SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form For Registration of Securities
of Small Business Issuers Under
Section 12(b) or (g) of
the Securities Exchange Act of 1934
NATIONAL VENTURE CAPITAL FUND, INC.
(Exact Name of Small Business Issuer as specified in its charter)
COLORADO 84-1432661
(State or other (IRS Employer File Number)
jurisdiction of
incorporation)
1977 S. Vivian Street
LAKEWOOD, COLORADO 80228
(Address of principal executive offices) (zip code)
(303) 763-5630
(Registrant's telephone number, including area code)
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:
Common Stock, $0.0001 per share par value
DOCUMENTS INCORPORATED BY REFERENCE
Documents incorporated by reference are found in Item 15.
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS.
(a) GENERAL DEVELOPMENT OF BUSINESS
National Venture Capital Fund, Inc. (the "Company" or the
"Registrant"), is a Colorado corporation. The principal business address is
1977 S. Vivian Street, Lakewood, Colorado 80228.
The Company was incorporated under the laws of the State of Colorado on
June 12, 1997. Since inception, the primary activity of the Company has been
directed towards organizational efforts. During this fiscal year, the
Company plans to implement a program to identify potential acquisition
candidates.
As of the date of this Registration Statement, the Company has not
engaged in any preliminary efforts intended to identify possible business
opportunities and has neither conducted negotiations nor entered into a
letter of intent concerning any business opportunity. The Company is a shell
corporation whose principal purpose is to locate and consummate a merger or
acquisition with a private entity. The Company is filing this Form 10SB on a
voluntary basis to become a public, reporting company under the Securities
Act of 1934, as amended. (the "Exchange Act").
The Company has not been subject to any bankruptcy, receivership or
similar proceeding.
(b) NARRATIVE DESCRIPTION OF THE BUSINESS
GENERAL
From inception to the date of this Registration Statement, the Company
has had no activities. During this period, the Company has carried no
inventories or accounts receivable. No independent market surveys have ever
been conducted to determine demand for the Company's products and services,
since the Company has never had any products or services which it has
provided to anyone. During this period, the Company has carried on no
operations and generated no revenues. The Company's fiscal year end is April
30th.
ORGANIZATION
The Company presently comprises one corporation with no subsidiaries or
parent entities and is in the developmental stage.
(c) OPERATIONS
GENERAL
The Company proposes to implement a business plan to investigate and,
if warranted, merge with or acquire the assets or common stock of an entity
actively engaged in business which generates revenues. The Company will
seek opportunities for long-term growth potential as opposed to short-term
earnings.
<PAGE>
As of the date hereof, the Company has no business opportunities under
investigation. None of the Company's officers, directors, promoters or
affiliates have engaged in any preliminary contact or discussions with any
representative of any other company regarding the possibility of an
acquisition or merger between the Company and such other company. Further,
there is no present potential that the Company may acquire or merge with a
business or company in which the Company's promoters, management or their
affiliates or associates directly or indirectly have an ownership interest.
The Company's Board of Directors intends to provide the Company's
shareholders with complete disclosure documentation in the form of a proxy
statement concerning any potential business opportunity and the structure of
the proposed business combination prior to its consummation. While such
disclosure may include audited financial statements of such a target entity,
there is no assurance that such audited financial statements will be
available. The Board of Directors does intend to obtain certain assurances
of value of the target entity's assets prior to consummating such a
transaction, with further assurances that an audited statement would be
provided within sixty days after closing of such a transaction. Closing
documents relative thereto will include representations that the value of
the assets conveyed to or otherwise so transferred will not materially
differ from the representations included in such closing documents, or the
transaction will be voidable.
As a result of its filing of this Form 10SB, the Company has become
subject to the reporting obligations under the Exchange Act. These include
an annual report under cover of Form 10KSB, with audited financial
statements, unaudited quarterly reports, and the requirement proxy
statements in regard to annual shareholder meetings. Any potential
acquisition or merger candidates will be required to meet these same
requirements, including the necessity of audited financial statements. Such
requirements may have the effect of restricting the potential pool of
candidates for merger or acquisition. The Company will voluntarily file
periodic reports in the event that its obligation to file such reports is
suspended under the Exchange Act.
The Registrant has no full-time employees. The Registrant's President
and Secretary-Treasurer have agreed to allocate a portion of their time to
the activities of the Registrant, without compensation. These officers
anticipate that the business plan of the Company can be implemented by their
collectively devoting approximately twenty hours per month to the business
affairs of the Company and, consequently, conflicts of interest may arise
with respect to the limited time commitment of such officers.
The primary attraction of the Registrant as a merger partner or as an
acquisition vehicle will be its status as a public company. Any business
combination or transaction will likely result in a significant issuance of
shares and substantial dilution to present shareholders of the Registrant.
The Company has no present plans to hire a consultant to aid the
Company in any acquisition or merger.
<PAGE>
The Articles of Incorporation of the Company provides that the Company
may indemnify officers and/or directors of the Company for liabilities,
which can include liabilities arising under the securities laws. Therefore,
the assets of the Company could be used or attached to satisfy any
liabilities subject to such indemnification. See Part II, Item 5 below.
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such
investigation warrants, to acquire controlling interest in business
opportunities presented to it by persons or firms who or which desire to
seek the perceived advantages of an Exchange Act registered corporation. The
Company will not restrict its search to any specific business, industry, or
geographical location. The Company may participate in a business venture of
virtually any kind or nature.
The Company will solicit prospective acquisitions based upon informal
contacts or relationships which management has a will develop in the future.
There are no plans to advertise for acquisitions or to hire third party
consultants to facilitate acquisitions. The Company has no way of knowing
how many individuals will be contacted before a potential acquisition may be
finalized. The Company has no plans to do any acquisition with any
associates or affiliates of management, or with management itself.
The Company may seek a business opportunity in the form of firms which
have recently commenced operations, are developing companies in need of
expansion into new products or markets, are seeking to develop a new product
or service or are established, mature businesses. The Company may also offer
a controlling interest to such business opportunity, if the situation
warrants.
In seeking business opportunities, the management decision of the
Company will be based upon the objective of seeking long-term appreciation
in the value of the Company. Current income will only be a minor factor in
such decisions.
It is not anticipated that the Company will be able to participate in
more than one business opportunity. However, Management may, in its sole
discretion, elect to enter into more than one acquisition if it believes
these transactions can be effectuated on terms favorable to the Company.
This lack of diversification will not permit the Company to offset potential
losses from one business opportunity against profits from another and should
be considered a substantial risk to shareholders of the Company.
The analysis of new business opportunities will be undertaken by or
under the supervision of the officers and directors. The Company will have
unrestricted flexibility in seeking, analyzing and participating in business
opportunities. In its efforts, the Company will consider the following,
among other, factors:
<PAGE>
(a) potential for growth, as indicated by new technology, anticipated
market expansion or new products;
(b) competitive position compared to other firms of similar size and
experience within the industry segment, as well as within the
industry as a whole;
(c) strength and diversity of management, either in place or scheduled
for recruitment;
(d) capital requirements and anticipated availability of required
funds to be provided by the target company from operations,
through the sale of additional securities, the formation of joint
ventures or similar arrangements, or from other sources;
(e) the cost of participation by the Company as compared to the
perceived tangible and intangible values and potential;
(f) the extent to which the business opportunity can be advanced;
(g) the accessibility of required management expertise, personnel, raw
materials, services, professional assistance and other required
items; and
(h) such other relevant factors as may arise from time to time,
including investor and market maker, if any, interest.
In applying the foregoing criteria, no one of which is now known to be
controlling, Management will attempt to analyze all relevant factors and
make a determination based upon reasonable investigative measures and
available data. Potentially available business opportunities may occur in
many different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex. Because of the
Company's lack of capital, the Company may not discover or adequately
evaluate adverse facts about the opportunity to be acquired.
The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals
and the selection of a business opportunity may take a substantial amount of
time after the effective date of this Registration Statement.
Prior to making a decision to participate in a business opportunity,
the Company will generally request that it be provided with written
materials regarding the business opportunity and containing such items as:
(i) a description of product, service and company history; (ii) management
resumes; (iii) financial information (including projections and audited
financial statements, if available); (iv) available projections with
related assumptions upon which they are based; (v) an explanation of
proprietary products and services; (vi) evidence of existing patents,
trademarks or service marks or rights thereto; (vii) present and proposed
forms of compensation to management; (viii) a description
<PAGE>
of transactions between the target and its affiliates during relevant
periods; (ix) a description of present and required facilities; (x) an
analysis of risks and competitive conditions; (xi) a financial plan of
operation and estimated capital requirements; and (xii) other information
deemed relevant under the circumstances, including investor and market
makers, but only after the release of public information on the target.
As part of the Company's investigation, officers and directors will
meet personally with management and key personnel, visit and inspect
material facilities, obtain independent analysis or verification of certain
information provided, check references of management and key personnel and
take other reasonable investigative measures to the extent of the Company's
limited financial resources.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Because of general
economic conditions, rapid technological advances being made in some
industries and shortages of available capital, Management believes that
there are numerous firms seeking the perceived benefits of a publicly
registered corporation. Such perceived benefits may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of applicable
statutes), for all shareholders and other factors. Potentially available
business opportunities may occur in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely
difficult and complex. The Company has no present plans to raise any
necessary capital through private placements or public offerings prior to
the location of an acquisition or merger candidate.
(d) MARKETS
The Company's initial marketing plan will be focused completely on
finding an acquisition candidate as discussed above. No efforts toward this
marketing plan have been made as of the date of this Registration Statement.
(e) RAW MATERIALS
The use of raw materials is not now material factor in the Company's
operations at the present time.
(f) CUSTOMERS AND COMPETITION
At the present time, the Company is expected to be an insignificant
participant among the firms which engage in the acquisition of business
opportunities. There are a number of established companies, such as venture
capital and financial concerns, many of which are larger and better
capitalized than the Company and/or have greater personnel resources and
technical expertise. In view of the Company's combined extremely limited
financial resources and limited management
<PAGE>
availability, the Company will continue to be at a significant competitive
disadvantage compared to the Company's competitors.
(g) BACKLOG
At April 30, 1998, the Company had no backlogs.
(h) EMPLOYEES
At as of the date hereof, the Company has no employees. The Company
does not plan to hire employees in the future.
(i) PROPRIETARY INFORMATION
The Company has no proprietary information.
(j) GOVERNMENT REGULATION
The Company is not subject to any material governmental regulation or
approvals.
(k) RESEARCH AND DEVELOPMENT
The Company has never spent any amount in research and development
activities.
(l) ENVIRONMENTAL COMPLIANCE
At the present time, the Company is not subject to any costs for
compliance with any environmental laws.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Results of Operations
The Company has generated no revenues from its operations since
inception. Since the Company has not generated revenues and has never been
in a profitable position, it operates with minimal overhead. The Company's
primary activity will be to seek an acquisition candidate. As of the end of
the reporting period, the Company has concluded no acquisitions and has
spoken with no potential candidates. The attempt to seek an acquisition
candidate or candidates will be the primary focus of the Company's
activities in the coming fiscal year.
<PAGE>
Liquidity and Capital Resources
As of the end of the reporting period, the Company had no cash or cash
equivalents. There was no significant change in working capital during this
fiscal year.
Management feels that the Company has inadequate working capital to
pursue any business opportunities other than seeking an acquisition
candidate. The Company will have minimal capital requirements prior to the
consummation of any acquisition but can pursue an acquisition candidate.
Until a suitable candidate is identified, Mr. Howard C. Cadwell and Ms.
Laurie L. Quam will personally provide the necessary funds for the operation
of the Company, which are expected to be minimal. There is no plan to
reimburse either Mr.Cadwell or Ms. Quam for any advances. The Company does
not intend to pay dividends in the foreseeable future.
ITEM 3. DESCRIPTION OF PROPERTIES
As of April 30, 1998, the Company's business office was located at 1977
S. Vivian Street, Lakewood, Colorado 80228. The Company pays no rent for
this office space, which is occupied by Ms. Laurie L. Quam, an Officer and
Director of the Company. There are no plans to charge the Company for office
space. The Company has no properties.
Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth the number of shares of the Registrant's
$0.0001 par value common stock beneficially owned by (i) each person who, as
of April 30, 1998, was known by the Company to own beneficially more than
five percent (5%) of its common stock; (ii) the individual Directors of the
Registrant and (iii) the Officers and Directors of the Registrant as a
group.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
(1)(2)
<S> <C> <C>
Howard C. Cadwell(3) 8,001,000 39.8%
1977 S. Vivian Street
Lakewood, Colorado 80228.
Laurie L. Quam 8,000,000 39.8%
1977 S. Vivian Street
Lakewood, Colorado 80228.
All Officers and Directors
as a Group 16,001,000 79.6%
(two persons)
</TABLE>
(1) All ownership is beneficial and on record, unless indicated otherwise.
<PAGE>
(2) Beneficial owners listed above have sole voting and investment power
with respect to the shares shown, unless otherwise indicated.
(3) Does not include 1,000 shares owned by Laurie Q. Cadwell, for which Mr.
Cadwell disclaims beneficial ownership.
All of the shareholders of the Company have signed lock up agreements which
will prevent all of the common shares from being sold or transferred, either
in the open market or in a private transaction, until the Company has
consummated a merger or acquisition and is no longer classified as a shell
corporation under applicable federal or state law. The share certificates
will be held by the Company's counsel until such merger or acquisition has
been consummated. Any liquidation of the current shareholders after the
release of the shares from the lock up may have a depressive effect upon the
trading prices of the Company's securities in any future market which may
develop.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Directors and Executive Officers of the Company, their ages and
present positions held in the Company are as follows:
NAME AGE POSITION HELD
Howard C. Cadwell 56 President and Director
Laurie L. Quam 38 Secretary, Treasurer and Director
The Company's Directors will serve in such capacity until the next
annual meeting of the Company's shareholders and until their successors have
been elected and qualified. The officers serve at the discretion of the
Company's Directors. There are no family relationships among the Company's
officers and directors, nor are there any arrangements or understandings
between any of the directors or officers of the Company or any other person
pursuant to which any officer or director was or is to be selected as an
officer or director.
Ms. Cadwell and Ms. Quam should be considered the "parents" or
"promoters" of the Company because of the shareholdings and control
positions held by them in the Company and the fact that each has taken
significant initiative in founding and organizing the business of the
Company.
HOWARD C. CADWELL. Mr. Cadwell has been the President and a Director of
the Company since inception in 1997. He is the founder and owner of Big City
Burrito, a Mexican restaurant in Fort Collins, Colorado. He has been
involved with the Mexican restaurant from 1994 to the present. From 1982
until 1993, he was the owner of Pottery World, a retail pottery store in San
Jose, California. Mr. Cadwell attended the University of Wyoming and
majored in Electrical Engineering.
<PAGE>
LAURIE L. QUAM . Ms. Quam has been Secretary-Treasurer and a Director
of the Company since inception in 1997. She is also the Secretary and a
Director of New World Publishing, Inc., a public company. From 1993 to
1994. she was the owner of Budget Framer, a private business. She attended
Miami Dade Community College in Miami, Florida.
PREVIOUS BLANK CHECK OFFERINGS
Neither Mr. Cadwell nor Ms. Quam have previously participated in any
Blank Check Offerings.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's business office is located at 1977 S. Vivian Street,
Lakewood, Colorado 80228. The Company pays no rent for this office space,
which is occupied by Ms. Quam. There are no plans to charge the Company for
office space. Otherwise, there have been no related party transactions, or
any other transactions or relationships required to be disclosed pursuant to
Item 404 of Regulation S-B.
ITEM 8. LEGAL PROCEEDINGS.
No legal proceedings of a material nature to which the Company is a
party were pending during the reporting period, and the Company knows of no
legal proceedings of a material nature pending or threatened or judgments
entered against any director or officer of the Company in his capacity as
such.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) PRINCIPAL MARKET OR MARKETS
The Company's securities have never been listed for trading on any
market and are not quoted at the present time. At the present time, the
Company does not know where secondary trading will eventually be conducted.
The place of trading, to a large extent, will depend upon the size of the
Company's eventual acquisition. To the extent, however, that trading will be
conducted in the over-the-counter market in the so-called "pink sheets" or
the NASD's "Electronic Bulletin Board," a shareholder may find it more
difficult to dispose of or obtain accurate quotations as to price of the
Company's securities. In addition, The Securities Enforcement and Penny
Stock Reform Act of 1990 requires additional disclosure related to the
market for penny stock and for trades in any stock defined as a penny stock.
<PAGE>
(b) APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK
As of the date hereof, a total of 20,101,000 of shares of the
Company's Common Stock were outstanding and the number of holders of record
of the Company's common stock at that date was forty.
(c) DIVIDENDS
Holders of common stock are entitled to receive such dividends as
may be declared by the Company's Board of Directors. No dividends on the
common stock were paid by the Company during the periods reported herein nor
does the Company anticipate paying dividends in the foreseeable future.
(d) THE SECURITIES ENFORCEMENT AND PENNY STOCK REFORM ACT OF 1990
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure and documentation related to the market for penny
stock and for trades in any stock defined as a penny stock. Unless the
Company can acquire substantial assets and trade at over $5.00 per share on
the bid, it is more likely than not that the Company's securities, for some
period of time, would be defined under that Act as a "penny stock." As a
result, those who trade in the Company's securities may be required to
provide additional information related to their fitness to trade the
Company's shares. These requirements present a substantial burden on any
person or brokerage firm who plans to trade the Company's securities and
would thereby make it unlikely that any liquid trading market would ever
result in the Company's securities while the provisions of this Act might be
applicable to those securities.
(e) BLUE SKY COMPLIANCE
The trading of blank check companies may be restricted by the
securities laws ("Blue Sky" laws) of the several states. Management is aware
that a number of states currently prohibit the unrestricted trading of blank
check companies absent the availability of exemptions, which are in the
discretion of the states' securities administrators. The effect of these
states' laws would be to limit the trading market, if any, for the shares of
the Company and to make resale of shares acquired by investors more
difficult.
The impact of these Blue Sky laws is considered to be minimal since the
Company does not intend to qualify the Company's outstanding securities for
secondary trading in any state until such time as an acquisition or merger
has been consummated.
(f) INVESTMENT COMPANY ACT OF 1940
The Company does not intend to engage in any activities which would
cause it to be classified as an "investment company" under the Investment
Company Act of 1940, as amended.
<PAGE>
However, to the extent that the Company would inadvertently become an
investment company because of its activities, the Company would be subjected
to additional, costly and restrictive regulation.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
The following shareholders acquired their respective shares in the
Company during the Company's initial capitalization in 1997 at par value:
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
<S> <C>
Howard C.Cadwell 8,000,000
Laurie L. Quam 8,000,000
George Lee 1,000,000
John C. Lee 1,000,000
Mel Kupetz 750,000
Patricia L. Lorie 250,000
Richard H. Steinberg 600,000
Daniel C. Steinberg 400,000
David M. Summers 1,000
</TABLE>
The following shareholder acquired his shares in the Company in
April, 1998 at a price of $0.10 per share:
NAME NUMBER OF SHARES
Mark Lawrence 50,000
The following shareholders acquired their shares in the Company in
April, 1998 at a price of $0.50 per share:
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
<S> <C>
Walter T. Grandy, Jr. 4,000
Gang Bong Lee 4,000
Stacy L. Rogers 3,000
Mary S. Grandy 2,000
Douglas W. Gappa 2,000
Alisa M. Levy 2,000
David W. Romek 2,000
Donald B. Fox 2,000
Philip J. Davis 2,000
Pamela S. Davis 2,000
Marc Levy 2,000
Todd Levy 2,000
<PAGE>
Megan Lawrence 2,000
Angie O. Lee 1,500
Jeanne M. Lee 1,500
Howard C. Cadwell 1,000
Laurie Q. Cadwell 1,000
Michael Brunschwig 1,000
Geegee Brunschwig 1,000
Deborah Connelly 1,000
Michael A. Connelly 1,000
Judith Harayda 1,000
Darius Bozorgpour 1,000
Virginia L. Young 1,000
Michael E. Connelly 1,000
Nicole Connelly 1,000
Steven Walker 1,000
Carol L. Lawrence 1,000
Courtney S. Lawrence 1,000
Lynn C. Gelfenbaum 1,000
Linda Jew 600
Wawa C. Jew 200
Carolyn Kuhl 200
Total 50,000
</TABLE>
All of the issued and outstanding shares of the Company's common stock
were issued in accordance with the exemption from registration afforded by
Section 4(2) of the Securities Act of 1933, as amended.
All of the shareholders of the Company have signed lock up agreements
which will prevent all of the common shares from being sold or transferred,
either in the open market or in a private transaction, until the Company has
consummated a merger or acquisition and is no longer classified as a shell
corporation under applicable federal or state law. The share certificates
will be held by the Company's counsel until such merger or acquisition has
been consummated. Any liquidation of the current shareholders after the
release of the shares from the lock up may have a depressive effect upon the
trading prices of the Company's securities in any future market which may
develop.
ITEM 11. DESCRIPTION OF SECURITIES.
The Company is authorized to issue 100,000,000 shares of Common Stock,
par value $0.0001 per share, and 10,000,000 shares of non-voting Preferred
Stock, par value $0.0001 per share. As of April 30, 1998, 20,101,000 shares
of Common Stock were outstanding. As of the same date, no Preferred Stock
was issued or outstanding.
<PAGE>
COMMON STOCK
The holders of Common Stock have one vote per share on all matters
(including election of Directors) without provision for cumulative voting.
Thus, holders of more than 50% of the shares voting for the election of
directors can elect all of the directors, if they choose to do so. The
Common Stock is not redeemable and has no conversion or preemptive rights.
The Common Stock currently outstanding is validly issued, fully paid
and non-assessable. In the event of liquidation of the Company, the holders
of Common Stock will share equally in any balance of the Company's assets
available for distribution to them after satisfaction of creditors and the
holders of the Company's senior securities, whatever they may be. The
Company may pay dividends, in cash or in securities or other property when
and as declared by the Board of Directors from funds legally available
therefor, but has paid no cash dividends on its Common Stock.
PREFERRED STOCK
Under the Articles of Incorporation, the Board of Directors has the
authority to issue non-voting Preferred Stock and to fix and determine its
series, relative rights and preferences to the fullest extent permitted by
the laws of the State of Colorado and such Articles of Incorporation. As of
the date of this Registration Statement, no shares of Preferred Stock are
issued or outstanding. The Board of Directors has no plan to issue any
Preferred Stock in the foreseeable future.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation authorize the Board of
Directors, on behalf of the Company and without shareholder action, to
exercise all of the Company's powers of indemnification to the maximum
extent permitted under the applicable statute. Title 7 of the Colorado
Revised Statutes, 1986 Replacement Volume ("CRS"), as amended, permits the
Company to indemnify its directors, officers, employees, fiduciaries, and
agents as follows:
Section 7-109-102 of CRS permits a corporation to indemnify such
persons for reasonable expenses in defending against liability incurred in
any legal proceeding if:
(a) The person conducted himself or herself in good faith;
(b) The person reasonably believed:
(1) In the case of conduct in an official capacity with the
corporation, that his or her conduct was in the corporation's best
interests; and
(2) In all other cases, that his or her conduct was at least not
opposed to the corporation's best interests; and
<PAGE>
(c) In the case of any criminal proceeding, the person had no
reasonable cause to believe that his or her conduct was unlawful.
A corporation may not indemnify such person under this Section 7-109-102 of
CRS:
(a) In connection with a proceeding by or in the right of the
corporation in which such person was adjudged liable to the corporation; or
(b) In connection with any other proceeding charging that such person
derived an improper benefit, whether or not involving action in an official
capacity, in which proceeding such person was adjudged liable on the basis
that he or she derived an improper personal benefit.
Unless limited by the Articles of Incorporation, and there are not such
limitations with respect to the Company, Section 7-109-103 of CRS requires
that the corporation shall indemnify such a person against reasonable
expenses who was wholly successful, on the merits or otherwise, in the
defense of any proceeding to which the person was a party because of his
status with the corporation.
Under Section 7-109-104 of CRS, the corporation may pay reasonable fees
in advance of final disposition of the proceeding if:
(a) Such person furnishes to the corporation a written affirmation of
the such person's good faith belief that he or she has met the Standard of
Conduct described in Section 7-109-102 of CRS;
(b) Such person furnishes the corporation a written undertaking,
executed personally or on person's behalf, to repay the advance if it is
ultimately determined that he or she did not meet the Standard of Conduct in
Section 7-109-102 of CRS; and
(c) A determination is made that the facts then known to those making
the determination would not preclude indemnification.
Under Section 7-109-106 of CRS, a corporation may not indemnify such
person, including advanced payments, unless authorized in the specific case
after a determination has been made that indemnification of such person is
permissible in the circumstances because he met the Standard of Conduct
under Section 7-109-102 of CRS and such person has made the specific
affirmation and undertaking required under the statute. The required
determinations are to be made by a majority vote of a quorum of the Board of
Directors, utilizing only directors who are not parties to the proceeding.
If a quorum cannot be obtained, the determination can be made by a majority
vote of a committee of the Board, which consists of at least two directors
who are not parties to the proceeding. If neither a quorum of the Board nor
a committee of the Board can be established,
then the determination can be made either by the Shareholders or by
independent legal counsel selected by majority vote of the Board of
Directors.
<PAGE>
The corporation is required by Section 7-109-110 of CRS to notify the
shareholders in writing of any indemnification of a director with or before
notice of the next shareholders' meeting.
Under Section 7-109-105 of CRS, such person may apply to any court of
competent jurisdiction for a determination that such person is entitled
under the statute to be indemnified from reasonable expenses.
Under Section 7-107(1)(c) of CRS, a corporation may also indemnify and
advance expenses to an officer, employee, fiduciary, or agent who is not a
director to a greater extent than the foregoing indemnification provisions,
if not inconsistent with public policy, and if provided for in the
corporation's bylaw, general or specific action of the Board of Directors,
or shareholders, or contract.
Section 7-109-108 of CRS permits the corporation to purchase and
maintain insurance to pay for any indemnification of reasonable expenses as
discussed herein.
The indemnification discussed herein shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under the
Articles of Incorporation, any Bylaw, agreement, vote of shareholders, or
disinterested directors, or otherwise, and any procedure provided for by any
of the foregoing, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of heirs, executors, and administrators of such a
person.
Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expense incurred or paid by a director, officer, or
controlling person of the registrant in the successful defense of any
action, suit, or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
ITEM 13. FINANCIAL STATEMENTS.
For financial information, please see the financial statements
included at Item 15 and hereby incorporated by this reference and made a
part hereof.
<PAGE>
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company did not have any disagreements on accounting and financial
disclosures with its accounting firm during the reporting period.
ITEM 15. FINANCIAL STATEMENT AND EXHIBITS.
The following financial information is filed as part of this
report:
(1) FINANCIAL STATEMENTS
(2) SCHEDULES
The financial statements schedules listed in the
accompanying index to financial statements are filed as
a part of this annual report.
(3) EXHIBITS
The exhibits listed on the accompanying index to
financial statements are filed as part of this annual
report.
<PAGE>
<PAGE>
NATIONAL VENTURE CAPITAL FUND, INC.
(A Development Stage Company)
AUDIT REPORT
From June 12, 1997 (Inception) through
April 30, 1998
<PAGE>
Janet Loss, C.P.A, P.C.
Certified Public Accountant
3525 South Tamarac Drive, Suite 120
Denver, Colorado 80237
NATIONAL VENTURE CAPITAL FUND, INC.
(A Development Stage Company)
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
ITEM PAGE
Independent Auditor's Report......................... 1
Balance Sheet........................................ 2
Statement of Operations...............................3
Statement of Stockholders' Equity (Deficit).......... 4
Statement of Cash Flows...............................5
Notes to Financial Statements.......................6-7
<PAGE>
Janet Loss, C.P.A., P.C.
Certified Public Accountant
3525 South Tamarac Drive, Suite 120
Denver, Colorado 80237
(303) 220-0227
Board of Directors
National Venture Capital Fund, Inc.
(A Development Stage Company)
6000 East Evans
Building 1, Suite 22
Denver, Colorado 80222-5406
I have audited the accompanying balance sheet of National Venture Capital
Fund, Inc. (A Development Stage Company) as of April 30, 1998, and the
related statements of operations, stockholders' equity and cash flows for
the period from June 12, 1997 (Inception) through April 30, 1998. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. These standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of National Venture Capital
Fund, Inc. (A Development Stage Company) as of April 30, 1998, and the
results of its operations and its cash flow for the period from June 12,
1997 (Inception) through April 30, 1998.
Janet Loss, C.P.A., P.C.
May 4, 1998
<PAGE>
<TABLE>
<CAPTION>
NATIONAL VENTURE CAPITAL FUND, INC.
(A Development Stage Company)
BALANCE SHEET
April 30, 1998
ASSETS
CURRENT ASSETS:
<S> <C>
Cash in checking $30,000
OTHER ASSETS:
Organization costs, net of
amortization 417
TOTAL ASSETS $30,417
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: $ -
STOCKHOLDERS' EQUITY:
Preferred stock, 10,000,000
shares authorized, $.0001
par value per share,
none issued --
Common stock, 100,000,000
shares authorized, $.0001
par value per share,
20,101,000 shares issued
and outstanding 2,010
Additional Paid-In-Capital 30,490
(Deficit) (2,083)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $30,417
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
NATIONAL VENTURE CAPITAL FUND, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the period from June 12, 1997
(Inception) thru April 30, 1998
<S> <C>
REVENUES: $ -
OPERATING EXPENSES:
Amortization expense 83
Consulting services 2,000
TOTAL OPERATING EXPENSES: 2,083
NET (LOSS) (2,083)
NET (LOSS) PER SHARE N/A
Weighted average number of
shares outstanding 20,001,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
NATIONAL VENTURE CAPITAL FUND, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from June 12, 1997
(Inception) thru April 30, 1998
(Deficit)
Accumulated
Common stock Common Additional during the Stockholders'
Number of stock Paid-In- Development Equity
SHARES AMOUNT CAPITAL STAGE
<S> <C> <C> <C> <C> <C>
June 12, 1997,
shares issued
for services 20,001,000 $2,000 $ 500 $ - $2,500
April 30, 1998
100,000,000 shares
issued for cash 100,000 10 29,990 - 30,000
Net (Loss)
for period from,
June 12, 1997
(Inception) thru
April 30, 1998 (2,083) (2,083)
Balance, April
3o, 1998 20,101,000 $2,010 $30,490 $(2,083) $ 30,417
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
NATIONAL VENTURE CAPITAL FUND, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the period from June 12, 1997
(Inception) thru April 30, 1998
For The Period Ended
APRIL 30, 1998
<S> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net (Loss) $(2,083)
ADJUSTMENTS TO RECONCILE
NET LOSS TO NET CASH
USED BY OPERATING ACTIVITIES:
Amortization 83
Stock issued for services 2,000
Stock issued for organization
costs 500
NET CASH PROVIDED BY
FINANCING ACTIVITIES $ 500
CASH USED ROM INVESTING
ACTIVITIES:
Organization costs (500)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance
of capital stock 30,000
NET INCREASE IN CASH $30,000
CASH, BEGINNING OF PERIOD 0
CASH, END OF PERIOD $30,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NATIONAL VENTURE CAPITAL FUND, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
National Venture Capital Fund, Inc. (A Development Stage Company), a Colorado
Corporation, was incorporated June 12, 1997, for the purpose of seeking
potential business acquisitions or mergers.
ACCOUNTING METHOD
The company records income and expenses on the accrual method.
ORGANIZATION COSTS
Costs incurred in organizing the company are being amortized over a
sixty-month period.
YEAR-END
The company has elected a fiscal year-end of April 30th.
LOSS PER SHARE
Net loss is calculated by dividing the net loss by the weighted average
number of common shares outstanding.
NOTE II -- RELATED PARTY TRANSACTIONS.
The Company maintains its office in space provided by an officer of the company
pursuant to an oral agreement on a rent free basis with reimbursement for out-
of-pocket expenses, such as telephone.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
National Venture Capital Fund, Inc.
Dated: 5/5/98 By: /S/ HOWARD C. CADWELL
Howard C. Cadwell
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
CHIEF FINANCIAL OFFICER
Dated: 5/5/98 By: /S/ LAURIE L. QUAM
Laurie L. Quam
Treasurer and Director
Dated: 5/5/98 By: /S/ HOWARD C. CADWELL
Howard C. Cadwell
Director
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
EXHIBITS
TO
National Venture Capital Fund, Inc.
<PAGE>
INDEX TO EXHIBITS
Exhibit Page or
NUMBER DESCRIPTION CROSS REFERENCE
3A Articles of Incorporation
3B Bylaws
10A Form of Subscription Agreement with Lock Up
Provisions
<PAGE>
3A
Articles of Incorporation
<PAGE>
ARTICLES OF INCORPORATION
OF
NATIONAL VENTURE CAPITAL FUND, INC.
ARTICLE I
NAME
The name of the corporation is:
National Venture Capital Fund, Inc.
ARTICLE II
PERIOD OF DURATION
The corporation shall have perpetual durantion. The corporate existence
shall begin upon filing of these Articles with the Colorado Secretary of
State.
Each reference to the Colorado Business Corporation Act in these Articles
means the Colorado Business Corporation Act of 1993 as it may be amended from
time to time during the corporation existence, unless otherwise stated.
ARTICLE III
PURPOSE
The purpose for which the corporation is organized shall be the
transaction of any lawful business for which corporations may be incorporated
pursuant to the Colorado Business Corporation Act.
ARTICLE IV
AUTHORIZED CAPITAL
The aggregate number of shares which the corporation has authority to
issue is 110,000,000. The authorized shares consist of 100,000,000 shares of
common stock with a par value of $.0001 per share, such class being designated
"common stock," and 10,000,000 shares of preferred stock with a par value of
$.0001 per share, such class being designated "preferred stock." The
preferences, limitations, and relative rights of the common stock and the
preferred stock are as stated in this Article.
<PAGE>
Common Stock
Dividends. Dividends may be paid upon the common stock to the extent
and in the manner permitted by law, as and when declared by the board of
directors, except that so long as any share of preferred stock is outstanding
the corporation shall not pay any dividend on the common stock (other than a
dividend payable only in shares of capital stock of the corporation), make
any other distribution on any outstanding share of common stock, or redeem,
purchase or otherwise acquire any outstanding share of common stock if at
the time of making such payment, distribution, redemption, purchase or
acquisition the corporation is in default with respect to either any dividend
payable on any share of preferred stock or any obligation to redeem or
purchase any share of preferred stock. Dividends may be paid upon the common
stock in shares of any one or more series of preferred stock.
Distribution in Liquidation. Upon the liquidation, dissolution, or
winding up of the corporation, after paying or adequately providing for the
payment of all of its obligations and for the preferential distribution to
the holders of any shares of preferred stock then outstanding, the corporation
shall distribute the remainder of its assets, either in cash or in kind, pro
rata to the holders of the common stock.
Preferred Stock
Issuance in Series. The board of directors is authorized to divide the
preferred stock into series by setting the number of shares initially
constituting the series and the distinctive designation of that series
(notwithstanding the setting of the number of shares constituting a
particular series upon the initiation of each series, the board of directors
may from time to time authorize the issuance of additional shares of the same
series or may reduce the number of shares constituting such series) and,
within the limitations prescribed by law and those set forth in these
Articles, to fix and determine the relative rights and preferences of the
shares of any series of preferred stock with respect to:
(a) The rate of dividend, if any, on the shares of the series,
the time of payment of dividends, whether dividends are
cumulative, and the date from which any dividends shall accrue;
<PAGE>
(b) Whether the shares of the series may be redeemed and, if so,
the redemption price and the terms and conditions of redemption;
(c) The amount payable upon the shares of the series in the event
of involuntary liquidation;
(d) The amount payable upon the shares of the series in the event
of voluntary liquidation;
(e) Sinking fund or other provisions, if any, for the redemption
or purchase of shares of the series;
(f) The terms and conditions on which the shares of the series may
be converted, if the shares of the series are issued with the
privilege of conversion; and
(g) Voting powers, if any.
All shares of preferred stock shall be identical except as otherwise provided
in this Article or in the resolutions of the board of directors fixing and
determining the relative rights and preferences of the one or more series of
preferred stock, but all shares of each series shall be identical.
Redemption and Conversion. Any share of any series of preferred stock
which has been redeemed (whether through the operation of a sinking fund or
otherwise) or converted shall have the status of an authorized and unissued
share of preferred stock and may be reissued as a part of the series of which
it was orginally a part or may be reissued as a part of another series of
preferred stock established by the board of directors.
Preferential Distribution in Liquidation. Upon the liquidation,
dissolution, or winding up the corporation, the holders of the preferred
stock then outstanding shall be entitled to receive the respective amounts
per share fixed by the board of directors for the various series before any
of the assets of the corporation are distributed to the holders of the common
stock. If the assets of the corporation distributable to the holders of the
preferred stock have a value which is less than the full amount so fixed for
the various series, such assets shall be distributed among the holders of
the various series of preferred stock in accordance with any preferences
among the series that may have been established by the board of directors or,
to the extent that no such preferences shall have been established, pro rata
among the holders of all of the series of preferred stock.
<PAGE>
After distribution of the preferential amounts required to be distributed to
the holders of the preferred stock then outstanding, the holders of the
common stock shall be entitled, to the exclusion of the holders of the
preferred stock, to share in all remaining assets of the corporation. For
the purposes of this Article and any statement filed pursuant to law setting
forth the designation, relative rights and preferences of any series of
preferred stock, the voluntary sale, lease, exchange, or transfer (for cash,
securities, or other consideration) of all or substantially all of the assets
of the corporation to any transferee, or its consolidation or merger with
any other corporation or corporations, shall not be deemed to be a
liquidation, dissolution, or winding up of the corporation.
ARTICLE IV
VOTING
Voting Rights; Denial of Cumulative Voting. Each outstanding share of
common stock shall be entitled to one vote and each outstanding fractional
share of common stock shall be entitled to a corresponding fractional vote
on each matter submitted to a vote of shareholders. Cumulative voting shall
not be allowed in the election of directors.
Denial of preemptive Rights. No shareholder shall have any preemptive
or preferential right to acquire any shares or other securities of the
corporation, including shares or securities held in the treasury of the
corporation and securities either convertible into a carrying rights to
subscribe to or acquire shares or other securities of the corporation.
Quorum of Shareholders. A quorum at any meeting of shareholders for the
purpose of each matter to be voted upon shall consist of the holders of a
majority of the shares entitled to vote upon the matter, represented in
person or by proxy.
Regular Shareholder Vote. At any meeting of shareholders at which a
quorum exists for the purpose of any matter to be voted upon, the affirmative
vote of a majority of the shares represented at the meeting and entitled to
vote on the matter shall be the act of the shareholders unless a greater
affirmative vote is required by the Colorado Business Corporation Act or
another provision of these Articles.
<PAGE>
Shareholder Voting on Extraordinary Corporate Actions. An affirmative
vote of a majority of all shares entitled to vote shall be required to
(a) adopt any proposed amendment to these Articles, (b) authorize the
corporation to lend money to, guarantee the obligations of and otherwise
assist the directors of the corporation or the directors of any other
corporation in which the majority of the voting capital stock is owned by the
corporation, (c) approve any plan of merger or consolidation of the corporation
with one or more other corporations, (except no vote of the shareholders of
this corporation shall be required if no vote is required by the Colorado
Business Corporation Act with respect to such merger or consolidation) or
any plan of exchange under which the shares of the corporation would be
acquired, (d) authorize the sale, lease, exchange, or other disposition of all
or substantially all of the property and assets of the corporation not in the
usual and regular course of its business (including the granting of consent to
the disposition of substantially all of the property and assets of an entity
controlled by the corporation), or (e) adopt a resolution either to dissolve
the corporation or to revoke voluntary dissolution proceedings.
Unequal Voting Rights. If unequal voting rights exist between two or more
classes or series of shares entitled to vote on any matter, each reference in
these Articles to a stated portion of the shares entitled to vote on the matter,
without reference to a single class or series, shall mean shares entitled to
vote, regardless of class or series, which cumulatively represent the same
portion of the total amount of votes entitled to be cast on the matter.
ARTICLE V
REGISTERED OFFICE, REGISTERED AGENT
AND PRINCIPAL OFFICE
Registered Office. The street address of the initial registered office
of the corporation is 12146 East Amherst Cirlce, Aurora, Colorado 80014.
Registered Agent. The name of its initial registered agent at the
registered office of the coroporation is Richard H. Steinberg. A separate
written consent of the initial registered agent to the appointment as
registered agent has been delivered for filing with these Articles of
Incorporation.
Principal Office. The address of the principal office of the corporation
is 12146 East Amherst Circle, Aurora, Colorado 80014.
<PAGE>
ARTICLE VI
BOARD OF DIRECTORS
Management. The corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation shall be managed
under the direction of, a board of directors. The number of directors
constituting the full board of directors shall be established from time to time
in the bylaws of the corporation.
Initial Director. The number of directors constituting the initial board
of directors is one. The name of the person who shall serve as director of
this corporation until the first annual meeting of shareholders or until his
successor is elected and qualified is Richard H. Steinberg and his address is
12146 East Amherst Circle, Aurora, Colorado 80014.
ARTICLE VII
LIMITATION OF LIABILITY
No director of the corporation shall have any liability to the corporation
or to its shareholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability is not permitted
under the Colorado Business Corporation Act. Any repeal or modification of the
foregoing sentence shall not adversely affect any right or protection of a
director with respect of any act or omission occurring prior to such repeal
or modification.
ARTICLE VIII
RIGHT OF DIRECTORS
TO CONTRACT WITH CORPORATION
It being the express purpose and intent of this Article to permit the
corporation to buy from, sell to, or otherwise deal with other corporations,
firms, associations, or entities of which any or all of the directors of the
corporation may be directors, officers, or members or in which any or all of
them may have pecuniary interests, no contract or other transaction between
the corporation and one or more of its directors or any other corporation,
firm, association, or entity in which one or more of its directors are
directors or officers or are financially interested shall be either void or
voidable solely because of such relationship or interest or solely because
such directors are present at the meeting of
<PAGE>
the board of directors or a committee of the board which authorizes, approves,
or ratifies such contract or transaction or solely because their votes are
counted for such purpose if:
1. The material facts of such relationship or interest are disclosed
or known to the board of directors or committee which authorizes, approves, or
ratifies the contract or transaction by a vote or consent of a majority of
disinterested directors without counting the votes or consents of such
interested directors;
2. The material facts of such relationship or interest are disclosed
or known to the shareholders entitled to vote and they authorize, approve, or
ratify such contract or transaction by vote or written consent; or
3. The contract or transaction is fair and reasonable to the
corporation.
Furthermore, common or intersted directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or a committee of
the board which authorizes, approves, or ratifies such contract or transaction.
ARTICLE IX
INDEMNIFICATION
The corporation shall indemnify to the fullest extent permitted by
applicable law in effect from time to time, any person (and that person's
estate and personal representative) who is a party or is threatened to be made
a party to any threatened, pending, or completed action, suit, or proceeding by
reason of the fact that such person is or was a director, officer, employee, or
agent of the corporation, or while a director of the corporation is or was
serving at its request as a director, officer, partner, trustee, employee, or
agent of, or in any similar managerial or fiduciary position of, another
foreign or domestic corporation or any individual, partnership, limited
liability company, joint venture, trust, other enterprise or employee benefit
plan. The corporation shall also indemnify any person who is serving or has
served the corporation as a director, officer, employee, fiduciary, or agent
(and that person's estate and personal representative) to the extent and in the
manner provided in any bylaw, resolution of the shareholders or directors,
contract, or otherwise, so long as such provision is legally permissible.
<PAGE>
ARTICLE X
INCORPORATOR
The name of the incorporator is David M. Summers and his address is
5670 Greenwood Plaza Boulevard, Suite 422, Englewood, Colorado 80111.
The incorporator is a natural person of the age of 18 years or more. Acting
as the incorporator of a corporation to be incorporated under the laws of the
State of Colorado, the incorporator named above hereby adopts the foregoing
Articles of Incorporation.
Date: June 12, 1997 /s/ David M. Summers
David M. Summers, Incorporator
<PAGE>
CONSENT TO APPOINTMENT AS REGISTERED AGENT
The undersigned hereby consents to the appointment as the initial
registered agent of National Venture Capital Fund, Inc.
6/11/97 /s/ Richard H. Steinberg
Date Richard H. Steinberg
<PAGE>
3B
Bylaws
<PAGE>
BYLAWS
OF
NATIONAL VENTURE CAPITAL FUND, INC.
ARTICLE I
OFFICES
The principal office of the Corporation shall initially be located at
6000 E. Evans, Suite 1-022, Denver, Colorado 80222. The Corporation may
have other offices at such places within or without the State of Colorado as
the Board of Directors may from time to time establish.
ARTICLE II
REGISTERED OFFICE AND AGENT
The registered office of the Corporation in Colorado shall be located
at Penthouse Suite, 8400 East Prentice Ave., Englewood, Colorado 80111 and
the registered agent shall be Corporate Filing Corp. The Board of Directors
may, by appropriate resolution from time to time, change the registered
office and/or agent.
ARTICLE III
MEETINGS OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. The annual meeting of the Stockholders
for the election of Directors and for the transaction of such other business
as may properly come before such meeting shall be held at such time and date
as the Board of
<PAGE>
Directors shall designate from time to time by resolution duly adopted.
SECTION 2. SPECIAL MEETINGS. A special meeting of the Stockholders
may be called at any time by the President or the Board of Directors, and
shall be called by the President upon the written request of Stockholders of
record holding in the aggregate twenty per cent (20%) or more of the
outstanding shares of stock of the Corporation entitled to vote, such
written request to state the purpose or purposes of the meeting and to be
delivered to the President.
SECTION 3. PLACE OF MEETINGS. All meetings of the Stockholders
shall be held at the principal office of the Corporation or at such other
place, within or without the State of Colorado, as shall be determined from
time to time by the Board of Directors or the Stockholders of the
Corporation.
SECTION 4. CHANGE IN TIME OR PLACE OF MEETINGS. The time and place
specified in this Article III for annual meetings shall not be changed
within thirty (30) days next before the day on which such meeting is to be
held. A notice of any such change shall be given to each Stockholder at
least twenty (20) days before the meeting, in person or by letter mailed to
his last known post office address.
SECTION 5. NOTICE OF MEETINGS. Written notice, stating the place,
day and hour of the meeting, and in the case of a special meeting, the
purposes for which the meeting is called, shall be given by or under the
direction of the President or Secretary at least ten (10) days but not more
than fifty (50) days before the date fixed for such meeting; except that if
the
<PAGE>
number of the authorized shares of the Corporation are to be increased, at
least thirty (30) days' notice shall be given. Notice shall be given to each
Stockholder entitled to vote at such meeting, of record at the close of
business on the day fixed by the Board of Directors as a record date for the
determination of the Stockholders entitled to vote at such meeting, or if no
such date has been fixed, of record at the close of business on the day next
preceding the day on which notice is given. Notice shall be in writing and
shall be delivered to each Stockholder in person or sent by United States
Mail, postage prepaid, addressed as set forth on the books of the
Corporation. A waiver of such notice, in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent to such notice. Except as otherwise
required by statute, notice of any adjourned meeting of the Stockholders
shall not be required.
SECTION 6. QUORUM. Except as may otherwise be required by statute,
the presence at any meeting, in person or by proxy, of the holders of record
of a majority of the shares then issued and outstanding and entitled to vote
shall be necessary and sufficient to constitute a quorum for the transaction
of business. In the absence of a quorum, a majority in interest of the
Stockholders entitled to vote, present in person or by proxy, or, if no
Stockholder entitled to vote is present in person or by proxy, any Officer
entitled to preside or act as secretary of such meeting, may adjourn the
meeting from time to time for a period not exceeding sixty (60) days in any
one case. At any such adjourned meeting at which a quorum may be present,
any business may be transacted which might have been transacted at the
meeting as originally called. The Stockholders present at a duly organized
meeting may continue to do business until adjourn
<PAGE>
ment, notwithstanding the withdrawal of enough Stockholders to leave less
than a quorum.
SECTION 7. VOTING. Except as may otherwise be provided by statute
or these Bylaws, including the provisions of Section 4 of Article VIII
hereof, each Stockholder shall at every meeting of the Stockholders be
entitled to one (1) vote, in person or by proxy, for each share of the
voting capital stock held by such Stockholder. However, no proxy shall be
voted on after eleven (11) months from its date, unless the proxy provides
for a longer period. At all meetings of the Stockholders, except as may
otherwise be required by statute, the Articles of Incorporation of this
Corporation, or these Bylaws, if a quorum is present, the affirmative vote
of the majority of the shares represented at the meeting and entitled to
vote on the subject matter shall be the act of the Stockholders.
Persons holding stock in a fiduciary capacity shall be entitled to vote
the shares so held, and persons whose stock is pledged shall be entitled to
vote, unless in the transfer by the pledgor on the books of the Corporation
he shall have expressly empowered the pledgee to vote thereon, in which case
only the pledgee or his proxy may represent said stock and vote thereon.
Shares of the capital stock of the Corporation belonging to the
Corporation shall not be voted directly or indirectly.
SECTION 8. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Whenever the
vote of Stockholders at a meeting thereof is required or permitted to be
taken in connection with any corporate action, by any provision of statute,
these Bylaws, or the Articles of Incorporation, the meeting and vote of
Stockholders
<PAGE>
may be dispensed with if all the Stockholders who would have been entitled
to vote upon the action if such meeting were held shall consent in writing
to such corporate action being taken.
SECTION 9. TELEPHONIC MEETING. Any meeting held under this Article
III may be held by telephone, in accordance with the provisions of the
Colorado Business Corporation Act.
SECTION 10. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The Officer who
has charge of the stock ledger of the Corporation shall prepare and make, at
least ten (10) days before every annual meeting, a complete list of the
Stockholders entitled to vote at such meeting, arranged in alphabetical
order and showing the address of each Stockholder and the number of shares
registered in the name of each Stockholder. Such list shall be open to the
examination of any Stockholder during ordinary business hours, for a period
of at least ten (10) days prior to election, either at a place within the
city, town or village where the election is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the
place where said meeting is to be held. The list shall be produced and kept
at the time and place of election during the whole time thereof and be
subject to the inspection of any Stockholder who may be present.
ARTICLE IV
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the
Corporation shall be managed by the Board of Directors, except as otherwise
provided by statute, the Articles of Incorporation of the Corporation, or
these Bylaws.
<PAGE>
SECTION 2. NUMBER AND QUALIFICATIONS. The Board of Directors shall
consist of at least two (2) members, and not more than five (5) members, as
shall be designated by the Board of Directors from time to time, and in the
absence of such designation, the Board of Directors shall consist of two (2)
members. This number may be changed from time to time by resolution of the
Board of Directors. However, no such change shall have the effect of
reducing the number of members below two (2). Directors need not be
residents of the State of Colorado or Stockholders of the Corporation.
Directors shall be natural persons of the age of eighteen (18) years or
older.
SECTION 3. ELECTION AND TERM OF OFFICE. Members of the initial
Board of Directors of the Corporation shall hold office until the first
annual meeting of Stockholders. At the first annual meeting of
Stockholders, and at each annual meeting thereafter, the Stockholders shall
elect Directors to hold office until the next succeeding annual meeting.
Each Director shall hold office until his successor is duly elected and
qualified, unless sooner displaced. Election of Directors need not be by
ballot.
SECTION 4. COMPENSATION. The Board of Directors may provide by
resolution that the Corporation shall allow a fixed sum and reimbursement of
expenses for attendance at meetings of the Board of Directors and for other
services rendered on behalf of the Corporation. Any Director of the
Corporation may also serve the Corporation in any other capacity, and
receive compensation therefor in any form, as the same may be determined by
the Board in accordance with these Bylaws.
<PAGE>
SECTION 5. REMOVALS AND RESIGNATIONS. Except as may otherwise be
provided by statute, the Stockholders may, at any special meeting called for
the purpose, by a vote of the holders of the majority of the shares then
entitled to vote at an election of Directors, remove any or all Directors
from office, with or without cause.
A Director may resign at any time by giving written notice to the Board
of Directors, the President or the Secretary of the Corporation. The
resignation shall take effect immediately upon the receipt of the notice, or
at any later period of time specified therein. The acceptance of such
resignation shall not be necessary to make it effective, unless the
resignation requires acceptance for it to be effective.
SECTION 6. VACANCIES. Any vacancy occurring in the office of a
Director, whether by reason of an increase in the number of directorships or
otherwise, may be filled by a majority of the Directors then in office,
though less than a quorum. A Director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office, unless sooner
displaced.
When one or more Directors resign from the Board, effective at a future
date, a majority of the Directors then in office, including those who have
so resigned, shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective. Each Director so chosen shall hold office as herein provided in
the filling of other vacancies.
SECTION 7. EXECUTIVE COMMITTEE. By resolution adopted by a majority
of the Board of Directors, the Board may designate one or more committees,
including an Executive Committee, each consisting of one (1) or more
Directors. The Board of Directors may designate one (1) or more Directors
as alternate members of any such committee, who may replace any absent or
disqualified member at any meeting of such committee. Any such committee,
to the extent provided in the resolution and except as may otherwise be
provided by statute, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the Corporation
and may authorize the seal of the Corporation to be affixed to all papers
which may require the same. The designation of such committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed upon it or
him by law. If there be more than two (2) members on such committee, a
majority of any such committee may determine its action and may fix the time
and place of its meetings, unless provided otherwise by the Board. If there
be only two (2) members, unanimity of action shall be required. Committee
action may be by way of a written consent signed by all committee members.
The Board shall have the power at any time to fill vacancies on committees,
to discharge or abolish any such committee, and to change the size of any
such committee.
Except as otherwise prescribed by the Board of Directors, each
committee may adopt such rules and regulations governing its proceedings,
quorum, and manner of acting as it shall deem proper and desirable.
Each such committee shall keep a written record of its acts and
proceedings and shall submit such record to the Board of
<PAGE>
Directors. Failure to submit such record, or failure of the Board to
approve any action indicated therein will not, however, invalidate such
action to the extent it has been carried out by the Corporation prior to the
time the record of such action was, or should have been, submitted to the
Board of Directors as herein provided.
ARTICLE V
MEETINGS OF BOARD OF DIRECTORS
SECTION 1. ANNUAL MEETINGS. The Board of Directors shall meet each
year immediately after the annual meeting of the Stockholders for the
purpose of organization, election of Officers, and consideration of any
other business that may properly be brought before the meeting. No notice
of any kind to either old or new members of the Board of Directors for such
annual meeting shall be necessary.
SECTION 2. REGULAR MEETINGS. The Board of Directors from time to
time may provide by resolution for the holding of regular meetings and fix
the time and place of such meetings. Regular meetings may be held within or
without the State of Colorado. The Board need not give notice of regular
meetings provided that the Board promptly sends notice of any change in the
time or place of such meetings to each Director not present at the meeting
at which such change was made.
SECTION 3. SPECIAL MEETINGS. The Board may hold special meetings of
the Board of Directors at any place, either within or without the State of
Colorado, at any time when called by the President, or two or more
Directors. Notice of the time and place thereof shall be given to and
received by each Director at
<PAGE>
least three (3) days before the meeting. A waiver of such notice in
writing, signed by the person or persons entitled to said notice, either
before or after the time stated therein, shall be deemed equivalent to such
notice. Notice of any adjourned special meeting of the Board of Directors
need not given.
SECTION 4. QUORUM. The presence, at any meeting, of a majority of
the total number of Directors shall be necessary and sufficient to
constitute a quorum for the transaction of business. Except as otherwise
required by statute, the act of a majority of the Directors present at a
meeting at which a quorum is present shall be the act of the Board of
Directors; however, if only one (1) Director is present, unanimity of action
shall be required. In the absence of a quorum, a majority of the Directors
present at the time and place of any meeting may adjourn such meeting from
time to time until a quorum is present.
SECTION 5. CONSENT OF DIRECTORS IN LIEU OF MEETING. Unless otherwise
restricted by statute, the Board may take any action required or permitted
to be taken at any meeting of the Board of Directors without a meeting, if a
written consent thereto is signed by all members of the Board, and such
written consent is filed with the minutes of proceedings of the Board.
SECTION 6. TELEPHONIC MEETING. Any meeting held under this Article
V may be held by telephone, in accordance with the provisions of the
Colorado Business Corporation Act.
SECTION 7. ATTENDANCE CONSTITUTES WAIVER. Attendance of a Director
at a meeting constitutes a waiver of any notice to which the Director may
otherwise have been entitled, except where
<PAGE>
a Director attends a meeting for the express purpose of objecting the
transaction of any business because the meeting is not lawfully called or
convened.
ARTICLE VI
OFFICERS
SECTION 1. NUMBER. The Corporation shall have a President, one or
more Vice Presidents as the Board may from time to time elect, a Secretary
and a Treasurer, and such other Officers and Agents as may be deemed
necessary. One person may hold any two offices except the offices of
President and Secretary.
SECTION 2. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The Board
shall choose the Officers specifically designated in Section 1 of this
Article VI at the annual meeting of the Board of Directors and such Officers
shall hold office until their successors are chosen and qualified, unless
sooner displaced. Officers need not be Directors of the Corporation.
SECTION 3. SUBORDINATE OFFICERS. The Board of Directors, from time
to time, may appoint other Officers and Agents, including one or more
Assistant Secretaries and one or more Assistant Treasurers, each of whom
shall hold office for such period, and each of whom shall have such
authority and perform such duties as are provided in these Bylaws or as the
Board of Directors from time to time may determine. The Board of Directors
may delegate to any Officer the power to appoint any such subordinate
Officers and Agents and to prescribe their respective authorities and
duties.
<PAGE>
SECTION 4. REMOVALS AND RESIGNATIONS. The Board of Directors may,
by vote of a majority of their entire number, remove from office any Officer
or Agent of the Corporation, appointed by the Board of Directors.
Any Officer may resign at any time by giving written notice to the
Board of Directors. The resignation shall take effect immediately upon the
receipt of the notice, or any later period of time specified therein. The
acceptance of such resignation shall not be necessary to make it effective,
unless the resignation requires acceptance for it to be effective.
SECTION 5. VACANCIES. Whenever any vacancy shall occur in any
office by death, resignation, removal, or otherwise, it shall be filled for
the unexpired portion of the term in the manner prescribed by these Bylaws
for the regular election or appointment to such office, at any meeting of
Directors.
SECTION 6. THE PRESIDENT. The President shall be the chief
executive officer of the Corporation and, subject to the direction and under
the supervision of the Board of Directors, shall have general charge of the
business, affairs and property of the Corporation, and shall have control
over its Officers, Agents and Employees. The President shall preside at all
meetings of the Stockholders and of the Board of Directors at which he is
present. The President shall do and perform such other duties and may
exercise such other powers as these Bylaws or the Board of Directors from
time to time may assign to him.
SECTION 7. THE VICE PRESIDENT. At the request of the President or
in the event of his absence or disability, the Vice President, or in case
there shall be more than one Vice President, the Vice President designated
by the President, or in the absence of such designation, the Vice President
designated by the Board of Directors, shall perform all the duties of the
President, and when so acting, shall have all the powers of, and be subject
to all the restrictions upon, the President. Any Vice President shall
perform such other duties and may exercise such her powers as from time to
time these Bylaws or by the Board of Directors or the President be assign to
him.
SECTION 8. THE SECRETARY. The Secretary shall:
a. record all the proceedings of the meetings of the Corporation and
Directors in a book to be kept for that purpose;
b. have charge of the stock ledger (which may, however, be kept by
any transfer agent or agents of the Corporation under the
direction of the Secretary), an original or duplicate of which
shall be kept at the principal office or place of business of the
Corporation in the State of Colorado;
c. see that all notices are duly and properly given;
d. be custodian of the records of the Corporation and the Board of
Directors, and the and of the seal of the Corporation, and see
that
<PAGE>
the seal is affixed to all stock certificates prior to
their issuance and to all documents for which the
Corporation has authorized execution on its behalf under
its seal;
e. see that all books, reports, statements, certificates, and other
documents and records required by law to be kept or filed are
properly kept or filed;
f. in general, perform all duties and have all powers incident to the
office of Secretary, and perform such other duties and have such
other powers as these Bylaws, the Board of Directors or the
President from time to time may assign to him; and
g. prepare and make, at least ten (10) days before every election of
Directors, a complete list of the Stockholders entitled to vote at
said election, arranged in alphabetical order.
SECTION 9. THE TREASURER. The Treasurer shall:
a. have supervision over the funds, securities, receipts and
disbursements of the Corporation;
b. cause all moneys and other valuable effects of the Corporation to
be deposited in its
<PAGE>
name and to its credit, in such depositories as the
Board of Directors or, pursuant to authority conferred
by the Board of Directors, its designee shall select;
c. cause the funds of the Corporation to be disbursed by checks or
drafts upon the authorized depositaries of the Corporation, when
such disbursements shall have been duly authorized;
d. cause proper vouchers for all moneys disbursed to be taken and
preserved;
e. cause correct books of accounts of all its business and
transactions to be kept at the principal office of the
Corporation;
f. render an account of the financial condition of the Corporation
and of his transactions as Treasurer to the President or the Board
of Directors, whenever requested;
g. be empowered to require from the Officers or Agents of the
Corporation reports or statements giving such information as he
may desire with respect to any and all financial transactions of
the Corporation; and
h. in general, perform all duties and have all powers incident to the
office of Treasurer and perform such other duties and have such
other powers as from time to time may be
<PAGE>
assigned to him by these Bylaws or by the Board of
Directors or the President.
SECTION 10. SALARIES. The Board of Directors shall from time to time
fix the salaries of the Officers of the Corporation. The Board of Directors
may delegate to any person the power to fix the salaries or other
compensation of any Officers or Agents appointed, in accordance with the
provisions of Section 3 of this Article VI. No Officer shall be prevented
from receiving such salary by reason of the fact that he is also a Director
of the Corporation. Nothing contained in this Bylaw shall be construed so
as to obligate the Corporation to pay any Officer a salary, which is within
the sole discretion of the Board of Directors.
SECTION 11. SURETY BOND. The Board of Directors may in its
discretion secure the fidelity of any or all of the Officers of the
Corporation by bond or otherwise.
ARTICLE VII
EXECUTION OF INSTRUMENTS
Section 1. CHECKS, DRAFTS, ETC. The President and the Secretary or
Treasurer shall sign all checks, drafts, notes, bonds, bills of exchange and
orders for the payment of money of the Corporation, and all assignments or
endorsements of stock certificates, registered bonds or other securities,
owned by the Corporation, unless otherwise directed by the Board of
Directors, or unless otherwise required by law. The Board of Directors may,
however, authorize any Officer to sign any of such instruments for and on
behalf of the Corporation without necessity of countersignature, and may
designate Officers or Employees of the
<PAGE>
Corporation other than those named above who may, in the name of the
Corporation, sign such instruments.
SECTION 2. EXECUTION OF INSTRUMENTS GENERALLY. Subject always to
the specific direction of the Board of Directors, the President shall
execute all deeds and instruments of indebtedness made by the Corporation
and all other written contracts and agreements to which the Corporation
shall be a party, in its name, attested by the Secretary. The Secretary,
when necessary required, shall affix the corporate seal thereto.
SECTION 3. PROXIES. The President and the Secretary or an Assistant
Secretary of the Corporation or by any other person or persons duly
authorized by the Board of Directors may execute and deliver proxies to vote
with respect to shares of stock of other corporations owned by or standing
in the name of the Corporation from time to time on behalf of the
Corporation.
ARTICLE VIII
CAPITAL STOCK
SECTION 1. CERTIFICATES OF STOCK. Every holder of stock in the
Corporation shall be entitled to have a certificate, signed in the name of
the Corporation by the President and by the Secretary of the Corporation,
certifying the number of shares owned by that person in the Corporation.
Certificates of stock shall be in such form as shall, in conformity to
law, be prescribed from time to time by the Board of Directors.
<PAGE>
SECTION 2. TRANSFER OF STOCK. Shares of stock of the Corporation
shall only be transferred on the books of the Corporation by the holder of
record thereof or by his attorney duly authorized in writing, upon surrender
to the Corporation of the certificates for such shares endorsed by the
appropriate person or persons, with such evidence of the authenticity of
such endorsement, transfer, authorization and other matters as the
Corporation may reasonably require. Surrendered certificates shall be
canceled and shall be attached to their proper stubs in the stock
certificate book.
SECTION 3. RIGHTS OF CORPORATION WITH RESPECT TO REGISTERED OWNERS.
Prior to the surrender to the Corporation of the certificates for shares of
stock with a request to record the transfer of such shares, the Corporation
may treat the registered owner as the person entitled to receive dividends,
to vote, to receive notifications, and otherwise to exercise all the rights
and powers of an owner.
SECTION 4. CLOSING STOCK TRANSFER BOOK. The Board of Directors may
close the Stock Transfer Book of the Corporation for a period not exceeding
fifty (50) days preceding the date of any meeting of Stockholders, the date
for payment of any dividend, the date for the allotment of rights, the date
when any change, conversion or exchange of capital stock shall go into
effect or for a period of not exceeding fifty (50) days in connection with
obtaining the consent of Stockholders for any purpose. However, in lieu of
closing the Stock Transfer Book, the Board of Directors may in advance fix a
date, not exceeding
<PAGE>
fifty (50) days preceding the date of any meeting of Stockholders, the date
for the payment of any dividend, the date for the allotment of rights, the
date when any change or conversion or exchange of capital stock shall go
into effect, or a date in connection with obtaining such consent, as a
record date for the determination of the Stockholders entitled to notice of,
and to vote at, any such meeting and any adjournment thereof, or entitled to
receive payment of any such dividend, or to any such allotment of rights, or
to exercise the rights in respect of any such change, conversion or exchange
of capital stock, or to give such consent. In such case such Stockholders of
record on the date so fixed, and only such Stockholders shall be entitled to
such notice of, and to vote at, such meeting and any adjournment thereof, or
to receive payment of such dividend, or to receive such allotment of rights,
or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation
after any such record date fixed as aforesaid.
SECTION 5. LOST, DESTROYED AND STOLEN CERTIFICATES. The Corporation
may issue a new certificate of shares of stock in the place of any
certificate theretofore issued and alleged to have been lost, destroyed or
stolen. However, the Board of Directors may require the owner of such lost,
destroyed or stolen certificate or his legal representative, to: (a)
request a new certificate before the Corporation has notice that the shares
have been acquired by a bona fide purchaser; (b) furnish an affidavit as to
such loss, theft or destruction; (c) file with the Corporation a sufficient
indemnity bond; or (d) satisfy such other reasonable requirements, including
evidence of such loss, destruction, or theft as may be imposed by the
Corporation.
<PAGE>
ARTICLE IX
DIVIDENDS
SECTION 1. SOURCES OF DIVIDENDS. The Directors of the Corporation,
subject to the Colorado Business Corporation Act, may declare and pay
dividends upon the shares of the capital stock of the Corporation.
SECTION 2. RESERVES. Before the payment of any dividend, the
Directors of the Corporation may set apart out of any of the funds of the
Corporation available for dividends a reserve or reserves for any proper
purpose, and the Directors may abolish any such reserve in the manner in
which it was created.
SECTION 3. RELIANCE ON CORPORATE RECORDS. A Director in relying in
good faith upon the books of account of the Corporation or statements
prepared by any of its officials as to the value and amount of the assets,
liabilities, and net profits of the Corporation, or any other facts
pertinent to the existence and amount of surplus or other funds from which
dividends might properly be declared and paid shall be fully protected.
SECTION 4. MANNER OF PAYMENT. Dividends may be paid in cash, in
property, or in shares of the capital stock of the Corporation.
<PAGE>
ARTICLE X
SEAL AND FISCAL YEAR
SECTION 1. SEAL. The corporate seal, subject to alteration by the
Board of Directors, shall be in the form of a circle, shall bear the name of
the Corporation, and shall indicate its formation under the laws of the
State of Colorado and the year of incorporation. Such seal may be used by
causing it or a facsimile thereof to be impressed, affixed, or otherwise
reproduced.
SECTION 2. FISCAL YEAR. The Board of Directors shall, in its sole
discretion, designate a fiscal year for the Corporation.
ARTICLE XI
AMENDMENTS
Except as may otherwise be provided herein, a majority vote of the
whole Board of Directors at any meeting of the Board shall be sufficient to
amend or repeal these Bylaws.
ARTICLE XII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
SECTION 1. EXCULPATION. No Director or Officer of the Corporation
shall be liable for the acts, defaults, or omissions of any other Director
or Officer, or for any loss sustained by the Corporation, unless the same
has resulted from his own willful misconduct, willful neglect, or gross
negligence.
SECTION 2. INDEMNIFICATION. Each Director and Officer of
<PAGE>
the Corporation and each person who shall serve at the Corporation's request
as a director or officer of another corporation in which the Corporation
owns shares of capital stock or of which it is a creditor shall be
indemnified by the Corporation against all reasonable costs, expenses and
liabilities (including reasonable attorneys' fees) actually and necessarily
incurred by or imposed upon him in connection with, or resulting from any
claim, action, suit, proceeding, investigation, or inquiry of whatever
nature in which he may be involved as a party or otherwise by reason of his
being or having been a Director or Officer of the Corporation or such
director or officer of such other corporation, whether or not he continues
to be a Director or Officer of the Corporation or a director or officer of
such other corporation, at the time of the incurring or imposition of such
costs, expenses or liabilities, except in relation to matters as to which he
shall be finally adjudged in such action, suit, proceeding, investigation,
or inquiry to be liable for willful misconduct, willful neglect, or gross
negligence toward or on behalf of the Corporation in the performance of his
duties as such Director or Officer of the Corporation or as such director or
officer of such other corporation. As to whether or not a Director or
Officer was liable by reason of willful misconduct, willful neglect, or
gross negligence toward or on behalf of the Corporation in the performance
of his duties as such Director or Officer of the Corporation or as such
director or officer of such other corporation, in the absence of such final
adjudication of the existence of such liability, the Board of Directors and
each Director and Officer may conclusively rely upon an opinion of
independent legal counsel selected by or in the manner designated by the
Board of Directors. The foregoing right to indemnification shall be in
addition to and not in limitation of all other rights which such person may
be entitled as a matter of law, and shall inure to the benefit of the legal
representatives of such person.
<PAGE>
SECTION 3. LIABILITY INSURANCE. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation or who is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, association, or
other enterprise against any liability asserted against him and incurred by
him in any such capacity or arising out of his status as such, whether or
not he is indemnified against such liability by this Article XII.
<PAGE>
<PAGE>
10A
Form of Subscrption Agreement with Lock Up Provisions
<PAGE>
SUBSCRIPTION AND LOCKUP AGREEMENT
The Board of Directors
National Venture Capital Fund, Inc.
Englewood, Colorado
Re: Purchase of National Venture Capital Fund, Inc. (the
"Company") Common Stock (the "Shares")
Gentlemen:
I hereby subscribe for that number of Shares in the Company shown below
upon the following terms:
1. WARRANTIES. In connection with my acquisition of Shares, I
represent and warrant that I am over the age of 21 years; have had an
opportunity to ask questions of the principals of the Company; that I,
individually or together with others on whom I rely, have such knowledge and
experience in financial and business affairs that I have the capability of
evaluating the merits and risks of my investment in the Company; that I am
financially responsible and able to meet my obligations hereunder and
acknowledge that this investment is by its nature speculative; that you have
made all documents pertaining to this investment available to me and, where
requested, to my attorney, accountant and investment adviser; and that I
will not sell my shares without registration under the Securities Act of
1933 or exemption therefrom.
2. SUITABILITY. I represent that I either have such knowledge and
experience in financial and business matters that I am capable of evaluating
the merits and risks of my investment in the Company or, together with the
purchaser representative, if any, named below, have such knowledge and
experience in financial and business matters that we are capable of
evaluating the merits and risks of my investment in the Company; that I
relied on my own legal counsel or elected
<PAGE>
not to rely on my counsel despite the Company's recommendation that I rely
on my own legal counsel; and that I am able to bear the economic risk of
such investment.
3. NO REGISTRATION AND RESTRICTIONS OF TRANSFERABILITY. I understand
that the Shares which have been offered are not registered and are being
sold pursuant to an exemption from registration under the Securities Act of
1933. I further understand that any transfers must be made pursuant to
registration or an exemption from registration in the transferee's state.I
hereby tender to David Wagner & Associates, P.C., counsel to the Company
(the "Holder"), the certificates for that number of Shares listed at the end
of this letter agreement and instruct the Holder not to release any
certificates to any person until the Company has provided written
certification to the Holder that a merger or acquisition of the Company has
been closed and is no longer classified as a shell corporation under
applicable federal or state law., whereupon the Holder is hereby instructed
to release said Shares as I or my successors, beneficiaries, or authorized
representatives may direct in writing.
4. INDEMNIFICATION AND ARBITRATION. I recognize that the offer of the
Shares in the Company was based upon my representations and warranties
contained above and hereby agree to indemnify the Company and to hold it
harmless against any and all liabilities, costs, or expenses (including
reasonable attorneys' fees) arising by reason of, or in connection with, any
misrepresentation or any breach of such warranties by me, or arising as a
result of the sale or distribution of the Shares by me in violation of the
Securities Act of 1933, as amended, or any other applicable law. Further, in
the event that any dispute where to arise in connection with this Agreement
or with my investment in the Company, I agree, prior to seeking any other
relief at law or equity, to submit the matter to binding arbitration in
accordance with the rules of the National Association of Securities Dealers
at a place to be designated by the Company.
5. RISK. I RECOGNIZE THE SPECULATIVE NATURE OF AN INVESTMENT IN THE
COMPANY.
<PAGE>
6. ACCREDITED INVESTOR. I am or am not an
accredited or exempted investor based on the qualifications below:
a. A person who purchases at least $150,000 worth
of common stock, if such purchase price does not exceed
20% of the investor's net worth (including the net worth
of the investor's spouse) at the time of purchase ("net
worth") meaning the excess of all assets over all
liabilities under special provision for valuation of the
principal residence of the investor);
b. Any natural person whose individual net worth*
or joint net worth* with that person's spouse, at the
time of purchase exceeds $1,000,000;
c. Any natural person who had an individual
income** not including the income of the investor's
spouse (even if they are purchasing Units as joint
tenants or tenants in common), in excess of $200,000 in
each of the two most recent years and who reasonably
expects an income** in excess of $200,000 in the current
year;
d. Any business development company as defined in
section 2(a)(48) of the Investment Company Act of 1940;
or any Small Business Investment Company licensed by the
U.S. Small Business Administration under section 301(c)
or (d) of the Small Business Administration Act of 1958;
e. Any private business development company as
defined in section 202(a)(22) of the Investment Advisers
Act of 1940;
<PAGE>
f. Any director, executive officer or general
partner of the issuer of the securities being offered or
sold, or any director, executive officer or general
partner of a general partner of that issuer;
g. Any entity in which all of the equity owners
are accredited investors under paragraphs (b), (c), (d),
(e) or (f) above.
* For this purpose, a person's net worth is the excess of all of the
person's assets over all of the person's liabilities. For the purpose
of determining a person's net worth, the principal residence owned by
an individual shall be valued either at (A) cost, including the cost of
improvements, net of current encumbrances upon the property or (B) the
appraised value of the property as determined upon a written appraisal
used by an institutional lender making a loan to the individual secured
by the property, including the cost of subsequent improvements, net of
current encumbrances upon the property. For the purposes of this
provision, "institutional lender" means a bank, savings and loan
association, industrial loan company, credit union or personal property
broker or a company whose principal business is as a lender upon loans
secured by real property and which has such loans receivable in the
amount of $2,000,000 or more.
** For this purpose, a person's income is the amount of his individual
adjusted gross income (as reported on a federal income tax return),
increased by the following amounts: (a) any deduction for a portion of
long term capital gains (Section 1202 of the Internal Revenue Code (the
"Code"); (b) any deduction for depletion (Section 611 et seq. of the
Code); (c) any exclusion for interest on tax-exempt municipal
obligations (Section 103 of the Code); and (d) any losses of a
partnership
<PAGE>
allocated to the individual limited partner (as reported on Schedule E of
Form 1040).
I hereby execute this Subscription Agreement as of the date shown
below:
Social Security or Tax I.D. No.:
Place of Residence:
Mailing Address:
Subscription Date:
SHARES SUBSCRIBED FOR:
Name(s) of Subscriber(s) Purchaser Representative, if
(Printed or Typed) any (Printed or Typed)
Signature(s) Signature(s)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
ACCEPTED AND AGREED TO as of the Subscription Date set forth above:
National Venture Capital Fund, Inc.
By:
Authorized Officer
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
