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
AURORA ACQUISITIONS, INC.
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(Name of Small Business Issuer in its charter)
Colorado 84-1189368
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1050 Seventeenth Street, Suite 1700 , Denver, Colorado 80265
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number 303/292-3883
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Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
(None)
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Securities to be registered under Section 12(g) of the Act:
Common Stock
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(Title of class)
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PART I
Item 1. DESCRIPTION OF BUSINESS
Aurora Acquisitions, Inc. (the "Company") was incorporated as "Auburn
Enterprises, Inc." under the laws of the State of Colorado on February 10, 1992
and changed its name to Aurora Acquisitions, Inc. on July 21, 1992. The Company
was organized as a "blank check/blind pool" company, i.e., one formed for the
purpose of creating a vehicle to obtain capital to take advantage of existing
business opportunities that may have potential for profit. Management of the
Company will have unlimited discretion in determining the business activities in
which the Company will become engaged. It is believed that the Company's ability
to take advantage of some business opportunities is enhanced by (1) its
willingness to invest in high risk ventures and business, (2) its flexibility in
structuring investments, including the possible surrender of control and
replacement of management, and (3) its status as a publicly held entity pursuant
to this registration statement. There can be no assurance that the Company would
be able to acquire an interest in any such opportunities that may exist or that
any activity of the Company, even after any such acquisition, will be
profitable.
Since its organization, the Company has had no operations, revenues
from operations or assets other than cash from the initial sales of shares of
its Common Stock. The proceeds from the initial sales aggregated only $18,550,
substantially all of which has been expended. As of December 31, 1995, the
Company's assets consisted of only cash, in the amount of $14 and organization
expenses. Also as of December 31, 1995, the Company had an accumulated deficit
of $(22,319) and a shareholders' deficit of $(2,269). See the Financial
Statements and the notes thereto, included herewith. The Company faces all of
the risks inherent in a new business and those risks specifically inherent in
the type of business in which the Company proposes to engage, namely, the
investigation, and acquisition of business opportunities. In addition, the
Company will be limited in its efforts and ability to acquire one or more
business opportunities because it has no funds. Although the Company has no
plans to raise additional capital prior to the potential acquisition of a
business opportunity, it is possible that management may determine that it is
necessary to do so. There can be no assurance that the Company will be able to
successfully raise any additional funds. The potential business opportunities of
the Company have not been selected, and the Board of Directors will have
complete discretion in investigating and selecting such opportunities.
Therefore, shareholders must rely upon management of the Company to a greater
extent than may be the case in other investments.
Since the organization of the Company, its activities have been
limited to the sale of initial shares in connection with its organization and
the preparation and filing, in 1992, of a registration statement (the "1992
Registration Statement") under the Securities Act of 1933, as amended (the "1933
Act"). The purpose of the preparation and filing of the 1992 Registration
Statement was to register for issuance and sale 100,000 units of securities (the
"Units"), each Unit consisting of one share of Common Stock, one Class A Warrant
to purchase a share of Common Stock, one Class B Warrant to purchase a share of
Common Stock, and the shares of Common Stock underlying the Class A Warrants ant
Class B Warrants. The proposed offering pursuant to the 1992 Registration
Statement was anticipated to be a "blank check" offering, in that neither the
Company's business nor the use of proceeds from the proposed offering was
specified. The 1992 Registration Statement was abandoned by the Company in
December, 1993, and none of the Units were issued or sold. Accordingly, the
Company was not able to raise from the public the capital it had proposed to
raise in order to implement its business plan.
The Company is filing this registration statement on a voluntary basis
because the primary attraction of the Company as a merger partner or acquisition
vehicle will be its status as a public company. Any business combination or
transaction will likely result in the issuance of a significant number of
additional shares.
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The proposed business activities described herein classify the Company
as a "blank check" company. Many states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check" companies in their
respective jurisdictions. In order to comply with these various limitations,
management does not intend to undertake any efforts to sell any additional
securities of the Company or cause a market to develop in the Company's
securities until such time as the Company has successfully implemented its
business plan described herein. Relevant thereto, the Company intends to obtain
from all shareholders of the Company a "lockup" letter agreement, affirming that
they shall not sell their 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. In order to
provide further assurances that no trading will occur in the Company's
securities until a merger or acquisition has been consummated, the Company
intends to obtain from each of its shareholders his, her, or its respective
stock certificate and to deposit the certificates with the Company's legal
counsel, Schlueter & Associates, P.C., Denver, Colorado, which will not release
these respective certificates until such time as legal counsel has confirmed
that a merger or acquisition has been successfully consummated. However, while
management believes that the procedures established to preclude any sale of the
Company's securities prior to closing of a merger or acquisition will be
sufficient, there can be no assurances that the procedures established will
unequivocally limit any shareholders' ability to sell their respective
securities before such closing.
The Company proposes to implement a business plan to seek, investigate,
and, if warranted, acquire an interest in a business opportunity. The company
will be limited in its ability to acquire such an interest in a business
opportunity as a result of its extremely limited assets. It is not anticipated
that the Company will be able to participate in more than one such business
opportunity, product, or business. However, management may, at its discretion,
elect to enter into more than one acquisition if it believes these transactions
can be effectuated on terms favorable to the Company. The Company will seek
long-term growth potential as opposed to short-term earnings.
As of the date hereof the Company has no business opportunities under
contemplation for acquisition but proposes to investigate opportunities in the
form of, among others, investors or entrepreneurs with a concept that has not
yet been placed in operation. The Company may alternatively seek a business
opportunity in the form of one or more firms that have recently commenced
operations, are developing companies that are seeking to develop a new product,
service, or market, or are established businesses. It is highly unlikely that
the Company could acquire a business opportunity with one or more firms that are
in immediate need of additional capital, as the Company could not provide such
capital. It is more likely that a business opportunity may involve the
acquisition of or merger with a firm that does not need substantial additional
cash but that desires to establish a public trading market for its securities.
There can be no assurance, however, that a trading market for the Company's
securities can be successfully established or, if such a market is established,
that it can be maintained.
The Company does not propose to restrict its search for investment
opportunities to any particular industry and may, therefore, engage in
essentially any business, to the extent of its limited resources, including, but
not limited to, manufacturing, high technology, product development, medical,
communications and others. The Company's discretion to participate in business
opportunities is unrestricted, subject to the availability of those
opportunities, economic conditions, and other factors.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Because of rapid
technological advances being made in some industries and shortages of available
capital, management believes that there are firms seeking the benefits of a
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publicly traded corporation. Such perceived benefits of a publicly traded
corporation may include facilitating or improving the terms upon which
additional equity financing may be sought, providing liquidity for estate
planning needs of principal shareholders, creating a means for providing
incentive stock options or similar benefits to key employees, providing
liquidity for all shareholders, and other factors. Potentially available
business opportunities may occur 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 extremely difficult
and complex.
It is anticipated that business opportunities may become available to
the Company from various sources, including its officers and directors,
professional advisors such as attorneys and accountants, securities
broker-dealers, venture capitalists, members of the financial community, and
others who may present unsolicited proposals. There do not presently exist any
plans, understandings, agreements, or commitments with any individual (other
than officers and directors) for such persons to act as a finder of
opportunities for the Company. The selection of any such advisors and others
will be made by management and without any control from shareholders.
Furthermore, it is anticipated such persons may be engaged on an ad hoc basis
without a continuing fiduciary or other obligation to the Company.
Selection Of Opportunities
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To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the other
firm's management and personnel, the anticipated acceptability of new products
or marketing concepts, the merit of technological changes, and numerous other
factors that are difficult, if not impossible, to analyze through the
application of any objective criteria. In many instances, it is anticipated that
the historical operations of a specific firm may not necessarily be indicative
of the potential for the future because of the requirement to substantially
shift marketing approaches, expand significantly, change product emphasis,
change or substantially augment management, or make other changes. Because of
the lack of training or experience of the Company's management, the Company will
be dependent upon the owners of a business opportunity to identify such problems
and to implement, or be primarily responsible for the implementation of,
required changes. Because the Company may participate in a business opportunity
with a newly organized firm or with a firm that may be entering a new phase of
growth, it should be emphasized that the Company will incur further risks since
management of such a firm in many instances will not have proved its abilities
or effectiveness, the eventual market for such firm's product or services will
likely not be established, and the profitability of the firm will be unproven
and cannot be accurately predicted.
In seeking business opportunities, management's decision will not be
controlled by an attempt to time anticipated enthusiasm in the securities
markets for a specific industry, management group, or product or service
industry but will be based upon the objective of seeking long-term capital
appreciation in real value of the Company. Current income will be only a minor
factor in such decisions.
It is anticipated the Company will not be able to diversify, but will
essentially be limited to one such venture because of the Company's extremely
limited financial resources. This lack of diversification will not permit the
Company to offset potential losses from one business opportunity against profits
from another and should be considered an adverse factor affecting any decision
to purchase the Company's Common Stock in any market that may develop for such
stock.
It is emphasized that management of the Company may effect transactions
having a potentially adverse impact on the Company's shareholders pursuant to
the authority of the Company's Board of Directors and without submitting the
proposal to the shareholders for their consideration. In some instances,
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however, the proposed participation in a business opportunity may be submitted
to the shareholders for their consideration, either voluntarily by the Board of
Directors to seek the shareholders' advice and consent or because of a
requirement of state law to do so.
The analysis of new business opportunities will be undertaken by or
under the supervision of the officers and directors. None of these individuals
is a professional business analyst or has extensive experience or background in
the business of seeking, investigating, and acquiring interests in business
opportunities. The Company will be dependent upon the very limited general
business acumen and experience of the Company's directors and officers and the
applicability of their backgrounds to the business decisions required on behalf
of the Company. In addition, management will probably be required to retain
independent outside professionals to evaluate and appraise potential use and
markets for and to render evaluations and feasibility studies relating to
opportunity, product, investment, or business acquisitions. Each of the officers
and directors has outside employment and will be able to participate in
management decisions only on a limited, part-time basis. It is expected that
these officers and directors will devote on the average less than five percent
of their time to the business affairs of the Company. The Company does not have
employment agreements with its management, and once the Company acquires a
business opportunity, the present management may be asked to resign. The amount
of time the officers and directors devote to Company matters may increase once
the Company operates an active business. The time that the officers and
directors devote to the business affairs of the Company and the skill with which
they discharge their responsibilities, will substantially impact the Company's
success.
The Company will have unrestricted flexibility in seeking, analyzing
and participating in business opportunities. In its efforts, the Company will
consider the following kinds of factors:
(a) Potential for growth, indicated by new technology, anticipated
market expansion, or new products;
(b) Competitive position as compared to other firms of similar size and
experience within the industry segment as well as within the industry as a
whole;
(c) Strength and diversity of management, either in place or scheduled
for recruitment;
(d) Capital requirements and anticipated availability of required
funds, to be provided from operations, through the sale of additional
securities, through joint ventures or similar arrangements, or from other
sources;
(e) The cost of participation by the Company as compared to the
perceived tangible and intangible values and potentials;
(f) The extent to which management believes that the business
opportunity can be advanced;
(g) The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required items; and
(h) Other relevant factors.
In applying the foregoing criteria, no one of which will be
controlling, management will attempt to analyze all factors in the circumstances
and make a determination based upon reasonable investigative measures and
available data. Potentially available business opportunities may occur 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
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opportunities extremely difficult and complex. Due to the Company's lack of
capital available for investigation and management's limited experience in
business analysis, the Company may not discover or adequately evaluate adverse
facts about the opportunity to be acquired.
The Company has not established a specific length of operating history
or a specific level of earnings, assets, net worth, or other criteria that it
will require a target company to have achieved, and without which the Company
would not consider a merger with, or acquisition of, such private firm.
Accordingly, management may cause the Company to acquire or merge with a private
firm having no significant operating history, losses, limited or no potential
for earnings, limited assets, and/or negative net worth and/or which may exhibit
other negative attributes with respect to its financial condition or otherwise.
Inasmuch as the Company has not established minimum quantitative standards
concerning earnings, net worth, assets, or other objective criteria, its
shareholders will be subject to a higher degree of risk in any merger,
acquisition, or other business combination undertaken by the Company. Although
the Company intends to acquire or merge with the best possible target company
which management is able to identify, there can be no assurance that any target
company ultimately selected by the Company will have a specified level of
assets, earnings, or net worth, a specific length of operating history, or any
potential for earnings or will have achieved other minimum objective criteria.
The Company is unable to predict when, or if, it may participate in a
business opportunity. It expects, however, that the analysis of specific
proposals and the selection of a business opportunity will likely take several
months or more.
Prior to making a decision to participate in a business opportunity,
the Company will generally request that it be provided with written materials
regarding the business opportunity containing such items as one or more of the
following: a description of product, service, and company history; management
resumes; financial information; available projections with related assumptions
upon which they are based; an explanation of proprietary products and services;
evidence of existing patents, trademarks, or service marks or rights thereto;
present and proposed forms of compensation to management; a description of
transactions between the Company and its affiliates during relevant periods; a
description of present and required facilities; an analysis of risks and
competitive conditions; a financial plan of operation and estimated capital
requirements; audited financial statements; and other information deemed
relevant.
As of the date of this Registration Statement, none of the Company's
officers, directors, or promoters, and no other affiliate of the Company, have
had any preliminary contact or discussions with any representative of any other
company regarding the possibility of an acquisition of merger between the
Company and such other company.
Form of Acquisition
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It is impossible to predict the manner in which the Company may
participate in a business opportunity. Specific business opportunities will be
reviewed as well as the respective needs and desires of the Company and the
promoters of the opportunity, and, upon the basis of that review and the
relative negotiating strength of the Company and such promoters, the legal
structure, or method deemed by management to be suitable will be selected. Such
structure may include, but is not limited to leases, purchase and sale
arrangements, licenses, joint ventures, and other contractual arrangements. The
Company may act directly or indirectly through an interest in a partnership,
corporation, or other form of organization.
Implementing such structure may require the merger, consolidation, or
reorganization of the Company with other corporations or forms of business
organization, and there is no assurance that the Company would be the surviving
entity. As part of the acquisition of a business opportunity, some or all of the
current Board of Directors may resign after appointing their successors, without
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shareholder approval. The acquisition of an opportunity may also involve the
issuance of a majority of the Company's stock to promoters of the opportunity.
In such event, shareholders would be unable to elect or remove directors against
the wishes of such promoters. In addition, if the Company participates in a
reverse acquisition (a merger that gives control of the Company to the prior
owners of the merger partner), the assets of the merger partner may not be
written up. In addition, the present management and the shareholders of the
Company may not have control of a majority of the voting shares of the Company
following a reorganization transaction.
It is anticipated that there may be firms with a business opportunity
to be presented to the Company that will be interested primarily in the fact
that the Company's Common Stock may be publicly traded, because they desire to
obtain the benefits of a publicly held corporation. The Company has limited
capital and it is not anticipated that additional capital will be raised. This
will be an impediment to the Company's ability to achieve its business
objectives.
Firms with a business opportunity which seek the Company's
participation in attempting to consolidate their operations through a
reorganization, asset acquisition, or some other form such as a joint venture,
operating arrangement, securities exchange, or consolidation, may desire to do
so in order to avoid what such firms may deem to be adverse consequences of
undertaking a public offering, as distinguished from reorganizing with an
existing public corporation such as the Company. Such adverse factors may
include time delays encountered in obtaining clearances believed required prior
to the offer and sale of securities, the requirement that public shareholders
have a substantial share of voting control of the combined firm that may be
smaller following such a reorganization or asset acquisition than would be
permitted under applicable laws in a public offering, the requirement that the
public shareholders obtain sufficient shares so that the net tangible book value
of the shares will not be diluted by more than a specific percentage, as well as
other conditions or requirements imposed by various state laws. These
requirements generally have the stated purpose of protecting public
shareholders, so that the participation in a business opportunity by an
investment in the Company may have the effect of depriving persons purchasing
securities in this offering from such purported protections. In making an
investment in the Company, it should be recognized that persons purchasing
securities of the Company may be making an investment that is less favorable
under the foregoing criteria than if such persons were investing in a firm with
a specific business that was undertaking its own public offering.
It is likely that the Company will acquire its participation in a
business opportunity through the issuance of Common Stock or other securities in
the Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended, depends upon
the acquiring corporation receiving ownership of the stock of the acquired
corporation, possessing at least 80% of the total combined voting power of all
classes of stock entitled to vote and at least 80% of the total number of shares
of all other classes of stock of the acquired corporation. If a transaction were
structured to take advantage of these provisions rather than other "tax free"
provisions provided under the Internal Revenue Code, the Company's shareholders
in such circumstances would retain in the aggregate 20% or less of the total
issued and outstanding shares. This could result in substantial additional
dilution to the equity of those who were shareholders of the Company prior to
such reorganization.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemptions from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of the transaction, the Company may agree to register such
securities either at the time the transaction is consummated or under certain
conditions or at specified times thereafter. The issuance of substantial
additional securities and their potential sales into any trading market that may
develop in the Company's securities may have a depressive effect on such market.
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The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify
certain events of default, detail the terms of closing and the conditions that
must be satisfied by each of the parties thereto prior to such closing, outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting, and execution of relevant
agreements, disclosure documents, and other instruments will require substantial
management time and attention and substantial costs for accountants, attorneys,
and others. If a decision is made not to participate in a specific business
opportunity, the costs theretofore incurred and paid in the related
investigation would not be recoverable. Furthermore, even if an agreement is
reached for the participation in a specific business opportunity, the failure to
consummate that transaction may result in the loss to the Company of the related
costs incurred. As the Company currently has insufficient liquid assets to pay
such costs, certain officers, directors, and affiliates of the Company have
indicated that they will advance such costs on behalf of the Company in exchange
for the issuance of shares of the Company's Common Stock to such persons or an
agreement to repay such costs.
The Investment Company Act of 1940
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The Company may participate in a business or opportunity by purchasing,
trading, or selling the securities of such business. However, the Company does
not intend to engage primarily in such activities. Specifically, the Company
intends to conduct its activities so as to avoid being classified as an
"investment company" under the Investment Company Act of 1940 (the "Investment
Act"), and therefore avoid application of the costly and restrictive
registration and other provisions of the Investment Act, and the regulations
promulgated thereunder.
Section 3(a) of the Investment Act provides the definition of an
"investment company," which includes an entity that engages or holds itself out
as being engaged primarily in the business of investing, reinvesting, or trading
in securities, or that engages or proposes to engage in the business of
investing, reinvesting, owning, holding, or trading "investment securities"
(defined as all securities other than government securities, securities of
majority-owned subsidiaries, and certain other securities) the value of which
exceeds 40% of the value of its total assets (excluding government securities,
cash or cash items). The Company intends to implement its business plan in a
manner that will result in the availability of this exception from the
definition of "investment company." Consequently, the Company's participation in
a business or opportunity through the purchase and sale of investment securities
will be limited. In order to avoid classification as an investment company, the
Company will search for, analyze, and acquire or participate in a business
opportunity by use of a method that does not involve the acquisition, ownership,
or holding of investment securities.
The Company's plan of business may involve changes in its capital
structure, management, control, and business, especially if it consummates a
reorganization as discussed above. Each of these areas is regulated by the
Investment Act, which regulation has the purported purpose of protecting
purchasers of investment company securities. Since the Company will not register
as an investment company, its shareholders will not be afforded these purported
protections.
The Company intends to vigorously resist classification as an
investment company and to take advantage of any exemptions or exceptions from
application of the Investment Act, which allows an entity a one-time option
during any three-year period to claim an exemption as a "transient" investment
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company. The necessity of asserting any such resistance, or making any claim of
exemption, could be time consuming and costly, or even prohibitive, given the
Company's limited resources.
Competition
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Due to the general impact on existing businesses of continued shortages
of capital relative to the need to expand or otherwise take advantage of an
improving economy, prevailing economic conditions, and the condition of the
securities markets as a manifestation of investor confidence, the Company
expects to encounter substantial competition in its efforts to locate attractive
opportunities for the employment of its capital. The primary competition for
desirable investments is expected to come from business development companies,
venture capital partnerships and corporations, venture capital affiliates of
large industrial and financial companies, small business investment companies,
and wealthy individuals. Many of these entities will have significantly greater
experience, resources, and managerial capabilities than the Company and will
therefore be in a better position than the Company to obtain access to
attractive business opportunities.
EMPLOYEES
The Company is a development stage company and currently has no
employees other than certain of its officers and directors. Management of the
Company expects to use consultants, attorneys, and accountants as necessary, and
does not anticipate a need to engage any full-time employees so long as it is
seeking and evaluating business opportunities. The need for employees and their
availability will be addressed in connection with the decision whether or not to
acquire or participate in specific business opportunities.
The Company's present address is 1050 Seventeenth Street, Suite 1700,
Denver, Colorado 80265, and its telephone number is (303) 292-3883. Such address
and telephone number is the business address and telephone number of the
Company's legal counsel-Schlueter & Associates, P.C.
Item 2. DESCRIPTION OF PROPERTY
The Company entered into a lease arrangement with A. Jay Boisdrenghien,
the former president of the Company, providing for the rental of a portion of
his business office as a temporary office for the Company, for $300.00 per
month. This arrangement commenced in February 1992 and was terminated in July,
1994. The Company has no outstanding obligations under this lease. This lease
cannot be considered the result of arm's length negotiations. However,
management of the Company believes that the rent for its office and facilities
was no higher than that which the Company would have been required to pay to
unaffiliated parties for comparable facilities in the same locale. Presently,
the Company owns no equipment.
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Item 3. DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES
Officers and Directors
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The officers and directors of the Company are as follows:
Tenure as Officer
Name Age Position(s) or Director
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Michael J. Delaney 39 President January 6, 1996
and a Director to Present
David J. Gregarek 40 Secretary, Treasurer January 6, 1996
and a Director Present
Derrin Smith, Ph.D. 41 Director January 6, 1996
to Present
Mr. Gregarek may be deemed to be the "promoter" and "parent" of the
Company within the meaning of the Rules and Regulations promulgated under the
1933 Act.
The directors of the Company are elected to hold office until the next
annual meeting of shareholders and until their respective successors have been
elected and qualified. Officers of the Company are elected annually by the Board
of Directors and hold office until their successors are duly elected and
qualified. Each of the Company's officers and directors is employed in devotes
only such time as is available to the business of the Company.
Management is not aware of any person, other than the officers and/or
directors of the Company, whose activities will be material to the affairs of
the Company.
DAVID J. GREGAREK has served as Secretary, Treasurer and a Director of
the Company since January 6, 1996. Mr. Gregarek is also a Director and principal
shareholder of Ferrari Capital, Ltd., a blank check company. On December 15,
1987 Clearview Capital Corporation merged with Arriba Fajita, Inc., an operator
of four restaurants in Austin, Texas, and changed its name to Arriba Fajita
Holdings, Inc. Mr. Gregarek resigned from the Board of Directors of Arriba
Fajita Holdings, Inc. on June 20, 1988. From January of 1985 through February of
1987, Mr. Gregarek served as a Director of Belleview Capital Corporation. On
February 27, 1987, Belleview Capital Corporation acquired and changed its name
to Medical Ancillary Services, Inc., a one-call medical services company. From
February 1987 through August 1987, when he resigned, Mr. Gregarek served on the
Board of Directors of Medical Ancillary Services, Inc. Mr. Gregarek is the
President and founder of Clear Ridge Realty, Inc. located in Englewood,
Colorado, which he organized in 1976. Mr. Gregarek has also served as Vice
President of Clearview Oil & Gas, Inc. of Englewood, Colorado since 1982. Mr.
Gregarek served as Secretary-Treasurer of Chatfield Oil & Gas, Ltd. from October
of 1980 until April of 1981. Mr. Gregarek is also a principal shareholder of
Huntington Capital Corporation, a company that was formed to acquire other
businesses or entities. Mr. Gregarek only devotes such time as is available to
the business of the Company.
MICHAEL J. DELANEY has served as Vice President and a Director of the
Company since January 6, 1996. Since 1980 Mr. Delaney has been the owner and
president of a sales representative and consulting firm for various companies in
product development, sales, and marketing. Mr. Delaney will devote only such
time as is available to the business of the Company.
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DERRIN SMITH has served as a Director of the Company since January 6,
1996. Dr. Smith has over 17 years of experience developing and directing
strategic high technology programs and enterprises. This background includes
domestic and international (Asia, South America, and Middle East) activities for
both government and the private sector. For the last four years Dr. Smith has
operated his own private company-DRS Sciences, Inc., which is engaged primarily
in providing consulting services in the design and development of computer
software and the integration of such software with the hardware platforms
utilized by his clients. Prior to commencing active operations of his own
company Dr. Smith was employed by M.I.T.R.E. Corporation in various capacities.
Dr. Smith is currently under contract to Time Warner Communications, Inc.("Time
Warner"), and is working with Time Warner's information systems and related
services programs. These programs currently include nationwide design and
development of Synchronous Optical Network, hybrid fiber-coax networks; national
operations center telecommunications and data systems; strategic network
systems; business systems development; and internal software development in an
Object Oriented programming environment using advanced layered software
architectures. Dr. Smith will devote only such time as is necessary to the
business of the Company.
Conflicts of Interest
- ---------------------
Certain conflicts of interest have existed and will continue to exist
between the Company and its officers and directors. All of the officers and
directors have other business interests to which they devote their primary
attention. They may continue to do so notwithstanding the fact that management
time should be devoted to the business of the Company.
The Company's Articles of Incorporation provide that all business
opportunities within areas of interest determined from time to time by the board
of directors, as evidenced by resolutions appearing in the Company's minutes,
that come to the attention of any officer or director of the Company must be
promptly disclosed and made available to the Company. This provision limits the
fiduciary duties that the officers and directors might otherwise have to offer a
broad range of business opportunities to the Company. If the board of directors
rejects any opportunity presented to it, any officer or director may then avail
himself of that opportunity. These provisions of the Articles of Incorporation
do not apply to limit the right of any officer or director to continue an
activity or type of business existing prior to the time of delineation of an
area of interest.
The officers, directors, and principal shareholders are involved in
other personal and business ventures that also seek available business
opportunities and may become involved in other "blank check" companies. If a
specific opportunity meeting the criteria set forth in "Business" becomes
available, such persons may face a conflict in selecting between the Company and
their other business interests for participation in such venture. The Company
has formulated no policy for the resolution of conflicts in such circumstances.
The Company has no arrangement (except for office sharing described
herein and not deemed material), understanding, or intention to enter into any
transaction for participating in any business opportunity with any officer,
director, or principal shareholder or with any firm or business organization
with which they are affiliated, whether by reason of stock ownership, position
as officer or director, or otherwise.
There can be no assurance that management will resolve all conflicts of
interest in favor of the Company.
-10-
<PAGE>
Item 4. REMUNERATION OF DIRECTORS AND OFFICERS
The Company paid no cash or non-cash compensation to any officer or
director during the fiscal years ended December 31, 1993, 1994, or 1995.
A. Jay Boisdrenghien was the President and a Director of the Company
until January 6, 1996. From February 1992 until July 1994, the Company had an
arrangement with Mr. Boisdrenghien providing for the rental of a portion of his
business office as a temporary office for the Company, for $300.00 per month.
The Company has no outstanding obligations under this lease. The Company has no
agreement or understanding, express or implied, with any officer or director, or
any other person regarding employment with the Company or compensation for
services.
The Company has no retirement, pension, profit sharing or insurance or
medical reimbursement plans covering its officers and directors, and does not
contemplate implementing any such plans at this time.
No advances have been made or are contemplated by the Company to any
of its officers or directors.
Item 5. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
The following table sets forth information with respect to the
ownership of the Company's Common Stock, by all officers and directors,
individually, all officers and directors as a group, and all beneficial owners
of more than ten percent of the Common Stock. The following shareholders have
sole voting and investment power with respect to the shares.
Percent
Name and address Number of of
of owner shares Class
- ---------------- --------- --------
David J. Gregarek 540,000 50.94%
6909 S. Holly, #235
Englewood, Colorado 80112
Derrin Smith 60,000 5.66%
6909 S. Holly, #235
Englewood, Colorado 80112
Michael J. Delaney 10,000 0.09%
6909 S. Holly, #235
Englewood, Colorado 80112
Sandra Schlueter 280,208 26.43%
6711 S. Clayton Way
Littleton, CO 80122
All officers and directors 610,000 57.54%
as a group (three persons)
Sandra Schlueter, the wife of the Company's legal counsel, Henry F.
Schlueter, is the holder of 280,208 shares of the Company's Common Stock. There
are no outstanding options, warrants, or rights to purchase securities from the
Company.
-11-
<PAGE>
Item 6. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Office Space and Services Arrangement
- -------------------------------------
The Company entered into a lease arrangement with A. Jay Boisdrenghien,
the former president of the Company, providing for the rental of a portion of
his business office as a temporary office for the Company, for $300.00 per
month. This arrangement commenced in February 1992 and was terminated in July,
1994. The Company has no outstanding obligations under this lease. This lease
cannot be considered the result of arm's length negotiations. However,
management of the Company believes that the rent for its office and facilities
was no higher than that which the Company would have been required to pay to
unaffiliated parties for comparable facilities in the same locale.
Item 7. DESCRIPTION OF SECURITIES
Common Stock
- ------------
The Company has 10,000,000 shares of Common Stock authorized, par value
$.01 per share. Each share of Common Stock is entitled to share pro rata in
dividends and distributions, if any, with respect to the Common Stock when, as
and if declared by the Board of Directors from funds legally available therefor.
No holder of any shares of Common Stock has any preemptive rights to subscribe
for any securities of the Company. Upon liquidation, dissolution, or winding up
of the Company, each share of the Common Stock is entitled to share ratably in
the amount available for distribution to holders of Common Stock. All shares of
Common Stock outstanding are fully paid and nonassessable, and the Common Stock
is not subject to conversion or redemption.
Each shareholder is entitled to one vote for each share of Common Stock
held. There is no right to cumulative voting for the election of directors. This
means that holders of more than 50% of the shares voting for the election of
directors can elect all of the directors if they choose to do so, and in such
event, the holders of the remaining less than 50% of the shares voting for the
election of directors will not be able to elect any person or persons to the
Board of Directors.
The Company has not paid any dividends on its Common Stock and intends
to retain earnings, if any, to finance the development and expansion of its
business. Future dividend policy is subject to the discretion of the Board of
Directors and will depend upon a number of factors, including future earnings,
capital requirements and the financial condition of the Company.
PART II
Item 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
There is currently no established trading market for the Company's
Common Stock, and there can be no assurance that any market will develop or, if
a market should develop, that it will continue. As of the date hereof, there are
no outstanding options, warrants, or other rights to purchase or otherwise
acquire any Common Stock of the Company.
As of the date hereof, the Company has 1,060,000 shares of Common Stock
outstanding. All of these shares of Common Stock are "restricted securities," as
that term is defined under Rule 144 promulgated under the Securities Act and may
-12-
<PAGE>
only be sold in the public market pursuant to an effective registration
statement or in accordance with Rule 144. An aggregate of 150,000 of the
restricted shares are currently eligible for resale pursuant to Rule 144 and, if
sold pursuant to Rule 144, would thereafter be freely tradable (except by
affiliates of the Company) without restriction or further registration under the
Securities Act. Sales of substantial amounts of Common Stock under Rule 144 or
otherwise into the public market could adversely affect the prevailing market
prices for the Common Stock, if such a market should ever develop for the Common
Stock.
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are required to be aggregated) who has beneficially owned his or
her shares for at least two years, including "affiliates" of the Company, would
be entitled to sell within any three-month period a number of Shares equal to
the greater of 1% of the then outstanding shares of Common Stock of the Company
(approximately 10,600 shares) or the average weekly trading volume of the
Company's Common Stock during the four calendar weeks preceding the filing of
the required notice of such sale. Sales under Rule 144 are also subject to
certain waiver of sale restrictions, notice requirements and the availability of
current public information about the Company. A person who is not an "affiliate"
of the Company at any time within three months preceding a sale and who
beneficially owned shares for at least three years prior to the sale would be
entitled to sell such shares under Rule 144 without regard to such volume
limitations. Sales of substantial numbers of shares of Common Stock pursuant to
a registration statement, Rule 144, or otherwise could adversely affect the
market price of the Company's Common Stock, should such a market develop.
The number of holders of record of the Company's Common Stock is
approximately ten.
Dividends
- ---------
The Company has not paid any dividends on its Common Stock and intends
to retain earnings, if any, to finance the development and expansion of its
business. Future dividend policy is subject to the discretion of the Board of
Directors and will depend upon a number of factors, including future earnings,
capital requirements and the financial condition of the Company including
statutory limitations on the Company's ability to pay dividends under Colorado
law. The Colorado Business Corporation Act prohibits any distributions (such as
a dividend) on the company's outstanding stock if, after giving effect to the
distribution: (i) the Company would not be able to pay its debts as they become
due in the usual course of business; or (ii) the Company's total assets would be
less than the sum of its total liabilities plus (unless the articles of
incorporation permit otherwise) the amount that would be needed, if the Company
were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of shareholders whose preferential rights
are superior to those receiving the distribution. The Company's articles of
incorporation do not contain such a provision as referred to above.
Item 2. LEGAL PROCEEDINGS
The Company is currently not a party to any pending legal proceedings,
and none of its property is the subject of a pending legal proceeding.
Item 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company engaged the accounting firm of Causey Demgen & Moore Inc.
as its independent certified public accountants in connection with the
preparation and filing of the 1992 Registration Statement. During the Company's
previous two fiscal years, there were not any disagreements with Causey Demgen &
Moore Inc. on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure. As the 1992 Registration
-13-
<PAGE>
Statement was abandoned, the Company has not, since 1992, engaged any
independent certified public accountants to audit the Company's financial
statements for any purpose until the preparation of this registration statement.
On February 15, 1995, the Company engaged Cordovano and Company, P.C.,
Denver, Colorado, as its new principal independent accountant to audit the
Company's financial statements in connection with the preparation and filing of
this registration statement. Neither the Company nor anyone on its behalf has
consulted Cordovano and Company, P.C. regarding the application of accounting
principles to a specific completed or contemplated transaction, or the type of
audit opinion that might be rendered on the Company's financial statements.
Item 4. RECENT SALES OF UNREGISTERED SECURITIES
On December 31, 1995, the Company issued and sold 150,000 shares of
Common Stock to A. Jay Boisdrenghien, a former director and officer of the
Company for $1,500 in cash. On January 6, 1996, the Company issued and sold to
Mr. David J. Gregarek, the Secretary, Treasurer, and a Director of the Company,
500,000 shares of its Common Stock for a consideration of $5,000 in cash. On
January 6, 1996, the Company issued and sold to Ms. Sandra Schlueter, the wife
of the Company's legal counsel, Henry F. Schlueter, 250,000 shares of its Common
Stock for a consideration of $2,500 in cash. On January 6, the Company issued
and sold to Mr. Michael J. Delaney, the President and a Director of the Company,
an aggregate of 10,000 shares of its Common Stock for a consideration of $100 in
cash. No underwriter, broker or dealer, in its capacity as such, was involved in
any of the above sales of these unregistered securities, and no underwriting
discounts, commissions or brokerage fees were paid with respect to such
transactions.
The Company considers that the above transactions are exempt from the
registration requirements of Section 5 of the Securities Act of 1933, as
amended, by virtue of Section 4(2) and 3(b) of such Act as sales of securities
not involving a public offering. Management of the Company has represented that
the persons purchased the securities in the foregoing transactions were either
officers, directors or organizers of the Company or persons who possessed
material information concerning the Company and were in a position to obtain
from the Company information necessary to verify such information. All such
persons were offered the opportunity to obtain information from the Company in
order to evaluate the merits and risks of the proposed investment. In addition,
all such persons were informed that they were obtaining "restricted securities"
as defined in Rule 144 under the Act, that such shares cannot be transferred
without appropriate registration or exemption therefrom, that they must bear the
economic risk of the investment for an indefinite period of time and that the
Company would restrict the transfer of the securities in accordance with such
restrictions. In addition, each certificate representing shares purchased in the
above transactions bears the standard restrictive legend.
Item 5. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Article VII of the Company's Articles of Incorporation, included
herewith as Exhibit 3(i), provides for the indemnification of the Company's
officers and directors.
PART F/S
The audited financial statements of the Company, and related notes
thereto, as of December 31, 1995, and for the years ended December 31, 1995 and
1994, are accompanied by the independent auditors' report and are included
herewith.
-14-
<PAGE>
Part F/S
AURORA ACQUISITIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
Index to Financial Statements
Page
----
Independent auditors' report............................................... F-2
Balance sheet, as of June 30, 1996 (unaudited) and December 31, 1995....... F-3
Statements of operations, for the six months ended June 30, 1996 and 1995
(unaudited), for the years ended December 31, 1995 and 1994, and from
February 10, 1992 (inception) through June 30, 1996 (unaudited)............ F-4
Statements of shareholders' equity, February 10, 1992 (inception)
through June 30, 1996 (unaudited).......................................... F-5
Statements of cash flows, for the six months ended June 30, 1996 and 1995
(unaudited), for the years ended December 31, 1995 and 1994, and from
February 10, 1992 (inception) through June 30, 1996 (unaudited)............ F-6
Summary of significant accounting policies................................. F-7
Notes to financial statements.............................................. F-8
F-1
<PAGE>
Board of Directors
Aurora Acquisitions, Inc.
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of Aurora Acquisitions, Inc. (a
development stage company) as of December 31, 1995, and the related statements
of operations, shareholders' equity and cash flows for each of the years in the
period ended December 31, 1995 and 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Aurora Acquisitions, Inc. as of
December 31, 1995, and the results of its operations and its cash flows for each
of the years in the period ended December 31, 1995 and 1994, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note G to the
financial statements, the Company has suffered recurring losses from development
stage activities and has a net capital deficiency which raises substantial doubt
about its ability to continue as a going concern. Management's plans regarding
these matters are also described in Note G. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
/s/ Cordovano and Company, P.C.
Cordovano and Company, P.C.
Denver, Colorado
May 14, 1996
F-2
<PAGE>
AURORA ACQUISITIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
ASSETS
June 30, December 31,
1996 1995
----------- ------------
(unaudited)
CURRENT ASSETS
Cash.............................................. $ 114 $ 14
----------- ----------
Total current assets............................ 114 14
Organization costs,
net of accumulated amortization
of $883 and $783.................................... 117 217
---------- ----------
$ 231 $ 231
========== ==========
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable, trade............................ $ 4,000 $ 2,500
Accrued payroll taxes.............................. 489 -
--------- ----------
Total current liabilities........................ 4,489 2,500
Contingency (Note G)................................. - -
SHAREHOLDERS' DEFICIT (Note D)
Preferred stock, 100,000 shares authorized,
$1.00 par value; none issued or outstanding...... - -
Common stock, 10,000,000 shares authorized,
$0.01 par value; 300,000 shares issued and
outstanding...................................... 10,600 3,000
Additional paid-in capital......................... 17,050 17,050
Deficit accumulated during development stage....... (31,908) (22,319)
--------- ----------
Total shareholders' deficit..................... (4,258) (2,269)
--------- ----------
$ 231 $ 231
========== ==========
See accompanying summary of significant accounting policies and notes to
financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
AURORA ACQUISITIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
February 10
1992
Six Months Ended Years Ended (Inception)
June 30, December 31, Through
---------------------------- --------------------------- June 30,
1996 1995 1995 1994 1996
------------ ------------- ------------- ------------- -----------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
COSTS AND EXPENSES
General and administrative $ 6,489 $ 60 $ 1,088 $ 521 $ 18,830
General and administrative,
related party (Note B). 3,000 - - - 8,000
Amortization 100 100 200 200 883
----------- ----------- ----------- ----------- -----------
(9,589) (160) (1,288) (721) (27,713)
NON-OPERATING INCOME
Gain on forgiveness of debt of
debt (Notes B&E) - - - 5,208 10,790
NON-OPERATING EXPENSES
Interest expense - - - (1,055) (1,846)
Failed stock offering cost
(Note A) - - - - (13,139)
----------- ----------- ----------- ----------- ----------
NET INCOME (LOSS) $ (9,589) $ (160) $ (1,288) $ 3,432 $ (31,908)
=========== =========== =========== ========== ==========
</TABLE>
See accompanying summary of significant accounting policies and notes to
financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
AURORA ACQUISITIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' DEFICIT
(unaudited)
Deficit
Accumulated
Common stock Additional During Total
------------------------ Paid-in Development Shareholders'
Shares Amount Capital Stage Deficit
---------- ---------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Common stock issued for cash
to officers and directors,
February 10, 1992 (unaudited)............. 104,064 $ 1,041 $ - $ - $ 1,041
Common stock issued for cash,
February 14, 1992 (unaudited)............. 32,812 328 12,181 - 12,509
Common stock issued for cash
to officers and directors,
February 14, 1992 (unaudited)............. 13,124 131 4,869 - 5,000
Net loss for the period February 10, 1992
through December 31, 1992 (unaudited)...... - - - (22,759) (22,759)
-------- --------- ----------- ---------- ----------
Balance, December 31, 1992 (unaudited) 150,000 1,500 17,050 (22,759) (4,209)
Net loss (unaudited).......................... - - - 1,704) (1,704)
-------- -------- ---------- ---------- ----------
Balance, December 31, 1993 (unaudited)........ 150,000 1,500 17,050 (24,463) (5,913)
Net income.................................... - - - 3,432 3,432
-------- -------- ---------- ---------- ----------
Balance, December 31, 1994.................... 150,000 1,500 17,050 (21,031) (2,481)
Common stock issued for cash to officer
and director, December 31, 1995 (Note B)... 150,000 1,500 - - 1,500
Net loss...................................... - - - (1,288) (1,288)
--------- --------- ---------- ---------- ----------
Balance, December 31, 1995.................... 300,000 3,000 17,050 (22,319) (2,269)
Common stock issued for cash to officers
and directors, January 6, 1996
(Note B) (unaudited)....................... 510,000 5,100 - - 5,100
Common stock issued for cash,
January 6, 1996 (Note D) (unaudited)........ 250,000 2,500 - - 2,500
Net loss (unaudited).......................... - - - (9,589) (9,589)
---------- ---------- ---------- ----------- -----------
Balance, June 30, 1996 (unaudited)............ 1,060,000 $ 10,600 $ 17,050 $ (31,908) $ (4,258)
========= =========== =========== =========== ===========
</TABLE>
See accompanying summary of significant accounting policies and notes to
financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
AURORA ACQUISITIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
February 10,
1992
Six Months Ended Years Ended (Inception)
June 30, December 31, Through
---------------------------- --------------------------- June 30,
1996 1995 1995 1994 1996
------------ ------------- ------------- ------------- -----------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss)................................... $ (9,589) $ (160) $ (1,288) $ 3,432 $ (31,908)
Transactions not requiring cash:
Amortization........................................ 100 100 200 200 883
Changes in current assets and current liabilities:
Accounts payable and accrued expense................ 1,989 - (472) (3,681) 4,489
------------ ----------- ------------ ------------ -------------
Net cash (used in) operating activities............... (7,500) (60) (1,560) (49) (26,536)
------------ ----------- ------------ ------------ -------------
INVESTING ACTIVITIES
Organization costs incurred......................... - - - - (1,000)
------------ ------------ ----------- ------------- ------------
Net cash (used in) investing activities............... - - - - (1,000)
------------ ------------ ----------- ------------- ------------
FINANCING ACTIVITIES
Proceeds from issuance of common stock
(Notes B&D)......................................... 7,600 - 1,500 - 27,650
------------ ------------ ----------- ------------- ------------
Net cash provided by financing activities............. 7,600 - 1,500 - 27,650
------------ ------------ ----------- ------------- ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS.................................. 100 (60) (60) (49) 114
Cash and cash equivalents at beginning of period...... 14 74 74 123 -
------------ ------------ ------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............ $ 114 $ 14 $ 14 $ 74 $ 114
============ ============ =========== ============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest....................................... $ - $ - $ - $ - $ -
Income taxes................................... $ - $ - $ - $ - $ -
</TABLE>
See accompanying summary of significant accounting policies and notes to
financial statements.
F-6
<PAGE>
+ AURORA ACQUISITIONS, INC.
-------------------------
(A DEVELOPMENT STAGE COMPANY)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
June 30, 1996
Basis of presentation The financial statements presented herein have been
prepared by the Company in accordance with the accounting policies in its annual
report dated December 31, 1995 and should be read in conjunction with the notes
thereto.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim periods presented have been made.
Interim financial data presented herein are unaudited.
DEVELOPMENT STAGE COMPANY
Aurora Acquisitions, Inc. is in the development stage and its financial
statements are prepared in accordance with the applicable provision of
Statements of Financial Accounting Standard No. 7 "Accounting and Reporting for
Development Stage Enterprises".
CASH EQUIVALENTS
For financial accounting purposes and the statement of cash flows, cash
equivalents include all highly liquid debt instruments with original maturities
of three months or less.
ORGANIZATION COSTS
Organization costs have been capitalized and are being amortized over five years
using the straight-line method beginning in February 1992.
F-7
<PAGE>
AURORA ACQUISITIONS, INC.
-------------------------
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
Note A: NATURE OF ORGANIZATION
Aurora Acquisitions, Inc. (the Company) was incorporated in
Colorado on February 10, 1992, for the purposes of obtaining
capital to take advantage of business opportunities which have
potential for profit. The Company is currently a development stage
enterprise as defined in Statement No. 7 of the Financial
Accounting StandardsBoard. Since inception, the Company has been
engaged primarily in organizational and fund raising activities.
During the period ended February 10, 1992 through December 31,
1992, the Company proposed to file a registration statement in
connection with the proposed sale of its common stock.
Subsequently, the Company abandoned its effort to register and
sell the common stock. Costs of $13,139 (unaudited), incurred in
connection with the proposed offering, were charged to expense and
included in the accompanying financial statements under failed
stock offering costs.
Note B: RELATED PARTY TRANSACTIONS
On January 6, 1996, the Company issued and sold 510,000 shares
of its $.01 par value common stock to two officers and directors
for $5,100 (unaudited) in cash.
During the six months ended June 30, 1996, the Company paid
$3,000 (unaudited) to a shareholder for consulting services. The
$3,000 is included in the accompanying financial statements under
general and administrative expenses, related party.
During the year ended December 31, 1995, a principal
shareholder paid an expense for the Company totalling $1,500 in
consideration for 150,000 shares of common stock. The accompanying
financial statements reflect the $1,500 expense and a
corresponding increase to common stock.
The Company's Board of Directors passed a resolution on March
9, 1992, in which the Company would lease office space and
clerical services from the President of the Company at a cost of
$300 per month from February 1992 through January 1993. During the
year ended December 31, 1993, the president forgave $2,417
(unaudited) due to him by the Company for rental payments and
other related expenses. The Company is currently receiving the
office space and clerical services on a rent-free basis from the
president. The Company does not anticipate changing this
arrangement until the Company's operations have commenced.
During 1992, the Company paid $5,000 (unaudited) to a share-
holder as compensation for services provided in organizational
and fund-raising activities. The $5,000 (unaudited) is included
in the accompanying financial statements under general and admin-
istrative expenses, related party.
F-8
<PAGE>
AURORA ACQUISITIONS, INC.
-------------------------
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
June 30, 1996
Note C: INCOME TAXES
At June 30, 1996 and December 31, 1995, deferred taxes consisted
of the following:
June 30, December 31,
1996 1995
----------- ------------
(unaudited)
Deferred tax asset,
Net operating loss carryforward.... $ 4,130 $ 3,008
Valuation allowance.................. (4,130) ___(3,008)
----------- -----------
Net deferred taxes................... $ - $ -
=========== ============
The valuation allowance offsets the net deferred tax asset for
which there is no assurance of recovery. The loss carryforwards may
not be available to the Company should its ownership change
substantially.
The Company has available, as of December 31, 1995, unused
Federal and State operating loss carryforwards of approximately
$20,050 and $20,050, respectively, which expire through the years
2010 and 2010, respectively.
Note D: SHAREHOLDERS' DEFICIT
PREFERRED STOCK
The Company is authorized to issue 100,000 shares of $1.00 par
value preferred stock. Preferred stock shareholders receive no
cumulative voting or preemptive rights. No preferred stock had been
issued as of June 30, 1996.
COMMON STOCK
The Company is authorized to issue 10,000,000 shares of $0.01
par value common stock. Common stock shareholders receive one vote
for each outstanding share but receive no cumulative voting or
preemptive rights.
In addition to the share issuance disclosed in Note B, on
January 6, 1996, the Company issued and sold 250,000 shares of its
$.01 par value common stock to an investor for $2,500 (unaudited) in
cash.
Note E: FORGIVENESS OF DEBT
In addition to the $2,417 (unaudited) forgiven by the
president (see Note B), during the year ended December 31, 1993,
$3,165 (unaudited) was forgiven for legal expenses by the attorneys
for the Company. Certain payment to the attorneys by the Company was
contingent on the success of the Company's public stock offering.
During the year ended December 31, 1994, the former
accountants of the Company signed a note agreeing to accept $2,500 as
full payment for their services. The note reduced the amount owed by
the Company by $5,208, $3,362 for accounting services and $1,846 in
accrued interest on the debt. The $5,208 is included in the
accompanying financial statements as gain on forgiveness of debt.
Note F: CHANGE OF CONTROL
If the Company is successful in its effort to merge with or
acquire an existing privately held company, the majority of the
controls of the Company may rest with the former shareholders of the
merged or acquired company. Therefore, significant changes may be
made to the present slate of officers and directors of the Company.
F-9
<PAGE>
AURORA ACQUISITIONS INC.
------------------------
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS, CONCLUDED
June 30, 1996
Note G: GOING CONCERN
As of June 30, 1996, the Company has suffered recurring losses
from development stage activities and has a deficit in working
capital which raises substantial doubt about its ability to continue
as a going concern. Various shareholders inject cash into the
Company, as needed, to pay for operating expenses. Management plans
to continue this arrangement until such time as a merger or
acquisition, if ever, is consummated. Management's long-term plan is
to search for and consummate a merger with or acquisition of, a
private company. There is no assurance that a suitable candidate will
be found.
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PART III
Item 1. EXHIBITS
Exhibit Number Description of Exhibit
-------------- ----------------------
3(i) Articles of Incorporation
3(ii) Bylaws
12 Form of Lockup Agreement
27 Financial Data Schedule
The above-referenced Exhibits follow the Signatures to this Form 10-SB.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
AURORA ACQUISITIONS, INC.
(Registrant)
/s/ Michael J. Delaney
Date: July 12, 1996 By:________________________________
Michael J. Delaney,
President and a Director
/s/ David J. Gregarek
Date: July 12, 1996 By:________________________________
David J. Gregarek, Secretary,
Treasurer, and a Director
/s/ Derrin Smith
Date: July 12, 1996 By:________________________________
Derrin Smith, Director
ARTICLES OF AMENDMENT OF
AUBURN ENTERPRISES, INC.
Auburn Enterprises, Inc., a Colorado corporation, (herein referred to as
the "Corporation"), hereby certifies to the Secretary of State that:
FIRST: The name of the Corporation is Auburn Enterprises, Inc.
SECOND: The Articles of Incorporation of the Corporation are hereby amended
by striking in its entirety Article I and by substituting in lieu thereof the
following:
The name of the corporation shall be: Aurora Acquisitions, Inc.
THIRD: The amendment was adopted by the written informal action,
unanimously taken by the stockholders of the corporation in accordance with
Sections 7-2-107 and 7-4-122 of the Colorado Corporation Code on the 8th day of
July, 1992.
FOURTH: The number of shares which were represented by the informal action
by stockholders approving the amendments was sufficient for approval under the
provisions of Section 7-2-107 of the Colorado Corporation Code.
FIFTH: The amendment does not provide for nor require the exchange,
reclassification, or cancellation of issued shares.
SIXTH: The Amendment does not affect a change in the amount of the
Corporation's stated capital.
IN WITNESS WHEREOF, the Corporation has caused these presents to be signed
in its name and on its behalf by its President and its Secretary on this 8th day
of July, 1992, and its President and its Secretary acknowledge that these
Articles of Amendment are the act and deed of the Corporation and, under the
penalties of perjury, that the matters and facts set forth herein with respect
to authorization and approval are true in all material respects to the best of
the President's and the secretary's knowledge information and belief.
/s/ A. Jay Boisdrenghien
__________________________________
A. Jay Boisdrenghien, President
ATTEST:
/s/ Craig W. McCully
_____________________________________
Craig W. McCully, Secretary
<PAGE>
STATE OF COLORADO
COUNTY OF ARAPAHOE
The foregoing Articles of Amendment were signed before me by A. Jay
Boisdrenghien as President of Auburn Enterprises, Inc., who under oath, stated
that the matters and facts set forth therein with respect to authorization and
approval are true in all material respects to the best of his knowledge and
belief.
Dated this 8th day of July, 1992.
/S/
____________________________________
Notary Public
My Commission Expires: Address:
____________________________________ ____________________________________
____________________________________
<PAGE>
ARTICLES OF INCORPORATION
OF
AUBURN ENTERPRISES. INC.
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned incorporator being a natural person of the age of
eighteen years or more and desiring to form a body corporate under the laws of
the State of Colorado does hereby sign, verify and deliver in duplicate to the
Secretary of State of the State of Colorado, these Articles of Incorporation:
ARTICLE I
NAME
The name of the corporation shall be: Auburn Enterprises, Inc.
ARTICLE II
PERIOD OF DURATION
The corporation shall exist in perpetuity, from and after the date of
filing these Articles of Incorporation with the Secretary of State of the State
of Colorado unless dissolved according to law.
ARTICLE III
PURPOSES AND POWERS
1. Purposes. Except as restricted by these Articles of Incorporation, the
corporation is organized for the purpose of transacting all lawful business for
which corporations may be incorporated pursuant to the Colorado Corporation
Code.
ARTICLE IV
CAPITAL STOCK
1. CAPITAL STOCK. The aggregate number of shares which this corporation
shall have authority to issue is ten million (10,000,000) shares of a par value
of one cent ($.01) which shares shall be designated "Common Stock" and one
hundred thousand (100,000) shares of a par value of one dollar ($1.00) which
shares shall be designated "Preferred Stock". Both the Common Stock and
Preferred Stock may be subdivided and issued in series pursuant to resolutions
<PAGE>
of the board of directors containing such designations, limitations, rights and
preferences which the board of directors, in its sole discretion, may determine
to be appropriate.
2. DIVIDENDS. Dividends in cash, property or shares of the corporation may
be paid upon the Common Stock as and when declared by the board of directors in
conformance with the resolutions of the board of directors authorizing the
issuance of the stock, to the extent and in the manner permitted by law provided
however, no Common Stock dividend shall be paid for any year unless the holders
of Preferred Stock, if any, shall have received any Preferred Stock preferential
dividends, if any, to which they are entitled for such year.
3. DISTRIBUTION IN LIQUIDATION. Upon any liquidation, dissolution or
winding up of the corporation, and after paying or adequately providing for the
payment of all its obligations, the remainder of the assets of the corporation
shall be distributed, either in cash or in kind, in the order provided herein.
Such distributions shall be made first, to the holders of the Preferred Stock
until any amounts required to be distributed as a liquidation preference to the
holders of the Preferred Stock have been distributed. If the remainder of the
assets is insufficient to fully satisfy the liquidation preference(s) of the
Preferred Stock, then those assets shall be distributed pro rata to each series
of Preferred Stock beginning with the series having the most superior
liquidation preference and continuing according to the liquidation preference
priority of each series until the remaining assets have been fully distributed.
Second, the assets remaining after satisfaction of the liquidation preference(s)
of the Preferred Stock shall be distributed pro rata to the holders of the
Common Stock, unless otherwise provided in the resolutions of the board of
directors authorizing the issuance of the Common Stock in series, in which case
the priority for distribution in liquidation established in those resolutions
shall be followed.
4. VOTING RIGHTS: CUMULATIVE VOTING. Each outstanding share of Common Stock
shall be entitled to one vote and each fractional share of Common Stock shall be
entitled to a corresponding fractional vote on each matter submitted to a vote
of shareholders. One third of the shares entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of shareholders. Cumulative
voting shall not be allowed in the election of directors of the corporation.
When, with respect to any action to be taken by shareholders of this
corporation, the laws of Colorado require the vote or concurrence of the holders
of two-thirds of the outstanding shares, of the shares entitled to vote thereon,
or of any class or series, such action may be taken by the vote or concurrence
of a majority of such shares or class or series thereof. Except as otherwise
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provided by these Articles of Incorporation or the Colorado Corporation Code, if
a quorum is present, the affirmative vote of a majority of the shares
represented at the meeting and entitled to vote on the subject matter shall be
the act of the shareholders.
5. DENIAL OF PREEMPTIVE RIGHTS. No holder of any shares of the corporation,
whether now or hereafter authorized, shall have any preemptive or preferential
right to acquire any shares or securities of the corporation, including shares
or securities held in the treasury of the corporation.
6. TRANSFER RESTRICTIONS. The corporation shall have the right to impose
restrictions upon the transfer of any of its authorized shares or any interest
therein. The board of directors is hereby authorized on behalf of the
corporation to exercise the corporation's right to so impose such restrictions.
ARTICLE V
TRANSACTIONS WITH INTERESTED DIRECTORS
No contract or other transaction between the corporation and one or more of
its directors or any other corporation, partnership, firm, association, or
entity in which one or more of its directors are directors or officers or are
financially interested shall be either void or voidable solely because of such
relationship or interest or solely because such directors are present at or
participate in the meeting of the board of directors or a committee thereof
which authorizes, approves, or ratifies such contract or transaction or solely
because their votes are counted for such purpose if:
(a) The material facts of such relationship or interest and as to the
contract or transaction are disclosed or are known to the board of directors or
committee which in good faith authorizes, approves, or ratifies the contract or
transaction by an affirmative vote of a majority of the disinterested directors
even though the disinterested directors are less than a quorum, or consent
sufficient for the purpose; or
(b) The material facts of such relationship or interest and as to the
contract or transaction are disclosed or are known to the shareholders entitled
to vote and the shareholders specifically authorize, approve, or ratify in good
faith such contract or transaction by an affirmative vote or by written consent,
or
(c) The contract or transaction was fair and reasonable corporation.
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Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the board of directors or a committee thereof which
authorizes, approves, or ratifies such contract or transaction.
ARTICLE VI
CORPORATE OPPORTUNITY
The officers, directors and other members of management of this corporation
shall be subject to the doctrine of "corporate opportunities" only insofar as it
applies to business opportunities in which this corporation has expressed an
interest as determined from time to time by this corporation's board of
directors as evidenced by resolutions appearing in the corporation's minutes.
Once such areas of interest are delineated, all such business opportunities
within such areas of interest which come to the attention of the officers,
directors, and other members of management of this corporation shall be
disclosed promptly to this corporation and made available to it. The board of
directors may reject any business opportunity presented to it and thereafter any
officer, director or other member of management may avail himself of such
opportunity. Until such time as this corporation, through its board of
directors, has designated an area of interest, the officers, directors and other
members of management of this corporation shall be free to engage in such areas
of interest on their own and this doctrine shall not limit the rights of any
officer, director or other member of management of this corporation to continue
a business existing prior to the time that such area of interest is designated
by the corporation. This provision shall not be construed to release any
employee of this corporation (other than an officer, director or member of
management) from any duties which he may have to this corporation.
ARTICLE VII
INDEMNIFICATION AND LIMITATION OF LIABILITY
1. DEFINITIONS. The following definitions shall apply to the terms as used
in this Article:
A. "Corporation" includes this corporation, and, in addition, for
purposes of this Article references to "the corporation" shall also include any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and employees
or agents, so that any person who is or was a director, officer, employee or
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<PAGE>
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this Article with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
B. "Director" means an individual who is or was a director of the
corporation and an individual who, while a director of the corporation, is or
was serving at the corporation's request as a director, officer, partner,
trustee, employee, or agent of any other foreign or domestic corporation or of
any partnership, joint venture, trust, other enterprise, or employee benefit
plan. A director shall be considered to be serving an employee benefit plan at
the corporation's request if his or her duties to the corporation also impose
duties on or otherwise involve services by him or her to the plan or to
participants in or beneficiaries of the plan. "Director" includes, unless the
context otherwise requires, the estate or personal representative of a director.
C. "Expenses" includes attorney fees.
D. "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), or reasonable expense incurred with respect to a proceeding.
E. "Official capacity", when used with respect to a director, means the
office of director in the corporation, and, when used with respect to a person
other than a director, means the office in the corporation held by the officer
or the employment or agency relationship undertaken by the employee or agent on
behalf of the corporation. "Official capacity" does not include service for any
other foreign or domestic corporation or for any partnership, joint venture,
trust, other enterprise, or employee benefit plan.
F. "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
"Proceeding" means any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative, or investigative and
whether formal or informal.
2. PERMISSIVE INDEMNIFICATION FOR LIABILITY.
A. Except as provided in paragraph D of this Section 2, the corporation
may indemnify against liability incurred in any proceeding an individual made a
party to the proceeding because he or she is or was a director if:
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<PAGE>
i. He or she conducted himself or herself in good faith;
ii. He or she reasonably believed:
a. In the case of conduct in his or her official capacity with
the corporation, that his or her conduct was in the corporation's best
interests; or
b. In all other cases, that his or her conduct was at least not
opposed to the corporation's best interests; and
iii. In the case of any criminal proceeding, he or she had no
reasonable cause to believe his or her conduct was unlawful.
B. A director's conduct with respect to an employee benefit plan for a
purpose he or she reasonably believed to be in the interests of the participants
in or beneficiaries of the plan is conduct that satisfies the requirements of
this Section 2. A director's conduct with respect to an employee benefit plan
for a purpose that he or she did not reasonably believe to be in the interests
of the participants in or beneficiaries of the plan shall be deemed not to
satisfy the requirements of this Section 2.
C. The termination of any proceeding by judgment, order, settlement, or
conviction, or upon a plea of nolo contendere or its equivalent, is not of
itself determinative that the individual did not meet the standard of conduct
set forth in paragraph A of this Section 2.
D. The corporation may not indemnify a director under this Section 2
either:
i. In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation; or
ii. In connection with any proceeding charging improper personal
benefit to the director, whether or not involving action in his or her official
capacity, in which he or she was adjudged liable on the basis that personal
benefit was improperly received by him or her.
E. Indemnification permitted under this Section 2 in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.
3. MANDATORY INDEMNIFICATION.
Except as limited by these Articles of Incorporation, the corporation shall
be required to indemnify a director of the corporation who was wholly
successful, on the merits or otherwise, in defense of any proceeding to which he
or she was a party against reasonable expenses incurred by him or her in
connection with the proceeding.
B. Except as otherwise limited by these Articles of Incorporation, a
director who is or was a party to a proceeding may apply for indemnification to
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<PAGE>
the court conducting the proceeding or to another court of competent
jurisdiction. On receipt of an application, the court, after giving any notice
the court considers necessary, may order indemnification in the following
manner:
i. If it determines the director is entitled to mandatory
indemnification under paragraph A of this Section 3, the court shall order
indemnification, in which case the court shall also order the corporation to pay
the director's reasonable expenses incurred to obtain court-ordered
indemnification.
ii. determines that the director is fairly and reasonably entitled
to indemnification in view of all the relevant circumstances, whether or not he
or she met the standard of conduct set forth in paragraph A of Section 2 of this
Article or was adjudged liable in the circumstances described in paragraph D of
Section 2 of this Article, the court may order such indemnification as the court
deems proper; except that the indemnification with respect to any proceeding in
which liability shall have been adjudged in the circumstances described in
paragraph D of Section 2 of this Article is limited to reasonable expenses
incurred.
4. LIMITATION ON INDEMNIFICATION.
The corporation may not indemnify a director under Section 2 of this
Article unless authorized in the specific case after a determination has been
made that indemnification of the director is permissible in the circumstances
because he or she has met the standard of conduct set forth in paragraph A of
Section 2 of this Article.
B. The determination required to be made by paragraph A of this Section
4 shall be made:
i. By the board of directors by a majority vote of a quorum, which
quorum shall consist of directors not parties to the proceeding; or
ii. If a quorum cannot be obtained, by a majority vote of a
committee of the board designated by the board, which committee shall consist of
two or more directors not parties to the proceeding; except that directors who
are parties to the proceeding may participate in the designation of directors
for the committee.
C. If the quorum cannot be obtained or the committee cannot be
established under paragraph B of this Section 4, or even if a quorum is obtained
or a committee designated if such quorum or committee so directs, the
determination required to be made by paragraph A of this Section 4 shall be
made:
i. By independent legal counsel selected by a vote of the board of
directors or the committee in the manner specified in subparagraph (i) or (ii)
of paragraph B of this Section 4 or, if a quorum of the full board cannot be
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obtained and a committee cannot be established, by independent legal counsel
selected by a majority vote of the full board; or
ii. By the shareholders.
D. Authorization of indemnification and evaluation as to reasonableness
of expenses shall be made in the same manner as the determination that
indemnification is permissible; except that, if the determination that
indemnification is permissible is made by independent legal counsel,
authorization of indemnification and evaluation as to reasonableness of expenses
shall be made by the body that selected said counsel.
5. ADVANCE PAYMENT OF EXPENSES.
A. The corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of the final
disposition of the proceeding if:
i. The director furnishes the corporation with a written affirmation
of his or her good-faith belief that he or she has met the standard of conduct
described in subparagraph (i) of paragraph A of Section 2 of this Article;
ii. The director furnishes the corporation with a written
undertaking, executed personally or on his or her behalf, to repay the advance
if it is determined that he or she did not meet such standard of conduct; and
iii. A determination is made that the facts then known to those
making the determination would not preclude indemnification under this Section
5.
B. The undertaking required by subparagraph (ii) of paragraph A of this
Section 5 shall be an unlimited general obligation of the director but need not
be secured and may be accepted without reference to financial ability to make
repayment. C. Determinations and authorizations of payments under this Section 5
shall be made in the manner specified in Section 4 of this Article.
6. REIMBURSEMENT OF WITNESS EXPENSES. The corporation shall pay or
reimburse expenses incurred by a director in connection with his or her
appearance as a witness in a proceeding at a time when he or she has not been
made a named defendant or respondent in the proceeding.
7. INSURANCE FOR INDEMNIFICATION. The corporation may purchase and maintain
insurance on behalf of a person who is or was a director, officer, employee,
fiduciary, or agent of the corporation or who, while a director, officer,
employee, fiduciary, or agent of the corporation, is or was serving at the
request of the corporation as a director, officer, partner, trustee, employee,
fiduciary, or agent of any other foreign or domestic corporation or of any
partnership, joint venture, trust, other enterprise, or employee benefit plan
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<PAGE>
against any liability asserted against or incurred by him or her in any such
capacity or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify him or her against such liability
under the provisions of this Article. Any such insurance may be procured from
any insurance company designated by the board of directors of the corporation,
whether such insurance company is formed under the laws of this state or any
other jurisdiction of the United States or elsewhere, including any insurance
company in which the corporation has equity or any other interest, through stock
ownership or otherwise.
8. NOTICE OF INDEMNIFICATION. Any indemnification of or advance of expenses
to a director in accordance with this Article, if arising out of a proceeding by
or on behalf of the corporation, shall be reported in writing to the
shareholders with or before the notice of the next shareholders' meeting.
9. INDEMNIFICATION OF OFFICERS. Employees and Agents of the Corporation.
The board of directors shall indemnify and advance expenses to an officer,
employee or agent of the corporation who is not a director of the corporation to
the same or greater extent as to a director as provided for in these Articles of
Incorporation, the Bylaws, by resolution of the shareholders or directors, or by
contract, in a manner consistent with the Colorado Corporation Code.
10. INDEMNIFICATION OF HEIRS. Executors and Administrators. The
indemnification provided by this Article, shall continue as to a person who has
ceased to be a director, officer, employee or agent, and shall inure to the
benefit of the heirs, executors and administrators of such a person.
11. LIMITATION OF LIABILITY. No director shall be personally liable for any
injury to person or property arising out of a tort committed by an employee
unless such director was personally involved in the situation giving rise to the
litigation or unless such director committed a criminal offense. No director
shall be personally liable to the corporation or to its shareholders for
monetary damages for breach of fiduciary duty as a director, excluding (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 in violation of
Section 114, Article V of the Colorado Corporate Code; or (iv) any transaction
from which the director derived an improper personal benefit.
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ARTICLE VIII
AMENDMENTS
The corporation reserves the right to amend its Articles of Incorporation
from time to time in accordance with the Colorado Corporation Code.
ARTICLE IX
ADOPTION AND AMENDMENT OF BYLAWS
The initial Bylaws of the corporation shall be adopted by its board of
directors. The power to alter or amend or repeal the Bylaws or adopt new Bylaws
shall be vested in the board of directors; provided, however, that the
shareholders, upon approval of a majority in interest of the outstanding shares
entitled to vote, may amend or repeal the Bylaws even though the Bylaws may also
be amended or repealed by the board of directors.
The Bylaws may contain any provisions for the regulation and management of
the affairs of the corporation not inconsistent with law or these Articles of
Incorporation.
ARTICLE X
REGISTERED OFFICE AND REGISTERED AGENT
The address of the initial registered office of the corporation is 3441
South Lincoln, Englewood, Colorado 80110, and the name of the initial registered
agent at such address is A. Jay Boisdrenghien. Either the registered office or
the registered agent may be changed in the manner provided by law.
ARTICLE XI
INITIAL BOARD OF DIRECTORS
The number of directors of the corporation shall be fixed by the Bylaws
of the corporation. So long as the number of directors shall be less than three,
no shares of this corporation may be issued and held of record by more
shareholders than there are directors. The names and addresses of the persons
who shall serve as directors until the first annual meeting of shareholders and
until their successors are elected and shall qualify are as follows:
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NAME ADDRESS
---- -------
A. Jay Boisdrenghien 3441 South Lincoln
Englewood, Colorado 80110
Lynn Boisdrenghien 3441 South Lincoln
Englewood, Colorado 80110
Craig W. McCully 5350 South Roslyn Street, #150
Englewood, Colorado 8011
ARTICLE XII
INCORPORATOR
The name and address of the incorporator is as follows:
NAME ADDRESS
---- -------
Bradley A. Cromer 7345 East Peakview Avenue
Englewood, Colorado 80111
IN WITNESS WHEREOF, the above-named incorporator has signed these Articles
of Incorporation on February 6, 1992.
/S/ Bradley Cromer
_______________________________________
Bradley A. Cromer
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STATE OF COLORADO
COUNTY OF ARAPAHOE
I, the undersigned, a Notary Public, hereby certify that on February 6,
1992 the above-named incorporator personally appeared before me, and being by me
first duly sworn declared that he is the person who signed the foregoing
document as incorporator and that the statements therein contained are true.
WITNESS my hand and official seal.
/S/
_____________________________________
Notary Public
Address:______________________________
______________________________
______________________________
My Commission expires ______________________________
(N O T A R I A L S E A L)
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BYLAWS
OF
AUBURN ENTERPRISES, INC.
dated
February 11, 1992
<PAGE>
ARTICLE I
OFFICES
1.1 BUSINESS OFFICE. The principal office and place of business of the
corporation in the State of Colorado shall be at 3441 South Lincoln, Englewood,
Colorado 80110. Other offices and places of business may be established from
time to time by resolution of the Board of Directors or as the business of the
corporation may require.
1.2 REGISTERED OFFICE. The registered office of the corporation,
required by the Colorado Corporation Code to be maintained in the State of
Colorado, may be, but need not be, identical with the principal office in the
State of Colorado, and the address of the registered office may be changed from
time to time by the Board of Directors.
ARTICLE II
SHARES AND TRANSFER THEREOF
2.1 REGULATION. The Board of Directors may make such rules and
regulations as it may deem appropriate concerning the issuance, transfer and
registration of certificates for shares of the corporation, including the
appointment of transfer agents and registrars.
2.2 CERTIFICATES FOR SHARES. The shares of the corporation may, but
need not be, represented by certificates. Unless the Colorado Corporation Code
or another law expressly provides otherwise, the fact that the shares are not
represented by certificates shall have no effect on the rights and obligations
of shareholders.
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Certificates representing shares of the corporation shall be
respectively numbered serially for each class of shares, or series thereof, as
they are issued, shall be impressed with the corporate seal or a facsimile
thereof, and shall be signed by the Chairman or Vice-Chairman of the Board of
Directors or by the President or a Vice-President and by the Treasurer or an
Assistant Treasurer or by the Secretary or an Assistant Secretary; provided that
such signatures may be a facsimile if the certificate is countersigned by a
transfer agent, or registered by a registrar, both of which may be the
corporation itself or its employee. Each certificate shall state the name of the
corporation, the fact that the corporation is organized or incorporated under
the laws of the State of Colorado, the name of the person to whom issued, the
date of issue, the class (or series of any class), the number of shares
represented thereby and the par value of the shares represented thereby or a
statement that such shares are without par value. A statement of the
designations, preferences, qualifications, limitations, restrictions and special
or relative rights of the shares of each class shall be set forth in full or
summarized on the face or back of the certificates which the corporation shall
issue, or in lieu thereof, the certificate may set forth that such a statement
or summary will be furnished to any shareholder upon request without charge.
Each certificate shall be otherwise in such form as may be prescribed by the
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Board of Directors and as shall conform to the rules of any stock exchange on
which the shares may be listed.
The corporation may issue certificates representing fractional shares
and may make transfers creating a fractional interest in a share of stock. The
corporation may issue scrip in lieu of any fractional shares, such scrip to have
terms and conditions specified by the Board of Directors.
2.3 CANCELLATION OF CERTIFICATES. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificates shall be
issued in lieu thereof until the former certificate for a like number of shares
shall have been surrendered and canceled, except lost, stolen or destroyed
certificates.
2.4 LOST, STOLEN OR DESTROYED CERTIFICATES. Any shareholder claiming
that his certificate for shares is lost, stolen or destroyed may make an
affidavit or affirmation of the fact and lodge the same with the Secretary of
the corporation, accompanied by a signed application for a new certificate.
Thereupon, and upon the giving of a satisfactory bond of indemnity to the
corporation not exceeding an amount double the value of the shares as
represented by such certificate (the necessity for such bond and the amount
required to be determined by the President and Treasurer of the corporation), a
new certificate may be issued of the same tenor and representing the same
number, class and series of shares as were represented by the certificate
alleged to be lost, stolen or destroyed.
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2.5 TRANSFER OF SHARES. Subject to the terms of any shareholder
agreement relating to the transfer of shares or other transfer restrictions
contained in the Articles of Incorporation or authorized therein, shares of the
corporation shall be transferable on the books of the corporation by the holder
thereof in person or by his duly authorized attorney, upon the surrender and
cancellation of a certificate or certificates for a like number of shares. Upon
presentation and surrender of a certificate for shares properly endorsed and
payment of all taxes therefor, the transferee shall be entitled to a new
certificate or certificates in lieu thereof. As against the corporation, a
transfer of shares can be made only on the books of the corporation and in the
manner hereinabove provided, and the corporation shall be entitled to treat the
holder of record of any share as the owner thereof and shall not be bound to
recognize any equitable or other claim to or interest in such share on the part
of any other person, whether or not it shall have express or other notice
thereof, save as expressly provided by the statutes of the State of Colorado.
2.6 TRANSFER AGENT. Unless otherwise specified by the Board of
Directors by resolution, the Secretary of the corporation shall act as transfer
agent of the certificates representing the shares of stock of the corporation.
He shall maintain a stock transfer book, the stubs in which shall set forth
among other things, the names and addresses of the holders of all issued shares
of the corporation, the number of shares held by each, the certificate numbers
representing such shares, the date of issue of the certificates representing
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such shares, and whether or not such shares originate from original issue or
from transfer. Subject to Section 3.8, the names and addresses of the
shareholders as they appear on the stubs of the stock transfer book shall be
conclusive evidence as to who are the shareholders of record and as such
entitled to receive notice of the meetings of shareholders, to vote at such
meetings; to examine the list of the shareholders entitled to vote at meetings;
to receive dividends; and to own, enjoy and exercise any other property or
rights deriving from such shares against the corporation. Each shareholder shall
be responsible for notifying the Secretary in writing of any change in his name
or address and failure so to do will relieve the corporation, its directors,
officers and agents, from liability for failure to direct notices or other
documents, or pay over or transfer dividends or other property or rights, to a
name or address other than the name and address appearing on the stub of the
stock transfer book.
2.7 CLOSE OF TRANSFER BOOK AND RECORD DATE. For the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders, or any adjournment thereof, or shareholders entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors may provide that the stock
transfer books shall be closed for a stated period, but not to exceed, in any
case, fifty days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of, or to vote at a meeting of
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shareholders, such books shall be closed for at least ten days immediately
preceding such meeting. In lieu of closing the stock transfer books, the Board
of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than fifty
days and, in case of a meeting of shareholders, not less than ten days prior to
the date on which the particular action requiring such determination of
shareholders is to be taken. If the stock transfer books are not closed and no
record date is fixed for the determination of shareholders entitled to notice of
or to vote at a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the date on which notice of the meeting is mailed or the
date on which the resolution of the Board of Directors declaring such dividend
is adopted, as the case may be, shall be the record date for such determination
of shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
2.8 SHARES WITHOUT CERTIFICATES.
(A) Unless provided otherwise in these Bylaws or in the
corporation's Articles of Incorporation, the Board of Directors may authorize
the issuance of any of the corporation's classes or series of shares without
certificates. Such authorization shall not affect shares already represented by
certificates until they are surrendered to the corporation.
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(B) Within a reasonable time following the issue or transfer
of shares without certificates, the corporation shall send the shareholder a
complete written statement of the information required by Section 2.2 hereof to
be on certificates.
ARTICLE III
SHAREHOLDERS AND MEETINGS THEREOF
3.1 SHAREHOLDERS OF RECORD. Only shareholders of record on the books of
the corporation shall be entitled to be treated by the corporation as holders in
fact of the shares standing in their respective names, and the corporation shall
not be bound to recognize any equitable or other claim to, or interest in, any
shares on the part of any other person, firm or corporation, whether or not it
shall have express or other notice thereof, except as expressly provided by the
laws of Colorado.
3.2 MEETINGS. Meetings of shareholders shall be held at the principal
office of the corporation, or at such other place, either within or without the
State of Colorado, as specified from time to time by the Board of Directors. If
the Board of Directors shall specify another location such change in location
shall be recorded on the notice calling such meeting.
3.3 ANNUAL MEETING. The annual meeting of shareholders of the
corporation for the election of directors, and for the transaction of such other
business as may properly come before the meeting shall be held within six months
of the close of the corporation's accounting and tax year, pursuant to
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resolution of the Board of Directors. If the election of Directors shall not be
held on the day designated herein for any annual meeting of the shareholders,
the Board of Directors shall cause the election to be held at a special meeting
of the shareholders as soon thereafter as may be convenient. Failure to hold the
annual meeting at the designated time shall not work a forfeiture or dissolution
of the corporation.
3.4 SPECIAL MEETINGS. Special meetings of shareholders, for any purpose
or purposes, unless otherwise prescribed by statute, may be called by the
President, the Board of Directors, or the holders of not less than one-tenth of
all the shares entitled to vote at the meeting.
3.5 COURT ORDERED MEETING.
(A) Any court of competent jurisdiction in the State of
Colorado may summarily order a meeting to be held:
(1) On application of any shareholder of the corporation
if an annual meeting was not held within six months after the end of the
corporation's fiscal year or fifteen months after its last annual meeting,
whichever is earlier; or
(2) On application of a shareholder who participated in a
proper call for a special meeting if (i) notice of the special meeting was not
given within thirty days after the date the demand was delivered to the
corporation's Secretary; or (ii) the special meeting was not held in accordance
with the notice.
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(B) The court may fix the time and place of the meeting,
specify a record date for determining shareholders entitled to notice of and to
vote at the meeting, prescribe the form and content of the meeting notice, fix
the quorum required for the meeting or direct that the votes represented at the
meeting constitute a quorum for the meeting, and enter other orders necessary to
permit the meeting to be held.
3.6 NOTICE.
(A) Written notice stating the place, day and hour of the
meeting of shareholders and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered unless otherwise
prescribed by statute not less than ten days nor more than fifty days before the
date of the meeting, either personally or by mail, by or at the direction of the
President, the Secretary, or the officer or person calling the meeting to each
shareholder of record entitled to vote at such meeting; except that, if the
authorized shares are to be increased, at least thirty days' notice shall be
given, and if the sale of all or substantially all of the corporation's assets
is to be voted upon, at least twenty days' notice shall be given.
(B) Notice to shareholders of record, if mailed, shall be
deemed delivered as to any shareholder of record, when deposited in the United
States mail, addressed to the shareholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid. If three
successive letters mailed to the last-known address of any shareholder of record
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are returned as undeliverable, no further notices to such shareholder shall be
necessary until another address for such shareholder is made known to the
corporation.
(C) When meeting is adjourned to another time or place, notice
need not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting the corporation may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each shareholder of
record entitled to vote at the meeting.
3.7 MEETING OF ALL SHAREHOLDERS. If all of the shareholders shall meet
at any time and place, either within or without the State of Colorado, and
consent to the holding of a meeting at such time and place, such meeting shall
be valid without call or notice, and at such meeting any corporate action may be
taken.
3.8 VOTING RECORD. The officer or agent having charge of the stock
transfer books for shares of the corporation shall make, at least ten days
before such meeting of shareholders, a complete record of the shareholders
entitled to vote at each meeting of shareholders or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of shares
held by each. The record, for a period of ten days prior to such meeting, shall
be kept on file at the principal office of the corporation, whether within or
without the State of Colorado, and shall be subject to inspection by any
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shareholder for any purpose germane to the meeting at any time during usual
business hours. Such record shall be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting for the purposes thereof.
The original stock transfer books shall be the prima facie evidence as
to who are the shareholders entitled to examine the record or transfer books or
to vote at any meeting of shareholders.
3.9 QUORUM. A majority of the outstanding shares of the corporation
entitled to vote, represented in person or by proxy, shall constitute a quorum
at any meeting of shareholders, except as otherwise provided by the Colorado
Corporation Code and the Articles of Incorporation. In the absence of a quorum
at any such meeting, a majority of the shares so represented may adjourn the
meeting from time to time for a period not to exceed sixty days without further
notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed. The shareholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
3.10 MANNER OF ACTING. If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the shareholders, unless the vote of a
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greater proportion or number or voting by classes is otherwise required by
statute or by the Articles of Incorporation or these Bylaws.
3.11 PROXIES. At all meetings of shareholders a shareholder may vote in
person or by proxy executed in writing by the shareholder or by his duly
authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the
corporation before or at the time of the meeting. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise provided in the
proxy.
3.12 VOTING OF SHARES. Unless otherwise provided by these Bylaws or the
Articles of Incorporation, each outstanding share entitled to vote shall be
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders, and each fractional share shall be entitled to a corresponding
fractional vote on each such matter
3.13 VOTING OF SHARES BY CERTAIN HOLDERS.
(A) If shares or other securities having voting power stand of
record in the names of two or more persons, whether fiduciaries, members of a
partnership, joint tenants, tenants in common, tenants by the entirety, or
otherwise, or if two or more persons have the same fiduciary relationship
respecting the same shares, voting with respect to the shares shall have the
following effect:
(1) If only one person votes, his act binds all;
(2) If two or more persons vote, the act of the majority
so voting binds all;
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(3) If two or more persons vote, but the vote is evenly
split on any particular matter, each faction may vote the securities in question
proportionately, or any person voting the shares of a beneficiary, if any, may
apply to any court of competent jurisdiction in the State of Colorado to appoint
an additional act with the persons so voting the shares. The shares shall then
be voted as determined by a majority of such persons and the person appointed by
the court. If a tenancy is held in unequal interests, a majority or even split
for the purpose of this subparagraph (3) shall be a majority or even split in
interest.
The effects of voting stated in paragraph (A) of this Section 3.13
shall not be applicable if the Secretary of the corporation is given written
notice of alternate voting provisions and is furnished with a copy of the
instrument or order wherein the alternate voting provisions are stated.
(B) Shares standing in the name of another corporation may be
voted by such officer, agent or proxy as the bylaws of such corporation may
prescribe, or, in the absence of such provision, as the board of directors of
such other corporation may determine.
(C) Shares 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 shares into the name of such administrator, executor, court
appointed guardian or conservator. Shares standing in the name of a trustee may
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be voted by him, either in person or by proxy, but no trustee shall be entitled
to vote shares held by him without a transfer of such shares into his name.
(D) Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a receiver may be
voted by such receiver without the transfer thereof into his name if authority
so to do be contained in an appropriate order of the court by which such
receiver was appointed.
(E) A shareholder whose shares are pledged shall be entitled
to vote such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled to vote the shares so
transferred.
(F) Neither shares of its own stock belonging to this
corporation, nor shares of its own stock held by it in a fiduciary capacity, nor
shares of its own stock held by another corporation if the majority of shares
entitled to vote for the election of directors of such corporation is held by
this corporation may be voted, directly or indirectly, at any meeting and shall
not be counted in determining the total number of outstanding shares at any
given time.
(G) Redeemable shares which have been called for redemption
shall not be entitled to vote on any matter and shall not be deemed outstanding
shares on and after the date on which written notice of redemption has been
mailed to shareholders and a sum sufficient to redeem such shares has been
deposited with a bank or trust company with irrevocable instruction and
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authority to pay the redemption price to the holders of the shares upon
surrender of certificates therefor.
3.14 INFORMAL ACTION BY SHAREHOLDERS.
(A) Any action required or permitted to be taken at a meeting
of the shareholders may be taken without a meeting if the action is evidenced by
one or more written consents describing the action taken, signed by each
shareholder entitled to vote and delivered to the Secretary of the corporation
for inclusion in the minutes or for filing with the corporate records. Action
taken under this subsection (A) is effective when all shareholders entitled to
vote have signed the consent, unless the consent specifies a different effective
date.
(B) Written consent of the shareholders entitled to vote has
the same force and effect as an unanimous vote of such shareholders and may be
stated as such in any document.
(C) The record date for determining shareholders entitled to
take action without a meeting is the date the first shareholder signs the
consent under subsection (A) of this section.
3.15 VOTING BY BALLOT. Voting on any question or in any election may be
by voice vote unless the presiding officer shall order or any shareholder shall
demand that voting be by ballot.
3.16 CUMULATIVE VOTING. No shareholder shall be permitted to cumulate
his votes.
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3.17 WAIVER OF NOTICE.
(A) When any notice is required to be given to any shareholder
of the corporation under the provisions of the Colorado Corporation Code or
under the provisions of the Articles of Incorporation or Bylaws of the
corporation, a waiver thereof in writing signed by the person entitled to such
notice, whether before, at, or after the time stated herein, shall be equivalent
to the giving of such notice.
(B) By attending a meeting, a shareholder:
(1) Waives objection to lack of notice or defective notice
of such meeting unless the shareholder, at the beginning of the meeting objects
to the holding of the meeting or the transacting of business at the meeting;
(2) Waives objection to consideration at such meeting of a
particular matter not within the purpose or purposes described in the meeting
notice unless the shareholder objects to considering the matter when it is
presented.
ARTICLE IV
DIRECTORS POWERS AND MEETINGS
4.1 BOARD OF DIRECTORS. The business and affairs of the corporation
shall be managed by a board of three directors who shall be natural persons of
at least 18 years of age but who need not be shareholders of the corporation or
residents of the State of Colorado and who shall be elected at the annual
meeting of shareholders or some adjournment thereof. The Directors shall hold
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office until the next succeeding annual meeting of shareholders and until
his/her successor shall have been elected and shall qualify. The Board of
Directors may increase or decrease, to not less than three, the number of
directors by resolution; except that there need only be as many directors as
there are shareholders in the event that the outstanding shares are held of
record by fewer than three shareholders.
4.2 GENERAL POWERS. The business and affairs of the corporation shall
be managed by the Board of Directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these Bylaws directed or required to be
exercised or done by the shareholders. The directors shall pass upon any and all
bills or claims of officers for salaries or other compensation and, if deemed
advisable, shall contract with officers, employees, directors, attorneys,
accountants, and other persons to render services to the corporation.
4.3 Performance of Duties. A director of the corporation shall perform
his duties as a director, including his duties as a member of any committee of
the board upon which he may serve, in good faith, in a manner he reasonably
believes to be in the best interests of the corporation, and with such care as
an ordinarily prudent person in a like position would use under similar
circumstances. In performing his duties, a director shall be entitled to rely on
information, opinions, reports, or statements, including financial statements
and other financial data, in each case prepared or presented by persons and
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groups listed in paragraphs (A), (B), and (C) of this Section 4.3; but he shall
not be considered to be acting in good faith if he has knowledge concerning the
matter in question that would cause such reliance to be unwarranted. A person
who so performs his duties shall not have any liability by reason of being or
having been a director of the corporation. Those persons and groups on whose
information, opinions, reports, and statements a director is entitled to rely
upon are:
(A) One or more officers or employees of the corporation whom
the director reasonably believes to be reliable and competent in the matters
presented;
(B) Counsel, public accountants, or other persons as to
matters which the director reasonably believes to be within such persons'
professional or expert competence; or
(C) A committee of the board upon which he does not serve,
duly designated in accordance with the provisions of the Articles of
Incorporation or the Bylaws, as to matters within its designated authority,
which committee the director reasonably believes to merit confidence.
4.4 REGULAR MEETINGS. A regular, annual meeting of the Board of
Directors shall be held at the same place as, and immediately after, the annual
meeting of shareholders, and no notice shall be required in connection
therewith. The annual meeting of the Board of Directors shall be for the purpose
of electing officers and the transaction of such other business as may come
before the meeting. The Board of Directors may provide, by resolution, the time
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and place, either within or without the State of Colorado, for the holding of
additional regular meetings without other notice than such resolution.
4.5 SPECIAL MEETINGS. Special meetings of the Board of Directors may be
called by or at the request of the President or any two directors. The person or
persons authorized to call special meetings of the Board of Directors may fix
any place, either within or without the State of Colorado, as the place for
holding any special meeting of the Board of Directors called by them.
4.6 NOTICE. Written notice of any special meeting of directors shall be
given as follows:
(A) By mail to each director at his business address at least
three days prior to the meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, so addressed, with postage
thereon prepaid; or
(B) By personal delivery or telegram at least twenty-four
hours prior to the meeting to the business address of each director, or in the
event such notice is given on a Saturday, Sunday or holiday, to the residence
address of each director. If notice be given by telegram, such notice shall be
deemed to be delivered when the telegram is delivered to the telegraph company.
When any notice is required to be given to any director pursuant to
these Bylaws, the Articles of Incorporation or law, a waiver thereof in writing
signed by the persons entitled to such notice, whether before, at or after the
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time stated therein, shall be equivalent to the giving of such notice. By
attending or participating in a regular or special meeting, a director waives
any required notice of such meeting unless the director, at the beginning of the
meeting, objects to the holding of the meeting or the transacting of business
there at.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
4.7 PARTICIPATION BY ELECTRONIC MEANS. Except as may be otherwise
provided by the Articles of Incorporation or Bylaws, members of the Board of
Directors or any committee designated by such Board may participate in a meeting
of the Board or committee by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can
hear each other at the same time. Such participation shall constitute presence
in person at the meeting.
4.8 QUORUM AND MANNER OF ACTING. A quorum at all meetings of the Board
of Directors shall consist of a majority of the number of directors then holding
office, but a smaller number may adjourn from time to time without further
notice, until a quorum is secured. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, unless the act of a greater number is required by the laws of the
State of Colorado or by the Articles of Incorporation or these Bylaws.
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4.9 ORGANIZATION. The Board of Directors shall elect a chairman from
among the directors to preside at each meeting of the Board of Directors and at
all meetings of the stockholders. The Board of Directors shall elect a Secretary
to record the discussions and resolutions of each meeting.
4.10 PRESUMPTION OF ASSENT. A director of the corporation who is
present at a meeting of the Board of Directors or a committee of the Board of
Directors when corporate action is taken is deemed to have assented to the
action taken unless:
(A) He objects at the beginning of such meeting to the holding of
the meeting or the transacting of business at the meeting;
(B) He contemporaneously requests that his dissent from the
action taken be entered in the minutes of such meeting; or
(C) He gives written notice of his dissent to the presiding
officer of such meeting before its adjournment or to the Secretary of the
corporation immediately after adjournment of such meeting.
The right of dissent as to a specific action taken in a meeting of the
Board of Directors or a committee of the Board of Directors is not available to
a director who votes in favor of such action.
4.11 INFORMAL ACTION BY DIRECTORS. Any action required or permitted to
be taken at a meeting of the Board of Directors or any committee designated by
said Board of Directors may be taken without a meeting if the action is
evidenced by one or more written consents describing the action taken, signed by
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each director or committee member, and delivered to the secretary for inclusion
in the minutes or for filing with the corporate records. Action taken under this
section is effective when all directors or committee members have signed the
consent, unless the consent specifies a different effective date. Such consent
has the same force and effect as an unanimous vote of the directors or committee
members and may be stated as such in any document.
4.12 VACANCIES. Any vacancy occurring in the Board of Directors may be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board of Directors. A director elected to fill a
vacancy shall be elected for the unexpired term of his predecessor in office,
and shall hold such office until his successor is duly elected and shall
qualify. Any directorship to be filled by reason of an increase in the number of
directors shall be filled by the affirmative vote of a majority of the directors
then in office or by an election at an annual meeting, or at a special meeting
of shareholders called for that purpose. A director chosen to fill a position
resulting from an increase in the number of directors shall hold office only
until the next election of directors by the shareholders.
4.13 COMPENSATION. By resolution of the Board of Directors and
irrespective of any personal interest of any of the members, each director may
be paid his expenses, if any, of attendance at each meeting of the Board of
Directors, and may be paid a stated salary as director or a fixed sum for
attendance at each meeting of the Board of Directors or both. No such payment
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shall preclude any director from serving the corporation in any other capacity
and receiving compensation therefor.
4.14 REMOVAL OF DIRECTORS. Any director or directors of the corporation
may be removed at any time, with or without cause, in the manner provided in the
Colorado Corporation Code.
4.15 RESIGNATIONS. A director of the corporation may resign at any time
by giving written notice to the Board of Directors, President or Secretary of
the corporation. The resignation shall take effect upon the date of receipt of
such notice, or at such later time specified therein. The acceptance of such
resignation shall not be necessary to make it effective, unless the resignation
requires such acceptance to be effective.
ARTICLE V
OFFICERS
5.1 NUMBER. The officers of the corporation shall be a President, a
Secretary, and a Treasurer, each of whom shall be natural persons of the age of
eighteen years or older and who shall be elected by the Board of Directors. Such
other officers and assistant officers as may be deemed necessary may be elected
or appointed by the Board of Directors. Any two or more offices may be held by
the same person, except the offices of President and Secretary.
5.2 ELECTION AND TERM OF OFFICE. The officers of the corporation to be
elected by the Board of Directors shall be elected annually by the Board of
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Directors at the first meeting of the Board of Directors held after the annual
meeting of the shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as practicable.
Each officer shall hold office until his successor shall have been duly elected
and shall have qualified or until his death or until he shall resign or shall
have been removed in the manner hereinafter provided.
5.3 REMOVAL. Any officer or agent may be removed by the Board of
Directors with or without cause whenever in its judgment the best interests of
the corporation will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election or
appointment of an officer or agent shall not of itself create contract rights
5.4 VACANCIES. A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be filled by the Board of Directors
for the unexpired portion of the term. In the event of absence or inability of
any officer to act, the Board of Directors may delegate the powers or duties of
such officer to any other officer, director or person whom it may select.
5.5 POWERS. The officers of the corporation shall exercise and perform
the respective powers, duties and functions as are stated below, and as may be
assigned to them by the Board of Directors.
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(A) PRESIDENT. The President shall be the chief executive officer
of the corporation and, subject to the control of the Board of Directors, shall
have general supervision, direction and control over all of the business and
affairs of the corporation. The President shall, when present, and in the
absence of a Chairman of the Board, preside at all meetings of the shareholders
and of the Board of Directors. The President may sign, with the secretary or any
other proper officer of the corporation authorized by the Board of Directors,
certificates for shares of the corporation and deeds, mortgages, bonds,
contracts, or other instruments which the Board of Directors has authorized to
be executed, except in cases where the signing and execution thereof shall be
expressly delegated by the Board of Directors or by these Bylaws to some other
officer or agent of the corporation, or shall be required by law to be otherwise
signed or executed; and in general shall perform all duties incident to the
office of President and such other duties as may be prescribed by the Board of
Directors from time to time.
(B) SECRETARY. The Secretary shall: keep the minutes of the
proceedings of the shareholders and of the Board of Directors in one or more
books provided for that purpose; see that all notices are duly given in
accordance with the provisions of these Bylaws or as required by law; be
custodian of the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly authorized; keep a
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register of the post office address of each shareholder which shall be furnished
to the Secretary by such shareholder; sign with the Chairman or Vice Chairman of
the Board of Directors, or the President, or a Vice President, certificates for
shares of the corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; have general charge of the stock transfer
books of the corporation; and in general perform all duties incident to the
office of Secretary and such other duties as from time to time may be assigned
to him by the President or by the Board of Directors.
(C) Treasurer. The Treasurer shall: have charge and custody of and
be responsible for all funds and securities of the corporation; receive and give
receipts for monies due and payable to the corporation from any source
whatsoever, and deposit all such monies in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of these Bylaws; and keep accurate books of accounts of the
corporation's transactions, which shall be the property of the corporation, and
shall render financial reports and statements of condition of the corporation
when so requested by the Board of Directors or President. The Treasurer shall
perform all duties commonly incident to his office and such other duties as may
from time to time be assigned to him by the President or the Board of Directors.
In the absence or disability of the President and Vice-President or
Vice-Presidents, the Treasurer shall perform the duties of the President.
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5.6 COMPENSATION. All officers of the corporation may receive salaries
or other compensation if so ordered and fixed by the Board of Directors. The
Board shall have authority to fix salaries in advance for stated periods or
render the same retroactive as the Board may deem advisable. No officer shall be
prevented from receiving such salary by reason of the fact that he is also a
director of the corporation.
5.7 BONDS. If the Board of Directors by resolution shall so require,
any officer or agent of the corporation shall give bond to the corporation in
such amount and with such surety as the Board of Directors may deem sufficient,
conditioned upon the faithful performance of their respective duties and
offices.
ARTICLE VI
DIVIDENDS
The Board of Directors from time to time may declare and the
corporation may pay dividends on its outstanding shares upon the terms and
conditions and in the manner provided by law and the Articles of Incorporation.
ARTICLE VII
FINANCE
7.1 RESERVE FUNDS. The Board of Directors, in its uncontrolled
discretion, may set aside from time to time, out of the net profits or earned
surplus of the corporation, such sum or sums as it deems expedient as a reserve
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<PAGE>
fund to meet contingencies, for equalizing dividends, for maintaining any
property of the corporation, and for any other purpose.
7.2 BANKING. The moneys of the corporation shall be deposited in the
name of the corporation in such bank or banks or trust company or trust
companies, as the Board of Directors shall designate, and may be drawn out only
on checks signed in the name of the corporation by such person or persons as the
Board of Directors, by appropriate resolution, may direct. Notes and commercial
paper, when authorized by the Board, shall be signed in the name of the
corporation by such officer or officers or agent or agents as shall be
authorized from time to time.
ARTICLE VIII
CONTRACTS, LOANS AND CHECKS
8.1 EXECUTION OF CONTRACTS. Except as otherwise provided by statute or
by these Bylaws, the Board of Directors may authorize any officer or agent of
the corporation to enter into any contract, or execute and deliver any
instrument in the name of, and on behalf of the corporation. Such authority may
be general or confined to specific instances. Unless so authorized, no officer,
agent or employee shall have any power to bind the corporation for any purpose,
except as may be necessary to enable the corporation to carry on its normal and
ordinary course of business.
8.2 LOANS. No loans shall be contracted on behalf of the corporation
and no negotiable paper or otherwise evidence of indebtedness shall be issued in
its name unless authorized by the Board of Directors. When so authorized, any
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<PAGE>
officer or agent of the corporation may effect loans and advances at any time
for the corporation from any bank, trust company or institution, firm,
corporation or individual. An agent so authorized may make and deliver
promissory notes or other evidence of indebtedness of the corporation and may
mortgage, pledge, hypothecate or transfer any real or personal property held by
the corporation as security for the payment of such loans. Such authority, in
the Board of Directors discretion, may be general or confined to specific
instances.
8.3 CHECKS. Checks, notes, drafts and demands for money or other
evidence of indebtedness issued in the name of the corporation shall be signed
by such person or persons as designated by the Board of Directors and in the
manner the Board of Directors prescribes.
8.4 DEPOSITS. All funds of the corporation not otherwise employed shall
be deposited from time to time to the credit of the corporation in such banks,
trust companies or other depositories as the Board of Directors may select.
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<PAGE>
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall be the year adopted by
resolution of the Board of Directors.
ARTICLE X
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words "CORPORATE SEAL".
ARTICLE XI
AMENDMENTS
Any Article or provision of these Bylaws may be altered, amended or
repealed, and new Bylaws may be adopted by a majority of the directors present
at any meeting of the Board of Directors of the corporation at which a quorum is
present. Notwithstanding the foregoing, however, these Bylaws may be altered,
amended or repealed and new Bylaws adopted by a vote of a majority in interest
of the outstanding shares of the corporation entitled to vote at a meeting duly
called for that purpose.
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<PAGE>
ARTICLE XII
EXECUTIVE COMMITTEE
12.1 APPOINTMENT. The Board of Directors by resolution adopted by a
majority of the full Board, may designate two or more of its members to
constitute an Executive Committee. The designation of such committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed by law.
12.2 AUTHORITY. The Executive Committee, when the Board of Directors is
not in session shall have and may exercise all of the authority of the Board of
Directors except to the extent, if any, that such authority shall be limited by
the resolution appointing the Executive Committee and except also that the
Executive Committee shall not have the authority of the Board of Directors in
reference to declaring dividends and distributions, recommending to the
shareholders that the Articles of Incorporation be amended, recommending to the
shareholders the adoption of a plan of merger or consolidation, filling
vacancies on the Board of Directors or any committee thereof, recommending to
the shareholders the sale, lease or other disposition of all or substantially
all of the property and assets of the corporation otherwise than in the usual
and regular course of its business, recommending to the shareholders a voluntary
dissolution of the corporation or a revocation thereof, authorize or approve the
issuance or reacquisition of shares, or amending the Bylaws of the corporation.
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<PAGE>
12.3 TENURE AND QUALIFICATIONS. Each member of the Executive Committee
shall hold office until the next regular annual meeting of the Board of
Directors following the designation of such member and until his successor is
designated as a member of the Executive Committee and is elected and qualified.
12.4 MEETINGS. Regular meetings of the Executive Committee may be held
without notice at such time and places as the Executive Committee may fix from
time to time by resolution. Special meetings of the Executive Committee may be
called by any member thereof upon not less than one day's notice stating the
place, date and hour of the meeting, which notice may be written or oral, and if
mailed, shall be deemed to be delivered when deposited in the United States mail
addressed to the member of the Executive Committee at his business address. Any
member of the Executive Committee may waive notice of any meeting and no notice
of any meeting need be given to any member thereof who attends in person. The
notice of a meeting of the Executive Committee need not state the business
proposed to be transacted at the meeting.
12.5 QUORUM. A majority of the members of the Executive Committee shall
constitute a quorum for the transaction of business at any meeting thereof, and
action of the Executive Committee must be authorized by the affirmative vote of
a majority of the members present at a meeting at which a quorum is present.
12.6 INFORMAL ACTION BY EXECUTIVE COMMITTEE. Any action required or
permitted to be taken by the Executive committee at a meeting may be taken
without a meeting if a consent in writing, setting forth the action so taken,
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<PAGE>
shall be signed by all of the members of the Committee entitled to vote with
respect to the subject matter thereof.
12.7 VACANCIES. Any vacancy in the Executive Committee may be filled by
a resolution adopted by a majority of the full Board of Directors.
12.8 RESIGNATIONS AND REMOVAL. Any member of the Executive Committee
may be removed at any time with or without cause by resolution adopted by a
majority of the full Board of Directors. Any member of the Executive Committee
may resign from the Executive Committee at any time by giving written notice to
the President or Secretary of the corporation, and unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
12.9 PROCEDURE. The Executive Committee shall elect a presiding officer
from its members and may fix its own rules of procedure which shall not be
inconsistent with these Bylaws. It shall keep regular minutes of its proceedings
and report the same to the Board of Directors for its information at the meeting
thereof held next after the proceedings shall have been taken.
ARTICLE XIII
EMERGENCY BYLAWS
The Emergency Bylaws provided in this Article XIII shall be operative
during any emergency in the conduct of the business of the corporation resulting
from an attack on the United States or any nuclear or atomic disaster,
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<PAGE>
notwithstanding any different provision in the preceding articles of the Bylaws
or in the Articles of Incorporation of the corporation or in the Colorado
Corporation Code. To the extent not inconsistent with the provisions of this
Article, the Bylaws provided in the preceding articles shall remain in effect
during such emergency and upon its termination the Emergency Bylaws shall cease
to be operative
During any such emergency:
(A) A meeting of the Board of Directors may be called by any officer
or director of the corporation. Notice of the time and place of the meeting
shall be given by the person calling the meeting to such of the directors as it
may be feasible to reach by any available means of communication. Such notice
shall be given at such time in advance of the meeting as circumstances permit in
the judgment of the person calling the meeting.
(B) At any such meeting of the Board of Directors, a quorum shall
consist of the number of directors in attendance at such meeting.
(C) The Board of Directors, either before or during any such
emergency, may, effective in the emergency, change the principal office or
designate several alternative principal offices or regional offices, or
authorize the officers so to do.
(D) The Board of Directors, either before or during any such
emergency, may provide, and from time to time modify, lines of succession in the
event that during such an emergency any or all officers or agents of the
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corporation shall for any reason be rendered incapable of discharging their
duties.
(E) No officer, director or employee acting in accordance with these
Emergency Bylaws shall be liable except for willful misconduct. No officer,
director, or employee shall be liable for any action taken by him in good faith
in such an emergency in furtherance of the ordinary business affairs of the
corporation even though not authorized by the Bylaws then in effect.
(F) These Emergency Bylaws shall be subject to repeal or change by
further action of the Board of Directors or by action of the shareholders, but
no such repeal or change shall modify the provisions of the next preceding
paragraph with regard to action taken prior to the time of such repeal or
change. Any amendment of these Emergency Bylaws may make any further or
different provision that may be practical and necessary for the circumstances of
the emergency.
CERTIFICATE
I hereby certify that the foregoing Bylaws, consisting of 30 pages,
including this page, constitute the Bylaws of Auburn Enterprises, Inc., adopted
by the Board of Directors of the corporation as of February 11, 1992.
/s/ Craig McCully
____________________________________
Craig McCully, Secretary
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March 12, 1996
Aurora Acquisitions, Inc.
6909 South Holly Circle, Suite 100
Englewood, Colorado 80112
Re: Agreement Not to Sell Securities
Ladies and Gentlemen:
Reference is hereby made to the registration of the common stock, $0.01
par value (the "Common Stock"), of Aurora Acquisitions, Inc. (the "Company")
pursuant to a registration statement on Form 10-SB (the "Registration
Statement") under the Securities Exchange Act of 1934, as amended, anticipated
to be filed with the Securities and Exchange Commission.
In order to induce you to file the Registration Statement and to effect
the registration of the securities that are the subject thereof, the
undersigned, a shareholder, officer, or director of the Company, or a person
related to an officer or director of the Company, hereby agrees as follows (the
"Agreement"):
1. The undersigned will not sell, pledge, hypothecate, transfer, grant
any option to purchase, or otherwise dispose of any shares of the Common Stock
of the Company owned, directly or indirectly, of record or beneficially by the
undersigned (as determined in accordance with the Securities Exchange Act of
1934 and rules promulgated thereunder) or any securities convertible into or
exchangeable for shares of Common Stock of the Company or securities issuable
upon the exercise of options or warrants owned, directly or indirectly, of
record or beneficially by the undersigned as of the date hereof or acquired on
or before the effective date of the Registration Statement (collectively, the
"Securities"), 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, as determined by Schlueter & Associates, P.C., counsel to the Company,
in its sole and absolute discretion; and
<PAGE>
Aurora Acquisitions, Inc.
March 12, 1996
Page 2
2. The undersigned further hereby tenders for deposit with the
Company's legal counsel, Schlueter & Associates, P.C., Denver, Colorado, all
certificates evidencing the undersigned's ownership of any Securities
beneficially owned by the undersigned. The undersigned understands,
acknowledges, and gives its consent that Schlueter & Associates, P.C. will not
release these respective certificates until such time as legal counsel has
confirmed, in its sole and absolute discretion, that a merger or acquisition has
been successfully consummated; and
3. The undersigned will permit all certificates evidencing the
Securities to have noted conspicuously thereon a legend that such Securities are
subject to the restriction on transfer imposed by the terms of this Agreement,
and the undersigned will cause the transfer agent for the Company to note such
restriction on the transfer books and records of the Company.
Sincerely yours,
________________________________ ________________________________________
Signature of owner Signature of joint owner
________________________________ ________________________________________
Name (Typed or Printed) Name (Typed or Printed)
________________________________________
Name of Entity
________________________________________
Signature and Title of
Authorized Signatory
________________________________________
Name (Typed or Printed)
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