ACQUISITION AGREEMENT
BETWEEN
CYBERAMERICA CORPORATION
AND
INNOVATIVE PROPERTY DEVELOPMENT CORP.
ACQUISITION AGREEMENT
TABLE OF CONTENTS
Purchase and Sale.............................................................2
Purchase Price................................................................2
Warranties and Representations of CYAA and Sellers............................2
Warranties and Representations of IPD.........................................5
Term..........................................................................8
The IPD Shares................................................................8
Conditions Precedent to Closing...............................................8
Termination...................................................................9
Exhibits.....................................................................10
Miscellaneous Provisions.....................................................10
Closing......................................................................10
Post-Closing: Form 10 or Form 10-SB..........................................10
Governing Law................................................................10
Counterparts.................................................................10
1
ACQUISITION AGREEMENT
---------------------
THIS ACQUISITION AGREEMENT dated October 30, 1998, by, between and
among Innovative Property Development Corp, a Utah corporation ("IPD"), and
CyberAmerica Corporation, a Nevada Corporation ("CYAA").
WHEREAS, CYAA owns an interest in several corporations through its
holdings in the common stock of such corporations, several are 100% owned by
CYAA and in others a less than 100% interest is held; and
WHEREAS, CYAA desires to sell and IPD desires to purchase one hundred
(100%) percent of such shares;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:
I. Purchase and Sale. The Sellers hereby agree to sell, transfer, assign
and convey to IPD and IPD hereby agrees to purchase and acquire from
the Sellers, one hundred (100%) percent of CYAA's issued and
outstanding common stock in each of the named corporations set forth in
Exhibit "A" as attached hereto (the "CYAA Common Shares"), in a
reorganization that is intended to be a tax-free exchange of shares of
stock.
II. Purchase Price. The aggregate purchase price to be paid by IPD for the
CYAA Common Shares shall be 1,382,528 shares of IPD voting common
stock, (the "IPD Common Shares"). The IPD Common Shares will be issued
to the individual Shareholders of CYAA as of the stated record date in
accordance with Exhibit "B" attached hereto. No fractional shares of
IPD Common Stock will be issued; in lieu thereof, the number of shares
of IPD Common Stock to be issued to each Seller will be rounded up to
the next whole share.
III. Warranties and Representations of CYAA and Sellers. In order to induce
IPD to enter into the Agreement and to complete the transaction
contemplated hereby, CYAA warrants and represents to IPD that:
A. Organization and Standing. CYAA is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Nevada, is qualified to do business as a
foreign corporation in every other state or jurisdiction in
which it operates to the extent required by the laws of such
states and jurisdictions, and has full power and authority to
carry on its business as now conducted and to own and operate
its assets, properties and business. Attached hereto as
Exhibit "C" are true and correct copies of CYAA's Certificate
of Incorporation, amendments thereto and all current By laws
of CYAA. No changes thereto will be made in any of the Exhibit
"C" documents before the Closing.
B. Capitalization. As of the November 1, 1998, CYAA's entire
authorized equity capital consists of 20,000,000 shares of
Common Stock, of which 2,832,064 shares of Common Stock were
outstanding. As of the Closing Date, there will be no other
2
voting or equity securities authorized or issued, nor any
authorized or issued securities convertible into voting stock,
and no outstanding subscriptions, warrants, calls, options,
rights, commitments or agreements by which any of the Sellers
are bound, calling for the issuance of any additional shares
of common stock or any other voting or equity security. The
CYAA Common Shares constitute one hundred (100%) percent of
the equity capital of CYAA in each of the corporations listed
on Exhibit "A", which includes, inter alia, one hundred (100%)
percent of CYAA's voting power, right to receive dividends,
when, as and if declared and paid, and the right to receive
the proceeds of liquidation attributable to common stock, if
any.
C. Ownership of the CYAA Shares As of the Date hereof, the
Sellers are the sole owners of the CYAA Common Shares, free
and clear of all liens, encumbrances and restrictions of any
nature whatsoever, except by reason of the fact that the CYAA
Common Shares will not have been registered under the `'33
Act, or any applicable State Securities laws.
D. Taxes. CYAA has filed all federal, state and local income or
other tax returns and reports that it is required to file with
all governmental agencies, wherever situate, and has paid or
accrued for payment all taxes as shown on such returns, such
that a failure to file, pay or accrue will not have a material
adverse effect on CYAA or the corporations listed in Exhibit
A.
E. Pending Actions. There are no material legal actions,
lawsuits, proceedings or investigations, either administrative
or judicial, pending or threatened, against or affecting CYAA
and the corporations that are the subject of this agreement as
listed in Exhibit A, or that arise out of the operation of
those corporations, except as described in Exhibit "D"
attached hereto. CYAA is not in violation of any law, material
ordinance or regulation of any kind whatever, including, but
not limited to laws, rules and regulations governing the sale
of its products, the `33 Act, the Securities Exchange Act of
1934, as amended (the "34 Act") the Rules and Regulations of
the U.S. Securities and Exchange Commission ("SEC"), or the
Securities Laws and Regulations of any state.
F. Governmental Regulation. CYAA holds the licenses and
registrations set forth on Exhibit "E" hereto from the
jurisdictions set forth therein, which licenses and
registrations are all of the licenses and registrations
necessary to permit CYAA to conduct its current business. All
of such licenses and registrations are in full force and
effect, and there are no proceedings, hearings or other
actions pending that may affect the validity or continuation
of any of them. No approval of any other trade or professional
association or agency of government other than as set forth on
Exhibit "E" is required for any of the transactions effected
by this Agreement, and the completion of the transactions
contemplated by the Agreement will not, in and of themselves,
affect or jeopardize the validity or continuation of any of
them.
3
G. Ownership of Assets. Except as set forth in Exhibit "F", CYAA
has good, marketable title, without any liens or encumbrances
of any nature whatever, to all of the shares listed in Exhibit
A.
H. No Interest in Suppliers, Customers, Landlords or Competitors.
Neither the Shareholders nor any member of their families have
any interest of any nature whatever in any supplier, customer,
landlord or competitor of CYAA.
I. No Debt Owed by CYAA to Shareholders. Except as set forth in
Exhibit "G" CYAA does not owe any money, securities, or
property to either the Shareholders or any member of the
families or to any company controlled by such a person,
directly or indirectly. To the extent that CYAA may have any
undisclosed liability to pay any sum or property to any such
person or entity or any member of their families such
liability is hereby forever irrevocably released and
discharged.
J. Corporate Records. All of CYAA's books and records, including,
without limitation, its books of account, corporate records,
minute book, stock certificate books and other records of CYAA
are up-to-date, complete and reflect accurately and fairly the
conduct of its business in all material respects since its
date of incorporation.
K. No Misleading Statements or Omissions. Neither the Agreement
nor any financial statement, exhibit, schedule or document
attached hereto or presented to IPD in connection herewith,
contains any materially misleading statement, or omits any
fact or statement necessary to make the other statements or
facts therein set forth not materially misleading.
L. Validity of the Agreement. All corporate and other proceedings
required to be taken by CYAA in order to enter into and to
carry out the Agreement have been duly and properly taken. The
Agreement has been duly executed by CYAA, and constitutes the
valid and binding obligation of CYAA, except to the extent
limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws relating to or affecting generally
the enforcement of creditors rights. The execution and
delivery of the Agreement and the carrying out of its purposes
will not result in the breach of any of the terms or
conditions of, or constitute a default under or violate CYAA's
Certificate of Incorporation or document of undertaking, oral
or written, to which CYAA is a party or is bound or may be
affected, nor will such execution, delivery and carrying out
violate any order, writ, injunction, decree, law, rule or
regulation of any court, regulatory agency or other
governmental body; and the business now conducted by CYAA
and/or those corporations listed in Exhibit A can continue to
be so conducted after completion of the transaction
contemplated hereby.
M. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid,
4
and enforceable by IPD according to their terms, except to the
extent limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws relating to or affecting
generally the enforcement of creditors rights and that at the
time of such execution and delivery, IPD will have acquired
title in and to the Common Shares listed in Exhibit A free and
clear of all claims, liens and encumbrances.
N. Access to Books and Records. IPD will have full and free
access to the books of those corporations listed in Exhibit A
during the course of this transaction prior to Closing, during
regular business hours.
O. CYAA's Financial Statements. CYAA's Balance Sheet and Profit
and Loss statement for the quarter ended June 30, 1998,
attached hereto as Exhibit "H", accurately describe CYAA's
financial position as of the dates thereof. Within 90 days
after the Closing. CYAA will provide IPD with certified
financial statements for the necessary periods to file a Form
10 or Form 10SB, if required. These financial statements shall
be prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") (or as permitted by
regulation S-X, S-B and/or the rules promulgated under the
`33' act and the 34' act and certified by independent
certified public accountants with substantial SEC experience.)
IV. Warranties and Representations of IPD. In order to induce CYAA to enter
into the Agreement and to complete the transaction contemplated hereby,
IPD warrants and represents to CYAA and Sellers that:
A. Organization and Standing. IPD is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Utah, is qualified to do business as a
foreign corporation in every other state in which it operates
to the extent required by the laws of such states, and has
full power and authority to carry on its business as now
conducted and to own and operate its assets, properties and
business.
B. Capitalization IPD's entire authorized equity capital consists
of shares of voting common stock, $.001 par value. As of the
Closing, IPD will have 50,000,000 shares Common Stock, $.001
par value, authorized, of which 304,275 shares of voting
common stock of IPD will be issued and outstanding, which does
not include the 1,382,528 shares being issued to CYAA
Shareholders hereunder pursuant to Section 4(2) of the `33 Act
of the issuance at closing. Upon issuance, all of the IPD
Common Stock will be validly issued fully paid and
non-assessable. The relative rights and preferences of IPD's
equity securities are set forth in the Articles of
Incorporation, as amended and IPD's By-Laws (Exhibit "I"
hereto). Except as set forth above, there are no voting or
equity securities convertible into voting stock, and no
outstanding subscriptions, warrants, calls, options, rights,
commitments or agreements by which IPD is bound, calling for
the issuance of any additional shares of common stock or any
5
other voting or equity security. The By-Laws of IPD provide
that a simple majority of the shares voting at a stockholders'
meeting at which a quorum is present may elect all of the
directors of IPD. Cumulative voting is not provided for by the
By-Laws or Articles of Incorporation of IPD. Accordingly, as
of the Closing the 1,382,528 shares being issued to and
acquired by the Shareholders will constitute approximately
eighty-two (82%) percent of the Common Shares of IPD which
will then be issued and outstanding, which includes inter
alia, that same percentage of IPD's voting power, right to
receive dividends, when, as and if declared and paid, and the
right to receive the proceeds of liquidation attributable to
common stock, if any.
C. Ownership of Shares. By IPD's issuance of the IPD Common
Shares to the CYAA Shareholders pursuant to the Agreement, the
Shareholders will thereby acquire good absolute marketable
title thereto, free and clear of all liens, encumbrances and
restrictions of any nature whatsoever, except by reason of the
fact that such IPD shares will not have been registered under
the `33 Act.
D. Significant Agreements. IPD is not and will not at Closing be
bound by any of the following, unless specifically listed in
Exhibit "J" hereto:
1. Employment advisory or consulting contract;
2. Plan providing for employee benefits of any nature;
3. Lease with respect to any property or equipment;
4. Contract of commitment for any future expenditure in excess
of $100.
5. Contract or commitment pursuant to which it has assumed,
guaranteed, endorsed, or otherwise become liable for any
obligation of any other person, firm or organization;
6. Contract, agreement, understanding, commitment or
arrangement, other than in the normal course of business,
not fully disclosed or set forth in the Agreement;
7. Agreement with any person relating to the dividend,
purchase or sale of securities, that has not been settled
by the delivery of payment of securities when due, and
which remains unsettled upon the date of the Agreement.
E. Taxes. IPD has filed all federal, state and local income or
other tax returns and reports that it is required to file with
all governmental agencies, wherever situate. All of such
returns are true and complete.
6
F. Liabilities. At and as of the Closing Date, IPD will have a
total of approximately $3,476,467 in current and long-term
liabilities, exclusive of the costs, including legal and
accounting fees and other expenses, in connection with this
transaction.
G. No Pending Actions. There are no legal actions, lawsuits,
proceedings or investigations, either administrative or
judicial, pending or threatened, against or affecting IPD, or
against any of IPD's officers or directors and arising out of
their operation of IPD. IPD has been in compliance with, and
has not received notice of violation of any law, ordinance or
regulation of any kind whatever, including, but not limited
to, the `33 Act, the `34 Act, the Rules and Regulations of the
SEC or the Securities Laws and Regulations of any state. IPD
is not now and never has been required to file reports under
the `33 Act or the `34 Act.
H. Corporate Records. All of IPD's books and records, including
without limitation, its book of account, corporate records,
minute book, stock certificate books and other records are
up-to-date, complete and reflect accurately and fairly the
conduct of its business in all respects since its date of
incorporation: all of said books and records will be delivered
to IPD's new management at the Closing.
I. No Misleading Statements or Omissions. Neither the Agreement
nor any financial statement, exhibit, schedule or document
attached hereto or presented to CYAA's counsel in connection
herewith contains any materially misleading statement, or
omits any fact or statement necessary to make the other
statements of facts therein set forth not materially
misleading.
J. Validity of the Agreement. All corporate action and
proceedings required to be taken by IPD in order to enter into
and to carry out the Agreement have been duly and properly
taken. The Agreement has been duly executed by IPD, and
constitutes a valid and binding obligation of IPD. The
execution and delivery of the Agreement and the carrying out
of its purposes will not result in the breach of any of the
terms or conditions of, or constitute a default under or
violate, IPD's Certificate of Incorporation or By-Laws, or any
agreement, lease, mortgage, bond, indenture, license or other
document or undertaking, oral or written, to which IPD is a
party or is bound or may be affected, nor will such execution,
delivery and carrying out violate any order, writ, injunction,
decree, law, rule or regulation of any court regulatory agency
or other governmental body.
K. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid,
and enforceable by CYAA according to their terms, and that at
the time of such execution and delivery, the CYAA Shareholders
will have acquired good, marketable title in and to the IPD
Common Shares acquired pursuant hereto, free and clear of all
liens and encumbrances.
7
L. Access to Books and Records. CYAA will have full and free
access to IPD's books and records during the course of this
transaction prior to and at the Closing.
M. IPD Financial Statements. At or before the Closing, IPD will
provide CYAA with recent audited financial statements, which
will be certified in accordance with GAAP by independent
certified public accountants with substantial SEC experience.
N. IPD Financial Condition. Prior to the Closing, IPD will have
$4,445,331 in assets and $3,476,467 of liabilities.
O. Stockholder Approval. Immediately upon the signing of the
Agreement, IPD will submit to its stockholders by meeting or
consent the matters described in section VII(B)(1) herein, if
required to do so under Utah Corporate Law. CYAA agrees that
it will vote all of its IPD shares in favor of all items
submitted to IPD stockholders in accordance with the
Agreement.
V. Term. All representations, warranties, covenants and agreements made
herein and in the exhibits attached hereto shall survive the execution
and delivery of the Agreement and payment pursuant thereto.
VI. The IPD Shares. All o f the IPD Common Shares shall be validly issued,
fully-paid and non-assessable shares of IPD Common Stock, with full
voting rights, dividend rights, and the right to receive the proceeds
of liquidation, if any, as set forth in the respective Articles of
Incorporation.
VII. Conditions Precedent to Closing.
A. The obligations of CYAA under the Agreement shall be and are
subject to fulfillment, prior to or at the Closing of each of
the following conditions:
1. That IPD and its management representations and warranties
contained herein shall be true and correct at the time of
closing date as if such representations and warranties were
made at such time;
2. That IPD and its management shall have performed or
complied with all agreements, terms and conditions required
by the Agreement to be performed or complied with by them
prior to or at the time of Closing;
3. That IPD's stockholders, by proper and sufficient vote,
shall have properly approved all of the matters described
in Section VII(B)(1) herein, if required to do so under
Utah Corporate Law; and
9
B. The obligations of IPD under the Agreement shall be and are
subject to fulfillment, prior to, at the Closing or subsequent
to the Closing of each of the following conditions:
1. That IPD stockholders, if necessary by proper and
sufficient vote of its stockholders, shall have approved
the Agreement and the transactions contemplated hereby and
will have approved such other changes as are consistent
with the Agreement for submission to IPD stockholders, if
required to do so under Utah Corporate Law;
2. That CYAA's representations and warranties contained herein
shall be true and correct at the time of Closing as if such
representations and warranties were made at such time; and
3. That CYAA shall have performed or complied with all
agreements, terms and conditions required by the Agreement
to be performed or complied with by it prior to or at the
time of Closing.
4. That the parties jointly and severally indemnify and hold
harmless IPD's former officers, directors, agents and
affiliates against any claims or liabilities, including
reasonable attorney's fees and other reasonable defense
costs incurred in defending such claims or liabilities,
resulting from any claims or liabilities asserted against
them as to any material misrepresentation or omissions in
the Agreement made by any party hereto.
VIII. Termination. The Agreement may be terminated at any time before or; at
Closing, by:
A. The mutual agreement of the parties;
B. Any party if:
1. Any provision of the Agreement applicable to a party shall
be materially untrue or fail to be accomplished.
2. Any legal proceeding shall have been instituted or shall be
imminently threatening to delay, restrain or prevent the
consummation of the Agreement.
Upon termination of the Agreement for any reason, in accordance with the terms
and conditions set forth in this paragraph, each said party shall bear all costs
and expenses as each party has incurred and no party shall be liable to the
other.
IX. Exhibits. All Exhibits attached hereto are incorporated herein by this
reference as if they were set forth in entirety.
9
X. Miscellaneous Provisions. This Agreement is the entire agreement
between the parties in respect of the subject matter hereof, and there
are no other agreements, written or oral, nor may the Agreement be
modified except in writing and executed by all of the parties hereto.
The failure to insist upon strict compliance with any of the terms,
covenants or conditions of the Agreement shall not be deemed a waiver
or relinquishment of such right or power at any other time or times.
XI. Closing. The Closing of the transactions contemplated by the Agreement
("Closing") shall take place at 1:00 P.M. on the first business day
after the stockholders of IPD approve this transaction, if approval is
required or on December , 1998, whichever is sooner, if shareholder
approval is not required or can be obtained subsequent to closing by
shareholder ratification. The Closing shall occur at the offices of
______________________ or such other date and place as the parties
hereto shall agree upon. At the Closing, all of the documents and items
referred to herein shall be exchanged.
XII. Post-Closing: Form 10 or Form 10-SB. As soon as practical after Closing
and after IPD meets the initial listing requirements for the NASDAQ
Small Caps market, IPD will prepare, file and use its best efforts to
have declared effective a Form 10 or Form 10-SB Registration Statement
with the Securities and Exchange Commission.
XIII. Governing Law. The Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah.
XIV. Counterparts. The Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together
shall constitute one and the same binding Agreement, with one
counterpart being delivered to each party hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the date and year above first written.
Innovative Property Development Corp.
By: /s/ Richard Surber
--------------------
Richard D. Surber
Its: President
10
CyberAmerica Corporation
By: /s/ Gerald Einhorn
--------------------
Its: Vice-President
11
INDEX TO EXHIBITS
Exhibit No. Description
A List of shares to be transferred by CYAA to IPD
B List of CYAA's stockholders
C CYAA's Certificate of Incorporation, as amended and
By-laws
D Pending Actions
E Licenses and registrations of CYAA
F Liens and encumbrances on CYAA's assets or property
G CYAA's liabilities
H CYAA's unaudited Financial Statements
I CYAA's Corporate Summary
J IPD's By-Laws
K Significant Agreements
12
Exhibit "A"
Shares to be transferred to CyberAmerica Corporation to Innovative
Property Development Corporation.
Name of Company Number of Shares
Canton's Commercial Carpet Corporation 794,000
Canton Industrial Corporation of Salt Lake City 975,750
Wasatch Capital Corporation 200,000
Oasis International Hotel & Casino, Inc. 10,000
Oasis International Corporation 10,000
West Jordan Real Estate Holdings, Inc. 1,000,000
Canton Financial Services Corporation 100,000
Hudson Consulting Group, Inc. 1,000
Canton's Wild Horse Ranch II, Inc. 10,000
Exhibit "B"
CyberAmerica Corporation Shareholder List
Not attached due to the length of the document.
Exhibit "C"
CyberAmerica Corporation's Certificate of Incorporation, as amended and By-Laws
For the above referenced information, see CyberAmerica's Form 10-KSB
for the year ended December 31, 1997.
Exhibit "D"
Pending Actions
For information on CyberAmerica's pending actions, see CyberAmerica's
Form 10-KSB for the year ended December 31, 1997.
Exhibit "E"
Licenses and registrations of CyberAmerica Corporation
Contact CyberAmerica to obtain a copy of the most recent business
license filed with the state.
Exhibit "F"
Liens and encumbrances on CyberAmerica Corporation's assets or property.
For information on CyberAmerica's liens and encumbrances, see
CyberAmerica's Form 10-KSB for the year ended December 31, 1997.
Exhibit "G"
CyberAmerica Corporation's Liabilities
For information on CyberAmerica's liabilities, see CyberAmerica's Form
10-KSB for the year ended December 31, 1997.
Exhibit "H"
CyberAmerica Corporation's unaudited Financial Statements
FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS PAGE
Consolidated Unaudited Condensed Balance Sheet September 30, 1998...........F-2
Consolidated Unaudited Condensed Statements of Operations
September 30, 1998 and 1997...............................................F-4
Consolidated Unaudited Condensed Statements of Cash Flows
September 30, 1998 and 1997...............................................F-6
Notes to Consolidated Unaudited Condensed Financial Statements
September 30, 1998........................................................F-7
F-1
CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED UNAUDITED CONDENSED BALANCE SHEETS
September 30, 1998
ASSETS
- ------
CURRENT ASSETS
Cash $ 71,753
Accounts receivable - trade
(Net of allowance for bad debt of $89,097) 198,886
Accounts receivable - related parties 290,742
Accounts receivable - other 58,349
-----------
Note receivable - current 88,645
Prepaid expenses 13,202
Securities available for sale 378,463
-----------
TOTAL CURRENT ASSETS 1,100,040
-----------
PROPERTY AND EQUIPMENT - NET 10,224,065
OTHER ASSETS
Investment securities at cost 1,082,318
Notes receivable - net of current 12,000
Investments - other 241,966
Trade credits 161,742
-----------
TOTAL OTHER ASSETS 1,498,026
TOTAL ASSETS $12,822,131
===========
See notes to consolidated unaudited condensed financial statements.
F-2
CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED UNAUDITED CONDENSED BALANCE SHEETS (Continued)
September 30, 1998
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts payable - trade $ 320,615
Accrued liabilities
Interest 37,221
Real estate taxes and assessments 438,351
Payroll and related taxes payable 124,612
EPA liabilities 325,398
Refundable deposits 24,471
Refund to investors 54,746
Other 1,500
Debenture payable 260,000
Current maturities of long-term debt 687,492
------------
TOTAL CURRENT LIABILITIES 2,274,406
------------
LONG-TERM LIABILITIES
Long-term debt, less current portion 6,279,387
------------
MINORITY INTEREST 1,352,431
SHAREHOLDERS' EQUITY
Preferred stock par value $.001; 20,000,000
shares authorized; No shares issued
Common stock par value $.001; 20,000,000
shares authorized; 2,832,064 shares issued 2,832
Additional paid-in capital 15,058,172
Accumulated deficit (11,698,597)
Unrealized loss from securities available for sale (446,500)
------------
TOTAL SHAREHOLDERS' EQUITY 2,915,907
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 12,822,131
=============
See notes to consolidated unaudited condensed financial statements.
F-3
CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
----------- ----------- ----------- -----------
REVENUE
Sale of property $ 200,161 $ 950,000 $ 655,892 $ 2,285,000
Consulting revenue 364,921 88,608 743,586 214,382
Rental revenue 183,927 110,428 541,567 372,298
Other revenue -- -- -- 3,401
----------- ----------- ----------- -----------
TOTAL REVENUE 749,009 1,149,036 1,941,045 2,875,081
COSTS OF REVENUE
Cost of sale of property 22,801 404,652 47,638 1,071,222
Costs associated with consulting revenue 110,970 39,410 200,645 145,031
Costs associated with rental revenue 118,582 87,817 305,381 267,198
Interest expenses associated with rental 106,384 57,763 254,956 151,482
revenue
Cost associated with other revenue -- -- -- --
----------- ----------- ----------- -----------
TOTAL COSTS OF REVENUE 358,737 589,642 808,620 1,634,933
----------- ----------- ----------- -----------
GROSS PROFIT 390,272 559,394 1,132,425 1,240,148
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 328,480 150,021 934,980 1,011,016
Computer development costs -- -- --
----------- ----------- ----------- -----------
TOTAL SELLING, GENERAL
AND ADMINISTRATIVE 328,480 150,021 934,980 1,132,736
OPERATING INCOME (LOSS) 61,792 409,373 197,445 107,412
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest income 95,402 38,647 160,727 58,641
Interest expense (101,085) (64,718) (205,254) (239,582)
Gain (loss) from sale of assets 23,250 -- 23,250 (11,540)
Gain (loss) from investment securities 209,727 (143,183) 562,422 (478,442)
Gain from recoveries of bad debts -- -- -- 151,200
Gain from disposal of subsidiary -- -- -- 90,681
Loss on foreclosure -- -- (274,220) --
Other income 38,252 -- 39,030
----------- ----------- ----------- -----------
TOTAL OTHER INCOME (EXPENSES) 265,546 (169,254) 305,955 (443,525)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES,
AND MINORITY INTEREST 327,338 240,119 503,400 (336,113)
See notes to consolidated unaudited condensed financial statements.
F-4
EXTRAORDINARY LOSS FROM FIRE -- (32,735) -- (32,735)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE
MINORITY INTEREST 327,338 207,384 503,400 (368,848)
MINORITY INTEREST IN LOSS (GAIN) 92,782 2,438 145,735 (43,670)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 420,120 $ 209,822 $ 649,135 $ (412,518)
=========== =========== =========== ============
INCOME (LOSS) PER COMMON SHARE
Income (loss) before extraordinary item $ 0.12 $ 0.28 $ 0.18 $ (0.48)
Extraordinary item -- (0.03) -- (0.04)
----------- ----------- ----------- -----------
Income (loss) before minority interest 0.12 0.25 0.18 (0.52)
Minority interest in loss (gain) 0.03 0.00 0.05 (0.06)
----------- ----------- ----------- -----------
Net income (loss) per weighted average
common share outstanding $ 0.15 $ 0.25 $ 0.23 $ (0.58)
=========== =========== =========== ===========
Weighted average number of common
shares outstanding 2,832,064 850,086 2,798,664 706,658
=========== =========== =========== ===========
See notes to consolidated unaudited condensed financial statements.
F-5
CYBERAMERICA CORPORATION SUBSIDIARIES
CONSOLIDATED UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
Unaudited
1998 1997
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 649,135 $ (412,518)
Adjustments to reconcile net income (loss)
to net cash provided:
(Gain) loss from sale of investments (562,422) 478,442
(Gain) from sale of assets (23,250) 11,540
(Gain) from sale of subsidiary -- (90,681)
Loss of foreclosure 274,220 --
Minority interest in (gain) loss 145,735 43,670
Depreciation and Amortization 152,250 159,373
Services paid with common stock 29,764 68,617
Common stock issued for assets and debt 39,231 146,230
Bad debt recoveries -- --
Decrease (increase) in assets:
Receivables 1,108,809 (438,345)
Receivables - related party 109,377 (194,669)
Other current assets (206,402) 23,946
Increase (decrease) in liabilities:
Accounts and notes payable (75,414) (101,870)
Payables - related parties (142,573) (19,730)
Accrued liabilities (374,537) 66,096
Current portion of long-term debt (626,541) 159,335
----------- -----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 497,382 $ (100,564)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cost of property sold 47,638 1,071,222
Minority interest in subsidiary 774,231 --
Purchase of assets (3,518,520)
----------- -----------
(2,461,556)
NET CASH FLOWS (USED) IN INVESTING ACTIVITIES $(2,696,651) $(1,390,334)
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock for cash 21,500 --
Increase in long term debt 2,871,078 2,004,000
Payment on debt (627,462) (587,320)
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 2,265,116 $ 1,416,680
INCREASE (DECREASE) IN CASH 65,847 (74,218)
CASH AT BEGINNING OF PERIOD 5,906 78,368
----------- -----------
CASH AT END OF PERIOD $ 71,753 $ 4,150
=========== ===========
See notes to consolidated unaudited condensed financial statements.
F-6
CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 1998
1. Basis of Presentation
The accompanying consolidated unaudited condensed financial statements have been
prepared by management in accordance with the instructions in Form 10-QSB and,
therefore, do not include all information and footnotes required by generally
accepted accounting principles and should, therefore, be read in conjunction
with the Company's Annual Report to Shareholders on Form 10-KSB for the fiscal
year ended December 31, 1997. These statements do include all normal recurring
adjustments which the Company believes necessary for a fair presentation of the
statements. The interim operations results are not necessarily indicative of the
results for the full year ended December 31, 1998.
2. Sale of Land
On May 1, 1998 The Company's wholly owned subsidiary, Oasis Hotel & Casino,
Inc., sold a 20 acre parcel of land located in northern Nevada to Oasis Hotel,
Resort & Casino-III, Inc. a wholly owned subsidiary of Flexweight, Inc. The
Company received 1,025,000 shares of common stock of Flexweight, Inc., a Trust
Deed note in the amount of $3,425,000 and with interest at 9% per annum and
monthly payment of $27,558 until April, 2008 when the balance is due. The
purchaser assumed a note due of $550,000. Revenue from this transaction is
reported using the installment method.
3. Purchase of Subsidiary
On April 30, 1998 the Company through its majority owned subsidiary, TAC Inc.,
purchased a controlling interest in Golden Opportunity Development, Inc.
("Golden"), in a business combination accounted for as a purchase. Golden owns
and operates a motel and rents other real property located in Baton Rouge,
Louisiana. The results of operations of Golden is included in the accompanying
financial statements since the date of acquisition. The total cost of the
acquisition was $800,000 and was equal to the fair market value at the date of
purchase. Golden has assets of approximately $3,600,000 debt of $1,900,000 and
equity of $1,600,000.
4. Loss on Foreclosure
On May 13, 1998 there was a Trustee's sale for property held in the name of Vale
Terrace Corporation, a wholly-owned subsidiary of TAC, Inc. a majority owned
subsidiary of the company. The Company recorded a loss of $274,220 during the
second quarter as a result of this foreclosure.
5. Additional footnotes included by reference
Except as indicated in Notes above, there have been no other material changes in
the information disclosed in the notes to the financial statements included in
the Company's Annual Report on Form 10-KSB for the year ended December 31, 1997.
Therefore, those footnotes are included herein by reference.
F-7
Exhibit "I"
CyberAmerica Corporation's Corporate Summary
Corporate Summary
CyberAmerica Corporation is a dynamic holding company (CYAA),
incorporated on July 10, 1984 and has acquired many subsidiaries and established
diverse activities in the marketplace. Through the operations of its
subsidiaries, the Company remains focused on activities related to real estate
investment and management and various consulting services. CyberAmerica has
remained a viable business entity throughout its recent history in the current
economy and actively seeks to maintain a firm foothold far into the next
century.
Real Estate Investment and Management
The Company, through a number of consolidated subsidiaries, owns and
manages commercial and undeveloped properties in Utah, Nevada, West Virginia,
Virginia, Florida, Illinois and Arizona. The Company's management has expertise
in locating undervalued property and the Company has had success at acquiring
real property with minimal expenditures of cash and later disposing of the
property at a gain.
Examples of the Company's recent success involve the sale of a 60,000
square foot commercial warehouse. The warehouse was owned by TAC, Inc., a
majority owned subsidiary of the Company. TAC sold the warehouse for $1,335,000
after acquiring the warehouse for less than $665,000 in June 1996. Accordingly,
the Company realized a 50% return on its initial investment.
Another example of management's expertise involves the sale of an
office building owned by Canton Industrial Properties Management Corporation of
Salt Lake City ("CIPMC"). CIPMC previously acquired the building in November
1993 for $398,125. On July 15, 1997, CIPMC sold the building for $950,000,
realizing a gross return of 58%.
These two recent transactions typify the kind of returns, the Company's
management seeks to realize with each of its acquisitions targeted for resale,
pending unforseen circumstances. However, the Company cannot give any assurances
that it will be able to consistently realize these returns as planned.
The Company manages its properties in-house and leases developed
properties to primarily commercial tenants. The Company has taken significant
steps to reduce losses from the lease of its real estate holdings including
decreasing vacancy rates by actively pursuing reliable tenants.
The Company is constantly looking for new and creative ways to generate
revenue from its real estate holdings. The Company is currently investigating
the profitability of converting some of its properties into low income housing
or developing some of its undeveloped properties. This summary briefly describes
some of the properties owned by the Company. For a full description of the
properties owned by the Company and its subsidiaries, including the debt owed on
the property, see the Company's Form 10-KSB for the fiscal year ended December
31, 1997 and the subsequent Forms 10-QSB.
Financial Consulting
Through its wholly owned subsidiaries Canton Financial Services
Corporation and Hudson Consulting Group, Inc., the Company provides diverse
consulting services. These services consist of assisting clients in the
preparation of corporate documentation and providing general corporate problem
solving advice. The primary clientele of the consulting subsidiaries consist of
startup corporations or other private entities in need of capital and distressed
public companies. The Company's consulting subsidiaries have also assisted in
the structuring of reverse merger transactions, which consists of taking viable
private entities public by combining them with public shell corporations. A
public shell corporation is an inactive corporation with no assets or
liabilities which has previously issued shares pursuant to an initial public
offering. The Company is continually searching for inactive public shell
corporations.
The most unique aspect of the Company's financial consulting operations
is the Company's willingness to accept compensation in the form of the client's
equity securities. This arrangement permits many organizations, especially
startup ventures, to obtain consulting services without expending valuable cash
flows and allows the Company to target potential clients which similar
consulting firms cannot serve. Accepting equity as compensation also affords the
Company's subsidiaries the benefit of potentially unlimited appreciation in the
value of its clients' equity securities. The Company accepts equity as
compensation on the belief that the Company's services will add value to the
client's business and thereby allow the Company to realize a return on its
investment.
The Company employs a professional staff to provide its diverse
clientele with reliable expertise. The Company actively recruits professionals
from diverse industries to provide the best possible services for its clientele.
In this manner, the Company's management believes it will become fully equipped
to further establish itself in the current growing economy while also
establishing a firm foothold in the future global economy of the next century.
The matters discussed in this promotional material may contain forward-looking
statements including the Company's intentions regarding its real estate
holdings, which are based on current expectations and estimates about the
industry in which the Company operates. Words such as "believes,' "seeks,"
"hopes," and "intends" are intended to identify such forward looking statements.
It is important to note that the Company's actual results could differ
materially from those projected in the forward-looking statements as a result of
factors including changes in real estate markets where the Company's real estate
holdings are located, loss or destruction of some or all of the Company's
holdings, the Company's inability to service the debt obligations on its
holdings, resulting foreclosure on the Company's holdings, and other factors
listed from time to time in the Company's Securities and Exchange Commission
reports, including its report on Form 10-KSB for the last fiscal year.
Exhibit "J"
Innovative Property Development Corporation's By-Laws
BYLAWS FOR THE REGULATION
EXCEPT AS OTHERWISE PROVIDED BY STATUE
OR ITS ARTICLES OF INCORPORATION OF
TAC, Inc.
******
ARTICLE I
Offices
Section 1. PRINCIPAL AND REGISTERED OFFICE. The principal and
registered office for the transaction of the business of the corporation is
hereby fixed and located at 268 West 400 South, Suite 302, Salt Lake City, Utah
84101. The Corporation may have such other offices, either within or without the
State of Utah as the Board of Directors may designate or as the business of the
Corporation may require from time to time.
Section 2. OTHER OFFICES. Branch or subordinate offices may at any time
be established by the board of directors at any place or places where the
corporation is qualified to do business.
ARTICLE II.
Meetings of Shareholders
Section 1. MEETING PLACE. All annual meetings of shareholders and all
other meetings of shareholders shall be held either at the principal office or
at nay other place within or without the State of Utah which may be designated
either by the board of directors, pursuant to authority hereinafter granted to
said board, or by the written consent of all shareholders entitled to vote
thereat, given either before or after the meeting and filed with the Secretary
of the corporation.
Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall
be held on the third Monday of September each year, at the hour of 2:00 o'clock
p.m. of said day commencing with the year 1997, provided, however, that should
said day fall upon a legal holiday then any such annual meeting of shareholders
shall be held at the same time and place on the next day thereafter ensuing
which is not a legal holiday.
Written notice of each annual meeting signed by the president or vice
president, or the secretary, or an assistant secretary, or by such other person
or persons as the directors shall designate, shall be given to each shareholder
entitled to vote thereat, either personally or by mail or other means of written
communication, charges prepaid, addressed to such shareholder at his address
appearing on the books of corporation or given by him to the corporation for the
purpose of notice. If a shareholder gives no address, notice shall be deemed to
have been given to him, is sent by mail or other means of written communication
addressed to the place where the principal office of the corporation is
situated, or if published at least once in some newspaper of general circulation
in the county in which said office is located. All such notices shall be sent to
each shareholder entitled thereto not less then ten (10) and no more than sixty
(60) days before each annual meeting, and shall specify the place, the day and
the hour of such meeting, and shall also state the purpose or purposes for which
the meeting is called.
Failure to hold the annual meeting shall not constitute dissolution or
forfeiture of the Corporation, and a special meeting of the shareholders may
take place thereof.
Section 3. SPECIAL MEETINGS. Special meetings of the shareholders, for
any purposes whatsoever, may be called at any time by the president or by the
board of directors, or by one or more shareholders holding not less than 10% of
the voting power of the corporation. Except in special cases where other express
provision is made by statute, notice of such special meetings shall be given in
the same manner as for annual meetings of shareholders. Notice of any special
meeting shall specify in addition to the place, day and hour of such meeting,
the purpose or purposes for which the meeting is called.
Section 4. ADJOURNED MEETINGS AND NOTICE THEREOF. Any shareholder's
meeting, annual or special, whether or not a quorum is present, may be adjourned
form time to time by the vote of a majority of the shares, the holders of which
are either present in person or represented by proxy thereat, but in the absence
of a quorum, no other business may be transacted at any such meeting.
When any shareholders' meeting, either annual or special, is adjourned
for thirty (30) days or more, notice of the adjourned meeting shall be given as
in the case of an original meeting. Save as aforesaid, it shall not be necessary
to give any notice of an adjournment of the business to be transacted at an
adjourned meeting, other than by announcement at the meeting at which such
adjournment is taken.
Section 5. ENTRY OF NOTICE. Whenever any shareholder entitled to vote
has been absent from any meeting of shareholders, whether annual or special, an
entry in the minutes to the effect that notice has been duly given shall be
conclusive and incontrovertible evidence that due notice of such meeting was
given to such shareholders, as required by law and the Bylaws of the
corporation.
Section 6. VOTING. At all annual and special meetings of stockholders
entitled to vote thereat, every holder of stock issued to a bona fide purchaser
of the same, represented by the holders thereof, either in person or by proxy in
writing, shall have one vote for each share of stock so held and represented at
such meetings, unless the Articles of Incorporation of the company shall
otherwise provide, in which event the voting rights, powers and privileges
prescribed in the said Articles of Incorporation shall prevail. Voting for
directors and upon demand of any stockholder, upon any question at any meeting
shall be by ballot.
Section 7. QUORUM. The presence in person or by proxy of the holders of
a majority of the shares entitled to vote any meeting shall constitute a quorum
for the transaction of business. The shareholders present at a duly called or
held meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave less
than a quorum.
Section 8. CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, either annual or special, however called and give notice thereof,
shall be as valid as though had at a meeting duly held after regular call and
notice, if a quorum be present either in person or by proxy, and if, either
before or after the meeting, each of the shareholders entitled to vote, not
present in person or by proxy, sign a written Waiver of Notice, or a consent to
the holding of such meeting, or an approval of the minutes thereof. All such
waivers, consents or approvals shall be filed with the corporate records or made
a part of the minutes of this meeting.
Section 9. PROXIES. Every person entitled to vote or execute consents
shall have the right to do so either in person or by an agent or agents
authorized by a written proxy executed by such person or his duly authorized
agent and filed with the secretary of the corporation; provided that no such
proxy shall be valid after the expiration of eleven (11) months from the date of
its execution, unless the shareholder executing it specifies therein the length
of time for which such proxy is to continue in force, which in no case shall
exceed seven (7) years from the date of this execution.
Section 10. SHAREHOLDER ACTION WITHOUT A MEETING. Any action required
or permitted to be taken at a meeting of the stockholders may be taken without a
meeting if a written consent thereto is signed by stockholders holding at least
a majority of the voting power, except that if a different proportion of voting
power is required for such an action at a meeting, then that proportion of
written consent is required. In no instance where action is authorized by this
written consent need a meeting of stockholders be called or notice given. The
written consent must be filed with the proceedings of the stockholder.
ARTICLE III.
Board of Directors
Section 1. Powers. Subject to the limitations of the Articles of
Incorporation or the By-Laws, and the provisions of Utah Corporate Law as to
action to be authorized or approved by the shareholders, and subject to the
duties of directors as prescribed by the By-Laws, all corporate powers shall be
exercised by or under the authority of, and the business and affairs of the
corporation shall be controlled by the board of directors. Without prejudice to
such general powers, but to the same limitations, it is hereby expressly
declared that the directors shall have the following powers, to wit:
A. To select and remove all the other officers, agents and employees of
the corporation, prescribe such powers and duties for them as may not be
inconsistent with law, with the Articles of Incorporation or the By-Laws, fix
their compensation, and require from them security for faithful service.
B. To conduct, manage and control the affairs and business of the
corporation, and to make such rules and regulations therefore not inconsistent
with law, with the Articles of Incorporation or the By-Laws, as they may deem
best.
C. To change the principal office for the transaction of the business
if it becomes necessary or useful; to fix and locate from time to time one or
more subsidiary offices of the corporation within or without the State of Utah,
as provided in Article I, Section 2, hereof; to designate any place within or
without the State of Utah for the holding of any shareholders' meeting or
meetings; and to adopt, make and use a corporate seal, and to prescribe the
forms of certificates of stock, and to alter the form of such seal and of such
certificates from time to time, as in their judgment they may deem best,
provided such seal and such certificates shall at all times comply with the
provisions of law.
D. To authorize the issuance of shares of stock of the corporation from
time to time, upon such terms as may be lawful, in consideration of money paid,
labor done or services actually rendered, debts or securities canceled, or
tangible or intangible property actually received, or in the case of shares
issued as a dividend, against amounts transferred from surplus to stated
capital.
E. To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefore, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecation's or other evidences of debt and securities therefore.
F. To appoint an executive committee and other committees and to
delegate to the executive committee any of the powers and authority of the board
in management of the business and affairs of the corporation, except the power
to declare dividends and to adopt, amend or repeal By-Laws. The executive
committee shall be composed of one or more directors.
Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number
of directors of the corporation shall not be less than one (1) and not more than
three (3).
Section 3. ELECTION AND TERM OF OFFICE. The directors shall be elected
at each annual meeting of shareholders, but if any such annual meeting is not
held, or the directors are not elected thereat, the directors may be elected at
any special meeting of shareholders. All directors shall hold office until their
respective successors are elected.
Section 4. VACANCIES. Vacancies in the board of directors may be filled
by a majority of the remaining directors, though less than a quorum, or by a
sole remaining director, and each director so elected shall hold office until
his successor is elected at an annual or a special meeting of the shareholders.
A vacancy or vacancies in the board of directors shall be deemed to
exist in case of the death, resignation or removal of any director, or if the
authorized number of directors be increased, or if the shareholders fail at any
annual or special meeting of shareholders at which any director or directors are
elected to elect the full authorized number of directors to be voted at that
meeting.
The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. If the board of directors
accept the resignation of a director tendered to take effect at a future time,
the board or the shareholders shall have the power to elect a successor to take
office when the resignation is to become effective.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of his term of office.
ARTICLE IV.
Meetings of the Board of Directors
Section 1. PLACE OF MEETING. Regular meetings of the board of directors
shall be held at any place within or without the State of Utah which has been
designated from time to time by resolution of the board or by written consent of
all members of the board. In the absence of such designation regular meeting
shall be held at the principal office of the corporation. Special meetings of
the board may be held either at a place so designated, or at the principal
office. Failure to hold an annual meeting of the board of directors shall not
constitute forfeiture or dissolution of the Corporation.
Section 2. ORGANIZATION MEETING. Immediately following each annual
meeting of shareholders, the board of directors shall hold a regular meeting for
the purpose of organization, election or officers, and the transaction of other
business. Notice of such meeting is hereby dispensed with.
Section 3. OTHER REGULAR MEETINGS. Other regular meetings of the board
of directors shall be held without call unless one director agrees not to have
this regular meeting, on the First Monday of each month at the hour of 3:00
o'clock p.m. of said day; provided, however, should said day fall upon a legal
holiday, then said meeting shall be held at the same time on the next day
thereafter ensuing which is not a legal holiday. Notice of all such regular
meetings of the board of directors is hereby dispensed with.
Section 4. SPECIAL MEETINGS. Special meetings of the board of directors
for any purpose or purposes shall be called at any time by the president, or, if
he/she is absent or unable or refuses to act, by any vice president or by any
two directors.
Written notice of the time and place of special meetings shall be
delivered personally to the directors or sent to each director by mail charges
prepaid, addressed to him at his address as it is shown upon the records of the
corporation, or if it is not shown on such records or is not readily
ascertainable, at the place in which the meetings of the directors are regularly
held. In case such notice is mailed or telegraphed, it shall be deposited in the
United States mail or delivered to the telegraph company in the place in which
the principal office of the corporation is located at least forty-eight (48)
hours prior to the time of the holding of the meeting. In case such notice is
delivered as above provided, it shall be so delivered at least twenty-four (24)
hours prior to the time of the holding of the meeting. Such mailing,
telegraphing or delivery as above provided shall be due, legal and personal
notice to such director.
Section 5. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be give to absent directors, if the time
and place be fixed at the meeting adjourned.
Section 6. ENTRY OF NOTICE. Whenever any director has been absent from
any special meeting of the board of directors, an entry in the minutes to the
effect that notice has been duly given shall be conclusive and incontrovertible
evidence that due notice of such special meeting was given to such director, as
required by law and the By-Laws of the corporation.
Section 7. WAIVER OF NOTICE. The transactions of any meeting of the
board of directors, however called and noticed or wherever held, shall be valid
as though a meeting had been duly held after regular call and notice, if a
quorum be present, and if, either before or after the meeting, each of the
directors not present sign a written waiver of notice or a consent to holding
such meeting or an approval of the minutes thereof. All such waiver, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
Section 8. QUORUM. A majority of the authorized number of directors
shall be necessary to constitute a quorum for the transaction of business,
except to adjourn as hereinafter provided. Every act or decision done or made by
a majority of the directors present at a meeting duly held at which a quorum is
present, shall be regarded as the act of the board of directors, unless a
greater number be required by law or by the Articles of Incorporation.
Section 9. ADJOURNMENT. A quorum of the directors may adjourn any
directors' meeting to meet again at a stated day and hour, provided, however,
that in the absence of a quorum, a majority of the directors present at any
director's meeting, either regular or special, may adjourn from time to time
until the time fixed for the next regular meeting of the board.
Section 10. FEES AND COMPENSATION. Directors shall not receive any
stated salary foir their services as director's but by resolution of the board,
a ixed fee, with or without expenses of attendance may be allowed for attendance
at each meeting. Nothing herein contained shall be construed to preclude any
director from serving the corporation in any other capapcity as an officer,
agent, employee, or otherwise , and receiving compensation therefore.
Section 11. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at a meeting of the board of directors a committee thereof may be
taken without a meeting if, before or after the action, a written consent
thereto is signed by all the members of the board or of the committee, The
written consent must be filed with the proceedings of the board of committee.
ARTICLE V.
Officers
Section 1. OFFICERS. The officers of the corporation shall be a
president, and a Secretary/Treasurer. The corporation may also have, at the
direction of the board of directors, a chairman of the board, one or more vice
presidents, one or more assistant secretaries, one or more assistant treasurers,
and such other officers as may be appointed in accordance with the provisions of
Section 3 of this Article. Officers other than president and chairman of the
board need not be directors. Any person may hold two or more offices.
Section 2. ELECTION. The officer of the corporation, except such
officers as may be appointed in accordance with the provisions of Section 3 of
Section 5 of this Article, shall be chosen annually by the board of directors,
and each shall hold his office until he shall resign or shall be removed or
otherwise disqualified to serve, or his successor shall be elected and
qualified.
Section 3. SUBORDINATE OFFICERS, ETC. The board of directors may
appoint such other officers as the business of the corporation may require, each
of whom shall hold office for such period, have such authority and perform such
duties as are provided in the By-Laws or as the board of directors may from time
to time determine.
Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by a majority of the directors at the time in office, at
any regular or special meeting of the board.
Any officer may resign at any time by giving written notice to the
board of directors or to the president, or to the secretary of the corporation.
Any such resignation shall take effect at the date of the receipt of such notice
or at any time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in the By-Laws for regular appointments to such office.
Section 6. CHAIRMAN OF THE BOARD. The chairman of the board, if there
shall be such an officer, shall, if present, president at all meetings of the
board of directors, and exercise and perform such other powers and duties as may
be from time to time assigned to him by the board of directors or prescribed by
the By-Laws.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as
may be given by the board of directors to the chairman of the board, if there be
such an officer, the president shall be the chief executive officer of the
corporation and shall, subject to the control of the board of directors, have
general supervision, direction and control of the business and officers of the
corporation. He shall preside at all meetings of the shareholders and in the
absence of the chairman of the board, or if there be none, at all meetings of
the board of directors. He shall be ex-officio a member of all the standing
committees, including the executive committee, if any, and shall have the
general powers and duties of management usually vested in the office of
president of a corporation, and shall have such other powers and duties as may
be prescribed by the board of directors or the By-Laws.
Section 8. VICE PRESIDENT. In the absence or disability of the
president, the vice presidents, in order of their rand as fixed by the board of
directors, of if not ranked, the vice president designated by the board of
directors, shall perform all the duties of the president and when so acting
shall have all the powers of, and be subject to all the restrictions upon , the
president. The vice presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
board of directors of the By-Laws.
Section 9. SECRETARY. The secretary shall keep, or cause to be kept, a
book of minutes at the principal office or such other place as the board of
directors may order, or all meetings of directors and shareholders, with the
time and place of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present at directors'
meetings, the number of shares present or represented at shareholders' meetings
and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office,
a share register, or a duplicate share register, showing the names of the
shareholders and their addresses; the number and classes of shares held by each;
the number and date of certificates issued for the same, and the number and date
of cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the
meetings of the shareholders and of the board of directors required by the
By-Laws or by law to be given, and he shall keep the seal of the corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the board of directors or the By-Laws.
Section 10. TREASURER. The treasurer shall keep and maintain, or cause
to be kept and maintained, adequate and correct accounts of the properties and
business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus and
shares. Any surplus, including earned surplus, paid-in surplus and surplus
arising from a reduction of stated capital, shall be classified according to
source and shown in a separate account. The books of account shall at all times
be open to inspection by any director.
The treasurer shall deposit all monies and other valuables in the name
and to the credit of the corporation with such depositaries as may be designated
by the board of directors. He shall disburse the funds of the corporation as may
be ordered by the board of directors, shall render to the president and
directors, whenever they request it, an account of all his transactions as
treasurer and of the financial condition of the corporation, and shall have such
other powers and perform such other duties as may be prescribed by the board of
directors or the By-Laws.
ARTICLE VI.
Miscellaneous
Section 1. RECORD DATE AND CLOSING STOCK BOOKS. The board of directors
may fix a time, in the future, not exceeding fifteen (15) days preceding the
date of any meeting of shareholders, and not exceeding thirty (30) days
preceding the date fixed for the payment of any dividend or distribution, or for
the allotment of rights, or when any change or conversion or exchange of shares
shall go into effect, as a record date for the determination of the shareholders
entitled to notice of and to vote at any such meeting, or entitled to receive
any such dividend or distribution or any such allotment of rights, or to
exercise the rights in respect to any such change, conversion or exchange of
shares, and in such case only shareholders of record on the date so fixed shall
be entitled to notice of and to vote at such meetings, or to receive such
dividend, distribution or allotment of rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any shares of the books of the
corporation after any record dated fixed as aforesaid. The board of directors
may close the books of the corporation against transfers or shares during the
whole, or any part of any such period.
Section 2. INSPECTION OF CORPORATE RECORDS. The share register or
duplicate share register, the books of account, and minutes of proceedings of
the shareholders and directors shall be open to inspection upon the written
demand of any shareholder of the holder of a voting trust certificate, at any
reasonable time, and for a purpose reasonably related to his interests as a
shareholder, or as the holder of a voting trust certificate, and shall be
exhibited at any time when required by the demand of ten percent (10%) of the
shares represented at any shareholders' meeting. Such inspection may be made in
person or bay an agent of attorney, and shall include the right to make
extracts. Demand of inspection other than at a shareholders' meeting shall be
made in writing upon the president, secretary or assistant secretary of the
corporation.
Section 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by
resolution of the board of directors.
Section 4. ANNUAL REPORT. The board of directors of the corporation
shall cause to be sent to the shareholders not later than one hundred twenty
(120) days after the close of the fiscal or calendar year an annual report.
Section 5. CONTRACTS ETC., HOW EXECUTED. The board of directors, except
as in the By-Laws otherwise provided, may authorize any officer or officers,
agent or agents, to enter into any contract, deed or lease or execute any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instance; and unless so authorized by the
board of directors, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or the pledge
its credit to render it liable for any purpose or to any amount.
Section 6. CERTIFICATES OF STOCK. A certificate or certificates for
shares of the capital stock of the corporation shall be issued to each
shareholder when any such shares are fully paid up. All such certificates shall
be signed by the president or a vice president and the secretary or an assistant
secretary, or be authenticated by facsimiles of the signature of the president
and secretary or by a facsimile of the signatures or the president and the
written signature of the secretary or an assistant secretary. Every certificate
authenticated by a facsimile of a signature must be countersigned by a transfer
agent or transfer clerk.
Section 7. REPRESENTATIONS OF SHARES OF OTHER CORPORATIONS. The
president or any vice president and the secretary or assistant secretary of this
corporation are authorized to vote, represent and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority herein
granted to said officers to vote or represent on behalf of this corporation or
corporations may be exercised either by such officers in person or by any person
authorized so to do by proxy or power of attorney duly executed by said
officers.
Section 8. INSPECTION OF BY-LAWS. The corporation shall keep in its
principal office for the transaction of business the original or a copy of the
By-Laws as amended, or otherwise altered to date, certified by the secretary,
which shall be open to inspection by the shareholders at all reasonable times
during offices hours.
Section 9. INDEMNIFICATION. The corporation shall indemnify its
officers and directors for any liability including reasonable costs of defense
arising out of any act or omission of any officer or director on behalf of the
corporation to the full extent allowed by the laws of the state of Utah.
ARTICLE VII.
Amendments
Section 1. POWER OF SHAREHOLDERS. New By-Laws may be adopted or these
By-Laws may be amended or repealed by the vote of the shareholders entitled to
exercise a majority of the voting power of the corporation or by the written
assent of such shareholders.
Section 2. POWER OF DIRECTORS. Subject to the right of shareholders as
provided in Section 1 of this Article VII to adopt, amend or repeal By-Laws,
By-Laws other than a By-Law or amendment thereof changing the authorized number
of directors may be adopted, amended or repealed by the board of directors.
Certificate of Secretary
The undersigned does hereby certify that the undersigned is the
Secretary of TAC, Inc. a corporation duly organized and existing under and by
virtue of the laws of the State of Utah; that the above and foregoing By-Laws of
said corporation were duly and regularly adopted as such by the Board of
Directors of said corporation at the first meeting of said Board, which was duly
and regularly held on the 1ST day of November, 1996, and that the above
foregoing BY-Laws are now in full force and effect.
Dated this 6TH day of February, 1996.
/s/ BonnieJean C. Tippetts, (Sec)
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BonnieJean C. Tippetts, Secretary
Exhibit "K"
CyberAmerica Corporation's Significant Agreements
For information on CyberAmerica's significant agreements, see
CyberAmerica's Form 10-KSB for the year ended December 31, 1997.