As filed with the Securities and Exchange Commission on June 27, 1996
File No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
INTERNATIONAL STANDARDS GROUP, LIMITED
(Exact name of issuer as specified in its charter)
Delaware 75-2274730
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Suite 300
3200 North Military Trail
Boca Raton, Florida 33431
(Address of principal executive offices) (Zip Code)
----------------
CONSULTING AND ACQUISITION MANAGEMENT AGREEMENT
WITH VISTAQUEST, INC.
(Full title of the plan)
----------------
Joseph L. Lents, Chairman
3200 North Military Trail, Suite 300
Boca Raton, Florida 33431
(407) 997-5880
(Name and address of agent for service)
Copy to:
James Schneider, Esq.
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, Florida 33301
(305) 763-1200
----------------
<PAGE>
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of securities Amount to be price per offering registration
to be registered registered(1) share(1) price(1) fee (1)
================================================================================
Common Stock
($.00001 par
value) 600,000 shares $ .97 $582,000 $200.69
Common Stock
underlying
Common Stock
Purchase
Warrants 750,000 shares $ .93 $697,500 $240.52
Total $1,279,500 $441.21
================================================================================
(1) Pursuant to Rule 457(h), the maximum offering price was calculated based
upon the average of the closing bid price of the Registrant's Common Stock
in the over-the-counter market on June 24, 1996 as to 600,000 Shares of
Common Stock and upon the average exercise price of Common Stock Purchase
Warrants to purchase 750,000 shares of Common Stock.
2
<PAGE>
INTERNATIONAL STANDARDS GROUP, LIMITED
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(b) OF REGULATION S-K
Form S-8 Item Number
and Caption Caption in Prospectus
-------------------- ---------------------
1. Forepart of Registration State- Facing Page of Registration
ment and Outside Front Cover Statement and Cover Page of
Page of Prospectus Prospectus
2. Inside Front and Outside Back Inside Cover Page of Pro-
Cover Pages of Prospectus spectus and Outside Cover
Page of Prospectus
3. Summary Information, Risk Fac- Not Applicable
tors and Ratio of Earnings to
Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Sales by Selling Security
Holder
8. Plan of Distribution Cover Page of Prospectus
and Sales by Selling
Security Holder
9. Description of Securities to be Consulting and Acquisition
Registered Management Agreement with
VistaQuest, Inc.
10. Interests of Named Experts and Not Applicable
Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Infor- Incorporation of Certain
mation by Reference Documents by Reference
13. Disclosure of Commission Posi- Indemnification of Direc-
tion on Indemnification for tors and Officers; Under-
Securities Act Liabilities takings
3
<PAGE>
PROSPECTUS
INTERNATIONAL STANDARDS GROUP, LIMITED
1,350,000 Shares of Common Stock
($.00001 par value)
Issued pursuant to the Company's
Consulting and Acquisition Management Agreement
with VistaQuest, Inc.
This Prospectus is part of a Registration Statement which registers up to
an aggregate of 600,000 shares of Common Stock, $.00001 par value (such shares
being referred to in the aggregate as the "Shares"), including 750,000 Shares of
Common Stock issuable upon the exercise of Common Stock Purchase Warrants (the
"Warrants"), of International Standards Group, Limited (the "Company") which are
being issued, as set forth herein, to VistaQuest, Inc., a consultant to the
Company (the "Consultant") pursuant to a Consulting and Acquisition Management
Agreement dated May 17, 1996, (the "Consulting Agreement") providing for the
issuance of the Shares and Warrants. The Consultant, as selling stockholder may
sometimes hereafter be referred to as the "Selling Security Holder." The Shares
are being issued to the Consultant pursuant to the Consulting Agreement which
has been consummated in order to assist the Company in the negotiation and
consummation of the acquisition of the Leader Mortgage Company, acquisition
and/or divestiture of other real estate companies or real estate interests, and
the management of such companies and assets. The Consulting Agreement is not
being undertaken in connection with any present or proposed financing by the
Company as the Company is not contemplating any financing for the foreseeable
future. The Company has been advised by the Selling Security Holder that it may
sell all or a portion of the Shares from time to time in the over-the-counter
market, in negotiated transactions, directly or through brokers or otherwise,
and that the Shares will be sold at market prices prevailing at the time of such
sales or at negotiated prices, and the Company will not receive any proceeds
from such sales.
No person has been authorized by the Company to give any information or to
make any representation other than as contained in this Prospectus, and if given
or made, such information or representation must not be relied upon as having
been authorized by the Company. Neither the delivery of this Prospectus nor any
distribution of the Shares issuable under the terms of the Agreement shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company since the date hereof.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY
STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
The date of this Prospectus is June 27, 1996.
4
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed with the Commission can be inspected and copied at
the public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of this material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Company's Common Stock including 750,000 shares of Common Stock underlying
Warrants is traded through NASDAQ under the symbol "ISGI."
The Company has filed with the Commission a Registration Statement on Form
S-8 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Act"), with respect to an aggregate of 1,350,000 shares of the Company's
Common Stock, including 750,000 shares of Common Stock underlying Warranty to be
issued to a consultant of the Company pursuant to a written consulting
agreement. This Prospectus, which is Part I of the Registration Statement, may
omit certain information contained in the Registration Statement. For further
information with respect to the Company and the shares of the Common Stock
offered by this Prospectus, reference is made to the Registration Statement,
including the exhibits thereto. Statements in this Prospectus as to any document
are not necessarily complete, and where any such document is an exhibit to the
Registration Statement or is incorporated by reference herein, each such
statement is qualified in all respects by the provisions of such exhibit or
other document, to which reference is hereby made, for a full statement of the
provisions thereof. A copy of the Registration Statement, with exhibits, may be
obtained from the Commission's office in Washington, D.C. (at the above address)
upon payment of the fees prescribed by the rules and regulations of the
Commission, or examined there without charge.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated herein by reference and made a part hereof:
1. The Company's Annual Report on Form 10-KSB for the year ended
September 30, 1995;
2. The Company's Report on Form 10-QSB for the quarterly period ended
December 31, 1995;
5
<PAGE>
3. The Company's Report on Form 10-QSB for the quarterly period ended
March 31, 1996.
4. All other reports, proxy statements and documents filed by the Company
pursuant to Section 13, 14 or 15(d) of the Exchange Act subsequent to the end of
the fiscal year covered by the Company's Annual Report on Form 10-KSB referred
to in item 1 above, prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the respective date of filing of
such documents. Any statement incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document, which
also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any statement modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of the Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all of the documents referred to above which have been or may be incorporated by
reference in this Prospectus, other than exhibits to such documents. Written
requests for such copies should be directed to Corporate Secretary,
International Standards Group, Limited, 3200 North Military Trail, Suite 300,
Boca Raton, Florida 33431, telephone (407) 997-5880.
6
<PAGE>
THE COMPANY
General Background
International Standards Group, Limited (the "Company"), through its
wholly-owned subsidiary, Financial Standards Group, Inc. ("FSGI"), was organized
to assist credit unions and their supervisory committees in performing
comprehensive or internal regulatory compliance audits in satisfaction of their
statutory requirements and to provide related internal auditing, accounting and
managerial advisory services to credit unions. Credit unions are required under
the Federal Credit Union Act and various state statutes to undertake a
comprehensive internal annual audit and submit a report of that audit to its
Board of Directors and a summary of the report to its membership at the ensuing
annual meeting of the credit union membership. There is no statutory requirement
that the annual audit be a certified audit, which must be performed by a
Certified Public Accountant in accordance with generally accepted auditing
standards as published by the American Institute of Certified Public Accountants
and which results in the issuance of financial statements and the expression of
an opinion regarding such financial statements. A comprehensive internal audit,
which does not involve expression of an opinion or result in the issuance of
financial statements, need not be performed by a CPA and ordinarily can be
accomplished in significantly less time and for less cost than a certified
audit, thereby making it feasible and cost effective to the many smaller credit
unions in existence.
On April 21, 1994, the Company consummated an Agreement and Plan of Merger
with Membership Realty Ltd., Inc. ("MRL") for the merger of MRL and its
wholly-owned subsidiary, Independence Mortgage Corp. of South Florida, Inc.,
into a new wholly-owned subsidiary organized by the Company. MRL is a
full-service commercial and residential real estate brokerage company which also
provides mortgage origination and title services.
The Company's real estate subsidiaries have experienced significant growth
during the 1995 fiscal year. MRL currently has six offices open, five of which
are in Broward county and one in Palm Beach County. They currently serve
approximately 150 real estate associates who generate in excess of $16 million
in sales volume on a monthly basis. The Company expects to open additional
offices during the next 12 months. The targeted expansion areas are Dade,
western Broward and Palm Beach Counties. In November 1995, Real Estate Services
Network Holding Corp. (formerly Membership Realty Holding Corp). completed the
stock purchase of U.S. Mortgage Network Services Corp. ("U.S. Mortgage"), a
Largo Florida mortgage banking operation and additional offices in Atlanta,
Georgia, On March 14, 1996, the Company and the principals of U.S. Mortgage
entered into an agreement rescinding this transaction, and U.S. Mortgage will
operate independently.
7
<PAGE>
On December 21, 1995 the Company and Global Re., Ltd. ("Global")
consummated the Stock Purchase and Exchange Agreement dated as of October 20,
1995, subject to certain due diligence procedures currently being completed on
behalf of the Company and pursuant to which the Company acquired all of the
capital stock of American Indemnity Company Limited ("AIC") in exchange for
233,333 shares of the Company's newly designated Series G Voting Convertible
Preferred Stock (the "Series G Preferred Stock") which was converted into
35,000,000 shares of ISG Common Stock and options to purchase a total of
10,000,000 shares of Common Stock of the Company. AIC, a corporation organized
under the laws of St. Christopher and Nevis, British West Indies, became a
wholly-owned subsidiary of the Company. On June 12, 1996, ISG sold AIC back to
Global Re: Ltd., the original owner of the company. ISG received back from
Global the 35,000,000 shares of ISG Common Stock plus options to purchase
10,000,000 shares of ISG's Common Stock, The Company will receive a percentage
of AIC's net income, if any, over the next 4 years.
On May 28, 1996, the Company entered into an Agreement and Plan of
Reorganization for the acquisition of all of the outstanding capital stock of
Total National Telecommunications, Inc. (d/b/a Total World Telecom) ("Total").
Under the terms of the stock exchange, the shareholders of Total received shares
of a newly created series of preferred stock of the Company which is convertible
into shares of Common Stock of the Company, the amount of which is based upon
fulfillment of certain pre-determined financial criteria and the price of the
Company's stock at the time of conversion. The Series M and Series N Preferred
Stock established pursuant to the exchange will carry a cumulative dividend of
2.7% of the stated value of the preferred stock which the Company would be
required to pay until such time as the Company's Registration Statement relating
to resale of certain of the shares of Common Stock underlying the Series of
preferred stock are registered under the Securities Act of 1933. Pursuant to the
Agreement and Plan of Reorganization, the Company advanced $5,000,000 for the
working capital needs of Total.
Total, which was organized in October 1991, is based in Houston, Texas. The
Company is a Tier II switch-based interexchange carrier which utilizes
state-of-the-art digital and fiber optic facilities, including five Siemens
Stromberg-Carlson DCO tandem switches located in New York, Chicago, Lost
Angeles, Atlanta and Houston. In addition, TWT has deployed SS7 signaling
throughout its network in order to assure prompt, clear connections at a
competitive price. The Company's Operations Command Center is also in Houston.
The Company through long-term contracts provides origination and termination
long distance services to Tier III and Tier IV, switchless resellers. Total's
management team consisting of Donald Booth, Steve Reemts and Larry Ashworth will
remain with Total and will occupy senior principal positions with the Company.
8
<PAGE>
CONSULTING AND ACQUISITION MANAGEMENT AGREEMENT
WITH VISTAQUEST, INC.
General
On May 17, 1996, the Company entered into a Consulting and Acquisition
Management Agreement with VistaQuest, Inc. pursuant to which the Company agreed
to issue to the Consultant 600,000 shares of Common Stock of the Company and
Warrants to purchase 750,000 Shares of Common Stock in consideration for
consulting services to be provided to the Company over an anticipated
twelve-month period commencing as of the date of the Consulting Agreement. In
addition, the Company will reimburse Consulting for its reasonable out-of-pocket
expenses from time to time upon submission of itemized vouchers in support
thereof.
Initial services relative to the performance under the Consulting Agreement
already commenced. Under the terms of that agreement, the Consultant is to
provide the following services to the Company (i) assist the Company in the
negotiation and consummation of a joint venture and/or acquisition with The
Leader Mortgage Company including the undertaking of due diligence examinations
with respect thereto; (ii) the identification, evaluation, structuring,
negotiating and closing of businesses, acquisitions and divestitures, whether in
the form of asset purchases, stock purchases, mergers, consolidations, joint
ventures, strategic alliances or otherwise relating to real estate and including
due diligence examinations in relation thereto; (iii) if requested by the
Company, assisting in the managing and operating of such consummated assets,
acquisitions or ventures; and (iv) the provision of consulting and advisory
services regarding real estate aspects of operations, regulatory compliance,
management reporting, technology, developments, political and regulatory
analysis, and integration of systems to promote expansion of operations; (v)
advise the Company with regard FHA, VA, GNMA, HUD and other regulatory and
secondary mortgage market requirements and compliance procedures, credit lines
and mortgage portfolio valuations. Following the consummated acquisition of a
target company by the Company, at the written request of the Company, the
Consultant will participate, subject to the direction of the Company's Board of
Directors, in the management and daily operations of such acquisition for
compensation to be predicated on the size and scope of operations to be
conducted by the Company to be acquired.
In consideration for providing such services and consulting functions
pursuant to the Consulting and Acquisition Management Agreement over a
twelve-month period, the Consultant is to receive 600,000 shares of the
Company's restricted Common Stock and Warrants to purchase 750,000 shares of
Common Stock of the Company. In addition, the Consultant will receive certain
monthly payments of $5,000 for a period of twelve months to cover its expenses.
9
<PAGE>
The Consultant is wholly owned by Mark Kabbash, who is the sole officer and
director of the Consultant.
All of the Warrants were granted pursuant to the Consulting Agreement and
are not being issued pursuant to any program or plan and are not being
administered by either the Board of Directors of the Company or any committee of
the Board of Directors organized for that purpose. The specific terms of the
Warrants are as follows:
(a) WARRANT PRICE. The exercise price per share of the Company's Common
Stock issuable upon exercise of the Warrants was established by the
Board of Directors at $0.75 with respect to 350,000 warrants; $1.00
with respect to 250,000 warrants; and $1.25 with respect to 150,000
warrants. The closing bid price of the Common Stock of NASDAQ at the
date of the Agreement on May 17, 1996 was $0.66.
(b) TERM OF WARRANTS. The Warrants expire on May 17, 1999.
(c) PAYMENT FOR SHARES. The purchase price for the exercise of the
Warrants is payable in cash and is to be paid in full upon exercise
of the Warrants.
(d) TRANSFERABILITY. The Warrants are not transferrable by the holder
thereof except pursuant to the laws of descent and distribution.
(e) REDEMPTION. There are no redemption rights afforded to the Company
in connection with the Warrants.
(f) ADJUSTMENTS. The number of shares of Common Stock of the Company
purchasable upon exercise of the Warrants and the exercise price of
the Warrants are subject to adjustment upon the occurrence of
specified events primarily involving stock dividends, stock splits,
reorganizations, reclassifications, consolidations and mergers. There
will be no adjustment for the payment of cash dividends by the
Company on its Common Stock. The Company is not required to issue
fractional shares. Warrants for fractional shares amounting to less
than one share will be disregarded.
The Selling Security Holder intends to sell all or a portion of the Shares
from time to time in the over-the-counter market or in negotiated transactions
at market prices prevailing at the time or at negotiated prices, and the Company
will not receive any of the proceeds from such sales.
10
<PAGE>
Federal Income Tax Effects
An option holder does not recognize taxable income on the date of the
grant of the Option, which is a non-statutory option, but recognizes ordinary
income generally at the date of exercise in the amount of the difference between
the Option exercise price and the fair market value of the Common Stock on the
date of exercise. However, if the holder is subject to the restrictions on
resale of common stock under Section 16 of the Securities Exchange Act of 1934,
such person generally recognizes ordinary income at the end of the six-month
period following the date of exercise in the amount of the difference between
the Option exercise price and the fair market value of the Common Stock at the
end of the six-month period. Nevertheless, such holder may elect within 30 days
after the date of exercise to recognize ordinary income as of the date of
exercise. The amount of ordinary income recognized by the Option holder is
deductible by the Company in the year that income is recognized.
Common Stock issued to a consultant in connection with the performance of
services must be included in gross income of the employee, to the extent such
issuance is for less than fair market value, based on the difference between the
price actually paid and the fair market value of the shares in the first taxable
year in which the shares are issued and not subject to a "substantial risk of
forfeiture". A substantial risk of forfeiture exists where rights and property
that have been transferred are conditioned, directly or indirectly, upon the
future performance (or refraining from performance) of substantial services by
any person, or the occurrence of any condition related to the purpose of the
transfer, and the possibility of forfeiture is substantial if such condition is
not satisfied. Common Stock received by a participant who is subject to the
short-swing profit recovery rule of Section 16(b) of the Securities Exchange Act
of 1934 is considered subject to a substantial risk of forfeiture so long as the
sale of such property at a profit could subject the participant to suit under
that action. Nevertheless, such holder may elect within 30 days after the date
of receipt to recognize ordinary income as of the date of receipt. Inasmuch as
the receipt of the shares was not subject to a substantial risk of forfeiture,
the recipient of the shares in lieu of salary will be required to include in
gross income the fair market value of the Shares at the time of receipt.
Restrictions Under Securities Laws
The sale of the Shares must be made in compliance with federal and state
securities laws. Officers, directors and 10% or greater stockholders of the
Company, as well as certain other persons or parties who may be deemed to be
"affiliates" of the Company under the Federal Securities Laws, should be aware
that resales by affiliates can only be made pursuant to an effective
Registration Statement, Rule 144 or any other applicable exemption. Officers,
11
<PAGE>
directors and 10% and greater stockholders are also subject to the "short swing"
profit rule of Section 16(b) of the Securities Exchange Act of 1934.
SALES BY SELLING SECURITY HOLDER
The following table sets forth the name of the Selling Security Holder,
the amount of shares of Common Stock held directly or indirectly, the maximum
amount of shares of Common Stock to be offered by the Selling Security Holder,
the amount of Common Stock to be owned by the Selling Security Holder following
sale of such shares of Common Stock and the percentage of shares of Common Stock
to be owned by the Selling Security Holder following completion of such offering
(based on 38,894,450 shares of Common Stock of the Company outstanding at June
14, 1996).
Percentage
Shares to be to be Owned
Name of Selling Number of Shares to Owned After After
Security Holder Shares Owned be Offered Offering Offering
- --------------- ------------ ---------- -------- --------
VistaQuest, Inc. 1,350,000* 1,350,000* -0- -0-
- ----------------------
* Includes 750,000 Shares of Common Stock issuable upon exercise of the
Warrants.
DESCRIPTION OF SECURITIES
The Company is currently authorized to issue up to 100,000,000 shares of
Common Stock, par value $.00001 per share, of which 38,894,450 shares were
outstanding as of June 14, 1996. The Company is also authorized to issue up to
10,000,000 shares of Preferred Stock, par value $.00001 per share, of which
1,576,001 shares were outstanding at June 14, 1996.
Common Stock
Subject to the dividend rights of the holders of Preferred Stock, holders
of shares of Common Stock are entitled to share, on a ratable basis, such
dividends as may be declared by the Board of Directors out of funds legally
available therefor. Upon liquidation, dissolution or winding up of the Company,
after payment to creditors and holders of Preferred Stock that may be
outstanding, the assets of the Company will be divided pro rata on a per share
basis among the holders of the Common Stock.
Each share of Common Stock entitles the holders thereof to one vote.
Holders of Common Stock do not have cumulative voting rights which means that
12
<PAGE>
the holders of more than 50% of the shares voting for the election of Directors
can elect all of the Directors if they choose to do so, and, in such event, the
holders of the remaining shares will not be able to elect any Directors. The
ByLaws of the Company require that only a majority of the issued and outstanding
shares of Common Stock of the Company need be represented to constitute a quorum
and to transact business at a stockholders' meeting. The Common Stock has no
preemptive, subscription or conversion rights and is not redeemable by the
Company.
Preferred Stock
The Company is authorized to issue 10,000,000 shares of Preferred Stock,
par value $.00001 per share. The Company has 1,578,001 shares of Preferred Stock
outstanding at June 14, 1996, including 73,000 shares of Series A Preferred
Stock, 150,000 shares of Series D Preferred Stock (to be cancelled), 3,000
shares of Series F Preferred Stock, 500,000 shares of Series K Preferred Stock,
231,000 shares of Series M Preferred Stock, 66,500 shares of Series N Preferred
Stock, 35,000 shares of Series O Preferred Stock, 267,501 shares of Preferred
Stock, and 250,000 shares of Series Q Preferred Stock. The Preferred Stock may
be issued by resolutions of the Company's Board of Directors from time to time
without any action of the stockholders. Such resolutions may authorize issuances
of such Preferred Stock in one or more series and may fix and determine dividend
and liquidation preferences, voting rights, conversion privileges, redemption
terms and other privileges and rights of the shares of each authorized series.
Over-The-Counter Market
The Company's Common Stock is traded on NASDAQ under the symbol "ISGI."
Transfer Agent
The Transfer Agent for the shares of Common Stock is North American
Transfer Co., 147 West Merrick Road, Freeport, New York 11520.
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by Atlas, Pearlman, Trop & Borkson,
P.A., 200 East Las Olas Boulevard, Suite 1900, Fort Lauderdale, Florida 33301. A
member of the firm owns 50,000 shares of Common Stock of the Company.
13
<PAGE>
EXPERTS
The consolidated financial statements included in the Company's Annual
Report on Form 10-KSB for the year ended September 30, 1995 and incorporated by
reference in this Registration Statement, to the extent and for the periods
indicated in their reports, have been audited by Millward & Co., independent
public accountants, and are included herein in reliance upon the authority of
said firms as experts in giving said reports. Reference is made to such reports
which includes an explanatory paragraph that discusses the Company's ability to
continue as a going concern.
INDEMNIFICATION
Section 145 of the General Corporation Law of Delaware, under which
jurisdiction the Company is incorporated, empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or enterprise. A corporation may indemnify against
expenses (including attorneys' fees) and, other than in respect of an action by
or in the right of the corporation, against judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding if the person indemnified acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In the case of an
action by or in the right of the corporation, no indemnification of expenses may
be made in respect to any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action was brought shall
determine that, despite the adjudication of liability, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper. Section 145 of the General Corporation Law of Delaware further provides
that to the extent a director, officer, employee or agent of the corporation has
been successful in the defense of any action, suit or proceeding referred to
above or in the defense of any claim, issue or matter therein, he or she shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
The Certificate of Incorporation and By-Laws of the Company require the
Company to indemnify its Directors and officers to the fullest extent permitted
by the General Corporation Law of the State of Delaware.
14
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
- ------- ---------------------------------------
The documents listed in (a) through (e) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by the
Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in the Registration Statement and to be part
thereof from the date of filing of such documents.
(a) The Registrant's latest annual report filed pursuant to Section
13(a) or 15(d) of the Exchange Act, or, in the case of the Registrant, either
(1) the latest prospectus filed pursuant to Rule 424(b) under the Securities Act
of 1933, as amended (the "Act"), that contains audited financial statements for
the Registrant's latest fiscal year for which such statements have been filed or
(2) the Registrant's effective registration statement on Form 10 or 20-F filed
under the Exchange Act containing audited financial statements for the
Registrant's latest fiscal year.
(b) The Company's Report on Form 10-QSB for the quarterly period
ended December 31, 1995;
(c) The Company's Report on Form 10-QSB for the quarterly period
ended March 31, 1996;
(d) All other reports, proxy statements and documents filed pursuant
to Sections 13(a), 14 or 15(d) of the Exchange Act since the end of the fiscal
year covered by the Registrant's Annual Report on Form 10-KSB referred to in (a)
above.
(e) The description of the Common Stock of the Company which is
contained in a Registration Statement filed under the Exchange Act, including
any amendment or report filed for the purpose of updating such description.
Item 4. Description of Securities
- ------- -------------------------
The class of securities to be offered hereby is registered under Section
12 of the Securities Exchange Act of 1934, as amended. A description of the
Registrant's securities is set forth in the Prospectus incorporated as a part of
this Registration Statement.
i
<PAGE>
Item 5. Interests of Named Experts and Counsel
- ------- --------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers
- ------- -----------------------------------------
Section 145 of the General Corporation Law of Delaware, under which
jurisdiction the Company is incorporated, empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or enterprise. A corporation may indemnify against
expenses (including attorneys' fees) and, other than in respect of an action by
or in the right of the corporation, against judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding if the person indemnified acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In the case of an
action by or in the right of the corporation, no indemnification of expenses may
be made in respect to any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action was brought shall
determine that, despite the adjudication of liability, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper. Section 145 of the General Corporation Law of Delaware further provides
that to the extent a director, officer, employee or agent of the corporation has
been successful in the defense of any action, suit or proceeding referred to
above or in the defense of any claim, issue or matter therein, he or she shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
The Certificate of Incorporation and By-Laws of the Company require the
Company to indemnify its Directors and officers to the fullest extent permitted
by the General Corporation Law of the State of Delaware.
Insofar as indemnification for liabilities arising under the Act may be
permitted to Directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
ii
<PAGE>
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Director, officer of controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 7. Exemption from Registration Claimed
- ------- -----------------------------------
Inasmuch as the Consultant who will receive the Shares of the Registrant
is knowledgeable, sophisticated and had access to comprehensive information
relevant to the Registrant, such transactions are undertaken in reliance on the
exemption from registration provided by Section 4(2) of the Act. As a condition
precedent to such grant, the Consultant may be required to express an investment
intent and consent to the imprinting of a restrictive legend on each stock
certificate to be received from the Registrant subject to registration of the
resale of the Shares under the Act.
Item 8. Exhibits
- ------- --------
Exhibit Description
- ------- -----------
(4)(a) Consulting and Acquisition Management Agreement with VistaQuest, Inc.
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating to the
issuance of shares of Common Stock pursuant to the above Consulting
Agreement
(23.1) Consent of Millward & Co.
(23.2) Consent of Atlas, Pearlman, Trop & Borkson, P.A. included in the
opinion filed as exhibit (5) hereto.
Item 9. Undertakings
- ------- ------------
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offerings or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
iii
<PAGE>
(b) That, for the purposes of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(d) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(e) Insofar as indemnification for liabilities arising under the Act
may be permitted to Directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
iv
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S- 8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boca Raton and the State of Florida, on the
27th day of June, 1996.
INTERNATIONAL STANDARDS GROUP,
LIMITED
By: /s/ Joseph L. Lents
--------------------------
Joseph L. Lents
Chairman and
Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Chairman of the Board
President and Principal
/s/ Joseph L. Lents Executive Officer June 27, 1996
- --------------------
Joseph L. Lents
Vice President, Secretary
Treasurer and Principal
Financial and Accounting
/s/ Loretta A. Murphy Officer June 27, 1996
- ---------------------
Loretta A. Murphy
Senior Vice Presi-
/s/ Denning Loveridge dent and Director June 27, 1996
- ---------------------
C. Denning Loveridge
/s/ John Loveridge Director June 27, 1996
- ----------------------
John Loveridge
CONSULTING AND ACQUISITION MANAGEMENT AGREEMENT
-----------------------------------------------
Consulting and Acquisition Management Agreement ("Agreement") made this
17th day of May, 1996 by and between INTERNATIONAL STANDARDS GROUP, LIMITED, a
Delaware corporation ("ISG"), and VISTAQUEST, INC., a New York corporation (the
"Consultant").
W I T N E S S E T H:
- - - - - - - - - -
A. ISG desires to engage the services of Consultant in order to identify,
evaluate and structure mergers, consolidations, acquisitions, joint ventures and
strategic alliances (hereinafter collectively referred to as "Acquisitions"),
provide consulting and advisory services regarding real estate aspects of such
Acquisitions and, at the request of ISG, to manage any such Acquisitions; and
B. Consultant is desirous of performing such services on behalf of ISG
or its real estate affiliate.
1. CONSULTING SERVICES.
1.1 Upon the terms and subject to the conditions contained in this
Agreement, Consultant hereby agrees that it shall, during the term of this
Agreement, devote sufficient time and effort on behalf of ISG (i) in the
identification, evaluation, structuring, negotiating and closing of business
acquisitions (whether in the form of asset purchases, stock purchases, mergers,
(whether in the form of asset purchases, stock purchases, mergers,
consolidations, joint ventures, strategic alliances or otherwise) for the
account of ISG upon such terms and conditions as are reasonably acceptable to
ISG; (ii) in the provision of consulting and advisory services regarding
issuance aspects of operations, regulatory compliance, management, report,
technology developments, political and regulatory analysis, new product
introduction and integration of systems to promote expansion of operations; and
(iii) if requested by ISG, managing and operating each such consummated
Acquisition. Notwithstanding anything to the contrary in the preceding sentence,
each Acquisition proposed by Consultant to be made by ISG shall be subject to
the approval of ISG which approval may be withheld or delayed for any reason in
ISG's sole and absolute discretion. Such proposed Acquisitions may constitute
leveraged buy-outs and need not initially produce positive cash flow.
ISG has identified The Leader Mortgage Company as a potential
acquisition target. In addition, Consultant will assist ISG with securing
<PAGE>
warehouse lines, portfolio enhancement and funding, credit lines and mortgage
portfolio valuations. Consultant will also assist ISG or its affiliates with any
regulatory compliance needed which shall include, but not be limited to, VA,
FHA, HUD, Freddie Mac, Ginny Mae, etc.
1.2 Following any consummated Acquisition of a Target Company (as
hereinafter defined) by ISG or an Affiliate (as hereinafter defined), at the
written request of ISG, Consultant shall be responsible, subject to the
direction of ISG's Board of Directors, for the management and day-to-day
operations of such Acquisition. Consultant shall have the right to recommend the
chief executive officer of each Acquisition subject to the sole and absolute
discretion of ISG's Board of Directors.
1.3 Consultant shall, in writing, submit an acquisition proposal to
ISG with regard to each Acquisition which is proposed to be consummated (a
"Target Company"). Each such proposal shall include the business and marketing
plan and financial pro-formas with respect to such proposed Acquisition. If any
Target Company is acquired by ISG or an Affiliate during the term of this
Agreement or for one (1) year thereafter, Consultant shall be entitled to the
fees set forth in subparagraph 3.2 hereof. During the term of this Agreement,
Consultant shall, at least quarter-annually, report to ISG on its activities
regarding the targeting of Acquisitions, the status of Acquisitions in progress
and a summary of the activities and financial results of Acquisitions made.
2. TERM. The Agreement shall be for a term of six (6) months from the
date hereof.
3. COMPENSATION. ISG shall pay the following compensation to Consultant
in consideration for the services to be rendered hereunder. The shares referred
to in paragraph 3.2 and the shares underlying the Warrant referred to in
paragraph 3.3 will have piggyback registration rights at the next registration
and, absent a registration by ISG, will have demand registration rights.
3.1 ISG shall pay Consultant $5,000 per month for a period of twelve
(12) months.
3.2 There shall be issued to Consultant 600,000 shares of Common
Stock, $.00001 par value (the "Shares"), of ISG.
3.3 There shall be issued to Consultant a warrant (the "Warrant")
for the purchase of up to 350,000 shares of ISG's Common Stock at a purchase
price per share of $0.75. The Warrant may be exercised with respect to the
number of shares of ISG's Common Stock at any time upon surrender of the Warrant
2
<PAGE>
Certificate and payment of the exercise price on or before 5:30 p.m. New York
time, May 17, 1999 (or, if not a business day, the first business day
thereafter.) The number of shares and exercise price set forth above shall be
subject to adjustment to protect the Consultant against dilution, as set forth
in appropriate anti-dilution provisions in the Warrant. The Warrant shall also
provide that the stock certificates for any shares purchased by the Consultant
under the Warrant shall be delivered to the Consultant no later than 15 days
after the receipt of payment of the exercise price by ISG. The Warrant may be
exercised in whole or in part at any time during its term.
3.4 There shall be issued to Consultant a warrant (the "Warrant")
for the purchase of up to 250,000 shares of ISG's Common Stock at a purchase
price per share of $1.00. The Warrant may be exercised with respect to the
number of shares of ISG's Common Stock at any time upon surrender of the Warrant
Certificate and payment of the exercise price on or before 5:30 p.m. New York
time, May 17, 1999 (or, if not a business day, the first business day
thereafter.) The number of shares and exercise price set forth above shall be
subject to adjustment to protect the Consultant against dilution, as set forth
in appropriate anti-dilution provisions in the Warrant. The Warrant shall also
provide that the stock certificates for any shares purchased by the Consultant
under the Warrant shall be delivered to the Consultant no later than 15 days
after the receipt of payment of the exercise price by ISG. The Warrant may be
exercised in whole or in part at any time during its term.
3.5 There shall be issued to Consultant a warrant (the "Warrant")
for the purchase of up to 150,000 shares of ISG's Common Stock at a purchase
price per share of $1.25. The Warrant may be exercised with respect to the
number of shares of ISG's Common Stock at any time upon surrender of the Warrant
Certificate and payment of the exercise price on or before 5:30 p.m. New York
time, May 17, 1999 (or, if not a business day, the first business day
thereafter.) The number of shares and exercise price set forth above shall be
subject to adjustment to protect the Consultant against dilution, as set forth
in appropriate anti-dilution provisions in the Warrant. The Warrant shall also
provide that the stock certificates for any shares purchased by the Consultant
under the Warrant shall be delivered to the Consultant no later than 15 days
after the receipt of payment of the exercise price by ISG. The Warrant may be
exercised in whole or in part at any time during its term.
3.6 At the request of ISG, upon the consummation of each Acquisition
of a Target Company that was brought in by Consultant by ISG or an Affiliate and
3
<PAGE>
for a period of two (2) years commencing on the acquisition date of each such
Acquisition, an annual fee equal to the sum of (i) 2% of the first $3 million in
Annual Gross Revenues (as hereinafter defined; (ii) 1% of the next $5 million in
Annual Gross Revenues; and (iii) one-half of 1% of Annual Gross Revenues in
excess of $8 million in Annual Gross Revenues. "Annual Gross Revenues" shall
mean, as the case may be, (i) the gross revenues of each such Acquisition,
during each full fiscal year which commences subsequent to the acquisition date
of each such Acquisition, as determined by generally accepted accounting
principles applied on a consistent basis with prior periods ("GAAP") or (ii) the
gross revenues determined by GAAP of each such Acquisition for any period
commencing on the acquisition date of each such Acquisition and ending at the
end of the fiscal period then in effect if such period is less than a full
fiscal year or (iii) the gross revenues determined by GAAP for any period
commencing with the beginning of a fiscal year and terminating on the third
anniversary of the acquisition date of each such Acquisition. The fees payable
pursuant to this subparagraph 3.2 shall be paid monthly on the 20th day of each
month and shall be separately calculated on the gross revenues of each such
Acquisition as set forth on its internally prepared, unaudited operating
statement for the preceding month (or part thereof, if an Acquisition occurs in
the middle of any month) ("Monthly Gross Revenues"). Monthly Gross Revenues for
all preceding months within the then applicable fiscal year of each such
Acquisition and for which the fees provided for herein are payable shall be
added together in order to calculate the fee then owing to Consultant for such
month. Monthly fees paid hereunder shall be adjusted as necessary at the end of
each fiscal year to reflect adjustments to gross revenues for the fiscal year
then ended based on the audited financial statements of each Acquisition as
prepared in accordance with GAAP.
3.7 In the event that a Target Company is merged with or into ISG or
an Affiliate or consolidated with ISG or an Affiliate, Annual gross Revenues
shall not include revenues associated with the ongoing business of ISG or an
Affiliate (unless such Affiliate is also an acquisition), except to the extent
such ongoing business is or was the business of an Acquisition.
3.8 Management fees payable pursuant to subparagraph 3.2 hereof
shall be in lieu of any other compensation to which Consultant may otherwise be
entitled for acting as an officer, director, consultant or any like capacity in
respect of a consummated Acquisition.
4. EXPENSES. Unless otherwise approved by ISG, Consultant shall bear
all expenses incurred by it prior to written acceptance by ISG of a proposal by
4
<PAGE>
Consultant with respect to the Acquisition of a Target Company on behalf of ISG.
Thereafter, subject to ISG's prior written approval, all out-of-pocket expenses
of Consultant, legal, accounting and other fees to third parties in connection
with or in respect of such proposed Acquisition shall be paid by ISG promptly
when due. After ISG approves in writing a proposed Acquisition, but prior to
consummation of such Acquisition, Consultant, subject to ISG's approval, may
select providers of professional services in respect of such Acquisition. In any
event, ISG shall always have the right to require that such providers of
professional services fully cooperate with providers of professional services
selected by ISG. After such Acquisition shall have been consummated, ISG shall
have the sole right to designate providers of professional services in
connection with or in respect of such Acquisition, and similarly, ISG shall have
the sole right to remove, replace or supplement providers of professional
services, including, but not limited to, attorneys, accountants, auditors and
appraisers.
5. FINDER'S FEES. Any finder's fees or brokerage commissions or like
payment payable to any person or entity in respect of or in connection with a
consummated Acquisition by ISG or an Affiliate shall be fully disclosed to ISG
and shall be subject to prior approval by ISG.
6. EARLY TERMINATION. This Agreement will automatically
expire on the first anniversary date hereof.
7. BREACH OF CONTRACT.
7.1 The sole remedy of ISG in respect of any material breach of this
Agreement by Consultant shall be to terminate this Agreement upon the giving of
thirty (30) days prior written notice, but no such termination shall, except as
otherwise provided in subparagraph 7.2 of Paragraph 7 hereof, affect the fees
payable pursuant to subparagraphs 3.1 or 3.2 hereof.
7.2 Notwithstanding anything to the contrary in subparagraph 7.1
hereof, in the event that Consultant shall have materially breached its
obligation to provide the services specified in subparagraph 1.2 of this
Agreement and such material breach has a material adverse effect on the
financial performance of an Acquisition or Acquisitions subsequent to such
material breach, then the fees payable pursuant to subparagraph 3.2 (and
subparagraph 3.2 alone) and due to Consultant thereafter and which fees are
related to such materially and adversely affected Acquisition or Acquisitions
shall be deemed forfeit as liquidated damages for such material breach; provided
further, however, that ISG shall have given Consultant written notice of such
breach of subparagraph 1.2 and Consultant shall not have materially cured such
breach within forty-five (45) days of the receipt of such written notice.
5
<PAGE>
8. NON-COMPETITION. Consultant shall not during the term of this
Agreement, directly or indirectly, engage in any business substantially similar
to the business of any consummated Acquisition. The term "engage in" shall
include, but shall not be limited to, activities as proprietor, partner,
principal shareholder, principal agent, employee or consultant. Notwithstanding
the provisions of subparagraph 7.1 and Paragraph 11 hereof, ISG shall be
entitled to seek injunctive relief. In the event of any litigation arising out
of this Paragraph 8, the prevailing party shall be entitled to its reasonable
attorneys' fees and court costs. Consultant acknowledges that, during the term
of this Agreement, it shall have access to information, materials and/or
processes confidential and proprietary to ISG and/ or any of the Acquisitions to
be made hereunder, and Consultant and its employees, agents, attorneys and
accountants shall at all times maintain the secrecy and confidentiality of all
such information, materials and/or processes acquired or revealed to them under,
pursuant or in connection with this Agreement.
9. DISPOSITION OF AN ACQUISITION.
9.1 ISG may transfer, sell or otherwise convey any Acquisition, or
part thereof, to an Affiliate. "Affiliate" shall be deemed to mean (i) any
direct or indirect subsidiary corporation of ISG; (ii) any person or entity who
owns, directly or indirectly either of record or beneficially, or who controls
directly or indirectly twenty-five (25%) percent or more of the outstanding
common stock of ISG; (iii) any person or entity in which ISG owns either of
record or beneficially or who controls directly or indirectly, twenty-five (25%)
percent or more for such person or entity (whether by stock ownership or
otherwise); or (iv) any spouse, child, parent, grandparent or grandchild of any
person identified in subsection 9.1(b) hereof; provided, however, that no such
transfer, sale or conveyance shall effect the fees payable to Consultant
pursuant to subparagraph 3.2 above.
9.2 ISG may sell, transfer or otherwise convey or divest (a
"Divestment") itself of an Acquisition at any time for any reason to a person or
entity who is not an Affiliate so long as such Divestment is not less than the
fair market value of such divested Acquisition.
9.3 Notwithstanding anything to the contrary in subparagraph 9.2, no
Fee shall be payable (i) if such Divestment is in respect of substantially all
of the assets of such Acquisition as they existed on the acquisition date of
6
<PAGE>
such Acquisition (except with respect to changes in the ordinary course of such
Acquisition's business) and (ii) the consideration received or to be received by
ISG or an Affiliate is less than the consideration paid by ISG or an Affiliate
to acquire such Acquisition.
10. OFFICERS AND DIRECTORS. Consultant, upon the request of ISG, may have
one of its affiliates serve as officer and/or director of any Acquisition;
provided, however, that the Consultant shall be entitled to be covered by
appropriate directors and officers liability insurance and indemnification by
ISG in amounts and on terms acceptable to Consultant in its sole discretion.
11. DISPUTE RESOLUTIONS. Any dispute, controversy or claim between ISG, on
the one hand, and Consultant, on the other hand, which arises out of, relates to
or is in connection with this Agreement or the subject matter hereof, shall be
settled by arbitration in the jurisdiction of the parties against whom the
proceeding is initiated in accordance with the following principles:
(i) the party demanding arbitration shall, in writing, set
forth the nature of the dispute, controversy or claim;
(ii) each of ISG and Consultant shall name an arbitrator to
resolve the dispute. Such arbitrators shall name a third arbitrator;
(iii) the arbitrators, sitting as panel, shall go carefully into
the merits of the asserted dispute, controversy or claim, and shall have
full and complete power, authority and jurisdiction to hear and determine
any and all disputed matters and shall call, and have the power to demand,
such evidence as they deem necessary to a proper determination thereof;
(iv) after a full and careful consideration of the dispute,
controversy or claim and all matters related thereto, the arbitrators
shall make a report of its finding, and such report shall be final and
conclusive and shall be binding upon the parties;
(v) a decision by any two arbitrators shall be deemed a
decision by all of the arbitrators; and
(vi) the arbitrators shall execute an award upon its decision,
and such award may be entered as a final, non-appealable judgement in any
court having jurisdiction.
7
<PAGE>
12. ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with respect thereto.
13. WAIVERS AND AMENDMENTS. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder, shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which any party may otherwise have at law or in equity.
14. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida applicable to agreements made
and to be performed entirely within such State.
15. NO ASSIGNMENT. This Agreement is not assignable by Consultant
except to any entity in which a majority in interest is owned by Consultant, but
shall be assignable by ISG solely upon the consent of Consultant.
16. HEADINGS. The headings in this Agreement are for reference purpose
only and shall not in any way affect the meaning or interpretation of this
Agreement.
17. SEVERABILITY OF PROVISIONS. The invalidity or unenforceability of
any term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed, shall constitute an original copy
hereof, but all of which together shall consider but one and the same document.
19. OTHER ACTIVITIES. Nothing contained herein shall prevent Consultant
from acquiring or participating in the acquisition of a Target Company proposed
by Consultant to be acquired by ISG where such proposal is rejected by ISG or
fails in its consummation for any reason (unless such failure of consummation is
caused by the bad faith of Consultant). The foregoing shall be subject to such
8
<PAGE>
other activity not interfering with the performance by Consultant of the
services to be rendered to ISG under this Agreement and that such Acquisition is
acquired at a price and upon terms and conditions no more favorable than those
offered to ISG.
20. NO AGENCY. Consultant shall not, without the express written consent
of ISG, hold itself out as the agent of ISG, nor shall Consultant have the
authority to bind ISG or incur liabilities on behalf of ISG, except as otherwise
provided for herein, without the express written consent of ISG.
21. DISCLAIMER. Consultant acknowledges that it has made a full and
independent inquiry regarding ISG and has been afforded access to such ISG
materials as it requested and that, in entering into this Agreement, it has not
in any manner directly or indirectly relied on any warranty or representation by
ISG, their officers, directors, agents, legal counsel or accountants concerning
ISG and/or its stock as to matters past, present or future.
22. NOTICES. All notices to be given hereunder shall be in
writing, with fax notices being an acceptable substitute for mail
and/or and delivery to:
(i) VistaQuest, Inc.
30 Waterside Plaza, Suite 37F
New York, New York 10010
Attention: Mark Kabbash
(ii) International Standards Group, Limited
3200 North Military Trail, Suite 210
Boca Raton, Florida 33431
Attention: Joseph L. Lents
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
INTERNATIONAL STANDARDS
GROUP, LIMITED
By:/S/ JOSEPH L. LENTS
------------------------------
Joseph L. Lents, President
VISTAQUEST, INC.
By:/S/ MARK KABBASH
------------------------------
President
9
June 19, 1996
International Standards Group, Limited
3200 North Military Trail, Suite 300
Boca Raton, Florida 33431
Re: Registration Statement on Form S-8
International Standards Group, Limited
Common Stock Issued Pursuant to Consulting and
Acquisition Agreement with VistaQuest, Inc.
(THE "AGREEMENT")
----------------------------------------------
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the
Securities and Exchange Commission (the "Commission") with respect to the
registration by International Standards Group, Limited (the "Company") of up to
1,350,000 shares of Common Stock, par value $.00001 per share (the "Common
Stock"), including 750,000 shares of Common Stock underlying Common Stock
Purchase Warrants (the "Warrants"), issued pursuant to the Agreement.
In our capacity as special counsel to the Company, we have examined the
original, certified, conformed, photostat or other copies of the Agreement, the
Company's Certificate of Incorporation (as amended), By-Laws and corporate
minutes provided to us by the Company. In all such examinations, we have assumed
the genuineness of all signatures on original documents, and the conformity to
originals or certified documents of all copies submitted to us as conformed,
photostat or other copies. In passing upon certain corporate records and
documents of the Company, we have necessarily assumed the correctness and
completeness of the statements made or included therein by the Company, and we
express no opinion thereon.
Based upon and in reliance of the foregoing, we are of the opinion that
(i) the shares of Common Stock, when issued to VistaQuest, Inc. in accordance
with the terms of the Agreement, will be validly issued, fully paid and
non-assessable; and (ii) the shares of Common Stock, when issued to VistaQuest,
Inc., in accordance with the terms of the Warrants, will be validly issued,
fully paid and non-assessable.
We hereby consent to the use of this opinion in the Registration Statement
on Form S-8 to be filed with the Commission.
Very truly yours,
/s/ Atlas, Pearlman, Trop & Borkson, P.A.
-----------------------------------------
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of International Standards Group, Limited and subsidiaries on Form S-8 of our
report dated December 26, 1995, on the consolidated financial statements and the
financial statement schedules included in or incorporated by reference in the
International Standards Group, Limited and subsidiaries Annual Report on Form
10-KSB at September 30, 1995 and for the fiscal year then ended. We also consent
to the reference to our firm under the caption "Experts" contained in the
registration statement.
Millward & Co. CPAs
Fort Lauderdale, Florida
June 25, 1996
