UNITED STATES
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
KBS Technologies, Inc.
(Exact name of registrant as specified in its charter)
Oklahoma 73-1581657
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4444 East 66th Street
Suite 201
Tulsa, Oklahoma 74136-4206
(Address of principal executive offices, including zip code)
(918) 496-9020
(Registrant's Telephone Number, Including Area Code)
(918) 496-9024
(Registrant's Facsimile Number, Including Area Code)
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value
(Title of class)
<PAGE>
Information Required in Registration Statement
Certain Forward-Looking Information
Certain statements included in this report which are not historical
facts are forward-looking statements, including the information provided with
respect to future business opportunities, expected financing sources and related
matters. These forward looking statements are based on current expectations,
estimates, assumptions and beliefs of management, and words such as "expects,"
"anticipates," "intends," "believes," "estimates" and similar expressions are
intended to identify such forward looking statements. Since this information is
based on current expectations that involve risks and uncertainties, actual
results could differ materially from those expressed in the forward-looking
statements.
Part I.
Item 1. Description of Business.
(a) Business Development
1. Form and Year of Organization
KBS Technologies, Inc., an Oklahoma corporation ("KBS" or the
"Company"), is a development stage corporation organized on February 11, 2000 to
provide services to individuals, non-profit organizations and small businesses
in the architecture, creation, design, and development of web sites on the
worldwide web.
2. Bankruptcy or Receivership
KBS has never been in bankruptcy or receivership.
3. Mergers, Reclassifications and Purchase or receivership
None
(b) Business of Issuer
1. Principal Products and Services of KBS and their Markets
KBS has no products or services for sale at this time, except for the
design, creation and development of web sites. These services will be marketed
to a wide variety of companies and individuals who desire to have their own web
page.
<PAGE>
2. Distribution Method of Products and Services
KBS is offering its services to small businesses, individuals and
non-profit organizations. The services of KBS are charged on an hourly basis.
3. Status of Publicly Announced Products or Services
proper server to host its web sites. KBS has also begun construction of its
corporate web site www.kbstechnologiesinc.com.
On March 24, 2000, Tulsa Men's Ministries, Inc.("TMM") engaged KBS to
design, develop and construct a web site. TMM paid to KBS $500 to reserve the
domain name tulsamensminsitries.com and secure server space for the month of
April. The design, development and architecture of tulsamensministries.com is
currently underway and should be completed in the second quarter of 2000.
4. Competitive Business Conditions, Competitive Position and Methods of
Competition
The Internet is a global collection of thousands of interconnected
computer networks that enables commercial organizations, educational
institutions, governmental agencies and individuals to communicate
electronically, access and share information and conduct commerce. Unlike other
public and private telecommunications networks that are managed by businesses,
governmental agencies or other entities, the Internet is a cooperative
interconnection of many such public and private networks. Open communications on
the Internet are enabled by TCP/IP, the common Internet communications protocol,
which enables communication and data transfers across the Internet regardless of
the hardware and software used.
Use of the Internet has been accelerated by increases in cost-effective
processing power and data storage capabilities in personal computers, as well as
wide spread availability of multimedia, fax/modem, and networking capabilities
to the home and business computing markets. Much of the recent growth in
Internet use by businesses and individuals has been driven by the emergence of a
network of servers and information available on the worldwide web.
The worldwide web, which is based on a client/server model and a set of
standards for information access and navigation, can be accessed using software
that allows non-technical users to exploit the capabilities of the Internet. The
worldwide web enables users to find, retrieve and link information on the
Internet easily and consistently. The development of worldwide web technology
and associated easy-to-use software has made the Internet easier to navigate and
accessible to a larger number of users and for a broad range of applications.
Organizations of all kinds are increasingly using the Internet for communicating
with key constituents and conducting business.
KBS believes that web sites provide a forum for businesses to advertise
goods and services and for customers to purchase electronically. Web-based
<PAGE>
applications are cost-efficient and serve as effective self-advertisement for
small businesses and individuals. KBS believes that most small businesses and
many individuals will want to have personal or small business web sites. This
expected demand is expected to trigger exponential growth of Internet resources
and significantly increase demand for web site design.
With tremendous growth there is expected to be tremendous
opportunities. The competition is fierce in web site development and design. We
compete in a market that is intensely competitive and characterized by rapidly
changing technology and evolving standards. KBS anticipates that competition
will become more intense and that new companies will enter the market. However,
we believe our anticipated products and services will position us to react to
the market niche we target.
5. Sources of Raw Materials and the Names of Principal Suppliers
KBS does not manufacture any products at this time, so it has no raw
materials requirements.
6. Dependence on one of a few major customers
KBS has no customers at this time, except Tulsa Men's Ministries, Inc.
KBS anticipates marketing its products and services to many small business,
professionals, individuals and non-profit organizations who desire to have their
own web site. KBS does not expect to be dependent upon any particular customer.
7. Patents, trademarks, licenses, royalty agreements or labor contracts
On February 11, 2000, KBS entered into a worldwide license agreement
("License") with Bradford P. White covering proprietary and unique Internet
processes in the architecture, creation and design of web sites for small
businesses and individuals. The invention covered by the License is not
protected by patents or a patent application at the time. The License is
perpetual but is subject to termination by Mr. White upon the change of control
of more than 50% of the issued and outstanding common stock of KBS. Mr. White
retains the right to use the License for his own non-commercial use. KBS issued
Mr. White 500,000 shares of its common stock as the sole compensation to be paid
under the License. The License Agreement is attached as Exhibit 6.1.
Mr. White has also agreed to act as a consultant to KBS in web site design, and
KBS has agreed to pay Mr. White 75% of all net revenues recovered by KBS for his
design and other services. The Consulting Agreement is attached as Exhibit 6.2.
8. Need for Governmental Approval
KBS does not believe that there currently exists any governmental
approval or permits required for its services.
9. Effect of Existing or Probable Governmental Regulation
<PAGE>
It is quite possible that new regulations which may become effective and
be applicable to the Internet, but KBS is not aware of any such pending or
proposed regulations relating to web page design or personal home pages.
However, there is no assurance future governmental licenses or regulations may
be enacted.
As Internet commerce continues to evolve, increasing regulation by
federal, state, or foreign agencies becomes more likely. Such regulation is
likely in the areas of user privacy, pricing, content, and quality of products
and services. Taxation of Internet use or other charges imposed by government
agencies or by private organizations for accessing the Internet may also be
imposed. Laws and regulations applying to the solicitation, collection, or
processing of personal or consumer information could affect KBS' activities.
Furthermore, any regulation imposing fees for Internet use could result in a
decline in the use of the Internet and the viability of Internet commerce, which
could have a material adverse effect on KBS' business, results of operations,
and financial condition.
10. Estimate of the amount spent on research and development
None
11. Costs and effects of environmental compliance
KBS does not believe that environmental laws have or will have a
significant effect on its business.
12. Number of total employees and number of full time employees
KBS has no full time employees. KBS has one officer and director. He
engages in other business activities and does not receive cash compensation for
his services to KBS. There is no assurance that this individual will continue to
serve without cash compensation. There are no written employment agreements.
Item 2. Management Discussion and Analysis
(a) Plan of Operation
1. Plan of Operation Over the Next Twelve Months
KBS is seeking to consummate a business combination by way of tax-free
merger, exchange of stock, sale of assets or other business combination with an
Internet web development company or other company with existing manufacturing,
quality control, marketing, distribution and regulatory compliance capabilities
in place. KBS has no negotiations pending at this time.
<PAGE>
Alternatively but simultaneously, KBS is seeking strategic alliances
with graphic design firms and Internet web development companies willing to
provide KBS with manufacturing, marketing, server space and new hardware and
software. KBS has no such agreements at this time. There is no assurance that
KBS will be successful in making arrangements for consummating any business
combination or establishing any strategic alliances.
KBS plans to continue to develop and improve its proprietary and unique
web design technologies and to seek customers for its services. KBS plans to
capture market share in the Internet web development and design business by
combining with such strategic alliances or by producing and distributing KBS web
pages to small businesses, professionals and individuals.
Should KBS decide to manufacture, produce and market and distribute the
products, KBS will require significant capital. At this time, KBS is
predominantly a service oriented business.
(i) Cash Requirements
KBS intends to engage in an private offering of its Common Stock to
fund the costs associated with product development, software updates, computer
hardware updates and working capital. KBS needs net proceeds from this proposed
offering to continue its business. It is anticipated that KBS will operate using
the proceeds from loans from its officer. There is no assurance that any
additional capital will be available to KBS on acceptable terms when needed, if
it is available at all.
(ii) Product Development and Research Plan for the Next Twelve Months
KBS is planing to develop a fully functioning "model web site" that
will be used as the basis for future client services. KBS expects to develop
numerous fully functional web sites, based on the previously designed model site
within the next 12 months.
(iii) Expected Purchase or Sale of Plant and Significant Equipment
None
(iv) Expected Significant changes in number of employees
KBS anticipates initially contracting with third parties to provide its
services and as its business develops adding sales and marketing personnel as
needed to meet demand.
(b) Management's Discussion and Analysis of Financial Conditions and
Results of operation.
KBS was originated on February 11, 2000. It had no prior financial
history.
Item 3. Description of Property
(a) Location and Description of Property
KBS currently shares offices located at 4444 E. 66th St., Suite 201,
Tulsa, OK 74136. The company shares offices with Frederick K. Slicker, attorney
<PAGE>
at law and shareholder. This space is being provided without cost to KBS.
However, KBS will be able to operate from any personal computer unit with access
to the Internet.
Item 4. Security Ownership of Certain Beneficial Owners and Management
Beneficial Owners of More than Five Percent
The following table shows the persons known to the Company to be the
Beneficial owner of more than 5% of the Company's common stock. The number of
shares owned includes the shares which the listed beneficial owner has the right
to acquire within sixty days from options to purchase common stock. The
percentage of outstanding shares was calculated based on the 6,500,000 shares
issued and outstanding at March 31, 2000 plus the shares which the listed
beneficial owner has the right to acquire within sixty days:
<TABLE>
Percent of
Relationship to Common Shares Outstanding
<CAPTION>
Name and Address Position Shares Owned
- -------------------------- -------------------- --------- ----
<S> ...................... <C> <C> <C>
Kipp Slicker ............. President & Director 5,000,000 76.9%
4444 E. 66th St
Suite 201
Tulsa, OK 74136
Frederick K. Slicker ...... Individual 1,000,000 15.3%
4444 E. 66th St
Suite 201
Tulsa, OK 74136
Brad White ............... Consultant 500,000 7.6%
2545 S. Harvard Pl
Apt. 13c
Tulsa, OK 74114
</TABLE>
On the 11th of February, 2000, the Board of Directors and the
Shareholders approved an Incentive Stock Option Plan and reserved 1,000,000
shares. No Options have been granted. A copy of the Incentive Stock Option Plan
is attached as Exhibit 6.5.
Item 5. Directors, Executive Officers and Control Persons
(a) Identify Directors and Executive Officers
Kipp Slicker, age 23, President of KBS Technologies, Inc. Mr. Slicker
is currently a paralegal for Frederick K. Slicker, attorney at law. He served as
a White House Intern in 1998, an Intern at Conservation International and was a
<PAGE>
student at The University of San Francisco de Quito, Ecuador. He is 1999
graduate of Boston College cum laude, with a degree in English and is a member
of Golden Key National Honors Society.
Mr. Slicker serves as sole director and sole officer of KBS. He has loaned to
KBS $2,500 to be used as working capital. He does not have any employment
agreements with KBS.
(c) Family Relationships
Kipp Slicker is the son of Frederick K. Slicker. Frederick K. Slicker
is legal counsel to the company..
(d) Involvement in Legal Proceedings of Officers, Directors and Control Persons
None
Item 6. Executive Compensation
The only officer and director is Kipp Slicker. He serves without any
cash compensation.
Item 7. Certain Relationships and Related Transactions
Kipp Slicker is the sole director and officer. Kipp Slicker is the son
of Frederick K. Slicker. KBS is using the offices of Frederick K. Slicker
without compensation by KBS. Frederick K. Slicker is legal counsel for the
company. He has not charged the company for his services. Kipp Slicker loaned
KBS $2,500 for working capital. The loan is evidenced by an unsecured promissory
note, is payable on demand and bears interest at 10% per annum and default
interest at 14% per annum. The note is attached as Exhibit 6.3.
Item 8. Description of Securities
Authorized Capital. KBS is authorized to issue 45,000,000 Shares of
Common Stock, par value $0.001 per share, of which 6,500,000 shares were
outstanding as of the date hereof. KBS is also authorized to issue 5,000,000
Shares of Preferred Stock, par value $0.001 per share, of which there are no
shares presently outstanding. There is no present intent to issue any Preferred
Stock.
Voting Rights. Holders of shares of Common Stock are entitled to one
vote per share on all matters submitted to a vote of the shareholders. Shares of
Common Stock do not have cumulative voting rights, which means that the holders
of a majority of the shareholder votes eligible to vote and voting for the
election of the Board of Directors can elect all members of the Board of
Directors. Holders of a majority of the issued and outstanding shares of Common
Stock may take action by written consent without a meeting.
Dividend Rights. Holders of record of shares of Common Stock are
entitled to receive dividends when and if declared by the Board of Directors. To
date, KBS has not paid cash dividends on its Common Stock. Holders of Common
Stock are entitled to receive such dividends as may be
<PAGE>
declared and paid from time to time by the Board of Directors out of funds
legally available therefor. KBS intends to retain any earnings for the operation
and expansion of its business and does not anticipate paying cash dividends in
the foreseeable future. Any future determination as to the payment of cash
dividends will depend upon future earnings, results of operations, capital
requirements, KBS' financial condition and such other factors as the Board of
Directors may consider.
Liquidation Rights. Upon any liquidation, dissolution or winding up of
KBS, holders of shares of Common Stock are entitled to receive pro rata all of
the assets of KBS available for distribution to shareholders after liabilities
are paid and distributions are made to the holders of KBS Preferred Stock.
Preemptive Rights. Holders of Common Stock do not have any preemptive
rights tosubscribe for or to purchase any stock, obligations or other securities
of KBS.
Part II.
Item 1. Market for Common Equity and Related Stockholder Matters.
(a) Market information
None
(b) Holders
As of March 31, 2000, there were 3 holders of record of KBS' common
stock.
(c) Dividend Policy
KBS has not declared any dividends in the past and there is no
intention to declare dividends in the future.
Item 2. Legal Proceedings.
None
Item 3. Changes in and Disagreements with Accountants.
None.
Item 4. Recent Sales of Unregistered Securities
(a) Securities Sold
On February 11, 2000 KBS sold 5,000,000 shares of its Common Stock to
<PAGE>
Kipp Slicker for $5,000 at $.001 per share. In addition, on February 11, 2000
KBS sold 500,000 shares of Common Stock to Bradford P. White in exchange for the
License covering the Invention. These shares were sold for $500 or $.001 per
share. On February 28, 2000 KBS sold 1,000,000 shares of Common Stock to
Frederick K. Slicker for $1,000 at $.001 per share.
(b) Underwriters and Other Purchasers
None
(c) Consideration
See 4(a) above
(d) Section under which exemption from registration was claimed
Section 3(a)(11) and Section 4(2) of the Securities Act of 1933 and SEC
regulation D, Rule 504.
Item 5. Indemnification of Officers and Directors
The Certificate of Incorporation of KBS provides for indemnification to
the full extent permitted by Oklahoma law of all persons it has the power to
indemnify under Oklahoma law. In addition, the Bylaws of KBS provide for
indemnification to the full extent permitted by Oklahoma law of all persons it
has the power to indemnify under Oklahoma law. Such indemnification is not
deemed to be exclusive of any other rights to which those indemnified may be
entitled, under any bylaw, agreement, vote of stockholders or otherwise. The
provisions of KBS' Certificate of Incorporation and Bylaws which provide
indemnification may reduce the likelihood of derivative litigation against
directors and officers of KBS for breach of their fiduciary duties, even though
such action, if successful, might otherwise benefit KBS and its stockholders.
In addition, KBS has entered into indemnification agreements with Kipp
Slicker its sole director and officer. These agreements provide that KBS will
indemnify each person for acts committed in their capacities and for virtually
all other claims for which a contractual indemnity might be enforceable. The
Indemnification agreement is attached as Exhibit6.4.
<PAGE>
Part F/S
Financial Statement
KBS TECHNOLOGIES, INC.
FINANCIAL STATEMENTS
PERIOD ENDED FEBRUARY 29, 2000
INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report..................................................12
Balance Sheet.................................................................13
Statement of Operations.......................................................14
Statement of Stockholders' Equity.............................................14
Statements of Cash Flows......................................................15
Notes to Financial Statements.................................................16
<PAGE>
17
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of KBS Techologies, Inc.
We have audited the accompanying balance sheet of KBS Technologies, Inc., (a
Development Stage Company), as of February 29, 2000, and the related statements
of operations, cash flows and stockholders' equity for the period from inception
(February 11, 2000) to February 29, 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 auditing standards generally accepted
in the United States. 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 KBS Technologies, Inc. as of
February 29, 2000, and the results of its operations and its cash flows for the
initial period from inception (February 11, 2000) to February 29, 2000, in
conformity with accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company is a development stage company without current
revenues to fund development and operating expenses. This condition raises
substantial doubt about its ability to continue as a going concern. Management's
plan concerning this matter is also described in Note 6. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Tullius Taylor Sartain & Sartain LLP
Tulsa, Oklahoma
March 30, 2000
<PAGE>
<TABLE>
KBS TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEET
February 29, 2000
<CAPTION>
<S> <C>
Assets
Current assets:
Cash.............................................................. $ 8,500
-------
Total assets.......................................................... $ 8,500
=======
Liabilities and Stockholders' Equity
Current liabilities:
Accrued interest.................................................. $ 8
Note payable 2,500
-------
Total liabilities..................................................... 2,508
Stockholders' Equity:
Preferred stock, $.001 par value, 5,000,000 shares
authorized; none issued........................................ --
Common Stock, $.001 par value, 45,000,000 shares
authorized; 6,500,000 shares issued and outstanding............ 6,500
Deficit accumulated during the development stage.................. (508)
-------
Total stockholders' equity............................................ 5,992
-------
Total liabilities and stockholders' equity............................ $ 8,500
=======
</TABLE>
<PAGE>
<TABLE>
KBS TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
From inception (February 11, 2000) through February 29, 2000
<CAPTION>
<S> <C>
Sales............................................................. $--
Cost of sales..................................................... --
-----
Gross profit...................................................... --
Operating expense:
Selling, general and administrative......................... 500
-----
Total operating expenses......................................... 500
-----
Loss from operations............................................. (500)
Interest expense................................................. 8
-----
Net loss......................................................... $(508)
=====
Net loss per share............................................... $--
=====
</TABLE>
<PAGE>
<TABLE>
KBS TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
From inception (February 11, 2000) to February 29, 2000
<CAPTION>
Deficit
accumulated
during the
development
Shares Amount Stage Total
-------- ------ ----- -------
<S> <C> <C> <C> <C>
Contribution of services ....... 500,000 $ 500 $ -- $ 500
for common stock
Cash sale of common stock ..... 6,000,000 6,000 -- 6,000
Net loss ...................... -- -- (508) (508)
--------- ------ -------- -------
Balance, February 29, 2000 .... 6,500,000 $6,500 $ (508) $ 5,992
========= ====== ======== =======
</TABLE>
<PAGE>
<TABLE>
KBS TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
From inception (February 11, 2000) through February 29, 2000
<CAPTION>
<S> ..................................................... <C>
Cash Flows from Operating Activities
Net loss ................................................ $ (508)
Adjustments to reconcile net loss to
net cash used by operating activities:
Contribution of services ................................ 500
Change in accounts payable .............................. 8
-------
Net cash provided by operating activities ............... --
Cash Flows from Financing Activities
Sale of common stock .................................... 6,000
Proceeds from issuance of debt .......................... 2,500
-------
Net cash provided by financing activities ............... 8,500
-------
Net increase in cash .................................... 8,500
Cash, beginning of year ................................. --
-------
Cash, end of period ..................................... $ 8,500
=======
Supplemental Disclosure of Cash Flow Information
Cash paid for interest .................................. $ --
=======
Non-cash investing and financing activities:
Capital contribution of services ........................ $ 500
=======
</TABLE>
<PAGE>
[FN]
KBS TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies
Description of business
KBS Technologies, Inc. ("the Company"), a development stage company, provides
internet website design and technology services. The Company was formed as a
corporation under the laws of the state of Oklahoma on February 11, 2000. The
Company was initially capitalized with $6,000 cash and $500 in services, which
was contributed by shareholders in exchange for 6,000,000 shares of stock and
500,000 shares of stock, respectively.
Management estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements and disclosures in the
notes thereto. Actual results could differ from those estimates.
Income taxes
The Company has elected to be treated as a Schedule C corporation for income tax
reporting purposes and as such will account for income taxes using the asset and
liability method as required by Statement of Financial Accounting Standards No.
109. No provision for income taxes is provided in the financial statements.
Fiscal year
The Company's fiscal year ends on December 31.
Note 2 -Note Payable
Note payable consists of an unsecured demand promissory note in the amount of
$2,500 to the majority shareholder, with interest on the unpaid principal at the
rate of 10% per annum.
Note 3 - Common and Preferred Stock
Holders of shares of common stock are entitled to one vote per share on all
matters submitted to a vote of the shareholders. Holders of record are entitled
to receive dividends when and if
<PAGE>
19
declared by the board of directors. Upon any liquidation, dissolution or winding
up of the Company, holders of shares of common stock are entitled to receive pro
rata all of the assets available for distribution after liabilities are paid.
The rights of any preferred stock that may be issued have not been designated.
Note 4 - License and Consulting Agreements
On February 11, 2000, the Company entered into a worldwide license agreement
with Bradford P. White covering proprietary and unique internet processes in the
architecture, creation and design of web sites. The invention covered by the
license is not protected by patent or patent application. The license is
perpetual, but is subject to termination by Mr. White upon the change of control
of more than 50% of the issued and outstanding common stock of the Company. The
Company issued Mr. White 500,000 shares of common stock as sole compensation for
the license.
On February 11, 2000, the Company also entered into a consulting agreement with
Mr. White whereby the Company agreed to pay Mr. White 75% of all net collected
receipts for work performed by Mr. White for the Company and its customers. The
agreement may be terminated at any time with or without cause.
Note 5 - Stock Option Plan
On February 11, 2000, the Company adopted the KBS Technologies, Inc. 2000
Incentive Stock Option Plan ("Plan"). The Company has reserved 1,000,000 shares
of common stock for issuance under the Plan. The Plan shall be administered by
the board of directors or a committee appointed by the board. The option
recipients, period and price shall be determined by the board or Plan committee,
subject to the provision that, in no event, shall the purchase price be less
than 100% of the fair market value of the Company's common stock on the date of
grant. No options have been granted as of February 29, 2000.
Note 6 - Uncertainties
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company is in the early stages of
development and has not established sources of revenues to fund development of
its business and pay operating expenses, resulting in a net loss of $508 in the
period from inception to February 29, 2000. Management intends to provide the
necessary development and operating capital through a private offering of its
common stock. The ability of the Company to continue as a going concern during
the next year depends on the amount of capital raised and revenue received. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
</FN>
<PAGE>
Part III
List of Exhibits
Item 1 and 2. Index to and Description of Exhibits
Exhibit Number Description of Exhibits
2.1.................................................Certificate of Incorporation
2.2.......................................................................Bylaws
3......................................................Form of Stock Certificate
6.1.....................................License Agreement with Bradford P. White
dated February 11, 2000
6.2.....................................Confidentiality and Consulting Agreement
with Bradford P. White
6.3..........................................Promissory Note to Kipp Slicker for
$2,500
6.4............................................Indemnification Agreement to Kipp
Slicker
6.5..................................................Incentive Stock Option Plan
<PAGE>
Signatures
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized
KBS Technologies, Inc.
Date: April 15, 2000 By: /s/ Kipp Slicker
Kipp Slicker, President
CERTIFICATE OF INCORPORATION
OF
KBS TECHNOLOGIES, INC.
ARTICLE I
NAME
The name of the Corporation is KBS TECHNOLOGIES, INC.
ARTICLE II
REGISTERED OFFICE AND AGENT
The registered office of the Corporation in the State of Oklahoma, is
located at 4444 East 66th St., Suite 201, Tulsa OK 74136. The
Corporation's registered agent at that office is Kipp Slicker.
ARTICLE III
PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the Oklahoma General Corporation
Act.
ARTICLE IV
CAPITALIZATION
The total number of shares which this Corporation is authorized to issue is
50,000,000 shares consisting of 45,000,000 shares of Common Stock, par
value$.001 per share, and 5,000,000 shares of Preferred Stock, par value $.001
per share.
The Board of Directors shall have the power and authority to issue without
shareholder approval debentures or other securities convertible into, or
warrants or options to subscribe for or purchase, authorized shares of Common
Stock or Preferred Stock of the Corporation upon such terms and conditions as
shall be determined by action of the Board of Directors.
Preferred Stock Generally
The Preferred Stock may be issued in one or more series. The Board of
Directors is hereby expressly authorized to issue shares of Preferred Stock in
such series and to fix from time to time before issuance thereof the number of
shares to be included in any series and the designation, relative rights,
powers, preferences, restrictions and limitations of all shares of such series.
The authority of the Board of Directors with respect to each series shall
include, without limitation, the determination of any or all of the following,
and the shares of each series may vary from the shares of any other series in
the following respects:
(a) The number of shares constituting such series and the
designation thereof to distinguish the shares of such series
from the shares of all other series;
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(b) The annual dividend rate on the shares of that series, if any,
and whether such dividends shall be cumulative and, if
cumulative, the date from which dividends shall accumulate;
(c) The voting rights, if any, in addition to the voting rights
prescribed by law and the terms of exercise of such voting
rights;
(d) The right, if any, of shares of such series to be converted
into shares of any other series or class and the terms and
conditions of such conversion; and
(e) The redemption price for the shares in each particular series,
if redeemable, and the terms and conditions of such
redemption;
(f) The preference, if any, of shares of such series in the event
of any liquidation, dissolution or winding up on the
Corporation; and
(g) Any other relative rights, preferences, limitations and
restrictions applicable to that series.
ARTICLE V
NO CUMULATIVE VOTING
The holders of record of the Common Stock or Preferred Stock shall have one
vote for each share held of record. Cumulative voting for the election of
directors or otherwise is not permitted.
ARTICLE VI
NO PREEMPTIVE RIGHTS
No holder of record of Common Stock or Preferred Stock shall have a
preemptive right or be entitled as a matter of right to subscribe for or
purchase any: (i) shares of capital stock of the Corporation of any class
whatsoever; (ii) warrants, options or rights of the Corporation; or (iii)
securities convertible into, or carrying warrants, options or rights to
subscribe for or purchase, capital stock of the Corporation of any class
whatsoever, whether now or hereafter authorized.
ARTICLE VII
BOARD OF DIRECTORS
The Board of Directors shall consist of from one (1) to five (5)
directors who shall serve as directors until the next annual meeting of
shareholders or until their respective successor is duly elected and qualified.
The number of directors may be changed from time to time in accordance with the
bylaws of the Corporation then in effect. Election of directors at a meeting of
shareholders need not be by written ballot.
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ARTICLE VIII
AMENDMENT OF BYLAWS
The Board of Directors of the Corporation is expressly authorized and
empowered to make, alter, amend or repeal the bylaws of the Corporation and to
adopt new bylaws.
ARTICLE IX
POSSIBLE CONFLICTS OF INTEREST
No agreement or transaction involving the Corporation or any other
corporation, partnership, proprietorship, trust, association or other entity in
which the Corporation owns an interest or in which a director or officer of the
Corporation has a financial interest shall be void or voidable solely for this
reason or solely because any such director or officer is present at or
participates in the approval of such agreement or transaction.
ARTICLE X
INDEMNIFICATION
To the full extent not prohibited by the law as in effect from time to
time, the Corporation shall indemnify any person (and the heirs, executors and
representatives of such person) who is or was a director, officer, employee or
agent of the Corporation, or who, at the request of this Corporation, is or was
a director, officer, employee, agent, partner, or trustee, as the case may be,
of any other corporation, partnership, proprietorship, trust, association or
other entity in which this Corporation owns an interest, against any and all
liabilities and reasonable expenses incurred by such person in connection with
or resulting from any claim, action, suit or proceeding, whether brought by or
in the right of the Corporation or otherwise and whether civil, criminal,
administrative or investigative in nature, and in connection with an appeal
relating thereto, in which such person is a party or is threatened to be made a
party by reason of serving or having served in any such capacity.
ARTICLE XI
NO DIRECTOR LIABILITY IN CERTAIN CASES
To the maximum extent permitted by law as in effect from time to time, no
director of the Corporation shall be liable to the Corporation or its
shareholders for monetary damages for breach of any fiduciary duty as a
director, provided that this provision shall not eliminate or limit the
liability of a director for: (i) any breach of the director's duty of loyalty to
the Corporation or its shareholders; (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii)
unlawful payment of dividends or stock redemptions; or (iv) any transaction from
which the director derived an improper personal benefit.
ARTICLE XII
CERTAIN COMPROMISES
Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its shareholders or any class of them, any court of equitable
jurisdiction within the State of Oklahoma, on the application in a summary way
of this Corporation or of any creditor or shareholder thereof, or on the
application of
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any receiver or receivers appointed for this Corporation under the provisions of
Section 1106 of Title 18 of the Oklahoma Statutes as in effect from time to time
or on the application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 1100 of Title 18
of the Oklahoma Statutes as in effect from time to time, may order a meeting of
the creditors or class of creditors, and/or of the shareholders or class of
shareholders of this Corporation, as the case may be, to be summoned in such
manner as the court directs. If a majority in number representing three-fourths
(3/4ths) in value of the creditors or class of creditors, and/or of the
shareholders or class of shareholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement, the compromise
or arrangement and the reorganization, if sanctioned by the court to which the
application has been made, shall be binding on all the creditors or class of
creditors, and/or on all the shareholders or class of shareholders, of this
Corporation, as the case may be, and also on this Corporation.
IN WITNESS WHEREOF, the Incorporator has caused this Certificate of
Incorporation to be filed for and on behalf of the Corporation this 11th day of
February, 2000.
/s/ Kipp Slicker
Kipp Slicker, Incorporator
BYLAWS
OF
KBS TECHNOLOGIES, INC.
ADOPTED EFFECTIVE
FEBRUARY 11, 2000
<PAGE>
TABLE OF CONTENTS
TO
BYLAWS
OF
KBS TECHNOLOGIES, INC.
ARTICLE I - OFFICES............................................................1
SECTION 1.01. Registered Office and Registered Agent.....1
SECTION 1.02. Other Offices..............................1
ARTICLE II - SHAREHOLDERS......................................................1
SECTION 2.01. Place of Meeting...........................1
SECTION 2.02. Annual Meeting.............................1
SECTION 2.03. Special Meetings...........................1
SECTION 2.04. Notice of Meetings.........................2
SECTION 2.05. Quorum and Adjourned Meetings..............2
SECTION 2.06. Conduct of Meetings........................3
SECTION 2.07. Voting.....................................3
SECTION 2.08. Consent of Shareholders in Lieu of a
Meeting....................................3
SECTION 2.09. Voting Lists...............................3
ARTICLE III - BOARD OF DIRECTORS...............................................4
SECTION 3.01. Powers.....................................4
SECTION 3.02. Number, Qualifications and Term of Office..4
SECTION 3.03. Vacancies..................................4
SECTION 3.04. Resignations...............................4
SECTION 3.05. Organization...............................5
SECTION 3.06. Place of Meetings..........................5
SECTION 3.07. Organizational Meeting.....................5
SECTION 3.08. Regular Meetings...........................5
SECTION 3.09. Special Meetings...........................5
SECTION 3.10. Quorum and Adjourned Meetings..............5
SECTION 3.11. Unanimous Consent of Directors in Lieu of
Meeting....................................5
SECTION 3.12. Executive and Other Committees.............6
SECTION 3.13. Compensation of Directors..................6
ARTICLE IV - NOTICE OF MEETINGS................................................6
SECTION 4.01. Notice.....................................6
SECTION 4.02. Waiver of Notice...........................7
SECTION 4.03. Teleconference Meetings....................7
<PAGE>
ARTICLE V - OFFICERS...........................................................7
SECTION 5.01. Number, Qualifications and Designation.....7
SECTION 5.02. Election, Term of Office and Resignation...7
SECTION 5.03. Removal of Officers........................7
SECTION 5.04. Chairman of the Board......................8
SECTION 5.05. President..................................8
SECTION 5.06. Vice Presidents............................8
SECTION 5.07. Secretary..................................8
SECTION 5.08. Treasurer..................................9
SECTION 5.09. Controller.................................9
SECTION 5.10. Assistant Officers.........................9
SECTION 5.11. Bonds......................................9
SECTION 5.12. Compensation of Officers...................9
ARTICLE VI - CERTIFICATES OF STOCK............................................10
SECTION 6.01. Issuance..................................10
SECTION 6.02. Transfer..................................10
SECTION 6.03. Stock Certificates........................10
SECTION 6.04. Lost, Stolen, Destroyed or Mutilated
Certificates..............................10
SECTION 6.05. Record Holder of Shares...................10
SECTION 6.06. Determination of Record Date..............11
ARTICLE VII - INDEMNIFICATION OF DIRECTORS, OFFICERS AND
OTHER AUTHORIZED REPRESENTATIVES.....................................11
SECTION 7.01. Indemnification of Authorized
Representatives in Third Party
Proceedings...............................11
SECTION 7.02. Indemnification of Authorized
Representatives in Corporate Proceedings..12
SECTION 7.03. Mandatory Indemnification of Authorized
Representatives...........................12
SECTION 7.04. Determination of Entitlement to
Indemnification...........................12
SECTION 7.05. Advancing Expenses........................13
SECTION 7.06. Employee Benefit Plans....................13
SECTION 7.07. Scope.....................................13
SECTION 7.08. Reliance..................................13
SECTION 7.09. Insurance.................................14
ARTICLE VIII - GENERAL PROVISIONS.............................................14
SECTION 8.01. Dividends.................................14
SECTION 8.02. Annual Statements.........................14
SECTION 8.03. Contracts.................................14
SECTION 8.04. Checks....................................14
<PAGE>
SECTION 8.05. Corporate Seal............................14
SECTION 8.06. Deposits..................................15
SECTION 8.07. Amendment of Bylaws.......................15
SECTION 8.08. Fiscal Year...............................15
SECTION 8.09. Interested Directors......................15
SECTION 8.10. Form of Records...........................15
<PAGE>
B Y L A W S
OF
KBS TECHNOLOGIES, INC.
ARTICLE I
OFFICES
SECTION 1.01. Registered Office and Registered Agent. The registered office
and registered agent shall be designated in duly adopted actions of the Board of
Directors. Each registered office and registered agent may be changed from time
to time by a duly adopted action of the Board of Directors, and the Corporation
shall file an appropriate statement of change of registered office or registered
agent promptly after the taking of such action in accordance with applicable
law.
SECTION 1.02. Other Offices. The Corporation may also have offices at such
other places within or without the state of incorporation of the Corporation as
the Board of Directors may from time to time determine or the business of the
Corporation requires.
ARTICLE II
SHAREHOLDERS
SECTION 2.01. Place of Meeting. All meetings of the shareholders of the
Corporation shall be held at the principal executive office of the Corporation
unless otherwise determined by the Board of Directors and specified in the
notice of meeting, in which event the meeting shall be held at the place within
or without the state of incorporation as shall be designated in the notice of
such meeting.
SECTION 2.02. Annual Meeting. The Board of Directors may fix the date and
time of the annual meeting of the shareholders, but if no such date and time is
fixed by the Board, the annual meeting shall be held on a third Tuesday in May,
if not a legal holiday, and if a legal holiday, then on the next succeeding
business day, at 10:00 a.m. local time. Failure to hold an annual meeting shall
not invalidate, alter or otherwise affect the validity of subsequent actions. At
the annual meeting, the shareholders then entitled to vote shall elect Directors
and shall transact such other business as may properly be brought before the
meeting.
SECTION 2.03. Special Meetings. Special meetings of the shareholders of the
Corporation as a whole, and meetings of a particular class or series of
shareholders of the Corporation may be called for any purpose or purposes for
which meetings may lawfully be called at any time by the Chief Executive Officer
of the Corporation or by a majority of the Board of Directors, and shall be
called after the Corporation's receipt of the request in writing from
shareholders owning of record one-fourth of the amount of each class or series
of stock of the Corporation issued and outstanding and entitled to vote. Every
request for a special meeting shall state the specific purposes of the meeting.
The date of the meeting shall be held at such date and
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time as the Chief Executive Officer of the Corporation shall fix, not less than
10 days nor more than 60 days after the receipt of the request, and the
Secretary shall give due notice thereof. If the Chief Executive Officer of the
Corporation shall neglect or refuse to fix the time and date of such meeting or
shall fail to cause the Secretary to give notice thereof, the person or persons
calling the meeting may do so.
SECTION 2.04. Notice of Meetings. Written notice of the place, date and hour
of every meeting of the shareholders, whether annual or special, shall be given
to each shareholder of record entitled to vote at the meeting not less than 10
nor more than 60 days before the date of the meeting. Every notice of a special
meeting shall state the purposes thereof.
SECTION 2.05. Quorum and Adjourned Meetings. The record holders in the
aggregate of a majority of stock issued and outstanding (excluding treasury
stock) and entitled to vote at a shareholders meeting and who are present in
person or represented by proxy shall constitute a quorum for the transaction of
business, except as otherwise provided by law, by the Corporation's Certificate
of Incorporation or by these Bylaws. If the matter presented for action at any
meeting of shareholders is one which requires voting by class or series of
stock, then holders of a majority of each class or series effected who are
present in person or by proxy shall constitute a quorum for such class or
series. If a quorum of one or more classes or series of stock is present, in
person or by proxy, shareholders holding that class or series of stock may act
for that class or series, even if a quorum is not present for other classes or
series. If such quorum shall not be present or represented at any meeting of the
shareholders, the shareholders entitled to vote thereat who are present in
person or represented by proxy shall have power to adjourn the meeting from time
to time, without notice other than announcement at the meeting until a quorum
shall be present or represented. At any such adjourned meeting at which a quorum
shall be present in person or by proxy, any business may be transacted which
might have been transacted at the meeting as originally called. When a quorum is
present at any meeting, the vote of the record owners holding a majority of the
stock having voting power, present in person or represented by proxy, shall
decide all questions brought before such meeting, unless the question is one
upon which, by expressed provision of applicable law, the Corporation's
Certificate of Incorporation or these Bylaws, a different vote is required, in
which case such expressed provision shall govern and control the decision of
such question. The affirmative vote or consent of the holders of a majority of a
class or series of stock, voting as a class, shall constitute action by that
class or series, unless applicable law, the Corporation's Certificate of
Incorporation or these Bylaws expressly provides a different vote, in which case
such expressed provision shall control. Once a meeting is duly organized and a
quorum is present, the shareholders who are present in person or represented by
proxy may continue to conduct business until adjournment, even after withdrawal
of enough shareholders to leave less than a quorum present.
SECTION 2.06. Conduct of Meetings. All annual and special meetings of
shareholders shall be conducted in accordance with such rules and procedures as
the Board of Directors may determine, subject to the requirements of applicable
law, and as to matters not governed by such rules and procedures, the chairman
of the meeting shall determine in good faith the procedures to be followed. The
chairman of any annual or special meeting of shareholders shall be the Chief
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<PAGE>
Executive Officer of the Corporation, unless the Board of Directors or
shareholders entitled to vote thereat select a different person to be chairman
of the meeting. The Secretary or other person designated by the chairman of the
meeting, shall act as secretary of the meeting.
SECTION 2.07. Voting. Unless the Certificate of Incorporation provides
otherwise, each shareholder of record shall be entitled to one vote in person or
by proxy for each share of stock having voting power and held of record by such
shareholder. No cumulative voting for the election of Directors shall be
permitted unless expressly permitted by the Certificate of Incorporation. No
proxy shall be voted more than three years after its date, unless the proxy
specifically provides for a longer period and the law permits.
SECTION 2.08. Consent of Shareholders in Lieu of a Meeting. Any action
required or permitted to be taken at a meeting of shareholders of the
Corporation may be taken without a meeting, without prior notice and without a
vote, if a consent in writing setting forth the action so taken shall be signed
by the holders of record of stock (by class or series of stock where voting by
class or series of stock is required) having not less than the minimum number of
votes that would be necessary to authorize the taking of such action. Prompt
notice of the taking of action by the shareholders without a meeting by less
than unanimous written consent shall be given to those shareholders entitled to
vote on the action who did not consent in writing to such action.
SECTION 2.09. Voting Lists. At least ten (10) days before every meeting of
shareholders, the Secretary shall cause the Corporation to prepare a complete
list of the shareholders of record entitled to vote at the meeting. The list
shall be arranged in alphabetical order showing the address of each shareholder,
the number of shares registered in the name of each shareholder and the class or
series of stock held. Such list shall be open to the examination of any
shareholder of record for any lawful purpose during ordinary business hours for
a period of at least ten (10) days prior to the meeting either at the principal
executive office of the Corporation or at the place where the meeting is to be
held. The list shall also be available and open for inspection during the whole
time of the meeting and may be inspected by any shareholder of record or
authorized representative who is present.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.01. Powers. The Board of Directors shall have full power to manage
the business and affairs of the Corporation. All powers of the Corporation,
except those specifically reserved to the shareholders by law, the Certificate
of Incorporation or these Bylaws, are hereby granted to and vested in the Board
of Directors.
SECTION 3.02.Number, Qualifications and Term of Office. The Board of
Directors shall consist of such number of directors as may be determined from
time to time by resolution of the Board of Directors. No director need be an
officer or shareholder of the Corporation, but each
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Director shall be a natural person 21 years of age or older. Each Director shall
serve until the next annual meeting of the shareholders or until the Director's
successor shall have been duly elected and qualified, except in the event of the
Director's death, resignation or removal.
SECTION 3.03. Vacancies. Except as provided by law or the Certificate of
Incorporation of the Corporation, any Director may be removed, either for or
without cause, at any meeting of shareholders by the affirmative vote of a
majority in number of shares of the shareholders present in person or by proxy
at such meeting and entitled to vote for the election of such director; provided
notice of the intention to act upon such matter shall have been given in the
notice calling such meeting and further provided, if a Director is elected by a
class or series of shareholders, the Director may not be removed without the
action of a majority of the shareholders of that class or series, except as
provided by law, except as provided by law or the Certificate of Incorporation
of the corporation. Vacancies and newly created directorships resulting from any
increase in the authorized number of Directors may be filled by a majority of
the Directors then in office, though less than a quorum, or by a sole remaining
Director, and any Director so chosen shall hold office until the next annual
election or until his successor is duly elected and qualified. If there are no
Directors in office, then an election of Directors may be held in the manner
provided by law. If, at the time of filling any vacancy or any newly created
directorship, the Directors then in office shall constitute less than a majority
of the whole Board (as constituted immediately prior to any such increase), a
court of competent jurisdiction may, upon application of shareholders holding of
record at least 10 percent of the total number of the shares at the time
outstanding having the right to vote for such Directors, summarily order an
election to be held to fill any such vacancies or newly created directorships or
to replace the Directors chosen by the Directors then in office.
SECTION 3.04. Resignations. Any Director of the Corporation may resign at
any time by giving written notice to the Board of Directors, the Chief Executive
Officer or the Secretary of the Corporation. Such resignation shall take effect
upon receipt by the Corporation of such notice or at any later time specified
therein and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 3.05. Organization. At every meeting of the Board of Directors, the
Chairman of the Board, if there be one, or, in the case of a vacancy or
incapacity in the office or absence of the Chairman of the Board, the Director
chosen by a majority of the Directors present, shall be the chairman of the
meeting and shall preside, and the person appointed by the chairman of the
meeting shall act as secretary of the meeting.
SECTION 3.06. Place of Meetings. The Board of Directors may hold its
meetings, both regular and special, at such place or places within or without
the state of incorporation as the Board of Directors may from time to time
select, as designated in the notice calling the meeting.
SECTION 3.07. Organizational Meeting. The first meeting of each newly
elected Board of Directors shall be held without notice immediately following
the annual meeting of Common shareholders, unless the shareholders shall
determine otherwise.
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SECTION 3.08. Regular Meetings. Regular meetings of the Board of Directors
may be held without further notice after the regular schedule of meetings has
been determined and approved at such time and place as shall be designated from
time to time by a duly adopted action of the Board of Directors.
SECTION 3.09. Special Meetings. Special meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board or by two or more of
the Directors. Notice of each special meeting shall be given to each director by
telephone, telegram, telecopy, in writing or in person at least 24 hours (in the
case of notice by telephone, in person or actual notice however received) or 48
hours (in the case of notice by telegram, or telecopy or similar wire
communication) or five (5) days (in the case of notice by mail or otherwise)
before the time at which the meeting is to be held. Each such notice shall state
the date, time and place of the meeting to be so held.
SECTION 3.10. Quorum and Adjourned Meetings. At all meetings of the Board, a
majority of the Directors shall constitute a quorum for the transaction of
business; and the act of a majority of the Directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by law or by the Certificate of
Incorporation. Proxies of Directors shall not be counted to determine a quorum
for meetings of the Board of Directors, or for any other purpose, and a Director
may not vote by proxy at a meeting of the Board of Directors. If a quorum is not
be present at any meeting of the Board of Directors, a majority of the Directors
present thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present.
SECTION 3.11. Unanimous Consent of Directors in Lieu of a Meeting. Unless
otherwise restricted by law, the Certificate of Incorporation or these Bylaws,
any action required or permitted to be taken at any meeting of the Board of
Directors or of any Committee thereof may be taken without a meeting, without
prior notice and without a vote if all members of the Board or such Committee,
as the case may be, consent thereto in writing either before or after the taking
of action with respect thereto. The written consent shall be filed with the
minutes of proceedings of the Board or that Committee.
SECTION 3.12. Executive and Other Committees. The Board of Directors may, by
resolution adopted by a majority of the whole Board, designate an Executive
Committee and one or more other committees. Each Committee shall consist of one
or more Directors. Only to the extent expressly provided in the resolution
establishing any Committee and only to the extent such Committee is not
otherwise restricted or limited by applicable law or the Certificate of
Incorporation or these Bylaws, any Committee of the Board shall have and may
exercise all the power and authority of the Board of Directors in the management
of the business and affairs of the Corporation, including the power or authority
to declare a dividend, to authorize the issuance of stock, to adopt a
certificate of ownership and merger and to authorize the seal of the Corporation
to be affixed to all papers which may require it; but no such Committee shall
have the power or authority to (1) amend the Certificate of Incorporation
(except that a Committee may, to the extent authorized in the resolution or
resolutions providing for the issuance of shares of the stock adopted by the
Board of
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Directors, as permitted by applicable law, fix any of the preferences or rights
of such shares relating to voting, dividends, redemption, dissolution, any
distribution of assets of the Corporation or the conversion into, or the
exchange of such shares for, shares of any other class or classes or any other
series of the same or any other class or classes of stock of the Corporation not
issued and outstanding), (2) adopt an agreement of merger or consolidation, (3)
recommend to the shareholders the sale, lease or exchange, of all or
substantially all of the Corporation's property and assets, (4) recommend to the
shareholders the dissolution of the Corporation or a revocation of a
dissolution, or (5) amend the Bylaws of the Corporation. Each Committee shall
have such name as may be determined from time to time by resolution adopted by
the Board of Directors. Each Committee shall keep regular minutes of its
meetings and file the same with the minutes of the Board of Directors.
SECTION 3.13. Compensation of Directors. Unless otherwise restricted by law,
the Certificate of Incorporation or these Bylaws, the Board of Directors shall
have the authority to fix the compensation of Directors. The Directors shall be
reimbursed their actual reasonable expenses, if any, of attendance at any
meeting of the Board of Directors and any Committee thereof and may be paid a
fixed sum for attendance at each such meeting or a fixed salary as determined by
the Board of Directors. No such payment shall preclude any Director from serving
the Corporation in any other capacity and receiving compensation therefor.
ARTICLE IV
NOTICE OF MEETINGS
SECTION 4.01. Notice. Whenever notice is required to be given to any
Director or shareholder, it shall not be construed to mean personal notice, but
such notice may be given in writing, by mail, addressed to such Director or
shareholder, at the person's address as it appears on the records of the
Corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to shareholders may also be given in accordance with Section 2.04 of
Article II hereof, and notice to Directors may also be given in accordance with
Section 3.09 of Article III hereof.
SECTION 4.02. Waiver of Notice. Whenever any notice is required to be
given, a 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. Presence in person at any meeting of
the shareholders, the Board of Directors or any Committee of the Board shall
constitute a waiver of notice of that meeting, unless the person in attendance
expressly states at the outset of the meeting that the person's presence is for
the purpose of objecting to notice. Except in the case of a special meeting of
shareholders and as otherwise required by law, neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
shareholders,
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Directors, or Committee of Directors need be specified in any written waiver of
notice of such meeting.
SECTION 4.03. Teleconference Meetings. One or more shareholders, Directors
or members of a Committee of Directors may participate in a meeting of the
shareholders, the Board, or of a Committee of the Board, by means of conference
communications or similar communications equipment; provided that all persons
participating in the meeting can hear each other and participate in discussions
thereof. Participation by conference communication equipment at a meeting shall
have the same effect as being present in person at such meeting.
ARTICLE V
OFFICERS
SECTION 5.01. Number, Qualifications and Designation. The officers of the
Corporation shall be chosen by the Board of Directors and shall be a President,
one or more Vice Presidents, a Secretary, a Treasurer, and such other officers
as may be elected in accordance with the provisions of Section 5.02 of this
Article. Any person may hold more than one office. Officers may be, but need not
be, Directors or shareholders of the Corporation. The Board of Directors may
from time to time elect such other officers as it deems necessary or
appropriate, who shall exercise such powers and perform such duties as are
provided in these Bylaws and as the Board of Directors may from time to time
determine.
SECTION 5.02. Election, Term of Office and Resignation. The officers of the
Corporation shall be elected annually by the Board of Directors, and each such
officer shall hold office until a successor shall have been elected and
qualified, or until the officer's death, resignation, or removal. Any officer
may resign at any time upon written notice to the Corporation. Such resignation
shall take effect upon receipt by the Corporation of such notice, or such other
date as specified in such notice.
SECTION 5.03. Removal of Officers. Any officer or agent elected or appointed
by the Board of Directors may be removed at any time, with or without cause, by
the affirmative vote of a majority of the whole Board of Directors. If any
office becomes vacant for any reason, the vacancy may be filled by the Board of
Directors.
SECTION 5.04. Chairman of the Board. If the Board of Directors elects a
Chairman of the Board, the Chairman of the Board shall be the Chief Executive
Officer of the Corporation. The Chairman of the Board shall preside at all
meetings of the shareholders (unless the shareholders entitled to vote thereat
select a different person to so act) and the Board of Directors and shall assist
the Board of Directors in the formulation of policies to be pursued by the
executive management of the Corporation. It shall be the responsibility of the
Chairman of the Board to see that the policies established by the Board of
Directors are carried into effect. The Chairman of the Board may sign and
deliver on behalf of the Corporation any deeds, mortgages, bonds, contracts,
powers of attorney,
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or other instruments which the Board of Directors has authorized to be executed,
except in cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other officer or
agent of the Corporation; and the Chairman of the Board shall perform all duties
incident to the office of Chief Executive Officer of the Corporation and such
other duties as may be prescribed by the Board of Directors from time to time.
SECTION 5.05. President. The President shall be the Chief Operating Officer
of the Corporation, shall report to the Chairman of the Board, if one is
elected, and shall have general supervisory responsibility over all operations
of the Corporation, subject to the control of the Board of Directors. If a
Chairman of the Board is not elected and in the absence or incapacity of the
Chairman of the Board, the President shall perform all the duties of the
Chairman of the Board, including all duties as Chief Executive Officer of the
Corporation. The President shall execute and deliver, in the name of the
Corporation, deeds, mortgages, bonds, contracts or other instruments, authorized
by the Board of Directors, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
Bylaws to some other officer or agent of the Corporation; and, in general,
subject to supervision by the Chairman of the Board, if one is elected, the
President shall perform all duties incident to the office of Chief Operating
Officer of the Corporation, and such other duties as from time to time may be
assigned to him by the Chairman of the Board or the Board of Directors.
SECTION 5.06. Vice Presidents. The Vice Presidents, in the order of the
designation by the Board of Directors, shall perform the duties of the President
in the President's absence or incapacity and such other duties as may from time
to time be assigned to them by the Board of Directors, the Chairman of the Board
or by the President.
SECTION 5.07. Secretary. Unless the chairman of the meeting provides
otherwise, the Secretary shall attend all meetings of the shareholders, the
Board of Directors and Committees thereof, shall record the minutes of the
proceedings thereat and shall keep a current and complete record thereof. The
Secretary shall publish, keep and maintain records and reports of the
Corporation as required by law; shall be the custodian of the seal of the
Corporation and see that it is affixed to all documents to be executed on behalf
of the Corporation under its seal; and, in general, shall perform all duties
incident to the office of Secretary and such other duties as may from time to
time be assigned to the Secretary by the Board of Directors, the Chairman of the
Board or the President. Each Assistant Secretary shall have such powers and
perform such duties as the Board of Directors, the Chairman of the Board, or the
President may from time to time delegate to that Assistant Secretary.
SECTION 5.08. Treasurer. The Treasurer shall be the Chief Financial Officer
of the Corporation; shall have responsibility for the proper care and custody of
all corporate funds and securities; shall keep full, accurate and complete
records, receipts and disbursements of the Corporation; and shall deposit all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the Corporation as may be ordered by
the Board of Directors,
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taking proper vouchers for such disbursements; shall render a report to the
Board of Directors, whenever requested, of the financial condition of the
Corporation; and shall perform such other duties as the Board of Directors may
prescribe. In the absence or incapacity of a Corporate Controller, the Treasurer
shall also be responsible for the performance of all the duties of the
Controller. Each Assistant Treasurer shall have such powers and perform such
duties as the Board of Directors, the Chairman of the Board or the President may
from time to time delegate to that Assistant Treasurer.
SECTION 5.09. Controller. The Controller, if one is elected, shall be the
Chief Accounting Officer of the Corporation and shall cause to be kept full and
accurate books and accounts of all assets, liabilities and transactions of the
Corporation. The Controller shall establish and administer an adequate plan for
the control of operations, including systems and procedures required to properly
maintain internal controls on all financial transactions of the Corporation. The
Controller shall cause to be prepared statements of the financial condition of
the Corporation and proper profit and loss statements covering the operations of
the Corporation and such other and additional financial statements, if any, as
the Chairman of the Board, the President, the Treasurer or the Board of
Directors from time to time shall require. The Controller shall work under the
direct supervision of the Treasurer and also shall perform such other duties as
may be assigned to the Controller by the Board of Directors, the Chairman of the
Board or the President.
SECTION 5.10. Assistant Officers. The Board of Directors may appoint one or
more assistant officers. Each assistant officer shall, at the request of or in
the absence or incapacity of the officer to whom the person is an assistant,
perform the duties of such officer and shall have such other authority and
perform such other duties as the Board of Directors may prescribe.
SECTION 5.11. Bonds. If required by the Board of Directors, any officer
shall give the Corporation a bond in such form, in such sum, and with such
surety or sureties as shall be satisfactory to the Board, for the faithful
performance of the duties of the officer's office and for the restoration to the
Corporation, in case of the officer's death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in their possession or under their control belonging to the
Corporation.
SECTION 5.12. Compensation of Officers. The compensation of the officers of
the Corporation shall be determined from time to time by the Board of
Directors.
ARTICLE VI
CERTIFICATES OF STOCK
SECTION 6.01. Issuance. Each shareholder shall be entitled to a certificate or
certificates representing shares of stock of the Corporation owned of record.
The stock certificates of the Corporation shall be numbered and registered in
the stock ledger and transfer books of the Corporation as issued. Certificates
shall be signed by the Chairman, President or a Vice President
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and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant
Treasurer, and shall bear the corporate seal. Any or all of the signatures and
the corporate seal upon such certificate may be a facsimile, engraved or
printed. In case any officer, transfer agent or registrar who has signed, or
whose facsimile signature has been placed upon, any share certificate shall have
ceased to be such officer, transfer agent or registrar, the certificate shall be
valid and of the same force and effect as if the person continued to be such
officer, transfer agent or registrar.
SECTION 6.02. Transfer. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, and subject to compliance with applicable law, it shall be the duty of
the Corporation to issue a new certificate of like form to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
No transfer shall be made which would be inconsistent with applicable law.
SECTION 6.03. Stock Certificates. Stock certificates for each class and
series of stock of the Corporation shall be in such form as provided by statute
and approved by the Board of Directors. The stock transfer books for each class
and series of stock and the blank stock certificates shall be kept by the
Secretary or by any officer or agency designated by the Board of Directors for
that purpose.
SECTION 6.04. Lost, Stolen, Destroyed or Mutilated Certificates. The Board
of Directors may direct a new certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the Corporation alleged
to have been lost, stolen, destroyed or mutilated upon the receipt by the
Corporation of an affidavit of that fact by the record owner claiming the
certificate of stock to be lost, stolen, destroyed or mutilated. When
authorizing issuance of a replacement certificate, the Board of Directors may,
in its discretion and as a condition precedent to the issuance thereof, require
the record owner of such lost, stolen, destroyed or mutilated certificate, or
the person's legal representative to give the Corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen,
destroyed or mutilated.
SECTION 6.05. Record Holder of Shares. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the record
and beneficial owner of shares to receive notices, to receive dividends, to
exercise voting rights and for all other purposes; and the Corporation shall not
be bound to recognize any equitable or other claim to or interest in such shares
on the part of any other person, even if the Corporation shall have notice
thereof.
SECTION 6.06. Determination of Record Date. In order that the Corporation
may determine the shareholders entitled to notice of or to vote at any meeting
of shareholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or to receive payment of any dividend or
other distribution or allotment of any rights, or to exercise any rights in
respect of any change, conversion or exchange of stock or for any other lawful
action or
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purpose, the Board of Directors may fix a record date, which shall not be more
than 60 nor less than 10 days before the date of such meeting or any other
action. If no record date is fixed:
(1) The record date for determining shareholders entitled to notice of
or to vote at a meeting of shareholders 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; and
(2) The record date for determining shareholders entitled to express
consent to actions in writing without a meeting, when no prior
action by the Board of Directors is necessary, shall be the day on
which the first written consent is expressed; and
(3) The record date for determining shareholders for any other purpose
shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
A determination of shareholders of record entitled to notice of or to vote at a
meeting of shareholders 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.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND
OTHER AUTHORIZED REPRESENTATIVES
SECTION 7.01. Indemnification of Authorized Representatives in Third Party
Proceedings. To the maximum extent not prohibited by law, the Corporation shall
indemnify any person who was or is an authorized representative of the
Corporation (which shall mean for purposes of this Article a Director or officer
of the Corporation or another person serving at the request of the Corporation
as a director, officer, partner or trustee of another corporation, partnership,
joint venture, trust or other business enterprise) and who was or is a party
(which shall include for purposes of this Article the giving of testimony or
similar involvement) or is threatened to be made a party to any third party
proceeding (which shall mean for purposes of this Article, any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
arbitration, administrative or investigative other than an action by or in the
right of the Corporation) by reason of the fact that such person was or is an
authorized representative of the Corporation, against expenses (which shall
include for purposes of this Article attorneys' fees and expenses), judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such third party proceeding if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the Corporation and, with respect to any
criminal third party proceeding (which could or does lead to a criminal third
party proceeding) had no reasonable cause to believe such conduct was unlawful.
The termination of any third party proceeding by judgment, order, settlement,
indictment, conviction or upon a plea of nolo contendere
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or its equivalent shall not of itself create a presumption that the authorized
representative did not act in good faith and in a manner which such person
reasonably believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal third party proceeding, had
reasonable cause to believe that such conduct was unlawful.
SECTION 7.02. Indemnification of Authorized Representatives in Corporate
Proceedings. The Corporation shall indemnify any person who was or is an
authorized representative of the Corporation and who was or is a party or is
threatened to be made a party to any corporate proceeding (which shall mean for
purposes of this Article any threatened, pending or completed action or suit by
or in the right of the Corporation to procure a judgment in its favor or
investigative proceeding by the Corporation) by reason of the fact that such
person was or is an authorized representative of the Corporation, against
expenses actually and reasonably incurred by such person in connection with the
defense or settlement of such corporate action, if such person acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the Corporation; except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation, unless and only to the extent that a
court of competent jurisdiction shall determine that, despite the adjudication
of liability but in view of all the circumstances of the case, such authorized
representative is fairly and reasonably entitled to be indemnified to the extent
such court shall order.
SECTION 7.03. Mandatory Indemnification of Authorized Representatives. To
the extent that an authorized representative of the Corporation has been
successful on the merits or otherwise in defense of any third party proceeding
or corporate proceeding or in defense of any claim, issue or matter therein,
such person shall be indemnified against expenses actually and reasonably
incurred by such person in connection therewith.
SECTION 7.04. Determination of Entitlement to Indemnification. Any
indemnification under Section 7.01, 7.02 or 7.03 of this Article (unless ordered
by a court) shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the authorized representative
is proper in the circumstances, because such person has either met the
applicable standards of conduct set forth in Section 7.01 or 7.02 or has been
successful on the merits or otherwise as set forth in Section 7.03 and that the
amount requested has been actually and reasonably incurred. Such determination
shall be made:
(1) By the Board of Directors by a majority of a quorum consisting of
Directors who were not parties to such third party or corporate
proceeding; or
(2) If such a quorum of the Board of Directors is not obtainable, or,
even if obtainable, a majority vote of such a quorum so directs, by
independent legal counsel in a written opinion; or
(3) By the shareholders voting in the aggregate and not by class or
series.
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SECTION 7.05. Advancing Expenses. Expenses actually and reasonably incurred
in defending a third party or corporate proceeding shall be paid on behalf of an
authorized representative by the Corporation in advance of the final disposition
of such third party or corporate proceeding as authorized in the manner provided
in Section 7.04 of this Article upon receipt of an undertaking by or on behalf
of the authorized representative to repay such amount unless it shall ultimately
be determined that such person is entitled to be indemnified by the Corporation
as authorized in this Article. The financial ability of such authorized
representative to make such repayment shall not be a prerequisite to the making
of an advance.
SECTION 7.06. Employee Benefit Plans. For purposes of this Article, the
Corporation shall be deemed to have requested an authorized representative to
serve an employee benefit plan where the performance by such person of duties to
the Corporation also imposes duties on, or otherwise involves services by, such
person to the plan or participants or beneficiaries of the plan; excise taxes
assessed on an authorized representative with respect to an employee benefit
plan pursuant to applicable law shall be deemed fines; and action taken or
omitted by such person with respect to an employee benefit plan in the
the participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the Corporation.
SECTION 7.07. Scope. The indemnification of and advancement of expenses to
authorized representatives, as authorized by this Article, shall (1) not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any statute, agreement, vote of
shareholders or disinterested Directors or otherwise, both as to action in an
official capacity and as to action in another capacity, (2) continue as to a
person who has ceased to be an authorized representative, and (3) inure to the
benefit of the heirs, executors and administrators of such a person.
SECTION 7.08.Reliance. Each person who shall act as an authorized
representative of the Corporation shall be deemed to be doing so in reliance
upon rights of indemnification provided by this Article.
SECTION 7.09. Insurance. The Corporation may but shall not be obligated to
purchase and maintain insurance at its expense on behalf of any person who is or
was an authorized representative against any liability asserted against such
person in such capacity or arising out of such person's status as such, whether
or not the Corporation would have the power to indemnify such person against
such liability.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01. Dividends. Subject to the provisions of the
Certificate of Incorporation, dividends upon the capital stock of the
Corporation may be declared by the Board of Directors at any
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regular or special meeting only out of funds or property lawfully available
therefor under applicable law. Dividends may be paid in cash, in property, or in
shares of the capital stock or held by the Corporation, subject to the
provisions of the Certificate of Incorporation. Before payment of any dividend,
there may be set aside out of any funds of the Corporation available for
dividends such sum or sums as the Directors from time to time, in its absolute
discretion, determines to be proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for such other purpose as the Board of Directors
shall determine to be in the interests of the Corporation, and the Board of
Directors may modify or abolish any such reserve in the manner and at the time
the Board of Directors thereof so determines.
SECTION 8.02. Annual Statements. The Board of Directors, through the
officers of the Corporation, shall present at each annual shareholders meeting,
and at any special meeting of the shareholders when called for by vote of the
shareholders, a full and clear statement of the business and condition of the
Corporation.
SECTION 8.03. Contracts. Except as otherwise provided in these Bylaws, the
Board of Directors may authorize any officer or officers or any agent or agents
to enter into any contract or to execute and deliver any instrument on behalf of
the Corporation, and such authority may be general or confined to specific
instances.
SECTION 8.04. Checks. All checks, notes, bills of exchange or other orders
in writing shall be signed by such person or persons as the Board of Directors
may from time to time designate.
SECTION 8.05. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal", and the state of incorporation of the Corporation. The seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
SECTION 8.06. Deposits. All funds of the Corporation shall be deposited from
time to time to the credit of the Corporation in such banks, trust companies, or
other depositories as the Board of Directors may approve or designate; and all
such funds may be withdrawn only upon checks or withdrawal requests signed by
such one or more officers or employees as the Board of Directors shall from time
to time determine.
SECTION 8.07. Amendment of Bylaws. These Bylaws may be altered, amended,
restated or repealed or new bylaws may be adopted by the shareholders or by the
Board of Directors at any regular meeting of the shareholders or of the Board of
Directors or at any special meeting of the shareholders or of the Board of
Directors if notice of such alteration, amendment, repeal, restatement or
adoption of new bylaws is contained in the notice of such special meeting.
SECTION 8.08. Fiscal Year. The fiscal year of the Corporation shall begin
on the first
day of January and end on the 31st day of December, unless otherwise provided by
resolution of the Board of Directors.
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SECTION 8.09. Interested Directors. No contract or transaction between the
Corporation and one or more of its Directors or officers, or between the
Corporation and any other company, partnership, association or other
organization in which one or more of its 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 of Directors or Committee thereof which authorizes
the contract or transaction, or solely because the Director's or officer's vote
is counted for such purpose, if: (1) the material facts as to the relationship
or interest are disclosed to the Board or the Committee, and the Board or
Committee in good faith authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested Directors, even though the
disinterested Directors be less than a quorum; or (2) the material facts as to
the relationship or interest are disclosed to the shareholders or Directors
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the shareholders or Board of Directors; or (3)
the contract or transaction is determined to be fair as to the Corporation as of
the time it is authorized, approved, adopted or ratified by the Board of
Directors or a Committee thereof or by the shareholders. Interested Directors
may be counted in determining the presence of a quorum at a meeting of the Board
or of a Committee of the Board which authorizes the contract or transaction.
SECTION 8.10. Form of Records. Any records maintained by the Corporation in
the regular course of its business, including its stock ledger, books of account
and minute books, may be kept on, or be in the form of, punch cards, magnetic
tape, photographs, microphotographs or any other information storage device,
provided that the records so kept can be converted into clearly legible form
within a reasonable time. The Corporation shall convert any records so kept upon
the request of any person entitled to inspect the same.
15
LICENSE AGREEMENT
BETWEEN
KBS TECHNOLOGIES, INC.
AND
BRADFORD P. WHITE
THIS LICENSE AGREEMENT ("Agreement") is entered into by and between
KBS TECHNOLOGIES, INC. ("KBS") and BRADFORD P. WHITE ("WHITE").
WHEREAS, WHITE owns all the rights, titles and interests in and to
certain proprietary, unique Internet technologies, relating to the architecture,
creation and design of personal and business web sites on the world wide web,
and related processes, together with all improvements, modifications, and
changes heretofore and hereafter made by WHITE while this Agreement remains in
effect and any and all other intellectual property rights therein ("Invention");
and
WHEREAS, KBS desires to acquire, and WHITE desires to grant to KBS, a
worldwide license to use, exploit and practice the Invention; to design and
develop products that incorporate the Invention ("Licensed Products"); and to
make, market, commercialize, sell, distribute and use the License Products,
subject only to the existing rights to use the Invention which WHITE has
heretofore granted and which remain outstanding, as reflected in Exhibit A
hereto.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt, adequacy and sufficiency of which is hereby
acknowledged, the parties agree as follows:
I. GRANT OF LICENSE
1.01 License. WHITE hereby grants to KBS, and KBS hereby accepts from
WHITE, a worldwide License, upon the terms and conditions herein specified to do
the following:
(1) Use, exploit and practice the Invention; and
(2) Design, develop, improve, and assist KBS in the design,
development and improvement of the Invention; and
(3) Make, market, commercialize, sell and use products
produced as a result of the use of the Invention; and
(4) Sublicense and contract with others to provide
services in connection with the Invention.
1.02 Prohibited Acts by WHITE. WHITE agrees that he will not:
(i) Grant or extend any licenses or other rights in or to
use theInvention to others; or
<PAGE>
(ii) Permit others to use the Invention, except as
expressly permitted hereby; or
(iii) WHITE agrees faithfully to advance the
interests of KBS and not compete with the business
of KBS. WHITE also agrees that the relationships
of KBS with its customers, clients, employees,
suppliers and vendors were developed as a result of
significant effort and at great cost to KBS and that
they are valued assets of KBS. WHITE understands
and agrees thatthe purpose of the covenants contained
in this Paragraph 1.02 is to protect the legitimate
business interests of KBS without which KBS would not
have agreed to this Agreement. The restrictions
contained herein shall apply to all existing and
future KBS clients and identified prospective
clients (wherever located), and business of KBS
during the term of this Agreement and for one year
after termination of this Agreement.
1.03 Ownership of the Invention. The parties acknowledge that WHITE
owns the proprietary rights in and to the Invention. WHITE grants, bargains,
assigns, conveys and delivers all of WHITE'S rights, titles and interests in the
Invention to KBS and its successors and assigns immediately before the
occurrence of WHITE'S death or legal incapacity. The parties intend that this
assignment shall be self-executing and shall take effect immediately before the
death or legal incapacity of WHITE, without any further action on the part of
anyone.
1.04 Requirements of WHITE. WHITE agrees to provide consulting
services and other assistance to KBS in the use, development and improvement of
the Invention and to provide consulting services for and cooperation with
engineers, consultants and other contractors and representatives of KBS in an
effort to maximize the efficiency and improve the quality of Licensed Products.
1.05 Reservation of Rights. WHITE reserves the right to make, use and
further develop the Invention and to practice the Invention for his own
personal, educational, research and non-commercial purposes; but he agrees that
he will not permit others to make commercial use of the Invention, except
through KBS.
1.06 Sublicensing by KBS. During the life of WHITE and so long as
he is not legally incapacitated, KBS has the right, but only with the prior
written consent of WHITE, to grant sublicense, distribution, manufacturing and
marketing rights to third parties in its sole discretion upon terms and
conditions it deems appropriate. After the death and during periods of legal
incapacity of WHITE, KBS has the right to grant sublicense, distribution,
manufacturing and marketing rights in the Invention to third parties in its sole
discretion, without the prior written consent of WHITE, upon terms and
conditions it deems appropriate.
1.07 Commercial Distribution of Licensed Products. The License granted
hereunder entitles KBS to make, sell, practice, exploit and distribute Licensed
Products and use the Inventionin its sole discretion; and to permit its
affiliates, subsidiaries, permitted assigns and authorized contractors to do the
same.
1.08 Other Activities. Nothing contained in this Agreement shall
prevent, limit or hinder WHITE from engaging in any activity, work for hire, or
otherwise, except as expressly stated herein. Nothing done by WHITE in
connection with any such other activity shall belong to KBS or entitle KBS to
any right, title or interest therein.
II. COMPENSATION
2.01 License Fee. KBS agrees to issue to WHITE 500,000 shares of Common
Stock of KBS, at $.001 per share, the fair market value therefor, on the date
hereof; provided however, if WHITE ceases to work with KBS for any reason during
the 3 year period after the date hereof, then WHITE agrees to keep a prorata
portion of the 500,000 shares rounded to the next highest whole share,
calculated by dividing the number of days from the date hereof until WHITE
ceases to so work with KBS by 1095 and sell the balance back to KBS at $.001 per
share. For example, if WHITE works with KBS for 6 months after the date hereof,
WHITE agrees to retain 82,192 shares and agrees to sell the 417,808 shares back
to KBS for $418. WHITE agrees to execute and deliver to KBS a Subscription
Agreement in the form of Exhibit B hereto.
2.02 No Other Compensation. Except as set forth in Paragraph 2.01
above, there shall be no royalties, license fees or other forms of compensation
payable to WHITE during the life of this Agreement in connection with the grant
of the License rights in the Invention. This provision shall not preclude the
payment of compensation to WHITE for any other services rendered to KBS,
dividends received upon KBS securities or any other form of compensation or
benefits for purposes other than the grant of License rights in the Invention.
III. TERM AND TERMINATION
This Agreement shall become effective as of the first date set forth above and
shall continue in effect in perpetuity or until the law requires termination,
provided, however, in the event there is a change of control of KBS by reason of
the transfer of ownership of more than 50% of the issued and outstanding
securities of KBS, this License shall terminate effective upon such change of
control.
IV. PROTECTION OF THE INVENTION
4.01 Preservation of the Invention. The parties understand and agree
not to file for protection of the Invention under patent or other similar laws
in order to preserve the confidentiality thereof, unless the circumstances
require registration in order to preserve and protect the ownership and
proprietary rights relating to the Invention.
4.03 Patent Applications. In the event it shall become necessary or
advisable to make application for patent protection, the parties agree to
cooperate with each other to prosecute, pursue and maintain the US Patent
Applications and all other patent applications relating to the Invention and to
use their best, good faith, diligent efforts to secure patents in the US and in
such other jurisdictions as the parties mutually agree and to protect all the
patent rights and intellectual property rights relating thereto. WHITE agrees to
cooperate and coordinate with KBS on such filings and provide copies of material
documents relevant to any such filings in sufficient time to review and comment
upon such documents before filed. All attorneys' fees and expenses, filing fees
and other costs of preparing, filing and prosecuting such patent applications
shall be the responsibility of KBS.
V. CONFIDENTIALITY
5.01 Confidentiality Agreement. KBS has entered into a Confidentiality
Agreement with WHITE prior to the date hereof. The obligations of
confidentiality thereunder shall continue in accordance therewith; provided,
however, the obligation of confidentiality shall not apply to information which
is:
(1) In the public domain or which becomes generally available to
the public through no fault of the receiving party; or
(2) Already known to or in the possession of the receiving party
prior to disclosure by the disclosing party; or
(3) Disclosed on a non-confidential basis from a third party
having the right to make such a disclosure; or
(4) Independently developed by the receiving party; or
<PAGE>
(5) Not in fact confidential, proprietary or competitively
sensitive; or
(6) Required to be disclosed by law or governmental order.
5.02 Authorized Disclosures. The terms of the Confidentiality
Agreement are hereby amended, so that WHITE hereby consents to the disclosure of
any and all information by KBS or its successors and permitted assigns as shall
be necessary for them to operate the business of KBS.
VI. INFRINGEMENT
6.01 Third Party Infringement of Patent Rights. KBS and WHITE shall
promptly provide written notice to the other party of any alleged infringement
by a third party of the intellectual property rights relating to the Invention
and provide the other party with any available evidence of such infringement. In
the event there is good reason to believe infringement of any of those rights is
occurring, the parties will jointly take prompt action to abate or settle such
infringement. Either party shall have the right to institute an action in its
own name in so far as permitted by law to abate the infringement and may join
the other as a party plaintiff.
6.02 Enforcement and Defense. KBS shall have the right to prosecute
and defend, at its own expense and utilizing counsel of its choice, any claim of
infringement of or challenge to the validity of the Invention. Each party shall
promptly provide the other party with copies of all material documents in such
proceedings. No settlement, consent judgment or other voluntary final
disposition of any such suit may be entered into without the written consent of
both parties hereto, which consent shall not unreasonably be withheld.
6.03 Cooperation. In any suit to enforce or defend the Invention
pursuant to this Agreement, each party shall cooperate in all respects with the
other and, to the extent reasonably possible, have its employees testify when
requested and make available relevant records, papers, information, samples,
specimens, and the like.
6.04 Infringement Claims. Each party shall promptly notify the
other upon receipt of any information regarding any proceedings commenced or
threatened against either party or any purchaser of a product produced using the
Invention on the ground that the manufacture, use, sale or possession of the
product is an infringement of any third party's intellectual property rights.
VII. WARRANTIES AND INDEMNITIES
7.01 General Representations. Each party represents and warrants to
the other that:
(a) It has all requisite authority and power to enter into and
perform its obligations under this Agreement;
(b) The person who has executed this Agreement for such party has
all requisite authority to do so for and on behalf of that
party; and
(c) This Agreement is valid, binding and enforceable in accordance
with its terms.
7.02 Disclaimers. Nothing in this Agreement shall be construed as:
(a) A warranty or representation by WHITE as to the validity or scope of
the Invention, except that WHITE reasonably believes that the Invention
does not infringe the rights of others; or
(b) A warranty or representation by WHTIE that anything made, used,
sold, or otherwise disposed of through the License granted herein is or
will be free from infringement of patents, copyrights, trademarks, or
other proprietary rights of third parties.
VIII. INDEMNIFICATION
8.01 Indemnification. Each party agrees to indemnify, defend and
hold harmless the other party and its directors, officers, employees, agents and
representatives, and their respective successors, heirs and assigns
(Indemnities) against any liability, damage, loss or expense (including
reasonable attorneys fees and the expense of litigation) incurred by or imposed
upon it in connection with any claims, suits, actions, demands or judgments
arising out of any theory of law or by reason of a breach of its duties
hereunder. With respect to infringement by the Invention of third-party
intellectual property rights, each party understands and agrees that each is
entering into this Agreement reasonably believing that the Invention does not
infringe the rights of others, but no assurance is given by either party to that
effect. Each party shall give prompt written notice to the other of the
commencement of any action, suit, or proceeding for which indemnification may be
sought and shall cooperate reasonably with the other in the defense and
prosecution thereof. Neither party may settle any such dispute where the
settlement adversely affects the rights of the other without the written consent
of the other.
8.02 Disclaimer. WHITE MAKES NO REPRESENTATIONS AND EXTENDS NO
WARRANTIES OF ANY KIND, EXPRESSED OR IMPLIED, EXCEPT TO THE EXTENT THAT WHITE
OWNS THE INVENTION AND THE INTELLECTUAL RIGHTS RELATING THERETO AND THAT WHITE
REASONABLY BELIEVES THAT INVENTION AND THE INTELLECTUAL PROPERTY RIGHTS RELATED
THERETO DO NOT INFRINGE ANY RIGHTS OF ANY OTHER PERSON OR ENTITY.
IX. MISCELLANEOUS
9.01 Provisions Contrary to Law. The parties agree to comply
with all laws, rules and regulations applicable to the performance of their
obligations hereunder.
9.02 Notices. Any notice may be initially given by facsimile with
confirmation required or permitted to be given by this License by prepaid, first
class, registered or certified mail addressed as set forth below unless changed
by notice so given. Such notices properly addressed shall be effective upon
receipt by the party to whom notice is sent.
9.03 Dispute Resolution. The parties agree to use good faith
reasonable diligence to seek to resolve all disputes by mutual agreement. The
parties agree to submit all disputes arising hereunder not resolved by mutual
agreement to binding arbitration conducted in English in Tulsa, Oklahoma in
accordance with the Commercial Rules of Arbitration of the American Arbitration
Association. The parties agree to be fully and finally bound by a decision made
in arbitration. The prevailing party in any such proceeding shall be entitled to
be awarded its attorneys' fees and expenses, enforcement costs and such other
relief as the court of competent jurisdiction shall award.
9.04 Force Majeure. Neither party to this Agreement shall be liable for delay
or failure in the performance of any of its obligations hereunder, except for
the payment of money, if such delay or failure is due to causes beyond its
reasonable control. The party affected by a force majeure event shall use its
good faith diligent efforts to remedy such event as soon as reasonably possible.
9.05 Assignments. This Agreement may not be assigned by either party
without the written prior consent of the other party, which consent shall not be
unreasonably withheld; provided, however, KBS may assign this Agreement and all
its rights and obligations hereunder to a corporation or to any affiliate or to
a successor of all or substantially all of its business. KBS shall provide WHITE
notice of any such assignment. Assignees of this Agreement may also assign this
Agreement in the manner described above. Assignees are bound by all the
obligations of this Agreement. The parties hereto agree that each is acting as
an independent contractor and not as an agent of the other or as joint
venturers.
9.06 Waivers and Modifications. The failure of any party to
insist on the performance of any obligation hereunder shall not act as a waiver
of such obligation. No waiver, modification, release, or amendment of any
obligation under this Agreement shall be valid or effective unless in writing
and signed by both parties hereto.
9.07 Successors in Interest. This Agreement shall inure to the benefit
of and be binding on each party and each permitted assign, successor in
interest, and subsidiary.
9.08 Choice of Law and Jurisdiction. This Agreement is subject to
and shall be construed and enforced in accordance with the laws of Oklahoma.
9.09 Entire Agreement. This Agreement constitutes the entire agreement
between the parties as to the subject matter hereof, and all prior negotiations,
representations, agreements and understandings are merged into, extinguished by
and completely expressed by this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date
written above.
KBS Technologies, Inc.
By: /s/ Kipp Slicker /s/ Bradford P. White
Kipp Slicker, President Bradford P. White, Individually
<PAGE>
Exhibit A
to
License Agreement
Between
KBS Technologies, Inc.
and
Bradford P.White
The following is a list of all rights retained by WHITE:
1. The right to use the Invention for WHITE'S personal and commercial benefit.
<PAGE>
Exhibit B
to
License Agreement
Between
KBS Technologies, Inc.
and
Bradford P. White
[Subscription Agreement]
<PAGE>
Confidentiality and Consulting Agreement
This Agreement ("Agreement") is entered into effective February 15,
2000 by and between KBS TECHNOLOGIES, INC.("KBS") and Brad White ("Consultant").
Whereas, Consultant desires to work as a consultant for KBS, to
acknowledge the ownership of the property of KBS, and to agreed to keep
confidential and preserve to value for KBS of the confidential information of
KBS as a condition of Consultant's compensation and benefits received for
services rendered for KBS.
For compensation to be paid and Consultant benefits to be received and
for other good and valuable consideration, the receipt, adequacy and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. Consultant agrees to become an Consultant of KBS, and KBS
agrees to engage Consultant as an Consultant of KBS, upon the
terms and conditions and for the compensation and other
Consultant benefits as the parties mutually agree. The
consultant relationship is an AT-WILL relationship which
either may terminate or modify at any time with or without
cause.
2. KBS agrees to pay Consultant 75% of all net collected receipts
for work performed by Consultant for KBS and its customers.
3. Consultant agrees that the Protected Property and all work
done by Consultant for KBS is the sole property of KBS. The
Protected Property is confidential, proprietary and
competitively sensitive. Consultant's sole right to use the
Protected Property is as an Consultant of KBS.
4. Consultant agrees to keep strictly confidential all the
Protected Property, except as permitted hereby. Consultant
agrees not to use the Protected Property for any purpose other
than for the sole benefit of KBS in furtherance of the best
interest and benefit of KBS.
5. KBS is entitled to specific performance, mandatory injunctive
relief and any other damages at law or in equity for
Consultant's breach of this Agreement. These remedies are
cumulative, money damages are inadequate and are not punitive.
6. Consultant agrees to return all documents and copies of all
Protected Property upon the termination with KBS.
7. Consultant is not an employee, partner, joint venturer or
other representative of KBS. Consultant is an independent
contractor. All work done and all compensation received for
work done for KBS shall belong to and be surrendered to KBS.
KBS TECHNOLOGIES, INC. Consultant:
By: /s/ Kipp Slicker /s/ Brad White
Kipp Slicker, President Brad White
<PAGE>
EXHIBIT A
DEFINITION OF KBS PROPERTY
For purposes of this Agreement, all Technical Information, all
Business and Commercial Information, and All Miscellaneous Information
concerning KBS, including:
(i) Technical Information. All trade secrets, inventions, discoveries, know-how,
formulas, formulations, compositions, specifications, patents, patent
applications, copyrights, software and applications, drawings, schematics,
processes, process technologies, manufacturing techniques, tests, test results,
research and development and similar technical information, together with all
actual and proposed modifications and alterations made, created, developed,
invented or discovered by or for and on behalf of KBS; and
(ii) Business and Commercial Information. All information concerning the
financial condition, business and financial results of operations, marketing
strategies, financial projections, contacts with customers and prospective
customers, prospective business acquisitions, lists of customers and their
expected requirements, customer representatives, lists of prospective customers
and their expected requirements, costs, pricing, margins, sales, quantities,
product plans, market information, purchase orders, sources of supply,
projections, confidential personnel information, all contracts or agreements
containing confidentiality provisions, the contents of all agreements relating
to any of the foregoing and all other information relating to KBS or its
customers or prospective customers which is either confidential or proprietary
or competitively sensitive; and
(iii) Miscellaneous Information and Documentation. All records, reports,
analyses,memoranda, notes, analyses, compilations, studies, reports and copies
and extracts thereof, however and whenever arising, containing any Protected
Property with respect to any of the foregoing in every recordable form.
"KBS Property" includes but is not limited to information provided by or on
behalf of a party to this Agreement before and after the date hereof.
"KBS Property" does not include (a) information which is or becomes known to the
general public through no fault of the receiving party, (b) information which
was rightfully in the possession receiving party prior to its disclosure by or
on behalf of the other party hereto, and (c) information which comes into the
possession of receiving party without violation of any contractual or legal
obligation. Even if these exceptions to the confidential nature of information
provided do apply to a specific item, that does not relieve the receiving party
of its obligations hereunder with respect to all other items. The receiving
party shall have the burden of proof relating to all exceptions to the
confidential treatment of Protected Property.
PROMISSORY NOTE
TULSA, OKLAHOMA
$2,500 February 18, 2000
FOR VALUE RECEIVED, KBS Technologies, Inc. ("Borrower") hereby promises
to pay to the order of Kipp Slicker ("Holder") the principal amount of
Twenty-Five Hundred and no/dollars ($2,500) plus interest in installments as set
forth herein.
1. Installments. The principal and interest outstanding shall be
payable on demand.
2. Interest Rate. Prior to an event of default, the obligations
arising hereunder shall bear interest at the rate of 10% per annum. Upon and
during the continuation of an event of default, the unpaid balance of this Note
shall bear interest at the rate of 14% per annum.
3. Maximum Interest Rate. Notwithstanding any provision herein,
Holder shall never be entitled to receive, collect or apply as interest on any
amount owed hereunder any amount in excess of the maximum lawful rate of
interest permitted to be charged by any applicable law. In the event Holder
shall ever receive, collect or apply as interest any amount in excess of any
amount permitted to be received under applicable law, all such excess amounts
shall be applied as of the date received to the reduction of the principal
amount of indebtedness hereunder. After payment of the indebtedness in full, all
remaining excess amounts paid shall forthwith be returned within five (5) days
to Borrower.
4. Permissive Prepayment. This Note and all indebtedness
arising in connectionherewith may be prepaid at any time and from time to time
in whole or in part by any Borrower without premium, penalty or other charges or
fees whatsoever. All prepayments shall be applied to installments in the inverse
order of their due date.
5. No Collateral. The obligations of this note are unsecured.
6. Events of Default. At the option of Holder, this Note shall
become immediately due and payable upon the occurrence and during the
continuation of the following events of default:
(a) Borrower fails to pay principal or interest immediately due and
owing under this Note within 3 business days after Borrower receives written
notice of such payment; or:
(b) Borrower shall:
(1) Be adjudicated as bankrupt or insolvent; or
(2) Admit in writing its inability to pay its debts
generally as they become due; or
(3) Apply for or consent to the appointment of a
receiver, trustee, or liquidator of it or of all or
substantially all of its assets; or
(4) File a voluntary petition in bankruptcy or a petition
or an answer seeking reorganization or an arrangement
with creditors or take advantage of or seek any other
relief under any bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency
law now or hereafter existing; or
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<PAGE>
(5) File an answer admitting the material allegations of,
or consenting to, or failure to answer timely a
petition filed against it in any bankruptcy,
reorganization, rearrangement, debtor's relief, or
other insolvency proceedings; or
(6) Institute or voluntarily be or become a party to any
other judicial proceedings intended to effect a
discharge of all or substantially all of its debts,
in whole or in part, or a postponement of the
maturity or the collection thereof, or a suspension
of any of the rights or powers granted hereby; or
(c) An order, judgment, or decree shall be entered by any court of
competent jurisdiction approving a petition seeking reorganization of Borrower
or appointing a receiver, trustee, or liquidator of Borrower or of all or
substantially all of its assets, and such order, judgment, or decree is not
permanently stayed or reversed within sixty (60) days after entry thereof, or a
petition is filed against Borrower seeking reorganization, an arrangement with
creditors, or any other relief under any bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency law now or hereafter
existing, and such petition is not discharged within sixty (60) days after the
filing thereof.
If one or more events of default shall occur and be continuing, after
the expiration of any grace or curative period provided herein, Holder may, at
its option, declare the entire indebtedness arising hereunder due and payable
and may proceed to protect and enforce any and all rights to enforce payment of
all indebtedness arising hereunder at law or in equity. All rights, remedies and
powers conferred upon Holder herein shall be cumulative and not exclusive of any
other rights, remedies or powers. No delay or omission to exercise any right,
remedy or power shall impair any such right, remedy or power or shall be
construed to be a waiver of any event of default or any acquiescence or
forbearance with respect thereto. Any right, remedy or power granted hereunder
or applicable under law or in equity may be exercised from time to time,
independently or concurrently. No waiver of any event of default shall extend
any other subsequent event of default. No single or partial exercise of any
right, remedy or power shall preclude the exercise of any other right, remedy or
power or the further exercise thereof.
7. Governing Law. This Note has been executed and delivered in Tulsa
County, Oklahoma and shall be governed by and construed in accordance with the
laws of the State of Oklahoma. Borrower expressly agrees that the courts of
Tulsa, County, Oklahoma shall have jurisdiction over all proceedings in
connection herewith, and Borrower agrees that for purposes of enforcement of
Holder's rights and remedies hereunder, venue and personal jurisdiction are
proper in the courts situated in Tulsa County, Oklahoma.
8. Severability. In the event any provision of this Note shall be
declared by a court of competent jurisdiction to be unenforceable or invalid for
any reason whatsoever, the remaining provisions of this Note shall not be
affected thereby and all such remaining provisions shall be enforced to the
maximum extent permitted by law.
9. Costs of Collection. If this Note or any portion hereof is not paid
when due, after expiration of all curative periods, Borrower promises to pay all
reasonable costs of collection, including but not limited to, all reasonable
attorneys' fees, court costs and reasonable expenses incurred in good faith by
the Borrower in order to obtain prompt, punctual and proper payment of all
amounts of indebtedness arising hereunder.
10. Waiver. Borrower and all other parties now or hereafter liable
for the payment of the indebtedness arising hereunder, whether as endorser,
guarantor, surety or otherwise, waives demands, presentments, diligence in
collecting and consent to all extensions which from time to time may be granted.
11. Binding Effect. This Note and all the covenants, promises,
obligations and agreements of Borrower and all rights, powers, privileges and
entitlements of Holder shall be binding upon and inure to the benefit of their
respective successors, legal representatives, and permitted assigns.
12. Currency and Place of Payment. All payments of principal and
interest arising in connection with this Note shall be made in lawful currency
of the United States of America and shall be paid to Holder at the Holder's
<PAGE>
principal executive office at 4444 East 66th Street, Suite 201, Tulsa OK
74136, or at such other place as Holder shall instruct the Borrower in writing.
By: /s/ Kipp Slicker
Kipp Slicker
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<PAGE>
KBS TECHNOLOGIES, INC.
OFFICER/DIRECTOR INDEMNIFICATION AGREEMENT
THIS AGREEMENT ("Agreement") is entered into and effective this 11th
day of February, 2000, by and between KBS TECHNOLOGIES, INC., an Oklahoma KBS
("KBS"), and Kipp Slicker ("Indemnified Party").
WHEREAS, the Board of Directors has determined that it is in the best
interest of the KBS and its shareholders to agree to indemnify Indemnified Party
(who is a Director and/or Officer of KBS) from and against certain liabilities
for actions taken by the Indemnified Party during the performance of tasks for
KBS.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt, adequacy and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Indemnification. KBS hereby agrees to indemnify and hold harmless
Indemnified Party to the maximum extent possible under all applicable laws
against any and all claims, demands, debts, duties, liabilities, judgments,
fines and amounts paid in settlement and expenses (including attorneys' fees and
expenses) actually and reasonably incurred by Indemnified Party in connection
with the investigation, defense, negotiation and settlement of any such claim or
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including an action by or in the
right of KBS) to which Indemnified Party is or becomes a party, or is threatened
to be made a party, by reason of the fact that Indemnified Party is an officer
or a director of KBS or any of its subsidiaries.
2. Limitations on Indemnity. No indemnity pursuant to this
Agreement shall be made by KBS:
(a) For the amount of such losses for which the
Indemnified Party is indemnified pursuant to any insurance purchased and
maintained by KBS; or
(b) In respect to remuneration paid to Indemnified Party if it
shall be determined by a final judgment or other final adjudication that such
remuneration was in violation of law; or
(c) On account of any suit in which judgment is rendered
against Indemnified Party for an accounting of profits made (i) for an improper
personal profit without full and fair disclosure to KBS of all material
conflicts of interest and not approved thereof by a majority of the
disinterested members of the Board of Directors of KBS; or (ii) from the
purchase or sale by Indemnified Party of securities of KBS pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto or similar provisions of any federal, state or local law; or
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<PAGE>
(d) On account of Indemnified Party's conduct which is finally
determined to have been knowingly fraudulent, deliberately dishonest or
willfully in violation of applicable law for which KBS suffered actual financial
damages; or
(e) If a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
3. Continuation of Indemnity. All agreements and obligations of KBS
contained herein shall continue during the period Indemnified Party is an
officer or director of KBS or a subsidiary and thereafter so long as Indemnified
Party shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether civil, criminal or investigative, by reason
of the fact that Indemnified Party was an officer or a director of KBS or any
subsidiary.
4. Notification and Defense of Claim. Within 30 days after receipt by
Indemnified Party of notice of any claim or any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, in which Indemnified Party has a right to Indemnification
hereunder, Indemnified Party will notify KBS of the commencement thereof. With
respect to any such action, suit or proceeding as to which Indemnified Party
notifies KBS of the commencement thereof:
(a) KBS will be entitled to participate therein at its
own expense; and
(b) Except as otherwise provided below, to the extent that it
may wish, KBS jointly with any other indemnifying party will be entitled to
assume the defense thereof, with counsel satisfactory to Indemnified Party.
After notice from KBS to Indemnified Party of its election to assume the defense
thereof, KBS will not be liable to Indemnified Party under this Agreement for
any legal or other expenses subsequently incurred by Indemnified Party in
connection with the defense thereof other than reasonable costs of investigation
or as otherwise provided below. Indemnified Party shall have the right to employ
counsel in such action, suit or proceeding, but the fees and expenses of such
counsel incurred after notice from KBS of its assumption of the defense thereof
shall be at the expense of Indemnified Party, unless (i) the employment of
counsel by Indemnified Party has been authorized by KBS, (ii) Indemnified Party
shall have reasonably concluded that there may be a conflict of interest between
KBS and Indemnified Party in the conduct of the defense of such action, (iii)
KBS shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of counsel shall be at the
expense of KBS, or (iv) unless the Indemnified Party reasonably and in good
faith asserts defenses and theories of defense not asserted by KBS. KBS shall
not be entitled to assume the defense of any action, suit or proceeding brought
by or on behalf
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<PAGE>
of KBS or as to which Indemnified Party shall have made the conclusion
provided for in (ii) or (iv) above.
(c) Either party may settle any matter, without the consent of
the other, but in such event, the indemnification provided for herein shall be
of no force or effect with respect to such settlement. KBS shall not be liable
to indemnify Indemnified Party under this Agreement for any amounts paid in
settlement of any action or claim effected without the KBS's written consent.
KBS shall not settle any action or claim in any manner which would impose any
penalty or limitation on Indemnified Party without Indemnified Party's written
consent. Neither KBS or Indemnified Party will unreasonably withhold their
consent to any proposed settlement.
5. Repayment of Expenses. Indemnified Party agrees that Indemnified
Party will reimburse KBS for all reasonable expenses paid by KBS in defending
any civil or criminal action, suit or proceeding against Indemnified Party in
the event and only to the extent that Indemnified Party is finally determined
that Indemnified Party is not entitled to be indemnified by KBS for such
expenses under the KBS's charter or bylaws, this Agreement or under applicable
law.
6. Enforcement.
(a) KBS expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations
imposed on KBS hereby in order to induce Indemnified
Party to serve as an officer and/or director of KBS
or any subsidiary thereof, and acknowledges that
Indemnified Party is relying upon this Agreement as
part of the consideration for so acting.
(b) In the event Indemnified Party is required to bring
any action to enforce rights or to collect moneys due
under this Agreement and is successful in such
action, KBS shall reimburse Indemnified Party for all
of Indemnified Party's reasonable attorneys' and
other fees and expenses in bringing and pursing such
action.
7. Severability. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof.
8. Governing Law; Binding Effect; Amendment and Termination.
(a) This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Oklahoma.
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<PAGE>
(b) This Agreement shall be binding upon Indemnified Party and
upon the KBS, its successors and assigns, and shall inure to the benefit of
Indemnified Party, his heirs, personal representatives and assigns and to the
benefit of the KBS, its successors and assigns.
(c) No amendment, modification, termination or change of this
Agreement shall be effective unless it is signed by both parties hereto.
9. Additional Rights. This Agreement is in addition to, and not
in lieu of, any other right to indemnification under the KBS's corporate
charter, bylaws, insurance contracts or otherwise at law or in equity.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
KBS TECHNOLOGIES, INC.
By: /s/ Kipp Slicker
Kipp Slicker, President
Indemnified Party:
/s/ Kipp Slicker
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<PAGE>
KBS TECHNOLOGIES, INC.
2000 INCENTIVE STOCK OPTION PLAN
1. Purpose of the Plan. The KBS TECHNOLOGIES, INC. 2000 Incentive Stock
Option Plan ("Plan") is intended to advance the interests of KBS TECHNOLOGIES,
INC. ("Company") by providing its officers and other key employees who have
substantial responsibility for the direction and management of the Company with
incentive for them to promote its success, to increase their proprietary
interest in the Company, and to encourage them to remain in its employ. The
above aims will be effectuated through the granting of certain stock options to
purchase shares of the common stock of the Company ("Common Stock"). It is
intended that options granted under the Plan and designated by the Committee
under Paragraph 2 will qualify as Incentive Stock Options ("Options") under
Section 422A of the Internal Revenue Code of 1954, as amended ("Code"), and the
terms of the Plan shall be interpreted in accordance with this intention. In the
event that this Plan is inconsistent in any way with applicable provisions of
the Code relating to incentive stock options, it is the intent of the Company
that the terms of the Code shall apply.
2. Administration of the Plan. The Board of Directors shall appoint a
Committee or, if no such committee is so appointed, the Board of Directors shall
act as the Committee to administer this Plan. The Board may from time to time
appoint members to the Committee in substitution for members previously
appointed and may fill vacancies, however caused, in the Committee. The
Committee shall select one of its members as its Chairman and shall hold its
meetings at such times and places as it shall deem advisable. All actions of the
Committee shall be taken by majority vote of its members. Any action may be
taken by a written instrument signed by all the members of the Committee, and
action so taken shall be as effective as if that action had been taken by a
majority vote of the Committee members at a meeting duly called and held. The
Committee may appoint a secretary to keep minutes of its meetings and shall make
such rules and regulations for the conduct of its business as it shall deem
advisable.
3. Grant of Options. Subject to any applicable limitation in federal
tax laws from time to time, the Committee shall have complete and full authority
in its discretion: (i) to determine and designate those key employees of the
Company and its subsidiaries who are to receive Options, (ii) to authorize the
granting of Options, (iii) to establish the number of shares to be covered by
such Options including the terms thereof; and (iv) to interpret the Plan and to
prescribe, amend, and rescind rules and regulations relating to it. All
decisions of the Committee shall be final and binding.
4. Stock Subject to the Plan. The aggregate number of shares which may
be issued under Options granted under the Plan shall not exceed 1,000,000 shares
of Common Stock. Such shares may consist of authorized but unissued shares of
Common stock or previously issued shares of Common Stock reacquired by the
Company. Any shares subject to an Option under the Plan which remain unissued
upon the termination of the Option and which are not subject to outstanding
Options at the termination of the Plan, shall cease to be subject to the Plan,
but until termination of the Plan, the Company shall at all times make available
sufficient shares to meet the requirements of the Plan. Should any Option
hereunder expire or terminate prior to its exercise in full, the shares
theretofore subject to such Option may again be subject to a new Option granted
under the Plan. The
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<PAGE>
aggregate number of shares which may be issued under the Plan shall be subject
to adjustments as provided in Paragraph 6(j) hereof.
5. Eligibility. The persons eligible to participate in the Plan as
recipients of Options shall include only key employees of the Company and its
subsidiaries. The term "key employee" shall include directors, officers,
executives, and supervisory personnel, as well as other employees of the Company
or a subsidiary corporation of the Company. The term "subsidiary corporation"
shall for the purpose of this Plan be defined in the same manner as such term is
defined in Section 425(f) of the Code. A key employee who has been granted an
Option hereunder shall remain eligible to receive an additional Option or
Options, if the Committee shall so determine. Options granted to different
recipients and at different times need not contain similar provisions.
6. Terms and Conditions. Each Option granted under the Plan shall be
evidenced by a written Incentive Stock Option Agreement ("Option Agreement"), in
a form approved by the Committee, which shall be subject to the following
express terms and conditions and to such other terms and conditions as the
Committee may deem appropriate.
(a) Option Period. Each Option Agreement shall specify the
period for which the Option thereunder is granted (which in no event
shall exceed ten years from the date of grant) and shall provide that
the Option shall expire at the end of such period. However, in the case
of an Option granted to an individual who, at the time of grant, owns
more than ten percent of the total combined voting power of all classes
of Common Stock of the Company ("Ten Percent Stockholder") on the date
the Option is granted to him, the Option period shall not exceed five
years from the date of grant.
(b) Option Price. The purchase price under each Option issued
shall be determined by the Committee at the time the Option is granted,
but in no event shall such purchase price be less than 100 percent of
the fair market value of the Company's Common Stock on the date of
grant. In the case of an Option granted to a Ten Percent Stockholder,
the Option price shall not be less than 110 percent of the fair market
value of the Common Stock on the date of grant, subject to the Option,
on the date the Option is granted.
(c) Exercise Period. Each Option Agreement shall provide that
the Option therein granted may be exercised in whole or in part at any
time after the Option grant or vested in such installments as the
Committee or Board of Directors may specify. However, no portion of any
Option may be exercisable prior to the approval of the Plan by the
shareholders of the Company.
(d) Procedure for Exercise. Options shall be exercised by the
delivery of written notice to the Company setting forth the number of
shares with respect to which the Option is to be exercised. Such notice
shall be accompanied by cash or certified check, bank draft, and
specifying the address to which the certificates for such shares are to
be mailed. As promptly as practicable after receipt of such written
notification and payment, the Company
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shall deliver to the optionee, certificates for the number of shares
with respect to which such Option has been so exercised, issued in the
optionee's name; provided, however, that such delivery shall be deemed
effected for all purposes when a stock transfer agent of the Company
shall have deposited such certificates in the United States mail,
addressed to the optionee, at the address specified pursuant to this
paragraph 6(d).
(e) Termination of Employment. If a key employee to whom an
Option has been granted ceases to be employed by the Company or any of
its subsidiaries for any reason other than death or disability, the
Options theretofore granted to him under this Plan to the extent not
theretofore exercised by him, shall forthwith terminate. Any Options
which are exercisable on the date of such termination of employment may
be exercised during a three month period beginning on such date;
provided, however, if an optionee's employment is terminated because of
the optionee's dishonesty, theft, embezzlement from the Company,
disclosing trade secrets of the Company, or willful misconduct while in
the employment of the Company, then any Option or unexercised portion
thereof granted to said optionee shall expire upon such termination of
employment.
(f) Disability or Death of Optionee. In the event of the
disability or death of an Option holder under the Plan while he is
employed by the Company or any of its subsidiaries, the Options
previously granted to him may be exercised (to the extent he would have
been entitled to do so at the date of his disability or death) at any
time and from time to time, within a period of one year after his
disability or death, by the former employee, by the executor or
administrator of his estate, by the person or persons to whom his
rights under the Option shall pass by will or the laws of descent and
distribution, but in no event may the Option be exercised after its
stated expiration. A key employee shall be deemed to be disabled if, in
the opinion of a physician selected by the Committee, he is incapable
of performing services for the Company or any of its subsidiaries by
reason of any medically determinable physical or mental impairment
which can be expected to result in death or to be of long, continued
and indefinite duration.
(g) Transferability. Any Option granted hereunder may not be
sold, pledged, assigned, hypothecated, transferred or disposed of in
any manner other than by will or by the laws of descent and
distribution and shall be exercisable, during the optionee's lifetime,
only by him.
(h) Rights as a Stockholder. An optionee or a transferee of an
Option under the Plan has no rights as a stockholder with respect to
shares covered by an Option until the date he validly exercises the
Option in accordance herewith including full payment for the exercised
Option shares; except as provided in paragraph 6(j), no adjustment for
dividends or otherwise shall be made if the record date therefor is
prior to the date on which he became or becomes the holder of record
thereof.
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<PAGE>
(i) Extraordinary Corporate Transactions. In the event of (i)
the dissolution or liquidation of the Company or similar occurrence,
(ii) any merger, consolidation, acquisition, reorganization, or similar
occurrence, where the Company will not be a surviving entity or (iii) a
transfer of all or substantially all of the assets of the Company or
more than 80% of the outstanding Common Stock, the Option rights
granted hereunder shall terminate and thereupon become null and void;
provided, however, that each optionee shall have the right immediately
prior to or concurrently with such dissolution, liquidation, merger,
consolidation, acquisition, reorganization or similar occurrence, to
exercise any Option rights granted hereunder, without regard to an
option period or of any limitations thereunder.
(j) Changes in Company's Capital Structure. The existence of
the Plan and outstanding Options granted hereunder shall not affect in
any way the right or power of the Company or its stockholders to make
or authorize any or all adjustments, recapitalizations, reorganizations
or other changes in the Company's capital structure or its business, or
any merger or consolidation of the Company, or any issuance of bonds,
debentures, preferred or prior preference stock senior to or affecting
the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part
of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise; provided, however, if the
outstanding shares of Common Stock of the Company shall at any time be
changed or exchanged by declaration of a stock dividend, stock split,
combination of shares, or recapitalization, the number and kind of
shares subject to the Plan or subject to any Options theretofore
granted, and the Option prices, shall be appropriately and equitably
adjusted.
(k) Investment Representation. Shares of Common Stock shall
not be issued and delivered with respect to an Option granted under the
Plan unless issuance of such shares (i) complies with all relevant
provisions of law including, without limitation the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, the
rules and regulations promulgated thereunder, or (ii) the Committee has
received evidence satisfactory to it to the effect that an exemption
from registration under the Securities Act and any applicable state
securities laws is available for the sale and issuance contemplated.
Each Option Agreement shall contain an agreement that upon demand by
the Committee for such a representation, the optionee (or any person
acting under paragraph 6(f)) shall deliver to the Company at the time
of any exercise of an Option a written representation that the shares
to be acquired upon such exercise are to be acquired for investment and
not for resale or with a view to the distribution thereof. Upon such
demand, delivery of such representation prior to the delivery of any
shares issued upon exercise of an Option and prior to the expiration of
the Option period shall be a condition precedent to the right of the
optionee or such other person to purchase any shares.
(l) Option Agreement. Each Option Agreement which provides
for the grant of an Option to a key employee shall contain such terms and
provisions as the Committee may
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<PAGE>
determine to be necessary or desirable in order to qualify such Option under
Section 422A of the Code.
7. Amendments or Termination. The Board of Directors may at any time
and from time to time amend, alter or terminate the Plan, but no amendment or
alteration shall be made which would impair the rights of any optionee under any
Option theretofore granted without his consent, or which, without the approval
of the holders of at least a majority of the shares of Common Stock at the time
outstanding, would: (i) except as is provided in paragraph 6(j) of the Plan,
increase the minimum number of shares reserved for the purposes of the Plan or
reduce the Option price provided for in paragraph 6(b) of the Plan, (ii) change
the class of persons eligible to participate in the Plan as provided in
paragraph 4 of the Plan, (iii) extend the Option period provided for in
paragraph 6(a) of the Plan, or (iv) extend the expiration date of this Plan set
forth in paragraph 9 of the Plan.
8. Compliance With Other Laws and Regulations. The Plan, the grant and
exercise of Options thereunder, and the obligation of the Company to sell and
deliver shares under such Options shall be subject to all applicable federal and
state laws, rules and regulations and to such approvals by any governmental or
regulatory agency or national securities exchange as may be required, and shall
be further subject to counsel for the Company with respect to such compliance.
The Company shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any registration or
qualification of such shares under any federal or state law or any ruling or
regulation of any government body or national securities exchange which the
Company shall, in its sole discretion, determine to be necessary or advisable
and the Company shall have no obligation to effect any such registration or
qualification.
9. Effectiveness and Expiration of Plan. The Plan shall be effective on
the date the Board of Directors of the Company adopts the Plan. If the holders
of at least a majority of the shares of Common Stock at the time outstanding
fail to approve the Plan within twelve months after the date the Board of
Directors approved the Plan, the Plan shall thereupon terminate and all Options
previously granted under the Plan shall immediately become null and void. The
Plan shall expire ten years after the effective date of the Plan and thereafter
no Option shall be granted pursuant to the Plan.
10. Liability of Company. The Company, its parent or any
subsidiary which is in existence or thereafter comes into existence shall not
be liable to an optionee or other persons as to:
(a) The Non-Issuance of Shares. The non-issuance or sale of
shares as to which the Company has been unable to obtain from any
regulatory body having jurisdiction the authority deemed by the
Company's counsel to be necessary to the lawful issuance and sale of
any shares hereunder; and
(b) Tax Consequences. Any tax consequence expected, but not
realized, by any optionee or other person due to the exercise of any Option
granted hereunder.
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11. Use of Proceeds. The proceeds received by the Company from
the sale of Common Stock pursuant to the exercise of Options granted under the
Plan shall be added to the general funds and used for general corporate
purposes.
12. Governing Law. This Plan shall be interpreted and construed
in accordance with the laws of the State of Oklahoma.
13. Incorporated by Reference. The Plan hereby granted includes all
technical corrections, modifications, alterations and amendments to the Code
applicable to incentive stock option plans generally, and all regulations,
administrative pronouncements and interpretations thereof are hereby
incorporated herein automatically effective immediately upon the effective date
thereof. All options granted under the Plan and all Option Agreements executed
pursuant to the terms of the Plan hereby incorporate all applicable provisions
of all amendments, revisions, modifications and alterations as hereby and as
hereafter adopted to the extent permitted by law.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing, KBS TECHNOLOGIES, INC. has caused these presents to be duly executed
in its name and behalf by its proper officers duly authorized, and its corporate
seal to be affixed hereto this 11th day of February, 2000.
KBS TECHNOLOGIES, INC.
By /s/ Kipp Slicker
Kipp Slicker, President
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