U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(B) OR (G) OF
THE SECURITIES EXCHANGE ACT OF 1934
DETERMINATION, INC
(NAME OF SMALL BUSINESS ISSUER)
COLORADO 84-1551341
(STATE OR OTHER JURISDICTION OF I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
5265 NORTH ACADEMY BLVD., SUITE 2250
COLORADO SPRINGS, CO 80918
PHONE: (719) 593-0123 FAX: (719) 593-0123
COPY TO:
CHRISTY T. O'CONNOR, ESQUIRE
8300 FAIRMOUNT DRIVE, SUITE TT105
DENVER, CO 80231
(303) 331-1980
SECURITIES TO BE REGISTERED UNDER SECTION 12(B) OF THE ACT: NONE
SECURITIES TO BE REGISTERED UNDER SECTION 12(G) OF THE ACT:
COMMON STOCK, $.001 PAR VALUE
(TITLE OF CLASS)
<PAGE>
PART 1
BUSINESS
DETERMINATION, INC, (THE "COMPANY"), WAS INCORPORATED ON JULY ____, 2000
UNDER THE LAWS OF THE STATE OF COLORADO TO ENGAGE IN ANY LAWFUL CORPORATE
UNDERTAKING, INCLUDING, BUT NOT LIMITED TO, SELECTED MERGERS AND ACQUISITIONS.
THE COMPANY HAS BEEN IN THE DEVELOPMENTAL STAGE SINCE INCEPTION AND HAS NO
OPERATIONS TO DATE. OTHER THAN ISSUING SHARES TO ITS ORIGINAL SHAREHOLDERS, THE
COMPANY HAS NOT COMMENCED ANY OPERATIONAL ACTIVITIES.
THE COMPANY WILL ATTEMPT TO LOCATE AND NEGOTIATE WITH A BUSINESS ENTITY FOR
THE MERGER OF THAT TARGET COMPANY INTO THE COMPANY. IN CERTAIN INSTANCES, A
TARGET COMPANY MAY WISH TO BECOME A SUBSIDIARY OF THE COMPANY OR MAY WISH TO
CONTRIBUTE ASSETS TO THE COMPANY RATHER THAN MERGE. NO ASSURANCES CAN BE GIVEN
THAT THE COMPANY WILL BE SUCCESSFUL IN LOCATING OR NEGOTIATING WITH ANY TARGET
COMPANY.
THE COMPANY HAS BEEN FORMED TO PROVIDE A METHOD FOR A FOREIGN OR DOMESTIC
PRIVATE COMPANY TO BECOME A REPORTING ("PUBLIC") COMPANY WHOSE SECURITIES ARE
QUALIFIED FOR TRADING IN THE UNITED STATES SECONDARY MARKET.
THERE ARE CERTAIN PERCEIVED BENEFITS TO BEING A REPORTING COMPANY WITH A
CLASS OF PUBLICLY-TRADED SECURITIES. THESE ARE COMMONLY THOUGHT TO INCLUDE THE
FOLLOWING:
- THE ABILITY TO USE REGISTERED SECURITIES TO MAKE ACQUISITION OF
ASSETS
OR BUSINESSES;
- INCREASED VISIBILITY;
- THE FACILITATION OF BORROWING FROM FINANCIAL INSTITUTIONS;
- IMPROVED TRADING EFFICIENCY;
- SHAREHOLDER LIQUIDITY;
- GREATER EASE IN SUBSEQUENTLY RAISING CAPITAL;
- COMPENSATION OF KEY EMPLOYEES THROUGH STOCK OPTIONS;
- ENHANCED CORPORATE IMAGE; AND
- A PRESENCE IN THE UNITED STATES CAPITAL MARKET. A BUSINESS ENTITY,
IF ANY,
WHICH MAY BE INTERESTED IN A BUSINESS COMBINATION WITH THE COMPANY MAY
INCLUDE THE FOLLOWING:
A COMPANY FOR WHOM A PRIMARY PURPOSE OF BECOMING PUBLIC IS THE USE OF ITS
SECURITIES FOR THE ACQUISITION OF ASSETS OR BUSINESSES;
A COMPANY WHICH IS UNABLE TO FIND AN UNDERWRITER OF ITS SECURITIES OR IS
UNABLE TO FIND AN UNDERWRITER OF SECURITIES ON TERMS ACCEPTABLE TO IT;
A COMPANY WHICH WISHES TO BECOME PUBLIC WITH LESS DILUTION OF ITS COMMON
STOCK THAN WOULD OCCUR UPON AN UNDERWRITING;
A COMPANY WHICH BELIEVES THAT IT WILL BE ABLE OBTAIN INVESTMENT CAPITAL ON
MORE FAVORABLE TERMS AFTER IT HAS BECOME PUBLIC;
A FOREIGN COMPANY WHICH MAY WISH AN INITIAL ENTRY INTO THE UNITED STATES
SECURITIES MARKET;
A SPECIAL SITUATION COMPANY, SUCH AS A COMPANY SEEKING A PUBLIC MARKET TO
SATISFY REDEMPTION REQUIREMENTS UNDER A QUALIFIED EMPLOYEE STOCK OPTION PLAN;
AND
A COMPANY SEEKING ONE OR MORE OF THE OTHER PERCEIVED BENEFITS OF BECOMING A
PUBLIC COMPANY.
A BUSINESS COMBINATION WITH A TARGET COMPANY WILL NORMALLY INVOLVE THE
TRANSFER TO THE TARGET COMPANY OF THE MAJORITY OF THE ISSUED AND OUTSTANDING
COMMON STOCK OF THE COMPANY, AND THE SUBSTITUTION BY THE TARGET BUSINESS OF ITS
OWN MANAGEMENT AND BOARD OF DIRECTORS.
NO ASSURANCES CAN BE GIVEN THAT THE COMPANY WILL BE ABLE TO ENTER INTO A
BUSINESS COMBINATION, AS TO THE TERMS OF A BUSINESS COMBINATION, OR AS TO THE
NATURE OF THE TARGET COMPANY.
THE PROPOSED BUSINESS ACTIVITIES DESCRIBED HEREIN CLASSIFY THE COMPANY AS A
"BLANK CHECK" COMPANY. SEE "GLOSSARY". THE SECURITIES AND EXCHANGE COMMISSION
AND MANY STATES HAVE ENACTED STATUTES, RULES AND REGULATIONS LIMITING THE SALE
OF SECURITIES OF BLANK CHECK COMPANIES. MANAGEMENT DOES NOT INTEND TO UNDERTAKE
ANY EFFORTS TO CAUSE A MARKET TO DEVELOP IN THE COMPANY'S SECURITIES UNTIL SUCH
TIME AS THE COMPANY HAS SUCCESSFULLY IMPLEMENTED ITS BUSINESS PLAN DESCRIBED
HEREIN. ACCORDINGLY, EACH SHAREHOLDER OF THE COMPANY HAS EXECUTED AND DELIVERED
A "LOCK-UP" LETTER AGREEMENT AFFIRMING THAT SUCH SHAREHOLDERS WILL NOT SELL OR
OTHERWISE TRANSFER THEIR SHARES OF THE COMPANY'S COMMON STOCK EXCEPT IN
CONNECTION WITH OR FOLLOWING COMPLETION OF A MERGER OR ACQUISITION AND THE
COMPANY IS NO LONGER CLASSIFIED AS A BLANK CHECK COMPANY. EACH SHAREHOLDER HAS
DEPOSITED SUCH SHAREHOLDER'S RESPECTIVE STOCK CERTIFICATE WITH THE COMPANY'S
MANAGEMENT, WHO WILL NOT RELEASE THESE RESPECTIVE CERTIFICATES EXCEPT IN
CONNECTION WITH OR FOLLOWING THE COMPLETION OF A MERGER OR ACQUISITION.
THE COMPANY'S BUSINESS IS SUBJECT TO NUMEROUS RISK FACTORS, INCLUDING THE
FOLLOWING:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS
THE COMPANY HAS HAD NO OPERATING HISTORY NOR ANY REVENUES OR EARNINGS FROM
OPERATIONS. THE COMPANY HAS NO SIGNIFICANT ASSETS OR FINANCIAL RESOURCES. THE
COMPANY WILL, IN ALL LIKELIHOOD, SUSTAIN OPERATING EXPENSES WITHOUT
CORRESPONDING REVENUES, AT LEAST UNTIL THE CONSUMMATION OF A BUSINESS
COMBINATION. THIS MAY RESULT IN THE COMPANY INCURRING A NET OPERATING LOSS
WHICH WILL INCREASE CONTINUOUSLY UNTIL THE COMPANY CAN CONSUMMATE A BUSINESS
COMBINATION WITH A TARGET COMPANY. THERE IS NO ASSURANCE THAT THE COMPANY CAN
IDENTIFY SUCH A TARGET COMPANY AND CONSUMMATE SUCH A BUSINESS COMBINATION.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS
THE SUCCESS OF THE COMPANY'S PROPOSED PLAN OF OPERATION WILL DEPEND TO A
GREAT EXTENT ON THE OPERATIONS, FINANCIAL CONDITION AND MANAGEMENT OF THE
IDENTIFIED TARGET COMPANY. WHILE MANAGEMENT INTENDS TO SEEK BUSINESS
COMBINATIONS WITH ENTITIES HAVING ESTABLISHED OPERATING HISTORIES, THERE CAN BE
NO ASSURANCE THAT THE COMPANY WILL BE SUCCESSFUL IN LOCATING CANDIDATES MEETING
SUCH CRITERIA. IN THE EVENT THE COMPANY COMPLETES A BUSINESS COMBINATION, OF
WHICH THERE CAN BE NO ASSURANCE, THE SUCCESS OF THE COMPANY'S OPERATIONS MAY BE
DEPENDENT UPON MANAGEMENT OF THE TARGET COMPANY AND NUMEROUS OTHER FACTORS
BEYOND THE COMPANY'S CONTROL.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND COMBINATIONS
THE COMPANY IS AND WILL CONTINUE TO BE A SIGNIFICANT PARTICIPANT IN THE
BUSINESS OF SEEKING MERGERS WITH AND ACQUISITIONS OF BUSINESS ENTITIES. A LARGE
NUMBER OF ESTABLISHED AND WELL-FINANCED ENTITIES, INCLUDING VENTURE CAPITAL
FIRMS, ARE ACTIVE IN MERGERS AND ACQUISITIONS OF COMPANIES WHICH MAY BE MERGER
OR ACQUISITION TARGET CANDIDATES FOR THE COMPANY. NEARLY ALL SUCH ENTITIES HAVE
SIGNIFICANTLY GREATER FINANCIAL RESOURCES, TECHNICAL EXPERTISE AND MANAGERIAL
CAPABILITIES THAN THE COMPANY AND, CONSEQUENTLY, THE COMPANY WILL BE AT A
COMPETITIVE DISADVANTAGE IN IDENTIFYING POSSIBLE BUSINESS OPPORTUNITIES AND
SUCCESSFULLY COMPLETING A BUSINESS COMBINATION. MOREOVER, THE COMPANY WILL ALSO
COMPETE WITH NUMEROUS OTHER SMALL PUBLIC COMPANIES IN SEEKING MERGER OR
ACQUISITION CANDIDATES.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER
TRANSACTION - NO STANDARDS FOR BUSINESS COMBINATION
THE COMPANY HAS NO ARRANGEMENT, AGREEMENT OR UNDERSTANDING WITH RESPECT TO
ENGAGING IN A MERGER WITH OR ACQUISITION OF A BUSINESS ENTITY. THERE CAN BE NO
ASSURANCE THE COMPANY WILL BE SUCCESSFUL IN IDENTIFYING AND EVALUATING SUITABLE
BUSINESS OPPORTUNITIES OR IN CONCLUDING A BUSINESS COMBINATION. MANAGEMENT HAS
NOT IDENTIFIED ANY PARTICULAR INDUSTRY OR SPECIFIC BUSINESS WITHIN AN INDUSTRY
FOR EVALUATION BY THE COMPANY. THERE IS NO ASSURANCE THE COMPANY WILL BE ABLE
TO NEGOTIATE A BUSINESS COMBINATION ON TERMS FAVORABLE TO THE COMPANY. THE
COMPANY HAS NOT ESTABLISHED A SPECIFIC LENGTH OF OPERATING HISTORY OR A
SPECIFIED LEVEL OF EARNINGS, ASSETS, NET WORTH OR OTHER CRITERIA WHICH IT WILL
REQUIRE A TARGET BUSINESS OPPORTUNITY TO HAVE ACHIEVED, OR WITHOUT WHICH THE
COMPANY WOULD NOT CONSIDER A BUSINESS COMBINATION WITH SUCH BUSINESS ENTITY.
ACCORDINGLY, THE COMPANY MAY ENTER INTO A BUSINESS COMBINATION WITH A
BUSINESS ENTITY HAVING NO SIGNIFICANT OPERATING HISTORY, LOSSES, LIMITED OR NO
POTENTIAL FOR EARNINGS, LIMITED ASSETS, NEGATIVE NET WORTH OR OTHER NEGATIVE
CHARACTERISTICS.
CONTINUED MANAGEMENT CONTROL,
LIMITED TIME AVAILABILITY
WHILE SEEKING A BUSINESS COMBINATION, MANAGEMENT ANTICIPATES DEVOTING UP TO
TEN HOURS PER MONTH TO THE BUSINESS OF THE COMPANY. THE COMPANY'S OFFICERS HAVE
NOT ENTERED INTO WRITTEN EMPLOYMENT AGREEMENTS WITH THE COMPANY AND ARE NOT
EXPECTED TO DO SO IN THE FORESEEABLE FUTURE. THE COMPANY HAS NOT OBTAINED KEY
MAN LIFE INSURANCE ON ANY OF ITS OFFICERS OR DIRECTORS. NOTWITHSTANDING THE
COMBINED LIMITED EXPERIENCE AND TIME COMMITMENT OF MANAGEMENT, LOSS OF THE
SERVICES OF ANY OF THESE INDIVIDUALS WOULD ADVERSELY AFFECT DEVELOPMENT OF THE
COMPANY'S BUSINESS AND ITS LIKELIHOOD OF CONTINUING OPERATIONS. SEE
"MANAGEMENT".
CONFLICTS OF INTEREST - GENERAL
THE COMPANY'S OFFICERS AND DIRECTORS PARTICIPATE IN OTHER BUSINESS VENTURES
WHICH COMPETE DIRECTLY WITH THE COMPANY. ADDITIONAL CONFLICTS OF INTEREST AND
NON-ARMS LENGTH TRANSACTIONS MAY ALSO ARISE IN THE FUTURE. MANAGEMENT HAS
ADOPTED A POLICY THAT THE COMPANY WILL NOT SEEK A MERGER WITH, OR ACQUISITION
OF, ANY ENTITY IN WHICH ANY MEMBER OF MANAGEMENT SERVES AS OFFICERS, DIRECTORS
OR PARTNERS, OR IN WHICH THEY OR THEIR FAMILY MEMBERS OWN OR HOLD ANY OWNERSHIP
INTEREST. SEE "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS CONFLICTS OF INTEREST".
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE
ACQUISITION
SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT")
REQUIRES COMPANIES SUBJECT THERETO TO PROVIDE CERTAIN INFORMATION ABOUT
SIGNIFICANT ACQUISITIONS INCLUDING CERTIFIED FINANCIAL STATEMENTS FOR THE
COMPANY ACQUIRED COVERING ONE OR TWO YEARS, DEPENDING ON THE RELATIVE SIZE OF
THE ACQUISITION. THE TIME AND ADDITIONAL COSTS THAT MAY BE INCURRED BY SOME
TARGET COMPANIES TO PREPARE SUCH STATEMENTS MAY SIGNIFICANTLY DELAY OR
ESSENTIALLY PRECLUDE CONSUMMATION OF AN OTHERWISE DESIRABLE ACQUISITION BY THE
COMPANY. ACQUISITION PROSPECTS THAT DO NOT HAVE OR ARE UNABLE TO OBTAIN THE
REQUIRED AUDITED STATEMENTS MAY NOT BE APPROPRIATE FOR ACQUISITION SO LONG AS
THE REPORTING REQUIREMENTS OF THE EXCHANGE ACT ARE APPLICABLE.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION
THE COMPANY HAS NEITHER CONDUCTED, NOR HAVE OTHERS MADE AVAILABLE TO IT,
RESULTS OF MARKET RESEARCH INDICATING THAT MARKET DEMAND EXISTS FOR THE
TRANSACTIONS CONTEMPLATED BY THE COMPANY. MOREOVER, THE COMPANY DOES NOT HAVE,
AND DOES NOT PLAN TO ESTABLISH, A MARKETING ORGANIZATION. EVEN IN THE EVENT
DEMAND IS IDENTIFIED FOR A MERGER OR ACQUISITION CONTEMPLATED BY THE COMPANY,
THERE IS NO ASSURANCE THE COMPANY WILL BE SUCCESSFUL IN COMPLETING ANY SUCH
BUSINESS COMBINATION.
LACK OF DIVERSIFICATION
THE COMPANY'S PROPOSED OPERATIONS, EVEN IF SUCCESSFUL, WILL IN ALL
LIKELIHOOD RESULT IN THE COMPANY ENGAGING IN A BUSINESS COMBINATION WITH ONLY
ONE BUSINESS OPPORTUNITY. CONSEQUENTLY, THE COMPANY'S ACTIVITIES WILL BE
LIMITED TO THOSE ENGAGED IN BY THE BUSINESS OPPORTUNITY WHICH THE COMPANY MERGES
WITH OR ACQUIRES. THE COMPANY'S INABILITY TO DIVERSIFY ITS ACTIVITIES INTO A
NUMBER OF AREAS MAY SUBJECT THE COMPANY TO ECONOMIC FLUCTUATIONS WITHIN A
PARTICULAR BUSINESS OR INDUSTRY AND THEREFORE INCREASE THE RISKS ASSOCIATED WITH
THE COMPANY'S OPERATIONS.
REGULATION
ALTHOUGH THE COMPANY WILL BE SUBJECT TO REGULATION UNDER THE EXCHANGE ACT,
MANAGEMENT BELIEVES THE COMPANY WILL NOT BE SUBJECT TO REGULATION UNDER THE
INVESTMENT COMPANY ACT OF 1940, INSOFAR AS THE COMPANY WILL NOT BE ENGAGED IN
THE BUSINESS OF INVESTING OR TRADING IN SECURITIES. IN THE EVENT THE COMPANY
ENGAGES IN BUSINESS COMBINATIONS WHICH RESULT IN THE COMPANY HOLDING PASSIVE
INVESTMENT INTERESTS IN A NUMBER OF ENTITIES, THE COMPANY COULD BE SUBJECT TO
REGULATION UNDER THE INVESTMENT COMPANY ACT OF 1940. IN SUCH EVENT, THE COMPANY
WOULD BE REQUIRED TO REGISTER AS AN INVESTMENT COMPANY AND COULD BE EXPECTED TO
INCUR SIGNIFICANT REGISTRATION AND COMPLIANCE COSTS . THE COMPANY HAS OBTAINED
NO FORMAL DETERMINATION FROM THE SECURITIES AND EXCHANGE COMMISSION AS TO THE
STATUS OF THE COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940 AND,
CONSEQUENTLY, ANY VIOLATION OF SUCH ACT COULD SUBJECT THE COMPANY TO MATERIAL
ADVERSE CONSEQUENCES.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT
A BUSINESS COMBINATION INVOLVING THE ISSUANCE OF THE COMPANY'S COMMON STOCK
WILL, IN ALL LIKELIHOOD, RESULT IN SHAREHOLDERS OF A TARGET COMPANY OBTAINING A
CONTROLLING INTEREST IN THE COMPANY. ANY SUCH BUSINESS COMBINATION MAY REQUIRE
MANAGEMENT OF THE COMPANY TO SELL OR TRANSFER ALL OR A PORTION OF THE COMPANY'S
COMMON STOCK HELD BY IT, AND TO RESIGN AS MEMBERS OF THE BOARD OF DIRECTORS AND
OFFICERS OF THE COMPANY. THE RESULTING CHANGE IN CONTROL OF THE COMPANY WILL
LIKELY RESULT IN REMOVAL OF THE PRESENT OFFICERS AND DIRECTORS OF THE COMPANY
AND A CORRESPONDING REDUCTION IN OR ELIMINATION OF THEIR PARTICIPATION IN THE
FUTURE AFFAIRS OF THE COMPANY.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS COMBINATION
THE COMPANY'S PRIMARY PLAN OF OPERATION IS BASED UPON A BUSINESS
COMBINATION WITH A BUSINESS ENTITY WHICH, IN ALL LIKELIHOOD, WILL RESULT IN THE
COMPANY ISSUING SECURITIES TO SHAREHOLDERS OF SUCH BUSINESS ENTITY. THE
ISSUANCE OF PREVIOUSLY AUTHORIZED AND UNISSUED COMMON STOCK OF THE COMPANY WOULD
RESULT IN REDUCTION IN PERCENTAGE OF SHARES OWNED BY PRESENT SHAREHOLDERS OF THE
COMPANY AND WOULD MOST LIKELY RESULT IN A CHANGE IN CONTROL OR MANAGEMENT OF THE
COMPANY.
ASPECTS OF BLANK CHECK OFFERING
THE COMPANY MAY ENTER INTO A BUSINESS COMBINATION WITH A BUSINESS ENTITY
THAT DESIRES TO ESTABLISH A PUBLIC TRADING MARKET FOR ITS SHARES. A TARGET
COMPANY MAY ATTEMPT TO AVOID WHAT IT DEEMS TO BE ADVERSE CONSEQUENCES OF
UNDERTAKING ITS OWN PUBLIC OFFERING BY SEEKING A BUSINESS COMBINATION WITH THE
COMPANY. SUCH CONSEQUENCES MAY INCLUDE, BUT ARE NOT LIMITED TO, TIME DELAYS OF
THE REGISTRATION PROCESS, SIGNIFICANT EXPENSES TO BE INCURRED IN SUCH AN
OFFERING, LOSS OF VOTING CONTROL TO PUBLIC SHAREHOLDERS OR THE INABILITY TO
OBTAIN AN UNDERWRITER OR TO OBTAIN AN UNDERWRITER ON TERMS SATISFACTORY TO THE
COMPANY.
TAXATION
FEDERAL AND STATE TAX CONSEQUENCES WILL, IN ALL LIKELIHOOD, BE MAJOR
CONSIDERATIONS IN ANY BUSINESS COMBINATION THE COMPANY MAY UNDERTAKE.
CURRENTLY, SUCH TRANSACTIONS MAY BE STRUCTURED SO AS TO RESULT IN TAX-FREE
TREATMENT TO BOTH COMPANIES, PURSUANT TO VARIOUS FEDERAL AND STATE TAX
PROVISIONS. THE COMPANY INTENDS TO STRUCTURE ANY BUSINESS COMBINATION SO AS TO
MINIMIZE THE FEDERAL AND STATE TAX CONSEQUENCES TO BOTH THE COMPANY AND THE
TARGET COMPANY; HOWEVER, THERE CAN BE NO ASSURANCE THAT SUCH BUSINESS
COMBINATION WILL MEET THE STATUTORY REQUIREMENTS OF A TAX-FREE REORGANIZATION OR
THAT THE PARTIES WILL OBTAIN THE INTENDED TAX-FREE TREATMENT UPON A TRANSFER OF
STOCK OR ASSETS. A NON-QUALIFYING REORGANIZATION COULD RESULT IN THE IMPOSITION
OF BOTH FEDERAL AND STATE TAXES WHICH MAY HAVE AN ADVERSE EFFECT ON BOTH PARTIES
TO THE TRANSACTION.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY
DISQUALIFY BUSINESS OPPORTUNITIES
MANAGEMENT OF THE COMPANY WILL REQUEST THAT ANY POTENTIAL BUSINESS
OPPORTUNITY PROVIDE
AUDITED FINANCIAL STATEMENTS. ONE OR MORE ATTRACTIVE BUSINESS OPPORTUNITIES MAY
CHOOSE TO FOREGO THE POSSIBILITY OF A BUSINESS COMBINATION WITH THE COMPANY
RATHER THAN INCUR THE EXPENSES ASSOCIATED WITH PREPARING AUDITED FINANCIAL
STATEMENTS.
SUCH AUDITED FINANCIAL STATEMENTS MAY NOT BE AVAILABLE. IN SUCH CASE, THE
COMPANY INTENDS TO OBTAIN CERTAIN ASSURANCES AS TO THE TARGET COMPANY'S ASSETS,
LIABILITIES, REVENUES AND EXPENSES PRIOR TO CONSUMMATING A BUSINESS COMBINATION,
WITH FURTHER ASSURANCES THAT AN AUDITED FINANCIAL STATEMENT WOULD BE PROVIDED
AFTER CLOSING OF SUCH A TRANSACTION. CLOSING DOCUMENTS RELATIVE THERETO WILL
INCLUDE REPRESENTATIONS THAT THE AUDITED FINANCIAL STATEMENTS WILL NOT
MATERIALLY DIFFER FROM THE REPRESENTATIONS INCLUDED IN SUCH CLOSING DOCUMENTS.
ITEM 2
PLAN OF OPERATION
THE COMPANY INTENDS TO MERGE WITH OR ACQUIRE A BUSINESS ENTITY IN EXCHANGE
FOR THE COMPANY'S SECURITIES. THE COMPANY HAS NO PARTICULAR ACQUISITIONS IN
MIND AND HAS NOT ENTERED INTO ANY NEGOTIATIONS REGARDING SUCH AN ACQUISITION.
NONE OF THE COMPANY'S OFFICERS, DIRECTORS, OR AFFILIATES HAVE ENGAGED IN ANY
NEGOTIATIONS WITH ANY REPRESENTATIVE OF ANY COMPANY REGARDING THE POSSIBILITY OF
AN ACQUISITION OR MERGER BETWEEN THE COMPANY AND SUCH OTHER COMPANY.
THE COMPANY ANTICIPATES SEEKING OUT A TARGET BUSINESS THROUGH SOLICITATION.
SUCH SOLICITATION MAY INCLUDE NEWSPAPER OR MAGAZINE ADVERTISEMENTS, MAILINGS AND
OTHER DISTRIBUTIONS TO LAW FIRMS, ACCOUNTING FIRMS, INVESTMENT BANKERS,
FINANCIAL ADVISORS AND SIMILAR PERSONS, THE USE OF ONE OR MORE WORLD WIDE WEB
SITES AND SIMILAR METHODS. NO ESTIMATE CAN BE MADE AS TO THE NUMBER OF PERSONS
WHO WILL BE CONTACTED OR SOLICITED. SUCH PERSONS WILL HAVE NO RELATIONSHIP TO
MANAGEMENT.
THE COMPANY HAS NO FULL TIME EMPLOYEES. THE COMPANY'S PRESIDENT HAS AGREED
TO ALLOCATE A PORTION OF HIS TIME TO THE ACTIVITIES OF THE COMPANY, WITHOUT
COMPENSATION. THE PRESIDENT ANTICIPATES THAT THE BUSINESS PLAN OF THE COMPANY
CAN BE IMPLEMENTED BY HIS DEVOTING APPROXIMATELY 10 HOURS PER MONTH TO THE
BUSINESS AFFAIRS OF THE COMPANY AND, CONSEQUENTLY, CONFLICTS OF INTEREST MAY
ARISE WITH RESPECT TO THE LIMITED TIME COMMITMENT BY SUCH OFFICER. SEE "ITEM 5.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS."
MANAGEMENT IS CURRENTLY INVOLVED WITH OTHER BLANK CHECK COMPANIES, AND IS
INVOLVED IN CREATING OTHER BLANK CHECK COMPANIES SIMILAR TO THIS ONE. IN
ADDITION, THE COMPANY'S OFFICERS AND DIRECTORS EXPECT, IN THE FUTURE, TO BECOME
INVOLVED WITH OTHER COMPANIES WHICH HAVE A BUSINESS PURPOSE SIMILAR TO THAT OF
THE COMPANY. A CONFLICT MAY ARISE IN THE EVENT THAT ANOTHER BLANK CHECK COMPANY
WITH WHICH MANAGEMENT IS AFFILIATED IS FORMED AND ACTIVELY SEEKS A TARGET
BUSINESS. MANAGEMENT ANTICIPATES THAT TARGET BUSINESSES WILL BE LOCATED FOR THE
COMPANY AND OTHER BLANK CHECK COMPANIES IN CHRONOLOGICAL ORDER OF THE DATE OF
FORMATION OF SUCH BLANK CHECK COMPANIES.
HOWEVER, OTHER BLANK CHECK COMPANIES THAT MAY BE FORMED MAY DIFFER FROM THE
COMPANY IN CERTAIN ITEMS SUCH AS PLACE OF INCORPORATION, NUMBER OF SHARES AND
SHAREHOLDERS, WORKING CAPITAL, TYPES OF AUTHORIZED SECURITIES, OR OTHER ITEMS.
IT MAY BE THAT A TARGET BUSINESS MAY BE MORE SUITABLE FOR OR MAY PREFER A
CERTAIN BLANK CHECK COMPANY FORMED AFTER THE COMPANY. IN SUCH CASE, A BUSINESS
COMBINATION MIGHT BE NEGOTIATED ON BEHALF OF THE MORE SUITABLE OR PREFERRED
BLANK CHECK COMPANY REGARDLESS OF DATE OF FORMATION. SEE "ITEM 5, DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS - OTHER BLANK CHECK COMPANY
ACTIVITIES".
THE ARTICLES OF INCORPORATION OF THE COMPANY PROVIDES THAT THE COMPANY MAY
INDEMNIFY OFFICERS AND/OR DIRECTORS OF THE COMPANY FOR LIABILITIES, WHICH CAN
INCLUDE LIABILITIES ARISING UNDER THE SECURITIES LAWS. THEREFORE, ASSETS OF THE
COMPANY COULD BE USED OR ATTACHED TO SATISFY ANY LIABILITIES SUBJECT TO SUCH
INDEMNIFICATION.
GENERAL BUSINESS PLAN
THE COMPANY'S PURPOSE IS TO SEEK, INVESTIGATE AND, IF SUCH INVESTIGATION
WARRANTS, ACQUIRE AN INTEREST IN A BUSINESS ENTITY PRESENTED TO IT BY PERSONS OR
FIRMS WHO OR WHICH DESIRE TO SEEK THE PERCEIVED ADVANTAGES OF A CORPORATION
WHICH HAS A CLASS OF SECURITIES REGISTERED UNDER THE EXCHANGE ACT. THE COMPANY
WILL NOT RESTRICT ITS SEARCH TO ANY SPECIFIC BUSINESS, INDUSTRY, OR GEOGRAPHICAL
LOCATION AND THE COMPANY MAY PARTICIPATE IN A BUSINESS VENTURE OF VIRTUALLY ANY
KIND OR NATURE. THIS DISCUSSION OF THE PROPOSED BUSINESS IS NOT MEANT TO BE
RESTRICTIVE OF THE COMPANY'S VIRTUALLY UNLIMITED DISCRETION TO SEARCH FOR AND
ENTER INTO POTENTIAL BUSINESS OPPORTUNITIES. MANAGEMENT ANTICIPATES THAT IT
WILL BE ABLE TO PARTICIPATE IN ONLY ONE POTENTIAL BUSINESS VENTURE BECAUSE THE
COMPANY HAS NOMINAL ASSETS AND LIMITED FINANCIAL RESOURCES. SEE ITEM F/S,
"FINANCIAL STATEMENTS." THIS LACK OF DIVERSIFICATION SHOULD BE CONSIDERED A
SUBSTANTIAL RISK TO SHAREHOLDERS OF THE COMPANY BECAUSE IT WILL NOT PERMIT THE
COMPANY TO OFFSET POTENTIAL LOSSES FROM ONE VENTURE AGAINST GAINS FROM ANOTHER.
THE COMPANY MAY SEEK A BUSINESS OPPORTUNITY WITH ENTITIES WHICH HAVE
RECENTLY COMMENCED OPERATIONS, OR WHICH WISH TO UTILIZE THE PUBLIC MARKETPLACE
IN ORDER TO RAISE ADDITIONAL CAPITAL IN ORDER TO EXPAND INTO NEW PRODUCTS OR
MARKETS, TO DEVELOP A NEW PRODUCT OR SERVICE, OR FOR OTHER CORPORATE PURPOSES.
THE COMPANY MAY ACQUIRE ASSETS AND ESTABLISH WHOLLY-OWNED SUBSIDIARIES IN
VARIOUS BUSINESSES OR ACQUIRE EXISTING BUSINESSES AS SUBSIDIARIES.
THE COMPANY ANTICIPATES THAT THE SELECTION OF A BUSINESS OPPORTUNITY IN
WHICH TO PARTICIPATE WILL BE COMPLEX AND EXTREMELY RISKY. DUE TO GENERAL
ECONOMIC CONDITIONS, RAPID TECHNOLOGICAL ADVANCES BEING MADE 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 MAY INCLUDE FACILITATING OR IMPROVING THE TERMS ON WHICH
ADDITIONAL EQUITY FINANCING MAY BE SOUGHT, PROVIDING LIQUIDITY FOR INCENTIVE
STOCK OPTIONS OR SIMILAR BENEFITS TO KEY EMPLOYEES, PROVIDING LIQUIDITY FOR
SHAREHOLDERS AND OTHER FACTORS. BUSINESS OPPORTUNITIES MAY BE AVAILABLE IN MANY
DIFFERENT INDUSTRIES AND AT VARIOUS STAGES OF DEVELOPMENT, ALL OF WHICH WILL
MAKE THE TASK OF COMPARATIVE INVESTIGATION AND ANALYSIS OF SUCH BUSINESS
OPPORTUNITIES DIFFICULT AND COMPLEX.
THE COMPANY HAS, AND WILL CONTINUE TO HAVE, NO CAPITAL WITH WHICH TO
PROVIDE THE OWNERS OF BUSINESS OPPORTUNITIES WITH ANY CASH OR OTHER ASSETS.
HOWEVER, MANAGEMENT BELIEVES THE COMPANY WILL BE ABLE TO OFFER OWNERS OF
ACQUISITION CANDIDATES THE OPPORTUNITY TO ACQUIRE A CONTROLLING OWNERSHIP
INTEREST IN A PUBLICLY REGISTERED COMPANY WITHOUT INCURRING THE COST AND TIME
REQUIRED TO CONDUCT AN INITIAL PUBLIC OFFERING. THE OFFICERS AND DIRECTORS OF
THE COMPANY HAVE NOT CONDUCTED MARKET RESEARCH AND ARE NOT AWARE OF STATISTICAL
DATA TO SUPPORT THE PERCEIVED BENEFITS OF A MERGER OR ACQUISITION TRANSACTION
FOR THE OWNERS OF A BUSINESS OPPORTUNITY.
THE ANALYSIS OF NEW BUSINESS OPPORTUNITIES WILL BE UNDERTAKEN BY, OR UNDER
THE SUPERVISION OF, THE OFFICERS AND DIRECTORS OF THE COMPANY, NONE OF WHOM IS A
PROFESSIONAL BUSINESS ANALYST. IN ANALYZING PROSPECTIVE BUSINESS OPPORTUNITIES,
MANAGEMENT WILL CONSIDER SUCH MATTERS AS THE AVAILABLE TECHNICAL, FINANCIAL AND
MANAGERIAL RESOURCES; WORKING CAPITAL AND OTHER FINANCIAL REQUIREMENTS; HISTORY
OF OPERATIONS, IF ANY; PROSPECTS FOR THE FUTURE; NATURE OF PRESENT AND EXPECTED
COMPETITION; THE QUALITY AND EXPERIENCE OF MANAGEMENT SERVICES WHICH MAY BE
AVAILABLE AND THE DEPTH OF THAT MANAGEMENT; THE POTENTIAL FOR FURTHER RESEARCH,
DEVELOPMENT, OR EXPLORATION; SPECIFIC RISK FACTORS NOT NOW FORESEEABLE BUT WHICH
THEN MAY BE ANTICIPATED TO IMPACT THE PROPOSED ACTIVITIES OF THE COMPANY; THE
POTENTIAL FOR GROWTH OR EXPANSION; THE POTENTIAL FOR PROFIT; THE PERCEIVED
PUBLIC RECOGNITION OR ACCEPTANCE OF PRODUCTS, SERVICES, OR TRADES; NAME
IDENTIFICATION; AND OTHER RELEVANT FACTORS. MANAGEMENT WILL MEET PERSONALLY
WITH MANAGEMENT AND KEY PERSONNEL OF THE BUSINESS OPPORTUNITY AS PART OF THEIR
INVESTIGATION. TO THE EXTENT POSSIBLE, THE COMPANY INTENDS TO UTILIZE WRITTEN
REPORTS AND PERSONAL INVESTIGATION TO EVALUATE THE ABOVE FACTORS. THE EXCHANGE
ACT REQUIRES THAT ANY MERGER OR ACQUISITION CANDIDATE COMPLY WITH ALL CERTAIN
REPORTING REQUIREMENTS, WHICH INCLUDE PROVIDING AUDITED FINANCIAL STATEMENTS TO
BE INCLUDED IN THE REPORTING FILINGS MADE UNDER THE EXCHANGE ACT. THE COMPANY
WILL NOT ACQUIRE OR MERGE WITH ANY COMPANY FOR WHICH AUDITED FINANCIAL
STATEMENTS CANNOT BE OBTAINED AT OR WITHIN A REASONABLE PERIOD OF TIME AFTER
CLOSING OF THE PROPOSED TRANSACTION.
MANAGEMENT OF THE COMPANY, WHICH IN ALL LIKELIHOOD WILL NOT BE EXPERIENCED
IN MATTERS RELATING TO THE BUSINESS OF A TARGET COMPANY, WILL RELY UPON ITS OWN
EFFORTS IN ACCOMPLISHING THE BUSINESS PURPOSES OF THE COMPANY. IT IS
ANTICIPATED THAT OUTSIDE CONSULTANTS OR ADVISORS MAY BE UTILIZED BY THE COMPANY
TO ASSIST IN THE SEARCH FOR QUALIFIED TARGET COMPANIES. IF THE COMPANY DOES
RETAIN SUCH AN OUTSIDE CONSULTANT OR ADVISOR, ANY CASH FEE EARNED BY SUCH PARTY
WILL NEED TO BE PAID BY THE PROSPECTIVE MERGER/ACQUISITION CANDIDATE, AS THE
COMPANY HAS LIMITED CASH ASSETS WITH WHICH TO PAY SUCH OBLIGATION.
THE COMPANY WILL NOT RESTRICT ITS SEARCH FOR ANY SPECIFIC KIND OF FIRMS,
BUT MAY ACQUIRE A VENTURE WHICH IS IN ITS PRELIMINARY OR DEVELOPMENT STAGE,
WHICH IS ALREADY IN OPERATION, OR IN ESSENTIALLY ANY STAGE OF ITS CORPORATE
LIFE. IT IS IMPOSSIBLE TO PREDICT AT THIS TIME THE STATUS OF ANY BUSINESS IN
WHICH THE COMPANY MAY BECOME ENGAGED, IN THAT SUCH BUSINESS MAY NEED TO SEEK
ADDITIONAL CAPITAL, MAY DESIRE TO HAVE ITS SHARES PUBLICLY TRADED, OR MAY SEEK
OTHER PERCEIVED ADVANTAGES WHICH THE COMPANY MAY OFFER. HOWEVER, THE COMPANY
DOES NOT INTEND TO OBTAIN FUNDS TO FINANCE THE OPERATION OF ANY ACQUIRED
BUSINESS OPPORTUNITY UNTIL SUCH TIME AS THE COMPANY HAS SUCCESSFULLY CONSUMMATED
SUCH A MERGER OR ACQUISITION.
ACQUISITION OF OPPORTUNITIES
IN IMPLEMENTING A STRUCTURE FOR A PARTICULAR BUSINESS ACQUISITION, THE
COMPANY MAY BECOME A PARTY TO A MERGER, CONSOLIDATION, REORGANIZATION, JOINT
VENTURE, OR LICENSING AGREEMENT WITH ANOTHER CORPORATION OR ENTITY. IT MAY ALSO
ACQUIRE STOCK OR ASSETS OF AN EXISTING BUSINESS. ON THE CONSUMMATION OF A
TRANSACTION, IT IS PROBABLE THAT THE PRESENT MANAGEMENT AND SHAREHOLDERS OF THE
COMPANY WILL NO LONGER BE IN CONTROL OF THE COMPANY. IN ADDITION, THE COMPANY'S
DIRECTORS MAY, AS PART OF THE TERMS OF THE ACQUISITION TRANSACTION, RESIGN AND
BE REPLACED BY NEW DIRECTORS WITHOUT A VOTE OF THE COMPANY'S SHAREHOLDERS OR MAY
SELL THEIR STOCK IN THE COMPANY.
IT IS ANTICIPATED THAT ANY SECURITIES ISSUED IN ANY SUCH REORGANIZATION
WOULD BE ISSUED IN RELIANCE UPON EXEMPTION FROM REGISTRATION UNDER APPLICABLE
FEDERAL AND STATE SECURITIES LAWS. IN SOME CIRCUMSTANCES, HOWEVER, AS A
NEGOTIATED ELEMENT OF ITS TRANSACTION, THE COMPANY MAY AGREE
TO REGISTER ALL OR A PART OF SUCH SECURITIES IMMEDIATELY AFTER THE TRANSACTION
IS CONSUMMATED OR AT SPECIFIED TIMES THEREAFTER. IF SUCH REGISTRATION OCCURS,
OF WHICH THERE CAN BE NO ASSURANCE, IT WILL BE UNDERTAKEN BY THE SURVIVING
ENTITY AFTER THE COMPANY HAS ENTERED INTO AN AGREEMENT FOR A BUSINESS
COMBINATION OR HAS CONSUMMATED A BUSINESS COMBINATION AND THE COMPANY IS NO
LONGER CONSIDERED A BLANK CHECK COMPANY. UNTIL SUCH TIME AS THIS OCCURS, THE
COMPANY WILL NOT ATTEMPT TO REGISTER ANY ADDITIONAL SECURITIES. THE ISSUANCE OF
SUBSTANTIAL ADDITIONAL SECURITIES AND THEIR POTENTIAL SALE INTO ANY TRADING
MARKET WHICH MAY DEVELOP IN THE COMPANY'S SECURITIES MAY HAVE A DEPRESSIVE
EFFECT ON THE MARKET VALUE OF THE COMPANY'S SECURITIES IN THE FUTURE IF SUCH A
MARKET DEVELOPS, OF WHICH THERE IS NO ASSURANCE.
WHILE THE ACTUAL TERMS OF A TRANSACTION TO WHICH THE COMPANY MAY BE A PARTY
CANNOT BE PREDICTED, IT MAY BE EXPECTED THAT THE PARTIES TO THE BUSINESS
TRANSACTION WILL FIND IT DESIRABLE TO AVOID THE CREATION OF A TAXABLE EVENT AND
THEREBY STRUCTURE THE ACQUISITION IN A "TAX-FREE" REORGANIZATION UNDER SECTIONS
351 OR 368 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
WITH RESPECT TO ANY MERGER OR ACQUISITION, NEGOTIATIONS WITH TARGET COMPANY
MANAGEMENT IS EXPECTED TO FOCUS ON THE PERCENTAGE OF THE COMPANY WHICH TARGET
COMPANY SHAREHOLDERS WOULD ACQUIRE IN EXCHANGE FOR ALL OF THEIR SHAREHOLDINGS IN
THE TARGET COMPANY. DEPENDING UPON, AMONG OTHER THINGS, THE TARGET COMPANY'S
ASSETS AND LIABILITIES, THE COMPANY'S SHAREHOLDERS WILL IN ALL LIKELIHOOD HOLD A
SUBSTANTIALLY LESSER PERCENTAGE OWNERSHIP INTEREST IN THE COMPANY FOLLOWING ANY
MERGER OR ACQUISITION. THE PERCENTAGE OWNERSHIP MAY BE SUBJECT TO SIGNIFICANT
REDUCTION IN THE EVENT THE COMPANY ACQUIRES A TARGET COMPANY WITH SUBSTANTIAL
ASSETS. ANY MERGER OR ACQUISITION EFFECTED BY THE COMPANY CAN BE EXPECTED TO
HAVE A SIGNIFICANT DELUSIVE EFFECT ON THE PERCENTAGE OF SHARES HELD BY THE
COMPANY'S SHAREHOLDERS AT SUCH TIME.
THE COMPANY WILL PARTICIPATE IN A BUSINESS OPPORTUNITY ONLY AFTER THE
NEGOTIATION AND EXECUTION OF APPROPRIATE AGREEMENTS. ALTHOUGH THE TERMS OF SUCH
AGREEMENTS CANNOT BE PREDICTED, GENERALLY SUCH AGREEMENTS WILL REQUIRE CERTAIN
REPRESENTATIONS AND WARRANTIES OF THE PARTIES THERETO, WILL SPECIFY CERTAIN
EVENTS OF DEFAULT, WILL DETAIL THE TERMS OF CLOSING AND THE CONDITIONS WHICH
MUST BE SATISFIED BY THE PARTIES PRIOR TO AND AFTER SUCH CLOSING, WILL OUTLINE
THE MANNER OF BEARING COSTS, INCLUDING COSTS ASSOCIATED WITH THE COMPANY'S
ATTORNEYS AND ACCOUNTANTS, AND WILL INCLUDE MISCELLANEOUS OTHER TERMS.
THE COMPANY WILL NOT ACQUIRE OR MERGE WITH ANY ENTITY WHICH CANNOT PROVIDE
AUDITED FINANCIAL STATEMENTS AT OR WITHIN A REASONABLE PERIOD OF TIME AFTER
CLOSING OF THE PROPOSED TRANSACTION. THE COMPANY IS SUBJECT TO ALL OF THE
REPORTING REQUIREMENTS INCLUDED IN THE EXCHANGE ACT. INCLUDED IN THESE
REQUIREMENTS IS THE DUTY OF THE COMPANY TO FILE AUDITED FINANCIAL STATEMENTS AS
PART OF ITS FORM 8-K TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
UPON CONSUMMATION OF A MERGER OR ACQUISITION, AS WELL AS THE COMPANY'S AUDITED
FINANCIAL STATEMENTS INCLUDED IN ITS ANNUAL REPORT ON FORM 10-K (OR 10-KSB, AS
APPLICABLE). IF SUCH AUDITED FINANCIAL STATEMENTS ARE NOT AVAILABLE AT CLOSING,
OR WITHIN TIME PARAMETERS NECESSARY TO INSURE THE COMPANY'S COMPLIANCE WITH THE
REQUIREMENTS OF THE EXCHANGE ACT, OR IF THE AUDITED FINANCIAL STATEMENTS
PROVIDED DO NOT CONFORM TO THE REPRESENTATIONS MADE BY THE TARGET COMPANY, THE
CLOSING DOCUMENTS MAY PROVIDE THAT THE PROPOSED TRANSACTION WILL BE VOIDABLE AT
THE DISCRETION OF THE PRESENT MANAGEMENT OF THE COMPANY.
THE COMPANY'S PRINCIPAL SHAREHOLDER HAS AGREED THAT IT WILL ADVANCE TO THE
COMPANY ANY ADDITIONAL FUNDS WHICH THE COMPANY NEEDS FOR OPERATING CAPITAL AND
FOR COSTS IN CONNECTION WITH SEARCHING FOR OR COMPLETING AN ACQUISITION OR
MERGER. SUCH ADVANCES WILL BE MADE WITHOUT EXPECTATION OF REPAYMENT UNLESS THE
OWNERS OF THE BUSINESS WHICH THE COMPANY ACQUIRES OR MERGES WITH AGREE TO REPAY
ALL OR A PORTION OF SUCH ADVANCES. THERE IS NO MINIMUM OR MAXIMUM AMOUNT SUCH
SHAREHOLDER WILL ADVANCE TO THE COMPANY. THE COMPANY WILL NOT BORROW ANY FUNDS
FOR THE PURPOSE OF REPAYING ADVANCES MADE BY SUCH SHAREHOLDER, AND THE COMPANY
WILL NOT BORROW ANY FUNDS TO MAKE ANY PAYMENTS TO THE COMPANY'S PROMOTERS,
MANAGEMENT OR THEIR AFFILIATES OR ASSOCIATES.
THE BOARD OF DIRECTORS HAS PASSED A RESOLUTION WHICH CONTAINS A POLICY THAT
THE COMPANY WILL NOT SEEK AN ACQUISITION OR MERGER WITH ANY ENTITY IN WHICH ANY
OF THE COMPANY'S OFFICERS, DIRECTORS, SHAREHOLDERS OR THEIR AFFILIATES OR
ASSOCIATES SERVE AS AN OFFICER OR DIRECTOR OR HOLD ANY OWNERSHIP INTEREST.
COMPETITION
THE COMPANY WILL REMAIN AN INSIGNIFICANT PARTICIPANT AMONG THE FIRMS WHICH
ENGAGE IN THE ACQUISITION OF BUSINESS OPPORTUNITIES. THERE ARE MANY ESTABLISHED
VENTURE CAPITAL AND FINANCIAL CONCERNS WHICH HAVE SIGNIFICANTLY GREATER
FINANCIAL AND PERSONNEL RESOURCES AND TECHNICAL EXPERTISE THAN THE COMPANY. IN
VIEW OF THE COMPANY'S COMBINED EXTREMELY LIMITED FINANCIAL RESOURCES AND LIMITED
MANAGEMENT AVAILABILITY, THE COMPANY WILL CONTINUE TO BE AT A SIGNIFICANT
COMPETITIVE DISADVANTAGE COMPARED TO THE COMPANY'S COMPETITORS.
ITEM 3
DESCRIPTION OF PROPERTY
THE COMPANY HAS NO PROPERTIES AND AT THIS TIME HAS NO AGREEMENTS TO ACQUIRE
ANY PROPERTIES. THE COMPANY CURRENTLY USES THE OFFICES OF FINANCIAL
INDEPENDENCE, INC. AT NO COST TO THE COMPANY. FINANCIAL INDEPENDENCE, INC. HAS
AGREED TO CONTINUE THIS ARRANGEMENT UNTIL THE COMPANY COMPLETES AN ACQUISITION
OR MERGER.
ITEM 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.
THE FOLLOWING TABLE SETS FORTH, AS OF JULY 15, 2000, EACH PERSON KNOWN BY
THE COMPANY TO BE THE BENEFICIAL OWNER OF FIVE PERCENT OR MORE OF THE COMPANY'S
COMMON STOCK, ALL DIRECTORS INDIVIDUALLY AND ALL DIRECTORS AND OFFICERS OF THE
COMPANY AS A GROUP. EXCEPT AS NOTED, EACH PERSON HAS SOLE VOTING AND INVESTMENT
POWER WITH RESPECT TO THE SHARES SHOWN.
(1) MANAGEMENT OWNS 100% OF FINANCIAL INDEPENDENCE, INC. AND THEREFORE
IS CONSIDERED THE BENEFICIAL OWNER OF THE 1,000,000 SHARES OF COMMON STOCK OWNED
BY IT.
ITEM 5
DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS
THE DIRECTORS AND OFFICERS OF THE COMPANY ARE AS FOLLOWS:
Name Age Positions and Offices Held
Lee T. Duran 31 President, Chief Executive Officer, Director
Christy T. O'Connor 31 Secretary, Treasurer, Director
THERE ARE NO AGREEMENTS OR UNDERSTANDINGS FOR ANY OFFICER OR DIRECTOR TO
RESIGN AT THE REQUEST OF ANOTHER PERSON AND NONE OF THE ABOVE-NAMED OFFICERS OR
DIRECTORS ARE ACTING ON BEHALF OF OR WILL ACT AT THE DIRECTION OF ANY OTHER
PERSON.
SET FORTH BELOW ARE THE NAMES OF ALL DIRECTORS AND EXECUTIVE OFFICERS OF
THE COMPANY, ALL POSITIONS AND OFFICES WITH THE COMPANY HELD BY EACH SUCH
PERSON, THE PERIOD DURING WHICH HE HAS SERVED AS SUCH, AND THE BUSINESS
EXPERIENCE OF SUCH PERSONS DURING AT LEAST THE LAST FIVE YEARS;
LEE T. DURAN, 31, IS THE CHIEF EXECUTIVE OFFICER OF THE ORION GROUP, A
VENTURE CAPITAL INVESTMENT FIRM LOCATED IN DENVER, COLORADO. DURING 1995 AND
1996, MR. DURAN WAS THE MANAGER OF OFFICES IN DENVER, COLORADO AND FORT
LAUDERDALE, FLORIDA FOR FIRST ASSOCIATED SECURITIES, A SECURITIES BROKER-DEALER.
DURING 1995, MR. DURAN WAS THE MANAGER OF AN OFFICE IN FORT LAUDERDALE, FLORIDA
FOR CAPITAL SECURITIES, A SECURITIES BROKER-DEALER. DURING 1993 AND 1994, MR.
DURAN WAS A REPRESENTATIVE INVOLVED IN STOCK OFFERINGS WITH BILTMORE SECURITIES,
A SECURITIES BROKER-DEALER.
CHRISTY T. O'CONNOR, ESQ., JD, 31, RECEIVED BACHELOR'S OF ART IN PSYCHOLOGY
FROM THE UNIVERSITY OF CHICAGO IN 1990, A MASTER'S OF ART COURSE DEGREE IN
PSYCHOLOGY FROM THE UNIVERSITY OF CHICAGO IN 1990, A CERTIFICATE OF
INTERNATIONAL LAWS FROM THE UNIVERSITY OF INNSBRUCK, AUSTRIA IN 1993, AND A
JURIS DOCTOR FROM ST. MARY'S UNIVERSITY SCHOOL OF LAW IN 1993. FROM 1993-1996
MS. O'CONNOR WAS AN ASSOCIATE OF THE LAW FIRM C. MOTT WOOLLEY AND ASSOCIATES.
FROM 1996-1998 MS. O'CONNOR WAS A CORPORATE SPECIALIST WITH THE LAW FIRM OF
BROWNSTEIN, HYATT, FARBER & STRICKLAND. FROM 1998-2000, MS. O'CONNOR WAS
ASSOCIATE GENERAL COUNSEL FOR MONACO FINANCE, INC. MS. O'CONNOR IS PRESENTLY
SENIOR COUNSEL OF TCOM VENTURES CORPORATION.
MR. DURAN AND MS. O'CONNOR ANTICIPATE BEING INVOLVED WITH ADDITIONAL BLANK
CHECK COMPANIES FILED UNDER THE SECURITIES AND EXCHANGE ACT. CONFLICTS OF
INTEREST
THE COMPANY'S OFFICERS AND DIRECTORS HAVE ORGANIZED AND EXPECT TO ORGANIZE
OTHER COMPANIES OF A SIMILAR NATURE AND WITH A SIMILAR PURPOSE AS THE COMPANY.
CONSEQUENTLY, THERE ARE POTENTIAL INHERENT CONFLICTS OF INTEREST IN ACTING AS
OFFICERS AND DIRECTORS OF THE COMPANY. INSOFAR AS THE OFFICERS AND DIRECTORS
ARE ENGAGED IN OTHER BUSINESS ACTIVITIES, MANAGEMENT ANTICIPATES THAT THEY WILL
DEVOTE ONLY A MINOR AMOUNT OF TIME TO THE COMPANY'S AFFAIRS. THE COMPANY DOES
NOT HAVE A RIGHT OF FIRST REFUSAL PERTAINING TO OPPORTUNITIES THAT COME TO
MANAGEMENT'S ATTENTION INSOFAR AS SUCH OPPORTUNITIES MAY RELATE TO THE COMPANY'S
PROPOSED BUSINESS OPERATIONS.
A CONFLICT MAY ARISE IN THE EVENT THAT ANOTHER BLANK CHECK COMPANY WITH
WHICH MANAGEMENT IS AFFILIATED IS FORMED AND ACTIVELY SEEKS A TARGET BUSINESS.
IT IS ANTICIPATED THAT TARGET BUSINESSES WILL BE LOCATED FOR THE COMPANY AND
OTHER BLANK CHECK COMPANIES IN CHRONOLOGICAL ORDER OF THE DATE OF FORMATION OF
SUCH BLANK CHECK COMPANIES. HOWEVER, ANY BLANK CHECK COMPANIES THAT MAY BE
FORMED MAY DIFFER FROM THE COMPANY IN CERTAIN ITEMS SUCH AS PLACE OF
INCORPORATION, NUMBER OF SHARES AND SHAREHOLDERS, WORKING CAPITAL, TYPES OF
AUTHORIZED SECURITIES, OR OTHER ITEMS. IT MAY BE THAT A TARGET BUSINESS MAY BE
MORE SUITABLE FOR OR MAY PREFER A CERTAIN BLANK CHECK COMPANY FORMED AFTER THE
COMPANY. IN SUCH CASE, A BUSINESS COMBINATION MIGHT BE NEGOTIATED ON BEHALF OF
THE MORE SUITABLE OR PREFERRED BLANK CHECK COMPANY REGARDLESS OF DATE OF
FORMATION.
MR. DURAN IS THE PRESIDENT, CHIEF EXECUTIVE OFFICER AND A DIRECTOR AND
BENEFICIAL SHAREHOLDER OF 50% OF THE SHARES OF FINANCIAL INDEPENDENCE, INC.
WHICH IS, IN TURN, THE SOLE SHAREHOLDER OF THE COMPANY. MR. DURAN WILL BE
RESPONSIBLE FOR SEEKING, EVALUATING, NEGOTIATING AND CONSUMMATING A BUSINESS
COMBINATION WITH A TARGET BUSINESS WHICH MAY RESULT IN TERMS PROVIDING BENEFITS
TO MR. DURAN.
MS. O'CONNOR IS THE SECRETARY, TREASURER AND A DIRECTOR AND BENEFICIAL
SHAREHOLDER OF 50% OF THE SHARES OF FINANCIAL INDEPENDENCE, INC. WHICH IS, IN
TURN, THE SOLE SHAREHOLDER OF THE COMPANY. THE CONSUMMATION OF A BUSINESS
COMBINATION WITH A TARGET BUSINESS MAY RESULT IN TERMS PROVIDING BENEFITS TO MS.
O'CONNOR.
MR. DURAN IS THE CHIEF EXECUTIVE OFFICER OF THE ORION GROUP, A VENTURE
CAPITAL INVESTMENT FIRM. AS SUCH, DEMANDS MAY BE PLACED ON THE TIME OF MR.
DURAN WHICH WILL DETRACT FROM THE AMOUNT OF TIME HE IS ABLE TO DEVOTE TO THE
COMPANY. MR. DURAN INTENDS TO DEVOTE AS MUCH TIME TO THE ACTIVITIES OF THE
COMPANY AS REQUIRED. HOWEVER, SHOULD SUCH A CONFLICT ARISE, THERE IS NO
ASSURANCE THAT MR. DURAN WOULD NOT ATTEND TO OTHER MATTERS PRIOR TO THOSE OF THE
COMPANY. MR. DURAN PROJECTS THAT INITIALLY APPROXIMATELY TEN HOURS PER MONTH OF
HIS TIME MAY BE SPENT LOCATING A TARGET BUSINESS WHICH AMOUNT OF TIME WOULD
INCREASE WHEN THE ANALYSIS OF, AND NEGOTIATIONS AND CONSUMMATION WITH, A TARGET
BUSINESS ARE CONDUCTED.
MS. O'CONNOR IS SENIOR COUNSEL FOR TCOM VENTURES CORPORATION. TCOM VENTURES
CORPORATION HAS FILED A REGISTRATION STATEMENT ON FORM SB-2 UNDER THE SECURITIES
ACT. AS SUCH, DEMANDS MAY BE PLACED ON THE TIME OF MS. O'CONNOR WHICH WILL
DETRACT FROM THE AMOUNT OF TIME SHE IS ABLE TO DEVOTE TO THE COMPANY. MS.
O'CONNOR INTENDS TO DEVOTE AS MUCH TIME TO THE ACTIVITIES OF THE COMPANY AS
REQUIRED. HOWEVER, SHOULD SUCH A CONFLICT ARISE, THERE IS NO ASSURANCE THAT MS.
O'CONNOR WOULD NOT ATTEND TO OTHER MATTERS PRIOR TO THOSE OF THE COMPANY. MS.
O'CONNOR PROJECTS THAT INITIALLY APPROXIMATELY TEN HOURS PER MONTH OF HER TIME
MAY BE SPENT ON LEGAL MATTERS FOR THE COMPANY WITH REGARD TO LOCATING A TARGET
BUSINESS WHICH AMOUNT OF TIME WOULD INCREASE WHEN THE ANALYSIS OF, AND
NEGOTIATIONS AND CONSUMMATION WITH, A TARGET BUSINESS ARE CONDUCTED.
MANAGEMENT OWNS 100% OF FINANCIAL INDEPENDENCE, INC. WHICH IN TURN OWNS
500,000 SHARES OF THE SHARES OF COMMON STOCK OF THE COMPANY. MR. DURAN OWNS 50%
OF THE SHARES OF FINANCIAL INDEPENDENCE, INC. AND IS THEREFORE CONSIDERED THE
BENEFICIAL OWNER OF 500,000 SHARES OF THE COMMON STOCK OWNED BY FINANCIAL
INDEPENDENCE, INC. MS. O'CONNOR OWNS 50% OF THE SHARES OF FINANCIAL
INDEPENDENCE, INC. AND IS THEREFORE CONSIDERED THE BENEFICIAL OWNER OF 500,000
SHARES OF THE COMMON STOCK OWNED BY FINANCIAL INDEPENDENCE, INC. NO OTHER
SECURITIES OR RIGHTS TO SECURITIES, OF THE COMPANY WILL BE ISSUED TO MANAGEMENT
OR PROMOTERS, OR THEIR AFFILIATES OR ASSOCIATES, PRIOR TO THE COMPLETION OF A
BUSINESS COMBINATION. AT THE TIME OF A BUSINESS COMBINATION, MANAGEMENT EXPECTS
THAT SOME OF THE 1,000,000 SHARES OF COMMON STOCK OWNED BY FINANCIAL
INDEPENDENCE, INC. WILL BE PURCHASED BY THE TARGET BUSINESS. THE AMOUNT OF
COMMON STOCK SOLD OR CONTINUED TO BE OWNED BY FINANCIAL INDEPENDENCE, INC.
CANNOT BE DETERMINED AT THIS TIME.
MANAGEMENT AGREES TO PAY FINDER'S FEES, AS APPROPRIATE AND ALLOWED, TO
UNAFFILIATED PERSONS WHO MAY BRING A TARGET BUSINESS TO THE COMPANY WHERE THAT
REFERENCE RESULTS IN A BUSINESS COMBINATION. THE AMOUNT OF ANY FINDER'S FEE
WILL BE SUBJECT TO NEGOTIATION, AND CANNOT BE ESTIMATED AT THIS TIME. NO
FINDER'S FEE OF ANY KIND WILL BE PAID TO THE MANAGEMENT OR PROMOTERS OF THE
COMPANY OR TO THEIR ASSOCIATES OR AFFILIATES. NO LOANS OF ANY TIME HAVE, OR
WILL BE, MADE TO MANAGEMENT OR PROMOTERS OF THE COMPANY OR TO ANY OF THEIR
ASSOCIATES OR AFFILIATES.
NONE OF THE COMPANY'S OFFICERS, DIRECTORS, PROMOTERS, OR THEIR AFFILIATES
HAVE HAD ANY NEGOTIATIONS WITH AND THERE ARE NO PRESENT ARRANGEMENTS OR
UNDERSTANDINGS WITH ANY REPRESENTATIVES OF THE OWNERS OF ANY BUSINESS OR COMPANY
REGARDING THE POSSIBILITY OF A BUSINESS COMBINATION.
THE COMPANY WILL NOT ENTER INTO A BUSINESS COMBINATION, OR ACQUIRE ANY
ASSETS OF ANY KIND FOR ITS SECURITIES IN WHICH MANAGEMENT OR PROMOTERS OF THE
COMPANY OR ANY AFFILIATES OR ASSOCIATES HAVE ANY INTEREST, DIRECT OR INDIRECT.
FINANCIAL INDEPENDENCE, INC. ANTICIPATES THAT IT WILL ACTIVELY NEGOTIATE
THE PURCHASE OF A PORTION OF ITS 1,000,000 SHARES OF COMMON STOCK BY A TARGET
BUSINESS, AND ANTICIPATES THAT A TARGET BUSINESS WILL PURCHASE A PART OF ITS
COMMON STOCK OF THE COMPANY.
MANAGEMENT HAS ADOPTED CERTAIN POLICIES INVOLVING POSSIBLE CONFLICTS OF
INTEREST, INCLUDING PROHIBITING ANY OF THE FOLLOWING TRANSACTIONS INVOLVING
MANAGEMENT OR PROMOTERS OR THEIR AFFILIATES OR ASSOCIATES:
(I) ANY LENDING BY THE COMPANY TO SUCH PERSONS;
(II) THE ISSUANCE OF ANY ADDITIONAL SECURITIES TO SUCH PERSONS PRIOR TO A
BUSINESS COMBINATION;
(III) THE ENTERING INTO ANY BUSINESS COMBINATION OR ACQUISITION OF ASSETS IN
WHICH SUCH PERSONS HAVE ANY INTEREST, DIRECT OR INDIRECT; OR
(IV) THE PAYMENT OF ANY FINDER'S FEES TO SUCH PERSONS.
THESE POLICIES HAVE BEEN ADOPTED BY THE BOARD OF DIRECTORS OF THE COMPANY,
AND ANY CHANGES IN THESES PROVISIONS WOULD REQUIRE THE APPROVAL OF THE BOARD OF
DIRECTORS. MANAGEMENT DOES NOT INTEND TO PROPOSE ANY SUCH ACTION AND DOES NOT
ANTICIPATE THAT ANY SUCH ACTION WILL OCCUR.
THERE ARE NO BINDING GUIDELINES OR PROCEDURES FOR RESOLVING POTENTIAL
CONFLICTS OF INTEREST. FAILURE BY MANAGEMENT TO RESOLVE CONFLICTS OF INTEREST
IN FAVOR OF THE COMPANY COULD RESULT IN LIABILITY OF MANAGEMENT TO THE COMPANY.
HOWEVER, ANY ATTEMPT BY SHAREHOLDERS TO ENFORCE A LIABILITY OF MANAGEMENT TO THE
COMPANY WOULD MOST LIKELY BE PROHIBITIVELY EXPENSIVE AND TIME CONSUMING.
ITEM 6
EXECUTIVE COMPENSATION
NONE OF THE COMPANY'S OFFICERS AND/OR DIRECTORS RECEIVE ANY COMPENSATION
FOR THEIR RESPECTIVE SERVICES RENDERED TO THE COMPANY, NOR HAVE THEY RECEIVED
SUCH COMPENSATION IN THE PAST. AS OF THE DATE OF THIS REGISTRATION STATEMENT,
THE COMPANY HAS NO FUNDS AVAILABLE TO PAY OFFICERS OR DIRECTORS. FURTHER, NONE
OF THE OFFICERS OR DIRECTORS ARE ACCRUING ANY COMPENSATION PURSUANT TO ANY
AGREEMENT WITH THE COMPANY.
NO MEMBER OF MANAGEMENT OF THE COMPANY WILL RECEIVE ANY FINDERS FEE, EITHER
DIRECTLY OR INDIRECTLY, AS A RESULT OF THEIR RESPECTIVE EFFORTS TO IMPLEMENT THE
COMPANY'S BUSINESS PLAN OUTLINED HEREIN.
NO RETIREMENT, PENSION, PROFIT SHARING, STOCK OPTION OR INSURANCE PROGRAMS
OR OTHER SIMILAR PROGRAMS HAVE BEEN ADOPTED BY THE COMPANY FOR THE BENEFIT OF
ITS EMPLOYEES.
ITEM 7
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
ON JULY __, 2000 THE COMPANY ISSUED A TOTAL OF 1,000,000 SHARES OF COMMON
STOCK TO THE FOLLOWING PERSONS FOR A TOTAL OF $1,000 IN CASH:
NAME NUMBER OF TOTAL SHARES CONSIDERATION
Financial Freedom, Inc. 1,000,000 $1,000
THE BOARD OF DIRECTORS HAS PASSED A RESOLUTION WHICH CONTAINS A POLICY THAT
THE COMPANY WILL NOT SEEK AN ACQUISITION OR MERGER WITH ANY ENTITY IN WHICH ANY
OF THE COMPANY'S OFFICERS, DIRECTORS, PRINCIPAL SHAREHOLDERS OR THEIR AFFILIATES
OR ASSOCIATES SERVE AS OFFICER OR DIRECTOR OR HOLD ANY OWNERSHIP INTEREST.
MANAGEMENT IS NOT AWARE OF ANY CIRCUMSTANCES UNDER WHICH THIS POLICY THROUGH
THEIR OWN INITIATIVE MAY BE CHANGED.
THE PROPOSED BUSINESS ACTIVITIES DESCRIBED HEREIN CLASSIFY THE COMPANY AS A
"BLANK CHECK" COMPANY. SEE "GLOSSARY". THE SECURITIES AND EXCHANGE COMMISSION
AND MANY STATES HAVE ENACTED STATUTES, RULES AND REGULATIONS LIMITING THE SALE
OF SECURITIES OF BLANK CHECK COMPANIES.
MANAGEMENT DOES NOT INTEND TO UNDERTAKE ANY EFFORTS TO CAUSE A MARKET TO
DEVELOP IN THE COMPANY'S SECURITIES UNTIL SUCH TIME AS THE COMPANY HAS
SUCCESSFULLY IMPLEMENTED ITS BUSINESS PLAN DESCRIBED HEREIN. ACCORDINGLY, EACH
SHAREHOLDER OF THE COMPANY HAS EXECUTED AND DELIVERED A "LOCK-UP" LETTER
AGREEMENT, AFFIRMING THAT SUCH SHAREHOLDER SHALL NOT SELL SUCH SHAREHOLDER'S
RESPECTIVE SHARES OF THE COMPANY'S COMMON STOCK UNTIL SUCH TIME AS THE COMPANY
HAS SUCCESSFULLY CONSUMMATED A MERGER OR ACQUISITION AND THE COMPANY IS NO
LONGER CLASSIFIED AS A BLANK CHECK COMPANY. EACH SHAREHOLDER HAS PLACED THE
RESPECTIVE STOCK CERTIFICATE WITH THE COMPANY WHICH WILL NOT RELEASE THE
CERTIFICATES UNTIL SUCH TIME AS A MERGER OR ACQUISITION HAS BEEN SUCCESSFULLY
CONSUMMATED.
ITEM 8
DESCRIPTION OF SECURITIES.
THE AUTHORIZED CAPITAL STOCK OF THE COMPANY CONSISTS OF 10,000,000 SHARES
OF COMMON STOCK, PAR VALUE $.0001 PER SHARE. THE FOLLOWING STATEMENTS RELATING
TO THE CAPITAL STOCK ARE SUMMARIES AND DO NOT PURPORT TO BE COMPLETE. REFERENCE
IS MADE TO THE MORE DETAILED PROVISIONS OF, AND SUCH STATEMENTS ARE QUALIFIED IN
THEIR ENTIRETY BY REFERENCE TO, THE CERTIFICATE OF INCORPORATION AND THE
BY-LAWS, COPIES OF WHICH ARE FILED AS EXHIBITS TO THIS REGISTRATION STATEMENT.
COMMON STOCK
HOLDERS OF SHARES OF COMMON STOCK ARE ENTITLED TO ONE VOTE FOR EACH SHARE
ON ALL MATTERS TO BE VOTED ON BY THE STOCKHOLDERS. HOLDERS OF COMMON STOCK DO
NOT HAVE CUMULATIVE VOTING RIGHTS. HOLDERS OF COMMON STOCK ARE ENTITLED TO
SHARE RATABLY IN DIVIDENDS, IF ANY, AS MAY BE DECLARED FROM TIME TO TIME BY THE
BOARD OF DIRECTORS IN ITS DISCRETION FROM FUNDS LEGALLY AVAILABLE THEREFORE. IN
THE EVENT OF A LIQUIDATION, DISSOLUTION OR WINDING UP OF THE COMPANY, THE
HOLDERS OF COMMON STOCK ARE ENTITLED TO SHARE PRO RATA ALL ASSETS REMAINING
AFTER PAYMENT IN FULL OF ALL LIABILITIES. ALL OF THE OUTSTANDING SHARES OF
COMMON STOCK ARE, AND THE SHARES OF COMMON STOCK OFFERED BY THE COMPANY PURSUANT
TO THIS OFFERING WILL BE, WHEN ISSUED AND DELIVERED, FULLY PAID AND
NON-ASSESSABLE.
HOLDERS OF COMMON STOCK HAVE NO PREEMPTIVE RIGHTS TO PURCHASE THE COMPANY'S
COMMON STOCK. THERE ARE NO CONVERSION OR REDEMPTION RIGHTS OR SINKING FUND
PROVISIONS WITH RESPECT TO THE COMMON STOCK.
PREFERRED STOCK
THE COMPANY'S ARTICLES OF INCORPORATION AUTHORIZES THE ISSUANCE OF
10,000,000 SHARES OF PREFERRED STOCK, $.001 PAR VALUE PER SHARE, OF WHICH NO
SHARES HAVE BEEN ISSUED. THE BOARD OF DIRECTORS IS AUTHORIZED TO PROVIDE FOR
THE ISSUANCE OF SHARES OF PREFERRED STOCK IN SERIES AND, BY FILING A
CERTIFICATE PURSUANT TO THE APPLICABLE LAW OF COLORADO, TO ESTABLISH FROM TIME
TO TIME THE NUMBER OF SHARES TO BE INCLUDED IN EACH SUCH SERIES, AND TO FIX THE
DESIGNATION, POWERS, PREFERENCES AND RIGHTS OF THE SHARES OF EACH SUCH SERIES
AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF WITHOUT ANY FURTHER
VOTE OR ACTION BY THE SHAREHOLDERS.
ANY SHARES OF PREFERRED STOCK SO ISSUED WOULD HAVE PRIORITY OVER THE COMMON
STOCK WITH RESPECT TO DIVIDEND OR LIQUIDATION RIGHTS. ANY FUTURE ISSUANCE OF
PREFERRED STOCK MAY HAVE THE EFFECT OF DELAYING, DEFERRING OR PREVENTING A
CHANGE IN CONTROL OF THE COMPANY WITHOUT FURTHER ACTION BY THE SHAREHOLDERS AND
MAY ADVERSELY AFFECT THE VOTING AND OTHER RIGHTS OF THE HOLDERS OF COMMON STOCK.
AT PRESENT, THE COMPANY HAS NO PLANS TO ISSUE ANY PREFERRED STOCK NOR ADOPT ANY
SERIES, PREFERENCES OR OTHER CLASSIFICATION OF PREFERRED STOCK.
THE ISSUANCE OF SHARES OF PREFERRED STOCK, OR THE ISSUANCE OF RIGHTS TO
PURCHASE SUCH SHARES, COULD BE USED TO DISCOURAGE AN UNSOLICITED ACQUISITION
PROPOSAL. FOR INSTANCE, THE ISSUANCE OF A SERIES OF PREFERRED STOCK MIGHT
IMPEDE A BUSINESS COMBINATION BY INCLUDING CLASS VOTING RIGHTS THAT WOULD ENABLE
THE HOLDER TO BLOCK SUCH A TRANSACTION, OR FACILITATE A BUSINESS COMBINATION BY
INCLUDING VOTING RIGHTS THAT WOULD PROVIDE A REQUIRED PERCENTAGE VOTE OF THE
STOCKHOLDERS. IN ADDITION, UNDER CERTAIN CIRCUMSTANCES, THE ISSUANCE OF
PREFERRED STOCK COULD ADVERSELY AFFECT THE VOTING POWER OF THE HOLDERS OF THE
COMMON STOCK. ALTHOUGH THE BOARD OF DIRECTORS IS REQUIRED TO MAKE ANY
DETERMINATION TO ISSUE SUCH STOCK BASED ON ITS JUDGMENT AS TO THE BEST INTERESTS
OF THE STOCKHOLDERS OF THE COMPANY, THE BOARD OF DIRECTORS COULD ACT IN A MANNER
THAT WOULD DISCOURAGE AN ACQUISITION ATTEMPT OR OTHER TRANSACTION THAT SOME, OR
A MAJORITY, OF THE STOCKHOLDERS MIGHT BELIEVE TO BE IN THEIR BEST INTERESTS OR
IN WHICH STOCKHOLDERS MIGHT RECEIVE A PREMIUM FOR THEIR STOCK OVER THE THEN
MARKET PRICE OF SUCH STOCK. THE BOARD OF DIRECTORS DOES NOT AT PRESENT INTEND
TO SEEK STOCKHOLDER APPROVAL PRIOR TO ANY ISSUANCE OF CURRENTLY AUTHORIZED
STOCK, UNLESS OTHERWISE REQUIRED BY LAW OR STOCK EXCHANGE RULES. THE COMPANY
HAS NO PRESENT PLANS TO ISSUE ANY PREFERRED STOCK.
DIVIDENDS
THE COMPANY DOES NOT EXPECT TO PAY DIVIDENDS. DIVIDENDS, IF ANY, WILL BE
CONTINGENT UPON THE COMPANY'S REVENUES AND EARNINGS, IF ANY, CAPITAL
REQUIREMENTS AND FINANCIAL CONDITIONS. THE PAYMENT OF DIVIDENDS, IF ANY, WILL
BE WITHIN THE DISCRETION OF THE COMPANY'S BOARD OF DIRECTORS. THE COMPANY
PRESENTLY INTENDS TO RETAIN ALL EARNINGS, IF ANY, FOR USE IN ITS BUSINESS
OPERATIONS AND ACCORDINGLY, THE BOARD OF DIRECTORS DOES NOT ANTICIPATE DECLARING
ANY DIVIDENDS IN THE FORESEEABLE FUTURE.
GLOSSARY
"BLANK CHECK" COMPANY AS DEFINED IN SECTION 7(B)(3) OF THE SECURITIES ACT, A
"BLANK CHECK" COMPANY IS A DEVELOPMENT STAGE COMPANY THAT HAS NO SPECIFIC
BUSINESS PLAN OR PURPOSE OR HAS INDICATED THAT ITS BUSINESS PLAN IS TO
ENGAGE IN A MERGER OR ACQUISITION WITH AN UNIDENTIFIED COMPANY OR COMPANIES AND
IS ISSUING "PENNY STOCK" SECURITIES AS DEFINED IN RULE 3A51-1 OF THE EXCHANGE
ACT.
THE COMPANY DETERMINATION, INC, THE COMPANY WHOSE COMMON STOCK IS
THE SUBJECT OF THIS REGISTRATION STATEMENT.
EXCHANGE ACT THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
"PENNY STOCK" SECURITY AS DEFINED IN RULE 3A51-1 OF THE EXCHANGE ACT, A
"PENNY STOCK" SECURITY IS ANY EQUITY SECURITY OTHER THAN A SECURITY (I) THAT IS
A REPORTED SECURITY (II) THAT IS ISSUED BY AN INVESTMENT COMPANY (III) THAT IS A
PUT OR CALL ISSUED BY THE OPTION CLEARING CORPORATION; (IV) THAT HAS A PRICE OF
$5.00 OR MORE (EXCEPT FOR PURPOSES OF RULE 419 OF THE SECURITIES ACT); (V) THAT
IS REGISTERED ON A NATIONAL SECURITIES EXCHANGE; (VI) THAT IS AUTHORIZED FOR
QUOTATION ON THE NASDAQ STOCK MARKET, UNLESS OTHER PROVISIONS OF RULE 3A51-1
ARE NOT SATISFIED; OR (VII) THAT IS ISSUED BY AN ISSUER WITH (A) NET TANGIBLE
ASSETS IN EXCESS OF $2,000,000, IF IN CONTINUOUS OPERATION FOR MORE THAN THREE
YEARS OR $5,000,000 IF IN OPERATION FOR LESS THAN THREE YEARS OR (B) AVERAGE
REVENUE OF AT LEAST $6,000,000 FOR THE LAST THREE YEARS.
FINANCIAL INDEPENDENCE, INC. FINANCIAL INDEPENDENCE, INC., A PRIVATE COMPANY
A PORTION OF WHICH IS OWNED BY MANAGEMENT OF THE COMPANY. FINANCIAL
INDEPENDENCE, INC. HAS PURCHASED 1,000,000 SHARES OF THE COMPANY'S COMMON STOCK.
SECURITIES ACT THE SECURITIES ACT OF 1933, AS AMENDED.
SMALL BUSINESS ISSUER AS DEFINED IN RULE 12B-2 OF THE EXCHANGE ACT, A "SMALL
BUSINESS ISSUER" IS AN ENTITY (I) WHICH HAS REVENUES OF LESS THAN $25,000,000
(II) WHOSE PUBLIC FLOAT (THE OUTSTANDING SECURITIES NOT HELD BY AFFILIATES) HAS
A VALUE OF LESS THAN $25,000,000 (III) WHICH IS A UNITED STATES OR CANADIAN
ISSUER (IV) WHICH IS NOT AN INVESTMENT COMPANY AND (V) IF A MAJORITY-OWNED
SUBSIDIARY, WHOSE PARENT CORPORATION IS ALSO A SMALL BUSINESS ISSUER.
PART II
ITEM 1
MARKET PRICE FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
THERE IS NO TRADING MARKET FOR THE COMPANY'S COMMON STOCK AT PRESENT AND
THERE HAS BEEN NO TRADING MARKET TO DATE. THERE IS NO ASSURANCE THAT A TRADING
MARKET WILL EVER DEVELOP OR, IF SUCH A MARKET DOES DEVELOP, THAT IT WILL
CONTINUE.
(A) MARKET PRICE. THE COMPANY'S COMMON STOCK IS NOT QUOTED AT THE PRESENT
TIME.
THE SECURITIES AND EXCHANGE COMMISSION HAS ADOPTED RULE 15G-9 WHICH ESTABLISHED
THE DEFINITION OF A "PENNY STOCK," FOR PURPOSES RELEVANT TO THE COMPANY, AS ANY
EQUITY SECURITY THAT HAS A MARKET PRICE OF LESS THAN $5.00 PER SHARE OR WITH AN
EXERCISE PRICE OF LESS THAN $5.00 PER SHARE, SUBJECT TO CERTAIN EXCEPTIONS. FOR
ANY TRANSACTION INVOLVING A PENNY STOCK, UNLESS EXEMPT, THE RULES REQUIRE: (I)
THAT A BROKER OR DEALER APPROVE A PERSON'S ACCOUNT FOR TRANSACTIONS IN PENNY
STOCKS AND (II) THE BROKER OR DEALER RECEIVE FROM THE INVESTOR A WRITTEN
AGREEMENT TO THE TRANSACTION, SETTING FORTH THE IDENTITY AND QUANTITY OF THE
PENNY STOCK TO BE PURCHASED. IN ORDER TO APPROVE A PERSON'S ACCOUNT FOR
TRANSACTIONS IN PENNY STOCKS, THE BROKER OR DEALER MUST (I) OBTAIN FINANCIAL
INFORMATION AND INVESTMENT EXPERIENCE AND OBJECTIVES OF THE PERSON; AND (II)
MAKE A REASONABLE DETERMINATION THAT THE TRANSACTIONS IN PENNY STOCKS ARE
SUITABLE FOR THAT PERSON AND THAT PERSON HAS SUFFICIENT KNOWLEDGE AND EXPERIENCE
IN FINANCIAL MATTERS TO BE CAPABLE OF EVALUATING THE RISKS OF TRANSACTIONS IN
PENNY STOCKS. THE BROKER OR DEALER MUST ALSO DELIVER, PRIOR TO ANY TRANSACTION
IN A PENNY STOCK, A DISCLOSURE SCHEDULE PREPARED BY THE COMMISSION RELATING TO
THE PENNY STOCK MARKET, WHICH, IN HIGHLIGHT FORM, (I) SETS FORTH THE BASIS ON
WHICH THE BROKER OR DEALER MADE THE SUITABILITY DETERMINATION AND (II) THAT THE
BROKER OR DEALER RECEIVED A SIGNED, WRITTEN AGREEMENT FROM THE INVESTOR PRIOR TO
THE TRANSACTION. DISCLOSURE ALSO HAS TO BE MADE ABOUT THE RISKS OF INVESTING IN
PENNY STOCKS IN BOTH PUBLIC OFFERINGS AND IN SECONDARY TRADING, AND ABOUT
COMMISSIONS PAYABLE TO BOTH THE BROKER-DEALER AND THE REGISTERED REPRESENTATIVE,
CURRENT QUOTATIONS FOR THE SECURITIES AND THE RIGHTS AND REMEDIES AVAILABLE TO
AN INVESTOR IN CASES OF FRAUD IN PENNY STOCK TRANSACTIONS. FINALLY, MONTHLY
STATEMENTS HAVE TO BE SENT DISCLOSING RECENT PRICE INFORMATION FOR THE PENNY
STOCK HELD IN THE ACCOUNT AND INFORMATION ON THE LIMITED MARKET IN PENNY STOCKS.
THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (THE "NASD"), WHICH
ADMINISTERS THE NASDAQ STOCK MARKET, HAS RECENTLY ANNOUNCED CHANGES IN THE
CRITERIA FOR INITIAL AND CONTINUED ELIGIBILITY FOR LISTING ON THE NASDAQ STOCK
MARKET. IN ORDER TO QUALIFY FOR LISTING ON THE NASDAQ SMALLCAP MARKET, A
COMPANY MUST HAVE AT LEAST (I) NET TANGIBLE ASSETS OF $4,000,000 OR MARKET
CAPITALIZATION OF $50,000,000 OR NET INCOME FOR TWO OF THE LAST THREE YEARS OF
$750,000; (II) PUBLIC FLOAT OF 1,000,000 SHARES WITH A MARKET VALUE OF
$5,000,000; (III) A BID PRICE OF $4.00; (IV) THREE MARKET MAKERS; (V) 300
SHAREHOLDERS AND (VI) AN OPERATING HISTORY OF ONE YEAR OR, IF LESS THAN ONE
YEAR, $50,000,000 IN MARKET CAPITALIZATION. FOR CONTINUED LISTING ON THE NASDAQ
SMALLCAP MARKET, A COMPANY MUST HAVE AT LEAST (I) NET TANGIBLE ASSETS OF
$2,000,000 OR MARKET CAPITALIZATION OF $35,000,000 OR NET INCOME FOR TWO OF THE
LAST THREE YEARS OF $500,000; (II) A PUBLIC FLOAT OF 500,000 SHARES WITH A
MARKET VALUE OF $1,000,000; (III) A BID PRICE OF $1.00; (IV) TWO MARKET MAKERS;
AND (V) 300 SHAREHOLDERS.
THERE CAN BE NO ASSURANCES THAT, UPON A SUCCESSFUL MERGER OR ACQUISITION,
THE COMPANY WILL QUALIFY ITS SECURITIES FOR LISTING ON THE NASDAQ SMALLCAP
MARKET OR A NATIONAL OR REGIONAL EXCHANGE, OR BE ABLE TO MAINTAIN THE
MAINTENANCE CRITERIA NECESSARY TO INSURE 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. IN SUCH EVENTS, TRADING, IF ANY, IN THE COMPANY'S
SECURITIES MAY THEN CONTINUE IN THE OVER-THE-COUNTER MARKET. IN SUCH CASE, 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.
(B) HOLDERS. THERE IS ONE HOLDER OF THE COMPANY'S COMMON STOCK. ON JULY
15, 2000 THE COMPANY ISSUED 1,000,000 OF ITS COMMON SHARES TO THIS PERSON FOR
CASH AT $.001 PER SHARE FOR A TOTAL PRICE OF $1,000. ALL OF THE ISSUED AND
OUTSTANDING SHARES OF THE COMPANY'S COMMON STOCK WERE ISSUED IN ACCORDANCE WITH
THE EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 4(2) OF THE SECURITIES ACT
OF 1933 AND RULE 506 PROMULGATED THEREUNDER.
(C) DIVIDENDS. THE COMPANY HAS NOT PAID ANY DIVIDENDS TO DATE, AND HAS NO
PLANS TO DO SO IN THE IMMEDIATE FUTURE.
ITEM 2
LEGAL PROCEEDINGS
THERE IS NO LITIGATION PENDING OR THREATENED BY OR AGAINST THE COMPANY.
ITEM 3
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
THE COMPANY HAS NOT CHANGED ACCOUNTANTS SINCE ITS FORMATION AND THERE ARE
NO DISAGREEMENTS WITH THE FINDINGS OF SAID ACCOUNTANTS.
ITEM 4
RECENT SALES OF UNREGISTERED SECURITIES
DURING THE PAST THREE YEARS, THE COMPANY HAS SOLD SECURITIES WHICH WERE NOT
REGISTERED AS FOLLOWS:
NUMBER OF
DATE NAME SHARES CONSIDERATION
July 15, 2000 Financial Freedom, Inc. 1,000,000 $1,000.00
(1)
(1) THE 1,000,000 SHARES OF COMMON STOCK PURCHASED BY FINANCIAL
INDEPENDENCE, INC. WERE PURCHASED PURSUANT TO A PROMISSORY NOTE WHICH PROVIDES
FOR THE PAYMENT OF THE PURCHASE PRICE OVER A PERIOD OF ONE YEAR WITH AN INTEREST
RATE OF SEVEN PERCENT PER ANNUM. THE NOTE MUST BE PAID IN FULL UPON DEMAND
PURSUANT TO THE CONSUMMATION OF A BUSINESS TRANSACTION FOR THE SALE OF THE
COMPANY.
WITH RESPECT TO THE SALES MADE, THE COMPANY RELIED ON SECTION 4(2) OF THE
SECURITIES ACT OF 1933, AS AMENDED AND RULE 506 PROMULGATED THEREUNDER.
ALL THE SHAREHOLDERS OF THE COMPANY HAVE EXECUTED AND DELIVERED A "LOCK-UP"
LETTER AGREEMENT WHICH PROVIDES THAT EACH SUCH SHAREHOLDER SHALL NOT SELL THE
SECURITIES EXCEPT IN CONNECTION WITH OR FOLLOWING THE CONSUMMATION OF A MERGER
OR ACQUISITION. FURTHER, EACH SHAREHOLDER HAS PLACED ITS STOCK CERTIFICATES
WITH THE COMPANY. ANY LIQUIDATION BY THE CURRENT SHAREHOLDERS AFTER THE RELEASE
FROM THE "LOCK-UP" SELLING LIMITATION PERIOD MAY HAVE A DEPRESSIVE EFFECT UPON
THE TRADING PRICE OF THE COMPANY'S SECURITIES IN ANY FUTURE MARKET WHICH MAY
DEVELOP.
ITEM 5
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
THE CERTIFICATE OF INCORPORATION AND THE BY-LAWS OF THE COMPANY PROVIDE FOR
INDEMNIFICATION OF DIRECTORS AND OFFICERS TO THE FULLEST EXTENT PERMITTED BY THE
CORPORATION LAW OF THE STATE OF COLORADO.
THE CORPORATION LAW OF THE STATE OF COLORADO PROVIDES THAT A CERTIFICATE OF
INCORPORATION MAY CONTAIN A PROVISION ELIMINATING THE PERSONAL LIABILITY OF A
DIRECTOR TO THE CORPORATION OR ITS STOCKHOLDERS FOR MONETARY DAMAGES FOR BREACH
OF FIDUCIARY DUTY AS A DIRECTOR PROVIDED THAT SUCH PROVISION SHALL NOT ELIMINATE
OR LIMIT THE LIABILITY OF A DIRECTOR (I) FOR ANY BREACH OF THE DIRECTOR'S DUTY
OF LOYALTY TO THE CORPORATION OR ITS STOCKHOLDERS, (II) FOR ACTS OR OMISSIONS
NOT IN GOOD FAITH OR WHICH INVOLVE INTENTIONAL MISCONDUCT OR A KNOWING VIOLATION
OF LAW, (III) UNDER SECTION 174 (RELATING TO LIABILITY FOR UNAUTHORIZED
ACQUISITIONS OR REDEMPTIONS OF, OR DIVIDENDS ON, CAPITAL STOCK) OF THE
CORPORATION LAW OF THE STATE OF COLORADO, OR (IV) FOR ANY TRANSACTION FROM WHICH
THE DIRECTOR DERIVED AN IMPROPER PERSONAL BENEFIT. THE COMPANY'S CERTIFICATE OF
INCORPORATION CONTAINS SUCH A PROVISION.
PART F/S
FINANCIAL STATEMENTS.
ATTACHED ARE AUDITED FINANCIAL STATEMENTS FOR THE COMPANY FOR THE PERIOD
ENDED JULY 15, 2000. THE FOLLOWING FINANCIAL STATEMENTS ARE ATTACHED TO THIS
REPORT AND FILED AS A PART THEREOF.
1) TABLE OF CONTENTS - FINANCIAL STATEMENTS
2) REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
3) BALANCE SHEET
4) STOCKHOLDERS' EQUITY
PART III
ITEM 1
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION LOCATION
(2) ARTICLES OF INCORPORATION AND BY-LAWS:
2.1 ARTICLES OF INCORPORATION
2.2 BY-LAWS
(3) INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS:
3.1 LOCK-UP AGREEMENTS
(10)(A) CONSENTS - EXPERTS:
10.1 CONSENT OF ACCOUNTANTS
____
<PAGE>
INDEX TO FINANCIAL STATEMENTS
DETERMINATION, INC
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
WITH
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS F-2
FINANCIAL STATEMENTS:
ASSETS F-3
STOCKHOLDERS' EQUITY F-3
J. SCOTT WHARTON
755 HIGHWAY 105, SUITE 2C
PALMER LAKE, CO 80133
(719) 481-8447
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
DETERMINATION, INC..
I HAVE AUDITED THE ACCOMPANYING BALANCE SHEET OF DETERMINATION, INCAS OF
JULY 15, 2000. THIS FINANCIA1 STATEMENT IS THE RESPONSIBILITY OF DETERMINATION,
INC'S MANAGEMENT. MY RESPONSIBILITY IS TO EXPRESS AN OPINION ON THIS FINANCIAL
STATEMENT BASED ON MY AUDIT.
I CONDUCTED MY AUDIT IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING
STANDARDS. THOSE STANDARDS REQUIRE THAT I PLAN AND PERFORM THE AUDIT TO OBTAIN
REASONABLE ASSURANCE ABOUT WHETHER THE FINANCIAL STATEMENT IS 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.
I BELIEVE THAT MY AUDIT PROVIDES A REASONABLE BASIS FOR MY OPINION.
IN MY OPINION, THE FINANCIAL STATEMENT REFERRED TO ABOVE PRESENTS FAIRLY,
IN ALL MATERIALS RESPECTS, THE FINANCIAL POSITION OF DETERMINATION, INCAS OF
JULY 15, 2000, IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
J. SCOTT WHARTON, CPA, CFP
JULY 15, 2000
<PAGE>
DETERMINATION, INC
BALANCE SHEET
JULY 15, 2000
ASSETS
CASH $1,000.00
TOTAL ASSETS $1,000.00
SHAREHOLDER EQUITY
COMMON STOCK (1,000,000 SHARES $.001 PAR VALUE)
$1,000.00
ADDITIONAL PAID IN CAPITAL $ -0-
TOTAL EQUITY $1,000.00 (1)
(2) THE 1,000,000 SHARES OF COMMON STOCK PURCHASED BY FINANCIAL
INDEPENDENCE, INC. WERE PURCHASED PURSUANT TO A PROMISSORY NOTE WHICH PROVIDES
FOR THE PAYMENT OF THE PURCHASE PRICE OVER A PERIOD OF ONE YEAR WITH AN INTEREST
RATE OF SEVEN PERCENT PER ANNUM. THE NOTE MUST BE PAID IN FULL UPON DEMAND
PURSUANT TO THE CONSUMMATION OF A BUSINESS TRANSACTION FOR THE SALE OF THE
COMPANY.
SEE AUDITOR'S REPORT
SIGNATURES
IN ACCORDANCE WITH SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT CAUSED THIS AMENDMENT TO ITS REGISTRATION STATEMENT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
DETERMINATION, INC,
A COLORADO CORPORATION
BY: /S/ LEE T. DURAN
LEE T. DURAN, PRESIDENT
DATE: JULY ____, 2000
<PAGE>
EXHIBIT 2.1
ARTICLES OF INCORPORATION
OF
DETERMINATION, INC
THE UNDERSIGNED (WHO, IF A NATURAL PERSON, IS EIGHTEEN YEARS OF AGE OR
OLDER), ACTING AS THE INCORPORATOR OF A CORPORATION TO BE INCORPORATED UNDER THE
LAWS OF THE STATE OF COLORADO, ADOPTS THESE ARTICLES OF INCORPORATION.
ARTICLE I
NAME
THE NAME OF THE CORPORATION IS DETERMINATION, INC
ARTICLE II
AUTHORIZED CAPITAL
THE AGGREGATE NUMBER OF SHARES OF STOCK WHICH THE CORPORATION SHALL HAVE
THE AUTHORITY TO ISSUE IS TWENTY MILLION (20,000,000) SHARES, CONSISTING OF TEN
MILLION (10,000,000) SHARES OF COMMON STOCK HAVING A PAR VALUE OF $.001 PER
SHARE AND TEN MILLION (10,000,000) SHARES OF PREFERRED STOCK HAVING A PAR VALUE
OF $.001 PER SHARE.
2.1. PREFERRED STOCK. THE BOARD OF DIRECTORS IS AUTHORIZED, SUBJECT TO THE
LIMITATIONS PRESCRIBED BY LAW AND THE PROVISIONS OF THIS ARTICLE, TO PROVIDE FOR
THE ISSUANCE OF THE SHARES OF PREFERRED STOCK IN SERIES, AND BY FILING A
CERTIFICATE PURSUANT TO THE APPLICABLE LAW OF THE STATE OF COLORADO, TO
ESTABLISH FROM TIME TO TIME THE NUMBER OF SHARES TO BE INCLUDED IN EACH SUCH
SERIES AND TO FIX THE DESIGNATION, POWERS, PREFERENCES AND RIGHTS OF THE
SHARES OF EACH SUCH
SERIES AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF.
2.1.1 THE AUTHORITY OF THE BOARD WITH RESPECT TO EACH SERIES SHALL
INCLUDE, BUT NOT BE LIMITED TO, DETERMINATION OF THE FOLLOWING:
(A) THE NUMBER OF SHARES CONSTITUTING THAT SERIES AND THE DISTINCTIVE
DESIGNATION OF THAT SERIES;
(B) THE DIVIDEND RATE ON THE SHARES OF THAT SERIES, WHETHER DIVIDENDS
SHALL BE CUMULATIVE, AND IF SO, FROM WHICH DATE OR DATES, AND THE RELATIVE
RIGHTS OF PRIORITY, IF ANY, OF PAYMENT OF DIVIDENDS ON SHARES OF THAT SERIES;
(C) WHETHER THAT SERIES SHALL HAVE VOTING RIGHTS, IN ADDITION TO THE
VOTING RIGHTS PROVIDED BY LAW, AND IF SO, THE TERMS OF SUCH VOTING RIGHTS;
(D) WHETHER THAT SERIES SHALL HAVE CONVERSION PRIVILEGES AND, IF SO,
THE TERMS AND CONDITIONS OF SUCH CONVERSION, INCLUDING PROVISION FOR ADJUSTMENT
OF THE CONVERSION RATE IN SUCH EVENTS AS THE BOARD OF DIRECTORS SHALL DETERMINE;
(E) WHETHER OR NOT THE SHARES OF THAT SERIES SHALL BE REDEEMABLE AND,
IF SO, THE TERMS AND CONDITIONS OF SUCH REDEMPTION, INCLUDING THE DATE OR DATES
UPON OR AFTER WHICH THEY SHALL BE REDEEMABLE AND THE AMOUNT PER SHARE PAYABLE IN
CASE OF REDEMPTION, WHICH AMOUNT MAY VARY UNDER DIFFERENT CONDITIONS AND AT
DIFFERENT REDEMPTION DATES;
(F) WHETHER THAT SERIES SHALL HAVE A SINKING FUND FOR THE REDEMPTION OR
PURCHASE OF SHARES OF THAT SERIES AND, IF SO, THE TERMS AND AMOUNT OF SUCH
SINKING FUND;
(G) THE RIGHTS OF THE SHARES OF THAT SERIES IN THE EVENT OF VOLUNTARY
OR INVOLUNTARY LIQUIDATION, DISSOLUTION OR WINDING UP OF THE CORPORATION, AND
THE RELATIVE RIGHTS OF PRIORITY, IF ANY, OF PAYMENT OF SHARES OF THAT SERIES;
AND
(H) ANY OTHER RIGHTS, PREFERENCES AND LIMITATIONS OF THAT SERIES.
2.1.2 DIVIDENDS ON OUTSTANDING SHARES OF PREFERRED STOCK SHALL BE PAID OR
DECLARED AND SET APART FOR PAYMENT, BEFORE ANY DIVIDENDS SHALL BE PAID OR
DECLARED AND SET APART FOR PAYMENT ON COMMON STOCK WITH RESPECT TO THE SAME
DIVIDEND PERIOD.
2.1.3 IF UPON ANY VOLUNTARY OR INVOLUNTARY LIQUIDATION, DISSOLUTION OR
WINDING UP OF THE CORPORATION, THE ASSETS AVAILABLE FOR DISTRIBUTION TO HOLDERS
OF SHARES OF PREFERRED STOCK OF ALL SERIES SHALL BE INSUFFICIENT TO PAY SUCH
HOLDERS THE FULL PREFERENTIAL AMOUNT TO WHICH THEY ARE ENTITLED, THEN SUCH
ASSETS SHALL BE DISTRIBUTED RATABLY AMONG THE SHARES OF ALL SERIES OF PREFERRED
STOCK IN ACCORDANCE WITH THE RESPECTIVE PREFERENTIAL AMOUNTS (INCLUDING UNPAID
CUMULATIVE DIVIDENDS, IF ANY) PAYABLE WITH RESPECT THERETO.
2.1.4 UNLESS OTHERWISE PROVIDED IN ANY RESOLUTION OF THE BOARD OF
DIRECTORS PROVIDING FOR THE ISSUANCE OF ANY PARTICULAR SERIES OF PREFERRED
STOCK, NO HOLDER OF PREFERRED STOCK SHALL HAVE ANY PRE-EMPTIVE RIGHT AS SUCH
HOLDER TO SUBSCRIBE FOR, PURCHASE OR RECEIVE ANY PART OF ANY NEW OR ADDITIONAL
ISSUE OF CAPITAL STOCK OF ANY CLASS OR SERIES, INCLUDING UNISSUED AND TREASURY
STOCK, OR OBLIGATIONS OR OTHER SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR
CAPITAL STOCK OF ANY CLASS OR SERIES, OR WARRANTS OR OTHER INSTRUMENTS
EVIDENCING RIGHTS OR OPTIONS TO SUBSCRIBE FOR, PURCHASE OR RECEIVE ANY CAPITAL
STOCK OF ANY CLASS OR SERIES, WHETHER NOW OR HEREAFTER AUTHORIZED AND WHETHER
ISSUED FOR CASH OR OTHER CONSIDERATION OR BY WAY OF DIVIDEND.
2.2. COMMON STOCK.
2.2.1 SUBJECT TO THE PRIOR AND SUPERIOR RIGHTS OF THE PREFERRED STOCK
AND ON THE CONDITIONS SET FORTH IN THE FOREGOING PARTS OF THIS ARTICLE OR IN ANY
RESOLUTION OF THE BOARD OF DIRECTORS PROVIDING FOR THE ISSUANCE OF ANY
PARTICULAR SERIES OF PREFERRED STOCK, AND NOT OTHERWISE, SUCH DIVIDENDS (PAYABLE
IN CASH, STOCK OR OTHERWISE) AS MAY BE DETERMINED BY THE BOARD OF DIRECTORS MAY
BE DECLARED AND PAID ON THE COMMON STOCK FROM TIME TO TIME OUT OF ANY FUNDS
LEGALLY AVAILABLE THEREFOR.
2.2.2 EXCEPT AS OTHERWISE PROVIDED BY LAW, BY THIS CERTIFICATE OF
INCORPORATION OR BY THE RESOLUTION OR RESOLUTIONS OF THE BOARD OF DIRECTORS
PROVIDING FOR THE ISSUE OF ANY SERIES OF THE PREFERRED STOCK, THE COMMON STOCK
SHALL HAVE THE EXCLUSIVE RIGHT TO VOTE FOR THE ELECTION OF DIRECTORS AND FOR ALL
OTHER PURPOSES, EACH HOLDER OF THE COMMON STOCK BEING ENTITLED TO ONE VOTE FOR
EACH SHARE HELD.
2.2.3 UPON ANY LIQUIDATION, DISSOLUTION OR WINDING UP OF THE
CORPORATION, VOLUNTARY OR INVOLUNTARY, AND AFTER THE HOLDERS OF THE PREFERRED
STOCK OF EACH SERIES SHALL HAVE BEEN PAID IN FULL THE AMOUNT TO WHICH THEY
RESPECTIVELY SHALL BE ENTITLED, OR A SUM SUFFICIENT FOR SUCH PAYMENTS IN ASSETS
OF THE CORPORATION SHALL BE DISTRIBUTED PRO RATA TO THE HOLDERS OF THE COMMON
STOCK IN ACCORDANCE WITH THEIR RESPECTIVE RIGHTS AND INTERESTS, TO THE EXCLUSION
OF THE HOLDERS OF THE PREFERRED STOCK.
ARTICLE III
PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF
REDEEMABLE, NON-VOTING, CONVERTIBLE
PREFERRED STOCK, SERIES 2000-1
3.1. DESIGNATION. THIS ARTICLE III SHALL PROVIDE FOR A SINGLE SERIES
OF PREFERRED STOCK, THE DESIGNATION OF WHICH SHALL BE "REDEEMABLE,
NON-VOTING, CONVERTIBLE PREFERRED STOCK-SERIES 2000-1" (HEREINAFTER THE
"PREFERRED SHARES" OR THE "PREFERRED STOCK") AND THE NUMBER OF AUTHORIZED
SHARES CONSTITUTING THE PREFERRED STOCK IS 250,000. THE NUMBER OF
AUTHORIZED PREFERRED SHARES MAY BE REDUCED OR INCREASED BY A FURTHER
RESOLUTION DULY ADOPTED BY THE BOARD OF DIRECTORS OF THE CORPORATION AND
BY THE FILING OF AN AMENDMENT TO THE
CORPORATION'S ARTICLES OF INCORPORATION PURSUANT TO THE PROVISIONS OF THE
COLORADO BUSINESS CORPORATION ACT STATING THAT SUCH REDUCTION OR INCREASE
HAS BEEN SO AUTHORIZED.
3.2. VOTING. EXCEPT AS PROVIDED HEREIN OR OTHERWISE EXPRESSLY REQUIRED BY
THE LAWS OF THE STATE OF COLORADO, THE HOLDERS OF THE PREFERRED SHARES SHALL
HAVE NO VOTING RIGHTS AND SHALL NOT BE ENTITLED TO NOTICE OF MEETINGS OF
SHAREHOLDERS, AND THE EXCLUSIVE VOTING POWER SHALL BE VESTED IN THE HOLDERS OF
THE SHARES OF THE CORPORATION'S COMMON STOCK, $.001 PAR VALUE PER SHARE (THE
"COMMON STOCK"), AND/OR IN ANY OTHER SERIES OF THE CORPORATION'S PREFERRED STOCK
NOW OR AT ANY TIME HEREAFTER ISSUED AND OUTSTANDING HAVING VOTING RIGHTS.
3.2.1 MEETINGS. WHENEVER HOLDERS OF THE PREFERRED STOCK ARE ENTITLED TO
VOTE AS PROVIDED HEREIN, THE CORPORATION SHALL CALL A SPECIAL MEETING OF HOLDERS
OF THE PREFERRED STOCK UPON NOT LESS THAN TEN NOR MORE THAN 60 DAYS NOTICE TO
SUCH HOLDERS. THE CORPORATION SHALL ALSO CALL A SPECIAL MEETING OF SUCH HOLDERS
UPON THE REQUEST MADE BY ANY HOLDER(S) OF TEN PERCENT OR MORE OF THE NUMBER OF
OUTSTANDING PREFERRED SHARES, IN THE EVENT THE MATTER TO BE VOTED ON SHALL BE
SUBJECT TO ANY LAWS, RULES OR REGULATIONS WITH RESPECT TO THE SOLICITATION OF
PROXIES OR OTHERWISE, THE HOLDERS OF THE PREFERRED STOCK AGREE TO TIMELY PROVIDE
THE CORPORATION WITH SUCH INFORMATION AS IT SHALL REASONABLY REQUIRE TO COMPLY
THEREWITH.
3.2.2 QUORUM. THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF
PREFERRED STOCK, PRESENT IN PERSON OR BY PROXY, SHALL CONSTITUTE A QUORUM FOR
ALL MEETINGS OF PREFERRED STOCKHOLDERS.
3.2.3 VOTING RIGHTS. UNLESS OTHERWISE REQUIRED BY LAW, ACTION ON A
MATTER REQUIRED TO BE VOTED UPON BY THE HOLDERS OF THE PREFERRED STOCK SHALL BE
APPROVED IF A QUORUM EXISTS AND IF THE VOTES CAST FAVORING THE ACTION EXCEED THE
VOTES CAST OPPOSING THE ACTION. IF ANY CORPORATE ACTION SHALL REQUIRE A VOTE OF
THE HOLDERS OF THE PREFERRED SHARES OTHER THAN AS A CLASS, THE PREFERRED SHARES
SHALL VOTE AS A GROUP WITH ALL OTHER SHARES OF CAPITAL STOCK HAVING VOTING
RIGHTS. THE HOLDERS OF THE PREFERRED STOCK MAY ALSO ACT BY UNANIMOUS WRITTEN
CONSENT, SIGNED BY ALL SUCH HOLDERS, WITHOUT A MEETING.
3.3. REDEMPTION.
3.3.1 VOLUNTARY REDEMPTION. EXCEPT AS PROVIDED HEREIN TO THE CONTRARY
AND SUBJECT TO REGULATORY REQUIREMENTS, THE CORPORATION SHALL HAVE THE RIGHT TO
REDEEM THE PREFERRED STOCK AT ANY TIME AND FROM TIME TO TIME IN WHOLE OR IN PART
ON OR AFTER JANUARY 1, 2005.
3.3.2 REDEMPTION PRICE. THE REDEMPTION PRICE FOR EACH SHARE OF
PREFERRED STOCK SHALL BE $100.00 (THE "REDEMPTION PRICE"). IN THE EVENT OF A
REDEMPTION OF ONLY A PART OF THE OUTSTANDING PREFERRED STOCK, THE CORPORATION
SHALL EFFECT SUCH REDEMPTION RATABLY ACCORDING TO THE NUMBER OF SHARES HELD BY
EACH HOLDER OF THE PREFERRED STOCK.
3.3.3 REDEMPTION NOTICE. AT LEAST TEN AND NOT MORE THAN 60 DAYS PRIOR TO
THE DATE FIXED FOR ANY SUCH REDEMPTION OF THE PREFERRED STOCK (THE "REDEMPTION
DATE"), WRITTEN NOTICE (THE "REDEMPTION NOTICE") SHALL BE MAILED, POSTAGE
PREPAID, TO EACH HOLDER OF RECORD OF THE PREFERRED STOCK AT HIS OR HER POST
OFFICE ADDRESS LAST SHOWN ON THE RECORDS OF THE CORPORATION. THE REDEMPTION
NOTICE SHALL STATE:
(A) WHETHER ALL OR LESS THAN ALL OF THE OUTSTANDING SHARES OF PREFERRED
STOCK ARE TO BE REDEEMED AND THE TOTAL NUMBER OF SHARES BEING REDEEMED.
(B) THE NUMBER OF SHARES OF PREFERRED STOCK HELD BY THE HOLDER THAT THE
CORPORATION INTENDS TO REDEEM.
(C) THE REDEMPTION DATE AND THE REDEMPTION PRICE.
(D) THAT THE HOLDER IS TO SURRENDER TO THE CORPORATION, IN THE MANNER
AND AT THE PLACE DESIGNATED, HIS OR HER CERTIFICATE OR CERTIFICATES REPRESENTING
THE SHARES OF PREFERRED STOCK TO BE REDEEMED.
3.3.4 SURRENDER OF CERTIFICATES. ON OR BEFORE THE REDEMPTION DATE,
EACH HOLDER OF PREFERRED STOCK TO BE REDEEMED SHALL SURRENDER THE CERTIFICATE OR
CERTIFICATES REPRESENTING SUCH SHARES TO THE CORPORATION IN THE MANNER AND AT
THE PLACE DESIGNATED IN THE REDEMPTION NOTICE AND, THEREUPON, THE REDEMPTION
PRICE FOR SUCH SHARES SHALL BE PAYABLE TO THE ORDER OF THE PERSON WHOSE NAME
APPEARS ON SUCH CERTIFICATE OR CERTIFICATES AS THE OWNER THEREOF AND EACH
SURRENDERED CERTIFICATE SHALL BE CANCELED AND RETIRED. IN THE EVENT LESS THAN
ALL THE SHARES REPRESENTED BY SUCH CERTIFICATE ARE REDEEMED, A NEW CERTIFICATE
SHALL BE ISSUED REPRESENTING THE UNREDEEMED SHARES.
3.3.5 TERMINATION OF RIGHTS AS STOCKHOLDER. IF THE REDEMPTION NOTICE
SHALL HAVE BEEN DULY GIVEN AND IF ON THE REDEMPTION DATE THE REDEMPTION PRICE IS
EITHER PAID OR SET APART FOR PAYMENT, THEN, NOTWITHSTANDING THAT THE
CERTIFICATES EVIDENCING ANY OF THE SHARES OF PREFERRED STOCK SO CALLED FOR
REDEMPTION SHALL NOT HAVE BEEN SURRENDERED, ALL RIGHTS WITH RESPECT TO SUCH
SHARES SHALL FORTHWITH AFTER THE REDEMPTION DATE TERMINATE, EXCEPT ONLY THE
RIGHT OF THE HOLDERS TO RECEIVE THE REDEMPTION PRICE, WITHOUT INTEREST, UPON
SURRENDER OF THEIR CERTIFICATE OR CERTIFICATES THEREFOR.
3.4. CONVERSION.
3.4.1 VOLUNTARY CONVERSION. THE PREFERRED STOCK SHALL BE CONVERTIBLE INTO
SHARES OF COMMON STOCK OF THE CORPORATION ("CONVERSION SHARES") UPON THE FILING
OF A REGISTRATION STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC")
FOR A PUBLIC OFFERING OF SHARES OF THE CORPORATION. ONE-HALF OF THE SHARES UPON
EXERCISE OF THE CONVERSION WILL HAVE "PIGGYBACK" REGISTRATION RIGHTS ON THE
FIRST PUBLIC OFFERING; THE REMAINING SHARES RESULTING FROM THE CONVERSION WILL
HAVE REGISTRATION RIGHTS ON THE NEXT SUBSEQUENT OR SECONDARY OFFERING. THESE
REGISTRATION RIGHTS SHALL BE GRANTED PURSUANT TO SECTION 3.2. SUBJECT TO
APPROVAL OF THE REGULATORY AUTHORITIES AND THE UNDERWRITERS, THE PREFERRED
SHARES WILL CONVERT TO COMMON STOCK OF THE CORPORATION ON THE FOLLOWING BASIS:
THE CONVERSION RATE WILL BE DETERMINED AT THE TIME OF THE PUBLIC OFFERING BY
FIRST TAKING 125% OF THE PRICE AT WHICH A SHARE OF THE CORPORATION'S COMMON
STOCK WILL BE OFFERED TO THE PUBLIC. THIS NUMBER SO CALCULATED WILL BE THE
DIVISOR AND THE REDEMPTION PRICE ($100) WILL BE THE DIVIDEND AND THE QUOTIENT
WILL THEN BE THE NUMBER OF SHARES OF COMMON STOCK INTO WHICH EACH SHARE OF
PREFERRED STOCK WILL BE CONVERTIBLE. FOR EXAMPLE, IF THE OFFERING PRICE TO THE
PUBLIC IS $10.00, THE EXCHANGE OR CONVERSION RATE WILL BE DETERMINED AS FOLLOWS:
125% OF THE OFFERING PRICE = $12.50, THEN $100.00 $12.50 = 8 SHARES OF COMMON
STOCK FOR EACH SHARE OF PREFERRED STOCK. THE COMMON STOCK RECEIVED UPON
CONVERSION BY A HOLDER OF PREFERRED SHARES, SUBJECT TO THE FOREGOING
REGISTRATION RIGHTS, SHALL BE RESTRICTED PURSUANT TO RULE 144 AND SHALL CONTAIN
A LEGEND ON EACH CERTIFICATE TO THAT EFFECT.
3.4.2 REGISTRATION RIGHTS.
(A) DEFINITIONS.
(I) "COMMISSION" MEANS THE SECURITIES AND EXCHANGE COMMISSION.
(II) "EXCHANGE ACT" MEANS THE SECURITIES EXCHANGE ACT OF 1934.
(III) THE TERMS "REGISTER," "REGISTERED," AND "REGISTRATION" REFER TO
A REGISTRATION EFFECTED BY PREPARING AND FILING A REGISTRATION STATEMENT IN
COMPLIANCE WITH THE SECURITIES ACT AND THE DECLARATION OR ORDERING OF
EFFECTIVENESS OF SUCH REGISTRATION STATEMENT.
(IV) "SECURITIES ACT" MEANS THE SECURITIES ACT OF 1933, AS AMENDED.
(B) CORPORATION REGISTRATION. SUBJECT TO PARAGRAPH 3.2(F), IMMEDIATELY
PRIOR TO BOTH THE FIRST AND SECOND PUBLIC OFFERINGS AFTER THE PREFERRED SHARES
ARE ISSUED, IN WHICH THE CORPORATION PROPOSES TO REGISTER ITS COMMON STOCK UNDER
THE SECURITIES ACT, THE CORPORATION SHALL PROMPTLY GIVE EACH HOLDER OF PREFERRED
STOCK WRITTEN NOTICE OF SUCH DE-TERMINATION. UPON THE WRITTEN REQUEST OF ANY
HOLDER ("SELLING HOLDER") GIVEN WITHIN TEN (10) DAYS AFTER MAILING OF ANY SUCH
NOTICE BY THE CORPORATION, THE CORPORATION SHALL USE ITS BEST EFFORTS TO CAUSE
TO BE REGISTERED UNDER THE SECURITIES ACT UP TO ONE-HALF OF THE CONVERSION
SHARES IN THE FIRST OFFERING AND THE REMAINING CONVERSION SHARES IN THE SECOND
OFFERING THAT EACH SUCH SELLING HOLDER HAS REQUESTED TO BE REGISTERED. SUCH
WRITTEN REQUEST SHALL BE ACCOMPANIED BY THE CERTIFICATE OR CERTIFICATES
EVIDENCING THE SHARES OF PREFERRED STOCK TO BE CONVERTED, DULY ENDORSED OR
ACCOMPANIED BY DULY EXECUTED STOCK POWERS AND RECEIVED AT THE OFFICE OF THE
CORPORATION. THE CORPORATION SHALL CONCURRENTLY WITH EFFECTIVENESS OF THE
REGISTRATION STATEMENT ISSUE THE CONVERSION SHARES IN THE NAME OF SUCH
CONVERTING HOLDER AND/OR IN THE NAME OF SUCH HOLDER'S DESIGNEE.
(C) OBLIGATIONS OF THE CORPORATION. WHENEVER REQUIRED UNDER PARAGRAPH
3.2(B) TO USE ITS BEST EFFORTS TO EFFECT THE REGISTRATION OF ANY CONVERSION
SHARES, THE CORPORATION SHALL, AS EXPEDITIOUSLY AS REASONABLY POSSIBLE:
(I) PREPARE AND FILE WITH THE COMMISSION A REGISTRATION STATEMENT WITH
RESPECT TO SUCH CONVERSION SHARES AND USE ITS BEST EFFORTS TO CAUSE SUCH
REGISTRATION STATEMENT TO BECOME AND REMAIN EFFECTIVE; PROVIDED, HOWEVER, THAT
IN CONNECTION WITH ANY PROPOSED REGISTRATION IN-TENDED TO PERMIT AN OFFERING OF
ANY SECURITIES FROM TIME TO TIME (I.E., A SO-CALLED "SHELF REGISTRATION"), THE
CORPORATION SHALL IN NO EVENT BE OBLIGATED TO CAUSE ANY SUCH REGISTRATION TO
REMAIN EFFECTIVE FOR MORE THAN NINETY (90) DAYS.
(II) PREPARE AND FILE WITH THE COMMISSION SUCH AMENDMENTS AND
SUPPLEMENTS TO SUCH REGISTRATION STATEMENT AND THE PROSPECTUS USED IN
CONNECTION WITH SUCH REGISTRATION STATEMENT AS MAY BE NECESSARY TO COMPLY WITH
THE PROVISIONS OF THE SECURITIES ACT WITH RESPECT TO THE DISPOSITION OF ALL
SECURITIES COVERED BY SUCH REGISTRATION STATEMENT.
(III) FURNISH TO THE SELLING HOLDERS SUCH NUMBERS OF COPIES OF A
PROSPECTUS, INCLUDING A PRELIMINARY PROSPECTUS, IN CONFORMITY WITH THE
REQUIREMENTS OF THE SECURITIES ACT, AND SUCH OTHER DOCUMENTS AS THEY MAY
REASONABLY REQUEST IN ORDER TO FACILITATE THE DISPOSITION OF CONVERSION SHARES
OWNED BY THEM.
(IV) USE ITS BEST EFFORTS TO REGISTER AND QUALIFY THE SECURITIES
COVERED BY SUCH REGISTRATION STATEMENT UNDER SUCH OTHER SECURITIES OR BLUE-SKY
LAWS OF SUCH JURISDICTIONS AS SHALL BE REASONABLY APPROPRIATE FOR THE
DISTRIBUTION OF THE SECURITIES COVERED BY THE REGISTRATION STATEMENT, PRO-VIDED
THAT THE CORPORATION SHALL NOT BE REQUIRED IN CONNECTION THEREWITH OR AS A
CONDITION THERETO TO QUALIFY TO DO BUSINESS OR TO FILE A GENERAL CONSENT TO
SERVICE OF PROCESS IN ANY SUCH STATES OR JURISDICTIONS, AND FURTHER PROVIDED
THAT (ANYTHING IN THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING WITH RESPECT TO
THE BEARING OF EXPENSES) IF ANY JURISDICTION IN WHICH THE SECURITIES SHALL BE
QUALIFIED SHALL REQUIRE THAT EXPENSES INCURRED IN CONNECTION WITH THE
QUALIFICATION OF THE SECURITIES IN THAT JURISDICTION BE BORNE BY SELLING
SHAREHOLDERS PRO RATA, TO THE EXTENT REQUIRED BY SUCH JURISDICTION.
(D) FURNISH INFORMATION. IT SHALL BE A CONDITION PRECEDENT TO THE
OBLIGATIONS OF THE CORPORATION TO TAKE ANY ACTION THAT THE SELLING HOLDERS SHALL
FURNISH TO THE CORPORATION SUCH INFORMATION REGARDING THEM, THE CONVERSION
SHARES HELD BY THEM, AND THE INTENDED METHOD OF DISPOSITION OF SUCH SECURITIES
AS THE CORPORATION SHALL REASONABLY REQUEST AND AS SHALL BE REQUIRED IN
CONNECTION WITH THE ACTION TO BE TAKEN BY THE CORPORATION.
(E) REGISTRATION EXPENSES. THE CORPORATION SHALL PAY ALL COSTS AND
EXPENSES RELATING TO SUCH REGISTRATION; PROVIDED, HOW-EVER, THAT IF ANY SUCH
COST OR EXPENSE IS ATTRIBUTABLE SOLELY TO ONE OR MORE BUT FEWER THAN ALL
SELLING HOLDERS AND DOES NOT CONSTITUTE A NOR-MAL COST OR EXPENSE OF SUCH A
REGISTRATION, SUCH COST OR EXPENSE SHALL BE ALLOCATED TO THOSE SELLING HOLDERS.
IN ADDITION, EACH SELLING HOLDER SHALL BEAR THE FEES AND COSTS OF ITS OWN
COUNSEL.
(F) UNDERWRITING REQUIREMENTS. IN CONNECTION WITH ANY OFFERING
INVOLVING AN UNDERWRITING OF SHARES OF COMMON STOCK BEING ISSUED BY THE
CORPORATION, THE CORPORATION SHALL NOT BE REQUIRED UNDER PARAGRAPH 3.2(B) TO
INCLUDE ANY OF THE SELLING HOLDERS' CONVERSION SHARES IN SUCH UNDER-WRITING
UNLESS THEY ACCEPT THE TERMS OF THE UNDERWRITING AS AGREED UPON BETWEEN THE
CORPORATION AND THE UNDERWRITERS SELECTED BY IT, AND THEN ONLY IN SUCH QUANTITY
AS WILL NOT, IN THE WRITTEN OPINION OF THE UNDERWRITERS, JEOPARDIZE THE SUCCESS
OF THE OFFERING BY THE CORPORATION. IF THE TOTAL AMOUNT OF SECURITIES THAT ALL
SELLING HOLDERS REQUEST TO BE INCLUDED IN SUCH OFFERING EXCEEDS THE AMOUNT OF
SECURITIES THAT THE UNDER-WRITERS REASONABLY BELIEVE COMPATIBLE WITH THE SUCCESS
OF THE OFFERING, THE CORPORATION SHALL ONLY BE REQUIRED TO INCLUDE IN THE
OFFERING SO MANY OF THE SECURITIES OF THE SELLING HOLDERS AS THE UNDERWRITERS
BELIEVE WILL NOT JEOPARDIZE THE SUCCESS OF THE OFFERING (THE SECURITIES SO
INCLUDED TO BE APPORTIONED PRO RATA AMONG THE SELLING HOLDERS ACCORDING TO THE
TOTAL AMOUNT OF SECURITIES OWNED BY SAID SELLING HOLDERS, OR IN SUCH OTHER
PROPORTIONS AS SHALL MUTUALLY BE AGREED TO BY SUCH SELLING HOLDERS), PROVIDED
THAT NO SUCH REDUCTION SHALL BE MADE WITH RESPECT TO ANY SECURITIES OFFERED BY
THE CORPORATION FOR ITS OWN ACCOUNT.
(G) DELAY OF REGISTRATION. NO SELLING HOLDER SHALL HAVE ANY RIGHT TO
TAKE ANY ACTION TO RESTRAIN, ENJOIN, OR OTHERWISE DELAY ANY REGISTRATION AS THE
RESULT OF ANY CONTROVERSY THAT MIGHT ARISE WITH RESPECT TO THE INTERPRETATION OR
IMPLEMENTATION OF THIS AGREEMENT.
(H) INDEMNIFICATION. IN THE EVENT ANY CONVERSION SHARES ARE INCLUDED
IN A REGISTRATION STATEMENT:
(I) TO THE EXTENT PERMITTED BY LAW, THE CORPORATION WILL INDEMNIFY AND HOLD
HARMLESS EACH SELLING HOLDER REQUESTING OR JOINING IN A REGISTRATION, ANY
UNDERWRITER (AS DEFINED IN THE SECURITIES ACT) FOR IT, AND EACH SUCH PERSON, IF
ANY, WHO CONTROLS SUCH SELLING HOLDER OR UNDER-WRITER WITHIN THE MEANING OF THE
SECURITIES ACT, AGAINST ANY LOSSES, CLAIMS, DAMAGES, OR LIABILITIES, JOINT OR
SEVERAL, TO WHICH THEY MAY BECOME SUBJECT UNDER THE SECURITIES ACT OR OTHERWISE,
INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES, OR LIABILITIES (OR ACTIONS IN RESPECT
THEREOF) ARISE OUT OF OR ARE BASED ON ANY UNTRUE OR ALLEGED UN-TRUE STATEMENT OF
ANY MATERIAL FACT CONTAINED IN SUCH REGISTRATION STATEMENT, INCLUDING ANY
PRELIMINARY PROSPECTUS OR FINAL PROSPECTUS CONTAINED THEREIN OR ANY AMENDMENTS
OR SUPPLEMENTS THERETO, OR ARISE OUT OF OR ARE BASED UPON THE OMISSION OR
ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT REQUIRED TO BE STATED
THEREIN, OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING; AND WILL
REIMBURSE EACH SUCH HOLDER, SUCH UNDER-WRITER, OR CONTROLLING PERSON FOR ANY
LEGAL OR OTHER EXPENSES REASONABLY INCURRED BY THEM IN CONNECTION WITH
INVESTIGATING OR DEFENDING ANY SUCH LOSS, CLAIM, DAMAGE, LIABILITY, OR ACTION;
PROVIDED, HOWEVER, THAT THE INDEMNITY AGREEMENT CONTAINED IN THIS PARAGRAPH
3.2(H)(I) SHALL NOT APPLY TO AMOUNTS PAID IN SETTLEMENT OF ANY SUCH LOSS, CLAIM,
DAMAGE, LIABILITY, OR ACTION IF SUCH SET-TLEMENT IS EFFECTED WITHOUT THE CONSENT
OF THE CORPORATION (WHICH CONSENT SHALL NOT BE UN-REASONABLY WITHHELD) NOR SHALL
THE CORPORATION BE LIABLE IN ANY SUCH CASE FOR ANY SUCH LOSS, CLAIM, DAMAGE,
LIABILITY, OR ACTION TO THE EXTENT THAT IT ARISES OUT OF OR IS BASED UPON AN
UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION
MADE IN CONNECTION WITH SUCH REGIS-TRA-TION STATEMENT, PRELIMINARY PROSPECTUS,
FINAL PROSPECTUS, OR AMENDMENTS OR SUPPLEMENTS THERETO, IN RELIANCE UPON AND IN
CON-FORMITY WITH WRITTEN INFORMATION FURNISHED EXPRESSLY FOR USE IN CONNECTION
WITH SUCH REGISTRATION BY ANY SUCH SELLING HOLDER, UNDER-WRITER, OR CONTROLLING
PERSON.
(II) TO THE EXTENT PERMITTED BY LAW, EACH SELLING HOLDER RE-QUESTING OR
JOINING IN A REGISTRATION WILL INDEMNIFY AND HOLD HARMLESS THE CORPORATION, EACH
OF ITS DIRECTORS, EACH OF ITS OFFICERS WHO HAVE SIGNED THE REGISTRATION
STATEMENT, EACH PERSON, IF ANY, WHO CONTROLS THE CORPORATION WITHIN THE MEANING
OF THE SECURITIES ACT, AND EACH AGENT AND ANY UNDERWRITER FOR THE CORPORATION
(WITHIN THE MEANING OF THE SECURITIES ACT) AGAINST ANY LOSSES, CLAIMS, DAMAGES,
OR LIABILITIES TO WHICH THE CORPORATION OR ANY SUCH DIRECTOR, OFFICER,
CONTROLLING PERSON, AGENT, OR UNDERWRITER MAY BECOME SUBJECT, UNDER THE
SECURITIES ACT OR OTHERWISE, INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES, OR
LIABIL-ITIES (OR ACTIONS IN RESPECT THERETO) ARISE OUT OF OR ARE BASED UPON ANY
UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF ANY MATERIAL FACT CONTAINED IN
SUCH REGISTRATION STATEMENT, INCLUDING ANY PRELIMINARY PROSPECTUS OR FINAL
PROSPECTUS CONTAINED THEREIN OR ANY AMENDMENTS OR SUPPLEMENTS THERETO, OR ARISE
OUT OF OR ARE BASED UPON THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN A
MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING, IN EACH CASE TO THE EX-TENT, BUT ONLY TO THE EXTENT,
THAT SUCH UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED
OMISSION WAS MADE IN SUCH REGISTRATION STATEMENT, PRELIMINARY OR FINAL
PROSPECTUS, OR AMENDMENTS OR SUPPLEMENTS THERETO, IN RELIANCE UPON AND IN
CONFORMITY WITH WRITTEN INFORMATION FURNISHED BY SUCH HOLDER EXPRESSLY FOR USE
IN CONNECTION WITH SUCH REGISTRATION; AND EACH SUCH HOLDER WILL REIMBURSE ANY
LEGAL OR OTHER EXPENSES REASONABLY INCURRED BY THE CORPORATION OR ANY SUCH
DIRECTOR, OFFICER, CONTROL-LING PERSON, AGENT, OR UNDERWRITER IN CONNECTION
WITH INVESTIGATING OR DEFENDING ANY SUCH LOSS, CLAIM, DAMAGE, LIABILITY, OR
ACTION; PROVIDED, HOWEVER, THAT THE INDEMNITY AGREEMENT CONTAINED IN THIS
PARAGRAPH 3.2(H)(II) SHALL NOT APPLY TO AMOUNTS PAID IN SETTLEMENT OF ANY SUCH
LOSS, CLAIM, DAMAGE, LIABILITY, OR ACTION IF SUCH SETTLEMENT IS EFFECTED WITHOUT
THE CONSENT OF SUCH SELLING HOLDER (WHICH CON-SENT SHALL NOT BE UNREASONABLY
WITHHELD).
(III) PROMPTLY AFTER RECEIPT BY AN INDEMNIFIED PARTY UNDER THIS PARAGRAPH OF
NOTICE OF THE COMMENCEMENT OF ANY ACTION, SUCH INDEMNIFIED PARTY WILL, IF A
CLAIM IN RESPECT THEREOF IS TO BE MADE AGAINST ANY INDEMNIFYING PARTY UNDER
THIS PARAGRAPH, NOTIFY THE INDEMNIFYING PARTY IN WRITING OF THE COMMENCEMENT
THEREOF AND THE INDEMNIFYING PARTY SHALL HAVE THE RIGHT TO PARTICIPATE IN, AND,
TO THE EXTENT THE INDEMNIFYING PARTY SO DE-SIRES, JOINTLY WITH ANY OTHER
INDEMNIFYING PARTY SIMILARLY NOTICED, TO ASSUME THE DEFENSE THEREOF WITH COUNSEL
MUTUALLY SATISFACTORY TO THE PARTIES. THE FAILURE TO NOTIFY AN INDEMNIFYING
PARTY PROMPTLY OF THE COMMENCEMENT OF ANY SUCH ACTION, IF PREJUDICIAL TO HIS
ABILITY TO DEFEND SUCH ACTION, SHALL RELIEVE SUCH INDEMNIFYING PARTY OF ANY
LIABILITY TO THE INDEMNIFIED PARTY UNDER THIS PARAGRAPH, BUT THE OMISSION TO SO
NOTIFY THE INDEMNIFYING PARTY WILL NOT RELIEVE HIM OF ANY LIABILITY THAT HE
MAY HAVE TO ANY INDEMNIFIED PARTY OTHERWISE THAN UNDER THIS PARAGRAPH.
(I) LOCKUP AGREEMENT. IN CONSIDERATION FOR THE CORPORATION AGREEING TO
----------------
ITS OBLIGATIONS UNDER THIS AGREEMENT, EACH HOLDER AGREES IN CONNECTION WITH ANY
REGISTRATION OF THE CORPORATION'S SECURITIES THAT, UPON THE REQUEST OF THE
CORPORATION OR THE UNDERWRITERS MANAGING ANY UNDERWRITTEN OFFERING OF THE
CORPORATION'S SECURITIES, NOT TO SELL, MAKE ANY SHORT SALE OF, LOAN, GRANT ANY
OPTION FOR THE PURCHASE OF, OR OTHERWISE DISPOSE OF ANY CONVERSION SHARES (OTHER
THAN THOSE INCLUDED IN THE REGISTRATION) WITHOUT THE PRIOR WRITTEN CONSENT OF
THE CORPORATION OR SUCH UNDER-WRITERS, AS THE CASE MAY BE, FOR SUCH PERIOD OF
TIME (NOT TO EXCEED NINETY (90) DAYS) FROM THE EFFECTIVE DATE OF SUCH
REGISTRATION AS THE CORPORATION OR THE UNDERWRITERS MAY SPECIFY.
3.4.3 ADDITIONAL CONDITION. NOTWITHSTANDING ANYTHING HEREIN CONTAINED
TO THE CONTRARY, THE CORPORATION SHALL NOT BE OBLIGATED TO ISSUE THE CONVERSION
SHARES UNTIL THERE SHALL HAVE BEEN DELIVERED TO THE CORPORATION OR TO ITS
TRANSFER AGENT, AS APPLICABLE, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE CORPORATION TO THE EFFECT THAT THE ISSUANCE OF SUCH COMMON STOCK IS EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND FROM
QUALIFICATION UNDER APPLICABLE STATE LAWS OR THAT A REGISTRATION STATEMENT WITH
RESPECT THERETO HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
WITH THE APPROPRIATE STATE REGULATORY AUTHORITIES AND HAS BECOME EFFECTIVE.
3.4.4 RESERVATION OF SHARES. THE CORPORATION SHALL AT ALL TIMES
RESERVE AND KEEP AVAILABLE OUT OF ITS AUTHORIZED BUT UNISSUED SHARES OF COMMON
STOCK, SOLELY FOR THE PURPOSE OF ISSUANCE UPON THE CONVERSION OF THE PREFERRED
SHARES, SUCH NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON THE CONVERSION OF
ALL OUTSTANDING PREFERRED STOCK. ALL SHARES OF COMMON STOCK WHICH ARE SO
ISSUABLE SHALL, WHEN ISSUED, BE DULY AND VALIDLY ISSUED, FULLY PAID AND
NONASSESSABLE AND FREE FROM ALL TAXES, LIENS AND CHARGES. THE CORPORATION SHALL
TAKE ALL SUCH ACTIONS AS MAY BE NECESSARY TO ASSURE THAT ALL SUCH SHARES OF
COMMON STOCK MAY BE SO ISSUED WITHOUT VIOLATION OF ANY APPLICABLE LAW OR
GOVERNMENT REGULATION OR ANY REQUIREMENTS OF ANY DOMESTIC SECURITIES EXCHANGE
UPON WHICH SHARES OF COMMON STOCK MAY BE LISTED (EXCEPT FOR OFFICIAL NOTICE OF
ISSUANCE WHICH SHALL BE IMMEDIATELY DELIVERED BY THE CORPORATION UPON EACH SUCH
ISSUANCE). THE CORPORATION SHALL NOT TAKE ANY ACTION WHICH WOULD CAUSE THE
NUMBER OF AUTHORIZED BUT UNISSUED SHARES OF COMMON STOCK TO BE LESS THAN THE
NUMBER OF SUCH SHARES REQUIRED TO BE RESERVED HEREUNDER FOR ISSUANCE UPON
CONVERSION OF THE PREFERRED SHARES.
3.4.5 NO FRACTIONAL SHARES; CURRENT MARKET VALUE. NO FRACTIONAL SHARES
OR SCRIP REPRESENTING FRACTIONAL SHARES SHALL BE ISSUED UPON CONVERSION OF THE
PREFERRED STOCK. WITH RESPECT TO ANY FRACTION OF A SHARE CALLED FOR UPON ANY
CONVERSION THEREOF, THE CORPORATION SHALL PAY TO THE HOLDER AN AMOUNT IN CASH
EQUAL TO SUCH FRACTION MULTI-PLIED BY THE PER-SHARE PUBLIC OFFERING PRICE OF THE
COMMON STOCK LESS UNDERWRITING DISCOUNTS AND COMMISSIONS.
3.5. EXCHANGE, ASSIGNMENT OR LOSS OF PREFERRED SHARES. SUBJECT TO THE
PROVISIONS OF SECTION 6 HEREOF, THE PREFERRED STOCK IS ASSIGNABLE AND
EXCHANGEABLE, WITH-OUT EXPENSE, AT THE OPTION OF THE HOLDER, UPON PRESENTATION
AND SURRENDER OF SUCH PREFERRED STOCK TO THE CORPORATION, TOGETHER WITH WRITTEN
INSTRUCTIONS SIGNED BY THE HOLDER OF SUCH PREFERRED STOCK WITH RESPECT TO
REISSUANCE THEREOF AND GOOD FUNDS SUFFICIENT TO PAY ANY TRANSFER OR SIMILAR TAX;
WHEREUPON THE CORPORATION SHALL, WITH-OUT CHARGE, EXE-CUTE AND DELIVER PREFERRED
STOCK IN THE DESIGNATED DENOMINATIONS AND IN THE DESIGNATED NAME(S) AND THE
PREFERRED STOCK SO SURRENDERED PROMPTLY SHALL BE CANCELED. UPON RECEIPT BY THE
CORPORATION OF EVIDENCE SATISFACTORY TO IT OF THE LOSS, THEFT, DESTRUCTION OR
MUTILATION OF PREFERRED STOCK CERTIFICATES, AND (IN THE CASE OF LOSS, THEFT OR
DESTRUCTION) OF REASONABLY SATISFACTORY INDEMNIFICATION INCLUDING A SURETY
BOND, AND UPON SURRENDER AND CANCELLATION OF PREFERRED STOCK CERTIFICATES, IF
MUTILATED, THE CORPORATION WILL EXECUTE AND DELIVER NEW PREFERRED STOCK
CERTIFICATES OF LIKE TENOR AND DATE. ANY SUCH NEW PREFERRED STOCK CERTIFICATES
EXECUTED AND DELIVERED SHALL CONSTITUTE ADDITIONAL CONTRACTUAL OBLIGATION ON
THE PART OF THE CORPORATION, WHETHER OR NOT THE PREFERRED STOCK CERTIFICATES SO
LOST, STOLEN, DESTROYED, OR MUTILATED SHALL BE AT ANY TIME ENFORCEABLE BY
ANYONE.
3.6. LEGENDS AND SECURITIES LAW COMPLIANCE.
3.6.1 SECURITIES LAW COMPLIANCE. NEITHER THE PREFERRED STOCK NOR THE
COMMON STOCK NOR ANY OTHER SECURITY ISSUED OR ISSUABLE UPON CONVERSION OF THE
PREFERRED STOCK MAY BE ISSUED, OFFERED OR SOLD EXCEPT IN CONFORMITY WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE LAWS, AND THEN ONLY
AGAINST RECEIPT OF AN AGREEMENT OF SUCH PERSON TO WHOM SUCH OFFER OF SALE IS
MADE TO COMPLY WITH THE PROVISIONS OF THIS SECTION WITH RESPECT TO ANY RESALE
OR OTHER DISPOSITION OF SUCH SECURITIES.
3.6.2 SECURITIES LEGEND. THE CORPORATION MAY CAUSE THE FOLLOWING LEGEND
TO BE SET FORTH ON EACH CERTIFICATE REPRESENTING PREFERRED STOCK OR ANY OTHER
SECURITY ISSUED OR ISSUABLE UPON CONVERSION OF THE PREFERRED STOCK, UNLESS
COUNSEL FOR THE CORPORATION IS OF THE OPINION AS TO ANY SUCH CERTIFICATE THAT
SUCH LEGEND IS UNNECESSARY:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
MADE UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE ACT THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED
TO THE REASONABLE SATISFACTION OF THE CORPORATION.
3.6.3 OTHER LEGENDS. ALL CERTIFICATES REPRESENTING THE PREFERRED SHARES AND
ANY AND ALL SECURITIES ISSUED IN REPLACEMENT THEREOF OR UPON CONVERSION THEREOF
SHALL BEAR SUCH ADDITIONAL LEGENDS AS SHALL BE REQUIRED BY LAW OR CONTRACT.
3.7. RIGHTS ON LIQUIDATION. IN THE EVENT OF THE LIQUIDATION,
DISSOLUTION OR WINDING UP OF THE CORPORATION, WHETHER VOLUNTARY OR INVOLUNTARY,
RESULTING IN ANY DISTRIBUTION OF ITS ASSETS TO ITS SHAREHOLDERS, THE HOLDERS OF
THE PREFERRED SHARES THEN ISSUED AND OUTSTANDING SHALL BE ENTITLED TO RECEIVE AN
AMOUNT EQUAL TO $100.00 PER PREFERRED SHARE PLUS ANY ACCUMULATED BUT UNPAID
DIVIDENDS (THE "LIQUIDATION VALUE"), AND NO MORE, BEFORE ANY PAYMENT OR
DISTRIBUTION OF THE ASSETS OF THE CORPORATION IS MADE TO OR SET APART FOR THE
HOLDERS OF COMMON STOCK. IF THE ASSETS OF THE CORPORATION DISTRIBUTABLE TO THE
HOLDERS OF PREFERRED SHARES ARE INSUFFICIENT FOR THE PAYMENT TO THEM OF THE FULL
PREFERENTIAL AMOUNT DESCRIBED ABOVE, SUCH ASSETS SHALL BE DISTRIBUTED RATABLY
AMONG THE HOLDERS OF THE PREFERRED SHARES. THE HOLDERS OF THE COMMON STOCK
SHALL BE ENTITLED TO THE EXCLUSION OF THE HOLDERS OF THE PREFERRED SHARES TO
SHARE IN ALL REMAINING ASSETS OF THE CORPORATION IN ACCORDANCE WITH THEIR
RESPECTIVE INTERESTS. FOR PURPOSES OF THIS PARAGRAPH, A CONSOLIDATION OR MERGER
OF THE CORPORATION WITH ANY OTHER CORPORATION OR CORPORATIONS SHALL NOT BE
DEEMED TO BE A LIQUIDATION, DISSOLUTION OR WINDING UP OF THE CORPORATION.
3.8. DEFINITION. THE TERM "REGULATORY REQUIREMENTS" SHALL MEAN ANY AND
ALL APPLICABLE (I) LAWS (WHETHER STATUTORY OR OTHERWISE), RULES, REGULATIONS,
REQUIREMENTS, RESTRICTIONS, LICENSES AND REGISTRATIONS OF ALL GOVERNMENTAL,
JUDICIAL, LEGISLATIVE, EXECUTIVE, ADMINISTRATIVE OR REGULATORY AUTHORITIES
(FEDERAL, STATE, MUNICIPAL, DEPARTMENTAL, FOREIGN OR OTHERWISE); AND (II)
JUDGMENTS, ORDERS, DIRECTIVES, RULINGS, DECISIONS, INJUNCTIONS, DECREES OR
AWARDS OF ANY FEDERAL , STATE, MUNICIPAL, DEPARTMENTAL OR FOREIGN COURT,
ARBITRATOR OR ADMINISTRATIVE OR GOVERNMENTAL AUTHORITY, BUREAU OR AGENCY.
WITHOUT LIMITING THE FOREGOING, NO DISTRIBUTION, BY DIVIDEND, REDEMPTION OR
OTHERWISE, SHALL BE MADE WITH RESPECT THE PREFERRED SHARES IF SUCH DISTRIBUTION
WOULD BE IN VIOLATION OF UTAH LAW OR IN VIOLATION OF THE NET CAPITAL OR OTHER
FINANCIAL REQUIREMENTS APPLICABLE TO THE COMPANY OR ANY OF ITS SUBSIDIARIES AS A
SECURITIES BROKER-DEALER REGISTERED UNDER THE SECURITIES EXCHANGE ACT OF 1934 OR
AS AN INVESTMENT ADVISER REGISTERED UNDER THE INVESTMENT ADVISERS ACT OR UNDER
APPLICABLE STATE LAWS.
3.9. NOTICE. ANY NOTICES OR CERTIFICATES BY THE CORPORATION TO THE HOLDER
AND BY THE HOLDER TO THE CORPORATION SHALL BE DEEMED TO HAVE BEEN GIVEN IF IN
WRITING AND UPON THE EARLIER OF PERSONAL DELIVERY (INCLUDING BY MESSENGER,
FACSIMILE OR OTHER RECEIPTED DELIVERY DURING NORMAL BUSINESS HOURS OR, IF
DELIVERED OTHER THAN DURING NORMAL BUSINESS HOURS, AT THE BEGINNING OF THE FIRST
BUSINESS DAY FOLLOWING SUCH DELIVERY) OR THREE BUSINESS DAYS FOLLOWING DEPOSIT
IN THE UNITED STATES MAILS, BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, ADDRESSED TO THE HOLDER AT SUCH HOLDER'S ADDRESS OF RECORD ON THE
BOOKS OF THE CORPORATION OR TO THE CORPORATION AT ITS PRINCIPAL EXECUTIVE
OFFICES. ANY PERSON MAY CHANGE THE ADDRESS FOR THE GIVING OF NOTICE BY NOTICE
DULY GIVEN EFFECTIVE FIVE (5) BUSINESS DAYS THEREAFTER.
ARTICLE IV
OFFICES
THE STREET ADDRESS OF THE INITIAL REGISTERED OFFICE OF THE CORPORATION IS
8300 FAIRMOUNT DRIVE, SUITE TT105, DENVER, COLORADO 80231, AND THE NAME OF THE
INITIAL REGISTERED AGENT AT THAT ADDRESS IS CHRISTY T. O'CONNOR. THE WRITTEN
CONSENT OF THE INITIAL REGISTERED AGENT TO THE APPOINTMENT AS SUCH IS STATED
BELOW.
THE ADDRESS OF THE CORPORATION'S INITIAL PRINCIPAL OFFICE IS 5265 NORTH
ACADEMY BLVD., SUITE 2250, COLORADO SPRINGS, COLORADO 80918.
ARTICLE V
INCORPORATOR
THE NAME AND ADDRESS OF THE INCORPORATOR IS CHRISTY T. O'CONNOR, 8300
FAIRMOUNT DRIVE, SUITE TT105, DENVER, COLORADO 80231
ARTICLE VI
PURPOSES
THE PURPOSES FOR WHICH THE CORPORATION IS ORGANIZED ARE AS FOLLOWS:
1. TO ENGAGE IN ALL LAWFUL BUSINESS; AND
2. TO HAVE, ENJOY, AND EXERCISE ALL OF THE RIGHTS, POWERS, AND PRIVILEGES
CONFERRED UPON CORPORATIONS INCORPORATED PURSUANT TO COLORADO LAW, WHETHER NOW
OR HEREAFTER IN EFFECT, AND WHETHER OR NOT HEREIN SPECIFICALLY MENTIONED.
ARTICLE VII
PREEMPTIVE RIGHTS
THE SHAREHOLDERS SHALL NOT HAVE PREEMPTIVE RIGHTS.
ARTICLE VIII
QUORUM FOR SHAREHOLDERS' MEETINGS
EXCEPT AS BYLAWS ADOPTED BY THE SHAREHOLDERS MAY PROVIDE FOR A GREATER
QUORUM REQUIREMENT, A MAJORITY OF THE OUTSTANDING SHARES SHALL CONSTITUTE A
QUORUM AT ANY MEETING OF SHAREHOLDERS. EXCEPT AS BYLAWS ADOPTED BY THE
SHAREHOLDERS MAY PROVIDE FOR A GREATER VOTING REQUIREMENT AND EXCEPT AS IS
OTHERWISE PROVIDED BY THE COLORADO BUSINESS CORPORATION ACT WITH RESPECT TO
ACTION ON AMENDMENT TO THESE ARTICLES OF INCORPORATION, ON A PLAN OF MERGER OR
SHARE EXCHANGE, ON THE DISPOSITION OF SUBSTANTIALLY ALL OF THE PROPERTY OF THE
CORPORATION, ON THE GRANTING OF CONSENT TO THE DISPOSITION OF PROPERTY BY AN
ENTITY CONTROLLED BY THE CORPORATION, AND ON THE DISSOLUTION OF THE CORPORATION,
ACTION ON A MATTER OTHER THAN THE ELECTION OF DIRECTORS IS APPROVED IF A QUORUM
EXISTS AND IF THE VOTES CAST FAVORING THE ACTION EXCEED THE VOTES CAST OPPOSING
THE ACTION. ANY BYLAW ADDING, CHANGING, OR DELETING A GREATER QUORUM OR VOTING
REQUIREMENT FOR SHAREHOLDERS SHALL MEET THE SAME QUORUM REQUIREMENT AND BE
ADOPTED BY THE SAME VOTE REQUIRED TO TAKE ACTION UNDER THE QUORUM AND VOTING
REQUIREMENTS THEN IN EFFECT OR PROPOSED TO BE ADOPTED, WHICHEVER ARE GREATER.
ARTICLE IX
BOARD OF DIRECTORS
THE CORPORATE POWERS SHALL BE EXERCISED BY OR UNDER THE AUTHORITY OF, AND
THE BUSINESS AND AFFAIRS OF THE CORPORATION SHALL BE MANAGED UNDER THE DIRECTION
OF, A BOARD OF DIRECTORS.
THE NAMES AND ADDRESSES OF THE MEMBERS OF THE INITIAL BOARD OF DIRECTORS
ARE AS FOLLOWS:
NAME ADDRESS
5265 NORTH ACADEMY BLVD., SUITE 2250
LEE T. DURAN COLORADO SPRINGS, CO 80918
8300 FAIRMOUNT DRIVE, SUITE TT105
CHRISTY T. O'CONNOR DENVER, CO 80231
THE DIRECTORS SHALL BE ELECTED AT EACH ANNUAL MEETING OF THE SHAREHOLDERS,
PROVIDED THAT VACANCIES MAY BE FILLED BY ELECTION BY THE REMAINING DIRECTORS,
THOUGH LESS THAN A QUORUM, OR BY THE SHAREHOLDERS AT A SPECIAL MEETING CALLED
FOR THAT PURPOSE. DESPITE THE EXPIRATION OF HIS OR HER TERM, A DIRECTOR
CONTINUES TO SERVE UNTIL HIS OR HER SUCCESSOR IS ELECTED AND QUALIFIES.
ARTICLE X
CUMULATIVE VOTING
CUMULATIVE VOTING SHALL NOT BE PERMITTED IN THE ELECTION OF DIRECTORS.
ARTICLE XI
LIMITATION ON DIRECTOR LIABILITY
A DIRECTOR OF THE CORPORATION SHALL NOT BE PERSONALLY LIABLE TO THE
CORPORATION OR TO ITS SHAREHOLDERS FOR MONETARY DAMAGES FOR BREACH OF FIDUCIARY
DUTY AS A DIRECTOR; EXCEPT THAT THIS PROVISION SHALL NOT ELIMINATE OR LIMIT THE
LIABILITY OF A DIRECTOR TO THE CORPORATION OR TO ITS SHAREHOLDERS FOR MONETARY
DAMAGES OTHERWISE EXISTING FOR (I) ANY BREACH OF THE DIRECTOR'S DUTY OF LOYALTY
TO THE CORPORATION OR TO ITS SHAREHOLDERS; (II) ACTS OR OMISSIONS NOT IN GOOD
FAITH OR WHICH INVOLVE INTENTIONAL MISCONDUCT OR A KNOWING VIOLATION OF LAW;
(III) ACTS SPECIFIED IN SECTION 7-108-403 OF THE COLORADO BUSINESS CORPORATION
ACT; OR (IV) ANY TRANSACTION FROM WHICH THE DIRECTOR DIRECTLY OR INDIRECTLY
DERIVED ANY IMPROPER PERSONAL BENEFIT. IF THE COLORADO BUSINESS CORPORATION ACT
IS HEREAFTER AMENDED TO ELIMINATE OR LIMIT FURTHER THE LIABILITY OF A DIRECTOR,
THEN, IN ADDITION TO THE ELIMINATION AND LIMITATION OF LIABILITY PROVIDED BY THE
PRECEDING SENTENCE, THE LIABILITY OF EACH DIRECTOR SHALL BE ELIMINATED OR
LIMITED TO THE FULLEST EXTENT PERMITTED BY THE COLORADO BUSINESS CORPORATION ACT
AS SO AMENDED. ANY REPEAL OR MODIFICATION OF THIS ARTICLE X SHALL NOT ADVERSELY
AFFECT ANY RIGHT OR PROTECTION OF A DIRECTOR OF THE CORPORATION UNDER THIS
ARTICLE X. AS IN EFFECT IMMEDIATELY PRIOR TO SUCH REPEAL OR MODIFICATION, WITH
RESPECT TO ANY LIABILITY THAT WOULD HAVE ACCRUED, BUT FOR THIS ARTICLE X, PRIOR
TO SUCH REPEAL OR MODIFICATION.
ARTICLE XII
INDEMNIFICATION
THE CORPORATION SHALL INDEMNIFY, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW IN EFFECT FROM TIME TO TIME, ANY PERSON, AND THE ESTATE AND
PERSONAL REPRESENTATIVE OF ANY SUCH PERSON, AGAINST ALL LIABILITY AND EXPENSE
(INCLUDING ATTORNEYS' FEES) INCURRED BY REASON OF THE FACT THAT HE IS OR WAS A
DIRECTOR OR OFFICER OF THE CORPORATION OR, WHILE SERVING AS A DIRECTOR OR
OFFICER OF THE CORPORATION, HE IS OR WAS SERVING AT THE REQUEST OF THE
CORPORATION AS A DIRECTOR, OFFICER, PARTNER, TRUSTEE, EMPLOYEE, FIDUCIARY, OR
AGENT OF, OR IN ANY SIMILAR MANAGERIAL OR FIDUCIARY POSITION OF, ANOTHER
DOMESTIC OR FOREIGN CORPORATION OR OTHER INDIVIDUAL OR ENTITY OR OF AN EMPLOYEE
BENEFIT PLAN. THE CORPORATION SHALL ALSO INDEMNITY, ANY PERSON WHO IS SERVING OR
HAS SERVED THE CORPORATION AS DIRECTOR, OFFICER, EMPLOYEE, FIDUCIARY, OR AGENT,
AND THAT PERSON'S ESTATE AND PERSONAL REPRESENTATIVE, TO THE EXTENT AND IN THE
MANNER PROVIDED IN ANY BYLAW, RESOLUTION OF THE SHAREHOLDERS OR DIRECTORS,
CONTRACT, OR OTHERWISE, SO LONG AS SUCH PROVISION IS LEGALLY PERMISSIBLE.
ARTICLE XIII
EFFECTIVE DATE
THE EXISTENCE OF THE CORPORATION SHALL BEGIN ON THE DATE OF FILING OF THESE
ARTICLES OF INCORPORATION WITH THE COLORADO SECRETARY OF STATE.
ARTICLE XIV
TERM OF EXISTENCE
THE CORPORATION SHALL, IF NOT SOONER DISSOLVED, CONTINUE IN PERPETUITY.
JAY W. ENYART ,
CHRISTY T. O'CONNOR,
INCORPORATOR
BY:__________________________
AUTHORIZED SIGNATORY
THE UNDERSIGNED CONSENTS TO THE APPOINTMENT AS THE INITIAL REGISTERED AGENT
OF DETERMINATION, INC
CHRISTY T. O'CONNOR
BY:___________________________
AUTHORIZED SIGNATORY
EXHIBIT 2.2
DETERMINATION, INC
BY-LAWS
ARTICLE I
THE STOCKHOLDERS
SECTION 1.1. ANNUAL MEETING. THE ANNUAL MEETING OF THE STOCKHOLDERS OF
DETERMINATION, INC(THE "CORPORATION") SHALL BE HELD ON THE THIRD THURSDAY IN
MAY OF EACH YEAR AT 10:30 A.M. LOCAL TIME, OR AT SUCH OTHER DATE OR TIME AS
SHALL BE DESIGNATED FROM TIME TO TIME BY THE BOARD OF DIRECTORS AND STATED IN
THE NOTICE OF THE MEETING, FOR THE ELECTION OF DIRECTORS AND FOR THE TRANSACTION
OF SUCH OTHER BUSINESS AS MAY COME BEFORE THE MEETING.
SECTION 1.2. SPECIAL MEETINGS. A SPECIAL MEETING OF THE STOCKHOLDERS MAY
BE CALLED AT ANY TIME BY THE WRITTEN RESOLUTION OR REQUEST OF TWO-THIRDS OR MORE
OF THE MEMBERS OF THE BOARD OF DIRECTORS, THE PRESIDENT, OR ANY EXECUTIVE VICE
PRESIDENT AND SHALL BE CALLED UPON THE WRITTEN REQUEST OF THE HOLDERS OF
TWO-THIRDS OR MORE IN AMOUNT, OF EACH CLASS OR SERIES OF THE CAPITAL STOCK OF
THE CORPORATION ENTITLED TO VOTE AT SUCH MEETING ON THE MATTERS(S) THAT ARE THE
SUBJECT OF THE PROPOSED MEETING, SUCH WRITTEN REQUEST IN EACH CASE TO SPECIFY
THE PURPOSE OR PURPOSES FOR WHICH SUCH MEETING SHALL BE CALLED, AND WITH RESPECT
TO STOCKHOLDER PROPOSALS, SHALL FURTHER COMPLY WITH THE REQUIREMENTS OF THIS
ARTICLE.
SECTION 1.3. NOTICE OF MEETINGS. WRITTEN NOTICE OF EACH MEETING OF
STOCKHOLDERS, WHETHER ANNUAL OR SPECIAL, STATING THE DATE, HOUR AND PLACE WHERE
IT IS TO BE HELD, SHALL BE SERVED EITHER PERSONALLY OR BY MAIL, NOT LESS THAN
FIFTEEN NOR MORE THAN SIXTY DAYS BEFORE THE MEETING, UPON EACH STOCKHOLDER OF
RECORD ENTITLED TO VOTE AT SUCH MEETING, AND TO ANY OTHER STOCKHOLDER TO WHOM
THE GIVING OF NOTICE MAY BE REQUIRED BY LAW. NOTICE OF A SPECIAL MEETING SHALL
ALSO STATE THE PURPOSE OR PURPOSES FOR WHICH THE MEETING IS CALLED AND SHALL
INDICATE THAT IT IS BEING ISSUED BY, OR AT THE DIRECTION OF, THE PERSON OR
PERSONS CALLING THE MEETING. IF, AT ANY MEETING, ACTION IS PROPOSED TO BE TAKEN
THAT WOULD, IF TAKEN, ENTITLE STOCKHOLDERS TO RECEIVE PAYMENT FOR THEIR STOCK,
THE NOTICE OF SUCH MEETING SHALL INCLUDE A STATEMENT OF THAT PURPOSE AND TO THAT
EFFECT. IF MAILED, NOTICE SHALL BE DEEMED TO BE DELIVERED WHEN DEPOSITED IN THE
UNITED STATES MAIL OR WITH ANY PRIVATE EXPRESS MAIL SERVICE, POSTAGE OR DELIVERY
FEE PREPAID, AND SHALL BE DIRECTED TO EACH SUCH STOCKHOLDER AT HIS ADDRESS, AS
IT APPEARS ON THE RECORDS OF THE STOCKHOLDERS OF THE CORPORATION, UNLESS HE
SHALL HAVE PREVIOUSLY FILED WITH THE SECRETARY OF THE CORPORATION A WRITTEN
REQUEST THAT NOTICES INTENDED FOR HIM BE MAILED TO SOME OTHER ADDRESS, IN WHICH
CASE, IT SHALL BE MAILED TO THE ADDRESS DESIGNATED IN SUCH REQUEST.
SECTION 1.4. FIXING DATE OF RECORD. (A) IN ORDER THAT THE CORPORATION
MAY DETERMINE THE STOCKHOLDERS ENTITLED TO NOTICE OF OR TO VOTE AT ANY MEETING
OF STOCKHOLDERS, OR ANY ADJOURNMENT
THEREOF, THE BOARD OF DIRECTORS MAY FIX A RECORD DATE, WHICH RECORD DATE SHALL
NOT PRECEDE THE DATE UPON WHICH THE RESOLUTION FIXING THE RECORD DATE IS ADOPTED
BY THE BOARD OF DIRECTORS, AND WHICH RECORD DATE SHALL NOT BE MORE THAN SIXTY
NOR LESS THAN TEN DAYS BEFORE THE DATE OF SUCH MEETING. IF NO RECORD DATE IS
FIXED BY THE BOARD OF DIRECTORS, THE RECORD DATE FOR DETERMINING STOCKHOLDERS
ENTITLED TO NOTICE OF, OR TO VOTE AT, A MEETING OF STOCKHOLDERS SHALL BE AT THE
CLOSE OF BUSINESS ON THE DAY NEXT PRECEDING THE DAY ON WHICH NOTICE IS GIVEN, OR
IF NOTICE IS WAIVED, AT THE CLOSE OF BUSINESS ON THE DAY NEXT PRECEDING THE DAY
ON WHICH THE MEETING IS HELD. A DETERMINATION OF STOCKHOLDERS OF RECORD
ENTITLED TO NOTICE OF, OR TO VOTE AT, A MEETING OF STOCKHOLDERS SHALL APPLY TO
ANY ADJOURNMENT OF THE MEETING; PROVIDED, HOWEVER, THAT THE BOARD OF DIRECTORS
MAY FIX A NEW RECORD DATE FOR THE ADJOURNED MEETING.
(B) IN ORDER THAT THE CORPORATION MAY DETERMINE THE STOCKHOLDERS
ENTITLED TO CONSENT TO CORPORATE ACTION IN WRITING WITHOUT A MEETING (TO THE
EXTENT THAT SUCH ACTION BY WRITTEN CONSENT IS PERMITTED BY LAW, THE CERTIFICATE
OF INCORPORATION AND THESE BY-LAWS), THE BOARD OF DIRECTORS MAY FIX A RECORD
DATE, WHICH RECORD DATE SHALL NOT PRECEDE THE DATE UPON WHICH THE RESOLUTION
FIXING THE RECORD DATE IS ADOPTED BY THE BOARD OF DIRECTORS, AND WHICH DATE
SHALL NOT BE MORE THAN TEN DAYS AFTER THE DATE UPON WHICH THE RESOLUTION FIXING
THE RECORD DATE IS ADOPTED BY THE BOARD OF DIRECTORS. IF NO RECORD DATE HAS
BEEN FIXED BY THE BOARD OF DIRECTORS, THE RECORD DATE FOR DETERMINING
STOCKHOLDERS ENTITLED TO CONSENT TO CORPORATE ACTION IN WRITING WITHOUT A
MEETING, WHEN NO PRIOR ACTION BY THE BOARD OF DIRECTORS IS REQUIRED BY LAW,
SHALL BE THE FIRST DATE ON WHICH A SIGNED WRITTEN CONSENT SETTING FORTH THE
ACTION TAKEN OR PROPOSED TO BE TAKEN IS DELIVERED TO THE CORPORATION BY DELIVERY
TO ITS REGISTERED OFFICE IN ITS STATE OF INCORPORATION, ITS PRINCIPAL PLACE OF
BUSINESS, OR AN OFFICER OR AGENT OF THE CORPORATION HAVING CUSTODY OF THE BOOK
IN WHICH PROCEEDINGS OF MEETINGS OF STOCKHOLDERS ARE RECORDED. DELIVERY MADE TO
THE CORPORATION'S REGISTERED OFFICE SHALL BE BY HAND OR BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED. IF NO RECORD DATE HAS BEEN FIXED BY
THE BOARD OF DIRECTORS AND PRIOR ACTION BY THE BOARD OF DIRECTORS IS REQUIRED BY
LAW, THE RECORD DATE FOR DETERMINING STOCKHOLDERS ENTITLED TO CONSENT TO
CORPORATE ACTION IN WRITING WITHOUT A MEETING SHALL BE AT THE CLOSE OF BUSINESS
ON THE DAY ON WHICH THE BOARD OF DIRECTORS ADOPTS THE RESOLUTION TAKING SUCH
PRIOR ACTION.
(C) IN ORDER THAT THE CORPORATION MAY DETERMINE THE STOCKHOLDERS
ENTITLED TO RECEIVE PAYMENT OF ANY DIVIDEND OR OTHER DISTRIBUTION OR ALLOTMENT
OF ANY RIGHTS OR THE STOCKHOLDERS ENTITLED TO EXERCISE ANY RIGHTS IN RESPECT OF
ANY CHANGE, CONVERSION OR EXCHANGE OF STOCK, OR FOR THE PURPOSE OF ANY OTHER
LAWFUL ACTION, THE BOARD OF DIRECTORS MAY FIX A RECORD DATE, WHICH RECORD DATE
SHALL NOT PRECEDE THE DATE UPON WHICH THE RESOLUTION FIXING THE RECORD DATE IS
ADOPTED, AND WHICH RECORD DATE SHALL BE NOT MORE THAN SIXTY DAYS PRIOR TO SUCH
ACTION. IF NO RECORD DATE IS FIXED, THE RECORD DATE FOR DETERMINING
STOCKHOLDERS FOR ANY SUCH PURPOSE SHALL BE AT THE CLOSE OF BUSINESS ON THE DAY
ON WHICH THE BOARD OF DIRECTORS ADOPTS THE RESOLUTION RELATING THERETO.
SECTION 1.5. INSPECTORS. AT EACH MEETING OF THE STOCKHOLDERS, THE POLLS
SHALL BE OPENED AND CLOSED AND THE PROXIES AND BALLOTS SHALL BE RECEIVED AND BE
TAKEN IN CHARGE. ALL QUESTIONS TOUCHING ON THE QUALIFICATION OF VOTERS AND THE
VALIDITY OF PROXIES AND THE ACCEPTANCE OR REJECTION OF VOTES, SHALL BE DECIDED
BY ONE OR MORE INSPECTORS. SUCH INSPECTORS SHALL BE APPOINTED BY THE BOARD OF
DIRECTORS BEFORE OR AT THE MEETING, OR, IF NO SUCH APPOINTMENT SHALL HAVE BEEN
MADE, THEN BY THE PRESIDING OFFICER AT THE MEETING. IF FOR ANY REASON ANY OF
THE INSPECTORS PREVIOUSLY APPOINTED SHALL FAIL TO ATTEND OR REFUSE OR BE UNABLE
TO SERVE, INSPECTORS IN PLACE OF ANY SO FAILING TO ATTEND OR REFUSING OR UNABLE
TO SERVE SHALL BE APPOINTED IN LIKE MANNER.
SECTION 1.6. QUORUM. AT ANY MEETING OF THE STOCKHOLDERS THE HOLDERS OF
SUCH NUMBER OF ALL OF THE OUTSTANDING SHARES OF THE CAPITAL STOCK OF THE
CORPORATION TAKEN TOGETHER AS A SINGLE CLASS AS REPRESENTS ONE-THIRD OF ALL
VOTES THAT MAY BE MADE AT SUCH MEETING, PRESENT IN PERSON OR REPRESENTED BY
PROXY, SHALL CONSTITUTE A QUORUM OF THE STOCKHOLDERS FOR ALL PURPOSES, UNLESS
THE REPRESENTATION OF A LARGER NUMBER SHALL BE REQUIRED BY LAW, AND, IN THAT
CASE, THE REPRESENTATION OF THE NUMBER SO REQUIRED SHALL CONSTITUTE A QUORUM.
IF THE HOLDERS OF THE AMOUNT OF STOCK NECESSARY TO CONSTITUTE A QUORUM SHALL
FAIL TO ATTEND IN PERSON OR BY PROXY AT THE TIME AND PLACE FIXED IN ACCORDANCE
WITH THESE BY-LAWS FOR AN ANNUAL OR SPECIAL MEETING, A MAJORITY IN INTEREST OF
THE STOCKHOLDERS PRESENT IN PERSON OR BY PROXY MAY ADJOURN, FROM TIME TO TIME,
WITHOUT NOTICE OTHER THAN BY ANNOUNCEMENT AT THE MEETING, UNTIL HOLDERS OF THE
AMOUNT OF STOCK REQUISITE TO CONSTITUTE A QUORUM SHALL ATTEND. AT ANY SUCH
ADJOURNED MEETING AT WHICH A QUORUM SHALL BE PRESENT, ANY BUSINESS MAY BE
TRANSACTED WHICH MIGHT HAVE BEEN TRANSACTED AT THE MEETING AS ORIGINALLY
NOTIFIED.
SECTION 1.7. BUSINESS. THE CHAIRMAN OF THE BOARD, IF ANY, THE PRESIDENT,
OR IN HIS ABSENCE THE VICE-CHAIRMAN, IF ANY, OR AN EXECUTIVE VICE PRESIDENT, IN
THE ORDER NAMED, SHALL CALL MEETINGS OF THE STOCKHOLDERS TO ORDER, AND SHALL ACT
AS CHAIRMAN OF SUCH MEETING; PROVIDED, HOWEVER, THAT THE BOARD OF DIRECTORS OR
EXECUTIVE COMMITTEE MAY APPOINT ANY STOCKHOLDER TO ACT AS CHAIRMAN OF ANY
MEETING IN THE ABSENCE OF THE CHAIRMAN OF THE BOARD. THE SECRETARY OF THE
CORPORATION SHALL ACT AS SECRETARY AT ALL MEETINGS OF THE STOCKHOLDERS, BUT IN
THE ABSENCE OF THE SECRETARY AT ANY MEETING OF THE STOCKHOLDERS, THE PRESIDING
OFFICER MAY APPOINT ANY PERSON TO ACT AS SECRETARY OF THE MEETING.
SECTION 1.8. STOCKHOLDER PROPOSALS. NO PROPOSAL BY A STOCKHOLDER SHALL BE
PRESENTED FOR VOTE AT A SPECIAL OR ANNUAL MEETING OF STOCKHOLDERS UNLESS SUCH
STOCKHOLDER SHALL, NOT LATER THAN THE CLOSE OF BUSINESS ON THE FIFTH DAY
FOLLOWING THE DATE ON WHICH NOTICE OF THE MEETING IS FIRST GIVEN TO
STOCKHOLDERS, PROVIDE THE BOARD OF DIRECTORS OR THE SECRETARY OF THE CORPORATION
WITH WRITTEN NOTICE OF INTENTION TO PRESENT A PROPOSAL FOR ACTION AT THE
FORTHCOMING MEETING OF STOCKHOLDERS, WHICH NOTICE SHALL INCLUDE THE NAME AND
ADDRESS OF SUCH STOCKHOLDER, THE NUMBER OF VOTING SECURITIES THAT HE HOLDS OF
RECORD AND THAT HE HOLDS BENEFICIALLY, THE TEXT OF THE PROPOSAL TO BE PRESENTED
TO THE MEETING AND A STATEMENT IN SUPPORT OF THE PROPOSAL. ANY STOCKHOLDER
WHO WAS A STOCKHOLDER OF RECORD ON THE APPLICABLE RECORD DATE MAY MAKE ANY OTHER
PROPOSAL AT AN ANNUAL MEETING OR SPECIAL MEETING OF STOCKHOLDERS AND THE SAME
MAY BE DISCUSSED AND CONSIDERED, BUT UNLESS STATED IN WRITING AND FILED WITH THE
BOARD OF DIRECTORS OR THE SECRETARY PRIOR TO THE DATE SET FORTH HEREINABOVE,
SUCH PROPOSAL SHALL BE LAID OVER FOR ACTION AT AN ADJOURNED, SPECIAL, OR ANNUAL
MEETING OF THE STOCKHOLDERS TAKING PLACE SIXTY DAYS OR MORE THEREAFTER. THIS
PROVISION SHALL NOT PREVENT THE CONSIDERATION AND APPROVAL OR DISAPPROVAL AT THE
ANNUAL MEETING OF REPORTS OF OFFICERS, DIRECTORS, AND COMMITTEES, BUT IN
CONNECTION WITH SUCH REPORTS, NO NEW BUSINESS PROPOSED BY A STOCKHOLDER, QUA
STOCKHOLDER, SHALL BE ACTED UPON AT SUCH ANNUAL MEETING UNLESS STATED AND FILED
AS HEREIN PROVIDED.
NOTWITHSTANDING ANY OTHER PROVISION OF THESE BY-LAWS, THE CORPORATION SHALL
BE UNDER NO OBLIGATION TO INCLUDE ANY STOCKHOLDER PROPOSAL IN ITS PROXY
STATEMENT MATERIALS OR OTHERWISE PRESENT ANY SUCH PROPOSAL TO STOCKHOLDERS AT A
SPECIAL OR ANNUAL MEETING OF STOCKHOLDERS IF THE BOARD OF DIRECTORS REASONABLY
BELIEVES THE PROPONENTS THEREOF HAVE NOT COMPLIED WITH SECTIONS 13 OR 14 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THE RULES AND REGULATIONS
THEREUNDER; NOR SHALL THE CORPORATION BE REQUIRED TO INCLUDE ANY STOCKHOLDER
PROPOSAL NOT REQUIRED TO BE INCLUDED IN ITS PROXY MATERIALS TO STOCKHOLDERS IN
ACCORDANCE WITH ANY SUCH SECTION, RULE OR REGULATION.
SECTION 1.9. PROXIES. AT ALL MEETINGS OF STOCKHOLDERS, A STOCKHOLDER
ENTITLED TO VOTE MAY VOTE EITHER IN PERSON OR BY PROXY EXECUTED IN WRITING BY
THE STOCKHOLDER OR BY HIS DULY AUTHORIZED ATTORNEY-IN-FACT. SUCH PROXY SHALL BE
FILED WITH THE SECRETARY BEFORE OR AT THE TIME OF THE MEETING. NO PROXY SHALL
BE VALID AFTER ELEVEN MONTHS FROM THE DATE OF ITS EXECUTION, UNLESS OTHERWISE
PROVIDED IN THE PROXY.
SECTION 1.10. VOTING BY BALLOT. THE VOTES FOR DIRECTORS, AND UPON THE
DEMAND OF ANY STOCKHOLDER OR WHEN REQUIRED BY LAW, THE VOTES UPON ANY QUESTION
BEFORE THE MEETING, SHALL BE BY
BALLOT.
SECTION 1.11. VOTING LISTS. THE OFFICER WHO HAS CHARGE OF THE STOCK
LEDGER OF THE CORPORATION SHALL PREPARE AND MAKE, AT LEAST TEN DAYS BEFORE EVERY
MEETING OF STOCKHOLDERS, A COMPLETE LIST OF THE STOCKHOLDERS ENTITLED TO VOTE AT
THE MEETING, ARRANGED IN ALPHABETICAL ORDER, AND SHOWING THE ADDRESS OF EACH
STOCKHOLDER AND THE NUMBER OF SHARES OF STOCK REGISTERED IN THE NAME OF EACH
STOCKHOLDER. SUCH LIST SHALL BE OPEN TO THE EXAMINATION OF ANY STOCKHOLDER, FOR
ANY PURPOSE GERMANE TO THE MEETING, DURING ORDINARY BUSINESS HOURS FOR A PERIOD
OF AT LEAST TEN DAYS PRIOR TO THE MEETING, EITHER AT A PLACE WITHIN THE CITY
WHERE THE MEETING IS TO BE HELD, WHICH PLACE SHALL BE SPECIFIED IN THE NOTICE OF
THE MEETING, OR IF NOT SO SPECIFIED, AT THE PLACE WHERE THE MEETING IS TO BE
HELD. THE LIST SHALL ALSO BE PRODUCED AND KEPT AT THE TIME AND PLACE OF THE
MEETING DURING THE WHOLE TIME THEREOF AND MAY BE INSPECTED BY ANY STOCKHOLDER
WHO IS PRESENT.
SECTION 1.12. PLACE OF MEETING. THE BOARD OF DIRECTORS MAY DESIGNATE ANY
PLACE, EITHER WITHIN OR WITHOUT THE STATE OF INCORPORATION, AS THE PLACE OF
MEETING FOR ANY ANNUAL MEETING OR ANY SPECIAL MEETING CALLED BY THE BOARD OF
DIRECTORS. IF NO DESIGNATION IS MADE OR IF A SPECIAL MEETING IS OTHERWISE
CALLED, THE PLACE OF MEETING SHALL BE THE PRINCIPAL OFFICE OF THE CORPORATION.
SECTION 1.13. VOTING OF STOCK OF CERTAIN HOLDERS. SHARES OF CAPITAL STOCK
OF THE CORPORATION STANDING IN THE NAME OF ANOTHER CORPORATION, DOMESTIC OR
FOREIGN, MAY BE VOTED BY SUCH OFFICER, AGENT, OR PROXY AS THE BY-LAWS OF SUCH
CORPORATION MAY PRESCRIBE, OR IN THE ABSENCE OF SUCH PROVISION, AS THE BOARD OF
DIRECTORS OF SUCH CORPORATION MAY DETERMINE.
SHARES OF CAPITAL STOCK OF THE CORPORATION STANDING IN THE NAME OF A
DECEASED PERSON, A MINOR WARD OR AN INCOMPETENT PERSON MAY BE VOTED BY HIS
ADMINISTRATOR, EXECUTOR, COURT-APPOINTED GUARDIAN OR CONSERVATOR, EITHER IN
PERSON OR BY PROXY, WITHOUT A TRANSFER OF SUCH STOCK INTO THE NAME OF SUCH
ADMINISTRATOR, EXECUTOR, COURT-APPOINTED GUARDIAN OR CONSERVATOR. SHARES OF
CAPITAL STOCK OF THE CORPORATION STANDING IN THE NAME OF A TRUSTEE MAY BE VOTED
BY HIM, EITHER IN PERSON OR BY PROXY.
SHARES OF CAPITAL STOCK OF THE CORPORATION STANDING IN THE NAME OF A
RECEIVER MAY BE VOTED, EITHER IN PERSON OR BY PROXY, BY SUCH RECEIVER, AND STOCK
HELD BY OR UNDER THE CONTROL OF A RECEIVER MAY BE VOTED BY SUCH RECEIVER WITHOUT
THE TRANSFER THEREOF INTO HIS NAME IF AUTHORITY TO DO SO IS CONTAINED IN ANY
APPROPRIATE ORDER OF THE COURT BY WHICH SUCH RECEIVER WAS APPOINTED.
A STOCKHOLDER WHOSE STOCK IS PLEDGED SHALL BE ENTITLED TO VOTE SUCH STOCK,
EITHER IN PERSON OR BY PROXY, UNTIL THE STOCK HAS BEEN TRANSFERRED INTO THE NAME
OF THE PLEDGEE, AND THEREAFTER THE PLEDGEE SHALL BE ENTITLED TO VOTE, EITHER IN
PERSON OR BY PROXY, THE STOCK SO TRANSFERRED.
SHARES OF ITS OWN CAPITAL STOCK BELONGING TO THIS CORPORATION SHALL NOT BE
VOTED, DIRECTLY OR INDIRECTLY, AT ANY MEETING AND SHALL NOT BE COUNTED IN
DETERMINING THE TOTAL NUMBER OF OUTSTANDING STOCK AT ANY GIVEN TIME, BUT SHARES
OF ITS OWN STOCK HELD BY IT IN A FIDUCIARY CAPACITY MAY BE VOTED AND SHALL BE
COUNTED IN DETERMINING THE TOTAL NUMBER OF OUTSTANDING STOCK AT ANY GIVEN TIME.
ARTICLE II
BOARD OF DIRECTORS
SECTION 2.1. GENERAL POWERS. THE BUSINESS, AFFAIRS, AND THE PROPERTY OF
THE CORPORATION SHALL BE MANAGED AND CONTROLLED BY THE BOARD OF DIRECTORS (THE
"BOARD"), AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED BY LAW, THE CERTIFICATE OF
INCORPORATION OR THESE BY-LAWS, ALL OF THE POWERS OF THE CORPORATION SHALL BE
VESTED IN THE BOARD.
SECTION 2.2. NUMBER OF DIRECTORS. THE NUMBER OF DIRECTORS WHICH SHALL
CONSTITUTE THE WHOLE BOARD SHALL BE NOT FEWER THAN TWO NOR MORE THAN FIVE.
WITHIN THE LIMITS ABOVE SPECIFIED, THE NUMBER OF DIRECTORS SHALL BE DETERMINED
BY THE BOARD OF DIRECTORS PURSUANT TO A RESOLUTION ADOPTED BY A MAJORITY OF THE
DIRECTORS THEN IN OFFICE.
SECTION 2.3. ELECTION, TERM AND REMOVAL. DIRECTORS SHALL BE ELECTED AT
THE ANNUAL MEETING OF STOCKHOLDERS TO SUCCEED THOSE DIRECTORS WHOSE TERMS HAVE
EXPIRED. EACH DIRECTOR SHALL HOLD OFFICE FOR THE TERM FOR WHICH ELECTED AND
UNTIL HIS OR HER SUCCESSOR SHALL BE ELECTED AND QUALIFIED. DIRECTORS NEED NOT BE
STOCKHOLDERS. A DIRECTOR MAY BE REMOVED FROM OFFICE AT A MEETING EXPRESSLY FOR
THAT PURPOSE BY THE VOTE OF STOCKHOLDERS HOLDING NOT LESS THAN TWO-THIRDS OF THE
SHARES ENTITLED TO VOTE AT AN ELECTION OF DIRECTORS.
SECTION 2.4. VACANCIES. VACANCIES IN THE BOARD OF DIRECTORS, INCLUDING
VACANCIES RESULTING FROM AN INCREASE IN THE NUMBER OF DIRECTORS, MAY BE FILLED
BY THE AFFIRMATIVE VOTE OF A MAJORITY OF THE REMAINING DIRECTORS THEN IN OFFICE,
THOUGH LESS THAN A QUORUM; EXCEPT THAT VACANCIES RESULTING FROM REMOVAL FROM
OFFICE BY A VOTE OF THE STOCKHOLDERS MAY BE FILLED BY THE STOCKHOLDERS AT THE
SAME MEETING AT WHICH SUCH REMOVAL OCCURS PROVIDED THAT THE HOLDERS OF NOT LESS
THAN TWO-THIRDS OF THE OUTSTANDING CAPITAL STOCK OF THE CORPORATION (ASSESSED
UPON THE BASIS OF VOTES AND NOT ON THE BASIS OF NUMBER OF SHARES) ENTITLED TO
VOTE FOR THE ELECTION OF DIRECTORS, VOTING TOGETHER AS A SINGLE CLASS, SHALL
VOTE FOR EACH REPLACEMENT DIRECTOR. ALL DIRECTORS ELECTED TO FILL VACANCIES
SHALL HOLD OFFICE FOR A TERM EXPIRING AT THE TIME OF THE NEXT ANNUAL MEETING OF
STOCKHOLDERS AND UPON ELECTION AND QUALIFICATION OF HIS SUCCESSOR. NO DECREASE
IN THE NUMBER OF DIRECTORS CONSTITUTING THE BOARD OF DIRECTORS SHALL SHORTEN THE
TERM OF AN INCUMBENT DIRECTOR.
SECTION 2.5. RESIGNATIONS. ANY DIRECTOR OF THE CORPORATION MAY RESIGN AT
ANY TIME BY GIVING WRITTEN NOTICE TO THE PRESIDENT OR TO THE SECRETARY OF THE
CORPORATION. THE RESIGNATION OF ANY DIRECTOR SHALL TAKE EFFECT AT THE TIME
SPECIFIED THEREIN AND, UNLESS OTHERWISE SPECIFIED THEREIN, THE ACCEPTANCE OF
SUCH RESIGNATION SHALL NOT BE NECESSARY TO MAKE IT EFFECTIVE.
SECTION 2.6. PLACE OF MEETINGS, ETC. THE BOARD OF DIRECTORS MAY HOLD ITS
MEETINGS, AND MAY HAVE AN OFFICE AND KEEP THE BOOKS OF THE CORPORATION (EXCEPT
AS OTHERWISE MAY BE PROVIDED FOR BY LAW), IN SUCH PLACE OR PLACES IN OR OUTSIDE
THE STATE OF INCORPORATION AS THE BOARD FROM TIME TO TIME MAY DETERMINE.
SECTION 2.7. REGULAR MEETINGS. REGULAR MEETINGS OF THE BOARD OF DIRECTORS
SHALL BE HELD AS SOON AS PRACTICABLE AFTER ADJOURNMENT OF THE ANNUAL MEETING OF
STOCKHOLDERS AT SUCH TIME AND PLACE AS THE BOARD OF DIRECTORS MAY FIX. NO
NOTICE SHALL BE REQUIRED FOR ANY SUCH REGULAR MEETING OF THE BOARD.
SECTION 2.8. SPECIAL MEETINGS. SPECIAL MEETINGS OF THE BOARD OF DIRECTORS
SHALL BE HELD AT PLACES AND TIMES FIXED BY RESOLUTION OF THE BOARD OF DIRECTORS,
OR UPON CALL OF THE CHAIRMAN OF THE BOARD, IF ANY, OR VICE-CHAIRMAN OF THE
BOARD, IF ANY, THE PRESIDENT, AN EXECUTIVE VICE PRESIDENT OR TWO-THIRDS OF THE
DIRECTORS THEN IN OFFICE.
THE SECRETARY OR OFFICER PERFORMING THE SECRETARY'S DUTIES SHALL GIVE NOT
LESS THAN TWENTY-FOUR HOURS' NOTICE BY LETTER, TELEGRAPH OR TELEPHONE (OR IN
PERSON) OF ALL SPECIAL MEETINGS OF THE BOARD OF DIRECTORS, PROVIDED THAT NOTICE
NEED NOT GIVEN OF THE ANNUAL MEETING OR OF REGULAR MEETINGS HELD AT TIMES AND
PLACES FIXED BY RESOLUTION OF THE BOARD. MEETINGS MAY BE HELD AT ANY TIME
WITHOUT NOTICE IF ALL OF THE DIRECTORS ARE PRESENT, OR IF THOSE NOT PRESENT
WAIVE NOTICE IN WRITING EITHER BEFORE OR AFTER THE MEETING. THE NOTICE OF
MEETINGS OF THE BOARD NEED NOT STATE THE PURPOSE OF THE MEETING.
SECTION 2.9. PARTICIPATION BY CONFERENCE TELEPHONE. MEMBERS OF THE BOARD
OF DIRECTORS OF THE CORPORATION, OR ANY COMMITTEE THEREOF, MAY PARTICIPATE IN A
REGULAR OR SPECIAL OR ANY OTHER MEETING OF THE BOARD OR COMMITTEE BY MEANS OF
CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT BY MEANS OF WHICH ALL
PERSONS PARTICIPATING IN THE MEETING CAN HEAR EACH OTHER, AND SUCH PARTICIPATION
SHALL CONSTITUTE PRESENCE IN PERSON AT SUCH MEETING.
SECTION 2.10. ACTION BY WRITTEN CONSENT. ANY ACTION REQUIRED OR PERMITTED
TO BE TAKEN AT ANY MEETING OF THE BOARD OF DIRECTORS, OR OF ANY COMMITTEE
THEREOF, MAY BE TAKEN WITHOUT A MEETING IF PRIOR OR SUBSEQUENT TO SUCH ACTION
ALL THE MEMBERS OF THE BOARD OR SUCH COMMITTEE, AS THE CASE MAY BE, CONSENT
THERETO IN WRITING, AND THE WRITING OR WRITINGS ARE FILED WITH THE MINUTES OF
THE PROCEEDINGS OF THE BOARD OR COMMITTEE.
SECTION 2.11. QUORUM. A MAJORITY OF THE TOTAL NUMBER OF DIRECTORS THEN IN
OFFICE SHALL CONSTITUTE A QUORUM FOR THE TRANSACTION OF BUSINESS; BUT IF AT ANY
MEETING OF THE BOARD THERE BE LESS THAN A QUORUM PRESENT, A MAJORITY OF THOSE
PRESENT MAY ADJOURN THE MEETING FROM TIME TO TIME.
SECTION 2.12. BUSINESS. BUSINESS SHALL BE TRANSACTED AT MEETINGS OF THE
BOARD OF DIRECTORS IN SUCH ORDER AS THE BOARD MAY DETERMINE. AT ALL MEETINGS OF
THE BOARD OF DIRECTORS, THE CHAIRMAN OF THE BOARD, IF ANY, THE PRESIDENT, OR IN
HIS ABSENCE THE VICE-CHAIRMAN, IF ANY, OR AN EXECUTIVE VICE PRESIDENT, IN THE
ORDER NAMED, SHALL PRESIDE.
SECTION 2.13. INTEREST OF DIRECTORS IN CONTRACTS. (A) NO CONTRACT OR
TRANSACTION BETWEEN THE CORPORATION AND ONE OR MORE OF ITS DIRECTORS OR
OFFICERS, OR BETWEEN THE CORPORATION AND ANY OTHER CORPORATION, PARTNERSHIP,
ASSOCIATION, OR OTHER ORGANIZATION IN WHICH ONE OR MORE OF THE CORPORATION'S
DIRECTORS OR OFFICERS, ARE DIRECTORS OR OFFICERS, OR HAVE A FINANCIAL INTEREST,
SHALL BE VOID OR VOIDABLE SOLELY FOR THIS REASON, OR SOLELY BECAUSE THE DIRECTOR
OR OFFICER IS PRESENT AT OR PARTICIPATES IN THE MEETING OF THE BOARD OR
COMMITTEE WHICH AUTHORIZES THE CONTRACT OR TRANSACTION, OR SOLELY BECAUSE HIS OR
THEIR VOTES ARE COUNTED FOR SUCH PURPOSE, IF:
(1) THE MATERIAL FACTS AS TO HIS RELATIONSHIP OR INTEREST AND AS TO THE
CONTRACT OR TRANSACTION ARE DISCLOSED OR ARE KNOWN TO THE BOARD OF DIRECTORS OR
THE COMMITTEE, AND THE BOARD OR COMMITTEE IN GOOD FAITH AUTHORIZES THE CONTRACT
OR TRANSACTION BY THE AFFIRMATIVE VOTES OF A MAJORITY OF THE DISINTERESTED
DIRECTORS, EVEN THOUGH THE DISINTERESTED DIRECTORS BE LESS THAN A QUORUM; OR
(2) THE MATERIAL FACTS AS TO HIS RELATIONSHIP OR INTEREST AND AS TO THE
CONTRACT OR TRANSACTION ARE DISCLOSED OR ARE KNOWN TO THE STOCKHOLDERS ENTITLED
TO VOTE THEREON, AND THE CONTRACT OR TRANSACTION IS SPECIFICALLY APPROVED IN
GOOD FAITH BY VOTE OF THE STOCKHOLDERS; OR
(3) THE CONTRACT OR TRANSACTION IS FAIR AS TO THE CORPORATION AS OF THE TIME
IT IS AUTHORIZED, APPROVED OR RATIFIED, BY THE BOARD OF DIRECTORS, A COMMITTEE
OF THE BOARD OF DIRECTORS OR THE STOCKHOLDERS.
(4) INTERESTED DIRECTORS MAY BE COUNTED IN DETERMINING THE PRESENCE OF A
QUORUM AT A MEETING OF THE BOARD OF DIRECTORS OR OF A COMMITTEE WHICH AUTHORIZES
THE CONTRACT OR TRANSACTION.
SECTION 2.14. COMPENSATION OF DIRECTORS. EACH DIRECTOR OF THE CORPORATION
WHO IS NOT A SALARIED OFFICER OR EMPLOYEE OF THE CORPORATION, OR OF A SUBSIDIARY
OF THE CORPORATION, SHALL RECEIVE SUCH ALLOWANCES FOR SERVING AS A DIRECTOR AND
SUCH FEES FOR ATTENDANCE AT MEETINGS OF THE BOARD OF DIRECTORS OR THE EXECUTIVE
COMMITTEE OR ANY OTHER COMMITTEE APPOINTED BY THE BOARD AS THE BOARD MAY FROM
TIME TO TIME DETERMINE.
SECTION 2.15. LOANS TO OFFICERS OR EMPLOYEES. THE BOARD OF DIRECTORS MAY
LEND MONEY TO, GUARANTEE ANY OBLIGATION OF, OR OTHERWISE ASSIST, ANY OFFICER OR
OTHER EMPLOYEE OF THE CORPORATION OR OF ANY SUBSIDIARY, WHETHER OR NOT SUCH
OFFICER OR EMPLOYEE IS ALSO A DIRECTOR OF THE CORPORATION, WHENEVER, IN THE
JUDGMENT OF THE DIRECTORS, SUCH LOAN, GUARANTEE, OR ASSISTANCE MAY REASONABLY BE
EXPECTED TO BENEFIT THE CORPORATION; PROVIDED, HOWEVER, THAT ANY SUCH LOAN,
GUARANTEE, OR OTHER ASSISTANCE GIVEN TO AN OFFICER OR EMPLOYEE WHO IS ALSO A
DIRECTOR OF THE CORPORATION MUST BE AUTHORIZED BY A MAJORITY OF THE ENTIRE BOARD
OF DIRECTORS. ANY SUCH LOAN, GUARANTEE, OR OTHER ASSISTANCE MAY BE MADE WITH OR
WITHOUT INTEREST AND MAY BE UNSECURED OR SECURED IN SUCH MANNER AS THE BOARD OF
DIRECTORS SHALL APPROVE, INCLUDING, BUT NOT LIMITED TO, A PLEDGE OF SHARES OF
THE CORPORATION, AND MAY BE MADE UPON SUCH OTHER TERMS AND CONDITIONS AS THE
BOARD OF DIRECTORS MAY DETERMINE.
SECTION 2.16. NOMINATION. SUBJECT TO THE RIGHTS OF HOLDERS OF ANY CLASS
OR SERIES OF STOCK HAVING A PREFERENCE OVER THE COMMON STOCK AS TO DIVIDENDS OR
UPON LIQUIDATION, NOMINATIONS FOR
THE ELECTION OF DIRECTORS MAY BE MADE BY THE BOARD OF DIRECTORS OR BY ANY
STOCKHOLDER ENTITLED TO VOTE IN THE ELECTION OF DIRECTORS GENERALLY. HOWEVER,
ANY STOCKHOLDER ENTITLED TO VOTE IN THE ELECTION OF DIRECTORS GENERALLY MAY
NOMINATE ONE OR MORE PERSONS FOR ELECTION AS DIRECTORS AT A MEETING ONLY IF
WRITTEN NOTICE OF SUCH STOCKHOLDER'S INTENT TO MAKE SUCH NOMINATION OR
NOMINATIONS HAS BEEN GIVEN, EITHER BY PERSONAL DELIVERY OR BY UNITED STATES
MAIL, POSTAGE PREPAID, TO THE SECRETARY OF THE CORPORATION NOT LATER THAN (I)
WITH RESPECT TO AN ELECTION TO BE HELD AT AN ANNUAL MEETING OF STOCKHOLDERS, THE
CLOSE OF BUSINESS ON THE LAST DAY OF THE EIGHTH MONTH AFTER THE IMMEDIATELY
PRECEDING ANNUAL MEETING OF STOCKHOLDERS, AND (II) WITH RESPECT TO AN ELECTION
TO BE HELD AT A SPECIAL MEETING OF STOCKHOLDERS FOR THE ELECTION OF DIRECTORS,
THE CLOSE OF BUSINESS ON THE FIFTH DAY FOLLOWING THE DATE ON WHICH NOTICE OF
SUCH MEETING IS FIRST GIVEN TO STOCKHOLDERS. EACH SUCH NOTICE SHALL SET FORTH:
(A) THE NAME AND ADDRESS OF THE STOCKHOLDER WHO INTENDS TO MAKE THE NOMINATION
AND OF THE PERSON OR PERSONS TO BE NOMINATED; (B) A REPRESENTATION THAT THE
STOCKHOLDER IS A HOLDER OF RECORD OF STOCK OF THE CORPORATION ENTITLED TO VOTE
AT SUCH MEETING AND INTENDS TO APPEAR IN PERSON OR BY PROXY AT THE MEETING TO
NOMINATE THE PERSON OR PERSONS SPECIFIED IN THE NOTICE; (C) A DESCRIPTION OF ALL
ARRANGEMENTS OR UNDERSTANDINGS BETWEEN THE STOCKHOLDER AND EACH NOMINEE AND ANY
OTHER PERSON OR PERSONS (NAMING SUCH PERSON OR PERSONS) PURSUANT TO WHICH THE
NOMINATION OR NOMINATIONS ARE TO BE MADE BY THE STOCKHOLDER; (D) SUCH OTHER
INFORMATION REGARDING EACH NOMINEE PROPOSED BY SUCH STOCKHOLDER AS WOULD BE
REQUIRED TO BE INCLUDED IN A PROXY STATEMENT FILED PURSUANT TO THE PROXY RULES
OF THE SECURITIES AND EXCHANGE COMMISSION, HAD THE NOMINEE BEEN NOMINATED, OR
INTENDED TO BE NOMINATED, BY THE BOARD OF DIRECTORS, AND; (E) THE CONSENT OF
EACH NOMINEE TO SERVE AS A DIRECTOR OF THE CORPORATION IF SO ELECTED. THE
PRESIDING OFFICER AT THE MEETING MAY REFUSE TO ACKNOWLEDGE THE NOMINATION OF ANY
PERSON NOT MADE IN COMPLIANCE WITH THE FOREGOING PROCEDURE.
ARTICLE III
COMMITTEES
SECTION 3.1. COMMITTEES. THE BOARD OF DIRECTORS, BY RESOLUTION ADOPTED BY
A MAJORITY OF THE NUMBER OF DIRECTORS THEN FIXED BY THESE BY-LAWS OR RESOLUTION
THERETO, MAY ESTABLISH SUCH STANDING OR SPECIAL COMMITTEES OF THE BOARD AS IT
MAY DEEM ADVISABLE, AND THE MEMBERS, TERMS, AND AUTHORITY OF SUCH COMMITTEES
SHALL BE SET FORTH IN THE RESOLUTIONS ESTABLISHING SUCH COMMITTEE.
SECTION 3.2. EXECUTIVE COMMITTEE NUMBER AND TERM OF OFFICE. THE BOARD OF
DIRECTORS MAY, AT ANY MEETING, BY MAJORITY VOTE OF THE BOARD OF DIRECTORS, ELECT
FROM THE DIRECTORS AN EXECUTIVE COMMITTEE. THE EXECUTIVE COMMITTEE SHALL
CONSIST OF SUCH NUMBER OF MEMBERS AS MAY BE FIXED FROM TIME TO TIME BY
RESOLUTION OF THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS MAY DESIGNATE A
CHAIRMAN OF THE COMMITTEE WHO SHALL PRESIDE AT ALL MEETINGS THEREOF, AND THE
COMMITTEE SHALL DESIGNATE A MEMBER THEREOF TO PRESIDE IN THE ABSENCE OF THE
CHAIRMAN.
SECTION 3.3. EXECUTIVE COMMITTEE POWERS. THE EXECUTIVE COMMITTEE MAY,
WHILE THE BOARD OF DIRECTORS IS NOT IN SESSION, EXERCISE ALL OR ANY OF THE
POWERS OF THE BOARD OF DIRECTORS IN ALL CASES IN WHICH SPECIFIC DIRECTIONS SHALL
NOT HAVE BEEN GIVEN BY THE BOARD OF DIRECTORS; EXCEPT THAT THE EXECUTIVE
COMMITTEE SHALL NOT HAVE THE POWER OR AUTHORITY OF THE BOARD OF DIRECTORS TO (I)
AMEND THE CERTIFICATE OF INCORPORATION OR THE BY-LAWS OF THE CORPORATION, (II)
FILL VACANCIES ON THE BOARD OF DIRECTORS, (III) ADOPT AN AGREEMENT OR
CERTIFICATION OF OWNERSHIP, MERGER OR CONSOLIDATION, (IV) RECOMMEND TO THE
STOCKHOLDERS THE SALE, LEASE OR EXCHANGE OF ALL OR SUBSTANTIALLY ALL OF THE
CORPORATION'S PROPERTY AND ASSETS, OR A DISSOLUTION OF THE CORPORATION OR A
REVOCATION OF A DISSOLUTION, (V) DECLARE A DIVIDEND, OR (VI) AUTHORIZE THE
ISSUANCE OF STOCK.
SECTION 3.4. EXECUTIVE COMMITTEE MEETINGS. REGULAR AND SPECIAL MEETINGS
OF THE EXECUTIVE COMMITTEE MAY BE CALLED AND HELD SUBJECT TO THE SAME
REQUIREMENTS WITH RESPECT TO TIME, PLACE AND NOTICE AS ARE SPECIFIED IN THESE
BY-LAWS FOR REGULAR AND SPECIAL MEETINGS OF THE BOARD OF DIRECTORS. SPECIAL
MEETINGS OF THE EXECUTIVE COMMITTEE MAY BE CALLED BY ANY MEMBER THEREOF. UNLESS
OTHERWISE INDICATED IN THE NOTICE THEREOF, ANY AND ALL BUSINESS MAY BE
TRANSACTED AT A SPECIAL OR REGULAR MEETING OF THE EXECUTIVE MEETING IF A QUORUM
IS PRESENT. AT ANY MEETING AT WHICH EVERY MEMBER OF THE EXECUTIVE COMMITTEE
SHALL BE PRESENT, IN PERSON OR BY TELEPHONE, EVEN THOUGH WITHOUT ANY NOTICE, ANY
BUSINESS MAY BE TRANSACTED. ALL ACTION BY THE EXECUTIVE COMMITTEE SHALL BE
REPORTED TO THE BOARD OF DIRECTORS AT ITS MEETING NEXT SUCCEEDING SUCH ACTION.
THE EXECUTIVE COMMITTEE SHALL FIX ITS OWN RULES OF PROCEDURE, AND SHALL
MEET WHERE AND AS PROVIDED BY SUCH RULES OR BY RESOLUTION OF THE BOARD OF
DIRECTORS, BUT IN EVERY CASE THE PRESENCE OF A MAJORITY OF THE TOTAL NUMBER OF
MEMBERS OF THE EXECUTIVE COMMITTEE SHALL BE NECESSARY TO CONSTITUTE A QUORUM. IN
EVERY CASE, THE AFFIRMATIVE VOTE OF A QUORUM SHALL BE NECESSARY FOR THE ADOPTION
OF ANY RESOLUTION.
SECTION 3.5. EXECUTIVE COMMITTEE VACANCIES. THE BOARD OF DIRECTORS, BY
MAJORITY VOTE OF THE BOARD OF DIRECTORS THEN IN OFFICE, SHALL FILL VACANCIES IN
THE EXECUTIVE COMMITTEE BY ELECTION FROM THE DIRECTORS.
ARTICLE IV
THE OFFICERS
SECTION 4.1. NUMBER AND TERM OF OFFICE. THE OFFICERS OF THE CORPORATION
SHALL CONSIST OF, AS THE BOARD OF DIRECTORS MAY DETERMINE AND APPOINT FROM TIME
TO TIME, A CHIEF EXECUTIVE OFFICER, A PRESIDENT, ONE OR MORE EXECUTIVE
VICE-PRESIDENTS, A SECRETARY, A TREASURER, A CONTROLLER, AND/OR SUCH OTHER
OFFICERS AS MAY FROM TIME TO TIME BE ELECTED OR APPOINTED BY THE BOARD OF
DIRECTORS, INCLUDING SUCH ADDITIONAL VICE-PRESIDENTS WITH SUCH DESIGNATIONS, IF
ANY, AS MAY BE DETERMINED BY THE BOARD OF DIRECTORS AND SUCH ASSISTANT
SECRETARIES AND ASSISTANT TREASURERS. IN ADDITION, THE BOARD OF DIRECTORS MAY
ELECT A CHAIRMAN OF THE BOARD AND MAY ALSO ELECT A VICE-CHAIRMAN AS OFFICERS OF
THE CORPORATION. ANY TWO OR MORE OFFICES MAY BE HELD BY THE SAME PERSON. IN
ITS DISCRETION, THE BOARD OF DIRECTORS MAY LEAVE UNFILLED ANY OFFICE EXCEPT AS
MAY BE REQUIRED BY LAW.
THE OFFICERS OF THE CORPORATION SHALL BE ELECTED OR APPOINTED FROM TIME TO
TIME BY THE BOARD OF DIRECTORS. EACH OFFICER SHALL HOLD OFFICE UNTIL HIS
SUCCESSOR SHALL HAVE BEEN DULY ELECTED OR APPOINTED OR UNTIL HIS DEATH OR UNTIL
HE SHALL RESIGN OR SHALL HAVE BEEN REMOVED BY THE BOARD OF DIRECTORS.
EACH OF THE SALARIED OFFICERS OF THE CORPORATION SHALL DEVOTE HIS ENTIRE
TIME, SKILL AND ENERGY TO THE BUSINESS OF THE CORPORATION, UNLESS THE CONTRARY
IS EXPRESSLY CONSENTED TO BY THE BOARD OF DIRECTORS OR THE EXECUTIVE COMMITTEE.
SECTION 4.2. REMOVAL. ANY OFFICER MAY BE REMOVED BY THE BOARD OF
DIRECTORS WHENEVER, IN ITS JUDGMENT, THE BEST INTERESTS OF THE CORPORATION WOULD
BE SERVED THEREBY.
SECTION 4.3. THE CHAIRMAN OF THE BOARD. THE CHAIRMAN OF THE BOARD, IF
ANY, SHALL PRESIDE AT ALL MEETINGS OF STOCKHOLDERS AND OF THE BOARD OF DIRECTORS
AND SHALL HAVE SUCH OTHER AUTHORITY AND PERFORM SUCH OTHER DUTIES AS ARE
PRESCRIBED BY LAW, BY THESE BY-LAWS AND BY THE BOARD OF DIRECTORS. THE BOARD OF
DIRECTORS MAY DESIGNATE THE CHAIRMAN OF THE BOARD AS CHIEF EXECUTIVE OFFICER, IN
WHICH CASE HE SHALL HAVE SUCH AUTHORITY AND PERFORM SUCH DUTIES AS ARE
PRESCRIBED BY THESE BY-LAWS AND THE BOARD OF DIRECTORS FOR THE CHIEF EXECUTIVE
OFFICER.
SECTION 4.4. THE VICE-CHAIRMAN. THE VICE-CHAIRMAN, IF ANY, SHALL HAVE
SUCH AUTHORITY AND PERFORM SUCH OTHER DUTIES AS ARE PRESCRIBED BY THESE BY-LAWS
AND BY THE BOARD OF DIRECTORS. IN THE ABSENCE OR INABILITY TO ACT OF THE
CHAIRMAN OF THE BOARD AND THE PRESIDENT, HE SHALL PRESIDE AT THE MEETINGS OF THE
STOCKHOLDERS AND OF THE BOARD OF DIRECTORS AND SHALL HAVE AND EXERCISE ALL OF
THE POWERS AND DUTIES OF THE CHAIRMAN OF THE BOARD. THE BOARD OF DIRECTORS MAY
DESIGNATE THE VICE-CHAIRMAN AS CHIEF EXECUTIVE OFFICER, IN WHICH CASE HE SHALL
HAVE SUCH AUTHORITY AND PERFORM SUCH DUTIES AS ARE PRESCRIBED BY THESE BY-LAWS
AND THE BOARD OF DIRECTORS FOR THE CHIEF EXECUTIVE OFFICER.
SECTION 4.5. THE PRESIDENT. THE PRESIDENT SHALL HAVE SUCH AUTHORITY AND
PERFORM SUCH DUTIES AS ARE PRESCRIBED BY LAW, BY THESE BY-LAWS, BY THE BOARD OF
DIRECTORS AND BY THE CHIEF EXECUTIVE OFFICER (IF THE PRESIDENT IS NOT THE CHIEF
EXECUTIVE OFFICER). THE PRESIDENT, IF THERE IS NO CHAIRMAN OF THE BOARD, OR IN
THE ABSENCE OR THE INABILITY TO ACT OF THE CHAIRMAN OF THE BOARD, SHALL PRESIDE
AT ALL MEETINGS OF STOCKHOLDERS AND OF THE BOARD OF DIRECTORS. UNLESS THE BOARD
OF DIRECTORS DESIGNATES THE CHAIRMAN OF THE BOARD OR THE VICE-CHAIRMAN AS CHIEF
EXECUTIVE OFFICER, THE PRESIDENT SHALL BE THE CHIEF EXECUTIVE OFFICER, IN WHICH
CASE HE SHALL HAVE SUCH AUTHORITY AND PERFORM SUCH DUTIES AS ARE PRESCRIBED BY
THESE BY-LAWS AND THE BOARD OF DIRECTORS FOR THE CHIEF EXECUTIVE OFFICER.
SECTION 4.6. THE CHIEF EXECUTIVE OFFICER. UNLESS THE BOARD OF DIRECTORS
DESIGNATES THE CHAIRMAN OF THE BOARD OR THE VICE-CHAIRMAN AS CHIEF EXECUTIVE
OFFICER, THE PRESIDENT SHALL BE THE CHIEF EXECUTIVE OFFICER. THE CHIEF
EXECUTIVE OFFICER OF THE CORPORATION SHALL HAVE, SUBJECT TO THE SUPERVISION AND
DIRECTION OF THE BOARD OF DIRECTORS, GENERAL SUPERVISION OF THE BUSINESS,
PROPERTY AND AFFAIRS OF THE CORPORATION, INCLUDING THE POWER TO APPOINT AND
DISCHARGE AGENTS AND EMPLOYEES, AND THE POWERS VESTED IN HIM BY THE BOARD OF
DIRECTORS, BY LAW OR BY THESE BY-LAWS OR WHICH USUALLY ATTACH OR PERTAIN TO SUCH
OFFICE.
SECTION 4.7. THE EXECUTIVE VICE-PRESIDENTS. IN THE ABSENCE OF THE
CHAIRMAN OF THE BOARD, IF ANY, THE PRESIDENT AND THE VICE-CHAIRMAN, IF ANY, OR
IN THE EVENT OF THEIR INABILITY OR REFUSAL TO ACT, THE EXECUTIVE VICE-PRESIDENT
(OR IN THE EVENT THERE IS MORE THAN ONE EXECUTIVE VICE-PRESIDENT, THE EXECUTIVE
VICE-PRESIDENTS IN THE ORDER DESIGNATES, OR IN THE ABSENCE OF ANY DESIGNATION,
THEN IN THE ORDER OF THEIR ELECTION) SHALL PERFORM THE DUTIES OF THE CHAIRMAN OF
THE BOARD, OF THE PRESIDENT AND OF THE VICE-CHAIRMAN, AND WHEN SO ACTING, SHALL
HAVE ALL THE POWERS OF AND BE SUBJECT TO ALL THE RESTRICTIONS UPON THE CHAIRMAN
OF THE BOARD, THE PRESIDENT AND THE VICE-CHAIRMAN. ANY EXECUTIVE VICE-PRESIDENT
MAY SIGN, WITH THE SECRETARY OR AN AUTHORIZED ASSISTANT SECRETARY, CERTIFICATES
FOR STOCK OF THE CORPORATION AND SHALL PERFORM SUCH OTHER DUTIES AS FROM TIME TO
TIME MAY BE ASSIGNED TO HIM BY THE CHAIRMAN OF THE BOARD, THE PRESIDENT, THE
VICE-CHAIRMAN, THE BOARD OF DIRECTORS OR THESE BY-LAWS.
SECTION 4.8. THE VICE-PRESIDENTS. THE VICE-PRESIDENTS, IF ANY, SHALL
PERFORM SUCH DUTIES AS MAY BE ASSIGNED TO THEM FROM TIME TO TIME BY THE CHAIRMAN
OF THE BOARD, THE PRESIDENT, THE VICE-CHAIRMAN, THE BOARD OF DIRECTORS, OR THESE
BY-LAWS.
SECTION 4.9. THE TREASURER. SUBJECT TO THE DIRECTION OF CHIEF EXECUTIVE
OFFICER AND THE BOARD OF DIRECTORS, THE TREASURER SHALL HAVE CHARGE AND CUSTODY
OF ALL THE FUNDS AND SECURITIES OF THE CORPORATION; WHEN NECESSARY OR PROPER HE
SHALL ENDORSE FOR COLLECTION, OR CAUSE TO BE ENDORSED, ON BEHALF OF THE
CORPORATION, CHECKS, NOTES AND OTHER OBLIGATIONS, AND SHALL CAUSE THE DEPOSIT OF
THE SAME TO THE CREDIT OF THE CORPORATION IN SUCH BANK OR BANKS OR DEPOSITARY AS
THE BOARD OF DIRECTORS MAY DESIGNATE OR AS THE BOARD OF DIRECTORS BY RESOLUTION
MAY AUTHORIZE; HE SHALL SIGN ALL RECEIPTS AND VOUCHERS FOR PAYMENTS MADE TO THE
CORPORATION OTHER THAN ROUTINE RECEIPTS AND VOUCHERS, THE SIGNING OF WHICH HE
MAY DELEGATE; HE SHALL SIGN ALL CHECKS MADE BY THE CORPORATION (PROVIDED,
HOWEVER, THAT THE BOARD OF DIRECTORS MAY AUTHORIZE AND PRESCRIBE BY RESOLUTION
THE MANNER IN WHICH CHECKS DRAWN ON BANKS OR DEPOSITARIES SHALL BE SIGNED,
INCLUDING THE USE OF FACSIMILE SIGNATURES, AND THE MANNER IN WHICH OFFICERS,
AGENTS OR EMPLOYEES SHALL BE AUTHORIZED TO SIGN); UNLESS OTHERWISE PROVIDED BY
RESOLUTION OF THE BOARD OF DIRECTORS, HE SHALL SIGN WITH AN OFFICER-DIRECTOR ALL
BILLS OF EXCHANGE AND PROMISSORY NOTES OF THE CORPORATION; WHENEVER REQUIRED BY
THE BOARD OF DIRECTORS, HE SHALL RENDER A STATEMENT OF HIS CASH ACCOUNT; HE
SHALL ENTER REGULARLY FULL AND ACCURATE ACCOUNT OF THE CORPORATION IN BOOKS OF
THE CORPORATION TO BE KEPT BY HIM FOR THAT PURPOSE; HE SHALL, AT ALL REASONABLE
TIMES, EXHIBIT HIS BOOKS AND ACCOUNTS TO ANY DIRECTOR OF THE CORPORATION UPON
APPLICATION AT HIS OFFICE DURING BUSINESS HOURS; AND HE SHALL PERFORM ALL ACTS
INCIDENT TO THE POSITION OF TREASURER. IF REQUIRED BY THE BOARD OF DIRECTORS,
THE TREASURER SHALL GIVE A BOND FOR THE FAITHFUL DISCHARGE OF HIS DUTIES IN SUCH
SUM AND WITH SUCH SURE TIES AS THE BOARD OF DIRECTORS MAY REQUIRE.
SECTION 4.10. THE SECRETARY. THE SECRETARY SHALL KEEP THE MINUTES OF ALL
MEETINGS OF THE BOARD OF DIRECTORS, THE MINUTES OF ALL MEETINGS OF THE
STOCKHOLDERS AND (UNLESS OTHERWISE DIRECTED BY THE BOARD OF DIRECTORS) THE
MINUTES OF ALL COMMITTEES, IN BOOKS PROVIDED FOR THAT PURPOSE; HE SHALL ATTEND
TO THE GIVING AND SERVING OF ALL NOTICES OF THE CORPORATION; HE MAY SIGN WITH AN
OFFICER-DIRECTOR OR ANY OTHER DULY AUTHORIZED PERSON, IN THE NAME OF THE
CORPORATION, ALL CONTRACTS AUTHORIZED BY THE BOARD OF DIRECTORS OR BY THE
EXECUTIVE COMMITTEE, AND, WHEN SO ORDERED BY THE BOARD OF DIRECTORS OR THE
EXECUTIVE COMMITTEE, HE SHALL AFFIX THE SEAL OF THE CORPORATION THERETO; HE MAY
SIGN WITH THE PRESIDENT OR AN EXECUTIVE VICE-PRESIDENT ALL CERTIFICATES OF
SHARES OF THE CAPITAL STOCK; HE SHALL HAVE CHARGE OF THE CERTIFICATE BOOKS,
TRANSFER BOOKS AND STOCK LEDGERS, AND SUCH OTHER BOOKS AND PAPERS AS THE BOARD
OF DIRECTORS OR THE EXECUTIVE COMMITTEE MAY DIRECT, ALL OF WHICH SHALL, AT ALL
REASONABLE TIMES, BE OPEN TO THE EXAMINATION OF ANY DIRECTOR, UPON APPLICATION
AT THE SECRETARY'S OFFICE DURING BUSINESS HOURS; AND HE SHALL IN GENERAL PERFORM
ALL THE DUTIES INCIDENT TO THE OFFICE OF THE SECRETARY, SUBJECT TO THE CONTROL
OF THE CHIEF EXECUTIVE OFFICER AND THE BOARD OF DIRECTORS.
SECTION 4.11. THE CONTROLLER. THE CONTROLLER SHALL BE THE CHIEF
ACCOUNTING OFFICER OF THE CORPORATION. SUBJECT TO THE SUPERVISION OF THE BOARD
OF DIRECTORS, THE CHIEF EXECUTIVE OFFICER AND THE TREASURER, THE CONTROLLER
SHALL PROVIDE FOR AND MAINTAIN ADEQUATE RECORDS OF ALL ASSETS, LIABILITIES AND
TRANSACTIONS OF THE CORPORATION, SHALL SEE THAT ACCURATE AUDITS OF THE
CORPORATION'S AFFAIRS ARE CURRENTLY AND ADEQUATELY MADE AND SHALL PERFORM SUCH
OTHER DUTIES AS FROM TIME TO TIME MAY BE ASSIGNED TO HIM.
SECTION 4.12. THE ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. THE
ASSISTANT TREASURERS SHALL RESPECTIVELY, IF REQUIRED BY THE BOARD OF DIRECTORS,
GIVE BONDS FOR THE FAITHFUL DISCHARGE OF THEIR DUTIES IN SUCH SUMS AND WITH SUCH
SURETIES AS THE BOARD OF DIRECTORS MAY DETERMINE. THE ASSISTANT SECRETARIES AS
THEREUNTO AUTHORIZED BY THE BOARD OF DIRECTORS MAY SIGN WITH THE CHAIRMAN OF THE
BOARD, THE PRESIDENT, THE VICE-CHAIRMAN OR AN EXECUTIVE VICE-PRESIDENT,
CERTIFICATES FOR STOCK OF THE CORPORATION, THE ISSUE OF WHICH SHALL HAVE BEEN
AUTHORIZED BY A RESOLUTION OF THE BOARD OF DIRECTORS. THE ASSISTANT TREASURERS
AND ASSISTANT SECRETARIES, IN GENERAL, SHALL PERFORM SUCH DUTIES AS SHALL BE
ASSIGNED TO THEM BY THE TREASURER OR THE SECRETARY, RESPECTIVELY, OR CHIEF
EXECUTIVE OFFICER, THE BOARD OF DIRECTORS, OR THESE BY-LAWS.
SECTION 4.13. SALARIES. THE SALARIES OF THE OFFICERS SHALL BE FIXED FROM
TIME TO TIME BY THE BOARD OF DIRECTORS, AND NO OFFICER SHALL BE PREVENTED FROM
RECEIVING SUCH SALARY BY REASON OF THE FACT THAT HE IS ALSO A DIRECTOR OF THE
CORPORATION.
SECTION 4.14. VOTING UPON STOCKS. UNLESS OTHERWISE ORDERED BY THE BOARD
OF DIRECTORS OR BY THE EXECUTIVE COMMITTEE, ANY OFFICER, DIRECTOR OR ANY PERSON
OR PERSONS APPOINTED IN WRITING BY ANY OF THEM, SHALL HAVE FULL POWER AND
AUTHORITY IN BEHALF OF THE CORPORATION TO ATTEND AND TO ACT AND TO VOTE AT ANY
MEETINGS OF STOCKHOLDERS OF ANY CORPORATION IN WHICH THE CORPORATION MAY HOLD
STOCK, AND AT ANY SUCH MEETING SHALL POSSESS AND MAY EXERCISE ANY AND ALL THE
RIGHTS AND POWERS INCIDENT TO THE OWNERSHIP OF SUCH STOCK, AND WHICH, AS THE
OWNER THEREOF, THE CORPORATION MIGHT HAVE POSSESSED AND EXERCISED IF PRESENT.
THE BOARD OF DIRECTORS MAY CONFER LIKE POWERS UPON ANY OTHER PERSON OR PERSONS.
ARTICLE V
CONTRACTS AND LOANS
SECTION 5.1. CONTRACTS. THE BOARD OF DIRECTORS MAY AUTHORIZE ANY OFFICER
OR OFFICERS, AGENT OR AGENTS, TO ENTER INTO ANY CONTRACT OR EXECUTE AND DELIVER
ANY INSTRUMENT IN THE NAME OF AND ON BEHALF OF THE CORPORATION, AND SUCH
AUTHORITY MAY BE GENERAL OR CONFINED TO SPECIFIC INSTANCES.
SECTION 5.2. LOANS. NO LOANS SHALL BE CONTRACTED ON BEHALF OF THE
CORPORATION AND NO EVIDENCES OF INDEBTEDNESS SHALL BE ISSUED IN ITS NAME UNLESS
AUTHORIZED BY A RESOLUTION OF THE BOARD OF DIRECTORS. SUCH AUTHORITY MAY BE
GENERAL OR CONFINED TO SPECIFIC INSTANCES.
ARTICLE VI
CERTIFICATES FOR STOCK AND THEIR TRANSFER
SECTION 6.1. CERTIFICATES FOR STOCK. CERTIFICATES REPRESENTING STOCK OF
THE CORPORATION SHALL BE IN SUCH FORM AS MAY BE DETERMINED BY THE BOARD OF
DIRECTORS. SUCH CERTIFICATES SHALL BE SIGNED BY THE CHAIRMAN OF THE BOARD, THE
PRESIDENT, THE VICE-CHAIRMAN OR AN EXECUTIVE VICE-PRESIDENT AND/OR BY THE
SECRETARY OR AN AUTHORIZED ASSISTANT SECRETARY AND SHALL BE SEALED WITH THE SEAL
OF THE CORPORATION. THE SEAL MAY BE A FACSIMILE. IF A STOCK CERTIFICATE IS
COUNTERSIGNED (I) BY A TRANSFER AGENT OTHER THAN THE CORPORATION OR ITS
EMPLOYEE, OR (II) BY A REGISTRAR OTHER THAN THE CORPORATION OR ITS EMPLOYEE, ANY
OTHER SIGNATURE ON THE CERTIFICATE MAY BE A FACSIMILE. IN THE EVENT THAT ANY
OFFICER, TRANSFER AGENT OR REGISTRAR WHO HAS SIGNED OR WHOSE FACSIMILE SIGNATURE
HAS BEEN PLACED UPON A CERTIFICATE SHALL HAVE CEASED TO BE SUCH OFFICER,
TRANSFER AGENT, OR REGISTRAR BEFORE SUCH CERTIFICATE IS ISSUED, IT MAY BE ISSUED
BY THE CORPORATION WITH THE SAME EFFECT AS IF HE WERE SUCH OFFICER, TRANSFER
AGENT OR REGISTRAR AT THE DATE OF ISSUE. ALL CERTIFICATES FOR STOCK SHALL BE
CONSECUTIVELY NUMBERED OR OTHERWISE IDENTIFIED. THE NAME OF THE PERSON TO WHOM
THE SHARES OF STOCK REPRESENTED THEREBY ARE ISSUED, WITH THE NUMBER OF SHARES OF
STOCK AND DATE OF ISSUE, SHALL BE ENTERED ON THE BOOKS OF THE CORPORATION. ALL
CERTIFICATES SURRENDERED TO THE CORPORATION FOR TRANSFER SHALL BE CANCELED AND
NO NEW CERTIFICATES SHALL BE ISSUED UNTIL THE FORMER CERTIFICATE FOR A LIKE
NUMBER OF SHARES OF STOCK SHALL HAVE BEEN SURRENDERED AND CANCELED, EXCEPT THAT,
IN THE EVENT OF A LOST, DESTROYED OR MUTILATED CERTIFICATE, A NEW ONE MAY BE
ISSUED THEREFORE UPON SUCH TERMS AND INDEMNITY TO THE CORPORATION AS THE BOARD
OF DIRECTORS MAY PRESCRIBE.
SECTION 6.2. TRANSFERS OF STOCK. TRANSFERS OF STOCK OF THE CORPORATION
SHALL BE MADE ONLY ON THE BOOKS OF THE CORPORATION BY THE HOLDER OF RECORD
THEREOF OR BY HIS LEGAL REPRESENTATIVE, WHO SHALL FURNISH PROPER EVIDENCE OF
AUTHORITY TO TRANSFER, OR BY HIS ATTORNEY THEREUNTO AUTHORIZED BY POWER OF
ATTORNEY DULY EXECUTED AND FILED WITH THE SECRETARY OF THE CORPORATION, AND ON
SURRENDER FOR CANCELLATION OF THE CERTIFICATE FOR SUCH STOCK. THE PERSON IN
WHOSE NAME STOCK STANDS ON THE BOOKS OF THE CORPORATION SHALL BE DEEMED THE
OWNER THEREOF FOR ALL PURPOSES AS REGARDS THE CORPORATION.
ARTICLE VII
FISCAL YEAR
SECTION 7.1. FISCAL YEAR. THE FISCAL YEAR OF THE CORPORATION SHALL BEGIN
ON THE FIRST DAY OF JANUARY IN EACH YEAR AND END ON THE LAST DAY OF DECEMBER IN
EACH YEAR.
ARTICLE VIII
SEAL
SECTION 8.1. SEAL. THE BOARD OF DIRECTORS SHALL APPROVE A CORPORATE SEAL
WHICH SHALL BE IN THE FORM OF A CIRCLE AND SHALL HAVE INSCRIBED THEREON THE NAME
OF THE CORPORATION.
ARTICLE IX
WAIVER OF NOTICE
SECTION 9.1. WAIVER OF NOTICE. WHENEVER ANY NOTICE IS REQUIRED TO BE
GIVEN UNDER THE PROVISIONS OF THESE BY-LAWS OR UNDER THE PROVISIONS OF THE
CERTIFICATE OF INCORPORATION OR UNDER THE PROVISIONS OF THE CORPORATION LAW OF
THE STATE OF INCORPORATION, WAIVER THEREOF IN WRITING, SIGNED BY THE PERSON OR
PERSONS ENTITLED TO SUCH NOTICE, WHETHER BEFORE OR AFTER THE TIME STATED
THEREIN, SHALL BE DEEMED EQUIVALENT TO THE GIVING OF SUCH NOTICE. ATTENDANCE OF
ANY PERSON AT A MEETING FOR WHICH ANY NOTICE IS REQUIRED TO BE GIVEN UNDER THE
PROVISIONS OF THESE BY-LAWS, THE CERTIFICATE OF INCORPORATION OR THE CORPORATION
LAW OF THE STATE OF INCORPORATION SHALL CONSTITUTE A WAIVER OF NOTICE OF SUCH
MEETING EXCEPT WHEN THE PERSON ATTENDS FOR THE EXPRESS PURPOSE OF OBJECTING, AT
THE BEGINNING OF THE MEETING, TO THE TRANSACTION OF ANY BUSINESS BECAUSE THE
MEETING IS NOT LAWFULLY CALLED OR CONVENED.
ARTICLE X
AMENDMENTS
SECTION 10.1. AMENDMENTS. THESE BY-LAWS MAY BE ALTERED, AMENDED OR
REPEALED AND NEW BY-LAWS MAY BE ADOPTED AT ANY MEETING OF THE BOARD OF DIRECTORS
OF THE CORPORATION BY THE AFFIRMATIVE VOTE OF A TWO-THIRDS OR MORE OF THE
MEMBERS OF THE BOARD, OR BY THE AFFIRMATIVE VOTE OF THE HOLDERS OF 75 PERCENT OR
MORE OF THE OUTSTANDING CAPITAL STOCK OF THE CORPORATION (ASSESSED UPON THE
BASIS OF VOTES AND NOT ON THE BASIS OF NUMBER OF SHARES) ENTITLED TO VOTE
GENERALLY IN THE ELECTION OF DIRECTORS, VOTING TOGETHER AS A SINGLE CLASS, CAST
AT A MEETING OF THE STOCKHOLDERS CALLED FOR THAT PURPOSE.
ARTICLE XI
INDEMNIFICATION
SECTION 11.1. INDEMNIFICATION. THE CORPORATION SHALL INDEMNIFY ITS
OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS TO THE FULLEST EXTENT PERMITTED BY THE
COLORADO GENERAL CORPORATION LAW, AS AMENDED FROM TIME TO TIME.
EXHIBIT 3.1
FINANCIAL INDEPENDENCE, INC.
5265 NORTH ACADEMY BLVD, SUITE 2250
COLORADO SPRINGS, CO 80918
DETERMINATION, INC
5265 NO. ACADEMY BLVD.
SUITE 2250
COLORADO SPRINGS, CO 80918
RE: SHAREHOLDER AGREEMENT WITH DETERMINATION, INC
LADIES AND GENTLEMEN:
IN CONSIDERATION OF THE SALE OF THE SHARES OF COMMON STOCK OF
DETERMINATION, INC(THE "COMPANY") TO THE UNDERSIGNED (THE "HOLDER"), THE HOLDER
HEREBY REPRESENTS, WARRANTS, COVENANTS AND AGREES, FOR THE BENEFIT OF THE
COMPANY AND ANY HOLDERS OF RECORD (THE "THIRD PARTY BENEFICIARIES") OF THE
COMPANY'S OUTSTANDING SECURITIES, INCLUDING THE COMPANY'S COMMON STOCK, $.001
PAR VALUE (THE "STOCK") AT THE DATE HEREOF AND DURING THE PENDENCY OF THIS
LETTER AGREEMENT, THAT THE HOLDER WILL NOT TRANSFER, SELL, CONTRACT TO SELL,
DEVISE, GIFT, ASSIGN, PLEDGE, HYPOTHECATE, DISTRIBUTE OR GRANT ANY OPTION TO
PURCHASE OR OTHERWISE DISPOSE OF, DIRECTLY OR INDIRECTLY, ITS SHARES OF STOCK OF
THE COMPANY OWNED BENEFICIALLY OR OTHERWISE BY THE HOLDER EXCEPT IN CONNECTION
WITH OR FOLLOWING COMPLETION OF A MERGER, ACQUISITION OR OTHER TRANSACTION OF
OR BY THE COMPANY MEETING THE DEFINITION OF A BUSINESS COMBINATION AS DEFINED IN
THE COMPANY'S REGISTRATION STATEMENT ON FORM 10-SB OR OTHERWISE COMPLYING WITH
THE PURPOSES OF THE COMPANY AS SET OUT IN THE REGISTRATION STATEMENT.
ANY ATTEMPTED SALE, TRANSFER OR OTHER DISPOSITION IN VIOLATION OF THIS
LETTER AGREEMENT SHALL BE NULL AND VOID.
THE HOLDER FURTHER AGREES THAT THE COMPANY (I) MAY INSTRUCT ITS TRANSFER
AGENT NOT TO TRANSFER SUCH SECURITIES (II) MAY PROVIDE A COPY OF THIS LETTER
AGREEMENT TO THE COMPANY'S TRANSFER AGENT FOR THE PURPOSE OF INSTRUCTING THE
COMPANY'S TRANSFER AGENT TO PLACE A LEGEND ON THE CERTIFICATE(S) EVIDENCING THE
SECURITIES SUBJECT HERETO AND DISCLOSING THAT ANY TRANSFER, SALE, CONTRACT FOR
SALE, DEVISE, GIFT, ASSIGNMENT, PLEDGE OR HYPOTHECATION OF SUCH SECURITIES IS
SUBJECT TO THE TERMS OF THIS LETTER AGREEMENT AND (III) MAY ISSUE STOP-TRANSFER
INSTRUCTIONS TO ITS TRANSFER AGENT FOR THE PERIOD CONTEMPLATED BY THIS LETTER
AGREEMENT FOR SUCH SECURITIES.
THIS LETTER AGREEMENT SHALL BE BINDING UPON THE HOLDER, ITS AGENTS, HEIRS,
SUCCESSORS, ASSIGNS AND BENEFICIARIES.
ANY WAIVER BY THE COMPANY OF ANY OF THE TERMS AND CONDITIONS OF THIS LETTER
AGREEMENT IN ANY INSTANCE SHALL BE IN WRITING AND SHALL BE DULY EXECUTED BY THE
COMPANY AND THE HOLDER AND SHALL NOT BE DEEMED OR CONSTRUED TO BE A WAIVER OF
SUCH TERM OR CONDITION FOR THE FUTURE, OR OF ANY SUBSEQUENT BREACH THEREOF.
AGREED AND ACCEPTED THIS ___ DAY OF JULY, 2000.
THE HOLDER:
BY:/S/ LEE T. DURAN
NAME: LEE T. DURAN
ITS: PRESIDENT AND CEO
BY:/S/ CHRISTY T. O'CONNOR
NAME: CHRISTY T. O'CONNOR
ITS: SECRETARY AND TREASURER
<PAGE>
EXHIBIT 10.1
J. SCOTT WHARTON
CERTIFIED PUBLIC ACCOUNTANT
755 HIGHWAY 105, SUITE 2C
PALMER LAKE, CO 80133
(719) 481-8447
CONSENT OF CERTIFIED PUBLIC ACCOUNTANT
I HEREBY CONSENT TO THE USE IN THIS REGISTRATION STATEMENT ON FORM 10 OF MY
REPORT DATED JULY 15, 2000, RELATING TO THE AUDITED FINANCIAL STATEMENTS OF
DETERMINATION, INC, A COLORADO CORPORATION AND THE REFERENCE TO MY FIRM
THEREIN.
/S/ J. SCOTT WHARTON, CPA
