeting by the total vote of 5,000 shares, representing all
of the issued and
11
<PAGE> 12
outstanding shares of the corporation as of the date of the meeting.
DATED this 18th day of August, 1961.
/s/ Fred Plotkin
-------------------------------------
FRED PLOTKIN
President
/s/ William S. Bartman
-------------------------------------
WILLIAM S. BARTMAN
Secretary
[ACKNOWLEDGEMENT]
12
<PAGE> 13
[FILED STAMP]
Certificate Of
RESTATED
ARTICLES OF INCORPORATION
OF SPORTSWAYS, INC.
I
The name of this corporation is:
SPORTSWAYS, INC.
II
The purposes for which this corporation are formed as follows:
A. The primary business is to engage in a general merchandise
business at wholesale and retail, and the manufacture, fabrication,
acquisition, production, distribution and sales of all forms of sporting goods,
equipment and products, health products, exercising devices and to otherwise
sell and deal in such personal property.
B. To carry on any business whatsoever which this corporation may
deem proper or convenient in connection with any of the foregoing purposes, or
otherwise, or which may be calculated, directly or indirectly, to promote the
interests of this corporation or to enhance the value of its property or
business.
C. To have and to exercise all of the powers and rights conferred
by the laws of the State of California upon corporations formed under the laws
pursuant to and under which this corporation is formed, as such laws are now in
effect or may at any time hereafter be enacted or amended.
D. To act as principal, agent, joint venturer, partner or in any
other capacity which may be authorized or approved by the board of directors of
this corporation.
E. To transact business in the State of California or in any
other jurisdiction of the United States of America or in the District of
Columbia or in the territories of the United States and in foreign countries.
The foregoing statement of purposes shall be construed as a statement
of both purposes and powers, and the purposes and powers in each clause shall,
except where otherwise expressed, by in no wise limited or restricted by
reference to or inference from the terms or provisions of any other clause, but
shall be regarded as independent purposes and powers.
III
The principal office of the corporation for the transaction of
business of the corporation is to be located in the County of Los Angeles,
State of California.
IV
The total number of shares authorized to be issued is 1,500,000
shares, which shares are without nominal or par value. Such shares may be
issued from time to time for such consideration as the directors from time to
time determine.
13
<PAGE> 14
The presently issued and outstanding shares of the corporation, to
wit: 5,000 shares without nominal or par value, shall each be divided and split
up into 180 shares without nominal or par value. The effect of this amendment
on all of the presently issued and outstanding no par common stock of the
corporation will be to split up, subdivide and reconstitute each such
outstanding share into 180 no par value shares. The shares of stock resulting
from the division and split up provided herein shall be included within the
1,500,000 shares authorized to be issued by the corporation.
V
The number of directors of this corporation shall be three (3). The
number of directors may be changed by a by-law, or an amendment thereof, duly
adopted by the shareholders. The names and addresses of the directors
appointed to act as first directors of this corporation are:
RICHARD M. KLINE 9413 Sawyer Street
Los Angeles, California
JULES BISNO 9563 Olympic Boulevard
Beverly Hills, California
BARBARA JEAN KLINE 9413 Sawyer Street
Los Angeles, California
We, the undersigned, do hereby certify:
1. That the foregoing RESTATED ARTICLES OF INCORPORATION
OF SPORTSWAYS, INC. correctly set forth the text of the Articles of
Incorporation of said corporation, as amended, to the date hereof.
2. That at a special meeting of the Board of Directors
of said corporation, duly held on the 31st day of August, 1961, at 2:00 p.m.,
at which meeting there was at all times present a quorum, the following
resolution was duly adopted:
WHEREAS, the original Articles of Incorporation of this
corporation, dated April 3, 1958, and filed with the Secretary
of State of the State of California on April 17, 1958, have
thereafter been amended from time to time; and
WHEREAS, it is deemed desirable to consolidate such amendments
with said original Articles of incorporation so as to restate
the entire text of the Articles of Incorporation of this
corporation and amendments thereto in a single certificate;
NOW, THEREFORE, BE IT RESOLVED:
That the document entitled RESTATED ARTICLES OF INCORPORATION
OF SPORTSWAYS, INC., this day submitted to
14
<PAGE> 15
the Board of Directors, correctly sets forth the text of the
Articles of Incorporation of said corporation, as amended, to
the date hereof, and that the same is hereby approved as the
RESTATED ARTICLES OF INCORPORATION OF SPORTSWAYS, INC.
That the President or a Vice President and the Secretary or
Assistant Secretary be and they hereby are authorized to
execute, verify and cause to be filed on behalf of this
corporation said RESTATED ARTICLES OF INCORPORATION OF
SPORTSWAYS, INC., to certify the same, and in general to do
any and all things necessary for the purpose of filing a
restatement of the Articles of Incorporation of Sportsways,
Inc. in a single certificate, in form or manner as permitted
or required by the Corporations Code of the State of
California.
IN WITNESS WHEREOF, we have executed this certificate this 31st day of August,
1961.
/s/ Fred Plotkin
-----------------------------
FRED PLOTKIN
PRESIDENT
SPORTSWAYS, INC.
/s/ Sidney J. Noveck
-----------------------------
SIDNEY J. NOVECK
SECRETARY
SPORTSWAYS, INC.
15
<PAGE> 16
[FILED STAMP]
SPORTSWAYS, INC.
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
The undersigned, FRED PLOTKIN and SANFORD, do hereby certify that they
are, and at all times herein mentioned have been, the duly elected and acting
President and Assistant Secretary of SPORTSWAYS, INC., a California
corporation, and that:
1. At a special meeting of the Board of Directors of the
corporation duly held at Suite 1206, 6506 Wilshire Boulevard, Los Angeles,
California, on the tenth day of January 1962, at 11:00 o'clock A.M., at which
time there was at all times present and acting quorum of the members of said
Board, the following resolution was adopted:
"WHEREAS, It is deemed by the Board of Directors of
this corporation to be in the best interests of the
corporation and of its shareholders that its Articles of
Incorporation be amended as hereinafter provide:
"NOW, THEREFORE, BE IT RESOLVED, That Article IV of
the Articles of Incorporation of this corporation be amended
to read in its entirety as follows:
"IV
The total number of shares authorized to be issued is
one million five hundred thousand shares of common stock
without par value. Such shares may be issued from time to
time for such consideration as the directors from time to time
determine.
"The presently issued and outstanding shares of the
corporation, to wit, nine hundred thousand shares without
nominal or par value, shall be combined pro rata in a reverse
stock split into four hundred fifty thousand shares of common
stock without par value, less the number of shares represented
by the aggregate of fractional share interests for which
payment is provided hereafter. The effect of this amendment
on all of the presently issued and outstanding shares of stock
of the corporation will be to combine each such outstanding
two shares of stock into one share of common stock without par
value, provided that the corporation shall not be obligated to
issue, and does not hereby issue or create, any fraction of a
share of such stock, and the corporation shall in lieu thereof
pay to the person who would otherwise be entitled to such
fraction the fair value thereof as determined by the Board of
Directors.
16
<PAGE> 17
"RESOLVED FURTHER, That the President of a
Vice-President and the Secretary or an Assistant
Secretary of the corporation be, and they hereby are
authorized and directed to procure the adoption and
approval of the foregoing amendment by the vote or
written consent of the Shareholders of this
corporation holding a majority of the voting power,
and after obtaining an appropriate permit of the
California Commissioner of Corporations, thereafter
to sign, execute, acknowledge and verify and to file
a certificate in the form and manner required by
Section 3672 of the California Corporations Code, and
in general to do any and all things necessary to
effectuate said amendment.
2. The number of shares of said corporation consenting to such
amendment of its Articles of Incorporation is 820,022 shares and the
shareholder holding said number of shares duly executed a written consent to
such amendment, a copy of which written consent executed by said shareholder is
as follows:
"WHEREAS, At a special meeting of the Board of
Directors of SPORTSWAYS, INC., a California corporation, duly
held on the 10th day of January, 1962, at which meeting a
quorum of members of said Board of Directors was at all times
present and acting, an amendment of the Articles of
Incorporation of said corporation was adopted and approved by
resolution of said Board of Directors amending Article IV of
the Articles of Incorporation to read in its entirety, as
follows:
"IV
The total number of shares authorized to be issued is
one million five hundred thousand shares of common stock,
without par value. Such shares may be issued from time to
time for such consideration as the directors from time to time
determine.
"The presently issued and outstanding shares of the
corporation, to wit, nine hundred thousand shares without
nominal or par value, shall be combined pro rata in a reverse
stock split into four hundred fifty thousand shares of common
stock without par value, less the number of shares represented
by the aggregate of fractional share interests for which
payment is provided hereafter. The effect of this amendment
on all of the presently issued and outstanding shares of stock
of the corporation will be to combine each such outstanding
two shares of stock into one share of common stock without par
value, provided that the corporation shall not be obligated to
issue, and does not hereby issue or create, any fraction of a
share of such stock, and the corporation shall in lieu thereof
pay to the person who would
17
<PAGE> 18
otherwise be entitled to such fraction the fair value thereof as
determined by the board of directors."
"NOW, THEREFORE, The undersigned, Shore-Calnevar,
Inc., a California corporation, as the shareholder of said
SPORTSWAYS, INC., a California corporation, does hereby adopt,
approve and consent to the foregoing amendment______ Articles
of Incorporation, and does hereby consent that Article IV of
said Articles of Incorporation be amended to read as
hereinabove set forth.
"IN WITNESS WHEREOF, The undersigned, Shore-Calnevar,
Inc., has signed and executed this written consent by
its President and its Secretary, thereunto duly
authorized, following its name, has stated the date
of signing and the number of shares of said
SPORTSWAYS, INC, held by it of record on said date,
entitled to vote upon amendments of said Articles of
Incorporation of the character of the foregoing
amendment.
Shore-Calnevar, Inc., January 10, 1962 No. of Shares
a California corporation 820,022
SHORE-CALNEVAR, INC.
By/s/ Fred Plotkin
-------------------------------
Fred Plotkin-President
By/s/ William S. Bartman
-------------------------------
William S. Barman-Secretary
3. The total number of shares of said corporation entitled to
vote or consent to the adoption of said amendment is 900,000 shares.
IN WITNESS WHEREOF, The undersigned have executed this Certificate of
Amendment this 10th day of January 1962.
/s/ Fred Plotkin
------------------------------------
FRED PLOTKIN, President,
Sportsways, Inc.
/s/ Sanford Kaplan
------------------------------------
SANFORD KAPLAN, Assistant Secretary,
Sportsways, Inc.
18
<PAGE> 19
[FILED STAMP]
Name chg to: Milton J. Wershow Enterprises
Certificate of Amendment: Change of Name
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
OF
SPORTSWAYS, INC.
______________________________________________ The Undersigned, Milton J.
Wershow and E.T. Hagerman, certify that they now are and at all times herein
mentioned have been the duly-elected and acting President and Secretary of
Sportsways, Inc., a California corporation and that:
I
At a special meeting of the shareholders of said corporation duly held
at 629 North La Brea, City and County of Los Angeles, State of California, for
the transaction of business, at 11:00 A.M., on the 20th day January, 1969, at
which meeting there was at all times present and acting a quorum of the
shareholders of the corporation, the following resolution was duly adopted:
"WHEREAS, it is deemed to be to the best interests of the corporation
and to the best interests of its shareholders that its Articles of
Incorporation be amended as hereinafter provided:
NOW, THEREFORE, be it resolved, that Article I of the Articles of
Incorporation of this corporation be amended to read as follows:
I: The name of this corporation is:
Milton J. Wershow Enterprises'
and
RESOLVED further, that said amendment of its Articles of Incorporation
is hereby adopted and approved."
II
At a special meeting of the Board of Directors of said corporation
duly held at 629 North La Brea, City and County of Los Angeles, State of
California, for the transaction of business at 12:00 P.M., on the 20th day of
January, 1969, at which meeting there was at all times present and acting a
quorum of the members of said Board, the resolution set forth in paragraph I
hereinabove, was duly adopted and approved.
III
The foregoing amendment was adopted and approved at said shareholders'
meeting by the total vote of 413,952 shares.
19
<PAGE> 20
IV
The total number of shares of said corporation entitled to vote on or
consent to the adoption of such amendment is 451,781 shares. IN
WITNESS WHEREOF, The undersigned have executed this Certificate of
Amendment this 21st day of January 1969.
/s/ Milton J. Wershow
---------------------------
MILTON J. WERSHOW,
President, Sportsways, Inc.
/s/ E.T. Hagerman
---------------------------
E.T. HAGERMAN, Secretary,
Sportsways, Inc.
20
<PAGE> 21
[FILED STAMP]
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
OF
MILTON J. WERSHOW ENTERPRISES
George Ross and Marlene White certify:
I
That they are the Vice President and Secretary, respectively of Milton
J. Wershow Enterprises, a California Corporation.
II
The By-Laws of the Corporation authorize the Directors to adopt
resolutions amending the Articles of Incorporation by unanimous written consent
without a meeting: Theretofore, by unanimous written consent without a
meeting, the Directors adopted a resolution amending the Articles as follows:
"RESOLVED, that Articles I of the
Articles of Incorporation of this Corporation be
amended to read as follows:
'The name of this Corporation shall be Jilco Industries,
Inc.'"
III
That the shareholders have adopted said amendment by resolution at a
meeting held at Los Angeles, California on June 30, 1972. That the wording of
the Amended Article, as set forth in the shareholders' resolution, is the same
as that set forth in the directors' resolution referred to in Paragraph II
above.
IV
That the number of shares which were voted affirmatively for the
adoption of said resolution is four hundred three thousand four hundred and
fifty-two (403,452) and the total number of shares entitled to vote on or
consent to said Amendment is four hundred fifty-one thousand seven hundred and
ninety-one (451,791).
/s/ George Ross
----------------------------------
GEORGE ROSS, VICE PRESIDENT
/s/ Marlene White
----------------------------------
MARLENE WHITE, SECRETARY
21
<PAGE> 22
Each of the undersigned under penalty of perjury that the matter set
forth in the foregoing Certificate are true and correct. Executed at Los
Angeles, California, on June 30, 1972.
/s/ George Ross
-------------------------------
GEORGE ROSS, VICE PRESIDENT
/s/ Marlene White
-------------------------------
MARLENE WHITE, SECRETARY
22
<PAGE> 1
EXHIBIT 3(2)
AMENDED
BY-LAWS OF
JILCO INDUSTRIES, INC.
A California corporation
ARTICLE I
PLACE OF BUSINESS
Section 1.
The principal office of the corporation shall be in the County
of Los Angeles, State of California.
Section 2.
The Corporation may also have offices at such other places
both within and without the State of California as the Board of Directors may
from time to time determine or the business of the Corporation may require.
ARTICLE II
Section 1. PLACE.
All meetings of shareholders shall be held at the principal
offices of the Corporation in the City of Los Angeles, State of California, or
at any other place within or without the State of California which may be
designated by the Board of Directors; provided, however, that the place of
meeting shall be specified in the notice calling the meeting, and that no
change in the place of meeting shall be made within ten (10) days next before
the day on which an election of Directors is to be held.
Section 2. ANNUAL.
The annual meeting of the shareholders shall be held on a date
and at a time selected by the Board of Directors at which time the shareholders
shall elect by majority vote a Board of Directors, consider reports of the
affairs of the Corporation, and transact such other business as may properly be
brought before the meeting.
Section 3. SPECIAL.
Special meetings of the shareholders, for any purpose or
purposes whatsoever may be called at any time by the Board of Directors, the
President or by one or more shareholders holding not less than one-fifth (15)
of the voting power of the corporation.
Section 4. NOTICE OF MEETINGS: WAIVER.
Each shareholder of record entitled to vote at the meeting
shall be given in
23
<PAGE> 2
person, or by mail, or by prepaid telegram, written or printed notice of the
purpose or purposes and the time and place within or without the State of
California of every meeting of shareholders. Such notice shall be delivered
not less than ten (10) days nor more than fifty (50) days before the meeting.
It mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the shareholder at his address as it appears on the
records of the corporation unless the shareholder shall have requested of the
Secretary, in writing, that notice intended for him be mailed to some other
address, in which case the notice shall be transmitted to the address so
designated. No publication of the notice of meeting shall be required. A
shareholder may waive the notice of meeting by attendance, either in person or
by proxy, at the meeting, or by so stating in writing, either before or after
such meeting. Attendance at a meeting for the express purpose of objecting
that the meeting was not lawfully called or convened shall not, however,
constitute a waiver of notice. Except where otherwise required by law, notice
need not be given of any adjourned meeting of the shareholders.
Section 5. AFFIDAVIT OF NOTICE.
Whenever any shareholder entitled to vote has been absent from
any meeting of shareholders whether annual or special, an affidavit of the
secretary or an assistant secretary or the transfer agent of the corporation to
the effect that notice has been duly given shall in the absence of fraud be
prima facie evidence that due notice of such meeting was given to such
shareholder, as required by law and the By-Laws of the corporation.
Section 6. CONSENT TO SHAREHOLDER'S MEETINGS.
The transactions of any meeting of shareholders, however
called and noticed, shall be valid as though had at a meeting held after
regular call and notice, if a quorum be present either in person or by proxy,
and if, either before or after the meeting, each of the shareholders entitled
to vote, not present in person or by proxy, signs a written waiver of notice,
or a consent to the holding of such meeting, or an approval of the minutes
thereof. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
Any action which may be taken at a meeting of the shareholders
may be taken without a meeting, if authorized by a writing signed by all of the
holders of shares who would be entitled to vote at a meeting for such purposes,
and filed with the Secretary of the Corporation.
Section 7. QUORUM.
The holders of a majority of the shares entitled to vote at a
meeting of shareholders who are present in person, or represented by proxy,
shall constitute a quorum at all meetings of the shareholders for the
transaction of business except as otherwise provided by law. If, however, such
percentage shall not be present or represented at any meeting of the
shareholders, the shareholders entitled to vote thereat, present in person, or
by proxy, shall have the power to adjourn the meeting from time to time, until
the requisite amount of voting shares shall be present. at such adjourned
meeting at which the requisite amount of voting shares shall be represented,
any business may be transacted which might have been
24
<PAGE> 3
transacted at the meeting as originally notified. If a quorum is present, the
affirmative vote of the majority of the shares represented at the meeting and
entitled to vote on the subject matter and entitled to vote shall be the act of
the shareholders, unless the vote of a greater number is specified herein or is
required by law.
Section 8. CLOSING OF TRANSFER BOOKS: RECORD DATE.
(a) In order to determine the holders of record of the
corporation's stock who are entitled to notice of meetings, to vote at a
meeting or adjournment thereof, or to make a determination of the shareholders
of record for any other proper purpose, the Board of Directors of the
corporation may order that the Stock Transfer Books be closed for a period not
to exceed fifty (50) days prior to the meeting.
(b) In lieu of closing the Stock Transfer Books, the
Board of Directors may fix a date as the record date for such determination of
shareholders. Such date shall not be more than fifty (50) nor less than ten
(10) days prior to the date of the action which requires such determination.
(c) If the Stock Transfer Books are not closed and no
record date is fixed for a determination of the shareholders of record entitled
to notice or to vote at a meeting of shareholders the day next preceding the
day on which notice of the meeting is mailed, or for any other purpose the day
on which resolution of the Board of Directors relating thereto is adopted, as
the case may be, shall be the record date for such determination of
shareholders.
(d) When a determination of shareholders entitled to vote
at any meeting has been made as provided in this Section, such determination
shall apply to any adjournment of such meeting; provided however, that the
Board of Directors may fix a new record date for the adjourned meeting.
Section 9. VOTING LIST.
(a) A complete list of the shareholders of the
corporation entitled to vote at the ensuing meeting, arranged in alphabetical
order, and showing the address of, and number of shares owned by each
shareholder, shall be prepared by the Secretary or other officer or the
Transfer Agent of the corporation having charge of the Stock Transfer Books.
This list shall be kept on file for a period of at least ten (10) days prior to
the meeting at the principal office of the corporation, and shall he subject to
inspection during the ordinary business hours for any purpose germane to the
meeting by any shareholder. 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.
(b) The original Stock Transfer Books shall be prima
facie evidence as to who are the shareholders entitled to examine such list or
to vote at any meeting of the shareholders.
25
<PAGE> 4
(c) Failure to comply with the requirements of this
Section shall not affect the validity of any action taken at such meeting of
the shareholders.
Section 10. PROXIES.
Every person entitled to vote or execute consents may do so
either in person or by one or more agents authorized by a written proxy
executed by the person or his duly authorized agent and filed with the
Secretary of the corporation, but no proxy shall be valid or acted upon after
eleven (11) months from its date, unless the proxy provides for a longer period
which in no case shall exceed seven (7) years from the date of its execution.
Section 11. PRESIDING OFFICER: ORDER OF BUSINESS: CONDUCT OF MEETING.
(a) Meetings of the shareholders shall be presided over
by such person as shall be designated by the Board of Directors or if no
designation is made, then by the President.
The Secretary of the corporation, or in his absence an
Assistant Secretary, shall act as secretary of the meeting.
The President of the corporation shall serve as Chairman of
the Board unless another person is specifically elected to that position by the
directors.
(b) Subject to the following, meetings of shareholders
shall generally follow accepted rules of parliamentary procedure.
1. The chairman of the meeting shall have
absolute authority over matters of procedure and there shall
be no appeal from the ruling of the Chairman. If the
Chairman, in his absolute discretion, deems it advisable to
dispense with the rules of parliamentary procedure as to any
one meeting of shareholders or a part thereof, the chairman
shall so state and shall clearly state the rules under which
the meeting or appropriate part thereof shall be conducted.
2. If disorder shall arise which prevents
continuation of the legitimate business of the meeting, the
chairman may quit the chair and announce the adjournment of
the meeting; and upon his so doing the meeting is immediately
adjourned.
3. The chairman may ask or require that anyone
not a bona fide shareholder or proxy holder leave the meeting.
4. A resolution or motion shall be only
considered for a vote if proposed by a shareholder or duly
authorized proxy holder, and seconded by an individual who is
a shareholder or a duly authorized proxy holder, other
26
<PAGE> 5
than the individual who proposed the resolution or motion.
ARTICLE III
DIRECTORS -- MANAGEMENT
Section 1. POWERS.
Subject to the limitations in the Articles of Incorporation, of the
By-Laws and of the laws of the State of California as to actions to be
authorized or approved by the shareholders, all corporate powers shall be
exercised by or under authority of, and the business and affairs of this
corporation shall be controlled by a Board of Directors.
Section 2. NUMBER OF DIRECTORS AND QUALIFICATIONS.
The authorized number of directors of the corporation shall be
three (3).
Section 3. ELECTION AND TENURE OF OFFICE.
Each director shall be elected by ballot at the annual meeting
of shareholders or at any special meeting called for that purpose to serve
until the next annual meeting of shareholders and until his successor is
elected and has qualified, or until his earlier resignation or removal. His
term of office shall begin immediately after election.
Section 4. REMOVAL OF DIRECTORS.
A director may only be removed from office before the
expiration of his term by a majority vote of the shareholders entitled to vote
at an election of directors as provided in Section 810 of the California
Corporations Code.
Section 5. VACANCIES.
Any vacancy occurring in the Board of Directors may directors
though less than a quorum of the Board of Directors. 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 the affirmative vote a majority of the
directors then in office or by an election at an annual meeting or at a special
meeting of shareholders called for that purpose. A director chosen to fill a
position resulting from an increase in the number of directors shall hold
office until the next annual meeting of shareholders and until his successor
shall have been elected and qualified.
Section 6. PLACE OF MEETINGS.
Meetings of the Board of Directors shall be held at any place
within or without the State of California, as designated for this purpose, from
time to time, by resolution of the Board of Directors or written consent of all
the members of the Board.
Section 7. REGULAR MEETINGS.
Regular meetings of the Board of Directors shall not be held.
In lieu of
27
<PAGE> 6
regular meetings, special meetings of the Board may be held as provided in
Section 8 of this ARTICLE III.
Section 8. SPECIAL MEETINGS AND NOTICE THEREOF.
Special meetings of the Board of Directors for any purpose or
purposes may be called at any time by the Chairman of the Board, the President,
or if they are absent or unable or refuses to act, by any Vice President or by
any two (2) directors.
Written notice of the time and place of special meetings shall
be delivered personally to the directors or sent to each director by letter or
by telegram, charges prepaid, addressed to him at his address as it is shown
upon the records of the corporation, or if it is not so shown on such records
or is not readily ascertainable, at the place in which the meetings of the
directors are regularly held. In case such notice is mailed or telegraphed, it
shall be deposited in the mail or delivered to the telegraph company at least
forty-eight (48) hours prior to the time of the holding of the meeting. In
case such notice is personally delivered as above provided, it shall be so
delivered at least twenty-four (24) hours prior to the time of the holding of
such meeting. Such mailing, telegraphing or delivery as above provided shall
be due, legal and personal notice to such director.
Section 9. WAIVER OF NOTICE.
When all the directors are present at any director's meeting,
however called or noticed, and sign a written consent thereto, or if a majority
of the directors are present, and if those not present sign in writing a waiver
of notice of such meeting, whether prior to or after the holding of such
meeting, which said waiver shall be filed with the Secretary of the
corporation, the transactions thereat are as valid as if had at a meeting
regularly called and noticed.
Section 10. NOTICE OF ADJOURNMENT.
Notice of the time and place of holding an adjourned meeting
need not he given to absent directors if the time and place be fixed at the
meeting adjourned.
Section 11. QUORUM.
A majority of the number of directors as fixed by the By-Laws
shall be necessary to constitute a quorum for the transaction of business, and
the action of a majority of the directors present at any meeting at which there
is a quorum when duly assembled, is valid as a corporate act; provided that a
minority of the directors, in the absence of a quorum, may adjourn the meeting
from time to time, but may not transact any business.
Section 12. DIRECTORS ACTING WITHOUT A MEETING.
Any action required or permitted to be taken by the Board of
Directors under any provision of these By-Laws or by any statute or regulation
may be taken without a meeting, if all members of the Board shall individually
or collectively consent in writing to such action. Such written consent or
consents shall be filed with the minutes of the proceedings of the Board. Such
action by written consent shall have the same force and
28
<PAGE> 7
effect as a unanimous vote of such directors. Any certificate or other
document filed under any provision of this Article which relates to action so
taken shall state that the action was taken by unanimous written consent of the
Board of Directors without a meeting, and that the By-Laws authorize the
directors to so act, and such statement shall be prima facie evidence of such
authority.
Section 13. INDEMNIFICATION.
The corporation shall indemnify each of its directors and
officers, whether or not then in office (and his executor, administrator and
heirs), to the extent permitted by Section 830 of the California Corporations
Code or any amendment thereto, against all reasonable expenses actually and
necessarily incurred by him in connection with the defense of any litigation to
which he may have been made a party because he is or was a director or officer
of the corporation. He shall have no right to reimbursement, however in
relation to matters to which he has been adjudged liable to the corporation for
gross negligence or culpable misconduct in the performance of his duties. The
right to be indemnified for expenses shall also apply to the expenses of suits
which are compromised if the court having jurisdiction of the matter shall
approve such settlement.
Section 14. COMPENSATION.
Directors and members of any committee of the Board of
Directors shall be entitled to such reasonable compensation for their services
as directors and members of any such committee as shall be fixed from time to
time by resolution of the Board of Directors and shall also be entitled to
reimbursement for any reasonable expenses incurred in attending such meetings.
The compensation of directors may be on such basis as is determined by the
resolution of the Board of Directors. Any director receiving compensation
under these provisions shall not be barred from serving the corporation in any
other ,capacity and receiving reasonable compensation for such other services.
Section 15. COMMITTEES.
The Board of Directors, by a resolution or resolutions adopted
by a majority of the members of the whole Board, may appoint an Executive
Committee and such other committees as it may deem appropriate. Each such
committee shall consist of two or more members of the Board of Directors. Any
such committee shall have and may exercise all the powers and authority of the
Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it, but no such committee shall have the power or
authority in reference to amending the Articles of Incorporation or By-Laws,
declaring dividends, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets or recommending to
the stockholders a dissolution of the corporation. A majority of any such
committee may determine its action and may fix the time and place of its
meetings unless provided otherwise by the Board Os Directors. The Board of
Directors shall have the power at any time to fill vacancies in, to change the
size or membership of and to discharge any such committee. No member of any
committee shall continue to be a member of it after he ceases to be a director
of the corporation.
29
<PAGE> 8
Each such committee shall keep a written record of its acts
and proceedings and shall submit such record to the Board of Directors at each
regular meeting thereof, and at such other times as requested by the Board of
Directors. Failure to submit such record, or failure of the Board to approve
any action indicated herein, will not, however, invalidate such action to the
extent it has been carried out by the corporation prior to the time the record
of such action was, or should have been submitted to the Board of Directors as
herein provided.
ARTICLE IV
OFFICERS
Section 1. NUMBER.
The officers of the corPoration shall be a Chairman of the
Board, a President, one or more Executive, Senior, Group or general Vice
Presidents, a Treasurer or Controller, and a Secretary. Any person may hold
two or more offices except that no person shall hold the offices of President
and Secretary simultaneously.
Section 2. ELECTION: TERM OF OFFICE.
The principal officers of the corporation shall he chosen
annually by at least a majority vote of the directors of the corporation at the
first meeting of the Board held after the annual meeting of shareholders, or as
soon thereafter as is conveniently possible. No one of said officers, except
the Chairman of the Board, and President, need be directors. Each officer shall
serve until his successor shall have been chosen and qualified, or until his
death, resignation or removal.
Section 3. SUBORDINATE OFFICERS, ETC.
The Board of Directors may appoint such other officers as the
business of the corporation may require, each of whom shall hold office for
such period, have such authority and perform such duties as are provided in the
By-Laws or as the Board of Directors may from time to time determine.
Section 4. RESIGNATION AND REMOVAL.
Any officer may be removed, either with or without cause, at
any time, by at least a majority vote of the directors then in office whenever
in such directors' judgment the hoised interests of the corporation will be
served by so doing.
Any officer may resign at any time by giving written notice to
the Board of Directors or to the President, or to the Secretary of the
corPoration. Any such resignation shall take effect at the date of the receipt
of such notice or at any later time specified therein; and unless otherwise
specified therein the acceptance of such resignation shall not be necessary to
make it effective.
Section 5. VACANCIES.
The Board of Directors shall have the power to fill any
vacancies in any office
30
<PAGE> 9
occurring for any reason.
Section 6. CHAIRMAN OF THE BOARD.
The Chairman of the Board, if there shall be such an officer,
shall, if present, preside at all meetings of the Board of Directors and
exercise and perform such other powers and duties as may be from time to time
assigned to him or her by the Board of Directors or prescribed by the By-Laws.
Section 7. PRESIDENT.
Subject to the control of the Board of Directors, the
President shall be responsible for the general supervision and direction of the
business and affairs of the corporation. He shall:
(a) Preside at all meetings of the shareholders, and in the
absence of the Chairman of the Board, at all meetings of the Board of
Directors;
(b) Have the general powers and duties of management usually
vested in the office of President of a corporation;
(c) Shall sign or countersign all certificates of shares; and
(d) Have such other powers and duties as may be prescribed by the
Board of Directors or the By-Laws.
Section 8. VICE PRESIDENTS.
In the absence or disability of the President the Vice
Presidents, in order of their rank as fixed by the Board of Directors, or if
not ranked the Vice President designated by the Board of Directors shall
perform all the duties of the President, and when so acting shall have all the
powers of and be subject to all the restrictions upon, the President. The Vice
Presidents shall have such other powers and perform such other duties as from
time to time may be prescribed for them by the Board of Directors or the
By-Laws.
Section 9. SECRETARY.
The Secretary shall:
(a) Keep, or cause to be kept, a book of minutes at the
principal office or such other place as the Board of Directors may order, of
all meetings of directors and shareholders, with the time and place of holding,
whether regular or special, and if special, how authorized, the notice thereof
given, the names of those directors and shareholders present, the names of
those present at the directors' meeting, the number of shares present
or-represented at shareholders' meetings and the proceedings thereof;
(b) Keep, or cause to be kept, at the principal office or
at the office of the corporation's Transfer Agent (s) or Registrar (s), a share
register or a duplicate share register showing the names of the shareholders
and their addresses; the number and classes of shares
31
<PAGE> 10
held by each; the number and date of certificates issued for the same; the
number and date of cancellation of every certificate surrendered for
cancellation;
(c) Give, or cause to be given, notice of all meetings of
shareholders and the Board of Directors, as required by the By-Laws to be
given; and
(d) Keep the seal of the corporation in safe custody, and
shall have such other powers and perform such other duties as may be prescribed
by the Board of Directors or the By-Laws.
Section 10. ASSISTANT SECRETARIES.
Each Assistant Secretary (if one or more Assistant Secretaries
be elected or appointed) shall assist the Secretary in his duties, and shall
perform such other duties as the Board of Directors, Executive Committee (if
any), President or Secretary may from time to time assign to him. At the
request of the Secretary any Assistant Secretary may, in the case of the
absence or inability to act of the Secretary, temporarily act in his place. In
the case of the death of the Secretary or in the case of his absence or
inability to act temporarily, the Assistant Secretary shall perform such duties
of the Secretary as shall be designated by the President or any Vice President.
Section 11. TREASURER.
The Treasurer shall:
(a) Keep and maintain, or cause to kept and maintained,
adequate and correct accounts of the properties and business transactions of
the corporation, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, surplus and surplus shares. Any
surplus, including earned surplus, paid-in surplus and surplus arising from a
reduction of stated capital shall be classified according to source and shown
in a separate account. The books of account shall at all times be open for
inspection by any director;
(b) Deposit all monies and other valuables in the names
and to the credit of the corporation with such depositories as may be
designated by the Board of Directors;
(c) Disburse the funds of the corporation as ordered by
the Board of Directors;
(d) Render to the President and directors, when they
request it, an account of all of his or her transactions as treasurer and of
the financial condition of the corporation; and
(e) Have such other powers and perform such other duties
as may be prescribed by the Board of Directors or the By-Laws.
32
<PAGE> 11
Section 12. SALARIES.
The salaries for the principal officers of the corporation
shall be fixed, from time to time, by the Board of Directors. No officer shall
be disqualified from receiving a salary by reason of his also being a director
of the corporation.
ARTICLE V
RECORDS--REPORTS--INSPECTION
Section 1. RECORDS.
The corporation shall maintain adequate and correct accounts,
books, and records of its business and properties. All of such books, records
and accounts shall be kept at its principal place of business as fixed by the
Board of Directors from time to time.
Section 2. INSPECTION.
The share register or duplicate share register, the books of
account and minutes of proceedings of the shareholders and directors shall be
open to inspection upon the written demand of any shareholder, stockholder or
the holder of a voting trust certificate, at any reasonable time, and for a
purpose reasonably related to his or her interests as a shareholder. Such
inspection may include the right to make extracts. Demand for inspection other
than at a shareholders' meeting shall be made in writing upon the President or
Secretary of the corporation.
Section 3. CHECKS AND DRAFTS.
All checks, drafts or other orders for payment of money, notes
or other evidences of indebtedness issued in the name of or payable to the
corporation shall be signed or endorsed by such person or persons and in such
manner as, from time to time, shall be determined by resolution or resolutions
adopted by a vote of at least two thirds of the directors of the corporation.
Section 4. LOANS.
No loans shall be contracted on behalf of the corporation and
no evidences of indebtedness shall be issued in its name unless authorized by a
resolution adopted by a vote of at least a majority of the directors of the
corporation. Provided, however, that no loan may be made to a director or
officer except as permitted by Section 823 of the California Corporations Code
or any amendment thereof. Such authority may be general or confirmed to
specific instances.
Section 5. DEPOSITS.
The Board of Directors or the President or a Vice President,
when authorized by the Board of Directors, shall select banks, trust companies
or other depositories in which all funds of the corporation not otherwise
employed shall, from time to time, be deposited to the credit of the
corporation.
33
<PAGE> 12
Section 6. VOTING SECURITIES HELD BY THE CORPORATION.
Unless otherwise ordered by the Board of Directors, the
Chairman of the Board or the President shall have full power and authority on
behalf of the corporation to attend and to act and to vote at any meeting of
security holders of other corporations in which the corporation may hold
securities. The Board of Directors may, from time to time, confer like powers
upon any other person or persons.
Section 7. CONTRACTS.
The Board of Directors, except as the By-Laws or Articles of
Incorporation otherwise specifically provide, may, by a majority vote of the
directors of the corporation, authorize any officer or officers, agent or
agents, to enter into any contract or execute any instrument in the name of and
on behalf of the corporation, and such authority may be general or confined in
specific instances; unless so authorized by the Board of Directors, no officer,
agent or employee shall have any power or authority to bind the corporation by
and contract or agreement or to pledge its credit to render it liable for any
purpose or for any amount.
Section 8. INSPECTION OF BY-LAWS.
The corporation shall keep in its principal office for the
transaction of business the original or a copy of the By-Laws as amended or
otherwise altered to date, certified by the Secretary, which shall be open to
inspection by the shareholders at all times during business hours.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. CERTIFICATES OF STOCK.
Certificates representing shares of the corporation shall be
in such form as may be determined by the Board of Directors. Every shareholder
shall be entitled to have a certificate signed by or in the name of the
corporation by the President or a Vice President, and the Secretary or an
Assistance Secretary of such corporation, certifying to the number of shares
owned by him in such corporation. If such certificate is countersigned (a) by
a transfer agent other than the corporation or its employee, or (b) by a
registrar other than the corporation or its employee, or the signatures of the
officers of the corporation may be facsimiles. In case any officer who has
signed or whose facsimile signature has been placed upon a certificate has
ceased to be such officer before the certificate is issued, it may be issued by
the corporation with the same effect as if he were such officer at the date of
issuance.
All certificates for shares of each class or series within a
class shall be consecutively numbered. The name of the person owning the
shares represented thereby with the number of shares and the date of issue
shall be entitled on the books of the corporation. All certificates
surrendered to the corporation for transfer shall be cancelled and no new
certificate shall be issued until the former certificate for a like number of
shares
34
<PAGE> 13
shall have been surrendered and cancelled.
Section 2. TRANSFER.
(a) Upon surrender to the Secretary or 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.
(b) A person in whose name shares of stock stand on the
books of the corporation shall be deemed the owner thereof as regards the
corporation; provided that whenever any transfer of shares shall be made for
collateral security, and not absolutely, and written notice thereof shall be
given to the Secretary of the corporation or its transfer agent, if any, such
fact shall be stated in the entry of the transfer.
(c) When a transfer of shares is requested and there is
reasonable doubt as to the right of the person seeking the transfer, the
corporation or its transfer agent, before recording the transfer of the shares
on its books or issuing any certificate therefor, may require from the person
seeking the transfer reasonable proof of his right to the shares. If there
remains a reasonable doubt of the right to the shares, the corporation may
refuse a transfer unless the person gives adequate security or a bond of
indemnity executed by a corporate surety or by two individual sureties
satisfactory to the corporation as to form, amount and responsibility of the
sureties. The bond shall be conditioned to protect the corporation, its
officers, transfer agents and registrars or any of them, against loss, damage,
expense or other liability to the owner of the shares by reason of the
recordation of the transfer, and the issuance of a new certificate for shares.
Section 3. LOST OR DESTROYED CERTIFICATES.
(a) Where the holder of a share certificate claims that
the certificate has been lost, destroyed or wrongfully taken, the corporation
shall issue a new certificate in place of the original certificate if the owner
so requests before the corporation has notice that the share has been acquired
by a bona fide purchaser; and provided that the owner files with the
corporation a sufficient indemnity bond; and satisfies any other reasonable
requirements imposed by the Board of Directors.
(b) Where a share certificate has been lost, apparently
destroyed or wrongfully taken and the owner fails to notify the corporation of
that fact within a reasonable time after he has notice of it, and the
corporation registers a transfer of the share represented by the security
before receiving such notification, the owner is precluded from asserting
against';the corporation any claim for registering the transfer or any claim to
a new security.
(c) If, after the issue a new security as a replacement
for a lost, destroyed or wrongfully taken certificate, a bona fide purchaser of
the original certificate Presents it for
35
<PAGE> 14
registration of transfer, the corporation must register the transfer unless
registration would result in overissue. In addition to any rights on the
indemnity bond, the corporation may recover the new security from the person to
whom it was issued or any person taking under him except a bona fide purchaser.
Section 4. TRANSFER AGENTS AND REGISTRARS.
The Board of Directors may appoint one or more transfer agents
or transfer clerks, and one or more registrars which shall be an incorporated
bank or trust company, either domestic or foreign, who shall be appointed at
such times and places as the requirements of the corporation may necessitate
and the Board of Directors may designate.
ARTICLE VII
DIVIDENDS
The Board of Directors, by a majority vote of its members,
may, from time to time, declare and the corporation shall pay, dividends on its
outstanding shares in the manner and on the terms and conditions provided by
the laws of the State of California.
ARTICLE VIII
WAIVER OF NOTICE
Whenever any notice whatever is required to be given under the
provisions of these By-Laws or under the provisions of the Articles of
Incorporation or under the provisions of the Colorado Corporation Act then a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE IX
AMENDMENTS
Section 1. POWER OF SHAREHOLDERS.
These By-Laws may be repealEd or amended, or new By-Laws may
be adopted at an annual meeting, or at any other meeting of the shareholders,
called for the purpose by the Board of Directors, by a vote representing a
majority of the shares of common stock entitled to vote, or by the written
consent of such shareholders.
Section 2. POWER OF DIRECTORS.
Subject to the right of shareholders, as provided in Section 1
of this ARTICLE IX, to adopt, amend or repeal the By-Laws, By-Laws other than a
By-Law or amendment thereof changing the authorized number of directors, may be
adopted, amended or repealed by a majority vote of the Board of Directors.
36
<PAGE> 15
Section 3. RECORD OF AMENDMENTS.
Whenever an amendment or new By-Law is adopted, it shall be
copied in the Minute Book with the original By-Laws, in the appropriate place.
If any By-Law is repealed, the fact of repeal with the date of the meeting at
which the repeal was enacted or written assent was filed shall be stated in
said Book.
ARTICLE X
SEAL
The corporation shall adopt and use a corporate seal
consisting of a circle setting forth on its circumference the name of the
corporation and showing the state of incorporation.
ARTICLE XI
FISCAL YEAR
The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
37
<PAGE> 16
I, Marlene White, hereby certify that I am the duly elected, qualified
and acting Secretary of JILCO INDUSTRIES, INC., a California corporation; and
that the foregoing Amended By-Laws of JILCO INDUSTRIES, INC. were duly and
regularly adopted as the By-Laws of said corporation on October 16, 1972.
IN WITNESS WHEREOF, I have hereunto set my And this 16th day of
October, 1972.
/s/ Marlene White
-----------------------------------
Marlene White
38
<PAGE> 1
EXHIBIT 10(1)
REVOLVING DEMAND NOTE
("Note")
$40, 000.00 December 18, 1987
Beverly Hills, California
On demand, or if no demand is made then on December 18, 1989
("Maturity Date" herein), for value received, the undersigned ("Maker" or
"Payor" herein) promise(s) to pay to the order of LEONARD M. ROSS, a California
resident ("Holder" or "Payee" herein), at Beverly Hills, California, or at such
other address as is designated by Holder, the sum of FORTY THOUSAND DOLLARS
($40,000.00), or so much thereof as may be outstanding hereunder, together with
interest thereon from and after the date hereof on the unpaid principal at the
rate of NINE PER CENT (9%) per year (computed on the basis of a 360-day year
for the actual number of days elapsed from the date set forth until paid).
Interest shall be payable on or before the Maturity Date. Principal and
interest shall be payable only in lawful money of the United States of America.
All or any portion of the principal of this Note may be borrowed,
repaid and reborrowed from time to time prior to the Maturity Date, provided
that at the time of any borrowing no default exists, and provided further that
the total borrowings outstanding hereunder at any one time shall not exceed $.
Each borrowing and repayment hereunder will be endorsed on the reverse of this
Note. The excess of borrowings over repayments shall evidence the principal
balance due hereon from time to time and at any time. Any loan hereunder shall
be conclusively presumed to have been made to or for the benefit of the
undersigned when made in accordance with such request.
Each of the following events shall constitute an "Event of Default"
(collectively "Events of Default") under this Note:
(1) The failure of the undersigned to pay any installment
of principal or interest on this Note when the same becomes due and payable.
(2) The undersigned shall make an assignment for the
benefit of creditors.
(3) The undersigned shall petition or apply to any
tribunal for appointment of a trustee or receiver of the undersigned or
commence any proceeding relating to the undersigned under any bankruptcy or
reorganization statute or any provision of the Bankruptcy Act, or under any
arrangement, insolvency, readjustment or debt, dissolution or liquidation law
of any jurisdiction, whether now or hereafter in effect.
(4) Any petition or application of the type described
above is filed or any proceedings of the type described in subparagraph (3),
above, are commenced against the undersigned, and the undersigned by any act
indicates its approval thereof, consent thereto or
1
<PAGE> 2
acquiescence therein, or an order is entered appointing any such trustee or
receiver, or adjudicating the undersigned bankrupt or insolvent, or approving
the petition in any such proceeding, and any such order remains in effect for
more than sixty (60) days.
Should any Event, of Default occur, the Payee of this Note may, if
such Event of Default is not cured within five (5) days after receipt by Payor
of written notice from Payee of such Event of Default (which receipt shall be
deemed to have occurred THREE (3) DAYS after deposit of said written notice in
the United States mail, certified, return receipt requested, postage and fees
prepaid, addressed to Payor at the address set forth below), declare the whole
sum of principal and interest to be, and thereafter the whole sum of principal
and interest shall forthwith become, due and payable. Should principal or
interest not be paid on the agreed or accelerated date of maturity, then the
interest rate provided for under this Note shall, without notice, be increased
to an amount TWO PER CENT (28) per year over and above the rate originally
contracted for, effective from the day following the date that such payment of
principal or interest became overdue, with such unpaid interest compounded; but
in no event shall the interest payable hereunder exceed the maximum rate
permitted by law. Such increased rate of interest shall continue until such
overdue payment of principal and interest shall be been paid in full. The
failure to exercise, in case of one or more Events of Default, any right or
remedy given in this paragraph shall not preclude the Payee of this Note from
exercising any right or remedy given in this paragraph in case of one or more
subsequent Events of Default.
All or any portion of principal or interest, or both, of this Note may
be prepaid, in whole or in part, at any time or from time to time, without
penalty or premium.
In the event this Note is not paid on the agreed or accelerated date
of maturity according to its terms, Maker promise(s) to pay all costs of
collect-ion of this Note and reasonable attorneys' fees in connection
therewith, whether or not suit is filed hereon. The makers and endorsers of
this Note hereby waive diligence, demand, presentment, protest and notice of
any kind. If this Note is executed by two or more makers, the obligations and
liability of the undersigned shall be joint and several.
This Note shall be binding upon Maker and the heirs, successors and assigns of
Maker, and shall inure to the benefit of Holder, its heirs, successors and
assigns.
Address: JILCO INDUSTRIES, INC.
P. O. Box 10539
Beverly Hills, CA 90213
By /s/ Byron Wayne
---------------------------
Byron Wayne, President
"Payor/Maker"
[Revolving Demand Note to JILCO INDUSTRIES, INC. December 18, 1987 in the
original principal amount of $40,000.00.]
2
<PAGE> 1
EXHIBIT 10(2)
NOTE EXTENSION AND MODIFICATION AGREEMENT
THIS NOTE EXTENSION AND MODIFICATION AGREEMENT ("Agreement" herein) is
entered into by and between JILCO INDUSTRIES, INC., a California corporation
("Payor" herein) and LEONARD M. ROSS, a California resident, ("Payee" herein).
Payor and Payee do hereby mutually acknowledge and agree that Payor is
presently liable for the indebtedness represented by a certain promissory note
payable to Payee in the original principal amount of FIVE THOUSAND DOLLARS
($5000.00) ("Note" herein), which has a present outstanding balance as of the
date hereof of FIVE THOUSAND DOLLARS ($5,000.00) plus accrued interest.
NOW, THEREFORE, FOR VALUABLE CONSIDERATION IN HAND RECEIVED, the
parties hereto, and each of them, do hereby agree that effective as of the date
hereof, the unpaid principal portion of the Note and all unpaid accrued
interest, if any, shall be all due and payable on December 31, 1989.
Nothing contained herein shall be deemed to affect the obligation of
Payor regarding the payment of interest accrued on the Note through the date
hereof, or to affect any obligations of Payor under the Note, except as set
forth herein.
IN WITNESS WHEREOF, the parties hereto, and each of them, have
executed this Agreement as of the 13th day of July, 1988.
JILCO INDUSTRIES, INC.
a California corporation
By/s/ Byron Wayne
--------------------------
Byron Wayne, President
"Payor"
/s/ Leonard M. Ross
----------------------------
Leonard M. Ross
"Payee"
1
<PAGE> 1
EXHIBIT 10(3)
PROMISSORY NOTE EXTENSION AGREEMENT
THIS PROMISSORY NOTE EXTENSION AGREEMENT ("Agreement")
dated as of the 8th day of August, 1986, is by and between
LEONARD M. ROSS, a California resident ("Ross") and JILCO INDUSTRIES, INC., a
California corporation ("Jilco").
R E C I T A L S
A. On August 9, 1972, Jilco executed a certain Promissory Note
("Note") in the principal amount of FIVE THOUSAND DOLLARS ($5,000.00) in favor
of Ross, a copy of which Note, as previously modified, is attached hereto as
Exhibit "A" and incorporated herein by reference.
B. The parties hereto desire to extend the due date of such Note
and the indebtedness which it represents.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Recitals set forth above are incorporated herein by
reference.
2. Ross and Jilco hereby agree that the indebtedness represented
by the Note, as previously modified, shall be due on demand, but if no demand
is made, then on August 9, 1988.
3. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
"Ross":
October 15, 1986 /s/ Leonard M. Ross
---------------------------
LEONARD M. ROSS
"Jilco": JILCO INDUSTRIES, INC.
October 15, 1966 By/s/ Gary W. Pickett
---------------------------
Gary W. Pickett
President
1
<PAGE> 2
P R O M I S S O R Y N O T E
$5,000.00 August 9, 1972
For value received, the undersigned promises to pay on demand, but if
no demand is made then one year after date, to the order of Leonard M. Ross the
principal sum of --Five Thousand--- Dollars, together with interest from date
hereof at the rate of 7 Per Cent per annum. Interest shall be payable at the
same time as principal. Upon default, the whole sum of principal and interest
shall become due immediately at the option of the holder hereof. Default shall
include, but not be limited to, the filing, as to the undersigned of a
voluntary or involuntary petition under the provisions of the Federal
Bankruptcy Act, or the issuance of any attachment or execution against any
asset of the undersigned.
If this note is not paid when due, the undersigned promises to pay, in
addition to the principal and accrued interest, all cost and expenses of
collection and reasonable attorney's fees incurred by the holder hereof on
account of such collection, whether or not suit is filed thereon. The
undersigned hereby waives demand and protest and the right to assert any
statute of limitations.
The undersigned shall have the right to prepay all or a portion of the
principal and/or interest at any time without penalty.
IN WITNESS WHEREOF, the undersigned has duly executed this Note on the
date set forth above.
JILCO INDUSTRIES, INC.
By /s/ GEORGE ROSS
-----------------------------------
George Ross, Vice President
3
