U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K123G
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 8, 2000
Starfest, Inc.
(Exact name of registrant as specified in its charter)
California O-27173 95-4442384
- -------------- ------------------------ -------------
(State of (Commission File Number) (IRS Employer
Incorporation) I. D. Number)
9494 East Redfield Road, #1136
Scottsdale, AZ 85260
480-551-8280
-------------------------------------------------------
(Address and telephone number of registrant's principal
executive offices and principal place of business)
MAS Acquisition XX Corp.
1710 E. Division Street
Evansville, IN 47711
------------------------------------------------------
(Former name or address, if changed since last report)
<PAGE>
Item 1. Changes in Control of Registrant.
(a) Pursuant to a Stock Purchase Agreement (the "Purchase Agreement)
dated March 6, 2000 between MAS Capital, Inc., an Indiana corporation, the
controlling shareholder of MAS Acquisition XX Corp. (MAS XX"), an Indiana
corporation, and Starfest, Inc., a California corporation ("Starfest" or the
"Company"), approximately 96.83 percent (8,250,000 shares) of the outstanding
shares of common stock of MAS Acquisition XX Corp. were exchanged for $100,000
and 150,000 shares of common stock of Starfest in a transaction in which
Starfest became the parent corporation of MAS XX.
The Purchase Agreement was adopted by the unanimous consent of the Board
of Directors of MAS XX on March 7, 2000. The Purchase Agreement was adopted by
the unanimous consent of the Board of Directors of Starfest on March 7, 2000. No
approval of the shareholders of Starfest or MAS XX is required under applicable
state corporation law.
Prior to the merger, MAS XX had 8,519,800 shares of common stock
outstanding, of which 8,250,000 shares were exchanged for 100,000 shares of
common stock of Starfest. By virtue of the exchange, Starfest acquired 96.83
percent of the issued and outstanding shares of common stock of MAS XX.
Prior to the effectiveness of the Purchase Agreement, Starfest had an
aggregate of 23 million shares of common stock, no par value, issued and
outstanding.
Upon effectiveness of the acquisition, Starfest had an aggregate of
23,150,000 shares of common stock outstanding.
The officers of Starfest continue as officers of Starfest subsequent to
the Purchase Agreement. See "Management" below. The officers, directors and
by-laws of Starfest will continue without change.
A copy of the Purchase Agreement is attached hereto as an exhibit. The
foregoing description is modified by such reference.
(b) The following table sets forth certain information regarding
beneficial ownership of the common stock of Starfest as of March 7, 2000 by each
individual who is known to Starfest, as of the date of this filing, to be the
beneficial owner of more than five percent of Starfest's common stock, its only
voting security.
2
<PAGE>
Name and Address Amount and
Of Beneficial Nature of Percent of
Owner Beneficial Ownership(1) Class
---------------- ----------------------- ----------
Thomas J. Kenan 1,360,000 shares (2) 5.9%
212 N.W. 18th St.
Oklahoma City, OK
73103
Gary Bryant 1,310,000 shares (3) 5.7%
---------
(1) Unless otherwise indicated, Starfest believes that all persons
named in the above table have the sole voting and investment
power with respect to all shares of common stock beneficially
owned by them.
(2) 760,000 of these shares are held of record by the Marilyn C.
Kenan Trust, of which trust Marilyn C. Kenan, the spouse of
Thomas J. Kenan, is the trustee and beneficiary. Mr. Kenan
disclaims any beneficial ownership of any of the shares held in
the trust.
(3) 570,000 of these shares are held of record by Suzanne Bryant, Mr.
Bryant's spouse, and 370,000 are held of record by Newport
Capital Corporation, a corporation under the control of Mr.
Bryant. Mr. Bryant disavows any beneficial ownership of any of
the shares held by Mrs. Bryant.
The table below sets forth the ownership, as of the date of this filing,
by all directors and nominees, and each of the named executed officers of
Starfest, and directors and executive officers of Starfest as a group, of the
common stock of Starfest, its only voting security.
Name and Address
of Amount and Nature
of Percent of
Owner Beneficial Ownership Class
---------------- -------------------- ----------
Michael Huemmer 760,000 shares 3.3%
9494 E. Redfield
Road, #1136
Scottsdale, AZ 85260
3
<PAGE>
Janet Alexander 100,000 shares 0.4%
120 E. Andreas Road,
Suite C
Palm Springs, CA 92262
Officers and Directors 860,000 shares 3.7%
as a Group (2 persons)
There are no agreements between or among any of the shareholders that
would restrict the issuance of shares in a manner that would cause any change in
control of Starfest. There are no voting trusts, pooling arrangements or similar
agreements in the place between or among any of the shareholders, nor do the
shareholders anticipate the implementation of such an agreement in the near
future.
A change in control could occur in the future, however, should the
shareholders of Starfest and Concierge, Inc., a Nevada corporation, approve an
agreement of merger entered into between Starfest and Concierge on January 26,
2000. The proposed merger will be submitted to the shareholders of each of
Starfest and Concierge pursuant to a Form S-4 Prospectus-Proxy Statement to be
filed with the Commission as soon as the necessary audited financial statements
of Concierge are prepared. It is expected that these financial statements will
be available within 60 days.
Pursuant to the agreement of merger between Starfest and
Concierge,
o Starfest will be the surviving corporation,
o The shareholders of Concierge will receive pro rata for their
shares of common stock of Concierge, 86,000,000 shares of common
stock of Starfest in the merger, and all shares of capital stock
of Concierge will be cancelled,
o The officers and directors of Concierge will become the officers
and directors of Starfest, and
o The name of Starfest will be changed to "Concierge Technologies,
Inc."
4
<PAGE>
Item 2. Acquisition or Disposition of Assets.
(a) The consideration exchanged pursuant to the Purchase
Agreement was negotiated between representatives of the shareholders of MAS XX
and the management of Starfest.
In evaluating Starfest as a candidate for the proposed
acquisition, MAS XX used criteria such as the value of the assets of Starfest
and of Concierge, Inc., Starfest's present stock price as set forth on the OTC
Bulletin Board, Concierge's anticipated operations, and Starfest's and
Concierge's business names and reputations. The shareholders of MAS XX
determined that the consideration for the exchange was reasonable.
(b) Starfest was incorporated under the laws of the State of
California on August 18, 1993. It was originally named "Fanfest, Inc." On August
29, 1995 its name was changed to "Starfest, Inc."
Description of Business and Properties.
- --------------------------------------
Starfest's initial business was the production and promotion of
theme events involving numerous artists and performers and designed to attract
mass audiences of fans drawn by the theme. In 1994 and 1995 it produced
"Fanfest," which was held at the Fairplex at the Los Angeles County Fairgrounds,
and which won the Airplay International Award as the "Country Music Event of the
Year." In 1995 the event won the Country Music Associations of America's award
as the "Best Country Event of the Year." In 1996 the event was renamed
"Starfest" and was again held in Los Angeles.
The events all lost money. In 1997 the event was planned but was
cancelled before being held. The company was essentially dormant in 1998 with
its activities being limited to dealing with creditors and to attempting to
raise capital for the resumption of business.
In 1999 Starfest turned control of the company over to
individuals involved in the adult Internet entertainment business. Under this
new direction the company bought three websites found on the Internet through
www.starfest.com with the front-page title of adultstars.com. Starfest also
- ----------------
purchased and paid for twelve websites on the Internet, but the written transfer
of the websites was never obtained, and the right to obtain the transfer of
those websites have been sold and transferred to unrelated third parties.
5
<PAGE>
Stockholders owning a majority of the outstanding stock of Starfest regained
control of the management of the company and, on December 31, 1999, pursuant to
the written consent of persons holding a majority of the outstanding shares of
common stock of the company, Starfest sold all the assets of the company
associated with the adult entertainment business for $10,000 and applied this
and its other cash assets to the payment of outstanding liabilities.
On January 18, 2000, Starfest and Concierge executed a letter of
intent to submit to their stockholders a proposal to merge. An agreement of
merger was executed on January 26, 2000. Starfest will be the surviving
corporation of the merger, but the business and management of the merged
companies will be that of Concierge. Pending approval of the merger, Starfest
has no business or significant assets.
Starfest's present management consists of two persons, Michael
Huemmer, president, and Barbara Alexander, secretary.
Course of Business for Starfest Should the Merger Not Occur.
- -----------------------------------------------------------
Should the stockholders of the two companies not approve the
merger, Starfest will seek another partner. Its sole "asset" is its status as a
public company whose stock trades on the OTC Bulletin Board.
Legal Proceedings.
-----------------
Neither Starfest nor its property is a party to, or the subject
of, pending legal proceedings.
Market for Starfest's Common Stock and Related Stockholder Matters.
------------------------------------------------------------------
Starfest's Common Stock presently trades on the OTC Bulletin
Board. The high and low bid and asked prices, as reported by the OTC Bulletin
Board, are as follows for 1998 and 1999. The quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.
6
<PAGE>
High Low
---- ---
1998:
1st Qtr. 0.02 0.005
2nd Qtr. 0.01 0.005
3rd Qtr. 0.03 0.005
4th Qtr. 0.021 0.01
1999:
1st Qtr. 0.1000 0.0050
2nd Qtr. 0.5938 0.0200
3rd Qtr. 0.2000 0.0600
4th Qtr. 0.1050 0.0450
Description of Concierge's Business
- -----------------------------------
Overview
- --------
Concierge was incorporated on September 20, 1996, in the State of
Nevada. Its principal office is at 6033 W. Century Boulevard, Suite 1278, Los
Angeles, California 90045. Its telephone number is (310) 645-1582.
Concierge'S Plan of Operation
-----------------------------
Concierge has developed a "unified messaging" product - the Personal
Communications Attendent ("PCA(TM)). It proposes to market this product
commencing in April 2000.
Description of the PCA(TM)
--------------------------
Concierge's PCA provides a means by which any user of Internet e-mail
can have e-mail and fax messages spoken to him or her over any touch-tone
telephone or wireless phone in the world.
The PCA(TM) responds to the user's voice commands to read, verbalize and
manage e-mail traffic stored on a personal computer. The PCA (TM) is "trained"
to respond only to the voice commands and personal voice password of the
individual user, thus guaranteeing that each user's personal messages cannot be
accessed by anyone else. Responding to spoken instructions, the PCA (TM) can
verbalize e-mail with fax and voice-mail capabilities over the phone and save or
delete those messages as directed by the user. Even more exciting, the user, by
voice command, over the telephone, can dictate e-mail messages to respond to the
e-mail messages accessed by telephone.
7
<PAGE>
The Market
----------
As of early 1999, there were estimated to be over 250 million e-mail
users worldwide, a number which is growing rapidly. As to the domestic market,
last year there were more than 40 million e-mail users in the U.S. churning out
more than 150 million messages a day. By 2003 that could reach more than 200
million users, creating 7 billion messages a day. A substantial majority of this
group are potential users of Concierge's current products and products planned
for release.
Distribution Methods
--------------------
Concierge plans an aggressive, direct-mail and Internet-marketing
campaign to introduce and promote the PCA (TM).
Production Costs
----------------
The PCA (TM) will be manufactured and produced for Concierge by Xetel
Corp. A service order fulfillment contract is being negotiated at this time with
an unaffiliated third party corporation. Emerald Solutions, Inc. will provide
project management, program design and program coding services to implement
products designed by Concierge.
The e-mail version will retail at $39.95. With a $19.95 upgrade, the pro
version monitors and collects fax, voice mail and e-mail messages. There will be
no monthly service fee. No device other than an ordinary telephone is needed to
access the PCA(TM). The PCA (TM) also includes an auto pager that notifies the
user by phone or pager when new e-mail is received.
Considering directing product costs including royalties, Concierge
projects a gross profit margin of approximately 80 to 90 percent of direct
sales.
Concierge is in the process of "nationalizing" the product to
accommodate several foreign languages, including Japanese, Korean, German, Latin
American Spanish, French and Brazilian Portuguese.
Governmental Approval of Principal Products
-------------------------------------------
No governmental approval is required in the U.S. for Concierge's
products.
8
<PAGE>
Government Regulations
----------------------
There are no governmental regulations in the U.S. that apply to
Concierge's products.
Properties.
----------
Concierge subleases approximately 150 square feet of office space at
Suite 1278, 6033 W. Century Boulevard, Los Angeles, California 90045. The space
is deemed adequate for the present time, but additional space will be needed
commencing in April 2000. Concierge has not yet identified the additional space
it will lease, but ample space is available in the vicinity of its present space
and elsewhere in the Los Angeles area.
Dependence on Major Customers and Suppliers
-------------------------------------------
Concierge does not anticipate that it will be dependent on any major
customers or suppliers.
Seasonality
-----------
There should be no seasonal aspect to Concierge's business other than
increased sales anticipated in the fourth calendar quarter associated with the
year-end holidays.
Research and Development
------------------------
Concierge expended approximately $188,663 on research and development in
1998 and $50,431 in 1999. It anticipates that it will expend approximately
$150,000 on research and development in 2000 and approximately $200,000 in 2001.
Environmental Controls
----------------------
Concierge is subject to no environmental controls or restrictions that
require the outlay of capital or the obtaining of a permit in order to engage in
business operations.
Your 2000 Computer Problem
--------------------------
Concierge has determined that it does not face material costs, problems
or uncertainties about the year 2000 computer problem. This problem affects many
companies and organizations and stems from the fact that many existing computer
programs use only two digits to identify a year in the date field and do not
consider the impact of the year 2000. Concierge presently uses off-the-shelf and
easily replaceable software programs and has determined that all software is
year 2000 compliant.
9
<PAGE>
Number of Employees.
-------------------
On March 1, 2000 Concierge employed two persons full-time and two
persons part-time.
Venue of Sales.
--------------
Concierge anticipates that some of its initial sales will be
attributable to exports to English-speaking countries.
Patents, Trademarks, Copyrights and Intellectual Property.
---------------------------------------------------------
Concierge has trademarked its Personal Communications Attendant.
It has no patents on the product; the underlying technology is the subject of
patents, and Concierge is required to pay royalty of approximately $0.50 a PCA
unit to each of two unaffiliated patent holders, Lexicus, a subsidiary of
Motorola, and Fonix.
Legal Proceedings.
-----------------
Neither Concierge nor any of its property is a party to, or the subject
of, any material pending legal proceedings other than ordinary, routine
litigation incidental to its business.
Financial Condition
-------------------
As of March 8, 2000, Concierge had cash assets of approximately $500,000
acquired through the sale of its common stock in an offering exempt from
registration pursuant to the provisions of the Commission's Regulation D, Rule
506.
Liquidity
---------
Concierge expects to improve its liquidity through anticipated sales of
its PCA (TM) commencing in April 2000.
Capital Resources
-----------------
Should the need arise during the next twelve months for additional
capital, Concierge believes that several of its existing shareholders will
provide equity capital to meet this need.
10
<PAGE>
PENNY STOCK REGULATIONS
There is no way to predict a price range within which Starfest's common
stock will trade after the proposed merger with Concierge. It presently trades
on the OTC Bulletin Board at a price less than $5 a share and is subject to the
rules governing "penny stocks."
A "penny stock" is any stock that:
sells for less than $5 a share.
is not listed on an exchange or authorized for quotation on The
Nasdaq Stock Market, and
is not a stock of a "substantial issuer." Starfest is not now a
"substantial issuer" and cannot become one until it has net
tangible assets of at least $5 million, which it does not now
have and will not have solely as a result of the proposed merger
with Concierge.
There are statutes and regulations of the Securities and Exchange
Commission (the "Commission") that impose a strict regimen on brokers that
recommend penny stocks.
The Penny Stock Suitability Rule
--------------------------------
Before a broker-dealer can recommend and sell a penny stock to a new
customer who is not an institutional accredited investor, the broker-dealer must
obtain from the customer information concerning the person's financial
situation, investment experience and investment objectives. Then, the
broker-dealer must "reasonably determine" (1) that transactions in penny stocks
are suitable for the person and (2) that the person, or his advisor, is capable
of evaluating the risks in penny stocks.
After making this determination, the broker-dealer must furnish the
customer with a written statement setting forth the basis for this suitability
determination. The customer must sign and date a copy of the written statement
and return it to the broker-dealer.
Finally the broker-dealer must also obtain from the customer a written
agreement to purchase the penny stock, identifying the stock and the number of
shares to be purchased.
11
<PAGE>
The above exercise delays a proposed transaction. It causes many
broker-dealer firms to adopt a policy of not allowing their representatives to
recommend penny stocks to their customers.
The Penny stock Suitability Rule, described above, and the Penny Stock
Disclosure Rule, described below, do not apply to the following:
transactions not recommended by the broker-dealer,
sales to institutional accredited investors,
sales to "established customers" of the broker-dealer - persons
who either have had an account with the broker-dealer for at
least a year or who have effected three purchases of penny stocks
with the broker-dealer on three different days involving three
different issuers, and
transactions in penny stocks by broker-dealers whose income from
penny stock activities does not exceed five percent of their
total income during certain defined periods.
The Penny Stock Disclosure Rule
-------------------------------
Another Commission rule - the Penny stock Disclosure Rule - requires a
broker-dealer, who recommends the sale of a penny stock to a customer in a
transaction not exempt from the suitability rule described above, to furnish the
customer with a "risk disclosure document." This document includes a description
of the penny stock market and how it functions, its inadequacies and
shortcomings, and the risks associated with investments in the penny stock
market. The broker-dealer must also disclose the stock's bid and ask price
information and the dealer's and salesperson's compensation related to the
proposed transaction. Finally, the customer must be furnished with a monthly
statement including prescribed information relating to market and price
information concerning the penny stocks held in the customer's account.
Effects of the Rule
-------------------
The above penny stock regulatory scheme is a response by the Congress
and the Commission to known abuses in the telemarketing of low-priced securities
12
<PAGE>
by "boiler shop" operators. The scheme imposes market impediments on the sale
and trading of penny stocks. It has a limiting effect on a stockholder's ability
to resell a penny stock.
Starfest's merger shares likely will trade below $5 a share on the OTC
Bulletin Board and be, for some time at least, shares of a "penny stock" subject
to the trading market impediments described above.
Directors and Executive Officers of Starfest
- --------------------------------------------
The following persons are the current directors and officers of
Starfest:
Office Held Term
Person Offices Since of Office
- ------ ------- ----------- ---------
Michael Huemmer,60 President and 1999 2000
Director
Janet Alexander,66 Secretary and 1999 2000
Director
Michael Huemmer. Mr. Huemmer has been employed by Starfest since April
---------------
1999. Prior to this employment he was the president of Ameripro Sports Marketing
Company of Palm Desert, California from 1995 until his employment with Starfest.
Janet Alexander. Ms. Alexander has served as Starfest's secretary since
---------------
July 1999. Prior to this employment she was self-employed as a hypnotherapist in
Wildomer, California from 1995 until June 1998 when she moved to Palm Springs,
California. She was not employed from June 1998 until she became the secretary
of Starfest in July 1999.
There are no family relationships between the directors and officers.
There are no significant employees of Starfest who are not described above.
Executive Compensation
----------------------
During 1999 no executive officer of Starfest received cash compensation
except Mr. Huemmer. He received an aggregate of $18,000 in cash compensation and
300,000 shares of common stock of Starfest for his services as president during
1999. In 2000 he was granted 760,000 shares of common stock of Starfest for his
services as president during 2000.
13
<PAGE>
In November 1999 Ms. Alexander was granted 100,000 shares of common
stock of Starfest as compensation for her services as secretary and a director.
Other than as stated above, no cash compensation, deferred compensation
or long-term incentive plan awards were issued or granted to Starfest's
management during the period ended December 31, 1999. Further, no member of
Starfest's management has been granted any option or stock appreciation rights;
accordingly, no tables relating to such items have been included within this
Item.
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from Starfest, with respect to any director or
executive officer of Starfest which would in any way result in payments to any
such person because of his or her resignation, retirement or other termination
of employment with Starfest or its subsidiaries, any change in control or
Starfest, or a change in the person's responsibilities following a change in
control of Starfest.
Long-Term Compensation
- ----------------------
As of March 7, 2000, Starfest has no long-term compensation plans or
employment agreements with any of its officers or directors.
Potential De-Listing of Common Stock
- ------------------------------------
Starfest may be de-listed from the OTC Bulletin Board. NASD Eligibility
Rule 6530 issued on January 4, 1999, states that Issuers that do not make
current filings pursuant to Sections 13 and 15(d) of the Securities Exchange Act
of 1934 are ineligible for listing on the OTC Bulletin Board. Issuers who are
not current with such filings are subject to de-listing according to a phase-in
schedule depending on each issuer's trading symbol as reported on January 4,
1999. Our trading symbol on January 4, 1999 was SFST. Under the phase-in
schedule, our common stock is subject to de-listing on April 5, 2000. On March
10, 2000 our common stock trading symbol will be changed to SFSTE if we are not
current in filing reports by that date.
14
<PAGE>
Item 3. Bankruptcy or Receivership.
-----------------------------------
Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
------------------------------------------------------
Not applicable.
Item 5. Other Events.
---------------------
Successor Issuer Election.
- -------------------------
Upon execution of the Purchase Agreement and the subsequent delivery of
$100,000 cash and 150,000 shares of common stock of Starfest on March 7, 2000,
to MAS Capital Inc., pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, Starfest became the
successor issuer to MAS Acquisition XX Corp. for reporting purposes under the
Securities and Exchange Act of 1934 and elected to report under the Act
effective March 7, 2000.
Item 6. Resignations of Directors and Executive Officers.
--------------------------------------------------------
Not applicable.
Item 7. Financial Statements.
----------------------------
Starfest, Inc.
Independent Auditors' Report..................................... 16
Balance Sheet as of December 31, 1999............................ 17
Statement of Operations for the years
ended December 31, 1999 and
December 31, 1998 ........................................ 18
Statement of Changes in Stockholders' Equity
(Deficit) for the period from
December 31, 1997 to December 31, 1999 ................... 19
Statements of Cash Flows for the years ended
December 31, 1999 and December 31, 1998 .................. 20
Notes to Financial Statements
15
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors
Starfest, Inc.
I have audited the accompanying balance sheet of Starfest, Inc. as of December
31, 1999, and the related statements of operations, stockholders' equity
(deficit) and cash flows for the year ended December 31, 1999 and the year ended
December 31, 1998. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Starfest, Inc. as of December 31,
1999, and the results of its operations and its cash flows for the year ended
December 31, 1999 and the year ended December 31, 1998, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring significant losses from
operations that raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Beverly Hills, California
February 9, 2000
16
<PAGE>
STARFEST, INC.
BALANCE SHEET
DECEMBER 31, 1999
ASSETS
<TABLE>
<S> <C>
Cash $ 481
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 17,687
-----------
Total current liabilities
17,687
-----------
Stockholders' equity (deficit)
Common stock: no par value,
65,000,000 shares authorized;
21,697,999 shares issued and
outstanding 2,639,651
Retained earnings (deficit) (2,656,857)
-----------
Total stockholders' equity (deficit) (17,206)
-----------
$ 481
===========
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
STARFEST, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended
December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Revenues $ - $ -
------------ ------------
General and Administrative
Expenses 518,606 2,366
------------ ------------
Operating (Loss) (518,606) (2,366)
Provision for income taxes - -
------------ ------------
NET (LOSS) $ (518,606) $ (2,366)
Net (Loss)
per common share $ (.04) $ (.01)
Weighted Average Shares
Outstanding 15,893,441 8,301,323
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
STARFEST, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY/(DEFICIT)
<TABLE>
<CAPTION>
Common Stock Retained
Number of Amount Earnings
Shares Total (Deficit) Total
--------- ------ --------- -----
Balance,
<S> <C> <C> <C> <C>
December 31, 1997 6,236,323 $1,598,072 $(2,135,885) $ (537,813)
Net (loss) for
year ended
December 31, 1998 - - (2,366) (2,366)
---------- ---------- ----------- ----------
Balance,
December 31, 1998 6,236,323 1,598,072 (2,138,251) (540,179)
Shares issued
for services 2,313,338 87,200 - 87,200
Shares issued
for assets 2,950,000 118,000 - 118,000
Shares issued
for debt
extinguishment 6,165,005 646,379 - 646,379
Shares issued
for cash 4,033,333 190,000 - 190,000
Net (loss) for
year ended
December 31, 1999 - - (518,606) (518,606)
---------- ---------- ----------- ----------
Balance,
December 31, 1999 21,697,999 $2,639,651 $(2,656,857) $ (17,206)
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
STARFEST, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998
---------- ----------
Net Cash From
Operating Activities:
<S> <C> <C>
Net (loss) $(518,606) $ (2,366)
Adjustments to reconcile
net loss to net cash
used by operating activities:
Shares issued for services 87,200 -
Shares issued for assets 118,000 -
Shares issued for
debt extinguishment 646,379 -
Changes in assets
and liabilities:
Accounts payable (413,692) 2,366
Other liabilities (108,800) -
Net cash (used)
by operating activities (189,519) -
Investing Activities:
Net cash provided (used) by
Investing Activities x - -
--------- -------
Cash flows from Financing
Activities
Common stock issued for cash 190,000 -
--------- -------
Net cash provided by
Financing Activities: 190,000
Increase in Cash 481 -
Cash at beginning of period - -
--------- -------
Cash at end of period $ 481 $ -
Supplemental cash flow information:
Cash paid during the period for:
Interest $ - $ -
Income taxes $ - $ -
Non cash financing transactions:
Shares for services $ 87,200 $ -
Shares for debt extinguishment $ 646,379 $ -
Shares for assets $ 118,000 $ -
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
STARFEST, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - Summary of Significant Accounting Policies
Nature of Operations
Starfest, Inc. (the "Company"), a California corporation, was
incorporated on August 18, 1993 as Fanfest, Inc.. In August, 1995 the Company
changed its name to Starfest, Inc.. During the year ended December 31, 1998, the
Company was inactive, just having minimal administrative expenses. During the
year ended December 31, 1999 the Company attempted to pursue operations in the
online adult entertainment field.
However, the Company was not successful in this pursuit.
Cash equivalents
Cash equivalents consist of funds invested in money market accounts and
in investments with a maturity of three months or less when purchased. There
were no cash equivalents at December 31, 1999.
Loss per share
The computation of loss per share of common stock is based on the
weighted average number of shares outstanding during the periods presented.
Fully diluted calculations are not presented since the Company only had losses
for all periods presented (thus antidilutive).
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in financial statements and
accompanying notes. Actual results could differ from those estimates.
Issuance of Shares for Services
Valuation of shares for services is based on the estimated fair market
value of the services performed.
Income taxes
The Company records its income tax provision in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes". (See Note 3).
21
<PAGE>
STARFEST, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - Summary of Significant Accounting Policies(continued)
Fair Value of Financial Instruments
Pursuant to SFAS No. 107, Disclosures about Fair Value of Financial
Instruments, the Company is required to estimate the fair value of all financial
instruments included on its balance sheet at December 31, 1999. The Company
considers the carrying value of such amounts in the consolidated financial
statements to approximate their expected realization and interest rates, which
approximate current market rates. During the periods presented and at December
31, 1999 the Company had no financial instruments.
Comprehensive Income (Loss)
In fiscal 1999, the Company adopted SFAS No. 130, Reporting
Comprehensive Income. This statement establishes standards for the reporting of
comprehensive income and its components in a financial statement that is
displayed with the same prominence as other financial statements. The adoption
of SFAS No. 130 required no additional disclosure for the Company and did not
have any effect on the Company's financial position, as there was no difference
between comprehensive loss and the net loss as reported.
Segment Disclosures
In Fiscal 1999, the Company adopted SFAS No. 131, Disclosures About
Segments of an Enterprise and Related Information. This Statement establishes
standards for the way companies report information regarding operating segments
in annual financial statements. The adoption of SFAS No. 131 required no
additional disclosure for the Company as the Company operated in one principal
business segment.
Reclassifications
Certain items in prior period financial statements have been
reclassified to conform with 1999 classifications.
NOTE 2 - Basis of presentation and considerations related to continued existence
(going concern)
The Company's financial statements have been presented on the basis that
it is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company
incurred a net loss of $518,606 for the year ended December 31, 1999. The
Company incurred a net loss of $2,366 for the year ended December 31, 1998.
22
<PAGE>
STARFEST, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 2 - Basis of presentation and considerations related to continued existence
(going concern) (continued)
These factors, among others, raise substantial doubt as to the Company's
ability to continue as a going concern.
The Company's management intends to raise additional operating funds
through equity and/or debt offerings. However, there can be no assurance
management will be successful in this endeavor.
NOTE 3 - Income Taxes
The Company records its income tax provision in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" which requires the use of the liability method of accounting for deferred
income taxes.
Since the Company did not have taxable income during the periods
presented, no provision for income taxes has been provided. At December 31,
1999, the Company did not have any significant tax net operating loss
carryforwards (tax benefits resulting from losses for tax purposes have been
fully reserved due to the uncertainty of a going concern). At December 31, 1999,
the Company did not have any significant deferred tax liabilities or deferred
tax assets.
NOTE 4 - Subsequent Events
On January 18, 2000 the Company issued 1,302,001 of its common shares,
for January, 2000 services, to three shareholders.
In January and February, 2000 the Company was in negotiations regarding
possibly entering into a business combination with Concierge, Inc., a
development stage software developer. Concierge, Inc. does not have significant
assets or revenues.
23
<PAGE>
Item 8. Change in Fiscal Year.
-----------------------------
Starfest, as the successor issuer, has a fiscal year end of December 31, which
fiscal year will continue for the successor issuer.
Exhibits.
--------
2 Stock Purchase Agreement of March 6, 2000 between Starfest,
Inc. and MAS Capital, Inc.
3.1 Certificate of Amendment of Articles of Incorporation of
Starfest, Inc. and its earlier articles of incorporation.
3.2 Bylaws of Starfest, Inc.
10.1 Agreement of Merger between Starfest, Inc. and Concierge,
Inc.
23 Consent of Jaak (Jack) Olesk, certified public accountant
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Starfest, Inc.
By: /s/ Michael Huemmer
March 8, 2000 --------------------------
Michael Huemmer, President,
Chief Operating Officer, and
Director
24
STOCK PURCHASE AGREEMENT
Agreement dated as of March 6, 2000 between Starfest, Inc., a California
corporation ("SFST"), on the one hand, and MAS Capital Inc. ("MASC").
1. THE ACQUISITION.
1.1 Purchase and Sale Subject to the Terms and Conditions of this Agreement. At
the Closing to be held as provided in Section 2, MASC shall sell the MAS XX
Shares (defined below) to SFST, free and clear of all Encumbrances other than
restrictions imposed by Federal and State securities laws. SFSX shall pay SFSX
Shares (defined below) to MASC, free and clear of all Encumbrances without any
restrictions.
1.2 Purchase Price. SFST will pay $100,000 cash to MASC for 8,250,000 shares of
MAS Acquisition XX Corp. ("MAS XX"), representing approximately 96.8% of the
issued and outstanding common shares of MAS XX (the "MAS XX Shares"). In
addition SFSX will pay 150,000 common shares of Starfest, Inc. ("SFSX Shares",
OTC B/B symbol "SFSX") to MASC as consulting fee.
2. THE CLOSING.
2.1 Place and Time. The closing of the sale the MAS XX Shares (the "Closing")
shall take place at the office of MAS Acquisition XX Corp., 1710 E. Division
St., Evansville, IN 47711 no later than the close of business (Central time) on
or before March 8, 2000 or at such other place, date and time as the parties may
agree in writing.
2.2 Deliveries by MASC. At the Closing, the MASC shall deliver the following to
SFST:
1. Certificates representing the MAS XX Shares, duly endorsed for transfer to
SFST and accompanied by appropriate guaranteed stock powers; MASC shall deliver
to SFST at the Closing, a certificate representing the MAS XX Shares registered
in the name of SFST (without any legend or other reference to any Encumbrance
other than appropriate federal securities law limitations).
<PAGE>
2. The documents contemplated by Section 3.
3. All other documents, instruments and writings required by this Agreement to
be delivered by MASC at the Closing and any other documents or records relating
to MAS XX's business reasonably requested by SFST in connection with this
Agreement.
2.3 Deliveries by SFST. At the Closing, SFST shall deliver the following to
MASC:
1. $100,000 cash by wire transfer to the account of MASC contemplated by
section 1.
2. Certificates representing the SFSX Shares, duly endorsed for transfer to MASC
and accompanied by appropriate guaranteed stock powers; SFST shall deliver to
MASC at the Closing, a certificate representing the SFSX Shares registered in
the name of MASC (without any legend or other reference to any Encumbrance).
2. The documents contemplated by Section 4.
3. All other documents, instruments and writings required by this Agreement
to be delivered by SFST at the Closing.
3. CONDITIONS TO SFST'S OBLIGATIONS.
The obligations of SFST to effect the Closing shall be subject to the
satisfaction at or prior to the Closing of the following conditions, any one or
more of which may be waived by SFST:
<PAGE>
3.1 No Injunction. There shall not be in effect any injunction, order or decree
of a court of competent jurisdiction that prevents the consummation of the
transactions contemplated by this Agreement, that prohibits SFST's acquisition
of the MAS XX Shares or that will require any divestiture as a result of SFST's
acquisition of the MAS XX Shares or that will require all or any part of the
business of SFST to be held separate and no litigation or proceedings seeking
the issuance of such an injunction, order or decree or seeking to impose
substantial penalties on SFST or MAS XX if this Agreement is consummated shall
be pending.
3.2 Representations, Warranties and Agreements. (a) The representations and
warranties of MASC set forth in this Agreement shall be true and complete in all
material respects as of the Closing Date as though made at such time, and (b)
MASC shall have performed and complied in all material respects with the
agreements contained in this Agreement required to be performed and complied
with by it at or prior to the Closing.
3.3 Regulatory Approvals. All licenses, authorizations, consents, orders and
regulatory approvals of Governmental Bodies necessary for the consummation of
SFST's acquisition of the MAS XX Shares shall have been obtained and shall be in
full force and effect.
3.4 Resignations of Director. Effective on the Closing Date, all of officers and
directors shall have resigned as an officer, director and employee of MAS XX.
<PAGE>
4. CONDITIONS TO MASC'S OBLIGATIONS.
The obligations of MASC to effect the Closing shall be subject to the
satisfaction at or prior to the Closing of the following conditions, any one or
more of which may be waived by MASC:
4.1 No Injunction. There shall not be in effect any injunction, order or decree
of a court of competent jurisdiction that prevents the consummation of the
transactions contemplated by this Agreement, that prohibits SFST's acquisition
of the MAS XX Shares or that will require any divestiture as a result of SFST's
acquisition of the MAS XX Shares or that will require all or any part of the
business of SFST or MAS XX to be held separate and no litigation or proceedings
seeking the issuance of such an injunction, order or decree or seeking to impose
substantial penalties on SFST or MAS XX if this Agreement is consummated shall
be pending.
4.2 Representations, Warranties and Agreements. (a) The representations and
warranties of SFST set forth in this Agreement shall be true and complete in all
material respects as of the Closing Date as though made at such time, and (b)
SFST shall have performed and complied in all material respects with the
agreements contained in this Agreement required to be performed and complied
with by it at or prior to the Closing.
4.3 Regulatory Approvals. All licenses, authorizations, consents, orders and
regulatory approvals of Governmental Bodies necessary for the consummation of
SFST's acquisition of the MAS XX Shares shall have been obtained and shall be in
full force and effect.
5. REPRESENTATIONS AND WARRANTIES OF MASC.
MASC represents and warrants to SFST that, to the knowledge of MASC, and
except as set forth in an MAS XX Disclosure Letter:
<PAGE>
5.1 Authorization. MASC is a corporation duly organized, validly existing and in
good standing under the laws of the state of Indiana. This Agreement constitutes
a valid and binding obligation of MASC, enforceable against it in accordance
with its terms.
5.2 Capitalization. The authorized capital stock of MAS XX consists of
80,000,000 authorized shares of stock, par value $.001, and 20,000,000 preferred
shares, par value $.001, of which 8,519,900 common shares are presently issued
and outstanding. No shares have been registered under state or federal
securities laws. As of the Closing Date there will not be outstanding any
warrants, options or other agreements on the part of MAS XX obligating MAS XX to
issue any additional shares of common or preferred stock or any of its
securities of any kind.
5.3 Ownership of MAS XX Shares. The delivery of certificates to SFST provided in
Section 2.2 will result in SFST's immediate acquisition of record and beneficial
ownership of the MAS XX Shares, free and clear of all Encumbrances subject to
applicable State and Federal securities laws.
5.4 Consents and Approvals of Governmental Authorities. Except with respect to
applicable State and Federal securities laws, no consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Body is required to be made or obtained by MAS XX or SFST or any of its
Subsidiaries in connection with the execution, delivery and performance of this
Agreement by MAS XX or the consummation of the sale of the MAS XX Shares to
SFST.
5.5 Financial Statements. MAS XX has delivered to SFST the balance sheet of MAS
XX as at June 30, 1998 and June 30, 1999, and statements of income and changes
in financial position for the fiscal years then ended and the period from
inception to the period then ended, together with the report thereon of MAS XX's
independent accountant (the "MAS XX Financial Statements"). The MAS XX Financial
Statements are accurate and complete in accordance with generally accepted
accounting principles. The independent accountants for MAS XX will furnish any
and all work papers required by SFST and will sign any and all consent required
to be signed to include the financial statements of SFST in any subsequent
filing by SFST.
<PAGE>
5.6 Litigation. There is no action, suit, inquiry, proceeding or investigation
by or before any court or Governmental Body pending or threatened in writing
against or involving MAS XX which is likely to have a material adverse effect on
the business or financial condition of MAS XX.
5.7 Absence of Certain Changes. Since the date of the MAS XX Financial
Statements, MAS XX has not:
1. suffered the damage or destruction of any of its properties or assets
(whether or not covered by insurance) which is materially adverse to the
business or financial condition of MAS XX or made any disposition of any of its
material properties or assets other than in the ordinary course of business;
2. made any change or amendment in its certificate of incorporation or
by-laws, or other governing instruments;
3. issued or sold any Equity Securities or other securities, acquired, directly
or indirectly, by redemption or otherwise, any such Equity Securities,
reclassified, split-up or otherwise changed any such Equity Security, or granted
or entered into any options, warrants, calls or commitments of any kind with
respect thereto;
4. organized any new Subsidiary or acquired any Equity Securities of any Person
or any equity or ownership interest in any business;
5. borrowed any funds or incurred, or assumed or become subject to, whether
directly or by way of guarantee or otherwise, any obligation or liability with
respect to any such indebtedness for borrowed money;
6. paid, discharged or satisfied any material claim, liability or obligation
(absolute, accrued, contingent or otherwise), other than in the ordinary course
of business;
7. prepaid any material obligation having a maturity of more than 90 days from
the date such obligation was issued or incurred;
8. canceled any material debts or waived any material claims or rights, except
in the ordinary course of business;
<PAGE>
9. disposed of or permitted to lapse any rights to the use of any material
patent or registered trademark or copyright or other intellectual property owned
or used by it;
10. granted any general increase in the compensation of officers or employees
(including any such increase pursuant to any employee benefit plan);
11. purchased or entered into any contract or commitment to purchase any
material quantity of raw materials or supplies, or sold or entered into any
contract or commitment to sell any material quantity of property or assets,
except (i) normal contracts or commitments for the purchase of, and normal
purchases of, raw materials or supplies, made in the ordinary course business,
(ii) normal contracts or commitments for the sale of, and normal sales of,
inventory in the ordinary course of business, and (iii) other contracts,
commitments, purchases or sales in the ordinary course of business;
12. made any capital expenditures or additions to property, plant or equipment
or acquired any other property or assets (other than raw materials and supplies)
at a cost in excess of $100,000 in the aggregate;
13. written off or been required to write off any notes or accounts receivable
in an aggregate amount in excess of $2,000;
14. written down or been required to write down any inventory in an aggregate
amount in excess of $ 2,000;
15. entered into any collective bargaining or union contract or agreement;
or
16. other than the ordinary course of business, incurred any liability required
by generally accepted accounting principles to be reflected on a balance sheet
and material to the business or financial condition of MAS XX.
<PAGE>
5.8 No Material Adverse Change. Since the date of the MAS XX Financial
Statements, there has not been any material adverse change in the business or
financial condition of MAS XX.
5.9 Brokers or Finders. MASC has not employed any broker or finder or incurred
any liability for any brokerage or finder's fees or commissions or similar
payments in connection with the sale of the MAS XX Shares to SFST.
6. REPRESENTATIONS AND WARRANTIES OF SFST.
SFST represents and warrants to MASC that, to the Knowledge of SFST (which
limitation shall not apply to Section 6.3). Such representations and warranties
shall survive the Closing for a period of two years.
6.1 Organization of SFST; Authorization. SFST is a corporation duly organized,
validly existing and in good standing under the laws of California with full
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action of
SFST and this Agreement constitutes a valid and binding obligation of SFST;
enforceable against it in accordance with its terms.
6.2 Capitalization. The authorized capital stock of SFST consists of 65,000,000
authorized shares of common stock, no par value of which 23,000,000 are
presently issued and outstanding.
6.3 Ownership of SFSX Shares. The delivery of certificates to MASC provided in
Section 2.2 will result MASC's immediate acquisition of record and beneficial
ownership of the SFST Shares, free and clear of all Encumbrances.
6.2 No Conflict as to SFST and Subsidiaries. Neither the execution and delivery
of this Agreement will (a) violate any provision of the certificate of
incorporation or by-laws (or other governing instrument) of SFST or any of its
Subsidiaries or (b) violate, or be in conflict with, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
<PAGE>
required by, or excuse performance by any Person of any of its obligations
under, or cause the acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of any Encumbrance upon any
property or assets of SFST or any of its Subsidiaries under, any material
agreement or commitment to which SFST or any of its Subsidiaries is a party or
by which any of their respective property or assets is bound, or to which any of
the property or assets of SFST or any of its Subsidiaries is subject, or (c)
violate any statute or law or any judgment, decree, order, regulation or rule of
any court or other Governmental Body applicable to SFST or any of its
Subsidiaries except, in the case of violations, conflicts, defaults,
terminations, accelerations or Encumbrances described in clause (b) of this
Section 6.4, for such matters which are not likely to have a material adverse
effect on the business or financial condition of SFST and its Subsidiaries,
taken as a whole.
6.4 Consents and Approvals of Governmental Authorities. No consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Body is required to be made or obtained by SFST or any of either of their
Subsidiaries in connection with the execution, delivery and performance of this
Agreement by SFST.
6.5 Other Consents. No consent of any Person is required to be obtained by MAS
XX or SFST to the execution, delivery and performance of this Agreement
including, but not limited to, consents from parties to leases or other
agreements or commitments, except for any consent which the failure to obtain
would not be likely to have a material adverse effect on the business and
financial condition of MAS XX or SFST.
6.6 Financial Statements. After closing, SFST ackwledge and agrees that within
60 days from the effective date of this agreement, SFST shall have file on Form
8-K which includes two years of audited and unaudited consolidated financial
statements of SFST. Such SFST Financial Statements and notes shall fairly
present the financial condition and results of operations of SFST and its
Subsidiaries as at the respective dates thereof and for the periods therein
referred to, all in accordance with generally accepted United States accounting
principles consistently applied throughout the periods involved, except as set
forth in the notes thereto, and shall be utilizable in any SEC filing in
compliance with Rule 310 of Regulation S-B promulgated under the Securities Act.
<PAGE>
6.7 Brokers or Finders. SFST has not employed any broker or finder or incurred
any liability for any brokerage or finder's fees or commissions or similar
payments in connection with the purchase of the MAS XX Shares.
6.8 Purchase for Investment. SFST is purchasing the MAS XX Shares solely for its
own account for the purpose of investment and not with a view to, or for sale in
connection with, any distribution of any portion thereof in violation of any
applicable securities law.
7. Access and Reporting; Filings With Governmental Authorities; Other
Covenants.
7.1 Access Between the date of this Agreement and the Closing Date. Each of MASC
and SFST shall (a) give to the other and its authorized representatives
reasonable access to all plants, offices, warehouse and other facilities and
properties of MAS XX or SFST, as the case may be, and to its books and records,
(b) permit the other to make inspections thereof, and (c) cause its officers and
its advisors to furnish the other with such financial and operating data and
other information with respect to the business and properties of such party and
its Subsidiaries and to discuss with such and its authorized representatives its
affairs and those of its Subsidiaries, all as the other may from time to time
reasonably request.
7.2 Regulatory Matters. MASC and SFST shall (a) file with applicable regulatory
authorities any applications and related documents required to be filed by them
in order to consummate the contemplated transaction and (b) cooperate with each
other as they may reasonably request in connection with the foregoing.
8. CONDUCT OF MAS XX'S BUSINESS PRIOR TO THE CLOSING. MASC shall use its best
efforts to ensure the following:
8.1 Operation in Ordinary Course. Between the date of this Agreement and the
Closing Date, MAS XX shall cause conduct its businesses in all material respects
in the ordinary course.
8.2 Business Organization. Between the date of this Agreement and the Closing
Date, MAS XX shall (a) preserve substantially intact the business organization
of MAS XX; and (b) preserve in all material respects the present business
relationships and good will of MAS XX.
8.3 Corporate Organization. Between the date of this Agreement and the Closing
Date, MAS XX shall not cause or permit any amendment of its certificate of
incorporation or by-laws (or other governing instrument) and shall not:
1. issue, sell or otherwise dispose of any of its Equity Securities, or create,
sell or otherwise dispose of any options, rights, conversion rights or other
agreements or commitments of any kind relating to the issuance, sale or
disposition of any of its Equity Securities;
<PAGE>
2. create or suffer to be created any Encumbrance thereon, or create, sell or
otherwise dispose of any options, rights, conversion rights or other agreements
or commitments of any kind relating to the sale or disposition of any Equity
Securities;
3. reclassify, split up or otherwise change any of its Equity Securities; be
party to any merger, consolidation or other business combination;
4. sell, lease, license or otherwise dispose of any of its properties or assets
(including, but not limited to rights with respect to patents and registered
trademarks and copyrights or other proprietary rights), in an amount which is
material to the business or financial condition of MAS XX except in the ordinary
course of business; or
5. organize any new Subsidiary or acquire any Equity Securities of any Person or
any equity or ownership interest in any business.
8.4 Other Restrictions. Between the date of this Agreement and the
Closing Date, MAS XX shall not:
1. borrow any funds or otherwise become subject to, whether directly or by
way of guarantee or otherwise, any indebtedness for borrowed money;
2. create any material Encumbrance on any of its material properties or
assets;
3. increase in any manner the compensation of any director or officer or
increase in any manner the compensation of any class of employees;
4. create or materially modify any material bonus, deferred compensation,
pension, profit sharing, retirement, insurance, stock purchase, stock option, or
other fringe benefit plan, arrangement or practice or any other employee benefit
plan (as defined in section 3(3) of ERISA);
5. make any capital expenditure or acquire any property or assets;
6. enter into any agreement that materially restricts SFST, MAS XX or any of
their Subsidiaries from carrying on business;
7. pay, discharge or satisfy any material claim, liability or obligation,
absolute, accrued, contingent or otherwise, other than the payment, discharge or
satisfaction in the ordinary course of business of liabilities or obligations
reflected in the MAS XX Financial Statements or incurred in the ordinary course
of business and consistent with past practice since the date of the MAS XX
Financial Statements; or
8. cancel any material debts or waive any material claims or rights.
<PAGE>
9. DEFINITIONS.
As used in this Agreement, the following terms have the meanings specified
or referred to in this Section 9.
9.1 "Business Day" = Any day that is not a Saturday or Sunday or a day on which
banks located in the City of New York are authorized or required to be closed.
9.2 "Code" = The Internal Revenue Code of 1986, as amended.
9.3 "Encumbrances" = Any security interest, mortgage, lien, charge, adverse
claim or restriction of any kind, including, but not limited to, any restriction
on the use, voting, transfer, receipt of income or other exercise of any
attributes of ownership, other than a restriction on transfer arising under
Federal or state securities laws.
9.4 "Equity Securities" = See Rule 3aB11B1 under the Securities Exchange Act of
1934.
9.5 "ERISA" = The Employee Retirement Income Security Act of 1974, as amended.
9.6 "Governmental Body" = Any domestic or foreign national, state or municipal
or other local government or multi-national body (including, but not limited to,
the European Economic Community), any subdivision, agency, commission or
authority thereof.
9.7 "Knowledge" = Actual knowledge, after reasonable investigation.
9.8 "Person" = Any individual, corporation, partnership, joint venture, trust,
association, unincorporated organization, other entity, or Governmental Body.
9.9 "Subsidiary" = With respect to any Person, any corporation of which
securities having the power to elect a majority of that corporation's Board of
Directors (other than securities having that power only upon the happening of a
contingency that has not occurred) are held by such Person or one or more of its
Subsidiaries.
<PAGE>
10. TERMINATION.
10.1 Termination. This Agreement may be terminated before the Closing occurs
only as follows:
1. By MASC at any time on or after March 8, 2000, if $100,000 cash is not
received by MASC at MASC's account.
2. By SFST, by notice to MASC at any time, if one or more of the conditions
specified in Section 3 is not satisfied at the time at which the Closing (as it
may be deferred pursuant to Section 2.1) would otherwise occur or if
satisfaction of such a condition is or becomes impossible.
3. By MASC, by notice to SFST at any time, if one or more of the conditions
specified in Section 4 is not satisfied at the time at which the Closing (as it
may be deferred pursuant to Section 2.1), would otherwise occur of if
satisfaction of such a condition is or becomes impossible.
10.2 Effect of Termination. If this Agreement is terminated pursuant to Section
10.1, this Agreement shall terminate without any liability or further obligation
of any party to another.
13. NOTICES. All notices, consents, assignments and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
when (a) delivered by hand, (b) sent by telex or facsimile (with receipt
confirmed), provided that a copy is mailed by registered mail, return receipt
requested, or (c) received by the delivery service (receipt requested), in each
case to the appropriate addresses, telex numbers and facsimile numbers set forth
below (or to such other addresses, telex numbers and facsimile numbers as a
party may designate as to itself by notice to the other parties).
(a) If to SFST:
Starfest, Inc.
9494 E. Redfield Road, #1136
Scottsdale, AZ 85260
Facsimile No.: (480) 551-8285
Attn: Michael Huemmer, President
(b) If to MASC:
MAS Capital Inc.
1710 E. Division St.
Evansville, IN 47711
Facsimile No.: (812) 479-7266
Attention: Aaron Tsai, President
14. MISCELLANEOUS.
14.2 Expenses. Each party shall bear its own expenses incident to the
preparation, negotiation, execution and delivery of this Agreement and the
performance of its obligations hereunder.
14.3 Captions. The captions in this Agreement are for convenience of reference
only and shall not be given any effect in the interpretation of this agreement.
14.4 No Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
<PAGE>
14.5 Exclusive Agreement; Amendment. This Agreement supersedes all prior
agreements among the parties with respect to its subject matter with respect
thereto and cannot be changed or terminated orally.
14.6 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be considered an original, but all of which together shall
constitute the same instrument.
14.7 Governing Law, Venue. This Agreement and (unless otherwise provided) all
amendments hereof and waivers and consents hereunder shall be governed by the
internal law of the State of Indiana, without regard to the conflicts of law
principles thereof. Venue for any cause of action brought to enforce any part of
this Agreement shall be in Indiana.
14.8 Binding Effect. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns, provided
that neither party may assign its rights hereunder without the consent of the
other, provided that, after the Closing, no consent of MAS XX or the MASC shall
be needed in connection with any merger or consolidation of SFST with or into
another entity.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective offi-cers, hereunto duly authorized, and
entered into as of the date first above written.
STARFEST, INC.
a California corporation
/s/Michael Huemmer
- ------------------------------
By: Michael Huemmer, President
MAS CAPITAL INC.
/s/Aaron Tsai
- -------------------------
By: Aaron Tsai, President
ENDORSED-FILED
in the office of the
SECRETARY OF STATE
OF THE STATE OF CALIFORNIA
FEB 26 1999
Bill Jones, Secretary of State
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
STARFEST, INC.
Thomas J. Kenan certifies that:
1. He is the President and Secretary of Starfest, Inc., a California
corporation.
2. ARTICLE IV is amended to read as follows:
This corporation is authorized to issue only one class of
shares of stock; and the total number of shares which this
corporation is authorized to issue is 65 million.
3. The foregoing amendment to the Articles of Incorporation has been
duly approved by the Board of Directors.
4. The foregoing amendment to the Articles of Incorporation was duly
approved by the required vote of shareholders in accordance with section 902 of
the California Corporations Code. The total number of outstanding shares
entitled to vote with respect to the amendment was 4,000,000, the favorable
majority of such shares is required to approve the amendment, and the number of
such shares voting in favor of the amendment equaled or exceeded the required
vote.
I further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this certificate are true and
correct of my own knowledge.
Dated: 2-25-99 /s/ Thomas J. Kenan
Thomas J. Kenan, President
/s/ Thomas J. Kenan
Thomas J. Kenan, Secretary
Exhibit 3.1
Page 1 of 7 pages
<PAGE>
ENDORSED-FILED
in the office of the
SECRETARY OF STATE
OF THE STATE OF CALIFORNIA
MAR 7 1996
Bill Jones, Secretary of State
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
STARFEST, INC.
Bob Alexander and Barbara Contratto certify that:
1. They are the President and Secretary, respectively, of Starfest, Inc., a
California Corporation.
2. ARTICLE IV is amended to read as follows:
"This corporation is authorized to issue only one class of shares
of stock; and the total number of shares which this corporation is
authorized to issue is Four Million (4,000,000).
Effective upon the filing of this Certificate of Amendment, each
outstanding share is converted (split) into 829.57 shares, with
fractional shares rounded up to the nearest full share."
3. The foregoing amendment to the Articles of Incorporation has been
duly approved by the Board of Directors
4. The foregoing amendment to the Articles of Incorporation was duly approved by
the required vote of shareholders in accordance with section 902 of the
California Corporations Code. The total number of outstanding shares entitled to
vote with respect to the amendment was 1860, the favorable majority of such
shares is required to approve the amendment, and the number of such shares
voting in favor of the amendment equaled or exceeded the required vote.
We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this certificate are true and
correct of our own knowledge.
Dated: 3-5-96 /s/ Bob Alexander
Bob Alexander, President
/s/ Barbara Contratto
Barbara Contratto Secretary
Exhibit 3.1
Page 2 of 7 pages
<PAGE>
ENDORSED-FILED
in the office of the
SECRETARY OF STATE
OF THE STATE OF CALIFORNIA
AUG 29 1995
Bill Jones, Secretary of State
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
FANFEST, INC.
Bob Alexander and Herb Gronauer certify that:
1. They are the President and Secretary, respectively, of Fanfest, Inc., a
California Corporation.
2. The following amendment to the articles of incorporation of the corporation
has been duly approved by the board of directors of the corporation:
"Article I is amended to read as follows:
The name of the corporation is Starfest, Inc."
3. The amendment was duly approved by the required vote of shareholders in
accordance with section 902 of the California Corporations Code. The total
number of outstanding shares entitled to vote with respect to the amendment was
805, the favorable majority of such shares is required to approve the amendment,
and the number of such shares voting in favor of the amendment equaled or
exceeded the required vote.
/s/ Bob Alexander
Bob Alexander, President
Dated: July 27, 1995 /s/ Herb Gronauer
Herb Gronauer, Secretary
Verification
We declare under penalty of perjury under the laws of the State of California
that the matters set forth in this certificate are true and correct of our own
knowledge.
Dated: July 27, 1995 /s/ Bob Alexander
Bob Alexander, President
/s/ Herb Gronauer
Herb Gronauer, Secretary
Exhibit 3.1
Page 3 of 7 pages
<PAGE>
ENDORSED-FILED
in the office of the
SECRETARY OF STATE
OF THE STATE OF CALIFORNIA
AUG 18 1994
Tony Miller
Acting Secretary of State
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
FANFEST, INC.
Bob Alexander and Herb Gronauer certify that:
1. They are the President and Secretary, respectively, of Fanfest, Inc.,
a California corporation.
2. ARTICLE IV is amended to read as follows:
"This corporation is authorized to issue only one class of
shares of stock; and the total number of shares which this
corporation is authorized to issue is One Thousand Eight Hundred
and Sixty (1,860).
Effective upon the filing of this Certificate of
Amendment, each outstanding share is converted into or
reconstituted as one share of single class of common stock.
3. ARTICLE V is deleted in its entirety.
4. The foregoing amendment of Articles of Incorporation has been duly
approved by the Board of Directors.
5. The foregoing amendment of Articles of Incorporation has been duly
approved by the unanimous vote of the shareholders in accordance with section
902 of the California Corporations Code.
We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this certificate are true and
correct of our own knowledge.
Dated: 8-12-94 /s/ Bob Alexander
Bob Alexander, President
/s/ Herb Gronauer
Herb Gronauer, Secretary
Exhibit 3.1
Page 4 of 7 pages
<PAGE>
ENDORSED-FILED
in the office of the
SECRETARY OF STATE
OF THE STATE OF CALIFORNIA
NOV -3 1993
March Fong Fu
Secretary of State
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
Bob Alexander and Herb Gronauer certify that:
1. They are the President and Secretary, respectively, of Fanfest, Inc.,
a California corporation.
2. ARTICLE IV is amended to read as follows:
"This corporation is authorized to issue two classes of
shares designated respectively "Class A Common Stock" and "Class
B Common Stock." Nine Hundred and Thirty (930) shares of Class A
Common Stock may be issued. Nine Hundred and Thirty (930) shares
of Class B Common Stock may be issued.
Effective upon the filing of this Certificate of
Amendment, each outstanding share is converted into or
reconstituted as one share of Class B Common Stock.
The only distinction between the two classes shall regard
the right of the holders of the respective classes of shares to
elect directors of the corporation as specified in Article V,
below."
ARTICLE V is added to read as follows:
"Except as stated below, the number of directors of this
corporation shall be four (4). The holders of Class A Common
Stock, voting as a class, shall be entitled to elect two
directors of the corporation. The holders of Class B Common
Stock, voting as a class, shall be entitled to elect two
directors of the corporation.
In the event that any holder of Class A Common Stock
should acquire any share of Class B Common Stock, the number of
directors of this corporation shall be increased to five (5). The
holders of Class A Common Stock, voting as a class, shall then be
entitled to elect three directors of the corporation. The holders
of Class B Common Stock, voting as a class, shall then be
entitled to elect two directors of the corporation.
In the event that any holder of Class B Common Stock
should acquire any share of Class A Common Stock, the number of
directors of this corporation shall be increased to five (5). The
holders of Class A Common Stock, voting as a class, shall then be
entitled to elect two directors of the corporation. The holders
of Class B Common Stock, voting as a class, shall then be
entitled to elect three directors of the corporation."
3. The foregoing amendment of Articles of Incorporation has been duly
approved by the Board of Directors.
Exhibit 3.1
Page 5 of 7 pages
<PAGE>
4. The foregoing amendment of Articles of Incorporation has been duly
approved by the unanimous vote of the shareholders in accordance with section
902 of the California Corporations Code.
We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this certificate are true and
correct of our own knowledge.
Dated: 10-7-93 /s/ Bob Alexander
Bob Alexander, President
/s/ Herb Gronauer
Herb Gronauer, Secretary
Exhibit 3.1
Page 6 of 7 pages
<PAGE>
ENDORSED-FILED
in the office of the
SECRETARY OF STATE
OF THE STATE OF CALIFORNIA
AUG 18 1993
March Fong Fu
Secretary of State
ARTICLES OF INCORPORATION
OF
FANFEST, INC.
I
The name of this corporation is Fanfest, Inc.
II
The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
III
The name and address in the State of California of this corporation's
initial agent for service of process is:
Bob Alexander
8899 Beverly Boulevard, Suite 500
Los Angeles, California 90048
IV
This corporation is authorized to issue only one class of shares of
stock; and the total number of shares which this corporation is authorized to
issue is One thousand (1,000).
Date: 8-17-93 /s/ Dale Thetford
Dale Thetford, Incorporator
Exhibit 3.1
Page 7 of 7 pages
BYLAWS
OF
FANFEST, INC. Name changed 11-3-93
A CALIFORNIA CORPORATION STARFEST, INC.
ARTICLE I
OFFICES
Section 1. PRINCIPAL EXECUTIVE OR BUSINESS OFFICES. The board of
directors shall fix the location of the principal executive office of the
corporation at any place within or outside the State of California. If the
principal executive office is located outside California and the corporation has
one or more business offices in California, the board shall fix and designate a
principal business office in California.
Section 2. OTHER OFFICES. Branch or subordinate offices may be established
at any time and at any place by the board of directors.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held at
any place within or outside the State of California designated by the board of
directors. In the absence of a designation by the board, shareholders' meetings
shall be held at the corporation's principal executive office.
Section 2. ANNUAL MEETING. The annual meeting of shareholders shall be
held each year on a date and at a time designated by the board of directors.
The date so designated shall be within five months after the end of the
corporation's fiscal year, and within fifteen months after the last annual
meeting.
At each annual meeting, directors shall be elected and any other proper
business w~hin the power of the shareholders may be transacted.
Section 3. SPECIAL MEETING. A special meeting of the shareholders may be
called at any time by the board of directors, by the chair of the board, by the
president or vice president, or by one or more shareholders holdingshares that
in the aggregate are entitled to cast ten percent or more of the votes at that
meeting.
If a special meeting is called by anyone other than the board of
directors, the person or persons calling the meeting shall make a request in
writing, delivered personally or sent by
1
<PAGE>
registered mail or by telegraphic or other facsimile transmission, to the chair
of the board or the president, vice president, or secretary, specifying the time
and date of the meeting (which is not less than 35 nor more than 60 days after
receipt of the request) and the general nature of the business proposed to be
transacted. No business other than that stated in the notice shall be transacted
at the meeting unless all shareholders sign written waivers of notice. Within 20
days after receipt, the officer receiving the request shall cause notice to be
given to the shareholders entitled to vote, in accordance with Sections 4 and 5
of this Article II, stating that a meeting will be held at the time requested by
the person(s) calling the meeting, and stating the general nature of the
business proposed to be transacted. If notice is not given within 20 days after
receipt of the request, the person or persons requesting the meeting may give
the notice. Nothing contained in this paragraph shall be construed as limiting,
fixing, or affecting the time when a meeting of shareholders called by action of
the board may be held.
Section 4. NOTICE OF SHAREHOLDERS' MEETINGS. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with Section 5 of
this Article II not fewer than 10 nor more than 60 days before the date of the
meeting. Shareholders entitled to notice shall be determined in accordance with
Section 11 of this ArtiCle II. The notice shall specify the place, date, and
hour of the meeting, and (i) in the case of a special meeting, the general
nature of the business to be transacted, or (ii) in the case of the annual
meeting, those matters that the board of directors, at the time of giving the
directors are to be elected, the notice shall include the names of all nominees
whom the board intends, at the time of the notice, to present for election.
The notice shall also state the general nature of any proposed action to be
taken at the meeting to approve any of the following matters:
(i) A transaction in which a director has a financial interest, within the
meaning of ss.310 of the California Corporations Code;
(ii) An amendment of the articles of incorporation under ss.902 of that
Code:
(iii) A reorganization under ss.1201 of that Code;
(iv) A voluntary dissolution under ss.1900 of that Code; or
(v) A distribution in dissolution that requires approval of the outstanding
shares under ss.2007 of that Code.
2
<PAGE>
Section 5. MANNER OF GIVING NOTICE : AFFIDAVIT OF NOTICE. Notice of any
shareholders' meeting shall be given either personally or by first-class mail,
charges prepaid, addressed to the shareholder at the address appearing on the
corporation's books or given by the shareholder to the corporation for purposes
of notice. If no address appears on the corporation's books or has been given as
specified above, notice shall be either (1) sent by first-class mail addressed
to the shareholder at the corporation's principal executive office, or (2)
published at least once in a newspaper of general circulation in the county
where the corporation's principal executive office is located. Notice is deemed
to have been given at the time when delivered personally or deposited in the
mall or sent by other means of written communication.
If any notice or report mailed to a shareholder at the address appearing on
the corporation's books is returned marked to indicate that the United States
Postal Service is unable to deliver the document to the shareholder at that
address, all future notices or reports shall be deemed to have been duly given
without further mailing if the corporation holds the document available for the
shareholder on written demand at the corporation's principal executive office
for a period of one year from the date the notice or report was given to all
other shareholders.
An affidavit of the mailing, or other authorized means of giving notice or
delivering a document, of any notice of shareholders' meeting, report, or other
document sent to shareholders, may be executed by the corporation's secretary,
assistant secretary, or transfer agent, and, if executed, shall be filed and
maintained in the minute book of the corporation.
Section 6. QUORUM. The presence in person or by proxy of the holders of a
majority of the shares entitled to vote at any meeting of the shareholders shall
constitute a quorum for the transaction of business. The shareholders present
at a duly called or held meeting at which a quorum is present may continue
to do business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
Section 7. ADJOURNED MEETING; NOTICE. Any shareholders' meeting, annual
or special, whether or not a quorum is present, may be adjourned from time to
time by the vote of the majority of the shares represented at that meeting,
either in person or by proxy, but in the absence of a quorum, no other business
may be transacted at that meeting, except as provided in Section 6 of this
Article II.
3
<PAGE>
When any meeting of shareholders, either annual or special, is adjourned
to another time or place, notice of the adjourned meeting need not be given if
the time and place are announced at the meeting at which the adjournment is
taken, unless a new record date for the adjourned meeting is fixed, or unless
the adjournment is for more than 45 days from the date set for the original
meeting, in which case the board of directors shall set a new record date.
Notice of any such adjourned meeting, if required, shall be given to each
shareholder of record entitled to vote at the adjourned meeting, in accordance
with Sections 4 and 5 of this Article II. At any adjourned meeting, the
corporation may transact any business that might have been transacted at the
original meeting.
Section 8. VOTING. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with Section 11 of this Article
II, subject to the provisions of sections 702 through 704 of the California
Corporations Code relating to voting shares held by a fiduciary, in the name of
a corporation, or in joint ownership. The shareholders' vote may be by voice
vote or by ballot, provided, however, that any election for directors must be by
ballot if demanded by any shareholder before the voting has begun. On any matter
other than the election of directors, any shareholder may vote part of the
shares the shareholder is to vote in favor of the proposal and refrain from
voting the remaining shares or vote them against the proposal, but, if the
shareholder fails to specify the number of shares that the shareholder is voting
affirmatively, it will be conclusively presumed that the shareholder's approving
vote is with respect to all shares that the shareholder is entitled to vote. If
a quorum is present (or if a quorum has been present earlier at the meeting but
some shareholders have withdrawn), the affirmative vote of a majority of the
shares represented and voting, provided such shares voting affirmatively also
constitute a majority of the number of shares required for a quorum, shall be
the act of the shareholders unless the vote of a greater number or voting by
classes is required by law or by the articles of incorporation.
At a shareholders' meeting at which directors are to be elected, no
shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a
number of votes greater than the number of votes which that shareholder normally
would be entitled to cast), unless the candidates' names have been placed in
nomination before commencement of the voting and a shareholder has given notice
at the meeting, before the voting has begun, of the shareholder's intention to
cumulate votes. If any shareholder has given such a notice, then all
shareholders entitled to vote may cumulate their votes for candidates in
nomination, and may give one candidate a number of votes equal to the number of
directors to be elected multiplied by the number of votes to which that
shareholder's shares are normally entitled, or
4
<PAGE>
distribute the shareholder's votes on the same principle among any or all of the
candidates, as the shareholder thinks fit. The candidates receiving the highest
number of votes, up to the number of directors to be elected, shall be elected.
Section 9. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The
transactions of any meeting of shareholders, either annual or special, however
called and noticed and wherever held, shall be as valid as though they were had
at a meeting duly held after regular call and notice, if a quorum is present
either in person or by proxy, and if each person entitled to vote who was not
present in person or by proxy, either before or after the meeting, signs a
written waiver of notice or a consent to holding the meeting or an approval of
the minutes of the meeting. The waiver of notice or consent need not specify
either the business to be transacted or the purpose of any annual or special
meeting of the shareholders, except that if action is taken or proposed to be
taken for approval of any of those matters specified in section 601(f) of the
California Corporations Code, i.e., (i) A transaction in which a director has a
financial interest, within the meaning of ss.310 of the California Corporations
Code; (ii) An amendment of the articles of incorporation under ss.902 of that
Code; (iii) A reorganization under ss.1201 of that Code; (iv) A voluntary
dissolution under ss.1900 of that Code; or (v) A distribution in dissolution
that requires approval of the outstanding shares under ss.2007 of that Code; the
waiver of notice or consent is required to state the general nature of the
action or proposed action.
All waivers, consents, and approvals shall be filed with the corporate
records or made a part of the minutes of the meeting.
A shareholder's attendance at a meeting also constitutes a waiver of
noticeof that meeting, unless the shareholder at the beginning of the meeting
objects to the transaction of any business on the ground that the meeting was
not lawfully called or convened. In addition, attendance at a meeting does not
constitute a waiver of any right to object to consideration of matters required
by law to be included in the notice of the meeting which were not so included,
if that objection is expressly made at the meeting.
Section 10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any
action that could be taken at an annual or special meeting of shareholders may
be taken without a meeting and without prior notice, if a consent in writing,
setting forth the action so taken, is signed by the holders of outstanding
shares having not less than the minimum number oi~ votes that would be necessary
to authorize or take that action at a meeting at which all shares entitled to
vote on that action were present and voted.
4
<PAGE>
Directors may be elected by written consent of the shareholders without
a meeting only if the written consents of all outstanding shares entitled to
vote are obtained, except that vacancies on the board (other than vacancies
created by removal) not filled by the board may be filled by the written consent
of the holders of a majority of the outstanding shares entitled to vote.
All consents shall be filed with the secretary of the corporation and
shall be maintained in the corporate records. Any shareholder or other
authorized person who has given a written consent may revoke it by a writing
received by the secretary of the corporation before written consents of the
number of shares required to authorize the proposed action have been filed with
the secretary.
Unless the consents of all shareholders entitled to vote have been
solicited in writing, prompt notice shall be given of any corporate action
approved by shareholders without a meeting by less than unanimous consent, to
those shareholders entitled to vote who have not consented in writing. As to
approvals required by California Corporations Code section 310 (transactions in
which a director has a financial interest), section 317 (indemnification of
corporate agents), section 1201 (corporate reorganization), or section 2007
(certain distributions on dissolution), notice of the approval shall be given at
least ten days before the consummation of any action authorized by the approval.
Notice shall be given in the manner specified in Section 5 of this Article II.
Section 11. RECORD DATE FOR SHAREHOLDER NOTICE OF MEETING, VOTING, AND
GIVING CONSENT.
(a) For purposes of determining the shareholders entitled to receive notice
of and vote at a shareholders' meeting or give written consent to corporate
action without a meeting, the board may fix in advance a record date that is not
more than 60 nor less than 10 days before the date of a shareholders' meeting,
or not more than 60 days before any other action.
(b) If no record date is fixed:
(i) The record date for determining shareholders entitled to receive
notice of and vote at a shareholders' meeting shall be the business day next
preceding the day on which notice is given, or if notice is waived as provided
in Section 9 of this Article II the business day next preceding the day on which
the meeting is held.
(ii) The record date for determining shareholders entitled to give
consent to corporate action in writing without a meeting, if no prior action has
been taken by the board, shall be
6
<PAGE>
the day on which the first written consent is given.
(iii) The record date for determining shareholders for any other
purpose shall be as set forth in Section 1 of Article VIII of these bylaws.
(c) A determination of shareholders of record entitled to receive notice of
and vote at a shareholders' meeting shall apply to any adjournment of the
meeting unless the board fixes a new record date for the adjourned meeting.
However, the board shall fix a new record date if the adjournment is to a date
more than 45 days after the date set for the original meeting.
(d) Only shareholders of record on the corporation's books at the close
of business on the record date shall be entitled to any of the notice and voting
rights listed in subsection (a) of this section, notwithstanding any transfer of
shares on the corporation's books after the record date, except as otherwise
required by law.
Section 12. PROXIES. Every person entitled to vote for directors or on
any other matter shall have the right to do so either in person or by one or
more agents authorized by a written proxy signed by the person and filed with
the secretary of the corporation. A proxy shall be deemed signed if the
shareholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, or otherwise) by the shareholder or the
shareholder's attorney in fact. A validly executed proxy that does not state
that it is irrevocable shall oo~&nme ~n ~m~A ~O~Qe mn4 m~(pound)e~ unAe!l (~)
~oked by ~he person executing it, before the vote pursuant to that proxy, by a
writing delivered to the corporation stating that the proxy J s revoked, or by
attendance at the meeting and voting in person by the person executing the proxy
or by a subsequent proxy executed by the same person and presented at the
meeting; or (ii) written notice of the death or incapacity of the maker of that
proxy is received by the corporation before the vote pursuant to which that
proxy is counted; provided, however, that no proxy shall be valid after the
expiration of 11 months from the date of the proxy, unless otherwise provided in
the proxy. The revocability of a proxy that states on its face that it is
irrevocable shall be governed by the provisions of sections 705(e) and ?05(f) of
the Corporations Code of California.
Section 13. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders the board may appoint inspectors of election to act at the meeting
and any adjournment thereof. If inspectors of election are not so appointed, or
if any persons so appointed fail to appear or refuse to act, the chair of any
meeting of shareholders may, and on the request of any shareholder or a
shareholder's proxy shall, appoint inspectors of election (or persons to replace
those who so fail or refuse) at
7
<PAGE>
the meeting. The number of inspectors shall be either one or three. If appointed
at a meeting on the request of one or more shareholders or proxies, the majority
of shares represented in person or by proxy shall determine whether one or three
inspectors are to be appointed.
These inspectors shall: (a) determine the number of shares outstanding
and the voting power of each, the shares represented at the meeting, the
existence of a quorum, and the authenticity, validity, and effect of proxies;
(b) receive votes, ballots, or consents; (c) hear and determine all challenges
and questions in any way arising in connection with the right to vote; (d) count
and tabulate all votes or consents; (e) determine when the polls shall close;
(f) determine the result; and (g) do any other acts that may be proper to
conduct the election or vote with fairness to all shareholders.
ARTICLE III DIRECTORS
Section 1. POWERS. Subject to the provisions of the California General
Corporation Law and any limitations in the articles of incorporation and these
bylaws relating to action required to be approved by the shareholders or by the
outstanding shares, the business and affairs of the corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
board of directors.
Without prejudice to these general powers, and subject to the same
limitations, the board of directors shall have the power to:
(a) Select and remove all officers, agents, and employees of the
corporation; prescribe any powers and duties for them that are consistent with
law, with the articles of incorporation, and with these bylaws; fix their
compensation; and require from them security for faithful service.
(b) Change the principal executive office or the principal business
office in the State of California from one location to another; cause the
corporation to be qualified to do business in any other state, territory,
dependency, or country and conduct business within or outside the State of
California; and designate any place within or outside the State of California
for holding any shareholders' meeting or meetings, including annual meetings.
(c) Adopt, make, and use a corporate seal; prescribe the forms of
certificates of stock; and alter the form of the seal and certificates.
(d) Authorize the issuance of shares of stock of the corporation on any
lawful terms, in consideration of money paid,
8
<PAGE>
labor done, services actually rendered, debts or securities canceled, or
tangible or intangible property actually received.
(e) Borrow money and incur indebtedness on behalf of the corporation,
and cause to be executed and delivered for the corporation's purposes,
in the corporate name, promissory notes, bonds, debentures, deeds of trust,
mortgages, pledges, hypothecations, and other evidences of debt and securities.
Section 2. NUMBER OF DIRECTORS. Amended, until changed by amendment
to this effective bylaw adopted by the vote or written consent of a majority of
the 9-29-93 outstanding shares entitled to vote. However, an amendment that
would reduce the authorized number of directors to a number fewer than five
cannot be adopted if the votes cast against its adoption at a shareholders'
meeting or the shares not consenting to an action by written consent are equal
to more than one-sixth (16 2/3%) of the outstanding shares entitled to vote.
Section 3. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be
elected at each annual meeting of the shareholders to hold office until the next
annual meeting. Each director, including a director elected to fill a vacancy,
shall hold office until the expiration of the term for which elected and until
a successor has been elected and qualified.
No reduction of the authorized number of directors shall have the effect of
removing any director before that director's term of office expires.
Section 4. VACANCIES. A vacancy in the board of direectors shall be deemed
to exist: (a) if a director dies, resigns or is removed by the shareholders or
an appropriate court, provided in sections 303 or 304 of the California
Corporations Code; (b) if the board of directors declares vacant the offside
of a director whdas been convicted of a felony or declared of unsound mind
by-an order of court; (c) if the authorized number of directors is in, eased;
or (d) if, at, any shareholders' meeting at which one or more director are
elected, the shareholders fail to elect the full authorized number of directors
to be voted for at that meeting.
Amended;
effective 9-29-93
Any director may resign effective on giving written notice to the chair of
the board, the president, the secretary, or the board of directors, unless the
notice specifies a later effective date. If the resignation is effective at a
future time, the board may elect a successor to take office when the resignation
becomes effective.
Except for a vacancy caused by the removal of a director, vacancies on the
board may be filled by approval of the board or, if the number of directors then
in office is less than a quorum,
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by (1) the unanimous written consent of the directors then in office, (2) the
affirmative vote of a majority of the directors then in office at a meeting held
pursuant to notice or waivers of notice complying with section 307 of the
Corporations Code, or (3) a sole remaining director. A vacancy on the board
caused by the removal of a director may be filled only by the shareholders,
except that a vacancy created when the board declares the office of a director
vacant as provided in clause (b) of the first paragraph of this section of the
bylaws may be filled by the board of directors.
The shareholders may elect a directors at any time to fille a vacancy not
filled by the board of directors.
The term of office of a director elected to fill a vacancy shall run until
the next annual meeting of the shareholders, and such a director shall hold
office until a successor is elected and qualified.
Section 5. PLACE OF MEETINGS; TELEPHONE MEETINGS. Regular meetings of the
board of directors may be held at any place within or outside the State of
California as designated from time to time by the board. In the absence of a
designation, regular meetings shall be held at the principal executive office of
the corporation. Special meetings of the board shall be held at any place within
or outside the State of California designated in the notice of the meeting, or
if the notice does not state a place, or if there is no notice, at the principal
executive office of the corporation. Any meeting, regular or special, may be
held by conference telephone or similar communication equipment, provided that
all directors participating oan hear one another.
Section 6. ANNUAL DIRECTORS' MEETING. Immediately after each annual
shareholders' meeting, the board of directors shall hold a regular meeting at
the same place, or at any other place that has been designated by the board of
directors, to consider matters of organization, election of officers, and other
business as desired. Notice of this meeting shall not be required unless some
place other than the place of the annual shareholders' meeting has been
designated.
Section 7. OTHER REGULAR MEETINGS. Other regular meetings of the board
of directors shall be held without call at times to be fixed by the board of
directors from time to time. Such regular meetings may be held without notice;
however, notice of the time and place of a regular meeting shall be given to any
director not present when the meeting was scheduled.
Section 8. SPECIAL MEETINGS. Special meetings of the board of directors
may be called for any purpose or purposes at any time by the chair of the board,
the president, any vice president, the secretary, or any two directors.
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Special meetings shall be held on four days' notice by mail or
forty-eight hours' notice delivered personally or by telephone or telegraph.
Oral notice given personally or by telephone may be transmitted either to the
director or to a person at the director's office who can reasonably be expected
to communicate it promptly to the director. Written notice, if used, shall be
addressed to each director at the address shown on the corporation's records.
The notice need not specify the purpose of the meeting, nor need it specify the
place if the meeting is to be held at the principal executive office of the
corporation.
Section 9. QUORUM. A majority of the authorized number of directors
shall constitute a quorum for the transaction of business, except to adjourn as
provided in Section 11 of this Article III. Every act or decision done or made
by a majority of the directors present at a meeting duly held at which a quorum
is present shall be regarded as the act of the board of directors, subject to
the provisions of California Corporations Code section 310 (as to approval of
contracts or transactions in which a director has a direct or indirect material
financial interest); section 311 (as to appointment of committees), and section
317(e) (as to indemnification of directors). A meeting at which a quorum is
initially present may continue to transact business, despite the withdrawal of
directors, if any action taken is approved by at least a majority of the
required quorum for that meeting.
Section 10. WAIVER OF NOTICE. Notice of a meeting, if otherwise
required, need not be given to any director who (i) either before or after the
meeting signs a waiver of notice or a consent to holding the meeting without
being given notice; (ii) signs an approval of the minutes of the meeting; or
(iii) attends the meeting without protesting the lack of notice before or at the
beginning of the meeting. Waivers of notice or consents need not specify the
purpose of the meeting. All waivers, consents, and approvals of the minutes
shall be filed with the corporate records Or made a part of the minutes of the
meeting.
Section 11. ADJOURNMENT TO ANOTHER TIME OR PLACE. Whether or not a
quorum is present, a majority of the directors present may adjourn any meeting
to another time or place.
Section 12. NOTICE OF ADJOURNED MEETING. Notice of the time and place of
resuming a meeting that has been adjourned need not be given unless the
adjournment is for more than 24 hours, in which case notice shall be given,
before the time set for resuming the adjourned meeting, to the directors who
were not present at the time of the adjournment. Notice need not be given in any
case to directors who were present at the time of adjournment.
Section 13. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken by the board of directors may be taken
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(g) Appointing other committees of the board or their members.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
committees shall be governed by, and held and taken in accordance with, bylaw
provisions applicable to meetings and actions of the board of directors, wi~h
such changes in the context of those bylaws as are necessary to substitute the
committee and its members for the board of directors and its members, except
that (a) the time of regular meetings of committees may be determined either by
resolution of the board of directors or by resolution of the committee; (b)
special meetings of committees may also be called by resolution of the board of
directors; and (c) notice of special meetings of committees shall also be given
to all alternative members who shall have the right to attend all meetings of
the committee. The board of directors may adopt rules for the governance of any
committee not inconsistent with these bylaws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the corporation shall be a
president, a chief financial officer, and a secretary. The corporation may also
have, at the discretion of the board of directors, a chair of the board, a chief
executive officer (in addition to a president), a treasurer, one or more vice
presidents, one or more assistant secretaries, one or more assistant treasurers,
and such other officers as may be appointed in accordance with Section 3 of this
Article V. Any number of offices may be held by the same person.
Section 2. APPOINTMENT OF OFFICERS. The officers of the corporation,
except for subordinate officers appointed in accordance with Section 3 of this
Article V, shall be appointed annually by the board of directors, and shall
serve at the pleasure of the board of directors.
Section 3. SUBORDINATE OFFICERS. The board of directors may appoint, and
may empower the president or vice president to appoint other officers as
required by the business of the corporation, whose duties shall be as provided
in the bylaws, or as determined from time to time by the board of directors or
the president.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Any officer chosen by
the board of directors may be removed at any time, with or without cause or
notice, by the board of directors. Subordinate officers appointed by persons
other than the board under Section 3 of this Article V may be removed at any
time, with or without cause or notice, by the board of directors or by the
officer by whom appointed. Officers may be employed for a
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specified term under a contract of employment if authorized by the board of
directors; such officers may be removed from office at any time under this
section, and shall have no claim against the corporation or individual officers
or board members because of the removal except any right to monetary
compensation to which the officer may be entitled under the contract of
employment.
Any officer may resign at any time by giving written notice to the
corporation. Resignations shall take effect on the date of receipt of the
notice, unless-a later time is specified in the notice. Unless otherwise
specified in the notice, acceptance of the resignation is not necessary to make
it effective. Any resignation is without prejudice to the rights, if any, of the
corporation to monetary damages under any contract of employment to which the
officer is a party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office resulting from
an officer's death, resignation, removal, disqualification, or from any other
cause shall be filled in the manner prescribed in these bylaws for regular
election or appointment to that office.
Section 6. CHAIR OF THE BOARD. The board of directors may elect a chair,
who shall preside, if present, at board meetings and shall exercise and perform
such other powers and duties as may be assigned from time to time by the board
of directors. If there is no chief executive officer or in the absence of the
chief executive officer, the chair of the board shall, in addition, be the chief
executive officer of the corporation, and shall have the powers and duties as
set forth in Section 7 of this Article V.
Section 7. CHIEF EXECUTIVE OFFICER. The board of directors may elect a
chief executive officer, who, in the absence of the president or if there is no
president, shall act in the capacity of the president and shall have the powers
and duties as set forth in Section 8 of this Article V. Upon the removal, death,
incapacity, or resignation of the president, the chief executive officer shall
become the president of the corporation and hold that office until a new
president is elected by the board.
Section 8. PRESIDENT. Except to the extent that the bylaws or the board
of directors assign specific powers and duties to the chair of the board, the
president shall be the corporation's general manager and, subject to the control
of the board of directors, shall have general supervision, direction, and
control over the corporation's business and its officers. The managerial powers
and duties of the president shall include, but are not limited to, all the
general powers and duties of management usually vested in the office of
president of a corporation, and the president shall have other powers and duties
as prescribed by the board of directors or the bylaws. The president shall
preside
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at all meetings of the shareholders and, in the absence of the chair of the
board or if there is no chair of the board, shall also preside at meetings of
the board of directors. If there is also a chief executive officer, in addition
to the president, then, for the purpose of giving any reports or executing any
documents requiring the signature of the "chief executive officer", such reports
shall be made and such documents executed by either the president or the chief
executive officer.
Section 9. VICE PRESIDENTS. If desired, one or more vice presidents may
be chosen by the board of directors in accordance with the provisions for
appointing officers set forth in Section 2 of this Article V. In the absence or
disability of the president, the chief executive officer and the chair of the
board (or if there is no chief executive officer or chair of the board), the
president's duties and responsibilities shall be carried out by the highest
ranking available vice president if vice presidents are ranked or, if not, by a
vice president designated by the board of directors. When so acting, a vice
president shall have all the powers of and be subject to all the restrictions on
the president. Vice presidents of the corporation shall have such other powers
and perform such other duties as prescribed from time to time by the board of
directors, the bylaws, or the president.
Section 10. SECRETARY
(a) Minutes.
The secretary shall keep, or cause to be kept, minutes of all of the
shareholders' meetings and of all other board meetings. If the secretary is
unable to be present, the secretary or the presiding officer of the meeting
shall designate another person to take the minutes of the meeting.
The secretary shall keep, or cause to be kept, at the principal
executive office or such other place as designated by the board of directors, a
book of minutes of all meetings and actions of the shareholders, of the board of
directors, and of committees of the board. The minutes of each meeting shall
state the time and place the meeting was held; whether it was regular or
special; if special, how it was called or authorized; the names of directors
present at board or committee meetings; the number of shares present or
represented at shareholders' meetings; an accurate account of the proceedings;
and when it was adjourned.
(b) Record of Shareholders.
The secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the transfer agent or registrar, a record
or duplicate record of shareholders. This
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record shall show the names of all shareholders and their addresses, the number
and classes of shares held by each, the number and date of share certificates
issued to each shareholder, and the number and date of cancellation of any
certificates surrendered for cancellation.
(c) Notice of Meetings.
The secretary shall give notice, or cause notice to be given, of
all shareholders' meetings, board meetings, and meetings of committees of the
board for which notice is required by statute or by the bylaws. If the secretary
or other person authorized by the secretary to give notice fails to act, notice
of any meeting may be given by any other officer of the corporation.
(d) Other Duties.
The secretary shall keep the seal of the corporation, if any, in safe
custody. The secretary shall have such other powers and perform other duties as
prescribed by the board of directors or by the bylaws.
Section 11. CHIEF FINANCIAL OFFICER. The chief financial officer shall
keep, or cause to be kept, adequate and correct books and records of accounts of
the properties and business transactions of the corporation, including accounts
of its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings, and shares. The books of account shall at all reasonable
times be open to inspection by any director.
The chief financial officer shall (1) deposit corporate funds and other
valuables in the corporation's name and to its credit with depositaries
designated by the board of directors; (2) make disbursements of corporate funds
as authorized by the board; (3) render a statement of the corporation's
financial condition and an account of all transactions conducted as chief
financial officer whenever requested by the president or the board of directors;
and (4) have other powers and perform other duties as prescribed by the board of
directors or the bylaws.
Unless the board of directors has elected a separate treasurer, the
chief financial officer shall be deemed to be the treasurer for purposes of
giving any reports or executing any certificates or other documents.
Section 12. LIMITATION ON AUTHORITY OF OFFICERS TO BIND THE CORPORATION.
The authority of any officer to bind the corporation may be limited by
resolution duly passed by the board, without amendment to these bylaws.
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ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES, AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS, AND EXPENSES. For the purposes of this
Article, "agent" means any person who is or was a director, officer, employee,
or other agent of this corporation, or who is or was serving at the request of
this corporation as a director, officer, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust or other enterprise,
or who was a director, officer, employee, or agent of a foreign or domestic
corporation that was a predecessor corporation of this corporation or of another
enterprise at the request of such predecessor corporation; "proceeding" means
any threatened, pending, or completed action or proceeding, whether civil,
criminal, administrative, or investigative; and "expenses" includes, without
limitation, attorney fees and any expenses of establishing a right to
indemnification under Section 4 or Section 5(d) of this Article VI.
Section 2. ACTIONS OTHER THAN BY THE CORPORATION. This corporation shall
have the power to indemnify any person who was or is a party, or is threatened
to be made a party, to any proceeding (other than an action by or in the right
of this corporation to procure a judgment in its favor) by reason of the fact
that such person is or was an agent of this corporation, against expenses,
judgments, fines, settlements, and other mmounte actually and reasonably
incurred in connection with such proceeding i~ tha~ person aa~ed ~n good ~ai~h
and ~ a manne~ that the person reasonably believed to be in the best interests
of this corporation and, in the case of a criminal proceeding, had no reasonable
cause to believe the conduct of that person was unlawful. The termination of any
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent shall 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 this corporation or that the person had
reasonable cause to believe that the person's conduct was not unlawful.
Section 3. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. This
corporation shall have 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 this corporation to procure a judgment in its favor
by reason of the fact that such person is or was an agent of this corporation,
against expenses actually and reasonably incurred by such person in connection
with the defense or settlement of that action, if such person acted in good
faith, in a manner such person believed to be in the best interests of this
corporation and its
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shareholders. No indemnification shall be made under this Section 3 for the
following:
(a) With respect to any claim, issue, or matter as to which such
person has been adjudged to beliable to this corporation in the performance of
such person's duty to the corporation and its shareholders, unless and only to
the extent that the court in which such proceeding is or was pending shall
determine on application that, in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for expenses and then
only to the extent that the court shall determine;
(b) Amounts paid in settling or otherwise disposing of a pending
action without court approval; or
(c) Expenses incurred in defending a pending action that is settled or
otherwise disposed of without court approval.
Section 4. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of this
corporation has been successful on the merits in defense of any proceeding
referred to in Section 2 or 3 of this Article VI, or in defense of any claim,
issue, or matter therein, the agent shall be indemnified against expenses
actually and reasonably incurred by the agent in connection therewith.
Section 5. REQUIRED APPROVAL. Except as provided in Section 4 of this
Article VI, any indemnification under this Section shall be made by the
corporation only if authorized in the specific case, after a determination that
indemnification of the agent is proper in the circumstances because the agent
has met the applicable standard of conduct set forth in Section 2 or 3 by one of
the following:
(a) A majority vote of a quorum consisting of directors who are not
parties to such proceeding;
(b) Independent legal counsel in a written opinion if a quorum of
directors who are not parties to such a proceeding is not available;
(c) (i) The affirmative vote of a majority of shares of this
corporation entitled to vote represented at a duly held meeting at which a
quorum is present; or
(ii) the written consent of holders of a majority of the
outstanding shares entitled to vote (for purposes of this subsection 5(c), the
shares owned by the person to be indemnified shall not be considered outstanding
or entitled to vote thereon); or,
(d) The court in which the proceeding is or was
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trustee, investment manager, or other fiduciary of an employee benefit plan in
that person's capacity as such, even though that person may also be an agent of
the corporation. The corporation shall have the power to indemnify, and to
purchase and maintain insurance on behalf of any such trustee, investment
manager, or other fiduciary of any benefit plan for any or all of the directors,
officers, and employees of the corporation or any of its subsidiary or
affiliated corporations.
Section 11. SURVIVAL OF RIGHTS. The rights provided by this Article VI
shall continue for a person who has ceased to be an agent and shall inure to the
benefit of the heirs, executors, and administrators of such person.
Section 12. EFFECT OF AMENDMENT. Any amendment, repeal, or modification
of this Article VI shall not adversely affect an agent's right or protection
existing at the time of such amendment, repeal, or modification.
Section 13. SETTLEMENT OF CLAIMS. The corporation shall not be liable to
indemnify any agent under this Article VI for (a) any amounts paid in settlement
of any action or claim effected without the corporation's written consent, which
consent shall not be unreasonably withheld or (b) any judicial award, if the
corporation was not given a reasonable and timely opportunity to participate, at
its expense, in the defense of such action.
Section 14. SUBROGATION. In the event of payment under this Article VI,
the corporation shall be subrogated to the extent of auoh.payment to sll of the
rights of recovery of the agent, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents as may be necessary to enable the corporation
effectively to bring suit to enforce such rights.
Section 15. NO DUPLICATION OF PAYMENTS. The corporation shall not be
liable under this Article VI to make any payment in connection with any claim
made against the agent to the extent the agent has otherwise actually received
payment, whether under a policy of insurance, agreement, vote, or otherwise, of
the amounts otherwise indemnifiable under this Article.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE OF SHAREHOLDER RECORD AND INSPECTION BY
SHAREHOLDERS. The corporation shall keep at its principal executive office or
at the office of its transfer agent or registrar, as determined by resolution of
the board of directors, a record of the names and addresses of all shareholders
and the number and class of shares held by each shareholder.
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A shareholder or shareholders holding at least 5 percent in the aggregate
of the outstanding voting shares of the corporation have the right to do either
or both of the following:
(a) Inspect and copy the record of shareholders' names and addresses
and shareholdings during usual business hours, on five days' prior written
demand on the corporation, or
(b) Obtain from the corporation's transfer agent, on written demand
and tender of the transfer agent's usual charges for this service, a list of the
names and addresses of shareholders who are entitled to vote for the election of
directors, and their shareholdings, as of the most recent record date for which
a list has been compiled or as of a specified date later than the date of
demand. This list shall be made available within five days after (i) the date of
demand or (ii) the specified later date as of which the list is to be compiled.
The record of shareholders shall also be open to inspection on the written
demand of any shareholder or holder of a voting trust certificate, at any time
during usual business hours, for a purpose reasonably related to the holder's
interests as a shareholder or holder of a voting trust certificate. Any
inspection and copying under this section may be made in person or by an agent
or attorney of the shareholder or holder of a voting trust certificate making
the demand.
Section 2. MAINTENANCE AND INSPECTION OF BYLAWS. The corporation shall keep
at its principal executive office, or if its principal executive office is not
in the State of California, at its principal business office in this state, the
original or a copy of the bylaws as amended to date, which shall be open
to inspection by the shareholders at all reasonable times during office hours.
If the principal executive office of the corporation is outside the State
of California and the corporation has no principal business office in this
state, the secretary shall, on the written request of any shareholder, furnish
to that shareholder a copy of the bylaws as amended to date.
Section 3. MAINTENANCE AND INSPECTION OF MINUTES AND ACCOUNTING RECORDS.
The minutes of proceedings of the shareholders, board of directors, and
committees of the board, and the accounting books and records, shall be kept at
the principal executive office of the corporation, or at such other place or
places as designated by the board of directors. The minutes shall be kept in
written form, and the accounting books and records shall be kept either in
written form or in a form capable of being converted into written form. The
minutes and accounting books and records shall be open to inspection on the
written demand of any shareholder or holder of a voting trust certificate at any
reasonable time during usual business hours, for a purpose reasonably related to
the holder's interests as a
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shareholder or holder of a voting trust certificate. The inspection may be made
in person or by an agent or attorney, and shall include the right to copy and
make extracts. These rights of inspection shall extend to the records of each
subsidiary of the corporation.
Section 4. INSPECTION BY DIRECTORS. Every director shall have the
absolute right at any reasonable time to inspect all books, records, and
documents of every kind and the physical properties of the corporation and each
of its subsidiary corporations. This inspection by a director may be made in
person or by an agent or attorney and the right of inspection includes the right
to copy and make extracts of documents.
Section 5. ANNUAL REPORT TO SHAREHOLDERS.
(a) Inasmuch as, and for as long as, there are fewer than 100
shareholders, the requirement of an annual report to shareholders referred to in
section 1501 of the California Corporations Code is expressly waived. However,
nothing in this provision shall be interpreted as prohibiting the board of
directors from issuing annual or other periodic reports to the shareholders, as
the board considers appropriate.
(b) If at any time the number of shareholders shall exceed 100,
subsection (a) shall be deemed repealed, and the following provisions shall be
substituted:
The board of directors shall cause an annual report to be sent to the
shareholders not later than 120 days after the close of the fiscal year adopted
by the corporation. This report shall be sent at least 15 days (if third-class
mail is used, 35 days) before the annual meeting of shareholders to be held
during the next fiscal year and in the manner specified for giving notice to
shareholders in Section 5 of Article II of these bylaws. The annual report shall
contain a balance sheet as of the end of the fiscal year and an income statement
and a statement of changes in financial position for the fiscal year prepared in
accordance with generally accepted accounting principles applied on a consistent
basis and accompanied by any report of independent accountants, or, if there is
no such report, the certificate of an authorized officer of the corporation that
the statements were prepared without audit from the corporation's books and
records.
Section 6. FINANCIAL STATEMENTS. The corporation shall keep a copy of each
annual financial statement, quarterly or other periodic income statement,
and accompanying balance sheets prepared by the corporation on file in the
corporation's principal executive office for 12 months; these documents shall
be exhibited at all reasonable times, or copies provided, to any
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shareholder on demand.
If no annual report for the last f~scal year has been sent to shareholders,
on written request of ally shareholder made more than 120 days after the close
of the fiscal year the corporation shall deliver or mail to the shareholder,
within 30 days after receipt of the request, a balance sheet as of the end of
that fiscal year and an incomestatement and statement of changes in financial
position for that fiscal year.
A shareholder or shareholders holding 5 percent or more of the
outstanding shares of any class of stock of the corporation may requestin
writing an income statement for the most recent three-month, six-month, or
nine-month period (ending more than 30 days before the date of the request) of
the current fiscal year, and a balance sheet of the corporation as of the end of
that period. If suchdocuments are not already prepared, the chief financial
officer shall cause'them to be prepared and shall deliver the documents
personally or mail them to the requesting shareholders within 30 days after
receipt of the request. A balance sheet, income statement, and statement of
changes in financial position for the last fiscal year shall also be included,
unless the corporation has sent the shareholders an annual report for the last
fiscal year.
Quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of independent accountants
engaged by thecorporation or the certificate of an authorized corporate officer
stating that the financial statements were prepared without audit from the
corporation's books and records.
Section 7. ANNUAL STATEMENT OF GENERAL INFORMATION.
(a) Every year, during the calendar month in which the original articles
of incorporation were filed with the California Secretary of State, or during
the preceding five calendar months, the corporation shall file a statement with
the Secretary of State on the prescribed form, setting forth the authorized
number of directors; the names and complete business or residence addresses of
all incumbent directors; the names and complete business or residence addresses
of the chief executive officer, the secretary, and the chief financial officer;
the street address of the corporation's principal executive office or principal
business office in this state; a statement of the general type of business
constituting the principal business activity of the corporation; and a
designation of the agent of the corporation for the purpose of service of
process, all in compliance with section 1502 of the Corporations Code of
California.
(b) Notwithstanding the provisions of paragraph (a) of this 23
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section, if there has been no change in the information in the corporation's
last annual statement on file in the Secretary of State's office, the
corporation may, in lieu of filing the annual statement described in paragraph
(a) of this section, advise the Secretary of State, on the appropriate form,
that no changes in the required information have occurred during the applicable
period.
ARTICLE VIII
GENERAL CORPORATE MATTERS
Section 1. RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING. For
purposes of determining the shareholders entitled to receive payment of
dividends or other distributions or allotment of rights, or entitled to exercise
any rights in respect of any other lawful action (other than voting at and
receiving notice of shareholders' meetings and giving written consent of the
shareholders without a meeting), the board of directors may fix in advance a
record date, which shall be not more than 60 nor less than 10 days before the
date of the dividend payment, distribution, allotment, or other action. If a
record date is so fixed, only shareholders of record at the close of business on
that date shall be entitled to receive the dividend, distribution, or allotment
of rights, or to exercise the other rights, as the case may be, notwithstanding
any transfer of shares on the corporation's books after the record date, except
as otherwise provided by statute.
If the board of directors does not so fix a record date in advance, the
the record date shall be at the close of business on the later of (1) the day on
which the board of directors adopts the applicable resolution or (2) the 60th
day before the date of the dividend payment, distribution, allotment of rights,
or other action.
Section 2. AUTHORIZED SIGNATORIES FOR CHECKS. All checks, drafts, other
orders for payment of money, notes, or other evidences of indebtedness issued in
the name of or payable to the corporation shall be signed or endorsed by such
person or persons and in such manner authorized from time to time by resolution
of the board of directors.
Section 3. EXECUTING CORPORATE CONTRACTS AND INSTRUMENTS. Except as
otherwise provided in the articles or in these bylaws, the board of directors by
resolution may authorize any officer, officers, agent, or agents to enter into
any contract or to execute any instrument in the name of and on behalf of the
corporation. This authority may be general or it may be confined to one or more
specific matters. No officer, agent, employee, or other person purporting to act
on behalf of the corporation shall have any power or authority to bind the
corporation in any way, to pledge the corporation's credit, or to render the
corporation
24
<PAGE>
liable for any purpose or in any amount, unless that person was acting with
authority duly granted by the board of directors as provided in these bylaws, or
unless an unauthorized act was later ratified by the corporation.
Section 4. CERTIFICATES FOR SHARES. A certificate or certificates for
shares of the capital stock of the corporation shall be issued to each
shareholder when any of the shares are fully paid. In addition to certificates
for fully paid shares, the board of directors may authorize the issuance of
certificates for shares that are partly paid and subject to call for the
remainder of the purchase price, provided that the certificates representing
partly paid shares shall state the total amount of the consideration to be paid
for the shares and the amount actually paid.
All certificates shall Certify the number of shares and the class or
series of shares represented by the certificate. All certificates shall be
signed in the name of the corporation by (1) either the chair of the board of
directors, the vice chair of the board of directors, the president, or any vice
president, and (2) either the chief financial officer, any assistant treasurer,
the secretary, or any assistant secretary.
None of the signatures on the certificate may be facsimile. If any
officer, transfer, agent, or registrar who has signed a certificate shall have
ceased to be that officer, transfer agent, or registrar before that certificate
is issued, the certificate may be issued by the corporation with the same effect
as if that person were an officer, transfer agent, or registrar at the date of
issue.
Section 5. LOST CERTIFICATES. Except as provided in this Section 5, no
new certificates for shares shall be issued to replace old certificates unless
the old certificate is surrendered to the corporation for cancellation at the
same time. If share certificates or certificates for any other security have
been lost, stolen, or destroyed, the board of directors may authorize the
issuance of replacement certificates on terms and conditions as required by the
board, which may include a requirement that the owner give the corporation a
bond (or other adequate security) sufficient to indemnify the corporation
against any claim that may be made against it (including any expense or
liability) on account of the alleged loss, theft, or destruction of the old
certificate or the issuance of the replacement certificate.
Section 6. SHARES OF OTHER CORPORATIONS: HOW VOTED. Shares of other
corporations standing in the name of this corporation shall be voted by one of
the following persons, listed in order of preference: (1) chair of the board, or
person designated by the chair of the board; (2) president, or person designated
by
25
<PAGE>
the president; (3) first vice president, or person designated by the first vice
president; (4) other person designated by the board of directors.
The authority to vote shares granted by this section includes the authority
to execute a proxy in the name of the corporation for purposes of voting the
shares.
Section 7. REIMBURSEMENT OF CORPORATION IF PAYMENT NOT TAX DEDUCTIBLE. If
all or part of the compensation, including expenses, paid by the corporation to
a director, officer, employee, or agent is finally determined not to be
allowable to the corporation as a federal or state income tax deduction, the
director, officer, employee, or agent to whom the payment was made shall repay
to the corporation the amount disallowed. The board of directors shall enforce
repayment of each such amount disallowed by the taxing authorities.
Section 8. CONSTRUCTION AND DEFINITIONS. Unless the context requires
otherwise, the general provisions, rules of construction, and definitions in
sections 100 through 195 of the California Corporations Code shall govern the
construction of these bylaws. Without limiting the generality of this provision,
the singular number includes the plural, the plural number includes the
singular, and the term "person" includes both a corporation and a natural
person.
ARTICLE IX
AMENDMENTS
Section 1. AMENDMENT BY SHAREHOLDERS. New bylaws may be adopted or these
bylaws may be amended or repealed by the vote or written consent of holders of a
majority of the outstanding shares entitled to vote; provided, however, that if
the Articles of Incorporation of the corporation set forth the number of
authorized Directors of the corporation, the authorized number of Directors may
be changed only by an amendment of the Articles of Incorporation.
Section 2. AMENDMENT BY BOARD OF DIRECTORS. Subject to the right of the
Shareholders to adopt, amend or repeal bylaws, as provided in Section 1 of this
Article IX, and the limitations of sections 204 (a) (5) and 212, of the
California Corporations Code, the Board of Directors may adopt, amend or repeal
any of these bylaws other than a bylaw or amendment thereof changing the
authorized number of Directors.
Section 3. RECORD OF AMENDMENTS. Whenever an amendment or new bylaw is
adopted, it shall be copied in the book of bylaws with the original bylaws,
in the appropriate place. If any bylaw is repealed, the fact of repeal with the
date of the meeting at which the repeal was enacted or written assent was filed
shall be
26
<PAGE>
stated in said book.
ARTICLE X
MISCELLANEOUS
Section 1. REPRESENTATION OF SHARES IN OTHER CORPORATIONS. Shares of other
corporations standing in the name of this corporation may be voted or
represented and all incidents theret(degree) may be exercised on behalf of the
corporation by the Chair of the Board, the President or any Vice President and
the Secretary or an Assistant Secretary.
Section 2. SUBSIDIARY CORPORATIONS. Shares of this corporation owned by a
subsidiary shall not be entitled to vote on any matter. A subsidiary for these
purposes is defined in section 189 (b) of the California Corporations Code.
Section 3. ACCOUNTING YEAR. The accounting year of the Corporation shall be
fixed by resolution of the Board of Directors.
27
<PAGE>
CERTIFICATE OF ADOPTION OF BYLAWS
THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of the above
named corporation and that the above and foregoing bylaws was submitted to the
Shareholders at their first meeting and recorded in the minutes thereof, was
ratified by the vote of Shareholders entitled to exercise the majority of the
voting power of said corporation.
WITNESS WHEREOF, I have hereunto set my hand this ____ day of
______________, _____
28
AGREEMENT OF MERGER
This Agreement of Merger (the "Agreement") is made and entered into as
of January 26, 2000 by and among:
STARFEST, Inc., a California corporation ("STARFEST"); and
CONCIERGE, Inc., a Nevada corporation ("CONCIERGE").
RECITALS
--------
WHEREAS, STARFEST's common stock, no par value per share (the "Common
Stock"), is currently traded on the OTC Bulletin Board; and
WHEREAS, STARFEST currently operates an Internet entertainment business;
and
WHEREAS, the parties hereto wish to reorganize STARFEST by merging
CONCIERGE into STARFEST, with STARFEST being the surviving corporation of the
merger; and
WHEREAS, as part of the reorganization, STARFEST wishes to sell its
Internet entertainment business to a third party in order that the sole business
of STARFEST after the merger will be the business of CONCIERGE.
NOW, THEREFORE, in consideration of the following representations,
promises and undertakings, the parties hereto hereby agree as follows:
1. STARFEST merger with CONCIERGE. Promptly after the execution of
--------------------------------
this Agreement, the officers and directors of each of STARFEST and CONCIERGE
shall cause all corporate actions to occur, including without limitation the
holding of any required special meeting of the shareholders of each of STARFEST
and CONCIERGE, that are required to approve:
(a) The merger of STARFEST with CONCIERGE, STARFEST to be the
surviving corporation, with the stockholders of CONCIERGE
receiving a total of 78 million shares of Common Stock of
STARFEST in the merger and the stockholders of STARFEST
retaining their presently issued 23 million shares of
Common Stock of STARFEST;
(b) The change of name of the post-merger company to
"CONCIERGE TECHNOLOGIES, INC."
<PAGE>
(c) The change of management of the post-merger company to
that of the directors and officers of CONCIERGE
immediately before the effectiveness of the merger;
(d) An increase in the authorized capital of the post-merger
corporation to 190 million shares of Common Stock, $0.001
a share, and 10 million shares of Preferred Stock, par
value $0.001 a share;
(e) The authorization of the directors of the post-merger
corporation to issue no more than 9 million shares of
Common Stock (or common stock equivalents or derivatives)
to raise the necessary capital to commence its business
and to attract additional members of management; and
2. Representations by STARFEST. STARFEST represents as follows:
---------------------------
2.1 STARFEST is a corporation duly organized, validly existing
and in good standing under the laws of the State of California and is authorized
to transact its business and is in good standing in each state in which its
ownership of assets or conduct of business requires such qualifications.
2.2 Subject to shareholder approval of the transactions
contemplated by this Agreement, STARFEST has the right, power, legal capacity
and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement and the documents, instruments and certificates
to be executed and delivered by it pursuant to this Agreement. The execution and
delivery of and performance of the obligations contained in this Agreement by
STARFEST and all documents, instruments and certificates made or delivered by
STARFEST pursuant to this Agreement, and the transactions contemplated hereby,
have been or as of the Closing will be, duly authorized by all necessary action
on the part of STARFEST.
2.3 Subject to shareholder approval of the transactions
contemplated by this Agreement, the terms and provisions of this Agreement and
all documents, instruments and certificates made or delivered from time to time
by STARFEST hereunder and thereunder shall constitute valid and legally binding
obligations of STARFEST, enforceable against STARFEST in accordance with the
terms hereof and thereof.
2.4 The execution of this Agreement by STARFEST does not require
any consent of, notice to or action by any person or governmental authority,
other than as provided in Exhibit 2.4 hereto. The performance of this Agreement
by STARFEST and the consummation by STARFEST of the transactions contemplated
hereby will not require any consent of, notice to or action by any person or
governmental authority, other than as provided in Exhibit 2.4 hereto.
2.5 The making and performance of this Agreement by STARFEST and
the consummation of the transactions contemplated hereby will not result in a
breach or violation by STARFEST of any of the terms or provisions of, or
constitute a default under, its Articles of Incorporation, its Bylaws, any
<PAGE>
indenture, mortgage, deed of trust (constructive or other), loan agreement,
lease, franchise, license or other agreement or instrument to which STARFEST is
bound, any statute, or any judgment, decree, order, rule or regulation of any
court or governmental agency or body applicable to STARFEST or any of the
properties of STARFEST.
2.6 Attached hereto as Exhibit 2.6 are financial statements of
STARFEST for the annual periods ended December 31, 1998 and December 31, 1999
and as of December 31, 1998 and as of December 31, 1999, which have been audited
in accordance with GAAP. These financial statements present fairly the financial
condition and results of operations of its business, in accordance with
generally accepted accounting principles as of the dates thereof and the periods
covered thereby.
2.7 As of the date hereof, the executive officers and directors of STARFEST are
Michael Huemmer and Janet Alexander.
2.8 STARFEST has authorized capital of 65 million shares of
Common Stock, no par value. Of these shares, 23 million are issued and
outstanding. Except as described in Exhibit 2.8 hereto, there are no existing
agreements, options, warrants, rights, calls or commitments of any kind
providing for the issuance of any shares, or for the repurchase or redemption of
shares, of STARFEST's capital stock, and there are no outstanding securities or
other instruments convertible into or exchangeable for shares of such capital
stock and no commitments to issue such securities or instruments. Each person
that has such a right shall surrender it to Starfest for no consideration other
than that of promoting the Closing of the transaction described in this
Agreement. All of the outstanding shares of STARFEST common stock have been duly
authorized and validly issued and are fully paid and nonassessable. None of the
outstanding shares of STARFEST common stock were issued in violation of the
Securities Act or any state securities laws.
2.9 Attached hereto as Exhibit 2.9 is a true and correct list of
all known material liabilities of STARFEST, contingent or matured, as of
December 31, 2000, which are not reflected on the balance sheet dated as of
December 31, 1999 and which arose in the ordinary course of business.
2.10 There is no claim for personal injury, products liability,
property or other damages, grievance, action, proceeding or governmental
investigation pending or, to STARFEST's knowledge, threatened against STARFEST
or affecting its assets or business, other than as listed on Exhibit 2.10
hereto.
<PAGE>
2.11 STARFEST has filed, or will have filed prior to Closing, all
income, franchise, real property, personal property, sales, employment and other
tax returns required to be filed by any taxing authority and has paid or accrued
all taxes required to be paid by it in respect to the periods covered by such
returns, whether or not shown on such returns, and STARFEST has no liability for
such taxes in excess of the amounts so paid. A true and complete copy of all
federal income tax returns for the tax year ended December 31, 1998 as filed
with the Internal Revenue Service has been delivered to CONCIERGE, together with
all supporting schedules thereto. STARFEST is not delinquent in the payment of
any tax, assessment or governmental charge, has not requested any extension of
time within which to file any tax returns which have not since been filed, and
no deficiencies for any tax, assessment or governmental charge have been
claimed, proposed or assessed by any taxing authority. STARFEST's federal income
tax return has not been audited. As used herein, the term "tax" includes all
governmental taxes and related governmental charges imposed by the laws and
regulations of any governmental jurisdiction.
2.12 STARFEST's business, properties, plant and offices do not
exist or operate in violation of any federal, state or local code, law,
regulation or ordinance regulating zoning, city planning, fire safety,
environmental protection or similar matters. All permits, licenses, franchises,
consents and other authorizations necessary for the conduct of STARFEST's
business have been timely obtained and are currently in effect. STARFEST is not
in violation of any term or provision of any such permit, license, franchise,
consent or other authorization.
2.13 Except as described on Schedule 2.13, STARFEST is not a
party as of the date hereof to any written or oral (i) bonus, pension, insurance
or other plan providing employee benefits, (ii) contract, or series of related
contracts with any one vendor or customer, for purchase, sale or exchange made
in the ordinary course of business and in an amount in excess of $1,000, (iii)
contract not made in the ordinary course of business, (iv) franchise, licensing
or manufacturer's representative agreement, (v) contract with any shareholder of
STARFEST or an affiliate of any shareholder of STARFEST within the meaning of
the federal securities laws, or (vi) any contract for borrowed money either as
borrower or lender. All agreements listed on Schedule 2.13, to the extent that
the same give rights to STARFEST, are enforceable by STARFEST, and STARFEST has
not received notice of any claim to the contrary. Complete and correct copies of
all items listed in Schedule 2.13 have been delivered to CONCIERGE prior to the
execution of this Agreement.
Except as listed in Schedule 2.13, all parties other than
STARFEST obligated under the agreements listed on Schedule 2.13 are in
compliance in all material respects with the terms thereof and there has been no
notice of default or termination with respect to any such agreement that has not
been cured or waived in writing.
2.14 No employee pension benefit plan within the meaning of
Section 3(a) of the Employment Retirement Income Security Act of 1994, as
amended ("ERISA"), has been maintained or sponsored by STARFEST or exists to
which STARFEST has contributed since its formation or is obligated to contribute
for the benefit of its employees. Neither STARFEST nor any corporation or other
entity affiliated with STARFEST contributes to, is obligated to contribute to,
or has during the last five years contributed to or been obligated to contribute
to, and none of STARFEST's employees are participants in, any multi-employer
plan within the meaning of Section 4001(a) of ERISA.
<PAGE>
2.15 Since its formation, STARFEST has not infringed any patents,
trademarks, service marks or trade names registered to or used by it in its
business, nor has STARFEST claimed any such infringement.
2.16 The Company is not a party to or bound by any collective
bargaining agreement or any other agreement with a labor union.
2.17 All of the unrestricted outstanding shares were issued pursuant to the
exemption from registration provided by Regulation D, Rule 504. No legend or
other reference to any purported lien or encumbrance appears upon any
certificate representing the unrestricted shares.
2.18 STARFEST has not made any material misstatement of fact or
omitted to state any material fact necessary or desirable to make complete,
accurate and not misleading every representation and warranty set forth herein.
3. Representations of CONCIERGE. CONCIERGE represents as follows:
3.1 CONCIERGE is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada and is authorized to
transact its business and is in good standing in each state in which its
ownership of assets or conduct of business requires such qualifications.
CONCIERGE is engaged in the business of designing, developing, manufacturing and
marketing computer telephony technology devices.
3.2 The authorized capital stock of CONCIERGE consists of 10
million shares of common stock, $0.01 par value, of which 895,276 shares are
issued and outstanding (the "CONCIERGE Shares. All of the CONCIERGE Shares have
been duly authorized and are validly issued, fully paid and non-assessable.
Except for the obligations set forth on Exhibit 3.2 attached hereto, there are
no existing agreements, options, warrants, rights, calls or commitments of any
kind to which CONCIERGE is a party or it is bound providing for the issuance of
any shares, or for the repurchase or redemption of shares, of CONCIERGE's
capital stock, and there are no outstanding securities or other instruments
convertible into or exchangeable for shares of such capital stock and no
commitments to issue such securities or instruments. None of the CONCIERGE
Shares were issued in violation of the Securities Act or any state securities
laws.
3.3 CONCIERGE has the right, power, legal capacity and authority
to execute and deliver this Agreement and to perform its obligations under this
Agreement, and the documents, instruments and certificates to be executed and
delivered by CONCIERGE pursuant to this Agreement. The execution and delivery of
and performance of the obligations contained in this Agreement by CONCIERGE and
all documents, instruments and certificates made or delivered by CONCIERGE
pursuant to this Agreement, and the transactions contemplated hereby, have been
or as of the Closing Date will be duly authorized by all necessary action on the
part of the CONCIERGE shareholders and CONCIERGE.
<PAGE>
3.4 The terms and provisions of this Agreement and all documents,
instruments and certificates made or delivered from time to time by CONCIERGE
hereunder and thereunder constitute valid and legally binding obligations of
CONCIERGE, enforceable against CONCIERGE in accordance with the terms hereof and
thereof.
3.5 The execution and delivery of this Agreement by CONCIERGE do
not require any consent of, notice to or action by any person or governmental
authority, which consent, notice or action has not been made, given or otherwise
accomplished, and satisfactory evidence thereof has been delivered to Starfest.
The performance of this Agreement by CONCIERGE and the consummation by CONCIERGE
of the transactions contemplated hereby will not require any consent of, notice
to or action by any person or governmental authority.
3.6 The making and performance of this Agreement by CONCIERGE and
the consummation of the transactions contemplated hereby will not result in a
breach or violation by CONCIERGE of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust (constructive
or other), loan agreement, lease, franchise, license or other agreement or
instrument to which CONCIERGE is bound, any statute, or any judgment, decree,
order, rule or regulation of any court or governmental agency or body applicable
to CONCIERGE or any of the properties of CONCIERGE.
3.7 Attached hereto as Exhibit 3.7 are unaudited financial
statements of CONCIERGE from its inception through December 31, 1999. These
financial statements present fairly the financial condition and results of
operations of its business, in accordance with generally accepted accounting
principles, except for those adjustments that would be required for audited
financial statements.
3.8 As of the date hereof, the executive officers and
directors of CONCIERGE are Allen E. Kahn, James E. Kirk and G. Robert Knauss.
3.9 Attached as Exhibit 3.9 is a true and correct list of all
material liabilities of CONCIERGE, contingent or matured, which are not
reflected on the balance sheet dated as of December 31, 1999 and which arose in
the ordinary course of business.
3.10 There is no claim for personal injury, products liability,
property or other damages, grievance, action, proceeding or governmental
investigation pending, or to CONCIERGE's knowledge, threatened against CONCIERGE
or affecting its assets or business, other than as listed on Exhibit 3.10
hereto.
3.11 CONCIERGE has not made any material misstatement of fact or
omitted to state any material fact necessary or desirable to make complete,
accurate and not misleading every representation, warranty and agreement set
forth herein.
<PAGE>
3.12 CONCIERGE has filed, or will have filed prior to Closing,
all income, franchise, real property, personal property, sales, employment and
other tax returns required to be filed by any taxing authority and has paid or
accrued all taxes required to be paid by it in respect to the periods covered by
such returns, whether or not shown on such returns, and CONCIERGE has no
liability for such taxes in excess of the amounts so paid. CONCIERGE is not
delinquent in the payment of any tax, assessment or governmental charge, has not
requested any extension of time within which to file any tax returns which have
not since been filed, and no deficiencies for any tax, assessment or
governmental charge have been claimed, proposed or assessed by any taxing
authority. As used herein, the term "tax" includes all governmental taxes and
related governmental charges imposed by the laws and regulations of any
governmental jurisdiction.
3.13 CONCIERGE's business, properties, plant and offices do not
exist or operate in violation of any federal, state or local code, law,
regulation or ordinance regulating zoning, city planning, fire safety,
environmental protection or similar matters. All permits, licenses, franchises,
consents and other authorizations necessary for the conduct of CONCIERGE's
business have been timely obtained and are currently in effect. CONCIERGE is not
in violation of any term or provision of any such permit, license, franchise,
consent or other authorization.
3.14 Except as described on Schedule 3.14, CONCIERGE is not a
party as of the date hereof to any written or oral (i) bonus, pension, insurance
or other plan providing employee benefits, (ii) contract, or series of related
contracts with any one vendor or customer, for purchase, sale or exchange made
in the ordinary course of business and in an amount in excess of $1,000, (iii)
contract not made in the ordinary course of business, (iv) franchise, licensing
or manufacturer's representative agreement, (v) contract with any shareholder of
CONCIERGE or an affiliate of any shareholder of CONCIERGE within the meaning of
the federal securities laws, or (vi) any contract for borrowed money either as
borrower or lender. All agreements listed on Schedule 3.14, to the extent that
the same give rights to CONCIERGE, are enforceable by CONCIERGE, and CONCIERGE
has not received notice of any claim to the contrary. Complete and correct
copies of all items listed in Schedule 3.14 have been delivered to Starfest
prior to the execution of this Agreement.
Except as listed in Schedule 3.14, all parties other than
CONCIERGE obligated under the agreements listed on Schedule 3.14 are in
compliance in all material respects with the terms thereof and there has been no
notice of default or termination with respect to any such agreement that has not
been cured or waived in writing.
3.15 No employee pension benefit plan within the meaning of
Section 3(a) of the Employment Retirement Income Security Act of 1994, as
amended ("ERISA"), has been maintained or sponsored by CONCIERGE or exists to
which CONCIERGE has contributed since its formation or is obligated to
contribute for the benefit of its employees. Neither CONCIERGE nor any
corporation or other entity affiliated with CONCIERGE contributes to, is
obligated to contribute to, or has during the last five years contributed to or
been obligated to contribute to, and none of CONCIERGE's employees are
participants in, any multi-employer plan within the meaning of Section 4001(a)
of ERISA.
<PAGE>
3.16 Since its formation, CONCIERGE has not infringed any
patents, trademarks, service marks or trade names registered to or used by it in
its business, nor has CONCIERGE claimed any such infringement.
3.17 CONCIERGE is not a party to or bound by any collective
bargaining agreement or any other agreement with a labor union.
4. Confidentiality. From the Closing Date and for a period of five
---------------
years thereafter, each of the partie hereto covenants that it will not use for
the benefit of any of them or disclose to another any Confidential Information
(as hereafter defined) except as such disclosure or use may be consented to in
advance by the party which had supplied the information in a writing which
specifically refers to this covenant. Confidential Information as used herein
means information of commercial value to the supplying party and that is not
normally made public by the supplying party, including but not limited to the
whole or any part of any scientific or technical information, design, process,
procedure, formula, or improvement, trade secret, data, invention, discovery,
technique, marketing plan, strategy, forecast, customer or supplier lists,
business plan or financial information.
5. Conditions Precedent to STARFEST's Obligations.
----------------------------------------------
5.1 Conditions Precedent. The obligations of STARFEST to
consummate the transactions contemplated herein are subject to the satisfaction
(unless waived in writing), on or before the Closing Date, of the following
conditions:
(a) CONCIERGE shall have materially performed and
complied with all covenants, conditions and obligations required by this
Agreement to be performed or complied with by CONCIERGE on or before the
Closing Date.
(b) All representations and warranties of CONCIERGE
contained in this Agreement, the Exhibits, and in any document, instrument or
certificate that shall be delivered by CONCIERGE under this Agreement shall be
materially true, correct and complete on and as though made on the Second
Closing Date.
(c) During the period from the date of this Agreement
through and including the Closing Date: (i) there shall not have occurred
any material adverse change affecting CONCIERGE; (ii) CONCIERGE shall not have
sustained any loss or damage that materially affects its ability to conduct
its business; (iii) the performance by CONCIERGE shall not have been rendered,
by a change in circumstances or actions by third parties (including, without
limitation, a change in any law or actions by a governmental authority),
impossible, illegal, commercially impracticable or capable of accomplishment
only on terms and conditions which require STARFEST to incur substantially
greater costs or burdens than STARFEST reasonably anticipated on the date of
this Agreement.
<PAGE>
(d) As of the Closing Date, no action or proceeding
against any of the parties hereto shall be before any court or governmental
agency seeking to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the transactions contemplated hereby and
which, in the judgment of Starfest, makes the consummation of the transactions
contemplated by this Agreement inadvisable.
(e) CONCIERGE shall have tendered to STARFEST all
documents, certificates, payments and other items required by this Agreement
hereof to be delivered to STARFEST.
(f) A majority of the STARFEST Shareholders shall have
approved of the transactions contemplated by this Agreement.
(g) CONCIERGE shall have received any consents
necessary to perform their obligations under this Agreement.
(h) STARFEST shall have received any and all permits,
authorizations, approvals and orders under federal and state securities laws
for the issuance of STARFEST's Common Stock, without the imposition of any
conditions adverse to STARFEST.
THE SALES OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT
BEEN QUALIFIED WITH THE COMMISSIONERS OF CORPORATIONS OF THE STATES OF NEVADA OR
CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION THEREFORE PRIOR TO SUCH QUALIFICATION IS UNLAWFUL
UNLESS THE SALE OF SUCH SECURITIES IS EXEMPT FROM QUALIFICATION UNDER THE LAWS
OF THOSE STATES. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.
6. Conditions Precedent to CONCIERGE's Obligations.
-----------------------------------------------
The obligation of CONCIERGE to consummate the transactions
contemplated herein are subject to the satisfaction (unless waived in writing),
on or before the Closing Date, of the following conditions:
(a) STARFEST shall have materially performed and
complied with all covenants, conditions and obligations required by this
Agreement to be performed or complied with by STARFEST on or before the
Closing Date.
(b) All representations and warranties of STARFEST
contained in this Agreement, the Exhibits, and in any document, instrument or
certificate that shall be delivered by STARFEST under this Agreement shall
be materially true, correct and complete on and as though made on the Closing
Date.
(c) During the period from the date of this Agreement
through and including the Closing Date: (i) there shall not have occurred
<PAGE>
any material adverse change affecting STARFEST; (ii) STARFEST shall not have
sustained any loss or damage that materially affects its ability to conduct
its business; (iii) the performance by STARFEST shall not have been rendered,
by a change in circumstances or actions by third parties (including, without
limitation, a change in any law or actions by a governmental authority),
impossible, illegal, commercially impracticable or capable of accomplishment on
terms and conditions which require CONCIERGE to incur substantially greater
costs or burdens than CONCIERGE reasonably anticipated on the date of this
Agreement.
(d) As of the Closing Date, no action or proceeding
against any of the parties hereto shall be before any court or governmental
agency seeking to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the transactions contemplated hereby and
which, in the judgment of CONCIERGE, makes the consummation of the transactions
contemplated by this Agreement inadvisable.
(e) STARFEST shall have tendered to CONCIERGE all
documents, certificates, and other items required by this Agreement hereof to
be delivered to CONCIERGE.
(f) STARFEST shall have received any consents necessary
to perform their obligations under this Agreement.
7. Closing.
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7.1 The closing of the transaction contemplated by this Agreement
(the "Closing") shall take place at such time and at such place as the parties
shall mutually agree no later than April 15, 2000 (the "Closing Date") unless
such date is extended by written agreement of STARFEST and CONCIERGE and shall
be effected in accordance with the following:
(a) CONCIERGE shall deliver to STARFEST, and STARFEST
shall deliver to CONCIERGE, good standing certificates from the secretary of
state of any state where the ownership of its assets or the conduct of its
business would require such qualification, attesting to the good standing of
CONCIERGE or, as the case may be, STARFEST, in each such state.
(b) There shall be delivered all other previously
rendered documents, instruments and other writings required to be delivered by
CONCIERGE to STARFEST or STARFEST to CONCIERGE, as the case may be, at or prior
to the Closing pursuant to this Agreement or otherwise legally required or
reasonably necessary in connection herewith.
<PAGE>
(c) STARFEST shall deliver to CONCIERGE the
certificate of its corporate Secretary certifying that the necessary corporate
action of STARFEST's directors and stockholders has taken place to approve the
merger contemplated by this Agreement, and CONCIERGE shall deliver to STARFEST
the certificate of its corporate Secretary certifying that the necessary
corporate action of CONCIERGE's directors and stockholders has taken place
to approve the merger contemplated by this Agreement.
(d) STARFEST shall provide the documents needed to be
filed with the Secretaries of State of Nevada and California to effect the
merger, and the officers of each of STARFEST and CONCIERGE shall execute the
documents and deliver them to such Secretaries of State for filing.
(e) CONCIERGE shall deliver to STARFEST a list of its
stockholders, certified by its Secretary, setting forth the number of shares of
CONCIERGE common stock owned by each such stockholder and the number of shares
each such stockholder is to receive in the merger. STARFEST shall send the list
to its transfer agent and stock registrar with instructions to issue the
78 million shares to the CONCIERGE stockholders in accordance with the list.
The certificates that will represent such 78 million shares of Common Stock of
the post-merger company will not bear a legend restricting the transferability
of the shares.
8. Termination. This Agreement may be terminated prior to the
Closing by delivery of notice in writing to that effect as follows:
8.1 By CONCIERGE, if any one or more of the conditions to the
obligations CONCIERGE to close has not been fulfilled as of the Closing Date;
8.2 By STARFEST, if any one or more of the conditions to its
obligations to close have not been fulfilled as of the Closing Date.
8.3 At any time on or prior to the Closing Date by mutual
written consent of the parties hereto.
If this Agreement so terminates, it shall become null and void and have no
further force or effect.
9. Survival and Indemnification.
9.1 The representations, warranties and covenants of the
parties made in this Agreement shall survive the Closing for a period of two
years after the Closing Date. Each party shall indemnify and hold harmless the
other parties from and against any loss, liability, damage, cost or expense
(including reasonable ttorneys' and accountants' fees) which shall arise out
of or is connected with any breach of any representation or warranty made or
covenant to be performed by the party or parties against whom indemnification
is sought; provided, however, that no claims may be asserted against any party
until and unless the aggregate of all claims against such party exceeds $10,000
and the maximum aggregate amount of the obligations of any individual party to
provide indemnification under this Agreement shall not exceed $200,000.
<PAGE>
9.2 Upon the assertion by a third party against one of the
parties to this Agreement of a claim to which the indemnification provisions of
this Section apply, the party against whom the claim has been asserted shall
promptly notify the other party to this Agreement against whom a claim for
indemnification is expected to be made of such claim (and such notice shall be a
condition precedent to the liability of the parties or party so notified with
respect to such claim). Any party so notified shall have the right, at its own
expense and with counsel of its choice, to control the defense of any such claim
and all actions and proceedings in connection therewith, provided that any party
seeking indemnification shall have the right to participate in such defense with
counsel of its choice at its own expense. No such claim shall be compromised or
settled by any party to this Agreement without the prior written consent of the
other party. Each other party shall cooperate in every reasonable way with the
party assuming responsibility for the defense and disposition of such claim.
10. Post-Closing Covenants. CONCIERGE covenants that after the
Closing:
10.1 The post-merger company will exert all reasonable effort
and take all reasonable actions required to register its Common Stock with the
SEC on SEC Form 10-SB and to maintain its status as a company whose Common
Stock is quoted on the OTC Bulletin Board or shall change its status to a
company whose Common Stock is listed on The Nasdaq Stock Market.
10.2 The post-merger company shall not reverse split its stock
for a period of at least two years from the date hereof without the written
consent of Gary Bryant of Indian Wells, California..
10.3 For a period of one year, without the written consent of
Michael Huemmer the post-merger company will not issue or reserve for issuance
more than 9 million shares of its Common Stock for the purposes of attracting
qualified management and officers and of obtaining sufficient capital to
commence its business in a viable manner.
11. This Agreement shall be governed and construed in accordance with
the laws of the State of Nevada without application of Nevada's conflicts of
laws provision.
12. Execution in Counterparts. This Agreement and any of the
---------------------------
documents described herein that are necessary for Closing may be executed in
counterparts, each of which shall be deemed an original and together which shall
constitute one and the same instrument.
13. Further Assurances. If, at any time before, on or after either
-------------------
Closing Date, any further action by any of the parties to this Agreement is
necessary or desirable to carry out the purposes of this Agreement, such party
shall take all such necessary or desirable action or use such party's best
efforts to cause such action to be taken.
14. Expenses. CONCIERGE shall bear all expenses incurred by it in
--------
connection with the negotiation, preparation or execution of this Agreement, and
STARFEST shall bear all expenses incurred by it in connection with the
negotiation, preparation or execution of this Agreement.
<PAGE>
15. Judicial Proceedings. Each party hereto consents to the exclusive
--------------------
jurisdiction over it of the courts of the State of Nevada in the County of
Hamilton and of the courts of the United States in the Southern District of
Nevada and agrees that personal service of all process may be made by registered
or certified mail pursuant to the provisions of Section 19. All actions arising
out of or relating in any way to any of the provisions of this Agreement or the
transactions contemplated hereby shall be brought or maintained only in one of
such courts. The parties hereby irrevocably waive any objection that they may
now have or hereafter acquire to the laying of venue of any such action or
proceeding brought in such courts and any claim that any action or proceeding
brought in any such court has been brought in an inconvenient forum. The parties
further agree that a final judgment in any such action or proceeding brought in
any such court, after all appeals or all rights of appeal have expired, shall be
conclusive and binding upon them and may be enforced in any competent court
located elsewhere.
16. Notices. Any notice or demand desired or required to be given
-------
hereunder shall be in writing and deemed given when personally delivered, sent
by overnight courier or deposited in the mail (postage prepaid, certified or
registered, return receipt requested) and addressed as set forth below or to
such other address as any party shall have previously designated by such a
notice. Any notice delivered personally shall be deemed to be received on the
date of personal delivery; any notice sent by overnight courier shall be deemed
to be received upon confirmation one business day after the date sent; and any
notice mailed shall be deemed to be received on the date stamped on the receipt.
If to CONCIERGE Allen E. Kahn, Chief Executive Officer
Concierge, Inc.
7547 West Manchester Ave., No. 325
Los Angeles, CA 90045
Copy to: James E. Kirk, Esq.
11927 Menaul, N.E.
Albuquerque, NM 87112
If to STARFEST Michael Huemmer, President
Starfest, Inc.
9494 E. Redfield Road, #1136
Scottsdale, AZ 85260
Copy to: Thomas J.Kenan
Fuller, Tubb, Pomeroy & Stokes
201 Robert S. Kerr Ave., Suite 1000
Oklahoma City, OK 73102
<PAGE>
17. Parties in Interest. All of the terms and provisions of this
---------------------
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto, whether herein
so expressed or not.
18. Severability. Any provision of this Agreement that 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 provisions of this Agreement or affecting the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
19. Amendment. Except as otherwise provided herein, the parties hereto
---------
may modify or supplement this Agreement at any time, but only in writing duly
executed by each of the parties hereto.
20. Headings. The headings preceding the text of sections of this
--------
Agreement are for convenience only and shall not be deemed a part hereof.
21. Entire Understanding. The terms set forth in this Agreement
--------------------
including its Exhibits are intended by the parties as the final, complete and
exclusive expression of the terms of their agreement and may not be
contradicted, explained or supplemented by evidence of any prior agreement, any
contemporaneous oral agreement or any consistent additional terms. The Exhibits
attached to this Agreement are made a part of this Agreement.
22. Confidentiality. The parties hereto shall not make any public
---------------
announcement regarding the transactions contemplated by this Agreement without
the prior written consent of CONCIERGE and STARFEST, which consent shall not be
unreasonably withheld, conditioned or delayed. The parties hereto will issue a
press release regarding the transactions contemplated by this Agreement upon the
execution of this Agreement. Each of the parties hereto shall keep strictly
confidential any and all information furnished to it or its agents or
representatives in the course of negotiations relating to this Agreement or any
transactions contemplated by this Agreement, and such parties have instructed
their representative officers, partners, employees and other representatives
having access to such information of such obligation of confidentiality. .
<PAGE>
IN WITNESS WHEREOF, the parties hereto have entered into and signed this
Agreement as of the date and year first above written.
STARFEST, INC. CONCIERGE, INC.
By: /s/ Michael Huemmer By: /s/ Allen E. Kahn
Michael Huemmer, Allen E. Kahn, President
President
JAAK (JACK) OLESK
Certified Public Accountant
270 North Canon Drive, Suite 203
Beverly Hills, CA 90210
(310-288-0693
INDEPENDENT AUDITOR'S CONSENT
I consent to the use of my report dated February 9, 2000, with respect
to the financial statements of Starfest, Inc. included in the March 8, 2000 Form
8-K Current Report of Starfest, Inc.
/s/ Jaak Olesk
--------------------
JAAK OLESK
Beverly Hills, California
March 9, 2000
