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As filed with the Securities and Exchange Commission on March 21, 2000
REGISTRATION NO. ____-______
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
Cambridge Creek Companies, Ltd.
(Name of Small Business Issuer in its charter)
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<S> <C> <C>
Nevada 6770 76-0609436
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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Suite 37-B3-1410 Parkway Boulevard
Coquitlam, British Columbia CANADA V3E 3J7
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (604) 464-8374
Securities Registered pursuant to Section 12(b) of the Act: None
Securities Registered pursuant to Section 12(g) of the Act: Common Stock, $.001
Par Value
(Title of class)
Agent for Service: With a Copy to:
Douglas Roe, President James L. Vandeberg
Cambridge Creek Companies, Ltd. Ogden Murphy Wallace, P.L.L.C.
Suite 37-B3-1410 Parkway Boulevard 1601 Fifth Ave., Suite 2100
Coquitlam, British Columbia V3E 3J7, CANADA Seattle, Washington 98101
(604) 464-8374 (206) 447-7000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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CAMBRIDGE CREEK COMPANIES, LTD.
FORM 10-SB
TABLE OF CONTENTS
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PART I Page
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Item 1. Description of Business....................................... 3
Item 2. Management's Discussion and Analysis or Plan of Operations.... 6
Item 3. Description of Property....................................... 15
Item 4. Security Ownership of Certain Beneficial Owners and
Management.................................................... 15
Item 5. Directors, Executive Officers, Promoters and Control Persons.. 16
Item 6. Executive Compensation........................................ 16
Item 7. Certain Relationships and Related Transactions................ 17
Item 8. Description of Securities..................................... 17
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity
and Other Shareholder Matters................................. 19
Item 2. Legal Proceedings............................................. 20
Item 3. Changes in and Disagreements with Accountants on Accounting... 20
Item 4. Recent Sales of Unregistered Securities....................... 20
Item 5. Indemnification of Directors and Officers..................... 21
PART F/S
Index to Consolidated Financial Statements.............................
PART III
Item 1. Index to Exhibits............................................. 23
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PART I
Item 1. Description of Business.
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General
Cambridge Creek Companies, Ltd. (the "Company") was incorporated under the
laws of the State of Nevada on May 27, 1999, and is in the early developmental
and promotional stages. To date, the Company's only activities have been
organizational, directed at raising its initial capital and developing its
business plan. The Company has not commenced operations. The Company has no
full time employees and owns no real estate.
Business Purpose.
The business plan of the Company is to merge with or acquire a business
entity in exchange for the Company's securities. The Company will attempt to
locate and negotiate with a business entity for the merger of that target
company into the Company. In certain instances, a target company may wish to
become a subsidiary of the Company or may wish to contribute assets to the
Company rather than merge. No assurances can be given that the Company will be
successful in locating or negotiating with any target company.
The Company will seek a foreign or domestic private company interested in
becoming, through a business combination with the Company, a reporting
("public") company whose securities are qualified for trading in the United
States secondary market. By entering in to a business combination with the
Company, the target company can acquire a controlling ownership interest in a
public company without incurring the cost and time required to conduct an
initial public offering. As a result, the target company may reap some of the
perceived benefits of being a reporting company with a class of publicly-traded
securities, including:
* the ability to use registered securities to make acquisitions of
assets or businesses;
* increased visibility in the financial community;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
* compensation of key employees through stock options;
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* enhanced corporate image;
* a presence in the United States capital market.
Potential Target Companies
A business entity, if any, which may be interested in a business
combination with the Company may include the following:
. a company for which a 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 securities or is unable
to find an underwriter securities on terms acceptable to it;
. a company which wishes to become public with less of its common stock than
would occur upon an underwriting;
. a company which believes that it will be able obtain investment capital on
more favorable terms after it has become public;
. a foreign company which may wish an initial entry into the United States
securities market;
. a special situation company, such as a company seeking a public market to
satisfy redemption requirements under a qualified employee stock option
plan;
. a company seeking one or more of the other perceived benefits of becoming a
public company.
A business combination with a target company will likely involve the
transfer to the target company of the majority of the issued and outstanding
common stock of the Company, and the substitution by the target company of its
own management and board of directors.
No assurances can be given that the Company will be able to enter into a
business combination, as to the terms of a business combination, or as to the
nature of the target company.
Blank Check Company
The proposed business activities described herein classify the Company as a
blank check company. The Company meets the definition of a "blank check"
company under the Securities Act of 1933, which defines blank check company as 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. A
"penny stock" security is any equity security that has a market price of less
than
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$5.00 per share or with an exercise price of less than $5.00 per share, subject
to certain exceptions.
The Securities and Exchange Commission and many states have enacted
statutes, rules and regulations limiting the sale of securities of blank check
companies. Management does 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
sole shareholder of the Company has executed and delivered a "lock-up" letter
agreement affirming that he will not sell or otherwise transfer his shares of
the Company's common stock except in connection with or following completion of
a merger or acquisition resulting in the Company no longer being classified as a
blank check company. The sole shareholder has deposited his stock certificates
with the Company's legal counsel, who will not release the certificates except
in connection with or following the completion of a merger or acquisition. The
Company is voluntarily filing this Registration Statement with the Securities
and Exchange Commission and is under no obligation to do so under the Securities
Exchange Act of 1934.
Biocatalyst License
The Company's only asset is a license to distribute and produce an oxygen
enriched water product, called "Biocatalyst," for remediation of sewage and
waste water in septic tanks and waste water treatment facilities, and for other
similar uses, and the rights accruing from this license. A copy of the license
is attached hereto as Exhibit 6.2. The Company's original business plan was to
determine the feasibility of the Biocatalyst sewage and waste remediation
application, and, if Biocatalyst proved to be feasible for this application,
become a Biocatalyst producer. The Company acquired the three-year license from
Mortenson & Associates on July 1, 1999. Mortenson & Associates acquired its
right to sublicense Biocatalyst to the Company from NW Technologies.
In December, 1999, David R. Mortenson, Mortenson & Associates' principal,
notified the Company that he was involved in a legal dispute with NW
Technologies, and would be unable to fulfill his obligations under the license
to the Company. As a result, the Company's ability to implement its business
plan was seriously undermined.
On March 17, 2000, Mortenson & Associates, the Company, and the Company's
sole shareholder, Douglas Roe, entered into a settlement agreement filed
herewith as Exhibit 6.1. Under the terms of the settlement agreement, Mortenson
& Associates' affiliate, Vitamineralherb.com, will grant a license to distribute
vitamins and similar products in part for his agreement not to pursue his
individual claims against Mortenson & Associates. The settlement agreement
provides that Mortenson will prosecute his claims against NW Technologies
diligently, with a goal toward recovering the Biocatalyst rights. Pursuant to
the settlement agreement, the Company has retained its right to prosecute its
claims against Mortenson & Associates for breach of contract. The Company has
no plans to pursue a claim at this time.
Administrative Offices
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The Company currently maintains limited office space, occupied by its sole
officer, Douglas Roe, for which it pays no rent. Its address is Suite 37-B3-
1410 Parkway Boulevard, Coquitlam, British Columbia V3E 3J7, CANADA, and its
phone number is (604) 464-8374.
Employees
The Company has no full time employees. The Company's president, Mr. Roe,
has agreed to allocate a portion of his time to the activities of the Company,
without compensation. The president anticipates that the business plan of the
Company can be implemented by his devoting no more than 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 officer. See
"Item 2, Management's Discussion and Analysis or Plan of Operations, Outlook:
Issues and Uncertainties - Conflicts of Interest" and "Item 5, Directors,
Executive Officers, Promoters And Control Persons."
Item 2. Management's Discussion and Analysis or Plan of Operations.
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The following discussion and analysis should be read in conjunction with
the Company's Financial Statements and Notes thereto and other financial
information included elsewhere in this Form 10-SB. This Form 10-SB contains, in
addition to historical information, forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially
from the results discussed in the forward-looking statements. Factors that could
cause or contribute to such differences include those discussed below, as well
as those discussed elsewhere in this Form 10-SB.
Overview
The Company's business plan is to merge with or acquire a business entity
in exchange for the Company's securities. The Company has no particular
acquisition in mind and has not entered into any negotiations regarding such an
acquisition. Neither the Company's sole officer and director nor any affiliate
has engaged in any negotiations with any representative of any company regarding
the possibility of an acquisition or merger between the Company and such other
company.
Management anticipates 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 will be contacted or solicited. Management may engage in such solicitation
directly or may employ one or more other entities to conduct or assist in such
solicitation. Management and its affiliates will likely pay referral fees to
consultants and others who refer target businesses for mergers into public
companies in which management and its affiliates have an interest. Payments
would be made if a business combination occurs, and may consist of cash or a
portion of the stock in the Company retained by management and its affiliates,
or both.
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The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in a business entity which desires to seek the
perceived advantages of a corporation which has 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. Management
anticipates that it 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, Financial Statements." 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.
The Company will not restrict its search for any specific kind of business
entity, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
business life. 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 may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Management believes
(but has not conducted any research to confirm) that there are business entities
seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, increasing the opportunity
to use securities for acquisitions, providing liquidity for shareholders and
other factors. 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 Company has, and will continue to have, no capital with which to
provide cash or other assets to the owners of business entities. However,
management believes the Company will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in a
public company without incurring the cost and time required to conduct an
initial public offering. Management has not conducted market research and is not
aware of statistical data to support the perceived benefits of a merger or
acquisition transaction for the owners of a business opportunity.
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The analysis of new business opportunities will be undertaken by, or under
the supervision of, the sole officer and director of the Company, who is not a
professional business analyst. In analyzing prospective business opportunities,
management will consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; the nature of present and
expected competition; the quality and experience of management services which
may be available and the depth of that management; the potential for further
research, development, or exploration; specific risk factors not now foreseeable
but which then may be anticipated to impact the proposed activities of the
Company; the potential for growth or expansion; the potential for profit; the
perceived public recognition or acceptance of products, services, or trades;
name identification; and other relevant factors. This discussion of the proposed
criteria is not meant to be restrictive of the Company's virtually unlimited
discretion to search for and enter into potential business opportunities.
The Company may enter into a business combination with a business entity
that desires to establish a public trading market for its shares. A target
company may attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business combination with the
Company. Such consequences may include, but are not limited to, time delays of
the registration process, significant expenses to be incurred in such an
offering, loss of voting control to public shareholders or the inability to
obtain an underwriter or to obtain an underwriter on satisfactory terms.
Management of the Company, which in all likelihood will not be experienced
in matters relating to the business of a target company, will rely upon its own
efforts in accomplishing the business 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.
A potential target company may have an agreement with a consultant or
advisor providing that services of the consultant or advisor 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 or acquisition. 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.
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is likely that the present management and shareholder of the
Company will no longer be in control of the Company. In addition, it is likely
that the Company's officer and director will, as part of the terms of the
acquisition transaction, resign and be replaced by one or more new officers and
directors.
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It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal 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 such securities 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
additional 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 in a "tax-free" reorganization under Sections 351 or
368 of the Internal Revenue Code of 1986, as amended (the "Code").
With respect to any merger or acquisition negotiations with a target
company, management expects to focus on the percentage of the Company which
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 will in all likelihood hold a
substantially lesser percentage ownership interest in the Company following any
merger or acquisition. The percentage of ownership may be subject to significant
reduction in the event the Company acquires a target company with substantial
assets. 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 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 which cannot provide
audited financial statements at or within a reasonable period of time after
closing of the proposed transaction. The Company is subject to all of the
reporting requirements included in the Exchange Act. Included in these
requirements is the duty of the Company to file audited financial statements as
part of or within 60 days following its Form 8-K to be filed with the Securities
and Exchange Commission upon consummation of a merger or acquisition, as well as
the Company's audited financial statements included in its annual report on Form
10-K (or 10-KSB, as applicable). 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
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the target company, the closing documents may provide that the proposed
transaction will be voidable at the discretion of the present management of the
Company.
Results of Operations
During the period from May 27, 1999 (inception) through February 28, 2000,
the Company has engaged in no significant operations other than organizational
activities, acquisition of the rights to market Biocatalyst, and preparation
for registration of its securities under the Securities Act of 1933 (which was
withdrawn) and the Securities Exchange Act of 1934, as amended. No revenues
were received by the Company during this period.
For the current fiscal year, the Company anticipates incurring a loss as a
result of organizational expenses, expenses associated with registration under
the Securities Exchange Act of 1934, and expenses associated with setting up a
company structure to begin implementing its business plan. The Company
anticipates that until these procedures are completed, it will not generate
revenues other than interest income, and may continue to operate at a loss
thereafter, depending upon the performance of the business.
Liquidity and Capital Resources
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholder's equity. Consequently, the Company's balance sheet as of February
28, 2000 reflects current assets of $0.
The Company will carry out its plan of business as discussed above. The
Company cannot predict to what extent its liquidity and capital resources will
be diminished prior to the consummation of a business combination or whether its
capital will be further depleted by the operating losses (if any) of the
business entity which the Company may eventually acquire.
The Company will need additional capital to carry out its business plan to
engage in a business combination. No commitments to provide additional funds
have been made by management or stockholders. Accordingly, there can be no
assurance that any additional funds will be available on terms acceptable to
the Company or at all. Irrespective of whether the Company's cash assets prove
to be inadequate to meet its operational needs, the Company might seek to
compensate providers of services by issuances of stock in lieu of cash.
Outlook: Issues and Uncertainties
The Company's success is dependent on a number of factors that should be
considered by prospective investors. The Company is a relatively young company
and does not yet have a long history of earnings or profit and there is no
assurance that it will operate profitably in the future. As such, there is no
assurance that the Company will provide a return on investment in the future.
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1. Conflicts of Interest - General. Certain conflicts of interest exist
between the Company and its sole officer and director, Douglas Roe. Mr. Roe
has other business interests to which he devotes his attention. He may be
expected to continue to do so. As a result, conflicts of interest may arise
that can be resolved only through exercise of such judgment as is consistent
with his fiduciary duties to the Company.
2. Securities Regulation. The Company's securities, when available for
trading, will be subject to the Securities and Exchange Commission rule that
imposes special sales practice requirements upon broker-dealers that sell such
securities to other than established customers or accredited investors. For
purposes of the rule, the phrase "accredited investors" means, in general terms,
institutions with assets exceeding $5,000,000 or individuals having a net worth
in excess of $1,000,000 or having an annual income that exceeds $200,000 (or
that, combined with a spouses income, exceeds $300,000). For transactions
covered by the rule, the broker-dealer must make a special suitability
determination for the purchaser and receive the purchaser's written agreement to
the transaction prior to the sale. Consequently, the rule may affect the
ability of purchasers of the Company's securities to buy or sell in any market
that may develop.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks." (A "penny stock" is any equity security that
has a market price of less than $5.00 per share or with an exercise price of
less than $5.00 per share, subject to certain exceptions). Such rules include
Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the
Securities and Exchange Act of 1934, as amended. The rules may further affect
the ability of owners of the Company's shares to sell their securities in any
market that may develop for them. Shareholders should be aware that, according
to the Securities and Exchange Commission Release No. 34-29093, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse.
Such patterns include
. control of the market for the security by one or a few broker-dealers that
are often related to the promoter or issuer;
. manipulation of prices through prearranged matching of purchases and sales
and false and misleading press releases;
. "boiler room" practices involving high pressure sales tactics and
unrealistic price projections by inexperienced sales persons;
. excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and
. the wholesale dumping of the same securities by promoters and broker-
dealers after prices have been manipulated to a desired level, along with
the inevitable collapse of those prices with consequent investor losses.
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3. No Operating History Or Revenue And Minimal Assets. The Company has had
no operating history nor any revenues or earnings from operations. The Company
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. This may result in the Company
incurring a net operating loss which 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.
4. Lack of Diversification. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a business
combination with only one business entity. Consequently, the Company's
activities will be limited to those engaged in by the business entity which the
Company merges with 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.
5. Dependence on Management; Limited Participation of Management. While
seeking a business combination, management anticipates devoting only a limited
amount of time per month to the business of the Company. The Company's sole
officer has not entered into a written employment agreement with the Company and
he is not expected to do so in the foreseeable future. The Company has not
obtained key man life insurance on its officer and director. Notwithstanding the
combined limited experience and time commitment of management, loss of the
services of this individual would adversely affect development of the Company's
business and its likelihood of continuing operations.
6. Indemnification of Officers and Directors. The Company's Articles of
Incorporation provide for indemnification of its directors, officers, employees
and agents, under certain circumstances, against attorneys' fees and other
expenses incurred by them in any litigation to which they become a party arising
from their association with, or their activities on behalf of, the Company. The
Company will also bear the expense of such litigation for any of its directors,
officers, employees or agents, upon such person's promise to repay the Company
therefor if it is ultimately determined that any such person shall not have been
entitled to indemnification. This indemnification policy could result in
substantial expenditures by the Company.
7. Director's Liability Limited. The Company's Articles of Incorporation
exclude personal liability of its directors to the Company and its shareholders
for monetary damages due to breach of fiduciary duty except in certain specified
circumstances. Accordingly, the Company will have a much more limited right of
action against its directors than otherwise would be the case. The Company has
been advised that the SEC takes the position that this provision does not effect
the liability of any director under applicable federal and state securities
laws.
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8. No Foreseeable Dividends. The Company has not paid dividends on its
Common Stock and does not anticipate paying such dividends in the foreseeable
future.
9. Speculative Nature Of The Company's Proposed 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.
While management will prefer business combinations with entities having
established operating histories, there can be no assurance that the Company will
be successful in locating candidates 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 management of the
target company and numerous other factors beyond the Company's control.
10. Competition. The Company is and will continue to 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 and acquisitions of companies which
may be merger or acquisition target candidates for the Company. 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 completing a business combination. Moreover, the Company will also
compete with numerous other small public companies in seeking merger or
acquisition candidates.
11. 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 business entity. There can be no assurance that the
Company will be successful in identifying and evaluating suitable business
opportunities or in concluding a business combination. Management has 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. 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 business entity. Accordingly, the
Company may enter into a business combination with a business entity having no
significant operating history, losses, limited or no potential for immediate
earnings, limited assets, negative net worth or other negative characteristics.
12. Reporting Requirements May Delay Or Preclude Acquisition. Section 13
of the Securities Exchange Act of 1934 (the "Exchange Act") requires companies
subject thereto to provide certain information about significant acquisitions
including certified financial statements for the company acquired covering one
or two years, depending on the relative size of the 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
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are unable to obtain the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the Exchange Act are
applicable.
13. Lack Of Market Research Or Marketing Organization. The Company has
neither conducted, nor have others made available to it, market research
indicating that demand exists for the 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.
14. Regulation Under Investment Company Act. Although the Company will be
subject to regulation under the Exchange Act, management believes the Company
will not be subject to regulation under the Investment Company Act of 1940,
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business
combinations which result in the Company holding passive investment interests in
a number of entities, the Company could be subject to regulation under the
Investment Company Act of 1940. In such event, the Company would be required to
register as an investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no formal
determination from the Securities and Exchange Commission as to the status of
the Company under the Investment Company Act of 1940 and, consequently, any
violation of such Act could subject the Company to material adverse
consequences.
15. Probable Change In Control And Management. A business combination
involving the issuance of the Company's common stock will, in all likelihood,
result in shareholders of a 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. The resulting change in control of the Company will likely result in
removal of the present officer and director of the Company and a corresponding
reduction in or elimination of his participation in the future affairs of the
Company.
16. Reduction Of Percentage Share Ownership Following Business
Combination. The Company's primary plan of operation is based upon a business
combination with a business entity which, in all likelihood, will result in the
Company issuing securities to shareholders of such business entity. The issuance
of previously authorized and unissued common stock of the Company would result
in reduction in percentage of shares owned by the present shareholders of the
Company and would most likely result in a change in control or management of the
Company.
17. Taxation. Federal and state tax consequences will, in all likelihood,
be major considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as 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 so as to
minimize the federal and state tax consequences to both the Company and the
target company; however, there can be no assurance that such business
combination will
14
<PAGE>
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 which may have an adverse effect on both parties to the
transaction.
18. Requirement Of Audited Financial Statements May Disqualify Business
Opportunities. Management of the Company will request that any potential
business opportunity provide audited financial statements. One or more
attractive business opportunities 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 obtain certain assurances as to the target company's assets,
liabilities, revenues and expenses prior to consummating a business combination,
with further assurances that an audited financial statement would be provided
after closing of such a transaction. Closing documents relative thereto may
include representations that the audited financial statements will not
materially differ from the representations included in such closing documents.
Item 3. Description of Property.
- ---------------------------------
The Company has no properties and at this time has no agreements to acquire
any properties. The Company currently maintains limited office space, occupied
by its sole officer and director, Douglas Roe, for which it pays no rent. Its
address is Suite 37-B3-1410 Parkway Boulevard, Coquitlam, British Columbia V3E
3J7, CANADA, and its phone number is (604) 464-8374.
Item 4. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
The following table sets forth, as of March 21, 2000, the Company's
outstanding Common Stock owned of record or beneficially by each Executive
Officer and Director and by each person who owned of record, or was known by the
Company to own beneficially, more than 5% of the Company's Common Stock, and the
shareholdings of all Executive Officers and Directors as a group. Each person
has sole voting and investment power with respect to the shares shown.
<TABLE>
<CAPTION>
Percentage of
Name Shares Owned Shares Owned
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Douglas Roe, President, Secretary, Treasurer, and Director 2,500,000 100%
Suite 37-B3-1410 Parkway Boulevard
Coquitlam, B.C. Canada V3E 3J7
- --------------------------------------------------------------------------------------------------
ALL EXECUTIVE OFFICERS & DIRECTORS AS A GROUP (1 Individual) 2,500,000 100%
- --------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
Item 5. Directors, Executive Officers, Promoters and Control Persons.
- ----------------------------------------------------------------------
The following table sets forth the name, age and position of each Director
and Executive Officer of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------------------------------------------------------------------
<S> <C> <C>
Douglas Roe 28 President, Secretary, Treasurer, Director
- -------------------------------------------------------------------------------
</TABLE>
There are no agreements or understandings for the officer or director 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.
The director named above will serve until his successors are elected and
qualified. Officers will hold their positions at the pleasure of the board of
directors, absent any employment agreement. No employment agreements currently
exist or are contemplated. There is no arrangement or understanding between the
director and officer of the Company and any other person pursuant to which any
director or officer was or is to be selected as a director or officer.
The director and officer of the Company will devote his time to the
Company's affairs on an "as needed" basis. As a result, the actual amount of
time which he will devote to the Company's affairs is unknown and is likely to
vary substantially from month to month.
Mr. Roe became the Company's sole director and officer in March, 2000.
During the past five years, Mr. Roe has worked with a group of independent
investors involved with financing public companies as well as private ventures.
The group has been involved with several companies, the most notable being
Gallery Resources Limited, a company that trades on the Canadian Venture
Exchange under the symbol "GYR". Gallery is an exploration company looking for
nickel in Labradour, Canada. The group also had a minor role in a startup
company named Planet City that trades on the OTC market under the symbol "PINC."
Planet City is involved in computer software. The group's most recent activities
were with E-BIDD.com, a pink sheet company that trades under the symbol "BIDD."
E-BIDD.com is involved in the development of online auction software. Mr. Roe
devotes approximately 20% of his time to his position in the group, overseeing
acquisitions, operations, and financing. Before forming this investment group,
Mr. Roe had invested in both real estate and the stock market. From
approximately 1990 to 1992, Mr. Roe developed a Promotional Services Company in
Coquitlam, British Columbia, Canada, which he sold in 1992 before forming his
investment group.
Mr. Roe holds no other directorships in reporting companies.
Item 6. Executive Compensation.
- --------------------------------
The Company's officer and director does not receive any compensation for
his services rendered to the Company, has not received such compensation in the
past, and is not accruing any compensation pursuant to any agreement with the
Company.
16
<PAGE>
The officer and director of the Company will not receive any finder's fee,
either directly or indirectly, as a result of his efforts to implement the
Company's business plan outlined herein. However, the officer and director of
the Company anticipates receiving benefits as a shareholder of the Company.
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 employees.
Item 7. Certain Relationships and Related Transactions.
- --------------------------------------------------------
No director, executive officer or nominee therefor of the Company, and no
owner of five percent or more of the Company's outstanding shares or any member
of their immediate family has entered into or proposed any transaction in which
the amount involved exceeds $60,000, except as discussed below. As previously
disclosed in the Company's Form S-1 which was subsequently withdrawn, the
initial shareholders of the Company were investor-participants in the licensor
of the Company's Biocatalyst license, Mortenson & Associates. The license
formed the basis for the Company's previous business plan. Under the license,
Mortenson & Associates was entitled to royalty payments under the license, with
benefits accruing to Mortenson & Associates' investor-participants. It is
highly unlikely that any benefits will accrue to such individuals in the future.
(See "Item 1, Description of Business - Biocatalyst License").
On March 17, 2000, Mortenson & Associates, the Company, and the Company's
sole shareholder, director, and officer, Douglas Roe, entered into a settlement
agreement filed herewith as Exhibit 6.1. As part of an overall settlement of
potential claims by the Company and Mr. Roe against Mortenson & Associates, Mr.
Roe received a license for Vitamineralherb.com which could have a potential
future value of more than $60,000. However, the value of the
Vitamineralherb.com license is dependent upon development of the license and
territory. (See "Item 1, Description of Business - Biocatalyst License").
Item 8. Description of Securities.
- -----------------------------------
The following description of the Company's capital stock is a summary of
the material terms of the Company's capital stock. This summary is subject to
and qualified in its entirety by the Company's articles of incorporation and
bylaws, which are included as exhibits to the registration statement of which
this prospectus forms a part, and by the applicable provisions of Nevada law.
The Company's authorized capital consists of 25,000,000 shares of common
stock, par value $.001 per share. Immediately prior to this offering, 2,500,000
shares were issued and outstanding. Each record holder of common stock is
entitled to one vote for each share held on all matters properly submitted to
the shareholders for their vote. The articles of incorporation do not permit
cumulative voting for the election of directors, and shareholders do not have
any preemptive rights to purchase shares in any future issuance of the Company's
common stock.
17
<PAGE>
Because the holders of shares of the Company's common stock do not have
cumulative voting rights, the holders of more than 50% of the Company's
outstanding shares, voting for the election of directors, can elect all of the
directors to be elected, if they so choose. In such event, the holders of the
remaining shares will not be able to elect any of the Company's directors.
The holders of shares of common stock are entitled to dividends, out of
funds legally available therefor, when and as declared by the Board of
Directors. The Board of Directors has never declared a dividend and does not
anticipate declaring a dividend in the future. In the event of liquidation,
dissolution or winding up of the affairs of the Company, holders are entitled to
receive, ratably, the net assets of the Company available to shareholders after
payment of all creditors.
All of the issued and outstanding shares of common stock are duly
authorized, validly issued, fully paid, and non-assessable. To the extent that
additional shares of the Company's common stock are issued, the relative
interests of existing shareholders may be diluted.
18
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity and Other
- -------------------------------------------------------------------------------
Shareholder Matters.
-------------------
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. Owing to the low price of the securities, many brokerage firms may not
be willing to effect transactions in the securities. Even if a purchaser finds a
broker willing to effect a transaction in the Company's common stock, the
combination of brokerage commissions, state transfer taxes, if any, and other
selling costs may exceed the selling price.
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. The Company may be unable to find a
market maker willing to sponsor the Company. If the Company does qualify for the
OTC Bulletin Board, shareholders may still find it difficult to dispose of, or
to obtain accurate quotations as to the market value of, the Company's
securities trading in the OTC market.
The Company's securities will also be subject to Securities and Exchange
Commission's "penny stock" rules. (See "Item 2, Management's Discussion and
Analysis or Plan of Operations - Outlook: Issues and Uncertainties - Securities
Regulation"). The penny stock rules may further affect the ability of owners
of the Company's shares to sell their securities in any market that may develop
for them. There may be a limited market for penny stocks, due to the regulatory
burdens on broker-dealers. The market among dealers may not be active.
Investors in penny stock often are unable to sell stock back to the dealer that
sold them the stock. The mark ups or commissions charged by the broker-dealers
may be greater than any profit a seller may make. Because of large dealer
spreads, investors may be unable to sell the stock immediately back to the
dealer at the same price the dealer sold the stock to the investor. In some
cases, the stock may fall quickly in value. Investors may be unable to reap any
profit from any sale of the stock, if they can sell it at all.
Holders.
As of March 21, 2000, there were 2,500,000 shares of common stock
outstanding, held by one shareholder of record.
Dividends.
19
<PAGE>
To date the Company has not paid any dividends on its common stock and does
not expect to declare or pay any dividends on such common stock in the
foreseeable future. Payment of any dividends will be dependent upon the
Company's future earnings, if any, its financial condition, and other factors as
deemed relevant by the Board of Directors.
Item 2. Legal Proceedings.
- ----------------------------
The Company is not a party to any pending legal proceeding or litigation
and none of its property is the subject of a pending legal proceeding. Further,
the Officers and Directors know of no legal proceedings against the Company or
its property contemplated by any governmental authority.
Item 3. Changes in and Disagreements with Accountants.
- --------------------------------------------------------
None.
Item 4. Recent Sales of Unregistered Securities.
- -------------------------------------------------
Since May 27, 1999, (the date of the Company's formation), the Company has
sold its Common Stock to the persons listed in the table below in transactions
summarized as follows:
<TABLE>
<CAPTION>
Shareholder Date Number of Shares Consideration Exemption
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J.P Beehner 6-18-99 250,000 /1/ /2/
- ----------------------------------------------------------------------------------------
Dorothy Mortenson 6-18-99 250,000 /1/ /2/
- ----------------------------------------------------------------------------------------
Laurent Barbudaux 7-01-99 200,000 $200 /3/
- ----------------------------------------------------------------------------------------
Marie M. Charles 7-01-99 200,000 $200 /3/
- ----------------------------------------------------------------------------------------
James R. Collins, D.V.M. 7-01-99 200,000 $200 /3/
- ----------------------------------------------------------------------------------------
Jock R. Collins, D.V.M. 7-01-99 200,000 $200 /3/
- ----------------------------------------------------------------------------------------
George R. Quan 7-01-99 200,000 $200 /3/
- ----------------------------------------------------------------------------------------
Roy Donovan Hinton, Jr. 7-01-99 200,000 $200 /3/
- ----------------------------------------------------------------------------------------
C.E. Kaiser 7-01-99 200,000 $200 /3/
- ----------------------------------------------------------------------------------------
David R. Mortenson 7-01-99 200,000 $200 /3/
- ----------------------------------------------------------------------------------------
Marsha Quan 7-01-99 200,000 $200 /3/
- ----------------------------------------------------------------------------------------
Darren Quan 7-01-99 200,000 $200 /3/
- ----------------------------------------------------------------------------------------
</TABLE>
/1/ Consideration consisted of pre-incorporation consulting services rendered
to the Registrant related to investigating and developing the Registrant's
proposed business plan and capital structure and completing the organization and
incorporation of the Registrant.
/2/ Sale made in reliance upon exemption from registration under Rule 506 of
Regulation D, and sections 3(b) and 4(2) of the Securities Act of 1933 due to
the shareholders being Cambridge
20
<PAGE>
Creek's founders and serving as its initial management, and the limited number
of investors (two).
/3/ Sale made in reliance upon exemption from registration under Rule 504 of
Regulation D and section 3(b) of the Securities Act of 1933. The Company's
shares were valued at $0.001 per share, and they were issued to accredited
investors according to an exemption from registration under Texas law that
permits general solicitation and general advertising so long as sales are made
only to accredited investors. Texas law defines "accredited investor" as a
natural person whose individual net worth, or joint net worth with the person's
spouse, at the time of purchase exceeds $1 million, or whose income during the
past two years exceeds $200,000 individually or $300,000 jointly with spouse and
who expects to continue the same income level in the current year. If the
exemption under Rule 504 of Regulation D is not available, the Company believes
that the issuance was also exempt under Rule 506 of Regulation D and Sections
3(b) and 4(2) under the Securities Act of 1933 due to limiting the manner of the
offering, promptly filing notices of sales, and limiting the issuance of shares
to a small number of accredited investors (ten).
Lock Up Agreement
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's legal counsel 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.
Reports to Stockholders
The Company plans to furnish its stockholders with an annual report for
each fiscal year containing financial statements audited by its independent
certified public accountants. Additionally, the Company may, in its sole
discretion, issue unaudited quarterly or other interim reports to its
stockholders when it deems appropriate. The Company intends to comply with the
periodic reporting requirements of the Securities Exchange Act of 1934 for so
long as it is subject to those requirements.
Item 5. Indemnification of Directors and Officers.
- --------------------------------------------------
In accordance with Nevada law, the Company's Articles of Incorporation,
filed as Exhibit 2.1, provide that the Company may indemnify a person who is a
party or threatened to be made a party to an action, suit or proceeding by
reason of the fact that he or she is an officer, director, employee or agent of
the Company, against such person's costs and expenses incurred in connection
with such action so long as he or she has acted in good faith and in a manner
which he or she reasonably believed to be in, or not opposed to, the best
interests of the Company, and, in the case of criminal actions, had no
reasonable cause to believe his or her conduct was
21
<PAGE>
unlawful. Nevada law requires a corporation to indemnify any such person who is
successful on the merits or defense of such action against costs and expenses
actually and reasonably incurred in connection with the action.
The bylaws of the Company, filed as Exhibit 2.2, provide that the Company
will indemnify its officers and directors for costs and expenses incurred in
connection with the defense of actions, suits, or proceedings against them on
account of their being or having been directors or officers of the Company,
absent a finding of negligence or misconduct in office. The Company's Bylaws
also permit the Company to maintain insurance on behalf of its officers,
directors, employees and agents against any liability asserted against and
incurred by that person whether or not the Company has the power to indemnify
such person against liability for any of those acts.
Conflicts of Interest
The officer and director of the Company will not devote more than a portion
of his time to the affairs of the Company. There will be occasions when the time
requirements of the Company's business conflict with the demands of his other
business and investment activities. Such conflicts may require that the Company
attempt to employ additional personnel. There is no assurance that the services
of such persons will be available or that they can be obtained upon terms
favorable to the Company.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of interest
in favor of the Company could result in liability of management to the Company.
However, any attempt by shareholders to enforce a liability of management to the
Company would most likely be prohibitively expensive and time consuming.
22
<PAGE>
PART F/S
Financial Statements
Index to Financial Statements
Cambridge Creek Companies, Ltd.
(A Development Stage Company)
<TABLE>
<CAPTION>
Index
<S> <C>
Independent Auditor's Report......................................... F-1
Balance Sheet........................................................ F-2
Statement of Operations.............................................. F-3
Statement of Cash Flows.............................................. F-4
Statement of Stockholders' Equity.................................... F-5
Notes to the Financial Statements............................. F-6 to F-7
</TABLE>
<PAGE>
[LETTERHEAD OF E/T/P/A]
Independent Auditor's Report
----------------------------
To the Board of Directors
Cambridge Creek Companies, Ltd.
(A Development Stage Company)
We have audited the accompanying balance sheet of Cambridge Creek Companies,
Ltd. (A Development Stage Company) as of February 28, 2000 and the related
statements of operations, stockholders' equity and cash flows for the period
from May 27, 1999 (Date of Inception) to February 28, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of Cambridge Creek Companies, Ltd. (A
Development Stage Company), as of February 28, 2000, and the results of its
operations and its cash flows for the period from May 27, 1999 (Date of
Inception) to February 28, 2000, in conformity with U.S. generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has not generated any revenues or conducted any
operations since inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also discussed in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Elliott Tulk Pryce Anderson
CHARTERED ACCOUNTANTS
Vancouver, Canada
March 16, 2000
F-1
<PAGE>
Cambridge Creek Companies, Ltd.
(A Development Stage Company)
Balance Sheet
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
February 28,
2000
$
<S> <C>
Assets
License (Note 3) -
======
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable 1,200
------
Contingent Liability (Note 1)
Stockholders' Equity
Common Stock, 25,000,000 shares authorized with a par value
of $.001; 2,500,000 shares issued and outstanding 2,500
Additional Paid in Capital 155
Deficit Accumulated During the Development Stage (3,855)
------
(1,200)
------
-
======
</TABLE>
F-2
(The accompanying notes are an integral
part of the financial statements)
<PAGE>
Cambridge Creek Companies, Ltd.
(A Development Stage Company)
Statement of Operations
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
From May 27, 1999
(Date of Inception)
to February 28, 2000
$
<S> <C>
Revenues -
------
Expenses
Amortization 1,167
License written-off 833
Organization expenses 655
Transfer agent 1,200
------
3,855
------
Net Loss (3,855)
======
</TABLE>
F-3
(The accompanying notes are an integral
part of the financial statements)
<PAGE>
Cambridge Creek Companies, Ltd.
(A Development Stage Company)
Statement of Cash Flows
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
From May 27, 1999
(Date of Inception)
to February 28, 2000
$
<S> <C>
Cash Flows to Operating Activities
Net loss (3,855)
Non-cash items 2,155
Accounts payable 1,200
------
Net Cash Used by Operating Activities (500)
------
Cash Flows from Financing Activities
Increase in shares issued 500
------
Net Cash Provided by Financing Activities 500
------
Change in cash -
Cash - beginning of period -
------
Cash - end of period -
======
Non-Cash Financing Activities
A total of 2,000,000 shares were issued at
a fair market value of $0.001 per share for
the acquisition of a License (Note 3) 2,000
Organization costs paid for by a director
for no consideration treated as additional
paid in capital 155
------
2,155
======
Supplemental Disclosures
Interest paid -
Income tax paid -
</TABLE>
F-4
(The accompanying notes are an integral
part of the financial statements)
<PAGE>
Cambridge Creek Companies, Ltd.
(A Development Stage Company)
Statement of Stockholders' Equity
From May 27, 1999 (Date of Inception) to February 28, 2000
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
Deficit
Accumulated
During the
Common Stock Development
Shares Amount Stage
# $ $
<S> <C> <C> <C>
Balance - May 27, 1999 (Date of Inception) - - -
Stock issued for $500 of organizational expenses 500,000 500 -
Additional paid in capital for organizational expenses
incurred by a director on behalf of the Company - 155 -
Stock issued for "The Biocatalyst License" at a fair
market value of $0.001 per share 2,000,000 2,000 -
Net loss for the period - - (3,855)
--------- ------ -------
Balance - February 28, 2000 2,500,000 2,655 (3,855)
========= ====== =======
</TABLE>
F-5
(The accompanying notes are an integral
part of the financial statements)
<PAGE>
Cambridge Creek Companies, Ltd.
(A Development Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
1. Development Stage Company
Cambridge Creek Companies, Ltd. herein (the "Company") was incorporated in
the State of Nevada, U.S.A. on May 27, 1999. The Company acquired a license
to market and distribute a product. As discussed in Note 3, this license is
in jeopardy and the Company has retained the right to sue the vendor.
The Company's new business plan is as a "blank check" company. Under the
Securities Act of 1933, a blank check company is defined as 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.
In a development stage company, management devotes most of its activities
in investigating business opportunities. Planned principal activities have
not yet begun. The ability of the Company to emerge from the development
stage with respect to any planned principal business activity is dependent
upon its successful efforts to raise additional equity financing and find
an appropriate merger candidate. There is no guarantee that the Company
will be able to raise any equity financing or find an appropriate merger
candidate. There is substantial doubt regarding the Company's ability to
continue as a going concern.
2. Summary of Significant Accounting Policies
(a) Year end
The Company's fiscal year end is February 28.
(b) Licenses
Costs to acquire licenses are capitalized as incurred. These costs are
amortized on a straight-line basis over their remaining estimated
useful lives.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of
three months or less at the time of issuance to be cash equivalents.
(d) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the periods. Actual results could differ from
those estimates.
3. License
The Company's only asset is a license to distribute and produce an oxygen
enriched water product, called "Biocatalyst," for remediation of sewage and
waste water in septic tanks and waste water treatment facilities, and for
other similar uses, and the rights accruing from this license. The
Company's original business plan was to determine the feasibility of the
Biocatalyst sewage and waste remediation application, and, if Biocatalyst
proved to be feasible for this application, become a Biocatalyst producer.
The Company acquired the three-year license from Mortenson & Associates on
July 1, 1999 by issuing 2,000,000 shares at a fair market value of $.001 or
$2,000. The general partner of Mortenson & Associates is also a spouse of a
former director and officer of the Company. Mortenson & Associates acquired
its right to sublicense Biocatalyst to the Company from NW Technologies.
F-6
<PAGE>
3. License (continued)
In December, 1999, David R. Mortenson, Mortenson & Associates' principal,
notified the Company that he was involved in a legal dispute with NW
Technologies, and would be unable to fulfill his obligations under the
license to the Company. As a result, the Company's ability to implement its
business plan was seriously undermined. On February 18, 2000, Mortenson &
Associates, the Company, and the Company's sole shareholder, Douglas Roe,
entered into a settlement agreement. Under the terms of the settlement
agreement, Mortenson & Associates' affiliate, Vitamineralherb.com will
grant to Douglas Roe a license to distribute vitamins and similar products
in part for his agreement not to pursue his individual claims against
Mortenson & Associates. The settlement agreement provides that Mortenson
will prosecute his claims against NW Technologies diligently, with a goal
toward recovering the Biocatalyst rights. Pursuant to the settlement
agreement, the Company has retained its right to prosecute its claims
against Mortenson & Associates for breach of contract. The Company has no
plans to pursue a claim at this time.
February 28,
2000
$
License
Cost 2,000
Less amortization (1,167)
Less amount written-off (833)
------
-
======
4. Related Party Transaction
The License referred to in Note 3 was sold to the Company by a partnership
whose general manager is the spouse of a former officer and director of the
Company for consideration of 2,000,000 shares for total fair market
consideration of $2,000. These shares were paid evenly to the ten partners.
F-7
<PAGE>
PART III
Item 1. Index to Exhibits
- --------------------------
<TABLE>
<CAPTION>
Exhibit
Number Name
<S> <C>
2.1 Articles of Incorporation
2.2 Bylaws
3.1 Specimen Share Certificate for Common Stock
3.2 Lock Up Agreement
6.1 Settlement Agreement
6.2 License Agreement
27.1 Financial Data Schedule
</TABLE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
<TABLE>
<S> <C>
/s/ Douglas Roe March 21, 2000
- ---------------------------------------------------------- ---------------
Douglas Roe, President, Secretary, Treasurer, and Director (Date)
</TABLE>
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EXHIBIT 2.1
ARTICLES OF INCORPORATION
of
CAMBRIDGE CREEK COMPANIES, LTD.
The undersigned natural person of the age of eighteen years or more, acting
as incorporator of a corporation under and pursuant to the laws of the State of
Nevada, hereby adopts the following Articles of Incorporation for such
corporation:
ARTICLE I
The name of the corporation is CAMBRIDGE CREEK COMPANIES, LTD.
ARTICLE II
The principal office of this corporation is to be at 50 West Liberty Street
#880, Reno, 89501, State of Nevada. The Nevada Agency and Trust Company is
hereby named as Resident Agent of this corporation and in charge of its said
office in Nevada. The registered office is the same as the principal office.
ARTICLE III
The nature of the business, objects and purposes to be transacted,
promoted, or carried on by the corporation are:
A. To conduct any lawful business, to promote any lawful purpose, and to
engage in any lawful act or activity for which corporations maybe organized
under the General Corporation Law of the State of Nevada and to act in
every kind of fiduciary capacity. and generally to do all things necessary
or convenient which are incident to or which a natural person might or
could do.
B. To purchase, receive, take by grant, gift, devise, bequest, or
otherwise. lease, or otherwise acquire, own, hold, improve, employ, use and
otherwise deal in and with real or personal property, or any interest
therein, wherever situated, and to sell, convey, lease, exchange, transfer
or otherwise dispose of, or mortgage or pledge, all or any of its property
and assets, or any interests therein, wherever situated.
C. To engage generally in the real estate business as principal, and in
any lawful capacity, and generally to take, lease, purchase, or otherwise
acquire, and to own, use, hold, sell, convey, exchange, lease, mortgage,
work, clear, improve, develop, divide, and otherwise handle, manage,
operate, deal in and dispose of mining claims, oil leases, oil and gas
wells,
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real estate, real property, lands, multiple-dwelling structures, houses,
buildings and other works and any interest or right therein; to take,
lease, purchase or otherwise handle or acquire, and to own, use, hold,
sell, convey, exchange, hire, lease, pledge, mortgage, and otherwise
handle, and deal in and dispose of, as principal agent or in any lawful
capacity, such personal property, chattels, chattels real, rights,
easements, privileges, causes in action, notes, bonds, mortgages, and
securities as may lawfully be acquired, held or disposed of and to acquire,
purchase, sell, assign, transfer, dispose of and generally deal in and with
as principal, agent, broker, and in any lawful capacity, mortgages and
other interests in real, personal, and mixed properties; to carry on a
general oil exploration, mining exploration and management business as
principal, agent, representative, contractor, subcontractor, and in any
other lawful capacity. To manufacture, purchase or acquire in any lawful
manner and to hold, own, mortgage, pledge, sell, transfer, or in any manner
dispose of, and to deal and trade in goods, wares, merchandise, and
property of any and every class and description, and in any part of the
world.
D. To apply for, register, obtain, purchase, lease, take licenses in
respect of or otherwise acquire, and to hold, own, use, operate, develop,
enjoy, turn to account, grant licenses and immunities in respect of,
manufacture under and to introduce, sell, assign, mortgage, pledge or
otherwise dispose of and, in any manner deal with and contract with
reference to:
1. Inventions, devices, formulas, processes, improvements and
modifications thereof;
2. Letters patent, patent rights, patented processes, rights, designs, and
similar rights, trademarks, trade names, trade symbols and other
indications or origin and ownership granted by or recognized under the laws
of the United States of America, any state or subdivision thereof, and any
commonwealth, territory, possession, dependency, colony, possession agency
or instrumentality of the United States of America and of any foreign
country, and all rights connected therewith or appertaining thereto.
3. Franchises licenses, grants and concessions.
E. To make, enter into, perform and carry out contracts of every kind and
description with any person, firm, association, corporation or government
or agency or instrumentality thereof.
F. To lend money in furtherance of its corporate purposes and to invest
and reinvest its funds from time to time to such extent, to such persons,
firms, associations, corporations, governments or agencies or
instrumentalities thereof, and on such terms and on such security, if any,
as the Board of Directors of the corporation may determine and direct any
officer to complete.
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G. To borrow money without limit as to amount and at such rates of
interest as it may determine; from time to time to issue and sell its own
securities, including its shares of stock, notes, bonds, debentures, and
other obligations, in such amounts, on such terms and conditions, for such
purposes and for such prices, now or hereafter permitted by the laws of the
State of Nevada and by the Board of Directors of the corporation as they
may determine; and to secure any of its obligations by mortgage, pledge or
other encumbrance of any or all of its property, franchises and income.
H. To be a promoter or manager of other corporations of any type or kind;
and to participate with others in any corporation, partnership, limited
partnership, joint venture, or other association of any kind, or in any
transaction, undertaking or arrangement which the corporation would have
power to conduct by itself, whether or not such participation involves
sharing or delegation of control with or to others.
I. To promote and exercise all or any part of the foregoing purposes and
powers in and all parts of the world, and to conduct its business in all or
any branches in any lawful capacity.
The foregoing enumeration of specific purposes and powers shall not be held
to limit or restrict in any manner the purposes and powers of the
corporation by references to or inference from the terms or provisions of
any other clause, but shall be regarded as independent purposes.
ARTICLE IV
The aggregate number of shares which the corporation shall have authority
to issue is Twenty-five million shares of common stock having a par value of
$0.001 each.
No shareholder of the corporation shall have the right of cumulative voting
at any election of directors or upon any other matter.
No holder of securities of the corporation shall be entitled as a matter of
right, preemptive or otherwise, to subscribe for or purchase any securities of
the corporation now or hereafter authorized to be issued, or securities held in
the treasury of the corporation, whether issued or sold for cash or other
consideration or as a share dividend or otherwise. Any such securities may be
issued or disposed of by the board of directors to such persons and on such
terms as in its discretion it shall deem advisable.
ARTICLE V
Any action required to, or that may, be taken at any annual or special
meeting of shareholders may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holder or holders of
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shares having not less than the minimum number of votes that would be necessary
to take such action at a meeting at which the holders of all shares entitled to
vote on the action were present and voted.
ARTICLE VI
The members of the governing board shall be styled DIRECTORS and the number of
such Directors shall be not less than one (l), or more than five (5). The first
board of directors shall be Two Members whose names and post office addresses
are as follows:
J. P. Beehner
PO Box 2370
Alvin TX 77512-2370
Dorothy A. Mortenson
PO Box 5034
Alvin, Texas 77512-5034
ARTICLE VII
The initial number of stockholders will be two (2). Additional stockholders may
be obtained. The number of directors may be changed as provided in N.R.S.
78.330.
ARTICLE VIII
A. No director of the corporation shall be liable to the corporation or
any of its shareholders for monetary damages for an act or omission in the
director's capacity as a director, except that this Article VIII shall not
authorize the elimination or limitation of liability of a director of the
corporation to the extent the director is found liable for: (i) a breach of such
director's duty of loyalty to the corporation or its shareholders; (ii) an act
or omission not in good faith that constitutes a breach of duty of such director
to the corporation or an act or omission that involves intentional misconduct or
a knowing violation of the law; (iii) a transaction from which such director
received an improper benefit, whether or not the benefit resulted from an action
taken within the scope of the director's office; or (iv) an act or omission for
which the liability of a director is expressly provided by an applicable
statute.
B. The capital stock of this corporation after the amount of the
subscription price or par value has been paid in, shall not be subject to
assessment to pay debts of this corporation and no stock issued as fully paid up
shall ever be assessable or assessed and the Articles of Incorporation shall not
be amended in this particular.
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ARTICLE IX
This corporation is to have perpetual existence.
J. P. Beehner, the undersigned, being the original incorporator for the
purpose of forming a corporation to do business both within and without the
state of Nevada, and in pursuance of the General Corporation Law of the State of
Nevada, effective March 31, 1925 and as subsequently amended do make and file
this certificate, hereby declares and certifies that the facts herein above
stated are true.
This 24th day of May, 1999.
---- --- --
/s/ J. P. Beehner
-----------------------------------
Address: P.O. Box 2370
Alvin TX 77512-2370
State of Nevada
City of Reno
On May 24, 1999 before me, the undersigned, a Notary Public in and for said
State, personally appeared J. P. Beehner to me known to be the person whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same.
WITNESS my hand and official seal.
/s/ Wanda Cunningham
-----------------------------------
Notary Public
State of Texas
My commission expires April 9, 2003
[Notary Seal]
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<PAGE>
EXHIBIT 2.2
================================================================================
BYLAWS OF
CAMBRIDGE CREEK COMPANIES, LTD.
================================================================================
CONTENTS OF INITIAL BYLAWS
<TABLE>
<CAPTION>
ARTICLE PAGE
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1.00 CORPORATE CHARTER AND BYLAWS
1.01 Corporate Charter Provisions................................. 4
1.02 Registered Agent or Office-Requirement
of Filing Changes with Secretary of State.................... 4
1.03 Initial Business Office...................................... 4
1.04 Amendment of Bylaws.......................................... 4
2.00 DIRECTORS AND DIRECTORS' MEETINGS
2.01 Action Without Meeting....................................... 5
2.02 Telephone Meetings........................................... 5
2.03 Place of Meetings............................................ 5
2.04 Regular Meetings............................................. 5
2.05 Call of Special Meeting...................................... 5
2.06 Quorum....................................................... 6
2.07 Adjournment-Notice of Adjourned Meetings..................... 6
2.08 Conduct of Meetings.......................................... 6
2.09 Powers of the Board of Directors............................. 6
2.10 Board Committees-Authority to Appoint........................ 6
2.11 Transactions with Interested Directors....................... 7
2.12 Number of Directors.......................................... 7
2.13 Term of Office............................................... 7
2.14 Removal of Directors......................................... 7
2.15 Vacancies.................................................... 7
2.15(a) Declaration of Vacancy.............................. 8
2.15(b) Filling Vacancies by Directors...................... 8
2.15(c) Filling Vacancies by Shareholders................... 8
2.16 Compensation................................................. 8
2.17 Indemnification of Directors and Officers.................... 8
2.18 Insuring Directors, Officers, and Employees.................. 8
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE PAGE
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<C> <S> <C>
3.00 SHAREHOLDERS' MEETINGS
3.01 Action Without Meeting....................................... 9
3.02 Telephone Meetings........................................... 9
3.03 Place of Meetings............................................ 9
3.04 Notice of Meetings........................................... 9
3.04 Voting List.................................................. 9
3.05 Votes per Share.............................................. 10
3.07 Cumulative Voting............................................ 10
3.08 Proxies...................................................... 10
3.09 Quorum....................................................... 11
3.09(a) Quorum of Shareholders.............................. 11
3.09(b) Adjourn for Lack or Loss of Quorum.................. 11
3.10 Voting by Voice or Ballot.................................... 11
3.11 Conduct of Meetings.......................................... 11
3.12 Annual Meetings.............................................. 11
3.13 Failure to Hold Annual Meeting............................... 12
3.14 Special Meetings............................................. 12
4.00 OFFICERS
4.01 Title and Appointment........................................ 12
4.01(a) Chairman............................................ 12
4.01(b) President........................................... 12
4.01(c) Vice President...................................... 13
4.01(d) Secretary........................................... 13
4.01(e) Treasurer........................................... 13
4.01(f) Assistant Secretary or Assistant Treasurer.......... 14
4.02 Removal and Resignation...................................... 14
4.03 Vacancies.................................................... 14
4.04 Compensation................................................. 14
5.00 AUTHORITY TO EXECUTE INSTRUMENTS
5.01 No Authority Absent Specific Authorization................... 14
5.02 Execution of Certain Instruments............................. 15
6.00 ISSUANCE AND TRANSFER OF SHARES
6.01 Classes and Series of Shares................................. 15
6.02 Certificates for Fully Paid Shares........................... 15
6.03 Consideration for Shares..................................... 15
6.04 Replacement of Certificates.................................. 16
</TABLE>
2
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<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<C> <S> <C>
6.05 Signing Certificates-Facsimile Signatures.................... 16
6.06 Transfer Agents and Registrars............................... 16
6.07 Conditions of Transfer....................................... 16
6.08 Reasonable Doubts as to Right to Transfer.................... 16
7.00 CORPORATE RECORDS AND ADMINISTRATION
7.01 Minutes of Corporate Meetings................................ 17
7.02 Share Register............................................... 17
7.03 Corporate Seal............................................... 17
7.04 Books of Account............................................. 17
7.05 Inspection of Corporate Records.............................. 18
7.06 Fiscal Year.................................................. 18
7.07 Waiver of Notice............................................. 18
8.00 ADOPTION OF INITIAL BYLAWS......................................... 18
</TABLE>
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ARTICLE ONE-CORPORATE CHARTER AND BYLAWS
1.01 CORPORATE CHARTER PROVISIONS
The Corporation's Charter authorizes Twenty-five million (25,000,000)
shares to be issued. The officers and transfer agents issuing shares of the
Corporation shall ensure that the total number of shares outstanding at any
given time does not exceed this number. Such officers and agents shall advise
the Board at least annually of the authorized shares remaining available to be
issued. No shares shall be issued for less than the par value stated in the
Charter. Each Charter provision shall be observed until amended by Restated
Articles or Articles of Amendment duly filed with the Secretary of State.
1.02 REGISTERED AGENT AND OFFICE-REQUIREMENT OF FILING CHANGES WITH SECRETARY
OF STATE
The address of the Registered Office provided in the Articles of
Incorporation, as duly filed with the Secretary of State for the State of
Nevada, is: 50 West Liberty Street, Suite 880, Reno, NV 89501.
The name of the Registered Agent of the Corporation at such address, as set
forth in its Articles of Incorporation, is: The Nevada Agency and Trust Company.
The Registered Agent or Office may be changed by filing a Statement of
Change of Registered Agent or Office or Both with the Secretary of State, and
not otherwise. Such filing shall be made promptly with each change. Arrangements
for each change in Registered Agent or Office shall ensure that the Corporation
is not exposed to the possibility of a default judgment. Each successive
Registered Agent shall be of reliable character and well informed of the
necessity of immediately furnishing the papers of any lawsuit against the
Corporation to its attorneys.
1.03 INITIAL BUSINESS OFFICE
The address of the initial principal business office of the Corporation is
hereby established as: 2400 Loop 35 #1502, Alvin, Texas 77511.
The Corporation may have additional business offices within the State of
Nevada, and where it may be duly qualified to do business outside of Nevada, as
the Board of Directors may from time to time designate or the business of the
Corporation may require.
1.04 AMENDMENT OF BYLAWS
The Shareholders or Board of Directors, subject to any limits imposed by
the Shareholders, may amend or repeal these Bylaws and adopt new Bylaws. All
amendments shall be upon advice of counsel as to legality, except in emergency.
Bylaw changes shall take effect upon adoption unless otherwise specified. Notice
of Bylaws changes shall be given in or before notice given of the first
Shareholders' meeting following their adoption.
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ARTICLE TWO-DIRECTORS AND DIRECTORS' MEETINGS
2.01 ACTION BY CONSENT OF BOARD WITHOUT MEETING
Any action required or permitted to be taken by the Board of Directors may
be taken without a meeting, and shall have the same force and effect as a
unanimous vote of Directors, if all members of the Board consent in writing to
the action. Such consent may be given individually or collectively.
2.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws and by the
Business Corporation Act, Directors may participate in and hold a meeting by
means of conference call or similar communication by which all persons
participating can hear each other. Participation in such a meeting shall
constitute presence in person at such meeting, except participation for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
2.03 PLACE OF MEETINGS
Meetings of the Board of Directors shall be held at the business office of
the Corporation or at such other place within or without the State of Nevada as
may be designated by the Board.
2.04 REGULAR MEETINGS
Regular meetings of the Board of Directors shall be held, without call or
notice, immediately following each annual Shareholders' meeting, and at such
other regularly repeating times as the Directors may determine.
2.05 CALL OF SPECIAL MEETING
Special meetings of the Board of Directors for any purpose may be called at
any time by the President or, if the President is absent or unable or refuses to
act, by any Vice President or any two Directors. Written notices of the special
meetings, stating the time and place of the meeting, shall be mailed ten days
before, or telegraphed or personally delivered so as to be received by each
Director not later than two days before, the day appointed for the meeting.
Notice of meetings need not indicate an agenda. Generally, a tentative agenda
will be included, but the meeting shall not be confined to any agenda included
with the notice.
Meetings provided for in these Bylaws shall not be invalid for lack of
notice if all persons entitled to notice consent to the meeting in writing or
are present at the meeting and do not object to the notice given. Consent may be
given either before or after the meeting.
Upon providing notice, the Secretary or other officer sending notice shall
sign and file in the Corporate Record Book a statement of the details of the
notice given to each Director. If
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such statement should later not be found in the Corporate Record Book, due
notice shall be presumed.
2.06 QUORUM
The presence throughout any Directors' meeting, or adjournment thereof, of
a majority of the authorized number of Directors shall be necessary to
constitute a quorum to transact any business, except to adjourn. If a quorum is
present, every act done or resolution passed by a majority of the Directors
present and voting shall be the act of the Board of Directors.
2.07 ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS
A quorum of the Directors may adjourn any Directors' meeting to meet again
at a stated hour on a stated day. Notice of the time and place where an
adjourned meeting will be held need not be given to absent Directors if the time
and place is fixed at the adjourned meeting. In the absence of a quorum, a
majority of the Directors present may adjourn to a set time and place if notice
is duly given to the absent members, or until the time of the next regular
meeting of the Board.
2.08 CONDUCT OF MEETINGS
At every meeting of the Board of Directors, the Chairman of the Board, if
there is such an officer, and if not, the President, or in the President's
absence, a Vice President designated by the President, or in the absence of such
designation, a Chairman chosen by a majority of the Directors present, shall
preside. The Secretary of the Corporation shall act as Secretary of the Board of
Directors' meetings. When the Secretary is absent from any meeting, the Chairman
may appoint any person to act as Secretary of that meeting.
2.09 POWERS OF THE BOARD OF DIRECTORS
The business and affairs of the Corporation and all corporate powers shall
be exercised by or under authority of the Board of Directors, subject to
limitations imposed by law, the Articles of Incorporation, any applicable
Shareholders' agreement, and these Bylaws.
2.10 BOARD COMMITTEES-AUTHORITY TO APPOINT
The Board of Directors may designate an executive committee and one or more
other committees to conduct the business and affairs of the Corporation to the
extent authorized. The Board shall have the power at any time to change the
powers and membership of, fill vacancies in, and dissolve any committee. Members
of any committee shall receive such compensation as the Board of Directors may
from time to time provide. The designation of any committee and the delegation
of authority thereto shall not operate to relieve the Board of Directors, or any
member thereof, of any responsibility imposed by law.
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2.11 TRANSACTIONS WITH INTERESTED DIRECTORS
Any contract or other transaction between the Corporation and any of its
Directors (or any corporation or firm in which any of its Directors are directly
or indirectly interested) shall be valid for all purposes notwithstanding the
presence of that Director at the meeting during which the contract or
transaction was authorized, and notwithstanding the Directors' participation in
that meeting. This section shall apply only if the contract or transaction is
just and reasonable to the Corporation at the time it is authorized and
ratified, the interest of each Director is known or disclosed to the Board of
Directors, and the Board nevertheless authorizes or ratifies the contract or
transaction by a majority of the disinterested Directors present. Each
interested Director is to be counted in determining whether a quorum is present,
but shall not vote and shall not be counted in calculating the majority
necessary to carry the vote. This section shall not be construed to invalidate
contracts or transactions that would be valid in its absence.
2.12 NUMBER OF DIRECTORS
The number of Directors of this Corporation shall be two. No Director need
be a resident of Nevada or a Shareholder. The number of Directors may be
increased or decreased from time to time by amendment to these Bylaws. Any
decrease in the number of Directors shall not have the effect of shortening the
tenure which any incumbent Director would otherwise enjoy.
2.13 TERM OF OFFICE
Directors shall be entitled to hold office until their successors are
elected and qualified. Election for all Director positions, vacant or not
vacant, shall occur at each annual meeting of the Shareholders and may be held
at any special meeting of Shareholders called specifically for that purpose.
2.14 REMOVAL OF DIRECTORS
The entire Board of Directors or any individual Director may be removed
from office by a vote of Shareholders holding a majority of the outstanding
shares entitled to vote at an election of Directors. However, if less than the
entire Board is to be removed, no one of the Directors may be removed if the
votes cast against his removal would be sufficient to elect him if then
cumulatively voted at an election of the entire Board of Directors. No director
may be so removed except at an election of the class of Directors of which he is
a part. If any or all Directors are so removed, new Directors may be elected at
the same meeting. Whenever a class or series of shares is entitled to elect one
or more Directors under authority granted by the Articles of Incorporation, the
provisions of this Paragraph apply to the vote of that class or series and not
to the vote of the outstanding shares as a whole.
2.15 VACANCIES
Vacancies on the Board of Directors shall exist upon the occurrence of any
of the following events: (a) the death, resignation, or removal of any Director;
(b) an increase in the authorized number of Directors; or (c) the failure of the
Shareholders to elect the full authorized
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number of Directors to be voted for at any annual, regular, or special
Shareholders' meeting at which any Director is to be elected.
2.15(a) DECLARATION OF VACANCY
A majority of the Board of Directors may declare vacant the office of a
Director if the Director: (a) is adjudged incompetent by a court order; (b) is
convicted of a crime involving moral turpitude; (c) or fails to accept the
office of Director, in writing or by attending a meeting of the Board of
Directors, within thirty (30) days of notice of election.
2.15(b) FILLING VACANCIES BY DIRECTORS
Vacancies other than those caused by an increase in the number of Directors
may be filled temporarily by majority vote of the remaining Directors, though
less than a quorum, or by a sole remaining Director. Each Director so elected
shall hold office until a qualified successor is elected at a Shareholders'
meeting.
2.15(c) FILLING VACANCIES BY SHAREHOLDERS
Any vacancy on the Board of Directors, including those caused by an
increase in the number of Directors shall be filled by the Shareholders at the
next annual meeting or at a special meeting called for that purpose. Upon the
resignation of a Director tendered to take effect at a future time, the Board or
the Shareholders may elect a successor to take office when the resignation
becomes effective.
2.16 COMPENSATION
Directors shall receive such compensation for their services as Directors
as shall be determined from time to time by resolution of the Board. Any
Director may serve the Corporation in any other capacity as an officer, agent,
employee, or otherwise, and receive compensation therefor.
2.17 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Board of Directors shall authorize the Corporation to pay or reimburse
any present or former Director or officer of the Corporation any costs or
expenses actually and necessarily incurred by that officer in any action, suit,
or proceeding to which the officer is made a party by reason of holding that
position, provided, however, that no officer shall receive such indemnification
if finally adjudicated therein to be liable for negligence or misconduct in
office. This indemnification shall extend to good-faith expenditures incurred in
anticipation of threatened or proposed litigation. The Board of Directors may in
proper cases, extend the indemnification to cover the good-faith settlement of
any such action, suit, or proceeding, whether formally instituted or not.
2.18 INSURING DIRECTORS, OFFICERS, AND EMPLOYEES
The Corporation may purchase and maintain insurance on behalf of any
Director, officer, employee, or agent of the Corporation, or on behalf of any
person serving at the request of the Corporation as a Director, officer,
employee, or agent of another corporation, partnership, joint
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venture, trust, or other enterprise, against any liability asserted against that
person and incurred by that person in any such corporation, whether or not the
Corporation has the power to indemnify that person against liability for any of
those acts.
ARTICLE THREE-SHAREHOLDERS' MEETINGS
3.01 ACTION WITHOUT MEETING
Any action that may be taken at a meeting of the Shareholders under any
provision of the Nevada Business Corporation Act may be taken without a meeting
if authorized by a consent or waiver filed with the Secretary of the Corporation
and signed by all persons who would be entitled to vote on that action at a
Shareholders' meeting. Each such signed consent or waiver, or a true copy
thereof, shall be placed in the Corporate Record Book.
3.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws and by the
Business Corporation Act, Shareholders may participate in and hold a meeting by
means of conference call or similar communication by which all persons
participating can hear each other. Participation in such a meeting shall
constitute presence in person at such meeting, except participation for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
3.03 PLACE OF MEETINGS
Shareholders' meetings shall be held at the business office of the
Corporation, or at such other place within or without the State of Nevada as may
be designated by the Board of Directors or the Shareholders.
3.04 NOTICE OF MEETINGS
The President, the Secretary, or the officer or persons calling a
Shareholders' Meeting. shall give notice, or cause it to be given, in writing to
each Director and to each Shareholder entitled to vote at the meeting at least
ten (10) but not more than sixty (60) days before the date of the meeting. Such
notice shall state the place, day, and hour of the meeting, and, in case of a
special meeting, the purpose or purposes for which the meeting is called. Such
written notice may be given personally, by mail, or by other means. Such notice
shall be addressed to each recipient at such address as appears on the Books of
the Corporation or as the recipient has given to the Corporation for the purpose
of notice. Meetings provided for in these Bylaws shall not be invalid for lack
of notice if all persons entitled to notice consent to the meeting in writing or
are present at the meeting in person or by proxy and do not object to the notice
given, Consent may be given either before or after the meeting. Notice of the
reconvening of an adjourned meeting is not necessary unless the meeting is
adjourned more than thirty days past the date stated in the notice, in which
case notice of the adjourned meeting shall be given as in the case of any
special meeting.
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Notice may be waived by written waivers signed either before or after the
meeting by all persons entitled to the notice.
3.05 VOTING LIST
At least ten (10), but not more than sixty (60), days before each
Shareholders' meeting, the officer or agent having charge of the Corporation's
share transfer books shall make a complete list of the Shareholders entitled to
vote at that meeting or any adjournment thereof, arranged in alphabetical order,
with the address and the number of shares held by each. The list shall be kept
on file at the Registered Office of the Corporation for at least ten (10) days
prior to the meeting, and shall be subject to inspection by any Director,
officer, or Shareholder at any time during usual business hours. The list shall
also be produced and kept open at the time and place of the meeting and shall be
subject, during the whole time of the meeting, to the inspection of any
Shareholder. The original share transfer books shall be prima facie evidence as
to the Shareholders entitled to examine such list or transfer books or to vote
at any meeting of Shareholders. However, failure to prepare and to make the list
available in the manner provided above shall not affect the validity of any
action taken at the meeting.
3.06 VOTES PER SHARE
Each outstanding share, regardless of class, shall be entitled to one (1)
vote on each matter submitted to a vote at a meeting of Shareholders, except to
the extent that the voting rights of the shares of any class or classes are
limited or denied pursuant to the Articles of Incorporation. A Shareholder may
vote in person or by proxy executed in writing by the Shareholder, or by the
Shareholder's duly authorized attorney-in-fact.
3.07 CUMULATIVE VOTING
Subject to any limitation stated in the Articles of Incorporation, every
Shareholder entitled to vote at any election of Directors may cumulate votes.
For this purpose, each Shareholder shall have a number of votes equal to the
number of Directors to be elected multiplied by the number of votes to which the
Shareholder's shares are entitled. The Shareholder may cast all these votes for
one candidate or may distribute the votes among any number of candidates. The
candidates receiving the highest number of votes are elected, up to the number
of vacancies to be filled. No Shareholder may cumulate votes unless that
Shareholder gives written notice of his or her intention to do so to the
Secretary of the Corporation on or before the day preceding the election at
which the votes will be cumulated. If any Shareholder gives written notice as
provided above, all Shareholders may cumulate their votes.
3.08 PROXIES
A Shareholder may vote either in person or by proxy executed in writing by the
Shareholder or his or her duly authorized attorney in fact. Unless otherwise
provided in the proxy or by law, each proxy shall be revocable and shall not be
valid after eleven (11) months from the date of its execution.
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3.09 QUORUM
3.09(a) QUORUM OF SHAREHOLDERS
As to each item of business to be voted on, the presence (in person or by
proxy) of the persons who are entitled to vote a majority of the outstanding
voting shares on that matter shall constitute the quorum necessary for the
consideration of the matter at a Shareholders' meeting. The vote of the holders
of a majority of the shares entitled to vote on the matter and represented at a
meeting at which a quorum is present shall be the act of the Shareholders'
meeting.
3.09(b) ADJOURNMENT FOR LACK OR LOSS OF QUORUM
No business may be transacted in the absence of a quorum, or upon the
withdrawal of enough Shareholders to leave less than a quorum, other than to
adjourn the meeting from time to time by the vote of a majority of the shares
represented at the meeting.
3.10 VOTING BY VOICE OR BALLOT
Elections for Directors need not be by ballot unless a Shareholder demands
election by ballot before the voting begins.
3.11 CONDUCT OF MEETINGS
Meetings of the Shareholders shall be chaired by the President, or, in the
President's absence, a Vice President designated by the President, or, in the
absence of such designation, any other person chosen by a majority of the
Shareholders of the Corporation present in person or by proxy and entitled to
vote. The Secretary of the Corporation, or, in the Secretary's absence, an
Assistant Secretary, shall act as Secretary of all meetings of the Shareholders.
In the absence of the Secretary or Assistant Secretary, the Chairman shall
appoint another person to act as Secretary of the meeting.
3.12 ANNUAL MEETINGS
The time, place, and date of the annual meeting of the Shareholders of the
Corporation, for the purpose of electing Directors and for the transaction of
any other business as may come before the meeting, shall be set from time to
time by a majority vote of the Board of Directors. If the day fixed for the
annual meeting shall be on a legal holiday in the State of Nevada, such meeting
shall be held on the next succeeding business day. If the election of Directors
is not held on the day thus designated for any annual meeting, or at any
adjournment thereof, the Board of Directors shall cause the election to be held
at a special meeting of the Shareholders as soon thereafter as possible.
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3.13 FAILURE TO HOLD ANNUAL MEETING
If, within any 13-month period, an annual Shareholders' Meeting is not
held, any Shareholder may apply to a court of competent jurisdiction in the
county in which the principal office of the Corporation is located for a summary
order that an annual meeting be held.
3.14 SPECIAL MEETINGS
A special Shareholders' meeting may be called at any time by. (a) the
President; (b) the Board of Directors; or (c) one or more Shareholders holding
in the aggregate one-tenth or more of all the shares entitled to vote at the
meeting. Such meeting may be called for any purpose. The party calling the
meeting may do so only by written request sent by registered mail or delivered
in person to the President or Secretary. The officer receiving the written
request shall within ten (10) days from the date of its receipt cause notice of
the meeting to be sent to all the Shareholders entitled to vote at such a
meeting. If the officer does not give notice of the meeting within ten (10) days
after the date of receipt of the written request, the person or persons calling
the meeting may fix the time of the meeting and give the notice. The notice
shall be sent pursuant to Section 3.04 of these Bylaws. The notice of a special
Shareholders' meeting must state the purpose or purposes of the meeting and,
absent consent of every Shareholder to the specific action taken, shall be
limited to purposes plainly stated in the notice, notwithstanding other
provisions herein.
ARTICLE FOUR-OFFICERS
4.01 TITLE AND APPOINTMENT
The officers of the Corporation shall be a President and a Secretary, as
required by law. The Corporation may also have, at the discretion of the Board
of Directors, a Chairman of the Board, one or more Vice Presidents, a Treasurer,
one or more Assistant Secretaries, and one or more Assistant Treasurers. Any
two or more offices, including President and Secretary may be held by one
person. All officers shall be elected by and hold office at the pleasure of the
Board of Directors, which shall fix the compensation and tenure of all officers.
4.01(a) CHAIRMAN OF THE BOARD
The Chairman, if there shall be such an officer, shall, if present, preside
at the meetings of the Board of Directors and exercise and perform such other
powers and duties as may from time to time be assigned to the Chairman by the
Board of Directors or prescribed by these Bylaws.
4.01(b) PRESIDENT
Subject to such supervisory powers, if any, as may be given to the
Chairman, if there is one, by the Board of Directors, the President shall be the
chief executive officer of the Corporation and shall, subject to the control of
the Board of Directors, have general supervision, direction, and control of the
business and officers of the Corporation. The President shall have the general
powers and duties of management usually vested in the office of President of a
corporation; shall have such other powers and duties as may be prescribed by the
Board of Directors or the Bylaws; and shall be ex officio a member of all
standing committees, including the executive committee, if any. In addition, the
President shall preside at all meetings of the
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Shareholders and in the absence of the Chairman, or if there is no Chairman, at
all meetings of the Board of Directors.
4.01(c) VICE PRESIDENT
Any Vice President shall have such powers and perform such duties as from time
to time may be prescribed by these Bylaws, by the Board of Directors, or by the
President. In the absence or disability of the President, the senior or duly
appointed Vice President, if any, shall perform all the duties of the President,
pending action by the Board of Directors when so acting, such Vice President
shall have all the powers of, and be subject to all the restrictions on, the
President.
4.01(d) SECRETARY
The Secretary shall:
(1) See that all notices are duly given in accordance with the provisions
of these Bylaws and as required by law. In case of the absence or
disability of the Secretary. or the Secretary's refusal or neglect to
act, notice may be given and served by an Assistant Secretary or by
the Chairman, the President, any Vice President, or by the Board of
Directors.
(2) Keep the minutes of corporate meetings, and the Corporate Record Book,
as set out in Section 7.01 hereof.
(3) Maintain, in the Corporate Record Book, a record of all share
certificates issued or canceled and all shares of the Corporation
canceled or transferred.
(4) Be custodian of the Corporation's records and of any seal, which the
Corporation may from time to time adopt. when the Corporation
exercises its right to use a seal, the Secretary shall see that the
seal is embossed on all share certificates prior to their issuance and
on all documents authorized to be executed under seal in accordance
with the provisions of these Bylaws.
(5) In general, perform all duties incident to the office of Secretary,
and such other duties as from time to time may be required by Sections
7.01, 7.02, and 7.03 of these Bylaws, by these Bylaws generally, by
the Board of Directors, or by the President.
4.01(e) TREASURER
The Treasurer shall:
(1) Have charge and custody of, and be responsible for, all funds and
securities of the Corporation, and deposit all funds in the name of
the Corporation in those banks, trust companies, or other depositories
that shall be selected by the Board of Directors.
(2) Receive, and give receipt for, monies due and payable to the
Corporation.
(3) Disburse or cause to be disbursed the funds of the Corporation as may
be directed by the Board of Directors, taking proper vouchers for
those disbursements.
(4) If required by the Board of Directors or the President, give to the
Corporation a bond to assure the faithful performance of the duties of
the Treasurer's office and the restoration to the Corporation of all
corporate books, papers, vouchers,
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money, and other property of whatever kind in the Treasurer's
possession or control, in case of the Treasurer's death, resignation,
retirement, or removal from office. Any such bond shall be in a sum
satisfactory to the Board of Directors, with one or more sureties or a
surety company satisfactory to the Board of Directors.
(5) In general, perform all the duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to the
Treasurer by Sections 7.O4 and 7.05 of these Bylaws, by these Bylaws
generally, by the Board of Directors, or by the President.
4.01(f) ASSISTANT SECRETARY AND ASSISTANT TREASURER
The Assistant Secretary or Assistant Treasurer shall have such powers and
perform such duties as the Secretary or Treasurer, respectively, or as the Board
of Directors or President may prescribe. In case of the absence of the Secretary
or Treasurer, the senior Assistant Secretary or Assistant Treasurer,
respectively, may perform all of the functions of the Secretary or Treasurer.
4.02 REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by vote of a
majority of the Directors at any regular or special meeting of the Board, or,
except in case of an officer chosen by the Board of Directors, by any committee
or officer upon whom that power of removal may be conferred by the Board of
Directors. Such removal shall be without prejudice to the contract rights, if
any, of the person removed. Any officer may resign at any time by giving written
notice to the Board of Directors, the President, or the Secretary of the
Corporation. Any resignation shall take effect on the date of the receipt of
that notice or at any later time specified therein, and, unless otherwise
specified therein, the acceptance of that resignation shall not be necessary to
make it effective.
4.03 VACANCIES
Upon the occasion of any vacancy occurring in any office of the
Corporation, by reason of death, resignation, removal, or otherwise, the Board
of Directors may elect an acting successor to hold office for the unexpired term
or until a permanent successor is elected.
4.04 COMPENSATION
The compensation of the officers shall be fixed from time to time by the
Board of Directors, and no officer shall be prevented from receiving a salary by
reason of the fact that the officer is also a Shareholder or a Director of the
Corporation, or both.
ARTICLE FIVE-AUTHORITY TO EXECUTE INSTRUMENTS
5.01 NO AUTHORITY ABSENT SPECIFIC AUTHORIZATION
These Bylaws provide certain authority for the execution of instruments.
The Board of Directors, except as otherwise provided in these Bylaws, may
additionally authorize any officer or
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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. Unless expressly authorized by
these Bylaws or the Board of Directors, no officer, agent, or employee shall
have any power or authority to bind the Corporation by any contract or
engagement nor to pledge its credit nor to render it pecuniarily liable for any
purpose or in any amount.
5.02 EXECUTION OF CERTAIN INSTRUMENTS
Formal contracts of the Corporation, promissory notes, deeds, deeds of
trust, mortgages, pledges, and other evidences of indebtedness of the
Corporation, other corporate documents, and certificates of ownership of liquid
assets held by the Corporation shall be signed or endorsed by the President or
any Vice President and by the Secretary or the Treasurer, unless otherwise
specifically determined by the Board of Directors or otherwise required by law.
ARTICLE SIX-ISSUANCE AND TRANSFER OF SHARES
6.01 CLASSES AND SERIES OF SHARES
The Corporation may issue one or more classes or series of shares, or both.
Any of these classes or series may have full, limited, or no voting rights, and
may have such other preferences, rights, privileges, and restrictions as are
stated or authorized in the Articles of Incorporation. All shares of any one
class shall have the same voting, conversion, redemption, and other rights,
preferences, privileges, and restrictions, unless the class is divided into
series, If a class is divided into series, all the shares of any one series
shall have the same voting, conversion, redemption, and other. rights,
preferences, privileges, and restrictions. There shall always be a class or
series of shares outstanding that has complete voting rights except as limited
or restricted by voting rights conferred on some other class or series of
outstanding shares.
6.02 CERTIFICATES FOR FULLY PAID SHARES
Neither shares nor certificates representing shares may be issued by the
Corporation until the full amount of the consideration has been received when
the consideration has been paid to the Corporation, the shares shall be deemed
to have been issued and the certificate representing the shares shall be issued
to the shareholder.
6.03 CONSIDERATION FOR SHARES
Shares may be issued for such consideration as may be fixed from time to
time by the Board of Directors, but not less than the par value stated in the
Articles of Incorporation. The consideration paid for the issuance of shares
shall consist of money paid, labor done, or property actually received, and
neither promissory notes nor the promise of future services shall constitute
payment nor partial payment for shares of the Corporation.
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6.04 REPLACEMENT OF CERTIFICATES
No replacement share certificate shall be issued until the former
certificate for the shares represented thereby shall have been surrendered and
canceled, except that replacements for lost or destroyed certificates may be
issued, upon such terms, conditions, and guarantees as the Board may see fit to
impose, including the filing of sufficient indemnity.
6.05 SIGNING CERTIFICATES-FACSIMILE SIGNATURES
All share certificates shall be signed by the officer(s) designated by the
Board of Directors. The signatures of the foregoing officers may be facsimiles.
If the officer who has signed or whose facsimile signature has been placed on
the certificate has ceased to be such officer before the certificate issued, the
certificate may be issued by the Corporation with the same effect as if he or
she were such officer on the date of its issuance.
6.06 TRANSFER AGENTS AND REGISTRARS
The Board of Directors may appoint one or more transfer agents or transfer
clerks, and one or more registrars, at such times and places as the requirements
of the Corporation may necessitate and the Board of Directors may designate.
Each registrar appointed, if any, shall be an incorporated bank or trust
company, either domestic or foreign.
6.07 CONDITIONS OF TRANSFER
1. The party in whose name shares of stock stand on the books of the
Corporation shall be deemed the owner thereof as regards the
Corporation, provided that whenever any transfer of shares shall be
made for collateral security, and not absolutely, and prior written
notice thereof shall be given to the Secretary of the Corporation, or
to its transfer agent, if any, such fact shall be stated in the entry
of the transfer.
6.08 REASONABLE DOUBTS AS TO RIGHT TO TRANSFER
When a transfer of shares is requested and there is reasonable doubt as to
the right of the person seeking the transfer, the Corporation or its transfer
agent, before recording the transfer of the shares on its books or issuing any
certificate therefor, may require from the person seeking the transfer
reasonable proof of that person's right to the transfer. If there remains a
reasonable doubt of the right to the transfer, the Corporation may refuse a
transfer unless the person gives adequate security or a bond of indemnity
executed by a corporate surety or by two individual sureties satisfactory to the
Corporation as to form, amount, and responsibility of sureties. The bond shall
be conditioned to protect the Corporation, its officers, transfer agents, and
registrars, or any of them, against any loss, damage, expense, or other
liability for the transfer or the issuance of a new certificate for shares.
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ARTICLE SEVEN-CORPORATE RECORDS AND ADMINISTRATION
7.01 MINUTES OF CORPORATE MEETINGS
The Corporation shall keep at the principal office, or such other place as
the Board of Directors may order, a book recording the minutes of all meetings
of its Shareholders and Directors, with the time and place of each meeting,
whether such meeting was regular or special, a copy of the notice given of such
meeting, or of the written waiver thereof, and, if it is a special meeting, how
the meeting was authorized. The record book shall further show the number of
shares present or represented at Shareholders' meetings, and the names of those
present and the proceedings of all meetings.
7.02 SHARE REGISTER
The Corporation shall keep at the principal office, or at the office of the
transfer agent, a share register showing the names of the Shareholders, their
addresses, the number and class of shares issued to each, the number and date of
issuance of each certificate issued for such shares, and the number and date of
cancellation of every certificate surrendered for cancellation. The above
information may be kept on an information storage device such as a computer,
provided that the device is capable of reproducing the information in clearly
legible form. If the Corporation is taxed under Internal Revenue Code Section
1244 or Subchapter S, the Officer issuing shares shall maintain the appropriate
requirements regarding issuance.
7.03 CORPORATE SEAL
The Board of Directors may at any time adopt, prescribe the use of, or
discontinue the use of, such corporate seal as it deems desirable, and the
appropriate officers shall cause such seal to be affixed to such certificates
and documents as the Board of Directors may direct.
7.04 BOOKS OF ACCOUNT
The Corporation shall maintain correct and adequate accounts of its
properties and business transactions, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus, and
shares. The corporate bookkeeping procedures shall conform to accepted
accounting practices for the Corporation's business or businesses. subject to
the foregoing, The chart of financial accounts shall be taken from, and designed
to facilitate preparation of, current corporate tax returns. Any surplus,
including earned surplus, paid-in surplus, and surplus arising from a reduction
of stated capital, shall be classed by source and shown in a separate account.
If the Corporation is taxed under Internal Revenue Code Section 1244 or
Subchapter S, the officers and agents maintaining the books of account shall
maintain the appropriate requirements.
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7.05 INSPECTION OF CORPORATE RECORDS
A Director or Shareholder demanding to examine the Corporation's books or
records may be required to first sign an affidavit that the demanding party will
not directly or indirectly participate in reselling the information and will
keep it confidential other than in use for proper purposes reasonably related to
the Director's or Shareholder's role. A Director who insists on examining the
records while refusing to sign this affidavit thereby resigns as a Director.
7.06 FISCAL YEAR
The fiscal year of the Corporation shall be as determined by the Board of
Directors and approved by the Internal Revenue Service. The Treasurer shall
forthwith arrange a consultation with the Corporation's tax advisers to
determine whether the Corporation is to have a fiscal year other than the
calendar year. If so, the Treasurer shall file an election with the Internal
Revenue Service as early as possible, and all correspondence with the IRS,
including the application for the Corporation's Employer Identification Number,
shall reflect such non-calendar year election.
7.07 WAIVER OF NOTICE
Any notice required by law or by these Bylaws may be waived by execution of
a written waiver of notice executed by the person entitled to the notice. The
waiver may be signed before or after the meeting.
ARTICLE EIGHT-ADOPTION OF INITIAL BYLAWS
The foregoing bylaws were adopted by the Board of Directors on June 18,
1999.
/s/ J. P. Beehner
---------------------------------------
/s/ Dorothy Mortenson
---------------------------------------
Attested to, and certified by:
/s/ Dorothy Mortenson
- ----------------------------------------
Secretary
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EXHIBIT 3.1
------------------------------
INCORPORATED UNDER THE LAWS OF
------------------------------
- ----- --------------
No. Shares
- ----- --------------
The State of Nevada
[LOGO] Cambridge Creek Companies, Ltd.
Ten Million Shares Authorized, $0.001 Par Value
This Certifies That SPECIMAN is the owner of _______________________ Shares of
--------
$0.001 each of the Capital Stock of
Cambridge Creek Companies, Ltd.
transferable only on the books of the Corporation by the holder hereof in person
or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers, and to be sealed with the Seal of the
Corporation this ____, day of _____ At
[SEAL]
___________________ ___________________
President Secretary
------ ----
SHARES $0.001 EACH
------ ----
<PAGE>
CERTIFICATE
FOR
SHARES
[SEAL APPEARS HERE]
OF THE
CAPITAL STOCK
CAMBRIDGE CREEK COMPANIES, LTD.
ISSUED TO
_____________________
DATED
_____________________
For Value Received ___ hereby sell, assign and transfer unto _______
_________________________________________________________________________
___________________________________________________________________ Shares
of the Capital Stock represented by the written Certificate and do hereby
irrevocably constitute and appoint ______________________________________
to transfer the said Stock on the books of the within named Corporation
with full power of substitution in the premises.
Dated ________________________
In presence of
__________________________
________________________
NOTICE. THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN ON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR WITHOUT ALTERATION
AND ENLARGEMENTS OR ANY CHANGE WHATEVER
PLEASE NOTE THAT ALL CERTIFICATES MUST BE LEGENDED AS FOLLOWS:
The shares to be acquired upon exercise of these warrants have not
been registered under the Securities Act of 1933, as amended, (the
"Act") and may not be sold, transferred or otherwise disposed of by
the holder, unless registered under the act or unless, in the opinion
of counsel satisfactory to the issuer, the transfer qualifies for an
exemption from or exemption to the registration provisions thereof.
<PAGE>
EXHIBIT 3.2
LOCK UP AGREEMENT
This LOCK UP AGREEMENT ("Agreement") dated and effective the 17th day of
March, 2000, is by and between Douglas Roe ("Shareholder"), and Cambridge Creek
Companies, Ltd., a Nevada corporation ("Company").
NOW THEREFORE, the parties hereto agree as follows:
Shareholder hereby represents, warrants, covenants and agrees, 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, $.001 par value (the "Stock") at the date hereof and during the
pendency of this Agreement that the Shareholder 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, his
shares of Stock of the Company owned beneficially or otherwise by the
Shareholder 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 Agreement shall be null and void. The
Shareholder further agrees that the Company (i) may instruct its transfer agent
not to transfer such securities (ii) may provide a copy of this 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 Agreement and (iii) may issue stop-transfer instructions to its transfer
agent for the period contemplated by this Agreement for
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such securities. This Agreement shall be binding upon the Shareholder, his
agents, heirs, successors, assigns and beneficiaries. Any waiver by the Company
of any of the terms and conditions of this Agreement in any instance must be in
writing and must be duly executed by the Company and the Shareholder 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 Shareholder agrees that any
breach of this 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 Agreement by the Shareholder,
the Shareholder hereby agrees 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 Shareholder also agrees 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
damages.
SHAREHOLDER: COMPANY:
CAMBRIDGE CREEK COMPANIES, LTD.
/s/ Douglas Roe /s/ Douglas Roe
- ---------------------------------- -----------------------------------
Douglas Roe, President By Douglas Roe, President
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EXHIBIT 6.1
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release ("Agreement") is entered into this
17th day of March, 2000 by and among Cambridge Creek Companies, Ltd., a Nevada
corporation ("Cambridge Creek Companies, Ltd."), David R. Mortenson &
Associates, a Texas general partnership ("Mortenson & Associates"), David R.
Mortenson, individually and in his capacity as general partner of Mortenson &
Associates (collectively, "Mortenson"), and Douglas Roe ("Roe").
RECITALS
WHEREAS, Roe is the sole shareholder of Cambridge Creek Companies, Ltd.;
and
WHEREAS, Cambridge Creek Companies, Ltd. and Mortenson & Associates entered
into that certain License Agreement dated as of July 1, 1999, as amended (the
"License Agreement"), whereby Mortenson & Associates granted to Cambridge Creek
Companies, Ltd. a three-year non-exclusive license for distribution of
Biocatalyst and related products in California; and
WHEREAS, Mortenson & Associates acquired its right to sublicense
Biocatalyst to Cambridge Creek Companies, Ltd. from NW Technologies, Inc.; and
WHEREAS, Mortenson has notified Cambridge Creek Companies, Ltd. that
Mortenson & Associates will be unable to fulfill its obligations under the
License Agreement due to a legal dispute between Mortenson and NW Technologies,
Inc.; and
WHEREAS, Cambridge Creek Companies, Ltd. and Roe have been damaged by
Mortenson & Associates' inability to fulfill its obligations under the License;
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NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties agree as follows:
1. In consideration of Vitamineralherb.com, Inc., an affiliate of
Mortenson & Associates, granting to Roe an exclusive license of even date
herewith to distribute Vitamineralherb.com products in Wisconsin, Roe, his
successors and assigns, hereby release, acquit and discharge Mortenson &
Associates, its affiliates, successors and assigns, its present and former
employees, partners, and agents, both individually and in their partnership
capacities, from any and all claims, actions, disputes, causes of action,
rights, demands, debts, damages, costs and attorneys fees, or other accountings
of every kind or nature arising out of the purchase of Cambridge Creek
Companies, Ltd. stock and the License Agreement, and from any and all liability
for any acts or omissions of Mortenson & Associates, its present and former
employees, partners, and agents, whether presently known or unknown, including
without limitation those claims, damages, or disputes which could be or have
been alleged to have arisen under common law, including without limitation
corporate fiduciary claims, or under any federal or state securities statute or
regulation, including without limitation claims under Sections 12 and 17 of the
Securities Act of 1933, except as provided in Paragraph 3.
2. Mortenson hereby agrees to diligently prosecute his claims against NW
Technologies in an attempt to recover his ability to fulfill his obligations to
Cambridge Creek Companies, Ltd. under the License Agreement, and to take
Cambridge Creek Companies, Ltd.'s interests in the License Agreement into
account in any settlement agreement he may enter into with NW Technologies
concerning Biocatalyst rights.
3. Paragraph 1 shall not release Mortenson or Mortenson & Associates from
their performance obligations under the License Agreement or any claims,
actions, disputes, causes of
2
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action, rights, demands, debts, damages, costs and attorneys fees, or other
accountings of every kind or nature which Cambridge Creek Companies, Ltd. may
have arising out of the License Agreement, and from any and all liability for
any acts or omissions of Mortenson & Associates, its present and former
employees, partners, and agents, whether presently known or unknown, including
without limitation those claims, damages, or disputes which could be or have
been alleged to have arisen under common law or state or federal law or
regulation, including without limitation breach of contract; provided, however,
that Cambridge Creek Companies, Ltd. shall not prosecute any of its claims
against Mortenson & Associates under this Paragraph 3 so long as Mortenson
complies with his obligations under Paragraph 2; and provided further, that upon
the consummation of a merger or reorganization of Cambridge Creek Companies,
Ltd. with or into any other corporation, or sale of sub-stantially all of the
assets of Cambridge Creek Companies, Ltd., Cambridge Creek Companies, Ltd.'s
rights under this Paragraph 3 shall be extinguished.
4. Roe understands and agrees that the agreements by Mortenson &
Associates set forth herein represent and constitute Mortenson & Associates'
total offer to resolve and fully and finally settle any and all claims, actions,
disputes, causes of action, rights, demands, debts, damages, costs and attorneys
fees, and other accountings of every kind and nature between Roe and Mortenson &
Associates, and that it is a full, complete and adequate consideration and
compensation for Roe's agreement to sign this Agreement and that Roe will
receive no other or further consideration under the terms hereof or otherwise.
5. The parties acknowledge and agree that this settlement is upon
compromise of disputed claims and that nothing contained herein shall be
construed to be an admission of any kind by any party to this Agreement.
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6. This Agreement prevails over prior communications regarding the matters
contained herein. This Agreement contains the entire understanding of the
matters between the parties and no representation, warranty, or promise has been
made or relied on by any party hereto other than as set forth herein.
7. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto, their respective heirs, legal representatives, successors
and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day first written above.
DAVID R. MORTENSON & ASSOCIATES CAMBRIDGE CREEK COMPANIES, LTD.
/s/ David R. Mortenson /s/ Douglas Roe
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By David R. Mortenson, General Partner By Douglas Roe, President
DOUGLAS ROE DAVID R. MORTENSON
/s/ Douglas Roe /s/ David R. Mortenson
- ------------------------------------- ------------------------------------
Douglas Roe David R. Mortenson
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EXHIBIT 6.2
LICENSE AGREEMENT
This agreement ("Agreement") made and entered into effective July 1, 1999
("Effective Date") by and between David R. Mortenson & Associates, having their
principal place of business at P.O. Box 5034, Alvin, Brazoria County, Texas,
U.S.A., ("Grantor") and CAMBRIDGE CREEK COMPANIES, LTD., ("Licensee"), a Nevada
Corporation whose registered office is at 50 West Liberty Street, Suite 880,
Reno, Nevada 89501;
W I T N E S S E T H:
WHEREAS, Grantor has certain rights as evidenced by the attached
Distribution Agreement (the "Distribution Agreement") to Products developed by
NW Technologies, Inc. ("NWT"), a Texas corporation with its principal offices at
5817 Centralcrest, Houston, Texas 77092, which company has developed proprietary
know-how in the Products, including Products covered by one or more US Patents
that have been licensed to NWT, and other Products (as hereinafter defined); and
WHEREAS, NWT has proprietary rights to trade dress and trademarks for the
brand name "Natures' Way" and "The Environmental Solution", and other trademarks
and trade dress as may be revealed to Licensee from time to time, collectively
referred to as "Marks"; and
WHEREAS, Grantor is under obligation to maintain the proprietary rights of
NWT to the Marks and to protect NWT's proprietary know-how, as outlined in the
Distribution Agreement; and
WHEREAS, NWT and Grantor desire to have the Products marketed by the
Licensee, under the Licensee's own private label, in the Territory (as
hereinafter defined); and
WHEREAS, Licensee desires to market the Products in the Territory and
hereby acknowledges NWT's exclusive ownership of all of the Marks;
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, Grantor and Licensee agree as
follows:
ARTICLE I
GRANT, TERRITORY AND PRODUCTS
1.01 Grant and Territory. (a) Grantor hereby designates Licensee as a
Private Label distributor for the marketing of the Products in the market(s) and
geographic area(s) set forth in Exhibit "A" hereto, ("Territory"). Licensee
hereby accepts the designation as a distributor on the terms and subject to the
conditions contained herein.
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(b) Licensee hereby agrees that it will make no use of any present
or future Marks of NWT, or of any marks that would cause confusion with the
general public, for any reason without specific written approval of NWT. Upon
termination of this Agreement for any reason Licensee agrees to cease
immediately all use and display of NWT's trademarks, service marks and trade
names (the Marks) if any permission to use the Marks has been granted.
1.02 Products. (a) The term "Product(s)" as used herein shall mean only
those Products as defined in Exhibit "B" hereto.
(b) "Affiliated Persons" shall mean officers, employees, sales
representatives, consultants or other employees or non-employees to whom
Licensee grants authority to represent the Products.
(c) Licensee's owned label, ("Private Label"), shall mean that the
Product(s) shall be packaged by Licensee utilizing a label on the packages of
the Licensee's own design and invention. Since Licensee's intended uses of the
Product are outside the scope of the expertise of Grantor or its personnel,
Grantor will not be required to furnish label detail to Licensee.
1.03 Consideration: Licensee agrees to pay Grantor the sum of $2,000 in
the form of 2,000,000 shares of Licensee's common stock, par value $0.001 (the
"Shares"). Licensee agrees to file a notice of placement of the Shares with the
U.S. Securities & Exchange Commission on Form D. Said stock is to be issued as
of the date of execution of the subscription agreements for the Shares to the
members of Grantor's Association in the amounts specified in Exhibit F of this
Agreement. Grantor warrants that each of the members of the Association are
""accredited investors" as that term is defined in Rule 501 of Regulation D
under the Securities Act of 1933, as amended.
ARTICLE II
DURATION, TERMINATION AND NATURE OF RELATIONSHIP
2.01 Duration. The term of this Agreement shall be three (3) years from
the Effective Date unless terminated earlier as herein provided. This Agreement
may be renewed by Licensee for additional three (3) year periods if no event of
default exists and all other provisions of this Agreement are in full force and
effect.
2.02 Termination. (a) This Agreement may be terminated by Grantor for
cause upon the giving of notice as herein provided. This Agreement may be
terminated by Licensee, for any reason, upon the giving of notice as provided in
Section 8.02.
(b) Termination for Cause. In the event that Licensee shall file a
voluntary petition in bankruptcy or for reorganization of indebtedness, or that
Licensee should, for a period of more than ninety days be the subject of an
involuntary bankruptcy proceeding or receivership over all or substantially all
of Licensee's assets, or that Licensee or any Officer or Director of Licensee
should be found guilty of a felony or a crime involving moral turpitude, or that
Licensee shall, with knowledge and
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deliberation, breach any provision of this Agreement, then Company may
immediately, upon delivery of written notice to Licensee, terminate this
Agreement. Cause shall also include the violation by Licensee of any of the
provisions, purchase requirements, or monetary requirements of this Agreement
("Events of Default").
(c) Licensee will be allowed 30 days after written notification of
an Event of Default to correct the violation, except for monetary provisions
which will not be granted a grace period by Grantor.
(d) Termination of this Agreement shall not release Licensee or
Grantor from the obligations of either party contained herein.
(e) Termination of this Agreement cancels any rights granted to
Licensee herein.
2.02 Nature of Relationship. (a) This Agreement does not constitute nor
empower the Licensee as the agent or legal representative of Grantor for any
purpose whatsoever. Licensee is and will continue to be an independent
contractor.
(b) The arrangement created by this Agreement is not, and is not
intended to be, a franchise or business opportunity under the United States'
Federal Trade Commission Rule: Disclosure Requirements and Prohibitions
Concerning Franchising and Business Opportunity Ventures and is not a franchise,
business opportunity or seller assisted marketing plan or similar arrangement
under any other federal, state, local or foreign law, rule or regulation;
(c) Licensee shall not repackage or re-label Products for any
reason, except as may be allowed in any licensing agreement issued by Grantor,
without prior written authorization from Grantor. Notwithstanding the provisions
of this paragraph 2.03(c) it is understood by Company that Licensee will
repackage Product and apply Licensee's own label to the containers. The purpose
of this section is to assure that Licensee will not re-label any Product
incorrectly whereby the public would be confused with the recommended use of the
Product.
(d) Licensee declares that it will not sell or offer for sale the
product Biocatalyst for use in applications involving bioremediation of
hydrocarbons or where microbes are used, enhanced or suggested for use without
specific written authorization from Grantor. The language herein is not intended
to prohibit the Licensee's use of the Product for that purpose in remediation of
sewage or waste water, whether in septic tanks or waste water treatment
facilities and the like, nor to prohibit Licensee's use of the Product in pond
remediation, exclusive of remediation of petroleum-based hydrocarbon
contamination. Licensee acknowledges that its intended use of the product
"Biocatalyst" for remediation of sewage or waste water, exclusive of remediation
of petroleum-based hydrocarbon contamination has not been specifically tested by
Grantor and as a consequence of this is not included as a recommended use of the
product Biocatalyst by Grantor or NWT. Notwithstanding the foregoing, both
parties acknowledge that in bioremediation, Biocatalyst is specifically used to
enhance
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the growth of microbes in soils, particularly at depths where oxygen exchange is
limited.
ARTICLE III
CONFIDENTIALITY, INDEMNITY AND REMEDIES
3.01 Confidential Information. (a) Licensee acknowledges that in
performing its obligations hereunder it will have access to confidential
information and trade secrets of NWT and Grantor not generally known to the
public ("Confidential Information") and - Licensee is obligated to maintain the
confidentiality of the Confidential Information on its own behalf and on behalf
of its "Affiliated Persons" to whom Confidential Information is disclosed. For
the term of this Agreement and for a period of 5 years after cancellation hereof
Licensee and its Affiliated Persons will treat all Confidential Information in a
confidential manner.
(b) Licensee agrees that it will not analyze or otherwise test, or
submit to anyone else for analysis or testing (chemically or otherwise) any
Product unless approved in writing by Grantor and NWT and unless NWT and Grantor
are directly involved in the testing. NWT and Grantor grant the Licensee
hereunder the right to have the Product tested for the presence of oxygen,
pathogens or other nondesirable components. Grantor makes no warranty as to the
content of the Product.
(c) Licensee agrees to sign and to have its affiliated persons sign
confidentiality agreements in the same form as contained herein or as approved
by Grantor.
3.02 Noncompetition. Licensee agrees that the relationship between
Licensee and Grantor is of a special nature and further agrees on its own behalf
and on behalf of its Affiliated Persons that during the term of this Agreement
and for a period of twelve (12) months from and after the termination of this
Agreement that Licensee and its Affiliated Persons will not engage or hold any
interest, directly or indirectly, in any enterprise engaged in the manufacture,
sale or distribution of products of the type manufactured, sold or distributed
by Grantor as of the date this Agreement is terminated.
3.03 Remedies. Licensee agrees that Grantor shall be entitled to seek and
obtain injunctive relief from a court of competent jurisdiction for the purposes
of restraining Licensee from any actual or threatened breach of the provisions
contained herein.
3.04 Indemnity of Licensee and Grantor. Licensee and Grantor shall
indemnify the other and hold them harmless from and against any and all claims,
losses, costs, expenses and liabilities of any kind, including without
limitation court costs and reasonable attorneys' fees, suffered or incurred by
any of them on account of, related, or arising out of the conduct of the
Licensee's or Grantor's business as the case may be.
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ARTICLE IV
GRANTOR'S OBLIGATIONS TO LICENSEE
4.01 License to Produce. Grantor agrees to grant to Licensee a non-
exclusive license to manufacture the product "Biocatalyst" upon the following
terms and conditions:
(a) License. After the Licensee has purchased a minimum of 5,000
gallons of Product each month for a minimum period of six (6) consecutive months
a license will be granted to Licensee to produce the product in a location to be
named by Licensee and approved by Company with methods of production and
security measures as approved by Company. However, if after the effective date
hereof, Licensee, his successors or permitted assigns, can demonstrate to
Grantor's satisfaction the financial capability of Licensee, his permitted
successors or assigns, then upon a payment of a one time fee of $25,000.00 the
provisions of this section will be deemed by Company to have been fulfilled and
the referenced License to Produce will be granted by Company.
(b) The ingredient "Biomas" as used in the Product will be supplied
by Grantor upon terms, conditions and pricing that may be stated to Licensee by
Grantor at the time of issue of the subject License to Produce.
(c) Royalty and Expense. At the time of issuance of the subject
License to Produce a one-time payment of $10,000.00 will be made to Grantor by
Licensee to reimburse Grantor for unspecified expenses. A monthly royalty of 8%
(eight percent) of Licensee will be paid by Licensee to Grantor within 20 days
of the end of each month.
(d) Minimum Royalties. The minimum annual royalties to be paid by
Licensee hereunder, commencing with the granting of a license to Produce from
Grantor to Licensee will be $20,000.00. The minimum annual royalties to be paid
hereunder are non-accumulative.
4.02 Personnel. Grantor agrees to make available to Licensee Grantor's
trained technical personnel for consultation from time to time, if Licensee so
requests in writing. Such consultation may be by telephone or in person. If
Licensee requires the personal assistance of on site technical personnel, then
Licensee will pay actual travel and living expenses for such personnel as agreed
between Grantor and Licensee and an additional fee (per diem) of $300.00 per day
for each technical person requested.
ARTICLE V
LICENSEE'S OBLIGATIONS TO GRANTOR
5.01 Develop Territory. Licensee agrees to (i) use its best efforts to
market the Product in specified markets throughout the Territory, (ii) devote
such time and effort as may be necessary to do so, (iii) retain and train
sufficient staff that is knowledgeable in the sale and use of the Products, and
(iv) maintain facilities sufficient to market, sell, and distribute the
Products.
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5.02 Business Records. Licensee agrees to maintain reasonably detailed
and accurate records relating to the use of the Products and to furnish to
Grantor a detailed copy of all sales records, invoice copies, copies of all
testimonial letters, product usage data and other records and reports relating
to the sale and use of the Products within the Territory (the "Business
Records") upon request in writing by Grantor.
5.03 Compliance with Laws. Licensee agrees, on its behalf and on behalf
of its "Affiliated Persons" not to perform any acts or transactions which would
place Grantor or Licensee in violation of domestic, foreign, or international
laws, rules or regulations.
5.04 Information Regarding Use of Product. Licensee agrees to forward to
Grantor any and all information, including written, digital, or pictorial
pertaining to the use and distribution of the Products as such information
becomes known to Licensee.
5.05 Inventories. Licensee agrees to maintain adequate inventories of
Products in the Territory to service customers needs.
5.06 Licensee's Control Over Business. Licensee shall establish the
means by which it satisfies its obligations under Sections 5.01 and 5.05.
Grantor shall have no right to enforce, and no action shall accrue under, such
provisions until this Agreement shall have been in force for more than one year
and Licensee shall have failed to meet its minimum purchase requirements set
forth in Exhibits A and C.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF LICENSEE
6.01 Organization. Licensee represents and warrants to Grantor that
Licensee has the authority to enter into this Agreement and to perform its
obligations hereunder.
6.02 No Defaults. Licensee represents and warrants to Grantor that
neither the execution and delivery of this Agreement nor the performance of the
transactions contemplated hereby will conflict with or result in a breach or
violation of any agreement, document, instrument, judgment, decree, order,
governmental permit, certificate or license to which Licensee is a party or to
which Licensee is subject.
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ARTICLE VII
TERMS OF SALE
7.01 Standard Terms and Warranties. SINCE THE USE OF THE PRODUCTS ARE
BEYOND THE CONTROL OF GRANTOR THE PRODUCTS ARE SOLD "AS IS", "WHERE IS", WITH NO
WARRANTIES, EXPRESS OR IMPLIED. GRANTOR MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PRODUCTS OR THEIR PERFORMANCE OR AS TO SERVICE, TO
LICENSEE OR ANY OTHER PERSON. IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE, TO LICENSEE OR TO ANY OTHER PERSON ARE HEREBY
DISCLAIMED. IN NO EVENT SHALL GRANTOR BE LIABLE TO LICENSEE OR ANY PERSON FOR
INCIDENTAL OR CONSEQUENTIAL DAMAGES. THE LIABILITY OF GRANTOR, IF ANY, FOR
DAMAGES RELATING TO ANY ALLEGEDLY DEFECTIVE PRODUCT UNDER ANY LEGAL OR EQUITABLE
THEORY SHALL BE LIMITED TO THE ACTUAL PRICE PAID FOR SUCH PRODUCT. Grantor may
change the limited warranty contained in this Section 7.01 at any time.
7.02 Placement of Orders and Shipping Terms. All shipments of Product
shall be FOB Grantor's plant, Houston, Texas, unless specifically agreed
otherwise and all shipments will be made by common carrier in accordance with
regulations relating thereto and delivery is not guaranteed by Grantor at or to
the destination. Grantor is not responsible for claims for shortages or damage
in transit; such claims must be made by the Licensee against the carrier.. All
orders shall be placed with Grantor in writing upon forms approved by Grantor
and Licensee shall verify the accuracy of the order. Grantor has the right to
accept or reject any order, and the terms and conditions thereof, if the
Licensee is in default with any of the requirements or conditions of this
Agreement.
7.03 Claims of Faulty Products. Any claims for faulty Products shall be
governed by the Uniform Commercial Code of Texas, USA unless stated otherwise in
this Agreement.
7.04 Title and Risk of Loss. Products sold to Licensee shall become the
property of Licensee and title and risk of loss shall pass to Licensee at the
time of delivery of the Products to a carrier for shipment to Licensee or
Licensee customer, subject, however, to a security interest which Grantor hereby
reserves in the Products until payment for the Products is received by Grantor.
7.05 Payment Terms. Licensee shall make payment to Grantor in U.S.
dollars to Grantor for all materials ordered under this Agreement at the address
set forth herein, and upon the terms and manner of payment as shown on the Price
List of Grantor as amended from time to time.
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7.06 Credit Sales. Licensee and Grantor both acknowledge and agree that
if any sale on credit is permitted hereunder Grantor hereby retains a security
interest in and lien upon the Products so sold until payment in full is received
by Grantor.
7.07 Insurance. Licensee shall secure and maintain insurance on its
inventory of Products purchased on credit in the U.S. dollar amount at least
equal to the amount owing to Grantor by Licensee. Such insurance coverage
shall list Grantor as an additional insured party.
7.08 Prices. Licensee's price from Grantor for Products and printed
matter shall be as set forth in Grantor's current published pricing schedule.
This pricing is subject to change from time to time upon written notice
transmitted by facsimile, or US Mail, by Grantor to Licensee not less than ten
(10) days in advance of any price changes. Prices for Product by Grantor to
Licensee shall be as shown on Exhibit "B" attached hereto.
7.09 Printed Matter. Licensee is prohibited from producing and
distributing his own literature, or from any action that would give the
impression directly or indirectly, to others that Product and/or the "Marks" are
the property of Licensee.
7.10 Biomas Supply. At the time that an Agreement allowing the Licensee
to produce the Product as allowed by the terms and conditions stated in this
Agreement the formulae and processes for the production of the raw material
"Biomas" will be placed with an escrow agent acceptable to both Licensee and
Grantor. If Grantor is not able to supply Biomas in quantities sufficient to
meet Licensee needs for production of Product, and the non-supply condition
continues for a period of 90 (ninety) days, then Licensee will be allowed to
produce Biomas in accordance with a non-exclusive License to Produce to be
issued by Grantor in accordance with the License form deposited with the
formulae and processes with the approved escrow agent.
ARTICLE VIII
MISCELLANEOUS CONDITIONS
8.01 Governing Law. This Agreement and any questions concerning its
validity, construction and performance shall be governed by the laws of the
State of Texas, U.S.A., with venue in Harris County, Texas. Further, the
parties to this Agreement hereby irrevocably submit to the exclusive
jurisdiction of the federal courts sitting in Harris County, Texas, for any
action or proceeding arising out of or relating hereto.
8.02 Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be sent by certified United
States mail, return receipt requested to the other party at the address
specified in the first paragraph of this Agreement. The address of either party
specified above may be changed by a notice given by such party to the other
party in accordance with this Section 8.02.
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8.03 Excuse of Performance. Grantor's and Licensee's performance (other
than Licensee's obligation to pay for Products or other fees or monetary
obligations in accordance herewith, which shall not be excused) hereunder shall
be excused if (but only for so long as) any of the following conditions or
events occur and are continuing: Labor conflicts, strikes, lock-outs, fires,
explosions, war, civil disturbances, unforeseen military action, governmental
action, requisitions or seizures, delays of subcontractors or vendors,
unavailability of raw materials or transport facilities, acts of God or nature,
or any other condition or event which is beyond the reasonable control of
Grantor or Licensee, as the case may be.
8.04 Entire Agreement. This Agreement, the Exhibits hereto and any
confidentiality agreement and subdistribution agreement, constitute the entire
agreement between the parties with respect to the subject matter hereof and may
not be altered or modified except by an agreement in writing referring to this
agreement and signed by the parties hereto. Grantor and the Licensee agree that
this agreement supersedes all prior agreements written or oral.
8.05 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute but one and the same instrument.
8.06 No Waiver. No failure or delay by any party hereto in exercising any
right, in whole or in part, power or privilege hereunder shall operate as a
waiver thereof.
8.07 Amendment. This Agreement may not be amended or modified except by
an instrument in writing signed on behalf of the parties thereto specifically
referencing this Agreement.
8.08 Severability. Any provisions hereof prohibited by or unlawful or
unenforceable under any applicable law of any jurisdiction shall be ineffective
as to such jurisdiction, without affecting any other provision of this
Agreement.
8.09 Binding on Successors; Assignment. This Agreement is binding on, and
shall inure to the benefit of the parties hereto and their respective
successors, heirs and permitted assigns. This Agreement and any rights or
duties hereunder may not be assigned by Licensee, whether such assignment occurs
by merger, consolidation, sale, lease, other disposition of or any other
business combination of Licensee, without the prior written consent of Grantor.
Grantor may assign its rights hereunder to any person provided that such person,
either expressly or by operation of law, assumes Grantor's obligations
hereunder. The above notwithstanding, Grantor understands that Licensee is, as
of the effective date hereof, negotiating with several companies for the purpose
of entering into a merger, joint venture, or marketing arrangement specifically
for the purpose of marketing or financing Licensee's efforts in marketing of the
Product. Grantor agrees that as long as the requirements of this
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Agreement are fulfilled that Grantor will not unreasonably deny a request to
allow Licensee to enter into the contemplated agreement.
8.10 Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs, and necessary disbursements in
addition to any other relief to which such party may be entitled.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives on the dates set forth beneath
their respective signatures below, to be effective for all purposes as of the
date first above written.
CAMBRIDGE CREEK DAVID R. MORTENSON & ASSOCIATES
COMPANIES, LTD.
BY: /s/ J. P. Beehner BY: /s/ David R. Mortenson
----------------- ----------------------
J. P. Beehner David R. Mortenson
TITLE: President
DATE: July 1, 1999 DATE: July 1, 1999
<PAGE>
EXHIBIT "A"
TERRITORY
Geographic Area:
Non-Exclusive Private Label License for the State of California for remediation
of sewage and waste water, whether in septic tanks or waste water treatment
facilities, exclusive of remediation of petroleum-based hydrocarbon
contamination. Licensee may not make any use of Grantor's or NWT's marks, name,
or make any reference to NW Technologies, Inc., in labeling, packaging, or
advertising materials of any kind.
Licensees Obligations to Grantor: Licensee agrees to minimum purchase
requirements as shown in Exhibit "C".
<PAGE>
EXHIBIT "B"
Products Included in This Agreement
The product Biocatalyst is the only product included in this Agreement subject
to provisions of the Agreement.
The product Biomas in included herein only if a license to product the Product
is granted to Licensee in accordance with the terms and conditions contained
herein.
Prices: The initial price to Licensee for the Product Biocatalyst is $2.00 per
gallon in 2,000 gallon quantities to be packaged in a bulk container furnished
by Licensee. The suitability of the bulk container to receive and transport the
Product is, and will remain, the responsibility of Licensee.
<PAGE>
EXHIBIT "C"
PURCHASE OBLIGATIONS
1st Year $125,000.00
2nd Year $175,000.00
Notwithstanding the above, if Licensee shall have purchased the right to produce
as outlined in Section 4.01 of this Agreement, Licensee shall have no purchase
requirement. Grantor shall have no right to enforce, and no action shall accrue
in respect of, Licensee's Purchase Obligations until this Agreement shall have
been in force for more than one year.
<PAGE>
EXHIBIT "D"
PAYMENT TERMS
The payment terms relating to this Agreement are cash in advance.
<PAGE>
EXHIBIT "E"
CONFIDENTIALITY AGREEMENT
WITNESSETH:
This Agreement by and between NW Technologies, Inc., a Texas corporation with
its principal offices located at 5817 Centralcrest, Houston, Harris County,
Texas 77092 (herein "NWT") and David R. Mortenson & Associates, an individual,
with his principal office located at P.O. Box 5034, Alvin, Brazoria County,
Texas 77512 (herein "Mortenson"), jointly hereinafter referred to as
"Discloser"; and CAMBRIDGE CREEK COMPANIES, LTD., a Nevada corporation with
principal offices at P.O. Box 5034, Alvin, Brazoria County, Texas 77512-5034
(Herein "Disclosee") is made and entered into this 24th day of December, 1998.
WHEREAS, NWT has developed proprietary know-how in its products marketed
under the trade name "Natures' Way" and "Biocatalyst"; and other trade names
from time to time; and;
WHEREAS, NWT has proprietary rights to trade dress, trademarks, and
designs for the brand name "Nature's Way", "Biocatalyst", "The Environmental
Solution", manufacturing processes and procedures, application processes and
procedures, and;
WHEREAS, NWT has entered into an exclusive marketing agreement with
Mortenson to market its product Biocatalyst under their own brand names,
including among others, "OxyMax", "O-Max", "OMax", "Oxy-Ice", "O-Gel", "OGel"
for agricultural use;
NOW THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Discloser and Disclosee agree as follows:
1.0 ANALYSIS OF SAMPLES OR PRODUCT: Parties hereto agree that Disclosee
will not analyze (chemically or otherwise) or cause to be analyzed any of NWT's
BioCatalyst product, except as specifically required by state or federal
statute, regulation, common law, or court order. No such analysis of Biocatalyst
shall be made without 10 days' advance written notice to NWT, and NWT shall be
responsible for and pay for any deviation from the testing protocol that may be
required by NWT.
2.0 CONFIDENTIALITY OF INFORMATION: Parties hereto acknowledge that they
will have access to confidential, specialized, and proprietary information and
trade secrets of NWT not generally known to the public which are the proprietary
information of NWT. Parties hereto agree that the Confidential Information
revealed to them is a valuable proprietary interest of NWT and that they are
obligated to maintain the confidentiality of the Confidential Information so
revealed. The Parties hereto agree that they will not disclose or authorize any
other person to disclose, publish,
<PAGE>
disseminate or use the Confidential Information, and will treat all Confidential
Information in a confidential manner. The Parties hereto acknowledge that NWT
would be irreparably harmed by the unauthorized use of the Confidential
Information herein referred to.
3.0 GOVERNING LAW: This agreement and any questions concerning its
validity, construction and performance shall be governed by the laws of the
State of Texas, U.S.A., with venue in Harris County, Texas.
4.0 ENTIRE AGREEMENT: This agreement is the entire agreement between the
parties with respect to the subject matter hereof and may not be altered or
modified except by an agreement in writing signed by the parties hereto.
5.0 NO WAIVER: No failure or delay by any party hereto in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof or the exercise of any right, power or
privilege.
6.0 AMENDMENT: This Confidentiality Agreement may not be amended or
modified except by an instrument in writing signed on behalf of the parties
thereto.
7.0 SEVERABILITY: Any provisions hereof prohibited by or unlawful or
unenforceable under any applicable law of any jurisdiction shall be ineffective
as to such jurisdiction, without affecting any other provision of this Agreement
or in any other jurisdiction.
8.0 ATTORNEYS' FEES: If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs, and necessary disbursements in
addition to any other relief to which such party may be entitled.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives on the dates set forth beneath
their respective signatures below, to be effective for all purposes as of the
date first above written.
NW TECHNOLOGIES, INC. CAMBRIDGE CREEK COMPANIES, LTD.
BY: /s/ BY: /s/ J. P. Beehner
-------------------- -----------------
TITLE: Chairman President
DATE: 7/1/99
------ -----------------
DAVID R. MORTENSON & ASSOCIATES
BY: /s/ David R. Mortenson Date: 7/1/99
---------------------- ----------------
David R. Mortenson
<PAGE>
EXHIBIT F
SHARE DISTRIBUTION SCHEDULE
<TABLE>
<CAPTION>
Member Address SSN No. of Shares
to be issued
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
David R. Mortenson P.O. Box 5034 ###-##-#### 200,000
Alvin TX 77512-5034
- ---------------------------------------------------------------------------------------------------
C. E. Kaiser 10220 Memorial Dr #67 ###-##-#### 200,000
Houston TX 77024
- ---------------------------------------------------------------------------------------------------
Marie M. Charles PO Box 34830 ###-##-#### 200,000
Houston TX 77034
- ---------------------------------------------------------------------------------------------------
Roy Donovan Hinton Jr. PO Box 4456 ###-##-#### 200,000
Pasadena TX 77502
- ---------------------------------------------------------------------------------------------------
James R. Collins 7716 Windswept Lane ###-##-#### 200,000
Houston TX 77063
- ---------------------------------------------------------------------------------------------------
Jock R. Collins, D.V.M. 7627 Skyline Drive ###-##-#### 200,000
Houston TX 77063
- ---------------------------------------------------------------------------------------------------
George R. Quan. 29 King St. ###-##-#### 200,000
Belize City, Belize C.A.
- ---------------------------------------------------------------------------------------------------
Darren Quan 313 Oakhaven Dr. ###-##-#### 200,000
Pleasanton TX 78064
- ---------------------------------------------------------------------------------------------------
Marsha Quan PO Box 638 ###-##-#### 200,000
Pleasanton TX 78064
- ---------------------------------------------------------------------------------------------------
Laurent R. Barbudaux 735 International Blvd. #111 ###-##-#### 200,000
Houston TX 77024
- ---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-2000
<PERIOD-START> MAY-27-1999
<PERIOD-END> FEB-28-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,167
<DEPRECIATION> 1,167
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 1,200
<BONDS> 0
0
0
<COMMON> 2,655
<OTHER-SE> (3,855)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,022
<LOSS-PROVISION> 833
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,855)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,855)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,855)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
