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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
UNDER SECTION 12(G) OF
THE SECURITIES EXCHANGE ACT OF 1934
CREATIVE VISTAS, INC.
(Name of Small Business Issuer in its charter)
ARIZONA 86-0464104
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4909 EAST MCDOWELL ROAD, SUITE 100
PHOENIX, ARIZONA 85008
(Address of principal executive offices) (Zip Code)
(602) 225-0504
(Issuer's telephone number)
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, NO PAR VALUE
(Title of Class)
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TABLE OF CONTENTS
Page
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PART I
Item 1. Description of Business.............................................. 1
Item 2. Plan of Operation.................................................... 3
Risk Factors......................................................... 7
Item 3. Description of Property.............................................. 11
Item 4. Security Ownership of Certain Beneficial Owners and Management....... 11
Item 5. Directors, Executive Officers, Promoters and Control Persons......... 12
Item 6. Executive Compensation............................................... 13
Item 7. Certain Relationships and Related Transactions....................... 14
Item 8. Description of Securities............................................ 14
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and other Shareholder Matters .............................. 15
Item 2. Legal Proceedings.................................................... 16
Item 3. Changes in and Disagreements with Accountants........................ 16
Item 4. Recent Sales of Unregistered Securities.............................. 16
Item 5. Indemnification of Directors and Officers............................ 16
PART F/S
Financial Statements......................................................... 18
PART III
Item 1. Index to Exhibits.................................................... 19
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Creative Vistas, Inc. (the "Company"), was incorporated on July 18, 1983,
under the laws of the State of Arizona to engage in any lawful corporate
purpose. The Company was originally incorporated under the name Vista Financial
Services, Inc. and was a wholly-owned subsidiary of Century Pacific Corporation
("Century Pacific"). In 1993, the Company filed a petition for reorganization
under Chapter 11 of the United States Bankruptcy Code (Case No.
B93-05704-PHX-GBN). Century Pacific also filed a petition for reorganization
under the Chapter 11 of the United States Bankruptcy Code (Case No.
B96-00935-PHX-GBN). The Company's modified plan of reorganization was confirmed
by the Bankruptcy Court on November 27, 1996, and, in connection therewith, the
Company's Common Stock previously owned by Century Pacific was exchanged for two
and one-half percent (2.5%) of the post-reorganization Common Stock of the
Company. An additional two and one-half percent (2.5%) of the
post-reorganization Common Stock of the Company was distributed under the
Century Pacific plan of reorganization, and the remaining ninety-five percent
(95%) was issued in satisfaction of rent obligations owing by the Company.
Thereafter, on March 12, 1997, the Company changed its name to Creative Vistas,
Inc. Prior to the bankruptcy filing, the Company was engaged in the secondary
market mortgage loan brokerage business. The Company has conducted no ongoing
business activities since 1996 and is currently in the developmental and
promotional stages.
The Company's business plan at this time is to locate and consummate a
merger or acquisition (the "business combination"), with a private entity (the
"business opportunity"). The proposed business activities classify the Company
as a "blank check" or "shell" company. Many states have enacted statutes, rules
and regulations limiting the sale of securities of "blank check" companies in
their respective jurisdictions.
Management does not intend to undertake any efforts to cause a market to
develop in the Company's securities or undertake any offering of the Company's
securities, either debt or equity, until such time as the Company has
successfully implemented its business plan and/or merged or combined with
another company.
The Company is filing this registration statement on a voluntary basis to
make information concerning itself more readily available to the public. The
primary attraction of the Company as a merger partner or acquisition vehicle
will be its status as a public company. Any business combination will likely
result in a significant issuance of shares and substantial dilution to present
stockholders of the Company. As a result of filing this registration statement,
the Company is obligated to file with the Securities Exchange Commission (the
"SEC"), certain interim and periodic reports including an annual report
containing audited financial statements. The Company intends to continue to
voluntarily file these periodic reports with the SEC. Any business opportunity
will become subject to the same reporting requirements as the Company upon
consummation of a business combination with the Company.
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INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Securities Act
of 1933, as amended, (the "Act"), and the Securities Exchange Act of 1934, as
amended, (the "Exchange Act"), management believes the Company will not be
subject to regulation under the Investment Company Act of 1940, as amended (the
"Investment Act"), insofar as the Company will not be engaged in the business of
investing or trading in securities. In the event the Company engages in a
business combination which results in the Company holding passive investment
interests in a number of entities, the Company may be subject to regulation
under the Investment Act. In such event, the Company would be required to
register as an investment company and may incur significant registration and
compliance costs. The Company has obtained no formal determination from the SEC
as to the status of the Company under the Investment Act and a violation of such
act may subject the Company to material adverse consequences.
INVESTMENT ADVISERS ACT OF 1940
Under Section 202(a)(11) of the Investment Act, an "investment adviser"
means any person who, for compensation, engages in the business of advising
others, either directly or through publications or writings, as to the value of
securities or as to the advisability of investing in, purchasing, or selling
securities, or who, for compensation and as part of a regular business, issues
or promulgates analyses or reports concerning securities. The Company will only
seek to locate a suitable business opportunity and does not intend to engage in
the business of advising others in investment matters for a fee or otherwise.
MARKET MAKERS
The Company has not, and does not intend to enter into discussions with
market makers regarding developing a trading market in its stock until a
qualified business opportunity is identified.
COMPETITION
There are numerous other public companies that are also seeking operating
companies and other business opportunities. The Company will be in direct
competition with these public companies in its search for business
opportunities.
FORWARD LOOKING STATEMENTS
The Company desires to take advantage of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995 and thus cautions readers
regarding forward looking statements found in the following discussion and
elsewhere in this registration statement and in any other statement made by, or
on behalf of the Company, whether or not in future filings with the SEC. Forward
looking statements are statements not based on historical information and which
relate to future operations, strategies, financial results or other
developments. Forward looking statements are necessarily based upon estimates
and assumptions that are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond the
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Company's control and many of which, with respect to future business decisions,
are subject to change. These uncertainties and contingencies may affect actual
results and may cause actual results to differ materially from those expressed
in any forward looking statements made by or on behalf of the Company. The
Company disclaims any obligation to update forward looking statements.
EMPLOYEES
As of the date hereof, the Company does not have any employees and has no
plans for retaining employees until such time as the Company's business warrants
the expenses or until the Company successfully consummates a business
combination with an operating company.
ITEM 2. PLAN OF OPERATION
The Company is in a development stage and has very limited assets, capital,
operating expenses, and income. The costs and expenses associated with the
preparing and filing of this registration statement have been paid and all other
necessary capital, prior to locating a business opportunity, shall be provided
by present management with their personal funds as loans to the Company. The
Company anticipates that these loans will be repaid by the Company upon the
consummation of a business combination.
The Company will seek to acquire assets or shares of an entity actively
engaged in a business that generates revenues in exchange for the Company's
securities. The Company has not identified a particular business opportunity and
has not entered into any negotiations regarding any business combination. As of
the date of this registration statement, none of the Company's officers,
directors or affiliates has engaged in any preliminary contact or discussions
with a representative of any other company regarding the possibility of a
business combination between the Company and such other company.
The Company could incur significant legal and accounting costs in
connection with the consummation of a business combination.
Depending upon the nature of the business opportunity and the applicable
state statutes governing the manner in which the transaction is structured, the
Company's Board of Directors may not provide the Company's shareholders with
disclosure documentation concerning a business opportunity and/or the structure
of the proposed business combination prior to consummation of such combination.
While any such disclosure may include financial statements of the company
or companies involved, audited financial statements may not be available. The
Company's Board of Directors intends to obtain certain assurances of the value
of the business opportunity's assets prior to consummating the business
combination, with further assurances that an audited statement will be provided
within sixty days after closing.
As the Company intends to remain a shell corporation until a business
opportunity is identified, the Company's cash requirements will be minimal. The
Company does not anticipate that it will need to raise capital in the next
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twelve months. The Company also does not expect to acquire any plant or
significant equipment, or to perform any product research and development.
The Company has no full time employees. The Company does not expect any
significant changes in the number of employees. The President and Secretary of
the Company have agreed to allocate a portion of their time to the activities of
the Company without compensation. These officers anticipate devoting whatever
time may be reasonably required to the business affairs of the Company.
GENERAL BUSINESS PLAN
The following discussion of the Company's proposed business is purposefully
general and is not meant to be restrictive of the Company's discretion to search
for business opportunities and to enter into a business combination.
The Company's purpose is to seek, investigate, and, if such investigation
warrants, acquire an interest in a business opportunity presented to the Company
by persons or firms who or which desire to seek the perceived advantages of a
company registered with the SEC. The Company will not restrict its search to any
specific business, industry, or geographical location. Management anticipates
that it may be able to participate in only one potential business opportunity
because the Company has nominal assets and limited financial resources. This
lack of diversification is a substantial risk to Company shareholders as it will
not permit the Company to offset potential losses from one venture against gains
from another.
The Company may seek a business combination with an entity that is in its
preliminary or development stage, has recently commenced operations, or that
wishes to use the public marketplace in order to raise additional capital to
expand or develop new products, services or markets, or for other corporate
purposes. It is not possible to predict at this time the status of the business
opportunity with which the Company may become engaged. Such business opportunity
may require additional capital, desire to have its shares publicly traded, or
seek other perceived advantages which the Company may offer. The Company may
acquire assets and establish wholly owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.
The Company does not intend to seek capital to finance the operation of any
acquired business opportunity until such time as the Company has successfully
consummated the business combination. Furthermore, the Company has, and will
continue to have, no capital to provide to the business opportunity. Management
believes the Company will be able to offer owners of the business opportunity
the opportunity to acquire a controlling ownership interest in a publicly
registered company without incurring the cost and time required to conduct an
initial public offering.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances in some industries, and
shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, and providing liquidity
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(subject to restrictions of applicable statutes) for all shareholders. Available
business opportunities may occur in different industries and at various stages
of development, all of which will make the task of comparative investigation and
analysis of such business opportunities difficult and complex.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of the Company. Management
intends to concentrate on identifying prospective business opportunities which
may be brought to its attention through present associations of the Company's
officers, directors, or shareholders. In analyzing prospective business
opportunities, management will review the operations of the business opportunity
and focus on such matters as: available technical, financial and managerial
resources; working capital and other financial requirements; history of
operations; prospects for the future; nature of present and expected
competition; quality, experience, and the depth of management services which may
be available; potential for further research, development, or exploration; risk
factors not now foreseeable but which at a later point may be anticipated to
impact the proposed activities of the Company; potential for growth, expansion
or profit; perceived public recognition or acceptance of products, services, or
trades; name identification; and other relevant factors. To the extent possible,
the Company intends to utilize written reports and personal investigations to
evaluate the above factors.
Management of the Company shall rely upon their own efforts and, to a much
lesser extent, the efforts of the Company's shareholders, in accomplishing the
business purposes of the Company. It is not anticipated that any outside
consultant or advisor, except for the Company's legal counsel and accountants,
will be necessary to effectuate the Company's business purposes. If the Company
does retain an outside consultant or advisor, it is likely that any cash fee
earned by such party would be paid by the prospective business opportunity. The
Company has no contracts or agreements with any outside consultant or advisor.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business combination, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. Upon the consummation of a
business combination, the present management and shareholders of the Company may
lose control of the Company. The Company's directors may, as part of the terms
of the business combination, sell their stock in the Company, or resign and be
replaced by new directors without a vote of the Company's shareholders. Any and
all such sales will only be made in compliance with the securities laws of the
United States and any applicable state.
It is anticipated that the securities issued in any such reorganization
would be issued in reliance upon an exemption from registration under applicable
federal and state securities laws. However, the Company may agree, as a
negotiated element of its transaction, to register all or a part of such
securities immediately or at specified times after the transaction is
consummated. If such registration occurs, it will be undertaken by the surviving
entity after the Company has successfully consummated a business combination and
the Company is no longer considered a "shell" company. Until such business
combination, the Company will not register any additional securities. The
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issuance of additional securities after the business combination and their
potential sale into any trading market which may develop in the Company's
securities, may result in a devaluation of the Company's securities.
While the actual terms of the business combination may not be predicted at
this time, it may be expected that the parties to the business combination will
find it desirable to avoid the creation of a taxable event and thereby structure
the acquisition in a so-called "tax-free" reorganization under Sections
368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to obtain
tax-free treatment under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would retain 20% or less
of the issued and outstanding shares of the surviving entity. The consummation
of a business combination pursuant to such "tax-free" reorganization would
result in significant dilution in the equity of such shareholders.
As part of the Company's "due diligence" investigation of a business
opportunity, officers and directors of the Company may meet with management and
key personnel of the business opportunity, visit and inspect material
facilities, obtain independent analysis of verification of information provided,
check references of management and key personnel, and take other reasonable
investigative measures to the extent of the Company's limited financial
resources and management expertise. The manner in which the Company participates
in a business opportunity depends on the nature of the opportunity, the
respective needs and desires of the Company, the management of the opportunity
and the relative negotiating strength of the Company and such other management.
With respect to any potential business combination, negotiations will take
place concerning the percentage of the Company which the other party's
shareholders or owners would acquire in exchange for their Company's
contribution to the transaction. Depending upon the business opportunity's
assets and liabilities, the Company's shareholders may hold a substantially
smaller percentage ownership interest in the Company following a business
combination. Any business combination could severely dilute the percentage
interest of shares held by the Company's shareholders.
The Company may participate in a business combination only after the
execution of written agreements. Although the terms of such agreements cannot be
predicted, generally such agreements will require some specific representations
and warranties by the parties, specify certain events of default, detail the
terms of closing and the conditions that must be satisfied by each of the
parties prior to and after such closing, outline the manner of bearing costs,
including costs associated with the Company's attorneys and accountants, set
forth remedies on default, and include other miscellaneous terms.
As stated previously, the Company will not consummate a business
combination with an entity that cannot provide independent audited financial
statements within a reasonable period of time after closing of the proposed
transaction. Upon the filing of this registration statement, the Company will
become subject to the reporting requirements of the Exchange Act. Included in
these requirements is the affirmative duty of the Company to file independent
audited financial statements as part of its annual report on Form 10-K (or
10-KSB, as applicable) and as part of its Form 8-K to be filed with the SEC upon
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realization of a business combination. If such audited financial statements are
not available at closing, or within the time parameters necessary to ensure the
Company's compliance with the requirements of the Exchange Act, or if the
audited financial statements provided do not conform to the business
opportunity's representations set forth in the closing documents, the proposed
business combination will be voidable at the discretion of the management of the
Company pursuant to provisions in the Closing Documents setting forth such
right. The closing documents will also provide that, if the proposed business
combination is voided, the business opportunity will reimburse the Company for
all costs associated with the proposed transaction.
RISK FACTORS
The Company's business is subject to numerous risk factors, including the
following:
THE COMPANY HAS NO OPERATING HISTORY, REVENUES, OR EARNINGS FROM OPERATIONS
SINCE DECEMBER 1996. The Company faces many of the risks of a new business and
many of the special risks inherent in the investigation, or interest in a new
business opportunity. Moreover, the Company has no significant assets or
financial resources. The Company will, in all likelihood, sustain operating
expenses without corresponding revenues until the consummation of a business
combination. This may result in the Company incurring a net operating loss that
will increase until the Company is able to consummate a business combination
with a profitable business opportunity. There is no assurance that the Company
will be able to identify such a business opportunity and consummate such a
business combination.
THE COMPANY'S PLAN OF OPERATION IS SPECULATIVE AND THE COMPANY MIGHT NEVER
SUCCESSFULLY CONSUMMATE A BUSINESS COMBINATION. The Company may not be
successful in (i) identifying a suitable business opportunity, (ii) consummating
a business combination, or (iii) negotiating a business combination on terms
favorable to the Company. Management has not identified any particular industry
or specific business within an industry for evaluation by the Company.
The Company has not established a specific length of operating history or a
specified level of earnings, assets, net worth, or other criteria which it will
require a business opportunity to have achieved. Accordingly, the Company may
enter into a business combination with a business opportunity having
characteristics that are indicative of development stage companies such as no
significant operating history, losses, limited or no potential for earnings,
limited assets, or negative net worth.
The success of the Company's proposed plan of operation depends on the
operations, financial condition and management of the business opportunity.
While management intends to seek a business opportunity with an established
operating history, the Company may not be successful in locating such a
candidate. In the event the Company consummates a business combination, the
success of the Company's operations may be dependent upon management of the
successor firm or venture partner firm and numerous other factors beyond the
Company's control. As the Company has not identified and has no commitments to
enter into a business combination, the Company is only able to make general
disclosures concerning the risks and hazards of acquiring a business
opportunity.
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A BUSINESS COMBINATION COULD RESULT IN A CHANGE IN CONTROL AND MANAGEMENT
OF THE COMPANY. A business combination involving the issuance of the Company's
Common Stock will likely result in shareholders of the business opportunity
obtaining a controlling interest in the Company. Any such business combination
may require management of the Company to sell or transfer all, or a portion of,
the Company's Common Stock held by them, or resign as members of the Board of
Directors of the Company. The resulting change in control of the Company may
result in the removal of one or more of its present officers or directors and a
corresponding reduction in, or elimination of, their participation in the future
affairs of the Company. Such change in control is likely to occur without the
vote or consent of the shareholders of the Company.
A BUSINESS COMBINATION COULD SEVERELY DILUTE THE PERCENTAGE OF SHARE
OWNERSHIP HELD BY SHAREHOLDERS OF THE COMPANY. The Company's primary plan of
operation is based upon a business combination which would likely result in the
Company issuing securities to shareholders of a business opportunity. The
issuance of previously authorized and unissued Common Stock of the Company would
result in the reduction in the percentage of shares owned by present and
prospective shareholders of the Company and may result in a change in control or
management of the Company.
CURRENTLY THERE IS NO TRADING MARKET AND THERE MIGHT NEVER EXIST A TRADING
MARKET FOR THE COMPANY'S SECURITIES. A trading market may not develop and
shareholders may not be able to liquidate their investment without considerable
delay. If a market should develop, the price of the Company's stock may be
highly volatile.
IF AND WHEN THE COMPANY'S SECURITIES BECOME AVAILABLE FOR TRADING, THEY
WILL LIKELY BE SUBJECT TO THE "PENNY" STOCK REGULATION OF RULE 15G-9 OF THE
EXCHANGE ACT. The Rule 15g9 of the Exchange Act is commonly referred to as the
"penny stock" rule and imposes special sales practice requirements upon
broker-dealers who sell such securities to persons other than established
customers or accredited investors. A penny stock is any equity security with a
market price less than $5.00 per share, subject to certain exceptions. Rule
3a51-1 of the Exchange Act provides that any equity security is considered a
penny stock unless that security is: registered and traded on a national
securities exchange and meets specified criteria set forth by the SEC;
authorized for quotation on the Nasdaq Stock Market; issued by a registered
investment Company; issued with a price of five dollars or more; or issued by an
issuer with net tangible assets in excess of $2,000,000. This rule may affect
the ability of broker-dealers to sell the Company's securities.
For transactions covered by Rule 15g-9, a broker-dealer must furnish to all
investors in penny stocks a risk disclosure document, make a special suitability
determination of the purchaser, and receive the purchaser's written agreement to
the transaction prior to the sale. In order to approve a person's account for
transactions in penny stocks, the broker-dealer must (i) obtain information
concerning the person's financial situation, investment experience, and
investment objectives; (ii) reasonably determine, based on that information that
transactions in penny stocks are suitable for the person and that the person has
sufficient knowledge and experience in financial matters to reasonably be
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expected to evaluate the transactions in penny stocks; and (iii) deliver to the
person a written statement setting forth the basis on which the broker-dealer
made the determination of suitability stating that it is unlawful to effect a
transaction in a designated security subject to the provisions of Rule
15g-9(a)(2) unless the broker-dealer has received a written agreement from the
person prior to the transaction. Such written statement from the broker-dealer
must also set forth, in highlighted format immediately preceding the customer
signature line, that the broker-dealer is required to provide the person with
the written statement and the person should sign and return the written
statement to the broker-dealer only if it accurately reflects the person's
financial situation, investment experience and investment objectives.
MANAGEMENT WILL DEVOTE A LIMITED AMOUNT OF TIME TO PURSUE COMPANY
OPERATIONS. While seeking a business combination, management anticipates
collectively devoting whatever time may be reasonably required to the business
of the Company.
THE LOSS OF MEMBERS OF MANAGEMENT COULD MAKE IT DIFFICULT FOR THE COMPANY
TO CARRY OUT ITS PLAN OF OPERATION. None of the Company's officers or directors
has entered into a written employment agreement and none is expected to do so in
the foreseeable future. Loss of the services of any of these individuals would
adversely affect development of the Company's business and its likelihood of
continuing operations.
THERE ARE SEVERAL CONFLICTS OF INTEREST WHICH MAY ARISE IN CONNECTION WITH
A BUSINESS COMBINATION. The Company's officers or directors may participate in
other businesses which may have a purpose similar to that of the Company, or be
deemed to compete directly with the Company. Additional conflicts of interest
and non-arms length transactions may also arise in the event the Company's
officers or directors are involved in the management of any firm with which the
Company transacts business. Conflicts of interest may be resolved only through
disclosure to the Company and exercise of judgment in a manner that is
consistent with the officers' and directors' fiduciary duties to the Company.
It is anticipated that the Company's principal shareholders may actively
negotiate or otherwise consent to the purchase of a portion of their Common
Stock as a condition to, or in connection with, a proposed business combination.
In this process, the Company's principal shareholders may consider their own
personal pecuniary benefit rather than the best interest of the other Company
shareholders, and the other Company shareholders are not expected to be afforded
the opportunity to approve of or consent to any particular buy-out transaction.
In addition, upon the consummation of a business combination with an
unaffiliated entity, that entity may desire to employ or retain one or a number
of members of the Company's management or Board of Directors for the purpose of
providing services to the surviving entity. Because of the potential conflict of
interest, and as a practical matter, if each member of the Company's Board of
Directors is offered compensation in any form from any prospective business
combination candidate, the proposed transaction might not be approved by the
Company's Board of Directors unless a determination can be made that the
transaction is inherently fair to the Company's shareholders.
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FINANCIAL STATEMENT REQUIREMENTS COULD DELAY OR PRECLUDE A BUSINESS
COMBINATION. Sections 13 and 15(d) of the Exchange Act require reporting
companies to provide certain information about significant acquisitions,
including certified financial statements for the company acquired, covering one,
two, or three years, depending on the relative size of the acquisition. The time
and additional costs that may be incurred by some target entities to prepare
such statements may significantly delay or essentially preclude consummation of
an otherwise desirable business combination. Business opportunities that do not
have or are unable to obtain the required audited financial statements may be
inappropriate for a business combination so long as the reporting requirements
of the Exchange Act are applicable.
THE COMPANY HAS NEITHER CONDUCTED, NOR HAVE OTHERS MADE AVAILABLE TO IT,
MARKET RESEARCH INDICATING THAT MARKET DEMAND EXISTS FOR THE TRANSACTIONS
CONTEMPLATED BY THE COMPANY. Management decisions will likely be made without
detailed feasibility studies, independent analysis, market surveys, and the
like. Moreover, the Company does not have, and does not plan to establish, a
marketing organization.
THE COMPANY BELIEVES IT IS AT A DISADVANTAGE WITH ITS COMPETITORS IN ITS
SEARCH FOR A BUSINESS OPPORTUNITY. A large number of established and
well-financed entities are active in seeking business combinations with
companies that may be desirable business opportunities for the Company. The
Company expects to be at a disadvantage when competing with firms with
significantly greater financial resources, technical expertise and managerial
capabilities than the Company and, consequently, the Company will be at a
competitive disadvantage in identifying possible business opportunities and
successfully consummating a business combination. Moreover, the Company will
compete with numerous small public companies in seeking business combination
candidates. These competitive conditions will exist in any industry in which the
Company may become interested.
A BUSINESS COMBINATION COULD RESULT IN A LACK OF DIVERSIFICATION AND
INCREASED RISKS. The Company's proposed operations, even if successful, will in
all likelihood result in the Company engaging in a business combination with a
single business opportunity. Consequently, the Company's activities may be
limited to those engaged in by the business opportunity. The Company's inability
to diversify its activities into a number of areas may subject the Company to
economic fluctuations within a particular business or industry and therefore
increase the risks associated with the Company's operations.
COMPLIANCE WITH THE INVESTMENT COMPANY ACT OF 1940 OR OTHER GOVERNMENT
REGULATION COULD DELAY OR PRECLUDE A BUSINESS COMBINATION. Although the Company
will be subject to the reporting requirements under the Exchange Act, management
believes the Company will not be subject to regulation under the Investment Act,
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a number of
entities, the Company may be subject to regulation under the Investment Act.
Under such act, the Company would be required to register as an investment
company and would thereby incur significant registration and compliance costs.
The Company has obtained no formal determination from the SEC as to the status
of the Company under the Investment Act and violation of such Act may subject
the Company to material adverse consequences. See "Description of Business -
Investment Company Act of 1940."
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Additionally, the Company may engage in a business combination with a
company that is subject to regulation or licensing by federal, state or local
authorities. Compliance with such regulations and licensing may be a
time-consuming, expensive process and may limit other investment opportunities
of the Company.
A BUSINESS COMBINATION COULD RESULT IN ADVERSE FEDERAL AND STATE TAX
CONSEQUENCES. The Company intends to structure any business combination so as to
result in tax-free treatment or to minimize the federal and state tax
consequences to both the Company and the business opportunity. See "Plan of
Operation-Acquisition of Opportunities." However, such business combination may
not meet the statutory requirements of a tax-free reorganization and the parties
may not obtain the intended tax-free treatment upon a transfer of stock or
assets. A non-qualifying reorganization may result in the imposition of both
federal and state taxes which may have an adverse effect on both parties to the
transaction.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to acquire
any properties. The Company also has no present plans to acquire any assets or
make any investments prior to completing a business combination.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
MANAGEMENT
The table below lists the beneficial ownership of the Company's voting
securities by each person known by the Company to be the beneficial owner of
more than 5% of such securities, as well as the securities of the Company
beneficially owned by all officers and directors of the Company. Unless
otherwise indicated, the shareholders listed possess sole voting and investment
power with respect to the shares shown.
Title of Name and Address Amount and Nature of Percent of
Class of Beneficial Owner Beneficial Owner Class
----- ------------------- ---------------- -----
Common Ronald E. Warnicke 474,778 (1) 47.5%
Common Rudy R. Miller 419,760 (2) 42.0%
Common Tudor Investments Ltd.
Profit Sharing Plan 474,778 47.5%
Common Miller Capital Corporation 419,760 42.0%
Common Mary A. Nance 25,000 2.5%
Common Officers and Directors
as a Group 919,538 92.0%
- ----------
(1) Represents shares held by Tudor Investments Ltd. Profit Sharing Plan, all
of which are beneficially owned by Mr. Warnicke.
(2) Represents shares held by Miller Capital Corporation, all of which are
beneficially owned by Mr. Miller.
11
<PAGE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The directors and officers of the Company are as follows:
Name Age Position
- ---- --- --------
Rudy R. Miller 53 President and Director
Ronald E. Warnicke 60 Vice President, Secretary and
Director
Mary A. Nance 57 Treasurer
The above listed officers and directors will serve until the next annual
meeting of the shareholders or until their death, resignation, retirement,
removal, disqualification, or until their successors have been duly elected and
qualified. Vacancies in the existing Board of Directors will be filled by
majority vote of the remaining directors. Officers of the Company serve at the
will of the Board of Directors.
BIOGRAPHICAL INFORMATION
RUDY R. MILLER is President and a Director of Creative Vistas, Inc. and
also serves as Chairman, President and Chief Executive Officer of Miller Capital
Corporation, a part of The Miller Group, which is involved in private corporate
finance, mergers and acquisitions, and management and investor relations
consulting. He currently serves on the Board of Directors of Directrix, Inc., a
public company headquartered in New York City, that provides television
production and delivery, as well as Internet hosting services, and on the Board
of Directors of Global Entertainment Corporation, a public holding company for
sports and entertainment venues. He is also Vice Chairman of Finance for THE
RITZ-CARLTON(R) MAGAZINE published by SCG, Inc. He is a member of the Institute
of Management Consultants headquartered in New York City. Mr. Miller has
extensive public company board experience having served as a board member and
committee chairman for a dozen public companies, including such national
corporations as America West Airlines, Inc. and Jacor Communications, Inc. He
served as a National Association of Securities Dealers ("NASD") arbitrator for
over twenty years. Mr. Miller received his Bachelors and Masters of Business
Administration degrees from Pacific Western University.
RONALD E. WARNICKE is Vice President, Secretary and a Director of Creative
Vistas, Inc., and since 1989 has been a founding partner in the law firm of
Warnicke & Littler. He also serves as Vice-Chairman of Miller Capital
12
<PAGE>
Corporation and Chairman of Fitness West, Inc. He has served as attorney for
debtors, official creditors committees, and major creditors in a variety of
successful public company reorganizations, including Texscan and Circle K. In
1989, Mr. Warnicke was appointed by Judge Bilby of the United States Federal
Court as the Examiner in the American Continental bankruptcy proceedings
involving Charles Keating. He founded the parent company of Yugo America, where
he negotiated multiple agreements for the sale of the Pininfarina, Bertone, and
Yugo automobiles in the United States. In 1978, he was called upon by Arizona
Governor Bruce Babbitt (currently United States Secretary of the Interior), to
lead Governor Babbitt's staff through an ultimately successful re-election
campaign. Mr. Warnicke has served as President of the Young Lawyers Section of
the Arizona State Bar Association and as one of the four Directors of the
American Bar Association's largest Section. Mr. Warnicke was listed in the 1986
edition of Best Lawyers in America and has long held Martindale Hubbell's
highest attorney rating. He is a member of the Arizona State Bar. Mr. Warnicke
received his Juris Doctor from Harvard Law School.
MARY A. NANCE is Treasurer of Creative Vistas, Inc., and Executive Vice
President and Chief Administrative Officer of Miller Capital Corporation and The
Miller Group, entities that provide diversified financial consulting services
nationwide. She has been associated with The Miller Group since 1977 and has
served as an officer beginning in 1981. She previously served as Executive Vice
President of Administration and Corporate Communications for StatesWest
Airlines, a publicly held, regional airline which operated as a USAir Express
carrier and was Vice President of Administration of Miller Technology &
Communications Corporation. Mrs. Nance currently serves on the Board of
Directors of the Scottsdale Camelback Resort as a Vice President and Treasurer
of the Association and serves on the Board of Grounding Point Dance Company, a
non-profit professional dance company. She attended Arizona State University.
ITEM 6. EXECUTIVE COMPENSATION
The Company's officers and directors do not receive compensation for their
respective services rendered to the Company, nor has any officer or director
received such compensation in the past. The Company's officers and directors
have agreed to act without compensation until authorized by the Board of
Directors. Such authorization is not expected to occur until the Company has
generated revenues from operations after consummation of a business combination.
As of the date of this registration statement, the Company has no funds
available to pay its officers and directors. Further, none of the officers and
directors is accruing any compensation pursuant to any agreement with the
Company. The Company has not adopted any retirement, pension, profit sharing,
stock option or insurance programs or other similar programs for the benefit of
its employees.
Persons associated with management may refer a business opportunity to the
Company. In the event the Company consummates a transaction with an entity
referred by associates of management, such associates may be compensated for
their referral in the form of a finder's fee. It is anticipated that this fee
will be either in the form of restricted Common Stock issued by the Company as
part of the terms of the proposed transaction, or in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will likely be tendered by the business opportunity, because the Company
has insufficient cash available. The amount of such finder's fee cannot be
determined as of the date of this registration statement, but is expected to be
comparable to consideration normally paid in like transactions.
13
<PAGE>
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 404 of Regulation S-B.
ITEM 8. DESCRIPTION OF SECURITIES
The Company's authorized capital stock consists of 1,000,000 shares of
Common Stock, no par value per share. There are 1,000,000 shares of Common Stock
issued and outstanding as of the date of this filing.
COMMON STOCK
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of Common Stock have no preemption,
subscription, conversion or redemption rights and may be issued only as fully
paid and nonassessable shares. Cumulative voting in the election of directors is
not permitted. The holders of a majority of the issued and outstanding shares of
Common Stock represented at any meeting at which a quorum is present will be
able to elect the entire Board of Directors if they so choose and, in such
event, the holders of the remaining shares of Common Stock will not be able to
elect any directors. In the event of liquidation of the Company, each
shareholder is entitled to receive a proportionate share of the Company's assets
available for distribution to shareholders after the payment of liabilities and
after distribution in full of preferential amounts, if any. All shares of the
Company's Common Stock issued and outstanding are fully paid and nonassessable.
Holders of the Common Stock are entitled to share pro rata in dividends and
distributions with respect to the Common Stock, as may be declared by the Board
of Directors out of funds available.
14
<PAGE>
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
There is no trading market for the Company's Common Stock at present and
there has been no trading market to date. Management has not undertaken any
discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the aftermarket for the
Company's securities. Management does not intend to initiate any such
discussions until such time as the Company has consummated a business
combination. There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
MARKET INFORMATION
The Company's Common Stock is not quoted at the present time. If and when
the Company's stock is traded in the over-the-counter market, the shares will
likely be subject to Section 15(g) and Rule 15g-9, commonly referred to as the
penny stock rule, of the Exchange Act. See "Risk Factors - "Penny" Stock
Regulation."
Management intends to consider undertaking a business combination which
will allow the Company's securities to be traded without the penny stock
limitations. However, upon a successful business combination, the Company's
securities may not qualify for listing on Nasdaq or any other national exchange.
Even if the Company's securities do qualify for listing, the Company may not be
able to maintain the criteria necessary to ensure continued listing. The failure
of the Company to qualify its securities or to meet the relevant maintenance
criteria after such qualification may result in the discontinuance of the
inclusion of the Company's securities on a national exchange. In such event,
trading, if any, in the Company's securities may then continue in the
non-Nasdaq, over-the-counter market so long as the Company continues to file
periodic reports with the SEC and there remain sufficient qualified market
makers in the Company's securities. As a result, a shareholder may find it more
difficult to dispose of, or to obtain accurate quotations as to the market value
of, the Company's securities.
There are approximately 635 holders of the Company's Common Stock. All of
the issued and outstanding shares of the Company's Common Stock were issued
pursuant to order of the United States Bankruptcy Court in connection with the
bankruptcy proceedings described herein under "Description of Business."
Pursuant to Section 1145 of the United States Bankruptcy Code, recipients of
securities offered pursuant to a bankruptcy plan are generally not subject to
restrictions on resale of such securities. Since the current holders acquired
the Company's Common Stock pursuant to the Company's and Century Pacific's
respective confirmed plans of reorganization under Chapter 11 of the United
States Bankruptcy Code, such Common Stock may generally be resold without
restriction under the Securities Act in accordance with Section 1145.
In addition, shares of the Company's Common Stock may be eligible for
resale under Rule 144 of the Act subject to certain limitations set forth in
15
<PAGE>
such rule. In general, Rule 144 allows a person (or persons whose shares are
aggregated) who has beneficially owned restricted shares of the Company for at
least one year to sell, within any three-month period, an amount of shares that
does not exceed the greater of (i) one percent of the then outstanding shares or
(ii) the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also generally permits a person who has satisfied a two-year
holding period and who is not, and has not been an affiliate of the Company for
the preceding three months, to sell such shares without regard to the resale
limitations of Rule 144.
DIVIDENDS
The Company has not paid any dividends to date, and has no plans to do so
in the immediate future.
ITEM 2. LEGAL PROCEEDINGS
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company has not changed accountants since its formation and there are
no disagreements with the findings of the Company's accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
The Company's modified plan of reorganization was confirmed by the
Bankruptcy Court on November 27, 1996, and, in connection therewith, the
Company's Common Stock previously owned by Century Pacific was exchanged for two
and one-half percent (2.5%) of the post-reorganization Common Stock of the
Company. An additional two and one-half percent (2.5%) of the
post-reorganization Common Stock of the Company was distributed under the
Century Pacific plan of reorganization, and the remaining ninety-five percent
(95%) was issued to nominees or transferees 4909 East McDowell Joint Venture in
satisfaction of rent obligations accruing subsequent to September 30, 1996.
Since that time, the Company has not issued any additional shares of Common
Stock.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article XIII of the Articles of Incorporation and Article IX of the Bylaws
of the Company, as amended, set forth certain indemnification rights. The
Company's Articles of Incorporation provide for the indemnification of directors
and officers to the full extent permitted by Arizona law.
Arizona law provides that a company may indemnify its directors under
prescribed circumstances, subject to certain limitations, against certain costs
and expenses, including attorneys' fees actually and reasonably incurred in
connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which such person is a party by reason of
being a director of the Company, provided that such director or officer acted in
accordance with the applicable standard of conduct set forth in such statutory
provisions.
16
<PAGE>
PART F/S
FINANCIAL STATEMENTS
The following financial statements are attached to this report and filed as
a part thereof.
Independent Auditor's Report ............................................... F-1
Balance Sheet .............................................................. F-2
Statements of Operations ................................................... F-3
Statements of Changes in Stockholders' Equity............................... F-4
Statement of Cash Flows..................................................... F-5
Notes to Financial Statements .............................................. F-6
17
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
Page Number or Method
No. of Filing
3.1 Articles of Incorporation *
3.2 Bylaws *
27.1 Financial Data Schedule *
- ----------
* Filed herewith.
18
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: May 10, 2000 CREATIVE VISTAS, INC.
---------------------
By: /s/ Rudy R. Miller
------------------------------------
Name: Rudy R. Miller
----------------------------------
Its: President
----------------------------------
19
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To The Stockholders and Board of Directors of
Creative Vistas, Inc.
We have audited the accompanying balance sheets of Creative Vistas, Inc. as of
September 30, 1999 and 1998, and the related statements of operations, changes
in stockholders' equity, and cash flows for the years then ended. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 our audits provide 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 Creative Vistas, Inc. as of
September 30, 1999 and 1998, and the results of its operations, changes in
stockholders' equity, and its cash flows for the years then ended, in conformity
with generally accepted accounting principles.
SEMPLE & COOPER, LLP
Phoenix, Arizona
October 13, 1999
F-1
<PAGE>
CREATIVE VISTAS, INC.
BALANCE SHEETS
September 30, 1999 and 1998
ASSETS
1999 1998
------- -------
Current Assets:
Cash and cash equivalents (Note 1) $ 88 $ 403
------- -------
Total Assets $ 88 $ 403
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $ -- $ --
Stockholders' Equity:
Common stock - no par value;
1,000,000 shares authorized;
issued and outstanding 7,553 7,553
Accumulated deficit (7,465) (7,150)
------- -------
Total Stockholders' Equity 88 403
------- -------
Total Liabilities and Stockholders' Equity $ 88 $ 403
======= =======
F-2
<PAGE>
CREATIVE VISTAS, INC.
STATEMENTS OF OPERATIONS
For The Years Ended September 30, 1999 and 1998
1999 1998
----------- -----------
Sales $ -- $ --
General and Administrative Expenses 315 5,552
----------- -----------
Net Loss from Operations $ (315) $ (5,552)
=========== ===========
Basic loss per share: (Note 1) $ -- $ (.01)
=========== ===========
Weighted Average Common Shares Outstanding 1,000,000 1,000,000
=========== ===========
F-3
<PAGE>
CREATIVE VISTAS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For The Years Ended September 30, 1999 and 1998
Total
Stock-
Accumulated holders'
Shares Amount Deficit Equity
------ ------ ------- ------
Balance at September 30, 1997 1,000,000 $4,553 $(1,598) $ 2,955
Capital contributions 3,000 -- 3,000
Net loss for the year ended
September 30, 1998 -- -- (5,552) (5,552)
--------- ------ ------- -------
Balance at September 30, 1998 1,000,000 7,553 (7,150) 403
Net loss for the year ended
September 30, 1999 -- -- (315) (315)
--------- ------ ------- -------
Balance at September 30, 1999 1,000,000 $7,553 $(7,465) $ 88
========= ====== ======= =======
F-4
<PAGE>
CREATIVE VISTAS, INC.
STATEMENTS OF CASH FLOWS
For The Years Ended September 30, 1999 and 1998
1999 1998
----- -------
Increase (Decrease) in Cash and Cash Equivalents:
Cash flows from operating activities:
Cash received from customers $ -- $ --
Cash paid to suppliers and employees (315) (5,552)
----- -------
Net cash used by operating activities (315) (5,552)
----- -------
Cash flows from financing activities:
Capital contributions -- 3,000
----- -------
Net cash provided by financing activities -- 3,000
----- -------
Net decrease in cash and cash equivalents (315) (2,552)
Cash and cash equivalents at beginning of year 403 2,955
----- -------
Cash and cash equivalents at end of year $ 88 $ 403
===== =======
F-5
<PAGE>
CREATIVE VISTAS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies, Nature of Operations and Use of
Estimates:
Operations:
Creative Vistas, Inc., formerly known as Vista Financial Services, Inc., is
a Corporation which was duly formed and organized under the laws of the
State of Arizona on July 18, 1983. The principal business purpose of the
Company was to conduct secondary market mortgage loan brokerage operations
and consulting in the southwestern region of the United States. The Company
has been essentially dormant since approximately December 1996 after filing
for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code
(See Note 2).
Pervasiveness of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Cash and Cash Equivalents:
For financial accounting purposes, cash and cash equivalents are considered
to be all highly liquid investments purchased with an initial maturity of
three (3) months or less.
Deferred Income Taxes
Deferred income taxes are provided on an assets and liability method,
whereby deferred tax assets are recognized for deductible temporary
differences and operating loss carryforwards. Deferred tax liabilities are
recognized for taxable temporary differences. Deferred tax assets are
reduced by a valuation allowance when it is more likely than not that the
carryforwards will not be utilized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
Basic Loss Per Share:
Basic loss per share includes no dilution and is computed by dividing
income available to common stockholders by the weighted average number of
shares outstanding for the period. Diluted earnings per share reflects the
potential dilution of securities that could share in the earnings of the
Company. Diluted earnings per share are not presented as no dilutive
potential common stock existed as of September 30, 1999 and 1998.
F-6
<PAGE>
2. Reorganization Under Chapter 11:
The Bankruptcy Court confirmed an order approving the Company's Modified
Plan of Reorganization on July 22, 1996. An amended order approving the
Company's Modified Plan of Reorganization was confirmed by the Bankruptcy
Court on November 17, 1996. For financial reporting purposes, however, the
effective confirmation date used was July 22, 1996, as the amendment to the
order approving the Company's Modified Plan of Reorganization did not
materially modify the order.
The amended order approving the Modified Plan of Reorganization provided
for the following:
Assets and Post-Petition Liabilities - The Company transferred all
assets and post-petition liabilities to two (2) individuals in
exchange for $15,000.
Unsecured Creditors - All unsecured creditors received $15,000 in full
satisfaction of all claims, and as such, all pre-petition indebtedness
was fully satisfied and discharged.
Equity Security Holders - All the issued and outstanding common stock,
which was previously wholly-owned by Century Pacific Corporation, was
cancelled in exchange for two and one-half percent (2.5%) of new
common shares issued. Further, additional shares comprising two and
one-half percent (2.5%) of new common shares issued was distributed
under the Century Pacific Plan of Reorganization. The remaining new
shares, ninety-five percent (95%) of new common shares issued, were
issued to 4909 East McDowell Joint Venture in full satisfaction of
rent which accrued after September 30, 1996.
The Company has accounted for its reorganization using fresh-start
accounting. All assets and liabilities have been restated to reflect their
reorganization values, which approximates fair values at the reorganization
date. Total debt forgiven amounted to approximately $74,000. Total
accumulated deficit eliminated upon adoption of fresh-start accounting
amounted to approximately $429,000.
3. Related Party Transactions:
During the year ended September 30, 1998, stockholders of the Company made
capital contributions in the amount $3,000.
4. Income Taxes:
At September 30, 1999 and 1998, deferred tax assets consist of the
following:
F-7
<PAGE>
1999 1998
------- ------
Net operating loss carryforwards $ 1,800 $1,700
Less: valuation allowance (1,800) 1,700)
------- ------
$ -- $ --
======= ======
At September 30, 1999 and 1998, the Company established a valuation
allowance equal to the full amount of the deferred tax assets due to the
uncertainty of the utilization of operating losses in future periods.
At September 30, 1999, the Company had federal and state net operating loss
carryforwards in the approximate amount of $7,465 available to offset
future taxable income through 2019 and 2004, respectively.
5. Year 2000 Issue: (Unaudited)
Like other companies, Creative Vistas, Inc. could be adversely affected if
the computer systems we, our suppliers or customers use do not properly
process and calculate date-related information and data from the period
surrounding and including January 1, 2000. This is commonly known as the
"Year 2000" issue. Additionally, this issue could impact non-computer
systems and devices such as production equipment, elevators, etc. At this
time, because of the complexities involved in the issue, management cannot
provide assurances that the Year 2000 issue will not have an impact on the
Company's operations.
F-8
ARTICLES OF INCORPORATION
OF
VISTA FINANCIAL SERVICES, INC.
The undersigned, acting as incorporators of a corporation for profit under
the laws of the State of Arizona, hereby adopt the following Articles of
Incorporation:
ARTICLE I
VISTA FINANCIAL SERVICES, INC.
The name of the corporation is VISTA FINANCIAL SERVICES, INC., 2319 West
Lobo Avenue, Mesa, Arizona 85202.
ARTICLE II
PURPOSES
The purpose for which this corporation is organized is the transaction of
any or all lawful business for which corporations may be incorporated under the
laws of the State of Arizona, as they may be amended from time to time.
ARTICLE III
INITIAL BUSINESS
The corporation initially intends to conduct the business of secondary
market mortgage loan brokerage and consulting.
ARTICLE IV
AUTHORIZED CAPITAL
The corporation shall have authority to issue one million (1,000,000)
shares of non-assessable common stock, having no par value.
ARTICLE V
PREEMPTIVE RIGHTS
The holders from time to time of the common stock of the corporation shall
have preemptive rights as to the common stock then or thereafter authorized to
be issued, including treasury stock. No resolution of the Board of Directors
authorizing the issuance of stock to which preemptive rights shall attach may
require such rights to be exercised within less than sixty (60) days.
ARTICLE VI
STOCK RIGHTS AND OPTIONS
The corporation may issue rights and options to purchase shares of stock of
the corporation to any person, including directors, officers, or employees of
the corporation or of any affiliate thereof, and no shareholder approval or
ratification of any such issuance of rights and options shall be required.
<PAGE>
ARTICLE VII
STATUTORY AGENT
The name and address of the initial statutory agent of the corporation
shall be:
Garry N. Keister
Rawlins, Burrus & Lewkowitz, P.C.
2300 Valley Bank Center
Phoenix, Arizona 85073
ARTICLE VIII
BOARD OF DIRECTORS
The initial Board of Directors shall consist of two (2) directors. The
persons who will serve as directors until the first annual meeting of
shareholders or until their successors are elected and qualify are:
Robert T. Boley
2319 West Lobo Avenue
Mesa, Arizona
Janet M. Boley
2319 West Lobo Avenue
Mesa, Arizona
ARTICLE IX
NUMBER OF DIRECTORS
The number of persons to serve on the Board of Directors shall be fixed by
the bylaws.
ARTICLE X
MANAGEMENT
The business and affairs of the corporation shall be managed by the Board
of Directors.
ARTICLE XI
INCORPORATORS
The incorporators of the corporation are:
Robert T. Boley
2319 West Lobo Avenue
Mesa, Arizona
2
<PAGE>
Janet M. Boley
2319 West Lobo Avenue
Mesa, Arizona
All powers, duties and responsibilities of the incorporators shall cease at the
time of delivery of these Articles of Incorporation to the Arizona Corporation
Commission for filing.
ARTICLE XII
DISTRIBUTION FROM CAPITAL SURPLUS
The Board of Directors of the corporation may, from time to time,
distribute a pro-rata basis to its shareholders out of the capital surplus of
the corporation a portion of its assets, in cash or property.
ARTICLE XIII
INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
To the extent permitted by law, the corporation may indemnify any person
who incurs any loss, cost or expense by reason of the fact such person is or was
an officer, director, employee or agent of the corporation and such
indemnification for an officer or director shall be mandatory in all
circumstances in which indemnification is permitted by the laws of Arizona.
ARTICLE XIV
REPURCHASE OF SHARES
The Board of Directors of the corporation may, from time to time, cause the
corporation to purchase its own shares to the extent of the unreserved and
unrestricted earned and capital surplus of the corporation.
ARTICLE XV
DIVIDENDS
The Board of Directors may authorize the payment of dividends to the
holders of shares of any class of stock payable in shares of any other class.
IN WITNESS WHEREOF, we, the undersigned, have hereunto signed our names
this 18th day of July, 1983.
/s/ Robert T. Boley
----------------------------------------
Incorporator
/s/ Janet M. Boley
----------------------------------------
Incorporator
3
<PAGE>
ARTICLES OF AMENDMENT
OF
VISTA FINANCIAL SERVICES, INC.
1. The name of the corporation is Vista Financial Services, Inc.
2. The Articles of Incorporation are amended to change the name of the
corporation to Creative Vistas, Inc.
3. This name change is made pursuant to a plan of reorganization approved by
an Amended Order Confirming Debtor's Modified Plan of Reorganization of the
Honorable George B. Nielsen, Jr. dated November 27, 1996 in the United
States Bankruptcy Court, District of Arizona, In re: Vista Financial
Services, Inc., No. 93-95704-GBN.
4. The United States Bankruptcy Court, District of Arizona had jurisdiction of
the proceeding under the provisions of Chapter 11 of the United States
Bankruptcy Code.
5. No other provisions of the corporate articles are amended and all other
provisions remain in full force and effect.
DATED February 12, 1997.
/s/ Ronald E. Warnicke
----------------------------------------
Ronald E. Warnicke
Secretary
BYLAWS
OF
VISTA FINANCIAL SERVICES, INC.
ARTICLE I
OFFICE AND SEAL
1.01 OFFICE
The principal office of the corporation shall be in Maricopa County, State of
Arizona. Offices may also be maintained and meetings of stockholders and
directors may be held at such other place or places as may be designated from
time to time by the Board of Directors.
1.02 SEAL
The corporate seal of the corporation shall consist of two (2) concentric
circles between which is the name of the corporation and in the center of which
is inscribed the year of its incorporation. Unless otherwise specifically
required by law, no corporate seal or scroll is necessary to establish the
validity of any contract, bond, conveyance or other instrument of writing of the
corporation, nor shall the addition or omission of any corporate seal or scroll
in any way affect any such instrument heretofore or hereafter made.
ARTICLE II
STOCKHOLDERS' MEETING
2.01 ANNUAL MEETING
The annual meeting of the stockholders of the corporation shall be held at its
principal office on the 15th day of October of each year, at the hour of 10:00
o'clock A.M. for the purpose of electing directors, and for the transaction of
such other business as may come before the meeting. If the day fixed herein for
the annual meeting shall be a legal holiday, such meeting shall be held on the
next succeeding business day at the same time. If the election of directors
shall not be held on the day designated herein for any annual meeting of the
stockholders, or at any adjournment thereof, the Board of Directors shall cause
the election to be held at a special meeting of the stockholders as soon
thereafter as may be convenient. Notwithstanding the foregoing, the Board may
for any reason it deems sufficient, change the place, date and/or time of the
annual meeting. 2.02 SPECIAL MEETING
Special meetings of the stockholders, for any purpose or purposes, unless
otherwise provided by law, shall be called by the Secretary upon the order of
the President, or upon the order of a majority of the Board of Directors, or
upon the request in writing of the holders of not fewer than one-tenth (1/10th)
<PAGE>
of all the outstanding shares of the corporation entitled to vote at the
meeting. Only such business as may be specified in the call and notice may be
transacted at special meetings.
2.03 PLACE OF MEETING
Any place, either within or without the State of Arizona, unless prohibited by
law, may be designated by the Board of Directors as the place of meeting for any
annual or special meeting. Absent a designation by the Board, such meeting shall
be held at the known place of business.
2.04 NOTICE OF MEETING
Written notice stating the place, date and hour of the annual meeting, and in
the case of a special meeting the purpose or purposes for which the special
meeting is called, shall be delivered not less than ten (10) nor more than fifty
(50) days before the date of the meeting, either personally or by mail, by an
officer of the corporation at the direction of the person or persons calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when mailed to the
shareholder at his address as it appears on the stock transfer books of the
corporation.
2.05 RECORD DATE FOR VOTING
At any meeting of the stockholders only such persons shall be entitled to vote
in person or by proxy as appear as stockholders upon the transfer books of the
company at the time of such meeting unless the Board of Directors shall, by
resolution, fix a date not more than sixty (60) days nor less than ten (10) days
in advance of the date of the stockholders' meeting as the record date for the
meeting, in which case only those so appearing as stockholders on the date so
fixed shall be entitled to vote. Additionally, the Board may similarly fix a
record date for determination of stockholders entitled to receive a dividend or
for a determination of stockholders for any other purpose.
2.06 QUORUM
At all meetings of stockholders except where it is otherwise provided by law, it
shall be necessary that stockholders representing a majority of the issued and
outstanding voting stock be present in person or by proxy to constitute a
quorum. If less than a majority of such stock is represented at a meeting the
stockholders entitled to vote thereat present in person or represented by proxy
shall have the power to adjourn the meeting from time to time until a quorum
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting as originally called. The stockholders present at
a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum. If the adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
2
<PAGE>
2.07 PROXIES
At all meetings of stockholders, a stockholder may vote by proxy executed in
writing by the stockholder or by his duly authorized attorney in fact. Such
proxy shall be filed with the Secretary of the corporation before or at the time
of the meeting. Proxies may be given for more than one meeting and shall be
revocable to the extent permitted by law at the pleasure of the stockholder
executing same.
2.08 CUMULATIVE AND NON-CUMULATIVE VOTING
Each outstanding share entitled to vote shall be entitled to one vote upon each
matter submitted to a vote at a meeting of stockholders, except that, in the
case of election of directors, the system of cumulative voting shall be used.
All corporate action other than election of directors shall be determined by a
vote of a majority of the votes represented at a meeting at which a quorum is
present except as is otherwise provided herein or in the Articles of
Incorporation or by law.
2.09 VOTING OF SHARES BY CERTAIN HOLDERS
Shares standing in the name of another company or corporation may be voted by
such officer, agent or proxy as the Bylaws of such company or corporation may
prescribed, or, in the absence of such provision, as the Board of Directors of
such company or corporation may determine.
Shares held by an administrator, personal representative, guardian or
conservator may be voted by him, either in person or by proxy, but no trustee
shall be entitled to vote shares held by him without a transfer of such shares
into his name.
Shares standing in the name of a receiver may be voted by such receiver, and
shares held by or under the control of a receiver may be voted by such receiver
without the transfer thereof into his name, if authority so to do be contained
in an appropriate order of the Court by which such receiver was appointed.
Shares of its own stock belonging to the corporation shall not be voted,
directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding shares entitled to vote.
2.10 ACTION WITHOUT MEETING
Any action required to be taken or which may be taken at a meeting of
stockholders may be taken without a meeting of a resolution reflecting such
action is signed as having been approved by all stockholders entitled to vote
with respect thereto.
2.11 IRREGULARITIES
All information and/or irregularities in calls, notices of meetings and in the
matter of voting, form and validity of proxies, credentials and method of
ascertaining those present and shares entitled to vote, shall be deemed waived
if no objection is made at the meeting.
3
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
3.01 GENERAL POWERS
The business and affairs of the corporation shall be managed by its Board of
Directors.
3.02 NUMBER
The number of directors of the corporation shall be not less than two (2) nor
more than five (5).
3.03 TENURE
At the first meeting of stockholders and at each annual meeting thereafter the
stockholders shall elect directors to hold office until the next annual meeting
and until their successors are elected and qualified, subject however to
removal, with or without any cause, by the stockholders in accordance with
Section 3.10 of this Article.
3.04 QUALIFICATIONS
Directors need not be holders of record of voting stock. They need not be
residents of Arizona and directors may be elected to succeed themselves.
3.05 REGULAR MEETINGS
A regular annual meeting of the Board of Directors shall be held without other
notice that this Bylaw immediately after, and at the same place as, the annual
meeting of stockholders. The Board of Directors may provided, by resolution, the
time and place for the holding of additional regular meetings without other
notice than such resolution.
3.06 SPECIAL MEETINGS
Special meetings of the Board of Directors may be called by the Secretary at the
request of the President or a majority of the Directors. The person, or persons,
authorized to request the call of special meetings of the Board of Directors may
fix the time and place for holding any such special meeting.
3.07 NOTICE
Written notice of a special meeting shall be given to each director at his
business address, by hand delivery, mail or telegram. If mailed, such notice
shall be deposited in the United States mail at least four (4) days prior to the
meeting date; if wired, it shall be delivered to the telegraph company at least
two (2) days prior to the meting date; and if hand delivered it shall be so
delivered at least two (2) days prior to the meeting date. Any director may
waive such notice of any meeting. The attendance of a director at a meeting
shall constitute a waiver of notice of such meeting, except where such
attendance is for the purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
4
<PAGE>
3.08 QUORUM
A majority of the full Board of Directors shall constitute a quorum for the
transaction of business at any meeting of the Board, but if less than a quorum
is present, a majority of the Directors present may adjourn the meeting from
time to time to reconvene without further notice.
3.09 MANNER OF ACTING
The act of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors, unless a greater majority
is specifically required by the Articles of Incorporation of these Bylaws.
3.10 RESIGNATION AND REMOVAL
Any director may resign at any time. The shareholders entitled to vote for the
election of directors may remove a director with or without cause. A director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office.
3.11 COMPENSATION
By resolution of the Board of Directors, the directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as director. No such payment hall preclude any director from
serving the corporation in any other capacity and receiving compensation
therefore.
3.12 PRESUMPTION OF ASSENT
A director of the corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken shall be presumed to
have assented to the action taken unless his dissent shall be entered in the
minutes of the meeting, or unless he shall file his written dissent to such
action with the person acting as the Secretary of the meeting immediately after
the adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
3.13 ACTION WITHOUT MEETING
Any action required to be taken or which may be taken at a meeting of directors
may be taken without a meeting if a resolution reflecting such action is signed
as having been approved by all directors entitled to vote with respect thereto.
5
<PAGE>
ARTICLE IV
OFFICERS
4.01 NUMBER
The offices of the corporation shall be a president, a vice president, a
secretary and a treasurer, who shall be elected by the Board of Directors. Such
other officers and assistant officers as may be deemed necessary may be elected
or appointed by the Board of Directors. Two or more offices may be combined in
one person except the offices of President and Secretary.
4.02 ELECTION AND TERM OF OFFICE
The officers of the corporation to be elected by the Board of Directors shall be
elected at the first meeting of the Board of Directors following the first
meeting of stockholders and thereafter annually at the annual meeting of the
Board of Directors held after each annual meeting of the stockholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as is convenient. Each officer shall hold office until
his successor shall have been duly elected and shall have qualified, or until
death, or until he shall resign or shall have been removed in the manner
hereinafter provided.
4.03 REMOVAL
Any officer or agent elected or appointed by the Board of Directors may be
removed by the Board of Directors with or without cause at any time, but such
removal shall be without prejudice to the contract rights as an employee, if
any, of the person so removed. Election or appointment of an officer or agent
shall not of itself create contract rights.
4.04 VACANCIES
A vacancy in any office because of death, resignation, removal, disqualification
or otherwise, may be filled by the Board of Directors for the unexpired portion
of the term.
4.05 PRESIDENT
The president shall be the chief executive officer of the corporation and shall
supervise and control all of the business and affairs of the corporation. He
shall, when present, preside at all meetings of the stockholders and all the
meetings of the Board of Directors. He may sign, with the Secretary or any other
proper officer of the corporation thereunto authorized by the Board of
Directors, certificates for shares of the corporation, and deeds, mortgages,
bonds, contracts 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 or shall be required
by law to be otherwise signed or executed. He shall have the power to appoint
and remove one or more administrative vice presidents of the corporation and
such other assistants to the various elected officers of the corporation as is
necessary for the accomplishment of their duties. In general, he shall perform
all duties incident to the office of president and such other duties as may be
prescribed by the Board of Directors from time to time.
6
<PAGE>
4.06 VICE PRESIDENT
In the absence of the president, or in the event of his death, inability or
refusal to act, the vice president, or if there is more than one vice president,
the senior vice president, shall perform the duties of the president, and when
so acting shall have all the powers of and be subject to all the restrictions
upon the president. Otherwise, such senior and other vice presidents shall
perform and have authority to perform only such duties as from time to time may
be assigned by the president or by the Board of Directors.
4.07 SECRETARY
The secretary shall keep the minutes of the meeting of stockholders and
directors in one or more books provided for that purpose; see that all notices
are duly given in accordance with the provisions of these Bylaws, or as required
by law; be custodian of the corporate records and of the seal of the corporation
and see that the seal of the corporation is affixed to all documents, the
execution of which on behalf of the corporation under its seal is duly
authorized; keep or cause to be kept under his general supervision by a
registrar or transfer agent appointed by the company a register of the name and
post office address of each stockholder as furnished by such stockholder; have
general charge of the stock ledger and transfer books of the corporation; and,
in general, perform all duties incident to the office of secretary and such
other duties as from time to time may be assigned to him by the president, or by
the Board of Directors.
4.08 TREASURER
If required by the Board of Directors, the treasurer shall give a bond for the
faithful performance of his duties in such sum and with or without such surety,
or sureties, as the Board of Directors shall determine. He shall have charge and
custody of and be responsible for all funds and securities of the corporation;
receive and give receipts for monies due and payable to the corporation from any
source whatsoever, and deposit all monies in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of Article VII of these Bylaws; and, in general, perform all
of the duties as from time to time may be assigned to him by the president or by
the Board of Directors.
4.09 SALARIES
The compensation of the officers shall be fixed from time to time by the Board
of Directors, and no officer shall be precluded from receiving such salary by
reason of the fact that he is also a director of the corporation. Any payments
made to an officer of the corporation such as salary, commission, bonus,
interest, or rent or entertainment expense incurred by him, which shall be
disallowed in whole or in part as a deductible expense by the Internal Revenue
Service, shall be reimbursable by such officer to the corporation to the full
extent of such disallowance. It shall be the duty of the Directors, as a Board,
to enforce payment of each such amount disallowed. In lieu of payment by the
officer, subject to the determination of the Directors, proportionate amounts
may be withheld from his future compensation payments until the amount owed to
the corporation has been recovered.
7
<PAGE>
4.10 DELEGATION OF DUTIES
In the case of the absence of any officer of the corporation or for any reason
they may deem sufficient, a majority of the entire Board may delegate for the
time being any powers or duties of any office to any other office or to any
director.
ARTICLE V
STOCK CERTIFICATES AND TRANSFER
5.01 CERTIFICATES
Certificates representing shares of the corporation shall be in such form as
shall be determined by the Board of Directors. Such certificates shall be signed
by the president and by the secretary, or by such other officers authorized by
law and by the Board of Directors so to do. All certificates for shares shall be
consecutively numbered, or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock ledger books of the
corporation.
In case any officer who has signed or whose facsimile signature has been used on
a certificate ceases to be an officer before the certificate has been delivered,
such certificate may, nevertheless, be adopted and issued and delivered by the
corporation as though such officer had not ceased to hold such office. 5.02
TRANSFER OF SHARES
Transfer of shares shall be made only upon the transfer books of the corporation
and before a new certificate is issued the old certificate shall be surrendered
for cancellation. Such transfers shall be made only by the holder of record
thereof, or by his legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the secretary of the corporation.
Stock certificates bearing a legend stating that transfer of the share is
subject to some restriction shall not be transferred or reissued except in
compliance therewith.
5.03 REGISTERED STOCKHOLDERS
Registered stockholders only shall be entitled to be treated by the corporation
as the holder in fact of the stock standing in their respective names, and the
corporation shall not be bound to recognize any equitable or other claim of
interest in any share on the part of any other person, whether or not it shall
have express or other notice thereof, except as expressly provided by the laws
of Arizona.
5.04 LOST CERTIFICATES
In case of loss or destruction of any certificate of stock, another may be
issued in its place upon proof of such loss or destruction, although the Board
8
<PAGE>
of Directors may, in its discretion, require the giving of a satisfactory bond
of indemnity to the corporation and/or to the transfer agent and registrar.
5.05 REGULATIONS
Subject to the requirements of Section 10.4 hereof, the Board of Directors shall
have power and authority to make any determination it may deem expedient
concerning the issue, transfer, conversion or registration of certificates for
shares of the capital stock of the corporation, not inconsistent with the laws
of Arizona, the Articles of Incorporation and these Bylaws.
ARTICLE VI
BOOKS AND RECORDS
The books, accounts and records, including stock records, of the corporation
shall be kept within the State of Arizona, at such place or places as the Board
of Directors may from time to time appoint. The Board of Directors shall
determine whether and to what extent the accounts, books or records of the
corporation, or any of them, shall be open to the inspection of the
stockholders, and no stockholder shall have any right to inspect any account or
book or document of the corporation, except as conferred by law or by resolution
of the stockholders or directors.
ARTICLE VII
CONTRACTS, LOANS, CHECKS, DEPOSITS
7.01 CONTRACTS
The Board of Directors may enter into any contract or agreement of employment
with any officer, or officers, agent or agents, in the name of and on behalf of
the corporation, and authority conferred thereunder may be general or confined
to specific matters.
7.02 LOANS
No loans to the corporation shall be contracted on its behalf, and no evidence
of indebtedness shall be issued in its name unless authorized by a resolution of
the Board of Directors. Such authority may be general or confined to specific
instances.
7.03 CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidence of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation and in such
manner as shall from time to time be determined by resolution of the Board of
Directors.
9
<PAGE>
7.04 DEPOSITS
All funds of the corporation not otherwise employed 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 designate or authorize.
ARTICLE VIII
DISCLOSURE OF INTEREST
No contract or other transaction between this corporation and any other
corporation (whether or not a majority of the shares of such other corporation
is owned by this corporation, or a majority of the shares of this corporation is
owned by such other corporation) and no act of this corporation shall in any way
be affected or invalidated by the fact that any of the directors of this
corporation are pecuniary or otherwise interest in, any contract or transaction
of the corporation, provided that the fact that he, or such firm, is so
interested shall be disclosed or shall have been known to the Board of
Directors, or a majority thereof. Any director of this corporation who is also a
director or officer of such other corporation, or who is so interested, may be
counted in determining the existence of a quorum at any meeting of the Board of
Directors of this corporation that shall authorize such contract or transaction,
with like force and effect as if he were not such director or officer of such
other corporation, or not so interested.
ARTICLE IX
INDEMNIFICATION
The powers of the corporation to indemnify any person who was or is involved in
any matter, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall be exercised only as authorized in the
specific case upon a determination that indemnification is proper in the
circumstances because the party to be indemnified has met satisfactory standards
of conduct appropriate in the circumstances. Unless indemnification has been
ordered by a court, such determination shall be made by the shareholder, acting
by a majority of the outstanding stock, in a meeting at which a quorum is
present.
ARTICLE X
TREASURY STOCK, WARRANTS AND OPTIONS
10.01 TREASURY STOCK
The corporation shall have the right to acquire, purchase, hold, exchange, sell
or otherwise dispose of its own stock and the Board of Directors is authorized
to enter into agreements to repurchase stock of the corporation and to cancel
the same or to hold the same as Treasury Stock and to resell any such Treasury
Stock. The number of shares and price shall be fixed by the Board of Directors.
10
<PAGE>
Repurchase of said shares shall, however, be made only from surplus or other
funds of the corporation which may be used for such purpose pursuant to the laws
of the State of Arizona, the Articles of Incorporation and these Bylaws.
10.02 WARRANTS
The Board of Directors shall have the power to authorize the issuance of any
amount of stock purchase warrants authorized by law, and to approve the form,
terms and conditions upon which such warrants are to be issued and exercised.
10.03 OPTIONS
The corporation may grant options to purchase its stock by individual agreement,
or under a general plan. The Board of Directors shall have the power to
authorize and approve stock option plans.
10.04 OPINIONS OF COUNSEL
Notwithstanding the foregoing provisions of this Article, prior to making any
offer to sell or sale of any purchase or solicitation to sell or exchange, the
Board of Directors shall consult with the obtain the opinion of legal counsel
for the corporation with reference to the legal propriety and validity of any
such transaction referred to in this Article, especially in reference to the
applicability of the Securities Act of 1933, the Blue Sky laws of Arizona and of
any other state, and other laws regulating transactions involving securities.
ARTICLE XI
AMENDMENT OF BYLAWS
Alternations, amendments or repeals of, the Bylaws may be made by a majority of
the stockholders entitled to vote at any meeting, if the notice of such meeting
contains a statement of the proposed alteration, amendment or repeal, or by the
Board of Directors by a majority vote of the whole Board of Directors at any
regular meeting, provided the proposed alteration, amendment or repeal has been
set out in the notice of each director in writing prior to said meeting. The
Board of Directors shall not repeal any Bylaw specially adopted by the
Stockholders nor make any amendment thereof or of other Bylaws in conflict
therewith, but may amend any such Bylaw in any manner not inconsistent with its
purpose and intent.
ARTICLE XII
WAIVER OF NOTICE
Whenever notice of a meeting is required by law or by these Bylaws to be given
to any director, officer or stockholder, such requirement shall not be construed
to be limited to personal notice; such notice may be given in writing by
depositing the same in a post office or letter box, postpaid addressed to such
director, officer or stockholder at his or her address as the same appears in
the books of the corporation. Delivery shall be deemed complete upon deposit in
the mail.
11
<PAGE>
A waiver of any such notice signed by a stockholder, director or officer,
whether before or after the time of the meeting, shall be deemed equivalent to
any meeting notice required to be given.
ARTICLE XIII
CONFLICTING PROVISIONS
In the event of any conflict between these Bylaws and the provisions of the
applicable laws of the State of Arizona, as from time to time amended, or with
any applicable regulation issued thereunder, such applicable law and/or
regulation shall control. In the event of any conflict between these Bylaws and
the Articles of Incorporation of the corporation, as from time to time amended,
the provisions in the Articles shall control.
CERTIFICATE OF SECRETARY
I, the undersigned, do hereby certify:
That the foregoing Bylaws were duly adopted by the Board of Directors of
the Corporation by unanimous written consent in lieu of an organizational
meeting on the 18th day of July, 1983.
That I was unanimously appointed to serve, as Secretary for the
Corporation.
IN WITNESS WHEREOF, I have hereunto subscribed my name this 18th day of
July, 1983.
/s/ Janet M. Boley
----------------------------------------
Secretary, Janet M. Boley
12
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