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(g) of
The Securities Exchange Act of 1934
BRIDGE TECHNOLOGY, INC.
(Name of Small Business Issuer in its Charter) July 31,
1998
NEVADA 59-3065437
(State or other Jurisdiction of (I.R.S.
Employer
incorporation or organization)
Identification No.)
1815 East Carnegie, Santa Ana, CA 92705 92705
Address of principal executive offices) (Zip code)
Issuer's telephone number: 714-891-6508
Fax: 714-890-8590
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
(Title of Class)
Common Stock
Exhibit B-index Appears at Page
TABLE OF CONTENTS
Pages
Item 1. Description of Business.
Item 2. Management's Discussion and Analysis or Plan of
Operation.
Item 3. Description of Property.
Item 4. Security ownership of Certain Beneficial Owners and
Management.
Item 5. Directors, Executive officers, Promoters and Control
Persons.
Item 6. Executive Compensation.
Item 7. Certain Relationships and Related Transactions.
Item 8. Legal Proceedings.
Item 9. Market for Common Equity and Related Stockholder Matters.
Item 10. Recent Sale of Unregistered Securities.
Item 11. Description of Securities.
Item 12. Indemnification of Directors and Officers.
Item 13. Financial Statements.
Item 14. Changes in and Disagreements with Accountants on
Accounting
and Financial Disclosure.
Item 15. Financial Statements and Exhibits.
ITEM 1. Description of Business
The Company was first organized as LAAND CORPORATION under
the laws
of the State of Nevada on April 15, 1969 to acquire and develop
land in
the State of Nevada. On November 12, 1990 the Company merged with
LAND
ACQUISITION AND NEVADA DEVELOPMENT CORPORATION, a subsidiary of
the
Company organized under the laws of Nevada on November 7, 1990 and
the
original LAAND CORPORATION was dissolved.
The Company amended and restated the articles of
incorporation on
December 15, 1994 following the cancellation of the February 1991
merger
with Falcon Aviation Inc. wherein Falcon Aviation Inc.
relinquished any
claim it may have to the former Land Acquisition and Nevada
Development
Corporation.
From inception the Company was unsuccessful it its real
estate
business, accumulating losses in excess of $280,000, and company
operations ceased in 1972. Prior management kept the Company
inactive.
Although it pursued acquisition candidates from time to time no
companies
were acquired primarily due to the ultimate unavailability of
audited
financial statements from the acquisition candidate.
In March 1997 Cayman Computer Alliance Corporation (CCAC)
purchased
control of the Company from prior management in a private
transaction. A
report of this acquisition was made on Schedule 13D and it is
included in
the Exhibit section.
The shareholders at the Company's annual meeting on April 16
1997,
approved a Common Stock reverse stock split of one share for two
shares.
The Company issued one new share for two original shares of the
Company's
common stock; authorized Preferred Stock, stipulating that
Directors of
the Company were to fix the terms, and authorizing the change of
the
Company's name to Bridge Technology, Inc. The Articles of
Incorporation
were amended and restated in August 1997 to reflect these
amendments.
On April 21, 1997 the Company sold 500 shares of 6%
Convertible
Accumulative and Redeemable Preferred Stock, $1.00 stated value,
to five
accredited investors for $50,000 at $100.00 per share. Each share
of
Preferred Stock is convertible into two hundred shares of Common
Stock at
$.50 per share. In addition, on April 21, 1997 the Company
authorized a
private placement sale of up to 4,000,000 shares of common stock
to
accredited investors at $.50 per share. See Item 10, Recent Sales
of
Unregistered Securities.
In June 1997 Company acquired the name and assets of DataStor,
together
with the services of John J. Harwer who is experienced in the
management
of worldwide technical operations in the computer enhancements and
computer peripherals industry. Also in June 1997 the Company
incorporated
BRIDGE R&D, Inc. as it's wholly-owned subsidiary for the purpose
of
organizing several operating divisions under a separate entity.
BRIDGE
R&D's goal is to select, develop, market and sell computer
peripheral
products, computer component products and computer enhancement
products.
On September 1, 1997 the Company acquired all of the
outstanding
shares of NEWCORP TECHNOLOGY LIMITED, a Tokyo, Japan based
Research and
Development Corporation organized under the laws of Japan. The
purchase
price paid was 100,000 shares of BRIDGE TECHNOLOGY common stock.
The
Company plans to file for a name change for it's wholly-owned
subsidiary
Bridge R&D, Inc. to NEWCORP TECHNOLOGY (USA).
On December 27, 1997 the Company acquired the name "CD SYSTEMS"
for 5,000
shares of the Company's common stock. On March 17, 1998 the
Company hired
Mr. Frank Wu to develop the CD-ROM tower sales and marketing
business
under the CD Systems name. On April 1, 1998 the Company appointed
Mr.
Frank Wu as initial acting operations manager for Bridge R&D,
Inc..
On January 30, 1998 the Company acquired 150,000 shares of PTI
Enclosures,
Inc. ("PTI") at $1.00 per share and totaling $150,000. PTI is a
privately
held California company specializing in the design, development,
production and sales of Mass Storage Peripheral Enclosures and
Power
Supplies to major OEM customers. The Company will continue to
aggressively pursue additional key strategic investments,
licensing and
acquisitions in computer and electronics related field with an
emphasis on
component, computer enhancement and peripheral enhancement
products.
ITEM 2. Management's Discussion and Analysis or Plan of
Operation
Forward Looking Statement
The Company has elected not to submit forward looking
statement
because there is not enough historical data in the Company's
operations to
date to substantiate projections in an ever faster changing
computer
technology environment. The Company's business is dependent upon
general
economic conditions and various conditions specific to its
industry and
future trends cannot be predicted with any degree of certainty.
Net Sales increased 100% from $2,200,000 in fiscal 1996 to
$4,400,000
in fiscal 1997. Products and services mix for 1007 has changed
substantially in comparison to prior year billings principally due
to the
development of new core business by the Company in United States.
Gross Profit increased 124% from $280,635 in fiscal 1996 to
$627.398
in fiscal 1997 principally as a result of augmented sales volume.
Gross
profit as a percentage of net sales increased from 12.7% to 14%
mainly due
to the sales of certain popular computer accessories which carry
higher
profit margins.
Selling and Administrative expenses increased 137% from
$330,000 in
fiscal 1996 to $760,000 in fiscal 1997 and increased as percentage
of
sales from 14.5% to 17%. The increase in SG&A expenses is
principally
attributed to the substantial increase in business from 1996 to
1997, and
the related indirect expenses required to support the sales volume
increase, principally indirect salaries and marketing expenses.
Net loss increased % from $ in fiscal 1996 to $ in
fiscal
1997. Net losses from 1996 and 1997 are essentially attributed to
various
startup costs associated with the substantial increase in business
sales
such as the setup of the organization and sundry related expenses
to
enable the Company to expand rapidly in the near future.
Variability of year to year results and seasonal factors.
The Company has experienced variability in its net sales and
operating
expenses margins on a quarterly basis and expects thse patterns to
continue in the future. Management believes that the factors which
influence quarterly trends include seasonal market growth in the
computer
enhancement products industry and vendor scheduled introduction of
new
products and updates to existing products.
With the recognition of variations in quarterly trends by
various
businesses, the Company is still experiencing continuing increases
in
overall net sales revenues from one quarter to another. This
overall trend
in the Company's business is expected to continue in the
foreseeable
future.
Liquidity and Capital Resources.
Since new management acquired control of the Company in early
1997,
the Company has financed its operations with internal generated
cash and
with the Private Placement of its securities totaling in excess of
$1,600,000 to a limited number of accredited investors with
knowledge of
the Company's operations and plans to expand. The Private
Placement
commenced in June 1997 and was completed on or about June 30,
1998. Net
cash provided by (used in) operating activities in 1997 was
($505,000) as
compared to $99,000 in 1996, reflects the net cash used in the
changes in
most of the assets of the Company offset by an increase in
Accounts
Payable.
Net cash provided by (used in) financing activities in 1997
was
$472,000 as compared to $166,000 in 1996 mainly reflects the
increase in
net bank borrowings of $114,000 and the net proceeds from issuance
of
common stock of $375,000.
The Company believes that it can fund the growth of its core
business
with internally generated cash flow in addition to its substantial
cash
reserves from the private sale of its common stock.
Statements of Financial Accounting Standards No. 125
"Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities (SFAS No. 125) issued by the Financial Accounting
Standards
Board (FASB) is effective for transfers and servicing of financial
assets
and extinguishments of liabilities occurring after December 31,
1996, and
is to be applied prospectively. Earlier or retroactive
application is not
permitted. The new standards provides accounting and reporting
standards
for transfer and servicing of financial assets and extinguishments
of
liabilities. The Company does not expect adoption to have a
material
effect on its financial position or results of operation.
Statement of Financial Accounting Standards No. 128, (SFAS
No. 128),
"earnings Per Share", issued by the Financial Accounting Standards
Board
(FASB) is effective for financial statements issued for the period
ending
after December 315, 1997, including interim periods. The SAFS 128
requires
restatement of all periods EPS data presented. The new standard
also
requires a reconciliation of the numerator and denominator of the
basic
EPS computation to the numerator and denominator of the diluted
EPS
computation. The Company has not determined the effect of its EPS
calculation from the adoption of this statement.
Statement of Financial Accounting Standards No. 129 (SFAS No.
129),
"Disclosure of Information about Capital Structure", issued by the
Financial Accounting Standards Board (FASB) is effective for
financial
statements issued ending after December 15, 1997. The new standard
reinstates various securities disclosure requirements previously
in effect
under Accounting Principles Board Opinion No. 15, which has been
superseded by SFAS No. 129. The Company does not ecpect adoption
of SFAS
No. 129 to have any material effect, if any on its financial
position of
operations.
Statement of Financial Accounting Standards No. 130 (SFAS No.
130),
"Reporting Comprehensive Income", issued by the Financial
Accounting
Standards Board (FASB) is effective for financial statements
issued ending
after December 15, 1997. Earlier application is permitted. SFAS
No. 130
establishes certain standards for reporting of comprehensive
income and
its components in a full set of general purpose financial
statements. The
Company has not determined the effect on its financial position or
results
of operations, if any, from the adoption of this statement.
Statement of Financial Accounting Standards No. 131 (SFAS No.
131),
"Disclosure about Segments of an Enterprise and Related
Information",
issued by the Financial Accounting Standards Board (FASB) is
effective for
financial statements with fiscal year beginning after December 15,
1997.
The new standard requires that public business enterprises report
certain
financial information about operating segments of interim periods
issued
to shareholders. It also requires that public business enterprise
report
certain information about their products and services, the
geographic
areas in which they operate and their major customers. The
Company has
not determined the effect on its financial position or results of
operations, if any, from the adoption of this statement.
Effects of Inflation.
The Company believes that inflation has not had a material
effect on
its net sales and results of operations.
Effects of Fluctuation in Foreign Exchange Rates.
The Company continues to buy products and services from
foreign
suppliers. The Company contracts for such products and services in
US
dollars, thus eliminating the possible effects of currency
fluctuations.
The Company's wholly-owned subsidiary, Newcorp echnology Limited,
Japan
was subject to such currency fluctuations and subsequently
suffered losses
due mainly to the decline of Japanese yen from 106 Yen/dollar to
present
rate of 140 Yen/dollar. In May, 1998 Newcorp Japan changed their
sales
contracts with their OEM customers to from Japanese Yen to US
dollars in
order to eliminate future material effect of currency fluctuations
on its
net sales and results of operations.
OVERVIEW
Through in house development, joint ventures, licensing and
acquisition of leading edge technologies and companies, the
Company will
endeavor to integrate such new and existing leading edge
technologies to
create products required by Personal Computer OEMs, Value Added
Resellers
and System Integrators. The Company will sell these products both
directly
as well as through selected distributors and manufactures'
representative
organizations.
BRIDGE R&D, INC.
The Company, through its subsidiary, Bridge R&D, Inc.
(hereinafter
referred to as Newcorp Technology) has established three
divisions: the
DataStor division, the Newcorp Technology (USA) division and the
CD
Systems division. These divisions will utilize the experience of
existing
and newly hired staff in the distribution channel to distribute
its
innovative products. The Company will continue to expand Newcorp
Technology division's OEM customers and Systems Integrators to
distribute
the commodity products to new and existing customers worldwide.
The
Company will take advantage of the existing presence of key
personnel in
the worldwide distribution channels established through many years
of
related experience. This coupled with addition of more innovative
products
will allow the Company to increase the sales of its newly formed
DataStor
business unit.
NEWCORP TECHNOLOGY (USA)
The Company will expand Newcorp Technology division's OEM and
System
Integrator sales channels to improve distribution of commercial
products
to new and existing customers worldwide. The Company plans to
capitalize
on the expertise and contacts of its staff in the worldwide
distribution
channels established through many years of related experience.
Newcorp
Technology is focused on integrating several key upcoming PC and
energy
related technologies. Newcorp Technology is actively pursuing the
acquisition and licensing of new technology from several major
high
technology R&D companies, principally in Japan and USA. The
mission of the
division is to identify, evaluate, design, develop, license and/or
acquire
strategic new technologies to keep the Company in the forefront of
the
fast changing electronics technology marketplace. The Company
further
plans to either acquire or invest in several other companies that
enhance
and/or complement its core products and provide additional
products to the
Company's existing sales channels. At present the Company
identified and
commenced discussions with several such potential licensing or
acquisition
candidates, both in software and hardware. The Company is
actively
engaged in detailed discussions and negotiations with these
candidates
with an objective to complete most of the agreements in 1998.
Company
management believes that each of the companies will provide
revenue and
profit increases to the Company's existing business activities,
and
enhance the Company's overall strength and operating efficiency.
The
Company is not permitted to openly discuss or disclose the nature
of these
new technologies and products for potential licensing until the
respective
license agreements are in fact signed. However, there can be no
assurance
that any additional licensing agreements will be signed by the
Company.
Newcorp Technology is developing, marketing and selling
Notebook
HDD hardware and software upgrade kits which enhancement the mass
storage
capacity of exiting Notebook computers. The Company plans to sell
these
kits under a new brand name DIGIDISK. The Company acquired several
brand
names to support the introduction of these planned new products.
The
Company is finalizing negotiations with several manufacturers of
enclosures and other key components for the procurement of a
family of
such Notebook upgrade and enhancement products. Due to high
acquisition
costs of Notebook computers, most users keep upgrading their
Notebook
computers with more memory and larger hard disk drives. The same
users
also buy additional PCCARD options and other external peripherals
that
extend the life of their investment in Notebook computers. This
trend is
expected to continue as high end Notebook prices are staying
almost steady
between $4,000 and $6,000.
DATASTOR
DataStor division identifies, designs, assembles, tests and
distributes metal and plastic enclosures produced under a contract
by
other manufacturers, DataStor business unit also sells kits
consisting of
enclosures and power supplies, mounting brackets for various
peripheral
devices, and complete kits for integration of various peripherals
into PC
systems. PC users continue to buy upgrades for existing computers
because
these upgrades and enhancements extend the useful life of these
installed
computers. Datastor supplies wide variety of products for this
continuing
computer upgrade and enhancement business.
DataStor business unit also procures, markets, sells and
supports a
family of medium size RAID subsystems and other mass storage
accessories
through selected national and international distribution channels.
RAID is
an abbreviation for "Redundant Array of Independent Drives". The
latest
forecast of RAID market by a market research firm, Datatrend,
projects the
worldwide RAID market to reach $13 billion in 1998. Compared to
current
data backup method which uses a separate magnetic tape drive, the
RAID
subsystem replaces a single hard disk drive inside the computer
with a
redundant array of hard disk drives. The data is stored on such
RAID in a
manner that distributes and duplicates such data across several
disk
drives in a pre-determined pattern. Depending on the application,
appropriate pattern can be selected by the user to provide faster
data
access and simultaneously allow uninterrupted operation and
continued data
access in case of a defective or faulty disk drive. Compared to a
hard
disk drive, the magnetic tape drive and magnetic tape provide only
a
sequential storage media that does not provide data redundancy,
only data
backup and recovery. In case of disk drive failure, the computer
is
unusable until the user either replaces the failed disk drive and
reloads
the operating system and the data from the last tape backup, or
until the
crashed disk is repaired, reformatted and the operating system
application
programs and the data are reloaded. This usually means that
certain amount
of data is lost and has to be re-entered again. This process costs
both
time and money, and the delay in computer availability creates
further
losses. Additionally, while the old data is being reconstructed,
the newly
incoming data cannot be entered and processed, which causes an
increase in
data entry backlog and usually brings additional errors and
problems. Tape
data transfer is also comparatively slow, and the tape unit is an
additional peripheral to maintain that requires additional
Interrupt Level
and Device Address inside the computer, additional controller and
software, all of which mean added overhead and costs. The Company
believes that decreasing disk drive costs per Gigabyte of capacity
and
disk controller costs are ushering in better and more cost
effective
solutions using RAID which in turn will increase RAID acceptance
and
market share. Accelerating this is the higher cost of downtime
and
recovery from hard disk crash. These factors make a customer's
decision
to buy RAID ever easier to justify.
DataStor customers include INGRAM Micro, Tech Data and
other
National and International distributors who further sell to the
second
tier of distributors and Systems Integrators. Other customers are
the
Company's Master Resellers who sell to second and third tier OEMS,
Value
Added Resellers and System Integrators.
Part of the profits expected to be generated by DataStor and
Newcorp
divisions will be used to expand DataStor product line.
Additionally, part
of the profits will fund R&D projects in the Newcorp Technology
division.
This division focuses on integrating upcoming technologies into
its
existing products, and acquiring and licensing new technologies
from
selected companies worldwide to create new products.
CD SYSTEMS
CD SYSTEMS business unit's principal business is to sell CD-
ROM
Towers and RAID Towers, and to distribute floppy and hard disk
drive
controllers, 1.44MB floppy disk drives, 12OMB Floptical
combination
drives, high capacity hard disk drives including the latest "Ultra-
DMA"
technology drives, CD-ROM drives and CD-ROM drive changers, blank
CD-R
recordable media, and other add-on and enhancement products for
Personal
computers. CD SYSTEMS also plans to sell CD-R drives, CD-RW
drives and in
the future DVD drives. CD SYSTEMS will sell its products
worldwide
through resellers and integrators in USA, Europe and other
countries. The
market for CD (CD means the various forms of Compact Disk and
related
products) will gradually transition to CD-R which in addition to
reading
CD in next two years and the same customers who today are buying
CD-ROM
drives as well as review applications will create the demand for
the next
generation of optical storage devices based on CD-R and DVD
technology.
While CD-ROM is a Read Only device, CD-R allows users to write to
blank
CD disk (sometimes called just CD). CD-RW allows users to erase
and re-
write the information on re-writable Compact Disk media. The
upcoming new
format called DVD (Digital Versatile Disk) increases the capacity
of the
120mm Compact Disk (CD) to a proposed maximum of more than 17GB
per single
CD disk. Most manufacturers of DVD are planning to skip DVD-ROM
(Read Only Memory) and produce DVD-RAM (Random Access Memory)
which allows
for both reading and writing of information onto recordable DVD
media.
Enhancements to the current and proposed DVD standards are already
being
made and SONY demonstrated 13GB per side capacity, which would
increase
the maximum capacity of single side DVD disk from 8.5GB to 26GB.
In
addition to standard Half Height CD-ROM drives used in desktop
computers,
many manufacturers started producing 12.7mm (0.5") Slimline CD-ROM
drives.
CD SYSTEMS plans to sell products incorporating this new
technology. To
provide added value to its customers CD SYSTEMS is planning to
sell the
Slimline CD-ROM drives, enclosures, cables and PCMCIA and other
interface
cards to its customers as complete kits.
DIGIDISK
The Company established the DigiDisk business unit under the
leadership of
Mr. Bill Long, Senior Engineer. The Company negotiated an
agreement to
market and sell a family of RAID systems designed and manufactured
by
ADTX, an IBM Japan Joint Venture company. The Company has an
exclusive
agreement with ADTX providing certain sales revenue objectives are
met
within the agreed upon time frame. The Company believes that Mr.
Long's
experience in this market will allow the DigiDisk business unit to
grow at
a rapid pace. Mr. Long signed a five year employment contract with
the
Bridge R&D.
NEWCORP TECHNOLOGY LIMITED (JAPAN)
The Company acquired Newcorp Technology Japan, a Tokyo based R&D
and
technology sales company. The Company plans to capitalize on the
technologies and contacts to generate sales and profits in
computer and
communications related business. Newcorp Technology, Ltd. is
actively
pursuing the acquisition and licensing of new technology from
several
major high technology R&D companies worldwide.
No Recent Operation History or Revenue and Minimal Assets. The
Company
has had a limited operating history, and has no history in
computer
technology business prior to the hiring of new management. The
Company
has no significant assets or financial resources, other than the
funds
raised in a Private Placement of its securities totaling
$1,625,000. See
item 10, "Recent Sales of Unregistered Securities. The Company
will in all
likelihood continue to sustain more operating expenses without
corresponding revenues. This will result in the Company incurring
net
operating losses that will increase continuously until the Company
develops additional marketable products and services. There is no
assurance that the Company's product and services will be
profitable in
the future.
Speculative Nature of Company's Proposed Plan. The success of the
Company's proposed plan of operation will depend to a great extent
on it
management with limited financial resources. Present funding is
expected
to be sufficient to sustain the Company's present operation
through
December, 1998. If profitable business is not developed quickly,
the
Company will need outside financing to continue its operations.
There is
no assurance that outside financing will be available to the
Company, and
if such financing were available that the terms of such proposed
financing
would be acceptable to the Company.
Scarcity of and Competition for Business. The Company is and will
continue
to be an insignificant participant in the computer systems
business. A
large number of established entities, are active in the computer
peripheral industry and implementation of integrated circuitry.
Nearly all
such entities have significantly greater financial resources,
technical
expertise and managerial capabilities than the Company does and,
consequently, the Company will be at a competitive disadvantage.
Lack of Market Research or Marketing Organization. The Company
has
determined on its own that a market demand exists for the
Company's
contemplated business. The Company does not have a separate
marketing
organization. Present management will market the Company's
products and
services on a division basis as they are developed. Even if
demand
identified for computer peripheral concepts to be developed by the
Company, there is no assurance the Company will be successful in
business.
Lack of Diversification. The Company's proposed operations, even
if
successful, will in all likelihood be limited in nature until the
Company
obtains additional financing expected to be required in calendar
year
2000. The Company's inability to diversify its activities into a
number of
areas may subject the Company to economic fluctuations within a
particular
specific field, and therefore increase the risks associated with
the
Company's operations.
Regulation. Although the Company will be subject to regulation
under the
Securities Exchange Act of 1934, management believes the Company
will not
be subject to regulation under the Investment Company Act of 1940,
insofar
as the Company will not be engaged in the business of investing or
trading
in securities. In the event the Company engages in business
combinations
which result in the Company holding passive investment interests
in a
number of entities, the Company could be subject to regulation
under the
Investment Company Act of 1940. In such event, the Company would
be
required to register as an investment company and could be
expected to
incur significant registration and compliance costs. The Company
has
obtained no formal determination from the Securities and Exchange
Commission as to the status of the Company under the Investment
Company
Act of 1940 and, consequently, any violation of such Act would
subject the
Company to material adverse consequences.
Lack of Control by Management. Management of the Company
except for
John J. Harwer, Chairman & Chief Executive Officer consists of
employees
"At will". Therefore, if the Company is not successful,
management may
be replaced by the shareholders. Removal of one or more present
officers
and directors of the Company and a corresponding reduction in, or
elimination of, their participation in the future affairs of the
Company,
would have a negative effect on the business prospects of the
Company.
Indemnification of Officers and Directors The Articles of
Incorporation of
the Company provide that the Company shall possess the right and
may
indemnify officers and/or directors of the Company for
liabilities, which
can include liabilities arising under the securities laws.
Therefore,
assets of the Company could be used or attached to satisfy any
liabilities
subject to such indemnification. See "Item 5, Indemnification of
Directors and Officers."
COMPETITION
The Company will remain an insignificant participant among all the
firms
that engage in the research and development in the computer
peripheral
industry. There are many established concerns which have
significantly
greater financial and personnel resources and technical expertise
than the
Company does. In view of the Company's combined extremely limited
financial resources and limited management availability, the
Company will
continue to be at a significant competitive disadvantage compared
to the
Company's competitors.
Item 3. Description of Property
The Company has minimal properties and at this time has no
agreements to
acquire any properties.
The Company's corporate offices, and the offices of Bridge
R&D, Inc.
are located in sublet facilities at 1815 East Carnegie, Santa Ana,
CA
92705. The Company is expecting to move into
10,000 square feet of office and warehouse space to house its
corporate
and operating divisions at 12601 Monarch Street, Garden Grove, CA.
92641.
Item 4. Security Ownership of Certain Beneficial Owners and
Management
The table below lists the beneficial ownership of the Company's
voting
securities by each person known by the Company to be the
beneficial owner
of more than 5% of such securities, as well as the securities of
the
Company beneficially owned by all directors and officers of the
Company.
Unless otherwise indicated, the shareholders listed possess sole
voting
and investment power with respect to the shares shown.
Name and Address of Preferred Common % Title of
Class
Beneficial Owner Shares Shares
Ownership
- ------------------------------------------------------------------
- -
John T. Gauthier (1)
10532 Walker St. #B 0 0 Common
Cypress, CA 90630
John J. Harwer (1)
1815 East Carnegie Ave. 700,000 14.6 Common
Santa Ana, CA92705
Tetsuji Aoyagi (1)
2-12-38, Aobadai, Aoba-Ku 200,000 4.9 Common
Yokohama-Shi, Kanagawa-Ken, Japan
Robert Walling, Esq.
3 Park Plaza, Ste. 1735 0 0 Common
Irvine, CA 92714
Hideki Watanabe (1)
4-14-2 Nagatsuda, Midori-Ku 200,000 4.9 Common
Yokohama-Shi, Kanagawa-Ken, Japan
Cayman Computer
Alliance Corporation
4 Park Plaza 16th Fl. 413,206 10.1 Common
Irvine, CA 92623
COMMON
All Officers & 1,100,000 24.3
Directors as a Group (2)
(1) Officer and/or Director of the Company.
(2) The balance of the Company's outstanding Common Shares are
held by
1712 persons.
Item 5. Directors, Executive Officers, Promoters and Control
Persons.
The directors and officers of the Company are as follows:
Name Age Position
John J. Harwer 51 President, CEO & Co-Chairman
of the Board
Tetsuji Aoyagi 45 Co-Chairman of the Board
John T. Gauthier 70 CFO & Director
Robert Walling, Esq. 53 Secretary & Director
Hideki Watanabe 48 Director
The above listed directors will serve until the next annual
meeting of the
shareholders or until their death, resignation, retirement,
removal, or
disqualification, or until their successors have been duly elected
and
qualified. Vacancies in the existing Board of Directors are filled
by
majority vote of the remaining Directors. Officers of the Company
serve
at the will of the Board of Directors. There is no family
relationship
between executive Officers and Directors of the Company.
Resumes
John J. Harwer is Chief Executive Officer of the Company since
June 1997
and Co-Chairman since April 1998. From January 1996 to May 1997,
Mr.
Harwer owned and managed a computer distribution company, Allied
Web Inc.
with $35 million in 1996 annual sales. From May 1994 to April
1996, he was
a majority owner of SimmSun, Inc. a supplier of computer memory
and
components to the various domestic and international companies.
From
January 1990 to May 1994, he was Vice President of Operations and
New
Product Development for CMS Enhancements, a $200 million NYSE
computer
peripheral company. From 1971 through 1989, he held senior
engineering,
marketing and management positions with several companies in the
computer
industry including Hewlett-Packard, Raytheon, Gerber Scientific,
PICKER
NUCLEAR, GENRAD, Calcomp, etc.. Mr. Harwer also served as
technology
consultant to Burroughs (UNISYS), SHARP USA, GRAPHTEC, HOUSTON
INSTRUMENTS, AMTEC and others. He received his master of Computer
Science
degree from Charles University, Prague, Czechoslovakia in 1971.
He took
graduate studies in Communications at Northeastern University,
Boston,
Massachusetts, in addition to two years of legal training focused
on
Contracts and Intellectual Property. Later while working full
time he
studied law at night with focus on Contracts and Intellectual
Property. He
also took advanced studies in Fault Tolerant Computing and Data
Transmission at UCLA. He also attended MBA courses at graduate
night
school of Business at Cal State Fullerton. He has conducted and
participated in numerous management and technology seminars and
conferences. Mr. Harwer devotes full time to the operations of
the
Company.
Tetsuji Aoyagi is the Co-Chairman and Director of the Company
since
April 1998. He is also the President, Chief Executive Officer and
Director of Digital Stream Corporation, a Tokyo, Japan based R&D
company.
Mr. Aoyagi has over 17 years experience in Research and
Development of
high technology products, especially in the field of Optical Media
Storage
and Human Interface field. From 1980 until 1984 he worked at
Thompson
Research and Development Corporation, where he was responsible for
all the
consumer product developments as a special Scientific Adviser to
the
President. In 1985 he founded MOST Corporation in Los Angeles,
California, where he was responsible for 3.5 inch Magneto-optical
disc
drive. Mr Aoyagi became the General Manager and was responsible
for
marketing of this Magneto-Optical drive to OEM accounts until
1987.
In1987 he founded Digital Stream Corporation in Yokohama, Japan
where he
is responsible for corporate management. Mr. Aoyagi also served as
the
Chairman of the Board of Data Stream cooperation, a Joint Venture
organized by the Singapore Government and Creative Technology. Mr
Aoyagi
received his M.Sc. Degree in Optics in 1974 from the State
University of
Pennsylvania at Edinboro. Mr. Aoyagi devotes as much time as
possible
concurrent with his other responsibilities.
John T. Gauthier is the Chief Financial Officer and Director
of the
Company, and he was the Chairman of the Board of Directors from
March 1997
until April 1998. He is also the Secretary-Treasurer, Chief
Financial
Officer and Director of the Exell Corporation since June 1995.
Since 1984
he is the President of Cottesloe Capital Corporation, a due
diligence
consulting firm to small businesses. He was Chairman of the Board
and
Executive Vice President of Americare International Inc., a small
capitalization public company in the medical field, from January
1990 to
December 1993. Mr. Gauthier was President and Chairman of the
Board of
Bond Street Capital Corporation, a small New York-based investment
banking
firm, from September 1986 to October 1988. For twelve years Mr.
Gauthier
was President and Chairman of the Board of Datronic Engineers
Inc., a
small capitalization public company engaged in the design,
furnishing and
installation of long range telecommunications systems
internationally.
For six years he was Director of Finance and Administration for
Northrop
Corporation's subsidiary: Page Communications Engineers, a leading
international telecommunications company. He was a former
management
consultant to the Executive Director of the International Monetary
Fund of
the World Bank. He was also a Founder and Director of the Free
State Bank
and Trust Company in Potomac, Maryland. Mr. Gauthier received a
Bachelor
of Science Degree in Finance from Fordham University in 1953 and
completed
the MBA program at the Graduate School of Business, George
Washington
University in 1957. Mr. Gauthier also completed two years of
legal
training at the Georgetown University Law Center in 1959. Mr.
Gauthier
devotes as much time as is necessary as the CFO of the Company.
Robert Walling, Esq., is a Director since March 1997. From
1973
until 1975 he was with the legal department of Bank of America,
San
Francisco, California. From 1988 until he was a partner at
Friedman,
Peterson, Walling & Lau, a Law practice devoted to mortgage
banking, real
estate, corporate and tax law. From 1995 Mr. Walling has been in
private
practice in Newport Beach, California specializing in mortgage
banking,
real estate, corporate law and tax law. Mr. Walling received LLM
degree in
taxation from New York University of Law. He also received Juris
Doctor
degree from University of California, Hastings College of Law, and
Bachelor of Arts from University of California. Mr. Walling is a
Judge Pro
Tem at Harbor Municipal court.Mr. Walling will devote as much time
to the
company as may reasonably be required.
Hideki Watanabe is a Director of the Company since April
1998. Mr.
Watanabe is also the current President of NEWCORP TECHNOLOGY
LIMITED, a
Tokyo, Japan based electronics technology R&D and sales company
that was
acquired by Bridge in September 1997. He graduated from Nihon
Physical
Education College in 1972. From 1972 until 1982 he worked for
Wakou-Shoji.
From 1983 until 1984 he was the President of Seiei Corporation. In
1995 he
co-founded and became the President of Newcorp Technology Limited,
where
he is responsible for international sales and marketing of high
technology
products for the company. Mr. Watanabe devotes full time to the
Company's
operations in Japan.
Conflicts of Interest
Certain members of the Company's management are associated with
other
firms involved in a range of business activities. Consequently,
there are
potential inherent conflicts of interest in their acting as
Officers and
Directors of the Company. Insofar as these officers and directors
are
engaged in other business activities, management anticipates they
will
devote less than full time to the Company's affairs.
The officers and directors of the Company are now and may in the
future
become shareholders, Officers or Directors of other companies
which may be
formed for the purpose of engaging in business activities similar
to those
conducted by the Company. Accordingly, additional direct
conflicts of
interest may arise in the future with respect to such individuals
acting
on behalf of the Company or other entities. Moreover, additional
conflicts of interest may arise with respect to opportunities
which come
to the attention of such individuals in the performance of their
duties or
otherwise. The Company does currently have a right of first
refusal
pertaining to opportunities that come to management's attention
insofar as
such opportunities may relate to the Company' s proposed business
operations.
The Officers and Directors are, so long as they are Officers
or
Directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation
which come
to their attention, either in the performance of their duties or
in any
other manner, will be considered opportunities of, and be made
available
to the Company and the companies that they are affiliated with on
an equal
basis. A breach of this requirement will be a breach of the
fiduciary
duties of the Officer or Director. If the Company or the
companies in
which the Officers and Directors are affiliated with both desire
to take
advantage of an opportunity, then said Officers and Directors
would
abstain from negotiating and voting upon the opportunity. However,
all
directors may still individually take advantage of opportunities
if the
Company should decline to do so. Except as set forth above, the
Company
has not adopted any other conflict of interest policy with respect
to such
transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities
Act of 1934 and the Securities Exchange Act of 1934, management
believes
the Company will not be subject to regulation under the Investment
Company
Act of 1940 insofar as the Company will not be engaged in the
business of
investing or trading in securities in the event the Company
engages in
business combinations which result in the Company holding passive
investment interests in a number of entities, the Company could be
subject
to regulation under the Investment Company Act of 1940. In such
event,
the Company would be required to register as an investment company
and
could be expected to incur significant registration and compliance
costs.
The Company has obtained no formal determination from the
Securities and
Exchange Commission as to the status of the Company under the
Investment
Company Act of 1940 and, consequently, any violation of such Act
would
subject the Company to material adverse consequences. The
Company's Board
of Directors unanimously approved a resolution stating that it is
the
Company's desire to be exempt from the Investment Company Act of
1940 via
Regulation 3a-2 thereto.
Item 6. Executive Compensation.
The Company has entered into a five-year employment contract with
John J.
Harwer effective June 1, 1997 as its President and CEO at an
annual salary
of $200,000, with Mr. Harwer having the election to take up to 50%
of his
salary in Common Stock of the Company at fair market value at the
time of
the election. In 1997 Mr. Harwer received $56,000.03 representing
less
than 31% of his remuneration per employment contract. Mr. Harwer
agreed to
waive the balance due including unpaid fringe benefits for the
year 1997.
No other officers or Directors receives any compensation for
their
respective services rendered to the Company, and none have
received such
compensation in the past.
No retirement, pension, profit sharing or insurance programs
or
other similar programs have been adopted by the Company for the
benefit of
its employees, except for the Company's Incentive Stock Option
Plan.
Item 7. Certain Relationships and Related Transactions.
There have been no other related party transactions, or any other
transactions or relationships required to be disclosed pursuant to
Item
404 of Regulation except as disclosed in the Notes to the
financial
statements.
Item 8. Legal Proceedings.
There is no litigation pending or threatened by or against the
Company.
Item 9. Market Price for Common Equity and Related Stockholder
Matters.
There is no trading market for the Company's Common Stock at
present and
there has been no trading market for at least the past 10 years.
Management has not undertaken any discussions, preliminary or
otherwise,
with any prospective market maker concerning the participation of
such
market maker in the market for the Company's securities.
Management does
not intend to initiate any such discussions until such time as the
Company
has become a fully reporting company on a voluntary basis with
the SEC
and has filed all the Financial Statements and disclosure
documents.
There is no assurance that a trading market will ever develop or,
if such
a market does inn fact develop, that it will continue.
a. Market Price. The Company's Common Stock is not quoted
at the
present time. Effective August 11, 1993 the Securities and
Exchange
Commission adopted Rule 15g-9, which established 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 stock
in both public offering 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.
The Company eventually expects to qualify for listing on the
NASDAQ
National Market System upon completion of its operation for the
fiscal
year ending December 31, 1998. In the interim, and after the
Company has
become a reporting company with the SEC, the Company expects to be
listed
on the OTC Bulletin Board, the electronic inter-dealer quotation
system
operated by the NASD for securities not quoted on NASDAQ.
Management's plans are to develop the Company to a level
which will
allow the Company's securities to be traded within the aforesaid
limitations. However, there can be no assurances that the Company
will
ever qualify its securities for listing on NASDAQ or some national
exchange, or be able to maintain the maintenance criteria
necessary to
insure continued listing. The failure of the Company to qualify
its
securities or to meet the relevant maintenance criteria after such
qualification in the future, may result in the discontinuance of
the
inclusion of the Company's securities on a National Exchange. In
such
events, trading, if any, of the Company's securities may then
continue in
the non-NASDAQ Over-the- Counter (OTC) Bulletin Board. As a
result 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. Shareholders. There are 1,712 shareholders of record of
the
Company's Common Stock and 5 shareholders of the Company's
Preferred
Stock.
c. Dividends. The Company has not paid any dividends to
date on the
Common Stock and has no plans to do so in the immediate future.
The
Company is obligated to pay a 6% dividend on its Preferred Stock
on a
semi-annual basis.
Item 10. Recent Sales of Unregistered Securities.
The Company sold 500 shares of Preferred Stock for $100.00
per share
in April, 1997. In addition the Company sold 3,250,000 shares of
its
Common Stock in a Private Placement to the following 19 accredited
investors for $0.50 per share for a total of $1,625,000.
DATE: NAME: SHARES: PRICE/SHARE:
TOTAL:
06/30/1997 Harwer, John J. 100,000 $0.50 $50,000
09/23/1997 Harwer, John J. 300,000 0.50 150,000
12/31/1997 Harwer, John J. 300,000 0.50 150,000
06/30/1997 Cheng, Edwin 150,000 0.50 75,000
09/23/1997 Liu Han Hsing 60,000 0.50
30,000
09/23/1997 Hiroshi Watanabe 60,000 0.50 30,000
07/18/1997 Golden Excel 200,000 0.50 100,000
12/31/1997 Perimeter Holding
Limited 200,000 0.50
100,000
12/31/1997 Liu Han Huei 50,000 0.50 25,000
12/31/1997 Fan Hung Ta 130,000 0.50
65,000
12/31/1997 Djen, James 300,000 0.50 150,000
12/31/1997 DoTop Lo 50,000 0.50 25,000
12/31/1997 Cayman Computer Corp. 400,000 0.50 200,000
12/31/1997 Winston Gu 70,000 0.50 35,000
12/31/1997 Chin Lan Lee 30,000 0.50 15,000
12/31/1997 Watanabe, Hideki 150,000 0.50 75,000
12/31/1997 Watanabe, Hiroshi 150,000 0.50 75,000
12/31/1997 Aoyagi, Tetsuji 300,000 0.50 150,000
12/31/1997 Gheude, Michel * 200,000 0.50 100,000
TOTAL SHARES SUBSCRIBED: 3,250,000 $1,625,000
*NOTE: The Company has committed to sell these shares and
subscriptions
have been received from these accredited investors. The Company
requires
that all subscriptions be paid in full by September 30, 1998. As
of July
16, 1998 payment for subscription for 200,000 shares totaling
$100,000 has
not been received. In addition in connection with the acquisition
of
NEWCORP TECHNOLOGY LTD., the Company issued 100,000 shares of
restricted
common stock to the following individuals: Hideki Watanabe 50,000
shares,
Hiroshi Watanabe 50,000 shares. The Company also issued 5,000
shares of
its common stock to Mr. Chen Ying Wu for the acquisition of the
name "CD
Systems".
Some of the shares of Common Stock of the Company previously
issued during
the period from 1969 through December 31, 1970 have been issued
for
investment purposes in a "private transaction" and are
"restricted" shares
as defined in Rule 144 under the Securities Act of 1934, as
amended (the
"Act"). These shares may not be offered for public sale except
under Rule
144, or otherwise, pursuant to the Act.
As of the date of this report and except for recent sales of
securities,
all of the restricted shares issued and outstanding of the
Company's
Common Stock are eligible for sale under Rule 144 or Rule 145
promulgated
under the Securities Act of 1934, as amended, subject to certain
limitations included in the said Rules.
In general, under Rule 144, a person (or persons whose shares
are
aggregated) who has satisfied a one year holding period, under
certain
circumstances, may sell within any three-month period a number of
shares
which does not exceed the greater of one percent of the then
outstanding
Common Stock or the average weekly trading volume during the four
calendar
weeks prior to such sale. Rule 145 also permits, under certain
circumstances, the sale of shares without any quantity limitation
by a
person who has satisfied a three-year holding period and who is
not, and
has not been for the preceding three months, an affiliate of the
Company.
Any sales made under Rule 144 or Rule 145 could have a depressive
effect
on any market
of the Company's shares that may develop.
Item 11. Description of Securities.
The Company is authorized to issue 10, 000, 000 shares of
Common Stock, par value $0.01 per share and 500 shares of
Preferred
Stock, stated value $1.00 per share and hereby registers 756,128
shares of
Common Stock previously issued by the Company and the underlying
100,000
shares of Common Stock reserved for possible conversion of the
Preferred
Stock issued. In March 1997, the Company's Board of Directors
authorized
a reverse split of the Company's issued and outstanding common
stock,
whereby one share of Common Stock was issued for every two shares
of
Common Stock issued and outstanding. See enclosed "Financial
Statements." Thereafter in April 1997, the Company sold 500
shares of
Preferred Stock at $1.00 stated value per share for $50,000 to
five
shareholders. Each share of Preferred Stock is convertible into
200
shares of Common Stock. The Preferred Stock accrues a 6% dividend
per
annum on a quarterly basis. The Company's presently 4,111,128
shares of
Common Stock issued and outstanding are held by 1,712 shareholders
of
record.
Common Stock. All shares of Common Stock have equal voting rights
and,
when validly issued and outstanding, are entitled to one vote per
share in
all matters to be voted upon by shareholders. The shares of
Common Stock
have no preemptive, subscription, conversion or redemption rights
and may
be issued only as fully paid and non-assessable shares.
Cumulative voting
in the election of directors is not permitted, which means that
the
holders of a majority of the issued and outstanding shares of
Common Stock
represented at any meeting at which a quorum is present will be
able to
elect the entire Board of Directors if they so choose and, in such
event,
the holders of the remaining shares of Common Stock will not be
able to
elect any Directors. In the event of liquidation of the Company,
each
shareholder is entitled to receive a proportionate share of the
Company's
assets available for distribution to shareholders after the
payment of
liabilities and after distribution in full of preferential
amounts, if
any. All shares of the Company's Common Stock issued and
outstanding are
fully-paid and non-assessable. Holders of the Common Stock are
entitled
to a pro-rata share in dividends and distributions with respect to
the
Common Stock, as may be declared by the Board of Directors out of
funds
legally available therefor.
Preferred Shares. Shares of Preferred Stock may be issued from
time to
time in one or more Series as may be determined by the Board of
Directors.
The voting powers and preferences, the relative rights of each
such Series
and the qualifications, limitations and restrictions thereof shall
be
established by the Board of Directors, except that no holder of
Preferred
Stock shall have preemptive rights. At present the Company has
500
preferred shares authorized and outstanding.
Warrants. The Company has authorized the issuance of up to
1,000,000
Warrants to purchase the common stock of the Company. These
Warrants may
be issued from time to time in one or more classes and at various
redeemable prices as may be determined by the Board of Directors.
Item 12. Indemnification of Directors and Officers.
Article 9 of the Articles of incorporation of the Company, as
amended,
sets forth certain indemnification rights. The Articles of
incorporation
of the Company provide that the Company shall possess and may
exercise all
powers of indemnification of officers, directors, employees,
agents and
other persons and all powers and authority incidental thereto. The
Company's Board of Directors is authorized and empowered to
exercise all
of the Company's powers of indemnification without shareholder
action. The
assets of the Company could be used or attached to satisfy any
such
liabilities subject to such indemnification. See Exhibit hereto.
Item 13. Financial Statements.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Shareholders of
Bridge Technology, Inc. and Subsidiary
(a Development Stage Company)
We have audited the accompanying consolidated balance sheets of
Bridge
Technology, Inc. (a Development Stage Company and a Nevada
corporation)
and subsidiary as of December 31, 1995 and 1996, and June 30,
1997, and
the related consolidated statements of operations, shareholders'
equity
and cash flows for each of the years ended December 31, 1995 and
1996 and
the six months ended June 30, 1997. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated
financial
statements based on our audits.
We conducted our audits 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
consolidated
financial statements. An audit also includes assessing the
accounting
principles used and significant estimates made by management, as
well as
evaluating the overall presentation of the financial statements.
We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to
above
present fairly, in all material respects, the financial position
of Bridge
Technology, Inc. and a subsidiary as of December 31, 1995 and
1996, and
June 30, 1997, and the results of their operations and their cash
flows
for each of the years ended December 31, 1995 and 1996 and the six
months
ended June 30, 1997 in conformity with generally accepted
accounting
principles.
BDO Seidman, LLP
------------------------
BDO Seidman, LLP
Los Angeles, California
September 29, 1997
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
Dec. 31, Dec. 31, June
30,
1995 1996 1997
---------- ---------- ----------
ASSETS
Current assets:
Cash $ - $ - $106,726
Accounts receivable - -
$138,308
Subscription receivable
(received in Sept. 26, 1997) - -
$250,000
Inventory - -
$67,540
---------- ----------- -----
- ----
Total current assets - -
$562,574
---------- ----------- -----
- ----
Property and equipment, net (Note 1) - -
$80,189
Other assets, net of amortization of $650 - -
$7,150
---------- ---------- ----------
Total assets $ - $ -
$649,913
========== ==========
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ - $ - $246,040
Notes payable (Note 3) 30,000 30,000 -
Accrued liabilities 18,627 22,227
43,609
Dividends payable - -
750
---------- ---------- ------
- ----
Total Current liabilities - -
290,399
---------- ---------- ------
- ----
COMMITMENTS AND CONTINGENCIES
(Notes 4 and 8)
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (CONTINUED)
SHAREHOLDERS'EQUITY (Notes 5 & 6):
Convertible, cumulative and redeemable
preferred stock, $1 stated valued per
share, 500 shares authorized and
outstanding, redeemable at $50,000 - -
50,000
Common stock; par value $0.01 per
share, authorized 10,000,000 shares,
756,240 shares outstanding at Dec.
31, 1995 and 1996, 1,006240 shares
outstanding at June 30, 1997 15,124 15,124
10,062
Additional paid-in capital 268,498 268,498
398,560
Stock subscription
250,000
Accumulated deficit (332,249) (335,849)
(349,108)
--------- --------- --------
Total shareholders' equity (48,627) (52,227)
359,514
--------- --------- ---
- -----
Total liabilities and shareholders' equity $ - $ -
$649,913
========= ======== =========
See accompanying summary of accounting policies and notes to
consolidated
financial statements.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended Year Ended
6Months End
Dec. 31, Dec. 31, June
30,
1995 1996 1997
---------- ---------- ---------
Net sales $ - $ - $138,308
Cost of sales - -
89,281
---------- ---------- -----
- ----
Gross profit - -
49,027
Selling, general and
Administrative expenses - -
60,613
---------- ---------- -----
- ----
Income (loss) from operations - - (11,586)
Other income (expense):
Interest (expense) income, net (3,600) (3,600)
(923)
---------- ---------- -----
- ----
Income (loss) before income taxes (3,600) (3,600)
(12,509)
Income taxes provision (Note 2 - -
- -
---------- ---------- -----
- ----
Net income (loss) (3,600) (3,600)
(12,509)
Dividends applicable to
Preferred stock - -
(750)
---------- ---------- -----
- ----
Net income (loss) applicable to
common stock outstanding $3,600) $(3,600) $(13,259)
========== ==========
=========
Weighted average number of
common stock outstanding 756,128 756,128
765,128
========== ==========
==========
Income (loss) per common share $ - $ - $
(0.02)
========== ==========
==========
See accompanying summary of accounting policies and notes to
consolidated
financial statements.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended Dec. 31, 1995 and 1996, and Six
Months
Ended June 30, 1997
Preferred Stock Common Stock Add'l Paid-In Accum. Stock
Shares/Amount Shares/Amount Capital Deficit
Subscription Total
BALANCE, Dec. 31, 1994
- /$ - 1,512,368 $15,124 $268,498 $(328,649) $ -
$(45,027)
Net loss
- /$ - - - - (3,600) $ -
$(3,600)
BALANCE,
Dec. 31,1995
- /$ - 1,512,368 $15,124 $268,498 (332,249) $ -
$(48,627)
Net loss
- /$ - - - - (3,600) $ -
$(3,600)
BALANCE, Dec. 31,1996
- /$ - 1,512,368 $15,124 $268,498 (335,849) $ -
$(52,227)
Issuance of preferred
stock on April 1,1997
500 /$50,000 - - - - $ -
$50,000
Result of reverse stock
split on May 1, 1997
- - - (756,128) (7,562) 7,562 - $ -
- -
Issuance of common stock
in June, 1997
- - - 250,000 $2,500 $122,500 - $ -
$125,000
Subscription receivable
- - - - - - - $250,000
$250,000
Dividends declared
- - - - - - (750) -
(750)
Net loss
- - - - - - (12,509) -
(12,509)
BALANCE, June 30, 1997
500 /50,000 1,006,240 $10,062 398,560 (349,108) $250,000
$359,514
See accompanying summary of accounting policies and notes to
consolidated
financial statements.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Year Ended Year Ended
6Months End
Dec. 31, Dec. 31, June
30,
1995 1996 1997
---------- ---------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $(3,600) $(3,600)
$(13,259)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization - -
1,880
Increase (decrease) from changes in:
Accounts payable and accrued liabilities 3,600 3,600
(4,668)
---------- ---------- -----
- ----
Net cash used in operating activities - -
(16,047)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments on notes payable and
related interest (Notes 3 & 5) - -
(52,227)
Proceed from preferred stock issuance - -
50,000
Proceed from common stock issuance - -
125,000
---------- ---------- -----
- ----
Net cash provided by (used in) financing
Activities - -
122,773
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(CONTINUED)
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS - -
$106,726
CASH AND CASH EQUIVALENT,
beginning of year - - -
---------- ---------- ----------
CASH AND CASH EQUIVALENT,
end of year $ - $ -
$106,726
========== ==========
==========
Cash paid during the year for:
Interest $ - $ -
$23,150
========== ==========
==========
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
During the six months ended June 30, 1997, the Company's
subsidiary had
$138,308 of sales revenue, purchased $191,640 worth of assets from
a
related party, and did not collect cash receipts or make any cash
disbursements until July, 1997. The Company's subsidiary also did
not
reimburse employee's compensation, selling, general and
administrative
expenses until July 1997.
See accompanying summary of accounting policies and notes to
consolidated
financial statements.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
SUMMARY OF ACCOUNTING POLICIES
ORGANIZATION
Bridge Technology, Inc. was organized under the law of the State
of
Nevada on April 15, 1969 with the purpose to conduct real estate
business.
From inception, the Company was unsuccessful in its real estate
business
accumulating losses in excess of $280,000 and operation ceased in
1972.
Prior management kept the Company inactive. The inactive Company
was
regarded a development stage company.
During April 1997, Cayman Computer Alliance Corporation purchased
control
of the Company from prior shareholders and management in a private
transaction. At present, the Company is located in California and
primarily engaged in development and distribution of various
hardware,
software, and peripheral products used in computer systems and
sales to
value added resellers and system integrators. The Company has one
wholly-
owned subsidiary which was formed in April 1997 and commenced
operation on
June 1, 1997. As the Company commenced its principal operation on
June 1,
1997, thereafter, it is no longer a development stage company.
The accompanying consolidated financial statements include the
accounts of
the Company and its subsidiary. All significant inter-company
transactions and balances have been eliminated.
ACCOUNTS RECEIVABLE AND CONCENTRATION OF CREDIT RISK
During the normal course of business, the Company extends
unsecured credit
to its customers who are located in various geographical areas.
Typically
credit terms require payment made by thirtieth day following the
sale.
The Company provides an allowance for doubtful accounts based on
its
continuing evaluation of its customers' credit risk. The Company
does not
require collateral from its customers.
The Company maintains its cash accounts in two financial
institutions with
high credit worth.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
INVENTORIES
Inventories consist principally of microcomputer component parts
and
stated at the lower of weighted average cost or market.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation and
amortization
are computed using the straight-line method over the following
estimated
useful life.
Computer equipment 7 years
Furniture, fixtures and equipment 7 years
Vehicles 5 years
Maintenance, repairs and minor renewals are charged directly to
expense as
incurred. Additions and betterment to property and equipment are
capitalized. When assets are disposed of, the related cost and
accumulated depreciation are removed from the accounts and any
resulting
gain or loss is included in operations.
REVENUE RECOGNITION
The Company recognizes revenue when the risk of loss for the
product sold
passed to the customer, which is generally when goods are shipped.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The Company recognizes deferred tax liabilities and assets for the
expected future tax consequences of events that have been
recognized in
the Company's financial statements or tax returns. Deferred tax
liabilities and assets are determined, on a cumulative basis, in
accordance with the difference between the financial statements
carrying
amounts and tax bases of assets and liabilities using enacted tax
rates in
effect in the years in which the differences are expected to
reverse.
CASH AND CASH EQUIVALENTS
For purposes of these statements, cash equivalents include
investments
with original maturates of three months or less.
INCOME (LOSS) PER COMMON SHARE
Income (loss) per common share has been determined by dividing net
income
(loss) (after deducting annual cumulative preferred stock
dividends for
the six months ended June 30, 1997) by the weighted average number
of
common shares outstanding.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of financial instruments including cash and
cash
equivalents, accounts receivable, and accounts payable approximate
their
fair value due to the relatively short maturity of these
instruments.
ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with
generally
accepted accounting principles requires management to make
estimates and
assumptions that affect the reported amounts of assets and
liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses
during the reporting period. Actual results could differ from
those
estimates.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
STOCK-BASED COMPENSATION
Statements of Financial Accounting Standards No. 123, "Accounting
for
Stock-Based Compensation" (SFAS No. 123) established a fair value
of
accounting for stock-based compensation plan and for transactions
in which
an entity acquires goods or services from non-employees in
exchange for
equity instruments. The Company adopted this accounting standard
on June
1, 1997. SFAS No. 123 also encouraged, but not require companies
to
record compensation cost for stock-based employee compensation.
The
Company has chosen to continue to account for stock-based
compensation
utilizing the intrinsic value method prescribed in Accounting
Principle
Board No. 25, "Accounting for Stock Issued to Employees".
Accordingly,
compensation cost for stock options is measured as the excess, if
any, of
the fair market price of the Company' stock at the date of grant
over the
amount an employee must pay to acquire the stock.
NEW ACCOUNTING PRONOUNCEMENTS
On March 3, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per
Share"
(SFAS No. 128). This pronouncement provides a different method of
calculating earnings per share than is currently used in
accordance with
APB 15, "Earnings per Share". SFAS No. 128 provides for the
calculation
of basic and diluted earnings per share. Basic earnings per share
includes no dilution and is computed by dividing income by the
weighted
average number of common shares outstanding for the period.
Diluted
earnings per share reflects the potential dilution of securities
that
could share in the earnings of an entity, similar to fully diluted
earnings per share. This pronouncement is effective for fiscal
years and
interim periods ending after December 15, 1997; early adoption is
not
permitted. The Company has not determined the effect, if any, of
adoption
on its earnings per share computations.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Statements of Financial Accounting Standards No. 129, "Disclosure
of
Information about Capital Structure" (SFAS No. 129) issued by the
FASB is
effective for financial statements ending after December 15, 1997.
The
new standard reinstates various securities disclosure requirements
previously in effect under Accounting Principles Board Opinion No.
15,
which has been superseded by SFAS No. 128. The Company does not
expect
adoption of SFAS No. 129 to have a material effect, if any, on its
financial position or results of operations.
Statements of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" (SFAS No. 130) issued by the FASB is
effective for
financial statements with fiscal years beginning after December
15, 1997.
Earlier application is permitted. SFAS No. 130 established
standards for
reporting and display of Company has not determined the effect on
its
financial position or results of operations, if any, from the
adoption of
this statement.
Statements of Financial Accounting Standards No. 131, "Disclosure
about
Segments of an Enterprise and Related Information (SFAS No. 131)
issued by
the FASB is effective for financial statements beginning after
December
15, 1997. The new standard requires that public business
enterprises
report certain information about operating segments in complete
sets of
financial statements of the enterprise and in condensed financial
statements of interim periods issued to shareholders. It also
requires
that public business enterprises report certain information about
their
products and services, the geographic areas in which they operate
and
their major customers. The Company does not expect adoption of
SFAS No.
131 to have a material effect, if any, on its results of
operations.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. PROPERTY AND EQUIPMENT
Property and equipment consists of:
Dec. 31, Dec. 31,
June 30,
1995 1996
1997
-------- --------- ----
- ----
Furniture, fixtures and equipment $ - $ -
$30,501
Vehicles - -
13,535
Computer equipment - -
53,909
-------- --------- ----
- ----
Subtotal
81,419
Accumulated depreciation & amortization - -
(1,230)
-------- --------- ----
- -----
Property and equipment, net $ - $ -
$80,189
======== =========
=========
NOTE 2. INCOME TAXES
Among the $349,108 of accumulated deficit as of June 30, 1997,
approximately $68,356 occurred during the period from January 1,
1990 to
June 30, 1997 and could be qualified for net loss carryover
purpose.
Because there was a change in ownership in excess of 50% of total
equity
interest on April 1, 1997, the Company could use only $9,830 per
year of
net loss of $55,847 occurred before April 1, 1997 for next six
years based
on Federal income tax regulation Section 382. The qualified net
loss
carryover shall start to expire from 2005. The loss carryover
could
generate a deferred income tax asset of approximately $25,425 as
of June
30, 1997. The Company has recorded a 100% valuation allowance
against the
deferred income tax asset due to the uncertainty regarding its
realization.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 3. NOTES PAYABLE
In the fall of 1990, the Company issued a total of $30,000 demand
notes
with interest at 12% per annum to four individual shareholders in
order to
finance legal, consulting and accounting expenses in connection
with a
merger that occurred in 1990. As of December 31, 1996, the total
accumulated unpaid interest expenses amounted to $22,227. These
notes and
related interest were paid using the proceeds received by the
Company from
new issuance of preferred stock and common stock during the six
months
ended June 30, 1997.
NOTE 4. COMMITMENTS AND CONTINGENTIES
COMMITMENTS
The Company shares office space with a related party on a monthly
basis.
The wholly owned subsidiary leases office building from an
independent
party on a monthly basis. Total rental expense for each year
ended
December 31, 1995 and 1996, and the six months ended June 30, 1997
was $0,
$0, and $2,970.
The Company entered into a five-year employee contract with an
officer of
Bridge Technology, Inc. and its subsidiary. The annual base
salary
started at $200,000 commencing June 1, 1997 and shall increase by
10% of
the amount paid in the prior year on each annual anniversary
thereafter.
The officer has the right of receiving up to fifty percent of his
base
salary on a quarterly basis in the form of common stock of the
Company at
book value or at fair market value, whichever is less. The
employment
contract is automatically renewable after the five-year period is
ended
for unlimited additional terms of five years each.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 5. RELATED-PARTY TRANSACTIONS
The Company purchased certain operating assets (principally
computer
equipment, furniture and fixture, vehicles and inventory) from a
related
party in June, 1997. The purchase was recorded by using net book
value
based on historical costs of these assets for a total of $191,640.
Included in the accompanying consolidated cash flow statements is
a
repayment of $52,227 to related parties for notes payable and
corresponding accumulated interest during the six months ended
June 30,
1997.
NOTE 6. SHAREHOLDERS' EQUITY
In April 1997 the Company issued 500 shares of preferred stock
which has a
stated value of $1.00 per share, for net proceeds of $50,000.
Among these
500 shares of preferred stock, 150 shares were issued to an
officer. The
preferred stock is convertible at 1 share of preferred stock to
200 shares
of common stock, with quarterly dividend accumulated at 6% per
annum, and
redeemable at the Company's option for $100 per share at any time
after
December 31, 1997.
In April, 1997 the Company affected a two for one reverse stock
split.
Consequently, 1,512,368 shares of common stock outstanding were
exchanged
for 756,240 shares. The weighted average number of common shares
outstanding and earnings per share for the year ended December 31,
1995
and 1996, and the six months ended June 30, 1997 have been
retroactively
restated.
On June 1, 1997, the Company received three subscriptions of
common stock
for a total of 750,000 shares. Among 750,000 shares of common
stock
subscribed, 400,000 shares were subscribed by an officer. As of
June 30,
1997, proceeds from the issuance of 250,000 shares were received.
Subsequent to June 30, 1997, the Company received the $250,000 of
subscription receivable and issued the remaining 500,000 shares of
common
stock subscribed.
BRIDGE TECHNOLOGY, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 7. STOCK OPTION BONUS PLAN
In April, 1997 the Company established an Incentive Stock Option
Plan
(ISOP) to grant a total of one million shares of common stock to
designated employees and executive officers of the Company. The
exercise
price of the option shall not be less than the fair market price
of the
Company's common stock at the date of option granted. Other
detailed
terms of the option plan are subject to the further decisions of
the Board
of Directors of the Company. No options have been granted to
date.
NOTE 8. SUBSEQUENT EVENTS
On September 1, 1997, the Company entered into a letter of intent
to
acquire 100% of equity interest of Newcorp. Ltd., a research and
development corporation organized under the laws of Japan in the
form of
stock swap. The purchase price is estimated at $200,000 and will
be paid
by the issuance of an estimated 400,000 shares of common stock of
the
Company at $0.50 per share. The final purchase price is subject
to the
book value per share of Newcorp. Ltd.'s audited financial
statements as of
September 30, 1997. The acquisition transaction is expected to be
effective in November 1997.
The Company has entered into a consulting services agreement on a
month to
month basis, effective July 1, 1997 with Cottesloe Capital
Corporation for
$3,000 per month. John T. Gauthier, the Company's Treasurer and
CFO, is a
principal of Cottesloe Capital Corporation. John T. Gauthier
agreed to
receive common stock at fair market price as payment in lieu of
cash.
Item 14. Changes in and Disagreements With Accountants on
Accounting and
Financial Disclosure.
The Company has engaged BDO Seidman, LLP, an international
accounting and consulting firm, for its current audit and there
are no
disagreements with the findings of said accounting firm. The
Company's
previous accountants were engaged for the year ended December 31,
1990,
the date of its reporting last audited statements and there were
no
disagreements with the findings.
Item 15. Financial Statements and Exhibits.
a. Financial statements:
Page
- ------
Report of Independent Certified 22
Public Accountants
Consolidated Balance Sheets 23-24
Consolidated Statements of Operations 25
Consolidated Statements of Shareholders' Equity
26
Consolidated Statements of Cash Flows 27-28
Summary of Accounting Policies 29-33
Notes of Consolidated Financial Statements 34-37
b. Exhibit Index:
Exhibit # Description
---------- -------------
Ex-3 1) Articles of Incorporation and by-laws
a) Bridge Technology, Inc.
b) Bridge R&D, Inc. (dba Newcorp Technology)
Ex-4 2) Instruments defining the rights of holders,
including indentures
a) Certificate of Determination of Preference
Ex-10 3) Material Contracts
a) Agreement of Purchase and Sale of Assets
b) Employment Agreement, John J. Harwer
Ex-11 4) Statement Re: Computation of earnings per
share
Ex-21 5) Subsidiaries of the Registrant
a) Newcorp Technology (Newcorp USA)
Ex-99 6) Additional Exhibits
a) Incentive Stock Option Plan
Ex-2 7) Plan of Acquisition, Recognition
a) Newcorp Technology, Ltd., Japan
Ex-27 Financial Data Schedule
PLAN OF ACQUISITION, RECOGNITION
The Company signed a letter of intent on September 1, 1997
to acquire all of the outstanding shares of Newcorp Japan, a
research and development corporation organized under the laws
of Japan. The purchase price is estimated at $200,000 and will
be paid for by the issuance of 400,000 shares of the company's
common stock at $0.50 per share. The final purchase price is
subject to possible adjustment based on the audited book value
of Newcorp Japan as of September 30, 1997. Closing is
expected to occur in November 1997 at which time the Company
plans to the name of its wholly owned subsidiary Bridge R&D,
Inc. to Newcorp Technology (USA).
On December 27, 1997 the Company purchased the name CD
Systems for 5,000 shares of common stock.
AMENDED AND RESTATED ARTICLES OF INCORP0RATION OF
BRIDGE TECHNOLOGY, INC.
The Articles of Incorporation of Bridge Technology, Inc.,
formerly known as Land Acquisition and Nevada Development
Corporation, are amended and restated as follows:
FIRST. NAME OF CORPORATION. The name of the
Corporation is
changed from
LAND ACQUISITION AND NEVADA DEVELOPMENT
CORPORATION
to
BRIDGE TECHNOLOGY, INC.
SECOND. RESIDENT AGENT. The designated agent of the
Corporation upon whom process against it may be served is Louis
Popp, whose street address is the registered office of the
Corporation located at 2004 Weslund Drive, Las Vegas, Nevada
89102.
THIRD. SHARES. The Corporation is authorized to issue two
classes of shares, designated respectively as "Common Stock"
and "Preferred Stock" in the following amounts:
Common Stock: Ten million (10,000,000) shares, $0.01 par
value per share
Preferred Stock: Five hundred (500) shares, $1.00 par
value per share
The Board of Directors ("Board") may divide the Preferred
Stock into any number of series. The Board shall fix the
designation and number of shares of each such series. The
Board may determine and alter the rights, preferences,
privileges and restrictions granted to and imposed upon any
wholly unissued series of the Preferred Stock. The Board
(within the limits and restrictions of any resolution adopted
by it, originally fixing the number of shares of any series)
may increase or decrease the number of shares of any such
series after the issue of shares of that series, but not below
the number of then outstanding shares of such series.
FOURTH. NO PREEMPTIVE RIGHTS. No holder of any of the
shares of any class of the Corporation shall be entitled, as of
right, to subscribe for, purchase, or otherwise acquire any
shares of any class of the Corporation which the Corporation
proposes to grant for the purchase of shares of any class of
the Corporation or for the purchase of any shares, bonds,
securities or obligations of the Corporation which are
convertible into or exchangeable for or which carry any rights
to subscribe for, purchase, or otherwise acquire shares of any
class of the Corporation; and any and all of such shares,
bonds, securities or obligations of the Corporation, whether
now or hereafter authorized or created, may be issued or may be
reissued or transferred if the same have been reacquired and
have treasury status and any all of such rights and options may
be granted by the Board of Directors to such persons, firms,
corporations and associations, and for such lawful
considerations and on such terms as the Board of Directors in
its discretion may determine, without first offering the same,
or any thereof, to any said holder. Without limiting the
generality of the foregoing stated denial of any preemptive
rights, no holder of shares of any class of the Corporation
shall have any preemptive rights.
FIFTH. GOVERNING BOARD. The members of the governing
Board
shall be styled as Directors of the Corporation and the Board
shall consist of three (3) members, and the first Board after
the filing of these Amended and Restated Articles shall be
comprised of the following individuals:
John Harwer
1815 East Carnegie Avenue
Santa Ana, California 92705
John T. Gauthier
10532 Walker Street, Suite B
Cypress, California 90630
Woody Wu
10532 Walker Street, Suite B
Cypress, California 90630
SIXTH. PURPOSE. The purpose or purposes for which the
Corporation is organized are as follows, to wit:
The purpose of the Corporation is to engage in any lawful
act or
activity for which corporations may be organized under the
Business
Corporation Law, provided that the Corporation is not formed to
engage in
any act or activity which requires the consent or approval of
any state
official, department, board, agency or other body.
For the accomplishment of the aforesaid purposes, and in
furtherance
thereof, the Corporation shall have and may exercise all of the
powers
conferred by the Business Corporation Law upon corporations
formed
thereunder in accordance with the provisions of any other
statute of the
State of Nevada.
SEVENTH. DURATION. The Corporation is to have perpetual
existence.
EIGHTH. LIMITED LIABILITY. No Director or Officer of the
Corporation is to be personally liable to the Corporation or
its
stockholders for damages for breach of fiduciary duty as a
Director or
Officer; provided, however, no Director or Officer is to be
eliminated from
or limited from liability for:
A. Acts of omissions which involve intentional misconduct,
fraud or a
knowing violation of law; or
B. The payment of Dividends in violation of Nevada Revised
Statutes
78.300.
NINTH. INDEMNIFICATION. The Corporation is
authorized to indemnify
the directors and officers of the Corporation to the fullest
extent
permissible under Nevada law.
IN WITNESS WHEREOF, this certificate has been subscribed this
21st day of April, 1997, by the undersigned who affirms that
the statements
made herein are true under the penalties of perjury.
John T. Gauthier
--------------------------------
John T. Gauthier, President
}
STATE OF CALIFORNIA }
COUNTY OF ORANGE }
_____________________
On August 12, 1997____________ before |CYNTHIA PRESSEL|
me, Cynthia
Pressel_____________ _ , |Commission #1103464 |
personally appeared John T. Gauthier___ |Notary Public
- -
California| personally known to me (or proved to me on
|Orange County|
the basis of satisfactory evidence) to be the |My Comm.
Expires | person whose name is subscribed to the |Dec. 3,
2000_________|
within instrument and acknowledged to me that he executed the
same in his
authorized capacity, and that by his signatures on the
instrument the
person or the entity upon behalf of which the person acted,
executed the
instrument.
WITNESS my hand and official seal.
Signature Cynthia Pressel_____________
TENTH. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF
RESIDENT
AGENT. I, Louis Popp, hereby accept appointment as Resident
Agent for
the above named corporation.
Date: ________________ _____________________
Louis Popp
THIS FORM SHOULD ACCOMPANY AMENDED AND/OR RESTATED ARTICLES OF
INCORPORATION FOR A NEVADA CORPORATION
1. Name of corporation: LAND ACQUISTION AND NEVADA
DEVELOPMENT CORP.
2. Date of adoption of Amended and/or Restated Articles: April
21, 1997
3. If the articles were amended, please indicate what changes
have been
made:
___________________________________________________
(a) Was there a name change? Yes (x) No ( ).
If yes, what is the new name?
BRIDGE TECHNOLOGY, INC.___________________________
(b) Did you change your resident agent? Yes (x) No ( ).
If yes, please indicate new address:
______________________________________________________
(c) Did you change the purposes? Yes ( ) No (x).
Did you add Banking? ( ), Gaming? ( ), Insurance?
( ),
None of these? ( ).
(d) Did you change the capital stock? Yes (x) No ( ).
If yes, what is the new capital stock?
Added: Preferred Stock, 500 shares authorized ($1.00
par
value)
(e) Did you change the director? Yes (x) No ( ).
If yes, indicate the change:
Added: John T. Gauthier, Woody Wu and John
Harwer_________
Deleted: Louis Popp, Peter Riccio and Theda
Catania___________
(f) Did you add the directors liability provision? Yes (
) No (x).
(g) Did you change the period of existence? Yes ( ) No
(x).
If yes, what is the new existence?
______________________________________________________
(h) If none of the above apply, and you have amended or
modified the
articles, how did you change your articles?
______________________________________________________
_____________________________
|CYNTHIA PRESSEL |
|Commission # 1103464 | John T. Gauthier, President
|Notary Public - California |---------------------------
- -
|Orange County | Name and Title of Officer
|My Comm. Expires Dec. 3, 2000___ |
April 21, 1997
-----------------------------
Date
STATE OF
CALIFORNIA___________
COUNTY OF ORANGE_____________ On August 12,
1997________________
personally appeared before me, a Notary Public, John T.
Gauthier, who
acknowledged that he executed the above document.
Cynthia Pressel
---------------------------
Notary Public
ARTICLES OF INCORPORATION OF LAND ACQUISITION AND NEVADA
DEVELOPMENT
CORPORATION
The undersigned, being a natural person at least
eighteen years
of age, desiring to form a business corporation pursuant to the
Business
Corporation Law of the State of Nevada, does hereby certify and
set forth
as follows:
FIRST: The name of the Corporation is:
LAND ACQUISITION AND NEVADA DEVELOPMENT CORPORATION
SECOND: The purpose or purposes for which the Corporation
is
organized are as follows, to wit:
The purpose of the Corporation is to engage in any lawful
act or
activity for which corporations may be organized under the
Business
Corporation Law, provided that the Corporation is not formed to
engage in
any act or activity which requires the consent or approval of
any state
official, department, board, agency or other body.
For the accomplishment of the aforesaid purposes, and in
furtherance
thereof, the Corporation shall have and may exercise all of the
powers
conferred by the Business Corporation Law upon corporations
formed
thereunder in accordance with the provisions of any other
statute of the
State of Nevada.
Furthermore, the Corporation was originally incorporated
in June 1969
and is now being reorganized following the cancellation of the
February
1991 merger with Falcon Aviation, Inc. wherein Falcon Aviation,
Inc.
relinquished any claim it may have to the former Land
Acquisition and
Nevada Development Corporation.
THIRD: The office of the Corporation is to be located in
the County
of Clark, State of Nevada.
FOURTH: The aggregate number of shares which the
Corporation shall
have the authority to issue is ten million (10,000,000) shares,
$0.01 par
value per share.
FIFTH: No holder of any of the shares of any class of the
Corporation shall be entitled, as of right, to subscribe for,
purchase, or
otherwise acquire any shares of any class of the Corporation
which the
Corporation proposes to grant for the purchase of shares of any
class of
the Corporation or for the purchase of any shares, bonds,
securities or
obligations of the Corporation which are convertible into or
exchangeable
for or which carry any rights to subscribe for, purchase, or
otherwise
acquire shares of any class of the Corporation; and any and all
of such
shares, bonds, securities or obligations of the Corporation,
whether now or
hereafter authorized or created, may be issued or may reissued
or
transferred if the same have been reacquired and have treasury
status and
any and all of such rights and options may be granted by the
Board of
Directors to such persons firms, corporations and associations,
and for
such lawful considerations and on such terms as the Board of
Directors in
its discretion may determine, without first offering the same,
or any
thereof, to any said holder. Without limiting the generality
of the
forgoing stated denial of any and all preemptive rights no
holder of shares
of any class of the Corporation shall have any preemptive
rights.
SIXTH: The members of the governing Board must be styled as
Directors of the Corporation and the first Board of Directors
are to be
three in number, and are as follow:
Louis Popp
2004 Westlund Drive
Las Vegas, Nevada 89102
Peter Riccio
% Towne Pharmacy
2 Washington Avenue
Dunellen, NJ 08812-1252
Theda Catania
231 174th Street
North Palm Beach, FL 33160
SEVENTH: The Capital Stock subscribed to and paid in at
par value
is not subject to assessment to pay debts of the Corporation.
EIGHTH: The Corporation is to have perpetual existence.
NINTH: No Director of Officer of the Corporation is to be
personally liable to the Corporation or its stockholders for
damages for
breach of fiduciary duty as a Director of Officer. However, no
Director or
Officer is to be eliminated from or limited from liability for:
A. act or omissions which involve intentional misconduct, fraud
or a
knowing violation of law, or
B. the payment of Dividends in violation of Nevada Revised
Statutes
78.300.
TENTH: The Secretary of State is designated as agent of
the
Corporation upon whom process against it may be served. The
post office
address to which the Secretary of State shall mail a copy of
any process
against the Corporation served upon him is: c/o Louis Popp;
2004 Westlund
Drive; Las Vegas, Nevada 89102.
ELEVENTH: The name and address of the incorporation is:
Louis Popp
2004 Westlund Drive
Las Vegas, Nevada 89102
IN WITNESS WHEREOF, this certificate has been subscribed
this 6th day
December, 1994, by the undersigned who affirms that the
statements made
herein are true under the penalties of perjury.
Louis Popp Linda Sue Rungan
- ------------------------------ Notary Public
Louis Popp Maricopa County, AZ
2004 Westlund Drive Dec. 6, 1994
Las Vegas, Nevada 89102 My Comm. Expires
April 28, 1995
LAND ACQUISITION & NEVADA DEVELOPMENT CORPORATION
CERTIFICATE OF GOOD STANDING FOR 1997
STATE OF NEVADA - SECRETARY OF STATE File # 19315-94
LAND ACQUISITION AND NEVADA DEVELOPMENT CORP.
DEC 96-97
The Secretary of State of Nevada does hereby certify that
the above
corporation after having paid the annual fee of $85.00 for
filing in this
office a list of its officers and directors and designation of
resident
agent for the above filing period, together with penalty in the
sum of and
having also filed the aforesaid list as required by Nevada
Revised Statutes
Section 78.150-78.165 and 80.110-80.140, is hereby authorized
to transact
and conduct business within this state for the aforesaid
period.
THIS CERTIFICATE BECOMES A Dean Heller
RECEIPT UPON BEING VALIDATED -----------------------
BY THE OFFICE OF SECRETARY OF DEAN HELLER
STATE Secretary of State
ARTICLES OF INCORPORATION OF LAND ACQUISITION AND NEVADA
DEVELOPMENT
CORPORATION
The undersigned, being a natural person at least eighteen
years of
age, desiring to form a business corporation pursuant to the
Business
Corporation Law of the State of Nevada, does hereby certify and
set forth
as follows:
FIRST: The name of the Corporation is:
LAND ACQUISITION AND NEVADA DEVELOPMENT CORPORATION
SECOND: The purpose or purposes for which the
Corporation is
organized are as follows, to wit:
The purpose of the Corporation is to engage in any lawful
act or
activity for which corporations may be organized under the
Business
Corporation Law, provided that the Corporation is not formed to
engage in
any act or activity which requires the consent or approval of
any state
official, department, board, agency or other body.
For the accomplishment of the aforesaid purposes, and in
furtherance
thereof, the Corporation shall have and may exercise all of the
powers
conferred by the Business Corporation Law upon corporations
formed
thereunder, in accordance with the provisions of any other
statute of the
State of Nevada.
THIRD: The office of the Corporation is to be located in
the County
of Clark, State of Nevada. 2004 Westlund Drive, Las Vegas,
Nevada 89102.
FOURTH: The aggregate number of shares which the
Corporation shall
have the authority to issue is ten million (10,000,000) shares,
$0.01 par
value per share.
FIFTH: No holder of any of the shares of any class of the
Corporation shall be entitled, as of right, to subscribe for,
purchase, or
otherwise acquire any shares of any class of the Corporation
which the
Corporation proposes to grant for the purchase of shares of any
class of
the Corporation or for the purchase of any shares, bonds,
securities or
obligations of the Corporation which are convertible into or
exchangeable
for or which carry any rights to subscribe for, purchase, or
otherwise
acquire shares of any class of the Corporation; and any and all
of such
shares, bonds, securities or obligations of the Corporation,
whether now or
hereafter authorized or created, may be issued or may reissued
or
transferred if the same have been reacquired and have treasury
status and
any and all of such rights and options may be granted by the
Board of
Directors to such persons firms, corporations and associations,
and for
such lawful considerations and on such terms as the Board of
Directors in
its discretion may determine, without first offering the same,
or any
thereof, to any said holder. Without limiting the generality
of the
forgoing stated denial of any and all preemptive rights no
holder of shares
of any class of the Corporation shall have any preemptive
rights.
SIXTH: The members of the governing Board must be styled
as
Directors of the Corporation and the first Board of Directors
are to be
three in number, and are as follow:
Louis Popp
2004 Westlund Drive
Las Vegas, Nevada 89102
Peter Riccio
% Towne Pharmacy
2 Washington Avenue
Dunellen, New Jersey 08812
Theda Catania
C.V. Sheffield K253
West Palm Beach, FL 33417
SEVENTH: The Capital Stock subscribed to and paid in at
par value
is not subject to assessment to pay debts of the Corporation.
EIGHTH: The Corporation is to have perpetual existence.
NINTH: No Director of Officer of the Corporation is to be
personally liable to the Corporation or its stockholders for
damages for
breach of fiduciary duty as a Director of Officer. However, no
Director or
Officer is to be eliminated from or limited from liability for:
A. act or omissions which involve intentional misconduct,
fraud or a
knowing violation of law, or
B. the payment of Dividends in violation of Nevada Revised
Statutes
78.300.
TENTH: The Secretary of State is designated as agent of
the
Corporation upon whom process against it may be served. The
post office
address to which the Secretary of State shall mail a copy of
any process
against the Corporation served upon him is: c/o Louis Popp;
2004 Westlund
Drive; Las Vegas, Nevada 89102.
IN WITNESS WHEREOF, this certificate has been subscribed
this 17th
day October, 1990, by the undersigned who affirms that the
statements made
herein are true under the penalties of perjury.
Louis Popp Carol Lynne Carlos
- ------------------------------ Notary Public
Louis Popp Maricopa County, AZ
2004 Westlund Drive Oct. 17, 1990
Las Vegas, Nevada 89102 My Comm. Expires
Feb. 26, 1994
STATE OF NEVADA SECRETARY OF STATE
CERTIFICATE OF ACCEPTANCE OF APPOINTMENT
BY RESIDENT AGENT
IN THE MATTER OF Land Acquisition and Nevada
Development
Corporation (Name of Corporation) I, Louis Popp (Name of
Resident
Agent), with address at Street 2004 Westlund Drive , Town of
Las Vegas -
89102 , County of Clark , State of Nevada, hereby accept the
appointment
as Resident Agent of the above-entitled corporation in
accordance with NRS
78.090.
FURTHERMORE, that the principal office in this state
is located
at Street 2004 Westlund Drive, Town of Las Vegas, County of
Clark, State
of Nevada.
IN WITNESS WHEREOF, I have hereunto set my hand this
17th day
of October, 1990.
Carol Lynne Carlos Louis Popp
Notayy Public ---------------------------
Maricopa County, AZ Resident Agent
Oct. 17, 1990
My Comm. Expires
Feb. 26, 1994
====================================================
NRS 78.090 Except during any period of vacancy described
in NRS
78.097, every corporation shall have a resident agent, who may
be either a
natural person or a corporation, resident or located in this
state, in
charge of its principal office. The resident agent may be any
bank or
banking corporation, or other corporation, located and doing
business in
this state .... The certificate of acceptance must be filed at
the time of
the initial filing of the corporate papers.
SIXTY DAY LIST OF OFFICERS, DIRECTORS AND AGENT OF
LAND ACQUISITION AND NEVADA DEVELOPMENT CORP.
FILE # 10127-90 FOR THE FILING PERIOD 11-90 TO 11-91
The Corporation's duly appointed Resident Agent in charge of
said principal
office in the State of Nevada upon whom process can be served
is:
____ ______
| |
| LOUIS POPP Resident Agency & Principal |
2004 WESTLUND DRIVE Place of Business - Do not
LAS VEGAS, NV 89102 change information in this
area before reading #5 below.
| |
|____ ______|
_________________________________
| |
| FOR OFFICE USE ONLY |
| FILED (DATE) NOV 16, 1990 |
| 90-91 PAID $50.00 |
|__________________________________|
We want to help you get your business with our office completed
in the
fastest, most efficient manner. TO AVOID DELAYS, RETURNS AND
LATE CHARGES,
PLEASE BE SURE YOU HAVE:
1. Names and mailing addresses for all officers and directors.
- - A
President, Secretary & Treasurer must be named.
2. An officer's signature at the bottom of this form.
3. Returned ALL COPIES of this form with the $50.00 filing
fee. A
$15.00 penalty must be added if this form isn't filed within 60
days from
the date of incorporation.
4. Make your check payable to the Secretary of State. -
If you need a
receipt, enclose a self-addressed, stamped envelope.
5. If you have changed the resident agent or principal
place of
business, please contact our office for the proper forms to
make the change
before filing this 60-day list.
FILING FEE: $50 LATE PENALTY: $15
THIS FORM MUST BE FILED 60 DAYS FROM THE DATE OF
INCORPORATION
_______________________________________________________________
__
___________________
| NAME: Louis Popp TITLE(S): President
|
|
|
| P.O. BOX: 2004 Westlund Dr. ST. ADDRESS: CITY: Las
Vegas
ST: NV ZIP: 89102 |
|______________________________________________________________
__
___________________ |
| NAME: Peter Riccio TITLE(S): Secretary
|
|
|
| P.O. BOX: 2 Washington ST. ADDRESS: CITY:
Dunnellen ST:
NJ ZIP: 08812 |
|______________________________________________________________
__
___________________ |
| NAME: Peter Riccio TITLE(S): Treasurer
|
|
|
| P.O. BOX: 2 Washington ST. ADDRESS: CITY:
Dunnellen ST:
NJ ZIP: 08812 |
|______________________________________________________________
__
___________________ |
| NAME: Louis Popp TITLE(S): Director
|
|
|
| P.O. BOX: 2004 Westlund Dr. ST. ADDRESS: CITY: Las
Vegas ST:
NV ZIP: 89102 |
|______________________________________________________________
__
___________________ |
| NAME: Peter Riccio TITLE(S): Director
|
|
|
| P.O. BOX: 2 Washington ST. ADDRESS: CITY:
Dunnellen ST:
NJ ZIP: 08812 |
|______________________________________________________________
__
___________________ |
| NAME: Theda Catania TITLE(S): Director
|
|
|
| P.O. BOX: C.V. Sheffield K253 ST. ADDRESS: CITY: W. Palm
Beach ST: FL ZIP: 33417 |
|______________________________________________________________
__
___________________ |
Louis Popp President/Director
11/13/90
------------------------ -----------------------
- --
- - ---------------
Signature of officer Title(s) Date
ARTICLES OF INCORPORATION OF BRIDGE R&D, INC.
FIRST: The name of the corporation is:
Bridge R&D, Inc.
SECOND: The purpose of this corporation is to engage in
any lawful
act or activity for which a corporation may be organized under
the General
Corporation Law of California other than the banking business,
the trust
company business, or the practice of a profession permitted to
be
incorporated by the California Corporation Code.
THIRD: The name and address in this state of this
corporation's
initial agent for service of process is:
Mr. John Harwer
10532 Walker Street, Suite B
Cypress, California 90630
FOURTH: This corporation is authorized to issue only one
class of
shares, and the total authorized number of such shares which
may be issued
is one million (1,000,000) shares.
FIFTH: The liability of the directors of the corporation
for
monetary damages shall be eliminated to the fullest extent
permissible
under California law.
SIXTH: The corporation is authorized to indemnify the
directors and
officers of the corporation to the fullest extent permissible
under
California law.
Andrew Leitch
Date: June 25, 1997 ----------------------------
- --
- ---
Andrew V. Leitch, Esq.
Incorporator
AGREEMENT OF PURCHASE
AND SALE OF ASSETS
THIS AGREEMENT OF PURCHASE AND SALE OF ASSETS ("Agreement") is
entered
into this lst day of June, 1997 by and between ALLIED WEB, INC., a
California corporation ("SELLER") and BRIDGE R&D,INC., a
California
corporation ("BUYER"), with reference to the following facts:
RECITALS
A. SELLER is the owner of those certain assets ("Assets') set
forth on
Exhibit "A", attached hereto and incorporated herein by this
reference.
B. BUYER desires to purchase the Assets from SELLER, and SELLER
desires to
sell the Assets to BUYER.
NOW, THEREFORE, in consideration of the above-recited facts, for
other
good and valuable consideration and the mutual promises,
covenants,
representations, warranties, agreements, indemnities and
provisions
contained herein, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 SALE. SELLER agrees to sell and BUYER agrees to buy SELLER's
interests
in the Assets.
1.2 PURCHASE PRICE. The purchase price for the Assets("Purchase
Price")
shall be One Hundred & Ninety One Thousand Six Hundred and. Forty
Dollars
($191,640,00), payable in cash or cash equivalent at the
"Closing," as
hereinafter defined.
ARTICLE 2
CLOSING
2.1 CLOSING DATE. The closing ("Closing") shall take place at
10:00 a.m.
on June 19, 1997 (the "Closing Date") at such place as the parties
agree.
2.2 DELIVERIES BY SELLER. At the Close of Escrow, SELLER shall
deliver to
BUYER a Bill of Sale for the SELLER's interest in all of the
Assets,
substantially in the form attached hereto as Exhibit "B" and
incorporated
herein by this reference.
2.3 DELIVERIES BY BUYER. At the Close of Escrow, BUYER shall
deliver to
SELLER the following:
(a) The Purchase Price in cash or cash equivalent; and
(b) All other documents required to consummate the transactions
contemplated herein.
ARTICLE 3
REPRESENTATIONS AND WARRENTIES OF SELLER
SELLER hereby represents and warrants to BUYER as follows:
3.1 ORGANIZATION AND RELATED MATTERS. SELLER is a California
corporation,
duly organized, validly existing and in good standing under the
laws of
the State of California. SELLER has the corporate power and
authority to
carry on the business as now being conducted, and the corporate
power and
authority to execute and deliver this Agreement and consummate the
transactions contemplated hereby and has taken all actions
necessary to
secure all approvals required in connection therewith.
3.2 AUTHORITY. SELLER has fall power and the capacity and
authority to
execute and deliver this Agreement and to consummate the
transactions
contemplated hereby. This Agreement has been duly authorized,
executed
and delivered by, and is a valid and binding agreement of, SELLER,
enforceable in accordance with its terms; and no further action,
approvals
or consents are necessary on the part of the SELLER; nor is it
necessary
for SELLER to obtain any actions, approvals or consents from any
third
persons, governmental or other, to make this Agreement valid and
binding
upon and enforceable against SELLER in accordance with its terms,
or to
enable SELLER to perform this Agreement and the transactions
contemplated
hereby.
3.3 TITLE AND QUIET ENJOYMENT. SELLER has good and marketable
title to
all of the Assets. All the Assets are free and clear of
restrictions on
or conditions to transfer or assignment, and are free and clear of
all
defects of title, mortgages, liens, pledges, leases, charges,
encumbrances, equities, claims, conditional sale contracts,
easements,
rights of way, security interests, covenants, conditions, or
restrictions.
3.4 DISCLOSURE. There is no fact known to SELLER which has not
been
disclosed to BUYER in writing with respect to the business,
assets,
liabilities, financial condition or performance of SELLER, which
could
reasonably be anticipated to have a material adverse affect upon
the
existing or expected financial condition, operations, sales, gross
margins, operating results, assets, customer relations, employee
relations
or business prospects of SELLER.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
BUYER represents and warrants to the SELLER as follows:
4.1 ORGANIZATION AND RELATED MATTERS. BUYER is a California
corporation,
duty organized, validly existing and in good standing under the
laws of
the State of California. BUYER has the corporate power and
authority to
carry on the business as now being conducted, and the corporate
power and
authority to execute and deliver this Agreement. and consummate
the
transactions contemplated hereby and has taken all actions
necessary to
secure all approvals required in connection therewith.
4.2 DUE AUTHORIZATION. The execution and delivery of this
Agreement and
the consummation of the transactions required of BUYER under this
Agreement have been duly authorized by BUYER; no further
authorization on
the part of BUYER is necessary therefor, and this Agreement
represents a
valid agreement of BUYER which is binding on and enforceable
against BUYER
in accordance with its terms.
ARTICLE 5
OBLIGATIONS PENDING AND FOLLOWING THE CLOSING
5.1 CONSENTS/LITIGATION. Each party shall use its best efforts:
(a) to
obtain or cause to be obtained at the earliest practicable date
and prior
to the Closing Date all consents, approvals, permits and licenses
necessary to permit such party to consummate the transactions
contemplated
hereby which can reasonably be obtained by the Closing Date; and
(b) to
resist and obtain the dismissal of any litigation, investigation
or other
proceeding which questions the validity or legality or seeks to
hinder or
prevent the consummation of the transactions contemplated hereby.
5.2 NOTICE OF BREACH. Each party to this Agreement will
immediately give
written notice to the other parties of the occurrence of any
event, or the
failure of any event to occur, that results in a breach by it of
any
representation or warranty or a failure by it to comply with or
fulfill
any covenant, condition or agreement contained herein.
5.3 OTHER OFFERS. SELLER shall not solicit, consider, entertain,
accept
or take any other affirmative or favorable action with respect to
any
offer or proposal involving: (a) a sale of any of the Assets;(b)
any
merger, consolidation or other reorganization of SELLER with or
into any
other entity; or (c) any other transaction which would prevent or
hinder
the consummation of the transactions contemplated herein.
5.4 FURTHER ASSURANCES. Each party hereto shall execute and
deliver such
instruments and take such other actions as the other party or
parties, as
the case may be, may reasonably require in order to carry out the
intent
of this Agreement.
5.5 BEST EFFORTS. BUYER and SELLER will use their best efforts to
perform
or cause to be satisfied each covenant or condition contained
herein to be
performed or satisfied by it.
ARTICLE 6
NATURE AND SURVIVAL OF COVENANTS,
REPRESENTATION AND WARRANTIES
All of the covenants, representations and warranties set forth in
this
Agreement or in any exhibits, schedules or documents, certificates
or
other instruments delivered pursuant hereto shall, unless waived
in
writing by the party or parties for whose benefit such covenant,
representation or warranty was made, remain in full force and
effect
regardless of any investigation, verification or approval by any
party
hereto or by anyone on behalf of any party hereto, and all such
covenants,
representations and warranties shall survive the Closing.
ARTICLE 7
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligations of BUYER to consummate the transactions
contemplated by
this Agreement shall be subject to the satisfaction, at or before
the
Closing, of each of the following conditions, each of which shall
be
deemed independent, waivable and waivable in writing in whole or
in part
at the option of the BUYER.
7.1 ACCURACY OF REPRESENTATINS AND WARRANTIES.
All representations and warranties made by SELLER, whether
contained
herein or in the schedules or the exhibits hereto, or in any
certificates
or other documents or instruments delivered by SELLER to BUYER
pursuant
hereto or in connection with the transactions contemplated hereby,
shall
be true and accurate in all material respects as of the date when
made and
on and as of the Closing Date as though made at that time.
7.2 PERFORMANCE. SELLER shall, in all material respects, have
performed,
satisfied and complied with all covenants, agreements, obligations
and
conditions and all actions required by this Agreement to be
performed
taken or complied with by any or all of them, on or before the
Closing
Date.
7.3 RECEIPT OF DOCUMENTS. At the Closing, BUYER shall have
received an
executed Bill of Sale from SELLER in the form attached hereto as
Exhibit
"B."
7.4 CONSENTS. All necessary consents and approvals from any
persons,
governmental or other, required to be obtained by the BUYER or
SELLER to
consummation of the transactions contemplated by this Agreement,
or
otherwise pertaining to the matters covered by it shall have been
obtained.
ARTICLE 8
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligations of the SELLER to consummate the transactions
contemplated
by this Agreement shall be subject to the satisfaction, as of or
before
the Closing, of each of the following conditions, each of which
shall be
deemed independent severable and waivable in writing in whole or
in part
by SELLER:
8.1 REPRESENTATIONS AND WARRANTIES. The representations and
Warranties
antics of BUYER contained herein shall be true and accurate in all
material respects as of the date when made and at and as of the
Closing
Date as though such representations arid warranties were also made
at and
as of the Closing Date.
8.2 PERFORMANCE. BUYER shall have performed, satisfied and
complied with,
in all material respects, all agreements, obligations and
conditions
required by this Agreement to be performed or complied with by it
on prior
to the Closing.
ARTICLE 9
SELLER'S INDEMNIFICATION
9.1 INDEMNIFICATION. SELLER agrees to indemnify and hold BUYER
harmless
from and against any and all damages, liabilities, losses, costs
and
expenses, including attorneys' fees ("Damages") sustained by BUYER
as a
result of or arising out of: (a) a breach of any representation or
warranty by SELLER in this Agreement, or a breach or default in
the
performance of any of the covenants of SELLER in this
Agreement; or
(b) any pending or threatened claims or litigation. For purposes
of this
Section, any damages, liabilities, losses, costs and expenses,
including
attorneys' fees, sustained by SELLER after the Closing Date with
respect
to (a) or (b) above shall be deemed to be sustained by BUYER.
9.2 INDEMNIFICATION PROCEDURE. With respect to claims or actions
by third
parties, SELLER agrees that it shall be liable to reimburse BUYER
on
demand and on proof for any Damages suffered by BUYER, based upon
the
judgment of any court of competent jurisdiction or pursuant to a
bona fide
compromise or settlement of claims, demands, or actions, in
respect of any
Damages to which the foregoing indemnities relate. SELLER agrees
that it
shall be jointly and severally liable under the foregoing
indemnity as
soon as the amount of such Damages has reasonably been determined.
ARTICLE 10
EXPENSES AND BROKER'S FEES
10.1 EXPENSES. Except for expenses which are the subject of
indemnification pursuant to Article 10, above, each of the parties
shall
pay all costs and expenses incurred or to be incurred by it in
negotiating
and preparing this Agreement and in closing and carrying out the
transactions contemplated by this Agreement.
10.2 BROKER'S FEES. SELLER and BUYER each agree to indemnify and
hold
harmless the other against any loss, liability, damage, cost,
claim or
expense incurred by reason of any brokerage, commission or
finder's fee
alleged to be payable because of any act, omission or statement of
the
indemnifying party.
ARTICLE 11
NOTICES AND DELIVERIES
All notices, requests, demands or other communications hereunder
shall be
in writing and shall be deemed to have been duly given, and all
deliveries
shall be deemed to have been duly made, if delivered in person or
mailed,
certified, return receipt requested, postage prepaid:
If to SELLER: Allied Web, Inc.
1796l Skypark Circle, #G
Irvine, California 92714
With a copy to: Keith Rosenbaum, Esq.
Rosenbaum & Deihl
8001 Irvine Center Drive, Suite 1500
Irvine, California 92718
If to BUYER: John Harwer
Bridge R&D, Inc.
10532 Walker Street, Suite 3
Cypress, California 90630
With a copy to: Jackson, DeMarco & Peckenpaugh
4 Park Plaza, 16th Floor
Irvine, California 92623
Attention: Roger Alan Grad
Any party hereto may from time to time, by written notice to the
other
parties, designate a different address, which shall be substituted
for the
one specified above for such party. If any notice or other
document is
sent by certified mail, return receipt requested, postage prepaid
as
aforementioned, the same shall be deemed served or delivered
seventy-two
(72) hours after mailing thereof.
ARTICLE 12
MISCELLANEOUS
12.1 COSTS AND ATTORNEY'S FEES.
(a) In any action, arbitration proceeding or other litigation
("Litigation") between the par-ties to declare the rights granted
in this
agreement or to enforce the provisions of this agreement, the
party
prevailing in the Litigation, whether at trial or on appeal, shall
be
entitled to its costs and expenses of suit, including, without
limitation,
a reasonable sum as and for attorneys' fees incurred in such
Litigation.
The term "prevailing party" as used in this paragraph shall not be
limited
to a prevailing plaintiff, but shall also include, without
limitation, any
party who is made a defendant in Litigation in which damages or
other
relief or both may be sought against such party and a final
'judgment on
dismissal or decree is entered in such Litigation in favor of such
party
defendant.
(b) Attorneys' fees incurred in enforcing any 'judgment
rendered in
connection with the interpretation or enforcement of this
agreement
("Judgment") are recoverable by the party in whose favor such
Judgment is
rendered, as a separate item of damages. The provisions of this
paragraph
are severable from the other provisions of this agreement and
shall
survive any such Judgment, and the provisions of this paragraph
shall not
be deemed merged into any such Judgment.
12.2 PARTIES IN INTEREST. Nothing in this Agreement, whether
express or
implied, is intended to confer any rights or remedies under or by
reason
of this Agreement on any person other than the parties to it, nor
is
anything in this Agreement intended to relieve or discharge the
obligation
or liability of any third person to any party to this Agreement,
nor
shal.1 any provision give any third persons any right of
subrogation or
action over against any party to Counterparts Agreement.
12.3 COUNTERPARTS. This Agreement may be executed in any number
of
counterparts, each of which shall be deemed to be an original and
all o-l-
which together shall be deemed to be one and the same instrument.
However,
this Agreement shall be ineffective for any purposes whatsoever
unless and
until executed by all parties hereto.
12.4 ASSIGNMENT. This Agreement and all of the provisions hereof
shall be
binding upon and inure to the benefit of the parties hereto and
their
respective successors and assigns.
12.5 ENTIRE AGREEMENT. This Agreement, including the exhibits and
other
documents referred to herein which form a part hereof, embodies
the
entire agreement and understanding of the parties hereto in
respect to the
subject matter contained herein. There are no restrictions,
promises,
warranties, covenants, or undertakings, other than those expressly
set
forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to
such
subject matter.
12.6 HEADINGS. The subject headings of the paragraphs and
subparagraphs
of this Agreement are included for purposes of convenience only
and shall
not affect the construction or interpretation of an of its
provisions.
12.7 PRONOUNS AND ARTICLES. All pronouns and articles and any
variations
thereof shall be deemed to refer to the masculine, feminine,
neuter,
singular or plural as the identification of the person or persons,
firm or
firms, corporation or corporations, partnership or partnerships
may
require.
12.8 MODIFICATION. This Agreement shall not be amended or
modified except
by a writing signed by all of the parties hereto.
12.9 GOVERNING LAW. This Agreement shall be governed by and
construed
under the internal laws of the State of California.
12.10 EXECUTION OF ADDITIONAL DOCUMENTS.
BUYER and SELLER each agree to execute and deliver such additional
documents as may be reasonably required to effectuate the
transactions
contemplated by this Agreement, including, without limitation, the
execution of a Fictitious Business Name Statement and such other
documents
as may be required to transfer the right to use the name
"DataStor" to
BUYER.
IN WITNESS WHEREOF, the parties to this Agreement have duly
executed
it on the day and year first above written.
"BUYER"
BRIDGE R&D, INC.
a California corporation
By: John Harwer
----------------------
John Harwer, President
"SELLER"
ALLIED WEB, INC.
a California corporation
By : Denise Lafone
-------------------------
Its: Financial Controller
-------------------------
EXHIBIT A-1
BRIDGE R&D
FIXED ASSETS
Net Resi- Net 5 months Book
dual Book Depre. Value Econ. June
Value as of Useful 97's of
Date monthly 1995 1996 5/31/97 6/1/97 Life
Depre.
6/30/97
- ------ ----------- ---------- ------- -------- -------- -----
- ----
COMPUTER:
486/50M Multimedia w/monitor 1/3/95
1 1,500.00 84 17.86 214.29 214.29 89.29 982.14 55 17.86
964.29
Mac TLC & monitor 1/3/95
1 300.00 84 3.57 42.86 42.86 17.86 196.43 55 3.57
192.86
Used computer 1/3/95
3 975.00 84 11.61 139.29 139.29 58.04 638.39 55 11.61
626.79
Apple printer 4/6/95
1 646.50 84 7.70 92.36 92.36 38.48 55 423.30 7.70
415.61
386/40 computer 6/1/96
3 2,400.00 84 28.57 200.00 142.86 2,057.14 72 28.57
2,028.57
486/156 computer 6/1/96
2 2,000.00 84 23.81 166.67 119.05 1,714.29 72 23.81
1,690.48
Panasonic 2165 printer 8/1/96
1 255.00 84 3.04 15.18 15.18 224.64 74 3.04
221.61
Fujitsu DL3400 printer 8/1/96
3 2,385.00 84 28.39 141.96 141.96 2,101.07 74 28.39
2,072.68
Hewfett:Packard printer 8/1/96
4 7,960.00 84 94.76 473.81 473.81 7,012.38 74 94.76
6,917.62
Qume scripten 8/1/96
1 3,990.00 84 47.50 237.50 237.50 3,515.00 74 47.50
3,467.50
486/166 computer, 1.2MB 8/1/96
6 17,880.00 84 212.86 1,064.29 1,064.29 15,751.43 74 212.86
15,538.57
Pentium notebook 11/1/96
2 8,600.00 84 102.38 204.76 511.90 7,883.34 77 102.38
7,780.95
Laser Jet Printer 12/31/96
1 1,845.00 84 21.96 21.96 109.82 1,713.22 78 21.96
1,691.25
Acttx notebook computer 4/1/97
1 3,172.57 84 37.77 - 75.54 3,097.03 82 37.77
3,059.26
SUBTOTAL
53,909.07 641.77 488.79 3,014.91 3,095.57 47,309.81 641.77
46,668.03
FURNITURE & FIXTURE:
Brother fax machine 1/3/95
1 969.74 84 11.54 138.53 138.53 57.72 634.95 55 11.54
623.40
Conference table 1/3/95
1 300.00 84 3.57 42.86 42.86 17.86 196.43 55 3.57
192.86
Desk w/return,file & bookcase 1/3/95
1 860.00 84 10.24 122.86 122.86 51.19 563.10 55 10.24
552.86
Mac classic 1/3/95
2 400.00 84 4.76 57.14
57.14 23.81 261.90 55 4.76 257.14
Paper shreader 1/3/95
1 50.00 84 0.60 7.14 7.14 2.98 32.74 55 0.60 32.14
Canon fax machine 3/1/95
1 2,600.00 84 30.95 309.50
371.43 154.76 1,764.31 57 30.95 1,733.36
Phone system 5/1/95
1 13,150.32 84 156.55 1,252.40
1,878.62 782.76 9,236.55 59 156.55 9,079.99
Security system 5/1/95
1 2,405.00 84 28.63 229.04 343.57 143.15 1,689.23 59 28.63
1,660.60
Canon copier 7/1/95
1 3,898.68 84 46.41 278.46 556.95 232.06 2,831.20 61 46.41
2,784.79
Canon BJ-70 fax 8/1/96
1 799.00 84 9.51 47.56 47.56 703.88 74 9.51
694.37
IBM Selectric II 8/1/96
2 1,598.00 84 19.02 95.12 95.12 1,407.76 74 19.02 1,388.74
IBM Wheelwriter 15 8/1/96
1 1,270.00 84 15.12 75.60 75.60 1,118.81 74 15.12 1,103.69
AT&T fax machine
8/1/96 1 2,200.00 84 26.19 130.95 130.95 1,938.10 74 26.19
1,911.90
SUBTOTAL
30,500.74 363.10 2,437.93 3,868.33 1,815.52 22,378.95 363.11
22,015.85
VECHICLE:
1996 Mazda Truck 10/1/96
13,535.00 60 225.58 676.74 1,127.92 11,730.34 52 1225.58
11,504.76
GRANDTOTAL
97,944.81 1,230.46 2,926.72 7,559.98 6,039.00 81,419.10 1,230.46
80,188.64
========= ======== ======== ======== ======== ========= ========
=========
EXHIBIT A-2
BRIDGE R&D
INTANGIBLE ASSETS
Trademark $7,800.00
EXHIBIT B
BRIDGE R&D, INC.
BEGINNING INVENTORY ROLLBACK LIST
JUNE 30, 1997
BEG. INVENT. REPLACE BEG. INVENT. SLOW
ADJUSTED
AS 6/1/97 COST EXT. COST MOVING
BEG. INV.
QUANTITY PER UNIT AS 6/1/97 WRITEOFF
AS 6/1/97
------------ -------- ------------ -------- -
- --------
22040 26 2.15 55.90 55.90
- -
73020 22 1.70 37.40
37.40
73021 20 1.70 34.00 34.00
- -
73023 33 1.70 56.10
56.10
73024 20 0.56 11.12 11.12
0.00
73025 300 0.51 153.00
153.00
73026 56 0.38 21.28
21.28
73028 486 0.41 199.26
199.26
80112 8 3.70 29.60 29.60
- -
80113 2 5.50 11.00 11.00
- -
80114 67 12.26 821.42 821.42
- -
81102 193 6.00 1,158.00 1,158.00
- -
81111 1 2.19 2.19 2.19
- -
81114 9 9.30 83.70 83.70
- -
81118 16 6.22 99.52 99.52
- -
81130 5 10.00 50.00 50.00
- -
81132 57 8.40 478.80
478.80
81508 10 0.40 4.00 4.00
- -
82001 89 2.00 178.00 178.00
- -
82002 116 2.00 232.00 232.00
- -
82004 226 0.50 113.00 113.00
- -
82006 100 0.51 51.00 51.00
- -
82008 1,078 0.51 549.78
549.78
82012 404 0.50 202.00
202.00
82013 76 5.00 380.00
380.00
82014 17 8.00 136.00
136.00
84007 490 27.54 13,494.60
13,494.60
84008 3 70.38 211.14
211.14
89001 250 0.30 75.00
75.00
89011 264 1.83 483.38
483.38
89012 20 28.00 560.00
560.00
89013 62 21.50 1,333.00
1,333.00
89047 52 46.00 2,392.00
2,392.00
100561 6 23.00 138.00
138.00
104434 1,185 2.25 2,666.25
2,666.25
104437 1,153 0.75 864.75
864.75
202100 39 53.00 2,067.00
2,067.00
203335 177 53.00 9,381.00
9,381.00
205500 149 53.00 7,897.00
7,897.00
207555 65 82.00 5,330.00
5,330.00
209400 64 93.00 5,952.00
5,952.00
307100 48 82.00 3,936.00
3,936.00
309200 48 158.00 7,584.00
7,584.00
604222 3 19.38 58.14
58.14
CN3310CX 177 68.00 12,036.00
12,036.00
CQ3501 283 2.25 636.75
636.75
DS40001 0 1,400.00 -
- -
DS5000-ITR 4 21.00 84.00
84.00
DS5000-FN 9 13.00 117.00
117.00
DS5000-PS 4 70.00 280.00
280.00
DS50001 6 2,000.00 12,000.00
12,000.00
EC12102 3 35.50 106.50
106.50
EC45015 34 29.00 986.00
986.00
E023105 91 51.10 4,650.10
4,650.10
ITR210X 91 17.45 1,587.95 1,587.95
- -
M81310X 0 4.90 -
- -
M84310X 159 5.00 795.00
795.00
M8S301X 23 24.96 574.08 574.08
- -
M8S501X 13 22.61 293.93
293.93
M9F510X 10 5.97 59.70
59.70
M9H501X -1 4.75 (4.75)
(4.75)
M9S501X 7 21.00 147.00
147.00
MCL301X 20 5.70 114.00
114.00
MCX310X 70 4.50 315.00
315.00
MDD301X 5 9.00 45.00
45.00
MJZ310X 67 15.93 1,067.31
1,067.31
MLC301X 12 5.75 69.00
69.00
MSE310X 95 9.04 858.80
858.80
MV5310X 27 6.70 180.90
180.90
MV5510X 10 12.95 129.50
129.50
SBA-03258 40 8.00 320.00
320.00
UFG301X 58 2.25 130.50
130.50
UFP301X 163 2.25 366.75
366.75
107,517.35 5,096.48
102,420.87
Executive Employment Agreement
This Employment Agreement ("Agreement") is dated as of June
1, 1997,
between Bridge Technology, Inc., a Nevada corporation (the
"Company"), and
John J. Harwer (the "Executive").
WITNESSETH:
WHEREAS, Company is in the business of acquiring and
managing
technology companies.
WHEREAS, Executive has experience which qualifies him to
perform the
services which Company requires, and is not restricted under any
agreements, written or oral, from rendering the services to and
for the
benefit of Company as contemplated by this Agreement.
WHEREAS, Company and Executive (collectively, the
"Parties") desire
by this Agreement to provide the terms and conditions of the
employment
and the benefits to be provided by Company to Executive.
WHEREAS, the Company determined that the Executive is a
valued
employee of the Company and wishes to ensure his continued
employment with
the Company and document the terms of the Executive's employment
by the
Company.
WHEREAS, the Company also has determined that it is in the
best
interests of the Company and its shareholders to reinforce and
encourage
the continued attention and dedication of certain key members of
the
Company's management, including the Executive, to their assigned
duties
without distraction by uncertain circumstances arising from the
possibility of a change in control of the Company.
WHEREAS, the Company also has determined that it is in the
best
interest of the Company and its shareholders to minimize the
personal
considerations of certain key members of management in their
evaluation of
any potential change in control of the Company.
WHEREAS, the Company has determined that the loss of the
Executive's services would have a detrimental effect on the
implementation
of a change in control of the Company (in the event the Company
determines
to effect such a change in control of the Company).
NOW THEREFORE, for and in consideration of the mutual
promises,
covenants and agreements contained herein, the parties hereto
agree as
follows:
ARTICLE I
EMPLOYMENT
1.1 Employment. The Company employs the Executive and the
Executive hereby
accepts employment as the Chief Executive Officer of the Company
upon the
terms and conditions hereinafter set forth.
1.2 Term. The employment of the Executive by the Company under the
terms
and conditions of this Agreement will commence on the date hereof
and
continue for a period of five (5) years ("Employment Term").
Commencing on
the date of execution of this contract the Employment Term shall
be
extended on a daily basis such that the remaining term shall at
all times
be five (5) full years.
1.3 Executive Duties. As the Company's Chief Executive Officer,
the
Executive shall perform such duties as are requested by and shall
report
directly to the Company's Board of Directors. The Executive agrees
to
devote his full business time (with allowances for vacations and
sick
leave) and attention and best efforts to the affairs of the
Company and
its subsidiaries and affiliates during the Employment Term.
ARTICLE II
COMPENSATION AND BENEFITS
2.1 Annual Salary. During the Employment Term, Company shall pay
to
Executive a base salary of not less than Two Hundred Thousand
Dollars
($200,000.00) per annum during the first year of this Agreement
and shall
increase by ten percent (10%) of the amount paid in the prior year
on each
anniversary date thereafter. This base salary ("Base Salary")
shall be
deemed to accrue from day to day but it shall be payable in
substantially
equal semi-monthly installments in accordance with regular payroll
practices adopted by BRIDGE from time to time. The Company will
review
annually and may, in the discretion of the Board of Directors,
increase
such base salary in light of the Executive's performance,
inflation in
cost of living or other factors. The Company also shall pay to the
Executive an annual incentive compensation bonus to be calculated
and paid
as set forth in Exhibit A. For purposes of this Agreement, the
Executive's
annual base salary and annual incentive compensation bonus
collectively
shall be referred to herein as his "Annual Salary".
2.2 Common Stock in Lieu of Salary. Executive will have the right
of
receiving each year up to fifty percent (50%) of his total annual
compensation in the form of Company's common stock at a fair
market price.
The fair market price shall be the price of common stock on the
first day
of the last month of each calendar quarter, and Executive shall
have the
right to purchase such stock on that date of each calendar quarter
for
that quarter.
2.3 Benefits. In addition to compensation Executive shall be
eligible for
participation in and covered by any and all such performance,
bonus,
profit sharing, incentive, stock option, stock warrants and other
compensation plans and such medical, dental, disability, life, and
other
insurance plans and such other benefits generally available to
other
employees of the Company in similar employment positions, on the
same
terms as such employees, subject to meeting applicable eligibility
requirements (collectively referred to herein as the "Company
Benefit
Plans"). Specifically Company shall also furnish the following
benefits to
Executive:
(a) Fringe Benefits. Executive and his wife and dependents shall
receive health insurance, including both medical and dental
coverage
("Health Insurance") from Company in amounts to be determined by
the
Board. Executive shall have the option, however, of receiving, in
lieu of
the Health Insurance, an amount of cash ("Alternative Health
Insurance
Compensation") or stock at fair market price equal to Company's
cost of
providing the Health Insurance. Executive shall also be entitled
to
receive any other fringe benefits which are customarily afforded
to other
employees of BRIDGE, including, but not limited to, the right to
participate in any tax-qualified pension or profit-sharing plan
which may
be adopted and/or maintained by Company; provided, however,
Company is
under no obligation to adopt or maintain any such pension or
profit
sharing plans or other fringe benefits, now or at any time in the
future.
(b) Stock Options. Company hereby grants to Executive an option
("Stock
Option") to purchase: (a) up to One Hundred Thousand (100,000.00)
shares
of Company common stock ("BT Stock") and (b) up to that number of
shares
of BT Stock equal to the Alternative Health
Insurance Compensation, if any, divided by one-half, all at an
exercise
price of fifty cents ($.50) per share, which is the current fair
market
value of the BT Stock. The Stock Option shall terminate one (1)
year
after the termination of Executive's employment under this
Agreement.
Executive must represent that he is acquiring the BT Stock for
investment
purposes. Company agrees to take all steps necessary to assure
that the
issuance of the BT Stock upon the exercise of the Stock Option
shall be
treated as a transaction exempt from the registration requirements
under
applicable federal and state securities laws. In order to
effectuate this
Stock Option exercise, Executive must deliver a written notice to
Company
of his intention to exercise the Stock Option ten (10) days prior
to such
exercise accompanied by full payment of the Stock Option exercise
price.
The instruments evidencing the BT Stock shall carry a restrictive
legend
indicating that the BT Stock has not been registered under
applicable
federal and state securities laws and must not be transferred
without
compliance with said registration requirements or utilization of
an
available exemption or exemptions therefrom.
2.4 Vacation and Holidays. The Executive shall be entitled to an
annual
vacation leave of one (1) week for each four months worked at full
pay or
such greater vacation benefits as may be provided for by the
Company's
vacation policies applicable to senior executives of the Company.
Any
unused vacation time may be accumulated and carried over from one
year to
the next; provided, however, if any vacation time would otherwise
be
carried over for a second year, the Executive may, at his option,
elect
not to have such vacation time carried over but may instead
request the
Company to compensate the Executive for such vacation time by
paying the
Executive for such time at the Executive's then current base
salary rate.
Executive shall be entitled to receive payment in lieu of any
unused
vacation time. All vacation time must be taken at times
convenient to
Company, and must be taken in increments of no more than five (5)
business
days at any one (1) time unless prior approval is granted by the
Board.
Except to the extent that accumulated vacation time is paid off by
the
Company as described above, none of the accumulated vacation time
will be
lost for any reason. Executive shall be entitled to such holidays
as are
established by the Company for all employees. Up to 50% of
accumulated
vacation pay may be received in the form of Company's common stock
at a
fair market price. The fair market price shall be the price of
common
stock on the first day of the last month of each calendar quarter,
and
Executive shall have the right to purchase such stock on that date
of each
calendar quarter for that quarter.
2.5 Automobile Allowance. The Company shall provide the Executive
with a
representative automobile and pay all expenses to operate such
company
automobile, or an automobile allowance in the amount of Eight
Hundred
Dollars ($800) per month as reimbursement to the Executive of
costs and
expenses incurred by the Executive for the purchase or lease and
maintenance and operation of an automobile for use by the
Executive in the
performance of the Executive's duties hereunder. Such automobile
allowance
shall be paid in substantially equal semi-monthly installments.
Alternately Company may lease a vehicle for Executive's use in
performance
of his duties up to a total of $800.00 per month.
2.6 Reimbursement of Expenses. The Executive shall be entitled to
receive
prompt reimbursement of all reasonable expenses incurred by the
Executive
in performance of his duties hereunder, including without
limitation all
expenses of subscriptions to trade magazines and other
periodicals,
travel, entertainment and living expenses while away from home on
business
at the request of, or in the service of, the Company, provided
that such
expenses are incurred and accounted for in accordance with the
policies
and procedures established by the Company. All requests for
reimbursement
shall be accompanied by the supporting documentation as required
by the
accounting firm from time to time. Reimbursement will be made
within
fifteen (15) days of receipt of properly submitted expense form.
2.7 Benefits Payable with Disability. If Executive suffers a
"Continuing
Disability," as defined in Article IV below, Company shall
continue to pay
his Base Salary for up to a maximum of one hundred eighty (180)
days;
provided that this amount shall be reduced by the amount of any
disability
insurance payments received by Executive.
2.8. Life Insurance and Tax preparation. The Company shall
maintain for
the Executive during the term of this Agreement a life insurance
policy of
not less than One Million Dollars ($1,000,000). In addition, the
Company shall provide to the Executive a One Thousand Dollar
($1,000)
annual tax preparation allowance.
ARTICLE III
CONFIDENTIALITY AND NONDISCLOSURE
3.1 Confidentiality. During Executive's employment by the Company
or
thereafter at anytime, Executive will not disclose, directly or
indirectly, to any person or entity or use for Executive's own
benefit any
trade secrets or confidential information relating to the
Company's
business, operations, marketing data, business plans, strategies,
employees, negotiations and contracts with other companies, or any
other
subject matter pertaining to the business of the Company or any of
its
clients, customers, consultants, or licensees, known, learned, or
acquired
by Executive during the period of Executive's employment by the
Company
(collectively "Confidential Information"), except as may be
necessary in
the ordinary course of performing Executive's particular duties as
an
employee of the Company.
3.2 Proprietary Information. Executive will promptly disclose and
assign
to Company all ideas, processes, inventions and improvements
coming within
the scope of Company's business, conceived by him alone or with
others
during the term of his employment, and Executive will assist the
Company
in the development of such proprietary information. All such
ideas,
processes, inventions and improvements shall be the sole and
exclusive
property of the Company. In the event any such idea, process,
invention
or improvement shall be deemed by Company or Executive to be
patentable,
Executive shall assist Company in obtaining a patent or patents
thereon,
and he shall execute all documents and do all other things
necessary or
proper to obtain letters patent and to assign to and vest Company
with
full title thereto.
3.3 Return of Confidential Material. Executive shall promptly
deliver to
the Company on termination of Executive's employment with the
Company,
whether or not for Cause and whatever the reason, or at any time
the
Company may so request, all memoranda, notes, records, reports,
manuals,
drawings, blueprints, Confidential Information and any other
documents of
a confidential nature belonging to the Company, including all
copies of
such materials which Executive may then possess or have under
Executive's
control. Upon termination of Executive's employment by the
Company,
Executive shall not take any document, data, or other material of
any
nature containing or pertaining to the proprietary information of
the
Company.
3.4 Prohibition on Solicitation of Customers. During the term of
Executive's employment with the Company, and for a period of one
(1) year
thereafter, Executive shall not, directly or indirectly, either
for
Executive or for any other person or entity, solicit any person or
entity
to terminate such person's or entity's contractual and/or business
relationship with the Company, nor shall Executive interfere with
or
disrupt or attempt to interfere with or disrupt any such
relationship.
None of the foregoing shall be deemed a waiver of any and all
rights and
remedies the Company may have under applicable law.
3.5 Prohibition on Solicitation of Employees, Agents or
Independent
Contractors After Termination. During the term of Executive's
employment
with the Company and for a period of one (1) year following the
termination of Executive's employment with the Company, Executive
will not
solicit any of the employees, agents, or independent contractors
of the
Company to leave the employ of the Company for a competitive
company or
business. However, Executive may solicit any employee, agent or
independent contractor who voluntarily terminates his or her
employment
with the Company after a period of ninety (90) days have elapsed
since the
termination date of such employee, agent or independent
contractor. None
of the foregoing shall be deemed a waiver of any and all rights
and
remedies the Company may have under applicable law.
3.6 Right to Injunctive and Equitable Relief. Executive's
obligations not
to disclose or use Confidential Information and to refrain from
the
solicitations described in this Article III are of a special and
unique
character which gives them a peculiar value. The Company cannot be
reasonably or adequately compensated for damages in an action at
law in
the event Executive breaches such obligations. Therefore,
Executive
expressly agrees that the Company shall be entitled to injunctive
and
other equitable relief without bond or other security in the event
of such
breach in addition to any other rights or remedies which the
Company may
possess or be entitled to pursue. Furthermore, the obligations of
Executive and the rights and remedies of the Company under this
Article
III are cumulative and in addition to, and not in lieu of, any
obligations, rights, or remedies created by applicable law
relating to
misappropriation or theft of trade secrets or Confidential
Information.
3.7 Survival of Obligations. Executive agrees that the terms of
this
Article III shall survive the term of this Agreement and the
termination
of Executive's employment by the Company.
ARTICLE IV
TERMINATION
4.1 Definitions. For purposes of this Article IV, the following
definitions shall be applicable to the terms set forth below:
a) Cause. "Cause" shall mean only the following: (i) the
Executive's
death or Disability; (ii) the willful and continued failure by the
Executive to substantially perform his duties hereunder (other
than such
failure resulting from the Executive's incapacity due to physical
or
mental illness) after two consecutive demands for substantial
performance
are delivered by the Company within a 90 day period. The demands
must
specifically identify the manner in which the Company believes the
Executive has not substantially performed his or her duties; (iii)
conviction of a felony under the laws of the State of California;
or (iv)
habitual drunkenness or illegal drug use by Executive. For
purposes of
this Agreement, no act, or failure to act, on the Executive's part
shall
be considered "willful" unless done, or omitted to be done, by the
Executive in bad faith and without a reasonable belief that such
action or
omission by the Executive was in the best interest of the Company.
Notwithstanding anything to the contrary in the foregoing, no
termination
or other action shall be considered to be for Cause under this
Agreement
unless (x) the Executive first shall have received at least two
consecutive written notices within 90 day period setting forth the
reasons
for the Company's intention to terminate or take other action and
shall
have been provided an opportunity to appear twice, accompanied by
counsel,
and be heard before the Board of Directors; (y) after such
appearances
before the Board, the Board of Directors shall have duly adopted
by
unanimous vote of the Directors of the Company then in office, and
shall
have provided to the Executive a certified resolution finding that
in the
good faith opinion of such Directors the Executive was guilty of
conduct
constituting Cause, as set forth above, and specifying the
particulars
thereof in detail; and (z) the Executive shall have failed to cure
or
remedy the event constituting Cause within 30 days after the
Executive's
receipt of such certified resolution from the Board of Directors.
b) Continuing Disability. A determination of Disability shall
be
subject to the certification of a qualified medical doctor agreed
to by
the Company and the Executive or, in the event of the Executive's
incapacity to designate a doctor, the Executive's legal
representative. In
the absence of agreement between the Company and the Executive,
each party
shall nominate a qualified medical doctor and the two doctors so
nominated
shall select a third doctor, who shall make the determination as
to
Disability.
For the purposes of this Agreement, the term "Continuing
Disability" shall
mean generally that Executive has suffered an accident or illness
resulting in a physical or mental disease, impairment, incapacity
or other
condition as a result of which the Executive becomes unable to
continue to
properly perform all of his duties hereunder, (reasonable absences
because
of sickness for up to three (3) consecutive months are excepted),
and that
this condition can be expected to continue (or has continued) for
a period
of more than one hundred eighty (180) days in any period of twenty-
four
(24) consecutive months.
c) Good Reason. "Good Reason" shall mean each of the
following: (i)
the failure of the Company to vest the Executive, without the
Executive's
consent, with the powers and authority of the Executive's office
or
position of employment as contemplated herein, or any removal of
the
Executive from or failure to re-elect the Executive, without the
Executive's consent, to a position of employment consistent with
the
position and status of Executive as set forth herein; (ii) a
failure by
the Company to pay Executive's salary as contemplated herein (iii)
a
failure by the Company to promptly reimburse Executive as herein
stipulated (iv) a reduction by the Company, without the
Executive's
consent, in the Executive's annual base salary as it may exist
from time
to time; (v) a failure by the Company, without the Executive's
consent, to
continue any Company Benefit Plans in which the Executive
presently is
entitled to participate, as the same may be modified from time to
time;
(vi)a failure, without the Executive's consent, by the Company to
continue
the Executive as a participant in any Company Benefit Plans on at
least
the same basis as he presently participates in such plans; (vii)
the
requirement by the Company, without Executive's consent, that the
Executive be based anywhere other than within thirty (30) miles of
the
Executive's present office location, except for required travel on
the
Company's business to an extent substantially consistent with the
Executive's present business travel obligations; (viii) a failure
by the
Company to comply with any material provisions of this Agreement
which has
not been cured within thirty (30) days after notice of such
noncompliance
has been given by the Executive to the Company, or if such failure
is not
capable of being cured in such time, a cure shall not have been
diligently
initiated by the Company within such thirty-day period; or (ix) a
failure
by the Company to obtain from any successor, before the succession
takes
place, an agreement to assume and perform this Agreement;
provided,
however, that any of the foregoing actions shall not be considered
to be
Good Reason if such action is undertaken by the Company for Cause.
4.2 Continuing Disability. Company shall have the option of
terminating
this Agreement on the date that Executive suffers a Continuing
Disability
(as defined below). If the Board determines that Executive
suffers from a
Continuing Disability, it shall give Executive written notice of
this
determination, and the notice shall specify the Termination Date.
The determination that Executive has become disabled (and, if so,
whether
the disability is continuing) shall be made by: (i) the unanimous
agreement of a majority of the Board of Directors and Executive
(or the
personal representative of Executive); or, if they do not agree,
then by
(ii) the disability insurance carrier, if any disability insurance
is in
effect for Executive; or, if no insurance is in effect, then by
(iii) a
physician mutually selected by the Board and Executive (or the
personal
representative of Executive); or if they do not agree, then by
(iv) at
least two (2) out of three (3) physicians, one of whom shall be
selected
by the Board, the second of whom shall be selected by Executive
(or the
personal representative of Executive), and a third physician, who
shall be
selected by the first two.
4.3 Termination by Executive. Executive may terminate this
Agreement by
delivering a written notice to Company at least hundred and twenty
(120)
days in advance of the Original Expiration Date or the Renewal
Date, as
the case may be. Company may terminate this Agreement for the
reasons as
set forth in this Section IV. In each case, Executive's last day
of
employment shall be the "Termination Date."
4.4 Termination by Company. Executive's employment hereunder may
be
terminated by the Company immediately for Cause. Subject to the
other
provisions contained in this Agreement, the Company may terminate
this
Agreement for any reason other than Cause upon hundred and twenty
(120)
days' written notice to Executive. The effective date of
termination
("Effective Date") shall be considered to be hundred and twenty
(120) days
subsequent to the receipt of a written notice of termination by
Executive;
however, the Company may elect for Executive leave the Company
immediately.
4.5 Compensation Upon Termination. If Company terminates
Executive's
employment for any reason other than for cause as defined above,
then
Company shall pay Executive as per Article I Paragraph 1.2 and
continue to
provide the health insurance set forth in Section 2.3 (a) herein.
All
stock options granted, both exercised and not exercised prior to
termination, shall be deemed vested upon termination. Company
shall be
responsible for the cost of any registration of stock or removal
of
restrictions on all stock owned by Executive.
4.6 Severance Benefits Received Upon Termination. If (a) (i) at
any time
the Executive's employment is terminated by the Company for Cause,
or (ii)
at any time the Executive's employment is terminated by the
Executive
without Good Reason, the Company shall pay the Executive his base
salary
through the end of the 120 day Notice period during which such
termination
occurs (or at the Executive's election, the rate in effect on the
first
day of the month preceding the month in which the date of
termination
occurs) plus payment for any accrued vacation and other benefits.
Thereafter the Company shall have no further obligations under
this
Agreement to the Executive or his or her dependents, beneficiaries
or
estate; provided, however, that the Company will continue to honor
any
obligations that may have been accrued under then existing Company
Benefit
Plans or any other agreements or arrangements applicable to the
Executive.
(b) If (i) at any time the Executive's employment is terminated by
the
Company without Cause, or (ii) at any time the Executive's
employment is
terminated by the Executive for Good Reason, then the Company
shall:
(1) pay to the Executive within three business days following
the
date of termination his monthly base salary in effect on the date
of the
termination through the end of the month during which such
termination
occurs, plus all payments for any vacation earned but not taken,
plus all
accrued benefits; and
2) pay to the Executive as severance pay in a lump sum, in
cash,
within five business days following the date of termination, an
amount
equal to (i) the Executive's monthly base salary in effect on the
date of
termination, multiplied by (ii) fifty-nine (59) months; provided,
however,
that if the lump sum severance payment under this Section
4.5(b)(2),
either alone or together with other payments which the Executive
has the
right to receive from the Company, would constitute an "excess
parachute
payment" (as defined in Section 280G of the Internal Revenue Code
of 1986,
as amended (the "Code")), such lump sum severance payment shall be
paid
over threee months so no portion of thelump sum severance payment
under
this Article III will be subject to the excise tax imposed by
Section 4999
of the Code. The determination of any reduction in the lump sum
severance
payment under this Section 4.5(b)(2) pursuant to the foregoing
proviso
shall be made by independent auditors in good faith and such
determination
shall be conclusive and binding on the Executive and the Company;
(3) pay to the Executive a sum equal to (i) one-month of the
Executive's annual compensation bonus for the entirety of the year
in
which the termination occurs, multiplied by (ii) the number of
months or
portion thereof the Executive was employed by the Company during
the year
in which the termination occurs. The Company shall make such
incentive
compensation bonus payment to the Executive concurrently with its
payment
of bonuses to other executives of the Company; and
(4) maintain at the Company's expense, in full force and
effect, for
the Executive's continued benefit until the earlier of (i) two
years after
the date of termination or (ii) the Executive's commencement of
full time
employment with a new employer, all automobile, automobile
insurance,
life insurance, medical, health and accident, and disability
plans, stock
options, stock bonuses and programs or arrangements in which the
Executive
was entitled to participate immediately prior to the date of
termination,
provided that the Executive's continued participation is possible
under
the general terms and provisions of such plans and programs. In
the event
that the Executive's participation in any such plan or program is
barred,
the Company shall arrange to provide the Executive with benefits
substantially similar to those which the Executive was entitled to
receive
under such plans or programs. Subsequent health insurance benefits
will be
in accordance with COBRA.
4.7 No Obligation to Mitigate Damages; No Effect on Other
Contractual
Rights.
(a) The Executive shall not be required to mitigate damages
or the
amount of any payment provided for under this Agreement by seeking
other
employment or otherwise, nor shall the amount of any payment
provided for
under this Agreement be reduced by any compensation earned by the
Executive as the result of employment by another employer after
the date
of termination, or otherwise (except as provided in Section
4.5(b)(3)).
(b) The provisions of this Agreement, and any payment or
benefit
provided for hereunder, shall not reduce any amounts otherwise
payable, or
in any way diminish the Executive's existing rights, or rights
which would
accrue solely as a result of the passage of time, under any
Company
Benefit Plan, employment agreement or other contract, plan or
arrangement.
4.8 Death. This Agreement shall automatically terminate for cause
on the
date that Executive dies.
ARTICLE V
ASSUMPTION OF OBLIGATIONS BY SUCCESSOR TO COMPANY
5.1 Assumption of Obligations. The Company will require any
successor or
assign (whether direct or indirect, by purchase, merger,
consolidation or
otherwise) to all or substantially all of the business and/or
assets of
the Company, by agreement in form and substance satisfactory to
the
Executive, expressly, absolutely and unconditionally to assume and
agree
to perform this Agreement in the same manner and to the same
extent that
the Company would be required to perform it if no such succession
or
assignment had taken place. Any failure of the Company to obtain
such
agreement prior to the effectiveness of any such succession or
assignment
shall constitute a material breach of this Agreement. As used in
this
Agreement, "Company" shall mean the Company as herein before
defined and
any successor or assign to its business and/or assets as aforesaid
which
executes and delivers the agreement provided or in this Article V
or which
otherwise becomes bound by all the terms and provisions of this
Agreement
by operation of law. If at any time during the term of this
Agreement the
Executive is employed by any corporation a majority of the voting
securities of which is then owned by the Company, "Company" as
used in
this Agreement shall in addition include such employer. In such
event, the
Company agrees that it shall pay or shall cause such employer to
pay any
amounts owed to the Executive pursuant to this Agreement.
5.2 Beneficial Interests. This Agreement shall inure to the
benefit of and
be enforceable by the Executive's personal and legal
representatives,
executors, administrators, successors, heirs, distributees,
devisees and
legatees. If the Executive should die while any amounts are still
payable
to him or her hereunder, all such amounts, unless otherwise
provided
herein, shall be paid in accordance with the terms of this
Agreement to
the Executive's devisee, legatee, or other designee or, if there
be no
such designee, to the Executive's estate.
ARTICLE VI
GENERAL PROVISIONS
6.1 Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing
and shall
be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage
prepaid,
as follows:
If to the Company: Bridge Technology, Inc.
1815 East Carnegie
Santa Ana, CA. 92705
Attn: John Gauthier,
Secretary
If to the Executive: John J. Harwer
59 Sillero
Rancho Santa Margarita
CA. 92688
or such other address as either party may have furnished to the
other in
writing in accordance herewith, except that notices of change of
address
shall be effective only upon receipt.
6.2 No Waivers. No provision of this Agreement may be modified,
waived or
discharged unless such waiver, modification or discharge is agreed
to in
writing signed by the Executive and the Company. No waiver by
either party
hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to
be
performed by such other party shall be deemed a waiver of similar
or
dissimilar provisions or conditions at the same or at any prior or
subsequent time.
6.3 Governing Law. This Agreement shall be governed by and
construed in
accordance with the laws of the State of California.
6.4 Severability or Partial Invalidity. The invalidity or
unenforceability
of any provisions of this Agreement shall not affect the validity
or
enforceability of any other provision of this Agreement, which
shall
remain in full force and effect.
6.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but
all of
which together will constitute one and the same instrument.
6.6 Legal Fees and Expenses. Should any party institute any action
or
proceeding to enforce this Agreement or any provision hereof, or
for
damages by reason of any alleged breach of this Agreement or of
any
provision hereof, or for a declaration of rights hereunder, the
prevailing
party in any such action or proceeding shall be entitled to
receive from
the other party all costs and expenses, including reasonable
attorneys'
fees, incurred by the prevailing party in connection with such
action or
proceeding.
6.7 Entire Agreement. This Agreement constitutes the entire
agreement of
the parties and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings, and negotiations
between
the parties with respect to the subject matter hereof. This
Agreement is
intended by the parties as the final expression of their agreement
with
respect to such terms as are included in this Agreement and may
not be
contradicted by evidence of any prior or contemporaneous
agreement. The
parties further intend that this Agreement constitutes the
complete and
exclusive statement of its terms and that no extrinsic evidence
may be
introduced in any judicial proceeding involving this Agreement.
6.8 Assignment. Subject to the provisions of Article V hereof,
this
Agreement and the rights, duties, and obligations hereunder may
not
assigned or delegated by any party without the prior written
consent of
the other party. Notwithstanding the foregoing provisions of this
Section
6.8, the Company may assign or delegate its rights, duties, and
obligations hereunder to any person or entity which succeeds to
all or
substantially all of the business of the Company through merger,
consolidation, reorganization, or other business combination or by
acquisition of all or substantially all of the assets of the
Company;
provided that such person assumes the Company's obligations under
this
Agreement in accordance with Section 5.1.
6.9 Arbitration. Any controversy, dispute, claim or other matter
in
question arising out of or relating to this Agreement shall be
settled, at
the request of either party, by binding arbitration in accordance
with the
Commercial Arbitration Rules of the American Arbitration
Association
("AAA"), and judgement upon the award rendered by the arbitrators
may be
entered in any court having jurisdiction thereof, subject to the
following
terms, conditions and exceptions:
(a) Notice of the demand for arbitration shall be filed in
writing
with the other party and with the AAA. There shall be a panel of
three (3)
arbitrators whose selection shall be made in accordance with the
procedures then existing for the selection of such arbitrators by
the AAA.
(b) Reasonable discovery shall be allowed in arbitration.
(c) The costs and fees of the arbitration shall be
allocated
by the arbitrators.
(Signature Page to the Employment Agreement)
IN WITNESS WHEREOF, the parties have executed this
Agreement as
of the date first above written.
JOHN J. HARWER
"HARWER"
BRIDGE TECHNOLOGY, INC.,
A Nevada corporation
By: John T. Gauthier
Its: President, CEO & Chairman
"BRIDGE TECHNOLOGY"
BRIDGE R&D
A California corporation
By: John T. Gauthier
Its: CFO & Director
"BRIDGE R&D"
SUBSIDIARY OF THE REGISTRANT
1) BRIDGE R&D, Inc.
a California Corporation
Wholly owned subsidiary of Bridge Technology, Inc.
Address:
1815 East Carnegie Avenue
Santa Ana, California 92705
Officers:
John J. Harwer, President
John T. Gauthier, Treasurer
Denise Lafone, Secretary
Directors:
John J. Harwer
John T. Gauthier
Woody C. G. Wu
Federal ID # 33-0762071
Incorporated in California June 26, 1997.
2) NEWCORP TECHNOLOGY, LTD., Tokyo, Japan,
a Japan Corporation
Wholly owned subsidiary of Bridge Technology, Inc.
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BYLAWS FOR THE REGULATION, EXCEPT AS
OTHERWISE PROVIDED BY STATUTE OR ITS
ARTICLES OF INCORPORATION, OF
BRIDGE TECHNOLOGY, INC.
(a Nevada corporation)
TABLE OF CONTENTS
ARTICLE I 1. Offices. 1
1.1. Principal Executive Office. 1
1.2. Other Offices. 1
ARTICLE II 2. Meetings of Shareholders. 1
2.1. Place of Meetings. 1
2.2. Annual Meeting. 1
2.3. Special Meetings. 2
2.4. Quorum. 3
2.5. Adjourned Meeting and Notice Thereof. 3
2.6. Voting. 3
2.7. Validation of Defectively Called Noticed Meetings. 4
2.8. Action Without Meeting. 4
2.9. Proxies. 5
2.10. Inspectors of Election. 6
ARTICLE III 3. Directors. 6
3.1. Powers. 6
3.2. Number and Qualification of Directors. 8
3.3. Election and Term of Office. 9
3.4. Resignation and Removal of Directors. 9
3.5. Vacancies. 9
3.6. Place of Meeting. 10
3.7. Regular Meetings. 10
3.8. Other Regular Meetings. 10
3.9. Special Meetings. 10
3.10. Action Without Meeting. 10
3.11. Action at a Meeting: Quorum and Required Vote. 11
3.12. Validation of Defectively Called or Noticed Meetings.
11
3.13. Adjournment. 11
3.14. Notice of Adjournment. 11
3.15. Fees and Compensation. 11
ARTICLE IV 4. Indemnification of Directors, Officers,
Employees
and Other Agents. 12
4.1. Indemnification - Third Party Proceedings. 12
4.2. Indemnification - Proceedings by or in the Right of the
Corporation. 12
4.3. Successful Defense on Merits. 13
4.4. Certain Terms Defined. 13
4.5. Advancement of Expenses. 13
4.6. Notice of Claim. 14
4.7. Enforcement Rights. 14
4.8. Assumption of Defense. 14
4.9. Approval of Expenses. 15
4.10. Subrogation. 15
4.11. Exceptions. 15
(a) Excluded Acts. 15
(b) Claims Initiated by Indemnitee. 15
(c) Lack of Good Faith. 15
(d) Insured Claims. 16
(e) Claims Under Section 16(b). 16
4.12. Partial Indemnification. 16
4.13. Coverage. 16
4.14. Non-Exclusivity. 17
4.15. Severability. 17
4.16. Mutual Acknowledgment. 17
4.17. Officer and Director Liability Insurance. 17
4.18. Notice to Insurance. 17
4.19. Attorneys' Fees. 17
4.20. Notice. 18
ARTICLE V 5. Officers. 18
5.1. Officers. 18
5.2. Election. 18
5.3. Subordinate Officers, Etc. 18
5.4. Removal and Resignation. 18
5.5. Vacancies. 19
5.6. Chairman of the Board. 19
5.7. President. 19
5.8. Vice-Presidents. 19
5.9. Secretary. 19
5.10. Chief Financial Officer. 20
ARTICLE VI 6. Miscellaneous. 20
6.1. Record Date. 21
6.2. Inspection of Corporate Records. 21
6.3. Checks, Drafts, Etc. 22
Annual and Other Reports. 22
6.5. Contracts, Etc., How Executed. 23
6.6. Certificate for Shares. 23
6.7. Representation of Shares of Other Corporations. 24
6.8. Inspection of Bylaws. 24
6.9. Seal. 24
6.10. Construction and Definitions. 24
ARTICLE VII 7. Amendments. 25
7.1. Power of Shareholders. 25
7.2 Power of Directors. 25
CERTIFICATE OF SECRETARY 26
BYLAWS FOR THE REGULATION, EXCEPT AS
OTHERWISE PROVIDED BY STATUTE OR ITS
ARTICLES OF INCORPORATION, OF
BRIDGE TECHNOLOGY, INC.
(a Nevada corporation)
ARTICLE I
1. Offices.
1.1. Registered Office. The registered office of BRIDGE
TECHNOLOGY, Inc. (the "Corporation") is hereby fixed and located
at: 2004 Westland Drive, Santa Ana, California 92705 (the
"Principal Executive Office"). The Board of Directors ("Board")
is hereby granted full power and authority to change said
Principal Executive office from one location to another. Any
such change shall be noted on the Bylaws by the Secretary,
opposite this section, or this section may be amended to state
the new location.
1.2. Other Offices. Other business offices may at any time be
established by the Board or by the President at any place or
places where the Corporation is qualified to do business.
ARTICLE II
2. Meetings of Shareholders.
2.1. Place of Meetings. All annual or other meetings of
shareholders shall be held at the Principal Executive office of
the Corporation, or at any other place within or without the
State of California which may be designated either by the Board
or by the written consent of all persons entitled to vote thereat
and not present at the meeting, given either before or after the
meeting and filed with the Secretary of the Corporation.
2.2. Annual Meeting. The annual meetings of shareholders shall
be held on the first (1st) day of June of each year, at 9:00
a.m., or at such other date and time as shall be designated from
time to time by the Board or by the shareholders in accordance
with these bylaws; provided, however, that should said day fall
upon a legal holiday, then any such annual meeting of
shareholders shall be held at the same time and place on the next
full business day. At such meetings, directors shall be elected,
reports of the affairs of the Corporation shall be considered,
and any other business may be transacted which is within the
powers of the shareholders.
Written notice of each annual meeting shall be given to each
shareholder entitled to vote, either personally or by first-class
mail or other means of written communication, charges prepaid,
addressed to such shareholder at his address appearing on the
books of the Corporation or given by him to the Corporation for
the purpose of notice. If any notice or report addressed to the
shareholder at the address of such shareholder appearing on the
books of the Corporation is returned to the Corporation by the
United States Postal Service marked to indicate that the United
States Postal Service is unable to deliver the notice or report
to the shareholder at such address, all future notices or reports
shall be deemed to have been duly given without further mailing
if the same shall be available for the shareholder upon written
demand of the shareholder at the Principal Executive office of
the Corporation for a period of one year from the date of the
giving of the notice or report to all other shareholders. If a
shareholder gives no address, notice shall be deemed to have been
given him if sent by mail or other means of written communication
addressed to the place where the Principal Executive Office of
the Corporation is situated, or if published at least once in a
newspaper of general circulation in the county in which said
Principal Executive Office is located.
All such notices shall be given to each shareholder entitled
thereto not less than ten (10) days nor more than sixty (60) days
before each annual meeting. Any such notice shall be deemed to
have been given at the time when delivered personally or
deposited in the mail or sent by other means of written
communication. An affidavit of mailing of any such notice in
accordance with the foregoing provisions, executed by the
Secretary, Assistant Secretary or any transfer agent of the
Corporation shall be prima facie evidence of the giving of the
notice.
Such notice shall specify:
(1) the place, the date, and the hour of such meeting;
(2) those matters which the Board, at the time of the mailing of
the
notice, intends to present for action by the shareholders;
(3) if directors are to be elected, the names of nominees
intended at
the time of the notice to be presented by the Board for election;
(4) the general nature of a proposal, if any, to take action with
respect
to approval of, (i) a contract or other transaction with an
interested director, (ii) amendment of the Articles of
Incorporation, (iii) a reorganization of the Corporation as
defined in Section 181 of the California Corporations Code, (iv)
voluntary dissolution of the Corporation, or (v) a distribution
in dissolution other than in accordance with the rights of
outstanding preferred shares, if any; and
(5) such other matters, if any, as may be expressly required by
statute.
2.3. Special Meetings. Special meetings of the shareholders, for
the purpose of taking any action permitted by the shareholders
under the General Corporation Law and the Articles of
Incorporation of this Corporation, may be called at any time by
the Chairman of the Board or the President, or by the Board, or
by one or more shareholders holding not less than ten percent
(10%) of the votes at the meeting. Upon request in writing that
a special meeting of shareholders be called for any proper
purpose, directed to the Chairman of the Board, President, Vice-
President or Secretary by any person (other than the Board)
entitled to call a special meeting of shareholders, the officer
forthwith shall cause notice to be given to shareholders entitled
to vote that a meeting will be held at a time requested by the
person or persons calling the meeting, not less than ten (10) nor
more than sixty (60) days after receipt of the request. Except
in special cases where other express provision is made by
statute, notice of such special meetings shall be given in the
same manner as for annual meetings of shareholders. In addition
to the matters required by items (a) and, if applicable, (c) of
Section 2.2, notice of any special meeting shall specify the
general nature of the business to be transacted, and no other
business may be transacted at such meeting.
2.4. Quorum. The presence in person or by proxy of the persons
entitled to vote a majority of the voting shares at any meeting
shall constitute a quorum for the transaction of business. The
shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave
less than a quorum, if any action taken (other than adjournment)
is approved by at least a majority of the shares required to
constitute a quorum.
2.5. Adjourned Meeting and Notice Thereof. Any shareholders'
meeting, annual or special, whether or not a quorum is present,
may be adjourned from time to time by the vote of a majority of
the shares, the holders of which are either present in person or
represented by proxy, but in the absence of a quorum no other
business may be transacted at such meeting, except as provided in
Section 2.4.
2.6. Voting. At all meetings of shareholders, every shareholder
entitled to vote shall have the right to vote in person or by
proxy the number of shares standing in the name of such
shareholder on the stock records of the Corporation on the record
date for such meeting. Shares held by an administrator,
executor, guardian, conservator, custodian, trustee, receiver,
pledgee, minor, corporation or fiduciary or held by this
Corporation or a subsidiary of this Corporation in a fiduciary
capacity or by two or more persons shall be voted in the manner
set forth in Sections 702, 703 and 704 of the California
Corporations Code. Shares of this Corporation owned by this
Corporation or a subsidiary (except shares held in a fiduciary
capacity) shall not be entitled to vote. Unless a record date
for voting purposes be fixed as provided in Section 6.1 of these
Bylaws then only persons in whose names shares entitled to vote
stand on the stock records of the Corporation at the close of
business on the business day next preceding the day on which
notice of the meeting is given or if such notice is waived, at
the close of business on the business day next preceding the day
on which the meeting of shareholders is held, shall be entitled
to vote at such meeting, and such day shall be the record date
for such meeting. Such vote may be viva voce or by ballot;
provided, however, that all elections for directors must be by
ballot upon demand made by a shareholder at any election and
before the voting begins. Except with respect to election of
directors as provided below, the affirmative vote on any matter
by a majority of the shares represented and voting at a duly held
meeting at which a quorum is present (which shares voting
affirmatively also constitute at least a majority of the required
quorum) shall be the act of the shareholders, unless the vote of
a greater number or voting by classes is required by the
California Corporations Code or the Articles of Incorporation.
Subject to the requirements of the next sentence, every
shareholder entitled to vote at any election for directors shall
have the right to cumulate his votes and give one candidate a
number of votes equal to the number of directors to be elected
multiplied by the number of votes to which his shares are
entitled, or to distribute his votes on the same principle among
as many candidates as he shall think fit. No shareholder shall
be entitled to cumulative votes unless the name of the candidate
or candidates for whom such votes would be cast has been placed
in nomination prior to the voting and any shareholder has given
notice at the meeting prior to the voting, of such shareholder's
intention to cumulate his votes. The candidates receiving the
highest number of affirmative votes of shares entitled to be
voted for them, up to the number of directors to be elected,
shall be elected; votes against the candidate and votes withheld
shall have no effect.
2.7. Validation of Defectively Called Noticed Meetings. The
proceedings and transactions of any meeting of shareholders,
either annual or special, however called and noticed and wherever
held, shall be as valid as though had at a meeting duly held
after regular call and notice, if a quorum be present either in
person or by proxy, and if, either before or after the meeting,
each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice or a consent to the
holding of such meeting, or an approval of the minutes thereof.
Attendance of a person at a meeting shall constitute a waiver of
notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or
convened and except that attendance at a meeting is not a waiver
of any right to object to the consideration of matters required
by law or these Bylaws to be included in the notice but not so
included, if such objection is expressly made at the meeting,
provided, however, that any person making such objection at the
beginning of the meeting or to the consideration of matters
required to be but not included in the notice may orally withdraw
such objection at the meeting or thereafter waive such objection
by signing a written waiver thereof or a consent to the holding
of the meeting or the meetings. Neither the business to be
transacted at nor the purpose of any annual or special meeting of
shareholders need be specified in any written waiver of notice,
consent to the holding of the meeting or approval of the minutes
thereof except that the general nature of the proposals specified
in subsection (d) of Section 2.2 shall be so stated. All such
waivers, consents or approvals shall be filed with the corporate
records or made a part of the minutes of the meeting.
2.8. Action Without Meeting. Directors may be elected without a
meeting by consent in writing, setting forth the action so taken,
signed by all of the persons who would be entitled to vote for
the election of directors, provided that, without notice except
as hereinafter set forth, a director may be elected at any time
to fill a vacancy, other than to fill a vacancy created by
removal, not filled by the directors by the written consent of
persons holding a majority of the outstanding shares entitled to
vote for the election of directors.
Any other action which, under any provision of the California
Corporations Code, may be taken at a meeting of the shareholders,
may be taken without a meeting, and without notice except as
hereinafter set forth, if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding shares
having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted.
Unless the consents of all shareholders entitled to vote have
been solicited in writing,
(1) Notice of any proposed shareholder approval of, (i) a
contract or other transaction with an interested director, (ii)
indemnification of an agent of the Corporation as authorized by
Section 3.16 of these Bylaws, (iii) a reorganization of the
Corporation as defined in Section 181 of the California
Corporations Code, or (iv) a distribution in dissolution other
than in accordance with the rights of outstanding preferred
shares, if any, without a meeting by less than unanimous written
consent, shall be given at least ten (10) days before the
consummation of the action authorized by such approval; and
(2) Prompt notice shall be given of the taking of any other
corporate action approved by shareholders without a meeting by
less than unanimous written consent, to those shareholders
entitled to vote who have not consented in writing. Such notices
shall be given in the manner and shall be deemed to have been
given as provided in Section 2.2 of these Bylaws.
Unless, as provided in Section 6.1 of these Bylaws, the Board has
fixed a record date for the determination of shareholders
entitled to notice of and to give such written consent, the
record date for such determination shall be the day on which the
first written consent is given. All such written consents shall
be filed with the Secretary of the Corporation.
Any shareholder given a written consent, or the shareholder's
proxy holders, or a transferee of the shares of a personal
representative of the shareholder or their respective proxy
holders, may revoke the consent by a writing received by the
Corporation prior to the time that written consents of the number
of shares required to authorize the proposed action have been
filed with the Secretary of the Corporation, but may not do so
thereafter. Such revocation is effective upon its receipt by the
Secretary of the Corporation.
2.9. Proxies. Every person entitled to vote or execute consents
shall have the right to do so either in person or by one or more
agents authorized by a written proxy executed by such person or
the duly authorized agent of such person and filed with the
Secretary of the Corporation, or the persons appointed as
inspectors of election or such other persons as may be designated
by the Board or the President to receive proxies; provided that
no such proxy shall be valid after the expiration of eleven (11)
months from the date of its execution, unless the person
executing it specifies therein the length of time for which such
proxy is to continue in force. Every proxy duly executing
continues in full force and effect until revoked by the person
executing it prior to the vote pursuant thereto. Except as
otherwise provided by law, such revocation may be effected as to
any meeting by attendance at such meeting and voting in person by
the person executing the proxy or by a writing stating that the
proxy is revoked or by a proxy bearing a later date executed by
the person executing the prior proxy and presented to the meeting
or filed with the Secretary of the Corporation or the persons
appointed as inspectors of election or such other persons as may
be designated by the Board or the President to receive proxies.
2.10. Inspectors of Election. In advance of any meeting of
shareholders, the Board may appoint any persons other than
nominees for office as inspectors of election to act at such
meeting or any adjournment thereof. If inspectors of election
are not so appointed, the Chairman of any such meeting may, and
on the request of any shareholder or his proxy shall, make such
appointment at the meeting. The number of inspectors shall be
either one (1) or three (3). If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of
shares represented in person or by proxy shall determine whether
one (1) or three (3) inspectors are to be appointed. In case any
person appointed as inspector fails to appear or fails or refuses
to act, the vacancy may, and on the request of any shareholder or
a shareholder's proxy shall, be filled by appointment by the
Board in advance of the meeting, or at the meeting by the
chairman of the meeting.
The duties of such inspectors shall be as prescribed by Section
707 of the California Corporations Code and shall include:
determining the number of shares outstanding and the voting power
of each, the shares represented at the meeting, the existence of
a quorum, the authenticity, validity and effect of proxies;
receiving votes, ballots or consents; hearing and determining all
challenges and questions in any way arising in connection with
the right to vote; counting and tabulating all votes or consents;
determining when the polls shall close; determining the result;
and such acts as may be proper to conduct the election or vote
with fairness to all shareholders. In the determination of the
validity and effect of proxies, the dates contained in the forms
of proxy shall presumptively determine the order of execution of
the proxies, regardless of the postmark dates on the envelopes in
which they are mailed.
The inspectors of election shall perform their duties
impartially, in good faith, to the best of their ability and as
expeditiously as is practical. If there are three inspectors of
election, the decision, act or certificate of a majority is
effective in all respects as the decision, act or certificate of
all. Any report or certificate made by the inspectors of
election is prima facie evidence of the facts stated therein.
ARTICLE III
3. Directors.
3.1. Powers. Subject to the limitations of the Articles of
Incorporation and of the California Corporations Code as to
action to be authorized or approved by the shareholders, and
subject to the duties of directors as prescribed by the Bylaws,
all corporate powers shall be exercised by or under the authority
of, and the business and affairs of the Corporation shall be
managed by, the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly
declared that the directors shall have the following powers:
(1) To select and remove all the officers, agents and employees
of the Corporation, prescribe such powers and duties for them as
may not be inconsistent with law, with the Articles of
Incorporation or the Bylaws, fix their compensation and require
from them security for faithful service.
(2) To conduct, manage and control the affairs and business of
the Corporation, and to make such rules and regulations therefor
not inconsistent with law, or with the Articles of Incorporation
or the Bylaws, as they may deem best.
(3) To change the Principal Executive office and principal office
for the transaction of the business of the Corporation from one
location to another as provided in Section 1.1 hereof; to fix and
locate from time to time one or more subsidiary offices of the
Corporation within or without the State of California, as
provided in Section 1.2 hereof; to designate any place within or
without the State of California for the holding of any
shareholders' meeting or meetings; and to adopt, make and use a
corporate seal, and to prescribe the forms of certificates of
stock, and to alter the form of such seal and of such
certificates from time to time, as in their judgment they may
deem best, provided such seal and such certificates shall at all
times comply with the provisions of law.
(4) To authorize the issue of shares of stock of the Corporation
from time to time, upon such terms as may be lawful.
(5) To borrow money and incur indebtedness for the purposes of
the Corporation, and to cause to be executed and delivered
therefor, in the corporate name, promissory notes, bonds,
debentures, deeds of trust, mortgages/pledges, hypothecations or
other evidences of debt and securities therefor.
(6) By resolution adopted by a majority of the authorized number
of directors, to designate an executive and other committees,
each consisting of two or more directors, to serve at the
pleasure of the Board and to prescribe the manner in which
proceedings of such committee shall be conducted. Unless the
Board shall otherwise prescribe the manner of proceedings of any
such committee, meetings of such committee may be regularly
scheduled in advance and may be called at any time by any two
members thereof; otherwise, the provisions of these Bylaws with
respect to notice and conduct of meetings of the Board shall
govern. The appointment of members or alternate members of a
committee requires the vote of a majority of the authorized
number of directors. Any such committee, to the extent provided
in a resolution of the Board, shall have all of the authority of
the Board, except with respect to:
1 the approval of any action for which the California
Corporations Code or the Articles of Incorporation also require
shareholder approval;
(1)
(2) the filling of vacancies on the Board or in any committee;
(3) the fixing of compensation of the directors for serving on
the Board or on any committee;
(4) the adoption, amendment or repeal of Bylaws;
(5) the amendment or repeal of any resolution of the Board;
(6) any distribution to the shareholders, except at a rate or in
a
periodic amount or within a price range determined by the Board;
and
(7) the appointment of other committees of the Board or the
members thereof.
The Board may prescribe appropriate rules, not inconsistent with
these Bylaws, by which proceedings of any such committee shall be
conducted. The provisions of these Bylaws relating to the
calling of meetings of the Board, notice of meetings of the Board
and waiver of such notice, adjournments of meetings of the Board,
written consents to Board meetings and approval of minutes,
action by the Board by consent in writing without a meeting, the
place of holding such meetings, meetings by conference telephone
or similar communications equipment, the quorum for such
meetings, the vote required at such meetings and the withdrawal
of directors after commencement of a meeting shall apply to
committees of the Board and action by such committees. In
addition, any member of the committee designated by the Board as
the chairman or as secretary of the committee or any two members
of a committee may call meetings of the committee. Regular
meetings of any committee may be held without notice if the time
and place of such meetings are fixed by the Board or the
committee.
3.2. Number and Qualification of Directors. The number of
directors of the Corporation shall be not less than three (3) nor
more than seven (7); provided, however that so long as the
Corporation has only one shareholder, the number may be one (1).
The indefinite number of directors may be changed, or a definite
number may be fixed without provision for an indefinite number,
by a duly adopted amendment to the Articles of Incorporation or
by an amendment to these Bylaws duly adopted by the vote or
written consent of holders of a majority of the outstanding
shares entitled to vote; provided, however, that an amendment
reducing the fixed number or the minimum number of directors to a
number less than five (5) cannot be adopted if the votes cast
against its adoption at a meeting, or the shares not consenting
in the case of an action by written consent, are equal to more
than sixteen and two-thirds percent (16_) of the outstanding
shares entitled to vote thereon. No amendment may change the
stated maximum number of authorized directors to a number greater
than two (2) times the stated minimum number of directors minus
one (1).
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of
office expires.
Subject to the foregoing provisions for changing the number of
directors, the number of directors of this Corporation has been
fixed at three (3).
3.3. Election and Term of Office. The directors shall be elected
at each annual meeting of shareholders but, if any such annual
meeting is not held or the directors are not elected thereat, the
directors may be elected at any special meeting of shareholders
held for that purpose. All directors shall hold office until
their respective successors are elected, subject to the General
Corporation Law and the provisions of these Bylaws with respect
to vacancies on the Board.
3.4. Resignation and Removal of Directors. Any director may
resign effective upon giving written notice to the Chairman of
the Board, the President, the Secretary or the Board of the
Corporation, unless the notice specifies a later time for the
effectiveness of such resignation, in which case such resignation
shall be effective at the time specified. Unless such
resignation specifies otherwise, its acceptance by the
Corporation shall not be necessary to make it effective. The
Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a
felony. Any or all of the directors may be removed without cause
if such removal is approved by the affirmative vote of a majority
of the outstanding shares entitled to vote provided that no
directors may be removed (unless the entire Board is removed)
when the votes cast against removal (or, if such action is taken
by written consent, the shares held by persons not consenting in
writing to such removal) would be sufficient to elect such
director if voted cumulatively at an election at which the same
total number of votes were cast (or, if such action is taken by
written consent, all shares entitled to vote were voted) and the
entire number of directors authorized at the time of the
directors' most recent election were then being elected. No
reduction of the authorized number of directors shall have the
effect of removing any director before his term of office
expires.
3.5. Vacancies. A vacancy in the Board shall be deemed to exist
in case of the death, resignation or removal of any director, if
a director has been declared of unsound mind by order of court or
convicted of a felony, if the authorized number of directors be
increased, or if the shareholders fail, at any annual or special
meeting of shareholders at which any director or directors are
elected, to elect the full authorized number of directors to be
voted for at that meeting.
Vacancies in the Board, except for a vacancy created by the
removal of a director, may be filled by a majority of the
remaining directors, though less than a quorum, or by a sole
remaining director, and each director so elected shall hold
office until his successor is elected at an annual or a special
meeting of the shareholders. A vacancy in the Board created by
the removal of a director may only be filled by the vote of a
majority of the shares entitled to vote represented and voting at
a duly held meeting at which a quorum is present (which shares
voting affirmatively also constitute at least a majority of the
required quorum), or by the written consent of the holders of a
majority of the outstanding shares. The shareholders may elect a
director or directors at any time to fill any vacancy or
vacancies not filled by the directors. Any such election by
written consent other than to fill a vacancy created by removal
shall require the consent of holders of a majority of the
outstanding shares entitled to vote.
3.6. Place of Meeting. Regular meetings of the Board shall be
held at any place within or without the State which has been
designated in the notice or written waiver of notice of the
meeting, or, if not stated in the notice or waiver of notice or
if there is no notice, designated by resolution of the Board or,
either before or after the meeting, consented to in writing by
all members of the Board who were not present at the meeting. In
the absence of such designation, regular meetings shall be held
at the Principal Executive Office of the Corporation. Special
meetings of the Board may be held either at a place so designated
or at the Principal Executive office.
3.7. Regular Meetings. Immediately following each annual meeting
of shareholders the Board shall hold a regular meeting at the
place of said annual meeting or at such other place as shall be
fixed by the Board, for the purpose of organization, election of
officers, and the transaction of other business. Call and notice
of such meetings are hereby dispensed with.
3.8. Other Regular Meetings. There shall be no other regular
meetings of the Board.
3.9. Special Meetings. Special meetings of the Board for any
purpose or purposes shall be called at any time by the Chairman
of the Board, the President, the Secretary or by any two
directors.
Written notice of the time and place of special meetings shall be
delivered personally to each director or communicated to each
director by telephone, or by telegraph or mail, charges prepaid,
addressed to him at his address as it is shown upon the records
of the Corporation or, if it is not so shown on such records or
is not readily ascertainable, at the place at which the meetings
of the directors are regularly held. In case such notice is
mailed, it shall be deposited in the United States mail in the
place in which the Principal Executive Office of the Corporation
is located at least five (5) days prior to the time of the
holding of the meeting. In case such notice is delivered
personally or by telephone or telegraph, as above provided, it
shall be so delivered at least forty-eight (48) hours prior to
the time of the holding of the meeting. Such mailing,
telegraphing or delivery, personally or by telephone, as above
provided, shall be due, legal and personal notice to such
director.
Any notice shall state the date, place and hour of the meeting
and the general nature of the business to be transacted, and no
other business may be transacted at the meeting.
3.10. Action Without Meeting. Any action by the Board may be
taken without a meeting if all members of the Board shall
individually or collectively consent in writing to such action.
Such written consent or consents shall be filed with the minutes
of the proceedings of the Board and shall have the same force and
effect as a unanimous vote of such directors.
3.11. Action at a Meeting: Quorum and Required Vote. Presence of
a majority of the authorized number of directors at a meeting of
the Board constitutes a quorum for the transaction of business,
except as hereinafter provided. Members of the Board may
participate in a meeting through use of conference telephone or
similar communications equipment, so long as all members
participating in such meeting can hear one another.
Participation in a meeting as permitted in the preceding sentence
constitutes presence in person at such meeting. Every act or
decision done or made by a majority of the directors present at a
meeting duly held at which a quorum is present shall be regarded
as the act of the Board, unless a greater number, or the same
number after disqualifying one or more directors from voting, is
required by law, by the Articles of Incorporation, or by these
Bylaws. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of
director, provided that any action taken is approved by at least
a majority of the required quorum for such meeting.
3.12. Validation of Defectively Called or Noticed Meetings. The
transactions of any meeting of the Board, however called and
noticed or wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice, if a quorum is
present and if, either before or after the meeting, each of the
directors not present or who, though present, has prior to the
meeting or at its commencement, protested the lack of proper
notice to him, signs a written waiver of notice or a consent to
holding such meeting or an approval of the minutes thereof. All
such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
3.13. Adjournment. A quorum of the directors may adjourn any
directors' meeting to meet again at a stated day and hour;
provided, however, that in the absence of a quorum a majority of
the directors present at any directors, meeting, either regular
or special, may adjourn from time to time until the time fixed
for the next regular meeting of the Board.
3.14. Notice of Adjournment. If the meeting is adjourned for
more than twenty-four (24) hours, notice of any adjournment to
another time or place shall be given prior to the time of the
adjourned meeting to the directors who were not present at the
time of adjournment. Otherwise, notice of the time and place of
holding an adjourned meeting need not be given to absent
directors if the time and place be fixed at the meeting
adjourned.
3.15. Fees and Compensation. Directors and members of the
committees shall receive compensation for their services as
directors or members of committees or reimbursement for their
expenses incurred as directors or members of committees as these
payments are fixed by resolution of the Board. Directors and
members of committees may receive compensation and reimbursement
for their expenses incurred as officers, agents or employees of
or for other services performed for the Corporation as approved
by the President without authorization, approval or ratification
by the Board.
ARTICLE IV
4. Indemnification of Directors, Officers, Employees and Other
Agents.
4.1. Indemnification - Third Party Proceedings. The corporation
shall indemnify any person (the "Indemnitee") who is or was a
party, or is or was threatened to be made a party to any
proceeding (other than an action by or in the right of the
corporation to procure a judgment in its favor) by reason of the
fact that Indemnitee is or was a director or officer of the
corporation, or any subsidiary of the corporation, and the
corporation may indemnify a person who is or was a party or is
threatened to be made a party to any proceeding (other than an
action by or in the right of the corporation to procure a
judgment in its favor) by reason of the fact that such person is
or was an employee or other agent of the corporation (the
"Indemnitee Agent") by reason of any action or inaction on the
part of Indemnitee or Indemnitee Agent while an officer, director
or agent or by reason of the fact that Indemnitee or Indemnitee
Agent is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including subject to Section 4.19, attorneys, fees and
any expenses of establishing a right to indemnification pursuant
to this Article IV, or under California law), judgments, fines,
settlements (if such settlement is approved in advance by the
corporation, which approval shall not be unreasonable withheld)
and other amounts actually and reasonably incurred by Indemnitee
or Indemnitee Agent in connection with such proceeding if
Indemnitee or Indemnitee Agent acted in good faith and in a
manner Indemnitee or Indemnitee Agent reasonably believed to be
in or not opposed to the best interests of the corporation and,
in the case of a criminal proceeding, if Indemnitee or Indemnitee
Agent had no reasonable cause to believe Indemnitee's or
Indemnitee Agent's conduct was unlawful. The termination of any
proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contenders or its equivalent shall not, of itself,
create a presumption that Indemnitee or Indemnitee Agent did not
act in good faith and in a manner which Indemnitee or Indemnitee
Agent reasonably believed to be in or not opposed to the best
interests of the corporation, or with respect to any criminal
proceedings, would not create a presumption that Indemnitee or
Indemnitee Agent had reasonable cause to believe that
Indemnitee's or Indemnitee Agent's conduct was unlawful.
4.2. Indemnification - Proceedings by or in the Right of the
Corporation. The corporation shall indemnify Indemnitee and may
indemnify Indemnitee Agent if Indemnitee, or Indemnitee Agent, as
the case may be, was or is a party or is threatened to be made a
party to any threatened, pending or completed action by or in the
right of the corporation or any subsidiary of the corporation to
procure a judgment in its favor by reason of the fact that
Indemnitee or Indemnitee Agent is or was a director, officer,
employee or other agent of the corporation, or any subsidiary of
the corporation, by reason of any action or inaction on the part
of Indemnitee or Indemnitee Agent while an officer, director or
agent or by reason of the fact that Indemnitee or Indemnitee
Agent is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including subject to Section 4.19, attorneys, fees and
any expenses of establishing a right to indemnification pursuant
to this Article IV or under California law) and, to the fullest
extent permitted by law, amounts paid in settlement, in each case
to the extent actually and reasonably incurred by Indemnitee or
Indemnitee Agent in connection with the defense or settlement of
the proceeding if Indemnitee or Indemnitee Agent acted in good
faith and in a manner Indemnitee or Indemnitee Agent believed to
be in or not opposed to the best interests of the corporation and
its shareholders, except that no indemnification shall be made
with respect to any claim, issue or matter to which Indemnitee
(or Indemnitee Agent) shall have been adjudged to have been
liable to the corporation in the performance of Indemnitee's or
Indemnitee Agent's duty to the corporation and its shareholders,
unless and only to the extent that the court in which such
proceeding is or was pending shall determine upon application
that, in view of all the circumstances of the case, Indemnitee
(or Indemnitee Agent) is fairly and reasonably entitled to
indemnity for expenses and then only to the extent that the court
shall determine.
4.3. Successful Defense on Merits. To the extent that Indemnitee
(or Indemnitee Agent) without limitation has been successful on
the merits in defense of any proceeding referred to in Sections
4.1 or 4.2 or in defense of any claim, issue or matter therein,
the corporation shall indemnify Indemnitee (or Indemnitee Agent)
against expenses (including attorneys, fees) actually and
reasonably incurred by Indemnitee or (Indemnitee Agent) in
connection therewith.
4.4. Certain Terms Defined. For purposes of this Article IV,
references to "other enterprises" shall include employee benefit
plans, references to "fines" shall include any excise taxes
assessed on Indemnitee or Indemnitee Agent with respect to an
employee benefit plan, and references to "proceeding" shall
include any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or
investigative. References to "corporation" include all
constituent corporations absorbed in a consolidation or merger as
well as the resulting or surviving corporation, so that any
person who is or was a director, officer, employee, or other
agent of such a constituent corporation or who, being or having
been such a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust or other
enterprise shall stand in the same position under the provisions
of this Article IV with respect to the resulting or surviving
corporation as such person would if he or she had served the
resulting or surviving corporation in the same capacity.
4.5. Advancement of Expenses. The corporation shall advance all
expenses incurred by Indemnitee and may advance all or any
expenses incurred by Indemnitee Agent in connection with the
investigation, defense, settlement (excluding amounts actually
paid in settlement of any action, suit or proceeding) or appeal
of any civil or criminal action, suit or proceeding referenced in
Sections 4.1 or 4.2. Indemnitee or Indemnitee Agent hereby
undertakes to repay such amounts advanced only if, and to the
extent that, it shall be determined ultimately that Indemnitee or
Indemnitee Agent is not entitled to be indemnified by the
corporation as authorized hereby. The advances to be made
hereunder shall be paid by the corporation (i) to Indemnitee
within twenty (20) days following delivery of a written request
therefor by Indemnitee to the corporation; and (ii) to Indemnitee
Agent within twenty (20) days following the later of a written
request therefor by Indemnitee Agent to the corporation and
determination by the corporation to advance expenses to
Indemnitee Agent pursuant to the corporation's discretionary
authority hereunder.
4.6. Notice of Claim. Indemnitee shall, as a condition precedent
to his or her right to be indemnified under this Article IV, and
Indemnitee Agent shall, as a condition precedent to his or her
ability to be indemnified under this Article IV, give the
corporation notice in writing as soon as practicable of any claim
made against Indemnitee or Indemnitee Agent, as the case may be,
for which indemnification will or could be sought under this
Article IV. Notice to the corporation shall be directed to the
secretary of the corporation at the principal executive office of
the corporation (or such other address as the corporation shall
designate in writing to Indemnitee) . In addition, Indemnitee or
Indemnitee Agent shall give the corporation such information and
cooperation as it may reasonably require and as shall be within
Indemnitee's or Indemnitee Agent's power.
4.7. Enforcement Rights. Any indemnification provided for in
Sections 4.1, 4.2 or 4.3 shall be made no later than sixty (60
days after receipt of the written request of Indemnitee. If a
claim or request under this Article IV, under any statute, or
under any provision of the corporation's articles of
incorporation providing for indemnification is not paid by the
corporation, or on its behalf, within sixty (60) days after
written request for payment thereof has been received by the
corporation, Indemnitee may, but need not, at any time thereafter
bring suit against the corporation to recover the unpaid amount
of the claim or request, and subject to Section 4.19, Indemnitee
shall also be entitled to be paid for the expenses (including
attorneys' fees) of bringing such action. It shall be a defense
to any such action (other than an action brought to enforce a
claim for expenses incurred in connection with any action, suit
or proceeding in advance of its final disposition) that
Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the corporation to indemnify
Indemnitee for the amount claimed, but the burden of proving such
defense shall be on the corporation, and Indemnitee shall be
entitled to receive interim payments of expenses pursuant to
Section 4.5, unless and until such defense may be finally
adjudicated by court order or judgment for which no further right
of appeal exists. The parties hereto intend that if the
corporation contests Indemnitee's right to indemnification, the
question of Indemnitee's right to indemnification shall be a
decision for the court, and no presumption regarding whether the
applicable standard has been met will arise based on any
determination or lack of determination of such by the corporation
(including its Board or any subgroup thereof, independent legal
counsel or its shareholders). The Board may, in its discretion,
provide by resolution for similar or identical enforcement rights
for any Indemnitee Agent.
4.8. Assumption of Defense. In the event the corporation shall
be obligated to pay the expenses of any proceeding against the
Indemnitee (or Indemnitee Agent), the corporation, if
appropriate, shall be entitled to assume the defense of such
proceeding with counsel approved by Indemnitee (or Indemnitee
Agent), which approval shall not be unreasonably withheld, upon
the delivery to Indemnitee (or Indemnitee Agent) of written
notice of its election so to do. After delivery of such notice,
approval of such counsel by Indemnitee (or Indemnitee Agent) and
the retention of such counsel by the corporation, the corporation
will not be liable to Indemnitee (or Indemnitee Agent) under this
Article IV for any fees of counsel subsequently incurred by
Indemnitee (or Indemnitee Agent) with respect to the same
proceeding, unless (i) the- employment of counsel by Indemnitee
(or Indemnitee Agent) is authorized by the corporation, (ii)
Indemnitee (or Indemnitee Agent) shall have reasonably concluded
that there may be conflict of interest of such counsel retained
by the corporation between the corporation and Indemnitee (or
Indemnitee Agent) in the conduct of such defense, or (iii) the
corporation ceases or terminates the employment of such counsel
with respect to the defense of such proceeding, in any of which
events then the fees and expenses of Indemnitee's (or Indemnitee
Agent's) counsel shall be at the expense of the corporation. At
all times, Indemnitee (or Indemnitee Agent) shall have the right
to employ other counsel in any such proceeding at Indemnitee's
(or Indemnitee Agent's) expense.
4.9. Approval of Expenses. No expenses for which indemnity shall
be sought under this Article IV, other than those in respect of
judgments and verdicts actually rendered, shall be incurred
without the prior consent of the corporation, which consent shall
not be unreasonably withheld.
4.10. Subrogation. In the event of payment under this Article
IV, the corporation shall be subrogated to the extent of such
payment to all of the rights of recovery of the Indemnitee (or
Indemnitee Agent) , who shall do all things that may be necessary
to secure such rights, including the execution of such documents
necessary to enable the corporation effectively to bring suit to
enforce such rights.
4.11. Exceptions. Notwithstanding any other provision herein to
the contrary, the corporation shall not be obligated pursuant to
this Article IV:
(1) Excluded Acts. To indemnify Indemnitee (i) as to
circumstances in which indemnity is expressly prohibited pursuant
to California law, or (ii) for any acts or omissions or
transactions from which a director may not be relieved of
liability pursuant to California law; or
(2) Claims Initiated by Indemnitee. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims
initiated or brought voluntarily by Indemnitee and not by way of
defense, except with respect to proceedings brought to establish
or enforce a right to indemnification under this Article IV, or
any other statute or law or as otherwise required under the
California Corporations Code, but such indemnification or
advancement of expenses may be provided by the corporation in
specific cases if the Board has approved the initiation or
bringing of such suit; or
(3) Lack of Good Faith. To indemnify Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceedings
instituted by Indemnitee to enforce or interpret this Article IV,
if a court of competent jurisdiction determines that such
proceeding was not made in good faith or was frivolous; or
(4) Insured Claims. To indemnify Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited
to, judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) which have been paid directly to
Indemnitee by an insurance carrier under a policy of officers,
and directors' liability insurance maintained by the corporation;
or
(5) Claims Under Section 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and
sale by Indemnitee of securities in violation of Section 16(b) of
the Securities Exchange Act of 1934, as amended, or any similar
successor statute.
4.12. Partial Indemnification. If Indemnitee is entitled under
any provision of this Article IV to indemnification by the
corporation for some or a portion of the expenses, judgments,
fines or penalties actually or reasonably incurred by the
Indemnitee in the investigation, defense, appeal or settlement of
any civil or criminal action, suit or proceeding, but not,
however, for the total amount thereof ' the corporation shall
nevertheless indemnify Indemnitee for the portion of such
expenses, judgments, fines or penalties to which Indemnitee is
entitled.
4.13. Coverage. This Article IV shall, to the extent permitted
by law, apply to acts or omissions of (i) Indemnitee which
occurred prior to the adoption of this Article IV if Indemnitee
was a director or officer of the corporation or was serving at
the request of the corporation as a director or officer of
another corporation, partnership, joint venture, trust or other
enterprise, at the time such act or omission occurred; and (ii)
Indemnitee Agent which occurred prior to the adoption of this
Article IV if Indemnitee Agent was an employee or other agent of
the corporation or was serving at the request of the corporation
as an employee or agent of another corporation, partnership,
joint venture, trust or other enterprise at the time such act or
omission occurred. All rights to indemnification under this
Article IV shall be deemed to be provided by a contract between
the corporation and the Indemnitee in which the corporation
hereby agrees to indemnify Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is
not specifically authorized by the corporation's articles of
incorporation, these bylaws or by statute. Any repeal or
modification of these bylaws, the California Corporations Code or
any other applicable law shall not affect any rights or
obligations then existing under this Article IV. The provisions
of this Article IV shall continue as the Indemnitee and
Indemnitee Agent for any action taken or not taken while serving
in an indemnified capacity even though the Indemnitee or
Indemnitee Agent may have ceased to serve in such capacity at the
time of any action, suit or other covered proceeding. This
Article IV shall be binding upon the corporation and its
successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee Agent and Indemnitee's and Indemnitee
Agent's estate, heirs, legal representatives and assigns.
4.14. Non-Exclusivity. Nothing herein shall be deemed to
diminish or otherwise restrict any rights to which Indemnitee or
Indemnitee Agent may be entitled under the corporation's article
of incorporation, these bylaws, any agreement, any vote of
shareholders or disinterested directors, or under the laws of the
State of California.
4.15. Severability. Nothing in this Article IV is intended to
require or shall be construed as requiring the corporation to do
or fail to do any act in violation of applicable law. If this
Article IV or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify Indemnitee or Indemnitee
Agent to the fullest extent permitted by any applicable portion
of this Article IV that shall not have been invalidated.
4.16. Mutual Acknowledgment. Both the corporation and Indemnitee
acknowledge that in certain instances, federal law or applicable
public policy may prohibit the corporation from indemnifying its
directors and officers under this Article IV or otherwise.
Indemnitee understands and acknowledges that the corporation has
undertaken or may be required in the future to undertake with the
Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a
determination of the corporation's right under public policy to
indemnify Indemnitee.
4.17. Officer and Director Liability Insurance. The corporation
shall, from time to time, make the good faith determination
whether or not it is practicable for the corporation to obtain
and maintain a policy or policies of insurance with reputable
insurance companies providing the officers and directors of the
corporation with coverage for losses from wrongful acts, or to
ensure the corporation's performance of its indemnification
obligations under this Article IV. Among other considerations,
the corporation will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage.
Notwithstanding the foregoing, the corporation shall have no
obligation to obtain or maintain such insurance if the
corporation determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, if the
coverage provided by such insurance is limited by exclusions so
as to provide an insufficient benefit, or if Indemnitee is
covered by similar insurance maintained by a subsidiary or parent
of the corporation.
4.18. Notice to Insurance. If, at the time of the receipt of a
notice of a claim pursuant to Section 4.6, the corporation has
director and officer liability insurance in effect, the
corporation shall give prompt notice of the commencement of such
proceeding to the insurers in accordance with the procedures set
forth in the respective policies. The corporation shall
thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable
as a result of such proceeding in accordance with the terms of
such policies.
4.19. Attorneys' Fees. In the event that any action is
instituted by Indemnitee under this Article IV to enforce or
interpret any of the terms hereof, Indemnitee shall be entitled
to be paid all court costs and expenses, including reasonable
attorneys' fees, incurred by Indemnitee with respect to such
action, unless as a part of such action, the court of competent
jurisdiction determines that the action was not instituted in
good faith or was frivolous. In the event of an action
instituted by or in the name of the corporation under this
Article IV, or to enforce or interpret any of the terms of this
Article IV, Indemnitee shall be entitled to be paid all court
costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to
Indemnitee's counterclaims and cross-claims made in such action)
, unless as a part of such action the court determines that
Indemnitee's defenses to such action were not made in good faith
or were frivolous. The Board may, in its discretion, provide by
resolution for payment of such attorneys' fees to any Indemnitee
Agent.
4.20. Notice. All notices, requests, demands and other
communications under this Article IV shall be in writing and
shall be deemed duly given (i) if delivered by hand and receipted
for by the addressee, on the date of such receipt, or (ii) if
mailed by domestic certified or registered mail with postage
prepaid, on the third (3rd) business day after the date
postmarked.
ARTICLE V
5. Officers.
5.1. Officers. The officers of the Corporation shall be a
President, a Secretary and a Chief Financial Officer. The
Corporation may also have, at the discretion of the Board, one or
more additional Vice-Presidents, one or more assistant
secretaries, one or more assistant financial officers, and such
other officers as may be appointed in accordance with the
provisions of Section 5.3.. Any one person may hold two or more
offices.
5.2. Election. The officers of the Corporation, except such
officers as may be appointed in accordance with the provisions of
Section 5.3 or Section 5.5, shall be chosen annually by the
Board, and each shall hold his office until he shall resign or
shall be removed or otherwise disqualified to serve, or his
successor shall be elected and qualified.
5.3. Subordinate Officers, Etc. The Board may appoint, and may
empower the President to appoint, such other officers as the
business of the Corporation may require, each of whom shall hold
office, for such period, have such authority and perform such
duties as are provided in the Bylaws or as the Board may from
time to time determine.
5.4. Removal and Resignation. Any officer may be removed, either
with or without cause, by the Board, at any regular or special
meeting thereof, or, except in case of an officer chosen by the
Board, by any officer upon whom such power of removal may be
conferred by the Board (subject, in each case, to the rights, if
any, of an officer under any contract of employment).
Any officer may resign at any time by giving written notice to
the Board or to the President, or the Secretary of the
Corporation, without prejudice, however, to the rights, if any,
of the Corporation under any contract to which such officer is a
party. Any such resignation shall take effect at the date of the
receipt of such notice or at any later time specified therein;
and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
5.5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall
be filled in the manner prescribed in the Bylaws for regular
appointments to such office.
5.6. Chairman of the Board. The Board may, in its discretion,
elect a Chairman of the Board, who, unless otherwise determined
by the Board, shall, if present, preside at all meetings of the
Board and exercise and perform such other powers and duties as
may be from time to time assigned to him by the Board or
prescribed by the Bylaws.
5.7. President. Subject to the supervisory powers, if any, as
may be given by the Board to the Chairman of the Board, if there
be such an officer, the President shall be the Chief Executive
Officer of the Corporation and shall, subject to the control of
the Board, have general supervision, direction and control of the
business of the Corporation. He shall preside at all meetings of
the shareholders and, in the absence of the Chairman of the
Board, or if there be none, at all meetings of the Board. He
shall be ex-officio a member of all the standing committees,
including the executive committee, if any, and shall have the
general powers, and duties of management usually vested in the
office of president of a corporation, and shall have such other
powers and duties as may be prescribed by the Board or the
Bylaws.
5.8. Vice-Presidents. In the absence or disability of the
President, the Vice-Presidents in order of their rank as fixed by
the Board or, if not ranked, the Vice-President designated by the
Board, or if there has been no such designation, the Vice-
President designated by the President, shall perform all the
duties of the President, and when so acting shall have all the
powers of, and subject to all the restrictions upon, the
President. The Vice-Presidents shall have such other powers and
perform such other duties as from time to time may be prescribed
for them respectively by the Board or the Bylaws or the
President.
5.9. Secretary. The Secretary shall record or cause to be
recorded, and shall keep or cause to be kept, at the Principal
Executive office and such other place as the Board may order, a
book of minutes of actions taken at all meetings of directors and
shareholders, with the time and place of holding, whether regular
or special, and, if special, how authorized, the notice thereof
given, the names of those present at directors' meetings, the
number of shares present or represented at shareholders'
meetings, and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the Principal
Executive Office or at the office of the Corporation's transfer
agent, a share register, or a duplicate share register, showing
the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of
certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause, to be given, notice of all
the meetings of the shareholders and of the Board required by the
Bylaws or by law to be given, and he shall keep the seal of the
Corporation in safe custody, and shall have such other powers and
perform such other duties as may be prescribed by the Board or by
the Bylaws. If the Secretary refuses or fails to give notice of
any meeting lawfully called, any other officer of the Corporation
may give notice of such meeting.
The Assistant Secretary, or if there be more than one, any
Assistant Secretary, may perform any or all of the duties and
exercise any or all of the powers of the Secretary unless
prohibited from doing so by the Board, the President or the
Secretary, and shall have such other powers and perform any
others duties as are prescribed for him by the Board, the
President, or the Secretary.
5.10. Chief Financial Officer. The Chief Financial officer of
the Corporation shall keep and maintain, or cause to be kept and
maintained, adequate and correct accounts of the properties and
business transactions of the Corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses,
capital, surplus and shares. Any surplus, including earned
surplus, paid-in surplus and surplus arising from a reduction of
stated capital, shall be classified according to source and shown
in a separate account. The books of account shall at all
reasonable times be open to inspection by any director.
The Chief Financial officer shall deposit all moneys and other
valuables in the name and to the credit of the Corporation with
such depositories as may be designated by the Board. He shall
disburse the funds of the Corporation as may be ordered by the
Board, shall render to the President and directors, whenever they
request it, an account of all of his transactions as Chief
Financial Officer and of the financial condition of the
Corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board or the Bylaws.
The Assistant Financial Officer, or if there be more than one,
any Assistant Financial Officer, may perform any or all of the
duties and exercise any or all of the powers of the Chief
Financial Officer unless prohibited from doing so by the Board,
the President or the Chief Financial Officer, and shall have such
other powers and perform such other duties as are prescribed for
him by the Board, the President or the Chief Financial Officer.
ARTICLE VI
6. Miscellaneous.
6.1. Record Date. The Board may fix a time in the future as a
record date for the determination of the shareholders entitled to
notice of and to vote at any meeting of shareholders or entitled
to give consent to corporate action in writing without a meeting,
to receive any report, to receive any dividend or distribution,
or any allotment of rights, or to exercise rights in respect to
any change, conversion, exchange of shares or any other lawful
action. The record date so fixed shall be not more than sixty
(60) days nor less than ten (10) days prior to the date of any
meeting, nor more than sixty (60) days prior to any other event
for the purposes of which it is fixed. When a record date is so
fixed, only shareholders of record at the close of business on
that date are entitled to notice of and to vote at any such
meeting, to give consent without a meeting, to receive any
report, to receive a dividend, distribution, or allotment of
rights, or to exercise the rights, as the case may be,
notwithstanding any transfer of any shares on the books of the
Corporation after the record date, except as otherwise provided
in the Articles of Incorporation or Bylaws.
6.2. Inspection of Corporate Records. The accounting books and
records, the record of shareholders, and minutes of proceedings
of the shareholders and the Board and committees of the Board of
this Corporation and any subsidiary of this Corporation shall be
open to inspection upon the written demand on the Corporation of
any shareholder (or holder of a voting trust certificate) holding
at least 5% in the aggregate of outstanding voting shares at any
reasonable time during usual business hours, for a purpose
reasonably related to such holder's interests as a shareholder or
as the holder of such voting trust certificate. Such inspection
by a shareholder (or holder of a voting trust certificate) may be
made in person or by agent or attorney, and the right of
inspection includes the right to copy and make extracts.
A shareholder or shareholders holding at least five percent (5%)
in the aggregate of the outstanding voting shares of the
Corporation or who hold at least one percent (1%) of such voting
shares and have filed a Schedule 14B with the United States
Securities and Exchange Commission relating to the election of
directors of the Corporation shall have (in person, or by agent
or attorney) the right to inspect and copy the record of
shareholders, names and addresses and shareholdings during usual
business hours upon five (5) business days prior written demand
upon the Corporation and to obtain from the transfer agent for
the Corporation, upon written demand and upon the tender of its
usual charges, a list of the shareholders, names and addresses,
who are entitled to vote for the election of directors, and their
shareholdings, as of the most recent record date for which it has
been compiled or as of a date specified by the shareholder
subsequent to the date of demand. The list shall be made
available on or before the later of five (5) business days after
the demand is received or the date specified therein as the date
as of which the list is to be compiled.
Every director shall have the absolute right at any reasonable
time to inspect and copy all books, records and documents of
every kind and to inspect the physical properties of the
Corporation. Such inspection by a director may be made in person
or by agent or attorney and the right of inspection includes the
right to copy and make extracts.
6.3. Checks, Drafts, Etc. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness,
issued in the name of or payable to the Corporation, shall be
signed or endorsed by such person or persons and in such manner
as, from time to time, shall be determined by the resolution of
the Board. The Board may authorize one or more officers of the
Corporation to designate the person or persons authorized to sign
such documents and the manner in which such documents shall be
signed.
6.4. Annual and Other Reports. The requirement of Section
1501(a) of the California Corporations Code, that the Board of
the Corporation shall cause an annual report to be sent to the
shareholders is hereby expressly waived. If no annual report for
the last fiscal year has been sent to shareholders, the
Corporation shall, upon the written request of a shareholder made
more than one hundred twenty (120) days after the close of such
fiscal year, deliver or mail to the person making the request
within thirty (30) days thereafter a balance sheet as of the end
of the last fiscal year and an income statement and statement of
changes in financial position for such fiscal year, accompanied
by any report thereon of independent accountants or, if there is
no such report, the certificate of an authorized officer of the
Corporation that such statements were prepared without audit from
the books and records of the Corporation.
A shareholder or shareholders holding at least five percent (5%)
of the outstanding shares of any class of the Corporation may
make a written request to the Corporation for an income statement
of the Corporation for the three-month, six-month or nine-month
period of the current fiscal year ended more than thirty (30)
days prior to the date of the request and a balance sheet of the
Corporation as of the end of such period and, in addition, if no
annual report for the last fiscal year has been sent to
shareholders and one is required pursuant to this section, the
annual report for the last fiscal year. The Corporation shall
use its best efforts to deliver or mail the statements to the
person making the request within thirty (30) days thereafter. A
copy of any such statements shall be kept on file in the
Principal Executive Office of the Corporation for twelve (12)
months and they shall be exhibited at all reasonable times to any
shareholder demanding an examination of them or a copy shall be
mailed to such shareholder.
The quarterly income statements and balance sheets referred to in
this section shall be accompanied by the report thereon, if any,
of any independent accountants engaged by the Corporation or the
certificate of an authorized officer of the Corporation that such
financial statements were prepared without audit from the books
and records of the Corporation.
Unless otherwise determined by the Board or the Chief Financial
officer, the Chief Financial Officer and any assistant financial
officer are each authorized officers of the Corporation to
execute the certificate that the annual report and quarterly
income statements and balance sheets referred to in this section
were prepared without audit from the books and records of the
Corporation.
Any report sent to the shareholders shall be given personally or
by first-class mail or other means of written communication,
charges prepaid, addressed to such shareholder at the address of
such shareholder appearing on the books of the Corporation or
given by such shareholder to the Corporation for the purpose of
notice or set forth in the written request of the shareholder as
provided in this section. If any report addressed to the
shareholder at the address of such shareholder appearing on the
books of the Corporation is returned to the Corporation by the
United States Postal Service marked to indicate that the United
States Postal Service is unable to deliver the report to the
shareholder at such address, all future reports shall be deemed
to have been duly given without further mailing if the same shall
be available for the shareholder upon written demand of the
shareholder at the Principal Executive Office of the Corporation
for a period of one (1) year from the date of the giving of the
report to all other shareholders. If no address appears on the
books of the Corporation or is given by the shareholder to the
Corporation for the purpose of notice or is set forth in the
written request of the shareholder as provided in this section,
such report shall be deemed to have been given to such
shareholder if sent by mail or other means of written
communication addressed to the place where the Principal
Executive office of the Corporation is located, or if published
at least once in a newspaper of general circulation in the county
in which the Principal Executive Office is located. Any such
report shall be deemed to have been given at the time when
delivered personally or deposited in the mail or sent by other
means of written communication. An affidavit of mailing of any
such report in accordance with the foregoing provisions, executed
by the Secretary, Assistant Secretary or any transfer agent of
the Corporation shall be prima facie evidence of the giving of
the report.
6.5. Contracts, Etc., How Executed. The Board, except as in
these Bylaws otherwise provided, may authorize any officer or
officers, agent or agents, to enter into any contract or execute
any instrument in the name of and on behalf of the Corporation,
and such authority may be general or confined to specific
instances; and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit
or to render it liable for any purpose or to any amount.
6.6. Certificate for Shares. Every holder of shares in the
Corporation shall be entitled to have a certificate signed in the
name of the Corporation by the Chairman or Vice-Chairman of the
Board or the President or a Vice-President and by the Chief
Financial Officer or an assistant financial officer or the
Secretary or any Assistant Secretary, certifying the number of
shares and the class or series of shares owned by the
shareholder. Any of the signatures on the certificate may be
facsimile, provided that in such event at least one signature,
including that of either officer or the Corporation's registrar
or transfer agent, if any, shall be manually signed (wet
signature). In case 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 such person were an
officer, transfer agent or registrar at the date of issue.
Any such certificate shall also contain such legend or other
statement as may be required by Section 418 of the California
Corporations Code, the Corporate Securities Law of 1968, the
federal securities laws, and any agreement between the
Corporation and the issuee thereof, and may contain such legend
or other statement as may be required by any other applicable law
or regulation or agreement.
Certificates for shares may be issued prior to full payment under
such restrictions and for such purposes as the Board or the
Bylaws may provide; provided; however, that any such certificate
so issued prior to full payment shall state on the face thereof
the amount remaining unpaid and the terms of payment thereof.
No new certificate for shares shall be issued in lieu of an old
certificate unless the latter is surrendered and canceled at the
same time; provided, however, that a new certificate will be
issued without the surrender and cancellation of the old
certificate if (1) the old certificate is lost, apparently
destroyed or wrongfully taken; (2) the request for the issuance
of the new certificate is made within a reasonable time after the
owner of the old certificate has notice of its loss, destruction,
or theft; (3) the request for the issuance of a new certificate
is made prior to the receipt of notice by the Corporation that
the old certificate has been acquired by a bona fide purchaser;
(4) the owner of the old certificate files a sufficient indemnity
bond with or provides other adequate security to the Corporation,
and (5) the owner satisfies any other reasonable requirements
imposed by the Corporation. In the event of the issuance of a
new certificate, the rights and liabilities of the Corporation,
and of the holders of the old and new certificates, shall be
governed by the provisions of Sections 8104 and 8405 of the
California Commercial Code.
6.7. Representation of Shares of Other Corporations. Unless the
Board shall otherwise determine, the Chairman of the Board, the
President or the Secretary or any Assistant Secretary of this
Corporation are authorized to vote, represent and exercise on
behalf of this Corporation all rights incident to any and all
shares of any other corporation or corporations standing in the
name of this Corporation. The authority herein granted to said
officers to vote or represent on behalf of this Corporation any
and all shares held by this Corporation in any other corporation
or corporations may be exercised either by such officers in
person or by any other person authorized so to do by proxy or
power of attorney duly executed by said officers.
6.8. Inspection of Bylaws. The Corporation shall keep in its
Principal Executive Office in California, or if its Principal
Executive Office is not in California, then at its principal
business office in California (or otherwise provide upon written
request of any shareholder) the original or a copy of the Bylaws
as amended or otherwise altered to date, certified by the
Secretary, which shall be open to inspection by the shareholders
at all reasonable times during office hours.
6.9. Seal. The Corporation shall have a common seal, and shall
have inscribed thereon the name of the Corporation, the date of
its incorporation, and the words "INCORPORATED" and "CALIFORNIA."
6.10. Construction and Definitions. Unless the context otherwise
requires, the general provisions, rules of construction and
definitions contained in the California Corporations Code shall
govern the construction of these Bylaws. Without limiting the
generality of the foregoing, the masculine gender includes the
feminine and neuter, the singular number includes the plural and
the plural number includes the singular, and the term "person"
includes a corporation as well as a natural person.
ARTICLE VII
7. Amendments.
7.1. Power of Shareholders. New Bylaws may be adopted or these
Bylaws may be amended or repealed by the affirmative vote of a
majority of the outstanding shares entitled to vote, or by the
written assent of shareholders entitled to vote such shares,
except as otherwise provided by law or by the Articles of
Incorporation.
7.2. Power of Directors. Subject to the right of shareholders as
provided in Section 7.1 to adopt, amend or repeal bylaws, bylaws
may be adopted, amended or repealed by the Board provided,
however, that the Board may adopt a bylaw or amendment thereof
changing the authorized number of directors only for the purpose
of fixing the exact number of directors within the limits
specified in the Articles of Incorporation or in Section 3.2 of
these Bylaws.
CERTIFICATE OF SECRETARY
I, the undersigned, do hereby certify:
1. That I am the duly elected and acting Secretary of BRIDGE
TECHNOLOGY, Inc., a California corporation; and
2. That the foregoing Bylaws constitute the Bylaws of said
Corporation as duly adopted by action of the Board of the
Corporation duly taken on August 1, 1997.
IN WITNESS WHEREOF, I have hereunto subscribed my name and
affixed the seal of the Corporation this 1st day of August, 1997.
__________________________________________
Anita Wu
CERTIFICATE OF DETERMINATION OF PREFERENCES
OF BRIDGE TECHNOLOGY, INC.
John T. Gauthier and Anita Wu hereby certify that:
1. They are the duly elected and acting Chairman of the Board
and
Assistant Secretary, respectively, of Bridge Technology, Inc., a
Nevada
corporation (the "Corporation").
2. Pursuant to authority given by the Corporation's Articles of
Incorporation, the Board of Directors of the Corporation at a
meeting of
the Board of Directors at which a quorum was present, held on
April 21,
1997 in Cypress, California, has adopted the following resolution:
WHEREAS, Article IV of the Articles of Incorporation of the
Corporation authorizes on class of shares designated preferred
shares,
comprising 500 shares issuable from time to time (the "Preferred
Stock") ,
and one class of shares designated common shares, comprising
10,000,000
shares issuable from time to time (the "Common Stock"); and
WHEREAS, the Board of Directors of the Corporation is authorized
to fix or
alter the rights, preferences, privileges, and restrictions
granted to or
imposed upon the Preferred Stock until such time as any or all
those
shares have been issued, including but not limited to the dividend
rights,
dividend rate, conversion rights, and voting right; and
WHEREAS, the Corporation has not heretofore issued any of such
Preferred Stock and it is the desire of the Board of Directors of
the
Corporation, pursuant to itsi authority as aforesaid, to fix the
rights,
preferences, restrictions and other matters relating to the
Preferred
Stock and the number of shares of Preferred Stock;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors
does
hereby provide for the issuance of a series of preferred shares of
the
Corporation consisting of 500 shares of $1.00 stated value per
share,
designated as "Preferred Stock" and does hereby fix the rights,
privileges, restrictions and other matters relating to the
Preferred Stock
as follows:
1. Dividend Rights.
The holders of the Preferred Stock shall be entitled to receive
dividends
at the rate of Six Dollars ($6.00) per share per year, payable in
cash
semi-annually. Dividends on the Preferred Stock shall be payable
out of
any funds legally available therefore, prior and in preference to
any
dividend payment with respect to Common Stock. Dividends on the
Preferred
Stock shall be cumulative, so that if dividends required to be
paid on
such stock for any quarter or quarters shall not have been paid,
the
amount of the deficiency shall be paid in full, without interest,
together
with any dividends due for the current quarter, before any
distribution of
any kind shall be paid to the holders of the Common Stock.
2. Voting Rights.
Except as otherwise required by law or provided herein, the Common
Stock
shall have exclusive voting rights and powers, including the
exclusive
right to notice shareholders' meetings. If dividend payments on
the
Preferred Stock are in default for six or more consecutive
quarterly
periods, the Preferred Stock (1) must be given notice of
shareholders'
meetings; and (2) immediately may elect, as a class, the largest
number of
directors constituting a minority of the Board of Directors. In
such
event, the Common Stock will retain only the right to elect, as a
class,
the remaining directors. These voting rights will continue until
all
dividends accrued on the Preferred Stock have been paid. At such
time,
the rights of the Preferred Stock to vote in the election of
directors
shall cease and exclusive voting rights (including the right to
notice of
shareholders, meetings) shall revert to the Common Stock.
However, if
further defaults in the payment of dividends on the Preferred
Stock shall
occur, the voting rights granted to the Preferred Stock under this
provision shall be renewed. If the Preferred Stock acquires voting
rights
under this provison, a special meeting of the shareholders for the
election of directors may be called by any officer or director of
the
Corporation, in accordance with the bylaws. In addition, such a
meeting
must be called immediately by the Secretary upon written request
of the
record holders of at least 25% of the outstanding Preferred Stock.
For
this purpose, any officer or holder of Preferred Stock shall be
granted
access on demand to the Corporation's stock records and,
shareholder
lists.
At any such special meeting (or at any annual meeting held
while the
Preferred Stock has the voting power to elect directors) the
holders of a
majority of the then outstanding shares of Preferred Stock,
present in
person or by proxy, shall constitute a quorum for the election of
directors. The terms of office of all directors of the
Corporation at the
time of such meeting shall immediately terminate upon the election
by the
Preferred Stock at such meeting of the number of directors it is
entitled
to elect under this provision. If the Common Stock fails to elect
the
number of directors to which it is entitled, additional directors
may be
appointed by the directors elected by the Preferred Stock. The
directors
elected or appointed by the Preferred Stock, together with the
directors
elected at such meeting by the Common Stock, if any, shall
constitute the
duly elected Board of Directors of the Corporation. When the
Preferred
Stock is no longer entitled to voting rights under this provision,
the
terms of office of all directors shall immediately terminate upon
the
election of their successors by the Common Stock.
3. Liquidation Preference.
In the event of the liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the holders of the
Preferred
Stock will be entitled to receive out of the assets of the
Corporation,
prior and in preference to any distribution of the assets or
surplus funds
of the Corporation to the holders of the Common Stock by reason of
their
ownership thereof, the amount of One Hundred Dollars ($100.00) per
share
as appropriately adjusted for stock splits, stock dividends,
recapitalizations and similar events) for each share of Preferred
Stock
then held by them, plus all accrued and unpaid cumulative
dividends with
respect thereto, and will not be entitled to receive any portion
of the
remaining assets of the Corporation. If upon the occurrence of
such event
the assets and funds thus distributed among the holders of the
Preferred
Stock are insufficient to permit the payment to such holders of
the whole
preferential amount, then the entire assets and funds of the
Corporation
legally available for distribution to the holders of the Preferred
Stock
and the Common Stock will be distributed ratably among the holders
of the
Preferred Stock, and the holders of the Common Stock shall receive
nothing. After payment has been made to the holders of the
Preferred
Stock of the full amounts to which they are entitled as aforesaid,
any
remaining assets will be distributed ratably to the holders of the
Corporation's Common Stock. The holders of the Preferred Stock
shall not
be entitled to participate in dividends or distributions upon
liquidation
or dissolution of the Corporation, other than their priority
dividends and
priority liquidation distribution as provided herein.
4. Conversion.
The holders of the Preferred Stock shall not be entitled to
convert their
shares to shares of Common Stock except as follows:
(a) Right to Convert. Each share of Preferred Stock may at the
option
of the holder of record be converted into such number of shares of
Common
Stock as is determined under the Conversion Ratio (as defined
below).
(b) Timing of Conversions. The Preferred Stock may be
converted any
time after six months from the original date of Preferred Stock
purchase.
(c) Conversion Ratio. Each share of Preferred Stock may be
converted
into two hundred (200) shares of Common Stock, adjusted as
follows:
(i) Fractional Shares Upon Conversion. No fractional
shares of
Common Stock will be issued upon conversion of Preferred Stock and
any
fractional shares which otherwise result from conversion by a
holder of
all his shares of Preferred Stock (taken together as a group) will
be
redeemed by payment in cash of an amount equal to such fraction by
the
then effective market price per share of Common Stock as promptly
as funds
legally are available therefore.
(ii) Adjustment for Combination or Consolidations of Common
Stock.
In the event the Corporation at any time or from time to time
after the
effective date of the initial sale of the Preferred Stock
(hereafter
referred to as the "Original Issue Date") effects a subdivision or
combination of its outstanding Common Stock into a greater or
lesser
number of shares without a proportionate and corresponding
subdivision or
combination of its outstanding Pref erred Stock, then the existing
conversion ratio for the Preferred Stock will be increased or
decreased
proportionately.
(iii) Adjustments for Dividends, Distributions and Common
Stock
Equivalents. In the event the Corporation at any time or from
time to
time after the Original Issue Date makes or issues a dividend
payable in
Common Stock to holders of record of its Common Stock, or fixes a
record
date for the determination of holders of Common Stock entitled to
receive
a dividend or other distribution payable in additional shares of
Common
Stock or other securities or rights ("Common Stock Equivalents"),
convertible into or entitling the holder thereof to receive
additional
shares of Common Stock without payment of any consideration by
such holder
for Common Stock Equivalents or the additional shares of Common
Stock,
then and in such event, for the purpose of protecting the holders
of
Preferred Stock from any dilution in connection therewith, the
maximum
number of shares (as set forth in the instrument relating thereto
without
regard to any provisions contained therein for a subsequent
adjustment of
such number) of Common Stock issuable in payment of such dividends
or
distribution or upon conversion or exercise of such Common Stock
Equivalents will be deemed to be issued and outstanding as of the
time of
such issuance or, in the event such a record date has been fixed,
as of
the close of business on such a record date. In each such event
the then
existing conversion ratio for the Preferred Stock will be
increased as of
the time of such issuance or, in the event such a record date has
been
fixed, as of the close of business on such record date, by
multiplying the
conversion ration for the Preferred Stock by a fraction, the
numerator of
which will be the total number of shares of Common Stock issued
and
outstanding immediately prior to the time of such issuance or the
close of
business on such record date plus the number of shares of Common
Stock
issuable in payment of such dividend or Distribution or upon
conversion or
exercise of such Common Stock Equivalents, and the denominator of
which
will be the total number of shares of Common Stock issued and
outstanding
immediately prior to the time of such issuance or the close of
business on
such record date; provided, however, if such record date has been
fixed
and such dividend is not fully paid or if such distribution is not
made on
the date fixed therefore, the conversion ratio for the Preferred
Stock
will be recomputed accordingly as of the close of business on such
record
date and thereafter the conversion ratio for the Preferred Stock
will be
adjusted pursuant to this paragraph 4 (c) (iii) as of the date of
actual
payment of such dividends or distributions.
(d) Mechanics of Conversion. Before any holder of
Preferred Stock will be entitled to convert the same into shares
of Common
Stock, he will surrender the certificate of certificates
therefore, duly
endorsed, at the office of the Corporation or of any transfer
agent for
the Preferred Stock, and he will give written notice to the
Corporation
stating the name or names in which he wishes the certificate or
certificates for shares of Common Stock to be issued. The
Corporation, as
soon as practicable thereafter, will issue and deliver at such
office to
such holder of Preferred Stock or to his nominee or nominees, as
certificate or certificates for the number of shares of Common
Stock to
which he will be entitled as aforesaid. Such conversion will be
deemed to
have been made immediately prior to the close of business on the
date of
the Conversion Event, and the person or persons entitled to
receive the
shares of Common Stock issuable upon conversion will be treated
for all
practical purposes as the record holder or holders of such shares
of
Common Stock.
(e) No Impairment. The Corporation, whether by amendment of
its
Articles of Incorporation, or through any reorganization, transfer
of
assets, merger, dissolution, issue or sale of securities or any
other
voluntary action, will not avoid or seek to avoid the observance
or
performance of any of the terms to be observed hereunder by the
Corporation, but at all times in good faith will assist in the
carry.Lng
out of all such action as may be necessary or appropriate in order
to
protect the conversion rights of the holders of the Preferred
Stock
against impairment.
(f) Reservation of Stock Issuable Upon Conversion. The
Corporation at all times will observe and keep available out of
its
authorized but unissued shares of Common Stock solely for the
purposes of
effecting the conversion of the shares of the Preferred Stock such
number
of its shares of Common Stock as from time to time will be
sufficient to
effect the conversion of all the then outstanding shares of the
Preferred
Stock; and if at any time the number of authorized but unissued
shares of
Common Stock is not sufficient to effect the conversion of all the
then
outstanding shares of the Preferred Stock, in addition to such
other
remedies as may be available to the holders of Preferred Stock for
such
failure, the Corporation will take such actions as, in the opinion
of its
counsel, may be necessary to increase its authorized but unissued
shares
of Common Stock, to such number of shares as will be sufficient
for such
purposes.
5. Covenants.
In addition to any other rights by law, so long as any Preferred
Stock is
outstanding, the Corporation, without first obtaining the
affirmative vote
or written consent of the holders of not less than a majority of
such
outstanding shares of Preferred Stock, will not:
(a) Amend or repeal any provision of, or add any provision to, the
Corporation's Articles of Incorporation or Bylaws or this
certificate of
determination or preferences if such action would increase the
number of
directors or adversely would alter or change the preferences,
rights,
privileges or power of, or the restrictions, provided for the
benefit of
any Preferred Stock, or increase or decrease the number of shares
of
Preferred Stock authorized hereby;
(b) Authorize or issue shares of any class or series or Stock
(other than
the Preferred Stock expressly authorized herein) having any
preference or
priority as to dividends, assets, or other right superior to or on
a
parity with any such preference or priority of the Preferred
Stock, or
authorize or issue shares of stock of any class or any bonds,
debentures,
notes or other obligations convertible into or exchangeable for,
or having
option rights to purchase, any shares of stock of the Corporation
having
any preference or priority as to dividends, assets, or other
rights,
superior to or on a parity with any such preference or priority of
the
Preferred Stock; or
(c) Reclassify any class or series of any Common Stock or any
other
shares of stock hereafter created junior to the Preferred Stock
into
shares having any preference or priorities to dividends, assets,
or
other rights superior to or on a parity with any such preference
or
priority of the Preferred Stock.
RESOLVED FURTHER, that the Chairman of the Board and the Secretary
of the
Corporation hereby are authorized and directed to prepare,
execute,
verify, file and record a certificate of determination or
preferences in
accordance with the foregoing resolutions and the provisions of
Nevada
law. The authorized number of shares of Preferred Stock is 500
none of
which has been issued.
Date: April 21, 1997
_______________________
John T. Gauthier, Chairman
_______________________
Anita Wu, Assistant Secretary
