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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1996
OR
[ ] 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 0-17322
GLOBESAT HOLDING CORP.
(Name of small business issuer in its charter)
UTAH 87-0365154
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
85 Skymark Drive, Suite 1703
North York, Ontario, Canada M2H 3P2
(Address of principal executive offices) (Postal Code)
Issuer's telephone number: (416) 494-2013
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock
(Title of class)
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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.
(1) YES [x] NO [] (2) YES [x] NO []
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of the 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. [ ]
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State Issuer's revenues for its most recent fiscal year.
September 30, 1996 - $0
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of a specified date within
the past 60 days.
December 23, 1996: $280,126. There are 1,792,807 shares of Common Stock of the
Registrant held by non-affiliates. This valuation is based upon the average bid
price ($0.15625) for shares of Common Stock of the Registrant on the OTC
Bulletin Board on December 23, 1996.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes [ ] No [ ]
Not Applicable.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding each of the Issuer's classes of
common equity, as of the latest practicable date: December 23, 1996 -
5,143,676 shares of Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
1. Form 10-KSB for the fiscal year ending September 30, 1994.
2. Form 8-K dated March 7, 1995.
3. Form 10-KSB for the fiscal year ending September 30, 1995.
4. Form S-8 Registration Statement dated October 24, 1995.
5. Form 10-QSB for the period ending December 31, 1995.
6. Form S-8 Registration Statement dated January 24, 1996.
7. Form S-8 Registration Statement dated January 24, 1996.
8. Form 8-K dated January 30, 1996.
9. Form 8-K/A dated March 18, 1996.
10. Form 10-QSB for the period ending March 31, 1996.
11. Form 10-QSB for the period ending June 30, 1996.
Transitional Small Business Disclosure Format: Yes [] No [x]
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PART I
ITEM 1. BUSINESS.
BACKGROUND
Globesat Holding Corp. (the "Registrant") was incorporated and organized
under the laws of the State of Utah on November 20, 1980, under the name
"Sure Investment Company". The Registrant was formed for the purpose of
seeking an entity with ongoing business activity attractive to the
Registrant. Over, approximately, the following 13 years, the Registrant
carried on business activities in a number of areas including, among other
things: the designing, developing, and manufacturing of satellites, rockets
and other equipment for aerial and space operations; communications; image
compression technologies; and designing, manufacturing, marketing and
maintaining computer network performance monitoring equipment.
In or about June 1993, the Registrant ceased material business operations.
From that time until December 1995, the Registrant's activities consisted
primarily of investigating possible business opportunities attractive to
the Registrant.
On January 18, 1996, the Board of Directors of the Registrant approved the
following:
- - the assignment to John Michael Coombs, as payment for attorney's fees,
the United States Department of Interior and Bureau of Land Management
oil and gas leases (the "Oil and Gas Leases") acquired by the Registrant
from Royalties Ltd. Copies of the Oil and Gas Leases have been previously
filed with the Securities and Exchange Commission as Exhibit 10 to the
Registrant's Form 10-KSB for the fiscal year ended September 30, 1995 and
are incorporated herein by reference;
- - the distribution of all of the Registrant's shares in the capital of
IComp, Inc., a Utah corporation ("IComp"), pro rata to the other
shareholders of IComp. For further information with respect to the
Registrant's shareholdings in IComp, please see Item 1 of the
Registrant's Form 10-KSB for the fiscal year ended September 30, 1995,
which is incorporated herein by reference;
- - amending and replacing the Registrant's by-laws. A copy of such amended
by-laws are attached hereto as Exhibit 3.5;
- - the acquisition of all of the issued and outstanding shares of common
stock of Windsor Acquisition Corp. ("Windsor"), a Utah company based in
Toronto, Canada (see below); and
- - the resignation of the Board of Directors in seriatim and the replacement
with the current Board of Directors of the Registrant.
The Oil and Gas Leases and the shares in the capital of IComp represented
all of the Registrant's non-cash assets as at January 18, 1996.
On January 19, 1996, the Registrant issued to the shareholders of Windsor
an aggregate of 3,735,000 shares of the Registrant's $0.01 par value Common
Stock. For further information with respect to this transaction, please see
the Registrant's Form 8-K, dated January 30, 1996, and the Registrant's
Form 8-K/A, dated March 18, 1996, both of which are incorporated herein by
reference.
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Windsor was engaged in the business of acquiring rights, licenses or other
entitlements in emerging and developed consumer and industrial products and
consumer and industrial technologies. At all material times from
incorporation to the acquisition on January 19, 1996 as aforesaid, Messrs.
Mel B. Greenspoon, Allan Greenspoon, Lee A. Greenspoon, Avi Greenspoon, and
Michael J. Bellman held approximately 90% of the outstanding stock in the
capital of Windsor.
On January 19, 1996, the Registrant changed its principal purpose to one
engaged in the business of acquiring rights, licenses or other entitlements
in emerging and developed consumer and industrial products and consumer and
industrial technologies.
References to the "Company" herein include the Registrant and its
wholly-owned subsidiaries, unless the context requires otherwise.
GENERAL
The Company is engaged in two businesses: environmental infrastructure
("envirostructure") products and technologies (collectively, "systems") and
consumer products. Each business is at an early development stage, and the
Company has yet to earn revenue from either one. Since January 19, 1996,
the Company's operations have consisted principally of the acquisition of
development stage envirostructure systems.
At this time, the Company's financial resources are insufficient to
continue to develop its businesses. The Company is currently seeking to
raise additional financing through the sale of debt or equity securities to
investors by private placement in order to continue to develop its
businesses. There can be no assurance that the Company will be able to
raise sufficient financing, on terms acceptable to the Company, to continue
to develop all its businesses, or any specific business or division.
ENVIROSTRUCTURE SYSTEMS BUSINESS
Envirostructure systems are used to efficiently and economically construct
and maintain infrastructure while managing and preserving the quality of
the environment. Management of the Company views the envirostructure sector
as one of the most promising growth sectors in the world today. The
envirostructure sector contains a number of interrelated infrastructure and
environmental industries. Infrastructure provides vital services to all
members of society and to all sectors of the economy; it is the man-made
foundation of modern society. The infrastructure sector includes industries
associated with general purpose construction, water delivery and disposal
systems, power generation, transportation, telecommunications, and
financial services. Environmental industries manage, minimize, and remove
the negative effects that modern society has on the environment, with
respect to soil, air, water, and general quality of life. The
envirostructure sector includes aspects of the following industries:
construction materials, construction technologies, engineering management,
financial services, fuel supply and conversion, power generation, sewer and
potable water systems, and waste management.
Presently, the Company is focused on envirostructure systems related to
cementitious products and waste to commodity technologies. Cement is the
foundation of all physical infrastructure and it is the most widely used
construction material in the world. The management of waste streams is of
critical importance to the development of any society and is rapidly
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becoming one of the most pressing global environmental problems.
CEMENTITIOUS PRODUCTS DIVISION
The Company's cementitious products division is to be comprised of two
lines of products: Novacrete and Fast-Setting Cement.
- NOVACRETE
In July 1996, the Company entered into a series of agreements with
Stratford Acquisition Corp. ("Stratford"), a Minnesota company based in
Burlington, Ontario, Canada, pursuant to which the Company obtained certain
distribution licenses with respect to Stratford's products. Stratford is
engaged in the business of manufacturing and marketing a technology and an
additive for enhancing cementitious products (hereinafter referred to as
"Novacrete").
On July 31, 1996, Globesat Infrastructure Technologies Corp. ("Globesat
I.T."), a wholly-owned subsidiary of the Registrant, entered into an
agreement (the "U.S. Novacrete License Agreement") with BGS Promotions Inc.
("BGS"), whereby BGS assigned to Globesat I.T. its license (the "U.S.
License") to distribute Novacrete in the United States on an exclusive
basis. In consideration of the assignment of the U.S. License, Globesat
I.T. agreed to pay to BGS an aggregate sum of $1,000,000 over a period of
five years. The first payment of $100,000 is due on July 31, 1997. A copy
of the U.S. Novacrete License Agreement is attached hereto as Exhibit 10.3.
Also on July 31, 1996, Globesat I.T. entered into an agreement (the "U.S
Novacrete Supply Agreement") with Stratford and Supercrete N/A Limited
("Supercrete"), a wholly-owned subsidiary of Stratford, whereby, among
other things, Stratford and Supercrete provided their consent to the
assignment of the U.S. License and agreed to extend the term of this
license, subject to certain terms and conditions, for a period of five
years. A copy of the U.S. Novacrete Supply Agreement is attached hereto as
Exhibit 10.4.
On July 31, 1996, Globesat I.T. entered into a further agreement (the
"Latin American Novacrete License Agreement") with Stratford and
Supercrete, whereby Stratford granted to Globesat I.T. a license (the
"Latin American Novacrete License") to distribute Novacrete products for an
initial term of five years, subject to certain terms and conditions, on an
exclusive basis throughout Mexico, Chile, and Argentina, and on a non-exclusive
basis throughout most other countries of the world, which can, on
a country by country basis, become exclusive subject to certain terms and
conditions.
In consideration of the grant of the Latin American Novacrete License, the
Registrant issued 300,000 "restricted shares" of its Common Stock to
Stratford, all of which are subject to a hold period of two years which
commenced on July 31, 1996. A copy of the Latin American Novacrete License
Agreement is attached hereto as Exhibit 10.5.
The Novacrete technology and additive is unique in that testing by
independent testing laboratories that employ testing standards established
by the American Society for Testing and Materials have ascertained that
when a cement-based product is blended utilizing the technology and
additive, the resulting Novacrete multi-purpose mortar used for patching
and repairing has the following properties:
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Compressive strength in excess of 11,000 lb./sq. in.;
Sheer bond strength in excess of 5,900 lb./sq. in.;
Flexural strength in excess of 1,300 lb./sq. in.;
Chloride permeability of 816 coulombs;
Zero shrinkage;
Durability over 302 freeze/thaw cycles (98.3% durability factor); and
Resistance to salt scaling over 50 cycles results in a durability
factor of 100%.
The Novacrete additive is to be distributed in 22 pound bags in powder form
and is to be blended with cement and sand utilizing the Novacrete
technology. The Novacrete finished product is to be packaged in 66 pound
bags, and the ultimate consumer will add water in accordance with the
instructions printed on the 66 pound bag to produce the Novacrete mortar
having the above-mentioned properties.
The foregoing description of the Novacrete technology and additive is taken
from the Form 10-K of Stratford for the fiscal year ended May 31, 1996. The
Registrant is relying on these representations and gives no assurances that
these representations are accurate and correct.
Manufacturing and Marketing
At this time, it is intended that the Company will purchase Novacrete
products directly from Stratford for resale into the territories in which
the Company is licensed to sell such products.
The Company intends to seek out strategic alliances and/or joint ventures
with, among others, cementitious products companies and/or construction
materials companies with respect to the distribution of Novacrete in the
United States, Mexico, Chile, and Argentina (see "Envirostructure Business
Strategy", below).
As of December 23, 1996, Globesat I.T. had not sold any Novacrete products.
Stratford is currently not able to produce commercial quantities of
Novacrete products. There can be no assurance that Globesat I.T. will sell
sufficient volumes of Novacrete products to satisfy its obligations to BGS
and Stratford. In the event that Globesat I.T. is unable to sell sufficient
volumes of Novacrete products to satisfy its obligations to BGS under the
U.S. Novacrete License Agreement, the U.S. License may revert to BGS and,
if so, Globesat I.T. would lose its right to sell Novacrete products in the
United States. In the event that Globesat I.T. is unable to sell sufficient
volumes of Novacrete products to satisfy its obligations to Stratford and
Supercrete under the U.S. Novacrete Supply Agreement, the rights granted to
Globesat I.T. thereunder will become non-exclusive rights. In the event
that Globesat I.T. is unable to sell sufficient volumes of Novacrete
products to satisfy its obligations to Stratford and Supercrete under the
Latin American Novacrete License Agreement, the rights granted to Globesat
I.T. thereunder will become non-exclusive rights.
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- FAST-SETTING CEMENT
On November 5, 1996, the Company obtained an exclusive 90 day option to
purchase all processes and formulations related to the production of a
cement which, the original inventor has represented to the Company, cures
and sets (i.e., dries and hardens) at a much faster rate than regular
portland cement, and possesses certain performance properties that are
superior to regular portland cement (hereinafter referred to "Fast-Setting
Cement"). The Fast-Setting Cement is currently being tested by independent
testing laboratories.
The Company and the original inventor have not finalized all the terms with
respect to the potential purchase of the Fast-Setting Cement; however, in
the event that the Company does exercise the aforementioned option, it will
involve, among other things, the payment of a technology and development
fee to the original inventor, a royalty to the original inventor based on
gross sales (i.e., sales less discounts and returns), the sharing of fees
earned through product licensing, and the retaining of the original
inventor as a consultant to the Company for a minimum period of five years
which will include a base consulting fee and participation in the
Registrant's stock option plans.
In the event that the Company does exercise its option with the original
inventor, the Company may choose to establish its own production facility
to produce Fast-Setting Cement and related products. The Company further
intends to seek out joint ventures and/or strategic alliances with, among
others, cementitious products companies and/or construction materials
companies with respect to the distribution of this cement throughout the
world. To date, the Company has held discussions with a number of potential
joint venture/strategic alliance partners.
As of December 23, 1996, the Company had not exercised this option and
there can be no assurance that it will prior to its expiration. The Company
lacks the capital necessary to exercise the option as at the date hereof.
If the Company does not exercise the option prior to its expiration,
management believes that it is likely that the original inventor will offer
to sell the Fast-Setting Cement processes and formulations to other
parties.
WASTE TO COMMODITY TECHNOLOGIES
On February 19, 1996, the Company and Startech Environmental Corp.
("Startech"), a Colorado company based in Wilton, Connecticut, entered into
an equity joint venture agreement (the "PWC Joint Venture Agreement").
Startech is an environmental technology corporation engaged in the
commercialization and continued development of its proprietary plasma waste
converter ("PWC") systems for the recycling, resource recovery, reduction
and remediation of hazardous and nonhazardous organic and inorganic
materials and wastes. A copy of the PWC Joint Venture Agreement is attached
hereto as Exhibit 10.8.
The PWC is a closed-loop recycling system that converts materials formerly
regarded as hazardous wastes into useful commodity products. The hazardous
waste can be organic and inorganic, in the form of a gas, liquid, and
solids or any combination thereof. Waste volume reductions higher than 300
to 1 have been demonstrated. Depending upon the waste processed, the
principal commodities produced by the system are a synthetic gas (called
"Plasma Converted Gas" or "PCG"), metals, and an obsidian-like inert
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silicate stone. Plasma Converted Gas can be used as a chemical feed stock
to produce polymers and other common industrial products, as a fuel to
produce electricity, as a heating plant fuel to reduce the cost and
reliance on fossil fuels, and in desalinization applications to produce
fresh water for irrigation and drinking. The metals can be employed in the
metallurgical industry. The stone silicates can be employed in the
abrasives industry and as an aggregate material for construction industry
applications.
The foregoing description of the PWC and its uses and applications is taken
from the Form 10-K of Startech for the fiscal year ended October 31, 1995.
The Registrant is relying on these representations and gives no assurances
that these representations are accurate and correct.
The PWC Joint Venture Agreement provides that the Company and Startech will
form an equity joint venture company ("JV Co.") which will be engaged in
the business of globally commercializing the PWC with respect to the
conversion of tires into usable commodity products. JV Co. may also engage
in the business of globally commercializing the PWC for, among other
things, alternative energy generation.
In consideration of providing the introduction of management of the Company
to Startech, and upon execution of the PWC Joint Venture Agreement, the
Registrant issued to one consultant 50,000 stock options at an exercise
price of $0.0001 each under the Registrant's 1996 Nonqualifying Stock
Option Plan and to a second consultant 400,000 shares of Common Stock
pursuant to Regulation S promulgated under the Securities Act of 1933, as
amended. All 50,000 options were exercised on February 19, 1996 for 50,000
shares of the Registrant's Common Stock. Copies of the consulting
agreements with Herb Adams and Toddington Investments Ltd. are attached
hereto as Exhibits 10.6 and 10.7, respectively.
Manufacturing and Marketing
It is contemplated that JV Co. will not operate PWCs, rather it will
purchase PWCs from Startech and sell them to customers.
Over the long-term, the Company intends to develop a turnkey PWC system,
with respect to the conversion of tires into Plasma Converted Gas and/or
alternative energy applications. This system will be distributed around the
world, and it is the intention of the Company that JV Co. will provide
purchasers with construction, technology transfer, parts supply,
maintenance services, and financing. There can be no assurance that the
Company will be able to develop a turnkey PWC system or that if one can be
developed, that any revenue will be generated therefrom.
JV Co. has not yet been formed, and the Company and Startech have to
complete all documentation necessary to give effect to the establishment of
JV Co. As of the date hereof, neither JV Co. nor the Company has entered
into any agreements with anyone to purchase a PWC and there can be no
assurance that any PWCs will ever be sold or leased to anyone through
either the Company or JV Co.
ENVIROSTRUCTURE BUSINESS STRATEGY
The discussion that follows represents a business strategy developed by
management of the Company. There can be no assurance that the Company will
be able to execute this strategy or any portion thereof successfully. This
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strategy assumes that the Company will exercise its option to purchase the
processes and formulations related to Fast-Setting Cement. As indicated
above, there can be no assurances that the Company will have sufficient
financial resources to exercise this option prior to its expiration.
The Company has developed a two-phased strategy for the development of the
cementitious products and waste to commodity divisions of its
envirostructure business. The first phase addresses the commercialization
and distribution of the Company's cementitious products in North America,
as well as preliminary commercialization efforts with respect to the PWC.
The second phase addresses the commercialization and distribution of the
Company's cementitious products in Latin America.
The Company intends to develop its cementitious products business in the
United States and Canada as soon as the necessary capital is obtained and
the option to purchase the Fast-Setting Cement processes and formulations
is exercised.
The Company intends to undertake preliminary commercialization efforts in
North America with respect to the PWC within the next fiscal year; however,
management does not expect the Company's waste to commodity business to
generate revenues for at least two years, if at all.
Within the next two fiscal years, the Company intends to expand its
cementitious products business into selected Latin American markets. The
Company's long-term strategy involves development of an integrated network
of envirostructure businesses throughout Latin America, primarily through
acquisition. Management does not expect to make any such acquisitions for
at least three fiscal years.
The following are the key elements of the Company's business strategy:
FOCUS ON NORTH AND LATIN AMERICA
Management of the Company believes that the United States and Canada
present the most readily accessible market opportunities for the Company's
envirostructure business, and that successful penetration of the North
American market will facilitate future international expansion. The Company
views Latin America (specifically Mexico and selected South American
countries) as a particularly attractive market with respect to
envirostructure systems, and management believes that the Company can
capitalize on many envirostructure opportunities within this region.
Throughout Latin America demand for cementitious products and other
advanced envirostructure systems is growing, as new infrastructure
development is being undertaken at unprecedented rates.
- NORTH AMERICA
Market development efforts for the Company's envirostructure business have
been initiated in North America. Management believes that the Company's
cementitious products appeal to broad segments of the industry, as opposed
to limited niches.
The waste to commodity industry is relatively young in North America;
however, it is more developed than in most other regions of the world. With
each passing year, the number of waste to commodity facilities being
commissioned is increasing (including cogeneration and recycling
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facilities). Management believes that there are four aspects to the North
American waste to commodity industry that make it particularly attractive
with respect to the PWC, which are:
1. the emphasis being placed by governments and the public on addressing
environmental issues concerning the disposal and recycling of scrap
tires;
2. the need to increase the efficiency of energy extraction from fossil
fuels, particularly in regions where coal-fired power plants supply most
of the electricity;
3. the need to decrease consumer and industrial energy consumption in the
United States and Canada, the highest energy consuming nations per
capita in the world; and
4. the emphasis being placed on manufacturing and emission producing
industries to become more responsible for the waste streams that they
produce.
- LATIN AMERICA
Management of the Company believes that Latin America offers numerous
opportunities for the Company's cementitious products division and for
expansion into other envirostructure businesses. At this time, the Company
intends to develop only its cementitious products division in Latin
America. Management of the Company believes that the market for the PWC
should be established in North America before international market
development efforts are undertaken.
Mexico and Chile are the two markets where the Company intends to initiate
Latin American operations. These two countries are generally regarded as
the gateway for entry into the Latin American market.
Mexico has a population of more than 91 million people, approximately one-fifth
of whom live in and around Mexico City. The country's proximity to
the United States, its relatively young workforce, its participation in a
number of regional trade agreements, and its rapidly growing middle-class
population are but a few of the factors that have attracted western
companies that seek to capitalize on the many opportunities that Mexico
presents. The North American Free Trade Agreement (NAFTA) has created the
largest free trade zone in the world, encompassing 360 million consumers
and accounting for over $6.5 trillion in trade per annum. Mexico also has
trade treaties with Chile, Colombia, Venezuela, Costa Rica, and Bolivia.
Although the rate of inflation for 1996 is estimated to reach increase,
management of the Company believes that many of the factors that have made
Mexico a good business and investment opportunity over the last few years
still exist, particularly in industries related to infrastructure
development.
To increase Mexico's industrial development over the coming years, the
Mexican government is placing considerable emphasis on investment in the
construction of highways, railroads, telecommunication systems, and gas
distribution. In addition, emphasis is also being placed on the improvement
of such infrastructure, in order to add stability to the most
underdeveloped regions of the country.
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Management of the Company considers Chile to be the step-off point with
respect to penetration of the broader South America markets. More than 40%
of Chile's 13.8 million inhabitants live in and around Santiago. Between
1987 and 1994, Chile's economy grew 6.9% annually, on average.
Traditionally, Chile's inflation rate has been very high. Over the last few
years, Chile's inflation has become manageable, decreasing to 8.2% in 1995
(the lowest rate in 35 years). These statistics have been maintained over
the past decade with a low unemployment rate of 5.5%.
Last year, real investment in public works in Chile doubled 1990 figures,
with private concessions reaching approximately $700 million. The existence
of a new framework for the development of infrastructure is expected to
result in investment of over $7 billion within the next five years in
numerous projects including, among other things, ports, airports, highways,
and railways.
In November 1996, Chile and Canada signed a free trade agreement which is
expected to, among other things, facilitate the transfer of advanced
Canadian technology and engineering know-how to Chile.
PENETRATE NORTH AMERICAN MARKETS THROUGH STRATEGIC ALLIANCES
The Company's penetration strategy for North America contemplates the
Company entering into strategic alliances with significant industry
participants. Management of the Company believes that strategic alliances
are the most effective means with which to develop a continental
distribution capability and, hence, facilitate widespread market
penetration while minimizing capital investment. This is particularly
applicable to new entrants to a market where there are large established
participants, and the system that the new entrant is seeking to introduce
has broad market appeal. The Company's objective is to capitalize on the
existing regional, national, or even continental distribution capability of
its strategic alliance partners and to access other relevant resources
within their operations as well. Strategic alliances are consistent with
the Company's objective of developing its businesses in North America over
the short-term.
- CEMENTITIOUS PRODUCTS DIVISION
The number of suppliers of cementitious products in North American is quite
large. Many of these organizations have well established channels of
distribution. Management of the Company believes that in order for the
Company to penetrate the North American market in the short-term, it will
be necessary to enter into strategic alliances with significant industry
participants. The Company intends to seek out large cement manufacturers,
concrete blenders, or distributors of cementitious products with regional,
national, or continental coverage. The objective will be not only to access
the distribution capabilities of strategic alliance partners, but to
utilize their infrastructure with respect to blending, packaging,
warehousing, and shipping. The Company does not intend to develop an in-house
sales team; however, the Company does expect to have technical
personnel who will interface with the strategic alliance partner(s) and,
when necessary, the partner's clients. To date, preliminary discussions
have been held with a number of potential strategic partners.
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- WASTE TO COMMODITY DIVISION
The waste to commodity industry includes a wide range of technologies and
involves a large number of participants, including some of the world's
largest engineering-based companies. Plasma technology, as applied in the
PWC, represents a relatively small segment of this industry.
Management of the Company believes that in order to commercialize the PWC
for tire conversion applications, it will be necessary to construct a pilot
facility. The Company's objective is to locate one or more strategic
partners for JV Co. that can assist in the development of a pilot facility
and in future commercialization efforts. Management further believes that
there are many potential strategic partners in the power generation, tire
manufacturing, or fossil fuel extraction and refinement industries. In
addition, there are a number of government agencies in the United States
and Canada that offer funding for the development of technologies such as
the PWC.
The involvement of a strategic partner may result in dilution of the
Company's holdings in JV Co. The Company intends to identify potential
strategic partners and government agencies, coordinate the process of
approaching such partners and agencies, and to negotiate and structure all
arrangements with such entities. There can be no assurance that potential
strategic partners will be found and, if found, will elect to become part
of JV Co.
PENETRATE SELECTED LATIN AMERICAN MARKETS THROUGH JOINT VENTURES
Management of the Company believes that the likelihood of successful
penetration of the Latin American market is enhanced through joint ventures
with partners that have strong local and regional presence. Accordingly,
the involvement of local partners is the key component to the Company's
Latin American activities. Management has commenced assembling a team of
Latin American-based advisors to the Company. These individuals will advise
the Company on strategy with respect to their specific regions of Latin
America. To date, the Company has engaged Mr. Guillermo A. Grimm in Mexico
and Mr. Francisco Bruron in Chile. Mr. Grimm most recently served as
President and Chief Executive Officer of Northern Telecom de Mexico S.A. de
C.V. and has served as Mexico's Under-Secretary of State for Tourism. Mr.
Bruron is General Manager of Keystone Distributors de Chile S.A. de C.V., a
subsidiary of a major global supplier to McDonald's restaurants. Mr. Bruron
is also a director of SOFOFA, the Chilean manufacturers' association.
Together with the Latin American advisors to the Company, management
intends to undertake market intelligence programs in Mexico and Chile.
These programs have two stages. The first stage entails the collection and
organization of market-specific information. The second stage involves the
translation of this information into reliable fact-driven knowledge that
can be used to provide a solid foundation for educated market-entry
decision making and for appropriate partner selection.
Management of the Company intends to seek out potential local partners with
a wide range of backgrounds. Industries associated with infrastructure
development are diverse, yet highly interrelated, especially in Latin
America. The completion of any infrastructure project involves numerous
participants from many industries. Because of these interrelationships,
management of the Company believes that there are many types of potential
partners in both Mexico and Chile, including:
<PAGE> 13
- - family controlled conglomerates with infrastructure-related businesses;
- - government contractors and supply entities that are principally involved
in infrastructure development;
- - private contractors and engineering firms;
- - manufacturers and suppliers of cementitious products (e.g., cement,
cement block, pre-cast, masonry, etc.);
- - distributors of cementitious materials (e.g., ready-mix concrete
suppliers, cement distributors, admixture distributors, etc.); and
- - distributors of construction materials.
It is the Company's intention to form a joint venture company with one or
more such partners in each of Mexico and Chile within the next two fiscal
years. Preliminary indications from the Company's Latin American advisors
are that there are a number of entities in each country which would be very
interested in exploring the possibility of such joint ventures. In November
1996, one of the Company's executives traveled to Chile and held
discussions with a number of such entities.
As part of developing the local markets, partners will assist the joint
venture company to interface with the local engineering community, promote
product specification with respect to local projects, and, where
appropriate, provide facilities and other resources. In addition, these
partners may assist with broader penetration into neighboring countries.
Depending upon the nature of each partner's business and the success of the
relationship between the partner and the Company, local partners may
continue to be further involved in the Company's activities in Latin
America.
CONSUMER PRODUCTS BUSINESS
The Company's consumer products business does not form part of management
of the Company's current plans and strategies for the Company. The Company
is presently considering a number of alternatives with respect to this
business including, among other things, the sale or other disposition of
the business. There can be no assurance that the Company, if it decides to
sell or otherwise dispose of its consumer products business, will be able
to find a purchaser on terms acceptable to the Company.
The Company's consumer products business is carried on through Windsor, a
wholly-owned subsidiary of the Company. Windsor holds an exclusive global
distribution license (the "Novatone License") to a cosmetic product, the
Novatone Facial Toner (the "Novatone").
The Novatone is a compact, battery-operated, hand-held device intended for
cosmetic use, which was designed to be used at home to effectively exercise
the facial muscles. The Novatone operates upon the principle of electronic
muscle stimulation ("EMS") which involves the application of direct
electrical stimulus to a muscle or muscle group. When EMS is used on muscle
tissue, it can produce physiological changes which are similar to those
that take place in muscle tissue during conventional exercise.
The Novatone was designed to make the benefits of EMS available to
individuals seeking to restore their face's youthful appearance. The
<PAGE> 14
Novatone is equipped with two electrodes which emit an intermittent low
frequency current that penetrates the skin through a conducting gel. When
positioned at given points, this current stimulates the muscle, causing it
to contract briefly. The period of contraction is followed by a period of
relaxation (i.e., no current is emitted by the Novatone). It is this
process of repeated contraction and relaxation that causes muscles to
strengthen and tighten. Proper use of the Novatone on a regular basis will,
generally, strengthen and tighten the facial muscles, lifting sagging or
drooping contours, resulting in toned and lifted facial features.
THE NOVATONE LICENSE
The Novatone was developed by LA-NUR Inc. ("LA-NUR"), an Ontario, Canada
company based in Ottawa, Ontario, Canada. On November 17, 1995, LA-NUR
entered into an agreement (the "Novatone Agreement") with Nicholas Plessas,
In Trust ("NP, In Trust"). Pursuant to the Novatone Agreement, LA-NUR
granted to NP, In Trust an exclusive global license (the "Novatone
License") to, among other things, manufacture, market, and distribute the
Novatone. A copy of the Novatone Agreement is attached hereto as Exhibit
10.9.
On November 30, 1995, NP, In Trust, LA-NUR, and Mel Greenspoon, In Trust
("MG, In Trust") entered into an agreement (the "First Novatone Assignment
Agreement") whereby NP, In Trust assigned all of its right, title, estate,
and interest in the Novatone Agreement to MG, In Trust, on behalf of Javlee
Investments Limited ("Javlee"), with the consent of LA-NUR. Javlee is an
Ontario, Canada company based in Toronto, Ontario, Canada and is controlled
by Mel B. Greenspoon, Chairman, Chief Executive Officer, and a Director of
the Company. A copy of the First Novatone Assignment Agreement is attached
hereto as Exhibit 10.10.
On January 18, 1996, MG, In Trust, LA-NUR, and Windsor entered into an
agreement (the "Second Novatone Assignment Agreement") whereby MG, In Trust
assigned all of its right, title, estate, and interest in the Novatone
Agreement to Windsor, with the consent of LA-NUR. A copy of the Second
Novatone Assignment Agreement is attached hereto as Exhibit 10.11. In
consideration of such assignment, Windsor issued to Javlee an unsecured
term note in the principal amount of $75,000, payable on January 17, 1997
(the "Javlee Note"). The Javlee Note bears interest at a variable rate as
charged by a Canadian chartered bank, for United States dollar loans. A
copy of the Javlee Note is attached hereto as Exhibit 10.12.
On January 24, 1996, the Registrant granted 30,000 options at an exercise
price of $0.001 each pursuant to the Registrant's 1996 Nonqualifying Stock
Option Plan to Nicholas Plessas in connection with certain consulting
services provided by him. As of September 30, 1996, all 30,000 options had
been exercised by Mr. Plessas.
The Novatone Agreement provides that Windsor is required to pay a royalty
of $4.00 to LA-NUR in respect of all Novatone units sold. For the year
ended December 31, 1996, Windsor is required to pay to LA-NUR the greater
of the aforementioned royalty amount or $100,000. As of the date hereof,
the Company has not sold, nor attempted to sell, Novatone units.
Windsor has the right to terminate the Novatone Agreement and its
obligations thereunder (with the exception of the payment of any royalties
then owing) upon 30 days' written notice to LA-NUR at any time on or after
January 1, 1997. As of the date hereof, the Company is in the process of
<PAGE> 15
renegotiating the terms of the Novatone Agreement with LA-NUR and is also
considering assigning the Novatone Agreement to a third party. There can be
no assurance that the Company will be able to renegotiate the Novatone
Agreement on terms satisfactory to the Company or that it will be able to
assign the Novatone Agreement to a third party. In the event that the
Company is unable to do so, it does not presently have sufficient funds to
make the required December 31, 1996 payment to LA-NUR.
REGULATORY APPROVALS
Prior to marketing the Novatone in the United States, approval must be
obtained from the United States Food and Drug Administration (the "FDA").
Such approval had not been obtained at the time of the assignment of the
Novatone License by MG, In Trust to Windsor. LA-NUR had obtained approval
from applicable Canadian regulatory authorities with respect to marketing
the Novatone in Canada. Management of the Company has always believed that
it would be more efficient and economical to obtain FDA approval and market
the Novatone throughout the United States and Canada, than to market it in
Canada alone.
Following the acquisition of Windsor in January 1996, the Company sought to
obtain FDA approval for the Novatone and to continue the development of the
product. Such development included, among other things, finalizing product
design and specifications, packaging, labelling, the preparation of an
instruction manual, manufacturing arrangements, promotional literature, and
market research. To assist in these efforts, the Company retained the
services of a marketing agency and a market research company, as well as
legal counsel to assist in obtaining FDA approval.
In November 1996, Windsor received notification from the FDA that the
Novatone had been registered. As of the date hereof, Windsor has not yet
received a registration number for the Novatone, although the FDA has
informed Windsor that such number is forthcoming.
MANUFACTURING AND MARKETING
Should the Company continue to develop its consumer products business, it
intends to outsource the manufacturing of the Novatone to a third party.
The Company has identified several contract manufacturers as having
suitable facilities for manufacturing large quantities of the Novatone and
has obtained a number of prototype Novatone units from several
manufacturers. As of the date hereof, the Company has not entered into any
definitive manufacturing agreement for the Novatone.
The raw materials and components used in the manufacturing of the Novatone
are commercially available in abundant supply, both nationally and
internationally.
Should the Company continue to develop its consumer products business, it
is considering distributing the Novatone through a variety of channels,
including, among others, direct response television (commonly referred to
as infomercials), private labelling for cosmetic companies, international
distribution agreements, wholesaling to retail merchants, and catalogue and
direct mail distribution.
<PAGE> 16
EMPLOYEES
The Company is a development stage company and currently has no employees
other than certain of its Officers and Directors. See Item 9. Management of
the Company expects to hire employees and consultants as necessary and as
set out herein.
RISK FACTORS
In addition to the considerations and risk factors set forth elsewhere
herein, the following should be considered:
DEVELOPMENT STAGE COMPANY
The Company has limited assets and has had extremely limited revenue in
each of its four most recent fiscal years and to the date hereof. The
Company, in its present businesses, is in the development stage and is
subject to all the risks inherent in the creation of a new business. In
addition, the Company, in its present businesses, has no record of
operations and there is nothing at this time upon which to base an
assumption that the Company's plans will prove successful. The objectives,
plans and strategies of the Company should be regarded as speculative due
to the nature and present stage of the Company's businesses. The likelihood
of success of the Company must be considered in light of the risks inherent
in the initiation of the Company's businesses, such as costs,
complications, and delays. The Company may encounter unforeseen
difficulties or delays in its operations and may sustain further operating
losses.
LACK OF PATENT PROTECTION
The Novatone is not protected by patent. After consideration, management of
the Company determined that it would be impractical to patent the Novatone,
as other companies would be able to develop similar products by making
minimal modifications to the product's design. Other than relying on the
representations made by LA-NUR under the Novatone Agreement, there can be
no assurance that the Novatone will not infringe on patents owned by
others.
To the best of management of the Company's knowledge, neither Novacrete nor
the PWC are protected by patents. The decision not to file for patent
protection is solely that of management of Stratford and Startech,
respectively. There can be no assurance that Novacrete and/or the PWC will
not infringe on patents owned by others.
At this time, the Fast-Setting Cement to which the Company holds an option
to acquire is not protected by patent. The original inventor has informed
management of the Company that the absence of patent protection represents
a lesser risk in that the Company would not necessarily be able to prevent
other companies from developing a similar product whether or not the Fast-
Setting Cement is protected by a patent. To the extent that the Company
would rely on unpatented proprietary technology, processes, and know-how,
and the protection of such property by confidentiality agreement, there can
be no assurance that others may not independently develop similar
technology and know-how or that confidentiality will not be breached. On
the other hand, it is much easier for competitors to copy the Fast-Setting
Cement technology if they purchase the patent text (a copy of which may be
obtained for a small fee from the relevant registry office). In the event
<PAGE> 17
that the Company does exercise its option to purchase the formulations and
processes related to the Fast-Setting Cement, management of the Company in
conjunction with the Company's legal advisors, will determine whether
patent protection should be sought.
COMPETITION
- ENVIROSTRUCTURE BUSINESS
The Company will have to compete with numerous companies that manufacture
and/or distribute products used in the manufacture of cementitious
products, most of which may have more substantial financial resources. In
the event that the Company does exercise its option to purchase the Fast
- -Setting Cement as set forth herein, the Company will have to compete with
numerous companies that manufacture and/or distribute cement, most of which
may have more substantial financial resources.
JV Co. will encounter significant competition from firms currently engaged
in the waste to commodity industry. The majority of these companies will be
substantially larger than JV Co., Startech, and the Company, and have
substantially greater resources and operating histories. Management of the
Company is aware of other competitors distributing waste to commodity
technologies, however, management is not aware of any competitors
distributing plasma waste to commodity technologies similar to the PWC with
respect to the conversion of tires into usable commodity products.
- CONSUMER PRODUCTS DIVISION
The Company will encounter significant competition from firms currently
engaged in the beauty and cosmetic industries. The majority of these
companies will be substantially larger than the Company, and have
substantially greater resources and operating histories.
PRODUCT LIABILITY EXPOSURE
Because of the nature of the Novatone and its applications, the Company may
be exposed to product liability claims. Although the Company intends to
seek product liability insurance for the Novatone, such coverage is not
currently carried because the Company has not yet commenced selling the
Novatone. There can be no assurance that, should the Company decide to sell
Novatone units, that it will be able to obtain product liability insurance
on terms commercially acceptable to the Company or that available amounts
of coverage will be sufficient to adequately protect the Company in the
event of a successful product liability claim.
ADDITIONAL CAPITAL
The Company requires additional funds to further develop its businesses,
and to effect the expansion of its administrative and management staff that
will be necessary if the Company is successful in achieving market
acceptance for any of the products and technologies which it markets or
distributes. The Company intends to seek such additional funding through
private financings including equity and/or debt financings and through
collaborative arrangements with others. There is no assurance that the
Company will be able to obtain additional funding when needed, or that such
funding, if available, can be obtained on terms commercially acceptable to
the Company. If the Company cannot obtain needed funds, it may have to
delay, curtail, or cease its business and system acquisition programs,
<PAGE> 18
marketing efforts, and other activities, adversely affecting its
businesses, results of operations and/or prospects.
Stockholders may be further diluted in their percentage ownership of the
Registrant in the event that additional shares are issued by the Registrant
in the future in connection with the raising of additional capital by the
Registrant.
DEPENDENCE ON KEY PERSONNEL
The Company is wholly dependent, at the present, upon the personal efforts
and abilities of the Registrant's Officers, who exercise control over the
day to day affairs of the Company, and upon its Directors, some of whom are
engaged in other activities and will devote limited time to the Company's
activities.
As well, the success of the Company's businesses and the Fast-Setting
Cement to which the Company holds an option to purchase depends upon the
personal efforts and attention of certain key personnel who are
instrumental in the continuing development of such businesses and products.
The loss of the service of certain of these personnel could have a material
adverse effect on the Company.
The Company's ability to develop its businesses and to establish and
maintain their competitive positions will depend, in part, on its ability
to attract and retain qualified personnel, including senior executives and
technical personnel. Competition for such personnel is intense and there
can be no assurance that the Company will be successful in attracting and
retaining such personnel.
NON-ARM'S LENGTH TRANSACTION
The number of shares of common stock issued by Windsor to certain
shareholders for cash, property, and/or services was arbitrarily determined
and may not be considered the product of arm's length transactions. In
addition, the value ascribed to the Novatone License in connection with the
assignment of the Novatone Agreement by MG, In Trust to Windsor was
arbitrarily determined and may not be considered the product of arm's
length transactions. See Note #12 to the Financial Statement in Item 7.
RELIANCE ON THIRD PARTY RELATIONSHIPS
It is anticipated that the Company will enter into strategic alliances and
joint ventures with third parties in respect of specific systems in
specific markets. Consequently, the Company will be relying upon its
alliance and joint venture partners to assist in the generation of
revenues. There can be no assurance as to the level of revenues which may
be generated by future alliance partners and future joint venture partners,
or that if any such partner chooses to withdraw from an alliance or joint
venture, as the case may be, the Company will be able to obtain a
replacement partner on comparable terms.
NO DIVIDEND
The Registrant has never paid cash or other dividends. It is the policy of
the Board of Directors of the Registrant to retain earnings to finance the
growth and development of its businesses, and therefore, the Registrant
does not anticipate paying cash dividends on its Common Stock in the near
<PAGE> 19
future.
FOREIGN EXCHANGE RISK
The Company's operating results are reported in United States dollars. A
portion of the Company's revenues and expenses will be generated or
incurred in Canadian dollars, as the case may be. The exchange rate between
the Canadian and United States dollar has varied significantly over the
past five years. In addition, the Company intends to establish businesses
and, possibly, acquire businesses in jurisdictions outside of North
America. The establishment or acquisition of such businesses may involve
the investment of funds by the Company. Any foreign investment will have
risks associated with changes in foreign exchange rates and, possibly,
restrictions on the repatriation of funds.
ITEM 2. PROPERTIES.
The Registrant's registered office is located at BCE Place, 181 Bay Street,
Suite 1800, Toronto, Ontario, Canada, M5J 2T9. The Registrant's principal
executive offices are located at 85 Skymark Drive, Suite 1703, North York,
Ontario, Canada, M2H 3P2 and the telephone number is (416) 494-2013. The
Skymark property is leased by Mel B. Greenspoon and a portion of the space
is provided to the Company at no cost.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not the subject of any pending legal proceedings; and to the
knowledge of management, no proceedings are presently contemplated against
the Company by any federal, state, provincial or local government agency.
Further, to the knowledge of management, no Officer or Director of the
Company is party to any action which has an interest adverse to the
Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of the Registrant's security holders
during the Registrant's last four fiscal years.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
(a) Market Information.
During the Registrant's 1992 fiscal year, it failed to meet certain listing
criteria established by the National Association of Securities Dealers,
Inc. ("NASD") for trading on its NASDAQ service. The Registrant's listing
was consequently removed from NASDAQ on May 12, 1992.
The Registrant's securities are currently traded over-the-counter on the
Bulletin Board operated by the NASD, under the symbol GSAT. The table below
shows the high and low bid of the Registrant's Common Stock (retroactively
taking into account the 75 for 1 reverse split effective on June 30, 1995)
during the past two fiscal years. Quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not represent
actual transactions.
<PAGE> 20
On December 23, 1996, the high bid price for the Registrant' Common
Stock was $0.25 and the low bid price for the Registrant's Common Stock
was $0.0625.
Bid
Quarter Ended High Low
September 30, 1996 .625 .25
June 30, 1996 1.125 .50
March 31, 1996 3.25 .25
December 31, 1995 .75 .25
September 30, 1995 .75 .75
June 30, 1995 1.125 .75
March 31, 1995 1.125 .75
December 31, 1994 1.875 .75
These average bid prices were obtained from the National Quotation Bureau, Inc.
(b) Holders.
The number of record holders of the Registrant's Common Stock as of
December 23, 1996 was 971; this number does not include an indeterminate
number of stockholders whose shares are held by brokers in street name.
(c) Dividends.
There are no present material restrictions that limit the ability of the
Registrant to pay dividends on Common Stock or that are likely to do so in
the future. The Registrant has not paid any dividends with respect to its
Common Stock, and does not intend to declare or pay dividends in the
foreseeable future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion should be read in conjunction with the
Consolidated Financial Statements of the Company and notes thereto
contained in Item 7.
Results of Operations
During fiscal 1996, the Company has had no revenue and has not attempted to
market or produce any of its products. Operations during the past fiscal
year have consisted principally of the acquisition of development stage
envirostructure related products and technologies.
In or about June 1993, the Registrant ceased material business operations.
The Registrant's activities from approximately June 1993 to December 1995
consisted primarily of investigating possible business opportunities
attractive to the Registrant.
On January 19, 1996 the Registrant completed a reverse take-over, wherein
all the shares of Windsor were exchanged one-for-one for shares of the
Registrant's Common Stock, for majority control of the Registrant.
<PAGE> 21
Capital Resources and Liquidity
The Company is currently making presentations to various venture capital
sources and others to raise additional capital. The Company is also
pursuing possible strategic partnerships or collaborations with other
companies interested in its products or technologies. The need for
sustained funding of the Company's production and distribution programs
drives the Company's efforts to raise additional capital from investors.
The Company intends to privately place debt or equity securities over the
next 12 months. It is anticipated that the majority of such funding will be
utilized to exercise the option on the Fast-Setting Cement (if sufficient
capital can be raised prior to the expiration of the option), finance
production facilities for the Company's cementitious business, provide
working capital and to repay certain indebtedness of the Company.
The Company has no significant commitments for equipment purchases, product
manufacturing or marketing efforts at present. The Company is currently
utilizing office facilities provided by Mel B. Greenspoon at no charge to
the Company.
The Company has no bank lines of credit or other commercial financing
sources at present and does not expect to obtain any in the near future. It
is not known whether additional funds could be borrowed form stockholders
or other sources and such is not contemplated by management of the Company
at the present time.
Going Concern Qualification
The auditors of the Consolidated Financial Statements of the Company have
stated that the Consolidated Financial Statements have been prepared on a
going-concern basis. That basis of accounting contemplates the realization
of assets and the satisfaction of liabilities in the normal course of
conducting business operations. As shown in the Consolidated Financial
Statements in Item 7, operations for the fiscal year ended September 30,
1996 resulted in a net loss of $255,744, and as of that date the Company
had a stockholders' deficit of $116,077. The Company's future is dependent
on its ability to continue to obtain additional capital or adequate
financing to fund its operations.
The Company will continue to raise additional capital from investors. The
Company is currently making presentations to various venture capital
sources and others to raise additional capital. The Company is also
pursuing possible strategic partnerships or collaborations with other
companies interested in its businesses.
Management of the Company believes that the Company's products and
technologies are sufficiently developed to facilitate the acquisition of
funds needed for continued operations from the sale of debt or equity
securities to investors as aforesaid.
ITEM 7. FINANCIAL STATEMENTS.
Consolidated Financial Statements of the Company for the fiscal year ended
September 30, 1996 and the Notes thereto begin on the following page.
<PAGE> 22
Globesat Holding Corp.
Consolidated Financial Statements
September 30, 1996 & 1995
<PAGE> 23
Independent Auditors Report
Board of Directors
Globesat Holding Corp.
I have audited the accompanying balance sheets of Globesat Holding Corp. as
of September 30, 1996, and the related statements of operations,
stockholders' equity, and cash flows for the year ended September 30, 1996,
1995 and 1994. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and the significant estimates made by management, as well as evaluating the
overall financial statements presentation. I believe that my audit provides
a reasonable basis for my opinion.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note #14 to the
financial statements, the Company has suffered recurring losses from
operations and has a working capital deficiency that raises substantial
doubt about its ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
In my opinion, the aforementioned financial statements present fairly, in
all material respects, the financial position of Globesat Holding Corp., as
of September 30, 1996 and the results of its operations and cash flows for
the years ended September 30, 1996, 1995, and 1994, in conformity with
generally accepted accounting principles.
Salt Lake City, Utah
December 27, 1996
Per: /S/ Darrell Schvaneveldt
<PAGE> 24
<TABLE>
<CAPTION>
GLOBESAT HOLDING CORP.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND 1995
1996 1995
---- ----
<S> <C> <C>
Current Assets
Cash $14,744 $6,457
Inventory 4,712 0
_______ ______
Total Current Assets 19,456 6,457
Property & Equipment
Office Equipment 3,864 0
Other Assets
Novatone License 67,500 0
Distribution License 3,000 0
Oil & Gas Leases 0 26,902
______ ______
Total Other Assets 70,500 26,902
Total Assets $93,820 $33,359
======= =======
Liabilities & Stockholders' Equity
Current Liabilities
Accounts Payable $75,853 $1,000
Franchise Tax Payable 300 0
Accrued Interest Payable 8,744 0
Notes Payable 125,000 0
_______ _____
Total Current Liabilities 209,897 1,000
Stockholders' Equity
Common Stock, $0.01 Par Value,
15,000,000 Shares Authorized
5,143,676 and 300,000 Shares
Issued and Outstanding
Respectively Retro-Actively
Restated 51,437 3,000
Additional Paid In Capital 3,288,216 3,229,345
Accumulated Deficit (3,455,730) (3,199,986)
___________ ___________
Total Stockholders' Equity (116,077) 32,359
Total Liabilities and
Stockholders' Equity $93,820 $33,359
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 25
<TABLE>
<CAPTION>
GLOBESAT HOLDING CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
SEPTEMBER 30, 1996, 1995 & 1994
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Revenues
Interest $0 $437 $2,000
_______ _______ ______
Expenses
Professional Fees 104,360 0 0
General & Administrative 16,266 19,179 20,000
Bad Debt 0 25,000 0
Interest 8,744 0 0
Depreciation 350 0 0
Amortization 7,500 0 0
Research & Development 9,855 0 0
Consulting Fees 33,669 0 0
Royalties 75,000 0 0
_______ ______ ______
Total Expenses 255,744 44,179 20,000
Loss from Operations (255,744) (43,742) (18,000)
--------- -------- --------
Discontinued Operations
(Loss) Gain in Disposition
of Assets 0 2,000 (92,000)
-------- -------- ---------
Net (Loss) $(255,744) $(41,742) $(110,000)
========== ========= ==========
Per Share Data
Net (Loss) $(.07) $(.20) $(.67)
========== ========= ==========
Average Weighted Shares
Outstanding 3,424,450 207,319 164,130
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 26
<TABLE>
<CAPTION>
GLOBESAT HOLDING CORP.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD SEPTEMBER 30, 1993 TO THE YEAR ENDED SEPTEMBER 30, 1996
Shares Common Paid In (Accumulated
Issued Stock Capital Deficit)
______ ______ _______ ___________
<S> <C> <C> <C> <C>
Balance, Sept. 30, 1993
Retroactively Restated $164,130 $1,640 $3,198,803 $(3,048,244)
Net Loss for Year
Ended Sept. 30, 1994 (110,000)
___________________________________________
Balance, Sept. 30, 1994 164,130 1,640 3,198,803 (3,158,244)
Shares Issued to Acquire
Assets 35,870 360 26,542
Shares Issued for Services 100,000 1,000 4,000
Net Loss for Year Ended
September 30, 1995 (41,742)
__________________________________________
Balance, Sept. 30, 1995 300,000 3,000 3,229,345 (3,199,986)
Shares Issued by Transfer
Agent for Rounding in Reverse
Stock Split 676 7 (7)
Shares Issued to Acquire
Subsidiary 3,735,000 37,350 56,658
Shares Issued in Lieu of
Cash for Services Rendered
Per Share 805,000 8,050
Shares Issued for Cash
at $0.75 Per Share 3,000 30 2,220
Shares Issued in Lieu of
Cash to Acquire Distribution
License 300,000 3,000
Loss for Year Ended
September 30, 1996 (255,744)
_________________________________________________
Balance, Sept. 30, 1996 5,143,676 $51,437 $3,288,216 $(3,455,730)
=================================================
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 27
<TABLE>
<CAPTION>
GLOBESAT HOLDING CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995, AND 1994
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net Loss $(255,744) $(41,742) $(110,000)
Adjustments to Reconcile Net Loss
To Net Cash Used by Operating
Activities:
Amortization 7,500 0 0
Depreciation 350 0 0
Non Cash Expenses 68,495 30,000 0
Loss on Disposal of Building 0 0 92,000
Changes in Operating Assets and
Liabilities
(Increase) in Inventories (4,712) 0 0
Increase (Decrease) in
Accounts Payable 74,853 0 (19,000)
Increase in Franchise Tax Payable 300 0 0
Increase in Accrued Interest 8,744 0 0
Rounding Adjustments 0 199 2,000
_________ ________ ________
Net Cash Used by Operating Activities (100,214) (11,543) (35,000)
Cash Flows from Investing Activities
Purchase of Equipment (4,214) 0 0
Purchase of Novatone License (75,000) 0 0
________ _______ _______
Net Cash Used by Investing Activities (79,214) 0 0
Cash Flows from Financing Activities
Increase in Notes Payable 125,000 0 0
Sale of Shares of Stock 62,715 0 0
_______ _______ _______
Net Cash Used by Financing Activities 187,715 0 0
(Decrease) Increase in Cash 8,287 (11,543) (35,000)
Cash at Beginning of Year 6,457 18,000 53,000
_______ ______ _______
Cash at End of Year $14,744 $6,457 $18,000
======= ====== =======
Cash Used by Certain Operating Activities
Interest $8,744 $0 $0
Taxes 0 0 0
Significant Non Cash Transactions
Issued 300,000 Shares to Acquire
Distribution Rights 3,000 0 0
Issued 4,159,400 Shares in Lieu of
Cash for Services 41,594 0 0
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 28
GLOBESAT HOLDING CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE #1 - Corporate History
Globesat Holding Corp. (the "Company") was incorporated on November 20,
1980 under the laws of the state of Utah using the name "Sure Investment
Company". On October 22, 1987, Articles of Amendment were filed changing
the name to Globesat Holding Corp.
The Articles of Incorporation grant the corporation power to engage in any
legal activity or any activity authorized by the laws of the United States
and the state of Utah.
The Company has two wholly owned subsidiaries: Windsor Acquisition Corp.,
which owns the Novatone License and has certain underlying indebtedness,
and Globesat Infrastructure Technologies Corp., which by assignment has a
distribution license to the Novacrete Additive.
NOTE #2 - Significant Accounting Policies
(A) The Company uses the accrual method of accounting.
(B) Revenues and directly related expenses are recognized in the period
when the goods are shipped to the customer.
(C) The Company considers all short term, highly liquid investments that
are readily convertible within three months, to known cash equivalents. The
Company currently has no cash equivalents.
(D) Primary Earnings Per Share amounts are based on the weighted average
number of shares outstanding at the dates of the financial statements.
Fully Diluted Earnings Per Share shall be shown on stock options and other
convertible issues that may be exercised within ten years of the financial
statement dates.
(E) Inventories: Inventories are stated at the lower of cost, determined by
the FIFO method or market.
(F) Consolidation Policies: The accompanying consolidated financial
statements include the accounts of the Company and its wholly-owned
subsidiaries. Intercompany transactions and balances have been eliminated
in consolidation.
(G) Foreign Currency Translation/Remeasurement Policy: All purchases and
sales in foreign countries are concluded in American dollars or Canadian
dollars. If at future dates assets and liabilities occur in foreign countries
they will be recorded at historical cost and translated at exchange rates in
effect at the end of the year. Income Statement accounts are translated at
the average exchange rates for the year. Translation gains and losses shall
be recorded as a separate line item in the equity section of the financial
statements.
(H) Depreciation: The cost of property and equipment is depreciated over
the estimated useful lives of the related assets. The cost of leasehold
improvements is depreciated (amortized) over the lesser of the length of
the
<PAGE> 29
NOTE #2 - Significant Accounting Policies - Continued
related assets or the estimated lives of the assets. Depreciation is
computed on the straightline method for reporting purposes and for tax
purposes.
(I) Issuance of Subsidiary's Stock: The Company has elected to accounts for
shares issued by its subsidiary as an equity transactions.
(J) Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
NOTE #3 - Inventory
The Company holds for resale a number of Novatone Facial Toners. These
devices were acquired from a Korean manufacturer and are held for resale by
the Company.
NOTE #4 - Non Cash Investing & Financing Activities
The Company acquired a Distribution license for a cement additive by
issuing to a Minnesota publicly held corporation 300,000 shares of its
common stock. The value of the Distribution license has been recorded at
the par value of $0.01 per share of the shares issued.
The Company has paid for services in part by issuing 4,159,400 shares of
its common stock at par value of $0.01 per share.
NOTE #5 - Stock Options
Pursuant to the Company's 1996 Qualified Stock Option Plan adopted January
23, 1996, which authorizes the issuance of 2,000,000 shares from time to
time at prices set by the Compensation Committee of the Board of Directors,
the Company has issued the following options:
<TABLE>
<CAPTION>
Number Option Exercise Expiration
Date of Option of Shares Price Per Share Date of Option
<S> <C> <C> <C>
March 20, 1996 500,000 $0.75 January 24, 2006
March 20, 1996 500,000 $0.75 January 24, 2006
December 2, 1996 250,000 $0.50 January 24, 2006
Total 1,250,000
</TABLE>
Pursuant to the Company's 1996 Nonqualifying Stock Option Plan adopted
January 23, 1996, which authorizes the issuance of 2,000,000 shares from
time to time at prices set by the Board of Directors, the Company has
issued the following options:
<TABLE>
<CAPTION>
Number Option Exercise Expiration
Date of Option of Shares Price Per Share Date of Option
<S> <C> <C> <C>
January 24, 1996 200,000 $0.0001 January 24, 2006
January 24, 1996 30,000 $0.001 January 24, 2006
January 31, 1996 25,000 $0.001 January 24, 2006
February 19, 1996 50,000 $0.0001 January 24, 2006
April 17, 1996 3,000 $0.75 January 24, 2006
Total 308,000
</TABLE>
Total options for shares of the Company's common stock issued 1,558,000.
<PAGE> 30
NOTE #5 - Stock Options - Continued
<TABLE>
<CAPTION>
Weighted Loss for
Average Shares Current Loss Per
Outstanding Period Share
<S> <C> <C> <C>
Shares Outstanding at
September 30, 1996 3,424,450 $ 255,744 $ 0.07
Options Outstanding
at September 30, 1996 1,308,000 255,744 0.20
__________________________________
Totals 4,732,450 $ 255,744 $ 0.05
</TABLE>
NOTE #6 - Notes Payable
Note #1
Payable to a shareholder at a variable interest rate as
charged by The Bank of Nova Scotia, in Canada,
for a United States dollar loans;
Note is Due January 17, 1997 $ 50,000
Note #2
Payable to Javlee Investment Limited at a variable
interest rate as charged by The Bank of Nova Scotia,
in Canada, for United States dollar loans;
Note is Due January 17, 1997 $ 75,000
___________
Total $ 125,000
NOTE #7 - Depreciation
The Company capitalizes the purchase of equipment and fixtures for major
purchases in excess of $1,000 per item. Capitalized amounts are depreciated
over the useful life of the assets using the straight-line method of
depreciation.
Scheduled below are the assets, costs, lives, and accumulated depreciation
at September 30, 1996 and September 30, 1995.
September 30 Depreciation Accumulated
1996 1995 Expenses Depreciation
Assets Cost Cost Life 1996 1995 1996 1995
_______________________________________________________________
Furniture &
Fixtures $4,214 $0 5 $350 $0 $350 $0
NOTE #8 - Consulting Agreements
The Company currently has four consulting agreements for services. Two of
these agreements have been paid for by issuing 500,000 shares of common
stock pursuant to Regulation S. The agreements require the consultants to
be available to the Company upon request and the agreements expire February
19, 1997 and March 4, 1997. The Company has two additional consulting
agreements for which it issued options under its 1996 Nonqualifying Stock
Option Plan of 25,000 shares and 50,000 shares respectively, these
agreements expire January 31, 1997 and February 19, 1997. Upon the
termination of the consulting agreement the option holder does not return
the option to the Company.
<PAGE> 31
NOTE #9 - Distributor Agreement
The Company issued 300,000 shares of its common stock pursuant to a Supply
and Distribution Agreement dated July 31, 1996 between Globesat
Infrastructure Technologies Corp. ("Globesat I.T."), a wholly owned
subsidiary of the Company, Stratford Acquisition Corp., a Minnesota
company, and Supercrete N/A Limited, a Turks and Caicos Islands company.
The Company assigned its position in the agreement to Globesat I.T.
Pursuant to the agreement, Stratford Acquisition Corp. granted to Globesat
I.T. a license to distribute Novacrete products for an initial term of five
years, subject to certain terms and conditions contained in the agreement,
on an exclusive basis throughout Mexico, Chile, and Argentina, and on a
non-exclusive basis throughout most other countries of the world, which
can, on a country by country basis, become exclusive subject to certain
terms and conditions contained in the agreement. The agreement is
renewable by Globesat I.T. for a further five year term, provided that
Globesat I.T. pays to Stratford Acquisition Corp. the minimum amounts set
out below.
Globesat I.T. shall be required to meet minimum purchase quotas during the
initial term of the agreement in the amount of $1,000,000 for all countries
covered by this license, in the aggregate, for each period ending November
30, commencing on November 30, 1997 through November 30, 2001. Globesat I.T.
may apply to a subsequent year's minimum purchase quota, the portion by which
purchases in any year exceed that year's minimum purchase quota.
NOTE #10 - Novatone License
The Company, through its subsidiary Windsor Acquisition Corp., acquired
from Javlee Investments Limited, its right, title, and interest in the
Novatone Facial Toner (the "Product"). The Company issued a short term note
payable in the principal amount of $75,000 for the acquisition.
In accordance with the terms and conditions of an agreement (the
"Agreement") with the original inventor of the Product, the original
inventor granted to the Company:
(1) the exclusive right and license to use the methods and technical know-how
to manufacture, market, promote, distribute, offer for sale and
sell the Product throughout the world; and
(2) the world, and the exclusive right and license to use the trademark
"Novatone" in relation to the Product manufactured, packaged, marketed,
promoted, distributed, offered for sale or sold by the Company.
The term of the Agreement is for three years (the "Initial Term") and, upon
the expiration of the Initial Term, the Company has the right to renew the
Agreement for a further period of three years (the "Second Term").
The Agreement provides for the payment of a royalty to the original
inventor. During the Initial Term, the amount of the royalty is $4.00 per
unit of the Product sold by or on behalf of the Company. For the Second
Term, if applicable, the royalty is to be negotiated by the Company and the
original inventor, however, in no event shall the royalty be greater than
$4.00 per each unit of the Product sold. All royalties become due and
payable fourteen days after receipt by the Company of funds derived from
sales of such product.
<PAGE> 32
NOTE #10 - Novatone License - Continued
For the calendar years 1996, 1997 and 1998 only, the Company is required to
pay to the original inventor the greater of the royalty amount as per the
above paragraph, or the minimum annual payment set out below, on or before
December 31, of each respective year:
Calendar Year Minimum Payment
1996 $ 100,000
1997 200,000
1998 300,000
The Company has the right to terminate the Agreement and its obligations
thereunder (with the exception of the payment of any royalties then owing)
upon thirty days' written notice to the original inventor at any time on or
after January 1, 1997.
The Company has accrued $75,000 for the minimum royalty due for fiscal 1996
as an accounts payable. Currently the Company seeks to modify the Agreement
to nullify or vary the minimum royalty amount due but the outcome of these
negotiations is unknown at the date of this report.
NOTE #11 - Net Operating Loss Carryforward for Income Tax Purposes
The Company has majority shareholder control changes and changes in
business operations that will make utilization of prior losses remote. They
are therefore considered not useable and no report is made of them. The
Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Codes are met. These losses
are as follows:
Year of Loss Amount Expiration Date
__________________________________________________________
September 30, 1996 $255,744 2011
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax assets
in future years. Due to the uncertainty as to the utilization of net
operating loss carryforwards, an evaluation allowance has been made to the
extent of any tax benefit that net operating losses may generate.
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Current Tax Asset Value of Net Operating
Loss Carryforwards at Current Prevailing
Federal Tax Rate $82,990 $0
Evaluation Allowance (82,990) 0
Net Tax Asset $0 $0
Current Income Tax Expenses 0 0
Deferred Income Tax Expenses 0 0
</TABLE>
<PAGE> 33
NOTE #12 - Related Party Transactions
The Company has related party transactions as follows:
Notes Payable of $125,000 as reported in Note #6.
The Novatone License Agreement as reported in Note #10.
Stock option pursuant to the 1996 Qualified Stock Option Plan as
reported in Note #5.
NOTE #13 - Subsequent Events
The Company is currently making presentations to various venture capital
sources and others to raise additional capital. The Company is also
pursuing possible strategic partnerships or collaborations with other
companies interested in its products or technologies. The need for
sustained funding of the Company's production and distribution programs
drives the Company's efforts to raise additional capital from investors.
The Company intends to privately place debt or equity securities over the next
twelve months.
NOTE #14 - Going Concern
The Company's consolidated financial statements have been prepared on the
basis that it is a going concern, which contemplates the realization of
assets and satisfaction of liabilities in the normal course of business.
The Company has incurred recurring losses over the past three years and has
a working capital deficit at September 30, 1996, 1995 and 1994.
Consolidated financial statements do not include any adjustments relating
to the recoverability of assets or classification of liabilities or any
other adjustments that might be necessary should the Company be unable to
continue as a going concern.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
On March 7, 1995, the Registrant dismissed Silverman Olson Thorvilson &
Kaufmann Ltd. as its accountants and engaged Schvaneveldt and Company of
Salt Lake City, Utah as its new accountants.
There were no disagreements between the Registrant and Silverman Olson
Thorvilson & Kaufmann Ltd. with regard to accounting and financial
disclosure. For a further discussion of this change in accountants. Please
see the Registrant's Form 8-K, dated March 7, 1995, which has been
previously filed with the Securities and Exchange Commission and is
incorporated herein by reference.
<PAGE> 34
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and the nature of all positions
and offices held by all Directors and Officers of the Registrant for the
fiscal year ending September 30, 1996, and to the date hereof, and the
period or periods during which each such Director or Officer served in his
or her respective positions.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
<S> <C> <C> <C>
Mel B. Greenspoon(1) Chairman, 01/96 *
Chief Executive
Officer, and 01/96 *
Director 01/96 *
Allan Greenspoon President, 01/96 12/96
Chief Financial
Officer, and 01/96 *
Director 01/96 *
Lee A. Greenspoon Executive Vice
President, 01/96 12/96
President, 12/96 *
Chief Operating
Officer, and 12/96 *
Director 01/96 *
Darryl R. Lustig(1) Director 01/96 *
Michael J. Bellman Vice President 12/96 *
Avi S. Greenspoon Secretary 01/96 *
Jack R. Coombs President, and 12/93 01/96
Director 12/93 01/96
Sandra E. Hansen Vice President, and 02/94 01/96
Director 02/94 01/96
Sheryl A. Ross Secretary, 12/93 01/96
Treasurer, and 12/93 01/96
Director 12/93 01/96
</TABLE>
Notes:
* These persons presently serve in the capacities indicated opposite
their respective names.
(1) Member of the Compensation Committee.
<PAGE> 35
TERM OF OFFICE
The term of office of the current Directors shall continue until the next
annual meeting of stockholders, which is scheduled to be held in February
of each year or such other time as designated by the Board of Directors. No
annual meeting has been held for the past four fiscal years as the
Registrant has been substantially inactive during these periods; however,
according to the Utah Revised Business Corporation Act, the failure to hold
an annual meeting has had no adverse effect on the actions taken by the
Board of Directors and Officers during these periods.
The annual meeting of the Board of Directors immediately follows the annual
meeting of stockholders, at which Officers for the coming year are elected.
As well, the Board of Directors may from time to time appoint such other
Officers as it deems appropriate.
BUSINESS EXPERIENCE
Mel B. Greenspoon, age 52, is Chairman of the Board of Directors and Chief
Executive Officer of the Registrant. From June 1995 to September 1995, he
was an officer and director of Stratford Acquisition Corp. Prior to 1995,
he was Vice President and co-founder of Tactix Construction Limited, a real
estate development and general contracting company based in Toronto,
Canada. Mr. Greenspoon has over 30 years experience in the real estate
development and construction industries. As a general contractor, Mr.
Greenspoon coordinated and managed all aspects of infrastructure
construction, and is familiar with a vast range of advanced infrastructure
technologies. Mr. Greenspoon has also served as a consultant on a range of
domestic and international construction projects. Mr. Greenspoon is
currently a director of the Metropolitan Toronto Apartment Builders
Association.
Lee A. Greenspoon, age 28, is President, Chief Operating Officer and a
Director of the Registrant. Mr. Greenspoon has a Master of Business
Administration degree, a Master of Real Property Development diploma, and a
Bachelor of Arts degree in Urban Geography. From January 1995 to October
1995, he was Managing Director of Seidenstrasse Development Corporation, an
international merchant banking company specializing in infrastructure-related
projects in the People's Republic of China. While with
Seidenstrasse, he initiated several projects involving cementitious
products, water supply and disposal systems, and heavy construction
equipment. From May 1993 to January 1995, he was Vice President, Market
Development of Bariston Inc., a company specializing in Latin American and
Eastern European export development and technology transfer. Mr. Greenspoon
joined Bariston at its inception and was responsible for developing the
strategic vision of the company, as well as the development and management
of strategic alliances in Argentina, Chile, China, and Mexico. Mr.
Greenspoon was also responsible for the formation of Bariston's advisory
board, which included chief executives from a number of large North
American companies. He currently serves as Chairman of the CGBC Network,
which includes graduate business alumni from over 50 countries. The CGBC
network was established in 1993 as a component of an international graduate
business conference specializing in international infrastructure
development. During the same period, Mr. Greenspoon served as Chairman of
the Graduate Business Council of his MBA program. Mr. Greenspoon has been a
special lecturer on international business strategy at the Schulich School
of Business in Toronto, Canada and the Universitad de Catholica in
Santiago, Chile. Mr. Greenspoon has led and taken part in a number of
<PAGE> 36
international trade missions.
Allan Greenspoon, age 43, is Chief Financial Officer and a Director of the
Registrant. He is a chartered accountant and has been a member of the
Institute of Chartered Accountants in the Province of Ontario since 1979.
Mr. Greenspoon has extensive experience in the areas of product and concept
development and implementation. He was the founder and President of Circlet
Foods Inc., a company which pioneered the development of the ready-to-use
pizza crust. While with Circlet, Mr. Greenspoon developed the company's
North American distribution network. Recently, Circlet was sold to a large
international food conglomerate. Mr. Greenspoon presently serves as
President of Tasty Batters, a baked goods manufacturer and distributor.
Darryl R. Lustig, age 39, is a Director of the Registrant. Mr. Lustig is
currently Corporate Vice President, Sales and Marketing of Colonial Health
Care Supply Company of Lake Zurich, Illinois, a subsidiary of Bergen
Brunswig Corporation. Prior to joining Colonial, Mr. Lustig was responsible
for the start-up of Gibeck, Inc. in the United States, which specializes in
the manufacturing and distribution of anesthesia and respiratory supplies.
Mr. Lustig has extensive experience in the area of distribution, having
spent the last 18 years in sales and marketing positions in the health care
industry, both with manufacturing and distribution companies, domestically
and internationally.
Michael J. Bellman, age 29, is Vice President of the Registrant. He is a
lawyer with a Master of Business Administration degree. He was called to
the Bar of the Province of Ontario in February, 1996. Mr. Bellman completed
his articles with Davies, Ward & Beck, a Toronto law firm. Mr. Bellman has
worked jointly with and consulted to Mr. Lee Greenspoon on a number of
projects while Mr. Greenspoon was with Bariston Inc. and Seidenstrasse
Development Corporation. Mr. Bellman has been involved in a number of
entrepreneurial projects, including the ownership of a paralegal service
and a household furniture company. He has also worked as a consultant to
the financial services industry, most notably as Project Director for
Brendan Wood International's "The Bond Market in Canada - 1992 Edition".
Avi S. Greenspoon, age 27, is the Secretary of the Registrant. Mr.
Greenspoon is a lawyer and a member of the Bar of the Province of Ontario.
Mr. Greenspoon is an associate in the corporate/commercial/securities
practice group at Aird & Berlis, a Toronto law firm.
FAMILY RELATIONSHIPS
Messrs. Mel B. Greenspoon and Allan Greenspoon are brothers. Mr. Mel B.
Greenspoon is the father of Messrs. Lee A. Greenspoon and Avi S.
Greenspoon. Mr. Darryl R. Lustig is a cousin of Messrs. Mel B. Greenspoon
and Allan Greenspoon.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
To the knowledge of management, during the past five years, no present or
former Director, person nominated to become a Director, Officer, promoter
or control person of the Company:
(1) was a general partner or executive officer of any business by or
against which any bankruptcy petition was filed, whether at the time
of such filing or two years prior thereto;
<PAGE> 37
(2) was convicted in a criminal proceeding or named the subject of a
pending criminal proceeding (excluding traffic violations and other
minor offences);
(3) was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from or
otherwise limiting in any type of business, securities or banking
activities; and
(4) was found by a court of competent jurisdiction (in a civil action),
the Securities and Exchange Commission or the Commodity Futures Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended, or
vacated.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The following statements were filed with the Securities and Exchange
Commission during the fiscal year ending September 30, 1996: Form 3
(Initial Statement of Beneficial Ownership of Securities) for Mel B.
Greenspoon, Allan Greenspoon, Lee A. Greenspoon, Avi S. Greenspoon, and
Michael J. Bellman; and Form 4 (Change of Beneficial Ownership) for Allan
Greenspoon, and Lee A. Greenspoon.
ITEM 10. EXECUTIVE COMPENSATION.
On January 24, 1996, the Registrant registered and filed with the
Securities and Exchange Commission on Form S-8 its 1996 Nonqualifying Stock
Option Plan and, separately on Form S-8, its 1996 Qualified Stock Option
Plan, both of which are incorporated herein by reference. The Registrant
registered 2,000,000 shares of its Common Stock under each plan.
<PAGE> 38
SUMMARY COMPENSATION TABLE
The following table sets forth the aggregate compensation paid by the
Company for services rendered for the fiscal year ended September 30, 1996
(the table has been divided for ease of presentation):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
(a) (b) (c) (d) (e)
Name and Year Ended Other
Principal September 30 Annual
Positions Salary($) Bonus($) Compensation($)
<S> <C> <C> <C> <C>
Mel B. Greenspoon
Chairman, Chief
Executive Officer,
and Director 1996 0 0 0
Allan Greenspoon
Chief Financial
Officer and
Director 1996 0 0 0
Lee A. Greenspoon
President, Chief
Operating Officer,
and Director 1996 0 0 0
Darryl R. Lustig
Director 1996 0 0 0
Michael J. Bellman(1)
Vice President 1996 0 0 0
Avi S. Greenspoon
Secretary 1996 0 0 0
Jack R. Coombs
Former President
and Former Director 1996 0 0 0
Sandra E. Hansen
Former Vice
President and
Former Director 1996 0 0 0
Sheryl A. Ross
Former Secretary,
Former Treasurer,
and Former Director 1996 0 0 0
</TABLE>
<PAGE> 39
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE (Cont.)
Long Term Compensation
Awards Payouts
(a) (b) (f) (g) (h) (i)
Name and Year Restricted Securities All
Principal Ended Stock Underlying LTIP Other
Positions September Award(s) Options/ Payouts Compen-
30 SARs (#) ($) sation ($)
<S> <C> <C> <C> <C> <C>
Mel B. Greenspoon
Chairman and Chief
Executive Officer 1996 0 0/0 0 0
Allan Greenspoon
Chief Financial
Officer and
Director 1996 0 500,000/0 0 0
Lee A. Greenspoon
President, Chief
Operating Officer,
and Director 1996 0 500,000/0 0 0
Darryl R. Lustig
Director 1996 0 0/0 0 0
Michael J. Bellman(1)
Vice President 1996 0 0/0 0 0
Avi S. Greenspoon
Secretary 1996 0 0/0 0 0
Jack R. Coombs
Former President,
and Former Director 1996 0 0/0 0 0
Sandra E. Hansen(2)
Former Vice
President and
Former Director 1996 0 0/0 0 0
Sheryl A. Ross(2)
Former Secretary,
Former Treasurer,
and Former Director 1996 0 0/0 0 0
</TABLE>
Notes:
(1) Mr. Bellman was not an Officer of the Registrant at any time during the
fiscal year ending September 30, 1996. However, prior to his appointment as
an Officer of the Registrant on December 2, 1996, Mr. Bellman provided
certain consulting services to the Company. On April 17, 1996, the
Registrant granted to Mr. Bellman, pursuant to its 1996 Nonqualifying Stock
Option Plan, options to acquire 3,000 shares of Common Stock at an exercise
price of $0.75 each. On such date, Mr. Bellman exercised all of such
options. Mr. Bellman sold all 3,000 shares for gross proceeds of $3,750, or
$1.25 per share. On December 2, 1996, the Registrant granted to Mr. Bellman
pursuant to its 1996 Qualified Stock Option Plan, options to acquire
<PAGE> 40
250,000 shares of Common Stock at an exercise price of $0.50 each. Such
options may be exercised by Mr. Bellman at any time and from time to time
from June 3, 1997 to January 24, 2006.
(2) On October 24, 1995, the Registrant filed an S-8 Registration Statement
with the Securities and Exchange Commission registering the issuance of
100,000 shares of its Common Stock to certain consultants for services to
be rendered, and is incorporated herein by reference. These shares were
issued as follows, to-wit: Leonard W. Burningham, Esq., 29,000 shares;
Branden T. Burningham, Esq., 29,000 shares; Sheryl A. Ross, 29,000 shares;
and Sandra E. Hansen, 13,000 shares. Management of the Company has no
further information with respect to the status of the shareholdings of Ms.
Ross and Ms. Hansen.
OPTION/SAR GRANTS TABLE
On January 24, 1996, the Registrant filed its 1996 Nonqualifying Stock
Option Plan and its 1996 Qualified Stock Option Plan, both on Form S-8,
with the Securities and Exchange Commission. A total of 2,000,000 shares of
Common Stock were registered under each plan.
The Registrant has granted under the 1996 Nonqualifying Stock Option Plan
308,000 stock options, in the aggregate, to certain consultants of the
Company in lieu of cash payment for services. None of these consultants
were Officers, Directors, or affiliates of the Registrant at the date of
such grant and, with the exception of Mr. Bellman, none are Officers,
Directors, or affiliates of the Registrant as of the date hereof. As of the
date hereof, all of the aforementioned 308,000 options have been exercised.
The following table sets forth the aggregate option/SAR grants made by the
Registrant to current Officers during the past fiscal year. All such grants
were made from the Registrant's above-mentioned 1996 Qualified Stock Option
Plan (with the exception of the grant to Michael J. Bellman, as described
below). As of September 30, 1996, the Registrant had granted a total of
1,000,000 options from its 1996 Qualified Stock Option Plan. As of the date
hereof, none of the aforementioned 1,000,000 options have been exercised.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Individual Grants
(a) (b) (c) (d) (e)
Number of
Securities % of Total
Underlying Options/SARs
Options/ Granted to Exercise or
SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date
<S> <C> <C> <C> <C>
Mel B. Greenspoon 0/0 n/a n/a n/a
Allan Greenspoon 500,000/0 49.85% $0.75 01/24/2006
Lee. A. Greenspoon 500,000/0 49.85% $0.75 01/24/2006
Michael J. Bellman(1) 3,000/0 0.3% $0.75 Exercised
</TABLE>
Notes:
(1) Prior to his appointment as an Officer of the Registrant on December 2,
1996, Mr. Bellman provided certain consulting services to the Company. On
<PAGE> 41
April 17, 1996, the Registrant granted to Mr. Bellman, pursuant to its 1996
Nonqualifying Stock Option Plan, options to acquire 3,000 shares of Common
Stock of the Registrant at an exercise price of $0.75 each. On December 2,
1996, the Registrant granted to Mr. Bellman pursuant to its 1996 Qualified
Stock Option Plan, options to acquire 250,000 shares of Common Stock at an
exercise price of $0.50 each. Such options may be exercised by Mr. Bellman
at any time and from time to time from June 3, 1997 to January 24, 2006.
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE
TABLE
The following table sets forth the aggregated option/SAR exercises made by
Officers of the Registrant during the past fiscal year.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises and FY-End Option/SAR Values
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs at
at FY-End (#) FY-End ($)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Mel B. Greenspoon n/a n/a 0/0 0/0
Allan Greenspoon n/a n/a 500,000/0 0/0
Lee A. Greenspoon n/a n/a 500,000/0 0/0
</TABLE>
On December 2, 1996, the Registrant granted to Michael J. Bellman, pursuant
to its 1996 Qualified Stock Option Plan, options to acquire 250,000 shares
of Common Stock at an exercise price of $0.50 each. Such options may be
exercised by Mr. Bellman at any time and from time to time from June 3,
1997 to January 24, 2006.
LONG-TERM INCENTIVE PLAN AWARDS TABLE
There are no long-term incentive plans of the Company.
As indicated previously in this Item, on October 24, 1995, the Registrant
filed an S-8 Registration Statement registering the issuance of 100,000
shares of its Common Stock to certain consultants for services to be
rendered.
Also, as indicated previously in this Item, on January 24, 1996, the
Registrant filed two S-8 Registration Statements, one to register its 1996
Nonqualifying Stock Option Plan and the other to register its 1996
Qualified Stock Option Plan, both of which are incorporated herein by
reference. The Registrant registered 2,000,000 shares of its Common Stock
under each plan.
<PAGE> 42
COMPENSATION OF DIRECTORS
No compensation has been paid or is payable to the Directors of the
Registrant in their capacity as such.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
There are no employment contracts between the Registrant and any of its
Directors or Officers.
There are no compensatory plans or arrangements, including payments to be
received from the Registrant, with respect to any person named in the
Summary Compensation Table of this Item, which would in any way result in
payments to such person because of his or her resignation, retirement or
other termination of such person's employment with the Company, or any
change in control of the Registrant, or a change in the person's
responsibilities following a change in control of the Registrant.
REPORT ON REPRICING OF OPTIONS/SARS
None.
<PAGE> 43
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth the shareholdings of the Registrant's
present Officers and Directors and those persons known to management who
beneficially own more than 5% of the Registrant's Common Stock as of
December 23, 1996.
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title of Name and Address of Amount and Percent of Class
Class Beneficial Owner Nature of
Beneficial Owner
<S> <C> <C> <C>
Common Mel B. Greenspoon
Stock 85 Skymark Drive,
Suite 1703, North
York, Ontario,
Canada, M2H 3P2 1,110,332 21.6%
Common Allan Greenspoon(1)
Stock 50 Renaissance Court
Thornhill, Ontario,
Canada, L4J 7W4 1,110,332 21.6%
Common Lee A. Greenspoon(2)
Stock 11 Wetherby Circle
Thornhill, Ontario,
Canada, L3T 7R8 457,869 8.9%
Common Darryl R. Lustig
Stock 55 Oakwood Road
Lake Zurich, Illinois 0 0
Common Michael J. Bellman(3)
Stock 128 Clansman Blvd.
North York, Ontario,
Canada, M2H 1Y1 100,000 1.9%
Common Avi S. Greenspoon
Stock 3 Wetherby Circle
Thornhill, Ontario,
Canada, L3T 7R8 572,336 11.1%
Common Toddington Investments Ltd.(4)
Stock P.O. Box 260
Providenciales, Turks and
Caicos Islands, British
West Indies;
I.M.M. Management Ltd.
P.O. Box 260
Providenciales, Turks and
Caicos Islands, British
West Indies; and
Anicorp Ltd.
P.O. Box 260
Providenciales, Turks and
Caicos Islands, British
West Indies 400,000 7.8%
</TABLE>
<PAGE> 44
Notes:
(1) Mr. Allan Greenspoon also holds options to acquire an additional
500,000 shares of Common Stock exerciseable at any time and from time to
time until January 24, 2006.
(2) Mr. Lee A. Greenspoon also holds options to acquire an additional
500,000 shares of Common Stock exerciseable at any time and from time to
time until January 24, 2006.
(3) Mr. Michael J. Bellman also holds options to acquire an additional
250,000 shares of Common Stock exerciseable at any time and from time to
time from June 3, 1997 until January 24, 2006.
(4) This information is derived solely from the Schedule 13D of Toddington
Investments Ltd., dated March 4, 1996, filed with the Securities and
Exchange Commission. Management of the Company has no further information
concerning the relationship among Toddington Investments Ltd., I.M.M.
Management Ltd., and Anicorp Ltd.
The Officers and Directors of the Registrant collectively as a group own an
aggregate of 3,350,869 shares of Common Stock, representing approximately
65% of the issued and outstanding Common Stock of the Registrant, on an
undiluted basis and, collectively as a group, hold options to acquire
1,250,000 shares of Common Stock of the Registrant.
CHANGES IN CONTROL
To the knowledge of management of the Company, there are no present
arrangements or pledges of the Registrant's securities which may result in
a change of control.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(a) On January 19, 1996, the Registrant exchanged 3,735,000 shares of its
Common Stock, pursuant to Regulation S promulgated under the Securities Act
of 1933, as amended, for 100% of the issued and outstanding stock of
Windsor. At all material times from incorporation to the date of
acquisition as aforesaid, Messrs. Mel B. Greenspoon, Allan Greenspoon, Lee
A. Greenspoon, Avi Greenspoon, and Michael J. Bellman held approximately
90% of the outstanding stock in the capital of Windsor. Please see Item 1
for further information.
(b) As payment for certain consulting and advisory services rendered in
connection with the acquisition of Windsor, on January 24, 1996, the
Registrant granted to Suncastle Developments Corporation ("Suncastle") an
aggregate of 200,000 options at an exercise price of $0.0001 each, pursuant
to the Registrant's 1996 Nonqualifying Stock Option Plan. On the same day,
Suncastle exercised all of the foregoing options and acquired 200,000
shares of the Registrant's Common Stock.
(c) The Novatone Agreement, including the Novatone License, was assigned to
Windsor by MG, In Trust. MG, In Trust held the Novatone License in trust
for Javlee. Javlee is controlled by Mel B. Greenspoon who is Chairman,
Chief Executive Officer, and a Director of the Registrant. In connection
with this assignment, Windsor issued to Javlee the Javlee Note. Please see
Item 1 for further information.
(d) Windsor borrowed $50,000 from Mel B. Greenspoon. In consideration of
such loan, on January 17, 1996, Windsor issued to Mr. Greenspoon an
unsecured term note in the principal amount of $50,000, payable on January
17, 1997 (the "Mel Greenspoon Note"). The Mel Greenspoon Note bears
<PAGE> 45
interest at a variable rate as charged by a Canadian chartered bank, for
United States dollar loans. A copy of the Mel Greenspoon Note is attached
hereto as Exhibit 10.13. Mr. Greenspoon is Chairman, Chief Executive
Officer, and a Director of the Registrant.
(e) In consideration of providing the introduction of management of the
Company to Startech, and upon execution of the PWC Joint Venture Agreement,
the Registrant issued 400,000 shares of Common Stock pursuant to Regulation
S promulgated under the Securities Act of 1933, as amended, to Toddington
Investments Ltd. Please see Item 1 for further information.
TRANSACTIONS WITH PROMOTERS
None.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
REPORTS ON FORM 8-K
No report on Form 8-K was filed by the Registrant during the last quarter
of its most recent fiscal year.
EXHIBITS
Exhibit No. Description
3.1 Articles of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 to the Registrant's Form 10-KSB for
the fiscal year ended September 30, 1994).
3.2 Articles of Amendment to the Articles of Incorporation of
the Registrant, filed on November 2, 1987 (incorporated by
reference to Exhibit 3.3 to the Registrant's Form 10-KSB
for the fiscal year ended September 30, 1994).
3.3 Articles of Amendment to the Articles of Incorporation of
the Registrant, filed on April 2, 1990 (incorporated by
reference to Exhibit 3.3 to the Registrant's Form 10-KSB
for the fiscal year ended September 30, 1994).
3.4 By-laws of the Registrant (incorporated by reference to
Exhibit 3.4 to the Registrant's Form 10-KSB Annual
Report for the fiscal year ended September 30, 1994).
3.5 Amended by-laws of the Registrant.
10.1 1996 Nonqualifying Stock Option Plan (incorporated by
reference to Exhibit 10.1 to the Registrant's Registration
Statement on Form S-8 dated January 24, 1996.
10.2 1996 Qualified Stock Option Plan (incorporated by reference
to Exhibit 10.1 to the Registrant's Registration Statement
on Form S-8 dated January 24, 1996.
10.3 U.S. Novacrete License Agreement dated July 31, 1996 between
Globesat Infrastructure Technologies Corp. and BGS
Promotions Inc.
<PAGE> 46
10.4 U.S. Novacrete Supply Agreement dated July 31, 1996
between Globesat Infrastructure Technologies Corp.,
Stratford Acquisition Corp. and Supercrete N/A Limited.
10.5 Latin American Novacrete License Agreement dated July 31,
1996 between Globesat Infrastructure Technologies Corp.,
Stratford Acquisition Corp. and Supercrete N/A Limited.
10.6 Consulting Agreement dated February 19, 1996 between the
Registrant and Herb Adams
10.7 Consulting Agreement dated February 19, 1996 between the
Registrant and Toddington Investments Ltd.
10.8 PWC Joint Venture Agreement dated February 19, 1996 between
the Registrant and Startech Environmental Corp.
10.9 Novatone Agreement dated November 17, 1995 between LA-NUR
Inc. and Nicholas Plessas, in Trust.
10.10 First Novatone Assignment Agreement dated November 30,
1995 between LA-NUR Inc., Nicholas Plessas, in Trust and Mel
Greenspoon, in Trust.
10.11 Second Novatone Assignment Agreement dated January 17, 1996
between LA-NUR Inc., Mel Greenspoon, in Trust and Windsor
Acquisition Corp.
10.12 Javlee Note dated January 17, 1996 in the principal amount
of $75,000.
10.13 Mel Greenspoon Note dated January 17, 1996 in the principal
amount of $50,000.
21 List of Subsidiaries.
27 Financial Data Schedule.
<PAGE> 47
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, on the
27th day of December, 1996.
GLOBESAT HOLDING CORP.
(Registrant)
BY: /s/ Mel B. Greenspoon
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities as follows:
SIGNATURES TITLE DATE
/s/ Mel B. Greenspoon Member of the Board of 12/27/96
Directors, Chairman and
Chief Executive Officer
/s/ Lee A. Greenspoon Member of the Board of 12/27/96
Directors, President and
Chief Operating Officer
/s/ Allan Greenspoon Member of the Board of 12/27/96
Directors and Chief
Financial Officer
<PAGE> 1
BYLAWS OF GLOBESAT HOLDING CORP.
ARTICLE I OFFICES
Section 1.01 Location of Offices. The corporation may maintain
such offices within or without the State of Utah as the Board of
Directors may from time to time designate or require.
Section 1.02 Principal Office. The address of the principal office
of the corporation shall be at the address of the registered office of
the corporation as so designated in the office of the Lieutenant
Governor/Secretary of State of the state of incorporation, or at such
other address as the Board of Directors shall from time to time
determine.
ARTICLE 11
SHAREHOLDERS
Section 2.01 Annual Meeting. The annual meeting of the
shareholders shall be held in February of each year or at such other
time designated by the Board of Directors and as is provided for in the
notice of the meeting, for the purpose of electing directors and for
the transaction of such other business as may come before the meeting.
If the election of directors shall not be held on the day designated
for the annual meeting of the shareholders, or at any adjournment
thereof, the Board of Directors shall cause the election to be held at
a special meeting of the shareholders as soon thereafter as may be
convenient.
Section 2.02 Special Meetings. Special meetings of the
shareholders may be called at any time by the chairman of the board,
the president, or by the Board of Directors, or in their absence or
disability, by any vice president, and shall be called by the president
or, in his or her absence or disability, by a vice president or by the
secretary on the written request of the holders of not less than
one-tenth of all the shares entitled to vote at the meeting, such
written request to state the purpose or purposes of the meeting and to
be delivered to the president, each vice-president, or secretary. In
case of failure to call such meeting within 60 days after such request,
such shareholder or shareholders may call the same.
Section 2.03 Place of Meetings. The Board of Directors may
designate any place, either within or without the state of
incorporation, as the place of meeting for any annual meeting or for
any special meeting called by the Board of Directors. A waiver of
notice signed by all shareholders entitled to vote at a meeting may
designate any place, either within or without the state of
incorporation, as the place for the holding of such meeting. If no
designation is made, or if a special meeting be otherwise called, the
place of meeting shall be at the principal office of the corporation.
<PAGE> 2
Section 2.04 Notice of Meetings. The secretary or assistant
secretary, if any, shall cause notice of the time, place, and purpose
or purposes of all meetings of the shareholders (whether annual or
special), to be mailed at least ten days, but not more than 30 days,
prior to the meeting, to each shareholder of record entitled to vote.
Section 2.05 Waiver of Notice. Any shareholder may waive notice of
any meeting of shareholders (however called or noticed, whether or not
called or noticed and whether before, during, or after the meeting), by
signing a written waiver of notice or a consent to the holding of such
meeting, or an approval of the minutes thereof. Attendance at a
meeting, in person or by proxy, shall constitute waiver of all defects
of call or notice regardless of whether waiver, consent, or approval is
signed or any objections are made. All such waivers, consents, or
approvals shall be made a part of the minutes of the meeting.
Section 2.06 Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any annual meeting of
shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of
the corporation may provide that the share transfer books shall be
closed, for the purpose of determining shareholders entitled to notice
of or to vote at such meeting, but not for a period exceeding fifty
(50) days. If the share transfer books are closed for the purpose of
determining shareholders entitled to notice of or to vote at such
meeting, such books shall be closed for at least ten (10) days
immediately preceding such meeting.
ln lieu of closing the share transfer books, the Board of
Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more
than fifty (50) and, in case of a meeting of shareholders, not less
than ten (10) days prior to the date on which the particular action
requiring such determination of shareholders is to be taken. If the
share transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a
meeting or to receive payment of a dividend, the date on which notice
of the meeting is mailed or the date on which the resolution of the
Board of Directors declaring such dividend is adopted, as the case may
be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, such
determination shall apply to any adjournment thereof. Failure to comply
with this Section shall not affect the validity of any action taken at
a meeting of shareholders.
Section 2.07 Voting Lists. The officer or agent of the corporation
having charge of the share transfer books for shares of the corporation
shall make, at least ten (10) days before each meeting of shareholders,
a complete list of the shareholders entitled to vote at such meeting or
any adjournment thereof, arranged in alphabetical order, with the
<PAGE> 3
address of, and the number of shares held by each, which list, for a
period of ten (10) days prior to such meeting, shall be kept on file at
the registered office of the corporation and shall be subject to
inspection by any shareholder during the whole time of the meeting. The
original share transfer book shall be prima facia evidence as to the
shareholders who are entitled to examine such list or transfer books,
or to vote at any meeting of shareholders.
Section 2.08 Quorum. One-third of the total voting power of the
outstanding shares of the corporation entitled to vote, represented in
person or by proxy, shall constitute a quorum at a meeting of the
shareholders. If a quorum is present, the affirmative vote of the
majority of the voting power represented by shares at the meeting and
entitled to vote on the subject shall constitute action by the
shareholders, unless the vote of a greater number or voting by classes
is required by the laws of the state of incorporation of the
corporation or the Articles of Incorporation. If less than one-third of
the outstanding voting power is represented at a meeting, a majority of
the voting power represented by shares so present may adjourn the
meeting from time to time without further notice. At such adjourned
meeting at which a quorum shall be present or represented, any business
may be transacted which might have been transacted at the meeting as
originally noticed.
Section 2.09 Voting of Shares. Each outstanding share of the
corporation entitled to vote shall be entitled to one vote on each
matter submitted to vote at a meeting of shareholders, except to the
extent that the voting rights of the shares of any class or series of
stock are determined and specified as greater or lesser than one vote
per share in the manner provided by the Articles of Incorporation.
Section 2.10 Proxies. At each meeting of the shareholders, each
shareholder entitled to vote shall be entitled to vote in person or by
proxy; provided, however, that the right to vote by proxy shall exist
only in case the instrument authorizing such proxy to act shall have
been executed in writing by the registered holder or holders of such
shares, as the case may be, as shown on the share transfer of the
corporation or by his or her or her attorney thereunto duly authorized
in writing. Such instrument authorizing a proxy to act shall be
delivered at the beginning of such meeting to the secretary of the
corporation or to such other officer or person who may, in the absence
of the secretary, be acting as secretary of the meeting. In the event
that any such instrument shall designate two or more persons to act as
proxies, a majority of such persons present at the meeting, or if only
one be present, that one shall (unless the instrument shall otherwise
provide) have all of the powers conferred by the instrument on all
persons so designated. Persons holding stock in a fiduciary capacity
shall be entitled to vote the shares so held and the persons whose
shares are pledged shall be entitled to vote, unless in the transfer by
the pledge or on the books of the corporation he or she shall have
expressly empowered the pledgee to vote thereon, in which case the
pledgee, or his or her or her proxy, may represent such shares and vote
<PAGE> 4
thereon.
Section 2.11 Written Consent to Action by Shareholders. Any action
required to be taken at a meeting of the shareholders, or any other
action which may be taken at a meeting of the shareholders, may be
taken without a meeting, if a consent in writing, setting forth the
action so taken, shall be signed by all of the shareholders entitled to
vote with respect to the subject maker thereof.
ARTICLE III
DIRECTORS
Section 3.01 General Powers. The property, affairs, and business
of the corporation shall be managed by its Board of Directors. The
Board of Directors may exercise all the powers of the corporation
whether derived from law or the Articles of Incorporation, except such
powers as are by statute, by the Articles of Incorporation or by these
Bylaws, vested solely in the shareholders of the corporation.
Section 3.02 Number, Term, and Qualifications. The Board of
Directors shall consist of three to nine persons. Increases or
decreases to said number may be made, within the numbers authorized by
the Articles of Incorporation, as the Board of Directors shall from
time to time determine by amendment to these Bylaws. An increase or a
decrease in the number of the members of the Board of Directors may
also be had upon amendment to these Bylaws by a majority vote of all of
the shareholders, and the number of directors to be so increased or
decreased shall be fixed upon a majority vote of all of the
shareholders of the corporation. Each director shall hold office until
the next annual meeting of shareholders of the corporation and until
his or her successor shall have been elected and shall have qualified.
Directors need not be residents of the state of incorporation or
shareholders of the corporation.
Section 3.03 Classification of Directors. In lieu of electing the
entire number of directors annually, the Board of Directors may provide
that the directors be divided into either two or three classes, each
class to be as nearly equal in number as possible, the term of office
of the directors of the first class to expire at the first annual
meeting of shareholders after their election, that of the second class
to expire at the second annual meeting after their election, and that
of the third class, if any, to expire at the third annual meeting after
their election. At each annual meeting after such classification, the
number of directors equal to the number of the class whose term expires
at the time of such meeting shall be elected to hold office until the
second succeeding annual meeting, if there be two classes, or until the
third succeeding annual meeting, if there be three classes.
Section 3.04 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw
immediately following, and at the same place as, the annual meeting of
shareholders. The Board of Directors may provide by resolution the time
<PAGE> 5
and place, either within or without the state of incorporation, for the
holding of additional regular meetings without other notice than such
resolution.
Section 3.05 Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the president, vice
president, or any two directors. The person or persons authorized to
call special meetings of the Board of Directors may fix any place,
either within or without the state of incorporation, as the place for
holding any special meeting of the Board of Directors called by them.
Section 3.06 Meetings by Telephone Conference Call. Members of the
Board of Directors may participate in a meeting of the Board of
Directors or a committee of the Board of Directors by means of
conference telephone or similar communication equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this Section shall constitute
presence in person at such meeting.
Section 3.07 Notice. Notice of any special meeting shall be given
at least ten (10) days prior thereto by written notice delivered
personally or mailed to each director at his or her regular business
address or residence, or by telegram. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail so
addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram
is delivered to the telegraph company. Any director may waive notice of
any meeting. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a
meeting solely for the express purpose of objecting to the transaction
of any business because the meeting is not lawfully called or convened.
Section 3.08 Quorum. A majority of the number of directors shall
constitute a quorum for the transaction of business at any meeting of
the Board of Directors, but if less than a majority is present at a
meeting, a majority of the directors present may adjourn the meeting
from time to time without further notice.
Section 3.09 Manner of Acting. The act of a majority of the
directors present at a meeting at which a quorum is present shall be
the act of the Board of Directors, and the individual directors shall
have no Power as such.
Section 3.10 Vacancies and Newly Created Directorship. If any
vacancies shall occur in the Board of Directors by reason of death,
resignation or otherwise, or if the number of directors shall be
increased, the directors then in office shall continue to act and such
vacancies or newly created directorships shall be filled by a vote of
the directors then in office, though less than a quorum, in any way
approved by the meeting. Any directorship to be filled by reason of
removal of one or more directors by the shareholders may be filled by
election by the shareholders at the meeting at which the director or
<PAGE> 6
directors are removed.
Section 3.11 Compensation. By resolution of the Board of
Directors, the directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors, and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or a
stated salary as director. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving
compensation therefor.
Section 3.12 Presumption of Assent. A director of the corporation
who is present at a meeting of the Board of Directors at which action
on any corporate matter is taken shall be presumed to have assented to
the action taken unless his or her or her dissent shall be entered in
the minutes of the meeting, unless he or she shall file his or her or
her written dissent to such action with the person acting as the
secretary of the meeting before the adjournment thereof, or shall
forward such dissent by registered or certified mail to the secretary
of the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in favour
of such action.
Section 3.13 Resignations. A director may resign at any time by
delivering a written resignation to either the president, a vice
president, the secretary, or assistant secretary, if any. The
resignation shall become effective on its acceptance by the Board of
Directors; provided, that if the board has not acted thereon within ten
days from the date presented, the resignation shall be deemed accepted.
Section 3.14 Written Consent to Action by Directors. Any action
required to be taken at a meeting of the directors of the corporation
or any other action which may be taken at a meeting of the directors or
of a committee, may be taken without a meeting, if a consent in
writing, setting forth the action so taken, shall be signed by all of
the directors, or all of the members of the committee, as the case may
be. Such consent shall have the same legal effect as a unanimous vote
of all the directors or members of the committee.
Section 3.15 Removal. At a meeting expressly called for that
purpose, one or more directors may be removed by a vote of a majority
of the shares of outstanding stock of the corporation entitled to vote
at an election of directors.
ARTICLE IV
OFFICERS
Section 4.01 Number. The officers of the corporation shall be a
president, one or more vice-presidents, as shall be determined by
resolution of the Board of Directors, a secretary, a treasurer, and
such other officers as may be appointed by the Board of Directors. The
Board of Directors may elect, but shall not be required to elect, a
chairman of the board and the Board of Directors may appoint a general
<PAGE> 7
manager.
Section 4.02 Election, Term of Office. and Qualifications. The
officers shall be chosen by the Board of Directors annually at its
annual meeting. In the event of failure to choose officers at an annual
meeting of the Board of Directors, officers may be chosen at any
regular or special meeting of the Board of Directors. Each such officer
(whether chosen at an annual meeting of the Board of Directors to fill
a vacancy or otherwise) shall hold his or her office until the next
ensuing annual meeting of the Board of Directors and until his or her
successor shall have been chosen and qualified, or until his or her
death, or until his or her resignation or removal in the manner
provided in these Bylaws. Any one person may hold any two or more of
such offices, except that the president shall not also be the
secretary. No person holding two or more offices shall act in or
execute any instrument in the capacity of more than one office. The
chairman of the board, if any, shall be and remain a director of the
corporation during the term of his or her office. No other officer need
be a director.
Section 4.03 Subordinate Officers, Etc. The Board of Directors
from time to time may appoint such other officers or agents as it may
deem advisable, each of whom shall have such title, hold office for
such period, have such authority, and perform such duties as the Board
of Directors from time to time may determine. The Board of Directors
from time to time may delegate to any officer or agent the power to
appoint any such subordinate officer or agents and to prescribe their
respective titles, terms of office, authorities, and duties.
Subordinate officers need not be shareholders or directors.
Section 4.04 Resignations. Any officer may resign at any time by
delivering a written resignation to the Board of Directors, the
president, or the secretary. Unless otherwise specified therein, such
resignation shall take effect on delivery.
Section 4.05 Removal. Any officer may be removed from office at
any special meeting of the Board of Directors called for that purpose
or at a regular meeting, by vote of a majority of the directors, with
or without cause. Any officer or agent appointed in accordance with the
provisions of Section 4.03 hereof may also be removed, either with or
without cause, by any officer on whom such power of removal shall have
been conferred by the Board of Directors.
Section 4.06 Vacancies and Newly Created Offices. If any vacancy
shall occur in any office by reason of death, resignation, removal,
disqualification, or any other cause, or if a new office shall be
created, then such vacancies or new created offices may be filled by
the Board of Directors at any regular or special meeting.
Section 4.07 The Chairman of the Board. The Chairman of the Board,
if there be such an officer, shall have the following powers and
duties.
<PAGE> 8
(a) He or she shall preside at all shareholders' meetings;
(b) He or she shall preside at all meetings of the Board of
Directors; and
(c) He or she shall be a member of the executive committee, if
any.
Section 4.08 The President. The president shall have the following
powers and duties:
(a) If no general manager has been appointed, he or she shall be
the chief executive officer of the corporation, and, subject
to the direction of the Board of Directors, shall have
general charge of the business, affairs, and property of the
corporation and general supervision over its officers,
employees, and agents;
(b) If no chairman of the board has been chosen, or if such
officer is absent or disabled, he or she shall preside at
meetings of the shareholders and Board of Directors;
(c) He or she shall be a member of the executive committee, if
any;
(d) He or she shall be empowered to sign certificates
representing shares of the corporation, the issuance of which
shall have been authorized by the Board of Directors; and
(e) He or she shall have all power and shall perform all duties
normally incident to the office of a president of a
corporation, and shall exercise such other powers and perform
such other duties as from time to time may be assigned to him
or her by the Board of Directors.
Section 4.09 The Vice Presidents. The Board of Directors may, from
time to time, designate and elect one or more vice presidents, one of
whom may be designated to serve as executive ~ice president. Each vice
president shall have such powers and perform such duties as from time
to time may be assigned to him or her by the Board of Directors or the
president. At the request or in the absence or disability of the
president, the executive ~ice president or, in the absence or
disability of the executive vice president, the vice president
designated by the Board of Directors or (in the absence of such
designation by the Board of Directors) by the president, the senior
vice president, may perform all the duties of the president, and when
so acting, shall have all the powers of, and be subject to all the
restrictions upon, the president.
Section 4.10 The Secretary. The secretary shall have the following
powers and duties:
<PAGE> 9
(a) He or she shall keep or cause to be kept a record of all of
the proceedings of the meetings of the shareholders and of the board or
directors in books provided for that purpose;
(b) He or she shall cause all notices to be duly given in
accordance with the provisions of these Bylaws and as required by
statute;
(c) He or she shall be the custodian of the records and of the
seal of the corporation, and shall cause such seal (or a facsimile
thereof) to be affixed to all certificates representing shares of the
corporation prior to the issuance thereof and to all instruments, the
execution of which on behalf of the corporation under its seal shall
have been duly authorized in accordance with these Bylaws, and when so
affixed, he or she may attest the same;
(d) He or she shall assume that the books, reports, statements,
certificates, and other documents and records required by statute are
properly kept and filed;
(e) He or she shall have charge of the share books of the
corporation and cause the share transfer books to be kept in such
manner as to show at any time the amount of the
shares of the corporation of each class issued and outstanding, the
manner in which and the time when such stock was paid for, the names
alphabetically arranged and the addresses of the holders of record
thereof, the number of shares held by each holder and time when each
became such holder or record; and he or she shall exhibit at all
reasonable times to any director, upon application, the original or
duplicate share register. He or she shall cause the share book referred
to in Section 6.04 hereof to be kept and exhibited at the principal
office of the corporation, or at such other place as the Board of
Directors shall determine, in the manner and for the purposes provided
in such Section;
(f) He or she shall be empowered to sign certificates representing
shares of the corporation, the issuance of which shall have been
authorized by the Board of Directors; and
(g) He or she shall perform in general all duties incident to the
office of secretary and such other duties as are given to him or her by
these Bylaws or as from time to time may be assigned to him or her by
the Board of Directors or the president.
Section 4.11 The Treasurer. The treasurer shall have the following
powers and duties:
(a) He or she shall have charge and supervision over and be
responsible for the monies, securities, receipts, and disbursements of
the corporation;
<PAGE> 10
(b) He or she shall cause the monies and other valuable effects of the
corporation to be deposited in the name and to the credit of the
corporation in such banks or trust companies or with such banks or
other depositories as shall be selected in accordance with Section 5.03
hereof;
(c) He or she shall cause the monies of the corporation to be
disbursed by checks or drafts (signed as provided in Section 5.04
hereof) drawn on the authorized depositories of the corporation, and
cause to be taken and preserved property vouchers for all monies
disbursed;
(d) He or she shall render to the Board of Directors or the
president, whenever requested, a statement of the financial condition
of the corporation and of all of this transactions as treasurer, and
render a full financial report at the annual meeting of the
shareholders, if called upon to do so;
(e) He or she shall cause to be kept correct books of account of
all the business and transactions of the corporation and exhibit such
books to any director on request during business hours;
(f) He or she shall be empowered from time to time to require from
all officers or agents of the corporation reports or statements given
such information as he or she may desire with respect to any and all
financial transactions of the corporation; and
(g) He or she shall perform in general all duties incident to the
office of treasurer and such other duties as are given to him or her by
these Bylaws or as from time to time may be assigned to him or her by
the Board of Directors or the president.
Section 4.12 General Manager. The Board of Directors may employ
and appoint a general manager who may, or may not, be one of the
officers or directors of the corporation. The general manager, if any
shall have the following powers and duties:
(a) He or she shall be the chief executive officer of the
corporation and, subject to the directions of the Board of Directors,
shall have general charge of the business affairs and property of the
corporation and general supervision over its officers, employees, and
agents:
(b) He or she shall be charged with the exclusive management of
the business of the corporation and of all of its dealings, but at all
times subject to the control of the Board of Directors;
(c) Subject to the approval of the Board of Directors or the
executive committee, if any, he or she shall employ all employees of
the corporation, or delegate such employment to subordinate officers,
and shall have authority to discharge any person so employed; and
<PAGE> 11
(d) He or she shall make a report to the president and directors
as often as required, setting forth the results of the operations under
his or her charge, together with suggestions looking toward improvement
and betterment of the condition of the corporation, and shall perform
such other duties as the Board of Directors may require.
Section 4.13 Salaries. The salaries and other compensation of the
officers of the corporation shall be fixed from time to time by the
Board of Directors, except that the Board of Directors may delegate to
any person or group of persons the power to fix the salaries or other
compensation of any subordinate officers or agents appointed in
accordance with the provisions of Section 4.03 hereof. No officer shall
be prevented from receiving any such salary or compensation by reason
of the fact that he or she is also a director of the corporation.
Section 4.14 Surety Bonds. In case the Board of Directors shall so
require, any officer or agent of the corporation shall execute to the
corporation a bond in such sums and with such surety or sureties as the
Board of Directors may direct, conditioned upon the faithful
performance of his or her duties to the corporation, including
responsibility for negligence and for the accounting of all property,
monies, or securities of the corporation which may come into his or her
hands.
ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS
Section 5.01 Execution of Instruments. Subject to any limitation
contained in the Articles of Incorporation or these Bylaws, the
president or any vice president or the general manager, if any, may, in
the name and on behalf of the corporation, execute and deliver any
contract or other instrument authorized in writing by the Board of
Directors. The Board of Directors may, subject to any limitation
contained in the Articles of Incorporation or in these Bylaws,
authorize in writing any officer or agent to execute and delivery any
contract or other instrument in the name and on behalf of the
corporation; any such authorization may be general or confined to
specific instances.
Section 5.02 Loans. No loans or advances shall be contracted on
behalf of the corporation, no negotiable paper or other evidence of its
obligation under any loan or advance shall be issued in its name, and
no property of the corporation shall be mortgaged, pledged,
hypothecated, transferred, or com~eyed as security for the payment of
any loan, advance, indebtedness, or liability of the corporation,
unless and except as authorized by the Board of Directors. Any such
authorization may be general or confined to specific instances.
Section 5.03 Deposits. All monies of the corporation not otherwise
employed shall be deposited from time to time to its credit in such
banks and or trust companies or with such bankers or other depositories
<PAGE> 12
as the Board of Directors may select, or as from time to time may be
selected by any officer or agent authorized to do so by the Board of
Directors.
Section 5.04 Checks. Drafts, Etc. All notes, drafts, acceptances,
checks, endorsements, and, subject to the provisions of these Bylaws,
evidences of indebtedness of the corporation, shall be signed by such
officer or officers or such agent or agents of the corporation and in
such manner as the Board of Directors from time to time may determine.
Endorsements for deposit to the credit of the corporation in any of its
duly authorized depositories shall be in such manner as the Board of
Directors from time to time may determine.
Section 5.05 Bonds and Debentures. Every bond or debenture issued
by the corporation shall be evidenced by an appropriate instrument
which shall be signed by the president or a vice president and by the
secretary and sealed with the seal of the corporation. The seal may be
a facsimile, engraved or printed. Where such bond or debenture is
authenticated with the manual signature of an authorized officer of the
corporation or other trustee designated by the indenture of trust or
other agreement under which such security is issued, the signature of
any of the corporation's officers named thereon may be a facsimile. ln
case any officer who signed, or whose facsimile signature has been used
on any such bond or debenture, should cease to be an officer of the
corporation for any reason before the same has been delivered by the
corporation, such bond or debenture may nevertheless be adopted
by the corporation and issued and delivered as through the person who
signed it or whose facsimile signature has been used thereon had not
ceased to be such officer.
Section 5.06 Sale. Transfer, Etc. of Securities. Sales, transfers,
endorsements, and assignments of stocks, bonds, and other securities
owned by or standing in the name of the corporation, and the execution
and delivery on behalf of the corporation of any and all instruments in
writing incident to any such sale, transfer, endorsement, or
assignment, shall be effected by the president, or by any vice
president, together with the secretary, or by any officer or agent
thereunto authorized by the Board of Directors.
Section 5.07 Proxies. Proxies to vote with respect to shares of
other corporations owned by or standing in the name of the corporation
shall be executed and delivered on behalf of the corporation by the
president or any vice president and the secretary or assistant
secretary of the corporation, or by any officer or agent thereunder
authorized by the Board of Directors.
ARTICLE VI
CAPITAL SHARES
Section 6.01 Share Certificates. Every holder of shares in the
corporation shall be entitled to have a certificate, signed by the
president or any vice president and the secretary or assistant
<PAGE> 13
secretary, and sealed with the seal (which may be a facsimile, engraved
or printed) of the corporation, certifying the number and kind, class
or series of shares owned by him or her in the corporation; provided,
however, that where such a certificate is countersigned by (a) a
transfer agent or an assistant transfer agent, or (b) registered by a
registrar, the signature of any such president, vice president,
secretary, or assistant secretary may be a facsimile. In case any
officer who shall have signed, or whose facsimile signature or
signatures shall have been used on any such certificate, shall cease to
be such officer of the corporation, for any reason, before the delivery
of such certificate by the corporation, such certificate may
nevertheless be adopted by the corporation and be issued and delivered
as though the person who signed it, or whose facsimile signature or
signatures shall have been used thereon, has not ceased to be such
officer. Certificates representing shares of the corporation shall be
in such form as provided by the statutes of the state of incorporation.
There shall be entered on the share books of the corporation at the
time of issuance of each share, the number of the certificate issued,
the name and address of the person owning the shares represented
thereby, the number and kind, class or series of such shares, and the
date of issuance thereof. Every certificate exchanged or returned to
the corporation shall be marked "Cancelled" with the date of
cancellation.
Section 6.02 Transfer of Shares. Transfers of shares of the
corporation shall be made on the books of the corporation by the holder
of record thereof, or by his or her attorney thereunto duly authorized
by a power of attorney duly executed in writing and filed with the
secretary of the corporation or any of its transfer agents, and on
surrender of the certificate or certificates, properly endorsed or
accompanied by proper instruments of transfer, representing such
shares. Except as provided by law, the corporation and transfer agents
and registrars, if any, shall be entitled to treat the holder of record
of any stock as the absolute owner thereof for all purposes, and
accordingly, shall not be bound to recognize any legal, equitable, or
other claim to or interest in such shares on the part of any other
person whether or not it or they shall have express or other notice
thereof.
Section 6.03 Regulations. Subject to the provisions of this
Article VI and of the Articles of Incorporation, the Board of Directors
may make such rules and regulations as they may deem expedient
concerning the issuance, transfer, redemption, and registration of
certificates for shares of the corporation.
Section 6.04 Maintenance of Stock Ledger at Principal Place of
Business. A share book (or books where more than one kind, class, or
series of stock is outstanding) shall be kept at the principal place of
business of the corporation, or at such other place as the Board of
Directors shall determine, containing the names, alphabetically
arranged, of original shareholders of the corporation, their addresses,
their interest, the amount paid on their shares, and all transfers
<PAGE> 14
thereof and the number and class of shares held by each. Such share
books shall at all reasonable hours be subject to inspection by persons
entitled by law to inspect the same.
Section 6.05 Transfer Agents and Registrars. The Board of
Directors may appoint one or more transfer agents and one or more
registrars with respect to the certificates representing shares of the
corporation, and may require all such certificates to bear the
signature of either or both. The Board of Directors may from time to
time define the respective duties of such transfer agents and
registrars. No certificate for shares shall be valid until
countersigned by a transfer agent, if at the date appearing thereon the
corporation had a transfer agent for such shares, and until registered
by a registrar, if at such date the corporation had a registrar for
such shares.
Section 6.06 Closing of Transfer Books and Fixing of Record Date.
(a) The Board of Directors shall have power to close the share
books of the corporation for a period of not to exceed 50 days
preceding the date of any meeting of shareholders, or the date for
payment of any dividend, or the date for the allotment of rights, or
capital shares shall go into effect, or a date in connection with
obtaining the consent of shareholders for any purpose.
(b) In lieu of closing the share transfer books as aforesaid, the
Board of Directors may fix in advance a date, not exceeding 50 days
preceding the date of any meeting of shareholders, or the date for the
payment of any dividend, or the date for the allotment of rights, or
the date when any change or conversion or exchange of capital shares
shall go into effect, or a date in connection with obtaining any such
consent, as a record date for the determination of the shareholders
entitled to a notice of, and to vote at, any such meeting and any
adjournment thereof, or entitled to receive payment of any such
dividend, or to any such allotment of rights, or to exercise the rights
in respect of any such change, conversion or exchange of capital stock,
or to Rive such consent.
(c) If the share transfer books shall be closed or a record date
set for the purpose of determining shareholders entitled to notice of
or to vote at a meeting of shareholders, such books shall be closed
for, or such record date shall be, at least ten (10) days immediately
preceding such meeting.
Section 6.07 Lost or Destroyed Certificates. The corporation may
issue a new certificate for shares of the corporation in place of any
certificate theretofore issued by it, alleged to have been lost or
destroyed, and the Board of Directors may, in its discretion, require
the owner of the lost or destroyed certificate or his or her legal
representatives, to give the corporation a bond in such form and amount
as the Board of Directors may direct, and with such surety or sureties
as may be satisfactory to the board, to indemnify the corporation and
<PAGE> 15
its transfer agents and registrars, if any, against any claims that may
be made against it or any such transfer agent or registrar on account
of the issuance of such new certificate. A new certificate may be
issued without requiring any bond when, in the judgment of the Board of
Directors, it is proper to do so.
Section 6.08 No Limitation on Voting Rights; Limitation on
Dissenter's Rights. To the extent permissible under the applicable law
of any jurisdiction to which the corporation may become subject by
reason of the conduct of business, the ownership of assets, the
residence of shareholders, the location of offices or facilities, or
any other item, the corporation elects not to be governed by the
provisions of any statute that (i) limits, restricts, modified,
suspends, terminates, or otherwise affects the rights of any
shareholder to cast one vote for each share of common stock registered
in the name of such shareholder on the books of the corporation,
without regard to whether such shares were acquired directly from the
corporation or from any other person and without regard to whether such
shareholder has the power to exercise or direct the exercise of voting
power over any specific fraction of the shares of common stock of the
corporation issued and outstanding or (ii) grants to any shareholder
the right to have his or her stock redeemed or purchased by the
corporation or any other shareholder on the acquisition by any person
or group of persons of shares of the corporation. In particular, to the
extent permitted under the laws of the state of incorporation, the
corporation elects not to be governed by any such provision, including
the provisions of the Utah Control Shares Acquisitions Act, Section
61-6-1 et seq., of the Utah Code Annotated, as amended, or any statute
of similar effect or tenor.
ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 7.01 How Constituted. The Board of Directors may designate
an executive committee and such other committees as the Board of
Directors may deem appropriate, each of which committees shall consist
of two or more directors. Members of the executive committee and of any
such other committees shall be designated annually at the annual
meeting of the Board of Directors; provided, however, that at any time
the Board of Directors may abolish or reconstitute the executive
committee or any other committee. Each member of the executive
committee and of any other committee shall hold office until his or her
successor shall have been designated or until his or her resignation or
removal in the manner provided in these Bylaws.
Section 7.02 Powers. During the intervals between meetings of the
Board of Directors, the executive committee shall have and may exercise
all powers of the Board of Directors in the management of the business
and affairs of the corporation, except for the power to fill vacancies
in the Board of Directors or to amend these Bylaws, and except for such
powers as by law may not be delegated by the Board of Directors to an
executive committee.
<PAGE> 16
Section 7.03 Proceedings. The executive committee, and such other
committees as may be designated hereunder by the Board of Directors,
may fix its own presiding and recording officer or officers, and may
meet at such place or places, at such time or times and on such notice
(or without notice) as it shall determine from time to time. It will
keep a record of its proceedings and shall report such proceedings to
the Board of Directors at the meeting of the Board of Directors next
following.
Section 7.04 Quorum and Manner of Acting. At all meeting of the
executive committee, and of such other committees as may be designated
hereunder by the Board of Directors, the presence of members
constituting a majority of the total authorized membership of the
committee shall be necessary and sufficient to constitute a quorum for
the transaction of business, and the act of a majority of the members
present at any meeting at which a quorum is present shall be the act of
such committee. The members of the executive committee, and of such
other committees as may be designated hereunder by the Board of
Directors, shall act only as a committee and the individual members
thereof shall have no powers as such.
Section 7.05 Resignations. Any member of the executive committee,
and of such other committees as may be designated hereunder by the
Board of Directors, may resign at any time by delivering a written
resignation to either the president, the secretary, or assistant
secretary, or to the presiding officer of the committee of which he or
she is a member, if any shall have been appointed and shall be in
office. Unless otherwise specified herein, such resignation shall take
effect on delivery.
Section 7.06 Removal. The Board of Directors may at any time
remove any member of the executive committee or of any other committee
designated by it hereunder either for or without cause.
Section 7.07 Vacancies. If any vacancies shall occur in the
executive committee or of any other committee designated by the Board
of Directors hereunder, by reason of disqualification, death,
resignation, removal, or otherwise, the remaining members shall, until
the filling of such vacancy, constitute the then total authorized
membership of the committee and, provided that two or more members are
remaining, continue to act. Such vacancy may be filled at any meeting
of the Board of Directors.
Section 7.08 Compensation. The Board of Directors may allow a
fixed sum and expenses of attendance to any member of the executive
committee, or of any other committee designated by it hereunder, who is
not an active salaried employee of the corporation for attendance at
each meeting of said committee.
<PAGE> 17
ARTICLE VIII
INDEMNIFICATION, INSURANCE, AND OFFICER AND
DIRECTOR CONTRACTS
Section 8.01 Indemnification: Third Party Actions. The corporation
shall have the power to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending, or
completed action, or suit by or in the right of the corporation to
procure a judgment in its favour by reason of the fact that he or she
is or was a director, officer, employee, or agent of the corporation,
or is or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including
attorneys' fees) judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him or her in connection with any
such action, suit or proceeding, if he or she acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
or her conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action
or proceeding, he or she had reasonable cause to believe that his or
her conduct was unlawful.
Section 8.02 Indemnification: Corporate Actions. The corporation
shall have the power to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of the corporation to
procure a judgment in its favour by reason of the fact that he or she
is or was a director, officer, employee, or agent of the corporation,
or is or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in
connection with the defense or settlement of such action or suit, if he
or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made in respect of
any claim, issue, or maker as to which such a person shall have been
adjudged to be liable for negligence or misconduct in the performance
of his or her duty to the corporation, unless and only to the extent
that the court in which the action or suit was brought shall determine
on application that, despite the adjudication of liability but in view
of all circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
<PAGE> 18
Section 8.03 Determination. To the extent that a director,
officer, employee, or agent of the corporation has been successful on
the merits or otherwise in defense of any action, suit, or proceeding
referred to in Sections 8.01 and 8.02 hereof, or in defense of any
claim, issue, or maker therein, he or she shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred
by him or her in connection therewith. Any other indemnification under
Sections 8.01 and 8.02 hereof, shall be made by the corporation upon a
determination that indemnification of the officer, director, employee,
or agent is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in Sections 8.01 and 8.02
hereof. Such determination shall be made either (i) by the Board of
Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit, or proceeding; or (ii) by
independent legal counsel on a written opinion; or (iii) by the
shareholders by a majority vote of a quorum of shareholders at any
meeting duly called for such purpose.
Section 8.04 General Indemnification. The indemnification provided
by this Section shall not be deemed exclusive of any other
indemnification granted under any provision of any statute, in the
corporation's Articles of Incorporation, these Bylaws, agreement, vote
of shareholders or disinterested directors, or otherwise, both as to
action in his or her official capacity and as to action in another
capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent, and shall
inure to the benefit of the heirs and legal representatives of such a
person.
Section 8.05 Advances. Expenses incurred in defending a civil or
criminal action, suit, or proceeding as contemplated in this Section
may be paid by the corporation in advance of the final disposition of
such action, suit, or proceeding upon a majority vote of a quorum of
the Board of Directors and upon receipt of an undertaking by or on
behalf of the director, officers, employee, or agent to repay such
amount or amounts unless if it is ultimately determined that he or she
is to indemnified by the corporation as authorized by this Section.
Section 8.06 Scope of Indemnification. The indemnification
authorized by this Section shall apply to all present and future
directors, officers, employees, and agents of the corporation and shall
e corporation and shall
Section 7.04 Quorum and Manner of Acting. At all meeting of the
executive committee, and of such other committees as may be designated
hereunder by the Board of Directors, the presence of members
constituting a majority of the total authorized membership of the
committee shall be necessary and sufficient to constitute a quorum for
the transaction of business, and the act of a majority of the members
present at any meeting at which a quorum is present shall be the act of
such committee. The members of the executive committee, and of such
oint venture, trust, or other enterprise
against any liability asserted against him or her and incurred by him
<PAGE> 19
or her in any such capacity, or arising out of his or her status as
such, whether or not the corporation would have the power to indemnify
him or her against any such liability and under the laws of the state
of incorporation, as the same may hereafter be amended or modified.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of
the Board of Directors.
ARTICLE X
DIVIDENDS
The Board of Directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the manner
and on the terms and conditions provided by the Articles of
Incorporation and these Bylaws.
ARTICLE XI
AMENDMENTS
All Bylaws of the corporation, whether adopted by the Board of
Directors or the shareholders, shall be subject to amendment,
alteration, or repeal, and new Bylaws may be made, except that:
(a) No Bylaws adopted or amended by the shareholders shall be
altered or repealed by the Board of Directors.
(b) No Bylaws shall be adopted by the Board of Directors which
shall require more than a majority of the voting shares for a quorum at
a meeting of shareholders, or more than a majority of the votes cast to
constitute action by the shareholders, except where higher percentages
are required by law; provided, however that (i) if any Bylaw regulating
an impending election of directors is adopted or amended or repealed by
the Board of Directors, there shall be set forth in the notice of the
next meeting of shareholders for the election of directors, the Bylaws
so adopted or amended or repealed, together with a concise statement of
the changes made; and (ii) no amendment, alteration or repeal of this
Article XI shall be made except by the shareholders.
CERTIFICATE OF SECRETARY
The undersigned does hereby certify that he or she is the
secretary of GLOBESAT HOLDING CORP., a corporation duly organized and
existing under and by virtue of the laws of the State of Utah; that the
above and foregoing Bylaws of said corporation were duly and regularly
adopted as such by the Board of Directors of the corporation at a
meeting of the Board of Directors, which was duly and regularly held on
the 18th day of January, 1996, and that the above and foregoing Bylaws
<PAGE> 20
are now in full force and effect.
DATED this 18th day of January, 1996.
/s/ Sheryl A Ross, Secretary
<PAGE> 1
ASSIGNMENT AGREEMENT
THIS AGREEMENT made as of this 31st day of July, 1996.
B E T W E E N :
BGS PROMOTIONS INC., a company incorporated under
the laws of the British Virgin Islands
(hereinafter called "BGS")
- and -
GLOBESAT INFRASTRUCTURE TECHNOLOGIES CORP., a
company incorporated under the laws of the State of Utah, U.S.A.
(hereinafter called "Globesat")
WHEREAS by an agreement dated as of January 15, 1996 between
AMR Investments Limited and BGS (the "January Agreement"), AMR
assigned to BGS all of the rights and benefits flowing from a
certain exclusive license (the "U.S. License") relating to
certain technical information and processes throughout the United
States of America in connection with the Supercrete Technology
(as defined therein) in consideration of the assumption by BGS of
certain indebtedness of AMR;
AND WHEREAS BGS desires to assign, and Globesat desires to
assume, the rights and benefits flowing from the January
Agreement to Globesat;
AND WHEREAS all capitalized terms herein and not otherwise
defined herein shall have the meaning ascribed thereto in the
January Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the mutual covenants and agreements contained herein, the sum
of One Dollar ($1.00) paid by each party hereto to each of the
other parties hereto and for other good and valuable
consideration (the receipt and sufficiency of which are hereby
acknowledged by each of the parties hereto), it is hereby agreed
as follows:
<PAGE> 2
1. Assignment of Rights and Supply and Distribution Agreement.
(a) BGS hereby assigns to Globesat all of BGS's right,
title and interest in and to the U.S. License, all benefits
derived therefrom and any and all rights anicillary thereto, and
Globesat hereby accepts such assignment.
(b) For greater certainty, the assignment constituted
hereby does not include the assumption of any indebtedness of AMR
or BGS by Globesat.
2. Consideration.
(a) In consideration of the assignment of the U.S. License
by BGS to Globesat hereunder, from the commencement of this
Agreement to the expiry of five years from the date hereof,
Globesat shall pay to BGS an aggregate sum of one million dollars
($1,000,000).
(b) Such sum shall be satisfied by payment by Globesat to
BGS of the minimum annual payments set out below on or before the
anniversary date of this Agreement in each respective year:
Year Minimum Payment
1997 $100,000
1998 $250,000
1999 $300,000
2000 $350,000
(c) provided that any annual minimum payment may be reduced
to the extent that any preceding annual minimum payment has been
exceeded, such that the annual minimum payment for any year does
not exceed the amount stated in the above table. Provided,
however, that Globesat may elect, at its sole option, to prepay
the entire sum, or any part thereof, referred to in subsection
3(a) at any time and from time to time without bonus or
deduction.
3. Non-Competition and Non-Solicitation. BGS hereby covenants
and agrees that for a period of three (3) years from the date
hereof:
(a) that it will not for itself, or on behalf of any other
person, partnership, company, corporation or other entity,
contact any employee, consultant, supplier or customer in respect
of the U.S. License or the Supercrete Technology, directly or
<PAGE> 3
indirectly, or aid, abet or assist any other person or entity in
contacting any employee, consultant, supplier or customer in
respect of the U.S. License or the Supercrete Technology, for the
purpose of initiating, engaging in or furthering competition with
such business or for the purpose of hiring such employee or
consultant;
(b) that it shall not directly or indirectly organize or
participate in the organization of any firm, partnership, corpor-
ation, joint venture or other business entity if such firm,
partnership, corporation, joint venture or entity is engaged or
to be engaged in any business, conduct or activity in competition
with that of the U.S. License or the Supercrete Technology; and
(c) that it shall not, directly or indirectly, either
individually or as a consultant, partner, owner or shareholder,
or in any other capacity whatsoever with respect to any person,
firm, partnership, corporation, joint venture or other business
entity, engage in or aid, assist or abet others in engaging in
any business, conduct or activity in competition with that of the
U.S. License or the Supercrete Technology.
5. Representations and Warranties of BGS. BGS hereby
represents and warrants to Globesat (which representations and
warranties shall survive the execution of this Agreement) that:
(a) BGS has good right, full corporate power and authority
to enter into this Agreement and, subject to the consent of
Supercrete N/A Ltd., to assign the U.S. License to BGS in the
manner contemplated herein and to perform all of its obligations
hereunder. BGS has duly executed and delivered this Agreement;
(b) this Agreement is a legal, valid and binding obligation
of BGS enforceable against it in accordance with its terms
subject to (i) bankruptcy, insolvency, moratorium, reorganization
and other laws relating to or affecting the enforcement of
creditors' rights generally and (ii) the fact that equitable
remedies, including the remedies of specific performance and
injunction, may only be granted in the discretion of a court; and
(c) no person has any agreement, option, understanding or
commitment, or any right or privilege (whether by law, preemptive
or contractual) capable of becoming an agreement, option or
commitment, for the purchase or other acquisition from BGS of any
of the rights or benefits in respect of the U.S. Licence, or any
rights or interest therein.
6. Waiver. No waiver by any party hereto of a breach of any of
the covenants, conditions and provisions herein contained shall
<PAGE> 4
be effective or binding upon such party unless the same shall be
expressed in writing and any waiver so expressed shall not limit
or affect such party's rights with respect to any other future
breach.
7. Severability. In the event that any of the provisions
herein contained shall be held unenforceable or declared invalid
for any reason whatsoever, such unenforceability or validity of
the remaining provisions of this Agreement and such unenforceable
or invalid portion shall be servable from the remainder of this
Agreement.
8. Interpretation not Affected by Headings. The division of
this Agreement into articles and sections is for convenience of
reference only and shall not affect the interpretation or
construction of this Agreement.
9. Currency. Unless otherwise indicated herein, all dollar
amounts referred to in this Agreement are in lawful money of
Canada.
10. Successors and Assigns. This Agreement shall be binding
upon and enure to the benefit of the parties hereto and their
respective successors and permitted assigns.
11. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements, understandings,
negotiations, commitments, conditions, representations,
warranties and undertakings.
12. Counterparts. This Agreement may be executed in several
counterparts, each of which so executed shall be deemed to be an
original, and such counterparts together shall constitute but one
and the same instrument.
13. Governing Law. This Agreement shall be construed,
interpreted and enforced in accordance with, and the respective
rights and obligations of the parties shall be governed by, the
laws of the Province of Ontario.
<PAGE> 5
IN WITNESS WHEREOF this agreement has been executed by the
parties hereto as of the date first above written.
GLOBESAT INFRASTRUCTURE TECHNOLOGIES CORP.
Per: /S/ Lee A. Greenspoon, President
BGS PROMOTIONS INC.
Per: /S/ Patrick B. Topppin, Director
<PAGE> 1
SUPPLY AND DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of the 31st day of July,
1996.
B E T W E E N :
SUPERCRETE N/A LIMITED, a corporation
incorporated pursuant to the laws of the
Turks & Caicos Islands, British West Indies
(hereinafter "Supercrete")
- and -
GLOBESAT INFRASTRUCTURE TECHNOLOGIES CORP., a
corporation incorporated pursuant to the laws
of State of Utah, U.S.A.
(hereinafter "Globesat")
- and -
STRATFORD ACQUISITION CORP., a corporation
incorporated pursuant to the laws of the
State of Minnesota, U.S.A.
(hereinafter "Stratford")
WHEREAS Globesat is the owner of the certain
technology, and in conjunction therewith owns the exclusive
rights to manufacture, market, sell and distribute certain
products throughout the United States of America;
AND WHEREAS Globesat wishes to obtain from
Supercrete, and Supercrete has agreed to grant, certain
additional exclusive rights to market, sell and distribute
the Additive (as hereinafter defined) in the Exclusive
Territory (as hereinafter defined);
AND WHEREAS Supercrete is a wholly-owned
subsidiary of Stratford;
AND WHEREAS Stratford has agreed to provide
Globesat with Technical Assistance (as hereinafter defined)
in connection with the foregoing, all upon the terms and
conditions contained herein;
<PAGE> 2
NOW THEREFORE this Agreement witnesses that in
consideration of the payments and mutual covenants herein
and other good and valuable consideration (the receipt of
which is hereby acknowledged by the parties hereto), the
parties agree as follows:
ARTICLE I - DEFINITIONS
1.01 In this Agreement, the following terms shall have
the following meanings unless the context implies otherwise:
"Additive" means the cementitious additive which has been
developed by and is manufactured and distributed by
Stratford, sometimes under the trade mark "Novacrete", and
which is combined with one or more aggregates to manufacture
Pre-Mix, and any and all new developments, innovations,
modifications or improvements to such additive as conceived,
developed or implemented by Stratford;
"Agreement" means this supply and distribution agreement, as
may be amended from time to time;
"Exclusive Territory" means the United States of America, ts
territories, protectorites and possessions;
"Globesat" means Globesat Infrastructure Technologies Corp.,
its parent, subsidiaries and affiliates, or any other form
of entity or organization, of which Globesat may or may not
be a party, partner or shareholder, as the case may be, and
its designees;
"person" means and includes any individual, corporation,
partnership, firm, joint venture, syndicate, association,
trust, government, governmental agency or board or
commission or authority;
"Pre-Mix" means any ready-to-use mortar mixture which
employs the Additive;
"Stratford" means Stratford, its subsidiaries and
affiliates, including Supercrete;
"Technical Assistance" has the meaning ascribed thereto in
Section 5.01 hereof; and
"Technology" includes, without limitation, any one or more
of the knowledge, information, know-how, manufacturing
equipment, plant, set-up, design and technology to combine
Additive and any one or more aggregates for the purpose of
manufacturing Pre-Mix or any other enhanced concrete product
whatsoever, and the knowledge, information and know-how to
locate suitable sources of local aggregates to combine with
<PAGE> 3
Additive to manufacture Pre-Mix or any other enhanced
concrete product whatsoever, in any particular country, part
of a country, territory or part of a territory.
ARTICLE II - APPOINTMENT OF EXCLUSIVE DISTRIBUTOR
2.01 During the term of this Agreement, and otherwise
subject to the terms and conditions contained herein,
Stratford hereby appoints Globesat as its sole and exclusive
distributor of the Additive and Pre-Mix in the Exclusive
Territory. Globesat hereby accepts such appointment.
2.02 Without limiting the generality of the appointment
referred to in Section 2.01 hereof, Globesat shall have the
right to market, sell and distribute the Additive and
pre-Mix to any person, or to appoint sub-distributors, on
either an exclusive or non-exclusive basis, in the Exclusive
Territory.
2.03 During the term of this Agreement, Stratford
covenants and agrees that it shall not market, sell or
distribute the Additive or Pre-Mix to any person (other than
Globesat) within any of the Exclusive Territory, nor shall
it market, sell or distribute the Additive or Pre-Mix to any
person (other than Globesat) who does or who intends to
market, sell or distribute the Additive or Pre-Mix within
the Exclusive Territory.
2.04 Stratford shall not knowingly market, sell or
distribute the Additive or Pre-Mix to any person outside of
the Exclusive Territory for import into the Exclusive
Territory. If Stratford learns that any of its distributors
or customers (other than Globesat) are exporting such
products into the Exclusive Territory, it will take such
steps, to the extent permitted by applicable laws, to ensure
that such distributor or customer ceases to export such
products into the Exclusive Territory.
ARTICLE III - SUPPLY OF ADDITIVE AND PRE-MIX
3.01 Stratford covenants and agrees that it shall at
all times, and within a commercially reasonable time, make
available to Globesat sufficient supply of Additive and
Pre-Mix that may be required by Globesat, from time to time,
to satisfy all of Globesat's demand, from time to time.
3.02 Stratford agrees to use its best efforts to meet
the delivery dates specified in all purchase orders for
Additive and/or Pre-Mix placed by Globesat with Stratford.
Stratford shall promptly notify Globesat of any delay or
anticipated delay in meeting such delivery date and shall
notify Globesat of the date on which it believes delivery
<PAGE> 4
will be made. Title to the product which is the subject of
a purchase order shall pass upon shipment from Stratford's
North American manufacturing facilities.
3.03 (a) Commencing from the date of this Agreement until
the expiry of the second anniversary thereof, unless the
parties otherwise agree in writing, the purchase price
of Additive from Stratford by Globesat shall be four
dollars ($4.00) per pound, subject to any applicable
volume discounts which may be provided by Stratford.
(b) Upon the expiry of the second anniversary
following the date of this Agreement, and upon completion of
each full year thereafter, the purchase price at which
Stratford sells Additive to Globesat hereunder may be
increased by Stratford, upon a minimum of ninety (90)days
advance notice in writing prior to such date, by an amount
equal to the increase in Stratford's costs, acting
reasonably. Stratford agrees to provide Globesat with such
supporting documentation as may be required to satisfy
Globesat of the amount of any increase in Stratford's costs.
(c) During the term of this Agreement and any renewals
hereof, the purchase price of Pre-Mix from Stratford
by Globesat shall be based upon the prevailing
wholesale prices, having regard to the quantity ordered, the
size of the bag of Pre-Mix, and the type and specifications
of any particular Pre-Mix, subject to any applicable volume
discounts which may be provided by Stratford.
3.04 Globesat acknowledges and agrees that the purchase
prices for Additive and Pre-Mix referred to above are
exclusive of any applicable taxes, duties and levies
whatsoever which may be imposed on the purchaser or importer
of same in any applicable jurisdiction, and exclusive of any
applicable shipping, handling or cartage charges. Unless
otherwise agreed by the parties in writing, the above-noted
prices are deemed to be F.O.B Stratford's North American
manufacturing facilities.
3.05 During the term of this Agreement and any renewals
hereof, Stratford covenants and agrees that, subject to
volume discounts which are also afforded to Globesat, it
shall not sell Additive or Pre-Mix to person (other than
Globesat), anywhere in the world, for an amount less than
the amount at which it sells Additive or Pre-Mix to Globesat
hereunder.
3.06 Globesat shall pay all amounts owing to Stratford
for any Additive and Pre-Mix purchase orders by way of an
irrevocable letter of credit. The terms of payment may be
changed or modified by the parties upon mutual agreement at
<PAGE> 5
any time.
3.07 Provided that the Technology is applied by
Globesat in a substantially correct manner (i.e., for
greater certainty, the Additive is formulated correctly),
Stratford warrants that all Additive supplied to Globesat
shall be free from defects of workmanship and shall be fit
for the purpose of blending to manufacture a superior
quality mortar with pre-determined performance
specifications. Stratford shall replace, at its sole cost
and expense (including shipping and handling expenses), any
Additive which is not fit for such purpose or which is
defective or faulty so as to be unsaleable and which
Globesat returns to Stratford. Stratford warrants that all
Pre-Mix supplied to Globesat shall be free from defects of
workmanship. Stratford shall replace, at its sole cost and
expense (including shipping and handling expenses), any
Pre-Mix which is defective or faulty so as to be unsaleable
and which Globesat returns to Stratford.
3.08 The warranties applicable to each of the Additive
and Pre-Mix sold to Globesat under this Agreement shall
conform to the separate manufacturing product warranties
then in effect with respect to such products and Globesat
agrees to inform its customers and distributors of such
warranties and any changes thereto that Stratford supplies
to Globesat from time to time.
3.09 For greater certainty hereunder, the parties agree
that the price at which Globesat sells Additive and/or
Pre-Mix to any person shall be at Globesat's sole and
absolute discretion.
ARTICLE IV - PERFORMANCE AND PRODUCT DISTRIBUTION
4.01 During the term of this Agreement, Globesat
covenants and agrees that it shall use its reasonable best
efforts to market and promote the Additive, Pre-Mix, and the
goodwill associated therewith.
4.02 During each year of the term of this Agreement and
any renewals hereof, Stratford covenants that it shall
contribute the amount of ten thousand dollars ($10,000)
annually towards the cost of any advertising and marketing
materials to be used by Globesat in conjunction with
Globesat's marketing of the Additive and Pre-Mix, provided
that Stratford shall have the right to review and revise any
such materials to ensure that same accurately informs as to
the specifications, standards, and performance of the
Additive and any Pre-Mix.
<PAGE> 6
4.03 Subject to Section 4.06 hereof, Globesat shall be
required to meet the following minimum purchase quotas
during the
initial term of this Agreement derived from sales in the
Exclusive Territory:
(a) from the date of this Agreement until November 30,
1997, Globesat shall be required to purchase a minimum
of one million dollars ($1,000,000) of Additive;
(b) during the second year of the term (i.e., until
November 30, 1998), Globesat shall be required to
purchase a minimum of one million dollars ($1,000,000)
of Additive;
(c) during the third year of the term (i.e., until
November 30, 1999), Globesat
shall be required to purchase a minimum of one million
dollars ($1,000,000) of Additive;
(d) during the fourth year of the term (i.e., until
November 30, 2000), Globesat shall be required to
purchase a minimum of one million dollars ($1,000,000)
of Additive;
(e) during the fifth year of the term (i.e., until
November 30, 2001), Globesat shall be required to
purchase a minimum of one million dollars ($1,000,000)
of Additive; provided that any annual purchase
requirement may be reduced to the extent that any
preceding annual purchase requirement has been
exceeded, such that the purchase requirements for any
year does not exceed the amount stated above in each
subparagraph.
4.04 Globesat may, at its option, pay to Stratford the
difference between the amount of purchases in any given year
and the minimum annual purchase requirement for such year.
4.05 Should Globesat fail to meet any minimum annual
purchase requirement as aforesaid, the rights granted to
Globesat in Article II hereunder shall thereupon become
non-exclusive rights in respect of the Exclusive Territory
upon thirty (30) days' written notice by Stratford to
Globesat specifying same. Notwithstanding the provisions of
Section 9.04 hereof, this section is the sole remedy of
Stratford in respect of the failure of Globesat to meet any
minimum annual purchase requirements as aforesaid.
4.06 In the event that Stratford is unable to supply
Globesat with sufficient Additive or Pre-Mix to meet any of
its
<PAGE> 7
minimum annual purchase requirements in any annual period,
then the minimum annual purchase requirement for such period
shall be reduced to an amount equal to the quantity of
product supplied by Stratford in that period.
ARTICLE V - TECHNICAL ASSISTANCE AND TRAINING
5.01 Stratford covenants and agrees that, subject to
the confidentiality provisions contained herein, upon the
request of Globesat, it shall promptly provide Globesat and
any person designated by Globesat with such technical
assistance as will enable such person to manufacture Pre-Mix
of saleable quality ("Technical Assistance"), including
without limitation, assistance in sourcing local aggregates,
assistance in utilizing and/or modifying Globesat's existing
mortar blending equipment, and assistance in establishing
the proper combination of Additive and local aggregates, all
of which aim for and will result in Globesat being able to
properly and efficiently blend the Additive with such local
aggregates to manufacture Pre-Mix meeting specified saleable
requirements.
5.02 Stratford covenants and agrees that in respect of
each distributor arrangement or blending operation
established by Globesat in respect of the Additive, it shall
provide to Globesat all of the necessary blending equipment
required for the distributor to commence blending
operations, to a maximum of one hundred thousand dollars
($100,000) of blending equipment, provided that the
distributor or blender, as the case may be, posts a
performance bond, acceptable to Stratford, to ensure the
purchase of a minimum of two hundred and twenty thousand
pounds (220,000 lbs.) of Additive during the first year of
the initial term of any such distributor or blending
agreement.
5.03 In the alternative to the provision of equipment
as provided in Section 5.02 hereof, at the option of
Globesat, Stratford shall provide a product purchase price
credit to Globesat in the amount of one hundred thousand
dollars ($100,000), to be applied against any order of
Additive of equal or greater value.
5.04 Technical Assistance and support shall be provided
by Stratford, its agents, and employees, as requested or
required, provided that Stratford shall be solely
responsible for the costs associated with the provision of
initial Technical Assistance to implement and commence the
manufacturing/blending process, which Technical Assistance
shall be limited to the provision of one qualified Stratford
agent or employee for and during a period of seven (7) days
<PAGE> 8
only, along with all written materials regarding the
manufacture of Pre-Mix then available, and thereafter
Globesat shall be responsible for Stratford's reasonable
costs incurred in providing any additional Technical
Assistance.
5.05 Stratford shall provide initial technical training
to such agents and employees of Globesat that may require
same for the performance of their duties, provided that
Stratford shall be solely responsible for the costs
associated with the provision of initial technical training
to a reasonable number of agents and/or employees, which
technical training shall be limited to the provisions of one
qualified Stratford agent or employee for and during a
period of seven (7) days only, and thereafter Globesat shall
be responsible for Stratford's reasonable costs incurred in
providing any additional technical training or retraining.
ARTICLE VI - COVENANTS OF STRATFORD
6.01 Stratford warrants, covenants and agrees that it
has the right to enter into this Agreement and to grant to
Globesat the exclusive distributorship arrangement outlined
herein in the Exclusive Territory and agrees to indemnify
and save harmless Globesat, its officers and employees, in
connection with any claims which might be asserted against
Globesat by others claiming title to the Additive or Pre-Mix
or a prior right granted by Stratford to distribute such
products in the Exclusive Territory. Upon the execution of
this Agreement, Stratford agrees to provide notice to any of
its authorized suppliers and agents of the exclusive
distributorship granted to Globesat hereunder.
6.02 Stratford covenants and agrees that it shall refer
all inquiries regarding the purchase of Additive or Pre-Mix
within any Exclusive Territory to Globesat.
6.03 Stratford covenants and agrees that, upon
execution of this Agreement, it shall fully divulge and
deliver to Globesat any and all information and particulars
with respect to the Technology and the Additive as necessary
or required, and the technical information and processes
related thereto. In the event of any innovation,
modification or improvement to such technical information
and processes, or any new development with respect thereto,
it shall forthwith disclose and provide full particulars to
Globesat for its use and implementation, subject to the
terms and conditions contained herein.
<PAGE> 9
ARTICLE VII - AGENTS
7.01 Globesat shall be permitted to engage and employ
such agents to assist Globesat in carrying out its duties
and responsibilities hereunder, upon such terms and
conditions as Globesat, in its sole and absolute discretion
deems acceptable.
7.02 It is expressly understood and agreed that
Globesat shall be solely responsible for any remuneration or
commissions earned or expenses incurred by any agents and
shall, under no circumstances, be entitled to any
reimbursement of any such expenses whatsoever from
Stratford.
ARTICLE VIII - CONFIDENTIALITY
8.01 Globesat covenants and agrees not to use or
disclose to any third party or use at any time contrary to
the interests of Stratford any trade secrets, confidential
information, knowledge or data relating to the business and
affairs of Stratford, the Technology, or the Additive that
Globesat may have, obtain or acquire as a result of this
Agreement, other than in the performance of its duties and
obligations hereunder, and in connection therewith Globesat
agrees to execute and abide by any confidentiality agreement
that Stratford may from time to time require, acting
reasonably.
8.02 Neither party shall directly or indirectly, at any
time, without the express written consent of the other,
publish, disclose or divulge to any person any trade
secrets, knowledge, data, or confidential information of any
nature relating to the business and the affairs of the other
party, or relating to any of the particulars of the
relationship between Stratford and Globesat created
hereunder, which either may have imparted to the other or
which they may acquire or become aware of during or as a
result of the appointment of Globesat herein.
8.03 Without in any way limiting the generality of the
foregoing, Stratford specifically covenants and agrees that
it shall maintain the confidentiality of the cost to
Globesat of Additive and Pre-Mix from Stratford, and shall
under no circumstances disclose same to any person.
8.04 The provisions of this Article VIII shall survive
the termination or non-renewal of this Agreement.
<PAGE> 10
ARTICLE IX - TERM AND TERMINATION
9.01 This Agreement shall be effective from the date
hereof and shall be for a term of five (5) years from
November 30, 1996 (the "Initial Term"), unless otherwise
terminated as provided hereunder.
9.02 If Globesat gives Stratford ninety (90) days'
written notice prior to the expiry of the Initial Term, at
the option of Globesat, this Agreement shall be renewable
for a further five (5) year period (the "Extended Term")
provided that Globesat has paid to Stratford the amounts set
out in Article V hereof during the Initial Term. The terms
and conditions of this Agreement shall remain in full force
and effect, unamended, during the Extended Term, with the
exception of Section 4.03, which shall provide for minimum
purchase quotas for each of the five years during such term
equal to the mean of total purchases by Globesat of Additive
in years three to five, inclusive, of the Initial Term.
Globesat, shall have the option to renew this Agreement for
an additional five (5) year term thereafter on the same
terms and conditions as under the Extended Term, with the
exception of Section 4.03, which shall provide for minimum
purchase quotas for each of the five years during such term
equal to the mean of total purchases by Globesat of Additive
in years three to five, inclusive, of the Extended Term.
9.03 Either party may terminate this Agreement at any
time without notice, if the other party:
(a) makes an assignment for the benefit of its
creditors;
or
(b) is adjudicated bankrupt or becomes voluntarily or
involuntarily subject to any proceedings for the
benefit of its creditors.
9.04 Either party may terminate this Agreement at any
time, if the other party fails to comply with any material
term or condition of this Agreement or fails to fulfil or
comply with any obligation undertaken by it pursuant to this
Agreement and such default is not cured within thirty (30)
days of written notice given in respect thereof.
<PAGE> 11
ARTICLE X - GENERAL PROVISIONS
10.01 Any notice or other communications (a
"Notice")required or permitted to be given hereunder shall
be in writing and shall be delivered in person, transmitted
by facsimile or sent by registered mail, charges prepaid,
addressed as follows:
(a) if to Supercrete:
5420 North Service Road
5th Floor
Burlington, Ontario L7L 6C7
Attention: Mr. Arthur Smith
Facsimile No.: (905) 319-6414
(b) if to Globesat:
181 Bay Street
Suite 1800
Toronto, Ontario M5J 2T9
Attention: Mr. Lee A. Greenspoon
Facsimile No.: (416) 364-1241
(c) if to Stratford:
5420 North Service Road
5th Floor
Burlington, Ontario L7L 6C7
Attention: Mr. Arthur Smith
Facsimile No.: (905) 319-6414
or at any such other address or addresses as may be given by
any of them to the other in writing from time to time. Such
Notice, if mailed, shall be deemed to have been given on the
second business day (except Saturdays or Sundays) following
such mailing, or if delivered personally or transmitted by
facsimile, shall be deemed to have been given on the day of
delivery or transmission, as the case may be, if a business
day, or if not a business day, on the business day next
following the day of delivery or transmission, as the case
may be; provided that if such Notice shall have been mailed
and if regular mail service shall be interrupted by strike
or other irregularity before the deemed receipt of such
Notice as aforesaid, then such Notice shall not be effective
unless delivered or transmitted by facsimile.
<PAGE> 12
10.02 Any delay or failure of any party hereto to
perform its obligations under this agreement shall be
excused if, and to the extent, that the delay or failure is
caused by an event or occurrence beyond the reasonable
control of the party and without its fault or negligence,
such as, by way of example and not by way of limitation,
acts of God, action by any governmental authority (whether
valid or invalid), fires, floods, wind storms, explosions,
riots, natural disasters, wars, sabotage, labour problems
(including lock-outs, strikes and slow-downs), inability to
obtain power, material, labour, equipment or transportation,
or court injunction or order; provided that written notice
of delay (including the anticipated duration of the delay)
shall be given by the affected party to the other party
within ten (10) days.
10.03 This Agreement is not assignable by Globesat
without the prior written consent of Stratford, which onsent
shall not be unreasonably withheld.
10.04 Unless otherwise indicated herein, all dollar
amounts referred to in this Agreement are in lawful money of
the United States of America.
10.05 This Agreement does not create a partnership
or joint venture between the parties and does not grant any
right to either to assume or create obligations or
responsibilities, express or implied, on behalf of or in the
name of the other party or to otherwise bind the other party
in any manner whatsoever, other than as specifically
provided for hereunder.
10.06 The failure of either party hereto at any
time to require performance by the other party of any
provision hereof shall in no way affect the right of such a
party to require such performance at any time thereafter nor
shall the waiver by either party of a breach of any
provision hereof constitute a waiver of any subsequent
breach of the same or any other provision nor constitute a
waiver of the provision itself.
10.07 In the event that any one or more of the
provisions of this Agreement shall at any time be declared
to be invalid or otherwise rendered unenforceable by
judicial or administrative decision, unless the invalidity
or unenforceability of such provision does substantial
violence to the underlying purport and meaning of the
remainder of this Agreement, it is the intention of the
parties that such invalidity or unenforceability shall not
affect the validity or enforceability of any other
provisions of this Agreement, except those with respect to
<PAGE> 13
which such invalid or unenforceable provisions comprise an
integral part thereof or are otherwise clearly inseparable
therefrom.
10.08 This Agreement supersedes any prior
agreements or understanding, either oral or in writing
between the parties and constitutes the entire Agreement
between the parties relating to the subject matter hereof.
No amendments, variations, or alterations to this Agreement
shall be valid or binding upon the parties hereto unless
made in writing and agreed to by both parties.
10.09 Except as otherwise contemplated herein, no
announcement with respect to this Agreement will be made by
any party hereto without the prior approval of the other
parties hereto. The foregoing will not apply to any
announcement by any party hereto required in order to comply
with laws pertaining to timely disclosure, if applicable,
provided that such party hereto consults with the other
parties hereto before making any such announcement.
10.10 This contract shall be governed by and
construed in accordance with the laws of the Province of
Ontario, and each party hereby irrevocably attorns to the
jurisdiction of the
Courts of Ontario.
10.11 This Agreement shall enure to the benefit of
and shall be binding upon the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.
SUPERCRETE N/A LIMITED
Per: /s/ Arthur Smith, Designated Signing Officer
GLOBESAT INFRASTRUCTURE TECHNOLOGIES CORP.
Per: /s/ Lee A. Greenspoon, President
STRATFORD ACQUISITION CORP.
Per: /s/ Arthur Smith, President
SUPPLY AND DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of the 31st day of July,
1996.
B E T W E E N :
SUPERCRETE N/A LIMITED, a corporation
incorporated pursuant to the laws of the
Turks & Caicos Islands, British West Indies
(hereinafter "Supercrete")
- and -
GLOBESAT INFRASTRUCTURE TECHNOLOGIES CORP., a
corporation incorporated pursuant to the laws
of State of Utah, U.S.A.
(hereinafter "Globesat")
- and -
STRATFORD ACQUISITION CORP., a corporation
incorporated pursuant to the laws of the
State of Minnesota, U.S.A.
(hereinafter "Stratford")
WHEREAS Supercrete is the owner of the Technology
(as hereinafter defined), and in conjunction therewith owns
the exclusive rights to manufacture, market, sell and
distribute the Additive (as hereinafter defined) throughout
certain countries of the world;
AND WHEREAS Supercrete is a wholly-owned
subsidiary of Stratford;
AND WHEREAS Globesat wishes to obtain from
Supercrete, and Supercrete has agreed to grant, the
exclusive rights to market, sell and distribute the Additive
in the Exclusive Territories (as hereinafter defined);
AND WHEREAS Stratford has agreed to provide
Globesat with Technical Assistance (as hereinafter defined)
in connection with the foregoing, all upon the terms and
conditions contained herein;
NOW THEREFORE this Agreement witnesses that in
consideration of the payments and mutual covenants herein
and other good and valuable consideration (the receipt of
which is hereby acknowledged by the parties hereto), the
parties agree as follows:
<PAGE> 2
ARTICLE I - DEFINITIONS
1.01 In this Agreement, the following terms shall have
the following meanings unless the context implies otherwise:
"Additive" means the cementitious additive which has been
developed by and is manufactured and distributed by
Stratford, sometimes under the trade mark "Novacrete", and
which is combined with one or more aggregates to manufacture
Pre-Mix, and any and all new developments, innovations,
modifications or improvements to such additive as conceived,
developed or implemented by Stratford;
"Agreement" means this supply and distribution agreement, as
may be amended from time to time;
"Exclusive Territories" means those countries as set out in
Schedule "A" attached hereto to this Agreement;
"Globesat" means Globesat Infrastructure Technologies Corp.,
its parent, subsidiaries and affiliates, or any other form
of entity or organization, of which Globesat may or may not
be a party, partner or shareholder, as the case may be, and
its designees;
"person" means and includes any individual, corporation,
partnership, firm, joint venture, syndicate, association,
trust, government, governmental agency or board or
commission or authority;
"Pre-Mix" means any ready-to-use mortar mixture which
employs the Additive;
"Stratford" means Stratford, its subsidiaries and
affiliates, including Supercrete;
"Technical Assistance" has the meaning ascribed thereto in
Section 7.01 hereof; and
"Technology" includes, without limitation, any one or more
of the knowledge, information, know-how, manufacturing
equipment, plant, set-up, design and technology to combine
Additive and any one or more aggregates for the purpose of
manufacturing Pre-Mix or any other enhanced concrete product
whatsoever, and the knowledge, information and know-how to
locate suitable sources of local aggregates to combine with
Additive to manufacture Pre-Mix or any other enhanced
concrete product whatsoever, in any particular country, part
of a country, territory or part of a territory.
<PAGE> 3
ARTICLE II - APPOINTMENT OF EXCLUSIVE DISTRIBUTOR
2.01 During the term of this Agreement, and otherwise
subject to the terms and conditions contained herein,
Stratford hereby appoints Globesat as its sole and exclusive
distributor of the Additive and Pre-Mix in the Exclusive
Territories. Globesat hereby accepts such appointment.
2.02 Without limiting the generality of the appointment
referred to in Section 2.01 hereof, Globesat shall have the
right to market, sell and distribute the Additive and
Pre-Mix to any person, or to appoint sub-distributors, on
either an exclusive or non-exclusive basis, in the Exclusive
Territories.
2.03 During the term of this Agreement, Stratford
covenants and agrees that it shall not market, sell or
distribute the Additive or Pre-Mix to any person (other than
Globesat) within any of the Exclusive Territories, nor shall
it market, sell or distribute the Additive or Pre-Mix to any
person (other than Globesat) who does or who intends to
market, sell or distribute
the Additive or Pre-Mix within the Exclusive Territories.
2.04 Stratford shall not knowingly market, sell or
distribute the Additive or Pre-Mix to any person outside of
the Exclusive Territories for import into the Exclusive
Territories. If Stratford learns that any of its
distributors or customers (other than Globesat) are
exporting such products into the Exclusive Territories, it
will take such steps, to the extent
permitted by applicable laws, to ensure that such
distributor or customer ceases to export such products into
the Exclusive Territories.
ARTICLE III - APPOINTMENT OF NON-EXCLUSIVE DISTRIBUTOR AND
RIGHT OF FIRST REFUSAL
3.01 During the term of this Agreement, and otherwise
subject to the terms and conditions contained herein,
Stratford hereby appoints Globesat as an authorized
distributor in respect of the Additive, with the right to
market, sell and distribute the Additive anywhere in the
world, except for Canada, the United States of America, the
Philippines, Greece and Macedonia. Globesat hereby accepts
such appointment.
3.02 During the term of this Agreement, if Stratford
agrees that upon notification in writing provided to
Stratford that Globesat has entered into a binding letter of
intent with a potential distributor or blender in respect of
the Additive, a copy of which Globesat must provide to
<PAGE> 4
Stratford, Stratford shall provide notification to its other
authorized suppliers that the proposed exclusive territory
named in such letter of intent proposed to be provided to
such distributor or blender has been claimed by Globesat.
3.03 Globesat shall have two (2)months, or such further
amount of time as Stratford and Globesat may mutually
agree, in which to formalize a distributor or blending
agreement with the potential distributor or blender, failing
which the proposed exclusive territory shall be available to
be claimed by any other authorized supplier of Stratford in
the same manner that Globesat was able to claim such
proposed exclusive territory.
ARTICLE IV - SUPPLY OF ADDITIVE AND PRE-MIX
4.01 Stratford covenants and agrees that it shall at
all times, and within a commercially reasonable time, make
available to Globesat sufficient supply of Additive and
Pre-Mix that may be required by Globesat, from time to time,
to satisfy all of Globesat's demand, from time to time.
4.02 Stratford agrees to use its best efforts to meet
the delivery dates specified in all purchase orders for
Additive and/or Pre-Mix placed by Globesat with Stratford.
Stratford shall promptly notify Globesat of any delay or
anticipated delay in meeting such delivery date and shall
notify Globesat of the date on which it believes delivery
will be made. Title to the product which is the subject of
a purchase order shall pass upon shipment from Stratford's
North American manufacturing
facilities.
4.03 (a) Commencing from the date of this Agreement until
the expiry of the second anniversary thereof,
unless the parties otherwise agree in writing, the purchase
price of Additive from Stratford by Globesat shall be four
dollars ($4.00) per pound, subject to any applicable volume
discounts which may be provided by Stratford.
(b) Upon the expiry of the second anniversary
following the date of this Agreement, and upon completion of
each full year thereafter, the purchase price at which
Stratford sells Additive to Globesat hereunder may be
increased by Stratford, upon a minimum of ninety (90)days
advance notice in writing prior to such date, by an amount
equal to the increase in Stratford's cost, acting
reasonably. Stratford agrees to provide with such
supporting documentation as may be to satisfy Globesat of
the amount of any
increase in Stratford's cost.
<PAGE> 5
(c) During the term of this Agreement and any
renewals, the purchase of Pre-Mix from Stratford by Globesat
shall be based upon the prevailing wholesale prices, having
regard to the quantity ordered, the size of the bag of
Pre-Mix, and the type and specifications of any particular
Pre-Mix, subject to any applicable volume discounts which
may be provided by Stratford.
4.04 Globesat acknowledges and agrees that the purchase
prices for Additive and Pre-Mix referred to above are
exclusive of any applicable taxes, duties and levies
whatsoever which may be imposed on the purchaser or importer
of same in any applicable jurisdiction, and exclusive of any
applicable shipping, handling or cartage charges. Unless
otherwise agreed by the parties in writing, the above-noted
prices are deemed to be F.O.B Stratford's North American or
Greek manufacturing facilities, as the case may be.
4.05 During the term of this Agreement and any renewals
hereof, Stratford covenants and agrees that, subject to
volume discounts which are also afforded to Globesat, it
shall not sell Additive or Pre-Mix to any other person,
anywhere in the world, for an amount less than the amount at
which it sells Additive or Pre-Mix to Globesat hereunder.
4.06 Globesat shall pay all amounts owing to Stratford
for any Additive and Pre-Mix purchase orders by way of an
irrevocable letter of credit. The terms of payment may be
changed or modified by the parties upon mutual agreement at
any time.
4.07 Provided that the Technology is applied by
Globesat in a substantially correct manner (i.e., for grater
certainty, the additive is formulated correctly), Stratford
warrants that all Additive supplied to Globesat shall be
free from defects of workmanship and shall be fit for the
purpose of blending to manufacture a superior quality mortar
with pre-determined performance specifications. Stratford
shall replace, at its sole cost and expense (including
shipping and handling expenses), any Additive which is not
fit for such purpose or which is defective or faulty so as
to be unsaleable and which Globesat returns to Stratford.
Stratford warrants that all Pre-Mix supplied to Globesat
shall be free from defects of workmanship. Stratford shall
replace, at its sole cost and expense (including shipping
and handling expenses), any Pre-Mix which is defective or
faulty so as to be unsaleable and which Globesat returns to
Stratford.
<PAGE> 6
4.08 The warranties applicable to each of the Additive
and Pre-Mix sold to Globesat under this Agreement shall
conform to the separate manufacturing product warranties
then in effect with respect to such products and Globesat
agrees to inform its customers and distributors of such
warranties and any changes thereto that Stratford supplies
to Globesat from time to time.
4.09 For greater certainty hereunder, the parties agree
that the price at which Globesat sells Additive and/or
Pre-Mix to any person shall be at Globesat's sole and
absolute discretion.
ARTICLE V - PERFORMANCE AND PRODUCT DISTRIBUTION
5.01 During the term of this Agreement, Globesat
covenants and agrees that it shall use its reasonable best
efforts to market and promote the Additive, Pre-Mix, and the
goodwill associated therewith.
5.02 During each year of the term of this Agreement and
any renewals hereof, Stratford covenants that it shall
contribute the amount of ten thousand dollars ($10,000)
annually towards the cost of any advertising and marketing
materials to be used by Globesat in conjunction with
Globesat's marketing of the Additive and Pre-Mix, provided
that Stratford shall have the right to review and revise any
such materials to ensure that same
accurately informs as to the specifications, standards, and
performance of the Additive and any Pre-Mix.
5.03 Subject to Section 5.06 hereof, Globesat shall be
required to meet the following minimum purchase quotas
during the initial term of this Agreement:
(a) during the first two years of the term, Globesat
shall be required to purchase a minimum of one
million Dollars ($1,000,000) of Additive;
(b) during the third year of the term, Globesat shall
be required to purchase a minimum of one million
dollars ($1,000,000) of Additive;
(c) during the fourth year of the term, Globesat shall
be required to purchase a minimum of one million
dollars ($1,000,000) of Additive;
<PAGE> 7
(d) during the fifth year of the term, Globesat shall
be required to purchase a minimum of one million
dollars ($1,000,000) of Additive;
provided that any annual purchase requirement may be reduced
to the extent that any preceding annual purchase requirement
has been exceeded, such that the purchase requirements for
any year does not exceed the amount stated above in each
subparagraph.
5.04 Globesat may, at its option, pay to Stratford the
difference between the amount of purchases in any given year
and the minimum annual purchase requirement for such year.
5.05 Should Globesat fail to meet any minimum annual
purchase requirement as aforesaid, the rights granted to
Globesat in Article II hereunder shall thereupon become
non-exclusive rights in respect of the Exclusive Territories
upon thirty (30)day's written notice by Stratford to
Globesat specifying same. Notwithstanding the provisions of
Section 11.04 hereof, this section is the sole remedy of
Stratford in respect of the failure of Globesat to meet any
minimum annual purchase requirements as aforesaid.
5.06 In the event that Stratford is unable to supply
Globesat with sufficient Additive or Pre-Mix to meet any of
its minimum annual purchase requirements in any annual
period, then the minimum annual purchase requirement for
such period shall be reduced to an amount equal to the
quantity of product supplied by Stratford in that period.
ARTICLE VI - ISSUANCE OF GLOBESAT SHARES
6.01 In consideration of the appointments of Globesat
hereunder, Globesat Holding Corp. shall cause to be issued
three hundred thousand (300,000) "restricted" shares in the
common stock of Globesat Holding Corp. to Stratford. Such
shares shall be subject to the provisions of Rule 144 of the
United States Securities Act of 1933 and a hold period of
two (2) years from the date hereof. Such shares shall be
issued by Globesat Holding Corp. no later than August 13,
1996, otherwise this Agreement
shall become null and void.
ARTICLE VII - TECHNICAL ASSISTANCE AND TRAINING
7.01 Stratford covenants and agrees that, subject to
the confidentiality provisions contained herein, upon the
request of Globesat, it shall promptly provide Globesat and
any person designated by Globesat with such technical
<PAGE> 8
assistance as will enable such person to manufacture Pre-Mix
of saleable quality ("Technical Assistance"), including
without limitation, assistance in sourcing local aggregates,
assistance in utilizing and/or modifying Globesat's existing
mortar blending equipment,
and assistance in establishing the proper combination of
Additive and local aggregates, all of which aim for and will
result in Globesat being able to properly and efficiently
blend the Additive with such local aggregates to manufacture
Pre-Mix meeting specified saleable requirements.
7.02 Stratford covenants and agrees that in respect of
each distributor arrangement, blending operation established
by Globesat in respect of the Additive, it shall provide to
Globesat all of the necessary blending equipment required
for the distributor to commence blending operations, to a
maximum of one hundred thousand dollars ($100,000) of
blending equipment, provided that the distributor or
blender, as the case may be, posts a performance bond,
acceptable to Stratford, to ensure the
purchase of a minimum of two hundred and twenty thousand
pounds (220,000 lbs.) of Additive during the first year of
the initial term of any such distributor or blending
agreement.
7.03 In the alternative to the provision of equipment
as provided in Section 7.02 hereof, at the option of
Globesat, Stratford shall provide a product purchase price
credit to Globesat in the amount of one hundred thousand
dollars ($100,000), to be applied against any order of
Additive or Pre-Mix of equal or greater value.
7.04 Technical Assistance and support shall be provided
by Stratford, its agents, and employees, as requested or
required, provided that Stratford shall be solely
responsible for the costs associated with the provision of
initial Technical Assistance to implement and commence the
manufacturing/blending process, which Technical Assistance
shall be limited to the provision of one qualified Stratford
agent or employee for and during a period of seven (7) days
only, along with all written materials regarding the
manufacture of Pre-Mix then available, and thereafter
Globesat shall be responsible for Stratford's reasonable
costs incurred in providing any additional Technical
Assistance.
7.05 Stratford shall provide initial technical training
to such agents and employees of Globesat that may require
same for the performance of their duties, provided that
Stratford shall be solely responsible for the costs
associated with the provision of initial technical training
to a reasonable number of agents and/or employees, which
<PAGE> 9
technical training shall be limited to the provisions of one
qualified Stratford agent or employee for and during a
period of seven (7) days only, and thereafter
Globesat shall be responsible for Stratford's reasonable
costs incurred in providing any additional technical
training or retraining.
ARTICLE VIII - COVENANTS OF STRATFORD
8.01 Stratford warrants, covenants and agrees that it
has the right to enter into this Agreement and to grant to
Globesat the exclusive distributorship arrangements outlined
herein in the Exclusive Territories and agrees to indemnify
and save harmless Globesat, its officers and employees, in
connection with any claims which might be asserted against
Globesat by others claiming title to the Additive or Pre-Mix
or a prior right granted by Stratford to distribute such
products in the Exclusive
Territories. Upon the execution of this Agreement,
Stratford agrees to provide notice to any of its authorized
suppliers and agents of the exclusive distributorship
granted to Globesat hereunder.
8.02 Stratford covenants and agrees that it shall refer
all inquiries regarding the purchase of Additive or Pre-Mix
within any such Exclusive Territories to Globesat.
8.03 Stratford covenants and agrees that, upon
execution of this Agreement, it shall fully divulge and
deliver to Globesat any and all information and particulars
with respect to the Technology and the Additive as necessary
or required, and the technical information and processes
related thereto. In the event of any innovation,
modification or improvement to such technical information
and processes, or any new development with respect thereto,
it shall forthwith disclose and provide full particulars to
Globesat for its use and implementation, subject
to the terms and conditions contained herein.
ARTICLE IX - AGENTS
9.01 Globesat shall be permitted to engage and employ
such agents to assist Globesat in carrying out its duties
and responsibilities hereunder, upon such terms and
conditions as Globesat, in its sole and absolute discretion
deems acceptable.
9.02 It is expressly understood and agreed that
Globesat shall be solely responsible for any remuneration or
commissions earned or expenses incurred by any agents and
shall, under no circumstances, be entitled to any
reimbursement of any such expenses whatsoever from
<PAGE> 10
Stratford.
ARTICLE X - CONFIDENTIALITY
10.01 Globesat covenants and agrees not to use or
disclose to any third party or use at any time contrary to
the interests of Stratford any trade secrets, confidential
information, knowledge or data relating to the business and
affairs of Stratford, the Technology, or the Additive that
Globesat may have, obtain or acquire as a result of this
Agreement, other than in the performance of its duties and
obligations hereunder, and in
connection therewith Globesat agrees to execute and abide by
any confidentiality agreement that Stratford may from time
to time require, acting reasonably.
10.02 Neither party shall directly or indirectly, at any
time, without the express written consent of the other,
publish, disclose or divulge to any person any trade
secrets, knowledge, data, or confidential information of any
nature relating to the business and the affairs of the other
party, or relating to any of the particulars of the
relationship between Stratford and Globesat created
hereunder, which either may have imparted to the other or
which they may acquire or become aware of during or as a
result of the appointment of Globesat herein.
10.03 Without in any way limiting the generality of the
foregoing, Stratford specifically covenants and agrees that
it shall maintain the confidentiality of the cost to
Globesat of Additive and Pre-Mix from Stratford, and shall
under no circumstances disclose same to any person.
10.04 The provisions of this Article X shall survive the
termination or non-renewal of this Agreement.
ARTICLE XI - TERM AND TERMINATION
11.01 This Agreement shall be for a term of five (5)
years (the "Initial Term"), unless otherwise terminated as
provided hereunder.
11.02 If Globesat gives Stratford ninety (90) days'
written notice prior to the expiry of the Initial Term, at
the option of Globesat, this Agreement shall be renewable
for a further five (5) year period (the "Extended Term")
provided that Globesat has paid to Stratford the amounts set
out in Article V hereof during the Initial Term. The terms
and conditions of this Agreement shall remain in full force
and effect, unamended, during the Extended Term, with the
exception of Section 5.03, which shall provide for minimum
purchase quotas for each of the five years
<PAGE> 11
during such term equal to the mean of total purchases by
Globesat of Additive in years three to five, inclusive, of
the Initial Term. Globesat, shall have the option to renew
this Agreement for an additional five (5) year term
thereafter on the same terms and conditions as under the
Extended Term, with the exception of Section 5.03, which
shall provide for minimum purchase quotas for each of the
five years during such term equal to the mean of total
purchases by Globesat of Additive in years three to five,
inclusive, of the Extended Term.
11.03 Either party may terminate this Agreement at any
time without notice, if the other party:
(a) makes an assignment for the benefit of its
creditors;
or
(b) is adjudicated bankrupt or becomes voluntarily or
involuntarily subject to any proceedings for the
benefit of its creditors.
11.04 Either party may terminate this Agreement at any
time, if the other party fails to comply with any material
term or condition of this Agreement or fails to fulfil or
comply with any obligation undertaken by it pursuant to this
Agreement and such default is not cured within thirty (30)
days of written notice given in respect thereof.
ARTICLE XII - GENERAL PROVISIONS
12.01 Any notice or other communications (a "Notice")
required or permitted to be given hereunder shall be in
writing and shall be delivered in person, transmitted by
facsimile or sent by registered mail, charges prepaid,
addressed as follows:
(a) if to Supercrete:
5420 North Service Road
5th Floor
Burlington, Ontario L7L 6C7
Attention: Mr. Arthur Smith
Facsimile No: (905) 319-6414
(b) if to Globesat:
181 Bay Street, Suite 1800
Toronto, Ontario
M5J 2T9
<PAGE> 12
Attention: Mr. Lee A. Greenspoon
Facsimile No.: (416) 364-1241
(c) if to Stratford:
5420 North Service Road
5th Floor
Burlington, Ontario
L7L 6C7
Attention: Mr. Arthur Smith
Facsimile No.: (905) 631-7907
or at any such other address or addresses as may be given by
any of them to the other in writing from time to time. Such
Notice, if mailed, shall be deemed to have been given on the
second business day (except Saturdays or Sundays) following
such mailing, or if delivered personally or transmitted by
facsimile, shall be deemed to have been given on the day of
delivery or
transmission, as the case may be, if a business day, or if
not a business day, on the business day next following the
day of delivery or transmission, as the case may be;
provided that if such Notice shall have been mailed and if
regular mail service shall be interrupted by strike or other
irregularity before the deemed receipt of such Notice as
aforesaid, then such Notice shall not be effective unless
delivered or transmitted by
facsimile.
12.02 Any delay or failure of any party hereto to
perform its obligations under this agreement shall be
excused if, and to the extent, that the delay or failure is
caused by an event or occurrence beyond the reasonable
control of the party and without its fault or negligence,
such as, by way of example and not by way of limitation,
acts of God, action by any governmental authority (whether
valid or invalid), fires, floods, wind storms, explosions,
riots, natural disasters, wars, sabotage, labour
problems (including lock-outs, strikes and slow-downs),
inability
<PAGE> 13
to obtain power, material, labour, equipment or
transportation, or court injunction or order; provided that
written notice of delay (including the anticipated duration
of the delay) shall be given by the affected party to the
other party within ten (10) days.
12.03 This Agreement is not assignable by Globesat
without the prior written consent of Stratford, which
consent shall not be unreasonably withheld.
12.04 Unless otherwise indicated herein, all dollar
amounts referred to in this Agreement are in lawful money of
the United States of America.
12.05 This Agreement does not create a partnership or
joint venture between the parties and does not grant any
right to either to assume or create obligations or
responsibilities, express or implied, on behalf of or in the
name of the other party or to otherwise bind the other party
in any manner whatsoever, other than as specifically
provided for hereunder.
12.06 The failure of either party hereto at any time to
require performance by the other party of any provision
hereof shall in no way affect the right of such a party to
require such performance at any time thereafter nor shall
the waiver by either party of a breach of any provision
hereof constitute a waiver of any subsequent breach of the
same or any other provision nor constitute a waiver of the
provision itself.
12.07 In the event that any one or more of the
provisions of this Agreement shall at any time be declared
to be invalid or otherwise rendered unenforceable by
judicial or administrative decision, unless the invalidity
or unenforceability of such provision does substantial
violence to the underlying purport and meaning of the
remainder of this Agreement, it is the intention of the
parties that such invalidity or unenforceability shall not
affect the validity or enforceability of any other
provisions of
this Agreement, except those with respect to which such
invalid or unenforceable provisions comprise an integral
part thereof or are otherwise clearly inseparable therefrom.
12.08 This Agreement supersedes any prior agreements or
understanding, either oral or in writing between the parties
and constitutes the entire Agreement between the parties
relating to the subject matter hereof. No amendments,
variations, or alterations to this Agreement shall be valid
or binding upon the parties hereto unless made in writing
and agreed to by both parties.
<PAGE> 14
12.09 Except as otherwise contemplated herein, no
announcement with respect to this Agreement will be made by
any party hereto without the prior approval of the other
parties hereto. The foregoing will not apply to any
announcement by any party hereto required in order to comply
with laws pertaining to timely disclosure, if applicable,
provided that such party hereto consults with the other
parties hereto before making any such
announcement.
12.10 This contract shall be governed by and construed
in accordance with the laws of the Province of Ontario, and
each party hereby irrevocably attorns to the jurisdiction of
the Courts of Ontario.
12.11 This Agreement shall enure to the benefit of and
shall be binding upon the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have
executed
this Agreement as of the date first above written.
SUPERCRETE N/A LIMITED
Per: /s/ Arthur Smith, Designated Signing Officer
GLOBESAT INFRASTRUCTURE TECHNOLOGIES CORP.
Per: /s/ Lee A. Greenspoon, President
STRATFORD ACQUISITION CORP.
Per: /s/ Arthur Smith, President
<PAGE> 15
Schedule "A" to the Supply and Distribution Agreement
made as of July 31st, 1996
between Supercrete N/A Limited,
Globesat Infrastructure Technologies Corp.
and Stratford Acquisition Corp.
EXCLUSIVE TERRITORIES
1. Argentina
2. Chile
3. Mexico
<PAGE> 1
CONSULTING AGREEMENT
THIS AGREEMENT is dated as of the 19th day of February, 1996
B E T W E E N :
GLOBESAT HOLDING CORP., a corporation incorporated
under the laws of the State of Utah
(hereinafter referred to as the "Corporation")
- and -
HERB ADAMS, an individual residing in the Province
of Ontario
(hereinafter referred to as the "Consultant")
WHEREAS the Corporation wishes to retain the service of the
Consultant as a consultant of the Corporation, and the Consultant
desires to serve as consultant for the Corporation;
AND WHEREAS the Corporation has entered into the Joint
Venture Agreement (as defined below);
AND WHEREAS the parties hereto wish to set out the terms and
conditions of the Consultant's tenure with the Corporation;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the premises and of the respective covenants and agreements
herein contained and for other good and valuable consideration
(the receipt and sufficiency of which is hereby acknowledged), it
is hereby agreed by and between the parties hereto as follows:
Consulting Arrangement
1. The Consultant shall be engaged as consultant by the
Corporation and shall, to the satisfaction of the Corporation,
faithfully, honestly and diligently perform such duties and
responsibilities and exercise such powers as the Corporation may,
acting reasonably, from time to time decide in connection with
the introduction and facilitation of meetings with key
representatives of Startech Environmental Corporation
("Startech").
<PAGE> 2
2. The Corporation shall engage the Consultant and the
Consultant shall serve the Corporation as consultant upon and
subject to the terms and conditions of this Agreement, commencing
on the date hereof until termination in accordance with the
provisions of this Agreement.
Compensation
3. Upon the execution of a joint venture agreement between the
Corporation, or an affiliate, and Startech, or an affiliate, in
connection with the establishment of a joint venture between the
parties in respect of commercializing certain plasma waste
converter systems developed by Startech which are designed to
convert tires into commodity products, principally comprised of
iron and synthetic gas (the "Joint Venture Agreement"), the
Corporation shall grant to the Consultant options to purchase
50,000 free trading shares of common stock in the capital of the
Corporation pursuant to the Corporation's 1996 Nonqualified Stock
Option Plan (the "GSAT Options"). The exercise price of each
option will be US$0.0001 and will be immediately exercisable upon
their issuance to the Consultant.
Termination of Consulting Arrangement
4. The consulting arrangement with the Consultant may be
terminated by the Corporation at any time without prior notice
for cause. Notwithstanding such termination, the Consultant
shall be entitled to retain the GSAT Options issued hereunder.
5. The term of this consulting agreement shall, unless
terminated earlier in accordance with section 4 or 6 hereof,
automatically end on a date which is one year from the date
hereof.
6. The Consultant may at any time resign upon 30 days' advance
notice to the Corporation of such resignation. Notwithstanding
such resignation, the Consultant shall be entitled to retain the
GSAT Options issued hereunder.
Representations and Warranties of the Consultant
7. The Consultant hereby represents and warrants to the
Corporation (which representations and warranties shall survive
the execution of this Agreement) that:
a. the Consultant has all requisite power and authority to
enter into this Agreement and perform his obligations hereunder;
<PAGE> 3
b. this Agreement has been duly executed and delivered by, and
constitutes a legal, valid, binding and enforceable obligation
of, the Consultant; and
c. the execution and delivery of this Agreement by the
Consultant and the performance and compliance with the terms
hereof will not result in any breach, or be in conflict with, or
constitute a default under, or create a state of facts which
after notice or lapse of time or both, will constitute a default
under, any term or provision of any indenture, contract,
agreement (whether written or oral), instrument or other document
to which the Consultant is a party or to which he is subject, or
any judgment, decree, order, statute, rule or regulation
applicable to it.
Representations and Warranties of the Corporation
8. The Corporation hereby represents and warrants to the
Consultant (which representations and warranties shall survive
the execution of this Agreement) that:
a. the Corporation is duly incorporated and validly subsisting
under the laws of the State of Utah and has all requisite power
and authority to enter into this Agreement and perform its
obligations hereunder;
b. this Agreement has been duly authorized, executed and
delivered by, and constitutes a legal, valid, binding and
enforceable obligation of, the Corporation; and
c. the execution and delivery of this Agreement by the
Corporation and the performance and compliance with the terms
hereof will not result in any breach, or be in conflict with, or
constitute a default under, or create a state of facts which
after notice or lapse of time or both, will constitute a default
under, any term or provision of the Corporation's constating
documents, by-laws or resolutions or any indenture, contract,
agreement (whether written or oral), instrument or other document
to which the Corporation is a party or to which it is subject, or
any judgment, decree, order, statute, rule or regulation
applicable to it.
Confidentiality
9. The Consultant acknowledges that in the course of its
performance of its duties with the Corporation it will be privy
to information confidential and proprietary to the Corporation
and to its clients ("Confidential Information"). Such
<PAGE> 4
Confidential Information includes but is not limited to: secret
business methods and systems of the Corporation; the terms of
contractual relations with clients; subscriber lists;
confidential information of clients; business strategic
development plans; financial information and internal practices
and procedures in respect of the Corporation.
10. The Consultant hereby acknowledges that the disclosure of
the Confidential Information referred to in section 9 herein to
any third party would be harmful to the business interests of the
Corporation. The Consultant therefore agrees and undertakes that
it shall not at any time, either during its tenure hereunder or
thereafter, directly or indirectly, reveal to any third party any
such Confidential Information, directly or indirectly utilize, in
any way, either on its own behalf or on behalf of any third
party, any such Confidential Information except any such
Confidential Information which may hereafter be in the public
domain.
11. Upon termination of its consulting arrangement with the
Corporation, the Consultant shall promptly return to the
Corporation originals or copies of any and all materials,
documents, notes, including, customer lists, records, drawings
and other customer information, all samples, market share
reports, customer contracts, prices and rates, account
management, data processing programs and financial information,
which is in the Consultant's possession or control and relates or
belongs to the Corporation.
Relationship of the Parties
12. This Agreement shall not constitute an employer-employee
relationship. It is the intention of each party that the
Consultant shall be an independent contractor and not an employee
of the Corporation. The Consultant shall not have authority to
act as the agent of the Corporation except when such authority is
specifically delegated to the Consultant by the Corporation.
General Contract Provisions
13. The Consultant covenants and agrees to deliver such
documents, certificates, assurances and other instruments as may
be required to carry out the provisions of this Agreement.
14. This Agreement may not be assigned by either party without
the prior written consent of the other party hereto.
<PAGE> 5
15. This Agreement shall enure to the benefit of and be binding
upon the successors and permitted assigns of the parties hereto.
16. The provisions of this Agreement shall be governed by and
interpreted in accordance with the laws of the Province of
Ontario.
17. This Agreement constitutes the entire agreement between the
parties hereto pertaining to the subject matter hereof. There
are no warranties, representations or agreements between the
parties in connection with such subject matter except as
specifically set forth or referred to in this Agreement. Except
as expressly provided in this Agreement, no amendment, waiver or
termination of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any other
provision of this Agreement shall constitute a waiver of any
other provision nor shall any waiver of any provision of this
Agreement constitute a continuing waiver unless otherwise
expressly provided.
18. If any covenant or provision in this Agreement is determined
to be void or unenforceable in whole or in part, such covenant or
provision shall be severable from all other covenants and
provisions hereof and shall not affect or impair the validity of
any other covenant or provision hereof.
19. Any notice, designation, communication, request, demand or
other document, required or permitted to be given or sent or
delivered hereunder to any party hereto shall be in writing and
shall be sufficiently given or sent or delivered if it is
a. delivered personally to such party or to an officer or
director of such party, as applicable, or
b. sent to the party entitled to receive it by registered mail,
postage prepaid, mailed in Canada, or
c. sent by telecopy machine.
Notices shall be sent to the following addresses or telecopy
numbers:
a. in the case of the Corporation:
BCE Place
181 Bay Street, Suite 1800
Toronto, Ontario
M5J 2T9
Attention: Mr. Avi S. Greenspoon
Telecopier: (416) 364-4916
b. in the case of the Consultant:
3600 Billings Court
Suite 103
Burlington, Ontario
L7N 3N6
Attention: Mr. Herb Adams
Telecopier: (905) 333-0804
or to such other address or telecopier number as the party
entitled to or receiving such notice, designation, communication,
request, demand or other document shall, by a notice given in
accordance with this section, have communicated to the party
giving or sending or delivering such notice, designation,
communication, request, demand or other document.
20. Any notice, designation, communication, request, demand or
other document given or sent or delivered as aforesaid shall
a. if delivered as aforesaid, be deemed to have been given,
sent, delivered and received on the date of delivery;
b. if sent by mail as aforesaid, be deemed to have been given,
sent, delivered and received (but not actually received) on the
fourth business day following the date of mailing, unless at any
time between the date of mailing and the fourth business day
thereafter there is a discontinuance or interruption of regular
postal service, whether due to strike or lockout or work
slowdown, affecting postal service at the point of dispatch or
delivery or any intermediate point, in which case the same shall
be deemed to have been given, sent, delivered and received in the
ordinary course of the mails, allowing for such discontinuance or
interruption of regular postal service; and
c. if sent by telecopy machine, be deemed to have been given,
sent, delivered and received on the date the sender receives the
telecopy answer back confirming receipt by the recipient.
21. The parties hereto agree that this Agreement may be
transmitted by facsimile or such similar device and that the
reproduction of signatures by facsimile or such similar device
will be treated as binding as if originals and each party hereto
undertakes to provide the other party hereto with a copy of this
Agreement bearing original signatures forthwith upon demand.
<PAGE> 7
IN WITNESS WHEREOF this Agreement has been executed by
the parties hereto.
GLOBESAT HOLDING CORP.
Per: /S/ Mel B. Greenspoon,
Chairman and Chief Executive Officer
HERB ADAMS
Per: /S/ Herb Adams
<PAGE> 1
CONSULTING AGREEMENT
THIS AGREEMENT is dated as of the 19th day of February, 1996
B E T W E E N :
GLOBESAT HOLDING CORP., a corporation incorporated
under the laws of the State of Utah
(hereinafter referred to as the "Corporation")
- and -
TODDINGTON INVESTMENTS, LTD., a corporation
incorporated
under the laws of the Turks & Caicos
(hereinafter referred to as the "Consultant")
WHEREAS the Corporation wishes to retain the service of the
Consultant as a consultant of the Corporation, and the Consultant
desires to serve as consultant for the Corporation;
AND WHEREAS the Corporation has entered into the Joint Venture
Agreement (as defined below);
AND WHEREAS the parties hereto wish to set out the terms and
conditions of the Consultant's tenure with the Corporation;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the premises and of the respective covenants and agreements
herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), it is
hereby agreed by and between the parties hereto as follows:
Consulting Arrangement
1. The Consultant shall be engaged as consultant by the
Corporation and shall, to the satisfaction of the Corporation,
faithfully, honestly and diligently perform such duties and
responsibilities and exercise such powers as the Corporation may,
acting reasonably, from time to time decide in connection with the
introduction and facilitation of meetings with key representatives
of Startech Environmental Corporation ("Startech").
<PAGE> 2
2. The Corporation shall engage the Consultant and the Consultant
shall serve the Corporation as consultant upon and subject to the
terms and conditions of this Agreement, commencing on the date
hereof until termination in accordance with the provisions of this
Agreement.
Compensation
3. Upon the execution of a joint venture agreement between the
Corporation, or an affiliate, and Startech, or an affiliate, in
connection with the establishment of a joint venture between the
parties in respect of commercializing certain plasma waste
converter systems developed by Startech which are designed to
convert tires into commodity products, principally comprised of
iron and synthetic gas (the "Joint Venture Agreement"), the
Corporation shall issue to the Consultant 400,000 shares of common
stock in the capital of the Corporation (the "GSAT Common Shares")
pursuant to Regulation S promulgated under the United States
Securities Act of 1933, as amended (the "Act").
Termination of Consulting Arrangement
4. The consulting arrangement with the Consultant may be
terminated by the Corporation at any time without prior notice for
cause. Notwithstanding such termination, the Consultant shall be
entitled to retain the GSAT Common Shares issued hereunder.
5. The term of this consulting agreement shall, unless terminated
earlier in accordance with section 4 or 6 hereof, automatically end
on a date which is one year from the date hereof.
6. The Consultant may at any time resign upon 30 days' advance
notice to the Corporation of such resignation. Notwithstanding
such resignation, the Consultant shall be entitled to retain the
GSAT Common Shares issued hereunder.
Representations and Warranties of the Consultant
7. The Consultant hereby represents and warrants to the
Corporation (which representations and warranties shall survive the
execution of this Agreement) that:
a. the Consultant is duly incorporated and validly subsisting
under the laws of its jurisdiction of incorporation and has all
requisite power and authority to enter into this Agreement and
perform its obligations hereunder;
<PAGE> 3
b. this Agreement has been duly authorized, executed and
delivered by, and constitutes a legal, valid, binding and
enforceable obligation of, the Consultant;
c. the execution and delivery of this Agreement by the Consultant
and the performance and compliance with the terms hereof will not
result in any breach, or be in conflict with, or constitute a
default under, or create a state of facts which after notice or
lapse of time or both, will constitute a default under, any term or
provision of the Consultant's constating documents, by-laws or
resolutions or any indenture, contract, agreement (whether written
or oral), instrument or other document to which the Consultant is
a party or to which it is subject, or any judgment, decree, order,
statute, rule or regulation applicable to it;
d. the Consultant is neither a "U.S. Person" (as defined in Rule
902(1) of Regulation S promulgated under the Act) and is not
obtaining the GSAT Common Shares for the account or benefit of any
U.S. Person or is a U.S. Person who purchased the GSAT Common
Shares in a transaction that did not require registration under the
Act;
e. the Consultant was not formed by a U.S. Person principally for
the purpose of investing in securities not registered under the Act
or is owned by accredited investors (as that term is defined in
Rule 501(a) of the Act) who are not natural persons, estates or
trusts;
f. neither the Consultant nor any of its "affiliates" (persons
directly or indirectly controlling, controlled by or under common
control of or any person) acting on behalf of the Consultant or any
such affiliate of the Consultant has or will engage in any
"directed selling efforts" as such term is defined in Rule 902 of
Regulation S which may condition the U.S. market with respect to
the GSAT Common Shares;
g. the Consultant understands that the GSAT Common Shares have
not been approved or disapproved by the Securities and Exchange
Commission or any state securities agencies and no registration
statement has been filed with any regulatory agency;
h. the Consultant is not an underwriter and would be acquiring
the GSAT Common Shares solely for investment for its own account
and not with a view to, or for, resale in connection with a
distribution within the meaning of the Act, the state securities
acts or any other applicable state securities acts;
<PAGE> 4
i. to the extent that any federal and/or state securities laws
shall require, the Consultant hereby agrees that any securities
acquired pursuant to this Agreement shall be without preference as
to assets;
j. the certificate for the GSAT Common Shares acquired hereby
will contain a legend that transfer is prohibited except in
accordance with the provisions of Regulation S;
k. the offer and sale of the GSAT Common Shares referred to
herein is being made outside the United States within the meaning
of Regulation 901 and is in full compliance with Regulation 903;
l. the Consultant agrees to resell such GSAT Common Shares only
in accordance with the provisions of Regulation S, pursuant to
registration under the Act, or pursuant to an available exemption
from registration;
m. the Consultant has not and will not have a "short" position in
the GSAT Common Shares at any time following 40 days from the date
of acquisition of the GSAT Common Shares;
n. all information which the Consultant has provided to the
Corporation concerning the Consultant including all information
contained herein, is complete and correct as of the date of this
Agreement and, if there should be any material change in such
information while this Agreement is in force, the Consultant will
immediately provide the Corporation with such information; and
o. the Consultant acknowledges and agrees that the foregoing
representations and warranties are made by it with the intention
that they may be relied upon in determining the Consultant's
eligibility to acquire the GSAT Common Shares under relevant
securities legislation. The Consultant agrees to indemnify GSAT
and its and his respective directors, officers, employees and
agents, as the case may be, against all losses, claims, costs,
expenses and damages or liabilities which any of them may suffer or
incur caused by or arising from reliance thereon.
Representations and Warranties of the Corporation
8. The Corporation hereby represents and warrants to the
Consultant (which representations and warranties shall survive the
execution of this Agreement) that:
<PAGE> 5
a. the Corporation is duly incorporated and validly subsisting
under the laws of the State of Utah and has all requisite power and
authority to enter into this Agreement and perform its obligations
hereunder;
b. this Agreement has been duly authorized, executed and
delivered by, and constitutes a legal, valid, binding and
enforceable obligation of, the Corporation; and
c. the execution and delivery of this Agreement by the
Corporation and the performance and compliance with the terms
hereof will not result in any breach, or be in conflict with, or
constitute a default under, or create a state of facts which after
notice or lapse of time or both, will constitute a default under,
any term or provision of the Corporation's constating documents,
by-laws or resolutions or any indenture, contract, agreement
(whether written or oral), instrument or other document to which
the Corporation is a party or to which it is subject, or any
judgment, decree, order, statute, rule or regulation applicable to
it.
Confidentiality
9. The Consultant acknowledges that in the course of its
performance of its duties with the Corporation it will be privy to
information confidential and proprietary to the Corporation and to
its clients ("Confidential Information"). Such Confidential
Information includes but is not limited to: secret business methods
and systems of the Corporation; the terms of contractual relations
with clients; subscriber lists; confidential information of
clients; business strategic development plans; financial
information and internal practices and procedures in respect of the
Corporation.
10. The Consultant hereby acknowledges that the disclosure of the
Confidential Information referred to in section 9 herein to any
third party would be harmful to the business interests of the
Corporation. The Consultant therefore agrees and undertakes that
it shall not at any time, either during its tenure hereunder or
thereafter, directly or indirectly, reveal to any third party any
such Confidential Information, directly or indirectly utilize, in
any way, either on its own behalf or on behalf of any third party,
any such Confidential Information except any such Confidential
Information which may hereafter be in the public domain.
11. Upon termination of its consulting arrangement with the
Corporation, the Consultant shall promptly return to the
Corporation originals or copies of any and all materials,
<PAGE> 6
documents, notes, including, customer lists, records, drawings and
other customer information, all samples, market share reports,
customer contracts, prices and rates, account management, data
processing programs and financial information, which is in the
Consultant's possession or control and relates or belongs to the
Corporation.
Relationship of the Parties
12. This Agreement shall not constitute an employer-employee
relationship. It is the intention of each party that the
Consultant shall be an independent contractor and not an employee
of the Corporation. The Consultant shall not have authority to act
as the agent of the Corporation except when such authority is
specifically delegated to the Consultant by the Corporation.
General Contract Provisions
13. The Consultant covenants and agrees to deliver such documents,
certificates, assurances and other instruments as may be required
to carry out the provisions of this Agreement.
14. This Agreement may not be assigned by either party without the
prior written consent of the other party hereto.
15. This Agreement shall enure to the benefit of and be binding
upon the successors and permitted assigns of the parties hereto.
16. The provisions of this Agreement shall be governed by and
interpreted in accordance with the laws of the Province of Ontario.
17. This Agreement constitutes the entire agreement between the
parties hereto pertaining to the subject matter hereof. There are
no warranties, representations or agreements between the parties in
connection with such subject matter except as specifically set
forth or referred to in this Agreement. Except as expressly
provided in this Agreement, no amendment, waiver or termination of
this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any other provision of
this Agreement shall constitute a waiver of any other provision nor
shall any waiver of any provision of this Agreement constitute a
continuing waiver unless otherwise expressly provided.
18. If any covenant or provision in this Agreement is determined
to be void or unenforceable in whole or in part, such covenant or
provision shall be severable from all other covenants and
provisions hereof and shall not affect or impair the validity of
any other covenant or provision hereof.
<PAGE> 7
19. Any notice, designation, communication, request, demand or
other document, required or permitted to be given or sent or
delivered hereunder to any party hereto shall be in writing and
shall be sufficiently given or sent or delivered if it is
a. delivered personally to such party or to an officer or
director of such party, as applicable, or
b. sent to the party entitled to receive it by registered mail,
postage prepaid, mailed in Canada, or
c. sent by telecopy machine.
Notices shall be sent to the following addresses or telecopy
numbers:
a. in the case of the Corporation:
BCE Place
181 Bay Street, Suite 1800
Toronto, Ontario
M5J 2T9
Attention: Mr. Avi S. Greenspoon
Telecopier: (416) 364-4916
b. in the case of the Consultant:
c/o G. Colin Raynor
3600 Billings Court, Suite 210
Burlington, Ontario
L7N 3N6
Attention: Mr. G. Colin Raynor
Telecopier: (905) 632-4520
or to such other address or telecopier number as the party entitled
to or receiving such notice, designation, communication, request,
demand or other document shall, by a notice given in accordance
with this section, have communicated to the party giving or sending
or delivering such notice, designation, communication, request,
demand or other document.
Any notice, designation, communication, request, demand or
other document given or sent or delivered as aforesaid shall
d. if delivered as aforesaid, be deemed to have been given, sent,
delivered and received on the date of delivery;
<PAGE> 8
e. if sent by mail as aforesaid, be deemed to have been given,
sent, delivered and received (but not actually received) on the
fourth business day following the date of mailing, unless at any
time between the date of mailing and the fourth business day
thereafter there is a discontinuance or interruption of regular
postal service, whether due to strike or lockout or work slowdown,
affecting postal service at the point of dispatch or delivery or
any intermediate point, in which case the same shall be deemed to
have been given, sent, delivered and received in the ordinary
course of the mails, allowing for such discontinuance or
interruption of regular postal service; and
f. if sent by telecopy machine, be deemed to have been given,
sent, delivered and received on the date the sender receives the
telecopy answer back confirming receipt by the recipient.
20. The parties hereto agree that this Agreement may be
transmitted by facsimile or such similar device and that the
reproduction of signatures by facsimile or such similar device will
be treated as binding as if originals and each party hereto
undertakes to provide the other party hereto with a copy of this
Agreement bearing original signatures forthwith upon demand.
<PAGE> 9
IN WITNESS WHEREOF this Agreement has been executed by
the parties hereto.
GLOBESAT HOLDING CORP.
Per: /S/ Mel B. Greenspoon, Chairman and Chief Executive Officer
TODDINGTON INVESTMENTS, LTD.
Per: /S/ G. Colin Rayner, Designated Signing Officer
<PAGE> 1
EQUITY JOINT VENTURE AGREEMENT
THIS AGREEMENT made this 19th day of February, 1996.
A M O N G:
GLOBESAT HOLDING CORP., a company incorporated
under the laws of the State of Utah
(hereinafter called "GSAT")
- and -
STARTECH ENVIRONMENTAL CORPORATION, a company
incorporated under the laws of the State of Colorado
(hereinafter called "STAR")
WHEREAS STAR has developed a proprietary process relating to
the manufacture, use and operation of Plasma Waste Converter
Systems (as hereinafter defined);
AND WHEREAS GSAT and STAR desire to form a joint venture
among themselves for the purpose of, among other things,
commercializing Tire Resource Recovery Systems (as hereinafter
defined) on the terms and conditions set forth herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the mutual covenants and agreements contained herein, the sum
of One Dollar ($1.00) paid by each party hereto to the other
parties hereto and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by each
of the parties hereto), it is hereby agreed as follows:
1.Definitions. For the purposes of this Agreement, the
following definitions shall apply:
a."Board of Directors" means the board of directors of the
Corporation as duly elected from time to time;
b."Corporation" has the meaning ascribed thereto in section 3
hereof;
c."Exclusive Representative Agreement" has the meaning
ascribed thereto in section 5 hereof;
d."GSAT-SUB" means a wholly-owned subsidiary of GSAT;
e."Plasma Waste Converter Systems" means electrically driven
systems that utilize an ionized plasma arc to produce an intense
<PAGE> 2
field of radiant energy that causes the dissociation of the
molecular bonds of organic and inorganic solids, liquids and
gaseous compounds and/or materials into their elemental atomic
components, and reforms them into, among other things, non-hazardous
recoverable and reusable products;
f."Share" means a common share in the capital of the
Corporation and "Shares" means more than one common share; and
"Share" or "Shares" include both present and future common shares
issued by the Corporation;
g."Shareholders" means GSAT-SUB and STAR-SUB;
h."Shareholders' Agreement" has the meaning ascribed thereto
in section 7 hereof;
i."STAR-SUB" means a wholly-owned subsidiary of STAR; and
j."Tire Resource Recovery Systems" means Plasma Waste
Converter Systems developed by STAR, in conjunction with others,
which are designed to convert tires into commodity products,
principally comprised of iron and synthetic gas.
2.Scope of the Joint Venture. The joint venture shall be
primarily engaged in the business of commercializing Tire
Resource Recovery Systems. The joint venture may also engage in
the business of commercializing Plasma Waste Converter Systems
for alternative energy generation. Through GSAT-SUB and STAR-SUB,
respectively, GSAT and STAR will be the initial parties to
the joint venture. The organizational form of the joint venture
company shall be a corporation.
3.Formation of the Corporation.
a.A corporation under the name GlobeStar Energy Corporation,
or such other name as may mutually agreed upon by the parties
hereto (the "Corporation"), shall be organized in a jurisdiction
to be determined by the parties hereto;
b.the Corporation shall be primarily engaged in the business
of commercializing Tire Resource Recovery Systems. The
Corporation may also engage in the business of commercializing
Plasma Waste Converter Systems or such other businesses as the
parties hereto may agree;
c.the articles of incorporation and the by-laws of the
Corporation shall give full effect to the terms of this Agreement
and shall be in a form satisfactory to the Shareholders. The
authorized capital of the Corporation shall consist of an
<PAGE> 3
unlimited number of Shares or such other number as may be
determined by the Shareholders; and
d.all costs incurred in taking the formal steps required to
establish the Corporation shall be borne by the Corporation.
4.Initial Capitalization. The parties hereto agree that the
Corporation shall be capitalized such that GSAT, through GSAT-SUB, holds
sixty per cent (60%) of the outstanding Shares and
STAR, through STAR-SUB, holds forty per cent (40%) of the
outstanding Shares. It is the intention of the parties hereto
that consideration for these shares shall be nominal.
5.Appointment as Representative.
a.As soon as practicable upon formation of the Corporation as
aforesaid, and in any event within 90 days from the date hereof,
STAR agrees to enter into an agreement (the "Exclusive
Representative Agreement") with the Corporation, whereby the
Corporation will be appointed as STAR's exclusive global
representative in respect of Tire Resource Recovery Systems;
b.the parties hereto agree that the Exclusive Representative
Agreement will, among other things, include certain performance
criteria for the Corporation, which will be negotiated, in good
faith, by the parties; and
c.notwithstanding anything else herein contained, the parties
hereto further agree that the Exclusive Representative Agreement
will provide that, in the event that the Corporation fails to
satisfy the performance criteria stated therein, STAR may enter
into non-exclusive representative agreements with third parties
in respect of Tire Resource Recovery Systems.
6.Shareholders' Agreement.
a.The Shareholders agree to negotiate in good faith and,
within 90 days of the date hereof, to use their best efforts to
enter into a shareholders' agreement (the "Shareholders'
Agreement") which will govern the relationship of the
Shareholders to one another and the Corporation and will provide,
among other things, the following:
i.requirement for unanimous approval of the Shareholders to:
(1) incur capital expenditures in excess of $100,000 in any
fiscal year;
<PAGE> 4
(2) sell or other dispose of assets having an aggregate
value in excess of $500,000 in any fiscal year, excluding
inventory sold in the ordinary course of business;
(3) dispose of all or substantially all of the assets of
the Corporation;
(4) amend the constating documents or by-laws of the
Corporation;
(5) admit other shareholders of the Corporation; or
(6) amalgamate, merge, consolidate, reorganize, continue,
liquidate or dissolve the Corporation;
ii.no Shareholder will be entitled to sell, transfer, pledge or
encumber its Shares;
iii.if either of the Shareholders wishes to sell its Shares to
an arm's length purchaser, it must obtain for the benefit of the
other Shareholder an opportunity to sell its Shares to the
purchaser on at least as favourable terms and conditions; and
iv.if either of the Shareholders becomes bankrupt or insolvent,
the Corporation shall be obligated to purchase such Shareholder's
Shares for cancellation at a price equal to the net book value of
such Shareholder's Shares as at the end of the preceding fiscal
year plus (or minus) an amount representing such Shareholder's
proportionate share of the pre-tax earnings (or losses) of the
Corporation to the end of the month preceding the month during
which the bankruptcy or insolvency occurs and minus the amount of
any distributions made to that Shareholder during the then
current fiscal year; and
b.until such time as the Shareholders' Agreement is executed
by the Shareholders, the Shareholders agree to the following:
i.the Shareholders shall not cause the Corporation, nor shall
the Shareholders cause the Board of Directors to undertake any of
the following:
(1) incur capital expenditures in excess of $100,000 in any
fiscal year;
(2) sell or other dispose of assets having an aggregate
value in excess of $500,000 in any fiscal year, excluding
inventory sold in the ordinary course of business;
<PAGE> 5
(3) dispose of all or substantially all of the assets of
the Corporation;
(4) amend the constating documents or by-laws of the
Corporation;
(5) admit other shareholders of the Corporation; or
(6) amalgamate, merge, consolidate, reorganize, continue,
liquidate or dissolve the Corporation.
ii.no Shareholder shall sell, transfer, pledge or encumber its
Shares; and
iii.if either of the Shareholders becomes bankrupt or insolvent,
the Corporation shall be obligated to purchase such Shareholder's
Shares for cancellation at a price equal to the net book value of
such Shareholder's Shares as at the end of the preceding fiscal
year plus (or minus) an amount representing such Shareholder's
proportionate share of the pre-tax earnings (or losses) of the
Corporation to the end of the month preceding the month during
which the bankruptcy or insolvency occurs and minus the amount of
any distributions made to that Shareholder during the then
current fiscal year.
7.Board of Directors. Following the formation of the
Corporation, the Shareholders agree to vote their Shares so that
the Board of Directors will consist of five persons, three of
whom will be nominees of GSAT-SUB and two of whom will be
nominees of STAR-SUB. To constitute a quorum, three directors
must be present and two such directors shall be nominees of GSAT-SUB and one
such director shall be a nominee of STAR-SUB.
Meetings of the Board of Directors may take place in person or by
means of such telephone, electronic or other communication
facilities as permit all persons participating in the meeting to
communicate with each other simultaneously and instantaneously.
8.Officers. The Board of Directors shall have the power to
appoint and remove officers of the Corporation. The initial
officers will be as agreed to by the Shareholders.
9.Financing of the Corporation. Under no circumstances will
GSAT, its subsidiaries and affiliates or STAR, its subsidiaries
or affiliates have any obligation to lend money to the
Corporation or to guarantee its obligations.
10.Execution of Instruments. All cheques and other banking
documents, deeds, transfers, contracts, agreements and other
<PAGE> 6
documents that are required to be executed by the Corporation
from time to time shall be executed on its behalf by such person
or persons as the Board of Directors may by resolution designate
from time to time.
11.Business Plan. The parties hereto agree to use their best
efforts to develop and complete a comprehensive business plan for
the Corporation within 90 days of the date hereof.
12.Compliance with Laws. The Shareholders agree to take all
necessary steps to ensure that the Corporation does not engage or
participate, directly or indirectly, in any transaction
whatsoever with respect to Tire Resource Recovery Systems to be
sold by it, if such transaction is prohibited by applicable law.
13. Finance, Audit and Record Keeping.
a.The fiscal year of the Corporation shall be fixed by the
Board of Directors;
b.the Corporation shall keep all accounts and records required
by law and practice applicable to its domicile. The Corporation
shall also keep books of account, and prepare quarterly and
annual financial statements, including a balance sheet, income
statement and such additional statements as either party hereto
may reasonably request, in accordance with generally accepted
accounting principles. These accounts and statements shall
control in determining the performance of the Corporation, the
amount of profits available for distribution, and all other
financial questions or matters;
c.an independent certified public accounting firm as the
Shareholders designate shall set up the accounts and records of
the Corporation, and, if deemed appropriate by the Shareholders,
shall audit the accounts and certify the annual financial
statements of the Corporation, and shall resolve all questions of
proper accounting and financial reporting. If one party hereto
disagrees with a determination of the accounting firm, it may
submit the question to arbitration in accordance with this
Agreement; and
d.in the first three months of each fiscal year, the
management of the Corporation shall prepare the previous year's
balance sheet, profit and loss statement and proposal regarding
the disposal of profits, and shall submit same to the Board of
Directors for examination and approval.
14.Termination. This Agreement shall terminate upon:
<PAGE> 7
a.liquidation or dissolution of the Corporation;
b.mutual written agreement of the Shareholders; or
c.one Shareholder owning all of the issued and outstanding
Shares.
15.Insurance. Insurance policies of the Corporation on various
kinds of risks shall be underwritten by an underwriter designated
by the Board of Directors. Types, value and duration of
insurance shall be decided by the Board of Directors.
16.Representations and Warranties of STAR. STAR represents,
warrants and covenants to GSAT, and acknowledges that GSAT is
relying on such representations, warranties and covenants, the
following:
a.STAR is a corporation duly incorporated and validly
subsisting in all respects under the laws of the State of
Colorado. There are no proceedings in progress, pending or, to
the best of the knowledge of STAR, threatened, which could result
in the revocation, cancellation or suspension of any licenses,
registrations or qualifications of STAR;
b.STAR is duly qualified, registered or licensed in all
jurisdictions where such qualification, registration or licensing
is required. STAR has all requisite corporate capacity, power
and authority to own, hold under license or lease its properties,
to carry on its business as now conducted and to otherwise enter
into, and carry out the transactions contemplated herein;
c.STAR has good right, full corporate power and authority to
enter into this Agreement and to perform all of its obligations
hereunder. STAR and its board of directors has taken all
necessary or desirable actions, steps and corporate and other
proceedings to approve or authorize, validly and effectively, the
entering into of, and the execution, delivery and performance of,
this Agreement. STAR has duly executed and delivered this
Agreement;
d.this Agreement is a legal, valid and binding obligation of
STAR enforceable against it in accordance with its terms subject
to (i) bankruptcy, insolvency, moratorium, reorganization and
other laws relating to or affecting the enforcement of creditors'
rights generally and (ii) the fact that equitable remedies,
including the remedies of specific performance and injunction,
may only be granted in the discretion of a court;
<PAGE> 8
e.the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby do
not and will not conflict with, result in any breach or violation
of, or constitute a default under, the terms, conditions or
provisions of the constating documents or by-laws of, or any
shareholder agreement relating to, STAR or of any law,
regulation, judgment, decree or order binding on or applicable to
it or by which STAR benefits or to which any of their property is
subject or of any material agreement, lease, license, permit or
other instrument to which STAR is a party or is otherwise bound
or by which it benefits or to which any of its property is
subject and do not require the consent or approval of any other
party or any governmental body, agency or authority;
f.STAR is not under any obligation, contractual or otherwise,
to request or obtain the consent of any person, and no permits,
licenses, certifications, authorizations or approvals of, or
notifications to, any federal, state, municipal or local
government or governmental agency, board, commission or authority
are required to be obtained by it in connection with the
execution, delivery or performance by STAR of this Agreement or
the completion of any of the transactions contemplated hereby;
g.there are no actions, suits or proceedings, judicial or
administrative (whether or not purportedly on behalf of STAR)
pending or, to the best of the knowledge of STAR, threatened, by
or against or affecting STAR which relate to the rights given to
GSAT and the Corporation hereunder, at law or in equity, or
before or by any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign; and
h.STAR has not:
(i) admitted its inability to pay its debts generally
as they become due or failed to pay its debts generally as they
become due;
(ii) filed an assignment or petition in bankruptcy or a
petition to take advantage of any insolvency statute;
(iii) made an assignment for the benefit of its
creditors;
(iv) consented to the appointment of a receiver of the
whole or any substantial part of its assets;
<PAGE> 9
(v) filed a petition or answer seeking a reorganiz-
ation, arrangement, adjustment or composition under applicable
bankruptcy laws or any other applicable law or statute of the
United States of America or any subdivision thereof; or
(vi) been adjudged by a court having jurisdiction a
bankrupt or insolvent, nor has a decree or order of a court
having jurisdiction been entered for the appointment of a
receiver, liquidator, trustee or assignee in bankruptcy with such
decree or order having remained in force and undischarged or
unstayed for a period of 30 days.
All of the representations and warranties of STAR contained
above shall survive the execution and delivery of this Agreement
notwithstanding any investigation made at any time by or on
behalf of GSAT.
17.Representations and Warranties of GSAT. GSAT represents,
warrants and covenants to STAR, and acknowledges that STAR is
relying on such representations, warranties and covenants, the
following:
a.GSAT is a corporation duly incorporated and validly
subsisting in all respects under the laws of the State of Utah.
There are no proceedings in progress, pending or, to the best of
the knowledge of GSAT, threatened, which could result in the
revocation, cancellation or suspension of any licenses,
registrations or qualifications of GSAT;
b.GSAT is duly qualified, registered or licensed in all
jurisdictions where such qualification, registration or licensing
is required. GSAT has all requisite corporate capacity, power
and authority to own, hold under license or lease its properties,
to carry on its business as now conducted and to otherwise enter
into, and carry out the transactions contemplated by, this
Agreement;
c.GSAT has good right, full corporate power and authority to
enter into this Agreement and to perform all of its obligations
hereunder. GSAT and its board of directors has taken all
necessary or desirable actions, steps and corporate and other
proceedings to approve or authorize, validly and effectively, the
entering into of, and the execution, delivery and performance of,
this Agreement. GSAT has duly executed and delivered this
Agreement;
d.this Agreement is a legal, valid and binding obligation of
GSAT enforceable against it in accordance with its terms subject
to (i) bankruptcy, insolvency, moratorium, reorganization and
<PAGE> 10
other laws relating to or affecting the enforcement of creditors'
rights generally and (ii) the fact that equitable remedies,
including the remedies of specific performance and injunction,
may only be granted in the discretion of a court;
e.the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby do
not and will not conflict with, result in any breach or violation
of, or constitute a default under, the terms, conditions or
provisions of the constating documents or by-laws of, or any
shareholder agreement relating to, GSAT or of any law,
regulation, judgment, decree or order binding on or applicable to
GSAT or by which GSAT benefits or to which any of its property is
subject or of any material agreement, lease, license, permit or
other instrument to which GSAT is a party or is otherwise bound
or by which GSAT benefits or to which any of its property is
subject and do not require the consent or approval of any other
party or any governmental body, agency or authority;
f.GSAT is not under any obligation, contractual or otherwise,
to request or obtain the consent of any person, and no permits,
licenses, certifications, authorizations or approvals of, or
notifications to, any federal, state, municipal or local
government or governmental agency, board, commission or authority
are required to be obtained by GSAT in connection with the
execution, delivery or performance by GSAT of this Agreement or
the completion of any of the transactions contemplated hereby;
g.there are no actions, suits or proceedings, judicial or
administrative (whether or not purportedly on behalf of GSAT)
pending or, to the best of the knowledge of GSAT, threatened, by
or against or affecting either of GSAT which relate to the rights
given to GSAT hereunder and the Corporation hereunder, at law or
in equity, or before or by any court or any federal, state,
municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign; and
h.GSAT has not:
(i) admitted its inability to pay its debts generally
as they become due or failed to pay its debts generally as they
become due;
(ii) filed an assignment or petition in bankruptcy or a
petition to take advantage of any insolvency statute;
(iii) made an assignment for the benefit of its
creditors;
<PAGE> 11
(iv) consented to the appointment of a receiver of the
whole or any substantial part of its assets;
(v) filed a petition or answer seeking a reorganiz-
ation, arrangement, adjustment or composition under applicable
bankruptcy laws or any other applicable law or statute of the
United States of America or any subdivision thereof; or
(vi) been adjudged by a court having jurisdiction a
bankrupt or insolvent, nor has a decree or order of a court
having jurisdiction been entered for the appointment of a
receiver, liquidator, trustee or assignee in bankruptcy with such
decree or order having remained in force and undischarged or
unstayed for a period of 30 days.
All of the representations and warranties of GSAT contained
above shall survive the execution and delivery of this Agreement
notwithstanding any investigation made at any time by or on
behalf of GSAT.
18.Covenants of STAR. During the term of this Agreement, STAR
covenants to and in favour of GSAT the following:
a.STAR shall maintain its corporate existence in good standing
and shall qualify and remain duly qualified to carry on business
and own property in each jurisdiction in which such qualification
is necessary in view of its business and operations;
b.if not done so already, STAR shall incorporate and organize
STAR-SUB and cause it to carry out all steps, actions and things
necessary to give effect to the provisions of this Agreement
relating to such company;
c.STAR shall not sell, transfer, assign or otherwise dispose
of any of the issued and outstanding shares of STAR-SUB and will
not grant any rights or options to acquire, or instruments
convertible into or exchangeable for, any of such shares;
d.STAR shall maintain beneficial and registered ownership of
all the issued and outstanding shares of STAR-SUB free and clear
of all mortgages, liens, charges, pledges, security interests,
encumbrances, claims or demands whatsoever and STAR shall not
issue any shares in its capital to any person other than STAR;
e.STAR shall cause STAR-SUB to maintain its corporate
existence in good standing and shall cause STAR-SUB to qualify
and maintain qualified to carry on business and own property in
each jurisdiction in which such qualification is necessary in
view of its business and operations;
<PAGE> 12
f.STAR agrees to negotiate in good faith and enter into the
Exclusive Representative Agreement and to negotiate in good faith
and use its best efforts to cause STAR-SUB to enter into the
Shareholders' Agreement; and
g.without the prior written consent of GSAT, prior to the
execution of the Shareholders' Agreement and the Exclusive
Representative Agreement by the relevant parties, STAR agrees not
to, directly or indirectly, through its subsidiaries, affiliates
or otherwise, negotiate or enter into any representative or other
agreements in connection with, the sale or distribution of Tire
Resource Recovery Systems.
19.Covenants of GSAT. During the term of this Agreement, GSAT
covenants to and in favour of STAR the following:
a.GSAT shall maintain its corporate existence in good standing
and shall qualify and remain duly qualified to carry on business
and own property in each jurisdiction in which such qualification
is necessary in view of its business and operations;
b.if not done so already, GSAT shall incorporate and organize
GSAT-SUB and cause it to carry out all steps, actions and things
necessary to give effect to the provisions of this Agreement
relating to such company;
c.GSAT shall not sell, transfer, assign or otherwise dispose
of any of the issued and outstanding shares of GSAT-SUB and will
not grant any rights or options to acquire, or instruments
convertible into or exchangeable for, any of such shares;
d.GSAT shall maintain beneficial and registered ownership of
all the issued and outstanding shares of GSAT-SUB free and clear
of all mortgages, liens, charges, pledges, security interests,
encumbrances, claims or demands whatsoever and GSAT shall not
issue any shares in its capital to any person other than GSAT;
e.GSAT shall cause GSAT-SUB to maintain its corporate
existence in good standing and shall cause GSAT-SUB to qualify
and maintain qualified to carry on business and own property in
each jurisdiction in which such qualification is necessary in
view of its business and operations; and
f.GSAT agrees to negotiate in good faith and to use its best
efforts to cause GSAT-SUB to enter into the Shareholders'
Agreement and to negotiate in good faith and to use its best
efforts to cause the Corporation to enter into the Exclusive
Representative Agreement.
<PAGE> 13
20.Share Certificate Endorsement. Each certificate evidencing
ownership of Shares shall have endorsed upon it a statement to
the following effect:
The shares evidenced by this certificate are subject to
restrictions on their transfer and to the provisions of an Equity
Joint Venture Agreement made the 19th day of February, 1996,
between Globesat Holding Corp. and Startech Environmental
Corporation and all transfers, assignments and dealings of any
nature or kind whatsoever with shares evidenced hereby may be
made only pursuant to and subject to such restrictions on
transfer and the provisions of the said agreement.
21.Matters Outstanding.
a.The parties hereto mutually recognize that certain material
and consequential areas of specificity are necessary and
desirable in order to give full effect to this Agreement and
certain parts thereof. The parties agree to negotiate in good
faith and use their best efforts to enter into such further and
other agreements and documents, and perform and cause to be done
and performed such further and other acts and things as may be
necessary or desirable in order to give full effect to this
Agreement and every part thereof; and
b.in the event that the parties hereto are unable to agree to
negotiated resolutions to any material outstanding matter of
specificity, acting reasonably, within six months from the date
hereof, it is agreed that GSAT shall have the option to enter
into a sales representative agreement with STAR in connection
with Tire Resource Recovery Systems on terms and conditions
substantially similar to those contained in Plasma Waste
Converter Systems sales representative agreements used by STAR in
the ordinary course of business.
22.Announcements. Except as otherwise contemplated herein, no
announcement with respect to this Agreement will be made by any
party hereto without the prior approval of the other parties
hereto. The foregoing will not apply to any announcement by any
party hereto required in order to comply with laws pertaining to
timely disclosure, if applicable, provided that such party hereto
consults with the other parties hereto before making any such
announcement.
23.Waiver. No waiver by any party hereto of a breach of any of
the covenants, conditions and provisions herein contained shall
be effective or binding upon such party hereto unless the same
shall be expressed in writing and any waiver so expressed shall
<PAGE> 14
not limit or affect such party hereto's rights with respect to
any other future breach.
24.Notice. Any notice or other communications (a "Notice")
required or permitted to be given hereunder shall be in writing
and shall be delivered in person, transmitted by facsimile or
sent by registered mail, charges prepaid, addressed as follows:
a.if to GSAT:
Globesat Holding Corp.
BCE Place
181 Bay Street
Toronto, Ontario
M5J 2T9
Attention: Mr. Avi S. Greenspoon
Facsimile No: (416) 364-4916
b.if to STAR:
Startech Environmental Corporation
79 Old Ridgefield Road
Wilton, Connecticut
06897
Attention: Mr. Joseph F. Longo
Facsimile No: (203) 761-0839
or at any such other address or addresses as may be given by
any of them to the other in writing from time to time. Such
Notice, if mailed, shall be deemed to have been given on the
second business day (except Saturdays or Sundays) following such
mailing, or if delivered personally or transmitted by facsimile,
shall be deemed to have been given on the day of delivery or
transmission, as the case may be, if a business day, or if not a
business day, on the business day next following the day of
delivery or transmission, as the case may be; provided that if
such Notice shall have been mailed and if regular mail service
shall be interrupted by strike or other irregularity before the
deemed receipt of such Notice as aforesaid, then such Notice
shall not be effective unless delivered or transmitted by
facsimile.
25.Status of the Parties. Nothing herein contained shall be
deemed or construed to create a partnership relationship of any
kind or association between the parties hereto for any purposes
other than as contemplated herein.
<PAGE> 15
26.Assignment. None of the parties hereto shall assign any of
its rights or obligations hereunder without the prior written
consent of the other parties hereto.
27.Severability. In the event that any of the covenants herein
contained shall be held unenforceable or declared invalid for any
reason whatsoever, such unenforceability or validity of the
remaining provisions of this Agreement and such unenforceable or
invalid portion shall be servable from the remainder of this
Agreement.
28.Interpretation not Affected by Headings. The division of
this Agreement into articles and sections is for convenience of
reference only and shall not affect the interpretation or
construction of this Agreement.
29.Currency. Unless otherwise indicated herein, all dollar
amounts referred to in this Agreement are in lawful money of the
United States of America.
30.Time of the Essence. Time shall be of the essence of this
Agreement.
31.Amendment of Agreement. No modification or amendment to
this Agreement may be made unless agreed to by the parties hereto
in writing.
32.Entire Agreement. This Agreement constitutes the entire
Agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements,
understandings, negotiations, commitments, conditions,
representations, warranties and undertakings.
33.Counterparts. This Agreement may be executed in several
counterparts, each of which so executed shall be deemed to be an
original, and such counterparts together shall constitute but one
and the same instrument.
34.Successor and Assigns. This Agreement shall be binding upon
and enure to the benefit of the parties hereto and their
respective successors and permitted assigns.
35.Governing Law. This Agreement shall be construed,
interpreted and enforced in accordance with, and the respective
rights and obligations of the parties hereto shall be governed
by, the laws of the Province of Ontario.
<PAGE> 16
IN WITNESS WHEREOF this Agreement has been executed by the
parties hereto as of the date first above written.
GLOBESAT HOLDING CORP.
Per: /S/ Mel B. Greenspoon, Chairman and CEO
Per: /S/ Allan Greenspoon, President and CFO
STARTECH ENVIRONMENTAL CORPORATION
Per: /s/ Joseph F. Longo, President and CEO
Per: /s/ Leonard K. Knapp, Vice President
<PAGE> 1
THIS AGREEMENT made as of this 17th day of November,
1995.
B E T W E E N :
NICHOLAS PLESSAS, IN TRUST ("NP")
- and -
LA-NUR INC., a company incorporated under the laws of the
Province of Ontario ("LA-NUR")
WHEREAS LA-NUR has developed and owns various methods of
technical know-how relating to the manufacture and use of a facial
muscle stimulator (the "Product");
AND WHEREAS LA-NUR is, or will be, the registered owner of the
trademark "NOVATONE", registration number 644502 (the "Mark");
AND WHEREAS NP is desirous of obtaining from LA-NUR a licence
to use the Methods and Technical Know-how (as hereinafter defined)
and right to manufacture the Product, subject to the approvals set
forth in this Agreement, and the right to distribute the Product in
the Territory (as hereinafter defined) whether under the Mark or
not;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the respective covenants contained herein, the sum of One Dollar
($1.00) paid by each party hereto to the other party hereto and
other good and valuable consideration (the receipt and sufficiency
of which is hereby acknowledged by each of the parties hereto), it
is agreed as follows:
1. Definitions. For the purposes of this Agreement, the
following definitions shall apply:
(a) "Mark" means the registered trademark "NOVATONE",
registration number 644502, now owned by Rivqa Resnick
and Lazer Resnick, a partnership;
(b) "Methods and Technical Know-how" means all information,
knowledge and experience of a technical and commercial
nature, including trade secrets, specifications, methods,
applications, criteria, qualities, requirements and all
other information in connection with the Product and any
other information and data relating to techniques for,
methods of or practices in the manufacture, use and sale
of the Product;
<PAGE> 2
(c) "Product" means the facial muscle stimulator manufactured
under Methods and Technical Know-how possessed by LA-NUR;
and
(d) "Territory" means the world.
2. Methods and Technical Know-How. Subject to the terms and
conditions set out in this Agreement, LA-NUR covenants and
agrees to provide NP with the Methods and Technical Know-how
necessary to enable NP to have the Product manufactured. With
the exception of Samsung Electronics Co., Ltd. ("Samsung"), NP
shall not permit the manufacture of the Product by any other
manufacturer, without the express written consent of LA-NUR,
such consent not to be unreasonably withheld.
3. Grant of Licence.
(a) In accordance with the terms and conditions of this
Agreement, and effective from the date hereof and during
the term stipulated herein, LA-NUR hereby grants to NP:
(i) the exclusive right and licence to use the Methods
and Technical Know-how to manufacture, package,
market, promote, distribute, offer for sale and
sell the Product in the Territory; and
(ii) subject to subsection 4(a) below, the exclusive
right and licence to use the Mark in relation to
the Product manufactured, packaged, marketed,
promoted, distributed, offered for sale or sold by
NP in the Territory and, except in connection with
Product manufactured by Samsung, conforming to the
standards of quality of the Product prototype as
approved by LA-NUR.
(b) The authority to use the Mark shall continue until this
Agreement shall be terminated and shall extend only to
the manufacturing, packaging, marketing, promoting,
distributing, offering for sale and selling of the
Product.
(c) NP acknowledges and agrees that all rights, title and
interest in and to the Mark, including all intellectual
property rights therein, are, or will be, vested in and
shall remain vested in LA-NUR. Nothing in this Agreement
shall be construed as transferring ownership of any
rights of LA-NUR in the Mark.
(d) For greater certainty, nothing in this Agreement shall be
construed so as to prevent NP from manufacturing,
packaging, marketing, promoting, distributing, offering
for sale and selling the Product in the Territory under
<PAGE> 3
a tradename or trademark other than the Mark.
4. Covenants in Respect of the Mark.
(a) LA-NUR agrees to forthwith obtain from Rivqa Resnick and
Lazer Resnick, a partnership, all of such partnership's
right, title and interest in and to the Mark in order so
that LA-NUR can comply with subsection 3(a)(ii) above.
Upon the completion of such transfer, LA-NUR agrees to
forthwith provide copies of documentation evidencing same
to NP.
(b) LA-NUR agrees to maintain the good standing of the Mark
at all times during the term of this Agreement and any
renewal term thereof.
(c) NP acknowledges that LA-NUR is not, as of the date
hereof, the registered owner of the Mark.
5. Covenant in Respect of Minimum Purchase. NP agrees to place
a purchase order with the manufacturer of the Product for no
less than 1,500 units of the Product within ninety (90) days
from the date hereof.
6. Term.
(a) The term of this Agreement shall for a period of three
(3) years from the date hereof (the "Initial Term").
(b) NP shall have the right to renew this Agreement for a
further period of three (3) years commencing from the
expiry of the Initial Term (the "Second Term"). This
renewal to be effective automatically upon the expiry of
the Initial Term, unless NP provides 30 days' prior
written notice to LA-NUR of its intention not to seek
automatic renewal.
7. Termination by LA-NUR.
(a) LA-NUR shall have the right to terminate this Agreement
upon the happening of any of the following events:
i. if NP fails to pay any amount due and payable under
this Agreement, including the minimum annual
payments set out in subsection 10(b) below, and
such default shall continue for a period of 30 days
after written notice thereof has been given to NP;
or
ii. if NP breaches any material terms or conditions of
this Agreement and such breach continues for a
period of 30 days after written notice thereof has
<PAGE> 4
been given to NP; or
iii. if NP ceases to carry on business, takes any action
to liquidate its assets, makes a general assignment
for the benefit of its creditors or institutes any
proceedings under any statute relating to
insolvency or bankruptcy.
(b) If this Agreement is terminated by LA-NUR as aforesaid,
NP agrees to notify such customers of the Product of the
termination as LA-NUR requests in writing.
8. Termination by NP. NP shall have the right to terminate this
Agreement and his obligations hereunder (including the royalty
payments set out in Section 10 below) upon 30 days' written
notice to LA-NUR at any time on or after January 1, 1997. In
the event that NP terminates this Agreement pursuant to this
Section 8, NP shall be obligated to comply with the terms of
Section 10 with respect to any royalties owing at the time of
such termination except for the minimum annual payment set out
in subsection 10(b) thereof for the calendar year when such
termination occurs.
9. Effect of Termination. Notwithstanding anything herein
contained, upon the expiration, or termination of this
Agreement for any reason whatsoever, NP shall be at liberty to
sell its merchantable inventory during the six (6) months next
following the date of expiration or termination of this
Agreement under the Mark, subject to the payment by NP of the
royalty pursuant to subsection 10(a).
10. Royalties.
(a) For the Initial Term, NP shall pay to LA-NUR a royalty in
the amount of $4.00 for each unit of the Product sold by
or on behalf of NP in the Territory and such royalty
shall become due and payable fourteen (14) days after
receipt by NP of funds derived from sales of such
Product.
(b) For the calendar years 1996, 1997 and 1998 only, NP shall
pay to LA-NUR the greater of (i) the royalty amount set
out in subsection 10(a) above or (ii) the minimum annual
payment set out below on or before December 31 of each
respective year:
Calendar Year Minimum Payment
1996 $100,000
1997 $200,000
1998 $200,000
<PAGE> 5
(c) For the Second Term, if applicable, the parties agree to
renegotiate in good faith the royalty amount set out in
subsection 10(a) above but in no event shall the royalty
be greater than $4.00 for each unit of the Product sold.
If the parties cannot mutually agree upon a royalty
amount at that time, the royalty shall be deemed to be
$4.00 for each unit of Product sold.
(d) All payments of royalties by NP to LA-NUR shall be
accompanied by a statement of NP showing details of funds
derived from sales of the Product during the period to
which the royalty payments apply.
11. Participation in Rebates, Etc. In the event that any volume
discounts, rebate fees or discount bonuses (whether by way of
cash, kind or credit) are received by NP from any manufacturer
or supplier designated by NP, whether or not on account of
purchases made (i) by NP for its own account or for the
account of LA-NUR or (ii) by NP directly for its own account,
LA-NUR shall be entitled to receive from NP one-half of such
volume discount, rebate fee or discount bonus.
12. Access to Certain Documents and Audits.
(a) LA-NUR shall have the right, upon two weeks prior written
notice to NP, to review sales records and related
documents of NP to verify the due and proper payment of
the royalty referred to in Section 10 hereof.
(b) During the term of this Agreement and for a period of one
(1) year thereafter, NP shall keep sufficiently detailed
records of the Product sold by NP to permit verification
of the reports and payments made or to be made to LA-NUR
pursuant to subsection 10(d) hereof.
(c) If LA-NUR elects to have an auditor conduct an audit on
the sales records and related documents of NP in respect
of sales of the Product
i. and a deficiency of less than or equal to five per
cent (5%) is not found from the statements
furnished pursuant to subsection 10(d) hereof, the
cost of such audit shall be borne by LA-NUR;
ii. and a deficiency of greater than five per cent (5%)
is found from the statements furnished pursuant to
subsection 10(d) hereof, the cost of such audit
shall be borne by NP.
13. Consulting. Other than providing Methods and Technical Know-how as
contemplated hereunder, LA-NUR agrees to cause Rivqa
Resnick to provide consulting services in connection with the
<PAGE> 6
Product to NP for a fee of $50.00 per hour plus all expenses related
thereto upon reasonable request by NP at any time and from time to time.
This fee is to be paid by NP within fourteen (14) days of receipt of
an invoice from LA-NUR or Rivqa Resnick for such services rendered to NP.
14. Representations and Warranties of LA-NUR. LA-NUR represents,
warrants and covenants to NP, and acknowledges that NP is
relying on such representations, warranties and covenants, the
following:
(a) LA-NUR is a corporation duly incorporated and validly
subsisting in all respects under the laws of the Province
of Ontario. There are no proceedings in progress,
pending or, to the best of the knowledge of LA-NUR,
threatened, which could result in the revocation,
cancellation or suspension of any licenses, registrations
or qualifications of LA-NUR;
(b) LA-NUR has good right, full corporate power and authority
to enter into this Agreement and to grant the rights to
NP in the manner contemplated herein and to perform all
of its obligations under this Agreement. LA-NUR and its
board of directors have taken all necessary or desirable
actions, steps and corporate and other proceedings to
approve or authorize, validly and effectively, the
entering into of, and the execution, delivery and
performance of, this Agreement and the granting of the
rights to NP hereunder;
(c) this Agreement is a legal, valid and binding obligation
of LA-NUR enforceable against it in accordance with its
terms subject to (i) bankruptcy, insolvency, moratorium,
reorganization and other laws relating to or affecting
the enforcement of creditors' rights generally and (ii)
the fact that equitable remedies, including the remedies
of specific performance and injunction, may only be
granted in the discretion of a court;
(d) the execution, delivery and performance of this Agreement
by LA-NUR, and the completion of the transactions
contemplated hereby, will not constitute or result in a
violation, breach or default under any term or provision
of any of the articles, by-laws or other constating
documents of LA-NUR or any material contract to which LA-NUR is a
party;
(e) no person has any agreement, option, understanding or
commitment, or any right or privilege (whether by law,
preemptive or contractual) capable of becoming an
agreement, option or commitment, for the purchase or
other acquisition from LA-NUR of any of the rights
<PAGE> 7
granted to NP hereunder or any rights or interest therein;
(f) LA-NUR is not under any obligation, contractual or
otherwise, to request or obtain the consent of any
person, and no permits, licenses, certifications,
authorizations or approvals of, or notifications to, any
federal, provincial, municipal or local government or
governmental agency, board, commission or authority are
required to be obtained by LA-NUR in connection with the execution,
delivery or performance by LA-NUR
of this Agreement or the completion of any of the transactions
contemplated hereby;
(g) there are no actions, suits or proceedings, judicial or
administrative (whether or not purportedly on behalf of
LA-NUR) pending or, to the best of the knowledge of LA-NUR,
threatened, by or against or affecting LA-NUR which
relate to the rights given to NP hereunder, at law or in
equity, or before or by any court or any federal,
provincial, municipal or other governmental department,
commission, board, bureau, agency or instrumentality,
domestic or foreign;
(h) Rivqa Resnick and Lazer Resnick, a partnership, has good
and valid title to the Mark, free and clear of any and
all encumbrances; has the exclusive right to use the Mark
and has not granted any licence or other rights to any
other person in respect of the Mark (other than to LA-NUR); and is
entitled to assign all of its rights and
interest in and to the Mark; and
(i) To the best of the knowledge of LA-NUR, in manufacturing,
packaging, marketing, promoting, distributing, offering
for sale and/or selling the Product, NP will not infringe
upon any Canadian patent, trademark or property right of
any third person, existing as at the date hereof.
15. Representations and Warranties of NP. NP represents, warrants
and covenants to LA-NUR, and acknowledges that LA-NUR is
relying on such representations, warranties and covenants, the
following:
(a) this Agreement is a legal, valid and binding obligation
of NP, enforceable against it in accordance with its
terms subject to (i) bankruptcy, insolvency, moratorium
and other laws relating to or affecting the enforcement
of creditors' rights generally and (ii) the fact that
equitable remedies, including the remedies of specific
performance and injunction, may only be granted in the
discretion of a court;
<PAGE> 8
(b) NP shall provide to its customers and honour such
warranties in connection with the production and sale of
the Product as are in place from time to time;
(c) NP shall, at its sole cost and expense, take out and keep
in force and effect, throughout the term of this
Agreement and any renewal term thereof, product liability
insurance on the Product in commercially reasonable
amounts, fully protecting LA-NUR against loss or damage
occurring in connection with the manufacturing and
marketing of the Product;
(d) in performing its obligations hereunder, NP shall comply
with the applicable laws of the territory in which it
conducts its activities in connection with the Product
and shall indemnify and save harmless LA-NUR from any
failure to comply;
(e) NP agrees to indemnify and save harmless LA-NUR from and
against all actions, causes of action, claims, suits and
demand of whatsoever kind, in law or in equity, claimed,
made or brought against LA-NUR arising out of or in any
way connected with, the non-grant to Samsung of a right
to manufacture the Product;
(f) NP shall use its reasonable best efforts in distributing
and selling the Product; and
(g) NP agrees not to produce or distribute any other type of
electronic muscle stimulator product designed for facial
application during the term of this Agreement and any
renewal term thereof.
16. Limitation of Liability.
(a) Notwithstanding any other provision of this Agreement,
LA-NUR's entire liability to NP for damages from any
cause, other than gross negligence or fraud, shall not
exceed the amounts actually accrued in favour of LA-NUR
from NP pursuant to this Agreement at the time that any
such action was commenced.
(b) Other than gross negligence or fraud, in no event shall
LA-NUR be liable for special, indirect, incidental or
consequential damages, including, without limitation,
damages or loss to equipment, loss of profits or revenue,
loss of goodwill, increased expenses of operation, cost
of capital, or the claims of third parties, including,
without limitation, product liability claims.
<PAGE> 9
17. Assignment.
(a) LA-NUR shall not assign any of its rights or obligations
hereunder without the prior written consent of NP, such
consent not to be unreasonably withheld.
(b) NP may, at any time and from time to time, assign all its
rights and obligations under this Agreement to Mel
Greenspoon, in Trust, who may, in turn, assign such
rights and obligations to Windsor Acquisition Corp., a
corporation incorporated under the laws of the Province
of Ontario, and LA-NUR expressly accepts such assignment
upon a written notice to that effect, provided that such
entity or entities agree to become bound by the terms of
this Agreement.
18. Confidentiality.
(a) The parties agree and acknowledge that all information
relating to the Product is confidential information of
LA-NUR and constitutes trade secrets of LA-NUR and NP
shall keep confidential such information throughout the
term of this Agreement and for a period of five (5) years
thereafter.
(b) The parties agree and acknowledge that all other
information provided by each concerning its own business
shall be considered confidential information and each
party shall keep confidential such information throughout
the term of this Agreement and for a period of five (5)
years thereafter.
19. Notice. Any notice or other communications (a "Notice")
required or permitted to be given hereunder shall be in
writing and shall be delivered in person, transmitted by
facsimile or sent by registered mail, charges prepaid,
addressed as follows:
(a) if to NP:
1080 Tristar Drive
Unit 14
Mississauga, Ontario
L5T 1P1
Attention: Mr. Nicholas Plessas
Facsimile No: (905) 564-3562
<PAGE> 10
(b) if to LA-NUR:
1606 Featherstone Drive
Ottawa, Ontario
K1H 6P2
Attention: Mrs. Rivqa Resnick
Facsimile No.: (613) 526-3481
or at any such other address or addresses as may be given by
any of them to the other in writing from time to time. Such
Notice, if mailed, shall be deemed to have been given on the
second business day (except Saturdays or Sundays) following
such mailing, or if delivered personally or transmitted by
facsimile, shall be deemed to have been given on the day of
delivery or transmission, as the case may be, if a business
day, or if not a business day, on the business day next
following the day of delivery or transmission, as the case may
be; provided that if such Notice shall have been mailed and if
regular mail service shall be interrupted by strike or other
irregularity before the deemed receipt of such Notice as
aforesaid, then such Notice shall not be effective unless
delivered or transmitted by facsimile.
20. Status of NP. The parties hereto acknowledge that NP is an
independent contractor and nothing in this Agreement is
intended to constitute LA-NUR as an agent, partner or joint
venturer of NP. Subject to the specific controls which are
necessary for LA-NUR to have over the operation of the
business of NP in performance of this Agreement as provided
herein, NP shall conduct its business in connection with the
Product in its own discretion.
21. General Contract Provisions.
(a) The division of this Agreement into articles and sections
is for convenience of reference only and shall not affect
the interpretation or construction of this Agreement.
(b) Unless otherwise indicated herein, all dollar amounts
referred to in this Agreement are in lawful money of the
United States of America.
(c) Time shall be of the essence of this Agreement.
(d) No modification or amendment to this Agreement may be
made unless agreed to by the parties hereto in writing.
(e) This Agreement constitutes the entire Agreement between
the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings,
negotiations, commitments, conditions, representations,
<PAGE> 11
warranties and undertakings.
(f) This Agreement may be executed in several counterparts,
each of which so executed shall be deemed to be an
original, and such counterparts together shall constitute
but one and the same instrument.
(g) This Agreement shall be binding upon and enure to the
benefit of the parties hereto and their respective
successors and permitted assigns.
(h) This Agreement shall be construed, interpreted and
enforced in accordance with, and the respective rights
and obligations of the parties shall be governed by, the
laws of the Province of Ontario.
(i) The parties hereto agree that this Agreement may be
transmitted by facsimile or such similar device and that
the reproduction of signatures by facsimile or such
similar device will be treated as binding as if originals
and each party hereto undertakes to provide each and
every other party hereto with a copy of this Agreement
bearing original signatures forthwith upon demand.
(j) The parties agree that the U.N. Convention on Contracts
for the International Sales of Goods (Vienna, 1980) shall
not apply to this Agreement nor to any dispute or
transaction arising out of this Agreement.<PAGE>
<PAGE> 12
IN WITNESS WHEREOF this Agreement has been executed by
the parties as of the date first above written.
Witness:
Nicholas Plessas, In Trust
LA-NUR INC.
Per: /S/ Rivqa Resnick, President
<PAGE> 1
THIS AGREEMENT made this 30th day of November, 1995.
A M O N G :
MEL GREENSPOON, IN TRUST
(hereinafter called "MG")
- and -
NICHOLAS PLESSAS, IN TRUST
(hereinafter called "NP")
- and -
LA-NUR INC., a company incorporated under the laws
of the Province of Ontario
(hereinafter called "LA-NUR")
WHEREAS NP entered into an agreement (the "Novatone
Agreement") dated as of November 17, 1995 with LA-NUR (a copy of
which is attached hereto as Schedule "A") in respect of certain
rights and obligations relating to a certain facial muscle
stimulator product and a certain trade mark;
AND WHEREAS the Novatone Agreement provides that NP may
assign its rights and obligations under the Novatone Agreement
provided that such assignee agrees to become bound by the terms
of the Novatone Agreement;
AND WHEREAS NP desires to assign, and MG desires to assume,
the rights and obligations of NP under the Novatone Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the mutual covenants and agreements contained herein, the sum
of One Dollar paid by each party hereto to each of the other
parties hereto and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by each
of the parties hereto), it is hereby agreed as follows:
1. Assignment of Novatone Agreement. NP hereby assigns to MG
all of NP's right, title, estate and interest in the covenants,
terms and conditions contained in the Novatone Agreement and all
benefits derived therefrom, and MG hereby accepts such assignment
and MG hereby agrees to be bound by and perform or cause to be
performed all the covenants, terms and conditions contained in
the Novatone Agreement irrespective of whether said covenants,
<PAGE> 2
terms and conditions should have been performed prior to the date
of this Agreement.
2. Indemnification of NP. MG hereby covenants and agrees, at
its expense, to indemnify, to defend and to save and hold NP
harmless from and against and in respect of any and all
obligations, commitments and liabilities of and claims against NP
(whether absolute, accrued or contingent) arising out of or in
any way connected with the non-performance or breach of MG of any
of the obligations of NP under the Novatone Agreement and all
claims, demands, causes of action, actions, losses, damages and
expenses of every nature and kind for or in respect of or
relating thereto.
3. Assignment. MG may, at any time and from time to time,
assign its rights and obligations under this Agreement, in whole
or in part, to any person, partnership, corporation or other
entity, provided that such person agrees to become bound by the
terms of this Agreement.
4. Enurement. This agreement shall enure to the benefit of and
be binding upon the parties hereto and their respective
successors and assigns.
5. Entire Agreement. This Agreement constitutes the entire
Agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements, understandings,
negotiations, commitments, conditions, representations,
warranties and undertakings.
6. Counterparts. This Agreement may be executed in several
counterparts, each of which so executed shall be deemed to be an
original, and such counterparts together shall constitute but one
and the same instrument.
7. Governing Law. This Agreement shall be construed,
interpreted and enforced in accordance with, and the respective
rights and obligations of the parties shall be governed by, the
laws of the Province of Ontario.
8. Transmission by Facsimile. The parties hereto agree that
this Agreement may be transmitted by facsimile or such similar
device and that the reproduction of signatures by facsimile or
such similar device will be treated as binding as if originals
and each party hereto undertakes to provide each and every other
party hereto with a copy of this Agreement bearing original
signatures forthwith upon demand.<PAGE>
<PAGE> 3
IN WITNESS WHEREOF this agreement has been executed by the
parties hereto as of the date first above written.
Witness: /S/ Michael Bellman
By: /S/ Nicholas Plessas, In Trust
Witness: /S/ Michael Bellman
By: /S/ Mel Greenspoon, In Trust
LA-NUR INC.
Per: /S/ Rivqa Resnick,President
<PAGE> 1
THIS AGREEMENT made this 18th day of January, 1996.
A M O N G :
MEL GREENSPOON, IN TRUST
(hereinafter called "MG")
- and -
WINDSOR ACQUISITION CORP., a company incorporated
under the laws of the State of Utah
(hereinafter called "WAC")
- and -
LA-NUR INC., a company incorporated under the laws
of the Province of Ontario
(hereinafter called "LA-NUR")
WHEREAS Nicholas Plessas, in trust ("NP") entered into an
agreement (the "Novatone Agreement") dated as of November 17,
1995 with LA-NUR in respect of certain rights and obligations
relating to a certain facial muscle stimulator product and a
certain trade mark;
AND WHEREAS the Novatone Agreement provides that NP may
assign its rights and obligations under the Novatone Agreement
provided that such assignee agrees to become bound by the terms
of the Novatone Agreement;
AND WHEREAS pursuant to an assignment agreement made
November 30, 1995, NP assigned its rights and obligations under
the Novatone Agreement to Mel Greenspoon, in trust for certain
unnamed beneficiaries (collectively, "MG");
AND WHEREAS MG desires to assign, and WAC desires to assume,
the rights and obligations of MG under the Novatone Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the mutual covenants and agreements contained herein, the sum
of One Dollar paid by each party hereto to each of the other
parties hereto and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by each
of the parties hereto), it is hereby agreed as follows:
<PAGE> 2
1. Assignment of Novatone Agreement. MG hereby assigns to WAC
all of MG's right, title, estate and interest in the covenants,
terms and conditions contained in the Novatone Agreement and all
benefits derived therefrom, and WAC hereby accepts such
assignment and WAC hereby agrees to be bound by and perform or
cause to be performed all the covenants, terms and conditions
contained in the Novatone Agreement irrespective of whether said
covenants, terms and conditions should have been performed prior
to the date of this Agreement. LA-NUR hereby accepts the
assignment constituted hereby.
2. Indemnification of MG. WAC hereby covenants and agrees, at
its expense, to indemnify, to defend and to save and hold MG
harmless from and against and in respect of any and all
obligations, commitments and liabilities of and claims against MG
(whether absolute, accrued or contingent) arising out of or in
any way connected with the non-performance or breach of WAC of
any of the obligations of MG under the Novatone Agreement and all
claims, demands, causes of action, actions, losses, damages and
expenses of every nature and kind for or in respect of or
relating thereto.
3. Enurement. This agreement shall enure to the benefit of and
be binding upon the parties hereto and their respective
successors and assigns.
4. Entire Agreement. This Agreement constitutes the entire
Agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements, understandings,
negotiations, commitments, conditions, representations,
warranties and undertakings.
5. Counterparts. This Agreement may be executed in several
counterparts, each of which so executed shall be deemed to be an
original, and such counterparts together shall constitute but one
and the same instrument.
6. Governing Law. This Agreement shall be construed,
interpreted and enforced in accordance with, and the respective
rights and obligations of the parties shall be governed by, the
laws of the Province of Ontario.<PAGE>
<PAGE> 3
IN WITNESS WHEREOF this agreement has been executed by the
parties hereto as of the date first above written.
Witness:/S/ Avi Ss. Greenspoon
By: /S/ Mel Greenspoon, In Trust
WINDSOR ACQUISITION CORP.
Per: /S/ Mel B. Greenspoon
LA-NUR INC.
Per: /S/ Rivqa Resnick
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GLOBESAT
HOLDING CORP. CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR END
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REF
ERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR YEAR
<FISCAL-YEAR-END> SEP-30-1996 SEP-30-1995 SEP-30-1994
<PERIOD-END> SEP-30-1996 SEP-30-1995 SEP-30-1994
<CASH> 14,744 6,547 18,199
<SECURITIES> 0 0 0
<RECEIVABLES> 0 0 0
<ALLOWANCES> 0 0 0
<INVENTORY> 4,712 0 0
<CURRENT-ASSETS> 19,456 6,457 18,199
<PP&E> 4,214 0 0
<DEPRECIATION> 350 0 0
<TOTAL-ASSETS> 93,820 33,359 43,199
<CURRENT-LIABILITIES> 209,897 1,000 1,000
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 5,143,676 300,000 164,130
<OTHER-SE> 0 0 0
<TOTAL-LIABILITY-AND-EQUITY> (116,077) 32,359 42,199
<SALES> 0 0 0
<TOTAL-REVENUES> 0 437 2,000
<CGS> 0 0 0
<TOTAL-COSTS> 247,000 44,179 20,000
<OTHER-EXPENSES> 0 0 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 8,744 0 0
<INCOME-PRETAX> (255,744) (43,742) (18,000)
<INCOME-TAX> 0 0 0
<INCOME-CONTINUING> (255,744) (43,742) (18,000)
<DISCONTINUED> 0 2,000 (92,000)
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> (255,744) (41,742) (110,000)
<EPS-PRIMARY> (.07) (.20) (.67)
<EPS-DILUTED> (.05) (.20) (.67)
</TABLE>
TERM PROMISSORY NOTE
US$75,000
January 18, 1996
Due: January 17, 1997
FOR VALUE RECEIVED, the undersigned promises to pay to or to
the order of JAVLEE INVESTMENTS LIMITED the sum of Seventy Five
Thousand Dollars ($75,000.00), plus interest as calculated below,
in lawful money of the United States of America.
The principal amount outstanding under this note from time
to time shall bear interest at the variable per annum reference
rate of interest for United States dollar loans made by The Bank
of Nova Scotia in Canada (as announced and adjusted by such bank
from time to time), calculated monthly in arrears.
At any time and from time to time any portion of the
principal outstanding hereunder may be prepaid without any notice
being given to the Holder and without any bonus or penalty being
paid to the Holder provided that all amounts, whether on account
of principal or interest, which are due and payable hereunder
have been paid. Any such prepayment shall be applied to
principal instalments in inverse order of maturity.
The undersigned hereby waives diligence, presentment,
demand, protest, and notice of any kind in enforcement of this
note and hereby agrees and consents to all extensions and
renewals thereof, without notice.
This note and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by
the laws of the Province of Ontario.
WINDSOR ACQUISITION CORP.
Per: /S/ Avi S. Greenspoon
Path: I:\W\WIND-ACQ\54375\WACUTAH\NTEPROM1.ASG
TERM PROMISSORY NOTE
US$50,000
January 18, 1996
Due: January 17, 1997
FOR VALUE RECEIVED, the undersigned promises to pay to or to
the order of MEL B. GREENSPOON (the "Holder") the sum of Fifty
Thousand Dollars ($50,000.00), plus interest as calculated below,
in lawful money of the United States of America.
The principal amount outstanding under this note from time
to time shall bear interest at the variable per annum reference
rate of interest for United States dollar loans made by The Bank
of Nova Scotia in Canada (as announced and adjusted by such bank
from time to time), calculated monthly in arrears.
At any time and from time to time any portion of the
principal outstanding hereunder may be prepaid without any notice
being given to the Holder and without any bonus or penalty being
paid to the Holder provided that all amounts, whether on account
of principal or interest, which are due and payable hereunder
have been paid. Any such prepayment shall be applied to
principal instalments in inverse order of maturity.
The undersigned hereby waives diligence, presentment,
demand, protest, and notice of any kind in enforcement of this
note and hereby agrees and consents to all extensions and
renewals thereof, without notice.
This note and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by
the laws of the Province of Ontario.
WINDSOR ACQUISITION CORP.
Per: /S/ Avi S. Greenspoon
Exhibit 21 - List of Subsidiaries
Windsor Acquisition Corp. (Utah)
Globesat Infrastructure Technologies Corp. (Utah)
