U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
ASPAC COMMUNICATIONS CORPORATION
-----------------------------
(Name of Small Business Issuer)
Delaware 95-4652797
(State or Other Jurisdiction of I.R.S Employer
Incorporation or Organization) Identification Number
2049 Century Park East, Suite 1200
Los Angeles, California 90067
- ------------------------------------------------------------
(Address of Principal Executive Offices including Zip Code)
310/712-3288
(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act: None
Securities to be Registered Under Section 12(g) of the Act: Common Stock,
$.0001 Par Value
(Title of Class)
<PAGE>
PART I
ITEM 1. BUSINESS.
The Company intends to engage in the development,
acquisition and possible sale of telecommunications and
Internet services to offer a broad range of local and
regional, international, and enhanced telecommunication and
Internet services including but not limited to cellular and
fixed line telephone service to individuals, business and
residential customers. The Company will concentrate its
services in the Far East, including China, and in the United
States. The Company may locate an existing telecommunications
or Internet systems which it may acquire as part of the
development of its operating network. The Company intends to
offer local and international calling services, as well as
customized telecommunications and Internet services to its
clients.
The proposed business activities described herein may
classify the Company as a blank check company. See
"GLOSSARY". The Securities and Exchange Commission and many
states have enacted statutes, rules and regulations limiting
the sale of securities of blank check companies. The Company
is voluntarily filing this Registration Statement with the
Securities and Exchange Commission and is under no obligation
to do so under the Securities Exchange Act of 1934.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE IN NATURE AND
INVOLVE A HIGH DEGREE OF RISK. THE SECURITIES OFFERED HEREBY
SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE
THEIR ENTIRE INVESTMENT. THEREFORE, EACH PROSPECTIVE INVESTOR
SHOULD, PRIOR TO PURCHASE, CONSIDER VERY CAREFULLY THE
FOLLOWING RISK FACTORS, AS WELL AS ALL OF THE OTHER
INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS AND THE
INFORMATION CONTAINED IN THE FINANCIAL STATEMENTS, INCLUDING
ALL NOTES THERETO.
RISKS RELATING TO OPERATING IN CHINA AND ELSEWHERE IN THE FAR
EAST
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
The Company's sole director resides outside the United
States. The Company anticipates that a substantial portion of
the assets that may be developed or acquired by it will be
located outside the United States and, as a result, it may not
be possible for investors to effect service of process within
the United States upon such person, or to enforce against the
Company's assets or against such person judgments obtained in
United States courts predicated upon the liability provisions,
and most particularly the civil liability provisions, of the
United States securities laws or state corporation or other
law.
INVESTMENT IN FAR EAST GENERALLY
The Company anticipates that it will initially focus its
development efforts on telecommunication projects and
opportunities located in China and the Far East. Because of
government controls and lack of established information
systems, information regarding projects in which the Company
may participate located in China and the Far East will be
difficult for United States investors to obtain and investors
will be unable to track the progress of the Company. In
addition, if the Company begins operations in China or the Far
East it will be subject to the risks incident to the ownership
and operation of businesses therein. These risks include,
among others, the risks of internal political or civil unrest,
war, or government restrictions. These risks are dynamic and
difficult to quantify. The Company will be subject to the
risks normally associated with changes in general national
economic conditions or local market conditions, competition,
patronage, changes in market rates, and the need to
periodically upgrade and replace equipment to maintain
desirability, and to pay the costs thereof. Although many of
the governments of the countries of the Far East have
liberalized policies on international trade, foreign ownership
and development, investment, and currency repatriation,
increasing both international trade and investment
accordingly, such policies might change unexpectedly. The
Company will be effected by the rules and regulations
regarding foreign ownership of real and personal property,
including telecommunication switching stations, land lines and
other property. Such rules may change quickly and
dramatically which may have an adverse impact on ownership and
may result in a loss without recourse of property or assets of
the Company. In July, 1997, the control of Hong Kong was
transferred from Great Britain to China. As a result, Hong
Kong is still in a period of transition. It is uncertain what
changes may result from such transition in regard to business,
foreign property ownership, restrictions on development, taxes
or other factors.
INVESTMENT IN CHINA IN PARTICULAR
Because the operations of the Company are expected to be
based to a substantial extent in China, the Company will be
subject to the rules and restrictions governing China's legal
and economic system as well as general economic and political
conditions in that country. These include the following:
Political and Economic Matters. Under its current
leadership, the government of the People's Republic of China
("PRC") has been pursuing economic reform policies, which
include the encouragement of private economic activity and
greater economic decentralization. There can be no assurance,
however, that the Chinese government will continue to pursue
such policies, or that such policies will be successful if
pursued. Changes in policies made by the Chinese government
may result in new laws, regulations, or the interpretation
thereof, confiscatory taxation, restrictions on imports,
currency devaluations or the expropriation of private
enterprise which may, in turn, adversely affect the Company.
Furthermore, business operations in China can become subject
to the risk of nationalization, which could result in the
total loss of ownership and control of any assets or
operations that may be developed by the Company in China.
Also, economic development may be limited by the imposition of
austerity measures intended to reduce inflation, the
inadequate development of an infrastructure, and the potential
unavailability of adequate power and water, transportation,
communication networks, raw materials and parts, etc.
Legal System. The PRC's legal system is a civil law
system based on written statutes. Unlike the common law
system in the United States, decided legal cases in the PRC
have little value as precedents. Furthermore, the PRC does
not have a well-developed body of laws governing foreign
enterprises. Definitive regulations and policies with respect
to such matters as the permissible percentage of foreign
investment and permissible rates of equity returns have not
yet been published, statements regarding these evolving
policies have been conflicting, and any such policies, as
administered, are likely to be subject to broad interpretation
and modification, perhaps on a case-by-case basis. As the
legal system in the PRC develops with respect to such new
forms of enterprise, foreign investors may be adversely
affected by new laws, changes in existing laws (or
interpretation thereof) and the preemption of provincial or
local laws by national laws. The Company's operations in
China, if any are developed of which there can be no
assurance, will be subject to administrative review and
approval by various national and local agencies of the PRC
government. Management intends that the Company's operations
will comply with applicable administrative requirements;
however, there is no assurance that the Company will be able
to timely obtain the necessary administrative approvals for
any projects that the it determines to develop.
Inflation/Economic Policies. In recent years, the
Chinese economy has experienced periods of rapid growth and
high rates of inflation, which have, from time to time, led to
the adoption by the PRC government of various corrective
measures designed to regulate growth and contain inflation.
In 1995, China's overall inflation rate was estimated to be
14.8%, compared to 21.4% in 1994 and 13.2% in 1993. High
inflation has in the past and may in the future cause the PRC
government to impose controls on prices, or to take other
action which could inhibit economic activity in China, which
in turn could affect the Company's development or operations.
Foreign Currency Exchange. The Renminbi ("Rmb"), the
currency of China, is not a freely convertible currency. Both
conversion of Rmb into foreign currencies and the remittance
of Rmb abroad are subject to the PRC government approval. The
Company intends to develop telecommunication systems in the
Far East including China and anticipates that initially it may
earn revenues, if any, and incur costs, in Rmb.
Prior to January 1, 1994, Rmb earned within China were
not freely convertible into foreign currencies except with
government permission, at rates determined at swap centers,
where the exchange rates often differed substantially from the
official rates quoted by the People's Bank of China. On
January 1, 1994, the People's Bank of China introduced a
managed floating exchange rate system based on the market
supply and demand and proposed to establish a unified foreign
exchange inter-bank market among designated banks. In place
of the official rate and the swap center rate, the People's
Bank of China publishes a daily exchange rate for Rmb based on
the previous day's dealings in the inter-bank market. It is
expected that swap centers will be phased out. However, the
unification of exchange rates does not imply full
convertibility of Rmb into United States Dollars or other
foreign currencies. Payment for imported materials and
remittance of earnings outside of China are subject to the
availability of foreign currency which is dependent on the
foreign currency denominated earnings of the entity or
allocated to the Company by the government at official
exchange rates.
Approval for exchange at the exchange center is granted
to enterprises in China for valid reasons such as purchases of
imported goods and remittance of earnings. While conversion
of Rmb into dollars or other foreign currencies can generally
be effected at the exchange center, there is no guarantee that
it can be effected at all times. There is still uncertainty
as to how foreign enterprises will be treated under this new
system or whether the system will be changed again in the
future. In the event of shortages of foreign currency, the
Company may be unable to convert sufficient Renminbi into
foreign currency to enable it to comply with foreign currency
payment obligations it may have.
PRC Regulation of the Telecommunications Industry. The
Ministry of Posts and Telecommunications (which is currently
being reformed to be part of the Ministry of Information
Industry)(the "MPT") regulates the telecommunications industry
in China. The MPT directly or indirectly regulates entry into
the telecommunications industry, scope of permissible
business, interconnection and transmission line arrangements,
technology and equipment standards, and other aspects of the
Chinese telecommunications industry. Such regulation may
limit the Company's flexibility to respond to certain
development opportunities. In addition, changes in the
regulations or policies governing such regulatory framework
could have an adverse effect on the Company. The Company may
have to obtain certain licenses, if required, from the MPT in
order to commence its proposed business. There is no
assurance that it will be able to obtain such licenses, or if
obtained, that they will not be untimely revoked or suspended.
The rates that the Company will be permitted to charge for
telecommunications services, if any are developed, are subject
to regulation by the State Planning Commission, the MPT, and
relevant Provincial Price Bureaus. Once authorized by such
regulatory agencies, there can be no assurance that changes in
the tariffs and rates would not have a material adverse effect
on any Company business and results of operations, if any had
been developed.
RISK FACTORS CONCERNING THE COMPANY
THE COMPANY IS A DEVELOPMENT STAGE COMPANY WITH LIMITED
OPERATING HISTORY
The Company, organized on June 1, 1994, is a development
stage company and has recently begun operations as of the date
hereof. The Company could be considered a "blank check"
company. See "GLOSSARY". Without an operating history, there
is only a limited basis upon which a potential investor may
evaluate the Company's prospects for its ability to construct,
develop and manage telecommunications systems and Internet
networks. To date, the Company's efforts have been limited to
organizational activities including the preparation and filing
of a registration statement on Form S-1 on October 23, 1997
and its subsequent withdrawal and the preparation of this
registration statement. The Company has limited resources and
has had no revenues to date.
The Company's proposed operations are subject to all of
the risks inherent in the establishment of a new business
enterprise, including the absence of an operating history.
The likelihood of the success of the Company must be
considered in light of the problems, expenses, difficulties,
complications and delays frequently encountered in connection
with a new business and the competitive environment in which
the Company will operate. No assurance can be given that the
operations of the Company will result in any revenues or that
the Company will be profitable. See "BUSINESS."
SUCCESS OF PLAN OF OPERATIONS AND SHAREHOLDER INFORMATION
DEPENDENT ON MANAGEMENT
The ability of the Company to successfully effect its
business objectives and to develop, construct, manage and
acquire telecommunication systems and Internet networks will
be largely dependent upon the efforts of its Management
including Mr. Marc F. Mayeres, President of the Company and
Liancheng Ji, a director of the Company. As the Company
anticipates operations in China and elsewhere in the Far East,
shareholders may have difficulty in obtaining information from
sources other than the Company, including foreign local or
national government agencies, about the Company's activities
and development of its projects in China or such other
countries in the Far East. Shareholders will be dependent
upon Management for reports of the Company's development and
activities and expenditure of proceeds. The Company has
entered into an employment agreement with Mr. Mayeres. The
Company has not obtained any "key man" life insurance on the
lives of any of its officers or the director. The loss of the
services of the key executives or director could have a
material adverse effect on the Company's ability to
successfully achieve its business objectives. The officers of
the Company will work full time on the development and
operations of the Company. Mr. Liancheng Ji will devote such
time as a director as reasonably necessary to assist the
Company in developing its telecommunications systems and
Internet network in China and elsewhere in the Far East.
LIMITED TELECOMMUNICATIONS INDUSTRY EXPERIENCE
The Company's Management has limited experience in
owning, constructing, developing or managing
telecommunications and Internet systems although the sole
director of the Company has both education and experience in
such areas and has worked in the telecommunications field in
the Far East for over 30 years. Although the Company plans to
hire consultants, and professional operating technicians and
specialists, there can be no assurance that these
professionals will be available on terms acceptable to the
Company.
In order to supplement the business experience of
Management, the Company may employ accountants, technical
experts, appraisers, attorneys, or other consultants or
advisors in China, the Far East or the United States.
Furthermore, it is anticipated that such persons may be
engaged by the Company on an independent basis without a
continuing fiduciary or other obligation to the Company. As
of the date hereof, the Company has entered into agreements
with two consultants to recommend to the Company applicable
telecommunications technologies and to assist the Company in
locating joint venture partners. See "ITEM 6. EXECUTIVE
COMPENSATION"
POSSIBLE NEED FOR ADDITIONAL FINANCING TO COMMENCE OR CONTINUE
OPERATIONS
The Company will be limited in implementing its business
plan for the development, construction and management of
telecommunication and Internet systems and for the acquisition
of existing telecommunication systems and will likely need to
obtain additional funds in order to develop such
telecommunications or Internet systems. The Company may seek
additional sources of capital, including an offering of its
equity securities, an offering of debt securities or obtaining
financing through a bank or other entity. The Company has not
established a limit as to the amount of debt it may incur nor
has it adopted a ratio of its equity to a debt allowance.
If the Company needs to obtain additional financing,
there is no assurance that financing will be available, from
any source, or that it will be available on terms acceptable
to the Company, or that any future offering of securities will
be successful. The Company could suffer adverse consequences
if it is unable to obtain additional capital when needed. The
pace of the Company's development of telecommunication and
Internet systems and the possible acquisition of existing
systems is directly related to the amount of capital available
to the Company for such purposes.
COMPETITION FROM OTHER MORE ESTABLISHED ENTITIES
The Company will be a small participant in the
telecommunications industry and it will face competition from
well financed entities already established and actively
engaged in related or identical projects to those in which the
Company plans to participate. Many of such entities have
significantly greater financial resources, technical expertise
and managerial capabilities than the Company and,
consequently, the Company may be at a competitive
disadvantage.
ISSUANCE OF FUTURE SHARES MAY DILUTE VALUE OF SHARES HELD BY
SHAREHOLDERS
The Certificate of Incorporation of the Company
authorizes the issuance of a maximum of 100,000,000 shares of
Common Stock, $.0001 par value and 20,000,000 shares of non-
designated preferred stock, $.0001 par value. As of the date
hereof there are 20,020,000 shares of Common Stock outstanding
and no shares of preferred stock outstanding. The future
issuance of all or part of the remaining authorized Common
Stock may result in dilution in the percentage of the
Company's Common Stock held by the Company's then existing
shareholders. Moreover, any Common Stock issued in the future
may be valued on an arbitrary basis by the Company. The
issuance of the Common Stock of the Company as part of the
Company's participation in a project or acquisition or for the
payment for services or as compensation, may have the effect
of diluting the value of shares held by investors, and might
have an adverse effect on any trading market, should a trading
market develop for the Company's shares.
POTENTIAL ADVERSE EFFECTS OF AUTHORIZATION OF PREFERRED STOCK
The Company has 20,000,000 authorized shares of non-
designated preferred stock of which none have been issued as
of the date hereof. The Company may, without further action
or vote by shareholders of the Company, designate and issue
the shares of preferred stock. The terms of any series of
preferred stock, which may include priority claims to assets
and dividends and special voting rights, could adversely
affect the rights of holders of the Common Stock and thereby
reduce the value of the Common Stock. The designation and
issuance of preferred stock favorable to current Management or
current shareholders could make the possible takeover of the
Company or the removal of Management of the Company more
difficult and discourage hostile bids for control of the
Company which bids might have provided shareholders with
premiums for their shares.
NO INTENTION OF PAYING DIVIDENDS
Should the proposed operations of the Company be
profitable, it is likely that the Company would retain much or
all of its earnings in order to finance future growth and
expansion. The Company has not and does not presently intend
to pay dividends and dividends are unlikely to be paid in the
foreseeable future.
FACTORS BEYOND THE COMPANY'S CONTROL
Numerous conditions beyond the Company's control may
substantially affect its success. Such conditions include,
but are not limited to, fluctuations in costs of goods and
services including Internet access charges, line use charges
by third-party carriers, availability of telecommunications
equipment, import/export restrictions, equipment shortages,
political unrest, as well as competition from other
businesses.
NO CURRENT TRADING MARKET FOR THE COMPANY'S SECURITIES
There is no established public trading market for the
securities of the Company. No assurance can be given that an
active trading market in the Company's securities will develop
or, if developed, that it will be sustained. Various factors,
such as the Company's operating results, changes in laws,
rules or regulations, general market fluctuations, changes in
financial estimates by securities analysts and other factors
may have a significant impact on the market price of the
securities. The market price for the securities of public
companies often experience wide fluctuations which are not
necessarily related to the operating performance of such
public companies such as high interest rates or impact of
overseas markets.
LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND
DIRECTORS
The Certificate of Incorporation and By-Laws of the
Company provide that the Company shall indemnify its officers
and directors against losses sustained or liabilities incurred
which arise from any transaction in such officer's or
director's respective managerial capacity unless such officer
or director violates a duty of loyalty, did not act in good
faith, engaged in intentional misconduct or knowingly violated
the law, approved an improper dividend, or derived an improper
benefit from a transaction. The Company's Certificate of
Incorporation and By-Laws also provide for the indemnification
by it of its officers and directors against any losses or
liabilities incurred as a result of the manner in which such
officers and directors operate the Company's business or
conduct its internal affairs, provided that in connection with
these activities they act in good faith and in a manner which
they reasonably believe to be in, or not opposed to, the best
interests of the Company, and their conduct does not
constitute gross negligence, misconduct or breach of fiduciary
obligations.
PENNY STOCK REGULATION
Penny stocks generally are equity securities with a
price of less than $5.00 per share other than securities
registered on certain national securities exchanges or quoted
on the Nasdaq Stock Market, provided that current price and
volume information with respect to transactions in such
securities is provided by the exchange or system. The
Company's securities may be subject to "penny stock" rules
that impose additional sales practice requirements on broker-
dealers who sell such securities to persons other than
established customers and accredited investors (generally
those with assets in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 together with their spouse).
Broker-dealer practices in connection with transaction
in "penny stocks" are regulated by certain penny stock rules
adopted by the Securities and Exchange Commission. The penny
stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver
a standardized risk disclosure document that provides
information about penny stocks and the risks in the penny
stock market. The broker-dealer must also provide the
customer with current bid and offer quotations for the penny
stock, the compensation received by the broker-dealer and its
salesperson in the transaction, and monthly account statement
showing the market value of each penny stock held in the
customer's account. In addition, the penny stock rules
generally require that prior to a transaction in a penny
stock, the broker-dealer must make a special written
determination that the penny stock is a suitable investment
for the purchaser and the broker-dealer must receive the
purchaser's written agreement to the transaction. These
disclosure requirements may have the effect of reducing the
level of trading activity in the secondary market for a stock
that becomes subject to the penny stock rules. If the
Company's securities become subject to the penny stock rules,
investors may find it more difficult to sell their securities.
SHARES ENTERING PUBLIC MARKET WITHOUT ADDITIONAL CAPITAL
PURSUANT TO RULE 144
No shares of stock of the Company were issued prior to
September 26, 1997. All the issued and outstanding shares of
the Company are "restricted securities" as such term is
defined in Rule 144 ("Rule 144") promulgated under the
Securities Act. In general, under Rule 144, if adequate
public information is available with respect to a company, a
person who has satisfied a one-year holding period as to his
restricted securities or an affiliate who holds unrestricted
securities may sell, within any three month period, a number
of that company's shares that does not exceed the greater of
one percent of the then outstanding shares of the class of
securities being sold or the average weekly trading volume
during the four calendar weeks prior to such sale. Sales of
restricted securities by a person who is not an affiliate of
the company (as defined in the Securities Act) and who has
satisfied a two year holding period may be made without any
volume limitation. Pursuant to such Rule 144, after
expiration of the holding period certain shares of Common
Stock now restricted for trading will become eligible for
trading in the public market without any payment therefore or
increase to the Company's capitalization. Possible or actual
sales of the Company's outstanding Common Stock by all or some
of the present stockholders may have an adverse effect on the
market price of the Company's Common Stock should a public
trading market develop.
THE NATIONAL SECURITIES MARKET IMPROVEMENT ACT OF 1996
The National Securities Market Improvement Act of 1996
("NMSIA") limits the authority of states to impose
restrictions upon sales of securities made pursuant to Sections 4(1)
and 4(3) of the Securities Act of companies which file reports
under Sections 13 or 15(d) of the Securities Exchange Act. Sales of
the Company's Common Stock in the secondary trading market,
when eligible, will be made pursuant to Section 4(1) (sales other
than by an issuer, underwriter or broker).
CERTAIN TAX CONSIDERATIONS
The Company will be subjected to taxes imposed on it in
the jurisdiction in which it operates. Further, its income is
subject to United States federal and state income taxes when
distributed, deemed distributed or otherwise attributed to,
the Company, which is a United States corporation. Complex
tax rules apply for purposes of determining the calculation of
those United States taxes, the availability of a credit for
foreign taxes imposed and the timing of the imposition of
United States tax. Normally all foreign income earned by a
United States multinational corporation eventually will be
subject to United States tax. In order to relieve double
taxation, the United States federal tax law generally allows
United States corporations a credit against their United
States tax ability in the year the foreign earnings become
subject to United States tax in the amount of the foreign
taxes paid on those earnings. The credit is limited under
complex limitation rules. Further, complex rules exist for
allocating and apportioning interest, research and development
expenses and certain other expense deductions between the
United States and foreign sources. These rules can prevent
United States multinational companies from crediting all of
the foreign taxes they pay against their United States taxes.
To the extent such credits are not allowed, foreign source
income bears a tax burden higher than the United States Tax
rate.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Registration Statement contains forward-looking
statements and information that is based upon management's
beliefs and assumptions, as well as information currently
available to management. When used in this document the words
"anticipates," "estimates ," "believes," "expects," "intend"
and similar expressions are intended to identify forward-
looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different
from any future results, performance or achievements or
expectations expressed or implied by such forward-looking
statements. The Company disclaims any obligation to update
any such factors or to announce the result of any revisions to
any of the forward-looking statements contained herein to
reflect future development.
GENERAL BUSINESS PLAN
The Company intends to engage in the development,
acquisition and possible sale of telecommunications and
Internet services to offer a broad range of local and
regional, international, and enhanced telecommunication and
Internet services including but not limited to cellular and
fixed line telephone service to individuals, business and
residential customers. The Company will concentrate its
services in the Far East, including China, and in the United
States. The Company may locate an existing telecommunications
or Internet systems which it may acquire as part of the
development of its operating network. The Company intends to
offer local and international calling services, as well as
customized telecommunications and Internet services to its
clients.
Since inception, the principal activity of the Company
has been directed to organizational efforts. As of the date
hereof, the Company has hired a full-time President and has
entered into preliminary discussions for participation in
several telecommunication projects. The Company has not
entered into any definitive agreements. Start-up costs
incurred by the Company have been provided by the initial sale
of certain securities of the Company and by loans from one of
its current shareholders. No other initial financing has been
obtained. There is no agreement or understanding pursuant to
which the current shareholders will continue to make such
loans or purchase stock.
The Company may determine to raise funds in order to
develop a greater number of telecommunication systems.
Management may use various methods to raise such funds
including debt obligations such as loans from banks or other
sources of debt securities and/or investors' equity. If
financing is arranged, of which there can be no assurance,
Management anticipates that repayment of debt and debenture
obligations will be made from earnings from operations or
sales of the telecommunications and Internet systems and/or
equity interest in the Company. The Company has not
established any ratio governing its equity to debt limits nor
any limit upon the debt which may be incurred.
On November 6, 1997, the Company entered into an
employment agreement with Marc F. Mayeres to serve as
President of the Company. The Company has entered into a loan
agreement with a shareholder for payment of certain expenses.
There is no agreement pursuant to which the current
shareholders must make additional loans or purchase additional
stock.
CURRENT OPERATIONS
The Company has begun discussions regarding several
opportunities for participation in developing certain
telecommunication networks. These discussions are all in the
preliminary stages and potential investors should be alerted
that there is no assurance that the Company will finalize any
of these discussions or that agreements will be reached or
conducted on any of the terms outlined below.
JOINT VENTURE WITH CHINA UNITED TELECOMMUNICATIONS
CORPORATION ("CHINA UNICOM").
The Company is currently in discussion with China United
Telecommunications Corporation, Hebei Branch ("Hebei Unicom") located in
Shijiazhuang, Hebei Province, China and its affiliates for possible
participation in the construction and development of wire-line and wireless
telephone networks in Hebei Province in China. Hebei Unicom
is an authorized public telephone operator in China.
Liancheng Ji, the director of the Company, was Vice President
of Hebei Unicom until January, 1998 and is now Vice-President
of China Unicom, Paging Division. The Company and Hebei
Unicom have executed a preliminary letter of intent to
participate in a cooperative joint venture for the
construction, development and servicing of a 200,000-
subscriber wire-line telephone network. This project would
constitute the first phase of a 2,000,000-subscriber wire-line
telephone project in the Hebei Province. Pursuant to the
letter of intent, the Company and Hebei Unicom agree to
finalize the terms, participation arrangement, and capital
contributions of each party as discussions progress. The
letter of intent specifies that no agreement has been reached
and that any such agreement would be subject to receipt of
necessary company, governmental, regulatory and other
approvals. The letter of intent is preliminary only and there
is no assurance that any discussions will be continued or
pursued. The letter of intent does not provide any guarantees
or penalties if either party does not continue the discussions
described therein.
The possible telecommunication construction and
development in the Hebei Province would be an expansion of the
existing current wire-line and wireless telephone network.
The current wire-line telephone penetration rate in Hebei
Province is only 5.3 per 100 capita and the penetration rate
for wireless telephone is 0.52 per 100. These penetration
rates are below the international standards for developed and
developing countries and the Company believes that there is a
great demand for immediate increase in network capability and
services.
The Company anticipates that any joint venture agreed to
with Hebei Unicom would continue for approximately 25 years, a
customary duration. The Company anticipates that it may be
responsible for constructing and developing the telephone
expansion network and would also assisting in obtaining
equipment, goods and materials not available in China;
introducing and overseeing modern and efficient operating and
management techniques; recruiting qualified foreign personnel
and international consultants; and assisting in raising
capital for the network construction. However, no agreement
has been reached or finalized and there is no assurance that
any agreement will be reached or that the if reached will be
finalized or approved.
INTERNET JOINT VENTURE.
The Company is in preliminary discussions with a Chinese
telecommunications partner for the possible development of a nationwide
internet network in China. If the Company were to enter into such a joint
venture, the Company would form a joint venture company in
which the Company would anticipate holding at least a 49%
interest. The joint venture company would intend to provide
internet access service throughout China commencing its
operations in the major metropolitan areas providing its
clients with access to the World Wide Web, electronic mail
transfer, individual web pages, search engines, news and
updates, on-line shopping and other services as are
customarily available by Internet Service Providers. The
joint venture would continue for a period of 30 years and
anticipates being able to admit up to 5,000,000 customers to
the network in approximately 7 years.
JOINT VENTURE, POSSIBLE MERGER OR ACQUISITION WITH A
CALIFORNIA TELECOMMUNICATIONS COMPANY.
The Company is in preliminary discussions for possible cooperation
with a California-based company specializing in research and
development of advanced telecommunication equipment and
systems. The technology developed by this company would
allow the Company to build advanced and cost-efficient
telecommunication networks. No agreements or arrangements
have been completed or finalized and there is no assurance
that any such arrangements will be concluded.
INVESTMENT IN TPG CAPITAL CORPORATION
On September 26, 1997, the Company entered into an agreement
with First Agate Capital Corporation, a non-related Delaware corporation,
to provide services generally related to the filing of a registration
statement with the Securities and Exchange Commission. First Agate
Capital Corporation is an affiliate of Cassidy & Associates, the law
firm which prepared this registration statement. As consideration for
the services to be provided, the Company entered into a subscription
agreement to purchase 30,000 shares of common stock of TPG Capital
Corporation, a non-related Delaware corporation which is an affiliate
of Cassidy & ASsociates, in the amount of $150,000. As of December 31,
1997, the Company had paid $90,000 toward this Agreement.
SHAREHOLDER LOAN
On October 2, 1997, Finhorn Enterprises Ltd., a
shareholder of the Company, loaned the Company $60,000
repayable in 12 months at an annual interest rate of 5%. The
loan is renewable upon the expiration of the one-year term for
another year at a 7% annual interest rate. The Company
anticipates that it will repay the loan from revenues
generated from operations or, if no revenues have been
generated from operations at such time that the loan is
payable, then the Company will be required to locate alternate
methods of financing including, possibly, debt or equity
offerings of its securities. On October 27, 1997, the Company
borrowed an additional $100,000 from Finhorn Enterprises Ltd.
on the same terms as the earlier loan. Proceeds from both
loans, aggregating $160,000, are for the payment of expenses
including legal fees, and initial working capital.
BUSINESS PLAN
The Company plans to seek opportunities for the
development and construction of telecommunications and
Internet networks either by itself or in cooperation with
other entities. The Company intends to establish and develop,
either through construction and development or through
acquisition of existing systems, one or more
telecommunications and/or Internet networks consisting of
fixed and/or cellular line services to be selected in specific
target areas in the Far East, including China, and, if the
opportunity is available, in the United States.
The Company intends to establish a network communication
system for business and residential subscribers to provide
intraconnection between cellular and fixed line services and
to provide subscribers with capability to make domestic and
international long distance calls. The Company plans to
establish and offer nationwide an Internet access system in
China and anticipates that its network systems will
interconnect with the MPT Systems which will allow the
Company's subscribers to communicate with fixed line and
cellular users of other networks and to make and receive
domestic and international long distance calls.
The Company anticipates that it will commence operations
by entering into joint venture relationships with other
established telecommunication companies, either in the United
States or elsewhere, for the initial development and
construction of telecommunication and Internet networks or for
the expansion and improvement of existing network. The
Company anticipates that it will participate in a series of
such joint ventures while, if funds are available therefor,
initiating telecommunications projects in which it is the sole
participant. The Company anticipates that as it participates
in a growing number of such projects, it will be able to
develop, in China initially, compatible telecommunications
systems and Internet access to a wide variety of geographic
locations.
The Company anticipates that it will be able to work
with the MPT and its agents to establish an interconnection
arrangement to allow the Company to utilize the existing MPT
network equipment and connections. Fees charged for such
usage will be passed to the customer as part of the
utilization tariff. The Company intends to utilize current
computer systems to provide network operation management,
customer service and marketing. The Company intends to
construct its own transceiver station sites or to lease such
sites from the MPT or third-party owners or acquire receiving
stations already existing.
The Company intends to focus on controlling costs and
providing efficient operations through the use of advanced
management information systems and by retaining and attracting
qualified personnel. The Company intends to focus on
marketing its telecommunications system in its selected target
areas. The Company intends to offer subscribers certain value
added services such as call forwarding, call waiting,
conference calling, facsimile transmission services, and modem
access to the Internet and World Wide Web. The Company will
develop its value added services package as it identifies its
target market and the demographics therein.
The Company's principal business objective is to provide
telecommunications systems, including cellular, fixed line and
Internet services, to residential and businesses customers in
countries in the Far East, including China, and in the United
States. The Company intends to reach its objectives through
the development of its telecommunication network and/or by the
acquisition of existing telecommunication networks, or both.
The Company may be considered a blank check company. See
"GLOSSARY".
TELECOMMUNICATIONS IN GENERAL
The global market for telecommunications services is
undergoing significant deregulation and reform. The Company
believes that the industry is being shaped by the (i)
deregulation and privatization of telecommunication markets
worldwide; (ii) diversification of services through
technological innovation; and (ii) globalization of major
carriers. It is anticipated that the industry generally will
experience considerable growth in terms of traffic volume and
revenue and development of new markets. According to the
International Telecommunication Union ("ITU"), a worldwide
telecommunications organization under the auspices of the
United Nations, the international telecommunications industry
accounted for $52.8 billion in revenues and 60.3 billion
minutes of use in 1995. The ITU projects that international
telecommunications revenues will approach $76 billion by the
year 2000 with the volume of traffic expanding to 107.0
billion minutes of use.
TELECOMMUNICATIONS INDUSTRY IN CHINA
According to the PRC Ministry of Posts and
Telecommunications (the "MPT"), with a population of
1,198,000,000 in 1994 China had 27,300,000 fixed line
telephone subscribers (2.17% penetration) and 1,570,000
cellular subscribers (.13% penetration). By 1996 with a
population of 1,226,000,000 (2.28% growth) the
telecommunications usage doubled to 54,950,000 fixed line
telephone subscribers (4.49% penetration) and 6,950,000
cellular subscribers (.57% penetration). As the Chinese
economy shifts from a centrally planned economy to a more
market-oriented economy, the telecommunications industry has
become one of the fastest developing industries in China.
Although the Chinese telecommunications network has become one
of the largest in the world in terms of number of subscribers,
the penetration rates remain relatively low indicating
significant potential for further rapid growth. The Company
believes that the market will be driven by the demand for
telecommunication services from the increase of world-
competitive businesses and industries and from individual
personal use.
THE MINISTRY OF POSTS AND TELECOMMUNICATIONS AND GOVERNMENT
REGULATION
The PRC has developed its Ninth Five-Year Plan in which
development of the telecommunications industry in China will
continue to be a high priority for the government. The Five-
Year Plan's goal is to double, by the year 2000, China's
telecommunications capacity and business volume from that of
1995. The MPT System has primary responsibility for
implementing the plan in regard to the telecommunications
industry. The MPT System has historically regulated all
public telecommunications services in China. The MPT directly
or indirectly regulates entry into the telecommunications
industry, scope of permissible business, interconnection and
transmission line arrangements, technology and equipment
standards, and other aspects of the Chinese telecommunications
industry. The Company believes that such emphasis on growth
of the telecommunications industry, coupled with Management's
familiarity with working with the MPT, will facilitate the
obtaining of support for development of the Company's
operations from the MPT.
ACQUISITION OF EXISTING TELECOMMUNICATIONS SYSTEMS AND
PURCHASES OF EQUIPMENT
In addition to constructing or developing its own
telecommunications and Internet systems by itself or in joint
venture with others, the Company may acquire existing
telecommunications systems. It is possible that the
consideration paid for the acquisition of existing
telecommunications systems, if any such acquisitions are made
of which there can be no assurance, and/or the purchase of
telecommunications and Internet equipment, if any such
purchases are made of which there can be no assurance, or the
payment for services of technicians, professionals or
employees, if any such services are used of which there can be
no assurance, may consist in whole or in part of the Company's
Common Stock, although the Company may also use cash and/or
debt. If the Company were to issue substantial additional
securities for acquisitions, such issuance may dilute the
value of the shares currently held by shareholders and might
have an adverse effect on any trading market that may develop
in the Company's securities in the future. If the Company
were to incur indebtedness that substantially changed the
capital structure of the Company, the Company's shareholders
would most likely be exposed to a greater risk of loss of
their investment in the Company.
Securities issued in any such transaction are likely to
rely on exemptions from registration under applicable federal
and state securities laws. In some circumstances, however, as
a negotiated element of such a transaction, the Company may
agree to register the securities either at the time the
transaction is consummated or at specified times thereafter.
The issuance of substantial additional securities and their
potential sale into any trading market which may develop in
the Common Stock may have a depressive effect on such market.
COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000
Many existing computer programs use only two digits to
identify a year in such program's date field. These programs
were designed and developed without consideration of the
impact of the change in the century for which four digits will
be required to accurately report the date. If not corrected,
many computer applications could fail or create erroneous
results by or following the year 2000. Many of the computer
programs containing such date language problems have been
corrected by the companies or governments operating such
programs. In acquiring any existing telecommunication system
or Internet network, the Company will consider the existence
of a date language problem and the costs to correct such
problem as one of the factors in determining whether such
acquisition would be appropriate. Management does not know
what steps, if any, have been taken by the governments in the
countries in the Far East, particularly China, to correct or
address such date language problem or if any such steps are
required. The Company anticipates that it will be leasing
some telecommunication equipment, including switching
stations, landlines, etc., from the PRC and interconnecting
with the telecommunications systems now operated by the PRC
and that any failure of the PRC's computer systems or
telecommunication delivery systems due to such computer date
language problem could have a severe impact on any operations
of the Company that have been developed.
BUSINESS ENVIRONMENT FOR OPERATIONS
The Company believes that the Far East, including Hong
Kong and China, has a vigorous economy. Foreign investment in
the Far East has grown considerably in the last 10 years.
China has allowed the establishment of foreign private
enterprise and has encouraged development of China as a
manufacturing and business center. However, China remains a
Communist country with tight governmental controls. There can
be no assurance of the government's continued encouragement or
permission of private investment in China. Nor can there be
any assurance as to continued ownership of businesses by
foreign entities in China.
COMPETITION
There are a great number of participants in the
telecommunications and Internet services field. Some of the
participants are large international corporations that have
substantial resources and technical expertise while there are
also many start-up companies. All these companies will
compete with the Company for acquisition of existing
telecommunications systems and for development of new markets.
Although the market penetration of telecommunications services
in China is small, the Company anticipates that many
international and start-up firms will begin entering the
Chinese telecommunications market. The Company will be a
small participant. In view of the Company's limited financial
resources and limited Management experience, the Company may
be at a competitive disadvantage compared to the Company's
competitors. Management believes that the close familiarity
of certain of its officers and director with business and
economic conditions in China and other areas in the Far East
and elsewhere, and knowledge of the Chinese language, as well
as the familiarity of certain of its officers and director
with the United States, the English language and, generally,
the American and international business communities, will be
useful in meeting such competition.
GLOSSARY
Blank Check" Company As defined in Section 7(b)(3) of the
Securities Act, a "blank check"
company is a development stage
company that has no specific business
plan or purpose or has indicated that
its business plan is to engage in a
merger or acquisition with an
unidentified company or companies and
is issuing "penny stock" securities
as defined in Rule 3a51-1 of the
Exchange Act.
The Company ASPAC Communications Corporation, a Delaware
corporation.
Exchange Act The Securities Exchange Act of 1934, as
amended.
"Penny Stock"
Security As defined in Rule 3a51-1 of the
Exchange Act, a "penny stock"
security is any equity security other
than a security (i) that is a
reported security (ii) that is issued
by an investment company (iii) that
is a put or call issued by the Option
Clearing Corporation (iv) that has a
price of $5.00 or more (except for
purposes of Rule 419 of the
Securities Act) (v) that is
registered on a national securities
exchange (vi) that is authorized for
quotation on the Nasdaq Stock Market,
unless other provisions of Rule
3a51-1 are not satisfied, or (vii)
that is issued by an issuer with (a)
net tangible assets in excess of
$2,000,000, if in continuous
operation for more than three years
or $5,000,000 if in operation for
less than three years or (b) average
revenue of at least $6,000,000 for
the last three years.
Securities Act The Securities Act of 1933, as amended.
Small Business
Issuer As defined in Rule 12b-2 of the Exchange Act, a
"Small Business Issuer" is an entity (i) which has
revenues of less than $25,000,000
(ii) whose public float (the
outstanding securities not held by
affiliates) has a value of less than
$25,000,000 (iii) which is a United
States or Canadian issuer (iv) which
is not an Investment Company and (v)
if a majority-owned subsidiary, whose
parent corporation is also a small
business issuer.
ITEM 2. PLAN OF OPERATION
PLAN OF OPERATIONS
The Company is a development stage company, the
objective of which is to develop telecommunication systems and
Internet networks in the Far East, including China, and in the
United States. To date, the Company's efforts have been
limited to organizational activities, including developing a
business plan, identifying and commencing discussions with
potential joint venture participants for telecommunication
projects and identifying and negotiating with qualified
management necessary for the successful implementation of the
Company's business plan.
LIQUIDITY
The Company has generated no revenues to date and does
not anticipate to being able to generate revenues in the near
future until that time, if ever, that it has begun offering
telecommunication and Internet services. The Company believes
that the acquisition of existing systems will provide the
Company with the quickest method to begin operations and,
possibly, receipt of revenues.
The Company has incurred a loss since inception,
resulting in an unaudited net loss as of March 31, 1998, of
$122,515. The Company anticipates that it will continue to
incur losses for the foreseeable future until such time, if
ever, that the Company is able to generate sufficient revenues
to finance its operations.
On October 2, 1997, Finhorn Enterprises Ltd, a
shareholder of the Company, loaned the Company $60,000
repayable in 12 months at an annual interest rate of 5%. The
loan is renewable upon the expiration of the 12-month term
for another 12 months at a 7% annual interest rate. The
Company anticipates that it will repay the loan from revenues
generated from operations or, if no revenues have been
generated from operations at such time that the loan is
payable, then the Company will be required to locate alternate
methods of financing including, possibly, debt or equity
offerings of its securities. On October 27, 1997, the
Company borrowed an additional $100,000 from Finhorn
Enterprises Ltd. on the same terms as the earlier loan.
Proceeds from both loans, aggregating $160,000, are for the
payment of expenses including legal fees, and initial working
capital. There are no agreements or understandings for
additional loans to be provided by Finhorn Enterprises Ltd.,
or any other shareholder or entity, to the Company.
CAPITAL RESOURCES
Substantially all of the Company's expenditures will be
attributable to the development or acquiring telecommunication
networks. The Company may use the its securities, including
either its common or preferred stock, to purchase existing
telecommunications systems and equipment and other materials.
The Company may also incur debt in the development of such
telecommunication systems. The Company has made no
commitments to date for any specific expenditure.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company is qualified to do business in California
and the United States offices of the Company are located at
2049 Century Park East, Suite 1200, Los Angeles, California
90067. Its telephone number is 310/712-3288 and its fax
number is 310/712-3286. The Company has entered into a lease
agreement with Barrister Executive Suites, Inc., an
unaffiliated office-suite rental company, for its office suite
at a rent of $1,755 per month and is provided access to
conference room facilities shared with other business tenants.
The Company does not believe that it currently needs
additional space.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth certain information as
of the date hereof regarding the beneficial ownership of the
Company's Common Stock by each officer and director of the
Company and by each person who owns in excess of five percent
of the Company's Common Stock.
Shares of Percentage of
Name, Position Common Stock Shares of Class
and Address Beneficially Owned Owned (1)
Finhorn Enterprises Limited(2) 12,320,000 61.53%
c/o East Asia Corporate Services Limited
Columbus Centre Building
Wickhams Cay
PO Box 901
Road Town, Tortola, B.V.I.
Serenadia Investment Limited(2) 4,000,000 19.98%
c/o AMS Financial Services Limited
P.O. Box 116, Road Town, Tortola
British Virgin Islands
Marc F. Mayeres -0- 0%
President
30902 Clubhouse Drive, #44F
Laguna Niguel, California 92677
Ming Zhang -0- 0%
Secretary
3701 Glendon Avenue
Los Angeles, California 90034
Liancheng Ji -0- 0%
Director
Building #2
Shizipuo Dongli
Dongcheng District
Beijing, China
All Officers, Directors -0- 0%
and Shareholders as a Group
(3 Persons)
________________
(1) Based on 20,020,000 shares of common stock outstanding.
(2) A British Virgin Islands corporation.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS.
The officers and directors of the Company are as
follows:
Name Title
Marc F. Mayeres President
Ming Zhang Secretary
Liancheng Ji Director
All directors of the Company hold office until the next
annual meeting of shareholders or until their successors are
elected and qualified. The By-laws permit the Board of
Directors to fill any vacancy and such director may serve
until the next annual meeting of shareholders or until a
successor is elected and qualified. The Director does not
receive any remuneration for his services as a director. The
Director may be reimbursed by the Company for expenses
incurred in attending meetings of the Board of Directors.
The principal occupation and business experience for
each officer and director of the Company for at least the last
five years are as follows:
MARC F. MAYERES, 56, has served as President of the
Company since November, 1997. Since November 1, 1997, Mr.
Mayeres has been the unpaid president of IDN Telecom, Inc., a
privately-held California telecommunications research company.
Mr. Mayeres serves primarily as a consultant to IDN Telecom
usually at non-business hours and anticipates no reduction in
the time spent on business of the Company. From 1996 to 1997,
Mr. Mayeres was Vice President of Finance & Administration and
Chief Financial Officer of Thomsen Machinery, Inc., Gardena,
California. Thomsen Machinery, Inc. is a subsidiary of
Putzmeister Werk AG Germany, an international supplier of
industrial and commercial cement and concrete pumping
equipment. From 1994-1995, Mr. Mayeres served as a business
consultant, including developing accounting systems and
preparing feasibility studies regarding certain proposed
corporate activities. From 1992-1994, Mr. Mayeres was Vice
President and Treasurer-Worldwide of SPI Pharmaceuticals,
Inc., Costa Mesa, California. SPI Pharmaceuticals has over
3200 employees worldwide with 7 subsidiaries. Mr. Mayeres
handled worldwide treasury functions including the global cash
management, foreign exchange management, banking contracts and
negotiations, fund sourcing, international refinancings, and
repatriation of a $7.5 million dividend from Yugoslavia. From
1989 to 1991, Mr. Mayeres was Director of International
Finance for Whirlpool Corporation, Benton Harbor, Michigan.
The Whirlpool Corporation has approximately 16,000 employees
with 31 subsidiaries. From 1967 to 1989, Mr. Mayeres was
employed by The Quaker Oats Company, Chicago, Illinois in
several positions, culminating from 1983 to 1989 as Director
of International Finance. The Quaker Oats Company has
approximately 9,000 employees with 28 subsidiaries. Mr.
Mayeres received his Chartered Accountant degree from the
Belgian College of Chartered Accountants in Antwerp, Belgium
in 1967 and the equivalent of a Bachelors of Science Degree in
Chemistry from the Catholic University of Louvain, Louvain,
Belgium, in 1962.
MING ZHANG, 26, serves as Secretary of the Company. Ms.
Zhang, a resident of Los Angeles, was born in Hunan, China and
is fluent in Chinese and English. Ms. Zhang is a Certified
Public Accountant candidate and received her Bachelor of
Science in Accounting from the University of Kentucky in
December, 1994. From 1995-1997 was employed by America Catch,
Inc., Los Angeles, California, a wholly-owned subsidiary of
Beijing Catch Telecommunication Group, as the Assistant to the
President. America Catch's primary business is to seek
investment opportunities in the United States and to expand
its Beijing business and operations in the United States.
LIANCHENG JI, 58, serves as a Director of the Company.
Mr. Ji is a citizen of China and resides in Beijing, China.
Since January, 1998, Mr. Ji has been Vice President of China
Unicom, Paging Division. China Unicom is the second largest
telecommunications provider in China. From 1995 to 1998, Mr.
Ji was the Senior Engineer and Vice President of Hebei United
Telecommunications, Inc. ("Hebei Unicom"), Hebei Province,
China which specializes in telecommunication projects in
Beijing and Hebei Province. Hebei Unicom is the Hebei branch
of China Unicom. The Company has entered into a letter of
intent with Hebei Unicom regarding preliminary discussions for
entering into a joint venture for the development of a wire-
line telephone network. See "BUSINESS--Current Operations".
From 1994-1995 Mr. Ji was the president of Beijing United
Telecommunications, Inc., the Beijing branch of China Unicom,
specializing in telecommunication projects in Beijing. From
1990-1994, Mr. Ji was the Vice President of Beijing Catch
Telecommunication Group which is the third largest
telecommunication service provider in China. From 1967 to
1989, Mr. Ji was the Senior Engineer and Senior Operating
Officer of China Institute of Electronic System Engineering.
Mr. Ji received his Bachelor of Science degree in
Telecommunication Engineering from China Northwestern
Electronic Engineering University.
ITEM 6. EXECUTIVE COMPENSATION.
Officers and directors receive compensation as
determined by the Company from time to time by vote of the
Board of Directors. Such compensation might be in the form of
stock options. The Secretary of the Company receives a salary
of $3,500 per month but has agreed to defer payment of such if
requested by the Company in order to minimize cash
requirements. The President of the Company received a signing
bonus of $7,000 which was paid $5,000 in November, 1997 and
$2,000 in January, 1998, in exchange for 90 days of consulting
services. Beginning February, 1998, the President will
receive $7,000 per month but he has agreed to defer $3,500 per
month. The following table sets forth the total compensation
paid or accrued by the Company on behalf of the President of
the Company during 1997. The Company commenced paying
salaries in September, 1997. The Company provides health
insurance for its employees and officers. No officer of the
Company receives a salary and/or bonus in excess of $100,000.
See "MANAGEMENT--Employment Agreements".
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
LONG- ALL
PRINCIPAL OTHER TERM OTHER
POSITION YEAR SALARY BONUS AWARDS COMPEN- COMPEN-
SATION SATION
Marc F. Mayeres(1) 1997 (1) -- -- -- --
President
(1) Mr. Mayeres employment began on November 6, 1997 and he
received a $7,000 signing bonus in exchange for 90 days
of consulting services, paid $5,000 in 1997 and $2,000 in
1998. Commencing February, 1998, Mr. Mayeres receives
$7,000 per month of which he has agreed to defer $3,500
per month
EMPLOYMENT AGREEMENTS
On November 6, 1997, the Company entered into an
employment agreement with Mr. Marc F. Mayeres to serve as
President of the Company. The terms of the agreement require
the full-time services of Mr. Mayeres to the activities of the
Company and provide for compensation at the rate of $7,000 per
month, one-half of which is deferred. The agreement provides
for medical insurance and payment of expenses incurred on
behalf of the Company. The agreement expires at the end of
six months with the option that upon the agreement of both
parties, a new agreement will be executed providing a salary
of $100,000 annually.
PAYMENT OF FEES TO DIRECTORS, ADVISORS AND AFFILIATES
Under certain circumstances, the Company may pay fees to
individuals or entities who are directors, advisors or
affiliates of the Company. In the event that an unsalaried
affiliate arranged financing, or identified a subsequently
acquired telecommunications system or available equipment or
otherwise in an arms length transaction that ordinarily would
generate a "finders" fee, such a fee, calculated in a
reasonable and customary manner, might be paid. In general,
an "affiliate", as defined under federal securities law, is
any person directly or indirectly controlling, controlled by,
or under common control with, such other person, including any
officer, director, partner or employee of such other person.
No such payments have been made or incurred to date by the
Company to its director.
CONSULTING AGREEMENTS
On May 15, 1998, the Company entered into a two-year
agreement with Li-Ping Wang pursuant to which Ms. Li-Ping
will provide the Company with assistance in (i) obtaining a
200,000 line wire-line or 100,000 line wireless
telecommunication project or a 10-province paging network and
(ii) locating a joint venture partner for such project and
(iii) identifying local financing for such project. As
consideration for such services the Company issued to Ms. Li-
Ping 1,000,000 (post-forward stock split) shares of its Common
Stock and may elect to issue incentive bonus options at some
future time.
On May 21, 1998, the Company entered into a four-year
agreement with Lei He pursuant to which Mr. Lei will provide
the Company with assistance in locating opportunities in China
for investment in applicable telecommunications technology for
development of the Company's market and identification of
potential local joint venture partners. As consideration for
such services the Company issued to Mr. Lei 1,000,000 (post-
forward stock split) shares of its Common Stock and may elect
to issue incentive bonus options at some future time.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On October 2, 1997, Finhorn Enterprises Ltd, a
shareholder of the Company, loaned the Company $60,000
repayable in 12 months at an annual interest rate of 5%. The
loan is renewable upon the expiration of the one-year term for
another year at a 7% annual interest rate. The Company
anticipates that it will repay the loan from revenues
generated from operations or, if no revenues have been
generated from operations at such time that the loan is
payable, then the Company will be required to locate alternate
methods of financing including, possibly, debt or equity
offerings of its securities.
On October 27, 1997, the Company borrowed an additional
$100,000 from Finhorn Enterprises Ltd. on the same terms as
the earlier loan. Proceeds from both loans, aggregating
$160,000, are for the payment of expenses including legal
fees, and initial working capital.
ITEM 8. DESCRIPTION OF SECURITIES.
AUTHORIZED CAPITAL
The total number of authorized shares of stock of the
Company is one hundred million (100,000,000) shares of Common
Stock having a par value of $.0001 per share and twenty
million (20,000,000) shares of non-designated preferred
shares, $.0001 par value.
On February 23, 1998 the Board of Directors approved and
the shareholders consented to a one-for-twenty five reverse
stock split of the Company's issued and outstanding common
stock. As a result of the reverse stock split, the Company's
outstanding common stock was reduced to 3,604,000 shares.
On May 26, 1998 the Board of Directors approved and the
shareholders consented to a five-for-one stock split of the
Company's issued and outstanding common stock. As a result of
the stock split (plus certain additional stock issuances), the
Company's outstanding common stock was increased to
20,020,000 shares. All share quantities and per share amounts
herein have been restated to reflect the reverse and forward
stock splits.
INCORPORATION
The Company was incorporated in the state of Delaware on
June 1, 1994 under the name TPG Management Corporation, which
name was subsequently changed. The Company's Certificate of
Incorporation, By-laws and corporate governance, including
matters involving the issuance, redemption and conversion of
securities, are subject to the provisions of the Delaware
General Corporation Law, as amended and interpreted from time
to time.
COMMON STOCK
The Company's Certificate of Incorporation authorizes
the issuance of 100,000,000 shares of Common Stock, $.0001
value per share, of which 20,020,000 shares were outstanding
as of the date hereof.
Holders of shares of Common Stock are entitled to one
vote for each share on all matters to be voted on by the
stockholders. Holders of Common Stock do not have cumulative
voting rights. Holders of Common Stock are entitled to share
ratably in dividends, if any, as may be declared from time to
time by the Board of Directors in its discretion from funds
legally available therefor. In the event of a liquidation,
dissolution or winding up of the Company, the holders of
Common Stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. All of
the outstanding shares of Common Stock are fully paid and non-
assessable.
Holders of Common Stock have no preemptive rights to
purchase the Company's Common Stock. There are no conversion
or redemption rights or sinking fund provisions with respect
to the Common Stock.
All outstanding shares of Common Stock are validly
issued, fully paid and nonassessable. The Board of Directors
is authorized to issue additional shares, on such terms and
conditions and for such consideration as the Board may deem
appropriate without further stockholder action.
PREFERRED STOCK
The Company's Certificate of Incorporation authorizes
the issuance of 20,000,000 shares of Preferred Stock, $.0001
par value per share, of which no shares have been issued as of
the date hereof. The Board of Directors is authorized to
provide for the issuance of shares of Preferred Stock in
series and, by filing a certificate pursuant to the applicable
law of the State of Delaware, to establish from time to time
the number of shares to be included in each such series, and
to fix the designation, powers, preferences and rights of the
shares of each such series and the qualifications, limitations
or restrictions thereof without any further vote or action by
the shareholders. Any shares of Preferred Stock so issued
would have priority over the Common Stock with respect to
dividend or liquidation rights. Any future issuance of
Preferred Stock may have the effect of delaying, deferring or
preventing a change in control of the Company without further
action by the shareholders and may adversely affect the voting
and other rights of the holders of Common Stock. At present,
the Company has no plans to issue any Preferred Stock nor
adopt any series, preferences or other classification of
Preferred Stock.
ADDITIONAL INFORMATION DESCRIBING STOCK
The above descriptions concerning the Common and
Preferred Stock of the Company do not purport to be complete.
Reference is made to the Company's Certificate of
Incorporation, as amended, and By-Laws which are included as
exhibits to this registration statement and which are
available for inspection at the Company's offices. Reference
is also made to the applicable statutes of the State of
Delaware for a more complete description concerning rights and
liabilities of shareholders.
ADMISSION TO QUOTATION TO NASDAQ SMALLCAP MARKET OR NASD OTC
BULLETIN BOARD
To qualify for admission to quotation on the Nasdaq
SmallCap Market, an equity security must, in relevant summary,
(1) be registered under the Securities Exchange Act of 1934;
(2) have at least three registered and active market makers,
one of which may be a market maker entering a stabilizing bid;
(3) for initial inclusion, be issued by a company with
$4,000,000 in net tangible assets, or $50,000,0000 in market
capitalization, or $750,000 in net income in two of the last
three years (if operating history is less than one year then
market capitalization must be at least $50,000,000); (4) have
at a public float of at least 1,000,000 shares with a value of
at least $5,000,000; (5) have minimum a bid price of $4.00 per
share; and (6) have at least 300 beneficial shareholders.
If a company's securities do not qualify for admission
to quotation on the Nasdaq SmallCap Market they may qualify to
trade over-the-counter until such future time, if any, at
which the securities qualify for admission to quotation on the
Nasdaq Stock Market and the Company then applies.
At such time, if ever of which there can be no
assurance, as the Company meets the qualifications , the
Company will apply for listing of its securities on the NASD
OTC Bulletin Board if it does not meet the requirements for
admission to quotation on the Nasdaq SmallCap Market. The
over-the-counter market differs from national and regional
stock exchanges in that it (1) is not cited in a single
location but operates through communication of bids, offers
and confirmations between broker-dealers and (2) securities
admitted to quotation are offered by one or more broker-
dealers rather than the "specialist" common to stock
exchanges. To qualify for listing on the NASD OTC Bulletin
Board, an equity security must have one registered broker-
dealer, known as the market maker, willing to list bid or sale
quotations and to sponsor such a Company listing.
TRANSFER AGENT AND REGISTRAR
The transfer agent for the Company's securities will be
selected by the Company.
REPORTS TO SHAREHOLDERS
The Company will furnish to its shareholders annual
reports containing audited financial statements examined and
reported upon, and with an opinion expressed by, an
independent certified public accountant. The Company may
issue other unaudited interim reports to its shareholders as
it deems appropriate.
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
(a) MARKET PRICE. There is no trading market for the
Company's Common Stock at present and there has been no
trading market to date. There is no assurance that a trading
market will ever develop or, if such a market does develop,
that it will continue.
The Securities and Exchange Commission has adopted Rule
15g-9 which establishes the definition of a "penny stock," for
purposes relevant to the Company, as any equity security that
has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny
stock, unless exempt, the rules require: (i) that a broker or
dealer approve a person's account for transactions in penny
stocks and (ii) the broker or dealer receive from the investor
a written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased. In
order to approve a person's account for transactions in penny
stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the
person; and (ii) make a reasonable determination that the
transactions in penny stocks are suitable for that person and
that person has sufficient knowledge and experience in
financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also
deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the Commission relating to the
penny stock market, which, in highlight form, (i) sets forth
the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a
signed, written agreement from the investor prior to the
transaction. Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held
in the account and information on the limited market in penny
stocks.
In order to qualify for listing on the Nasdaq SmallCap
Market, a company must have at least (i) net tangible assets
of $4,000,000 or market capitalization of $50,000,000 or net
income for two of the last three years of $750,000; (ii)
public float of 1,000,000 shares with a market value of
$5,000,000; (iii) a bid price of $4.00; (iv) three market
makers; (v) 300 shareholders and (vi) an operating history of
one year or, if less than one year, $50,000,000 in market
capitalization. For continued listing on the Nasdaq SmallCap
Market, a company must have at least (i) net tangible assets
of $2,000,000 or market capitalization of $35,000,000 or net
income for two of the last three years of $500,000; (ii) a
public float of 500,000 shares with a market value of
$1,000,000; (iii) a bid price of $1.00; (iv) two market
makers; and (v) 300 shareholders.
At such time as the Company may qualify, if ever, the
Company may apply for listing of its securities in the over-
the-counter ("OTC") market if the Company does not meet the
qualifications for listing on the Nasdaq SmallCap Market. The
OTC market differs from national and regional stock exchanges
in that it (1) is not cited in a single location but operates
through communication of bids, offers and confirmations
between broker-dealers and (2) securities admitted to
quotation are offered by one or more broker-dealers rather
than the "specialist" common to stock exchanges. The Company
may apply for listing on the NASD OTC Bulletin Board or may
offer its securities in what are commonly referred to as the
"pink sheets" of the National Quotation Bureau, Inc. To
qualify for listing on the NASD OTC Bulletin Board, an equity
security must have one registered broker-dealer, known as the
market maker, willing to list bid or sale quotations and to
sponsor the company for listing on the Bulletin Board.
If the Company is unable to satisfy the requirements for
quotation on the Nasdaq SmallCap Market or becomes unable to
satisfy the requirements for continued quotation thereon, and
trading, if any, is conducted in the OTC market, a shareholder
may find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of, the Company's
securities.
(b) HOLDERS. There are six holders of the Company's
Common Stock.
(c) DIVIDENDS. The Company has not paid any dividends
to date, and has no plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or
against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Company originally engaged John C. MacLean, CPA,
Bowie, Maryland, to prepare the initial audit for the Company.
Because Mr. MacLean's schedule became too full to provide time
to continue to service the Company and to travel to
California, the Company engaged the accounting firm of
Weinberg & Company, Boca Raton, Florida. No report contained
any adverse opinion or disclaimer of opinion and no
disagreements existed with the former accountant.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
As listed below, the Company issued shares of its Common
Stock par value $.0001 per share to the following entities for
the consideration as listed. These sales were not made within
the United States or to United States citizens or residents.
However, such sales were made in compliance with Regulation D
of the Securities Act of 1933.
Pre-Reverse Post-Reverse
and Forward and Forward
Stock Split Stock Split
Number Number of
Date Shareholder of Shares Shares
9/26/97 Serenadia Investment, Ltd. 200,000 40,000 $ 200
10/16/97 Gain Best International, Ltd. 4,500,000 900,000 4,500
10/16/97 Serenadia Investment, Ltd. 300,000 60,000 300
10/27/97 Serenadia Investment, Ltd. 19,500,000 3,900,000 19,500
10/27/97 Global Bridge Profits, Ltd. 4,000,000 800,000 4,000
10/27/97 Superior Gain Enterprises, Ltd. 3,500,000 700,000 3,500
10/27/97 Crowned Eagle Worldwide, Ltd. 3,000,000 600,000 3,000
10/27/97 Finhorn Enterprises, Ltd. 55,100,000 11,020,000 55,100
5/26/98 Li-Ping Wang 1,000,000
5/26/98 Lei He 1,000,000
On February 23, 1998, the Company approved a one-for-
twenty-five reverse stock split of its outstanding shares of
Common Stock. On May 26, 1998, the Company approved a five-
for-one forward stock split of its outstanding shares of
Common Stock.
On February 27, 1998, Crowned Eagle Worldwide, Ltd. and
Superior Gain Enterprises Limited sold their shares of Common
Stock (600,000 and 700,000 post-reverse and forward split,
respectively) to Finhorn Enterprises Limited at a sales price
$.025 per share which is the per share price originally paid
for such shares.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is incorporated in Delaware. Under Section
145 of the General Corporation Law of the State of Delaware, a
Delaware corporation has the power, under specified
circumstances, to indemnify its directors, officers, employees
and agents in connection with actions, suits or proceedings
brought against them by a third party or in the right of the
corporation, by reason of the fact that they were or are such
directors, officers, employees or agents, against expenses
incurred in any action, suit or proceeding. The Certificate
of Incorporation and the By-laws of the Company provide for
indemnification of directors and officers to the fullest
extent permitted by the General Corporation Law of the State
of Delaware.
The General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a
provision eliminating the personal liability of a director to
the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director provided that such
provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section
174 (relating to liability for unauthorized acquisitions or
redemptions of, or dividends on, capital stock) of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper
personal benefit. The Company's Certificate of Incorporation
contains such a provision.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO
DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE COMPANY
PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE OPINION OF THE
SECURITIES AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION
IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS
THEREFORE UNENFORCEABLE.
<PAGE>
ASPAC COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1997
<PAGE>
ASPAC COMMUNICATIONS, INC.
CONTENTS
PAGE 1 - INDEPENDENT AUDITORS' REPORT
PAGE 2 - BALANCE SHEET AT SEPTEMBER 30, 1997
PAGE 3 - STATEMENT OF CHANGES IN STOCKHOLDER'S
DEFICIENCY FOR THE PERIOD FROM SEPTEMBER
26, 1997 (INCEPTION) TO SEPTEMBER 30, 1997
PAGE 4 - STATEMENT OF OPERATIONS FOR THE PERIOD FROM
SEPTEMBER 26, 1997 (INCEPTION) TO SEPTEMBER 30, 1997
PAGE 5 - STATEMENT OF CASH FLOWS FOR THE PERIOD FROM
SEPTEMBER 26, 1997 TO SEPTEMBER 30, 1997
PAGE 6 - 10 - NOTES TO FINANCIAL STATEMENTS AS OF
SEPTEMBER 30, 1997
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Aspac Communications, Inc.
We have audited the accompanying balance sheet of Aspac
Communications, Inc. (a development stage company) as of
September 30, 1997, and the related statements of operations,
changes in stockholder's deficiency, and cash flows for the
period from September 26, 1997 (inception) to September 30,
1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Aspac Communications, Inc. as of September 30,
1997, and the results of its operations and its cash flows for
the period from September 26, 1997 (inception), to September
30, 1997, in conformity with generally accepted accounting
principles.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
February 23, 1998
<PAGE>
ASPAC COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1997
ASSETS
CURRENT ASSETS
Cash $ 200
Capital stock subscribed 30,000
TOTAL CURRENT ASSETS 30,200
PROPERTY AND EQUIPMENT
Furniture and Equipment 5,245
Less: accumulated depreciation 118
TOTAL PROPERTY AND EQUIPMENT 5,127
Deferred offering costs 120,000
Other assets 2,400
TOTAL ASSETS $157,727
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
CURRENT LIABILITIES
Loan and advances from officers and
future shareholders $ 42,155
Capital stock subscription payable 120,000
Accrued expenses 7,069
TOTAL CURRENT LIABILITIES 169,224
STOCKHOLDER'S DEFICIENCY
Preferred stock, $0.0001 par value
20,000,000 authorized -
Common stock, $0.0001 par value
100,000,000 shares authorized,
8,000 shares issued and outstanding 1
Additional paid-in capital 199
Accumulated deficit during development
stage (11,697)
TOTAL STOCKHOLDER'S DEFICIENCY (11,497)
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY $157,727
See accompanying notes to financial statements.
2
<PAGE>
ASPAC COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDER'S DEFICIENCY
FOR THE PERIOD FROM SEPTEMBER 26, 1997
(INCEPTION) TO SEPTEMBER 30, 1997
ACCUMULATED
DEFICIT
ADDITIONAL DURING
COMMON PAID-IN DEVELOPMENT
STOCK CAPITAL STAGE TOTAL
Common stock
issuance $ 1 $199 $ 200
Net Loss - - $(11,697) $(11,697)
BALANCE AT
SEPTEMBER 30, 1997 $ 1 $199 $(11,697) $(11,497)
See accompanying notes to financial statements
3
<PAGE>
ASPAC COMMUNICATIONS, INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM SEPTEMBER 26, 1997
(INCEPTION)TO SEPTEMBER 30, 1997
NET SALES $ -
OPERATING EXPENSES
Salaries 5,060
Office supplies & expenses 2,064
Rent 1,750
Telephone expenses 1,200
Payroll taxes 605
Other taxes 900
Depreciation 118
Total operating expenses 11,697
NET LOSS DURING DEVELOPMENT STAGE $(11,697)
NET LOSS PER COMMON SHARE $ (1.46)
WEIGHTED AVERAGE COMMON
SHARE OUTSTANDING 8,000
See accompanying notes to financial statements.
4
<PAGE>
ASPAC COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM SEPTEMBER 26, 1997
(INCEPTION) TO SEPTEMBER 30, 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(11,697)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 118
Changes in current liabilities
Increase (decrease):
Accrued expenses 7,069
Net Cash Used in Operating
Activities (4,510)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (5,245)
Payment under stock purchase
subscription agreement (30,000)
Increase in other assets (2,400)
Net Cash Used In Investing
Activities (37,645)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from future shareholders 42,155
Proceeds from sale of common stock 200
Net Cash Provided By Financing
Activities 42,355
Net increase in cash and cash
equivalents 200
Cash and cash equivalents
beginning of period -
CASH AND CASH EQUIVALENTS
END OF PERIOD $ 200
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION-NON CASH TRANSACTION
The Company incurred debt in the total amount of $150,000 under a
stock subscription agreement. At September 30, 1997 the unpaid
portion of this debt amounted to $120,000.
See accompanying notes to financial statements.
5
<PAGE>
ASPAC COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Business Activity
Aspac Communications, Inc. (formerly known as TPG Management
Corporation) was incorporated in the State of Delaware on June
1, 1994. On September 26, 1997 the Corporation's name was
changed to Aspac Communications, Inc.(the Company). Prior to
September 26, 1997, no stock had ever been issued in the
Company.
The Company is operating as a Development Stage Company and
intends to develop and/or construct telecommunication and
internet networks in the Far East including the People's
Republic of China. The Company is also considering operating
in other parts of the world, including the United States.
(B) Use of Estimates
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles. The
preparation of financial statements in accordance with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those
estimates.
(C) Cash and Cash Equivalents
For purposes of the statement of cash flow, the Company
considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash
equivalents.
(D) Property and Equipment
Property and equipment is stated at cost and depreciated using
the straight-line method over the estimated economic useful
lives of 3 to 7 years. Expenditures for maintenance and
repairs are charged to expense as incurred. Major
improvements are capitalized.
(E) Earnings Per Share
The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share"
in February 1997.
6
<PAGE>
ASPAC COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
This pronouncement establishes standards for computing and
presenting earnings per share and is effective for the
Company's Fiscal 1997 year-end financial statements. The
Company's management has determined that this standard will
not have a significant impact on the Company's computation or
presentation of net income per common share.
(F) Income Taxes
The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes" (SFAS 109). SFAS 109 is an asset and liability
approach that requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences of
events that have been recognized in the Company's financial
statements or tax returns. In estimating future tax
consequences, SFAS 109 generally considers all expected future
events other than enactments of changes in the tax law or
rates.
(G) New Accounting Pronouncements
The Financial Accounting Standards Board has recently issued
several new accounting pronouncements. Statement No. 129,
"Disclosure of Information about Capital Structure"
establishes standards for disclosing information about an
entity's capital structure, and is effective for financial
statements for periods ending after December 15, 1997.
Statement No. 130, "Reporting Comprehensive Income"
establishes standards for reporting and display of
comprehensive income and its components, and is effective for
fiscal years beginning after December 15, 1997. Statement No.
131, "Disclosures about Segments of an Enterprise and Related
Information" establishes standards for the way that public
business enterprises report information about operating
segments in annual financial statements and requires that
those enterprises report selected information about operating
segments in interim financial reports issued to shareholders.
It also establishes standards for related disclosures about
products and services, geographic areas, and major customers,
and is effective for financial statements for periods
beginning after December 15, 1997. The Company believes that
its future adoption of these statements will not have a
material effect on the Company's financial position or results
of operations.
7
<PAGE>
ASPAC COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1997
NOTE 2 - LOAN PAYABLE - OFFICERS AND FUTURE STOCKHOLDERS
Prior to September 30, 1997, certain officers of the Company
and a future stockholder (see Subsequent Events) had advanced
funds on behalf of the Company for the purchase of furniture
and equipment, lease deposit, stock purchase subscription
payment, and sundry other expenses. These amounts were either
reimbursed in cash after September 30, 1997, or converted into
a note payable in October 1997.
NOTE 3 - CAPITAL STOCK
The Company has authorized 20,000,000 of non-designated
preferred stock of which none have been issued as of the date
hereof. In addition, the Company has authorized 100,000,000
shares of common stock, $.0001 par value. As of September 30,
1997, 200,000 shares (8,000 shares after giving effect to the
reverse stock split discussed in Note 5(E) of common stock
were issued and outstanding upon the payment of $200 in cash
to the Company on September 26, 1997 (see Subsequent Events
for additional stock issuances).
NOTE 4 - INVESTMENT IN TPG CAPITAL CORPORATION
On September 26, 1997 the Company entered into an agreement
with First Agate Capital Corporation, a non-related company,
to provide services generally related to the filing of a
Registration Statement with the Securities and Exchange
Commission. As consideration for the services to be provided,
the Company entered into a Subscription Agreement to purchase
30,000 shares of common stock of TPG Capital Corporation, a
nonrelated Delaware Corporation in the amount of $150,000. As
of September 30, 1997, the Company has paid $30,000 toward
this Agreement. As of the balance sheet date, the remainder
of the Company's liability under this agreement has been
recorded as a current liability and a value has been placed on
these shares based upon the TPG Capital Corporation's current
balance sheet. The difference between the valuation allocated
to the shares subscribed to($30,000) and the total
subscription price($150,000) has been capitalized as a part of
deferred offering costs, in the amount of $120,000.
8
<PAGE>
ASPAC COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1997
NOTE 5 - SUBSEQUENT EVENTS
(A) Affiliated Company
On October 10, 1997, the Company formed a wholly-owned
subsidiary under the laws of the Cayman Islands. As of the
date of this report the subsidiary has had no on-going
activities with the exception of the establishment of a bank
account. Future financial statements will be consolidated and
include the subsidiary's financial statements.
(B) Notes Payable
On October 2, 1997 and October 27, 1997, a current shareholder
of the Company executed two promissory notes for $60,000 and
$100,000, respectively. The $60,000 Note included $30,000
that had been advanced prior to September 30, 1997 in
connection with a payment under the stock purchase
subscription agreement (Note 4), with the balance of the note
proceeds deposited directly into the Company's bank accounts.
The $100,000 note proceeds were deposited in their entirety in
the Company's bank accounts. Both notes are for a one-year
period, can be prepaid or extended, and bear interest at 5%
per annum. If extended past the maturity date, the interest
rate would increase to 7% per annum.
(C) Common Stock Issuances
In October 1997, the Company issued an additional 89,900,000
shares (3,596,000 shares after giving effect to the reverse
stock split discussed in Paragraph E) of its common stock in
exchange for cash consideration paid by the stockholders in
the amount of $89,900.
(D) Form S-1 Registration Statement
On October 23, 1997, as amended on December 10, 1997, the
Company filed a Form S-1 Registration Statement under the
Securities Act of 1933 for the sale of 450,000 shares of
common stock at a proposed offering price of $20.00 per share.
As of the date of this report, the Registration Statement has
not been declared effective, and the costs incurred to date in
connection with the filing have been shown on the accompanying
balance as deferred offering costs. As of the date of this
report, it is the intent of the Company to file an amended
Form S-1 Registration Statement changing the number of shares
being offered from 450,000 to 900,000 and the per share
offering price from $20 to $10.
9
<PAGE>
ASPAC COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1997
NOTE 5 - SUBSEQUENT EVENTS (CONT'D)
(E) Reverse Stock Split
On February 23, 1998 the Board of Directors approved and the
shareholders consented to a one-for-twenty five reverse stock
split of the Company's issued and outstanding common stock.
As a result of the reverse stock split, the Company's
outstanding common shares were reduced to 8,000 from 200,000,
and an amount of $19 was transferred from the common stock
account to the additional paid-in capital account on September
30,1997. All share quantities and per share amounts in this
report have been restated to reflect this reverse stock split.
(F) Joint Venture
On February 10, 1998 the Company signed a letter of intent to
enter into one or more cooperative joint venture agreements
with a corporation currently operating in China. The Director
of the Company is an employee of the joint venture partner.
The joint ventures will allow the Company to participate in
the construction and development of and provision of services
for a 200,000 subscriber wire-line telephone network, which
constitutes the first phase of a 2,000,000 subscriber wire-
line telephone project, and other projects in China. Under
mutual intentions expressed in the letter of intent, the
Company or its wholly owned subsidiary and the other party to
the joint venture will form one or more Sino-foreign
cooperative joint ventures and contribute pro-rata capital
contributions in the form of cash and/or tangible assets, as
agreed by both parties.
10
<PAGE>
<PAGE>
ASPAC COMMUNICATIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 1998
UNAUDITED
<PAGE>
ASPAC COMMUNICATIONS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 - ACCOUNTANTS' REVIEW REPORT
PAGE 2 - CONSOLIDATED BALANCE SHEET AS OF MARCH 31,
1998 (UNAUDITED)
PAGE 3 - CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' DEFICIENCY FOR THE PERIOD FROM
SEPTEMBER 26, 1997 (INCEPTION) TO MARCH 31,
1998 (UNAUDITED)
PAGE 4 - CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
PERIODS FROM OCTOBER 1, 1997 TO MARCH 31, 1998
AND FROM SEPTEMBER 26, 1997 (INCEPTION) TO
MARCH 31, 1998 (UNAUDITED)
PAGE 5 - CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
PERIODS FROM OCTOBER 1, 1997 TO MARCH 31, 1998
AND FROM SEPTEMBER 26, 1997 (INCEPTION) TO
MARCH 31, 1998 (UNAUDITED)
PAGE 6 - 10 - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS
OF MARCH 31, 1998 (UNAUDITED)
<PAGE>
ACCOUNTANTS' REVIEW REPORT
To the Board of Directors of:
Aspac Communications, Inc.
We have reviewed the accompanying consolidated balance sheet of Aspac
Communications, Inc. and Subsidiary (A Development Stage Company) as of
March 31, 1998 and the related consolidated statements of operations,
changes in stockholders' deficiency and cash flows for the periods from
October 1, 1997 to March 31, 1998 and September 26, 1997 (Inception) to
March 31, 1998, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of
Certified Public Accountants. All information included in these
financial statements is the representation of the management of Aspac
Communications, Inc. and Subsidiary.
A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data. It is substantially
less in scope than an audit in accordance with generally accepted
auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole.
Accordingly, we do not express any such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for
them to be in conformity with generally accepted accounting principles.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
May 13, 1998
<PAGE>
ASPAC COMMUNICATIONS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash $ 26,943
Capital stock subscription 30,000
Prepaid expenses 4,248
TOTAL CURRENT ASSETS 61,191
PROPERTY AND EQUIPMENT
Furniture and equipment 11,603
Less: accumulated depreciation 1,279
TOTAL PROPERTY AND EQUIPMENT 10,324
OTHER ASSETS
Organization costs 2,565
Deferred offering costs 128,650
Other assets 2,398
TOTAL OTHER ASSETS 133,613
TOTAL ASSETS $205,128
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accrued expenses $ 17,543
Capital stock subscription payable 60,000
Notes payable 160,000
TOTAL CURRENT LIABILITIES 237,543
STOCKHOLDERS' DEFICIENCY
Preferred stock, $0.0001 par value
20,000,000 shares authorized -
Common stock, $0.0001 par value,
100,000,000 shares authorized,
3,604,000 shares issued and outstanding 361
Additional paid-in capital 89,739
Accumulated deficit during development stage (122,515)
TOTAL STOCKHOLDERS' DEFICIENCY (32,415)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $205,128
See accompanying notes to financial statements.
2
<PAGE>
ASPAC COMMUNICATIONS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM SEPTEMBER 26, 1997
(INCEPTION) TO MARCH 31, 1998 (UNAUDITED)
ACCUMULATED
DEFICIT
ADDITIONAL DURING
COMMON PAID-IN DEVELOPMENT
STOCK CAPITAL STAGE TOTAL
Common stock issuance $ 1 $ 199 $ - $ 200
Net loss from September
26, 1997 (Inception)
to September 30, 1997 - - (11,697) (11,697)
Balance at
September 30, 1997 1 199 (11,697) (11,497)
Common stock issuance 360 89,540 - 89,900
Net loss from
October 1, 1997 to
March 31, 1998 - - (110,818) (110,818)
BALANCE AT
MARCH 31, 1998 $ 361 $ 89,739 $(122,515) $ (32,415)
See accompanying notes to financial statements.
3
<PAGE>
ASPAC COMMUNICATIONS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS FROM OCTOBER 1, 1997 TO MARCH 31, 1998 AND
SEPTEMBER 26, 1997 (INCEPTION) TO MARCH 31, 1998
(UNAUDITED)
Oct. 1, 1997 Sept. 26, 1997
to (Inception) to
March 31,1998 March 31,1998
NET SALES $ - $ -
OPERATING EXPENSE
Salaries 50,615 55,675
Rent 9,600 11,350
Office supplies and expenses 3,256 5,320
Payroll taxes 4,201 4,806
Payroll processing 241 241
Telephone expenses 1,988 3,188
Parking fees 2,750 2,750
Insurance 1,920 1,920
Other taxes 7,728 8,628
Legal and professional fees 20,986 20,986
Consulting fees 2,000 2,000
Depreciation 1,160 1,279
Amortization of organization costs 135 135
Bank charges 195 195
Other expenses 1,202 1,201
Total operating expenses 107,977 119,674
OTHER INCOME (EXPENSE)
Interest income 812 812
Interest expense (3,653) (3,653)
Total other income (expense) (2,841) (2,841)
NET LOSS DURING DEVELOPMENT STAGE $(110,818) $(122,515)
NET LOSS PER COMMON SHARE (0.0359) (0.0406)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 3,084,984 3,019,166
See accompanying notes to financial statements.
4
<PAGE>
ASPAC COMMUNICATIONS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS FROM OCTOBER 1, 1997 TO MARCH 31, 1998 AND
SEPTEMBER 26, 1997 (INCEPTION) TO MARCH 31, 1998
(UNAUDITED)
Oct. 1, 1997 Sept. 26, 1997
to (Inception) to
March 31, 1998 March 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (110,818) $ (122,515)
Adjustments to reconcile net loss
to net cash used in
operating activities:
Depreciation 1,160 1,279
Amortization 135 135
Changes in assets and liabilities
(Increase) decrease in:
Prepaid expenses (4,248) (4,248)
Other assets 2 (2,398)
Increase (decrease) in:
Accrued expenses 10,474 17,543
Net cash used in
operating activities (103,295) (110,204)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (6,357) (11,603)
Deferred offering costs (8,650) (8,650)
Organizational costs (2,700) (2,700)
Payments under stock purchase
subscription agreement (60,000) (90,000)
Net cash used in
investing activities (77,707) (112,953)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings 130,000 160,000
Proceeds from sale of common stock 89,900 90,100
Repayment of advances (12,155) -
Net cash provided by
financing activities 207,745 250,100
INCREASE IN CASH AND CASH EQUIVALENTS 26,743 26,943
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 200 -
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 26,943 $ 26,943
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION - NONCASH TRANSACTION:
The company incurred debt in the total amount of $150,000 under a stock
subscription agreement. At March 31, 1997, the unpaid portion of this debt
amounted to $60,000.
See accompanying notes to financial statements.
<PAGE>
ASPAC COMMUNICATIONS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 1998
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Business Activity
Aspac Communications, Inc. (formerly known as TPG Management
Corporation) was incorporated in the State of Delaware on June
1, 1994. On September 26, 1997 the Corporation's name was
changed to Aspac Communications, Inc. (the Company). Prior to
September 26, 1997, no stock had ever been issued in the
Company.
The Company is operating as a Development Stage Company and
intends to develop and/or construct telecommunication and
internet networks in the Far East including the People's
Republic of China. The Company is also considering operating
in other parts of the world, including the United States.
(B) Principles of Consolidation
The accompanying consolidated financial statements includes
the accounts of Aspac Holdings, Inc., a wholly owned
subsidiary of the Company incorporated on October 10, 1997
under the laws of the Cayman Islands. All significant
intercompany balances and transactions have been eliminated in
consolidation. As of the date of this report, the subsidiary
has had no ongoing activities with the exception of
establishment of a bank account and the incurrance of
organization costs.
(C) Use of Estimates
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles. The
preparation of financial statements in accordance with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those
estimates.
(D) Cash and Cash Equivalents
For purposes of the statement of cash flow, the Company
considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash
equivalents.
6
<PAGE>
ASPAC COMMUNICATIONS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 1998
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
(E) Property and Equipment
Property and equipment is stated at cost and depreciated using
the straight-line method over the estimated economic useful
lives of 3 to 7 years. Expenditures for maintenance and
repairs are charged to expense as incurred. Major
improvements are capitalized.
(F) Organization Costs
Organization costs are being amortized on a straight-line
basis over a period of 5 years.
(G) Earnings Per Share
The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share"
(SFAS 128) in February 1997. This pronouncement establishes
standards for computing and presenting earnings per share and
is effective for financial statements issued for periods
ending after December 15, 1997. SFAS 128 was adopted by the
Company as of December 31, 1997.
(H) Income Taxes
The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes" (SFAS 109). SFAS 109 is an asset and liability
approach that requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences of
events that have been recognized in the Company's financial
statements or tax returns. In estimating future tax
consequences, SFAS 109 generally considers all expected future
events other than enactments of changes in the tax law or
rates. The Company's available deferred tax asset of
approximately $31,000, arising from the accumulated operating
loss carryforwards, has not been reflected in the financial
statements because a deferred tax valuation allowance has been
recorded for the entire amount. The Company's net operating
losses expire beginning in year 2017.
7
<PAGE>
ASPAC COMMUNICATIONS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 1998
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
(I) New Accounting Pronouncements
The Financial Accounting Standards Board has recently issued
several new accounting pronouncements. Statement No. 129,
"Disclosure of Information about Capital Structure"
establishes standards for disclosing information about an
entity's capital structure, is effective for financial
statements for periods ending after December 15, 1997 and has
been adopted by the Company as of December 31, 1997.
Statement No. 130, "Reporting Comprehensive Income"
establishes standards for reporting and display of
comprehensive income and its components, and is effective for
fiscal years beginning after December 15, 1997. Statement No.
131, "Disclosures about Segments of an Enterprise and Related
Information" establishes standards for the way that public
business enterprises report information about operating
segments in annual financial statements and requires that
those enterprises report selected information about operating
segments in interim financial reports issued to shareholders.
It also establishes standards for related disclosures about
products and services, geographic areas, and major customers,
and is effective for financial statements for periods
beginning after December 15, 1997. The Company believes that
its future adoption of Statements 130 and 131 will not have a
material effect on the Company's financial position or results
of operations.
NOTE 2 - NOTES PAYABLE
On October 2, 1997 and October 27, 1997, a current shareholder
of the Company executed two promissory notes for $60,000 and
$100,000, respectively. The $60,000 Note included $30,000
that had been advanced prior to September 30, 1997 in
connection with a payment under the stock purchase
subscription agreement (Note 3), with the balance of the note
proceeds deposited directly into the Company's bank accounts.
The $100,000 note proceeds were deposited in their entirety in
the Company's bank accounts. Both notes are for a one-year
period, can be prepaid or extended, and bear interest at 5%
per annum. If the notes are extended past the maturity dates,
the interest rate will increase to 7% per annum.
8
<PAGE>
ASPAC COMMUNICATIONS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 1998
(UNAUDITED)
NOTE 3 - INVESTMENT IN TPG CAPITAL CORPORATION
On September 26, 1997, the Company entered into an agreement
with First Agate Capital Corporation, a non-related company,
to provide services generally related to the filing of a
Registration Statement with the Securities and Exchange
Commission. As consideration for the services to be provided,
the Company entered into a Subscription Agreement to purchase
30,000 shares of common stock of TPG Capital Corporation (a
6.2241% interest), a nonrelated Delaware Corporation in the
amount of $150,000. As of March 31, 1998, the Company has
paid $90,000 toward this Agreement. As of the balance sheet
date, the remainder of the Company's liability under this
Agreement has been recorded as a current liability and a value
has been placed on these shares based upon the TPG Capital
Corporation's current balance sheet. The difference between
the valuation allocated to the shares subscribed to ($30,000)
and the total Subscription price ($150,000) has been
capitalized as a part of deferred offering costs in the amount
of $120,000.
NOTE 4 - FORM S-1 REGISTRATION STATEMENT
Form S-1 Registration Statement
On October 23, 1997, as amended on December 10, 1997, the
Company filed a Form S-1 Registration Statement under the
Securities Act of 1933 for the sale of 450,000 shares of
common stock at a proposed offering price of $20.00 per share.
This Registration Statement has never been declared effective.
On March 16, 1998, the Company filed a second amendment to the
Form S-1 Registration Statement changing the number of shares
being offered from 450,000 to 900,000 and the per share
offering price from $20 to $10. As of the date of this
report, the Registration Statement, as amended on March 16,
1998, has not been declared effective and all costs incurred
to date in connection with the filing have been shown in the
accompanying balance sheet as deferred offering costs.
9
<PAGE>
ASPAC COMMUNICATIONS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 1998
(UNAUDITED)
NOTE 5 - REVERSE STOCK SPLIT
On February 23, 1998 the Board of Directors approved and the
shareholders consented to a one-for-twenty five reverse stock
split of the Company's issued and outstanding common stock.
As a result of the reverse stock split, the Company's quantity
of outstanding common stock was reduced to 3,604,000 from
90,100,000. All share quantities and per share amounts in
these financial statements have been restated to reflect this
reverse stock split, and an amount of $8,650 was transferred
from the common stock account to the additional paid in
capital account.
NOTE 6 - JOINT VENTURE
On February 10, 1998 the Company signed a letter of intent to
enter into one or more cooperative joint venture agreements
with a corporation currently operating in China. The Director
of the Company is an employee of the joint venture partner.
The joint ventures will allow the Company to participate in
the construction and development of and provision of services
for a 200,000 subscriber wire-line telephone network, which
constitutes the first phase of a 2,000,000 subscriber wire-
line telephone project, and other projects in China. Under
mutual intentions expressed in the letter of intent, the
Company or its wholly owned subsidiary and the other party to
the joint venture will form one or more Sino-foreign
cooperative joint ventures and contribute pro-rata capital
contributions in the form of cash and/or tangible assets, as
agreed by both parties.
10
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS.
3.1* Restated Certificate of Incorporation and amendments
3.2 * By-laws
10.1* Lease Agreement
10.2* Employment agreement with Marc F. Mayeres
10.3* Promissory Note with Finhorn Enterprise Limited
10.4* Letter of Intent with Hebei Unicom
10.5* Consulting Agreement with Li-Ping Wang
10.6* Consulting Agreement with Lei He
24.1* Consent of Accountant
27* Financial Data Schedule
- ---------------
* Filed herewith
(b) The following financial statement schedules are included in
this Registration Statement.
None.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Los Angeles, California on the 10th day of June, 1998.
ASPAC COMMUNICATIONS, INC.
By:/s/ Marc F. Mayeres
President
Pursuant to the requirements of the Securities Act of 1934, as
amended, this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Liancheng Ji Director June 10, 1998
Liancheng Ji
RESTATED CERTIFICATE OF INCORPORATION
of
ASPAC COMMUNICATIONS, INC.
The original Certificate of Incorporation was filed on June 1, 1994.
The Corporation was originally incorporated as TPG Management
Corporation. This Restated Certificate of Incorporation has been duly
adopted in accordance with Section 245 of the Delaware General
Corporation Code and restates and integrates provisions of the
Corporation's Certificate of Incorporation and does not further amend any
such provisions.
ARTICLE ONE
Name
The name of the Corporation is Aspac Communications, Inc. (the
"Corporation").
ARTICLE TWO
Duration
The Corporation shall have perpetual existence.
ARTICLE THREE
Purpose
The purpose for which this Corporation is organized is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware.
ARTICLE FOUR
Shares
Authorized Capital. The total number of shares of stock which the
Corporation shall have authority to issue is 120,000,000 shares, consisting
of 100,000,000 shares of Common Stock having a par value of $.0001 per
share and 20,000,000 shares of Preferred Stock having a par value of
$.0001 per share.
The Board of Directors is authorized to provide for the issuance of the
shares of Preferred Stock in series and, by filing a certificate pursuant to
the applicable law of the State of Delaware, to establish from time to time
the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series of
Preferred Stock shall include, but not be limited to, determination of the
following:
A. The number of shares constituting that series and the distinctive
designation of that series;
B. The dividend rate on the shares of that series, whether dividends
shall be cumulative, and, if so, from which date or dates, and the relative
rights of priority, if any, of payment of dividends on share of that series;
C. Whether that series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting rights;
D. Whether that series shall have conversion privileges, and, if so, the
terms and conditions of such conversion, including provision for adjustment
of the conversion rate in such events as the Board of Directors shall
determine;
E. Whether or not the shares of that series shall be redeemable, and, if
so, the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable, and the amount per share
payable in case of redemption, which amount may vary under different
conditions and at different redemption dates;
F. Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount of such
sinking fund;
G. The rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, and
the relative rights of priority, if any, of payment of shares of that series;
and
H. Any other relative rights, preferences and limitations of that series.
ARTICLE FIVE
Commencement of Business
The Corporation is authorized to commence business as soon as its
certificate of incorporation has been filed.
ARTICLE SIX
Principal Office and Registered Agent
The post office address of the initial registered office of the Corporation
and the name of its initial registered agent and its business address is
The Prentice Hall Corporation System, Inc.
1013 Centre Road
Wilmington, Delaware 19805
The initial registered agent is a resident of the State of Delaware.
ARTICLE SEVEN
Incorporator
James M. Cassidy, 1504 R Street, N.W., Washington, D.C. 20009.
ARTICLE EIGHT
Pre-Emptive Rights
No Shareholder or other person shall have any pre-emptive rights
whatsoever.
ARTICLE NINE
By-Laws
The initial by-laws shall be adopted by the Shareholders or the Board of
Directors. The power to alter, amend, or repeal the by-laws or adopt new
by-laws is vested in the Board of directors, subject to repeal or change by
action of the Shareholders.
ARTICLE TEN
Number of Votes
Each share has one vote on each matter on which the share is entitled to
vote.
ARTICLE ELEVEN
Majority Votes
A majority vote of a quorum of Shareholders (consisting of the holders
of a majority of the shares entitled to vote, represented in person or by
proxy) is sufficient for any action which requires the vote or concurrence of
Shareholders, unless otherwise required or permitted by law or the by-laws
of the Corporation.
ARTICLE TWELVE
Non-Cumulative Voting
Directors shall be elected by majority vote. Cumulative voting shall not
be permitted.
ARTICLE THIRTEEN
Interested Directors, Officers and Security holders
A. Validity. If Paragraph (B) is satisfied, no contract or other
transaction between the Corporation and any of its directors, officers or
Security holders, or any corporation or firm in which any of them are
directly or indirectly interested, shall be invalid solely because of this
relationship or because of the presence of the director, officer or security
holder at the meeting of the Board of directors or committee authorizing the
contract or transaction, or his participation or vote in the meeting or
authorization.
B. Disclosure, Approval, Fairness. Paragraph (A) shall apply only if:
(1) The material facts of the relationship or interest of each such
director, officer or security holder are known or disclosed:
(a) to the Board of directors or the committee and it nevertheless
authorizes or ratifies the contract or transaction by a majority of the
directors present, each such interested director to be counted in determining
whether a quorum is present but not in calculating the majority
necessary to carry the vote; or
(b) to the Shareholders and they nevertheless authorize or ratify the
contract or transaction by a majority of the shares present, each such
interested person to be counted for quorum and voting purposes; or
(2) the contract or transaction is fair to the Corporation as of the time
it is authorized or ratified by the Board of directors, the committee or the
Shareholders.
ARTICLE FOURTEEN
Indemnification and Insurance
A. Persons. The Corporation shall indemnify, to the extent provided in
Paragraphs (B), (D) or (F):
(1) any person who is or was director, officer, agent or employee of the
Corporation, and
(2) any person who serves or served at the Corporation's request as a
director, officer, agent, employee, partner or trustee of another corporation or
of a partnership, joint venture, trust or other enterprise.
B. Extent--Derivative Suits. In case of a suit by or in the right of the
Corporation against a person named in Paragraph (A) by reason of his holding
a position named in Paragraph (A), the Corporation shall indemnify him, if he
satisfies the standard in Paragraph (C), for expenses (including attorney's fees
but excluding amounts paid in settlement) actually and reasonably incurred by
him in connection with the defense or settlement of the suit.
C. Standard--Derivative Suits. In case of a suit by or in the right of
the Corporation, a person named in Paragraph (A) shall be indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the subject of the
suit, and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Corporation. However, he shall not be indemnified in
respect of any claim, issue or matter as to which he has been adjudged liable
for negligence or misconduct in the performance of his duty to the Corporation
unless (and only to the extent that) the court in which the suit was brought
shall determine, upon application, that despite the adjudication but in view of
all the circumstances, he is fairly and reasonably entitled to indemnity for
such expenses as the court shall deem proper.
D. Extent--Nonderivative Suits. In case of a suit, action or proceeding
(whether civil, criminal, administrative or investigative), other than a suit by
or in the right of the Corporation against a person named in Paragraph (A) by
reason of his holding a position named in Paragraph (A), the Corporation shall
indemnify him, if he satisfies the standard in Paragraph (E), for amounts
actually and reasonably incurred by him in connection with the defense or
settlement of the suit as
(1) expenses (including attorneys' fees),
(2) amounts paid in settlement
(3) judgments, and
(4) fines.
E. Standard--Nonderivative Suits. In case of a nonderivative suit, a
person named in Paragraph (A) shall be indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the subject of the
nonderivative suit, and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Corporation and , with respect to any
criminal action or proceeding, he had no reason to believe his conduct was
unlawful. The termination of a nonderivative suit by judgement, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the person failed to satisfy
this Paragraph (E) (2).
F. Determination That Standard Has Been Met. A determination that the
standard of Paragraph c or (E) has been satisfied may be made by a court of
law or equity or the determination may be made by:
(1) a majority of the directors of the Corporation (whether or not a
quorum) who were not parties to the action, suit or proceeding, or
(2) independent legal counsel (appointed by a majority of the directors of
the Corporation, whether or not a quorum, or elected by the Shareholders of
the Corporation) in a written opinion, or
(3) the Shareholders of the Corporation.
G. Proration. Anyone making a determination under Paragraph (F) may
determine that a person has met the standard as to some matters but not as to
others, and may reasonably prorate amounts to be indemnified.
H. Advance Payment. The Corporation may pay in advance any expenses
(including attorney's fees) which may become subject to indemnification under
paragraphs (A) - (G) if:
(1) the Board of directors authorizes the specific payment and
(2) the person receiving the payment undertakes in writing to repay unless
it is ultimately determined that he is entitled to indemnification by the
Corporation under Paragraphs (A) - (G).
I. Nonexclusive. The indemnification provided by Paragraphs (A) - (G)
shall not be exclusive of any other rights to which a person may be entitled by
law or by by-law, agreement, vote of Shareholders or disinterested directors,
or otherwise.
J. Continuation. The indemnification and advance payment provided by
Paragraphs (A) - (H) shall continue as to a person who has ceased to hold a
position named in paragraph (A) and shall inure to his heirs, executors and
administrators.
K. Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who holds or who has held any position named in
Paragraph (A) against any liability incurred by him in any such positions or
arising out of this status as such, whether or not the Corporation would have
power to indemnify him against such liability under Paragraphs (A) - (H).
L. Reports. Indemnification payments, advance payments, and insurance
purchases and payments made under Paragraphs (A) - (K) shall be reported in
writing to the Shareholders of the Corporation with the next notice of annual
meeting, or within six months, whichever is sooner.
ARTICLE FIFTEEN
Limitation On Director Liability
A. Scope of Limitation. No person, by virtue of being or having been a
director of the Corporation, shall have any personal liability for monetary
damages to the Corporation or any of its Shareholders for any breach of
fiduciary duty except as to the extent provided in Paragraph (B).
B. Extent of Limitation. The limitation provided for in this Article
shall not eliminate or limit the liability of a director to the Corporation
or its Shareholders (I) for any breach of the director's duty of loyalty to
the Corporation or its Shareholders (ii) for any acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law
(iii) for any unlawful payment of dividends or unlawful stock purchases or
redemptions in violation of Section 174 of the General Corporation Law of
Delaware or (iv) for any transaction for which the director derived an
improper personal benefit.
C. Amendment of Article. Any changes in the General Corporation Law
of Delaware increasing, decreasing, amending, changing or otherwise effecting
the indemnification of directors, officers, agents, or employees of the
Corporation shall be incorporated by reference in this Article as of the date of
such changes without further action by the Corporation, its Board of directors,
of Shareholders, it being the intention of this Article that directors,
officers, agents and employees of the Corporation shall be indemnified to
the maximum degree allowed by the General Corporation Law of the State of
Delaware at all times.
IN WITNESS WHEREOF, I have hereunto set my hand this 29th day of
September, 1997.
__________________________________
Incorporator
CERTIFICATE OF AMENDMENT
TO
ASPAC COMMUNICATIONS, INC.
CERTIFICATE OF INCORPORATION
Aspac Communications, Inc. (the "Corporation"), a corporation organized
and existing under the Delaware General Corporation Law, hereby certifies as
follows:
FIRST: As of February 23, 1998, the Corporation had 90,100,000 shares of
common stock issued and outstanding.
SECOND: by unanimous consent of the Board of Directors on February 23,
1998 and by unanimous written consent without a meeting of the shareholder(s)
datedFebruary 23, 1998, an amendment to the Certificate of Incorporation of the
Corporation, as written below, was adopted in accordance with Section 242 of the
Delaware General Corporation Law to effect a 1-for-25 reverse stock split (the
"Reverse Stock Split") of the shares of common stock outstanding as of
February 23, 1998.
THIRD: Article Four to the Certificate of Incorporation shall be
amended to reflect the Reverse Stock Split and shall be amended to read as
follows:
"Shares
Authorized Capital. The total number of shares of stock which the
Corporation shall have authority to issue is 120,000,000 shares,
consisting of 100,000,000 shares of Common Stock having a par value
of $.0001 per share and 20,000,000 shares of Preferred Stock having a
par value of $.0001 per share.
The Board of Directors is authorized to provide for the issuance of
the shares of Preferred Stock in series and, by filing a certificate
pursuant to the applicable law of the State of Delaware, to establish
from time to time the number of shares to be included in each such
series, and to fix the designation, powers, preferences and rights of the
shares of each such series and the qualifications, limitations or
restrictions thereof.
The authority of the Board of Directors with respect to each series
of Preferred Stock shall include, but not be limited to, determination of
the following:
A. The number of shares constituting that series and the distinctive
designation of that series;
B. The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or dates, and
the relative rights of priority, if any, of payment of dividends on share
of that series;
C. Whether that series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting
rights;
D. Whether that series shall have conversion privileges, and, if so,
the terms and conditions of such conversion, including provision for
adjustment of the conversion rate in such events as the Board of
Directors shall determine;
E. Whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption, including the
date or dates upon or after which they shall be redeemable, and the
amount per share payable in case of redemption, which amount may
vary under different conditions and at different redemption dates;
F. Whether that series shall have a sinking fund for the redemption
or purchase of shares of that series, and, if so, the terms and amount of
such sinking fund;
G. The rights of the shares of that series in the event of voluntary
or involuntary liquidation, dissolution or winding up of the
Corporation, and the relative rights of priority, if any, of payment of
shares of that series; and
H. Any other relative rights, preferences and limitations of that
series.
Each share of Common Stock, $.0001 par value per share, of the
Corporation outstanding or held in treasury immediately prior to this
Amendment to Article Four of the Corporation's Restated Certificate of
Incorporation becoming effective (the "Old Common Stock") shall,
without any action on the part of the respective holders thereof, be
reclassified as and changed into one-twenty-fifth of a share of New
Common Stock of the Corporation, so that each twenty-five shares of
Old Common Stock of the Corporation held by a shareholder of the
Corporation or in treasury shall be reclassified as and changed into one
share of New Common Stock. No fractional shares of New Common
Stock shall be issued upon such reclassification and conversion, and the
number of shares of New Common Stock to be issued shall be rounded
up to the nearest whole share.
The capital of the Corporation attributable to the shares of New
Common Stock into which the Old Common Stock shall be reclassified
and changed in the aggregate shall be the same as the capital of the
Corporation attributable to the shares of Old Common Stock so
reclassified and changed. Each stock certificate that, immediately prior
to the time that the foregoing becomes effective represents shares of
Old Common Stock shall, from and after the time that the foregoing
amendment becomes effective, automatically and without the necessity
of presenting the same for exchange, represent the same number of
shares of New Common Stock as shall be determined hereby."
IN WITNESS WHEREOF, I have hereunto set my hand this _______ day of
March, 1998.
/s/ Marc F. Mayeres
____________________________
Marc F. Mayeres
President
CERTIFICATE OF AMENDMENT
TO
ASPAC COMMUNICATIONS, INC.
CERTIFICATE OF INCORPORATION
June 8, 1998
Aspac Communications, Inc. (the "Corporation"), a
corporation organized and existing under the Delaware General
Corporation Law, hereby certifies as follows:
FIRST: As of May 26, 1998, the Corporation had 3,604,000
shares of common stock issued and outstanding.
SECOND: by unanimous consent of the Board of Directors on
May 26, 1998 and by unanimous written consent without a meeting
of the shareholder(s) dated May 26, 1998, an amendment to the
Certificate of Incorporation of the Corporation, as written
below, was adopted in accordance with Section 242 of the Delaware
General Corporation Law to effect a 5-for-1 stock split (the
"Stock Split") of the shares of common stock outstanding as of
May 26, 1998.
THIRD: Article Four to the Certificate of
Incorporation shall be amended to reflect the Stock Split and
shall be amended to read as follows:
"SHARES
Authorized Capital. The total number of shares
of stock which the Corporation shall have authority to
issue is 120,000,000 shares, consisting of 100,000,000
shares of Common Stock having a par value of $.0001 per
share and 20,000,000 shares of Preferred Stock having a
par value of $.0001 per share.
The Board of Directors is authorized to provide
for the issuance of the shares of Preferred Stock in
series and, by filing a certificate pursuant to the
applicable law of the State of Delaware, to establish
from time to time the number of shares to be included
in each such series, and to fix the designation,
powers, preferences and rights of the shares of each
such series and the qualifications, limitations or
restrictions thereof.
The authority of the Board of Directors with
respect to each series of Preferred Stock shall
include, but not be limited to, determination of the
following:
A. The number of shares constituting that series
and the distinctive designation of that series;
B. The dividend rate on the shares of that
series, whether dividends shall be cumulative, and, if
so, from which date or dates, and the relative rights
of priority, if any, of payment of dividends on share
of that series;
C. Whether that series shall have voting rights,
in addition to the voting rights provided by law, and,
if so, the terms of such voting rights;
D. Whether that series shall have conversion
privileges, and, if so, the terms and conditions of
such conversion, including provision for adjustment of
the conversion rate in such events as the Board of
Directors shall determine;
E. Whether or not the shares of that series
shall be redeemable, and, if so, the terms and
conditions of such redemption, including the date or
dates upon or after which they shall be redeemable, and
the amount per share payable in case of redemption,
which amount may vary under different conditions and at
different redemption dates;
F. Whether that series shall have a sinking fund
for the redemption or purchase of shares of that
series, and, if so, the terms and amount of such
sinking fund;
G. The rights of the shares of that series in
the event of voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, and the
relative rights of priority, if any, of payment of
shares of that series; and
H. Any other relative rights, preferences and
limitations of that series.
Reverse Stock Split of February 23, 1998:
Each share of Common Stock, $.0001 par value per
share, of the Corporation outstanding or held in
treasury immediately prior to this Amendment to Article
Four of the Corporation's Restated Certificate of
Incorporation becoming effective (the "Old Common
Stock") shall, without any action on the part of the
respective holders thereof, be reclassified as and
changed into one-twenty-fifth of a share of New Common
Stock of the Corporation, so that each twenty-five
shares of Old Common Stock of the Corporation held by a
shareholder of the Corporation or in treasury shall be
reclassified as and changed into one share of New
Common Stock. No fractional shares of New Common Stock
shall be issued upon such reclassification and
conversion, and the number of shares of New Common
Stock to be issued shall be rounded up to the nearest
whole share.
The capital of the Corporation attributable to
the shares of New Common Stock into which the Old
Common Stock shall be reclassified and changed in the
aggregate shall be the same as the capital of the
Corporation attributable to the shares of Old Common
Stock so reclassified and changed. Each stock
certificate that, immediately prior to the time that
the foregoing becomes effective represents shares of
Old Common Stock shall, from and after the time that
the foregoing amendment becomes effective,
automatically and without the necessity of presenting
the same for exchange, represent the same number of
shares of New Common Stock as shall be determined
hereby.
Stock Split of May 26, 1998:
Each share of Common Stock, $.0001 par value per
share, of the Company outstanding or held in treasury
immediately prior to this Amendment to Article Four of the
Company's Restated Certificate of Incorporation becoming
effective (the "Old Common Stock") shall, without any action
on the part of the respective holders thereof, be
reclassified as and changed into five shares of New Common
Stock of the Company, so that each one share of Old Common
Stock of the Company held by a stockholder of the Company or
in treasury shall be reclassified as and changed into five
shares of New Common Stock.
The capital of the Company attributable to the shares
of New Common Stock into which the Old Common Stock shall be
reclassified and changed in the aggregate shall be the same
as the capital of the Company attributable to the shares of
Old Common Stock so reclassified and changed. Each stock
certificate that, immediately prior to the time that the
foregoing becomes effective represents shares of Old Common
Stock shall, from and after the time that the foregoing
amendment becomes effective, automatically and without the
necessity of presenting the same for exchange, represent the
same number of shares of New Common Stock as shall be
determined hereby."
IN WITNESS WHEREOF, I have hereunto set my hand this
9th day of June, 1998.
/s/ Marc F. Mayeres
President
THIS LEASE IS NOT TO BE CONSTRUED AS AN OFFER
AND IS NOT BINDING ON
BARRISTER EXECUTIVE SUITES, INC.
UNTIL IT IS SIGNED BY AN OFFICER OF
BARRISTER EXECUTIVE SUITES, INC.
LEASE AGREEMENT
THIS LEASE is made on August 28, 1997 between Barrister Executive
Suites, Inc., a California Corporation, (hereinafter referred to as "Lessor")
and
Aspac Communications, Inc.
(hereinafter referred to as "Lessee").
Lessor has entered into a master lease for the floor (the "Suite")
described below:
Floor or Suite Number: 12TH FLOOR OR SUITE 1200
Name of Building: TWO CENTURY PLAZA
Address: TWO CENTURY PARK EAST
City and State: LOS ANGELES,
CALIFORNIA 90067
This Lease is subordinate to the lease with the Building ("Master Lease"),
dated October 9, 1992 (as amended). See Paragraph 10.
Lessee desires to lease from Lessor a certain portion of the Suite for the
purpose of conducting Lessee's business together with rights in common to
the "common areas" of the Suite.
In consideration of the covenants and promises each to the other made
herein, the parties hereto agree as follows:
1. LEASED PREMISES. Lessor agrees to lease to Lessee and
Lessee agrees to lease from Lessor portions of the Suite described below
(the "Premises") and on the floor plan attached hereto as Exhibit A. In
addition to the exclusive use of the Premises, Lessee shall have the non-
exclusive right in common with Lessor's other lessees to use all common
areas and facilities available in the Suite. Except as otherwise agreed to in
writing, Lessee takes the Premises in an "as is" condition.
(a) Office No(s). 24
(b) Desk Space No(s). N/A
Lessee shall be prohibited from using or occupying any premises other
than those premises designated in the Lease as the Premises. In the event
that Lessee uses or occupies any space other than the Premises without
Lessor's written consent, Lessee shall pay Lessor a sum designated by
Lessor for the unauthorized use of said Premises.
2. TERM. Except as it may be modified by the applicable provisions
of this
Agreement, the term of this Lease shall be for a period of * year,
commencing on September 1, 1997, and expiring on February 28, 1998,
unless terminated sooner pursuant to paragraph 10.c of this Lease. If the
term commences on
a day other than the first of the month, the term shall expire on the last day
of the month
identified herein.
In the event the Premises are not ready for occupancy on the
commencement date, this Lease shall remain in full force and effect
provided Lessor makes the Premises available for occupancy with forty-five
(45) days of the scheduled commencement date. In such case, all rent shall
be abated until Lessor makes the Premises available for occupancy. Lessor
shall not be liable to Lessee for any loss or damage arising from any delays:
Lessee's sole remedy shall be the right to cancel this Lease in the event
Lessor fails to deliver possession of the Premises as set forth herein. Lessee
is advised that any floor plans provided by Lessor are not to scale, the
measurements are not always accurate, and the Premises are not always
built exactly as shown on the floor plans.
Either party may terminate this Lease at the expiration date set forth
herein by given thirty (30) days advance written notice effective on the
expiration date set forth on page one (1) of this Lease. If neither party sends
written notice of termination to the other party thirty (30) days in advance
of the expiration date, this Lease shall automatically become a month-to-
month agreement requiring at least thirty (30) days advance written notice
to terminate the Lease, effective the end of the month. If the Lease has
expired and become a month-to-month agreement, or if the original term of
the Lease is month-to-month , thirty (30) days advance written notice of
termination is required, and any such termination shall only be effective the
end of the month. For Example: If written notice of termination is received
by either party by the first working day of the month, any such notice shall
be effective at the end of that same month. If written notice of termination
is received by either party after the first working day of the month, any
such notice shall not be effective until the end of the following month.
Lessor's rent increase notice is not to be construed as a termination notice.
3. RENT, Lessee agrees to pay Lessor as rental for the Premises the
following monthly sums:
$ 1,600.00 Office(s)
$ -0- Desk Space(s)
$ 1,600.00 Total monthly rent
The above rent shall apply during the first six (6) full calendar months
of the term of this Lease only. In addition to the above rent, Lessee shall be
obligated to pay rent for any space within the Suite which Lessee occupies
but which is not included in the Premises (the "unrented space"). Lessee's
obligation for said unrented space shall be at the rate set forth in Lessor's
written notice to Lessee concerning Lessee's occupancy of the unrented
space. Lessees's obligation to pay rent for the unrented space shall be
effective as of the day in which Lessor gives Lessee written notice of the
rent to be paid for said space, and occupancy of the unrented space shall be
subject to all terms and conditions of this Lease.
The terms and conditions of this Lease are confidential, and Lessee agrees
not to reveal said terms and conditions to any third parties. Lessee's
disclosure of the terms and conditions of this Lease shall be cause for
Lessor at Lessor's sole discretion to immediately terminate this Lease, or
adjust Lessee's rental rates to Lessor's current asking price.
Rent shall be payable on or before the first day, of each and every calendar
month during the term hereof. If the term commences on a day other than
the first day of the calendar month, rent shall be prorated based on the
portion of the calendar month remaining. Lessee's first payment shall
include one mont's full rent plus the security deposit.
In addition to payment of the rent set forth herein, Lessee agrees to the
following: from the payment made by Lessee, Lessor shall first apply such
sums as are necessary to meet any of Lessee's outstanding obligations to
Lessor. Said obligation may arise from matters such as services Lessor
provides Lessee. Any remaining balance shall then be applied to Lessee's
rent obligation in the amount set forth above. In the event such remaining
balance is not sufficient to meet Lessee's rental obligation, Lessee shall pay
upon written demand by Lessor any remaining sums due. Failure to pay
said sums when so demanded shall constitute an event of default under this
Lease.
Any and all sums Lessee is obligated to pay under the terms of this
Lease shall be construed as rent obligations in addition to the monthly rent
set forth herein. Such additional rent shall include a service charge of
Twenty-Five Dollars ($25.00) for each of Lessee's dishonored checks
returned by the institution on which said checks are drawn. If at any time
during the term of this Lease Lessee has tendered payment by check and
Lessee's bank returns more than one such payment for any reason including
insufficient funds, Lessor may, at its option, require all future payments be
made by cashier's check. A Two Hundred Dollar ($200.00) handling charge
for each Three Day Notice or Notice of Termination of Services which
Lessor is required to serve upon Lessee due to the Lessee's failure to make
timely rent payments or breach of any other term or condition of this Lease
shall be assessed against Lessee to be paid with the monthly rent in the
event more than one of either notice is served during the term of the Lease.
Should Lessee not tender payment of the rent by the first (1st) day of each
month, a late charge shall be assessed in an amount of five cents ($0.05) for
each dollar ($1.00) so overdue for the purpose of defraying the expense
incident to handling such delinquent payment. In addition, Lessor may
discontinue any and all services provided Lessee, including, but not limited
to, use of all common areas, e.g., library and conference room, telephone
answering service, photocopying, word processing and legal research.
Lessee hereby releases Lessor, its employees, agents, principals and
contractors from any liability for damages which Lessee may suffer as a
result of Lessor's suspension of services for the reasons stated herein.
4. SECURITY DEPOSIT. Upon execution of this Lease by Lessee,
Lessee will pay a security deposit in an amount of $2,400.00 which is equal
to one and one-half (1 1/2) times the monthly rent, as security for the
performance by Lessee of its obligations under this Lease. The security
deposit will not be interest-bearing to Lessee. Lessor will retain the security
deposit during Lessee's tenancy. Lessee shall not apply the security deposit
as rent. If Lessee remains in the Premises after the expiration date of this
Lease, the security deposit will be retained by Lessor until Lessee moves
out of the Premises. Lessor may claim and retain such amount of Lessee's
security deposit as is reasonable necessary to remedy any defaults of the
Lessee in the payment of rent or services, to repair damages to the Premises
caused by the Lessee (normal wear and tear excepted) replacement of keys
any other outstanding obligations to Lessor, and Lessor may, at its option
and at any time during the term of this Lease, treat the security deposit as a
partial payment applied toward Lessee's obligation for the Premises during
Less's last month of occupancy of the same. The parties expressly agree
that the security deposit is made for all of the aforesaid specific purposes.
At all times Lessee shall maintain a security deposit with Lessor in an
amount equal to one and one-half (1 1/2) times the monthly rent paid by
Lessee for the Premises. Lessor shall bill Lessee for any such additional
security deposit as required.
5. USE. Lessee shall use the Premises solely for
TELECOMMUNICATIONS and for no other purpose. Lessee shall not do
or permit anything to be done in or about the Suite and Premises which will
in any way obstruct or interfere with the right of other tenants or occupants
of the Suite, or injure or annoy them, or use or allow the Premises to be
used for any improper, immoral, unlawful or objectionable purpose, nor
shall Lessee cause, maintain or permit any nuisance in, on or about the
Premises. Lessee shall not commit or suffer to be committed any waste in
or upon the Premises. Lessee agrees that Lessee will not offer or use
Premises to provide to others, services provided by Lessor to Lessor's other
lessees. (I.E. Fax Machine, Copiers, etc.)
6. DEFAULTS AND REMEDIES.
Lessee's Defaults. Any of the following occurrences shall constitute
a "material" default by Lessee:
(a) If Lessee fails to make any payment of rent, additional security
deposit or any other payment required to be made by Lessee hereunder as
and when due.
(b) If Lessee withholds rent, deducts or offsets from rent or services
due hereunder any amount for any reason.
(c) If Lessee occupies, uses or stores any personal property in any
unrented office in the Suite, or stores any personal property in any unrented
office in the Suite, or stores any personal property in any common area.
(d) If Lessee fails to observe or perform any of the provisions of this
Lease other than those described in this Paragraph 6, where such failure
shall continue for a period of ten (10) days after written notice thereof from
Lessor to Lessee.
If Lessee defaults under this Lease, (i) Lessor may terminate this
Lease, (ii) Lessor may recover, in addition to any rent and other charges
already due and payable, all rent for the entire unexpired balance of the
stated term of this Lease and all costs incurred by Lessor to recover such
sums from Lessee, including reasonable attorney's fees and/or Lessor may
recover damages from Lessee. All rights and remedies of Lessor under this
Lease shall be cumulative and in addition to any other rights or remedies
available at law or in equity. No failure by Lessor to exercise any right or
remedy or to insist upon strict performance following a default by Lessee
shall constitute a waiver of such default by Lessor.
7. HIRING LESSOR'S EMPLOYEES. Lessor spends a great deal
of time to hire and train employees for the operation of the Suite and other
suites. Lessee derives the benefit of Lessor's experience in operating the
Suite and of such hiring and training procedures. Lessee realizes the time
and expense Lessor incurs to obtain personnel, and Lessee therefore agrees
not to offer or accept for hire any of Lessor's employees at any time during
the term or any extension or renewal of this Lease. "Lesser's employees"
include Lessor's employees during the period of their employment with
Lessor and for a period of sixty (60) days thereafter. Lessor and Lessee
have considered the matter and have reasonably endeavored to estimate the
actual damages to Lessor in the event Lessee breaches this provision and
offers or accepts for hire any of Lessor's employees, and both realizing that
it would be impractical or extremely difficult to fix the actual damage to
Lessor resulting from such offer or hiring of Lessor's employees at any
time during the term or any extension of renewal of this Lease, or within
sixty (60) days after Lessee moves out of Lessor's offices, Lessee agrees to
pay Lessor the sum of Two Thousand Dollars ($2,000.00) for the
employees so hired to compensate Lessor for Lessor's loss in hiring and
training said employee. Said sum represents the amount agreed upon by the
parties as Lessor's liquidated damages. Notwithstanding the foregoing,
Lessee may hire any of Lessor's employees for part-time work outside the
hours of 9:00 a.m. to 6:00 p.m. normal business days.
8. INSURANCE. Lessor has blanket liability insurance coverage for
the common areas in the Suite. Lessor's insurance does not cover the
Lessee's Premises or Lessee's property in the Suite and Premises. Lessor
shall not be liable to Lessee, or to any other person, for any damages on
account of loss, damage, fire or theft of any personal or business property,
including, but not limited to, property left with the floor receptionist or
telephone operators, door lettering or other property purchased by, or
belonging to, Lessee.
Lessee shall indemnify and hold harmless Lessor and Lessor's landlord
from and against any and all claims arising from Lessee's use of the
Premises, or from the conduct of Lessee's business or from any activity,
work or things done, permitted or suffered by Lessee in the Premises and
shall further indemnify and hold harmless Lessor and Lessor's landlord
from and against any and all claims arising from any breach or default in
the performance under the terms of this Lease, or arising from any
negligence of the Lessee or any of Lessee's agents, contractors, visitors, or
employees, and from and against all costs, attorney's fees, expenses and
liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon, and in case any action or proceeding be
brought against Lessor and Lessor's landlord by reason of any such claim,
Lessee upon notice from Lessor and Lessor's landlord shall defend the same
at Lessee's expense by counsel satisfactory to Lessor and Lessor's landlord.
Lessee, as a material part of the consideration to Lessor and Lessor's
landlord, hereby assumes all risk of damage to property or injury to persons
in the Premises and Lessee hereby waives all claims in respect thereof
against Lessor and Lessor's landlord.
9. COMMON AREA. All areas not designated for exclusive use of
tenants or available for lease to prospective tenants constitute the Suite's
common areas. Lessee shall have the non-exclusive right of access and use
of the common areas and facilities contained therein. Conference room(s)
may be used on a reservation basis only subject to Lessor's rules and
regulations governing use of the same.
10. MASTER LEASE.
a. Lessee shall have no greater rights to the use and occupancy of the
Suite and Premises than Lessor has with the Building under Lessor's Master
Lease; in particular, Lessee's term under this agreement shall be no greater
than Lessor's term under the Master Lease, and is subject to any early
termination provisions contained therein. Lessee is bound to Lessor in the
same manner as Lessor is bound to the Building with respect to all standard
lease provisions (e.g., eminent domain, destruction of building, early
termination, etc.), as well as the rules and regulations of the Building
attached hereto as Exhibit C.
b. Lessor hereby irrevocably assigns to Lessor's landlord all of
Lessor's interest in all rentals and income arising from any sublease,
license, concession or other consensual arrangement for possession of all or
a portion of the suite entered into by Lessor, and Lessor's landlord may
collect such rent and income and apply same towards Lessor's obligations
under the Master Lease; provided, however, that until a default occurs in
the performance of Lessor's obligations under the Master Lease (taking into
account any applicable notice and cure periods), Lessor shall have the right
to receive and collect such amounts. Lessor's landlord shall not, by reason
of this assignments or the collection of rentals, be deemed liable to the
Lessee, licensee, concessionaire, or third party for the performance of any
of Lessor's obligations under the Lease, license, concession or other
consensual arrangement for possession of all or a portion of the premises.
Lessor hereby irrevocably authorizes and directs any Lessee, licensee,
concessionaire, or other third party, upon receipt of a written notice from
Lessor's landlord stating that an uncured default exists in the performance
of Lessor's obligations under the Master Lease, to pay to Lessor's landlord
all sums then and thereafter due under the Lease, license, concession or
other consensual arrangement for possession of all or a portion of the
premises. Lessor agrees that the Lessee, licensee, concessionaire, or other
third party may rely on that notice without any duty of further inquiry and
notwithstanding any notice or claim by Lessor to the contrary.
c. At any time, Lessor may terminate this Lease upon sixty (60) days
written notice to Lessee in the event that Lessor's interest in the Master
Lease is terminated. In the event Lessor's interest in the Master Lease is
terminated, Lessee shall, at the option of Lessor's landlord, attorn to
Lessor's landlord or Lessor's landlord's designee, and recognize Lessor's
landlord or Lessor's landlord's designee as Lessor under this Sublease.
Lessee shall execute and deliver at any time when requested by Lessor's
landlord an instrument to evidence such attornment. In no event, however,
shall Lessor's landlord or Lessor's landlord's designee be liable for any
previous act or omission by Lessor under this Sublease, or for the return of
any advance rental payments or deposits under such agreements that have
not been actually delivered to Lessor's landlord or Lessor's landlord's
designee, nor shall Lessor's landlord or Lessor's landlord's designee be
bound by any modification to any such agreements executed without
Landlord's consent, or for any advance rental payments in excess of one
month's rent. Lessee waives the provision of any law which may give
Lessee any right of election to terminate this Lease or to surrender
possession of the Premises by reason of the termination of the Master
Lease.
11. SUBLETTING. Lessee shall sublet or assign the Premises or
any part thereof for any period of time without the prior written consent of
Lessor. Any subletting or assignment of this Lease which is not in
compliance with the provisions of this paragraph shall be void and shall, at
the option of Lessor, terminate this Lease. In such event, Lessee shall be
liable for any expenses Lessor may incur in regaining possession of the
Premises or so much of the Premises as Lessee may have subleased or
assigned without Lessor's consent. The consent by Lessor to a subletting or
assignment shall not be construed as releasing Lessee from any liability or
obligation hereunder. If Lessee leases one or more desk spaces, no desk
space may be occupied by more than one person. A desk space may be
occupied by more than one person only if Lessee leases the entire room in
which the desk is located and the desk space is not within a mini-suite.
12. NOTICE TO LESSOR. Any notice regarding a breach of this
lease or termination thereof shall be in writing and sent by certified mail or
personal delivery to Barrister Executive Suites, Inc., Attention: Lease
Termination Department, 233 Wilshire Boulevard, Suite 500, Santa Monica,
California 90401 (in the case of Lessor), or to Lessee c/o the address of
the Premises (in the case of Lessee). Certified mail notice shall be deemed
given twenty-four (24) hours after the date it is placed, postage prepaid, in
a depository for United States mail. Personal delivery to the floor manager,
receptionist or telephone operator does not constitute notice to either Lessor
or Lessee. Either party may provide for a different address by notifying the
other party of said change as provided for herein.
Provided Lessee provides Lessor written notice of no less than thirty
(30) days, any termination notice shall be effective the last day of the
month. If Lessee occupies any portion of the terminated space beyond the
last calendar day of the month, Lessee will be liable for rent for the full
calendar month. If Lessee fails to vacate the premises for any reason after
the termination date or purports to rescind the termination notice after
Lessor has already leased Lessee's terminated space, Lessee will pay the
rent the new tenant had agreed to pay, plus any and all resulting damages
and losses incurred by Lessor because the new tenant cannot move into the
space previously terminated by Lessee.
13. SUCCESSORS AND ASSIGNS. The covenants and conditions
herein contained shall apply to and bind the heirs, successors, executors,
administrators and assigns of the parties hereto, except as expressly
provided to the contrary elsewhere herein. In the event of Lessee's death or
disability, Lessee's legal representative may terminate this Lease upon thirty
(30) days' written notice to Lessor (without penalty) and the security deposit
will be refunded in full, subject to the provisions of this Lease.
14. SUBSTITUTION. At any time after the execution of this Lease,
Lessor may substitute for the Leased Premises other premises elsewhere in
the suite, or in another Barrister Suite (the "New Premises") in which event
the New Premises shall be deemed to be the Leased Premises for all
purposes hereunder, provided:
(a) That New Premises shall be similar in area and
appropriateness for Lessee's purposes in Lessor's reasonable determination;
and
(b) If Lessee is occupying the Leased Premises at the time of
any such substitution, Lessor shall pay the reasonable expense of moving
Lessee, its property and equipment to the New Premises and shall, at its
sole cost, improve the New Premises with Lessor's standard improvements.
15. RULES AND REGULATIONS. Lessee shall observe at all
times Lessor's Rules and Regulations, a copy of which is attached hereto as
Exhibit D.
16. REPAIRS. The landlord which leased the Suite to the Lessor
shall maintain the structural integrity of the Building shell and make all
necessary repairs to the roof, exterior wall, exterior doors, windows,
corridors and other common areas of the Building and the Project, and
Landlord shall keep the building and the Project in a safe, clean and neat
condition, and use reasonable efforts to keep all equipment used in common
with other tenants such as elevators, plumbing, heating, air conditioning and
similar equipment, in good condition and repair. Lessor is not liable to
Lessee by reason of any defect, inadequacy or insufficiency in same. Lessee
may not deduct or offset any amount from rent due herein because of any
problem regarding construction, repairs or lack thereof. Lessor will
coordinate any repair complaint of Lessee. However, any claim by Lessee
with respect thereto shall be made solely against the Building and Lessor
hereby assigns to Lessee, solely for the purpose of making and prosecuting
any such claim, all rights which Lessor has under the Master Lease. Lessor
will coordinate all repairs for dangerous conditions existing in the common
areas within the Suite. Lessee is responsible for, and shall indemnify and
hold Lessor harmless from and against, any damage to persons or property
caused by Lessee, or Lessee's employees, agents, clients, guests or invites.
Lessee is not responsible for repairing wall holes from normal-sized nails
used to hang pictures.
17. RIGHT OF ENTRY. If Lessee has given notice to terminate or
Lessee is in default of rental payments, Lessor's employees may show the
Premises to prospective tenants between 9:00 a.m. and 6:00 p.m., Monday
through Friday. If during the last month of the term Lessee shall have
removed all or substantially all of Lessee's property, Lessor may
immediately allow anyone else to occupy the premises without relieving
Lessee of liability for rent for that period of time unless Lessor receives
rental income from Lessee's space, in which event such payment will be
credited against Lessee's rent obligation for the period of time the space is
occupied by someone else.
18. UTILITIES, SERVICES, MAINTENANCE AND
CONSTRUCTION. Under Lessor's Master lease, the Building provided
utilities, services (janitorial, heat and air conditioning) and maintenance.
Janitorial services include carpet vacuuming, but not cleaning. Heat and air
conditioning is provided during generally recognized business days and
hours. Lessee is allowed access to the Premises twenty-four (24) hours a
day, seven (7) days a week, subject to the Building's rules requiring proper
identification after normal business hours, Lessor is not liable to Lessee by
reason of any failure to provide or the inadequacy of utilities, janitorial,
heat or air conditioning services or maintenance. Lessor is not responsible
for any negligence of the Building's agents, servants or employees. Lessee
may not deduct or offset any amount from rent due herein because of any
problem regarding utilities, heat, air conditioning, janitorial services,
maintenance services or defective construction of Premises. Upon request
by Lessee, Lessor will write the Building regarding any complaint by
Lessee regarding utilities, heat, air conditioning, janitorial services,
maintenance or construction; however, any claim by Lessee with respect
thereto shall be made by Lessee directly to the Building, and Lessor hereby
assigns to Lessee, solely for the purpose of making and prosecuting any
such claim, all rights which Lessor has against the Building under the
Master Lease.
Lessor is responsible for maintaining the common areas with the Suite,
however, Lessor is not responsible for maintaining, repairing or cleaning
the floor covering, wall covering or drapes/window blinds within Lessee's
Premises, other than the normal janitorial service provided by the Building.
Non-recurring operating and capital improvements may be passed on to the
Lessee.
19. ATTORNEY'S FEES. In the event legal proceedings to regain
possession of the Premises or to collect moneys owed are instituted because
of Lessee's failure to pay rent, security deposit, cost of repair of the
Premises or to cure any breach of this Lease by Lessee, the prevailing party
shall be entitled to recover as an element of his cost of suit, and not as
damages, reasonable attorney's fees to be fixed by the court. The
"prevailing party" shall be the party who is entitled to recover his costs of
suit, whether or not the suit proceeds to final judgement. The party not
entitled to recover his costs shall not recover attorney's fees. No sum for
attorney's fees shall be counted in calculating the amount of a judgment for
purposes of determining whether a party is entitled to recover his costs of
attorney's fees.
20. ENTIRE AGREEMENT, MERGER AND WAIVER. This
Lease Agreement supersedes and cancels any and all previous negotiations,
arrangements. offers, brochures, agreements or understandings, if any,
between the parties hereto. This Lease Agreement expresses and contains
the entire agreement of the parties hereto and there are no expressed or
implied representations, warranties or agreements between them, except as
herein contained. This Lease Agreement may not be modified, amended or
supplemented except by a writing signed by both Lessor and Lessee. No
consent given or waiver made by Lessor of any breach by Lessee of any
provision of this Lease Agreement shall operate or be construed in any
manner as a waiver of any subsequent breach of the same or of any other
provision.
ASPAC COMMUNICATIONS, INC. BARRISTER EXECUTIVE
SUITES, INC.
LESSEE LESSOR
/s/ Ming Zhang
MING ZHANG, SECRETARY
DATE: 8-28-97 DATE: 9-9-97
<PAGE>
LEASE AGREEMENT ADDENDUM
The parties to the attached Lease hereby agree that the Lease shall be
amended or supplemented in the following respects. (All terms defined in
the Lease shall have the same meanings when used in this Addendum.)
1. Section 3: The last sentence of the third paragraph shall be amended
to read as follows: Lessee's first payment shall include one month's
full rent plus the security deposit and a set-up fee of $150.00
2. Section 7: In the fifth sentence, "the sum of Two Thousand Dollars
($2,000.00)" shall be deleted and replaced with "the sum of Five
Thousand Dollars ($5,000.00)." The last sentence of the paragraph shall
be deleted entirely.
3. First Signature Page: On the first signature page of the Lease, the
following section shall be added: 21. CONFLICT OF INTEREST.
Lessee agrees that conflict of interest would be created if Lessee were
to represent or act as Legal counsel for the employees, officers,
vendors, contractors, landlords and/or tenants of Lessor. Therefore, so long
as Lessee is a tenant of Lessor, Lessee shall be prohibited from
representing Lessor's employees, officers, vendors, contractors,
landlords and/or tenants in any legal action lawsuit which involves
Lessor, or Lessor's Managing Agent (if applicable). Failure to comply with
this provision shall constitute an event of default under the Lease and
shall be cause for Lessor to terminate this Lease.
4. Section 3, Exhibit D: The last sentence shall be deleted and replaced
with the following: The set-up fee described on page 2 of the Lease
shall include one Lobby Directory Listing and (if applicable) one
Parking-Level Directory Listing. Lessee shall pay the building's
prevailing charge for any additional Directory Listings.
5. Section 4, Exhibit D: The following shall be inserted after the first
sentence of the paragraph. The set-up fee described on page 2 of the
Lease shall include on standard door sign. If Lessee requires additional
door signs, Lessee shall pay Lessor for same at Lessor's prevailing rate.
6. Section 6, Exhibit D: The following shall be added to the end of the
paragraph: Upon termination of the Lease, whether upon expiration of the
term or sooner, Lessee agrees to pay Lessor One Hundred Dollars
($100.00) per leased office and Fifty Dollars ($50.00) per leased desk space
to cover painting and cleaning costs for each such space. The applicable
amounts for such painting and cleaning costs shall be deducted from
Lessee's security deposit should Lessee fail to pay Lessor for same upon
lease termination.
ACKNOWLEDGED AND AGREED TO:
LESSEE LESSOR
ASPAC COMMUNICATIONS, INC. BARRISTER EXECUTIVE
SUITES, INC.
/s/ Ming Zhang
MING ZHANG, SECRETARY
DATE: 8-28-97 DATE: 9-9-97
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of the 6th day of November 1997, between
ASPAC Communications, Inc., a California corporation ("Employer"), and Marc
Mayeres ("Executive").
WITNESSETH:
1. TERM.
Employer hereby employs Executive and Executive hereby accepts employment
on the terms and conditions hereinafter set forth. Subject to the provisions
of Section 7 hereof, the term of this Agreement shall be of six (6) months,
commencing on the date that the company is approved for public trading by SEC
or ninety (90) days after signing this Agreement whichever comes first
(the "Commencing Date").
2. DUTIES.
Executive agrees to serve Employer as Executive President and in such
capacity Executive agrees to render his services to the best of his ability.
Executive will report to the Chairman of the Board of the Company. During the
term of this Agreement, Executive will devote his full time and attention to,
and use his best efforts to advance, the business and welfare of Employer
subject to the direction and control of the Board of Directors.
3. CONFIDENTIAL INFORMATION AND COVENANT NOT TO COMPETE.
(a)Executive hereby agrees that, during the term of this Agreement and
thereafter, he will not disclose to any person, or otherwise use or exploit
any of the proprietary or confidential information or knowledge, including
without limitation, trade secrets, processes, records of research, proposals,
reports, methods, processes, techniques, computer software or programming,
or budgets or other financial information, regarding Employer, its business,
properties or affairs obtained by him at any time prior to or subsequent to
the execution of this Agreement.
(b)Upon termination of employment Executive will deliver to Employer all
processes, records of research, proposals, reports, memoranda, computer
software and programming, budgets and other financial information, and other
materials or records or writings of any other type (including any copies
thereof) made, used or obtained by Executive in connection with his employment
by Employer.
(c)During the term of this Agreement, Executive agrees that he will:
(i) neither authorize his name to be used by, (ii) nor engage in or carry
on, directly or indirectly, for himself as a member of a partnership or
as a stockholder (other than as a stockholder of less than five percent
(5%) of the issued and outstanding stock
of a publicly held corporation having assets in excess of $10,000,000),
investor, officer, or director of a corporation (other than Employer,
or any parent, subsidiary, affiliate or successor of Employer), or as
an employee, agent, associate, or consultant of any person, partnership,
corporation or other business entity, in competition with any business
carried on, directly or indirectly, by Employer prior to the date hereof
or hereafter conducted, directly or indirectly, by Employer during the
term of this Agreement, in any country where business is
then carried on or conducted by Employer.
(d) Executive agrees that the remedy at law for any breach by him or any
of the covenants and agreements set forth in this Section 3 will
inadequate and that in the event of any such breach, Employer may, in
addition to the other remedies which may be available to it at law,
obtain injunctive relief prohibiting him (together with
all those persons associated with him) from the breach of such covenants
and agreements.
(e)The parties hereto intend that the covenants and agreements contained
in this Section 3 shall be deemed to include a series of separate
covenants and agreements. If in any judicial proceeding a court shall
refuse to enforce all of the separate covenants deemed included in such
action, then such unenforceable covenants shall be deemed eliminated from
the provisions hereof for the purposes of such proceeding to the
extent necessary to permit the remaining separate
covenants to be enforced in such proceeding.
4. COMPENSATION.
4.1 Salary.
Under this Agreement, Executive will be paid Seven Thousand Dollars
($7,000.00) per month, from which Three Thousand Five Hundred Dollars
($3,500.00) will be payable monthly subject to income tax withholdings
and other payroll deductions as customary in respect of Employer's
salaried employees in general, and the remaining Three Thousand Five
Hundred Dollars ($3,500.00) will be accrued and
deferred until the Employer completes the first offering.
4.2 Signing Bonus.
Upon execution of this Agreement, Executive shall receive a signing
bonus of five-thousand dollars, ($5,000.00). In consideration for such
signing bonus, Executive shall, at no charge to Employer, provide consulting
services or work part-time for the employer up to the Commencing Date or sixty
(60) days from signing of this Agreement, whichever comes first. If further
consulting services are requested by Employer after sixty (60) days from
signing of this Agreement and before the Commencing Date, Executive shall
be paid Two Thousand Dollars ($2,000.00) per month for such services.
Performance of said consulting services shall be premised upon
reasonable notice of the need for such services, and shall not
exceed twenty (20) hours per week.
4.3 Medical Insurance.
During the term of this Agreement Employer shall furnish Executive with the
same medical and hospital insurance furnished to other employees of Employer.
4.4 Continuing Employment.
If both Employer and Executive wish to continue the employment at the end of
this Agreement, both party shall sign a new contract with which Executive
shall be paid $100,000.00 annually with the same vacation, bonus, medical
insurance, stock options and other benefits provided to other executives of
the Employer.
5. EXPENSES.
Employer will pay or reimburse Executive for such reasonable travel,
entertainment, or other expenses as he may incur at the request of Employer
during the term of this Agreement in connection with the performance of
his duties hereunder. Executive shall furnish Employer with such
evidence that such expenses were incurred as Employer may
from time to time reasonably require or request.
6. DEATH OR TOTAL DISABILITY OF EXECUTIVE.
If Executive dies, or becomes totally disabled (for a period of more than six
(6) consecutive weeks), during the term of this Agreement, Executive's
employment under this Agreement shall automatically terminate and all of
Executive's benefits and all payments to Executive under this Agreement
shall immediately terminate.
7. TERMINATION FOR CAUSE.
Executive's employment under this Agreement may be terminated by Employer for
"good cause." The term "good cause" is defined as any one or more of the
following occurrences:
(a)Executive's breach of any of the covenants contained in Section 3 of this
Agreement;
(b)Executive's conviction by, or entry of a plea of guilty or nolo contendere
in, a court of competent and final jurisdiction for any crime involving moral
turpitude or punishable by imprisonment in the jurisdiction involved;
(c)Executive's commission of an act of fraud, whether prior to or subsequent to
the date hereof upon Employer;
(d)Executive's continuing failure or refusal to perform his duties as required
by this Agreement;
(e)Gross negligence, insubordination, material violation by Executive of any
duty of loyalty to Employer or any other material misconduct on the part of
Executive; or
(f)Executive's commission of any act which is detrimental to Employer's
business or goodwill.
8. MISCELLANEOUS.
8.1 Modification and Waiver of Breach.
No waiver or modification of this Agreement shall be binding unless it is in
writing signed by the parties hereto. No waiver of a breach hereof shall be
deemed to constitute a waiver of a future breach, whether of a similar of
dissimilar nature.
8.2 Complete Agreement.
This Agreement contains the entire agreement between the parties hereto with
respect to the transactions contemplated by this Agreement and supersedes all
previous oral and written and all contemporaneous oral negotiations,
commitments, writings, and understandings.
8.3 Legal Fees.
If any legal action, arbitration or other proceeding is brought for the
enforcement of this Agreement, or because of any alleged dispute, breach,
default or misrepresentation in connection with this Agreement, the successful
or prevailing party shall be entitled to recover reasonable attorneys'
fees and other costs it incurred in that action or proceeding, in addition to
any other relief to which it may be entitled.
8.4 Assignment.
This Agreement may not be assigned in any manner whatsoever.
IN WITNESS WHEROF: the undersigned have executed this Agreement on the day and
year first above written.
EXECUTIVE: EMPLOYER:
ASPAC COMMUNICATIONS, INC.
/s/ Marc Mayeres /s/ Amy Ming Zhang
Secretary
Address of Executive:
30902 Clubhouse Dr. #44F
Laguana Niguel, CA 92677
NON-NEGOTIABLE PROMISSORY NOTE
$ 60,000 Date: October 2, 1997
FOR VALUE RECEIVED, the undersigned, ASPAC
COMMUNICATIONS, INC., a Delaware corporation located at 2049
Century Park East, #1200, Los Angeles, California (hereinafter
referred to as the "Maker") hereby promises to pay to the
order of Finhorn Enterprises, Ltd., or its designee
(hereinafter referred to as the "Holder"), c/o East Asia
Corporate Services Limited, Columbus Centre Building, Wickhams
Cay, P.O. Box 901, Road Town, Tortola, B.A.I. or at such other
place as the holder hereof may from time to time designate in
writing, the principal sum of Sixty Thousand ($60,000) as
reduced by the amount of any prepayment thereof (the "Unpaid
Principal") on October 1, 1998, unless extended by the Holder
(the "Maturity Date"), together with interest on the amount of
the Unpaid Principal beginning as of the date hereof at the
rate of Five (5%) percent per annum. This Promissory Note is
extendable upon the Maturity Date with the Holder's written
consent for another year at the rate of Seven (7%) percent per
annum.
1. PREPAYMENT. The Unpaid Principal of this Promissory
Note may be prepaid in part or in full by the Maker, without
penalty. Any such prepayment shall be first applied to reduce
the Unpaid Principal amount.
2. EVENTS OF DEFAULT AND REMEDIES. The failure by the
Maker to make payment of the Unpaid Principal balance and
interest of this Promissory Note when due shall be deemed an
Event of Default upon which the Holder, at its election, shall
be entitled to exercise any and all other available remedies
to enforce payment hereof.
3. TRANSFERABILITY. This Promissory Note may not be
transferred, assigned, sold, or hypothecated by the Holder.
4. SUCCESSORS. All the rights and interest arising
under this Promissory Note shall inure to the successors of
the Makers and of the Holder.
5. PRESENTMENT. Except as set forth herein, the Maker
waives presentment, demand and presentation for payment,
notice of nonpayment and dishonor, protest and notice of
protest and expressly agrees that this Promissory Note or any
payment hereunder may be extended from time to time by the
Holder without in any way affecting the liability of the
Maker.
6. AMENDMENTS. This Note may not be altered, amended,
changed or terminated, nor may any of its provisions be
waived, except by an agreement in writing signed by the Holder
and the Maker.
7. NOTICES. Any notice to be given to any party shall
be in writing and may be delivered by personal service,
facsimile transmission, registered or certified mail, return
receipt requested, with postage thereon fully prepaid, or by
overnight delivery courier.
8. ARBITRATION. Any disputes arising from this
Agreement, except for requests for injunctive or other
equitable relief, shall be decided by the American Arbitration
Association according to their rules and regulations then in
effect.
9. GOVERNING LAW. This Promissory Note shall be
governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Maker has executed this
Promissory Note as of this 2nd day of October, 1997.
WITNESS: MAKER:
/s/ Ming Zhang
<PAGE>
NON-NEGOTIABLE PROMISSORY NOTE
$ 100,000 Date: October 27, 1997
FOR VALUE RECEIVED, the undersigned, ASPAC
COMMUNICATIONS, INC., a Delaware corporation located at 2049
Century Park East, #1200, Los Angeles, California (hereinafter
referred to as the "Maker") hereby promises to pay to the
order of Finhorn Enterprises, Ltd., or its designee
(hereinafter referred to as the "Holder"), c/o East Asia
Corporate Services Limited, Columbus Centre Building, Wickhams
Cay, P.O. Box 901, Road Town, Tortola, B.A.I. or at such other
place as the holder hereof may from time to time designate in
writing, the principal sum of Sixty Thousand ($60,000) as
reduced by the amount of any prepayment thereof (the "Unpaid
Principal") on October 1, 1998, unless extended by the Holder
(the "Maturity Date"), together with interest on the amount of
the Unpaid Principal beginning as of the date hereof at the
rate of Five (5%) percent per annum. This Promissory Note is
extendable upon the Maturity Date with the Holder's written
consent for another year at the rate of Seven (7%) percent per
annum.
1. PREPAYMENT. The Unpaid Principal of this Promissory
Note may be prepaid in part or in full by the Maker, without
penalty. Any such prepayment shall be first applied to reduce
the Unpaid Principal amount.
2. EVENTS OF DEFAULT AND REMEDIES. The failure by the
Maker to make payment of the Unpaid Principal balance and
interest of this Promissory Note when due shall be deemed an
Event of Default upon which the Holder, at its election, shall
be entitled to exercise any and all other available remedies
to enforce payment hereof.
3. TRANSFERABILITY. This Promissory Note may not be
transferred, assigned, sold, or hypothecated by the Holder.
4. SUCCESSORS. All the rights and interest arising
under this Promissory Note shall inure to the successors of
the Makers and of the Holder.
5. PRESENTMENT. Except as set forth herein, the Maker
waives presentment, demand and presentation for payment,
notice of nonpayment and dishonor, protest and notice of
protest and expressly agrees that this Promissory Note or any
payment hereunder may be extended from time to time by the
Holder without in any way affecting the liability of the
Maker.
6. AMENDMENTS. This Note may not be altered, amended,
changed or terminated, nor may any of its provisions be
waived, except by an agreement in writing signed by the Holder
and the Maker.
7. NOTICES. Any notice to be given to any party shall
be in writing and may be delivered by personal service,
facsimile transmission, registered or certified mail, return
receipt requested, with postage thereon fully prepaid, or by
overnight delivery courier.
8. ARBITRATION. Any disputes arising from this
Agreement, except for requests for injunctive or other
equitable relief, shall be decided by the American Arbitration
Association according to their rules and regulations then in
effect.
9. GOVERNING LAW. This Promissory Note shall be
governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Maker has executed this
Promissory Note as of this 27th day of October, 1997.
WITNESS: MAKER:
/s/ Ming Zhang
LETTER OF INTENT
This Letter of Intent sets forth, as of February 10, 1998, certain
intentions on the part of ASPAC Communications, Inc. ("ASPAC") with
offices at 2049 Century Park East, Suite 1200, Los Angeles, California
90066 U.S.A. and China United Telecommunications Corporation, Hebei
Branch ("Hebei Unicom") with offices at No. 125 Zhongshan West Road,
23 Fl. S.J.Z. International Trading Center, Shijiazhuang, Hebei, P.R.
China.
WHEREAS, Hebei Unicom intends to enter into one or more Sino-
foreign cooperative joint venture with ASPAC or its wholly owned
subsidiary in order to participate in the construction and development of
and to provide services for a 200,000-subscriber wire-line telephone
network (the "Hebei Wire-Line Project") which constitutes the first phase
of a 2,000,000-subscriber wire-line telephone project, and other projects in
the Hebei Province.
NOW THEREFORE, ASPAC and Hebei Unicom hereby specify
their mutual intentions as follows:
1. ASPAC or its wholly owned subsidiary, and Hebei Unicom
or its affiliate(s) intend to form one or more Sino-foreign cooperative joint
venture(s) ("ASPAC JV") in which the equity interest percentage of each
party will be finalized in an agreement;
2. Pro-rata capital contributions of the ASPAC JV will be
made by ASPAC and Hebei Unicom in the form of cash and/or tangible
assets as agreed by both parties.
3. It is understood that the finalization and implementations of
the structure recited above are subject to:
(a) all necessary agreements by the relevant parties;
(b) the execution of all relevant final agreements, and
(c) the receipt of all necessary governmental, regulatory
and other approvals.
ASPAC Communications, Inc. China United Tele-
communications Corporation,
Hebei Branch
By: /s/ Marc Mayeres By: /s/ Li Zhang Suo
Title: President Title: General Director
WEINBERG & COMPANY, P.A.
6100 Glades Road, Suite 314
Boca Raton, Florida 33434
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in the Form 10-SB Registration
Statement of Aspac Communications, Inc. our reports for the year ended
September 30, 1997 and six months ended March 31, 1998 dated
Februar;y 23, and May 13, 1998, respectively relating to the
financial statements of Aspac Communications, Inc. which appear
in such Form 10-SB.
WEINBERG & COMPANY, P.A.
Certified Public Accountants
Boca Raton, Florida
June 9, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1998
<CASH> 26943
<SECURITIES> 30000
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 61191
<PP&E> 10324
<DEPRECIATION> 0
<TOTAL-ASSETS> 205128
<CURRENT-LIABILITIES> 237543
<BONDS> 0
0
0
<COMMON> 3604000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 205128
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 107977
<TOTAL-COSTS> 107977
<OTHER-EXPENSES> 2841
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3653
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (110818)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
ASPAC COMMUNICATIONS, INC.
By-Laws
Article I
The Stockholders
Section 1.1. Annual Meeting. The annual meeting of the
stockholders of Aspac Communications, Inc. (the "Corporation")
shall be held on the third Thursday in May of each year at 10:30
a.m. local time, or at such other date or time as shall be
designated from time to time by the Board of Directors and stated
in the notice of the meeting, for the election of directors and
for the transaction of such other business as may come before the
meeting.
Section 1.2. Special Meetings. A special meeting of the
stockholders may be called at any time by the written resolution
or request of two-thirds or more of the members of the Board of
Directors, the president, or any executive vice president and
shall be called upon the written request of the holders of two-
thirds or more in amount, of each class or series of the capital
stock of the Corporation entitled to vote at such meeting on the
matters(s) that are the subject of the proposed meeting, such
written request in each case to specify the purpose or purposes
for which such meeting shall be called, and with respect to
stockholder proposals, shall further comply with the requirements
of this Article.
Section 1.3. Notice of Meetings. Written notice of each
meeting of stockholders, whether annual or special, stating the
date, hour and place where it is to be held, shall be served
either personally or by mail, not less than fifteen nor more than
sixty days before the meeting, upon each stockholder of record
entitled to vote at such meeting, and to any other stockholder to
whom the giving of notice may be required by law. Notice of a
special meeting shall also state the purpose or purposes for
which the meeting is called and shall indicate that it is being
issued by, or at the direction of, the person or persons calling
the meeting. If, at any meeting, action is proposed to be taken
that would, if taken, entitle stockholders to receive payment for
their stock, the notice of such meeting shall include a statement
of that purpose and to that effect. If mailed, notice shall be
deemed to be delivered when deposited in the United States mail
or with any private express mail service, postage or delivery fee
prepaid, and shall be directed to each such stockholder at his
address, as it appears on the records of the stockholders of the
Corporation, unless he shall have previously filed with the
secretary of the Corporation a written request that notices
intended for him be mailed to some other address, in which case,
it shall be mailed to the address designated in such request.
Section 1.4. Fixing Date of Record. (a) In order that the
Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders, or any adjournment
thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than sixty nor less than ten
days before the date of such meeting. If no record date is fixed
by the Board of Directors, the record date for determining
stockholders entitled to notice of, or to vote at, a meeting of
stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or if notice is
waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of
stockholders of record entitled to notice of, or to vote at, a
meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a
new record date for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing
without a meeting (to the extent that such action by written
consent is permitted by law, the Certificate of Incorporation and
these By-Laws), the Board of Directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten days after
the date upon which the resolution fixing the record date is
adopted by the Board of Directors. If no record date has been
fixed by the Board of Directors, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors
is required by law, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be
taken is delivered to the Corporation by delivery to its
registered office in its state of incorporation, its principal
place of business, or an officer or agent of the Corporation
having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's
registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed
by the Board of Directors and prior action by the Board of
Directors is required by law, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such
prior action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record
date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of
business on the day on which the Board of Directors adopts the
resolution relating thereto.
Section 1.5. Inspectors. At each meeting of the
stockholders, the polls shall be opened and closed and the
proxies and ballots shall be received and be taken in charge.
All questions touching on the qualification of voters and the
validity of proxies and the acceptance or rejection of votes,
shall be decided by one or more inspectors. Such inspectors
shall be appointed by the Board of Directors before or at the
meeting, or, if no such appointment shall have been made, then by
the presiding officer at the meeting. If for any reason any of
the inspectors previously appointed shall fail to attend or
refuse or be unable to serve, inspectors in place of any so
failing to attend or refusing or unable to serve shall be
appointed in like manner.
Section 1.6. Quorum. At any meeting of the stockholders
the holders of such number of all of the outstanding shares of
the capital stock of the Corporation taken together as a single
class as represents one-third of all votes that may be made at
such meeting, present in person or represented by proxy, shall
constitute a quorum of the stockholders for all purposes, unless
the representation of a larger number shall be required by law,
and, in that case, the representation of the number so required
shall constitute a quorum.
If the holders of the amount of stock necessary to
constitute a quorum shall fail to attend in person or by proxy at
the time and place fixed in accordance with these By-Laws for an
annual or special meeting, a majority in interest of the
stockholders present in person or by proxy may adjourn, from time
to time, without notice other than by announcement at the
meeting, until holders of the amount of stock requisite to
constitute a quorum shall attend. At any such adjourned meeting
at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as
originally notified.
Section 1.7. Business. The chairman of the Board, if any,
the president, or in his absence the vice-chairman, if any, or an
executive vice president, in the order named, shall call meetings
of the stockholders to order, and shall act as chairman of such
meeting; provided, however, that the Board of Directors or
executive committee may appoint any stockholder to act as
chairman of any meeting in the absence of the chairman of the
Board. The secretary of the Corporation shall act as secretary
at all meetings of the stockholders, but in the absence of the
secretary at any meeting of the stockholders, the presiding
officer may appoint any person to act as secretary of the
meeting.
Section 1.8. Stockholder Proposals. No proposal by a
stockholder shall be presented for vote at a special or annual
meeting of stockholders unless such stockholder shall, not later
than the close of business on the fifth day following the date on
which notice of the meeting is first given to stockholders,
provide the Board of Directors or the secretary of the
Corporation with written notice of intention to present a
proposal for action at the forthcoming meeting of stockholders,
which notice shall include the name and address of such
stockholder, the number of voting securities that he holds of
record and that he holds beneficially, the text of the proposal
to be presented to the meeting and a statement in support of the
proposal.
Any stockholder who was a stockholder of record on the
applicable record date may make any other proposal at an annual
meeting or special meeting of stockholders and the same may be
discussed and considered, but unless stated in writing and filed
with the Board of Directors or the secretary prior to the date
set forth hereinabove, such proposal shall be laid over for
action at an adjourned, special, or annual meeting of the
stockholders taking place sixty days or more thereafter. This
provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of officers,
directors, and committees, but in connection with such reports,
no new business proposed by a stockholder, qua stockholder, shall
be acted upon at such annual meeting unless stated and filed as
herein provided.
Notwithstanding any other provision of these By-Laws, the
Corporation shall be under no obligation to include any
stockholder proposal in its proxy statement materials or
otherwise present any such proposal to stockholders at a special
or annual meeting of stockholders if the Board of Directors
reasonably believes the proponents thereof have not complied with
Sections 13 or 14 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder; nor shall the
Corporation be required to include any stockholder proposal not
required to be included in its proxy materials to stockholders in
accordance with any such section, rule or regulation.
Section 1.9. Proxies. At all meetings of stockholders, a
stockholder entitled to vote may vote either in person or by
proxy executed in writing by the stockholder or by his duly
authorized attorney-in-fact. Such proxy shall be filed with the
secretary before or at the time of the meeting. No proxy shall
be valid after eleven months from the date of its execution,
unless otherwise provided in the proxy.
Section 1.10. Voting by Ballot. The votes for directors,
and upon the demand of any stockholder or when required by law,
the votes upon any question before the meeting, shall be by
ballot.
Section 1.11. Voting Lists. The officer who has charge of
the stock ledger of the Corporation shall prepare and make, at
least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting,
arranged in alphabetical order, and showing the address of each
stockholder and the number of shares of stock registered in the
name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours for a period of at least
ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified
in the notice of the meeting, or if not so specified, at the
place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the
whole time thereof and may be inspected by any stockholder who is
present.
Section 1.12. Place of Meeting. The Board of Directors may
designate any place, either within or without the state of
incorporation, as the place of meeting for any annual meeting or
any special meeting called by the Board of Directors. If no
designation is made or if a special meeting is otherwise called,
the place of meeting shall be the principal office of the
Corporation.
Section 1.13. Voting of Stock of Certain Holders. Shares
of capital stock of the Corporation standing in the name of
another corporation, domestic or foreign, may be voted by such
officer, agent, or proxy as the by-laws of such corporation may
prescribe, or in the absence of such provision, as the board of
directors of such corporation may determine.
Shares of capital stock of the Corporation standing in the
name of a deceased person, a minor ward or an incompetent person
may be voted by his administrator, executor, court-appointed
guardian or conservator, either in person or by proxy, without a
transfer of such stock into the name of such administrator,
executor, court-appointed guardian or conservator. Shares of
capital stock of the Corporation standing in the name of a
trustee may be voted by him, either in person or by proxy.
Shares of capital stock of the Corporation standing in the
name of a receiver may be voted, either in person or by proxy, by
such receiver, and stock held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name if authority to do so is contained in any
appropriate order of the court by which such receiver was
appointed.
A stockholder whose stock is pledged shall be entitled to
vote such stock, either in person or by proxy, until the stock
has been transferred into the name of the pledgee, and thereafter
the pledgee shall be entitled to vote, either in person or by
proxy, the stock so transferred.
Shares of its own capital stock belonging to this
Corporation shall not be voted, directly or indirectly, at any
meeting and shall not be counted in determining the total number
of outstanding stock at any given time, but shares of its own
stock held by it in a fiduciary capacity may be voted and shall
be counted in determining the total number of outstanding stock
at any given time.
Article II
Board of Directors
Section 2.1. General Powers. The business, affairs, and
the property of the Corporation shall be managed and controlled
by the Board of Directors (the "Board"), and, except as otherwise
expressly provided by law, the Certificate of Incorporation or
these By-Laws, all of the powers of the Corporation shall be
vested in the Board.
Section 2.2. Number of Directors. The number of directors
which shall constitute the whole Board shall be not fewer than
one nor more than five. Within the limits above specified, the
number of directors shall be determined by the Board of Directors
pursuant to a resolution adopted by a majority of the directors
then in office.
Section 2.3. Election, Term and Removal. Directors shall
be elected at the annual meeting of stockholders to succeed those
directors whose terms have expired. Each director shall hold
office for the term for which elected and until his or her
successor shall be elected and qualified. Directors need not be
stockholders. A director may be removed from office at a meeting
expressly for that purpose by the vote of stockholders holding
not less than two-thirds of the shares entitled to vote at an
election of directors.
Section 2.4. Vacancies. Vacancies in the Board of
Directors, including vacancies resulting from an increase in the
number of directors, may be filled by the affirmative vote of a
majority of the remaining directors then in office, though less
than a quorum; except that vacancies resulting from removal from
office by a vote of the stockholders may be filled by the
stockholders at the same meeting at which such removal occurs
provided that the holders of not less than two-thirds of the
outstanding capital stock of the Corporation (assessed upon the
basis of votes and not on the basis of number of shares) entitled
to vote for the election of directors, voting together as a
single class, shall vote for each replacement director. All
directors elected to fill vacancies shall hold office for a term
expiring at the time of the next annual meeting of stockholders
and upon election and qualification of his successor. No
decrease in the number of directors constituting the Board of
Directors shall shorten the term of an incumbent director.
Section 2.5. Resignations. Any director of the Corporation
may resign at any time by giving written notice to the president
or to the secretary of the Corporation. The resignation of any
director shall take effect at the time specified therein and,
unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 2.6. Place of Meetings, etc. The Board of
Directors may hold its meetings, and may have an office and keep
the books of the Corporation (except as otherwise may be provided
for by law), in such place or places in or outside the state of
incorporation as the Board from time to time may determine.
Section 2.7. Regular Meetings. Regular meetings of the
Board of Directors shall be held as soon as practicable after
adjournment of the annual meeting of stockholders at such time
and place as the Board of Directors may fix. No notice shall be
required for any such regular meeting of the Board.
Section 2.8. Special Meetings. Special meetings of the
Board of Directors shall be held at places and times fixed by
resolution of the Board of Directors, or upon call of the
chairman of the Board, if any, or vice-chairman of the Board, if
any, the president, an executive vice president or two-thirds of
the directors then in office.
The secretary or officer performing the secretary's duties
shall give not less than twenty-four hours' notice by letter,
telegraph or telephone (or in person) of all special meetings of
the Board of Directors, provided that notice need not given of
the annual meeting or of regular meetings held at times and
places fixed by resolution of the Board. Meetings may be held at
any time without notice if all of the directors are present, or
if those not present waive notice in writing either before or
after the meeting. The notice of meetings of the Board need not
state the purpose of the meeting.
Section 2.9. Participation by Conference Telephone.
Members of the Board of Directors of the Corporation, or any
committee thereof, may participate in a regular or special or any
other meeting of the Board or committee by means of conference
telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and
such participation shall constitute presence in person at such
meeting.
Section 2.10. Action by Written Consent. Any action
required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof, may be taken without a
meeting if prior or subsequent to such action all the members of
the Board or such committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the
minutes of the proceedings of the Board or committee.
Section 2.11. Quorum. A majority of the total number of
directors then in office shall constitute a quorum for the
transaction of business; but if at any meeting of the Board there
be less than a quorum present, a majority of those present may
adjourn the meeting from time to time.
Section 2.12. Business. Business shall be transacted at
meetings of the Board of Directors in such order as the Board may
determine. At all meetings of the Board of Directors, the
chairman of the Board, if any, the president, or in his absence
the vice-chairman, if any, or an executive vice president, in the
order named, shall preside.
Section 2.13. Interest of Directors in Contracts. (a) No
contract or transaction between the Corporation and one or more
of its directors or officers, or between the Corporation and any
other corporation, partnership, association, or other
organization in which one or more of the Corporation's directors
or officers, are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or
solely because the director or officer is present at or
participates in the meeting of the Board or committee which
authorizes the contract or transaction, or solely because his or
their votes are counted for such purpose, if:
(1) The material facts as to his relationship or interest
and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee,
and the Board or committee in good faith authorizes the
contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though
the disinterested directors be less than a quorum; or
(2) The material facts as to his relationship or interest
and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon,
and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the
Corporation as of the time it is authorized, approved
or ratified, by the Board of Directors, a committee of
the Board of Directors or the stockholders.
(b) Interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of
a committee which authorizes the contract or transaction.
Section 2.14. Compensation of Directors. Each director of
the Corporation who is not a salaried officer or employee of the
Corporation, or of a subsidiary of the Corporation, shall receive
such allowances for serving as a director and such fees for
attendance at meetings of the Board of Directors or the executive
committee or any other committee appointed by the Board as the
Board may from time to time determine.
Section 2.15. Loans to Officers or Employees. The Board of
Directors may lend money to, guarantee any obligation of, or
otherwise assist, any officer or other employee of the
Corporation or of any subsidiary, whether or not such officer or
employee is also a director of the Corporation, whenever, in the
judgment of the directors, such loan, guarantee, or assistance
may reasonably be expected to benefit the Corporation; provided,
however, that any such loan, guarantee, or other assistance given
to an officer or employee who is also a director of the
Corporation must be authorized by a majority of the entire Board
of Directors. Any such loan, guarantee, or other assistance may
be made with or without interest and may be unsecured or secured
in such manner as the Board of Directors shall approve,
including, but not limited to, a pledge of shares of the
Corporation, and may be made upon such other terms and conditions
as the Board of Directors may determine.
Section 2.16. Nomination. Subject to the rights of holders
of any class or series of stock having a preference over the
common stock as to dividends or upon liquidation, nominations for
the election of directors may be made by the Board of Directors
or by any stockholder entitled to vote in the election of
directors generally. However, any stockholder entitled to vote
in the election of directors generally may nominate one or more
persons for election as directors at a meeting only if written
notice of such stockholder's intent to make such nomination or
nominations has been given, either by personal delivery or by
United States mail, postage prepaid, to the secretary of the
Corporation not later than (i) with respect to an election to be
held at an annual meeting of stockholders, the close of business
on the last day of the eighth month after the immediately
preceding annual meeting of stockholders, and (ii) with respect
to an election to be held at a special meeting of stockholders
for the election of directors, the close of business on the fifth
day following the date on which notice of such meeting is first
given to stockholders. Each such notice shall set forth: (a) the
name and address of the stockholder who intends to make the
nomination and of the person or persons to be nominated; (b) a
representation that the stockholder is a holder of record of
stock of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a
description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination
or nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder
as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange
Commission, had the nominee been nominated, or intended to be
nominated, by the Board of Directors, and; (e) the consent of
each nominee to serve as a director of the Corporation if so
elected. The presiding officer at the meeting may refuse to
acknowledge the nomination of any person not made in compliance
with the foregoing procedure.
Article III
Committees
Section 3.1. Committees. The Board of Directors, by
resolution adopted by a majority of the number of directors then
fixed by these By-Laws or resolution thereto, may establish such
standing or special committees of the Board as it may deem
advisable, and the members, terms, and authority of such
committees shall be set forth in the reslutions establishing such
committee.
Section 3.2. Executive Committee Number and Term of Office.
The Board of Directors may, at any meeting, by majority vote of
the Board of Directors, elect from the directors an executive
committee. The executive committee shall consist of such number
of members as may be fixed from time to time by resolution of the
Board of Directors. The Board of Directors may designate a
chairman of the committee who shall preside at all meetings
thereof, and the committee shall designate a member thereof to
preside in the absence of the chairman.
Section 3.3. Executive Committee Powers. The executive
committee may, while the Board of Directors is not in session,
exercise all or any of the powers of the Board of Directors in
all cases in which specific directions shall not have been given
by the Board of Directors; except that the executive committee
shall not have the power or authority of the Board of Directors
to (i) amend the Certificate of Incorporation or the By-Laws of
the Corporation, (ii) fill vacancies on the Board of Directors,
(iii) adopt an agreement or certification of ownership, merger or
consolidation, (iv) recommend to the stockholders the sale, lease
or exchange of all or substantially all of the Corporation's
property and assets, or a dissolution of the Corporation or a
revocation of a dissolution, (v) declare a dividend, or (vi)
authorize the issuance of stock.
Section 3.4. Executive Committee Meetings. Regular and
special meetings of the executive committee may be called and
held subject to the same requirements with respect to time, place
and notice as are specified in these By-Laws for regular and
special meetings of the Board of Directors. Special meetings of
the executive committee may be called by any member thereof.
Unless otherwise indicated in the notice thereof, any and all
business may be transacted at a special or regular meeting of the
executive meeting if a quorum is present. At any meeting at
which every member of the executive committee shall be present,
in person or by telephone, even though without any notice, any
business may be transacted. All action by the executive
committee shall be reported to the Board of Directors at its
meeting next succeeding such action.
The executive committee shall fix its own rules of
procedure, and shall meet where and as provided by such rules or
by resolution of the Board of Directors, but in every case the
presence of a majority of the total number of members of the
executive committee shall be necessary to constitute a quorum.
In every case, the affirmative vote of a quorum shall be
necessary for the adoption of any resolution.
Section 3.5. Executive Committee Vacancies. The Board of
Directors, by majority vote of the Board of Directors then in
office, shall fill vacancies in the executive committee by
election from the directors.
Article IV
The Officers
Section 4.1. Number and Term of Office. The officers of
the Corporation shall consist of, as the Board of Directors may
determine and appoint from time to time, a chief executive
officer, a president, one or more executive vice-presidents, a
secretary, a treasurer, a controller, and/or such other officers
as may from time to time be elected or appointed by the Board of
Directors, including such additional vice-presidents with such
designations, if any, as may be determined by the Board of
Directors and such assistant secretaries and assistant
treasurers. In addition, the Board of Directors may elect a
chairman of the Board and may also elect a vice-chairman as
officers of the Corporation. Any two or more offices may be held
by the same person. In its discretion, the Board of Directors
may leave unfilled any office except as may be required by law.
The officers of the Corporation shall be elected or
appointed from time to time by the Board of Directors. Each
officer shall hold office until his successor shall have been
duly elected or appointed or until his death or until he shall
resign or shall have been removed by the Board of Directors.
Each of the salaried officers of the Corporation shall
devote his entire time, skill and energy to the business of the
Corporation, unless the contrary is expressly consented to by the
Board of Directors or the executive committee.
Section 4.2. Removal. Any officer may be removed by the
Board of Directors whenever, in its judgment, the best interests
of the Corporation would be served thereby.
Section 4.3. The Chairman of the Board. The chairman of
the Board, if any, shall preside at all meetings of stockholders
and of the Board of Directors and shall have such other authority
and perform such other duties as are prescribed by law, by these
By-Laws and by the Board of Directors. The Board of Directors
may designate the chairman of the Board as chief executive
officer, in which case he shall have such authority and perform
such duties as are prescribed by these By-Laws and the Board of
Directors for the chief executive officer.
Section 4.4. The Vice-Chairman. The vice-chairman, if any,
shall have such authority and perform such other duties as are
prescribed by these By-Laws and by the Board of Directors. In
the absence or inability to act of the chairman of the Board and
the president, he shall preside at the meetings of the
stockholders and of the Board of Directors and shall have and
exercise all of the powers and duties of the chairman of the
Board. The Board of Directors may designate the vice-chairman as
chief executive officer, in which case he shall have such
authority and perform such duties as are prescribed by these
By-Laws and the Board of Directors for the chief executive
officer.
Section 4.5. The President. The president shall have such
authority and perform such duties as are prescribed by law, by
these By-Laws, by the Board of Directors and by the chief
executive officer (if the president is not the chief executive
officer). The president, if there is no chairman of the Board,
or in the absence or the inability to act of the chairman of the
Board, shall preside at all meetings of stockholders and of the
Board of Directors. Unless the Board of Directors designates the
chairman of the Board or the vice-chairman as chief executive
officer, the president shall be the chief executive officer, in
which case he shall have such authority and perform such duties
as are prescribed by these By-Laws and the Board of Directors for
the chief executive officer.
Section 4.6. The Chief Executive Officer. Unless the Board
of Directors designates the chairman of the Board or the vice-
chairman as chief executive officer, the president shall be the
chief executive officer. The chief executive officer of the
Corporation shall have, subject to the supervision and direction
of the Board of Directors, general supervision of the business,
property and affairs of the Corporation, including the power to
appoint and discharge agents and employees, and the powers vested
in him by the Board of Directors, by law or by these By-Laws or
which usually attach or pertain to such office.
Section 4.7. The Executive Vice-Presidents. In the absence
of the chairman of the Board, if any, the president and the
vice-chairman, if any, or in the event of their inability or
refusal to act, the executive vice-president (or in the event
there is more than one executive vice-president, the executive
vice-presidents in the order designated, or in the absence of any
designation, then in the order of their election) shall perform
the duties of the chairman of the Board, of the president and of
the vice-chairman, and when so acting, shall have all the powers
of and be subject to all the restrictions upon the chairman of
the Board, the president and the vice-chairman. Any executive
vice-president may sign, with the secretary or an authorized
assistant secretary, certificates for stock of the Corporation
and shall perform such other duties as from time to time may be
assigned to him by the chairman of the Board, the president, the
vice-chairman, the Board of Directors or these By-Laws.
Section 4.8. The Vice-Presidents. The vice-presidents, if
any, shall perform such duties as may be assigned to them from
time to time by the chairman of the Board, the president, the
vice-chairman, the Board of Directors, or these By-Laws.
Section 4.9. The Treasurer. Subject to the direction of
chief executive officer and the Board of Directors, the treasurer
shall have charge and custody of all the funds and securities of
the Corporation; when necessary or proper he shall endorse for
collection, or cause to be endorsed, on behalf of the
Corporation, checks, notes and other obligations, and shall cause
the deposit of the same to the credit of the Corporation in such
bank or banks or depositary as the Board of Directors may
designate or as the Board of Directors by resolution may
authorize; he shall sign all receipts and vouchers for payments
made to the Corporation other than routine receipts and vouchers,
the signing of which he may delegate; he shall sign all checks
made by the Corporation (provided, however, that the Board of
Directors may authorize and prescribe by resolution the manner in
which checks drawn on banks or depositaries shall be signed,
including the use of facsimile signatures, and the manner in
which officers, agents or employees shall be authorized to sign);
unless otherwise provided by resolution of the Board of
Directors, he shall sign with an officer-director all bills of
exchange and promissory notes of the Corporation; whenever
required by the Board of Directors, he shall render a statement
of his cash account; he shall enter regularly full and accurate
account of the Corporation in books of the Corporation to be kept
by him for that purpose; he shall, at all reasonable times,
exhibit his books and accounts to any director of the Corporation
upon application at his office during business hours; and he
shall perform all acts incident to the position of treasurer. If
required by the Board of Directors, the treasurer shall give a
bond for the faithful discharge of his duties in such sum and
with such sure ties as the Board of Directors may require.
Section 4.10. The Secretary. The secretary shall keep the
minutes of all meetings of the Board of Directors, the minutes of
all meetings of the stockholders and (unless otherwise directed
by the Board of Directors) the minutes of all committees, in
books provided for that purpose; he shall attend to the giving
and serving of all notices of the Corporation; he may sign with
an officer-director or any other duly authorized person, in the
name of the Corporation, all contracts authorized by the Board of
Directors or by the executive committee, and, when so ordered by
the Board of Directors or the executive committee, he shall affix
the seal of the Corporation thereto; he may sign with the
president or an executive vice-president all certificates of
shares of the capital stock; he shall have charge of the
certificate books, transfer books and stock ledgers, and such
other books and papers as the Board of Directors or the executive
committee may direct, all of which shall, at all reasonable
times, be open to the examination of any director, upon
application at the secretary's office during business hours; and
he shall in general perform all the duties incident to the office
of the secretary, subject to the control of the chief executive
officer and the Board of Directors.
Section 4.11. The Controller. The controller shall be the
chief accounting officer of the Corporation. Subject to the
supervision of the Board of Directors, the chief executive
officer and the treasurer, the controller shall provide for and
maintain adequate records of all assets, liabilities and
transactions of the Corporation, shall see that accurate audits
of the Corporation's affairs are currently and adequately made
and shall perform such other duties as from time to time may be
assigned to him.
Section 4.12. The Assistant Treasurers and Assistant
Secretaries. The assistant treasurers shall respectively, if
required by the Board of Directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as
the Board of Directors may determine. The assistant secretaries
as thereunto authorized by the Board of Directors may sign with
the chairman of the Board, the president, the vice-chairman or an
executive vice-president, certificates for stock of the
Corporation, the issue of which shall have been authorized by a
resolution of the Board of Directors. The assistant treasurers
and assistant secretaries, in general, shall perform such duties
as shall be assigned to them by the treasurer or the secretary,
respectively, or chief executive officer, the Board of Directors,
or these By-Laws.
Section 4.13. Salaries. The salaries of the officers shall
be fixed from time to time by the Board of Directors, and no
officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the Corporation.
Section 4.14. Voting upon stocks. Unless otherwise ordered
by the Board of Directors or by the executive committee, any
officer, director or any person or persons appointed in writing
by any of them, shall have full power and authority in behalf of
the Corporation to attend and to act and to vote at any meetings
of stockholders of any corporation in which the Corporation may
hold stock, and at any such meeting shall possess and may
exercise any and all the rights and powers incident to the
ownership of such stock, and which, as the owner thereof, the
Corporation might have possessed and exercised if present. The
Board of Directors may confer like powers upon any other person
or persons.
Article V
Contracts and Loans
Section 5.1. Contracts. The Board of Directors may
authorize any officer or officers, agent or agents, to enter into
any contract or execute and deliver any instrument in the name of
and on behalf of the Corporation, and such authority may be
general or confined to specific instances.
Section 5.2. Loans. No loans shall be contracted on behalf
of the Corporation and no evidences of indebtedness shall be
issued in its name unless authorized by a resolution of the Board
of Directors. Such authority may be general or confined to
specific instances.
Article VI
Certificates for Stock and Their Transfer
Section 6.1. Certificates for Stock. Certificates
representing stock of the Corporation shall be in such form as
may be determined by the Board of Directors. Such certificates
shall be signed by the chairman of the Board, the president, the
vice-chairman or an executive vice-president and/or by the
secretary or an authorized assistant secretary and shall be
sealed with the seal of the Corporation. The seal may be a
facsimile. If a stock certificate is countersigned (i) by a
transfer agent other than the Corporation or its employee, or
(ii) by a registrar other than the Corporation or its employee,
any other signature on the certificate may be a facsimile. In
the event that any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent,
or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue. All
certificates for stock shall be consecutively numbered or
otherwise identified. The name of the person to whom the shares
of stock represented thereby are issued, with the number of
shares of stock and date of issue, shall be entered on the books
of the Corporation. All certificates surrendered to the
Corporation for transfer shall be canceled and no new
certificates shall be issued until the former certificate for a
like number of shares of stock shall have been surrendered and
canceled, except that, in the event of a lost, destroyed or
mutilated certificate, a new one may be issued therefor upon such
terms and indemnity to the Corporation as the Board of Directors
may prescribe.
Section 6.2. Transfers of Stock. Transfers of stock of the
Corporation shall be made only on the books of the Corporation by
the holder of record thereof or by his legal representative, who
shall furnish proper evidence of authority to transfer, or by his
attorney thereunto authorized by power of attorney duly executed
and filed with the secretary of the Corporation, and on surrender
for cancellation of the certificate for such stock. The person
in whose name stock stands on the books of the Corporation shall
be deemed the owner thereof for all purposes as regards the
Corporation.
Article VII
Fiscal Year
Section 7.1. Fiscal Year. The fiscal year of the
Corporation shall begin on the first day of October in each year
and end on the last day of September in each year.
Article VIII
Seal
Section 8.1. Seal. The Board of Directors shall approve a
corporate seal which shall be in the form of a circle and shall
have inscribed thereon the name of the Corporation.
Article IX
Waiver of Notice
Section 9.1. Waiver of Notice. Whenever any notice is
required to be given under the provisions of these By-Laws or
under the provisions of the Certificate of Incorporation or under
the provisions of the corporation law of the state of
incorporation, waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such
notice. Attendance of any person at a meeting for which any
notice is required to be given under the provisions of these
By-Laws, the Certificate of Incorporation or the corporation law
of the state of incorporation shall constitute a waiver of notice
of such meeting except when the person attends for the express
purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully
called or convened.
Article X
Amendments
Section 10.1. Amendments. These By-Laws may be altered,
amended or repealed and new By-Laws may be adopted at any meeting
of the Board of Directors of the Corporation by the affirmative
vote of a two-thirds or more of the members of the Board, or by
the affirmative vote of the holders of 75 percent or more of the
outstanding capital stock of the Corporation (assessed upon the
basis of votes and not on the basis of number of shares) entitled
to vote generally in the election of directors, voting together
as a single class, cast at a meeting of the stockholders called
for that purpose.
Article XI
Indemnification
Section 11.1. Indemnification. The Corporation shall
indemnify its officers, directors, employees and agents to the
fullest extent permitted by the Delaware General Corporation Law,
as amended from time to time.
[END]
