SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Under Section 12(b) or 12(g) of the Securities Exchange
Act of 1934
ULTIMISTICS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2254390
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Suite 1000, 230 Park Avenue, New York, New York 10169
(Address of principal executive offices)(ZIP Code)
Issuer's telephone number: (212) 309-8707
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act:
COMMON STOCK, $.00001 PAR VALUE
Name and address of person to receive
correspondence:
Frederic G. Hassid
Suite 1000
230 Park Avenue
New York, New York 10169
Telephone (212) 309-8707 FAX (212) 909-0587
Copy to:
Jackson L. Morris, Esq.
3116 West North A Street
Tampa, Florida 33609
Telephone (813) 874-8854 FAX (813) 873-9628
Exhibit Index is located at page 18
<PAGE>
TABLE OF CONTENTS
Page
Item 1. Business 3
Item 2. Financial Information 6
Item 3. Properties 9
Item 4. Security Ownership of Certain
Beneficial Owners and Management 12
Item 5. Directors and Executive Officers 14
Item 6. Executive Compensation 15
Item 7. Certain Relationships and Related
Transactions 15
Item 8. Legal Proceedings 15
Item 9. Market Price of and Dividends on the
Registrant's Common Equity and
Related Stockholder Matters 15
Item 10. Recent Sales of Unregistered Securities 16
Item 11. Description of Registrant's Securities
to be Registered 17
Item 12. Indemnification of Directors and Officers 17
Item 13. Financial Statements and Supplementary Data 18
Item 14. Changes In and Disagreements With
Accountants on Accounting and
Financial Disclosure 18
Item 15. Financial Statements and Exhibits
(including index) 18
Signatures 19
Exhibits
2
<PAGE>
Item 1. Business.
The Registrant, Ultimistics Inc., (the "Company") was incorporated in
Delaware in 1988 and issued twenty-five million shares of Common Stock to Texas
American Group, Inc., the Company's founder, at a total price of $250. That same
year, the Company registered and made a public offering of 4,757,199 shares of
Common Stock, including an aggregate of 4,757,199 shares of its common stock and
equal number of Class A, B and C warrants for distribution to the stockholders
of Texas American Group, Inc., as a blank check company, registered with the
Securities and Exchange Commission on Form S-18 in 1988. The public offering was
made in the form of a dividend in kind to the stockholders of Texas American
Group, Inc. of Dallas, Texas, a firm which specialized in the creation of
publicly owned "blank check" or "blind pool companies" though a mechanism know
as a "dividend spin-off". The Company did not make any acquisitions of an
opportunity or business at that time. In 1989, Class A warrants were exercised
for the purchase of 2,381 shares at a price of $746. In 1989, the Common Stock
of the Company which was then issued and outstanding was stock split in a ratio
of two shares for each one share and the Company received a contribution of
23,398,267 shares from a controlling stockholder (affiliates of the Texas
American Group, Inc.) for cancellation in anticipation of a change in management
control of the Company to certain French nationals and residents in connection
with an agreement pursuant to which a majority of the Company's issued and
outstanding common stock was expected to be purchased by Vestin, Inc., a
dormant, privately owned Delaware corporation. Vestin, Inc. was organized by and
for the purpose of acquiring Imdescome, S.A., a French company which
manufactured a pneumatic tire sealant at facilities in France and distributed
that product in Europe. The Company was to be merged with Vestin, Inc., a three
party transaction which would have resulted in the surviving company owning the
sealant product, manufacture and distribution and being a publicly traded
company in the United States. Imdescome, S.A.'s controlling stockholders and
management failed to complete either the acquisition of the Company's stock ,
which later was terminated, or acquisition of the sealant business. During this
period, the Company remained dormant without any business. All of the
unexercised warrants expired in May 1989 and December 1990. In July 1994, the
Common Stock of the Company which was then issued and outstanding was reverse
stock split in a ratio of one share for each ten shares. In August 1994, the
Company sold twenty million shares of its Common Stock for $20,000 to Canadian
and French investors, who were not previously affiliated with the Company, some
of whom became the Company's management, for the purpose of making one or more
acquisitions of consumer products technologies. The Company's headquarters were
relocated to Vancouver, B.C. The Company entered into an agreement for
acquisition from a non U.S. transferor of a technology involving primarily a
device, described as an "Earshield", to be attached to a telephone receiver to
conform the receiver to the shape of the user's head surrounding his or her ear
to exclude loud ambient noises which could interfere with the user's hearing;
but, the Company defaulted on its obligations under the the agreement, which
resulted in the loss of the technology to the transferor, and reverted to a
dormant status. The four million shares remain outstanding in order to settle
litigation which was threatened by the transferor of the technology. In August
1995, the Company completed a second reverse stock split in a ratio of one share
for each ten shares outstanding and sold twenty million shares of Common Stock
for $20,000 to a small group of foreign investors for the purpose of continuing
efforts to make an acquisition of an operating business or viable technology and
management of the Company was transferred to the representatives of new
investors. In November 1995, the Company acquired 99.5 percent of a French
company, SCI Barentin, from Skyguards, S.A., a non affiliated company, in
exchange for 3,900,000 shares of its Common Stock. In March 1996, the Company
issued an additional 2 million shares of its Common Stock to Skyguards, S.A. to
cover the value of the Evreaux and Gap properties which were supposed to be
divested by one of SCI Barentin's subsidiaries before its acquisition by the
Company, but which were not. SCI Barentin owns and operates real estate in
France composed of residential rental apartments, a rental
warehouse-distribution facility, residential cooperative housing properties held
for sale and a rental retail property. All of the Company's properties are owned
by its subsidiaries and are managed by independent rental or sales agents with a
resulting minimal requirement for Company management personnel. The original
promoters and organizers of the Company have not been involved in management for
more than the past five years.
3
<PAGE>
The Company's headquarters are located at Suite 1000, 230 Park Avenue, New
York, New York 10169 and its telephone number at that address is (212) 309-8707.
The Company does not intend (i) to issue securities which have priority
over the Common Stock, (ii) to borrow money other than in mortgage loans to
finance the acquisition of additional properties or refinance existing
properties, (iii) to make loans to other persons (personal, business mortgage or
otherwise), (iv) to underwrite the securities of any other company of business
or (v) to repurchase or otherwise reacquire its own Common Stock. In the event
the Company borrows money to finance or refinance real estate properties, the
Company expects to borrow from institutional or private lenders up to sixty
percent of the appraised value or purchase price of the particular property or
to negotiate for the seller to take back a first or second mortgage. The Company
intends to seek interest at the best available rate, a maximum amortization term
and maximum maturity. The Company intends to identify additional real estate
properties which can be acquired for a combination of the Company's Common Stock
valued at the public market price in the United States securities market and
mortgage loans. The Company expects to seek primarily residential rental
apartment buildings and properties, but will consider commercial rental
properties which can be acquired at prices which the Company believes in the
particular case to represent good values for the Company. Any such properties
may require moderate to extensive renovation. The Company does not have any
properties under consideration at the present time. The Company is open to the
possibility of acquisition of other privately owned companies which are engaged
in businesses other than the real estate business through purchase of stock as
majority or wholly owned subsidiaries or the Company or merger. The Company has
not set any policy regarding the type of businesses which could be considered,
other than businesses which in general would appear to have significant profit
potential in the future. The Company does not have any such businesses under
consideration at the present time. The Company has not adopted any policies or
guidelines with respect to the foregoing matters, except as set forth herein.
The Company's position on all of the foregoing matters can be modified by the
Board of Directors without the approval of the stockholders. The Company intends
to send annual and quarterly reports to its stockholders. The annual reports
will contain audited financial statements. All such reports are expected to
include the information which is required by the reporting requirements of the
Securities Exchange Act of 1934, as amended. The Company will send copies to its
annual report on Form 10-K to stockholders upon request for a fee of $.10 per
page and will advise stockholders of the procedures for obtaining all of the
Company's reports filed with the Commission on the "EDGAR" system.
4
<PAGE>
The Company may acquire additional real estate, primarily residential
apartment buildings and properties for the low to moderate income families. All
such real estate is expected to be in France, although the Company may diversify
its property acquisitions throughout France. All of the Company's real estate
properties, both existing and future, will be operated by an independent
management company. Future acquisitions will be financed with any combination of
the Company's cash, the Company's Common Stock issued to the seller at a price
expected to be related to the current public market price of the shares in the
U.S. securities market, and mortgage loans, provided by either the seller or
institutional or private lenders. In particular cases, the Company may need to
place more than one mortgage loan against a particular property, but expects the
number of mortgages to not exceed to or the total loan amount of all mortgages
not to exceed sisty percent of the appraised value of the particular property. A
single mortgage loan may be secured by more than one property. In the event any
of the Company's properties significantly appreciate in value, the Company may
obtain an additional mortgage on the properties or refinance them for an
increased amount. The Company, with the assistance of consultants engaged in
each case for the purpose, will evaluate both the current and future income
potential of a property to be acquired and its potential for capital
appreciation. The emphasis on income versus capital appreciation may vary from
property to property. The Company does not expect to invest more than thirty
percent of its total assets in a single property or group of related properties.
The Company does not have any other specific material policies regarding its
present or future real estate activities. The Company does not intend to invest
in real estate mortgages or to purchase securities of other privately owned or
publicly owned companies engaged in real estate activities; provided, that the
Company may from time to time acquire real estate properties by means of the
acquisition of all of the equity securities of a privately owned company which
owns a particular property. The price paid will depend upon a financial analysis
of the underlying real property, its physical condition, other relevant factors
and its potential, without regtard to the age of the property. The Company does
not intend to invest in securities of other companies, other than possible
acquisitions of common stock in privately owned companies as majority or wholly
owned subsidiaries. The Company has not identified a particular industry group
or country in which it may or will not acquire a subsidiary. Any such
acquisition would be made in exchange for the Company's Common Stock, which
could represent either a minority or majority of stock ownership in the Company.
The Company anticipates that any acquired business will in all probability be
relatively new and in the development stage with a history of losses or have
minimal income. The market potential for the acquired company's products or
services is expected to be a more important consideration than results of
historic operations.
5
<PAGE>
Item 2. Financial Information.
Capitalization
The following table sets forth the capitalization of the Company at
December 31, 1995. This table should be reviewed in conjunction with the
financial statements of the Company and the notes thereto included elsewhere in
this Registration Statement.
<TABLE>
December 31, 1995 June 30, 1996
<S> <C> <C>
Long term debt $ 9,350,034 $8,662,984
Stockholders' equity
Common stock, $.00001 par value
100,000,000 shares authorized
25,565,551 and 28,565,551 shares
issued and outstanding 266 286
Preferred stock, $.00001 par value
50,000,000 shares authorized
none issued and outstanding -0- -0-
Additional paid in capital 29,172,653 29,172,633
Cumulative translation adjustment 3,113,676 2,758,028
Accumulated deficit ( 1,290,909) (1,818,645)
Total stockholders' equity 30,995,686 30,112,302
Total capitalization $40,345,720 $38,775,286
</TABLE>
Selected Financial Data
The following table sets forth selected financial data about the Company
for the periods and at the dates indicated. Selected financial information for
the years ended at December 31, 1991 and 1992 may be potentially misleading
in that the acquisition of the Company's properties by the Company's
subsidiaries did not occur until 1994. This table should be reviewed in
conjunction with the financial statements of the Company and the notes thereto
included elsewhere in this Registration Statement.
<TABLE>
<CAPTION>
Year Ended December 31 Six Months ended June 30
1995 1994 1993 1996 1995
<S> <C> <C> <C> <C> <C>
Income statement data:
Total revenues $ 5,050,445 $ 2,311,523 $ 1,245,580 $ 2,525,335 $ 3,326,540
Cost of goods sold -0- -0- -0- 1,149,074 1,253,864
Gross profit 3,377,905 2,311,523 1,245,580 1,376,261 2,072,676
General and
administrative expense 1,383,846 1,646,796 736,386 894,210 1,492,645
Interest expense 836,787 767,283 254,607 417,219 409,212
Net income (loss) ( 381,577) ( 909,332) 106,741 ( 527,736) ( 622,004)
Net (loss) per share ( 0.02) - - ( .02) n/r
Weighted average common
shares outstanding 24,613,915 - 27,609,507 -
</TABLE>
(table continued on following page)
6
<PAGE>
<TABLE>
<CAPTION>
December 31, December 31, June 30, June 30,
1995 1994 1996 1995
<S> <C> <C> <C> <C>
Balance sheet data:
Working capital $ 1,111,538 $ 384,976 $ 934,717 $ 1,203,479
Total assets 43,542,287 41,794,619 41,871,108 44,697,157
Stockholders' equity 30,995,686 28,723,697 30,112,302 31,497,033
</TABLE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations:
The Company, through its 99.5 percent owned subsidiary, SCI Barentin
("Barentin"), owns ninety eight percent of SCI Residence Lamarck ("Lamarck").
SCI Residence Lamarck directly owns eleven rental apartment buildings containing
a total of 580 apartment units. Five of these buildings are located in Barentin,
France, containing 193 apartment units. The six buildings located in LeHavre,
France contain 387 apartment units. The buildings in LeHavre were previously
owned by SARL Societe Generale D'Investissements ("SGI"). SGI was merged into
SCI Residence Lamarck in 1994 by the previous owner and SGI was subsequently
dissolved. SCI Residence Lamarck owns a commercial warehouse/distribution
facility in Evreaux, France. SCI Residence Lamarck, through its wholly owned
subsidiary, SNC Gap, owns two commercial rental buildings in Gap, France. In
1994, the Company began two cooperative apartment buildings in Paris, France and
is now approximately half way through the sales phase of these projects.
The eleven residential apartment buildings and the warehouse distribution
facility are managed by an independent international property manager, Cabinet
DUFY from its offices in LeHavre. Cabinet DUFY manages these properties under
written one year agreements which automatically renew July 1 of each year unless
canceled by one of the parties. The commercial buildings in Gap and cooperative
housing units in Paris are managed under an informal agreement by Financiere de
Chazelles, a company controlled by an affiliate of the Company.
The following discussion of the results of operations for the years ended
December 31, 1993, 1994 and 1995 is on a pro forma basis, as if the Company had
owned SCI Barentin, SCI Residence Lamarck and SGI since January 1, 1993 and SNC
Gap since January 1, 1994.
Results of operations of the consolidated companies:
Years ended December 31, 1993, 1994 and 1995. Net revenue was $1,245,580,
$2,311,523 and $3,377,905 for the years ended December 31, 1993, 1994 and 1995,
respectively, representing increases of 85.6 percent in 1994 over 1993 and 46.1
percent in 1995 over 1994. Management attributes the 1994 increase to
acquisition of the commercial buildings in Evreaux and Gap at the beginning of
1994 and the general increase in rent per unit of the eleven apartment buildings
also accounted for the increase. Barentin, through Lamarck, acquired the
cooperative housing projects in Paris in early 1994 and began the razing and
rebuilding of the projects, which was overseen by Chazelles. The 1995 increase
was due primarily to the ten percent change in the French franc to the U.S.
dollar exchange rate.
7
<PAGE>
Cabinet DUFY's contract sets their fee at fifteen percent of net rent
collected. The services by Chazelles for the cooperative buildings accounted for
the $189,000 fee paid to it in 1994.
Interest expense remained relatively flat over the periods presented in
relationship to the amount of debt outstanding, as stated in U.S. dollars. When
compared in French francs, however, interest expense declined in relationship to
the amount of debt outstanding because when Barentin acquired Lamarck, the
acquisition agreement called for the then existing debt to be paid off. The old
debt was at rates of 10.5 percent to twelve percent. Barentin, through Lamarck,
acquired new debt at 8.25 percent, which was used to acquire and develop the
Paris properties.
The law suit expense was a result of a suit by the French Treasury for
collection of back taxes owed by the party who from whom Barentin bought
Lamarck. Lamarck paid these taxes in the amount $300,862 in both 1994 and 1995.
The back taxes were paid in full in those years and will not be a recurring
item.
Six Months ended June 30, 1995 and 1996:
Net revenue was $2,072,676 and $1,376,261 for the six months ended June 30,
1995 and 1996, respectively representing a decrease of 33.6%. The decrease
resulted from the sale of fewer cooperative units in 1996 and that the units
available for sale in 1996 were the lesser desirable., which resulted in lower
selling prices. There is only one unit left for sale at June 30, 1996. Rental
revenue for 1996 was lower in US dollars, but not in French Francs. The change
was due to the change in the exchange rate.
Operating expenses as a whole were 32.4% lower due to fewer cooperative
units available for sale and the change in the exchange rate.
Liquidity and capital resources:
The Company has relied historically on the sale of its common stock to
finance its operations. The related subsidiaries of the Company have relied
historically on internally generated funds and borrowing from financial
institutions to finance operations.
At December 31, 1993, the Company (on a pro forma basis) had a working
capital deficit of $813,000. At December 31, 1994 and 1995, respectively, had a
working capital excess of $385,000 and $1,112,000.
At various times during 1994, Barentin borrowed an aggregate of
approximately $7,205,000 from Credit Agricole du Nord, one of the five largest
French banks. these loans were used to acquire and develop the cooperative
apartment projects in Paris. These loans are collateralized by the eleven
apartment buildings in Barentin and Le Havre. the company also borrowed
approximately $288,000 from Bank Cantonale de Beneve for the same purposes.
During 1995, Barentin sold approximately half of the cooperative apartment
units in the Paris projects. The Company expects that it will be able to
complete the sell-out of the remaining units in 1996, although there is no
assurance that this will occur. Based on the projected selling prices of the
remaining units of $2,200,000, the Company would record a gain of approximately
$250,000 upon selling these units. The sell-out would also provide approximately
$2,200,000 in working capital for the Company with which to either pay down debt
or reinvest. The Company has not determined which course it will take.
The present rental operations of the Company will provide sufficient cash
flow for the foreseeable future. The leases on the commercial properties in Gap
are up for renewal in July 1996, and the Company has received assurances that
Sodiga and L'orangerie desire to renew the leases.
8
<PAGE>
As the current fair market values of the properties owned by the company
are approximately $45,000,000 (excluding the Paris projects) and the existing
debt is approximately $9,750,000, or twenty two percent of value, the company
believes it has sufficient ability to raise additional funds for future
investment should it so desire.
At June 30, 1995 and 1996:
At June 30, 1995, the Company had working capital of $1,203,000 and
$935,000 at June 30, 1996. During the first six months of 1996, The Company sold
all but one of the remaining cooperative units. The Company expects to sell the
last unit during the third quarter. The Company does not expect to record a
significant gain on the sale of this unit.
The present rental operations of the Company will provide sufficient cash
flow for the forseeable future. As the current fair market values of the
properties owned by the company are approximately $45,000,000 and existing debt
is approximately $9,058,000, or twenty percent of value, the Company believes it
has sufficient ability to raise additional funds should it so desire or need.
Item 3. Properties.
The Company owns rental real estate properties and cooperative housing
units held for sale in France.
Apartment properties located in Le Havre and Barentin, France. These
properties consists of 580 residential rental apartment units situated in eleven
apartment buildings on ten separate properties. The apartment buildings are for
low to moderate income families. One of the properties is located in Le Havre,
constituting of 387 units in six apartment buildings. The rents of the tenants
in one of the buildings in Le Havre is subsidized by the city government for its
employees. The apartment buildings range from five to thirteen stories. The
other of the properties is located in Barentin, constituting of 193 units in
five apartment buildings. The apartment buildings are four and five story. The
construction is reinforced concrete. The buildings are approximately thirty
years old and have been well maintained, with landscaped grounds. The occupancy
rate has been approximately ninety eight percent during the last fiscal year. Le
Havre is a port city located on the Normandy (Atlantic) Coast of France.
Barentin is approximately fifty miles east of Le Havre. The properties are
managed by an independent, international real estate management company, Cabinet
DUFY, under an annual agreement which renews automatically unless either party
determines to terminate.
Commercial warehouse in Evreaux, France. The Company owns a commercial
warehouse-distribution facility composed of 4,500 square meters in Evreaux. The
facility is occupied by Genedis, a meat and grocery distributor. Genedis has a
nine year lease which is cancelable every third year. The rent is adjustable in
April of every three years with approximately six years remaining in the entire
lease. The building is steel frame covered by steel siding, approximately seven
years old and well maintained. Evreaux is approximately fifty miles southeast of
Le Havre, France. The property is located in the outskirts of the city. This
property is managed by Cabinet DUFY on a written annual agreement.
Retail buildings in Gap, France. The Company owns a commercial rental
property composed of two buildings, both occupied under a single lease which
expires in July 1996. One building of approximately 1,800 square meters is for
use as a grocery store operated by Sodiga, a large chain grocery company, under
a sublease. Sodiga has indicated an interest in leasing the property directly
from the Company at the expiration of the current lease. The other building is
occupied by two tenants, one of whom operates a gas station and the other of
whom operates a cafeteria under the name, "L'orangeraie". L'orangeraie has also
indicated an interest in continuing its lease directly with the Company. Gap is
a winter tourist destination about fifty miles south of Grenoble, France, at an
entrance to a mountain pass in the French Alps.
Cooperative apartments in Paris, France. The Company owns two residential
cooperative apartment building projects. One of the buildings, located at 135
avenue Parmentier, is for upper middle income families and the other, located at
23 rue de Lappe, is for middle income families. Approximately half of the units
have been sold to individual purchasers with five remaining for sale in
Parmentier and three units remaining in Lappe. Both properties are primarily
9
<PAGE>
reinforced concrete construction. The sales program and maintenance of these
properties are managed by Financiere de Chazelles, a management company owned by
an affiliate of the Company.
The Company believes that each of its properties is suitable and adequate
for rental or sale, as the case may be, in its market area and rental or sale
price range. The Company does not have any plans for renovation, improvement or
development of its properties, other than routine maintenance and repairs. The
Company believes that each of its properties is adequately insured against all
risks for which insurance is customarily carried by owners of properties of
their respective natures. The Company's subsidiaries hold the French equivalent
of fee title to their respective properties. The following table sets forth
information about the mortgage on each of the Company's properties. (June 30,
1996 exchange rate used).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Property Principal Interest% Payment Maturity Balloon Prepayable
LeHavre
and
Barentin $7,182,318 8.25% $75,314/mo 01/2009 $0 Yes (1)
Evreaux $310,529 7.2% $5,590/qtr 03/2010 $310,529 Yes (1)
Gap $1,564,725 8.5% $16,970/mo 12/2008 $0 Yes (1)
Paris $0
</TABLE>
(1) Normal prepayment provisions with no penalty.
The following table sets forth the average occupancy rate based upon
percent of rentable units and effective average rental rate per apartment unit
or per square foot of commercial space of each of the Company's rental
properties for each of the last three years ended December 31, 1995.Since that
date, the average occupancy rate and rental rate per unit or square foot for
each property has remained substantially the same and is expected to be the same
for the entire year of 1996.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Property 1993 1994 1995
LeHavre Occupancy 91% 92% 91%
Rental/unit $205 $226 $246
Barentin Occupancy 97% 97% 97%
Rental/unit $180 $199 $217
Evreaux Occupancy 100% 100% 100%
Rental/year $93,291 $102,881 $226,366
Gap Occupancy 100% 100% 100%
Rental/year $188,142 $207,481 $226,366
</TABLE>
10
<PAGE>
The rentals for the residential apartment properties in LeHavre and
Barentin are annual and contain provisions which are customary in
residential apartment leases in France and the United States. The following
table sets forth selected information about the current rents and leases by
tenant or class, percentage of annual gross rent for each property or tenant and
real estate taxes for each property.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Property Tenant Sq. meters Annual rent Expiration R.E. Tax
LeHavre High 77 $ 3,213 various $189,224
Low 59 $ 2,500 - -
Barentin High 77 $ 3,530 various $101,829
Low 77 $ 3,475 - -
Evreaux 3,600 $ 112,245 2000 $ 68,861
Gap 2,651 $ 226,366 2000 $ 27,181
</TABLE>
The following table sets forth the general competitive conditions for the
type of property in the geographic area where each of the Company's properties,
other than its executive offices, are located.
Property Type of property General competitive conditions
LeHavre Residential Apartment Residential apartments are in inadequate
supply based upon limited new construction
in recent years. The Company has enjoyed
excellent occupany.
Barentin Residential Apartment Residential apartments are in inadequate
supply based upon limited new construction
in recent years. The Company has enjoyed
excellent occupany.
Evreaux Commercial Warehouse Commercial warehouses are in inadequate
supply based upon limited new construction
in recent years. The Company has enjoyed
excellent occupany.
Gap Retail Retail complexes are in inadequate
supply based upon limited new construction
in recent years. The Company has enjoyed
excellent occupany.
Paris Cooperative Apartment Residential cooperatives are in inadequate
supply based upon limited new construction
in recent years. The Company has enjoyed
excellent sales.
Sales
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<PAGE>
The following table sets forth certain information about depreciation of
the Company's rental properties under French tax law. (June 30, 1996 Exchange
rate used).
Property Current basis Depreciation rate Method Claimed Life
LeHavre
and Barentin $34,196,369 $849,161/yr Straight line 40 Years
Evreaux $ 444,267 $ 11,847/yr Straight line 40 Years
Gap $ 3,281,295 $ 84,862/yr Straight line 40 Years
Executive office in New York City. The maintains its executive office in a
rental office suite facility in New York City on a monthly basis.
Property management. The properties in Le Havre, Barentin and Evreaux are
managed under an annual agreement between the Company and Cabinet DUFY. Cabinet
DUFY is a subsidiary of Groupe UFFI, an international property manager with
twenty one offices in six countries (172 offices in France) which manages
approximately 425,000 apartment units and 5.5 million square meters of
commercial properties. There is no affiliation between the Company and either
Cabinet DUFY or its parent company. The properties in Gap and Paris are managed
by Financiere de Chazelles which is owned by Yves-Victor Uzan, a manager of
Skyguards, S.A., the firm from which the Company purchased SCI Barentin and, as
a result of that transaction, one of the Company's largest stockholders. See,
Item 7. Certain Relationships and Related Transactions.
Personnel. The Company employs two executive officers. These executive
officers devote only a small part of their working time to the business and
affairs of the Company and are engaged in other unrelated business activities in
the United States on virtually a full time basis. The Company relies on a
property management firm, Cabinet DUFY, for all services related to the
operation and maintenance of its real estate properties. The Company intends to
engage consultants as needed to evaluate and advise the Board of Directors
regarding acquisitions of real estate properties and of other businesses. The
Company does not anticipate requiring additional personnel.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The names of directors, officers and each other person who owns legally and
beneficially more than five percent of the Company's issued and outstanding
Common Stock at March 31, 1996, their respective addresses, the number of shares
which each owns and the percentage of the Common Stock represented by such
shares is set forth in the following table.
12
<PAGE>
Name and Address Number of shares* Percentage
Frederic G. Hassid (1) none
Lubov E. Ulianova (2) none
Yves-Victor Uzan (3)
71 rue du FBT St. Honore 1,200,000 4.20%
75008 Paris, France 2,400,000 (3) 8.40%
Skyguards, SA 5,900,000 (4) 20.65%
15 boulevard Royal
l-2449 Luxembourg
Sutton Reinsurance 2,800,000 9.80%
c/o Johnson & Higgins Ltd.
Whitepark House
White Park Road
Bridgetown, Barbados
*Both legal and beneficial ownership unless otherwise indicated.
(1) President and director. Address is Suite 1000, 230 Park Avenue, New York,
New York 10169.
(2) Director. Address is Suite 1000, 230 Park Avenue, New York,
New York 10169.
(3) Includes 1,200,000 shares legally held of record by each of Stephane Uzan,
Yves-Victor Uzan's son, whose address is 24 rue de Chazelles 75017 Paris, France
and Yakimoto Investment Fund, on behalf of which Yves-Victor Uzan has signature
authority, whose address is International Building, Bank Lane, Nassau, Bahamas.
Mr. Uzan has advised the Company that he does not have any legal or beneficial
ownership interest, directly or indirectly, in Yakimoto Investment Fund.
(Footnotes continued on following page.)
13
<PAGE>
(4) Yves-Victor Uzan has signature authority on behalf of Skyguards, S.A., a
Luxembourg company. Mr. Uzan has advised the Company that he does not have any
legal or beneficial ownership interest, directly or indirectly, in Skyguards,
S.A.
Item 5. Directors and Executive Officers.
The names, ages and terms of office of directors and executive officers of
the Company and the key executive officers and employees of the Company's
subsidiaries are set forth in the following table:
Director/
Name Age All Positions With Company or Subsidiary Officer Since
Frederic G. Hassid 62 Director and President of the Company 1996
Lubov E. Ulianova 27 Director of the Company 1995
Directors of the Company generally are elected at the annual stockholders'
meeting and hold office for one year and until their successors have been
elected and qualified. In recent years, however, the Company has not held annual
meetings, due its dormant status, and new directors have been elected by the
incumbent directors to fill vacancies on the board arising from resignations of
incumbent directors in connection with changes in control (See, Item 1.). The
term of office of each director expires at the next annual meeting of
stockholders following his election and when his successor is elected and
qualified. The executive officers of the Company and of the subsidiaries serve
at the will of the board of the Company or of the subsidiary, as the case may
be. The Company does not pay board fees to its directors, but may reimburse
out-of-pocket expenses incurred in attending Company functions. The board of
directors does not have any committees. There is no agreement, understanding or
arrangement between either of them and Mr. Uzan regarding their management of
the Company.
Frederic G. Hassid is a director and the president of the Company. From
1987 to the present, Mr. Hassid has been the president of Architectural
Investments, Inc., a firm which specializes in renovation and remodeling of
hotels, motels and houses and in commercial building management, in the Miami,
Florida area. Mr. Hassid intends to continue as full time president of
Architectural Investments, Inc. and expects to devote less than his full time to
the business of the Company. Although it is not possible at the present to
estimate the number of hours per month that the Company's business will require
of Mr. Hassid, the nature of the Company's operations and the use of outside
management companies is expected to significantly limit the amount of time
required for Mr. Hassid to perform his duties as president of the Company. Mr.
Hassid became a naturalized United States citizen in 1991.
Lubov E. Ulianova is a director of the Company. Currently, Ms. Ulianova is
a student at the English Studish and Alliance Francaise in New York City. From
1993 to 1995, she attended the Ecole Florent in Paris, France and worked as a
model for the YOU agency in Paris. From 1990 to 1993, Ms. Ulianova worked as a
model for the Why Not agency in Milan, Italy. Ms. Ulianova studied computer
technology at Moscow University. Ms. Ulianova is Swiss citizen currently in the
U.S. on a student visa.
14
<PAGE>
Item 6. Executive Compensation
During the three year period ended December 31, 1995 and the period from
that date to the date of this Registration Statement, the Company has not paid
any compensation to its chief executive officer during each of the last three
fiscal years and has not paid annual compensation to any officer of the Company
and its subsidiaries exceeding $100,000 per year.
Item 7. Certain Relationships and Related Transactions
Financiere de Chazelles, a management company owned by an affiliate of the
Company, Yves Uzan. Mr. Uzan is neither a director nor officer of the Company;
but, he owns directly and beneficially controls a total of 27.8 percent of the
Company's issued and outstanding common stock. Financiere de Chazelles provides
monthly accounting for the Le Havre and Barentin properties and oversight of the
independent management company, Cabinet DUFY, which manages the properties in Le
Havre, Barentin and Evreaux, management of the commercial property in Gap and
oversight of the sales program for the cooperative housing units in Paris. The
offices of Financiere de Chazelles are located in Paris. At the date of this
Registration Statement, there is no formal agreement between the Company and
Financiere de Chazelles for the services of the latter to the Company. In 1993
and 1994, the Company did not pay a management fee to Financiere de Chazelles
and in 1995 paid a management fee of $125,600 and owes Financiere de Chazelles
$144,279 at December 31, 1995. Management believes that the management fee paid
to Financiere de Chazelles is reasonable and substantially equivalent to the
management fee which would be charged for the same services by an independent
management company.
Item 8. Legal Proceedings.
The Company is not engaged in any legal proceedings and is not aware of any
unasserted claims.
Item 9. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.
The Company's common stock trades under the stock symbol "ULTS" on the OTC
Bulletin Board operated by the National Association of Securities Dealers, Inc.
The Company has been informed that two registered securities brokers, William V.
Frankel & Company, Inc. and Hill, Thompson & Company, are making a market in the
Company's freely trading shares of Common Stock at the date of this Registration
Statement. None of the entities or representatives, and none of the individuals
known by the Company's officers to be associated persons with any such broker,
has an affiliation, direct or indirect, with the Company. The following table
sets forth the approximate high and low bid prices for the Company's Common
Stock for each quarter in which management believes there was an "established
public trading market" for the Common Stock during the two fiscal years
preceding and for each full quarter subsequent to such last full fiscal year but
prior to the date of this registration statement. These bid prices are
inter-dealer prices without retail markup, mark-down or commission, and may not
represent actual transactions. These bid prices have been obtained from the
Research Department of the National Association of Securities Dealers, Inc.,
beginning the date the Company's Common Stock was
15
<PAGE>
admitted to trading in that medium. Trades prior to that date, if any, would
have occured in the interdealer market published in the "pink sheets". The
Company believes no transactions occurred in the over-the-counter market during
the period beginning January 1, 1993 and ending August 31, 1994.
<TABLE>
<S> <C> <C>
Quarter ended ................................ High bid(1) Low bid(1)
March 31, 1994 ............................... * *
June 30, 1994 ................................ * *
September 30, 1994 ........................... * *
December 31, 1994 (1) ........................ 12.50 5.10
March 31, 1995 (1) ........................... 12.50 12.50
June 30, 1995 (1) ............................ 10.00 3.75
September 30, 1995 (1) ....................... 9.00 3.75
December 31, 1995 ............................ 13.00 3.00
March 31, 1996 ............................... 10.50 5.50
June 30, 1996 ................................ 5.75 3.0625
September 30, 1996 ........................... 5.00 3.625
</TABLE>
*No established public trading market. Quotations during these quarters may have
been limited or sporadic. During the two full fiscal years ended December 31,
1995, the Company did not provide information to brokers, nor to management's
knowledge did brokers have such information available, required by Rule
15(c)(2)(11) until the time application was made for admission to quotation on
the OTC Bulletin Board.
Prices prior to October 1, 1995 have been adjusted for the ten to one reverse
stock split.
At April 30, 1996, there were approximately 929 registered holders of the
Company's Common Stock.
The Company has not paid any dividends on its Common Stock and does not
intend to pay any cash dividends in the immediate future. Payment of dividends
is within the discretion of the board of directors. The Company may consider
paying cash dividends on its Common Stock in the event the Company's profits and
net cash flow from operations provide a source for payment of dividends. The
Company's operations are in France and, accordingly, any profit for the payment
of dividends will be generated in France. Management is not aware of any
currency transfer restrictions under French law which impose limitations on
transfer of funds from France to the United States with which the Company could
pay dividends. Payment of dividends, when and if declared, is within the
discretion of the Company's board of directors.
Item 10. Recent Sales of Unregistered Securities.
The following table sets forth for the past three years the date, title and
amount of securities sold without registration under the Securities Act of 1933,
as amended, the persons or class of persons to whom the securities were sold,
the total offering price and underwriting discounts and commissions of
securities sold for cash, the type and amount of non cash
16
<PAGE>
consideration received by the Company and the exemption from registration relied
upon by the Company. No person acted as an underwriter of the securities.
<TABLE>
<CAPTION>
Year Title of Class Shares Class of Purchasers Consideration Exemption
<S> <C> <C> <C> <C> <C>
1993 Common none
1994 Common 2,000,000 non U.S. persons $20,000 Cash Reg. S
Common 400,000 non U.S. persons $40 (at par) for Reg. S
technology acquisition
1995 Common 20,000,000 non U.S. persons $20,000 Cash Reg. S
Common 5,900,000 non U.S. persons $52,900,000 for Reg. S
Subsidiary acquisition
1996 Common none
</TABLE>
The sales of common stock in 1994 and 1995 were made to two separate groups
of foreign investors, each for the purpose of transferring control of the
Company to the group of new investors who in turn were expected to elect new
management and make arrangements for an acquisition of a viable business
operation or opportunity by the Company. The group to whom the shares were sold
in 1994 was not affiliated with the group to whom the shares were sold in 1995.
The 1994 group did not make a viable acquisition, which led to the sale to the
current control group in 1995. The 1994 group was composed primarily of Canadian
residents and the 1995 group was composed primarily of European residents. Both
transactions were intended to occur out side the United States and not be
subject to the registration requirements of the Securities Act of 1933, as
amended. Management does not know the reasons for the market price of the Common
Stock prevailing at the respective dates of the sales of these blocks of shares.
The dormant status of the Company at those times would not seem to support those
market prices. The sale of these blocks at nominal prices per share was due to
the dormant status of the Company and the interest of the management in place
immediately prior to each such sale to attract an infusion of modest funds from
persons who might provide an opportunity for the Company to acquire a successful
business operation or opportunity if such persons were able to obtain a majority
interest in the Company.
Item 11. Description of Registrant's Securities to be Registered.
The authorized capital stock of the Company consists of one hundred million
shares of Common Stock, $.00001 par value per share. A total of 28,565,551
shares of Common Stock are issued and outstanding on the date of this
Registration Statement. The shares of the Common Stock (i) have equal and
ratable rights with all shares of issued and outstanding Common Stock to payment
of dividends from funds legally available therefor, when, as and if declared by
the Board of Directors of the Company; (ii) are entitled to share ratably in all
of the assets of the Company available for distribution to holders of Common
Stock upon liquidation, dissolution or winding up of the affairs of the Company;
(iii) do not have preemptive, subscription or conversion rights; (iv) have no
redemption or sinking fund provisions applicable thereto; and (v) have one vote
for election of each director noncumulative and on other matters submitted to a
vote of stockholders. The issued and outstanding shares of Common Stock are
fully paid and non-assessable.
The Company has fifty million shares of preferred stock authorized, $.00001
par value per share. The Board of Directors is authorized to set the relative
rights and preferences of the preferred stock. None of the preferred stock is
issued and outstanding at the date of this Registration Statement.
The Company's transfer agent is Securities Transfer Corporation, Suite 100,
16910 Dallas Parkway, Dallas, Texas 75248.
Item 12. Indemnification of Directors and Officer.
As permitted by Delaware law, the Company will indemnify its directors and
officers against expenses and liabilities they incur to defend, settle or
satisfy any civil or criminal action brought against them on account of their
being or having been directors or officers of the Company unless, in any such
action, they are adjudged to have acted with gross negligence or willful
misconduct. The Company is authorized to purchase, but has not purchased,
insurance to cover the indemnity. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers
or persons controlling the Company pursuant to the foregoing provisions, the
Company has been informed that, in the opinion of the U.S. Securities
17
<PAGE>
and Exchange Commission, such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable.
Item 13. Financial Statements and Supplementary Data.
Financial statements follow Item 15(b).
Item 14. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
Item 15. Financial Statements and Exhibits.
(a) Financial Statements:
page
Index to financial statements F-1
(b) Exhibits
Exhibit No.
(2) Acquisition agreement with Skyguards, SA
(3) (i) Articles of Incorporation
(3) (ii) By-Laws
(10) Management agreements with Cabinet DUFY
(English translation of original document in French)
(21) Subsidiaries of the registrant
(27) Financial Data Schedule
18
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this amendment number 1 to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Ultimistics Inc.
Date:October 7, 1996 By: /s/ Frederic G. Hassid
Frederic G. Hassid
President and Chief Executive Officer
/s/ Frederic G. Hassid Date:October 7, 1996
Frederic G. Hassid, President and Director
/s/ Lubov E. Ulianova Date:October 7, 1996
Lubov E. Ulianova, Director
19
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Index to financial statements of Ultimistics, Inc. - December 31, 1993, 1994 and
1995:
Page
Report of Independent Auditors ........................................... F-2
Consolidated Balance Sheets .............................................. F-3
Consolidated Statements of Operations .................................... F-4
Consolidated Statements of Stockholders' Equity .......................... F-5
Consolidated Statements of Cash Flows .................................... F-6
Notes to Consolidated Financial Statements ............................... F-7
Index to financial statements of SCI Residence Lamarck - December 31, 1993:
Report of Independent Auditors ........................................... F-12
Consolidated Balance Sheets .............................................. F-13
Consolidated Statements of Operations .................................... F-14
Consolidated Statements of Stockholders' Equity .......................... F-15
Consolidated Statements of Cash Flows .................................... F-16
Notes to Consolidated Financial Statements ............................... F-17
Index to financial statements of Ultimistics, Inc. - June 30, 1995 and 1996:
Consolidated Balance Sheets .............................................. F-19
Consolidated Statements of Operations ................................... F-20
Consolidated Statements of Stockholders' Equity ......................... F-21
Consolidated Statements of Cash Flows .................................... F-22
Notes to Consolidated Financial Statements ............................... F-23
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To: The Board of Directors and Stockholders
Ultimistics, Inc.
New York, New York
We have audited the accompanying consolidated balance sheets of Ultimistics,
Inc., (the "Company") as of December 31, 1995, 1994 and 1993 and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Ultimistics, Inc. at
December 31, 1995, 1994 and 1993 and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
Durland & Company, CPAs, P.A.
Palm Beach, Florida
March 6, 1996, except as to note 9,
which is as of March 27, 1996
F-2
<PAGE>
Ultimistics, Inc.
Consolidated Balance Sheets
December 31,
1993 1994 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 0 342,417 524,089
Accounts receivable, net (note 1e) 0 1,093,251 1,425,701
Real estate held for sale (note 1c) 0 2,909,552 1,660,950_
Total Current Assets 0 4,345,220 _3,610,740_
PROPERTY AND EQUIPMENT (note 1d)
Land 0 2,022,073 2,267,347
Rental apartment buildings 0 32,737,000 35,716,735
Rental commercial buildings 0 3,728,393 4,070,096
Less - accumulated depreciation 0 (1,038,603) (2,123,009)
Total Property and Equipment 0 37,448,863 39,931,169
OTHER ASSETS
Total Other Assets 8 536 378
Total Assets $ 8 41,794,619 43,542,287
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 800 1,458,614 154,630
Accrued expenses and other
current payables 504 581,248 1,175,140
Accrued expenses due to related
party (note 5) 0 194,776 144,279
Deposits from tenants 0 795,006 627,034
Short-term portion of long-term debt 0 _ 930,600 _ 398,119
Total Current Liabilities 1,304 3,960,244 _2,499,202
LONG-TERM LIABILITIES
Long-term debt (note 4) 0 8,392,027 _9,350,034
Total Long-Term Liabilities 0 8,392,027 _9,350,034
Total Liabilities 1,304 12,352,271 11,849,236
Minority interest in consolidated
subsidiary 0 _ 718,651 _ 697,365
STOCKHOLDERS' EQUITY
Common stock, $0.00001 par value; authorized 100,000,000
shares; issued and outstanding 26,606,495, 26,662,201 and
26,565,551 at December 31, 1993, 1994 and 1995,
respectively (note 2) 266 267 266
Preferred stock, $0.00001 par value, authorized 50,000,000
shares; issued and outstanding 0 at December 31, 1993,
1994 and 1995, respectively (note 2) 0 0 0
Additional paid in capital in excess of par (note 2) 930 29,152,613 29,172,653
Cumulative translation adjustment (note 1g) 0 480,149 3,113,676
Retained earnings (deficit) (2,492) _ (909,332) (1,290,909)
Total Stockholders' Equity (1,296) 28,723,697 30,995,686
Total Liabilities and Stockholders' Equity $ 8 41,794,619 43,542,287
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
Ultimistics, Inc.
Consolidated Statements of Operations
Year ended December 31,
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1993 1994 1995
Revenues
Sales of co-operative units ................................. $ 0 0 2,179,910
Cost of sales ............................................... 0 0 1,672,540
Gross profit ............................................. 0 0 507,370
Rental revenue .............................................. 0 2,028,749 2,723,470
Interest income ............................................. 0 4,852 852
Other revenue ............................................... 0 277,922 146,213
Total revenue ............................................ 0 2,311,523 3,377,905
Operating Expenses
Sales and marketing ......................................... 0 0 206,319
General and administrative .................................. 324 1,646,796 1,383,846
Depreciation ................................................ 0 911,535 1,266,701
Bad debt .................................................... 0 0 0
Total operating expenses ................................. 324 2,558,331 2,856,866
Income/loss from operations ................................. (324) (246,808) 521,039
Lawsuit expense (note 8) .................................... 0 213,713 87,149
Interest expense ............................................ 0 767,283 836,787
Loss before taxes, minority interest and pre-acquisition loss (324) (1,227,804) (402,897)
Minority interest in subsidiary loss ........................ 0 25,256 21,320
Pre-acquisition loss ........................................ 0 293,216 0
Provision for income tax benefit (note 1h) .................. 0 0 0
Net loss .................................................... $ (324) (909,332) (381,577)
Net loss per share .......................................... $ -- -- (0.02)
Weighted average shares outstanding ......................... -- -- 24 ,613,915
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
Ultimistics, Inc.
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Shares of Additional Cumulative Retained Total
Common Common Pref'd Paid in Translation Earnings/ Stockholders'
Stock Stock Stock Capital Adjustment (Deficit) Equity
BALANCE, January 1,
1993 26,606,495 $ 266 0 930 0 (2,168) (972)
Net income (loss) 0 0 0 0 0 (324) (324)
BALANCE, December
31, 1993 26,606,495 266 0 930 0 (2,492) (1,296)
1 for 10 reverse split
7/20/94 (23,944,294) (239) 0 239 0 0 0
Sale of shares for cash
8/30/94 20,000,000 200 0 19,800 0 0 20,000
Exchange of shares for
technology at par 10/6/94 4,000,000 40 0 0 0 0 40
Foreign currency
translation adjustment 0 0 0 0 480,149 0 480,149
Exchange of shares for
SC Barentin 11/20/95 0 0 0 29,131,644 0 2,492 29,134,136
Net (loss) 0 0 0 0 0 (909,332) (909,332)
BALANCE, December
31, 1994 26,662,201 267 0 29,152,613 480,149 (909,332) 28,723,697
1 for 10 reverse split
8/11/95 (23,996,650) (240) 0 240 0 0 0
Sale of shares for cash
8/28/95 20,000,000 200 0 19,800 0 0 20,000
Exchange of shares for
SC Barentin 11/20/95 3,900,000 39 0 0 0 0 39
Foreign currency
translation adjustment 0 0 0 0 2,633,527 0 2,633,527
Net (loss) 0 0 0 0 0 (381,577) (381,577)
BALANCE, December
31, 1995 26,565,551 $ 266 0 29,172,653 3,113,676 (1,290,909) 30,995,686
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
Ultimistics, Inc.
Consolidated Statements of Cash Flows
Year ended December 31,
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1993 1994 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) ............................... $ (324) (909,332) (381,577)
Adjustments to reconcile net loss to
net cash used for operating activities:
Pre-acquisition loss .......................... 0 (293,216) 0
Minority interest in subsidiary ................ 0 (25,256) (21,320)
Amortization .................................. 24 0 0
Depreciation .................................. 0 911,535 1,266,701
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable .... 0 (595,565) (326,356)
(Increase) decrease in prepaid and other assets 0 7,369 162
Increase (decrease) in accounts payable ....... 200 1,311,186 (1,280,080)
Increase (decrease) in tenant deposits ........ 0 676,714 (164,893)
Increase (decrease) in accrued expenses ....... 100 (343,220) 533,756
Net cash (used) provided by operating activities 0 740,215 (373,607)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate held for sale .......... 0 (2,801,571) (186,853)
Purchase of fixed assets ........................ 0 (37,368,024) 0
Net cash (used) provided by investing activities 0 (40,169,595) (186,853)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock issued for cash .................... 0 20,000 20,000
Common stock of subsidiary issued for cash ...... 0 29,131,884 0
Funds advanced on third party debt .............. 0 8,653,576 329,965
Payments on third-party debt .................... 0 (175,492) (364,267)
Net cash provided (used) by financing activities 0 37,629,968 (14,302)
Foreign currency translation adjustment ......... 0 2,115,833 756,434
Net increase (decrease) in cash ................. 0 316,421 181,672
CASH, beginning of period ....................... 0 25,996 342,417
CASH, end of period ............................. $ 0 342,417 524,089
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash ........................... $ 0 767,284 783,593
Noncash financing activities:
Stock issued to acquire SC Barentin ........ $ 0 0 32,147,605
Stock issued to acquire technology ......... $ 0 40 0
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
Ultimistics, Inc.
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Principles
Organization Ultimistics,Inc. (The Company) was chartered by the State of
Delaware on October 12, 1988. The Company was a development stage enterprise
from incorporation until November 20, 1995. While the Company was in the
development stage, its business was to seek out and enter into a merger
transaction. On November 20, 1995, the Company acquired SCI Barentin,
(Barentin), a corporation, (Societe Civile Immobiliere), chartered on March 12,
1994, under the Code Civil of 1978, as amended, of France, in a stock for stock
exchange and currently conducts business from its headquarters in New York City.
The Company's operations are the ownership of rental real estate located in
various regions of France. The Company owns 11 lower to middle income apartment
buildings located in Barentin and Le Havre, France. These 11 buildings comprise
580 apartments. The Company employs an independent international property
management company to manage these apartments. The Company owns a warehouse type
facility in Evreaux, France, which is occupied by a single tenant under a nine
year lease. Le Havre is a port city located on the Altlantic coast of France.
Barentin and Evreaux are located approximately 50 miles northeast and southeast
of Le Havre. The Company owns a retail type building in Gap, France, which is
occupied by two tenants under 9 year leases. Gap is a winter tourist skiing
destination and is located approximately 50 miles south of Grenoble, France, at
the entrance to a mountain pass in the French Alps.
The Company also owns two middle to upper-middle income co-operative
apartment building projects located in Paris, France. The Company has sold
approximately half of the units in these buildings to individuals.
The financial statements have been prepared in conformity with generally
accepted accounting principles. In preparing the financial statements,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the dates of the statements of
financial condition and revenues and expenses for the years then ended.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
a) Basis of presentation The financial statements reflect the consolidated
financial position and consolidated results of operations of SCI Barentin, prior
to the acquisition by the Company, and on a consolidated with the Company basis
subsequent to the acquisition. The acquisitions have been accounted for as a
reorganization of SCI Barentin.
b) Basis of consolidation The consolidated financial statements include the
accounts of the Company and its subsidiaries. Minority interest represents
minority shareholders' proportionate share of the equity and earnings/ loss of
SCI Barentin and its subsidiaries. Intercompany transactions have been
eliminated.
c) Revenue recognition The Company recognizes rent revenue in the period to
which it relates. The Company accrues any unbilled expenses at period end. The
Company does not recognize revenue from the sale of co- operative apartment
units until such sales close into escrow with the local notarie, under the full
accrual method established by Statement of Financial Accounting Standards No.
66, (SFAS 66). The Company recognizes all costs related to such sale, based on
the unit's pro-rata share of the costs incurred to construct the buildings and
relieves its inventory of such units, at the time the sale closes in escrow.
Under French rules and traditions, there is a short time lag, approximately two
weeks, between the time a sale closes in escrow with the notarie, and when the
Company receives the funds.
d) Real estate held for sale Real estate held for sale is composed of the
remaining co-operative apartment units located in Paris. These units are
recorded at the lower of cost or market, subject to review of impairment of
recoverability under Statement of Financial Accounting Standards No. 121, (SFAS
121).
F-7
<PAGE>
Ultimistics, Inc.
Notes to Consolidated Financial Statements
(1) Summary of significant accounting principles, continued
e) Fixed assets Fixed assets, principally rental unit buildings, are stated
at cost. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets, generally 30 years. Depreciation expense
was $0, $911,535 and $1,266,701 for the years ended December 31, 1993, 1994 and
1995, respectively.
f) Accounts receivable All of the Company's 580 rental apartment units are
leased under lease contracts, generally for a term of one year with provisions
for automatic renewal. The Company holds deposits amounting to one month rent on
all the apartment units. The commercial rental units are leased under separate
lease contracts, with varying terms. The Company holds deposits amounting to one
month rent on all commercial rental units. Accounts receivable also includes
$821,765 which is comprised of amounts due it from notaries for the sale of
Paris located cooperative units. Bad debt expense was $0, $0 and $0 for the
years ended December 31, 1993, 1994 and 1995, respectively.
g) Cash and equivalents The Company considers all short-term deposits with
a maturity of three months or less to be cash equivalents. Cash equivalents
amounted to approximately $0, $185,627 and $305,266 at December 31, 1993, 1994
and 1995, respectively.
h) Foreign currency translation Assets and liabilities of the French
operations are translated from French francs into dollars at the rate of
exchange in effect at the balance sheet date. Revenues and expenses are
translated at average exchange rates prevailing during the year. Resulting
translation adjustments are reflected in stockholder's equity. The Company has
had no transaction gain or loss to date.
i) Income taxes Deferred income taxes are determined on the liability
method in accordance with Statement of Financial Accounting number 109 (SFAS
109). No provision is made for US income taxes applicable to undistributed
earnings of foreign subsidiaries that are indefinitely reinvested in foreign
operations. The Company has a deferred tax asset of $8,825 at December 31, 1995.
The Company has established a valuation reserve in the amount of $8,825 at
December 31, 1995. This deferred tax asset is composed of the tax benefit of net
operating loss carryforwards totaling $58,831 at December 31, 1995, which expire
as follows: $18,709 in 2009 and $40,122 in 2010. The tax benefit is comprised of
$8,825 in federal income tax benefit.
French taxation is substantially similar to US taxation for corporations,
with a tax rate of 33 1/3%, adjustments to net book income to arrive at taxable
income and the recognition of loss carry-overs. The Company's subsidiary,
Barentin has a loss carry-over for French tax purposes of $1,232,078 at December
31, 1995, which expire as follows: $890,623 in 1999 and $341,455 in 2000.
Barentin has a deferred French tax asset of $410,700 at December 31, 1995, for
which Barentin has established a 100% valuation reserve.
j) Net income/loss per share Income/loss per share is computed by dividing
the net loss by the weighted average number of common shares outstanding during
the period.
(2) Stockholders' equity The Company has authorized 100,000,000 shares of
$0.00001 par value common stock. In November 1988, the Company issued 25,000,000
shares of its common stock in exchange for $250 in cash. In 1989, the Company
issued 2,381 shares of its common stock in exchange for $746 in cash, pursuant
to the exercise of warrants then outstanding. The remaining unexercised warrants
expired on May 31, 1989 and December 31, 1990. In September 1989, the Company
effected a two for one forward split of its common stock, thereby issuing
25,381,000 shares. Subsequent to this in 1989, a stockholder contributed
23,398,267 shares of common stock back to the Company for cancellation. In July
1994, the Company effected a one for ten reverse split of its then outstanding
26,606,495 shares of common stock. In August 1994, the Company issued 20,000,000
shares of its common stock in exchange for $20,000 in cash. In October 1994, the
Company issued 4,000,000 shares of its common stock in exchange for certain
scientific technology. In August 1995, the Company effected a one for ten
reverse split of its then outstanding 26,662,201 shares of common stock.
F-8
<PAGE>
Ultimistics, Inc.
Notes to Consolidated Financial Statements
(2) Stockholders' equity, continued In August 1995, the Company issued
20,000,000 shares of its common stock in exchange for $20,000 in cash. On
November 20, 1995, the Company completed the acquisition of SCI Barentin.
Pursuant to this transaction, the Company issued 3,900,000 shares of its common
stock to Skyguards, S.A. in exchange for 199 of a total of 200 issued and
outstanding shares of SCI Barentin. This agreement called for 200,000 additional
shares to be issued to Skyguards at a later date.
The Company has authorized 50,000,000 shares of $0.00001 par value
preferred stock. There are no shares issued or outstanding.
(3) Commitments The Company rents its New York City office on a month to
month basis. The Company rents on a month to month basis, a legal domicile
office in Douai, France, as required by Credit Agricole du Nord pursuant to the
mortgages on the properties held by that bank. The Company's subsidiary has an
agreement with an independent management company, Cabinet DUFY, to manage the
580 rental apartments located in Barentin and Le Havre, as well as the
commercial facility in Evreaux. The Company currently operates under an informal
agreement with a stockholder, through his company, Financiere de Chazelles, to
provide certain services to the Company from his office in Paris. These services
include the monthly accounting and oversight of Cabinet DUFY, the management of
the commercial property in Gap and oversight of the sale of the co- operative
apartment units in Paris. The Company expects to formalize this management
agreement in the second quarter of 1996. Rent expense for the years ended
December 31, 1993, 1994 and 1995 was $0, $4,975 and $2,413, respectively.
Cabinet DUFY's management fees for the years ended December 31, 1993, 1994 and
1995 were $0 , $163,283 and $126,800. Financiere de Chazelles management fees
for the years ended December 31, 1993, 1994 and 1995 were $0, $188,875 and
$125,600.
(4) Long term debt The Company, through its subsidiary, is the maker of 8
mortgages held by Credit Agricole du Nord of Lille, France. 7 of these
mortgages, with an aggregate balance of $7,737,000 at December 31, 1995, are
collateralized by the 11 rental apartment buildings located in Barentin and Le
Havre, and all carry an interest rate of 8.25%. One mortgage, with a balance of
$1,684,280 at December 31, 1995, is collateralized by the commercial rental
property in Gap, and carries an interest rate of 8.5%. The Company also has a
loan from Bank Cantonale de Geneve in Lyon, France, with a balance of $326,531
at December 31, 1995, with an interest rate of 7.2%. This loan resembles a
partial in-substance defeasance in that the Company pays the interest on the
loan balance, but at maturity in 2010, the Company's deposit at the bank will
equal the principal balance of the loan and be used to pay off the loan.
Paragraph 36 of SFAS 76 states that a partial defeasance with regard to
principal only cannot be recognized, therefore both the loan balance and related
deposit are reflected on the balance sheet. The balance of the deposit at
December 31, 1995 is $92,332. The seven mortgages collateralized by the Barentin
and Le Havre properties require monthly payments of principal and interest, with
15 year terms and maturity dates as follows: 3 loans - May 1, 2009, 2 loans -
October 1, 2009 and two loans - November 1, 2009. The loan collateralized by the
Gap property requires monthly payments of principal and interest, with a 15 year
term and matures on December 24, 2008.
Interest expense for the years ended December 31, 1993, 1994 and 1995 were
$0, $767,283 and $836,787. Aggregate maturities of long-term debt over the next
five years are as follows: 1996 - $398,119; 1997 - $432,434; 1998 - $470,320;
1999 - $510,195; 2000 - $554,170 and $7,382,915 thereafter.
(5) Related party transactions The Company currently operates under an
informal agreement with a stockholder, through his company, Financiere de
Chazelles, to provide certain services to the Company from his office in Paris.
This stockholder, who is neither a director or officer of the Company, either
owns or beneficially controls approximately 27.8% of the issued and outstanding
shares of the Company's common stock. These services include the monthly
accounting and oversight of Cabinet DUFY, the independent manager of the
apartment properties in Barentin and Le Havre as well as the commercial property
in Evreaux, the management of the commercial property in Gap and oversight of
the sale of the co-operative apartment units in Paris. The
F-9
<PAGE>
Ultimistics, Inc.
Notes to Consolidated Financial Statements
(5) Related party transactions, continued Company expects to formalize this
management agreement in the second quarter of 1996. The Company owed Financiere
de Chazelles $0, $194,776 and $144,279 at December 31, 1993, 1994 and 1995.
(6) Aquisition of subsidiaries On November 20, 1995, the Company acquired
199 of the total 200 issued and outstanding shares of common stock of SCI
Barentin from Skyguards S.A., in a stock for stock exchange accounted for as an
acquisition. SCI Barentin in turn owns 980 of the total 1,000 issued and
outstanding shares of common stock of SCI Residence Lamarck, which it acquired
on June 1, 1994. SCI Residence Lamarck in turn acquired 100% of the issued and
outstanding partnership interests of SNC Gap on October 25, 1995.
SNC Gap directly owns the commercial rental property located in Gap,
France. SCI Residence Lamarck directly owns the 11 apartment buildings in
Barentin and Le Havre, the commercial rental property in Evreaux and the two
co-operative apartment projects located in Paris.
To effect the acquisition of SCI Barentin, the Company issued 3,900,000
shares of its common stock, which bear a restrictive legend under Rule 144 of
the Securities Act of 1933, as amended. The agreement consumating this
acquisition also called for the Company to issue an additional 200,000 shares to
Skyguards S.A. This agreement was modified on March 27, 1996 whereby the Company
issued an additional 2,000,000 resricted shares to Skyguards, for which the
Company recieved the commercial rental property in Evreaux and the two
co-operative apartment projects located in Paris. These properties had been
expected to be removed from Lamarck's portfolio prior to the closing of the
original transaction. At the date of the original transaction the Company's
shares were quoted at $11 bid, on the Bulletin Board exchange. At the date of
the issuance of the additional 2,000,000 shares, the bid quote was $5. These bid
prices would value the shares issued to effect this transaction at $52,900,000.
Normally, where the acquiring Company is a public shell, the acquisition
is accounted for as a recapitalization of the operating company. The seller of
SCI Barentin, who did not become an officer or directorof Ultimistics, received
3,900,000 shares initially to consummate this transaction, which represented
17.2% pre-issuance and 14.7% post-issuance ownership of the issued and
outstanding shares of the common stock of the Company, therefore, the management
of the Company believes the transaction should be accounted for using the
purchase method of accounting. The additional 2,000,000 shares issued to the
seller increase its ownership percentages to 26% pre-acquisition and 20.65%
post-issuance. No other factors changed, other than the Company received
additional assets in exchange for the additional shares.
Paragraph 67 of Accounting Principles Board Opinion No. 16, (APB 16),
requires that assets acquired be stated at cost when they are acquired and
cost may be determined either by the fair value of the consideration given or
the fair value of the property acquired, whichever is the more clearly evident.
In this transaction, fair value is more clearly evident in the bid price of the
consideration given, the Ultimistics stock. This measure would place a fair
market value of $52,900,000 on the net assets owned by Barentin. Management of
the Company determined that this measure may not be truly indicative of value,
as there has not been a significantly active trading market for the shares.
Management determined that the cost basis of the assets on Barentin's books,
under U.S. GAAP, is more indicative of fair market value of the assets. There
were separate independent appraisals of the 11 apartment buildings in Barentin
and Le Havre by Expertises Gaultier, (a founder of GLR Valuers International),
in March 1995. This appraisal values these properties approximately $8.9 million
higher than book value, for a total value of $44,589,000.
(7) Statement of Financial Accounting Standards No. 121 In March 1995, the
Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standard (SFAS) No. 121, Accounting for the impairment of long-lived
assets and for long lived assets to be disposed of. The Company adopted SFAS
121 effective with fiscal year beginning January 1, 1996. The provisions of SFAS
121 require the Company to review long-
F-10
<PAGE>
Ultimistics, Inc.
Notes to Consolidated Financial Statements
(7) Statement of Financial Accounting Standards No. 121, continued lived
assets for impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. If it is determined that
an impairment loss has occurred based on expected future cash flows, then the
loss will be recognized in the income statement and certain disclosures
regarding impairment recognized will be made in the financial statements. The
Company expects to evaluate for potential impairment the rental real estate it
owns by two principal methods: a) significant market value changes - by means of
evaluating actual sales of substantially similar properties in the areas where
its properties are located and b) by using a cash flow/operating income/ loss
evaluation. At this time the Company does not expect SFAS 121 to have a material
effect, as the current French government is making diligent efforts to address
certain problems in the general French economy.
(8) Lawsuit expense The lawsuit expense of $213,713 in 1994 and $87,149 in
1995 was paid by the Company to settle a lawsuit brought by the French Treasury
for taxes owed by the predecessor's predecessor. The Company was unable to
pursue the matter against the predecessor's predecessor owner, as that
individual had filed bankruptcy by the time the French Treasury lawsuit had been
brought to its attention.
(9) Subsequent events a) Acquisition agreement modification The agreement
consummating the acquisition was modified on March 27, 1996 whereby the Company
issued an additional 2,000,000 resricted shares to Skyguards, as compensation
for the commercial rental property in Evreaux and the two co-operative apartment
projects located in Paris. The original agreement did not include these
properties, however the parties agreed prior to fiscal year end to modify the
original agreement to include them. Verbal agreement was reached on the
additional compensation to Skyguards shortly after fiscal year end, however due
to conflicting travel schedules, the written agreement modification and actual
issuance of the shares representing the additional compensation were not
accomplished until March 27, 1996.
F-11
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To: The Board of Directors and Stockholders
Ultimistics, Inc. and
SCI Residence Lamarck
New York, New York
We have audited the accompanying consolidated balance sheet of SCI Residence
Lamarck, (the "Company") as of December 31, 1993 and the related consolidated
statements of operations, stockholders' equity and cash flows for the year ended
December 31, 1993. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of SCI Residence
Lamarck, at December 31, 1993 and the results of its operations and its cash
flows for the year ended December 31, 1993 in conformity with generally accepted
accounting principles.
Durland & Company, CPAs, P.A.
Palm Beach, Florida
March 6, 1996
F-12
<PAGE>
SCI Residence Lamarck
Consolidated Balance Sheet
December 31,
1993
ASSETS
CURRENT ASSETS
Cash $ 25,996
Accounts receivable, net (note 1d) 578,590
Total Current Assets 604,586
PROPERTY AND EQUIPMENT (note 1c)
Rental apartment buildings 4,457,935
Less - Accumulated depreciation (572,627)
Total Property and Equipment 3,885,308
OTHER ASSETS
Other assets 8,204
Total Other Assets 8,204
Total Assets $ 4,498,098
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 96,934
Accrued expenses and other current payables 1,132,466
Tenant deposits 92,215
Short-term portion of long-term debt 95,979
Total Current Liabilities 1,417,594
LONG-TERM LIABILITIES
Long-term debt (note 4) 3,409,182
Total Long-Term Liabilities 3,409,182
Total Liabilities 4,826,776
STOCKHOLDERS' EQUITY
Common stock, 100FF (French Franc) par value; authorized
100 shares; issued and outstanding 100 at December 31,
1993 (note 2) 1,816
Additional paid in capital in excess of par (note 2) 18,160
Cumulative translation adjustment (note 1f) 40,606
Retained earnings (deficit) (389,260)
Total Stockholders' Equity (328,678)
Total Liabilities and Stockholders' Equity $ 4,498,098
The accompanying notes are an integral part of the financial statements.
F-13
<PAGE>
SCI Residence Lamarck
Consolidated Statement of Operations
Year ended December 31,
1993
Rental revenue $ 1,221,918
Other revenue 14,684
Interest income 8,978
Total revenue 1,245,580
Operating Expenses:
General and administrative 736,386
Depreciation 100,723
Bad debt 0
Total operating expenses 837,109
Income from operations 408,471
Interest expense 254,607
Income before taxes 153,864
Provision for income tax expense 47,123
Net income $ 106,741
Net income per share $ -
Shares outstanding -
The accompanying notes are an integral part of the financial statements.
F-14
<PAGE>
SCI Residence Lamarck
Consolidated Statement of Stockholders' Equity
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Shares of Additional Cumulative Retained Total
Common Common Paid in Translation Earnings/ Stockholders'
Stock Stock Capital Adjustment (Deficit) Equity
BALANCE, January 1993 100 $ 1,816 18,160 66,943 (496,001) (409,081)
Foreign currency
translation adjustment ........ 0 0 0 (26,337) 0 (26,337)
Net income (loss) ................ 0 0 0 0 106,741 106,741
BALANCE, December
31, 1993 ......................100 $ 1,816 18,160 40,606 (389,260) (328,678)
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-15
<PAGE>
<TABLE>
<CAPTION>
SCI Residence Lamarck
Consolidated Statement of Cash Flows
Year ended December 31,
1993
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 106,741
Adjustments to reconcile net loss to
net cash used for operating activities:
Depreciation 100,723
Bad debt expense 0
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (3,151)
(Increase) in prepaid and other assets (599)
Increase (decrease) in accounts payable (1,687)
Increase (decrease) in tenant deposits (2,187)
Increase (decrease) in accrued expenses (55,423)
Net cash (used) provided by operating activities 144,417
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets 0
Net cash (used) provided by investing activities 0
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on third-party debt (102,976)
Net cash provided (used) by financing activities (102,976)
Foreign currency translation adjustment (26,337)
Net increase (decrease) in cash 15,104
CASH, beginning of period 10,892
CASH, end of period $ 25,996
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash $ 254,007
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-16
<PAGE>
SCI Residence Lamarck
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Principles
Organization (Societe Civile Immobiliere) SCI Residence Lamarck, (the
Company), was chartered on June 19, 1987, under the Companies Act of 1966, as
amended, of France, and operates from its headquarters in Bosguerard de
Marcouville, France.
The Company's operations are principally the ownership of 11 lower to
middle income apartment buildings located in Barentin and Le Havre, France.
These 11 buildings comprise 580 apartments. The Company employs an independent
international property management company to manage these apartments. Le Havre
is a port city located on the Altlantic coast of France and Barentin is
approximately 50 east of Le Havre.
The financial statements have been prepared in conformity with generally
accepted accounting principles. In preparing the financial statements,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the dates of the statements of
financial condition and revenues and expenses for the years then ended. The
following summarize the more significant accounting and reporting policies and
practices of the Company:
a) Basis of consolidation The consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary, (Societe A
Responsabilite Limitee) S.A.R.L. Societe Generale D'Investissments, (SARL SGI).
Intercompany transactions have been eliminated.
b) Revenue recognition The Company recognizes rent revenue in the period to
which it relates.
c) Fixed assets Fixed assets, principally rental unit buildings, are stated
at cost. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets, generally 40 years. Depreciation expense
was $100,723 for the year ended December 31, 1993.
d) Accounts receivable All of the Company's 580 rental apartment units are
leased under lease contracts, generally for a term of one year with provisions
for automatic renewal. The Company holds deposits amounting to approximately one
month rent on all the apartment units. Bad debt expense was $0 for the year
ended December 31, 1993.
e) Cash and equivalents The Company considers all short-term deposits with
a maturity of three months or less to be cash equivalents. Cash equivalents
amounted to approximately $19,064 at December 31, 1993.
f) Foreign currency translation Assets and liabilities of the French
operations are translated from French francs into dollars at the rate of
exchange in effect at the balance sheet date. Revenues and expenses are
translated at average exchange rates prevailing during the year. Resulting
translation adjustments are reflected in stockholder's equity.
g) Income taxes Deferred income taxes are determined on the liability
method in accordance with Statement of Financial Accounting number 109 (SFAS
109). French taxation is substantially similar to US taxation for corporations,
with a tax rate of 33 1/3%, adjustments to net book income to arrive at taxable
income and the recognition of loss carry-overs. The Company has a loss
carry-over for French tax purposes of $389,260 at December 31, 1993, which have
expired.
h) Net income/loss per share Income/loss per share is computed by dividing
the net loss by the weighted average number of common shares outstanding during
the period.
(2) Stockholders' equity The Company has authorized 100 shares of 100FF
(French franc) par value common stock. In June 1987, the Company issued 100
shares of its common stock in exchange for 10,000FF, ($1,816) in cash.
F-17
<PAGE>
SCI Residence Lamarck
Notes to Consolidated Financial Statements
(3) Commitments The Company rents its Bosguerard de Marcoville office on a
month to month basis. Rent expense for the year ended December 31, 1993 was
$27,343. The Company has an agreement with an independent management company,
Cabinet DUFY, to manage the rental apartments. Cabinet DUFY's management fees
for the year ended December 31, 1993 was $80,016.
(4) Long term debt The Company is the maker of a mortgage held by Credit
Agricole du Nord of Lille, France. This mortgage, with a balance of $975,750 at
December 31, 1993, is collateralized by the 6 rental apartment buildings in Le
Havre and carries an interest rate of 12%. The Company is the maker of another
mortgage held by Credit Agricole du Nord of Lille, France. This mortgage, with a
balance of $2,529,411 at December 31, 1993, is collateralized by the 5 rental
apartment buildings in Barentin and carries an interest rate of 10.5%. The
mortgages require monthly payments of principal and interest, with 15 year terms
and maturity dates of June 1, 2005 and July 1, 2008.
Interest expense for the year ended December 31, 1993 was $254,607.
Aggregate maturities of long-term debt over the next year is as follows: 1994 -
$103,000.
(5) Subsequent events a) Long term debt repayment When the Company was sold
to SCI Barentin on June 1, 1994, the existing long term debt was paid in full.
F-18
<PAGE>
Ultimistics, Inc.
Consolidated Balance Sheets
June 30,
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
1995 1996
ASSETS
CURRENT ASSETS
Cash ........................................................ $ 668,788 809,259
Accounts receivable, net (note 1e) .......................... 1,343,788 2,286,042
Real estate held for sale (note 1c) ......................... 2,035,234 248,700
Total Current Assets ..................................... 4,047,810 3,344,001
PROPERTY AND EQUIPMENT (note 1d)
Land ........................................................ 2,227,488 2,099,029
Rental apartment buildings .................................. 36,062,642 33,982,913
Rental commercial buildings ................................. 4,107,087 4,440,855
Less - accumulated depreciation ............................. (1,750,338) (1,998,206)
Total Property and Equipment ............................. 40,646,879 38,524,591
OTHER ASSETS
Total Other Assets ....................................... 2,468 2,516
Total Assets .................................................... $ 44,697,157 41,871,108
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ............................................ $ 38,208 101,033
Accrued expenses and other current payables ................. 1,017,260 1,182,226
Accrued expenses due to related party (note 5) .............. 145,676 201,447
Deposits from tenants ....................................... 1,257,252 529,990
Short-term portion of long-term debt ........................ 385,935 394,588
Total Current Liabilities ................................ 2,844,331 2,409,284
LONG-TERM LIABILITIES
Long-term debt (note 4) ..................................... 9,642,148 8,662,984
Total Long-Term Liabilities .............................. 9,642,148 8,662,984
Total Liabilities ............................................... 12,486,479 11,072,268
Minority interest in consolidated subsidiary .................... 713,643 686,537
STOCKHOLDERS' EQUITY
Common stock, $0.00001 par value; authorized 100,000,000
shares; issued and outstanding 26,662,201 and 28,565,551 at
June 30, 1995 and 1996, respectively (note 2) ............. 267 286
Preferred stock, $0.00001 par value, authorized 50,000,000
shares; issued and outstanding 0 at December 31, 1993,
1994 and 1995, respectively (note 2) ..................... 0 0
Additional paid in capital in excess of par (note 2) ........ 29,152,613 29,172,633
Cumulative translation adjustment (note 1g) ................. 3,875,489 2,758,028
Retained earnings (deficit) ................................. (1,531,336) (1,818,645)
Total Stockholders' Equity ...................................... 31,497,033 30,112,302
Total Liabilities and Stockholders' Equity ...................... $ 44,697,155 41,871,107
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-19
<PAGE>
Ultimistics, Inc.
Consolidated Statements of Operations
6 Months ended June 30,
(Unaudited)
1995 1996
Revenues
Sales of co-operative units $ 1,730,013 1,162,861
Cost of sales 1,253,864 1,149,074
Gross profit 476,149 13,787
Rental revenue 1,461,274 1,297,408
Interest income 1,867 24,507
Other revenue 133,386 40,559
Total revenue 2,072,676 1,376,261
Operating Expenses
Sales and marketing 62,187 96,659
General and administrative 1,492,645 894,210
Depreciation 661,110 506,737
Bad debt 0 0
Total operating expenses 2,215,942 1,497,606
Income/loss from operations (143,266) (121,345)
Lawsuit expense (note 8) 86,254 0
Interest expense 409,212 417,219
Loss before taxes, minority interest and
pre-acquisition loss (638,732) (538,564)
Minority interest in subsidiary loss 16,728 10,828
Pre-acquisition loss 0 0
Provision for income tax benefit (note 1h) 0 0
Net loss $ (622,004) (527,736)
Net loss per share $ - (0.02)
Weighted average shares outstanding - 27,609,507
The accompanying notes are an integral part of the financial statements.
F-20
<PAGE>
<TABLE>
<CAPTION>
Ultimistics, Inc.
Consolidated Statements of Stockholders' Equity
<S> <C> <C> <C> <C> <C> <C> <C>
Shares of Additional Cumulative Retained Total
Common Common Pref'd Paid in Translation Earnings/ Stockholders'
Stock Stock Stock Capital Adjustment (Deficit) Equity
BALANCE, January 1, 1996 26,565,551 $ 266 0 29,172,653 3,113,676 (1,290,909) 30,995,686
Issuance of additional
shares 3/27/96 2,000,000 20 0 (20) 0 0 0
Foreign currency
translation adjustment 0 0 0 0 (355,648) 0 (355,648)
Net (loss) 0 0 0 0 0 (527,736) (527,736)
BALANCE, June
30, 1996 (Unaudited) 28,565,551 $ 286 0 29,172,633 2,758,028 (1,818,645) 30,112,302
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-21
<PAGE>
<TABLE>
<CAPTION>
Ultimistics, Inc.
Consolidated Statements of Cash Flows
6 Months ended June 30,
(Unaudited)
<S> <C> <C>
1995 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) ................................ $ (622,004) (527,736)
Adjustments to reconcile net loss to
net cash used for operating activities:
Minority interest in subsidiary ................ (16,728) (10,828)
Amortization ................................... 0 0
Depreciation ................................... 661,110 506,737
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable ..... (247,241) (856,303)
(Increase) decrease in prepaid and other assets (1,907) (2,128)
Increase (decrease) in accounts payable ........ (1,401,718) (53,043)
Increase (decrease) in tenant deposits ......... 456,164 (96,588)
Increase (decrease) in accrued expenses ........ 381,822 64,255
Net cash (used) provided by operating activities . (801,339) (980,693)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate held for sale ........... (128,107) (2,057)
Purchase of fixed assets ......................... 0 0
Net cash (used) provided by investing activities . (128,107) (2,057)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock issued for cash ..................... 0 0
Common stock of subsidiary issued for cash ....... 0 0
Funds advanced on third party debt ............... 329,965 0
Payments on third-party debt ..................... (174,378) (184,522)
Net cash provided (used) by financing activities . 155,587 (184,522)
Foreign currency translation adjustment .......... 1,089,393 1,447,383
Net increase (decrease) in cash .................. 326,371 285,170
CASH, beginning of period ........................ 342,417 524,089
CASH, end of period .............................. $ 668,788 809,259
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash ............................ $ 354,445 424,998
Noncash financing activities:
Stock issued to Skyguards ................... $ 0 20
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-22
<PAGE>
Ultimistics, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
(1) Summary of Significant Accounting Principles The following summarize
the more significant accounting and reporting policies and practices of the
Company:
a) Basis of presentation The financial statements reflect the consolidated
financial position and consolidated results of operations of SCI Barentin, prior
to the acquisition by the Company, and on a consolidated with the Company basis
subsequent to the acquisition. The acquisitions have been accounted for as a
reorganization of SCI Barentin. The financial statements include all adjustments
which in the opinion of management are necessary for fair presentation.
b) Basis of Consolidation The consolidated financial statements include the
accounts of the Company and its subsidiaries. Minority interest represents
minority shareholders' proportionate share of the equity and earnings/ loss of
SCI Barentin and its subsidiaries. Intercompany transactions have been
eliminated.
c) Fixed assets Depreciation expense was $661,110 and $506,737 for the 6
months ended June 30, 1995 and 1996.
d) Accounts receivable Accounts receivable also includes $1,061,507 which
is comprised of amounts due it from notaries for the sale of Paris located
cooperative units. Bad debt expense was $0 and $0 for the six months ended June
30, 1995 and 1996, respectively.
e) Cash and equivalents The Company considers all short-term deposits with
a maturity of three months or less to be cash equivalents. Cash equivalents
amounted to $205,721 and $691,396 at June 30, 1995 and 1996.
f) Foreign currency translation The Company has had no transaction gain or
loss to date.
g) Income taxes The Company has a deferred tax asset of $33,270 at June 30,
1996, for which the Company has established a 100% valuation reserve.This
deferred tax asset is composed of the tax benefit of net operating loss
carryforwards totaling $221,797 at June 30, 1996, which expire as follows:
$18,709 in 2009, $40,122 in 2010 and $162,966 in 2011. The tax benefit is
comprised of $33,270 in federal income tax benefit.
The Company's subsidiary, Barentin has a loss carry-over for French tax
purposes of $1,759,814 at June 30, 1996, which expire as follows: $890,623 in
1999, $341,455 in 2000, and $527,736 in 2001. Barentin has a deferred French tax
asset of $586,600 at June 30, 1996, for which it has established a 100%
valuation reserve.
(2) Stockholders' equity The agreement consummating the acquisition was
modified on March 27, 1996 whereby the Company issued an additional 2,000,000
resricted shares to Skyguards, as compensation for the commercial rental
property in Evreaux and the two co-operative apartment projects located in
Paris.
(3) Commitments Rent expense for the six months ended June 30, 1995 and
1996 was $1,607 and $4,968, respectively. Cabinet DUFY's management fees for the
six months ended June 30, 1995 and 1996 were $59,000 and $55,585. Financiere de
Chazelles management fees for the six months ended June 30, 1995 and 1996 were
$84,263 and $107,120.
(4) Long term debt Interest expense for the six months ended June 30, 1995
and 1996 were $409,212 and $417,219. Aggregate maturities of long-term debt over
the next five years are as follows: 1997 - $394,588; 1998 - $428,600; 1999 -
$465,543; 2000 - $505,672; 2001 - $549,259 and $6,713,910 thereafter.
F-23
<PAGE>
<TABLE>
<CAPTION>
Ultimistics, Inc. and Subsidiaries
Schedule III
Real Estate and Accumulated Depreciation
December 31, 1995
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Life which
deprec. in
late. inc.
Bldg.s and Carrying Bldg.s and Accum. Date of statemnt.
Descript. Encumb. Land Improve. Improve. Costs Land Improve. Total Deprec. Construct. Acquired Computed
Apartment
Buildings
Barentin
and
Le Havre First
France Mtgs. 2,102 35,717 0 0 2,102 35,717 27,819 1,885 1953 1994 30yrs.
Warehouse
Evreaux
France None 24 474 0 0 24 474 498 33 1991 1994 30yrs.
Retail
Building
Gap First
France Mtg. 104 3,569 0 0 104 3,569 3,673 238 1989 1994 30yrs.
</TABLE>
EXHIBIT 2
AGREEMENT made this 20th day of November, 1995 by and between Ultimistics, Inc.,
a Delaware Corporation, ("Ultimistics") and Skyguards S.A. a Luxemburg
Corporation, ("Skyguards").
1. Skyguards hereby represents that it is the owner of 199 shares out of 200
shares, which is all of the issued and outstanding stock of SCI Barentin, a
French corporation which is the owner of parcels of property in France more
particularly described in Exhibit "A".
2. Skyguards hereby agrees to sell to Ultimistics its SCI Barentin stock
described in paragraph 1 for the issuance by Ultimistics of 3,900,000 shares of
its restricted common stock. The receipt of which is acknowledged by both
parties to this Agreement.
3. Skyguards further represents the property described in Exhibit "A" has a net
worth of approximately $38,099,000 U.S.D. (cf. Expertise Gautier, Valuers
International).
4. The parties agree that any previous agreements are revoked, and that this
Agreement will be the only enforceable agreement between the parties.
5. The parties to this Agreement hereby acknowledge that the transaction as
reflected in Exhibit "A" excludes any and all real estate holdings of SCI
Residence Lamarck in Paris, France; as well as the bank account of SCI Residence
Lamarck at Credit Agricole, which currently is approximately $400,000 U.S.D. The
parties agree that Skyguards shall exchange with SCI Barentin, at a future date,
200,000 shares of Ultimistics stock for the Paris, France real estate and the
funds in the Credit Agricole bank account, including any accrued interest, held
by SCI Residence Lamarck.
6. This document represents the entire agreement of the parties and merges all
prior understandings of the parties. No change or modification shall be
effective unless it is in writing and signed by the party to be charged with
such change or modification.
ULTIMISTICS, INC.
By: /S/ Christophe Giovannetti
SKYGUARDS S.A.
By: /S/ Yves-Victor Uzan
Exhibit 3(i)
CERTIFICATE OF INCORPORATION
ULTIMISTICS INC.
I, the undersigned natural person of the age of eighteen (18) years or more,
acting as Incorporator of a corporation under the General Corporation Law of
Delaware do hereby adopt the following Articles of Incorporation for such
CORPORATION.
ARTICLE I
NAME
The name of the CORPORATION is ULTIMISTICS INC.
ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT
The address of the CORPORATION's registered office in the State of Delaware is
THE COMPANY CORPORATION 725 Market Street in the Ciry of Wilmington, and County
of New Castle The name of its registered agent at such address is THE COMPANY
CORPORATION.
ARTICLE III
PURPOSES
The purposes of which the CORPORATION is organized are:
A. To purchase receive by way of of subscribe for, invest in, and in all other
ways acquire, import, lease, possess, maintain, handle on consignment, own, hold
for investment or otherwise use, enjoy, exercise, operate, manage, conduct,
perform, make, borrow, contract in respect of, trade and deal in, sell,
exchange, let, lend, export, mortgage, pledge, deed in trust, hypothecate,
encumber, transfer, assign and in all other ways dispose of, design, develop,
invent, improve, equip, repair, alter, fabricate, assemble, build, construct,
operate, manufacture, plant cultivate, produce, market and in all other ways
(whether like or unlike any of the foregoing), deal in and with property of
every kind and character, real personal, or mixed, tangible or intangible
wherever situated and however held, including, but not limited to, money,
credits, choses in action, securities stocks, bonds, warrants, script,
certificates, debentures, mortgages, notes, commercial paper, and other
obligations and evidences of indebtedness of any government or subdivision or
agency thereof, documents of title and accompanying rights, and every other kind
and character of personal property real property (improved and unimproved), and
the products and avails thereof, and every character of interest therein and
appurtenance thereto, including but not limited to, mineral, oil, gas and water
rights, all or any part of any going business and its incidents, franchises,
subsidies, characters, concessions, grants, rights, powers, or privileges,
granted or conferred by any government or subdivision or agency thereof, and any
interest in or part of any of the foregoing and to exercise in respect thereof
all of the rights, powers, privileges, and immunities of individual owners or
holders thereof.
B. To establish, maintain, and conduct any sales, service or merchandising
business in all its aspects for the purpose of selling, purchasing, licensing,
renting, leasing, operating, franchising and otherwise dealing with personal
services, instruments, machines, appliances, inventions, trademarks, tradenames,
patents, priviledges, processes, improvements, copyright and personal property
property of all kinds and descriptions.
C. To serve as manager, consultant, representative, agent or advisor for other
persons, associations, corporations, partnerships and firms.
<PAGE>
D. To purchase, take, receive, leave or otherwise acquire, own, hold, use
improve, and otherwise deal in and with, sell, convey, mortgage, pledge, lease,
exchange, transfer and otherwise dispose of liens, real estate, real properly,
chattels real and estates, interests and rights and equities of all kinds of
lands; and to engage in the business of managing, supervising, and operating
real property, buildings and structures, to negotiate and consummate for itself
or for others leases with respect to such properties, to enter into contracts
and arrangements other as principal or as agent for the maintenance, repair and
improvement of any property managed, supervised or operated by the CORPORATION;
to engage in and conduct or authorize, license and permit others to engage in
and conduct any business or activity incident, necessary, advisable or
advantageous to the ownership of property, buildings and the structures,
managed, supervised, or operated by the CORPORATION.
E. To enter into or become an associate, member, shareholder, or partner in any
firm, association, partnership (whether limited, general or otherwise), company,
joint stock company, syndicate or corporation, domestic or foreign, formed or to
be formed to accomplish any lawful purpose, and to allow or cause the title o
any estate, right or interest in any property (whether real, personal or mixed),
owned, acquired controlled, or operated by or in which the CORPORATION has an
interest, to remain or be vested or registered in the name of or operated by any
firm, association, partnership (whether limited, general or otherwise), company,
joint stock company, syndicate or corporation, domestic or foreign, formed to
accomplish any of the purposes enumerated herein.
F. To acquire the goodwill, rights, assets and property, and to undertake or
assume the whole, or any part of, theobligations for liabilities of any person,
firm, association or corporation.
G.. To hire and employ agents, servants, and employees, to enter into agreements
of employment and collective bargaining agreements, and to act as agent,
contractor, factor, or otherwise, either alone or in company with others.
H. To promote or aid in any manner, financially or otherwise, any person, firm,
association, or corporation, including its employees, officers and directors if
such aid reasonably may be expected to benefit directly or indirectly, the
CORPORATION.
I. To let concessions to others to do any of the things that this CORPORATION is
empowered to do, and to enter into, make, perform, and carry out contracts and
arrangements of every kind and character with any person, firm, association, or
corporation, or any government or authority or subdivision or agency thereof.
J. To carry on any business whatsoever that this CORPORATION may deem proper or
convenient in connection with any of the foregoing purposes or otherwise, or
that it may deem calculated, directly or indirectly, to improve the interest of
this CORPORATION, and to have and to exercise all powers conferred by the law
laws of the State of Delaware on corporations formed under the laws pursuant to
which and under which this CORPORATION is formed, as such laws are now in effect
or may at any time hereafter be amended, and to do any and all things
hereinabove set forth to the same extent and as fully as natural persons might
or could do, either along or in connection with other persons, firms,
associations or corporations, and in any, part of the world.
K To transact any business and to engage in lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware, as
amended, or which may be authorized in the future by amendment thereto.
L. The foregoing statement of purposes shall be construed as a statement of both
purposes and powers, shall be liberally construed in aid of the powers of this
CORPORATION, and the powers and purposes stated in each clause shall not, except
where otherwise stated, be limited or restricted by any term or provision of any
other clause and shall be regarded not only as independent purposes, but the
purposes and powers stated shall be construed distributively as each object
expressed, and the enumeration as to specific powers shall not be construed as
to limit in any manner the aforesaid general powers, but are in furtherance of,
and in addition to one not in of said general powers.
<PAGE>
ARTICLE IV
SHARES OF STOCK
The total number of shares of stock which the CORPORATION shall have authority
to issue is Fifty Million (10,000,000) shares of Common Stock, and Ten Million
(10,000,000) shares of Preferred Stock. The par value of each of such shares
($0.00001) amounting in the aggregate to Six Hundred Dollars ($600).
ARTICLE V
INCORPORATOR
The name and mailing address of the Incorporator of the CORPORATION is as
follows:
Timothy P. Halter - 1441 Marvin D. Love Freeway Suite 2000, Dallas, Texas 75237
ARTICLE VI
DIRECTORS
The name and mailing address of each person who is to serve as a director of the
CORPORATION until the first annual meeting of the shareholders of the
CORPORATION or until their successor is elected and qualified is as follows:
Timothy P. Halter 7441 Marvin D. Love Freeway. Suite 2000. Dallas, Texas 75237
Kevin B. Halter 7441 Marvin D. Love Freeway Suite 2000, Dallas, Texas 75237
Richard L Elrod 7441 Marvin D. Love Freeway, Suite 2000, Dallas, Texas 75237
James H. Smith - 7441 Marvin D. Love Freeway. Suite 2000, Dallas, Texas 7.5237
ARTICLE VII
DURATION
The period of duration of the CORPORATION is perpetual.
ARTICLE VIII
ELECTION OF DIRECTORS
Elections of directors of the Corporation need not be by written ballot unless
the By-Laws of the CORPORATION shall so provide.
ARTICLE IX
MEETINGS OF SHAREHOLDERS
Meetings of shareholders of the CORPORATION may be held within or without the
State of Delaware, as the By laws of the CORPORATION may provide.
ARTICLE X
AMENDMENTS
The CORPORATION reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by the Delaware statutes, and all rights conferred upon
shareholders herein are granted subject to this reservation.
<PAGE>
THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of
forming a corporation pursuant to the General Corporation Law of the State of
Delaware, does make this certificate hereby declaring and certifying that this
is my act and deed and the facts herein stated are true, and accordingly have
hereunto set my hand this 11th day of October, 1988.
/s/ Timothy P. Halter
Timothy P. Halter
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 08/12/1994
944151503 - 2175229
RENEWAL, REVIVAL AND RESTORATION OF CERTIFICATE OF INCORPORATION OF
ULTIMISTICS INC.
Pursuant to Title 8, Section 312, Delaware Code, the General Corporation Law,
the undersigned, being the President of Ultimistics Inc., a Delaware
corporation, (the "Corporation"), hereby certifies as follows:
l. The name of the Corporation is Ultimistics Inc.and the date of filing of its
original certificate of incorporation with the Secretary of State is
October 12, 1988.
2. The address of the Corporation's registered office in the State of Delaware
is Suite L-100, 32 Loockerman Square, Dover, Delaware 19904, being in Kent
County, and the name of the registered agent at said address is The
Prentice-Hall Corporation System, Inc.
3. The Corporation shall have perpetual existence.
4. The Corporation was organized under the General Corporation Law of the State
of Delaware on October 12, 1988.
5. The certificate of incorporation of the Corporation has become inoperative by
law for nonpayment of taxes as of March 1, 1991.
6. This certificate of renewal, revival and restoration is filed by authority of
directors elected by the stockholders pursuant to Subsection (h) of said Section
312. The date the Certificate of Incorporation shall be restored and revived and
shall become fully operative is February 28, 1991.
IN WITNESS WHEREOF, Ultimistics Inc. has caused this certificate of renewal,
revival and restoration to be signed by its president on July 22, 1994.
Ultimistics Inc.
Attest:
By: /s/ Jean-Jacques Dahan
Jean-Jacques Dahan, President
Secretary /s/ Jean Jacques Dahan
I, Jean Jacques Dahan, hereby acknowledge that the within instrument is the act
and deed of Ultimistics Inc. and that the facts stated therein are true.
/s/ Jean Jacques Dahan
Jean Jacques Dahan
PROVINCE OF BRITISH COLUMBIA }
COUNTY OF } ss:
The foregoing instrument was acknowledged before me, the undersigned Notary
Public, this 22 day of July, 1994, by Jean Jacques Dahan, as President of
Ultimistics Inc., a Delaware corporation, and attested by him as its Secretary,
on behalf of the corporation. He is personally known to me or produced BC
4774223 (e.g. driver's license) as identification and did take an oath.
(SEAL) /s/ Jay Sujir
(print name) Jay Sujir
Notary Public; Serial Number N/A
Commission Expires
<PAGE>
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION AMENDED
OF
ULTIMISTICS INC.
Pursuant to the provisions of 242, Del. Code, the Delaware General Corporations
Law, Ultimistics Inc., a Delaware corporation, does hereby amend its Certificate
of Incorporation, as amended, as follows:
1. The total number of shares of common stock which the Corporation
shall be authorized to issue is hereby increased to one hundred million
(100,000,000) shares from fifty million (50,000,000) shares, par value of
$0.00001 per share.
2. Except as provided herein, all other provisions of the Certificate
of Incorporation, as amended and in effect prior to the date hereof shall be
unchanged and in full force and effect.
3. The within amendment to the Corporation's Certificate of
Incorporation, as amended, has been approved, upon the recommendation of the
Board of Directors, by a favorable vote not less than the number of shares
required to approve such amendment.
IN WITNESS WHEREOF, the undersigned officer of Ultimistics Inc., duly
authorized hereunto, has executed under penalties of perjury the within Articles
of Amendment, the facts stated within being true, this 8th day of August, 1995
as the act and deed of the Corporation and caused this Certificate to be filed
in the appropriate offices in the State of Delaware, effective upon the filing
thereof:
[CORPORATE SEAL] Ultimistics Inc.
Attest:
By: /s/ Michel Ladovitch
/s/ Michel Ladovitch, President
Secretary or Ass't Secretary
STATE OF NEW YORK }
COUNTY OF } ss:
The foregoing instrument was acknowledged before me, the undersigned Notary
Public, this 8th day of August, 1995 under penalties perjury by Michel Ladovitch
as President of Ultimistics, Inc., who states that the facts set forth therein
are true and that it is the act and deed of the corporation. He is personally
known to me or produced
(e.g. driver's license) as identification.
(SEAL)
(print name)
/s/ Leon B. Lipkin Notary Public; Serial Number
LEON B. LIPKIN Commission Expires
Notary, Public, State of New York
No. 41-4981011
Qualified in Queens County
Commission expires May 8, 1997
Exhibit 3(ii)
BYLAWS
OF
ULTIMISTICS INC.
Adopted
By The
BOARD OF DIRECTORS
on
October 12, 1988
<PAGE>
TABLE OF CONTENTS
ARTICLE I. GENERAL
1.1 General Offices
1.2 Registered Office
1.3 Registered Agent
ARTICLE II. SHAREHOLDERS
2.1 Annual Shareholders' Meeting
2.2 Special Meeting
2.3 Place of Meeting
2.4 Notice of Meeting
2.5 Action without Meeting
2.6 Closing of Transfer Books or Fixing of Record Time 2.7 Voting Lists
2.8 Quorum of Shareholders 2.9 Voting of Shares 2.10 Method of Voting
2.11 Rules of Procedure 2.12 Waiver By Unanimous Consent in Writing
2.13 Telephone Meetings 2.14 Cumulative Voting 2.15 Pre-Emptive Rights
ARTICLE III. DIRECTORS
3.1 Management
3.2 Number
3.3 Election
3.4 Term of Office
3.5 Removal
3.6 Vacancy
3.7 Quorum
3.8 Annual Directors' Meetings
3.9 Regular Meetings
3.10 Special Meetings
3.11 No Statement of Purpose of Meeting Required 3.12 Compensation 3.13
Attendance and Presumption of Assent 3.14 Executive and Other
Committees 3.15 Removal of Committee Members 3.16 Waiver By Unanimous
Consent in Writing 3.17 Telephone Meetings
ARTICLE IV. OFFICERS
4.1 Number
4.2 Election and Term of Office
4.3 Removal
4.4 Vacancies
4.5 Authority
4.6 President
4.7 Vice President
4.8 Secretary
<PAGE>
4.9 Treasurer
4.10 Assistant Treasurer and Assistant Secretary
4.1 1 Salaries
ARTICLE V. CONTRACTS LOANS, CHECKS AND DEPOSITS
5.1 Contracts, Deeds, Mortgages, Etc.
5.2 Loans
5.3 Checks, Drafts, Etc.
5.4 Deposits
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER 6.1 Certificates for
Shares 6.2 Facsimile Signatures 6.3 Issuance 6.4 Subscriptions 6.5
Payment 6.6 Lien 6.7 Replacement of Lost or Destroyed Certificates 6.8
Transfer of Shares 6.9 Registered Shareholders
ARTICLE VII. DIVIDENDS AND RESERVES
7.1 Declaration and Payment
7.2 Record Date
7.3 Reserves
ARTICLE VIII. INDEMNIFICATION
8.1 Definitions
8.2 Power to Indemnify
8.3 Director Limitation
8.4 Termination of a Proceeding
8.5 Proceeding Brought by the Corporation 8.6 Determination of
Indemnification 8.7 Authorization of Indemnification 8.8
Indemnification of a Director 8.9 Indemnification of Others 8.10
Indemnity Insurance 8.11 Reports to Shareholders 8.12 Employer Benefit
Plan
ARTICLE IX. MISCELLANEOUS
9.1 Limitation of Liability
9.2 Fiscal Year
9.3 Seal
9.4 Books and Records
9.5 Annual Statement
9.6 Resignation
9.7 Amendment
9.8 Invalid Provisions
9.9 Headings
9.10 Waiver of Notice
9.11 Gender
<PAGE>
ARTICLE I.
GENERAL
1.1 GENERAL OFFICES. Unless otherwise determined by resolution of the Board of
Directors, the principal, office of the Corporation shall be located in the City
of Dallas, County of Dallas, State of Texas. The Corporation may have such other
offices, either within or without the State of Texas, as the Board of Directors
may determine of as the affairs of the Corporation may require from time to
time.
1.2 REGISTERED OFFICE. The Corporation shall have and continuously maintain in
the state of Delaware a registered office which may be, but need not be, the
same as the principal office in the State of Texas. The address of the
registered office may be changed from time to time by the Board of Directors.
The present registered office of the Corporation is 725 Market Street,
Wilmington, Delaware.
1.3 REGISTERED AGENT. The Corporation shall have and continuously maintain in
the State of Delaware, a registered agent, which agent may be either an
individual resident of the State of Delaware whose business office is identical
with the Corporation's registered office, or a domestic corporation, or a
foreign corporation authorized to transact business in the State of Delaware
which has a business office identical with the Corporation's registered office.
The registered agent may be changed from time to time by the Board of Directors.
The present registered agent of the Corporation is The Company Corporation.
ARTICLE II.
SHAREHOLDERS
2.1 ANNUAL SHAREHOLDERS' MEETINGS. An annual meeting of the Shareholders shall
be held each year on a day and hour to be selected by the President of the Board
of Directors within six months after the end of the corporation's fiscal year,
for the purpose of electing Directors and for the transaction of such other
business as may come before the meeting. The annual meeting shall not be held on
a date declared a legal holiday by the State of Delaware. If the election of the
Directors shall not be held on the date selected for any annual meeting of
Shareholders, or at any adjournment therefore, the Board of Directors shall
cause the election to be held at a special meeting of the Shareholders as soon
thereafter as conveniently may be held.
2.2 SPECIAL MEETING. Special meetings of the Shareholders, for any purpose or
purposes, unless otherwise prescribed by statute or these Bylaws, may be called
by the President, the Board of Directors, or the holders of not less than one
tenth of all outstanding shares of the Corporation entitled to vote at the
meeting. Business translated at a special meeting shall be limited to the
purposes stated in the notice of the meeting.
2.3 PLACE OF MEETING. The Board of Directors or the President may designate any
place, either within or without the State of Delaware, unless otherwise
prescribed by statute, as the place of meeting for any annual meeting or for any
special meeting of Shareholders. 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 Delaware, unless otherwise prescribed by statute, 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 the principal office of the
Corporation in the State of Delaware.
2.4 NOTICE OF MEETING. Written or printed notice stating the place, day and hour
of the meeting and, in the case of a special meeting, the purpose or purposes
for which the meeting is called, shall be delivered not less than ten (10) nor
more than fifty (50) days before the date of the meeting, either personally or
by mail, by or at the direction of the President, the Secretary, or the officer
or person calling the meeting, to each Shareholder of record entitled to vote at
such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States Mail addressed to the Shareholder at this address
as it appears on the stock transfer hook of the
<PAGE>
Corporation, with postage thereon prepaid.
2.5 ACTION WITHOUT MEETING. Unless otherwise provided by the Certificate of
Incorporation, any action required to be taken at any annual or special meeting
of stockholders, or any action which may be taken at any annual or special
meeting, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing.
2.6 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the purpose of
determining Shareholders entitled to notice of or to vote at any meeting of
Shareholders or any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of Shareholders for any other
proper purpose, the Board of Directors of the Corporation may provide that the
stock transfer books shall be closed for a stated period but not to exceed, in
any case, fifty (50) days. If the stock transfer books shall be closed for the
purpose of determining Shareholders entitled to notice of or to vote at a
meeting of Shareholders, such books shall be closed for at least ten (10) days
immediately preceding such meeting In lieu of closing the stock transfer books
the Board of Directors may fix in advance a date as the record date for such
determination of Shareholders, such date in any case to be not more than fifty
(50) days 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 stock transfer books are not closed and
no record date is fixed for the determination of Shareholders entitled to notice
of or to vote at a meeting of Shareholders, or Shareholders entitled to receive
payment of a dividend, the date on which notice of the meeting is mailed or the
date on which the resolution of the Board of Directors declaring-such dividend
is adopted, as the cave 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 adjornment thereof except where the
determination has been made through the closing of stock transfer books and the
stated period of closing has expired.
2.7 VOTING LISTS.
A. The officer or agent having charge of the stock 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
address of and the number of shares held by each, which list, for a period of
ten (10) days prior to such meeting, shal1 be kept on file at the registered
office of the Corporation or the principal office of the Corporation, if it be
other than the registered office, and shall be subject to inspection by any
Shareholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any Shareholder during the whole time of the meeting. The
original stock transfer book shall be prima facie evidence as to who are the
Shareholders entitled to examine such list or transfer books or to vote at any
meeting of Shareholders.
B. Failure to comply with the requirements of this Section shall not affect the
validity of any action taken at such meeting.
C. An officer or agent having charge of the stock transfer books who shall fail
to prepare the list of Shareholders or keep the same on file for a period of ten
(10) days, or produce and keep it open for inspection at the meeting, as
provided in this Section, shall be liable to any Shareholder suffering damage on
account of such failure, to the extent of such damage. In the event that such
officer or agent does not receive notice of a meeting of Shareholders
sufficiently in advance of the date of such meeting reasonable to enable him or
her to comply with the duties prescribed by this Section, the Corporation, but
not such officer or agent, shall be liable to any Shareholder suffering damage
on account of such failure, to the extent of such damage.
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2.8 QUORUM OF SHAREHOLDERS.The holders of a majority of the shares of the
Corporation entitled to vote, represented or by proxy, shall constitute a quorum
at a meeting of Shareholders. The vote of the holders of a majority of the
shares entitled to vote, and thus represented at a meeting at which a quorum is
present, shall be the act of the Shareholders' meeting, unless the vote of a
greater number is required by law.
2.9 VOTING OF SHARES.
A. Each outstanding share, regardless of class, shall be entitled to one vote on
such matter submitted to a vote of a meeting of Shareholders, except to the
extent that the Articles of Incorporation provide for more or less than one vote
per share or limit or deny voting rights to the holders of the shares of any
class of series, and except as otherwise provided by the General Corporation Law
of Delaware Business Corporation Act.
B. Treasury shares, shares of this Corporation's stock owned by another
corporation, the majority of the voting stock of which is owned or controlled by
this Corporation, and shares of this Corporation's stock held by this
Corporation in a fiduciary capacity shall not be voted, directly or indirectly,
at any meeting, and shall not be counted in determining the total number of
outstanding shares at any given time.
C. A Shareholder may vote either in person or by proxy executed in writing by
the Shareholder or by the Shareholder's duly authorized attorney in fact. No
proxy shall be valid after eleven (11) months from the date of its execution
unless otherwise provided in the proxy. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and unless otherwise made
irrevocable by law.
D. At each election for Directors every Shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
shares owned by the Shareholder for as many persons as there are Directors to be
elected and for whose election the Shareholder has a right to vote. (For
cumulative voting see Section 2.13 below.)
E. Shares standing in the name of another corporation, domestic or foreign, may
be voted by such officer, agent, or proxy as the Bylaws of such corporation may
authorize or, in the absence of such authorization, as the Board of Directors of
such corporation may determine; provided, however, that when any foreign
corporation without a permit to do business in this State lawfully owns or may
lawfully own or acquire stock in the Corporation, it shall not be lawful for
such foreign corporation to vote said stock and participate in the management
and control of the business and affairs of the Corporation, as other
Shareholders, subject to all laws, rules and regulations governing Delaware
corporations and especially subject to the provisions of the antitrust laws of
the State of Delaware.
F. Shares held by an administrator, executor, guardian, or conservator may be
voted by him or her so long as such shares forming a part of the estate being
served by him or her, either in person or by proxy, without a transfer of such
shares into his or her name. Shares standing in the name of a trustee may be
voted by that trustee, either in person or by proxy, but no trustee shall be
entitled to vote shares held by him or her without a transfer of such shares
into his or her name as trustee.
G. Shares standing in the name of a receiver may be voted by such receiver, and
shares held by or under the control of a receiver may be voted by such receiver
without the transfer thereof into his name if authority so to do be contained in
a appropriate order of the court by which such receiver was appointed.
H. A Shareholder whose shares are pledged shall be entitled to vote such shares
until the shares have been transferred into his name of the pledged, and
thereafter, the pledgee shall be entitled to vote the shares so transferred.
2.10 METHOD OF VOTING. Voting on any question or in any election may be by voice
or show of hands unless the presiding officer shall order, or any Shareholder
shall demand, that voting be by written ballot.
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2.11 RULES OF PROCEDURE. To the extent applicable, Robert's Rule of Order may
govern the conduct and procedure at all Shareholders' meetings.
2.12 WAIVER BY UNANIMOUS CONSENT IN WRITING. Any action required by the General
Corporation Law of Delaware Act to be taken at a meeting of the Shareholders, or
any 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 matter thereof, and then delivered to the Secretary of the Corporation
for inclusion in the minute book of the Corporation. Such consent shall have the
same force and effect as any unanimous vote of Shareholders, and may be stated
as such in any articles or documents filed with the Secretary of State.
2.13 TELEPHONE MEETINGS. Subject to the provisions required or permitted by the
General Corporation Law of Delaware for Notice of Meetings, unless otherwise
restricted by the Articles of Incorporation or these Bylaws, Shareholders may
participate in and hold a meeting of Shareholders, by means of conference
telephone or similar communications 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,
except where a person participates in the meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting is
not lawfully called or convened.
2.14 CUMULATIVE VOTING. Cumulative voting is expressly prohibited by the
Articles of Incorporation.
2.15 PRE-EMPTIVE RIGHTS. No holder of any stock of the Corporation shall be
entitled as a matter of right to purchase or subscribe for any part of any stock
of the Corporation authorized by the Articles of Incorporation or of any
additional stock of any class to be issued by reason of any increase of the
authorized stock of tile Corporation, or of any bonds, certificates or
indebtedness, debentures, warrants, options or other securities convertible into
any class of stock of the Corporation, but any stock authorized by the Articles
of Incorporation or any such additional authorized issue of any stock or
securities convertible into any stock may be issued and disposed of by the Board
of Directors to such persons, firms, corporations or associations for such
consideration and upon such terms and in such manner as the Board of Directors
may in its discretion determine without offering any thereof on the same terms
or on any terms to the Shareholder then of record of to any class of
Shareholders, provided only that such issuance may not be inconsistent with any
provision of law or with any of the provisions of the Articles of Incorporation.
ARTICLE III.
DIRECTORS
3.1 MANAGEMENT. The business and affairs of the Corporation shall be managed by
its Board of Directors. Directors need not be residents of Delaware of
Shareholders of the Corporation in order to qualify as a Director.
3.2 NUMBER. The number of directors of the Corporation shall consist of from one
to nine members as shall be elected by the Shareholders from time to time. The
number of Directors may be increased or decreased from time to time by amendment
to this section of the Bylaws, but no decrease in the number of Directors shall
have the effect of shortening the term of any incumbent Director.
3.3 ELECTION. At the first annual meeting of Shareholders and at each annual
meeting thereafter, the Shareholders shall elect Directors to hold office until
the next succeeding annual meeting.
3.4 TERM OF OFFICE. Unless removed in accordance with these Bylaws each Director
shall hold office for the term of which the Director is elected and until the
Director's successor shall have been elected and qualified.
3.5 REMOVAL. The entire Board of Directors or any Director may be removed from
office either with or without cause at any special meeting of Shareholders by
the affirmative vote of a majority in number of shares of
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the shareholders present in person or by proxy at such meeting and entitled to
vote for the election of such Director or Directors if notice of intention to
act upon the question of removing such Director shall have been stated as one of
the purposes for the calling of such meeting and such meeting shall have been
called in accordance with these Bylaws.
3.6 VACANCY
A. Any vacancy occurring in the Board of Directors may be filled in accordance
with paragraph C of this section or may be filled by the affirmative vote of a
majority of the remaining Directors, though less than a quorum of the Board of
Directors. A Director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office.
B. A Directorship to be filled by reason of an increase in the number of
Directors may be filled in accordance with paragraph C of this section or may be
filled by the Board of Directors for a term of office continuing only until the
next election of one or more Directors by the Shareholders; provided that the
Board of Directors may not fill more than two such Directorship during the
period between any two successive annual meetings of Shareholders.
C. Any vacancy occurring in the Board of Directors or any Directorship to be
filled by reason of an increase in the number of Directors may be filled by
election at an annual or special meeting of Shareholders called for that
purpose.
3.7 QUORUM. A majority of the number of Directors fixed by these Bylaws shall
constitute a quorum for the transaction of business unless a greater number is
required by law or these Bylaws. The act of the majority of the Directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, unless a greater number is required by law or these Bylaws.
3.8 ANNUAL DIRECTORS' MEETINGS. Immediately after the annual meeting of the
Shareholders and at the place such meeting of the Shareholders has been held,
the Board of Directors shall meet each year for the purpose of election of
officers and consideration of any other business that may properly be brought
before the meeting. No notice of any kind to either old or new members of the
Board of Directors for this annual meeting shall be necessary.
3.9 REGULAR MEETINGS. The Board of Directors may provide by resolution the time
and place, either within or without the State of Delaware, for the holding of
regular meetings without other notice that such resolution.
3.10 SPECIAL MEETINGS. Special meetings of the Board of Directors may be called
by the President or shall be called at the request of any two members of the
Board of Directors and shall be held upon notice by letter, telegram, or fax,
delivered for transmission not later than during the third day immediately
preceding the day for the meeting, or by word of mouth, telephone, or radiophone
received not later than during the second day immediately preceding the day for
the meeting. Notice of any special meeting of the Board of Directors may be
waived before or after the time of the meeting. 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 Delaware, as the place for holding any special
meeting of the Board of Directors called by them.
3.11 NO STATEMENT Of PURPOSE OF MEETING REQUIRED. Neither the business proposed
to be transacted, nor the purpose of any regular or special meeting of the Board
of Directors need be specified in the notice or waiver of notice of such
meeting.
3.12 COMPENSATION. By resolution of the Board of Directors, the Directors may be
paid their expenses, if any, of attendance at such 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 therefore.
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3.13 ATTENDANCE AND PRESUMPTION OF ASSENT. Attendance of a Director at a meeting
shall constitute a waiver of notice of such meeting, except where a Director
attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened. A
Director 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 that Director's dissent shall be entered in the minutes of
the meeting or unless that Director shall file a 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 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 favor of such action.
3.14 EXECUTIVE AND OTHER COMMITTEES. The Board of Directors, by resolution
adopted by a majority of the full Board of Directors, may designate from among
its members an executive committee and one or more other committees,'each of
which, to the extent provided in such resolution or in these Bylaws, shall have
and may exercise all of the authority of the Board of Directors, except that no
such committee shall have the authority of the Board of Directors in reference
to amending the Articles of Incorporation of the Corporation, approving a plan
of merger or consolidation, recommending to the Shareholders the sale, lease, or
exchange of all or substantially all of the property and assets of the
Corporation other than in the usual and regular course of the Corporation's
business, recommending to the Shareholders a voluntary dissolution of the
Corporation or a revocation thereof, amending, altering, or repealing these
Bylaws or adopting new Bylaws, filling vacancies in the Board of Directors of
any such committee, filling any Directorship to be filled by reason of an
increase in the number of Directors, electing or removing officers or members of
any such committee, fixing the compensation of any member of such committee, or
altering or repealing any resolution of the Board of Directors which by its
terms provides that it shall not be so amendable or repealable; and, unless such
resolution or these Bylaws expressly so provide, no such committee shall have
the power or authority to declare a dividend or to authorize the issuance of
shares of the Corporation. The designation of such committee and the delegation
thereto of authority shall not operate to relieve the Board of Directors, or any
member thereof, of any responsibility imposed by law.
3.15 REMOVAL OF COMMITTEE MEMBERS. Any member of a committee elected by the
Board of Directors whenever in its judgment the best interests of the
Corporation will be served thereby but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
Election or appointment of a member of a committee shall not itself create
contract rights.
3.16 WAIVER BY UNANIMOUS CONSENT IN WRITING. Any action required or permitted to
be taken at a meeting of the Board of Directors, any Executive Committee or any
other committee of the Board of Directors may be taken without a meeting if a
consent in writing, setting forth the action so taken is signed by all of the
Board of Directors, any Executive Committee or any other committee of the Board
of Directors us the case may be and then delivered to the Secretary of the
Corporation for inclusion in the Minute Book of the Corporation. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State.
3.17 TELEPHONE MEETING. Subject to the provisions required or permitted by the
General Corporation Law of Delaware for Notice of Meetings, unless otherwise
restricted by the Articles of Incorporation, members of the Board of Directors,
or members of any committee designated by the Board of Directors, may
participate in and hold a meeting of the Board of Directors, or committee by
means of conference telephone or similar communications 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, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
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ARTICLE IV.
OFFICERS
4.1 NUMBER. The principal officers of the Corporation shall consist of a
President, one or more Vice President (the number thereof to be determined by
the Board of Directors), a Secretary and a Treasurer, each of whom shall be
elected by the Board of Directors. Such other officers and assistant officers
and agents as may be deemed necessary may be elected or appointed by the Board
of Directors. Any two (2) or more offices may be held by the same person. No
officer need be a Shareholder, a Director, or a resident of Delaware.
4.2 ELECTION AND TERM OF OFFICE. The officers of the Corporation shall be
elected by the Board of Directors at its annual meeting or as soon thereafter as
conveniently possible. New or vacated offices may be filled at any meeting of
the Board of Directors. The subordinate officers and agents not elected or
appointed by the Board of Directors shall be appointed by the President or any
other principal officer to whom the President shall delegate the authority. Each
officer shall hold office until that officer's successor shall have been fully
elected and shall have qualified or until that officer's death or until that
office shall resign or shall have been removed in the manner hereinafter
provided. Election or appointment of an officer or agent shall not of itself
create contract rights.
4.3 REMOVAL. Any officer or agent elected or appointed by the Board of Directors
may be removed by the Board of Directors whenever in its judgment the best
interests of the Corporation would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights.
4.4 VACANCIES. A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the Board of Directors for the
unexpired portion of the term as herein provided.
4.6 AUTHORITY. Officers and agents shall have such authority and perform such
duties in the management of the Corporation as are provided in these Bylaws or
as may be determined by resolution of the Board of Directors not inconsistent
with these Bylaws.
4.6 PRESIDENT. The President shall be the principal executive officer of the
Corporation and shall have general and active management of the business and
affairs of the Corporation. The President shall preside at all meetings of the
Shareholders and of the Board of Directors, and may sign, with the Secretary or
an Assistant Secretary, certificates for shares of the Corporation, any deeds,
mortgages, bonds, contracts, or other instruments which the Board of Directors
has authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
Bylaws to some other officer or agent of the Corporation, or shall be required
by law to be otherwise signed or executed. The President shall see that all
orders and resolutions of the Board of Directors are carried into effect, and
shall perform all duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from time to time.
4.7 VICE PRESIDENT. In the absence of the President or in the event of the
President's death, inability or refusal to act, the Vice President, or in the
event there be more than one Vice President, the Vice Presidents in the order
designated by the Board of Directors or in the absence of any designation then
in the order of their election, shall perform all the duties of the President,
and when so acting shall have all the powers of and be subject to all the
restrictions upon the President. The Vice President shall perform such other
duties as from time to time may be assigned by the President or by the Board of
Directors.
4.8 SECRETARY. The Secretary shall keep the minutes of the Shareholders' and
Board of Directors' meetings in one or more books provided for that purpose; see
that all notices are duly given in accordance with the provisions of these
Bylaws or as required by law; be custodian of the corporate records and of the
seal of the Corporation and see that the seal of the Corporation is affixed to
all certificates for shares prior to the issue thereof and to the execution of
which on behalf of the Corporation under its seal is duly authorized in
accordance with the
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provisions of the Bylaws; keep a register of the post office address of each
Shareholder which shall be furnished to the Secretary by such Shareholder; sign
with the President certificates for shares of the Corporation, the issue of
which shall have been authorized by resolution of the Board of Directors; have
general charge of the stock transfer books of the Corporation; and in general
perform all duties incident to the office of Secretary and such other duties as
from time to time may be assigned by the President or by the Board of Directors.
4.9 TREASURER. The Treasurer shall be the principal financial officer of the
Corporation and shall have charge and custody and be responsible for all funds
and securities of the Corporation; receive and give receipts for monies due and
payable to the Corporation from any source whatsoever, and deposit all such
monies in the name of the Corporation in such banks, trust companies or other
depositories as shall be selected by the Board Of Directors; render to the
President and the Board of Directors, whenever the same shall be required, an
account of all transactions as Treasurer and of the financial condition of the
Corporation; if required so to!do by the Board of Directors for the faithful
condition of the Corporation; if required so to do by the Board of Directors for
the faithful performance of the duties of this office and for the restoration to
the Corporation, in case of the Treasurer's death, resignation, retirement, or
removal from office, of all books, papers, vouchers, money, and other property
of whatever kind in the Treasurer's possession or under his or her control
belonging to the Corporation; and in general perform all of the duties incident
to the office of Treasurer and such other duties as from time to time may be
assigned by the President or by the Board of Directors.
4.10 ASSISTANT TREASURER AND ASSISTANT SECRETARY. The Assistant Treasurer
shall, if required by the Board of Directors, give bond for the faithful
discharge of his or her duties in such sums and with such sureties as the
Board of Directors shall determine. The Assistant Secretary as "hereunto
authorized by the Board of Directors may sign with the President
certificates for shares of the Corporation, the issue of which shall have
been authorized by a resolution of the Board of Directors. The Assistant
Treasurer and Assistant Secretary, in general, shall perform such duties as
shall be assigned to them by the Treasurer or the Secretary, respectively,
or by the President or the Board of Directors.
4.11 SALARIES. The salaries of the officers shall be fixed from time to time by
the Board of Directors and no Officer shall be prevented from receiving such
salary by reason of the fact that the officer is also a Director of the
Corporation.
ARTICLE V.
CONTRACTS. LOANS CHECKS AND DEPOSITS
5.1 CONTRACTS DEEDS MORTGAGES ETC. Subject always to the specific direction of
the Board of Directors, all deeds and mortgages made the the Corporation all
other written contracts and agreements to which the Corporation shall be a party
shall be executed in its name by the President or Vice President (or one of the
Vice Presidents if there are more than one), and when requested, the Secretary
shall attest to such signatures and affix the corporate seal to the instruments.
5.2 LOANS. No indebtedness, other than for office furniture and equipment which
does not exceed $10,000.00 in amount, shall be contracted on behalf of the
Corporation and no evidence of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
5.3 CHECKS DR AFT. ETC. All checks, drafts, notes, bonds, bills of
exchange, other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the Corporation, shall be signed by
such officer or officers, agent or agents of the Corporation and in such
manner as shall from time to time be determined or other depositories as
the Board of Directors may select.
5.4 DEPOSITS. All funds of the Corporation not otherwise employed, shall be
deposited from time to time to the credit of the Corporation in such banks,
trust companies or other depositories as the Board of Directors may -elect.
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ARTICLE Vl.
CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 CERTIFICATES FOR SHARES. The Corporation shall deliver certificates
representing all shares to which Shareholders are entitled in such form as may
be determined by the Board of Directors. Each certificate representing shares
shall state upon the face thereof that the Corporation is organized under the
laws of the State of Delaware; the name of the person to whom it is issued; the
number and class of shares and the designation of the series, if any, which such
certificate represents; the par value of each represented by such certificate,
or a statement by law. Such certificates shall be signed by the President or
Vice President and either by the Secretary or Assistant Secretary or such
officer or officers as the Board of Directors shall designate, and may be seated
with the seal of the Corporation or a facsimile thereof.
6.2 FACSIMILE SIGNATURES. The signatures of the President or Vice President,
Secretary or Assistant Secretary or such officer or officers as these Bylaws or
the Board of Directors of the Corporation shall prescribe upon a certificate may
be facsimiles, if the certificate is countersigned by a transfer agent or
registered by a registrar, either of which is other than the Corporation itself
or an employee of the Corporation. In case any officer who has signed or whose
facsimile signature has been placed upon such certificate shall have ceased to
be such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if he or she were such officer at the date
of its issuance.
6.3 ISSUANCE. Shares (both treasury and authorized but unissued) may be issued
for such consideration, not less than par value, and to such persons as the
Board of Directors may determine from time to time.
6.4 SUBSCRIPTIONS. Unless otherwise provided in the subscription agreement
subscriptions for shares, whether made before or after organization of the
Corporation, shall be paid in full at such time or in such installments and at
such times as shall be determined by the Board of Directors. Any call made by
the Board of Directors for payment on subscriptions shall be uniform as to all
shares of the same class or as to all shares of the same series, as the case may
be. In case of default in the payment on any installment or call when payment is
due, the Corporation may proceed to collect the amount due in the same manner as
any debt due to the Corporation.
6.5 PAYMENT. The consideration paid for the issuance of shares of the
Corporation shall consist of money actually paid, labor or services actually
performed or property, both tangible and intangible, actually received.
Certificates for shares may not be issued until the full amount of the
consideration, fixed as provided by law, has been paid. When such consideration
shall have been paid to the Corporation or to a corporation of which all of the
outstanding shares of each class are owned by the Corporation, the shares shall
be deemed to have been issued and the subscriber or Shareholder entitled to
receive such issue shall be a Shareholder with respect to such shares, and the
shares shall be considered fully paid and non-assessable. Neither promissory
notes nor the promise of future services shall constitute payment or partial
payment for shares of the Corporation. In the absence of fraud in the
transaction, the judgment of the Board of Directors or the Shareholders as the
case may be, as to the value of the consideration received for shares shall be
conclusive.
6.6 LIEN. The Corporation shall have a first and prior lien on all shares of its
stock and upon all dividends being declared upon the same for any indebtedness
of the respective holders thereof to the Corporation.
6.7 REPLACEMENT OF LOST OR DESTROYED CERTIFICATES. The Board of Directors
may direct a new certificate or certificates to be issued in place of any
certificate or certificates thereto-fore issued by the Corporation alleged
to have been lost or destroyed, upon the making of an affidavit of fact by
the person claiming the certificate or certificates representing shares to
be lost or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost
or destroyed certificate or certificates or the owner's legal
representative, to advertise the same in such manner as it shall require
and/or to give the Corporation a bond with a surety or
9
<PAGE>
sureties satisfactory to the Corporation with respect to the certificate or
certificates alleged to have been lost or destroyed.
6.8 TRANSFER OF SHARES. Shares of stock shall be transferable only on the books
of the Corporation by the holder thereof in person or by the holder's duly
authorized attorney. Upon surrender to the Corporation or the transfer agent of
the Corporation of a certificate representing shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, the Corporation or its transfer agent shall issue a new certificate to
the person entitled thereto, cancel the old and record the transaction upon its
books.
6.9 REGISTERED SHAREHOLDERS. The Corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in fact thereof
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such share or shares on the part of any other person, whether
or not it shall have express or other notice thereof, except as otherwise
provided by law.
ARTICLE: VII.
DIVIDENDS AND RESERVES
7.1 DECLARATION AND PAYMENT. Subject to provisions of the statutes and the
Articles of Incorporation (if any), dividends may be declared by the Board of
Directors at any regular or special meeting and may be paid in cash, property,
or in shares of the Corporation. Such declaration and payment shall be at the
discretion of the Board of Directors.
7.2 RECORD DATE. The Board of Directors may fix in advance a record date for the
purpose of determining Shareholders entitled to receive payment of any dividend,
such record date to be not more than fifty (50) days prior to the payment date
of such dividend, or the Board of Directors may close the stock transfer books
for such purpose for a period of not more than fifty (50) days prior to the
payment date of such dividend. In the absence of any action by the Board of
Directors, the date upon which the Board of Directors adopt the resolution
declaring such dividend shall be the record date.
7.3 RESERVES. There may be created by resolution of the Board of Directors out
of the earned surplus of the Corporation such reserve or reserves as the
Directors from time to time, in their discretion, think proper to provide for
contingencies, or to equalize dividends, or to repair or maintain any property
of the Corporation, or for such other purposes as the Directors shall think
beneficial to the Corporation, and the Directors may modify or' abolish any such
reserve in the manner in which it was created.
ARTICLE VIII.
INDEMNIFICATION
8.1 DEFINITIONS. In this Article:
A, "Corporation" includes any domestic or foreign predecessor entity of the
Corporation in a merger, consolidation, or other transaction in which the
liabilities of the predecessor are transferred to the Corporation by operation
of law and in any other transaction in which the Corporation assumes the
liabilities of the predecessor but does not specifically exclude liabilities
that are the subject matter of this Article VIII.
B. "Director" means any person who is or was a director of the Corporation and
any person who, while a director of the Corporation, is or was serving at the
request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary or another foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan, or other enterprise.
10
<PAGE>
C. "Expenses" include court costs and attorneys' fees.
D. "Official capacity" means:
1. When used with respect to a director, the office of Director in the
Corporation, and
2. When used with respect to a person other than a Director, the elective or
appointive office in the Corporation held by the officer or the employment or
agency relationship undertaken by the employee or agent in behalf of the
Corporation, but
3. In both Paragraphs (1) and (2) does not include service for any other foreign
or domestic corporation or any partnership, joint venture, sole proprietorship,
trust, employee benefit plan, or other enterprise.
E. "Proceeding" means any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, arbitrative, or
investigative, any appeal in such an action, suit, or proceeding, and any
inquiry or investigation that could lead to such an action, suit, or proceeding.
8.2 POWER TO INDEMNIFY. The Corporation may indemnify a person who was, is, or
is threatened to be made a named defendant or respondent in a proceeding because
the person is or was a Director only if it is determined in accordance with
Section 8.6 of this Article that the person:
A. Conducted himself in good faith;
B. Reasonably believed:
1. In the case of conduct in his official capacity as a Director of the
Corporation, that his conduct was in the Corporation's best interests; and
2. In all other cases, that his conduct was at least not opposed to the
Corporation's best interests; and
C. In the case of any criminal proceeding, had no reasonable cause to believe
his conduct was unlawful.
8.3 DIRECTOR LIMITATION. A Director may not be indemnified under Section 8.2
of this Article for obligations resulting from a proceeding:
A. In which the person is found liable on the basis that personal benefit was
improperly received by him, whether or not the benefit resulted from an action
taken in the person's official capacity; or
B. In which the person is found liable to the Corporation.
8.4 TERMINATION OF A PROCEEDING. The termination of a proceeding by judgment,
order, settlement, or conviction, or on a plea of nolo contendere or its
equivalent is not of itself determinative that the person did not meet the
requirements set forth in Section 8.2 of this Article.
8.5 PROCEEDING BROUGHT BY THE CORPORATION. A person may be indemnified under
Section 8.2 of this Article against judgments, penalties (including excise
and similar taxes), fines, settlements, and reasonable expenses actually
incurred by the person in connection with the proceeding; but if the
proceeding was brought by or in behalf of the Corporation, the indemnification
is limited to reasonable expenses actually incurred by the person in connection
with the proceeding.
8.6 DETERMINATION OF INDEMNIFICATION. A determination of indemnification under
Section 8.2 of this Article must be made:
A. By a majority vote of a quorum consisting of Directors who at the time of the
vote are not named
11
<PAGE>
defendants or respondents in the proceeding;
B. If such a quorum cannot be obtained, by a majority vote of a committee of the
Board of Directors, designated to act in the matter by a majority vote of all
Directors, consisting solely of two or more Directors who at the time of the
vote are not named defendants or respondents in the proceeding;
C. By special legal counsel selected by the Board of Directors or a committee of
the Board by vote as set forth in Subsection A or B of this Section 8.6, or, if
such a quorum cannot be obtained and such a committee cannot be established, by
a majority vote of all Directors; or
D. By the Shareholders in a vote that excludes the shares held by Directors who
are named defendants or respondents in the proceeding.
8.7 AUTHORIZATION OF INDEMNIFICATION. Authorization of indemnification and
determination as to reasonableness of expenses must be made in the same
manner as the determination that indemnification is permissible, except
that if the determination that indemnification is permissible is made by
special legal counsel, authorization of indemnification and determination
as to reasonableness of expenses must be made in the manner specified by
Subsection C of Section 8.6 of this Article, for the selection of special
legal counsel. A provision contained in the Articles of Incorporation, the
Bylaws, a resolution of Shareholders or Directors, or an agreement that
makes mandatory the indemnification permitted under Section 8.2 of this
Article shall be deemed to constitute authorization of indemnification in
the manner required by this Section 8.7 even though such provision may not
have been adopted or authorized in the same manner as the determination
that indemnification is permissible.
8.8 INDEMNIFICATION OF A DIRECTOR.
A. The Corporation shall indemnify a Director against reasonable expenses
incurred by him or her in connection with a proceeding in which he or she is
named defendant or respondent because he or she is or was a Director if he or
she has been wholly successful, on the merits or otherwise, in the defense of
the proceeding.
B. If, in a suit for the indemnification required by Section 8.8 of this
Article, a court of competent jurisdiction determines that the Director is
entitled to indemnification under that section, the court shall order
indemnification shall award to the director the expenses incurred in securing
the indemnification.
C. If, upon application of a Director; a court of competent jurisdiction
determines, after giving any notice the court considers necessary, that the
Director is fairly and reasonable entitled to indemnification in view of all the
relevant circumstances, whether or not he or she has met the requirements set
forth in Section 8.2 of this Article or has been adjudged liable in the
circumstances described in Section 8.3 of this Article, the court may order the
indemnification that the court determines is proper and equitable. The court
shall limit indemnification to reasonable expenses if the proceeding is brought
by or in behalf of the Corporation or if the Director is found liable on the
basis that personal benefit was improperly received by him, whether or not the
benefit resulted from an action taken in the person's official capacity.
D. Reasonable expenses incurred by a Director who was, is or is threatened to be
made a named defendant or respondent in a proceeding may be paid or reimbursed
by the Corporation in advance of the final disposition of the proceeding after:
1. The Corporation receives a written affirmation by the director of his good
faith belief that he has met the standard of conduct necessary for
indemnification under this Article and a written undertaking by or on behalf of
the Director to repay the amount paid or reimbursed if it is ultimately
determined that he has not met those requirements; and
2. A determination that the facts then known to those making the determination
would not preclude
12
<PAGE>
indemnification under this Article.
E. The written undertaking required by Subsection D of this Section 8.8 must be
an unlimited general obligation of the Director but need not be secured. It may
be accepted without reference to financial ability to make repayment.
Determinations and authorizations of payment under Subsection D of this Section
8.8 must be made in the manner specified by Section 8.6 of this Article for
determining that indemnification is permissible.
F. Notwithstanding any other provision of this Article, a Corporation may pay or
reimburse expenses incurred by a Director in connection with his appearance as a
witness or other participation in a proceeding at a time when he or she is not a
named defendant or respondent in the proceeding.
8.9 INDEMNIFICATION OF OTHERS.
A. An officer of the Corporation shall be indemnified as, and to the same
extent, provided by Subsections A, B and C of this Section 8.9 for a Director
and is entitled to seek indemnification under those Subsections to the same
extent as a Director. The Corporation may indemnify and advance expenses to an
officer, employee, or agent of the Corporation to the same extent that it may
indemnify and advance expenses to Directors under this Article.
B. The Corporation may indemnify and advance expenses to persons who are not or
were not officers, employees, or agents of the Corporation but who ar c or' were
serving at the rcqucst of the Corporation as a director, officer, partner,
venturer proprietor, trustee employee agent or similar functionary of another
foreign or domestic corporation, partnership, joint venture, sole proprietorship
trust, employee benefit plan, or other enterprise to the some extent that it may
indemnify and advance expenses to Directors under this Article.
C. The Corporation may indemnify and advance expenses to an officer, employee,
agent, or person identified in Subsection B of this Section 8.9 and who is not a
Director to such further extent, consistent with law, as may be provided by the
Corporation's Articles of Incorporation, Bylaws, general or specific action of
its Board of Directors, or contract or as permitted or required by common law.
8.10 INDEMNITY INSURANCE. A Corporation may purchase and maintain insurance on
behalf of any person who is or was a Director, officer, employee, or agent of
the Corporation or who is or was serving at the request of the Corporation as a
director, of ficer, partner, venturer, er, proprietor, trustee, employee, agent,
or similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan, or other
enterprise, against any liability asserted against him or her and incurred by
him or her in such a capacity or arising out of his or her status as such a
person, whether or not the Corporation would have the power to indemnify him or
her against that liability under this Article.
8.11 REPORTS TO SHAREHOLDERS. Any indemnification of or advance of expenses
to a Director in accordance with this Article shall be reported in writing
to the Shareholders with or before the notice or waiver of notice of the
next Shareholders' meeting or with or before the next submission to
Shareholders of a consent to action without a meeting pursuant to The
General Corporation Law of Delaware and, in any case, within the 12-month
period immediately following the date of the indemnification or advance.
8 12 EMPLOYEE BENEFIT PLAN. For purpose of this Article, the Corporation is
deemed to have requested a Director to serve an employee benefit plan whenever
the performance by him or her duties to the Corporation also imposes duties on
or otherwise involves services by him or her to the plan or participants or
beneficiaries of the plan pursuant to applicable law are deemed fines. Action
taken or omitted by him or her with respect to an employee benefit plan in the
performance of his or her duties for a purpose reasonable believed by him or her
to be in the interest of the participants and beneficiaries of the plan is
deemed to be for a purpose which is not opposed to the best interests of the
Corporation.
13
<PAGE>
ARTICLE IX.
MISCELLANEOUS
9.1 LIMITATION OF LIABILITY. No person shall be liable to the Corporation for
any loss or damage suffered by it on account of any action taken or omitted to
be taken by that person as a director, officer or employee of the Corporation in
good faith, if, in the exercise of ordinary care, this person:
A. Relied upon financial statements of the Corporation represented to this
person to be correct by the President or the officer of the Corporation having
charge of its books of account, or stated in a written report by an independent
public or certified public accountant or firm of such accountants fairly to
reflect the financial condition of the Corporation; or considered the assets to
be of their book value; or
B. Relied upon the written opinion of an attorney for the Corporation.
9.2 FISCAL YEAR. The Fiscal Year of the Corporation shall be fixed by resolution
of the Board of Directors.
9.3 SEAL. The corporate seal shall be in such form as may be determined by the
Board of Directors. Said seal may be used by causing it or a facsimile thereof
to be impressed or affixed or reproduced or otherwise
9.4 BOOKS AND RECORDS. The Corporation shall keep correct and complete books and
records of account and shall keep minutes of the proceedings of its Shareholders
and the Board of Directors, and shall keep at its registered office or principal
place of business, or at the office of its transfer agent or registrar, a record
of its Shareholders, giving the names and addressees of all Shareholders and the
number and class of the shares held by each. Any books, records and minutes may
be in written form or in any other form capable of being converted into written
form within a reasonable time. Any person who shall have been a holder of record
of shares for at least six (6) months immediately preceding demand, or shall be
the holder of record of at least five percent (5%) of all the outstanding shares
of a corporation, upon written demand stating the purpose thereof, shall have
the right to examine, in person or by agent, accountant, or attorney, at any
reasonable time or times, for any proper purpose, its relevant books and records
of account, minutes and records of Shareholders, and to make extracts therefrom.
9.5 ANNUAL STATEMENT. The Board of Directors shall present at each annual
meeting of Shareholders a full and clear statement of the business and condition
of the Corporation, including a reasonably detailed balance sheet and income
statement.
9.6 RESIGNATION. Any Director; officer or agent may resign by giving written
notice to the President or the Secretary. Such resignation shall take effect at
the time specified therein, or immediately if no time is specified therein.
Unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
9.7 AMENDMENT OF BYLAWS. These Bylaws may be altered, amended, or repealed
either by unanimous written consent of the Board of Directors, in the manner
stated in Article 3.16 herein, or at any meeting of the Board of Directors at
which a quorum is present, by the affirmative vote of a majority of the
Directors present at such meeting, provided notice of the proposed alteration,
amendment, or repeal be contained in the notice of such meeting.
9.8 INVALID PROVISIONS. If any part of these Bylaws shall be held invalid or
inoperative for any reason, the remaining parts, so far as possible and
reasonable, shall be valid and operative.
9.9 HEADINGS. The headings used in these Bylaws have been inserted for
administrative convenience only and do not constitute matter to be construed in
interpretation.
14
<PAGE>
9.10 WAIVER OF NOTICE. Whenever any notice is required to be given to any
Shareholder or Director of the Corporation, a Waiver thereof in writing signed
by the person or persons entitled to such notice, whether before or after the
time stated therein, shall be equivalent to the giving of such notice.
9.11 GENDER. Words which import one gender shall be applied to any gender
wherever appropriate and words which import the singular or plural shall be
applied to either the plural or singular wherever appropriate.
I, the undersigned, being the Secretary of Ultimistics Inc., do hereby certify
the foregoing to be the Bylaws of said Corporation, as adopted at a meeting of
the Directors held on the 12th day of October, 1988.
Secretary
15
EXHIBIT 10
(ENGLISH TRANSLATION FROM THE ORIGINAL DOCUMENT IN FRENCH)
POWER OF ATTORNEY OF MANAGEMENT NUMBER 147
(Mandat d'administration de biens n.147, prevu par l'article 64 du decret du 20
Juillet 1972 fixant les conditions d'application de la loi du 02 Janvier 1970)
Between the undersigned:
S.C.I. LAMARCK
Represented by its Manager Mr. Petit Jean-Claude
Lieudit Les Cateliers
BOSGUERARD DE MARCOUVILLE
27520 BOURGTHEROULDE
Hereafter named the mandator On the one hand,
And
U.F.F.I LE HAVRE S.A.
Represented by Mr. Dufy Pierre, Managing Director
Administrateur de biens au Havre, 47, Rue Jules Lecesne
Hereafter named the mandatary On the other hand,
Having fulfilled the obligations of the French Law number 70-9 of January 2nd,
1970 and to its decree number 72-678 of July 20th, 1972 by:
1. The possession of the professional ID card number 1110/GI issued by the
Prefecture of Rouen for his activity of Real-estate Management.
2. The subscription of guarantee towards the SOCAMAB, 18 Rue Beaurepaire - 75010
PARIS, which guarantees the amounts and values received on the account of the
activities of Real-Estate Management submitted to the Law of January 2, 19970
and to its decree.
IT HAS BEEN DONE AND AGREED THE FOLLOWING:
Gives, by the following document, to U.F.F.I LE HAVRE S.A., the power to manage
the property which follows:
S.C.I. LAMARCK
Immeuble Jean-Baptiste Lamarck
76360 BARENTIN
THEREFORE:
To manage the property mentioned above, to rent it out, either in writing or
verbally, at prices, charges, and conditions that the mandatary will judge
appropriate; to give or accept every notice, to draw up the inventories, to sign
every leases, renewal of leases and agreements.
<PAGE>
For all new rents, the mandator exempts the mandatary from the certified mail
required by the "article 67 du decret du 20 Juillet 1972" concerning the new
rentals, of which the mandatary will justify of, at the time of the presentation
of account.
The mandator expressly authorizes the mandatary to receive, without restriction,
the amounts representing the rents, charges, compensations, allowances,
benefits, guarantees, subsidies, advances, and more generally, any property,
amount or value of which the collection is a consequence of the management of
the others' property.
In case of difficulty and for lack of payment by the debtors, to institute all
legal proceedings, to make all commands, summons, and subpoena in front of the
Court or any administrative committee, to reconcile or request judgments, to
notify and execute them, to receive all titles and documents, to give or
retrieve the rent receipts and the discharge papers, to proceed to all payments
within the scope of the same administration and in particular the charges of
joint- ownership, to settle the due amounts on the basis of the taxation and
eventually collect them from the lessees, make all tax adjustment claims and tax
relief.
To represent the mandator in front of all private or public committees, to
deposit and notify all documents, engagements and contracts, to request the
issue of all certificates or else, and in particular the town-planning
certificates, in proper manner.
To hire and dismiss the maintenance staff (janitors), to decide of the salaries
and of the working conditions. On the account of current repairs and odd jobs:
stop all estimates for all current or urgent repairs and maintenance works that
became necessary to the preserving of the domestic premises or equipment, to
execute them, to pay the corresponding bills, the mandator promising all
ratifications and enforcing himself to reimburse all expenses and advances for
the fulfillment of the present power of attorney on this purpose.
On the account of major repairs or major maintenance work made under the
responsibility of the mandatary, there will be an obligation to create a
specific power of attorney between the mandator and the mandatary specifying,
besides the conditions of intervention of the mandatary, the mode of calculation
of the fees to receive.
It is here precised that the present power of attorney confers to the mandatary
an obligation of means and not of result.
DURATION:
The hereby power of attorney was agreed for a duration of ONE YEAR as of JULY
1st, 1992.
It is renewable by tacit agreement to renew yearly for a period of ten years for
lack of cancellation by one or the other parties by certified mail with
acknowledgment of receipt, three months before the expiration of the duration
stated above or at the date of the renewal.
PRESENTATION OF ACCOUNT - REMUNERATION
<PAGE>
The mandatary has to render an account of his management each quarter, at the
end of the term, and at least once a year, carefully detailed, of all his
spendings and amounts received, the mandator undertaking to reimburse any
spending or advances for the execution of the hereby power of attorney. The
mandatary is entitled, for his management, of a fix salary of FIVE per cent of
the receipts, tax in addition to the collected fees. This salary is entirely
payable by the mandator and will be deducted on each statement of payment.
It will not hinder the fixing and the collection of the rental fees and the
drawing up of leases at the expenses of the tenants and lessees of the managed
building, fixed by the laws, decrees or agreements enforced.
The hereby power of attorney is registered under the number 147 of the
chronological register held by UFFI, in agreement with the dispositions of the
"article 65 du decret du 20 Juillet 1972".
Crossed out words are not applicable.
Two copies have been drawn, one of them given to the mandator, for official
approval.
LE HAVRE, LE 24.1.94.
LU ET APPROUVE-BON POUR MANDAT
(Read and approved)
LU ET APPROUVE-MANDAT ACCEPTE
(Read and approved)
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
The subsidiary of the Registrant is SCI Barentin
The subsidiaries of SCI Barentin are SNC Gap and SCI Residence Lamarck
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
ULTIMISTICS FORM 10
</LEGEND>
<CIK> 0000843490
<NAME> ULTIMISTICS, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<CASH> 524,089
<SECURITIES> 0
<RECEIVABLES> 1,425,701
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,610,740
<PP&E> 42,054,178
<DEPRECIATION> (2,123,009)
<TOTAL-ASSETS> 43,542,287
<CURRENT-LIABILITIES> 2,499,202
<BONDS> 9,350,034
0
0
<COMMON> 29,172,919
<OTHER-SE> 1,822,767
<TOTAL-LIABILITY-AND-EQUITY> 43,542,287
<SALES> 5,050,445
<TOTAL-REVENUES> 5,050,445
<CGS> 1,672,540
<TOTAL-COSTS> 1,672,540
<OTHER-EXPENSES> 2,922,695
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 836,787
<INCOME-PRETAX> (381,577)
<INCOME-TAX> 0
<INCOME-CONTINUING> (381,577)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
