Form S-4 Home System Group

Registration of securities issued in business combination transactions

What is Form S-4?
  • Accession No.: 0001221508-03-000029 Act: 33 File No.: 333-105588 Film No.: 03720636
  • CIK: 0001172319
  • Submitted: 2003-05-27

FORM S-4 OF CORONATION ACQUISITION CORP. HTML

s4_coronation0527.htm


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

CORONATION ACQUISITION CORP.


(Exact name of Registrant as specified in its charter)

 

Nevada

 

6798

 

43-1954776


 
 

(State or jurisdiction of
incorporation or organization)

 

(Primary Standard Industrial Classification Code Number)

 

(I.R.S. Employer Identification No.)

 

P.O. Box 741, Bellevue, Washington, 98009 (425) 453-0355


(Address, including zip code, and telephone number, including area code of registrant's principal executive offices)

 

P.O. Box 741, Bellevue, Washington, 98009


(Address of principal place of business or intended principal place of business)

 

Harry Miller
Chairman and Chief Executive Officer
CORONATION ACQUISITION CORP.
P.O. Box 741, Bellevue, Washington, 98009
(425) 453-0355

Copies to:

Derwin Richardson, Esq.
DERWIN P. RICHARDSON, Ltd.
11 E. Adams -Suite 604
Chicago, IL 60603
(312) 939-0696


(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Approximate date of proposed sale to the public:

Upon consummation of the Agreement and Plan of Exchange and Reorganization by and between Coronation Acquisition Corp. and Supreme Property, Inc. dated as of March 31, 2003 described in the enclosed Information statement/Prospectus.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please 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 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.


CALCULATION OF REGISTRATION FEE


Title of each class of securities to be registered

Amount to be registered (1)

Proposed maximum offering price per share (2)

Proposed maximum aggregate offering price

Amount of registration fee


Common Stock

30,000,000

$0.10

$ 3,000,000

$ 243.00


Notes:

  1. Represents the number of common shares of Coronation to be issued to the stockholders of Supreme pursuant to the Agreement and Plan of Exchange and Reorganization, the shares to be issued to two other parties in connection with the merger and the qualification of resale of shares currently held by Mr. Miller each as described herein.
  2. Estimated solely for the purpose of calculating the registration fee in accordance with the provisions of Rule 457(f). There is no trading market for the shares and no underwriter will be used by selling stockholders as a result is difficult to predict what an arms-length buyer would be willing to pay for these shares. Book value is approximately $0.05 per share.

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 these 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.


Supreme Property, Inc.
431 E. 75th Street, Chicago, Illinois 60619
(773) 873-9860

Dear Stockholder:

      I am pleased to inform you that the board of directors of Supreme Property, Inc. has carefully considered and approved an agreement and plan of merger which provides for the merger of our company into Coronation Acquisition Corp., a Nevada fully reporting company. Pursuant to the agreement and plan of merger, each share of our stock will be converted into the right to receive 1.3953 shares of the common stock of Coronation Acquisition Corp.

      Our board of directors has determined that the agreement and plan of merger and the merger are fair to and in the best interests of our stockholders.

      Please carefully read the enclosed information statement/prospectus for information about the agreement and plan of merger and the merger. We are an Illinois corporation subject to the Business Corporation Act of the State of Illinois, which requires that the two-thirds of the holders of the voting power of all outstanding shares of our stock adopt the agreement and plan of merger before the merger can be completed. The holders of a majority (74.44%) of the voting power of all of our outstanding shares of stock have already acted by written consent to adopt the agreement and plan of merger. Accordingly, your approval is not required and we will not ask you to vote on the transaction. The enclosed information statement/prospectus should be considered the notice we are required to provide you under Section 7.10 of the Business Corporation Act of the State of Illinois.

      We expect to complete the merger before the end of our second fiscal quarter. Under the rules of the Securities and Exchange Commission, the merger may not be completed until 20 business days after the mailing of the enclosed information statement/prospectus.

      Please do not send in your stock certificates at this time. Promptly after the merger is completed you will receive instructions explaining how to exchange your stock certificates for stock certificates of Coronation Acquisition Corp., whose name will change to Supreme Realty Investment Trust, Inc. on close of the merger.

      We look forward to the successful completion of the merger and to your continued support as a shareholder of Supreme Property, Inc.

                                                      Very truly yours,

                                                 Thomas Elliott

                                                      Thomas Elliott
                                                      President and Chief Executive Officer
                                                      Supreme Property., Inc.

May 27, 2003


 

The information in this information statement/prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This information statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MAY 27, 2003

INFORMATION STATEMENT/PROSPECTUS

CORONATION ACQUISITION CORP.                       SUPREME PROPERTY, INC.    

 

This information statement/prospectus relates to the issuance of shares of common stock of Coronation Acquisition Corp. in connection with the acquisition by Coronation Acquisition Corp. of Supreme Property, Inc. pursuant to an agreement and plan of merger dated as of March 31, 2003 and the qualification of 1,350,000 shares of common stock of Coronation Acquisition Corp. previously issued. Shares of common stock of Coronation Acquisition Corp. to which this information statement/prospectus relate consist of:

  • 27,000,000 shares to be issued to the stockholders of outstanding shares of Supreme Property, Inc. common stock at the closing of the merger;
  • 1,650,000 shares to be issued to Nick Segounis and SG Financial Services Group at the closing of the merger; and
  • 1,350,000 shares currently held by Mr. Mr. Miller which are being qualified for resale under this prospectus. Mr. Miller is considered a "selling stockholder" as defined by the Securities and Exchange Commission.

We Are Not Asking You for a Proxy and You are Requested Not To Send Us a Proxy.

The shares of Coronation Acquisition Corp. and Supreme Property, Inc. are not traded on any national securities market or quotation system.

We will pay all expenses of this offering. We do not expect to pay underwriting discounts or commissions in connection with the issuance or resale of these shares, although we have agreed to pay a finder's fee in connection with merger. Any person receiving these fees may be deemed an underwriter within the meaning of the Securities Act of 1933, and any profit on the resale of the common stock purchased by them may be deemed to be underwriting discounts or commissions under the Securities Act.

We intend to permit Mr. Miller and any individuals or entities who will receive shares of our common stock in connection with the merger described above to use this prospectus to cover resales of the shares. If this happens, we will not receive any proceeds from such resales. We will not authorize any person, other than Mr. Miller, to use this prospectus in connection with resales of shares without our prior written consent. For more information, please read "Reselling Securities."

You should carefully consider the discussion in the section entitled "Risk Factors" beginning on page 16.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of the prospectus. Any representation to the contrary is a criminal offense.

 


TABLE OF CONTENTS

   
TABLE OF CONTENTS 2
       
SUMMARY INFORMATION 6
       
RISK FACTORS 13
  Risks Relating to the Merger 13
  Risks Related to Our Securities 14
  Risk Relating to the Business, Finances and Operations of Coronation Post Merger 14
  Risks Relating To the Real Estate Industry 17
       
FORWARD LOOKING STATEMENTS 18
       
TERMS OF THE TRANSACTION 18
  BACKGROUND OF THE MERGER 18
  REASONS FOR THE MERGER 19
  SUMMARY OF MERGER AGREEMENT 19
    General Terms 19
    Consideration to Be Received In the Merger 19
    Exchange of Shares 20
    Effective Time of the Merger 20
    Principal Representations and Warranties 20
    Conditions to the Consummation Of The Merger 21
    Termination of the Merger Agreement 22
    Expenses of Merger 22
  RELATED TRANSACTIONS TO MERGER 23
    Name Change 23
    Appointment of New Slate of Directors 23
    Issuance of Additional Shares of Coronation 23
    Cancellation of 3,650,000 Shares of Coronation 23
    Qualification of Shares Held by Mr. Miller for Resale 23
    Voluntary Escrow Agreement 24
  DESCRIPTION OF SECURITIES 24
    Common Stock 25
    Non-Cumulative Voting 25
    Dividends 25
    Transfer Agent 25
  COMPARISON OF STOCKHOLDER RIGHTS 25
  ACCOUNTING TREATMENT OF THE MERGER 27
  CERTAIN FEDERAL INCOME TAX CONSEQUENCES 27
  PRO FORMA FINANCIAL INFORMATION 28
    Unaudited Pro Forma Combined Consolidated Balance Sheet 29
    Unaudited Pro Forma Combined Consolidated Statement of Operations 30
    Notes to Unaudited Pro Forma Consolidated Financial Statements of Coronation 31
  SELLING STOCKHOLDERS 33
  INTERESTS OF NAMED EXPERTS AND COUNSEL 36
  DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES 36
       
INFORMATION ABOUT CORONATION ACQUISITION CORP. 36
  DESCRIPTION OF BUSINESS 36
    Formation 36
    Coronation's Business Pre-Merger 36
    Governmental Regulation 37
    Employees 38
    Reports to Securities Holders 38
  DESCRIPTION OF PROPERTY 38
  LEGAL PROCEEDINGS 38
  MARKET PRICE OF SECURITIES AND RELATED STOCKHOLDER MATTERS 39
    Dividend Policy 39
    Recent Sales of Unregistered Securities 39
    Equity Compensation Plan 39
  FINANCIAL STATEMENTS 39
  MANAGEMENT DISCUSSION AND ANALYSIS 40
    Plan of Operations 40
  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS 41
       
INFORMATION ABOUT SUPREME PROPERTY, INC. 41
  Description of Business 41
    Formation 41
    Supreme's Business 41
    Competition 42
    Environmental Matters 43
  Description of Property 44
    Corporate Office of Supreme 44
    Investment Policies 44
    Investments in Real Estate or other Property Interests 45
    Investments in Real Estate Securities or other Passive Interests 46
    Investments in Mortgage Loans and Other Securities 46
    Investment Real Estate Owned 47
    Proposed Future Acquisitions 48
    Acquisition Procedures 49
    Other Real Property Considerations 49
    Financial Leverage 49
  Legal Proceedings 50
  Market Price of Securities and Related Stockholder Matters 50
    General 50
    Dividend Policy 50
    Recent Sales of Unregistered Securities 50
    Equity Compensation Plan 53
  Financial Statements 53
  Management Discussion and Analysis 53
    Overview 53
    Results of Operations 54
    Liquidity and Capital Resources 54
    Recent Accounting Pronouncements 55
  Changes and Disagreements with Accountants 56
       
VOTING AND MANAGEMENT INFORMATION 56
  MAJORITY STOCKHOLDERS CONSENT 56
  DISSENTER'S RIGHTS OF APPRAISAL OF STOCKHOLDERS OF SUPREME 56
  INTEREST OF DIRECTORS AND OFFICERS OF SUPREME IN THE MERGER 57
  INTEREST OF DIRECTORS AND OFFICERS OF CORONATION IN THE MERGER 58
  OUTSTANDING SHARES AND VOTING RIGHTS 58
    Supreme 58
    Coronation 58
    Record Date 58
  EXPENSES OF INFORMATION STATEMENT/PROSPECTUS 59
  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 59
    Coronation 59
    Supreme 60
  APPOINTMENT OF NEW DIRECTORS AND OFFICERS TO CORONATION 60
  OTHER OFFICERS AND SIGNIFICANT EMPLOYEES 61
  FAMILY RELATIONSHIPS AMONG DIRECTORS 62
  INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS 62
  AUDIT COMMITTEE FINANCIAL EXPERT 62
  CODE OF ETHICS 62
  EXECUTIVE COMPENSATION 62
    Summary of Compensation of Executive Officers 62
    Summary Compensation Table 63
    Stock Options/SAR Grants 63
    Long-Term Incentive Plans 64
    Compensation of Directors 64
    Employment Contracts and Termination of Employment or Change of Control 64
    Certain Relationships and Related Transactions 64
       

PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

       
  INDEMNIFICATION OF DIRECTORS AND OFFICERS 67
  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 68
  UNDERTAKINGS 69
       
SIGNATURES 71
       
     

 


This information statement/prospectus incorporates important business and financial information about Coronation or Supreme that is not included in or delivered with the document. This information is available without charge to security holders upon written or oral request to:

  Harry Miller, President

CORONATION ACQUISITION CORP.

P.O. Box 741

Bellevue, Washington, 98009

(425) 453-0355

OR: Thomas Elliott, President
Supreme Property, Inc

431 E. 75th Street

Chicago, IL 60619

(773)873-9850

 

To obtain timely delivery, you must request the information no later than five business days before the close of the merger transaction.


SUMMARY INFORMATION

This summary contains selected information from this information statement/prospectus and may not contain all of the information that is important to you. To understand the merger more fully and for a more complete description of the legal terms of the merger, you should read this entire document carefully, including the attached Exhibits. In this information statement/prospectus, "Coronation" refers to Coronation Acquisition Corp. and "Supreme" refers to Supreme Property, Inc. and its wholly-owned subsidiary Supreme Capital Funding, Inc.

The Companies    
   
Coronation  
  Full Name, Address & Phone Number Coronation Acquisition Corp.
P.O. Box 741, Bellevue, WA, 98009
(425) 453-0355
  Business Coronation is a blank check company formed in the State of Nevada in 2000 solely for the purposes of effecting a merger or acquisition of an operating company.
   
Supreme  
  Full Name, Address & Phone Number Supreme Property, Inc.

431 E. 75th Street, Chicago, IL 60619

(773)873-9850

Business Supreme is a privately-held, licensed real estate brokerage and real estate acquisition firm. Supreme plans to become a self-administered real estate

investment trust or "REIT". Supreme has and plans to continue to acquire, develop, own and operate a portfolio of investment properties.

Supreme currently owns four properties. Supreme intends to diversify its portfolio of real estate as it makes future acquisitions of investment properties, by acquiring properties throughout the United States and by targeting, as opportunities present themselves, each of the following market segments: office, light industrial, retail, residential and special use realty markets.

Subsidiary Supreme Capital Funding Inc. is a wholly-owned subsidiary of Supreme. It is waiting the receipt of a mortgage banking license from the State of Illinois. This license was applied for in January 2003. On receipt of this license Supreme Capital Funding Inc. intends to provide mortgage origination and other mortgage banking services.
     
Merger Transaction  
  We have attached the merger agreement as Exhibit 2 to this information statement/prospectus. We encourage you to read the merger agreement because it is the legal document that governs the merger.
Basics About This Merger Transaction On March 31, 2003, Coronation and Supreme signed an agreement and plan of exchange and reorganization. Under the terms of this merger agreement Supreme will merge into Coronation. After the transaction is completed, Supreme will no longer exist and Coronation, as the surviving entity, will carry on the business of Supreme. Coronation will be controlled by the former stockholders of Supreme and the board of directors of Coronation will be the board of directors of Supreme immediately prior to the merger. The name of Coronation will be changed to Supreme Realty Investment Trust, Inc. Coronation will elect to be taxed as a real estate investment trust in the fiscal year ending December 31, 2003. After the merger Coronation will operate as a self-administered, self-managed hybrid real estate investment trust, or REIT with one wholly-owned subsidiary, Supreme Capital Funding, Inc.

  Majority Approval Already Obtained for Merger Majority stockholders of Coronation and Supreme holding over 74% of the issued and outstanding shares of each company have already approved the adoption of the merger agreement and the merger. As a result, no vote by the stockholders of Supreme will be taken because these actions have already been approved by the written consent of the holders of a majority of the outstanding shares of both companies as allowed by their respective corporate statutes. We have attached the form of stockholders' consent of Supreme as Exhibit 99.a to this information statement/prospectus.
     
What Supreme Stockholders will receive in the Merger As a result of the merger, Supreme's stockholders will be entitled to receive 1.3953 shares of common stock of Coronation for each share of Supreme that they own. Coronation will not issue any fractional shares of common stock in connection with the merger. Instead, if fractional shares should occur as a result of the exchange rate, such fractional shares will be rounded down.
     
  Ownership of Coronation After the Merger Coronation will issue approximately 27,000,000 shares of common stock to Supreme stockholders in connection with the merger. Supreme's stockholders will own approximately 89.98% of the outstanding common stock of Coronation after the merger. As of May 27, 2003, there were 19,342,000 shares of Supreme outstanding and no warrants or options.
     
  Federal Tax Consequences of the Merger Coronation and Supreme intend that the merger qualify as a "reorganization" for federal income tax purposes. If the merger qualifies as a reorganization, stockholders of Supreme's shares will generally not recognize any gain or loss for federal income tax purposes on the exchange of their shares of Supreme for the common stock of Coronation in connection with the merger. The companies themselves, as well as the current holder of Coronation's common stock, will not recognize gain or loss as a result of the merger.

The federal income tax consequences described above may not apply to all stockholders of Supreme's common stock. Your tax consequences will depend on your own situation. You should consult your tax advisor so as to fully understand the tax consequences of the merger to you.

     
  Accounting Treatment The merger will be treated as a "purchase" for accounting purposes.

Although Coronation will acquire Supreme in the merger, Supreme's stockholders will hold a majority of the voting interests in Coronation on completion of the merger. Accordingly, for accounting purposes, the acquisition will be a "reverse acquisition," and Supreme will be the "accounting acquirer."

     

  Supreme Stockholders have Appraisal or Dissenters Rights Under the Business Corporation Act of the State of Illinois, the stockholders of Supreme are entitled to appraisal or dissenters' rights in connection with the merger.
     
  Effective Time of Merger The merger will become effective at the date and time the certificate of merger is filed with the Secretary of State of the State of Nevada. It is anticipated that this filing will be made as soon as practicable after the last of the conditions precedent to the merger, as set forth in the merger agreement, has been satisfied or waived.
     
  No Regulatory Approval Required No regulatory approval is required in order to consummate the merger other than the successful registration of the shares to be issued in connection with the merger by the Securities and Exchange Commission and all applicable State securities regulators
     
Conditions to the Merger Coronation and Supreme will complete the merger only if specific conditions are satisfied or, in some cases, waived, including the following:
- receipt of all stockholder approvals;
- this Form S-4 having become effective under the Securities Act of 1933 and all state securities permits or authorizations necessary to issue the shares of Coronation have been obtained;
- no legal restraints or prohibitions which would prevent the consummation of the merger;
- the representations and warranties of Coronation and Supreme under the merger agreement must be materially true and correct;
- that there have been no material adverse change to the parties since signing the agreement; and
- the parties have performed all material obligations required to be performed by them under the merger agreement.
     
Termination of the Merger Agreement Coronation and Supreme can jointly agree to terminate the merger agreement at any time prior to completing the merger. In addition, either Coronation or Supreme can terminate the merger agreement if:
- the other party has breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the merger agreement; or
- a law or final and nonappealable court order prohibits the merger.
     
  Restrictions on the Ability to Sell Coronation's Stock Coronation will place appropriate legends on the certificates of any common stock of Coronation to be received by affiliates of Supreme which are subject to the resale rules of Rule 144. In addition, affiliates of Supreme have also acknowledged the resale restrictions imposed by Rule 145 under the Securities Act of 1933 on shares of common stock of Coronation to be received by them in the merger.

All shares of common stock of Coronation received by the stockholders of Supreme, Nick Segounis and SG Financial Services Group in connection with the merger will be freely transferable unless the shareholder is

considered an affiliate of either Coronation or Supreme under the federal securities laws.

In addition the share above, the 1,350,000 shares held by Mr. Miller and being qualified for resale under this information statement/prospectus, will also be freely transferable.

The majority stockholders of Supreme and others have agreed to enter into a voluntary escrow agreement regarding the resale of their shares. Under the escrow agreement the stockholders have agreed to not resell 75% the shares of Coronation they will receive under the merger until Coronation has obtained a minimum of $3,000,000 in new debt or equity financing to advance its business. At that time an additional 25% of the shares will be released for resale with an additional 25% being released every three months until 100% of the shares escrowed have been released.


  Expenses Supreme has agreed to pay all expenses incurred in connection with the merger, other than the preparation of the financial statements of Coronation, their SEC filings, exhibits, etc.
     
Related Transactions to Merger  
     
  Name Change Coronation and its stockholders have agreed to change the name of Coronation to "Supreme Realty Investment Trust, Inc." concurrent with the closing of the merger agreement.
     
  Change of Directors of Coronation The current board of directors of Supreme will be appointed to the board of directors of Coronation at the close of the merger agreement. Mr. Miller, the sole director and officer of Coronation will resign at that time.
     
  Issuance of 1,650,000 Additional Shares to Two Parties The board of directors of Supreme and Coronation have agreed to issue 1,650,000 in connection with the merger agreement and closing of the merger to two parties. These parties were integral in introducing Supreme and Coronation to one another.
     
  Cancellation of 3,3650,00 Outstanding Shares of Coronation Mr. Miller has agreed to cancel 3,650,000 shares of common stock he currently holds in Coronation concurrently on the parties closing the merger agreement.
     
  Risks Related to Merger Agreement After the transaction is completed, Coronation's success will be totally dependent on the success of the business currently conducted by Supreme. There are no assurances that Supreme's business operations will be profitable after closing the merger agreement. (See "Risk Factors")

Qualification of Shares Held by Mr. Miller for Immediate Resale  
     
  Background Mr. Miller acquired 5,000,000 shares of Coronation on March 2, 2000 when Coronation was considered a blank check company. Mr. Miller has agreed to cancel 3,650,000 of these shares at the time of closing the merger agreement. The remaining 1,350,000 shares, which will represent 4.5% of the issued and outstanding share capital of Coronation on closing of the merger, cannot be sold pursuant to the resale rules of Rule 144 of the Securities Act of 1933 and must instead be registered before they may be sold by Mr. Miller.

In a letter to NASD Regulation, Inc., dated January 21, 2000, the Securities and Exchange Commission staff advised that securities acquired in a blank check company in a private transaction could only be sold if they were subsequently registered for resale.

     
  Offering Terms The shares of Coronation are not quoted for trading on any national market or quotation system. Mr. Miller may chose to sell all or none of his stock in negotiated private transactions or wait until the shares of Coronation are quoted for trading on a national market or quotation system and then offer his stock at prevailing market prices, or again at privately negotiated prices. There can be no certainty that the shares of Coronation will ever trade in a public market
     

SELECTED FINANCIAL DATA

Coronation and Supreme have provided the following selected historical financial data to aid you in analyzing the financial aspects of the merger. The information is only a summary and you should read it together with Coronation's financial statements, which are attached as Exhibit 13.1 and 13.2, and Supreme's financial statements, which are attached as Exhibit 13.2 and 13.3 of this information statement/prospectus.

The unaudited pro forma consolidated financial data also set forth below gives effect to the merger of Supreme by Coronation under the purchase method of accounting, as required under the rules of the Securities and Exchange Commission. The selected unaudited pro forma consolidated financial data is based on estimates and assumptions. This data is not intended to represent or be indicative of the consolidated results of operations or financial conditions of Coronation that would have been reported had the merger been completed as of the dates presented, and is not intended to represent or be indicative of future consolidated results of operations or financial condition of Coronation.



 

Selected Historical Financial Data of Coronation

 

Year Ended
December 31, 2002

As of Three Month Period
Ended March 31, 2003

BALANCE SHEET DATA:    
     Current Assets:
     Other Assets:
     Total Assets:
     Total Liabilities:
     Retained Earnings (Deficit):
     Shareholder Equity

$           0
0
0
2,390
(2,890)
(2,390)

$             0
0
0
7,555
( 4,665)
( 7,555)

     
INCOME STATEMENT DATA:    
     Total Income:
     Total Expenses:
     Net Profit (Loss):

$           0
2,890
( 2,890)

$              0
4,665
( 4,665)

 
 
 

Selected Historical Consolidated Financial Data of Supreme

 

Year Ended
December 31, 2002

As of Three Month Period
Ended March 31, 2003

BALANCE SHEET DATA:    
     Current Assets:
     Loans & Securities Investments:
     Real Estate Investments:
     Other Assets:
     Total Assets:
     Total Liabilities:
     Retained Earnings (Deficit):
     Shareholder Equity

$ 2,000
100,000
 1,947,515
 27,434
2,076,949
1,300,664
 34,046
776,285

$ 112,835
100,000
1,947,515
27,434
2,187,784
 1,293,800
 40,371
893,984

     
INCOME STATEMENT DATA:    
     Total Income:
     Total Expenses:
     Net Profit (Loss):

$ 259,669
$ 224,924
$ 34,775

43,700
37,375
6,325

     
 

 

 

Selected Unaudited Pro Forma Combined Financial Data of Coronation and Supreme

 

Year Ended
December 31, 2002

As of Three Month Period
Ended March 31, 2003

BALANCE SHEET DATA:    
     Current Assets:
     Loans & Securities Investments:
     Real Estate Investments:
     Other Assets:
     Total Assets:
     Total Liabilities:
     Retained Earnings (Deficit):
     Shareholder Equity

$ 2,000
100,000
1,947,515
27,434
2,076,949
1,303,054
31,156
773,895

$ 112,835
100,000
1,947,515
27,434
2,187,784
1,301,355
35,706
886,429

     
INCOME STATEMENT DATA:    
     Total Income:
     Total Expenses:
     Net Profit (Loss):

$ 259,669
227,814
31,855

43,700
42,040
1,660

     
     

COMPARATIVE HISTORICAL AND PRO FORMA PER SHARE DATA

The following tables set forth the historical net loss and book value per share of Coronation and Supreme and the pro forma combined per share data on an unaudited basis after giving effect to the merger using the purchase method of accounting. The data is derived from and should be read in conjunction with Coronation's audited financial statements and related notes, Supreme's audited financial statements and related notes, and the unaudited financial statements and related notes and the unaudited pro forma combined financial information and related notes, which are included elsewhere in this information statement/prospectus.

The unaudited pro forma combined per share data is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the merger had been consummated at the beginning of the earliest period presented, nor is it necessarily indicative of future operating results or financial position. The pro forma adjustments are estimates based on information and assumptions available at the time of the filing of this information statement/prospectus.


Neither Coronation or Supreme declared any cash dividends related to their respective common stock during the periods presented.

     
 

Year End
December 31, 2002

Year End
December 31, 2001

Historical Data Coronation    
Net income (loss) per share:    
     Basic and Diluted

($ 0.0006)

$ 0.0000

     Book value per share as of the end of the period(1)

($ 0.0006)

$ 0.0458

     
     
Historical Data Supreme    
Net income (loss) per share:    
     Basic and Diluted

$ 0.0019

$ 0.0050

     Book value per share as of the end of the period(1)

$ 0.0458

$ 0.0157

     
     
Historical Combined Data
of Coronation & Supreme
   
Net income (loss) per share:    
     Basic and Diluted

$ 0.0013

$ 0.0050

     Book value per share as of the end of the period(2)

$ 0.0294

$ 0.0052

     
Notes:
(1)   Historical book value per share is computed by dividing total stockholders' equity by the number of shares of Coronation or Supreme common stock outstanding at the end of the period.
(2)   Pro Forma combined per share book value is computed by dividing total stockholders' equity Coronation expected to be issued and outstanding (30,000,000) at the closing of the merger.

 

Risk Factors

As a result of the merger, current Supreme stockholders will be acquiring Coronation common stock. You should consider all of the information included in this information statement/prospectus and its exhibits and all of the information incorporated by reference. In addition you should pay particular attention to the following risks relating to the merger, risks related to the operation of Coronation post merger and risks related to the real estate investment trust industry.

Risks Relating to the Merger

As a stockholder of Coronation, you will have different rights and obligations than you currently have as a Supreme stock holder.

Prior to the merger agreement, your rights and obligations as a Supreme stockholder are governed by the charter and bylaws of Supreme and the Business Corporation Act of the State of Illinois. Following the merger, you will become a stockholder of Coronation and your rights and obligations will be governed by the Nevada Revised Statutes of 2001, as amended and the articles and bylaws of Coronation. In some cases your rights as a shareholder may be more limited than your rights as a Supreme stockholder.


The merger agreement may be a taxable transaction for Supreme stockholders.

Although we believe that the merger agreement will be tax free, we cannot assure you that the IRS will not seek to treat this as a taxable transaction for Supreme stockholders. In the event the merger does not qualify as a tax free transaction, the transfers could result in the realization of gain or loss by the Supreme stockholders. In that case, under certain circumstances, losses, if any, realized by some Supreme stockholders with respect to the merger agreement could be disallowed. The tax free nature of the merger may depend on actions that we take after the merger, including the issuance of additional shares of stock by us.

Risks Related to Our Securities

Our common stock may trade at lower prices.

Our common stock will not trade publicly until after the merger agreement is complete. We cannot assure you that an active trading market will develop or be sustained for our common stock. The market value of our common stock may be affected by many factors, including: governmental regulatory action; changes in tax laws; the level of our earnings; the market's perception of our business and our ability to generate distributions; the value of our assets and our market capitalization; the degree to which our management's interests are perceived to be aligned with the interests of our stockholders; the degree to which we use borrowings; external factors such as interest rates and conditions of the stock markets; and technical factors relating to the supply and demand for shares of our common stock.

Issuances of large amounts of our stock could cause our price to decline.

After the merger, we will have the ability to issue additional shares of common stock, preferred stock and other securities convertible into common stock. We intend to do this in order to acquire additional properties. The issuance of common stock or securities convertible into or exchangeable for our common stock could cause dilution of our existing security holders and a decrease in the market price of our common stock or preferred stock.

Risk Relating to the Business, Finances and Operations of Coronation Post Merger

We may not be able to successfully implement our business plan.

After the merger agreement, we intend to seek to raise additional equity or debt capital and to use the funds we raise, plus additional borrowings, to acquire additional income-producing properties, mortgages, and other loans secured by real estate. We cannot assure you that we will be successful in raising additional equity or debt capital or in obtaining additional debt financing on terms that would be acceptable to us. In addition, even if we raise additional equity or debt capital, we cannot be sure that we will be able to acquire any additional properties meeting our investment criteria on terms that would be acceptable to us. If we raise additional equity but are not able to invest it in additional properties that generate net income for us at least equivalent to the levels generated by our existing properties, our earnings per share could decrease. Since we have not identified any additional properties that we will for certain acquire, you will not have an opportunity to review additional real estate investments prior to the time you decide whether or not to consent to the merger agreement.


Additional real estate that we may acquire after the merger may not generate additional earnings or cash available for distribution to our stockholders.

We expect to acquire additional income-producing properties, mortgages, and other loans secured by real property after the merger agreement. These risks include the possibility that the properties or loans will not perform in accordance with our expectations, that we will pay too high of a purchase price for these additional properties or that we will underestimate financing costs, operating costs and the costs of any necessary improvements and repairs to additional properties. In addition, the economic returns from our real property investments may be affected by a number of factors, many of which are beyond our direct control. These factors include general and local economic conditions, the relative supply of like properties in the market area, interest rates on mortgage loans, the need for and costs of repairs and maintenance of the properties, government regulations and the cost of complying with them, taxes and inflation. As a result, the additional income-producing properties, mortgages, and loans secured by real property we acquire, if any, may not generate any additional earnings for us and may result in losses. We cannot assure you that acquiring additional properties will increase our earnings, and it may result in a reduction in our earnings. As a result, the amount of cash available for distribution to our stockholders and the market price of our common stock could decline after the merger agreement.

We may borrow money to buy more real estate, and this may limit our ability to pay distributions to our stockholders.

We expect to acquire more income-producing properties, mortgages, and loans secured by real property after the merger agreement and to finance these acquisitions in part with additional borrowings. An increase in our indebtedness would require additional cash for debt service which could result in less cash available for dividends to our stockholders and could increase the risk of default on our indebtedness. Payment of principal and interest on this indebtedness must be made before we can make distributions on our common stock.

Our obligation to make principal debt service payments, which are not treated as deductions for federal income tax purposes, does not relieve us from the obligation of distributing at least 90% of our REIT taxable income to our stockholders. In addition, our borrowings will be secured by first mortgages on our real estate assets. This exposes us to a risk of losing our interests in the assets given by us as collateral for secured borrowings if we are unable to make the required principal and interest payments when due. In addition, these assets may not be available to our stockholders in the event of the liquidation of Coronation to the extent that they are used to satisfy the amounts due to our creditors.

Fluctuating interest rates may affect our earnings because we may borrow money using adjustable-rate mortgages.

In some cases, we may finance the acquisition of additional income-producing properties, mortgages, and loans secured by real property with adjustable-rate mortgage debt. The interest rates on this debt will adjust based on prevailing market interest rates. If interest rates increase, we will have to pay more interest on this debt, but would not necessarily be able to increase rental income from the apartment properties financed by these mortgages. Therefore, an increase in interest rates may reduce our earnings, and this may reduce the amount of funds available for distribution to stockholders and the market price of our common stock. Federal tax laws applicable to REITs may substantially limit our ability to engage in hedging transactions to mitigate our exposure to fluctuations in interest rates.


If we finance additional real estate with tax exempt debt, it will subject these properties to certain restrictions.

We may use tax exempt housing bonds to finance the acquisition of additional apartment properties. While this type of financing offers lower interest rates than conventional financing, it subjects the financed property to numerous restrictive covenants, including a requirement that a percentage of the apartment units in each property be occupied by residents whose income does not exceed a percentage of the median income for the area in which the property is located. These covenants will remain in effect with respect to the apartment properties financed in this manner and it is possible that such covenants may cause the rents charged by these properties to be lowered, or rent increases foregone, in order to attract enough residents meeting the income requirements. In the event that we do not comply with these restrictions, the interest on the bonds could become subject to federal and state income tax, which would result in either an increase in the interest rate on the bonds or an early redemption of these bonds that would force us to obtain alternative financing or sell the properties securing the bonds.

The concentration of real estate in a geographical area may make us vulnerable to adverse changes in local economic conditions.

While we plan to diversify our portfolio of properties across several geographic regions and property types, we do not have specific limitations on the total percentage of our real estate properties that may be located in any one area. Consequently, properties that we own may be located in the same or a limited number of geographical regions. Currently, four of our apartment properties are located in Illinois. We do not have a policy that prohibits us from acquiring properties in markets in which we already own a property. Adverse changes in the economic conditions of the geographic regions in which our properties are concentrated may have an adverse effect on real estate values, rental rates, and occupancy rates. Any of these could reduce the rental income we earn from our real estate portfolio or the market value of these properties.

Our real estate investments may be illiquid and their value may decrease.

Our investments in income-producing properties, mortgages, and loans secured by real property are relatively illiquid. Our ability to sell these assets, and the price we receive upon their sale, will be affected by the number of potential buyers, the number of competing properties on the market in the area and a number of other market conditions. As a result, we cannot assure you that we will be able to sell these properties without incurring a loss.


Risks Relating To the Real Estate Industry

Owning real estate may subject us to liability for environmental contamination.

The owner or operator of real property may become liable for the costs of removal or remediation of hazardous substances released on its property. Various federal, state and local laws often impose such liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances. We cannot assure you that the properties that we currently own, or those we acquire in the future, will not be contaminated even though we intend to obtain standard environmental reviews of properties prior to their acquisition. The costs associated with the remediation of any such contamination may be significant and may exceed the value of the property causing us to lose our entire investment. In addition, environmental laws may materially limit our use of our properties, and future laws, or more stringent interpretations or enforcement policies of existing environmental requirements, may increase our exposure to environmental liability.

Compliance with Americans with Disabilities Act requirements could be costly.

Under the Americans with Disabilities Act of 1990, all public accommodations must meet federal requirements for access and use by disabled persons, unless the accommodations are exempt under a "grandfather" clause. A determination that one or more of our income-producing properties, mortgages, and loans secured by real property does not comply with the Americans with Disabilities Act could result in liability for both government fines and damages to private parties. If we were required to make unanticipated major modifications to comply with the Americans with Disabilities Act, it could adversely affect our profitability.

Failure to qualify as a REIT would have adverse tax consequences for us.

In order to obtain and maintain our status as a REIT we must meet a number of requirements. These requirements are highly technical and complex and often require an analysis of various factual matters and circumstances that may not be totally within our control. Even a technical or inadvertent mistake could jeopardize our REIT status. Furthermore, Congress and the IRS might make changes to the tax laws and regulations, and the courts might issue new rulings, that make it more difficult or impossible for us to obtain and remain qualified as a REIT. If we fail to qualify as a REIT, we would be subject to federal income tax at regular corporate rates. Therefore, we would have less money available for investments and for distributions to our stockholders and we would no longer be required to make any distributions to stockholders. Also, certain requirements may force officers, directors, and other control persons to sell their stock on the open market. This may also have a significant adverse effect on the market value of our common stock. In general, we would not be able to elect REIT status for four years after a year in which we lose our REIT status.

We are also subject to other tax liabilities.

Even if we qualify as a REIT, we may be subject to certain federal, state and local taxes on our income and property. Any of these taxes would reduce our operating cash flow.


As a REIT, our income can only come from limited types of sources.

To qualify as a REIT, at least 75% of our gross income must come from qualified real estate sources and 95% of our gross income must come from these and other sources that are itemized in the REIT tax laws. Therefore, we may have to forego opportunities to invest in potentially profitable businesses or assets because they would produce income that could jeopardize our status as a REIT.

As a REIT, we have certain distribution requirements.

As a REIT, we must distribute to our stockholders at least 90% of our REIT taxable income (excluding capital gains). This required distribution limits the amount we have available for other business purposes, including amounts to fund our growth. Also, it is possible that because of the differences between the time we actually receive revenue or pay expenses and the period in which we report those items for distribution purposes, we may have to borrow funds on a short-term basis to meet the 90% distribution requirement.

Forward Looking Statements

Certain statements and other information contained herein concerning future, proposed, and intended activities of Coronation post-merger or other matters that are not historical facts are forward-looking statements (as defined in the Securities Act of 1933). When used herein, the words "believe," "expect," "anticipate," "estimate," and similar expressions are intended to identify forward-looking statements. By their nature, forward-looking statements are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include those discussed under these "Risk Factors."

TERMS OF THE TRANSACTION

In addition to the other information contained in this information statement/prospectus, Supreme stockholders should carefully consider the following factors in evaluating the merger agreement, Coronation and its business.

Background of the Merger

Coronation was formed specifically to search for and engage in a merger or acquisition of a business opportunity. Coronation became a reporting issuer under the Securities Act of 1934 in July 2003. Since that time Mr. Miller, the President of Coronation, has reviewed a number of business plans. In late February or early March 2003, Mr. Miller was provided a business plan for Supreme by a long time business acquaintance Mr. Nick Segounis. Mr. Miller reviewed the plan and subsequently asked Mr. Segounis to introduce him to Mr. Thomas Elliott the President of Supreme. Mr. Miller shared information about Coronation with Mr. Elliott and after each company completed its respective review, Messrs. Miller and Elliott negotiated an agreement and plan of exchange and reorganization. This merger agreement was subsequently signed by the parties on March 31, 2003.


Reasons for the Merger

The respective board of directors and majority stockholders of each company spent considerable time reviewing the terms of the merger, the background of their respective business operations, management and the future business potential and plans of the combined entities.

Based on these and other considerations, the board of directors of each company together with their respective majority stockholders believe that the transactions contemplated by the merger agreement, including the name change of Coronation, share cancellation by Mr. Miller, and issuance of additional shares to Mr. Nick Segounis and SG Financial Services Group among other things are fair and in the best interest of each company.

The majority stockholders of Supreme believe that Supreme will benefit from the merger by the fact that Supreme will now be a reporting issuer with the Securities and Exchange Commission and as a result will be able to seek a listing for its shares on an exchange or quotation system. The board of directors and majority stockholders of Supreme believe this will also assist Supreme in raising the capital it requires to advance its business plans.

Summary of the Merger Agreement

The following contains, among other things, a summary of the material features of the merger agreement. This Summary does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the executed merger agreement a copy of which is attached to this information statement/prospectus as Exhibit 2 and is hereby incorporated by reference.

General Terms.

On March 31, 2003, Coronation and Supreme entered into an agreement and plan of exchange and reorganization which provides that subject to certain conditions, Supreme will be merged with Coronation with Coronation surviving the merger. Coronation, as the surviving entity will carry on the business of Supreme and own all of its assets and liabilities. The merger will become effective at the date and time that the certificate of merger is filed with the Secretary of State of Nevada or such later time as may be specified by the parties. Coronation and Supreme anticipate that this filing will be made as soon as practicable after the last of the conditions precedent to the merger, as set forth in the merger agreement, has been satisfied or waived.

Consideration to Be Received In the Merger.

At the effective time of the merger, each issued and outstanding share of Supreme will be converted into the right to receive 1.3953 shares of the common stock of Coronation. Coronation will not issue any fractional shares of common stock in connection with the merger. If fractional shares should occur as a result of the exchange rate, such fractional shares will be rounded down. Coronation will issue approximately 27,000,000 shares in exchange for all of the outstanding capital stock of Supreme.


Exchange of Shares.

The transfer agent of Supreme, Interstate Transfer Company of 6084 South 900 East, Suite 101, Salt Lake City, Utah 84121 will act as exchange agent in the merger. Subject to the terms and conditions of the merger agreement, Coronation will make available to the exchange agent from time to time on its request certificates representing the common stock of Coronation issuable in exchange for the outstanding shares of Supreme. As promptly as practicable after the effective time of the merger, Coronation will cause the exchange agent to send to each holder of record of shares of Supreme a letter of transmittal and instructions. Thereafter, holders of shares of Supreme may surrender their certificates to the exchange agent, together with a duly executed letter of transmittal. In exchange for such share certificates, holders will receive Coronation common stock certificates representing the applicable whole number of Coronation shares as described under "Consideration to be Received in the Merger" above. Stockholders of un-exchanged shares of Supreme will not be entitled to receive any dividends or distributions payable by Coronation with respect to those shares of common stock of Supreme issuable in respect of the shares of Supreme formerly represented by such un-exchanged Supreme certificates until the applicable Supreme certificate is surrendered. On surrender, however, subject to applicable laws, former Supreme stockholders will receive such distributions in respect of the whole Coronation shares received.

Effective Time of the Merger.

The merger will become effective at the date and time the certificate of merger is filed with the Secretary of State of the State of Nevada or at such later time as may be specified therein. It is anticipated that this filing will be made as soon as practicable after the last of the conditions precedent to the merger, as set forth in the merger agreement, has been satisfied or waived.

Principal Representations and Warranties.

The merger agreement contains a number of representations and warranties of Supreme, including those regarding due incorporation and good standing, capitalization, corporate authority to enter into the contemplated transactions, required consents and filings with government entities, absence of violation of any material agreement or debt instrument, financial statements, information supplied for use in this information statement/prospectus, absence of changes or events, compliance with law, brokers and advisors, and taxes.

The merger agreement also includes a number of representations and warranties of Coronation, including those regarding due incorporation and good standing, capitalization, corporate authority to enter into the contemplated transactions, required consents and filings with government entities, reports filed with the Securities and Exchange Commission, financial statements, information supplied for use in this information statement/prospectus, litigation, taxes, no payment to employees, officers or directors, compliance with laws, absence of violation of any material agreement or debt instrument, brokers and advisors and state takeover statutes.

Many of these representations and warranties are subject to a material adverse effect qualifier, which, for purposes of the merger agreement, means, with respect to Coronation or Supreme, as the case may be, a material adverse effect on the business, assets, liabilities, results of operations, condition (financial or otherwise) or prospects of either party and its subsidiaries, taken as a whole.


The representations and warranties contained in the merger agreement will not survive the merger, but they form the basis of conditions to Coronation's and Supreme's obligations to complete the merger.

Conditions to the Consummation Of The Merger.

Conditions to Each Party's Obligations to Effect the Merger. Each party's obligation to consummate the merger is subject to the satisfaction or waiver of the following conditions:

  (a) Shareholder Approvals. The irrevocable consent of the holders of a majority of the outstanding shares of each company delivered on filing this information statement/prospectus with the Securities and Exchange Commission will be in full force and effect and will constitute the requisite consent of the stockholders of each party to the merger and the adoption of the merger agreement under their respective governing corporate laws and their articles of incorporation and bylaws.
  (b) Form S-4 Registration Statement. The registration statement, of which this information statement/prospectus is a part, will have become effective under the Securities Act of 1933 and all applicable state securities laws and will not be the subject of any stop order or proceedings seeking a stop order and no stop order or similar restraining order will be threatened or entered by the Securities and Exchange Commission or any state securities administration preventing the merger. In addition, 20 business days must have elapsed since this information statement/prospectus was mailed to Supreme' stockholders.
  (c) No Injunctions or Restraints. No judgment, order, decree, statute, law, ordinance, rule or regulation entered, enacted, promulgated, enforced or issued by any court or other governmental entity of competent jurisdiction or other legal restraint or prohibition will be in effect preventing the consummation of the merger.

Additional Conditions to Obligations of Coronation. The obligation of Coronation to consummate the merger is further subject to the satisfaction of the following additional conditions, which may be waived in writing exclusively by Coronation:

  (a) Representations and Warranties. The representations and warranties of Supreme included in the merger agreement to the extent qualified as to a material adverse effect will be true and correct in all respects, and to the extent the representations are not qualified as to a material adverse effect will have been true and correct in all material respects as of the date of the merger agreement and at and as of the effective time of the merger, as if made at and as of that time except to the extent expressly made as of an earlier date, in which case on that date. Supreme will have delivered to Coronation an officer's certificate, in form and substance satisfactory to Coronation and its counsel, relating to the matters addressed in this clause (a) and clauses (b) and (c) below.
  (b) Performance of Obligations of Supreme. Supreme will have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing of the merger.
  (c) No Material Adverse Change. Since the date of the merger agreement there will not have occurred any material adverse change in the business, assets, liabilities, results of operations, condition (financial or otherwise) or prospects of Supreme and its subsidiaries, taken as a whole.

Additional Conditions to Obligations of Supreme. The obligation of Supreme to effect the merger is subject to the satisfaction of each of the following additional conditions, any of which may be waived in writing exclusively by Supreme:

  (a) Representations and Warranties. The representations and warranties of Coronation included in the merger agreement to the extent qualified as to a material adverse effect will be true and correct in all respects, and to the extent the representations are not qualified as to a material adverse effect will have been true and correct in all material respects, as of the date of the merger agreement and at and as of the effective time of the merger, as if made at and as of that time except to the extent expressly made as of an earlier date, in which case on that date. Coronation will have delivered to Supreme an officer's certificate, in form and substance satisfactory to Supreme and its counsel, relating to the matters addressed in this clause (a) and clauses (b) and (c) below.
  (b) Performance of Obligations of Coronation. Coronation will have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing of the merger.
  (c) No Material Adverse Change. Since the date of the merger agreement there will not have occurred any material adverse change in the business, assets, liabilities, results of operations, condition (financial or otherwise) of Coronation.

Termination of the Merger Agreement.

The merger agreement may be terminated at any time prior to the effective time of the merger:

  (a) by mutual written consent of Coronation and Supreme;
  (b) by Supreme, if Coronation shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the merger agreement, which breach is not cured by May 1, 2003;
  (c) by Coronation, if Supreme shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the merger agreement, which breach is not cured by May 1, 2003;
  (d) by either Coronation or Supreme if the merger has not been consummated by June 30, 2003; provided, however, the right to terminate the merger agreement under this clause (b) will not be available to any party whose breach of any obligation under the merger agreement resulted in the failure of the merger to occur on or before that date;

Expenses of Merger.

Supreme has agreed to pay all expenses incurred in connection with the merger, other than the preparation of financial statements, SEC filings, exhibits, etc. of Coronation.


Related Transactions to Merger

Name Change.

Coronation has agreed to change its name concurrently with closing the merger agreement. The new name "Supreme Realty Investment Trust, Inc." is intended to convey more clearly a sense of Coronation's business after the merger with Supreme. Approval of the name change requires the affirmative consent of at least a majority of the outstanding shares of Common Stock of Coronation. 100% of the shares of common stock of Coronation have been voted by consent resolution in support of this action.

Appointment of New Slate of Directors.

Under the terms of the merger agreement, Mr. Harry Miller will resign from the board of directors of Coronation and Messrs. Thomas Elliott and Jean LeRoy will be appointed as new directors of Coronation at the time of closing the merger. The appointment of the new directors at the time of closing the merger has been approved by consent resolution of 100% of the shares issued and outstanding. (See Voting and Management Information for complete information about Messrs. Elliot and LeRoy).

Issuance of Additional Shares of Coronation.

The board of directors of Supreme and Coronation have agreed to issue 1,650,000 shares of the common stock of Coronation to two parties, Mr. Nick Segounis and SG Financial Services Group. These shares will qualified under this information statement/prospectus and be issued to Mr. Nick Segounis and SG Financial Services Group on closing the merger agreement. These two parties were integral in introducing Supreme and Coronation to one another.

Cancellation of 3,650,000 Shares of Coronation.

Mr. Harry Miller has agreed to return to Coronation's treasury for cancellation 3,650,000 shares of common stock he acquired on March 2, 2000. Mr. Miller will retain 1,350,0000 shares of common stock of Coronation of the 5,000,000 shares he previously held. Mr. Miller is currently the sole director, officer and stockholder of Coronation.

Qualification of Shares Held by Mr. Miller for Resale.

Mr. Harry Miller, Coronation's sole officer, director and stockholder just prior to the merger will hold 1,350,000 shares of common stock of Coronation on closing of the merger agreement. This number will represent 4.5% of the total issued and outstanding shares of Coronation at that time. Although Mr. Miller acquired these shares on March 2, 2000, over three years ago, he is unable to sell these securities pursuant to Section 4(1) or Rule 144 of the Securities Act of 1933 as Coronation was a blank check company at the time he acquired these shares.

Section 4(1) and Rule 144 provide an exemption from the registration requirements of the Securities Act of 1933 when reselling securities acquired in a private transaction or securities which are held by directors, officers, 10% holders or other affiliates. The exemption is available subject to certain hold periods and informational requirements being met. If Coronation had been an operational company versus a blank check company at the time Mr. Miller acquired his shares in Coronation he would be able to sell approximately 299,879 shares per quarter on close of the merger agreement pursuant to Rule 144.


In a letter to NASD Regulation, Inc. dated January 21, 2000, the Securities and Exchange Commission staff advised that persons who hold securities in blank check companies are probably underwriters of those securities. As a result, the only way securities of a blank check company may be resold is through registration under the Securities Act of 1933. It is for this reason Mr. Miller desires to register for resale the 1,350,000 shares of common stock of Coronation he will continue to hold after the close of the merger agreement.

Mr. Miller may chose to sell all or none of the shares he holds in negotiated private transactions or wait until the shares of Coronation are quoted for trading on a national market or quotation system and then offer his stock at prevailing market prices, or again at privately negotiated prices. There can be no certainty that the shares of Coronation will ever trade in a public market.

Voluntary Escrow Agreement

The stockholders of Supreme and Coronation have agreed to enter into a voluntary escrow agreement on close of the merger. The escrow agreement is being entered into in order to assist management in raising funds either through future securities offerings or traditional bank financing. The stockholders have agreed to a release formula whereby 25% of their stockholdings will be released immediately; thereafter, 75% of their stockholdings will be held in escrow will not be released until Coronation has obtained $ 3,000,000 in new funding to advance its business plans. After this initial funding has been obtained 25% of the total amount number of shares held in escrow will be released immediately on a pro rata basis every three months until no shares remain in escrow. The Supreme stockholders will be the owners of record of the escrow shares and will be entitled to all rights as holders of such shares (including voting and dividend rights), but will not be able to transfer such shares until the certificates are released by the escrow agent. The escrow agreement will terminate when all of the shares of Coronation common stock held in escrow have been released and distributed to Supreme's stockholders.  A copy of the escrow agreement has been attached as Exhibit 4.2.

Description of Securities

Common Stock.

Coronation is authorized to issue 100,000,000 shares of common stock, par value $0.00001 per share. Coronation has no other classes of stock. As of May 27, 2003, Coronation had outstanding 5,000,000 shares of common stock. All shares of the common stock are equal to each other with respect to voting, dividend rights and liquidation rights.

Special meetings of the stockholders may be called by the President or board of directors of Coronation, or on the request of holders of at least ten percent of the outstanding voting shares. Stockholders of shares of the common stock are entitled to one vote at any meeting of the stockholders for each share of the common stock they own as of the record date fixed by the board of directors. At any meeting of stockholders, a quorum consists of fifty percent plus one of the outstanding shares of the common stock of Coronation entitled to vote, represented in person or by proxy.


There is no conversion, pre-emptive or other subscription rights or privileges with respect to any share. Reference is made to the certificate of incorporation and bylaws of Coronation as well as to the applicable statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of shares in the capital stock of Coronation. It should be noted that the Bylaws may be amended by the board of directors without notice to the stockholders.

Non-Cumulative Voting.

The shares of the common stock of Coronation do not have cumulative voting rights, which means that the holders of more than fifty percent of the shares of the common stock voting for election of directors may elect all the directors if they choose to do so. In such event, the holders of the remaining shares aggregating less than fifty percent will not be able to elect directors.

Dividends.

The payment of dividends by Coronation, if any, in the future, rests within the discretion of its Board of Directors and will depend, among other things, on its earnings, its capital requirements and its financial condition, as well as other relevant factors. Coronation has not paid a cash or stock dividend and does not anticipate paying any cash or stock dividends in the foreseeable future. (See Risk Factors).

Transfer Agent.

The transfer agent for the common stock of Coronation is Nevada Agency & Trust Co., 50 West Liberty Street, Suite 880, Reno, Nevada 89501. After the merger, the transfer agent will be Interstate Transfer Company of 6084 South 900 East, Suite 101, Salt Lake City, Utah 84121.

Comparison of Stockholder Rights

A summary comparison of material differences between the rights of a Coronation stockholder under Coronation's articles of incorporation and bylaws (left column) and the rights of a Supreme stockholder under Supreme's current certificate of incorporation and bylaws (right column) is shown below. These summaries are not complete. We encourage stockholders to refer to the relevant portions of Coronation's articles of incorporation and bylaws, and Supreme's current certificate of incorporation and bylaws and the relevant provisions of Nevada and Illinois corporate law, respectively.


Coronation

 

Supreme

     
General
Coronation is a Nevada corporation subject to the provisions of the Chapter 78 of the Nevada Revised Statutes.   Supreme is a Illinois corporation subject to the provisions of the Business Corporation Act of the State of Illinois.
The rights of Coronation stockholders are governed by Coronation's articles of incorporation and bylaws, in addition to Nevada law.   The rights of Supreme stockholders are governed by Supreme's articles of incorporation and bylaws, in addition to Illinois law.
     
Amendment of Articles/Certificate of Incorporation
The articles of incorporation and by-laws of Coronation are silent as to amendment of the articles of incorporation. Under Nevada law, amendment of the articles of incorporation requires: (1) an authorization by the board; followed by (2) notification to all stockholders setting forth the proposed amendment; and (3) a vote of the majority of all outstanding voting shares.   Supreme's articles of incorporation and bylaws may be amended by the shareholders in accordance with a duly adopted resolution of the board of directors. Under Illinois law, amendment of the articles of incorporation requires: (1) an authorization by the board; followed by (2) a vote of the majority of all outstanding voting shares and a majority of all outstanding shares entitled to vote thereon as a class.
 
Directors    
Number    
The articles of Coronation provide that the number of directors shall be not more than nine nor less than one, with the actual number to be determined by the board of directors   Bylaws of Supreme provide that the number of directors shall be no less than one and no more than ten, with the actual number to be determined prior to the election of directors at the annual meeting of stockholders.
The current number of directors is one (1).   The current number of directors is two (2).
 
Removal
Nevada laws provide that directors may be removed with or without cause by a vote of stockholders holding two-thirds of the outstanding shares entitled to vote.   The Supreme bylaws provide that directors may be removed either with or without cause by a majority of the shares entitled to vote in the election of directors.
 
Vacancies
The Coronation bylaws provide that a vacancy occurring in the board of directors may be filled by a majority of the remaining directors, even if less than a quorum. The board of directors may elect a director at any time to fill any vacancy.   The Supreme bylaws provide that a vacancy on the board of directors may be filled by vote of the Supreme board of directors. If, however, the number of directors is less than a quorum, vacancies may be filled by vote of a majority of the directors then in office.
Special Meetings Of Stockholders
The Coronation bylaws provide that a special meeting of the stockholders may be called in accordance with the articles and the laws of Nevada.   The Supreme bylaws provide that a special meeting of stockholders for any purpose may be called at any time by:
  • the chief executive officer;
  • request of a majority of Supreme' board of directors; or
  • Supreme' corporate secretary upon the written request of the holders of not less than 25% of the shares of stock outstanding entitled to vote.

     
Stockholder Action Without Meeting
The Coronation bylaws provide that any action which may be taken at a meeting of the stockholders may be taken without a meeting if a consent resolution in writing, setting forth the action so taken, shall be signed by a majority, or greater if required to pass that action, by the stockholders entitled to vote.   The Supreme bylaws provide that any action required or permitted to be voted on may be consented to in writing without a meeting so long as such written consent sets forth the action so taken and is signed by the holders of outstanding shares entitled to vote thereon 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.

Accounting Treatment of the Merger

On closing of the merger agreement, based on management's consultation with the auditors for Supreme and the auditors of Coronation, it appears that the proper accounting treatment is a so-called "reverse acquisition," whereby Supreme will account for the transaction as a purchase of Coronation. Supreme is deemed to be the "acquirer" due to the common stockholders of Supreme ultimately controlling the reorganized company.

The merger will be treated as a "purchase" for accounting purposes.

Certain Federal Income Tax Consequences

The following discussion is limited to the material federal income tax consequences of the proposed merger and does not discuss state, local, or foreign tax consequences or all of the tax consequences that might be relevant to an individual stockholder of Supreme. Neither Coronation or Supreme have sought an opinion as to the tax consequences of the merger, however, the parties believes that the merger will qualify for federal income tax purposes as a tax free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code"). As such, Coronation and Supreme will not recognize a gain or loss as a result of the merger. Nor will the stockholders of Coronation and Supreme recognize a gain or loss.

These conclusions are based on the federal income tax laws currently in effect, including the Internal Revenue Code of 1986, as amended, final and proposed Treasury Regulations, published rulings and administrative practices of the Internal Revenue Service and court decisions which are subject to change, and in some cases not binding on the Internal Revenue Service or the court. Any change could alter the tax consequences of this merger. No advance income tax rulings have been sought from the Internal Revenue Service with respect to any of the transactions contemplated under the merger agreement. If the Internal Revenue Service were to successfully challenge Coronation and Supreme's determinations described above, Coronation may be required to recognize taxable income in an amount equal to the value of the shares of common stock of Coronation issued to the stockholders of Supreme.


You Are Urged to Consult Your Own Tax Advisor as to Specific Tax Consequences to You by the Merger Including Tax Return Reporting Requirements and the Applicability and Effect of Federal, State, Local, Foreign, and Other Applicable Tax Laws.

Pro Forma Financial Information

The pro forma unaudited combined consolidated balance sheet and statement of operation for the year ended December 31, 2002 were prepared based upon audited historical statements of operations of Coronation and Supreme after giving effect to the merger as a purchase of Supreme by Coronation using the purchase method of accounting and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined consolidated financial statements.

Under the purchase method of accounting, the total estimated purchase price, calculated as described in Note 1 to these unaudited pro forma condensed combined consolidated financial statements, is allocated to the net tangible and intangible assets of Supreme acquired in connection with the merger, based on an estimate of their fair values as of the completion of the merger.

The accompanying pro forma combined condensed consolidated financial statements are provided for informational purposes only. They are not necessarily indicative of the results that will be achieved for future periods. The accompanying pro forma condensed consolidated financial statements do not purport to represent what Coronation's results of operations or financial position would actually have been if the merger had, in fact, occurred on December 31, 2002. You should read the accompanying pro forma condensed consolidated financial statements and the related notes in conjunction with the audited and unaudited financial statements included elsewhere in this information statement/prospectus.

[Pro Forma Statements Begin on Next Page]


CORONATION ACQUISITION CORP.

Unaudited Pro Forma Combined Consolidated Balance Sheet

As of December 31, 2002

 
   

Historical

       
   
Coronation
 


Supreme

 

Pro Forma Adjustments

 

Pro Forma
Combined

ASSETS:                
Current Assets:                
Cash & Cash Equivalents $

0

$

2,000

$

 

$

2,000

Marketable Securities  

-

 

-

     

-

Accounts Receivable  

-

 

-

     

-

Prepaid Expenses  

-

 

-

     

-

Total Current Assets

 

-0       -

 

2,000

     

2,000

Loans & Securities Investments:

               

Investments in Partnerships

 

-

 

-

     

-

Real Estate Loans

 

-

 

-

     

-

Real Estate Loans held for Sale

 

-

 

-

     

-

Investments in Affiliates

 

-

 

100,000

     

100,000

Total Loans & Securities Investments

 

-

 

100,000

     

100,000

Real Estate Investments:                
Existing Properties  

-

 

425,700

     

425,700

New Property Acquisitions  

-

 

1,540,300

     

1,540,300

Gross Properties  

-

 

1,966,000

     

1,966,000

Less: Accumulated Deprec.  

-

 

(18,485)

     

(18,485)

Land & Other Non-Depreciable
Property
 

-

 

-

     

-

Total Real Estate Investments

 

-

 

1,947,515

     

1,947,515

                 

Total Investments before Loss
Reserves

 

-

 

2,047,515

     

2,047,515

Less: Loan Loss Reserves  

-0-        

 

-0-

     

-0-

Total Investments

 

-

 

2,047,515

     

2,047,515

Other Assets:                
Goodwill and Other Intangible
Assets
 

-

 

30,000

     

30,000

Less: Amortization  

-

 

(12,000)

     

(12,000)

Furniture/Fixtures/Equipment  

-

 

11,140

     

11,140

Less: Accumulated Deprec.  

-

 

(1,706)

     

(1,706)

Total Other Assets

 

-0-        

 

27,434

     

27,434

                 

TOTAL ASSETS

 

-0-       

 

2,076,949

     

2,076,949

LIABILITIES:                
Current Liabilities  

446

 

5,064

     

5,510

Notes Payable  

2,390

 

40,600

     

42,990

Mortgages Payable  

-

 

1,255,000

     

1,255,000

Total Liabilities

 

2,836

 

1,300,664

     

1,303,500

STOCKHOLDER'S EQUITY:                
Common Stock  

50

 

19,342

     

1,984

Preferred Stock  

n/a

 

-0-

     

n/a

Additional Paid In Capital  

450

 

722,897

     

740,755

Retained Earnings(Deficit)  

(3,336)

 

34,046

       

Total Stockholder Equity

 

(2,836)

 

885,316

     

882,480

                 

TOTAL LIABILITIES & EQUITY

   $

-0-        

$

2,076,949

$

2,076,949


The accompanying notes are an integral part of these financial statements.


CORONATION ACQUISITION CORP.

Unaudited Pro Forma Combined Consolidated Statement of Operations

As of December 31, 2002

 
   

Historical

       
   


Coronation

 


Supreme

 

Pro Forma Adjustments

 

Pro Forma
Combined

REVENUES:                

Rental Income

$

-0-       

$

174,864

$

 

$

174,864

Mortgage Interest Income

 

-

 

-0-

     

-0-

Investment Income

 

-

 

-0-

     

-0-

Fee Income

 

-

 

84,835

     

84,835

Gain on Sale of Loans

 

-

 

-0-

     

-0-

TOTAL REVENUES

 

-0-       

 

259,699

     

259,699

                 
EXPENSES:  

-

           

Salaries, Commissions, and Employee Benefits

 

-

 

49,553

     

49,553

General & Administrative

 

2,756

 

26,958

     

29,714

Property Operating Expenses

 

-

 

79,805

     

79,805

Interest Expense

 

-

 

43,723

     

43,723

Depreciation and Amortization

 

-

 

24,885

     

24,885

TOTAL EXPENSES

 

2,756

 

224,924

     

227,680

   

-

           

NET INCOME (LOSS) Before Taxes and Extraordinary Items

 

(2,756)

 

34,775

     

32,019

Provision for Income Taxes

 

-

 

(5,216)

     

(4,802)

Extraordinary Gains(Losses)

 

-

 

-0-

     

-0-

NET INCOME

 

(2,756)

 

29,558

     

27,216

Add: Depreciation and Amortization

 

-

 

24,885

     

24,885

                 

FUNDS FROM OPERATIONS (FFO)

$ (2,756)

$

54,444

     

52,101

                 

Per Share Data -Basic

   

-

           
Weighted Average Common Shares Outstanding  

5,000,000

 

19,342,000

       
                 
NET INCOME(LOSS) Before Taxes and Extraordinary Items

$

(0.0006)

$

0.0019

   

$

 
                 

NET INCOME

 

(0.0006)

 

0.0016

       
                 

FUNDS FROM OPERATIONS (FFO)

$

(0.0006)

$

0.0028

   

$

 
                 

Per Share Data -Diluted

Weighted Average Common Shares Outstanding      

19,342,000

       
                 
NET INCOME (LOSS) Before Extraordinary Items

$

(0.0006)

$

0.0019

   

$

 

Extraordinary Gains (Losses)

               

NET INCOME

$

(0.0006)

 

0.0016

       
                 

FUNDS FROM OPERATIONS (FFO)

$

(0.0006)

$

0.0028

   

$

 
                 

The accompanying notes are an integral part of these financial statements.


Notes to Unaudited Pro Forma Consolidated Financial Statements of Coronation

Note 1 -  Basis of Pro Forma Presentation

On March 31, 2003, Coronation and Supreme entered into a merger agreement, which will result in Supreme merging into Coronation with Coronation as the surviving entity in a transaction to be accounted for using the purchase method. For a discussion regarding the primary reasons for this transaction, see "Reasons for the Transaction" on page 22.

The unaudited pro forma combined consolidated financial statements provide for the issuance of approximately 27,000,000 million shares of Coronation's common stock, based upon an exchange ratio of 1.3953 for each share of Supreme outstanding as of May 27, 2003. The actual number of shares of Coronation common stock to be issued will be determined based on the actual number of shares of Supreme common stock outstanding at the completion of the merger.

Under the purchase method of accounting, the total estimated purchase price is allocated to Supreme's net tangible and intangible assets based on their estimated fair values as of the date of the completion of the merger. Based on the preliminary valuation, and subject to material changes upon development of a final valuation and other factors as described in the introduction to these unaudited pro forma combined consolidated financial statements on page 20 of this proxy statement-prospectus, the preliminary estimated purchase price is allocated as follows:

           
Cash and cash equivalents  

$

2,000

 
Loans and Securities Investments    

100,000

 
Real Estate Investments    

1,947,515

 
Prepaid and other assets    

0

 
Accounts payable and accrued liabilities    

(5,064

)
Long-term debt    

(1,255,00

)
Other long-term liabilities    

(40,600

)
         
  Net tangible assets assumed  

$

748,851

 
         
Net tangible assets assumed  

$

748,851

 
Amortizable intangible assets    

-0-

 
Goodwill    

30,000

 
        *
         
         
  Total preliminary estimated purchase price allocation  

$

778,851

 
     
 

Of the total estimated purchase price, a preliminary estimate of $748,851 has been allocated to net tangible assets assumed and approximately $ -0- has been allocated to amortizable intangible assets acquired. The depreciation and amortization related to the fair value adjustment to net tangible assets and the amortization related to the amortizable intangible assets are reflected as pro forma adjustments to the unaudited pro forma condensed combined consolidated statements of operations.


Of the total estimated purchase price, approximately $30,000 has been allocated to goodwill. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. Goodwill is not deductible for tax purposes.

In accordance with the Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," goodwill resulting from business combinations completed subsequent to June 30, 2001 will not be amortized but instead will be tested for impairment at least annually (more frequently if certain indicators are present). In the event that the management of the combined company determines that the goodwill has become impaired, the combined company will incur an accounting charge for the amount of impairment during the fiscal quarter in which the determination is made.

Pro forma adjustments are necessary to reflect the estimated purchase price, to adjust amounts related to Supreme's net tangible and intangible assets to a preliminary estimate of their fair values, to reflect the amortization expense related to the estimated amortizable intangible assets, to reflect changes in depreciation and amortization expense resulting from the estimated fair value adjustments to net tangible assets, to adjust certain Supreme amounts to conform to Coronation' accounting policies, and to reflect the income tax effect related to the pro forma adjustments.

The unaudited pro forma condensed combined consolidated financial statements do not include any adjustments for liabilities relating to Emerging Issues Task Force (EITF) No. 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." Coronation is in the process of making these assessments and estimates of these costs are not currently known. The expected result of recording liabilities relating to EITF No. 95-3 will be primarily related to accrued liabilities (severance and facilities costs) with an offsetting increase in goodwill.

Coronation has not identified any pre-acquisition contingencies where the related asset, liability or impairment is probable and the amount of the asset, liability or impairment can be reasonably estimated. Prior to the end of the purchase price allocation period, if information becomes available which would indicate it is probable that such events have occurred and the amounts can be reasonably estimated, such items will be included in the purchase price allocation.

Note 2 -Pro Forma Adjustments

The pro forma adjustments included in the unaudited pro forma condensed combined consolidated financial statements are as follows:  

     
(a)   Adjustment to record the difference between the preliminary estimate of the fair value and the historical amount of Supreme's inventory of real estate property. An adjustment to the statement of operations has not been recorded as it does not have a continuing impact on the business.
     
(b)   Adjustment to the deferred tax assets based on a preliminary estimate of the tax assets which can be utilized by the combined company and to reflect the deferred tax liability primarily resulting from the pro forma adjustments related to intangible assets.
     
(c)   Adjustment to record the difference between the preliminary estimate of the fair value and the historical amount of Supreme's property and equipment and the resulting adjustment to depreciation expense.

(d)   Adjustments to eliminate historical intangible assets of Supreme and record the decrease in amortization expense.
     
(e)   Adjustment to reflect the preliminary estimate of the fair value of goodwill.
     
(f)   Adjustment to reflect the estimated direct transaction costs.
     
(g)   Adjustment to record the present value of certain other long-term liabilities.
     
(h) Adjustment to record the income tax effect of the pro forma adjustments and reflect the tax benefit associated with the Supreme net loss.
     
(i) Adjustment to eliminate capitalized debt issuance costs of Supreme and the related decrease in amortization expense.

Note 3 -  Pro Forma Earnings Per Share

The pro forma basic and diluted earnings per share are based on the weighted average number of shares of Coronation common stock outstanding and weighted average number of Supreme common stock outstanding multiplied by the exchange ratio. The weighted average number of Coronation diluted shares has been adjusted to reflect cancellation of 3,650,000 shares of common stock and the issuance of 1,650,000 shares to two unrelated parties at the time of the merger closing.

Selling Stockholders

In general and in addition to the shares being qualified for resale by Mr. Miller discussed elsewhere in this information statement/prospectus, the persons to whom we issue securities under this information statement/prospectus will be able to resell Coronation's securities in the public market (assuming one develops) without further registration and without being required to deliver a prospectus. However, certain persons who receive Coronation's securities may want to resell those securities in distributions that would require the delivery of a prospectus. With the consent of the board of directors of Coronation, this prospectus may be used by selling stockholders who may wish to sell securities. As used in this prospectus, "selling security holders" may include donees, distributees and pledgees of securities received from a named selling security holder. The board of directors may limit its consent to a specified time period and subject its consent to certain limitations and conditions, which may vary by agreement.

Selling security holders may sell securities from time to time in one or more of the following transactions:

  •  
through the BBXchange or any other securities exchange that may quote the common stock of Coronation in the future;
  •  
in the over-the-counter market;
  •  
in transactions other than on such exchange or in the over-the-counter market including negotiated transactions and other private transactions);

  •  
in short sales (sales of shares completed by the delivery of borrowed stock) of the common stock, in transactions to cover short sales or otherwise in connection with short sales;
  •  
pledge to secure debts and other obligations or on foreclosure of a pledge;
  •  
through put or call options, including the writing of exchange-traded call options, or other hedging transactions related to the common stock; or
  •  
in a combination of any of the above transactions.

Selling security holders may enter into hedging transactions from time to time in which a selling security holder may:

  •  
in a combination of any of the above transactions.
  •  
enter into transactions with a broker-dealer or any other person in connection with which such broker-dealer or other person will engage in short sales of common stock, in which case such broker-dealer or other person may use shares of common stock received from the selling security holder to close out its short positions
  •  
sell common stock short itself and redeliver shares offered by this prospectus to close out its short positions or to close out stock loans incurred in connection with their short positions;
  •  
enter into option or other types of transactions that require the selling security holder to deliver common stock to a broker-dealer or any other person, who will then resell or transfer the common stock under this prospectus; or
  •  
loan or pledge the common stock to a broker-dealer or any other person, who may sell the loaned shares or, in an event of default in the case of a pledge, sell the pledged shares under this prospectus.

Selling security holders may use broker-dealers or other persons to sell their shares in transactions that may include one or more of the following:

  •  
loan or pledge the common stock to a broker-dealer or any other person, who may sell the loaned shares or, in an event of default in the case of a pledge, sell the pledged shares under this prospectus.
  •  
a block trade in which a broker-dealer or other person may resell a portion of the block, as principal or agent, in order to facilitate the transaction;
  •  
purchases by a broker-dealer or other person, as principal, and resale by the broker-dealer or other person for its account; or
  •  
ordinary brokerage transactions and transactions in which a broker solicits purchasers.

Resales by selling security holders may be made directly to investors or through securities firms acting as underwriters, brokers or dealers. When resales are to be made through a securities firm, the securities firm may be engaged to act as the selling security holder's agent in the resale of the shares by the selling security holder, or the securities firm may purchase securities from the selling security holder as principal and thereafter resell the securities from time to time. The fees earned by or paid to the securities firm may be the normal stock exchange commission or negotiated commissions or underwriting discounts to the extent permissible. Securities may be sold at a fixed offering price, which may be changed, at the prevailing market price at the time of sale, at prices related to such prevailing market price or at negotiated prices. The securities firm may resell the securities through other securities dealers, and commissions or concessions to those other dealers may be allowed. We and such selling security holders may indemnify any securities firm participating in such transactions against certain liabilities, including liabilities under the Securities Act of 1933 and may reimburse them for any expenses in connection with an offering or sale of securities. We may also agree to indemnify the selling security holder against any such liabilities or reimburse them for expenses. Profits, commissions and discounts on sales by persons who may be deemed to be underwriters within the meaning of the Securities Act of 1933 may be deemed underwriting compensation under the Securities Act of 1933.


Selling security holders may also offer shares of common stock covered by this information statement/prospectus by means of prospectuses under other registration statements or pursuant to exemptions from the registration requirements of the Securities Act of 1933, including sales that meet the requirements of Rule 144 or Rule 145(d) under the Securities Act of 1933. Selling security holders should seek the advice of their own counsel about the legal requirements for any sales by them.

The terms of the acquisition of shares of common stock by the selling security holder may include a provision for the sharing or reallocation of the selling security holder's costs in connection with the resale of the securities, including the cost of registering the securities issued in the acquisition and preparing and printing the amendment or supplement, commissions and other costs of resale.

This prospectus will be amended or supplemented, if required by the Securities Act of 1933 and the rules of the Securities and Exchange Commission, to disclose the name of the selling security holder, the participating securities firm, if any, the number of shares of common stock involved and other information concerning the resale, including the terms of any distribution, including the names of any underwriters, brokers, dealers or agents and any discounts, commissions, concessions or other items constituting compensation. We may agree to keep the registration statement relating to the offering and sale by the selling security holders of Coronation's securities continuously effective until a fixed date or the date on which the shares may be resold without registration under the Securities Act of 1933.

Selling stockholders should be aware that the anti-manipulative rules under the Securities Exchange Act of 1934, including Regulation M, may apply to their sales in the market. Regulation M consists of six rules. Rule 100 is a definitional rule. Rule 101 covers the activities of underwriters, broker-dealers, and others participating in a distribution. Rule 102 governs the activities of issuers and selling security holders. Rule 103 pertains to Nasdaq passive market making. Rule 104 governs stabilization transactions and certain post-offering activities by the underwriters, and Rule 105 governs short selling in anticipation of a public offering. With certain exceptions, Regulation M precludes us and any selling stockholder, any affiliated purchasers and any broker-dealer or other person who participates in a distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchase made in order to stabilize the price of a security in connection with a market offering. We strongly recommend selling stockholders to consult with their own legal counsel to ensure compliance with Regulation M. All of the foregoing may affect the marketability of the shares of common stock of Coronation post-merger.


Interests of Named Experts and Counsel

Derwin Richardson, Esq., corporate counsel for Supreme, is to receive 139,593 shares of the common stock of Coronation post-merger as consideration for legal services rendered in connection with his involvement in the preparation of this information statement/prospectus.

Disclosure of Commission Position on Indemnification for Securities Act Liabilities

The merger agreement described in this information statement/prospectus provides for Coronation to indemnify and hold harmless, any officer, director, or employees of Coronation or Supreme against losses, claims, liabilities, expenses (including reasonable attorneys' fees and expenses), judgments, fines and amounts paid in settlement in accordance herewith in connection with any threatened or actual claim, action, suit, proceeding or investigation.

In the event that a claim for indemnification against such liabilities (other than the payment by Coronation of expenses incurred or paid by a director, officer or controlling person of Coronation in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered,

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 Securities Act of 1933 and is, therefore, unenforceable.

Coronation will, unless in the opinion of its counsel, that the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

INFORMATION ABOUT CORONATION ACQUISITION CORP.

Description of Business

Formation.

Coronation was incorporated on February 9, 2000 in the State of Nevada, to engage in any lawful corporate undertaking, including, but not limited to, acquiring a business through a merger and acquisition.

Coronation's Business Pre-Merger.

Coronation has been in the developmental stage since inception and has no operations to date. Coronation has never commenced any operational activities other than issuing shares to its sole stockholder and looking for a suitable merger or acquisition candidate. As such, Coronation can be defined as a "shell" or "blank check" company, whose sole purpose at this time is to locate and consummate a merger or acquisition with a private entity.


Coronation will adopt the business of Supreme on successfully closing the merger agreement.

Governmental Regulation.

Sarbanes-Oxley Act of 2002. On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, or the SOA. SOA imposes a wide variety of new requirements on both U.S. and non-U.S. companies, that file or are required to file periodic reports with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Many of these new requirements will effect Coronation and its board of directors. For instance, under SOA Coronation is required to:

  •  
form an audit committees in compliance with SOA;
  •  
have its chief executive office and chief financial officer certify its financial statements;
  •  
ensure its directors and senior officers forfeit all bonuses or other incentive-based compensation and profits received from the sale of its securities in the twelve month period following initial publication of any of its financial statements that later require restatement;
  •  
disclose any off-balance sheet transactions as required by SOA;
  •  
prohibit all personal loans to directors and officers;
  •  
insure directors, officers and 10% stockholders file their Forms 4's within two days of a transaction;
  •  
adopt a code of ethics and file a Form 8-K when ever there is a change or waiver of this code; and
  •  
insure Coronation's auditor is independent as defined by SOA.

SOA has required Coronation to review its current procedures and policies to determine whether they comply with the SOA and the new regulations promulgated under SOA. Coronation will continue to monitor its compliance with all future regulations that are adopted under the SOA and will take whatever actions are necessary to ensure that Coronation is in compliance.


Investment Company Act of 1940. Although Coronation is subject to regulation under the Securities Act of 1933 and the Securities Exchange Act of 1934, management believes Coronation will not be subject to regulation under the Investment Company Act of 1940 insofar as Coronation will not be engaged in the business of investing or trading in securities. In the event that Coronation engages in a business combination which result in it holding passive investment interests in a number of entities, it could be subject to regulation under the Investment Company Act of 1940. In such an event, Coronation would be required to register as an investment company and could be expected to incur significant registration and compliance costs. Coronation has obtained no formal determination from the Securities and Exchange Commission as to the status of Coronation under the Investment Company Act of 1940 and, consequently, any violation of such Act would subject us to material adverse consequences. Coronation presently believes it is exempt from the Investment Company Act of 1940 via Regulation 3a-2 thereto.

Investment Advisor Act of 1940. Coronation is not an "investment adviser" under the Federal Investment Adviser Act of 1940, which classification would involve a number of negative considerations. Accordingly, Coronation does not and will not furnish or distribute advice, counsel, publications, writings, analysis or reports to anyone relating to the purchase or sale of any securities within the language, meaning and intent of Section 2(a)(11) of the Investment Adviser Act of 1940, 15 U.S.C.

Employees.

Coronation has had no full time or part time employees since its inception. Mr. Harry Miller, President of Coronation, has allocated a portion of his time to the activities of Coronation without compensation. Mr. Miller will cease to be a director or officer or providing his time to the business of Coronation on close of the merger agreement. The director, officers and employees of Supreme will become the directors, officers and employees of Coronation on close of the merger. Further details about Supreme's employees may be found under the heading "Information About Supreme Property, Inc. -Employees" in this information statement/prospectus.

Reports to Securities Holders.

Coronation is required to file annual reports on Form 10-KSB and quarterly reports on Form 10-QSB with the Securities Exchange Commission on a regular basis, and will be required to timely disclose certain material events (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a current report on Form 8-K.

You may read and copy any materials Coronation files with the Securities and Exchange Commission at their Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

Description of Property

Coronation currently maintain a mailing address at P.O. Box 741, Bellevue, Washington 98009, which is the address of its current President. Coronation has not paid for the use of this mailing address.

Coronation's office address will change to the address of Supreme on close of the merger agreement. It will also be deemed to own the properties currently held by Supreme which are outlined under "Information About Supreme Property, Inc. -Description of Property" found elsewhere in this information statement/prospectus.

Legal Proceedings

Coronation has not been party to any legal or regulatory proceedings since its inception nor is Coronation aware of any such proceedings pending.


Market Price of Securities and Related Stockholder Matters

The Common Stock of Coronation is not listed on a public market. It is unlikely that the Common Stock of Coronation will be accepted for trading on any exchange or quotation system until completion of the merger. Management anticipates that if any such trading market develops after the merger it will be on one the over the counter markets or the BBXchange and will be considered a "penny stock". There is no assurance that a trading market will ever develop or, if such a market does develop, that it will continue for the common stock of Coronation.

As of May 27, 2003, Coronation has one stockholder of record holding 5,000,000 common shares.

Dividend Policy.

Coronation has not declared or paid any cash dividends since inception. Although there are no restrictions that limit Coronation's ability to pay dividends on its common shares, Coronation intends to retain future earnings, if any, for use in the operation and expansion of its new business adopted in connection with the merger and does not intend to pay any cash dividends in the foreseeable future.

Recent Sales of Unregistered Securities.

On March 2, 2000, Coronation issued 5,000,000 shares of its common stock to Harry Miller, the President of Coronation at the time of issue, for an aggregate total of $500. Coronation relied on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended, for the issuance of these securities.

All of these shares are considered "restricted" shares as defined in Rule 144 under the Securities Act of 1933, as amended and may never be sold under Rule 144 as they were issued out at the time Coronation was considered a "blank check" company. This opinion was given by the Securities and Exchange Commission staff in a letter to NASD Regulation, Inc. dated January 21, 2000, where in it advised, that while the facts and circumstances are critical, resales of securities acquired in a blank check company, other than through a registration and conformance with the blank check offering rules of Rule 419 of the Securities Act of 1933, cannot be sold under Rule 144. It is for this reason 1,350,000 shares of the 5,000,000 shares previously issued to Mr. Miller three years ago are being registered for resale under this information statement/prospectus.

Equity Compensation Plan

We do not have any securities authorized for issuance under any equity compensation plans.

Financial Statements

The audited financial statements of Coronation for the year ended December 31, 2002, the unaudited financial statements of Coronation for the quarter ended March 31, 2003, incorporated by reference into this information statement/prospectus and are attached as Exhibit 13.1 and Exhibit 13.2.


Management Discussion and Analysis

2002 Business Environment.

The equity markets in 2002 were volatile to say the least. Given the market uncertainty it was difficult for many new and established companies to raise capital. Accounting scandals, new regulatory requirements, September 11th and concerns about America going war added to the tension in the securities market place and the economy in general. As a result, the interest in becoming a public company either through an initial public offering or through a merger with a reporting company was diminished in 2002 over previous years. Many in the securities market anticipate that the markets will remain volatile in 2003. Although Coronation plans to merge with Supreme there can be no guarantee that its new business model will be successful given the current market and business conditions.

Plan of Operations.

Coronation was formed to seek, investigate and, if such investigation warrants, merge or acquire an interest in business opportunities presented to it by persons or companies who or which desire to seek the perceived advantages of a Securities Exchange Act of 1934 registered corporation. Coronation did not restrict its search to any specific business, industry, or geographical location and it was open to participate in a business venture of virtually any kind or nature. On March 31, 2003, Coronation entered into a merger agreement with Supreme which it expects to complete by the end of the second quarter of 2003.

Mr. Miller was introduced to Supreme by Nick Segounis and SG Financial Services Group in late February or early March 2003. Mr. Miller was not aware of and did not have a relationship with Supreme prior to this introduction. Mr. Miller has known Mr. Segounis for over twenty years on a social basis.

In March 2003, Mr. Miller received a complete due diligence package on Supreme and its business which included details about its officers and directors, properties, financial plans and capital requirements, audited financial statements, risk factors and competitive position among other things. After review of this material Mr. Miller contacted Mr. Elliott, the President of Supreme to gather further information and to negotiate the terms of the merger agreement signed by the parties March 31, 2003.

On completion of the merger the former stockholders of Supreme will own approximately 89.98% of Coronation. The board of directors of Supreme immediately prior to the merger will be the directors of Coronation and Mr. Miller will resign. Coronation will change its name to "Supreme Realty Investment Trust, Inc." and the business, assets, and liabilities of Supreme will become the business, assets and liabilities of Coronation. Coronation will operate as a real estate investment trust or REIT, with one wholly-owned subsidiary, Supreme Capital Funding, Inc.

Treatment of Reverse Merger/Acquisition Transaction. The Securities and Exchange Commission considers a reverse merger/acquisition transaction to be a capital transaction in substance, rather than a business combination. That is, the transaction will be equivalent to the issuance of stock by Supreme for the net monetary assets of Coronation, accompanied by a recapitalization. As a result, the post-reverse merger/acquisition comparative historical financial statements for Coronation will be those of Supreme, with appropriate footnote disclosure concerning the changes in the capital structure of the privately-held company effected at the merger closing date.


Changes and Disagreements with Accountants

We have had no change in, or disagreements with, our principal independent accountant during our past two fiscal years or since our inception.

INFORMATION ABOUT SUPREME PROPERTY, INC.

Description of Business

Formation.

Supreme's predecessor, Supreme Property Management & Sales, Inc. was incorporated on March 25, 1998, in the State of Illinois, to engage as a privately-held, licensed real estate brokerage and property management firm. It was dissolved on August 1, 2000. Mr. Thomas Elliott, the President of Supreme, acquired substantially all of the assets of Supreme Property Management & Sales, Inc. on April 14, 2000 and incorporated Supreme Property, Inc. on April 22, 2000 in the State of Illinois to hold those assets. Supreme commenced operations as a privately-held, licensed real estate brokerage and property management firm in January, 2001.

Supreme Capital Funding, Inc. was incorporated on April 29, 2002, as a wholly-owned subsidiary of Supreme, to provide mortgage origination and other mortgage banking services. In January, 2003, Supreme Capital Funding, Inc. applied for a mortgage banking license from the State of Illinois and will commence operations upon issuance of the license. It is through this subsidiary Supreme intends to invest in mortgage loans and other securities discussed below.

In December, 2002, Supreme discontinued its property management operations to concentrate its efforts on the acquisition of real property for Supreme's own portfolio and the origination and acquisition of mortgage loans through its wholly-owned subsidiary.

Supreme is considered a development stage company as defined by the Securities and Exchange Commission.

Supreme's Business.

Supreme currently has four principal business activities:

(1) to acquire, operate, and dispose of real properties or interests in real properties;
(2) to provide real estate development services for other property owners;
(3) to make real estate loans directly to borrowers; and
(4) to originate, acquire, sell, and broker real estate loans to and from lending institutions and institutional investors.

Supreme seek to generate income for distribution to its stockholders from a combination of rents, interest, mortgage origination fees, developers' fees, and proceeds from the sale of its investments.

After the merger, the board of directors of Supreme intends to operate the surviving company as a self-administered real estate investment trust or "REIT" under Sections 856 through 860 of the Internal Revenue Code. As a REIT, Supreme generally will not subject to federal income tax. To qualify as a REIT under the Internal Revenue Code for a taxable year, a company must meet certain requirements relating to its assets, income, stock ownership and distributions to stockholders.

Supreme's focus before and after the merger will be to acquire, develop, own and operate investment real estate, principally apartment buildings, office buildings, light industrial facilities, community shopping centers, and special use properties.

Currently, Supreme owns four properties all of which are located in Chicago, Illinois. Supreme intends to diversify its holdings portfolio of investment real estate by acquiring properties throughout the United States and by targeting, as opportunities present themselves, real estate properties in each of the fore mentioned segments.

Supreme hopes to qualify as a REIT for federal income tax purposes for the taxable year ended December 31, 2003.

Total Number of Employees

Supreme operates under the direction of its board of directors and corporate officers. Mr. Thomas Elliott, the chief executive officer and president of Supreme has day-to-day management responsibilities, including identifying prospective property acquisitions, marketing, finance, overseeing third-party managers and general administrative responsibilities. Currently, Supreme has a total of seven (7) full-time and three(3) part-time employees.

Competition

Our apartment building properties compete directly with other multifamily properties and single family homes that are available for rent in the markets in which our properties are located. The apartment building properties also compete for tenants with the new and existing home market. Any office building properties we acquire in the future will compete with numerous alternatives for tenants in the local markets in which they are located. Other community shopping centers, light industrial facilities and residential communities that we may acquire in the future will also compete for tenants with other similar properties in the same local markets.

In addition, we compete with other investors for acquisitions and development projects, and any such competitors have greater resources than we do, including greater cash resources, greater access to debt and equity markets and greater management and leasing resources and expertise.


Regulation

General. Apartment building properties are subject to various laws, ordinances and regulations, including regulations relating to recreational facilities such as swimming pools, activity centers and other common areas. Supreme believe that, under present laws, ordinances and regulations, each of its existing properties has the permits and approvals necessary to operate. Commercial and other properties are also subject to regulation.

Americans with Disabilities Act. All of Supreme's properties, as well as any newly developed or acquired properties, must comply with the Americans with Disabilities Act to the extent that the properties are "public accommodations" and/or "commercial facilities" as defined by the statute. Compliance with the Americans with Disabilities Act requirements could require removal of structural barriers to handicapped access in certain public areas of our properties where such removal is readily achievable. The act does not, however, consider residential properties, such as multifamily properties or community-based residential facilities, to be public accommodations or commercial facilities, except to the extent portions of such facilities, such as a leasing office, are open to the public. Commercial properties, such as shopping centers or office buildings are considered public accommodations. To the extent possible through leases, Supreme intends to require that our commercial tenants comply with the Americans with Disabilities Act. Supreme will, of course, remain responsible for compliance with respect to common areas in commercial properties. Although Supreme believes that each of our existing properties are either exempt or substantially complies with all present requirements under the Americans with Disabilities Act and applicable state laws, Supreme may be incorrect in its assessment given the complex nature of the rules and regulations. Noncompliance could result in imposition of fines or an award of damages to private litigants. If required changes involve greater expenditures than Supreme currently anticipates, or if the changes must be made on a more accelerated basis than Supreme anticipates, its ability to pay accrued dividends could be adversely affected. Supreme believes that its competitors face similar costs to comply with the requirements of the Americans with Disabilities Act.

Fair Housing Amendments Act of 1988. The Fair Housing Amendments Act requires multifamily properties first occupied after March 13, 1990 to be accessible to the handicapped. Noncompliance with the act could result in the imposition of fines or an award of damages to private litigants. If our existing properties are not in substantial compliance with applicable laws, Supreme may be responsible for any deficiencies.

Rent Control Legislation. State and local rent control laws in certain jurisdictions limit a property owner's ability to increase rents and to recover from tenants increases in operating expenses and the costs of capital improvements. Enactment of such laws has been considered from time to time in some jurisdictions, although none of the jurisdictions in which Supreme presently operate has adopted such laws. Supreme does not presently intend to develop or acquire multifamily properties in markets that are either subject to rent control or in which rent limiting legislation exists.

Environmental Matters

Under various federal, state, and local environmental laws, regulations, and ordinances, a current or previous owner of real estate may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at such property, and may be held liable to a governmental entity or to third parties for property damage and for investigation and cleanup costs incurred by such parties in connection with the contamination. Such laws typically impose cleanup responsibility without regard to whether the owner or operator knew of, or caused the presence of the contaminants. The costs of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect an owner's ability to sell or rent such real estate or to borrow using such real estate as collateral. In addition, some environmental laws create a lien on the contaminated site in favor of the government for damages and costs it incurs in connection with the contamination. Persons who arrange for the disposal or treatment of hazardous or toxic substances may be held liable for the costs of investigation, remediation, or removal of such hazardous or toxic substances at or from the disposal or treatment facility, regardless of whether such facility is owned or operated by such person. Finally, the owner of a site may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a site.


Certain federal, state and local laws, regulations and ordinances govern the removal, encapsulation or disturbance of asbestos containing materials when such materials are in poor condition or in the event of building remodeling, renovation or demolition. Such laws may impose liability for the release of such materials and may provide for third parties to seek recovery from owners or operators of real estate for personal injury associated with asbestos. In connection with Supreme's ownership and operation of its properties, Supreme may be potentially liable for costs in connection with these matters.

Supreme believes that its current property holdings are each in compliance in all material respects with all federal, state and local laws, ordinances and regulations regarding hazardous or toxic substances or petroleum products. Supreme has not been notified by any governmental authority, and are not otherwise aware, of any material noncompliance, liability or claim relating to hazardous or toxic substances or petroleum products in connection with any of its properties.

Description of Property

Corporate Office of Supreme

Supreme's offices are located in Chicago, Illinois. Supreme is currently in the third year of a five-year lease at an annual rental of $7,200. Supreme is currently in negotiations with another office building leasing representative for 5,000 square feet of space in Tinley Park, Illinois to house Supreme's headquarters. It is estimated that the annual rental rate will be priced between $14 - $18 per foot plus an allocation of common area expenses. To date, no lease agreement has been reached.

Investment Policies

Investment policies are established by the Board of Directors with respect to investing in real property interests and loans secured by real property. Such policies may be changed by the directors in response to economic and market conditions without vote of the stockholders. The percentage of assets invested in any one type of investment, property, loan, or security is set by the Board of Directors during its annual meeting. Under our current investment policy, not more than 20% of Supreme's total assets may be invested in any one property, loan, or security. Currently, we have exceeded this guideline with respect to one property which we hold as we have approximately 23% of our current total assets invested with that property. We expect this percentage will drop to below 20% as we develop our business model.


Supreme's excess funds are generally held as cash or invested in short-term, highly liquid, interest-bearing securities, which may include short-term municipal bonds, time deposits, money market funds, commercial paper, and U.S. government securities.

Investments in Real Estate or other Property Interests.

Supreme acquires real property either directly in fee simple, or indirectly through ownership of beneficial interests land trusts or partnerships that hold title to the real property. Supreme believes that, in some cases acquiring indirect interests in real property is advantageous because it gives us flexibility in addressing the financial and risk management considerations presented by the particular property when debt financing may not be appropriate or when Supreme is trying to avoid exposing its entire portfolio to litigation as the result of personal injuries resulting from environmental hazards or other unforeseen conditions on the property.

Supreme's policy is to acquire properties primarily for current income. However, income from, and appreciation of its properties may be adversely affected by general and local economic conditions, neighborhood values, competitive overbuilding, weather, casualty losses, and other factors beyond its control. The value of real properties may also be affected by the cost of compliance with regulations and liability under applicable environmental laws, changes in interest rates, and the availability of financing. Income properties are also adversely affected if a significant number of tenants are unable to pay rent or if available space cannot be rented on favorable terms.

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To help to mitigate these risks, our present policy goal is to diversify Supreme's portfolio across the following different property types, in rapidly-growing suburban areas, near large population centers, in the following economic regions or "belts":

Property Type

% of Total

  Economic Region

% of Total

Office Buildings

5%

  Energy Belt
(Houston, Dallas, New Orleans)

5%

Shopping Centers

25%

  Rust Belt
(Chicago, Detroit, Cleveland)

45%

Industrial Buildings

0%

  Food Belt
(M'npls, Kansas City, St. Louis)

0%

Apartment Buildings

40%

  Sun Belt
(Atlanta, Orlando, Miami)

25%

Hotel/Motel

10%

  Hi-Tech Belt
(Boston, NJ, Wash. DC. San Francisco,
San Diego)

25%

Special Use
(Golf Courses, Marinas, etc.)

20%

 

TOTAL:

100%

  TOTAL:

100%

Currently 100% of portfolio is held in apartment buildings located in Chicago, Illinois.

Investments in Real Estate Securities or other Passive Interests

From time to time, Supreme will also invest in interests of others primarily engaged in real estate activities. Supreme will invest in the common stock of other public and private real estate operating companies, real estate investment trusts, partnerships, or joint ventures. The primary activities Supreme will consider are industrial buildings and low-income housing developments. Supreme's acquisition committee will apply the same underwriting criteria as applied in its direct investments.

Investments in Mortgage Loans and Other Securities

Mortgage Banking Operations

Supreme through its subsidiary will acquire loans held by banks, institutional lenders, and holders of seller-financed notes on income properties. Supreme will acquire these loans at discount to book value, service them for a short "seasoning" period, and package them for resale on the secondary mortgage market. Supreme will seek under-performing loans that are near completion of the resolution process and whose underlying properties Supreme deem valuable. Supreme applies the same rigorous underwriting analysis to the acquisition of these loans that Supreme does to the direct acquisition of property. Supreme look to enhance its total returns through increased yields or, upon sale, the realization of some or all of the discount at which they were acquired.


Direct Lending and Joint Participation

In some cases, particularly land development (or redevelopment), Supreme may make direct loans to credit-worthy developers for the construction and sale of multi-family housing or commercial properties. That loan may take the form of convertible debt, or some other "appreciation interest" provision in the loan documentation. This provision requires the borrower to pay Supreme a percentage of any increase in the value of the property or allows Supreme to convert the loan to an equity interest in the appreciated property.

Loan Origination and Brokerage

To generate fees associated with the origination of mortgage loans, Supreme will rely on the relationships of the senior management of Supreme Capital Funding, Inc. They have extensive experience in the mortgage lending and real estate finance industries and have cultivated extensive contacts with banks, wholesale lenders, other mortgage brokers, and direct borrowers. Supreme will use a variety of web-based lead generation tools along with direct marketing and solicitation of loan business from homebuyers and real estate brokers. Since Supreme's focus will be on residential borrowers with substandard credit, banks and other institutional lenders make referrals to Supreme for loan opportunities that they do not wish to underwrite.

Management of Supreme has brokerage relationships with several national mortgage lenders who underwrite the loan packages. Supreme intends to submit to its loan packages to those lenders. No formal agreement in place at this time between Supreme and any mortgage lenders. Origination fees, administration fees, and document processing fees will be paid to Supreme at loan closing, by the lender, out of the loan proceeds.

Investment Real Estate Owned

Supreme currently own property interests in the following properties:


Description


Encumbrances


Initial Cost


Cost Capitalized

Gross amount carried at close of period

Accumulated Depreciation

Date of        Construction

             
12-Unit Apartment Bldg(1)


$      480,000


$      600,000


-0-


$      600,000


$       10,909


N/A

6-Unit Apartment Bldg(2)


$      400,000


$      500,000


-0-


$      500,000


$         7,576


N/A

6-Unit Apartment Bldg(3)


$       151,000


$      586,000


-0-


$      586,000


$             -0-


N/A

4-Unit Apartment Bldg(4)


$       224,000


$      280,000


-0-


$      280,000


-0-


N/A

 

TOTALS

$  1,255,000

$   1,966,000

-0-

$   1,966,000

$       18,485

 
             

Notes:

  1. 12-unit apartment building in Chicago, Illinois, acquired by Installment Agreement for Warranty Deed at a cost of $600,000, which carries a non-recourse mortgage note in the amount of $480,000, which bears interest at a rate of 7%, and is due on June 1, 2004. Property is currently 92% occupied and stable.
  2. 6-unit apartment building in Chicago, Illinois acquired by Installment Agreement for Warranty Deed at a cost of $500,000, which carries a non-recourse mortgage note in the amount of $400,000, which bears interest at a rate of 7% and is due on July 1, 2004. Property is currently 100% occupied and stable.
  3. 4-unit apartment building in Chicago, Illinois acquired by Installment Agreement for Warranty Deed at a cost of $280,000, which carries a non-recourse mortgage note in the amount of $224,000, which bears interest at a rate of 7% and is due on August 1, 2004. Property is currently 100% occupied and stable.
  4. 6-unit apartment building in Chicago, Illinois, acquired by Installment Agreement for Warranty Deed at a cost of $586,000, which carries a non-recourse first mortgage note in the amount of $131,000, which bears interest at a rate of 7% and is due on February 1, 2031, and a second mortgage note in the amount of $20,000, which bears interest at a rate of 6.25%, and is due on May 5, 2007. Property is currently unoccupied and scheduled for demolition. Supreme plans to erect a new, 5-unit townhome development on the site at a cost of $700,000. Construction will be financed with all equity and the townhome units will then be sold for approximately a$190,000 - $210,000 each. The existing mortgages will paid out of proceeds from the sale of the units.

Proposed Future Acquisitions

Supreme's strategy is acquire under-valued properties from banks, other institutional lenders, and/or third-party companies who have regained control through past defaults, foreclosures, delinquent tax sales, or other "distressed" situations. Supreme relies primarily on its relationships with banks, mortgage lenders, real estate developers, probate attorneys, and commercial real estate brokers who wish to dispose of these under-performing properties. Among the properties Supreme is currently considering:

 
  •  
88-acres, raw land, in University Park, Illinois, for acquisition and development of 280 townhouses and single-family homes in a new, suburban subdivision. Currently in negotiations with site owners under an Option to Purchase Agreement. Asking price, $2,600,000
 
  •  
27,000 SF office building in Tinley Park, Illinois (to be partially occupied as corporate headquarters). Currently in negotiations with builder/developer. Estimated construction cost, $2,700,000. Current market rents, $14 - $18/SF.
 
  •  
195-acre golf course in Crete, Illinois. Currently in negotiations with probate attorney representing estate of deceased owner and his heirs. Asking price $4,500,000
 
  •  
180-unit garden apartment complex in Charlotte, Nevada. Currently in due diligence review and investigation. Asking price, $2,800,000.
 
  •  
25,000 SF strip shopping center in Country Club Hills, Illinois. Currently in negotiations with mortgage holder's agent. Asking price $900,000.
 
  •  
A 300-slip boat marina and storage facility in Wilmington, Nevada. Development cost estimated a $3,600,000. Currently in negotiations with land owner and city officials for development rights along the coastal waterway.

Supreme must raise a significant amount of capital if it is to acquire any of the above mentioned properties given its current financial condition.

Acquisition Procedures

Prior to making any acquisitions, Supreme conducts an acquisition review and analysis. Supreme estimates the value of the property based upon a recent independent appraisal and a valuation report prepared by Supreme's V.P., of Acquisitions. Supreme makes an on-site inspection of the property, and where appropriate, Supreme requires further inspections by qualified engineers, architects, and environmental consultants. Supreme obtains all relevant data concerning the demographics of the location, rental rates, operating costs, taxes, etc. Supreme then has its legal counsel and title examiners review the title and any other documents that might affect title. The final report is then presented to the acquisition committee for approval or rejection based upon Supreme's policies and portfolio diversification and yield objectives.

The acquisition committee is made up of four officers and two members of the board of directors of Supreme, one of whom is an outside director.

Other Real Property Considerations

Real property investments are subject to varying degrees of risk. Yields from Supreme's real properties depend on their net income and capital appreciation. Property interests are also illiquid and their value may decrease. Therefore, Supreme has a limited ability to vary its property interests quickly in response to changes in economic or other conditions. In addition, provisions in the Internal Revenue Code and related regulations impose taxes on gains realized by REIT's from property held for sale in the ordinary course of business. These provisions may materially affect Supreme's ability to sell its property interests at an advantageous time.

Uninsured or underinsured losses may affect the value of, or Supreme's return from, its property interests. Supreme's properties have comprehensive insurance coverage in amounts Supreme believe are sufficient to permit the replacement of the properties in the event of total loss. There are certain types of losses that are uninsurable like, earthquakes, floods, other natural disasters, or acts of war and insurrection. Also, inflation, changes in local building codes or zoning laws may make the use of insurance proceeds for the replacement of a property impractical.

Financial Leverage

From time to time, Supreme may use secured debt financing to fund Supreme's real property investments when Supreme does not have sufficient capital available to enable it to acquire a particular property. Supreme will consider prudent debt-to-equity ratios and debt coverage ratios in Supreme's acquisition analysis, prior to any proposed acquisition. Supreme realizes that many times properties become "distressed" through the imprudent use of leverage and Supreme is cautious not to commit the same mistakes as the previous owner(s). It is Supreme's policy to limit the amount of debt used to acquire properties to less than 80% of the property's value.


Legal Proceedings

Supreme has not been party to any legal or regulatory proceedings since its inception nor is management of Supreme or Coronation aware of any such proceedings pending.

Market Price of Securities and Related Stockholder Matters

General.

The securities of Supreme are not listed for trading on a national securities market or quotation system.

As of May 27, 2003, Supreme had 43 stockholders of record holding 19,342,000 shares of common stock in the equity of Supreme.

Dividend Policy.

Supreme has not declared or paid any cash dividends since inception and does not intend to pay any cash dividends in the foreseeable future.

Recent Sales of Unregistered Securities.

On November 1, 2002, we issued 9,400,000 shares common stock of Supreme to two directors and officers of Supreme on exercise of stock options granted that year, for an aggregate total consideration of $94,000. We relied on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended, for the issuance of these securities. All of these shares are "restricted" shares as defined in Rule 144 under the Securities Act of 1933, as amended. These shares may not be offered for public sale except under Rule 144, or otherwise, pursuant to Securities Act of 1933.

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The following table describes all common stock issued in the past three years:


                Name                 


Date Issued

Original
 Investment


How Paid


# of Shares

Allison, Laverne & Christine

06-21-02

$ 2,000.

Cash

20,000

ALM KLM Enterprises

11-01-02

20,000.

Services

200,000

Banks, Willie Mae

12-20-01

7,500.

Services

75,000

Beasley, Eugene

12-20-01

10,000.

Services

100,000

Brown, Carlos

08-19-02

10,000.

Cash

20,000

Dashevsky, Jeffery

04-22-02

63,210

Services

632,100

Davis, Andrew

12-20-01

1,500.

Services

15,000

DUBAROS CORP.

11-06-02

11,000.

Cash

22,000

Elliott, Thomas

12-20-01
12-20-02

630,000

Cash & Services

10,000,000

Elliott, Portia

12-20-00

20,000.

Cash

200,000

Elliott, Jarred

12-20-01

5,000.

Gift

50,000

Fletcher, Antoinette

12-20-01

35,000.

Cash

350,000

Fouch, Brent

04/22/02

63,210

Services

632,100

Gastile-Tate, Valerie

12-20-01

2,500.

Services

25,000

Hale, Les

09-09-02

2,000.

Cash

20,000

Haywood, Frederic

06-21-02

5,000.

Cash

50,000

Head, Kerry

04-22-02

16,125

Services

161,250

Jones, Jennifer

12-20-01

2,000.

Services

20,000

Jones, Steven

08-19-02

2,000.

Cash

20,000

KIMBARK MANAGEMENT, LLC

12-04-02

5,000.

Cash

50,000

LeRoy, Jean

12-20-01

20,000.

Cash

200,000

Lloyd, Anthony

12-24-02

2,000.

Cash

4,000

Marshall, Kyle

11-22-02

5,000.

Cash

50,000

Palmore, Mary

12-10-02

2,500.

Cash

25,000

Reid, David Jr.

06-21-02

35,000.

Property

350,000

Reid, David III

06-21-02

5,000.

Gift

50,000

Richardson, Derwin Atty.

11-17-02

300,000.

Services

100,000

Roberts, Robert

12-20-01

2,500.

Services

25,000

Rose, Jailyn

12-20-01

5,000.

Gift

50,000

Sabree, Naim

11-22-02

10,000.

Property

100,000

Sales, S.L. and Marlene

09-09-02

2,500.

Cash

25,000

Singleteary, Steven

12-20-01

5,000.

Cash

50,000

Smith, Bruce

12-04-02

5,000.

Cash

50,000

Swain, John Sr.

12-20-00

35,000.

Cash

350,000

SUPREME CAPITAL FUNDING, INC.

04-22-02

100,000

Cash & Property

100,000

Thomas, Ron

11-12-02

2,000.

Cash

4,000

Thomas, Ron and Donna Gibson

11-12-02

4,000.

Cash

8,000

Tillman, Jimmy

12-20-01

10,000.

Property

100,000

Washington, Manuel

12-17-02

5,000.

Cash

25,000

Whittenburg, William

12-20-00

35,000.

Services

350,000

Williams, James

04-22-02

50,955

Services

509,550

YOREL CONSULTING, INC.

06-21-02

420,000.

Cash & Property

4,200,000

Youngblood, Kamisha

11-22-02

2,000.

Cash

10,000

   
 

TOTALS

 

1,976,500.

 

19,342,000


Equity Compensation Plan

The following table provides information as of December 31, 2002, with respect to Supreme's compensation plans under which its equity securities are authorized for issuance:

 

Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance

 

(a)

(b)

(c)

Equity compensation plans approved by security holders

-0-

-0-

-0-

Equity compensation plans not approved by security holders

-0-

-0-

-0-

Total

-0-

-0-

-0-

Financial Statements

The audited financial statements of Supreme for the year ended December 31, 2002, is incorporated by reference into this information statement/prospectus and is attached as Exhibit 13.3.

Management Discussion and Analysis

Overview

Supreme began operations in January, 2001. Supreme acquired substantially all of the assets of its predecessor company, Supreme Property Management & Sales, Inc., and has operated as a realty and property management firm for two years. In 2002, Supreme discontinued operating as a property management firm, and continued to acquire properties for its own portfolio. As of May 27, 2003, Supreme owned a portfolio of four apartment buildings. The apartments are located in Chicago, Illinois and contain an aggregate of 28 units.

Supreme's principal business objective is to generate income for distribution to its stockholders from a combination of rents, fees, interest, and the proceeds from the sale of its portfolio investments. In 2003, Supreme expects to complete the merger of Supreme into Coronation, and will attempt to obtain a listing on either the OTC Bulletin Board or BBXchange and to raise additional financing either through an equity or debt offering(s) or bank loans. Supreme intends to use the proceeds of any additional capital raised to acquire "distressed" properties from banks and other institutional lenders, at a substantial discount to market value.

In January, 2003, Supreme applied for a mortgage banking license in the State of Illinois. Promptly on issuance of that license, Supreme intends to begin originating, purchasing, and selling mortgage loans through its wholly-owned subsidiary, Supreme Capital Funding, Inc.


Results of Operations

Revenues from Continuing Operations. Rental revenue increased to $176,864 for the year ended December 31, 2001 compared to $0 rental revenue for the year ended December 31, 2001. The increase in rental revenue can be attributed to the fact we were non-operational in 2001 and had acquired 28 apartment units which all but six were rented in 2002.

Fee income and other income decreased by $81,913 or 49.2% during these same periods primarily due to a reduction in fee income from reduction of real estate brokerage staff

Expenses from Continuing Operations. Total expenses from continuing operations increased from $161,224 for the year ended December 31, 2001 to $224,924 for the year ended December 31, 2002, a net increase of $63,700 described below.

Property, operating and maintenance increased by $79,805 for the year ended December 31, 2002 compared to the year ended December 31, 2001. This reflects the fact we now operate four apartment buildings. This cost is offset by the increase in revenue directly attributable to these properties.

Depreciation and amortization increased from approximately $11,480 for the year ended December 31, 2001 to $24,885 for the year ended December 31, 2002.

Interest expense increased by approximately $9,321 or 21% for the year ended December 31, 2002 compared to the year ended December 31, 2001 due to the interest rate on the mortgages associated with the apartment buildings acquired.

General and administrative costs decreased by approximately $8,011 or 22.9% for the year ended December 31, 2002 compared to the year ended December 31, 2001 primarily a result of lower utility costs and better operating efficiency.

Salaries, commissions and employees benefits decreased by approximately $11,064 or 38.53% for the year ended December 31, 2002 compared to the year ended December 31, 2001 directly as a result of reduced outlays for real estate brokerage commissions.

Net Income from Operations. Net income from operations for the year ended December 31, 2001 was $ 4,448 versus $29,5558 for the year ended December 31, 2002. Total funds from operation (adding back in depreciation and amortization) was $54,444 for the year ended December 31, 2002 as compared to $ $11,480 for the year ended December 31, 2001.

Liquidity and Capital Resources

For the years ended December 31, 2002 and December 31, 2001, Supreme's net cash provided by operating activities totaled ($102,780) and ($25,999), respectively.

As of December 31, 2002, Supreme's unrestricted cash resources were $2,000 as compared to $730 as at December 31, 2001. The cash flow from Supreme's existing properties will not fund its future liquidity requirements.


The principal source of Supreme's capital has been from funds received from operations and the use of non-recourse debt in association with the acquisition of its real properties. Supreme intends to use its future capital to pay for non-recurring expenses related to the preparation of an equity or debt offering and to acquire more properties.

Supreme intends to increase its liquidity by issuing different classes of convertible preferred stock or convertible debentures to institutional investors in future offerings and by using cash provided from operations of its mortgage banking subsidiary and rents from its properties. At present, Supreme has no plans to increase its borrowings or add any new bank debt liabilities.

Supreme intends to use the proceeds of any debt or equity to acquire more properties and to pay off the existing long-term liabilities. Further, as a REIT, Supreme will be required to distribute 90% of its taxable income in the form of dividends to its stockholders. That could limit the amount of cash Supreme will have available for other business purposes or to grow through the use of retained earnings.

Much of Supreme's ability to raise capital is dependent upon the relative attractiveness shares of a hybrid REIT, and the supply of shares of competitive REIT's currently trading in the marketplace. Management of Supreme believes that it has identified a unique niche in its market by acquiring "distressed" properties and under-performing real estate loans from banks and other lending institutions. Management of Supreme believes Supreme's unique advantage is the talent and experience of its management team in the areas of property management, loan workouts, and real estate sales so Supreme can add value to these otherwise undervalued properties and deliver exceptional returns to its stockholders.

Cash provided by operations, equity transactions, and borrowings from affiliates and lending institutions have generally provided the primary sources of liquidity to Supreme. Historically, Supreme has used these sources to fund operating expenses, satisfy its debt service obligations and fund distributions to stockholders.

Recent Accounting Pronouncements

In August 2001, the FASB issued Financial Accounting Standard No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("FAS 144"). FAS 144 establishes a model for measurement and reporting the impairment of assets to be disposed of by sale and addresses accounting for a segment of a business accounted for as a discontinued operation. FAS 144 is effective for fiscal years beginning after December 15, 2001. Supreme has accounted for the write down of its real estate and discontinued operations segment in accordance with FAS 144.

In December 2002, the FASB issued Financial Accounting Standard No. 148, "Accounting for Stock-Based Compensation -Transition and Disclosure" ("FAS 148"), an Amendment of Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation" ("FAS 123"). FAS 148 amends FAS 123 to provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation. It also amends the disclosure provisions of that Statement to require prominent disclosure about the effects on reported net income of an entity's accounting policy decisions with respect to stock-based employee compensation.


Changes and Disagreements with Accountants

Supreme has had no change in, or disagreements with, its principal independent accountant during the past two fiscal years or since its inception.

VOTING AND MANAGEMENT INFORMATION

Majority Stockholders Consent

As previously stated, we are not asking you for a proxy and you are requested not to send us a proxy. Stockholders holding more than 74% of the outstanding share of Supreme have approved the adoption of the merger agreement and the merger. As a result, no vote by the stockholders of Supreme will be taken as these actions have already been approved by the written consent of the stockholders of a majority of the outstanding shares of Supreme. as allowed by Section 7.10 of the Business Corporation Act of the State of Illinois. We have attached the form of stockholders' consent as Exhibit 99.a to this information statement/prospectus.

Coronation has only one stockholder of record and he is the sole director of Coronation. He has voted 100% of the issued and outstanding shares of Coronation for the adoption of the merger agreement, the merger, name change of Coronation to "Supreme Realty Investment Trust, Inc.", the appointment of new directors on close of the merger and related stock issuances to the merger.

Dissenter's Rights of Appraisal of Stockholders of Supreme

Under Illinois law, stockholders of Supreme's shares who do not vote in favor of the merger and who follow the procedures set forth under Illinois law may require the combined company to pay in cash the fair value of his or her shares as determined under Sections 11.65 and 11.70 of the Illinois Business Corporation Act. We have attached the text of Sections 11.65 and 11.70 of the Illinois Business Corporation Act to this document as Exhibit 4.3. In order to exercise those statutory rights, strict compliance with these statutory provisions is required. Each stockholder who may desire to exercise those rights should carefully review and adhere to those provisions.

A dissenting stockholder of Supreme who desires to pursue his or her rights to demand payment must deliver a written demand for payment to Supreme within twenty days of receiving this information statement/prospectus, demanding payment for his or her shares if the merger is completed.

The initial written objection of a dissenting stockholder of Supreme should be delivered to Supreme's office at: 431 E. 75th Street, Chicago, Illinois 60619 Attn: Thomas Elliott, President of Supreme. It is recommended that this objection be sent by registered or certified mail, return receipt requested.


A dissenting Supreme stockholder that delivers the required written demand for payment with Supreme prior to the transaction closing date need not have voted against the merger, but a vote in favor of the merger will constitute a waiver of that stockholder's statutory dissenter's rights.

Supreme will send to those stockholders delivering written demands for payment a statement of its estimate of the fair value of the Supreme's shares within the later of (a) 10 days after the effective date of the merger or (b) 30 days after such stockholder delivers a written demand for payment to Supreme. Financial information about Supreme required to be provided under Section 11.70 of the Illinois Business Corporation Act will accompany this statement. Supreme will also send such stockholders a commitment to pay for their shares at their estimated fair value, plus accrued interest, upon transmittal to Supreme of the certificates representing, or other evidence of ownership of, such shares. If the merger occurs, Supreme will pay to each dissenter who transmits to Supreme his or her certificate or other evidence of ownership the amount Supreme estimates to be the fair value of such dissenter's shares, plus accrued interest, accompanied by a written explanation of how the interest was calculated.

A stockholder who does not agree with Supreme's estimate of fair value or the amount of interest due must notify Supreme in writing of the stockholder's estimate of the shares' fair value and the amount of interest due and demand payment for the difference and the interest due within 30 days from the delivery of Supreme's statement of its estimate of fair value. Stockholders who fail to notify Supreme of their estimate of fair value or the amount of interest due within this period will lose their rights to dispute the amounts estimated and determined by Supreme

If a stockholder and Supreme are unable to agree on the fair value of the shares and accrued interest within 60 days from delivery to Supreme of the stockholder's estimate of fair value and accrued interest, Supreme will either pay the difference in value that the stockholder demanded with interest or file a petition in the Circuit Court of Cook County, State of Illinois, requesting the court to determine the fair value of the shares and the interest due. Supreme will make all dissenters, whether or not residents of Illinois, whose demands remain unsettled, parties to any such proceeding and all parties will be served with a copy of the petition. Stockholders who do not live in Illinois may be served by registered or certified mail or by publication as provided by law.

If the court's determination of fair value and interest due exceeds the amount paid by Supreme, then each dissenting stockholder made a party to the proceeding is entitled to judgment for the difference plus interest. The court may appoint one or more persons as appraisers to receive evidence and to determine the fair value. The court will determine all costs of the proceeding, including the reasonable compensation and expenses of the appraisers. Fees and expenses of counsel and experts for any party are excluded. If the fair value of the shares as determined by the court materially exceeds the amount of Supreme's estimate, or if no estimate was made, then all or any part of such expenses may be assessed against Supreme. However, if a stockholder's estimated fair value materially exceeds the fair value that the court determines, then all or any part of such expenses may be assessed against the stockholder. Under certain circumstances, the court may also assess the fees and expenses of counsel and experts to a stockholder or to Supreme.

Interest of Directors and Officers of Supreme in the Merger

In considering the recommendation of the board of directors of Supreme, you should be aware that members of Supreme's management and of the board of directors of Supreme have interests in the merger that are different from, or in addition to, the interests of the Supreme's stockholders generally. The members of the board of directors of Supreme knew about these additional interests and considered them when they approved the reorganization agreement, such as:


  •  
As of May 27, 2003, directors and officers and their affiliates currently own approximately 74.44% of all outstanding shares of the shares of Supreme entitled to vote at for the merger and which did vote by consent resolution in favor of the merger;
 
  •  
On completion of the merger, Coronation may enter into employment arrangements with some or all of the executive officers of Supreme which, among other things, will enable such executive officers;

The directors and officers of Supreme may therefore have had different reasons to vote to approve the reorganization agreement and the merger than if they did not have these interests.

Interests of Director and Office of Coronation in the Merger

Mr. Miller, the sole director and officer of Coronation is an arm's length party to Supreme. He will not receive any personal advantage monetary or otherwise other than his share ownership of 1,350,000 shares of common stock which he will retain in Coronation.

Outstanding Shares and Voting Rights

Supreme.

At May 27, 2003 (the "record date"), Supreme had 19,342,000 shares outstanding. These are the securities that would have been entitled to vote if a meeting was required to be held. Each share is entitled to one vote. The outstanding shares of Supreme at the close of business on the record date for determining stockholders who would have been entitled to notice of and to vote on any matter submitted to stockholders at a meeting of stockholders, were held by approximately forty-three (43) stockholders of record. The majority stockholders have agreed by written consent in lieu of a stockholders meeting to the merger agreement and an escrow agreement which requires the agreement of a number of other stockholders. The complete text of the merger agreement and escrow agreement are attached as Exhibit 2 and Exhibit 4.3 respectively to this information statement/prospectus.

Coronation.

As at May 27, 2003 (the "record date"), Coronation had 5,000,000 shares of common stock outstanding held by one stockholder who voted for the merger agreement and related transactions, including changing the name of Coronation the appointment of new directors on close of the merger and returning to the treasury of Coronation 3,650,000 of those shares he currently holds on closing of the merger among other matters.

Record Date

The close of business on May 27, 2003, has been fixed as the record date for the determination of stockholders of Supreme and Coronation entitled to receive this information statement/prospectus.


Expenses of Information Statement/Prospectus

The expenses of mailing this information statement/prospectus will be borne by the Supreme, including expenses in connection with the preparation and mailing of this information statement/prospectus and all documents that now accompany or may hereafter supplement it. It is contemplated that brokerage houses, custodians, nominees, and fiduciaries may be requested to forward the information statement/prospectus to the beneficial owners of the stock held of record by such persons and that the Supreme will reimburse them for their reasonable expenses incurred in connection therewith.

Security Ownership of Certain Beneficial Owners and Management

Coronation.

The following table sets forth information concerning the ownership of shares of Coronation immediately before and after consummation of the merger agreement, with respect to stockholders who were known to the Board of Directors of Supreme and Coronation to be beneficial owners of more than 5% of the shares outstanding of each respective company as of May 27, 2003, and executive officers and directors of Coronation individually and as a group. Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to such shares and holds the shares directly.

 

Name and Address of Beneficial Owner

Shares Beneficially Owned(1)

Percent of Voting Stock(1)

Before Share Exchange After Share Exchange Before Share Exchange After Share Exchange
Harry Miller(2)
401 Detwiller Lane
Bellevue, WA 98004
5,000,000 1,350,000 100% 4.5%
Thomas Elliott(3)
15 Iliad Drive
Tinley Park, IL 60602
0 13,953,000 0% 46.53%
Jean LeRoy(4)
555 Barton Avenue
Chicago, IL 60602
0 6,139,320 0% 20.47%
Director and Officers as a Group 5,000,000 20,092,320 100% 67%

Notes:

  1. Coronation only has one class of shares outstanding - common stock. The above table assumes 29,987,900 shares will be issued and outstanding on close of the merger agreement. This is an estimate as the shares to be issued to the stockholders of Supreme will be rounded up if they are an odd number.
  2. Mr. Miller is the sole director, officer and stockholder of Coronation as of the date of this information statement/prospectus. He will cease to be a director and officer of Coronation on close of the merger. He has agreed to return to treasury 3,650,000 shares he currently holds in Coronation as part of the merger.
  3. Mr. Elliott is expected to be a director, officer and 5% holder on close of the merger.
  4. Mr. LeRoy is expected to be a director, officer and 5% holder on close of the merger. He will hold 5,860,260 of his 6,139,320 shares in the name of Yorel Consulting, Inc. which is wholly-owned by Mr. LeRoy.

Supreme.

The following table sets forth information concerning the ownership of shares of Supreme as of May 27, 2003, with respect to stockholders who were known to the Board of Directors of Supreme to be beneficial owners of more than 5% of the shares outstanding and executive officers and directors of Supreme individually and as a group. Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to such shares and holds the shares directly.


Name and Address of Beneficial Owner


Nature of Ownership

Shares Beneficially Owned


Percent of Class

Thomas Elliott

15 Iliad Drive

Tinley Park, IL 60477

Direct - Officer/Director

10,000,000

51.70%

Yorel Consulting, Inc.

27 N. Wacker

Chicago, IL 60602

Investment Holding Co. for the benefit of Jean LeRoy

4,200,000

21.71%

Jean LeRoy, CFO

555 Barton Ave.

Evanston, IL 60202

Direct- Officer/Director

200,000

 

1.03%

Directors and Officers as a Group  

14,400,000

74.44%

Appointment of New Directors and Officers to Coronation

Mr. Harry Miller, the current director and officer of Coronation will resign his positions with the Coronation at the close of the merger agreement and two new directors, Messrs. Thomas Elliott and Jean LeRoy will be appointed as part of the merger transactions. All of the information set forth in this section regarding the "Election of Directors" pertains to those executives of Supreme who will become directors and officers of Coronation on the close of the merger agreement. Messrs Elliott and LeRoy' anticipated positions with Coronation post-merger, age and business experience is as follows:

Thomas Elliott, 48, JD, MBA

President/CEO

Mr. Elliott's background covers a broad spectrum of real estate and development activities including master planning, financing, site acquisition, zoning, development, management, and sales of several major residential and commercial properties throughout the United States.

More specifically, over the past 25 years, his duties have included performing feasibility studies and market analysis, arranging mortgage financing, providing contract administration, coordinating construction, and property management activities for single- and multi-family residential developments, elderly hi-rises, regional shopping malls, urban strip centers, and low-rise office complexes.

Prior to acquiring Supreme in January 2001, Mr. Elliott was self-employed as a real estate Attorney; as a Sr. Project Manager for Mesirow/Stein Real Estate Services, Inc.; and as Assistant Commissioner for the City of Chicago, - Dept. of Housing.

Mr. Elliott is a licensed real estate broker who also holds: Doctor of Jurisprudence (JD, Real Estate Law) Illinois Institute of Technology Chicago Kent College of Law; Master of Business Administration (MBA, Finance) Devry University Keller Graduate School of Management, Chicago, IL; and Bachelor of Science (BS, Bus. Admin/Econ.) Culver-Stockton College, Canton, MO.


Jean LeRoy, 35, BSEE, MBA

V.P., Investor Relations/Treasurer

Mr. LeRoy's background includes extensive experience in the design, development, implementation, integration, and customization of information technology and accounting systems for the financial services, computing, and communication industries. Over the past 14 years he has performed these services for a multitude of Fortune 500 companies and leaders in their respective industries.

Prior to coming to Supreme in January, 2002 Mr. LeRoy was employed as a system engineer for EMC Corp.; a management consultant for Adventis Corp; a senior network consultant for 3Com Corp.; and a technical consultant for BellSouth Wireless Data, Reuters of America, Inc., and Dictaphone Corporation.

Mr. LeRoy holds a Bachelor of Science (BS, Electronic Engineering) from Devry University and a Master of Business Administration (MBA, Finance) from DePaul University.

Other Officers and Significant Employees

The following table outlines the name, age, position and background of other officers and significant employees of Supreme:

Name Age Position with Supreme Background
Carl Brown, MBA 35 V.P., Acquisitions
July, 2002
Financial Analyst
(1998 -Present)
Arthur Mooring 45 V.P., Property Mgmt
July, 2002
Property Manager (2000 -Present)
Antonio Cadet, CPA 37 V.P Finance
February, 2003
Staff Accountant (1988 -Present)

Supreme automatically renewed, its one-year employment agreements with its V.P. of Finance, V.P. of Property Management, and V.P. of Acquisitions. In the event of termination other than for cause, the contracted employee will receive a lump sum benefit equal to the average compensation in the three most highly compensated years. Upon termination, all options and rights to acquire common shares vest on the effective date of termination.


Family Relationships Among Directors

None.

Involvement in Certain Legal Proceedings.

During the past five years, none of the proposed directors or officers have been:

    1. a general partner or executive officer of any business against which any bankruptcy petition was filed, either at the time of the bankruptcy or two years prior to that time;
    2. convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
    3. subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
    4. found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Audit Committee Financial Expert.

Coronation will not initially have an audit committee financial expert serving on the new board of directors of Coronation or an audit committee at the time of the merger. Coronation intends to look at the feasibility and benefit of such an expert would add to Coronation. It is unlikely, however, Coronation will be able to attract an independent financial expert to serve on Coronation's board of directors at this stage of its development. In order to entice such a director to join Coronation's board of directors, Coronation would probably need to acquire directors' errors and omission liability insurance and provide some form of meaningful compensation to such a director; two things which the new board of directors of Coronation will examine the feasibility of these measures after the completion of the merger.

Code of Ethics.

Coronation adopted a Code of Ethics which was filed as Exhibit 21 to its Form 10-KSB filed March 31, 2003. The public may obtain a copy of Coronation's Code of Ethics on written request without charge from Coronation at either: P.O. Box 741, Bellevue, Washington, 98009; or from Supreme's office at 431 E. 75th Street, Chicago, Illinois 60619 which will become Coronation's office on close of the merger.

Executive Compensation

Summary of Compensation of Executive Officers.

No compensation of any kind was paid to Coronation's sole officer and director, Mr. Harry Miller, over the last three years.


The current board of directors of Supreme will become the board of directors of Coronation on closing of the merger. The following table summarizes the compensation paid to Supreme's President and Chief Executive Officer during the last three complete fiscal years. No other officer or director received annual compensation in excess of $100,000 during the last three complete fiscal years.

Summary Compensation Table

SUMMARY COMPENSATION TABLE

Name and Principal Position

Year

Annual Compensation

Long Term Compensation

All Other Compen- sation

    Salary Bonus Other Annual Compen- sation Awards Payouts  
          Securities Under Options/ SARs Granted Restricted Shares or Restricted Share Units LTIP Payouts  
Thomas Elliott, President, CEO and Director 2002
2001
2000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
5,000,000
5,000,000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Jean LeRoy, CFO 2002
2001
2000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
4,400,000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil

Stock Options/SAR Grants.

No grants of stock options or stock appreciation rights were made during the fiscal year ended December 31, 2002 to Coronation's named executive officers or any other parties.

Supreme issued an aggregate total of 9,400,000 stock options which were immediately exercised for 9,400,000 shares in Supreme.

[Continued on Next Page]


Aggregate Option/SAR Exercises

Aggregate Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

(a)

(b)

(c)

(d)

(e)

Name

Shares Acquired on Exercise (#)

Value Realized ($)

Number of Securities Underlying Unexercised Options/SARs at FY-End (#)
Exercisable/Unexercisable

Value of Unexercised In-the Money Options/SARs at FY-End ($)
Exercisable/Unexercisable

Thomas Elliott, President, CEO and Director

5,000,000

50,000

0/0

0/0

Jean LeRoy, CFO

4,400,000

44,000

0/0

0/0

Long-Term Incentive Plans.

There are no arrangements or plans in which Coronation does or will provide post-merger pension, retirement or similar benefits for directors or executive officers, except that Coronation's directors and executive officers may receive stock options at the discretion of its board of directors. Coronation does not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to its directors or executive officers, except that stock options may be granted at the discretion of Coronation's board of directors.

Compensation of Directors.

Coronation has no plans or arrangement pursuant to which its directors are to be compensated for their services in their capacity as directors except for the granting from time to time of incentive stock options. The board of directors may award special remuneration to any director undertaking any special services on behalf of Coronation other than services ordinarily required of a director. Other than indicated in this information statement/prospectus, we do not anticipate that any director will receive and/or accrued any compensation for his services as a director, including committee participation and/or special assignments.

Employment Contracts and Termination of Employment or Change of Control.

Coronation has no plans or arrangements in respect of remuneration received or that may be received by its proposed executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.

Certain Relationships and Related Transactions

There have been no related party transactions, or any other transactions or material relationships between Supreme and the proposed board of directors or Coronation and the proposed board of directors and none is anticipated.


PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
 

Indemnification of Directors and Officers

The Articles of Incorporation of Coronation allows Coronation on a case by case basis to indemnify the directors and officers of Coronation to the fullest extent permitted by Nevada law. Nevada law presently provides that in the case of a non-derivative action (that is, an action other than by or in the right of a corporation to procure a judgment in its own favor), a corporation has the power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding by reason of the fact that the person is or was an agent of the corporation, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe that the conduct of the person was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent does not, of itself, create a presumption that the person did not act in good faith and in a manner that the person reasonably believed to be in the best interests of the corporation or that the person had reasonable cause to believe that the person's conduct was unlawful.

With respect to derivative actions, Nevada law provides that a corporation has the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was an agent of the corporation, against expenses actually and reasonably incurred by that person in connection with the defence or settlement of the action if the person acted in good faith, in a manner the person believed to be in the best interests of the corporation and its stockholders. Indemnification is not permitted to be made in respect of any claim, issue, or matter as to which the person shall have been adjudged to be liable to the corporation in the performance of that person's duty to the corporation and its stockholders, unless and only to the extent that the court in which the proceeding is or was pending determines that, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for expenses, and then only to the extent that the court shall determine.

The agreement and plan of exchange and reorganization (the "merger agreement") described in this registration statement provides for Coronation and Supreme to indemnify and hold harmless, any officer, director, or employees of Coronation or Supreme against losses, claims, liabilities, expenses (including reasonable attorneys' fees and expenses), judgments, fines and amounts paid in settlement in accordance herewith in connection with any threatened or actual claim, action, suit, proceeding or investigation.

INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING CORONATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS THEREFORE UNENFORCEABLE.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibit
Number

   

Description

 
 

 
 

 2

    Agreement and Plan of Exchange and Reorganization dated as of March 31, 2003 by and among Coronation Acquisition Corp. and Supreme Property, Inc.
 

 3.1

    Articles of Incorporation as amended of Coronation Acquisition Corp. (incorporated by reference to Exhibit 3.1 of Coronation's Form 10SB Registration Statement, filed on April 30 2002).
 

 3.2

    Articles of Amendment of Coronation Acquisition Corp. (incorporated by reference to Exhibit 3.2 of Coronation's Form 10SB Registration Statement, filed on April 30 2002).
 

3.3

    Bylaws of Coronation Acquisition Corp. (incorporated by reference to Exhibit 3.3 of Coronation's Form 10SB Registration Statement, filed on April 30 2002).
 

 3.4

    Articles of Incorporation of Supreme Property, Inc.
 

3.5

    Articles of Amendment of Supreme Property, Inc.
 

 3.6

    Bylaws of Supreme Property Inc.
 

 4.1

    Specimen Common Stock Certificate of Coronation Acquisition Corp. (incorporated by reference to Exhibit 4.1 of Coronation's Form 10SB Registration Statement, filed on April 30 2002).
 

4.2

    Escrow Agreement of Former Supreme Property, Inc. Stockholders
 

4.3

    Illinois Dissenter's Rights
 

13.1

    Audited Financial Statements of Coronation Acquisition Corp. for year ended December 31, 2002 (incorporated by reference from Coronation's Form 10-KSB filed on March 31, 2003).
 

13.2

    Unaudited Financial Statements of Coronation Acquisition Corp. for period ended March 31, 2003 (incorporated by reference from Coronation's Form 10-QSB/A filed on May 19, 2003).
 

13.3

    Audited Financial Statements of Supreme Property, Inc. for year ended December 31, 2002.
 

21

    Subsidiaries of Supreme Property, Inc.
 

23

    Consent of Richard Walker and Co.
 

99.a

    Form of Written Consent of Majority Stockholders of Supreme Property, Inc.

 

Undertakings

The undersigned registrant hereby undertakes:

(a)(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

      (i)  To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
      (ii)  To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth 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 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
  (iii)  To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
      (2)    That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)   To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(b) The undersigned registrant hereby undertakes:

 (1)  

That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

 (2)  

That every prospectus (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 (3)  

That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(4)  

To respond to requests for information that is incorporated by reference into the information statement/prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(5)  

To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
  (6)   Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Bellevue, State of Washington, on May 27, 2003

   
 

CORONATION ACQUISITION CORP.

 

 

By

 /s/ Harry Miller
 
 

Harry Miller, President, Secretary & Treasurer

   
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
   
   /s/Thomas Elliott
 
  Thomas Elliott, President
  SUPREME PROPERTY, INC.
   
  May 27, 2003
 

/s/ Harry Miller
 
  Harry Miller, President, Secretary & Treasurer
  CORONATION ACQUISITION CORP.
   
  May 27, 2003
 


EXHIBIT 2 - AGREEMENT OF PLAN OF EXCHANGE AND REORGANIZATION HTML

exhibit2_agreement.htm


EXHIBIT 2

Agreement and Plan of Exchange and Reorganization Dated as of March 31, 2003
By and Between Coronation Acquisition Corp. and Supreme Property, Inc.

 

AGREEMENT

and

PLAN OF EXCHANGE

and

REORGANIZATION

by and between

CORONATION ACQUISITION CORP.

and

SUPREME PROPERTY, INC.

 

 

Dated for reference March 31, 2003


TABLE OF CONTENTS

RECITALS  4
ARTICLE 1. THE EXCHANGE 5
  1.1 THE EXCHANGE 5
  1.2 CLOSING 5
  1.3 EFFECTIVE DATE 5
  1.4 EFFECT OF THE EXCHANGE ON BYLAWS 5
  1.5 BOARD OF DIRECTORS OF PUBLICCO 6
  1.6 NAME OF THE CORPORATION 6
  1.7 SHAREHOLDER APPROVAL 6
  1.8 DISSENTER'S RIGHTS 6
  1.9 EXCHANGE RATIOS AND OTHER EXCHANGE CONSIDERATIONS 6
  1.10 EXCHANGE OF CERTIFICATES 7
     
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF PUBLICCO 8
  2.1 ORGANIZATION, STANDING, AND POWER 8
  2.2 SUBSIDIARIES OR OTHER AFFILIATED ENTITIES 9
  2.3 CAPITAL STRUCTURE 9
  2.4 SEC DOCUMENTS 9
  2.5 FINANCIAL STATEMENTS 10
  2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS 10
  2.7 LITIGATION 10
  2.8 TAXES 11
  2.9 NO PAYMENTS TO EMPLOYEES 11
  2.10 BROKERS AND ADVISORS; SCHEDULE OF FEES AND EXPENSES 12
  2.11 COMPLIANCE WITH LAWS 12
  2.12 CONTRACTS; DEBT INSTRUMENTS 13
  2.13 STATE TAKEOVER STATUTES. 13
     
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SUPREME 13
  3.1 ORGANIZATION, STANDING, AND POWER 13
  3.2 SUBSIDIARIES OR OTHER AFFILIATED ENTITIES 14
  3.3 CAPITAL STRUCTURE 14
  3.4 FINANCIAL STATEMENTS 14
  3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS 14
  3.6 LITIGATION 15
  3.7 TAXES 15
  3.8 BROKERS AND ADVISORS; SCHEDULE OF FEES AND EXPENSES 16
  3.9 COMPLIANCE WITH LAWS 16
  3.10 CONTRACTS; DEBT INSTRUMENTS 16
     
ARTICLE 4. COVENANTS 17
  4.1 CONDUCT OF BUSINESS PENDING EXCHANGE 17
     
ARTICLE 5. ADDITIONAL COVENANTS 20
  5.1 PREPARATION OF THE FORM S-4; CONSENT SOLICITATIONS 20
  5.2 ACCESS TO INFORMATION; CONFIDENTIALITY 20
  5.3 TAX MATTERS 21
  5.4 PUBLIC ANNOUNCEMENTS 21
  5.5 LISTING 21
  5.6 TRANSFER AND GAINS TAXES 21
  5.7 INDEMNIFICATION 22
  5.8 FEES AND EXPENSES 22
     
ARTICLE 6. CONDITIONS 23
  6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE EXCHANGE 23
  6.2 CONDITIONS TO OBLIGATIONS OF SUPREME 23
  6.3 CONDITIONS TO OBLIGATIONS OF PUBLICCO 24
     
ARTICLE 7. TERMINATION, AMENDMENT, AND WAIVER 25
  7.1 TERMINATION 25
  7.2 AMENDMENT 26
  7.3 EXTENSION; WAIVER 26
     
ARTICLE 8. GENERAL PROVISIONS 26
  8.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES 26
  8.2 NOTICES 26
  8.3 INTERPRETATION 28
  8.4 COUNTERPARTS 28
  8.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES 28
  8.6 GOVERNING LAW 29
  8.7 ASSIGNMENT 29
  8.8 ENFORCEMENT 29
  8.9 SEVERABILITY 29
  8.10 EXCULPATION 30
  8.11 JOINT AND SEVERAL OBLIGATIONS 30
     
EXHIBIT A  - NEVADA ARTICLES OF MERGER OR EXCHANGE  
EXHIBIT B  - ILLINOIS ARTICLES OF MERGER OR EXCHANGE  
EXHIBIT C  - ACTION STOCKS, INC. ENGAGEMENT LETTER  
SCHEDULE 1  - PUBLICCO SEC DOCUMENTS  
SCHEDULE 2  - PUBLICCO LIABILITIES AND OBLIGATIONS  
SCHEDULE 3  - PUBLICCO SHAREHOLDERS  
SCHEDULE 4  - SUPREME LIABILITIES AND OBLIGATIONS  


    
THIS AGREEMENT AND PLAN OF EXCHANGE and REORGANIZATION (this "Agreement") dated for reference this 31st day of March, 2003, by and between CORONATION ACQUISITION CORP., a Nevada corporation, (hereinafter referred to as "PublicCo"), and SUPREME PROPERTY, INC., an Illinois corporation, (hereinafter referred to as SUPREME).

 

RECITALS

  1. The Board of Directors of PublicCo and the Board of Directors of Supreme deem it advisable and in the best interests of their respective shareholders, upon the terms and subject to the conditions contained herein, that the outstanding common stock of Supreme shall be exchanged for the newly-issued common stock of PublicCo(the "Exchange").
  2. Upon the terms and subject to the conditions set forth herein, PublicCo shall execute Articles of Merger or Exchange (the "Nevada Articles of Exchange")in substantially the form attached hereto as EXHIBIT A and shall file such Nevada Articles of Merger in accordance with Nevada law to effectuate the Merger.
  3. Concurrently with the filing of the Nevada Articles of Merger, Supreme shall execute Articles of Merger, Consolidation, or Exchange (the "Illinois Articles of Exchange") in substantially the form attached hereto as EXHIBIT B and shall file such Illinois Articles of Exchange in accordance with Illinois law to effectuate the Exchange.
  4. For federal income tax purposes, it is intended that the Exchange shall qualify as a reorganization under Section 368(a)(1)(B) of the Internal Revenue Code, as amended (the "Code"), and that this Agreement shall constitute a plan of reorganization under Section 368(a)(1)(B) of the Code.
  1. PublicCo and Supreme desire to make certain representations, warranties and agreements in connection with the Exchange.

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein, the parties hereto hereby agree as follows:


ARTICLE 1. THE EXCHANGE

1.1 THE EXCHANGE. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with provisions of the Illinois Business Corporation Act of 1983, as amended, and Chapter 92A of the Nevada Revised Statutes of 2001, as amended, all of the outstanding common stock of Supreme shall be acquired in exchange for 90% of the outstanding common stock PublicCo, and other valuable consideration. Thereafter, Supreme shall become a wholly-owned subsidiary of PublicCo.

1.2 CLOSING. The closing of the Exchange (the "Closing") will take place commencing at 9:00 a.m., local time, on the date to be specified by the parties, which (subject to satisfaction or waiver of the conditions set forth in Article 6) shall be no later than the third business day after satisfaction or waiver of the conditions set forth in Section 6.1(a) (the "Closing Date"), at the offices of Action Stocks, Inc., 990 Highland Drive  - Suite 106, Solana Beach, California, 92075, unless another date or place is agreed to in writing by the parties.

1.3 EFFECTIVE DATE. The Exchange shall become effective (the "Effective Date") at such time as PublicCo and Supreme shall agree should be specified in the Illinois Articles of Exchange, and the Nevada Articles of Exchange (not to exceed three (3) days after the Nevada Articles of Exchange are accepted for record by the Secretary of State). Unless otherwise agreed, the parties shall cause the Effective Date to occur on the Closing Date. As soon as practicable on or following the Closing Date: (i) PublicCo and Supreme shall execute and file the Articles of Exchange with the Office of the Secretary of State of the State of Nevada, and (ii) PublicCo and Supreme shall then execute and file the Illinois Articles of Exchange with the Office of the Secretary of State of the State of Illinois, and shall make all other filings and recordings required, with respect to the Exchange, under the laws of the states of Nevada and Illinois, respectively.

1.4 EFFECT OF THE EXCHANGE ON BYLAWS. The Bylaws of Supreme, as in effect immediately prior to the Effective Date of the Exchange, shall continue in full force and effect after the Exchange as the bylaws of Supreme and, until further amended, in accordance with the laws of the State of Nevada until the same shall be amended or repealed in accordance with the provisions thereof.


1.5 BOARD OF DIRECTORS OF PUBLICCO. The Board of Trustees of PUBLICCO shall consist of the members of Supreme's Board of Directors immediately prior to the Effective Date of the Exchange, who shall continue to serve for the balance of their unexpired terms or their earlier death, resignation, or removal, along with one(1) member from PublicCo's Board of Directors immediately prior to the Effective Date of the Exchange, and one(1) independent director nominated and elected by the voting shareholders of PUBLICCO stock.

1.6 NAME OF THE CORPORATION. As soon as practicable following the satisfaction or waiver of the conditions set forth in Article 6, the Board of Directors of PublicCo shall change the corporation's name to SUPREME REALTY INVESTMENT TRUST, INC., and that shall remain the name of PUBLICCO.

1.7 SHAREHOLDER APPROVAL. PublicCo shall seek the requisite approval its shareholders to the extent required by laws of the State of Nevada to effectuate the transactions contemplated by this Exchange Agreement. Supreme shall seek the requisite approval its shareholders to the extent required by laws of the State of Illinois to effectuate the transactions contemplated by this Exchange Agreement.

1.8 DISSENTER'S RIGHTS. Pursuant to Section 92A.390 of the Nevada Revised Statutes of 2001, as amended, the holders of PublicCo common stock have no right of dissent with respect to this Exchange Agreement. Pursuant to Chapter 805, Section 11.65 of the Illinois Compiled Statutes, holders of Supreme common stock do have the right to dissent with respect to this Exchange Agreement.

1.9 EXCHANGE RATIOS AND OTHER EXCHANGE CONSIDERATIONS. As soon as practicable following the satisfaction or waiver of the conditions set forth in Article 6:

(a) Each of the issued and outstanding shares of common stock of SUPREME shall be tendered and exchanged for 1.3953 validly issued, fully paid, and nonassessable shares of no par, common stock of PUBLICCO. Each certificate, properly endorsed and nominally representing shares of common stock of SUPREME shall be evidence of ownership of said common stock as of the Effective Date. The holders of such certificates shall be required to surrender the same in exchange for the properly registered certificates evidencing ownership of shares of the common stock of PUBLICCO.


(b) As additional consideration, SUPREME will assume Four thousand seven hundred and 00/100($4,700.00) of PUBLICCO'S existing liabilities.

(c) PUBLICCO shall issue 1,350,000 shares of its common stock to SG Financial Services Group and 300,000 shares of its common stock to Nick Segounis for their role in introducing SUPREME and PUBLICCO. And,

(d) Mr. Miller will return to the treasury of PUBLICCO 3,650,000 share of the 5,000,000 shares of common stock he currently holds in PUBLICCO for cancellation and PUBLICCO shall cancel the 3,650,000 shares of common stock returned to treasury by Mr. Miller.

1.10 EXCHANGE OF CERTIFICATES.

(a) EXCHANGE AGENT. As soon as practicable following the satisfaction or waiver of the conditions set forth in Article 6, the parties shall appoint Interstate Transfer Company (the "Exchange Agent"), of 6084 S. 900 E. Street, Suite 101, Salt Lake City, Utah, 84121 to act as exchange agent for the exchange of the certificates representing the issued and outstanding shares of PublicCo and Supreme, respectively.

(b) EXCHANGE PROCEDURE. As soon as practicable after the Effective Date, PublicCo shall use commercially reasonable efforts to cause the Exchange Agent to mail to each holder of record of a certificate, which, prior to the Effective Date, represented shares Supreme common stock, (i) a letter of transmittal which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in a form and have such other provisions as PublicCo may reasonably specify, and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the shares of PublicCo. Upon surrender to the Exchange Agent, a Certificate for cancellation, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Exchange Agent, the holder of such Certificate shall be entitled to receive in exchange therefor, the shares of PublicCo into which the shares of Supreme Common Stock theretofore represented by such Certificate shall have been exchanged, at the rate designated in Section 1.9 above.


(c) NO PRE-CLOSING DIVIDENDS. The Board of Directors of PublicCo and Supreme, respectively warrant and represent that no dividends were declared at any time prior to the Closing Date.

(d) FRACTIONAL SHARES. No certificates or scrip representing fractional shares of PublicCo shall be issued pursuant to this Agreement. If such fractional shares should occur as a result of the exchange rate, such fractional shares shall be rounded down to the nearest whole share.

(e) LOST CERTIFICATES. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by PUBLICCO or the Exchange Agent, the posting by such person of a bond in such reasonable amount as PUBLICCO or the Exchange Agent may direct (but consistent with the practices PUBLICCO applies to its own shareholders) as indemnity against any claim that may be made against them with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the PUBLICCO Common Shares to which the holders thereof are entitled pursuant to Section 1.9.

 

ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF PUBLICCO

The Board of Directors of PublicCo hereby warrant and represent to the Board of Directors of Supreme the following:

2.1 ORGANIZATION, STANDING, AND POWER. PublicCo has been duly organized and is validly existing and in good standing under the laws of the State of Nevada. PublicCo has all requisite corporate power and authority to own, operate, lease, and encumber its properties and carry on its business as now being conducted. The PublicCo Articles of Incorporation, as amended (the "PublicCo Articles") are in effect, and no dissolution, revocation or forfeiture proceedings regarding PublicCo have been commenced. PublicCo is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed, individually or in the aggregate, would not have a material adverse effect on the business, properties, assets, financial condition or results of operations of PublicCo. PublicCo has delivered to Supreme complete and correct copies of the PublicCo Articles of Incorporation, Bylaws (the "PublicCo Bylaws"), and a Certificate of Good Standing issued by the Office of the Secretary of State of Nevada, in each case, as amended or supplemented to the date of this Agreement.


2.2 SUBSIDIARIES OR OTHER AFFILIATED ENTITIES. PublicCo has no ownership or equity interests in any affiliate, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, syndicate, cartel, or other business combination or other legal entity.

2.3 CAPITAL STRUCTURE. PublicCo has authorized capital stock consisting of 100,000,000 shares of $.0001 par value, common stock, of which 5,000,000 shares have been issued and outstanding.

2.4 SEC DOCUMENTS. To the best of their knowledge, the Board of Directors of PublicCo have filed all required reports, schedules, forms, statements and other documents with the SEC since January 1 2002, through the date hereof (the "PublicCo SEC Documents"). SCHEDULE 1 contains a complete list of all PublicCo SEC Documents filed by PublicCo with the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), between January 1, 2002 and the date of this Agreement. All of the PublicCo SEC Documents (other than preliminary material), as of their respective filing dates, complied in all material respects with all applicable requirements of the Securities Act and the Exchange Act and, in each case, the rules and regulations promulgated thereunder applicable to such PublicCo SEC Documents. None of the PublicCo SEC Documents, at the time of filing, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein in order to make the statements therein, not misleading, except to the extent such statements have been modified or superseded by later PublicCo SEC Documents filed and publicly available prior to the date of this Agreement.


2.5 FINANCIAL STATEMENTS. To the best of their knowledge, the Board of Directors represent that the financial statements of PublicCo included in the PublicCo SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles ("GAAP") (except, in the case of unaudited statements, as permitted by the applicable rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly presented in all material respects, in accordance with the applicable requirements of GAAP and the applicable rules and regulations of the SEC, the financial position of PublicCo as of the dates thereof and the consolidated results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except for liabilities and obligations set forth in the PublicCo SEC Documents or in SCHEDULE 2, attached hereto, PublicCo has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of PublicCo or in the notes thereto in which, individually, or in the aggregate would have a material adverse effect.

2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the most recent audited financial statements included in the PublicCo SEC documents, PublicCo has conducted its business only in the ordinary course and there have not been, (a) any material adverse change in the business, financial condition or results of operations of PublicCo, nor has there been any occurrence or circumstance that, with the passage of time, would reasonably be expected to result in a material adverse change.

2.7 LITIGATION. There is no suit, action, or proceeding pending in which service of process has been received by an employee, officer, or director of PublicCo or, to the knowledge of PublicCo threatened in writing against or affecting PublicCo, that would reasonably be expected to (i) have a material adverse effect or (ii) prevent the consummation of any of the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any court or governmental entity or arbitrator outstanding against PublicCo, having, or which, insofar as reasonably can be foreseen in the future, would have any such effect.


2.8 TAXES. For a taxable years for which the Internal Revenue service can assert a tax liability, PublicCo has filed all tax returns and reports required to be filed by it and all such returns and reports are accurate and complete in all material respects. PublicCo has paid all taxes shown on such returns and reports as required to be paid by it, and has complied in all material respects with all applicable laws, and has, within the time period prescribed by law, withheld and paid over to the proper governmental entities all amounts required to be so withheld and paid over under applicable laws and regulations. The most recent audited financial statements contained in the PublicCo SEC Documents reflect an adequate reserve for all material taxes payable by PublicCo, if any, for all taxable periods and portions thereof through the date of such financial statements. Since the PublicCo Financial Statement Date, PublicCo has incurred no liability for taxes arising from a prohibited transaction, or has incurred no material liability for taxes other than in the ordinary course of business. No event has occurred, and no condition or circumstance exists, which presents a material risk that any material tax described in the preceding sentences will be imposed upon PublicCo. PublicCo is not the subject of any audit, examination, or other proceeding in respect of federal income Taxes, and to PublicCo's knowledge, no audit, examination or other proceeding in respect of federal income Taxes is being considered by any Tax authority. As used in this Agreement, "taxes" shall include all taxes, charges, fees, levies and other assessments, including, without limitation, income, gross receipts, excise, property, sales, withholding including, without limitation, dividend withholding and withholding required pursuant to Sections 1445 and 1446 of the Code), social security, occupation, use, service, license, payroll, franchise, transfer and recording taxes, fees and charges, including estimated taxes, imposed by the United States or any taxing authority (domestic or foreign), and any interest, fines, penalties or additional amounts attributable to, or imposed upon, or with respect to any such taxes, charges, fees, levies or other assessments.

2.9 NO PAYMENTS TO EMPLOYEES, OFFICERS OR DIRECTORS. There are no arrangements, agreements or plans pursuant to which cash and non-cash payments which will become payable


(and the maximum aggregate amount which may be payable thereunder) to each employee, officer or director of PublicCo as a result of the Exchange or a termination of service subsequent to the consummation of the Exchange. Except otherwise provided for in this Agreement, there is no employment or severance contract, or other agreement requiring payments, cancellation of indebtedness or other obligation to be made on a change of control or otherwise as a result of the consummation of any of the transactions contemplated by this Agreement or as a result of a termination of service subsequent to the consummation of any of the transactions contemplated by this Agreement, with respect to any employee, officer or director of PublicCo. There is no agreement or arrangement with any employee, officer or other service provider under which PublicCo has agreed to pay any tax that might be owed under with respect to payments to such individuals.

2.10 BROKERS AND ADVISORS; SCHEDULE OF FEES AND EXPENSES. No broker, investment banker, financial advisor or other person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of PublicCo.

2.11 COMPLIANCE WITH LAWS. PublicCo has not violated or failed to comply with any statute, law, ordinance, regulation, rule, judgment, decree or order of any governmental entity applicable to its business,

properties or operations, except to the extent that such violation or failure would not reasonably be expected to have a material adverse effect.

2.12 CONTRACTS; DEBT INSTRUMENTS. PublicCo has not received a written notice that it is in violation of or in default under (nor to the knowledge of PublicCo does there exist any condition which upon the passage of time or the giving of notice or both would cause such a violation of or default under) any material loan or credit agreement, note, bond, mortgage, indenture, lease, permit, concession, franchise, license or any other material contract, agreement, arrangement or understanding, to which it is a party or by which it or any of its properties or assets is bound, nor to the Knowledge of PublicCo does such a violation or default exist, except to the extent that such violation or default, individually or in the aggregate, would not reasonably be expected to have a material adverse effect. Except for any of the following expressly


identified in PublicCo SEC Documents, SCHEDULE 2 sets forth a list of each material loan or credit agreement, note, bond, mortgage, indenture and any other agreement or instrument pursuant to which any indebtedness is outstanding or may be incurred. For purposes of this Section 2.12, "indebtedness" shall mean (i) indebtedness for borrowed money, whether secured or unsecured, (ii) obligations under conditional sale or other title retention agreements relating to property purchased by such person, (iii) capitalized lease obligations, (iv) obligations under interest rate cap, swap, collar or similar transaction or currency hedging transactions (valued at the termination value thereof) and (v) guarantees of any such indebtedness of any other person.

2.13 STATE TAKEOVER STATUTES. PublicCo has taken all action necessary to exempt the transactions contemplated by this Agreement between Supreme and PublicCo from the operation of any "fair price," "moratorium," "control share acquisition" or any other anti-takeover statute or similar statute enacted under the laws of the State of Nevada or federal laws of the United States or similar statute or regulation (a "Takeover Statute").

 

ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SUPREME

The Board of Directors of Supreme hereby warrant and represent to the Board of Directors of PublicCo the following:

3.1 ORGANIZATION, STANDING, AND POWER. Supreme has been duly organized and is validly existing and in good standing under the laws of the State of Illinois. Supreme has all requisite corporate power and authority to own, operate, lease, and encumber its properties and carry on its business as now being conducted. The Supreme Articles of Incorporation, as amended (the "Supreme Articles") are in effect, and no dissolution, revocation or forfeiture proceedings regarding Supreme have been commenced. Supreme is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed, individually or in the aggregate, would not have a material adverse effect


on the business, properties, assets, financial condition or results of operations of Supreme. Supreme has delivered to PublicCo complete and correct copies of the Supreme Articles of Incorporation, Bylaws (the "Supreme Bylaws"), and a Certificate of Good Standing issued by the Office of the Secretary of State of Illinois, in each case, as amended or supplemented to the date of this Agreement.

3.2 SUBSIDIARIES OR OTHER AFFILIATED ENTITIES. Supreme owns a majority equity interest in its mortgage banking subsidiary, Supreme Capital Funding, Inc.("Capital"). Capital is an Illinois corporation that is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the requisite corporate power and authority to own, operate, lease, and encumber real properties, and carry on its business as now being conducted. Supreme has no ownership or equity interests in any other affiliate, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, syndicate, cartel, or other business combination or other legal entity.

3.3 CAPITAL STRUCTURE. Supreme has authorized capital stock consisting of 100,000,000 shares of $.01 par value, common stock, of which 19,342,000 shares have been duly issued and are now outstanding.

3.4 FINANCIAL STATEMENTS. The financial statements of Supreme included in the preliminary materials have been prepared in accordance with generally accepted accounting principles ("GAAP") (except, in the case of unaudited statements), applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly presented in all material respects, in accordance with the applicable requirements of GAAP. The financial position of Supreme as of the dates thereof and the consolidated results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Supreme has no other liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of PublicCo or in the notes thereto in which, individually, or in the aggregate would have a material adverse effect.

3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the most recent financial statements included in the preliminary materials, Supreme has conducted its business only in the ordinary course and there have not been, (a) any material adverse change in the business, financial condition or results of operations of Supreme, nor has there been any occurrence or circumstance that, with the passage of time, would reasonably be expected to result in a material adverse change.


3.6 LITIGATION. There is no suit, action, or proceeding pending in which service of process has been received by an employee, officer, or director of Supreme or, to the knowledge of Supreme threatened in writing against or affecting Supreme, that would reasonably be expected to (i) have a material adverse effect or (ii) prevent the consummation of any of the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any court or governmental entity or arbitrator outstanding against Supreme, having, or which, insofar as reasonably can be foreseen in the future, would have any such effect.

3.7 TAXES. For the taxable years for which the Internal Revenue service can assert a tax liability, Supreme has filed all tax returns and reports required to be filed by it and all such returns and reports are accurate and complete in all material respects. Supreme has paid all taxes shown on such returns and reports as required to be paid by it, and has complied in all material respects with all applicable laws, and has, within the time period prescribed by law, withheld and paid over to the proper governmental entities all amounts required to be so withheld and paid over under applicable laws and regulations. Since the Supreme Financial Statement Date, Supreme has incurred no liability for taxes arising from a prohibited transaction, or has incurred no material liability for taxes other than in the ordinary course of business. No event has occurred, and no condition or circumstance exists, which presents a material risk that any material tax described in the preceding sentences will be imposed upon Supreme. Supreme is not the subject of any audit, examination, or other proceeding in respect of federal income Taxes, and to Supreme's knowledge, no audit, examination or other proceeding in respect of federal income Taxes is being considered by any Tax authority. As used in this Agreement, "taxes" shall include all taxes, charges, fees, levies and other assessments, including, without limitation, income, gross receipts, excise, property, sales, withholding including, without limitation, dividend withholding and withholding required pursuant to Sections 1445 and 1446 of the Code), social security, occupation, use, service, license, payroll, franchise, transfer and recording taxes, fees and charges, including estimated taxes, imposed by the United States or any taxing authority (domestic or foreign), and any interest, fines, penalties or additional amounts attributable to, or imposed upon, or with respect to any such taxes, charges, fees, levies or other assessments.


3.8 BROKERS AND ADVISORS; SCHEDULE OF FEES AND EXPENSES. No broker, investment banker, financial advisor or other person, other than Action Stocks, Inc., ("Action"), the fees and expenses of which are described in its Advisory Services Agreement dated April 12, 2002, between Action and Supreme, a true, correct, and complete copy of which is attached as Exhibit C, is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of Supreme.

3.9 COMPLIANCE WITH LAWS. Supreme has not violated

or failed to comply with any statute, law, ordinance, regulation, rule, judgment, decree or order of any governmental entity applicable to its business, properties or operations, except to the extent that such violation or failure would not reasonably be expected to have a material adverse effect.

3.10 CONTRACTS; DEBT INSTRUMENTS. Supreme has not received a written notice that it is in violation of or in default under (nor to the knowledge of Supreme does there exist any condition which upon the passage of time or the giving of notice or both would cause such a violation of or default under) any material loan or credit agreement, note, bond, mortgage, indenture, lease, permit, concession, franchise, license or any other material contract, agreement, arrangement or understanding, to which it is a party or by which it or any of its properties or assets is bound, nor to the knowledge of Supreme does such a violation or default exist, except to the extent that such violation or default, individually or in the aggregate, would not reasonably be expected to have a material adverse effect. SCHEDULE 4 sets forth a list of each material loan or credit agreement, note, bond, mortgage, indenture and any other agreement or instrument pursuant to which any indebtedness is outstanding or may be incurred. For purposes of this Section 3.11, "indebtedness" shall mean (i) indebtedness for borrowed money, whether secured or unsecured, (ii) obligations under conditional sale or other title retention agreements relating to property purchased by such person, (iii) capitalized lease obligations, (iv) obligations under interest rate cap,swap, collar or similar transaction or currency hedging transactions (valued at the termination value thereof) and (v) guarantees of any such indebtedness of any other person.


ARTICLE 4. COVENANTS

4.1 CONDUCT OF BUSINESS PENDING EXCHANGE. During the period from the date of this Agreement to the Effective Date, except as consented to in writing, or as expressly provided for in this Agreement, both parties shall use commercially reasonable efforts to:

    1. conduct its business only in the usual, regular, and ordinary course and in substantially the same manner as heretofore conducted;
    2. preserve intact its business organizations and goodwill;
    3. confer on a regular basis with one or more representatives of the other party to report operational matters of materiality and, subject to Section 4.3, any proposals to engage in material transactions;
    4. promptly notify the other party of any material emergency or other material change in the condition (financial or otherwise), business, properties, assets, liabilities or the normal course of its businesses or of any material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated);
    5. promptly deliver to the other party true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement;
    6. maintain its books and records in accordance with GAAP consistently applied and not change in any material manner any of its methods, principles or practices of accounting in effect at the Financial Statement Date, except as may be required by the SEC, applicable law or GAAP;
    7. duly and timely file all reports, tax returns and other documents required to be filed with federal, state, local and other authorities, subject to extensions permitted by law, not make or rescind any express or deemed election relative to taxes (unless required by law;
    8. not acquire, enter into any option to acquire, or exercise an option or other right or election or enter into any other commitment or contractual obligation (each, a "Commitment") for the acquisition of any real property or, except as permitted in a budget approved in writing by the other party;
    9. encumber assets or commence construction of, or enter into any commitment to develop or construct other real estate projects, except in the ordinary course of its business;
    10. incur or enter into any Commitment to incur additional indebtedness (secured or unsecured)
    11. terminate, or enter into any Commitment to modify, amend or terminate, any indebtedness (secured or unsecured) in existence as of the date hereof;
    12. not amend the Articles of Incorporation or the Bylaws;
    13. make no change in the number of shares of capital stock issued and outstanding, except as described in Section 2.3(b) of this Agreement;
    14. grant no options or other right or commitment relating to its shares of capital stock or any security convertible into its shares of capital stock or any security the value of which is measured by shares of beneficial interest, or any security subordinated to the claim of its general creditors;
    15. not amend or waive any rights under any of the PublicCo Stock Options or PublicCo Stock Rights;
    16. authorize, declare, set aside or pay any dividend or make any other distribution or payment with respect to any common stock, preferred stock or indirectly redeem, purchase or otherwise acquire any shares of capital stock or any option, warrant or right to acquire, or security convertible into, shares of capital stock;
    17. not sell, lease, mortgage, subject to lien or otherwise dispose of any assets, except in that is made in the ordinary course of business and is the subject of a binding contract in existence on the date of this Agreement;
    18. not make any loans, advances or capital contributions to, or investments in, any other person; and
    19. not enter into any new, or amend or supplement any existing, contract, lease or other agreement;
    20. not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent financial statements (or the notes thereto) furnished to the other party or incurred in the ordinary course of business and consistent with past practice;
    21. not guarantee the indebtedness of another Person, enter into any "keep well" or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing;
    22. not enter into any commitment with any officer, director, affiliate, or with any consultant;
    23. not increase any compensation or enter into or amend any employment agreement with any of its officers, directors or employees;
    24. not accept a promissory note in payment of the exercise price payable under any option to purchase shares of PublicCo Common Stock;
    25. not enter into any Tax Protection Agreement;
    26. not settle or compromise any material federal, state, local or foreign tax liability; and
    27. not authorize, recommend, propose or announce an intention to do any of the foregoing prohibited actions, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing prohibited actions.

 

ARTICLE 5. ADDITIONAL COVENANTS

5.1 PREPARATION OF THE FORM S-4; CONSENT SOLICITATIONS. As promptly as practicable after execution of this Agreement, the respective parties and their investment advisors, shall prepare and file with the SEC under the Securities Act, one or more registration statements on Form S-4 (such registration statements, together with any amendments or supplements thereto, the "Form S-4"). The respective parties will cause the Form S-4 to comply as to form in all material respects with the applicable provisions of the Securities Act, the Exchange Act and the rules and regulations thereunder. Each party shall furnish all information about itself and its business and operations and all necessary financial information to the other as the other may reasonably request in connection with the preparation of the Form S-4. Supreme will duly call, give notice of, and, as soon as practicable following the date of this Agreement, give notice of this action to its stockholders (the "Supreme Notice of Board Action") for the purpose of obtaining the Supreme Stockholder Approvals. Supreme shall, through its Board of Directors, recommend to its stockholders approval of this Agreement, the Exchange and the transactions contemplated by this Agreement.

5.2 ACCESS TO INFORMATION; CONFIDENTIALITY. Each of the parties shall afford to the other parties and to the officers, employees, accountants, counsel, financial advisors and other representatives of such other party, reasonable access during normal business hours prior to the Effective Date to all their respective properties, books, contracts, commitments, personnel and records and, during such period, each of the parties shall, furnish promptly to the other party a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities laws and all other information


concerning its business, properties and personnel as such other party may reasonably request. Each of the parties shall use commercially reasonable efforts to cause its officers, employees, accountants, counsel, financial advisors and other representatives and affiliates to, hold any nonpublic information in confidence, notwithstanding the execution and delivery of this Agreement or the termination hereof.

5.3 TAX MATTERS. Both parties shall use its commercially reasonable efforts before and after the Effective Date to cause the Exchange to qualify as a "reorganization" under the provisions of Sections 368(a) of the Code and to obtain the opinions of counsel referred to in Sections 6.2(e) and 6.3(e).

5.4 PUBLIC ANNOUNCEMENTS. Each party will consult with the other party, and provide each other the opportunity to review and comment upon, before issuing any press release or other written public statements, including, without limitation, any press release or other written public statement which address in any manner the transactions contemplated by this Agreement, and shall not issue any such press release or make any such written public statement prior to such consultation, except as may be required by applicable law, court process or by obligations pursuant to any listing agreement with any national securities exchange. The parties agree that the initial press release to be issued with respect to the transactions contemplated by this Agreement will be in the form agreed to by the parties prior to the execution of this Agreement.

5.5 LISTING. PublicCo shall use commercially reasonable efforts to cause the PublicCo Common Shares to be issued in the Exchange, to be approved for listing on the NASDAQ Small Cap Market ("Small Cap"), Over-The-Counter Bulletin Board ("OTCBB"), or Bulletin Board Exchange ("BBX") subject to official notice of issuance, as soon as practicable after the Effective Date.

5.6 TRANSFER AND GAINS TAXES. Each party shall cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any real property transfer or gains, sales, use, transfer, value added stock transfer and stamp taxes, any transfer, recording, registration and other fees and any similar taxes which become payable in connection with the transactions contemplated by this Agreement (together with


any related interests, penalties or additions to tax, "Transfer and Gains Taxes"). From and after the Effective Date, PUBLICCO shall pay or cause to be paid, without deduction or withholding from any amounts payable to the holders of PUBLICCO Common Shares, all Transfer and Gains Taxes (which term shall not in any event be construed to include for these purposes any Tax imposed under the Code).

5.7 INDEMNIFICATION. In the event of any threatened or actual claim, action, suit, proceeding or investigation, whether civil, criminal or administrative, including, without limitation, any action by or on behalf of (i) any or all security holders of PublicCo; (ii) any person who is now, or has been, at any time prior to the date hereof, or who becomes prior to the Effective Date of the Exchange, an officer, employee or director of PublicCo ("Indemnification Parties"); is, or is threatened to be, made a party based in whole or in part on, or arising in whole or in part out of, or pertaining to (i) the fact that he is or was an officer, employee or director of PublicCo or any action or omission by such person in his capacity as a director, or (ii) this Agreement or the transactions contemplated by this Agreement, whether in any case asserted or arising before or after the Effective Date of the Exchange, the Indemnifying Parties shall, from and after the Effective Date of the Exchange, indemnify and hold harmless, as and to the full extent permitted by applicable law, each the officers, employees, and directors of PUBLICCO against any losses, claims, liabilities, expenses (including reasonable attorneys' fees and expenses), judgments, fines and amounts paid in settlement in accordance herewith in connection with any such threatened or actual claim, action, suit, proceeding or investigation. The new Directors of PublicCo will obtain a Director's and Officer's Liability insurance policy which will insure the officers and directors of PublicCo from any claim arising out of an alleged wrongful act by such persons in their respective capacities as officers and directors of the PublicCo.

5.8 FEES AND EXPENSES. Expenses related to the preparation of the consent solicitations, S-4 registration statement, "Blue Sky" registrations, mailings, printing of new share certificates, delivery of those certificates, Edgar filing fees, etc. will be paid by SUPREME. All other expenses relating to the preparation of financial statements, SEC filings, exhibits, etc. will be paid by the respective parties incurring the expense.



ARTICLE 6. CONDITIONS

6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE EXCHANGE. The obligations of each party to effect the Exchange and to consummate the other transactions contemplated by this Agreement to occur on the Closing Date shall be subject to the fulfillment at or prior to the Closing Date of the following conditions:

    1. SHAREHOLDER APPROVALS. The PublicCo Stockholder Approvals and the SUPREME Shareholder Approvals shall have been obtained.

       

    2. FORM S-4. The Form S-4 shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings by the SEC seeking a stop order.
    3. NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Exchange or any of the other transactions contemplated hereby shall be in effect.
    4. BLUE SKY LAWS. PublicCo shall have received all state securities or "blue sky" permits and other authorizations necessary to issue the PublicCo Common Shares issuable in the Exchange.

6.2 CONDITIONS TO OBLIGATIONS OF SUPREME. The obligations of SUPREME to effect the Exchange and to consummate the other transactions contemplated to occur on the Closing Date are further subject to the following conditions, any one or more of which may be waived by Supreme:

      1. REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties of PublicCo set forth in this Agreement, disregarding all qualifications and exceptions contained therein relating to materiality, shall be true and correct as of the Closing Date as though made on and as of the Closing Date (except to the extent that such representations and warranties are expressly limited by their terms to another date, in which case such representations and warranties shall be true and correct as of such other date), except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a material adverse effect.
      2. PERFORMANCE OF OBLIGATIONS OF PUBLICCO. PublicCo shall have performed in all material respects all obligations required to be performed by them under this Agreement at or prior to the Effective Date, and SUPREME shall have received a certificate signed on behalf of PublicCo by the chief executive officer or the chief operating officer of PublicCo, in such capacity, to such effect.
      3. MATERIAL ADVERSE CHANGE. Since the date of this Agreement, there shall have been no PublicCo material adverse change and SUPREME shall have received a certificate of the chief executive officer or chief operating officer of PublicCo, in such capacity, certifying to such effect.

6.3 CONDITIONS TO OBLIGATIONS OF PUBLICCO. The obligations of PUBLICCO to effect the Exchange and to consummate the other transactions contemplated to occur on the Closing Date are further subject to the following conditions, any one or more of which may be waived by PublicCo:

      1. REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties of Supreme set forth in this Agreement, disregarding all qualifications and exceptions contained therein relating to materiality, shall be true and correct as of the Closing Date as though made on and as of the Closing Date (except to the extent that such representations and warranties are expressly limited by their terms to another date, in which case such representations and warranties shall be true and correct as of such other date), except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a material adverse effect.
      2. PERFORMANCE OF OBLIGATIONS OF SUPREME. Supreme shall have performed in all material respects all obligations required to be performed by them under this Agreement at or prior to the Effective Date, and PUBLICCO shall have received a certificate signed on behalf of Supreme by the chief executive officer or the chief operating officer of Supreme, in such capacity, to such effect.
      3. MATERIAL ADVERSE CHANGE. Since the date of this Agreement, there shall have been no material adverse change and PUBLICCO shall have received a certificate of the chief executive officer or chief operating officer of Supreme, in such capacity, certifying to such effect.

 

ARTICLE 7. TERMINATION, AMENDMENT, AND WAIVER

7.1 TERMINATION. This Agreement may be terminated at any time prior to the Closing Date by:

    1. mutual written consent duly authorized by the Board of Directors of Supreme and the Board of Directors of PublicCo.
    2. upon a breach of or failure to perform any representation, warranty, covenant, obligation or agreement on the part of PublicCo as set forth in this Agreement, or if any representation or warranty of PublicCo shall become untrue, in either case such that the conditions set forth in Section6.2(a) or Section 6.2(b), as the case may be, would be incapable of being satisfied by May 1, 2003 (or as otherwise extended);
    3. by PublicCo, upon a breach of any representation, warranty, covenant obligation or agreement on the part of SUPREME as set forth in this Agreement, or if any representation or warranty of SUPREME shall become untrue, in either case such that the conditions set forth in Section 6.3(a) or Section 6.3(b), as the case maybe, would be incapable of being satisfied by May 1, 2003 (or as otherwise extended); or
    4. by either SUPREME or PublicCo, if any judgment, injunction, order, decree or action by any governmental entity of competent authority preventing the consummation of the Exchange shall have become final and non-appealable.

7.2 AMENDMENT. This Agreement may be amended by the parties in writing by action of the respective Board of Directors of Supreme and PublicCo at any time before or after any Shareholder Approvals are obtained and prior to the filing of the Articles of Exchange with the respective Secretaries of State of Illinois and Nevada.

7.3 EXTENSION; WAIVER. At any time prior to the Effective Date, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered pursuant to this Agreement or (c) waive compliance with any of the agreements or conditions of the other party contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.

 

ARTICLE 8. GENERAL PROVISIONS

8.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement confirming the representations and warranties in this Agreement shall survive the Effective Date. This Section 8.1 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Date.

8.2 NOTICES. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be delivered personally, sent by overnight courier (providing proof of delivery) to the


parties or sent by telecopy (providing confirmation of transmission) at the following addresses or telecopy numbers (or at such other address or telecopy number for a party as shall be specified by like notice):

If to Supreme:    
SUPREME PROPERTY, INC.
15 Iliad Drive
Tinley Park, IL 60477
Attn: Thomas Elliott, Esq.
(708) 429-3893
(708) 429-3897 fax
[email protected] e-mail
   
     
With copy to:    
ACTION STOCKS, INC.
990 Highland Drive  - Suite 106
Solana Beach, CA 92075
Attn: Brent Fouch
(858) 481-6670
(858) 481-6144 fax
[email protected] e-mail
   

If to PublicCo:    
CORONATION ACQUISITION CORP.
P.O. Box 741
Bellevue, WA 98009
Attn: Harry Miller
[email protected]
   
     
With copy to:    
Alixe Cormick
VENTURE LAW CORPORATION
Suite 618 - 688 West Hastings Street
Vancouver, British Columbia, V6B 1P1
Telephone: (604) 659-9188
Facsimile: (604) 659-9178
[email protected]
   

All notices shall be deemed given only when actually received.

8.3 INTERPRETATION. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include"," includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation."

8.4 COUNTERPARTS. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed beach of the parties and delivered to the other party.

8.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement, and the other agreements entered into in connection with the Exchange (a) constitute the entire agreement and supersede all prior agreements and understandings, both written and oral between the parties with respect to the subject matter of this Agreement and are not intended to confer upon any person other than the parties hereto any rights or remedies.


8.6 GOVERNING LAW. THE EXCHANGE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEVADA,REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF. EXCEPT AS PROVIDED IN THE IMMEDIATELY PRECEDING SENTENCE, THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,THE LAWS OF THE STATE OF ILLINOIS, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

8.7 ASSIGNMENT. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

8.8 ENFORCEMENT. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Its accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any federal court located in Illinois or in any state court located in Illinois this being in addition to another remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself (without making such submission exclusive) to the personal jurisdiction of any federal court located in Illinois or any state court located in Illinois in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement and (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court.

8.9 SEVERABILITY. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of


this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only as broad as is enforceable.

8.10 EXCULPATION. This Agreement shall not impose any personal liability on any shareholder, trustee, trust manager, officer, employee or agent of SUPREME or PublicCo, and all Persons shall look solely to the property of SUPREME or PublicCo for the payment of any claim hereunder or for the performance of this Agreement.

8.11 JOINT AND SEVERAL OBLIGATIONS. In each case where both PublicCo, on the one hand, or SUPREME on other hand, are obligated to perform the same obligation hereunder, such obligation shall be joint and several.

IN WITNESS WHEREOF, each of the corporate parties hereto, pursuant to authority duly granted by the Board of Directors, has caused the Agreement of Exchange to be executed by an authorized officer.

 

Date:

 
By:
/s/ Harry Miller
________________________________
    Harry Miller, President
CORONATION ACQUISITION CORP.
     
     
 
By:
/s/ Thomas Elliott
____________________________________
    Thomas Elliott, President
SUPREME PROPERTY, INC.
     
     


 

EXHIBIT A - NEVADA ARTICLES OF MERGER OR EXCHANGE

DEAN HELLER
Secretary of State

202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684 5708

Articles of Merger
(PURSUANT TO NRS
CHAPTER 92A)

    Office Use Only:

 

Important: Read attached instructions before completing form.

 

Articles of Merger
(Pursuant to Nevada Revised Statutes Chapter 92A)
(excluding 92A.200(4b))
- Remit in Duplicate -


Important: Read instructions before completing form
 


1) Name and jurisdiction of organization of each constituent entity (NRS 92A.200):

     Supreme Property Inc.                                                                                                        
Name of merging entity

   

   Illinois                                   
Jurisdiction

  Corporation                                         
 Entity type *
and,  

     Coronation Acquisition Corp.                                                                                               
Name of surviving entity

   Nevada                                
Jurisdiction

  Corporation                                        
 Entity type *   
   

2) Forwarding address where copies of process may be sent by the Secretary of State of
    Nevada (if a foreign entity is the survivor in the merger  - NRS 92A.190):

Attn:  Thomas Elliott                                                         

c/o:   Supreme Realty Investment Trust, Inc.                       

          P.O. Box 1164                                                       

         Tinley Park, IL  60477                                              
 

3) The undersigned declares that a plan of merger has been adopted by each constituent
    entity (NRS 92A.200).

 
* Corporation, non-profit corporation, limited partnership, limited-liability company or business trust.
 

 

DEAN HELLER
Secretary of State

202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684 5708

Articles of Merger
(PURSUANT TO NRS CHAPTER 92A)
Page 2

 

 

4) Owner's approval (NRS 92A.200)(options a, b, or c may be used for each entity):

(a) Owner's approval was not required from:

________________________________________________________________________
Name of merging entity, if applicable

and, or;

________________________________________________________________________
Name of surviving entity, if applicable
 

(b) The plan was approved by the required consent of the owners of *:

     Supreme Property Inc.                                                                                        
Name of merging entity, if applicable

and, or;

     Coronation Acquisition Corp.                                                                               
Name of surviving entity, if applicable

 

* Unless otherwise provided in the certificate of trust or governing instrument of a business trust, a merger must be
   approved by all the trustees and beneficial owners of each business trust that is a constituent entity in the merger.

 

 

DEAN HELLER
Secretary of State

202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684 5708

Articles of Merger
(PURSUANT TO NRS CHAPTER 92A)
Page 3

 

 

(c) Approval of plan of merger for Nevada non-profit corporation (NRS 92A.160):

The plan of merger has been approved by the directors of the corporation and by each
public officer or other person whose approval of the plan of merger is required by the
articles of incorporation of the domestic corporation.

________________________________________________________________________
Name of merging entity, if applicable

and, or;

________________________________________________________________________
Name of surviving entity, if applicable


 


 

DEAN HELLER
Secretary of State

202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684 5708

Articles of Merger
(PURSUANT TO NRS CHAPTER 92A)
Page 4

 

 

5) Amendments, if any, to the articles or certificate of the surviving entity. Provide
    article numbers, if available. (NRS 92A.200)*:

1. THE NAME OF THE CORPORATION SHALL BE CHANGED TO SUPREME REALTY       

INVESTMENT TRUST, INC.                                                                                               

2. AN ADDITIONAL CLASS OF SERIES A, PREFERRED STOCK SHALL BE AUTHORIZED.

3.  THE NUMBER OF AUTHORIZED SHARES OF SERIES A, PREFERRED STOCK SHALL

BE 100,000,000                                                                                                                

6) Location of Plan of Merger (check a or b):

_____ (a) The entire plan of merger is attached;

or,

  X   (b) The entire plan of merger is on file at the registered office of the surviving
               corporation, limited-liability company or business trust, or at the records office
               address if a limited partnership, or other place of business of the surviving entity
               (NRS 92A.200).

7) Effective date (optional)**: _______________________________

 

 

* Pursuant to NRS 92A.180 (merger of subsidiary into parent  - Nevada parent owning 90% or more of subsidiary),
   the articles of merger may not contain amendments to the constituent documents of the surviving entity except that
   the name of the surviving entity may be changed. Amended and restated articles may be attached as an exhibit or
   integrated into the articles of merger. A resolution specifying the new changes or a form prescribed by the
   secretary of state must accompany the amended and restated articles.

** A merger takes effect upon filing the articles of merger or upon a later date as specified in the articles, which
    must not be more than 90 days after the articles are filed (NRS 92A.240).


 

 

DEAN HELLER
Secretary of State

202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684 5708

Articles of Merger
(PURSUANT TO NRS CHAPTER 92A)
Page 5

 

8) Signatures  - Must be signed by:

An officer of each Nevada corporation; All general partners of each Nevada
limited partnership; A manager of each Nevada limited-liability company with
managers or all the members if there are no managers; A trustee of each Nevada
business trust (NRS 92A.230)*:

   SUPREME PROPERTY, INC.                                                                                   
Name of merging entity

                                                        PRESIDENT                                      /      /2003
Signature                                              Title                                             Date

   CORONATION ACQUISITION CORP.                                                                       
Name of
surviving entity

                                                        PRESIDENT                                      /      /2003
Signature                                             Title                                              Date

* The articles of merger must be signed by each foreign constituent entity in the manner provided by the law
   governing it (NRS 92A.230). Additional signature blocks may be added to this page or as an attachment, as needed.

Failure to include any of the above information and remit the proper fees may cause this filing to be rejected.

 

 

 


EXHIBIT B - ILLINOIS ARTICLES OF MERGER OR EXCHANGE

Form BCA-11.25
(Rev. Jan. 1999)

ARTICLES OF MERGER
CONSOLIDATION OR EXCHANGE

File #

Jesse White
Secretary of State
Department of Business Services
Springfield, IL 62756
Telephone (217) 782-6961
http://www.sos.state.il.us

 

SUBMIT IN DUPLICATE

This space for use by
Secretary of State

Date

Filing Fee $

Approved:

        DO NOT SEND CASH!
Remit payment in check or money
order, payable to "Secretary of State."
Filing Fee is $100, but if merger or
consolidation involves more than 2
corporations, $50 for each additional
corporation.



1. Names of the corporations proposing to merge, and the state or country of their incorporation:

 


Name of Corporation

 State or Country
of Incorporation

 Corporation
File Number


CORONATION ACQUISITION CORP.(1)

NEVADA

C34489-2000



SUPREME PROPERTY, INC. ILLINOIS D6204-748-8



     



     



Note:   (1) Coronation Acquisition Corp.'s name will change at the time of  the merger to "Supreme Realty Investment, Inc."

2. The laws of the state or country under which each corporation is incorporated permits such merger, consolidation
    or exchange.

3. (a) Name of the acquiring corporation:  Coronation Acquisition Corp. to be renamed Supreme Realty Investment Trust, Inc.

    (b) it shall be governed by the laws of:   Nevada                                                                                                           


If not sufficient space to cover this point, add one or more sheets of this size.
 

4. Plan of consolidation is as follows:

           SEE ATTACHED "TERMS OF THE TRANSACTION"


       
5. Plan of consolidation was approved, as to each corporation not organized in Illinois, incompliance with the laws of the
    exchange state under which it is organized, and (b) as to each Illinois corporation, as follows:

    (The following items are not applicable to mergers under S. 11.30 - 90% owned subsidiary provisions. See
    Article 7.)

    (Only "X" one box for each Illinois corporation)

       
Name of Corporation By the shareholders, a reso-lution of the board of direc-tors having been duly
adopted and submitted to a
vote at a meeting of share-holders. Not less than the minimum number of votes required by statute and by the articles of incorporation voted in favor of the action taken.
                           (S. 11.20)
 
By written consent of the
shareholders having not less
than the minimum number of
votes required by statute and
by the articles of incorpora-tion. Shareholders who have not consented in writing have been given notice in accor-dance with S. 7.10 (S. 11.220)
 
By written consent
of ALL the share-holders entitled to vote on the action, in accordance with S. 7.10 & S. 11.20
 




       
SUPREME PROPERTY INC.

     
 

     
 

     
 

     

6. (Not applicable if surviving, new or acquiring corporation is an Illinois corporation)

     It is agreed that, upon and after the issuance of a certificate of merger, consolidation or exchange by the Secretary of
     State of the State of Illinois:
a.   The surviving, new or acquiring corporation may be served with process in the State of Illinois in any
proceeding for the enforcement of any obligation of any corporation organized under the laws of the State of
Illinois which is a party to the merger, consolidation or exchange and in any proceeding for the enforcement
of the rights of a dissenting shareholder of any such corporation organized under the laws of the State of Illinois
against the surviving, new or acquiring corporation.
b.   The Secretary of State of the State of Illinois shall be and hereby is irrevocably appointed as the agent of the
surviving, new or acquiring corporation to accept service of process in any such proceedings, and
c.   The surviving, new, or acquiring corporation will promptly pay to the dissenting shareholders of any
corporation organized under the laws of the State of Illinois which is a party to the merger, consolidation or
exchange the amount, if any, to which they shall be entitled under the provisions of "The Business
Corporation Act of 1983" of the State of Illinois with respect to the rights of dissenting shareholders.
 

7. (Complete this item if reporting a merger under S. 11.30 - 90% owned subsidiary provisions.)
 

a.  

The number of outstanding shares of each class of each merging subsidiary corporation and the number of such
shares of each class owned immediately prior to the adoption of the plan of merger by the parent corporation, are:
 

Name of Corporation Total Number of Shares
Outstanding
of Each Class
Number of Shares of Each Class
Owned Immediately Prior to
Merger by the Parent Corporation
     



     



     
b.   (Not applicable to 100% owned subsidaries)
The date of mailing a copy of the plan of merger and notice of the right to dissent to the shareholders of each merging
subsidiary corporation was _____________________ , _________.
                                                             (Month & Day) (Year)

Was written consent for the merger or written waiver of the 30-day period by the holders of all the outstanding shares of all subsidiary corporations received? 
  Yes    No

(If the answer is "No," the duplicate copies of the Articles of Merger may not be delivered to the Secretary of State
until after 30 days following the mailing of a copy of the plan of merger and of the notice of the right to dissent to
the shareholders of each merging subsidiary corporation.)
 
8. The undersigned corporations have caused these articles to be signed by their duly authorized officers, each of whom
affirms, under penalties of perjury, that the facts stated herein are true. (All signatures must be in BLACK INK.)
   
Dated     June __________ , 2003   CORONATION ACQUISITION CORP.
 
 
  (Month & Day)       (Year)   (Exact Name of Corporation)
 
 
   
attested by                                                                      by                                                                                   
  (Signature of Secretary or Assistant Secretary)        (Signature of President or Vice-President)
  Harry Miller, Secretary   Harry Miller, President
 
 
  (Type or Print Name and Title)   (Type or Print Name and Title)
       
Dated     June __________ , 2003   SUPREME PROPERTY, INC.
 
 
  (Month & Day)       (Year)   (Exact Name of Corporation)
 
 
   
attested by                                                                      by                                                                                   
  (Signature of Secretary or Assistant Secretary)        (Signature of President or Vice-President)
  Thomas Elliott, Secretary   Thomas Elliott, President
 
 
  (Type or Print Name and Title)   (Type or Print Name and Title)
       

 


Terms of Transaction


In March, 2003, SUPREME PROPERTY, INC. entered into an Agreement and Plan of Exchange and Reorganization to become a wholly-owned subsidiary of SUPREME REALTY INVESTMENT TRUST, INC. (fka CORONATION ACQUISITION CORP.) in a stock-for-stock exchange and reorganization plan. In the transaction 19,342,000 (100%) of the issued and outstanding shares of common stock of SUPREME PROPERTY, INC. will be exchanged for approximately 27,000,000 shares of common stock of SUPREME REALTY INVESTMENT TRUST, INC. at an exchange ratio of 1.3953:1. The former stockholders of SUPREME PROPERTY, INC. will control 90% of the share capital of SUPREME REALTY INVESTMENT TRUST, INC. (fka CORONATION ACQUISITION CORP.) on close of the transaction.

The members of the board of directors of SUPREME PROPERTY, INC. will serve as the members of the board of directors of SUPREME REALTY INVESTMENT TRUST, INC. (fka CORONATION ACQUISITION CORP.) on close of the transaction.

The board of directors of both companies are proposing the Exchange and Reorganization Plan in order to provide: (i) a greater opportunity for growth through the issuance of additional equity; (ii) opportunities to increase earnings and cash distribution through asset growth and economies of scale; and (iii) a reduction in investment risk through greater diversification of assets.


EXHIBIT C  - ACTION STOCKS, INC. ENGAGEMENT LETTER

Supreme Property, Inc.

AGREEMENT FOR SERVICES

       WHEREAS Supreme Property, Inc. (the "Client"), desires to secure fully reporting status with the Securities and Exchange Commission of the United States and likewise secure public listing on OCT-BB;

        WHEREAS the Company proposes that Action Stocks, Inc. ("ACTION STOCKS INC.") coordinate the process via the performance of certain services to include corporate documentation and filing services for the Client in conjunction with public listing on OTC-BB and the development of a Registration Statement for the purposes of satisfying the Securities and Exchange Act(s) of 1933 and or 1934, as amended, (and other applicable rules and regulations of the Securities and Exchange Commission or State Securities Divisions (Blue Sky Laws) thereunder (collectively called the "Regulations"));

        WHEREAS ACTION STOCKS, INC. desires to perform such services for the Company;

        THEREFORE, the parties hereto mutually covenant and agree as follows.

1. Duties of ACTION STOCKS, INC.; ACTION STOCKS, INC. will cover all fees and for the provided services outlined below. These services include:

    (a) "Transfer Agent"  - assist the client in setting up account with proper transfer agent. Assist in consulting the client with the issuance of stock to shareholders.

    (b) "SEC Registration Statement"  - the coordination, compilation and/or filing of documentation requisite to SB-2 registration with the SEC in accordance with the provisions of the Act and likewise in accordance with the rules and regulations promulgated by the relevant State Blue Sky laws.

    (c) "SEC Comment Letter Support"  - answer and all comment letters from the SEC incident  to the filing of the Client's Registration Statement.

    (d) "Form 211 Development"  - the compilation and preparation of Form 211 in satisfaction of Rule 15(c)211 of the Exchange Act of 1934 to be filed with the NASD, by the appropriate licensed market maker of ACTION STOCKS, INC., as the original application for listing of the securities of the Client on the OTC-BB. Included under his subparagraph are the following documents and services:

        (1) Form 211 Disclosure Document;
        (2) Appropriate Exhibits;
        (3) Application and Coordination Work with a Transfer Agent; and
        (4) Financial Statements Audit Coordination.

    (e) "Market Maker Introduction"  - assist the Client with identifying appropriate and duly licensed level three market makers who may file the Client's Form 211 with the NASD for the listing of the Client's securities on the OTC-BB;

    (f) "NASD Comment Letter Support"  - assist the Client in answering any and all comment letters from the NASD incident to the filing of the Client's Form 211 as outlined above;

    (g) "Edgarization"  - ACTION STOCKS, INC. will set up and file appropriate forms with the client's Edgar Filer. ACTION STOCKS, INC. will cover all costs associated with SEC filings.

    (h) "Financing"  - Once publicly traded ACTION STOCKS, INC. will assist in raising additional financing. ACTION STOCKS, INC. is entitled to 10% of all monies raised by ACTION STOCKS, INC. for the Client.

    (i) "Market Support"  - Once publicly traded ACTION STOCKS, INC. will be engaged to provide their standard six month promotional campaign.

2.  Optional Services: Standard & Poor's  - Market Access Service"  - the preparation of the initial application and subsequent follow up (i.e point of contact) to have the Client listed with Standard & Poor's Corporation Records ("S&P") to enable the Client's shareholders to qualify for the Blue Sky Manual Exemption in up to thirty-eight states for all non-issuer transactions. ACTION STOCKS, INC. will also oversee the filing of such state non-issuer exemption notice filings upon listing in S&P.

3. Client to Provide Information: Client agrees to provide ACTION STOCKS, INC. with any information and documents as may be requested by ACTION STOCKS, INC. in connection with the services to be performed for Client. Client shall provide ACTION STOCKS, INC. with an overnight express or similar account number (FedEx, Airbourne Express, UPS, DHL, etc.) which will be used by ACTION STOCKS, INC. when sending any documentation related to Client's contract with ACTION STOCKS, INC. (see other expenses). Client shall be solely responsible for the accuracy of the information and representations contained in any documents to be prepared by ACTION STOCKS, INC. on behalf of Client. Any filings which receive "deficiency" or "comment" notices from a regulatory agency due to insufficient, incorrect or conflicting information or otherwise requiring further clarification, shall be forwarded to ACTION STOCKS, INC. and shall be addressed in conjunction with the additional information or assistance provided by the client. Additionally, all required documents, which includes audited financial statements of the Client, must be furnished to ACTION STOCKS, INC. by the Client in a timely fashion when required as a part of the services to be provided to the Client by ACTION STOCKS, INC. pursuant to the terms of this Agreement.

4. Compensation: Client shall provide $50,000 USD and 15% equity of common stock of the Client  - which shall be registered in the SB-2 filing  - as compensation to ACTION STOCKS, INC. for the services provided and described herein. ACTION STOCKS, INC.'s compensation shall consist of and be disbursed as follows:
 

  (A) Client disburses and ACTION STOCKS, INC. collects payments of $25,000 USD upon the execution of this Agreement;
  (B) Client disburses and ACTION STOCKS, INC. collects 15% equity of common stock of the Client  - which shall be registered in the S-2 filing:
  (C) Client disburses and ACTION STOCKS, INC. collects payments of an additional $25,000 USD upon the completion of SB-2 Registration but prior to submission of Form 211.
 
5. Timely review by client: The Client hereby acknowledges that part and parcel of the public listing process mandates a prudent and timely review of documentation on its part. The client warrants that it shall take reasonably steps necessary to expeditiously review and authorization any and all documentation submitted to it by ACTION STOCKS, INC. and ACTION STOCKS, INC. shall not responsible for any delays caused directly or indirectly by the client. Likewise, ACTION STOCKS, INC. is not responsible for any delays which may arise as a result of pendency before regulatory authorities including the SEC, the NASD, or State regulatory authorities. ACTION STOCKS, INC. assumes no responsibility for any occurrences beyond its control, including by not limited to federal or state filing backlogs or agency computer breakdowns, which may result in processing delays.

6. ACTION STOCKS, INC. will use its best efforts to secure registration for Client but cannot guarantee that any registration will be granted; however, in the event that the failure to obtain a registration is directly attributable to an error or oversight on the part of ACTION STOCKS, INC., ACTION STOCKS, INC. will use its best efforts to resolve the problem at no additional expense to Client. In no event will ACTION STOCKS, INC. be liable for actual, incidental, consequential, related or any other type of damages, in any amount, attributable to such error or oversight on the part of the Client.

7. Representations and Warranties of the Company. The Company represents and warrants to ACTION STOCKS, INC. that:
 

  (A) When any documentation pertaining to the Client Company is drafted and finalized, and at all times subsequent thereto up to and including the termination of this Agreement, the documentation and any amendments thereto will comply in all material respects with the provisions of the Act (and the Rules and Regulations) (as promulgated by state and/or federal regulatory authorities) and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and the documents supplied ACTION STOCKS, INC. by the Company  - and any supplements thereto will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
  (B) It is expressly understood and expected by both parties and expressly warranted by the Company that any documentation which preparation is facilitated by ACTION STOCKS, INC. or any documentation filed by ACTION STOCKS, INC. and referred to herein, shall be reviewed by the Company or its appointees of sufficient competence for any material deficiencies in such a manner as to ensure accuracy and full and fair disclosure. The Company warrants that is shall take prudent steps necessary to ensure that any such documentation contain no material misrepresentations or omissions and hereby acknowledges that ACTION STOCKS, INC is not responsible for ensuring the accuracy or sufficiency of any documentation or disclosures therein.

(C) The Securities of the Company conform  - in all material respects  - to the description thereof contained in the relevant documentation provided by the Client.
  (D) There is no material litigation or governmental proceeding pending, to which the Company (or any subsidiary) is a party or of which any of its property is the subject, and, to the best of the Company's knowledge, no such proceeding is threatened or contemplated. No contract or document of a character required to be described in any formal filing is not so described or filed as required.
  (E) This Agreement has been duly authorized, executed and delivered on behalf of the Company and is a valid and binding obligation of the Company, except as rights to indemnity and contribution hereunder may be limited under applicable law.
  (F) No stop order suspending the effectiveness of the efforts anticipated by this Agreement has been issued and no proceedings for that purpose have been taken or are pending or, to the knowledge of the Company, threatened by the Commission.

  (G) The Company has good and marketable title to all properties and assets described in the documentation as owned by it, free and clear of all security interests, liens, charges, encumbrances or restrictions, except such are described or referred to in the documentation or are not materially significant or important in relation to the business of the Company, and its subsidiaries, taken as a whole, except as described in the documentation.
  (H) Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless ACTION STOCKS, INC., its officers and directors, and each person, if any, who controls ACTION STOCKS, INC. within the meaning of either Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934, and any agents or employees of ACTION STOCKS, INC., from and against any and all losses, claims, damages and liabilities caused by any untrue statement or alleged untrue statement or a material fact contained in any formal filing or offering document or supplemental documentation caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or caused by virtue of any failure to comply with federal and/or state securities rules and regulations. Such indemnification includes any and all costs incident to such legal claims as may be made against ACTION STOCKS, INC. from any claim arising from the scope of the activities contemplated in this Agreement.
8. Independent Contractor Status: ACTION STOCKS, INC. shall perform its services under this contract as an independent contractor and not as an employee of Client or an affiliate thereof. It is expressly understood and agreed to by the parties hereto that ACTION STOCKS, INC. reserves the right to use any and all means of collection only by writing by Client.

9. Late Fees: Any ACTION STOCKS, INC. invoice not paid within thirty (30) days of such billing is subject to a 1.5% monthly interest charge. ACTION STOCKS, INC. reserves the right to use any and all means of collection available under applicable law to collect any amount past due.

10. Amendment and Modification: Subject to applicable law, this Agreement may be amended,  modified or supplemented only by a written agreement signed by both parties. No oral modifications to this Agreement may be made.

11. Entire Agreement: This Agreement contains the entire understanding between and among the parties and supersedes any prior understandings and agreements among them respecting the subject matter of this Agreement. The failure by ACTION STOCKS, INC. to insist on strict performance of any term or condition contained in this Agreement shall not be construed by Client as a waiver, at any time, or any rights, remedies or indemnifications, all of which shall remain in full force and effect from time of execution through eternity.

12. Binding Effect: This Agreement shall be binding upon the heirs, executors, administrators, successors and permitted assigns of the parties thereto. Client shall not assign its rights or delegate its duties under any term or condition set forth in this Agreement without the prior written consent of ACTION STOCKS, INC.

13. Attorney's Fees: In the event an arbitration, mediation, suit or action is brought by any party  under this Agreement to enforce any of its terms, or in any appeal therefrom, it is agreed that the prevailing party shall be entitled to reasonable attorneys fees to be fixed by the arbitrator, mediator, trial court and/or appellate court.

14. Severability: If any provisions of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid and unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in nature in its terms to such illegal, invalid or unenforceable provisions as may be legal, valid and enforceable.

15. Governing Law: This Agreement shall be governed by the laws of the State of California, and the venue for the resolution of any dispute arising thereof shall be in San Diego, State of California.

16. Legal Counsel: Client further agrees and understands that although documents and filings may be  compiled for filed by ACTION STOCKS, INC., ACTION STOCKS, INC. has not and does not render legal advise or offer legal assistance. All requests for legal advise by clients of ACTION STOCKS, INC. will be referred to appropriate legal counsel for the Client as retained by the client for a proper legal opinion. Accordingly, no statements or representations by ACTION STOCKS, INC. should be construed to be legal advise of counsel, and ACTION STOCKS, INC. advises Client to consult with its own legal counsel regarding the sufficiency of disclosures and/or compliance with applicable rules and regulations.

17. Broker-Dealer/Underwriter. Client acknowledges that ACTION STOCKS, INC. is not a broker-
dealer or underwriter and does not provide services directly or indirectly related to the offering, issuance or sale of securities. ACTION STOCKS, INC. pursuant to this Agreement, is charged with assisting the client in compiling requisite information and documentation in such a manner as to facilitate the services rendered by duly licensed broker dealers and/or competent legal counsel and to further assist the client in filing such documentation as necessary. Finally, ACTION STOCKS, INC. is responsible for coordinating the activities contemplated herein in an expeditious, efficient manner for the benefit of the client and its anticipated endeavors as outline herein. Any and all compensation rendered by ACTION STOCKS, INC. by virtue of its performance of services delineated in this Agreement is entirely independent of any securities related transaction(s) offerings, issuances, broker-dealer, or legal related services which other parties anticipated to be involved in the activities contemplated herein may engage. No commissions or transaction based compensation derived from the sale of securities is payable to ACTION STOCKS, INC.. No broker-dealer or underwriter related services are to be performed by ACTION STOCKS, INC. as such services are to be performed by the appropriate duly licensed brokerage firm engaged by the Client to perform such services.

18. Post-Registration Responsibilities: Client understands and acknowledges by the acceptance of this
Agreement that all post-registration periodic or special reports are the responsibility of the Client unless otherwise agreed to in writing by ACTION STOCKS, INC.

19. Effective Date of Agreement and Termination. This Agreement shall become effective upon
execution by both parties and shall terminate one hundred eighty (180) days from the effective date of this Agreement.


IN WITNESS THEREOF, the parties have caused this Agreement to be duly executed, as of the day and year set out below.
 

Supreme Property, Inc.

/s/ THOMAS ELLIOTT

 

 

 

04/22/2002

By: Thomas Elliott  

DATE


 

Action Stocks, Inc.

/s/ BRENT FOUCH

 

 

 

04/22/02

By: Brent Fouch

 

DATE








 





 

 

 


 

SCHEDULE 1  - PUBLICCO SEC DOCUMENTS

January 1, 2002  - March 31, 2003

Form

Description

Filing Date

File Number

10KSB Annual Report for period ended December 31, 2003. 2003-03-31

000-49770

10QSB Quarterly report for period ended September 30, 2002. 2002-11-14

000-49770

10QSB Quarterly report for period ended June 30, 2002. 2002-08-26

000-49770

10SB12G/A [Amend] 10SB Registration Statement [Section 12(g)] 2002-06-26

000-49770

10SB12G 10SB Registration Statement [Section 12(g)] 2002-04-30

000-49770



 

SCHEDULE 2  - PUBLICCO LIABILITIES AND OBLIGATIONS

 

Notes Payable. Includes $4,700 balance due for expenses advanced by Harry Miller, President of Coronation Acquisition Corp.


SCHEDULE 3  - PUBLICCO SHAREHOLDERS

Harry Miller

5,000,000

   
   

TOTAL

5,000,000



 



SCHEDULE 4  - SUPREME LIABILITIES AND OBLIGATIONS

Accounts Payable. Includes $5,064 balances due for office supplies, equipment rentals, other miscellaneous expenses, etc.

Notes Payable. Includes $15,600 balance due on Supreme Property, Inc.'s purchase of substantially all of the assets from its predecessor company, Supreme Property Management & Sales, Inc., and a $25,000 note due to Thomas Elliott, President of Supreme Property, Inc.

Mortgages Payable. Includes $1,255,000 due on four(4) parcels of property that are being purchase by Installment Agreement for Warranty Deed, over a term of thirty(30) years. The notes bear interest at the rate of 7% per annum. Principal and interest are payable in monthly installments of $8,349.55, with balloon payments of the outstanding principal on maturity dates in June, July, and August, of 2004.

Lease Obligations. In April, 2000 the Company began leasing office space at an annual rental rate based on the amount of square footage the Company occupies. The annual rent is as follows:

2000

$    4,950

2001

6,900

2002

7,200

2003

7,500

2004

1,950

TOTAL

   $   28,500

   

The lease expires in April, 2004, with a five year renewal option.

The Company is currently in negotiations with another office building leasing representative for 5,000 square feet of space in Tinley Park, Illinois. It is estimated that the annual rental rate will be priced between $14 - $18 per foot plus an allocation of common area expenses. To date, no lease agreement has been reached.

Employment Obligations. The Company has entered into automatically renewing, one-year employment agreements with its V.P. of Finance, V.P. of Property Management, and V.P. of Acquisitions. In the event of termination other than for cause, the contracted employee will receive a lump sum benefit equal to the average compensation in the three most highly compensated years. Upon termination, all options and rights to acquire common shares vest on the effective date of termination.


EXHIBIT 3.4 - ARTICLES OF SUPREME PROPERTY, INC. HTML

exhibit34.htm


EXHIBIT 3.4

Articles of Incorporation of Supreme Property, Inc.

Form BCA-2.10

ARTICLES OF INCORPORATION

 

     (Rev. Jan. 1999)
Jesse White
Secretary of State
Department of Business Services
Springfield, IL 62756
Telephone (217) 782-6961
http://www.sos.state.il.us

This space for use by Secretary of State

Filed 2/15/2002

Jesse White Secretary of State


 

      62047488                          [image bar code]
                                            
        CP0687789

SUBMIT IN DUPLICATE

This space for use by
Secretary of State

Date  Filed 2/15/2002

Franchise Tax $   25.00
Filing Fee       $   75.00

Approved: BE  $ 100.00

Payment must be made by certified check, cashier's check, Illinois attorney's check, Illinois C.P.A.'s check or money order, payable to "Secretary of State."


                                                                                        BE
1. CORPORATE NAME:    SUPREME PROPERTY, INC.                                                                              

                                                                                                                                                                  
 (The corporate name must contain the word "corporation", "incorporated", "limited" or an abbreviation thereof)
 

2. Initial Registered Agent:  THOMAS                                       C                                       ELLIOTT               
                                       First Name                            Middle Initial                                   Last name

Initial Registered Office:          431   E  75TH  STREET                                                                                   
                                        Number                                  Street                                               Suite #

                                        CHICAGO              IL             COOK                                                60619           
                                       City                                         County                                             Zip Code


3. Purpose or purposes for which the corporation is organized:
    (If not sufficient space to cover this point, add one or more sheets of this size.)

THE TRANSACTION OF ANY LAWFUL BUSINESS FOR WHICH CORPORATIONS MAY BE
INCORPORATED UNDER THE ILLINOIS CORPORATION ACT OF 1983.
                                                    BUSINESS
 


4. Paragraph 1: Authorized Shares, Issued Shares and Consideration Received:

 

Class Par Value
per Share
Number of Shares
      Authorized
Number of Shares
Proposed to be Issued
Consideration to be Received Therefor





Common $        0.01      1,000,000 100,000

  $          1,000






         





         





         





 

TOTAL =

  $         1,000

Paragraph 2: The preferences, qualifications, limitations, restrictions and special or relative rights in respect of the shares
of each class are:
(If not sufficient space to cover this point, add one or more sheets of this size.)

(over)
 


 
5. OPTIONAL (a)    Number of directors constituting the initial board of directors of the corporation _____________.
  (b)    Names and addresses of the persons who are to serve as directors until the first annual meeting of
shareholders or until their successors are elected and qualify:
    Name Residential Address City, State, ZIP
   


         
   


         
   


         
   



6. OPTIONAL (a)    It is estimated that the value of all property to be owned by the
corporation for the following year wherever located will be:
    
$__________________
  (b)    It is estimated that the value of the property to be located within
the State of Illinois during the following year will be:
    
$__________________
  (c)    It is estimated that the gross amount of business that will be
transacted by the corporation during the following year will be:
 
$__________________
   (d)    It is estimated that the gross amount of business that will be
transacted from places of business in the State of Illinois during
the following year will be:
 

$__________________

7.  OPTIONAL     OTHER PROVISIONS
                          Attach a separate sheet of this size for any other provision to be included in the Articles of
                          Incorporation, e.g., authorizing preemptive rights, denying cumulative voting, regulating internal
                          affairs, voting majority requirements, fixing a duration other than perpetual, etc.


8.                                                   NAME(S) & ADDRESS(ES) OF INCORPORATOR(S)

 
Dated     January 16,           2002    
 
   
  (Month & Day)       (Year)    
 


Signature and Name

 


Address

       
  1. /S/   THOMAS ELLIOTT   1.   431 E 75TH ST
 
 
  Signature   Street
  THOMAS ELLIOTT   CHICAGO, IL 60619
 
 
  (Type or Print Name)   City/Town                    State                     ZIP Code
       
  2.     2.  
 
 
  Signature   Street
       
 
 
  (Type or Print Name)   City/Town                    State                     ZIP Code
       
  3.     3.  
 
 
  Signature   Street
       
 
 
  (Type or Print Name)   City/Town                    State                     ZIP Code
 
(Signatures must be in BLACK INK on original document. Carbon copy, photocopy or rubber stamp signatures may only be
used on conformed copies.)
NOTE: If a corporation acts as incorporator, the name of the corporation and the state of incorporation shall be shown and the
execution shall be by its president or vice president and verified by him, and attested by its secretary or assistant secretary.

FEE SCHEDULE

  • The initial franchise tax is assessed at the rate of 15/100 of 1 percent ($1.50 per $1,000) on the paid-in capital
       represented in this state, with a minimum of $25.
  • The filing fee is $75.
  • The minimum total due (franchise tax + filing fee) is $100.
  • (Applies when the Consideration to be Received as set forth in Item 4 does not exceed $16,667)
  • The Department of Business Services in Springfield will provide assistance in calculating the total fees if necessary.
    Illinois Secretary of State Springfield, IL 62756
    Department of Business Services Telephone (217) 782-9522 or 782-9523                                                          C-162.20

EXHIBIT 3.5 - ARTICLES OF AMENDMENT OF SUPREME PROPERTY, INC. HTML

articlesofamendment_supreme.htm


EXHIBIT 3.5

Articles of Amendment of Supreme Property, Inc.

 

Form BCA-10.30

ARTICLES OF AMENDMENT


File # 6204-748-8

     (Rev. Jan. 1999)
Jesse White
Secretary of State
Department of Business Services
Springfield, IL 62756
Telephone (217) 782-6961
http://www.sos.state.il.us

FILED

APR 18 2002

JESSE WHITE
SECRETARY OF STATE

SUBMIT IN DUPLICATE

This space for use by
Secretary of State

Date  04-18-02

Franchise Tax $ 
Filing Fee       $   25.00
Penalty          $
Approved: z

Payment must be made by certified check, cashier's check, Illinois attorney's check, Illinois C.P.A.'s check or money order, payable to "Secretary of State."


                                                                                      
1. CORPORATE NAME:    SUPREME PROPERTY, INC.                                                                              
                                                                                                                                                (Note 1)

2. MANNER OF ADOPTION OF AMENDMENT
    The following amendment of the Articles of Incorporation was adopted on    April 1                                ,
 2002  
 in the manner indicated below. ("X" one box only)                        (Month & Day)
(Year)
  By a majority of the incorporators, provided no directors were named in the articles of incorporation and no directors
have been elected;
   

(Note 2)

  By a majority of the board of directors, in accordance with Section 10.10, the corporation having issued no shares
as of the time of adoption of this amendment;
   

(Note 2)

  By a majority of the board of directors, in accordance with Section 10.15, shares having been issued but shareholder
action not being required for the adoption of the amendment;
     
  By the shareholders, in accordance with Section 10.20, a resolution of the board of directors having been duly
adopted and submitted to the shareholders. At a meeting of shareholders, not less than the minimum number of
votes required by statute and by the articles of incorporation were voted in favor of the amendment;
     
  By the shareholders, in accordance with Sections 10.20 and 7.10, a resolution of the board of directors having been
duly adopted and submitted to the shareholders. A consent in writing has been signed by shareholders having not
less than the minimum number of votes required by statute and by the articles of incorporation. Shareholders who
have not consented in writing have been given notice in accordance with Section 7.10;
  By the shareholders, in accordance with Sections 10.20 and 7.10, a resolution of the board of directors having been
duly adopted and submitted to the shareholders. A consent in writing has been signed by all the shareholders
entitled to vote on this amendment.
     

3. TEXT OF AMENDMENT:

  a. When amendment effects a name change, insert the new corporate name below. Use Page 2 for all other
amendments.

Article I: The name of the corporation is:
   
__________________________________________________________________
   

All changes other than name, include on page 2
(over)



Text of Amendment

  b. (If amendment affects the corporate purpose, the amended purpose is required to be set forth in its entirety. If there
is not sufficient space to do so, add one or more sheets of this size.)
     
    THE NUMBER OF AUTHORIZED SHARES OF COMMON, NO PAR STOCK
SHALL BE INCREASED TO 100,000,000.
   


 

Page 2


     
4.   The manner, if not set forth in Article 3b, in which any exchange, reclassification or cancellation of issued shares,
or a reduction of the number of authorized shares of any class below the number of issued shares of that class,
provided for or effected by this amendment, is as follows: (If not applicable, insert "No change")
 
    No Change
     
5.   (a) The manner, if not set forth in Article 3b, in which said amendment effects a change in the amount of paid-in
capital (Paid-in capital replaces the terms Stated Capital and Paid-in Surplus and is equal to the total of these
accounts) is as follows: (If not applicable, insert "No change")
     
    No Change
     
    (b) The amount of paid-in capital (Paid-in Capital replaces the terms Stated Capital and Paid-in Surplus and is equal
to the total of these accounts) as changed by this amendment is as follows: (If not applicable, insert "No change")
     
    No Change
   

    

Before Amendment

After Amendment

   


Paid in Capital     


$ ______________


$ ______________

         

(Complete either Item 6 or 7 below. All signatures must be in BLACK INK.)

         
6.  

The undersigned corporation has caused this statement to be signed by its duly authorized officers, each of whom affirms, under penalties of perjury, that the facts stated herein are true.

     
Dated        
 
 
  (Month & Day)       (Year)  

(Exact Name of Corporation at date of execution)

 
 
   
attested by                                                                      by                                                                                   
 

(Signature of Secretary or Assistant Secretary)

       (Signature of President or Vice-President)
       
 
 
 

(Type or Print Name and Title)

 

(Type or Print Name and Title)

       
7. If amendment is authorized pursuant to Section 10.10 by the incorporators, the incorporators must sign below, and type
or print name and title.

                                                                                                        OR

If amendment is authorized by the directors pursuant to Section 10.10 and there are no officers, then a majority of the
directors or such directors as may be designated by the board, must sign below, and type or print name and title.

The undersigned affirms, under the penalties of perjury, that the facts stated herein are true.
Dated     April 4               , 2002    
 
   
  (Month & Day)       (Year)    
 
 
  /s/ Thomas Elliott    
 
 
  Thomas Elliott    
 
 
  INCORPORATOR    
 
 
       

Page 3



EXHIBIT 3.6 - BYLAWS OF SUPREME PROPERTY, INC. HTML

exhibit36_bylaws.htm


EXHIBIT 3.6

Bylaws of Supreme Property, Inc.

 

BYLAWS OF

OF

SUPREME PROPERTY, INC.

 

ARTICLE I OFFICES

The principal office of the corporation in the State of Illinois, is located at 431 E. 75th Street, in the City of Chicago, County of Cook. The corporation may office offices, within or without the State of Illinois, as Board of Directors may designate or as the business of the corporation may require.

The registered office of the corporation, required by the Illinois Business Corporation Act of 1983 to be maintained in the State of Illinois may be identical with the principal office in the State of Illinois. The address of the registered office may be changed by the Board of Directors.

ARTICILES II. SHAREHOLDERS

Section 1. Annual Meeting. The annual meeting of the shareholders shall be held on the 5th day of February each year, beginning with the year 2003 for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday, such meeting shall be held on the next succeeding business day.

Section 2. Special Meeting. Special meetings of the shareholders may be called either by the President, by the Board of Directors, or by the holders of not less than one-fifty of all the outstanding shares of the corporation, for the purpose or purposes stated in the call of the meeting.

Section 3. Place of Meeting. The Board of Directors may designate any place as the place of meeting of any annual meeting or for any special meeting called the by the Board of Directors. If no designation is made, or if a special meeting is otherwise called, the place of the meeting shall be at the principal place of business.

Section 4. Notice of Meetings. Written notice stating the place, date, and hour of the meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is held, shall be delivered not less than ten (10) nor more than forty (40) days before the date of the meeting, either personally or by mail, by or at the direction of the President, Secretary, or other officer or persons calling the meeting, to each shareholder or record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his address as it appears on the records of the corporation, with postage thereon prepaid. When a meeting is adjourned to another time and place, thereof shall be announced at the meeting at which the adjournment is taken.

Section 5. Fixing the Record Date. For the purpose of determining the shareholders entitled to notice of, or to vote at, any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend, or other distribution or allotment or any rights, or to exercise any rights with respect to any change, conversion, or exchange of shares, or for the purpose of any other lawful action, the Board of Directors may fix in advance a record date which shall not be more than sixty (60) days, and for a meeting of the shareholders, not less than ten (10) days, or in the case or a merger or consolidation not less than twenty (20) days before the date of such meeting. If no record date is fixed, the record date for the determination of shareholders entitled to notice of, or to vote at a meeting of shareholders shall be the date on which notice of the meeting is mailed, and the record date for the determination of shareholders for any other purpose shall be the date on which the Board of Directors adopts the resolution relating thereto. A determination of shareholders of record entitled to notice or, or to vote at a meeting of shareholders shall apply to any adjournment of the meeting.

Section 6. Voting Lists. The officer or agent having charge of the transfer books for the shares of the corporation shall make, at least ten (10) days before each meeting of the shareholders, a complete list of the shareholders entitled to vote at such meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of the shareholder. The list, for the period of ten days prior to such meeting, shall be kept on file at the registered office of the corporation and shall be open to inspection by any shareholder of any purpose germane to the meeting, at any time during normal business hours. Such list shall also be produced and kept open at the time and place of the meeting. The original share ledger or transfer book, or a duplicate thereof, kept in this State, shall be prima facie evidence as to who are the shareholders entitled to examine such list or share ledger or transfer book or to vote at any meeting of shareholders.

Section 7. Quorum. The holders of a majority of the outstanding shares of the corporation present in person or represented by proxy, shall constitute a quorum at any meeting of shareholders; provided that if less than a majority of the outstanding shares are represented at said meeting, a majority of the shares so represented may adjourn the meeting at any time without further notice. If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting shall be the act of the shareholders, unless the vote of the greater number of voting by class is required by The Business Corporation Act, the Articles of Incorporation, or these bylaws. At any adjourned meeting at which quorum shall be present, any business may be transacted which might have been transacted at the original meeting. Withdrawal of shareholders from any meeting shall not cause failure or a duly constituted quorum at that meeting.

Section 8. Proxies. Each shareholder entitled to vote at a meeting of shareholders or to express consent or dissent to corporate action in writing without a meeting, may authorize another person or persons to act for him by proxy, but no such proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. No proxy shall be valid if said another person is not a current shareholder of the corporation.

Section 9. Voting of Shares. Each outstanding share of common stock shall be entitled to one vote upon each submitted to vote at a meeting of shareholders. Non-voting preferred shareholders, if any, are not entitled to vote at a meeting of shareholders

Section 10. Informal Action by Shareholders. Any action required to be taken at a meeting of the shareholders, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof.

Section 11. Voting by Ballot. Voting on any question or in any election may be by voice unless the presiding officer shall order, or any shareholder shall demand that voting be by ballot.


ARTICLE III. DIRECTORS

Section 1. General Powers. The business of the corporation shall be managed by its Board of Directors.

Section 2. Number, Tenure, and Qualifications. The number of directors of the corporation shall be five (5). The directors shall hold office until the next annual meeting of the shareholders or until their successor shall have been elected and qualified. Directors need not be residents of Illinois nor shareholders of the corporation. The number of directors may be increased or decreased from time to time by amendment to this section, but not decrease shall have the effect or shortening the term of any incumbent director.

Section 3. Regular Meeting. A regular meeting of the Board of Directors shall be held without notice other than this bylaw, immediately after the annual meeting of the shareholders. This meeting may be waived only if, at any time, all shareholders also serve as directors. The Board of Directors may provide, by resolution, the time and place for the holding of additional regular meetings without other notice than such resolution.

Section 4. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the president or any other director. The person or persons authorized to call special meetings of the Board of Directors may fix any place as the place for holding any special meeting of the Board of Directors called by them.

Section 5. Notice. Notice of any special meeting shall be given at least five (5) days previous thereto by written notice to each director at his business address. If mailed, such notice shall be deemed delivered when deposited into the United States mail so addressed, with postage thereon prepaid. If notice is given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegram company. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither business to be transacted at, nor the purpose of any regular or special meeting of the Board of Directors need be specified in the notice of waiver of notice of such meeting.

Section 6. Quorum. A majority of the number of directors fixed by these bylaws shall constitute a quorum for transaction of business at any meeting of the Board of Directors. A majority of the directors present may adjourn the meeting at any time without further notice.

Section 7. Manner of Acting. The act of the majority of the directors present at a meeting for which a quorum is present shall be the act of the Board of Directors, unless the act of a greater number is required by statute, these bylaws, or the Articles of Incorporation.

Section 8. Vacancies. Any vacancy occurring in the Board of Directors and any directorship to be filled by reason of an increase in the number of directors, may be filled by election at an annual meeting or at a special meeting of the shareholders called for that purpose.

Section 9. Action Without a Meeting. Unless specifically prohibited by the Articles of Incorporation or bylaws, any action required to be taken at a meeting of the Board of Directors, or any other action which may be taken without a meeting if a consent in writing setting forth the actions so taken, shall be signed by all the directors entitled to vote with respect to the subject matter thereof, or by all members of such committee, as the case may be. Any such consent signed by all the directors of all the members of the committee, shall have the same effect as a unanimous vote, and may be stated as such in any document filed with the Secretary of State or with anyone else.

Section 10. Compensation. The Board of Directors, by the affirmative vote of a majority of directors then in office, and irrespective of any personal interest of any of its members, shall have authority to establish reasonable compensation of all directors for services to the corporation as directors, officers, or otherwise. By resolution of the Board of Directors the directors may be paid their expenses, if any, of attendance at each meeting of the board. No such payment previously mentioned in this section shall preclude any director from serving the corporation in any other capacity and receiving compensation therefrom.

Section 11. Presumption of Assent. A director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken, shall be conclusively presumed to have assented to the action taken, unless his dissent shall be entered in the minutes of the meeting, or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereto or shall forward such dissent by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.

ARTICLE IV. OFFICERS

Section 1. Number. The officers of the corporation shall be a president, a treasurer, a secretary, and such other officers as may be elected or appointed by the Board of Directors.

Section 2. Election and Term of Office. The officers of the corporation shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently possible. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officers shall hold office until his successor shall have been duly elected and shall have qualified, or until his death, or until he shall resign or shall have been removed in the manner hereinafter provided. Election of an officer shall not itself create contract rights.

Section 3. Removal. Any officers elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interest of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

Section 4. President. The president shall be the principal executive officer of the corporation. Subject to the direction and control of the Board of Directors, he shall be in charge of the business of the corporation; he shall see that the resolutions and directions of the Board of Directors are carried into effect, except in those instances in which that responsibility is specifically assigned to some other person by the Board of Directors; and in general, he shall discharge all duties incident to the office of the president and such other duties as may be prescribed by the Board from time to time. He shall preside at all meetings of the shareholders and of the Board of Directors. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the corporation, or a different mode of execution is expressly prescribed by the Board of Directors or these bylaws, he may execute for the corporation certificates for its shares, and any contracts, deeds, mortgages, bonds, or other instruments which the Board of Directors as authorized to be executed. He may accomplish such execution under or without the seal of the corporation and either individually or with the secretary, any assistant secretary, or any other officer thereunto authorized by the Board of Directors, according to the requirements of the from of the instrument. He may vote all securities which the corporation is entitled to vote except as, and the extent such authority shall be vested in a different officer or agent of the corporation by the Board of Directors.

Section 5. The Treasurer. The treasurer shall be the principal accounting and financial officer of the corporation. He shall: (a) have charge of and be responsible for the maintenance of adequate books of account for the corporation; (b) have charge and custody of all funds and securities of the corporation, and be responsible therefore and for the receipt and disbursement thereof; and (c) perform all the duties incident to the officer of treasurer and such other duties as from time to time may be assigned to him by the president or by the Board of Directors. If required by the Board of Directors, the treasurer shall give a bond for the faithful discharge of his duties in such sum and with such sureties as the Board of Directors may determine.

Section 6. Secretary. The secretary shall: (a) record the minutes of the shareholders' and the Board of Directors' meetings in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation; (d) keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder; (e) sign with the president, or any officer thereunto authorized by the Board of Directors, certificates for shares of the corporation , the issue of which shall have been authorized by the Board of Directors, any contracts, deeds, mortgages, bonds, or other instruments which to Board of Directors has authorized to be executed, according to the requirements of the form of the instrument, except when a different mode of execution is expressly prescribed by the Board of Directors or these bylaws; (f) have general charge of the stock transfer books of the corporation; (g) perform all duties incident to the office of the secretary and such other duties as from time to time may be assigned to him by the president or by the Board of Directors.

Section 7. Salaries. The salaries of the officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation.
 

ARTICLES V. CONTRACTS, LOANS, CHECKS, AND DEPOSITS

Section 1. Contracts. The Board of Directors may authorize any officer or officers, agents or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.

Section 2. Loans. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances.

Section 3. Checks, Drafts, etc. All checks drafts, or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.

Section 4. Deposits. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositaries as the Board of Directors may select.

ARTICLES VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER

Section 1. Certificates for Shares. Certificates representing shares of the corporation shall be signed by the president or by such officer as shall be designated by the resolution of the Board of Directors and by the secretary, and shall be sealed with the seal or a facsimile of the seal of the corporation. If both of the signatures of the officers be by facsimile, the certificate shall be manually signed by or on behalf of a duly authorized transfer agent or clerk. Each certificate representing shares shall be consecutively numbered or otherwise identified, and shall also state the name of the person to whom issued, the number and class of shares (with designation of series, if any), the date of issue, that the corporation is organized under Illinois law, and does issue shares of more than one class or series within a class, the certificate shall also contain such information or statement as may be required by law. The name and address of each shareholder, the number and class of shares held and the date on which the certificate for the shares were issued shall be entered on the books of the corporation. The person in whose name shares stand on the books of the corporation shall be deemed the owner thereof for all purposes as regards the corporation.

Section 2. Lost Certificates. If a certificate representing shares has allegedly been lost or destroyed, the Board of Directors may, it its discretion, except as may be required by law, direct that a new certificate by issued upon such indemnification and other reasonable requirements as it may impose.

Section 3. Transfer of Shares. Transfers of shares of the corporation shall be recorded on the books of the corporation and, except in the case of a lost or destroyed certificate, shall be made on surrender for cancellation of the certificate for such shares. A certificate presented for transfer must be duly endorsed and accomplished by proper guaranty of signature and other appropriate assurances that the endorsement is effective.

Section 4. Internal Revenue. The Common Stock of the corporation shall be issued pursuant to Section 1244 of the Internal Revenue Code of 1954 as amended.

ARTICLE VII FISCAL YEAR

The fiscal year of the corporation shall be fixed by resolution of the Board of Directors. However, in the absence of a resolution, the corporation shall operate on a calendar year.


ARTICLE VII. DIVIDENDS

The Board of Directors may from time to time declare, and the corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Articles of Incorporation.


ARTICLES IX. SEAL

The corporate seal shall have inscribed thereon the name of the corporation and words "Corporate Seal, Illinois". The seal may be used by causing it or a facsimile therefore to be impressed or affixed or in any manner reproduced.

ARTICLE X. WAIVER OF NOTICE

Whenever any notice is required to be given under the provisions of these bylaws or under the provisions of the Articles of Incorporation or under the provisions of The Business Corporation Act of the State of Illinois, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after time stated herein, shall be deemed equivalent to the giving of such notice.


ARTICLE XI. AMENDMENTS

The power to make, alter, amend, or repeal the by-laws of the corporation shall be vested in the Board of Directors, unless reserved to the shareholders by the Articles of Incorporation. The bylaws may contain any provisions for the regulations and management of the affairs of the corporation not inconsistent with law, or the Articles of Incorporation.


EXHIBIT 4.2 - ESCROW AGREEMENT HTML

escrow_agreement.htm


EXHIBIT 4.2

Escrow Agreement

ESCROW AGREEMENT

This ESCROW AGREEMENT, dated for reference as of March 31, 2003 (the "Agreement"), by and among Coronation Acquisition Corp., a Nevada corporation ("Coronation"), Supreme Property, Inc., a Illinois corporation ("Supreme"), and Interstate Transfer Company, as Escrow Agent (the "Escrow Agent").

W I T N E S S E T H:

WHEREAS, Coronation and Supreme have entered into an Agreement and Plan of Exchange and Reorganization, dated as of March 31, 2003 (the "Merger Agreement"), whereby Supreme will merge with and into Coronation on the terms and subject to the conditions set forth in the Merger Agreement (the "Merger");

WHEREAS, the Merger Agreement provides that each holder of Supreme Shares will, at the Effective Time, be entitled to receive, in exchange for its Supreme Shares, a number of Coronation Shares as determined in accordance with the Merger Agreement (the "Merger Consideration");

WHEREAS, the parties desire (i) that 75% of the Coronation Shares issued in the Merger, (the "Escrow Shares") be subject to the Escrow restrictions described herein (the "Escrow"), and, (ii) at the Effective Time, the Escrow Shares be deposited with the Escrow Agent subject to release in accordance with the terms hereof; and

WHEREAS, the Escrow Agent is willing to act as Escrow Agent, upon the express terms and subject to the express conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the parties hereby agree as follows:

1. DEFINED TERMS. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement.

2. APPOINTMENT OF ESCROW AGENT. Supreme and Coronation hereby appoint Interstate Transfer Company, of Salt Lake City, Utah, the Escrow Agent to act as agent on their behalf pursuant to this Agreement, and the Escrow Agent hereby consents to its appointment in such capacity on the terms and conditions of this Agreement.

3. DEPOSIT OF ESCROW SHARES. On the Closing Date, Coronation will deliver to the Escrow Agent (i) a list containing the name, address and number of Escrow Shares held by each Supreme Stockholder (the "Supreme Stockholder List"), (ii) certificates representing the Escrow Shares to be issued to each Supreme Stockholder ("Escrow Certificates"), and (iii) any and all other documents required from time to time by the Escrow Agent to effect transfers of the Escrow Shares in accordance herewith.

4. Release of Escrow Shares.

4.1 Authorized Disbursements. The Escrow Agent is hereby authorized to disburse the Escrow Shares only as follows:

(a) to the Supreme Stockholders in accordance with Section 4.2 of this Agreement;


(b) to the Supreme Stockholders upon receipt of a written instruction signed by Thomas Elliott and Mr. Harry Miller; or

(c) to the Supreme Stockholders in accordance with a final and binding judgment rendered by a court of competent jurisdiction and delivered to the Escrow Agent together with a certificate signed by Coronation (upon which certificate the Escrow Agent shall conclusively rely and act) certifying that said judgment represents a final adjudication by a court of competent jurisdiction.

4.2 Expiration of Escrow; Release of Escrow Shares. Unless released earlier pursuant to Section 4.1, the Escrow Agent shall release and deliver 1/3rd of the Escrow Shares to the Supreme Stockholders, upon Messrs. Elliott and Miller's written instructions, (in the denominations set forth in the Supreme Stockholder List) that Coronation has obtained $3,000,000 in new equity or debt funding. Thereafter the Escrow agent will release and deliver 1/3rd of the Escrow Shares to the Supreme Stockholders in three month increments following the first release of Escrow Shares without any further written notification from Messrs. Elliott or Miller.

5. Certain Rights of the Stockholders.

5.1 Distributions and Dividends. As of the Effective Time, each Supreme Stockholder that complies with the exchange procedures set forth in Section 1.10 of the Merger Agreement shall be entitled to receive directly from Coronation all cash dividends and other distributions paid or made with respect to the Escrow Shares.

6. Escrow Agent.

6.1 Duties of Escrow Agent. The Escrow Agent shall treat the Escrow Shares with such degree of care as it treats its own similar property. It is agreed that the duties of the Escrow Agent are only such as are herein specifically provided, and the Escrow Agent shall have no other duties, implied or otherwise. The Escrow Agent's duties are as a depository only, and the Escrow Agent shall incur no responsibility or liability whatsoever, except for its willful misconduct or gross negligence. Except where the terms of this Agreement expressly refer thereto, the Escrow Escrow Agent shall not be bound in any way by any of the terms of the Merger Agreement or any other agreement to which one or more of Coronation and Supreme are parties, whether or not the Escrow Agent has knowledge thereof, and the Escrow Agent shall not in any way be required to determine whether or not the Merger Agreement or any other agreement has been complied with by Coronation and Supreme or any other party thereto. In the event that the Escrow Agent

shall be uncertain as to any of its duties or rights hereunder or shall receive instructions, claims or demands which, in its sole judgment, are in conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action other than to keep safely all Escrow Shares held in escrow until it shall be directed otherwise pursuant to a written notice from and executed by Coronation, and the Escrow Agent shall not be responsible or liable for any damages while waiting for such written notice. This Agreement shall not create any fiduciary duty of the Escrow Agent to Coronation or any other person or entity whatsoever nor disqualify the Escrow Escrow Agent from representing any of such parties as transfer agent and/or registrar.

6.2 Reliance by Escrow Agent on Written Notices. The Escrow Agent may conclusively rely and shall be fully authorized and protected in relying upon any written notice, direction, instruction, demand, certificate, advice, opinion or document which it, in good faith, believes to be genuine. Set forth in Schedule 6.2 hereto is a list of the names of the persons authorized to act for Coronation and Harry Miller under this Agreement. The Escrow Agent may conclusively rely on and shall be authorized and fully protected in acting upon the written, facsimile or electronically delivered instructions of Coronation and Harry Miller.


6.3 Risk to Escrow Agent. In no event shall the Escrow Agent be liable (i) for any consequential, punitive or special damages or (ii) for an amount in excess of the value of the Escrow Shares, valued as of the date of deposit. The Escrow Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of the Escrow Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority, any act of God or war, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility).

6.4 No Investigation by Escrow Agent. The Escrow Agent shall not be required or bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, entitlement, order, approval or other paper or document.

6.5 Escrow Agent's Execution of Power. The Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians, or nominees appointed with due care, and shall not be responsible or liable for the acts or omissions of any agent, attorney, custodian or nominee so appointed except for acts that constitute willful misconduct or gross negligence.

6.6 Legal Proceedings.

(a) The Escrow Agent shall not be required to institute legal proceedings of any kind.

(b) If at any time the Escrow Agent is served with any judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process which in any way affects all or any portion of the Escrow Shares (including but not limited to orders of attachment or garnishment or other forms of levies or injunctions or stays relating to the transfer of all or any portion of the Escrow Shares), the Escrow Agent is authorized to comply therewith in any manner as it or legal counsel of its own choosing deems appropriate; and if the Escrow Agent complies in good faith with any such judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process, the Escrow Agent shall not be liable to any of the parties hereto or to any other person or entity even though such order, judgment, decree, writ or process may be subsequently modified or vacated or otherwise determined to have been without legal force or effect. The Escrow Agent shall provide Coronation with notice, in accordance with Section 7.3, of any such orders, judgments, decrees or writs (along with copies of any related documentation), and the Escrow Agent shall reasonably consult with Coronation and Supreme and its counsel with respect to such legal actions.

6.7 Escrow Agent Reporting. Notwithstanding anything to the contrary herein, except as required by law, in no event shall the Escrow Agent be under a duty to file any reports or withhold or deduct any amounts in respect of taxes due for payments made pursuant to this Agreement.

6.8 Fees of the Escrow Agent. Coronation covenants and agrees to pay to the Escrow Agent from time to time, and the Escrow Agent shall be entitled to, the fees and expenses agreed to in writing between Coronation and the Escrow Agent (which at the date hereof are set forth in Schedule 6.8 hereto) and will further pay or reimburse the Escrow Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Escrow Agent in accordance with any of the provisions hereof or any other documents executed in connection herewith (including the reasonable compensation and the reasonable expenses and disbursements of its counsel and of all persons not regularly in its employ), which related expenses, disbursements and advances shall be paid by the requesting party, as set forth therein. The obligations of Coronation under this Section 6.8 to compensate the Escrow Agent and to pay or reimburse the Escrow Agent for reasonable expenses, disbursements and advances shall survive the satisfaction and discharge of this Agreement or the earlier resignation or removal of the Escrow Agent.


6.9 Indemnification of the Escrow Agent. Coronation agrees to indemnify and hold the Escrow Agent and its directors, employees, officers, agents, successors and assigns harmless from and against any and all losses, claims, damages, liabilities and expenses, including, without limitation, reasonable costs of investigation and reasonable counsel fees and expenses which may be imposed on the Escrow Agent or incurred by it in connection with its acceptance of this appointment as the Escrow Agent hereunder or the performance of its duties hereunder, except as a result of the Escrow Agent's gross negligence or willful misconduct. Such indemnity includes, without limitation, all losses, damages, liabilities and expenses (including reasonable counsel fees and expenses) incurred in connection with any litigation (whether at the trial or appellate levels) arising from this Agreement or involving the subject matter hereof. The indemnification provisions contained in this Section 6.9 are in addition to any other rights any of the indemnified parties may have by law or otherwise and shall survive the termination of this Agreement or the resignation or removal of the Escrow Agent.

6.10 Successor to Escrow Agent. Any corporation or other entity whatsoever into which the Escrow Agent may be merged or converted or with which it may be consolidated, and any corporation or other entity whatsoever resulting from any merger, conversion or consolidation to which the Escrow Agent shall be a party or any corporation or other entity whatsoever succeeding to the business of the Escrow Agent shall be the successor of the Escrow Agent hereunder without the execution or filing of any paper with any party hereto except where an instrument of transfer or assignment is required by law to effect such succession.

6.11 Resignation of Escrow Agent. If the Escrow Agent at any time, in its sole discretion, deems it necessary or advisable to resign as the Escrow Agent hereunder, it may do so by giving prior written notice of such event to Coronation, Supreme and Harry Miller and thereafter delivering the Escrow Shares to any other agent designated by Coronation and Harry Miller as communicated to the Escrow Agent in writing, and if no such agent shall be designated by Coronation and Harry Miller within 60 calendar days of such written notice, then the Escrow Agent may do so by delivering the Escrow Shares either (a) to any bank or trust located in the State of Nevada which is willing to act as Escrow Agent hereunder in its place (provided that the fees charged by such bank or trust company are not in excess of the fees charged by the Escrow Agent for its services hereunder) or (b) if no such bank or trust company can be retained within a reasonable period after such 60 calendar day period after the delivery by the Escrow Agent of its written notice, then the Escrow Agent shall seek the appointment of its successor as prescribed by the clerk or other proper officer of a court of competent jurisdiction located within the State of Nevada to the extent permitted by law (any such successor to the Escrow Agent, whether designated by Coronation and Harry Miller or pursuant to the clause above or otherwise, is hereinafter referred to as the "Successor Agent"). The costs and expenses (including reasonable attorneys' fees and expenses) incurred by the Escrow Agent in connection with such proceeding for the appointment of a Successor Agent shall be paid by Coronation. Coronation and Harry Miller may, at any time after the date hereof, upon 30 calendar days prior written notice to the Escrow Agent, appoint a Successor Agent for the resignation or removal of the Escrow Agent, whereupon the Escrow Agent shall deliver the Escrow Shares to such Successor Agent, as provided below. The reasonable fees of any Successor Agent shall be borne by Coronation. Upon receipt of the identity of the Successor Agent, the Escrow Agent shall deliver the Escrow Shares then held hereunder to the Successor Agent. Upon delivery of the Escrow Shares to the Successor Agent, (i) the Escrow Agent shall be discharged from any and all responsibility or liability with respect to the Escrow Shares (except as otherwise provided herein) and (ii) all references herein to the "Escrow Agent" shall, where applicable, be deemed to include such Successor Agent and such Successor Agent shall thereafter become the Escrow Agent for all purposes of this Agreement.


7. Miscellaneous.

7.1 Construction; Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Article, section, schedule, exhibit, recital and party references are to this Agreement unless otherwise stated. No party, nor its counsel, shall be deemed the drafter of this Agreement for purposes of construing the provisions of this Agreement, and all provisions of this Agreement shall be construed in accordance with their fair meaning, and not strictly for or against any party.

7.2 Amendments and Modifications. No party hereto shall be bound by any modification, amendment, termination, cancellation, rescission or supersession of this Agreement unless the same shall be in writing and signed by it.

7.3 Notices. All notices and other communications hereunder shall be in writing and shall be effective when actually received by the party to which notice is sent as follows:

 
  (a) If to Coronation, to: With copies to:
(which shall not constitute notice)
       
    Thomas Elliott, President
Supreme Realty Investment Trust, Inc.
(the post merger name of Coronation)
431 E. 75th Street
Chicago, IL 60619
(773)873-9850
Harry Miller
P.O. Box 741
Bellevue, Washington, 98009
(425)453-0355
       
  (c) If to the Escrow Agent, to:  
       
    6084 South 900 East, Suite 101
Salt Lake City, UT 84121
(801) 281-9746
 

or to such other address as the person to whom notice is being given may have previously furnished to the other parties in writing in the manner set forth above.

7.4 Assignment. Subject to Sections 6.10 and 6.11, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party (whether by operation of law or otherwise) without the prior written consent of Coronation, Supreme and the Escrow Agent; provided that Coronation may assign its rights and obligations to any affiliate, but no such assignment shall relieve such Coronation of its obligations hereunder. This Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.


7.5 Termination of Agreement. This Agreement shall terminate when all of the Escrow Shares have been delivered according to the terms of this Agreement.

7.6 Representation. Each of the parties hereby represents and warrants that this Agreement has been duly authorized, executed and delivered on its behalf and constitutes its legal, valid and binding obligation.

7.7 Other Miscellaneous Provisions.

(a) This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(b) Whenever under the terms hereof the time for giving a notice or performing an act falls upon a Saturday, Sunday, or banking holiday, such time shall be extended to the next day on which Escrow Agent is open for business.

(c) Each party agrees that any suit, action or proceeding with respect to this Agreement, and the performance of the parties hereunder shall only be brought in the courts of the State of Nevada, including any federal court located within the State of Nevada. Accordingly, each party submits irrevocably to the exclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding and waives irrevocably any right which it may have to bring any such suit, action or proceeding in any forum other than a court of the State of Nevada, or in any federal court located within the State of Nevada, and any defense which it may have to the enforcement of this provision, whether based on the inconvenience of the forum or otherwise.

(d) The Escrow Agent does not have any interest in the Escrow Shares deposited hereunder but is serving as escrow holder only. Coronation agrees to pay or reimburse the Escrow Agent upon request for any transfer taxes or other taxes relating to the Escrow Shares incurred in connection herewith and shall indemnify and hold harmless the Escrow Agent for any amounts that it is obligated to pay in the way of such taxes. Any payments of income in respect of the

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK -
THE NEXT PAGE IS THE SIGNATURE PAGE]


Escrow Shares shall be subject to withholding regulations then in force with respect to United States taxes. The parties hereto will provide the Escrow Agent with appropriate forms for tax I.D. number certifications.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first above written.

SUPREME PROPERTY, INC.

 

 

By: ____________________
Name: Thomas Elliott
Title: President and CEO

CORONATION ACQUISITION CORP.

 

 

By: ____________________
Name: Harry Miller
Title: President and CEO
 

ESCROW AGENT:

Interstate Transfer Company as Escrow Agent

 

By: _____________________________
Name: Janis Patterson
Title: President

 

 

 

 


EXHIBIT 4.3 - ILLINOIS DISSENTER'S RIGHTS HTML

exhibit43_dissentersrights.htm


EXHIBIT 4.3

Illinois Dissenters' Rights Law

Under The Illinois Business Corporation Act Of 1983

5.11.65.     RIGHT TO DISSENT

      SECTION 11.65.     Right to Dissent. (a) A shareholder of a corporation is entitled to dissent from, and obtain payment for his or her shares in the event of any of the following corporate actions:

 (1)  consummation of a plan of merger or consolidation or a plan of share exchange to which the corporation is a party if: (i) shareholder authorization is required for the merger or consolidation or the share exchange by Section 11.20 or the articles of incorporation or (ii) the corporation is a subsidiary that is merged with its parent or another subsidiary under Section 11.30;
   
 (2)  consummation of a sale, lease or exchange of all, or substantially all, of the property and assets of the corporation other than in the usual and regular course of business;
   
 (3)  an amendment of the articles of incorporation that materially and adversely affects rights in respect of a dissenter's shares because it: (i) alters or abolishes a preferential right of such shares; (ii) alters or abolishes a right in respect of redemption, including a provision respecting a sinking fund for the redemption or repurchase, of such shares; (iii) in the case of a corporation incorporated prior to January 1, 1982, limits or eliminates cumulative voting rights with respect to such shares; or
   
 (4)  any other corporate action taken pursuant to a shareholder vote if the articles of incorporation, by-laws, or a resolution of the board of directors provide that shareholders are entitled to dissent and obtain payment for their shares in accordance with the procedures set forth in Section 11.70 or as may be otherwise provided in the articles, by-laws or resolution.

      (b) A shareholder entitled to dissent and obtain payment for his or her shares under this Section may not challenge the corporate action creating his or her entitlement unless the action is fraudulent with respect to the shareholder or the corporation or constitutes a breach of a fiduciary duty owed to the shareholder.

      (c) A record owner of shares may assert dissenters' rights as to fewer than all the shares recorded in such person's name only if such person dissents with respect to all shares beneficially owned by any one person and notifies the corporation in writing of the name and address of each person on whose behalf the record owner asserts dissenters' rights. The rights of a partial dissenter are determined as if the shares as to which dissent is made and the other shares were recorded in the names of different shareholders. A beneficial owner of shares who is not the record owner may assert dissenters' rights as to shares held on such person's behalf only if the beneficial owner submits to the corporation the record owner's written consent to the dissent before or at the same time the beneficial owner asserts dissenters' rights.

5.11.70.     PROCEDURE TO DISSENT

      SECTION 11.70.     Procedure to Dissent. (a) If the corporate action giving rise to the right to dissent is to be approved at a meeting of shareholders, the notice of meeting shall inform the shareholders of their right to dissent and the procedure to dissent. If, prior to the meeting, the corporation furnishes to the shareholders material information with respect to the transaction that will objectively enable a shareholder to vote on the transaction and to determine whether or not to exercise dissenters' rights, a shareholder may assert dissenters' rights only if the shareholder delivers to the corporation before the vote is taken a written demand for payment for his or her shares if the proposed action is consummated, and the shareholder does not vote in favor of the proposed action.

      (b) If the corporate action giving rise to the right to dissent is not to be approved at a meeting of shareholders, the notice to shareholders describing the action taken under Section 11.30 or Section 7.10 shall inform the shareholders of their right to dissent and the procedure to dissent. If, prior to or concurrently with the notice, the corporation furnishes to the shareholders material information with respect to the transaction that will objectively enable a shareholder to determine whether or not to exercise dissenters' rights, a shareholder may assert dissenter's rights only if he or she delivers to the corporation within 30 days from the date of mailing the notice a written demand for payment for his or her shares.

      (c) Within 10 days after the date on which the corporate action giving rise to the right to dissent is effective or 30 days after the shareholder delivers to the corporation the written demand for payment, whichever is later, the corporation shall send each shareholder who has delivered a written demand for payment a statement setting forth the opinion of the corporation as to the estimated fair value of the shares, the corporation's latest balance sheet as of the end of a fiscal year ending not earlier than 16 months before the delivery of the statement, together with the statement of income for that year and the latest available interim financial statements, and either a commitment to pay for the shares of the dissenting shareholder at the estimated fair value thereof upon transmittal to the corporation of the certificate or certificates, or other evidence of ownership, with respect to the shares, or instructions to the dissenting shareholder to sell his or her shares within 10 days after delivery of the corporation's statement to the shareholder. The corporation may instruct the shareholder to sell only if there is a public market for the shares at which the shares may be readily sold. If the shareholder does not sell within that 10 day period after being so instructed by the corporation, for purposes of this Section the shareholder shall be deemed to have sold his or her shares at the average closing price of the shares, if listed on a national exchange, or the average of the bid and asked price with respect to the shares quoted by a principal market maker, if not listed on a national exchange, during that 10 day period.

      (d) A shareholder who makes written demand for payment under this Section retains all other rights of a shareholder until those rights are cancelled or modified by the consummation of the proposed corporate action. Upon consummation of that action, the corporation shall pay to each dissenter who transmits to the corporation the certificate or other evidence of ownership of the shares the amount the corporation estimates to be the fair value of the shares, plus accrued interest, accompanied by a written explanation of how the interest was calculated.

      (e) If the shareholder does not agree with the opinion of the corporation as to the estimated fair value of the shares or the amount of interest due, the shareholder, within 30 days from the delivery of the corporation's statement of value, shall notify the corporation in writing of the shareholder's estimated fair value and amount of interest due and demand payment for the difference between the shareholder's estimate of fair value and interest due and the amount of the payment by the corporation or the proceeds of sale by the shareholder, whichever is applicable because of the procedure for which the corporation opted pursuant to subsection (c).

      (f) If, within 60 days from delivery to the corporation of the shareholder notification of estimate of fair value of the shares and interest due, the corporation and the dissenting shareholder have not agreed in writing upon the fair value of the shares and interest due, the corporation shall either pay the difference in value demanded by the shareholder, with interest, or file a petition in the circuit court of the county in which either the registered office or the principal office of the corporation is located, requesting the court to determine the fair value of the shares and interest due. The corporation shall make all dissenters, whether or not residents of this State, whose demands remain unsettled parties to the proceeding as an action against their shares and all parties shall be served with a copy of the petition. Nonresidents may be served by registered or certified mail or by publication as provided by law. Failure of the corporation to commence an action pursuant to this Section shall not limit or affect the right of the dissenting shareholders to otherwise commence an action as permitted by law.

      (g) The jurisdiction of the court in which the proceeding is commenced under subsection (f) by a corporation is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value. The appraisers have the power described in the order appointing them, or in any amendment to it.

      (h) Each dissenter made a party to the proceeding is entitled to judgment for the amount, if any, by which the court finds that the fair value of his or her shares, plus interest, exceeds the amount paid by the corporation or the proceeds of sale by the shareholder, whichever amount is applicable.

      (i) The court, in a proceeding commenced under subsection (f), shall determine all costs of the proceeding, including the reasonable compensation and expenses of the appraisers, if any, appointed by the court under subsection (g), but shall exclude the fees and expenses of counsel and experts for the respective parties. If the fair value of the shares as determined by the court materially exceeds the amount which the corporation estimated to be the fair value of the shares or if no estimate was made in accordance with subsection (c), then all or any part of the costs may be assessed against the corporation. If the amount which any dissenter estimated to be the fair value of the shares materially exceeds the fair value of the shares as determined by the court, then all or any part of the costs may be assessed against that dissenter. The court may also assess the fees and expenses of counsel and experts for the respective parties, in amounts the court finds equitable, as follows:

 (1)  Against the corporation and in favor of any or all dissenters if the court finds that the corporation did not substantially comply with the requirements of subsections (a), (b), (c), (d), or (f).
   
(2)  Against either the corporation or a dissenter and in favor of any other party if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this Section.

If the court finds that the services of counsel for any dissenter were of substantial benefit to other dissenters similarly situated and that the fees for those services should not be assessed against the corporation, the court may award to that counsel reasonable fees to be paid out of the amounts awarded to the dissenters who are benefited. Except as otherwise provided in this Section, the practice, procedure, judgment and costs shall be governed by the Code of Civil Procedure.

      (j) As used in this Section:

 (1)  "Fair value", with respect to a dissenter's shares, means the value of the shares immediately before the consummation of the corporate action to which the dissenter objects excluding any appreciation or depreciation in anticipation of the corporate action, unless exclusion would be inequitable.
   
 (2)  "Interest" means interest from the effective date of the corporate action until the date of payment, at the average rate currently paid by the corporation on its principal bank loans or, if none, at a rate that is fair and equitable under all the circumstances.

EXHIBIT 13.3 - AUDITED FINANCIAL STATEMENTS OF SUPREME PROPERTY, INC. DECEMBER 31, 2002 HTML

supremefinancials.htm


EXHIBIT 13.3

Audited Financial Statements of Supreme Property, Inc. for year ended December 31, 2002

Richard Walker and Co.                                                                                           433 East 75th Street
C
ertified Public Accountant                                                                                             Chicago, Illinois 60619
Member - Illinois CPA Society                                                                   (773) 846-6690 / Fax (773) 846-6688

 
 

 

Supreme Property, Inc.
431 E. 75th Street
Chicago, Illinois 60619

We have audited the accompanying financial statements of Supreme Property, Inc. (an Illinois corporation), as of December 31, 2002. The accompanying financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audit.

We conducted our audit in accordance with auditing standards accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also included assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Supreme Property, Inc. as of December 31, 2002 in conformity with accounting principles generally accepted in the United States of America.




Richard Walker
 
Richard Walker & Co.
March 15, 2003


 

 

 

 



 

SUPREME PROPERTY, INC.

Consolidated Statement of Financial Position

As of December, 2002

 

2000

2001

2002

ASSETS:  

Audited

Audited

     Current Assets:      
          Cash & Cash Equivalents

25,000

$              730

$             2,000

          Marketable Securities

-

-

-

          Accounts Receivable

-

57,277

-

          Prepaid Expenses

-

734

-

Total Current Assets

25,000

58,011

2,000

     Loans & Securities Investments:      
          Investments in Partnerships

-

-

-

          Real Estate Loans

-

-

-

          Real Estate Loans held for Sale

-

-

-

          Investments in Affiliates

-

-

100,000

Total Loans & Securities Investments

-0-

-0-

100,000

     Real Estate Investments:      
          Existing Properties

-

-0-

425,700

          New Property Acquisitions

-

425,700

1,540,300

          Gross Properties  

425,700

1,966,000

          Less: Accumulated Deprec.

-

(4,174)

(18,485)

          Land & Other Non-Depreciable Property

-

-

-

Total Real Estate Investments

-0-

421,526

1,947,515

 

 

 

 

Total Investments before Loss Reserves

-0-

421,526

2,047,515

          Less: Loan Loss Reserves

 

-0-

-0-

Total Investments

-0-

421,526

2,047,515

     Other Assets:      
           Goodwill and Other Intangible Assets

30,000

30,000

30,000

           Less: Amortization

-0-

(6,000)

(12,000)

          Furniture/Fixtures/Equipment

6,000

9,140

11,140

          Less: Accumulated Deprec.

-0-

(1,306)

(1,706)

Total Other Assets

36,000

31,834

27,434

       

TOTAL ASSETS

61,000

512,101

2,076,949

LIABILITIES:      
     Current Liabilities

-

16,044

5,064

     Notes Payable

36,000

50,000

40,600

     Mortgages Payable

-

288,900

1,255,000

Total Liabilities

36,000

354,944

1,300,664

SHAREHOLDER'S EQUITY:      
          Common Stock, $.001 par value
          100,000,000 auth., 19,342,000 outstanding

10,000

10,000

19,342

          Preferred Stock, 6.95% Series A, Convertible

-0-

-0-

-0-

          Additional Paid In Capital

15,000

142,669

722,897

          Retained Earnings (Deficit)

-0-

4,488

34,046

Total Shareholder Equity

25,000

157,157

776,285

       

TOTAL LIABILITIES & EQUITY

61,000

$ 512,101

$ 2,076,949

The accompanying notes are an integral part of these financial statements.


 

SUPREME PROPERTY, INC.

Statement of Earnings

For the years ending December 31, 2002

 

2001

2002

   

Audited

 

Audited

REVENUES:        
     Rental Income  

-0-

 

$                 174,864

     Mortgage Interest Income  

-0-

 

-0-

     Investment Income  

-0-

 

-0-

     Fee Income  

166,748

 

84,835

     Gain on Sale of Loans

 

-0-

 

-0-

TOTAL REVENUES

 

166,748

 

259,699

         
EXPENSES:        
     Salaries, Commissions, and Employee Benefits  

80,617

 

49,553

     General & Administrative  

34,969

 

26,958

     Property Operating Expenses  

-0-

 

79,805

     Interest Expense  

34,402

 

43,723

     Depreciation and Amortization  

11,480

 

24,885

                    TOTAL EXPENSES  

161,468

 

224,924

         

NET INCOME (LOSS) Before Taxes and Extraordinary Items

 

5,280

 

34,775

Provision for Income Taxes

 

(792)

 

(5,216)

Extraordinary Gains (Losses)

 

-0-

 

-0-

NET INCOME

 

4,488

 

29,558

Add: Depreciation and Amortization

 

11,480

 

24,885

         

FUNDS FROM OPERATIONS (FFO)

 

15,968

 

$                54,444


Per Share Data -Basic

Weighted Average Common Shares Outstanding

 

10,000,000

 

19,342,000

         

NET INCOME (LOSS) Before Taxes and Extraordinary Items

 

$ 0.0005

 

$ 0.0019

         

NET INCOME

  0.0004  

0.0016

         

FUNDS FROM OPERATIONS (FFO)

 

$ 0.0009

 

$ 0.0028


Per Share Data -Diluted

Weighted Average Common Shares Outstanding

 

10,000,000

 

19,342,000

         
NET INCOME(LOSS) Before Extraordinary Items  

$ 0.0005

 

$ 0.0019

Extraordinary Gains (Losses)

       

NET INCOME

 

0.0004

 

0.0016

         

FUNDS FROM OPERATIONS (FFO)

 

$ 0.0016

 

$ 0.0028

The accompanying notes are an integral part of these financial statements.



 

SUPREME PROPERTY, INC.

Statement of Cash Flows

For the years ending December 31, 2002

 

2001

2002

   

Audited

 

Audited

CASH FLOW FROM OPERATING ACTIVITIES:        
     Net Income  

4,488

 

29,558

     Adjustments to reconcile net income to net cash provided by
     operating activities:
       
          Depreciation & Amortization  

11,480

 

26,191

          (Increase) Decrease in Receivables  

(57,277)

 

57,277

          (Increase) Decrease in Prepaid Expenses  

(734)

 

734

          Increase ( Decrease) in Current Liabilities  

16,044

 

(10,980)

NET CASH FROM OPERATING ACTIVITIES

 

(25,999)

 

102,780

CASH FLOW FROM INVESTING ACTIVITIES:        
     Purchase of Furniture/Fixtures/Equipment  

(3,140)

 

(2,000)

     Purchase of Real Estate Improvements  

(425,700)

 

(1,114,600)

     Purchase of Land  

-

 

-

     Investments in Partnerships  

-

 

-

     Purchase of Real Estate Loans  

-

 

-

     Real Estate Loans Originated  

-

 

-

     Investment in Affiliates  

-

 

(100,000)

     Proceeds from the Sale of:        
          Furniture/Fixtures/Equipment  

-

 

-

         Real Estate Improvements  

-

 

-

         Land  

-

 

-

         Partnership Interests  

-

 

-

        Real Estate Loans  

-

 

-

        Affiliates  

-

 

-

NET CASH FROM INVESTING ACTIVITIES

 

(428,840)

 

(1,216,600)

CASH FLOW FROM FINANCING ACTIVITIES:        
     Proceeds from:        
          Borrowings - Notes  

25,000

 

-0-

          Borrowings - Mortgages  

288,900

 

430,432

          Issuance of Common Stock  

127,669

 

589,570

          Issuance of Preferred Stock  

-

 

-

     Payments for:        
          Debt Repayment  

(11,000)

 

(9,400)

          Cash Dividends-Preferred  

-

 

-

          Cash Dividends-Common

-

-

          Repurchase of Treasury Stock  

-

 

-

NET CASH FROM FINANCING ACTIVITIES

 

430,569

 

1,010,602

         
          Net Change in Cash  

(24,270)

 

1,270

          Cash Balance, January 1  

25,000

 

730

         
          Cash Balance, December 31  

730

 

2,000

The accompanying notes are an integral part of these financial statements.


SUPREME PROPERTY, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
 

NOTE - 1 SIGNIFICANT ACCOUNTING POLICIES

        Basis of Presentation. A summary of the significant accounting policies of Supreme Property, Inc. is presented to assist in understanding the Company's financial statements. The
 financial statements and notes are representations of the Company's management which is responsible for their integrity and objectivity. The accounting policies use conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements. The financial statements herein are presented using the accrual basis of accounting.

        Nature of Operations. The Company provides real property management, development, and brokerage services. The property management operations were discontinued in December,  2002.

        Investment in Affiliates. Investments in companies in which The Company has the ability to influence operations and finances are accounted for by the equity method. The Company  has one wholly-owned subsidiary, Supreme Capital Funding, Inc., of which it owns 100% of the outstanding common stock. As are result of applying the equity method, the investment in this company was originally recorded at cost. The subsidiary has not commenced operations, so there were no earnings or losses during the period to adjust to reflect the Company's share of such earnings or losses.

        Real Estate Investments. Real Estate Investments are recorded at cost. Accumulated Depreciation has been computed using the straight-line method, based on the an estimated useful life of 27.5 years.

        Notes Payable. Notes Payable includes $15,600 balance due on Supreme Property, Inc.'s purchase of substantially all of the assets from its predecessor company, Supreme Property Management & Sales, Inc., and a $25,000 note due to Thomas Elliott, President of Supreme Property, Inc.

        Mortgages Payable. Four(4) parcels of property are being purchase by Installment Agreement for Warranty Deed, over a term of thirty(30) years. The notes bear interest at the rate of 7% per annum. Principal and interest are payable in monthly installments of $8,349.55, with balloon payments of the outstanding principal on maturity dates in June, July, and August, of 2004.

        Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

NOTE - 2 EMPLOYEE BENEFIT PLAN

The Company maintains a non-qualified incentive employee benefit plan. The purpose of the plan is to provide a means of performance-based incentive compensation for the Company's key employees. Key employees may be issued shares of the Company's common stock or options to purchase common stock as part of their compensation package.

NOTE - 3 COMMITMENTS

        Employment Obligations. The Company has entered into automatically renewing, one-year employment agreements with its V.P. of Finance, V.P. of Property Management, and V.P. of Acquisitions. In the event of termination other than for cause, the contracted employee will receive a lump sum benefit equal to the average compensation in the three most highly compensated years. Upon termination, all options and rights to acquire common shares vest on the effective date of termination.

        Lease Obligations. In April, 2000, Supreme Property, Inc. began leasing office space at an annual rental rate based on the amount of square footage the Company occupies. The lease expires in April, 2004, with a five year renewal option. The annual rent is as follows:

2000

$            4,950.

2001

6,900.

2002

7,200.

2003

7,500.

2004

1,950.

TOTAL

$           28,500

   

 


EXHIBIT 21 - SUBSIDIARY COMPANIES OF SUPREME PROPERTY, INC. HTML

exhibit_21.htm


EXHIBIT 21

Subsidiaries of Supreme Property, Inc.

 

Supreme Property, Inc. has one wholly-owned subsidiary "Supreme Capital Funding, Inc." which is an Illinois incorporated company.


EXHIBIT 23 - CONSENT OF CPA - RICHARD WALKER AND CO. HTML

richardwalker_consent.htm


EXHIBIT 23.2

Consent of Richard Walker and Co.

Richard Walker and Co.                                                                           433 East 75th Street
C
ertified Public Accountant                                                                                 Chicago, Illinois 60619
Member - Illinois CPA Society                                                                             (773) 846-6690 / Fax (773) 846-6688

 
 

CONSENT OF INDEPENDENT AUDITORS

       We cannot to reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) of Supreme Investment Trust, Inc. and to the incorporation by reference therein of our reports on the financial condition of Supreme Property, Inc. filed with the Securities and Exchange Commission.




/s/ Richard Walker
 
Richard Walker & Co.
Certified Public Accountant