UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the Fiscal Year ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the Transition Period from ____________ to
____________
Commission File Number 033-03275-D
------------
iSHOPPER.COM, INC.
----------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Nevada 87-0431533
- ------------------------------- ----------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
8722 South 300 West, Suite 106
Sandy, UT 84070
- --------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(801) 984-9300
--------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, $.001
par value
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__X__ No ______
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]
The registrant's revenues for its most recent fiscal year were
$3,924,869.
The aggregate market value of the voting and non-voting common stock
held by non-affiliates of the registrant as of April 10, 2000 was approximately
$55,365,000.
The registrant had issued and outstanding 10,734,935 shares of its
common stock on April 10, 2000.
Documents incorporated by reference: Specifically identified portions
of the registrant's Definitive Proxy Statement for its Annual Shareholders
Meeting into Part III of this Report.
<PAGE>
iSHOPPER.COM, INC.
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1999
PART I
ITEM 1. BUSINESS........................................................1
ITEM 2. PROPERTIES......................................................6
ITEM 3. LEGAL PROCEEDINGS...............................................6
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............6
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.............................................7
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.............................9
ITEM 7. FINANCIAL STATEMENTS...........................................15
REPORT OF INDEPENDENT ACCOUNTANTS..............................16
CONSOLIDATED BALANCE SHEETS....................................17
CONSOLIDATED STATEMENTS OF OPERATIONS..........................18
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY................19
CONSOLIDATED STATEMENTS OF CASH FLOWS..........................20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.....................21
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.........................31
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTORS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
OF THE EXCHANGE ACT............................................32
ITEM 10. EXECUTIVE COMPENSATION.........................................33
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.....................................................33
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................34
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K...............................34
SIGNATURES.....................................................35
EXHIBIT INDEX..................................................36
SUBSIDIARIES OF THE REGISTRANT.......................Exhibit 22.1
POWER OF ATTORNEY....................................Exhibit 24.1
<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
Sunwalker Development, Inc. ("the Company") was incorporated in the
State of Utah on March 28, 1985, and was subsequently changed to a Nevada
Corporation on September 14, 1999. The Company was incorporated for the purpose
of providing a business framework within which capital could be raised and
business opportunities, with profit potential, could be sought. From the period
of inception until December 31, 1989, the Company operated as a development
stage corporation. Effective February 1, 1990, the Company began permanent
operations in the mining industry with emphasis on decorative rock used in
landscaping.
In 1990 the Company acquired a mining property located in Morristown,
(near Wickenburg) Arizona. In 1994 and 1995, the Company sold all of its assets
and ceased active operations.
Effective October 7, 1999 the Company merged with ECenter, Inc, a Utah
corporation. Subsequently, the Company changed its name to iShopper.com, Inc.
("iShopper.com"). As a result of the merger, the Company had two wholly-owned
subsidiaries: Outbound Enterprises, Inc. and iShopper Internet Services, Inc.
Through these subsidiaries the Company is engaged in the business of providing
cost effective e-commerce development and support for all sizes of businesses.
This includes low cost solutions for small businesses that would normally not
have the resources to create an e-commerce solution, as well as, fully
customized and specialized e-commerce sites for large organizations. A total of
125,000 shares of the Company's common stock were issued pursuant to the merger.
Effective November 1999, the Company refocused its efforts into becoming an
Internet holding company.
On November 1, 1999, the Company purchased NowSeven.com, Inc. for a
total of 1,000,000 shares of the Company's common stock. NowSeven.com, Inc. is
in the business of Internet and database marketing services.
On January 31, 2000, the Company purchased Stinkyfeet.com, Inc. for
7,500 shares of the Company's common stock and cash of $40,000. Stinkyfeet.com
is a freeware showroom where customers can create their own stores, get banners
and web based e-mail at no cost.
On April 4, 2000, the Company purchased Uniq Studios, Inc. for
1,500,000 shares of the Company's common stock and options to purchase 500,000
shares of common stock at $7.60 per share. In addition to its cutting edge web
design, digital animation, and Flash work, Uniq has developed a proprietary
technology, patent pending, that allows the Internet to be combined with CD-ROM
technology in an isolated environment. This allows Uniq to create multimedia
pieces on a CD-ROM that will interface with the web and update itself weekly or
even hourly, to provide the user with a completely unique experience each time
the CD is used.
On April 7, 2000, the Company purchased Totalinet.net, Inc. for 200,000
shares of the Company's common stock. Totalinet has a robust e-commerce platform
and a multi-tiered menu of services that will compliment those offered by
iShopper.com. iShopper and Totalinet will use separate branches to provide all
of the e-commerce and marketing tools needed to do business on the web. These
services include TotaliMall, TotaliAuction, TotaliCash, TotaliCenter and
TotaliPrint. TotaliMall is an Internet mall environment and TotaliAuction allows
iShopper and Totalinet customers to sell product in an auction environment.
TotaliCash will use coupons and gift certificates to share mall traffic and
support an affiliate program, while TotaliCenter will host Business to Business
functions like drop shipping and printing.
iShopper.com's strategy includes acquiring or taking strategic
positions in companies that have synergies with iShopper.com portfolio holdings.
Current iShopper.com holdings include: Outbound Enterprises, Inc., iShopper
Internet Services, Inc., and NowSeven.com, Inc., Stinkyfeet.com, Inc., Uniq
Studios, Inc. and Totalinet.net, Inc.
The principal revenues realized by the Company in 1999 of approximately
$3.9 million were generated from the sales of web site creation, e-commerce,
gateway software and hosting services which was the principal product of the
Company's first two acquisitions, iShopper and Outbound Enterprises, Inc.
iShopper.com's executive management and board of advisors have
extensive contacts in the Internet business market. iShopper.com is looking to
expand its portfolio of business holdings with Internet companies that have the
following general characteristics 1) synergies with current iShopper.com
holdings, 2) positive or at least break-even cash flow, 3) need for investment
and strategic positioning to achieve the next level of growth and 4) assisting
companies to be transformed into Internet related business.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
This Report, including all documents incorporated herein by reference,
includes certain "forward-looking statements" within the meaning of that term in
Section 13 or 15(d) of the Securities Act of 1934, and Section 21E of the
Exchange Act, including, among others, those statements preceded by, followed by
or including the words "believes," "expects," "anticipates" or similar
expressions.
These forward-looking statements are based largely on our current
expectations and are subject to a number of risks and uncertainties. Our actual
results could differ materially from these forward-looking statements. In
addition to the other risks described in the "Factors That May Affect Future
Results" discussion under Item 6, Management's Discussion and Analysis of
Financial Condition and Results of Operations in Part II of this Report,
important factors to consider in evaluating such forward-looking statements
include:
o changes in our business strategy or an inability to execute our
strategy due to unanticipated changes in the market,
o our ability to raise sufficient capital to meet operating
requirements,
o various competitive factors that may prevent us from competing
successfully in the marketplace, and
o changes in external competitive market factors or in our internal
budgeting process which might impact trends in our results of
operations.
In light of these risks and uncertainties, there can be no assurance that the
events contemplated by the forward-looking statements contained in this Report
will, in fact, occur.
STRATEGY & MARKET OPPORTUNITY
The iShopper.com strategy is to create shareholder value by developing
a portfolio of Internet company holdings that either 1) become a permanent,
cash-flow positive fixture in the companies holdings, 2) achieve the next level
of growth and are the target of a strategic acquisition by a third-party, or 3)
pursue an initial public offering and 4) assisting companies to be transformed
into Internet related business. While the Company strives to create positive
shareholder value from every holding in its portfolio, there will be some
holdings that exceed expectations and some holdings that will not reach their
full potential.
iShopper.com management believes that there is tremendous market
opportunity for the Company's strategy. There is no question that an
unprecedented amount of venture capital has recently gone into the marketplace,
funding thousands of new Internet companies. In just the Silicon Valley alone,
according to San Jose Mercury News, November 6, 1999, the first nine months of
1999 brought $7.7 billion of venture capital funding, nearly equaling the $8
billion for 1997 and 1998 combined.
This venture capital funding is fueled by the dramatic growth and use
of the Internet. International Data Corporation (IDC) estimates that the number
of individuals accessing the Internet will grow from approximately 142 million
at the end of 1998 to more than 502 million by the end of 2003. Consumer online
spending is expected to experience similar dramatic growth. Forrester Research
predicts that online sales in the United States will increase from 20 billion in
1999 to approximately 184 billion by 2004.
The Internet has created new and more efficient ways to reach customers
and is changing the competitive dynamics for doing business. Companies no longer
have to be large international conglomerates to transact business worldwide.
Small businesses, with relative small investments, can now operate in this
global economy and compete directly with larger corporations using the Internet
as a communications, customer service, selling and distribution tool. As a
result, the onrush of Internet companies developing Internet related products
and services with newer bells and whistles continue to escalate in unparalleled
proportions.
iShopper.com believes that many of these new Internet companies will
find it difficult to achieve their growth goals on their own. They will be
looking to reap the synergistic rewards of being a member company in an
attractive portfolio of companies. For example, CMGI is often cited as the most
successful example of the Internet holding company model. In a recent news
article by The Industry Standard, December 15, 1999, about CMGI's portfolio
company, NaviSite, it was reported that 58 percent of NaviSite's revenue comes
from providing services to other CMGI units and to companies in which CMGI is an
investor. As many young companies can see, the network of privileged
relationships afforded to companies who are part of a larger portfolio can often
make the difference between success and failure of the business venture.
iShopper.com's corporate headquarters in Sandy, Utah provides the
Company an excellent opportunity to pursue the many local deals in the Salt Lake
City and Intermountain area. Utah is one of the ten fastest-growing states in
the United States. A great deal of this growth is coming from the
high-technology sector. Gateway, Inc. opened a Salt Lake City factory in the
fall of 1998 and the Intel Corp. is building a research-and-development center
in Riverton, Utah that will become a showpiece for the state's technology
industry. The influx of technology companies in combination with the excellent
universities and colleges in the Salt Lake City area make for a vibrant new
technology business environment.
COMPETITIVE CONDITIONS
Simply stated, iShopper.com competition can be defined as those
companies or organizations that will be competing for the deals in which
iShopper.com is interested. Since iShopper.com will not be looking to be the
first or seed investor in a company, the Company does not believe it will be
competing with the venture capital firms in Utah and elsewhere. Rather,
iShopper.com often receives deal flow from venture firms who understand the
possible benefits of their company's inclusion in the iShopper.com portfolio.
While iShopper.com's strategy is similar in many respects to CMGI,
iShopper.com management believes that the types of deals and companies that
iShopper.com will pursue will most often be "under the radar" of CMGI and other
large internet holding companies.
The Internet Capital Group ("ICG") is another possible competitor of
iShopper.com. However, ICG is pursuing a strictly "business-to-business"
strategy for acquisitions or strategic investments. ICG's tight focus means that
a lot of the deals the iShopper.com might pursue could, in fact, be
complementary and not competitive to ICG holdings.
Since iShopper.com is pursuing companies in many different product and
service sectors of the Internet, it is impossible to list all the possible
competitors that may pose a serious future competitive threat to the Internet
companies in the growing iShopper.com portfolio.
PRODUCTS & SERVICES - CURRENT
iShopper.com offers its portfolio companies three important products
and services: 1) capital to grow their business, 2) expert management and
strategic advice, and 3) synergies created by the network of companies in the
iShopper.com portfolio and 4) assisting companies to be transformed into
Internet related business.
The products and services of iShopper.com's wholly owned companies and
majority owned subsidiaries as of April 10, 2000 include the following: Outbound
Enterprises, Inc., iShopper Internet Services, Inc., NowSeven.com, Inc.,
Stinkyfeet.com, Inc., Uniq Studios, Inc. and Totalinet.net, Inc.
E-Commerce Tools and Hosting
iShopper.com, Inc. is an electronic commerce provider that specializes
in the creation and hosting of highly effective Internet based commerce sites to
small and medium sized businesses. The iShopper.com site is a shopping,
purchasing, and business commerce alternative to traditional brick and mortar
services. iShopper services include low-cost commerce solutions for businesses
that would not normally have those resources to create an e-commerce solution.
The iShopper portal is specifically oriented to purchasers and buying.
Individual consumers can access the iShopper portal through the world wide web
and find information about any and all products for iShopper hosted sites, as
well as how to create site's and various resources to help in electronic
commerce.
Internet Marketing Services
Outbound is an Internet marketing company that specializes in
business-to-business marketing and e-commerce services. Outbound also was
holding Internet training seminars which were held weekly and has now changed
its venue to a quarterly basis. Outbound is using the leads generated from
previous seminars to promote its products through telemarketing sales. Outbound
utilizes direct sales forces to market e-commerce and Internet products in the
majority of the top US ADI markets. Outbound targets small business owners,
entrepreneurs, and individuals seeking e-commerce opportunities on the web.
Outbound offers full e-commerce solutions including customized web design,
hosting, web traffic statistics, and customer support. Each site Outbound sells
and/or leases is owned and operated independently, but is enhanced by the
iShopper brand and accessed through the iShopper portal.
NowSeven.com, Inc. specializes in business-to-business database lists
and services that support direct marketing to Internet based companies. The
Company owns electronic databases, mailing lists as well as offering electronic
press release services and Internet marketing tools.
Internet Store Front and Web Pages
iShopper Internet Services and Totalinet has a robust e-commerce
platform and a multi-tiered menu of services that will compliment those offered
by iShopper.
Internet Browser and Commerce Tool
Uniq Studios has developed revolutionary browser and multi-media
technology that could potentially revolutionize the look and feel of the
e-commerce experience. The market for such technology is enormous and growing at
a staggering pace.
PRODUCTS & SERVICES - FUTURE
Business-to-Business Hardware and Software Distribution
iShopper.com is currently negotiating the purchase of a company that
specializes in hardware and software sales via a business-to-business Internet
model. The Company has established distribution channels and a proven track
record amongst its vendor and customer base.
Internet Direct Sales
iShopper.com is currently negotiating the purchase of a company that is
selling Internet related services via its telesales networks. The Company
currently employs in excess of 125 sales personnel. If the acquisition is
consummated, iShopper.com will incorporate certain of its existing products and
technologies into this sales and distribution channel.
RESEARCH & DEVELOPMENT
iShopper.com understands that technological innovation is often a key
to success in the Internet business market. Further, the pace of technological
innovation in the Internet business market is incredibly rapid. It can be
daunting for a single company to try to keep pace with technological change on
all levels. This challenge is actually a market advantage for iShopper.com.
Because iShopper.com is continually bringing in new companies into its
portfolio, these companies are bringing new tools and quite often, cutting edge
technology that can be shared with the other companies in the iShopper.com
portfolio.
However, because technology innovation is so central to success in the
Internet business market, iShopper.com still expects its member companies to
incur significant research and development expenses during the initial
development phase of new products and services.
MARKETING AND SALES
iShopper.com markets and sells the products of its portfolio companies
through dedicated staff at the respective companies. iShopper.com believes that
its portfolio companies should maintain close relationships with their
customers, an interaction facilitated through dedicated sales and marketing
staff.
iShopper.com plans on utilizing its extensive contacts in the direct
sales field to create privileged relationships with numerous marketing companies
in the United States and abroad. The iShopper.com management believes that its
ability to reach mass consumers and small businesses through powerful direct
distribution channels, is a significant competitive advantage for its portfolio
companies.
EMPLOYEES
As of April 10, 2000, iShopper.com and its subsidiaries employed a
total of 29 persons. We believe our relations with our employees are good. None
of our employees are associated with unions.
ENVIRONMENTAL STANDARDS
The Company is not involved in any project that would effect the
environment.
ITEM 2. PROPERTIES
Our corporate facility is located at 8722 South 300 West, Suite 106,
Sandy, Utah 84070. This facility is approximately 2,775 square feet, leased on a
month to month basis for $2,750. We believe that this property is suitable for
our immediate needs, however, as the Company grows there will be a need for a
larger facility. ishopper, NowSeven, and Stinkyfeet are located and managed at
the corporate facility.
Uniq Studios, Inc. facility is located at 761 West 1200 North, Suite
100, Springville, Utah 84663. We believe that this property is suitable for our
immediate needs. This facility is approximately 3,042 square feet, leased on a
three-year basis, with the lease ending in February, 2003, for $2,569 per month
for the first year, $2,620 for the second year, and $2,673 for the third year.
Totalinet.net's facility is located at 2645 Financial Court, Suite D,
San Diego, California 92117. We believe that this property is suitable for our
immediate needs. This facility is approximately 3500 square feet, leased for
$2,660 per month, ending August 31, 2001, plus approximately $300 per month for
common use area. The Company will assume this lease in April, 2000.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
PRICE RANGE OF COMMON STOCK
Our common stock trades on the OTC Bulletin Board under the symbol
[IHPR]. The following table sets forth the range of the high and low sales
prices per share of our common stock for the fiscal quarters indicated, as
reported by OTC. Prior to December 23, 1999, there was no known public trading
in our common stock. Quotations represent inter-dealer prices, without retail
markup, markdown, or commission and may not necessarily represent actual
transactions.
HIGH LOW
1999
----
Fourth Quarter $ 1/8 $ 1/8
Third Quarter N/A N/A
SecondQuarter N/A N/A
First Quarter N/A N/A
1998
----
Fourth Quarter N/A N/A
Third Quarter N/A N/A
SecondQuarter N/A N/A
First Quarter N/A N/A
Approximate Number of Equity Security holders
On April 10, 2000, there were 204 shareholders of record of our common
stock. Because many of such shares are held by brokers and other institutions on
behalf of shareholders, we are unable to estimate the total number of
shareholders represented by these record holders.
Dividends
We do not presently pay dividends on our common stock. We intend for
the foreseeable future to continue the policy of retaining earnings, if any, to
finance the development and growth of our business.
ISSUANCE OF SECURITIES
o During the 1st quarter of 1999, the Company issued 40,000,000 shares
for services of a new officer and Director that started in January,
1999. The shares were issued at a value of $.001 per share or $40,000.
We issued the shares to accredited investors only in reliance upon
Section 4(2) of the 1933 Act.
o On October 7, 1999, the Company issued 125,000 post-reverse shares for
all of the outstanding shares of ECenter, Inc. which was merged into
the Company as of that date. ECenter was the parent company of
iShopper Internet Services, Inc. and Outbound Enterprises, Inc. We
issued the shares to accredited investors only in reliance upon
Section 4(2) of the 1933 Act.
o On October 8, 1999, the Company effectuated a 1 for 1000 stock
reverse, which resulted in outstanding stock of 89,377 shares after
the reverse split, however, no certificate was reversed to less than
100 shares.
o On November 1, 1999, the Company issued 1,000,000 shares for all of
the assets of NowSeven.com, Inc. We issued the shares to accredited
investors only in reliance upon Section 4(2) of the 1933 Act.
o On November 1, 1999, the Company issued 1,000,000 shares for services
as a signing bonus for Douglas S. Hackett becoming the President and
Chief Executive Officer of the Company. We issued the shares to
accredited investors only in reliance upon Section 4(2) of the 1933
Act.
o On November 17, 1999, the Company issued 2,600,000 shares for exercise
of options of post-reverse shares at $.01 per share. Total
consideration paid was $26,000. The Board of Directors approved stock
options of post-reverse shares to various individuals at $.01 per
share before the acquisition of ECenter on October 1, 1999. We issued
the shares to accredited investors only in reliance upon Section 4(2)
of the 1933 Act.
o In a private placement conducted in December, 1999, the Company issued
2,000,000 shares at $.75 per share. Total consideration received
before December 31, 1999 was $1,102,500. The balance of the
subscriptions receivable ($397,500) was received shortly after the
first of the year. We issued the shares to accredited investors only
in reliance upon Section 4(2) of the 1933 Act.
o In a private placement conducted on December 3, 1999, the Company
issued 1,000,000 shares at $1.75 per share. This is a subscription
receivable as of December 31, 1999. The balance of the subscription
receivable is anticipated to be received before May, 2000. We issued
the shares to accredited investors only in reliance upon Section 4(2)
of the 1933 Act.
o On December 1, 1999, the Company issued to William E. Chipman, Sr. and
Lance King 200,000 options each at a purchase price of $1.75 per
share. We issued the options to accredited investors only in reliance
upon Section 4(2) of the 1933 Act. None have been exercised.
o On January 31, 2000, the Company purchased Stinkyfeet.com, Inc. for
7,500 shares of stock and cash consideration for all of the issued and
outstanding stock of Stinkyfeet.com, Inc.
o During the first quarter, the Company issued 1,173,058 of common stock
for partial conversion of a $60,000 note. All issuances of stock were
for conversion of debt at $.017 per share per an agreement signed on
or about December 31, 1997. The Company relied upon Section 4(2) of
the 1933 Act and issued the shares to an accredited investor. The
Company issued the following shares for the following debt/conversion
consideration:
- 300,000 shares for $5,100 on January 3, 2000.
- 300,000 shares for $5,100 on March 6, 2000.
- 273,058 shares for $4,642 on March 13, 2000.
- 300,000 shares for $5,100 on March 14, 2000.
o On April 4, 2000, the Company purchased Uniq Studios, Inc. for
1,500,000 shares of common stock of iShopper.com and 500,000 options
at $7.60 per share.
o On April 7, 2000, the Company purchased Totalinet.net, Inc. for
200,000 shares of common stock of iShopper.com.
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussions should be read in conjunction with the
Company's Consolidated Financial Statements contained herein under Item 7 of
this Report.
Year Year
Ended Ended
Dec. 31, 1999 Dec. 31, 1998
----------------- -----------------
Revenue: $ 3,924,869 $ 414,740
----------------- -----------------
Expenses (including selling,
general and administrative) 4,852,370 562,353
----------------- -----------------
Net earnings (loss) $ ( 927,501) $ ( 147,613)
================= =================
RESULTS OF OPERATIONS
Sales for the twelve months ended December 31, 1999 and 1998 were
respectively, $3,924,869 and $414,740. The Company's principal source of revenue
for 1999 and 1998 were sales from the web sites and merchant accounts sold of
$3,678,442 and $414,740. The dramatic increase in sales is due to having sales
activity for an entire year for 1999 compared to only 4 months for 1998. The
remaining revenues for 1999 came from various sales from the other consolidated
entities.
Cost of sales for the twelve months ended December 31, 1999 and 1998
were, respectively, $276,600 or 7.1% of sales and $18,571 or 4.5% of sales.
These costs were mainly the cost of materials used for direct sales and products
which were resold. The gross profit of 1999 and 1998 was 92.9% and 95.5%,
respectively.
General & Administrative expenses for the twelve months ended December
31, 1999 and 1998 were, respectively, $3,912,542 or 99.7% of sales and $484,683
or 116.9% of sales. These costs were mainly the payroll and travel costs
relating to the seminars. These seminars were given through the entire country
from San Francisco to New York.
Bad Debt expense for the twelve months ended December 31, 1999 and 1998
were, respectively, $653,702 or 16.7% of sales and $59,720 or 14.4% of sales.
Included in this expense is $138,028 and $26,555, respectively, representing the
allowance for doubtful account. The remaining balance is write-offs of account
receivables, which were sales financed for a period of twelve months. Some of
these clients have not continued with their payment plan. These receivables are
turned over to a collection agency after 90 days of no payment and were written
off at that time. If there is a collection on the receivable, then the sale will
be recorded at that time.
During 1999 the Company purchased iShopper and NowSeven, which included
goodwill of $219,713 and $10,000, respectively. For the year ended December 31,
1999 the Company wrote off goodwill of $229,713 due to the determination that
the assets had no value. There was no goodwill written off in 1998.
For the year ended December 31, 1999, the Company recorded a tax
benefit of $233,810. This is due to having a loss of $927,501. The Company has
recorded a tax benefit of $472,120, with a valuation allowance of approximately
50%. There was no tax benefit or liability for 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations to date primarily through
private placements of equity securities and current sales. We have been
unprofitable since inception (1998) and we have incurred net losses in each
year.
We had negative working capital of $155,008 at December 31, 1999
compared to $52,995 on December 31, 1998. We currently have subscription
receivables in the amount of $2,150,500, which we expect to collect in the next
twelve (12) months. These receivables should be sufficient to cover our
operations and working capital requirements for the next twelve (12) months.
The direction of the Company is going toward purchasing and acquiring
several Internet based and technology businesses which will complement our
current business activities. The Company currently has four letters of intent
for the purchase of other subsidiaries which are in various stages of
negotiations. We are currently in the process of issuing a private placement
memorandum to raise approximately $10 million. This capital infusion will be
used for the above noted purchases and any future working capital needs.
The Company's working capital and other capital requirements for the
foreseeable future will vary based upon the number of companies we acquire and
if those acquisitions are cash or stock related. The Company is working to
obtain additional funding from several sources, including private placement.
This funding looks promising, however, there can be no assurance that additional
funding will become available.
Through our operating subsidiaries, we are developing various
Internet-based services and we are executing an overall business plan that
requires significant additional capital for among other uses:
o acquisitions,
o expansion into new domestic and international markets,
o additional management and personnel.
Furthermore, our funding of working capital and current operating losses
will require some additional capital investment.
INFLATION
Our business and operations have not been materially affected by
inflation during the periods for which financial information is presented.
OUTLOOK
The iShopper.com strategy is to create shareholder value by developing
a portfolio of Internet and technology company holdings that either 1) become a
permanent, cash-flow positive fixture in the companies holdings, 2) achieve the
next level of growth and are the target of a strategic acquisition by a
third-party, or 3) pursue an initial public offering. While the Company strives
to create positive shareholder value from every holding in its portfolio, there
will be some holdings that exceed expectations and some holdings that will not
reach their full potential.
iShopper.com management believes that there is tremendous market
opportunity for the Company' strategy. There is no question that an
unprecedented amount of venture capital has recently gone into the marketplace,
funding thousands of new Internet companies. In just the Silicon Valley alone,
the first nine months of 1999 brought $7.7 billion of venture capital funding,
nearly equaling the $8 billion for 1997 and 1998 combined.
This venture capital funding is fueled by the dramatic growth and use
of the Internet. International Data Corporation (IDC) estimates that the number
of individuals accessing the Internet will grow from approximately 142 million
at the end of 1998 to more than 502 million by the end of 2003. Consumer online
spending is expected to experience similar dramatic growth. Forrester Research
predicts that online sales in the United States will increase from 20 billion in
1999 to approximately 184 billion by 2004.
The Internet has created new and more efficient ways to reach customers
and is changing the competitive dynamics for doing business. Companies no longer
have to be large international conglomerates to transact business worldwide.
Small businesses, with relative small investments, can now operate in this
global economy and compete directly with larger corporations using the Internet
as a communications, customer service , selling and distribution tool. As a
result, the onrush of Internet companies developing Internet related products
and services with newer bells and whistles continue to escalate in unparalleled
proportions.
iShopper.com believes that many of these new Internet companies will
find it difficult to achieve their growth goals on their own. They will be
looking to reap the synergistic rewards of being a member company in an
attractive portfolio of companies. For example, CMGI is often touted as the most
successful example of the Internet holding company model. In a recent news
article about CMGI portfolio company, NaviSite, it was reported that 58 percent
of NaviSite's revenue comes from providing services to other CMGI units and to
companies in which CMGI is an investor. As many young companies can see, the
network of privileged relationships afforded to companies who are part of a
larger portfolio can often make the difference between success and failure of
the business venture.
iShopper.com's corporate headquarters in Sandy, Utah provides the
Company an excellent opportunity to pursue the purchase of many local companies
in the Salt Lake City and Intermountain area. Utah is one of the ten
fastest-growing states in the United States. A great deal of this growth is
coming from the high-technology sector. Gateway, Inc. opened a Salt Lake City
factory in the fall of 1998 and the Intel Corp. is building a
research-and-development center in Riverton, Utah that will become a showpiece
for the state's technology industry. The influx of technology companies in
combination with the excellent universities and colleges in the Salt Lake City
area make for a vibrant new technology business environment.
Factors That May Affect Future Results
We Have No Significant Operating History.
As a development stage company commencing business in the newly
emerging and rapidly changing Internet and e-commerce industries, we are subject
to all the substantial risks inherent in the commencement of a new business
enterprise. We can provide no assurance that we will be able to successfully
generate revenues, operate profitably, or make any distributions to the holders
of our securities. Additionally, we have no significant business history. Our
prospects must be considered in light of the risks, expenses and difficulties
encountered by companies in the early stages of development. Such risks include,
but are not limited to, an evolving and unpredictable business model and the
management of growth. We can provide no assurance that we will be successful in
addressing such risks, and the failure to do so could have a material adverse
effect on our business.
We Incurred Operating Losses for the Current Year, but Plan on Profits for the
Coming.
At December 31, 1999, our accumulated deficit since inception was
$1,075,114. For the twelve months ended December 31, 1999, we incurred net
losses of $927,501. We have incurred a net loss in each year of our existence,
and have financed our operations primarily through sales of equity securities.
Our expense levels are approximately $100,000 per month and our gross profit is
increasing, which is currently at approximately $85,000 per month . We expect to
increase our revenues on a monthly basis through our current business structure.
Also, through further acquisitions our revenue will exceed our expenses, thus we
are planning for a profitable year.
We Have Significant Funding Needs.
We require capital funds to continue in our growth plans and
acquisitions. We already have several avenues which we are presently pursuing to
obtain the needed funds for growth. These funds will be given to the Company in
exchange for equity. We expect our current source of working capital to be from
proceeds from our various private placement offerings. However, we can provide
no assurance that the proceeds from the offerings will be sufficient to cover
our cash requirements. If adequate funds are unavailable, we may delay, curtail,
reduce the scope of or eliminate the expansion of our operations, acquisitions
and/or our marketing and sales efforts which could have a material adverse
effect on our financial condition and business operations.
As a Start-Up Company, Our Quarterly Operating Results May Fluctuate.
Based on our business and industry and as a start-up company, we expect
to experience significant fluctuations in our future quarterly operating results
due to a variety of factors, many of which are outside our control. Factors that
may adversely affect our quarterly operating results include:
o our ability to attract new customers at a steady rate and maintain
customer satisfaction,
o the demand for the products and services we intend to market,
o the amount and timing of capital expenditures and other costs relating
to the expansion of our operations,
o the introduction of new or enhanced services by us or our competitors,
and
o economic conditions specific to the Internet, e-commerce or all or a
portion of the technology market.
As an Internet Based Company, We are in an Intensely Competitive Industry.
The Internet and e-commerce industries are highly competitive, and have
few barriers to entry. Although there are few competitors who offer the same or
similar services of the type we offer, we can provide no assurance that
additional competitors will not enter markets that we intend to serve.
We believe that our ability to compete depends on many factors both
within and beyond our control, including the following:
o the timing and market acceptance of our business model,
o our competitors' ability to gain market control,
o the success of our marketing efforts,
o acquisitions of companies with new internet models or technology,
o refocusing companies to internet based models,
o using current relations to extend all business sales and marketing.
The Future Success of Our Business Depends on Our Ability to Acquire Profitable,
Growing Companies.
Our success depends in large part upon our ability to attract new
business mergers and acquisitions. The inability to acquire high growth
companies could have a material adverse impact on our results of operations. It
is not difficult to locate new and growing companies, but there is no guarantee
the companies we feel are high growth, Internet related will meet our
expectations. However, we have an acquisition formula we feel is appropriate for
our growth plans.
Our Business is Dependent on the Maintenance of the Public Internet
Infrastructure.
Our success will depend, in large part, upon the maintenance of the
public Internet infrastructure as a reliable network backbone with the necessary
speed, data capacity, and security. To the extent that the Internet continues to
experience increased numbers of users, frequency of use, or increased
requirements of users, we can provide no assurance that the Internet
infrastructure will continue to be able to support the demands placed on it or
that the performance or reliability of the Internet will not be adversely
affected. In addition, the Internet could lose its viability as a form of media
due to delays in the development or adoption of new standards and protocols that
can handle increased levels of activity.
We Are Dependent on the Continued Growth of Online Commerce.
Our success is substantially dependent upon the widespread acceptance
and use of the Internet and other online services as an effective medium of
commerce. Rapid growth in the use of and interest in the Internet and other
online services is a recent phenomenon, and we can provide no assurance that
acceptance and use will continue to develop or that a sufficiently broad base of
consumers will adopt, and continue to use, the Internet and other online
services as a medium of commerce. Demand and market acceptance for recently
introduced services over the Internet are subject to a high level of uncertainty
and there exist few proven services or business models.
We Must Develop, Produce and Establish New Products and Services That Keep Up
With Rapid Technological Change.
The market for Internet services and business-to-business e-commerce is
characterized by rapid technological changes, frequent software changes,
frequent new products and service introductions and evolving industry standards.
The introduction of services embodying new processes and technologies and the
emergence of new industry standards can rapidly render existing services
obsolete and unmarketable. Our success in adjusting to rapid technological
change will depend on our ability to:
o develop and introduce new services that keep pace with technological
developments and emerging industry standards; and
o address the increasingly sophisticated and varied needs of customers.
Due to inadequate technical expertise, insufficient finances or other
reasons, we may be unable to accomplish these tasks. Such failure would have a
material adverse effect on our operating results and financial condition.
Our Operations May be Significantly Impaired by Changes in or Developments under
Domestic or Foreign Laws, Regulations, Licensing Requirements or
Telecommunications Standards.
We are not currently subject to direct regulation by any governmental
agency, other than regulations applicable to businesses generally. However, due
to the increasing popularity and use of the Internet, it is possible that a
number of laws and regulations may be adopted with respect to the Internet
covering issues such as user privacy, pricing, content, copyrights,
distribution, and characteristics and quality of products and services. The
adoption of such laws or regulations may decrease the growth of the Internet,
which could, in turn, decrease the demand for our services and increase our cost
of doing business. Moreover, the applicability to the Internet of existing laws
in various jurisdictions governing issues such as property ownership, sales and
other taxes, libel and personal privacy is uncertain and may take years to
resolve. Any such new legislation, the application of laws and regulations from
jurisdictions whose laws do not currently apply to our business, or the
application of existing laws to the Internet could have a material adverse
affect on our business.
The Volatility of Our Securities Prices May Increase.
The market price of our common stock has in the past been, and may in
the future continue to be, volatile. A variety of events may cause the market
price of our common stock to fluctuate significantly, including:
o quarter to quarter variations in operating results,
o adverse news announcements,
o the introduction of new products and services, and
o market conditions in the Internet-based professional services,
business, and business-to-business e-commerce.
In addition, the stock market in recent years has experienced
significant price and volume fluctuations that have particularly affected the
market prices of equity securities of many companies in our business and that
often have been unrelated to the operating performance of such companies. These
market fluctuations may adversely affect the price of our common stock.
We May be Required to Issue Stock in the Future That Will Dilute the Value of
Our Existing Stock.
We currently have 900,000 outstanding options. The exercise of all of
the outstanding options would dilute the then-existing shareholders' percentage
ownership of our common stock, and any sales in the public market could
adversely affect prevailing market prices for our common stock. Moreover, our
ability to obtain additional equity capital could be adversely affected since
the holders of outstanding options will likely exercise the options when we
probably could obtain any needed capital on terms more favorable than those
provided by these securities. We lack control over the timing of any exercise or
the number of shares issued or sold if exercises occur.
Our Failure to Manage Future Growth Could Adversely Impact Our Business Due to
the Strain on Our Management, Financial and Other Resources.
Because our business is in an early development stage, our ultimate
success depends on our ability to manage growth. In the future, we may have to
increase staff rapidly and integrate new personnel into our operations without
affecting productivity. We will have to ensure that our administrative systems
and procedures are adequate to handle such growth. It is unclear whether our
systems, procedures or controls will be adequate to support our operations or
that our management will be able to achieve the rapid execution necessary to
exploit our business plan. If our systems, procedures or controls are
inadequate, our operations and financial condition may suffer.
ITEM 7. FINANCIAL STATEMENTS
The following constitutes a list of Financial Statements included in
Part II of this Report beginning at page 16 of this Report:
o Report of Independent Accountants
o Consolidated Balance Sheets as of December 31, 1999 and December 31,
1998.
o Consolidated Statements of Operations for the years ended December 31,
1999 and December 31, 1998.
o Consolidated Statements of Stockholders' Equity for the period from
July 8, 1998 to December 31, 1999.
o Consolidated Statements of Cash Flows for the years ended December 31,
1999 and December 31, 1998.
o Notes to Consolidated Financial Statements.
<PAGE>
iShopper.com, Inc. and Subsidiaries
Consolidated Financial Statements
December 31, 1999 and 1998
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of iShopper.com, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of iShopper.com,
Inc. (a Nevada Corporation) and subsidiaries as of December 31, 1999 and 1998
and the related consolidated statements of operations, stockholders' equity and
cash flows for the years ended December 31, 1999 and 1998. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
iShopper.com, Inc. and subsidiaries at December 31, 1999 and 1998 and the
results of its operations and cash flows for the years ended December 31, 1999
and 1998 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 8, the Company's
recurring operating losses and lack of working capital raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to those matters are also described in Note 8. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
March 28, 2000
<PAGE>
<TABLE>
<CAPTION>
iShopper.com, Inc. and Subsidiaries
Consolidated Balance Sheet
ASSETS
December 31,
1999 1998
--------------------- ------------------
CURRENT ASSETS
<S> <C> <C>
Cash $ 13,935 $ 20,468
Accounts receivable (Net of allowance for doubtful accounts of 130,886 28,875
$138,028 and $26,555, respectively)
Employee Receivables --- 547
Prepaid expenses 30,515 12,057
Deferred Tax Benefit (Note 1) 236,060 ---
--------------------- ------------------
Total Current Assets 411,396 61,947
--------------------- ------------------
PROPERTY AND EQUIPMENT (Net) (Note 2) 141,983 20,751
--------------------- ------------------
OTHER ASSETS
Deposits 108,981 11,131
--------------------- ------------------
$ 662,360 $ 93,829
===================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
December 31,
1999 1998
--------------------- ------------------
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 304,653 $ 89,942
Accrued taxes (Note 1) 200 ---
Accrued interest 45,551 ---
Short term debt (Note 3) 216,000 ---
Short term debt - related party (Note 9) --- 25,000
--------------------- ------------------
Total Current Liabilities 566,404 114,942
--------------------- ------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 100,000,000 shares authorized, $.001 par value; 7,814 62
7,814,377 and 62,114 shares issued and outstanding
Capital in excess of par value 3,313,756 126,438
Retained (Deficit) (1,075,114) (147,613)
Subscriptions Receivable (Note 6) (2,150,500) ---
--------------------- ------------------
Total Stockholders' Equity (Deficit) 95,956 (21,113)
--------------------- ------------------
$ 662,360 $ 93,829
===================== ==================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
iShopper.com, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Year Ended
December 31,
1999 1998
----------------- ---------------
<S> <C> <C>
REVENUES $ 3,924,869 $ 414,740
----------------- ---------------
COST OF SALES 276,600 18,571
----------------- ---------------
GROSS PROFIT 3,648,269 396,169
----------------- ---------------
OPERATING EXPENSES
General and Administrative 3,912,542 484,683
Bad Debt Expense 653,702 59,720
Loss from write off Goodwill (Note 1) 229,713 -
Depreciation and Amortization 23,543 1,206
----------------- ---------------
TOTAL OPERATING EXPENSES 4,819,500 545,609
NET OPERATING INCOME (LOSS) (1,171,231) (149,440)
----------------- ---------------
OTHER INCOME (EXPENSE)
Interest Income 28,567 1,827
Interest Expense (5,197) -
----------------- ---------------
TOTAL OTHER INCOME (EXPENSES) 23,370 1,827
----------------- ---------------
NET (LOSS) BEFORE TAXES (1,147,861) (147,613)
----------------- ---------------
INCOME TAX BENEFIT (EXPENSE) (Note 1) 233,810 -
----------------- ---------------
NET LOSS BEFORE EXTRAORDINARY LOSS: (914,051) (147,613)
----------------- ---------------
EXTRAORDINARY ITEMS
Loss on casualty (Net of Income Tax Benefit of $2,050)
(Note 4) (13,450) -
----------------- ---------------
NET INCOME (LOSS) $ (927,501) $ (147,613)
================= ===============
LOSS PER SHARE (Note 1)
Basic
Net Income loss before extraordinary items $ (.68) $ (2,38)
Extraordinary items (.01) -
----------------- ---------------
(LOSS) PER SHARE $ (.69) $ (2.38)
================= ===============
WEIGHTED AVERAGE SHARES OUTSTANDING 1,349,234 62,114
================= ===============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
iShopper.com, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity (Deficit)
For the Period from July 8, 1998 to December 31, 1999
Additional
Common Stock Paid-In Retained Subscriptions
Shares Amount Capital (Deficit) Receivable
------------ ---------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance - July 8, 1998 - $ - $ - $ - $ -
Shares issued to organizers for 62,114 62 126,438 - -
cash
Net (loss) for the year ended
December 31, 1998 - - - (147,613) -
------------ ---------- ------------ ------------- -------------
Balance December 31, 1998 62,114 62 126,438 (147,613) -
Reorganization of Company -
Reverse acquisition of E-Center,
Inc. (Note 1) 62,886 63 127,937 - (3,000)
Reorganization of Company -
Reverse acquisition of
iShopper.com, Inc. (Note 1) 89,377 89 (230,360) - -
Expenses paid by shareholder - - 1,350 - -
Shares issued for exercise of
stock options at $.01 per share 2,600,000 2,600 23,400 - -
(Note 6)
Shares issued for purchase of
Now Seven, Inc. at $.01 per 1,000,000 1,000 9,000 - -
share (Note 1)
Shares issued for services at
$.01 per share (Note 6) 1,000,000 1,000 9,000 - -
Shares issued for cash at $.75
per share (Note 6) 2,000,000 2,000 1,498,000 - (397,500)
Shares issued for cash at $1.75
per share (Note 6) 1,000,000 1,000 1,749,000 - (1,750,000)
Net loss for the year ended
December 31, 1999 - - - (927,501) -
------------ ---------- ------------ ------------- -------------
Balance - December 31, 1999 7,814,377 $ 7,814 $3,313,756 $(1,075,114) $(2,150,500)
============ ========== ============ ============= =============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
iShopper.com, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Year Ended
December 31,
1999 1998
----------------- --------------
<S> <C> <C>
Cash Flows from Operating Activities
Net (loss) Profit $ (927,501) $ (147,613)
Less non-cash items:
Amortization & depreciation expense 23,643 1,206
Bad Debt Expense 114,527 26,555
Loss from writedown of goodwill 229,713 -
Expenses paid by stock 10,000 -
Expenses paid by stockholder 1,350 -
(Increase) decrease in accounts receivable (203,965) (55,977)
(Increase) decrease in prepaid expenses (17,911) (12,057)
Increase (decrease) in accounts payable and accrued expenses 183,382 89,942
Increase (decrease) in accrued taxes or tax benefits (234,510) -
----------------- --------------
Net cash Provided (Used) by Operating Activities (823,372) (97,944)
----------------- --------------
Cash Flows from Investing Activities
Purchase of equipment (131,203) (21,957)
Cash paid for deposits (97,850) (11,131)
Cash deficiency of acquired subsidiary (5,508) -
Purchase of goodwill (226,000) -
----------------- --------------
Net Cash Provided (Used) by Investing Activities (460,561) (33,088)
----------------- --------------
Cash Flows from Financing Activities
Cash from stock issuance 1,256,500 126,500
Cash from debt financing (Net) 20,900 25,000
----------------- --------------
Net Cash Provided (Used) by Financing Activities 1,277,400 151,500
----------------- --------------
Increase (Decrease) in Cash (6,533) 20,468
Cash and Cash Equivalents at Beginning of Period 20,468 -
----------------- --------------
Cash and Cash Equivalents at End of Period $ 13,935 $ 20,468
================= ==============
Supplemental Non-Cash Transactions
Cash paid for:
Interest $ 542 $ -
Income taxes $ 1,350 $ -
Stock issued for services/acquisitions $ 20,000 $ -
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
iShopper.com, Inc. and Subsidiaries
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 1 - Summary Of Significant Accounting Policies
a. Organization
iShopper.com, Inc. is a consolidated group of corporations
with three companies as wholly owned subsidiaries, Outbound
Enterprises, Inc., iShopper Internet Services, Inc., and
NowSeven.com, Inc. The consolidated group is known as the Company.
iShopper.com, Inc. (iShopper.com) formerly known as
Sunwalker Development, Inc. was incorporated on March 28, 1985 in
the State of Utah and subsequently changed to a Nevada Corporation
on September 14, 1999. iShopper.com is in the business as a holding
corporation for its wholly owned subsidiaries.
Outbound Enterprises Inc. (Outbound) was incorporated on
July 27, 1998 in the State of Utah and is in the business of
marketing the services iShopper provides.
iShopper Internet Services, Inc (iShopper) was incorporated
on August 5, 1996 in the State of Utah and is in the business of
creating and maintaining internet web sites.
NowSeven.com, Inc. (NowSeven) was incorporated on August
26, 1999 in the State of Delaware and is in the business of
internet and database marketing services. NowSeven was acquired on
October 21, 1999. All of the stock of NowSeven was acquired in
exchange for 1,000,000 shares of iShopper.com. The acquisition was
accounted for as a purchase. NowSeven's business activity is shown
since acquisition.
The shareholders of Outbound acquired control of ECenter in
July, 1999 through a reverse merger acquisition of ECenter. The
acquisition is accounted for similar to a "pooling of interest"
method of accounting where the history of Outbound is shown from
inception (1998). On October 7, 1999, the shareholders of ECenter
then acquired control of Sunwalker Development, Inc., a Nevada
corporation, by having 125,000 shares issued to the shareholders of
ECenter for 100% of the outstanding shares of ECenter. ECenter was
merged into Sunwalker, which later changed its name to
iShopper.com, Inc. This acquisition `is accounted for as a
recapitalization where the history of iShopper.com and its
subsidiaries (Outbound and iShopper) are presented from inception
or purchase (Outbound - July 7, 1998, ECenter - April 28, 1999,
iShopper - June 30, 1999, and iShopper.com - October 7, 1999).
At the time of the acquisition of Sunwalker (now
iShopper.com), there were 89,377 shares of Sunwalker stock
outstanding. An additional 125,000 shares were issued to acquire
100% control of ECenter and its subsidiaries. This transaction is
known as a recapitalization of ECenter. All equity stock activity
of ECenter since its July 1998 inception is shown in terms of stock
of iShopper.com. All equity funding of ECenter and its
subsidiaries, Outbound and iShopper, is shown historically through
1998 and 1999 as if the 125,000 shares were issued through those
years. A total of $126,500 of equity funding was received in 1998,
which is represented by the 62,114 shares of the 125,000 share
issuance (49.69%), and $128,000 of equity funding was received in
1999, which is represented by the 62,886 shares of the 125,000
share issuance (50.31%).
<PAGE>
iShopper.com, Inc. and Subsidiaries
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 1 - Summary Of Significant Accounting Policies (Continued)
iShopper was acquired on July 1, 1999. All of the stock of
iShopper was acquired for a down payment of $76,000 and a note of
$150,000 with payments of $30,000 per month. The acquisition of
iShopper was accounted for as a purchase with net assets of
iShopper being $(780) at purchase, resulting in goodwill value of
$226,780. iShopper's business activity is shown since acquisition
on July 1, 1999.
b. Recognition of Revenue
The Company's subsidiaries, Outbound, iShopper and NowSeven
are in the business of creating, maintaining and marketing
individual E-Commerce sites for custom businesses. The Company
offers a range of services from individual design to complete
maintenance and publicity of internet sites. Clients select what
services they wish to purchase and pay either cash or arrange
financing through a third party finance agency. When the Company
uses financing through a third party, a discount and processing
fees are charged and are netted against gross sales. The Company is
also charged a reserve for possible bad debt accounts. (See Note
7).
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is
based on the weighted average number of shares outstanding at the
date of the financial statements. Options on shares of common stock
were not included in computing diluted earnings per share because
their effects were antidilutive (400,000 shares).
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with
original maturities of three months or less to be cash equivalents.
e. Provision for Income Taxes
The Company adopted Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes" in the fiscal year
ended December 31, 1999 and has applied the provisions of the
statement on a retroactive basis to all the previous years which
resulted in no significant adjustment.
Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" requires an asset and liability
approach for financial accounting and reporting for income tax
purposes. This statement recognizes (a) the amount of taxes payable
or refundable for the current year and (b) deferred tax liabilities
and assets for future tax consequences of events that have been
recognized in the financial statements or tax returns.
<PAGE>
iShopper.com, Inc. and Subsidiaries
Notes to the Financial Statements
December 31, 1999 and 1998
e. Provision for Income Taxes (continued)
Deferred income taxes result from temporary differences in
the recognition of accounting transactions for tax and financial
reporting purposes. There were no temporary differences at December
31, 1999 and earlier years; accordingly, no deferred tax
liabilities have been recognized for all years.
The Company has cumulative net operating loss carryforwards
of approximately $1,150,000 at December 31, 1999. The Company has
recognized a tax benefit equal to estimated future use of the net
operating losses that will offset the future net taxable income.
The potential tax benefits of the net operating loss carryforwards,
estimated based upon current tax rates at December 31, 1999 have
been offset by an estimated 50% valuation reserve as follows:
Estimated Deferred tax asset and the valuation account is
as follows:
December 31,
1999
-----------------
Deferred tax asset:
NOL Carryforward $ 472,120
Valuation allowance (236,060)
-----------------
$ 236,060
=================
The net operating losses begin to expire in 2019. The
Company has offset the current tax benefit by minimum state income
tax expense of $200 in the current year. The Company did not
recognize any tax expense in 1998 since the Company (Outbound only)
was an S Corporation and such earnings/losses of the Company were
passed through proportionately to the individual shareholders of
the Company during 1998.
f. Goodwill
Goodwill is a result of the purchase of iShopper Internet
Services, Inc. and is being amortized on the straight line basis
over a five year period. Amortization expense charged to operations
up to August 31, 1999 was $7,067. The balance of the goodwill was
written off at August 31, 1999. The NowSeven purchase was also
written off as a write of goodwill of $10,000, resulting in a loss
of writedown of goodwill of $229,713.
g. Principles of Consolidation
These financial statements include iShopper.com, Inc., and
its wholly owned subsidiaries, Outbound, iShopper and NowSeven
since inception (Outbound) or acquisition (iShopper.com, iShopper
and NowSeven). All intercompany transactions and balances have been
eliminated in the consolidation.
<PAGE>
iShopper.com, Inc. and Subsidiaries
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 1 - Summary Of Significant Accounting Policies (Continued)
h. Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect reported amounts of
assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements and expenses
during the reporting period. In these financial statements, assets,
liabilities and expenses involve extensive reliance on management's
estimates. Actual results could differ from those estimates.
NOTE 2 - Property and Equipment
The Company capitalizes purchases of long lived assets
that are expected to give benefit to the Company over the life of
the asset. The Company also capitalizes improvements and costs
that increases the value of or extend the life of the asset.
Capitalized assets are depreciated over the estimated
useful lives of the assets (five to seven years for furniture and
fixtures, three to five years for computer equipment) on the
straight line basis.
Property and equipment consists of the following at
December 31, 1999 and 1998:
December 31,
1999 1998
--------------- --------------
Furniture and Fixtures $ 141,379 $ 3,410
Computer Equipment 49,884 18,547
--------------- --------------
191,263 21,957
Less: Accumulated Depreciation (49,280) (1,206)
--------------- --------------
Total Property and Equipment $ 141,983 $ 20,751
=============== ==============
At the time of acquisition, June 30, 1999, iShopper had
property and equipment as follows:
Furniture & Fixtures $ 38,103
Accumulated Depreciation (33,008)
-----------------
Net Assets $ 5,095
=================
Depreciation expense for the period ended December 31, 1999
and 1998 is $16,476 and $1,206, respectively.
<PAGE>
iShopper.com, Inc. and Subsidiaries
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 3 - Notes Payable
The Company has several short term notes payable as follows:
- In July 1999, the Company purchased iShopper Internet Services,
Inc. for $226,000. The Company paid $76,000 cash and agreed to pay
the remaining $150,000 in monthly installments of $30,000 beginning
September 1999. The balance is non-interest bearing. The final
$30,000 was paid in January, 2000.
- The board of directors of the Company has authorized the accrual
of directors fees to one of the former officers and directors for
services rendered for 1995 to 1997 at $20,000 per year totaling
$60,000. In 1998, the Company negotiated the debt into a
convertible debenture with a 5% interest rate. Interest of $3,000
was accrued on the debt in 1999 and 1998.
- On March 10, 1993 the United States Department of Interior,
Bureau of Land Management (BLM) filed a complaint in district court
naming the Company (Sunwalker, now iShopper.com), its directors and
other related individuals, contending that the unpatented claims
held by the Company were invalid. Also, the BLM alleged that the
Company was removing landscaping material in excess of contracted
tonnage. In addition, allegations were made that the natural beauty
of the desert land surrounding the Morristown quarry was being
damaged.
Because of the seriousness of the complaint, the BLM was
able to obtain a prejudgement attachment and sequestration which,
in effect, closed the Morristown quarry. A receiver was appointed
to collect Company accounts receivable, liquidate inventory and pay
Company debts. Permission was granted by the Court for the Company
to sell assets to pay current operating expenses.
In a compromise settlement reached with the BLM on October
19, 1994, the BLM acknowledged that the Company retains the right
to apply for a patent for the lands included in its unpatented
mining claims. On November 19, 1994 the Company negotiated two
promissory notes payable to the BLM in the amounts of $81,000 and
$45,000 plus interest at the legal rate (6.06%) for federal
judgements on the day of execution for a term of three years. No
payments were made on the notes since 1994, during which time
interest continued to accrue. As of the audit date, the Company has
ongoing negotiations with the BLM, but no settlement has been
reached. Interest accrued on the two notes was $39,702 as of
December 31, 1999 and $32,067 as of December 31, 1998. Interest
expense for 1999 and 1998 was $7,635. (Interest per statement of
operations since acquisition, October 7, 1999 was $1,909).
Summary of Short Term Debt:
iShopper Note $ 30,000
Director Fees 60,000
BLM Note 126,000
$ 216,000
=========
<PAGE>
iShopper.com, Inc. and Subsidiaries
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 4 - Extraordinary Loss
During 1999, the Company advanced funds for renovation on
the anticipated acquisition of a building in Salt Lake City. During
the construction phase, a tornado destroyed the building and was
written off as a complete loss. The loss is presented as an
extraordinary loss in the statement of operations.
NOTE 5 - Factored Accounts Receivable
During 1999, the Company used two different accounts
receivable factoring and servicing companies to assist in the
financing and collection of its accounts receivable. During 1999,
the Company sold $763,364 of its accounts receivable to a third
party, which charged the Company a discount of $62,851 and
established a reserve account for potential future uncollectibles.
The balance of the reserve account at December 31, 1999 was
$106,331. The other company was used as a servicing agency to bill
and collect the Company's own accounts receivable and charged the
Company $8,863 in service fees.
NOTE 6 - Common Stock Transactions
All stock transactions conducted during the period for
which no cash was exchanged and for which shares of stock were
exchanged for assets or goods and services were recorded at fair
market value of the stock as best determined by the board of
directors at the time the share issuances were authorized.
Common stock transactions during 1999 are as follows:
In 1999, the stockholders approved a 1 for 1,000 reverse
split of its common stock. All financial statements have been
restated to reflect the reverse split.
- 125,000 shares issued for all of the outstanding shares of
ECenter, Inc. which was merged into the Company as of October 7,
1999. ECenter was the parent company of iShopper Internet Services,
Inc. and Outbound Enterprises, Inc.
- 2,600,000 shares issued for exercise of options at $.01 per
share. Total consideration paid was $26,000. The board of directors
approved stock options to various individuals at $.01 per share
before the acquisition of ECenter on October 1, 1999. The options
were exercised during November and December.
- 1,000,000 shares issued for all of the outstanding stock of
NowSeven.com, Inc. ($.01).
- 1,000,000 shares issued for services as a signing bonus for
Douglas S. Hackett becoming the president of the Company.
<PAGE>
iShopper.com, Inc. and Subsidiaries
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 6 - Common Stock Transactions (Continued)
- 2,000,000 shares issued for a private placement at $.75 per
share. Total consideration received before December 31, 1999 was
$1,102,500. The balance of the subscriptions receivable ($397,500)
was received shortly after the first of the year.
-1,000,000 shares issued for a private placement at $1.75 per
share. This is a subscription receivable as of December 31, 1999
($1,750,000).
NOTE 7 - Options for Purchase of Common Stock
Stock Option Plans - The Company has granted options to two
directors to acquire common stock at a purchase price equal to the
fair market value on the date of grant and are exercisable beyond
any employment. Options generally expire five years from date of
grant. A summary of activity follows:
<TABLE>
<CAPTION>
Options: 1999 1998
------------------------------- -----------------------------
Weighted Weighted
Number of Average Number of Average
Shares Exercise Shares Exercise
Price Price
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Outstanding at beginning of
year - $ - - $ -
Granted 400,000 1.75 - -
Exercised - - - -
Canceled - - - -
----------- ------------- ----------- -------------
Outstanding at end of year 400,000 $ 1.75 - $ -
=========== ============= =========== =============
Exercisable at end of year 400,000 $ 1.75 - $ -
=========== ============= =========== =============
</TABLE>
As permitted by SFAS #123 "Accounting for Stock-Based
Compensation," the Company has elected to account for the stock
option plans under APB #25 "Accounting for Stock Issued to
Employees." Accordingly, no compensation cost has been recognized
for these plans when options were issued at equal to or more than
fair market value.
For purposes of pro forma disclosures, the estimated fair
value of the options is amortized to expense over the options'
vesting period. Had compensation cost for the stock option plan
been determined based on the fair value at the grant date
consistent with SFAS #123, the Company's net earnings and earnings
per share are estimated as follows:
1999 1998
-------------- -------------
Net earnings
As reported $ (927,501) $ (147,613)
Pro forma $ (927,501) $ (147,613)
<PAGE>
iShopper.com, Inc. and Subsidiaries
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 7 - Options for Purchase of Common Stock (Continued)
Net earnings per share (basic and diluted)
As reported $ (.69) $ (2.38)
Pro forma $ (.69) $ (2.38)
============= ============
The fair value of each option grant was estimated at the
date of grant using the Black-Scholes option pricing model with
the following weighted average assumptions:
1999 1998
------------- -------------
Risk-free interest rate 7.0% N/A
Dividend yield 0% N/A
Volatility 100% N/A
Average expected term (years) 5 N/A
============= =============
Employee stock options outstanding and exercisable under
these plans as of December 31, 1999 were:
<TABLE>
<CAPTION>
Outstanding Exercisable
----------------------------------------------- -----------------------------
Weighted
Weighted Average Weighted
Average remaining Average
Exercise Exercise Contractual Exercise
Price Options Price Life (years) Options Price
------------- ----------- ------------- ---------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
$ 2.00 400,000 $ 1.75 5.0 400,000 $ 1.75
------------- ----------- ------------- ---------------- ----------- --------------
400,000 400,000
=========== ===========
</TABLE>
NOTE 8- Going Concern
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. The
Company has negative working capital and has had recurring
operating losses and is dependent upon financing to continue
operations. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty. Management
intends to fund its subsidiaries' activities, according to the
business plan, and emerge profitable sometime in the future.
NOTE 9 - Notes Payable - Related Party
In 1998, an officer and director of Outbound loaned the
Company $25,000. The loan was repaid in 1999. The loan was non
interest bearing and unsecured.
<PAGE>
iShopper.com, Inc. and Subsidiaries
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 10 - Subsequent Events
Subsequent to year end, the Company acquired two
subsidiaries and issued stock for conversion of debt as follows:
- Stinkyfeet.com, Inc. was acquired on January 31, 2000 for 7,500
shares of common stock of iShopper.com and cash of $40,000.
- Uniq Studios, Inc. was acquired on April 4, 2000 for 1,500,000
shares of common stock and 500,000 options (exercisable at $7.60)
for iShopper.com common shares.
- Totalinet.net, Inc. was acquired on April 7, 2000 for 200,000
shares of common stock.
- During the first quarter of 2000, the Company issued 1,173,058 of
common stock for partial conversion of the $60,000 note payable to
a former officer/director (Note 3). All issuances of stock were for
conversion of debt at $.017 per share. The Company issued the
following shares for the following debt/conversion consideration:
- 300,000 shares for $5,100 on January 3, 2000.
- 300,000 shares for $5,100 on March 6, 2000.
- 273,058 shares for $4,642 on March 13, 2000.
- 300,000 shares for $5,100 on March 14, 2000.
All accrued interest on the $60,000 note payable was
waived by the holder of the note ($6,000) in January, 2000.
The Company currently has four letters of intent for the
purchase of other subsidiaries which are in various stages of
negotiations.
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT.
The following sets forth certain information regarding our executive
officers as of April 10, 2000:
Name Age Position
- -------------------------- ------- ----------------------------------------
Douglas S. Hackett 36 Chief Executive Officer, President
and Director
William E.Chipman, Sr. 54 Chief Financial Officer and Director
Tom Maher 50 Chief Operating Officer and Secretary
Adam Maher 26 Executive Vice President and Director
- --------------------------
Douglas S. Hackett, CEO: Mr. Hackett is the President, Chief Executive
Officer and Director of iShopper.com. Prior to working with iShopper.com, Mr.
Hackett was the Vice President of Fortune Financial Systems, Inc. During his
tenure at Fortune he also guided the marketing efforts to build one of the
largest and most successful online malls. Mr. Hackett has also worked in
electronic and broadcast media as a creator of several nationally syndicated
programs, including "Baseball Sunday with Joe Garagiola," "Football Sunday" and
"NBA Basketball Sunday." He has served as president and general manager of KGU
and KTSS in Honolulu and WTIX in New Orleans.
William E. Chipman, Sr., Chief Financial Officer: Mr. Chipman is
currently Chief Financial Officer and Director of iShopper.com. Prior to working
with iShopper.com, Mr. Chipman served as Chief Financial Officer and Director of
Mergers and Acquisitions for World Wireless Communications, Inc. Mr. Chipman
also served as Chief Financial Officer and Director for Digital Radio
Communications, Inc. and MHB Technology, Inc. Mr. Chipman has an extensive
accounting and mergers and acquisition background.
Tom Maher, Chief Operation Officer: Mr. Maher is Chief Operating
Officer for iShopper.com. Prior to working with iShopper.com, Mr. Maher held
executive management positions with JC Penney, May Company and Levi Strauss &
Company. In these capacities, Mr. Maher worked extensively in the area of
business development, operations and marketing.
[OTHER KEY EMPLOYEES]
Adam Maher, Executive Vice President: Adam is Executive Vice President
and Director for iShopper.com. Prior to working with iShopper.com, Adam was
president of Outbound Enterprises, Inc. where he was responsible for all
day-to-day operations of this direct sales company. Mr. Maher was responsible
for growing the Company from zero to over 4 million in sales. Prior to his
tenure with Outbound, Mr. Maher was President of iNetmall, where he developed
and implemented sales presentations for the Company.
[CHAIRMAN OF THE BOARD]
George Denney, Chairman: Mr. Denney is founder and Chairman Emeritus of
Cole-Haan, a company of international footwear and accessories. In addition to
his duties at Cole-Haan, Mr. Denney sits on the board of a number of companies
and associations, such as Hathaway, Inc., Footwear Industries of America.
[ADVISORS TO THE BOARD]
Doug Cole: Mr. Cole brings a wealth of sales, marketing and deal-making
experience to his role as an advisor to iShopper.com. Over the course of his
career, Mr. Cole has been involved in over 30 major acquisitions and mergers,
run three public companies and raised over $40 million for ten start-up
companies.
Doug Glen: Mr. Glen is General Partner in ProVen Private Equity, a
venture capital fund focused on investing in companies with attractive trademark
or copyright portfolios. Formerly, Mr. Glen was Chief Strategy Officer at
Mattel, Inc. Mr. Glen has held a variety of senior positions in marketing,
advertising, and strategy at Sega of America, Lucas Arts Entertainment, and
advertising firm D'Arcy Masius Benton & Bowles.
Mary Ann Norris: Ms. Norris is an Associate Partner in ProVen Private
Equity. Previously, Ms. Norris was Director of Strategic Planning at Mattel,
Inc., where she managed the launch of the Intel brand into the toy market. Ms.
Norris brings a wealth of experience in consumer electronics, Internet strategy,
video games, and new technology from her work with Sony Electronic Publishing,
The Voyager Company and her graduate studies in the Media Lab at the
Massachusetts Institute of Technology.
Other information required by this item is set forth under the captions
"Election of Directors, Directors and Executive Officers; Compliance with
Section 16(a) of Securities Exchange Act of 1934" in the Company's definitive
proxy statement to be filed pursuant to Regulation 14A and is incorporated
herein by reference. All of the current executive officers and directors of the
Company were delinquent in filing their Initial Statements of Beneficial
Ownership on Form 3.
ITEM 10. EXECUTIVE COMPENSATION
The information required is set forth under the caption "Compensation
of Executive Officers" in the Company's definitive proxy statement to be filed
pursuant to Regulation 14A and is incorporated herein by reference.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required is set forth under the caption "Security
Ownership of Certain Beneficial Owners and Management" in the Company's
definitive proxy statement to be filed pursuant to Regulation 14A and is
incorporated herein by reference.
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required is set forth under the caption "Election of
Directors - Certain Relationships and Related Transactions" in the Company's
definitive proxy statement to be filed pursuant to Regulation 14A and is
incorporated herein by reference.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
2.1 Agreement and Plan of Merger dated October 7, 1999, by and between
Sunwalker Development, Inc. and ECenter, Inc.
2.2 Agreement and Plan of Merger dated January 31, 2000, by and among
iShopper.com, Inc. and StinkyFeet.com, Inc.
2.3 Stock Exchange Agreement by and among Uniq Studios, Inc., Clayton F.
Kearl, Troy Kearl, Devin O. Kearl, and Dusty Kearl
2.4 Stock Exchange Agreement by and among Totalinet.net, Inc., Richard J.
Scavia and iShopper.com, Inc.
3.1* Certificate of Incorporation for iShopper.com, as amended. filed with
the Form 10-Q dated September 30, 1999
3.2* Amended and Restated Bylaws of iShopper.com, filed with the Form 10-Q
dated September 30, 1999.
10.1 Business Purchase and Stock Acquisition Agreement dated November 1,
1999, by and among Nowseven.com, Inc., Douglas S. Hackett and Robin R.
Hackett, TBE, and iShopper.com, Inc.
10.2 Employment Agreement dated November 22, 1999, between Douglas S.
Hackett and iShopper.com, Inc.
10.3 Memo of Understanding dated December 1, 1999, between iShopper, Inc.
and William E. Chipman, Sr.
10.4 Memo of Understanding dated December 1, 1999, between iShopper, Inc.
and Lance King.
21.1 Subsidiaries of iShopper.com.
24.1 Powers of Attorney for Messrs. Denney, Hackett, Chipman, and Maher.
27 Financial Data Schedule.
* Previously filed and incorporated herein by reference.
(b). Reports on Form 8-K: None
<PAGE>
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 duly authorized.
iSHOPPER.COM
April 12, 2000 By: /s/
- --------------- ------------------------------------
DOUGLAS S. HACKETT, PRESIDENT, CHIEF
EXECUTIVE OFFICER, AND DIRECTOR
Pursuant to the requirements of the Securities and Exchange Act of
1934, this Report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
/s/ April 12, 2000
- ------------------------------ President, Chief Executive --------------
DOUGLAS S. HACKETT Officer, and Director
/s/ April 12, 2000
- ------------------------------ Chief Financial Officer and --------------
WILLIAM E. CHIPMAN, SR. Director
/s/ April 12, 2000
- ------------------------------ Chairman of the Board --------------
GEORGE DENNEY
/s/ April 13, 2000
- ------------------------------ Executive Vice President --------------
ADAM MAHER and Director
<PAGE>
EXHIBIT INDEX
2.1 Agreement and Plan of Merger dated October 7, 1999, by and between
Sunwalker Development, Inc. and ECenter, Inc.
2.2 Agreement and Plan of Merger dated January 31, 2000, by and among
iShopper.com, Inc. and StinkyFeet.com, Inc.
2.3 Stock Exchange Agreement by and among Uniq Studios, Inc., Clayton F.
Kearl, Troy Kearl, Devin O. Kearl, and Dusty Kearl
2.4 Stock Exchange Agreement by and among Totalinet.net, Inc., Richard J.
Scavia and iShopper.com, Inc.
3.1* Certificate of Incorporation for iShopper.com, as amended. filed with
the Form 10-Q dated September 30, 1999
3.2* Amended and Restated Bylaws of iShopper.com, filed with the Form 10-Q
dated September 30, 1999.
10.1 Business Purchase and Stock Acquisition Agreement dated November 1,
1999, by and among Nowseven.com, Inc., Douglas S. Hackett and Robin R.
Hackett, TBE, and iShopper.com, Inc.
10.2 Employment Agreement dated November 22, 1999, between Douglas S.
Hackett and iShopper.com, Inc.
10.3 Memo of Understanding dated December 1, 1999, between iShopper, Inc.
and William E. Chipman, Sr.
10.4 Memo of Understanding dated December 1, 1999, between iShopper, Inc.
and Lance King.
21.1 Subsidiaries of iShopper.com.
24.1 Powers of Attorney for Messrs. Denney, Hackett, Chipman, and Maher.
27 Financial Data Schedule.
* Previously filed and incorporated herein by reference.
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of October 7, 1999, is
entered into by and between Sunwalker Development, Inc., a Nevada corporation,
with offices at 6975 South Union Park Center, Sixth Floor, Midvale, UT 84047,
("Acquiror") and ECenter, Inc., a Utah corporation, having its principal offices
at 350 South 400 East, Suite 304, Salt Lake City, Utah 84111 (the "Company").
WITNESSETH
WHEREAS, the Company desires to merge with and into Acquiror, and
Acquiror desires to merge with the Company, so that Acquiror will be the
Surviving Corporation (as defined below), all upon the terms and subject to the
conditions of this Agreement and in accordance with the laws of the States of
Utah and Nevada; and
WHEREAS, the terms and conditions of the Merger (as defined below), the
mode of carrying the same into effect, the manner of converting the capital
stock of the Company into the right to receive common stock of the Acquiror and
such other terms and conditions as may be required or permitted to be stated in
this Agreement are set forth below; and
WHEREAS, for purposes of treatment under the laws and regulations
governing federal income tax, it is intended by the parties hereto that the
Merger shall qualify as a reorganization within the meaning of Sections
368(a)(1)(A) of the Internal Revenue Code, as amended (the "Code"), and that
this Agreement shall constitute a "Plan of Reorganization" for purposes of
Section 368 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions herein
contained, and subject only to the approval of their respective shareholders,
the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Date (as defined in Section 1.3), the
Company shall be merged with and into Acquiror and the separate corporate
existence of the Company shall thereupon cease (the "Merger"), and Acquiror
shall be the surviving corporation in the Merger (the "Surviving Corporation").
The name of the Surviving Corporation immediately following the Effective Date
shall be changed to "iShopper.com, Inc." The separate corporate existence of the
Surviving Corporation with all its rights, privileges, immunities and franchises
shall continue unaffected by the Merger.
1.2 Filing. Upon fulfillment or waiver of the conditions specified in
this Agreement, and provided that this Agreement has not been terminated in
accordance with the provisions hereof, Acquiror and the Company will cause a
Certificate of Merger in substantially the form of Exhibit A attached hereto
(the "Certificate of Merger") to be executed and filed with the office of the
Division of Corporations and Commercial Code as provided in Section 16-10a-1105
of the Utah Revised Business Corporation Act, and Sections 92A.200 and 92A.230
of the Nevada Revised Statutes, respectively, and a copy of the Certificate of
Merger, certified by the above-mentioned governmental authorities of Utah and
Nevada shall be properly recorded by the Surviving Corporation in accordance
with the applicable provisions of the laws of the States of Utah and Nevada.
1.3 Effective Date of the Merger. The Merger shall be effective at the
time of the later of the completion of filing of the Certificate of Merger with
the offices of the States of Utah and Nevada, referred to in Section 1.2, which
time is herein sometimes referred to as the "Effective Date." The filings of
such Certificate is conditional on final approval of the Plan of Merger by the
shareholders of both Acquiror and Company.
1.4 Effect of the Merger. The Merger shall have the effects set forth
in Sections 16-10a-1106 of the Utah Revised Business Corporation Act and Section
92A.250 of the Nevada Revised Statutes.
1.5 Further Assurances. If at any time after the Effective Date, the
Surviving Corporation shall consider or be advised that any further deeds,
assignments or assurances in law or in any other things are necessary, desirable
or proper to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, the title to any property or rights of the Company acquired or to
be acquired by reason of, or as a result of, the Merger, the parties hereto
agree that Acquiror, the Company and their proper officers shall execute and
deliver all such proper deeds, assignments and assurances in law and shall do
all things necessary, desirable or proper to vest, perfect or confirm title to
such property or rights in the Surviving Corporation and otherwise to carry out
the purpose of this Agreement, and that the proper officers and directors of
Acquiror and the Company are fully authorized in the name of Acquiror and the
Company otherwise to take any and all such actions.
1.6 Articles of Incorporation. At the Effective Date, the Articles of
Incorporation of Acquiror, as amended, shall be the Articles of Incorporation of
the Surviving Corporation, and may be amended from time to time after the
Effective Date as provided by law. From the Effective Date, the Articles of
Incorporation, as the same may be amended from time to time as provided by law,
separate and apart from this Agreement, shall be, and may be separately
certified as, the Articles of Incorporation of the Surviving Corporation.
1.7 Bylaws. The Bylaws of the Acquiror, as in effect immediately prior
to the Effective Date, shall continue unchanged as the Bylaws of the Surviving
Corporation, until the same shall thereafter be altered, amended or repealed in
accordance with Nevada law, the Articles of Incorporation of the Surviving
Corporation or its Bylaws.
1.8 Directors and Officers.
1.8.1 As at the Effective Date, the then-existing Board
member(s) of Acquiror shall submit his/their resignation(s) from all
positions with Acquiror. From and after said resignations, the current
members of the Board of Directors of the Company, as said Board is
constituted immediately prior to the Effective Date, shall be and shall
be appointed to, the Board of the Acquiror, as Surviving Corporation,
each of which member shall thereafter serve until the successor is
elected and qualified, or until his earlier death, resignation or
removal. If on or after the Effective Date a vacancy shall exist in the
Board of Directors of the Surviving Corporation, such vacancy may
thereafter be filled in the manner provided by law and the Bylaws of
the Surviving Corporation. The Boards of Directors of the Company's
wholly-owned subsidiaries, iShopper, Inc. and Outbound Enterprises,
Inc., f/k/a Outbound Acquisitions Corp., shall remain as constituted as
of the Closing Date, as hereafter identified, until their successors
are elected and qualified. A list of said directors is included in
Section 1.8.1 of the Company's Disclosure Statement.
1.8.2 As at the Effective Date, each officer of the Acquiror
shall resign from his/her respective positions with Acquiror and those
officers of the Company holding such positions immediately prior to the
Effective Date shall be and shall be appointed as an officers of the
Surviving Corporation in the same capacity or capacities, until
successors are elected and qualified or until earlier death,
resignation or removal. A list of officers of the Company and of its
subsidiaries is included in Section 1.8.1 of the Company's Disclosure
Statement.
1.9 Conversion.
1.9.1 At the Effective Date, each outstanding share of the
Company's voting common stock (the "Common Stock") (excluding any
treasury shares of the Company), shall be converted into and become the
right to receive twenty-five thousandths (.025) share of the voting
common stock of the Acquiror (the "Acquiror Common Stock"). Pursuant to
the Merger, Acquiror will issue an aggregate total of 125,000 shares of
Acquiror Common Stock to the shareholders of the Company in exchange
for all of their shares of stock of the Company. The shares of Acquiror
to be thus conveyed are post-split shares, after the anticipated and
authorized 1000-to-1 reverse stock split, approved by Acquiror's
shareholders, effective October 8, 1999.
1.9.2 Each treasury share of the Company's Common Stock, if
any, shall be canceled, and no payment shall be made in respect
thereof.
1.10 Surrender of Certificates. As soon as practicable after the
Effective Date, each holder of a certificate or certificates which prior thereto
represented validly issued and outstanding shares of Common Stock may surrender
such certificate or certificates to Acquiror or to its designated transfer
agent, and shall receive in exchange therefore a certificate representing the
number of shares of Acquiror Common Stock into which the shares of the Company's
Common Stock theretofore represented by the surrendered certificate or
certificates shall have been converted pursuant to Section 1.9 hereof. Until so
surrendered, each certificate that at the Effective Date represents issued and
outstanding shares of the Company's Common Stock shall be deemed for all
corporate purposes to evidence ownership of the number of shares of Acquiror
Common Stock into which the shares of Company Common Stock shall have been
converted.
1.11 Closing. The closing for the Merger pursuant to this Agreement
(the "Closing") shall be held at 10:00 a.m., mountain time, on October 7, 1999
(the "Closing Date"), or at such other date and time specified by Acquiror to
the Company on five days' notice, but in no event later than November 30, 1999.
The Closing shall occur at the offices of counsel for Company, Snow, Christensen
& Martineau, 10 Exchange Place, Eleventh Floor, Salt Lake City, Utah, unless
each party hereto agrees in writing to another location.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents, warrants and covenants to Acquiror as
follows:
2.1 Corporate Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Utah and has full corporate power and authority to carry on its business as it
is now being conducted and to own the properties and assets it now owns;
including all subsidiaries. It is duly qualified and licensed to do business as
a corporation in good standing in the State of Utah. To date, it has not sought
qualification or license to do business as a foreign corporation in any other
state or jurisdiction. Copies of the Articles of Incorporation and the Bylaws of
the Company heretofore delivered to Acquiror are complete and correct copies of
such instruments as are presently in effect.
2.2 Capitalization of the Company. As of the date of this Agreement,
the authorized capital stock of the Company consists of 25,000,000 shares of
common stock, no par value per share, of which 5,000,000 shares are issued and
outstanding. The Company has authorized no preferred stock. All issued and
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable. Except as set forth in Section 2.2 of the Disclosure
Schedule attached hereto as Schedule A (the "Disclosure Schedule"), there are no
outstanding (a) securities convertible into or exchangeable for the Company
capital stock; (b) options, warrants or other rights to purchase or subscribe
for capital stock of the Company or securities convertible into or exchangeable
for capital stock of the Company; or (c) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance of any
capital stock of the Company, any such convertible or exchangeable securities or
any such options, warrants or rights.
2.3 Subsidiaries. The Company does not own, directly or indirectly, any
capital stock or other equity securities of any other corporation or have any
direct or indirect equity or ownership interest in any other business, except
its wholly-owned subsidiaries and other entities listed in Section 2.3 of the
Disclosure Schedule.
2.4 Authorization and Related Matters. The Company has full corporate
power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby. The Board of Directors and stockholders of the
Company have taken all action required by law, the Company's Articles of
Incorporation, its Bylaws or otherwise to be taken by them to authorize the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, and this Agreement is a valid and binding
agreement of the Company enforceable in accordance with its terms, except that
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights.
2.5 No Violation. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will violate any
provision of the Articles of Incorporation or Bylaws of the Company, or, except
as specified in Section 2.5 of the Disclosure Schedule, violate, or be in
conflict with, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or cause the acceleration of the
maturity of, any debt or obligation pursuant to, or result in the creation or
imposition of any security interest, lien or other encumbrance upon any property
or assets of the Company under, any agreement or commitment to which the Company
is a party or by which the Company is bound, or to which the property of the
Company is subject, or violate any statute or law or any judgment, decree,
order, regulation or rule of any court or governmental authority.
2.6 Financial Statements. The Company has heretofore delivered to
Acquiror consolidated financial statements of the Company and its subsidiaries
for the 8-month period ended August 31, 1999 (the "Financial Statement"). To the
extent that these statements have not been audited, audited statements will be
furnished to Acquiror within sixty days after the Closing Date. The Financial
Statement and the notes thereto are true, complete and accurate and fairly
present the assets, liabilities and financial condition of the Company as of the
date thereof, and such statement of income and the notes thereto are true,
complete and accurate and fairly present the results of operations for the
period therein referred to all in accordance with generally accepted accounting
principles consistently applied throughout the period involved.
2.7 Title to Properties; Encumbrances. The Company has good, valid and
marketable title to all the properties and assets which it purports to own
(real, personal and mixed, tangible and intangible), including, without
limitation, all the properties and assets reflected in the Financial Statement
and all the properties and assets purchased by the Company since the date of the
Financial Statement, which subsequently acquired properties and assets (other
than short-term investments and inventory) are listed in Section 2.7 of the
Disclosure Schedule. All such properties and assets are free and clear of all
title defects or objections, liens, claims, charges, security interests or other
encumbrances of any nature whatsoever, including, without limitation, leases,
chattel mortgages, conditional sales contracts, collateral security arrangements
and other title or interest retention arrangements, and are not, in the case of
real property, subject to any rights of way, building use restrictions,
exceptions, variances, reservations or limitations of any nature whatsoever
except, with respect to all such properties and assets, (a) liens shown on the
Financial Statement as securing specified liabilities or obligations and liens
incurred in connection with the purchase of property and/or assets, if such
purchase was effected after the date of the Financial Statement, with respect to
which no default exists; (b) minor imperfections of title, if any, none of which
is substantial in amount, materially detract from the value or impair the use of
the property subject thereto, or impair the operations of the Company and which
have arisen only in the ordinary course of business and consistent with past
practice since the date of the Financial Statement; and (c) liens for current
taxes not yet due.
2.8 Leases. Section 2.8 of the Disclosure Schedule contains an accurate
and complete description of the terms of all leases pursuant to which the
Company leases real or personal property. Except as set forth in Section 2.8 of
the Disclosure Schedule, all such leases are valid, binding and enforceable in
accordance with their terms, and are in full force and effect; there are no
existing defaults by the Company thereunder; no event of default has occurred
which (whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute a default thereunder; and all
lessors under such leases have consented (where such consent is necessary) to
the consummation of the transactions contemplated by this Agreement without
requiring modification in the rights or obligations of the lessee under such
leases. Executed counterpart copies of all consents referred to in the preceding
sentence will be delivered to Acquiror at the Closing.
2.9 Bank Accounts. Section 2.9 of the Disclosure Schedule sets forth
the names and locations of all banks, trust companies, savings and loan
associations and other financial institutions at which the Company maintains
safe deposit boxes or accounts of any nature, together with the names of all
persons authorized to draw thereon, make withdrawals therefrom or have access
thereto. At the Closing, the Company will deliver to Acquiror copies of all
records, including all signature and authorization cards, pertaining to such
bank accounts.
2.10 Litigation. Except as set forth in Section 2.10 of the Disclosure
Schedule, there is no action, suit, inquiry, proceeding or investigation by or
before any court or governmental or other regulatory or administrative agency or
commission pending or, to the best knowledge of the Company, threatened against
or involving the Company, or which challenges the validity of this Agreement or
any action taken or to be taken by the Company pursuant to this Agreement or in
connection with the transactions contemplated hereby; and the Company does not
know or have any reason to know of any valid basis for any such action,
proceeding or investigation.
2.11 Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required to be obtained or made by the
Company in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby.
2.12 Consents. Merger is conditional on the consent of the Company's
shareholders. No consent of any other person is necessary to the consummation of
the transactions contemplated hereby, including, without limitation, consents
from parties to contracts, leases or other agreements.
2.13 Brokers and Finders. Neither the Company nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement.
2.14 Employment Agreements. The Company has employment agreements in
effect with each of the persons listed in Section 2.14 of the Disclosure
Schedule.
2.15 Securities Law. The Company has less than 35 non-accredited
investors as shareholders, as defined under the applicable provisions of the
Securities Act of 1933, as amended (the "Securities Act"), and the regulations
promulgated thereunder.
2.16 No Covenant as to Tax Consequences. It is expressly understood and
agreed, despite the statement of intent of the parties set forth above, that
neither the Company nor its officers or agents has made any warranty or
agreement, expressed or implied, as to the tax consequences of the transactions
contemplated by this Agreement or the tax consequences of any action pursuant to
or growing out of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents, warrants and covenants to the Company as
follows:
3.1 Corporate Organization. Acquiror is a corporation dully organized,
validly existing and in good standing under the laws of the State of Nevada and
has full corporate power and authority to carry on its business as it is now
being conducted and to own the properties and assets it now owns; including all
subsidiaries. It is duly qualified and licensed to do business as a corporation
in good standing in the State of Nevada. To date, it has not sought
qualification or license to do business as a foreign corporation in any other
state or jurisdiction. Copies of the Articles of Incorporation and the Bylaws of
the Acquiror heretofore delivered to the Company are complete and correct copies
of such instruments as are presently in effect.
3.2 Capitalization. As of the date of this Agreement, the authorized
capital stock of Acquiror consists of 100,000,000 shares of common stock, par
value $.001 per share, of which approximately 78,059,156 shares are issued and
outstanding as of October 6, 1999. All such issued and outstanding shares have
been duly authorized and validly issued and are fully paid and nonassessable.
The Acquiror has authorized no preferred stock. All issued and outstanding
shares of capital stock of the Acquiror are validly issued, fully paid and
nonassessable. Except as set forth in Section 3.2 of the Disclosure Schedule
attached hereto as Schedule A (the "Disclosure Schedule"), there are no
outstanding (a) securities convertible into or exchangeable for the Acquiror
capital stock; (b) options, warrants or other rights to purchase or subscribe
for capital stock of the Acquiror or securities convertible into or exchangeable
for capital stock of the Acquiror; or (c) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance of any
capital stock of the Acquiror, any such convertible or exchangeable securities
or any such options, warrants or rights. Notwithstanding the foregoing, Acquiror
has disclosed, and Company acknowledges, Acquiror's plans, by a proposed
amendment to its Articles of Incorporation, to effect a 1000-to-1 reverse stock
split. Shares committed and to be issued to Company's shareholders in
consideration of this merger are to be post-split shares.
3.3 Subsidiaries. The Acquiror does not own, directly or indirectly,
any capital stock or other equity securities of any other corporation or have
any direct or indirect equity or ownership interest in any other business,
except its wholly-owned subsidiaries and other entities listed in Section 3.3 of
the Acquiror's Disclosure Schedule.
3.4 Authorization and Related Matters. The Acquiror has full corporate
power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby, subject only to shareholder approval. The
Board of Directors and stockholders of the Acquiror have taken all action
required by law, the Acquiror's Articles of Incorporation, its Bylaws or
otherwise to be taken by them to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and this
Agreement is a valid and binding agreement of the Acquiror enforceable in
accordance with its terms, except that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights.
3.5 No Violation. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will violate any
provision of the Articles of Incorporation or Bylaws of the Acquiror, or, except
as specified in Section 3.5 of the Disclosure Schedule, violate, or be in
conflict with, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or cause the acceleration of the
maturity of, any debt or obligation pursuant to, or result in the creation or
imposition of any security interest, lien or other encumbrance upon any property
or assets of the Acquiror under, any agreement or commitment to which the
Acquiror is a party or by which the Acquiror is bound, or to which the property
of the Acquiror is subject, or violate any statute or law or any judgment,
decree, order, regulation or rule of any court or governmental authority.
3.6 Financial Statements. The Acquiror has heretofore delivered to the
Company an audited financial statement of the Acquiror and its subsidiaries for
the year ended December 31, 1998 (the "Financial Statement"). The Financial
Statement and the notes thereto are true, complete and accurate and fairly
present the assets, liabilities and financial condition of the Acquiror as of
the date thereof, and such statement of income and the notes thereto are true,
complete and accurate and fairly present the results of operations for the
period therein referred to all in accordance with generally accepted accounting
principles consistently applied throughout the period involved.
3.7 Title to Properties; Encumbrances. The Acquiror has good, valid and
marketable title to all the properties and assets which it purports to own
(real, personal and mixed, tangible and intangible), including, without
limitation, all the properties and assets reflected in the Financial Statement
and all the properties and assets purchased by the Acquiror since the date of
the Financial Statement, which subsequently acquired properties and assets
(other than short-term investments and inventory) are listed in Section 3.7 of
the Disclosure Schedule. All such properties and assets are free and clear of
all title defects or objections, liens, claims, charges, security interests or
other encumbrances of any nature whatsoever, including, without limitation,
leases, chattel mortgages, conditional sales contracts, collateral security
arrangements and other title or interest retention arrangements, and are not, in
the case of real property, subject to any rights of way, building use
restrictions, exceptions, variances, reservations or limitations of any nature
whatsoever except, with respect to all such properties and assets, (a) liens
shown on the Financial Statement as securing specified liabilities or
obligations and liens incurred in connection with the purchase of property
and/or assets, if such purchase was effected after the date of the Financial
Statement, with respect to which no default exists; (b) minor imperfections of
title, if any, none of which is substantial in amount, materially detract from
the value or impair the use of the property subject thereto, or impair the
operations of the Acquiror and which have arisen only in the ordinary course of
business and consistent with past practice since the date of the Financial
Statement; and (c) liens for current taxes not yet due.
3.8 Leases. Section 3.8 of the Disclosure Schedule contains an accurate
and complete description of the terms of all leases pursuant to which the
Acquiror leases real or personal property. Except as set forth in Section 3.8 of
the Disclosure Schedule, all such leases are valid, binding and enforceable in
accordance with their terms, and are in full force and effect; there are no
existing defaults by the Acquiror thereunder; no event of default has occurred
which (whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute a default thereunder; and all
lessors under such leases have consented (where such consent is necessary) to
the consummation of the transactions contemplated by this Agreement without
requiring modification in the rights or obligations of the lessee under such
leases. Executed counterpart copies of all consents referred to in the preceding
sentence will be delivered to Acquiror at the Closing.
3.9 Bank Accounts. Section 3.9 of the Disclosure Schedule sets forth
the names and locations of all banks, trust companies, savings and loan
associations and other financial institutions at which the Acquiror maintains
safe deposit boxes or accounts of any nature, together with the names of all
persons authorized to draw thereon, make withdrawals therefrom or have access
thereto. At the Closing, the Acquiror will deliver to Acquiror copies of all
records, including all signature and authorization cards, pertaining to such
bank accounts.
3.10 No Undisclosed Liabilities. Acquiror does not have any liabilities
or obligations of any nature (absolute, accrued, contingent or otherwise) which
were not fully reflected or reserved against in the Acquiror Financial
Statement, except for liabilities and obligations incurred in the ordinary
course of business and consistent with past practice since the date thereof; and
the reserves reflected in the Acquiror Financial Statement are adequate,
appropriate and reasonable.
3.11 Litigation. Except as set forth in Section 3.11 of the Disclosure
Schedule, there is no action, suit, inquiry, proceeding or investigation by or
before any court or governmental or other regulatory or administrative agency or
commission pending or, to the best knowledge of the Acquiror, threatened against
or involving the Acquiror, or which challenges the validity of this Agreement or
any action taken or to be taken by the Acquiror pursuant to this Agreement or in
connection with the transactions contemplated hereby; and the Acquiror does not
know or have any reason to know of any valid basis for any such action,
proceeding or investigation.
3.12 Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required to be obtained or made by the
Acquiror in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby.
3.13 Consents. Except for pending approval by Acquiror's shareholders,
no consent of any person is necessary to the consummation of the transactions
contemplated hereby, including, without limitation, consents from parties to
contracts, leases or other agreements.
3.14 Brokers and Finders. Neither the Acquiror nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement.
3.14 Employment Agreements. The Acquiror has employment agreements in
effect with each of the persons listed in Section 3.14 of the Disclosure
Schedule.
3.15 Securities Law. Acquiror has complied with all of the applicable
provisions of the Securities Act and applicable state securities laws in
connection with its raising of funds for Acquiror and has no knowledge of any
violation thereof.
3.16 Legality of Shares to be Issued. The shares of common stock of
Acquiror to be delivered and exchanged for shares of common stock of the
Company, when so delivered, will have been duly and validly authorized and
issued by Acquiror and will be fully paid and nonassessable.
3.17 No Covenant as to Tax Consequences. It is expressly understood and
agreed, despite the statement of intent of the parties set forth above, that
neither Acquiror nor its officers or agents has made any warranty or agreement,
expressed or implied, as to the tax consequences of the transactions
contemplated by this Agreement or the tax consequences of any action pursuant to
or growing out of this Agreement.
ARTICLE IV
CONDITIONS TO THE COMPANY'S OBLIGATIONS
Each and every obligation of the Company under this Agreement to be
performed on or before the Closing shall be subject to the satisfaction, on or
before the Closing, of each of the following conditions, unless waived in
writing by the Company:
4.1 Representations and Warranties. The representations and warranties
of Acquiror contained in Article III hereof, the Disclosure Schedule and in all
certificates and other documents delivered and to be delivered by Acquiror to
the Company or its representatives pursuant hereto or in connection with the
transactions contemplated hereby shall be in all material respects true and
accurate as of the date when made and as and as of the Closing as though such
representations and warranties were made at and as of such date, except for
changes expressly permitted or contemplated by the terms of this Agreement.
4.2 Performance. Acquiror shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with by it on or prior to the Closing.
4.3 Shareholder Approval. If and to the extent required to do so by
applicable and governing state law, the Company's and Acquiror's shareholders
shall have approved the transactions contemplated by this Agreement in the
manner required by applicable state law.
4.4 No Litigation or Governmental Proceeding. No suit, action,
investigation, inquiry or other proceeding before any court or by or before any
governmental body or other person or legal or administrative proceeding shall
have been commenced or threatened against Acquiror, its subsidiaries or
affiliates, or its shareholders, officers or directors, or any of them, seeking
to restrain, prevent or change the transactions contemplated hereby, or
questioning the validity or legality of any such transactions, or seeking
damages in connection with any of such transactions.
4.5 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement by Acquiror and all documents
incident thereto shall be reasonably satisfactory to the Company and its counsel
and the Company shall have received a true, correct and complete copy of all
such documents and other evidence as the Company or its counsel may reasonably
request in order to establish the consummation of such transactions and the
taking of all proceedings in connection therewith.
4.6 Employment Agreements. Acquiror shall have assumed the employment
agreements between the Company and/or its subsidiaries, and each of those
employees identified in the Section 2.14 of the Company's Disclosure Statement.
4.7 Securities Laws. Acquiror shall prepare and distribute a
subscription agreement or private placement memorandum to all of the Company's
shareholders prior to the holding of the Closing of the transactions
contemplated by this Agreement in compliance with Regulation D issued pursuant
to the Securities Act of 1933, as amended.
4.8 Certificates. Acquiror shall have furnished the Company with such
certificates of their officers and others to evidence compliance with the
conditions set forth in this Article IV as may be reasonably requested by the
Company.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF ACQUIROR
Each and every obligation of Acquiror under this Agreement to be
performed on or before the Closing shall be subject to the satisfaction, on or
before the Closing, of each of thee following conditions, unless waived in
writing by Acquiror:
5.1 Representations and Warranties True. The representations and
warranties contained in Article II hereof, the Disclosure Schedule and in all
certificates and other documents delivered and to be delivered by the Company to
Acquiror or their representatives pursuant hereto or in connection with the
transactions contemplated hereby shall be in all material respects true,
complete and accurate as of the date when made and at and as of the Closing Date
as though such representations and warranties were made at and as of such date,
except for changes expressly permitted or contemplated by the terms of this
Agreement.
5.2 Performance. The Company shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with by it on or prior to the Closing.
5.3 Shareholder Approval. The Company's and Acquiror's shareholders
shall have approved the transactions contemplated by this Agreement in the
manner required by applicable state law.
5.4 No Litigation or Governmental Proceeding. No suit, action,
investigation, inquiry or other proceeding before any court or by or before any
governmental body or other person or legal or administrative proceeding shall
have been commenced or threatened against the Company, its subsidiaries or
affiliates, or its shareholders, officers or directors, or any of them, seeking
to restrain, prevent or change the transactions contemplated hereby, or
questioning the validity or legality of any such transactions, or seeking
damages in connection with any of such transactions.
5.5 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement by the Company and all documents
incident thereto shall be reasonably satisfactory to Acquiror and its counsel
and Acquiror shall have received a true, correct and complete copy of all such
documents and other evidence as Acquiror or its counsel may reasonably request
in order to establish the consummation of such transactions and the taking of
all proceedings in connection therewith.
5.6 Certificates. The Company shall have furnished Acquiror with such
certificates of their officers and others to evidence compliance with the
conditions set forth in this Article V as may reasonably be requested by
Acquiror.
ARTICLE VI
CONDUCT OF THE COMPANY'S BUSINESS PENDING THE EFFECTIVE DATE
Pending the Closing, and from and after the Closing, until the
Effective Date, and except as otherwise expressly consented to or approved by
Acquiror in writing:
6.1 Regular Course of Business. The Company will carry on its business
diligently and substantially in the same manner as heretofore conducted, and the
Company shall not incur any liabilities, except in the ordinary course of
business
6.2 Amendments. No change or amendment shall be made in the Articles of
Incorporation or Bylaws of the Company, except as such changes may be approved
by Acquiror.
6.3 Capital Changes; Dividends; Redemptions. The Company will not issue
or sell any shares of its capital stock or other securities, acquire directly or
indirectly, by redemption or otherwise, any such capital stock, reclassify or
split-up any such capital stock, declare or pay any dividends thereon in cash,
securities or other property or make any other distribution with respect
thereto, or grant or enter into any options, warrants, calls or commitments of
any kind with respect thereto.
6.4 Subsidiaries. The Company will not organize any new subsidiary,
acquire any capital stock or other equity securities of any corporation or
acquire any equity or ownership interest in any business, except to complete the
acquisition of Outbound Enterprises, Inc., to the extent not yet closed, under
terms disclosed to Acquiror and pursuant to that form of Agreement and Plan of
Merger attached hereto as Exhibit B.
6.5 Organization. The Company shall use its best efforts to preserve
its corporate existence and business organization intact, to keep its officers
and key employees available to Acquiror, and to preserve for Acquiror its
relationships with licensors, suppliers, distributors, customers and others
having business relations with it and/or with its subsidiaries.
ARTICLE VII
CONDUCT OF ACQUIROR'S BUSINESS PENDING THE EFFECTIVE DATE
Pending the Closing, and from and after the Closing, until the
Effective Date, and except as otherwise expressly consented to or approved by
the Company in writing:
7.1 Regular Course of Business. The Acquiror will carry on its business
diligently and substantially in the same manner as heretofore conducted, and the
Acquiror shall not incur any 1iabilities, except in the ordinary course of
business
7.2 Amendments. No change or amendment shall be made in the Articles of
Incorporation or Bylaws of the Acquiror.
7.3 Capital Changes; Dividends; Redemptions. The Acquiror will not
issue or sell any shares of its capital stock or other securities, acquire
directly or indirectly, by redemption or otherwise, any such capital stock,
reclassify or split-up any such capita1 stock, declare or pay any dividends
thereon in cash, securities or other property or make any other distribution
with respect thereto, or grant or enter into any options, warrants, calls or
commitments of any kind with respect thereto.
7.4 Subsidiaries. The Acquiror will not organize any new subsidiary,
acquire any capital stock or other equity securities of any corporation or
acquire any equity or ownership interest in any business, except to cooperate in
the Company's acquisition of Outbound Enterprises, Inc., to the extent not yet
closed, under terms disclosed to Acquiror and pursuant to that form of Agreement
and Plan of Merger between ECenter, Inc., Outbound Acquisitions Corp., and
Outbound Enterprises, Inc., attached hereto as Exhibit B.
7.5 Organization. The Acquiror shall use its best efforts to preserve
its corporate existence and business organization intact and to preserve its
existing relationships with licensors, suppliers, distributors, customers and
others having business relations with it or with its subsidiaries.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
8.1 Survival of Terms. All of the terms and conditions of this
Agreement, together with the warranties, representations and covenants herein
(including but not limited to those specifically set forth under Article IX
below), or in any instrument or document delivered or to be delivered pursuant
to this Agreement, shall survive the execution of this Agreement and the Closing
notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto, for a period of six (6) years; provided, however, that (a)
the agreements and covenants set forth in this Agreement shall survive and
continue until all obligations set forth therein shall have been performed and
satisfied; and (b) all representations and warranties shall survive and continue
for, and all claims with respect thereto shall be made prior to the end of
twenty-four (24) months from the Effective Date.
8.2 Indemnification by the Company. Subject to Section 8.1 hereof,
Acquiror and its respective officers, directors, employees, shareholders,
counsel, accountants and subsidiaries shall be indemnified and held harmless
unconditionally by the Company at all times after the date of this Agreement,
against and in respect of any and all damages, losses, claims, costs or expenses
resulting from, or in any respect of, any misrepresentation, breach of warranty,
or nonfulfillment of any obligation on the part of the Company under this
Agreement, any document relating hereto or thereto or contained in any Schedule
to this Agreement or from any misrepresentation in or omission from any
certificate, schedule, or other instrument furnished by the Company to Acquiror
hereunder; provided, however, that the Company shall not have any obligation to
indemnify the parties set forth in this Section unless such parties' damages,
losses, claims, costs or expenses covered by the indemnification hereunder
exceed $25,000 in the aggregate and Acquiror makes a claim for indemnification
in writing by reason thereof prior to the date one year from the Effective Date,
and the Company shall not have any liability hereunder in excess of a total of
$50,000.
8.3 Indemnification by Acquiror. Subject to Section 8.1 hereof, the
Company and its respective officers, directors, employees, shareholders,
counsel, accountants and subsidiaries shall be indemnified and held harmless
unconditionally by Acquiror at all times after the date of this Agreement,
against and in respect of any and all damages, losses, claims, costs or expenses
resulting from, or in any respect of, any misrepresentation, breach of warranty,
or nonfulfillment of any obligation on the part of Acquiror under this
Agreement, any document relating hereto or thereto or contained in any Schedule
to this Agreement or from any misrepresentation in or omission from any
certificate, schedule, or other instrument furnished by Acquiror to the Company
hereunder; provided, however, that Acquiror shall not have any obligation to
indemnify the parties set forth in this Section unless such parties' damages,
losses, claims, costs or expenses covered by the indemnification hereunder
exceed $25,000 in the aggregate and the Company makes a claim for
indemnification in writing by reason thereof prior to the date one year from the
Effective Date, and Acquiror shall not have any liability hereunder in excess of
a total of $50,000.
8.4 Third-Party Claims.
8.4.1 Except as otherwise provided in this Agreement, the
following procedures shall be applicable with respect to
indemnification for third-party claims. Promptly after receipt by the
party seeking indemnification hereunder (hereinafter referred to as the
"Indemnitee") of notice of the commencement of any action or the
assertion of any claim, liability or obligation by a third party
(whether by legal process or otherwise), against which claim, liability
or obligation the other party to this Agreement (hereinafter the
"Indemnitor") is, or may be, required under this Agreement to indemnify
such Indemnitee, the Indemnitee will, if a claim thereon is to be, or
may be, made against the Indemnitor, notify the Indemnitor in writing
of the commencement or assertion thereof and give the Indemnitor a copy
of such claim, process and all loyal pleadings. The Indemnitor shall
have the right to participate in the defense of such action with
counsel of reputable standing. The Indemnitor shall have the right to
assume the defense of such action unless such action (i) may result in
injunctions or other equitable remedies in respect of the Indemnitee or
its business; (ii) may result in liabilities which, taken with other
than existing claims under this Article VIII, would not be fully
indemnified hereunder; or (iii) may have an adverse impact on the
business or financial condition of the Indemnitee after the Effective
Date (including an effect on the tax liabilities, earnings or ongoing
business relationships of the Indemnitee). The Indemnitor and the
Indemnitee shall cooperate in the defense of such claims. In the case
that the Indemnitor shall assume or participate in the defense of such
proceeding as provided herein, the Indemnitee shall make available to
Indemnitor all relevant records and take such other action and sign
such documents as are necessary to defend such proceeding in a timely
manner. If the Indemnitee shall be required by judgment or a settlement
agreement to pay any amount in respect of any obligation or liability
against which the Indemnitor has agreed to indemnify the Indemnitee
under this Agreement, the Indemnitor will promptly reimburse the
Indemnitee in an amount equal to the amount of such payment plus all
reasonable expenses (including reasonable legal fees and expenses)
incurred by such Indemnitee in connection with such obligation or
liability subject to Article VIII hereof.
8.5 Prior to paying or settling any claim against which an Indemnitor
is, or may be, obligated under this Agreement to indemnify an Indemnitee, the
Indemnitee must first supply the Indemnitor with a copy of a final court
judgment or decree holding the Indemnitee liable on such claim or other
operative instrument, and must first receive the written approval of the terms
and conditions of such settlement from the Indemnitor. An Indemnitor or
Indemnitee shall have the right to settle any claim against it, subject to the
prior written approval of the other, which approval shall not be unreasonably
withheld or delayed.
8.6 The Indemnitee shall have the right to employ its own counsel in
any case, but the fees and expenses of such counsel shall be at the expense of
the Indemnitee unless (i) the employment of such counsel shall have been
authorized in writing by the Indemnitor in connection with the defense of such
action or claim, (ii) the Indemnitor shall not have employed counsel in the
defense of such action or claim, or (iii) such Indemnitee shall have reasonably
concluded that there may be defenses available to it which are contrary to, or
inconsistent with, those available to the Indemnitor, in any of which events
such fees and expenses of not more than one additional counsel for the
indemnified parties shall be borne by the Indemnitor.
ARTICLE IX
COVENANTS
9.1 Change of Name. If not earlier effected by Acquiror, upon the
Closing Date, or as soon thereafter as is reasonably possible, Acquiror will
cause its name to be changed to iShopper.com, Inc. The parties agree to take all
steps as are necessary or appropriate to effectuate such name change, including
the acquisition from Company or its subsidiaries written confirmation of the
royalty-free rights and license to use said name.
9.2. Limitations of Subsequent Corporate Actions. It is expressly
understood and agreed that Acquiror, and its affiliates, will take all steps
necessary to insure that, from the date hereof and prior to the date of Closing,
and for a period of eighteen months after the date of Closing, there shall be no
reverse split of Acquiror's stock and that the assets transferred to Acquiror as
a part of Acquiror's purchase of the Company, shall remain in place as part of
the business operations.
ARTICLE X
SECURITIES ACT PROVISIONS
10.1 Notice of Limitation Upon Disposition. Each party is aware that
neither the shares of the Company nor the shares of Acquiror, for which said
shares may be exchanged, upon and after Closing, will have been registered
pursuant to the Securities Act of 1933, as amended and, therefore, under current
interpretations and applicable rules, the shareholders will probably have to
retain such shares for a period of at least one year and at the expiration of
such one-year period, sales may be confined to brokerage transactions of limited
amounts requiring certain notification filings with the Securities and Exchange
Commission and such disposition may be available only if the Acquiror is current
in its filings with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, or other public disclosure requirements, and the other
limitations imposed thereby on the disposition of shares of the Acquiror.
Additionally, "affiliates," if any, owning shares will be subject to additional
restrictions limiting sales.
10.2 Limited Public Market for Shares. The Company and its shareholders
acknowledge that the common shares being issued pursuant to this Agreement
currently have a limited public market in which the shares may be liquidated and
there is no assurance that such public market will grow or develop.
ARTICLE XI
TERMINATION AND ABANDONMENT
This Agreement may be terminated and the transaction contemplated
hereby may be abandoned without liability on the part of any party to any other,
at any time before the closing date, or may be rescinded within thirty (30) days
after closing, as follows:
(1) By mutual consent of Acquiror and all of the Company's
Shareholders, as those Shareholders exist as of the date of Closing;
(2) By the Company if any of the conditions provided for in Article IV
of this Agreement have not been met and have not been waived in writing by the
Company.
(3) By Acquiror if any of the conditions provided for in Article V of
this Agreement have not been met and have not been waived in writing by
Acquiror.
In the event of termination and abandonment by any party as above
provided in this Article, or in the event of rescission as provided herein, the
party seeking such termination, abandonment or rescission shall provide written
notice thereof to the other party. In such an event, each party shall pay its
own expenses incidental to preparation for the consummation of this Agreement
and of the transactions contemplated hereunder.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Notices. All notices or other communications required or permitted
to be given pursuant to this Agreement shall be in writing and shall be
considered as, duly given on (a) the date of delivery, if delivered in person,
by nationally recognized overnight delivery service or by facsimile or (b) three
days after mailing if mailed from within the continental United States by
registered or certified mail, return receipt requested to the party entitled to
receive the same. Notices to the Company shall be addressed as follows:
12.1.1 If to the Company, to ECenter, Inc., 350 South 400
East, Suite 304, Salt Lake City, Utah 84111, attn: Adam Maher,
President, with a copy to David W. Slaughter, Esq., Snow, Christensen &
Martineau, or to such other person and place as Company shall furnish
to Acquiror in writing..
12.1.2 If to Acquiror, to Sunwalker Development, Inc., 6975
South Union Park Center, Sixth Floor, Midvale, UT 84047, with a copy to
Nathan Drage, Esq., 6975 South Union Park Center, Sixth Floor, Midvale,
UT 84047, or to such other person and place as Acquiror shall furnish
to Company in writing.
Notice of any new address shall be considered to be effective for
purposes of all notices thereafter as of the 10th day after the notice providing
said new address.
12.2 Announcements. Announcements, including press releases, by either
Acquiror or the Company, concerning the transaction provided for in this
Agreement, shall be subject to the approval of the other party in all essential
respects, except that neither party shall be required to seek the approval of
the other of statements or other information which each party may submit or make
available to its shareholders.
12.2 Governing Law and Venue. This Agreement and the rights of the
parties hereunder shall be governed by and construed in accordance with the laws
of the State of Utah, without regard to its conflicts of law principles. All
parties hereto (a) agree that any legal suit, action or proceeding arising out
of or relating to this Agreement shall be instituted only in a federal or state
court in Salt Lake County, Utah; (b) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding; and (c) irrevocably submit to the exclusive jurisdiction of such
federal or state court in Utah in any such suit, action or proceeding, but such
consent shall not constitute a general appearance or apply or be available to
any other person who is not a party to this Agreement. All parties hereto agree
that the mailing of any process in any suit, action or proceeding in accordance
with the notice provisions of this Agreement shall constitute personal service
thereof.
12.3 Entire Agreement: Waiver of Breach. This Agreement constitutes the
entire agreement among the parties and supersedes any prior agreement or
understanding among them with respect to the subject matter hereof. This
Agreement may not be modified or amended in any manner other than as provided
herein, and no waiver of any breach or condition of this Agreement shall be
deemed to have occurred unless such waiver is in writing, signed by the party
against whom enforcement is sought. No waiver shall be claimed to be a waiver of
any subsequent breach or condition of a like or different nature.
12.4 Binding Effect; Assignability. This Agreement and all the terms
and provisions hereof shall be binding upon and shall inure to the benefit of
the parties and their respective heirs, successors and permitted assigns. This
Agreement and the rights of the parties hereunder shall not be assigned except
with the written consent of all parties hereto.
12.5 Severability. If any provision of this Agreement shall be held
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
were not contained herein.
12.6 Restrictive Legend. Each certificate representing shares of
Acquiror Common Stock shall bear the following legend in addition to such other
restrictive legends as may be required by law or as mutually agreed by all
parties hereto:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws, and no sale or transfer thereof may be
effected without an effective registration statement or an opinion of
counsel for the holder, satisfactory to the company, that such
registration is not required under the act and any applicable state
securities laws.
12.7 Amendments. This Agreement may nor be amended except in a writing
signed by all of the parties hereto.
12.8 Captions. Captions contained in this Agreement are inserted only
as a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision hereof.
12.9 Number and Gender. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in either the masculine, the
feminine or the neuter gender shall include the masculine, feminine and neuter.
12.10 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. In addition, this Agreement may contain
more than one counterpart of the signature page and this Agreement may be
executed by the affixing of such signature pages executed by the parties to one
copy of the Agreement; all of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
12.11 Termination of Agreement. All parties hereto agree to use their
best efforts to fulfill the requirements of Articles IV and V and all other
agreements contained herein as soon as practicable. If any condition to the
completion of the transactions contemplated in this Agreement is not fulfilled
or waived on or prior to November 30, 1990 (which date shall be automatically
extended for such additional time as is necessary for the Company to comply in
good faith with Section 4.3 hereof), this Agreement shall be null and void and
have no further effect and neither party shall have any further liability to the
other.
12.12 Expenses: Transfer Taxes, Etc. Whether or not the transaction
contemplated by this Agreement shall be consummated, the Company agrees that all
fees and expenses incurred by it in connection with this Agreement shall be
borne by it and Acquiror agrees that all fees and expenses incurred by it in
connection with this Agreement shall be borne by it, including, without
limitation, all fees and expenses of counsel and accountants.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SUNWALKER, Inc.
By:_______________________________________
Robert Kropf
Its President
ECenter, Inc.
By:_______________________________________
Adam Maher
Its President
<PAGE>
SCHEDULE A
DISCLOSURE SCHEDULE
1.8.1 The following are officers and directors of ECenter, Inc.:
Adam Maher President, Chief Executive Officer, and Director
William E. Chipman (Sr.) Chief Financial Officer
Tom Maher Chief Operating Officer/Secretary
George Denney Director
The following are officers and directors of Outbound Enterprises, Inc., a
wholly-owned subsidiary of ECenter, Inc.:
Adam Maher President, Director
Marek Shon CEO, Director
Steve Stoddard V.P. Marketing, Director
The following are officers and directors of iShopper, Inc., a wholly-owned
subsidiary of Ecenter, Inc.:
Adam Maher President, Director
George Denney Director
2.2 On the acquisition of Outbound Enterprises, Inc., the Company is
contractually bound to issue Incentive Shares to those who, immediately prior to
closing, were Shareholders of Outbound Enterprises, Inc., as and to the extent
that the conditions for the issuance of such shares are satisfied, as outlined
in Section 1.4 of the Agreement and Plan of Merger among ECenter, Inc., Outbound
Acquisitions Corp., Outbound Enterprises, Inc., and the shareholders of Outbound
Enterprises, Inc., furnished and attached as Exhibit B to this Agreement and
Plan of Merger.
2.3 As of the Date of Closing, the Company has no ownership interest in any
corporation or business entity other than the following, which are or, by the
Closing Date, will be wholly-owned subsidiaries: iShopper, Inc.; Outbound
Enterprises, Inc.
2.5 None
2.7 None
2.8
Office Lease - 400 East 350 South, #304, Salt Lake City, Utah 84111
2.9 ECenter bank accounts:
Wells Fargo Bank
Foothill Branch, Salt Lake City, Utah
Acct: 0760555151
First Security Bank (Outbound Sweep Account)
American Stores Branch, Salt Lake City, Utah
Acct: 2491004285
2.10 None
2.14 The Company, directly or through its subsidiaries, has agreements of
employment with the following:
Adam Maher
Marek Shon
Steve Stoddard
Tom Maher
<PAGE>
DISCLOSURES OF SUNWALKER DEVELOPMENT, INC.
1.8 The following are officers and directors of Sunwalker Development, Inc.:
Robert Kropf, President and sole director
3.2 Pending stock rights, options, etc.
Sunwalker has granted options to various individuals and entities, including
consultants and professionals, of up to 2,750,000 shares, exercisable at a rate
of $.01 per share, post-reverse-split. There is currently no established market
or trading value for Sunwalker's stock. As of the closing date, none of those
options has been exercised.
3.3 As of the Date of Closing, the Company has no ownership interest in any
corporation or business entity other than the following, which are or, by the
Closing Date, will be wholly-owned subsidiaries:
3.5 None
3.7 None
3.8 None
3.9 None
3.10 None
3.14 The Company, directly or through its subsidiaries, has agreements of
employment with the following:
None
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of this 31st day of
January, 2000, by and among iShopper.com, Inc., a Nevada corporation
(hereinafter the "Acquiror"), StinkyFeet.com, Inc., a Utah corporation
(hereinafter the "Company") David Barrett, Rob Davis, Matt Parr, Nathan Drage
and Abel Davis, the shareholders of the Company (individually, a "Shareholder"
and collectively, the "Shareholders"), and SF Acquisition Corp., a Utah
corporation ("Newco"), a wholly-owned subsidiary of Acquiror.
WITNESSETH:
WHEREAS, Newco is a wholly-owned subsidiary of Acquiror; and
WHEREAS, the Company wishes to merge with and into Newco, and Acquiror
desires to merge Newco with the Company, so that Newco will be the Surviving
Corporation (as defined below), all upon the terms and subject to the conditions
of this Agreement and in accordance with the laws of the State of Utah;
WHEREAS, in connection with said merger, each Shareholder is willing to
surrender all of the issued and outstanding common shares of the Company owned
by such Shareholder in exchange for the right to receive certain common shares
of the Acquiror, as detailed herein, and further subject to the covenants and
undertakings of the parties hereto; and
WHEREAS, the terms and conditions of the Merger (as defined below), the
mode of carrying the same into effect, the manner of converting the capital
stock of the Company into the right to receive common shares of the Acquiror and
such other terms and conditions as may be required or permitted to be stated in
this Agreement are set forth below; and
WHEREAS, for Federal income tax purposes, it is intended by the parties
hereto that the Merger shall qualify as a reorganization within the meaning of
Sections 368(a)(1)(A) and (a)(2)(D) of the Internal Revenue Code of 1986, as
amended (the "Code"), and that this Agreement shall constitute a "Plan of
Reorganization" for purposes of Section 368 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions set forth
herein, the parties mutually covenant and agree with each other as follows:
ARTICLE I
THE MERGER
1.1 Company/Newco Merger. On the Effective Date (as defined in Section
1.3), the Company shall be merged with and into Newco and the separate corporate
existence of the Company shall thereupon cease (said event hereafter referred to
as the "Merger"). Newco shall be the surviving corporation in the Merger (the
"Surviving Corporation). The name of the Surviving Corporation immediately
following the Effective Date shall be "StinkyFeet.com, Inc." The separate
corporate existence of the Surviving Corporation with all its rights,
privileges, immunities and franchises shall continue unaffected by the Merger.
1.2 Filing. Simultaneously with the execution hereof, Acquiror, Newco
and the Company will cause Articles of Merger in substantially the form of
Exhibit A attached hereto (the "Articles of Merger") to be executed and filed
with the office of the Utah Division of Corporations and Commercial Code as
provided in Section 16-10a-1105 of the Utah Code (Revised Business Corporation
Act).
1.3 Effective Date of the Merger. The Merger shall be effective at the
time of the filing of the Articles of Merger with the offices of the Utah
Division of Corporations and Commercial Code, referred to in Section 1.2, which
time is herein sometimes referred to as the "Effective Date."
1.4 Effect of the Merger. The Merger shall have the effects set forth
in Sections 16-10a-1106 of the Revised Business Corporation Act.
1.5 Further Assurances. If at any time after the Effective Date, any
party hereto shall consider or be advised that any further deeds, assignments or
assurances in law or in any other things are necessary, desirable or proper to
vest, perfect or confirm, of record or otherwise, in the Surviving Corporation,
the title to any property or rights of the Company acquired or to be acquired by
reason of, or as a result of, the Merger, the parties hereto agree that
Acquiror, the Surviving Corporation, the Company and their proper officers shall
execute and deliver all such proper deeds, assignments and assurances in law and
shall do all things necessary, desirable or proper to vest, perfect or confirm
title to such property or rights in the Surviving Corporation and otherwise to
carry out the purpose of this Agreement, and that the proper officers and
directors of Acquiror, Surviving Corporation and the Company are fully
authorized in the name of Acquiror, Surviving Corporation and the Company
otherwise to take any and all such actions.
1.6 Articles of Incorporation. At the Effective Date, the Articles of
Incorporation of Newco, as amended consistent with this Agreement, shall be the
Articles of Incorporation of the Surviving Corporation, and may be amended from
time to time after the Effective Date as provided by law.
1.7 Bylaws. The Bylaws of Newco, as in effect immediately prior to the
Effective Date, shall continue unchanged as the Bylaws of the Surviving
Corporation, until the same shall thereafter be altered, amended or repealed in
accordance with Utah law, the Articles of Incorporation of the Surviving
Corporation or its Bylaws.
1.8 Directors and Officers.
1.8.1 From and after the Effective Date, each director of
Newco immediately prior to the Effective Date shall continue as a
director of the Surviving Corporation, until his successor is elected
and qualified, or until his earlier death, resignation or removal. If
on or after the Effective Date an vacancy shall exist in the Board of
Directors of the Surviving Corporation, such vacancy may thereafter be
filled in the manner provided by law and the Bylaws of the Surviving
Corporation.
1.8.2 From and after the Effective Date, each officer of Newco
immediately prior to the Effective Date shall continue as an officer of
the Surviving Corporation, in the same capacity, until his successor is
elected and qualified, or until his earlier death, resignation or
removal. Additional officers may be appointed by the Board of Directors
in the manner provided by law and the Bylaws of the Surviving
Corporation.
1.9 Conversion.
1.9.1 On the Effective Date, each outstanding share of the
Company's voting common stock (the "Company Common Stock") (excluding
any treasury shares of the Company), shall be converted into and become
the right to receive .0010676 share of the voting common stock of the
Acquiror (the "Acquiror Common Stock"). Pursuant to the Merger,
Acquiror will issue an aggregate total of 7,500 shares of Acquiror
Common Stock to the Shareholders in exchange for all of their shares of
Company Common Stock in the amounts set forth in Exhibit "B" hereto.
1.9.2 Each treasury share of the Company's Common Stock, if
any, shall be canceled, and no payment shall be made in respect
thereof.
1.10 Surrender of Certificates. As soon as practicable after the
Effective Date, each holder of a certificate or certificates which prior thereto
represented validly issued and outstanding shares of Company Common Stock may
surrender such certificate or certificates to Acquiror or to its designated
transfer agent, and shall receive in exchange therefore a certificate
representing the number of shares of Acquiror Common Stock into which the shares
of the Company's Common Stock theretofore represented by the surrendered
certificate or certificates shall have been converted pursuant to Section 1.9
hereof. Until so surrendered, each certificate that on the Effective Date
represents issued and outstanding shares of the Company's Common Stock shall be
deemed for all corporate purposes to evidence ownership of the number of shares
of Acquiror Common Stock into which the shares of Company Common Stock shall
have been converted.
1.11 Non-Disclosure/Non-Compete Agreements: In consideration of this
transaction and of the obligation of Newco for royalties set forth in paragraph
1.13 below, Shareholders shall execute and deliver to Acquiror, for the benefit
of Acquiror and Newco, agreements in the form attached hereto as Exhibit "C" by
which each agrees for the period stated therein, to hold Company information
confidential and not to compete with Newco or Acquiror for the period stated
therein.
1.12 Assumption of Company's Liabilities: In addition, Newco, as the
Surviving Corporation, shall assume all liabilities of Company, as listed at
Schedule "D" hereto, which Company and Shareholders represent total not more
than $40,000.00. All debts and obligations thus assumed shall be paid or
otherwise satisfied, proportionately, at a rate of 25% of said principal
obligation per month, with the first payment of not less than $10,000 to be made
at Closing.
1.13 Royalty Payments: In addition to the foregoing, and for a period
of ten (10) years from the date hereof, Newco, as the Surviving Corporation,
shall pay to Shareholders an amount equal to three percent (3%) of the gross
revenue of Newco, derived from the advertising and affiliate-associated programs
of the Company. Said royalty payments shall be paid quarterly, within thirty
(30) days following the final business day of each calendar quarter, and shall
be apportioned among Shareholders as Shareholders shall direct in writing.
Absent written instructions, signed by all Shareholders, all royalty payments
will be made by a single check, payable jointly to all Shareholders. The
Surviving Corporation shall provide with each royalty payment an accounting of
revenue upon which said royalty is calculated. Not more often than annually,
Shareholders shall have the right to examine the Surviving Corporation's books
and records, personally or through an authorized representative, during normal
business hours and on not less than fifteen (15) days' prior notice.
Shareholders shall bear the costs of any such examination, except that, in the
event that the examination reveals that the Surviving Corporation underpaid
royalties over the relevant period by more than 5%, the costs of such
examination shall be paid by the Surviving Corporation. Any royalty payments not
made when due shall bear interest at an annual rate of 10%.
1.14 Closing. The closing for the Merger pursuant to this Agreement
(the "Closing") shall be held at 4:00 p.m., Mountain Time, on January 31, 2000
(the "Closing Date"). The Closing shall occur at the offices of counsel for
Acquiror, Snow, Christensen & Martineau, 10 Exchange Place, Eleventh Floor, Salt
Lake City, Utah, unless each party hereto agrees in writing to another location.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Each of the Shareholders severally represents and warrants as follows:
2.1 Ownership of Stock.
2.1.1. Such Shareholder is the record owner and holder of the
number of fully paid and nonassessable shares of the Company Common
Stock listed in Exhibit "B" hereto as of the date hereof and will
continue to own such Company Common Stock on the Closing Date and all
such shares of common stock are or will be on the Closing Date owned
free and clear of all liens, encumbrances, charges and assessments of
every nature and subject to no restrictions with respect to
transferability.
2.1.2. Except for this Agreement, there are no outstanding
options, contracts, calls, commitments, agreements or demands of any
character relating to the stock of the Company owned by the
Shareholder.
ARTICLE III
REPRESENTATIONS OF THE COMPANY AND SHAREHOLDERS
The Company and each Shareholder severally represent and warrant as
follows:
3.1 Organization and Authority.
3.1.1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah with
full power and authority to enter into and perform the transactions
contemplated by this Agreement.
3.1.2 The Company is not qualified or licensed to do business
as a foreign corporation in any jurisdiction.
3.1.3 The copies of the Articles of Incorporation and By Laws
of the Company heretofore delivered to Acquiror are complete and
correct copies of such instruments as presently in effect.
3.1.4. The outstanding shares of Company Common Stock are
legally and validly issued, fully paid and nonassessable.
3.1.5 The minute book of the Company made available to the
Acquiror contains the Articles of Incorporation of the Company, Bylaws,
and accurate records of all meetings and other corporate actions of the
Shareholders and the board of directors (and any committee thereof) of
the Company at which such records were kept.
3.2 Capitalization of the Company. Immediately prior to the
consummation of the transactions contemplated by this Agreement, the authorized
capital stock of the Company consisted of 50,000,000 shares of common stock,
$.001 par value, of which 7,025,000 shares are issued and outstanding. There are
no shares of preferred stock of the Company, either authorized or issued. There
are no outstanding (a) securities convertible into or exchangeable for the
Company capital stock; (b) options, warrants or other rights to purchase or
subscribe for capital stock of the Company or securities convertible into or
exchangeable for capital stock of the Company; or (c) contracts, commitments,
agreements, understandings or arrangements of any kind relating to the issuance
of any capital stock of the Company, any such convertible or exchangeable
securities or any such options, warrants or rights.
3.3 Subsidiaries. The Company does not own, directly or indirectly, any
capital stock or other equity securities of any other corporation or have any
direct or indirect equity or ownership interest in any other business, including
wholly-owned subsidiaries.
3.4 Performance of This Agreement. The Company has full corporate power
and authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors and Shareholders have taken all
action required by law, the Company's Articles of Incorporation, its By Laws or
otherwise to be taken by them to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and this
Agreement is a valid and binding agreement of the Company enforceable in
accordance with its terms, except that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will violate any provision of the Articles of Incorporation or By Laws of
the Company, or, except as specified in Section 3.4 of the Disclosure Schedule,
violate, or be in conflict with, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
cause the acceleration of the maturity of any debt or obligation pursuant to, or
result in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of the Company, under any agreement or
commitment to which the Company is a party or by which the Company is bound, or
to which the property of the Company is subject, or violate any statute or law
or any judgment, decree, order, regulation or rule of any court or government
authority.
3.5 Financials. True copies of the unaudited financial statements of
the Company consisting of the unaudited balance sheets as of the calendar year
ended December 31, 1999, and statements of operations for such period, have been
delivered by the Company to the Acquiror. These statements have been compiled
in-house by the Company's accountant and have not been examined or certified.
Said financial statements are true and correct in all material respects and
fairly present the financial condition of the Company as of December 31, 1999,
and the earnings for the periods covered, in accordance with generally accepted
accounting principles applied on a consistent basis.
3.6 Leases. The Company has disclosed to Acquiror all leases pursuant
to which the Company leases real or personal property. All such leases are
valid, binding and enforceable in accordance with their terms, and are in full
force and effect; there are no existing material defaults by the Company
thereunder; no event of default has occurred which (whether with or without
notice, lapse of time or the happening or occurrence of any other event) would
constitute a default thereunder; and all lessors under such leases have
consented (where such consent is necessary) to the consummation of the
transactions contemplated by this Agreement without requiring modification in
the rights or obligations of the lessee under such leases. Executed counterparts
of all consents referred to the preceding sentence will be delivered to Acquiror
at the Closing.
3.7 Bank Accounts. The Company has disclosed to Acquiror the names and
locations of all banks, trust companies, savings and loan associations and other
financial institutions at which the Company maintains safe deposit boxes or
accounts of any nature and the names of all persons authorized to draw thereon,
make withdrawals therefrom or have access thereto. At the Closing, the Company
will deliver to Acquiror copies of all records, including all signature or
authorization cards, pertaining to such bank accounts.
3.8 Employment Agreements. The Company has no employment agreements in
as of the Closing Date.
3.9 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, pending or outstanding or, to the
knowledge of such Shareholder or the Company, threatened against or involving
the Company or its assets, properties, or business, nor does the Company know,
or have reasonable grounds to know, of any basis for any such proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions. In addition, there are no material proceedings
existing, pending or reasonably contemplated to which any officer, director, or
affiliate of the Company or as to which the Shareholder is a party adverse to
the Company or has a material interest adverse to the Company.
3.10 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by the Company, and there are no unpaid taxes which are, or could
become a lien on the properties and assets of the Company, except as provided
for in the financial statements of the Company, or have been incurred in the
normal course of business of the Company since January 1, 2000. All tax returns
of any kind required to be filed have been filed and the taxes paid or accrued.
3.11 Brokers and Finders. Neither the Company nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement.
3.12 Accuracy of All Statements Made by Company. No representation or
warranty by the Company and such Shareholder in this Agreement, nor any
statement, certificate, schedule or exhibit hereto furnished or to be furnished
by or on behalf of the Company or the Shareholder pursuant to this Agreement,
nor any document or certificate delivered to the Acquiror pursuant to this
Agreement or in connection with actions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a material
fact necessary to make the statement contained therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND NEWCO
The Acquiror and Newco represent and warrant as follows:
4.1 Organization and Good Standing.
4.1.1 The Acquiror is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada with full
power and authority to enter into and perform the transactions
contemplated by this Agreement. The copies of the Articles of
Incorporation and By Laws of the Acquiror heretofore delivered to the
Company and Shareholders are complete and correct copies of such
instruments as presently in effect. Acquiror is not currently qualified
outside the State of Nevada.
4.1.2 Newco is a wholly-owned subsidiary of Acquiror and is a
corporation which shall have been duly organized, validly existing and
in good standing under the laws of the State of Utah with full power
and authority to enter into and perform the transactions contemplated
by this Agreement. The copies of the Articles of Incorporation and By
Laws of Newco heretofore delivered to the Company and Shareholders are
complete and correct copies of such instruments as presently in effect.
Newco is not qualified or licensed to do business as a foreign
corporation in any jurisdiction.
4.2 Capitalization.
4.2.1 Immediately prior to the consummation of the transactions
contemplated by this Agreement, the authorized capital stock of the
Acquiror consisted of 50,000,000 shares of common stock, no par value,
of which 7,854,377 shares are issued and outstanding. There are no
shares of preferred stock of the Acquiror, either authorized or issued.
4.2.2 Immediately prior to the consummation of the transactions
contemplated by this Agreement, the authorized capital stock of Newco
consisted of 25,000,000 shares of common stock, no par value, of which
25,000 shares are issued and outstanding and owned by Acquiror. There
are no shares of preferred stock of Newco, either authorized or issued.
There are no outstanding (a) securities convertible into or
exchangeable for Newco capital stock; (b) options, warrants or other
rights to purchase or subscribe for capital stock of Newco or
securities convertible into or exchangeable for capital stock of Newco;
or (c) contracts, commitments, agreements, understandings or
arrangements of any kind relating to the issuance of any capital stock
of Newco, any such convertible or exchangeable securities or any such
options, warrants or rights.
4.3 Performance of This Agreement. This Agreement constitutes the
legal, valid and binding obligation of Acquiror and of Newco, enforceable
against both in accordance with its terms. Upon the execution and delivery by
Acquiror or Newco of the employment agreements, the employment agreements will
constitute the legal, valid and binding obligation of the entity executing such
agreements, enforceable in accordance with their respective terms. Acquiror and
Newco, each in its own right, has the absolute and unrestricted right, power,
authority and capacity to execute and deliver this Agreement and the employment
agreements and to perform its obligations under this Agreement and the
employment agreements. Neither the execution and delivery of this Agreement nor
the consummation or performance of any of the transactions contemplated in this
Agreement or the employment agreements will, directly or indirectly violate any
provision of the Articles of Incorporation or By Laws of the Acquiror or of
Newco, or, except as specified in Section 4.3 of the Disclosure Schedule,
violate, or be in conflict with, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
cause the acceleration of the maturity of any debt or obligation pursuant to, or
result in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of the Company, under any agreement or
commitment to which the Company is a party or by which the Company is bound, or
to which the property of the Company is subject, or violate any statute or law
or any judgment, decree, order, regulation or rule of any court or government
authority.
4.4 Financials. True copies of the unaudited consolidated financial
statements of the Acquiror, consisting of the consolidate balance sheets of
Acquiror and its subsidiaries as of the calendar year ended December 31, 1999,
and statements of operations for such period, have been delivered by the
Acquiror to the Company. Said financial statements are true and correct in all
material respects and fairly present the financial condition of the Acquiror as
of the date thereof, and the earnings for the periods covered, in accordance
with generally accepted accounting principles applied on a consistent basis.
4.5 Liabilities. There are no material liabilities of the Acquiror,
whether accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of the Acquiror, its agents or servants which are not disclosed by
or reflected in said financial statements. As of the date hereof, there are no
known circumstances, conditions, happenings, events or arrangements, contractual
or otherwise, which may hereafter give rise to liabilities, except in the normal
course of business of the Acquiror.
4.6 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, either threatened, pending or
outstanding against or involving the Acquiror or its subsidiaries, if any, or
their assets, properties, or business, nor does the Acquiror or its subsidiaries
know, or have reasonable grounds to know of any basis for any such proceedings,
investigations or inquiries, product liability or other claims judgments,
injunctions or restrictions.
4.7 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by the Acquiror, and there are no unpaid taxes which are, or could
become a lien on the properties and assets of the Acquiror. All tax returns of
any kind required to be filed have been filed and the taxes paid or accrued.
4.8 Accuracy of All Statements Made by the Acquiror or Newco. No
representation or warranty by the Acquiror or Newco in this Agreement, nor any
statement, certificate, schedule or exhibit hereto furnished or to be furnished
by the Acquiror or Newco pursuant to this Agreement, nor any document or
certificate delivered to the Company or the Shareholders pursuant to this
Agreement or in connection with actions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits to state or shall omit to
state a material fact necessary to make the statement contained therein not
misleading.
4.9 No Covenant as to Tax Consequences. It is expressly understood and
agreed that neither the Acquiror nor its officers or agents has made any
warranty or agreement, expressed or implied, as to the tax consequences of the
transactions contemplated by this Agreement or the tax consequences of any
action pursuant to or growing out of this Agreement. All parties have consulted
with their respective accountants or attorneys and have obtained adequate
assurances that this Agreement will satisfy their intent, for purposes of
federal income tax, as set forth in the recitals to this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO THE ACQUIROR'S OBLIGATIONS
Each and every obligation of the Acquiror to be performed on the
Closing Date shall be subject to the satisfaction prior thereto of the following
conditions:
5.1 Truth of Representations and Warranties. The representations and
warranties made by the Company and the Shareholders in this Agreement shall be
substantially accurate in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had been made
or given on and as of the Closing Date.
5.2 No Material Adverse Change. As of the Closing Date there shall not
have occurred any material adverse change, financially or otherwise within the
control of the Company, which materially impairs the ability of the Company to
conduct its business or the earning power thereof on the same basis as in the
past.
5.3 Accuracy of Financial Statements. The Acquiror and its
representatives shall be satisfied as to the accuracy of all balance sheets,
statements of income and other financial statements of the Company furnished to
the Acquiror herewith.
5.4 Non-Compete and Non-Disclosure Agreements. All Shareholders shall
have executed and delivered to Acquiror and Newco Non-Compete and Non-Disclosure
Agreements in the form attached hereto as Exhibit "C."
5.5 Time Limit on Closing. Closing shall have taken place by January
31, 2000, contemporarily with the execution of this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE SHAREHOLDERS
Each and every obligation of the Company and the Shareholder to be
performed on the Closing Date shall be subject to the satisfaction prior thereto
of the following conditions:
6.1 Truth of Representations and Warranties. The representations and
warranties made by the Acquiror in this Agreement shall be substantially
accurate in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made or given on
and as of the Closing Date.
6.2 No Material Adverse Change. As of the Closing Date there shall not
have occurred any material adverse change, financially or otherwise, which
materially impairs the ability of the Acquiror to conduct its business.
6.3 Approval of Financial Statements. The Company and Shareholders
shall be satisfied as to the accuracy of all balance sheets, statements of
income and other financial statements of Acquiror.
6.4 Time Limit on Closing. Closing shall have taken place by January
31, 2000.
ARTICLE VII
SECURITY ACT PROVISIONS
7.1 Restrictions on Disposition of Shares. The Shareholders covenant
and warrant that the shares of Acquiror received are acquired for their own
account and not with the present view towards the distribution thereof.
Shareholders further covenant and warrant and that they will not dispose of the
respective shares of Acquiror Common Stock except (i) pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or (ii) in
any other transaction which, in the opinion of counsel, acceptable to the
Acquiror, is exempt from registration under the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder. In order to effectuate the covenants of this sub-section, an
appropriate endorsement will be placed upon each of the certificates of Acquiror
Common Stock at the time of distribution of such shares by Acquiror pursuant to
this Agreement, and stop transfer instructions shall be placed with the transfer
agent for the securities.
7.2 Evidence of Compliance With Private Offering Exemption. The
Shareholders agree to supply the Acquiror with evidence of the financial
sophistication of the Shareholders or evidence of appointment of a sophisticated
investment representative and such other items as counsel for the Acquiror may
require in order to evidence the private offering character of the conversion of
the Company Common Stock for Acquiror Common Stock, pursuant to this Agreement.
Unless otherwise designated to the Acquiror, each Shareholder represents that he
has such knowledge of finance, securities, and investments, generally, to
evaluate the risks of the transaction set forth in this Agreement, and that the
financial capacity of such Shareholder is of such proportion that the total cost
of such Shareholder's commitment in such Acquiror Common Stock would not be
material when compared with his total financial capacity. Each Shareholder
understands that he must bear the economic risk of the investment for an
indefinite period of time because Acquiror Common Stock to be received by each
Shareholder on conversion of the Shareholder's Company Common Stock have not
been registered under applicable securities laws and therefore cannot be sold,
except pursuant to the Put Option Agreement unless they are subsequently
registered under such securities laws or an exemption from such registration is
available; that each certificate will bear a restrictive legend to the effect
that the shares have not been registered under securities laws and are therefore
restricted on transferability and sale of such shares, except for the shares of
Acquiror Common Stock sold by Shareholders pursuant to the Put Option Agreement;
and that, with the exception of the shares subject to the Put Option Agreement,
stop transfer instructions will be placed upon such shares with the transfer
agent of the Acquiror concerning such restrictions.
7.3 Notice of Limitation Upon Disposition. Each Shareholder represents
that he is aware that the shares of Acquiror Common Stock issued to him in
connection with the Merger hereunder will not have been registered pursuant to
the Securities Act of 1933, as amended; and, therefore, under current
interpretations and applicable rules, he may have to retain such shares for a
period of at least one year and at the expiration of such one-year period his
sales may be confined to brokerage transactions of limited amounts requiring
certain notification filings with the Securities and Exchange Commission and
such disposition may be available only if the Acquiror is current in its filings
with the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended, or other public disclosure requirements, and the other
limitations imposed thereby on the disposition of Acquiror Common Stock.
ARTICLE VIII
CLOSING
9.1 Documents To Be Delivered by the Company and the Shareholder. At
the closing the Company and the Shareholders shall deliver to the Acquiror the
following documents:
a. Certificates from each Shareholder for the number of shares
of Company Common Stock set forth on Exhibit "B", such certificates to
be surrendered and cancelled in exchange for certificates reflecting
shares of Acquiror, in the manner and form required by subsections 1.9
and 1.10 hereof
b. Nondisclosure and Noncompete Agreements, in a form attached
as Exhibit "C" hereto.
c. Such other documents of transfer, certificates of authority
and other documents as the Acquiror may reasonably request.
9.2 Documents To Be Delivered by the Acquiror and Newco. At the closing
the Acquiror and Newco shall deliver to the Company and to the Shareholders the
following documents:
a. Certificates for the number of shares of Acquiror Common
Stock into which the Shareholders' respective shares of Company Common
Stock are converted, as determined in sub-section 1.9 hereof.
b. Such other documents of transfer, certificates of authority
and other documents as the Company and/or the Shareholders may
reasonably request.
ARTICLE IX
CONDUCT OF BUSINESS AFTER CLOSING
On and after the Effective Date and except as otherwise expressly
consented to or approved by each of the Shareholders, the Surviving Corporation
and Acquiror in writing, Acquiror and the Surviving Corporation will each carry
on their respective businesses diligently and substantially in the same manner
as heretofore conducted, and none shall incur any material liabilities, except
in the ordinary course of business.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 Publicity. The parties agree that no publicity, release or other
public announcement concerning the transaction contemplated by this Agreement
shall be issued by any party hereto without the advance approval of both the
form and substance of the same by the other parties and their counsel, which
approval, in the case of any publicity, release or other public announcement
required by applicable law, shall not be unreasonably withheld or delayed.
11.2 Default. Should any party to this Agreement default in any of the
covenants, conditions, or promises contained herein, the defaulting party shall
pay all costs and expenses, including a reasonable attorney's fee, which may
arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder or by the statutes of the State of Utah.
11.3 Assignment. Except as otherwise expressly set forth herein, this
Agreement may not be assigned in whole or in part by any party hereto without
the prior written consent of the other party or parties, which consent shall not
be unreasonably withheld, and then solely to the extent set forth in such
consent.
11.4 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their respective heirs,
executors, administrators, successors and assigns.
11.5 Partial Invalidity. If any term, covenant, condition or provision
of this Agreement or the application thereof to any person or circumstance shall
to any extent be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to persons or circumstances other than
those as to which it is held to be invalid or unenforceable shall not be
affected thereby and each term, covenant, condition or provision of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law.
11.6 No Other Agreements. This Agreement constitutes the entire
Agreement between the parties and there are and will be no oral representations
which will be binding upon any of the parties hereto.
11.7 Survival of Covenants. Etc. All covenants, representations, and
warranties made herein to any parties or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall remain
in full force and effect for a period of three years immediately following the
Effective Date.
11.8 Further Action. The parties hereto agree to execute and deliver
such additional documents and to take such other and further action as may be
reasonably required to carry out fully the transactions contemplated herein.
11.9 Amendment. This Agreement or any provision hereof may not be
changed, waived, terminated or discharged except by means of a written
supplemental instrument signed by the party or parties against whom enforcement
of the change, waiver, termination, or discharge is sought.
11.10 Headings. The descriptive headings of the various Sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
11.11 Counterparts. This agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument.
11.12 Full Knowledge. By their signatures, the parties acknowledge that
they have carefully read and fully understand the terms and conditions of this
Agreement, that each party has had the benefit of counsel, or has been advised
to obtain counsel, and that each party has freely agreed to be bound by the
teens and conditions of this Agreement.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Agreement
and Plan of Merger as of the day and year first above written.
ACQUIROR: iSHOPPER.COM, INC.
By_________________________________
William E. Chipman, Sr., CFO
NEWCO: SF ACQUISITION CORP.
By_________________________________
William E. Chipman, Sr., President
COMPANY: STINKYFEET.COM, INC.
By_________________________________
David Barrett, President
SHAREHOLDERS: ____________________________________
David Barrett, Individually
____________________________ ____________________________________
Rob Davis, Individually Matt Parr, Individually
___________________________ ____________________________________
Abel Davis, Individually Nathan Drage, Individually
<PAGE>
EXHIBIT"A"
TO AGREEMENT AND PLAN OF MERGER
(Articles of Merger)
<PAGE>
ARTICLES OF MERGER
of
STINKYFEET.COM, INC.
(a Utah corporation)
into
SF ACQUISITION CORP.
(a Utah corporation)
The undersigned officers, the respective presidents and secretaries of
StinkyFeet.com, Inc., a Utah corporation ("StinkyFeet") and SF Acquisitions
Corp., a Utah corporation ("Acquisition"), hereby certify that the Agreement and
Plan of Merger dated January 31, 2000 (hereinafter the "Plan") was approved by
the shareholders of StinkyFeet by unanimous consent of its shareholders on
January 31, 2000, and was approved by the sole shareholder of Acquisition by
unanimous consent action of such sole shareholder on January 31, 2000.
1. The number of shares outstanding of each class of each corporation
which were entitled to vote on the Plan, and the number of shares of each class
of each corporation consenting and not consenting to the Plan, is as follows:
Class Shares Consenting Not Consenting
Outstanding
------- ------------- ----------- --------------
StinkyFeet Common Stock
($.001 par value) 7,025,000 7,025,000 -0-
Acquisition Common Stock 25,000 25,000 -0-
(no par)
2. The number of votes cast for the Plan by each constituent entity was
sufficient for approval of the Plan.
3. All of the presently outstanding shares of Acquisition are owned and
held by iShopper.com, Inc., a Nevada corporation ("iShopper").
4. The effective date of the merger shall be the time of the completion
of filing of the Articles of Merger in the State of Utah.
5. An abbreviated copy of the completed Plan of Merger is attached
hereto. A complete copy of the Agreement and Plan of Merger, including exhibits
and schedules, is on file at the principal offices of iShopper.com, Inc., at
8722 South 300 West, Sandy, Utah, and shall be made available, without cost, to
any shareholder of Acquisition, iShopper.com, Inc. or StinkyFeet.
6. The following amendments to the Articles of Incorporation of
Acquisition were duly approved by the shareholders of each constituent entity
and are hereby made to the Articles of Incorporation of Acquisition:
a. Amend Article First of the Articles of Incorporation to
read as follows:
The name of the corporation is StinkyFeet.com, Inc.
b. Amend Article Tenth to read as follows:
Directors: The corporation shall be governed by a
Board of Directors and shall have not less than three (3) nor more
than five (5) directors as determined, from time to time, by the
Board of Directors. The original Board of Directors shall be
comprised of three (3) persons. The names and addresses of the
persons who are to serve as directors until the first annual
meeting of shareholders and until their successors are elected and
shall qualify are as follows:
Shane Hackett
8722 South 300 West
Sandy, Utah 84070
William E. Chipman, Sr.
8722 South 300 West
Sandy, Utah 84070
Tom Maher
8722 South 300 West
Sandy, Utah 84070
IN WITNESS WHEREOF, StickyFeet.com, Inc., formerly known as SF Acquisitions
Corp., a Utah corporation, as the surviving entity, has caused these Articles of
Merger to be executed by its president, this 31st day of January, 2000.
StickyFeet.com, Inc.
f/k/a SF Acquisitions Corp.
A Utah Corporation
By ___________/s/______________________
William E. Chipman, President
<PAGE>
PLAN OF MERGER
(Abbreviated for Filing with Articles of Merger)
This Plan of Merger, is agreed to as of this 31st day of January, 2000,
by and among iShopper.com, Inc., a Nevada corporation (hereinafter the
"Acquiror"), StinkyFeet.com, Inc., a privately-held Utah corporation
(hereinafter the "Company") David Barrett, Rob Davis, Matt Parr, Nathan Drage
and Abel Davis, the shareholders of the Company (individually, a "Shareholder"
and collectively, the "Shareholders"), and SF Acquisition Corp., a Utah
corporation ("Newco").
WITNESSETH:
WHEREAS, Newco is a wholly-owned subsidiary of Acquiror; and
WHEREAS, the Company wishes to merge with and into Newco, and Acquiror
desires to merge Newco with the Company, so that Newco will be the Surviving
Corporation (as defined below), all upon the terms and subject to the conditions
of this Agreement and in accordance with the laws of the State of Utah;
WHEREAS, in connection with said merger, each Shareholder is willing to
surrender all of the issued and outstanding common shares of the Company owned
by such Shareholder in exchange for the right to receive certain common shares
of the Acquiror, as detailed herein, with an accompanying stock put option
agreement, as described herein, by which the Shareholders shall have the right,
without solicitation, to sell to a third party, at an agreed price, and at an
agreed rate of purchase, a portion of the Acquiror stock thus received; and
WHEREAS, the terms and conditions of the Merger (as defined below), the
mode of carrying the same into effect, the manner of converting the capital
stock of the Company into the right to receive common shares of the Acquiror and
such other terms and conditions as may be required or permitted to be stated in
this Agreement are set forth below; and
WHEREAS, for Federal income tax purposes, it is intended by the parties
hereto that the Merger shall qualify as a reorganization within the meaning of
Sections 368(a)(1)(A) and (a)(2)(D) of the Internal Revenue Code of 1986, as
amended (the "Code"), and that this Agreement shall constitute a "Plan of
Reorganization" for purposes of Section 368 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions set forth
herein, the parties mutually covenant and agree with each other as follows:
THE MERGER
1.1 Company/Newco Merger. On the Effective Date (as defined in Section
1.3), the Company shall be merged with and into Newco and the separate corporate
existence of the Company shall thereupon cease (said event hereafter referred to
as the "Merger"). Newco shall be the surviving corporation in the Merger (the
"Surviving Corporation). The name of the Surviving Corporation immediately
following the Effective Date shall be "StinkyFeet.com, Inc." The separate
corporate existence of the Surviving Corporation with all its rights,
privileges, immunities and franchises shall continue unaffected by the Merger.
1.2 Filing. Simultaneously with the execution hereof, Acquiror, Newco
and the Company will cause Articles of Merger to be executed and filed with the
office of the Utah Division of Corporations and Commercial Code as provided in
Section 16-10a-1105 of the Utah Code (Revised Business Corporation Act).
1.3 Effective Date of the Merger. The Merger shall be effective at the
time of the filing of the Articles of Merger with the offices of the Utah
Division of Corporations and Commercial Code, referred to in Section 1.2, which
time is herein sometimes referred to as the "Effective Date."
1.4 Effect of the Merger. The Merger shall have the effects set forth
in Sections 16-10a-1106 of the Revised Business Corporation Act.
1.5 Further Assurances. If at any time after the Effective Date, any
party hereto shall consider or be advised that any further deeds, assignments or
assurances in law or in any other things are necessary, desirable or proper to
vest, perfect or confirm, of record or otherwise, in the Surviving Corporation,
the title to any property or rights of the Company acquired or to be acquired by
reason of, or as a result of, the Merger, the parties hereto agree that
Acquiror, the Surviving Corporation, the Company and their proper officers shall
execute and deliver all such proper deeds, assignments and assurances in law and
shall do all things necessary, desirable or proper to vest, perfect or confirm
title to such property or rights in the Surviving Corporation and otherwise to
carry out the purpose of this Agreement, and that the proper officers and
directors of Acquiror, Surviving Corporation and the Company are fully
authorized in the name of Acquiror, Surviving Corporation and the Company
otherwise to take any and all such actions.
1.6 Articles of Incorporation. At the Effective Date, the Articles of
Incorporation of Newco, as amended consistent with the Agreement, shall be the
Articles of Incorporation of the Surviving Corporation, and may be amended from
time to time after the Effective Date as provided by law.
1.7 Bylaws. The Bylaws of Newco, as in effect immediately prior to the
Effective Date, shall continue unchanged as the Bylaws of the Surviving
Corporation, until the same shall thereafter be altered, amended or repealed in
accordance with Utah law, the Articles of Incorporation of the Surviving
Corporation or its Bylaws.
1.8 Directors and Officers.
1.8.1 From and after the Effective Date, each director of
Newco immediately prior to the Effective Date shall continue as a
director of the Surviving Corporation, until his successor is elected
and qualified, or until his earlier death, resignation or removal. If
on or after the Effective Date an vacancy shall exist in the Board of
Directors of the Surviving Corporation, such vacancy may thereafter be
filled in the manner provided by law and the Bylaws of the Surviving
Corporation.
1.8.2 From and after the Effective Date, each officer of Newco
immediately prior to the Effective Date shall continue as an officer of
the Surviving Corporation, in the same capacity, until his successor is
elected and qualified, or until his earlier death, resignation or
removal. Additional officers may be appointed by the Board of Directors
in the manner provided by law and the Bylaws of the Surviving
Corporation.
1.9 Conversion.
1.9.1 On the Effective Date, each outstanding share of the
Company's voting common stock (the "Company Common Stock") (excluding
any treasury shares of the Company), shall be converted into and become
the right to receive .0010676 share of the voting common stock of the
Acquiror (the "Acquiror Common Stock"). Pursuant to the Merger,
Acquiror will issue an aggregate total of 7,500 shares of Acquiror
Common Stock to the Shareholders in exchange for all of their shares of
Company Common Stock in the amounts set forth in Exhibit "B" hereto.
1.9.2 Each treasury share of the Company's Common Stock, if
any, shall be canceled, and no payment shall be made in respect
thereof.
1.10 Surrender of Certificates. As soon as practicable after the
Effective Date, each holder of a certificate or certificates which prior thereto
represented validly issued and outstanding shares of Company Common Stock may
surrender such certificate or certificates to Acquiror or to its designated
transfer agent, and shall receive in exchange therefore a certificate
representing the number of shares of Acquiror Common Stock into which the shares
of the Company's Common Stock theretofore represented by the surrendered
certificate or certificates shall have been converted pursuant to Section 1.9
hereof. Until so surrendered, each certificate that on the Effective Date
represents issued and outstanding shares of the Company's Common Stock shall be
deemed for all corporate purposes to evidence ownership of the number of shares
of Acquiror Common Stock into which the shares of Company Common Stock shall
have been converted.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Agreement
and Plan of Merger as of the day and year first above written.
ACQUIROR: iSHOPPER.COM, INC.
By___________/s/____________________
William E. Chipman, CFO
NEWCO: SF ACQUISITIONS CORP.
By___________/s/____________________
William E. Chipman, President
COMPANY: STINKYFEET.COM, INC.
By__________/s/____________________
David Barrett, President
SHAREHOLDERS: __________/s/________________
David Barrett, Individually
__________/s/________________
Rob Davis, Individually
__________/s/________________
Matt Parr, Individually
__________/s/________________
Nathan Drage, Individually
__________/s/________________
Abel Davis, Individually
<PAGE>
EXHIBIT "B"
TO AGREEMENT AND PLAN OF MERGER
NO. OF SHARES OF NO. OF SHARES OF
NAME OF THE COMPANY THE ACQUIROR
SHAREHOLDERS TO BE SURRENDERED TO BE ISSUED
- ------------ ------------------- --------------
David Barrett 2,000,000 2,135
Rob Davis 2,000,000 2,135
Matt Parr 2,000,000 2,135
Nathan Drage 1,000,000 1,068
Abel Davis 25,000 27
<PAGE>
EXHIBIT "C"
TO AGREEMENT AND PLAN OF MERGER
Nondisclosure and Noncompete Agreement
EXHIBIT "D"
TO AGREEMENT AND PLAN OF MERGER
STINKYFEET ASSETS & LIABILITIES
EXHIBIT "E"
TO AGREEMENT AND PLAN OF MERGER
DISCLOSURE SCHEDULE
StinkyFeet.com, Inc. Bank Accounts:
StinkyFeet.com, Inc. has no employees or contracts with independent contractors.
STOCK EXCHANGE AGREEMENT
This Agreement is entered into as of the date stated below by and among
Uniq Studios, Inc., a privately-held Nevada corporation (hereinafter the
"Company"), Clayton F. Kearl, Troy Kearl, Devin O. Kearl, and Dusty Kearl,, the
owners of all outstanding shares of the Company (the "Shareholders"), and
iShopper.com, Inc., a Nevada corporation, dba IHPR, Inc. (hereinafter
"Purchaser").
RECITALS:
1. The Company is successor in interest to all rights, title, assets and
business interests of Uniq Studios, LLC, and Uniq Multimedia, LLC, f/k/a Uniq
Enterprises, LLC;
2. Shareholders own all outstanding shares of the Company;
3. Purchaser desires to acquire from the Shareholders, and Shareholders
desire to convey to Purchaser, all of the issued and outstanding capital shares
of the Company, in exchange solely for certain shares of Purchaser, all upon the
terms and subject to the conditions of this Agreement and in accordance with the
laws of the State of Nevada; and
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms and covenants set
forth herein, the Purchaser, the Company, and the Shareholder approve and adopt
this Stock Exchange Agreement and mutually covenant and agree with each other as
follows:
1. Shares to be Transferred and Shares to be Issued.
1.1 On the closing date the Shareholders shall transfer to the
Purchaser certificates for the number of shares of the common stock of
the Company described in Schedule "A", attached hereto and incorporated
herein, which in the aggregate shall represent all of the issued and
outstanding shares of the common stock of the Company. Such certificates
shall be duly endorsed in blank by the Shareholders or accompanied by
duly executed stock powers in blank with signatures guaranteed.
1.2 In exchange for the transfer of the common stock of the
Company pursuant to subsection 1.1. hereof, the Purchaser shall on the
closing date and contemporaneously with such transfer of the common stock
of the Company to it by the Shareholder issue to the Shareholders a total
of 1,500,000 common shares of Purchaser, issued and restricted under
S.E.C. Rule 144. Said shares shall be deemed to be issued and delivered
at closing, in amounts specified on Schedule "A," and upon delivery to
Purchaser of all of Shareholders' shares in the Company. Certificates for
Shareholders' shares of Purchaser shall be delivered to Shareholders as
soon after closing as Purchaser's transfer agent is able to prepare such
certificates upon delivery of all of Shareholders' shares in the Company.
The certificates delivered to Shareholders pursuant to this Agreement
shall bear a legend in substantially the following form:
The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended,
or under the securities laws of any state. The shares of stock
have been acquired for investment and may not be sold, offered
for sale or transferred in the absence of an effective
registration under the Securities Act of 1933, as amended, and
any applicable state securities laws, or an opinion of counsel
satisfactory in form and substance to counsel for
iShopper.com, Inc. that the transaction shall not result in a
violation of federal or state securities laws.
1.3 In further consideration for the transfer of common stock of
the Company pursuant to subsection 1.1 hereof, Purchaser shall grant to
Shareholders, in proportions equal to their respective interests
specified at Schedule "A" options to purchase a total of 500,000
additional restricted shares of Purchaser's common stock, at an exercise
price equal to 80% of the market bid on Purchaser's trading shares as of
close of business on the closing date. Said options shall vest, in equal
increments of 250,000 shares each upon satisfaction by Company of those
performance conditions described at Schedule "B" hereto. All such options
shall expire if not vested and exercised on the earliest of the
following: (a) a date five (5) years from the closing date; (b) within
sixty (60) days after termination of employment for other than cause; or
(c) the date of any termination of employment (for cause).
2. Representations and Warranties of the Company and Shareholders. The
Company and Shareholders represent and warrant as follows:
2.1 Organization and Authority.
a. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Nevada, with full power and authority to enter into and perform
the transactions contemplated by this Agreement.
b. The outstanding shares of the Company are legally and
validly issued, fully paid and nonassessable.
c. The minutes book of the Company made available to the
Purchaser contains the Articles of Incorporation of the Company,
Bylaws, and complete and accurate records of all meetings and
other corporate actions of the shareholders and the board of
directors (and any committee thereof) of the Company.
2.2 Prior Business of Uniq. All of the information contained in
the books and records of Company and of Uniq Studios, LLC, Uniq
Multimedia, LLC, and all other predecessor entities, complete copies of
which have been furnished to the Purchaser, are true and correct in all
material respects and do not contain any untrue statement of material
fact or omit a material fact necessary to make the statement contained
therein not misleading. The Company has specifically disclosed
obligations owing under promissory notes assumed by the Company from its
predecessor limited liability companies, totaling approximately $1.5
million for past wages owing to, and loans from, key employees, which
notes are acknowledged by Purchaser as continuing obligations of the
Company, after closing.
2.3 Leases. The Company has disclosed to Purchaser all leases
pursuant to which the Company leases real or personal property. All such
leases are valid, binding and enforceable in accordance with their terms,
and are in full force and effect; there are no existing material defaults
by the Company thereunder; no event of default has occurred which
(whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute a default thereunder; and
all lessors under such leases have consented (where such consent is
necessary) to the consummation of the transactions contemplated by this
Agreement without requiring modification in the rights or obligations of
the lessee under such leases. Executed counterparts of all consents
referred to the preceding sentence will be delivered to Purchaser at the
Closing.
2.4 Bank Accounts. The Company has disclosed to Acquiror the names
and locations of all banks, trust companies, savings and loan
associations and other financial institutions at which the Company
maintains safe deposit boxes or accounts of any nature and the names of
all persons authorized to draw thereon, make withdrawals therefrom or
have access thereto. At the Closing, the Company will deliver to Acquiror
copies of all records, including all signature or authorization cards,
pertaining to such bank accounts.
2.5 Employment Agreements. The Company has no employment
agreements in force or effect as of the Closing Date, except as and to
the extent specifically disclosed at Schedule D hereto. Notwithstanding
the foregoing, Purchaser acknowledges that it is the Company's desire and
intent, after the date of closing, to preserve or enter into agreements
with certain key individuals, identified at Schedule D, under key terms
and conditions also set forth in said Schedule, and Purchaser consents to
such employment plans. The Company further represents and confirms that
it has obtained or, by the closing date, shall obtained agreements of
confidentiality and nondisclosure from all current employees and,
furthermore, that his has obtained or, by the closing date, shall have
obtained from all key employees agreements not to compete with the
Company while employed by Company or for a period of three years after
the termination of employment, for any reason, and within any
geographical market in which the Company is actively engaged at any time
over the period of employment.
2.6 Ownership of Patent Applications. The Company has acquired and
holds, by assignment, for valuable consideration, all rights, title and
interest in and to that certain Patent Application now pending before the
United States Patent and Trademark Office, identified as Application No.
09/431,121, now pending, originally filed by Troy Kearl, on October 29,
1999, relating to an "isolated portal interface controller and method for
a virtual physical key expandable CD-ROM or other data storage device."
2.7 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other
claims, judgments, injunctions or restrictions, either threatened,
pending or outstanding against or involving the Company or its
subsidiaries, if any, or Shareholders, or their respective assets,
properties, or business, nor does the Company, its subsidiaries or
Sharehodlers know, or have reasonable grounds to know, of any basis for
any such proceedings, investigations or inquiries, product liability or
other claims, judgments, injunctions or restrictions. In addition, there
are no material proceedings existing, pending or reasonably contemplated
to which any officer, director, or affiliate of the Company or as to
which the Shareholders are a party adverse to the Company or any of its
subsidiaries or has a material interest adverse to the Company or any of
its subsidiaries.
2.8 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and
other taxes (including any interest or penalties relating thereto) and
assessments which are due and payable have been duly reported, fully paid
and discharged as reported by the Company, and there are no unpaid taxes
which are, or could become a lien on the properties and assets of the
Company, except as provided for in the financial statements of the
Company, or have been incurred in the normal course of business of the
Company since that date. All tax returns of any kind required to be filed
have been filed and the taxes paid or accrued.
2.9 Financials. True copies of the financial statements of the
Company and its predecessor limited liability companies, consisting of
the balance sheets as of the fiscal year ended December 31, 1999, and
statements of operations, statements of cash flows, and statements of
stockholder's equity for said fiscal year and for the two-month period
ending February 29, 2000, have been delivered by the Company to
Purchaser. Said financial statements are true and correct in all material
respects and present an accurate and complete disclosure of the financial
condition of the Company and its predecessors as of February 29, 2000,
and the earnings for the periods covered, in accordance with generally
accepted accounting principles applied on a consistent basis. Statements
examined and certified by Crouch, Bierwolf & Chisolm, Certified Public
Accountants, will be furnished to Purchaser by May 31, 2000.
2.10 Ownership of Stock.
a. Shareholders are, and will be, as of the closing date, the
sole owners of all of the outstanding shares of the Company, which
shares are and will be free from any claims, liens, or other
encumbrances, and Shareholders have the unqualified right to transfer
said shares.
b. The Company is successor in interest to, and holds all
rights, title and interest in and to all assets, business interests and
good will of Uniq Studios, LLC and Uniq Multimedia, LLC, f/k/a Uniq
Enterprises, LLC, all Utah limited liability companies.
c. The Company's Shares constitute validly issued shares of
the Company, fully paid and nonassessable.
2.11 Agreement and Purchaser Shares.
a. Shareholders acknowledge that each Shareholder has been
supplied with this Agreement and that each is familiar with and
understands its contents.
b. Shareholders each represent and warrant that, in
determining to acquire the shares of Purchaser, each has relied solely
on his own analysis of information obtained from Purchaser and on the
advice of Shareholder's legal counsel and accountants or other
financial advisors with respect to the tax and other consequences
involved in acquiring Purchaser Shares.
c. Each Shareholder understands and acknowledges that rights
in the Purchaser Shares will be governed by the terms and conditions of
the Agreement.
2.12 Accuracy of All Statements Made by Company. No representation
or warranty by the Company and the Shareholders in this Agreement, nor
any statement, certificate, schedule or exhibit hereto furnished or to be
furnished by or on behalf of the Company or the Shareholders pursuant to
this Agreement, nor any document or certificate delivered to the
Purchaser pursuant to this Agreement or in connection with actions
contemplated hereby, contains or shall contain any untrue statement of
material fact or omits or shall omit a material fact necessary to make
the statement contained therein not misleading.
All foregoing representations and warranties shall survive closing of the
purchase hereunder.
3. Security Act Provisions.
3.1 Restrictions on Disposition of Shares. The Shareholders
jointly and severally covenant and warrant that the shares received are
acquired for their own accounts and not with the present view towards the
distribution thereof and that they will not dispose of such shares except
(i) pursuant to an effective registration statement under the Securities
Act of 1933, as amended, or (ii) in any other transaction which, in the
opinion of counsel, acceptable to the Purchaser, is exempt from
registration under the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder. In
order to effectuate the covenants of this sub-section, an appropriate
endorsement will be placed upon each of the certificates of common stock
of the Purchaser at the time of distribution of such shares by the
Company pursuant to this Agreement, and stop transfer instructions shall
be placed with the transfer agent for the securities.
3.2 Evidence of Compliance With Private Offering Exemption. Each
Shareholder represents and warrants that (i) Shareholder is at least 21
years of age; (ii) Shareholder is a United States citizen; (iii)
Shareholder has adequate means of providing for Shareholder's current
needs and personal contingencies; (iv) Shareholder has no need for
liquidity in Shareholder's investments; (v) Shareholder maintains his or
her principal residence at the address shown in Schedule A; and (vi) all
investments in and commitments to non-liquid investments are, and after
the purchase of Purchaser Shares will be, reasonable in relation to
Shareholder's net worth and current needs. The Shareholders represent
that they have each received adequate information about the business and
history of the Purchaser and the financial statements of the Purchaser,
and all other documents and disclosures required or requested by
Shareholders. Unless otherwise designated to the Purchaser, the
Shareholders represent that they have such knowledge of finance,
securities, and investments, generally, to evaluate the risks of the
transaction set forth in this Agreement, and that the financial capacity
of the Shareholder is of such proportion that the total cost of each
Shareholder's commitment in the shares would not be material when
compared with the total financial capacity of each. Each Shareholder
understand that he/she must bear the economic risk of the investment for
an indefinite period of time because the shares to be issued by the
Purchaser hereunder have not been registered under applicable securities
laws and therefore cannot be sold unless they are subsequently registered
under such securities laws or an exemption from such registration is
available; that each certificate will bear a restrictive legend to the
effect that the shares have not been registered under securities laws and
are therefore restricted on transferability and sale of such shares; and
that stop transfer instructions will be placed upon such shares with the
transfer agent of the Purchaser concerning such restrictions.
3.3 Notice of Limitations on Disposition. The Shareholders and
each of them represent that they are aware that the shares distributed to
them will not have been registered pursuant to the Securities Act of
1933, as amended or under the securities laws of any state and are
subject to substantial restrictions on transfer as described in the
Agreement. Each Shareholder further understands that (i) Purchaser has no
obligation or intention to register any Purchaser Shares for resale or
transfer under the 1933 Act or any state securities laws. Shareholders
therefore understand and acknowledge, specifically, that under current
interpretations and applicable rules, they may have to retain such shares
for a period of as long as two years and at the expiration of such period
such sales may be confined to brokerage transactions of limited amounts
requiring certain notification filings with the Securities and Exchange
Commission and such disposition may be available only if the Purchaser is
current in its filings with the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended, or other public
disclosure requirements, and the other limitations imposed thereby on the
disposition of shares of the Purchaser.
3.4 Shareholder Reliance on Professional Counsel. Each Shareholder
acknowledges that he/she has been encouraged to rely upon the advice of
Shareholder's legal counsel and accountants or other financial advisors
with respect to the tax and other considerations relating to the purchase
of Purchaser Shares and has been offered, during the course of
discussions concerning the acquisition of Purchaser Shares, the
opportunity to ask such questions and inspect such documents (including
the books and records and financial statements) concerning Purchaser and
its business and affairs as Shareholder has requested so as to understand
more fully the nature of the investment and to verify the accuracy of the
information supplied.
3.5 No Government Review or Opinion. Each Shareholder acknowledges
and understands that no federal or state agency, including the Securities
and Exchange Commission or the securities commission or authorities of
any state, has approved or disapproved the Purchaser Shares, passed upon
or endorsed the merits of any offering, or made any finding or
determination as to the fairness of the Purchaser Shares for public
investment.
3.6 Truth of Representations. Each Shareholder acknowledges and
understands that the Purchaser Shares are being offered and sold under
the terms of this Agreement in reliance on specific exemptions from the
registration requirements of federal and state laws and that Purchaser is
relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments, and understandings set forth herein in order
to determine the Shareholders' suitability to acquire the Purchaser
Shares. Each Shareholder thus represents and warrants that the
information set forth herein concerning or relating to such Shareholder
is true and correct.
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants as follows:
4.1 Organization and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Nevada with full power and authority to enter into and
perform the transactions contemplated by this Agreement.
4.2 Performance of this Agreement. The execution and performance
of this Agreement and the issuance of stock contemplated hereby have been
authorized by the board of directors of the Purchaser and, if necessary,
by Purchaser's shareholders.
4.3 Operating Capital to be Advanced to Company: Purchaser is
fully informed of and acknowledges the Company's cash flow needs. In that
connection, Purchaser confirms its agreement to advance to Company
sufficient funds (not to exceed $2,000,000.00 over the remaining portion
of calendar year 2000, with sums beyond that date to be to determined,
based on the Company's performance). Such funds are to be dedicated to
operating capital and to satisfy or service note obligations owing by
Company, as disclosed hereunder, assumed by Company in consideration for
Company's acquisition of title and interest in all assets, property,
business interest and good will of Uniq Studios, LLC and Uniq
Enterprises, LLC. Copies of summaries of all said note obligations are
attached hereto as Schedule "C." All funds thus advanced are intended,
and shall be posted, as loans from Purchaser to the Company and shall be
repaid from Company's available operating revenue, with interest at the
periodic prime rate published by BankOne, Utah, N.A. As and to the extent
that said funds are utilized, in the discretion of the Company's
management and directors, to pay down or satisfy existing loan
obligations, Purchaser shall, upon satisfaction of said notes, be
subrogated to the rights of the payees thereunder.
4.3 Financials. True copies of the financial statements of the
Purchaser consisting of the unaudited balance sheets as of the fiscal
year ended December 31, 1999, and statements of operations, statements of
cash flows, and statements of stockholder's equity for said fiscal year
have been delivered by the Purchaser to the Company. Said financial
statements are true and correct in all material respects and present an
accurate and complete disclosure of the financial condition of the
Purchaser as of December 31, 1999, and the earnings for the periods
covered, in accordance with generally accepted accounting principles
applied on a consistent basis. Statements examined and certified by
Crouch, Bierwolf & Chisolm, Certified Public Accountants, will be
furnished to Shareholders by April 21, 2000.
4.4 Liabilities. There are no material liabilities of the
Purchaser, whether accrued, absolute, contingent or otherwise, which
arose or relate to any transaction of the Purchaser, its agents or
servants which are not disclosed by or reflected in said financial
statements. As of the date hereof, there are no known circumstances,
conditions, happenings, events or arrangements, contractual or otherwise,
which may hereafter give rise to liabilities, except in the normal course
of business of the Purchaser.
4.5 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other
claims, judgments, injunctions or restrictions, either threatened,
pending or outstanding against or involving the Purchaser or its
subsidiaries, if any, or their assets, properties, or business, nor does
the Purchaser or its subsidiaries know, or have reasonable grounds to
know of any basis for any such proceedings, investigations or inquiries,
product liability or other claims judgments, injunctions or restrictions.
4.6 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and
other taxes (including any interest or penalties relating thereto) and
assessments which are due and payable have been duly reported, fully paid
and discharged as reported by the Purchaser, and there are no unpaid
taxes which are, or could become a lien on the properties and assets of
the Purchaser. All tax returns of any kind required to be filed have been
filed and the taxes paid or accrued.
4.7 Legality of Shares to be Issued. The shares of common stock of
the Purchaser to be delivered pursuant to this Agreement, when so
delivered, will have been duly and validly authorized and issued by the
Purchaser and will be fully paid and nonassessable.
4.8 No Covenant as to Tax Consequences. It is the desire of the
parties hereto that this transaction be undertaken as a reorganization
under Section 368(a)(1)(B) of the Internal Revenue Code, qualifying for a
tax-free exchange of securities. Notwithstanding, it is expressly
understood and agreed that neither the Purchaser nor its officers or
agents has made any warranty or agreement, expressed or implied, as to
the tax consequences of the transactions contemplated by this Agreement
or the tax consequences of any action pursuant to or growing out of this
Agreement.
4.9 Accuracy of All Statements Made by the Purchaser. No
representation or warranty by the Purchaser in this Agreement, nor any
statement, certificate, schedule or exhibit hereto furnished or to be
furnished by the Purchaser pursuant to this Agreement, nor any document
or certificate delivered to the Company or the Shareholders pursuant to
this Agreement or in connection with actions contemplated hereby,
contains or shall contain any untrue statement of material fact or omits
to state or shall omit to state a material fact necessary to make the
statement contained therein not misleading.
5. Conditions Precedent to the Purchaser's Obligations. Each and every
obligation of the Purchaser to be performed on the closing date shall be subject
to the satisfaction prior thereto of the following conditions:
5.1 Truth of Representations and Warranties. The representations
and warranties made by the Company and the Shareholders in this Agreement
or given on their behalf hereunder shall be substantially accurate in all
material respects on and as of the closing date with the same effect as
though such representations and warranties had been made or given on and
as of the closing date.
5.2 No Material Adverse Change. As of the closing date there shall
not have occurred any material adverse change, financially or otherwise,
which materially impairs the ability of the Company to conduct its
business or the earning power thereof on the same basis as in the past.
5.3 Accuracy of Financial Statements. The Purchaser and its
representatives shall be satisfied as to the accuracy of all balance
sheets, statements of income and other financial statements of the
Company furnished to the Purchaser herewith.
5.4 Time Limit on Closing. Closing shall have taken place by April
14, 2000, unless otherwise agreed between the Company and Purchaser in
writing.
6. Conditions Precedent to Obligations of the Company and the
Shareholder. Each and every obligation of the Company and the Shareholders to be
performed on the closing date shall be subject to the satisfaction prior thereto
of the following conditions:
6.1 Truth of Representations and Warranties. The representations
and warranties made by the Purchaser in this Agreement or given on its
behalf hereunder shall be substantially accurate in all material respects
on and as of the closing date with the same effect as though such
representations and warranties had been made or given on and as of the
closing date.
6.2 No Material Adverse Change. As of the closing date there shall
not have occurred any material adverse change, financially or otherwise,
which materially impairs the ability of the Purchaser to conduct its
business.
6.3 Accuracy of Financial Statements. The Company and the
Shareholders shall be satisfied as to the accuracy of all balance sheets,
statements of income and other financial statements of the Purchaser
furnished to the Company herewith.
6.4 Time Limit on Closing. Closing shall have taken place by April
14, 2000, unless otherwise agreed between the Company and Purchaser in
writing.
7. Appointment of New Officers and Directors. Upon and as a condition of
closing this Agreement:
7.1 At closing the Company will deliver the resignations of Troy
Kearl and Dusty Kearl, as directors and/or officers of the Company, and
any other persons who may be officers or directors of the Company as of
the date of closing as officers.
7.2 Prior to closing the Purchaser will furnish material
information of Shane Hackett and William Chipman as nominees to be
appointed to fill the vacancies created by the foregoing resignations.
Clayton Kearl shall remain as a director of the Company until his
successor is duly appointed.
8. Closing.
8.1 Time and Place. The closing of this transaction ("closing")
shall take place at the offices of iShopper.com, Inc., 8722 South 300
West, Sandy, Utah 84070 on or before 5:00 p.m., Friday, April 14, 2000,
or at such other time and place as the parties hereto shall agree upon.
Such date is referred to in this agreement as the "closing date."
8.2 Documents To Be Delivered by the Company and the Shareholders.
At the closing the Company and the Shareholders shall deliver to the
Purchaser the following documents:
a. Certificates for the number of shares of common stock of
the Company in the manner and form required by subsection 1.1.
hereof.
b. Such other documents of transfer, certificates of
authority and other documents as the Purchaser may reasonably
request.
8.3 Documents To Be Delivered by the Purchaser. At the closing the
Purchaser shall deliver to the Company and the Shareholders the following
documents:
a. Certificates for the number of shares of common stock of
the Purchaser as determined in subsection 1.2. hereof.
b. Such other documents of transfer, certificates of
authority and other documents as the Company and/or the
Shareholders may reasonably request.
9. Publicity. The parties agree that no publicity, release or other
public announcement concerning the transaction contemplated by this letter of
intent shall be issued by any party hereto without the advance approval of both
the form and substance of the same by the other parties and their counsel, which
approval, in the case of any publicity, release or other public announcement
required by applicable law, shall not be unreasonably withheld or delayed.
10. Default. Should any party to this Agreement default in any of the
covenants, conditions, or promises contained herein, the defaulting party shall
pay all costs and expenses, including a reasonable attorney's fee, which may
arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder or by the statutes of the State of Utah.
11. Assignment. This Agreement may not be assigned in whole or in part by
the parties hereto without the prior written consent of the other party or
parties, which consent shall not be unreasonably withheld.
12. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and assigns.
13. Partial Invalidity. If any term, covenant, condition or provision of
this Agreement or the application thereof to any person or circumstance shall to
any extent be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to persons or circumstances other than
those as to which it is held to be invalid or unenforceable shall not be
affected thereby and each term, covenant, condition or provision of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law.
14. No Other Agreements. This Agreement constitutes the entire Agreement
between the parties and there are and will be no oral representations which will
be binding upon any of the parties hereto.
15. Survival of Covenants, Representations and Warranties. All covenants,
representations, and warranties made herein to any parties or in any statement
or document delivered to any party hereto, shall survive the making of this
Agreement and the Closing.
16. Further Action. The parties hereto agree to execute and deliver such
additional documents and to take such other and further action as may be
required to carry out fully the transaction(s) contemplated herein.
17. Amendment. This Agreement or any provision hereof may not be changed,
waived, terminated or discharged except by means of a written supplemental
instrument signed by the party or parties against whom enforcement of the
change, waiver, termination, or discharge is sought.
18. Headings. The descriptive headings of the various Sections or parts
of this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
19. Counterparts. This agreement may be executed in two or more partially
or fully executed counterparts, each of which shall be deemed an original and
shall bind the signatory, but all of which together shall constitute but one and
the same instrument.
20. Full Knowledge. By their signatures, the parties acknowledge that
they have carefully read and fully understand the terms and conditions of this
Agreement, that each party has had the benefit of counsel, or has been advised
to obtain counsel, and that each party has freely agreed to be bound by the
teens and conditions of this Agreement.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Stock
Exchange Agreement as of the day and year first above written.
PURCHASER: iSHOPPER.com, INC.
By /s/
------------------------------
William E. Chipman, Sr., CFO
COMPANY: UNIQ STUDIOS, INC.
By /s/
------------------------------
Troy C. Kearl, President
SHAREHOLDERS:
/s/ /s/
- ------------------------------- --------------------------------
Clayton F. Kearl Troy Kearl
/s/ /s/
- ------------------------------- --------------------------------
Devin O. Kearl Dusty Kearl
<PAGE>
SCHEDULE "A"
TO
STOCK EXCHANGE AGREEMENT
NO. OF SHARES OF NO. OF SHARES OF
NAME OF THE COMPANY THE PURCHASER
SHAREHOLDER TO BE TRANSFERRED TO BE ISSUED
- --------------- -------------------- -----------------
Clayton F. Kearl 600,000 600,000
Troy Kearl 600,000 600,000
Devin O. Kearl 150,000 150,000
Dusty Kearl 150,000 150,000
-------------- --------------
TOTAL 1,500,000 1,500,000
<PAGE>
SCHEDULE "B"
TO
STOCK EXCHANGE AGREEMENT
Options granted to Shareholders, collectively, to purchase up to 500,000
restricted common shares of Purchaser, at an exercise price of 80% of the market
bid price per share as of close of business on the day of closing shall vest as
follows:
Options to purchase 250,000 shares (granted as to 100,000 shares for Clayton
Kearl, 100,000 shares for Troy Kearl, 25,000 shares for Devin Kearl and 25,000
shares for Dusty Kearl) shall vest upon the Company's achieving total revenue of
$2.5 million within twelve (12) months (by March 31, 2001) and profit/loss
breakeven on month-to-month activity.
Options to purchase 250,000 shares (granted as to 100,000 shares for Clayton
Kearl, 100,000 shares for Troy Kearl, 25,000 shares for Devin Kearl and 25,000
shares for Dusty Kearl) shall vest upon the Company's achieving total revenue of
$7.5 million within twenty-four (24) months (by March 31, 2002) and continued
profitability.
<PAGE>
SCHEDULE "C"
TO
STOCK EXCHANGE AGREEMENT
SUMMARY OF OUTSTANDING UNIQ STUDIOS LOAN OBLIGATIONS
Copies of all promissory note and related loan obligations assumed by Company
from its predecessor limited liability companies, totaling $1,499,981.50, and to
be paid from operating funds advanced by Purchaser to Company, are attached.
<PAGE>
SCHEDULE "D"
TO
STOCK EXCHANGE AGREEMENT
Copies of the Company's employment agreements with the following key employees
are attached and hereby disclosed:
Name Position Annual Salary
- ---- -------- -------------
Clayton Kearl Special Consultant $104,000.00
Troy Kearl President, COO $104,000.00
Devin Kearl Vice President $ 75,400.00
Dusty Kearl Asst. Designer $ 39,000.00
In addition, Company intends to enter into employment agreements with the
following:
Walter J. Wilcox Illustrator
Spencer Jacobs Designer
STOCK EXCHANGE AGREEMENT
This Agreement is entered into as of the date stated below by and among
Totalinet.net, Inc., a privately-held Nevada corporation (hereinafter the
"Company"), Richard J. Scavia, the owner of all outstanding shares of the
Company (the "Shareholder"), and iShopper.com, Inc., a Nevada corporation,
(hereinafter "Purchaser").
RECITALS
1. The Company is successor in interest to all rights, title, interest,
assets and business interests of RJS Internet Services;
2. Shareholder owns all outstanding shares of the Company;
3. Purchaser desires to acquire from the Shareholders, and Shareholders
desire to convey to Purchaser, all of the issued and outstanding shares of the
Company, in exchange for certain shares of Purchaser, all upon the terms and
subject to the conditions of this Agreement and in accordance with the laws of
the State of Nevada; and
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms and covenants set
forth herein, the Purchaser, the Company, and the Shareholder approve and
adopt this Stock Exchange Agreement and mutually covenant and agree with each
other as follows:
1. Shares to be Transferred and Shares to be Issued.
1.1 On the closing date the Shareholder shall transfer to the
Purchaser certificates for the number of shares of the common stock of
the Company described in Schedule "A", attached hereto and incorporated
herein, which in the aggregate shall represent all of the issued and
outstanding shares of the common stock of the Company. Such certificates
shall be duly endorsed in blank by the Shareholder or accompanied by
duly executed stock powers in blank with signatures guaranteed.
1.2 In exchange for the transfer of the common stock of the
Company pursuant to subsection 1.1. hereof, the Purchaser shall on the
closing date and contemporaneously with such transfer of the common stock
of the Company to it by the Shareholder issue to the Shareholder a total
of 200,000 common shares of Purchaser, issued and restricted under S.E.C.
Rule 144. Said shares shall be deemed to be issued and delivered at
closing, in amounts specified on Schedule "A," and upon delivery of all
of Shareholders' shares in the Company. Certificates for Shareholders'
shares of Purchaser shall be delivered to Shareholders as soon after
closing as Purchaser's transfer agent is able to prepare such
certificates upon delivery of all of Shareholders' shares in the Company.
The certificates delivered to Shareholders pursuant to this Agreement
shall bear a legend in substantially the following form:
"The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended,
or under the securities laws of any state. The shares of stock
have been acquired for investment and may not be sold, offered
for sale or transferred in the absence of an effective
registration under the Securities Act of 1933, as amended, and
any applicable state securities laws, or an opinion of counsel
satisfactory in form and substance to counsel for
iShopper.com, Inc. that the transaction shall not result in a
violation of federal or state securities laws."
1.3 In further consideration for the transfer of common stock of
the Company pursuant to subsection 1.1 hereof, Purchaser and Shareholders
agree, in proportions equal to their respective interests specified at
Schedule "A" that 100,000 of the common shares described in subsection
1.1 hereof, are subject to escrow and shall be released in equal
increments of 25,000 shares each upon satisfaction by Company of those
performance conditions [to be mutually agreed upon] described at Schedule
"B" hereto.
2. Representations and Warranties of the Company and Shareholders. The
Company and Shareholders represent and warrant as follows:
2.1 Ownership of Stock.
a. Shareholders are, and will be, as of the closing date, the
sole owners of all of the outstanding shares of the Company, which
shares are and will be free from any claims, liens, or other
encumbrances, and Shareholders have the unqualified right to transfer
said shares.
b. The Company's Shares constitute validly issued shares of
the Company, fully paid and nonassessable.
2.2 Agreement and Purchaser Shares.
a. Shareholders acknowledge that each Shareholder has been
supplied with this Agreement and that each is familiar with and
understands its contents.
b. Shareholders each represent and warrant that, in
determining to acquire the shares of Purchaser, each has relied solely
on his own analysis of information obtained from Purchaser and on the
advice of Shareholder's legal counsel and accountants or other
financial advisors with respect to the tax and other consequences
involved in acquiring Purchaser Shares.
c. Each Shareholder understands and acknowledges that the
Purchaser Shares will be governed by the terms and conditions of the
Agreement.
d. Each Shareholder represents and warrants that the Purchaser
Shares being acquired will be acquired for each Shareholder's own
account without a view to public distribution or resale and that no
Shareholder has any contract, undertaking, agreement, or arrangement to
sell or otherwise transfer or dispose of any Purchaser Shares or any
portion thereof to any person;
e. Each Shareholder represents and warrants that he/she (i)
can bear the economic risk of the purchase of Purchaser Shares,
including the loss of his or her entire investment, (ii) has such
knowledge and experience in business and financial matters as to be
capable of evaluating the merits and risks of an investment in
Purchaser Shares, (iii) understands that there is no guarantee that the
actual performance of Purchaser under any circumstances will match any
projections which may have been made, and that such actual performance
may differ substantially from what is represented in any such
projections.
f. Each Shareholders acknowledges and understands that the
Purchaser Shares have not been registered under the 1933 Act or the
securities laws of any state and are subject to substantial
restrictions on transfer as described in the Agreement.
g. Each Shareholder agrees and represents that Shareholders
will not sell or otherwise transfer ownership or dispose of any
Purchaser Shares or any portion thereof unless (i) such Purchaser
Shares are registered under the 1933 Act and any applicable state
securities laws or Shareholder obtains an opinion of counsel which is
satisfactory to Purchaser that such Purchaser Shares may be sold in
reliance on an exemption from such registration requirements, and (ii)
the transfer is otherwise made in accordance with this Agreement.
h. Each Shareholder understands that (i) Purchaser has no
obligation or intention to register any Purchaser Shares for resale or
transfer under the 1933 Act or any state securities laws or to take any
action (including the filing of reports or the publication of
information as required by Rule 144 under the 1933 Act) which would
make available any exemption from the registration requirements of any
such laws and (ii) Shareholders therefore may be precluded from selling
or otherwise transferring ownership of or disposing of any Purchaser
Shares or any portion thereof for an indefinite period of time or at
any particular time.
i. Each Shareholder acknowledges that he/she has been
encouraged to rely upon the advice of Shareholder's legal counsel and
accountants or other financial advisors with respect to the tax and
other considerations relating to the purchase of Purchaser Shares and
has been offered, during the course of discussions concerning the
acquisition of Purchaser Shares, the opportunity to ask such questions
and inspect such documents (including the books and records and
financial statements) concerning Purchaser and its business and affairs
as Shareholder has requested so as to understand more fully the nature
of the investment and to verify the accuracy of the information
supplied.
j. Each Shareholder represents and warrants that (i)
Shareholder is at least 21 years of age; (ii) Shareholder is a United
States citizen; (iii) Shareholder has adequate means of providing for
Shareholder's current needs and personal contingencies; (iv)
Shareholder has no need for liquidity in Shareholder's investments; (v)
Shareholder maintains his or her principal residence at the address
shown in Schedule A; and (vi) all investments in and commitments to
non-liquid investments are, and after the purchase of Purchaser Shares
will be, reasonable in relation to Shareholder's net worth and current
needs.
k. Each Shareholder acknowledges and understands that no
federal or state agency including the Securities and Exchange
Commission or the securities commission or authorities of any state has
approved or disapproved the Purchaser Shares, passed upon or endorsed
the merits of any offering, or made any finding or determination as to
the fairness of the Purchaser Shares for public investment.
l. Each Shareholder acknowledges and understands that the
Purchaser Shares are being offered and sold under the terms of this
Agreement in reliance on specific exemptions from the registration
requirements of federal and state laws and that Purchaser is relying
upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments, and understandings set forth herein in
order to determine the Shareholders' suitability to acquire the
Purchaser Shares.
m. Each Shareholder represents and warrants that the
information set forth herein concerning or relating to such Shareholder
is true and correct.
n. Each Shareholder represents and warrants that Shareholder
is an "accredited investor" as that term is defined in Regulation D
promulgated under the Securities Act of 1933 (the "1933 Act"), in that
he or she (i) has an individual net worth, or joint net worth with his
or her spouse, of at least $1,000,000, or (ii) has had individual
income in excess of $200,000, or joint income with his or spouse in
excess of $300,000, in each of the last two years, and has a reasonable
expectation of reaching the same income level in the current year.
3. Representations and Warranties of the Company and Shareholders. The
Company and all Shareholders represent and warrant as follows:
3.1 Organization and Authority.
a. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Nevada, with full power and authority to enter into and perform
the transactions contemplated by this Agreement.
b. The outstanding shares of the Company are legally and
validly issued, fully paid and nonassessable.
c. The minute book of the Company made available to the
Purchaser contains the Articles of Incorporation of the Company,
Bylaws, and complete and accurate records of all meetings and
other corporate actions of the shareholders and the board of
directors (and any committee thereof) of the Company.
3.2 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other
claims, judgments, injunctions or restrictions, either threatened,
pending or outstanding against or involving the Company or its
subsidiaries, if any, or Shareholders, or their respective assets,
properties, or business, nor does the Company, its subsidiaries or
Sharehodlers know, or have reasonable grounds to know, of any basis for
any such proceedings, investigations or inquiries, product liability or
other claims, judgments, injunctions or restrictions. In addition, there
are no material proceedings existing, pending or reasonably contemplated
to which any officer, director, or affiliate of the Company or as to
which the Shareholders are a party adverse to the Company or any of its
subsidiaries or has a material interest adverse to the Company or any of
its subsidiaries.
3.3 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and
other taxes (including any interest or penalties relating thereto) and
assessments which are due and payable have been duly reported, fully paid
and discharged as reported by the Company, and there are no unpaid taxes
which are, or could become a lien on the properties and assets of the
Company, except as provided for in the financial statements of the
Company, or have been incurred in the normal course of business of the
Company since that date. All tax returns of any kind required to be filed
have been filed and the taxes paid or accrued.
3.4 Prior Business of Totalinet. All of the information contained
in the books and records of Company and all other predecessor entities,
complete copies of which have been furnished to the Purchaser, are true
and correct in all material respects and do not contain any untrue
statement of material fact or omit a material fact necessary to make the
statement contained therein not misleading.
3.5 Leases. The Company has disclosed to Purchaser all leases
pursuant to which the Company leases real or personal property. All such
leases are valid, binding and enforceable in accordance with their terms,
and are in full force and effect; there are no existing material defaults
by the Company thereunder; no event of default has occurred which
(whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute a default thereunder; and
all lessors under such leases have consented (where such consent is
necessary) to the consummation of the transactions contemplated by this
Agreement without requiring modification in the rights or obligations of
the lessee under such leases. Executed counterparts of all consents
referred to the preceding sentence will be delivered to Purchaser at the
Closing.
3.6 Bank Accounts. The Company has disclosed to Acquiror the names
and locations of all banks, trust companies, savings and loan
associations and other financial institutions at which the Company
maintains safe deposit boxes or accounts of any nature and the names of
all persons authorized to draw thereon, make withdrawals therefrom or
have access thereto. At the Closing, the Company will deliver to Acquiror
copies of all records, including all signature or authorization cards,
pertaining to such bank accounts.
3.7 Employment Agreements. The Company has no employment
agreements in force or effect as of the Closing Date, except as and to
the extent specifically disclosed at Schedule C hereto. Notwithstanding
the foregoing, Purchaser acknowledges that it is the Company's desire and
intent, after the date of closing, to enter into agreements with certain
key individuals, identified at Schedule C, under key terms and conditions
also set forth in said Schedule C and Purchaser consents to such
employment plans. The Company further represents and confirms that it has
obtained or, by the closing date, shall obtained agreements of
confidentiality and nondisclosure from all current employees and,
furthermore, that his has obtained or, by the closing date, shall have
obtained from all key employees agreements not to compete with the
Company while employed by Company or for a period of three years after
the termination of employment, for any reason, and within any
geographical market in which the Company is actively engaged at any time
over the period of employment.
3.8 Accuracy of All Statements Made by Company. No representation
or warranty by the Company and the Shareholders in this Agreement, nor
any statement, certificate, schedule or exhibit hereto furnished or to be
furnished by or on behalf of the Company or the Shareholders pursuant to
this Agreement, nor any document or certificate delivered to the
Purchaser pursuant to this Agreement or in connection with actions
contemplated hereby, contains or shall contain any untrue statement of
material fact or omits or shall omit a material fact necessary to make
the statement contained therein not misleading.
All foregoing representations and warranties shall survive closing of the
purchase hereunder.
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants as follows:
4.1 Organization and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Nevada with full power and authority to enter into and
perform the transactions contemplated by this Agreement.
4.2 Performance of this Agreement. The execution and performance
of this Agreement and the issuance of stock contemplated hereby have been
authorized by the board of directors of the Purchaser and, if necessary,
by Purchaser's shareholders.
4.3 Financials. True copies of the financial statements of the
Purchaser consisting of the balance sheets as of the fiscal year ended
December 31, 1999, and statements of operations, statements of cash
flows, and statements of stockholder's equity for said fiscal year and
for the one-month period ending January 31, 2000, have been delivered by
the Purchaser to the Company. These statements have been examined and
certified by Crouch, Bierwolf & Chisholm, Certified Public Accountants.
Said financial statements are true and correct in all material respects
and present an accurate and complete disclosure of the financial
condition of the Purchaser as of December 31, 1999, and the earnings for
the periods covered, in accordance with generally accepted accounting
principles applied on a consistent basis.
4.4 Liabilities. There are no material liabilities of the
Purchaser, whether accrued, absolute, contingent or otherwise, which
arose or relate to any transaction of the Purchaser, its agents or
servants which are not disclosed by or reflected in said financial
statements. As of the date hereof, there are no known circumstances,
conditions, happenings, events or arrangements, contractual or otherwise,
which may hereafter give rise to liabilities, except in the normal course
of business of the Purchaser.
4.5 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other
claims, judgments, injunctions or restrictions, either threatened,
pending or outstanding against or involving the Purchaser or its
subsidiaries, if any, or their assets, properties, or business, nor does
the Purchaser or its subsidiaries know, or have reasonable grounds to
know of any basis for any such proceedings, investigations or inquiries,
product liability or other claims judgments, injunctions or restrictions.
4.6 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and
other taxes (including any interest or penalties relating thereto) and
assessments which are due and payable have been duly reported, fully paid
and discharged as reported by the Purchaser, and there are no unpaid
taxes which are, or could become a lien on the properties and assets of
the Purchaser. All tax returns of any kind required to be filed have been
filed and the taxes paid or accrued.
4.7 Legality of Shares to be Issued. The shares of common stock of
the Purchaser to be delivered pursuant to this Agreement, when so
delivered, will have been duly and validly authorized and issued by the
Purchaser and will be fully paid and nonassessable.
4.8 No Covenant as to Tax Consequences. It is expressly understood
and agreed that neither the Purchaser nor its officers or agents has made
any warranty or agreement, expressed or implied, as to the tax
consequences of the transactions contemplated by this Agreement or the
tax consequences of any action pursuant to or growing out of this
Agreement.
4.9 Accuracy of All Statements Made by the Purchaser. No
representation or warranty by the Purchaser in this Agreement, nor any
statement, certificate, schedule or exhibit hereto furnished or to be
furnished by the Purchaser pursuant to this Agreement, nor any document
or certificate delivered to the Company or the Shareholders pursuant to
this Agreement or in connection with actions contemplated hereby,
contains or shall contain any untrue statement of material fact or omits
to state or shall omit to state a material fact necessary to make the
statement contained therein not misleading.
5. Conditions Precedent to the Purchaser's Obligations. Each and every
obligation of the Purchaser to be performed on the closing date shall be subject
to the satisfaction prior thereto of the following conditions:
5.1 Truth of Representations and Warranties. The representations
and warranties made by the Company and the Shareholders in this Agreement
or given on their behalf hereunder shall be substantially accurate in all
material respects on and as of the closing date with the same effect as
though such representations and warranties had been made or given on and
as of the closing date.
5.2 No Material Adverse Change. As of the closing date there shall
not have occurred any material adverse change, financially or otherwise,
which materially impairs the ability of the Company to conduct its
business or the earning power thereof on the same basis as in the past.
5.3 Accuracy of Financial Statements. The Purchaser and its
representatives shall be satisfied as to the accuracy of all balance
sheets, statements of income and other financial statements of the
Company furnished to the Purchaser herewith.
5.4 Time Limit on Closing. Closing shall have taken place by March
31, 2000.
6. Conditions Precedent to Obligations of the Company and the
Shareholder. Each and every obligation of the Company and the Shareholders to be
performed on the closing date shall be subject to the satisfaction prior thereto
of the following conditions:
6.1 Truth of Representations and Warranties. The representations
and warranties made by the Purchaser in this Agreement or given on its
behalf hereunder shall be substantially accurate in all material respects
on and as of the closing date with the same effect as though such
representations and warranties had been made or given on and as of the
closing date.
6.2 No Material Adverse Change. As of the closing date there shall
not have occurred any material adverse change, financially or otherwise,
which materially impairs the ability of the Purchaser to conduct its
business.
6.3 Accuracy of Financial Statements. The Company and the
Shareholders shall be satisfied as to the accuracy of all balance sheets,
statements of income and other financial statements of the Purchaser
furnished to the Company herewith.
6.4 Time Limit on Closing. Closing shall have taken place by April
7, 2000.
7. Security Act Provisions.
7.1 Restrictions on Disposition of Shares. The Shareholders
jointly and severally covenant and warrant that the shares received are
acquired for their own accounts and not with the present view towards the
distribution thereof and that they will not dispose of such shares except
(i) pursuant to an effective registration statement under the Securities
Act of 1933, as amended, or (ii) in any other transaction which, in the
opinion of counsel, acceptable to the Purchaser, is exempt from
registration under the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder. In
order to effectuate the covenants of this sub-section, an appropriate
endorsement will be placed upon each of the certificates of common stock
of the Purchaser at the time of distribution of such shares by the
Company pursuant to this Agreement, and stop transfer instructions shall
be placed with the transfer agent for the securities.
7.2 Evidence of Compliance With Private Offering Exemption. The
Shareholders agree to supply the Purchaser with evidence of the financial
sophistication of the Shareholders or evidence of appointment of a
sophisticated investment representative and such other items as counsel
for the Purchaser may require in order to evidence the private offering
character of the distribution of shares made pursuant to this Agreement.
The Shareholders represent that they have each received adequate
information about the business and history of the Purchaser and the
financial statements of the Purchaser, and all other documents and
disclosures required or requested by Shareholders. Unless otherwise
designated to the Purchaser, the Shareholders represent that they have
such knowledge of finance, securities, and investments, generally, to
evaluate the risks of the transaction set forth in this Agreement, and
that the financial capacity of the Shareholder is of such proportion that
the total cost of each Shareholder's commitment in the shares would not
be material when compared with the total financial capacity of each. Each
Shareholder understand that he/she must bear the economic risk of the
investment for an indefinite period of time because the shares to be
issued by the Purchaser hereunder have not been registered under
applicable securities laws and therefore cannot be sold unless they are
subsequently registered under such securities laws or an exemption from
such registration is available; that each certificate will bear a
restrictive legend to the effect that the shares have not been registered
under securities laws and are therefore restricted on transferability and
sale of such shares; and that stop transfer instructions will be placed
upon such shares with the transfer agent of the Purchaser concerning such
restrictions.
7.3 Notice of Limitation Upon Disposition. The Shareholders and
each of them represent that they are aware that the shares distributed to
them will not have been registered pursuant to the Securities Act of
1933, as amended; and, therefore, under current interpretations and
applicable rules, they may have to retain such shares for a period of as
long as two years and at the expiration of such period such sales may be
confined to brokerage transactions of limited amounts requiring certain
notification filings with the Securities and Exchange Commission and such
disposition may be available only if the Purchaser is current in its
filings with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, or other public disclosure
requirements, and the other limitations imposed thereby on the
disposition of shares of the Purchaser.
8. Appointment of New Officers and Directors. Upon and as a condition of
closing this Agreement:
8.1 At closing the Purchaser will deliver the resignations of
Richard Scavia, as directors and/or officers of the Purchaser, and any
other persons who may be officers or directors of the Purchaser as of the
date of closing as officers.
9. Closing.
9.1 Time and Place. The closing of this transaction ("closing")
shall take place at the offices of the Company, Friday, April 7, 2000, or
at such other time and place as the parties hereto shall agree upon. Such
date is referred to in this agreement as the "closing date."
9.2 Documents To Be Delivered by the Company and the Shareholders.
At the closing the Company and the Shareholders shall deliver to the
Purchaser the following documents:
a. Certificates for the number of shares of common stock of
the Company in the manner and form required by subsection 1.1.
hereof.
b. Such other documents of transfer, certificates of
authority and other documents as the Purchaser may reasonably
request.
9.3 Documents To Be Delivered by the Purchaser. At the closing the
Purchaser shall deliver to the Company and the Shareholders the following
documents:
a. Certificates for the number of shares of common stock of
the Purchaser as determined in subsection 1.2. hereof.
b. Such other documents of transfer, certificates of
authority and other documents as the
Company and/or the Shareholders may reasonably request.
10. Publicity. The parties agree that no publicity, release or other
public announcement concerning the transaction contemplated by this letter of
intent shall be issued by any party hereto without the advance approval of both
the form and substance of the same by the other parties and their counsel, which
approval, in the case of any publicity, release or other public announcement
required by applicable law, shall not be unreasonably withheld or delayed.
11. Default. Should any party to this Agreement default in any of the
covenants, conditions, or promises contained herein, the defaulting party shall
pay all costs and expenses, including a reasonable attorney's fee, which may
arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder or by the statutes of the State of Utah.
12. Assignment. This Agreement may not be assigned in whole or in part by
the parties hereto without the prior written consent of the other party or
parties, which consent shall not be unreasonably withheld.
13. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and assigns.
14. Partial Invalidity. If any term, covenant, condition or provision of
this Agreement or the application thereof to any person or circumstance shall to
any extent be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to persons or circumstances other than
those as to which it is held to be invalid or unenforceable shall not be
affected thereby and each term, covenant, condition or provision of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law.
15. No Other Agreements. This Agreement constitutes the entire Agreement
between the parties and there are and will be no oral representations which will
be binding upon any of the parties hereto.
16. Survival of Covenants, Representations and Warranties. All covenants,
representations, and warranties made herein to any parties or in any statement
or document delivered to any party hereto, shall survive the making of this
Agreement and the Closing.
17. Further Action. The parties hereto agree to execute and deliver such
additional documents and to take such other and further action as may be
required to carry out fully the transaction(s) contemplated herein.
18. Amendment. This Agreement or any provision hereof may not be changed,
waived, terminated or discharged except by means of a written supplemental
instrument signed by the party or parties against whom enforcement of the
change, waiver, termination, or discharge is sought.
19. Headings. The descriptive headings of the various Sections or parts
of this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
20. Counterparts. This agreement may be executed in two or more partially
or fully executed counterparts, each of which shall be deemed an original and
shall bind the signatory, but all of which together shall constitute but one and
the same instrument.
21. Full Knowledge. By their signatures, the parties acknowledge that
they have carefully read and fully understand the terms and conditions of this
Agreement, that each party has had the benefit of counsel, or has been advised
to obtain counsel, and that each party has freely agreed to be bound by the
teens and conditions of this Agreement.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Stock
Exchange Agreement as of the day and year first above written.
PURCHASER: iSHOPPER.com, INC.
By /s/ William E. Chipman, Sr.
-------------------------------
William E. Chipman, Sr., [CFO]
COMPANY: TOTALINET, INC.
By: /s/ Richard J. Scavia
---------------------------
Richard J. Scavia, President
SHAREHOLDERS: /s/ Richard J. Scavia
---------------------------
Richard J. Scavia
/s/ Timothy P. Peck
--------------------------
Timothy P. Peck
<PAGE>
SCHEDULE "A"
TO THE
STOCK EXCHANGE AGREEMENT
NO. OF SHARES OF NO. OF SHARES OF
NAME OF THE COMPANY THE PURCHASER
SHAREHOLDER TO BE TRANSFERRED TO BE ISSUED
- ------------ ------------------ ----------------
Richard Scavia 15,000 150,000
1482 C Gustavo
El Cajon, CA 92019
Tim Beck 5,000 50,000
<PAGE>
SCHEDULE "B"
TO THE
STOCK ESCROW AGREEMENT
Shareholders agree to escrow 100,000 common shares pursuant to the issuance
described in subsection 1.1 hereof, and shall be released in equal increments of
25,000 shares each as described below:
25,000 shares shall be released upon conversion of the entire iShopper.com
platform to Totalinet.
25,000 shares shall be released upon a total of 2,500 web sites that are hosted
under the new iShopper platform after conversion by December 31, 2000.
25,000 shares shall be released upon all monthly overhead and expenses are to be
covered by hosting fees that are generated from the new iShopper platform by
December 31, 2000.
25,000 shares shall be released upon that Totalinet.net, Inc's. revenue will
exceed five million dollars ($5,000,000) annually, within two years after date
of closing.
<PAGE>
SCHEDULE "C"
TO THE
STOCK EXCHANGE AGREEMENT
NAME OF
EMPLOYEE
- ---------
Richard Scavia
Timothy Beck
BUSINESS PURCHASE AND
STOCK ACQUISITION AGREEMENT
AGREEMENT as of this 1st day of November, 1999, by and among
Nowseven.com, Inc., a Delaware corporation ("Nowseven"), Douglas Shane Hackett
and Robin R. Hackett, TBE ("Shareholders"), owners of all of the outstanding
shares of Nowseven, and iShopper.com, Inc., a Nevada corporation ("iShopper").
The parties hereto agree as follows:
A. FACTS AND OBJECTIVES
iShopper desires to acquire from Shareholders all of the outstanding
shares of Nowseven in exchange for certain shares of iShopper, and Shareholders
desire to exchange all the shares of Nowseven owned by them for shares of stock
of iShopper, according to the terms herein.
B. TERMS AND CONDITIONS
1. Plan of Reorganization. Shareholders are the owners of all of the
issued and outstanding stock of Nowseven, which consists of 1,500 shares of
common stock of the par value of $0.01 per share (the "Nowseven Shares"). It is
the intention of the parties hereto that all of the issued and outstanding
capital stock of Nowseven will be acquired by iShopper in exchange solely for
1,000,000 shares of the restricted common stock of iShopper (the "iShopper
Shares").
2. Exchange and Delivery of Shares. iShopper and Shareholder agree that
the Nowseven Shares will be exchanged with iShopper for the iShopper Shares. On
the closing date, Shareholders will deliver a stock certificate or certificates
for all of the outstanding stock of Nowseven, duly endorsed by Shareholders, as
their interests may appear, so as to make iShopper the sole owner of the
Nowseven Shares, free and clear of all liens, claims and encumbrances; iShopper
shall deliver at or before closing certificates of stock totaling 1,000,000
shares to Shareholders in proportion to their respective interests in the
Nowseven Shares, or as Shareholders may direct.
The certificates delivered to Shareholders pursuant to this Agreement shall bear
a legend in substantially the following form (to which terms Shareholders
agree):
"The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended,
or under the securities laws of any state. The shares of stock
have been acquired for investment and may not be sold, offered
for sale or transferred in the absence of an effective
registration under the Securities Act of 1933, as amended, and
any applicable state securities laws, or an opinion of counsel
satisfactory in form and substance to counsel for
iShopper.com, Inc. that the transaction shall not result in a
violation of federal or state securities laws."
3. Representations and Warranties of Shareholders. Shareholder and
Nowseven represent and warrant as follow:
a. Shareholders are and will be as of the closing date, the
sole owner of all of the outstanding shares of Nowseven, which shares
are and will be free from any claims, liens, or other encumbrances, and
Shareholders have the unqualified right to transfer said shares.
b. The Nowseven Shares constitute validly issued shares of
Nowseven, fully paid and nonassessable.
c. The financial statements of Nowseven attached hereto as
Exhibit A fairly and accurately represent the financial condition of
Nowseven as of the date of said statements; there has been no material
change in the financial condition of Nowseven since the date of said
statements except as set forth in Exhibit B; there are no substantial
liabilities, either fixed or contingent, not reflected in such
financial statements other than contracts or obligations in the usual
course of business; and no such contracts or obligations in the usual
course of business are liens or other liabilities which, if disclosed,
would alter substantially the financial condition of Nowseven as
reflected in such financial statements.
d. Neither Nowseven nor any Shareholder is involved in any
pending litigation or governmental investigation or proceeding, and no
threats or claims of litigation or governmental investigation have been
asserted against Nowseven, except as set forth at Exhibit C.
e. Shareholders have been supplied with this Agreement are
familiar with and understands its contents.
f. Shareholders, in determining to acquire the iShopper
Shares, have relied solely on their own analysis of information
obtained from iShopper and the advice of Shareholders' legal counsel
and accountants or other financial advisors with respect to the tax and
other consequences involved in purchasing iShopper Shares.
g. Shareholders understand and acknowledge that their rights
to the iShopper Shares will be governed by the terms and conditions of
the Agreement.
h. The iShopper Shares being acquired will be acquired for
Shareholders' own accounts without a view to public distribution or
resale and that Shareholders have no contract, undertaking, agreement,
or arrangement to sell or otherwise transfer or dispose of any iShopper
Shares or any portion thereof to any person;
i. Shareholders (i) can bear the economic risk of the purchase
of iShopper Shares, including the loss of their respective and entire
investment, (ii) have such knowledge and experience in business and
financial matters as to be capable of evaluating the merits and risks
of an investment in iShopper Shares, (iii) understand that there is no
guarantee that the actual performance of iShopper under any
circumstances will match and projections which may have been made, and
that such actual performance may differ substantially from what is
represented in any such projections.
j. Shareholders acknowledge and understands that the iShopper
Shares have not been registered under the 1933 Act or the securities
laws of any state and are subject to substantial restrictions on
transfer as described in the Agreement.
k. Shareholders will not sell or otherwise transfer ownership
or dispose of any iShopper Shares or any portion thereof unless (i)
such iShopper Shares are registered under the 1933 Act and any
applicable state securities laws or Shareholder obtains an opinion of
counsel which is satisfactory to iShopper that such iShopper Shares may
be sold in reliance on an exemption from such registration
requirements, and (ii) the transfer is otherwise made in accordance
with this Agreement.
l. Shareholders understands that (i) iShopper has no
obligation or intention to register any iShopper Shares for resale or
transfer under the 1933 Act or any state securities laws or to take any
action (including the filing of reports or the publication of
information as required by Rule 144 under the 1933 Act) which would
make available any exemption from the registration requirements of any
such laws and (ii) Shareholder therefore may be precluded from selling
or otherwise transferring ownership of or disposing of any iShopper
Shares or any portion thereof for an indefinite period of time or at
any particular time.
m. Shareholders acknowledges that Shareholder has been
encouraged to rely upon the advice of Shareholder's legal counsel and
accountants or other financial advisors with respect to the tax and
other considerations relating to the purchase of iShopper Shares and
has been offered, during the course of discussions concerning the
acquisition of iShopper Shares, the opportunity to ask such questions
and inspect such documents (including the books and records and
financial statements) concerning iShopper and its business and affairs
as Shareholder has requested so as to understand more fully the nature
of the investment and to verify the accuracy of the information
supplied.
n. (i) Shareholders are each at least 21 years of age; (ii)
Shareholders are all United States citizens; (iii) Shareholders have
adequate means of providing for Shareholders' current needs and
personal contingencies; (iv) Shareholders have no need for liquidity in
Shareholders' investments; (v) Shareholders maintain their respective
principal residences at the addresses shown below for each; and (vi)
all investments in and commitments to non-liquid investments are, and
after the purchase of iShopper Shares will be, reasonable in relation
to Shareholders' respective net worth and current needs.
o. Shareholders understand that no federal or state agency
including the Securities and Exchange Commission or the securities
commission or authorities of any state has approved or disapproved the
iShopper Shares, passed upon or endorsed the merits of the Offering, or
made any finding or determination as to the fairness of the iShopper
Shares for public investment.
p. Shareholders understand that the iShopper Shares are being
offered and sold in reliance on specific exemptions from the
registration requirements of federal and state laws and that iShopper
is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments, and understandings set forth
herein in order to determine the suitability of Shareholder to acquire
the iShopper Shares.
q. That the information set forth herein concerning
Shareholder is true and correct.
r. Shareholders are all "accredited investors" as that term is
defined in Regulation D promulgated under the Securities Act of 1933
(the "1933 Act"), in that each (i) has an individual net worth, or
joint net worth with his or her spouse, of at least $1,000,000, or (ii)
has had individual income in excess of $200,000, or joint income with
his or spouse in excess of $300,000, in each of the last two years, and
has a reasonable expectation of reaching the same income level in the
current year.
4. Representations and Warranties of iShopper
a. As of the closing date, the iShopper shares to delivered to
Shareholder will constitute the valid and legally issued shares of
iShopper, fully paid and nonassessable.
b. The officers of iShopper are duly authorized to execute the
agreement and have obtained any authorization required of its
stockholders.
c. As of the closing date, iShopper will be in good standing
as a Nevada corporation.
d. The financial statements of iShopper attached hereto as
Exhibit D fairly and accurately represent the financial condition of
iShopper as of the date of said statements; there has been no material
change in the financial condition of iShopper since the date of said
statements except as set forth in Exhibit E; there are no substantial
liabilities, either fixed or contingent, not reflected in such
financial statements other than contracts or obligations in the usual
course of business; and no such contracts or obligations in the usual
course of business are liens or other liabilities which, if disclosed,
would alter substantially the financial condition of iShopper as
reflected in such financial statements.
5. Conditions of Closing. The closing shall occur not later than
December 3, 1999 at 11:00 a.m., at the offices of iShopper, at on such date and
at such time as the parties mutually agree, and shall be effective as of
November 20, 1999.
6. Delivery of Records. Shareholder agrees to deliver on or before the
closing date, or at such time as may be mutually agreeable to the parties, such
documents and corporate records as iShopper may request.
7. Survival. All representations and warranties herein shall survive
the closing.
8. Governing Law. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of Utah, and venue with respect to any
dispute shall be fixed in the Third Judicial District Court, in and for Salt
Lake County, State of Utah.
9. Notices. All communications under this Agreement shall be in
writing, shall be delivered personally, sent by facsimile transmission or mailed
by first class mail, postage prepaid, to the telecopy numbers or addresses
specified below, or to such other telecopy number or address as any party hereto
may have furnished in writing to the others, and shall be deemed to be given on
the date of delivery if served personally, or the first business day after being
sent by telecopy, or the third business day after mailing:
If to iShopper: Mr. Adam Maher
350 South 400 East, Suite 304
Salt Lake City, Utah 84111
Fax No. (801)366-5613
If Shareholders: Douglas Shane Hackett
Robin R. Hackett
1900 Auaqua Dr.
Longwood, FL 32779
Fax No. (407) 333-9447
9. Amendment and Waiver: This Agreement may be amended, and observance
of any term of this agreement may be waived, with (and only with) the written
consent of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed to be or shall constitute a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver.
10. Severability. In the event that any particular provision(s) of this
Agreement shall for any reason hereafter be determined to be unenforceable, or
in violation of any law, governmental order or regulation, such unenforceability
or violation shall not affect the remaining provisions of this agreement, which
shall continue in full force and effect and be binding upon the respective
parties hereto.
11. Attorneys' Fees. The non-prevailing party, as determined by the
Court, in a judicial proceeding for breach of any of the provisions of this
Agreement shall be fully responsible for and pay the prevailing party's
reasonable attorneys' fees, costs, and expenses.
12. Captions. The section and/or paragraph titles or captions used in
this Agreement are inserted only as and intended solely for convenience of
reference, and shall in no manner modify, limit, explain, construe, describe the
scope of intent, or in any other way affect the terms of this Agreement.
SHAREHOLDERS
_______/s/__________________
_______/s/__________________
NOWSEVEN.com, INC.
By_______/s/___________________
Douglas S. Hackett
Its Sole Director
iSHOPPER.com, INC.
By____________________________
William E. Chipman, Sr.
Its CFO
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter the "Agreement"), is entered
into to be effective as of the __22nd__ day of __November__, 1999, by and
between iSHOPPER, INC., a Nevada corporation (hereinafter referred to as the
"Company") and ___DOUGLAS SHANE HACKETT____ (hereinafter referred to as
"Employee").
WITNESSETH:
WHEREAS, the Company desires the knowledge, skills, and ability of the
Employee for the benefit of the Company; and
WHEREAS, the Employee wishes to be employed by the Company in
accordance with the terms of this Agreement; and
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, and of the salary, wages, or other compensations paid for Employee's
services in the course of Employee's employment, the Company and the Employee
agree as follows:
A. Employment - The Company hereby employs the Employee upon the terms
and conditions hereinafter set forth, and the Employee hereby accepts employment
upon said terms and conditions.
B. Employment Duties - The Company hereby employs the Employee in the
position of _CHIEF EXECUTIVE OFFICER ("CEO")_ of the Company, and Employee shall
perform all duties that are customarily performed by one holding such a
position, and all other duties hereafter reasonably assigned to Employee by the
board of directors and president of Company. The Employee shall perform all of
his duties at such place or places as the interest, needs, business or
opportunity of the Company shall reasonably require.
C. Best Efforts and Devotion of Employee - Employee will faithfully,
and to the best of Employee's ability, experience and talents, perform all of
the employment duties that are required of Employee under this Agreement
including devoting necessary business time to and for the benefit of the Company
and keeping free from conflicts or activities which would be detrimental to or
interfere with the business of the Company or the performance of Employee's
duties for and on behalf of the Company. Employee further agrees to use his/her
best efforts to comply with any and all Company policies and with instructions
from the Company that the Company may give Employee from time to time through
its board of directors and/or president to promote and maintain the success,
quality, professionalism and reputation of the Company.
D. Term of Employment - The term of this Agreement shall be for an
initial period of two years, subject to termination only in accordance with
paragraph L. At the end of the initial term, and each year thereafter, this
Agreement shall automatically renew for an additional year, unless the Company
or Employee elects not to renew the Agreement and provides written notice of
such election at least 60 days prior to the end of the term.
E. Compensation - For the duties and services to be performed by
Employee hereunder, the Company shall pay Employee and Employee agrees to accept
the salary and other benefits described below in this paragraph.
Employee shall receive a base salary of $300,000 per year, with an
additional $9,600 per year as a car allowance, payable in installments at such
times as the other executive officers of the Company are paid, but not less
frequently than monthly. The base salary shall be reviewed annually by the
Company's Board of Directors or its compensation committee and any increase will
be effective as of the date determined appropriate by the Board or its
compensation committee. Employee's base salary, as in effect from time to time
hereunder, shall not be decreased during the term of this Agreement.
Employee shall also receive, as additional compensation, and upon
execution of this Agreement by both parties hereto, one million (1,000,000)
shares of the Company's restricted common stock, issued pursuant to Rule 144 of
the rules of the Securities Exchange Commission. Employee is also granted rights
to up to one million (1,000,000) additional shares of the Company's restricted
common stock, which rights shall vest upon satisfaction of those certain
performance milestones, and at the rates identified to each milestone, all as
detailed at Addendum A attached hereto, which addendum has been initialed by
both parties to this Agreement and by this reference is incorporated herein.
EMPLOYEE ACKNOWLEDGES THAT THE SHARES THUS RECEIVED AND TO WHICH EMPLOYEE MAY BE
ENTITLED ARE NOT AND WILL NOT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, (THE "ACT") AND ARE BEING ISSUED IN RELIANCE UPON EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF THE ACT. EMPLOYEE FURTHER ACKNOWLEDGES
THAT SUCH SECURITIES MAY NOT BE REOFFERED OR RESOLD UNLESS THE SECURITIES ARE
REGISTERED UNDER THE ACT, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT IS AVAILABLE.
Employee shall also be eligible to participate in the Company's
incentive stock option plan, which the Company shall adopt and implement on or
prior to December 31, 1999. By virtue of his position in management, Employee
shall have input into the terms and provisions of said stock option plan
documents. At a minimum, however, options granted to Employee under said plan
shall vest as and at a rate and under terms not less favorable than the most
favorable terms granted to the Company's President and other executive
employees. The plan documents shall also govern the termination of any option
rights that are not fully vested upon the termination of the employment of
Employee, but shall provide for rights to unvested options in the event of (1)
change of control of the Company, (2) termination of employment by the Company
without cause, (3) termination by Employee with good reason, or (4) Employee's
death or disability, all as shall be defined in the plan documents.
Employee shall also be authorized to incur and shall be reimbursed by
the Company for reasonable expenses, provided that such expenses are
substantiated in accordance with Company policies, as the same are adopted from
time to time by management or the Board of Directors.
F. Confidentiality - Except as required in the performance of Employee's work
for the Company, Employee will not use or disclose any Confidential Information
of the Company, either during or after Employee's employment with the Company.
As used herein, "Confidential Information" means information, including any
formula, pattern, compilation, program, device, method, technique, or process,
that: (i) derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy. For purposes of this Agreement, "Confidential Information"
includes both information disclosed to Employee by the Company and information
developed by Employee in the course and within the scope of Employee's
employment with the Company, but shall not include any information which would
otherwise constitute "Confidential Information" hereunder but which (1) was
developed by Employee at times when the Employee was not discharging his duties
hereunder and (2) was not developed utilizing any resources, including
proprietary information, of the Company.
The types and categories of information which the Company considers to
be its Confidential Information include: (a) specifications, descriptions,
designs, dimensions and tolerances of products, parts and components; (b) plans,
blueprints, part and assembly drawings and circuit diagrams; (c) computer
programs (whether in the form of source code, object code or any other form
including software, firmware, and programmable array logic), formulas,
algorithms, methods, techniques, processes, designs, specifications, diagrams,
flow charts, manuals, descriptions, instructions, explanations, improvements,
and the ideas, systems and methods of operation contained in such programs; (d)
information concerning or resulting from research and development work performed
by or on behalf of the Company; (e) information concerning the Company's
management, financial condition, financial operations, purchasing activities,
sales activities, marketing activities and business plans; (f) information
acquired or compiled by the Company concerning actual or potential customers;
and (g) all other types and categories of information (in whatever form) with
respect to which, under all the circumstances, Employee knows or has reason to
know that the Company intends or expects secrecy to be maintained and as to
which the Company has made reasonable efforts to maintain its secrecy.
The Company may also advise Employee from time to time as to
restrictions upon the use or disclosure of specified information which has been
licensed or otherwise disclosed to the Company by third parties pursuant to
license or confidential disclosure agreements which contain restrictions upon
the use or disclosure of such information. Employee agrees to abide by the
restrictions upon use and/or disclosure contained in such agreements. In
addition, Employee will not use or disclose to the Company any confidential or
proprietary information belonging to others without the consent of the person to
whom such information is confidential, and Employee represents that Employee's
employment with the Company will not require the use of such information or the
violation of any confidential relationship with any third party.
If and when Employee's employment with the Company is terminated,
Employee shall neither use nor disclose the Confidential Information referred to
above except only upon the prior written authorization from the Company, and
Employee shall not take with Employee any data or information in any form
(including documents or copies thereof, notebooks or the like, or optical,
electromagnetic or machine-readable media) embodying any Confidential
Information or any original, copies or summaries of any business information,
research material, source code, object code, software, firmware, hardware,
manuals, schematics, diagrams, drafts, ideas, or records involving or in any way
relating to the research and development, operations, business, prospective
business, customers, or potential customers of the Company. If so requested by
Employee's immediate supervisor or by any officer of the Company, Employee will
provide the Company with a list of all items taken by Employee upon termination
of employment together with a certification in writing that such items do not
constitute Confidential Information of the Company. If so requested, Employee
will allow the Company to make a copy of all such items for archive purposes.
Employee also agrees that Employee will not destroy or erase any data or
information in any form (including documents or copies thereof, notebooks or the
like, or optical, electromagnetic or machine-readable media) located in or
stored in the Company's computers or files located on the Company's premises,
nor will Employee transfer by electronic mail means or otherwise to Employee or
to any third party located away from the Company's premises any data or
information stored or recorded in the Company's computers, magnetic or optical
media or files.
The restrictions on disclosure contained herein shall apply (i) whether
or not the information was obtained by the Company from third parties; and (ii)
whether or not such Confidential Information has been identified by the Company
as confidential.
If Employee is requested or required pursuant to applicable law by any
governmental authority to disclose any Confidential Information, he shall
provide the Company with prompt written notice of such request or requirement so
that the Company may seek a protective order or other appropriate remedy. If, in
the absence of a protective order or other remedy, Employee is legally compelled
to disclose such Confidential Information, he may without liability under this
Agreement, disclose that portion of the Confidential Information which he is
legally compelled to disclose.
The Company acknowledges that Employee has and shall have rights to
maintain interests and responsibilities with business entities other than the
Company whose business interests are similar to or may overlap with the
Company's business. Those entities in which Employee holds more than 5%
ownership interest have been disclosed to the Company and are hereby disclosed
at Addendum B attached hereto. Employee shall not be required to divest any of
Employee's interest or management responsibilities in any of the entities
disclosed at Addendum B. Furthermore, and notwithstanding any of the foregoing
provisions of this Section F, the provisions of this Section F shall not apply
to any portion of the Confidential Information that: (i) becomes a matter of
public knowledge through no fault of Employee; (ii) is rightfully received by
Employee from a third party, including any entity identified and disclosed at
Addendum B; (iii) was known to the Employee before his receipt from the Company;
or (iv) is independently developed by Employee, individually or in connection
with management of any of the entities identified and disclosed at Addendum B,
provided that such development is effected without use of the Company's
Confidential Information.
G. Other Property of the Company - All documents, notebooks, encoded
media, and other tangible items provided to Employee by the Company or prepared,
generated or created by Employee or others in connection with any business
activity of the Company are the property of the Company. Upon termination of
Employee's employment with the Company, Employee will promptly deliver to the
Company all such documents, media and other items in Employee's possession,
including all complete or partial copies, recordings, abstracts, notes or
reproductions of any kind made from or about such documents, media, items or
information contained therein.
Employee will neither have nor claim any right, title, or interest in
any trademark, service mark or trade name owned or used by the Company.
H. Inventions and Works of Authorship - Employee hereby irrevocably
assigns to the Company all of Employee's right, title and interest in and to any
and all Inventions and Works of Authorship made, generated or conceived by
Employee within the scope of and during the period of Employee's employment with
the Company, and Employee agrees to and shall disclose all such Inventions and
Works of Authorship to the Company in writing. As used herein, "Invention" means
any discovery, improvement, innovation, idea, formula, or shop right (whether or
not patentable, whether or not put into writing, and whether or not put into
practice) made, generated, or conceived by Employee (whether alone or with
others) while employed by the Company. As used herein, "Work of Authorship"
means any original work of authorship within the purview of the copyright laws
of the United States of America, and both the Company and Employee intend that
all Works of Authorship created by Employee in the course of Employee's
employment with the Company will be works made for hire within the meaning and
purview of such copyright laws.
In connection with any such Inventions or Works of Authorship, Employee
agrees: (i) To disclose in writing to such person as the Company may designate
(if no such person is so designated, then to the president or chief executive
officer), promptly and fully all inventions, improvements or discoveries of
whatever kind or description made, conceived, developed or first reduced to
practice by Employee, either solely or in collaboration with others in the
performance of Employee's duties, during the period of Employee's employment
with the Company which relate to the present or anticipated business of the
Company involving its ongoing product development or anything prepared within
the scope of Employee's duties or to anything done upon the time or with the
facilities (including equipment or supplies purchased or provided by the
Company) or funding of the Company. All such disclosures shall be prompt and in
all cases prior to any sale, offer for sale, public use, or public disclosures
of such inventions, improvements, or discoveries. (ii) To do everything
reasonably necessary or required, at the request of the Company, to vest in the
Company Employee's entire right, title and interest in and to such inventions,
improvements, and discoveries including executing all documents and performing
all acts reasonably necessary or required for making application for the benefit
of the Company for letters patent or copyrights in the United States and
throughout the world for such inventions, improvements, and discoveries and
executing assignments of such patents or applications therefor to the Company.
Employee further agrees to assist and cooperate with the Company (its successors
and assigns) at its request and expense in any controversy or proceeding
involving or relating to such inventions, improvements, and discoveries
including any patents which may issue thereon. (iii) To keep and maintain, or
assist in keeping and maintaining, such records (such as a laboratory notebook
properly and periodically witnessed and understood) as will show the conception,
reduction to practice and operation of all of the aforesaid inventions,
improvements or discoveries as well as such other records as the Company may
request, which records shall be and remain the property of, and available to,
the Company. (iv) To adequately document all source code developed by Employee
for or on behalf of the Company or any client or potential client of the
Company. Source code documentation shall be considered adequate if it is
sufficient to allow a programmer who is familiar with the language in which the
source code is written, but who is unfamiliar with the source code or the
purpose of the program or subroutine for which it is written, to read and
understand the source code as written. (v) To refrain from revealing to any
person, unless authorized in writing by the Company or its duly authorized
representative, any information concerning its inventions, improvements or
discoveries. (vi) Except as noted at the end of this Agreement or attached
hereto, there are at present no inventions, improvements or discoveries that
have been made, conceived or first reduced to practice by me, either solely or
in collaboration with others, which Employee desires to remove from the
operation of this Agreement.
Employee will execute and assign any and all applications, assignments,
and other documents and will render all assistance which may be reasonably
necessary for the Company to obtain patent, copyright, or any other form of
intellectual property protection in all countries. The Company will pay Employee
$500.00 for each patent issued to the Company upon which Employee's name appears
as an inventor. For purposes of this Agreement, any Invention relating directly
to the business of the Company or to the Company's actual or demonstrably
anticipated research or development with respect to which Employee files a
patent application within one year after termination of employment with the
Company shall be presumed to be an Invention conceived by Employee during the
period of Employee's employment with the Company, rebuttable only by accurate,
written and duly corroborated evidence that such Invention was not first
conceived by Employee until after the termination of employment with the
Company.
THE FOREGOING PROVISIONS OF THIS SECTION H DO NOT APPLY TO ANY
INVENTION OR WORK OF AUTHORSHIP FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR
CONFIDENTIAL INFORMATION OF THE COMPANY WERE USED AND WHICH WAS DEVELOPED
ENTIRELY ON EMPLOYEE'S OWN TIME OR WITHIN THE SPECIFIC SCOPE OF EMPLOYEE'S
MANAGEMENT OF OR DUTIES TO ANY OF THE ENTITIES WHICH ARE DISCLOSED AT ADDENDUM
B, AND (1) WHICH DOES NOT RELATE (a) DIRECTLY TO THE BUSINESS OF THE COMPANY OR
(b) TO THE COMPANY'S ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT,
OR (2) WHICH DOES NOT RESULT FROM ANY WORK PERFORMED BY EMPLOYEE SPECIFICALLY
FOR THE COMPANY. HOWEVER, NOTWITHSTANDING COMPANY'S ACKNOWLEDGEMENT OF EMPLOYEES
INTERESTS IN AND DUTIES TO THOSE BUSINESS ENTITIES IDENTIFIED AT ADDENDUM B,
NOTHING HEREIN SHALL RESTRICT OR LIMIT THE GENERAL FIDUCIARY DUTY OF LOYALTY
OWED BY EMPLOYEE TO THE COMPANY.
Employee hereby grants to the Company, its successors and assigns an
perpetual, unlimited, unrestricted, royalty-free, fully paid-up, worldwide and
nonexclusive right and license, with the right to grant licenses and sublicenses
to others without accounting to Employee, with respect to all Background Rights
and all proprietary rights therein or based thereon. As used herein, "Background
Rights" means all source code, object code, programmable array logic, data,
documentation, software and information, in whatever form, used by Employee in
the Company's business and not first created or produced by Employee as a result
of Employee's employment by the Company, but included in and necessary to any
work product produced by Employee in the Company's business.
I. Restrictive Covenants - During the term of this Agreement, including
all extensions, even if earlier terminated, and for one year thereafter,
Employee shall not, except as otherwise specifically provided for herein:
solicit business related in any nature to the Company's business
(as that business exists from time to time over the period of
Employee's employment) from any person, firm or entity which was a
customer of the Company at any time within one (1) year preceding
the end of Employee's term of employment;
induce or attempt to induce any such customer of the Company to
reduce its business with the Company;
solicit business similar to or related to the Company's business
from any potential customer which the Company has solicited or
with which the Company has had active discussions concerning
potential business at any time during the one (1) year preceding
the end of Employee's term of employment;
either directly or indirectly engage in competition with the
Company or its affiliates, subsidiaries or parent, anywhere in the
world;
engage directly or indirectly as a proprietor, partner,
shareholder, director, officer, employee, agent, consultant, sales
representative or in any other capacity or manner whatsoever,
(except for ownership of a less than 5% stock ownership interest
in a publicly-traded corporation), in any business activity
competitive with the business of the Company or its affiliates,
subsidiaries or parent, anywhere in the world; and
induce or attempt to induce, directly or indirectly, any person
who is at the time employed by the Company to leave such
employment, interfere with or disrupt the Company's relationship
with any of its employees or customers or solicit any person
employed by the Company.
Employee expressly recognizes and acknowledges that the Company is
engaged in a business which is highly competitive, technology-intensive, and
world-wide in scope, and that any knowledge of the Confidential Information or
business affairs of the Company would give a competitor or potential competitor
unfair competitive advantage over the Company; that the Company's activities are
world-wide in character; that employment, directly or indirectly, of the
Employee anywhere in the area in which the Company conducts its business would
give to such competitor an unfair competitive advantage; and that the Employee
possesses valuable skills and knowledge which he has a legitimate right to
exploit. In recognition of the above, Employee hereby expressly agrees that the
restrictions on competition by Employee contained in this paragraph are
reasonable, will not overburden Employee and are in the best interests of both
the Company and Employee.
NOTWITHSTANDING ANY OF THE FOREGOING, EMPLOYEE SHALL NOT BE DEEMED TO
VIOLATE ANY OF THE FOREGOING RESTRICTIVE COVENANTS BY VIRTUE OF EMPLOYEES
EXISTING AND CONTINUING INTEREST IN AND DUTIES TO OR FOR THOSE ENTITIES
IDENTIFIED AT ADDENDUM B, INCLUDING THOSE WHICH MAY, FROM TIME TO TIME, BE
INVOLVED IN GENERAL BUSINESS PURSUITS SIMILAR TO THE COMPANY'S BUSINESS, AS THAT
BUSINESS EXISTS OR MAY HEREAFTER EVOLVE.
Employee shall not be bound by the Restrictive Covenants contained in
this paragraph I., nor any other obligations hereunder, if the Company
terminated Employee without Cause or if Employee terminates his employment for
Good Reason within the first year of the term of this Agreement.
J. Unfair Competitive Activities - During Employee's employment with
the Company, Employee will not plan, organize, or engage in any business
competitive with the Company or conspire with others to do so. Provided that
Employee otherwise preserves the Company's Confidential Information and
satisfies fiduciary duties owed to the Company by virtue of Employee's position
eith the Company Employee's involvement in ownership and management of the
entities disclosed at Addendum B shall not be deemed to violate the covenants of
this Section J.
K. Conflicts of Interest - Employee will not become involved in a
situation which creates a conflict of interest, including but not limited to
being connected directly or indirectly with any business (as owner,
officer-director, participant, licensee, consultant, shareholder, or the
recipient of wages) which is involved with any aspect of Employee's duties or
which is in direct or indirect competition with the Company, except as
specifically provided herein. Employee has disclosed to the Company Employee's
interests in those entities identified at Addendum B and shall report
immediately any circumstances or situations arising in the future that involve
Employee in an actual conflict of interest. This duty of disclosure includes the
reporting of any gifts, entertainment, or any other personal favors, exceeding
$500 in value, given to or received from anyone with whom the Company has or is
likely to have any business dealings which go beyond common courtesies usually
associated with accepted business practice.
L. Termination and Termination Payments and Rights.
Employee has the right to terminate his employment by the Company upon
not less than one (1) month prior written notice to the Company. In the event of
such election, Employee's employment shall terminate effective upon the date set
forth in such notice. In such event, the Company shall pay Employee all
compensation (including base salary as well as any bonus that has been earned on
or prior to the date of termination) due him to the date of termination.
The Company shall have the right to terminate Employee's employment
without Cause (as defined below) upon not less than thirty (30) days prior
written notice to Employee. If (i) the Company shall terminate Employee's
employment without Cause, or (ii) Employee shall terminate his employment for
Good Reason (as defined below), the Company shall pay Employee all compensation
and benefits due him through the expiration of the term hereof, set forth in
paragraph D, or for three (3) months after termination, whichever is later. Such
compensation and benefits include, but not limited to, salary at the highest
rate paid to Employee prior to such termination, and the continuation of all
Employee benefits and perquisites provided to Employee prior to the date of such
termination
The Company shall have the right to terminate Employee's employment
with Cause upon written notice to Employee. In such event, the Company shall pay
Employee all compensation due him to the date of his termination.
For purposes of this Agreement:
1. "Cause" shall mean (i) Employee's failure to honor
covenants or agreements under Sections F, G, H, I, J or K of this Agreement,
after notice of the failure and opportunity to refrain from such violative
activity or otherwise cure such failure or other willful and repeated failure to
comply with a lawful written direction of the board, (ii) gross negligence or
willful misconduct in the performance of duties to the Company and/or its
subsidiaries, causing material harm to the Company and its subsidiaries, taken
as a whole, (iii) commission of any act of criminal fraud with respect to the
Company and/or its subsidiaries, or (iv) conviction of a felony or a crime
involving moral turpitude causing material harm to the standing and reputation
of the Company and/or its subsidiaries as determined in good faith by the board
of directors. No act or failure to act will be considered "willful" unless it is
done, or omitted to be done, by Employee in bad faith. In addition, no act or
omission will constitute Cause unless (i) a resolution finding that cause
exists, has been approved by the majority of all of the members of the board at
a meeting at which Employee is allowed to appear with his legal counsel and (ii)
the Company has given detailed written notice thereof to Employee and, where
remedial action is feasible, he then fails to remedy the act or omission within
a reasonable time after receiving such notice.
2. "Good Reason" shall mean the occurrence of any of the
following events: (i) a reduction by the Company or its successor, of Employee's
base salary in effect from time to time hereunder; (ii) a requirement by the
Company, without good reason, that Employee relocate his residence from the
State of Florida; or (iii) the Company's material breach of this Agreement.
M. Indemnification - If Employee is made, or threatened to be made, a
party to any legal action or proceeding, whether civil or criminal, by reason of
the fact that Employee is or was an officer or Employee of the Company or serves
or served any other corporation in any capacity at Company's request, Employee
shall be indemnified by the Company, and the Company shall pay Employee's
related expenses, including reasonable attorneys' fees, when and as occurred,
all to the fullest extent permitted by law.
N. Successors - Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) or to all or substantially all of the Company's business and/or
assets shall assume in writing the obligations under this Agreement and agree
expressly to perform the obligations under this Agreement in the same manner and
to the same extent as the Company would be required to perform such obligations
in the absence of a succession. The terms of this Agreement and all of the
rights of the parties hereunder shall inure to the benefit of, and be
enforceable by, Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
O. Notice - Any notice required to be given under this Agreement shall
be sufficient if sent by certified or registered mail, postage prepaid, return
receipt requested, to the address of each respective party as is set forth under
the signature lines or as such other address a party may designate from time to
time in writing to the other party.
P. Remedies - The covenants set forth in Sections F, G, H, I and K
shall survive termination of this Agreement, and the existence of any claim or
cause of action of Employee against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of such covenants. The specific breach of any portion of Sections F, G,
H, I and K by Employee would cause irreparable injury to the Company, which
injury would not be adequately compensable in money damages and the Company
would not have an adequate remedy at law. Accordingly, Employee agrees that the
Company shall be entitled, in addition to other remedies and damages available,
to equitable remedies, including, but not limited to, an affirmative or negative
injunction (without necessity of posting or filing a bond or other security) to
restrain violation hereof by Employee or by partners, agents, servants,
employers, employees, and all persons acting for or with Employee. Employee also
acknowledges that said equitable relief, including an injunction, would not be
adverse to the public interest.
If any action is commenced to interpret this Agreement or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees and all other costs and expenses incurred in
that action or proceeding, in addition to any other relief to which such party
may be entitled.
In the event that Employee violates any of Employee's covenants or
agreements contained in Sections F, G, H, I and K the Company shall be entitled
to an accounting and repayment of all profits, compensation, royalties,
commissions, remunerations or benefits which Employee directly or indirectly
shall have realized or may realize relating to, growing out of or in connection
with any such violation; such remedy shall be in addition to and not in
limitation of any injunctive relief or other rights or remedies to which the
Company is or may be entitled at law or in equity or otherwise under this
Agreement.
Q. Obligations Unconditional - The obligations of the parties under
this Agreement are unconditional and do not depend upon the performance of any
agreements, duties, obligations, or terms outside this Agreement.
R. Applicable Law - This Agreement is executed and delivered within the
State of Utah and Employee agrees that it shall be construed, interpreted and in
accordance with the laws of that state. The court and authorities of the State
of Utah and the Federal District Court for the District of Utah shall have sole
jurisdiction and venue over all controversies which may arise with respect to
the execution, interpretation and compliance with this Agreement, and Employee
hereby waives any other jurisdiction and venue to which Employee may be entitled
by virtue of domicile or otherwise and irrevocably submits to the jurisdiction
of such courts with respect to all matters arising under or relating to this
Agreement. Further, should Employee initiate or bring a suit or action in any
state other then the State of Utah, Employee admits and agrees that upon
application by the Company said suit shall be dismissed without prejudice and
filed in a court in the State of Utah.
S. Assignment - The Company may, subject to the requirements of
paragraph N, assign this Agreement or its rights hereunder to any parent,
affiliate, shareholder, or successor of the Company, or to any person or entity
which purchases substantially all of the assets of the Company. Employee may not
transfer or assign this Agreement or any of Employee's rights or obligations
under this Agreement.
T. Binding Effect and Benefit - This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs, legal
and personal representatives, successors and permitted assigns.
U. Severability - Every provision of this Agreement shall be construed,
to the extent possible, so as to be valid and enforceable. If any provision of
this Agreement so construed is held by a court of competent jurisdiction to be
invalid, illegal or otherwise unenforceable, such provision shall be deemed
severed from this Agreement, and all other provisions shall remain in full force
and effect.
V. Entire Agreement - This Agreement sets forth the entire agreement
and understanding between the Company and Employee regarding the subject matter
hereof and supersedes all prior agreements and understandings regarding the same
subject matter. This Agreement may be modified or amended only by a written
document duly signed by both the Company and Employee.
W. Modification of Agreement - No waiver or modification of this
Agreement or of any term or condition herein contained shall be valid unless in
it is in writing and signed by Company and Employee, nor shall any waiver or
modification of this Agreement not duly executed as provided herein be deemed to
be a part of this Agreement under any circumstances. No one has authority,
actual or implied, to modify this Agreement orally. The parties hereto further
agree that the provisions of this Article may not be waived except as set forth
above.
X. Time - Time shall be of the essence with respect to this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement, delivery
of which is hereby acknowledged, to be effective as of the date first above
written.
EMPLOYEE:
__________________ ___________________________________
Date DOUGLAS SHANE HACKETT
Address: ____________________________
____________________________
iSHOPPER.com, Inc.
__________________ By: ________________________________
Date ___________________________________
Its:________________________________
Address: ___________________________
___________________________
<PAGE>
ADDENDUM "A" TO EMPLOYMENT AGREEMENT
Employee is entitled to 1,000,000 restricted common shares of iShopper.com, Inc.
stock, which entitlement shall vest in the stated amounts upon satisfaction by
iShopper.com, Inc. of the following described milestones by the stated dates.
Goal Date Shares
------ ------ ------
Acquisition of Nowseven.com for stock 12/31/1999 150,000
Establishment of new sales channels 05/01/2000 400,000
$30 million gross sales with proper
funding to close acquisitions 12/31/2000 150,000
Establish telesales division and realize
a total of $2 Million gross sales 08/30/2000 300,000
<PAGE>
ADDENDUM B TO EMPLOYMENT AGREEMENT
Employee has disclosed his interest in the following:
1. Hackett Media, Inc.: (Subchapter S); President; antique store and
advertising agency.
2. JCL Holdings, Inc.: (C Corp); President; holding company for real estate;
newsletter
3. Fortune Financial Systems of Nevada, Inc., and wholly-owned subsidiaries as
of 11/15/99: Public corp.; Director of parent company and various
subsidiaries.
4. Renegade Press, Inc.: President, Newsletter; web publishing
5. List Mart of Florida, Inc.: List management and rental
6. X Multimedia, Inc.: Investor; director
7. eFinanceOne.com: Investor; director
Memo of Understanding
This Memo of Understanding is entered into as of this 1st day of
December, 1999, effective for one year by and between iShopper, Inc., a Nevada
Corporation and William E. Chipman, Sr.
For the duties and services to be performed by William E. Chipman, Sr., he shall
receive the following:
Annual Salary $52,000
Stock Options 200,000 Options at $1.75 per share
The option grant date is December 1, 1999 for all 200,000 options. Options are
for a five-year period and are exercisable beyond employment.
In addition, William E. Chipman, Sr. will be eligible for all other benefits of
the Company, including all other option plans, bonuses, insurance and any other
benefits which employees of the Company can participate in.
/s/ William E. Chipman, Sr. /s/ unreadable
- ----------------------------- -------------------------------
William E. Chipman, Sr. as President/CEO iShopper.com
Date 12/1/99 Date 12/1/99
----------------------- --------------------------
Memo of Understanding
This Memo of Understanding is entered into as of this 1st day of
December, 1999, effective for one year by and between iShopper, Inc., a Nevada
Corporation and Lance King.
For the duties and services to be performed by Lance King he shall receive the
following:
Annual Salary $52,000
Stock Options 200,000 Options at $1.75 per share
The option grant date is December 1, 1999 for all 200,000 options. Options are
for a five-year period and are exercisable beyond employment.
In addition, Lance King will be eligible for all other benefits of the Company,
including all other option plans, bonuses, insurance and any other benefits
which employees of the Company can participate in.
/s/ Lance King /s/ unreadable
- ----------------------------- ------------------------------------
Lance King as President and CEO iShopper.com
Date 3/22/00 Date 12/1/99
---------------- -----------------
Exhibit 21.1
iSHOPPER.COM
SUBSIDIARIES OF THE REGISTRANT
Subsidiary Name State or Other Names Under Which
Jurisdiction of Each Subsidiary
Incorporation or Does Business
Organization
- ------------------------------- ------------------ -----------------------
Outbound Enterprises, Inc. Utah Same
iShopper Internet Services, Inc. Utah Same
NowSeven.com, Inc. Delaware Same
Stinkyfeet.com, Inc. Utah Same
Uniq Studios, Inc. Nevada Same
Totalinet.net, Inc. Nevada Same
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each officer and/or director
of iShopper.com whose signature appears below constitutes and appoints Douglas
S. Hackett, as his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign in the name of or on behalf of the undersigned,
as a director and/or officer of said corporation, the Annual Report on Form 10-K
of iShopper.com for the year ended December 31, 1999, and any and all amendments
to such Annual Report, and to file the same with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission
granting unto said attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney this 13th day of March, 2000.
/s/
- --------------------------- Chairman of the Board ------------------
GEORGE DENNEY Board of Directors
/s/
- --------------------------- President, Chief Executive ------------------
DOUGLAS S. HACKETT Officer, and Director
/s/
- --------------------------- Chief Financial Officer and ------------------
WILLIAM E. CHIPMAN, SR. Director
/s/
- --------------------------- Executive Vice President ------------------
ADAM MAHER and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Schedule
As of and for the Year Ended December 31, 1999
Ishopper.com, Inc.
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000789879
<NAME> iShopper.com, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1.000
<CASH> 13,935
<SECURITIES> 0
<RECEIVABLES> 268,914
<ALLOWANCES> 138,028
<INVENTORY> 0
<CURRENT-ASSETS> 411,396
<PP&E> 191,263
<DEPRECIATION> 49,280
<TOTAL-ASSETS> 662,360
<CURRENT-LIABILITIES> 566,404
<BONDS> 0
0
0
<COMMON> 7,814
<OTHER-SE> 3,313,756
<TOTAL-LIABILITY-AND-EQUITY> 95,956
<SALES> 3,924,869
<TOTAL-REVENUES> 3,924,869
<CGS> 276,600
<TOTAL-COSTS> 276,600
<OTHER-EXPENSES> 4,819,500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,197
<INCOME-PRETAX> 1,147,861
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,147,861
<DISCONTINUED> 0
<EXTRAORDINARY> 13,450
<CHANGES> 0
<NET-INCOME> 927,501
<EPS-BASIC> (.70)
<EPS-DILUTED> (.70)
</TABLE>
