AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL __, 2006
REGISTRATION NO: 333-____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INTEGRATED MANAGEMENT INFORMATION, INC.
Colorado 0751 43-1802805
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(State of jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Code Number) Number)
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John Saunders
President, Chief Executive Officer, and Chairman of the Board of Directors
601 4th Street, Platte City, MO 64079
(816) 858-4796
(Name, address and telephone number of agent for service)
Copy to:
Hank Vanderkam
Vanderkam & Associates
1301 Travis, #1200 Houston, TX 77002
(713) 547-8900, (713) 547-8910 fax
Approximate date of commencement of proposed sale to the public: As soon as practical after the date this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
====================================================================================== Title of Each Class Proposed Maximum Proposed Maximum of Securities to Amount Offering Price Aggregate Amount of be Registered To be Registered Per Share Offering Price Registration Fee ================ ================ ============== =============== =============== Common Stock, $0.001 par value per share 17,867,515(1) $0.83 $14,830,037 $1,885.76 ================ ================ ============== =============== =============== |
(1) In the event of a stock split, stock dividend or similar transaction involving our common stock, in order to prevent dilution, the number of shares registered shall be automatically increased to cover the additional shares in accordance with Rule 416(a).
(2) The maximum offering price has been estimated solely for the purpose of determining our registration fee pursuant to Rule 457(c) as the most recent sales prices of our common stock was that offered in our last private placement which closed on February 12, 2006.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Subject to completion, dated April __, 2006
Preliminary Prospectus
The information in this prospectus is not complete and may be changed. The selling shareholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and the selling shareholders are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Integrated Management Information, Inc.
17,867,515 Shares of Common Stock
This prospectus relates to the resale of up to 17,867,515 shares of our common stock, from time to time, by some of our shareholders who purchased shares of our common stock in private placements that we completed on May 30, 2005 and February 12, 2006, shares issued for the partial conversion of a note, shares issued to our underwriter as well as the shares of our founding shareholders.
These shareholders are referred to throughout this prospectus as the "selling shareholders." The selling shareholders may sell the common stock covered by this prospectus, from time to time, directly or through agents or dealers, on terms to be determined at the time of sale. The prices at which the selling shareholders may sell their shares will be determined by the prevailing market price for the shares at the time of sale or in negotiated transactions.
The selling shareholders will receive all of the proceeds from any sales of our common stock made pursuant to this prospectus. Accordingly, we will receive no proceeds from sales of our common stock made pursuant to this prospectus. We are paying the expenses of registering the shares covered by this prospectus and preparing this prospectus, but the selling shareholders will pay any selling expenses incurred by them in connection with the shares of common stock covered by this prospectus.
Our common stock is not currently traded.
We reorganized our corporate structure on April __, 2006 to change the Company's state of Incorporation from Delaware to Colorado and increased our number of post three for two forward split shares authorized to 95,000,000 common shares $0.001 par value and 5,000,000 preferred shares $0.001 par value from 50,000,000 shares of common stock, $0.01 par value.
Investing in our common stock involves a high degree of risk. Please see the section entitled "Risk Factors" beginning on page 5 of this prospectus to read about risks you should consider before buying our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is April ___, 2006.
TABLE OF CONTENTS
Prospectus Summary.......................................................... 4 Risk Factors................................................................ 5 Special Note Regarding Forward-Looking Statements........................... 9 Use of Proceeds............................................................. 10 Market for our Common Stock and Related Shareholder Matters................. 10 Management's Discussion and Analysis of Financial Condition and Results of Operation................................................................ 10 Business.................................................................... 14 Description of Properties................................................... 19 Legal Proceedings........................................................... 19 Directors, Executive Officers and Significant Employees..................... 19 Executive Compensation...................................................... 22 Certain Relationships and Related Transactions.............................. 23 Security Ownership of Certain Beneficial Owners and Management.............. 24 Description of Common Stock................................................. 25 Indemnification For Securities Act Liabilities.............................. 26 Selling Shareholders........................................................ 28 Plan of Distribution........................................................ 29 Legal Opinion............................................................... 29 Experts..................................................................... 29 Additional Information...................................................... 29 Index to Financial Statements............................................... 30 |
Dealer Prospectus Delivery Obligation
Until ________ 2006 (90 days from the date of this prospectus), all dealers that effect transactions in these securities, whether or not participants in this offering, may be required to deliver a prospectus.
We have not authorized any dealer, salesperson or other person to give you any information or to make any representations to you, other than those contained or incorporated by reference in this prospectus, in connection with the offer contained in this prospectus and, if given or made, you should not rely on such information or representations as having been authorized by us.
Neither the delivery of this prospectus nor any sale made pursuant to it shall under any circumstance create an implication that there has been no change in our affairs since the date of this prospectus. This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, securities other than those specifically offered hereby or of any securities offered hereby in any jurisdiction where, or to any person to whom, it is unlawful to make such offer or solicitation. The information contained in this prospectus speaks only as of the date of this prospectus unless the information specifically indicates that another date applies.
This prospectus has been prepared based on information provided by us and by other sources that we believe are reliable. In addition, this prospectus summarizes certain documents and other information in a manner we believe to be accurate, but we refer you to the actual documents, if any, for a more complete understanding of the documents that we discuss in this prospectus. In making a decision to invest in our common stock, you must rely on your own examination of our company and the terms of the offering and the common stock, including the merits and risks involved.
We are not making any representation to you regarding the legality of an investment in the common stock by you under any legal investment or similar laws or regulations. You should not consider any information in this prospectus to be legal, business, tax or other advice. You should consult your own attorney, business advisor and tax advisor for legal, business and tax advice regarding an investment in the common stock.
In this prospectus, "Integrated Management Information, Inc." "the company," "we," "us" and "our" refer to Integrated Management Information, Inc., a Colorado corporation, unless the context otherwise requires. In this prospectus, the "Securities Act" refers to the Securities Act of 1933, as amended.
The following summary highlights important information about the offering of common stock covered by this prospectus, but it may not contain all of the information that is important to you. You should read this summary only in conjunction with the more detailed information regarding this offering, our company, our common stock and our financial statements appearing elsewhere in this prospectus, including the section entitled "Risk Factors" beginning on page 5 of this prospectus.
PROSPECTUS SUMMARY
Our Company
We were organized to apply information technology and electronic documentation management to the livestock industry by addressing the growing importance to the industry (producers, processors, and customers) of detailed information regarding identification, traceability, and verification of marketing claims such as: source of origin information, genetic background, animal treatment, animal health history, animal age, animal movements, nutrition, and other credence attributes (those claims made that can not be confirmed by visual inspection once the product reaches the meat case and is marketed to the consumer). To address this demand, we developed a range of proprietary computer software, consulting methodologies, auditing processes, and other services to allow the livestock industry to record, manage, report, and audit this information .
General
Our principal executive offices are located at 601 4th Street, Platte City, Missouri 64079. Our telephone number is (816) 858-4796. Our website address is www.imiglobal.com.
Shares Being Registered
The Private Placements
We completed two private placements of securities on May 30, 2005 and February 12, 2006, respectively in which we sold shares of our common stock. In the May 30, 2005 Private Placement, we sold 928,796 shares of our common stock at $0.91 per share and the founding shareholders and two members of the Company's Board of Directors directly sold 442,860 shares. In the February 12, 2006 Private Placement, we sold 1,585,400 shares of our common stock at $1.25 per share. Simultaneously, the Company purchased 5,500,000 shares, 4,800,000 from the founding shareholders at $0.075 per share and 800,000 from two members of the Board of Directors for $0.75 per share.
We offered and sold the shares in reliance on Section 4(2) of the Securities Act. In connection with the sale, the selling shareholders represented to us that they were "accredited investors" within the meaning of Regulation D promulgated under the Securities Act.
Other Shares Being Registered
We are also registering 6,091,427 shares issued to our founding shareholders, 2,663,186 shares for the conversion of notes and options associated with the notes, and 200,000 shares issued to our underwriters.
In February 2006, our shares were split on a three for two basis. Therefore, the number of shares being registered is 150% of the afore-referenced number. Of the "Other Shares", a significant number of these shares have been gifted to third parties. See "Selling Shareholders".
The Offering
Issuer: Integrated Management Information, Inc.
Securities Offered: The selling shareholders are offering up
to 17,867,515 shares of our common stock.
The shares consist of 17,867,515 outstanding shares
of common stock that we sold in private placements
and shares originally issued to our founders
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OTC Symbol: "________"
Securities Outstanding: As of April 15, 2006, 17,867,515 shares
of our common stock were issued and
outstanding. This
number represents the three (3) for
two (2) forward split approved by
the shareholders on February 14,
2006.
Use of Proceeds: We will not receive any proceeds from
sales of our common stock covered
by this prospectus. The selling
shareholders will receive all proceeds
from sales of common stock covered by this
prospectus.
Offering Price: The offering
price for the shares of
common stock covered by
this prospectus will be
determined by the
prevailing market price
for the shares at the
time of their sale or in
negotiated transactions.
Risk Factors: An investment in our common stock
is highly speculative. You should read the
"Risk Factors" section beginning on page 9
of this prospectus (along with other
matters referred to and incorporated by
reference in this prospectus) to ensure
that you understand the risks associated
with a purchase of our common stock.
Terms of Sale: The terms of sale for the shares
of our common stock covered by this
prospectus will be determined at the time
of their sale.
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Summary Financial Data
The following financial information should be read together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the audited financial statements included elsewhere in this prospectus.
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Year Ended December 31, Year Ended December
2005 31, 2004
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Statements of Operations Data:
------------------------------------- ------------------- ---------------------
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Revenues $ 957,894 $ 451,305
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Cost of Sales 534,158 160,832
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Expenses 1,390,671 238,061
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Other Income (expenses) (37,701) (11,913)
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Net income (loss) (1,004,636) 40,499
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Basic income (loss) per common share ($0.07) $3.37
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Average shares outstanding 15,358,417 12,000
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Balance Sheet: December 31, 2005 December 31, 2004
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Cash and cash equivalents $ 684,833 $ 12
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Working Capital 599,322 (67,429)
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Total assets 1,950,455 158,921
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------------------------------------- ------------------- ---------------------
Total liabilities 686,586 190,988
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------------------------------------- ------------------- ---------------------
Total shareholders' equity 1,263,869 (32,067)
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RISK FACTORS
You should carefully consider the risks described below before purchasing our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business or cause the value of our common stock to drop. If any of the following risks actually occur, our business could be adversely affected. In those cases, the trading price of our common stock could decline, and you may lose the value of your investment in our securities.
We have had a history of operating losses, and there is no assurance that we will achieve profitability in the future.
We have a history of operating losses. For our calendar year ended December 31, 2005, we experienced a net loss from continuing operations of $1,004,636 and we were unprofitable during the first quarter of 2006. It is uncertain if our future prospects will result in profitable operations and, if we experience future losses, the value of an investment in our common stock could decline significantly.
Market Acceptance of our recently introduced products is uncertain.
Although marketing research indicates that market acceptance of our recently introduced products is likely, market adoption is not certain. The Company can offer investors no assurances that its products will generate sufficient revenues to support a profitable business. If sales are inadequate, revenues may not be sufficient to sustain our business, which may result in cessation of operations.
A significant portion of our projected near-term revenue growth is contingent upon strong sales of USVerified Source and Age Verification System
We are currently benefiting from a slow but growing movement among US beef producers to source verify beef products. The emerging trend is fueled in part by anticipation of the reopening of US beef export trade with Japan and other countries. The Company, however, can offer investors no assurances that trade barriers to US beef exports, especially with respect to Japan, will be lifted nor can the Company estimate the timing of the resumption of US beef export trade with certain countries should it occur. In the event that trade restrictions for meat exports to certain countries are not lifted, we may not be able to achieve revenue growth as planned, thus jeopardizing our viability as a profitable entity.
Unless the Japanese market for US Beef reopens, there is a limited U.S. market for our products.
As a result of mad cow disease in at least one animal in the U.S., the Japanese beef market was closed to U.S. cattle and has been so far a protracted period except for a few weeks in December 2005 and January 2006. Because the Japanese market is the largest beef export market for U.S. producers and because the Japanese market requires verification, it is important to the sale of our products. Because the U.S. market does not mandate verification, there is limited incentive for beef producers to purchase our products. Therefore, unless the Japanese market for U.S. beef reopens, our sales will be significantly impaired and we will be unable to operate at a profit.
In the event that market demand for beef products declines, our customers may not be able to generate sufficient revenues to justify purchase of our verification solutions and consulting services
Public attitudes towards beef may be influenced by claims that beef products are unsafe for consumption or pose unknown health risks. Decreased demand for beef products could have a material adverse affect on the operating results and financial condition of our existing or prospective customers. If operating results are impaired, the resources that our customers can devote to building information systems for tracking cattle and herd management would be reduced which in turn would limit purchases of our verification solutions and consulting services, our ability to generate revenue is subject to risks and uncertainties relating to the financial condition of its customers.
Our future success in part depends upon our ability to establish strategic partnerships and joint ventures for the marketing of its products and services
We can offer investors no assurance that we can successfully establish and maintain long-term strategic relationships with key marketing partners under conditions that are favorable to the Company. Furthermore, collaborative arrangements with third parties may subject us to a number of risks. Agreements with collaborative partners typically allow partners significant discretion in electing whether or not to pursue any of the planned activities. The Company cannot control the amount and timing of resources that its collaborative partners may devote to joint activities. Our partners may not perform their obligations as expected. Business combinations or significant changes in a collaborative partner's business strategy may adversely affect a partner's willingness or ability to perform its obligations under the arrangement.
Moreover, we could become involved in disputes with our partners, which could lead to delays or termination of the collaborations and litigation or arbitration. If collaborative arrangements fail to meet expectations, our chances of successfully commercializing our products may be adversely impacted.
Our future success depends upon our ability to obtain and enforce patents; prevent others from infringing on our patents, trademarks and other intellectual property rights; and operate without infringing upon the patents and proprietary rights of others.
We will be able to protect our intellectual property from unauthorized use of third parties only to the extent that it is covered by valid and enforceable patents and trademarks. Patent protection generally involves complex legal and factual issues and, therefore, the enforceability of patent rights cannot be predicted with certainty. Moreover, the laws of some foreign countries do not protect proprietary rights to the same extent as the laws of the United States. In the event that patents owned by us do not provide adequate protection, we may not able to prevent competitors from offering substantially similar products and services. Failure to protect our proprietary rights could seriously impair our competitive position.
In the event that third parties claim that our current or future products or services infringe upon their intellectual property, we may face litigation and be prevented from selling the products and services at issue. Infringement or other claims could be asserted or prosecuted against us in the future, and it is possible that past or future assertion or prosecutions could harm our business. Litigation either in defense of our intellectual property rights or in response to infringement claims made by others may be expensive and involve substantial costs.
We operate in a highly competitive industry characterized by changing technology, frequent introductions of new products and product enhancements, and evolving industry standards.
We compete with many other vendors of software products and services designed for tracking cattle and for herd management. Our competitors range from small start-up companies to large multi-national firms. A number of existing competitors have significantly greater financial, technical and marketing resources. Competition is likely to intensify as current competitors expand their product offerings and as new companies enter the market. Increasing competition may result in reduced margins and the loss of market share. Our competitors may offer broader product lines or technologies that are more commercially attractive and gain greater market acceptance than our current or future products. Additionally, new technology may render our products obsolete.
Our future success depends to a significant degree upon the continued service of key senior management personnel, in particular, John and Leann Saunders.
Both John and Leann Saunders' reputation and prominence in the field provide the Company with a strong competitive advantage. While they are currently bound by employment agreements, we can offer investors no assurance that John and or Leann Saunders will be able to continue to work for us in the event of an unforeseen accident, severe injury or major disease, or on a long-term basis. The loss of key personnel could have a material adverse effect on our business and operating results.
We may be unable to raise additional capital.
We will not receive any proceeds from the sale of the common stock covered by this prospectus. If we are unable to generate sufficient revenue for our planned operations, or if we encounter unforeseen costs, we will need to raise additional capital. We can give no assurances that additional capital will be available to us on favorable terms, or at all. Our inability to obtain additional capital, if and when needed, would have a material adverse effect upon our financial condition and our ability to continue to conduct our operations.
We may not be able to recruit and retain the experienced personnel needed to compete in the industry.
We compete with many other companies for experienced personnel. Management can offer investors no assurance that we will be able to continue to be successful in attracting and retaining qualified personnel.
New corporate governance requirements are likely to increase our costs and make it more difficult to attract qualified directors.
We face new corporate governance requirements under the Sarbanes-Oxley Act of 2002, as well as rules adopted by the Securities and Exchange Commission. We expect that these laws, rules and regulations will increase our legal and financial compliance costs and make some activities more difficult, time-consuming and costly. We also expect that these new requirements will make it more difficult and more expensive for us to obtain director and officer liability insurance. We may be required to accept reduced coverage or incur significantly higher costs to obtain coverage. These new requirements are also likely to make it more difficult for us to attract and retain qualified individuals to serve as members of our board of directors or committees of the board.
We are not presently subject to the same corporate governance standards as companies listed on registered stock exchanges or NASDAQ.
Registered stock exchanges and NASDAQ have enhanced corporate governance requirements that apply to issuers that list their securities on those markets. Our common stock is quoted on the OTC Bulletin Board, which does not have comparable requirements. For instance, we are not required to have any independent directors or to adopt a code of ethics. In certain circumstances, management may not have the same interests as the shareholders and conflicts of interest may arise. We do not presently have a policy to resolve conflicts of interest. Notwithstanding the exercise of their fiduciary duties as directors and executive officers and any other duties that they may have to us or our other shareholders in general, these persons may have interests different than yours.
Risks Related to Owning Our Common Stock
There is limited liquidity on the OTC Bulletin Board.
We plan to apply for the listing of our shares on the OTC Bulletin Board. When fewer shares of a security are being traded on the OTC Bulletin Board, price volatility may increase and price movement may outpace the ability of the OTC Bulletin Board to deliver accurate quote information. Due to lower trading volumes in our common stock, there may be a lower likelihood of orders for shares of our common stock being executed, and current prices may differ significantly from prices quoted by the OTC Bulletin Board at the time of order entry.
Our common stock is subject to the penny stock rules.
The term "penny stock" generally refers to low-priced, speculative securities of very small companies. Before a broker-dealer can sell a penny stock, Securities and Exchange Commission rules require the broker-dealer to first approve the customer for the transaction and receive from the customer a written agreement for the transaction. The broker-dealer must furnish the customer with a document describing the risks of investing in penny stocks. The broker-dealer must tell the customer the current market quotation, if any, for the penny stock and the compensation the broker-dealer and its broker will receive for the trade. Finally, the broker-dealer must send monthly account statements showing the market value of each penny stock held in the customer's account. These requirements make penny stocks more difficult to trade. Since our common stock is subject to the penny stock rules, the market liquidity of our common stock may be adversely affected.
There may be a greater risk of fraud on the OTC Bulletin Board.
OTC Bulletin Board securities are frequently targets for fraud or market manipulation. Dealers may dominate the market and set prices that are not based on competitive forces. Individuals or groups may create fraudulent markets and control the sudden, sharp increase of price and trading volume and the equally sudden collapse of market prices. If this should occur, the value of an investment in our common stock could decline significantly.
You could suffer substantial dilution and our stock price could decline if we issue additional securities in the future or if current holders of our securities choose to sell a large portion of their holdings at the same time.
Our common stock may not continue to be traded on the OTC Bulletin Board.
We cannot provide any assurance that our common stock will continue to trade on the OTC Bulletin Board. Should our common stock cease to trade on the OTC Bulletin Board and fail to qualify for listing on another stock exchange or trading system, our common stock would be listed for trading only on the "Pink Sheets," which generally provide an even less liquid market than the OTC Bulletin Board. In such event, shareholders may find it more difficult to trade our common stock or to obtain accurate, current information concerning market prices for our common stock.
We do not plan to pay dividends on our common stock.
We do not anticipate paying cash dividends to the holders of our common stock in the foreseeable future. Accordingly, investors in our common stock must rely upon subsequent sales after price appreciation as the sole method to realize a gain on an investment in our common stock. There are no assurances that the price of our common stock will ever appreciate in value. Investors seeking cash dividends should not buy our common stock.
It can be difficult to edit or cancel orders on the OTC Bulletin Board, which may impair your ability to sell our common stock at a favorable price.
Orders for OTC Bulletin Board securities may be canceled or edited like orders for other securities. All requests to change or cancel an order must be submitted to, received and processed by the OTC Bulletin Board. Due to the manual order processing involved in handling OTC Bulletin Board trades, order processing and reporting may be delayed. As a result, it may not be possible to edit orders. Consequently, it may not be possible to sell our common stock at a favorable price.
Increased dealer compensation could adversely affect the price of our common stock.
The dealer's spread (the difference between the bid and ask prices) may be large and may result in substantial losses to the seller of shares of our common stock on the OTC Bulletin Board if such stock must be sold immediately. Further, purchasers of our shares of common stock may incur an immediate "paper" loss due to the price spread. Moreover, dealers trading on the OTC Bulletin Board may not have a bid price for shares of our common stock on the OTC Bulletin Board. Due to the foregoing, demand for our shares of common stock on the OTC Bulletin Board may be decreased or eliminated.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Except for historical facts, the statements in this prospectus are forward-looking statements. Forward-looking statements are merely our current predictions of future events. These statements are inherently uncertain, and actual events could differ materially from our predictions. Important factors that could cause actual events to vary from our predictions include those discussed under the headings "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business." We assume no obligation to update our forward-looking statements to reflect new information or developments. We urge readers to review carefully the risk factors described in this prospectus and the other documents that we file with the Securities and Exchange Commission. You can read these documents at www.sec.gov.
We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, or to reflect any events or circumstances after the date of this prospectus or the date of any applicable prospectus supplement. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements made are reasonable, ultimately we may not achieve such plans, fulfill such intentions or meet such expectations.
Use of Proceeds
We will not receive any proceeds from the sale of our common stock covered by this prospectus. The selling shareholders listed on pages 26 through 28 will receive all of the proceeds covered by this Prospectus.
Market for Common Stock and Related Shareholder Matters
There is presently no market for our common stock. None of our common stock is subject to outstanding options or warrants to purchase our shares, except those granted under the 2005 Stock Option Plan (1,462,500), warrants issued to our placement agent (297,810), options issued in connection with our purchase of Cattlefeeding.com (225,000), options to our founders as part of an arrangement whereby they sold 4,800,000 (pre-split) shares to the company for $0.075 per share (6,000,000), and 2006 options granted to the CFO (1,650,000) for a total of 9,635,310 options and warrants. There are 17,867,515 shares of our common stock outstanding, all of which are restricted securities. The restricted securities as defined under Rule 144 of the Securities Act may only be sold under Rule 144 or otherwise under an effective registration statement or an exemption from registration, if available. Rule 144 generally provides that an affiliate, including directors, officers and control shareholders, who have satisfied a one year holding period for the restricted securities may sell, within any three month period subject to certain manner of resale provisions, an amount of restricted securities which does not exceed the greater of 1% of a company's outstanding common stock. Sales under Rule 144 must also be made without violating the manner-of-sale provisions, notice requirements, and the availability of public information about us. A sale of shares by such security holders, whether under Rule 144 or otherwise, may have a depressing effect upon the price of our common stock in any market that might develop.
Penny stock considerations
Our common stock is expected to trade on the over-the-counter electronic bulletin board or on the Pink Sheets and, therefore, is subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934, which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a "penny stock". A penny stock is generally defined as any non-NASDAQ equity security that has a market price of less than $5.00 per share, subject to certain exceptions.
Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales requirements on broker-dealers who sell penny stocks to persons other than established customers and "accredited investors". An accredited investor is generally defined as an investor with a net worth in excess of $1,000,000, or annual income exceeding $200,000 individually or $300,000 together with a spouse.
Transfer Agent and Registrar
We have appointed Corporate Stock Transfer, Inc. of Denver, Colorado to be the registrar and transfer agent for our common shares.
Dividends
We have never declared or paid cash dividends on our capital stock, and we do not plan to pay any cash dividends in the foreseeable future. We currently intend to retain any future earnings to finance our operations and future growth.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
We are engaged in the business of livestock tracking and herd management verification solutions and consulting services for the livestock and the meat industry, and we maintain an internet portal dedicated to publishing news and trends in the agricultural industry and marketing products to this industry.
The following discussion and analysis contains forward-looking statements, which involve risk and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward looking statements.
Overview
We were incorporated in 1998 as a Missouri corporation. In March, 2005, we reincorporated in Delaware, and in April 2006, we changed our domicile from Delaware to Colorado.
Until December 31, 2004 we were structured as a Subchapter S corporation, as that term is defined in the Internal Revenue Code of 1986, as amended, with all income or loss passed through to the shareholders. Beginning on January 1, 2005 we converted to a Subchapter C corporation and began to be directly subject to income taxation.
On May 12, 2005, we completed an acquisition of the assets and assumed certain liabilities of Cattlefeeding.com, Inc. which owned and operated the Cattlenetwork.com and the Cattlestore.com websites and published an electronic newsletter. The sales, costs, and expenses resulting from this acquisition have been included in our results of operations since the acquisition date. Therefore, approximately 7 1/2 months of the results of operations of these acquired businesses are included in our financial statements for the year ended December 31, 2005.
As set forth in Description of Business-Industry Background, customer demand for our solutions is, to a large extent supported by the U.S. beef industry's voluntary participation in quality verification programs related to the export of beef to international markets, including Japan, Mexico, South Korea, Canada and Europe. Subsequent to the discovery of the first case of mad cow disease in the U.S. in December, 2003, the governments of these and other countries banned the import of beef from the U.S. Since that time, based on increased confidence resulting from implementation of quality verification programs (such as those offered by us), some of these key export markets have reopened, but the Japan market, which has historically been the largest, has remained closed (with the exception of a brief period during December 2005 to January 2006). The opportunity to participate in export markets presents a strong indicator of potential demand for approved verification processes, which have become essential. However, during the time in which the export markets are closed, demand for solutions to comply with these regulatory requirements is constrained.
Results of Operations
Year Ended December 31, 2005 Compared to Year Ended December 31, 2004
Revenues. Revenues are derived from our sales of our USVerified solutions customized product and service offerings, related hardware products, and advertising and subscriptions related to our internet-based online services. Revenues for the year ended December 31, 2005 were $957,894, an increase of 112% over the 2004 amount of $451,305. The primary reason for the increase in sales was the mid-2005 launch of our USVerified offerings. In addition, approximately 12% of 2005 sales were attributable to revenues from internet-based online services (Cattlenetwork.com and Cattlestore.com), which were acquired on May 12, 2005 and, therefore were not part of 2004 results. Sales of our USVerified solutions represented a substantial proportion [43%] of revenues during 2005 and are anticipated to continue to be so in the future. As set forth in Description of Business--Industry Background, we believe that customer demand for its USVerified solutions is substantially dependent upon the reopening of key export markets.
Cost of Sales and Gross Margin. Cost of sales for the year ended December 31, 2005 were $534,158, an increase of 232% over the 2004 amount of $160,832. Gross margin decreased to 44% of revenues for 2005 compared to 64% for 2004. A principal reason for this increase in cost of sales and corresponding decrease in gross margin percentage was that the 2005 amount includes an allocation for salaries paid to our founders. Prior to our conversion from a Subchapter S corporation to a Subchapter C corporation under the Internal Revenue code on January 1, 2005, these individuals received a substantial portion of their compensation ($120,686 during 2004) as dividends (which are not included in cost of sales) rather than salary. In addition, during 2005 there was a substantial increase in the amount of revenue from sales of hardware, which carries a lower gross margin percentage. We anticipate that in the future, sales of our USVerified solutions will constitute an increasing proportion of overall revenue, which will result in a corresponding increase in overall gross margin percentage due to the comparatively higher margins derived from USVerified relative to our other product and service offerings.
Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended December 31, 2005 were $1,390,671, an increase of 484% over the 2004 amount of $238,061. The largest component of this increase was salaries, wages, and benefits, resulting from i) a substantial increase in our headcount associated with launch of the USVerified offering, ii) addition to the headcount related to acquisition and continued growth of our internet-based online services operations (Cattlenetwork,.com and Cattlestore.com), and iii) allocation of salaries paid to our founders (as described under Cost of Sales above). Our expenses for contracted services and travel & entertainment increased substantially from 2004 to 2005, primarily as a result of the launch of the USVerified offering. Additionally, our general and administrative expenses have increased due to human resource, professional services, and other costs related to our anticipated filing of a Registration Statement.
Other Income (Expense). Net other expense for the year ended December 31, 2005 increased to $37,701 compared to $11,913 for the year ended December 31, 2004. The increase during 2005 was primarily attributable to interest paid on the Promissory Note (which was issued in October 2004 and retired in May 2005), the Cattlefeeding.com Note (which was issued in May 2005), and increased borrowings under our line of credit (see Liquidity and Capital Resources and Notes to Financial Statements - Note 4 Notes payable),
Net Income (Loss). As a result of the foregoing, the net loss for the year ended December 31, 2005 was $1,004, 636, compared to net income of $40,499 for the year ended December 31, 2004.
Liquidity and Capital Resources
At December 31, 2005, we had cash and cash equivalents of $684,833 and working capital of $599,322 compared to $12 of cash and negative working capital of $67,429 at December 31, 2004. At December 31, 2005 we had restricted cash of $471,664, including $421,664 held in escrow for the purchase of treasury stock and a $50,000 certificate of deposit held as collateral pursuant to our line of credit. We had no restricted cash at December 31, 2004. Net cash used by operating activities during the year ended December 31, 2005 was $869,783 compared to $16,679 provided by operating activities during the year ended December 31, 2005 was $156,634, compared to $12,983 during the year ended December 31, 2004. Net cash provided by financing activities during the year ended December 31, 2005 was $1,711,238 compared to $2,960 used by financing activities during the year ended December 31, 2004. As described below, investing activities during 2005 included acquisition of assets and certain liabilities of Cattlefeeding.com. Financing activities during 2005 included two private placements of Common Stock and borrowings under our line of credit, which were partially offset by payments under a Promissory Note and purchase of treasury stock.
The principal reason for the change in cash provided by (used in) operating activities was the change in earnings from $40,499 to a loss of $1,004,636. This change was partially offset by an increase of $28,830 in non-cash expenses and changes in the current accounts.
Accounts receivable increased to $241,304 at December 31, 2005, compared to $67,633 at December 31, 2004. Days sales outstanding (DSO) increased to 92 days at December 31, 2005 compared with 55 days at December 31, 2004. The increase in accounts receivable and DSO during 2005 was primarily attributable to the increased level of USVerified revenues during the last two months of 2005 (which had not yet been collected as of December 31, 2005) substantially resulting from the temporary opening of the Japanese beef export market (see "Description of Business - Industry Background").
As of December 31, 2005 we had inventory of $9,950 compared with no inventory as of December 31, 2004. The inventory was acquired in November and December 2005 in anticipation of the opening of the Japanese market to U.S. beef and consists principally of identification tags.
We had no prepaid expenses as of December 31, 2005, but $55,914 as of December 31, 2004. All of the prepaid expenses were pre-paid advertising.
Accounts payable and accrued expenses increased to $190,030 at December 31, 2005, compared to $18,318 at December 31, 2004. The increase in accounts payable and accrued expenses was primarily attributable to an increased employee headcount, contracted services, and other expenses resulting from the market introduction of our USVerified solutions.
Deferred revenue at December 31, 2005 was $46,556, compared to $0 at December 31, 2004. The increase in deferred revenue was attributable to payments received under consulting contracts that were in process, but not yet completed, as of December 31, 2005.
Investing activities for the year ended December 31, 2005 included the acquisition of assets and certain liabilities of Cattlefeeding.com for a total purchase price of $515,000 ($150,000 cash plus additional consideration as described below). We do not have any future material commitments for capital expenditures.
Net financing activities for the year ended December 31, 2005 included the partial conversion to equity and partial repayment of a Promissory Note, sale of Common Stock under options related to the Promissory Note, two private placements of Common Stock, and additional borrowings under our line of credit. These transactions are discussed below.
In January 2005, in connection with the conversion from a Subchapter S Corporation to a Subchapter C Corporation under the Internal Revenue Code of 1986, as amended and conversion of outstanding principal and interest under the Promissory Note, under which interest was payable at 10% per annum, in the principal amount of $75,000 (75% of the total principal amount of $100,000), we issued 10,968,000 shares to our founders and 944,700 shares to the holders of the Note. Concurrently, the holders of the Note exercised options to purchase an aggregate of 2,745,300 shares of Common Stock from us for $217,855 cash.
In May 2005, in connection with repayment of the remaining $25,000 outstanding principal, interest and options under the Promissory Note, we paid $50,000 and issued 27,473 shares to the holder of the Note.
In May 2005, we completed a private placement offering under which we issued 928,796 shares of Common Stock for cash at $0.91 per share, which resulted in proceeds of $668,423, net of issuance costs of $176,777. The offering also included 442,860 shares which were sold directly by selling shareholders for which we did not receive any proceeds. Additionally, 200,000 shares of Common Stock and warrants to purchase 40,000 shares of Common Stock at $0.91 per share expiring in May 2009 were issued by us to the placement agent in connection with the offering.
In May 2005, in connection with the acquisition of assets and certain liabilities of Cattlefeeding.com we issued a promissory note in the amount of $350,000 payable with interest at a rate of 5% per annum. The note is payable with monthly payments of interest only for thirty-six months. The balance of the note and any unpaid interest will become due 37 months after closing. In addition, we granted 150,000 options to purchase our Common stock, valued pursuant to FAS 123 at $15,000.
In October 2005, we began a second private placement offering to sell a minimum of 800,000 and a maximum of 4,000,000 shares of Common Stock at $1.25 per share with net proceeds to be used for working capital, general corporate purposes and repurchases of Common Stock up to 5,500,000 shares from certain existing, related-party shareholders. Pursuant to this offering, in December 2005, we issued 1,110,400 shares of Common Stock for cash at $1.25 per share, which resulted in proceeds of $1,283,900, net of issuance costs of $104,100. Additionally, warrants to purchase 158,540 shares of Common Stock at $1.25 per share expiring in December 2009 were issued to the placement agent in connection with the offering. This offering was completed in February 2006.
We increased its borrowings under its Line of Credit with Platte Valley Bank to $100,000 at December 31, 2005 from $72,670 at December 31, 2004.
We believe that we have sufficient cash on hand to fund our operations during 2006. However, if the US beef export markets, particularly that of Japan (see "Description of Business - Industry Background"), remain closed we may require additional capital to support our operations during the next 12 months. We may not be successful in our efforts to raise this additional capital. At the present time, we do not have commitments for any such additional capital, and there can be no assurance that, if needed, additional capital will be available to us on commercially acceptable terms, or at all.
Critical Accounting Policies and Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported. The estimates that required management's most difficult subjective or complex judgments are described below.
Impairment of Goodwill
We recorded goodwill as a result of the acquisition of Cattlefeeding.com, Inc. Following the end of 2005, an assessment was made whether any of the goodwill recorded had been impaired. After an assessment by us and review by the independent accountants, no impairment charge was taken.
Allowance for Doubtful Accounts
The allowance for doubtful accounts is based on management's best assessment of our outstanding receivables.
ORGANIZATION WITHIN THE LAST FIVE YEARS
Integrated Management Information, Inc. was incorporated in 1998 as a Missouri corporation. In March, 2005, we reincorporated in Delaware and in April 2006 we redomiciled to Colorado.
Until December 31, 2004 we operated as a Subchapter S corporation under the Internal Revenue Code of 1986, as amended, with any income or loss passed through to the shareholders for income tax purposes. Beginning January 1, 2005 we converted to a Subchapter C corporation and became subject to income taxation.
Description of Business
Overview and Business Development
We were organized to apply information technology and electronic documentation management to the livestock industry by addressing the growing importance to the industry (producers, processors, and customers) of detailed information regarding identification, traceability, and verification of marketing claims such as: source of origin information, genetic background, animal treatment, animal health history, animal age, animal movements, nutrition, and other credence attributes (those claims made that can not be confirmed by visual inspection once the product reaches the meat case and is marketed to the consumer). To address this demand, we developed a range of proprietary computer software, consulting methodologies, auditing processes, and other services to allow the livestock industry to record, manage, report, and audit this information.
In May 2005, we acquired certain assets and liabilities of Cattlefeeding.com, Inc., an entity which operated Cattenetwork.com, an internet-based online service providing news and information about the North American cattle industry. Cattlenetwork.com contributes revenues from its e-commerce activities (Cattlestore.com), paid subscriptions, and advertising.
Industry Background
As the cattle livestock industry has matured and expanded internationally, there has been an increasing need to record, manage, report and audit information regarding the source, age, genetic background, nutrition, and other credence attributes of livestock for the benefit of producers, processors, distributors, retailers, consumers, and regulators.
Demand for livestock identification, traceability and verification solutions further accelerated in recent years due to industry and consumer concerns regarding bovine spongiform encephalopathy (mad cow disease) governmental and industry regulations regarding recordkeeping for livestock, and technology, and technology advances, including radio frequency ID tags for livestock and web-based systems facilitating real-time data entry and reporting.
Many of the world's largest beef exporting countries, including Brazil, Argentina, and Australia, have established mandatory traceability and verification standards. Other countries have issued voluntary animal identification and traceability standards. The United States lags with regards to meeting this market demand, as the United States government has not to date established voluntary or mandatory traceability and verification standards. Currently, the Agriculture and Plant Health Inspection Services Agency ("APHIS") is working on the development of recommended voluntary animal identification and traceability standards. However, the estimated time for launch is not until January 2009.
To support industry driven marketing programs and to comply with regulations established by international export partners, the United States Department of Agriculture ("USDA"), Agriculture Marketing Service, Audit, Review and Compliance Branch has established the voluntary Quality System Assessment, Non Hormone Treated Cattle, and Process Verified programs based on ISO 9000 Standards. These programs provide guidelines and structure to enable suppliers of agricultural products and services to assure customers of their ability to provide consistent quality products or services by having their processes audited by independent, third-party audits using USDA approved methodologies and standards.
The USDA's Quality System Assessment (QSA) program is a documented quality management system and verification trail that can support specific product claims or customer requirements, as well as confirm compliance with export standards. The approved QSA must show that characteristics of the product are being monitored and measured accurately. Approved QSA programs are audited by the USDA at least twice per year.
The USDA's Process Verified Program ("PVP") is similar to the QSA program, but broader in scope. Like the QSA, PVP ensures that companies deliver products that meet stated product claims. In addition, it provides beef suppliers with a verifiable marketing tool. Once marketing claims are verified by the USDA, the company may use the "USDA Process Verified" shield on its marketing materials.
Both Quality Systems Assessment and Process Verification Programs are applicable to a company's entire program or certain portions of its programs where specified producer or product requirements are supported by a document quality management system and the documented delivery processes are verified through an independent, third party audit. To operate an approved program, suppliers must submit a documented quality management system to the Audit Review and Compliance Branch of the USDA Livestock and Seed Program and successfully pass a document review and an on-site audit.
Within the United States, these USDA programs are voluntary and are primarily useful in providing the industry with a process for demonstrating source, age, and quality attributes as the product moves through the supply chain. In addition, compliance with the programs allows producers to verify claims such as "all natural," "non-hormone treated," or "guaranteed tender."
To market beef products outside of the United States, suppliers must comply with the QSA and PVP policies and procedures and address the specified product requirements addressed in the USDA Export Verification ("EV") Program specific to each country. Regardless of final export destination or specific Export Verification program requirements, US suppliers seeking to sell beef products must participate in a pre-approved Quality System Assessment so as to have an approved means of verifying source, age, and other specific product requirements. Therefore, though the program is voluntary, it is mandatory to gain access to export markets.
To market beef products in Japan, Mexico, South Korea, Canada and Europe, the world's largest export markets, beef is required to be sourced from cattle that are of a certain maximum age at the time of slaughter. The USDA QSA program is the standard mechanism for verifying source and age for these export markets and, therefore, is a mandatory requirement for producers, packers, and distributors to sell beef products for export to these key markets.
These export markets represent a significant opportunity for the US cattle industry. Prior to the discovery of the first case of mad cow disease in the US in December 2003, the USDA estimated that the industry exported approximately $2.8B to Japan, Mexico, South Korea, and Canada. The governments of these and other countries responded to the discovery by forbidding import of beef from the US, and exports to these countries fell to approximately $0.4B during 2004. In large part because of implementation of the USDA QSA initiatives export partners' confidence in the US cattle supply increased, and many key export markets reopened, including Mexico, Hong Kong, Singapore, and Taiwan. In December 2005, Japan lifted its ban on imported US beef, but reinstated it in January 2006 after an inspection revealed a case of non-compliance with the Japanese import regulations. Current beef consumption within the US has not changed over the past 20 years, while the productivity of the US beef industry continues to improve. Therefore, international market access and growth is critical for the US beef industry. Future growth opportunities for US protein lie in consumption growth internationally, as only 2% of the world's population resides in the US.
The opportunity to participate in export markets presents a strong indicator of potential demand for approved verification processes, which have become essential. However, during the time in which the export markets are closed, demand for solutions to comply with these regulatory requirements is constrained.
The Business
To address the livestock industry's requirements to deploy and maintain identification, traceability, and verification systems and to facilitate participation in and compliance with the USDA's Quality System Assessment, Process Verification, and Beef Export Verification Programs, we have developed and offer a balanced portfolio of products and services. These solutions address specific requirements at each level of the livestock supply chain. In addition, we offer customized solutions to address unique customer requirements. We complement these products and services with our Cattlenetwork.com and Cattlestore.com industry information services and internet portals.
Our product and services offerings are described in further detail below.
USVerified
We offer a range of products and services under our USVerified brand to track, record, manage, report, and audit key data regarding livestock. Our offerings address the needs of each industry segment, and our customers span the supply chain from birth through the various stages of feeding and raising the livestock, to packing and distribution.
Our USVerified products and services offerings are tailored to the needs of each level of the beef supply chain in support of USDA programs:
Suppliers
SupplyVerified is a consulting and auditing service offered to cattle suppliers that allows them to demonstrate their ability to efficiently and accurately track key data related to the source and age of cattle. Our SupplyVerified program was the industry's first USDA approved offsite evaluation process for cattle suppliers to meet requirements under the USDA's Quality Systems Assessment (QSA) program.
Under the SupplyVerified program, suppliers provide documentation to us about their processes for compliance with the QSA program. This documentation is evaluated and audited by us and, if warranted, we provide a certificate that the producer meets the requirements of source and age verification. We charge each cattle supplier a fixed annual fee for performing the audit and providing the certification. In order to maintain QSA certification, a supplier must participate in the annual audits.
We estimate that there are approximately 850,000 independent suppliers of cattle in the United States, of which approximately 5,000 have herds of at least 500 head.
Feed Yards
We offer solutions to enable feed yards to comply with USDA's QSA requirements. Initially, we work with the feed yard to implement the required systems and procedures to track key data regarding the cattle that move through the operation, including source and age as well as additional health and nutritional information. This service is provided and priced to feed yards on a packaged basis, which includes a license to our proprietary software and processes, implementation services, and initial training. In addition, we provide hosting services under which we maintain and manage the data created by these systems on a monthly basis.
We estimate that there are approximately 5,000 independent feed yards in the United States.
Packers
We offer solutions to meat packers, processors and distributors to demonstrate that their products comply with USDA's QSA requirements, Export Verification ("EV") requirements as well as the USDA's Process Verified Program ("PVP"), which is broader in scope than the QSA program. Suppliers with approved USDA Process Verified Programs are able to make marketing claims associated with their process verified points -- such as age, source, feeding practices, or other raising and processing claims -- and market themselves as "USDA Process Verified." This service is provided and priced to meat packers on a packaged basis, which includes a license to our proprietary software and processes, implementation services, and initial training. In addition, we provide hosting services under which we maintain and manage the data created by these systems on a monthly basis.
We estimate that there are approximately 50 independent beef packers in the United States, of which five packers constitute the majority of volume.
Consulting
In addition to our standard product offerings, we offer consulting and licenses its proprietary software and processes on a customized basis to meet special customer requirements.
Hardware
In support of these proprietary product and service offerings, we offer hardware products (primarily radio frequency identification cattle tags) to our customers. While these hardware products have lower profit margins compared with our proprietary offerings, they allow us to offer our customers a comprehensive solution.
Internet-Based Online Services
We own and operate Cattlenetwork.com, an internet-based online service providing news and information about the North American cattle industry and Cattlestore.com, an e-commerce site for customers to purchase a wide range of products and supplies related to cattle production.
We believe that Cattlenetwork.com is the largest online source of news and information regarding the North American cattle industry. In addition, Cattlenetwork publishes a biweekly newsletter that is distributed to subscribers via email. Subscriptions to our Cattlenetwork information services and newsletter are sold directly to customers on the Cattlenetwork website. Web-based and newsletter advertisements are sold directly to advertisers.
We derive revenue from our internet-based online service offerings through a combination of i) advertising sales to companies seeking to reach Cattlenetwork's unique base of readers and subscribers, ii) sales of products through Cattlestore.com, and iii) customer subscriptions. Although basic access to Cattlenetwork.com is available without charge, we offer paid subscriptions to Cattlenetwork's premium content ("Gold" and "Platinum" level subscriptions). Cattlenetwork's premium content includes more extensive coverage of news events, delayed, as well as real-time quotes and charts for commodities and related financial markets, USDA and weather reports, and articles written by a network of industry experts.
Sales and Marketing
We sell our USVerified products and services directly to customers at various levels in the livestock supply chain. Our key customers include: Smithfield, the largest U.S. pork packer and fifth largest beef packer; National Beef, the fourth largest U.S. beef packer; Harris Ranch; PM Beef Group; Creekstone Foods; US Premium Beef; America's Best Pork; Cargill Meat Solutions; Meyer Natural Angus; Land O Lakes; Purina Mills; Visa Trace; Walco Animal Health; Schering Plough Animal Health; Cargill Meat Solutions; Merial Corporation; Superior Livestock Marketing; The Beef Marketing Group; Angus GeneNet; Montana Branded Beef Association; Origen; the Missouri Department of Agriculture; the Missouri Veterinary Medical Association.
Our marketing strategy includes direct marketing, advertising, event sponsorship, and trade show participation. From a public relations perspective, our staff is frequently quoted in industry trade journals and requested as speakers at various industry events as subject matter experts on the topics of animal identification, traceability, and the USDA QSA, EV and PVP programs. We position ourselves as a recognized leader in the livestock industry and maintain strong affiliations with the Beef Information Exchange, US Meat Export Federation, National Cattlemen's Beef Association, and Livestock Marketing Association.
In order to reach additional customers, we are developing strategic marketing partnerships with leading companies in the industry with complementary abilities and products. In February 2006, we entered into two strategic alliances:
o We announced a marketing agreement with Merial, Ltd. a leading veterinary products company with $1.9B sales in 2005. Under this agreement, Merial will offer our USVerified source and age verification solutions to cattle producers together with Merial's SUREHEALTH calf preconditioning program.
o We entered into an agreement with Superior Livestock, the largest livestock auction operator in the US, under which we will assist Superior Livestock in establishing a branded QSA compliant program, Superior Verified. Under this agreement, we will offer certification and auditing solutions to Superior Livestock's cattle producers.
Competition
Our key competitors are:
AgInfolink, a privately held global information technology company that develops traceability tool for the worlds food supply. In 2005, this company also acquired the business operations of Animal Permanent Electronic Identification Systems, Inc., a leading provider of animal traceability solutions to cattle producers in the central plains and Montana.
eMerge Interactive, Inc. a technology company serving the agricultural food service and healthcare industries. Its two principal business foci are food safety technology and livestock management principally through its Inspection Control and Cattlelog Animal Information Systems.
MicroBeef Technologies, the world's largest manufacturer of computerized real-time management systems for the beef industry. Its management systems include marketing management, information systems, nutrition programs and health administration.
Sterling Solutions, an affiliate of Sterling Marketing, Inc. that offers a market driven source verification programs designed for simplicity and compliance with domestic and international standards Sterling Solutions is a USDA Process Verification Program.
Intellectual Property
We have three patents pending: Serial No. 10/278,876 - Information system and method for gathering information relating to livestock; Serial No. 10/462,169 - Livestock pricing system; Serial No. 11/190, 245 - Computer program and method for establishing, documenting, implementing and maintaining a quality management system for quality systems assessment and product verification programs.
We have been granted a trademark for Passport to Profitability, Beef Passport and Grid Max. We have filed trademark applications for Chuteside, Web Integrator, US Verified, IMI Global, the IMI Logo, Cattlenetwork and Cattlestore.
DESCRIPTION OF PROPERTIES
We lease approximately 4,000 square feet of office space in a two story building in Platte City, Missouri, a suburb of Kansas City, Missouri. Our lease expires on July 15, 2006, and we are in the process of moving our corporate headquarters to Castle Rock, Colorado. Our rent for the facility in Platte City, Missouri is $4,000 per month. We do not own or lease any other properties.
LEGAL PROCEEDINGS
We are not a party to any pending legal proceeding. We are not aware of any contemplated legal proceeding by a governmental authority or a private party involving IMI Global.
DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES
Directors
Our Bylaws provide that we have a minimum of three directors on the board at any one time. Vacancies are filled by a majority vote of the remaining directors then in office. Our directors are as follows:
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Name Age Positions Held Director Since Officer Since
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John Saunders 34 President, CEO, & Chairman of the 1995 1995
Board
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Dr. Gary Smith 67 Director 2006 -
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Adam Larson 37 Director 2006 -
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John Bellinger 51 Director 2006 -
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The directors named above will serve until the next annual meeting of our stockholders to be held within six (6) months of the close of our fiscal year or until a successor is elected and qualified. Directors are elected for one year terms.
Executive Officers
Our executive officers are as follows:
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Name Age Position
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John Saunders 34 President, CEO & Chairman of the Board
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Leann Saunders 35 Executive Vice-President of Quality Services
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Mark D. McGregor 64 Chief Financial Officer
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Cory Weaver 34 Vice-President of Information Services
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Cara Gerken 36 Vice-President of Quality Services
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Our officers devote 100% of their time to our development and operation and do not participate in any other significant business activities.
Significant Employees
Our significant employees are as follows.
Name Age Position Held
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Dusty Markham 29 Assistant Vice President, Business Development
Rob Cook 39 Director, CattleNetwork.com
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The business address for each of our officers and directors is 601 4th Street, Platte City, MO 64079.
DIRECTORS
John Saunders
(See biographic information under officers)
Dr. Gary Smith
Dr. Gary Smith is a professor in the Department of Animal Science at Colorado State University, a position he has held since 1990. Dr. Smith received his PhD in Meat Science and Muscle Biology from Texas A&M University. Dr. Smith has also taught at Washington State University, Texas A&M University and FSIS-USDA National Meat Inspection Training Center. Dr. Smith is a member of multiple professional associations and societies and has received numerous academic awards.
John Bellinger
John W. Bellinger is the CEO of Agri-West International, Inc. (AWI), which he founded in 1989. AWI is an international and domestic marketing firm offering brokerage and consulting services for the food industry and represents U.S. companies in various international markets along with trading U.S. meats internationally. In addition, AWI markets meat products in domestic supermarkets.
Mr. Bellinger received his Bachelor of Science degree from Texas A&M University in 1976. In 1978, he received a Master of Science degree in Animal Science. Mr.Bellinger is currently Chairman of the U.S. Meat Export Federation.
Adam Larson
Adam Larson has been in the cattle feeding and ranching business since 1991. He is involved in the ownership and cattle financing of eight feedyard facilities in Colorado, Kansas and South Dakota. Mr. Larson is a graduate of the University of Colorado.
OFFICERS
John Saunders, President, Chief Executive Officer and Chairman of the Board
John Saunders founded our company in 1995 and has been its president and chief executive officer since founding. Prior to establishing our company, Mr. Saunders was a partner and consultant for Pathfinder Consulting Services, Inc. in Parker, Colorado. An expert in both technology and the livestock industry, Mr. Saunders is a graduate of Yale University.
Leann Saunders, Executive Vice President of Quality Services
Leann Saunders joined IMI in 2003 and is responsible for managing the product development, implementation and delivery of the USVerified product line. Prior to 2003, Mrs. Saundersworked for PM Beef Holdings, an integrated beef company, and developed a supply system for PM's Ranch to Retail product line and managed PM's USDA Process Verified program. She then served as the company's Vice President of Marketing and Communications. Prior to joining PM in 1996, Mrs. Saunders worked for McDonald's Corporation as a Purchasing Specialist, and Hudson Foods Corporation.
Mrs. Saunders graduated with a BS in Agriculture Business and an MS in Beef Industry Leadership from Colorado State University.
Mark D. McGregor, Chief Financial Officer
Mark McGregor joined us as of February 1, 2006 as our Chief Financial Officer. From 1985 to 2005 when it was acquired by Sun Microsystems, Inc., Mr. McGregor was Vice President - Corporate Treasurer and Corporate Development for Storage Technology Corporation. Mr. McGregor holds a B.A. degree in accounting from Texas A&M University and is a Certified Public Accountant.
Cory Weaver, Vice President of Information Technologies
Cory Weaver joined us in 1999 and serves as the company's Systems Project Leader where he is responsible for overseeing our new development projects and providing technical support to existing clients. Before joining us, Mr. Weaver worked with SYS-TEC Corporation where he installed and implemented inventory management systems for the US. Air Force and Navy. A graduate of Heidelberg College, he received a BS. degree in Business Administration and is a Certified Network Engineer.
Cara Gerken, Vice President of Quality Services
Cara Gerken is responsible for new product research, development and training for the USVerified development and auditing services. Prior to joining IMI in 2005, Mrs. Gerken served as a Livestock and Meat Marketing Specialist with the U.S. Department of Agriculture. Serving in that capacity since 1994, her work included coordinating Process Verified Programs (PVP) using ISO 9000 standards and developing the Department's PVP administration policy.
Mrs. Gerken is a graduate of Kansas State University where she earned a Bachelor of Science degree in Animal Science, and she received her M.S. in food science from Oklahoma State University.
Significant Employers
Dusty Markham, Assistant Vice President, Business Development
Dusty Markham joined IMI in September 2004. His main responsibilities are sales, customer support, and data management. Prior to joining IMI, Mr. Markham served as clinical database administrator for Pfizer Animal Health where he was responsible for collecting and managing data for clinical trials and quality assurance. He holds a B.S. degree in Computer Information Systems from Friend's University and an M.S. degree in Management from Baker University.
Rob Cook, Director of Cattlenetwork.com
Rob Cook joined us as director of Cattlenetwork.com when we acquired Cattlefeeding.com, Inc. in 2005. Mr. Cook founded Cattlefeeding.com in 2001 and has operated it since inception. Prior to founding Cattlefeeding, Mr. Cook was the Assistant General Manager of Brookover Company one of the twenty largest cattle feeding companies in the U.S. Mr. Cook has a B.S. degree in Agricultural Economics and Animal Science from the University of Nebraska and a J.D. in law from Creighton University.
Executive Compensation
The following table sets forth the annual compensation paid by us to our executive officers for services to us in all capacities during calendar years 2003, 2004 and 2005.
Annual Compensation Long-Term
Compensation
Other Annual Restricted Stock
Name & Position Year Salary Bonus Compensation Awards
John Saunders 2005 $105,397 $20,348 (2)(3)
2004 - $120,686(1) 9,511 (2)
2003 - - 2,111 (2)
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(1) Subchapter S Corporation distributions (2) Health insurance (3) Automobile allowance ($12,000)
Stock options
The following table indicates the total number of stock options we granted to each named executive officers during calendar year 2005.
Options Granted During Calendar Year 2005 Individual Grants
Number of Percent of Total
Securities Options Granted
Underlying Options Employees in 2005 Exercise of Base
Name Granted (1) (1) Price ($/Share) Expiration Date
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Cory Weaver 712,500 90% 0.61 3-4-08
Cara Gerken 75,000 10% 0.61 3-4-08
------ ---
787,500 100.00%
======= =======
|
(1) Reflects the 3:2 stock split of February 2006
The following table indicates the total number of exercisable and unexercised stock options held by each named executive officers as of the close of business on December 31, 2005, and the value of those options. No named executive officer exercised stock options during calendar year 2005.
Aggregated Individual Grants/Options
Exercised in calendar year 2005
and Option Values as of
December 31, 2005
Number of Securities
Shares Acquired on Underlying Unexercised
Name Exercise No. Value Realized $ Options at 12/31/05
---- ------------ ---------------- -------------------
Exercised Unexercised
Cory Weaver 0 0 0 712,500
Cara Gerken 0 0 0 50,000
------
Total 0 0 0 787,500
= = = =======
|
Board Structure
The board of directors held five meetings during calendar year 2005. At the present time, we have no nominating, executive or compensation committees. The full board presently functions as the audit committee, and we do not have an audit committee financial expert.
Director Compensation
We presently compensate all directors by paying them $500 per meeting attending in person and $200 per telephonic meeting in excess of fifteen minutes. The some compensation applies for any committee meetings attended. In addition, directors are reimbursed for all company travel related expenses.
Certain Relationships and Related Transactions
John Saunders, the President, Chief Executive Officer and Chairman of the Board of Directors is married to Leann Saunders our Executive Vice President of Quality Services. As of December 31, 2005 Mr. Saunders was indebted to us in the amount of $1,900, which was repaid in February 2006. At December 31, 2004, Mr. Saunders owed the Company $22,197. This amount was repaid in 2005. In 2004 we recorded sales of $24,065 to the father of Leann Saunders and had an outstanding receivable as of December 31, 2004 of $21,585. This receivable was collected in December 2005. In 2005, we recorded sales of $8,005 to the father of Leann Saunders. The receivable of $8,005 was paid in April 2006. In 2005, we paid two board members, Jay Belk and JW Roth a total of $110,000 for business and investment services.
Employment Agreements
We presently have employment agreements with three persons, John Saunders our president and Chief Executive Officer; Leann Saunders our Executive Vice President of Quality Services; and Mark McGregor, our Chief Financial Officer. Below is a summary of each agreement.
John Saunders. A one year agreement, which renews annually (unless terminated by either party) and provides for an annual salary of $90,000. The agreement contains a two year covenant not to compete in the event he leaves the company and provides for normal fringe benefits and the use of a company vehicle.
Leann Saunders. A one year agreement, which renews annually (unless terminated by either party) and provides for an annual salary of $90,000. The agreement contains a two year covenant not to compete in the event she leaves the company and provides for normal fringe benefits.
Mark McGregor. A one-year agreement, which renews annually (unless terminated by either party) and provides for an annual salary of $85,000. The agreement contains a two year covenant not to compete in the event he leaves the company, provides for normal fringe benefits, and grants him 1,100,000 stock options of which 400,000 vest immediately and the remaining 700,000 at various dates between 1, 2007 and July 1, 2007.
Consulting Agreements
We have three consulting agreements, two for business development and market support and one for administrative and financial services. A summary of each agreement is detailed below.
Agreement with Jay D. Belk effective April 1, 2005. This agreement provides for business development and market support services to be rendered by Mr. Belk in exchange for $3,000 per month. The agreement will terminate twelve months after a registration statement of the Company is approved by the SEC, and becomes effective. Mr. Belk is a former director of the Company.
Agreement with JW Roth effective April 1, 2005. This agreement provides for business development and market support services to be rendered by Mr. Roth in exchange for $5,000 per month. The agreement will terminate twelve months after a registration statement of the Company is approved by the SEC, and becomes effective. Mr. Roth is a former director of the Company.
Agreement with Mark Byrne effective January 1, 2006 and ends on June 30, 2006. Under the terms of the agreement, Mr. Byrne is assisting the Company in the build out of the USVerified, Process Verified and Supply Verified Business lines and assist the company with various other administrative and financial services. For such services, Mr. Byrne is compensated $100 per hour.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of February 28, 2006, 17,867,515 shares of our common stock, $0.001 par value, were outstanding. The following tabulates holdings of our common shares by each person who, as of February 28, 2006, (a) holds of record or is known by us to own beneficially more than 5.0% of our common shares and, in addition, (b) by all of our directors and officers individually and as a group. To the best of our knowledge, each named beneficial owner who has sole voting and investment power with respect to the shares set forth opposite his name.
Name & Address of Officers &
Directors as a Group Number of Shares Percentage
-------------------- ------ ----------
John and Leann Saunders 7,977,143 44.65%
Cory Weaver 50,000 (4)
Cara Gerken 50,000 (4)
Mark McGregor -
Dr. Gary Smith 50,000 (4)
Adam Larson 60,000 (4)
John Bellinger ___-___
-------
All officers & directors as a group
(8 persons) 8,187,143 45.82%
=========
|
(1) This table is based upon information obtained from our stock records. Unless otherwise indicated in the footnotes to the above table and subject to community property laws where applicable, we believe that each stockholder named in the above table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned.
(2) John and Leann Saunders are husband and wife and own the shares as joint tenants.
(3) The address for all persons is 601 4th Street, Platte City, MO 64079
(4) Less than 1%
Change of Control
There are currently no arrangements that would result in a change of control of the company.
DESCRIPTION OF COMMON STOCK
The following description is a summary and is qualified in its entirety by the provisions of our Articles of Incorporation and Bylaws, copies of which have been filed as exhibits to the registration statement of which this prospectus is a part.
Common Stock
Our Articles of Incorporation authorize us to issue up to 95,000,000 common shares, $0.001 par value per share and 5,000,000 shares of preferred stock, $0.001 par value. As of April 15, 2006, we had 17,867,515 shares of common stock outstanding held by our stockholders. No shares of preferred stock have been issued.
Liquidation Rights
Upon liquidation or dissolution, each outstanding common share will be entitled to share equally in our assets legally available for distribution to stockholders after the payment of all debts and other liabilities.
Dividend Rights
There are no limitations or restrictions upon the rights of our Board of Directors to declare dividends, and we may pay dividends on our shares in cash, property, or our own shares, except when we are insolvent or when the payment thereof would render us insolvent subject to the provisions of the Delaware Statutes. We have not paid dividends in the past and it is not anticipated that any dividends will be paid in the foreseeable future.
Voting Rights
Holders of our common shares are entitled to cast one vote for each share held at all stockholders meetings for all purposes. There are no cumulative voting rights.
Other Rights
Our common shares are not redeemable, have no conversion rights and carry no preemptive or other rights to subscribe to, or purchase, additional common shares in the event of a subsequent offering. There are no other material rights of the common stockholders not included herein. There is no provision in our charter or by-laws that would delay, defer or prevent a change in control of IMI Global. We have not issued any debt securities. Each stockholder of IMI Global will receive an annual report, including audited financial statements. Although IMI Global is not currently a reporting company, upon approval of this registration statement, it will begin filing quarterly reports on Form 10-QSB and annual reports on Form 10-KSB.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our charter provides that we will indemnify our current and former directors, officers and employees against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement arising out of their services as directors, officers or employees of the company. Section 7 of the Colorado Business Corporation Act states that we have the power to indemnify any person made a party to any lawsuit by reason of being our director or officer against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Our employment agreements with our officers contain provisions requiring us to indemnify them to the fullest extent permitted by Colorado law. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and persons controlling the company pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Shares Owned
Name Before Offering After Offering
-------------------------------------------------------------- ------------------- ------------------
John K Saunders & Leann Saunders * 7,977,143 7,977,143
JW Roth 1,350,000 1,350,000
Federal National Fin Corp Pension P/S FBO Jay Belk 714,387 714,387
Jay D Belk & Tracy L Belk 918,502 918,502
Cobank ACB 329,672 329,672
Amy Ames 30,000 30,000
Jon Angell 181,319 181,319
Jon L Angell & Charlotte A Angell 138,000 138,000
Justin Angell 404,837 404,837
Michael G Baker 150,000 150,000
Bank Of The West Cust FBO David H Hoark Self Directed IRA 28,800 28,800
James R Belk & B Kay Belk 41,210 41,210
Jeffrey P Belk 41,210 41,210
Keith Belk 30,000 30,000
Keith E Belk & Joann Belk 28,800 28,800
Sue Biddle 50,000 50,000
Melinda Birkeland 20,000 20,000
Dale Blasi 18,746 18,746
Rod Bowling 30,000 30,000
Frank H Brenton 12,000 12,000
Eugene S Burk & Jerry C Burk 41,210 41,210
Jerry W Buxton 18,000 18,000
Salvatore G Campoli & Lisa Campoli 12,000 12,000
Daniel L Carnahan 41,210 41,210
Alan Charmichael 30,000 30,000
Jason M Cooley 18,000 18,000
Robert Cooper 30,000 30,000
Cunningham Family Revocable Trust 12,000 12,000
Equity Trust Co Custodian FBO Tim R Mathes IRA 12,000 12,000
Equity Trust Co Custodian FBO Charles J Horak Jr IRA 30,000 30,000
Equity Trust Co Custodian FBO Barbara Horak IRA 30,000 30,000
Federal National Fin Corp Pension P/S FBO Dl Carnahan 714,388 714,388
Brian L Field 12,000 12,000
First Baptist Church Of Castle Rock DBA Creekside Bible
Church 30,000 30,000
Frontier Farm Credit 41,210 41,210
George L Black Jr Trust 41,210 41,210
Cara Gerken 50,000 50,000
William M Goldstein 30,000 30,000
Brian M Grahams & Patricia A Grahams 14,400 14,400
Rich Grisham 288,462 288,462
Michael S Hall 41,210 41,210
Brad A Haun & Michelle A Haun 30,000 30,000
Cecil D Haun & Carole L Haun 30,000 30,000
Torry P Head 9,000 9,000
Christopher D Hepler 6,000 6,000
James J Hepler 6,000 6,000
Charles J Horak Jr & Barbara Horak 36,000 36,000
David H Horak & Anne D Horak 271,200 271,200
Jamie Glen House 100,000 100,000
Torrey W House & Lori L House 28,800 28,800
Cadence International 39,284 39,284
Bilynn Johnson 20,000 20,000
Jennifer Johnson 30,000 30,000
Roland H Johnson & Janie C Johnson 32,969 32,969
Chuck Jolley 30,000 30,000
Kevin W Kackley 12,000 12,000
Kado Enterprises LLC 100,419 100,419
Eric Kelton 30,000 30,000
Jason Kraft 15,000 15,000
Michael Kramm & Doris Kramm 30,000 30,000
Pete Lapaseotes 41,210 41,210
Pete Lapaseotes Jr 132,000 132,000
Larson Brothers LLC 30,000 30,000
Amy Lieffring 20,000 20,000
Grant Farms LLC 12,000 12,000
Rumford Farms LLC 24,000 24,000
Brent Lee Lowderman & Kristene S Lowderman 12,000 12,000
Eduardo Loya & Barbara Loya 30,000 30,000
Doug Markham 8,243 8,243
Dusty Markham 50,000 50,000
Richard Markham & Rita Markham 74,177 74,177
Mary Kathleen Borck Trust 12,000 12,000
Tim R Mathes & Sharon Mathes 48,000 48,000
The Matthew R Cook Trust 24,000 24,000
Butch Mayfield 50,000 50,000
Jim Mayfield 30,000 30,000
Clark S Milligan & Marilyn F Milligan 180,000 180,000
Eric Moeder 30,000 30,000
Robert A Moreno 24,000 24,000
|
Grant Morgan 20,000 20,000
Matt Morgan 30,000 30,000
John Richard Newman & Virginia Newman 41,210 41,210
Norman W Hupe Trust 12,000 12,000
Jim Norwood 30,000 30,000
Robert J Overgaard & Carolyn F Overgaard 82,419 82,419
Terry L Phillips 12,000 12,000
Potomac Capital Partners LP 300,000 300,000
Progressive Ins Services Inc MPPP 11,700 11,700
Dan Pronovist 2,507 2,507
Dale A Redeker 41,210 41,210
Martin Redeker 41,210 41,210
Carol J Ross Trustee 60,000 60,000
Maynard Ross Trustee 60,000 60,000
Rodney L Ross & Tonda R Ross 120,000 120,000
Clint J Roth &\ Amy L Roth 164,837 164,837
Dennis D Roth & Margaret J Roth 41,210 41,210
Rosie Sampson 30,000 30,000
Susan Sanders 20,000 20,000
Emily Saunders 20,000 20,000
Saunders Investment Co LLC 227,144 227,144
Ken Saunders Jr 58,243 58,243
Ken Saunders Sr 30,000 30,000
Randy Saunders 30,000 30,000
Wade Saunders 30,000 30,000
Jan Saunders 30,000 30,000
Gary Smith 50,000 50,000
Linda Spire 18,746 18,746
Doug Stanton 50,000 50,000
Stower Ventures Inc 15,000 15,000
Rob Streight 20,000 20,000
William S Swafford & Laura Swafford 61,451 61,451
Timpas Creek Finance Co LLC 30,000 30,000
Yoshi Tsuchiya 30,000 30,000
Michael J Unrein 9,000 9,000
Jake Wagner 20,000 20,000
Ward Feedyard Inc 30,000 30,000
Cory Weaver 50,000 50,000
Wildcat Holdings Co LLC 17,400 17,400
Cheryl Wyatt 50,000 50,000
Deborah A Ziwot 150,000 150,000
----------- ------------------
Totals 17,867,515 17,867,515
|
* Even though all the shares of John & Leann Saunders are being registered, they have pledged to the Board of Directors that they will only be sold in accordance with Rule 144.
PLAN OF DISTRIBUTION
The selling shareholders, and any of their pledges, assignees and successors-in-interest may, from time to time, sell any or all of their shares of our common stock on any stock exchange, market or trading facility on which the shares are traded. They may also sell the shares in private transactions in accordance with applicable law. These sales may be at fixed or negotiated prices. The selling shareholders may use any one or more of the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
o privately negotiated transactions;
o broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; or
o any other method permitted pursuant to applicable law.
The selling shareholders may also sell shares of our common stock under Rule 144 under the Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling shareholders may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated.
The selling shareholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The selling shareholders have informed us that they do not have any agreement or understanding, directly or indirectly, with any person to distribute our common stock.
We are required to pay certain fees and expenses incurred by us incidental to the registration of the shares of our common stock.
LEGAL OPINION
Vanderkam & Associates, of Houston, TX, will pass upon the validity of the shares of common stock being offered pursuant to this prospectus.
EXPERTS
Our financial statements as of December 31, 2004 and December 31, 2005 included in this prospectus have been audited by E Randall Gruber, CPA, PC, independent registered accountants, as stated in their report included in this prospectus, and have been so included in reliance upon their authority as experts in accounting and auditing.
ADDITIONAL INFORMATION
We are not yet a public company. Once we become a public company, we will file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. Copies of the reports, proxy statements and other information will be able to be read and copied at the Securities and Exchange Commission's Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You can request copies of such documents by writing to the Securities and Exchange Commission and paying a fee for the copying cost. You may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. All reports and other information that we file with the SEC are also available to the public from the SEC's website at www.sec.gov, under our company name or our CIK number: 0000796764.
This prospectus is part of a registration statement on Form SB-2 that we have filed with the Securities and Exchange Commission. Certain information in the registration statement has been omitted from this prospectus in accordance with the rules and regulations of the Securities and Exchange Commission. We have also filed exhibits and schedules with the registration statement that are excluded from this prospectus. For further information about us, and the common stock offered by this prospectus, we refer you to the registration statement and its exhibits, which may be obtained as described above.
INDEX TO FINANCIAL STATEMENTS
IMI Global, Inc.
Table of Contents
Report of Independent Registered Public Accounting Firm 1 Balance Sheets 2 Statements of Operations 3 Statements of Stockholders' Equity 4 - 5 Consolidated Statements of Cash Flows 6 Notes to Financial Statements 7 - 20 |
E. Randall Gruber, CPA, PC ================================================================================ Certified Public Accountant Telephone (636)561-5639 400 Lake Saint Louis Boulevard Fax (636)561-0735 Lake Saint Louis, Missouri 63367 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Integrated Management Information, Inc.
I have audited the accompanying balance sheets of Integrated Management Information, Inc. as of December 31, 2005 and 2004, and the related statements of operations, changes in stockholders' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audits 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. I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly in all material respects, the financial position of Integrated Management Information, Inc. as of December 31, 2005 and 2004 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
E. Randall Gruber, CPA, PC
March 17, 2006
St. Louis, Missouri
Member: American Institute of Certified Public Accountants Registered: Public Company Accounting Oversight Board (PCAOB)
Integrated Management Information, Inc. d/b/a IMI Global, Inc. Balance Sheet December 31,
2005 2004
Assets
Current assets
Cash and cash equivalents $ 684,833 $ 12
Accounts receivable, net of allowance of $21,950 and $12,000 241,304 67,633
Inventory 9,771
Prepaid expenses --- 55,914
---------------- ---------------
Total current assets 935,908 123,559
Restricted cash
Cash restricted for purchase of treasury stock 421,664 ---
Cash restricted for payment of line of credit 50,000 ---
---------------- ---------------
Total restricted cash 471,664 ---
Property and equipment
Equipment and furniture, net of accumulated depreciation 99,514 86,988
Less accumulated depreciation (65,739) (51,626)
---------------- ---------------
Net property and equipment 33,775 35,362
Other assets
Goodwill 509,108 ---
---------------- ---------------
Total assets 1,950,455 158,921
================ ===============
Liabilities and shareholders' equity
Liabilities
Current liabilities
Notes payable 100,000 172,670
Accounts payable 178,847 12,623
Accrued expenses 11,183 5,695
Deferred revenues 46,556 ---
---------------- ---------------
Total current liabilities 336,586 190,988
Notes payable 350,000 ---
Shareholders' equity
Common stock, par value $.01 per share. Authorized 50,000,000
shares; issued and outstanding 16,936,669 and 12,000 169,366 120
Additional paid-in capital 2,099,139 880
Retained (deficit) (1,004,636) (33,067)
---------------- ---------------
Total shareholders' equity 1,263,869 (32,067)
---------------- ---------------
Total liabilities and shareholder's equity $ 1,950,455 $ 158,921
================ ===============
|
Integrated Management Information, Inc. d/b/a IMI Global, Inc. Statements of Operations For the years ended December 31,
2005 2004
Revenues $ 957,894 $ 451,305
Cost of sales 534,158 160,832
--------------- ---------------
Gross profit 423,736 290,473
Selling, general and administrative expenses 1,390,671 238,061
--------------- ---------------
Income (loss) from operations (966,935) 52,412
Other income (expense)
Interest income 3,173 168
Interest expense (40,874) (12,081)
--------------- ---------------
Net other expense (37,701) (11,913)
--------------- ---------------
Loss before income taxes (1,004,636) 40,499
Income taxes --- ---
--------------- ---------------
Net income (loss) $ (1,004,636) $ 40,499
=============== ===============
Earnings (loss) per share (Note 1) $ (0.07) $ 3.37
=============== ===============
Average shares outstanding 15,358,417 12,000
=============== ===============
|
Integrated Management Information, Inc. d/b/a IMI Global, Inc. Statements of Stockholders' Equity For the years ended December 31, 2005 and 2004
Common Stock Additional Retained
Shares Amount Paid-In Earnings
--------- --------- Capital (Deficit) Total
(Note 1) ----------- --------- --------
Balance, December 31, 2003 12,000 120 880 47,120 48,120
Net income for the year ended
December 31, 2004 40,499 40,499
Distributions to shareholders (120,686) (120,686)
-------------- --------- -------------- -------------- ----------
Balance, December 31, 2004 12,000 120 880 (33,067) (32,067)
January, 2005 - Additional common
shares issued to founders 10,968,000 109,680 (109,680)
January, 2005 - Common shares
issued as compensation - Related
parties 2,745,300 27,453 190,402 217,855
January, 2005 - Common stock
issued to convert note payable -
Related parties 944,700 9,447 65,553 75,000
March, 2005, stock options issued
to non-employees 30,000 30,000
May, 2005 - Common stock issued to
convert note payable 27,473 275 (275)
May, 2005 - Options issued for
purchase of Cattlefeeding.com, Inc. 15,000 15,000
May, 2005 - Common stock issued
as consulting fees 200,000 2,000 22,000 24,000
|
Integrated Management Information, Inc. d/b/a IMI Global, Inc. Statements of Stockholders' Equity For the years ended December 31, 2005 and 2004
Common Stock Additional Retained
Shares Amount Paid-In Earnings
--------- -------- Capital (Deficit) Total
(Note 1) ----------- ---------- -------
May 27, 2005 - Proceeds from sale of
stock, net of fees totaling $176,777 928,796 9,287 635,136 644,423
December 31, 2005 - Proceeds from
sale of stock, net of fees
totaling $104,100 1,110,400 11,104 1,272,796 1,283,900
"S" Corp deficit / other (22,673) 33,067 10,394
Net income for the year ended
December 31, 2005 (1,004,636) (1,004,636)
------------ --------- ------------ -------------- ---------------
Balance, December 31, 2005 16,936,669 $ 169,366 $ 2,099,139 (1,004,636) $ 1,263,869
============ ========= ============ ============== ===============
|
Integrated Management Information, Inc. d/b/a IMI Global, Inc. Statement of Cash Flows For the years ended December 31,
2005 2004
Cash flows from operating activities
Net income (loss) $ (1,004,636) $ 40,499
Adjustments to reconcile net earnings (loss) to net cash provided
by operating activities:
Depreciation 14,113 13,233
Provision for bad debts 9,950 12,000
Stock options issued to non-employees 30,000 ---
Changes in assets and liabilities
Accounts receivable (183,621) 16,275
Inventory (9,771)
Prepaid expenses 55,914 (55,914)
Accounts payable 166,224 (15,050)
Accrued expenses 5,488 5,636
Deferred revenues 46,556 ---
--------------- ----------------
Net cash provided (used) by operating activities (869,783) 16,679
Cash flows from investing activities
Acquisition of office furniture and equipment (12,526) (12,983)
Acquisition of goodwill (144,108) ---
--------------- ----------------
Net cash used by investing activities (156,634) (12,983)
Cash flows from financing activities
Proceeds from line of credit, net 27,330 119,374
Promissory note repayment (25,000) (120,686)
Proceeds from sale of common stock 2,180,572 (1,648)
Restricted cash (471,664)
--------------- ----------------
Net cash provided by financing activities 1,711,238 (2,960)
--------------- ----------------
Net increase in cash and equivalents 684,821 736
Cash and cash equivalents at beginning of period 12 (724)
--------------- ----------------
Cash and cash equivalents at end of period $ 684,833 $ 12
=============== ================
|
Note 1 - Organization and Summary of Significant Accounting Policies
Organization
Integrated Management Information, Inc. ("IMI Global," "IMI," or the "Company") was incorporated in 1998 as a Missouri corporation. In March 2005, IMI was reincorporated in Delaware. The Company provides livestock tracking and herd management software database applications, consulting services, verification solutions for the livestock and meat industry and maintains an internet portal dedicated to news, trends, and products in the agricultural industry.
IMI Global stands at the forefront of a rapidly evolving movement to track cattle and verify sources of beef products. In the aftermath of the discovery of the first case of mad cow disease in the United States in December, 2003, many of the largest U.S. beef export markets were closed resulting in significant losses to the industry.
In response to the crisis, several initiatives are being enacted to facilitate the reopening of key export markets. Most notably, U.S. suppliers seeking to sell beef and beef products to other countries must participate in a pre-approved Quality System Assessment Program so as to have an approved means of verifying specific product requirements. With the introduction of the USVerified Source and Age Verification system last year, IMI Global was the first to develop a USDA Quality System Assessment document management system for auditing the tracking systems used by beef producers to verify source and age.
Liquidity
As shown in the accompanying financial statements, the Company has incurred a loss from operations and negative cash flows from operations. During 2005, the Company's growth was funded through a combination of convertible debt from private investors and private placement offerings. The Company expects that it may need to raise additional capital to accomplish its business objectives. The Company will continually evaluate all funding options including additional offerings of its securities to private, public and institutional investors and other credit facilities as they become available. There can be no assurance as to the availability or terms upon which financing alternatives might be available.
Basis of presentation
All Common Stock shares are presented to reflect a 12 for 1 split approved by the shareholders on March 4, 2005.
The Company accounts for acquired businesses using the purchase method of accounting which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. The Company's financial statements reflect an acquired business after the completion of the acquisition and are not restated. The cost to acquire a business, including transaction costs, is allocated to the underlying net assets of the acquired businesses in proportion to their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.
On May 12, 2005, IMI completed an acquisition of Cattlefeeding.com, Inc.'s net assets which has been accounted for under the purchase method of accounting. Starting at the date of acquisition, the assets acquired and liabilities assumed were recorded at their respective fair values and the Company's results of operations included Cattlefeeding.com's advertising revenues, product sales, costs and expenses from the acquisition date. Therefore, approximately 7 1/2 months of results of operations of Cattlefeeding.com's operations are included in the Company's financial statements for the year ended December 31, 2005.
Estimates and assumptions
In preparing financial statements, the Company uses certain estimates and assumptions that affect reported amounts and disclosures. For example, estimates are used when accounting for depreciation, amortization, contingencies and asset and liability valuations. Estimates are often based on complex judgments, probabilities and assumptions that the Company believes to be reasonable but that are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate and unanticipated events and circumstances may occur. It is also possible that other professionals, applying reasonable judgment to the same facts and circumstance, could develop and support a range of alternative estimated amounts. The Company is also subject to risks and uncertainties that may cause actual results to differ from estimated amounts, such as changes in the administrative directives, rules and regulations of federal, state and local regulatory agencies, including but not limited to the U.S. Department of Agriculture, or the Agricultural Marketing Service and the Food Safety Inspection Service.
Revenue recognition
Revenues are recognized only when realized / realizable and earned in accordance with generally acceptable accounting principles.
* Revenue from product sales are recognized when the goods are shipped and title passes to the customer.
* Revenue from contracts for consulting and website development are recognized on the percentage of completion method.
* Advertising revenues earned by Cattlefeeding.com are recognized when the underlying advertisements are published.
* Revenue derived from IMI's US Verified program is recognized ratably over the contract term. Contracts are cancelable only for non-performance, and the billable revenue of these contracts at December 31, 2005 was $106,000.
Cash and cash equivalents
All cash and short-term investments with original maturities of three months or less are considered cash and cash equivalents, since they are readily convertible to cash. These short-term investments are stated at cost, which approximates fair value.
Restricted cash
Pursuant to the terms of the Company's line of credit with the Platte Valley Bank, a $50,000 certificate of deposit is restricted to collateralize the line of credit.
An escrow account has been created to hold the funding for stock that was resold in the private offering. These funds totaling $421,664 were paid out in January, 2006.
Research and development and software development costs
Research and development costs are charged to operations as incurred. SFAS No. 86, "Accounting for the Costs of Computer Software to Be Sold, Leased or Otherwise Marketed," requires the capitalization of certain computer software development costs incurred upon the establishment of technological feasibility. The Company's current process for developing software is essentially completed concurrently with the establishment of technological feasibility; therefore, no costs have been capitalized in 2005 or 2004.
Stock-based compensation
SFAS No. 123 "Accounting for Stock-Based Compensation," established and encourages the use of the fair value based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value of stock-based compensation determined as of the date of the grant and is recognized over the periods in which the related services are rendered. The statement also permits companies to elect to continue using the current intrinsic value accounting method specified in Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees", to account for stock-based compensation. The Company has elected to use the intrinsic value based method and has disclosed the pro forma effect of using the fair value based method to account for its stock-based compensation issued to employees (see Note 7 - Stock-based compensation). For options granted to employees where the exercise price is less than the fair value of the stock at the date of grant, the Company recognizes an expense in accordance with APB 25. For non-employee stock-based compensation the Company recognizes an expense in accordance with SFAS No. 123 and values the equity securities based on the fair value of the security on the date of grant.
Amortization of intangible assets, depreciation and certain long-lived assets
Long-lived assets include:
* Goodwill - Goodwill represents the difference between the purchase price of a business acquisition and the fair value of its net assets. Goodwill is not amortized.
* Property, plant and equipment - These assets are recorded at original cost and increased by the cost of any significant improvements made after purchase, The Company depreciates the cost over the estimated useful lives of the respective assets using straight line depreciation.
The Company reviews all of its long-lived assets, including goodwill and other intangible assets, for impairment at least annually. The Company records changes for impairments of long-lived assets for the amount by which the present value of future cash flows, or some other fair value measure, is less than the carrying value of these assets.
Advertising expenses
Advertising costs are expensed as incurred. The total advertising expenses included in the Statement of Operations for the year ended December 31, 2005 and December 31, 2004 were $48,429 and $5,336, respectively.
Fair value of financial instruments
For certain of the Company's financial instruments, including cash, accounts payable and accrued interest, the carrying amounts approximate fair value due to their short maturities. The amounts shown for notes payable also approximate fair value because current interest rates and terms offered to the Company for similar debt are substantially the same.
Income (Loss) per share
In accordance with SFAS No. 128, "Earnings Per Share," the basic income / (loss) per common share is computed by dividing net income / (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted income per common share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.
Concentration of credit risk
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents and accounts receivable. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $100,000 insurance limit. The Company extends credit based on an evaluation of the customer's financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer's financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required. Accounts are "written-off" when deemed uncollectible.
Note 2 - Acquisitions
On May 12, 2005, IMI Global, Inc. acquired Cattlefeeding.com, Inc. net assets for a purchase price of $500,000 and options for 150,000 shares of IMI Global, Inc. Common Stock exercisable at $0.91 per share for a three year period from closing.
The $500,000 purchase price consisted of $150,000 cash at closing, plus a note in the amount of $350,000 payable with interest at a rate of 5% per annum (the "Cattlefeeding.com Note"). The note is payable with monthly payments of interest only for thirty-six months. The balance of the note and any unpaid interest is due on June 12, 2008. The 150,000 options were valued pursuant to FAS 123 at $15,000.
Cattlefeeding.com, Inc. owned and operated the internet domain names known as CattleNetwork.com and CattleStore.com and all of the intellectual and personal property located at or related to the businesses.
The following table summarizes the components of the purchase price:
Cash $ 150,000
Cattlefeeding.com Note 350,000
Stock Options 15,000
---------------
$ 515,000
===============
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Allocation of Cattlefeeding.com, Inc. assets purchase price
The purchase price allocation was based on an estimate of the fair value of assets acquired and liabilities assumed.
Book value of net assets acquired $ 5,892
Goodwill 509,108
---------------
$ 515,000
===============
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Pro forma results of Cattlefeeding.com, Inc. assets purchase
the following unaudited pro forma financial information presents the combined results of operations of IMI Global, Inc. and Cattlefeeding.com, Inc. as if the acquisition had occurred as of the beginning of the period presented. The unaudited pro form financial information is not necessarily indicative of what the Company's consolidated results of operations actually would have been had the Company completed the acquisition at the beginning of each period. In addition, the unaudited pro forma financial information does not attempt to project the future results of operations of the combined company.
Years Ended December 31
-----------------------------
2005 2004
------------ ------------
Revenues $ 991,201 $ 527,237
Net income (1,067,071) (22,299)
Per share amounts:
Net loss per common share $ 0.07 $ (22.30)
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Note 3 - Property and equipment
The major categories of property and equipment are as follows at December 31,
2005 and December 31, 2004:
December 31
2005 2004
----------- ------------
Automotive equipment $ 37,660 $ 37,660
Furniture and office equipment 52,772 39,662
Software and tools 9,082 9,666
----------- ------------
99,514 86,988
Less - Accumulated depreciation (65,739) (51,626)
----------- ------------
Net property and equipment $ 33,775 $ 35,362
=========== ============
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Depreciation expense for the years ended December 31, 2005 and December 31, 2004 was $14,113 and $13,233, respectively
Note 4 - Notes payable
Notes payable consist of the following:
December 31
2005 2004
---------- ---------
Current Maturities
Platte Valley Bank Line of Credit $ 100,000 $ 72,670
Promissory Note 0 100,000
----------- ---------
Total Current Maturities 100,000 172,670
----------- ---------
Long-Term Maturities
Cattlefeeding.com Note 350,000 0
----------- ---------
Total Long-Term Maturities 350,000 0
Total Notes Payable $ 450,000 $ 172,670
=========== =========
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The Company maintains a $100,000 line of credit with Platte Valley Bank. The line of credit is secured by a $50,000 certificate of deposit and the personal guarantee of the two founding shareholders. Interest, which is payable monthly, was at an annual rate of 5% during 2005 and can be increased annually to 2% above the bank's certificate of deposit rate.
On October 12, 2004, the Company issued a note in the principal amount of $100,000 to two related parties (50% and 25%, respectively) and a non-related investor (25%) (the "Promissory Note"). Terms of the notes provided for annual interest of 10% payable on a monthly basis, conversion at the option of the lenders into an aggregate of 7% of the Company's outstanding Common Stock (with anti-dilution provisions and a further option to purchase an additional 7% of the Company's outstanding Common Stock for an additional $100,000) and final repayment of outstanding interest and principal on October 13, 2007. In January 2005, $75,000 principal amount of the note (the portion held by the two related parties) was converted to Common Stock. In May 2005, the remaining $25,000 principal amount under the note (held by the non-related investor) was exchanged by the Company for $50,000 cash and 27,473 shares of Common Stock in satisfaction of all obligations under the Promissory Note. Further details regarding these transactions are provided in Note 8 - Common Stock.
On May 12, 2005, in connection with the acquisition of Cattlefeeding.com, Inc.'s net assets (see Note 2 - Acquisitions), the Company issued a Note Payable to Cattlefeeding.com, Inc. in the amount of $350,000. Under the Note, interest in the amount of 5% of outstanding principal is payable on a monthly basis, with all outstanding principal and interest payable on June 12, 2008.
Note 5 - Income taxes
Until December 31, 2004, the Company was structured as a Subchapter S corporation under the Internal Revenue Code, with any income or loss passed through to shareholders for tax purposes. Beginning January 1, 2005, the Company converted to a Subchapter C and began to be subject to income taxation under the Code.
Deferred tax assets and liabilities have been determined based upon the differences between the financial statement amounts and the tax bases of assets and liabilities as measured by enacted tax rates expected to be in effect when these differences are expected to reverse. In assessing the reliability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the realization of future taxable income during the periods in which those temporary differences become deductible. Management considers past history, the scheduled reversal of taxable temporary differences, projected future taxable income, and tax planning strategies in making this assessment. As of December 31, 2005 and 2004, management believes it is more likely than not that the Company's net deferred tax asset will not be realized and accordingly has recorded a valuation allowance against the deferred tax assets.
Significant components of the Company's deferred income tax assets and liabilities are as follows:
Deferred income tax asset $ 343,400
Valuation allowance $ (343,400)
The Company has available as of December 31, 2005 for federal income tax
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purposes, unused net operating loss carryforwards of approximately $1,010,000 which may be applied against future taxable income and expire in years beginning in 2020. Utilization of net operating losses may be limited in the event of an ownership change under Section 382 of the Internal Revenue Code.
Note 6 - Common Stock
As of December 31, 2005, the Company had 50,000,000 authorized shares of $0.01 par value Common Stock with 16,936,669 shares outstanding. As of December 31, 2004, the Company had 100,000 authorized shares of $1.00 par value Common Stock with 12,000 shares outstanding.
In January 2005, in connection with the conversion of the Company from a Subchapter S Corporation to a Subchapter C Corporation under the Internal Revenue Code and conversion of outstanding principal and interest under the Promissory Note in the principal amount of $75,000 (75% of the total principal amount of $100,000), the Company issued 10,968,000 shares to its founders and 944,700 shares to the holders of the Promissory Note. Concurrently, the holders of the Promissory Note exercised options to purchase an aggregate of 2,745,300 shares of Common Stock from the Company for $217,855 cash. Pursuant to the transaction, the two former holders of the Promissory Note were appointed to the Company's Board of Directors.
In addition, the Company committed to use its best efforts to develop a strategy of liquidity including, but not limited to: a sale of the Company, a merger with a public company, or an initial public offering. If such an event of liquidity has not occurred by January 5, 2006, the Company agreed to pay annual dividends to the Common shareholders representing 75% of each year's earnings before depreciation, amortization and other non-cash expenses payable by March 15 of the succeeding year. The Company is preparing the initial public offering document, and anticipates filing it during the second quarter of 2006. The Company did not have earnings for the year ending December 31, 2005, and therefore does not owe dividends to shareholders for the current year.
In May 2005, the Company settled the remaining $25,000 principal amount of the Promissory Note, including the related interest and the option to purchase Common Stock, by paying $50,000 cash and issuing 27,473 shares of Common Stock to the remaining holder of the Promissory Note.
In May 2005, the Company issued 928,796 shares of Common Stock for cash at $0.91 per share, which resulted in proceeds of $668,423, net of issuance costs of $176,777. The offering also included 442,860 shares which were sold directly by selling shareholders for which the company did not receive any proceeds. Additionally, 200,000 shares of Common Stock and warrants to purchase 40,000 shares of Common Stock at $0.91 per share expiring in May 2009 were issued by the Company to the placement agent in connection with the offering.
In October 2005, the Company began a private placement offering to sell a
minimum of 800,000 and a maximum of 4,000,000 shares of Common Stock at $1.25
per share with net proceeds to be used for working capital, general corporate
purposes and repurchase of Common Stock up to 5,500,000 shares from certain
existing, related-party shareholders. Pursuant to this offering, in December
2005, the Company issued 1,110,400 shares of Common Stock for cash at $1.25 per
share, which resulted in proceeds of $1,283,900, net of issuance costs of
$104,100. Additionally, warrants to purchase 158,540 shares of Common Stock at
$1.25 per share expiring in December 2009 were issued to the placement agent in
connection with the offering. The offering continued into January 2006 (see Note
12 - Subsequent Events).
Note 7 - Employee stock options
On March 12, 2005 the Company's Board of Directors granted options to acquire Common Stock to certain employees and advisors. These stock options have a term of three years and a vesting period of one year from the date the option is granted.
A summary of stock option transactions for the year ended December 31, 2005
follows:
Exercise
Options Price
------------- ----------
Balance Outstanding December 31, 2004 0
Granted 1,125,000 $0.91
Exercised 0 $0.91
Cancelled (150,000) $0.91
Balance Outstanding December 31, 2005 975,000 $0.91
As of December 31, 2005, there were 975,000 options outstanding with exercise
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price of $0.91 and weighted-average remaining contractual life of 2.2 years. None of these options were exercisable as of December 31, 2005.
Note 8 - Stock-based compensation
The Company uses the intrinsic-value method of accounting to measure compensation expense associated with grants of stock options and other stock-based awards to employees and directors. As permitted under SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure," which amended SFAS No. 123, "Accounting for Stock-Based Compensation," the Company has elected to continue to follow the intrinsic-value method in accounting for its stock-based employee compensation arrangements as defined by Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations including Financial Interpretation Number ("FIN") 44, "Accounting for Certain Transactions Involving Stock Compensation," an interpretation of APB No. 25.
No stock-based employee compensation cost is reflected in net loss, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of the grant. Had the Company recognized compensation for its stock options and other awards based on the fair-value method of accounting for awards under those plans, pro-forma net income would have been as follows:
Years Ended December 31
--------------------------------
2005 2004
--------------- ------------
Net income (loss), as Reported $ (1,004,636) $ 40,499
Less total stock-based employee compensation determined (33,510) ---
under fair-value-based method
Pro forma net income (loss) $ ($1,038,146) $ $40,499
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The fair values used to compute pro-forma net loss were estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:
Years Ended December 31
-----------------------------
2005 2004
------------ ------------
Risk-free interest rate 3.48% N/A
Expected life of option grants (years) 2.0 N/A
Expected volatility of underlying stock 0% N/A
Expected dividend payment rate 0% N/A
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The Company uses the intrinsic-value method of accounting to measure compensation expense associated with grants of stock options and other stock-based awards to consultants and other nonemployees. The Company records the fair value of stock options and warrants granted to nonemployees in exchange for services under the fair-value method in accordance with SFAS No. 123 and Emerging Issues Task Force Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services," in the statements of operations. Under this method, the resulting compensation is measured at the fair value of the equity instrument on the date of vesting and recognized as a charge to operations over the service period, which is usually the vesting period.
Note 9 - Basic and diluted net income (loss) per share
Net loss per share is calculated in accordance with the Statement of Financial Accounting Standards No. 128 (SOFAS No. 128), "Earnings per Share". Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase Common Stock at the average market price during the period.
Weighted average number of shares used to compute basic and diluted loss per share is the same in these financial statements since the effect of dilutive securities is anti-dilutive.
Note 10 - Related party transactions
In 2004, the Company recorded $24,065 in sales from a related party (father of Leann Saunders, a founding shareholder) and had an account receivable outstanding at December 31, 2004 in the amount of $21,585. The sales occurred in the normal course of business, and the account receivable was subsequently paid in December 2005.
In 2005, the Company recorded $8,005 in sales from a related party (father of Leann Saunders, a founding shareholder) and the amount was outstanding at December 31, 2005.
In 2005, the Company paid two members of its Board of Directors a total of $110,000 for advisory and business development services.
At December 31, 2005 and 2004, advances of $1,900 and $22,197 were outstanding from the Company's Chief Executive Officer and Chairman of the Board. The amount of $22,197 was repaid during the year 2005, and $1,900 was repaid in February, 2006.
Note 11 - Commitments In February 2005, the Company entered into agreements with two members of its Board of Directors to provide business development and investor relations |
advisory services. The agreements were amended in October 2005 and will terminate one year from the date the Company realizes an event of liquidity. The fees for these services are $8,500 per month, plus reimbursement of related expenses.
The Company leases office space and office furniture for use in its operations. In addition to rent, the leases may require the Company to pay directly for taxes, insurance , maintenance and other operating expenses, or to pay higher rent when operating expenses increase. Rental expense was $38,273 for the year ended December 31, 2005. The current lease is for the term beginning July 15, 2005 and ending July 15, 2006, with automatic renewal unless one party to the agreement gives the other party at least ninety days notice prior to the expiration of the then term of the lease. The remaining lease commitment for the period January 1, 2006 through July 15, 2006 is in the monthly amount of $3,589, resulting in a total minimum lease commitment at December 31, 2005 of $23,328.
Note 12 - Subsequent events In January 2006, the Company completed the private placement offering initiated in October 2005 (see Note 8 - Common Stock) and issued an additional 475,000 shares of Common Stock for cash at $1.25 per share, which resulted in proceeds |
of $549,219, net of issuance costs of $44,531. Concurrently, the Company purchased 700,000 shares at $0.75 per share from two members of the Company's Board of Directors and 4,800,000 shares at $0.075 per share from the Company's founders for an aggregate purchase price of $885,000. As additional consideration for the purchase of the foregoing shares from the Company's founders, the Company granted options to purchase an aggregate of 4,000,000 shares of Common Stock to the founders. These options vest at 1,000,000 per year over a period beginning January 1, 2007 to January 1, 2010 at exercise prices of $2.50 for the first two million and $4.00 for the remaining two million.
In February 2006, pursuant to an employment agreement with the Company's Chief Financial Officer, the Company granted an aggregate of 1,100,000 options to purchase Common Stock at exercise prices of $1.25 - $1.75. These options have a term of three years and vest over a period beginning at the time of grant and ending in July 2007.
In February 2006 at a special meeting of shareholders, Company's shareholders approved a resolution to move the Company's state of incorporation from Delaware to Colorado. The Shareholders also approved a three for two stock split, effective as of February 14, 2006.
Note 13 - Recent accounting pronouncements
In March, 2004, the FASB approved the consensus reached on the Emerging Issues Task Forces (EITF) Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments." The objective of this Issue is to provide guidance for identifying impaired investments. EITF 03-1 also provides new disclosure requirements for investments which are deemed to be temporarily impaired. In September 2004, the FASB issued a FASB Staff Position (FSP) EITF 03-1-1 that delays the effective date of the measurement and recognition are effective only for annual periods ending after June15, 2004. The Company has evaluated the impact of the adoption of the disclosure requirements of EITF 03-1 and does not believe it will have an impact to the Company's overall combined results of operations or combined financial position. Once the FASB reaches a final decision on the measurement and recognition provisions, the Company will evaluate the impact of the adoption of EITF 03-1.
In November 2004, the FASB issued SFAS No. 151 "Inventory Costs", an amendment of ARB No. 43, Chapter 4 ("SFAS No. 151"). The amendments made by SFAS 151 clarify that abnormal amount of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and require the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. The guidance is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Earlier application is permitted for inventory costs incurred during fiscal years beginning after November 23, 2004. The Company has evaluated the impact of the adoption of SFAS 151, and does not believe the impact will be significant to the Company's overall results of operations or financial position.
In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Asset, an amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions." The amendments made by SFAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance. Previously, Opinion 29 required that the accounting for an exchange of a productive asset for a similar productive asset or an equivalent interest in the same or similar productive asset should be based on the recorded amount of the asset relinquished. Opinion 29 provided an exception to its basis measurement principle (fair value) for exchanges of similar productive assets. That exception required that some nonmonetary exchanges, although commercially substantive, to be recorded on a carryover basis. By focusing the exception on exchanges that lack commercial substance, the FASB believes SFAS No. 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges occurring in fiscal periods beginning after the date of issuance. The provisions of SFAS No. 153 shall be applied prospectively. The Company has evaluated the impact of the adoption of SFAS 153, and does not believe there will be any impact to the Company, as no transactions of this type are currently contemplated.
In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"). SFAS 123R will provide investors and other users of financial statements with more complete and neutral financial information by requiring that the compensation costs relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. SFAS 123R covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. SFAS 123R replaces SFAS No. 123, "Accounting for Stock-Based Compensation", and supercedes APB Opinion No. 25, "Accounting for Stock Issued to Employees". SFAS 123, as originally issued in 1995, established as preferable a fair-value-based method of accounting for share-based payment transactions with employees. However, that statement permitted entities the option of continuing to apply the guidance in Opinion 25, as long as the footnotes to financial statements disclosed what net income would have been had the preferable fair-value based method been used. Public entities (other than those filing as small business issuers) will be required to apply SFAS 123R as of the first interim or annual reporting period that begins after June 15, 2005. The Company has evaluated the impact of the adoption of SFAS 123R and believes the impact could be significant to the Company's overall results of operations to the extent it issues stock options.
[Outside Back Cover of Prospectus]
DEALER PROSPECTUS DELIVERY OBLIGATION
Until ________, 2006 (30 days from the date of this prospectus), all dealers that effect transactions in these securities, whether or not participants in this offering, may be required to deliver a prospectus.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
Title 7 of the Colorado Revised Statutes permits the indemnification of directors and officers of Colorado corporations. Our charter provides that we shall indemnify our directors and officers to the fullest extent permitted by Colorado law.
Under Colorado law, we have the power to indemnify our directors and officers against claims arising in connection with their service to us except when an director's or officer's conduct involves: (a) violations of criminal laws, unless the director had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful; (b) deriving an improper personal benefit from a transaction; (c) voting for or assenting to an unlawful distribution; or (d) willful misconduct or conscious disregard for our best interests in a proceeding by or in the right of a shareholder.
We will indemnify our directors and officers to the extent permitted by our charter and to advance their expenses incurred in connection with a proceeding with respect to which they are entitled to indemnification.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers or persons in control pursuant to the foregoing provisions or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Our charter limits the liability of current and former directors for monetary damages if they have acted in good faith and conformed to a standard of reasonable care. Furthermore, and notwithstanding anything to the contrary in our charter or bylaws, Section 7 of the Colorado Revised Statutes Act limits the liability of directors for monetary damages for any statement, vote, decision or failure to act relating to management or policy of the corporation unless he or she breached or failed to perform her duties as a director, and the breach or failure constitutes: (a) a violation of criminal law, unless the director had reasonable cause to believe the conduct was lawful or had no reasonable cause to believe it was unlawful; (b) a transaction from which the director derived an improper personal benefit; (c) an unlawful distribution; (d) in a proceeding by or in the right of the corporation or one or more of our shareholders, conscious disregard for our best interests or willful misconduct; or (e) in a proceeding brought by someone other than the corporation or one or more of our shareholders, recklessness or an act or omission committed in bad faith, with malicious purpose, or in a manner exhibiting willful disregard of human rights, safety or property.
We have purchased insurance with respect to, among other things, the liabilities that may arise under the statutory provisions referred to above. Our directors and officers are also insured against certain liabilities, including certain liabilities arising under the Securities Act of 1933, which might be incurred by them in such capacities and against which they are not indemnified by us.
Item 25. Other Expenses of Issuance and Distribution.
The following table provides information regarding the various anticipated expenses payable by us in connection with the issuance and distribution of the securities being registered. We are paying the expenses incurred in registering the shares, but all selling and other expenses incurred by the selling shareholders will be borne by the selling shareholders. All amounts shown are estimates, except the Securities and Exchange Commission registration fee.
Registration fee Accounting fees and expenses Legal fees and expenses Transfer agent fees Printing and related fees Miscellaneous
Total
Item 26. Recent Sales of Unregistered Securities.
On March 18, 2005 following the incorporation in Delaware, the following persons were issued shares in the new Delaware corporation for property and / or cash contributed.
Name Number of Shares
--------------------------------------------------- -----------------------
John K. & Leann Saunders 16,452,000
--------------------------------------------------- -----------------------
J.W. Roth 2,295,000
--------------------------------------------------- -----------------------
Federal National Financial Corp. Pen & P/S Plan 1,890,000
--------------------------------------------------- -----------------------
Jay D. Belk 1,349,993
--------------------------------------------------- -----------------------
Conversion of Promissory Note 41,210
--------------------------------------------------- -----------------------
May 30 Private Placement 1,393,212
--------------------------------------------------- -----------------------
Underwriter Shares 300,000
--------------------------------------------------- -----------------------
February 12 Private Placement 2,378,100
--------------------------------------------------- -----------------------
No. of shares repurchased (8,250,000)
--------------------------------------------------- -----------------------
Total 17,849,515*
--------------------------------------------------- -----------------------
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* Does not include 18,000 shares issued in 1998.
These shares were issued in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended.
May 5, 2005 we issued 41,210 shares of our common stock for the partial conversion of the promissory note. These shares were issued in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as amended.
On May 30, 2005 we issued 1,393,212 shares of our common stock and warrants
to purchase 60,000 shares of our common stock to accredited investors in a
private placement pursuant to Regulation D of the Securities Act of 1933, as
amended. The gross proceeds of this issuance were $845,200, and the net proceeds
to us were shares sold $668,423, after fees expenses and other costs. We also
issued 300,000 shares to the underwriter as part of their compensation. The
issuance of these shares and the warrant was exempt under Regulation D and under
Section 4(2) of the Securities Act of 1933, as amended, as a sale not involving
a public offering.
On February 12, 2006 we completed the sale of 2,378,100 shares of our common stock and warrants to purchase 237,810 shares of our common stock to accredited investors in a private placement pursuant to Regulation D of the Securities Act of 1933, as amended. 7,200,000 shares were also repurchased from our principal shareholders for $0.05 per share and an additional 1,050,000 shares from two Board members for $0.50. The gross proceeds of this issuance were $1,981,750 and the net proceeds to us were $1,833,119 after fees, expenses and other costs. The issuance of these shares and the warrants were exempt under Regulation D and under Section 4(2) of the Securities Act of 1933, as amended, as a sale not involving a public offering.
Item 27. Exhibits
Exhibit No. Exhibit Description
--- -------------------
2.1 Cattlefeeding.com, Inc. Asset Purchase Agreement
3.1 Articles of Incorporation
3.2 By-laws of the Registrant
4.1* Form of the Registrant's Common Stock Certificate
4.2 Registrant's 2005 Stock Option Plan
4.3 Registrants Equity Incentive Plan
5.1 Form of Legal Opinion of Vanderkam & Associates
10.1 Lease dated July 15, 2005 for offices in Platte City, Missouri
10.2 Employment Agreement dated January 1, 2006 between the Registrant and
John K. Saunders
10.3 Employment Agreement dated January 1, 2006 between the Registrant and
Leann Saunders
10.4 Employment Agreement dated February 1, 2006 between the Registrant and
Mark McGregor
10.5 Consulting Agreement dated January 1, 2006 with Mark Byrne
10.6 Consulting Agreement dated April 1, 2005 between the Registrant and Jay
Belk
10.7 Consulting contract dated April 1, 2005 between the Registrant and JW Roth
10.8 Marketing Contract dated February 2, 2006 with Merial Ltd.
10.9 Marketing Contract dated February 22, 2006 with Superior Livestock, Inc.
10.10 Sample Underwriter's Warrant
11.1 Computation of Earnings Per Share (included in the notes to Financial
Statements included with the
Prospectus)
23.1 Form of Consent of Vanderkam & Associates (included in Exhibit 5.1)
23.2 Consent of E. Randall Gruber, CPA PC
99,1 Power of Attorney (See the signature page of this Registration statement)
|
* To be filed
Item 28. Undertakings.
(a) The undersigned registrant hereby undertakes to:
(1) File, during any period in which it offers or sells securities , a post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii) Include any additional or changed material information on the plan of distribution.
(2) For determining liability under the Securities Act of 1933, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.
(4) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing a registration statement on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in Platte City, State of Missouri, on April 27, 2006.
Integrated Management Information, Inc.
/s/ John K. Saunders ------------------------------------------------------- John K. Saunders President, Chief Executive Officer, and a Director /s/ Mark D. McGregor ---------------------------------------------------------- Mark D. McGregor, Chief Financial Officer |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Arnie Geller and Brian Wainger, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits and schedules thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, which they, or either of them, may deem necessary or advisable to be done in connection with this Registration Statement, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitute or substitutes or any of them, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated:
Date Signature Title
----------------- ------------------------ -------------------------------------
/s/John K. Saunders
---------------------- Chairman, President, Chief Executive
April 27, 2006 John K. Saunders Officer, and a Director
/s/ Dr. Gary Smith
----------------------
April 27, 2006 Dr. Gary Smith Director
/s/ Adam Larson
----------------------
April 27, 2006 Adam Larson Director
- /s/ John Bellinger
----------------------
April 27, 2006 John Bellinger Director
|
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into as of the _____ day of May, 2005 (the "Effective Date"), among CATTLEFEEDING.COM, INC. ("CFCI"), a Kansas corporation ("Seller"), INTEGRATED MANAGEMENT INFORMATION, INC. DBA IMI GLOBAL, INC. ("IMI"), a Delaware corporation ("Purchaser"), and Rob Cook ("Cook"). Seller and Purchaser may collectively be referred to below as the "Parties" or individually as a "Party."
RECITALS
A. Seller owns and operates those certain Internet domain names known as CattleNetwork.com and CattleStore.com ("Seller's Business") located at 601 4th Street, Platte City, MO 64079, and owns all of the intellectual and personal property located at or relating to the Seller's Business.
B. Seller desires to sell to Purchaser and Purchaser desires to purchase from Seller the Internet domain names, customer and subscriber lists, two computers and other intellectual and personal property located at or relating to the Seller's Business, all in accordance with this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises made herein and in consideration of the representations, warranties and covenants stated below, the Parties, intending to be legally bound, agree as follows:
ARTICLE 1.
AGREEMENT TO SELL
1.1.Acquired Assets. Seller agrees to sell and, at Closing, will transfer and deliver to Purchaser, all of the personal property owned by Seller and located at or related to the Seller's Business, including but not limited to the following, hereinafter referred to as the "Property":
(a) Two computers and supplies owned by Seller and on hand at the Seller's Business as of the Effective Date, including but not limited to those items set forth on the Schedule of Computers attached hereto as Exhibit A and made a part hereof by reference (collectively, the "computers").
(b) All right, title and interest of Seller in or under all contracts, agreements, instruments, certificates, permits and licenses which relate to the Seller's Business, and accepted by Purchaser, as set forth on the Schedule of Contracts attached hereto as Exhibit B and made a part hereof by reference (collectively, the "Contracts").
(c) All customer and subscriber lists as set forth on the Schedule of Customer and Subscriber Lists, attached hereto as Exhibit C and made a part hereof by reference (collectively, the "Customer and Supplier Lists").
(d) All business records, correspondence, files and other related books and records (or copies thereof certified by Seller as true) related to the Seller's Business or in any way related thereto, summaries and descriptions of which are set forth on the Schedule of Books and Records, attached hereto as Exhibit D and made a part hereof by reference (collectively, the "Books and Records"). Purchaser agrees to store all of the above and make them available to Seller for a period of five (5) years.
(e) All Internet domain names, trade names, marks and trademarks used by Seller in the operation of the Seller's Business, which are set forth on the Schedule of Trade Names and Product Names, attached hereto as Exhibit E and made a part hereof by reference.
(f) All intangible property and intangible property rights of whatever kind or nature relating to any of the above described properties.
1.2.Encumbrances. All of the Property shall be sold, conveyed, transferred and assigned by Seller to Purchaser at Closing free and clear of all liens and encumbrances. Seller agrees to save and hold Purchaser harmless from and indemnified against any debts, liabilities, claims or obligations of Seller except those liabilities ("Assumed Liabilities") which are expressly set forth on the Schedule of Assumed Liabilities and Contracts attached hereto as Exhibit F and made a part hereof by reference.
1.3.Exclusion of Assets. Purchaser acknowledges that the following assets of the Seller's Business shall be specifically excluded from transfer to Purchaser hereunder and shall remain the sole property of Seller:
(a) All cash on hand of Seller as of Closing.
ARTICLE 2.
PURCHASE AND PURCHASE PRICE
2.1.Agreement of Purchase. Purchaser agrees to purchase, upon the terms and subject to the conditions of this Agreement, the Property as described in Article 1 above and will pay to Seller the Purchase Price, as defined below, in the manner and upon the terms hereinafter set forth.
2.2.Purchase Price. The total consideration ("Purchase Price") to be paid by Purchaser to Seller is Five Hundred Thousand Dollars ($500,000.00) plus stock options described below. The Purchase Price shall be paid to Seller by Purchaser at Closing as follows:
(a) At Closing Purchaser shall execute a Promissory Note to Seller in the principal amount of Three Hundred Fifty Thousand Dollars ($350,000.00) (the "Note") with an interest rate of five percent (5%) per annum, payable interest only, due monthly, commencing thirty (30) days after closing, and continuing for thirty-six (36) months thereafter. The balance of the Note and any accrued interest shall be due in full thirty-seven (37) months after closing.
(b) At Closing, the balance of the Purchase Price over and above the amounts credited to Purchaser pursuant to Section 2.2(a) above and subject to any reimbursement, adjustments and withholding provided by this Agreement, shall be paid to Seller in cash or by wire transfer or cashier's or certified check.
(c) In addition, Purchaser shall grant to Seller and deliver at Closing options for One Hundred Fifty Thousand (150,000) shares of IMI stock exercisable at ninety-one cents ($.91) per share for a three-year period from Closing. Options shall be issued directly to Seller.
2.3.Allocation of the Purchase Price and Other Payments. Purchaser and
Seller agree to allocate the Purchase Price and other payments due pursuant to
this Agreement in reasonable amounts among the following categories:
Intangibles; Goodwill; Non-Compete Agreement.
ARTICLE 3.
DUE DILIGENCE
3.1.Seller's Disclosure Documents. Promptly, but in no event later than five (5) days after the Effective Date, Seller shall deliver to the Purchaser the following ("Seller's Disclosure Documents"):
(a) Copies of the current (approximately 90 days old) financial statements
for Seller, including (i) the balance sheet, (ii) profit and loss statement,
(iii) current aging of accounts receivable and payable, and (iv) current
business debts.
(b) Year-end financial statements for Seller for the past three (3) years ending December 31, 2004.
(c) Business tax returns ending December 31, 2004, payroll and withholding tax records and sales tax returns for Seller for the past three (3) years ending December 31, 2004.
(d) Any other documents or items reasonably requested by Purchaser to assist in acquiring the Property.
ARTICLE 4.
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1.Representations, Warranties and Covenants of Seller. Seller represents, warrants and covenants to Purchaser that the following matters are true and correct as of the Effective Date and will also be true and correct as of Closing:
(a) Organization of Seller. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Kansas.
(b) Authorization of Transaction. Seller has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. Seller hereby represents and warrants that the individual has the capacity set forth on the signature page hereof with full power and authority to bind Seller.
(c) Bankruptcy. There are no attachments, executions or assignments for the benefit of creditors, receiverships, conservatorships or voluntary or involuntary proceedings in bankruptcy or actions pursuant to any other debtor relief laws contemplated by Seller or pending against Seller.
(d) Enforceability. This Agreement is, and all the documents executed by Seller which are to be delivered to Purchaser at Closing will be, duly executed and delivered by Seller, and is and will be the legal, valid and binding obligations of Seller enforceable against Seller in accordance with their respective terms (except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the right of contracting parties generally), and does not and will not violate any provisions of any court order, indenture, mortgage, deed of trust or other agreement to which Seller is a part or by which it is bound.
(e) Other Contracts. Seller has not entered into any other contracts for the sale of, and no person has any option or any other right to purchase, all or a portion of the Seller's Business.
(f) Taxes. Except for personal property taxes for the current year, there are no existing taxes or governmental assessments which are unpaid, and Seller has no knowledge of any pending assessments. Seller has paid all sales, use, payroll and withholding taxes pertaining to the operation of Seller's Business through the quarter ending March 31, 2005.
(g) Employee Obligations. No later than ten (10) days after the Effective Date, Seller shall provide Purchaser with the name and current annual salary or hourly wage of each full-time employee of Seller employed in connection with the Seller's Business. Seller shall terminate all written employment or consulting agreements or similar written agreements of Seller. All employee wages, benefits, vacation time, vacation pay, sick leave and all employer tax liabilities and withholding taxes through Closing have been paid, or at Closing will be paid for by Seller. Seller shall not terminate the employment of any of its employees prior to Closing, without the prior written consent of Purchaser, which consent shall not be unreasonably withheld.
(h) Change of Name. Seller shall permit Purchaser to acquire the use of the names CattleFeeding.com, CattleNetwork, CattleNetwork.com and CattleStore.com. Seller has not operated any of its business, or held any of the Property owned by Seller under any other fictitious or assumed business name or trade name.
(i) Litigation. Seller has no actual knowledge of any actions, suits or proceedings which have been instituted or threatened against or affecting the Seller's Business, at law or in equity, or before any federal, state or municipal governmental commission, board, bureau, agency or instrumentality which will materially adversely affect the value, use or operation of the Seller's Business. Seller will give Purchaser prompt written notice of any such action, suit or proceeding arising subsequent to the date hereof and prior to Closing to the extent Seller acquires actual knowledge thereof.
(j) Accurate Documents. The documents and information to be delivered by Seller to Purchaser pursuant to this Agreement will be complete, accurate and not misleading.
Seller shall promptly notify Purchaser in writing of any material changes in any of such representations and warranties. If any of the above representations and warranties are not substantially true at closing, Purchaser may cancel this Agreement at Closing, whereupon neither party shall have further liability and all things of value delivered by one Party to the other shall be returned. Except as noted, the above representations and warranties shall survive Closing and shall not be merged into the other instruments of Closing.
ARTICLE 5.
PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1.Representations, Warranties and Covenants of Purchaser. Purchaser represents, warrants and covenants to Seller that the following matters are true and correct as of the Effective Date and will be true and correct as of Closing:
(a) Organization of Purchaser. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
(b) Authorization of Transaction. Purchaser has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. Purchaser hereby represents and warrants that the individual has the capacity set forth on the signature page hereof with full power and authority to bind Purchaser.
(c) Enforceability. This Agreement is, and all the documents executed by Purchaser which are to be delivered to Seller at Closing will be, duly executed and delivered by Purchaser, and is and will be the legal, valid and binding obligations of Purchaser enforceable against Purchaser in accordance with their respective terms (except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the right of contracting parties generally), and does not and will not violate any provisions of any court order, indenture, mortgage, deed of trust or other agreement to which Purchaser is a part or by which it is bound.
ARTICLE 6.
CONDITIONS TO CLOSING
6.1.Conditions to Obligations of the Purchaser. The obligation of the Purchaser to consummate the transaction to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:
(a) Private Placement. Purchaser prior to Closing will have completed a private placement stock offering for a minimum of Five Hundred Thousand Dollars ($500,000.00).
(b) Representations and Warranties. The representations and warranties set forth in Article 4 above shall be true and correct in all material aspects at and as of Closing.
(c) No Litigation. No material action, suit or proceeding shall be pending or threatened before any court or quasi-judicial or administrative action or any federal, state, local or foreign jurisdiction or in an unfavorable judgment, order, decree, stipulation, injunction, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement or (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation and no such judgment, order, decree, stipulation, injunction or charge shall be in effect.
(d) Seller's Deliveries. Seller shall have delivered to Purchaser the items described in Section 7.2(a) and all actions to be taken by Seller in connection with the consummation of the transaction contemplated hereby and all certificates, opinions, instruments and other documents required to effect the transactions contemplated hereby will be satisfactory in form and substance to the Purchaser and its counsel.
Purchaser may, at its sole election, waive any conditions specified in this
Section 6.1 if it executes a writing so stating at or prior to Closing.
6.2.Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions to be performed by them in connection with the Closing is subject to satisfaction of the following conditions:
(a) Representations and Warranties. The representations and warranties set forth in Article 5 above shall be true and correct in all material aspects at and as of Closing.
(b) Purchaser's Deliveries. Purchaser shall have delivered to Closing Agent the items described in Section 7.2(b) and all actions to be taken by Purchaser in connection with the consummation of the transaction contemplated hereby and all certificates, opinions, instruments and other documents required to effect the transactions contemplated hereby will be satisfactory in form and substance to Seller and its counsel.
Seller may, at its sole election, waive any conditions specified in this Section 6.2 if it executes a writing so stating at or prior to Closing.
ARTICLE 7.
CLOSING
7.1.Closing. The closing of the transaction contemplated by this Agreement (the "Closing") shall take place at the offices of IMI, 601 4th Street, Platte City, MO 64079, commencing at a time and date mutually agreed by the Parties, but in no event later than May 15, 2005.
7.2.Deliveries at Closing. At Closing, the Parties will deliver the following:
(a) Seller will deliver to Purchaser:
(i) A Bill of Sale for all of the Property, in the form of Exhibit G attached hereto (the "Bill of Sale");
(ii)Assignment and Assumption Agreements for the Contracts, properly executed and acknowledged and in such form as Purchaser shall reasonably request (the "Assignments");
(iii) Such sums as Closing Agent shall require to pay Seller's share of
Closing costs, prorations, reimbursements and adjustments as set forth in
Section 7.3 and 7.4 hereof in immediately available funds;
(iv)The Non-Compete Agreement (as defined in Section 8.1); and
(v) Such other instruments of sale, transfer, conveyance and assignment as Purchaser reasonably may request.
(b) Purchaser shall deliver to Seller:
(i) The balance of the Purchase Price as specified in Section 2.2(b) above, together with such other sums as Closing Agent shall require to pay Purchaser's share of Closing costs, prorations, reimbursements and adjustments as set forth in Section 7.3 and 7.4 hereof in immediately available funds;
(ii)The Note;
(iii) The Assignments, properly executed and acknowledged and in such form as Seller shall reasonably request;
(iv)The Non-Compete Agreement; and
(v) Such other instruments of sale, transfer, conveyance and assignment as Seller reasonably may request.
7.3.Closing Costs. Seller shall pay for a maximum of $2,000 of all Closing costs. Purchaser shall pay all other closing costs.
ARTICLE 8.
NON-COMPETE AGREEMENT
8.1.Non-Compete Agreement. Cook agrees to execute and deliver to Purchaser, on or prior to Closing, a non-compete agreement (the "Non-Compete Agreement"), in the form attached hereto as Exhibit H, which provides that Cook shall not own or operate (directly or indirectly) an online cattle information Internet site or domain or otherwise compete with Purchaser's operation of the business for a period of eighteen (18) months from Closing. The consideration for execution of the Non-Compete Agreement shall be included within the Purchase Price.
ARTICLE 9.
SELLER'S OPERATIONAL COVENANTS
9.1.Negative Covenants as to the Future Operations. Between the Effective Date and Closing, except as contemplated by this Agreement, without the prior written consent of Purchaser, Seller will not: (a) enter into, make or cancel any other contract, arrangement or commitment of or regarding Seller's Business; (b) agree to or implement any change materially increasing the compensation or benefits payable to or to become payable to any person or entity employed or engaged by Seller in connection with the conduct of the Seller's Business; (c) create or suffer any (i) material adverse change in the condition of the Seller's Business, or the operation or conduct thereof or (ii) suffer any damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting the Seller's Business or the operation or conduct thereof; or (d) sell, assign or otherwise transfer or dispose of, in any manner, any of the assets of the Seller's Business except in the ordinary course of business.
9.2.Affirmative Covenants as to Future Operations. Between the Effective Date and Closing, Seller will: (a) conduct the Seller's Business diligently, prudently and in the ordinary course of business and use its best efforts to preserve and expand the Seller's Business, including but not limited to, neither accelerating its usual collection efforts nor reducing its existing marketing or sales efforts, and to preserve the goodwill of its customers, suppliers and others having business relations with Seller; (b) comply with applicable laws, rules and regulations, and pertinent provisions of all contracts and other agreements to which any of Seller is a party, which affect or may affect the Seller's Business; (c) pay any taxes (including, but not limited to, sales, use and employee withholding taxes) accrued or incurred from and after the Effective Date to Closing, and prepare and file or submit any returns and documents with respect thereto in the manner provided by and in compliance with all applicable law; (d) pay all expenses in the ordinary course of business, including the payment of salaries and other compensation to Seller's employees, and all debts as they become due and shall, on or before Closing, fully discharge and satisfy all liabilities, indebtedness and obligations; (e) give to Purchaser and its counsel, accountants and other representatives full access during ordinary business hours to all of Seller's properties, books, records and papers relating to the Seller's Business; and (f) immediately notify Purchaser of any change in circumstances or facts affecting the Seller's Business, or of any loss or change in the relationship between Seller and any of its customers, clients or suppliers.
ARTICLE 10.
DEFAULT
10.1. Purchaser's Default. If the Purchaser is in default under this Agreement, Seller may elect to treat this Agreement as terminated. It is agreed that termination is the Seller's sole and only remedy for the Purchaser's failure to perform the obligations of this Agreement.
10.2. Seller's Default. If Seller is in default under this Agreement, Purchaser may elect to treat this Agreement as terminated and recover such damages as may be proper. In the alternative, at its sole election, Purchaser may treat this Agreement as being in full force and effect, and Purchaser shall have the right to an action for specific performance or damages, or both.
10.3. Costs and Expenses. Notwithstanding anything to the contrary in this Agreement, in the event of any arbitration or litigation arising out of this Agreement, the arbitrator or court shall award to the prevailing party all reasonable costs and expenses in connection therewith, including reasonable attorneys' fees.
ARTICLE 11.
COMMISSION
11.1. Commission. Each Party warrants and certifies to the other Party that neither Party has engaged or used the services of a business broker or other agent in connection with this transaction.
ARTICLE 12.
MISCELLANEOUS
12.1. Survival. All of the representations, warranties and covenants of the Purchaser and Seller contained in this Agreement shall survive Closing.
12.2. No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns.
12.3. Entire Agreement. This Agreement, including the exhibits and documents referred to herein, constitutes the entire agreement between the Parties and supersedes any prior understandings, agreements or representations by or between the Parties, written or oral, that may have related in any way to the subject matter hereof.
12.4. Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign this Agreement or any of its rights, interest or obligations hereunder without the prior written approval of the other Party.
12.5. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. A facsimile machine copy of an original signature shall be binding as if it were an original signature.
12.6. Headings. The article and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.
12.7. Notices. All notices, requests, demands, claims or other communications shall be given in writing or by electronic facsimile. Any notice, request, demand, claim or other communication hereunder shall be deemed duly given if it is sent by certified mail, return receipt requested, postage prepaid and addressed to the intended recipient as set forth below and a copy of the communication is sent by electronic facsimile to the Fax number shown:
(a) If to the Seller:
CattleFeeding.com, Inc. C/O Jeff Sternberger Midwest Feeders, Inc. 05013 13 Road Ingalls, KS 67853 620-335-5790
With a copy to:
Cattle Empire, LLC.
Rt. 1 Box 109A
Satanta, KS 67870
Fax: 620-649-2218
(b) If to the Purchaser:
John K. Saunders, President
IMI, Inc.
601 4th Street
Platte City, MO 64079
Fax:
With a copy to:
Jerry C. Burk, Esq.
Burk & Burk
8400 E. Prentice Ave., Suite 1005
Greenwood Village, CO 80111
Fax: 303-793-3177
Any party may change the address to which notices are to be delivered by giving the other party notice in a manner herein set forth.
12.8. Governing Law. This Agreement shall be governed and construed in accordance with the internal laws (and not the law of conflicts) of the State of Missouri.
12.9. Amendments and Waivers. No amendment of any provision of this Agreement will be valid unless it is in writing and signed by the Parties. No waiver by any Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent fault, misrepresentation or breach of warranty or covenant hereunder or effect in any way any rights arising by virtue of any prior or subsequent such occurrence.
12.10. Severability. Any term or provision of this Agreement that is invalid or unenforceable under law in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to reform the scope, duration or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closer to expressing the intentions of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of time within which judgment may be appealed.
12.11. Expenses. The Purchaser and Seller will each bear their own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.
12.12. Construction. The language used in this Agreement will be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction will be applied against any Party. The Parties intend that each representation, warranty and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty or covenant.
12.13. Further Assurances. From time to time after the execution of this Agreement or Closing, Seller shall, if reasonably requested by Purchaser, make, execute and deliver to Purchaser such additional assignments, bills of sale or other instruments of transfer as may be necessary or proper to transfer to Purchaser all of Seller's right, title and interest in and to any of Seller's Business. Purchaser shall likewise execute and deliver to Seller any instruments or documents necessary to carry out the intent and purposes of this Agreement.
12.14. Time of Essence. Time is of the essence in the performance of and compliance with each of the provisions and conditions of this Agreement.
The Parties have executed this Agreement as of the date first written above.
PURCHASER:
INTEGRATED MANAGEMENT INFORMATION, INC. DBA
IMI GLOBAL, INC., a Delaware
corporation
By:
John K. Saunders, President
SELLER:
CATTLEFEEDING.COM, INC.,
a Kansas corporation
By:Rob Cook
, President
By:Ron Shortridge
, Director
By:Jeff Sternberger
, Director
By:Jim Robison
, Director
Rob Cook, Individually
EXHIBIT A
Schedule of Computers
1. Rob Cook - Desktop
2. Matt Morgan - Desktop
EXHIBIT B
Schedule of Contracts
1. Cargill Animal Health
2. Future Source Royalty
3. Any other contracts signed after March 1, 2005
EXHIBIT C
Schedule of Customer and Subscriber Lists
1. See CattleNetwork database of subscribers
EXHIBIT D
Schedule of Books and Records
1. Tax Returns and Financial Records from 2002, 2003 and 2004
EXHIBIT E
Schedule of Trade Names and Product Names
1. CattleNetwork.com
2. CattleStore.com
EXHIBIT F
Schedule of Assumed Liabilities and Contracts
1. IMI assumes no more than $10,000 on liabilities incurred prior to
March 1, 2005.
2. Purchaser assumes all liabilities after March 1, 2005
EXHIBIT G
Bill of Sale
(attached)
BILL OF SALE AND ASSIGNMENT
THIS BILL OF SALE AND ASSIGNMENT is by and between CattleFeeding.com, Inc. (hereinafter called "Seller"), a Kansas corporation, and Integrated Management Information, Inc. dba IMI Global, Inc., a Delaware corporation (hereinafter called "Purchaser").
W I T N E S S E T H:
For and in consideration of Ten Dollars and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Seller, Seller has bargained and sold and by these presents does assign, grant and convey to Purchaser, its successors and assigns, all of the following property, goods and chattels:
a) Two computers described as: Rob Cook's desktop, Matt Morgan's Desktop
b) Intangibles and intellectual properties related to CattleNetwork.com and CattleStore.com.
c) All goodwill associated with the Seller's business operated at 601 4th Street, Platte City, MO 64079.
To have and to hold the same unto Purchaser, its successors and assigns forever. And Seller, for itself and its successors and assigns, covenants and agrees to and with Purchaser, its successors and assigns, to warrant and defend the sale of said property, goods and chattels hereby made unto Purchaser, its successors and assigns, against all and every person or persons whomsoever.
Seller, for itself and its successors and assigns, warrants and represents to Purchaser that said property, goods and chattels are, have been, and shall be delivered free from, any security interest or any other lien or encumbrance except for personal property taxes for the year 2005.
Executed as of the _____ day of May, 2005.
CattleFeeding.com Inc.,
a Kansas corporation
By: Rob Cook
, President
By: Ron Shortridge
, Director
By: Jeff Sternberger
, Director
By: Jim Robison
, Director
EXHIBIT K
Non-Compete Agreement
(attached)
NON-COMPETE AGREEMENT
THIS NON-COMPETE AGREEMENT (the "Agreement") is entered into and effective as of the 1st day of May, 2005 (the "Effective Date"), among ROB COOK, an individual ("Cook"), CATTLEFEEDING.COM, INC., a Kansas corporation (the "Seller") and INTEGRATED MANAGEMENT INFORMATION, INC. DBA IMI GLOBAL, INC., a Delaware corporation (the "Purchaser"), hereafter collectively the "Parties."
R E C I T A L S
A. Cook is the __________________ of the Seller. Cook and the Seller operate that certain business known as CattleNetwork.com (the "Business") located at 601 4th Street, Platte City, MO 64079. The Parties entered into that certain Asset Purchase Agreement dated as of May _____, 2005 (the "Asset Purchase Agreement") pursuant to which the computers, customer and subscriber lists and other personal property pertaining to the Business are being sold to the Purchaser.
B. The Parties acknowledge that Cook and the Seller have unique knowledge and experience in the business of operating online cattle information web sites, and of the customers and subscribers of the Seller.
C. In connection with the Asset Purchase Agreement and as an inducement to the Purchaser entering into the Asset Purchase Agreement, Purchaser requests that Cook and the Seller refrain from competing with the Purchaser on the terms and subject to the conditions hereinafter set forth.
D. Cook and the Seller agree to refrain from competing with the Purchaser in accordance with the terms and provisions and subject to the conditions of this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter contained, the Parties agree as follows:
1. Non-Competition.
(a) The Parties hereto acknowledge and agree that the Purchaser would not have acquired the assets of the Seller unless Cook agreed to enter into this Agreement. Accordingly, Cook and the Seller, jointly and severally, agree that, for a period of eighteen (18) months from the Effective Date (the "Term"), neither of them shall do any of the following:
(1) Solicit for employment or employ to or for the benefit or account of any person or entity other than the Purchaser any employee of the Purchaser during the period that such employee is employed by the Purchaser, and for a period of three (3) months after such employee has left the employment of the Purchaser, nor shall any of them urge, directly or indirectly, any of the Purchaser's customers, suppliers or employees to discontinue, in whole or in part, doing business with the Purchaser.
(2) Directly or indirectly engage or be involved in any way, either as a consultant, independent contractor, proprietor, stockholder, partner, member, manager, officer, director, employee, developer or otherwise, in any business that operates an online cattle information web site or domain.
(b) The Parties hereto agree that to the extent that any provision or portion of Section 1(a) of this Agreement shall be held, found or deemed to be unreasonable, unlawful or unenforceable by a court of competent jurisdiction, then any such provision or portion thereof shall be deemed to be modified only to the extent necessary in order that any such provision or portion thereof shall be legally enforceable to the fullest extent permitted by applicable law; and the Parties hereto do further agree that any court of competent jurisdiction shall, and the Parties hereto do hereby expressly authorize, request and empower any court of competent jurisdiction to, enforce any such provision or portion thereof or to modify any such provision or portion thereof in order that any such provision or portion thereof shall be enforced by such court to the fullest extent permitted by applicable law.
2. Remedies. If either party breaches any of the terms or provisions of this Agreement, the aggrieved party may enforce the terms and provisions of this Agreement by injunction, specific performance, recovery of damages or any other remedy available at law or in equity. The terms and provisions of this Agreement are cumulative. Nothing in this Agreement shall be construed as prohibiting the Purchaser from pursuing any other remedies available to it for a breach or threatened breach of this Agreement. In the event of any litigation or arbitration to resolve any dispute related to this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party an award of its reasonable attorneys' fees and costs.
3. Miscellaneous.
(a) Survival of Certain Covenants. The covenants and obligations contained in Section 1 of this Agreement shall survive the termination and expiration of the term of this Agreement.
(b) Notices. All notices, requests, demands, consents and other communications that are required or that may be given under this Agreement shall be in the form and given in accordance with the terms of the provisions regarding notice contained in the Asset Purchase Agreement.
(c) Entire Agreement. This Agreement constitutes the full, entire and integrated agreement between the Parties hereto with respect to the subject matter hereof, and supersedes all prior negotiations, correspondence, understandings and agreements among the parties hereto respecting the subject matter hereof.
(d) Assignability. This Agreement shall not be assignable by any party hereto without the prior written consent of the other Parties hereto, and any attempted assignment in violation of this Section 3(d) shall be void and of no effect.
(e) Severability. Any provision of this Agreement that is held by a court of competent jurisdiction to be prohibited or unenforceable shall be ineffective only to the extent of such prohibition or unenforceability, without invalidating or rendering unenforceable the remaining provisions of this Agreement.
(f) Amendment; Waiver. No provision of this Agreement may be amended, waived or otherwise modified without the prior written consent of all of the Parties hereto. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute a wavier by the party taking such action of compliance with any provision herein contained. The waiver by any party hereto of a breach of any provision or condition contained in this Agreement shall not operate or be construed as a waiver of any subsequent breach or of any other conditions or terms hereof.
(g) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.
(h) Applicable Law. This Agreement shall be governed by and construed, interpreted and enforced in accordance with the laws of the State of Missouri, without regard to the conflicts of law provisions thereof.
(i) Use of Pronouns. Whenever used in this Agreement the singular shall include the plural and vice versa, and the use of any gender shall include all genders and the neuter.
IN WITNESS WHEREOF, the Parties, intending to be legally bound, hereby execute this Agreement as of the date first written above.
SELLER:
CattleFeeding.com, Inc.,
a Kansas corporation
By:
__________________, President
Rob Cook, Individually
PURCHASER:
Integrated Management Information, Inc.
dba IMI Global, Inc., a Delaware corporation
By:
John K. Saunders, President
ARTICLES OF INCORPORATION
OF
INTEGRATED MANAGEMENT INFORMATION, INC.
The undersigned natural persons of the age of eighteen (18) years or more acting as incorporator of a corporation under the Colorado Revised Civil Statutes, Title 7, hereby adopts the following Articles of Incorporation:
ARTICLE I
NAME
The name of the corporation (hereinafter called "Corporation") is INTEGRATED
MANAGEMENT INFORMATION, INC.
ARTICLE II
PERIOD OF DURATION
The period of duration of the Corporation is perpetual.
ARTICLE III
PURPOSES AND POWERS
The purpose for which this Corporation is organized is to transact all lawful business for which corporations may be incorporated pursuant to the Colorado Corporations Code.
ARTICLE IV
CAPITALIZATION
The total number of shares of stock which the Corporation shall have the authority to issue is one hundred million (100,000,000) shares, consisting of ninety-five million (95,000,000) shares of Common Stock having a par value of $.001 per share and five million (5,000,000) shares of Preferred Stock having a par value of $.001 per share.
A. Preferred Stock
The Board of Directors is authorized, subject to the limitations prescribed by law and the provisions of this Article, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Colorado, to establish from time to time the number of shares to be included in each such series and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof.
1. The authority of the Board with respect to each series shall include, but not be limited to, determination of the following:
a. The number of shares constituting that series and the distinctive designation of that series;
b. The dividend rate on the shares of that series, whether dividends shall be cumulative, and if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;
c. Whether that series shall have voting rights, in addition to the voting rights provided by law, and if so, the terms of such voting rights;
d. Whether that series shall have conversion privileges and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine;
e. Whether or not the shares of that series shall be redeemable and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;
f. Whether that series shall have a sinking fund for the redemption or purchase of shares of that series and, if so, the terms and amount of such sinking fund;
g. The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and
h. Any other relative rights, preferences and limitations of that
series.
2. Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment, before any dividends shall be paid
or declared and set apart for payment on Common Stock with respect to
the same dividend period.
3. If upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the assets available for distribution to holders of shares of Preferred Stock of all series shall be insufficient to pay such holders the full preferential amount to which they are entitled, then such assets shall be distributed ratably among the shares of all series of Preferred Stock in accordance with the respective preferential amounts (including unpaid cumulative dividends, if any) payable with respect thereto.
4. Unless otherwise provided in any resolution of the Board of Directors providing for the issuance of any particular series of Preferred Stock, no holder of Preferred Stock shall have any pre-emptive right as such holder to subscribe for, purchase or receive any part of any new or additional issue of capital stock of any class or series, including unissued and treasury stock, or obligations or other securities convertible into or exchangeable for capital stock of any class or series, or warrants or other instruments evidencing rights or options to subscribe for, purchase or receive any capital stock of any class or series, whether now or hereafter authorized and whether issued for cash or other consideration or by way of dividend.
B. Common Stock
1. Subject to the prior and superior rights of the Preferred Stock and on the conditions set forth in the foregoing parts of this Article or in any resolution of the Board of Directors providing for the issuance of any particular series of Preferred Stock, and not otherwise, such dividends (payable in cash, stock or otherwise) as may be determined by the Board of Directors may be declared and paid on the Common Stock from time to time out of any funds legally available therefor.
2. Except as otherwise provided by law, by this Certificate of Incorporation or by the resolution or resolutions of the Board of Directors providing for the issue of any series of the Preferred Stock, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, each holder of the Common Stock being entitled to one vote for each share held.
3. Upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, and after the holders of the Preferred Stock of each series shall have been paid in full the amount to which they respectively shall be entitled, or a sum sufficient for such payments in assets of the Corporation shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights and interests, to the exclusion of the holders of the Preferred Stock.
ARTICLE V
REGISTERED OFFICE
The address of the principal office and principal place of business of the corporation is Brookside Office Park, 801 South Perry St. #110, Castle Rock, CO 80104.
ARTICLE VI
REGISTERED AGENT
The Registered Agent for the corporation is Jay D. Belk and his address is Brookside Office Park, 801 South Perry Street #110, Castle Rock, Colorado 80104.
ARTICLE VII
DIRECTORS
The Corporation shall be governed by a Board of Directors consisting of four directors or such number as shall be fixed the Corporation's bylaws.
ARTICLE VIII
INCORPORATOR
The name and address of the incorporator is:
Hank Vanderkam
Vanderkam & Associates
1301 Travis, #1200
Houston, TX 77002
ARTICLE XI
DENIAL OF PREEMPTIVE RIGHTS
There shall be no preemptive right to acquire unissued and/or treasury shares of the stock of the Corporation.
ARTICLE X
LIMITATION ON LIABILITY FOR BREACH OF FIDUCIARY DUTY
The personal liability of a director to this Corporation or to its shareholders for monetary damages for breach of fiduciary duty as a director is hereby eliminated; except that such provision shall not eliminate or limit the liability of a director to the Corporation or its shareholders for monetary damages for:
1. Any breach of the director's duty of loyalty to the Corporation or to its shareholders;
2. Acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
3. Acts specified in Section 7-108-403 of the Colorado Revised Status, as amended or any successor thereto; or
4. Any transaction from which the director derived an improper personal benefit.
ARTICLE XI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
This Corporation shall indemnify and advance expenses to its Directors, officers, employees and agents to the fullest extent permitted by Section 7-109-101, et seg., Colorado Revised Statutes, or any corresponding provision of subsequent law, as the same may be amended from time to time; and each Director, officer, employee and agent of the Corporation shall be entitled to be indemnified and have expenses advanced by the Corporation to the fullest extent possible permitted by Section 7-109-101, et seg., Colorado Revised Statutes, or any corresponding provision of subsequent law, as the same may be amended from time to time. Provided, however, that if any amendement to the Colorado Corporation Code shall operate to limit, reduce or eliminate any person's rights to indemnification under this paragraph, then each of such persons wshall be indemnified by the Corporation to the fullest extent permitted by the Colorado Corporation Code immediately prior to the effectiveness of such indemnification allowed or provided by law, by these Articles of Incorporation, by the Bylaws of the Corporation, by any resolution of the Corporation, or pursuant to any insurance policy owned by the Corporation pertaining thereto. The provisions hereof shall continue to apply to any person who has ceased to be a Director, officer, employer or agent of the Corporation, and shall inure to the benefit of the heirs, executors, administrators and personal representatives of any such person.
DATED this ___ day of March 2006. Incorporator:
------------------------
Hank Vanderkam
Vanderkam & Associates
1301 Travis, #1200
Houston, TX 77002
|
STATE OF TEXAS ss.
ss.
COUNTY OF HARRIS ss.
|
On ______________, 2006 personally appeared before me, a Notary Public, Hank Vanderkam, who acknowledged that he executed the above document in his capacity as Incorporator of Integrated Management Information, Inc.
[SEAL]
BYLAWS
OF
INTEGRATED MANAGEMENT INFORMATION, INC.
A Colorado corporation
ARTICLE 1)
DEFINITIONS
a) Definitions. Unless the context clearly requires otherwise, in
these Bylaws: i) "Board" means the board of directors of the
Company. ii) "Bylaws" means these bylaws as adopted by the
Board and includes amendments
subsequently adopted by the Board or by the Stockholders.
iii) "Articles of Incorporation" means the Articles of
Incorporation of Integrated Management Information, Inc., as
filed with the Secretary of State of the State of Colorado and
includes all amendments thereto and restatements thereof
subsequently filed.
iv) "Company" means Hickey Tuner Capital, Inc., a Colorado
corporation. v) "Section" refers to sections of these Bylaws.
vi) "Stockholder" means the stockholders of record of the
Company.
b) Offices. The title of an office refers to the person or persons who
at any given time perform the duties of that particular office for the Company.
ARTICLE 2)
OFFICES
a) Principal Office. The Company may locate its principal office within or without the state of incorporation as the Board may determine.
b) Registered Office. The registered office of the Company required by
law to be maintained in the state of incorporation may be, but need not be, the
same as the principal place of business of the Company. The Board may change the
address of the registered office from time to time.
c) Other Offices. The Company may have offices at such other places,
either within or without the state of incorporation, as the Board may designate
or as the business of the Company may require from time to time.
ARTICLE 3)
MEETINGS OF STOCKHOLDERS
a) Annual Meetings. The Stockholders of the Company shall hold their
annual meetings for the purpose of electing directors and for the transaction of
such other proper business as may come before such meetings at such time, date
and place, as the Board shall determine by resolution.
b) Special Meetings. The Board, the Chairman of the Board, the
President or a committee of the Board duly designated and whose powers and
authority include the power to call meetings may call special meetings of the
Stockholders of the Company at any time for any purpose or purposes. Special
meetings of the Stockholders of the Company may also be called by the holders of
at least 30% of all shares entitled to vote at the proposed special meeting.
c) Place of Meetings. The Stockholders shall hold all meetings at such
places, within or without the State of Colorado, as the Board or a committee of
the Board shall specify in the notice or waiver of notice for such meetings.
d) Notice of Meetings. Except as otherwise required by law, the Board or a committee of the Board shall give notice of each meeting of Stockholders, whether annual or special, not less than 10 nor more than 50 days before the date of the meeting. The Board or a committee of the Board shall deliver a notice to each Stockholder entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him at his address as it appears on the records of the Company, or by transmitting a notice thereof to him at such address by telegraph, telecopy, cable or wireless. If mailed, notice is given on the date deposited in the United States mail, postage prepaid, directed to the Stockholder at his address as it appears on the records of the Company. An affidavit of the Secretary or an Assistant Secretary or of the Transfer Agent of the Company that he has given notice shall constitute, in the absence of fraud, prima facie evidence of the facts stated therein. Every notice of a meeting of the Stockholders shall state the place, date and hour of the meeting and, in the case of a special meeting, also shall state the purpose or purposes of the meeting. Furthermore, if the Company will maintain the list at a place other than where the meeting will take place, every notice of a meeting of the Stockholders shall specify where the Company will maintain the list of Stockholders entitled to vote at the meeting.
e) Stockholder Notice. Subject to the Articles of Incorporation, the
Stockholders who intend to nominate persons to the Board of Directors or propose
any other action at an annual meeting of Stockholders must timely notify the
Secretary of the Company of such intent. To be timely, a Stockholder's notice
must be delivered to or mailed and received at the principal executive offices
of the Company not less than 50 days nor more than 90 days prior to the date of
such meeting; provided, however, that in the event that less than 75 days'
notice of the date of the meeting is given or made to Stockholders, notice by
the Stockholder to be timely must be received not later than the close of
business on the 15th day following the date on which such notice of the date of
the annual meeting was mailed. Such notice must be in writing and must include a
(i) a brief description of the business desired to the brought before the annual
meeting and the reasons for conducting such business at the meeting; (ii) the
name and record address of the Stockholder proposing such business; (iii) the
class, series and number of shares of capital stock of the Company which are
beneficially owned by the Stockholder; and (iv) any material interest of the
Stockholder in such business. The Board of Directors reserves the right to
refuse to submit any such proposal to stockholders at an annual meeting if, in
its judgment, the information provided in the notice is inaccurate or
incomplete.
f) Waiver of Notice. Whenever these Bylaws require written notice, a
written waiver thereof, signed by the person entitled to notice, whether before
or after the time stated therein, shall constitute the equivalent of notice.
Attendance of a person at any meeting shall constitute a waiver of notice of
such meeting, except when the person attends the meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. No written
waiver of notice need specify either the business to be transacted at, or the
purpose or purposes of any regular or special meeting of the Stockholders,
directors or members of a committee of the Board.
g) Adjournment of Meeting. When the Stockholders adjourn a meeting to
another time or place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting, the Stockholders may transact any business
which they may have transacted at the original meeting. If the adjournment is
for more than 30 days or, if after the adjournment, the Board or a committee of
the Board fixes a new record date for the adjourned meeting, the Board or a
committee of the Board shall give notice of the adjourned meeting to each
Stockholder of record entitled to vote at the meeting.
h) Quorum. Except as otherwise required by law, the holders of
twenty-five percent (25%) of all of the shares of the stock entitled to vote at
the meeting, present in person or by proxy, shall constitute a quorum for all
purposes at any meeting of the Stockholders. In the absence of a quorum at any
meeting or any adjournment thereof, the holders of a majority of the shares of
stock entitled to vote who are present, in person or by proxy, or, in the
absence therefrom of all the Stockholders, any officer entitled to preside at,
or to act as secretary of, such meeting may adjourn such meeting to another
place, date or time.
If the chairman of the meeting gives notice of any adjourned
special meeting of Stockholders to all Stockholders entitled to vote thereat,
stating that the minimum percentage of stockholders for a quorum as provided by
Colorado law shall constitute a quorum, then, except as otherwise required by
law, that percentage at such adjourned meeting shall constitute a quorum and a
majority of the votes cast at such meeting shall determine all matters.
i) Organization. Such person as the Board may have designated or, in
the absence of such a person, the highest ranking officer of the Company who is
present shall call to order any meeting of the Stockholders, determine the
presence of a quorum, and act as chairman of the meeting. In the absence of the
Secretary or an Assistant Secretary of the Company, the chairman shall appoint
someone to act as the secretary of the meeting.
j) Conduct of Business. The chairman of any meeting of Stockholders
shall determine the order of business and the procedure at the meeting,
including such regulations of the manner of voting and the conduct of discussion
as he deems in order.
k) List of Stockholders. At least 10 days before every meeting of
Stockholders, the Secretary shall prepare a list of the Stockholders entitled to
vote at the meeting or any adjournment thereof, arranged in alphabetical order,
showing the address of each Stockholder and the number of shares registered in
the name of each Stockholder. The Company shall make the list available for
examination by any Stockholder for any purpose germane to the meeting, during
ordinary business hours, for a period of at least 10 days prior to the meeting,
either at a place within the city where the meeting will take place or at the
place designated in the notice of the meeting.
The Secretary shall produce and keep the list at the time and
place of the meeting during the entire duration of the meeting, and any
Stockholder who is present may inspect the list at the meeting. The list shall
constitute presumptive proof of the identity of the Stockholders entitled to
vote at the meeting and the number of shares each Stockholder holds.
A determination of Stockholders entitled to vote at any
meeting of Stockholders pursuant to this Section shall apply to any adjournment
thereof.
l) Fixing of Record Date. For the purpose of determining Stockholders
entitled to notice of or to vote at any meeting of Stockholders or any
adjournment thereof, or Stockholders entitled to receive payment of any
dividend, or in order to make a determination of Stockholders for any other
proper purpose, the Board or a committee of the Board may fix in advance a date
as the record date for any such determination of Stockholders. However, the
Board shall not fix such date, in any case, more than 60 days nor less than 10
days prior to the date of the particular action.
If the Board or a committee of the Board does not fix a record
date for the determination of Stockholders entitled to notice of or to vote at a
meeting of Stockholders, the record date shall be at the close of business on
the day next preceding the day on which notice is given or if notice is waived,
at the close of business on the day next preceding the day on which the meeting
is held or the date on which the Board adopts the resolution declaring a
dividend.
m) Voting of Shares. Each Stockholder shall have one vote for every share of stock having voting rights registered in his name on the record date for the meeting. The Company shall not have the right to vote treasury stock of the Company, nor shall another corporation have the right to vote its stock of the Company if the Company holds, directly or indirectly, a majority of the shares entitled to vote in the election of directors of such other corporation. Persons holding stock of the Company in a fiduciary capacity shall have the right to vote such stock. Persons who have pledged their stock of the Company shall have the right to vote such stock unless in the transfer on the books of the Company the pledgor expressly empowered the pledgee to vote such stock. In that event, only the pledgee, or his proxy, may represent such stock and vote thereon. A plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote shall determine all elections and, except when the law or Articles of Incorporation requires otherwise, the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote shall determine all other matters. Where a separate vote by a class or classes is required, a majority of the outstanding shares of such class or classes, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter and the affirmative vote of the majority of shares of such class or classes present in person or represented by proxy at the meeting shall be the act of such class. The Stockholders may vote by voice vote on all matters. Upon demand by a Stockholder entitled to vote, or his proxy, the Stockholders shall vote by ballot. In that event, each ballot shall state the name of the Stockholder or proxy voting, the number of shares voted and such other information as the Company may require under the procedure established for the meeting.
n) Inspectors. At any meeting in which the Stockholders vote by ballot,
the chairman may appoint one or more inspectors. Each inspector shall take and
sign an oath to execute the duties of inspector at such meeting faithfully, with
strict impartiality, and according to the best of his ability. The inspectors
shall ascertain the number of shares outstanding and the voting power of each;
determine the shares represented at a meeting and the validity of proxies and
ballots; count all votes and ballots; determine and retain for a reasonable
period a record of the disposition of any challenges made to any determination
by the inspectors; and certify their determination of the number of shares
represented at the meeting, and their count of all votes and ballots. The
certification required herein shall take the form of a subscribed, written
report prepared by the inspectors and delivered to the Secretary of the Company.
An inspector need not be a Stockholder of the Company, and any officer of the
Company may be an inspector on any question other than a vote for or against a
proposal in which he has a material interest.
o) Proxies. A Stockholder may exercise any voting rights in person or
by his proxy appointed by an instrument in writing, which he or his authorized
attorney-in-fact has subscribed and which the proxy has delivered to the
secretary of the meeting pursuant to the manner prescribed by law.
A proxy is not valid after the expiration of 13 months after
the date of its execution, unless the person executing it specifies thereon the
length of time for which it is to continue in force (which length may exceed 12
months) or limits its use to a particular meeting. Each proxy is irrevocable if
it expressly states that it is irrevocable and if, and only as long as, it is
coupled with an interest sufficient in law to support an irrevocable power.
The attendance at any meeting of a Stockholder who previously
has given a proxy shall not have the effect of revoking the same unless he
notifies the Secretary in writing prior to the voting of the proxy.
p) Action by Consent. Any action required to be taken at any annual or
special meeting of stockholders of the Company or any action which may be taken
at any annual or special meeting of such stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and shall be delivered to the
Company by delivery to its registered office, its principal place of business,
or an officer or agent of the Company having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Company's registered office shall be by hand or by certified or registered mail,
return receipt requested.
Every written consent shall bear the date of signature of each
stockholder who signs the consent, and no written consent shall be effective to
take the corporate action referred to therein unless, within 50 days of the
earliest dated consent delivered in the manner required by this section to the
Company, written consents signed by a sufficient number of holders to take
action are delivered to the Company by delivery to its registered office, its
principal place of business or an officer or agent of the Company having custody
of the book in which proceedings of meetings of stockholders are recorded.
Delivery made to the Company's registered office shall be by hand or by
certified or registered mail, return receipt requested.
Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE 4)
BOARD OF DIRECTORS
a) General Powers. The Board shall manage the property, business and
affairs of the Company. b) Number. The number of directors who shall
constitute the Board shall equal not less than 1 nor
more than 10, as the Board or majority stockholders may determine by resolution
from time to time.
c) Election of Directors and Term of Office. The Stockholders of the
Company shall elect the directors at the annual or adjourned annual meeting
(except as otherwise provided herein for the filling of vacancies). Each
director shall hold office until his death, resignation, retirement, removal, or
disqualification, or until his successor shall have been elected and qualified.
d) Resignations. Any director of the Company may resign at any time by
giving written notice to the Board or to the Secretary of the Company. Any
resignation shall take effect upon receipt or at the time specified in the
notice. Unless the notice specifies otherwise, the effectiveness of the
resignation shall not depend upon its acceptance.
e) Removal. Stockholders holding 2/3 of the outstanding shares entitled
to vote at an election of directors may remove any director or the entire Board
of Directors at any time, with or without cause.
f) Vacancies. Any vacancy on the Board, whether because of death,
resignation, disqualification, an increase in the number of directors, or any
other cause may be filled by a majority of the remaining directors, a sole
remaining director, or the majority stockholders. Any director elected to fill a
vacancy shall hold office until his death, resignation, retirement, removal, or
disqualification, or until his successor shall have been elected and qualified.
g) Chairman of the Board. At the initial and annual meeting of the
Board, the directors may elect from their number a Chairman of the Board of
Directors. The Chairman shall preside at all meetings of the Board and shall
perform such other duties as the Board may direct. The Board also may elect a
Vice Chairman and other officers of the Board, with such powers and duties as
the Board may designate from time to time.
h) Compensation. The Board may compensate directors for their services
and may provide for the payment of all expenses the directors incur by attending
meetings of the Board or otherwise.
ARTICLE 5)
MEETINGS OF DIRECTORS
a) Regular Meetings. The Board may hold regular meetings at such
places, dates and times as the Board shall establish by resolution. If any day
fixed for a meeting falls on a legal holiday, the Board shall hold the meeting
at the same place and time on the next succeeding business day. The Board need
not give notice of regular meetings.
b) Place of Meetings. The Board may hold any of its meetings in or out
of the State of Colorado, at such places as the Board may designate, at such
places as the notice or waiver of notice of any such meeting may designate, or
at such places as the persons calling the meeting may designate.
c) Meetings by Telecommunications. The Board or any committee of the
Board may hold meetings by means of conference telephone or similar
telecommunications equipment that enable all persons participating in the
meeting to hear each other. Such participation shall constitute presence in
person at such meeting.
d) Special Meetings. The Chairman of the Board, the President, or
one-half of the directors then in office may call a special meeting of the
Board. The person or persons authorized to call special meetings of the Board
may fix any place, either in or out of the State of Colorado as the place for
the meeting.
e) Notice of Special Meetings. The person or persons calling a special
meeting of the Board shall give written notice to each director of the time,
place, date and purpose of the meeting of not less than three business days if
by mail and not less than 24 hours if by telegraph or in person before the date
of the meeting. If mailed, notice is given on the date deposited in the United
States mail, postage prepaid, to such director. A director may waive notice of
any special meeting, and any meeting shall constitute a legal meeting without
notice if all the directors are present or if those not present sign either
before or after the meeting a written waiver of notice, a consent to such
meeting, or an approval of the minutes of the meeting. A notice or waiver of
notice need not specify the purposes of the meeting or the business which the
Board will transact at the meeting.
f) Waiver by Presence. Except when expressly for the purpose of
objecting to the legality of a meeting, a director's presence at a meeting shall
constitute a waiver of notice of such meeting.
g) Quorum. A majority of the directors then in office shall constitute
a quorum for all purposes at any meeting of the Board. In the absence of a
quorum, a majority of directors present at any meeting may adjourn the meeting
to another place, date or time without further notice. No proxies shall be given
by directors to any person for purposes of voting or establishing a quorum at a
directors meetings.
h) Conduct of Business. The Board shall transact business in such order
and manner as the Board may determine. Except as the law requires otherwise, the
Board shall determine all matters by the vote of a majority of the directors
present at a meeting at which a quorum is present. The directors shall act as a
Board, and the individual directors shall have no power as such.
i) Action by Consent. The Board or a committee of the Board may take
any required or permitted action without a meeting if all members of the Board
or committee consent thereto in writing and file such consent with the minutes
of the proceedings of the Board or committee.
ARTICLE 6)
COMMITTEES
a) Committees of the Board. The Board may designate, by a vote of a
majority of the directors then in office, committees of the Board. The
committees shall serve at the pleasure of the Board and shall possess such
lawfully delegable powers and duties as the Board may confer.
b) Selection of Committee Members. The Board shall elect by a vote of a
majority of the directors then in office a director or directors to serve as the
member or members of a committee. By the same vote, the Board may designate
other directors as alternate members who may replace any absent or disqualified
member at any meeting of a committee. In the absence or disqualification of any
member of any committee and any alternate member in his place, the member or
members of the committee present at the meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may appoint by unanimous
vote another member of the Board to act at the meeting in the place of the
absent or disqualified member.
c) Conduct of Business. Each committee may determine the procedural
rules for meeting and conducting its business and shall act in accordance
therewith, except as the law or these Bylaws require otherwise. Each committee
shall make adequate provision for notice of all meetings to members. A majority
of the members of the committee shall constitute a quorum, unless the committee
consists of one or two members. In that event, one member shall constitute a
quorum. A majority vote of the members present shall determine all matters. A
committee may take action without a meeting if all the members of the committee
consent in writing and file the consent or consents with the minutes of the
proceedings of the committee.
d) Authority. Any committee, to the extent the Board provides, shall
have and may exercise all the powers and authority of the Board in the
management of the business and affairs of the Company, and may authorize the
affixation of the Company's seal to all instruments which may require or permit
it. However, no committee shall have any power or authority with regard to
amending the Articles of Incorporation, adopting an agreement of merger or
consolidation, recommending to the Stockholders the sale, lease or exchange of
all or substantially all of the Company's property and assets, recommending to
the Stockholders a dissolution of the Company or a revocation of a dissolution
of the Company, or amending these Bylaws of the Company. Unless a resolution of
the Board expressly provides, no committee shall have the power or authority to
declare a dividend, to authorize the issuance of stock, or to adopt a
certificate of ownership and merger.
e) Minutes. Each committee shall keep regular minutes of its
proceedings and report the same to the Board when required.
ARTICLE 7)
OFFICERS
a) Officers of the Company. The officers of the Company shall consist
of a President, a Secretary and such Vice Presidents, Assistant Secretaries,
Assistant Treasurers, and other officers as the Board may designate and elect
from time to time. The same person may hold at the same time any two or more
offices.
b) Election and Term. The Board shall elect the officers of the
Company. Each officer shall hold office until his death, resignation,
retirement, removal or disqualification, or until his successor shall have been
elected and qualified.
c) Compensation of Officers. The Board shall fix the compensation of
all officers of the Company. No officer shall serve the Company in any other
capacity and receive compensation, unless the Board authorizes the additional
compensation.
d) Removal of Officers and Agents. The Board may remove any officer or
agent it has elected or appointed at any time, with or without cause.
e) Resignation of Officers and Agents. Any officer or agent the Board
has elected or appointed may resign at any time by giving written notice to the
Board, the Chairman of the Board, the President, or the Secretary of the
Company. Any such resignation shall take effect at the date of the receipt of
such notice or at any later time specified. Unless otherwise specified in the
notice, the Board need not accept the resignation to make it effective.
f) Bond. The Board may require by resolution any officer, agent, or
employee of the Company to give bond to the Company, with sufficient sureties
conditioned on the faithful performance of the duties of his respective office
or agency. The Board also may require by resolution any officer, agent or
employee to comply with such other conditions as the Board may require from time
to time.
g) President. The President shall be the chief operating officer of the
Company and, subject to the Board's control, shall supervise and direct all of
the business and affairs of the Company. When present, he shall sign (with or
without the Secretary, an Assistant Secretary, or any other officer or agent of
the Company which the Board has authorized) deeds, mortgages, bonds, contracts
or other instruments which the Board has authorized an officer or agent of the
Company to execute. However, the President shall not sign any instrument which
the law, these Bylaws, or the Board expressly require some other officer or
agent of the Company to sign and execute. In general, the President shall
perform all duties incident to the office of President and such other duties as
the Board may prescribe from time to time.
h) Vice Presidents. In the absence of the President or in the event of
his death, inability or refusal to act, the Vice Presidents in the order of
their length of service as Vice Presidents, unless the Board determines
otherwise, shall perform the duties of the President. When acting as the
President, a Vice President shall have all the powers and restrictions of the
Presidency. A Vice President shall perform such other duties as the President or
the Board may assign to him from time to time.
i) Secretary. The Secretary shall (a) keep the minutes of the meetings
of the Stockholders and of the Board in one or more books for that purpose, (b)
give all notices which these Bylaws or the law requires, (c) serve as custodian
of the records and seal of the Company, (d) affix the seal of the corporation to
all documents which the Board has authorized execution on behalf of the Company
under seal, (e) maintain a register of the address of each Stockholder of the
Company, (f) sign, with the President, a Vice President, or any other officer or
agent of the Company which the Board has authorized, certificates for shares of
the Company, (g) have charge of the stock transfer books of the Company, and (h)
perform all duties which the President or the Board may assign to him from time
to time.
j) Assistant Secretaries. In the absence of the Secretary or in the
event of his death, inability or refusal to act, the Assistant Secretaries in
the order of their length of service as Assistant Secretary, unless the Board
determines otherwise, shall perform the duties of the Secretary. When acting as
the Secretary, an Assistant Secretary shall have the powers and restrictions of
the Secretary. An Assistant Secretary shall perform such other duties as the
President, Secretary or Board may assign from time to time.
k) Treasurer. The Treasurer shall (a) have responsibility for all funds
and securities of the Company, (b) receive and give receipts for moneys due and
payable to the corporation from any source whatsoever, (c) deposit all moneys in
the name of the Company in depositories which the Board selects, and (d) perform
all of the duties which the President or the Board may assign to him from time
to time.
l) Assistant Treasurers. In the absence of the Treasurer or in the
event of his death, inability or refusal to act, the Assistant Treasurers in the
order of their length of service as Assistant Treasurer, unless the Board
determines otherwise, shall perform the duties of the Treasurer. When acting as
the Treasurer, an Assistant Treasurer shall have the powers and restrictions of
the Treasurer. An Assistant Treasurer shall perform such other duties as the
Treasurer, the President, or the Board may assign to him from time to time.
m) Delegation of Authority. Notwithstanding any provision of these
Bylaws to the contrary, the Board may delegate the powers or duties of any
officer to any other officer or agent.
n) Action with Respect to Securities of Other Corporations. Unless the
Board directs otherwise, the President shall have the power to vote and
otherwise act on behalf of the Company, in person or by proxy, at any meeting of
stockholders of or with respect to any action of stockholders of any other
corporation in which the Company holds securities. Furthermore, unless the Board
directs otherwise, the President shall exercise any and all rights and powers
which the Company possesses by reason of its ownership of securities in another
corporation.
o) Vacancies. The Board may fill any vacancy in any office because of
death, resignation, removal, disqualification or any other cause in the manner
which these Bylaws prescribe for the regular appointment to such office.
ARTICLE 8)
CONTRACTS, LOANS, DRAFTS,
DEPOSITS AND ACCOUNTS
a) Contracts. The Board may authorize any officer or officers, agent or
agents, to enter into any contract or execute and deliver any instrument in the
name and on behalf of the Company. The Board may make such authorization general
or special.
b) Loans. Unless the Board has authorized such action, no officer or
agent of the Company shall contract for a loan on behalf of the Company or issue
any evidence of indebtedness in the Company's name.
c) Drafts. The President, any Vice President, the Treasurer, any
Assistant Treasurer, and such other persons as the Board shall determine shall
issue all checks, drafts and other orders for the payment of money, notes and
other evidences of indebtedness issued in the name of or payable by the Company.
d) Deposits. The Treasurer shall deposit all funds of the Company not
otherwise employed in such banks, trust companies, or other depositories as the
Board may select or as any officer, assistant, agent or attorney of the Company
to whom the Board has delegated such power may select. For the purpose of
deposit and collection for the account of the Company, the President or the
Treasurer (or any other officer, assistant, agent or attorney of the Company
whom the Board has authorized) may endorse, assign and deliver checks, drafts
and other orders for the payment of money payable to the order of the Company.
e) General and Special Bank Accounts. The Board may authorize the
opening and keeping of general and special bank accounts with such banks, trust
companies, or other depositories as the Board may select or as any officer,
assistant, agent or attorney of the Company to whom the Board has delegated such
power may select. The Board may make such special rules and regulations with
respect to such bank accounts, not inconsistent with the provisions of these
Bylaws, as it may deem expedient.
ARTICLE 9)
CERTIFICATES FOR SHARES AND THEIR TRANSFER
a) Certificates for Shares. Every owner of stock of the Company shall
have the right to receive a certificate or certificates, certifying to the
number and class of shares of the stock of the Company which he owns. The Board
shall determine the form of the certificates for the shares of stock of the
Company. The Secretary, transfer agent, or registrar of the Company shall number
the certificates representing shares of the stock of the Company in the order in
which the Company issues them. The President or any Vice President and the
Secretary or any Assistant Secretary shall sign the certificates in the name of
the Company. Any or all certificates may contain facsimile signatures. In case
any officer, transfer agent, or registrar who has signed a certificate, or whose
facsimile signature appears on a certificate, ceases to serve as such officer,
transfer agent, or registrar before the Company issues the certificate, the
Company may issue the certificate with the same effect as though the person who
signed such certificate, or whose facsimile signature appears on the
certificate, was such officer, transfer agent, or registrar at the date of
issue. The Secretary, transfer agent, or registrar of the Company shall keep a
record in the stock transfer books of the Company of the names of the persons,
firms or corporations owning the stock represented by the certificates, the
number and class of shares represented by the certificates and the dates thereof
and, in the case of cancellation, the dates of cancellation. The Secretary,
transfer agent, or registrar of the Company shall cancel every certificate
surrendered to the Company for exchange or transfer. Except in the case of a
lost, destroyed, stolen or mutilated certificate, the Secretary, transfer agent,
or registrar of the Company shall not issue a new certificate in exchange for an
existing certificate until he has canceled the existing certificate.
b) Transfer of Shares. A holder of record of shares of the Company's
stock, or his attorney-in-fact authorized by power of attorney duly executed and
filed with the Secretary, transfer agent or registrar of the Company, may
transfer his shares only on the stock transfer books of the Company. Such person
shall furnish to the Secretary, transfer agent, or registrar of the Company
proper evidence of his authority to make the transfer and shall properly endorse
and surrender for cancellation his existing certificate or certificates for such
shares. Whenever a holder of record of shares of the Company's stock makes a
transfer of shares for collateral security, the Secretary, transfer agent, or
registrar of the Company shall state such fact in the entry of transfer if the
transferor and the transferee request.
c) Lost Certificates. The Board may direct the Secretary, transfer
agent, or registrar of the Company to issue a new certificate to any holder of
record of shares of the Company's stock claiming that he has lost such
certificate, or that someone has stolen, destroyed or mutilated such
certificate, upon the receipt of an affidavit from such holder to such fact.
When authorizing the issue of a new certificate, the Board, in its discretion
may require as a condition precedent to the issuance that the owner of such
certificate give the Company a bond of indemnity in such form and amount as the
Board may direct.
d) Regulations. The Board may make such rules and regulations, not
inconsistent with these Bylaws, as it deems expedient concerning the issue,
transfer and registration of certificates for shares of the stock of the
corporation. The Board may appoint or authorize any officer or officers to
appoint one or more transfer agents, or one or more registrars, and may require
all certificates for stock to bear the signature or signatures of any of them.
e) Holder of Record. The Company may treat as absolute owners of shares
the person in whose name the shares stand of record as if that person had full
competency, capacity and authority to exercise all rights of ownership, despite
any knowledge or notice to the contrary or any description indicating a
representative, pledge or other fiduciary relation, or any reference to any
other instrument or to the rights of any other person appearing upon its record
or upon the share certificate. However, the Company may treat any person
furnishing proof of his appointment as a fiduciary as if he were the holder of
record of the shares.
f) Treasury Shares. Treasury shares of the Company shall consist of
shares which the Company has issued and thereafter acquired but not canceled.
Treasury shares shall not carry voting or dividend rights.
ARTICLE 10)
INDEMNIFICATION
a) Definitions. In this Article:
i) "Indemnitee" means (i) any present or former Director,
advisory director or officer of the Company, (ii) any person who while
serving in any of the capacities referred to in clause (i) hereof
served at the Company's request as a director, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary
of another foreign or domestic corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, and (iii) any person
nominated or designated by (or pursuant to authority granted by) the
Board of Directors or any committee thereof to serve in any of the
capacities referred to in clauses (i) or (ii) hereof.
ii) "Official Capacity" means (i) when used with respect to a
Director, the office of Director of the Company, and (ii) when used
with respect to a person other than a Director, the elective or
appointive office of the Company held by such person or the employment
or agency relationship undertaken by such person on behalf of the
Company, but in each case does not include service for any other
foreign or domestic corporation or any partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise.
iii) "Proceeding" means any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative, any appeal in such an action, suit or
proceeding, and any inquiry or investigation that could lead to such an
action, suit or proceeding.
b) Indemnification. The Company shall indemnify every Indemnitee
against all judgments, penalties (including excise and similar taxes), fines,
amounts paid in settlement and reasonable expenses actually incurred by the
Indemnitee in connection with any Proceeding in which he was, is or is
threatened to be named defendant or respondent, or in which he was or is a
witness without being named a defendant or respondent, by reason, in whole or in
part, of his serving or having served, or having been nominated or designated to
serve, in any of the capacities referred to in Section 10.1, if it is determined
in accordance with Section 10.4 that the Indemnitee (a) conducted himself in
good faith, (b) reasonably believed, in the case of conduct in his Official
Capacity, that his conduct was in the Company's best interests and, in all other
cases, that his conduct was at least not opposed to the Company's best
interests, and (c) in the case of any criminal proceeding, had no reasonable
cause to believe that his conduct was unlawful; provided, however, that in the
event that an Indemnitee is found liable to the Company or is found liable on
the basis that personal benefit was improperly received by the Indemnitee the
indemnification (i) is limited to reasonable expenses actually incurred by the
Indemnitee in connection with the Proceeding and (ii) shall not be made in
respect of any Proceeding in which the Indemnitee shall have been found liable
for willful or intentional misconduct in the performance of his duty to the
Company. Except as provided in the immediately preceding proviso to the first
sentence of this Section 10.2, no indemnification shall be made under this
Section 10.2 in respect of any Proceeding in which such Indemnitee shall have
been (x) found liable on the basis that personal benefit was improperly received
by him, whether or not the benefit resulted from an action taken in the
Indemnitee's Official Capacity, or (y) found liable to the Company. The
termination of any Proceeding by judgment, order, settlement or conviction, or
on a plea of nolo contendere or its equivalent, is not of itself determinative
that the Indemnitee did not meet the requirements set forth in clauses (a), (b)
or (c) in the first sentence of this Section 10.2. An Indemnitee shall be deemed
to have been found liable in respect of any claim, issue or matter only after
the Indemnitee shall have been so adjudged by a court of competent jurisdiction
after exhaustion of all appeals therefrom. Reasonable expenses shall, include,
without limitation, all court costs and all fees and disbursements of attorneys
for the Indemnitee. The indemnification provided herein shall be applicable
whether or not negligence or gross negligence of the Indemnitee is alleged or
proven.
c) Successful Defense. Without limitation of Section 10.2 and in
addition to the indemnification provided for in Section 10.2, the Company shall
indemnify every Indemnitee against reasonable expenses incurred by such person
in connection with any Proceeding in which he is a witness or a named defendant
or respondent because he served in any of the capacities referred to in Section
10.1, if such person has been wholly successful, on the merits or otherwise, in
defense of the Proceeding.
d) Determinations. Any indemnification under Section 10.2 (unless ordered by a court of competent jurisdiction) shall be made by the Company only upon a determination that indemnification of the Indemnitee is proper in the circumstances because he has met the applicable standard of conduct. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of Directors who, at the time of such vote, are not named defendants or respondents in the Proceeding; (b) if such a quorum cannot be obtained, then by a majority vote of a committee of the Board of Directors, duly designated to act in the matter by a majority vote of all Directors (in which designated Directors who are named defendants or respondents in the Proceeding may participate), such committee to consist solely of two (2) or more Directors who, at the time of the committee vote, are not named defendants or respondents in the Proceeding; (c) by special legal counsel selected by the Board of Directors or a committee thereof by vote as set forth in clauses (a) or (b) of this Section 10.4 or, if the requisite quorum of all of the Directors cannot be obtained therefore and such committee cannot be established, by a majority vote of all of the Directors (in which Directors who are named defendants or respondents in the Proceeding may participate); or (d) by the shareholders in a vote that excludes the shares held by Directors that are named defendants or respondents in the Proceeding. Determination as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination that indemnification is permissible is made by special legal counsel, determination as to reasonableness of expenses must be made in the manner specified in clause (c) of the preceding sentence for the selection of special legal counsel. In the event a determination is made under this Section 10.4 that the Indemnitee has met the applicable standard of conduct as to some matters but not as to others, amounts to be indemnified may be reasonably prorated.
e) Advancement of Expenses. Reasonable expenses (including court costs
and attorneys' fees) incurred by an Indemnitee who was or is a witness or was,
is or is threatened to be made a named defendant or respondent in a Proceeding
shall be paid by the Company at reasonable intervals in advance of the final
disposition of such Proceeding, and without making any of the determinations
specified in Section 10.4, after receipt by the Company of (a) a written
affirmation by such Indemnitee of his good faith belief that he has met the
standard of conduct necessary for indemnification by the Company under this
Article and (b) a written undertaking by or on behalf of such Indemnitee to
repay the amount paid or reimbursed by the Company if it shall ultimately be
determined that he is not entitled to be indemnified by the Company as
authorized in this Article. Such written undertaking shall be an unlimited
obligation of the Indemnitee but need not be secured and it may be accepted
without reference to financial ability to make repayment. Notwithstanding any
other provision of this Article, the Company may pay or reimburse expenses
incurred by an Indemnitee in connection with his appearance as a witness or
other participation in a Proceeding at a time when he is not named a defendant
or respondent in the Proceeding.
f) Employee Benefit Plans. For purposes of this Article, the Company
shall be deemed to have requested an Indemnitee to serve an employee benefit
plan whenever the performance by him of his duties to the Company also imposes
duties on or otherwise involves services by him to the plan or participants or
beneficiaries of the plan. Excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall be deemed fines.
Action taken or omitted by an Indemnitee with respect to an employee benefit
plan in the performance of his duties for a purpose reasonably believed by him
to be in the interest of the participants and beneficiaries of the plan shall be
deemed to be for a purpose which is not opposed to the best interests of the
Company.
g) Other Indemnification and Insurance. The indemnification provided by
this Article shall (a) not be deemed exclusive of, or to preclude, any other
rights to which those seeking indemnification may at any time be entitled under
the Company's Articles of Incorporation, any law, agreement or vote of
shareholders or disinterested Directors, or otherwise, or under any policy or
policies of insurance purchased and maintained by the Company on behalf of any
Indemnitee, both as to action in his Official Capacity and as to action in any
other capacity, (b) continue as to a person who has ceased to be in the capacity
by reason of which he was an Indemnitee with respect to matters arising during
the period he was in such capacity, (c) inure to the benefit of the heirs,
executors and administrators of such a person and (d) not be required if and to
the extent that the person otherwise entitled to payment of such amounts
hereunder has actually received payment therefore under any insurance policy,
contract or otherwise.
h) Notice. Any indemnification of or advance of expenses to an
Indemnitee in accordance with this Article shall be reported in writing to the
shareholders of the Company with or before the notice or waiver of notice of the
next shareholders' meeting or with or before the next submission to shareholders
of a consent to action without a meeting and, in any case, within the 12-month
period immediately following the date of the indemnification or advance.
i) Construction. The indemnification provided by this Article shall be
subject to all valid and applicable laws, including, without limitation, the
Colorado General Corporation Law, and, in the event this Article or any of the
provisions hereof or the indemnification contemplated hereby are found to be
inconsistent with or contrary to any such valid laws, the latter shall be deemed
to control and this Article shall be regarded as modified accordingly, and, as
so modified, to continue in full force and effect.
j) Continuing Offer, Reliance, etc. The provisions of this Article (a)
are for the benefit of, and may be enforced by, each Indemnitee of the Company,
the same as if set forth in their entirety in a written instrument duly executed
and delivered by the Company and such Indemnitee and (b) constitute a continuing
offer to all present and future Indemnitees. The Company, by its adoption of
these Bylaws, (x) acknowledges and agrees that each Indemnitee of the Company
has relied upon and will continue to rely upon the provisions of this Article in
becoming, and serving in any of the capacities referred to in Section 10.1(a) of
this Article, (y) waives reliance upon, and all notices of acceptance of, such
provisions by such Indemnitees and (z) acknowledges and agrees that no present
or future Indemnitee shall be prejudiced in his right to enforce the provisions
of this Article in accordance with their terms by any act or failure to act on
the part of the Company.
k) Effect of Amendment. No amendment, modification or repeal of this
Article or any provision hereof shall in any manner terminate, reduce or impair
the right of any past, present or future Indemnitees to be indemnified by the
Company, nor the obligation of the Company to indemnify any such Indemnitees,
under and in accordance with the provisions of the Article as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
ARTICLE 11)
TAKEOVER OFFERS
In the event the Company receives a takeover offer, the Board of
Directors shall consider all relevant factors in evaluating such offer,
including, but not limited to, the terms of the offer, and the potential
economic and social impact of such offer on the Company's stockholders,
employees, customers, creditors and community in which it operates.
ARTICLE 12)
NOTICES
a) General. Whenever these Bylaws require notice to any Stockholder,
director, officer or agent, such notice does not mean personal notice. A person
may give effective notice under these Bylaws in every case by depositing a
writing in a post office or letter box in a postpaid, sealed wrapper, or by
dispatching a prepaid telegram addressed to such Stockholder, director, officer
or agent at his address on the books of the Company. Unless these Bylaws
expressly provide to the contrary, the time when the person sends notice shall
constitute the time of the giving of notice.
b) Waiver of Notice. Whenever the law or these Bylaws require notice,
the person entitled to said notice may waive such notice in writing, either
before or after the time stated therein.
ARTICLE 13)
MISCELLANEOUS
a) Facsimile Signatures. In addition to the use of facsimile signatures
which these Bylaws specifically authorize, the Company may use such facsimile
signatures of any officer or officers, agents or agent, of the Company as the
Board or a committee of the Board may authorize.
b) Corporate Seal. The Board may provide for a suitable seal containing
the name of the Company, of which the Secretary shall be in charge. The
Treasurer, any Assistant Secretary, or any Assistant Treasurer may keep and use
the seal or duplicates of the seal if and when the Board or a committee of the
Board so directs.
c) Fiscal Year. The Board shall have the authority to fix and change
the fiscal year of the Company.
ARTICLE 14)
AMENDMENTS
Subject to the provisions of the Articles of Incorporation, the Stockholders or the Board may amend or repeal these Bylaws at any meeting.
INTEGRATED MANAGEMENT INFORMATION, INC.
2005 NON-QUALIFIED STOCK OPTION PLAN
This 2005 Non-Qualified Stock Option Plan correctly sets forth the provisions of the 2005 Non-Qualified Stock Option Plan.
ARTICLE I
ESTABLISHMENT AND PURPOSE
I.1 Establishment. INTEGRATED MANAGEMENT INFORMATION, INC., a Missouri corporation ("Company"), hereby establishes a Non-Qualified stock option plan for employees, independent contractors and consultants providing material services other than those independent contractors and consultants involved in capital-raising activities including fundraising public relations, to the Company and its present and future subsidiaries which shall be known as the "2005 NON-QUALIFIED STOCK OPTION PLAN" (the "Plan"). None of the options issued to employees pursuant to the Plan may constitute incentive stock options within the meaning of Section 422 of the Internal Revenue Code. Options issued pursuant to the Plan shall constitute non-qualified options.
I.2 Purpose. The purpose of this Plan is to enhance shareholder investment by attracting, retaining and motivating key employees, independent contractors and consultants of the Company, and to encourage stock ownership by such persons by providing them with a means to acquire a proprietary interest in the Company's success.
ARTICLE II
DEFINITIONS
II.1 Definitions. Whenever used herein, the following terms shall have the respective meanings set forth below, unless the context clearly requires otherwise, and when said meaning is intended, the term shall be capitalized.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code, as amended.
(c) "Committee" shall mean the Committee provided by Article IV hereof, which may be created at the discretion of the Board.
(d) "Company" means INTEGRATED MANAGEMENT INFORMATION, INC., a Missouri corporation.
(e) "Consultant" means any person or entity, including a Parent Corporation or a Subsidiary Corporation, who provides services (other than as an Employee) to the Company, a Parent Corporation or a Subsidiary Corporation, and shall include independent contractors, Non-Employee Officers and Non-Employee Directors, as defined subsequently.
(f) "Date of Exercise" means the date the Company receives notice, by an Optionee, of the exercise of an Option pursuant to Section VIII.1 of this Plan. Such notice shall indicate the number of shares of Stock the Optionee intends to exercise.
(g) "Employee" means any person, including an officer or director of the Company or a Subsidiary Corporation, who is employed by the Company or a Subsidiary Corporation.
(h) "Fair Market Value" means the fair market value of Stock upon which an option is granted under this Plan, determined as follows:
(i) If the Stock is listed or traded on the OTC Bulletin Board, the NASDAQ Stock Market or a national securities exchange, the Fair Market Value shall be the average of the last reported sale prices of the Stock on the date of grant of this option, provided that if no sale is made on any such trading day, the last reported sale price shall be the average of the closing bid and asked prices for such day; or
Otherwise, Fair Market Value shall be an amount, not less than book value, determined by the Board, such determination to be final and binding on the Holder.
(i) "Non-Employee Director" means a member of the Board who is not an employee of the Company at the time an Option is granted hereunder.
(j) "Non-Employee Officer" means an officer of the Company who is not an employee of the Company at the time an Option is granted hereunder.
(k) "Non-qualified Option" means an Option granted under this Plan which is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Code. Non-qualified Options may be granted at such times and subject to such restrictions as the Board shall determine without conforming to the statutory rules of Section 422 of the Code applicable to incentive stock options.
(l) "Option" means the right, granted under this Plan, to purchase Stock of the Company at the option price for a specified period of time. For purposes of this Plan, an Option may be a Non-qualified Option.
(m) "Optionee" means an Employee or Consultant holding an Option under the Plan.
(n) "Parent Corporation" shall have the meaning set forth in Section 424(e) of the Code with the Company being treated as the employer corporation for purposes of this definition.
(o) "Subsidiary Corporation" shall have the meaning set forth in Section 424(f) of the Code with the Company being treated as the employer corporation for purposes of this definition.
(p) "Significant Shareholder" means an individual who, within the meaning of
Section 422(b)(6) of the Code, owns stock possessing more than ten percent of
the total combined voting power of all classes of stock of the Company or of any
Parent Corporation or Subsidiary Corporation of the Company. In determining
whether an individual is a Significant Shareholder, an individual shall be
treated as owning stock owned by certain relatives of the individual and certain
stock owned by corporations in which the individual is a shareholder,
partnerships in which the individual is a partner, and estates or trusts of
which the individual is a beneficiary, all as provided in Section 424(d) of the
Code.
II.2 Gender and Number. Except when otherwise indicated by the context, any masculine terminology when used in this Plan also shall include the feminine gender, and the definition of any term herein in the singular also shall include the plural.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
III.1 Eligibility and Participation. All Employees are eligible to participate in this Plan and receive Non-qualified Options under the Plan. All Consultants are eligible to participate in this Plan and receive Non-qualified Options hereunder. Optionees in the Plan shall be selected by the Board, in its sole discretion, from among those Employees and Consultants who, in the opinion of the Board, are in a position to contribute materially to the Company's continued growth and development and to its long-term financial success.
ARTICLE IV
ADMINISTRATION
IV.1 Administration. The Board shall be responsible for administering the Plan.
(a) The Board is authorized to interpret the Plan; to prescribe, amend, and rescind rules and regulations relating to the Plan; to provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company; and to make all other determinations necessary or advisable for the administration of the Plan. Determinations, interpretations, or other actions made or taken by the Board, pursuant to the provisions of this Plan, shall be final and binding and conclusive for all purposes and upon all persons.
(b) At the discretion of the Board, this Plan may be administered by a Committee which shall be an executive committee of the Board, consisting of not less than two members of the Board. The members of such Committee may be directors who are eligible to receive Options under this Plan, but Options may be granted to such persons only by action of the full Board and not by action of the Committee. At such time as the Company has any class of equity security which is registered pursuant to Section 12 of the Securities Exchange Act of 1934, the Committee shall consist solely of two or more Non-Employee Directors as that term is defined in Rule 16b-3 under that Act. Such Committee shall have full power and authority, subject to the limitations of the Plan and any limitations imposed by the Board, to construe, interpret and administer this Plan and to make determinations which shall be final, conclusive and binding upon all persons, including, without limitation, the Company, the shareholders, the directors and any persons having any interests in any Options which may be granted under this Plan, and, by resolution or resolution providing for the creation and issuance of any such Option, to fix the terms upon which, the time or times at or within which, the price or prices at which any such shares may be purchased from the Company upon the exercise of such Option. Such terms, time or times and price or prices shall, in every case, be set forth or incorporated by reference in the instrument or instruments evidencing such Option, and shall be consistent with the provisions of this Plan.
(c) If the Committee has been appointed, the Board may from time to time remove members from, or add members to, the Committee. The Board may terminate the Committee at any time. Vacancies on the Committee, howsoever caused, shall be filled by the Board. The Committee shall select one of its members as Chairman, and shall hold meetings at such times and places as the Chairman may determine. A majority of the Committee at which a quorum is present, or acts reduced to or approved in writing by all of the members of the Committee, shall be the valid acts of the Committee. A quorum shall consist of two-thirds (2/3) of the members of the Committee.
(d) Where the Committee has been created by the Board, references in this Plan to actions to be taken by the Board shall be deemed to refer to the Committee as well, except where limited by this Plan or by the Board.
(e) The Board shall have all of the enumerated powers of the Committee, but shall not be limited to such powers. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted under it.
ARTICLE V
STOCK SUBJECT TO THE PLAN
V.1 Number. The total number of shares of Stock hereby made available and reserved for issuance under the Plan upon exercise of Non-Qualified Options shall be 1,200,000. The aggregate number of shares of Stock available under this Plan shall be subject to adjustment as provided in Section V.3. The total number of shares of Stock may be authorized but unissued shares of Stock, or Shares acquired by purchase as directed by the Board from time to time in its discretion, to be used for issuance upon exercise of Options granted hereunder.
V.2 Unused Stock. If an Option shall expire or terminate for any reason without having been exercised in full, the unpurchased shares of Stock subject thereto shall (unless the Plan shall have terminated) become available for other Options under the Plan.
V.3 Adjustment in Capitalization. In the event of any change in the outstanding shares of Stock by reason of a stock dividend or split, recapitalization, reclassification, or other similar corporate change, the aggregate number of shares of Stock set forth in Section V.1 shall be appropriately adjusted provided however, that fractional shares shall be rounded to the nearest whole share. In any such case, the number and kind of shares that are subject to any Option (including any Option outstanding after termination of employment) and the Option price per share shall be proportionately and appropriately adjusted without any change in the aggregate Option price to be paid therefore upon exercise of the Option.
ARTICLE VI
DURATION OF THE PLAN
VI.1 Duration of the Plan. Subject to approval of shareholders, the Plan shall be in effect for ten years from the date of its adoption by the Board. Any Options outstanding at the end of said period shall remain in effect in accordance with their terms. The Plan shall terminate before the end of said period if all Stock subject to it has been purchased pursuant to the exercise of Options granted under the Plan.
ARTICLE VII
TERMS OF STOCK OPTIONS
VII.1 Grant of Options. Subject to Section V.1, Options may be granted to Employees or Consultants at any time and from time to time as determined by the Board. The Board shall have complete discretion in determining the terms and conditions and number of Options granted to each Optionee. In making such determinations, the Board may take into account the nature of services rendered by such Employees or Consultants, their present and potential contributions to the Company and its Subsidiary Corporations, and such other factors as the Board in its discretion shall deem relevant.
(a) The Board is expressly given the authority to issue amended or replacement Options with respect to shares of Stock subject to an Option previously granted hereunder. An amended Option amends the terms of an Option previously granted and thereby supersedes the previous Option. A replacement Option is similar to a new Option granted hereunder except that it provides that it shall be forfeited to the extent that a previously granted Option is exercised, or except that its issuance is conditioned upon the termination of a previously granted Option.
VII.2 Option Agreement; Terms and Conditions to Apply Unless Otherwise
Specified. As determined by the Board on the date of grant, each Option shall be
evidenced by an Option agreement (the "Option Agreement") that includes the
non-transferability provisions required by Section X.2 hereof and specifies:
whether the Option is a Non-qualified Option; the Option price; the duration of
the Option; the number of shares of Stock to which the Option applies; any
vesting or exercisability restrictions which the Board may impose. All such
terms and conditions shall be determined by the Board at the time of grant of
the Option.
(a) If not otherwise specified by the Board, the following terms and conditions shall apply to Options granted under the Plan:
(i) Term. The duration of the Option shall be five years from the date of grant.
(ii) Exercise of Option. Unless an Option is terminated as provided hereunder, an Optionee may exercise his Option for up to, but not in excess of, the amounts of shares subject to the Option specified hereafter, based on the Optionee's number of years of continuous service with the Company or a Subsidiary Corporation from the date on which the Option is granted. In the case of an Optionee who is an Employee, continuous service shall mean continuous employment; in the case of an Optionee who is a Consultant, continuous service shall mean the continuous provision of consulting services. In applying said limitations, the amount of shares, if any, previously purchased by the Optionee under the Option shall be counted in determining the amount of shares the Optionee can purchase at any time. The Optionee may exercise his Option in the following amounts:
(A) After one year of such continuous services, up to but not in excess of twenty percent of the shares originally subject to the Option;
(B) After two years of such continuous services, up to but not in excess of forty percent of the shares originally subject to the Option;
(C) After three years of such continuous services, up to but not in excess of sixty percent of the shares originally subject to the Option;
(D) After four years of such continuous services, up to but not in excess of eighty percent of the shares originally subject to the Option; and
(E) At the expiration of the fifth year of such continuous services, the Option may be exercised, in whole or in part, and at any time and from time to time within its term but it shall not be exercisable after the expiration of six years from the date on which it was granted (five years with respect to Significant Shareholders).
(b) The Board shall be free to specify terms and conditions other than those set forth above, in its discretion.
VII.3 Option Price. The Option Price shall be determined by the Board of Directors, except that Option Price for consultants and/or independent contractors may not be less than Fair Market Value on the date of grant. The Option exercise price shall be subject to adjustment as provided in Section V.3 above.
VII.4 Term of Options. Each Option shall expire at such time as the Board shall determine when it is granted, provided however that under no circumstances shall a Non-qualified Option be exercisable later than the tenth anniversary date of its grant.
VII.5 Exercise of Options. Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Board shall in each instance approve, which need not be the same for all Optionees.
VII.6 Payment. Payment for all shares of Stock shall be made at the time
that an Option, or any part thereof, is exercised, and no shares shall be issued
until full payment therefor has been made. Payment shall be made (i) in cash, or
(ii) if acceptable to the Board, in Stock or in some other form.
ARTICLE VIII
WRITTEN NOTICE, ISSUANCE OF STOCK
CERTIFICATES, SHAREHOLDER PRIVILEGES
VIII.1Written Notice. An Optionee wishing to exercise an Option shall give written notice to the Company, in the form and manner prescribed by the Board. Full payment for the shares exercised pursuant to the Option must accompany the written notice.
VIII.2Issuance of Stock Certificates. As soon as practicable after the receipt of written notice and payment, the Company shall deliver to the Optioned or to a permitted nominee of the Optionee a certificate or certificates for the requisite number of shares of Stock.
VIII.3Privileges of a Shareholder. An Optionee or any other person entitled to exercise an Option under this Plan shall not have stockholder privileges with respect to any Stock covered by the Option until the date of issuance of a stock certificate for such stock.
ARTICLE IX
TERMINATION OF EMPLOYMENT OR SERVICES
IX.1 Death. If an Optionee's employment in the case of an Employee, or provision of services as a Consultant in the case of a Consultant, terminates by reason of death, the Option may thereafter be exercised at any time prior to the expiration date of the Option or within 12 months after the date of such death, whichever period is the shorter, by the person or persons entitled to do so under the Optionee's will or, if the Optionee shall fail to make a testamentary disposition of an Option or shall die intestate, the Optionee's legal representative or representatives. The Option shall be exercisable only to the extent that such Option was exercisable as of the date of death.
IX.2 Termination other than for Cause or Due to Death. In the event of an Optionee's termination of employment in the case of an Employee, or termination of the provision of services as a Consultant in the case of a Consultant, other than by reason of death, the Optionee may exercise such portion of his Option as was exercisable by him at the date of such termination (the "Termination Date") at any time within three months of the Termination Date; provided, however, that where the Optionee is an Employee, and is terminated due to disability within the meaning of Code ss. 422, he may exercise such portion of his Option as was exercisable by him on his Termination Date within one year of his Termination Date. In any event, the Option cannot be exercised after the expiration of the term of the Option. Options not exercised within the applicable period specified above shall terminate.
(a) In the case of an Employee, a change of duties or position within the Company or an assignment of employment in a Subsidiary Corporation or Parent Corporation of the Company, if any, or from such a Corporation to the Company, shall not be considered a termination of employment for purposes of this Plan.
(b) The Option Agreements may contain such provisions as the Board shall approve with reference to the effect of approved leaves of absence upon termination of employment.
IX.3 Termination for Cause. In the event of an Optionee's termination of employment in the case of an Employee, or termination of the provision of services as a Consultant in the case of a Consultant, which termination is by the Company or a Subsidiary Corporation for cause, any Option or Options held by him under the Plan, to the extent not exercised before such termination, shall terminate upon notice of termination for cause.
ARTICLE X
RIGHTS OF OPTIONEES
X.1 Service. Nothing in this Plan shall interfere with or limit in any way the right of the Company or a Subsidiary Corporation to terminate any Employee's employment, or any Consultant's services, at any time, nor confer upon any Employee any right to continue in the employ of the Company or a Subsidiary Corporation, or upon any Consultant any right to continue to provide services to the Company or a Subsidiary Corporation.
X.2 Non-transferability. All Options granted under this Plan shall be nontransferable by the Optionee, other than by will or the laws of descent and distribution, and shall be exercisable during the Optionee's lifetime only by the Optionee.
ARTICLE XI
OPTIONEE-EMPLOYEE'S TRANSFER
OR LEAVE OF ABSENCE
XI.1 Optionee-Employee's Transfer or Leave of Absence. For purposes of this Plan:
(a) A transfer of an Optionee who is an Employee from the Company to a Subsidiary Corporation or Parent Corporation, or from one such Corporation to another, or
(b) A leave of absence for such an Optionee which is duly authorized in writing by the Company or a Subsidiary Corporation shall not be deemed a termination of employment. However, under no circumstances may an Optioned exercise an Option during any leave of absence, unless authorized by the Board.
ARTICLE XII
AMENDMENT, MODIFICATION, AND
TERMINATION OF THE PLAN
XII.1 Amendment, Modification, and Termination of the Plan.
(a) The Board may at any time terminate, and from time to time may amend or modify the Plan, provided, however, that no such action of the Board, without approval of the shareholders, may:
(i) increase the total amount of Stock which may be purchased through Options granted under the Plan, except as provided in Article V;
(ii) change the class of Employees or Consultants eligible to receive Options;
(b) No amendment, modification, or termination of the Plan shall in any manner adversely affect any outstanding Option under the Plan without the consent of the Optionee holding the Option.
ARTICLE XIII ACQUISITION,
MERGER OR LIQUIDATION
XIII.1Acquisition.
(a) In the event that an Acquisition occurs with respect to the Company, the Company shall have the option, but not the obligation, to cancel Options outstanding as of the effective date of Acquisition, whether or not such Options are then exercisable, in return for payment to the Optionees of an amount equal to a reasonable estimate of an amount (hereinafter the "Spread") equal to the difference between the net amount per share payable in the Acquisition or as a result of the Acquisition, less the exercise price of the Option. In estimating the Spread, appropriate adjustments to give effect to the existence of the Options shall be made, such as deeming the Options to have been exercised, with the Company receiving the exercise price payable thereunder, and treating the shares receivable upon exercise of the Options as being outstanding in determining the net amount per share.
(b) For purposes of this section, an "Acquisition" shall mean any transaction in which substantially all of the Company's assets are acquired or in which a controlling amount of the Company's outstanding shares are acquired, in each case by a single person or entity or an affiliated group of persons and entities. For purposes of this section, a controlling amount shall mean more than 50% of the issued and outstanding shares of stock of the Company. The Company shall have such an option regardless of how the Acquisition is effectuated, whether by direct purchase, through a merger or similar corporate transaction, or otherwise. In cases where the acquisition consists of the acquisition of assets of the Company, the net amount per share shall be calculated on the basis of the net amount receivable with respect to shares upon a distribution and liquidation by the Company after giving effect to expenses and charges, including but not limited to taxes, payable by the Company before the liquidation can be completed.
(c) Where the Company does not exercise its option under this Section XIII.1 the remaining provisions of this Article XIII shall apply, to the extent applicable.
XIII.2Merger or Consolidation. Subject to any required action by the shareholders, if the Company shall be the surviving corporation in any merger or consolidation, any Option granted hereunder shall pertain to and apply to the securities to which a holder of the number of shares of Stock subject to the Option would have been entitled in such merger or consolidation.
XIII.3Other Transactions. A dissolution or a liquidation of the Company or a merger and consolidation in which the Company is not the surviving corporation shall cause every Option outstanding hereunder to terminate as of the effective date of such dissolution, liquidation, merger or consolidation. However, the Optionee either (i) shall be offered a firm commitment whereby the resulting or surviving corporation in a merger or consolidation will tender to the Optionee an option (the "Substitute Option") to purchase its shares on terms and conditions both as to number of shares and otherwise, which will substantially preserve to the Optionee the rights and benefits of the Option outstanding hereunder granted by the Company, or (ii) shall have the right immediately prior to such dissolution, liquidation, merger, or consolidation to exercise any unexercised Options whether or not then exercisable, subject to the provisions of this Plan. The Board shall have absolute and uncontrolled discretion to determine whether the Optionee has been offered a firm commitment and whether the tendered Substitute Option will substantially preserve to the Optionee the rights and benefits of the Option outstanding hereunder. In any event, any Substitute Option for an Incentive Stock Option shall comply with the requirements of Code Section 424(a).
ARTICLE XIV
SECURITIES REGISTRATION
XIV.1 Securities Registration. In the event that the Company shall deem it necessary or desirable to register under the Securities Act of 1933, as amended, or any other applicable statute, any Options or any Stock with respect to which an Option may be or shall have been granted or exercised, or to qualify any such Options or Stock under the Securities Act of 1933, as amended, or any other statute, then the Optionee shall cooperate with the Company and take such action as is necessary to permit registration or qualification of such Options or Stock.
XIV.2 Representations. Unless the Company has determined that the following
representation is unnecessary, each person exercising an Option under the Plan
may be required by the Company, as a condition to the issuance of the shares
pursuant to exercise of the Option, to make a representation in writing (i) that
he is acquiring such shares for his own account for investment and not with a
view to, or for sale in connection with, the distribution of any part thereof,
(ii) that before any transfer in connection with the resale of such shares, he
will obtain the written opinion of counsel for the Company, or other counsel
acceptable to the Company, that such shares may be transferred. The Company may
also require that the certificates representing such shares contain legends
reflecting the foregoing.
ARTICLE XV
TAX WITHHOLDING
XV.1 Tax Withholding. Whenever shares of Stock are to be issued in satisfaction of Options exercised under this Plan, the Company shall have the power to require the recipient of the Stock to remit to the Company an amount sufficient to satisfy federal, state, and local withholding tax requirements.
ARTICLE XVI
INDEMNIFICATION
XVI.1 Indemnification. To the extent permitted by law, each person who is or shall have been a member of the Board shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him in connection with or resulting from any claim, action, suit, or proceeding to which he may be a party or in which he may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him in settlement thereof, with the Company's approval, or paid by him in satisfaction of judgment in any such action, suit, or proceeding against him, provided he shall give the Company an opportunity, at its own expense, to handle and defend the same before he undertakes to handle and defend it on his own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's articles of incorporation or bylaws, as a matter of law, or otherwise, or any power that the Company or any Subsidiary Corporation may have to indemnify them or hold them harmless.
ARTICLE XVII
REQUIREMENTS OF LAW
XVII.1Requirements of Law. The granting of Options and the issuance of shares of Stock upon the exercise of an Option shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
XVII.2Governing Law. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Missouri.
ARTICLE XVIII
EFFECTIVE DATE OF PLAN
ARTICLE XIX
NO OBLIGATION TO EXERCISE OPTION
XIX.1 No Obligation to Exercise. The granting of an Option shall impose no obligation upon the holder thereof to exercise such Option.
ARTICLE XX
STOCKHOLDER APPROVAL
XX.1Stockholder Approval. This Plan shall be submitted for approval and ratification by a vote of the holders of a majority of the shares of Common Stock of the Company no later than June 30, 2005 and shall not affect the validity of any Option issued under this Plan.
THIS 2005 NON-QUALIFIED STOCK OPTION PLAN was adopted by the Board of Directors of INTEGRATED MANAGEMENT INFORMATION, INC. on March 1, 2005 to be effective on that date.
INTEGRATED MANAGEMENT INFORMATION, INC.
By:
John Saunders, President and
Chief Executive Officer
INTEGRATED MANAGEMENT INFORMATION, INC.
EQUITY INCENTIVE PLAN
1. PURPOSE.
The purpose of this Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company, and its Parent and Subsidiaries (if any), by offering them an opportunity to participate in the Company's future performance through awards of Options, the right to purchase Common Stock and Stock Bonuses. Capitalized terms not defined in the text are defined in Section 2.
2. DEFINITIONS.
As used in this Plan, the following terms will have the following meanings:
"AWARD" means any award under this Plan, including any Option, Stock Award or Stock Bonus.
"AWARD AGREEMENT" means, with respect to each Award, the signed written agreement between the Company and the Participant setting forth the terms and conditions of the Award.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means any cause, as defined by applicable law, for the termination of a Participant's employment with the Company or a Parent or Subsidiary of the Company.
"COMMITTEE" means the Board of Directors or any committee made up of members of the Board of Directors.
"COMPANY" means INTEGRATED MANAGEMENT INFORMATION, INC. or any
successor corporation.
"DISABILITY" means a disability, whether temporary or permanent, partial or total, as determined by the Committee.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" means the price at which a holder of an Option may purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share of the Company's Common Stock determined as follows:
(a) if such Common Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Common Stock is listed or admitted to trading;
(b) if such Common Stock is quoted on the NASDAQ National Market or the NASDAQ SmallCap Market, its closing price on the NASDAQ National Market or the NASDAQ SmallCap Market on the date of determination;
(c) if such Common Stock is publicly traded but is not listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination; or
(d) if none of the foregoing is applicable, by the Committee in good faith.
"INSIDER" means an officer or director of the Company or any other person whose transactions in the Company's Common Stock are subject to Section 16 of the Exchange Act.
"OPTION" means an award of an option to purchase Shares pursuant to
Section 6.
"PARENT" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of such corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
"PARTICIPANT" means a person who receives an Award under this Plan.
"PERFORMANCE FACTORS" means the factors selected by the Committee, in its sole and absolute discretion, from among the following measures to determine whether the performance goals applicable to Awards have been satisfied:
(a) Net revenue and/or net revenue growth;
(b) Earnings before income taxes and amortization and/or earnings before income taxes and amortization growth;
(c) Operating income and/or operating income growth;
(d) Net income and/or net income growth;
(e) Earnings per share and/or earnings per share growth;
(f) Total stockholder return and/or total stockholder return growth;
(g) Return on equity;
(h) Operating cash flow return on income;
(i) Adjusted operating cash flow return on income;
(j) Economic value added; and
(k) Individual business objectives.
"PERFORMANCE PERIOD" means the period of service determined by the Committee, not to exceed five years, during which years of service or performance is to be measured for Stock Awards or Stock Bonuses, if such Awards are restricted.
"PLAN" means this INTEGRATED MANAGEMENT INFORMATION, INC. Equity
Incentive Plan, as amended from time to time.
"PURCHASE PRICE" means the price at which the recipient of a Stock Award may purchase the Shares.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means shares of the Company's Common Stock reserved for issuance under this Plan, as adjusted pursuant to Sections 3 and 18, and any successor security.
"STOCK AWARD" means an award of Shares pursuant to Section 7.
"STOCK BONUS" means an award of Shares, or cash in lieu of Shares, pursuant to Section 8.
"SUBSIDIARY" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
"TERMINATION" or "TERMINATED" means, for purposes of this Plan with respect to a Participant, that the Participant has for any reason ceased to provide services as an employee, officer or director to the Company or a Parent or Subsidiary of the Company. An employee will not be deemed to have ceased to provide services in the case of (i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Company, provided that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute or unless provided otherwise pursuant to a formal policy adopted from time to time by the Company and issued and promulgated to employees in writing. In the case of any employee on an approved leave of absence, the Committee may make such provisions respecting suspension of vesting of the Award while on leave from the employ of the Company or a Subsidiary as it may deem appropriate, except that in no event may an Option be exercised after the expiration of the term set forth in the Option agreement. The Committee will have sole discretion to determine whether a Participant has ceased to provide services and the effective date on which the Participant ceased to provide services (the "Termination Date").
3. SHARES SUBJECT TO THE PLAN.
3.1 Number of Shares Available. Subject to Sections 3.2 and 18, the total aggregate number of Shares reserved and available for grant and issuance pursuant to this Plan shall be _______________ Shares and will include Shares that are subject to: (a) issuance upon exercise of an Option but cease to be subject to such Option for any reason other than exercise of such Option; (b) an Award granted hereunder but forfeited or repurchased by the Company at the original issue price; and (c) an Award that otherwise terminates without Shares being issued. At all times the Company shall reserve and keep available a sufficient number of Shares as shall be required to satisfy the requirements of all outstanding Options granted under this Plan and all other outstanding but unvested Awards granted under this Plan.
3.2 Adjustment of Shares. In the event that the number of outstanding shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of the Company without consideration, then (a) the number of Shares reserved for issuance under this Plan, (b) the Exercise Prices of and number of Shares subject to outstanding Options, and (c) the number of Shares subject to other outstanding Awards will be proportionately adjusted, subject to any required action by the Board or the stockholders of the Company and compliance with applicable securities laws; provided, however, that fractions of a Share will not be issued but will either be replaced by a cash payment equal to the Fair Market Value of such fraction of a Share or will be rounded up to the nearest whole Share, as determined by the Committee.
4. ELIGIBILITY.
Awards may be granted to employees, officers, directors, consultants, independent contractors and advisors of the Company or any Parent or Subsidiary of the Company. A person may be granted more than one Award under this Plan.
5. ADMINISTRATION.
5.1 Committee Authority. This Plan will be administered by the Committee or by the Board acting as the Committee. Subject to the general purposes, terms and conditions of this Plan, and to the direction of the Board, the Committee will have full power to implement and carry out this Plan. Without limitation, the Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this Plan or any Award;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to Awards;
(f) determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards under this Plan or any other incentive or compensation plan of the Company or any Parent or Subsidiary of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission or reconcile any inconsistency in this Plan, any Award or any Award Agreement;
(j) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for the administration of this Plan.
5.2 Committee Discretion. Any determination made by the Committee with respect to any Award will be made at the time of grant of the Award or, unless in contravention of any express term of this Plan or Award, at any later time, and such determination will be final and binding on the Company and on all persons having an interest in any Award under this Plan. The Committee may delegate to one or more officers of the Company the authority to grant an Award under this Plan to Participants who are not Insiders of the Company.
6. OPTIONS.
The Committee may grant Options to eligible persons, the number of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option may be exercised, and all other terms and conditions of the Option, subject to the following:
6.1 Form of Option Grant. Each Option granted under this Plan will be evidenced by an Award Agreement (hereinafter referred to as the "Stock Option Agreement"), and will be in such form and contain such provisions (which need not be the same for each Participant) as the Committee may from time to time approve, and which will comply with and be subject to the terms and conditions of this Plan.
6.2 Date of Grant. The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option, unless otherwise specified by the Committee. The Stock Option Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time after the granting of the Option.
6.3 Exercise Period. Options may be exercisable within the times or upon the events determined by the Committee as set forth in the Stock Option Agreement governing such Option; provided, however, that no Option will be exercisable after the expiration of ten (10) years from the date the Option is granted. The Committee also may provide for Options to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines.
6.4 Exercise Price. The Exercise Price of an Option will be determined by the Committee when the Option is granted and may be not less than ____% of the Fair Market Value of the Shares on the date of grant; provided, however, in the case of a grant to an officer or director, the Exercise Price must be the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased may be made in accordance with Section 9 of this Plan.
6.5 Method of Exercise. Options may be exercised only by delivery to the Company of a written stock option exercise agreement (the "Exercise Agreement") in a form approved by the Committee, (which need not be the same for each Participant), stating the number of Shares being purchased, the restrictions imposed on the Shares purchased under such Exercise Agreement, if any, and such representations and agreements regarding the Participant's investment intent and access to information and other matters, if any, as may be required or desirable by the Company to comply with applicable securities laws, together with payment in full of the Exercise Price for the number of Shares being purchased.
6.6 Termination. Notwithstanding the exercise periods set forth in the Stock Option Agreement, exercise of an Option will always be subject to the following:
(a) If the Participant's service is Terminated for any reason except death or Disability, then the Participant may exercise such Participant's Options only to the extent that such Options would have been exercisable upon the Termination Date no later than three months after the Termination Date (or such longer time period not exceeding five years as may be determined by the Committee).
(b) If the Participant's service is Terminated because of the Participant's death or Disability (or the Participant dies within three months after a Termination other than for Cause or because of Participant's Disability), then the Participant's Options may be exercised only to the extent that such Options would have been exercisable by the Participant on the Termination Date and must be exercised by the Participant (or the Participant's legal representative) no later than 12 months after the Termination Date (or such longer time period not exceeding five years as may be determined by the Committee).
(c) Notwithstanding the provisions in paragraph 6.6(a) above, if the Participant's service is Terminated for Cause, neither the Participant, the Participant's estate nor such other person who may then hold the Option shall be entitled to exercise any Option with respect to any Shares whatsoever, after Termination, whether or not after Termination the Participant may receive payment from the Company or a Subsidiary for vacation pay, for services rendered prior to Termination, for services rendered for the day on which Termination occurs, for salary in lieu of notice, or for any other benefits. For the purpose of this paragraph, Termination shall be deemed to occur on the date when the Company dispatches notice or advice to the Participant that his service is Terminated.
6.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option, provided that such minimum number will not prevent the Participant from exercising the Option for the full number of Shares for which it is then exercisable.
6.8 Modification, Extension or Renewal. The Committee may modify, extend or renew outstanding Options and authorize the grant of new Options in substitution therefore, provided that any such action may not, without the written consent of a Participant, impair any of such Participant's rights under any Option previously granted. The Committee may reduce the Exercise Price of outstanding Options without the consent of Participants affected by a written notice to them; provided, however, that the Exercise Price may not be reduced below the minimum Exercise Price that would be permitted under Section 6.4 of this Plan for Options granted on the date the action is taken to reduce the Exercise Price.
7. STOCK AWARD.
A Stock Award is an offer by the Company to sell to an eligible person Shares that may or may not be subject to restrictions. The Committee will determine to whom an offer will be made, the number of Shares the person may purchase, the price to be paid (the "Purchase Price"), the restrictions to which the Shares will be subject, if any, and all other terms and conditions of the Stock Award, subject to the following:
7.1 Form of Stock Award. All purchases under a Stock Award made pursuant to this Plan will be evidenced by an Award Agreement (the "Stock Purchase Agreement") that will be in such form (which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan. The offer of a Stock Award will be accepted by the Participant's execution and delivery of the Stock Purchase Agreement and payment for the Shares to the Company in accordance with the Stock Purchase Agreement.
7.2 Purchase Price. The Purchase Price of Shares sold pursuant to a Stock Award will be determined by the Committee on the date the Stock Award is granted and may not be less than 85% of the Fair Market Value of the Shares on the grant date, except in the case of a sale to an officer or director, in which case the Purchase Price will be 100% of the Fair Market Value. Payment of the Purchase Price must be made in accordance with Section 9 of this Plan.
7.3 Terms of Stock Awards. Stock Awards may be subject to such restrictions as the Committee may impose. These restrictions may be based upon completion of a specified number of years of service with the Company or upon completion of performance goals set out in advance in the Participant's individual Stock Purchase Agreement. Stock Awards may vary from Participant to Participant and between groups of Participants. Prior to the grant of a Stock Award subject to restrictions, the Committee shall: (a) determine the nature, length and starting date of any Performance Period for the Stock Award; (b) select from among the Performance Factors to be used to measure performance goals, if any; and (c) determine the number of Shares that may be awarded to the Participant. Prior to the transfer of any Stock Award, the Committee shall determine the extent to which such Stock Award has been earned. Performance Periods may overlap and Participants may participate simultaneously with respect to Stock Awards that are subject to different Performance Periods and have different performance goals and other criteria.
7.4 Termination During Performance Period. If a Participant is Terminated during a Performance Period for any reason, then the Company shall be entitled to pay such Participant in Shares or cash with respect to the Stock Award, but only to the extent earned as of the date of Termination in accordance with the Stock Purchase Agreement, unless the Committee determines otherwise.
8. STOCK BONUSES.
8.1 Awards of Stock Bonuses. A Stock Bonus is an award of Shares for extraordinary services rendered to the Company or any Parent or Subsidiary of the Company. A Stock Bonus will be awarded pursuant to an Award Agreement (the "Stock Bonus Agreement") that will be in such form (which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan. Stock Bonuses may vary from Participant to Participant and between groups of Participants, and may be awarded in connection with an achievement of the Company, Parent or Subsidiary, in recognition of exceptional services rendered to the Company by the Participant and/or based on individual performance factors or upon such other criteria as the Committee may determine.
8.2 Terms of Stock Bonuses. The Committee will determine the number of
Shares to be awarded to the Participant. If the Stock Bonus is being earned upon
the satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Committee will: (a) determine the nature, length and
starting date of any Performance Period for each Stock Bonus; (b) select from
among the Performance Factors to be used to measure the performance, if any; and
(c) determine the number of Shares that may be awarded to the Participant. Prior
to the payment of any Stock Bonus, the Committee shall determine the extent to
which such Stock Bonuses have been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Bonuses that
are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with
such performance goals and criteria as may be determined by the Committee. The
Committee may adjust the performance goals applicable to the Stock Bonuses to
take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.
8.3 Form of Payment. The earned portion of a Stock Bonus may be paid to the Participant by the Company either currently or on a deferred basis, with such interest or dividend equivalent, if any, as the Committee may determine. Payment of an interest or dividend equivalent (if any) may be made in the form of cash or whole Shares or a combination thereof, either in a lump sum payment or in installments, all as the Committee will determine.
9. PAYMENT FOR SHARE PURCHASES.
Payment for Shares purchased pursuant to this Plan may be made in cash (by check) or, where expressly approved for the Participant by the Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares that either: (1) have been owned by the Participant for more than six (6) months and have been paid for within the meaning of SEC Rule 144; or (2) were obtained by the Participant in the public market;
(c) by waiver of compensation due or accrued to the Participant for services rendered;
(d) with respect only to purchases upon exercise of an Option, and provided that a public market for the Company's stock exists:
(1) through a "same day sale" commitment from the Participant and a broker-dealer that is a member of the National Association of Securities Dealers (an "NASD Dealer") whereby the Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased to pay for the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or
(2) through a "margin" commitment from the Participant and a NASD Dealer whereby the Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or
(f) by any combination of the foregoing.
10. WITHHOLDING TAXES.
10.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of Awards granted under this Plan, the Company may require the Participant to remit to the Company an amount sufficient to satisfy local tax requirements prior to the delivery of any certificate or certificates for such Shares. Whenever, under this Plan, payments in satisfaction of Awards are to be made in cash, such payment will be net of an amount sufficient to satisfy local tax requirements.
10.2 Stock Withholding. When, under applicable tax laws, a participant incurs tax liability in connection with the exercise or vesting of any Award that is subject to tax withholding and the Participant is obligated to pay the Company the amount required to be withheld, the Committee may allow the Participant to satisfy the minimum withholding tax obligation by electing to have the Company withhold from the Shares to be issued that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld, determined on the date that the amount of tax to be withheld is to be determined. All elections by a Participant to have Shares withheld for this purpose will be made in accordance with the requirements established by the Committee and will be in writing in a form acceptable to the Committee.
11. PRIVILEGES OF STOCK OWNERSHIP.
11.1 Voting and Dividends. No Participant will have any of the rights of a stockholder with respect to any Shares until the Shares are issued to the Participant. After Shares are issued to the Participant, the Participant will be a stockholder and will have all the rights of a stockholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares; provided, that if such Shares are issued pursuant to a Stock Award with restrictions, then any new, additional or different securities the Participant may become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any other change in the corporate or capital structure of the Company will be subject to the same restrictions as the Stock Award.
11.2 Financial Statements. The Company will provide financial statements to each Participant prior to such Participant's purchase of Shares under this Plan, and to each Participant annually during the period such Participant has Awards outstanding; provided, however, the Company will not be required to provide such financial statements to Participants whose services in connection with the Company assure them access to equivalent information.
12. NON-TRANSFERABILITY.
Awards of Shares granted under this Plan, and any interest therein, will not be transferable or assignable by the Participant, and may not be made subject to execution, attachment or similar process, other than by will or by the laws of descent and distribution. Awards of Options granted under this Plan, and any interest therein, will not be transferable or assignable by the Participant, and may not be made subject to execution, attachment or similar process, other than by will or by the laws of descent and distribution, by instrument to an inter vivos or testamentary trust in which the options are to be passed to beneficiaries upon the death of the trustor, or by gift to "immediate family" as that term is defined in 17 C.F.R. 240.16a-1(e). During the lifetime of the Participant an Award will be exercisable only by the Participant. During the lifetime of the Participant, any elections with respect to an Award may be made only by the Participant unless otherwise determined by the Committee and set forth in the Award Agreement with respect to Awards that are not ISOs.
13. CERTIFICATES.
All certificates for Shares or other securities delivered under this Plan will be subject to such stop transfer orders, legends and other restrictions as the Committee may deem necessary or advisable, including restrictions under any applicable federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange or automated quotation system upon which the Shares may be listed or quoted.
14. ESCROW; PLEDGE OF SHARES.
To enforce any restrictions on a Participant's Shares, the Committee may require the Participant to deposit all certificates representing Shares, together with stock powers or other instruments of transfer approved by the Committee appropriately endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions to be placed on the certificates.
15. EXCHANGE AND BUYOUT OF AWARDS.
The Committee may, at any time or from time to time, authorize the Company, with the consent of the respective Participants, to issue new Awards in exchange for the surrender and cancellation of any or all outstanding Awards. The Committee may at any time buy from a Participant an Award previously granted with payment in cash, Shares or other consideration, based on such terms and conditions as the Committee and the Participant may agree.
16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
An Award will not be effective unless such Award is in compliance with all applicable federal and state securities laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in this Plan, the Company will have no obligation to issue or deliver certificates for Shares under this Plan prior to: (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and/or (b) completion of any registration or other qualification of such Shares under any state or federal law or ruling of any governmental body that the Company determines to be necessary or advisable. The Company will be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification or listing requirements of any state securities laws, stock exchange or automated quotation system, and the Company will have no liability for any inability or failure to do so.
17. NO OBLIGATION TO EMPLOY.
Nothing in this Plan or any Award granted under this Plan will confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Parent or Subsidiary of the Company or limit in any way the right of the Company or any Parent or Subsidiary of the Company to terminate Participant's employment or other relationship at any time, with or without cause.
18. CORPORATE TRANSACTIONS.
18.1 Assumption or Replacement of Awards by Successor. In the event of
(a) a dissolution or liquidation of the Company, (b) a merger or consolidation
in which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 18.1, (i)
the vesting of any or all Awards granted pursuant to this Plan will accelerate
upon a transaction described in this Section 18 and (ii) any or all Options
granted pursuant to this Plan will become exercisable in full prior to the
consummation of such event at such time and on such conditions as the Committee
determines. If such Options are not exercised prior to the consummation of the
corporate transaction, they shall terminate at such time as determined by the
Committee.
18.2 Other Treatment of Awards. Subject to any greater rights granted to Participants under the foregoing provisions of this Section 18, in the event of the occurrence of any transaction described in Section 18.1, any outstanding Awards will be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation, or sale of assets.
18.3 Assumption of Awards by the Company. The Company, from time to time, also may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either; (a) granting an Award under this Plan in substitution of such other company's award; or (b) assuming such award as if it had been granted under this Plan if the terms of such assumed award could be applied to an Award granted under this Plan. Such substitution or assumption will be permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under this Plan if the other company had applied the rules of this Plan to such grant. In the event the Company assumes an award granted by another company, the terms and conditions of such award will remain unchanged (except that the exercise price and the number and nature of Shares issuable upon exercise of any such option will be adjusted appropriately). In the event the Company elects to grant a new Option rather than assuming an existing option, such new Option may be granted with a similarly adjusted Exercise Price.
19. ADOPTION AND STOCKHOLDER APPROVAL.
This Plan will become effective on the date on which it is adopted by the Board (the "Effective Date"). Upon the Effective Date, the Committee may grant Awards pursuant to this Plan.
20. TERM OF PLAN/GOVERNING LAW.
Unless earlier terminated as provided herein, this Plan will terminate 10 years from the date this Plan is adopted by the Board or, if earlier, the date of stockholder approval. This Plan and all agreements thereunder shall be governed by and construed in accordance with the laws of the State of Missouri.
21. AMENDMENT OR TERMINATION OF PLAN.
The Board may at any time terminate or amend this Plan in any respect, including without limitation amendment of any form of Award Agreement or instrument to be executed pursuant to this Plan; provided, however, that the Board will not, without the approval of the stockholders of the Company, amend this Plan in any manner that requires such stockholder approval.
22. NONEXCLUSIVITY OF THE PLAN.
Neither the adoption of this Plan by the Board, the submission of this Plan to the stockholders of the Company for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of stock options and bonuses otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
23. ACTION BY COMMITTEE.
Any action permitted or required to be taken by the Committee or any decision or determination permitted or required to be made by the Committee pursuant to this Plan shall be taken or made in the Committee's sole and absolute discretion.
Exhibit 5.1
VANDERKAM & ASSOCIATES
1301 TRAVIS, STE. 1200
HOUSTON, TX 77002
(713) 547-8900
(713) 547-8910 FACSIMILE
April 27, 2006
Integrated Management Information, Inc.
601 4th Street
Platte City, MO 64079
Gentlemen:
You have requested that we furnished you our legal opinion with respect to the legality of the following described securities of Eternal Technologies, Inc. (the "Company") covered by a Form SB-2 Registration Statement, (the "Registration Statement"), initially filed with the Securities and Exchange Commission (File No. __________) by the Company on April ___, 2006 for the purpose of registering such securities under the Securities Act of 1933:
1. 17,867,515 shares of common stock, $.001 par value currently held by existing shareholders being registred by the Company (the "Registered Securities").
In connection with this opinion, we have examined the corporate records of the Company, including the Company's Amended Articles of Incorporation, Bylaws, and the Minutes of its Board of Directors and Shareholders meetings, the Registration Statement, and such other documents and records as we deemed relevant in order to render this opinion. Based on the foregoing, it is our opinion that, after the Registration Statement becomes effective and the Shares have been issued and delivered as described therein, the Shares will be validly issued, fully paid and non-assessable.
In giving the opinions expressed above, we advise that our opinions herein are with respect to federal law and the law of the States of Nevada and Texas only and that, to the extent such opinions are derived from laws of other jurisdictions, such statements are based upon an examination of relevant authorities and are believed to be correct, but we have obtained no legal opinions as to such matters from attorneys licensed to practice in such other jurisdictions.
We hereby consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement and further consent to statements made therein regarding our firm and use of our name under the heading "Legal Matters" in the Prospectus constituting a part of such Registration Statement.
Sincerely,
VANDERKAM & ASSOCIATES
/s/ Hank Vanderkam |
COMMERCIAL LEASE
THIS LEASE, is made and entered into this 27th day of June, 2005 by and between Don Witt, Inc. (hereinafter called "Landlord"), and Integrated Management Information, Inc., with a mailing address of 601 Fourth Street, P.O. Box 1291, Platte City, MO 64079, (hereinafter called "Tenant").
ARTICLE I
LEASED PREMISES
SECTION 1.01. LEASED PREMISES.
Landlord owns or controls the tract of land in the City of Platte City, County of Platte, and State of Missouri, described in Exhibit "A", attached hereto and incorporated herein by reference. Said land, together with all buildings and improvements now or hereinafter erected thereon, is located at 4th & Main, Platte City, MO 64079 (hereinafter called the "Building").
SECTION 1.02. COMMON AREAS.
The term "Common Areas" shall be deemed to mean all areas, improvements, space, equipment and special services in or at the Building provided by Landlord for the common or joint use and benefit of tenants of the Building, their officers, employees, agents, servants, customers and other invitees, including without limitation all parking areas, driveways, entrances, exits, retaining walls, landscaped areas, pedestrian walkways, courts, access roads, stairs, downstairs hallway, ramps and sidewalks, lot located next to the Building with an address of 605 Fourth Street, Platte City, MO, maintenance buildings, and on-site signs identifying the Building.
SECTION 1.03 DESCRIPTION OF LEASED PREMISES.
Landlord does hereby lease, demise and let unto the Tenant and Tenant hereby leases and rents from Landlord the premises now located on the second and third floor of the Premises and common use of the downstairs hallway with other tenants totaling approximately 3,589 square feet (hereinafter called the "Leased Premises").
SECTION 1.04. TERM.
The initial term (the "Initial Term") beginning July 15, 2005 and ending July
15, 2006 of this Lease shall be one (1) year and shall automatically renew
itself unless one party to the agreement gives the other party at least ninety
(90) days notice prior to the expiration of the then term of the Lease.
SECTION 1.06. RESERVATIONS.
Landlord reserves to itself, the use of the roof, exterior walls and the area above and below the Leased Premises, together with the right and obligation to install, maintain, use, repair and replace pipes, ducts, conduits, wires and structural elements leading through the Leased Premises and which serve other parts of the Building. The use and occupation by the Tenant of the Leased Premises shall include a revocable license to use in common with the others entitled thereto, the common areas, as may be designated from time to time by Landlord, subject, however, to the terms and conditions of this lease and the rules and regulations for the use thereof as prescribed from time to time by the Landlord.
ARTICLE II
RENT
SECTION 2.01. FIXED MINIMUM RENT.
During the first year of the Initial Term of this Lease, a fixed minimum rent (the "Minimum Rent"), is Thirty Five Thousand Eight Hundred Ninety and no/100 Dollars ($35,890.00) payable in advance, on the first day of each and every month at the rate of Two Thousand Nine Hundred Ninety and 83/100 Dollars ($2,990.83) per month.
At the beginning of any Renewal Term the parties shall calculate the increase in rent which has been occasioned by the Consumer Price Index since the beginning date of the previous term. If the increase since the beginning of the previous term has been less than three and one-half percent (3 1/2%) per annum, the Minimum Rent at the beginning of the Renewal Term will be adjusted as though the Consumer Price Index adjustments during the previous term had been at the rate of three and one-half percent (3 1/2% per year.
SECTION 2.02. ADDITIONAL RENT.
In addition to the Minimum Rent, Tenant shall pay as additional rent (the "Additional Rent"), in the amount of Two Dollars ($2.00) per square foot of leased premises, it being agreed in advance that the square footage leased by Integrated Management Information, Inc. is Three Thousand Five Hundred Eighty Nine square feet (3,589 sq. ft.). It is further agreed that Tenant's portion of the additional rent charges shall be Seven Thousand One Hundred Seventy Eight and no/100 Dollars ($7,178.00) per year payable Five Hundred Ninety Eight and 16/100 Dollars ($598.16) per month based on sixty percent (60%) of the building. In the event the actual additional rent costs exceed the $2.00 per square foot price then the Landlord reserves the right to make an additional assessment for the amount of the excess. Provided however, no additional charge will be made if, subject to the provisions of Paragraph 18.03, there has been a carryover of additional rent from year to year in the event the Lease is renewed. The additional rent to be payable on the 1st day of each month.
Failure to pay any monthly payment of the Fixed Minimum Rent or Additional Rent by the 30th of the month will result in a ten percent (10%) penalty.
SECTION 2.03. COMMON AREA.
The common area charges are deemed to be the following:
1. All city and county property tax
2. All insurance charges
3. Trash
4. Water
5. Mowing
6. Snow removal
7. Outside maintenance
8. Special Assessments
9. Maintenance of downstairs hallway
The additional rent does not cover inside capital improvements and maintenance which are the responsibility of the Tenant.
The additional rent does not cover the janitor or cleaning supplies for that portion of the leased area and common area on the first floor.
ARTICLE III
SECURITY DEPOSIT
SECTION 3.01. SECURITY DEPOSIT.
Tenant has previously deposited with Landlord the sum of Three Hundred Dollars ($300.00), receipt of which is hereby acknowledged. Said deposit shall be held by Landlord, without liability for interest, as security for the faithful performance by Tenant of all of the terms, covenants and conditions of this Lease by Tenant to be performed. If at any time during the Lease term any of the rent herein reserved shall be overdue and unpaid, or any other sum payable by Tenant shall be overdue, or if Tenant fails to perform any of the other terms, covenants and conditions to be performed by Tenant, then Landlord, at its option, may appropriate and apply all, or any portion, of said deposit to the payment of any such overdue rent or other charge and to the compensation of Landlord for loss or damage sustained by Landlord due to a breach by Tenant as aforesaid, without prejudice, to Landlord's further remedies. Should all or any part of the security deposit be appropriated and applied by Landlord as provided in the preceding sentence, then Tenant shall, upon demand of Landlord, forthwith remit to Landlord a sufficient amount in cash to restore the same to the original sum deposited. Should Tenant comply with all the terms, covenants and conditions of this Lease binding on the Tenant, said deposit shall be returned in full to Tenant within thirty (30) days after the end of the Lease term, less any portion thereof which may have been utilized by Landlord to cure any default or applied to any damages suffered by Landlord and not previously redeposited, together with an itemized written statement setting forth the items and amounts which have been deducted from the security deposit. Landlord shall deliver the funds deposited hereunder to the purchaser of the Landlord's interest in the Building in the event that such interest is sold; thereupon, Landlord shall be discharged from any further liability with respect to such deposit. Interest earned by Landlord on any deposit shall be retained by Landlord.
Tenant understands that the deposit is not required to be held in a separate escrow account by Landlord and specifically authorizes Landlord to commingle the deposit with Landlord's funds and Tenant further understands and agrees that Landlord is under no obligation to pay or account to Tenant for any interest, earnings or increments accrued to Landlord from use of the deposit.
ARTICLE IV
UTILITIES
SECTION 4.01. UTILITIES.
All utilities that may be billed directly by the utility company to Tenant will be paid directly by Tenant. If a utility cannot be billed directly to Tenant, it will be paid by Landlord together with any utilities for the common areas throughout the Building. The costs of all utilities billed to Landlord shall be paid by Tenant on a monthly basis as Additional Rent on a pro rata share based on all utility bills payable upon the Building during the preceding month, divided by the pro rata share of the gross leasable space of the Building occupied by Tenant. The utility charges will be shared sixty percent (60%) by Tenant and forty percent (40%) by downstairs Tenant. Landlord shall notify the Tenant in writing of its pro-rata share of each utility bill each month, and Tenant shall pay the same within ten (10) days of the notice thereof. For purposes of this paragraph, utilities includes any charge for refuse service to the Building. Tenant's pro rata share is subject to Section 2.02 hereof. ARTICLE V TAXES
SECTION 5.01. PAYMENT OF REAL ESTATE TAXES.
Landlord will pay directly to the applicable taxing authority all taxes, assessments, and other charges, general or special, ordinary or extraordinary, including any installments, levied or imposed by any lawful authority against or in any respect to the Building of which the Leased Premises are a part; subject always to Tenant's obligation for reimbursement as set forth in Section 3.02 hereof. It is presently anticipated that the real estate taxes may be paid from the additional rent.
SECTION 5.02. TENANT'S TAX OBLIGATION.
A. During the term of this Lease, or any renewal term, Tenant shall pay on a monthly basis, together with and at the same time as the Minimum Rent (as such rent may be adjusted hereunder), its pro-rata share of one-twelfth (1/12th) of the estimated annual cost of Real Estate Taxes (as hereinafter defined) on the Leased Premises. The Real Estate Taxes shall be estimated based on the immediately preceding tax year. The term "Real Estate Taxes" shall mean the aggregate of all ad valorem real estate taxes, assessments and other governmental charges, levies, general and special, ordinary and extraordinary, foreseen and unforeseen of any kind or nature whatsoever, including, without limitation, assessments for public improvements or benefits and special assessments and any other levies which may be levied, assessed or imposed upon the Building. The term Tenant's pro-rata share of said real estate taxes shall be the total of all Real Estate Taxes (heretofore described) payable upon the Building during the calendar year or other fiscal taxing, divided by the pro rata share of the gross leasable space of the Building occupied by Tenant. At the end of each calendar year, or as of the end of the Lease Term, the Landlord shall compute the actual cost of said Real Estate Taxes and the Tenant shall pay to the Landlord any excess of such costs over amounts previously paid by Tenant. If Tenant has paid more than the actual cost of said real estate taxes, the Landlord shall promptly credit the amount of any such overpayment to Tenant's next monthly payments of Minimum Rent due hereunder. Landlord shall provide Tenant with a copy of any tax invoices received by Landlord in connection with the Building.
B. In the event that any governmental authority having jurisdiction over the Building shall impose a tax and/or assessment (other than an income or franchise tax) either upon or against the rentals payable by Tenants in the Building to Landlord or upon or against the business of renting land or buildings, either by way of substitution for real estate taxes as defined above, or in addition thereto, said tax or assessment shall be paid by Tenant as Additional Rent, with the Tenant's proportionate share of such Additional Rent to be determined in the same manner as his proportional share of real estate taxes.
C. Tenant shall be responsible for and shall pay when due any and all taxes, assessments, license fees and public charges, of whatever kind or nature, including but not limited to general or special assessments, assessed during the term of this Lease against any leasehold interest, or against Tenant's business in the Leased Premises, or personal property of any kind owned by, or placed in, upon or about the Leased Premises by Tenant.
D. In the event that, after the commencement of this Lease, any governmental authority imposes a new or different tax, charge or levy which is billed or charged to the Building and/or the Landlord, and such tax, charge or levy is attributable to, derived from or based upon Tenant's leasehold interest, Tenant's occupancy of or doing business in the Leased Premises, Tenant's sales or receipts, or personal property of any kind owned by, or placed in, upon or about the Leased Premises by Tenant; such tax, charge or levy shall be paid by Tenant as Additional Rent, with Tenant's proportional share of such Additional Rent to be determined in the same manner as his proportional share of real state taxes.
ARTICLE VI
INDEMNITY AND INSURANCE
SECTION 6.01. INDEMNIFICATION.
Tenant shall protect, indemnify and save harmless Landlord, its mortgagees, lenders, officers, agents, servants and employees, from and against any and all liability and expense of any kind (including attorney fees) arising from injuries, damage or loss to persons or property or loss of life (whether of Tenant or other persons) on or about the Building or Leased Premises or any part thereof; and arising from injuries, damages or loss to persons or property or loss of life (whether of Tenant or other persons) sustained or occurring elsewhere then on or about the Leased Premises arising out of the use or occupancy of the Leased Premises by Tenant on or account of or based upon any fact, omission, fault, negligence or misconduct of Tenant. Tenant agrees to promptly notify Landlord of any claim, action, proceeding or suit instituted or threatened against the Landlord. In the event Landlord is made a party to any action for damages which Tenant has indemnified Landlord against, then Tenant shall pay all costs and shall provide effective counsel approved by Landlord in such litigation or shall pay, at Landlord's option, the reasonable attorney fees and costs incurred in connection with said litigation by Landlord.
Landlord shall protect, indemnify and save harmless Tenant, its owners, officers, agents, servants and employees, from and against any and all liability and expense of any kind (including attorney fees) arising from injuries, damage or loss to persons or property or loss of life on or about the Building or Leased Premises or any part thereof; and arising from injuries, damages or loss to persons or property or loss of life sustained or occurring elsewhere than on or about the Leased Premises arising out of the use of occupancy of the common areas of the Leased Premises on or account of or based upon any fact, omission, fault, negligence or misconduct of Landlord. Landlord agrees to promptly notify Tenant of any claim, action, proceeding or suit instituted or threatened against the Tenant. In the event Tenant is made a part to any action for damages which Landlord has indemnified by Tenant against, then Landlord shall pay all costs and shall provide effective counsel approved by Tenant in such litigation or shall pay, at Tenant's option, the reasonable attorney fees and costs incurred in connection with said litigation by Tenant.
SECTION 6.02. INSURANCE PROVIDED BY TENANT.
As a part of the additional rent Tenant shall pay its share of a liability policy providing liability coverage for both Landlord and Insured which shall be paid from the additional rent.
Landlord shall not have any liability to Tenant for any loss or damage incurred by Tenant by reason of fire or other casualty including, but not limited to, loss of business property and income or profits, unless such loss or casualty is caused by the negligence or willful misconduct of Landlord or its agents.
SECTION 6.03. INSURANCE COSTS FOR BUILDING.
The insurance cost will be a Common Area charge. Landlord will insure the building for its full measurable value which will be paid from the Additional Rent. Tenant shall have no right to any insurance proceeds.
During the term of this Lease, or any renewal term, Lessor, at Lessor's expense, shall keep Insurance Coverage (as hereinafter defined) on the Building against loss or damage by fire and other casualty in an amount equal to the Building's full measurable value which shall be paid from the additional rent. The term "Insurance Coverage" shall include full replacement value, fire, extended coverage, liability, loss of rent, vandalism, earthquake coverage, glass coverage, sign coverage and malicious mischief insurance premiums for the Building. It is expressly understood that Landlord's insurance does not include business interruption or leasehold coverage for the benefit of Tenant..
Tenant agrees that, if any property owned by it and located in the Leased Premises shall be damaged or destroyed by an insured peril, and provided such loss shall not have been caused by Landlord's negligence or willful misconduct, Landlord shall not have any liability to Tenant, nor to any insurer of Tenant, for, or in respect of such damage or destruction.
SECTION 6.04. NOTICE OF CASUALTY.
Tenant shall give Landlord prompt notice in case of casualty damage to or accidents in the Leased Premises.
ARTICLE VII
CONDUCT OF BUSINESS BY TENANT
SECTION 7.01. USE OF LEASED PREMISES.
Tenant shall operate the Leased Premises as software and hardware development and related activities.
ARTICLE VIII
MAINTENANCE OF LEASED PREMISES
SECTION 8.01. MAINTENANCE BY LANDLORD.
Landlord agrees to maintain and keep in good repair, at its sole cost, the roof and exterior of the outside walls of the Building in which the Leased Premises are located, and the mechanical, electrical and plumbing systems of the Building which service the Leased Premises; provided that Landlord's obligation to make any such repairs shall not extend to any of said conditions which may have been created by the negligence of Tenant, its agents, employees, invitees, licensees or contractors; provided further, that Landlord's obligation to make any such repairs shall not be applicable to any exterior improvements placed upon the Leased Premises, or otherwise in the Building, by or specifically for Tenant, the maintenance of any such items shall be the specific responsibility of Tenant. The maintenance expense shall be paid from the additional rent.
SECTION 8.02. MAINTENANCE BY TENANT.
Tenant agrees to maintain and keep in good repair, at its sole cost, the interior of the Leased Premises, including but not limited to (a) the interior lighting; (b) windows, including sashes; (c) doors, including frames, locks and hardware; (d) signs, ceiling and floor coverings therein; and (e) fixtures, equipment, machinery, controls, appliances, sprinkler systems and utility lines, and appurtenants thereof as are used in connection with the electrical, plumbing, heating, air conditioning and ventilating system or systems for the Leased Premises provided such items are within the Leased Premises, and any other mechanical system in the Leased Premises. If Tenant fails to make any repairs required hereunder, Landlord may demand that the Tenant make the same forthwith; and if the Tenant refuses or neglects to commence such repairs within thirty (30) days and complete the same within a reasonable period of time, Landlord may make or cause such repairs to be made, and shall not be responsible to Tenant for any loss or damage that may accrue to his stock or business by reason thereof; and if Landlord makes or causes such repairs to be made, Tenant agrees to pay to Landlord, on demand, the cost thereof. Tenant is not obligated to maintain any utility or mechanical system which passes over, through or under the Leased Premises for the purpose of providing services to another Tenant or to Common Areas.
SECTION 8.03. INSTALLATION OF ELECTRICAL, COMPUTER EQUIPMENT AND OUTSIDE LINES.
Any outside, electrical or telephone lines shall be installed by the Tenant, any computer or other electrical equipment which causes or which will cause excessive utility expense or interfere with other tenants shall not be installed without approval of the Landlord. If Tenant installs any electrical equipment that overloads the lines in the Leased Premises, or the Building, the Tenant shall, at its expense, make whatever changes are necessary to comply with the requirements of the insurance underwriters or governmental authorities having jurisdiction, and shall be responsible for paying any damage caused thereby to the other tenants in the Building. Landlord shall not be required to supply electric service to the Leased Premises in excess of the capacity that is now existing. No additional lines shall be installed above ground without the written permission of Landlord.
SECTION 8.04. TENANT'S LIENS.
Tenant will not create or permit to be created or to remain and will discharge, any lien (included but not limited to, the liens of mechanics, laborers or materialmen for work or materials alleged to be done or furnished in connection with the Leased Premises), encumbrance or other charge upon the Leased Premises or any part thereof, or upon Tenant's leasehold interest therein; provided, the Tenant shall not be required to discharge any such liens, encumbrances or charges as may be placed upon the Leased Premises by the act of Landlord.
Tenant shall have the right to contest, in good faith and by appropriate legal proceedings, the validity or amount of any mechanics, laborers or materialmen's lien or claimed lien. In the event of such contest, Tenant shall give to Landlord security in a form acceptable to Landlord, and in an amount not less than any such lien or claimed lien, to insure payment thereof and to prevent any sale, foreclosure or forfeiture of the Leased Premises or any part thereof by reason of such non-payment. on final determination of such lien or claim for lien, Tenant will immediately pay any judgment rendered, with all proper costs and charges and shall have such lien released or judgment satisfied at Tenant's expense; upon such payment and release or satisfaction Landlord will promptly return to Tenant such security as Landlord shall have received in connection with such contest. Landlord reserves the right to enter the Leased Premises to post or keep posted notices of non-responsibility for such lien. Tenant will pay, protect and indemnify Landlord within ten (10) days after demand therefor, from and against all liabilities, losses, claims, damages, costs and expenses, including attorney fees, incurred by Landlord by reason of the filing of any lien and/or removal of the same.
SECTION 8.05. TENANT'S SIGNS.
Landlord shall make space available to Tenant on the exterior portion of the Building on which Tenant can place its name, along with the names of other Tenants of the Building and subject to Landlord's lettering criteria. Apart from the foregoing, Tenant will not place or cause to be placed or maintained on any exterior door, wall, window, building entry or store front of the Leased Premises or the Building any sign, awning or canopy or advertising matter or other thing of any kind, and will not place or maintain any exterior lighting, plumbing fixture or protruding object or any decoration, sign, lettering or advertising matter on the glass of any window or door of the Leased Premises or the Building without first obtaining written approval and consent by the Landlord.
All Tenant signs shall be installed and maintained at Tenant's expense. Landlord may erect a structure to accommodate Tenant's signs and if a structure is so erected, the structure will be maintained by Landlord, but all Tenant signs erected therein or thereon shall be erected and maintained at Tenant's sole expense.
SECTION 8.06. TENANT TO KEEP FREE OF OBSTRUCTIONS, TRASH, DEBRIS, SNOW AND ICE.
Tenant shall at all times keep the walkways, porches, doorways and entryways providing ingress and egress to the Leased Premises free of all obstructions including, but not limited to, trash, debris, snow and ice accumulations. In the event such obstructions or accumulations are not promptly removed by Tenant, the same may be removed by Landlord and the cost thereof shall be payable by Tenant as Additional Rent.
ARTICLE IX
PARKING
SECTION 9.01. PARKING OF VEHICLES.
Tenant agrees that it, its agents and employees will park their vehicles only in such areas as the Landlord from time to time designates for employee parking areas. No vehicle shall be parked in any area not designated for parking (including any of the adjoining streets or roads). Tenant's customers shall share the parking available with the employees, customers and invitees of other tenants within the Building on a first come, first served basis.
ARTICLE X
ACCESS TO PREMISES
SECTION 10.01. ACCESS TO PREMISES.
Landlord or Landlord's agent, upon reasonable notice and at reasonable times, shall have the right to enter the Leased Premises to examine the same, and, within the last three (3) months of the term of the Lease (or any renewal term) to show the Leased Premises to prospective purchasers or tenants of the Building, and to make such repairs, alterations, improvements or additions as Landlord may reasonably deem necessary or desirable, provided Landlord, or its agents, shall not materially interfere with Tenant's business; Landlord shall be allowed to take all material into and upon said Leased Premises that may be required therefor without the same constituting an eviction of Tenant, in whole or in part, and the rent shall in no way abate while said repairs, alterations, improvements or additions are being made, provided Landlord, or its agents, shall not materially interfere with Tenant's business. If Tenant, or its agents, shall not be present to open and permit an entry into said Leased Premises at any time, when for any reason an entry therein shall be necessary or permissible, Landlord or Landlord's agents may enter the same, without rendering Landlord or such agents liable therefor, and without in any manner affect any obligations or covenants of this Lease.
ARTICLE XI
ASSIGNMENT
SECTION 11.01. ASSIGNMENT.
Tenant will not voluntarily or involuntarily assign (by operation of law or otherwise), mortgage, pledge, or sublet this Lease in whole or in part, or all or any part of the Leased Premises, without the prior written consent of Landlord in each instance, which consent shall not be unreasonably withheld or delayed. The consent by Landlord to any assignment or subletting shall not constitute a waiver of the necessity for such consent to any subsequent assignment or subletting. Tenant shall pay all costs, expenses and reasonable attorney fees that may be incurred or paid by Landlord in processing, documenting or administering any request by Tenant for Landlord's consent required pursuant to this paragraph. Any consent by Landlord to an assignment or subletting as provided for in this paragraph shall not release Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained, and Tenant shall remain ultimately liable for all payments and compliance with all other covenants under this Lease. If at any time during the Lease term any part or all of the capital shares of Tenant, if Tenant shall be a corporation' shall be transferred by sale, assignment, bequest, inheritance, operation of law or other disposition so as to result in a change of the effective vote control of Tenant as of the date of this Lease, Tenant shall promptly notify Landlord in writing of such change, and Landlord may terminate this Lease at any time after such change in control by giving Tenant sixty (60) days prior written notice of such termination. ARTICLE XII EMINENT DOMAIN
SECTION 12.01. EMINENT DOMAIN.
If the whole of the Leased Premises shall be taken or acquired by any public or quasi-public authority under the power or threat of eminent domain, the Lease term shall cease as of the date possession shall be taken by such public authority and Tenant shall pay rent up to that date with an appropriate refund by Landlord of such rent as may have been paid in advance for any period subsequent to the date possession is taken. If less than all of the Leased Premises shall be so taken, the Lease term shall cease only on the part so taken as of the date possession shall be taken by such authority and Tenant shall pay rent up to that day with appropriate refund by Landlord for such rent as may have been paid in advance for any period subsequent to the date that possession is taken; thereafter, the Minimum Rent and Additional Rent shall be adjusted on a prorata basis based upon the number of square feet taken. However, if the part of the Leased Premises so taken leaves space no longer suitable, in the reasonable opinion of Tenant, for the conduct of Tenant's business, then Tenant may elect to terminate the Lease term and Tenant shall pay rent up to the day possession is taken.
SECTION 12.02. DAMAGES.
All compensation awarded or paid for any taking or acquiring under the power or threat of eminent domain, whether the whole or any part of the Leased Premises or Building, shall be property of Landlord, whether such damages shall be awarded as compensation for the diminution in value of the leasehold or to the fee of the Leased Premises or otherwise, and Tenant hereby assigns to Landlord all of the Tenant's right, title and interest in and to any and all such compensation; provided, however, that Landlord shall not be entitled to any award specifically made to Tenant for the taking of Tenant's trade fixtures, furniture or leasehold improvements to the extent of the cost to Tenant of said improvements, less depreciation computed from the date of said improvements to the expiration of the original term of this Lease. Notwithstanding anything herein to the contrary, Tenant expressly retains the right to pursue a separate action for loss of Tenant's business, depreciation to and cost or removal of stock and trade fixtures, moving and other reimbursable expenses for the Tenant.
ARTICLE XIII
DESTRUCTION BY FIRE OR OTHER CAUSE
SECTION 13.01. PARTIAL DESTRUCTION BY FIRE OR OTHER CAUSE.
If the Leased Premises shall be partially damaged by fire or other casualty or cause without the fault or neglect of Tenant, the damage shall promptly be repaired by and at the expense of Landlord and the rent until such repairs shall be made shall be apportioned according to the part of the Leased Premises which is unusable by Tenant. If such partial damage is due to the fault or neglect of Tenant, without prejudice to any other rights and remedies of Landlord, the damages shall be repaired by Landlord but there shall be no apportionment or abatement of rent and the Tenant shall pay to the Landlord any deductible not covered by the proceeds of insurance. In no event shall the Landlord be required to repair or replace Tenant's stock in trade, fixtures, furniture, furnishings, floor coverings or equipment. No penalty shall accrue for reasonable delay which may arise by reason of an adjustment of insurance on the part of Landlord and/or Tenant, for reasonable delay on account of "labor troubles" or any other cause beyond Landlord's control. If the Leased Premises or the Building are substantially damaged by fire or other cause, then either Landlord or Tenant may elect to terminate this Lease upon written notice to the other party, and Landlord's sole obligation to Tenant shall be the appropriate refund by Landlord of such rent as may have been paid in advance for any period subsequent to the date of such destruction, and the return of the security deposit.
ARTICLE XIV
ALTERATION OF LEASED PREMISES
SECTION 14.01. ALTERATION OF LEASED PREMISES.
Except for minor non-structural changes or alterations, Tenant shall not alter or change the Leased Premises in any manner without first obtaining written permission of Landlord. Landlord in its sole discretion may approve or disapprove any plans for proposed alteration or changes in the Leased Premises, in whole or in part.
ARTICLE XV
LANDLORD'S LIEN
SECTION 15.01. LANDLORD'S LIEN.
The Landlord is hereby granted a lien, in addition to any statutory lien that may exist, on all merchandise, furniture, trade fixtures and other personal property of Tenant in the Leased Premises, to secure the payment of any rent or other sums due under this Lease; such property shall not be moved therefrom until all arrearages shall have been discharged. Landlord shall have the right, upon a default in the payment of any rent or other sum due under this Lease, to enter the Leased Premises and take possession of all such property without liability whether for trespass, eviction, forcible entry or conversion, or otherwise and to sell the same (Tenant hereby waiving the benefit of all laws exempting property from execution, levy and sale on distress or judgment), with or without notice, at public or private sale (at which Landlord may purchase) and apply the proceeds thereof, less all expenses incurred in connection with the exercise of Landlord's rights hereunder, as a credit against any sums due from Tenant to Landlord. Any surplus shall be paid to Tenant, and Tenant shall pay any deficiency forthwith. Alternatively, the lien hereby granted may be foreclosed in any manner provided by law.
ARTICLE XVI
DEFAULT BY TENANT
SECTION 16.01. DEFAULT BY TENANT.
A. In the event of: (i) any failure of Tenant to pay any rental or other charges
due hereunder for more than ten (10) days after the same shall be due; or (ii)
any failure of Tenant to perform any other of the terms, conditions or covenants
of this Lease to be observed or performed by Tenant for more than thirty (30)
days after written notice of such default shall have been given to Tenant; or
(iii) if Tenant or any guarantor of this Lease shall become bankrupt or
insolvent, or file any debtor proceedings, or take or have taken against Tenant
or any guarantor of this Lease in any Court pursuant to any statute, either of
the United States or of any state, a petition in bankruptcy or insolvency or for
reorganization or for appointment of a receiver or a trustee of all or a portion
of Tenant's or any such guarantor's property; or (iv) if Tenant or any such
guarantor makes an assignment for the benefit of creditors, or petitions for or
enters into any agreement; or (v) if Tenant shall abandon the Leased Premises or
suffer this Lease to be taken under any writ of execution; then Landlord, in
addition to the other rights or remedies it may have, shall have the immediate
right of re-entry and remove all persons and property from the Leased Premises;
and such property may be removed and stored in a public warehouse or elsewhere
at the cost of, and for the account of Tenant, and without being deemed guilty
of trespass, or becoming liable for any loss or damage which may be occasioned
thereby. It is expressly agreed by Tenant that Minimum Rent, tax reimbursement,
insurance reimbursement, charges and any other regular monthly payments due
under this Lease are due on the date specified herein; and any other sum
(whether or not designated as Additional Rent) is due within ten (10) business
days after receipt of the invoice therefor or notice thereof.
B. Should Landlord elect to re-enter, as herein provided, or should it take possession pursuant to legal proceedings or pursuant to any notice provided for by law, it may either terminate this Lease or it may, from time to time, without terminating this Lease, make such alterations and repairs as may be reasonably necessary in order to relet the Leased Premises, and relet the Leased Premises, or any part thereof, for such term or terms (which may be for a term extending beyond the Lease Term) and at such rental or rentals and upon such other terms and conditions as Landlord, in its reasonable discretion, may deem advisable. Upon each such reletting, all rentals received by Landlord from such reletting shall be applied, first to the payment of any indebtedness other than rent due hereunder from Tenant to Landlord; second to the payment of any costs and expenses of such reletting, including brokerage fees and attorney fees and costs of such alterations and repairs; third to the payment of rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. If such rental is received from such reletting during any month be less than that to be paid during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. Should Landlord at any time terminate this Lease for any breach, in addition to any other remedies it may have, it may recover from Tenant all damages it may incur by reason of such breach, including the cost of recovering the Leased Premises, attorney fees, and including the worth at the time of such termination of the excess, if any, of the amount of rent and charges equivalent to the rent reserved in this Lease for the remainder of this Lease Term over the then reasonable rental value of the Leased Premises for the remainder of the Lease Term. All of which amount shall be immediately due and payable from Tenant to Landlord. In determining the rent which would be payable by Tenant hereunder, subsequent to default, the annual rent for each month of the unexpired term shall be equal to the average monthly minimum and Additional Rent paid by Tenant from the commencement of the Lease Term to the time of default, or during the preceding twelve (12) full calendar months, whichever period is shorter, adjusted, however, to include any provision herein for increases in Minimum Rent.
C. If as a result of any default by Tenant, Landlord shall make any collection efforts or a suit shall be brought for recovery of possession of the Leased Premises or for the recovery of rent or any other amount due under the provisions of this Lease, or because of the breach of any other covenant herein contained on the part of Tenant to be kept or performed, and a breach shall be established, Landlord shall be entitled to recover from Tenant all expenses actually incurred therefor, including reasonable attorney fees.
D. The parties hereto shall, and they hereby do, waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Leased Premises, and/or any claim for injury or damage.
ARTICLE XVII
RIGHT OF LANDLORD TO SELL, ASSIGN, TRANSFER,
CONVEY OR MORTGAGE
SECTION 17.01. LANDLORD'S RIGHT TO TRANSFER LEASE.
The Landlord reserves the right during the Lease Term to subject and subordinate this Lease, and Tenant covenants and agrees to execute and deliver upon demand such further instruments or agreements subjecting and subordinating this Lease to any sale, assignment, mortgage, deed of trust, transfer or conveyance; and said Tenant hereby irrevocably appoints the Landlord the attorney-in-fact of the Tenant to execute and deliver any such instrument for and in the name of Tenant. In the event said Landlord sells, assigns, transfers or conveys its interest in said premises or Lease, the Tenant herein entirely and absolutely releases and discharges said Landlord from all claims, obligations, demands, conditions, covenants, terms and provisions of this Lease.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
SECTION 18.01. NOTICES.
Whenever under this Lease a provision is made for a notice of any kind, it shall be deemed sufficient if such notice to the Tenant is in writing, addressed to the Tenant at the last known post office address of Tenant or at the Leased Premises and deposited in the mail with postage prepaid, and if such notice to the Landlord is in writing addressed to Don Witt, Inc., Don Witt, 4th & Main, P.O. Box 1517, Platte City, MO 64079, or such other address as Landlord may hereafter designate in writing and deposited in the mail with postage prepaid.
SECTION 18.02. HOLDING OVER.
In the event Tenant remains in possession of the Leased Premises after the expiration of this Lease and without the execution of a new Lease, it shall be deemed to be occupying said Leased Premises as a Tenant from month to month at a rate and charge equal to 1.5 times the amount of the Minimum Rent, as adjusted, plus any Additional Rent and any other charges due under this Lease, and subject to all of the other conditions, provisions and obligations of this Lease insofar as the same are applicable to a month to month tenancy. Nothing is herein intended by the parties to extend the term of this Lease.
SECTION 18.03. WAIVER.
The waiver by Landlord or Tenant of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition on any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rent. No covenant, term or condition of this Lease shall be deemed to have been waived by Landlord or Tenant unless such waiver shall be in writing signed by the party to be charged.
SECTION 18.04. TENANT'S DUTIES ON TERMINATION.
Upon the expiration or other termination of this Lease, Tenant shall quit and surrender to Landlord the Leased Premises, broom clean, in good order and condition, ordinary wear and tear accepted; and Tenant shall remove all of its furnishings, equipment and personal effects except any leasehold improvements which have been attached to the floor, walls or ceilings of the Leased Premises. Landlord, at Landlord's option, may retain any leasehold improvements attached to the floor, walls or ceilings as Landlord's property or may require Tenant to remove the same and restore the Leased Premises to the condition that existed at the date that Tenant took possession of the Leased Premises. Tenant's obligation to observe or perform this covenant shall survive the expiration or other termination of the term of this Lease.
SECTION 18.05. BINDING EFFECT.
The covenants, terms and agreements herein contained shall run with the premises hereby leased and bind the parties hereto, their heirs, distributees, executors, administrators, legal representatives, successors and assigns unless otherwise provided herein. The word "Tenant" shall be deemed and chosen to mean each and every person or party mentioned as a Tenant herein, be the same one or more.
SECTION 18.06. AMENDMENTS.
The terms, conditions or covenants of this Lease may be altered, waived, changed, varied or abandoned only by written instrument signed by the Landlord and Tenant.
SECTION 18.07. PARTIAL INVALIDITY.
In the event that any part of this Lease be held by any Court having jurisdiction to be void, illegal or unenforceable, the remainder of this Lease shall not be affected and shall be enforceable according to its terms.
SECTION 18.08. ACCORD AND SATISFACTION.
No payment by Tenant or receipt by Landlord of a lesser amount than the monthly rent herein stipulated shall be deemed to be other than on account of the earliest reserved rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction; and Landlord may accept such check or payment, without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy provided in this Lease.
SECTION 18.09. ENTIRE AGREEMENT.
This Lease and the exhibits, riders and amendments if any attached hereto and forming a part hereof, set forth all of the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Leased Premises and there are no covenants, promises, agreements, conditions or understandings, either oral or written, between them other than as are herein set forth.
SECTION 18.10. FORCE MAJEURE.
In the event that Landlord shall be delayed or hindered in or prevented from doing or performing any act or thing required hereunder by reason of strikes, lockouts, casualties, acts of God, labor disputes, inability to procure materials, failure of power, governmental laws or regulations, riots, insurrection, war or other cause beyond the reasonable control of such party, then such party shall not be liable or responsible for any such delays, and the doing or performing of such act or thing shall be extended for the period of the delay.
SECTION 18.11. CAPTIONS.
The captions, section numbers and article numbers appearing in this Lease are for convenience only, and do not limit, construe or describe the scope or intent of such sections or articles of this Lease, nor in any way affect this Lease.
SECTION 18.12. NO SOLICITATION.
Tenant and Tenant's employees and agents shall not solicit business in the parking areas or other common areas, nor shall Tenant distribute any handbills or other advertising matter in automobiles parked in the parking area or in the common areas.
SECTION 18.13. WAIVER OF JURY TRIAL.
The parties hereto shall, and they hereby do, waive trial by jury in any action, proceeding or counterclaim by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Lease, Premises and/or any claim for injury or damage.
ARTICLE XIX
COMMON AREAS, CONTROL AND MAINTENANCE COSTS
SECTION 19.01. COMMON AREAS.
All common areas shall at all times be subject to the exclusive control and management of Landlord. Landlord shall have the right, from time to time, to establish (provided Landlord shall have provided Tenant a copy of said rules and regulations), modify and enforce reasonable rules and regulations with respect to all common areas. Tenant agrees to abide by and conform with such rules and regulations; to cause its concessionaires and suppliers, officers, agents, employees and independent contractors so to abide and conform; and to use its best efforts to cause its customers, invitees and licensees to abide and conform. Landlord will operate and maintain the Common Areas in such a manner as Landlord, in its reasonable discretion, shall determine from time to time, but all at times in a manner consistent with the terms of this Lease.
SECTION 19.02. USE OF COMMON AREAS.
All Common Areas not within the Leased Premises, which Tenant shall be permitted to use and occupy, are used and occupied under a revocable license; and if the amount of Common Areas be expanded, diminished or relocated, Landlord shall not be subject to any liability, nor shall Tenant be entitled to any compensation for the diminution or abatement of rent, except as otherwise provided elsewhere herein, nor shall such expansion, diminution or relocation of the Common Areas be deemed constructive or actual eviction.
ARTICLE XX.
FURNITURE
SECTION 20.01. USE OF FURNITURE.
The Landlord is leaving for the Tenant some furniture, hereto attached as Exhibit "B", for the Tenant's use so long as the Landlord does not otherwise require it, and so long as it is cared for. Landlord shall have no obligation to replace any furniture and Tenant will either insure the furniture for its full value or will reimburse Landlord for expense for the furniture.
ARTICLE XXI.
ATTORNEY
SECTION 21.01. ATTORNEY
Don Witt has represented Tenant as its attorney in various transactions. Tenant acknowledges that it has been advised to seek independent legal advice with regard to this Lease. Tenant acknowledges that it is not relying upon, in any manner or fashion, Don Witt of the firm of Witt & Hicklin, P.C. on this matter. Tenant waives all attorney client privileges and conditions.
IN WITNESS WHEREOF, the parties have hereunto subscribed their names on the date and year provided.
Dated:______________ DON WITT, INC.
By: ___________________________________
Title:
LANDLORD
|
Dated:______________
By: ___________________________________
Title: _________________________________
TENANT
EXHIBIT "A" TO LEASE DATED JUNE , 2005
DON WITT, INC., LANDLORD AND INTEGRATED MANAGEMENT INFORMATION, INC., TENANT
TRACT 1. All that part of Block 56 in the Eastern Extension of Platte City, Platte County, Missouri, described as follows: Beginning 120 feet north of the northeast corner of the intersection of Oak and State Streets in the City of Platte City, running thence east 142 feet; thence north to the public road leading from Platte City, Missouri to Liberty, Missouri; thence with said public road, in a Northwesterly direction to its junction with said State Street; thence South to the place of beginning.
TRACT 2. Beginning at the Southwest corner of the Southeast Quarter of Section 25, Township 53, Range 35, Platte County, Missouri; thence South 89(Degree) 50' 38" East along the South line of the Southeast Quarter of said Section 25, 150.0 feet; thence North and parallel to the West line of the Southeast Quarter of said Section 25, 380.22 feet to the Northwest corner of a tract of land recorded in Book 317 at Page 89 in the Recorder's Office of Platte County, Missouri, said point being also the True Point of Beginning of the tract to be herein described; thence continuing North 19.78 feet to the Southwest corner of a tract of land recorded in Book 88 at Page 130 in the Recorder's Office of Platte County, Missouri; thence South 89(Degree) 50' 38" East along the South line of the aforementioned tract of land recorded in Book 88 at page 130, 14.0 feet to the Southeast corner of the aforementioned tract of land recorded in Book 88 at Page 130; thence North along the East line of the aforementioned tract of land recorded in Book 88 at Page 130, 146.82 feet to a point in the Centerline of Marshall Street (Road J); thence South 48(Degree) 00' 00" East along the Centerline of said Marshall Street 310.50 feet to the most Northerly corner of a tract of land recorded in Book 231 at Page 101 of the Recorder's Office of Platte County, Missouri; thence South 16(Degree) 14' 30" West along the West line of the aforementioned tract of land recorded in Book 231 at Page 101, 128.55 feet measured, 129.35 feet by deed to the most Easterly corner of a tract of land recorded in Book 317 at Page 89 in the Recorder's Office of Platte County, Missouri; thence North 39(Degree) 22' 00" West along the Northeasterly line of the aforementioned tract of land recorded in Book 317 at Page 89, 72.44 feet measured, 73.28 feet by deed; thence North 58(Degree) 22' 00" West along the Northerly line of the aforementioned tract of land recorded in Book 317 at Page 89, 42.96 feet; thence North along the East line of the aforementioned tract of land recorded in Book 317 at Page 89, 8.43 feet; thence North 81(Degree) 38' 00" West along the North line of the aforementioned tract of land recorded in Book 317 at Page 89, 144.31 feet to the True Point of Beginning. Together with an Easement for roadway for ingress and egress appurtenant to the aforesaid premises over and upon the following described tract of land: A tract of land in the Southeast Quarter of Section 25, Township 53, Range 35, Platte County, Missouri, described as follows: beginning at the southwest corner of the Southeast Quarter of said Section 25, thence east along the south line of the southeast quarter of said section 25, 150 feet; thence North 0 degrees 03 minutes 30 seconds West along a line 150 feet from and parallel to the West line of the Southeast quarter of said Section 25, 360.0 feet to the true point of beginning of the tract to be herein described; thence North 0 degrees 03 minutes 30 seconds West 20.22 feet; thence south 81 degrees 41 minutes 30 seconds East 144.31 feet; thence South 0 degrees 03 minutes 30 seconds East 20.22 feet; thence North 81 degrees 41 minutes 30 seconds West 144.31 feet to the true point of beginning of the easement tract.
TRACT 3. All that part of Block 56 of the Eastern Extension of Platte City,
Missouri according to the recorded plat thereof and also all that part of a 14.0
foot strip lying East of and adjacent to said Block 56 in the Southeast Quarter
of Section 25, Township 53, Range 35, being bounded and described as follows:
Beginning at a point 120.0 feet North of the Southeast corner of said Block 56;
thence North 89(Degree) 50' 38" West 8.0 feet; thence South 48(Degree) 00' 00"
East 29.60 feet; thence North 0(Degree) 00' 00" East 19.66 feet to a point on
the Southerly right-of-way line of Marshall Street (Road J); thence North
48(Degree) 00' 00" West along said right-of-way 0.13 feet; thence North
89(Degree) 50' 38" West 13.90 feet to the point of beginning. Subject to any and
all easements and restrictions of record.
TRACT 4. All of the North 44 feet of the following described tract of land: All that part of the Eastern Extension to the limits of Platte City, Platte County, Missouri, described as follows: beginning at the Northeast corner of Oak (now known as Ferrel Street) and State Streets to Platte City and running thence East 150 feet; thence North 120 feet; thence West 150 feet; thence South 120 feet to the beginning and being located in Section 25, Township 53, Range 35.
ALSO all of the North 44 feet of a tract 14 feet wide abutting and lying on the
East side of the tract above described; TOGETHER with a perpetual right of way
to Oak Street (now know as Ferrel Street) over the South 76 feet of said 14 foot
tract. EXCEPT all that part of Block 56 of the Eastern Extension of Platte City,
Missouri, according to the recorded plat thereof and also that part of a 14.0
foot strip lying East of and adjacent to said Block 56 in the Southeast Quarter
of Section 25, Township 53, Range 35, being bounded and described as follows:
Beginning at a point 120.0 feet North of the Southeast corner of corner of said
Block 56; thence North 89 degrees 50'38" West 8.0 feet; thence South 48 degrees
00'00" East 29.60 feet; thence North 0 degrees 00'00" East 19.66 feet to a point
on the Southerly right of way line of Marshall Street (Road J); thence North 48
degrees 00'00" West along said right of way 0.13 feet; thence North 89 degrees
50'38" West 13.90 feet to the point of beginning.
EXHIBIT "B" TO LEASE DATED JUNE 27, 2005
DON WITT, INC., LANDLORD AND INTEGRATED MANAGEMENT INFORMATION, INC., TENANT
FURNITURE
Total phone system
Refrigerator
Storage cabinet in Lynn's office
Sweeper
Large Conference Room
10 room chairs
Conference table
Keith's office
small table
Library
7 chairs
Library conference table
Don's office
Desk
Sofa
side tables
Bob's Office
Desk
Sofa
3 small tables
Marge's
Desk
Small Table
Filing Cabinet
Back table
Lynn's
Desk
Jen's
Desk
2 small tables
Kitchen
5 red chairs
Reception Area
8 chairs
coffee table
small table
Small Conf. Room
6 blue chairs
Table
Small table
Brenna's office
Desk
EMPLOYMENT AGREEMENT
This Agreement ("Agreement") made this 1st day of January, 2006, by and between Integrated Management Information, Inc. ("IMI"), a Delaware corporation having its principal place of business at 601 4th Street, Platte City, MO 64079, and John Saunders ("Employee"), of 2460 S.E. Pharis Rd., Dearborn, MO 64439, (collectively the "Parties").
WHEREAS, IMI is engaged in the business of developing and market ing software for animal identification and traceability in the beef cattle industry; and
WHEREAS, IMI desires to employ Employee on the terms and conditions set out in this Agreement; and
WHEREAS, Employee is desirous of being employed by IMI on the terms and conditions set out in this Agreement;
Therefore, in consideration of the mutual promises herein contained and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties hereto mutually and voluntarily covenant and agree as follows:
1. TERM OF EMPLOYMENT. IMI agrees to employ the Employee and the Employee hereby accepts employment with IMI as its President and Chief Executive Officer for a period of one (1) year beginning on the 1st day of January 2006 provided however that this Agreement may be terminated earlier as provided for in Article 6. The term shall automatically renew for one year on each anniversary of the date of execution of this agreement unless either party shall give notice of non-renewal 60 days prior to the renewal date.
2. COMPENSATION OF EMPLOYEE. As compensation for the services rendered by Employee under this Agreement, the Employee shall be entitled to receive a salary of $90,000 per year, payable semi-monthly on the 15th and last day of each month.
3. COMPLIANCE OF RULES. The Employee at all times during the performance of this Agreement shall strictly adhere to and obey all rules and regulations now in effect, or subsequently promulgated, governing the conduct of Employees of IMI.
4. SATISFACTORY PERFORMANCE OF DUTIES. The employment of the Employee shall continue only as long as the services rendered by the Employee are satisfactory to IMI regardless of any other provision contained in this Agreement. IMI shall be the sole judge as to whether the services of the Employee are satisfactory.
5. BUSINESS EXPENSES. It is acknowledged by the Parties that the Employee in connection with the services to be performed by Employee pursuant to the terms of this Agreement will be required to make payments for travel, entertainment of customers and similar business expenses. Employee shall be reimbursed for all business expenses incurred by the Employee in the performance of his services under this contract.
6. TERMINATION OF EMPLOYMENT. This Agreement shall terminate and all obligations of the Employer under this Agreement shall cease on the occurrence of any one of the following events:
a. The death of the Employee
b. Express termination by IMI and any time after the Employee's
failure to perform duties specified in this Agreement for
whatever cause for a continuous period of more than ten days.
c. Discontinuation of the Employer's business operations.
d. The willful breach of duty, the habitual neglect, or the
continued incapacity on the part of the Employee to perform
his/her duties unless waived by the Employer.
e. The willful or continuing breach of the obligations of the
Employer to the Employee under this Agreement unless waived by
the Employee.
7. EFFECT OF TERMINATION ON COMPENSATION. In the event of the termination of this Agreement, prior to the completion of the term of the employment specified in Article I, Employee shall be entitled to the compensation earned by the Employee to the date of termination as provided for in this Agreement computed prorata up to and including that date. The Employee shall be entitled to no further compensation as of the date of termination.
8. UNAUTHORIZED DISCLOSURE OF INFORMATION. If it appears that Employee has disclosed (or has threatened to disclose) Information in violation of this Agreement, IMI shall be entitled to an injunction to restrain Employee from disclosing, in whole or in part, such Information, or from providing any services to any party to whom such Information has been disclosed or may be disclosed. IMI shall not be prohibited by this provision from pursuing other remedies, including a claim for losses and damages.
9. CHANGE IN CONTROL. In the event of a change in control resulting from the sale, merger or other disposition of the company (other than the company going public or selling additional shares in a public or private offering) the Employee shall be paid a lump sum payment in an amount equal to 200% of the Employee's annual salary on the date of sale, merger or other disposition of the company.
10.1NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. Employee understands and agrees that his employment by the Company creates a relationship of confidence and trust between himself and the Company with respect to Confidential Information (as defined below). Employee recognizes that he will have access to and knowledge of Confidential Information. Employee will not, during or after the term of his employment by the Company, in whole or in part, disclose such Confidential Information to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever, nor shall he make use of any such Confidential Information for his own purposes or for the purposes of others; provided, however, that nothing in this Article shall be construed to prohibit the disclosure of such Confidential Information by the Employee (i) to another officer, director, employee or agent of the Company; (ii) as is reasonably necessary for the performance of his duties and responsibilities under this Agreement; or (iii) as otherwise required by law. If Employee is required by law to disclose "Confidential Information", Employee shall notify the Company, in writing, of the nature of such disclosure and the Confidential Information to be disclosed, as soon as is possible and/or practical, and permit the Company the opportunity to contest or limit such disclosure.
10.2 CONFIDENTIAL INFORMATION DEFINED. The term "Confidential Information" shall mean and include any and all records, computer programs, data, patent applications, trade secrets, customer lists, customer databases, video programs and programming, proprietary information, technology, pricing policies, financial information, methods of doing business, policy and/or procedure manuals, training and recruiting procedures, accounting procedures, the status and content of the Company's contracts with its customers, the Company's business philosophy, and servicing methods and techniques at any time used, developed, or investigated by the company, before or during Employee's tenure of employment, or other information of any kind expressed or recorded on any medium arising out of, concerning, or acquired in connection with the research, development, commercialization and other activities of the Company; but "Confidential Information" does not include information (i) generally known or available in the industry, through no fault of Employee; or (ii) available from a third party without violation of any duty of confidentialty by Employee or others.
10.3 DELIVERY OF MATERIALS. Employee further agrees to deliver to the Company at the termination of his employment, or at any other time upon request by the Company, all correspondence, memoranda, notes, records (including computer records and data), drawings, sketches, plans, customer lists, and other documents, which are made, composed, or received by Employee, solely or jointly with others, during the term of his employement (collectively, the "Documents"), and which are in Employee's possession, custody, or control at such date and which are related in any manner to the past, present or anticipated business of the Company.
11. NON-COMPETE. Employee will not, during the period of this Agreement or of
his engagement with IMI whichever period is longer, and for a period of one
(1) year immediately following the termination of this Agreement or his
engagement, whichever is longer, for any reason whatsoever, directly or
indirectly, for himself or on behalf of or in conjunction with any other
person, persons, company, partnership, corporation, or business of whatever
nature:
i. Engage in developing or marketing software for animal indentification and traceability in the beef cattle industry within five-hundred (500) miles of the home office of IMI or any of its affiliates, to which Employee has provided services pursuant to this Agreement, or any present location representing a permanent or semi-permanent (at least six (6) months of operation) facility of IMI or any of such affiliates wherein IMI or any of such affiliates have performed services, whether such services were performed as principal, agent, trustee or through the agency of any cooperation, partnership, association, agent, agency or business of whatever nature.
ii. Call upon any present or past customer of IMI or any of such affiliates (including, but not limited to, any customers obtained for IMI or any of such affiliates by Employee) for the purpose of soliciting or selling any products or services in competition with those of IMI;
iii. Call upon any employee of IMI or any of such affiliates for the purpose or with the intent of enticing them away from or out of the employ of IMI or any of such affiliates for any reason whatsoever; and
iv. be the owner of more than one (1%) of the outstanding capital stock of any corporation or any officer, director or employee of any corporation (other than IMI or a corporation affiliated with IMI), or a member or employee of any partnership, or an owner or employee of any other business which is engaged in any business which competes with IMI, within five-hundred (500) miles of the home office of IMI or any of such affiliates or any present permanent or semi permanent facility of any of IMI or any such affiliates.
Notwithstanding the preceding, Employee may:
(i) continue any activity which, at the time Employee commenced such activity did not violate this Agreement and
(ii) provide any and all services requested by companies affiliated with IMI.
Because of the difficulty of measuring economic losses to IMI as a result of his breach of the foregoing covenant and because of the immediate and irreparable damage that would be caused to IMI for which it would have no other adequate remedy, Employee agrees that the foregoing covenant may be enforced by IMI in the event of breach by him by injunctions and restraining orders.
It is agreed by the parties that the foregoing covenants in this Section 10 impose a reasonable restraint on Employee in light of the activities and business of IMI on the date of the execution of this Agreement and the future plans of IMI; but it is also the intent of IMI and Employee that such covenants be construed and enforced in accordance with the activities and business of IMI on the date of the termination the employment of Employee.
The covenants in this Section 10 are severable and separate and the unenforceability of any specific covenant shall not affect the provisions of any other covenant Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which the court deems reasonable and the Agreement shall thereby be reformed.
All of the covenants in this Section shall be construed as an agreement independent of any other provision in this Agreement and the existence of any claim or cause of action of Employee against IMI, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by IMI of such covenants. It is specifically agreed that the period of two (2) years stated at the beginning of this Section 10, during which the agreements and covenants of Employee made in this Section 10 shall be effective, shall be computed by excluding from such computation any time during which Employee is in violation of any provision of this Section 10 and any time during which there is pending in any court of competent jurisdiction any action (including any appeal from any final judgment) brought by any person, whether or not a party to this Agreement, in which action IMI seeks to enforce the agreements and covenants of Employee or in which any person contests the validity of such agreements and covenants or their unenforceability or seeks to avoid their performance or enforcement.
12. OTHER BENEFITS. Employee shall also be entitled to the following: o health insurance o ________ weeks per year of paid vacation any other benefits as provided in accordance with IMI's policies in effect from time to time.
13. RETURN OF RECORDS. Upon termination of this Agreement, Employee shall deliver all property (including keys, records, notes, data, memorandum, models, and equipment) that is in the Employee's possession or under the Employee's control which is IMI's property or related to IMI's business.
14. NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered when delivered in person or deposited in the United States mail, postage paid, addressed as follows:
IMI:
Integrated Management Information, Inc..
601 4th Street
Platte City, MO 64079
Employee:
John Saunders
2460 S.E. Pharis Rd
Dearborn, MI 64439
Such addresses may be changed from time to time by either party by providing written notice in the manner set forth above.
15. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written. This Agreement supersedes any prior written oral agreements between the parties.
16. AMENDMENT. This Agreement may be modified or amended, if the amendment is made in writing and is signed by both parties.
17 SEVERABILITY. If any provisions of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid or enforceable, then such provision shall be deemed o be written, construed, and enforced as so limited.
18. WAIVER . The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.
19. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Missouri.
Executed this __________________ day of March 2006, but effective as of January
1, 2006.
IMI:
Integrated Management Information, Inc..
By: _________________________________________________
Its: _______________________________________________
|
Employee:
By: ________________________________________________
John Saunders
EMPLOYMENT AGREEMENT
This Agreement ("Agreement") made this 1st day of January, 2006, by and between Integrated Management Information, Inc. ("IMI"), a Delaware corporation having its principal place of business at 601 4th Street, Platte City, MO 64079, and Leann Saunders ("Employee"), of 2460 S.E. Pharis Rd., Dearborn, MO 64439, (collectively the "Parties").
WHEREAS, IMI is engaged in the business of developing and marketing software for animal identification and traceability in the beef cattle industry; and
WHEREAS, IMI desires to employ Employee on the terms and conditions set out in this Agreement; and
WHEREAS, Employee is desirous of being employed by IMI on the terms and conditions set out in this Agreement;
Therefore, in consideration of the mutual promises herein contained and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties hereto mutually and voluntarily covenant and agree as follows:
1. TERM OF EMPLOYMENT. IMI agrees to employ the Employee and the Employee hereby accepts employment with IMI as its Vice President of Quality Control for a period of one (1) year beginning on the 1st day of January 2006 provided however that this Agreement may be terminated earlier as provided for in Article 6. The term shall automatically renew for one year on each anniversary of the date of execution of this agreement unless either party shall give notice of non-renewal 60 days prior to the renewal date.
2. COMPENSATION OF EMPLOYEE. As compensation for the services rendered by Employee under this Agreement, the Employee shall be entitled to receive a salary of $90,000 per year, payable semi-monthly on the 15th and last day of each month.
3. COMPLIANCE OF RULES. The Employee at all times during the performance of this Agreement shall strictly adhere to and obey all rules and regulations now in effect, or subsequently promulgated, governing the conduct of Employees of IMI.
4. SATISFACTORY PERFORMANCE OF DUTIES. The employment of the Employee shall continue only as long as the services rendered by the Employee are satisfactory to IMI regardless of any other provision contained in this Agreement. IMI shall be the sole judge as to whether the services of the Employee are satisfactory.
5. BUSINESS EXPENSES. It is acknowledged by the Parties that the Employee in connection with the services to be performed by Employee pursuant to the terms of this Agreement will be required to make payments for travel, entertainment of customers and similar business expenses. Employee shall be reimbursed for all business expenses incurred by the Employee in the performance of his services under this contract.
6. TERMINATION OF EMPLOYMENT. This Agreement shall terminate and all obligations of the Employer under this Agreement shall cease on the occurrence of any one of the following events:
a. The death of the Employee
b. Express termination by IMI and any time after the Employee's
failure to perform duties specified in this Agreement for
whatever cause for a continuous period of more than ten days.
c. Discontinuation of the Employer's business operations.
d. The willful breach of duty, the habitual neglect, or the
continued incapacity on the part of the Employee to perform
his/her duties unless waived by the Employer.
e. The willful or continuing breach of the obligations of the
Employer to the Employee under this Agreement unless waived by
the Employee.
7. EFFECT OF TERMINATION ON COMPENSATION. In the event of the termination of this Agreement, prior to the completion of the term of the employment specified in Article I, Employee shall be entitled to the compensation earned by the Employee to the date of termination as provided for in this Agreement computed prorata up to and including that date. The Employee shall be entitled to no further compensation as of the date of termination.
8. UNAUTHORIZED DISCLOSURE OF INFORMATION. If it appears that Employee has disclosed (or has threatened to disclose) Information in violation of this Agreement, IMI shall be entitled to an injunction to restrain Employee from disclosing, in whole or in part, such Information, or from providing any services to any party to whom such Information has been disclosed or may be disclosed. IMI shall not be prohibited by this provision from pursuing other remedies, including a claim for losses and damages.
9. CHANGE IN CONTROL. In the event of a change in control resulting from the sale, merger or other disposition of the company (other than the company going public or selling additional shares in a public or private offering) the Employee shall be paid a lump sum payment in an amount equal to 200% of the Employee's annual salary on the date of sale, merger or other disposition of the company.
10.1 NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. Employee understands and agrees that his employment by the Company creates a relationship of confidence and trust between himself and the Company with respect to Confidential Information (as defined below). Employee recognizes that he will have access to and knowledge of Confidential Information. Employee will not, during or after the term of his employment by the Company, in whole or in part, disclose such Confidential Information to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever, nor shall he make use of any such Confidential Information for his own purposes or for the purposes of others; provided, however, that nothing in this Article shall be construed to prohibit the disclosure of such Confidential Information by the Employee (i) to another officer, director, employee or agent of the Company; (ii) as is reasonably necessary for the performance of his duties and responsibilities under this Agreement; or (iii) as otherwise required by law. If Employee is required by law to disclose "Confidential Information", Employee shall notify the Company, in writing, of the nature of such disclosure and the Confidential Information to be disclosed, as soon as is possible and/or practical, and permit the Company the opportunity to contest or limit such disclosure.
10.2 CONFIDENTIAL INFORMATION DEFINED. The term "Confidential Information" shall mean and include any and all records, computer programs, data, patent applications, trade secrets, customer lists, customer databases, video programs and programming, proprietary information, technology, pricing policies, financial information, methods of doing business, policy and/or procedure manuals, training and recruiting procedures, accounting procedures, the status and content of the Company's contracts with its customers, the Company's business philosophy, and servicing methods and techniques at any time used, developed, or investigated by the company, before or during Employee's tenure of employment, or other information of any kind expressed or recorded on any medium arising out of, concerning, or acquired in connection with the research, development, commercialization and other activities of the Company; but "Confidential Information" does not include information (i) generally known or available in the industry, through no fault of Employee; or (ii) available from a third party without violation of any duty of confidentialty by Employee or others.
10.3 DELIVERY OF MATERIALS. Employee further agrees to deliver to the Company at the termination of his employment, or at any other time upon request by the Company, all correspondence, memoranda, notes, records (including computer records and data), drawings, sketches, plans, customer lists, and other documents, which are made, composed, or received by Employee, solely or jointly with others, during the term of his employement (collectively, the "Documents"), and which are in Employee's possession, custody, or control at such date and which are related in any manner to the past, present or anticipated business of the Company.
11. NON-COMPETE. Employee will not, during the period of this Agreement or of
his engagement with IMI whichever period is longer, and for a period of one
(1) year immediately following the termination of this Agreement or his
engagement, whichever is longer, for any reason whatsoever, directly or
indirectly, for himself or on behalf of or in conjunction with any other
person, persons, company, partnership, corporation, or business of whatever
nature:
i. Engage in developing or marketing software for animal indentification and traceability in the beef cattle industry within five-hundred (500) miles of the home office of IMI or any of its affiliates, to which Employee has provided services pursuant to this Agreement, or any present location representing a permanent or semi-permanent (at least six (6) months of operation) facility of IMI or any of such affiliates wherein IMI or any of such affiliates have performed services, whether such services were performed as principal, agent, trustee or through the agency of any cooperation, partnership, association, agent, agency or business of whatever nature.
ii. Call upon any present or past customer of IMI or any of such affiliates (including, but not limited to, any customers obtained for IMI or any of such affiliates by Employee) for the purpose of soliciting or selling any products or services in competition with those of IMI;
iii. Call upon any employee of IMI or any of such affiliates for the purpose or with the intent of enticing them away from or out of the employ of IMI or any of such affiliates for any reason whatsoever; and
iv. be the owner of more than one (1%) of the outstanding capital stock of any corporation or any officer, director or employee of any corporation (other than IMI or a corporation affiliated with IMI), or a member or employee of any partnership, or an owner or employee of any other business which is engaged in any business which competes with IMI, within five-hundred (500) miles of the home office of IMI or any of such affiliates or any present permanent or semi permanent facility of any of IMI or any such affiliates.
Notwithstanding the preceding, Employee may:
(i) continue any activity which, at the time Employee commenced such activity did not violate this Agreement and
(ii) provide any and all services requested by companies affiliated with IMI.
Because of the difficulty of measuring economic losses to IMI as a result of his breach of the foregoing covenant and because of the immediate and irreparable damage that would be caused to IMI for which it would have no other adequate remedy, Employee agrees that the foregoing covenant may be enforced by IMI in the event of breach by him by injunctions and restraining orders.
It is agreed by the parties that the foregoing covenants in this Section 10 impose a reasonable restraint on Employee in light of the activities and business of IMI on the date of the execution of this Agreement and the future plans of IMI; but it is also the intent of IMI and Employee that such covenants be construed and enforced in accordance with the activities and business of IMI on the date of the termination the employment of Employee.
The covenants in this Section 10 are severable and separate and the unenforceability of any specific covenant shall not affect the provisions of any other covenant Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which the court deems reasonable and the Agreement shall thereby be reformed.
All of the covenants in this Section shall be construed as an agreement independent of any other provision in this Agreement and the existence of any claim or cause of action of Employee against IMI, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by IMI of such covenants. It is specifically agreed that the period of two (2) years stated at the beginning of this Section 10, during which the agreements and covenants of Employee made in this Section 10 shall be effective, shall be computed by excluding from such computation any time during which Employee is in violation of any provision of this Section 10 and any time during which there is pending in any court of competent jurisdiction any action (including any appeal from any final judgment) brought by any person, whether or not a party to this Agreement, in which action IMI seeks to enforce the agreements and covenants of Employee or in which any person contests the validity of such agreements and covenants or their unenforceability or seeks to avoid their performance or enforcement.
12. OTHER BENEFITS. Employee shall also be entitled to the following: o health insurance o ________ weeks per year of paid vacation any other benefits as provided in accordance with IMI's policies in effect from time to time.
13. RETURN OF RECORDS. Upon termination of this Agreement, Employee shall deliver all property (including keys, records, notes, data, memorandum, models, and equipment) that is in the Employee's possession or under the Employee's control which is IMI's property or related to IMI's business.
14. NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered when delivered in person or deposited in the United States mail, postage paid, addressed as follows:
IMI:
Integrated Management Information, Inc..
601 4th Street
Platte City, MO 64079
Employee:
Leann Saunders
2460 S.E. Pharis Rd
Dearborn, MI 64439
Such addresses may be changed from time to time by either party by providing written notice in the manner set forth above.
15. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written. This Agreement supersedes any prior written oral agreements between the parties.
16. AMENDMENT. This Agreement may be modified or amended, if the amendment is made in writing and is signed by both parties.
17 SEVERABILITY. If any provisions of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid or enforceable, then such provision shall be deemed o be written, construed, and enforced as so limited.
18. WAIVER . The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.
19. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Missouri.
Executed this __________________ day of March 2006, but effective as of January
1, 2006.
IMI:
Integrated Management Information, Inc..
By: _______________________________________________
Its: _____________________________________________
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Employee:
By: ______________________________________________
Leann Saunders
EMPLOYMENT AGREEMENT
This Agreement ("Agreement") made this 1st day of February, 2006, by and between Integrated Management Information, Inc. ("IMI"), a Delaware corporation having its principal place of business at 601 4th Street, Platte City, MO 64079, and Mark McGregor("Employee"), of 4160 East Willow Creek Road, Castle Rock, Colorado 80104, (collectively the "Parties").
WHEREAS, IMI is engaged in the business of developing and marking software for animal identification and traceability in the beef cattle industry; and
WHEREAS, IMI desires to employ Employee on the terms and conditions set out in this Agreement; and
WHEREAS, Employee is desirous of being employed by IMI on the terms and conditions set out in this Agreement;
Therefore, in consideration of the mutual promises herein contained and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties hereto mutually and voluntarily covenant and agree as follows:
1. TERM OF EMPLOYMENT. IMI agrees to employ the Employee and the Employee hereby accepts employment with IMI as its Chief Financial Officer for a period of one (1) year beginning on the 1st day of February 2006 provided however that this Agreement may be terminated earlier as provided for in Article 6. The term shall automatically renew for one year on each anniversary of the date of execution of this agreement unless either party shall give notice of non-renewal 60 days prior to the renewal date.
2. COMPENSATION OF EMPLOYEE. As compensation for the services rendered by Employee under this Agreement, the Employee shall be entitled to receive a salary of $85,000 per year, payable semi-monthly on the 15th and last day of each month.
3. STOCK OPTIONS. As additional compensation for the services to be rendered by Employee under this Agreement, IMI hereby grants 1,650,000 options to the Employee for the purchase of IMI's common stock on the following terms and conditions.
------------------------ ------------------ --------------------- --------------
Number of shares Share price Vesting date Expiration date
---------------- ----------- ------------ --------------
------------------------ ------------------ --------------------- --------------
300,000 $0.8333 2-01-06 2-01-09
------------------------ ------------------ --------------------- --------------
300,000 0.8333 2-01-06 2-01-09
------------------------ ------------------ --------------------- --------------
300,000 0.8333 1-01-07 1-01-10
------------------------ ------------------ --------------------- --------------
300,000 1.1666 4-01-07 4-01-10
------------------------ ------------------ --------------------- --------------
450,000 1.1666 7-01-07 7-01-10
------------------------ ------------------ --------------------- --------------
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In the event of a change in control resulting from the sale, merger or other disposition of the company, (other than the company going public or selling additional shares in a public or private offering) all invested options shall vest as of the date of sale, merger or other deposition of the company.
4. COMPLIANCE OF RULES. The Employee at all times during the performance of this Agreement shall strictly adhere to and obey all rules and regulations now in effect, or subsequently promulgated, governing the conduct of Employees of IMI.
5. SATISFACTORY PERFORMANCE OF DUTIES. The employment of the Employee shall continue only as long as the services rendered by the Employee are satisfactory to IMI regardless of any other provision contained in this Agreement. IMI shall be the sole judge as to whether the services of the Employee are satisfactory.
6. BUSINESS EXPENSES. It is acknowledged by the Parties that the Employee in connection with the services to be performed by Employee pursuant to the terms of this Agreement will be required to make payments for travel, entertainment of customers and similar business expenses. Employee shall be reimbursed for all business expenses incurred by the Employee in the performance of his services under this contract.
7. TERMINATION OF EMPLOYMENT. This Agreement shall terminate and all obligations of the Employer under this Agreement shall cease on the occurrence of any one of the following events:
a. The death of the Employee
b. Express termination by IMI and any time after the Employee's
failure to perform duties specified in this Agreement for
whatever cause for a continuous period of more than ten days.
c. Discontinuation of the Employer's business operations.
d. The willful breach of duty, the habitual neglect, or the
continued incapacity on the part of the Employee to perform
his/her duties unless waived by the Employer.
e. The willful or continuing breach of the obligations of the
Employer to the Employee under this Agreement unless waived by
the Employee.
8. EFFECT OF TERMINATION ON COMPENSATION. In the event of the termination of this Agreement, prior to the completion of the term of the employment specified in Article I, Employee shall be entitled to the compensation earned by the Employee to the date of termination as provided for in this Agreement computed prorata up to and including that date. The Employee shall be entitled to no further compensation as of the date of termination.
9. CHANGE IN CONTROL. In the event of a change in control resulting from the sale, merger or other disposition of the company (other than the company going public or selling additional shares in a public or private offering) the Employee shall be paid a lump sum payment in an amount equal to 200% of the Employee's annual salary on the date of sale, merger or other disposition of the company.
10.1NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. Employee understands and agrees that his employment by the Company creates a relationship of confidence and trust between himself and the Company with respect to Confidential Information (as defined below). Employee recognizes that he will have access to and knowledge of Confidential Information. Employee will not, during or after the term of his employment by the Company, in whole or in part, disclose such Confidential Information to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever, nor shall he make use of any such Confidential Information for his own purposes or for the purposes of others; provided, however, that nothing in this Article shall be construed to prohibit the disclosure of such Confidential Information by the Employee (i) to another officer, director, employee or agent of the Company; (ii) as is reasonably necessary for the performance of his duties and responsibilities under this Agreement; or (iii) as otherwise required by law. If Employee is required by law to disclose "Confidential Information", Employee shall notify the Company, in writing, of the nature of such disclosure and the Confidential Information to be disclosed, as soon as is possible and/or practical, and permit the Company the opportunity to contest or limit such disclosure.
10.2 CONFIDENTIAL INFORMATION DEFINED. The term "Confidential Information" shall mean and include any and all records, computer programs, data, patent applications, trade secrets, customer lists, customer databases, video programs and programming, proprietary information, technology, pricing policies, financial information, methods of doing business, policy and/or procedure manuals, training and recruiting procedures, accounting procedures, the status and content of the Company's contracts with its customers, the Company's business philosophy, and servicing methods and techniques at any time used, developed, or investigated by the company, before or during Employee's tenure of employment, or other information of any kind expressed or recorded on any medium arising out of, concerning, or acquired in connection with the research, development, commercialization and other activities of the Company; but "Confidential Information" does not include information (i) generally known or available in the industry, through no fault of Employee; or (ii) available from a third party without violation of any duty of confidentialty by Employee or others.
10.3 DELIVERY OF MATERIALS. Employee further agrees to deliver to the Company at the termination of his employment, or at any other time upon request by the Company, all correspondence, memoranda, notes, records (including computer records and data), drawings, sketches, plans, customer lists, and other documents, which are made, composed, or received by Employee, solely or jointly with others, during the term of his employement (collectively, the "Documents"), and which are in Employee's possession, custody, or control at such date and which are related in any manner to the past, present or anticipated business of the Company.
11. UNAUTHORIZED DISCLOSURE OF INFORMATION. If it appears that Employee has disclosed (or has threatened to disclose) Information in violation of this Agreement, IMI shall be entitled to an injunction to restrain Employee from disclosing, in whole or in part, such Information, or from providing any services to any party to whom such Information has been disclosed or may be disclosed. IMI shall not be prohibited by this provision from pursuing other remedies, including a claim for losses and damages.
12. CONFIDENTIALITY AFTER TERMINATION OF EMPLOYMENT. The confidentiality provisions of this Agreement shall remain in full force and effect for a thirty-day period after the termination of Employee's employment.
13. NON-COMPETE. Employee will not, during the period of this Agreement or of
his engagement with IMI whichever period is longer, and for a period of two
(2) years immediately following the termination of this Agreement or his
engagement, whichever is longer, for any reason whatsoever, directly or
indirectly, for himself or on behalf of or in conjunction with any other
person, persons, company, partnership, corporation, or business of whatever
nature:
i. Engage in developing or marketing software for animal indentification and traceability in the beef cattle industry within five-hundred (500) miles of the home office of IMI or any of its affiliates, to which Employee has provided services pursuant to this Agreement, or any present location representing a permanent or semi-permanent (at least six (6) months of operation) facility of IMI or any of such affiliates wherein IMI or any of such affiliates have performed services, whether such services were performed as principal, agent, trustee or through the agency of any cooperation, partnership, association, agent, agency or business of whatever nature.
ii. Call upon any present or past customer of IMI or any of such affiliates (including, but not limited to, any customers obtained for IMI or any of such affiliates by Employee) for the purpose of soliciting or selling any products or services in competition with those of IMI;
iii. Call upon any employee of IMI or any of such affiliates for the purpose or with the intent of enticing them away from or out of the employ of IMI or any of such affiliates for any reason whatsoever; and
iv. be the owner of more than one (1%) of the outstanding capital stock of any corporation or any officer, director or employee of any corporation (other than IMI or a corporation affiliated with IMI), or a member or employee of any partnership, or an owner or employee of any other business which is engaged in any business which competes with IMI, within five-hundred (500) miles of the home office of IMI or any of such affiliates or any present permanent or semi permanent facility of any of IMI or any such affiliates.
Notwithstanding the preceding, Employee may:
(i) continue any activity which, at the time Employee commenced such activity did not violate this Agreement and
(ii) provide any and all services requested by companies affiliated with IMI.
Because of the difficulty of measuring economic losses to IMI as a result of his breach of the foregoing covenant and because of the immediate and irreparable damage that would be caused to IMI for which it would have no other adequate remedy, Employee agrees that the foregoing covenant may be enforced by IMI in the event of breach by him by injunctions and restraining orders.
It is agreed by the parties that the foregoing covenants in this Section 10 impose a reasonable restraint on Employee in light of the activities and business of IMI on the date of the execution of this Agreement and the future plans of IMI; but it is also the intent of IMI and Employee that such covenants be construed and enforced in accordance with the activities and business of IMI on the date of the termination the employment of Employee.
The covenants in this Section 10 are severable and separate and the unenforceability of any specific covenant shall not affect the provisions of any other covenant Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which the court deems reasonable and the Agreement shall thereby be reformed.
All of the covenants in this Section shall be construed as an agreement
independent of any other provision in this Agreement and the existence of
any claim or cause of action of Employee against IMI, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the
enforcement by IMI of such covenants. It is specifically agreed that the
period of two (2) years stated at the beginning of this Section 10, during
which the agreements and covenants of Employee made in this Section 10
shall be effective, shall be computed by excluding from such computation
any time during which Employee is in violation of any provision of this
Section 10 and any time during which there is pending in any court of
competent jurisdiction any action (including any appeal from any final
judgment) brought by any person, whether or not a party to this Agreement,
in which action IMI seeks to enforce the agreements and covenants of
Employee or in which any person contests the validity of such agreements
and covenants or their unenforceability or seeks to avoid their performance
or enforcement.
14. OTHER BENEFITS. Employee shall also be entitled to the following: o health insurance o ________ weeks per year of paid vacation any other benefits as provided in accordance with IMI's policies in effect from time to time.
15. RETURN OF RECORDS. Upon termination of this Agreement, Employee shall deliver all property (including keys, records, notes, data, memorandum, models, and equipment) that is in the Employee's possession or under the Employee's control which is IMI's property or related to IMI's business.
16. NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered when delivered in person or deposited in the United States mail, postage paid, addressed as follows:
IMI:
Integrated Management Information, Inc..
601 4th Street
Platte City, MO 64079
Employee:
Mark McGregor
4160 East Willow Creek Road
Castle Rock, Colorado 80104
Such addresses may be changed from time to time by either party by providing written notice in the manner set forth above.
17. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written. This Agreement supersedes any prior written oral agreements between the parties.
18. AMENDMENT. This Agreement may be modified or amended, if the amendment is
made in writing and is signed by both parties.
19. SEVERABILITY. If any provisions of this Agreement shall be held to be
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invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid or enforceable, then such provision shall be deemed o be written, construed, and enforced as so limited.
20. WAIVER . The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.
21. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Missouri.
Executed this __________________ day of April 2006, but effective as of February 1, 2006.
IMI:
Integrated Management Information, Inc..
By: ____________________________________________
Its: __________________________________________
Employee:
By: ___________________________________________
Mark McGregor
Agreement for Consulting Services
This Consulting Agreement ("Agreement") is made effective as of January 1, 2006, and shall expire on June 30,2006, by and between IMI Global (hereinafter "Company") and Mark Byrne (hereinafter "Consultant").
1. Scope of Agreement. This Agreement is for the services specified in Exhibit
A. This Agreement covers the terms and conditions under which Consultant
will perform services for Company.
2. Compensation. As sole and full compensation for the Services, Company will pay Consultant the rates shown in Exhibit A. Consultant will bill Company every other week, and payments shall be due 7 days after receipt of invoices.
3. Reimbursable Expenses. Company shall reimburse Consultant for all pre-approved, reasonable expenses.
4. Independent Contractor. Consultant declares and agrees that Consultant is engaged in an independent business and will perform the services hereunder as an independent contractor of the Company, and that Consultant has and hereby retains full control of and supervision over the performance of Consultant's obligations hereunder, and matters relating to compliance with Social Security, withholding, worker's compensation, and employment taxes as applicable. Consultant has no right to any employee benefits of Company, including workers compensation benefits and consultant understands that consultant is obligated to pay Federal and State income tax on any moneys earned pursuant to this Agreement.
5. Responsibilities. With due regard to operating schedules and requirements of Company, Consultant will determine the specific time and place of performance of the Services and will have sole control over the method and manner by which Consultant provides the Services. Consultant agrees: (a) to perform all services in a professional manner and in compliance with reasonable quality standards and (b) to comply, at Consultant's own expense, with the provisions of all state, local and federal laws, regulations, ordinances, requirements and codes which are applicable to the performance of the services hereunder.
6. Law Governing Agreement. This Agreement shall be governed by the laws of the State of Missouri.
7. Trademarks or Trade Names. Consultant shall not use the trademarks, service marks, or trade names of Company or its affiliates in any advertising promotional material, except normal business references, or otherwise without express prior written permission of Company.
8. Confidential Information. Confidential Information (as defined below) shall be used by consultant only in connection with Consultant's performance of the services under this Agreement. Consultant shall not at any time, without the prior consent of Company (a) disclose to any third party any Confidential Information or (b) copy or reproduce (including electronic reproduction or copying and backup copying), in whole or in part, any Confidential Information unless or except where such disclosure is required by court or administrative order. Consultant shall return all Confidential Information and all copies thereof to Company immediately upon request by Company.
As used herein, Confidential Information includes any confidential financial, marketing, business, technical, product, client or other information, including specifically but not exclusively, information which Consultant prepared, or received in connection with performing pursuant to this Agreement, such as objective and subjective evaluations of management, business plans, business strategies, software, software evaluations, trade secrets, personnel information, marketing methods and techniques and any of the above-recited information as it relates not only to Company but to its parent, its shareholders, affiliates, subsidiaries and successors. For purposes of this Agreement, Confidential Information specifically excludes information that is generally known or becomes known in the industry (except when known based upon Consultant's actions).
9. Entire Agreement, Waivers, Amendments and Modification. This agreement constitutes the entire Agreement between Company and Consultant with respect to the subject matter of this Agreement and these provisions shall supersede or replace any conflicting or additional provisions which may be contained in any other writing, document or the like. In the event of a conflict between any provision appearing in any other writing and in this Agreement, the provisions of this Agreement shall be controlling.
10. Indemnification. Company agrees to indemnify and hold Consultant harmless for any claims, investigations, complaints, damages, liabilities costs, suits or obligations (including reasonable attorney's fees) to which Consultant may be subjected as a consequence of any action or omission by Company in the operation of its business, except for any act of Company which is the direct consequence of Consultant's negligent, gross negligent, reckless or willfully improper conduct under this Agreement.
11. Termination. Either Company or Consultant shall have the right to terminate this Agreement for any reason upon 15 days notice in writing.
CONSULTANT COMPANY
CONSULTING AGREEMENT
AGREEMENT, entered into as of the day of March, 2006, but effective as of April 1, 2005 by and between INTEGRATED MANAGEMENT INFORMATION, INC.("IMI"), a Colorado corporation, and JAY BELK("Belk").
W I T N E S S E T H:
WHEREAS, IMI is engaged in, the business of developing and marketing of consulting services and software for animal identification and tracing in the beef cattle industry;
WHEREAS, Belk has agreed to render valuable services (the "Services") to IMI in connection with the development of IMI's business and promotion of IMI to strategic investors; and
WHEREAS, in order to compensate Belk for the Services, and as inducement for providing the Services, IMI desires to evidence it's agreement to pay certain fees to Belk as described herein.
NOW, THEREFORE, for and in consideration of the foregoing and for the mutual covenants and consideration described herein, the parties hereto agree as follows:
1. Services. Belk shall assist IMI by promoting IMI in the market place by introducing IMI to key analysts and strategic investors within each of IMI's major business sectors and performing such other investor relations services as maybe reasonably necessary.
2. Consulting Fees. As consideration for Belk rendering the Services to IMI, IMI hereby agrees to pay to Belk, on the first day of each month, $3,000 in cash (the "Cash Fee"). In addition to the foregoing, Roth shall be reimbursed for all reasonable business expenses incurred in the performance of Services for IMI.
3. Term. This Agreement shall commence on April 1, 2005 and shall run for a period ending twelve months following the month that the Company's registration statement becomes effective (the "Term"). Either party hereto may terminate this Agreement without cause at any time by giving thirty (30) days advance notice in writing.
4. Representations of IMI. IMI represents to Belk that:
(a) IMI is duly authorized to enter into this Agreement and to carry out the terms set out herein and that execution of this Agreement and carrying out of the terms hereof will not breach any provision of the articles of incorporation or bylaws of the Company or any contracts to which the Company is a party.
(b) The execution of this Agreement will create a valid and binding obligation on the part of IMI enforceable in accordance with the terms hereof, except as may be limited by bankruptcy, insolvency, moratorium or similar laws.
5 Representations of Belk. Belk represents to IMI that:
(a) Belk will not disclose to any third party any proprietary information relating to the business of IMI which may come into Belk's possession in the course of rendering Services without the prior written consent of IMI and will turn over to IMI all materials of any nature relating to IMI, its services or business upon termination of this Agreement. Belk acknowledges that in the course of performing Services he will come into possession of information which is considered proprietary to IMI and Belk will use his best efforts to maintain the confidentiality of such information.
(b) The execution of this Agreement will create a valid and binding obligation on the part of Belk enforceable in accordance with the terms hereof, except as may be limited by bankruptcy, insolvency, moratorium or similar laws.
6. IMI recognizes that Belk now renders or may in the future render consulting services to other clients which may or may not conduct business and activities similar to IMI. Belk shall not be required to devote its full time and attention to the performance of its duties under this agreement, but shall devote only so much of its time and attention as shall be reasonably necessary for such purposes.
7. Belk acknowledges that it will gain knowledge of information of substantial value to IMI regarding IMI's business which is not generally known and which gives IMI an advantage over competitors who do not know or use, such information, including, but not limited to, know-how, trade secrets, techniques, designs sales and customer information and business and financial information relating to the business products services practices or techniques of IMI's plans for future products or developments ("Confidential Information"). Belk agrees to, at all times, regard and preserve such information as confidential. Belk further agrees that such Confidential Information will not be disclosed buy it to any person or entity without the prior consent of IMI.
8. Binding Effect. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal representatives, successors and assigns.
9. Indemnities. IMI shall indemnify Belk and Belk shall indemnify IMI from any liability, loss, cost or damage arising as a result of the breach of obligations of the indemnifying party under this Agreement.
10. Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be mailed first class, registered, with postage prepaid as follows:
If IMI addressed to: Integrated Management Information, Inc.
601 4th Street
Platte City, MO 64079
Attn: John Saunders
If Belk addressed to: JAY BELK
801 S. Perry #110
Castle Rock, CO 80104
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11. Costs and Expenses. Each party hereto shall responsible for its own costs and expenses incurred in connection with the execution of this Agreement.
12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Missouri.
13. Disputes. Any disputes arising among the parties with respect to this Agreement shall be settled by arbitration in accordance with the rules then in effect of the American Arbitration Association in Denver, Colorado. The prevailing party in any such disputes shall be entitled to recover all of its reasonable costs and attorneys fees incurred as a result of such dispute.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and the year first written above.
INTEGRATED MANAGEMENT INFORMATION, INC.
CONSULTING AGREEMENT
AGREEMENT, entered into as of the day of March, 2006, but effective as of April 1, 2005 by and between INTEGRATED MANAGEMENT INFORMATION, INC.("IMI"), a Colorado corporation, and J.W. ROTH ("Roth").
W I T N E S S E T H:
WHEREAS, IMI is engaged in, the business of developing and marketing of consulting services and software for animal identification and tracing in the beef cattle industry;
WHEREAS, Roth has agreed to render valuable services (the "Services") to IMI in connection with the development of IMI's business and promotion of IMI to strategic investors; and
WHEREAS, in order to compensate Roth for the Services, and as inducement for providing the Services, IMI desires to evidence it's agreement to pay certain fees to Roth as described herein.
NOW, THEREFORE, for and in consideration of the foregoing and for the mutual covenants and consideration described herein, the parties hereto agree as follows:
1. Services. Roth shall assist IMI by promoting IMI in the market place by introducing IMI to key analysts and strategic investors within each of IMI's major business sectors and performing such other investor relations services as maybe reasonably necessary.
2. Consulting Fees. As consideration for Roth rendering the Services to IMI, IMI hereby agrees to pay to Roth, on the first day of each month, $5,000 in cash (the "Cash Fee"). In addition to the foregoing, Roth shall be reimbursed for all reasonable business expenses incurred in the performance of Services for IMI.
3. Term. This Agreement shall commence on April 1, 2005 and shall run for a period ending twelve months following the month that the Company's registration statement becomes effective (the "Term"). Roth may terminate this Agreement without cause at any time by giving thirty (30) days advance notice in writing.
4. Representations of IMI. IMI represents to Roth that:
(a) IMI is duly authorized to enter into this Agreement and to carry out the terms set out herein and that execution of this Agreement and carrying out of the terms hereof will not breach any provision of the articles of incorporation or bylaws of the Company or any contracts to which the Company is a party.
(b) The execution of this Agreement will create a valid and binding obligation on the part of IMI enforceable in accordance with the terms hereof, except as may be limited by bankruptcy, insolvency, moratorium or similar laws.
5 Representations of Roth. Roth represents to IMI that:
(a) Roth will not disclose to any third party any proprietary information relating to the business of IMI which may come into Roth's possession in the course of rendering Services without the prior written consent of IMI and will turn over to IMI all materials of any nature relating to IMI, its services or business upon termination of this Agreement. Roth acknowledges that in the course of performing Services he will come into possession of information which is considered proprietary to IMI and Roth will use his best efforts to maintain the confidentiality of such information.
(b) The execution of this Agreement will create a valid and binding obligation on the part of Roth enforceable in accordance with the terms hereof, except as may be limited by bankruptcy, insolvency, moratorium or similar laws.
6. IMI recognizes that Roth now renders or may in the future render consulting services to other clients which may or may not conduct business and activities similar to IMI. Roth shall not be required to devote its full time and attention to the performance of its duties under this agreement, but shall devote only so much of its time and attention as shall be reasonably necessary for such purposes.
7. Roth acknowledges that it will gain knowledge of information of substantial value to IMI regarding IMI's business which is not generally known and which gives IMI an advantage over competitors who do not know or use, such information, including, but not limited to, know-how, trade secrets, techniques, designs sales and customer information and business and financial information relating to the business products services practices or techniques of IMI's plans for future products or developments ("Confidential Information"). Roth agrees to, at all times, regard and preserve such information as confidential. Roth further agrees that such Confidential Information will not be disclosed buy it to any person or entity without the prior consent of IMI.
8. Binding Effect. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal representatives, successors and assigns.
9. Indemnities. IMI shall indemnify Roth and Roth shall indemnify IMI from any liability, loss, cost or damage arising as a result of the breach of obligations of the indemnifying party under this Agreement.
10. Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be mailed first class, registered, with postage prepaid as follows:
If IMI addressed to: Integrated Management Information, Inc.
601 4th Street
Platte City, MO 64079
Attn: John Saunders
If Roth addressed to: J.W. ROTH
15975 Winding Trail Road
Colorado Springs, CO 80908
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11. Costs and Expenses. Each party hereto shall responsible for its own costs and expenses incurred in connection with the execution of this Agreement.
12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Missouri.
13. Disputes. Any disputes arising among the parties with respect to this Agreement shall be settled by arbitration in accordance with the rules then in effect of the American Arbitration Association in Denver, Colorado. The prevailing party in any such disputes shall be entitled to recover all of its reasonable costs and attorneys fees incurred as a result of such dispute.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and the year first written above.
INTEGRATED MANAGEMENT INFORMATION, INC.
IMI Global
P.O. Box 1291
Platte City, MO 64079
816-858-4796
From: John Saunders To: Jeff Schoen Date: July 22, 2005 Re: Source and Age Verification Program Development |
Dear Jeff: Thank you very much for the opportunity to submit our ideas. We are excited about the chance to work with Merial SureHealth on this exciting project. For your review, I have submitted the following proposal as a potential framework for the relationship. The primary goals include: 1) Helping Meriel SureHealth achieve Quality Systems QSA certification for all participating sale barns and 2) PVP certification for all suppliers to the program. Thanks again, John
Background The Merial SureHealth program is one of the most widely recognized pre-conditioning programs in the industry. Based on the level of participation and recent industry migration towards source and age verification, Merial is evaluating an opportunity to increase value to participants by providing additional certifications to producers such as source and age verification to meet QSA and BEV program instruction requirements.
IMIGlobal, Inc. is a leader in providing source and age verification and traceability systems for the beef industry. Merial has approached IMIGlobal with the opportunity to partner in the implementation of a source and age verification program to work in conjunction with the current SureHealth and Ivac programs.
Project Components
1. SureHealth Market Facility USDA QSA Umbrella Certification
o Conducted with each participating Sale Barn
o Electronic Tag Distribution and Allocation
o Included on USDA's QSA Approved Supplier List
2. Producer PVP Certification
o Centralized/Online Producer Training
o Centralized/Online Producer Auditing
o Onsite Producer Training and Auditing
o Manual Data Entry
o Included on IMIGlobal's USVerified PVP Approved Supplier List
Item
Type
Description
Cost
1.
Setup
Umbrella QSA Program Setup - EID Distribution and Allocation
o Quality Manual Development, up to 250 hours*
o One master program and location specific documents
o Standard Operating Procedure and supporting documents
o EID Tag Distribution and Allocation Web Application
o On-going Training Sessions (6 Per Month)
o Initial internal audit
$30,000
Support
QSA Document Control and Support - USVerified.com
o Best Value in online document management
o Includes standard updates
o 1 hour per month support included*
$150/Month/Sale Barn
2.
Setup
Producer PVP Certification - USVerified.com
o Source and Aged Data Management and Storage
o Centralized/Online Producer Training and Auditing
o Supplier Evaluation and Risk Assessment Service
o 100 Head minimum per Evaluation
$.50/Animal
Support
Manual Data Entry
o IMIGlobal will enter data directly from fax or mailed copy
$.50/Animal
*All time required beyond the time designated, is billable at $150.00/hour
Additional Clauses:
1. Total estimate is subject to time of production and accurate
information provided by client.
2. Does not include travel and associated costs. All travel will be
pre-approved by Merial.
3. This agreement is between Merial and IMI Global. Any third party
participants will be required to sign
IMI Global's Non Disclosure Agreement.
4. The resulting Merial and the resulting QSA shall not be commercially
replicated without written consent
from IMI Global.
5. In signing this contract Merial agrees they will not re-distribute or
re-market the documents and/or
processes implemented by IMI Global through its USVerified System for
Merial.
6. Payments will be invoiced as the QSA program is developed and payable
upon receipt of the invoice.
7. The terms in this contract are valid 30 days from the date identified
above.
Approval/Signature_____________________________________________
Date_________________________________________________________
Selected Options_______________________________________________
IMI Global
P.O. Box 1291
Platte City, MO 64079
816-858-4796
From: John Saunders To: Jim Kelly, Superior Livestock Date: January 19, 2006 Re: IMI Project and Services Agreement |
Superior Livestock and Integrated Management Information, Inc. d/b/a "IMI Global" have reached an agreement on the
following terms and conditions:
----- ---------- ---------------------------------------------------------------------- -------------------------------\
Type Description Cost
Audit Superior Verified - USVerified Reseller Program $150/producer per year with
Reseller less than 50 producers on an
Program Annual Supplier Evaluation Program (USVerified) to include: annual basis in the program.
o An audit of all information required to assess Producer's
ability to meet the USDA Source and Age verification >50 = $145/producer
requirements prepared by or with the assistance of Superior rep >200 = $140/producer
and submitted to IMI >500 = $135/producer
o Evaluation of all calving season groups.
If Approved Producer will receive:
o A certificate of approval to communicate the conforming
status
of cattle to potential buyers.
o Listing on a private approved supplier list at a unique
domain (ie www.superiorverified.com or www.usverified.com)
o Approved to sell "Source and Age" cattle to any QSA, PVP, EV
Approved feedlot or packer.
Program Complian Tags (PCT) allow cattle to move through
non-USDA QSA and/or PVP locations but maintain export eligibility
Program Program Compliant Tag Distribution and Allocation (Optional) Range $2.00 - $3.25/Set
Compliant Tags o Custom branded nested pair set (includes visual and
electronic component - see below)
o Can be customized for Superior
[GRAPHIC OMITTED][GRAPHIC OMITTED]
--------------- ---------------------------------------------------------------------- -------------------------------
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SERVICE OPTIONS:
1. QSA Training and Audits:
a. Online Training
o $150/year/person
o Unlimited online access to training at www.usverified.com
o Monthly access to webinar provided by IMI and available to all
potential users
b. Central Training
o $150/hour
o The type of training and the hours involved will vary.
a written estimate will be provided by IMI for approval by SUPERIOR
prior to implementation of any training Plus travel expenses
ADDITIONAL CLAUSES:
1. Estimated costs are subject to time of production and accurate
information provided by client.
2. All time required beyond the time designated, is billable at
$150.00/hour.
3. SUPERIOR shall reimburse IMI Global for travel and associated costs
that have been pre-approved by
SUPERIOR.
4. This Agreement is between SUPERIOR and IMI Global. Any third party
participants are required to sign
IMI Global's Non Disclosure Agreement.
5. This Agreement may be terminated at any time prior to completion, upon
thirty (30) days prior written notice to the other party in the event
the other party shall fail to perform any of its obligations hereunder
and shall fail to remedy such nonperformance after receiving written
demand therefore. If early termination occurs, only fees and expenses
previously incurred will be reimbursed to IMI and no further payments
will be made by SUPERIOR.
6. In signing this contract SUPERIOR agrees it, and any of it's officers,
members, and employees, will not re-distribute, re-market, or
commercially replicate the documents and/or processes implemented by IMI
Global without written consent from IMI Global.
7. This Agreement, including the Mutual Non Disclosure Agreement,
represents the entire agreement between the parties on the subject
matter hereof and supersedes all prior discussions, agreements and
understandings of every kind and nature between them. No amendment,
modification or other change of this Agreement will be effective unless
in writing signed by both parties.
8. Force Marjeure - Neither party shall be in default hereunder by reason
of any failure or delay in the performance of any obligation under this
Agreement where such failure or delay arises out of any cause beyond
the reasonable control of such party and without the fault or
negligence of such party.
9. SUPERIOR"S representations and covenants shall survive the termination
of this Agreement.
TERM: One Year RENEWAL: This agreement will be automatically renewed for successive one year terms unless a written notice of cancellation is received from SUPERIOR (or |
provided to SUPERIOR by IMI Global) prior to expiration of the then-current term. Pricing hereunder for such renewal term shall be at IMI Global's then-current published pricing.
PRICING / INVOICING:
1. Training and Audit Fees will be invoiced as follows:
o 100% of the fees will be billed in the month in which they occur.
2. All Invoices will be due upon receipt.
3. There will be a delinquent interest charge on all past due balances over 30 days.
LIMITATION OF LIABILITY: IMI shall not be liable to SUPERIOR for any direct damages in excess of the amounts paid hereunder and neither party shall be liable to the other for any special, indirect, incidental, consequential or punitive damages arising out of or relating to this Agreement, whether the claim alleges tortious conduct or any other legal theory. SUPERIOR may not assign any rights or obligations under this Agreement without IMI Global's prior written consent.
LICENSE: IMI grants SUPERIOR a nonassignable, nonexclusive and limited, right and license to use the IMI USVerified.com quality management and verification program during the term of this Agreement. SUPERIOR has no right to distribute copy, modify or create derivatives of the USVerified program (s).
The undersigned, as duly authorized representative of SUPERIOR affirms that the undersigned, on behalf of the SUPERIOR, has read, fully understands and accepts the terms of this Agreement.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE SECURITIES ACT.
Warrant No. 2005-001
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
IMI Global.
THIS CERTIFIES that, for value received, Westrock Advisors is entitled to purchase from IMI Global., a Delware corporation (the "Corporation"), subject to the terms and conditions hereof, ________ shares (the "Warrant Shares") of common stock, no par value (the "Common Stock"). This warrant, together with all warrants hereafter issued in exchange or substitution for this warrant, is referred to as the "Warrant" and the holder of this Warrant is referred to as the "Holder." The number of Warrant Shares is subject to adjustment as hereinafter provided. Notwithstanding anything to the contrary contained herein, this Warrant shall expire at 5:00pm EST on May 27, 2009 (the "Termination Date").
1. Exercise of Warrants.
(a) The Holder may, at any time prior to the Termination Date, exercise this Warrant in whole or in part at an exercise price per share equal to $0.61 per share, subject to adjustment as provided herein (the "Warrant Price"), by the surrender of this Warrant (properly endorsed) at the principal office of the Corporation, or at such other agency or office of the Corporation in the United States of America as the Corporation may designate by notice in writing to the Holder at the address of such Holder appearing on the books of the Corporation, and by payment to the Corporation of the Warrant Price in lawful money of the United States by check or wire transfer for each share of Common Stock being purchased. Upon any partial exercise of this Warrant, there shall be executed and issued to the Holder a new Warrant in respect of the shares of Common Stock as to which this Warrant shall not have been exercised. In the event of the exercise of the rights represented by this Warrant, a certificate or certificates for the Warrant Shares so purchased, as applicable, registered in the name of the Holder, shall be delivered to the Holder hereof as soon as practicable after the rights represented by this Warrant shall have been so exercised.
2. Reservation of Warrant Shares. The Corporation agrees that, prior to the expiration of this Warrant, it will at all times have authorized and in reserve, and will keep available, solely for issuance or delivery upon the exercise of this Warrant, the number of Warrant Shares as from time to time shall be issuable by the Corporation upon the exercise of this Warrant.
3. No Stockholder Rights. This Warrant shall not entitle the holder hereof to any voting rights or other rights as a stockholder of the Corporation.
4. Transferability of Warrant. Prior to the Termination Date and subject to compliance with applicable laws, this Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company by the Holder in person or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form annexed hereto properly endorsed for transfer.
5. Certain Adjustments. With respect to any rights that Holder has to exercise this Warrant and convert into shares of Common Stock, Holder shall be entitled to the following adjustments:
(a) Merger or Consolidation. If at any time there shall be a merger or a consolidation of the Corporation with or into another corporation when the Corporation is not the surviving corporation, then, as part of such merger or consolidation, lawful provision shall be made so that the holder hereof shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the aggregate Warrant Price then in effect, the number of shares of stock or other securities or property (including cash) of the successor corporation resulting from such merger or consolidation, to which the holder hereof as the holder of the stock deliverable upon exercise of this Warrant would have been entitled in such merger or consolidation if this Warrant had been exercised immediately before such merger or consolidation. In any such case, appropriate adjustment shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the holder hereof as the holder of this Warrant after the merger or consolidation.
(b) Reclassification, Recapitalization, etc. If the Corporation at any time shall, by subdivision, combination or reclassification of securities, recapitalization, automatic conversion, or other similar event affecting the number or character of outstanding shares of Common Stock, or otherwise, change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such subdivision, combination, reclassification or other change.
(c) Split or Combination of Common Stock and Stock Dividend. In case the Corporation shall at any time subdivide, redivide, recapitalize, split (forward or reverse) or change its outstanding shares of Common Stock into a greater number of shares or declare a dividend upon its Common Stock payable solely in shares of Common Stock, the Warrant Price shall be proportionately reduced and the number of Warrant Shares proportionately increased. Conversely, in case the outstanding shares of Common Stock of the Corporation shall be combined into a smaller number of shares, the Warrant Price shall be proportionately increased and the number of Warrant Shares proportionately reduced. Notwithstanding the foregoing, in no event will the Warrant Price be reduced below the par value of the Common Stock.
6. Legend and Stop Transfer Orders. Unless the Warrant Shares have been registered under the Securities Act, upon exercise of any part of the Warrant, the Corporation shall instruct its transfer agent to enter stop transfer orders with respect to such Warrant Shares, and all certificates or instruments representing the Warrant Shares shall bear on the face thereof substantially the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE SECURITIES ACT.
7. Redemption. The Corporation shall have the right, upon 30 days' written notice to the Holder ("Redemption Notice"), to redeem all or any portion of this Warrant at a price equal to $.01 per Warrant Share, provided that (i) the Warrant Shares have been registered for resale pursuant to the Securities Act, and are freely tradable without restriction or legend for at least the 30-day period preceding such notice and (ii) the Closing Bid Price (as hereinafter defined) for the Common Stock has been at least $2.50 (subject to adjustment to reflect forward or reverse stock splits, stock dividends, recapitalizations and the like) for the 20-trading day period immediately preceding the date of the Redemption Notice from the Corporation to the Holder. As used herein, "Closing Bid Price", shall mean the closing bid price of the Common Stock as reported by Bloomberg Financial L.P. on the date in question (based on a trading day from 9:30 a.m. ET to 4:02 p.m. Eastern Time) (and, if no closing bid price is reported, the closing price as so reported, and if neither the closing bid price nor the closing price is so reported, the last reported price of the Common Stock as determined by an independent evaluator mutually agreed to by the Holder and the Corporation).
8. Miscellaneous. This Warrant shall be governed by and construed in accordance with the laws of the State of Colorado. All the covenants and provisions of this Warrant by or for the benefit of the Corporation shall bind and inure to the benefit of its successors and assigns hereunder. Nothing in this Warrant shall be construed to give to any person or corporation other than the Corporation and the holder of this Warrant any legal or equitable right, remedy or claim under this Warrant. This Warrant shall be for the sole and exclusive benefit of the Corporation and the holder of this Warrant. The section headings herein are for convenience only and are not part of this Warrant and shall not affect the interpretation hereof. Upon receipt of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of this Warrant, and of indemnity reasonably satisfactory to the Corporation, if lost, stolen or destroyed, and upon surrender and cancellation of this Warrant, if mutilated, the Corporation shall execute and deliver to the Holder a new Warrant of like date, tenor and denomination.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by its duly authorized officers under its seal, this 27th day of May, 2005.
IMI Global. Inc..
By: /s/ John Saunders Name: John Saunders Title:President |
WARRANT EXERCISE FORM
To Be Executed by the Holder in Order to Exercise Warrant
To: IMI Global, INC.
601 4th Street
Platte City, MO 64079
Phone: 816-858-4796
Dated: ____________________ Attn: John Saunders
The undersigned, pursuant to the provisions set forth in the attached Warrant No. 1, hereby irrevocably elects to purchase (check applicable box):
|_| ____________ shares of the Common Stock of IMI Global. covered by such Warrant; or
|_| the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in subsection 1(b) (if applicable).
The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant. Such payment takes the form of (check applicable box or boxes):
|_| $__________ in lawful money of the United States; and/or
|_| if the provisions of subsection 1(b) of this Warrant are in effect, the cancellation of such portion of the attached Warrant as is exercisable for a total of _________ Warrant Shares (using a Fair Market Value of $_______ per share for purposes of this calculation); and/or
|_| if the provisions of subsection 1(b) of this Warrant are in effect, the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 1(b), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 1(b).
The undersigned hereby requests that certificates for the Warrant Shares purchased hereby be issued in the name of:
(please print or type name and address)
(please insert social security or other identifying number)
and be delivered as follows:
(please print or type name and address)
(please insert social security or other identifying number)
and if such number of shares of Common Stock shall not be all the shares evidenced by this Warrant Certificate, that a new Warrant for the balance of such shares be registered in the name of, and delivered to, Holder.
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form. Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
________________________________________________________ whose address is
Dated: _________, _______
Holder's Signature: _________________________
Holder's Address: _________________________
Signature Guaranteed: _________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust Corporation. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.
Exhibit 23.1
Consent
As the independent certified public accountant, I hereby consent to the incorporation in the Registration Statement on Form SB-2 of my report relating to the financial statements of Integrated Management Information, Inc. and to all references to this firm included in such Form SB-2, as of December 31, 2005 and 2004 and the related Statements for December 31, 2005 and 2004.
/s/ E. Randall Gruber CPA, PC
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E. Randall Gruber CPA, PC
April 26, 2006
St. Louis, Missouri
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