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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
PADDINGTON INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 52-2159951
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(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
Suite E, 15/F, Ho Lee Commercial Building, 40 D'Aguilar Street, Central,
Hong Kong, or c/o Registered Agents, Ltd., 1220 North Market Street,
Suite 606, Wilmington, Delaware 19801
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(Address of Principal Executive Offices including Zip Code)
(852) 2523-5522 or (302) 421-5750
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(Registrant's Telephone Number)
Securities to be Registered
Under Section 12(b) of the Act: None
Securities to be Registered
Under Section 12(g) of the Act: Common Stock,
$0.0001 Par Value
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(Title of Class)
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TABLE OF CONTENTS
Part I
Item 1. Description of the Business
Item 2. Management's Discussion and Analysis or
Plan of Operation
Item 3. Description of Property
Item 4. Security Ownership of Certain Beneficial Owners
Item 5. Directors, Executive Officers, Promoters
and Control Persons
Item 6. Executive Compensation
Item 7. Certain Relationships and Related Transactions
Item 8. Description of Securities
Part II
Item 1. Market Price of and Dividends on the
Registrant's Common Equity and Other
Stockholder Matters
Item 2. Legal Proceedings
Item 3. Changes in and Disagreements with
Accountants
Item 4. Recent Sales of Unregistered Securities
Item 5. Indemnification of Directors and Officers
Item 6. Glossary
Part F/S
F-1. Report of Independent Public Accountants
F-2. Balance Sheet as of April 30, 1999
F-3,F-4 Notes to the Balance Sheet
Part III
Index to Exhibits
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PART I
ITEM 1. DESCRIPTION OF THE BUSINESS.
1A. GENERAL
Paddington Inc. (the "Company") was incorporated on March 29, 1999
under the laws of the State of Delaware to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and acquisitions.
The Company has been in the developmental stage since its inception and has no
operations to date other than issuing shares to its original shareholders.
The Company has been formed in accordance with the requirements for
forming a Blank Check Company. See PART II, ITEM 6, "GLOSSARY". The Company
intends to provide a method for a foreign or domestic private company to become
a reporting company whose securities are qualified for trading in the United
States secondary market, pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
As such, the Company will attempt to locate and negotiate with a
business entity (a "Target Company") for the merger with or consolidation of,
the full or partial acquisition of, or the entering into any other business
combination with a Target Company. No assurances can be given that the Company
will be successful in locating, negotiating or merging with, acquiring, or
entering into any other business combination with any Target Company.
1B. PERCEIVED BENEFITS
There are certain perceived benefits to being a company with a class
of publicly-traded securities. These are commonly thought to include the
following:
* the ability to use registered securities to make acquisitions
of assets or businesses;
* increased visibility in the financial community;
* facility of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in raising capital;
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* compensation of key employees through stock options and
similar stock plans;
* enhanced corporate image; and
* a presence in the United States capital market.
1C. POTENTIAL TARGET COMPANIES
Target Companies that may be interested in any form of business
combination with the Company could include, without limitation, the following:
* a company for which the primary purpose of becoming public is
the use of its securities for the acquisition of assets or
businesses;
* a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of securities
on terms acceptable to it;
* a company which wishes to become public with less dilution of
its common stock than would occur upon an underwriting of
additional equity;
* a company which believes that it will be able to obtain
investment capital on more favorable terms after it has
become public;
* a foreign company which desires to make an initial entry into
the United States capital market;
* a special situation company, such as a company seeking a
public market to satisfy redemption requirements under a
qualified Employee Stock Option Plan; and
* a company seeking one or more of the other perceived benefits
of becoming a public company.
The officers, directors and shareholders are currently composed of the
same individuals. See Item 5, "Directors, Officers, Promoters and Control
Persons" and Item 7, "Certain relationships and related transactions". A
business combination with a Target Company will normally, but not necessarily,
involve the transfer to the Target Company of the majority of the issued and
outstanding common stock of the Company, and the partial or complete
substitution by the Target Company of the Company's current officers and
directors.
No assurances can be given with respect to the Company's ability to
enter into a business combination, nor can assurances
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be made regarding the terms of any business combination or the nature of the
Target Company with which the Company may enter into a business combination.
See ITEM 1D(2), "SPECULATIVE NATURE OF THE COMPANY'S PROPOSED PLAN OF
OPERATION".
The proposed business activities described herein classify the Company
as a Blank Check Company. See PART II, ITEM 6, "GLOSSARY". The Securities and
Exchange Commission (the "Commission") and many states have enacted statutes,
rules and regulations limiting the sale of securities of Blank Check Companies.
The officers and directors do not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as the Company
has successfully implemented its business plan described herein. Accordingly,
the shareholders of the Company have executed and delivered a "lock-up" letter
agreement affirming that such shareholders will not sell or otherwise transfer
their shares of the Company's common stock except in connection with or
following completion of a business combination with a Target Company resulting
in the Company no longer being classified as a Blank Check Company. The
shareholders have deposited their stock certificates with the Company's
officers and directors, who will not release the certificates except in
connection with or following the completion of a merger or acquisition. No
preferred stock of the Company has been issued at this time. In addition, the
Company's Board of Directors have adopted a resolution stating that the Company
will not seek to issue any or authorize any additional preferred stock, except
in connection with or following completion of a business combination with a
Target Company resulting in the Company no longer being classified as a Blank
Check Company.
The Company is voluntarily filing this Form 10-SB (the "Registration
Statement") with the Commission and is under no obligation to do so under the
Exchange Act.
1D. RISK FACTORS
The Company's business is subject to numerous risk factors, including
but not limited to the following:
(1) NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS.
The Company has had no operating history, revenues or
earnings from operations and has no significant assets or
financial resources. The Company will, in all likelihood,
sustain operating expenses without corresponding revenues, at
least until the consummation of a business combination, if
any. This may result in the Company incurring a net operating
loss that will increase continuously until the Company can
consummate a business combination with a Target Company.
There is no assurance that the Company can identify such a
Target Company and consummate such a business combination.
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(2) SPECULATIVE NATURE OF THE COMPANY'S PROPOSED PLAN OF
OPERATIONS.
The success of the Company's proposed plan of operation will
depend to a great extent on the operations, financial
condition and management of the identified Target Company
following any business combination. While the Company's
officers, directors and current shareholders will likely
prefer business combinations with entities having established
operating histories, there can be no assurance that the
Company will be successful in locating Target Companies
meeting such criteria. In the event the Company completes a
business combination, of which there can be no assurance, the
success of the Company's operations will be dependent upon
the business operations and financial results of the Target
Company and numerous other factors beyond the Company's
control.
(3) SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS.
The Company anticipates that it will be an insignificant
participant in the business of seeking mergers with and
acquisitions of business entities. A large number of
established and well-financed entities, including venture
capital firms, are active in mergers with and acquisitions of
Target Companies. Nearly all such entities have significantly
greater financial resources, technical expertise and
managerial capabilities than the Company and, consequently,
the Company will be at a competitive disadvantage in
identifying possible business opportunities and successfully
negotiating and completing a business combination. Moreover,
the Company will also compete with numerous other small
public and private companies in seeking merger or acquisition
candidates.
(4) NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION -
NO STANDARDS FOR BUSINESS COMBINATION.
The Company has no current arrangement, agreement or
understanding with respect to engaging in a merger with or
acquisition of a specific Target Company. There can be no
assurance that the Company will be successful in identifying
and evaluating suitable business opportunities, locating a
Target Company or concluding a business combination. The
officers and directors have
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not identified any particular industry or specific business
within an industry for evaluation by the Company. There is no
assurance that the Company will be able to negotiate a
business combination on terms favorable to the Company. In
implementing a structure for a particular business
acquisition with a Target Company, the Company may also
become a party to a merger, consolidation, reorganization,
joint venture or licensing agreement with another corporation
or entity. The Company has not established a specific length
of operating history or a specified level of earnings,
assets, net worth or other criteria which it will require a
Target Company to have achieved, or without which the Company
would not consider a business combination with such Target
Company. Accordingly, the Company may enter into a business
combination with a Target Company having losses, no
significant operating history, limited or no potential for
immediate earnings, limited assets, negative net worth or
other negative characteristics. The Company may, however,
consider other factors, including (but not limited to) the
Target Company's long-term growth possibilities, as well as
its strategic position relative to other companies in its
location and industry, in deciding to enter into a business
combination.
(5) CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY.
While seeking a business combination, the officers and
directors anticipate keeping their current employment
positions as well as seeking to organize other companies of a
similar nature. As such, demands may be placed on the
officers' and directors' time that will detract from the time
they are able to devote to the Company. The officers and
directors intend to devote as much time to the activities of
the Company as required; however, should a conflict arise,
there is no assurance that the officers and directors of the
Company would not attend to other matters prior to those of
the Company. Initially, the officers and directors intend to
devote up to ten (10) hours each per month to the business of
the Company, and they intend to increase that amount of time
when the analysis of, and negotiations and consummation with,
a Target Company is conducted. See ITEM 5E, "CONFLICTS OF
INTEREST". The Company's officers have not entered into a
written employment agreement with the Company and they are
not expected to do so in the foreseeable future. The Company
has not obtained key man life insurance on its officers and
directors. Notwithstanding the limited experience and limited
time commitment of the officers and directors,
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loss of the services of the officers and directors would
adversely affect development of the Company's business and
its likelihood of continuing operations.
(6) CONFLICTS OF INTEREST--GENERAL.
The Company's officers and directors participate in other
business ventures that may compete directly with the Company.
The officers and directors will be responsible for seeking,
evaluating, negotiating and consummating a business
combination with a Target Company that may result in terms
providing benefits to the officers and directors. Additional
conflicts of interest and non-arms length transactions may
also arise in the future. The officers and directors have
adopted a resolution stating that the Company will not seek a
merger with, or acquisition of, any entity in which any
member of the officers and directors serves as an officer,
director or partner, or in which they or their family members
own or hold any ownership interest. See ITEM 5. "DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS--Conflicts
of Interest". There are no binding guidelines or procedures
for resolving potential conflicts of interest. Failure by the
officers and directors to resolve conflicts of interest in
favor of the Company could result in liability of the
officers and directors to the Company. However, any attempt
by shareholders to enforce a liability of the officers and
directors to the Company would most likely be prohibitively
expensive and time consuming. As the shareholders and the
officers and directors are currently the same persons, these
conflicts of interest also apply to the shareholders.
(7) OTHER BLANK CHECK COMPANIES.
The officers and directors are currently involved in creating
additional Blank Check Companies substantially similar to the
Company. To date, four other companies substantially similar
to the Company have been or are in the process of being
established, but none of those companies has taken such
action as the filing of a Registration Statement or any other
securities filing or issuance. A conflict may arise in the
event that another Blank Check Company with which the
officers and directors are affiliated files a Registration
Statement and actively seeks a Target Company. The officers
and directors anticipate (but are not required to so effect)
that Target Companies will be located for the Company and
other Blank Check Companies either (i) in chronological order
of the date of formation of such
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Blank Check Companies; or (ii) by lot. However, other Blank
Check Companies that may be formed may differ from the
Company in certain items such as place of incorporation,
number of shares and shareholders, working capital, types of
authorized securities, or other items. It may be that a
Target Company may be more suitable for or may prefer a
certain Blank Check Company formed after the Company. In such
case, a business combination might be negotiated on behalf of
the more suitable or preferred Blank Check Company regardless
of date of formation or choice by lot. See ITEM 5C,
"DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS--Current Blank Check Companies".
(8) REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Section 13 of the Exchange Act requires companies subject to
the Exchange Act to provide certain information about
significant acquisitions, including certified financial
statements for an acquired company covering one or two
complete fiscal years, depending on the relative size of any
acquisition. The time and additional costs that may be
incurred by some Target Companies to prepare such financial
statements may significantly delay or essentially preclude
consummation of an otherwise desirable acquisition by the
Company. Acquisition prospects that do not have or are unable
to obtain the required financial statements may not be
appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
(9) LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION AND
EXPERTISE.
The Company has neither conducted nor obtained market
research indicating that demand exists for the type of
transactions contemplated by the Company. Even in the event
demand exists for a merger or acquisition of the type
contemplated by the Company, there is no assurance the
Company will be successful in completing any such business
combination.
The officers and directors will be responsible for seeking,
evaluating, negotiating and consummating a business
combination with a Target Company. The officers and directors
are not, however, professional business analysts, and are
novices relative to the more established and well-financed
entities who are active in mergers with and acquisitions of
Target Companies. Therefore, the Company will operate at a
competitive disadvantage in identifying and completing
business combinations with suitable Target Companies.
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(10) LACK OF DIVERSIFICATION.
The Company's proposed operations, even if successful, will
probably, but not necessarily, result in the Company engaging
in a business combination with only one Target Company. The
officers and directors anticipate that the Company will be
able to participate in only one potential business venture
because the Company has nominal assets and limited financial
resources. See ITEM F/S, "BALANCE SHEETS". Consequently, the
Company's activities will be limited to those engaged in by
the Target Company with which the Company merges or acquires.
The Company's inability to diversify its activities into a
number of areas may subject the Company to economic
fluctuations within a particular business or industry and
therefore increase the risks associated with the Company's
operations. This lack of diversification should be considered
a substantial risk to the shareholders of the Company because
it will not permit the Company to offset potential losses
from one venture against gains from another.
(11) REGULATION UNDER THE INVESTMENT COMPANY ACT.
Although the Company will be subject to regulation under the
Exchange Act, (and, if involved in a reorganization,
potentially the Securities Act of 1933, as amended (the
"Securities Act")), the officers and directors anticipate
that the Company will not be subject to regulation under the
Investment Company Act of 1940 (the "Investment Company
Act"). In the event the Company engages in business
combinations which result in the Company holding passive
investment interests in a number of entities, the Company
could be subject to regulation under the Investment Company
Act. In such event, the Company would be required to register
as an investment company under the Investment Company Act and
comply with the provisions thereof and could be expected to
incur significant registration and compliance costs. The
Company has obtained no formal determination from the
Commission as to the status of the Company under the
Investment Company Act. Any violation of the Investment
Company Act could subject the Company to material adverse
consequences.
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(12) PROBABLE CHANGE IN CONTROL AND MANAGEMENT.
A business combination involving the issuance of the
Company's common stock will, in all likelihood, result in the
shareholders of the Target Company obtaining a controlling
interest in the Company. Any such business combination may
require shareholders of the Company to sell or transfer all
or a portion of the Company's common stock held by them. Any
merger or acquisition effected by the Company can be expected
to have a significant dilutive effect on the percentage of
shares held by the Company's shareholders at such time. The
resulting change in control of the Company could potentially
result in the partial or complete removal of the present
officers and directors of the Company and a corresponding
reduction in or elimination of their participation in the
future affairs of the Company.
The issuance of previously authorized and unissued common
stock of the Company would also result in a reduction in
percentage of shares owned by the present shareholders of the
Company and would most likely result in a change in control
or substitution or replacement of some or all of the officers
and directors of the Company.
The terms of any business combination may include such terms
as any or all of Messrs. Yu, Wong, and Lok remaining a
director, officer and/or shareholder of the Company or any or
all of them becoming consultants to the Company with
compensation should they resign as directors and officers of
the Company and as a result of the consummation of a business
combination. See ITEM 5A, "BACKGROUNDS OF DIRECTORS".
(13) TAXATION.
Federal and state tax consequences will, in all likelihood,
be major considerations in any business combination the
Company undertakes. Currently, such transactions may be
structured to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The
Company intends to structure any business combination to
minimize the federal and state tax consequences to both the
Company and the Target Company. There can be no assurance,
however, that any such business combination will meet the
statutory requirements of a tax-free reorganization or that
the parties will obtain the intended tax-free treatment upon
a transfer of stock or assets. A non-qualifying
reorganization could result in the imposition of both federal
and state taxes that may have an adverse effect on all
parties to the transaction.
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(14) REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY
BUSINESS OPPORTUNITIES.
The officers and directors of the Company will request that
any potential Target Company provide audited financial
statements. One or more attractive Target Companies may
choose to forego the possibility of a business combination
with the Company rather than incur the expenses associated
with preparing audited financial statements. In such case,
the Company may choose to wait until the Target Company can
provide audited financial statements satisfying the
requirements of the Exchange Act.
If such audited financial statements are not available at
closing, or within time parameters necessary to insure the
Company's compliance with the requirements of the Exchange
Act, or if the audited financial statements provided do not
conform to the representations made by the Target Company,
the closing documents may provide that the proposed
transaction will be voidable at the discretion of the present
officers and directors of the Company.
(15) EMPLOYEES.
The Company has no full time employees. The Company's
officers and directors have agreed to allocate a portion of
their time to the activities of the Company, without
compensation. The officers and directors anticipate that the
business plan of the Company can be implemented by initially
devoting no more than ten (10) hours per month to the
business affairs of the Company and, consequently, conflicts
of interest may arise with respect to the limited time
commitment by such officers and directors. See ITEM 1D(5),
"RISK FACTORS--Continued Management Control; Limited Time
Availability".
(16) ADVISORS OF TARGET COMPANY
A potential Target Company may have an agreement with a
consultant or advisor providing for services of the
consultant or advisor to be continued after any business
combination. Additionally, a Target Company may be presented
to the Company only on the condition that the services of a
consultant or advisor be continued after a merger,
acquisition or other business combination. Such preexisting
agreements of Target Companies for the continuation of the
services of attorneys, accountants, advisors or consultants
could be a factor in the selection of a Target Company.
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(17) RISKS ASSOCIATED WITH THE YEAR 2000 PROBLEM
At present, the Company does not own or lease any computer
equipment. However, the Company, and any potential Target
Company, may face material adverse problems in maintaining or
upgrading its own (if any) or interfacing with other computer
systems, software, circuitry or any other electronic device
in the correct handling and processing of any date change.
Any such failure could have a material adverse effect on the
Company's financial condition and could also be a factor in
the selection of a Target Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
With the exception of any historical matters herein, the matters
discussed in this Item are forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from the
results, if any, discussed in such forward-looking statements. Any such
forward-looking statements should be read only in conjunction with this entire
Registration Statement and the exhibits hereto.
2A. GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such
investigation warrants, attempt to enter into some form of business combination
with a Target Company seeking the perceived advantages of having a class of
securities registered under the Exchange Act. The Company will not restrict its
search to any specific business, industry or geographical location and the
Company may participate in a business venture of virtually any kind or nature.
It is impossible to predict at this time the status of any business in which
the Company may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer. The Company is also not
restricted from implementing a structure for a particular business acquisition
with a Target Company in which the Company also becomes a party to a merger,
consolidation, reorganization, joint venture, or licensing agreement with a
third party corporation or entity. The Company has not identified any Target
Companies and has not entered into any negotiations regarding such business
combination to date. None of the Company's officers or directors have engaged
in any negotiations with any representative of any company regarding the
possibility of any business combination between the Company and such other
company to date.
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The officers and directors anticipate possibly seeking out a Target
Company through solicitation. Such solicitation may include newspaper or
magazine advertisements, mailings and other distributions to law firms,
accounting firms, investment bankers, financial advisors and similar persons,
the use of one or more World Wide Web sites and similar methods. No estimate
can be made as to the number of persons who may be contacted or solicited. The
officers and directors may engage in such solicitation directly or may employ
one or more other entities to conduct or assist in such solicitation. The
officers and directors will pay referral fees to consultants and others who
refer Target Companies for mergers into reporting companies in which the
officers and directors have an interest. Payments are made if a business
combination occurs, and may consist of cash or a portion of the stock in the
Company retained by the officers and directors.
The Company anticipates that the selection of a business opportunity
in which to participate will be complex and a high-risk endeavor. The officers
and directors believe (but have not conducted or obtained any research to
confirm) that there are business entities seeking the perceived benefits of a
publicly registered corporation. Such perceived benefits may include the items
listed in Part 1, Item 1B of this Registration Statement. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities difficult and
complex.
The Certificate of Incorporation of the Company provides that the
Company may indemnify officers and/or directors of the Company for liabilities,
which can include liabilities arising under the relevant securities laws.
Therefore, assets of the Company could be used or attached to satisfy any
liabilities subject to such indemnification. See PART 2, ITEM 5,
"INDEMNIFICATION OF DIRECTORS AND OFFICERS".
The Company has, and will continue to have, no capital with which to
provide the owners of business entities with any cash or other assets. The
Company believes it will be able to offer owners of Target Companies the
opportunity to enter into a business combination with a reporting company
without incurring the cost and time that would be required should a Target
Company decide to become a reporting company on its own. In analyzing
prospective business opportunities, the officers and directors will consider
such matters as: (i) available technical, financial and managerial resources;
(ii) working capital and other financial requirements; (iii) history of
operations, if any; (iv) prospects for the future; (v) nature of present and
expected competition; (vi) quality and experience of management services which
may be available and the depth of that management; (vii) potential for further
research, development or exploration; (viii) specific risk
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factors not now foreseeable but which then may be anticipated to impact the
proposed activities of the Company; (ix) potential for growth or expansion; (x)
the potential for profit; (xi) perceived public recognition or acceptance of
products, services or trades; (xii) name identification; and (xiii) other
relevant factors. This discussion of the proposed criteria is not meant to be a
restrictive or an inclusive list of the Company's virtually unlimited
discretion to search for and enter into potential business opportunities. The
officers and directors have not conducted or obtained market research and are
not aware of any empirical data to support the perceived benefits of a merger
or acquisition transaction for the owners of any Target Company. See ITEM
1D(9), "RISK FACTORS--LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION AND
EXPERTISE".
The Exchange Act requires that any merger or acquisition candidate
comply with certain reporting requirements, which include providing audited
financial statements in any reporting filings made under the Exchange Act. The
Company will not acquire or merge with any company for which audited financial
statements cannot be obtained that satisfy the requirements of the Exchange
Act.
The officers and directors of the Company will in all likelihood be
inexperienced in matters relating to the business of a Target Company. The
officers and directors will rely upon their own efforts in accomplishing the
pre-business combination purposes of the Company. Outside consultants or
advisors may be utilized by the Company to assist in the search for qualified
Target Companies. If the Company does retain such an outside consultant or
advisor, any cash fee earned by such person will need to be assumed by the
Target Company, as the Company has limited cash assets with which to pay such
obligation.
Following a business combination the Company may benefit from the
services of others in regard to accounting, legal services, underwritings and
corporate public relations. If requested by a Target Company, the officers and
directors of the Company may recommend one or more underwriters, financial
advisors, accountants, law firms, public relations firms or other consultants
to provide such services.
2B. ACQUISITION OF OPPORTUNITIES
It is anticipated that any securities issued in any such
reorganization would be issued in reliance upon exemption from registration
under the the Securities Act, any other applicable federal securities laws and
state securities laws. In some circumstances, however, as a negotiated element
of its transaction, the Company may agree to register all or a part of
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such securities under the applicable federal or state securities laws
immediately after the transaction is consummated or at specified times
thereafter. If such registration occurs, of which there can be no assurance, it
will be undertaken by the surviving entity after the Company has entered into
an agreement for a business combination or has consummated a business
combination and the Company is no longer considered a Blank Check Company.
Until such time as this occurs, the Company will not register any securities.
The issuance of additional securities and their potential sale into any trading
market which may develop in the Company's securities may depress the market
value of the Company's securities in the future if such a market develops, of
which there is no assurance.
While the terms of a business transaction to which the Company may be
a party cannot be predicted, it is expected that the parties to the business
transaction will desire to avoid the creation of a taxable event and thereby
structure the acquisition as a "tax-free" reorganization under Sections 351 or
368 of the Internal Revenue Code of 1986, as amended (the "Code").
With respect to any negotiations with a Target Company, the officers
and directors expect to analyze, among other factors, the percentage of the
Company Target Company shareholders would acquire in exchange for their
shareholdings in the Target Company. Depending upon, among other things, the
Target Company's assets and liabilities, the Company's shareholders would in
all likelihood hold a substantially lesser percentage ownership interest in the
Company following any such transaction. The percentage of ownership may be
subject to significant reduction in the event that the Company acquires a
Target Company with substantial assets.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing, will outline
the manner of bearing costs, including costs associated with the Company's
attorneys and accountants, and will include miscellaneous other terms.
The Company will not acquire or merge with any entity that cannot
provide audited financial statements satisfying the requirements of the
Exchange Act. The Company is subject to all of the reporting requirements of
the Exchange Act, including the duty to file audited financial statements as
part of or within sixty (60) days following the filing of a Form 8-K with the
Commission upon consummation of a merger or acquisition, and the
14
<PAGE> 17
duty to file the Company's audited financial statements included in its Annual
Report on Form 10-K (or 10-KSB, as applicable), as required under the Exchange
Act. The officers and directors have agreed that they will advance to the
Company any additional funds which the Company needs for operating capital and
for costs in connection with searching for or completing a business combination
with a target company. Such advances will be made without expectation of
repayment unless the owners of the business which the Company acquires or
merges with agree to repay all or a portion of such advances. There is no
minimum or maximum amount the officers and directors will advance to the
Company. The Company will not borrow any funds to make any payments to the
Company's promoters, officers, directors or their affiliates or associates.
The Board of Directors has passed a resolution adopting a policy that
the Company will not seek an acquisition or merger with any entity in which the
Company's officers, directors, and shareholders or any affiliate or associate
serves as an officer or director or holds any ownership interest.
2C. COMPETITION
The Company will remain an insignificant participant among the firms
that engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited financial
resources and limited management availability, the Company will continue to be
at a significant competitive disadvantage compared to the Company's
competitors. See ITEM 1D(3), "RISK FACTORS--SCARCITY OF AND COMPETITION FOR
BUSINESS OPPORTUNITIES AND COMBINATIONS".
ITEM 3. DESCRIPTION OF PROPERTY
3A. GENERAL
The Company has no properties and currently has no agreements or plans
to acquire any properties for its operations. The Company currently employs
Registered Agents, Ltd. as its registered agent in Delaware, and the Company's
officers and directors use the offices of Greenford Enterprises Limited, Suite
E, 15/F, Ho Lee Commercial Building, 40 D'Aguilar Street, Central, Hong Kong at
no cost to the Company. Greenford Enterprises Limited has agreed to continue
this arrangement until the Company completes a transaction with a Target
Company. One of the Company's officers, directors and beneficial owners, Mr.
Richard Che Keung Wong, is also a director and beneficial shareholder of
Greenford Enterprises Limited.
15
<PAGE> 18
3B. REAL ESTATE INVESTMENT POLICIES.
The Company has no real estate properties and at this time has no
agreements to acquire any properties. The Company does not preclude, however,
the possibility of becoming a party to a business combination with a Target
Company or another corporation or entity, or acquiring stock or assets of an
existing business, in which investments in real estate or interests in real
estate are involved.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
The following table sets forth, as of April 20, 1999, each person
known by the Company to be the beneficial owner of five percent or more of the
Company's common stock, all of whom are directors individually and directors
and officers of the Company as a group. Each person has sole voting and
investment power with respect to the shares shown. None of the stockholders
listed at this time have any rights to acquire within sixty (60) days any
additional common or preferred stock from options, warrants, rights, conversion
privilege(s) or similar obligations. No preferred stock of the Company has been
issued at this time. In addition, the Company has adopted a resolution stating
that it will not seek to issue any or authorize any additional preferred stock,
except in connection with or following completion of a business combination
with a Target Company resulting in the Company no longer being classified as a
Blank Check Company.
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------------- ---------------------- -------------------------
Title of Class Name and Address of Beneficial Owner Amount of Beneficial Percentage
Ownership of Class
- ------------------- -------------------------------------------------- ---------------------- -------------------------
<S> <C> <C> <C>
Common Stock Mr. King-Kwok Yu 2,000,000 33.3%
Suite E, 15/F, Ho Lee Commercial Building, 40
D'Aguilar Street, Central, Hong Kong
- ------------------- -------------------------------------------------- ---------------------- -------------------------
Common Stock Mr. Richard Che Keung Wong 2,000,000 33.3%
Suite E, 15/F, Ho Lee Commercial Building, 40
D'Aguilar Street, Central, Hong Kong
- ------------------- -------------------------------------------------- ---------------------- -------------------------
Common Stock Mr. Hardy Kung Chin Lok 2,000,000 33.3%
Suite E, 15/F, Ho Lee Commercial Building, 40
D'Aguilar Street, Central, Hong Kong
- ------------------- -------------------------------------------------- ---------------------- -------------------------
</TABLE>
16
<PAGE> 19
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
5A. BACKGROUNDS OF DIRECTORS
The Company has the following officers and directors:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Age Positions and Offices Held
- --------------------------------------------------------------------------------
<S> <C> <C>
King Kwok Yu 46 Director, President, Secretary,
Treasurer and Controller
- ---------------------------------------- ---------------------------------------
Richard Che Keung Wong 54 Director and Vice-Chairman
- ---------------------------------------- ---------------------------------------
Hardy Kung Chin Lok 49 Director and Chairman of the Board
- ---------------------------------------- ---------------------------------------
</TABLE>
There are no agreements or understandings for the officers or
directors to resign at the request of another person and the above-named
officer and director is not acting on behalf of nor will act at the direction
of any other person.
Set forth below are summary descriptions containing the name of the
directors and officers of the Company, all positions and offices with the
Company held, the period during which such officer or director has served as
such, and the business and educational experience of each during at least the
last twenty (20) years:
KING KWOK YU received a Bachelor of Arts in Economics from York
University (Canada) in 1976, a Master of Arts in Economics from University of
California, Santa Barbara in 1977 and a Masters in Business Administration in
Accounting from Golden Gate University in San Francisco, California in 1979.
Mr. Yu registered as a Certified Public Accountant with the Board of
Accountancy of the State of California in 1982 and now holds an inactive
Certified Public Accountant status. In 1984, Mr. Yu became an Associate Member
of the Hong Kong Society of Accountants. From 1979 to 1984, Mr. Yu was Staff
Auditor/Audit Supervisor to Oppenheim, Appel, Dixon & Co. (which included the
practice of Robinson, Sain, Snyder & Reiss) in San Francisco and Los Angeles,
California. From 1984 to 1987, Mr. Yu was Audit Supervisor/Assistant Audit
Manager to the Hong Kong offices of Ernst & Whitney and Spicer & Oppenheim.
From 1987 to 1988, Mr. Yu served as Group Financial Controller to Glynhill
International Limited in Hong Kong. From 1988 to 1990, Mr. Yu was Group Chief
Accountant to Polly Peck International (Hong Kong) Limited. In 1991, Mr. Yu was
Director to PHINA Corporate Finance Services (Asia) Limited in Hong Kong. From
1992 to 1994, Mr. Yu was Group Finance Director to Cathay International Group
based in Hong Kong. From 1997 to 1998, Mr. Yu served as Executive Director to
Richard King & Company Limited, of which he had been a Director since 1991.
From February 1999 to April 1999, Mr. Yu has served as a Consultant and
Associate Director to Hantec Asia Alliance Capital (China) Limited. Mr. Yu also
serves as a Director to several other Hong Kong companies, all of which have
not carried out any business activities in the last five years, and all of
which remain inactive as of the date of filing of this Registration Statement.
17
<PAGE> 20
RICHARD CHE KEUNG WONG received a Diploma in Youth and Community
Services in 1971 from the Jordanhill College of Education, Glasgow, Scotland
and a Bachelor of Arts in Economics from York University (Canada) in 1976. Mr.
Wong received a Fellowship from the Institute of Canadian Bankers (F.I.C.B.) in
1980. From 1964 to 1974, Mr. Wong was an Assistant Community & Youth Officer
with the Hong Kong Government Social Welfare Department, Group and Community
Work Division. From 1976 to 1979, Mr. Wong was Officer-in-Training/Assistant
Accountant with the Canadian Imperial Bank of Commerce. From 1979 to 1980, Mr.
Wong was Administration Officer to Toronto Dominion (H.K.) Limited. From 1980
to 1984, Mr. Wong served as Vice President and General Manager of the
Seattle-First National Bank, Hong Kong Branch. From 1984 to 1986, Mr. Wong was
Vice President of BA-Asia Limited, a merchant banking subsidiary of Bank of
America N.T. & S.A. From 1986 to 1989, Mr. Wong served as Vice President and
Country Manager of Bank of America N.T. & S.A. From 1989 to 1990, Mr. Wong
served as Regional Director (Asia) of Tyndall Bank International Plc. From 1990
to 1992, Mr. Wong was Finance Director to Tak Wing Investments (Holdings) Ltd.
From 1992 to 1994, Mr. Wong was Director and Chief Operating Officer of Cathay
International Holdings Plc. In 1994, Mr. Wong served as Director to Merrywise
Company Limited. From 1994 to 1997, Mr. Wong served as Director and Chief
Executive Officer of Faulding China Limited, HK and Chairman and Chief
Executive Officer of Foshan Faulding Pharmaceutical Co. Ltd., P.R.C. From 1997
to the present, Mr. Wong has been a Director of Richard King & Company Limited.
At present, Mr. Wong is also a Director of several property holding companies
in Hong Kong. During the past five years, Mr. Wong has also served as a
Director to several other Hong Kong companies, all of which have not carried
out any business activities in the last five years, and all of which remain
inactive as of the date of filing of this Registration Statement.
HARDY KUNG CHIN LOK received a Bachelor of Science in Civil
Engineering from the City University of Manchester (U.K.) - Institute of
Science & Technology in 1972. From 1972 to 1976, Mr. Lok was an Engineer with
Scott Wilson Kirkpatrick & Partners in the United Kingdom. From 1976 to the
present, Mr. Lok has been with John Lok & Partners, Ltd. and The Sun Company,
Ltd., both in Hong Kong, and is currently serving as Managing Director of both
entities. Mr. Lok is a Corporate Member of both the Institution of Civil
Engineers and the Hong Kong Institution of Engineers. At present, Mr. Lok also
serves as a Director to several property and construction companies in Hong
Kong, a consulting and advisory services company in Hong Kong and a cold
storage company in Hong Kong.
18
<PAGE> 21
5B. PREVIOUS BLANK CHECK COMPANIES
Since formation of the Company, Messrs. Yu, Wong, and Lok have formed
or are in the process of forming four additional Delaware companies --
Pottinger Inc., Tottingham Inc., Hempstead Inc. and Leicester Inc. -- with the
intent of them becoming additional Blank Check Companies. See ITEM 5D, "RECENT
TRANSACTIONS BY BLANK CHECK COMPANIES". Prior to initiating formation of these
companies, Messrs. Yu, Wong and Lok and the Company have not owned, together,
alone or with others any other Blank Check Companies in the United States.
5C. CURRENT BLANK CHECK COMPANIES
Messrs. Yu, Wong and Lok anticipate being involved with the four
additional companies listed in Item 5B above and additional Blank Check
Companies with common stock registered under the Securities Act or the Exchange
Act. At present, however, Messrs Yu, Wong and Lok have not registered any
additional Blank Check Companies.
5D. RECENT TRANSACTIONS BY BLANK CHECK COMPANIES
Although Messrs. Yu, Wong and Lok have formed or are in the process of
forming the four additional companies listed in Item 5B above with the intent
of such companies becoming additional Blank Check Companies, no Registration
Statements have been filed for these four companies. Thus, no recent
transactions by Blank Check Companies have transpired.
5E. CONFLICTS OF INTEREST
The Company's officers and directors expect to register other
companies of a similar nature and with a similar purpose as the Company.
Consequently, there are potential inherent conflicts of interest in acting as
an officer and director of the Company. Insofar as the officers and directors
are engaged in other business activities, the officers and directors anticipate
that they will devote only a minor amount of time to the Company's affairs.
A conflict may arise in the event that another Blank Check Company
with which the officers and directors are affiliated is registered and actively
seeks a Target Company. See ITEM 1D(7), "RISK FACTORS-OTHER BLANK CHECK
COMPANIES".
Mr. Yu expects to organize other companies of a similar nature and
with a similar purpose as the Company. As such, demands may be placed on the
time of Mr. Yu that will detract from the amount of time he is able to devote
to the Company. Mr. Yu
19
<PAGE> 22
intends to devote as much time to the activities of the Company as required.
However, should a conflict arise regarding the time demands of Mr. Yu, there is
no assurance that Mr. Yu would not attend to other matters prior to those of
the Company. Mr. Yu projects that initially up to ten hours per month of his
time may be spent locating a Target Company which amount of time would increase
when the analysis of, and negotiations and consummation with, a Target Company
are conducted.
Mr. Wong is a Director of Richard King & Company Limited and expects
to organize other companies of a similar nature and with a similar purpose as
the Company. As such, demands may be placed on the time of Mr. Wong which may
detract from the amount of time he is able to devote to the Company. Mr. Wong
intends to devote as much time to the activities of the Company as required.
However, should a conflict arise regarding the time demands of Mr. Wong, there
is no assurance that Mr. Wong would not attend to other matters prior to those
of the Company. Mr. Wong projects that initially up to ten hours per month of
his time may be spent locating a Target Company which amount of time would
increase when the analysis of, and negotiations and consummation with, a Target
Company are conducted.
Mr. Lok is the Managing Director of John Lok & Partners, Ltd. and The
Sun Company, Ltd., as well as serving as a Director to various Hong Kong
entities, and expects to organize other companies of a similar nature and with
a similar purpose as the Company. As such, demands may be placed on the time of
Mr. Lok that will detract from the amount of time he is able to devote to the
Company. Mr. Lok intends to devote as much time to the activities of the
Company as required. However, should a conflict arise regarding the time
demands of Mr. Lok, there is no assurance that Mr. Lok would not attend to
other matters prior to those of the Company. Mr. Lok projects that initially up
to ten hours per month of his time may be spent locating a Target Company which
amount of time would increase when the analysis of, and negotiations and
consummation with, a Target Company are conducted.
No other securities, or rights to securities, of the Company will be
issued to shareholders, officers, directors or promoters, or their affiliates
or associates, prior to the completion of a business combination. At the time
of a business combination, the officers and directors expect that some or all
of the shares of common stock owned by the shareholders and directors will be
purchased by the Target Company. The amount of common stock sold or continued
to be owned by the directors cannot be determined at this time.
20
<PAGE> 23
The Company may agree to pay finder's fees, as appropriate and
allowed, to unaffiliated persons who may bring a Target Company to the Company
where that reference results in a business combination. The amount of any
finder's fee will be subject to negotiation, and cannot be estimated at this
time. No finder's fee of any kind will be paid to the officers and directors or
promoters of the Company or to their associates or affiliates. No loans of any
type have, or will be, made to the officers, directors or promoters of the
Company or to any of their associates or affiliates.
The Company's officers and directors have not had any negotiations
with and there are no present arrangements or understandings with any
representatives of the owners of any business or company regarding the
possibility of a business combination with the Company.
The Company will not enter into a business combination, or acquire any
assets of any kind for its securities, in which the officers or directors of
the Company have any interest, direct or indirect.
The Company's directors have adopted a resolution involving possible
conflicts of interest, including prohibiting any of the following transactions
involving the officers, directors, promoters, shareholders or their affiliates:
(i) Any lending by the Company to such persons;
(ii) The issuance of any additional securities to such persons
prior to a business combination;
(iii) The entering into any business combination or acquisition of
assets in which such persons have any interest, direct or
indirect; or
(iv) The payment of any finder's fees to such persons.
Any changes in these provisions require the approval of the Board of
Directors. The officers, directors and current shareholders do not intend to
propose any such action and do not anticipate that any such action will occur.
5F. INVESTMENT COMPANY ACT OF 1940
See ITEM 1D (11), "RISK FACTORS--REGULATION UNDER THE INVESTMENT
COMPANY ACT". Any violation of the Investment Company Act would subject the
Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's officers and directors do not receive any compensation
for services rendered to the Company, have not received such compensation in
the past, and are not accruing any compensation pursuant to any agreement with
the Company.
21
<PAGE> 24
The officers and directors of the Company will not receive any
finder's fee, either directly or indirectly, as a result of their efforts to
implement the Company's business plan outlined herein. However, the officers
and directors of the Company anticipate receiving benefits as beneficial
shareholders of the Company. See ITEM 4, "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS," and ITEM 7, "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS".
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for the
benefit of its directors, officers or other employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company has issued a total of 6,000,000 shares of common stock to
the following persons for a total of $600 in cash:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Name Relationship to Issuer Number of Total Shares Consideration
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
King Kwok Yu Director, President, 2,000,000 $200
Treasurer, Secretary, and
Controller
- ----------------------------------------------------------------------------------------------------
Richard Che Keung Wong Director and Vice-Chairman 2,000,000 $200
- ----------------------------------------------------------------------------------------------------
Hardy Kung Chin Lok Director and Chairman of the 2,000,000 $200
Board
- ----------------------------------------------------------------------------------------------------
</TABLE>
ITEM 8. DESCRIPTION OF SECURITIES.
8A. GENERAL
The authorized capital stock of the Company consists of 120,000,000
shares of common stock, par value $0.0001 per share, and 20,000,000 shares of
preferred stock, par value $0.0001 per share. To date, no preferred stock has
been issued by the Company. The following statements relating to the capital
stock are summaries and do not purport to be complete. Reference is made to the
more detailed provisions of, and such statements are qualified in their
entirety by reference to, the Certificate of Incorporation and the By-laws,
copies of which are filed as exhibits to this Registration Statement.
22
<PAGE> 25
8B. COMMON STOCK
Holders of shares of common stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of common
stock do not have cumulative voting rights. Holders of common stock are
entitled to share ratably in dividends, if any, as may be declared from time to
time by the Board of Directors in its discretion from funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, the holders of common stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. All of the outstanding
shares of common stock are fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the
Company's common stock. There are no conversion or redemption rights or sinking
fund provisions with respect to the common stock.
8C. PREFERRED STOCK
The Company's Certificate of Incorporation authorizes the issuance of
20,000,000 shares of preferred stock, $0.0001 par value per share, of which no
shares have been issued. The Board of Directors is authorized to provide for
the issuance of shares of preferred stock in series and, by filing a
certificate pursuant to the applicable law of Delaware, to establish from time
to time the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof without any further
vote or action by the shareholders. Any shares of preferred stock so issued
would have priority over the common stock with respect to dividend or
liquidation rights. Any future issuance of preferred stock may have the effect
of delaying, deferring or preventing a change in control of the Company without
further action by the shareholders and may adversely affect the voting and
other rights of the holders of common stock. At present, the Company has no
plans to issue any preferred stock nor adopt any series, preferences or other
classification of preferred stock. The Company has also adopted a resolution
stating that it will not seek to issue any or authorize any additional
preferred stock, except in connection with or following completion of a
business combination with a Target Company resulting in the Company no longer
being classified as a Blank Check Company.
The issuance of shares of preferred stock, or the issuance of rights
to purchase such shares, could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of preferred stock might
impede a business combination by including class voting rights that would
enable the holder to block such a transaction, or facilitate a business
combination by including voting rights that would provide a required percentage
23
<PAGE> 26
vote of the stockholders. In addition, under certain circumstances, the
issuance of preferred stock could adversely affect the voting power of the
holders of the common stock. Although the Board of Directors is required to
make any determination to issue such stock based on its judgment as to the best
interests of the stockholders of the Company, the Board of Directors could act
in a manner that would discourage an acquisition attempt or other transaction
that potentially some, or a majority, of the stockholders might believe to be
in their best interests or in which stockholders might receive a premium for
their stock over the then market price of such stock. The Board of Directors
does not at present intend to seek stockholder approval prior to any issuance
of currently authorized stock, unless otherwise required by law or stock
exchange rules. The Company has no present plans to issue any preferred stock.
8D. DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and
earnings, if any, and capital requirements and financial conditions. The
payment of dividends, if any, will be within the discretion of the Company's
Board of Directors. The Company presently intends to retain all earnings, if
any, for use in its business operations and accordingly, the Board of Directors
does not anticipate declaring any dividends prior to a business combination.
24
<PAGE> 27
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER STOCKHOLDER MATTERS.
1A. MARKET PRICE.
There is no trading market for the Company's common stock at present
and there has been no trading market to date. There is no assurance that a
trading market will ever develop or, if such a market does develop, that it
will continue.
The Commission has adopted Rule 15g-9 which establishes the definition
of a Penny Stock. For any transaction involving a Penny Stock, unless exempt,
the rules require that: (i) a broker or dealer approve a person's account for
transactions in Penny Stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the Penny Stock to be purchased. In order to approve a person's
account for transactions in Penny Stocks, the broker or dealer must: (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in Penny Stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in Penny Stocks. The broker or dealer must also deliver, prior to
any transaction in a Penny Stock, a disclosure schedule prepared by the
Commission relating to the Penny Stock market, which, in highlight form: (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) states that the broker or dealer received a signed,
written agreement from the investor prior to the transaction. Disclosure also
has to be made about the risks of investing in Penny Stocks in both public
offerings and in secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in Penny Stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the Penny Stock held in the account and
information on the limited market in Penny Stocks.
If, after a merger or acquisition or other business combination, the
Company does not meet the qualifications for listing on the Nasdaq SmallCap
Market, the Company's securities may be traded in the over-the-counter ("OTC")
market. The OTC market differs from national and regional stock exchanges in
that it: (i) is not sited in a single location but operates through
communication of bids, offers and confirmations between broker-dealers; and
(ii) securities admitted to quotation are offered by
25
<PAGE> 28
one or more broker-dealers rather than the "specialist" common to stock
exchanges. The Company may apply for listing on the NASD OTC Bulletin Board or
may offer its securities in what are commonly referred to as the "pink sheets"
of the National Quotation Bureau, Inc. To qualify for listing on the NASD OTC
Bulletin Board, an equity security must have one registered broker-dealer,
known as the market maker, willing to list bid or sale quotations and to
sponsor the company for listing on the Bulletin Board.
If the Company is unable initially to satisfy the requirements for
quotation on the Nasdaq SmallCap Market or becomes unable to satisfy the
requirements for continued quotation thereon, and trading, if any, is conducted
in the OTC market, a shareholder may find it more difficult to dispose of, or
to obtain accurate quotations as to the market value of, the Company's
securities.
1B. HOLDERS.
There are three holders of the Company's common stock. On April 20,
1999, the Company issued 6,000,000 of its Common Shares to these shareholders
for cash at $0.0001 per share for a total price of $600. The issued and
outstanding shares of the Company's common stock were issued in accordance with
the exemptions from registration afforded by Sections 3(b) and 4(2) of the
Securities Act of 1933 and Rules 506 and 701 promulgated thereunder. See PART
1, ITEM 4, "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS".
1C. DIVIDENDS.
The Company has not paid any dividends to date, and has no plans to do
so in the immediate future. See PART 1, ITEM 8D, "DESCRIPTION OF
SECURITIES--DIVIDENDS".
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or, to the Company's knowledge,
threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
The Company has not changed accountants since its formation and there
are no disagreements with the findings of its accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company has sold securities that were
not registered as follows:
26
<PAGE> 29
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Date Name Number of Shares Consideration
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
April 20, 1999 King Kwok Yu 2,000,000 $200
- ------------------------------------------------------------------------------------
April 20, 1999 Richard C. K. Wong 2,000,000 $200
- ------------------------------------------------------------------------------------
April 20, 1999 Hardy K. C. Lok 2,000,000 $200
- ------------------------------------------------------------------------------------
</TABLE>
The shareholders of the Company have executed and delivered a
"lock-up" letter agreement which provides that such shareholders shall not sell
the securities except in connection with or following the consummation of a
merger or acquisition. Further, each shareholder has placed its stock
certificates with the Company until such time. Any liquidation by the current
shareholders after the release from the "lock-up" selling limitation period may
have a depressive effect upon the trading price of the Company's securities in
any future market which may develop.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides that a Delaware corporation has the power, under specified
circumstances, to indemnify its directors, officers, employees and agents,
against expenses incurred in any action, suit or proceeding. The Certificate of
Incorporation and the By-laws of the Company provide for indemnification of
directors and officers to the fullest extent permitted by the General
Corporation Law of the State of Delaware.
The General Corporation Law of the State of Delaware provides that a
certificate of incorporation may contain a provision eliminating the personal
liability of a director to the corporation or its stockholders for monetary
damages in connection with a breach of fiduciary duty by such director,
provided that such provision shall not eliminate or limit the liability of a
director: (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders; (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; (iii)
under Section 174 of the General Corporation Law of the State of Delaware
(relating to liability for unauthorized acquisitions or redemptions of, or
dividends on, capital stock); or (iv) for any transaction from which the
director derived an improper personal benefit. The Company's Certificate of
Incorporation contains such a provision.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT MAY
BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT
TO THE FOREGOING PROVISIONS, IT IS THE OPINION OF THE COMMISSION THAT SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT AND
IS THEREFORE UNENFORCEABLE.
27
<PAGE> 30
ITEM 6. GLOSSARY
Blank Check Company
As defined in Section 7(b)(3) of the Securities Act, a "blank check"
company is a development stage company that has no specific business plan or
purpose or has indicated that its business plan is to engage in a merger or
acquisition with an unidentified company or companies and is issuing "penny
stock" securities as defined in Rule 3a51-1 of the Exchange Act.
Company
Paddington Inc., the company whose common stock is the subject of this
Registration Statement.
Nasdaq SmallCap Market
A group of separately listed companies that have smaller
capitalizations and are less actively traded than other Nasdaq stocks, but that
meet the following qualifications: at least (i) net tangible assets of
$4,000,000 or market capitalization of $50,000,000 or net income for two of the
last three years of $750,000; (ii) public float of 1,000,000 shares with a
market value of $5,000,000; (iii) a bid price of $4.00; (iv) three market
makers; (v) 300 shareholders and (vi) an operating history of one year or, if
less than one year, $50,000,000 in market capitalization. For continued listing
on the Nasdaq SmallCap Market, a company must have at least (i) net tangible
assets of $2,000,000 or market capitalization of $35,000,000 or net income for
two of the last three years of $500,000; (ii) a public float of 500,000 shares
with a market value of $1,000,000; (iii) a bid price of $1.00; (iv) two market
makers; and (v) 300 shareholders.
Penny Stock
As defined in Rule 3a51-1 of the Exchange Act, a "penny stock"
security is any equity security other than a security that: (i) is a reported
security; (ii) is issued by an investment company; (iii) is a put or call
issued by the Option Clearing Corporation; (iv) has a price of $5.00 or more
(except for purposes of Rule 419 of the Securities Act); (v) is registered on a
national securities exchange; (vi) is authorized for quotation on the Nasdaq
Stock Market, unless other provisions of Rule 3a51-1 are not satisfied; or
(vii) is issued by an issuer with (a) net tangible assets in excess of
$2,000,000, if in continuous operation for more than three years or $5,000,000
if in operation for less than three years or (b) average revenue of at least
$6,000,000 for the last three years.
28
<PAGE> 31
Small Business Issuer
As defined in Rule 12b-2 of the Exchange Act, a "Small Business Issuer" is an
entity (i) which has revenues of less than $25,000,000; (ii) whose public float
(the outstanding securities not held by affiliates) has a value of less than
$25,000,000; (iii) which is a United States or Canadian issuer; (iv) which is
not an Investment Company; and (v) if a majority-owned subsidiary, whose parent
corporation is also a small business issuer.
29
<PAGE> 32
PART F/S
BALANCE SHEETS
Attached are audited balance sheets for the Company for the period
ended April 30, 1999. The following balance sheets are attached to this report
and filed as a part thereof.
1) Table of Contents - Balance Sheets
2) Report of Independent Public Accountants, dated May 5, 1999
3) Balance Sheet as of April 30, 1999
4) Notes to the Balance Sheet
BALANCE SHEETS OF PADDINGTON INC.: INDEX
F-1 Report of Independent Public Accountants
F-2 Balance Sheet as of April 30, 1999
F-3, F-4 Notes to the Balance Sheet
30
<PAGE> 33
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Paddington Inc.
We have audited the accompanying balance sheet of Paddington Inc. as of April
30, 1999. This balance sheet is the responsibility of the Company's management.
Our responsibility is to express an opinion on this balance sheet 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 the audit to obtain reasonable assurance about whether the balance
sheet is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the balance sheet. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall balance sheet
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Paddington Inc. as of April 30,
1999, in conformity with generally accepted accounting principles in the United
States of America.
ARTHUR ANDERSEN & CO.
Certified Public Accountants
Hong Kong
Hong Kong
May 5, 1999.
F-1
<PAGE> 34
PADDINGTON INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET AS OF APRIL 30, 1999
(Amounts expressed in United States dollars)
<TABLE>
<CAPTION>
ASSET
-----
<S> <C>
Cash $ 600
------------
Total asset $ 600
------------
STOCKHOLDERS' EQUITY
--------------------
Preferred Stock, $.0001 par value;
20,000,000 shares authorized;
nil issued and outstanding
Common Stock, $.0001 par value;
120,000,000 shares authorized;
6,000,000 issued and outstanding $ 600
------------
Total Stockholders' Equity $ 600
------------
</TABLE>
The accompanying notes are an integral part of this balance sheet.
F-2
<PAGE> 35
PADDINGTON INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE BALANCE SHEET
(Amounts expressed in United States dollars)
1. Organization and Business Operations
Paddington Inc. (a development stage company)(the "Company") was incorporated
in the state of Delaware, United States of America on March 29, 1999 to serve
as a vehicle to effect a merger, exchange of capital stock, asset acquisition,
or other business combination with a domestic or foreign private business. At
April 30, 1999 the Company had not yet commenced any formal business
operations, and all activity to date relates to the Company's formation and
proposed fund raising. Accordingly, no statement of operations and statement of
cash flows are presented for the period from March 29, 1999 (date of
incorporation) to April 30, 1999. The Company's fiscal year end is December 31.
The Company's ability to commence operations is contingent upon its ability to
identify a prospective target business and raise the capital it will require
through the issuance of equity securities, debt securities, bank borrowings, or
a combination thereof.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Use of estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Accordingly, actual results could differ from
those estimates.
b. Fair value of financial instruments
All financial instruments of the Company are carried at cost, which
approximate their fair values.
F-3
<PAGE> 36
3. STOCKHOLDERS' EQUITY
a. Preferred Stock
The Company is authorized to issue 20,000,000 shares of preferred
stock with a par value of $0.000l each, with such designations, voting
and other rights and preferences as may be determined from time to
time by the Board of Directors.
b. Common Stock
The Company is authorized to issue 120,000,000 shares of common stock
with a par value of $0.000l each. The Company issued 2,000,000 shares
to each of Messrs. Hardy Kung Chin Lok, Richard Che Keung Wong and
King Kwok Yu.
F-4
<PAGE> 37
PART III
ITEM 1. INDEX TO EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
<S> <C>
(2) Articles of Incorporation and By-laws:
2.1** Certificate of Incorporation
2.2** By-Laws
(3) Instruments Defining the
Rights of Holders
3.1** Lock-Up Agreements with
Messrs. Yu, Wong and Lok
3.2** Relevant Board Resolutions
3.3** Office Use Letter and Consent
10.1** Consent of Accountants
</TABLE>
------------
** CE (Confirming Electronic) and Filed herewith
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Company caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
PADDINGTON INC.
By: /s/ King Kwok Yu
--------------------------
King Kwok Yu
Director, President, Treasurer, Secretary and Controller
By: /s/ Richard Che Keung Wong
--------------------------
Richard Che Keung Wong
Director and Vice Chairman
By: /s/ Hardy Kung Chin Lok
--------------------------
Hardy Kung Chin Lok
Director and Chairman of the Board
Date: May 12, 1999
<PAGE> 1
EXHIBIT 2.1
CERTIFICATE OF INCORPORATION
OF
PADDINGTON INC.
ARTICLE ONE
Name
The name of the Corporation is Paddington Inc.
ARTICLE TWO
Duration
The Corporation shall have perpetual existence.
ARTICLE THREE
Purpose
The purpose for which this Corporation is organized is to engage in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware.
ARTICLE FOUR
Shares
The total number of shares of stock which the Corporation shall have
authority to issue is 120,000,000 shares, consisting of 100,000,000 shares of
Common Stock having a par value of $.0001 per share and 20,000,000 shares of
Preferred Stock having a par value of $.0001 per share.
The Board of Directors is authorized to provide for the issuance of
the shares of Preferred Stock in series and, by filing a certificate pursuant
to the applicable law of the State of Delaware, to establish from time to time
the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series of
Preferred Stock shall include, but not be limited to, determination of the
following:
A. The number of shares constituting that series and the distinctive
designation of that series;
<PAGE> 2
B. The dividend rate on the shares of that series, whether dividends
shall be cumulative, and, if so, from which date or dates, and the relative
rights of priority, if any, of payment of dividends on share of that series;
C. Whether that series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting rights;
D. Whether that series shall have conversion privileges, and, if so,
the terms and conditions of such conversion, including provision for adjustment
of the conversion rate in such events as the Board of Directors shall
determine;
E. Whether or not the shares of that series shall be redeemable, and,
if so, the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable, and the amount per share payable
in case of redemption, which amount may vary under different conditions and at
different redemption dates;
F. Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount of such
sinking fund;
G. The rights of the shares of that series in the event of voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, and
the relative rights of priority, if any, of payment of shares of that series;
and
H. Any other relative rights, preferences and limitations of that
series.
ARTICLE FIVE
Commencement of Business
The Corporation is authorized to commence business as soon as its
certificate of incorporation has been filed.
ARTICLE SIX
Principal Office and Registered Agent
The post office address of the initial registered office of the
Corporation and the name of its initial registered agent and its business
address is
Registered Agents, Ltd.
1220 North Market Street, Suite 606
Wilmington, Delaware 19801 (County of New Castle)
<PAGE> 3
The initial registered agent is a resident of the State of Delaware.
ARTICLE SEVEN
Incorporator
King Kwok Yu, Suite E, 15/F, Ho Lee Commercial Building, 40 D'Aguilar
Street, Central, Hong Kong. The powers of the incorporator shall terminate
immediately upon the filing of this Certificate of Incorporation.
ARTICLE EIGHT
Directors
Immediately upon the filing of this Certificate of Incorporation and
until the first annual meeting of the stockholders or until successor Directors
are elected and qualify, the initial Directors shall be
King Kwok Yu, Suite E, 15/F, Ho Lee Commercial Building, 40 D'Aguilar Street,
Central, Hong Kong;
Richard Che Keung Wong, Suite E, 15/F, Ho Lee Commercial Building, 40 D'Aguilar
Street, Central, Hong Kong; and
Hardy Kung Chin Lok, Suite E, 15/F, Ho Lee Commercial Building, 40 D'Aguilar
Street, Central, Hong Kong.
ARTICLE NINE
Pre-Emptive Rights
No Shareholder or other person shall have any pre-emptive rights
whatsoever.
ARTICLE TEN
By-Laws
The initial by-laws shall be adopted by the Shareholders or the Board
of Directors. The power to alter, amend, or repeal the by-laws or adopt new
by-laws is vested in the Board of Directors, subject to repeal or change by
action of the Shareholders.
ARTICLE ELEVEN
Number of Votes
<PAGE> 4
Each share of Common Stock has one vote on each matter on which the
share is entitled to vote.
ARTICLE TWELVE
Majority Votes
A majority vote of a quorum of Shareholders (consisting of the holders of
a majority of the shares entitled to vote, represented in person or by proxy)
is sufficient for any action which requires the vote or concurrence of
Shareholders, unless otherwise required or permitted by law or the by-laws of
the Corporation.
ARTICLE THIRTEEN
Non-Cumulative Voting
Directors shall be elected by majority vote. Cumulative voting shall not
be permitted.
ARTICLE FOURTEEN
Interested Directors, Officers and Securityholders
A. Validity. If Paragraph (B) is satisfied, no contract or other
transaction between the Corporation and any of its directors, officers or
securityholders, or any corporation or firm in which any of them are directly
or indirectly interested, shall be invalid solely because of this relationship
or because of the presence of the director, officer or securityholder at the
meeting of the Board of Directors or committee authorizing the contract or
transaction, or his participation or vote in the meeting or authorization.
B. Disclosure, Approval, Fairness. Paragraph (A) shall apply
only if:
(1) The material facts of the relationship or interest of each
such director, officer or securityholder are known or disclosed:
(a) to the Board of Directors or the committee and it
nevertheless authorizes or ratifies the contract or transaction by a majority
of the directors present, each such interested director to be counted in
determining whether a quorum is present but not in calculating the majority
necessary to carry the vote; or
<PAGE> 5
(b) to the Shareholders and they nevertheless authorize or ratify
the contract or transaction by a majority of the shares present, each such
interested person to be counted for quorum and voting purposes; or
(2) the contract or transaction is fair to the Corporation as of
the time it is authorized or ratified by the Board of Directors, the committee
or the Shareholders.
ARTICLE FIFTEEN
Indemnification and Insurance
A. Persons. The Corporation shall indemnify, to the extent
provided in Paragraphs (B), (D) or (F) and to the extent permitted from time to
time by law:
(1) any person who is or was director, officer, agent or employee
of the Corporation, and
(2) any person who serves or served at the Corporation's request
as a director, officer, agent, employee, partner or trustee of another
corporation or of a partnership, joint venture, trust or other enterprise.
B. Extent--Derivative Suits. In case of a suit by or in the
right of the Corporation against a person named in Paragraph (A) by reason of
his holding a position named in Paragraph (A), the Corporation shall indemnify
him, if he satisfies the standard in Paragraph (C), for expenses (including
attorney's fees but excluding amounts paid in settlement) actually and
reasonably incurred by him in connection with the defense or settlement of the
suit.
C. Standard--Derivative Suits. In case of a suit by or in the
right of the Corporation, a person named in Paragraph (A) shall be indemnified
only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the
subject of the suit, and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the
Corporation. However, he shall not be indemnified in respect
of any claim, issue or matter as to which he has been
adjudged liable for negligence or misconduct in the
performance of his duty to the Corporation unless (and only
to the extent that) the court in which the suit was brought
shall determine, upon application, that despite the
adjudication but in view of all the circumstances, he is
fairly and reasonably entitled to indemnity for such expenses
as the court shall deem proper.
<PAGE> 6
D. Extent--Nonderivative Suits. In case of a suit, action or
proceeding (whether civil, criminal, administrative or investigative), other
than a suit by or in the right of the Corporation against a person named in
Paragraph (A) by reason of his holding a position named in Paragraph (A), the
Corporation shall indemnify him, if he satisfies the standard in Paragraph (E),
for amounts actually and reasonably incurred by him in connection with the
defense or settlement of the suit as
(1) expenses (including attorneys' fees),
(2) amounts paid in settlement
(3) judgments, and
(4) fines.
E. Standard--Nonderivative Suits. In case of a nonderivative
suit, a person named in Paragraph (A) shall be indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the
subject of the nonderivative suit, and in a manner he
reasonably believed to be in, or not opposed to, the best
interests of the Corporation and, with respect to any
criminal action or proceeding, he had no reason to believe
his conduct was unlawful. The termination of a nonderivative
suit by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person failed to
satisfy this Paragraph (E)(2).
F. Determination That Standard Has Been Met. A determination
that the standard of Paragraph (C) or (E) has been satisfied may be made by a
court of law or equity or the determination may be made by:
(1) a majority of the directors of the Corporation (whether or
not a quorum) who were not parties to the action, suit or proceeding, or
(2) independent legal counsel (appointed by a majority of the
directors of the Corporation, whether or not a quorum, or elected by the
Shareholders of the Corporation) in a written opinion, or
(3) the Shareholders of the Corporation.
G. Proration. Anyone making a determination under Paragraph (F)
may determine that a person has met the standard as to some matters but not as
to others, and may reasonably prorate amounts to be indemnified.
<PAGE> 7
H. Advance Payment. The Corporation may pay in advance any
expenses (including attorney's fees) which may become subject to
indemnification under paragraphs (A) - (G) if:
(1) the Board of Directors authorizes the specific payment and
(2) the person receiving the payment undertakes in writing to
repay unless it is ultimately determined that he is entitled
to indemnification by the Corporation under Paragraphs (A) -
(G).
I. Nonexclusive. The indemnification provided by Paragraphs (A)
- - (G) shall not be exclusive of any other rights to which a person may be
entitled by law or by by-law, agreement, vote of Shareholders or disinterested
directors, or otherwise.
J. Continuation. The indemnification and advance payment
provided by Paragraphs (A) - (H) shall continue as to a person who has ceased
to hold a position named in paragraph (A) and shall inure to his heirs,
executors and administrators.
K. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who holds or who has held any position named
in Paragraph (A) against any liability incurred by him in any such positions or
arising out of this status as such, whether or not the Corporation would have
power to indemnify him against such liability under Paragraphs (A) - (H).
L. Reports. Indemnification payments, advance payments, and
insurance purchases and payments made under Paragraphs (A) - (K) shall be
reported in writing to the Shareholders of the Corporation with the next notice
of annual meeting, or within six months, whichever is sooner.
M. Amendment of Article. Any changes in the General Corporation
Law of Delaware increasing, decreasing, amending, changing or otherwise
effecting the indemnification of directors, officers, agents, or employees of
the Corporation shall be incorporated by reference in this Article as of the
date of such changes without further action by the Corporation, its Board of
Directors, of Shareholders, it being the intention of this Article that
directors, officers, agents and employees of the Corporation shall be
indemnified to the maximum degree allowed by the General Corporation Law of the
State of Delaware at all times.
ARTICLE SIXTEEN
Limitation On Director Liability
A. Scope of Limitation. No person, by virtue of being or having
been a director of the Corporation, shall have any personal
<PAGE> 8
liability for monetary damages to the Corporation or any of its Shareholders
for any breach of fiduciary duty except as to the extent provided in Paragraph
(B).
B. Extent of Limitation. The limitation provided for in this
Article shall not eliminate or limit the liability of a director to the
Corporation or its Shareholders (i) for any breach of the director's duty of
loyalty to the Corporation or its Shareholders (ii) for any acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law (iii) for any unlawful payment of dividends or unlawful stock
purchases or redemptions in violation of Section 174 of the General Corporation
Law of Delaware or (iv) for any transaction for which the director derived an
improper personal benefit.
IN WITNESS WHEREOF, the incorporator hereunto has executed this
certificate of incorporation on this 29th day of March, 1999.
/s/ King K. Yu
-----------------------------
King K. Yu, Incorporator
<PAGE> 1
EXHIBIT 2.2
PADDINGTON INC.
BY-LAWS
ARTICLE I
The Stockholders
SECTION 1.1. ANNUAL MEETING. The annual meeting of the stockholders of
Paddington Inc. (the "Corporation") shall be held on the third Thursday in May
of each year at 10:30 a.m. local time, or at such other date or time as shall
be designated from time to time by the Board of Directors and stated in the
notice of the meeting, for the election of directors and for the transaction of
such other business as may come before the meeting.
SECTION 1.2. SPECIAL MEETINGS. A special meeting of the stockholders
may be called at any time by the written resolution or request of two-thirds or
more of the members of the Board of Directors, the president, or any executive
vice president and shall be called upon the written request of the holders of
two-thirds or more in amount, of each class or series of the capital stock of
the Corporation entitled to vote at such meeting on the matters(s) that are the
subject of the proposed meeting, such written request in each case to specify
the purpose or purposes for which such meeting shall be called, and with
respect to stockholder proposals, shall further comply with the requirements of
this Article.
SECTION 1.3. NOTICE OF MEETINGS. Written notice of each meeting of
stockholders, whether annual or special, stating the date, hour and place where
it is to be held, shall be served either personally or by mail, not less than
fifteen nor more than sixty days before the meeting, upon each stockholder of
record entitled to vote at such meeting, and to any other stockholder to whom
the giving of notice may be required by law. Notice of a special meeting shall
also state the purpose or purposes for which the meeting is called and shall
indicate that it is being issued by, or at the direction of, the person or
persons calling the meeting. If, at any meeting, action is proposed to be taken
that would, if taken, entitle stockholders to receive payment for their stock,
the notice of such meeting shall include a statement of that purpose and to
that effect. If mailed, notice shall be deemed to be delivered when deposited
in the United States mail or with any private express mail service, postage or
delivery fee prepaid, and shall be directed to each such stockholder at his
address, as it appears on the records of the stockholders of the Corporation,
unless he shall have previously filed with the secretary of the Corporation a
written request that notices intended for him be mailed to some other address,
in which case, it shall be mailed to the address designated in such request.
<PAGE> 2
SECTION 1.4. FIXING DATE OF RECORD. (a) In order that the Corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders, or any adjournment thereof, the Board of Directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than sixty nor less than ten days before
the date of such meeting. If no record date is fixed by the Board of Directors,
the record date for determining stockholders entitled to notice of, or to vote
at, a meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of, or to
vote at, a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting (to the
extent that such action by written consent is permitted by law, the Certificate
of Incorporation or these By-Laws), the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which date
shall not be more than ten days after the date upon which the resolution fixing
the record date is adopted by the Board of Directors. If no record date has
been fixed by the Board of Directors, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by law,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation by
delivery to its registered office in its state of incorporation, its principal
place of business, or an officer or agent of the Corporation having custody of
the book in which proceedings of meetings of stockholders are recorded.
Delivery made to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested. If no record date has
been fixed by the Board of Directors and prior action by the Board of Directors
is required by law, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting shall be at the close
of business on the day on which the Board of Directors adopts the resolution
taking such prior action.
(c) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty days prior to such
action. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
SECTION 1.5. INSPECTORS. At each meeting of the stockholders, the
polls shall be opened and closed and the proxies and ballots shall be received
and be taken in charge. All questions touching on the qualification of voters
and the validity of proxies and the acceptance or rejection of votes, shall be
decided by one or more inspectors. Such inspectors shall be appointed by the
Board of Directors before or at the meeting, or, if no such appointment shall
have been made, then by the presiding officer at the meeting. If for any reason
any of the inspectors previously appointed shall fail to attend or refuse or be
unable to serve, inspectors in place of any so failing to attend or refusing or
unable to serve shall be appointed in like manner.
SECTION 1.6. QUORUM. At any meeting of the stockholders, the holders of
a majority of the shares entitled to vote, represented in person or by proxy,
shall constitute a quorum of the stockholders for all purposes, unless the
representation of a larger number shall be required by law, and, in that case,
the representation of the number so required shall constitute a quorum.
If the holders of the amount of stock necessary to constitute a quorum
shall fail to attend in person or by proxy at the time and place fixed in
accordance with these By-Laws for an annual or special meeting, a majority in
interest of the stockholders present in person or by proxy may adjourn, from
time to time, without notice other than by announcement at the meeting, until
holders of the amount of stock requisite to constitute a quorum shall attend.
At any such adjourned meeting at which a quorum shall be present, any business
may be transacted which might have been transacted at the meeting as originally
notified.
SECTION 1.7. BUSINESS. The chairman of the Board, if any, the president,
or in his absence the vice-chairman, if any, or an executive vice president, in
the order named, shall call meetings of the stockholders to order, and shall
act as chairman of such meeting; provided, however, that the Board of Directors
or executive committee may appoint any stockholder to act as chairman of any
meeting in the absence of the chairman of the Board. The secretary of the
Corporation shall act as secretary at all
<PAGE> 3
meetings of the stockholders, but in the absence of the secretary at any
meeting of the stockholders, the presiding officer may appoint any person to
act as secretary of the meeting.
SECTION 1.8. STOCKHOLDER PROPOSALS. No proposal by a stockholder shall
be presented for vote at a special or annual meeting of stockholders unless
such stockholder shall, not later than the close of business on the fifth day
following the date on which notice of the meeting is first given to
stockholders, provide the Board of Directors or the secretary of the
Corporation with written notice of intention to present a proposal for action
at the forthcoming meeting of stockholders, which notice shall include the name
and address of such stockholder, the number of voting securities that he holds
of record and that he holds beneficially, the text of the proposal to be
presented to the meeting and a statement in support of the proposal.
Any stockholder who was a stockholder of record on the applicable
record date may make any other proposal at an annual meeting or special meeting
of stockholders and the same may be discussed and considered, but unless stated
in writing and filed with the Board of Directors or the secretary prior to the
date set forth herein above, such proposal shall be laid over for action at an
adjourned, special, or annual meeting of the stockholders taking place sixty
days or more thereafter. This provision shall not prevent the consideration and
approval or disapproval at the annual meeting of reports of officers,
directors, and committees, but in connection with such reports, no new business
proposed by a stockholder, qua stockholder, shall be acted upon at such annual
meeting unless stated and filed as herein provided.
Notwithstanding any other provision of these By-Laws, the Corporation
shall be under no obligation to include any stockholder proposal in its proxy
statement materials or otherwise present any such proposal to stockholders at a
special or annual meeting of stockholders if the Board of Directors reasonably
believes the proponents thereof have not complied with Sections 13 or 14 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder; nor shall the Corporation be required to include any stockholder
proposal not required to be included in its proxy materials to stockholders in
accordance with any such section, rule or regulation.
SECTION 1.9. PROXIES. At all meetings of stockholders, a stockholder
entitled to vote may vote either in person or by proxy executed in writing by
the stockholder or by his duly authorized attorney-in-fact. Such proxy shall be
filed with the secretary before or at the time of the meeting. No proxy shall
be valid after eleven months from the date of its execution, unless otherwise
provided in the proxy.
<PAGE> 4
SECTION 1.10. VOTING BY BALLOT. The votes for directors, and upon the
demand of any stockholder or when required by law, the votes upon any question
before the meeting, shall be by ballot.
SECTION 1.11. VOTING LISTS. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares of stock registered in the name of
each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof and may be inspected by any
stockholder who is present.
SECTION 1.12. PLACE OF MEETING. The Board of Directors may designate
any place, either within or without the state of incorporation, as the place of
meeting for any annual meeting or any special meeting called by the Board of
Directors. If no designation is made or if a special meeting is otherwise
called, the place of meeting shall be the principal office of the Corporation.
SECTION 1.13. VOTING OF STOCK OF CERTAIN HOLDERS. Shares of capital
stock of the Corporation standing in the name of another corporation, domestic
or foreign, may be voted by such officer, agent, or proxy as the by-laws of
such corporation may prescribe, or in the absence of such provision, as the
board of directors of such corporation may determine.
Shares of capital stock of the Corporation standing in the name of a
deceased person, a minor ward or an incompetent person may be voted by his
administrator, executor, court-appointed guardian or conservator, either in
person or by proxy, without a transfer of such stock into the name of such
administrator, executor, court-appointed guardian or conservator. Shares of
capital stock of the Corporation standing in the name of a trustee may be voted
by him, either in person or by proxy.
Shares of capital stock of the Corporation standing in the name of a
receiver may be voted, either in person or by proxy, by such receiver, and
stock held by or under the control of a receiver may be voted by such receiver
without the transfer thereof into his name if authority to do so is contained
in any appropriate order of the court by which such receiver was appointed.
A stockholder whose stock is pledged shall be entitled to vote such
stock, either in person or by proxy, until the stock has been transferred into
the name of the pledgee, and thereafter the pledgee shall be entitled to vote,
either in person or by proxy, the stock so transferred.
Shares of its own capital stock belonging to this Corporation shall
not be voted, directly or indirectly, at any meeting and shall not be counted
in determining the total number of outstanding stock at any given time, but
shares of its own stock held by it in a fiduciary capacity may be voted and
shall be counted in determining the total number of outstanding stock at any
given time.
ARTICLE II
Board of Directors
SECTION 2.1. GENERAL POWERS. The business, affairs, and the property
of the Corporation shall be managed and controlled by the Board of Directors
(the "Board"), and, except as otherwise expressly provided by law, the
Certificate of Incorporation or these By-Laws, all of the powers of the
Corporation shall be vested in the Board.
SECTION 2.2. NUMBER OF DIRECTORS. The number of directors which shall
constitute the whole Board shall be not fewer than one nor more than five.
Within the limits above specified, the number of directors shall be determined
by the Board of Directors pursuant to a resolution adopted by a majority of the
directors then in office.
SECTION 2.3. ELECTION, TERM AND REMOVAL. Directors shall be elected at
the annual meeting of stockholders to succeed those directors whose terms have
expired. Each director shall hold office for the term for which elected and
until his or her successor shall be elected and qualified. Directors need not
be stockholders. A director may be removed from office at a meeting expressly
called for that purpose by the vote of not less than a majority of the
outstanding capital stock entitled to vote at an election of directors.
SECTION 2.4. VACANCIES. Vacancies in the Board of Directors, including
vacancies resulting from an increase in the number of directors, may be filled
by the affirmative vote of a majority of the remaining directors then in
office, though less than a quorum; except that vacancies resulting from removal
from office by a vote of the stockholders may be filled by the stockholders at
the same meeting at which such removal occurs
<PAGE> 5
provided that the holders of not less than a majority of the outstanding
capital stock of the Corporation (assessed upon the basis of votes and not on
the basis of number of shares) entitled to vote for the election of directors,
voting together as a single class, shall vote for each replacement director.
All directors elected to fill vacancies shall hold office for a term expiring
at the time of the next annual meeting of stockholders and upon election and
qualification of his successor. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of an incumbent
director.
SECTION 2.5. RESIGNATIONS. Any director of the Corporation may resign
at any time by giving written notice to the president or to the secretary of
the Corporation. The resignation of any director shall take effect at the time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
SECTION 2.6. PLACE OF MEETINGS, ETC. The Board of Directors may hold
its meetings, and may have an office and keep the books of the Corporation
(except as otherwise may be provided for by law), in such place or places in or
outside the state of incorporation as the Board from time to time may
determine.
SECTION 2.7. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held as soon as practicable after adjournment of the annual
meeting of stockholders at such time and place as the Board of Directors may
fix. No notice shall be required for any such regular meeting of the Board.
SECTION 2.8. SPECIAL MEETINGS. Special meetings of the Board of
Directors shall be held at places and times fixed by resolution of the Board of
Directors, or upon call of the chairman of the Board, if any, or vice-chairman
of the Board, if any, the president, an executive vice president or two-thirds
of the directors then in office.
The secretary or officer performing the secretary's duties shall give
not less than twenty-four hours' notice by letter, telegraph or telephone (or
in person) of all special meetings of the Board of Directors, provided that
notice need not given of the annual meeting or of regular meetings held at
times and places fixed by resolution of the Board. Meetings may be held at any
time without notice if all of the directors are present, or if those not
present waive notice in writing either before or after the meeting. The notice
of meetings of the Board need not state the purpose of the meeting.
SECTION 2.9. PARTICIPATION BY CONFERENCE TELEPHONE. Members of the
Board of Directors of the Corporation, or any committee thereof, may
participate in a regular or special or any
<PAGE> 6
other meeting of the Board or committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation shall constitute
presence in person at such meeting.
SECTION 2.10. ACTION BY WRITTEN CONSENT. Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if prior or subsequent to
such action all the members of the Board or such committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of the proceedings of the Board or committee.
SECTION 2.11. QUORUM. A majority of the total number of directors then
in office shall constitute a quorum for the transaction of business; but if at
any meeting of the Board there be less than a quorum present, a majority of
those present may adjourn the meeting from time to time.
SECTION 2.12. BUSINESS. Business shall be transacted at meetings of
the Board of Directors in such order as the Board may determine. At all
meetings of the Board of Directors, the chairman of the Board, if any, the
president, or in his absence the vice-chairman, if any, or an executive vice
president, in the order named, shall preside.
SECTION 2.13. INTEREST OF DIRECTORS IN CONTRACTS. (a) No contract or
transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any other corporation, partnership,
association, or other organization in which one or more of the Corporation's
directors or officers, are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the
director or officer is present at or participates in the meeting of the Board
or committee which authorizes the contract or transaction, or solely because
his or their votes are counted for such purpose, if:
(1) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board or committee in good faith
authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or
(2) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction
is specifically approved in good faith by vote of the stockholders; or
<PAGE> 7
(3) The contract or transaction is fair as to the Corporation as of
the time it is authorized, approved or ratified, by the Board of
Directors, a committee of the Board of Directors or the stockholders.
(b) Interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
SECTION 2.14. COMPENSATION OF DIRECTORS. Each director of the
Corporation who is not a salaried officer or employee of the Corporation, or of
a subsidiary of the Corporation, shall receive such allowances for serving as a
director and such fees for attendance at meetings of the Board of Directors or
the executive committee or any other committee appointed by the Board as the
Board may from time to time determine.
SECTION 2.15. LOANS TO OFFICERS OR EMPLOYEES. The Board of Directors
may lend money to, guarantee any obligation of, or otherwise assist, any
officer or other employee of the Corporation or of any subsidiary, whether or
not such officer or employee is also a director of the Corporation, whenever,
in the judgment of the directors, such loan, guarantee, or assistance may
reasonably be expected to benefit the Corporation; provided, however, that any
such loan, guarantee, or other assistance given to an officer or employee who
is also a director of the Corporation must be authorized by a majority of the
entire Board of Directors. Any such loan, guarantee, or other assistance may be
made with or without interest and may be unsecured or secured in such manner as
the Board of Directors shall approve, including, but not limited to, a pledge
of shares of the Corporation, and may be made upon such other terms and
conditions as the Board of Directors may determine.
SECTION 2.16. NOMINATION. Subject to the rights of holders of any
class or series of stock having a preference over the common stock as to
dividends or upon liquidation, nominations for the election of directors may be
made by the Board of Directors or by any stockholder entitled to vote in the
election of directors generally. However, any stockholder entitled to vote in
the election of directors generally may nominate one or more persons for
election as directors at a meeting only if written notice of such stockholder's
intent to make such nomination or nominations has been given, either by
personal delivery or by United States mail, postage prepaid, to the secretary
of the Corporation not later than (i) with respect to an election to be held at
an annual meeting of stockholders, the close of business on the last day of the
eighth month after the immediately preceding annual meeting of stockholders,
and (ii) with respect to
<PAGE> 8
an election to be held at a special meeting of stockholders for the election of
directors, the close of business on the fifth day following the date on which
notice of such meeting is first given to stockholders. Each such notice shall
set forth: (a) the name and address of the stockholder who intends to make the
nomination and of the person or persons to be nominated; (b) a representation
that the stockholder is a holder of record of stock of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; (c) a
description of all arrangements or understandings between the stockholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
stockholder; (d) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated, or intended to be nominated, by the Board of Directors,
and; (e) the consent of each nominee to serve as a director of the Corporation
if so elected. The presiding officer at the meeting may refuse to acknowledge
the nomination of any person not made in compliance with the foregoing
procedure.
ARTICLE III
Committees
SECTION 3.1. COMMITTEES. The Board of Directors, by resolution adopted
by a majority of the number of directors then fixed by these By-Laws or
resolution thereto, may establish such standing or special committees of the
Board as it may deem advisable, and the members, terms, and authority of such
committees shall be set forth in the resolutions establishing such committee.
SECTION 3.2. EXECUTIVE COMMITTEE NUMBER AND TERM OF OFFICE. The Board
of Directors may, at any meeting, by majority vote of the Board of Directors,
elect from the directors an executive committee. The executive committee shall
consist of such number of members as may be fixed from time to time by
resolution of the Board of Directors. The Board of Directors may designate a
chairman of the committee who shall preside at all meetings thereof, and the
committee shall designate a member thereof to preside in the absence of the
chairman.
SECTION 3.3. EXECUTIVE COMMITTEE POWERS. The executive committee may,
while the Board of Directors is not in session, exercise all or any of the
powers of the Board of Directors in all cases in which specific directions
shall not have been given by the Board of Directors; except that the executive
committee shall not have the power or authority of the Board of Directors to
(i)
<PAGE> 9
amend the Certificate of Incorporation or the By-Laws of the Corporation, (ii)
fill vacancies on the Board of Directors, (iii) adopt an agreement or
certification of ownership, merger or consolidation, (iv) recommend to the
stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, or a dissolution of the Corporation or a
revocation of a dissolution, (v) declare a dividend, or (vi) authorize the
issuance of stock.
SECTION 3.4. EXECUTIVE COMMITTEE MEETINGS. Regular and special
meetings of the executive committee may be called and held subject to the same
requirements with respect to time, place and notice as are specified in these
By-Laws for regular and special meetings of the Board of Directors. Special
meetings of the executive committee may be called by any member thereof. Unless
otherwise indicated in the notice thereof, any and all business may be
transacted at a special or regular meeting of the executive meeting if a quorum
is present. At any meeting at which every member of the executive committee
shall be present, in person or by telephone, even though without any notice,
any business may be transacted. All action by the executive committee shall be
reported to the Board of Directors at its meeting next succeeding such action.
The executive committee shall fix its own rules of procedure, and
shall meet where and as provided by such rules or by resolution of the Board of
Directors, but in every case the presence of a majority of the total number of
members of the executive committee shall be necessary to constitute a quorum.
In every case, the affirmative vote of a quorum shall be necessary for the
adoption of any resolution.
SECTION 3.5. EXECUTIVE COMMITTEE VACANCIES. The Board of Directors, by
majority vote of the Board of Directors then in office, shall fill vacancies in
the executive committee by election from the directors.
ARTICLE IV
The Officers
SECTION 4.1. NUMBER AND TERM OF OFFICE. The officers of the
Corporation shall consist of, as the Board of Directors may determine and
appoint from time to time, a chief executive officer, a president, one or more
executive vice-presidents, a secretary, a treasurer, a controller, and/or such
other officers as may from time to time be elected or appointed by the Board of
Directors, including such additional vice-presidents with such designations, if
any, as may be determined by the Board of Directors and such assistant
secretaries and assistant treasurers.
<PAGE> 10
In addition, the Board of Directors may elect a chairman of the Board and may
also elect a vice-chairman as officers of the Corporation. Any two or more
offices may be held by the same person. In its discretion, the Board of
Directors may leave unfilled any office except as may be required by law.
The officers of the Corporation shall be elected or appointed from
time to time by the Board of Directors. Each officer shall hold office until
his successor shall have been duly elected or appointed or until his death or
until he shall resign or shall have been removed by the Board of Directors.
Each of the salaried officers of the Corporation shall devote his
entire time, skill and energy to the business of the Corporation, unless the
contrary is expressly consented to by the Board of Directors or the executive
committee.
SECTION 4.2. REMOVAL. Any officer may be removed by the Board of
Directors whenever, in its judgment, the best interests of the Corporation
would be served thereby.
SECTION 4.3. THE CHAIRMAN OF THE BOARD. The chairman of the Board, if
any, shall preside at all meetings of stockholders and of the Board of
Directors and shall have such other authority and perform such other duties as
are prescribed by law, by these By-Laws and by the Board of Directors. The
Board of Directors may designate the chairman of the Board as chief executive
officer, in which case he shall have such authority and perform such duties as
are prescribed by these By-Laws and the Board of Directors for the chief
executive officer.
SECTION 4.4. THE VICE-CHAIRMAN. The vice-chairman, if any, shall have
such authority and perform such other duties as are prescribed by these By-Laws
and by the Board of Directors. In the absence or inability to act of the
chairman of the Board and the president, he shall preside at the meetings of
the stockholders and of the Board of Directors and shall have and exercise all
of the powers and duties of the chairman of the Board. The Board of Directors
may designate the vice-chairman as chief executive officer, in which case he
shall have such authority and perform such duties as are prescribed by these
By-Laws and the Board of Directors for the chief executive officer.
SECTION 4.5. THE PRESIDENT. The president shall have such authority
and perform such duties as are prescribed by law, by these By-Laws, by the
Board of Directors and by the chief executive officer (if the president is not
the chief executive officer). The president, if there is no chairman of the
Board, or in the absence or the inability to act of the chairman of the Board,
shall preside at all meetings of stockholders and of the Board of Directors.
Unless the Board of Directors designates the
<PAGE> 11
chairman of the Board or the vice-chairman as chief executive officer, the
president shall be the chief executive officer, in which case he shall have
such authority and perform such duties as are prescribed by these By-Laws and
the Board of Directors for the chief executive officer.
SECTION 4.6. THE CHIEF EXECUTIVE OFFICER. Unless the Board of
Directors designates the chairman of the Board or the vice-chairman as chief
executive officer, the president shall be the chief executive officer. The
chief executive officer of the Corporation shall have, subject to the
supervision and direction of the Board of Directors, general supervision of the
business, property and affairs of the Corporation, including the power to
appoint and discharge agents and employees, and the powers vested in him by the
Board of Directors, by law or by these By-Laws or which usually attach or
pertain to such office.
SECTION 4.7. THE EXECUTIVE VICE-PRESIDENTS. In the absence of the
chairman of the Board, if any, the president and the vice-chairman, if any, or
in the event of their inability or refusal to act, the executive vice-president
(or in the event there is more than one executive vice-president, the executive
vice-presidents in the order designated, or in the absence of any designation,
then in the order of their election) shall perform the duties of the chairman
of the Board, of the president and of the vice-chairman, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
chairman of the Board, the president and the vice-chairman. Any executive
vice-president may sign, with the secretary or an authorized assistant
secretary, certificates for stock of the Corporation and shall perform such
other duties as from time to time may be assigned to him by the chairman of the
Board, the president, the vice-chairman, the Board of Directors or these
By-Laws.
SECTION 4.8. THE VICE-PRESIDENTS. The vice-presidents, if any, shall
perform such duties as may be assigned to them from time to time by the
chairman of the Board, the president, the vice-chairman, the Board of
Directors, or these By-Laws.
SECTION 4.9. THE TREASURER. Subject to the direction of chief
executive officer and the Board of Directors, the treasurer shall have charge
and custody of all the funds and securities of the Corporation; when necessary
or proper he shall endorse for collection, or cause to be endorsed, on behalf
of the Corporation, checks, notes and other obligations, and shall cause the
deposit of the same to the credit of the Corporation in such bank or banks or
depositary as the Board of Directors may designate or as the Board of Directors
by resolution may authorize; he shall sign all receipts and vouchers for
payments made to the Corporation other than routine receipts and vouchers, the
signing of which he may delegate; he shall sign all checks made by the
Corporation
<PAGE> 12
(provided, however, that the Board of Directors may authorize and prescribe by
resolution the manner in which checks drawn on banks or depositories shall be
signed, including the use of facsimile signatures, and the manner in which
officers, agents or employees shall be authorized to sign); unless otherwise
provided by resolution of the Board of Directors, he shall sign with an
officer-director all bills of exchange and promissory notes of the Corporation;
whenever required by the Board of Directors, he shall render a statement of his
cash account; he shall enter regularly full and accurate account of the
Corporation in books of the Corporation to be kept by him for that purpose; he
shall, at all reasonable times, exhibit his books and accounts to any director
of the Corporation upon application at his office during business hours; and he
shall perform all acts incident to the position of treasurer. If required by
the Board of Directors, the treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such sure ties as the Board of
Directors may require.
SECTION 4.10. THE SECRETARY. The secretary shall keep the minutes of
all meetings of the Board of Directors, the minutes of all meetings of the
stockholders and (unless otherwise directed by the Board of Directors) the
minutes of all committees, in books provided for that purpose; he shall attend
to the giving and serving of all notices of the Corporation; he may sign with
an officer-director or any other duly authorized person, in the name of the
Corporation, all contracts authorized by the Board of Directors or by the
executive committee, and, when so ordered by the Board of Directors or the
executive committee, he shall affix the seal of the Corporation thereto; he may
sign with the president or an executive vice-president all certificates of
shares of the capital stock; he shall have charge of the certificate books,
transfer books and stock ledgers, and such other books and papers as the Board
of Directors or the executive committee may direct, all of which shall, at all
reasonable times, be open to the examination of any director, upon application
at the secretary's office during business hours; and he shall in general
perform all the duties incident to the office of the secretary, subject to the
control of the chief executive officer and the Board of Directors.
SECTION 4.11. THE CONTROLLER. The controller shall be the chief
accounting officer of the Corporation. Subject to the supervision of the Board
of Directors, the chief executive officer and the treasurer, the controller
shall provide for and maintain adequate records of all assets, liabilities and
transactions of the Corporation, shall see that accurate audits of the
Corporation's affairs are currently and adequately made and shall perform such
other duties as from time to time may be assigned to him.
<PAGE> 13
SECTION 4.12. THE ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The
assistant treasurers shall respectively, if required by the Board of Directors,
give bonds for the faithful discharge of their duties in such sums and with
such sureties as the Board of Directors may determine. The assistant
secretaries as thereunto authorized by the Board of Directors may sign with the
chairman of the Board, the president, the vice-chairman or an executive
vice-president, certificates for stock of the Corporation, the issue of which
shall have been authorized by a resolution of the Board of Directors. The
assistant treasurers and assistant secretaries, in general, shall perform such
duties as shall be assigned to them by the treasurer or the secretary,
respectively, or chief executive officer, the Board of Directors, or these
By-Laws.
SECTION 4.13. SALARIES. The salaries of the officers shall be fixed
from time to time by the Board of Directors, and no officer shall be prevented
from receiving such salary by reason of the fact that he is also a director of
the Corporation.
SECTION 4.14. VOTING UPON STOCKS. Unless otherwise ordered by the
Board of Directors or by the executive committee, any officer, director or any
person or persons appointed in writing by any of them, shall have full power
and authority in behalf of the Corporation to attend and to act and to vote at
any meetings of stockholders of any corporation in which the Corporation may
hold stock, and at any such meeting shall possess and may exercise any and all
the rights and powers incident to the ownership of such stock, and which, as
the owner thereof, the Corporation might have possessed and exercised if
present. The Board of Directors may confer like powers upon any other person or
persons.
ARTICLE V
Contracts and Loans
SECTION 5.1. CONTRACTS. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the Corporation, and
such authority may be general or confined to specific instances.
SECTION 5.2. LOANS. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
<PAGE> 14
ARTICLE VI
Certificates for Stock and Their Transfer
SECTION 6.1. CERTIFICATES FOR STOCK. Certificates representing stock
of the Corporation shall be in such form as may be determined by the Board of
Directors. Such certificates shall be signed by the chairman of the Board, the
president, the vice-chairman or an executive vice-president and/or by the
secretary or an authorized assistant secretary and shall be sealed with the
seal of the Corporation. The seal may be a facsimile. If a stock certificate is
countersigned (i) by a transfer agent other than the Corporation or its
employee, or (ii) by a registrar other than the Corporation or its employee,
any other signature on the certificate may be a facsimile. In the event that
any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue. All certificates for stock
shall be consecutively numbered or otherwise identified. The name of the person
to whom the shares of stock represented thereby are issued, with the number of
shares of stock and date of issue, shall be entered on the books of the
Corporation. All certificates surrendered to the Corporation for transfer shall
be canceled and no new certificates shall be issued until the former
certificate for a like number of shares of stock shall have been surrendered
and canceled, except that, in the event of a lost, destroyed or mutilated
certificate, a new one may be issued therefor upon such terms and indemnity to
the Corporation as the Board of Directors may prescribe.
SECTION 6.2. TRANSFERS OF STOCK. Transfers of stock of the Corporation
shall be made only on the books of the Corporation by the holder of record
thereof or by his legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the secretary of the Corporation, and on
surrender for cancellation of the certificate for such stock. The person in
whose name stock stands on the books of the Corporation shall be deemed the
owner thereof for all purposes as regards the Corporation.
ARTICLE VII
Fiscal Year
SECTION 7.1. FISCAL YEAR. The fiscal year of the Corporation shall
begin on the first day of January in each year and end on the last day of
December in each year.
<PAGE> 15
ARTICLE VIII
Seal
SECTION 8.1. SEAL. The Board of Directors shall approve a corporate
seal which shall be in the form of a circle and shall have inscribed thereon
the name of the Corporation.
ARTICLE IX
Waiver of Notice
SECTION 9.1. WAIVER OF NOTICE. Whenever any notice is required to be
given under the provisions of these By-Laws or under the provisions of the
Certificate of Incorporation or under the provisions of the corporation law of
the state of incorporation, waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Attendance of
any person at a meeting for which any notice is required to be given under the
provisions of these By-Laws, the Certificate of Incorporation or the
corporation law of the state of incorporation shall constitute a waiver of
notice of such meeting except when the person attends for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
ARTICLE X
Amendments
SECTION 10.1. AMENDMENTS. These By-Laws may be altered, amended or
repealed and new By-Laws may be adopted at any meeting of the Board of
Directors of the Corporation by the affirmative vote of a majority of the
members of the Board, or by the affirmative vote of a majority of the
outstanding capital stock of the Corporation (assessed upon the basis of votes
and not on the basis of number of shares) entitled to vote generally in the
election of directors, voting together as a single class.
ARTICLE XI
Indemnification
SECTION 11.1. INDEMNIFICATION. The Corporation shall indemnify its
officers, directors, employees and agents to the fullest extent permitted by
the General Corporation Law of Delaware, as amended from time to time.
<PAGE> 1
EXHIBIT 3.1
PADDINGTON INC.
Registered Address: 1220 North Market Street, Suite 606, Wilmington,
Delaware 19801, U.S.A.
April 20, 1999
Mr. King Kwok Yu
Mr. Richard Che Keung Wong
Mr. Hardy Kung Chin Lok
c/o Suite E, 15/F
Ho Lee Commercial Building
40 D'Aguilar Street, Central
Hong Kong
RE: LOCK UP AGREEMENT WITH PADDINGTON INC.
Gentlemen:
As part of the sale of all currently issued shares of Common Stock of
Paddington Inc. (the "Company") to the undersigned (the "Holders"), the Holders
hereby represent, warrant, covenant and agree, for the benefit of the Company
and the holders of record (the "third party beneficiaries") of the Company's
outstanding securities, including the Company's Common Stock, $.0001 par value
(the "Stock") at the date hereof and during the pendency of this letter
agreement that the Holders will not transfer, sell, contract to sell, devise,
gift, assign, pledge, hypothecate, distribute or grant any option to purchase
or otherwise dispose of, directly or indirectly, their shares of Stock of the
Company owned beneficially or otherwise by the Holders except in connection
with or following completion of a merger, acquisition or other transaction by
the Company resulting in the Company no longer being classified as a blank
check company as defined in Section 7(b)(3) of the Securities Act of 1933, as
amended.
Any attempted sale, transfer or other disposition in violation of this
letter agreement shall be null and void.
The Holders further agree that the Company (i) may instruct its
transfer agent not to transfer such securities (ii) may provide a copy of this
letter agreement to the Company's transfer agent for the purpose of instructing
the Company's transfer agent to place a legend on the certificate(s) evidencing
the securities subject hereto and disclosing that any transfer, sale, contract
for sale, devise, gift, assignment, pledge or hypothecation of such securities
is subject to the terms of this letter agreement and (ill) may issue
stop-transfer instructions to its transfer agent for the period contemplated by
this letter agreement for such securities. This letter agreement shall be
binding upon the Holders, their agents, heirs, successors, assigns and
beneficiaries.
<PAGE> 2
Any waiver by the Company of any of the terms and conditions of this
letter agreement in any instance must be in writing and must be duly executed
by the Company and the Holders and shall not be deemed or construed to be a
waiver of such term or condition for the future, or of any subsequent breach
thereof
The Holders agree that any breach of this letter agreement will cause
the Company and the third party beneficiaries irreparable damage for which
there is no adequate remedy at law. If there is a breach or threatened breach
of this letter agreement by the Holders, the Holders hereby agree that the
Company and the third party beneficiaries shall be entitled to the issuance of
an immediate injunction without notice to restrain the breach or threatened
breach. The Holders also agree that the Company and all third party
beneficiaries shall be entitled to pursue any other remedies for such a breach
or threatened breach, including a claim for money damage.
ACKNOWLEDGED and AGREED on the date first written above:
KING KWOK YU, a Holder
/s/ King Kwok Yu
- --------------------------------------
RICHARD CHE KEUNG WONG, a Holder
/s/ Richard Che Keung Wong
- --------------------------------------
HARDY KUNG CHIN LOK, a Holder
/s/ Hardy Kung Chin Lok
- --------------------------------------
<PAGE> 1
EXHIBIT 3.2
PADDINGTON INC.
CONSENT IN LIEU OF
MEETING OF THE BOARD OF DIRECTORS
WE, THE UNDERSIGNED, being all of the Directors of Paddington Inc., a company
organized and existing under the laws of Delaware (the "Company"), hereby
consent, pursuant to Section 141(f) of the General Corporation Law of Delaware,
to take the following action:
WHEREAS, the Board of Directors has determined that the best interests of the
Company will be served if it does not issue preferred stock, except in
connection with or following completion of a merger, acquisition or other
business combination resulting in the Company no longer being classified as a
"blank check company";
RESOLVED, that the Board of Directors shall not issue any or authorize any
additional preferred stock except in connection with or following completion of
a merger, acquisition or other business combination resulting in the Company no
longer being classified as a "blank check company";
FURTHER RESOLVED, that if the shareholders vote that the Company issue or
authorize any additional preferred stock, that Lock-Up Agreements be sought
with the proposed preferred stockholders in substantially the same form as
those entered into on April 20, 1999 with the Holders of Common Stock of the
Company; and
FURTHER RESOLVED, that the law firm of Hunton & Williams is hereby authorized
and empowered to execute, deliver and file or cause to be filed, any such
Lock-Up Agreement or similar instrument or agreement as the Board of Directors
so authorizes, and to do all such other acts and things necessary or
appropriate to effectuate the intent of the preceding resolutions.
The Action taken by this Consent shall have the same force and effect as if
taken at a meeting of the Board of Directors of the Company, duly called and
constituted pursuant to the General Corporation Law of Delaware.
IN WITNESS WHEREOF, the undersigned have caused this instrument to be executed
on this 11th day of May, 1999.
/s/ Hardy Kung Chin Lok /s/ Richard Che Keung Wong
----------------------- ---------------------------
Hardy Kung Chin Lok Richard Che Keung Wong
/s/ King Kwok Yu
---------------------------
King Kwok Yu
<PAGE> 2
PADDINGTON INC.
CONSENT IN LIEU OF
MEETING OF THE BOARD OF DIRECTORS
WE, THE UNDERSIGNED, being all of the Directors of Paddington Inc., a company
organized and existing under the laws of Delaware (the "Company"), hereby
consent, pursuant to Section 141(f) of the General Corporation Law of Delaware,
to take the following action:
WHEREAS, pursuant to Article IV of the Company's By-laws, the Board of
Directors has appointed the following officers of the Company:
Chairman of the Board: Hardy Kung Chin Lok
Vice Chairman: Richard Che Keung Wong
President, Treasurer,
Secretary and Controller: King Kwok Yu
RESOLVED, that the above listed officers are and shall be hereby authorized and
empowered to act in their respective capacities on a continuous and
uninterrupted basis until replacements are considered appropriate and necessary
by the Board of Directors.
The Action taken by this Consent shall have the same force and effect as if
taken at a meeting of the Board of Directors of the Company, duly called and
constituted pursuant to the General Corporation Law of Delaware.
IN WITNESS WHEREOF, the undersigned have caused this instrument to be executed
on this 11th day of May, 1999.
/s/ Hardy Kung Chin Lok /s/ Richard Che Keung Wong
----------------------- --------------------------
Hardy Kung Chin Lok Richard Che Keung Wong
/s/ King Kwok Yu
----------------
King Kwok Yu
<PAGE> 1
GREENFORD ENTERPRISES LIMITED
SUITE E, 15/F HO LEE COMMERCIAL BUILDING 40 D'AGUILAR STREET,
CENTRAL HONG KONG
20 April, 1999
The Directors
Paddington Inc.
c/o Suite E, 15/F Ho Lee Commercial Building
40 D'Aguilar Street, Central
Hong Kong
Re: Paddington Inc. - Use of Office Space and Address
Dear Sirs,
We hereby advise that the Board of Directors of Greenford Enterprises
Limited ("The Company") has authorised the Officers and Directors of Paddington
Inc. to use, at no cost to Paddington Inc., its office space at Suite E, 15/F,
Ho Lee Commercial Building, 40 D'Aguilar Street, Central, Hong Kong (the
"Office Address"), with immediate effect until such time as Paddington Inc.
completes an acquisition or merger. During this period, Paddington Inc. is also
authorised to use the Office Address as Paddington Inc.`s correspondence
address at no cost. We request Paddington Inc. to notify us as soon as such a
transaction is completed.
Please instruct Paddington Inc.'s Officers and Directors only to use
the Office Address as Paddington Inc.'s correspondence address and should not
represent the Office Address as Paddington Inc.'s registered or business
address in Hong Kong to any third parties.
We also note that the Officers and Directors might use the Office
Address to carry out other lawful activities not relating to those of
Paddington Inc. Under such circumstances, Paddington Inc. should not bear any
legal responsibilities for these actions.
A copy of The Company's Minutes of the Board of Directors authorising
the above arrangement is hereby attached for your reference and record.
Yours faithfully,
For and on behalf of
GREENFORD ENTERPRISES LIMITED
/s/ Johnson Chee Kin Wong
-------------------------------
Johnson Chee Kin Wong, Director
<PAGE> 2
CONSENT OF GREENFORD ENTERPRISES LIMITED
We hereby consent to the use in Paddington Inc.'s Registration Statement on
Form 10-SB of our letter dated April 20, 1999 relating to the use of office
space and address at Suite E, 15/F, Ho Lee Building, 40 D'Aguilar Street,
Central Hong Kong at no cost to Paddington Inc.
For and on behalf of
GREENFORD ENTERPRISES LIMITED
/s/Johnson Chee Kin Wong
- -------------------------------
Johnson Chee Kin Wong, Director
Hong Kong
May 11, 1999
<PAGE> 1
EXHIBIT 10.1
Arthur Andersen & Co.
Certified Public Accountants
25/F, Wing On Centre
111 Connaught Road, Central
Hong Kong
May 12, 1999
The Board of Directors
Paddington Inc.
c/o 1220 North Market Street
Suite 606, Wilmington
Delaware 19801
United States of America
Dear Sirs,
As independent public accountants, we hereby consent to the incorporation by
reference in this Form 10-SB of our report dated May 5, 1999 included in this
Registration Statement. It should be noted that we have not audited any
financial statements of the Company subsequent to April 30, 1999 or performed
any audit procedures subsequent to the date of our report.
Very truly yours,
/s/ ARTHUR ANDERSEN & CO.
- ----------------------------
ARTHUR ANDERSEN & CO.
