SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
(Fee Required)
For the fiscal year ended December 31, 1997
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
(No Fee Required)
Commission File Number: 017833
GREENLAND
CORPORATION
(Exact Name of Registrant as specified in its charter)
Nevada 87-0439051
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
7084 Miramar Road
San Diego, CA 92121
(Address and zip code of principal executive offices
(619) 566-9604
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: 25,000,000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X YES o NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ([delta]229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10- K. X As of April 15, 1998, the
aggregate market value of the voting stock held by non-affiliates of the
registrant was $1,779,593, based upon a $0.0425 per share trading price on that
date. Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Class A Common Stock 41,872,787 Shares Outstanding
$0.001 par value as of May 7, 1998
DOCUMENTS INCORPORATED BY REFERENCE
Certain information required by Part III of this Form 10-KSB is included by
reference to the Company's definitive proxy statement filed in accordance with
rule 14a-101, Schedule 14A.
Traditional Small Business Disclosure Format (check one): Yes X No |_|
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PART I
Item 1.
Business
Greenland is a corporation formed on July 17, 1986 as Zebu, Inc. On
September 11, 1994, the shareholders approved changing the name of the company
to Greenland Corporation. The principal place of business and general offices of
the Company are located at 7480 Miramar Road, 4th Floor, San Diego, California
92121, Phone (619) 566-9604, (800) 234-4226.
In September of 1994, the Company acquired GAM Properties, Inc. ("GAM") and
has subsequently acquired additional real estate properties in San Diego,
California and Tucson, Arizona. In May 1997, the Company sold its interest in
its Tucson, Arizona property to Natural Born Carvers, Inc. for stock. In
December 1997, the Company sold GAM to Golden Age Homes, Inc. for stock.
The principal business of the Company is the development and marketing
of advanced communications technology known as automated meter reading ("AMR"),
which will enable utilities to automate meter reading functions via the
Company's AirLink(TM) system. The technology was developed initially by Ariel
Systems, Inc., which was acquired by Greenland in June 1996. AIRLINK(TM)
AUTOMATED METER READING SYSTEM
In 1991, engineers currently employed by the Company began research and
development on a device that could read utility meters and transmit the data for
use by utility companies in customer billing and load/resource management.
Greenland's strategy is grounded in bringing a new class of information
gathering and communications systems to the utility industry. Our products
provide significant added value to utility service through cost savings,
resource management, security, and management intelligence.
The Company provides products that can easily be adapted to address a
number of different utilities while simultaneously providing for individual
customer requirements. The Company's principal target market consists of utility
providers in the U.S. and abroad. The 1990 U.S. Census reports approximately
3,100 counties in the U.S. encompassing over 101 million homes and approximately
238 million meters. There are several competitors in the automated meter reading
("AMR") industry, and there is increasing industry demand for meter reading
automation.
The technology used in the AirLink system (the Company has applied for
a number of patents) is a combination of digital hardware, radio transmission,
and software, that, when attached to a standard water, electric, gas, or other
traditional utility meter, will "read" the meter, store the data, and transmit
it back to a computer for use by the utility company. The device requires
virtually no maintenance. The need for personnel to physically read these meters
is eliminated. Additionally, the AirLink system will enable utilities to monitor
resource usage by consumers and to institute differential billing based upon use
of the resource and the time of use.
The Market
Like telecommunications companies, utilities are going through a period
of rapid change characterized by deregulation in the United States and either
deregulation or privatization in a number of other countries. While the real
race may be to develop unique products and services to capture the customer, the
bottom line is the urgency for utilities to capitalize on the interactive
services that technology is making possible. Utility companies must learn to
drive cost out of their operations while improving service quality and adding
new features.
Meters, which measure the flow of resources (electricity, natural gas,
water) are a utility's lifeline. Automated meter reading of electric, gas, and
water meters has the near-term potential of significantly reducing utility
company costs. However, additional features and functions may ultimately prove
more valuable to the industry. These include: utility load control management,
theft and tamper detection, service interruption detection, and automation of
some parts of the distribution system.
AirLink represents a "smart" network that will enable utilities to more
efficiently and effectively manage costs and service quality. It is a completely
wireless system designed as a communications link between a utility and every
individual user of resources in its service area.
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As one would expect, the United States represents the most sizable
market for delivery of essential utility services such as water, electricity,
and natural gas. Accordingly, the U.S. represents the largest single market for
meter systems and services - over 100 million homes comprising over 300
million meters.
Market surveys show that automated meter-reading devices can be grouped
into three basic types with increasing levels of sophistication: (1) hand-held,
(2) hard-wired, and (3) radio telemetry.
Hand held devices are used by meter reading personnel that replace
hand-written data through key entry. The individual meter reader keys the meter
reading into a hand-held recorder that places the data onto a recording media,
such as tape, for later loading into a computer program. This tool eliminates
one or more steps in the transcription process, but does nothing to improve
meter reading productivity. This technology is currently being employed by
water, gas, and electric utility companies. Meter reading personnel must be able
either to see the meter face and transfer the reading into a recorder, or to
touch its face or a special plate with a wand or other reading device. The
primary benefit of hand held devices is that they eliminate the hand-written
recording of meter data and subsequent manual data entry into the utility's
billing computer. Wand-type devices, however, require a special meter that
contains electronic circuitry for the system to function. While this may be
viable for new housing developments, it is not practical for existing
communities due to the high cost associated with replacement of existing meters.
Hard-wired devices include automated meter-reading devices that are
interfaced to existing telephone circuits (or other wired connections). This
method represents a relatively high capital investment and the need for a
telephone or other hard-wired connection. Devices currently in use have been
implemented with telephone circuits to transmit data directly to a utility. One
device uses a dial-in technique whereby the meter dials the telephone number of
a computer system and transmits the reading. An alternative system employs a
dial-out method whereby the utility's host computer dials the telephone number
of the meter in order to acquire the meter data. In both systems, telephone line
charges apply. Another system currently in use implements a hard-wired system
for metering electric usage. The system uses a distributed network of
microcomputers to collect data from a group of instrumented meters. Existing
power lines are used for data communications until the line reaches a
transformer. There are physical limitations associated with the amount of data
that can be passed through power lines. However, the system will allow remote
reading and control functions for an electric utility. These systems are very
capital intensive and require a significant level of technical support related
to installation and maintenance. Nevertheless, hard-wired systems have
advantages over hand-held devices since they are automated and can be accessed
at any time to obtain meter readings in support of load management activities.
It is potentially very costly for a utility to install these systems due to the
complex communications, networking, and interface electronics required for meter
sensing. In addition to the high capital costs, these systems are somewhat
limited by the inherent physical constraints of the telephone system (or other
hard-wired connection) band width. Timing becomes critical in an environment
with a large population of meters. The time required to dial, establish
communications, transmit data, and close communications is critical to the
effectiveness of these devices. Although they provide a potentially long service
life, they are inherently limited due to the time required to complete a reading
cycle.
Radio telemetry devices, until recently, have been limited to
collection of data by a mobile platform to collect the data from meter sensing
devices via radio telemetry. The basic requirements of these systems to be
successful are that (1) the system must provide more than a single data point;
(2) the system must be non-intrusive and capable of retrofitting to the
installed base of meters; (3) the operator interface must be designed so that it
can be easily used by existing meter reading personnel; (4) the system must be
reliable, inexpensive, and capable of operating in harsh environments; and (5)
the meter reading unit must be capable of being mounted to the meter in such a
way as to allow for the manual reading of the meter in case of system failure.
Unfortunately, existing systems have not met these requirements in total. A
major disadvantage is that meter reading personnel must still be used for the
data collection process. Notwithstanding the reduction in personnel
requirements, staff must be retrained and re-deployed to serve the system from
vehicles designed to interact with the communication of data from each meter to
the collection point(s). A second major disadvantage is that these systems have
not been designed to adequately function in all conditions (i.e. in sunlight, or
harsh weather conditions). Additional technical challenges have yet to be solved
to a reasonable degree to insure total system reliability. These include
transmission inconsistencies, route coordination, etc.
Traditional meter reading methodology does not provide utilities the
ability to implement incremental billing to enable differential charges for
usage based upon usage patterns that impact resource management. In an
increasingly automated age, utility companies must adapt to technologies that
have the potential to increase their
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productivity and level of customer service. Automating meter reading is one of
the principle methods by which utilities can positively transform their
operations.
The following table illustrates the market potential for the AirLink
system in the U.S. Over the next several years, the Company's objective is to
achieve 5% market penetration, based upon these statistics (U.S.
Census, 1990).
<TABLE>
<CAPTION>
Units County Average Total Sales Value County Sales Value
<S> <C> <C> <C> <C>
Water 85,548,158 27,659 6,843,852,629 2,212,691
Natural Gas 51,651,942 16,700 4,132,155,335 1,335,970
Electric 100,628,493 32,534 8,050,279,406 2,602,741
Total 237,828,593 76,893 19,026,287,370 6,151,402
- ---------------- -------------- ------------------- -------------------- ----------------------
</TABLE>
AirLink Technology and Product
The AirLink wireless meter reading network is made up of essentially
two parts: (1) the meter reading device that is installed on the utility meter
itself, and (2) collection stations, which are located at intervals throughout
the service area. The system takes an electronic "picture" of the meter's
output, creates a digital "packet" of the actual meter reading, and transmits
the data to the collection station. The data is then available to the utility
company to incorporate into their existing computer systems for billing and
statistical analysis. (A database software interface is provided for virtually
any system.) The meter reading device is easy to install and to maintain. Most
installations are estimated at minutes in duration. Meter Reading Device.
AirLink meter reading devices will be available for any kind of utility
meter. Circuitry is provided to capture data from the meter and to translate it
for digital transmission. The major components include a transmitter with a
specialized antenna; receiver; power supply with supercapacitor (battery); an
internal computer to translate data; and, memory for storage of data.
Utility meters are read via sensors, which detect the rotation of
moving parts inside the meter or the register of the meter (depending upon the
type of meter to be automated). The most common AirLink application for electric
meters includes a sensor circuit that includes a photo-transistor, which
consists of an optical detector and a light emitting diode (LED). A system of
measurement established by the International System of Units is the basis by
which the AirLink device is calibrated.
The AirLink meter reading device is designed to last for many years
without the need for repair or replacement. It is powered by line voltage and a
supercapacitor. Water and natural gas meters are powered with a long-life
lithium battery that must be changed every three to ten years.
The meter reading device has its own computer circuitry, including
memory, in order to save data for up to one month to provide redundancy of data,
and to insure against data loss due to vandalism, power outage, etc.
Communications.
Greenland's patent-pending communications protocol and antenna
technology will enable utilities to receive data from many thousands of meters
in short periods of time.
The AirLink system provides for communications both to each meter and
from each meter back to its local collection station. The system polls each
meter and each meter scans for a clear, open channel prior to transmission of
data to collection units. AirLink's proprietary communications protocol enables
the system to function efficiently and effectively, even in high density RF
traffic.
There are a number of benefits to this 2-way solution. Value-added
enhancements can be added to the AirLink system as it communicates
bi-directionally. These might include the ability to remotely activate or
deactivate nodes on the system, reading multiple meters at each location, etc.
Cell Site Data Collection/Transmission.
Collection stations are arrayed strategically as "cell sites" in order
to receive data from each meter and to transmit the data to the central computer
at the utility's billing office.
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Each stop in the data network has its own requirements in order to
provide accurate, redundant information on resource usage. Utilities will find
the system useful in saving reading costs and in the increased management
reporting capabilities provided by an AirLink network.
A data accumulator is built-in to the system to enable the collection
of load management information. The system can provide separate daily usage
levels for each of several previous days; and it stores highest and peak demand
data. The system allows utilities to incorporate time-differential billing by
segregating data into hourly (or sub-hourly) periods.
The AirLink device at the meter also includes circuitry that detects
power interruption. In the event of a power failure or tampering at the meter
site, the system will immediately transmit such status within seconds of an
event. A number of safeguards and security features are incorporated to enhance
performance, reliability, and maintenance. Internal diagnostic circuitry will
detect low power and communications errors. Each receiver cell site may be
linked to transfer the collected data to the main billing office, or collected
data may be transferred by other methods such as telephone link, memory card
swap, or mobile RF links. Water and Gas.
Greenland's AirLink system can be deployed for use in water and gas
meter applications. The technology is designed to meet the special technological
and environmental challenges that are faced by water and gas utilities. Water
meters, in particular, are generally located below ground, in dark, inhospitable
conditions, without readily available power or communications links. This
presents unique difficulties in automating data transfer. Gas meters do not
provide an accessible power source; battery power is the only available option,
which requires the use of advanced technology to eliminate the need for frequent
change out of batteries.
Competition
The AirLink wireless meter reading network will significantly increase
a utility's ability to manage its resource consumption by providing information
that is not readily available through existing metering technology. AirLink
technology provides improved resource management, time-of-use (TOU) information,
better peak- demand monitoring, and security. Its ability to provide
differential billing, and providing real-time usage information for public (PUC)
reporting, has the potential of further reducing overall costs for the utility.
Fixed Network RF System - The AirLink system is a fixed wireless network.
Comparisons are made between AirLink and its two most widely discussed
competitors, Itron and CellNet.
Price Per Data Point - AirLink pricing, at this time, is $60 to $75 per meter in
order to retrofit each electric meter with AirLink electronic circuitry. Itron
sells units for $80 and above, most requiring a new meter to be installed to
accommodate Itron electronic components. CellNet does not quote pricing for sale
as the system is available only to utilities under long-term (10-15 years)
contracts under which CellNet bills the utility for each "read" of a meter in
the system.
Terms of Sale - AirLink is made available for sale to utilities. Greenland
charges additional fees for ongoing technical and operations support. Itron
systems are also available for sale to utilities. CellNet is available only
under a pay-per-read billing structure.
Integration of Electric, Gas, and Water Meters - The AirLink system will enable
the integration of all utility meters, as well as other sensing devices, in an
integrated 2-way system. Generally, gas and water meters, which require battery
power for AirLink, can be configured to report over short distances to the
electric meter. In competitive systems, all meters can be integrated; but these
systems require direct transmission from the water and gas meter to a central
collection point, requiring more power consumption and less efficiency.
Signal Distance - Meter to Collection Station - AirLink is installed using both
FCC Part 15 and Part 90 communications specifications. Frequencies under Part 90
are licensed by the FCC. Part 15 is an unlicensed frequency that is prone to
signal interference; and signal strength is quite limited. The AirLink system,
under low power conditions dictated by Part 15, includes additional (yet, low
cost) collections stations to mitigate transmission inefficiencies. Itron
deploys their system under FCC Part 15. CellNet, alternatively, deploys their
system under a licensed frequency. However, the link between field collection
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stations and the meters is FCC Part 15. AirLink, under Part 90, using 5 to 10
watts of power, is estimated to provide coverage of over 10 miles radius from
data point to collection point. Competitive systems are limited to approximately
1/2 mile. In situations in which AirLink is deployed under Part 15 (due to
unavailability of a licensed frequency under Part 90), AirLink will provide up
to 1 mile of coverage. The high data rates (throughput) of the AirLink system
enables the system to accommodate large numbers of meters.
Data Throughput - The
AirLink system sends data packets at a rate of 10,000 bits per second; but sends
packets in millisecond intervals. The result is an effective throughput of
approximately 100,000 bits per second, as compared to 9,600 bits per second for
most competitors. The speed of transmission enables AirLink to accommodate a far
greater number of meters in the system. Under Part 15, this is particularly
important since FCC regulations require that the user of the frequency avoid
dominating the airwaves.
FCC Part 15/FCC Part 90 - FCC Part 15 mandates that devices accept interference
from any other device and, at the same time, avoid interfering with other
devices. In order to meet these requirements, Part 15 devices use very low power
levels for data transmission. Traditional, slow transmission data rates
complicate the challenge because only small amounts of data can be transferred
in order to avoid interference. Additionally, data is often corrupted, and the
system must be designed to account for inconsistencies and inaccuracies. Part
15, therefore, presents considerable challenges when designing a system that
must accurately read meters and then transmit such data to a central station for
use by a utility for billing and analysis. Part 90 enables the use of higher
power, which provides greater transmission length. But the fundamental benefit
of Part 90 over Part 15 is that a dedicated, licensed frequency is made
available to the user, which eliminates the challenges of interference of data.
In a 2-way system such as AirLink, it allows for the system to poll each data
point and to confirm the reception of information (including reads, status,
etc.).
Retrofit of Existing Installed Meters - The AirLink system is designed to
retrofit most existing electric meters. Solutions are in process for both water
and gas meters. The benefit to this is that the utility's existing investment in
meters is protected. Moreover, all of the standard single phase (residential)
meters in the system are transformed into time-of-use meters (generally limited
to industrial use). In competitive systems, special meters are required in order
to provide network connectivity, which can add substantially to the cost of
deploying an AMR network.
Reading Accuracy - Naturally, reading accuracy is a critical component of an AMR
system. AirLink's delivery specification is to read meters with a minimum of 99%
accuracy. (The industry standard, at this time, is approximately 98%.) Our
understanding is that, today, many AMR systems have problems in providing
accurate reads due to design irregularities which may require re-calibration of
meters, which would be an unacceptable condition to most utilities.
Wide Area Network (WAN) Compatibility - AirLink is compatible with other systems
via RS-232 serial interface (input and output). In situations where the network
must be interconnected with others, this interface is generally suitable and
reliable. Other, competitive systems, which have proprietary interfaces may not
be compatible with other networks, such as telephone, fiber-optic cable,
cellular, etc.)
Database Software Requirements - AirLink is an "open" system. All data is fed to
a flat-file database that is accessible to other system software (such as
billing systems) in use by the utility. No special software interfaces are
required to access the AirLink database. Alternative systems generally require a
custom- designed database structure. Itron, for example, charges an additional
$200,000 for software to run their network.
Network Management Software Requirements - AirLink provides, as part of its
overall system, software to enable system management in conjunction with the
database. This software is primarily used to create and transmit commands (read,
status, etc.) to each data point (meter) in the system. It will also manage the
protocol that polls meters and reports anomalies in meter status (power
interruption, etc.). The basis of this protocol is that there are 10,000 data
"slots" per second; 1,000 slots are reserved for meter reads.
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Other slots are available for status changes, etc. Competitive systems charge
large fees for software interfaces that may also require special billing and
management report software.
Distribution Automation (SCADA) - The AirLink system enables utilities to use
its components for distribution automation (SCADA) applications, including
monitoring switching stations, load management, etc. Each AirLink module that is
deployed for this purpose becomes an individual data point in the system and is
managed by the network with a specific protocol and command structure.
Competitive systems do not provide this feature as they are specific to meter
reading only.
Other Features - AirLink provides a number of other features and functions; some
of which are unique and others which are competitive. These include remote
connect/disconnect of meters, remote configuration of data points, demand
metering, tamper and outage detection, and advanced metering features for
large-scale industrial users.
Employees
Including its officers, the Company presently employs five full-time
employees, two (2) of whom are primarily engaged in administration and
marketing; two (2) in engineering and AMR product development. The Company uses
independent consultants for a variety of tasks, including engineering,
shareholder relations, and marketing.
Item 2.
Description of Property
Greenland and its subsidiaries currently occupy approximately 7,500
square feet of office space comprising the entire fourth floor of 7084 Miramar,
San Diego, California 92121. The Company entered into a three-year lease,
commencing January 1, 1997, with three (3) three-year options to extend its
tenancy. During the first year of the lease, the Company was granted reduced
rent while it occupied only approximately 5,700 square feet.
Item 3.
Legal Proceedings
In May 1998, the Company settled all its remaining litigation related
to its sale of convertible debentures pursuant to Regulation S in April 1997.
The Company's officers and directors are aware of no threatened or pending
litigation which would have a material, adverse effect on the Company (Also see
Notes to Financial Statements.)
Item 4.
Submission of Matters to a Vote of Security Holders
A Special Meeting of Shareholders of the Company was held on December
5, 1997 (the "Special Meeting") at the main offices of the Company. A Proxy
statement, which was filed on Form 14-A, was first sent to stockholders on or
about October 27, 1997. The Special Meeting was adjourned due to a lack of a
quorum. Following the meeting date, additional proxies were delivered to
Greenland constituting a quorum. 13,423,092 shares were voted representing 60%
of the issued and outstanding shares of Greenland common stock as of the Record
Date of October 27, 1997. The Board of Directors reconvened the Special Meeting
of Shareholders on December 15, 1997 to consider the measures on the Proxy
Statement.
Measure No. 1 requested shareholder approval to exchange the stock of the
Company's wholly-owned GAM Properties, Inc. subsidiary for Class A Convertible
Preferred stock of Golden Age Homes, Inc. Of the shares voted, 10,241,046 (76%)
voted FOR the measure; 51,519 voted AGAINST, and 3,130,527 (23%) abstained.
Measure No. 2 requested shareholder approval to amend the Company's
bylaws to effect the increase of its authorized common stock from 50,000,000
shares to 100,000,000 shares. Of the shares voted, 9,435,041 (70%) voted FOR the
measure; 787,636 (6%) voted AGAINST, and 3,201,050 (24%) abstained.
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PART II
Item 5.
Market for Registrant's Common Equity and Related Stockholder Matters
The Company's common stock is traded in the over-the-counter market,
and quoted on the OTC Electronic Bulletin Board. The Company's common stock has
traded, during the fiscal year ended December 31, 1997 between $0.35 and $0.10
per share. The number of shares of record of common stock, $.001 par value, of
the Company was 37,872,787 at April 15, 1998. The Company has not yet adopted
any policy regarding payment of dividends.
High Low
Quarter ended Mar.31 $ 0.34 $ 0.20
Quarter ended Jun.30 0.35 0.13
Quarter ended Sep.30 0.20 0.10
Quarter ended Dec.31 0.20 0.10
- -------------------------- -------------- ---------------
Item 6.
Management's Discussion and Analysis or Plan of Operation
The following discussion pertains to the Company's results of
operations and financial condition as of the end of and for each of the years in
the two year period ended December 31, 1997.
Greenland's strategy revolves around the development and deployment of
information gathering and communications systems for utility industry. The
Company's AirLink product enables utilities to improve the value of their
services to customers through cost savings, resource management, security, and
management intelligence. The AirLink system is a sophisticated electronics
hardware and software product. Product development and testing has required
ongoing investment in engineering, research and development, market research,
and early marketing activities.
The Company has invested, and continues to invest, considerable time
and effort in development of the concept, assembling a development team,
analyzing the market (including field research), planning the business, creating
prototype devices, and contracting for the installation of pilot systems at
utilities in the U.S. and in selected international markets.
Greenland's marketing strategy is based upon providing products that
can easily be adapted to address a number of different utilities while
simultaneously providing for individual customer requirements. The Company uses
a direct sales approach (as opposed to third-party distribution) in its effort
to place its products in the market. Marketing support is provided through
public relations and participation in selected industry conferences and trade
shows.
Initial sales strategy relies heavily on building relationships with
utilities (especially electric utilities for whom an AirLink solution is nearest
to completion) and providing pilot systems under an experimental FCC license,
which is currently held by the Company. Initial response has been positive and
the Company believes that this strategy will serve to reduce the time from
initial contact to full deployment of systems.
Pursuant to shareholder approval, in December of 1997, the Company sold its
GAM Properties, Inc. real estate subsidiary to Golden Age Homes, Inc., a San
Diego-based residential care company. The Company received stock in Golden Age
Homes. (Also see Notes to Financial Statements.)
The Company owns a 49% interest in Signature Leasing, LLC, a
Nevada Corporation ("Signature"). Signature is a commercial leasing company The
Company does not consolidate the operations of Signature as it is a minority
shareholder. (Also see Notes to Financial Statements.)
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Results of Operations
AMR Sales
Revenues from pilot projects totaled $15,000 in fiscal 1997. In the
previous year, pilot project revenues were $40,000. The Company continues to
refine its AirLink technology; and pilot installations serve as a platform for
ongoing testing and performance evaluation.
Other Income
Other income totaled $11,381 for the year ended December 31, 1997. This
income consisted of interest earned on bank deposits and services provided by
the Company outside of its AMR operations. In the previous fiscal year, the
Company aggregated rental income from its GAM Properties, Inc. subsidiary, which
was sold in December 1997. Other income was $65,015 for the year ended December
31, 1996 Expenses
In December 1997, the Company sold its GAM Properties, Inc. ("GAM")
subsidiary. Income and expenses associated with GAM have been previously
consolidated on the Company's financial statements. The financial statements for
the fiscal year ended December 31, 1997 do not include such income and expenses.
Accordingly, comparative references between fiscal 1997 and fiscal 1996 exclude
GAM operations.
General and administrative expenses for the year ended December 31,
1997 were $1,820,050 as compared to $639,462 in fiscal 1996, an increase of
$1,180,588, or 185%. This increase is attributable to increased costs related to
management and operations of the Company. The cost of outside consultants
accounted for $636,580 (53.9%) of general and administrative expenses.
The Company had depreciation expense of $12,134 for fiscal 1997 on its
property and equipment. There was no depreciation claimed in fiscal 1996.
Interest expense was $38,257 for the year ended December 31, 1997, an
increase of $34,326 over the previous fiscal year.
Property and other taxes for the year ended December 31, 1997 were
$44,708 compared to $9,001in the previous fiscal year; an increase of $35,708 or
397%. The increase is directly attributable to the Company's disposition of its
real estate properties, which were sold in December 1997.
The Company had no bad debt as of December 31, 1997 as compared to
$59,668 in fiscal 1996.
Pursuant to shareholder approval, the Company sold, in December 1997,
its GAM subsidiary to Golden Age Homes, Inc. ("Golden Age"). The Company
received 290,000 shares of Golden Age Class A Convertible Preferred stock valued
at $1,450,000. As a result of this transaction, the Company had a gain on the
sale of its properties of $531,388; and it had a loss from discontinued
operations of $190,660. (See Notes to Consolidated Financial Statements.)
AirLink Operations
The Company continues with the ongoing development and marketing of its
AirLink automated meter reading system for utilities. The Company introduced
AirLink, for the first time, in June 1996. During the course of fiscal 1996, the
Company entered into agreements to install AirLink pilot systems in Oregon,
Utah, and Connecticut. During 1997, the Company has installed various iterations
of the technology in Connecticut and Oregon. As a result of these pilot tests,
the technology has been improved and the Company expects to install these
improved systems in the fiscal 1998.
In May 1997, the Company entered into an agreement with KIT Concerns
("KIT") of Rio de Janiero, Brazil, for representation of AirLink in Brazil. In
December 1997, the agreement was extended to include a technical association
with Centro de Pesquisas de Energia Electrica ("CEPEL"), for the adaptation and
development of AirLink for Brazil and other South American markets. CEPEL is a
large research and development center that serves the Brazilian federal
utilities. It employs a large staff (492) of research engineers and technicians
specializing in a wide variety of disciplines related to energy generation and
distribution, especially the electric sector.
In June 1997, the Company entered into an agreement with International
Power and Environmental Company ("IPEC") to represent AirLink on a world-wide
basis, for use in automating parking meters. IPEC is a diversified company
organized to develop new business opportunities throughout the world,
particularly in the utility, environmental, and technology sectors.
9
<PAGE>
In July 1997, the Company entered into a Cooperative Marketing
Agreement with StarCom USA, Inc. ("StarCom"), under which the Company will
support StarCom in proposing an AirLink system for Puerto Rico.
During fiscal 1997, the Company submitted several proposals, which were
requested by utilities in the United States and three countries in South
America. Many of these proposals are still pending. While management believes
that these proposals are competitive, there can be no assurance that the Company
will be selected as a provider of these automated meter reading systems.
In April 1998, the Company entered into Memorandum of Understanding
with Symmetry Device Research ("Symmetry") to provide AirLink to Symmetry
clients. Symmetry is a licensed power marketer, broker and aggregator in the
state of California and expects to be certified by the California Public
Utilities Commission as a Meter Service Provider and Meter Data Management
Agent. The company specializes in power quality and energy management issues.
Subsequent Events
Subsequent to December 31, 1997, the Company entered into a
transaction, on April 6, 1998, with Quantix, a Nevada Corporation, to exchange
its holdings of 1,100,000 shares of 5% Convertible Class B Preferred Stock of
Natural Born Carvers, Inc. for a combination of real estate, trust deeds, and
promissory note. The transaction is intended to convert non-liquid assets of the
Company into those that can be used for the ongoing financing of the Company.
Management believes that the exchange of illiquid assets for liquid assets of
substantially equal value will enhance the ability of the Company to continue
financing its operations.
Liquidity and Capital Resources
Due principally to the sale of its real estate interests, including
GAM, the Company's total assets decreased by $3,644,998, or 45.2%, to $4,409,318
in the year ended December 31, 1997. The Company's total liabilities, however,
decreased $3,474,308, or 81% during fiscal 1997 due, principally, to the sale of
GAM.
As a result of the settlement of the Company's litigation related to
its Regulation S debenture. In March and May of 1998, liabilities have been
reduced by an additional $600,000.
Stockholders' equity was $3,596,308 at December 31, 1996, an increase of
$170,690, or 4.5%.
The Company had negative working capital of $59,896 at December 31, 1997,
compared to negative working capital of $520,501 at the end of the previous
fiscal year. The Company, through a private placement of its common stock,
raised $772,098 during fiscal 1997, which was used for operations and general
corporate purposes. The Company, through the placement of a convertible
debenture, raised an additional $600,000. The Company continues to pursue
additional capitalization through private placement, and other activities in
order to raise funds for ongoing operations, including the sale of or financing
of its assets. There can be no assurance, however, that the Company will be
successful in obtaining additional capital, or securing such capital on
acceptable terms.
Item 7.
Financial Statements and Supplementary Data
See index to financial statements included herein.
Item 8.
Change in and Disagreements with Accountants on Accounting and Financial
Disclosure
None.
10
<PAGE>
PART III
Item 9.
Directors, Executive Officers, Promoters and Control Persons, Compliance with
Section 16(a) of the Exchange Act
Item 9A.
Executive Officers and Directors of the Company
<TABLE>
<CAPTION>
Name Age Position Period of Service
- --------------------- -------- ----------------------------------------- ----------------------
<S> <C> <C> <C>
Eric W. Gaer 49 Chairman of the Board, President,
and Chief Executive Officer Since December, 1995
Guy R. Nelson 53 Director Since April, 1996
Richard H. Green 57 Director Since April, 1998
Michael deDomenico 53 Secretary, and Director Since September, 1994
- --------------------- -------- ----------------------------------------- ----------------------
</TABLE>
The biographies of the Directors and Officers are set forth below. All
Directors hold office until the next annual shareholders meeting or until their
death, resignation, retirement or until their successors have been elected and
qualified. Vacancies in the existing Board are filled by a majority vote of the
remaining Directors.
Eric W. Gaer, 49, is Chairman of the Board of Directors, President, and
Chief Executive Officer, of Greenland. He has broad experience in the general
development and promotion of high-technology products and services. Mr. Gaer has
more than 25 years of professional experience in high-technology management and
marketing. He has served in executive capacities for high-technology firms such
as Merisel, Inc., Venture Software, Daybreak Technologies, Inc., and Personal
Computer Products, Inc. Prior to joining Greenland, Mr. Gaer was President and
Chief Executive Officer of Integrated Communications Access Network, Inc. He
earned his Bachelor's degree in Mass Communications from California State
University at Northridge.
Guy R. Nelson, 53, is a Director of Greenland Corporation. He retired
in 1997 from the Western Area Power Administration, a federal agency, where he
had been Energy Services Manager since 1985. He has been involved in engineering
and technical aspects of conservation, planning, design, and implementation of
resource options, both demand-side and supply-side. Prior to his tenure at
Western Area Power, Nelson served as Director of the Environmental Protection
Agency's (EPA) Industrial Technology Transfer Division. A chemical engineer by
trade, Nelson is an active participant in utility trade associations, including
the California Municipal Utility Association and the Association of Energy
Engineers. He is a board member of the American Council for an Energy Efficient
Economy and the Utility Forum.
Dr. Richard H. Green, 57, is President of International Power &
Environmental Company, a San Diego- based company with offices in Los Angeles
and Baja California. It is a diversified company organized to develop new
business opportunities throughout the world, particularly in the utility,
environmental, and technology sectors. Dr. Green is a past Deputy Secretary for
Technology at the California Environmental Protection Agency (1993-95). He has
held numerous positions at the Jet Propulsion Laboratory (JPL), including
projects for NASA such as the Apollo 12 Mission and Moon landing. He was also a
senior engineer for the Boeing Company and served at a member of the Apollo 604
accident investigation team. He also serves as a member of the Educational
Advisory Council of Southern California Edison Company and as a member of the
Governing Board of Pasadena City College. He has also held posts at UCSD
Connect, the University of California at Berkeley, the 1984 Los Angeles Olympic
Games, the International Cogeneration Society, and the Intersociety Conference
on Environmental Systems. He is a recognized expert in environmental and energy
issues. He earned his masters and doctoral degrees from Washington State
University.
11
<PAGE>
Michael DeDomenico, 53, is Secretary and a Director of Greenland
Corporation, He was the President of the Company's GAM subsidiary until its sale
in December 1997. Mr. DeDomenico has been in the real estate business as a
developer since 1977. He received his Bachelor's degree from Cal Western
University and his Master of Arts degree from Northern Arizona University.
Item 9B.
Compliance with 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors, and greater than ten percent shareholders are
required by regulations promulgated by the Securities and Exchange Commission to
furnish the Company with copies of all Section 16(a) forms they file. With
reference to transactions during fiscal 1997, no reports were required to be
filed in 1997.
Item 10.
Executive Compensation
Information as to compensation earned for services in all capacities to
the Company for the last two fiscal years for the executive officers at December
31, 1997 is provided in the Company's definitive proxy statement filed in
accordance with rule 14a-101, Schedule 14A, which is incorporated in this Form
10-KSB by reference.
Item 11.
Security Ownership of Certain Beneficial Owners and Management
At the closed of business on April 15, 1998, the Company had 37,872,787
shares outstanding. No officers or directors are beneficial owners of five
percent (5%) or more of the Company's shares. The ownership of the Company's
common stock by management is included by reference to the Company's definitive
proxy statement filed in accordance with rule 14a-101, Schedule 14A.
Subsequent to the end of fiscal 1997, and pursuant to settlement, in
March, 1998, of a portion of the Company's 10% Convertible Debentures due April
30, 1999 under Regulation S, one entity, FT Trading, an Irish corporation,
converted $200,000 principal amount of Debentures for 5,000,000 shares of
Greenland Class A Common Stock. Additionally, FT Trading purchased an aggregate
of 1,250,000 additional shares of Greenland Class A Common Stock. Accordingly,
FT Trading was the holder of a total of 6,250,000 shares of Greenland common
stock at March 9, 1998. In May 1998, the balance of the Company's 10%
Convertible Debentures (principal amount of $400,000) were converted into
$4,000,000 shares of Greenland common stock. (Also see Legal Matters.)
Item 12.
Certain Relationships and Related Transactions
None.
12
<PAGE>
Item 13.
Exhibits and Reports on Form 8-K
(A) List of documents filed as part of this report.
(1) Financial Statements
Reference is made to the index to Financial Statements under Item 7 in Part
II hereof, where these documents are listed.
(2) Financial Statement Schedules
None
(3) Exhibits
(3a) On June 26, 1996, the Company filed Form 8-K (and associated
exhibits), related to acquisition of automated meter reading
technology from Ariel Systems, Inc., the divestiture of Ariel
Systems as an 80%-owned subsidiary of Greenland, and the
engagement of Ariel Systems as a consultant to the Company.
(3b) On August 23, 1996, the Company filed Form 8-K related to
management's discovery of certain information related to the
Interactive Video and Data Services ("IVDS") telecommunications
licenses held by the Company's wholly-owned ICAN, Inc. subsidiary.
(3c) On November 6, 1996, the Company filed Form 8-K containing notice
of certain changes in executive officers of the Company. Effective
November 1, 1996, Eric Gaer assumed the duties of chief executive
officer and Kevin Smith assumed the duties of chief financial
officer.
(3d) On April 18, 1997, the Company filed form 8-K containing notice
that, on April 9, 1997 the Company sold $600,000 in aggregate
principal amount of 10% Convertible Debentures due April 30, 1999
under Regulation S.
(3e) On January 22, 1998 the Company filed form 8-K containing notice
that, on December 31, 1997, the Company entered into an Agreement
of Exchange whereby the Registrant's shares of its wholly-owned
GAM Properties, Inc. subsidiary were exchanged for shares of
Golden Age Homes, Inc., a Delaware corporation.
(10a) Offer of Settlement in letter to Manos Consulting from the Company
counsel, Craig J. Shaber, dated August 9, 1995. Incorporated by
reference to the Company's Form 10-KSB filed February 7, 1996.
Incorporated by reference to the Company's Form 10-KSB filed April
1, 1997.
(10b) Letter of Agreement between the Company and Emerald People's
Utility District to install AirLink automated meter reading
system, dated May 23, 1996. Incorporated by reference to the
Company's Form 10-KSB filed April 1, 1997.
(10c) Letter of Agreement between the Company and Springville City
Electric to install AirLink automated meter reading system, dated
September 2, 1996. Incorporated by reference to the Company's Form
10- KSB filed April 1, 1997.
(10d) Letter of Agreement between the Company and Third Taxing District,
City of Norwalk, to install AirLink automated meter reading
system, dated September 30, 1996. Incorporated by reference to the
Company's Form 10-KSB filed April 1, 1997.
(10e) Escrow documents (Number 35473-A, Mission Valley Escrow, San
Diego, California) related to the purchase of the Company's
Pechanga Drive property in Temecula, California, dated May 28,
1996. Incorporated by reference to the Company's Form 10-KSB filed
April 1, 1997.
(10f) Standard office lease between Shih Ching Chiang and the Company
related to its principal office facilities on Miramar Road in San
Diego, California, dated December 3, 1996. Incorporated by
reference to the Company's Form 10-KSB filed April 1, 1997.
(10g) Settlement Agreement and Release between Gregory C. Manos and
Greenland Corporation and Kevin G. Smith, signed by the parties on
March 4, 1997 and February 27, 1997, respectively. Incorporated by
reference to the Company's Form 10-KSB filed April 1, 1997.
(10h) Settlement Agreement and Release of All Claims between Charles
Browne, HomeTech, LLC, Superior Interactive Group, Inc.,
TechnoScape, LLC, Susan Browne, Jay Shestak, Signature Leasing,
LLC and Greenland Corporation, Eric Gaer, and Kevin Smith, dated
March 20, 1997. Incorporated by reference to the Company's Form
10-KSB filed April 1, 1997.
13
<PAGE>
(10i) Distribution Agreement between the Company and KIT Concerns for
AirLink representation in Brazil, dated May 1, 1997.
(10j) Sales Representation Agreement between the Company and
International Power & Environmental Company, for worldwide
representation of AirLink devices for use in parking meters, dated
May 22, 1997.
(10k) Independent Contractor's Agreement, to provide the Company
management and strategic planning services, between the Company
and Kevin G. Smith, dated June 9, 1997.
(10l) Sales Representation Agreement between the Company and
International Power & Environmental Company, for representation of
AirLink in Spain and Portugal, dated June 14, 1997.
(10m) Assignment of Option Agreement between the Company and Eyre
Trading Group, Ltd. (currently Natural Born Carvers, Inc.)
transferring the Company's option to purchase 102 acres of
property near Tucson, Arizona in exchange for shares of
Convertible Preferred Stock of Natural Born Carvers, dated June
24, 1997.
(10n) Cooperative Marketing Agreement between the Company and StarCom
USA, Inc., dated July 21, 1997.
(10o) Counterpart to Distribution Agreement between the Company and
KIT Concerns, for representation of AirLink in Brazil and the
technical cooperation of CEPEL, dated December 5, 1997.
(10p) Exchange Agreement between the Company and Golden Age Homes, Inc.
for the exchange of Golden Age Convertible Preferred Stock for the
Company's GAM Properties, Inc. subsidiary, dated December 31, 1997.
(10q) Memorandum of Understanding between the Company and Symmetry
Device Research, dated April 2, 1998.
(10r) Exchange Agreement between the Company and Quantix for the
exchange of the Company's holdings in Convertible Preferred Stock
of Natural Born Carvers, Inc. for real estate, trust deeds, and
promissory note, dated April 6, 1998.
The Company will furnish a copy of any exhibit to a requesting
stockholder upon payment of the Company's reasonable expenses in furnishing such
exhibit.
14
<PAGE>
EXHIBIT 10i
DISTRIBUTION AGREEMENT
This Agreement is entered into effective May 1, 1997, by and between:
Greenland Corporation of 7084 Miramar Road, Suite 400, San Diego, CA 92121; a
corporation duly formed under the laws of the State of Nevada, U.S.A., hereafter
"Greenland"; and
KIT Concerns of Av. Aftanio de Melo Franco, 74S. 101 Leblon, Rio de
Janiero, RJ 22430-060, Brasil; and organization duly formed under the laws of
Brasil, hereafter "KIT".
RECITALS
WHEREAS Greenland has developed a technology involving an automated
meter reading system for electric, gas and water utilities and is seeking
qualified distributors for its product(s), and
WHEREAS KIT has the business and financial capability to effectively
distribute such automated meter reading product(s) and an interest in
distributing such product(s) on an exclusive basis in Brazil.
AGREEMENT
NOW THEREFORE, Greenland hereby grants KIT the exclusive right to
distribute its AirLink automated meter reading system(s) ("AirLink product(s)"),
as the same is designed and is further developed to read electric, gas, and
water meters, in the country of Brasil and agrees not to grant any competing
distribution and/or licensing rights to any other parties for use within the
country of Brasil; KIT hereby accepts such grant and agrees not to distribute,
market, or license a competing product in Brasil, nor to hold a controlling
interest in any company or entity that distributes, markets, licenses, or
manufactures a competing product in Brasil; and the parties further agree as
follows:
Formal performance guarantees are to be an integral part of maintaining the
exclusive nature of this Agreement; however, due to the untested nature of the
technology and product(s), particularly in Brasil, performance projections and
associated guarantees are difficult, if not impossible, to ascertain; therefore
the parties will endeavor, in good faith, to use their best efforts to formulate
mutually satisfactory and reasonable performance guarantees, or, in the
alternative, an agreed upon plan for formulating such guarantees, over the next
twelve (12) months.
Greenland will use its best efforts to timely provide KIT with all available
technical, engineering, and/or other data necessary to enable KIT to (a) analyze
the technical viability of the AirLink product(s) within Brasil; (b) estimate
the potential market size of the Brasilian market; and (c) formulate a business
plan for introduction of the AirLink product(s) into Brasil.
KIT will, over the next three (3) months, develop and provide to Greenland (a)
an analysis of the technical viability of the AirLink product(s) in Brasil; (b)
an estimate of the potential market size of the Brasilian market for the AirLink
product(s); and (c) a formal business plan for introduction of the AirLink
product(s) into the Brasilian market.
If the AirLink product(s) prove to be potentially viable in Brasil, KIT will
arrange a technology symposium, or other similar forum, in Brasil wherein Eric
Gaer, CEO of Greenland, or another designated Greenland executive, will be flown
to Brasil, at KIT's expense, to formallyintroduce the Greenland AirLink
product(s) to engineers and/or executives of potential Brasilian purchasers.
Greenland agrees that neither Greenland nor any other company, subsidiary,
associate, affiliate, or partner of Greenland, will (a) become involved in;
acquire any right, title, or interest in; by-pass or attempt to by-pass,
circumvent, or attempt to circumvent; or obviate any proprietary right or
interest that KIT may have under this Agreement with any person, firm,
corporation, partnership, or other entity whatsoever, nor (b) make contact with,
or attempt to make contact with, any person, firm, corporation, partnership, or
other entity whatsoever revealed to Greenland by KIT in connection with the
action(s) described above without first discussing the pertinent details with
KIT and agreeing to pay such fees to KIT as shall be agreed upon.
KIT will hire, if and when business demands, the necessary technicians to
provide equipment installations and ongoing technical support for customer
installations and will pay travel costs to have Greenland technicians flown to
Brasil to provide initial training to KIT technicians and to assist with such
initial purchase installations as may be required to adequately service KIT's
AirLink product(s) customers.
Exhibits
1
<PAGE>
KIT will adopt and abide by the pricing, customer service, technical support,
and other quality standards and policies utilized by Greenland, as the same may
be modified by the parties for distribution of the AirLink product(s) within the
Brasilian market. KIT further agrees to purchase all AirLink product(s) directly
through Greenland, unless the parties otherwise agree in writing to a different
manufacturing and/or purchasing arrangement.
KIT, if necessary, will use its best efforts to provide, or assist in providing,
project financing for any Brasilian orders for which Greenland is unable, after
using its best efforts, to provide financing.
KIT shall have the right to enter into joint-venture and/or sub-distribution
agreements with qualified Brasilian partners in order to maximize the
distribution of Greenland AirLink product(s) in Brasil, subject to the review
and approval of Greenland, which approval shall not be unreasonably withheld.
1.KIT acknowledges and agrees that Greenland is the sole and exclusive owner of
all rights, title, and interest in and to the intellectual property associated
with Greenland's AirLink product(s), and associated technology, including, but
not limited to, all patents, trademarks, tradenames, and associated copyright,
and nothing in this Agreement shall be construed as an assignment to KIT of any
right, title, or interest to such intellectual property. KIT further agrees to
not take any actions that would constitute a voluntary and knowing violation of
such intellectual property rights.
2.KIT recognized and acknowledges the value of the goodwill associated with
Greenland's AirLink product(s), and associated technology, and/or the associated
trademarks, tradenames, and copyrights and further acknowledges that all right
therein and the goodwill pertaining thereto belong exclusively to Greenland. KIT
acknowledges and agrees that any and all goodwill generated by its distribution
of the AirLink product(s) in Brasil shall inure to the benefit of Greenland and
that KIT shall not, at any time, acquire any rights in the goodwill of the
AirLink product(s) and/or the associated trademarks, tradenames, and copyrights.
3.KIT shall not use Greenland's name and/or the AirLink product(s)' trademarks,
tradenames, and/or copyrights other than as permitted under this Agreement and,
in particular, shall not incorporate such names and/or marks in KIT's corporate
or business name(s) in any manner whatsoever. KIT further agrees that it will
not use and/or authorize the use, either during the term of this Agreement, or
after the term of this Agreement, of any configuration, trademark, tradename, or
other designation confusingly similar to Greenland's trademarks, tradenames,
and/or copyrights.
4.KIT agrees to comply with the provisions of the patent, trademark, and/or
copyright laws of the United States and Brasil with respect to its rights of
distribution under this Agreement and agrees to keep accurate records of and
advise Greenland when each of the AirLink products is first sold in Brasil.
Greenland has the right, but not the obligation, to obtain at its own cost,
appropriate patent, trademark, and copyright protection for its products and KIT
agrees to (1) cooperate with Greenland in protecting any such protection(s) in
the country of Brasil and (2) advise Greenland in writing of any possible
infringements thereof of which KIT becomes aware. Greenland has no obligation to
take any action whatsoever to protect its intellectual property rights; however,
all such actions that Greenland chooses to take shall be taken at Greenland's
expense, with the cooperation of KIT.
5.Greenland hereby agrees to defend, indemnify and hold KIT harmless against any
claims, demands, causes of action and judgments arising solely out of the use of
the AirLink product(s), patents, trademarks, tradenames, and/or copyrights by
KIT as authorized under this Agreement, including, but not limited to, KIT's
conformance with Greenland's warranties and conditions of sale, provided that
KIT shall give notice and further that Greenland shall have the right to
undertake and conduct the defense of any such cause of action or such action so
brought, and the right to handle any such claim or demand.
6.KIT agrees to keep accurate books of account and records at its principal
place of business covering all transactions relating to the distribution of
AirLink product(s). Greenland and its duly authorized representatives shall have
the right, upon fifteen (15) days notice to KIT, to inspect such books of
account and records, and all other documents and material in the possession or
under the control of KIT with respect to the subject matter and the terms of
this Agreement and to make copies and extracts thereof. KIT further agrees to
retain all such books of account and records for at least two (2) years after
termination of this Agreement for possible inspection by Greenland.
7.This Agreement shall remain in effect for ten years and thereafter be
renewable for consecutive, renewable ten year terms for so long as KIT and
Greenland, and/or their respective successors, assigns, parties in interest,
and/or affiliates, maintain commercially viable operations involving the AirLink
product(s), or until such time as termination occurs under Item 17, below.
The following termination rights are in addition to any other termination rights
that may be provided elsewhere in this Agreement:
Exhibits
2
<PAGE>
(a) Greenland shall have the right to immediately terminate this
Agreement by giving written notice to KIT if KIT does any of the following:
Breaches any of the provisions of this Agreement relating to the
unauthorized assertion of rights in the AirLink product(s), patents,
trademarks, tradenames, and/or copyrights; or
Breaches any of the provisions of this Agreement prohibiting KIT
from directly or indirectly arranging for manufacture of the AirLink
product(s) or technologies by third parties without first obtaining
Greenland's express written consent.
(b) Except as otherwise expressly provided for under the terms of this
Agreement, this Agreement may be terminated by either party upon thirty (30)
days written notice to the other party in the following events, provided that
during the thirty (30) day period, the defaulting party fails to cure the
breach:
(i) A party, or any of its officers, directors, employees,
successors, assigns, parties in interest, and/or affiliates take any
actions in connection with the manufacture, offering for sale, sale,
advertising, support, and/or promotion which damages or reflects
adversely upon the other party.
(ii) A party violates any of its obligations under this
Agreement or commits a material breach of any provision hereunder.
(iii) A party files a petition in bankruptcy or is adjudicated
a bankrupt or insolvent, or makes an assignment for the benefit of
creditors, or an arrangement pursuant to any bankruptcy law (or the
equivalent thereof), or if a party discontinues its business or if a
receiver (or the equivalent) is appointed for a party and such receiver
is not discharged within the thirty (30) day period.
In the event of termination of this Agreement, all rights granted to KIT shall
forthwith revert to Greenland, who shall be free to grant such rights to others,
as it may see fit, and KIT shall refrain from further use and/or distribution of
the AirLink product(s) and/or any further reference to them, either directly or
indirectly, in connection with the offering for sale, sale, advertising,
promotion, shipment, and/or distribution of AirLink product(s). KIT acknowledges
that its failure to cease such use after termination of this Agreement will
result in immediate damage to Greenland and to any subsequent distributor of the
AirLink product(s) in Brasil, and that Greenland shall be entitled to equitable
relief by way of injunctive relief and such other relief as any court with
jurisdiction may deem just and proper. Upon termination of this Agreement,
notwithstanding anything to the contrary herein, all billings on sales,
shipments, and/or distributions thereto shall become immediately due and
payable. Within thirty (30) days after termination of this Agreement, KIT shall
deliver to Greenland a complete accounting of all activities associated with the
distribution and sale of AirLink product(s), including an accounting of all
inventory and outstanding purchase orders and/or requests for proposals to
Brasilian customers. Greenland shall have the option of conducting, at its
expense, a physical inventory at the time of termination and/or a later date in
order to ascertain or verify such accounting(s).
No waiver by either party of a breach or a default hereunder shall be deemed a
waiver by such party of a subsequent breach or default of a like or similar
nature; no failure or delay on the part of any party in exercising any power,
right, privilege, or remedy under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, privilege,
power, or remedy; and any waiver of any provision of this Agreement and/or any
consent to any departure by any of the parties from the terms of this Agreement
shall be effective only in the specific instance and for the specific purpose
for which it is given.
1.This Agreement will be governed, executed, and enforced in accordance with and
under the laws of the United States and the State of California and the parties
agree to the use of International Arbitration in the event a dispute arises that
can not be resolved between the parties. Any such arbitration sessions will be
held in San Diego, California, or the nearest available location thereto.
2.KIT shall not directly or indirectly assign or pass off the benefits and/or
obligations of this Agreement or otherwise deal with any such contract(s)
without giving Greenland prior notice and acceptance guarantees for the
continued performance of any and all obligations provided and allowed for under
this Agreement. This Agreement is fully assignable by Greenland and shall inure
to the benefit of Greenland's assignees or other legal successors in interest.
3.If for any reason any portion of this Agreement is or becomes invalid,
illegal, unenforceable and/or voidable, all other portions shall remain valid
and unaffected. To the extent possible under law, the parties shall amend this
Agreement in order to preserve the original intentions of the parties hereunder.
Exhibits
3
<PAGE>
4.This Agreement forms and fully represents the agreement in whole between the
parties and it supersedes any and all prior agreements and obligations, oral or
written, between the parties.
5.Neither this Agreement nor any term hereof may be amended, waived, discharged,
or terminated except by a written instrument signed by all parties to this
Agreement.
6.This Agreement may be executed in any number of duly signed counterparts, each
of which shall be an original, but all of which together shall constitute one
instrument.
7.The parties to this Agreement, and each of them, maintain their independence
from the other and neither party hereto is designated as an agent of, nor hired
as an employee of, the other. Neither party has the authority to bind the other
or to make commitments on behalf of the other, and neither shall represent
itself as an agent of the other, or in any capacity other than as an independent
entity.
8.A signature received pursuant to a facsimile transmission shall be sufficient
to bind a party to this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered, by their duly authorized officers, effective as of the day and year
first written above.
GREENLAND KIT
By: Eric W. Gaer By: Paulo Klabin
Title: President and CEO Title: Managing Director
Exhibits
4
<PAGE>
EXHIBIT 10j
SALES AGENCY AND REVENUE SHARING AGREEMENT
Agreement made this 22nd day of May, 1997, by and between Greenland
Corporation, a Nevada corporation ("Principal"), 7084 Miramar Road, 4th Floor,
San Diego, California 92121 and International Power & Environmental Company, a
California corporation, 812 San Luis Obispo Place, Suite C, San Diego,
California 92109, ("Agent").
In consideration of the mutual terms, conditions and covenants
hereinafter set forth, Principal and Agent agree as follows:
Principal appoints Agent as its world-wide sales representative to sell the
products and/or contracts for installation of the products in a sales agency
revenue-sharing agreement of the Principal related to Greenland Corporation's
proposed AirLink(TM) parking meter automation system.
Agent accepts the appointment and agrees to promote, market and sell the
products of the Principal under terms mutually acceptable to Principal and Agent
as established from time-to-time based upon the requirements of each particular
transaction.
The parties agree that the list of products and/or prices may be amended from
time to time. Principal may unilaterally change terms of sale and prices.
Recognizing that the terms of certain contracts involving the AirLink parking
meter automation system may vary, Principal and Agent may mutually change the
terms of the Revenue Sharing Agreement
Agent's territory to represent Principal's products shall be world-wide (the
"Territory"), which may be amended by mutual written agreement. Agent shall have
the exclusive right to represent the products described in paragraph 1, above.
Such exclusive right, however, is contingent upon minimum gross revenues from
sales, subject to the following schedule:
Gross
Revenues
May 1997 through August 1998 No Minimum
September 1998 through August 1999 $ 10,000,000
September 1999 through August 2000 15,000,000
September 2000 through August 2001 20,000,000
September 2001 through August 2002 25,000,000
If sales volume is not achieved according to the minimum amounts
specified herein, then Agent's exclusive right to represent Principal for the
product(s) specified will terminate. However, so long as Agent continues to
represent Principal, the other terms and conditions of this Agreement shall
remain in full force and effect.
Agent shall use its best efforts to promote, market and sell the products
referenced in paragraph 1, above, within the allocated territory and shall
devote such time and attention as may be reasonably necessary.
Under Revenue Sharing Agreements (as opposed to outright sales agreements),
Agent shall also be responsible for management and operations of the AirLink
parking meter automation system and may contract with third parties to do so.
Greenland shall provide reasonable technical support or assistance to enable
Agent to fulfill its responsibilities under this section.
Agent agrees that during the term of this Agreement and for a period of two (2)
years thereafter, Agent, either directly or indirectly, shall handle no products
that are competitive with AirLink products within the Territory.
Principal agrees that Agent may employ representatives in furtherance of this
Agreement and Agent agrees that Agent shall be solely responsible for the
payment of wages or commissions to those representatives and that under no
circumstances shall Agent's representatives be deemed employees of Principal for
any purpose whatsoever.
Exhibits
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For revenue sharing contracts, Principal and Agent will divide cash receipts,
net of payments to customers, equally (50% each). Such distribution may be
amended from time to time by mutual agreement. Payments shall be made monthly
within twenty (20) days of the end of the month. Payments shall be made in U.S.
currency.
In the case of direct sale of the AirLink automated parking meter system,
Principal shall pay a commission to Agent equal to 50% of the gross profits on
sales, which commission may be amended from time to time by mutual agreement.
Principal shall be responsible for the granting of credit to customers and shall
pay commissions to Agent within twenty (20) days of receipt of payment from
customers.
The books, records, reports and accounts of both Principal and Agent shall be
kept at all times so as to accurately reflect the business and financial
condition of the operations covered under this Agreement. Said books, etc. shall
be kept at the main business addresses of Principal and Agent. Upon ten (10)
days' written notice, given to the other, any party may audit and inspect said
books, records, reports and accounts during normal business hours.
After the receipt, by Principal, of project financing under terms acceptable to
Principal, Agent shall be entitled to an advance payment of fifteen thousand
dollars ($15,000.00) for each individual project, so long as such project
includes a minimum of ten thousand (10,000) units. Should any of the first three
projects include more than 10,000 units, then Agent shall be entitled to $15,000
for each 10,000 quantity of units ordered.
For so long as Agent achieves minimum sales volume as specified on the schedule
in paragraph 4, above, Principal shall provide to Agent, warrants to purchase
the common stock of Principal in amounts and at prices according to the
following schedule:
Warrants Price/Share
June 1, 1997 to May 31, 1998 50,000 $ 0.50
June 1, 1998 to May 31, 1999 150,000 2.00
June 1, 1999 to May 31, 2000 200,000 4.00
This Agreement shall be for a period of ten (10) years unless sooner terminated
by mutual agreement of the parties; or, for cause, by either party upon thirty
(30) days' written notice. It shall be renewable for an additional ten (10) year
period at Agent's option.
Upon termination, Agent and Principal shall be entitled to receive commissions
and/or revenue sharing payments received from all orders accepted by Principal
prior to the date of termination. Payment to be made according to the terms of
paragraph 9, above.
Agent is an independent contractor and nothing contained in this Agreement shall
be deemed or interpreted to constitute the Agent as a partner or employee of the
Principal, nor shall either party have any authority to bind the other in any
respect, it being understood and agreed that all orders submitted by Agent are
subject to acceptance by Principal in its sole discretion.
It is agreed between the parties that there are no other agreements or
understandings between them relating to the subject matter of this Agreement.
This Agreement supersedes all prior agreements, oral or written, between the
parties and is intended as a complete and exclusive statement of the agreement
between the parties. No change or modification of this Agreement shall be valid
unless the same be in writing and signed by the parties.
This Agreement shall not be assigned by Agent without the prior written consent
of Principal. In the event of a change of ownership or control of Principal,
this Agreement and all of its terms and conditions, will remain in full force
and effect.
Agent shall not divulge to any person, firm or firms, corporation or
corporations, any trade secret having to do with the business of Principal that
shall come to the knowledge of Agent by reason of this Agreement or the
relationship of Principal and Agent created by this Agreement, during the term
of this Agreement and for three (3) years after the termination of this
Agreement.
Agent agrees that Principal shall not be liable for: any (i) losses; (ii)
damage, including consequential damages; (iii) detention; (iv) delay or failure
to perform in whole or in part resulting from causes beyond the control of
Principal including but not limited to: acts of God; acts or omissions of
Principal; fires; strikes; insurrections; riots; embargoes; delays in
transportation; inability to obtain supplies; or requirements or regulations of
the
Exhibits
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United States government or any other civil or military authority. Delays or
non-performance excused by this provision shall not excuse payment of any amount
due hereunder owed at the time of the occurrence.
No waiver of any term, provision or condition of this Agreement, the breach or
default thereof, by conduct or otherwise, in one or more instances shall be
deemed to be either a continuing waiver or a waiver of a subsequent breach or
default of any such term, provision or condition of this Agreement.
All notices required or permitted to be given hereunder shall be in writing and
may be delivered personally or by Certified Mail - Return Receipt Requested,
postage prepaid, addressed to the party's last known address; or by facsimile
transmission.
This Agreement shall be construed in accordance with and governed by the laws of
the State of California.
The Parties will attempt through good faith negotiation to resolve their
disputes. The term "disputes" includes, without limitation, any disagreements
between the Parties concerning the existence, formation, and interpretation of
this Agreement and their obligation thereunder. If the Parties hereto are unable
to resolve their disputes through mediation. If mediation proves unsuccessful,
either Party may commence arbitration by sending a written notice of arbitration
to the other Party. The notice will state the dispute with particularity. As
part of the arbitrator's decision, the arbitrator may allocate the cost of
arbitration, including fees of attorneys and experts, as the arbitrator deems
fair and equitable in light of all relevant circumstances.
If the Parties reasonably believe that the amount in controversy will
be less than One Hundred Fifty Thousand Dollars ($150,000), such arbitration
will be conducted in San Diego, California by an arbitrator selected by the
Parties, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect. In this regard, each Party shall retain
the right to cross-examine the opposing Party's witnesses, either through legal
counsel, expert witnesses, or both. The decision of the arbitrator(s) shall be
final, binding, and conclusive on all Parties (without any right to appeal
therefrom) and shall not be subject to judicial review (except for abuse of the
arbitrator's discretion).
If the Parties reasonably believe that the amount in controversy will
be One Hundred Fifty Thousand Dollars ($150,000) or greater, then the parties
are not bound to arbitrate the dispute and may commence an action in Superior
Court in San Diego, California, or in U.S. District Court in that jurisdiction.
INTENDING TO BE LEGALLY BOUND, the parties hereto have caused this Agreement to
be executed as of the date first above written.
GREENLAND CORPORATION
BY: Eric W. Gaer, President and CEO
INTERNATIONAL POWER & ENVIRONMENTAL COMPANY
BY: Richard H. Green, President
BY: Ing. Mario Diaz Lugo, Vice President
Exhibits
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EXHIBIT 10k
INDEPENDENT CONTRACTOR'S AGREEMENT
This INDEPENDENT CONTRACTOR'S agreement ("Agreement") is entered into this 9th
day of June, 1997, by and between Greenland Corporation, a Nevada corporation
("Greenland" and/or the "Corporation") and Kevin G. Smith, ("Smith" or
"Consultant"), an individual, for the purpose of serving at the pleasure of the
Board of Directors of Greenland Corporation.
1. Recital
This Agreement is entered into in contemplation of the following facts,
circumstances and representations:
1.1 The parties desire to enter into an agreement whereby Consultant shall
lease office space from the Corporation and provide management with
strategic planning advise.
1.2 Consultantagrees to the terms and conditions as more specifically set forth
herein.
1.2 As a condition of entering into this Agreement, the Consultant agrees to
assign all rights to any intellectual property developed by the Consultant for
any Greenland projects while working under the terms of this Agreement to
Greenland.
Now, therefore, the parties hereto agree as follows:
2. Definitions
2.1 The term "Technology" shall include but not be limited to inventions,
patented inventions, patent-pending inventions, copyrights, copyrightable works,
trade secrets, concepts formed in the mind of an inventor or author of a
definite and permanent idea of the complete and operative invention or
expression as it is thereafter to be applied in practice, expressed, or concepts
capable of being reduced to practice or being expressed by any person or
person(s) directly or indirectly employed by Greenland or any of its associated
software, patents, pending patents, and trade secrets.
2.2 "Documentation" shall mean all specifications, manuals, documents, drawings,
and other tangible materials pertaining to the Company's products, and related
Technology.
2.3 The term "Product" shall mean any product or part thereof which:
(a) is covered in whole or in part by an issued, unexpired claim or a
pending claim contained in the Patent Rights in the country in which any Product
is made, used or sold;
(b) is covered in whole or in part by a copyright, either common law
copyright or registered copyright, belonging to Greenland;
(c) is manufactured by using a process which is covered in whole or in
part by an issued, unexpired claim or a pending claim contained in the Patent
Rights in the country in which any Product is used or in which such product or
part thereof is used or sold;
(d) is manufactured in whole or in part by using a process which is a
trade secret of Greenland;
(e) is derived from Patent Rights, copyrights, Know-How and /or trade
secrets related to Technology;
(f) any expression which is covered in whole or in part by a copyright,
either common law copyright or registered copyright, belonging to Greenland;
(g) any process, device or article of manufacture which is covered in
whole or in part by an issued, unexpired patent, which is the property of
Greenland;
(h) is derived from copyrights, Patent Rights, Know-How, and/or trade
secrets related to its Products and/or Technology.
Exhibits
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2.4 "Know-How" shall mean any and all technical data, information, or knowledge
which relates to the Technology, Product, or the manufacture, marketing,
registration, purity, quality, potency, safety, and efficacy of the Product.
3. Scope Of Work To Be Performed By Consultant
3.1 Consultant shall serve at the pleasure of the Board of Greenland
Corporation, and will advise the Board on management and technology matters.
Consultant will report directly to Greenland's Board of Directors.
3.3 Consultant shall deliver reports from time-to-time as requested by the Board
of Directors; such reports shall be written and/or verbal as determined by
Consultant.
4. Price and Payment
4.1 Cash Compensation; Terms of Payment. Greenland shall pay Consultant for his
services $1,900 per week, until such time as a note he holds from Greenland,
dated 6/9/97 (see Exhibit A) is paid in full, then Consultant shall receive
$1,750 per week. It is understood that due to the start-up nature of the
Corporation any salary that cannot be timely paid will accrue and be payable at
a later date.
4.2 Shares: Terms of Payment. In addition to cash compensation, Greenland shall
pay Consultant for his services 100,000 shares of common stock issued under Rule
144 per year. The first 100,000 shares are to be issued upon the signing of this
Agreement and the second block of 100,000 shares are to be issued at the
beginning of the second year of the contract.
4.3 Office Rental: Greenland shall provide Consultant with office space on the
northwest side of the building (large back office) at the rental price of $200
per week. This rental clause shall remain in effect for a period of two years.
4.4 Expenses. Consultant will be reimbursed for expenses of up to $500 per
month. All expenses in excess of $500 per month must be pre-approved.
5. Ownership of Technology and Product
5.1 The Technology and Product and all aspects of the Technology and Product,
including but not limited to the Technology and Product software and hardware,
(but excluding materials, designs or expressions that are within the public
domain or that Consultant has previously expressed, has file copyright
registrations for, Copyright registration has been issued or has patented or has
patent claims pending) developed, expressed or manufactured under this
Agreement, shall be owned exclusively by Greenland.
5.2 Consultant hereby expressly waives all rights to all intellectual property
conceived, developed, expressed or reduced to practice by Consultant and
regarding the Technology and/or Product, or the Technology and/or Product's
manufacture. Such intellectual property includes any and all trade secrets,
expressions, copyrights and patentable process, machine, manufacture or
composition of matter regarding the Technology and/or Product.
5.3 Consultant acknowledges and expressly agrees to assign any and all rights to
all intellectual property conceived, developed, expressed or reduced to practice
regarding the Technology and/or Product, or the Technology and/or Product's
manufacture. Such intellectual property includes any and all trade secrets,
expressions, copyrights and patentable process, machine, manufacture or
composition of matter regarding the Technology and/or Product. All such trade
secrets, expressions, copyrights and patentable products or processes shall be
owned exclusively by Greenland.
5.4 Consultant will provide Greenland with executed confidentiality and
invention agreements (a copy of which is attached hereto and made a part
hereof).
6. Proprietary Information and Materials
6.1 Definition. For the purposes of this Agreement, the term "Proprietary
Information and Materials" shall include the following items which belong to or
have been developed by Greenland, or have been developed for Greenland under or
in conjunction with this Agreement: (i) written information, data, documents and
other material regarding or relating to the Technology and/or Product, including
source code, object code, engineering drawings, blueprints, specifications,
diagrams, manuals, parts lists, glossaries, maintenance procedures, handbooks
and instruction books, if any, which have been clearly marked "Greenland
Proprietary" or
Exhibits
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"Confidential" on the first page of the same, or orally disclosed by Greenland
to Consultant and so designated in writing within 14 days of oral disclosure;
and (ii) technology, products, designs, copyrights, source code, object code,
inventions, trade secrets, trademarks, trade names ad service marks, including
but not limited to the Technology and/or Product.
6.2 Confidentiality. Unless Consultant first shall have obtained the express
written consent of Greenland, Consultant will not use any Proprietary
Information or materials for purposes other than the development, testing and
production of the Technology and/or Product hereunder. All proprietary
Information and Materials is to be kept confidential and is not to be supplied
to any other person, firm or entity for any purpose without express written
consent of Greenland. For a period of five (5) years from the date of disclosure
of such Proprietary Information, each party agrees to keep confidential all such
Proprietary Information disclosed to it by the other party in accordance
herewith, and to protect the confidentiality thereof in the same manner it
protects the confidentiality of similar information and data of its own (at all
times exercising at least a reasonable degree of care in the protection of
Proprietary Information); provided, however, that neither party shall have any
such obligation with respect to use or disclosure to others not parties to this
Agreement of such Proprietary Information as can be established to: (a) have
been known publicly; (b) have been known generally in the industry before
communication by the disclosing party to the recipient; (c) have been developed
independently by the recipient; (d) have become public, without fault on the
part of the recipient, subsequent to disclosure by the disclosing party; (e)
have been known otherwise by the recipient before communication by the
disclosing party; or (f) have been received by the recipient at any time from a
source (other than the disclosing party) lawfully having possession of such
information.
6.3 Return of Proprietary Information and Materials to Greenland. Upon
completion of this Agreement, or in the event this Agreement is terminated by
either party, or if either party shall fail or refuse to perform this Agreement,
Consultant shall forthwith return all Proprietary Information and Materials to
Greenland.
6.4 No License to Manufacture or Sell. Consultant shall not have any right
whatever to manufacture, copy, derivate, distribute assemble, offer or sell or
cause to be manufactured, copied, derivated, distributed, assembled, offered or
sold, the Technology and/or Product or any Products or Technology of Greenland.
7. Terms and Termination
7.1 This Agreement shall become effective as of the date first written above and
continue in effect for a period of one year or termination hereunder except for
the provisions of paragraph 6.2 which shall be binding for five years from the
termination of this Agreement.
7.2 Greenland may terminate this Agreement if the Board of Directors determines
that the continuation of the Agreement is not in the best interests of the
Shareholders. Such termination will be effected by delivery of thirty day (30)
written notice to Consultant. In the event that Greenland terminates this
contract then Greenland shall pay consult through the date of actual
termination.
7.3 Upon notice of termination hereof, Consultant shall return any and all data,
manuals, documents, magnetic tapes, computer disc or other medium of information
relating to the Technology and/or Product.
7.4 The term of this Agreement may be extended by mutual agreement of the
parties as expressed in writing.
8. Events of Default and Remedies; Cancellation
[THIS SECTION INTENTIONALLY LEFT BLANK]
9. General Terms
9.1 Cooperation of Parties: The parties further agree that they will do all that
is required and necessary to accomplish and facilitate the purposes of this
Agreement and that they will sign and execute any and all documents necessary to
bring about and perfect the purposes of this Agreement.
9.2 Interpretations of Agreement: The parties hereto agree that should any
provision of this Agreement be found to be ambiguous in any way, such ambiguity
shall not be resolved by construing such provisions or any part of or the entire
Agreement in favor of or against any party herein, but rather by construing the
terms of this Agreement fairly and reasonably in accordance with their generally
accepted meaning.
Exhibits
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9.3 No Presumption Against Drafting Party: This Agreement and the provisions
contained herein shall not be construed or interpreted for or against any party
hereto because said party drafted or caused the party's legal representative to
draft any of its provisions.
9.4 Amendments Modifications and Waivers: No amendment, modification or waiver
of any provision of this Agreement shall in any event be effective unless the
same shall be in writing and signed by the parties hereto. No failure or delay
on the part of any party in exercising any power, right privilege or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy constitute a waiver of any
other or further exercise of any right, power or remedy. Any waiver of any
provision of this Agreement, and any consent to any departure by any of the
parties from the terms of any provision of this Agreement, shall be effective
only in the specific instance and for the specific purpose for which given.
9.5 Severability of Provisions: This Agreement shall be performed and shall be
enforceable to the full extent allowable by applicable law. In the event that
any provision to this Agreement is declared by a court of competent jurisdiction
to be illegal, invalid, or unenforceable that provision will be severed from the
Agreement and the Agreement shall be read as if it did not contain said
provision. Any such provision and its severance shall not affect the legality,
validity, applicability, enforceability or effect of the remaining provisions of
this Agreement.
9.6 Assignments: None of the parties rights, duties or obligation under this
Agreement are assignable by any of the parties hereto without the prior written
consent of the other party and any attempted assignment without prior written
consent shall be null and void.
9.7 Entire Agreement: This Agreement constitutes the entire Agreement and
understanding of the parties hereto with respect to the matters herein set
forth, and all prior negotiations, writings and understandings relating to the
subject matter of this Agreement are merged herein and are superseded and
canceled by this Agreement. In executing this Agreement, the parties have not
and do not rely on any statements, inducements, promises, or representations
made by the other party or their agents, representatives or attorneys with
regard to the subject matter, basis, or effect of this Agreement, except for
those specifically set forth in this Agreement. The parties acknowledge that the
terms of this Agreement are contractual and not a mere recital. Each party
hereto further certifies that it is fully familiar with the provisions of this
Agreement.
9.8 Successors: This Agreement shall be binding upon and shall inure to the
benefit of the respective parties thereto, their legal successors, parent
corporations, subsidiaries, assigns, and legal representatives.
9.9 Choice of Law: The validity and interpretation of this Agreement and each
clause and part thereof shall be governed by, and construed in accordance with,
the laws and regulations then prevailing in the State of California.
9.10 Arbitration, Legal Proceedings and Venue: The parties will attempt through
good faith negotiation to resolve their disputes. The term "disputes" includes,
without limitation, any disagreements between the parties concerning the
existence, formation and interpretation of this Agreement and their obligation
thereunder. If the parties hereto are unable to resolve their disputes by
negotiation, they shall attempt to resolve their disputes through mediation. If
mediation proves unsuccessful, either party may commence arbitration by sending
a written notice of arbitration to the other party. The notice will state the
dispute with particularity. As part of the arbitrators decision, the arbitrator
may allocate the cost of arbitration, including fees of attorneys and experts,
as the arbitrator deems fair and equitable in light of all relevant
circumstances. The arbitration hearing shall be commenced thirty (30) days
following the date of delivery of notice of arbitration to the other party, or
as soon thereafter as set by the arbitrator(s).
If the parties reasonably believe that the amount in controversy will
be less than Thirty Thousand Dollars ($30,000), such arbitration will be
conducted in San Diego, California by an arbitrator selected by the parties, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. If the amount in controversy will likely exceed
Thirty Thousand Dollars ($30,000), such arbitration shall be conducted by the
Judicial Arbitration and Mediation Services, Inc. ("JAMS") as arbitrator in San
Diego, California in accordance with the rules promulgated by JAMS (with the
widest rights of discovery as provided in the California Code of Civil
Procedure). In this regard, each party shall retain the right to cross-examine
the opposing party's witnesses, either through legal counsel, expert witnesses
or both. The decision of the arbitrator(s) shall be final, binding and
conclusive on all parties (without any right to appeal therefrom) and shall not
be subject to judicial review (except for abuse of the arbitrator's discretion).
Exhibits
11
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If the parties reasonably believe that the amount in controversy will
exceed One Hundred Thousand Dollars ($100,000), then the parties are not bound
to arbitrate the dispute and may commence an action in Superior Court in the
County of San Diego, or in U.S District Court, Southern District of California.
9.11 Attorney Fees: If any legal action or any arbitration or other proceeding
is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of the Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorney's fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it may be
entitled.
9.12 Remedies Cumulative: Except as otherwise expressly set forth in this
Agreement, the rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party may otherwise have at law or
in equity.
9.13 Notices. Whenever any party desires or is required to give any notice,
demand, or request to this Agreement, each such communication shall be in
writing and shall be effective only if it is delivered by overnight messenger
services, express or electronic means (with confirmed receipt) to the other
party.
Such communications shall be effective when they are received by the addressee.
Any party may change its address for such communications by giving an
appropriate notice to the other party in conformity with this Section.
9.14 No Joint Venture: Nothing contained in this Agreement shall be deemed or
construed as creating a joint venture or partnership between the parties. Except
as expressly set forth, no party by virtue of this Agreement is authorized as an
agent, Consultant, or legal representative of any other party, and the
relationship of the parties is, and at all times will continue to be, that of
Consultant's.
9.15 Headings: The provision heading in this Agreement are for reference and
convenience only. They do not form a part hereof, and do not in any way codify,
interpret, or reflect the intent of the parties. Said headings shall not be used
to construe or interpret any provision of this Agreement.
9.16 Gender and Number: In this Agreement where the context so requires, the
masculine, feminine or neuter gender shall be deemed to include each other, and
the singular to include the plural.
9.17 Counterparts: This Agreement may be signed in one or more counterparts.
9.18 Facsimile Transmission Signature: A signature received pursuant to a
facsimile transmission shall be sufficient to bind a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first indicated above and this Agreement is effective as of
that date.
GREENLAND CORPORATION
BY: Michael deDomenico, Director
KEVIN G. SMITH
Exhibits
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EXHIBIT 10l
SALES AGENCY AGREEMENT
Agreement made this 14th day of June 1997, by and between Greenland
Corporation, a Nevada corporation ("Principal"), 7084 Miramar Road, 4th Floor,
San Diego, California 92121, International Power & Environmental Company, a
California corporation, 812 San Luis Obispo Place, Suite C, San Diego,
California 92109, ("Agent"), and Delgado & Ibanez, a Spanish law firm, Avenida
de Filipinas, 48, 28003 Madrid, Spain ("Representative").
In consideration of the mutual terms, conditions and covenants
hereinafter set forth, Principal, Agent, and Representative agree as follows:
Principalappoints both Agent and Representative as its sales representatives to
sell the products and/or contracts for installation of the products of
the Principal related to Greenland Corporation's AirLink(TM) automated
meter reading system for electric, water, and gas utilities.
Agent and Representative accept the appointment and agree to promote, market and
sell the products of the Principal under terms mutually acceptable to Principal,
Agent, and Representative as established from time-to-time based upon the
requirements of each particular transaction.
The parties agree that the list of products and/or prices may be amended from
time to time. Principal may unilaterally change terms of sale and prices.
Agent and Representative shall be entitled to represent Principal's products in
Spain and Portugal to customers that Agent and/or Representative shall identify,
in advance, in writing to Principal. Principal shall have the right to refuse
any orders submitted by Agent in its sole discretion. Notwithstanding the fact
that Principal may have also established prior relationships with potential
customers for its products, Principal shall not accept orders from customers
identified in advance by Agent and/or Representative, in writing, without paying
Agent and Representative commissions outlined in this Agreement.
Agent and Representative shall use their best efforts to promote, market and
sell the products referenced in paragraph 1, above, and to devote such time and
attention as may be reasonably necessary.
Agent and Representative agree that, during the term of this Agreement, and for
a period of one (1) year thereafter, Agent and Representative, either directly
or indirectly, shall handle no products that are competitive with AirLink
products.
Principal agrees that Agent and Representative may employ representatives in
furtherance of this Agreement and Agent and Representative agree that they shall
be solely responsible for the payment of wages or commissions to those
representatives and that under no circumstances shall their representatives be
deemed employees of Principal for any purpose whatsoever.
Notwithstanding paragraph 3, above, for sales of AirLink electric meter reading
units, Principal shall sell each unit for $100.00 and shall pay Agent $20.00 per
unit as a sales commission and shall pay Representative $10.00 per unit as sales
commission and an additional $20.00 per unit to provide financing for the sale.
Prices and Agent fees for water and gas meters shall be established at a later
date. It is understood that fees paid to Agent and Representative for sales of
AirLink products are determined based upon the sales price. However, both
Principal and Agent agree that these terms can be modified from time to time
and/or from sale to sale with their mutual consent. Representative shall be
responsible for providing financing of the entire purchase price of each sale
and shall be entitled to withhold commissions and fees while remitting the
balance of not less than $50.00 per unit to Principal. All orders shall be paid
for in advance and funds may be placed in escrow in favor of Principal to draw
on said escrow account according to a schedule approved in advance.
Minimum opening orders shall be for five thousand (5,000) units. Orders in
smaller quantities will be accepted only if they are follow-on orders from
existing customers.
This Agreement shall be for a period of five (5) years unless sooner terminated
by mutual agreement of the parties; or, for cause, by either party upon thirty
(30) days' written notice.
Exhibits
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Agent and Representative are independent contractors and nothing contained in
this Agreement shall be deemed or interpreted to constitute the Agent as a
partner or employee of the Principal, nor shall either party have any authority
to bind the other in any respect, it being understood and agreed that all orders
submitted by Agent and Representative are subject to acceptance by Principal in
its sole discretion.
It is agreed between the parties that there are no other agreements or
understandings between them relating to the subject matter of this Agreement.
This Agreement supersedes all prior agreements, oral or written, between the
parties and is intended as a complete and exclusive statement of the agreement
between the parties. No change or modification of this Agreement shall be valid
unless the same be in writing and signed by the parties.
This Agreement shall not be assigned by Agent or Representative without the
prior written consent of Principal. In the event of a change of ownership or
control of Principal, this Agreement and all of its terms and conditions, will
remain in full force and effect.
Agent and Representative shall not divulge to any person, firm or firms,
corporation or corporations, any trade secret having to do with the business of
Principal that shall come to the knowledge of Agent and/or Representative by
reason of this Agreement and the relationship of Principal, Agent, and
Representative created by this Agreement, during the term of this Agreement and
for three (3) years after the termination of this Agreement.
Agent and Representative agree that Principal shall not be liable for: any (i)
losses; (ii) damage, including consequential damages; (iii) detention; (iv)
delay or failure to perform in whole or in part resulting from causes beyond the
control of Principal including but not limited to: acts of God; acts or
omissions of Principal; fires; strikes; insurrections; riots; embargoes; delays
in transportation; inability to obtain supplies; or requirements or regulations
of the United States government or any other civil or military authority. Delays
or non-performance excused by this provision shall not excuse payment of any
amount due hereunder owed at the time of the occurrence.
No waiver of any term, provision or condition of this Agreement, the breach or
default thereof, by conduct or otherwise, in one or more instances shall be
deemed to be either a continuing waiver or a waiver of a subsequent breach or
default of any such term, provision or condition of this Agreement.
All notices required or permitted to be given hereunder shall be in writing and
may be delivered personally or by Certified Mail - Return Receipt Requested,
postage prepaid, addressed to the party's last known address; or by facsimile
transmission.
This Agreement shall be construed in accordance with and governed by the laws of
the State of California.
The Parties will attempt through good faith negotiation to resolve their
disputes. The term "disputes" includes, without limitation, any disagreements
between the Parties concerning the existence, formation, and interpretation of
this Agreement and their obligation thereunder. If the Parties hereto are unable
to resolve their disputes through mediation. If mediation proves unsuccessful,
either Party may commence arbitration by sending a written notice of arbitration
to the other Party. The notice will state the dispute with particularity. As
part of the arbitrator's decision, the arbitrator may allocate the cost of
arbitration, including fees of attorneys and experts, as the arbitrator deems
fair and equitable in light of all relevant circumstances.
If the Parties reasonably believe that the amount in controversy
will be less than One Hundred Fifty Thousand Dollars ($150,000), such
arbitration will be conducted in San Diego, California by an arbitrator selected
by the Parties, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect. In this regard, each Party
shall retain the right to cross-examine the opposing Party's witnesses, either
through legal counsel, expert witnesses, or both. The decision of the
arbitrator(s) shall be final, binding, and conclusive on all Parties (without
any right to appeal therefrom) and shall not be subject to judicial review
(except for abuse of the arbitrator's discretion).
Exhibits
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If the Parties reasonably believe that the amount in controversy will
be One Hundred Fifty Thousand Dollars ($150,000) or greater, then the parties
are not bound to arbitrate the dispute and may commence an action in Superior
Court in San Diego, California, or in U.S. District Court in that jurisdiction.
INTENDING TO BE LEGALLY BOUND, the parties hereto have caused this Agreement to
be executed as of the date first above written.
GREENLAND CORPORATION
BY: Eric W. Gaer, President and CEO
INTERNATIONAL POWER & ENVIRONMENTAL CO
BY: Richard H. Green, President
Ing. Mario Diaz Lugo, Vice President
DELGADO & IBANEZ
BY: Juan Delgado
Exhibits
15
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EXHIBIT 10m
ASSIGNMENT OF OPTION AGREEMENT
This Assignment, dated June 24, 1997, is made by and between Greenland
Corporation ("Greenland"), as assignor, and Eyre Trading Group, Ltd. ("Eyre"),
as assignee.
RECITALS
Whereas Greenland has entered into an option agreement and related
amendments thereto ("Option"), dated December 28, 1995, which is attached hereto
and incorporated herein by this reference as Exhibit A, to acquire, as Optionee,
certain real property situated in Pima County, Arizona and consisting of
approximately 102 acres (the "Property").
Whereas Eyre desires to acquire Greenland's option granting the exclusive
right to purchase, as Optionee, the Property at an agreed upon price and under
specific terms and conditions set forth in such Option.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are acknowledged, the parties agree as follows:
Assignment of Option to Purchase. Subject to the terms and conditions
of this Agreement, and in reliance upon the representations, warranties, and
agreements herein contained, Greenland, as Optionee, shall assign to Eyre all
rights and title to, and interest in, the exclusive Option to purchase the
Property on the terms and conditions set forth in the underlying Option, herein
attached as Exhibit A.
Consideration for Assignment of Option. As consideration for the
assignment of the Option to purchase the Property, Eyre agrees to deliver to
Greenland one million one hundred thousand (1,100,000) shares of its Class B
Convertible Preferred Shares and to assume all remaining obligations of the
Optionee in the underlying Option.
Option Consideration. Greenland represents, and Eyre acknowledges, that
all consideration paid to or for the benefit of Optionors in consideration of
granting the Option shall belong to Optionors and be retained by Optionors in
consideration of granting the Option, whether or not Optionee ultimately
exercises Optionee's right to purchase the Property. Optionors have no duty to
account to Optionee for the consideration paid by Optionee; however, all
consideration paid by Optionee shall be credited to the purchase price of the
Property in the event the Option is exercised.
Purchase Price. Greenland represents, and Eyre acknowledges, that if
the Option is exercised, the purchase price of the underlying Property and the
terms of purchase, as set forth in the Option attached hereto as Exhibit A,
shall generally be as follows:
Optionee shall pay the sum of Forty Thousand Dollars
($40,000.00) cash;
Optionee shall assume or pay in its entirety an existing First
Deed of Trust in favor of J. David Franklin and Susan A. Franklin,
husband and wife, in the amount of Four Hundred Thirty-Five
Thousand Dollars ($435,000.00), plus all accrued and unpaid
interest thereon;
Optionee shall assume all delinquent property taxes owing on
the Property, including any taxes accruing after the date of
Option;
Optionee shall deliver one million two hundred seventy thousand
three hundred fifty-nine (1,270,359) shares of the common stock of
Greenland Corporation to Optionors, to be divided among them in
the ratio of their ownership interest in the Property. Optionee
shall be given credit for any stock issued to Optionors' creditors
prior to the close of escrow.
Portion of Purchase Price Paid by Greenland. Greenland represents and
warrants, and Eyre acknowledges, that Greenland, as Optionee in the underlying
Option, has paid the following, and only the following, consideration to
Optionor with respect to the purchase price noted in Article 4, above, and Eyre
further acknowledges that Eyre shall, in the event Eyre chooses to exercise the
Option, be responsible, as Optionee, for all other and additional obligations of
purchase:
The sum of Thirty-Five Thousand Dollars ($35,000.00) cash. (See
attached Exhibit B).
Exhibits
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One million two hundred seventy thousand three hundred
fifty-nine (1,270,359) shares of the common stock of Greenland
Corporation. (See Attached Exhibit B).
Special Provisions Regarding Eyre Preferred Stock. Greenland
understands and acknowledges that the shares of Eyre Class B Convertible
Preferred Stock it is receiving as consideration for the assignment of the
Option have not and will not be registered under the Securities Act of 1934, as
amended (the "Act"), and are not freely tradable. In addition, Greenland
understands the shares are not convertible into Eyre common shares for a period
of two years after issuance. Therefore, the shares must be held by Greenland
indefinitely unless the shares are sold pursuant to an effective Registration
Statement under the Act, are sold pursuant to an available exemption from
registration requirement of the Act, or are converted to free-trading common
stock after a period of at least two years after issuance.
Greenland's Representations, Warranties, and Indemnification. Greenland
represents to Eyre as follows in sections (a) through (f) below; furthermore,
Greenland agrees to indemnify, defend, and hold Eyre harmless from and against
any losses, costs, damages and expenses (including, without limitation,
attorneys' fees and costs) incurred by Eyre and resulting from any breach by
Greenland of any of Greenland's representations, warranties, and covenants as
set forth in this Agreement.
Organization, etc. Greenland is a corporation duly
organized, validly existing, and in good standing under the
laws of Nevada and has full power and authority to carry on
its business as it iis now being conducted and to own the
properties and assets it now owns.
Authorization, etc. The Company has full power and
authority to enter into this Agreement and to carry out the
transaction contemplated hereby. The Company has taken all
action required by law, its charter, or otherwise to authorize
the execution and delivery of this Agreement and the
transactions contemplated hereby, and this Agreement is a
valid and binding Agreement of the Company enforceable in
accordance with its terms.
No Violation. Neither the execution and delivery of this
Agreement, nor the consummation of the transaction
contemplated hereby, will violate any provision of any
contracts, agreements, or be in conflict with, or constitute a
default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or
cause the accelartion of the maturity of any debt or
obligation pursuant to, or result in the creation or
imposition of any security interest, lien or other encumbrance
upon any property or assets of the corporation under, any
mortgage, bond, indenture, agreement, lease or other
instrument, obligation or commitment to which the corporation
is a party or by which it is subject, or violate any stature
of law or any judgement, decree, order, regulation or rule of
any court or governmental authority.
Consents. No consent of any person is necessary for the
consummation of the transactions contemplated hereby which has
not already been obtained and disclosed, including, without
limitation, consents from parties to loans, contracts, leases,
or other agreements and consents from governmental agencies,
whether federal, state or local. Particularly, the assignment
of the underlying Option requires the approval of the Optionor
of that agreement, evidence of which approval is attached
hereto, and incorporated by reference, as Exhibit C.
Prior Agreements and Payments. Greenland has heretofore
delivered to Eyre, and has attached hereto as Exhibits A and
B, the agreement, and associated amendments thereto, with
respect to the underlying Option granted for the acquisition
of the Property, as well as documentation evidencing any and
all payments, or deliveries, by Greenland to the Optionor, as
consideration for the purchase of the Property.
Indemnification. Notwithstanding the above, Greenland
irrevocably covenants, promises, and agrees to indemnify Eyre
and to hold Eyre harmless from and against any and all losses,
claims, expenses, suits, damages, costs, demands or
liabilities, joint or several, of whatever kind or nature
which Eyre may sustain or to which Eyre may become subject
arising out of or relating in any way to misleading or untrue
statements related to the representations made in this
Agreement including, without limitation, in each case
attorneys' fees, costs and expenses actually incurred in
defending against or enforcing any such losses, claims,
expenses, suits, damages or liabilities.
Exhibits
17
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Eyre's Representations, Warranties, and Indemnification. Eyre
represents to Greenland as follows in sections (a) through (f) below;
furthermore, Eyre agrees to indemnify, defend, and hold Greenland harmless from
and against any losses, costs, damages and expenses (including, without
limitation, attorneys' fees and costs) incurred by Greenland and resulting from
any breach by Eyre of any of Eyre's representations, warranties, and covenants
as set forth in this Agreement.
(a) Organization, etc. Eyre is a corporation duly organized
and validly existing under the laws of the state of Colorado. Eyre has
made all filings and is in good standing in the jurisdictions of its
formation and in each other jurisdiction in which the character of the
property it owns or the nature of the business it transacts makes such
filings necessary or where the failure to make such filings could have
a material adverse effect on the business, operations, assets, or
condition (financial or otherwise) of Eyre.
(b) Authorization, etc. Optionee's execution, delivery, and
performance of this Agreement has been duly authorized by all necessary
corporate action. This Agreement has been duly executed and delivered
by Eyre and constitutes the legal, valid, and binding obligation of
eyre, enforceable in accordance with its terms.
(c) Indemnification. Notwithstanding the above, Eyre
irrevocably covenants, promises, and agrees to indemnify Greenland and
to hold Greenland harmless from and against any and all losses, claims,
expenses, suits, damages, costs, demands or liabilities, joint or
several, of whatever kind or nature which Greenland may sustain or to
which Greenland may become subject arising out of or relating in any
way to misleading or untrue statements related to the representations
made in this Agreement including, without limitation, in each case
attorneys' fees, costs and expenses actually incurred in defending
against or enforcing any such losses, claims, expenses, suits, damages
or liabilities.
No Untrue or Misleading Statements. None of the warranties,
representations, or statements made by any party in this Agreement contain any
untrue statements of material fact, or omit a material fact necessary in order
to make the statements not misleading.
Memorandum of Option. The underlying Option, in the form attached to
this Agreement as Exhibit D, has been recorded in the Official Records of Pima
County, Arizona.
Miscellaneous.
Attorneys' Fees. If any controversy, claim, or dispute arises
between the parties relating to this Agreement, or the breach thereof,
the prevailing party or parties shall be entitled to recover reasonable
attorneys' fees and costs.
Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one and the same instrument.
Captions. The section headings and paragraph captions are
intended solely for the convenience of the parties and not for the
purpose of interpreting this Agreement.
Severability. If any portion of this Agreement is determined
by a court of competent jurisdiction to be invalid or unenforceable,
then such portion shall be deemed to be severed from and shall not
affect the remainder of this Agreement.
Survival. All representations, warranties, covenants, and
indemnities contained in this Agreement shall survive the Closing.
Notices. All notices and demands required or permitted to be
given hereunder shall be in writing and shall be deemed given on the
date of delivery, if personally delivered or delivered by facsimile or,
if expressed, on the next day after depositing it with an overnight
express delivery service, in sufficient time for next day delivery,
charges prepaid and properly addressed as follows:
Greenland Corporation
7084 Miramar Road, Suite 400
San Diego, CA 92121
Exhibits
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Jeffrey A. Nichols, Atty. At Law
Attn: Eyre Trading Group, Ltd.
388 Market Street, Suite 500
San Francisco, CA 94111
Any party may change his or here address for purpose of this
paragraph by giving the other parties notice of the new address in the
manner set forth above.
Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California.
Arbitration, Legal Proceedings and Venue. The Parties will
attempt through good faith negotiation to resolve their disputes. The
term "disputes" includes, without limitation, any disagreements between
the Parties concerning the existence, formation, and interpretation of
this Agreement and their obligation thereunder. If the Parties hereto
are unable to resolve their disputes by negotiation, they shall attempt
to resolve their disputes through mediation. If mediation proves
unsuccessful, either Party may commence arbitration by sending a
written notice of arbitration to the other Party. The notice will state
the dispute with particularity. As part of the arbitrators decision,
the arbitrator may allocate the cost of arbitration, including fees or
attorneys and experts, as the arbitrator deems fair and equitable in
light of all relevant circumstances. The arbitration hearing shall be
commenced thirty (30) days following the date of delivery of notice of
arbitration to the other Party, or as soon thereafter as set by the
arbitrator(s).
If a Party reasonably believes that the amount in controversy
will be less that Twenty-Five Thousand Dollars ($25,000), such
arbitration will be conducted in San Diego, California by an arbitrator
selected by the Parties, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association then in effect. If the
amount in controversy will likely exceed Twenty-Five Thousand Dollars
($25,000), such arbitration shall be conducted by the Judicial
Arbitration and Mediation Services, Inc. ("JAMS") as arbitrator in San
Diego, California in accordance with the rules promulgated by JAMS
(with the widest rights of discovery as provided in the California Code
of Civil Procedure). In this regards, each Party shall retain the right
to cross-examine the opposing Party's witnesses, either through legal
counsel, expert witnesses, or both. The decision of the arbitrator(s)
will be final, binding and conclusive on all Parties (without any right
to appeal therefrom) and shall not be subject to judicial review
(except for abuse of the arbitrator's discretion).
If a Party reasonable believes that the amount in controversy
will exceed One Hundred Thousand Dollars ($100,000), then the Parties
are not bound to arbitrate the dispute and may commence an action in
Superior Court in the County of San Diego, or in U.S. District Court,
Southern District of California.
Binding Effect. This Agreement shall be binding on and inure to
the benefit of the respective heirs, assigns, successors-in-interest,
executors, administrators, and representatives of the Parties.
No Third Party Beneficiary. This Agreement is for the
exclusive benefit of the parties, creates rights and duties only with
respect to the parties, and is not intended to benefit any other person
or entity.
Entire Agreement. This Agreement contains the entire agreement
of the parties and supersedes any and all priot written or oral
agreements between them concerning the subject matter of this
Agreement. There are no representations, agreements, arrangements, or
understandings, oral or written, between the parties, relating to the
subject matter of this Agreement, which are not fully expressed herein.
Waiver. No waiver of any right, remedy, or breach of a duty as
provided herein shall be effective unless it is in writing and is
signed by the waiving party; no such waiver shall constitute a waiver
of any other rights, remedy, or breach; and no delay or failure to
enforce any right or remedy shall preclude or affect the later
enforcement of such right or remedy.
Further Assurances. The parties shall take such actions and
shall execute, have acknowledged (if necessary), and deliver such
documents as may be reasonable or necessary to effectuate the purposes
and intents of this Agreement.
Amendments. No amendment or modification of, deletion from, or
addition to this Agreement shall be effective unless it is in writing
and is executed and delivered by all the parties.
Exhibits
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Authority. Each person executing this Agreement represents and
warrants that he had proper authority to bind the party on whose
behalf he is executing it.
IN WITNESS WHEREOF, the parties hereto have executed this Option
Agreement as of the date first above written.
GREENLAND
BY: Eric W. Gaer, President and CEO
EYRE
BY: Doug Silva, President
Exhibits
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EXHIBIT 10n
COOPERATIVE MARKETING AGREEMENT
AGREEMENT made this 21st day of July, 1997 ("Agreement") by and between StarCom
USA Inc., ("StarCom") located at 4800 S. 188th Street, Suite 130, Seattle, WA
98188, and Greenland Corporation, ("Greenland") a wireless communications
company having its offices at 7084 Miramar Road, San Diego, California 92121
THE PURSPOSE of this Agreement is to establish terms and conditions pursuant to
which both Greenland and StarCom shall perform services for, and provide
benefits to, the other, which are expected to result in increased sales of their
products to third party Customers, including but not necessarily limited to the
Power Authority of Puerto Rico.
WHEREAS, it is the desire and intent of Greenland and StarCom to develop between
them an agreement wherein each company shall provide its unique capabilities to
make available comprehensive, advanced technology in the information gathering
needs of utility companies in the United States.
WHEREAS Grccnland, having developed a patent-pending wireless communication
technology for use in automated meter reading (AMR) called "AirLink(TM)", wishes
to utilize these resources in concert with StarCom to supply the complete
Airlink package to the utility industry.
WHEREAS StarCom has developed unique and proprietary solutions for wireless data
communications network services, in-vehicle unit solutions and generic
mapping/dispatch applications software for global opportunities with market
discriminators in network coverage and cost and StarCom has developed
relationships with utility companies and wishes to utilize these resources in
conceit with Greenland to supply a complete "StarTrack(TM)" and "StarNet(TM)"
package to the utility industry.
THEREFORE, in consideration of the representations, warranties, and covenants,
including in particular, the cooperative marketing and exclusivity covenants,
contained herein, Greenland and StarCom agree as follows:
I. DEFINITIONS
Greenland "Application Systems," hereafter referred to as "AirLink" shall mean
and refer to those computer programs, hardware and documentation related
thereto, developed by Greenland to perform particular tasks, which are listed
and more fully described in Appendix A. Appendix A may, by mutual written
agreement of the parties, be amended from lime to time.
StarCom "Application Systems," hereafter referred to as "StarTrack" and
"StarNet", shall mean and refer to those communications products, technology,
hardware and documentation related thereto, developed by StarCom to perform
particular tasks, which are listed and more fully described in Appendix B.
Appendix B may, by mutual written agreement of the parties, be amended from time
to time.
II. TERM
This Agreement shall become effective on the date first set forth above and
shall remain in effect for five (5) years, unless sooner terminated by the
parties as provided herein. It shall thereafter be automatically renewed for
successive one(1) year terms unless either Party provides written notice of
termination at least sixty (60) days prior to commencement of a net term, unless
sooner terminated by the parties as provided herein.
III. OBLIGATIONS
Each Party shall perform services as follows:
1. Technical Services
(a) System Integration. Each Party shall provide assistance to
ensure the integration of the Application System. When necessary, each Party
shall work to improve the performance of the integrated Application System.
Exhibits
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(b) Documentation. Each Party shall deliver complete documentation
for third party use of their Application Systems.
2. Names and Trademarks. Each Party hereby consents to the use by the other of
its corporate name, the names of the Application System, and all of its
trademarks and other proprietary names in order to enable each Party to fulfill
its obligations under, and receive the benefits of this Agreement.
3. Sales Assistance. Based upon mutual agreement, each Party will assist the
other by performing appropriate tasks including, but not limited to, the
following:
informing prospective Customers that the StarTrack" and "StarNet" Systems
are interoperable with the AirLink System and vice versa;
(b) developing and supplying marketing and promotional material for
the AirLink/StarTrack/StarNet System which describes their availability and
performance;
(c) supplying technical documentation on all versions of each
Application System and other technical support, including consulting, as
mutually agreed to by Greenland and StarCom;
(d) developing and supplying, specifically for use by each Party's
sales organization, a guide to the AirLink/StarCom Systems which describes their
features and benefits;
(e) providing technical support of appropriate quality to enable
both parties to demonstrate the AirLink/StarTrack/StarNet System at such trade
shows and Greenland 's seminar series as shall be selected by mutual agreement
of StarCom and Greenland;
(f) both shall provide a complete unit of each product at no charge
for promotional purposes;
(g) providing copies of current published price lists and sales and
license agreements applicable to each AirLink/StarTrack/StarNet System.
4. Sales Coordination. It is the intent of both parties to jointly
market a particular Customer, however, in order to insure that a coordinated
sales effort occurs between the Parties, it is understood and agreed that the
company that creates the initial Customer contact will have primary
responsibility for all communications with that Customer. A list of current
customers will be provided in Attachment 1. This includes all verbal and written
communication. Any communication that occurs where the primary company is
bypassed will be immediately copied or otherwise transmitted via memorandum to
the primary company. Subject to mutual agreement and with the intent to best
service the Customer, responsibility for primary contact may transfer to the
other Party.
The Parties agree that they will not compete independently with respect to the
Customers identified in Exhibit C or any other party for the work identified in
this Agreement. The Parties additionally agree not to disclose technical data
with competitors with respect to the work identified in this Agreement.
The Parties understand and agree that in order to best serve the Customer,
situations may arise where the systems are sold separately or implementation
and/or add-ons occur over a period of time. The Parties agree to work together
in a coordinated manner that is in the best interest of the Customer. The
Parties will make a "best-effort" to promote the sales of the other party's
system, and to allow the other Party to make their own sales presentation.
However, the Parties recognize that due to existing Customer radio, computer,
and/or software systems, sale of one of the Party's system may not occur and
consequently the selling Party's system may have to be integrated with a
competitor's product.
5. Customer Support. For so long as this Agreement is in effect, and for one (1)
year following its termination (for any reason whatsoever), both Parties shall
offer to the Customers, at commercially reasonable prices, a complete support
and maintenance program for the StarCom Systems interoperable with Greenland
systems, including, but not limited to:
Exhibits
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(a) installation/integration
(b) timely problem reports
(c) problem fixes
V. RELATIONSHIP OF THE PARTIES
Greenland and StarCom are each independent contractors. Each Party shall be
solely responsible for determining its manner of performance of its obligations
under this Agreement. Neither Party shall be, nor represent itself to be, the
franchiser, franchisee, partner, broker, employee, servant, agent, or legal
representative of the other Party for any purpose whatsoever. Neither Party is
granted any right or authority to assume or create any obligations or
responsibility, express or implied, on behalf of or in the name of the other
Party or to bind the other Party in any matter or thing whatsoever, including
but not limited to, the right or authority to obligate the other Party to accept
or deliver any order, or to sell or refuse to sell to any third party. Neither
Party shall be entitled to share any sales and/or licensing revenues received by
the other.
1. The parties agree to co-market for dispatch, service provider management,
billing, and other functions to be conducted while doing business with those
Customers identified in Exhibit C that have a requirement for AMR. Thc initial
target industries electric and water utilities. Specific target companies are
identified in Appendix C and may be changed from time to time. This agreement
shall apply to government, commercial and foreign business entities without
geographical or territorial restriction that are mutually speed to and listed in
Exhibit C.
2. The parties agree that they will not compete independently with respect to
the Customers identified in Exhibit C or any other party for the work identified
in this Agreement. The parties additionally agree not to disclose technical data
with competitors with respect to the work identified in this Agreement.
3. Neither Party shall issue a news release, public announcement, advertisement,
or any other form of publicity concerning his efforts in connection with this
Agreement without obtaining prior written approval from the other Party. In the
event such approval is granted, any resulting form of publicity shall give full
consideration to the role and contributions of the other Party.
4. StarCom shall indemnify and hold Greenland harmless from all third party
claims, liabilities, and losses, including reasonable attorneys' fees, whether
or not suit is brought or liability is established, resulting from: (i) any acts
or omissions of StarCom; (ii) any use, performance, or non-performance of any of
the StarCom Systems; or, (iii) any use of any results obtained from the use of
the StarCom Systems.
5. Greenland shall indemnify and hold StarCom harmless from all third party
claims, liabilities, and losses, including reasonable attorneys' fees, whether
or not suit is brought or liability is established, resulting from: (i) any acts
or omissions of Greenland; (ii) any use, performance, or non-performance of any
of the AirLink Systems: or, (iii) any use of any results obtained from the use
of the AirLink Systems.
6. All orders for each Party's Application Systems shall be subject to
acceptance in writing by an authorized employee of the other Party, in
accordance with its standard business practices.
7. Nothing in this Agreement is intended to make any party a third party
beneficiary hereof. Any obligation assumed by either Greenland or StarCom, as a
result of this Agreement, to provide or make available any product or service to
any Customer or other party is assumed strictly for the purpose of enabling
StarCom and/or Greenland to increase sales, and any resulting benefit to that
Customer or other party is entirely incidental.
8. Greenland acknowledges that StarCom has existing agreements with entities in
Europe, MBCE and its affiliates, for European wireless data utilizing meteor
burst and ELOS technologies, and Greenland agrees not to circumvent StarCom for
business transactions with MBCE entities during the term of this agreement.
Exhibits
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VI. REPRESENTATIONS AND WARRANTIES
1. StarCom hereby represents and warrants that:
(a) StarCom is the sole franchisee for StarTrack and StarNet in the
United States of America, free from all claims of third parties;
(b) each StarCom System shall not infringe any patent, trade secret,
copyright or other proprietary right of any person or entity during the term of
(his Agreement. StarCom agrees to defend, at its sole expense, any claim or suit
brought against Greenland or any Customer (but only in the event Greenland is
obligated to defend such Customer against such suit) based on a claim of
infringement of a patent, copyright, trade secret or other proprietary right.
StarCom shall pay resulting costs, damages, and attorney's fees provided
Greenland promptly notifies it of the claim or suit;
(c) it shall not make any representation to third patties concerning
Greenland, the AirLink Application Systems, or Greenland 's other products,
except through the distribution of then current information published by
Greenland; and,
(d) it shall fulfill all of its obligations to the Customers.
2. Greenland hereby represents and warrants that:
(a) Greenland is the owner of each AirLink System it offers for
sale, free from all claims of third parties,
(b) each AirLink System shall not infringe any patent, trade secret,
copyright or other proprietary right of any person or entity during the term of
(his Agreement. Greenland agrees to defend, at its sole expense, any claim or
suit brought against StarCom or any Customer (but only in the event StarCom is
obligated to defend such Customer against such suit) based on a claim of
infringement of a patent, copyright, trade secret or other proprietary right.
Greenland shall pay resulting costs, damages, and attorney's fees provided
StarCom promptly notifies it of the claim or suit;
(c) it shall not make any representation to third parties concerning
StarCom, the StarCom Systems, or StarCom's other products, except through the
distribution of then current information published by StarCom; and,
(d) it shall fulfill all of its obligations to the Customers.
Each Party represents and warrants that it is authorized to enter into this
Agreement and that none of the provisions of this Agreement are in conflict with
any other agreement to which it is a party.
VII. CONFIDENTIALITY
Each Party shall keep confidential and not disclose to third parties or use in
performing work for third parties or itself any design, processes, drawings,
specifications, reports, data and other technical, commercial and financial
information and the features of any hardware, paints, equipment, licensed
software, training programs and other items furnished or disclosed by the other
Party under or in connection with the Agreement; provided however, that nothing
in the Agreement or in this Article VII shall preclude each Party from selling,
leasing or furnishing to third parties hardware, licensed software, services,
training or other goads and services for performing similar processes and
functions as those contemplated by this Agreement
VIII. LIMITATATION OF LIABILITY
In no event shall either Party be liable for: (i) any damages resulting from the
other's failure to perform its responsibilities under this agreement; or, (ii)
any incidental, indirect, special, or consequential damages whatsoever,
including, but not limited to lost profits, even if the other Party has been
advised, knew, or should have known, of the possibility of such damages.
Exhibits
24
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TERMINATION
Each Party shall have the right to terminate this Agreement immediately: (i) if
the other Party fails to perform or observe any of its obligations under this
Agreement provided such breach, if curable, is not cured within twenty (20) days
after written notice thereof; (ii) if any representation of the other Party
shall prove to be false; or, (iii) if the other Party breaches any of its
warranties, or based upon 15 days notice by one Party to the other for any
reason whatsoever, however the terms and conditions outlined herein shall remain
in effect for one (1) year concerning the customers listed in Exhibit C.
X. MISCELLANEOUS
Greenland and StarCom shall each hear the costs of all labor, travel, per diem,
materials and other expenses incurred by its respective employees in the
execution of the terms of this Agreement unless otherwise specified herein.
Notice under this Agreement shall be in inviting and shall be delivered or
addressed as follows:
If to StarCom:
Mr. Randal Ownbey
StarCom USA Inc.
4800 S. 188th Street, Suite 130
Sea(lie, 1VA 98188
(206) 431-3058 (fax)
If to Greenland:
Mr. Eric Gaer
Greenland Corporation
7084 Miramar Road
San Diego, CA 92121
Each such notice shall bc effective upon initial receipt by the addressee.
StarCom and Greenland shall, at each one's own expense, meet quarterly,
alternately at the locations stated in this Section X. These meetings may
include the development of mutual marketing strategies and review of each
Party's performance under this Agreement.
XI. ASSIGNMENT
Neither Party may assign this Contract in whole nor in part without the prior
written consent of the other Party. Any attempted assignment absent such consent
shall be void. In the event either Party is sold, merged or divested in any
other manner, each Party hereby guarantees that the Contract will be assigned in
whole to the newly-formed or acquiring entity and that all provisions of this
Contract will bc upheld and satisfied.
XII. ENFORCEABILITY
1. No action, regardless of form, arising out of this Agreement may be brought
by either Party more than two years after the cause of action has arisen.
2. Neither Party shall be responsible for failure to fulfill its obligations
under this Agreement due to causes beyond its control.
3. Failure of either Party to insist in any instance upon strict performance by
the other Party of any provisions of this Agreement shall not be construed of
deemed to be a permanent waiver of such or any other provision of this
Agreement.
Exhibits
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4. If any provision or provisions of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
5. This Agreement shall be governed by, and construed in accordance with, the
laws of tho Sale of California.
6. JURISDICTION - The court and authorities of the State of California or the
federal district court having venue for the State of California shall have
jurisdiction over all controversies that may arise with respect to this
Agreement, the parties hereby waiving any other venue to which they might be
entitled by virtue of domicile or otherwise. Should either party initiate or
bring a suit or action before any other courts, it is agreed that upon
application any such suit or action shall bc dismissed, without prejudice, and
may be filed in accordance with this provision. The party bringing the suit or
action before a court not agreed to herein shall pay to the other party all the
costs of seeking dismissal including reasonable attorney's fees.
7. ARBITRATION - The Parties will attempt through good faith negotiation to
resolve their disputes. The tern "disputes" includes, without limitation, any
disagreements between the Parties concerning the existence, formation, and
integration of this Agreement and their obligation thereunder. If the Parties
hereto are unable to resolve their disputes through mediation. If mediation
proves unsuccessful, either Party may commence arbitration by sending a written
notice of arbitration to the other Party. The notice will state the dispute with
particularity. As part of the arbitrator's decision, the arbitrator may allocate
the cost of arbitration, including fees of attorneys and experts, as the
arbitrator deems fair and equitable in light of all relevant circumstances.
If the Parties reasonably believe that the amount in controversy will be less
than One Hundred Thousand Dollars ($100,000), such arbitration will be conducted
in San Diego, California by an arbitrator selected by the Parties, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
then in effect. In this regard, each Party shall retain the right to
cross-examine the opposing Party's witnesses, either through legal counsel,
expert witnesses, or both. The decision of the arbitrator(s) shall be final,
binding, and conclusive on all Parties (without any right to appeal therefrom)
and shall be subject to judicial review (except for abuse of the arbitrator's
discretion).
If the Parties reasonably believe that the amount in controversy will be One
hundred Thousand Dollars ($100,000) or greater, then the parties are not bound
to arbitrate the dispute and may commence an action in Superior court in San
Diego, California or in U.S. District Court in that jurisdiction.
This Agreement is the complete and exclusive statement of the agreement between
StarCom and Greenland relating to its subject matter, and supcrsedes all
proposals or prior agreements, oral and written, and all other communications
between StarCom and Greenland, relating thereto.
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly
executed the day and year first written above.
GREENLAND CORPORATION
By: Eric Gaer, President
STARCOM USA, I.LC
By: R. Randal Ownbey, President
APPENDIX A
COOPERATIVE MARKETING AGREEMENT
GREENLAND AirLink(TM) SYSTEM
Exhibits
26
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APPENDIX B
COOPERATIVE MARKETING AGREEMENT
StarCom System
The StarCom Technologies Application System which is the subject of this
Agreement is hereafter called StarTrack(TM) Starlet(TM). StarNet consists of the
end-to-end wireless data communications network, while StarTrack is StarCom's
data communications unit. This system comprises operational 40 MHz trunked radio
communication systems in major cities throughout the U.S. and a direct-marketing
program to place radio units in service au said systems.
APPENDIX C
CUSTO'MER TARGET LIST
CUSTOMER PRIMARY CONTACT
Power Authority, Puerto Rico Fernando Co1on
ATTACHMENT 1
CURRENT CUSTOMER LIST
(To Be Supplied)
Exhibits
27
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EXHIBIT 10o
COUNTERPART TO DISTRIBUTION AGREEMENT
This Counterpart to Distribution Agreement ("Counterpart"), dated December 5,
1997, is a counterpart to, and a continuation of, the Distribution Agreement
("Agreement") entered into effective May 1, 1998, by and between Greenland
Corporation of 7084 Miramar Road, Suite 400, San Diego, CA 92121; a corporation
duly formed under the laws of the state of Nevada, U.S.A., ("Greenland") and KIT
Concerns of Av. Afranio de Melo Franco, 74 S. 101 Leblon, Rio de Janiero, RJ
22430-060, Brasil; an organization duly formed under the laws of Brasil,
("KIT").
RECITALS
WHEREAS, KIT has fulfilled its duties and obligations to Greenland under
sections 3 and 4 of the Agreement;
WHEREAS, KIT has identified Centro de Pesquisas de Energia Eletrica
("CEPEL") as a qualified partner for the adaptation and development of
Greenland's AirLink automated meter reading technologies ("Technology") in
Brasil, as allowed for under section 9 of the Agreement;
WHEREAS, CEPEL is qualified to act as a partner in the adaptation and
development of the Technology in Brasil and desires to act in that capacity; and
WHEREAS, Greenland acknowledges and approves of CEPEL acting as a
partner in the adaptation and development of the Technology in Brasil.
AGREEMENT
NOW THEREFORE, in consideration of the covenants and mutual promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
CEPEL, as a technology partner, shall be bound by the terms of the
Agreement as those terms shall apply to KIT, and as the same may be modified by
the terms of this Counterpart.
CEPEL shall provide engineering support to Greenland for the
development and adaptation of Greenland's Technology to the Brasilian and South
American markets. Rights to any such developments and adaptations of the
Technology will inure to the exclusive benefit of Greenland and shall be subject
to the exclusive distribution rights held hereunder by KIT and CEPEL. Ownership
of the intellectual property rights to technologies that may be so developed,
but that are not attributable to Greenland's Technology, shall be discussed
between the parties prior to such development and the parties agree to, at such
time, use their best efforts to come to a separate agreement on the sharing of
such rights.
Greenland, in addition to its duties under the Agreement, shall make
its Technology available to CEPEL and assist CEPEL, to the extent it is
practicable, with research and development in adapting the Technology to the
Brasilian and South American markets.
KIT, in addition to its duties under the Agreement, shall assist in
developing financial models for customer sales of the Technology and shall
assist CEPEL in the marketing of the Technology.
CEPEL shall, as soon as practicable after the signing hereof, send
an engineer to visit the Greenland offices for an exchange of technical
information and hand-on training with the
Exhibits
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Technology. CEPEL shall cause said engineer to deliver ten (10) units of the
AirLink devices to Brasil for CEPEL's internal validation testing.
Upon satisfactory internal validation testing of the Technology,
CEPEL and KIT shall use their best efforts to arrange for a "pilot" program of
testing with either a Brasilian utility company or via a government grant.
Until such time as more detailed, or other, agreements may be made
between the parties, initial Technology products will be exported by Greenland
to Brasilian customers at costs to be mutually agreed between the parties. Such
pricing shall be developed based upon actual and anticipated expenses of the
parties. Revenues from sales of such products and associated services will first
be reduced by a reimbursement to each party of direct costs incurred by each
party, respectively, plus fifteen percent (15%). The balance of revenues shall
be divided equally among the parties to this Counterpart. This paragraph is
applicable for applications of the Greenland AirLink Technology in so far as
automated meter reading is concerned. For other applications of the Technology,
a separate agreement shall be reached between the parties.
Greenland shall allow for the marketing of the Technology products
under the Agreement to be made under a joint lable with CEPEL (i.e.
CEPEL/AirLink).
The terms of this Counterpart shall remain in effect for two (2)
years and thereafter be renewable for consecutive, renewable two year terms for
so long as the parties hereto, or their respective successors, assigns, parties
in interest, and/or affiliates maintain commercially viable operations involving
the Technology and/or associated developments thereof, or until such time as
termination shall occur under the Agreement. In the event of termination, the
parties shall be bound by the terms of the Agreement which cover such event.
The parties to this contract, and each of them, maintain their
independence from the other and no party hereto is designated as an agent of,
nor hired as an employee of, another. No party has the authority to bind another
or to make commitments on behalf of another, and none shall represent itself as
an agent of the other, or in any capacity other than as an independent entity.
A signature received pursuant to a facsimile transmission shall be
sufficient to bind a party to this Counterpart.
IN WITNESS WHEREOF, the parties have cause this Counterpart to be executed and
delivered, by thei duly authorized officers, effective as of the day and year
first written above.
GREENLAND
By: Eric W. Gaer, President and CEO
KIT
Paulo E. Klabin, Managing Director
CEPEL
Reynaldo Sigiliao da Costa, Coordenador de Programa de Sistemas de Distribuicao
Exhibits
29
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EXHIBIT 10p
AGREEMENT OF EXCHANGE
This Agreement is made effective December 31, 1997, at San Diego,
California, by and between Golden Age Homes, Inc., a Nevada Corporation,
hereinafter called "Golden Age", Greenland Corporation, a Delaware Corporation,
hereinafter called "Shareholder", and GAM Properties, Inc., a California
corporation, hereinafter called the "Corporation".
WHEREAS, the Shareholder has represented that it owns all of the
outstanding stock of the Corporation, and
WHEREAS Golden Age desires to acquire from Shareholder and Shareholder
desires to exchange stock with Golden Age, one hundred percent (100%) of the
outstanding stock of the Corporation ("the Shares"), and
WHEREAS the Corporation desires that this transaction be consummated.
NOW, THEREFORE, in consideration of the mutual covenants, promises,
conditions, agreements, representations and warranties contained in this
Agreement, setting aside all previous agreements both oral and written the
parties agree as follows:
1. PURCHASE AND SALE OF SHARES
1.1. Subject to the terms and conditions set forth in this
Agreement, on the closing, Shareholder will transfer and convey to Golden Age
20,000 shares of common stock in the Corporation, which represents 100% of the
issued and outstanding shares of stock in the Corporation.
1.2. As consideration for the transfer of the shares by Shareholder,
Golden Age shall deliver at the closing, ten thousand dollars ($10,000.00) in
the form of a ninety (90) day promissory note and certificates representing
290,000 shares of Golden Age's Class A convertible preferred stock valued at
five dollars ($5.00) per share ($.001 par value), hereinafter referred to as the
"Preferred Stock".
1.3. The 290,000 shares of Preferred Stock shall be issued to
Greenland Corporation.
1.4. Conversion of the 290,000 shares of Preferred Stock held by
Shareholder will be convertible on or after the two (2) year anniversary from
the date of issuance at a value equal to five dollars ($5.00), the face value of
the Preferred Stock, or convertible into common stock based on an exercise price
equal to the average of the previous five (5) days' bid price at the date of
conversion.
1.5. Golden Age is to guarantee that there are sufficient shares of
its common stock available to effect the conversion of the Preferred stock.
2. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
2.1. The Shareholder represents and warrants that the Shareholder is
owner, beneficially and of record, of all the shares free and clear of liens,
encumbrances, security agreements, equities, options, claims, charges, and
restrictions, other than any restriction set forth by the California
Commissioner of Corporations. Shareholder will assure full power to transfer the
shares to Golden Age by obtaining the consent or approval of its Shareholders.
2.2. The Shareholder and the Corporation, to the best or their
knowledge, represent and warrant as follows:
Corporation is a corporation duly organized
validly existing, and in good standing under the laws
of California and has all necessary corporate powers
to own its properties and to operate its business as
now owned and operated by it.
The authorized capital stock of the Corporation
consists of twenty thousand (20,000) shares of common
stock, having par value of one dollar ($1.00), of
which 20,000 shares (the shares) are issued and
outstanding. All the shares are validly issued, fully
paid, and non-assessable, and such shares have been
so issued in full compliance with all federal and
state securities laws. There are no outstanding
subscriptions, options, rights, warrants, convertible
securities, or other agreement or commitments
obligating the Corporation to issue or to transfer
from treasury any additional shares of its capital
stock or any class.
Exhibits
30
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That there is no suit, action, arbitration, or
legal administrative, or other proceeding, to the
best knowledge of Corporation; against or effecting
corporation or any other business, assets, or
financial condition other than those specifically
disclosed by Corporation.
The financial statements in the public filing
documents (Forms 10K and 10Q) of Shareholder,
including the financial condition of the Corporation,
have been prepared in accordance with generally
accepted accounting principles consistently followed
by the Shareholder and the Corporation as of the
respective dates of said financial statements, and
the results of its operation for the respective
periods indicated.
That there has not been since the date of the
financial statements provided any material change in
the financial condition, liabilities, assets,
business or prospects of the Corporation other than
those specifically disclosed.
Since December 31, 1994, that within the times
and in the manner prescribed by law, the Corporation
has filed all federal, state, and local tax returns
required by law and has paid all taxes, assessment,
and penalties due and payable. There are not present
disputes as to taxes of any nature payable by the
Corporation.
The execution and delivery of this Agreement by
the Corporation, and the performance of its covenants
and obligations under it, shall have been duly
authorized by all necessary corporate action, and
Golden Age shall have received copies of all
resolutions pertaining to that authorization,
certified by the secretary of the Corporation.
h. The Shareholder is acquiring the stock of
Golden Age as an investment, and no with a view to
distribution, and each hereby consents that the shares of
Golden Age may be legended to the effect that such shares are
not registered under the Securities act of 1933.
i. The Corporation has given no options or other
rights to purchase or subscribe for any shares of stock of the
Corporation in favor of any person, firm or corporation.
Stockholders do not have preemptive rights.
The Corporation has no assets or business other
than those shown in the financial statements provided.
The Corporation is not party to any employment
agreements.
2.3. Golden Age represents and warrants as follows:
Golden Age is a corporation duly organized,
validly existing and in good standing under the laws of Nevada
and has all necessary corporate powers to own its properties
and to operate its business as now owned and operated by it;
and neither the ownership of its properties nor the nature of
its business requires Golden Age to be qualified in any
jurisdiction other than the state of its incorporation.
The authorized capital stock of Golden Age
consists of 50,000,000 shares of common stock, having a par
value of $0.001 each, of which not more than 5,000,000 are
issued and outstanding. All the shares are validly issued,
fully paid, and nonassessable, and such shares have been so
issued fully in compliance with all federal and state
securities laws.
The financial statements provided pursuant to this
Agreement have been prepared in accordance with generally
accepted accounting principles consistently followed by Golden
Age throughout the periods indicated and fairly present the
financial position of Golden Age as of the respective dates of
said financial statements, and the results of its operations
for the respective periods indicated.
That there has not been since the date of the
attached financial statements any material change in the
financial condition, liabilities, assets, business or
prospects of Golden Age.
That Golden Age does not have any debt, liability,
or obligation of any nature, whether accrued, absolute,
contingent, or otherwise, and whether due or to become due,
that is not reflected in the financial statements or otherwise
disclosed to this Agreement, and that all debts, liabilities,
Exhibits
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<PAGE>
and obligations incurred after that date were incurred in the
ordinary course of business, and are usual and normal in
amount both individually and in the Agreement.
f. That within the times and in the manner
prescribed by law, Golden Age has filed all federal, state,
and local tax returns required by law and has paid all taxes,
assessments, and penalties which in Golden Age's opinion are
due and payable and has made all filings required by all
applicable state and federal laws.
g. That Golden Age has good and marketable title
to all of its respective assets and interests in assets,
whether real, personal, mixed, tangible and intangible, which
constitute all the assets and interest in assets that are used
in the business of Golden Age.
The execution and delivery of this Agreement by
Golden Age and the performance of its covenants and
obligations under it, shall have been duly authorized
by all necessary corporation action, and its
shareholders have received copies of all resolutions
pertaining to that authorization, certified by the
secretary of Golden Age.
i. That they have had an opportunity to review the
financial statements pursuant to this Agreement and based on
such financial statements they have entered into this
Agreement.
j. That there has been given to the Shareholder an
opportunity to review all of Golden Age's filings with the
Securities and Exchange Commission.
3. DOCUMENTATION, DELIVERY AND COOPERATION
3.1. The Corporation will furnish to Golden Age for its examination
(i) copies of the Articles of Incorporation and by-laws of the Corporation; (ii)
the minute books of the Corporation containing all records required to be set
forth in all proceedings, consents, actions, and meetings of the shareholders
and the Board of Directors of the Corporation; (iii) all permits, orders, and
consents issued with respect to corporation, or any security, and all
applications for such permits, orders, and consents; and (iv) the stock transfer
books of the Corporation setting forth all transfers of any capital stock.
3.2. At the closing, the Shareholder shall deliver to Golden Age the
following instruments, in form and substance satisfactory to Golden Age and its
counsel:
a. A certificate or certificates representing the
shares of the Corporation, registered in the name of Golden
Age.
3.3. At the closing, Golden Age shall deliver to Shareholder the
following instruments and documents:
a. The share certificates as set forth in
paragraph 1.3.
3.4. All of the parties further agree that they will do all things
necessary and reasonable to accomplish and facilitate the transfer of the shares
in conformance with any and all governmental bodies and regulatory agencies, and
that they will sign and execute any and all documents necessary to bring about
and perfect the purposes of the Agreement.
4. OBLIGATIONS OF PARTIES
4.1. The obligations of the Shareholder hereunder are, at the option
of the Shareholder, subject to the conditions that on or before the closing:
a. The Shareholder shall not have discovered any
material error, or misstatement or omission in the
representations, and warranties made by Golden Age herein, and
all the terms and conditions of this Agreement to be complied
with and performed by Golden Age at or before the Closing
shall have been complied with and performed in all material
respects.
b. The representations and warranties made by
Golden Age in this Agreement shall be correct in all material
respects at and as of the Closing.
c. The Commissioner of Corporations of the State
of California has issued, if necessary, the appropriate permit
or permits pursuant to the California Corporations Code the
qualification of the securities which are the subject of this
Agreement.
4.2. The obligations of Golden Age hereunder are, at the option of
Golden Age, subject to the conditions that on or before the Closing:
Exhibits
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a. Golden Age shall not have discovered any
material error, misstatement or omission in the
representations and warranties made by the Shareholder of the
Corporation, and all the terms and conditions of this
Agreement to be complied with and performed by the Shareholder
and the Corporation on or before the Closing shall have been
complied with and performed in all material respects.
b. The representations and warranties made by the
Shareholder and the Corporation in this Agreement shall be
correct in all material respects at and as of the Closing.
c. The Commissioner of Corporations of the State
of California has, if necessary, issued the appropriate permit
or permits pursuant to the California Corporations Code for
the qualification of the securities which are the subject of
this Agreement.
4.3. The Closing under this Agreement shall take place at the
offices of Shareholder, San Diego, California, or at such place, time or date,
as may be agreed upon by the parties.
This Agreement may be signed in one or more counterparts.
GOLDEN AGE HOMES, INC.
BY: Todd Smith, President
GAM PROPERTIES, INC.
BY: Michael H. deDomenico, President
GREENLAND CORPORATION
BY: Eric W. Gaer, President and CEO
Exhibits
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EXHIBIT 10q
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is made as of the 2nd of
April, 1998 between Greenland Corporation, a Nevada Corporation, whose principal
offices are located at 7084 Miramar Road, San Diego, CA 92121 ("Greenland"), and
Symmetry Device Research, Inc., a Nevada Corporation, whose principal offices
are located at 10329 MacArthur Blvd., Oakland, CA 94605 ("Symmetry").
WHEREAS, Greenland is a developer and provider of wireless digital
technology and products related to automated meter reading that it markets under
its AirLink(TM) trademark; and
WHEREAS, Greenland is interested in selling AirLink to utilities and
related businesses subject to the specifications, terms and conditions that may
be required for each customer; and
WHEREAS, Symmetry is a licensed power marketer, broker, and aggregator;
and has applied for certification with the California Public Utilities
Commission ("CPUC") as a Meter Service Provider ("MSP") and Meter Data
Management Agent ("MCMA"); and
WHEREAS, Greenland recognizes Symmetry as a qualified customer for
AirLink, and Symmetry desires to purchase and install AirLink for its utility
and industrial customers.
The parties HEREBY MUTUALLY AGREE as follows:
To cooperate with each other in providing AirLink technology and
products to Symmetry customers, subject to terms and conditions
mutually agreed to for each contemplated transaction.
To cooperate in serving the City of Richmond, a customer of
Symmetry, in the development and delivery of automated meter
reading services using AirLink. Under this arrangement,
Symmetry will be the direct customer of Greenland and be
authorized to represent AirLink products as a reseller of such
products to the City of Richmond.
Symmetry will hire, if and when business demands, the necessary
technicians to provide AirLink installations and ongoing
technical support for customer installations.
Symmetry will adopt and abide by the pricing, customer service,
technical support, and other quality standards and policies
utilized by Greenland, as the same by be modified by the
parties for distribution and sale of AirLink.
Symmetry acknowledges and agrees that Greenland is the sole and
exclusive owner of all rights, title, interest in and to the
intellectual property associated with AirLink products and
associate technology, including, but not limited to, all
patents, trademarks, tradenames, and associated copyright, and
nothing in this MOU shall be construed as an assignment to
Symmetry of any right, title, or interest in such intellectual
property. Symmetry further agrees to not take any actions that
would constitute a voluntary and knowing violation of such
intellectual property rights.
Symmetry recognized and acknowledges the value of the goodwill associated with
Greenland's AirLink products and associated technology, and/or the associated
trademarks, tradenames, and copyrights, and further acknowledges that all right
therein and the goodwill pertaining thereto belong exclusively to Greenland.
Symmetry acknowledges and agrees that any and all goodwill generated by its sale
of AirLink shall inure to the benefit of Greenland and that Symmetry shall not,
at any time, acquire any rights in the goodwill of the AirLink products and/or
the associated trademarks, tradenames, and copyrights.
Symmetry shall not use Greenland's name and/or AirLink trademarks,
tradenames, and/or copyrights other than as permitted by
Greenland.
The parties to this MOU, and each of them, maintain their
independence from the other and neither party hereto is
designated as an agent of, nor hired as an employee of, the
other. Neither party has the authority to bind the other or to
make commitments on behalf of the other, and neither shall
represent itself as an agent of the other, or in any capacity
other than as an independent entity.
Exhibits
34
<PAGE>
A signature received pursuant to a facsimile transmission shall be
sufficient to bind a party to this MOU.
IN WITNESS WHEREOF, the parties have caused this Memorandum of Understanding to
be executed and delivered by their duly authorized officers, effective as of the
day and year first written above.
GREENLAND
By. Eric W. Gaer, President and CEO
SYMMETRY
By: Darwin E. Richards, President
Exhibits
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EXHIBIT 10r
AGREEMENT OF EXCHANGE
This Agreement is made effective April 6, 1998, at San Diego, California, by and
between Quantix, a Nevada Corporation, hereinafter called "Quantix", and
Greenland Corporation, a Nevada Corporation, hereinafter called "Greenland".
WHEREAS, Quantix owns property consisting of approximately 10 acres on
Pasadena Avenue, Lake Elsinore, California, as more completely described in
Exhibit A attached hereto, hereinafter called the "Elsinore Property", and
WHEREAS, Quantix owns a second trust deed in the amount of $258,000
against 10 acres of industrial property valued at $760,000 located in Moreno
Valley/Riverside, California (subject to a first trust deed of $42,000), as more
completely described in Exhibit B attached hereto, hereinafter called the
"Riverside Property", and
WHEREAS, Quantix owns a second trust deed in the amount of $115,000
against 4.27 acres of land in Perris, California valued at $375,000 (subject to
a first trust deed of $25,000), as more completely described in Exhibit C
attached hereto, hereinafter called the "Perris Property."
WHEREAS Greenland desires to exchange with Quantix and Quantix desires
to exchange the subject properties and a promissory note to Greenland for the
securities Greenland owns in Natural Born Carvers, Inc., hereinafter called
"NBC"; and
WHEREAS both Greenland and Quantix desire that this transaction be
consummated as soon as possible.
NOW, THEREFORE, in consideration of the mutual covenants, promises,
conditions, agreements, representations and warranties contained in this
Agreement, setting aside all previous agreements both oral and written the
parties agree as follows:
1. EXCHANGE OF SHARES
1.1. Transfer. Subject to the terms and conditions set forth in this Agreement,
on the Exchange Date, Quantix will transfer and convey to Greenland the Elsinore
Property, the second trust deeds on the Riverside Property and the Perris
Property, hereinafter referred to as the "Properties," and a Promissory Note in
the amount of $1,527,000, a copy of which is attached to this Agreement as
Exhibit D. The Properties include the real property described in Exhibits A, B,
and C to this Agreement, subject to any indebtedness on the property.
1.2. Consideration. As consideration for the transfer of the Properties and the
execution of the Promissory Note by Quantix, Greenland shall deliver, on the
Exchange Date, payment consisting of its 1,100,000 shares of Natural Born
Carvers Convertible Class B Preferred Stock, hereinafter called the "NBC
Preferred Stock". Quantix is acquiring these securities as an investment, and
not with a view to distribution. Quantix hereby consents that, upon conversion,
the underlying common shares may be legended to the effect that such shares are
not registered under the Securities act of 1933, as amended.
1.2.1. The NBC Preferred Stock shall be issued by NBC, pursuant to instructions
provided by Greenland, to Quantix or its assignee(s). The NBC Preferred Stock is
convertible into NBC common stock in March 1999 at a value equal to two dollars
and sixty cents ($2.60), the face value of the NBC Preferred Stock; or
convertible into NBC common stock based on an exercise price equal to the
average of the previous five (5) days' bid price at the
Exhibits
36
<PAGE>
date of conversion. NBC has guaranteed Greenland that there are and will be, at
the date of conversion, sufficient shares of its common stock available to
effect the conversion of the NBC Preferred stock. One certificate representing
240,000 shares of NBC Preferred Stock shall be issued to Quantix.
1.2.2. One certificate representing 110,000 shares of NBC Preferred Stock shall
be issued to U.S. Holdings, LP, a California Partnership.
1.2.3. One certificate representing 750,000 shares of NBC Preferred Stock shall
be issued to Quantix, but held as security for the $1,527,000 Promissory Note in
favor of Greenland. The shares will be held in escrow by Carmine Bua, Esq., 3838
Camino del Rio North, Suite 333, San Diego, CA 92109-1789.
2. REPRESENTATIONS AND WARRANTIES OF QUANTIX
2.1. Ownership. Quantix represents and warrants that Quantix is owner,
beneficially and of record, of the Properties, free and clear of liens,
encumbrances, security agreements, equities, options, claims, charges, and
restrictions, other than those expressly disclosed to Greenland, in writing, or
any restriction set forth by the California Commissioner of Corporations.
Quantix further represents that it is the legal holder of the trust deeds
associated with this Agreement and that it has full legal authority to transfer
such trust deeds to Greenland; and that Greenland, a result of this Exchange
Agreement, will have all the rights and privileges represented by the trust
deeds as though Greenland were the original beneficial owner of such trust
deeds.
2.2. Corporate Power and Authorization. Quantix is a corporation duly organized
validly existing, and in good standing under the laws of Nevada and has all
necessary corporate powers to own its properties and to operate its business as
now owned and operated by it. The execution and delivery of this Agreement by
Quantix, and the performance of its covenants and obligations under it, shall
have been duly authorized by all necessary corporate action, and Greenland shall
have received copies of all resolutions pertaining to that authorization,
certified by the secretary of the Corporation.
2.2.1. Quantix's execution and delivery of this Exchange Agreement, and
performance of its obligations hereunder, do not (a) conflict with or violate
Quantix's Articles of Incorporation or Bylaws, (b) violate or, alone or with
notice or the passage of time, result in the material breach or termination of,
or otherwise give any contracting party the tight to terminate or declare a
default under, the terms of any written agreement to which Quantix is a party,
or by which its properties or assets may be bound; or (c) violate any judgment,
order, decree, or to the knowledge of Quantix, any law, statute, regulation or
other judicial or governmental restriction to which Quantix is subject.
Quantix warrants and represents that, before entering into this transaction, it
has investigated the business properties and financial condition of Greenland
and NBC, and has relied upon its own investigation and its own legal and
accounting counsel before executing this Exchange Agreement.
2.3. Litigation. There is no suit, action, arbitration, or legal administrative,
or other proceeding, to the best knowledge of Quantix; against or effecting the
Properties; or any other business, assets, or financial condition that would
have a material adverse effect on this Exchange Agreement other than those
specifically disclosed by Quantix.
2.4. Appraisals. The real estate appraisals, if any, provided with this Exchange
Agreement have been prepared in accordance with generally accepted appraisal
principles and fairly present the value of the Properties as of the respective
dates of said appraisals. Furthermore, there has not been, since the date of the
attached appraisals, any material change in the condition, liabilities, assets,
or prospects of the Properties other than those specifically disclosed. Should
appraisals on the Properties be provided after the execution of this Exchange
Agreement, they will reflect, at a minimum, the aforementioned values.
2.5. Non-Disclosed Liabilities. Quantix does not have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that has not been otherwise disclosed in this
Exchange Agreement.
Exhibits
37
<PAGE>
2.6. Taxes. Within the times and in the manner prescribed by law, Quantix has
filed all federal, state, and local tax returns required by law and has paid all
taxes, assessments, and penalties, which are due and payable; and has made all
filings required by all applicable state and federal laws. There are no present
disputes as to taxes of any nature payable by Quantix.
2.7. No Other Rights/Options. Quantix has given no options or other rights to
purchase or exchange the Properties in favor of any person, firm or corporation.
2.8. Legal Compliance. Quantix has complied with all laws, regulations and
orders applicable to the Properties. Quantix is not in default with respect to
any order, writ, injunction or decree of any court or any court or Federal,
State, Municipal or other Governmental authority or agency. Quantix and the
Properties are not in violation of any zoning ordinance, restrictive covenant,
administrative regulation, environmental law or regulation, or any other
provision of law.
2.9. Brokerage Commissions. All negotiations relative to this Exchange
Agreement, and the transactions contemplated hereby on behalf of Quantix, have
been carried on by Quantix in such a manner as not to give rise, as the result
of any action of Quantix, to any valid claim against Greenland for a brokerage
commission, finders fee or other like payment.
2.10. Licenses and Permits. Quantix holds all, if any, licenses, certificates,
permits, franchises and rights from all appropriate Federal, State or other
public authorities necessary for the use of the Exchanged Assets by Greenland;
and all, if any, such material licenses, certificates, permits, franchises and
rights are set forth in Exhibit C attached hereto and incorporated herein.
Quantix is presently holding the Properties so as to comply with all applicable
statutes, ordinances, rules, regulations and orders of any governmental
authority, including but not limited to any law, ordinance or regulation
relating to the handling, storage, transportation, treatment or disposal of any
Hazardous Substance as defined under the Comprehensive Environmental Recovery
Compensation and Liability Act (CERCLA), 42 U. S. C. 9601 et. seq., as amended,
or any petroleum or petroleum-bases substance. Further, to its knowledge,
Quantix is not presently charged with and is not under governmental
investigation with respect to any actual or alleged violation of any statute,
ordinance, rule or regulation affecting the Exchanged Assets.
3. REPRESENTATIONS AND WARRANTIES OF GREENLAND
3.1. Corporate Power and Authority. Greenland is a corporation duly
organized, validly existing and in good standing under the laws of Nevada and
has all necessary corporate powers to own its properties and to operate its
business as now owned and operated by it; and neither the ownership of its
properties nor the nature of its business requires Greenland to be qualified in
any jurisdiction other than the state of its incorporation.
3.1.1. The execution and delivery of this Agreement by Greenland, and the
performance of its covenants and obligations under it, shall have been duly
authorized by all necessary corporate action, and Quantix shall have received
copies of all resolutions pertaining to that authorization, certified by the
chief executive officer and/or secretary of Greenland.
3.2. NBC Preferred Stock. The NBC Preferred Stock owned by Greenland
consists of 1,100,000 shares, convertible into NBC common stock as outlined in
section 1.2.1 of this Exchange Agreement. All the shares are validly issued,
fully paid, and non-assessable, and such shares have been so issued fully in
compliance with all federal and state securities laws.
3.3. Financial Statements. The financial statements in the public filing
documents (Forms 10K and 10Q) of Greenland, have been prepared in accordance
with generally accepted accounting principles consistently followed by Greenland
as of the respective dates of said financial statements, and the results of its
operation for the respective periods indicated.
3.4. Title. Greenland has good and marketable title to all of its
respective assets and interests in assets, whether real, personal, mixed,
tangible and intangible, which constitute all the assets and interest in assets
that are used in the business of Greenland.
Exhibits
38
<PAGE>
3.5. Due Diligence. Greenland has had an opportunity to review the
documents provided by Quantix related to the Properties and the trust deeds
pursuant to this Exchange Agreement and based on such documents, Greenland has
entered into this Exchange Agreement.
3.6. Conflicts. Neither the execution and delivery by Greenland of this
Exchange Agreement, nor the consummation of the transactions contemplated
hereby, will: (a) conflict with or result in a breach of any provision of the
Articles of Incorporation or Bylaws of Greenland, or (b) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Greenland or
any of its properties or assets.
3.7. Broker Commissions. All negotiations relative to this Exchange
Agreement and the transactions contemplated hereby have been carried on by
Greenland in such a manner as not to give rise, as the result of any action of
Greenland, to any valid claim against Quantix for a brokerage commission,
finders fee or other like payment.
4. OBLIGATIONS OF QUANTIX
4.1. Books and Records. Quantix will furnish to Greenland for its
examination (a) copies of Quantix's Articles of Incorporation and by-laws ; (b)
the minute books of Quantix containing all records required to be set forth in
all proceedings, consents, actions, and meetings of the shareholders and the
Board of Directors of Quantix; and (c) all permits, orders, and consents issued
with respect to Quantix, or any security, and all applications for such permits,
orders, and consents.
4.2. Documents Due at Closing. At the closing, Quantix shall deliver to
Greenland the following instruments, in form and substance satisfactory to
Greenland and its counsel:
Such warranty deeds, leases, bills of sale, endorsements,
assignments, and other good and sufficient instruments of conveyance and
transfer, and such further assurances and evidences of conveyances as may be
reasonably requested by Greenland in form satisfactory to Greenland and its
counsel, as shall be effective to vest, in accordance with the terms of this
Agreement, all rights, title and interest in and to the Exchanged Assets and
other rights contemplated by this Exchange Agreement;
4.2.1. Copies certified by the Secretary of Quantix, of the approval by the
Board of Directors and all shareholders of Quantix authorizing the execution,
delivery and performance of this Exchange Agreement and all other agreements,
documents and instruments relating hereto and the consummation of the
transactions contemplated hereby.
4.3. Promissory Note. Execution of a Promissory Note representing
$1,527,000 payable to Greenland. The term of the Promissory Note shall be one
(1) year. The interest rate shall be nine percent (9%) annually. All principal
and interest shall be due at maturity. Quantix shall have the option of making
principal and interest payments in cash or by utilizing mutually acceptable
assets. As principal payments are tendered by Quantix, Greenland shall release
the collateral (represented by 750,000 shares of NBC Preferred Stock held in
escrow by Carmine Bua) in an amount equal to the principal reductions based upon
a value of $2.04 per share..
4.4. Changes in Status of the Properties Prior to Closing. Quantix will
give notice promptly to Greenland of the occurrence of any event or the failure
of any event to occur that would preclude the satisfaction of any condition
contained herein.
4.5. Changes In Status of Greenland Prior to Closing. Quantix shall not
have discovered any material error, misstatement or omission in the
representations and warranties made by Greenland, and all the terms and
conditions of this Exchange Agreement to be complied with and performed by the
Greenland on or before the Closing Date shall have been complied with and
performed in all material respects.
4.6. Delivery of Documents. Quantix shall promptly execute and deliver such
instruments with any and all governmental bodies and regulatory agencies, and
that it will sign and execute any and all documents necessary to bring about and
perfect the purposes and take such actions as Greenland reasonably may request
in order
Exhibits
39
<PAGE>
to effect the transactions contemplated by this Exchange Agreement and to
satisfy each of the conditions set forth in this Exchange Agreement.
4.7. Consents and Authorizations. Quantix shall use its best efforts to
obtain promptly all consents and authorizations of third parties, to make all
filings, and to give all notices to third parties which may be necessary and
reasonably required in order to effect, or in connection with, the transactions
contemplated by this Exchange Agreement.
4.8. Cooperation. Quantix further agrees that it will do all things
necessary and reasonable to accomplish and facilitate the transfer of the shares
in conformance of the Exchange Agreement.
5. OBLIGATIONS OF GREENLAND
5.1. Delivery of Securities. At the closing, Greenland shall deliver to
Quantix the share certificates as set forth in paragraphs 1.2.2, 1.2.3, and
1.2.4.
5.2. Corporate Approval. Copies certified by the Chief Executive Officer or
Secretary of Greenland, of the approval by the Board of Directors of Greenland
authorizing the execution, delivery and performance of this Exchange Agreement
and all other agreements, documents and instruments relating hereto and the
consummation of the transactions contemplated hereby.
5.3. Notice of Non-Performance. Greenland will give notice promptly to
Quantix of the occurrence of any event or the failure of any event to occur that
would preclude the satisfaction of any condition contained herein.
5.4. Delivery of Documents. Greenland shall promptly execute and deliver
such instruments with any and all governmental bodies and regulatory agencies,
and that it will sign and execute any and all documents necessary to bring about
and perfect the purposes and take such actions as Quantix reasonably may request
in order to effect the transactions contemplated by this Exchange Agreement and
to satisfy each of the conditions set forth in this Exchange Agreement.
5.5. Consents and Authorizations. Greenland shall use its best efforts to
obtain promptly all consents and authorizations of third parties, to make all
filings, and to give all notices to third parties which may be necessary and
reasonably required in order to effect, or in connection with, the transactions
contemplated by this Exchange Agreement.
5.6. Due Diligence. Greenland shall not have discovered any material error,
or misstatement or omission in the representations, and warranties made by
Quantix herein, and all the terms and conditions of this Exchange Agreement to
be complied with and performed by Quantix at or before the Closing shall have
been complied with and performed in all material respects.
5.7. Cooperation. Greenland further agrees that it will do all things
necessary and reasonable to accomplish and facilitate the transfer of the shares
in conformance with any and all governmental bodies and regulatory agencies, and
that it will sign and execute any and all documents necessary to bring about and
perfect the purposes of the Exchange Agreement.
5.8. Representations and Warranties. The representations and warranties
made by Greenland in this Exchange Agreement shall be correct in all material
respects at and as of the Closing Date.
6. CLOSING
6.1. The Closing under this Agreement shall take place at the offices of
Greenland, 7084 Miramar Road, San Diego, CA 92121, on or before the close of
business April 8, 1998 ("Closing Date").
Exhibits
40
<PAGE>
7. COVENANTS OF QUANTIX AND GREENLAND
Publicity. Quantix and Greenland agree to maintain in confidence
information concerning this Exchange Agreement and the transactions contemplated
by this Exchange Agreement. The parties shall consult with each other prior to
any public announcements or disclosures required by law to be made with respect
to the transactions contemplated by this Exchange Agreement, and no other
announcements will be made without mutual consent of Quantix and Greenland.
7.1. Best Efforts. Quantix and Greenland will use their best efforts to
perform or cause to be satisfied each covenant or condition to be performed or
satisfied by them.
7.2. Filings. Quantix and Greenland agree to cooperate with each other in
filing any necessary applications, reports or other documents with any Federal
or State authorities having jurisdiction with respect to the transactions
contemplated by this Exchange Agreement; and in seeking necessary consultation
with and favorable action by any such agencies, authorities or bodies.
7.3. Cooperation After Closing. After the Closing Date, Quantix and
Greenland shall, whenever and as often as shall be reasonably required by the
other, execute, acknowledge and deliver, or cause to be executed, acknowledged
and delivered, any and all further instruments as may be necessary or expedient
to consummate the transactions provided for in this Exchange Agreement.
8. OTHER CONDITIONS AND OBLIGATIONS
8.1. All obligations of Greenland under this Exchange Agreement are, at the
option of Greenland, subject to and conditioned upon the satisfaction on or
prior to the Closing Date, of each of the following additional conditions:
8.1.1. Quantix Representations and Warranties. Except for changes
contemplated by this Exchange Agreement and changes occurring in the ordinary
course of business, the representations, warranties and agreements made by
Quantix herein shall be true in all material respects on an as of the Closing
Date with the same effect as though such representations and warranties had been
made or given on and as of the Closing Date. Quantix and all shareholders of
Quantix shall have performed in all material respects the obligations,
agreements and covenants undertaken by them herein to be performed at or prior
to the Closing Date.
8.1.2. Authorizations and Approvals. All authorizations and approvals of
any third parties, including Federal or State regulatory bodies and officials,
necessary, in the reasonable opinion of Greenland, for the consummation of the
transactions contemplated by this Exchange Agreement.
8.1.3. Authority to Enter Into and Consummate Transaction. All resolutions
and actions necessary to authorize the execution, delivery and performance of
this Exchange Agreement and the consummation of the transactions contemplated
hereby by Quantix shall have been duly and validly made and taken, and Quantix
shall have full power and right to consummate the transactions contemplated
hereby.
8.1.4. Damage to Assets Prior to Closing. The Properties shall not have
suffered, prior to the Closing, any loss or damage on account of fire, flood,
accident or any other calamity to an extent that would materially impair the
valuation of the Properties regardless of whether any such loss or losses have
been insured against. Greenland shall have had full opportunity to enter upon
the Properties and make such examinations thereof as it deems necessary. The
results of such examinations must be satisfactory to Greenland, in its sole
discretion.
8.1.5. Payment of Taxes. Quantix shall have paid or made provision for
payment of all transfer taxes, sales taxes, or other similar taxes, which become
due by reason of the transactions herein provided, if any.
Exhibits
41
<PAGE>
8.2. Other Obligations of Quantix Prior to Closing. All obligations of
Quantix under this Exchange Agreement are subject to and shall be conditioned
upon the satisfaction prior to the Closing Date, of each of the following
conditions:
8.2.1. The representations, warranties and agreements made by Greenland
herein shall be true in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made or
given on and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the Closing
Date, except as affected by transactions contemplated hereby. Greenland shall
have performed in all material respects the obligations, agreements and
covenants undertaken herein to be performed at or prior to the Closing Date.
8.2.2. All resolutions and actions necessary to authorize the execution,
delivery and performance of this Exchange Agreement and the consummation of the
transactions contemplated hereby by Greenland shall have been duly and validly
made and taken, and Greenland shall have full power and right to consummate the
transactions contemplated hereby.
9. TERMINATION
9.1. Mutual Consent. At any time on or prior to the Closing Date, this
Exchange Agreement may be terminated by the mutual consent of Greenland and
Quantix without liability on the part of any party. In the event of the
termination of this Exchange Agreement by mutual consent, this Exchange
Agreement shall become void and have no effect, without any liability on the
part of any party or its directors, officers or shareholders.
9.2. Material Default. At any time on or prior to the Closing Date, if a
material default shall be made by a party in the observance, or in the due and
timely performance of, the covenants herein contained, or if there shall have
been a material breach by a party of any of the representations and warranties
set forth in this Exchange Agreement, Greenland or Quantix, as the case may be,
may terminate this Exchange Agreement without prejudice to its other rights and
remedies, including such party's right to recover its expenses, costs, and other
damages.
9.3. Non-Compliance of Provisions of Exchange Agreement. If the conditions
of this Exchange Agreement to be complied with or performed by a party on or
before the Closing Date shall not have been complied with, and such
non-compliance or non-performance shall not have been waived, the party to whom
the benefit of such condition runs may terminate this Exchange Agreement without
prejudice to its other rights and remedies, including such party's right to
recover its expenses, costs and other damages.
10. MISCELLANEOUS
10.1. Amendment. This Exchange Agreement may be amended, modified or
supplemented in whole or in part only by an instrument in writing executed by
both Greenland and Quantix.
10.2. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered to be an original instrument.
10.3. Expenses. Quantix and Greenland shall each bear the respective
expenses incurred by them in connection with the negotiation, execution and
delivery of this Exchange Agreement and the consummation of he transactions
contemplated hereby.
10.4. Entire Agreement. This Exchange Agreement contains the entire
agreement between Greenland and Quantix with respect to the Exchange Assets and
related transactions and supersedes all prior arrangements or understandings
with respect thereto.
10.5. Descriptive Headings. The description headings are for convenience of
reference only and shall not control or affect the meaning or construction of
any provision of this Exchange Agreement.
Exhibits
42
<PAGE>
10.6. Notices. All notices or other communications that are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
IF TO GREENLAND: Eric W. Gaer, Chief Executive Officer
Greenland Corporation
7084 Miramar Road
San Diego, CA 92121
IF TO QUANTIX: H. Leah Hansen, President
Quantix
9310 Towne Center Drive
Suite 78
San Diego, CA 92121
10.10 Specific Performance. Quantix acknowledges that the Exchange Assets
are unique and that if Greenland fails to consummate the transactions
contemplated by this Exchange Agreement, such failure will cause irreparable
harm to Greenland for which there will be no adequate remedy at law. Greenland
shall be entitled, in addition to its other remedies at law, to specific
performance of this Exchange Agreement if Quantix, without just cause, refuses
to consummate the transactions contemplated by this Exchange Agreement.
10.10 Survival of Covenants, Representations, Warranties and
Indemnifications. All covenants, representations and warranties made by any
party to this Exchange Agreement shall be deemed made for the purpose of
inducing the other parties to enter into this Exchange Agreement. The
representations, warranties and covenants contained in this Exchange Agreement
shall, except as otherwise provided in this Exchange Agreement, survive the
Closing indefinitely. The covenants, presentations and warranties of both
Quantix and Greenland are made only to and for the benefit of the other party to
this Exchange Agreement and shall not create or vest rights in other persons.
10.10 Controlling Law. This Exchange Agreement shall be governed by and
construed pursuant to the laws of the State of California.
IN WITNESS WHEREOF, the parties have caused this Exchange Agreement to be
executed by their authorized officers on the date stated above.
GREENLAND CORPORATION
BY: Eric W. Gaer, President and Chief Executive Officer
QUANTIX
BY: H. Leah Hansen, President
Exhibits
43
<PAGE>
CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT............................. F-2
BALANCE SHEET............................................ F-3
STATEMENTS OF OPERATIONS................................. F-4
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY............ F-5
STATEMENTS OF CASH FLOWS................................. F-6
NOTES TO FINANCIAL STATEMENTS........................... F-7
See Notes to Consolidated Financial Statements.
F-1
<PAGE>
SMITH & COMPANY
A PROFESSIONAL CORPORATION OF
CERTIFIED PUBLIC ACCOUNTANTS
MEMBERS OF: 10 WEST 100 SOUTH, SUITE 700
AMERICAN INSTITUTE OF SALT LAKE CITY, UTAH 84101
CERTIFIED PUBLIC ACCOUNTANTS TELEPHONE: (801) 575-8297
UTAH ASSOCIATION OF FACSIMILE: (801) 575-8306
CERTIFIED PUBLIC ACCOUNTANTS E-MAIL: [email protected]
- --------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Greenland Corporation
We have audited the accompanying balance sheet of Greenland Corporation (a
development stage company) as of December 31, 1997, and the related statements
of operations, changes in stockholders' equity, and cash flows for the years
ended December 31, 1997 and 1996, and for the period of July 17, 1986 (date of
inception) to December 31, 1997. 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 audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Greenland Corporation (a
development stage company) as of December 31, 1997, and the results of its
operations, changes in stockholders' equity, and its cash flows for the years
ended December 31, 1997 and 1996, and for the period of July 17, 1986 (date of
inception) to December 31, 1997, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company has a working capital deficiency of $(59,896) at December 31, 1997,
and a retained deficit of $(3,562,158). The Company has suffered losses from
operations and has a substantial need for working capital. This raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are described in Note 3 to the financial
statements. The accompanying financial statements do not include any adjustments
that may result from the outcome of this uncertainty.
/s/ Smith & Company
CERTIFIED PUBLIC ACCOUNTANTS
Salt Lake City, Utah
April 9, 1998, except Note 5 which is dated April 30, 1998
F-2
<PAGE>
GREENLAND CORPORATION
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<CAPTION>
12/31/97
----------------
ASSETS
Current Assets
<S> <C>
Cash in banks $ 6,528
Accounts receivable - officers (Note 2) 146,586
----------------
TOTAL CURRENT ASSETS 153,114
Equipment, net of depreciation of $12,134 (Note 1) 30,338
Other Assets
Investments (Note 4) 4,039,143
Capitalized software costs (Note 1) 186,723
----------------
$ 4,409,318
================
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 123,502
Accrued wages payable 29,750
Payroll taxes payable 59,758
----------------
TOTAL CURRENT LIABILITIES 213,010
Convertible secured debentures (Note 5) 600,000
Contingent liabilities 0
----------------
TOTAL LIABILITIES 813,010
STOCKHOLDERS' EQUITY
Common Stock $.001 par value:
Authorized -100,000,000 shares
Issued and outstanding 27,097,787 shares 27,097
Additional paid-in capital 7,131,369
Deficit accumulated during development stage (3,562,158)
----------------
TOTAL STOCKHOLDERS' EQUITY 3,596,308
----------------
$ 4,409,318
================
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
GREENLAND CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
7/17/86
(Date of
Year Ended December 31, inception) to
1997 1996 12/31/97
------------- ------------- -------------
REVENUES
<S> <C> <C> <C>
AMR Sales $ 15,000 $ 40,000 $ 55,000
Other income 11,381 65,015 60,321
------------- ------------- -------------
26,381 105,015 115,321
EXPENSES
General and administrative 1,820,050 639,462 2,561,768
Depreciation 12,134 0 12,134
Interest 38,257 3,931 42,241
Property taxes and other taxes 44,708 9,001 53,709
Bad debts 0 59,668 59,668
------------- ------------- -------------
1,915,149 712,062 2,729,520
------------- ------------- -------------
LOSS FROM OPERATIONS (1,888,768) (607,047) (2,614,199)
OTHER INCOME (LOSS)
Gain on disposition of subsidiary 531,388 0 531,388
Loss on sale of properties (115,000) 0 (115,000)
--------------- ------------- -------------
NET LOSS FROM CONTINUING OPERATIONS (1,472,380) (607,047) (2,197,811)
Loss from discontinued operations (Note 1) (190,660) (279,115) (1,364,347)
------------- ------------- -------------
NET LOSS BEFORE INCOME TAXES (1,663,040) (886,162) (3,562,158)
PROVISION FOR INCOME TAXES 0 0 0
------------- ------------- -------------
NET LOSS $ (1,663,040) $ (886,162) $ (3,562,158)
============= ============= =============
Loss before discontinued operations $ (.07) $ (.09)
Loss from discontinued operations (.01) (.04)
------------- -------------
NET LOSS PER WEIGHTED AVERAGE SHARE $ (.08) $ (.13)
============= =============
Weighted average number of common shares used to
compute net income (loss) per weighted average share 20,270,173 6,637,617
============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
GREENLAND CORPORATION
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Additional
Par Value $0.001 Paid - in Retained
Shares Amount Capital Deficit
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Balances at 7/17/86 (date of inception) 0 $ 0 $ 0 $ 0
Issuance of common stock (restricted)
At $.002 per share at 7/17/86 1,000,000 1,000 1,000
Net loss for period (1,950)
-------------- -------------- -------------- --------------
Balances at 12/31/86 1,000,000 1,000 1,000 (1,950)
Net loss for period (10)
-------------- -------------- -------------- --------------
Balances at 12/31/87 1,000,000 1,000 1,000 (1,960)
Net loss for period (10)
-------------- -------------- -------------- --------------
Balances at 12/31/88 1,000,000 1,000 1,000 (1,970)
Net loss for period (10)
-------------- -------------- -------------- --------------
Balances at 12/31/89 1,000,000 1,000 1,000 (1,980)
Net loss for period (10)
-------------- -------------- -------------- --------------
Balances at 12/31/90 1,000,000 1,000 1,000 (1,990)
Net loss for period (10)
-------------- -------------- -------------- --------------
Balances at 12/31/91 1,000,000 1,000 1,000 (2,000)
Net loss for period 0
-------------- -------------- -------------- --------------
Balances at 12/31/92 1,000,000 1,000 1,000 (2,000)
Net loss for period 0
-------------- -------------- -------------- --------------
Balances at 12/31/93 1,000,000 1,000 1,000 (2,000)
Issuance of common stock (restricted)
at $.033 per share for cash 1,200,000 1,200 38,800
to acquire subsidiary at $3.04 per
share at 10/1/94 100,000 100 303,893 (257,612)
to acquire additional rental properties
at $2.92 per share at 10/1/94 524,147 524 1,529,803
at par 10/21/94 for services rendered 132,000 132
Net loss for period (110,338)
-------------- -------------- -------------- --------------
Balance at 12/312/94 2,956,147 2,956 1,873,496 (369,950)
Issuance of common stock (regulation
S) at $.10 per share for stock
subscription 1,100,000 1,100 109,900
Issuance of common stock (restricted)
at $.483 per share to cancel debt 25,544 26 123,294
at $.001 per share for services 209,400 209
at $.09 per share for assets 8,500,000 8,500 710,829
at $2.00 per share for assets 8,400 8 16,800
at $5.00 per share to cancel debt 20,000 20 99,980
at $5.14 per share to cancel debt 5,000 5 25,714
at $6.03 per share to land option 408,512 409 2,464,591
Cancellation of restricted common
stock (42,750) (43) (124,786)
Net loss for period (587,153)
-------------- -------------- -------------- --------------
Balances at 12/31/95 13,190,253 13,190 5,298,818 (957,103)
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
GREENLAND CORPORATION
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Continued)
<TABLE>
<CAPTION>
Common Stock Additional
Par Value $0.001 Paid - in Retained
Shares Amount Capital Deficit
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Balances at 12/31/95 13,190,253 13,190 5,298,818 (957,103)
Issuance of common stock (restricted)
correction to issue price of shares
previously sold on subscription (14,195)
at $.001 per share for assets 1,270,359 1,270 (1,270)
at $.001 per share for services 118,856 119 (119)
at $.50 per share for cash 242,500 242 121,008
at $.25 per share for cash 1,438,505 1,438 358,188
at $2.00 per share for cash 54,500 55 108,945
at $1.00 per share for cash 600 1 599
at $5.00 per share for cash 200 0 1,000
at $3.00 per share for cash 28,000 28 83,972
at $.82 per share for services 60,000 60 48,940
at $1.07 per share for cash 2,888 3 3,084
at $.76 per share for services 4,500 5 3,396
at $.31 per share for cash 132,000 132 40,786
Cancellation of restricted common stock (1,328,701) (1,329) (458,103)
Net loss for year (886,162)
-------------- -------------- -------------- --------------
Balances at 12/31/96 15,214,460 15,214 5,595,049 (1,843,265)
Issuance of common stock (restricted)
at $.25 per share for cash 887,000 887 220,863
at $.26 per share for cash 15,000 15 3,885
at $.283 per share for services 5,300 5 1,495
at $.25 per share for services 165,000 165 41,085
at $.26 per share for services 16,500 17 4,273
at $.15 per share for cash 2,000,000 2,000 298,000
at par $.001 to settle lawsuit 61,382 61 (61)
at $.25 to settle debt 200 0 50
at $.10 per share for cash 2,944,000 2,944 291,456
at $.22 per share for services 300,000 300 65,700
at $.10 per share for services 268,105 268 26,542
at $.277 per share for services 10,840 11 2,992
S-8 shares at
$.26 per share for services 700,000 700 181,300
$.20 per share for services 100,000 100 19,900
$.10 per share for services 2,100,000 2,100 207,900
$.075 per share for services 2,310,000 2,310 170,940
Disposition of subsidiary (55,853)
Net loss for year (1,663,040)
-------------- -------------- -------------- --------------
Balances at 12/31/97 27,097,787 $ 27,097 $ 7,131,369 $ (3,562,158)
============== ============== ============== ==============
</TABLE>
See Notes to Consolidated Financial Statements.
F-6
<PAGE>
GREENLAND CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
7/17/86
(Date of
Year Ended December 31, inception) to
1997 1996 12/31/97
------------- ------------- -------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss $ (1,663,040) $ (886,162) $ (3,562,158)
Adjustments to reconcile net loss
to cash provided (required) by operating activities:
Depreciation and amortization 192,881 147,878 576,350
Unrealized decrease in investments 47,576 0 83,826
Book value of disposed assets/liabilities (313,465) 0 200,374
Stock issued for services 728,153 52,401 823,422
Changes in operating assets and liabilities:
Accounts receivable (16,188) (70,730) (86,918)
Escrow accounts 7,518 (5,549) 0
Other assets 0 0 542
Accounts payable 48,952 46,229 123,502
Accrued expenses (27,572) 111,715 89,508
Deposits (20,814) (1,015) 0
Property taxes payable (83,782) 61,418 (112,522)
------------- ------------- -------------
NET CASH REQUIRED BY
OPERATING ACTIVITIES (1,099,781) (543,815) (1,864,074)
INVESTING ACTIVITIES
Capitalization of software costs 0 (186,723) (186,723)
Purchase of stock 0 0 (55,000)
Purchase of equipment 0 (1,626) (17,558)
Organization cost 0 0 (50)
------------- ------------- -------------
NET CASH USED BY INVESTING ACTIVITIES 0 (188,349) (259,331)
FINANCING ACTIVITIES
Cash from subsidiary 0 0 23,415
Proceeds from sale of stock 820,050 719,481 1,637,336
Collections of stock subscription 0 40,000 40,000
Amounts borrowed from (repaid to) stockholders (290,790) (10,000) 0
Repayment of loans (29,860) (91,931) (243,818)
Proceeds from new loans 600,000 73,000 673,000
------------- ------------- -------------
NET CASH PROVIDED
BY FINANCING ACTIVITIES 1,099,400 730,550 2,129,933
------------- ------------- -------------
INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS (381) (1,614) 6,528
Cash and cash equivalents at beginning of year 6,909 8,523 0
------------- ------------- -------------
CASH AND CASH
EQUIVALENTS AT END OF YEAR $ 6,528 $ 6,909 $ 6,528
============= ============= =============
SUPPLEMENTAL INFORMATION
Cash paid for interest $ 306,892 $ 309,799 $ 951,321
Assets acquired by assumption of debt and issuance of stock 0 104,500 10,933,790
Cancellation of stock previously issued for
assets determined to be worthless (Note 4) 0 459,432 459,432
Investment received in exchange for non-cash assets 3,850,000 0 3,850,000
Net book value of assets exchanged for investment (1,412,077) 0 (1,412,077)
Land option exchanged for investment (2,515,000) 0 (2,515,000)
Stock issued to cancel debt 0 0 249,039
------------- ------------- -------------
$ 229,815 $ 873,731 $ 12,516,505
============= ============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-7
<PAGE>
GREENLAND CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Principal Operations
The principal business of the Company is the marketing of
advanced communications technology, which enables utilities to
automate meter reading via the Company's AirLink System.
Accounting Methods
The Company recognizes income and expenses based on the
accrual method of accounting.
Discontinued Operations
In December, 1997 the Company disposed of its wholly-owned
subsidiary Gam Properties, Inc. (which was in the real estate
rental business). The net loss from operations of the
subsidiary during 1997 was $(190,660). The financial
statements for the year ended December 31, 1996 have been
restated to reflect the loss from Gam's operations consistent
with 1997.
Development Stage
The Company was in the development stage prior to 1994, when
it acquired its subsidiary Gam Properties, Inc. Upon the
disposition of the subsidiary at December 31, 1997, the
Company has re-entered the development stage.
Equipment
Equipment is recorded at cost. Depreciation is provided for
using the straight-line method over a seven year life. The
cost of assets sold or retired and the related amounts of
accumulated depreciation are removed from the accounts in the
year of disposal. Any resulting gain or loss is reflected in
current operations.
Expenditures for maintenance and repairs are charged to
operations as incurred; additions and improvements are
capitalized.
Dividend Policy
The Company has not yet adopted any policy regarding payment
of dividends.
Capitalized Software
The Company has capitalized expenses incurred to install live
test sites for its AirLink automated meter reading systems.
Those costs will be amortized against revenues from sales of
the systems over a period not to exceed five years.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect certain reported
amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Fair Market Value of Financial Instruments
The Company considers all highly liquid investments with a
maturity of three months or less to be cash equivalents and
are deemed to approximate fair value. In management's opinion,
the carrying value of long-term debt also approximates fair
value.
Income Taxes
The Company records the income tax effect of transactions in
the same year that the transactions enter into the
determination of income, regardless of when the transactions
are recognized for tax purposes. Tax credits are recorded in
the year realized. Since the Company has not yet realized
income as of the date of this report, no provision for income
taxes has been made.
The Company utilizes the liability method of accounting for
income taxes as set forth in Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS 109).
Under the liability method, deferred taxes are determined
based on the difference between the financial statement and
tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to
reverse. An allowance against deferred tax assets is recorded
when it is more likely than not that such tax benefits will
not be realized.
F-8
<PAGE>
GREENLAND CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued)
Income Taxes (continued)
At December 31, 1997, a deferred tax asset has not been recorded
due to the Company's lack of operations to provide income to use
the net operating loss carryover which expires as follows:
Year Ended Expires Amount
------------------- ------------------- ------------
December 31, 1986 December 31, 2001 $ 1,950
December 31, 1987 December 31, 2002 10
December 31, 1988 December 31, 2003 10
December 31, 1989 December 31, 2004 10
December 31, 1990 December 31, 2005 10
December 31, 1991 December 31, 2006 10
December 31, 1994 December 31, 2009 39,780
December 31, 1995 December 31, 2010 378,664
December 31, 1996 December 31, 2011 718,121
December 31, 1997 December 31, 2012 1,892,413
------------
$ 3,030,978
============
NOTE 2: ACCOUNTS RECEIVABLE - OFFICERS
During 1996 and 1997, the Company advanced $146,586 to officers
and employees. The funds will be repaid in 1998 or withheld from
wages.
NOTE 3: GOING CONCERN ITEMS
The Company's financial statements have been presented on the
basis that it is a going concern, which contemplates the
realization of assets and satisfaction of liabilities in the
normal course of business. The Company has incurred losses from
inception and has a retained deficit of $(3,562,158).
Management believes the Company will be able to continue as a
going concern for the following reasons:
1. The Company is in the process of a private placement
offering to sell shares of restricted common stock to
raise up to $5,000,000.
2. The Company expects to leverage some of its
investments in other publicly-held corporations to
borrow funds for working capital.
NOTE 4: INVESTMENTS
Investments consist of the following items:
1- 25,000 shares of common stock in a public company. The cost
was $55,000.
2- A 49% interest in a limited liability company which is
reported at $134,143 under the equity method.
3- 1,100,000 convertible preferred shares in a public company. The
basis in the land option given in exchange for these shares was
$2,515,000. Subsequent to December 31, 1997, the Company has
exchanged the shares for land and notes receivable valued at
$2,400,000. The investment has been reflected at a value of
$2,400,000 as of December 31, 1997. The shares are convertible in
1998 to the number of common shares (at the then-current market
price) equivalent to $2,860,000.
4- 290,000 convertible preferred shares in a public company. The
net book value of the Company's subsidiary which was exchanged for
these shares was $1,412,077. The negotiated price at December 31,
1997 was $1,630,000, which is the value reflected on these
financial statements. The shares are convertible in 1999 to the
number of common shares (at the then-current market price)
equivalent to $1,450,000.
F-9
<PAGE>
GREENLAND CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997
NOTE 5: CONVERTIBLE SECURED DEBENTURES
On April 9, 1997, the Company sold $600,000 in aggregate principal
amount of 10% Convertible Debentures due April 30, 1999 under
Regulation S. Sales commissions of 15% were paid. The Company
placed 4,000,000 shares of restricted stock in escrow as security.
Under the original terms of their issuance, the Series B
Convertible Debentures are convertible into common stock at the
lower of $.186 per share or 62% of the closing bid price of the
common stock averaged over the five days prior to conversion. The
issuance and sale of the Series B Convertible Debentures was
intended to comply with Regulation S of the Securities Act.
Based in part on the advice of outside legal counsel, the Company
believed that the validity of the convertibility of the Debentures
was open to some question. The Company was sued by the Holders of
the Debentures to force conversion.
Subsequent to December 31, 1997, the Company settled with the
Holders of the Debentures and issued 9,000,000 shares of its
common stock to retire the Debentures. If the shares had been
converted at December 31, 1997, the Company would have issued
8,415,147 shares.
NOTE 6: LEASES
In January, 1997, the Company entered into a three-year operating
lease of office space. Required lease payments are $73,313 in
1998, and $79,560 in 1999.
F-10
<PAGE>
SMITH & COMPANY
A PROFESSIONAL CORPORATION OF
CERTIFIED PUBLIC ACCOUNTANTS
MEMBERS OF: 10 WEST 100 SOUTH, SUITE 700
AMERICAN INSTITUTE OF SALT LAKE CITY, UTAH 84101
CERTIFIED PUBLIC ACCOUNTANTS TELEPHONE: (801) 575-8297
UTAH ASSOCIATION OF FACSIMILE: (801) 575-8306
CERTIFIED PUBLIC ACCOUNTANTS E-MAIL: [email protected]
- --------------------------------------------------------------------------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT
As independent public accountants for Greenland Corporation, we
hereby consent to the use of our report included in the annual report of such
Company on Form 10-KSB for the year ended December 31, 1997, and in the
Company's offering pursuant to Regulation D of the Securities Act of 1933, as
amended.
Date: April 30, 1998
/s/ Smith & Company
CERTIFIED PUBLIC ACCOUNTANTS
68
<PAGE>
PART IV
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GREENLAND CORPORATION
By: _/s/ Eric W. Gaer_______
Eric W. Gaer
President and Chief Executive Officer
May 11, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Eric W. Gaer President and Chief Executive Officer, May 11, 1998
and acting Chief Financial Officer
- ---------------------------
Eric W. Gaer
/s/ Michael H. deDomenico Secretary May 11, 1998
- ---------------------------
Michael H. deDomenico
69
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Greenland Corporation December 31, 1997 financial statements and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000852127
<NAME> Greenland Corporation
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 6,528
<SECURITIES> 0
<RECEIVABLES> 146,586
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 153,114
<PP&E> 42,472
<DEPRECIATION> (12,134)
<TOTAL-ASSETS> 4,409,318
<CURRENT-LIABILITIES> 213,010
<BONDS> 600,000
0
0
<COMMON> 27,097
<OTHER-SE> 3,569,211
<TOTAL-LIABILITY-AND-EQUITY> 4,409,318
<SALES> 15,000
<TOTAL-REVENUES> 26,381
<CGS> 0
<TOTAL-COSTS> 1,915,149
<OTHER-EXPENSES> 115,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38,257
<INCOME-PRETAX> (1,472,380)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,472,380)
<DISCONTINUED> (190,660)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,663,040)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
