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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of
July __, 1997 ("Agreement") is by and between Salutations, Inc., a Nevada
corporation, ("Salutations"), and International Trading & Manufacturing
Corporation, a Nevada corporation ("ITM"). Salutations and ITM are sometimes
hereinafter referred to collectively as the "parties" and individually as a
"party."
W I T N E S S E T H :
WHEREAS, Salutations and ITM desire to effect a combination between
Salutations and ITM in a manner that qualifies as a reorganization within the
meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986 as amended;
and
WHEREAS, pursuant to the intended combination, Salutations will acquire
100% of the issued and outstanding stock of ITM thereby making ITM a wholly
owned subsidiary of Salutations, all pursuant to the terms and conditions of
this Agreement;
NOW, THEREFORE, the parties each in consideration that the other join
herein represent, warrant and agree as follows:
I. EXCHANGE OF SHARES
Subject to the terms and conditions hereof and in reliance on the
respective representations and warranties contained herein, ITM hereby
transfers, which transfers shall be effective as of the Effective Date, and/or
shall cause to be transferred as of the Effective Date, 100% of the issued and
outstanding capital shares of ITM. In exchange for the transfer of ITM shares,
Salutations shall issue one common share of Salutations for each share of ITM
received. The shares of Salutations shall be issued in each case to the person
or entity who transferred to Salutations the applicable ITM shares. All
Salutations shares issued under this Section shall be post-split shares as
described in Subsection 3.02(a).
II. THE EFFECTIVE DATE AND DELIVERY OF SHARES
2.01 THE EFFECTIVE DATE. The "Effective Date" for purposes of this
Agreement shall be the date the State of Nevada accepts for filing the Amendment
to the Articles of Incorporation for Salutations which changes the name of
Salutations to International Trading &
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Manufacturing Corporation, or such similar name, and which puts into effect the
forward stock split of Salutations shares as described herein.
2.02 DELIVERY ITM SHARES. All certificates evidencing ITM shares
exchanged herein shall be delivered to Salutations, duly endorsed or accompanied
by stock powers duly executed in blank and otherwise in form acceptable for
transfer, free and clear of all options, liens, claims, charges and encumbrances
of any nature whatsoever, within 10 days of the Effective Date.
2.03 ISSUE OF SALUTATIONS SHARES. Salutations shall issue shares as
required herein with respect to each certificate of ITM shares received, within
20 days of receipt of the applicable ITM certificate and acceptable documents of
transfer.
III. REPRESENTATIONS AND WARRANTIES OF SALUTATIONS
Salutations represents to ITM as follows:
3.01 ORGANIZATION.
3.01(a) Salutations is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and
Salutations has the corporate power and authority to carry on its
business as presently conducted.
3.01(b) The copies of the Articles of Incorporation of
Salutations and of the Bylaws of Salutations, which have heretofore been
delivered to ITM, are complete and correct copies of such Articles of
Incorporation and Bylaws as amended and in effect on the date hereof.
3.02 CAPITALIZATION.
3.02(a) The issued and outstanding shares of stock of
Salutations as of the Effective Date shall be 516,250 common shares (the
"Salutations Shares"). Such shares shall be post-split shares, having
undergone a forward split on a 2.5 for one basis, which split shall be
effective as of the Effective Date. Except for the Salutations Shares,
Salutations shall have no other capital shares issued or outstanding on
the Effective Date. The Salutations Shares on the Effective Date shall
be duly authorized, validly issued, fully paid and nonassessable.
3.02(b) There are no outstanding options, warrants, or rights to
purchase any securities of Salutations.
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3.03 SUBSIDIARIES AND INVESTMENTS. Salutations does not own any capital
stock or have any interest in any corporation, partnership or other form of
business organization.
3.04 FINANCIAL STATEMENTS. Salutations has delivered to ITM copies of
the financial statements contained in the 15c2-11 information statement dated
June 5, 1997 of Salutations (the "Salutations Financial Statements").
Salutations believes the Salutations Financial Statements present fairly the
financial conditions of Salutations at the dates thereof.
3.05 NO UNDISCLOSED LIABILITIES. Other than as described in Exhibit 3.05
hereto, Salutations is not subject to any material liability or obligation of
any nature, whether absolute, accrued, contingent, or otherwise and whether due
or to become due, which is not reflected or reserved against in the Salutations
Financial Statements.
3.06 ABSENCE OF MATERIAL CHANGES. Except as described elsewhere in this
Agreement or on any Exhibit hereto, there has not been:
3.06(a) any material change in the condition (financial or
otherwise) of the properties, assets, liabilities or business of
Salutations from that represented in the Salutations Financial
Statements, except changes in the ordinary course of business which,
individually and in the aggregate, have not been materially adverse;
3.06(b) any redemption, purchase or other acquisition of any
shares of the capital stock of Salutations, or any issuance of any
shares of capital stock or the granting, issuance or exercise of any
rights, warrants, options or commitments by Salutations relating to its
authorized or issued capital stock; or
3.06(c) any change or amendment to the Articles of Incorporation
or Bylaws of Salutations.
3.07 LITIGATION. There is no litigation, proceeding or investigation
pending or to the knowledge of Salutations, threatened against Salutations
affecting any of its properties or assets, or, to the knowledge of Salutations,
against any officer, director, or stockholder of Salutations that might result,
either in any case or in the aggregate, in any material adverse change in the
business, operations, affairs or condition of Salutations or its properties or
assets, or that might call into question the validity of this Agreement, or any
action taken or to be taken pursuant hereto.
3.08 TITLE TO ASSETS. Salutations has good and marketable title to all
of its assets and properties now carried on its books including those reflected
in the balance sheet contained in the Salutations Financial Statements, free and
clear of all liens, claims, charges, security interests or other encumbrances,
except as described in the balance sheets included in the Salutations Financial
Statements or in any Exhibit.
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3.09 CONTRACTS AND UNDERTAKINGS. Each contract, agreement, lease,
license, arrangement, commitment and undertaking with respect to the business of
Salutations is valid, binding and in full force and effect. Salutations is not
in material default, or alleged to be in material default, under any contract,
agreement, lease, license, commitment, instrument or obligation and, to the
knowledge of Salutations, no other party to any contract, agreement, lease,
license, commitment, instrument or obligation to which Salutations is a party is
in default thereunder nor, to the knowledge of Salutations, does there exist any
condition or event which, after notice or lapse of time or both, would
constitute a default by any party to any such contract, agreement, lease,
license, commitment, instrument or obligation.
3.10 TRANSACTIONS WITH AFFILIATES, DIRECTORS AND SHAREHOLDERS. Except as
set forth in Exhibit 3.10 hereto, there are and have been no contracts,
agreements, arrangements or other transactions between Salutations, and any
officer, director, or stockholder of Salutations, or any corporation or other
entity controlled by such persons or a member of the such person's families.
3.11 NO CONFLICT. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach of any term or provision of, or constitute a default under,
the Articles of Incorporation or Bylaws of Salutations, or any agreement,
contract or instrument to which Salutations is a party or by which it or any of
its assets are bound.
3.12 DISCLOSURE. Neither this Agreement, the Salutations Financial
Statements nor any other agreement, document, certificate or written or oral
statement furnished to the ITM in connection with the transactions contemplated
hereby, contains any untrue statement of a material fact or when taken as a
whole omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading.
IV. REPRESENTATIONS AND WARRANTIES OF ITM
ITM and Xxxxxx X. Xxxxx (jointly the "ITM Warrantors") hereby represent
and warrant to Salutations as follows:
4.01 ORGANIZATION.
4.01(a) ITM is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada and ITM has
the corporate power and authority to carry on its business as presently
conducted.
4.01(b) The copies of the Articles of Incorporation of ITM and
of the Bylaws of ITM, which have heretofore been delivered to
Salutations, are complete and correct copies of such Articles of
Incorporation and Bylaws as amended and in effect on the date hereof.
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4.02 CAPITALIZATION.
4.02(a) the issued and outstanding shares of stock of ITM as of
the Effective Date shall be 4,700,000 common shares together with any
common shares issued as of the Effective Date pursuant to the private
placement of up to 500,000 common shares of ITM at $1.00 per share
(which is being sold at the present time (the "ITM Shares"). Except for
the ITM Shares, ITM shall have no other capital shares issued or
outstanding on the Effective Date. The ITM Shares on the Effective Date
shall be duly authorized, validly issued, fully paid and nonassessable.
4.02(b) There are no outstanding options, warrants, or rights to
purchase any securities of ITM that have not been disclosed to
Salutations.
4.03 SUBSIDIARIES AND INVESTMENTS. ITM does not own any capital stock or
have any interest in any corporation, partnership or other form of business
organization.
4.04 FINANCIAL STATEMENTS. ITM has delivered to Salutations copies of
the financial statements contained in the Private Placement Memorandum dated
June 10, 1997, for the sale of up to 500,000 common shares of ITM (the "ITM
Financial Statements"). ITM believes the ITM Financial Statements present fairly
the financial conditions of ITM at the dates thereof.
4.05 NO UNDISCLOSED LIABILITIES. Other than as described in Exhibit 4.05
hereto, ITM is not subject to any material liability or obligation of any
nature, whether absolute, accrued, contingent, or otherwise and whether due or
to become due, which is not reflected or reserved against in the ITM Financial
Statements.
4.06 ABSENCE OF MATERIAL CHANGES. Except as described elsewhere in this
Agreement or on any Exhibit hereto, there has not been:
4.06(a) any material change in the condition (financial or
otherwise) of the properties, assets, liabilities or business of ITM
from that represented in the ITM Financial Statements, except changes in
the ordinary course of business which, individually and in the
aggregate, have not been materially adverse;
4.06(b) any redemption, purchase or other acquisition of any
shares of the capital stock of ITM, or any issuance of any shares of
capital stock or the granting, issuance or exercise of any rights,
warrants, options or commitments by ITM relating to its authorized or
issued capital stock; or
4.06(c) any change or amendment to the Articles of Incorporation
or Bylaws of ITM.
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4.07 LITIGATION. There is no litigation, proceeding or investigation
pending or to the knowledge of the ITM Warrantors, threatened against ITM
affecting any of its properties or assets, or, to the knowledge of the ITM
Warrantors against any officer, director, or stockholder of ITM that might
result, either in any case or in the aggregate, in any material adverse change
in the business, operations, affairs or condition of ITM or its properties or
assets, or that might call into question the validity of this Agreement, or any
action taken or to be taken pursuant hereto.
4.08 TITLE TO ASSETS. ITM has good and marketable title to all of its
assets and properties now carried on its books including those reflected in the
balance sheet contained in the ITM Financial Statements, free and clear of all
liens, claims, charges, security interests or other encumbrances, except as
described in the balance sheets included in the ITM Financial Statements or in
any Exhibit. All money raised pursuant to the current private placement of up to
500,000 ITM common shares shall belong to ITM and shall remain in ITM or used in
its usual course of business.
4.09 CONTRACTS AND UNDERTAKINGS. Each contract, agreement, lease,
license, arrangement, commitment and undertaking with respect to the business of
ITM is valid, binding and in full force and effect. ITM is not in material
default, or alleged to be in material default, under any contract, agreement,
lease, license, commitment, instrument or obligation and, to the knowledge of
the ITM Warrantors, no other party to any contract, agreement, lease, license,
commitment, instrument or obligation to which ITM is a party is in default
thereunder nor, to the knowledge of the ITM Warrantors, does there exist any
condition or event which, after notice or lapse of time or both, would
constitute a default by any party to any such contract, agreement, lease,
license, commitment, instrument or obligation.
4.10 TRANSACTIONS WITH AFFILIATES, DIRECTORS AND SHAREHOLDERS. Except as
set forth in Exhibit 4.10 hereto, there are and have been no contracts,
agreements, arrangements or other transactions between ITM, and any officer,
director, or stockholder of ITM, or any corporation or other entity controlled
by such persons or a member of the such person's families.
4.11 NO CONFLICT. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach of any term or provision of, or constitute a default under,
the Articles of Incorporation or Bylaws of ITM, or any agreement, contract or
instrument to which ITM is a party or by which it or any of its assets are
bound.
4.12 OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS. ITM owns or has valid
right or license to use all patents, patent rights, trade secrets, trademarks,
trademark rights, trade names, trade name rights, copyrights and other
intellectual property rights which are necessary to operate its business as now
operated and as now proposed to be operated.
4.12 DISCLOSURE. Neither this Agreement, the ITM Financial Statements
nor any other agreement, document, certificate or written or oral statement
furnished to the Salutations in connection with the transactions contemplated
hereby, contains any untrue statement
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of a material fact or when taken as a whole omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.
V. OBLIGATIONS OF SALUTATIONS
Salutations covenants and agrees with ITM that on or before the
Effective Date it shall:
5.01 APPROVAL. Obtain the approval of all transactions contemplated in
this Agreement from both its Board of Directors and its shareholders.
5.02 STOCK SPLIT. consummate the forward split of its common shares on a
2.5 for one basis.
5.03 ELECTIONS. Take all steps necessary to elect Xxxxxx X. Xxxxx and
Xxxxx Xxxxxxx as the members of the Board of Directors and as the officers of
Salutations and to obtain the resignations of the current officers and directors
of Salutations.
5.04 PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES. Refrain from
taking any action which would render any representation and/or warranty given by
Salutations from being accurate as of the Effective Date.
VI. OBLIGATIONS OF ITM
ITM hereby covenants and agrees with Salutations that:
6.01 CONDUCT OF BUSINESS. ITM will conduct its business and activities
diligently and in substantially the same manner as they previously have been
carried out.
6.02 APPROVAL. Obtain the approval of all transactions contemplated in
this Agreement from both its Board of Directors and each of its shareholders.
6.03 PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES. ITM will
refrain from taking any action which would render any representation and/or
warranty given by the ITM Warrantors contained in this Agreement from being
inaccurate as of the Effective Date.
VII. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
All representations, warranties and covenants contained herein shall
survive the consummation of the transactions contemplated herein and remain in
full force and effect.
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VIII. MISCELLANEOUS
8.01 FINDER'S FEES, INVESTMENT BANKING FEES. Neither Salutations nor ITM
have retained or used the services of any person, firm or corporation in such
manner as to require the payment of any compensation as a finder or a broker in
connection with the transactions contemplated herein.
8.02 TAX TREATMENT. The transaction contemplated hereby is intended to
qualify as a so-called "tax-free" reorganization under the provisions of Section
368 of the Internal Revenue Code. However, no tax opinion has been obtained
regarding tax implications of this reorganization.
8.03 FURTHER ASSURANCES. From time to time, at the other party's request
and without further consideration, each of the parties will execute and deliver
to the others such documents and take such action as the other party may
reasonably request in order to consummate more effectively the transactions
contemplated hereby.
8.04 PARTIES IN INTEREST. Except as otherwise expressly provided herein,
all the terms and provisions of this Agreement shall be binding upon, shall
inure to the benefit of and shall be enforceable by the respective heirs,
beneficiaries, personal and legal representatives, successors and assigns of the
parties hereto.
8.05 ENTIRE AGREEMENT: AMENDMENTS. This Agreement, including the
Exhibits and other documents and writings referred to herein or delivered
pursuant hereto, which form a part hereof, contains the entire understanding of
the parties with respect to its subject matter. There are no restrictions,
agreements, promises, warranties, covenants or undertakings other than those
expressly set forth herein or therein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to its subject
matter. This Agreement may be amended only by a written instrument duly executed
by the parties or their respective successors or assigns.
8.06 HEADINGS, ETC. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretations of this Agreement.
8.07 PRONOUNS. All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the persons, entity or entities may require.
8.08 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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8.9 ATTORNEY FEES. If legal action is ever needed for the purpose of
enforcing any provision of this Agreement, the prevailing party shall be entitle
to an award of reasonable attorney fees.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto as the date first above written.
SALUTATIONS, INC.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------
Xxxxxxx X. Xxxxxxx, President
INTERNATIONAL TRADING & MANUFACTURING CORPORATION
By: /s/ XXXXXX X. XXXXX
------------------------------------
Xxxxxx X. Xxxxx, President
/s/ XXXXXX X. XXXXX
---------------------------------------
Xxxxxx X. Xxxxx, Individual with respect
to Section 4 only
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SALUTATIONS, INC.
0000 XXXXXXXXX XXXX., XXXXX 000
XXXXXXX XXXXX, XX 00000
(000) 000-0000
July 3, 1997
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Salutations, Inc., a Nevada corporation
(the "corporation") to be voted at the Special Meeting of Shareholders to be
held on July 15, 1997, and any adjournment or adjournments thereof (hereinafter
the "Meeting" or the "Special Meeting of Shareholders"). Only shareholders of
record at the close of business on July 2, 1997 (the "Record Date"), are
entitled to notice of and to vote at the Meeting. This Proxy Statement and the
accompanying form of Proxy are being mailed to shareholders on or about July 3,
1997.
THE PROXY
All Proxies delivered pursuant to this solicitation are revocable at any
time at the option of the persons executing them by giving written notice to the
Secretary of the Company, by delivering a later proxy or by voting in person at
the Meeting. Proxies shall be voted in accordance with the directions of the
shareholders. Unless otherwise directed, proxies will be voted FOR each
proposal.
THE VOTING SHARES AND VOTE REQUIRED
The only securities of the Company entitled to vote at the Meeting are
its outstanding common shares which as of the Record Date totaled 406,500. Each
common share is entitled to one vote.
No business may be transacted unless a quorum of shareholders attends
the Meeting. A quorum is the presence in person or by proxy of the holders of a
majority of the shares entitled to vote at the Meeting. The proposals to forward
split the common shares of the corporation and to change the name of the
corporation will pass only upon the affirmative vote of a majority of the shares
issued and outstanding. All other proposals will pass upon the majority vote of
those in attendance at the meeting at which a quorum is present.
FORWARD SPLIT OF COMMON SHARES
As a pre-condition to the acquisition of 100% of the issued and
outstanding common shares of International Trading & Manufacturing Corporation,
a Nevada corporation ("ITM") discussed below (the "Acquisition"), it is
necessary that the corporation forward split its common shares on
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a 2.5 for one basis. The effect of the split on the current outstanding common
shares of the corporation is as follows: for every common share held prior to
the split, the shareholder will have 2.5 common shares following the split. The
split will not change the percentage interest that any particular shareholder
owns in the corporation. For example, if prior to the split a shareholder owns
10% of the outstanding shares of the corporation, then following the split, the
same shareholder will continue to own 10% of the total outstanding shares of
the corporation, though the actual number of shares will have increased.
The purpose of the forward split is to change the number of common
shares outstanding so that the Acquisition can be consummated in an efficient
manner. Management believes that the corporation and the market for the
corporation's common shares will be benefitted by consummating the Acquisition
at the higher level of shares outstanding.
The split will be put into effect by virtue of an amendment to the
Articles of Incorporation. Therefore, approval by the shareholders of the split
will constitute approval by the shareholders to amend the Articles of
Incorporation for the purpose of effecting the split.
Following the effective date of the split (the "Effective Date"), the
shareholders will be invited to mail their share certificates to the transfer
agent who will issue a new certificate to the applicable shareholder evidencing
ownership of shares in an amount equal to 2.5 times the number of the pre-split
amount. Certificates that are not returned and continue to be dated prior to the
Effective Date will be deemed to evidence ownership of shares in an amount which
is 2.5 times the number of shares indicated on such certificate.
ACQUISITION OF ITM
Purpose for the Acquisition
The corporation was formed for the purpose of marketing executive gifts,
crafts and greeting cards. The corporation successfully completed its public
offering in November, 1996. Because the corporation was unable to begin
marketing prior to the 1996 Christmas season, management felt it was not wise to
commence operations until it had a clear business objective.
Xxxxx Xxxxxxx had initially agreed to serve as secretary to the
corporation and to design and produce crafts to be marketed. Xx. Xxxxxxx, has
accepted a full time teaching position thereby limiting her availability to the
corporation. The corporation's objectives then became to narrow its focus to
the high margin areas of jewelry and collectibles. Sales in these areas are not
as seasonal as in cards and crafts. Management sought outside help to assist the
corporation in developing a strategy to grow a successful gift business.
The corporation began seeking wholesale suppliers and marketing
partners. Rather than expend its limited resources on a catalog and on
inventory, the Board of Directors, with the aid of outside consultants, have
identified that acquiring ITM will be an opportunity that the Board of Directors
believes will be in the long term best interest of the corporation.
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The Acquisition
It is proposed that following the forward split, the corporation will
issue shares of its common stock in exchange for all of the issued and
outstanding capital shares of ITM. Following the exchange, ITM will be a wholly
owned subsidiary of the corporation. The present terms and conditions of the
Acquisition will result in the present shareholders of the corporation owning
approximately 10% of the corporation following the Acquisition. In other words,
to vote in favor of the Acquisition, a shareholder must believe that it is in
the best interest of the corporation to transfer 90% of the corporation in order
to acquire the assets and business operations of ITM. The most recent financial
statement for the corporation is included to this Proxy Statement as Exhibit A.
The most recent financial statement for ITM is attached as Exhibit B.
Following the exchange, a new Board of Directors will be put in place
for the corporation, all of the members of which will be nominated by the
current management of ITM.
ITM
ITM manufactures and distributes gemstone jewelry in gold and sterling
silver. ITM also distributes clothing, collectibles and other products to
retailers and television shopping networks in the United States and Canada.
However, ITM's principal product is gemstone jewelry. The majority of ITM's
jewelry is manufactured under contract in Thailand and India.
ITM's products are marketed through television home shopping networks
such as Home Shopping Network and Canadian Home Shopping Network. Though still
in its infancy, the cable television home shopping industry has grown to sales
of $5.5 billion annually and continues to expand. Some industry leaders believe
that by the year 2000, annual sales will range between $20 billion and $100
billion. In connection with the growth of this marketing industry, ITM
management believes that its sales potential will also increase. ITM plans to
continue to focus on developing products and programs for its television home
shopping customers in order to capitalize on the industry's growth.
ITM also markets its products through retail organizations, including
Walmart and Fingerhut. In fact, ITM's customers include the top 30 jewelry
retailers in the nation. Dealing exclusively with large customers is more cost
effective than selling to numerous small retail jewelers. Expansion of ITM's
distribution outlets is expected to continue with both a domestic and
international focus.
Consumers shopping via catalogs, direct mail and infomercials is
expected to continue to grow in popularity and become more wide spread, since
time and convenience are important to today's consumer. According to Xxxxxxx
Market Research Bureau, more than 54% of the U.S. population ordered items by
the telephone or mail in 1990. Because of this, ITM has plans at the present
time to expand its marketing tools to include catalogs, direct mail and
infomercials.
ITM's operation is structured to keep operation costs as low as
possible. This provides ITM with a competitive edge over any retailers who
maintain expensive showrooms and offices with high overheads. ITM's expenditures
are directed more to the manufacture of its products.
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Since its inception, ITM has been in the forefront in bringing new
gemstones to the mass market. Gemstones now in the mass market include
tanzanite, tsavorite, fire opal, apatite and white sapphire. ITM has developed
proprietary expertise in producing calibrated gemstones which means gemstones
having the same size and color. The production of calibrated gemstones is an
important component of successful gemstone mass marketing.
ITM's business plan includes the expansion of its products through the
acquisition of complementary assets and/or business. ITM management believes
potential acquisition targets include competitors of ITM which produce and
distribute similar products as those distributed by ITM by mass marketing
through television shopping networks.
Risk Factors
Certain risk factors exist with respect to the Acquisition. ITM is a
fairly new company by most standards, is still developing, and has yet to
produce a profit over a sustained period of time. Following the Acquisition, the
corporation will be led by management new to the corporation and the present
shareholders of the corporation as a group will own a minority interest.
Accordingly, those who own the corporation prior to the Acquisition will have
little or no power to influence new management. There can be no assurance that
following the Acquisition, the corporation will succeed financially.
The Acquisition also must comply with various tax and securities laws.
No tax rulings or legal opinions have been obtained with respect to these
matters. No assurance can be given that the structure of the Acquisition as a
tax free exchange and as an exchange exempt from the registration requirements
of the Securities Act of 1933 will go unchallenged by applicable governmental or
other authorities.
NAME CHANGE
The Board of Directors is recommending that the corporation enter into
and consummate the Acquisition. Upon the consummation of the Acquisition, the
principal business of the corporation would be the manufacture and distribution
of products that currently constitute the business operations of ITM.
It is the recommendation of the corporation's Board of Directors that it
is in the best interest of the corporation to change its name to International
Trading & Manufacturing Corporation (ITM) in contemplation of the Acquisition.
ITM has established its name to some extent and is recognized in its industry.
Accordingly, the Board of Directors deems that it would be advantageous to the
corporation to capitalize upon the goodwill established in the name
"International Trading & Manufacturing Corporation" by using the name to the
fullest extent possible including changing the name of the corporation to
International Trading & Manufacturing Corporation. Conversely, the corporation
will lose the goodwill associated with the name Salutations, Inc., which in all
likelihood is negligible since the corporation had only recently commenced
business operations under that name.
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In order to change the name of the corporation, it is necessary to amend
the corporation's Articles of Incorporation, which Articles would then reflect
the new name and would be duly filed and of record in appropriate government
offices in the State of Nevada. Approval of the name change by the shareholders
shall constitute the approval to amend the Articles of Incorporation for such
purpose.
Dated: July 3, 1997
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EXHIBIT A
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[LOGO] 26TH Place
0000 Xxxx Xxxxxx Xxxx PH: 000-000-0000
XXXXXX AND CO. P.L.L.C. Suite 110 FAX: 000-000-0000
CERTIFIED PUBLIC ACCOUNTANTS Xxxxxxx, XX 00000 E-MAIL: XXXXXXXXXX@XXX.XXX
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INDEPENDENT AUDITOR'S REPORT
Board of Directors
Salutations, Inc.
Xxx Xxxxx, XX 00000
We have audited the accompanying balance sheet of Salutations, Inc. as
of December 31, 1996, and the related statement of operations,
stockholders' equity and cash flows for the period then ended. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
of the financial statements provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above presents
fairly, in all material respects, the financial position of Salutations,
Inc. as of December 31, 1996, and the results of its operations and its
cash flows for the period then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is a Development Stage Company as
defined in Financial Accounting Standards Board Statement No. 7. The
Company is devoting substantially all of its present efforts in
establishing a new business and its planned principal operations have
not commenced and, accordingly, no revenue has been derived therefrom.
These factors raise substantial doubt about its ability to continue as a
going concern. The company's ability to continue as a going concern is
dependent upon a successful public offering or other alternative
financing and its ability to attain profitable operations. The financial
statement does not include any adjustments that might result from the
outcome of this uncertainty.
/s/ XXXXXX AND CO.
-------------------------------
Xxxxxx and Co. P.L.L.C.
Phoenix, Arizona
May 23, 1997
-1-
17
SALUTATIONS, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1996
ASSETS
Current Assets
Cash in Bank $28,387
Total Current Assets $28,387
Other Assets
Organization Costs - Net of Amortization 280
-------
Total Other Assets 280
-------
Total Assets $28,667
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities NONE
Stockholders' Equity
Common Stock, $.001 Par Value
25,000,000 Shares Authorized;
406,500 Issued and Outstanding
At December 31, 1996 407
Additional Paid In Capital 34,770
Deficit Accumulated During the Development Stage (6,510)
-------
Total Stockholders' Equity 28,667
-------
Total Liabilities and Stockholders' Equity $28,667
=======
The accompanying notes are an integral part of these financial statements.
-2-
18
SALUTATIONS, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (JANUARY 8, 1996)
THROUGH DECEMBER 31, 1996
Deficit
For The Accumulated
Period During The
January 8, Development
1996 Stage
Through Through
December December
31, 1996 31, 1996
---------- ----------
Revenue $ 0 $ 0
Expenses
General and
Administrative 6,510 6,510
------- --------
Total Expenses 6,510 6,510
------- --------
Net (Loss) $(6,510) $ (6,510)
======= ========
Net (Loss) Per Share $ (0.02) $ (0.02)
======= ========
The accompanying notes are an integral part of these financial statements.
-3-
19
SALUTATIONS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
DECEMBER 31,1996 AND FROM INCEPTION
(JANUARY 8,1996) THROUGH DECEMBER 31,1996
Deficit
Accumulated
Additional During The
Common Stock Paid-In Development
Shares Amount Capital Stage Total
------- ------ ---------- ----------- -------
Issuance of
Common Stock For Cash
on June 5, 1996 200,000 $200 $ 5,800 $ 6,000
Issuance of
Common Stock for Cash
in Connection with
a 504D Offering
Memorandum 206,500 207 30,769 30,976
Cost of Offering (1,799) (1,799)
Loss Year Ended
December 31, 1996 (6,510) (6,510)
------- ---- ------- ------- -------
Balance -
December 31, 1996 406,500 $407 $34,770 $(6,510) $28,667
======= ==== ======= ======= =======
The accompanying notes are an integral part of these financial statements.
-4-
20
SALUTATIONS, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (JANUARY 8,1996)
THROUGH THE YEAR ENDED DECEMBER 31,1996
For The Deficit
Period Accumulated
January 8, During The
1996 Development
Through Period
December December
31,1996 31,1996
Cash Flows from Operating Activities
Net Loss $ (6,510) $ (6,510)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operating Activities
Amortization 70 70
Changes in Operating Assets and Liabilities
(Increase) Decrease in Organization Cost (350) (350)
-------- --------
Total Adjustments (280) (280)
-------- --------
Net Cash Provided by Operating Activities (6,790) (6,790)
Cash Flows from Investing Activities 0 0
Cash Flows from Financing Activities
Proceeds from sale of Common Stock 35,177 35,177
-------- --------
Net Cash provided by Financing Activities 35,177 35,177
-------- --------
Increase (Decrease) in Cash and Cash Equivalents 28,387 28,387
Cash and Cash Equivalents Beginning of Period 0 0
-------- --------
Cash and Cash Equivalents End of Period $ 28,387 $ 28,387
======== ========
Supplemental Information
Cash Paid For:
Interest 0 $ 0
======== ========
Income Taxes $ 0 $ 0
======== ========
The accompanying notes are an integral part of these financial statements.
-5-
21
SALUTATIONS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31,1996
NOTE I - ORGANIZATION
Salutations, Inc. (The Company) was incorporated under the laws of the
State of Nevada on January 8, 1996 with an authorized capital of
25,000,000 shares of common stock with a par value of one mil ($.001)
per share.
On June 5, 1996, the Company issued 200,000 shares of common stock for
$6,000 cash.
On November 14, 1996, the Company issued 206,500 shares of common stock
for cash at $0.15 per share or $30,976, less offering cost of $1,799, or
a net of $29,177.
The Company is a development stage company, as defined in Financial
Accounting Standards Board No. 7. The Company is devoting substantially
all of its present efforts in securing and establishing a new business,
and its planned principal operations have not commenced and,
accordingly, no revenue has been derived therefrom. In addition, the
Company does not presently have adequate financing to carry out its
business plan. These factors raise substantial doubt about its ability
to continue as a going concern.
The financial statement has been prepared on the basis of accounting
principles applicable to a going concern. Accordingly, they do not
purport to give effect to adjustments, if any, that may be necessary
should the Company be unable to continue as a going concern. The
continuation of the Company as a going concern, is dependent upon a
successful public offering or other alternative financing and its
ability to establish itself as a profitable business. The Company's
ability to achieve these objectives cannot be determined at this time.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
A. Accounting Method
The Company's financial statements are prepared using the accrual method
of accounting.
B. Organization Costs
Cost incurred in organizing the Company is being amortized over a sixty
month period.
C. Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with a maturity
of three months or less to be cash and cash equivalents.
-6-
22
SALUTATIONS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31,1996
D. Income or Loss Per Share
The computations of income or loss per share of common stock are based
on the weighted average number of shares outstanding at the date of the
financial statements.
-7-
23
EXHIBIT B
24
International Trading & Manufacturing Corporation
Balance Sheets
December 31, 1996 and 1995
(Unaudited)
ASSETS 1996 1995
----------- -----------
Current assets
Cash $ 50,484 $ 152
Accounts receivable 2,057,410 735,606
Inventory 118,000 33,500
Other current assets 19,756 --
----------- -----------
Total current assets 2,245,650 769,258
Furniture and equipment,
net of accumulated depression 9,306 7,714
Other assets 12,227 18,946
----------- -----------
$ 2,267,183 $ 795,918
=========== ===========
LIABILITIES AND SHAREHOLDER'S
DEFICIENCY
Current liabilities:
Cash overdraft -- $ 11,275
Accounts payable $ 2,053,489 606,922
Accrued interest 71,265 --
----------- -----------
Total current liabilities 2,124,754 618,197
Note payable to affiliate 353,989 357,967
----------- -----------
2,478,743 976,164
----------- -----------
Shareholder's deficiency:
Common stock 5,000 5,000
Additional paid in capital 2,700 1,700
Deficit (219,260) (186,946)
----------- -----------
(211,560) (180,246)
----------- -----------
$ 2,267,183 $ 795,918
=========== ===========
25
International Trading & Manufacturing Corporation
Statements of Operations
December 31, 1996 and 1995
(Unaudited)
1996 1995
---------- ----------
Net sales $4,428,634 $3,028,818
Cost of goods sold 3,876,172 2,568,223
---------- ----------
552,462 460,595
Selling, general and administrative expense 513,458 308,572
---------- ----------
Operating income 39,004 152,023
Interest expense 36,060 36,598
---------- ----------
Net income $ 2,944 $ 115,425
========== ==========
26
June 9, 1997
International Trading & Manufacturing Corporation
P. O. Xxx 0000
Xxx Xxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, President
Re: Letter of Intent for Exchange of Shares
Dear Xx. Xxxxx:
This letter will confirm the following general terms and conditions
whereby, through an exchange of shares (among other things), ITM, as hereinafter
defined, will become a wholly-owned subsidiary of SI, as hereinafter defined.
DEFINITIONS
The following terms when used herein, shall have the following meanings:
"SI" shall mean Salutations, Inc., a corporation in good
standing, organized and operating under the laws of the State of Nevada.
"ITM" shall mean International Trading & Manufacturing
Corporation, a corporation in good standing, organized and operating
under the laws of the State of Nevada.
"SI SHARES" shall mean common voting shares of SI having a par
value of $0.001. It is expressly contemplated and understood by the
parties that SI Shares are the only securities with respect to SI which
are authorized, issued and/or outstanding.
"ITM SHARES" shall mean common voting shares of ITM having a par
value of $0.001. It is expressly contemplated and understood by the
parties that ITM Shares are the only securities with respect to ITM
which are authorized, issued and/or outstanding.
"FORWARD SPLIT" shall mean a forward split of the SI Shares on a
2.5 for one basis. Following the Forward Split, all SI Shares shall
total 516,250 shares.
"PRE-SPLIT SI SHARES" shall mean SI Shares without giving effect
to the Forward Split.
1
27
"POST-SPLIT SI SHARES" shall mean SI Shares after giving effect
to the Forward Split.
"PARTIES" shall mean SI and ITM.
"PLAN" shall mean an Agreement and Plan of Reorganization
negotiated by and between the Parties. The Plan shall be negotiated in
good faith and shall contain all of the representations, warranties and
other terms and conditions common to transactions contemplated by this
Letter of Intent.
"EFFECTIVE DATE" shall mean the date and time set forth in the
Plan when all of the transactions contemplated under the Plan shall be
completed and consummated.
INTENT OF THE PARTIES
The Parties hereby express it as their specific intent that the Boards
of Directors of SI and ITM will negotiate and enter into a Plan, which shall
contain the following provisions:
1. Prior to the Closing, the shareholders of the Parties shall
approve the Plan. The shareholders of SI shall also specifically
approve the Forward Split.
2. On the Effective Date, SI Shares issued and outstanding shall
total 516,250 which shall all be Post-split SI Shares.
3. On the Effective Date, ITM Shares issued and outstanding
shall total 4,700,000 shares plus any shares sold by the Effective Date
pursuant to the private placement of up to 500,000 shares of ITM.
4. On the Effective Date or as soon thereafter as is
practicable, SI shall issue Post-split SI Shares to the shareholders of
ITM in exchange for the transfer and delivery to SI of all of the issued
and outstanding ITM Shares existing on the Effective date. All SI Shares
issued shall be "unregistered" and "restricted" shares and shall be
issued in accordance with and subject to applicable laws, rules and
regulations, and, when issued for the consideration indicated, shall be
deemed fully paid and nonassessable. The exchange is intended to be a
tax-free reorganization under Section 368(a)(1)(B) of the internal
Revenue Code.
ITM hereby represents that it has the agreement of each of its
shareholders (as well as purchasers of ITM Shares through the private placement
described above) that each such shareholder will be subject and bound by the
Plan as outlined in this Letter of Intent.
In the event the Plan is not successfully negotiated and entered into on
or before July 31, 1997, at the option of either Party, the agreements in this
Letter of Intent may be terminated with
2
28
each Party to bear its own costs.
The Plan shall be executed as soon as practicable and SI shall instruct
its legal counsel to immediately prepare all necessary documentation upon the
execution of this Letter of Intent.
If the foregoing correctly sets forth the substance of the understanding
of the Parties, please execute this Letter of Intent in duplicate, retain one
copy for your records, and return one copy to Xxxx X. Xxxxxx, to his address at
000 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000. In addition, upon
signing this Letter of Intent, please send one signed copy by facsimile
transmission to 000-000-0000.
Very truly yours,
SALUTATIONS, INC.
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxxx, President
Accepted and Agreed this 9th day
of June, 1997.
INTERNATIONAL TRADING &
MANUFACTURING CORPORATION
By: /s/ XXXXXX X. XXXXX
-------------------------------
Xxxxxx X. Xxxxx, President
3
29
LETTER OF CONSENT TO USE NAME
INTERNATIONAL TRADING & MANUFACTURING CORPORATION
X.X. Xxx 0000
Xxx Xxx, XX 00000-0000
July 15, 0000
Xxxxxxxxx xx Xxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxx, Xxxxxx 00000
Re: International Trading & Manufacturing Corporation,
a Nevada corporation, (the "Corporation").
To Whom It May Concern:
I, the undersigned, am the President of the Corporation. I have entered
into an agreement (the "Agreement") in behalf of the Corporation, whereby the
Corporation will become a 100% owned subsidiary of Salutations, Inc., a Nevada
corporation ("Salutations"). A part of the Agreement is that Salutations will
change its name to International Trading & Manufacturing Corporation, which name
is the current name of the Corporation.
Please accept this letter as your authorization from the Corporation to
change the name of Salutations to International Trading & Manufacturing
Corporation.
If you have any questions, please call Xxxx X. Xxxxxx, at (801)
355-2886. Thank you for your assistance.
INTERNATIONAL TRADING &
MANUFACTURING CORPORATION, a Nevada
corporation
By: /s/ XXXXXX X. XXXXX
-------------------------------------
Xxxxxx X. Xxxxx, President
This Letter of Consent was acknowledged before me on July 15, 1997, by Xxxxxx X.
Xxxxx as the President of International Trading & Manufacturing Corporation.
[SEAL]
/s/ XXXXXXXX XXXXXX
-----------------------------------------
Notary Public
30
WRITTEN CONSENT IN LIEU OF A MEETING
OF
THE BOARD OF DIRECTORS
OF
SALUTATIONS, INC.
The following resolutions were unanimously passed by the Board of Directors of
Salutations, Inc.
RESOLVED: That the Company accept the resignation of Xxxxx Xxxxxxx as
Secretary/Treasurer of Salutations, Inc. effect immediately.
FURTHER RESOLVED: That the position of Secretary/Treasurer be filled by
Xxxxxxx X. Xxxxxxx until a suitable replacement can be found.
FURTHER RESOLVED: That the Company pay Xx. Xxxxxxx $500.00 as
compensation for her services as an officer and director.
FURTHER RESOLVED: That the Company retain the services of Xxxxxxx X.
Xxxxx as an outside consultant to assist the Company in it's attempt to
grow through either acquisition or additional financing.
FURTHER RESOLVED: That the Board of Directors is authorized to pay Xx.
Xxxxx up to $5,000 upon the Boards agreement to pursue any such proposal
as he introduces.
FURTHER RESOLVED: The Board of Directors approve a payment of $1,000 to
Xxx Xxxx for services he performed in reviewing the due diligence
package for submission to the National Association of Securities Dealers
member.
By affixing their signatures hereto, the Officers and Directors of Salutations,
Inc. unanimously agree to these resolutions and further agree to waive notice of
time, place and purpose of a meeting of the Board of Directors.
DATED this the 6th day of June, 1997.
/s/ XXXXXXX X. XXXXXXX /s/ XXXXX XXXXXXX
---------------------------------- ------------------------------------
XXXXXXX X. XXXXXXX XXXXX XXXXXXX
31
RESIGNATION
I, Xxxxxxx X. Xxxxxxx, hereby resign the positions of being an officer
and director of Salutations, Inc., a Nevada corporation. This resignation shall
be effective immediately.
Dated this 15th day of July, 1997.
/s/ XXXXXXX X. XXXXXXX
------------------------------------
Xxxxxxx X. Xxxxxxx
32
UNANIMOUS CONSENT OF THE BOARD OF DIRECTORS
OF
SALUTATIONS, INC.
The undersigned, being the sole member of the Board of Directors of
Salutations, Inc., a Nevada corporation (the "Company"), and pursuant to the
general corporation laws of the State of Nevada, hereby takes the following
action:
WHEREAS, the number of members constituting the entire Board of
Directors of the Company is two;
WHEREAS, Xxxxxxx X. Xxxxxxx has resigned his position as a member of the
Board of Directors leaving his position vacant;
NOW, THEREFORE, BE IT RESOLVED that Xxxxx Xxxxxxx is hereby appointed to
fill the vacancy existing in the Board of Directors.
DATED effective the date signed below.
/s/ XXXXXX X. XXXXX
DATE: July 15, 1997 ------------------------------------
Xxxxxx X. Xxxxx, Member of the Board
33
SALUTATIONS, INC. (NOW KNOW AS)
INTERNATIONAL TRADING & MANUFACTURING CORPORATION
P. X. Xxx 0000
Xxx Xxx, XX 00000-0000
July 15, 1997
Pacific Stock Transfer Company
P. O. Xxx 00000
Xxx Xxxxx, Xxxxxx 00000
Re: Salutations, Inc., nka International Trading & Manufacturing
Corporation
To Whom It May Concern:
At a meeting of the Board of Directors held on July 15, 1997, our Board
decided to conclude our relationship with your firm as transfer agent and
registrar for the capital stock of Salutations, Inc., nka International Trading
& Manufacturing Corporation, effective as of the close of business on July 15,
1997. The Board is appreciative of the manner in which your firm has performed
its duties as our transfer agent over the years.
The Board felt that this was a propitious time, which was dictated by a
business decision, to effect this change in transfer agents.
Effective July 16, 1997, we are appointing Interwest Transfer Co., Inc.,
of Salt Lake City, Utah as our new transfer agent and registrar.
You are hereby authorized to work with Xx. Xxxxxx Xxxxxx of Interwest
Transfer Co., Inc. in making the transition and accepting instructions on our
behalf from him. The specific items that they will require are as follows:
1. A list of the outstanding shares certified to be correct as of the
close of business on July 15, 1997. The list should include the name and
address of each shareholder and list each outstanding certificate held
by each stockholder listing certificate number, number of shares and
date the certificate was issued.
2. A list of stop transfer orders, if any, with respect to any
certificates, together with a list of any unregistered or control shares
outstanding. The list should contain name, certificate number, shares
and reason for the stop order.
3. Active stop files.
4. Unclaimed property schedule and records.
34
5. Canceled stock certificates.
You are hereby further authorized to release the supply of blank stock
certificates in your possession, if any to Interwest Transfer Co., Inc. for
over-printing whereby your name as transfer agent and registrar will be blanked
out. Please advise Xxxxxx Xxxxxx when these certificates are ready to be picked
up.
Again, thank you for your past assistance and cooperation. Please let me
know should you need any additional information and/or authorization from me.
You may send your final xxxx to my attention.
Very truly yours.
/s/ XXXXXX X. XXXXX
------------------------------
Xxxxxx X. Xxxxx
President
c: Interwest Transfer Co., Inc.
0000 Xxxx 0000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
(000) 000-0000
35
UNANIMOUS CONSENT OF THE BOARD OF DIRECTORS
OF
INTERNATIONAL TRADING & MANUFACTURING CORPORATION
The undersigned, constituting all of the members of the Board of
Directors of International Trading & Manufacturing Corporation, a Nevada
corporation (the "Company"), and pursuant to the general corporation laws of the
State of Nevada, hereby take the following action:
WHEREAS, it is deemed to be in the best interest of the Company to enter
into a reorganization with Salutations, Inc., a Nevada corporation
("Salutations") pursuant to the terms and conditions of the Agreement in
the form attached hereto;
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors approves the
reorganization with Salutations and calls for the shareholders of the
Company to review, consider, and to vote upon the proposal to consummate
said reorganization.
DATED effective the date signed below.
/s/ XXXXXX X. XXXXX
DATE: July 9, 1997 ------------------------------------
/s/ XXXXX XXXXXXX
------------------------------------
36
MAJORITY CONSENT OF THE SHAREHOLDERS
OF
INTERNATIONAL TRADING & MANUFACTURING CORPORATION
The undersigned, constituting holders of over 50% of the voting common
shares of International Trading & Manufacturing Corporation, a Nevada
corporation (the "Company"), and pursuant to the general corporation laws of the
State of Nevada, hereby take the following action:
WHEREAS, the Board of Directors deems it to be in the best interest of
the Company to enter into a reorganization with Salutations, Inc., a
Nevada corporation ("Salutations") pursuant to the terms and conditions
of the Agreement in the form attached hereto (the "Reorganization"); and
WHEREAS, the Board of Directors has called on the shareholders to
review, consider, and to vote upon the proposal to consummate said
reorganization;
NOW, THEREFORE, BE IT RESOLVED that the shareholders hereby approve the
Reorganization and authorize and direct the officers of the Company to
enter into the Agreement and to take any and all other actions either
necessary and/or convenient for the purpose of consummating the
Reorganization.
DATED effective July 9, 1997.
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
37
CERTIFICATE OF PASSAGE OF RESOLUTION APPOINTING
TRANSFER AGENT
RESOLVED: That Interwest Transfer Co., Inc., a corporation organized and
existing under and by virtue of the laws of the State of Utah, with offices at
1981 East 4800 South, Ste. 100, Salt Lake City, Utah, be and is hereby appointed
transfer agent of this Corporation, and that all accredited officers of said
Interwest Transfer Co., Inc., each of them is hereby authorized, designated and
accepted to act for and on behalf of this Corporation as Vice President and
Assistant Secretaries with power only to sign stock certificates in either
capacity; and be it further
RESOLVED: That this Corporation hereby does relieve the said transfer agent and
its officers and representatives of all liability for all acts and things done
and performed by said transfer agent and its officers and agents under orders
of any officer or agent and/or representative of this Corporation, and hereby
does assume full responsibility for all such acts and things done; and be it
further
RESOLVED: That said transfer agent be, and is hereby authorized to use its own
judgement in matters effecting its duties as such agent; and in its discretion
to apply to and to act upon instructions of its own counsel or of the counsel
of this Corporation in respect to any question arising in connection with such
agency, all legal fees to be at the expense of this Corporation, and said
transfer agent is hereby relieved of any responsibility to this Corporation,
and indemnified by this Corporation as to any responsibility to third persons,
for action taken in accordance with advice of such counsel or its own
judgement. Remaining liable only for its own willful default or misconduct; and
be it further
RESOLVED: That this corporation shall, and hereby does, indemnify, protect and
hold said transfer agent harmless for any act, omission, delay, or refusal made
by it in reliance upon any stock certificate or other instrument issued by this
Corporation believed by said agent in good faith to be valid, genuine and
sufficient, and in effecting any transfer believed by it in good faith to be
duly authorized, said transfer to retain liability in such respects only for
its own willful misconduct; and be it further
RESOLVED: That said transfer agent shall be without liability to this
Corporation, and is hereby indemnified from any liability to third persons from
said agent's refusal to perform any act in connection with this agency where,
in reliance upon opinion of its counsel, said agent in good faith believes that
such act may subject it or its officers or employees to criminal liability or
injunctive sanctions under any law of any state or of the United States and,
under the Securities Act of 1933.
STATE OF CALIFORNIA
COUNTY OF ORANGE
Xxxxxx X. Xxxxx Xx., being duly sworn deposes and says that he is
Secretary of Int. Trading, a corporation organized and existing under the laws
of the State of Nevada, and having its principal place of business in Solana
Beach at California; that he has custody of the books of said corporation, and
that the foregoing is a full, true and correct copy of the Resolution adopted
at a meeting of the board of Directors of said corporation held on the 15th day
of July 1997, at Solana Beach.
WITNESS MY HAND AND SEAL OF THE CORPORATION THIS ___ DAY OF
__________________, 19__.
/s/ XXXXXX XXXXX
----------------------------------------
SECRETARY
Subscribed and sworn to before me this 15 day of July, 1997.
/s/ XXXXXXXX XXXXXX
----------------------------------------
NOTARY PUBLIC
[SEAL]
38
UNANIMOUS CONSENT OF THE BOARD OF DIRECTORS
OF
SALUTATIONS, INC.
The undersigned, being the sole member of the Board of Directors of
Salutations, Inc., a Nevada corporation (the "Company"), and pursuant to the
general corporation laws of the State of Nevada, hereby takes the following
action:
WHEREAS, the number of members constituting the entire Board of
Directors of the Company is two;
WHEREAS, Xxxxx Xxxxxxx recently resigned her position as a member of the
Board of Directors leaving her position vacant;
NOW, THEREFORE, BE IT RESOLVED that Xxxxxx X. Xxxxx is hereby appointed
to fill the vacancy existing in the Board of Directors.
DATED effective the date signed below.
/s/ XXXXXXX X. XXXXXXX
DATE: July 15, 1997 ------------------------------------
Xxxxxxx X. Xxxxxxx, Member of
the Board
39
UNANIMOUS CONSENT OF THE BOARD OF DIRECTORS
OF
SALUTATIONS, INC.
The undersigned, being the sole member of the Board of Directors of
Salutations, Inc., a Nevada corporation (the "Company"), and pursuant to the
general corporation laws of the State of Nevada, hereby takes the following
action:
WHEREAS, it is deemed to be in the best interest of the Company to enter
into a reorganization with International Trading & Manufacturing
Corporation ("ITM") pursuant to the terms and conditions of the
Agreement in the form attached hereto;
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors approves the
reorganization with ITM and calls for a special meeting of the
shareholders of the Company to vote upon the proposal to consummate said
reorganization.
DATED effective the date signed below.
/s/ XXXXXXX X. XXXXXXX
DATE: July 9, 1997 ------------------------------------
Xxxxxxx X. Xxxxxxx, Member of
the Board
40
UNANIMOUS CONSENT OF THE BOARD OF DIRECTORS
OF
SALUTATIONS, INC.
The undersigned, being the sole member of the Board of Directors of
Salutations, Inc., a Nevada corporation (the "Company"), and pursuant to the
general corporation laws of the State of Nevada, hereby takes the following
action:
WHEREAS, it is deemed to be in the best interest of the Company to enter
into a reorganization with International Trading & Manufacturing
Corporation ("ITM");
WHEREAS, it is necessary to redeem 200,000 shares of stock of the
Company in order to enter into the reorganization;
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors approves the
redemption and cancellation of 200,000 shares of the Corporation
evidenced by Certificate number I held in the name of Xxxxxxx X Xxxxxxx.
DATED effective the date signed below.
/s/ XXXXXXX X. XXXXXXX
DATE: July 9, 1997 ---------------------------------------
Xxxxxxx X. Xxxxxxx, Member of the Board
