U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
Waterfalls Corp.
(Name of Small Business Issuer)
Delaware 58-2502346
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
Suite 310, 1000 Abernathy Road NE, Atlanta, Georgia 30328
(Address of Principal Executive Offices including Zip Code)
(770) 481-7200
(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act:
None
Securities to be Registered Under Section 12(g) of the Act:
Common Stock $.0001 Par Value
(Title of Class)
PART I
ITEM 1. BUSINESS.
Waterfalls Corp. (A Development Stage Company) (the
"Company"), was incorporated on November 4, 1999, under the
laws of the State of Delaware to engage in any lawful
corporate undertaking, including, but not limited to, selected
mergers and acquisitions. The Company has been in the
developmental stage since inception and has no operations to
date other than issuing shares to its original shareholders.
The Company will attempt to locate and negotiate with a
business entity for the combination of that target company
with the Company. The combination will normally take the form
of a merger, stock-for-stock exchange or stock-for-assets
exchange. In most instances the target company will wish to
structure the business combination to be within the definition
of a tax-free reorganization under Section 351 or Section 368
of the Internal Revenue Code of 1986, as amended. No
assurances can be given that the Company will be successful in
locating or negotiating with any target company.
The Company has been formed to provide a method for a
foreign or domestic private company to become a reporting
("public") company whose securities are qualified for trading
in the United States secondary market.
PERCEIVED BENEFITS
There are certain perceived benefits to being a reporting
company with a class of publicly-traded securities. These are
commonly thought to include the following:
* the ability to use registered securities to make
acquisitions of assets or businesses;
* increased visibility in the financial community;
* 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
for which there may be a market valuation;
* 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
its securities or is unable to find an underwriter
of securities on terms acceptable to it;
* a company which wishes to become public with less
dilution of its common stock than would occur upon
an underwriting;
* a company which believes that it will be able to
obtain investment capital on more favorable terms
after it has become public;
* a foreign company which 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
normally 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.
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.
RISK FACTORS
The Company's business is subject to numerous risk
factors, including the following:
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.
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.
Scarcity of and Competition for Business Opportunities
and Combinations. 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.
Impracticability of Exhaustive Investigation. The
Company's limited funds and the lack of full-time management
will likely make it impracticable to conduct a complete and
exhaustive investigation and analysis of a target company.
The decision to enter into a business combination, therefore,
will likely be made without detailed feasibility studies,
independent analysis, market surveys or similar information
which, if the Company had more funds available to it, would be
desirable. The Company will be particularly dependent in
making decisions upon information provided by the principals
and advisors associated with the business entity seeking the
Company's participation.
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 business combination with a
specific 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.
Continued Management Control, Limited Time Availability.
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.
Conflicts of Interest -- General. The Company's officer
and director participates in other business ventures which may
compete directly with the Company. Additional conflicts of
interest and non-arms length transactions may also arise in
the future. Management has adopted a policy that the Company
will not seek a business combination with any entity in which
any member of management serves as an officer, director or
partner, or in which they or their family members own or hold
any ownership interest. See "ITEM 5. DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS -- Conflicts of
Interest."
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
audited 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 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.
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 transaction of the type contemplated by
the Company, there is no assurance the Company will be
successful in completing any such business combination.
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 target company. 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.
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.
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.
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.
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 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.
Possible Reliance upon Unaudited Financial Statements.
The Company will require audited financial statements from
any business entity that it proposes to acquire. No assurance
can be given, however, that audited financials will be
available to the Company prior to a business combination. In
cases where audited financials are unavailable, the Company
will have to rely upon unaudited information that has not been
verified by outside auditors in making its decision to engage
in a transaction with the business entity. The lack of the
type of independent verification which audited financial
statements would provide increases the risk that the Company,
in evaluating a transaction with such a target company, will
not have the benefit of full and accurate information about
the financial condition and operating history of the target
company. This risk increases the prospect that a business
combination with such a business entity might prove to be an
unfavorable one for the Company.
ITEM 2. PLAN OF OPERATION
The Company intends to enter into a business combination
with a target company in exchange for the Company's
securities. As of the initial filing date of this Registration
Statement, neither the Company's officer and director nor any
affiliate has engaged in any negotiations with any
representative of any specific entity regarding the
possibility of a business combination with the 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 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 are
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.
The Company has no full time employees. The Company's
president 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.
Management is currently involved with other blank check
companies, and is involved in creating additional blank check
companies similar to this one. A conflict may arise in the
event that another blank check company with which management
is affiliated is formed and actively seeks a target company.
Management anticipates that target companies will be located
for the Company and other blank check companies in
chronological order of the date of formation of such blank
check companies or, in the case of blank check companies
formed on the same date, alphabetically. However, other blank
check companies with which management is or may be affiliated
may differ from the Company in certain items such as place of
incorporation, number of shares and shareholders, working
capital, types of authorized securities, or other items. It
may be that a target company may be more suitable for or may
prefer a certain blank check company formed after the Company.
In such case, a business combination might be negotiated on
behalf of the more suitable or preferred blank check company
regardless of date of formation. See "ITEM 5, DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS--Current
Blank Check Companies"
The Certificate of Incorporation of the Company provides
that the Company may indemnify officers and/or directors of
the Company for liabilities, which can include liabilities
arising under the securities laws. Therefore, assets of the
Company could be used or attached to satisfy any liabilities
subject to such indemnification.
GENERAL BUSINESS PLAN
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 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 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 the owners of business entities with any
cash or other assets. 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 business combination
for the owners of a target company.
The analysis of new business opportunities will be
undertaken by, or under the supervision of, the officer and
director of the Company, who is not a professional business
analyst. In analyzing prospective business opportunities,
management may 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; 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 Exchange Act requires that any merger or acquisition
candidate comply with certain reporting requirements, which
include providing audited financial statements to be included
in the reporting filings made under the Exchange Act. The
Company will not acquire or merge with any company for which
audited financial statements cannot be obtained at or within
the required period of time after closing of the proposed
transaction.
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.
The Company will not restrict its search for any specific
kind of business entities, 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.
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. Following
a business combination the Company may benefit from the
services of others in regard to accounting, legal services,
underwritings and corporate public relations. If requested by
a target company, management may recommend one or more
underwriters, financial advisors, accountants, public
relations firms or other consultants to provide such services.
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.
ACQUISITION OF OPPORTUNITIES
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. On the
consummation of a transaction, it is likely that the present
management and shareholders 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.
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, 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.
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.
With respect to 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 and will include
miscellaneous other terms.
The Company will not enter into a business combination
with any entity which cannot provide audited financial
statements at or within the required 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 the due date for filing its Form 8-K
which is required to be filed with the Securities and Exchange
Commission within 15 days following the completion of the
business combination. If such audited financial statements
are not available at closing, or within time parameters
necessary to insure the Company's compliance with the
requirements of the Exchange Act, or if the audited financial
statements provided do not conform to the representations made
by the target company, the closing documents may provide that
the proposed transaction will be voidable at the discretion of
the present management of the
Company.
Management has orally agreed that it will advance to the
Company any additional funds which the Company needs for
operating capital and for costs in connection with searching
for or completing an acquisition or merger. Such advances
will be made without expectation of repayment. There is no
minimum or maximum amount management will advance to the
Company. The Company will not borrow any funds to make any
payments to the Company's management, its affiliates or
associates.
The Board of Directors has passed a resolution which
contains a policy that the Company will not seek a business
combination with any entity in which the Company's officer,
director, shareholders or any affiliate or associate serves as
an officer or director or holds any ownership interest.
UNDERTAKINGS AND UNDERSTANDINGS REQUIRED OF TARGET
COMPANIES
As part of a business combination agreement, the Company
intends to obtain certain representations and warranties from
a target company as to its conduct following the business
combination. Such representations and warranties may include
(i) the agreement of the target company to make all necessary
filings and to take all other steps necessary to remain a
reporting company under the Exchange Act (ii) imposing certain
restrictions on the timing and amount of the issuance of
additional free-trading stock, including stock registered on
Form S-8 or issued pursuant to Regulation S and (iii) giving
assurances of ongoing compliance with the Securities Act, the
Exchange Act, the General Rules and Regulations of the
Securities and Exchange Commission, and other applicable laws,
rules and regulations.
A prospective target company should be aware that the
market price and volume of its securities, when and if listed
for secondary trading, may depend in great measure upon the
willingness and efforts of successor management to encourage
interest in the Company within the United States financial
community. The Company does not have the market support of an
underwriter that would normally follow a public offering of
its securities. Initial market makers are likely to simply
post bid and asked prices and are unlikely to take positions
in the Company's securities for their own account or customers
without active encouragement and a basis for doing so. In
addition, certain market makers may take short positions in
the Company's securities, which may result in a significant
pressure on their market price. The Company may consider the
ability and commitment of a target company to actively
encourage interest in its securities following a business
combination in deciding whether to enter into a transaction
with such company.
A business combination with the Company separates the
process of becoming a public company from the raising of
investment capital. As a result, a business combination with
Company normally will not be a beneficial transaction for a
target company whose primary reason for becoming a public
company is the immediate infusion of capital. The Company may
require assurances from the target company that it has or that
it has a reasonable belief that it will have sufficient
sources of capital to continue operations following the
business combination. However, it is possible that a target
company may give such assurances in error, or that the basis
for such belief may change as a result of circumstances beyond
the control of the target company.
Prior to completion of a business combination, the
Company will generally require that it be provided with
written materials regarding the target company containing such
items as a description of products, services and company
history; management resumes; financial information; available
projections, with related assumptions upon which they are
based; an explanation of proprietary products and services;
evidence of existing patents, trademarks, or service marks, or
rights thereto; present and proposed forms of compensation to
management; a description of transactions between such company
and its affiliates during relevant periods; a description of
present and required facilities; an analysis of risks and
competitive conditions; a financial plan of operation and
estimated capital requirements; audited financial statements,
or if they are not available, unaudited financial statements,
together with reasonable assurances that audited financial
statements would be able to be produced within a reasonable
period of time not to exceed 75 days following completion of
a business combination; and other information deemed relevant.
COMPETITION
The Company will remain an insignificant participant
among the firms which engage in the acquisition of business
opportunities. There are many established venture capital and
financial concerns which have significantly greater financial
and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited
financial resources and limited management availability, the
Company will continue to be at a significant competitive
disadvantage compared to the Company's
competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no
agreements to acquire any properties. The Company currently
uses the offices of management at no cost to the Company.
Management has agreed to continue this arrangement until the
Company completes an acquisition or merger.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known by the
Company to be the beneficial owner of five percent or more of
the Company's Common Stock, all directors individually and all
directors and officers of the Company as a group. Except as
noted, each person has sole voting and investment power with
respect to the shares shown.
Name and Address Amt. of Beneficial Percentage
of Beneficial Owner Ownership of Class
Gilbert H. Davis 2,500,000 94.3%
1000 Abernathy Road NE
Suite 310
Atlanta, Georgia 30328
Erik S. Nelson 150,000 5.7%
P.O. Box 191767
Atlanta, Georgia 31119-1767
All Executive Officers
and Directors as a Group
(1 Person) 2,500,000 94.3%
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS.
The Company has one Director and Officer as follows:
Name Age Positions and Offices Held
Gilbert H. Davis 41 President, Secretary, Director
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.
Set forth below is the name of the director and officer
of the Company, all positions and offices with the Company
held, the period during which he has served as such, and the
business experience during at least the last five years:
Gilbert H. Davis, Esq., received a Bachelor of Arts from
Yale University in 1981 and his Juris Doctorate from The New
York University School of Law in 1984. From 1984 through
1992, Mr. Davis was an associate of the law firm of Alston &
Bird, Atlanta, Georgia, and a partner in the law firm of
Holland & Knight and a predecessor firm from 1992 through
February 1997. Since March 1997, when Mr. Davis joined in the
formation of Sims Moss Kline & Davis LLP, Mr. Davis has been
a partner of that firm specializing in securities law and
related corporate and federal taxation matters. Mr. Davis is
a member of the bar of the States of Georgia and New York and
the District of Columbia.
PREVIOUS BLANK CHECK COMPANIES
Management has not previously been involved in any blank
check offerings.
RECENT TRANSACTIONS BY BLANK CHECK COMPANIES
To date, management has been involved in two prior blank
check companies. Mr. Davis was the sole officer and director
of Hawkeye Corporation and Illinois Creek Corp. Hawkeye
Corporation was formed on August 31, 1999, and Illinois Creek
Corp. on November 4, 1999, to engage in a merger or
acquisition with an unidentified company or companies and was
structured substantially identically to the Company, including
identical management and controlling beneficial shareholder.
Following is information regarding their registrations:
Registration Form/
Effective Date/
Corporation File Number Status
Hawkeye Corporation Form 10-SB Merger effected
(renamed ISNI.Net, Inc.) 01/11/00;0-28065 March 23, 2000
Illinois Creek Corp. Form 10-SB 04/26/ Merger effected
(renamed Boats Depot, 00; 000-30471 October 19,2000
Inc.)
On March 23, 2000, Internet Services Network, Inc.
("ISNI"), a Florida corporation and an operating Internet
service provider, merged with and into Hawkeye Corporation,
which changed its name to "Internet Services Network, Inc."
In connection with that merger, the outstanding shares of
ISNI were converted into 24,000,000 shares of the surviving
companies common stock. On March 25, 2000, Mr. Davis resigned
as an officer and director of that company. Mr. Davis
continues to own 605,734 shares of the common stock of the
surviving company. The surviving company has filed a Form 8-K
with the Securities and Exchange Commission describing the
merger and related transactions. Detailed information
concerning Internet Services Network, Inc. may be obtained
from its filings under the Exchange Act which are found the
EDGAR archives page of the Securities and Exchange
Commission's Website at www.sec.gov.
On October 19, 2000, PCBoat.com, Inc. ("Depot"), a
Georgia corporation, merged with and into Illinois Creek
Corp., which changed its name to "Boats Depot, Inc." In
connection with that merger, the outstanding shares of Depot
were converted into 26,416,945 shares of the surviving
companies common stock. On October 20, 2000, Mr. Davis
resigned as an officer and director of that company. Mr.
Davis continues to own 601,062 shares of the common stock and
warrants to purchase an additional 601,062 shares of common
stock of the surviving company.
ADDITIONAL BLANK CHECK COMPANIES
Mr. Davis is, has been, and may be in the future, the
officer, director and/or beneficial shareholder of other blank
check companies. The initial business purpose of each of
these companies was or is to engage in a merger or acquisition
with an unidentified company or companies and each were or
will be classified as a blank check company until completion
of a business combination. In most instances that a business
combination is transacted with one of these companies, it will
be required to file a Current Report on Form 8-K noticing the
details of the transaction.
CURRENT BLANK CHECK COMPANIES
As of the date of this filing, Mr. Davis is also the sole
officer and director and the controlling beneficial
shareholder of Harbortown Corp. and Redtop Mountain Corp. The
initial business purpose of each of these companies is to
engage in a business combination with an unidentified company
or companies and each is currently classified as a blank check
company pending completion of a business combination. In most
instances that a business combination is transacted with a
blank check company, it will be required to file a Current
Report on Form 8-K describing the transaction.
CONFLICTS OF INTEREST
The Company's officer and director has organized and
expects to organize other companies of a similar nature and
with a similar purpose as the Company. Consequently, there
are potential inherent conflicts of interest in acting as an
officer and director of the Company. Insofar as the officer
and director is engaged in other business activities,
management anticipates that it will devote only a minor amount
of time to the Company's affairs. The Company does not have
a right of first refusal pertaining to opportunities that come
to management's attention insofar as such opportunities may
relate to the Company's proposed business operations.
A conflict may arise in the event that another blank
check company with which management is affiliated is formed
and actively seeks a target company. It is anticipated that
target companies will be located for the Company and other
blank check companies in chronological order of the date of
formation of such blank check companies or, in the case of
blank check companies formed on the same date, alphabetically.
However, any blank check companies with which management is,
or may be, affiliated may differ from the Company in certain
items such as place of incorporation, number of shares and
shareholders, working capital, types of authorized securities,
or other items. It may be that a target company may be more
suitable for or may prefer a certain blank check company
formed after the Company. In such case, a business
combination might be negotiated on behalf of the more suitable
or preferred blank check company regardless of date of
formation. Mr. Davis will be responsible for seeking,
evaluating, negotiating and consummating a business
combination with a target company which may result in terms
providing benefits to Mr. Davis.
Mr. Davis is a principal of Sims Moss Kline & Davis LLP,
a securities law firm with offices in Atlanta, Georgia and New
York, New York. As such, demands may be placed on the time of
Mr. Davis which will detract from the amount of time he is
able to devote to the Company. Mr. Davis intends to devote as
much time to the activities of the Company as required.
However, should such a conflict arise, there is no assurance
that Mr. Davis would not attend to other matters prior to
those of the Company. Mr. Davis projects that initially up to
ten hours per month of his time may be spent locating a target
company which amount of time would increase when the analysis
of, and negotiations and consummation with, a target company
are conducted.
The terms of business combination may include such terms
as Mr. Davis remaining a director or officer of the Company
and/or the continuing securities or other legal work of the
Company being handled by the law firm of which Mr. Davis is
the principal. The terms of a business combination may
provide for a payment by cash or otherwise to finders for the
purchase or retirement of all or part of its common stock of
the Company by a target company or for services rendered
incident to or following a business combination. Mr. Davis
would directly benefit from such employment or payment. Such
benefits may influence Mr. Davis's choice of a target company.
The Company may agree to pay finder's fees, as
appropriate and allowed, to unaffiliated persons who may bring
a target company to the Company where that reference results
in a business combination. No finder's fee of any kind will
be paid by the Company to management or promoters of the
Company or to their associates or affiliates. No loans of any
type have, or will be, made by the Company to management or
promoters of the Company or to any of their associates or
affiliates.
The Company will not enter into a business combination,
or acquire any assets of any kind for its securities, in which
management of the Company or any affiliates or associates have
any interest, direct or indirect.
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.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under
the Securities Act of 1933 and the Securities Exchange Act of
1934, management believes the Company will not be subject to
regulation under the Investment Company Act of 1940 insofar as
the Company will not be engaged in the business of investing
or trading in securities. In the event the Company engages in
business combinations which result in the Company holding
passive investment interests in a number of entities the
Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be
required to register as an investment company and could be
expected to incur significant registration and compliance
costs. The Company has obtained no formal determination from
the Securities and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940. Any
violation of such Act would subject the Company to material
adverse consequences.
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.
However, the officer and director of the Company anticipates
receiving benefits as a beneficial shareholder of the Company
and, possibly, in other ways. See "ITEM 5. DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS CONFLICTS OF
INTEREST".
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.
The Company has issued a total of 2,650,000 shares of
Common Stock to the following persons for a total of $530 in
cash:
Name No. of Total Shares Consideration
Gilbert H. Davis 2,500,000 $500
Erik S. Nelson 100,000 $20
ESN Financial, L.P. 50,000 $10
With respect to these sales, the Company relied upon
Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act").
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, par value $.0001 per
share, and 20,000,000 shares of Preferred Stock, par value
$.0001 per share. The following statements relating to the
capital stock set forth the material terms of the Company's
securities; however, reference is made to the more detailed
provisions of, and such statements are qualified in their
entirety by reference to, the Certificate of Incorporation and
the By-laws, copies of which are filed as exhibits to this
registration statement.
COMMON STOCK
Holders of shares of common stock are entitled to one
vote for each share on all matters to be voted on by the
stockholders. Holders of common stock do not have cumulative
voting rights. Holders of common stock are entitled to share
ratably in dividends, if any, as may be declared from time to
time by the Board of Directors in its discretion from funds
legally available therefor. In the event of a liquidation,
dissolution or winding up of the Company, the holders of
common stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. All of
the outstanding shares of common stock are fully paid and
non-assessable.
Holders of common stock have no preemptive rights to
purchase the Company's common stock. There are no conversion
or redemption rights or sinking fund provisions with respect
to the common stock.
PREFERRED STOCK
The Board of Directors is authorized to provide for the
issuance of shares of preferred stock in series and, by filing
a certificate pursuant to the applicable law of Delaware, to
establish from time to time the number of shares to be
included in each such series, and to fix the designation,
powers, preferences and rights of the shares of each such
series and the qualifications, limitations or restrictions
thereof without any further vote or action by the
shareholders. Any shares of preferred stock so issued would
have priority over the common stock with respect to dividend
or liquidation rights. Any future issuance of preferred stock
may have the effect of delaying, deferring or preventing a
change in control of the Company without further action by the
shareholders and may adversely affect the voting and other
rights of the holders of common stock. At present, the
Company has no plans to issue any preferred stock nor adopt
any series, preferences or other classification of preferred
stock.
The issuance of shares of preferred stock, or the
issuance of rights to purchase such shares, could be used to
discourage an unsolicited acquisition proposal. For instance,
the issuance of a series of preferred stock might impede a
business combination by including class voting rights that
would enable the holder to block such a transaction, or
facilitate a business combination by including voting rights
that would provide a required percentage vote of the
stockholders. In addition, under certain circumstances, the
issuance of preferred stock could adversely affect the voting
power of the holders of the common stock. Although the Board
of Directors is required to make any determination to issue
such stock based on its judgment as to the best interests of
the stockholders of the Company, the Board of Directors could
act in a manner that would discourage an acquisition attempt
or other transaction that some, or a majority, of the
stockholders might believe to be in their best interests or in
which stockholders might receive a premium for their stock
over the then market price of such stock. The Board of
Directors does not at present intend to seek stockholder
approval prior to any issuance of currently authorized stock,
unless otherwise required by law or stock exchange rules. The
Company has no present plans to issue any preferred stock.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's
revenues and earnings, if any, capital requirements and
financial conditions. The payment of dividends, if any, will
be within the discretion of the Company's Board of Directors.
The Company presently intends to retain all earnings, if any,
for use in its business operations and accordingly, the Board
of Directors does not anticipate declaring any dividends prior
to a business combination.
TRADING OF SECURITIES IN SECONDARY MARKET
The National Securities Market Improvement Act of 1996
limited the authority of states to impose restrictions upon
sales of securities made pursuant to Sections 4(1) and 4(3) of
the Securities Act of companies which file reports under
Sections 13 or 15(d) of the Exchange Act. Upon effectiveness
of this Registration Statement, the Company will be required
to, and will, file reports under Section 13 of the Exchange
Act. As a result, sales of the Company's common stock in the
secondary market by the holders thereof may then be made
pursuant to Section 4(1) of the Securities Act (sales other
than by an issuer, underwriter or broker).
Following a business combination, a target company will
normally wish to list the Company's common stock for trading
in one or more United States markets. The target company may
elect to apply for such listing immediately following the
business combination or at some later time.
In order to qualify for listing on the Nasdaq SmallCap
Market, a company must have at least (i) net tangible assets
of $4,000,000 or market capitalization of $50,000,000 or net
income for two of the last three years of $750,000; (ii)
public float of 1,000,000 shares with a market value of
$5,000,000; (iii) a bid price of $4.00; (iv) three market
makers; (v) 300 shareholders and (vi) an operating history of
one year or, if less than one year, $50,000,000 in market
capitalization. For continued listing on the Nasdaq SmallCap
Market, a company must have at least (i) net tangible assets
of $2,000,000 or market capitalization of $35,000,000 or net
income for two of the last three years of $500,000; (ii) a
public float of 500,000 shares with a market value of
$1,000,000; (iii) a bid price of $1.00; (iv) two market
makers; and (v) 300 shareholders.
If, after a business combination, the Company does not
meet the qualifications for listing on the Nasdaq SmallCap
Market, the Company's may apply for quotation of its
securities on the NASD OTC Bulletin Board. In certain cases
the Company may elect to have its securities initially quoted
in the "pink sheets" published by the National Quotation
Bureau, Inc.
TRANSFER AGENT
It is anticipated that Jersey Transfer & Trust Company,
Verona, New Jersey, will act as transfer agent for the common
stock of the Company.
GLOSSARY
"Blank Check" Company As defined in Section 7(b)(3) of the
Securities Act, a "blank check" company
is a development stage company that has
no specific business plan or purpose or
has indicated that its business plan is
to engage in a merger or acquisition
with an unidentified company or
companies and is issuing "penny stock"
securities as defined in Rule 3a51-1 of
the Exchange Act.
Business Combination Normally a merger, stock-for-stock
exchange or stock-for-assets exchange
between the Registrant and a target
company.
The Company or
the Registrant The corporation whose common stock is the
subject of this Registration Statement.
Exchange Act The Securities Exchange Act of 1934, as
amended.
"Penny Stock"
Security As defined in Rule 3a51-1 of the Exchange
Act, a "penny stock" security is any
equity security other than a security (i)
that is a reported security (ii) that is
issued by an investment company (iii)
that is a put or call issued by the
Option Clearing Corporation (iv) that has
a price of $5.00 or more (except for
purposes of Rule 419 of the Securities
Act) (v) that is registered on a national
securities exchange (vi) that is
authorized for quotation on the Nasdaq
Stock Market, unless other provisions of
Rule 3a51-1 are not satisfied, or (vii)
that is issued by an issuer with (a) net
tangible assets in excess of $2,000,000,
if in continuous operation for more than
three years or $5,000,000 if in operation
for less than three years or (b) average
revenue of at least $6,000,000 for the
last three years.
Securities Act The Securities Act of 1933, as amended.
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
(A) MARKET PRICE. There is no trading market for the
Company's Common Stock at present and there has been no
trading market to date. There is no assurance that a trading
market will ever develop or, if such a market does develop,
that it will continue.
The Securities and Exchange Commission has adopted Rule
15g-9 which establishes the definition of a "penny stock," for
purposes relevant to the Company, as any equity security that
has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny
stock, unless exempt, the rules require: (i) that a broker or
dealer approve a person's account for transactions in penny
stocks and (ii) the broker or dealer receive from the investor
a written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased. In
order to approve a person's account for transactions in penny
stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the
person; and (ii) make a reasonable determination that the
transactions in penny stocks are suitable for that person and
that person has sufficient knowledge and experience in
financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also
deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the Commission relating to the
penny stock market, which, in highlight form, (i) sets forth
the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a
signed, written agreement from the investor prior to the
transaction. Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held
in the account and information on the limited market in penny
stocks.
(B) HOLDERS. There is one holder of the Company's
Common Stock. The issued and outstanding shares of the
Company's Common Stock were issued in accordance with the
exemptions from registration afforded by Section 4(2) of the
Securities Act of 1933.
(C) DIVIDENDS. The Company has not paid any dividends
to date, and has no plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or
against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Company has not changed accountants since its
formation and there are no disagreements with the findings of
its accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company has sold
securities which were not registered as follows:
Date Name No. of Shares Consideration
Feb 8, 2000 Gilbert H. Davis 2,500,000 $500
Feb 21, 2000 Erik S. Nelson 100,000 $20
Feb 21, 2000 ESN Financial, L.P. 50,000 $10
Mr. Davis is the sole director, controlling shareholder
and president of the Company. With respect to each sale, the
Company relied upon Section 4(2) of the Securities Act of
1933, as amended.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State
of Delaware provides that a certificate of incorporation may
contain a provision eliminating the personal liability of a
director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director provided
that such provision shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section
174 (relating to liability for unauthorized acquisitions or
redemptions of, or dividends on, capital stock) of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper
personal benefit. The Company's Certificate of Incorporation
contains such a provision.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO
DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE COMPANY
PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE OPINION OF THE
SECURITIES AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION
IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS
THEREFORE UNENFORCEABLE.
PART III
FINANCIAL STATEMENTS
Set forth below are the audited financial statements for
the Company as of September 30, 2000. The following financial
statements are attached to this report and filed as a part
thereof.
Waterfalls Corp.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF September 30, 2000
Waterfalls Corp.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
INDEPENDENT AUDITORS' REPORT F-1
BALANCE SHEET AS OF September 30, 2000 F-2
STATEMENT OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS) FROM NOVEMBER 4, 1999 (DATE OF
INCEPTION) TO September 30, 2000 F-3
STATEMENT OF STOCKHOLDERS' EQUITY FOR THE
PERIOD FROM NOVEMBER 4, 1999 (DATE OF
INCEPTION) TO September 30, 2000 F-4
STATEMENT OF CASH FLOWS FROM NOVEMBER 4, 1999
(DATE OF INCEPTION) TO September 30, 2000 F-5
NOTES TO FINANCIAL STATEMENTS F-6 to
F-7
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Waterfalls Corp.
(A Development Stage Company)
We have audited the accompanying balance sheet of Waterfalls
Corp. (a development stage company)(the "Company") as of
September 30, 2000 and the related statements of operations
and comprehensive income (loss), stockholders' equity and cash
flows from November 4, 1999 (Date of Inception) to September
30, 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 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 financial statements referred to above
present fairly in all material respects, the financial
position of the Company as of September 30, 2000,and the
results of operations and cash flows from November 4, 1999
(Date of Inception) to September 30, 2000, in conformity with
generally accepted accounting principles.
Massella, Tomaro & Co., LLP
Jericho, New York
November 16, 2000
Waterfalls Corp.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF September 30, 2000
ASSETS
Cash $ 70
Total Current Assets 70
TOTAL ASSETS $ 70
LIABILITIES AND STOCKHOLDERS= EQUITY
LIABILITIES $ -
STOCKHOLDERS' EQUITY
Preferred Stock, $.0001 par value, 20 million
shares authorized, zero issued and outstanding -
Common Stock, $.0001 par value, 100 million
shares authorized 2,650,000 issued and
outstanding (see Note 2) 265
Additional Paid-In Capital 265
Accumulated Deficit During Development Stage (460)
Total Stockholders' Equity 70
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 70
See accompanying notes to financial statements.
Waterfalls Corp.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE PERIOD FROM NOVEMBER 4, 1999 (DATE OF INCEPTION)
TO September 30, 2000
Income $ -
Expenses:
Selling, general and
administrative expenses 460
Total Expenses 460
Loss Before Provision for Income Taxes (460)
Provision for Income Taxes
Net (Loss) (460)
Other Items of Comprehensive Income (Loss)
Comprehensive Net (Loss) $ (460)
Basic:
Net (Loss) $ NIL
Weighted Average Number of
Common Shares Outstanding 2,650,000
See accompanying notes to financial statements.
Waterfalls Corp.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM NOVEMBER 4, 1999 (DATE OF INCEPTION)
TO September 30, 2000
Accumulated
Additional Deficit Total
Common Stock Paid-in During the Stockholders'
Shares Amount Capital Development Stage Equity
Issuance of
common stock
upon capit-
alization of
company 2,650,000 $ 265 $ 265 $ - $ 530
Net loss from
November 4, 1999
(date of inception)
to September
30, 2000 (460) (460)
Balances at
September 30,
2000 2,650,000 $ 265 $ 265 $ (460) $ 70
See accompanying notes to financial statements
Waterfalls Corp.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM NOVEMBER 4, 1999 (DATE OF INCEPTION)
TO September 30, 2000
Cash Flows from Operating Activities:
Net (Loss) $ (460)
Net Cash Used for Operating Activities (460)
Cash Flows from Financing Activities:
Proceeds from Initial Capitalization
of Company 530
Net Cash Provided by Financing Activities 530
Net Increase in Cash 70
Cash, Beginning of Period --
Cash, End of Period $ 70
See accompanying notes to financial statements
Waterfalls Corp.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF September 30, 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Business Operations
Waterfalls Corp. (a development stage company) ("the
Company") was incorporated in Delaware on November 4, 1999 to
serve as a vehicle to effect a merger, exchange of capital stock,
asset acquisition or other business combination with a domestic
or foreign private business. At September 30, 2000, the Company
had not yet commenced any formal business operations, and all
activity to date relates to the Company's formation and proposed
fund raising. The Company's fiscal year end is September 30.
The Company's ability to commence operations is contingent
upon its ability to identify a prospective target business and
raise the capital it will require through the issuance of equity
securities, debt securities, bank borrowings or a combination
thereof.
B. Use of Estimates
The preparation of the financial statements in conformity
with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
NOTE 2 - STOCKHOLDERS' EQUITY
A. Preferred Stock
The Company is authorized to issue 20,000,000 shares of
preferred stock at $.0001 par value, with such designations,
voting and other rights and preferences as may be determined from
time to time by the Board of Directors.
B. Common Stock
The Company is authorized to issue 100,000,000 shares of
common stock at $.0001 par value. As of September 30, 2000, the
Company had issued 2,650,000 shares of its common stock to its
founders for aggregate consideration of $530.
NOTE 3 - RELATED PARTIES
A. Legal Counsel.
Legal counsel to the Company is a firm of which the sole
director and controlling shareholder of the Company is a partner.
PART III
ITEM 1. INDEX TO EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
(2) Articles of Incorporation and By-laws:
2.1 Certificate of Incorporation
2.2 By-Laws
(10)(a) Consents - Experts
10.1 Consent of Accountants
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the Registrant caused this Registration Statement to be
signed on its behalf by the undersigned thereunto duly
authorized.
Date: November 16, 2000 Waterfalls Corp.
By: /s/ Gilbert H. Davis
Gilbert H. Davis, Director and President
Exhibit 2.1
CERTIFICATE OF INCORPORATION
OF
Waterfalls CORP.
ARTICLE ONE
Name
The name of the Corporation is Waterfalls Corp.
ARTICLE TWO
Duration
The Corporation shall have perpetual existence.
ARTICLE THREE
Purpose
The purpose for which this Corporation is organized is to
engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
ARTICLE FOUR
Shares
The total number of shares of stock which the Corporation
shall have authority to issue is 120,000,000 shares, consisting
of 100,000,000 shares of Common Stock having a par value of
$.0001 per share and 20,000,000 shares of Preferred Stock having
a par value of $.0001 per share.
The Board of Directors is authorized to provide for the
issuance of the shares of Preferred Stock in series and, by
filing a certificate pursuant to the applicable law of the State
of Delaware, to establish from time to time the number of shares
to be included in each such series, and to fix the designation,
powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each
series of Preferred Stock shall include, but not be limited to,
determination of the following:
A. The number of shares constituting that series and the
distinctive designation of that series;
B. The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of payment of
dividends on share of that series;
C. Whether that series shall have voting rights, in
addition to the voting rights provided by law, and, if so, the
terms of such voting rights;
D. Whether that series shall have conversion privileges,
and, if so, the terms and conditions of such conversion,
including provision for adjustment of the conversion rate in such
events as the Board of Directors shall determine;
E. Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such
redemption, including the date or dates upon or after which they
shall be redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions and
at different redemption dates;
F. Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the
terms and amount of such sinking fund;
G. The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, and the relative rights of priority, if any,
of payment of shares of that series; and
H. Any other relative rights, preferences and limitations
of that series.
ARTICLE FIVE
Commencement of Business
The Corporation is authorized to commence business as soon
as its certificate of incorporation has been filed.
ARTICLE SIX
Principal Office and Registered Agent
The post office address of the initial registered office of
the Corporation and the name of its initial registered agent and
its business address is
Incorporating Services, Ltd.
15 East North Street
P. O. Box 899
Dover, Delaware 19901
The initial registered agent is a resident of the State of
Delaware.
ARTICLE SEVEN
Incorporator
Gilbert H. Davis, Suite 310, 1000 Abernathy Road NE,
Atlanta, Georgia 30328.
ARTICLE EIGHT
Pre-Emptive Rights
No Shareholder or other person shall have any pre-emptive
rights whatsoever.
ARTICLE NINE
By-Laws
The initial by-laws shall be adopted by the Shareholders or
the Board of Directors. The power to alter, amend, or repeal the
by-laws or adopt new by-laws is vested in the Board of Directors,
subject to repeal or change by action of the Shareholders.
ARTICLE TEN
Number of Votes
Each share of Common Stock has one vote on each matter on
which the share is entitled to vote.
ARTICLE ELEVEN
Majority Votes
A majority vote of a quorum of Shareholders (consisting of
the holders of a majority of the shares entitled to vote,
represented in person or by proxy) is sufficient for any action
which requires the vote or concurrence of Shareholders, unless
otherwise required or permitted by law or the by-laws of the
Corporation.
ARTICLE TWELVE
Non-Cumulative Voting
Directors shall be elected by majority vote. Cumulative
voting shall not be permitted.
ARTICLE THIRTEEN
Interested Directors, Officers and Securityholders
A. Validity. If Paragraph (B) is satisfied, no contract or
other transaction between the Corporation and any of its
directors, officers or securityholders, or any corporation or
firm in which any of them are directly or indirectly interested,
shall be invalid solely because of this relationship or because
of the presence of the director, officer or securityholder at the
meeting of the Board of Directors or committee authorizing the
contract or transaction, or his participation or vote in the
meeting or authorization.
B. Disclosure, Approval, Fairness. Paragraph (A) shall
apply only if:
(1) The material facts of the relationship or interest of
each such director, officer or securityholder are known or
disclosed:
(a) to the Board of Directors or the committee and it
nevertheless authorizes or ratifies the contract or transaction
by a majority of the directors present, each such interested
director to be counted in determining whether a quorum is present
but not in calculating the majority necessary to carry the vote;
or
(b) to the Shareholders and they nevertheless authorize or
ratify the contract or transaction by a majority of the shares
present, each such interested person to be counted for quorum and
voting purposes; or
(2) the contract or transaction is fair to the Corporation
as of the time it is authorized or ratified by the Board of
Directors, the committee or the Shareholders.
ARTICLE FOURTEEN
Indemnification and Insurance
A. Persons. The Corporation shall indemnify, to the extent
provided in Paragraphs (B), (D) or (F) and to the extent
permitted from time to time by law:
(1) any person who is or was director, officer, agent or
employee of the Corporation, and
(2) any person who serves or served at the Corporation's
request as a director, officer, agent, employee, partner or
trustee of another corporation or of a partnership, joint
venture, trust or other enterprise.
B. Extent--Derivative Suits. In case of a suit by or in
the right of the Corporation against a person named in Paragraph
(A) by reason of his holding a position named in Paragraph (A),
the Corporation shall indemnify him, if he satisfies the standard
in Paragraph (C), for expenses (including attorney's fees but
excluding amounts paid in settlement) actually and reasonably
incurred by him in connection with the defense or settlement of
the suit.
C. Standard--Derivative Suits. In case of a suit by or in
the right of the Corporation, a person named in Paragraph (A)
shall be indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the
subject of the suit, and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Corporation.
However, he shall not be indemnified in respect of any claim,
issue or matter as to which he has been adjudged liable for
negligence or misconduct in the performance of his duty to the
Corporation unless (and only to the extent that) the court in
which the suit was brought shall determine, upon application,
that despite the adjudication but in view of all the
circumstances, he is fairly and reasonably entitled to indemnity
for such expenses as the court shall deem proper.
D. Extent--Nonderivative Suits. In case of a suit, action
or proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the
Corporation against a person named in Paragraph (A) by reason of
his holding a position named in Paragraph (A), the Corporation
shall indemnify him, if he satisfies the standard in Paragraph
(E), for amounts actually and reasonably incurred by him in
connection with the defense or settlement of the suit as
(1) expenses (including attorneys' fees),
(2) amounts paid in settlement
(3) judgments, and
(4) fines.
E. Standard--Nonderivative Suits. In case of a
nonderivative suit, a person named in Paragraph (A) shall be
indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the
subject of the nonderivative suit, and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the
Corporation and, with respect to any criminal action or
proceeding, he had no reason to believe his conduct was unlawful.
The termination of a nonderivative suit by judgement, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent shall not, of itself, create a presumption that the
person failed to satisfy this Paragraph (E)(2).
F. Determination That Standard Has Been Met. A
determination that the standard of Paragraph (C) or (E) has been
satisfied may be made by a court of law or equity or the
determination may be made by:
(1) a majority of the directors of the Corporation (whether
or not a quorum) who were not parties to the action, suit or
proceeding, or
(2) independent legal counsel (appointed by a majority of
the directors of the Corporation, whether or not a quorum, or
elected by the Shareholders of the Corporation) in a written
opinion, or
(3) the Shareholders of the Corporation.
G. Proration. Anyone making a determination under
Paragraph (F) may determine that a person has met the standard as
to some matters but not as to others, and may reasonably prorate
amounts to be indemnified.
H. Advance Payment. The Corporation may pay in advance any
expenses (including attorney's fees) which may become subject to
indemnification under paragraphs (A) - (G) if:
(1) the Board of Directors authorizes the specific payment
and
(2) the person receiving the payment undertakes in writing
to repay unless it is ultimately determined that he is entitled
to indemnification by the Corporation under Paragraphs (A) - (G).
I. Nonexclusive. The indemnification provided by
Paragraphs (A) - (G) shall not be exclusive of any other rights
to which a person may be entitled by law or by by-law, agreement,
vote of Shareholders or disinterested directors, or otherwise.
J. Continuation. The indemnification and advance payment
provided by Paragraphs (A) - (H) shall continue as to a person
who has ceased to hold a position named in paragraph (A) and
shall inure to his heirs, executors and administrators.
K. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who holds or who has held any
position named in Paragraph (A) against any liability incurred by
him in any such positions or arising out of this status as such,
whether or not the Corporation would have power to indemnify him
against such liability under Paragraphs (A) - (H).
L. Reports. Indemnification payments, advance payments,
and insurance purchases and payments made under Paragraphs (A) -
(K) shall be reported in writing to the Shareholders of the
Corporation with the next notice of annual meeting, or within six
months, whichever is sooner.
M. Amendment of Article. Any changes in the General
Corporation Law of Delaware increasing, decreasing, amending,
changing or otherwise effecting the indemnification of directors,
officers, agents, or employees of the Corporation shall be
incorporated by reference in this Article as of the date of such
changes without further action by the Corporation, its Board of
Directors, of Shareholders, it being the intention of this
Article that directors, officers, agents and employees of the
Corporation shall be indemnified to the maximum degree allowed by
the General Corporation Law of the State of Delaware at all
times.
ARTICLE FIFTEEN
Limitation On Director Liability
A. Scope of Limitation. No person, by virtue of being or
having been a director of the Corporation, shall have any
personal liability for monetary damages to the Corporation or any
of its Shareholders for any breach of fiduciary duty except as to
the extent provided in Paragraph (B).
B. Extent of Limitation. The limitation provided for in
this Article shall not eliminate or limit the liability of a
director to the Corporation or its Shareholders (i) for any
breach of the director's duty of loyalty to the Corporation or
its Shareholders (ii) for any acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of
law (iii) for any unlawful payment of dividends or unlawful stock
purchases or redemptions in violation of Section 174 of the
General Corporation Law of Delaware or (iv) for any transaction
for which the director derived an improper personal benefit.
IN WITNESS WHEREOF, the incorporator hereunto has executed
this certificate of incorporation on this 4th day of November,
1999.
/s/ Gilbert H. Davis
Gilbert H. Davis, Incorporator
Exhibit 2.2
Waterfalls Corp.
BY-LAWS
ARTICLE I
The Stockholders
SECTION 1.1. ANNUAL MEETING. The annual meeting of the
stockholders of Waterfalls Corp. (the "Corporation") shall be
held on the third Thursday in May of each year at 10:30 a.m.
local time, or at such other date or time as shall be designated
from time to time by the Board of Directors and stated in the
notice of the meeting, for the election of directors and for the
transaction of such other business as may come before the
meeting.
SECTION 1.2. SPECIAL MEETINGS. A special meeting of the
stockholders may be called at any time by the written resolution
or request of two-thirds or more of the members of the Board of
Directors, the president, or any executive vice president and
shall be called upon the written request of the holders of two-
thirds or more in amount, of each class or series of the capital
stock of the Corporation entitled to vote at such meeting on the
matters(s) that are the subject of the proposed meeting, such
written request in each case to specify the purpose or purposes
for which such meeting shall be called, and with respect to
stockholder proposals, shall further comply with the requirements
of this Article.
SECTION 1.3. NOTICE OF MEETINGS. Written notice of each
meeting of stockholders, whether annual or special, stating the
date, hour and place where it is to be held, shall be served
either personally or by mail, not less than fifteen nor more than
sixty days before the meeting, upon each stockholder of record
entitled to vote at such meeting, and to any other stockholder to
whom the giving of notice may be required by law. Notice of a
special meeting shall also state the purpose or purposes for
which the meeting is called and shall indicate that it is being
issued by, or at the direction of, the person or persons calling
the meeting. If, at any meeting, action is proposed to be taken
that would, if taken, entitle stockholders to receive payment for
their stock, the notice of such meeting shall include a statement
of that purpose and to that effect. If mailed, notice shall be
deemed to be delivered when deposited in the United States mail
or with any private express mail service, postage or delivery fee
prepaid, and shall be directed to each such stockholder at his
address, as it appears on the records of the stockholders of the
Corporation, unless he shall have previously filed with the
secretary of the Corporation a written request that notices
intended for him be mailed to some other address, in which case,
it shall be mailed to the address designated in such request.
SECTION 1.4. FIXING DATE OF RECORD. (a) In order that the
Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders, or any adjournment
thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than sixty nor less than ten
days before the date of such meeting. If no record date is fixed
by the Board of Directors, the record date for determining
stockholders entitled to notice of, or to vote at, a meeting of
stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or if notice is
waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of
stockholders of record entitled to notice of, or to vote at, a
meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix
a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing
without a meeting (to the extent that such action by written
consent is permitted by law, the Certificate of Incorporation or
these By-Laws), the Board of Directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten days after
the date upon which the resolution fixing the record date is
adopted by the Board of Directors. If no record date has been
fixed by the Board of Directors, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors
is required by law, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be
taken is delivered to the Corporation by delivery to its
registered office in its state of incorporation, its principal
place of business, or an officer or agent of the Corporation
having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's
registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed
by the Board of Directors and prior action by the Board of
Directors is required by law, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such
prior action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record
date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of
business on the day on which the Board of Directors adopts the
resolution relating thereto.
SECTION 1.5. INSPECTORS. At each meeting of the
stockholders, the polls shall be opened and closed and the
proxies and ballots shall be received and be taken in charge.
All questions touching on the qualification of voters and the
validity of proxies and the acceptance or rejection of votes,
shall be decided by one or more inspectors. Such inspectors
shall be appointed by the Board of Directors before or at the
meeting, or, if no such appointment shall have been made, then by
the presiding officer at the meeting. If for any reason any of
the inspectors previously appointed shall fail to attend or
refuse or be unable to serve, inspectors in place of any so
failing to attend or refusing or unable to serve shall be
appointed in like manner.
SECTION 1.6. QUORUM. At any meeting of the stockholders,
the holders of a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum of
the stockholders for all purposes, unless the representation of
a larger number shall be required by law, and, in that case, the
representation of the number so required shall constitute a
quorum.
If the holders of the amount of stock necessary to
constitute a quorum shall fail to attend in person or by proxy at
the time and place fixed in accordance with these By-Laws for an
annual or special meeting, a majority in interest of the
stockholders present in person or by proxy may adjourn, from time
to time, without notice other than by announcement at the
meeting, until holders of the amount of stock requisite to
constitute a quorum shall attend. At any such adjourned meeting
at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as
originally notified.
SECTION 1.7. BUSINESS. The chairman of the Board, if any,
the president, or in his absence the vice-chairman, if any, or an
executive vice president, in the order named, shall call meetings
of the stockholders to order, and shall act as chairman of such
meeting; provided, however, that the Board of Directors or
executive committee may appoint any stockholder to act as
chairman of any meeting in the absence of the chairman of the
Board. The secretary of the Corporation shall act as secretary
at all meetings of the stockholders, but in the absence of the
secretary at any meeting of the stockholders, the presiding
officer may appoint any person to act as secretary of the
meeting.
SECTION 1.8. STOCKHOLDER PROPOSALS. No proposal by a
stockholder shall be presented for vote at a special or annual
meeting of stockholders unless such stockholder shall, not later
than the close of business on the fifth day following the date on
which notice of the meeting is first given to stockholders,
provide the Board of Directors or the secretary of the
Corporation with written notice of intention to present a
proposal for action at the forthcoming meeting of stockholders,
which notice shall include the name and address of such
stockholder, the number of voting securities that he holds of
record and that he holds beneficially, the text of the proposal
to be presented to the meeting and a statement in support of the
proposal.
Any stockholder who was a stockholder of record on the
applicable record date may make any other proposal at an annual
meeting or special meeting of stockholders and the same may be
discussed and considered, but unless stated in writing and filed
with the Board of Directors or the secretary prior to the date
set forth herein above, such proposal shall be laid over for
action at an adjourned, special, or annual meeting of the
stockholders taking place sixty days or more thereafter. This
provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of officers,
directors, and committees, but in connection with such reports,
no new business proposed by a stockholder, qua stockholder, shall
be acted upon at such annual meeting unless stated and filed as
herein provided.
Notwithstanding any other provision of these By-Laws, the
Corporation shall be under no obligation to include any
stockholder proposal in its proxy statement materials or
otherwise present any such proposal to stockholders at a special
or annual meeting of stockholders if the Board of Directors
reasonably believes the proponents thereof have not complied with
Sections 13 or 14 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder; nor shall the
Corporation be required to include any stockholder proposal not
required to be included in its proxy materials to stockholders in
accordance with any such section, rule or regulation.
SECTION 1.9. PROXIES. At all meetings of stockholders, a
stockholder entitled to vote may vote either in person or by
proxy executed in writing by the stockholder or by his duly
authorized attorney-in-fact. Such proxy shall be filed with the
secretary before or at the time of the meeting. No proxy shall
be valid after eleven months from the date of its execution,
unless otherwise provided in the proxy.
SECTION 1.10. VOTING BY BALLOT. The votes for directors,
and upon the demand of any stockholder or when required by law,
the votes upon any question before the meeting, shall be by
ballot.
SECTION 1.11. VOTING LISTS. The officer who has charge of
the stock ledger of the Corporation shall prepare and make, at
least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting,
arranged in alphabetical order, and showing the address of each
stockholder and the number of shares of stock registered in the
name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours for a period of at least
ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified
in the notice of the meeting, or if not so specified, at the
place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the
whole time thereof and may be inspected by any stockholder who is
present.
SECTION 1.12. PLACE OF MEETING. The Board of Directors may
designate any place, either within or without the state of
incorporation, as the place of meeting for any annual meeting or
any special meeting called by the Board of Directors. If no
designation is made or if a special meeting is otherwise called,
the place of meeting shall be the principal office of the
Corporation.
SECTION 1.13. VOTING OF STOCK OF CERTAIN HOLDERS. Shares
of capital stock of the Corporation standing in the name of
another corporation, domestic or foreign, may be voted by such
officer, agent, or proxy as the by-laws of such corporation may
prescribe, or in the absence of such provision, as the board of
directors of such corporation may determine.
Shares of capital stock of the Corporation standing in the
name of a deceased person, a minor ward or an incompetent person
may be voted by his administrator, executor, court-appointed
guardian or conservator, either in person or by proxy, without a
transfer of such stock into the name of such administrator,
executor, court-appointed guardian or conservator. Shares of
capital stock of the Corporation standing in the name of a
trustee may be voted by him, either in person or by proxy.
Shares of capital stock of the Corporation standing in the
name of a receiver may be voted, either in person or by proxy, by
such receiver, and stock held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name if authority to do so is contained in any
appropriate order of the court by which such receiver was
appointed.
A stockholder whose stock is pledged shall be entitled to
vote such stock, either in person or by proxy, until the stock
has been transferred into the name of the pledgee, and thereafter
the pledgee shall be entitled to vote, either in person or by
proxy, the stock so transferred.
Shares of its own capital stock belonging to this
Corporation shall not be voted, directly or indirectly, at any
meeting and shall not be counted in determining the total number
of outstanding stock at any given time, but shares of its own
stock held by it in a fiduciary capacity may be voted and shall
be counted in determining the total number of outstanding stock
at any given time.
ARTICLE II
Board of Directors
SECTION 2.1. GENERAL POWERS. The business, affairs, and
the property of the Corporation shall be managed and controlled
by the Board of Directors (the "Board"), and, except as otherwise
expressly provided by law, the Certificate of Incorporation or
these By-Laws, all of the powers of the Corporation shall be
vested in the Board.
SECTION 2.2. NUMBER OF DIRECTORS. The number of directors
which shall constitute the whole Board shall be not fewer than
one nor more than five. Within the limits above specified, the
number of directors shall be determined by the Board of Directors
pursuant to a resolution adopted by a majority of the directors
then in office.
SECTION 2.3. ELECTION, TERM AND REMOVAL. Directors shall
be elected at the annual meeting of stockholders to succeed those
directors whose terms have expired. Each director shall hold
office for the term for which elected and until his or her
successor shall be elected and qualified. Directors need not be
stockholders. A director may be removed from office at a meeting
expressly called for that purpose by the vote of not less than a
majority of the outstanding capital stock entitled to vote at an
election of directors.
SECTION 2.4. VACANCIES. Vacancies in the Board of
Directors, including vacancies resulting from an increase in the
number of directors, may be filled by the affirmative vote of a
majority of the remaining directors then in office, though less
than a quorum; except that vacancies resulting from removal from
office by a vote of the stockholders may be filled by the
stockholders at the same meeting at which such removal occurs
provided that the holders of not less than a majority of the
outstanding capital stock of the Corporation (assessed upon the
basis of votes and not on the basis of number of shares) entitled
to vote for the election of directors, voting together as a
single class, shall vote for each replacement director. All
directors elected to fill vacancies shall hold office for a term
expiring at the time of the next annual meeting of stockholders
and upon election and qualification of his successor. No
decrease in the number of directors constituting the Board of
Directors shall shorten the term of an incumbent director.
SECTION 2.5. RESIGNATIONS. Any director of the Corporation
may resign at any time by giving written notice to the president
or to the secretary of the Corporation. The resignation of any
director shall take effect at the time specified therein and,
unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 2.6. PLACE OF MEETINGS, ETC. The Board of
Directors may hold its meetings, and may have an office and keep
the books of the Corporation (except as otherwise may be provided
for by law), in such place or places in or outside the state of
incorporation as the Board from time to time may determine.
SECTION 2.7. REGULAR MEETINGS. Regular meetings of the
Board of Directors shall be held as soon as practicable after
adjournment of the annual meeting of stockholders at such time
and place as the Board of Directors may fix. No notice shall be
required for any such regular meeting of the Board.
SECTION 2.8. SPECIAL MEETINGS. Special meetings of the
Board of Directors shall be held at places and times fixed by
resolution of the Board of Directors, or upon call of the
chairman of the Board, if any, or vice-chairman of the Board, if
any, the president, an executive vice president or two-thirds of
the directors then in office.
The secretary or officer performing the secretary's duties
shall give not less than twenty-four hours' notice by letter,
telegraph or telephone (or in person) of all special meetings of
the Board of Directors, provided that notice need not given of
the annual meeting or of regular meetings held at times and
places fixed by resolution of the Board. Meetings may be held at
any time without notice if all of the directors are present, or
if those not present waive notice in writing either before or
after the meeting. The notice of meetings of the Board need not
state the purpose of the meeting.
SECTION 2.9. PARTICIPATION BY CONFERENCE TELEPHONE.
Members of the Board of Directors of the Corporation, or any
committee thereof, may participate in a regular or special or any
other meeting of the Board or committee by means of conference
telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and
such participation shall constitute presence in person at such
meeting.
SECTION 2.10. ACTION BY WRITTEN CONSENT. Any action
required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof, may be taken without a
meeting if prior or subsequent to such action all the members of
the Board or such committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the
minutes of the proceedings of the Board or committee.
SECTION 2.11. QUORUM. A majority of the total number of
directors then in office shall constitute a quorum for the
transaction of business; but if at any meeting of the Board there
be less than a quorum present, a majority of those present may
adjourn the meeting from time to time.
SECTION 2.12. BUSINESS. Business shall be transacted at
meetings of the Board of Directors in such order as the Board may
determine. At all meetings of the Board of Directors, the
chairman of the Board, if any, the president, or in his absence
the vice-chairman, if any, or an executive vice president, in the
order named, shall preside.
SECTION 2.13. INTEREST OF DIRECTORS IN CONTRACTS. (a) No
contract or transaction between the Corporation and one or more
of its directors or officers, or between the Corporation and any
other corporation, partnership, association, or other
organization in which one or more of the Corporation's directors
or officers, are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or
solely because the director or officer is present at or
participates in the meeting of the Board or committee which
authorizes the contract or transaction, or solely because his or
their votes are counted for such purpose, if:
(1) The material facts as to his relationship or
interest and as to the contract or
transaction are disclosed or are known to
the Board of Directors or the committee,
and the Board or committee in good faith
authorizes the contract or transaction by
the affirmative votes of a majority of the
disinterested directors, even though the
disinterested directors be less than a
quorum; or
(2) The material facts as to his relationship or
interest and as to the contract or
transaction are disclosed or are known to
the stockholders entitled to vote thereon,
and the contract or transaction is
specifically approved in good faith by vote
of the stockholders; or
The contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, a committee of the
Board of Directors or the stockholders.
(b)Interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors
or of a committee which authorizes the contract or
transaction.
SECTION 2.14. COMPENSATION OF DIRECTORS. Each
director of the Corporation who is not a salaried officer or
employee of the Corporation, or of a subsidiary of the
Corporation, shall receive such allowances for serving as a
director and such fees for attendance at meetings of the
Board of Directors or the executive committee or any other
committee appointed by the Board as the Board may from time
to time determine.
SECTION 2.15. LOANS TO OFFICERS OR EMPLOYEES. The
Board of Directors may lend money to, guarantee any
obligation of, or otherwise assist, any officer or other
employee of the Corporation or of any subsidiary, whether or
not such officer or employee is also a director of the
Corporation, whenever, in the judgment of the directors,
such loan, guarantee, or assistance may reasonably be
expected to benefit the Corporation; provided, however, that
any such loan, guarantee, or other assistance given to an
officer or employee who is also a director of the
Corporation must be authorized by a majority of the entire
Board of Directors. Any such loan, guarantee, or other
assistance may be made with or without interest and may be
unsecured or secured in such manner as the Board of
Directors shall approve, including, but not limited to, a
pledge of shares of the Corporation, and may be made upon
such other terms and conditions as the Board of Directors
may determine.
SECTION 2.16. NOMINATION. Subject to the rights of
holders of any class or series of stock having a preference
over the common stock as to dividends or upon liquidation,
nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote in
the election of directors generally. However, any
stockholder entitled to vote in the election of directors
generally may nominate one or more persons for election as
directors at a meeting only if written notice of such
stockholders' intent to make such nomination or nominations
has been given, either by personal delivery or by United
States mail, postage prepaid, to the secretary of the
Corporation not later than (i) with respect to an election
to be held at an annual meeting of stockholders, the close
of business on the last day of the eighth month after the
immediately preceding annual meeting of stockholders, and
(ii) with respect to an election to be held at a special
meeting of stockholders for the election of directors, the
close of business on the fifth day following the date on
which notice of such meeting is first given to stockholders.
Each such notice shall set forth: (a) the name and address
of the stockholder who intends to make the nomination and of
the person or persons to be nominated; (b) a representation
that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (c) a description
of all arrangements or understandings between the
stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder;
(d) such other information regarding each nominee proposed
by such stockholder as would be required to be included in
a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission, had the nominee been
nominated, or intended to be nominated, by the Board of
Directors, and; (e) the consent of each nominee to serve as
a director of the Corporation if so elected. The presiding
officer at the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the
foregoing procedure.
ARTICLE III
Committees
SECTION 3.1. COMMITTEES. The Board of Directors, by
resolution adopted by a majority of the number of directors
then fixed by these By-Laws or resolution thereto, may
establish such standing or special committees of the Board
as it may deem advisable, and the members, terms, and
authority of such committees shall be set forth in the
resolutions establishing such committee.
SECTION 3.2. EXECUTIVE COMMITTEE NUMBER AND TERM OF
OFFICE. The Board of Directors may, at any meeting, by
majority vote of the Board of Directors, elect from the
directors an executive committee. The executive committee
shall consist of such number of members as may be fixed from
time to time by resolution of the Board of Directors. The
Board of Directors may designate a chairman of the committee
who shall preside at all meetings thereof, and the committee
shall designate a member thereof to preside in the absence
of the chairman.
SECTION 3.3. EXECUTIVE COMMITTEE POWERS. The
executive committee may, while the Board of Directors is not
in session, exercise all or any of the powers of the Board
of Directors in all cases in which specific directions shall
not have been given by the Board of Directors; except that
the executive committee shall not have the power or
authority of the Board of Directors to (i) amend the
Certificate of Incorporation or the By-Laws of the
Corporation, (ii) fill vacancies on the Board of Directors,
(iii) adopt an agreement or certification of ownership,
merger or consolidation, (iv) recommend to the stockholders
the sale, lease or exchange of all or substantially all of
the Corporation's property and assets, or a dissolution of
the Corporation or a revocation of a dissolution, (v)
declare a dividend, or (vi) authorize the issuance of stock.
SECTION 3.4. EXECUTIVE COMMITTEE MEETINGS. Regular
and special meetings of the executive committee may be
called and held subject to the same requirements with
respect to time, place and notice as are specified in these
By-Laws for regular and special meetings of the Board of
Directors. Special meetings of the executive committee may
be called by any member thereof. Unless otherwise indicated
in the notice thereof, any and all business may be
transacted at a special or regular meeting of the executive
meeting if a quorum is present. At any meeting at which
every member of the executive committee shall be present, in
person or by telephone, even though without any notice, any
business may be transacted. All action by the executive
committee shall be reported to the Board of Directors at its
meeting next succeeding such action.
The executive committee shall fix its own rules of
procedure, and shall meet where and as provided by such
rules or by resolution of the Board of Directors, but in
every case the presence of a majority of the total number of
members of the executive committee shall be necessary to
constitute a quorum. In every case, the affirmative vote of
a quorum shall be necessary for the adoption of any
resolution.
SECTION 3.5. EXECUTIVE COMMITTEE VACANCIES. The Board
of Directors, by majority vote of the Board of Directors
then in office, shall fill vacancies in the executive
committee by election from the directors.
ARTICLE IV
The Officers
SECTION 4.1. NUMBER AND TERM OF OFFICE. The officers
of the Corporation shall consist of, as the Board of
Directors may determine and appoint from time to time, a
chief executive officer, a president, one or more executive
vice-presidents, a secretary, a treasurer, a controller,
and/or such other officers as may from time to time be
elected or appointed by the Board of Directors, including
such additional vice-presidents with such designations, if
any, as may be determined by the Board of Directors and such
assistant secretaries and assistant treasurers. In
addition, the Board of Directors may elect a chairman of the
Board and may also elect a vice-chairman as officers of the
Corporation. Any two or more offices may be held by the
same person. In its discretion, the Board of Directors may
leave unfilled any office except as may be required by law.
The officers of the Corporation shall be elected or
appointed from time to time by the Board of Directors. Each
officer shall hold office until his successor shall have
been duly elected or appointed or until his death or until
he shall resign or shall have been removed by the Board of
Directors.
Each of the salaried officers of the Corporation shall
devote his entire time, skill and energy to the business of
the Corporation, unless the contrary is expressly consented
to by the Board of Directors or the executive committee.
SECTION 4.2. REMOVAL. Any officer may be removed by
the Board of Directors whenever, in its judgment, the best
interests of the Corporation would be served thereby.
SECTION 4.3. THE CHAIRMAN OF THE BOARD. The chairman
of the Board, if any, shall preside at all meetings of
stockholders and of the Board of Directors and shall have
such other authority and perform such other duties as are
prescribed by law, by these By-Laws and by the Board of
Directors. The Board of Directors may designate the
chairman of the Board as chief executive officer, in which
case he shall have such authority and perform such duties as
are prescribed by these By-Laws and the Board of Directors
for the chief executive officer.
SECTION 4.4. THE VICE-CHAIRMAN. The vice-chairman, if
any, shall have such authority and perform such other duties
as are prescribed by these By-Laws and by the Board of
Directors. In the absence or inability to act of the
chairman of the Board and the president, he shall preside at
the meetings of the stockholders and of the Board of
Directors and shall have and exercise all of the powers and
duties of the chairman of the Board. The Board of Directors
may designate the vice-chairman as chief executive officer,
in which case he shall have such authority and perform such
duties as are prescribed by these By-Laws and the Board of
Directors for the chief executive officer.
SECTION 4.5. THE PRESIDENT. The president shall have
such authority and perform such duties as are prescribed by
law, by these By-Laws, by the Board of Directors and by the
chief executive officer (if the president is not the chief
executive officer). The president, if there is no chairman
of the Board, or in the absence or the inability to act of
the chairman of the Board, shall preside at all meetings of
stockholders and of the Board of Directors. Unless the
Board of Directors designates the chairman of the Board or
the vice-chairman as chief executive officer, the president
shall be the chief executive officer, in which case he shall
have such authority and perform such duties as are
prescribed by these By-Laws and the Board of Directors for
the chief executive officer.
SECTION 4.6. THE CHIEF EXECUTIVE OFFICER. Unless the
Board of Directors designates the chairman of the Board or
the vice-chairman as chief executive officer, the president
shall be the chief executive officer. The chief executive
officer of the Corporation shall have, subject to the
supervision and direction of the Board of Directors, general
supervision of the business, property and affairs of the
Corporation, including the power to appoint and discharge
agents and employees, and the powers vested in him by the
Board of Directors, by law or by these By-Laws or which
usually attach or pertain to such office.
SECTION 4.7. THE EXECUTIVE VICE-PRESIDENTS. In the
absence of the chairman of the Board, if any, the president
and the vice-chairman, if any, or in the event of their
inability or refusal to act, the executive vice-president
(or in the event there is more than one executive vice-
president, the executive vice-presidents in the order
designated, or in the absence of any designation, then in
the order of their election) shall perform the duties of the
chairman of the Board, of the president and of the vice-
chairman, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the chairman of
the Board, the president and the vice-chairman. Any
executive vice-president may sign, with the secretary or an
authorized assistant secretary, certificates for stock of
the Corporation and shall perform such other duties as from
time to time may be assigned to him by the chairman of the
Board, the president, the vice-chairman, the Board of
Directors or these By-Laws.
SECTION 4.8. THE VICE-PRESIDENTS. The vice-
presidents, if any, shall perform such duties as may be
assigned to them from time to time by the chairman of the
Board, the president, the vice-chairman, the Board of
Directors, or these By-Laws.
SECTION 4.9. THE TREASURER. Subject to the direction
of chief executive officer and the Board of Directors, the
treasurer shall have charge and custody of all the funds and
securities of the Corporation; when necessary or proper he
shall endorse for collection, or cause to be endorsed, on
behalf of the Corporation, checks, notes and other
obligations, and shall cause the deposit of the same to the
credit of the Corporation in such bank or banks or
depositary as the Board of Directors may designate or as the
Board of Directors by resolution may authorize; he shall
sign all receipts and vouchers for payments made to the
Corporation other than routine receipts and vouchers, the
signing of which he may delegate; he shall sign all checks
made by the Corporation (provided, however, that the Board
of Directors may authorize and prescribe by resolution the
manner in which checks drawn on banks or depositories shall
be signed, including the use of facsimile signatures, and
the manner in which officers, agents or employees shall be
authorized to sign); unless otherwise provided by resolution
of the Board of Directors, he shall sign with an officer-
director all bills of exchange and promissory notes of the
Corporation; whenever required by the Board of Directors,
he shall render a statement of his cash account; he shall
enter regularly full and accurate account of the Corporation
in books of the Corporation to be kept by him for that
purpose; he shall, at all reasonable times, exhibit his
books and accounts to any director of the Corporation upon
application at his office during business hours; and he
shall perform all acts incident to the position of
treasurer. If required by the Board of Directors, the
treasurer shall give a bond for the faithful discharge of
his duties in such sum and with such sure ties as the Board
of Directors may require.
SECTION 4.10. THE SECRETARY. The secretary shall keep
the minutes of all meetings of the Board of Directors, the
minutes of all meetings of the stockholders and (unless
otherwise directed by the Board of Directors) the minutes of
all committees, in books provided for that purpose; he shall
attend to the giving and serving of all notices of the
Corporation; he may sign with an officer-director or any
other duly authorized person, in the name of the
Corporation, all contracts authorized by the Board of
Directors or by the executive committee, and, when so
ordered by the Board of Directors or the executive
committee, he shall affix the seal of the Corporation
thereto; he may sign with the president or an executive
vice-president all certificates of shares of the capital
stock; he shall have charge of the certificate books,
transfer books and stock ledgers, and such other books and
papers as the Board of Directors or the executive committee
may direct, all of which shall, at all reasonable times, be
open to the examination of any director, upon application at
the secretary's office during business hours; and he shall
in general perform all the duties incident to the office of
the secretary, subject to the control of the chief executive
officer and the Board of Directors.
SECTION 4.11. THE CONTROLLER. The controller shall be
the chief accounting officer of the Corporation. Subject to
the supervision of the Board of Directors, the chief
executive officer and the treasurer, the controller shall
provide for and maintain adequate records of all assets,
liabilities and transactions of the Corporation, shall see
that accurate audits of the Corporation's affairs are
currently and adequately made and shall perform such other
duties as from time to time may be assigned to him.
SECTION 4.12. THE ASSISTANT TREASURERS AND ASSISTANT
SECRETARIES. The assistant treasurers shall respectively,
if required by the Board of Directors, give bonds for the
faithful discharge of their duties in such sums and with
such sureties as the Board of Directors may determine. The
assistant secretaries as thereunto authorized by the Board
of Directors may sign with the chairman of the Board, the
president, the vice-chairman or an executive vice-president,
certificates for stock of the Corporation, the issue of
which shall have been authorized by a resolution of the
Board of Directors. The assistant treasurers and assistant
secretaries, in general, shall perform such duties as shall
be assigned to them by the treasurer or the secretary,
respectively, or chief executive officer, the Board of
Directors, or these By-Laws.
SECTION 4.13. SALARIES. The salaries of the officers
shall be fixed from time to time by the Board of Directors,
and no officer shall be prevented from receiving such salary
by reason of the fact that he is also a director of the
Corporation.
SECTION 4.14. VOTING UPON STOCKS. Unless otherwise
ordered by the Board of Directors or by the executive
committee, any officer, director or any person or persons
appointed in writing by any of them, shall have full power
and authority in behalf of the Corporation to attend and to
act and to vote at any meetings of stockholders of any
corporation in which the Corporation may hold stock, and at
any such meeting shall possess and may exercise any and all
the rights and powers incident to the ownership of such
stock, and which, as the owner thereof, the Corporation
might have possessed and exercised if present. The Board of
Directors may confer like powers upon any other person or
persons.
ARTICLE V
Contracts and Loans
SECTION 5.1. CONTRACTS. The Board of Directors may
authorize any officer or officers, agent or agents, to enter
into any contract or execute and deliver any instrument in
the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
SECTION 5.2. LOANS. No loans shall be contracted on
behalf of the Corporation and no evidences of indebtedness
shall be issued in its name unless authorized by a
resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
ARTICLE VI
Certificates for Stock and Their Transfer
SECTION 6.1. CERTIFICATES FOR STOCK. Certificates
representing stock of the Corporation shall be in such form
as may be determined by the Board of Directors. Such
certificates shall be signed by the chairman of the Board,
the president, the vice-chairman or an executive vice-
president and/or by the secretary or an authorized assistant
secretary and shall be sealed with the seal of the
Corporation. The seal may be a facsimile. If a stock
certificate is countersigned (i) by a transfer agent other
than the Corporation or its employee, or (ii) by a registrar
other than the Corporation or its employee, any other
signature on the certificate may be a facsimile. In the
event that any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer
agent, or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if
he were such officer, transfer agent or registrar at the
date of issue. All certificates for stock shall be
consecutively numbered or otherwise identified. The name of
the person to whom the shares of stock represented thereby
are issued, with the number of shares of stock and date of
issue, shall be entered on the books of the Corporation.
All certificates surrendered to the Corporation for transfer
shall be canceled and no new certificates shall be issued
until the former certificate for a like number of shares of
stock shall have been surrendered and canceled, except that,
in the event of a lost, destroyed or mutilated certificate,
a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board of Directors may
prescribe.
SECTION 6.2. TRANSFERS OF STOCK. Transfers of stock
of the Corporation shall be made only on the books of the
Corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with
the secretary of the Corporation, and on surrender for
cancellation of the certificate for such stock. The person
in whose name stock stands on the books of the Corporation
shall be deemed the owner thereof for all purposes as
regards the Corporation.
ARTICLE VII
Fiscal Year
SECTION 7.1. FISCAL YEAR. The fiscal year of the
Corporation shall begin on the first day of January in each
year and end on the last day of December in each year.
ARTICLE VIII
Seal
SECTION 8.1. SEAL. The Board of Directors shall
approve a corporate seal which shall be in the form of a
circle and shall have inscribed thereon the name of the
Corporation.
ARTICLE IX
Waiver of Notice
SECTION 9.1. WAIVER OF NOTICE. Whenever any notice is
required to be given under the provisions of these By-Laws
or under the provisions of the Certificate of Incorporation
or under the provisions of the corporation law of the state
of incorporation, waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or
after the time stated therein, shall be deemed equivalent to
the giving of such notice. Attendance of any person at a
meeting for which any notice is required to be given under
the provisions of these By-Laws, the Certificate of
Incorporation or the corporation law of the state of
incorporation shall constitute a waiver of notice of such
meeting except when the person attends for the express
purpose of objecting, at the beginning of the meeting, to
the transaction of any business because the meeting is not
lawfully called or convened.
ARTICLE X
Amendments
SECTION 10.1. AMENDMENTS. These By-Laws may be
altered, amended or repealed and new By-Laws may be adopted
at any meeting of the Board of Directors of the Corporation
by the affirmative vote of a majority of the members of the
Board, or by the affirmative vote of a majority of the
outstanding capital stock of the Corporation (assessed upon
the basis of votes and not on the basis of number of shares)
entitled to vote generally in the election of directors,
voting together as a single class.
ARTICLE XI
Indemnification
SECTION 11.1. INDEMNIFICATION. The Corporation shall
indemnify its officers, directors, employees and agents to
the fullest extent permitted by the General Corporation Law
of Delaware, as amended from time to time.
Exhibit 10.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the use in the Form 10-SB
Registration Statement of Waterfalls Corp. (A Development
Stage Company) our report dated November 16, 2000 relating
to the financial statements of Waterfalls Corp. which appear
in such Form 10-SB.
Massella, Tomaro & Co., LLP
Certified Public Accountants
Jericho, New York
November 16, 2000
