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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
VIAVID BROADCASTING, INC.
(Exact name of Company as specified in its charter)
NEVADA 98-020-6168
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 520, 625 Howe Street
Vancouver, British Columbia, Canada V6C 2T6
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: 604-669-0047
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
25,000,000 Shares of Common Stock
(Title of class)
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TABLE OF CONTENTS
Page
COVER PAGE 1
TABLE OF CONTENTS 2
PART I 3
DESCRIPTION OF BUSINESS 3
DESCRIPTION OF PROPERTY 14
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT
EMPLOYEES 15
REMUNERATION OF DIRECTORS AND OFFICERS 16
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN
SECURITYHOLDERS 17
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN
TRANSACTIONS 18
SECURITIES BEING REGISTERED 19
PART II 20
MARKET PRICE OF AND DIVIDENDS ON THE
REGISTRANT'S COMMON EQUITY AND OTHER
STOCKHOLDER MATTERS 20
LEGAL PROCEEDINGS 21
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 21
RECENT SALES OF UNREGISTERED SECURITIES 21
INDEMNIFICATION OF DIRECTORS AND OFFICERS 22
PART F/S 24
FINANCIAL STATEMENTS 24
PART III 25
INDEX TO EXHIBITS 25
SIGNATURES 26
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PART I
The issuer has elected to follow Form 10-SB, Disclosure Alternative
2.
Item 6. Description of Business
CORPORATE BACKGROUND
1. Corporate Organization
ViaVid Broadcasting, Inc. (the "Company") is a Nevada corporation
incorporated on January 20, 1999.
The Company conducts its business through its wholly owned
operating subsidiary, ViaVid Broadcasting Corp. ("ViaVid"). ViaVid
is a British Columbia company incorporated on July 26, 1994.
2. Acquisition of ViaVid Broadcasting Corp
The Company acquired ViaVid pursuant to an Acquisition Agreement
dated January 26, 1999 by and between the Company and Mr. Paul
Watkins, Ms. Cheryl Watkins, 549419 BC Ltd. and Kathler Holdings
Inc. (the "Acquisition Agreement"). As consideration for this
transfer, the Company issued to Mr. Paul Watkins, Ms. Cheryl
Watkins, 549419 BC Ltd. and Kathler Holdings Inc. a total of
5,100,000 restricted shares of common stock of the Company.
THE VIAVID BUSINESS
ViaVid provides its customers with video production and Internet
news broadcasting and dissemination services (the "ViaVid
Business"). The ViaVid Business is carried on through ViaVid's web
site on the Internet at "www.viavid.com" (the "ViaVid Web Site").
It is the intent of the Company as part of its business plan to
develop an internet video broadcasting company that offers a wide
variety of video services utilizing streaming video technology.
1. Development of the ViaVid Business
The ViaVid Business is still in the development stage. ViaVid
started development of the ViaVid Business in November, 1998.
ViaVid established the ViaVid Web Site in January, 1999. The
Company has spent $147,249 in developing the ViaVid Business and
acquiring assets for the ViaVid Business during the period from its
incorporation to May 31, 1999. The ViaVid Business has generated
revenues of $7,570 during the period from its incorporation to May
31, 1999.
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2. Further Description of the ViaVid Business
The Company is targeting public and financial companies as its
customer base. The Company plans to offer the following services to
these customers:
1. Video production of news releases, corporate events and
corporate announcements;
2. broadcast and dissemination of video productions from the
ViaVid Web Site over the Internet;
3. assistance in making video productions available from the
customer's web site.
The Company has completed the development of its web site and is
now in the process of starting video productions for customers and
broadcasting these video productions via the Internet.
The Company has also started developing its own financial news
broadcasts and video tapes for dissemination from the ViaVid Web
Site.
3. Format of the ViaVid Web Site
The Company has developed the ViaVid Web Site with the objective of
creating a financial resources site in which Internet users can
access and view video productions of the Company's customers and
the Company's own financial news broadcasts. The ViaVid Web Site
has been developed to enable users to access "channels". The
Company launched its first channel, VBC News 1, in the first
quarter of 1999. With sufficient funding, the Company plans to
launch additional channels for broadcast via the ViaVid Web Site.
An Internet user accessing the ViaVid Web Site is presented with
options on which video productions or financial news broadcasts to
view. Upon selection, the ViaVid Web Site launches a "streaming"
media program that enables the video production to be viewed by the
user more efficiently. "Streaming" is the term used for computer
data media files that begin playing at the same time they are being
transmitted to the user's computer. As the name streaming
suggests, files flow like a stream. Rather than attempting to send
a whole reservoir of data at one time, streaming sends the first
part of an audio or video clip through the Internet first, and
then, while that clip is playing, the rest of the data is sent,
arriving in time to be played. To make sure playback isn't
interrupted if logjams slow the network, the player collects a
small backlog of data, called a buffer, before it starts playing
the first clip. If the data keeps flowing fast enough, playback is
continuous. Thus, users only have to wait the few seconds it takes
to create a buffer before viewing a file, regardless of whether the
file lasts 30 seconds or 30 minutes.
The ViaVid Web Site also displays the Company's logo and
advertisements from advertisers who have arranged to post their ads
on the site.
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REVENUE OPPORTUNITIES
The Company's objective is to derive revenue from three distinct
services:
(1) The broadcast of corporate overviews, press releases and
interviews with officials from public companies in the
financial markets.
(2) Advertising.
(3) Hosting and server storage of video footage and web content
for corporate clients.
1. The Broadcast of Corporate Information
The Company will produce and broadcast corporate overviews,
updates, press releases and financial information for publicly
traded companies to its viewing audience. The goal is to make
these broadcasts a regular part of each customer's financial news
dissemination process. As a customer releases news, a ViaVid news
crew will arrive at the company's office, or any other pre-arranged
location, to video company officials announcing their news in
detail. The video footage would then be immediately edited into a
streaming Internet video format and broadcast on ViaVid's VBC News
1 Channel from the ViaVid Web Site. The video footage may also be
broadcast from the customer's own web site and other strategic
financial sites. All footage shown outside of the ViaVid VBC News
1 Channel will be clearly identified as ViaVid footage with ties
back to the ViaVid Channel. A fee will be charged to customers for
the broadcast and dissemination of this information. The Company
will re-evaluate the fees charged as market acceptance is achieved
and demand for the Internet broadcasting services increases. Each
customer that broadcasts will bring its own audience to the channel
which ViaVid will attempt to retain through its daily programming.
2. Advertising
As in the television broadcast industry, the Company anticipates
that advertising revenues will make up the bulk of its future
revenue. The Company has developed the VBC News 1 Channel to take
advantage of advertising revenue while broadcasting its news. The
ViaVid Web Site can display multiple advertisements while
broadcasting its video coverage through the VBC 1 Channel. This
advertising format has been devised by the Company in order to
increase potential advertising revenues.
3. Hosting and Storage of Video Footage and Web Content
The Company will maintain the archived video footage produced for
its corporate clients on its servers so that the footage can be re-
broadcast on demand from the VBC News 1 Channel, the customer's own
web site or other financial sites. The Company proposes to charge
its customers a monthly fee for the maintenance and storage of this
footage. Again, the Company proposes to evaluate increases in the
fee charged as demand for the service increases. ViaVid will also
offer the
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service of hosting and updating its customers' web sites
for a monthly fee. In early marketing tests, a number of the
companies requested the ViaVid video footage be incorporated into
their web sites and indicated that they would rely on ViaVid's
expertise with video on the web to provide them with the necessary
web site programming.
BUSINESS DEVELOPMENT AND MARKETING STRATEGY
The Company has undertaken minimal marketing efforts to date,
having focused largely on the development of the ViaVid Web Site.
With the ViaVid Web Site and the VBC News 1 Channel now in
operation, the Company is preparing to initiate more significant
marketing efforts.
The Company's objective is to become the Internet broadcasting site
of choice for public companies and the financial services industry.
The Company intends to achieve this objective by pursuing the
following key strategies:
1. Offering a Unique Corporate News Broadcasting Service.
The Company believes the ViaVid Web Site offers a unique venue for
public companies wanting to broadcast corporate news and
information on the Internet. The Company will target public and
financial services companies as customers in order to educate them
on the availability of the Company's service and technology. The
Company believes that many potential customers are not aware of the
Company's services and would take advantage of Internet
broadcasting if the opportunity is presented to them.
2. Increasing Awareness of the Web Site.
The Company operates in a market in which strong brand recognition
is critical to differentiating itself and attracting a high-level
of customer awareness and user traffic. Accordingly, the Company's
strategy is to increase its visibility and brand recognition
through a variety of marketing and promotional techniques.
Specifically, the Company intends to increase points of access by
forming relationships with, and advertising on, leading web sites,
such as StockHouse, Canada Stockwatch Carlson Online, E*Trade, PC
Quote etc. Premier positioning on these sites is intended to give
the ViaVid Web Site credibility with potential clients who are
unfamiliar with the Company. The Company also proposes to reinforce
the ViaVid brand in users' minds by employing consistent branding
from the design of the ViaVid Web Site and logo.
The Company will pursue co-marketing arrangements by cross-linking
with other web sites on the Internet. The Company may post links
to other web sites in return for that site posting the Company's
link. The Company proposes to pursue cross-linking only where
there is a mutually beneficial synergy with other web sites.
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3. Promote Repeat Visits.
The Company has designed the ViaVid Web Site with an attractive and
engaging format in order to enhance the experience of users and
encourage repeat visits. The Company believes that repeat visits
can be further encouraged by the addition of new video content on
a daily basis.
4. Expansion of the Capabilities of the ViaVid Web Site.
The Company will attempt to continually enhance the functionality
and attractiveness of the ViaVid Web Site by regularly updating the
technology used to broadcast video information. The Company
proposes to expand the capability of the ViaVid Web Site by adding
additional channels according to perceived market demand.
5. Customer Monitoring and Data Gathering.
The Company believes that increased information regarding the
customers using the ViaVid Web Site will assist the Company in
marketing the ViaVid Web Site and increasing revenues. At present,
the Company gathers minimal information regarding users of the
site. The Company is proposing to expand the capability of the
ViaVid Web Site to obtain personal and business profile information
on users. This information will assist in marketing the site to
advertisers who are prepared to pay for the placement of ads on the
site. Information regarding the location, nature of business,
income level and other marketing criteria of users of the ViaVid
Web Site will assist in developing user profiles which will assist
in maximizing advertising revenue and marketing the Company's video
production and broadcast services.
6. Expand the Revenue Generating Capacity of the ViaVid Web Site
The Company will pursue alternate revenue streams for the ViaVid
Web Site and the ViaVid Business. The Company also proposes to
pursue arrangements with other companies whereby the Company may
earn a commission or fee based on customers referred to web sites
operated by other companies.
TECHNOLOGY
The Company uses commercially available licensed technology to
operate the ViaVid Web-Site.
1. Commercially Available Licensed Technology
The Company licenses commercially available technology whenever
possible instead of purchasing custom-made or internally developed
solutions. The Company believes that this strategy lowers operating
costs, and allows it to concentrate more fully on creating content
for the VBC News 1 Channel and developing new channels.
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2. Operations
Substantially all of the Company's communications hardware and
computer hardware is located at a leased facility in Vancouver,
British Columbia, Canada. As a result, the Company's systems are
vulnerable to damage from earthquake, fire, floods, power loss,
telecommunications failures, break-ins and similar events. The
Company does not presently have fully redundant systems and has not
yet completed implementing a formal disaster recovery plan.
Despite the implementation of network security measures, the
Company's servers are also vulnerable to computer viruses, physical
or electronic break-ins, attempts by third parties deliberately to
exceed the capacity of the Company's systems and similar disruptive
problems. The Company's coverage limits on property and business
interruption insurance may not be adequate to compensate the
Company for all losses that may occur.
The Company uses independent Internet Service Providers to provide
connectivity to the Internet, Internet traffic and data routing
services and email services for the Company. The Company believes
that these telecommunication and Internet service facilities are
essential to its operation and anticipates upgrading these
facilities, though more costly, telecommunication services in the
future.
INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS
The Company's performance and ability to compete are dependent to
a significant degree on its proprietary content. The Company relies
on a combination of trademark, copyright and trade secret laws, as
well as confidentiality agreements and non-compete agreements
executed by employees and consultants as the means to establish and
protect its proprietary rights.
The Company has recently sent in an application to trademark the
"ViaVid" name in Canada, but has not, as yet, received confirmation
that the trademark was issued. No application for trademark
protection has been made in the United States. Note, that there is
no assurance that the Company will be able obtain a trademark for
the "ViaVid" name, or that once obtained it will stand up to
objections by others who have made prior use of the name. It is
also possible that competitors of the Company or others will adopt
product or service names similar to "ViaVid" or other service marks
or trademarks of the Company, thereby impeding the Company's
ability to build brand identity and possibly leading to customer
confusion. The inability of the Company to protect the name
"ViaVid" adequately could have a material adverse effect on the
Company's business, results of operations and financial condition.
The Company also relies on a variety of technologies that it
licenses from third parties, including its Internet server
software, which is used in the Company's ViaVid Web Site to perform
key functions. There can be no assurance that these third-party
technology licenses will continue to be available to the Company on
commercially reasonable terms. The loss or inability of the Company
to maintain or obtain upgrades to any of these technology licenses,
could result in delays in completing enhancements and have a
material adverse effect on the Company's business, results of
operations and financial condition.
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COMPETITION
In general, business on the Internet is rapidly being developed by
companies with greater technical and financial resources than the
Company. Competitors may target the Company's business directly
and may offer services comparable to the Company's at no cost or at
prices below the Company's cost. There is no assurance that the
Company will have the financial or technical resources to compete
with such action or competitors.
The Internet news dissemination market is new, rapidly evolving and
intensely competitive, and the Company expects competition to
intensify in the future. The Company currently or potentially
competes with a variety of other companies. These competitors
include:
(i) Visual Data Corporation;
(ii) a number of indirect competitors that specialize in Internet news
broadcasting;
(iii) conventional news broadcasting and dissemination services, including
television, newspapers, and magazines;
(iv) a variety of other companies that offer services similar to that of the
Company.
Increased competition is likely to result in reduced operating
margins, loss of market share and reduced revenues, any one of
which could materially adversely affect the Company's business,
results of operations and financial condition. Many of the
Company's current and potential competitors have significantly
greater financial, marketing, customer support, technical and other
resources than the Company. As a result, such competitors may be
able to attract potential users away from the ViaVid Web-Site, and
they may be able to respond more quickly to changes in customer
preferences or to devote greater resources to the development,
promotion and sale of their web sites than can the Company.
PLAN OF OPERATIONS
The Company currently intends to pursue the following plan of
operations during the next twelve months:
1. The Company will continue to develop a customer base of public
and financial companies who will use the Company services for
digital video productions and Internet broadcasting;
2. The Company will continue to develop the VBC News 1 Channel
for broadcast from the ViaVid Web Site;
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3. The Company will evaluate additional channels for broadcast
from the ViaVid Web Site, depending on market demand;
4. The Company will evaluate whether to set up an additional
office or offices in additional cities in order to expand the
business of the Company and meet customer demand;
5. The Company will expand the ViaVid Web Site to attempt to
extract marketing information and data from users in order to
obtain a basis for earning advertising revenue;
6. The Company will purchase additional equipment to expand the
ViaVid digital video production studio and video production
capabilities.
Notwithstanding the above plan of operations, as the Company has
had a short operating history with minimal revenues, the management
anticipates continuing operating losses in the foreseeable future.
The Company bases this expectation in part on the following:
1. The Company will incur substantial marketing expense in order
to advertise and promote the ViaVid Web Site, to establish a
customer base and to increase the usage of the ViaVid Web
Site.
2. Increased usage of the ViaVid Web Site will lead to increased
operating expenses and require additional capital expenditures
on new computer equipment, software and technology.
3. Operating expenses will continue to increase as the Company
expands the technical capabilities of the ViaVid Web Site.
4. Operating expenses will increase as the Company solicits
potential customers and completes video productions for
customers for broadcast via the ViaVid Web Site.
5. Operating expenses will increase as the Company solicits
potential advertisers and attempts to enter into agreements
for advertising on the ViaVid Web Site.
6. Operating expenses will increase as the Company undertakes to
implement programs to monitor usage of the ViaVid Web Site and
develops customer profiles of its users.
Even so, it should be noted that the Company's future financial
results are uncertain due to a number of factors, many of which are
outside the Company's control. These factors include, but are not
limited to:
1. the ability to increase usage of the ViaVid Web Site;
2. the ability to attract customers who are prepared to pay for
broadcast of video productions via the ViaVid Web Site;
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3. the timing, cost and availability of advertising on other web
sites comparable to the Company's and over other media;
4. the amount and timing of costs relating to expansion of the
Company's operations;
5. the announcement or introduction of competing web sites and
products of competitors; and
6. general economic conditions and economic conditions specific
to the Internet and electronic commerce.
The above statements are forward looking statements. Actual
results of the Company and the Company's actual plan of operations
may differ materially from what is stated above. Factors which may
cause the actual results of the Company or its actual plan of
operations to vary include, among other things, decisions of the
board of directors not to pursue a specific course of action based
on its re-assessment of the facts or new facts, changes in the
Internet business or general economic conditions and those other
factors identified herein. The Company relies upon the protection
afforded forward-looking statements provided by the laws and
regulations provided under the United States Securities Act of 1933
and the Securities and Exchange Act of 1934.
EMPLOYEES
The services of Mr. Brian Kathler, President of the Company, are
provided pursuant to a Consulting Contract dated February 1, 1999
by and between the Company and Kathler Holdings Inc ("Kathler
Agreement"). The Kathler Agreement requires, among other things,
that Mr. Brian Kathler will act as the Company's President,
providing the following services: (1) exercising general direction
and supervision over the business and financial affairs of the
Company; (2) providing overall direction to the management of the
Company; (3) managing the day to day operations of the Company; (4)
performing such other duties and observing such instructions as may
be reasonably assigned to him from time to time by the Board of
Directors; and (5) generally at all times abiding by all lawful
directions given to him by the Board of Directors of the Company.
The Kathler Agreement provides for a term of 1 year and
compensation to Kathler Holdings Inc. of $5,000CDN per month. The
services of Mr. Kathler under this agreement are on a full time
basis. A copy of the Kathler Agreement is provided herewith and
made a part hereof by this reference. For more information on Mr.
Kathler, see the section on "Directors, Executive Officers and
Significant Employees" below.
The services of Mr. Paul Watkins as director and consultant are
provided to the Company pursuant to a Consulting Contract between
the Company and Watkins Communications Ltd. ("Watkins Agreement").
The Watkins Agreement requires, among other things, that Mr. Paul
Watkins act as the Company's director and consultant, providing the
following services: (1) exercising general direction and
supervision over the marketing and development of the business of
the Company; (2) providing direction to the management of the
Company; (3) assisting with the day to day operations of the
Company; (4) performing such other duties and observing such
instructions as may be
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reasonably assigned to him from time to time
by the Board of Directors; and (5) generally at all times abiding
by all lawful directions given to him by the Board of Directors of
the Company. The Watkins Agreement provides for a term of 1 year
and compensation to Watkins Communications Inc. of $5,000CDN per
month. The services of Mr. Watkins under this agreement are on a
full time basis. A copy of the Watkins Agreement is provided
herewith and made a part hereof by this reference. For more
information on Mr. Watkins, see the section on "Directors,
Executive Officers and Significant Employees" below.
The Company employs Ms. Cheryl Watkins as its Secretary and
Treasurer to provide administrative, accounting and corporate
services to the Company. Ms. Watkins is an employee at will
without a written employment agreement, and is paid $4,000CDN per
month for her services. For more information on Ms. Watkins, see
the section on "Directors, Executive Officers and Significant
Employees" below.
The services of Mr. O. Ronald Jones as Vice President of finance
are provided on a part time basis as an independent contractor,
without any formal written agreement with the Company. Consulting
fees paid to Mr. Jones are made on the basis of actual services
provided, as and when agreed by the Board of Directors.
The Company has four additional contract personnel who provide
video production services to the Company. These individuals an
their duties are:
Name of Consultant Duties
- ------------------ --------------------------------
Erica Henderson Videographer, Films video shoots
and edits video for streaming on
internet
Chelsea Atchison Video Production Coordinator.
Organizes video shoots and
provides production assistance
for VBC News 1
Aubyn Freybe-Smith Video Editor. Edits all video
shoots prior to streaming on the
internet
Michael Moore Broadcaster
The Company has no written employment or consulting agreements with
any of the above-named persons.
None of the Company's employees are represented by a labor union,
and the Company considers its employee relations to be good.
Competition for qualified personnel in the Company's industry is
intense, particularly for software development and other technical
staff. The Company believes that its future success will depend in
part on its continued ability to attract, hire and retain qualified
personnel.
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The Company does not maintain key person life insurance.
The Company also depends on several third parties in conducting
operations, including the following:
* the Company does not own a gateway onto the Internet, but
instead relies on an Internet service provider to connect the
ViaVid Web Site to the Internet; and
* the ViaVid Web Site depends on operating system, database, and
server software that has been developed, produced by and
licensed from third parties.
The Company has limited control over these third parties and has no
long-term relationships with any of them. If the Company is unable
to develop and maintain satisfactory relationships with such third
parties on acceptable commercial terms, or if the quality of
products and services by such third parties falls below a
satisfactory standard, the Company's business could be harmed.
Also, any loss of or inability to maintain or obtain upgrades to
certain of its technology licenses could result in delays in
developing the Company's systems until equivalent technology could
be identified, licensed or developed, and integrated.
RESEARCH AND DEVELOPMENT EXPENDITURES
Since the commencement of the ViaVid business in November, 1998,
the following amounts have been spent by ViaVid on research and
development activities:
November 1,1998 to
May 31, 1999
------------------
ViaVid Broadcasting Corp. $119,480
Research and development activities have consisted of the
development of the ViaVid Web Site and the VBC News 1 Channel.
GOVERNMENT REGULATION
Due to the increasing popularity and use of the Internet, it is
likely that a number of laws and regulations may be adopted with
respect to the Internet generally, covering issues such as user
privacy, pricing, and characteristics and quality of products and
services. Similarly, the growth and development of the market for
Internet commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on those
companies conducting business over the Internet. The adoption of
any additional laws or regulations may decrease the growth of
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commerce over the Internet, increase the cost of doing business or
otherwise have a harmful effect on the Company's business.
Government regulation may also impact the introduction of high
speed Internet access to consumers. The functionality of the
ViaVid Web Site and its attractiveness to users is enhanced using
high speed Internet access over conventional access.
The Company may have to qualify to do business in other
jurisdictions. As the Company's broadcasts will be available over
the Internet in multiple states and foreign countries, such
jurisdictions may claim that the Company is required to qualify to
do business as a foreign Company in each such state and foreign
country. Failure to qualify as a foreign company in a jurisdiction
where required to do so could subject the Company to taxes and
penalties.
There are no material environmental protection laws that will apply
to or effect the Company's business.
TRADING OF THE COMPANY'S COMMON STOCK
There is currently no market for the Company's common stock and
there is no assurance that a market will develop. If a market
develops, the Company anticipates that the market price of its
common stock will be subject to wide fluctuations in response to
several factors, such as:
* actual or anticipated variations in the Company's results of
operations;
* the Company's ability or inability to generate new revenues;
* increased competition; and
* conditions and trends in the Internet and electronic commerce
industries.
Further, the Company hopes to have its common stock traded on the
Nasdaq OTC Bulletin Board. Companies traded on the OTC Bulletin
Board have traditionally experienced extreme price and volume
fluctuations. The Company's stock price may be adversely impacted
by factors which are unrelated or disproportionate to the operating
performance of the Company. The trading prices of many technology
companies' stocks are currently at or near historical highs and
reflect price earnings ratios substantially above historical
levels. These market fluctuations, as well as general economic,
political and market conditions such as recessions, interest rates
or international currency fluctuations may adversely affect the
market price of our common stock.
Item 7. Description of Property
The primary business activities of the Company and ViaVid are
carried on at leased premises located at Suite 520, 625 Howe Street
Vancouver, British Columbia, Canada V6C 2T6. The premises are
comprised of 1,862 square feet and are leased for a term of one
year expiring on February 29, 2000. The Company does not lease or
own any other property.
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Item 8. Directors, Executive Officers and Significant Employees
The following information sets forth the names of the officers and
directors of the Company, their present positions, ages and
biographical information.
Directors
Name of Director Age
- ---------------- ---
Brian Kathler 36
Paul Watkins 35
Officers
Name of Officer Age Office
- --------------- --- ------
Brian Kathler 36 President
Cheryl Watkins 30 Secretary/Treasurer
O. Ronald Jones 56 Vice-President of
Finance
Mr. Brian Kathler is a director and the President of the Company
and ViaVid. He has served as a director of ViaVid since October
31, 1998. Mr. Kathler has been employed since 1994 as follows:
1994 - 1996 MPR Teltech, Senior Software Engineer,
Team Lead
1996 - 1997 Riptide Technologies, Director Consulting
Services
July 1997 - Nov. 1998 Self employed computer consultant.
Dec. 1998 - Present ViaVid Broadcasting Corp., President and
Director
Mr. Kathler possesses more than fourteen years of experience in the
computer software development, consulting and management industry.
Most recently, Mr. Kathler has provided technical consulting
services to several public companies based in Vancouver, British
Columbia, Canada as a self-employed computer consultant. Mr.
Kathler was a co-founder and a director of Riptide Technologies
based in Surrey, British Columbia, Canada from 1996 to 1997. Over
his fourteen years, Mr. Kathler has worked in a number of areas of
the software development industry ranging from programming to
assisting companies in getting started.
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Mr. Paul Watkins is a director of the Company and ViaVid and is the
founder of Watkins Communications Inc., an Internet marketing and
news dissemination company with clients in the financial industry.
Watkins Communications Inc. has numerous clients listed on the
Vancouver Stock Exchange, Alberta Stock Exchange and Toronto Stock
Exchange for which it electronically files and disseminates press
releases and financial information. Mr. Watkins has a background
in computer sciences and has over 10 years experience in the
business of investor communications. Mr. Paul Watkins and Ms.
Cheryl Watkins are husband and wife.
Mr. Watkins has been the President and Director of Watkins
Communications Inc. from 1994 to the present.
Ms. Cheryl Watkins is the Secretary/Treasurer of the Company and
ViaVid. Ms. Watkins has over 10 years of experience as a legal
assistant in the area of securities and corporate commercial work.
She is the co-founder of Watkins Communications Inc., a British
Columbia company which provides public companies with a variety of
investor communications services. Ms. Watkins has been employed
since 1994 as follows:
Oct 98 - Present ViaVid Broadcasting Corp. - Corporate
Secretary, Treasurer, and Administration
Oct 97 - Present Watkins Communications Inc. - Corporate
Secretary and Administrative Consultant for
Publicly Traded Companies
Mar 97 - Jul 98 Princeton Financial Services -
Administrator and Legal Support
Mar 96 - Mar 97 Gerald J. Shields Law Corp - Administrator
and Legal & Accounting Support
Feb 94 - Mar 96 Strategic Capital - Administrator and
Legal & Accounting Support
Mr. O. Ronald Jones is Vice-President of Finance of the Company.
Mr. Jones is the president and a director of O. Jones Financial
Corp., a private company which provides corporate finance and
investor relation services. Mr. Jones has been president and
director of O. Jones Financial Corp. since 1994.
Item 9. Remuneration of Directors and Officers
The following table sets forth certain information as to the
Company's three highest paid officers and directors for the period
from the commencement of the ViaVid Business to May 31, 1999. No
other compensation was paid to any such officer or directors other
than the cash compensation set forth below.
16
<Page 17>
SUMMARY COMPENSATION TABLE
Name of Individual or Capacities in which Aggregate
Identity of Group Remuneration was Received Remuneration
- --------------------- ------------------------- ------------
Brian Kathler Director and President $17,077
Paul Watkins Director $17,077
Cheryl Watkins Secretary/Treasurer $ 9,562
O. Ronald Jones Vice President, Finance $ 7,172
Officers and Directors Directors and Officers $50,888
of the Company as a Group
*Payment is made in Canadian Dollars, but is provided above in US
Dollars based on a conversion rate of 1.464 Canadian to $1.00 U.S.
as of June 15, 1999.
The Company anticipates compensation being increased to upon the
Company achieving sufficient revenues and/or financing to pay such
increased compensation.
Item 10. Security Ownership of Management and Certain Security
Holders
The following table sets forth, as of May 31, 1999, the beneficial
ownership of the Company's Common Stock by each officer and
director of the Company, by each person known by the Company to
beneficially own more than 10% of the Company's Common Stock
outstanding, and by the officers and directors of the Company as a
group. Except as otherwise indicated, all shares are owned
directly.
Name and address Number of Shares Percentage of
Title of class of beneficial owner of Common Stock Common Stock(1)
- -------------- ------------------- ---------------- ---------------
Common Stock Brian Kathler(2) 1,700,000 28.9%
Director, President
40 - 16061 85th Avenue
Surrey, BC V4N 4Y5
Common Stock Paul Watkins 850,000 14.4%
Director
187 East Braemar Road
North Vancouver, BC
V7N 1P7
17
<Page 18>
Common Stock Cheryl Watkins 850,000 14.4%
Secretary
and Treasurer
187 East Braemar Road
North Vancouver, BC
V7N 1P7
Common Stock O. Ronald Jones 300,000 5.1%
Vice-President, Finance
Suite 605 - 1155 Homer Street
Vancouver, BC V6C 5T5
Common Stock Bob Gamon(3) 1,700,000 28.9%
4768 Woodgreen
West Vancouver, BC
Common Stock All Officers and
Directors 3,700,000 62.9%
as a Group (4 persons)
(1) Based on 5,884,000 shares of Common Stock of the Company
issued and outstanding on May 31, 1999
(2) The 1,700,000 shares of common stock beneficially owned by
Brian Kathler are registered in the name of Kathler Holdings
Inc.
(3) The 1,700,000 shares of common stock beneficially owned by Bob
Gamon are registered in the name of 549419 BC Ltd., a private
company. Mr. Gamon is the sole director and officer of 549419
BC Ltd. and is the owner of all of the voting common shares of
549419 BC Ltd.
There are no options, warrants or rights to purchase securities
issued by the Company or any of its subsidiaries held by any of the
above named individuals.
Item 11. Interest of Management and Others in Certain Transactions
Except as set forth below, none of the following persons has any
direct or indirect material interest in any transaction to which
the Company is a party since the incorporation of the Company in
January, 1999, or in any proposed transaction to which the Company
is to be a party:
(A) any director or officer of the Company;
(B) any proposed nominee for election as a director of the
Company;
(C) any person who beneficially owns, directly or indirectly,
shares carrying more than 10% of the voting rights
attached to the Company's common stock; or
18
<Page 19>
(D) any relative or spouse of any of the foregoing persons,
or any relative of such spouse, who has the same house as
such person or who is a director or officer of any parent
or subsidiary of the Company.
The Company acquired ViaVid pursuant to the acquisition agreement
dated January 26, 1999 between the Company and Mr. Paul Watkins,
Ms. Cheryl Watkins, 549419 BC Ltd. and Kathler Holdings Inc. Mr.
Brian Kathler is a director and President of the Company and is a
director and the owner of 60% of the voting shares of Kathler
Holdings Inc., a private company. Kathler Holdings Inc. was issued
1,700,000 shares of the Company's common stock on completion of the
Acquisition Agreement. Mr. Paul Watkins is a director of the
Company and was issued 850,000 shares of the Company's common stock
on completion of the Acquisition Agreement. Ms. Cheryl Watkins is
the Secretary/Treasurer of the Company and was issued 850,000
shares of the Company's common stock upon completion of the
Acquisition Agreement. Mr. Bob Gamon is a director and is the
owner of all of the voting shares of 549419 BC Ltd., a private
company . 549419 BC Ltd. was issued 1,700,000 shares of the
Company's common stock on completion of the Acquisition Agreement.
The shares issued to 549419 BC Ltd. represent more than 10% of
the voting rights attached to the Company's common stock
outstanding.
In addition, Kathler Holdings Inc. and Watkins Communications Inc.
have entered into consulting contracts (attached hereto), in which
those companies provide the services of Mr. Brian Kathler as
President and Mr. Paul Watkins as director and consultant,
respectively, in exchange for a payment of $5,000 per month each.
See Section on "Employees" provided above.
Item 12. Securities Being Registered
The securities being registered are the shares of the Company's
common stock, par value $0.001 per share. Under the Company's
Articles of Incorporation, the total number of shares of all
classes of stock that the Company has authority to issue is
25,000,000 shares of common stock, par value $0.001 per share (the
"Common Stock"). As of June 15, 1999, a total of 5,984,000 shares
of Common Stock are issued and outstanding. All issued and
outstanding shares of the Common Stock are fully paid and
non-assessable.
Common Stock
Holders of Common Stock have the right to cast one vote for each
share held of record on all matters submitted to a vote of holders
of Common Stock, including the election of directors. Holders of
Common Stock do not have cumulative voting rights in the election
of directors. Holders of a majority of the voting power of the
Common Stock issued and outstanding and entitled to vote,
represented in person or by proxy, are necessary to constitute a
quorum at any meeting of the Company's stockholders, and the vote
of the holders of a majority of such outstanding shares is required
to effect certain fundamental corporate changes such as
liquidation, merger or amendment of the Company's Articles of
Incorporation.
19
<Page 20>
Holders of Common Stock are entitled to receive dividends pro rata
based on the number of shares held, when, as and if declared by the
Board of Directors, from funds legally available therefor. In the
event of the liquidation, dissolution or winding up of the affairs
of the Company, all assets and funds of the Company remaining after
the payment of all debts and other liabilities shall be
distributed, pro-rata, among the holders of the Common Stock.
Holders of Common Stock are not entitled to pre-emptive or
subscription or conversion rights, and there are no redemption or
sinking fund provisions applicable to the Common Stock. All
outstanding shares of Common Stock are fully paid and non-
assessable.
Transfer Agent
Pacific Stock Transfer of Las Vegas, Nevada is the transfer agent
for the Shares.
Share Purchase Warrants
The Company has not issued and does not have outstanding any
warrants to purchase shares of the Common Stock.
Options
The Company has not issued and does not have outstanding any
options to purchase shares of the Common Stock. The Company
anticipates approving an incentive stock option plan for its
directors, officers, employees and permitted consultants.
Convertible Securities
The Company has not issued and does not have outstanding any
securities convertible into shares of Common Stock or any rights
convertible or exchangeable into shares of Common Stock.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Stockholder Matters
There is no present public market for the Company's Common Stock.
The Company anticipates applying for a listing on the OTC
Bulletin Board upon effectiveness of this registration statement.
There can be no assurance that a public market will materialize.
As of the date of this registration statement, there were twenty
seven (27) registered shareholders in the Company.
20
<Page 21>
None of the holders of the Company's common shares have any right
to require the Company to register its common shares pursuant to
the Securities Act of 1933.
The Company has not declared any dividends since its incorporation
in January, 1999. There are no dividend restrictions that limit
the Company's ability to pay dividends on Common Stock.
Item 2. Legal Proceedings
The Company is not currently a party to any legal proceeding which
may or could have a material adverse impact on the Company or its
operations.
Item 3. Changes in and Disagreements with Accountants
The Company has had no changes in or disagreements with its
accountants since its incorporation in January, 1999.
Item 4. Recent Sales of Unregistered Securities
The Company completed the issuance of 5,100,000 common shares on
January 27, 1999 pursuant to the Acquisition Agreement to the
persons and companies noted herein. These shares were issued
pursuant to Section 4(2) of the Securities Act of 1933 to the
former shareholders of ViaVid, each of whom is now a director,
officer or owner of more than 10% of the Company's issued and
outstanding common stock. The 5,100,000 shares of common stock are
"restricted" shares, as defined in the Act.
The Company completed an offering of 500,000 shares of Common Stock
to two (2) purchasers at a price of $0.01 per share on February 2,
1999. The purchasers were O. Ronald Jones, Vice-President of
Finance of the Company, and David Jones, the son of Ronald Jones.
The offering was completed pursuant to Rule 504 of Regulation D of
the Act.
The Company completed an offering of 100,000 shares of Common Stock
to eight (8) purchasers at a price of $0.50 per share on February
12, 1999 pursuant to Rule 504 of Regulation D of the Act. The
offering was completed to persons known to the officers and
directors of the Company.
The Company completed an offering of 184,000 common shares to
twelve (12) purchasers at a price of $1.00 per share on April 5,
1999 pursuant to Rule 504 of Regulation D of the Act. The offering
was completed to persons known to the officers and directors of the
Company.
The Company completed an offering of 100,000 common shares to one
(1) purchaser at a price of $1.00 per share on June 14, 1999
pursuant to Regulation S. The purchaser is a private European
investor. The Company has agreed to file a registration statement
in accordance with the Act in order to qualify these shares for
resale upon effectiveness of this Registration Statement and
clearance of all of the SEC's comments.
21
<Page 22>
Item 5. Indemnification of Directors and Officers
The officers and directors of the Company are indemnified as
provided by the Nevada Revised Statutes (the "NRS") and the Bylaws
of the Company.
Under the NRS, director immunity from liability to a Company or its
shareholders for monetary liabilities applies automatically unless
it is specifically limited by a Company's Articles of Incorporation
(which is not the case with the Company's Articles of
incorporation). Excepted from that immunity are: (i) a willful
failure to deal fairly with the Company or its shareholders in
connection with a matter in which the director has a material
conflict of interest; (ii) a violation of criminal law (unless the
director had reasonable cause to believe that his or her conduct
was lawful or no reasonable cause to believe that his or her
conduct was unlawful); (iii) a transaction from which the director
derived an improper personal profit; and (iv) willful misconduct.
The By-laws of the Company provide that the Company will indemnify
its directors and officers to the fullest extent not prohibited by
Nevada law; provided, however, that the Company may modify the
extent of such indemnification by individual contracts with its
directors and officers; and, provided, further, that the Company
shall not be required to indemnify any director or officer in
connection with any proceeding (or part thereof) initiated by such
person unless (i) such indemnification is expressly required to be
made by law, (ii) the proceeding was authorized by the Board of
Directors of the Company, (iii) such indemnification is provided by
the Company, in its sole discretion, pursuant to the powers vested
in the Company under Nevada law or (iv) such indemnification is
required to be made pursuant to the By-laws.
The By-laws of the Company provide that the Company will advance to
any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director
or officer, of the Company, or is or was serving at the request of
the Company as a director or executive officer of another Company,
partnership, joint venture, trust or other enterprise, prior to the
final disposition of the proceeding, promptly following request
therefor, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by
or on behalf of such person to repay said amounts if it should be
determined ultimately that such person is not entitled to be
indemnified under the By-laws of the Company or otherwise.
The By-laws of the Company provide that no advance shall be made by
the Company to an officer of the Company (except by reason of the
fact that such officer is or was a director of the Company in which
event this paragraph shall not apply) in any action, suit or
proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made
(i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or
(ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, that the facts
22
<Page 23>
known to the decision-
making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in
a manner that such person did not believe to be in or not opposed
to the best interests of the Company.
23
<Page 24>
PART F/S
FINANCIAL STATEMENTS
The Company's audited Financial Statements, as described below, are
attached hereto.
1. Audited financial statements for the period ending March 31,
1999, including:
(a) Consolidated Balance Sheet;
(b) Consolidated Statement of Operations;
(c) Consolidated Statement of Stockholders' Equity;
(d) Consolidated Statement of Cash Flows;
(e) Notes to the Consolidated Financial Statements.
2. Consent of Auditor
24
<Page 25>
PART III
INDEX TO EXHIBITS
Exhibit 1: Articles of Incorporation
Exhibit 2: By-Laws of the Company
Exhibit 3: Acquisition Agreement dated January 26, 1999 between
the Company and Mr. Paul Watkins, Ms. Cheryl Watkins,
549419 BC Ltd. and Kathler Holdings Inc.
Exhibit 4: Consulting Contract with Kathler Holdings Inc.
Exhibit 5: Consulting Contract with Watkins Communications Inc.
25
<Page 26>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: June 15, 1999.
VIAVID BROADCASTING, INC.
By: /S/ Brian Kathler
----------------------------
BRIAN KATHLER
Director and President
26
<Page 27>
VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
MARCH 31, 1999
<Page 28>
A Partnership of
Davidson & Company Chartered Accountants Incorporated
Professionals
INDEPENDENT AUDITORS' REPORT
To the Shareholders of
Viavid Broadcasting Inc.
(A Development Stage Company)
We have audited the consolidated balance sheets of ViaVid Broadcasting
Inc. as at March 31, 1999 and the related consolidated statements of
operations, shareholders' equity and cash flows for the period from
incorporation on January 20, 1999 to March 31, 1999. These
consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in the United States of America. Those standards require
that we plan and perform an audit to obtain reasonable assurance
whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, these consolidated financial statements present
fairly, in all material respects, the financial position of the
Company as at March 31, 1999 and the results of its operations and the
changes in its shareholders' equity and cash flows for the period from
incorporation on January 20, 1999 to March 31, 1999 in accordance with
generally accepted accounting principles in the United States of
America.
The accompanying financial statements have been prepared assuming that
ViaVid Broadcasting Inc. will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company's loss
from operations raises substantial doubt as to the Company's ability
to continue as a going concern unless the company attains future
profitable operations and/or obtains additional financing. The
financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might result
from the outcome of this uncertainty.
/S/ Davidson & Company
Chartered Accountants
Vancouver, Canada
May 3, 1999
A Member of Accounting Group International
Suite 1270, Stock Exchange Tower, 609 Granville Street, P.O. Box 10372,
Pacific Centre, Vancouver, B.C., Canada V7Y 1C6
Telephone (604) 687-0947 Fax (604) 687-6172
<Page 29>
VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
(Expressed in United States Dollars)
AS AT MARCH 31, 1999
- --------------------------------------------------------------------
ASSETS
Current
Cash $ 163,406
Accounts Receivable 6,841
---------
170,247
Capital assets (Note 4) 17,510
---------
$ 187,757
- --------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 6,866
Due to related parties (Note 5) 8,459
---------
15,325
---------
Shareholders' equity
Capital stock
Authorized
25,000,000 common shares with a par value of
$0.001 per share
Allotted but not issued
5,884,000 common shares 5,884
Additional paid-in capital 238,216
Deficit accumulated during the development stage (71,668)
---------
172,432
---------
$ 187,757
- --------------------------------------------------------------------
Nature and continuance of operations (Note 1)
On behalf of the Board:
/S/ Brian Kathler Director /S/ Paul Watkins Director
The accompanying notes are an integral part of these consolidated
financial statements.
<Page 30>
VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
(Expressed in United States Dollars)
PERIOD FROM INCORPORATION ON JANUARY 20, 1999 TO MARCH 31, 1999
- --------------------------------------------------------------------
REVENUE $ 3,436
---------
EXPENSES
Consulting 36,814
Depreciation 8,049
Office and miscellaneous 7,109
Professional fees 9,931
Rent 7,798
Salary and benefits 4,289
Telephone 1,114
---------
75,104
---------
Loss for the period $ (71,668)
- --------------------------------------------------------------------
Loss per share $ (0.01)
- --------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated
financial statements.
<Page 31>
VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(Expressed in United States Dollars)
PERIOD FROM INCORPORATION ON JANUARY 20, 1999 TO MARCH 31, 1999
- --------------------------------------------------------------------
Deficit
Common Stock Accumulated
----------------- Additional During the
Number Paid-in Development
of shares Amount Capital Stage Total
- --------------------------------------------------------------------
Allotted shares
for acquisition
(Note 3) 5,100,000 $ 5,100 $ - $ - $ 5,100
Allotted shares
for cash at
$0.01 per share 500,000 500 4,500 - 5,000
Allotted shares
for cash at
$0.50 per share 100,000 100 49,900 - 50,000
Allotted shares
for cash at
$1.00 per share 184,000 184 183,816 - 184,000
Loss for the
Period - - - (71,668) (71,668)
--------- -------- --------- --------- ---------
Balance at
March 31, 1999 5,884,000 $ 5,884 $ 238,216 $ (71,668)$172,432
- --------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated
financial statements.
<Page 32>
VIAVID BROADCASTING INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in United States Dollars)
PERIOD FROM INCORPORATION ON JANUARY 20, 1999 TO MARCH 31, 1999
- --------------------------------------------------------------------
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES
Loss for the period $ (71,668)
Items not affecting cash
Depreciation 2,614
Write-down of goodwill 5,435
Changes in non-cash working capital items
Increase in accounts receivable (6,841)
Increase in accounts payable 6,866
---------
Net cash used in operating activities (63,594)
---------
INVESTING ACTIVITIES
Acquisition of capital assets (20,124)
Acquisition of subsidiary (335)
---------
Net cash used in investing activities (20,459)
---------
FINANCING ACTIVITIES
Proceeds from allotted shares 239,000
Loans from related parties 8,459
---------
Net cash provided by financing activities 247,459
---------
Cash, end of period $ 163,406
- --------------------------------------------------------------------
Supplemental disclosure for non-cash operating,
investing, and financing activities
Allotted shares for purchase of subsidiary $ 5,100
Cash paid during the period for interest -
Cash paid during the period for income taxes -
- --------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated
financial statements.
<Page 33>
VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
MARCH 31, 1999
1. NATURE AND CONTINUANCE OF OPERATIONS
ViaVid Broadcasting Inc., a Nevada corporation, was
incorporated on January 20, 1999. On January 27, 1999, the Company
completed the acquisition of ViaVid Broadcasting Corp., a Canadian
company operating in Vancouver, British Columbia, Canada.
The Company was incorporated in order to create a global
internet video broadcasting company that offers a network of video
services utilizing streaming video technology. The Company has
developed the ViaVid Investment News Channel, a site geared to
take maximum advantage of advertising revenue while broadcasting
its news.
The Company's financial statements have been presented on the
basis that it is a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business. The Company incurred a loss of
$71,668 for the period from inception to March 31, 1999. The
Company has raised, during the period, equity financing of
$239,000 and is currently seeking to raise additional equity
financing for the required capital to continue in existence and
to achieve profitable operations. The financial statements do
not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the
Company be unable to continue in existence.
2. SIGNIFICANT ACCOUNTING POLICIES
In preparing these financial statements, management is
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities as of the date of the balance
sheet and revenues and expenses for the year. Actual results in
future periods could be different from these estimates made in
the current year. The following is a summary of the significant
accounting policies of the Company:
Principles of consolidation
These consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiary, ViaVid Broadcasting
Corp. All significant inter-company balances and transactions
have been eliminated.
Capital assets
Capital assets are recorded at cost and are depreciated over
their useful lives on the declining balance method at the
following rates:
Computer equipment 30%
Office furniture 20%
Telephone and video equipment 20%
Financial instruments
The Company's financial instruments consist of cash, accounts
receivable, accounts payable and due to related parties. Unless
otherwise noted, it is management's opinion that the Company is
not exposed to significant interest, currency or credit risks
arising from these financial instruments. The fair value of
these financial instruments approximate their carrying values,
unless otherwise noted.
<Page 34>
VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
MARCH 31, 1999
2. SIGNIFICANT ACCOUNTING POLICIES (cont'd...)
Revenue recognition
Revenue is recognized once the filming and editing has been
completed.
Foreign currency translation
Financial statements of the Company's foreign subsidiary are
translated using the temporal method whereby all monetary assets
and liabilities are translated into U.S. dollars at the rate of
exchange at the balance sheet date. Non-monetary assets and
liabilities are translated at exchange rates prevailing at the
transaction date. Income and expenses are translated at rates
which approximate those in effect on transactions dates. Gains
and losses arising from restatement of foreign currency monetary
assets and liabilities at each period end are included in
earnings.
Loss per share
Loss per share is calculated using the weighted average number
of shares allotted during the period.
Segmented information
The Company conducts substantially all of its operations in
Canada in one business segment.
3. ACQUISITION OF VIAVID BROADCASTING CORP.
On January 27, 1999, the Company completed the acquisition of
ViaVid Broadcasting Corp. ("VBC"), an associated company having
common directors and officers. VBC is a Canadian company
incorporated under the laws of British Columbia on July 26, 1994.
VBC was inactive from incorporation until October 30, 1998 when
it changed its name from 477504 British Columbia Ltd. to ViaVid
Broadcasting Corp.
The Company acquired VBC pursuant to a share exchange agreement
whereby the Company agreed to issue 5,100,000 common shares to
the shareholders of VBC in exchange for their 3,000 common
shares. The Company has accounted for this transaction under the
pooling of interests. For accounting purposes under a pooling of
interests, the financial statements of the Company and its
subsidiary are deemed to have been combined for the prior and
current accounting periods. As of the date of acquisition, the
Company and VBC held no assets and had no liabilities.
4. CAPITAL ASSETS
- --------------------------------------------------------------------
Accumulated Net
Cost Depreciation Book Value
- --------------------------------------------------------------------
Computer equipment $ 12,034 $ 1,805 $ 10,229
Office furniture 5,503 550 4,953
Telephone and video
Equipment 2,587 259 2,328
-------- ------- --------
$ 20,124 $ 2,614 $ 17,510
- --------------------------------------------------------------------
<Page 35>
VIAVID BROADCASTING INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
MARCH 31, 1999
4. CAPITAL ASSETS (cont'd...)
Stock options and warrants
There are no options or warrants to purchase common shares
outstanding at March 31, 1999.
5. RELATED PARTY TRANSACTIONS
During the period, the Company entered into the following
transactions with related parties:
a) Paid consulting fees as follows:
* $20,074 to two directors of the Company
* $6,574 to an officer of the Company
* $1,673 to a director of the subsidiary
b) Paid salary of $4,015 to an officer of the Company.
c) The Company purchased from three directors, computer
equipment totalling $4,410. These same directors advanced loans to the
Company of $4,049.
6. INCOME TAXES
The Canadian operating loss for the period to date of $71,668,
may be carried forward and applied against taxable income in
future years. Future tax benefits which may arise as a result of
these losses have not been recognized in these financial
statements.
7. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems
use two digits rather than four to identify a year. Date-sensitive
systems may incorrectly recognize the year 2000 as some other
date, resulting in errors. The effects of the Year 2000 Issue
may be experienced before, on, or after January 1, 2000 and, if
not addressed, the impact on operations and financial reporting
may range from minor errors to significant systems failure which
could affect an entity's ability to conduct normal business
operations. It is not possible to be certain that all aspects
of the Year 2000 Issue affecting the Company, including those
related to the efforts of customers, suppliers, or other third
parties, will be fully resolved.
<Page 36>
A Partnership of
Davidson & Company Chartered Accountants Incorporated
Professionals
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our audit report dated
May 3, 1999, on the financial statements of ViaVid Broadcasting, Inc.
for the period ended March 31, 1999 in the Company's Form 10-SB
registration statement to be filed with the United States Securities
and Exchange Commission. We also consent to the application of such
report to the financial information in the Form 10-SB, when such
financial information is read in conjunction with the financial
statements referred to in our report.
/S/ Davidson & Company
Chartered Accountants
Vancouver, Canada
June 15, 1999
A Member of Accounting Group International
Suite 1270, Stock Exchange Tower, 609 Granville Street, P.O. Box 10372,
Pacific Centre, Vancouver, B.C., Canada V7Y 1C6
Telephone (604) 687-0947 Fax (604) 687-6172
<Page 37>
FILED Articles of Incorporation
In the office of the (PURSUANT TO NRS 78) Filing Fee:
Secretary of State of the STATE OF NEVADA Receipt #:
STATE OF NEVADA Secretary of State
JAN 20 1999
C 1261-99
/s/ Dean Heller
(For filing office use) (For filing office use)
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IMPORTANT: Read instructions on reverse side before completing
this form.
TYPE OR PRINT (BLACK INK ONLY)
1. NAME OF CORPORATION: ViaVid Broadcasting, Inc.
2. RESIDENT AGENT: (designated resident agent and his STREET
ADDRESS in Nevada where process may be served)
Name of Resident Agent: Michael A. Cane
Street Address: 101 Convention Center Dr.
Suite 1200
Las Vegas, NV 89109
3. SHARES: (number of shares the corporation is authorized to
issue)
Number of shares with par value: 25 Million Par value: $.001
No. without par value:
4. GOVERNING BOARD: shall be styled as (check one): X Directors
Trustees
The FIRST BOARD OF DIRECTORS shall consist of 1 member(s) and
the names and addresses are as follows:
Michael A. Cane 101 Convention Center Dr.
Suite #1200
Las Vegas, NV 89109
5. PURPOSE:(optional): The purpose of the corporation shall be:
6. OTHER MATTERS: This form includes the minimal statutory
requirements to incorporate under NRS 78. You may attach
additional information pursuant to NRS 78.037 or any other
information you deem appropriate. If any of the additional
information is contradictory to this form it cannot be filed
and will be returned to you for correction. Number of pages
attached 0 .
7. SIGNATURES OF INCORPORATORS: The names and addresses of each
of the incorporators signing the articles.
Michael A. Cane
P.O. Box 12927, Las Vegas, NV 89112
/S/ Michael A. Cane
Signature
State of Nevada, County of Clark
This instrument was acknowledged before me
on January 20, 1999 by
Michael A. Cane
as incorporator of
ViaVia Broadcasting, Inc.
/S/Ann Marie Gibson
Notary Public
(affix notary stamp or seal)
8. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT:
I, Michael A. Cane hereby accept appointment as Resident
Agent for the above named corporation.
/S/ Michael A. Cane 01-20-99
Signature of Resident Agent Date
<Page 38>
BYLAWS
OF
VIAVID BROADCASTING, INC.
(A NEVADA CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
corporation in the State of Nevada shall be in the City of Las
Vegas, State of Nevada.
Section 2. Other Offices. The corporation shall also have
and maintain an office or principal place of business at such place
as may be fixed by the Board of Directors, and may also have
offices at such other places, both within and without the State of
Nevada as the Board of Directors may from time to time determine or
the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The corporate seal shall consist
of a die bearing the name of the corporation and the inscription,
"Corporate Seal-Nevada." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. Place of Meetings. Meetings of the stockholders
of the corporation shall be held at such place, either within or
without the State of Nevada, as may be designated from time to time
by the Board of Directors, or, if not so designated, then at the
office of the corporation required to be maintained pursuant to
Section 2 hereof.
Section 5. Annual Meeting.
(a) The annual meeting of the stockholders of the
corporation, for the purpose of election of directors and for such
other business as may lawfully come before it, shall be held on
such date and at such time as may be designated from time to time
by the Board of Directors.
(b) At an annual meeting of the stockholders, only such
business shall be conducted as shall have been properly brought
before the meeting. To be properly brought before an annual
meeting, business must be: (A) specified in the notice of meeting
(or any supplement thereto) given by or at the direction of the
Board of Directors, (B) otherwise properly brought before the
meeting
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by or at the direction of the Board of Directors, or (C)
otherwise properly brought before the meeting by a stockholder.
For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof
in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation not later than
the close of business on the sixtieth (60th) day nor earlier than
the close of business on the ninetieth (90th) day prior to the
first anniversary of the preceding year's annual meeting; provided,
however, that in the event that no annual meeting was held in the
previous year or the date of the annual meeting has been changed by
more than thirty (30) days from the date contemplated at the time
of the previous year's proxy statement, notice by the stockholder
to be timely must be so received not earlier than the close of
business on the ninetieth (90th) day prior to such annual meeting
and not later than the close of business on the later of the
sixtieth (60th) day prior to such annual meeting or, in the event
public announcement of the date of such annual meeting is first
made by the corporation fewer than seventy (70) days prior to the
date of such annual meeting, the close of business on the tenth
(10th) day following the day on which public announcement of the
date of such meeting is first made by the corporation. A
stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting:
(i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and address, as they
appear on the corporation's books, of the stockholder proposing
such business, (iii) the class and number of shares of the
corporation which are beneficially owned by the stockholder, (iv)
any material interest of the stockholder in such business and (v)
any other information that is required to be provided by the
stockholder pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), in his capacity
as a proponent to a stockholder proposal. Notwithstanding the
foregoing, in order to include information with respect to a
stockholder proposal in the proxy statement and form of proxy for
a stockholder's meeting, stockholders must provide notice as
required by the regulations promulgated under the 1934 Act.
Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at any annual meeting except in
accordance with the procedures set forth in this paragraph (b).
The chairman of the annual meeting shall, if the facts warrant,
determine and declare at the meeting that business was not properly
brought before the meeting and in accordance with the provisions of
this paragraph (b), and, if he should so determine, he shall so
declare at the meeting that any such business not properly brought
before the meeting shall not be transacted.
(c) Only persons who are confirmed in accordance with the
procedures set forth in this paragraph (c) shall be eligible for
election as directors. Nominations of persons for election to the
Board of Directors of the corporation may be made at a meeting of
stockholders by or at the direction of the Board of Directors or by
any stockholder of the corporation entitled to vote in the election
of directors at the meeting who complies with the notice procedures
set forth in this paragraph (c). Such nominations, other than
those made by or at the direction of the Board of Directors, shall
be made pursuant to timely notice in writing to the Secretary of
the corporation in accordance with the provisions of paragraph (b)
of this Section 5. Such stockholder's notice shall set forth (i)
as to each person, if any, whom the stockholder proposes to
nominate for election or re-election as a director: (A) the name,
age, business address and residence address of such person, (B) the
principal occupation or employment of such person, (c) the class
and number of shares of the corporation which are beneficially
owned by such person, (D) a description of all arrangements or
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understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant to
which the nominations are to be made by the stockholder, and (E)
any other information relating to such person that is required to
be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A
under the 1934 Act (including without limitation such person's
written consent to being named in the proxy statement, if any, as
a nominee and to serving as a director if elected); and (ii) as to
such stockholder giving notice, the information required to be
provided pursuant to paragraph (b) of this Section 5. At the
request of the Board of Directors, any person nominated by a
stockholder for election as a director shall furnish to the
Secretary of the corporation that information required to be set
forth in the stockholder's notice of nomination which pertains to
the nominee. No person shall be eligible for election as a
director of the corporation unless nominated in accordance with the
procedures set forth in this paragraph (c). The chairman of the
meeting shall, if the facts warrant, determine and declare at the
meeting that a nomination was not made in accordance with the
procedures prescribed by these Bylaws, and if he should so
determine, he shall so declare at the meeting, and the defective
nomination shall be disregarded.
(d) For purposes of this Section 5, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or comparable national news service
or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act.
Section 6. Special Meetings.
(a) Special meetings of the stockholders of the corporation
may be called, for any purpose or purposes, by (i) the Chairman of
the Board of Directors, (ii) the Chief Executive Officer, or (iii)
the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or
not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the
Board of Directors for adoption), and shall be held at such place,
on such date, and at such time as the Board of Directors, shall
determine.
(b) If a special meeting is called by any person or persons
other than the Board of Directors, the request shall be in writing,
specifying the general nature of the business proposed to be
transacted, and shall be delivered personally or sent by registered
mail or by telegraphic or other facsimile transmission to the
Chairman of the Board of Directors, the Chief Executive Officer, or
the Secretary of the corporation. No business may be transacted at
such special meeting otherwise than specified in such notice. The
Board of Directors shall determine the time and place of such
special meeting, which shall be held not less than thirty-five (35)
nor more than one hundred twenty (120) days after the date of the
receipt of the request. Upon determination of the time and place
of the meeting, the officer receiving the request shall cause
notice to be given to the stockholders entitled to vote, in
accordance with the provisions of Section 7 of these Bylaws. If
the notice is not given within sixty (60) days after the receipt of
the request, the person or persons requesting the meeting may set
the time and place of the meeting and give the notice. Nothing
contained in this paragraph (b) shall be construed as limiting,
fixing, or affecting the time when a meeting of stockholders called
by action of the Board of Directors may be held.
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Section 7. Notice of Meetings. Except as otherwise provided
by law or the Articles of Incorporation, written notice of each
meeting of stockholders shall be given not less than ten (10) nor
more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting, such notice to
specify the place, date and hour and purpose or purposes of the
meeting. Notice of the time, place and purpose of any meeting of
stockholders may be waived in writing, signed by the person
entitled to notice thereof, either before or after such meeting,
and will be waived by any stockholder by his attendance thereat in
person or by proxy, except when the stockholder attends a meeting
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is
not lawfully called or convened. Any stockholder so waiving notice
of such meeting shall be bound by the proceedings of any such
meeting in all respects as if due notice thereof had been given.
Section 8. Quorum. At all meetings of stockholders, except
where otherwise provided by statute or by the Articles of
Incorporation, or by these Bylaws, the presence, in person or by
proxy duly authorized, of the holder or holders of not less than
one percent (1%) of the outstanding shares of stock entitled to
vote shall constitute a quorum for the transaction of business. In
the absence of a quorum, any meeting of stockholders may be
adjourned, from time to time, either by the chairman of the meeting
or by vote of the holders of a majority of the shares represented
thereat, but no other business shall be transacted at such meeting.
The stockholders present at a duly called or convened meeting, at
which a quorum is present, may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders
to leave less than a quorum. Except as otherwise provided by law,
the Articles of Incorporation or these Bylaws, all action taken by
the holders of a majority of the votes cast, excluding abstentions,
at any meeting at which a quorum is present shall be valid and
binding upon the corporation; provided, however, that directors
shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to
vote on the election of directors. Where a separate vote by a
class or classes or series is required, except where otherwise
provided by the statute or by the Articles of Incorporation or
these Bylaws, a majority of the outstanding shares of such class or
classes or series, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that
vote on that matter and, except where otherwise provided by the
statute or by the Articles of Incorporation or these Bylaws, the
affirmative vote of the majority (plurality, in the case of the
election of directors) of the votes cast, including abstentions, by
the holders of shares of such class or classes or series shall be
the act of such class or classes or series.
Section 9. Adjournment and Notice of Adjourned Meetings. Any
meeting of stockholders, whether annual or special, may be
adjourned from time to time either by the chairman of the meeting
or by the vote of a majority of the shares casting votes, excluding
abstentions. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting, the corporation may transact
any business which might have been transacted at the original
meeting. If the adjournment is for more than thirty (30) days or
if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
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Section 10. Voting Rights. For the purpose of
determining those stockholders entitled to vote at any meeting of
the stockholders, except as otherwise provided by law, only persons
in whose names shares stand on the stock records of the corporation
on the record date, as provided in Section 12 of these Bylaws,
shall be entitled to vote at any meeting of stockholders. Every
person entitled to vote shall have the right to do so either in
person or by an agent or agents authorized by a proxy granted in
accordance with Nevada law. An agent so appointed need not be a
stockholder. No proxy shall be voted after three (3) years from
its date of creation unless the proxy provides for a longer period.
Section 11. Joint Owners of Stock. If shares or other
securities having voting power stand of record in the names of two
(2) or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, tenants by the entirety, or
otherwise, or if two (2) or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary is
given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to
voting shall have the following effect: (a) if only one (1) votes,
his act binds all; (b) if more than one (1) votes, the act of the
majority so voting binds all; (c) if more than one (1) votes, but
the vote is evenly split on any particular matter, each faction may
vote the securities in question proportionally, or may apply to the
Nevada Court of Chancery for relief as provided in the General
Corporation Law of Nevada, Section 217(b). If the instrument filed
with the Secretary shows that any such tenancy is held in unequal
interests, a majority or even-split for the purpose of subsection
(c) shall be a majority or even-split in interest.
Section 12. List of Stockholders. The Secretary shall
prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote
at said meeting, arranged in alphabetical order, 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, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not specified, at
the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole
time thereof and may be inspected by any stockholder who is
present.
Section 13. Action Without Meeting. No action shall be
taken by the stockholders except at an annual or special meeting of
stockholders called in accordance with these Bylaws, or by the
written consent stockholders.
Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of the
Board of Directors, or, if a Chairman has not been appointed or is
absent, the President, or, if the President is absent, a chairman
of the meeting chosen by a majority in interest of the stockholders
entitled to vote, present in person or by proxy, shall act as
chairman. The Secretary, or, in his absence, an Assistant
Secretary directed to do so by the President, shall act as
secretary of the meeting.
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(b) The Board of Directors of the corporation shall be
entitled to make such rules or regulations for the conduct of
meetings of stockholders as it shall deem necessary, appropriate or
convenient. Subject to such rules and regulations of the Board of
Directors, if any, the chairman of the meeting shall have the right
and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are
necessary, appropriate or convenient for the proper conduct of the
meeting, including, without limitation, establishing an agenda or
order of business for the meeting, rules and procedures for
maintaining order at the meeting and the safety of those present,
limitations on participation in such meeting to stockholders of
record of the corporation and their duly authorized and constituted
proxies and such other persons as the chairman shall permit,
restrictions on entry to the meeting after the time fixed for the
commencement thereof, limitations on the time allotted to questions
or comments by participants and regulation of the opening and
closing of the polls for balloting on matters which are to be voted
on by ballot. Unless and to the extent determined by the Board of
Directors or the chairman of the meeting, meetings of stockholders
shall not be required to be held in accordance with rules of
parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number and Qualification. The authorized
number of directors of the corporation shall be not less than one
(1) nor more than twelve (12) as fixed from time to time by
resolution of the Board of Directors; provided that no decrease in
the number of directors shall shorten the term of any incumbent
directors. Directors need not be stockholders unless so required
by the Articles of Incorporation. If for any cause, the directors
shall not have been elected at an annual meeting, they may be
elected as soon thereafter as convenient at a special meeting of
the stockholders called for that purpose in the manner provided in
these Bylaws.
Section 16. Powers. The powers of the corporation shall
be exercised, its business conducted and its property controlled by
the Board of Directors, except as may be otherwise provided by
statute or by the Articles of Incorporation.
Section 17. Election and Term of Office of Directors.
Members of the Board of Directors shall hold office for the terms
specified in the Articles of Incorporation, as it may be amended
from time to time, and until their successors have been elected as
provided in the Articles of Incorporation.
Section 18. Vacancies. Unless otherwise provided in the
Articles of Incorporation, any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or
other causes and any newly created directorships resulting from any
increase in the number of directors, shall unless the Board of
Directors determines by resolution that any such vacancies or newly
created directorships shall be filled by stockholder vote, be
filled only by the affirmative vote of a majority of the directors
then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of
the director for which the vacancy was created or occurred and
until such director's successor shall have been elected and
qualified. A vacancy in the Board of Directors
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shall be deemed to exist under this Bylaw in the case of the death,
removal or resignation of any director.
Section 19. Resignation. Any director may resign at any
time by delivering his written resignation to the Secretary, such
resignation to specify whether it will be effective at a particular
time, upon receipt by the Secretary or at the pleasure of the Board
of Directors. If no such specification is made, it shall be deemed
effective at the pleasure of the Board of Directors. When one or
more directors shall resign from the Board of Directors, 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, and each
director so chosen shall hold office for the unexpired portion of
the term of the director whose place shall be vacated and until his
successor shall have been duly elected and qualified.
Section 20. Removal. Subject to the Articles of
Incorporation, any director may be removed by:
(a) the affirmative vote of the holders of a majority of the
outstanding shares of the Corporation then entitled to vote, with
or without cause; or
(b) the affirmative and unanimous vote of a majority of the
directors of the Corporation, with the exception of the vote of the
directors to be removed, with or without cause.
Section 21. Meetings.
(a) Annual Meetings. The annual meeting of the Board of
Directors shall be held immediately after the annual meeting of
stockholders and at the place where such meeting is held. No
notice of an annual meeting of the Board of Directors shall be
necessary and such meeting shall be held for the purpose of
electing officers and transacting such other business as may
lawfully come before it.
(b) Regular Meetings. Except as hereinafter otherwise
provided, regular meetings of the Board of Directors shall be held
in the office of the corporation required to be maintained pursuant
to Section 2 hereof. Unless otherwise restricted by the Articles
of Incorporation, regular meetings of the Board of Directors may
also be held at any place within or without the state of Nevada
which has been designated by resolution of the Board of Directors
or the written consent of all directors.
(c) Special Meetings. Unless otherwise restricted by the
Articles of Incorporation, special meetings of the Board of
Directors may be held at any time and place within or without the
State of Nevada whenever called by the Chairman of the Board, the
President or any two of the directors.
(d) Telephone Meetings. Any member of the Board of
Directors, or of any committee thereof, may participate in a
meeting by means of conference telephone or similar communications
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equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting by such
means shall constitute presence in person at such meeting.
(e) Notice of Meetings. Notice of the time and place of all
special meetings of the Board of Directors shall be orally or in
writing, by telephone, facsimile, telegraph or telex, during normal
business hours, at least twenty-four (24) hours before the date and
time of the meeting, or sent in writing to each director by first
class mail, charges prepaid, at least three (3) days before the
date of the meeting. Notice of any meeting may be waived in
writing at any time before or after the meeting and will be waived
by any director by attendance thereat, except when the director
attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.
(f) Waiver of Notice. The transaction of all business at
any meeting of the Board of Directors, or any committee thereof,
however called or noticed, or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if
a quorum be present and if, either before or after the meeting,
each of the directors not present shall sign a written waiver of
notice. All such waivers shall be filed with the corporate records
or made a part of the minutes of the meeting.
Section 22. Quorum and Voting.
(a) Unless the Articles of Incorporation requires a greater
number and except with respect to indemnification questions arising
under Section 43 hereof, for which a quorum shall be one-third of
the exact number of directors fixed from time to time in accordance
with the Articles of Incorporation, a quorum of the Board of
Directors shall consist of a majority of the exact number of
directors fixed from time to time by the Board of Directors in
accordance with the Articles of Incorporation provided, however, at
any meeting whether a quorum be present or otherwise, a majority of
the directors present may adjourn from time to time until the time
fixed for the next regular meeting of the Board of Directors,
without notice other than by announcement at the meeting.
(b) At each meeting of the Board of Directors at which a
quorum is present, all questions and business shall be determined
by the affirmative vote of a majority of the directors present,
unless a different vote be required by law, the Articles of
Incorporation or these Bylaws.
Section 23. Action Without Meeting. Unless otherwise
restricted by the Articles of Incorporation or these Bylaws, any
action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without
a meeting, if all members of the Board of Directors or committee,
as the case may be, consent thereto in writing, and such writing or
writings are filed with the minutes of proceedings of the Board of
Directors or committee.
Section 24. Fees and Compensation. Directors shall be
entitled to such compensation for their services as may be approved
by the Board of Directors, including, if so approved, by resolution
of the Board of Directors, a fixed sum and expenses of attendance,
if any, for attendance at each regular or special meeting of the
Board of Directors and at any meeting of a committee of
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the Board of Directors. Nothing herein contained shall be construed
to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee, or otherwise and receiving
compensation therefor.
Section 25. Committees.
(a) Executive Committee. The Board of Directors may by
resolution passed by a majority of the whole Board of Directors
appoint an Executive Committee to consist of one (1) or more
members of the Board of Directors. The Executive Committee, to the
extent permitted by law and provided in the resolution of the Board
of Directors shall have and may exercise all the powers and
authority of the Board of Directors in the management of the
business and affairs of the corporation, including without
limitation the power or authority to declare a dividend, to
authorize the issuance of stock and to adopt a certificate of
ownership and merger, and may authorize the seal of the corporation
to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to
amending the Articles of Incorporation (except that a committee
may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board
of Directors fix the designations and any of the preferences or
rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the
conversion into, or the exchange of such shares for, shares of any
other class or classes or any other series of the same or any other
class or classes of stock of the corporation or fix the number of
shares of any series of stock or authorize the increase or decrease
of the shares of any series), adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property
and assets, recommending to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or amending the
bylaws of the corporation.
(b) Other Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors,
from time to time appoint such other committees as may be permitted
by law. Such other committees appointed by the Board of Directors
shall consist of one (1) or more members of the Board of Directors
and shall have such powers and perform such duties as may be
prescribed by the resolution or resolutions creating such
committees, but in no event shall such committee have the powers
denied to the Executive Committee in these Bylaws.
(c) Term. Each member of a committee of the Board of
Directors shall serve a term on the committee coexistent with such
member's term on the Board of Directors. The Board of Directors,
subject to the provisions of subsections (a) or (b) of this Bylaw
may at any time increase or decrease the number of members of a
committee or terminate the existence of a committee. The
membership of a committee member shall terminate on the date of his
death or voluntary resignation from the committee or from the Board
of Directors. The Board of Directors may at any time for any
reason remove any individual committee member and the Board of
Directors may fill any committee vacancy created by death,
resignation, removal or increase in the number of members of the
committee. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee,
and, in addition, in the absence or disqualification of any member
of a committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not
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he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise
provide, regular meetings of the Executive Committee or any other
committee appointed pursuant to this Section 25 shall be held at
such times and places as are determined by the Board of Directors,
or by any such committee, and when notice thereof has been given to
each member of such committee, no further notice of such regular
meetings need be given thereafter. Special meetings of any such
committee may be held at any place which has been determined from
time to time by such committee, and may be called by any director
who is a member of such committee, upon written notice to the
members of such committee of the time and place of such special
meeting given in the manner provided for the giving of written
notice to members of the Board of Directors of the time and place
of special meetings of the Board of Directors. Notice of any
special meeting of any committee may be waived in writing at any
time before or after the meeting and will be waived by any director
by attendance thereat, except when the director attends such
special meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. A majority
of the authorized number of members of any such committee shall
constitute a quorum for the transaction of business, and the act of
a majority of those present at any meeting at which a quorum is
present shall be the act of such committee.
Section 26. Organization. At every meeting of the
directors, the Chairman of the Board of Directors, or, if a
Chairman has not been appointed or is absent, the President, or if
the President is absent, the most senior Vice President, or, in the
absence of any such officer, a chairman of the meeting chosen by a
majority of the directors present, shall preside over the meeting.
The Secretary, or in his absence, an Assistant Secretary directed
to do so by the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 27. Officers Designated. The officers of the
corporation shall include, if and when designated by the Board of
Directors, the Chairman of the Board of Directors, the Chief
Executive Officer, the President, one or more Vice Presidents, the
Secretary, the Chief Financial Officer, the Treasurer, the
Controller, all of whom shall be elected at the annual
organizational meeting of the Board of Direction. The Board of
Directors may also appoint one or more Assistant Secretaries,
Assistant Treasurers, Assistant Controllers and such other officers
and agents with such powers and duties as it shall deem necessary.
The Board of Directors may assign such additional titles to one or
more of the officers as it shall deem appropriate. Any one person
may hold any number of offices of the corporation at any one time
unless specifically prohibited therefrom by law. The salaries and
other compensation of the officers of the corporation shall be
fixed by or in the manner designated by the Board of Directors.
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Section 28. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure
of the Board of Directors and until their successors shall have
been duly elected and qualified, unless sooner removed. Any
officer elected or appointed by the Board of Directors may be
removed at any time by the Board of Directors. If the office of
any officer becomes vacant for any reason, the vacancy may be
filled by the Board of Directors.
(b) Duties of Chairman of the Board of Directors. The
Chairman of the Board of Directors, when present, shall preside at
all meetings of the stockholders and the Board of Directors. The
Chairman of the Board of Directors shall perform other duties
commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall
designate from time to time. If there is no President, then the
Chairman of the Board of Directors shall also serve as the Chief
Executive Officer of the corporation and shall have the powers and
duties prescribed in paragraph (c) of this Section 28.
(c) Duties of President. The President shall preside at all
meetings of the stockholders and at all meetings of the Board of
Directors, unless the Chairman of the Board of Directors has been
appointed and is present. Unless some other officer has been
elected Chief Executive Officer of the corporation, the President
shall be the chief executive officer of the corporation and shall,
subject to the control of the Board of Directors, have general
supervision, direction and control of the business and officers of
the corporation. The President shall perform other duties commonly
incident to his office and shall also perform such other duties and
have such other powers as the Board of Directors shall designate
from time to time.
(d) Duties of Vice Presidents. The Vice Presidents may
assume and perform the duties of the President in the absence or
disability of the President or whenever the office of President is
vacant. The Vice Presidents shall perform other duties commonly
incident to their office and shall also perform such other duties
and have such other powers as the Board of Directors or the
President shall designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all
meetings of the stockholders and of the Board of Directors and
shall record all acts and proceedings thereof in the minute book of
the corporation. The Secretary shall give notice in conformity
with these Bylaws of all meetings of the stockholders and of all
meetings of the Board of Directors and any committee thereof
requiring notice. The Secretary shall perform all other duties
given him in these Bylaws and other duties commonly incident to his
office and shall also perform such other duties and have such other
powers as the Board of Directors shall designate from time to time.
The President may direct any Assistant Secretary to assume and
perform the duties of the Secretary in the absence or disability of
the Secretary, and each Assistant Secretary shall perform other
duties commonly incident to his office and shall also perform such
other duties and have such other powers as the Board of Directors
or the President shall designate from time to time.
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(f) Duties of Chief Financial Officer. The Chief Financial
Officer shall keep or cause to be kept the books of account of the
corporation in a thorough and proper manner and shall render
statements of the financial affairs of the corporation in such form
and as often as required by the Board of Directors or the
President. The Chief Financial Officer, subject to the order of
the Board of Directors, shall have the custody of all funds and
securities of the corporation. The Chief Financial Officer shall
perform other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board
of Directors or the President shall designate from time to time.
The President may direct the Treasurer or any Assistant Treasurer,
or the Controller or any Assistant Controller to assume and perform
the duties of the Chief Financial Officer in the absence or
disability of the Chief Financial Officer, and each Treasurer and
Assistant Treasurer and each Controller and Assistant Controller
shall perform other duties commonly incident to his office and
shall also perform such other duties and have such other powers as
the Board of Directors or the President shall designate from time
to time.
Section 29. Delegation of Authority. The Board of
Directors may from time to time delegate the powers or duties of
any officer to any other officer or agent, notwithstanding any
provision hereof.
Section 30. Resignations. Any officer may resign at any
time by giving written notice to the Board of Directors or to the
President or to the Secretary. Any such resignation shall be
effective when received by the person or persons to whom such
notice is given, unless a later time is specified therein, in which
event the resignation shall become effective at such later time.
Unless otherwise specified in such notice, the acceptance of any
such resignation shall not be necessary to make it effective. Any
resignation shall be without prejudice to the rights, if any, of
the corporation under any contract with the resigning officer.
Section 31. Removal. Any officer may be removed from
office at any time, either with or without cause, by the
affirmative vote of a majority of the directors in office at the
time, or by the unanimous written consent of the directors in
office at the time, or by any committee or superior officers upon
whom such power of removal may have been conferred by the Board of
Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 32. Execution of Corporate Instrument. The Board
of Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or
persons, to execute on behalf of the corporation any corporate
instrument or document, or to sign on behalf of the corporation the
corporate name without limitation, or to enter into contracts on
behalf of the corporation, except where otherwise provided by law
or these Bylaws, and such execution or signature shall be binding
upon the corporation.
Unless otherwise specifically determined by the Board of
Directors or otherwise required by law, promissory notes, deeds of
trust, mortgages and other evidences of indebtedness of the
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corporation, and other corporate instruments or documents requiring
the corporate seal, and certificates of shares of stock owned by
the corporation, shall be executed, signed or endorsed by the
Chairman of the Board of Directors, or the President or any Vice
President, and by the Secretary or Treasurer or any Assistant
Secretary or Assistant Treasurer. All other instruments and
documents requiting the corporate signature, but not requiring the
corporate seal, may be executed as aforesaid or in such other
manner as may be directed by the Board of Directors.
All checks and drafts drawn on banks or other depositaries on
funds to the credit of the corporation or in special accounts of
the corporation shall be signed by such person .or persons as the
Board of Directors shall authorize so to do.
Unless authorized or ratified by the Board of Directors or
within the agency power of an officer, no officer, agent or
employee shall have any power or authority to bind the corporation
by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
Section 33. Voting of Securities Owned by the
Corporation. All stock and other securities of other corporations
owned or held by the corporation for itself, or for other parties
in any capacity, shall be voted, and all proxies with respect
thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such
authorization, by the Chairman of the Board of Directors, the Chief
Executive Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 34. Form and Execution of Certificates.
Certificates for the shares of stock of the corporation shall be in
such form as is consistent with the Articles of Incorporation and
applicable law. Every holder of stock in the corporation shall be
entitled to have a certificate signed by or in the name of the
corporation by the Chairman of the Board of Directors, or the
President or any Vice President and by the Treasurer or Assistant
Treasurer or the Secretary or Assistant Secretary, certifying the
number of shares owned by him in the corporation. Any or all of
the signatures on the certificate may be facsimiles. In case any
officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued with the same effect as if
he were such officer, transfer agent, or registrar at the date of
issue. Each certificate shall state upon the face or back thereof,
in full or in summary, all of the powers, designations,
preferences, and rights, and the limitations or restrictions of the
shares authorized to be issued or shall, except as otherwise
required by law, set forth on the face or back a statement that the
corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative,
participating, optional, or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Within a
reasonable time after the issuance or transfer of uncertificated
stock, the corporation shall send to the registered owner thereof
a written notice containing the information required to be
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set forth or stated on certificates pursuant to this section or
otherwise required by law or with respect to this section a
statement that the corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences
and relative participating, optional or other special rights of
each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
Except as otherwise expressly provided by law, the rights and
obligations of the holders of certificates representing stock of
the same class and series shall be identical.
Section 35. Lost Certificates. A new certificate or
certificates shall be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have
been lost, stolen, or destroyed, upon the making of an affidavit of
that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. The corporation may require, as a
condition precedent to the issuance of a new certificate or
certificates, the owner of such lost, stolen, or destroyed
certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require or to give
the corporation a surety bond in such form and amount as it may
direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been
lost, stolen, or destroyed.
Section 36. Transfers.
(a) Transfers of record of shares of stock of the corporation
shall be made only upon its books by the holders thereof, in person
or by attorney duly authorized, and upon the surrender of a
properly endorsed certificate or certificates for a like number of
shares.
(b) The corporation shall have power to enter into and
perform any agreement with any number of stockholders of any one or
more classes of stock of the corporation to restrict the transfer
of shares of stock of the corporation of any one or more classes
owned by such stockholders in any manner not prohibited by the
General Corporation Law of Nevada.
Section 37. Fixing Record Dates.
(a) In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may
fix, in advance, a record date, which record date shall not precede
the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date shall not
be more than sixty (60) nor less than ten (10) days before the date
of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice
is given, or if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix
a new record date for the adjourned meeting.
(b) In order that the corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose
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of any other lawful action, the Board of Directors may fix, in
advance, a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty (60) days prior
to such action. If no record date is filed, the record date for
determining stockholders for any such purpose shall be at the close
of business on the day on which the Board of Directors adopts the
resolution relating thereto.
Section 38. Registered Stockholders. The corporation shall
be entitled to recognize the exclusive right of a person registered
on its books as the owner of shares to receive dividends, and to
vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on
the part of any other person whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws
of Nevada.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 39. Execution of Other Securities. All bonds,
debentures and other corporate securities of the corporation, other
than stock certificates (covered in Section 34), may be signed by
the Chairman of the Board of Directors, the President or any Vice
President, or such other person as may be authorized by the Board
of Directors, and the corporate seal impressed thereon or a
facsimile of such seal imprinted thereon and attested by the
signature of the Secretary or an Assistant Secretary, or the Chief
Financial Officer or Treasurer or an Assistant Treasurer; provided,
however, that where any such bond, debenture or other corporate
security shall be authenticated by the manual signature, or where
permissible facsimile signature, of a trustee under an indenture
pursuant to which such bond, debenture or other corporate security
shall be issued, the signatures of the persons signing and
attesting the corporate seal on such bond, debenture or other
corporate security may be the imprinted facsimile of the signatures
of such persons. Interest coupons appertaining to any such bond,
debenture or other corporate security, authenticated by a trustee
as aforesaid, shall be signed by the Treasurer or an Assistant
Treasurer of the corporation or such other person as may be
authorized by the Board of Directors, or bear imprinted thereon the
facsimile signature of such person. In case any officer who shall
have signed or attested any bond, debenture or other corporate
security, or whose facsimile signature shall appear thereon or on
any such interest coupon, shall have ceased to be such officer
before the bond, debenture or other corporate security so signed or
attested shall have been delivered, such bond, debenture or other
corporate security nevertheless may be adopted by the corporation
and issued and delivered as though the person who signed the same
or whose facsimile signature shall have been used thereon had not
ceased to be such officer of the corporation.
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ARTICLE IX
DIVIDENDS
Section 40. Declaration of Dividends. Dividends upon the
capital stock of the corporation, subject to the provisions of the
Articles of Incorporation, if any, may be declared by the Board of
Directors pursuant to law at any regular or special meeting.
Dividends may be paid in cash, in property, or in shares of the
capital stock, subject to the provisions of the Articles of
Incorporation.
Section 41. Dividend Reserve. Before payment of any
dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the Board
of Directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property
of the corporation, or for such other purpose as the Board of
Directors shall think conducive to the interests of the
corporation, and the Board of Directors may modify or abolish any
such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 42. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 43. Indemnification of Directors, Executive Officers,
Other Officers, Employees and Other Agents.
(a) Directors Officers. The corporation shall indemnify its
directors and officers to the fullest extent not prohibited by the
Nevada General Corporation Law; provided, however, that the
corporation may modify the extent of such indemnification by
individual contracts with its directors and officers; and,
provided, further, that the corporation shall not be required to
indemnify any director or officer in connection with any proceeding
(or part thereof) initiated by such person unless (i) such
indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board of Directors of the
corporation, (iii) such indemnification is provided by the
corporation, in its sole discretion, pursuant to the powers vested
in the corporation under the Nevada General Corporation Law or (iv)
such indemnification is required to be made under subsection (d).
(b) Employees and Other Agents. The corporation shall have
power to indemnify its employees and other agents as set forth in
the Nevada General Corporation Law.
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(c) Expense. The corporation shall advance to any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director or officer, of the
corporation, or is or was serving at the request of the corporation
as a director or executive officer of another corporation,
partnership, joint venture, trust or other enterprise, prior to the
final disposition of the proceeding, promptly following request
therefor, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by
or on behalf of such person to repay said mounts if it should be
determined ultimately that such person is not entitled to be
indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined
pursuant to paragraph (e) of this Bylaw, no advance shall be made
by the corporation to an officer of the corporation (except by
reason of the fact that such officer is or was a director of the
corporation in which event this paragraph shall not apply) in any
action, suit or proceeding, whether civil, criminal, administrative
or investigative, if a determination is reasonably and promptly
made (i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or
(ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, that the facts known to the decision-
making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in
a manner that such person did not believe to be in or not opposed
to the best interests of the corporation.
(d) Enforcement. Without the necessity of entering into an
express contract, all rights to indemnification and advances to
directors and officers under this Bylaw shall be deemed to be
contractual rights and be effective to the same extent and as if
provided for in a contract between the corporation and the director
or officer. Any right to indemnification or advances granted by
this Bylaw to a director or officer shall be enforceable by or on
behalf of the person holding such right in any court of competent
jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim
is made within ninety (90) days of request therefor. The claimant
in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting his
claim. In connection with any claim for indemnification, the
corporation shall be entitled to raise as a defense to any such
action that the claimant has not met the standard of conduct that
make it permissible under the Nevada General Corporation Law for
the corporation to indemnify the claimant for the amount claimed.
In connection with any claim by an officer of the corporation
(except in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such
officer is or was a director of the corporation) for advances, the
corporation shall be entitled to raise a defense as to any such
action clear and convincing evidence that such person acted in bad
faith or in a manner that such person did not believe to be in or
not opposed in the best interests of the corporation, or with
respect to any criminal action or proceeding that such person acted
without reasonable cause to believe that his conduct was lawful.
Neither the failure of the corporation (including its
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Board of Directors, independent legal counsel or its stockholders)
to have made a determination prior to the commencement of such action
that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in
the Nevada General Corporation Law, nor an actual determination by
the corporation (including its Board of Directors, independent
legal counsel or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the
action or create a presumption that claimant has not met the
applicable standard of conduct. In any suit brought by a director
or officer to enforce a right to indemnification or to an
advancement of expenses hereunder, the burden of proving that the
director or officer is not entitled to be indemnified, or to such
advancement of expenses, under this Article XI or otherwise shall
be on the corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any
person by this Bylaw shall not be exclusive of any other right
which such person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, Bylaws, agreement, vote
of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another
capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting
indemnification and advances, to the fullest extent not prohibited
by the Nevada General Corporation Law.
(f) Survival of Rights. The rights conferred on any person
by this Bylaw shall continue as to a person who has ceased to be a
director, officer, employee or other agent and shall inure to the
benefit of the heirs, executors and administrators of such a
person.
(g) Insurance. To the fullest extent permitted by the Nevada
General Corporation Law, the corporation, upon approval by the
Board of Directors, may purchase insurance on behalf of any person
required or permitted to be indemnified pursuant to this Bylaw.
(h) Amendments. Any repeal or modification of this Bylaw
shall only be prospective and shall not affect the rights under
this Bylaw in effect at the time of the alleged occurrence of any
action or omission to act that is the cause of any proceeding
against any agent of the corporation.
(i) Saving Clause. If this Bylaw or any portion hereof shall
be invalidated on any ground by any court of competent
jurisdiction, then the corporation shall nevertheless indemnify
each director and officer to the full extent not prohibited by any
applicable portion of this Bylaw that shall not have been
invalidated, or by any other applicable law.
(j) Certain Definitions. For the purposes of this Bylaw, the
following definitions shall apply:
(i) The term "proceeding" shall be broadly construed
and shall include, without limitation, the investigation,
preparation, prosecution, defense, settlement, arbitration and
appeal of, and the giving of testimony in, any threatened,
pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative.
(ii) The term "expenses" shall be broadly construed
and shall include, without limitation, court costs, attorneys'
fees, witness fees, fines, amounts paid in settlement or
judgment and any other costs and expenses of any nature or
kind incurred in connection with any proceeding.
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(iii) The term the "corporation" shall include, in
addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so
that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director,
officer, employee or agent or another corporation,
partnership, joint venture, trust or other enterprise, shall
stand in the same position under the provisions of this Bylaw
with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its
separate existence had continued.
(iv) References to a "director," "executive officer,"
"officer," "employee," or "agent" of the corporation shall
include, without limitation, situations where such person is
serving at the request of the corporation as, respectively, a
director, executive officer, officer, employee, trustee or
agent of another corporation, partnership, joint venture,
trust or other enterprise.
(v) References to "other enterprises" shall include
employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee
benefit plan, its participants, or beneficiaries; and a person
who acted in good faith and in a manner he reasonably believed
to be in the interest of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation"
as referred to in this Bylaw.
ARTICLE XII
NOTICES
Section 44. Notices.
(a) Notice to Stockholders. Whenever, under any provisions
of these Bylaws, notice is required to be given to any stockholder,
it shall be given in writing, timely and duly deposited in the
United States mail, postage prepaid, and addressed to his last
known post office address as shown by the stock record of the
corporation or its transfer agent.
(b) Notice to directors. Any notice required to be given to
any director may be given by the method stated in subsection (a),
or by facsimile, telex or telegram, except that such notice other
than one which is delivered personally shall be sent to such
address as such director shall have filed in writing with the
Secretary, or, in the absence of such filing, to the last known
post office address of such director.
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(c) Affidavit of Mailing. An affidavit of mailing, executed
by a duly authorized and competent employee of the corporation or
its transfer agent appointed with respect to the class of stock
affected, specifying the name and address or the names and
addresses of the stockholder or stockholders, or director or
directors, to whom any such notice or notices was or were given,
and the time and method of giving the same, shall in the absence of
fraud, be prima facie evidence of the facts therein contained.
(d) Time Notices Deemed Given. All notices given by mail,
as above provided, shall be deemed to have been given as at the time
of mailing, and all notices given by facsimile, telex or telegram
shall be deemed to have been given as of the sending time recorded
at time of transmission.
(e) Methods of Notice. It shall not be necessary that the
same method of giving notice be employed in respect of all
directors, but one permissible method may be employed in respect of
any one or more, and any other permissible method or methods may be
employed in respect of any other or others.
(f) Failure to Receive Notice. The period or limitation of
time within which any stockholder may exercise any option or right,
or enjoy any privilege or benefit, or be required to act, or within
which any director may exercise any power or right, or enjoy any
privilege, pursuant to any notice sent him ill the manner above
provided, shall not be affected or extended in any manner by the
failure of such stockholder or such director to receive such
notice.
(g) Notice to Person with Whom Communication Is Unlawful.
Whenever notice is required to be given, under any provision of law
or of the Articles of Incorporation or Bylaws of the corporation,
to any person with whom communication is unlawful, the giving of
such notice to such person shall not be require and there shall be
no duty to apply to any governmental authority or agency for a
license or permit to give such notice to such person. Any action
or meeting which shall be taken or held without notice to any such
person with whom communication is unlawful shall have the same
force and effect as if such notice had been duly given. In the
event that the action taken by the corporation is such as to
require the filing of a certificate under any provision of the
Nevada General Corporation Law, the certificate shall state, if
such is the fact and if notice is required, that notice was given
to all persons entitled to receive notice except such persons with
whom communication is unlawful.
(h) Notice to Person with Undeliverable Address. Whenever
notice is required to be given, under any provision of law or the
Articles of Incorporation or Bylaws of the corporation, to any
stockholder to whom (i) notice of two consecutive annual meetings,
and all notices of meetings or of the taking of action by written
consent without a meeting to such person during the period between
such two consecutive annual meetings, or (ii) all, and at least
two, payments (if sent by first class mail) of dividends or
interest on securities during a twelve-month period, have been
mailed addressed to such person at his address as shown on the
records of the corporation and have been returned undeliverable,
the giving of such notice to such person shall not be required.
Any action or meeting which shall be taken or held without notice
to such person shall have the same force and effect as if such
notice had been duly given. If any such person shall deliver to
the corporation a written notice setting forth his then current
address, the requirement that notice be given to such
20
<Page 58>
person shall be reinstated. In the event that the action taken by
the corporation is such as to require the filing of a certificate
under any provision of the Nevada General Corporation Law, the
certificate need not state that notice was not given to persons to
whom notice was not required to be given pursuant to this
paragraph.
ARTICLE XII
AMENDMENTS
Section 45. Amendments.
The Board of Directors shall also have the power to adopt,
amend, or repeal Bylaws as set forth in the Articles of
Incorporation.
ARTICLE XIV
LOANS TO OFFICERS
Section 46. Loans to Officers. The corporation may lend
money to, or guarantee any obligation of, or otherwise assist any
officer or other employee of the corporation or of its
subsidiaries, including any officer or employee who is a Director
of the corporation or its subsidiaries, whenever, in the judgment
of the Board of Directors, such loan, guarantee or assistance may
reasonably be expected to benefit the corporation. The loan,
guarantee or other assistance may be with or without interest and
may be unsecured, or secured in such manner as the Board of
Directors shall approve, including, without limitation, a pledge of
shares of stock of the corporation. Nothing in these Bylaws shall
be deemed to deny, limit or restrict the powers of guaranty or
warranty of the corporation at common law or under any statute.
Declared as the By-Laws of ViaVid Broadcasting, Inc., as amended,
as of the 15th day of June, 1999
Signature of Officer: /s/ Brian Kathler
Name of Officer: BRIAN KATHLER
Position of Officer: PRESIDENT AND DIRECTOR
21
<Page 59>
VIAVID BROADCASTING, INC.
A Nevada Corporation
- --------------------------------------------------------------------
January 26, 1999
THE SHAREHOLDERS OF VIAVID BROADCASTING CORP.
Attention: Mr. Paul Watkins
Dear Sirs:
Re: VIAVID BROADCASTING, INC. (the "Company")
- Offer to Acquire 100% of the Outstanding Shares of ViaVid
Broadcasting Corp., a British Columbia company ("ViaVid")
- ----------------------------------------------------------------------
We write to set out the offer of the Company to the shareholders of
ViaVid (the "Shareholders") to acquire 100% of the outstanding
shares of ViaVid.
This offer is on the terms and is subject to the conditions set
forth in this letter. If this offer is acceptable, we ask that you
indicate your agreement by signing this letter where indicated
below, completing the required information and returning an
executed copy to us. This offer is open for acceptance until
12:00 p.m. (Pacific Time) on January 29, 1999 (the "Expiry Time"),
at which time this offer will terminate unless extended in writing.
The Company's offer is as follows:
1. Offer to Purchase
The Company offers to purchase from each Shareholder all shares of
ViaVid (the "Shares") held by the Shareholder on the terms and
subject to the conditions set forth in this offer. The Company's
obligation to purchase the Shares held by any Shareholder is
conditional upon Shareholders holding all of the outstanding shares
of ViaVid accepting this offer by the Expiry Time.
<Page 60>
-2-
2. Payment for the Shares
The Company will issue to each Shareholder accepting this offer
(each an "Accepting Shareholder") 1,700 common shares of the
Company (each a "Company Share" and together, the "Company Shares")
for each share of ViaVid held by the Accepting Shareholder. (For
Example: A shareholder of ViaVid accepting this offer who holds
1,000 common shares of ViaVid would receive 1,700,000 common shares
of the Company on closing.)
Each Accepting Shareholder acknowledges and agrees that the Company
Shares are being issued pursuant to available exemptions from the
prospectus and registration requirements of each of the Securities
Act (British Columbia) and the United States Securities Act of
1933. The Accepting Shareholder agrees to abide by all applicable
resale restrictions and hold periods imposed by such statutes.
All shares certificates would be endorsed with the following legend
pursuant to the United States Securities Act of 1933:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT"), AND ARE BEING OFFERED AND SOLD
ONLY TO ACCREDITED INVESTORS IN RELIANCE UPON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS
OF THE ACT. SUCH SECURITIES MAY NOT BE
REOFFERED FOR SALE OR RESOLD OR OTHERWISE
TRANSFERRED UNLESS THEY ARE REGISTERED UNDER
THE APPLICABLE PROVISIONS OF THE ACT OR ARE
EXEMPT FROM SUCH REGISTRATION.
The Accepting Shareholder acknowledges that the Company will issue
prior to the Closing Date a total of 500,000 common shares at a
price of $0.01 per share for proceeds of $5,000 US. The Accepting
Shareholder acknowledges and agrees that the Company may issue
100,000 common shares at a price of $0.50 US per share, 500,000
common shares at a price of $1.00 US per share and 200,000 common
shares at a price of $1.25 US per share. The Accepting Shareholder
consents to these issuances of shares which may be completed prior
to or after Closing, and agrees the Company has no obligation to
complete these share issuances.
3. Closing Date
The date of the closing of the purchase and sale of the Shares of
each Accepting Shareholder will be the 15th day of February, 1999
(the "Closing Date").
<Page 61>
-3-
4. Representations and Warranties of each Accepting Shareholder
The Company's purchase will be based on the representations and
warranties by each Accepting Shareholder that:
(A) ViaVid is a corporation duly organized, validly existing
and in good standing under the laws of the Province of
British Columbia;
(B) all Shares owned by the Accepting Shareholder are owned
free and clear of all liens, charges, encumbrances and
security interests;
(C) there is no shareholders agreement between the
Shareholders of the Company to which the Accepting
Shareholder is party;
(D) except as disclosed in the Financial Statements, ViaVid
has no indebtedness, debt or other liability to the
Accepting Shareholder and to the best knowledge of the
Accepting Shareholder, to any other Shareholder or any
officer or director of ViaVid;
(E) no person has any option, warrant or other right to
acquire any shares of ViaVid;
(F) ViaVid is the owner of all assets required for the
conduct of its business as disclosed in its financial
statements, in its business plan and as represented to
the Company;
(G) the liabilities and indebtedness of ViaVid does not
exceed the amount set forth in the Financial Statements
and there will not be any increase in such liabilities
prior to the Closing Date other than in the ordinary
course of business;
(H) all assets of ViaVid are owned by ViaVid free and clear
of all liens, charges and other financial encumbrances;
(I) the issued and outstanding capital of ViaVid consists of
3,000 common shares and there will be no shares issued
prior to the Closing Date;
(J) the books and records of ViaVid fairly and correctly set
out and disclose in all material respects, in accordance
with generally accepted accounting principles, the
financial position of ViaVid as at the date hereof, and
all material financial transactions of ViaVid relating to
its business have been accurately recorded in such books
and records;
(K) the balance sheet of ViaVid as at January 25, 1999 and
the income statement of ViaVid for the period from
November 1, 1998 to January 25, 1999 (the "Financial
Statements") as attached hereto, present fairly and
correctly the assets, liabilities (whether accrued,
absolute, contingent or otherwise) and the financial
condition of
<Page 62>
-4-
ViaVid as at the date thereof and there will
not be, prior to the Closing Date, any increase in such
liabilities or other material change other than in the
ordinary course of business;
(L) the business of ViaVid has been carried on in the
ordinary and normal course by ViaVid since the date of
financial statements;
(M) ViaVid is not in material default or breach of any
agreements to which it is a party and there exists no
state of facts which after notice or lapse of time or
both which would constitute a default or breach of any
such agreements;
(N) there are no actions, suits or proceedings pending or
threatened against or affecting ViaVid and the Accepting
Shareholder is not aware of any existing ground on which
any such action, suit or proceeding might be commenced
with any reasonable likelihood of success;
(O) ViaVid owns all intellectual property, including patents,
trademarks, copyrights and confidential information, as
required to conduct its business in accordance with its
business plan and promotional material.
5. Representations and Warranties of The Company
The Company represents and warrants to each Accepting Shareholder
that:
(A) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the State
of Nevada;
(B) upon issue, the Company Shares will be fully paid and
non-assessable shares in the capital of the Company;
(C) the issued and outstanding shares of the Company will not
exceed the maximum number of shares contemplated by
Section 2 of this Agreement;
(D) no person has any option, warrant or other right to
acquire any shares of the Company, except as disclosed in
this Agreement;
(E) the Company is a recently incorporated corporation which
does not own any assets;
(F) the Company does not have any liabilities or
indebtedness to any party;
(G) the Company has not conducted any business since
incorporation, other than activities relating to the
acquisition of ViaVid;
<Page 63>
-5-
(H) the Company is not party to any material agreements;
(I) there are no actions, suits or proceedings pending or
threatened against or affecting the Company and the
Company is not aware of any existing ground on which any
such action, suit or proceeding might be commenced with
any reasonable likelihood of success.
6. Conditions Precedent to Closing
The Company's obligation to complete the purchase of the Shares
held by each Accepting Shareholder is subject to each of the
following conditions:
(A) all representations and warranties of each Accepting
Shareholder will be true and correct in all material
respects on the Closing Date;
(B) there shall have been no material adverse change to the
business of ViaVid between the date of acceptance and the
Closing Date;
(C) each Accepting Shareholder will have made the deliveries
contemplated in this offer on the Closing Date;
(D) this offer will be accepted by Shareholders holding all
of the issued and outstanding shares in the capital of
ViaVid;
(E) all books, accounting records, legal documentation,
financial statements, material contracts relating to
ViaVid will have been delivered to the Company prior to
or on the Closing Date.
Each Accepting Shareholder's obligation to complete the sale of the
Shares held by the Accepting Shareholder is subject to each of the
following conditions:
(A) all representations and warranties of the Company will be
true and correct in all material respects on the Closing
Date;
(B) the Company will have made the deliveries contemplated in
this offer on the Closing Date.
<Page 64>
-6-
7. Closing Deliveries
On the Closing Date, each Accepting Shareholder will deliver to the
Company:
(A) the Shares held by the Accepting Shareholder, duly
endorsed for transfer to the Company;
(B) written confirmation by the Accepting Shareholder as to
the truth and correctness of the representations and
warranties of the Accepting Shareholder as of the Closing
Date;
(C) if the Accepting Shareholder is an officer or director of
ViaVid, the resignation of the Accepting Shareholder, if
required by the Company, from each such position or
positions;
(D) all other corporate resolutions, agreements, assignments,
consents and documentation as deemed necessary by the
Company's solicitors to give effect to the transactions
contemplated by this agreement in accordance with
accepted commercial practice.
On the Closing Date, the Company will deliver to each Accepting
Shareholder an Acknowledgement of Acceptance executed by the
Company confirming the Company will deliver the certificates
representing the Company Shares to which the Accepting Shareholder
is entitled. Each Accepting Shareholder acknowledges and agrees
that delivery of share certificates will be delayed pending
appointment of the Company's transfer agent.
8. Appointment of Directors
On completion of the Closing, the following will be appointed the
officers and directors of the Company:
(A) Directors
---------
Paul Watkins
Brian Kathler
(B) Officers Office
-------- ------
Brian Kathler President
Cheryl Watkins Secretary and Treasurer
O. Ronald Jones Vice-President, Finance
<Page 65>
-7-
9. Acceptance
If a Shareholder wishes to accept this offer, the Shareholder must:
(A) execute this offer where indicated below;
(B) complete all information;
(C) deliver a copy of the Accepting Shareholder's acceptance
to the Company by no later than 12:00 p.m. (Pacific Time)
on January 29, 1999.
Yours truly,
VIAVID BROADCASTING, INC.
Per: /s/ Brian Kathler
Director
This offer is accepted and agreed to this 26 day of January,
1999.
SIGNATURE OF SHAREHOLDER: /s/ Bob Gamon
(Sign)
NUMBER OF SHARES HELD: 1000
(Number of Shares of ViaVid)
NAME OF SHAREHOLDER: 549419 BC Ltd
(Print Name)
ADDRESS OF SHAREHOLDER: 4768 Woodgreen Dr.
(Print Address)
W. Vanc.
<Page 66>
CONSULTING CONTRACT
-------------------
THIS AGREEMENT is made as of the 1st day of February, 1999.
BETWEEN:
KATHLER HOLDINGS INC.
(the "Consultant")
OF THE FIRST PART
AND:
BRIAN KATHLER
(the "Principal")
OF THE SECOND PART
AND:
VIAVID BROADCASTING, INC.,
a Nevada corporation
(the "Company")
OF THE THIRD PART
WHEREAS:
A. The Company wishes to contract for the services of the
Consultant.
B. The Principal is an employee of the Consultant.
C. The Consultant has agreed to accept such contract for
services upon the terms and conditions of this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the
mutual covenants herein contained, the parties hereto agree as
follows:
1. ENGAGEMENT
1.1 Appointment: The Company hereby contracts for the
services of the Consultant and the Consultant hereby agrees with
the Company to perform services for the Company in accordance with
the terms and conditions of this Agreement. The
<Page 67>
2
Consultant agrees to provide the services of the Principal to provide
the services as contemplated in this Agreement and the Principal
agrees to perform such services as an employee of the Consultant.
The Consultant shall not use the services of any party other than the
Principal, whether as employee or contractor, to provide such services
without the prior written consent of the Company, which approval will
not be unreasonably withheld.
1.2 Scope of Duties: The Consultant will cause the Principal
to act as President of the Company and will have the following
responsibilities and duties to the Company to be provided as the
consultant services (the "Consultant Services"):
A. exercising general direction and supervision over the
business and financial affairs of the Company;
B. providing overall direction to the management of the
Company;
C. managing the day to day operations of the Company;
D. performing such other duties and observing such
instructions as may be reasonably assigned to him from
time to time by the Board of Directors; and
E. generally at all times abiding by all lawful directions
given to him by the Board of Directors of the Company.
1.3 Best Efforts: The Consultant shall at all times use
its best efforts to advance the interests of the Company, and shall
faithfully, industriously, and to the best of its abilities,
perform the responsibilities and duties described above.
1.4 Covenants and Restrictions: The Consultant covenants
and agrees with the Company that the Consultant will not engage in
any activities which would bring the Company's reputation into
disrepute.
1.5 Warranties and Representations: The Consultant and the
Principal warrant and represent to the Company as follows and
acknowledges that the Company is relying upon these warranties and
representations in entering into this Agreement:
(a) the Consultant and the Principal have the necessary
expertise to effectively provide the Consultant Services;
(b) the Consultant and the Principal are not aware of any
matter which would prevent the Consultant and/or the
Principal from carrying out their duties and obligations
pursuant to this Agreement;
(c) neither the Consultant nor the Principal is subject to
any review by any securities regulatory body.
<Page 68>
3
1.6 The Consultant and the Principal shall at all times be
independent contractors and shall not at any time be or be deemed
to be employees of the Company . The Consultant and the Principal
acknowledge that they are not employees of the Company and that the
execution of this Agreement shall not give rise to any employment
with of the Company.
2. TERM
2.1 Initial Term: The initial term of this Agreement shall
be one (1) year, commencing on the date of first written above,
subject to earlier termination as hereinafter provided.
2.2 Renewal: This Agreement shall be renewed for further
terms of such duration and upon such terms and conditions as the
Consultant and the Company may mutually agree upon in writing.
3. PAYMENT FOR THE CONSULTANT SERVICES
3.1 The Company shall pay to the Consultant a consultant fee
in consideration for the Consultant Services equal to the sum of
$5,000 CDN per month (the "Consultant Fee"), provided that the
Consultant Fee will be reviewed by the Consultant and the Company
after a period of six months from the date of this Agreement.
3.2 Federal Goods and Services Tax on the Consultant Fee
shall be payable by the Company in addition to the Consultant Fee.
3.3 The Consultant may be granted, subject to the
approval of the Company's shareholders and compliance with all
securities regulatory legislation, incentive stock options to
purchase shares in the Company in such amounts and at such times as
the Board of Directors of the Company, in their absolute
discretion, may from time to time determine.
3.4 The Consultant Fee shall be payable by the Company to the
Consultant on the last business day of each month during the term
of this Agreement.
3.6 The parties agree that the Consultant Fee provided for in
paragraph 3.1 hereof is intended to include reimbursement for all
expenses incurred by the Consultant in connection with its duties
hereunder save and except for expenses directly related to the
performance of the Consultant's duties as President of the Company
and the Consultant shall bear the cost of its own expenses, except
for any reasonable travel and promotional expenses and other
specific expenses incurred by the Consultant with the prior written
approval of the Company.
<Page 69>
4
4. CONFIDENTIALITY
4.1 Confidential Information and Non-Disclosure. The
Consultant and the Principal acknowledge and agree with each other
that all information connected with the Company's technology,
including without limitation, all computer software, trade secrets,
information, data, inventions, discoveries, improvements,
modifications, developments, technical manuals, or process-flow
manuals, data, customer information and pricing information is
confidential, and the Consultant and the Principal each jointly and
severally covenant and agree with the Company to use its best
efforts to ensure that such information does not become public
knowledge and undertakes not to disclose such information or any
part thereof to any other person except to its consultants and
employees as may be necessary to carry out its rights and
obligations under this Agreement. The Consultant hereby further
covenants and agrees with the Company that the Consultant shall
require each and every one of its employees or consultants who are
provided with any information in respect of the Company's
technology or related knowledge to sign confidentiality agreements
which shall be in a form acceptable to the Company. All such
information shall be returned to the Company upon termination of
this Agreement.
4.2 Non-Competition. Each of the Consultant and the
Principal shall not during the term of this Agreement and during
the period which is one year after the date of the termination of
this Agreement, either alone or in partnership or jointly or in
conjunction with any person or persons, including without
limitation, any individual, firm, association, syndicate, company,
corporation or other business enterprise, as principal, agent,
shareholder, or in any other manner whatsoever, carry on or be
engaged in or concerned with or interested in or advise, lend money
to, guarantee the debts or obligations of or permit their names to
be used or employed by any person or persons, including without
limitation, any individual, firm, association, syndicate, company,
corporation or other business enterprise, engaged in or concerned
with or interested in an operation or undertaking which is in any
way competitive with the business of the Company without having
obtained the express written consent of the Company . The
Consultant and the Principal acknowledge and agree the geographical
restrictions contained herein are reasonable in light of the nature
of the Company's technology and business. The Consultant and the
Principal further agree to not:
(a) carry on, be engaged in or concerned with or
interested in any business, operation or
undertaking which is in any way competitive
with the business of the Company anywhere in
Canada and in the United States were the
business of the Company is carried on; and
(b) attempt to solicit any suppliers, customers,
or employees of the business of the Company
away from the Company.
<Page 70>
5
4.3 Any and all inventions and improvements on which the
Consultant or the Principal may conceive or make, during the term
of this Agreement, relating, or in any way, pertaining to or
connected with any of the matters which have been, are or may
become the subject of the Company's investigations, or in which the
Company has been, is, or may become interested, shall be the sole
and exclusive property of the Company, and the Consultant will,
whenever requested by the Company, execute any and all
applications, assignments and other instruments which the Company
shall deem necessary in order to apply for and obtain letters of
patent for U.S. or foreign countries for the inventions or
improvements and in order to assign and convey to the Company the
sole and exclusive right, title and interest in and to the
inventions or improvements, all expenses in connection with them to
be borne by the Company. The Consultant's obligations to execute
the papers referred to in this paragraph shall continue beyond the
termination of this Agreement with respect to any and all
inventions or improvements conceived or made by him during the term
of this Agreement, and the obligations shall be binding on the
assigns, executors, administrators or other legal representatives
of the Consultant. All inventions and discoveries relating to the
business of the Company and all knowledge and information which the
Consultant may acquire during his engagement shall be held by the
Consultant in trust for the benefit of the Company.
5. TERMINATION
5.1 Termination by the Company for Cause: The Company may
terminate this Agreement at any time for just cause, provided that
a reasonable written notice of three business days has been first
given by the Company to the Consultant. In this Agreement, in
addition to any cause permitted by law, "just cause" with respect
to termination by the Company includes:
(a) the Consultant's or the Principal's material default,
misconduct, breach or non-observance of any provision of
this Agrement;
(b) the inability of the Consultant to provide the services
of the Principal to perform the Consultant Services;
(c) the attempted assignment of this Agreement by the
Consultant, in breach of this Agreement, or the sale of
any interest in the Consultant by the Principal or any
change in directors or officers of the Consultant;
(d) the dissolution, insolvency or the bankruptcy of the
Consultant or the Principal.
5.2 Termination by the Consultant: The Consultant may
terminate this Agreement for just cause at any time without notice
to the Company, or without just cause
<Page 71>
6
by providing 90 days' notice in writing to the Company. In this
Agreement, in addition to any cause permitted by law, "just cause"
with respect to termination by the Consultant includes:
(a) the Company's material default, misconduct, breach or
non-observance of any provision of this Agreement;
(b) the dissolution, insolvency or bankruptcy of the Company.
5.3 Termination by the Company without Cause. The Company
may terminate this Agreement at any time without cause, in which
event the Company will pay to the Consultant and the Principal, an
amount equal to four months of the Consultant Fee, plus any
Consultant Fee and expenses payable to the date of Termination.
5.4 Survival of Obligations. The obligations of the
Consultant and the Principal set forth in Sections 4.1, 4.2 and 4.3
of this Agreement will survive termination of this Agreement for
any reason.
6. OTHER PROVISIONS
6.1 Governing Law: This Agreement shall be governed by and
construed in accordance with the laws of the Province of British
Columbia.
6.2 Notice: Any notice required or permitted to be given
under this Agreement shall be in writing and may be delivered
personally or by telex or telecopier, or by prepaid registered post
addressed to the parties at the above-mentioned addresses or at
such other address of which notice may be given by either of such
parties. Any notice shall be deemed to have been received, if
personally delivered or by telex or telecopier, on the date of
delivery and, if mailed as aforesaid, then on the seventh business
day after and excluding the day of mailing.
6.3 Personal Nature: This Agreement is a contract for
services and may not be assigned in whole or in part by the
Consultant or the Principal.
6.4 Whole Agreement. This Agreement supersedes any previous
agreement, arrangement or understanding, whether written or oral
between the parties hereto and constitutes the entire agreement
between the parties and may only be amended in writing.
6.5 Severability. In the event that any provision of this
Agreement that is held to be unlawful or unenforceable, such
provision will be severable and the remaining terms and conditions
of this Agreement remain in force and effect.
<Page 72>
7
6.6 Time of Essence. Time is of the essence of this
Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement as of
the day first above written.
SIGNED, SEALED AND DELIVERED
BY BRIAN KATHLER
in the presence of:
/s/Cheryl Watkins /s/ Brian Kathler
__________________ ____________________
Signature BRIAN KATHLER
Cheryl Watkins
Name
187 E. Braimar Rd.
Address
N. Van. BC
KATHLER HOLDINGS INC.
by its authorized signatory:
/s/ Brian Kathler
________________________________
Authorized Signatory
VIAVID BROADCASTING, INC.
by its authorized signatory:
/s/ Paul Watkins
________________________________
Director
<Page 73>
CONSULTING CONTRACT
-------------------
THIS AGREEMENT is made as of the 1st day of February, 1999.
BETWEEN:
WATKINS COMMUNICATIONS INC.
(the "Consultant")
OF THE FIRST PART
AND:
PAUL WATKINS
(the "Principal")
OF THE SECOND PART
AND:
VIAVID BROADCASTING, INC.,
a Nevada corporation
(the "Company")
OF THE THIRD PART
WHEREAS:
A. The Company wishes to contract for the services of the
Consultant.
B. The Principal is an employee of the Consultant.
C. The Consultant has agreed to accept such contract for
services upon the terms and conditions of this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the
mutual covenants herein contained, the parties hereto agree as
follows:
1. ENGAGEMENT
1.1 Appointment: The Company hereby contracts for the
services of the Consultant and the Consultant hereby agrees with
the Company to perform services for the Company in accordance with
the terms and conditions of this Agreement. The Consultant
<Page 74>
2
agrees to provide the services of the Principal to provide the services
as contemplated in this Agreement and the Principal agrees to perform
such services as an employee of the Consultant. The Consultant
shall not use the services of any party other than the Principal,
whether as employee or contractor, to provide such services without
the prior written consent of the Company, which approval will not
be unreasonably withheld.
1.2 Scope of Duties: The Consultant will cause the Principal
to act as a director of the Company and will have the following
responsibilities and duties to the Company to be provided as the
consultant services (the "Consultant Services"):
A. exercising general direction and supervision over the
marketing and development of the business of the Company;
B. providing direction to the management of the Company;
C. assisting with the day to day operations of the Company;
D. performing such other duties and observing such
instructions as may be reasonably assigned to him from
time to time by the Board of Directors; and
E. generally at all times abiding by all lawful directions
given to him by the Board of Directors of the Company.
1.3 Best Efforts: The Consultant shall at all times use its
best efforts to advance the interests of the Company, and shall
faithfully, industriously, and to the best of its abilities,
perform the responsibilities and duties described above.
1.4 Covenants and Restrictions: The Consultant covenants
and agrees with the Company that the Consultant will not engage in
any activities which would bring the Company's reputation into
disrepute.
1.5 Warranties and Representations: The Consultant and the
Principal warrant and represent to the Company as follows and
acknowledges that the Company is relying upon these warranties and
representations in entering into this Agreement:
(a) the Consultant and the Principal have the necessary
expertise to effectively provide the Consultant Services;
(b) the Consultant and the Principal are not aware of any
matter which would prevent the Consultant and/or the
Principal from carrying out their duties and obligations
pursuant to this Agreement;
(c) neither the Consultant nor the Principal is subject to
any review by any securities regulatory body.
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1.6 The Consultant and the Principal shall at all times be
independent contractors and shall not at any time be or be deemed
to be employees of the Company . The Consultant and the Principal
acknowledge that they are not employees of the Company and that the
execution of this Agreement shall not give rise to any employment
with of the Company.
2. TERM
2.1 Initial Term: The initial term of this Agreement shall
be one (1) year, commencing on the date of first written above,
subject to earlier termination as hereinafter provided.
2.2 Renewal: This Agreement shall be renewed for further
terms of such duration and upon such terms and conditions as the
Consultant and the Company may mutually agree upon in writing.
3. PAYMENT FOR THE CONSULTANT SERVICES
3.1 The Company shall pay to the Consultant a consultant fee
in consideration for the Consultant Services equal to the sum of
$5,000 CDN per month (the "Consultant Fee"), provided that the
Consultant Fee will be reviewed by the Consultant and the Company
after a period of six months from the date of this Agreement.
3.2 Federal Goods and Services Tax on the Consultant Fee
shall be payable by the Company in addition to the Consultant Fee.
3.3 The Consultant may be granted, subject to the
approval of the Company's shareholders and compliance with all
securities regulatory legislation, incentive stock options to
purchase shares in the Company in such amounts and at such times as
the Board of Directors of the Company, in their absolute
discretion, may from time to time determine.
3.4 The Consultant Fee shall be payable by the Company to the
Consultant on the last business day of each month during the term
of this Agreement.
3.6 The parties agree that the Consultant Fee provided for in
paragraph 3.1 hereof is intended to include reimbursement for all
expenses incurred by the Consultant in connection with its duties
hereunder save and except for expenses directly related to the
performance of the Consultant's duties as director of the Company
and the Consultant shall bear the cost of its own expenses, except
for any reasonable travel and promotional expenses and other
specific expenses incurred by the Consultant with the prior written
approval of the Company.
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4. CONFIDENTIALITY
4.1 Confidential Information and Non-Disclosure. The
Consultant and the Principal acknowledge and agree with each other
that all information connected with the Company's technology,
including without limitation, all computer software, trade secrets,
information, data, inventions, discoveries, improvements,
modifications, developments, technical manuals, or process-flow
manuals, data, customer information and pricing information is
confidential, and the Consultant and the Principal each jointly and
severally covenant and agree with the Company to use its best
efforts to ensure that such information does not become public
knowledge and undertakes not to disclose such information or any
part thereof to any other person except to its consultants and
employees as may be necessary to carry out its rights and
obligations under this Agreement. The Consultant hereby further
covenants and agrees with the Company that the Consultant shall
require each and every one of its employees or consultants who are
provided with any information in respect of the Company's
technology or related knowledge to sign confidentiality agreements
which shall be in a form acceptable to the Company. All such
information shall be returned to the Company upon termination of
this Agreement.
4.2 Non-Competition. Each of the Consultant and the
Principal shall not during the term of this Agreement and during
the period which is one year after the date of the termination of
this Agreement, either alone or in partnership or jointly or in
conjunction with any person or persons, including without
limitation, any individual, firm, association, syndicate, company,
corporation or other business enterprise, as principal, agent,
shareholder, or in any other manner whatsoever, carry on or be
engaged in or concerned with or interested in or advise, lend money
to, guarantee the debts or obligations of or permit their names to
be used or employed by any person or persons, including without
limitation, any individual, firm, association, syndicate, company,
corporation or other business enterprise, engaged in or concerned
with or interested in an operation or undertaking which is in any
way competitive with the business of the Company without having
obtained the express written consent of the Company . The
Consultant and the Principal acknowledge and agree the geographical
restrictions contained herein are reasonable in light of the nature
of the Company's technology and business. The Consultant and the
Principal further agree to not:
(a) carry on, be engaged in or concerned with or
interested in any business, operation or
undertaking which is in any way competitive
with the business of the Company anywhere in
Canada and in the United States were the
business of the Company is carried on; and
(b) attempt to solicit any suppliers, customers, or
employees of the business of the Company away
from the Company.
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5
4.3 Any and all inventions and improvements on which the
Consultant or the Principal may conceive or make, during the term
of this Agreement, relating, or in any way, pertaining to or
connected with any of the matters which have been, are or may
become the subject of the Company's investigations, or in which the
Company has been, is, or may become interested, shall be the sole
and exclusive property of the Company, and the Consultant will,
whenever requested by the Company, execute any and all
applications, assignments and other instruments which the Company
shall deem necessary in order to apply for and obtain letters of
patent for U.S. or foreign countries for the inventions or
improvements and in order to assign and convey to the Company the
sole and exclusive right, title and interest in and to the
inventions or improvements, all expenses in connection with them to
be borne by the Company. The Consultant's obligations to execute
the papers referred to in this paragraph shall continue beyond the
termination of this Agreement with respect to any and all
inventions or improvements conceived or made by him during the term
of this Agreement, and the obligations shall be binding on the
assigns, executors, administrators or other legal representatives
of the Consultant. All inventions and discoveries relating to the
business of the Company and all knowledge and information which the
Consultant may acquire during his engagement shall be held by the
Consultant in trust for the benefit of the Company.
5. TERMINATION
5.1 Termination by the Company for Cause: The Company may
terminate this Agreement at any time for just cause, provided that
a reasonable written notice of three business days has been first
given by the Company to the Consultant. In this Agreement, in
addition to any cause permitted by law, "just cause" with respect
to termination by the Company includes:
(a) the Consultant's or the Principal's material default,
misconduct, breach or non-observance of any provision of
this Agrement;
(b) the inability of the Consultant to provide the services
of the Principal to perform the Consultant Services;
(c) the attempted assignment of this Agreement by the
Consultant, in breach of this Agreement, or the sale of
any interest in the Consultant by the Principal or any
change in directors or officers of the Consultant;
(d) the dissolution, insolvency or the bankruptcy of the
Consultant or the Principal.
5.2 Termination by the Consultant: The Consultant may
terminate this Agreement for just cause at any time without notice
to the Company, or without just cause
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6
by providing 90 days' notice in writing to the Company. In this
Agreement, in addition to any cause permitted by law, "just cause"
with respect to termination by the Consultant includes:
(a) the Company's material default, misconduct, breach or
non-observance of any provision of this Agreement;
(b) the dissolution, insolvency or bankruptcy of the Company.
5.3 Termination by the Company without Cause. The Company
may terminate this Agreement at any time without cause, in which
event the Company will pay to the Consultant and the Principal, an
amount equal to four months of the Consultant Fee, plus any
Consultant Fee and expenses payable to the date of Termination.
5.4 Survival of Obligations. The obligations of the
Consultant and the Principal set forth in Sections 4.1, 4.2 and 4.3
of this Agreement will survive termination of this Agreement for
any reason.
6. OTHER PROVISIONS
6.1 Governing Law: This Agreement shall be governed by and
construed in accordance with the laws of the Province of British
Columbia.
6.2 Notice: Any notice required or permitted to be given
under this Agreement shall be in writing and may be delivered
personally or by telex or telecopier, or by prepaid registered post
addressed to the parties at the above-mentioned addresses or at
such other address of which notice may be given by either of such
parties. Any notice shall be deemed to have been received, if
personally delivered or by telex or telecopier, on the date of
delivery and, if mailed as aforesaid, then on the seventh business
day after and excluding the day of mailing.
6.3 Personal Nature: This Agreement is a contract for
services and may not be assigned in whole or in part by the
Consultant or the Principal.
6.4 Whole Agreement. This Agreement supersedes any previous
agreement, arrangement or understanding, whether written or oral
between the parties hereto and constitutes the entire agreement
between the parties and may only be amended in writing.
6.5 Severability. In the event that any provision of this
Agreement that is held to be unlawful or unenforceable, such
provision will be severable and the remaining terms and conditions
of this Agreement remain in force and effect.
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6.6 Time of Essence. Time is of the essence of this
Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement as of
the day first above written.
SIGNED, SEALED AND DELIVERED
BY PAUL WATKINS
in the presence of:
/s/Cheryl Watkins /s/ Paul Watkins
__________________ ___________________
Signature PAUL WATKINS
Cheryl Watkins
Name
187 E. Braimar Rd.
Address
N. Van. BC
WATKINS COMMUNICATIONS INC.
by its authorized signatory:
/s/ Paul Watkins
________________________________
Authorized Signatory
VIAVID BROADCASTING, INC.
by its authorized signatory:
/s/ Brian Kathler
________________________________
Director
