AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made
this 10th day of April, 2002, by and between K-1 Builders, Inc., a
publicly-held, fully reporting corporation incorporated in Nevada ("K-1"); Xxxx
Xxxxx Xxxxx ("Xxxxx"), solely for purposes of K-1's representations and
warranties; NexGen Vision, Inc., a Delaware corporation ("NexGen"); and the
persons listed in Exhibit A hereof who are the owners of record of all the
issued and outstanding stock of NexGen who execute and deliver the Agreement
("NexGen Stockholders"), based on the following:
Recitals
K-1 wishes to acquire 100% of the issued and outstanding stock of
NexGen in exchange for stock of K-1, in a transaction intended to qualify as a
tax-free exchange pursuant to section 368(a)(1)(B) of the Internal Revenue Code
of 1986, as amended. The parties intend for this Agreement to represent the
terms and conditions of such tax-free reorganization, which Agreement the
parties hereby adopt. However, neither party is seeking tax counsel or legal or
accounting opinions on whether the transaction qualifies for tax-free treatment.
AGREEMENT
Based on the above recitals, which are incorporated herein by
reference, and for and in consideration of the mutual covenants and agreements
hereinafter set forth, the mutual benefits to the parties to be derived
herefrom, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, it is hereby agreed as follows:
ARTICLE I
EXCHANGE OF STOCK
1.01 Exchange of Shares. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as defined in Section 1.09
hereof), the NexGen Stockholders shall assign, transfer, and deliver to K-1,
free and clear of all liens, pledges, encumbrances, charges, restrictions, or
claims of any kind, nature, or description, all issued and outstanding shares of
common stock of NexGen (the "NexGen Shares") held by NexGen Stockholders which
shares shall represent all issued and outstanding shares of NexGen common stock,
and K-1 agrees to acquire such shares on such date by issuing and delivering in
exchange therefor an aggregate of 7,700,000 "restricted" shares, as defined in
Rule 144 under the Securities Act of 1933 (the "Securities Act"), of K-1 Class B
common stock, par value $0.001 per share (the "K-1 Common Stock"). Such shares
of K-1 Common Stock shall be issued pro rata based on the number of NexGen
Shares held and as set forth opposite the NexGen Stockholder's respective names
in Exhibit A. All shares of K-1 Common Stock to be issued and delivered pursuant
to this Agreement shall be appropriately adjusted to take into account any stock
split, stock dividend, reverse stock split, recapitalization, or similar change
in the K-1 Common Stock which may occur between the date of the execution of
this Agreement and the Closing Date.
1.02 Escrow Deposit. Prior to Closing (defined below), NexGen shall
deliver $180,000 to the escrow account of K-1's attorney ("Escrow Deposit"). The
Escrow Deposit shall be fully refunded to NexGen in the event the transaction
contemplated hereunder does not close on the Closing Date, except as set forth
in Section 6.10 below. In addition, the shares to be issued to the NexGen
Stockholders following the change of domicile and recapitalization of K-1
described in Section 1.03 below, but prior to the Closing Date, shall also be
held in escrow pursuant to Section 6.09.
1.03 Change of Domicile and Recapitalization of K-1. Prior to the
Closing Date, but in no event later than two days prior thereto, K-1 shall
reincorporate in Delaware as a corporation governed by the Delaware General
Corporation Law with the corporate name of NexGen Vision, Inc., which
Certificate of Incorporation shall be in the form attached hereto as Exhibit B.
Simultaneously with its reincorporation, K-1 shall reclassify its outstanding
capital stock by creating two separate classes of common stock, Class A common
stock with one vote per share and Class B common stock with 10 votes per share.
K-1 shall authorize 50,000,000 shares of Class A common stock to be issued,
7,700,000 of Class B common stock to be issued and 10,000,000 shares of
preferred stock to be issued as contemplated by Exhibit B.
1.04 Change of Corporate Name of NexGen. Prior to K-1's reincorporation
in Delaware, NexGen shall change its corporate name to NexGen Merger, Inc.
1.05 Delivery of Certificates by NexGen Stockholders. The transfer of
NexGen Shares by the NexGen Stockholders shall be effected by the delivery to
K-1 at the Closing (as set forth in Section 1.09 hereof) of certificates
representing the transferred shares endorsed in blank or accompanied by stock
powers executed in blank, with all signatures medallion guaranteed and with all
necessary transfer taxes and other revenue stamps affixed and acquired at the
NexGen Stockholders' expense.
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1.06 Directors and Officers of Successor to K-1. Upon such transfer of
the NexGen Shares:
(i) the current board of directors and officers of K-1 shall
immediately resign, except that Xxxxx shall remain as a director of the
successor to K-1 ("NexGen Newco") until such time as NexGen Newco shall have
complied with Rule 14f-1 of the Securities Exchange Act of 1934 (the "Exchange
Act") in which event Xxxxx'x term as a director of NexGen Newco shall
immediately terminate without the requirement of notice;
(ii) Xxxx X. Xxxxxxxx shall immediately be nominated and
appointed to the board of directors of NexGen Newco;
(iii) Xx. Xxxxxxx Xxxxxxxxxx and Xx. Xxxxxxx Xxxxxxxxxx shall
immediately be nominated to the board of directors of NexGen Newco, with such
appointments to be effective immediately upon compliance by NexGen Newco with
Rule 14f-1 referenced in Section 1.06(i) above; and
(iv) Messrs. Xxxxxxxx and Xxxxx, as directors of NexGen Newco
shall immediately nominate and appoint the following individuals as officers of
NexGen Newco to serve until their successors are duly nominated and appointed:
Xxxx X. Xxxxxxxx: Chief Executive Officer
Xxxxxxx Xxxxxxxxxx: Chief Operating Officer and President
Xxx Xxxxxxxx: Secretary
and be replaced by directors and officers as nominated by
representatives of NexGen.
1.07 Dissolution and Operation of NexGen's Wholly-Owned Subsidiaries.
After giving effect to the transaction contemplated hereby (including the
satisfaction of all conditions), NexGen shall be immediately dissolved and K-1
shall own all the issued and outstanding shares of NexGen's wholly-owned
subsidiaries.
1.08 Further Assurances. At the Closing and from time to time
thereafter, the NexGen Stockholders and K-1 shall execute such additional
instruments and take such other action as each may reasonably request, without
undue cost to the other in order to more effectively sell, transfer, and assign
clear title and ownership in the NexGen Shares to K-1 and to effectuate the
transaction contemplated hereunder.
1.09 Closing and Parties. A closing (the "Closing") contemplated hereby
shall be held at a mutually agreed upon time and place within 15days following
the execution of this Agreement or on another date to be agreed to in writing by
the parties (the "Closing Date"). The Agreement may be closed at any time
following approval of the K-1 board of directors, and approval by the required
percentage of the outstanding K-1 Common Stock as set forth in Section 4.01
hereof and the approval of the transaction by the NexGen board of directors and
the tendering of all of the NexGen Shares by the NexGen Stockholders as set
forth in Section 5.01. The Closing may be accomplished by wire, express mail,
overnight courier, conference telephone call or as otherwise agreed to by the
respective parties or their duly authorized representatives.
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1.10 Closing Events.
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(a) K-1 Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article IV, K-1 shall deliver to NexGen at
Closing all the following:
(i) A certificate of good standing from the
Department of Commerce of the State of Nevada, issued as of a
date within ten days prior to the Closing Date, certifying
that K-1 is in good standing as a corporation in the State of
Nevada;
(ii) Incumbency and specimen signature certificates
dated the Closing Date with respect to the officers and
directors of K-1 executing this Agreement and any other
document delivered pursuant hereto on behalf of K-1;
(iii) Copies of the resolutions/consents of K-1's
board of directors and shareholder minutes or consents
authorizing the execution and performance of this Agreement,
all ancillary documents required hereunder and the
contemplated transactions hereunder, certified by the
secretary or an assistant secretary of K-1 as of the Closing
Date;
(iv) The certificates contemplated by Section 4.02,
duly executed by the president and chief executive officer of
K-1;
(v) The certificates contemplated by Section 4.03,
dated the Closing Date, signed by the president and chief
executive officer of K-1;
(vi) K-1 Common Stock Certificates for 7,700,000
shares of K-1 Class B common stock in the names of the NexGen
Stockholders and in the amounts set forth in Exhibit "A";
(vii) Executed and dated resignations of all officers
and directors of K-1 in form satisfactory to NexGen's counsel
pursuant to Section 1.06 above;
(viii) Executed and dated consent of the board of
directors of NexGen Newco pursuant to Section 1.06 above.
(ix) Certificate of Good Standing and Certificate of
Incorporation of NexGen Vision, Inc. under the Delaware
General Corporation Law with proof of authorized capital as
set forth in Section 1.03 above, as well as duly executed
organizational minutes or consents and by-laws in form and
substance satisfactory to NexGen's counsel;
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(x) Following K-1's reincorporation and
recapitalization in Delaware, delivery of an executed lock-up
agreement in the form attached hereto as Exhibit C from
certain K-1 Class A common stock stockholders (listed on
Schedule 1.07(a)(ix)), which shall provide (among other
things) that such shares shall be restricted from public sale
for the period and in the manner described therein;
(xi) Counsel to K-1 shall deliver to the Company a
legal opinion concerning corporate authority, good standing,
SEC filings, the absence of litigation and other customary
matters (which may be conditioned on the attorney's knowledge
where appropriate) in form and substance reasonably acceptable
to NexGen's counsel.
In addition to the above deliveries, K-1 shall take all steps and
actions as NexGen and the NexGen Stockholders may reasonably request or
as may otherwise be reasonably necessary to consummate the transactions
contemplated hereby.
(b) NexGen Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article V, NexGen and/or NexGen Stockholders
shall deliver to K-1 at Closing all the following:
(i) A certificate of good standing from the Secretary
of State of the State of Delaware, issued as of a date within
ten days prior to the Closing Date certifying that NexGen is
in good standing as a corporation in the State of Delaware;
(ii) Incumbency and specimen signature certificates
dated the Closing Date with respect to the officers or
directors of NexGen executing this Agreement and any other
document delivered pursuant hereto on behalf of NexGen;
(iii) Copies of resolutions/consents of the NexGen
board of directors authorizing the execution and performance
of this Agreement and the contemplated transactions, certified
by the secretary or an assistant secretary of NexGen as of the
Closing Date;
(iv) The certificate contemplated by Section 5.02,
executed by the president and chief operating officer of
NexGen; and
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(v) The certificate contemplated by Section 5.03,
dated the Closing Date, signed by the president and chief
operating officer of NexGen.
In addition to the above deliveries, NexGen shall take all steps and
actions as K-1 may reasonably request or as may otherwise be reasonably
necessary to consummate the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES OF K-1
As an inducement to, and to obtain the reliance of NexGen to consummate
the transactions contemplated hereby, K-1 and Xxxxx each represent and warrant
to NexGen that the statements contained in this Section are, to their best
knowledge, true, correct and complete as of the date of this Agreement and will
be true, correct and complete as of the Closing Date.
2.01 Organization.
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(a) K-1 shall at the time of execution of this Agreement, and
until it reincorporates as a Delaware corporation is, and shall be , a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada and has the corporate power and
is and shall be duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry
on its business in all material respects as it is now being conducted,
and there are no other jurisdictions in which it is not so qualified in
which the character and location of the assets owned by it or the
nature of the material business transacted by it requires
qualification, except where failure to do so could not be reasonably be
expected to have a material adverse effect on its business, assets,
financial condition, results of operations, management or future
prospects (any, a "Material Adverse Effect") of K-1. The execution and
delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement in accordance with the
terms hereof shall not, violate any provision of K-1's articles of
incorporation or bylaws, or other agreement to which it is a party or
by which it is bound.
(b) K-1 shall be on the Closing Date, a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Delaware and will have the corporate power and shall be duly
authorized, qualified, franchised, and licensed under all applicable
laws, regulations, ordinances, and orders of public authorities to own
all of its properties and assets and to carry on its business in all
material respects as will be conducted, and there are no other
jurisdictions in which it will not be so qualified in which the
character and location of the assets owned by it or the nature of the
material business transacted by it will require qualification, except
where failure to do so could not be reasonably expected to have a
Material Adverse Effect on K-1. The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof
shall not, violate any provision of (following reorganization and
reincorporation) K-1's certificate of incorporation or bylaws, or other
agreement to which it is a party or by which it is bound.
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2.02 Approval of Agreement. K-1 has full power, authority, and legal
right and has taken, or shall take, all action required by law, its articles of
incorporation or certificate of incorporation, bylaws, and otherwise to execute
and deliver this Agreement and to consummate the transactions herein
contemplated. The board of directors of K-1 has authorized and approved the
execution, delivery, and performance of this Agreement and the transactions
contemplated hereby; subject to the approval of the K-1 stockholders and
compliance with state and federal securities laws.
2.03 Capitalization. The authorized capitalization of K-1 on the
Closing Date shall consist of 50,000,000 shares of Class A common stock, $0.001
par value, with one vote per share; 7,700,000 shares of Class B common stock,
$0.001 par value, with 10 votes per share; and 10,000,000 shares of preferred
stock, $0.001 par value, of which 2,300,000 shares of Class A common stock shall
be issued and outstanding (of which (i)1,990,000 shall be free trading and (A)
not subject to any restrictions on public sale except as provided in that
certain letter agreement between certain K-1 stockholders and MG Securities,
Inc. dated April ____, 2002, a copy of which shall have delivered to NexGen
prior to the Closing Date and (B) are not "control shares" which would preclude
transferees from immediately exercising the Options and selling the shares under
Rule 144 of the Securities Act; and (ii) 110,000 shares shall be free trading
and subject to a Lockup Agreement pursuant to Exhibit C attached hereto), prior
to issuance and cancellation of shares as set forth in Section 1.01 of this
Agreement. All issued and outstanding shares of K-1 are legally issued, fully
paid, and nonassessable and not issued in violation of the preemptive or other
right of any person. There are no dividends or other amounts due or payable with
respect to any of the shares of capital stock of K-1, including, but not limited
to, any amounts due or payable to any stockholder of K-1 pursuant to the
exercise by any K-1 stockholder of `dissenter's rights'.
2.04 Financial Statements.
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(a) Included in Schedule 2.04 or otherwise available from
XXXXX through the SEC's website, xxx.xxx.xxx., are the audited balance
sheet of K-1 as of August 31, 2001, and the related statements of
operations, stockholders' equity (deficit), and cash flows for the
fiscal year ended August 31, 2001, including the notes thereto, and the
accompanying report of the company's independent certified public
accountant, the Form 10-QSB for the period ended November 30, 2001 and
the Form 10-QSB for the period ended February 28, 2002.
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(b) The financial statements of K-1 delivered pursuant to
Section 2.04(a) have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved as explained in the notes to such financial
statements. The K-1 financial statements present fairly, in all
material respects, as of their respective dates, the financial position
of K-1. K-1 did not have, as of the date of any such financial
statements, except as and to the extent reflected or reserved against
therein, any liabilities or obligations (absolute or contingent) which
should be reflected therein in accordance with generally accepted
accounting principles, and all assets reflected therein presently
fairly the assets of K-1 in accordance with generally accepted
accounting principles.
(c) K-1 has filed or shall file as the Closing Date its tax
returns required to be filed for its two most recent fiscal years. All
such returns and reports are accurate and correct in all material
respects. K-1 has no material liabilities with respect to the payment
of any federal, state, county, local, or other taxes (including any
deficiencies, interest, or penalties) accrued for or applicable as of
the Closing Date, , and to the best knowledge of K-1, no deficiency
assessment or proposed adjustment of any such tax return is pending,
proposed or contemplated. To the best knowledge of K-1, none of such
income tax returns has been examined or is currently being examined by
the Internal Revenue Service and no deficiency assessment or proposed
adjustment of any such return is pending, proposed or contemplated. K-1
has not made any election pursuant to the provisions of any applicable
tax laws (other than elections that relate solely to methods of
accounting, depreciation, or amortization) that could reasonably be
expected to have a Material Adverse Effect on K-1. There are no
outstanding agreements or waivers extending the statutory period of
limitation applicable to any tax return of K-1.
2.05 Outstanding Derivative Securities. At Closing, K-1 shall have the
following existing warrants, options or other derivative securities:
(a) common stock options issued and delivered to MG
Securities, Inc. granting the right to purchase up to 1,900,000 shares
of free trading Class A common stock of K-1;
(b) stock option plan providing for the issuance of 1,000,000
stock options, none of which shall have been issued; and
(c) K-1 shall have cancelled an option in favor of Xxxxx to
acquire 10,000,000 shares of K-1's common stock at par value.
2.06 Information. The information concerning K-1 set forth in this
Agreement is complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading. K-1 shall cause the schedules delivered by it
pursuant hereto and the instruments delivered to NexGen hereunder to be updated
after the date hereof up to and including the Closing Date.
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2.07 Absence of Certain Changes or Events. Except as set forth in this
Agreement or the schedules hereto, since the date of the most recent K-1 balance
sheet described in Section 2.04 and included in the information referred to in
Section 2.06:
(a) There has not been any event which could be reasonably
expected to have a Material Adverse Effect on K-1;
(b) K-1 has not (i) amended its articles of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any
payment of dividends or distributions of any assets of any kind
whatsoever to stockholders or purchased or redeemed, or agreed to
purchase or redeem, any of its capital stock; (iii) waived any rights
of value which in the aggregate are extraordinary or material
considering the business of K-1; (iv) made any material change in its
method of accounting; (v) entered into any oral or written agreement,
or modified the terms of any existing contract or agreement, or entered
into or modified any other material transactions other than those
contemplated by this Agreement; (vi) made any accrual or arrangement
for or payment of bonuses or special compensation of any kind or any
severance or termination pay to any present or former officer or
employee; (vii) increased the rate of compensation payable or to become
payable by it to any of its officers or directors or any of its
employees whose monthly compensation exceeds $1,000; or (viii) made any
increase in any profit-sharing, bonus, deferred compensation,
insurance, pension, retirement, or other employee benefit plan,
payment, or arrangement made to, for, or with its officers, directors,
or employees. In addition, K-1 (ix) has no Liability (defined in
Section 2.07(c) below) and there is no Basis (defined below) for any
present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against any of them giving rise to
any Liability. For purposes of this Agreement, the term "Basis" shall
mean any past or present fact, situation, circumstances, status,
condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the
basis for any specified consequence.
(c) Except as set forth herein, K-1 has not (i) granted or
agreed to grant any options, warrants, or other rights for its stocks,
bonds, or other corporate securities calling for the issuance thereof,
(ii) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability whether known or
unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due (any a "Liability" or
Liabilities") except Liabilities incurred in the ordinary course of
business; (iii) paid any material obligation or Liability other than
current Liabilities reflected in or shown on the most recent K-1
balance sheet and current liabilities incurred since that date in the
ordinary course of business; (iv) sold or transferred, or agreed to
sell or transfer, any of its material assets, properties, or rights
(except assets, properties, or rights not used or useful in its
business which, in the aggregate have a value of less than $5,000 or
canceled, or agreed to cancel, any debts or claims (except debts and
claims which in the aggregate are of a value of less than $5,000); (v)
made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or
termination is material, considering the business of K-1; or (vi)
issued, delivered, or agreed to issue or deliver any stock, bonds, or
other corporate securities including debentures (whether authorized and
unissued or held as treasury stock); and
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(d) To the best knowledge of K-1 and Xxxxx, K-1 has not become
subject to any law or regulation which could reasonably be expected to
have a Material Adverse Effect on K-1
2.08 Litigation and Proceedings. There are no actions, suits,
administrative or other proceedings, investigations, inquiries or similar
governmental proceedings pending or, to the knowledge of K-1 or Xxxxx,
threatened by or against K-1 or which are or could reasonably expected to have a
Material Adverse Effect on K-1, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. Neither K-1 nor Xxxxx has any knowledge of any default
by K-1 with respect to any judgment, order, writ, injunction, decree, award,
rule, or regulation of any court, arbitrator, or governmental agency or
instrumentality.
2.09 Compliance With Laws and Regulations. K-1 has complied with all
applicable statutes and regulations of any federal, state, or other governmental
entity or agency thereof, except to the extent that noncompliance could not
reasonably be expected to have a Material Adverse Effect on K-1. To the best
knowledge of K-1 and Xxxxx, the consummation of this transaction shall comply
with all applicable statutes and regulations, subject to the preparation and
filing of any forms required by state and federal securities laws.
2.10 Material Contract Defaults. K-1 is not in default in any material
respect under the terms of any outstanding contract, agreement, lease, or other
commitment which could be reasonably be expected to have a Material Adverse
Effect on K-1, and there is no event of default or other event which, with
notice or lapse of time or both, would constitute a default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which K-1 has not taken adequate steps to prevent such a default from
occurring.
2.11 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement shall not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust, or other material contract, agreement, or instrument to which K-1 is a
party or to which any of its properties or operations are subject.
2.12 Subsidiary. K-1 does not own, beneficially or of record, any
equity securities in any other entity. K-1 does not have a predecessor as that
term is defined under generally accepted accounting principles or Regulation S-X
promulgated by the Securities and Exchange Commission.
2.13 K-1 Schedules. K-1 has delivered to NexGen the following
schedules, which are collectively referred to as the "K-1 Schedules" and which
consist of the following separate schedules dated as of the date of execution of
this Agreement, all certified by a duly authorized officer of K-1 as complete,
true, and accurate:
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(a) A schedule including copies of the articles of
incorporation and certificate of incorporation and bylaws of K-1 in
effect as of the date of this Agreement;
(b) A schedule containing copies of the consent of the
stockholders of K-1, and resolutions adopted by the board of directors
of K-1, approving this Agreement and the transactions herein
contemplated;
(c) A schedule setting forth a description of any event which
could reasonably be expected to have a Material Adverse Effect on K-1
since the most recent K-1 balance sheet, required to be provided
pursuant to Section 2.04 hereof,
(d) A schedule setting forth the financial statements required
pursuant to Section 2.04(a) hereof,
(e) A schedule containing copies of K-1's federal and state
tax returns for the past two years.
(f) A schedule setting forth any other information, together
with any required copies of documents, required to be disclosed in the
K-1 Schedules by Sections 2.01 through 2.12.
K-1 shall cause the K-1 Schedules and the instruments delivered to
NexGen hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing Date. Such
updated K-1 Schedules, certified in the same manner as the original K-1
Schedules, shall be delivered prior to and as a condition precedent to the
obligation of NexGen to close.
2.14 K-1 Assets and Liabilities. Immediately prior to the Closing Date,
K-1 shall have no material assets and no liabilities in excess of $500, and all
expenses related to this Agreement or otherwise shall have been paid.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF NEXGEN
As an inducement to, and to obtain the reliance of K-1 to consummate
the transactions contemplated hereby, NexGen represents and warrants to K-1 that
the statements contained in this Section are, to its best knowledge, true,
correct and complete as of the date of this Agreement and will be true, correct
and complete as of the Closing Date.
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3.01 Organization. NexGen is, and shall be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has the corporate power and is and shall be
duly authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there are no other jurisdictions in which it is
not so qualified in which the character and location of the assets owned by it
or the nature of the material business transacted by it requires qualification,
except where failure to do so could not reasonably be expected to have a
Material Adverse Effect on NexGen. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof shall not, violate any provision
of NexGen's articles of incorporation or bylaws, or other material agreement to
which it is a party or by which it is bound.
3.02 Approval of Agreement. NexGen has full power, authority, and legal
right and has taken, or shall take, all action required by law, its certificate
of incorporation, bylaws, or otherwise to execute and deliver this Agreement and
to consummate the transactions herein contemplated. The board of directors of
NexGen have authorized and approved the execution, delivery, and performance of
this Agreement and the transactions contemplated hereby, subject to compliance
with state and federal securities laws.
3.03 Capitalization. NexGen has authorized the issuance of 50,000,000
shares of common stock, par value of $0.001 per share of which 7,700,000 are
issued and outstanding to the NexGen Stockholders set forth on Exhibit A. All
issued and outstanding shares of NexGen are legally issued, fully paid, and
nonassessable and not issued in violation of the preemptive or other right of
any person. All stockholders are either sophisticated or accredited investors
and have supplied written representation to NexGen of such status. There are no
dividends or other amounts due or payable with respect to any of the shares of
capital stock of NexGen.
3.04 Outstanding Warrants and Options. NexGen has no issued options,
calls, or commitments of any nature relating to the authorized and unissued
NexGen shares.
3.05 Information The information concerning NexGen set forth in this
Agreement and in the schedules delivered by NexGen pursuant hereto is to the
best of its knowledge complete and accurate in all material respects and does
not contain any untrue statement of a material fact or omit to state a material
fact required to make the statements made, in light of the circumstances under
which they were made, not misleading. NexGen shall cause the information
delivered by NexGen pursuant hereto to K-1 hereunder to be updated after the
date hereof up to and including the Closing Date.
3.06 Absence of Certain Changes or Events. Except as set forth in this
Agreement since December 31, 2001:
(a) There has not been (i) any event which could be reasonably
expected to have a Material Adverse Effect on NexGen.
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(b) NexGen has not (i) amended its certificate of
incorporation or bylaws; (ii) declared or made, or agreed to declare or
make, any payment of dividends or distributions of any assets of any
kind whatsoever to stockholders or purchased or redeemed, or agreed to
purchase or redeem, any of its capital stock; (iii) waived any rights
of value which in the aggregate are extraordinary and material
considering the business of NexGen; (iv) made any material change in
its method of accounting; (v) entered into any oral or written
agreement, or modified the terms of any existing contract or agreement,
or entered into or modified any other material transactions other than
those contemplated by this Agreement; (vi) made any material accrual or
material arrangement for or payment of bonuses or special compensation
of any kind or any severance or termination pay to any present or
former officer or employee; or (vii) made any material increase in any
profit-sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement
made to, for, or with their officers, directors, or employees whose
monthly compensation exceeds $1,000, or (viii) made any increase in any
profit-sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement
made to, for, or with its officers, directors, or employees;
(c) Except as set forth herein, NexGen has not (i) granted or
agreed to grant any options, warrants, or other rights for its stocks,
bonds, or other corporate securities calling for the issuance thereof,
(ii) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or L except Liabilities incurred in
the ordinary course of business; (iii) paid any material obligation or
Liability other than current Liabilities reflected in or shown on the
most recent NexGen balance sheet and current Liabilities incurred since
that date in the ordinary course of business; (iv) sold or transferred,
or agreed to sell or transfer, any of its material assets, properties,
or rights, or agreed to cancel, any material debts or claims; (v) made
or permitted any amendment or termination of any contract, agreement,
or license to which it is a party if such amendment or termination is
material, considering the business of NexGen; or (vi) issued,
delivered, or agreed to issue or deliver any stock, bonds, or other
corporate securities including debentures (whether authorized and
unissued or held as treasury stock); and
(d) To the best knowledge of NexGen, it has not become subject
to any law or regulation which could reasonably be expected to have a
Material Adverse Effect on NexGen.
3.07 Title and Related Matters. Except as provided herein or disclosed
in the most recent NexGen balance sheet and the notes thereto, NexGen has good
and marketable title to all of its properties, inventory, interests in
properties, technology, whether patented or unpatented, including, but not
limited to the NexGen technology, intellectual property, computer software, and
assets, which are reflected in the most recent NexGen balance sheet or acquired
after that date (except properties, interests in properties, and assets sold or
otherwise disposed of since such date in the ordinary course of business), free
and clear of all mortgages, liens, pledges, charges, or encumbrances, except
statutory liens or claims not yet delinquent;
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3.08 Litigation and Proceedings. There are no actions, suits,
administrative or other proceedings, investigations, inquiries or similar
governmental proceedings pending or, to the knowledge of NexGen, threatened by
or against NexGen or which are or could reasonably be expected to have a
Material Adverse Effect on NexGen, at law or in equity, before any court or
other governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. NexGen does not have any knowledge of any default on its
part with respect to any judgment, order, writ, injunction, decree, award, rule,
or regulation of any court, arbitrator, or governmental agency or
instrumentality.
3.9 Material Contract Defaults. NexGen is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which could reasonably be expected to have a Material
Adverse Effect on NexGen, and there is no event of default or other event which,
with notice or lapse of time or both, would constitute a default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which NexGen has not taken adequate steps to prevent such a default
from occurring.
3.10 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement shall not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust. or other material contract, agreement, or instrument to which NexGen is a
party or to which any of its properties or operations are subject.
3.11 Governmental Authorizations. NexGen has all licenses, franchises,
permits, and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date of this Agreement. Except for compliance with federal and state securities
and corporation laws, as hereinafter provided, no authorization, approval,
consent, or order of, or registration, declaration, or filing with, any court or
other governmental body is required in connection with the execution and
delivery by NexGen of this Agreement and the consummation by NexGen of the
transactions contemplated hereby.
3.12 Compliance With Laws and Relations. NexGen has complied with all
applicable statutes and regulations of any federal, state, or other governmental
entity or agency thereof, except to the extent that noncompliance could not
reasonably be expected to have a Material Adverse Effect on NexGen. To the best
knowledge of NexGen, the consummation of this transaction shall comply with all
applicable statutes and regulations, subject to the preparation and filing of
any forms required by state and federal security laws.
3.13 Subsidiary. Except as set forth on Schedule 3.13, NexGen does not
own, beneficially or of record, any equity securities in any other entity.
NexGen does not have a predecessor as that term is defined under generally
accepted accounting principles or Regulation S-X promulgated by the Securities
and Exchange Commission.
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3.14 NexGen Schedules. NexGen has delivered to K-1 the following
schedules, which are collectively referred to as the "NexGen Schedules" and
which consist of the following separate schedules dated as of the date of
execution of this Agreement, and instruments and K-1 as of such date, all
certified by the chief executive officer of NexGen as complete, true, and
accurate:
(a) A schedule including copies of the certificate of
incorporation and bylaws of NexGen and all amendments thereto in effect
as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the
board of directors of NexGen approving this Agreement and the
transactions herein contemplated as referred to in Section 3.02;
(c) A schedule setting forth any other information, together
with any required copies of documents, required to be disclosed in the
NexGen Schedules by Sections 3.01 through 3.13.
NexGen shall cause the NexGen Schedules and the instruments delivered to K-1
hereunder to be updated after the date hereof up to and including a specified
date not more than three business days prior to the Closing Date. Such updated
NexGen Schedules, certified in the same manner as the original NexGen Schedules,
shall be delivered prior to and as a condition precedent to the obligation of
K-1 to close.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF NEXGEN
The obligations of NexGen under this Agreement are subject to the
following conditions:
4.01 Stockholder Approval. Provided that K-1 is not required by the law
of its State of is incorporation to call and hold a meeting of its stockholders
to approve the transactions contemplated by this Agreement, and further
provided, that approval by the K-1 stockholders of the transactions contemplated
by this Agreement may be accomplished by written consent of a requisite
percentage of shares entitled to vote, then K-1 shall deliver such written
consents to NexGen at or immediately prior to the Closing. If K-1 is unable to
obtain stockholder approval, NexGen shall be under no further obligation to
proceed with the transactions contemplated by this Agreement.
4.02 Accuracy of Representations. The representations and warranties
made by K-1 in this Agreement were true when made and shall be true at the
Closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and K-1 shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or complied
with by K-1 prior to or at the Closing. NexGen shall be furnished with
certificates, signed by duly authorized officers of K-1 and dated the Closing
Date, to the foregoing effect.
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4.03 Officer's Certificates. NexGen shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
executive officer of K-1 to the effect that to such officer's best knowledge
there are no actions, suits, administrative or other proceedings,
investigations, inquiries or similar governmental proceedings pending or, to the
best knowledge of K-1 threatened by or against K-1 or which could reasonably be
expected to have a Material Adverse Effect on K-1, at law or in equity, before
any court or other governmental agency or instrumentality, domestic or foreign,
or before any arbitrator of any kind which might result in an action to enjoin
or prevent the consummation of the transactions contemplated by this Agreement.
Furthermore, based on certificates of good standing, representations of
government agencies, and K-1's own documents and information, the certificate
shall represent, to the best knowledge of the officer, that:
(a) This Agreement has been duly approved by K-1's board of
directors and that K-1 has received the requisite number of votes in
favor of the transactions contemplated from the K-1 stockholders, and
that this Agreement has been duly executed and delivered in the name
and on behalf of K-1 by its duly authorized officer(s) pursuant to, and
in compliance with, authority granted by the board of directors of K-1
pursuant to a unanimous consent;
(b) There have been no material adverse changes, as described
in Section 4.04 below, in K-1 up to and including the date of the
certificate;
(c) All conditions required by this Agreement have been met,
satisfied, or performed by K-1;
(d) All authorizations, consents, approvals, registrations,
and/or filings with any governmental body, agency, or court required in
connection with the execution and delivery of the documents by K-1 have
been obtained and are in full force and effect or, if not required to
have been obtained, shall be in full force and effect by such time as
may be required; and
(e) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending
or threatened against K-1, wherein an unfavorable decision, ruling, or
finding could reasonably be expected to have a Material Adverse Effect
on K-1 or the acquisition and reorganization contemplated herein, or
any agreement or instrument by which K-1 is bound or in any way
contests the existence of K-1.
(f) K-1 shall have received all requisite approvals for the
trading of the NexGen Class A common stock on the Over-the-Counter
Bulletin Board.
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4.04 No Material Adverse Change. Prior to the Closing Date, there shall
have been no event, change, or occurrence which, individually or together with
any other event, change, or occurrence, insofar as can reasonably be foreseen,
could result in a Material Adverse Effect on K-1.
4.05 Good Standings. NexGen shall have received a certificate of good
standing from the appropriate authorities, dated as of the date within five days
prior to the Closing Date, certifying that K-1 is in good standing as a
corporation in the State of Nevada and the State of Utah, and that K-1 as
reincorporated is in good standing with the State of Delaware.
4.06 Compliance with Section 1.06. Upon the transfer of the NexGen
Shares (i) K-1 shall deliver the resignations of the board of directors and
officers, and Xxxxx shall be nominated and appointed to the board of directors
of NexGen Newco pursuant to Section 1.06(i), (ii) Xxxx X. Xxxxxxxx shall have
been nominated and appointed as a director of NexGen Newco pursuant to Section
1.06(ii); Messrs. Xxxxxxx Xxxxxxxxxx and Xxxxxxx Xxxxxxxxxx shall have been
nominated and appointed as directors of NexGen Newco pursuant to Section
1.06(iii); and (iv) officers of NexGen Newco shall have been nominated and
appointed pursuant to Section 1.06(iv).
4.07 Other Items. NexGen shall have received such other documents,
certificates, or instruments relating to the transactions contemplated hereby as
NexGen may reasonably request, including a legal opinion from K-1's counsel as
provided in Section 1.07(a)(x).
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF K-1
The obligations of K-1 under this Agreement are subject to the
following conditions:
5.01 Change of Name. Immediately prior to the recapitalization of K-1,
NexGen shall file with the Delaware Secretary of State, an Amendment to its
Certificate of Incorporation, to change its name from NexGen Vision, Inc. to
"NexGen Merger, Inc."
5.02 Accuracy of Representations. The representations and warranties
made by NexGen in this Agreement were true when made and shall be true at the
Closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and NexGen shall have performed or complied with
all covenants and conditions required by this Agreement to be performed or
complied with by NexGen prior to or at the Closing. K-1 shall be furnished with
a certificate, signed by a duly authorized officer of NexGen and dated the
Closing Date, to the foregoing effect.
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5.03 Officer's Certificates. K-1 shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
operating officer of NexGen to the effect that to the best of his knowledge,
there are no actions, suits, administrative or other proceedings,
investigations, inquiries or other similar governmental proceedings are pending,
or to the best of his knowledge threatened by or against NexGen or adversely
affecting NexGen or its properties, at law or in equity, before any court or
other governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement. Furthermore,
based on certificates of good standing, representations of government agencies,
and NexGen's own documents, the certificate shall represent, to the best
knowledge of the officer, that:
(a) This agreement has been duly approved by NexGen's board of
directors and has been duly executed and delivered in the name and on
behalf of NexGen by its duly authorized officer(s) pursuant to, and in
compliance with, authority granted by the board of directors of NexGen
pursuant to a unanimous consent of its board of directors;
(b) Except as provided or permitted herein, there have been no
material adverse changes, as described in Section 5.04 below, in NexGen
up to and including the date of the certificate.
(c) All authorizations, consents, approvals, registrations,
and/or filing with any governmental body, agency, or court required in
connection with the execution and delivery of the documents by NexGen
have been obtained and are in full force and effect or, if not required
to have been obtained shall be in full force and effect by such time as
may be required; and
(d) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending
or threatened against NexGen, wherein an unfavorable decision, ruling,
or finding could reasonably be expected to have a Material Adverse
Effect on NexGen, or the acquisition and reorganization contemplated
herein, or any material agreement or instrument by which NexGen is
bound or would in any way contest the existence of NexGen.
5.04 No Material Adverse Change. Prior to the Closing Date, there shall
have been no event, change, or occurrence which, individually or together with
any other event, change, or occurrence, insofar as can reasonably be foreseen,
could have a Material Adverse Effect on NexGen.
5.05 Good Standing. K-1 shall have received a certificate of good
standing from the appropriate authority, dated as of a date with five days prior
to the Closing Date, certifying that NexGen is in good standing as a corporation
in the State of Delaware.
5.06 Ownership Documentation. K-1 shall have received documentation
verifying that all rights, title and interest in and to the trade names,
technology, software, intellectual property, manufacturing equipment, inventory
and assets related to the NexGen products and technology shall be free and clear
of any and all liens, encumbrances, royalties and claims prior to Closing, other
than those documents in the schedules or financials delivered to K-1.
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5.07 Other Items. K-1 shall have received such further documents
certificates, or instruments relating to the transactions contemplated hereby as
K-1 may reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of K-1 and NexGen
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the respective schedules to be
delivered by K-1 and NexGen pursuant hereto or as permitted or
contemplated by this Agreement, K-1 and NexGen shall each:
(i) Carry on its business in substantially the same
manner as it has heretofore;
(ii) Maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now
maintained by it;
(iii) Perform in all material respects all of its
obligations under material contracts, leases, and instruments
relating to or affecting its assets, properties, and business;
(iv) Use its best efforts to maintain and preserve it
business organization intact, to retain its key employees, and
to maintain its relationships with its material suppliers and
customers;
(v) Duly and timely file for all taxable periods
ending on or prior to the Closing Date all federal, state,
county, and local tax returns required to be filed by or on
behalf of such entity or for which such entity may be held
responsible and shall pay, or cause to pay, all taxes required
to be shown as due and payable on such returns, as well as all
installments of tax due and payable during the period
commencing on the date of this Agreement and ending on the
Closing Date; and
(vi) Fully comply with and perform in all material
respects all obligations and duties imposed on it by all
federal and state laws and all rules, regulations, and orders
imposed by federal or state governmental authorities.
(b) From the date of this Agreement until the Closing Date,
K-1 and NexGen shall not:
(i) Make any change in its articles or certificate of
incorporation or bylaws;
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(ii) Enter into or amend any material contract,
agreement, or other instrument of any of the types described
in such party's schedules, except that a party may enter into
or amend any contract, agreement, or other instrument in the
ordinary course of business; and
(iii) Enter into any agreement for the sale of NexGen
or K-1 securities without the prior approval of the other
party.
(iv) Issue or cause to be issued any press
announcements or news releases other than those required by
law.
6.02 Access to Properties and Records. Until the Closing Date, NexGen
and K-1shall afford to the other party's officers and authorized representatives
full access to the properties, books, and records of the other party in order
that each party may have full opportunity to make such reasonable investigation
as it shall desire to make of the affairs of NexGen or K-1 and shall furnish the
other party with such additional financial and other information as to the
business and properties of NexGen or K-1 as each party shall from time to time
reasonably request.
6.03 Indemnification by NexGen. NexGen shall indemnify and hold
harmless K-1 and its directors and officers, employees and agents, and each
person, if any, who controls K-1, within the meaning of the Securities Act, from
and against any and all losses, claims, damages, expenses, liabilities, or
actions to which any of them may become subject under applicable law (including
the Securities Act and the Exchange Act and shall reimburse them for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any claims or actions, whether or not resulting in liability,
insofar as such losses, claims, damages, expenses, liabilities, or actions arise
out of or are based upon any breach of this Agreement by NexGen, or any untrue
statement or alleged untrue statement of material fact made by NexGen contained
in any application or statement filed with a governmental body or arising out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary in order to make the statements
therein not misleading, but only insofar as any such statement or omission was
made in reliance upon and in conformity with information furnished in writing by
NexGen expressly for use therein. The indemnity agreement contained in this
Section 6.03 shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of K-1 and shall survive the consummation
of the transactions contemplated by this Agreement for a period of one year.
This indemnity agreement does not cover any acts or failure to act of K-1, its
officers, directors, employees or agents, prior to the date of this Agreement.
6.04 Indemnification by K-1. K-1shall indemnify and hold harmless
NexGen, the NexGen Stockholders, NexGen's directors and officers, and each
person, if any, who controls NexGen within the meaning of the Securities Act,
from and against any and all losses, claims, damages, expenses, liabilities, or
actions to which any of them may become subject under applicable law (including
the Securities Act and the Exchange Act) and shall reimburse them for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any claims or actions, whether or not resulting in liability,
20
insofar as such losses, claims, damages, expenses, liabilities, or actions arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any application or statement filed with a
governmental body or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary in order to make the statements therein not misleading, but only
insofar as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing by K-1 expressly for use
therein. The indemnity agreement contained in this Section 6.04 shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of NexGen and shall survive the consummation of the transactions
contemplated by this Agreement for a period of one year. This indemnity
agreement does not cover any acts or failure to act of NexGen, its officers,
directors, employees management, employees, or agents, prior to the date of this
Agreement.
6.05 The Acquisition of K-1 Common Stock. K-1 and NexGen understand and
agree that the consummation of this Agreement including the issuance of the K-1
Common Stock to NexGen Stockholders in exchange for the NexGen Shares as
contemplated hereby, constitutes the offer and sale of securities under the
Securities Act and applicable state statutes. K-1 and NexGen agree that such
transactions shall be consummated in reliance on exemptions from the
registration and prospectus delivery requirements of such statutes that depend,
among other items, on the circumstances under which such securities are
acquired.
(a) In order to provide documentation for reliance upon
exemptions from the registration and prospectus delivery requirements
for such transactions, the signing of this Agreement and the delivery
of appropriate separate representations shall constitute the parties
acceptance of, and concurrence in, the following representations and
warranties:
(i) The NexGen Stockholders acknowledge that neither
the U.S. Securities and Exchange Commission (the "SEC)" nor
the securities commission of any state or other federal agency
has made any determination as to the merits of acquiring K-1
Common Stock, and that this transaction involves certain
risks.
(ii) The NexGen Stockholders have received and read
the Agreement and understand the risks related to the
consummation of the transactions herein contemplated.
(iii) The NexGen Stockholders have such knowledge and
experience in business and financial matters that they are
capable of evaluating each business.
(iv) The NexGen Stockholders have been provided with
copies of all materials and information requested by them or
their representatives, including any information requested to
verify any information furnished (to the extent such
information is available or can be obtained without
unreasonable effort or expense), and the parties have been
provided the opportunity for direct communication regarding
the transactions contemplated hereby.
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(v) All information which the NexGen Stockholders
have provided to K-1 or their representatives concerning their
suitability and intent to hold shares in K-1 following the
transactions contemplated hereby is complete, accurate, and
correct.
(vi) The NexGen Stockholders have not offered or sold
any securities of K-1 or interest in this Agreement and have
no present intention of reselling any portion of such stock or
rights, either currently or after the passage of a fixed or
determinable period of time or on the occurrence or
nonoccurrence of any predetermined event or circumstance.
(vii) The NexGen Stockholders understand that the K-1
Common Stock has not been registered, but is being acquired by
reason of a specific exemption under the Securities Act as
well as under certain state statutes for transactions not
involving any public offering and that any disposition of the
subject K-1 Common Stock may, under certain circumstances, be
inconsistent with this exemption and may make NexGen or K-1 an
"underwriter", within the meaning of the Securities Act. It is
understood that the definition of "underwriter" focuses upon
the concept of "distribution" and that any subsequent
disposition of the subject K-1 Common Stock can only be
effected in transactions which are not considered
distributions. Generally, the term "distribution" is
considered synonymous with "public offering" or any other
offer or sale involving general solicitation or general
advertising. Under present law, in determining whether a
distribution occurs when securities are sold into the public
market, under certain circumstances one must consider the
availability of public information regarding the issuer, a
holding period for the securities sufficient to assure that
the persons desiring to sell the securities without
registration first bear the economic risk of their investment,
and a limitation on the number of securities which the
stockholder is permitted to sell and on the manner of sale,
thereby reducing the potential impact of the sale on the
trading markets. These criteria are set forth specifically in
rule 144 promulgated under the Securities Act, and, after one
year after the date the K-1 Common Stock is fully paid for, as
calculated in accordance with rule 144(d), sales of securities
in reliance upon rule 144 can only be made in limited amounts
in accordance with the terms and conditions of that rule.
After two years from the date the securities are fully paid
for, as calculated in accordance with rule 144(d), they can
generally be sold without meeting those conditions, provided
the holder is not (and has not been for the preceding three
months) an affiliate of the issuer.
(viii) The NexGen Stockholders acknowledge that the
shares of K-1 Common Stock, must be held and may not be sold,
transferred, or otherwise disposed of for value unless they
are subsequently registered under the Securities Act or an
exemption from such registration is available. Other than as
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set forth herein, K-1 is not under any obligation to register
the K-1 Common Stock under the Securities Act. If rule 144 is
available after one year and prior to two years following the
date the shares are fully paid for, only routine sales of such
K-1 Common Stock in limited amounts can be made in reliance
upon rule 144 in accordance with the terms and conditions of
that rule. K-1 is not under any obligation to make rule 144
available except as set forth in this Agreement and in the
event rule 144 is not available, compliance with Regulation A
or some other disclosure exemption may be required before
NexGen Stockholders can sell, transfer, or otherwise dispose
of such K-1 Common Stock without registration under the
Securities Act. Subject to compliance with federal and state
securities laws, K-1's registrar and transfer agent shall
maintain a stop transfer order against the registration of
transfer of the K-1 Common Stock held by NexGen Stockholders
and the certificates representing the K-1 Common Stock shall
bear a legend in substantially the following form so
restricting the sale of such securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND ARE "RESTRICTED
SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED
UNDER THE SECURITIES ACT. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
(ix) Subject to compliance with federal and state
securities laws, K-1 may refuse to register further transfers
or resales of the K-1 Common Stock in the absence of
compliance with rule 144 unless the NexGen Stockholders
furnish K-1 with an opinion of counsel reasonably acceptable
to K-1 stating that the transfer is proper. Further, unless
such opinion states that the shares of K-1 Common Stock are
free of any restrictions under the Securities Act, K-1 may
refuse to transfer the securities to any transferee who does
not furnish in writing to K-1 the same representations and
agree to the same conditions with respect to such K-1 Common
Stock as set forth herein. K-1 may also refuse to transfer the
K-1 Common Stock if any circumstances are present reasonably
indicating that the transferee's representations are not
accurate.
(b) In connection with the transaction contemplated by this
Agreement, NexGen and K-1 shall each file, with the assistance of the
other and their respective legal counsel, such notices, applications,
reports, or other instruments as may be deemed by them to be necessary
or appropriate in an effort to document reliance on such exemptions,
and the appropriate regulatory authority in the states where the NexGen
Stockholders reside unless an exemption requiring no filing is
available in such jurisdictions, all to the extent and in the manner as
may be deemed by such parties to be appropriate.
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(c) In order to more fully document reliance on the exemptions
as provided herein, NexGen, the NexGen Stockholders, and K-1 shall
execute and deliver to the other, at or prior to the Closing, such
further letters of representation, acknowledgment, suitability, or the
like as K-1 or NexGen and their respective counsel may reasonably
request in connection with reliance on exemptions from registration
under such securities laws.
(d) The NexGen Stockholders acknowledge that the basis for
relying on exemptions from registration or qualifications are factual,
depending on the conduct of the various parties, and that no legal
opinion or other assurance shall be required or given to the effect
that the transactions contemplated hereby are in fact exempt from
registration or qualification.
6.06 Securities Filings. NexGen shall be responsible for the
preparation of a Form 8-K filing with the Securities and Exchange Commission and
NexGen shall be responsible for a filing of consolidated audited financials in a
separate Form 8-K filing within 75 days from the Closing Date, and shall be
responsible for any and all filings in any jurisdiction where its stockholders
reside which would require a filing with a governmental agency as a result of
the transactions contemplated in this Agreement.
6.07 Sales of Securities Under Rule 144, If Applicable.
-------------------------------------------------
(a) K-1shall use its best efforts to at all times satisfy the
current public information requirements of rule 144 promulgated under
the Securities Act so that its stockholders can sell restricted
securities that have been held for one year or more or such other
restricted period as required by rule 144 as it is from time to tune
amended.
(b) Upon being informed in writing by any person holding
restricted stock of K-1 as of the date of this Agreement that such
person intends to sell any shares under rule 144 promulgated under the
Securities Act (including any rule adopted in substitution or
replacement thereof), K-1shall certify in writing to such person that
it is in compliance with rule 144 current public information
requirement to enable such person to sell such person's restricted
stock under rule 144, as may be applicable under the circumstances.
(c) If any certificate representing any such restricted stock
is presented to K-1's transfer agent for registration or transfer in
connection with any sales theretofore made under rule 144, provided
such certificate is duly endorsed for transfer by the appropriate
person(s) or accompanied by a separate stock power duly executed by the
appropriate person(s) in each case with reasonable assurances that such
endorsements are genuine and effective, and is accompanied by an
opinion of counsel satisfactory to K-1 and its counsel that such
transfer has complied with the requirements of rule 144, as the case
may be, K-1shall promptly instruct its transfer agent to register such
transfer and to issue one or more new certificates representing such
shares to the transferee and, if appropriate under the provisions of
rule 144. As the case may be, free of any stop transfer order or
restrictive legend. The provisions of this Section 6.08 shall survive
the Closing and the consummation of the transactions contemplated by
this Agreement for a period of two years.
24
(d) The stockholders of K-1 as of the date of this Agreement,
as well as those receiving K-1 Common Stock pursuant to this Agreement,
are intended third-party beneficiaries of this Section 6.08.
6.08 New Board of Directors and Officers. At the time of Closing, the
current board of directors and officers of K-1 shall resign and in their place
nominees of NexGen shall be appointed pursuant to Section 1.06 above.
6.09 Purchase and Sales. The NexGen Shares to be exchanged for K-1
Common Stock pursuant to Section 1.01 shall be held in escrow by Xxxxxx &
Xxxxxxx, LLP until K-1 shall have satisfied all of its conditions set forth in
this Agreement. The issuance of the shares to the NexGen Stockholders pursuant
to this Agreement shall be held in Trust by Xxxxxxx X. Xxxxxxxx, Attorney at
Law. If, after the expiration of 15 days following the Closing Date of this
Agreement, the remaining $180,000, plus attorney's fees not to exceed $5,000,
payable to Xxxxxxx X. Xxxxxxxx, Attorney at Law, have not been deposited with
"Xxxxxxx X. Xxxxxxxx Attorney Client Trust Account", then the Agreement and Plan
of Reorganization shall be rescinded, all shares being held in Trust by Xxxxxxx
X. Xxxxxxxx Attorney at Law shall be returned and cancelled, and all funds
deposited by NexGen in the Xxxxxxx X. Xxxxxxxx Attorney Client Trust Account
shall be returned to Xxxxxx & Xxxxxxx, LLP, less a $10,000 penalty to be
retained, and less attorney's fees paid. If requested by NexGen on or before the
expiration of 15 days, Xxxx Xxxxx Xxxxx, in his sole discretion, may grant one
(1) 10-day extension to this provision. Notwithstanding the foregoing, if NexGen
fails to deliver the Escrow Deposit pursuant to Section 1.02, and such failure
is due to or caused by a material breach of this Agreement by K-1, then K-1
shall not be entitled to receive any penalty payment, and K-1's attorney shall
not be entitled to recover attorneys fees.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers. Except as provided herein, K-1 and NexGen agree that
there were no finders or brokers involved in bringing the parties together or
who were instrumental in the negotiation, execution, or consummation of this
Agreement other than those previously disclosed. Further, K-1 and NexGen each
agree to indemnify the other against any claim by any third person for any
commission, brokerage, or finder's fee or other payment with respect to this
Agreement or the transactions contemplated hereby based on any alleged agreement
or understanding between such party and such third person, whether express or
implied, from the actions of such party. The covenants set forth in this section
shall survive the Closing Date and the consummation of the transactions herein
contemplated.
25
7.02 No Representation Regarding Tax Treatment. No representation or
warranty is being made by any party to any other regarding the treatment of this
transaction for international, federal or state income taxation. Each party has
relied exclusively on its own legal, accounting, and other tax adviser regarding
the treatment of this transaction for federal and state income taxes and on no
representation, warranty, or assurance from any other party or such other
party's legal, accounting, or other adviser.
7.03 Governing Law. This Agreement shall be governed by, enforced and
construed under and in accordance with the laws of the State of Utah.
7.04 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered, if sent by
facsimile or telecopy transmission or other electronic communication confirmed
by registered or certified mail, postage prepaid, or if sent by prepaid
overnight courier addressed as follows:
If to K-1. to: If to NexGen, to:
Xxxxxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx, CEO
K-1 Builders, Inc. NexGen Vision, Inc.
0000 X. Xxxxxxxx Xx, Xxx 000 0000 Xxx Xxxxxxxxxx Xxxx, Xxxxx #X
Xxxx Xxxx Xxxx, XX 00000 Xxxxxxx, XX 00000
With a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxx, LLP
0000 Xxxx Xxxxx Xxxxx Xxxx.
Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices, hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered or sent by facsimile or
telecopy transmission or other electronic communication, or one day after the
date so sent by overnight courier.
7.05 Attorney's Fees. In the event that any party institutes any action
or suit to enforce this Agreement or to secure relief from any default hereunder
or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
26
7.06 Schedules; Knowledge. Whenever in any section of this Agreement
reference is made to information set forth in the schedules provided by K-1 or
NexGen such reference is to information specifically set forth in such schedules
and clearly marked to identify the section of this Agreement to which the
information relates. Whenever any representation is made to the "knowledge" of
any party, it shall be deemed to be a representation that no officer or director
of such party, after reasonable investigation, has any knowledge of such
matters.
7.07 Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter hereof. All previous
agreements between the parties, whether written or oral, have been merged into
this Agreement. This Agreement alone fully and completely expresses the
agreement of the parties relating to the subject matter hereof. There are no
other courses of dealing, understandings, agreements, representations, or
warranties, written or oral, except as set forth herein.
7.08 Survival, Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of six months
from the Closing Date, unless otherwise provided herein.
7.09 Counterparts; Facsimile. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original and all of
which taken together shall be but a single instrument. Facsimile signatures
shall constitute original signatures, and shall be followed by delivery of
original signatures.
7.10 Amendment or Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law, or in equity, and such remedies may be enforced concurrently, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance thereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
as of the date first above written.
K-1 Builders, Inc. NexGen Vision, Inc.
a Nevada corporation a Delaware corporation
By: /s/ Xxxx Xxxxx Xxxxx By: /s/ Xxxx X. Xxxxxxxx
--------------------------- -----------------------------------------
Xxxx Xxxxx Xxxxx, President Xxxx X. Xxxxxxxx, Chief Executive Officer
[Remainder of this page intentionally left blank]
27
K-1 STOCKHOLDERS
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxxxx Xxxxxxx, III
------------------------- -------------------------
Xxxx X. Xxxxxxxx Xxxxxxxx Xxxxxxx, III
/s/ Xxxx X. Xxxxxxxxxxxx /s/ Xxxx X. Xxxxxx
------------------------- -------------------------
Xxxx X. Xxxxxxxxxxxx Xxxx X. Xxxxxx
/s/ Xxxxx X. XxXxxx /s/ Xxxxx X. Xxxxxx
------------------------- -------------------------
Xxxxx X. XxXxxx Xxxxx X. Xxxxxx
/s/ Xxxx Xxxxxxxx /s/ E. Xxxxx Xxxxxxxx
------------------------- -------------------------
Xxxx Xxxxxxxx E. Xxxxx Xxxxxxxx
/s/ Xxxxxxxxx X.Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
------------------------- -------------------------
Xxxxxxxxx X.Xxxxxxxx Xxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxx Xxx Xxxxxxxx
------------------------- -------------------------
Xxxxxxx X. Xxxxx Xxxxx Xxx Xxxxxxxx
/s/ Xxxxxxx Xxxx Xxxxxxxx /s/ Xxxxxx Xxxx Xxxxx
------------------------- -------------------------
Xxxxxxx Xxxx Xxxxxxxx Xxxxxx Xxxx Xxxxx
/s/ Xxxxxxx Xxxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
------------------------- -------------------------
Xxxxxxx Xxxxxx Xxxxxxxx Xxxxxx X. Xxxxxxxx
/s/ Xxxxx Xxxxxxxxxx /s/ Xxxx Xxxxxxx
------------------------- -------------------------
Xxxxx Xxxxxxxxxx Xxxx Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxx Xxxxxx Xxxxxxx
------------------------- -------------------------
Xxxxxx X. Xxxxxxx Xxxxx Xxxxxx Xxxxxxx
ARB Investment Enterprises, Ltd.
By: _________________________
Name:
Its duly authorized:
28
EXHIBIT A
NexGen Vision, Inc.
List of Stockholders
Number of Number of K-1
NexGen Shares Class B Shares to be
Name of Stockholder of Common Stock Owned Received in Exchange
------------------- --------------------- --------------------
Xxxx X. Xxxxxxxx 2,350,000 2,350,000
Xxxxxxxx Xxxxxxx, III 12,500 12,500
Xxxx X. Xxxxxxxxxxxx 50,000 50,000
Xxxx X. Xxxxxx 70,000 70,000
Xxxxx X. XxXxxx 30,000 30,000
Xxxxx X. Xxxxxx 30,000 30,000
Xxxx Xxxxxxxx 70,000 70,000
E. Xxxxx Xxxxxxxx 30,000 30,000
Xxxxxxxxx X.Xxxxxxxx 70,000 70,000
Xxxxxx X. Xxxxxxxx 250,000 250,000
Xxxxxxx X. Xxxxx 50,000 50,000
Xxxxx Xxx Xxxxxxxx 7,500 7,500
Xxxxxxx Xxxx Xxxxxxxx 7,500 7,500
Xxxxxx Xxxx Xxxxx 7,500 7,500
Xxxxxxx Xxxxxx Xxxxxxxx 7,500 7,500
Xxxxxx X. Xxxxxxxx 150,000 150,000
29
Number of Number of K-1
NexGen Shares Class B Shares to be
Name of Stockholder of Common Stock Owned Received in Exchange
------------------- --------------------- --------------------
Xxxxx Xxxxxxxxxx 30,000 30,000
Xxxx Xxxxxxx 50,000 50,000
Xxxxxx X. Xxxxxxx 20,000 20,000
Xxxxx Xxxxxx Xxxxxxx 20,000 20,000
ARB Investment Enterprises, Ltd. 4,387,500 4,387,500
30
EXHIBIT B
NexGen Vision, Inc.
Form of K-1 Delaware Certificate of Incorporation
CERTIFICATE OF INCORPORATION
of
NEXGEN VISION, INC.
1. The name of the corporation is NexGen Vision, Inc. (the "Company").
2. The name of the registered agent, and the address of its registered
office in the State of Delaware is as follows:
The Corporation Trust Company
Corporation Trust Center
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
3. The nature of the business or purposes to be conducted or promoted
are to engage in any lawful act or activity for which corporations may be
organized under the Delaware General Corporation Law.
4. The total number of shares of stock of all classes and series the
Company shall have authority to issue shares consisting of (i) 50,000,000 shares
of Class A common stock, value of $0.001 per share (the "Class A Shares"), (ii)
7,700,000 shares of Class B common stock, value of $0.001 per share (the "Class
B Shares") (the Class A Shares and the Class B Shares shall be collectively
referred to as the "Common Stock"), and (iii) 10,000,000 shares of preferred
stock, $0.001 par value with such powers, designations, preferences, rights and
qualifications, limitations or restrictions as may be decided upon by the
Company's board of directors (the "Preferred Stock"). Each share of Common Stock
shall be entitled to its proportionate share of dividends and other
distributions. Each Class A Share shall be entitled to one vote on all matters
which come before the stockholders, whether at a meeting or by consent. Each
Class B Share shall be entitled to 10 votes on all matters which come before the
stockholders, whether at a meeting or by consent. Each Class B Share shall be
convertible into one fully paid nonassessable Class A Share (i) at the option of
the holder or (ii) upon public sale (x) in an offering registered under the
Securities Act of 1933 (the "Securities Act"), (y) in an offering under
Regulation A under the Securities Act, or (ii) under Rule 144, including Rule
144(k), under the Securities Act.
31
5. The name and mailing address of the incorporator is as follows:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxx, LLP
1645 Palm Beach Lakes Boulevard, Ste. 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
6. The name and mailing address of each person who is to serve as a
director
until the first annual meeting of the stockholders or until a successor is
elected and qualified, is as follows:
Name Mailing Address
---- ---------------
Xxxx X. Xxxxxxxx c/o NexGen Merger, Inc.
0000 Xxx Xxxxxxxxxx Xxxx
Xxxxx X
Xxxxxxx, XX 00000
Xxxxxxx Xxxxxxxxxx c/o NexGen Merger, Inc.
0000 Xxx Xxxxxxxxxx Xxxx
Xxxxx X
Xxxxxxx, XX 00000
Xxxxxxx Xxxxxxxxxx c/o NexGen Merger, Inc.
0000 Xxx Xxxxxxxxxx Xxxx
Xxxxx X
Xxxxxxx, XX 00000
7. The Company is to have perpetual existence. In furtherance and not
in limitation of the powers conferred by statute, the board of directors is
expressly authorized to make, amend, alter or repeal the bylaws of the Company.
8. Elections of directors need not be by written ballot unless the
bylaws of the Company shall so provide. Meetings of stockholders may be held
within or without the State of Delaware as the bylaws may provide. The books of
the Company may be kept (subject to any provision contained in the statutes)
outside the State of Delaware at such place or places as may be designated from
time to time by the board of directors or in the bylaws of the Company.
9. The Company reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
32
10. No director of this Company shall be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director. Nothing in this paragraph shall serve to eliminate or limit the
liability of a director (a) for any breach of the director's duty of loyalty to
this Company or its stockholders, (b) for acts or omissions not in good faith or
which involves intentional misconduct or a knowing violation of law, (c) under
Section 174 of the Delaware General Corporation Law, or (d) for any transaction
from which the director derived an improper personal benefit. If the Delaware
General Corporation Law is amended after approval by the stockholders of this
article to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the Company
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Company shall not adversely affect any right or protection
of a director of the Company existing at the time of such repeal or
modification.
11. (a) Each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any action, suit or proceeding
(except as provided in Section 11(f)) whether civil, criminal or administrative
(a "Proceeding"), or is contacted by any governmental or regulatory body in
connection with any investigation or inquiry (an "Investigation"), by reason of
the fact that he or she is or was a director or executive officer (as such term
is utilized pursuant to interpretations under Section 16 of the Securities
Exchange Act of 1934) of the Company or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans (an "Indemnitee"), whether the basis of such
Proceeding or Investigation is alleged action in an official capacity or in any
other capacity as set forth above shall be indemnified and held harmless by the
Company to the fullest extent authorized by the Delaware General Corporation
Law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than such law permitted the Company to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred or suffered by such
Indemnitee in connection therewith and such indemnification shall continue as to
an Indemnitee who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the Indemnitee's heirs, executors and
administrators. The right to indemnification conferred in this Section shall be
a contract right and shall include the right to be paid by the Company the
expenses incurred in defending any such Proceeding in advance of its final
disposition (an "Advancement of Expenses"); provided, however, that such
Advancement of Expenses shall be made only upon delivery to the Company of an
undertaking, by or on behalf of such Indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such Indemnitee is not entitled
to be indemnified for such expenses under this Section or otherwise (an
"Undertaking").
33
(b) If a claim under paragraph (a) of this Section is not paid
in full by the Company within 60 days after a written claim has been received by
the Company, except in the case of a claim for an Advancement of Expenses, in
which case the applicable period shall be 20 days, the Indemnitee may at any
time thereafter bring suit against the Company to recover the unpaid amount of
the claim. If successful in whole or in part in any such suit or in a suit
brought by the Company to recover an Advancement of Expenses pursuant to the
terms of an Undertaking, the Indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. In
(i) any suit brought by the Indemnitee to enforce a
right to indemnification hereunder (but not in a suit brought
by the Indemnitee to enforce a right to an Advancement of
Expenses) it shall be a defense that, and
(ii) any suit by the Company to recover an
Advancement of Expenses pursuant to the terms of an
Undertaking the Company shall be entitled to recover such
expenses upon a final adjudication that,
the Indemnitee has not met the applicable standard of conduct set forth in the
Delaware General Corporation Law. Neither the failure of the Company (including
its board of directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such suit that indemnification
of the Indemnitee is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Company (including its board of
directors, independent legal counsel, or its stockholders) that the Indemnitee
has not met such applicable standard of conduct or, in the case of such a suit
brought by the Indemnitee, be a defense to such suit. In any suit brought by the
Indemnitee to enforce a right hereunder, or by the Company to recover an
Advancement of Expenses pursuant to the terms of an undertaking, the burden of
proving that the Indemnitee is not entitled to be indemnified or to such
Advancement of Expenses under this Section or otherwise shall be on the Company.
(c) The rights to indemnification and to the Advancement of
Expenses conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, this
certificate of incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) The Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Company or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Company would have
the power to indemnify such person against such expense, liability or loss under
the Delaware General Corporation Law.
(e) The Company may, to the extent authorized from time to
time by the board of directors, grant rights to indemnification and to the
Advancement of Expenses, to any employee or agent of the Company to the fullest
extent of the provisions of this Section with respect to the indemnification and
Advancement of Expenses of directors, and executive officers of the Company.
34
(f) Notwithstanding the indemnification provided for by this
Section 11, the Company's bylaws, or any written agreement, such indemnity shall
not include any expenses, liabilities or losses including but not limited to
advancement of expenses incurred by such Indemnitees relating to or arising from
any Proceeding in which the Company asserts a direct claim (as opposed to a
stockholders' derivative action) against the Indemnitees, whether such claim by
the Company is termed a complaint, counterclaim, crossclaim, third-party
complaint or otherwise.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the Delaware General Corporation
Law, do make this certificate, hereby declaring and certifying that this is my
act and deed and the facts herein stated are true, and accordingly have hereunto
set my hand as of the ___ day of April, 2002.
----------------------------
Xxxxxxx X. Xxxxxx
35
EXHBIT C
NexGen Vision, Inc.
Form of Lock Up Agreement
_____ __, 2002
Certain stockholders of K-1 Builders, Inc.
listed on Schedule 1.10(a)(x) of the
Agreement and Plan of Reorganization
c/o Xxxxxxx Xxxxxxxx, Esq.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 000-X
Xxxx Xxxx Xxxx, Xxxx 00000
Ladies and Gentlemen:
This letter sets forth our agreement (the "Lock-Up Agreement") with
regard to offers and sales of the Class A Common Stock of NexGen Vision, Inc., a
Delaware corporation (the "Company"). Capitalized terms used but not otherwise
defined herein shall have the meanings set forth in the Agreement and Plan of
Reorganization by an among K-1 Builders, Inc., NexGen Vision, Inc., the NexGen
Stockholders and Xxxx Xxxxx Xxxxx (the "Agreement"). This Lock-Up Agreement is
being executed as part of the closing of the transaction contemplated by the
Agreement through which control of K-1 is shifting to the NexGen Stockholders.
In connection with K-1's acquisition of NexGen and in consideration of
issuing NexGen stock to those certain holders of K-1 Common Stock listed in the
amounts set forth on Schedule 1.10(a)(x) of the Agreement, those same
stockholders agree not to offer or sell any of the shares of NexGen Class A
Common Stock on the following terms and for the periods indicated below:
o The stockholders shall not sell any shares of NexGen Class A
Common Stock for three months following the Closing Date;
o During each three month period thereafter, the stockholders
may sell the greater of 1% of outstanding shares of NexGen
Class A Common Stock or the average four weekly trading volume
for the week prior to sale (subject to any Rule 144
limitations). Twelve months following the Closing, all lock-up
restrictions as provided herein shall cease;
o The stockholders shall open a private account for a private
transaction at MG Securities Group, Inc. ("MG"), giving MG a
48 hour (measured excluding weekends and days on which the
Nasdaq Stock Market is closed) preferential right of first
purchase beginning upon the delivery of facsimile notice to MG
at (000) 000-0000 (or such other number as may be provided in
writing); and
36
o All certificates for the 310,000 shares held by the
stockholders shall contain a restrictive legend referring to
this Lock-Up Agreement. K-1's transfer agent shall be entitled
to rely solely upon the opinion of K-1's counsel concerning
the legality of removal of any such legend.
If the foregoing is acceptable to you, please execute this Lock-Up
Agreement in the place designated below and return a copy to the undersigned. I
have asked each of the other NexGen stockholders to execute this Lock-Up
Agreement as well.
Very truly yours,
Xxxx Xxxxxxxx
We hereby agree to the foregoing.
STOCKHOLDERS OF K-1 BUILDERS, INC.
By:____________________________ ________________________
Number of shares owned
By:____________________________ ________________________
Number of shares owned
By:____________________________ ________________________
Number of shares owned
By:____________________________ ________________________
Number of shares owned
By:____________________________ ________________________
Number of shares owned
37
SCHEDULE 1.0(a)(ix)
NexGen Vision, Inc.
List of Shareholders Signing Lock Up Agreement
Xxxxxx Xxxxxx
Xxxx Xxxxx Xxxxx
38
SCHEDULE 2.04
NexGen Vision, Inc.
Financial Statements of K-1
Reference is made to K-1 Builder, Inc.'s filing with Securities and Exchange
Commission available at their website at xxx.xxx.xxx.
39
SCHEDULE 2.13(a)
NexGen Vision, Inc.
K-1 Organizational Documents
Articles of Incorporation
of
K-1 BUILDERS, INC.
This Certificate of Incorporation as contained herein has been duly
adopted in accordance with the General Corporation Law of Nevada and filed with
the Nevada Secretary of State's office.
ARTICLE I
Name
The name of this corporation is K-1 BUILDERS, INC. (the "Corporation").
ARTICLE II
Registered Office and Agent
The name of the registered agent of the Corporation is ZURICKIRCH CORP.
The street address of the registered office of the Corporation in the
State of Nevada is 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxx Xxxxx, XX 00000.
ARTICLE III
Mailing Address
The mailing address of the Corporation is K-1 BUILDERS, INC. 0000 Xx.
Xxxxxxx Xxxx. #000 Xxxxxxxx, Xxxx 00000
ARTICLE IV
Duration
This Corporation shall exist perpetually.
40
ARTICLE V
Purpose
The purpose or purposes of the Corporation are:
(1) To conduct any lawful business, to exercise any lawful purpose and power,
and to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Laws of Nevada; and (
2) In general, to possess and exercise all the powers and privileges granted by
the General Corporation Law of Nevada or any other law of Nevada or by this
Certificate of Incorporation together with any power incidental thereto, so far
as such powers and privileges are necessary or convenient to the conduct,
promotion or attainment of the business or purposes of the Corporation.
ARTICLE VI
Capital Stock
The maximum number of shares of capital stock which this Corporation shall have
authority to issue is Sixty Million (60,000,000), Consisting of Fifty Million
(50,000,000) shares of Common Stock, $.001 par value, and Ten Million
(10,000,000) shares of Preferred Stock at $.0001 par value. The preferences,
qualifications, limitations, restrictions and the special or relative rights in
respect of the shares of each class are as follows:
SECTION 1. Preferred Stock. The Preferred Stock may be issued from time to time
in one or more series. All shares of Preferred Stock shall be of equal rank and
shall be identical, except in respect of the matters that may be fixed and
determined by the Board of Directors as hereinafter provided, and each share of
each series shall be identical with all other shares of such series, except as
to the date from which dividends are cumulative. The Board of Directors hereby
is authorized to cause such shares to be issued in one or more classes or series
and with respect to each such class or series to fix and determine the
designation, powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series shall
include, but not be limited to, determination of the following:
(1) the number of shares constituting a series, the distinctive designation of a
series and the stated value of a series, if different from the par value;
(2) whether the shares or a series are entitled to any fixed or determinable
dividends, the dividend rate (if any) on such shares, whether the dividends are
cumulative and the relative rights or priority of dividends on shares of that
series;
(3) whether a series has voting rights in addition to the voting rights provided
by law and the terms and conditions of such voting rights;
(4) whether a series will have or receive conversion or exchange privileges and
the terms and conditions of such conversion or exchange privileges;
41
(5) whether the shares of a series are redeemable and the terms and conditions
of such redemption, including the manner of selecting shares for redemption if
less than all shares are to he redeemed, the date or dates on or after which the
shares in the series will be redeemable and the amount payable in case of
redemption;
(6) whether a series will have a sinking fund for the redemption or purchase of
the shares in the series and the terms and the amount of such sinking fund;
(7) the right of a series to the benefit of conditions and restrictions on the
creation of indebtedness of the Corporation or any subsidiary, on the issuance
of any additional capital stock (including additional shares of such series or
any other series), on the payment of dividends or the making of other
distributions on any outstanding stock of the Corporation and the purchase,
redemption or other acquisition by the Corporation, or any subsidiary, of any
outstanding stock of the Corporation;
(8) the rights of a series in the event of voluntary or involuntary liquidation,
dissolution or winding up of the Corporation and the relative rights of priority
of payment of a series; and
(9) any other relative, participating, optional or other special rights,
qualifications, limitations or restrictions of such series.
Dividends on outstanding shares of Preferred Stock shall be paid or set apart
for payment before any dividends shall be paid or declared or set apart for
payment on the Common Stock with respect to the same dividend period.
If upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation the assets available for distribution to holders
of shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series in accordance
with the respective preferential amounts (including unpaid cumulative dividends,
if any, payable with respect thereto).
SECTION 2. Common Stock - General Provisions. The Common Stock shall be subject
to the express terms of the Preferred Stock and any series thereof. Each share
of Common Stock shall be equal to every other share of Common Stock, except as
otherwise provided herein or required by law.
Shares of Common Stock authorized hereby shall not be subject to preemptive
rights. The holders of shares of Common Stock now or hereafter outstanding shall
have no preemptive right to purchase or have offered to them for purchase any of
such authorized but unissued shares, or any shares of Preferred Stock, Common
Stock or other equity securities issued or to be issued by the Company.
Subject to the preferential and other dividend rights applicable
to Preferred Stock, the holders of shares of Common Stock shall be entitled to
receive such dividends (payable in cash, stock or otherwise) as may be declared
on the Common Stock by the Board of Directors at any time or from time to time
out of any funds legally available therefor.
42
In the event of any voluntary or involuntary liquidation, distribution
or winding up of the Corporation, after distribution in full of the preferential
or other amounts to be distributed to the holders of shares of Preferred Stock,
the holders of shares of Common Stock shall be entitled to receive all of the
remaining assets of the Corporation available for distribution to its
stockholders, ratably in proportion to the number of shares of Common Stock held
by them.
SECTION 3. Common Stock - Other Provisions.
(a) Voting Rights. The shares of Common Stock shall have the
following voting rights:
(1) Each share of Common Stock shall entitle the holder thereof to one vote upon
all matters upon which stockholders have the right to vote.
Except as otherwise required by applicable law, the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation (or, if any holders of shares of Preferred Stock
are entitled to vote together with the holders of Common Stock, as a single
class with such holders of shares of Preferred Stock).
(b) Dividends and Distributions. Except as otherwise provided in this
Certificate of Incorporation, holders of Common Stock shall be entitled to such
dividends and other distributions in cash, stock or property of the Corporation
as may be declared thereon by the Board of Directors from time to time out of
assets or funds of the Corporation legally available therefor; provided,
however, that in no event may the rate of any dividend payable on outstanding
shares of any class of Common Stock be greater than the dividend rate payable on
outstanding shares of the other class of Common Stock. All dividends and
distributions on the Common Stock payable in stock of the Corporation shall be
made in shares of Common Stock. In no event will shares of Common Stock be
split, divided or combined unless the outstanding shares of the Common Stock
shall be proportionately split, divided or combined.
(c) Options, Rights or Warrants. The Corporation may make offerings of options,
rights or warrants to subscribe for shares of capital stock to all holders of
Common Stock if an identical offering is made simultaneously to all the holders
of stock. All such offerings of options, rights or warrants shall offer the
respective holders of Common Stock the right to subscribe at the same rate per
share.
ARTICLE VII
Board of Directors
SECTION 1. Number and Terms. The number of directors which shall constitute the
whole Board of Directors shall be determined in the manner provided in the
Bylaws of the Corporation. The Board of Directors shall be shall be as nearly
equal in number as possible. The initial directors shall hold office for a term
expiring at the next succeeding annual meeting of stockholders and until
election of their respective successors.
SECTION 2. Vacancies. Any vacancy on the Board of Directors, whether arising
through death, resignation or removal of a director or through an increase in
the number of directors of any class, shall be
43
filled by a majority vote of all remaining directors. The term of office of any
director elected to fill such a vacancy shall expire at the expiration of the
term of office of directors in which the vacancy occurred.
SECTION 3. Other Provisions. Notwithstanding any other provision of this Article
VII, and except as otherwise required by law, whenever the holders of any one or
more series of Preferred Stock or other securities of the Corporation shall have
the right, voting separately as a class, to elect one or more directors of the
Corporation, the term of office, the filling of vacancies and other features of
such directorships shall be governed by the terms of this Certificate of
Incorporation applicable thereto, and unless the terms of this Certificate of
Incorporation expressly provide otherwise, such directorship shall be in
addition to the number of directors provided in the Bylaws and such directors
shall not be classified. Elections of directors need not be by written ballot
unless the Bylaws of the Corporation shall so provide.
ARTICLE VIII
Bylaws
The power to adopt, alter, amend or repeal the Bylaws of the Corporation shall
be vested in the Board of Directors. The stockholders of the Corporation may
adopt, amend or repeal the Bylaws of the Corporation only by the affirmative
vote of holders of at least 66 2/3% of the combined voting power of the then
outstanding shares of stock of all classes and series of the Corporation
entitled to vote generally on matters requiring the approval of stockholders
(the "Voting Stock").
ARTICLE IX
Stockholder Meetings
Any action required or permitted to be taken by the stockholders of the
Corporation must be taken at a duly called and noticed meeting of stockholders
and may not be taken by consent in writing, unless such action requiring or
permitting stockholder approval is approved by a majority of the directors then
in office. An action required or permitted to be taken by the stockholders which
has been approved by a majority of the directors may be taken by consent in
writing if the consent is signed by the record holders of no less than the
Voting Stock that would otherwise be required for approval of such action.
ARTICLE X
Amendments
The provisions set forth in Articles VI, VII, VIII and IX and in this Article X
may not he repealed, rescinded, altered or amended, and no other provision may
be adopted which is inconsistent therewith or impairs in any way the operation
or effect thereof, except by the affirmative vote of holders of not less than 66
2/3% of the Voting Stock.
44
Consistent with the preceding sentence, the corporation reserves the right to
adopt, repeal, rescind, alter or amend in any respect any provision contained in
this Certificate of Incorporation as prescribed by applicable law.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Incorporation
to be executed in its corporate name this 22nd day of August , 2000.
As approved and adopted by the Board of Directors as of August 22, 2000.
-------------------------------------
Xxxx Xxxxx Xxxxx, Secretary/Treasurer
45
BY-LAWS
of
K-1 BUILDERS, INC.
ARTICLE I
Meetings of Shareholders
SECTION 1. Annual Meeting. The annual meeting of the shareholders of this
Corporation for the election of directors and for the transaction of any proper
business shall be held at the time and place designated by the Board of
Directors (the "Board") of the Corporation. The annual meeting shall be held
within 4 months after the close of the Corporation's fiscal year.
SECTION 2. Special Meetings. Special meetings of the shareholders shall be held
when called by the Chief Executive Officer or by a majority of the Board of
Directors. Special meetings may not be called by any other person. Written
notice of a special meeting pursuant to Section 4 herein shall be given to all
stock holders entitled to vote at such meeting not less than 10 nor more than 60
days before the date of the meeting. Each such special meeting shall be held at
such date and time as requested by the person or persons calling the meeting
within the limits fixed by law. Business transacted at any special meeting of
shareholders shall be limited to the purposes stated in the notice.
SECTION 3. Place. Meetings of shareholders may be held in the State of Nevada or
outside the State of Nevada.
SECTION 4. Notice. Written notice stating the place, date and time of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than 10 nor more than 60 days
before the meeting, either personally or by first class mail, by or at the
direction of the President, the Secretary, or the officer or persons calling the
meeting to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be effective when deposited in the United States mail
addressed to the shareholder at his address as it appears on the Corporation's
current record of shareholders.
SECTION 5. Notice of Adjourned Meetings. When a meeting is adjourned to another
time or place, it shall not be necessary to give any notice of the adjourned
meeting if the time and place to which the meeting is adjourned are announced at
the meeting at which the adjournment is taken, and at the adjourned meeting any
business may be transacted that might have been transacted on the original date
of the meeting. If, however, the adjournment is for more than 30 days, or if,
after the adjournment, the Board of Directors fixes a new record date for the
adjourned meeting, a notice of the adjourned meeting shall be given as provided
in Section 4 herein to each shareholder of record on the new record date
entitled to vote at such meeting.
SECTION 6. Notice of Shareholder Business and Nominations. Except as may
otherwise be provided herein, or in the Certificate of Incorporation in
connection with rights to electing directors under specific circumstances which
may be granted to the holders of any series of Preferred Stock, nominations for
the election of directors and the proposal of business to be considered by the
shareholders may be made by the Board or any shareholder of record entitled to
vote at the meeting and who complies with the notice procedures set forth in
this by-law.
For nominations or other business to be properly brought before an annual
meeting by a shareholder, the shareholder must have given timely notice thereof
in writing to the Secretary of the Corporation and such other business must
otherwise be a proper matter for shareholder action. Except as otherwise
provided by applicable law, to be timely, a shareholder's notice must be
delivered to the Secretary of the Corporation at the Corporation's principal
executive offices not later than the close of business on the 60th day, nor
earlier than the close of business on the 90th day, prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the event that the date of the annual meeting is more than 30 days before or 60
days after such anniversary date, notice by the shareholder must he so delivered
not earlier than the close of business on the later of the 60th day prior to
such meeting or the 10th day following the day on which public announcement of
the date of such meeting is made by the Corporation. In no event shall public
announcement of an adjournment of an annual meeting commence a new time period
for giving of a shareholder's notice as described above.
Such shareholder's notice shall set forth (a) as to each person whom the
shareholder proposes to nominate for election to the Board of Directors, all
information relative to such person required to be disclosed in solicitation of
proxies for election of directors pursuant to Regulation 14A under the
Securities Exchange
46
Act of 1934 (including such person's written consent to being named in the proxy
statements as a nominee and to serving as a director if elected); (b) as to any
other business that the shareholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such shareholder and the beneficial owner, if any, on whose
behalf the nomination or proposal is made; and (c) as to the shareholder giving
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made (I) the name and address of such shareholder, as they appear on
the Corporation's books and of such beneficial owned and (ii) the class and
number of shares of the Corporation which are owned beneficially and of record
by such shareholder and beneficial owner. Notice of nominations which are
proposed by the Board shall be given by the Chairman, the President or the
Secretary of the Corporation on behalf of the Board.
The chairperson of the meeting may, if the facts warrant, determine and declare
to the meeting that a nomination was not made in accordance with the foregoing
procedure, and if he or she should so determine, he or she shall so declare to
the meeting and the defective nomination shall be disregarded.
SECTION 7. Fixing 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 entitled to receive payment of any distribution, or in
order to make a determination of shareholders for any other purpose, the Board
of Directors may fix in advance a date as the record date for any determination
of shareholders, such date in any case to be not more than 60 days and, in case
of a meeting of shareholders, not less than 10 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 or to vote at an annual or
special meeting of shareholders, or shareholders entitled to receive payment of
a distribution, the date on which notice of the meeting is mailed or the date on
which the resolution of the Board of Directors declaring such distribution 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, unless the Board of Directors fixes a new
record date for the adjourned meeting. A new record date must be fixed if the
meeting is adjourned to a date more than 120 days after the date fixed for the
original meeting.
SECTION 8. Voting Record. The officers or agent having charge of the stock
transfer books for shares of the Corporation shall make, at least 10 days before
each meeting of shareholders, a complete alphabetical list of the shareholders
entitled to vote at such meeting or any adjournment thereof, arranged by voting
group with the address of and the number and class and series, any, of shares
held by each. The list, for a period of 10 days prior to such meeting, shall be
available for inspection at the principal office of the Corporation, or at the
office of the transfer agent or registrar of the Corporation or at a place
identified in the meeting notice in the city where the meeting will be held.
Upon written demand to the Corporation, any shareholder or his agent or attorney
shall be entitled to inspect the list at any time during usual business hours.
The list shall also be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any shareholder or his agent
or attorney at any time during the meeting.
If the requirements of this section have not been substantially complied with,
the meeting, on demand of any shareholder in person or by proxy, shall be
adjourned until the requirements are complied with. If no such demand is made,
failure to comply with the requirements of this section shall not affect the
validity of any action taken at such meeting.
47
SECTION 9. Shareholder Quorum and Voting. A majority of all then outstanding
shares of voting stock entitled to vote, represented in person or by proxy,
shall constitute a Quorum at a meeting of shareholders. When a specified item of
business is required to be voted on by a class or series of stock, a majority of
the shares of such class or series shall constitute- a quorum for the
transaction of such item of business by that class or series.
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 otherwise provided by law or by the
Certificate of Incorporation.
After a quorum has been established at a shareholders' meeting, the subsequent
withdrawal of shareholders, so as to reduce the number of shareholders entitled
to vote at the meeting below the number required for a quorum, shall not affect
the validity of any action taken at the meeting or any adjournment thereof.
SECTION 10. Voting of Shares. Each outstanding share of Common Stock shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. Holders of Common Stock shall be entitled to vote for the election
of directors or on any matter presented to the shareholders.
Shares of stock of this Corporation owned directly or indirectly by another
corporation the majority of the voting stock of which is owned, directly or
indirectly, by this Corporation are not entitled to vote, and shall not be
counted in determining the total number of outstanding shares at any given time.
A shareholder or the shareholder's attorney in fact may vote either in person or
by proxy executed in writing by the shareholder or his duly authorized
attorney-in-fact.
At each election for directors every shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
votes represented by the shares owned by him for as many persons as there are
directors to be elected at that time and for whose election he has a right to
vote.
Shares standing in the name of another corporation, domestic or foreign, may be
voted by the officer, agent, or proxy designated by the by-laws of the corporate
shareholder; or, in the absence of any applicable by-law, by such person as the
board of directors of the corporate shareholder may designate. Proof of such
designation may be made by presentation of a certified copy of the by-laws or
other instrument of the corporate shareholder. In the absence of any such
designation, or in case of conflicting designation by the corporate shareholder,
the chairman of the board, president, any vice president, secretary and
treasurer of the corporate shareholder shall be presumed to possess, in that
order, authority to vote such shares.
Shares held by an administrator, executor, guardian, personal representative, or
conservator may be voted by him, either in person or by proxy, without a
transfer of such shares into his name. Shares standing in the name of a trustee
may be voted by him, either in person or by proxy, but no trustee shall be
entitled to vote shares held by him without a transfer of such shares into his
name or the name of his nominee.
48
Shares held by or under the control of a receiver, trustee in bankruptcy
proceedings or an assignee for the benefit of creditors, may be voted by such
receiver, trustee or assignee, without the transfer thereof into the name of
such receiver, trustee or assignee.
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 or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of redeemable shares
has been mailed to the holders thereof and a sum sufficient to redeem such
shares has been deposited with a bank, trust company or other financial
institution, with irrevocable instruction and authority to pay the redemption
price to the holders thereof upon surrender of certificates therefor, such
shares shall not be entitled to vote on any matter and shall not be deemed to be
outstanding shares.
SECTION 11. Written Consent of Shareholders. Any action required or permitted to
be taken by the shareholders of the Corporation must be effected at a duly
called annual or special meeting of the shareholders, unless such action is
approved by a majority of the Board of Directors. In the event of such approval,
such action may be taken without a meeting, without prior notice and without a
vote if a consent in writing, setting forth the action so taken, shall be signed
by the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting of
shareholders at which all shares entitled to vote thereon were present and
voted, provided that all requirements of law and the Certificate of
Incorporation have been satisfied. To be effective, the executed written consent
of the shareholders must be delivered to the Corporation within 60 days of the
date the earliest written consent is received by the Corporation. If any class
of shares is entitled to vote thereon as a class, such written consent shall be
required of the holders of a majority of the shares of each class of shares
entitled to vote thereon.
After obtaining such authorization by written consent, notice shall promptly be
given to those shareholders who have not consented in writing or who are not
entitled to vote on the action. The notice shall fairly summarize the material
features of the authorized action and, if the action be a merger, consolidation
or sale or exchange of assets for which dissenters rights are provided by law,
the notice shall contain a clear statement of the right of shareholders
dissension there from to be paid the fair value of their shares upon compliance
with further provisions of the law regarding the rights of dissenting
shareholders.
SECTION 12. Waiver of Notice of meetings of Shareholders. Notice of a meeting of
the shareholders need not be given to any shareholder who signs a Waiver of
Notice either before or after the meeting. Attendance of a shareholder at a
meeting shall constitute a waiver of notice of such meeting and waiver of any
and all objections to the place of the meeting, the time of the meeting, the
manner in which it has been called or convened, or the matters considered at a
meeting, except when a shareholder states, at the beginning of the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened, or except when a shareholder objects to considering a
particular matter that is not within the purposes described in the meeting
notice.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the shareholders need be specified in any written Waiver of
Notice of such meeting.
49
ARTICLE II
Directors
SECTION 1. Function. All corporate powers shall he exercised by or under the
authority of, and the business and affairs of the Corporation shall be managed
under the direction of the Board of Directors.
SECTION 2. Qualification. Directors must be natural persons who are 18 years of
age or older, but need not be residents of this state or shareholders of this
Corporation.
SECTION 3. Compensation. The Board of Directors shall have authority to fix the
compensation of directors.
SECTION 4. Duties of Directors. A director 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:
(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 person's professional or expert
competence; or
(c) a committee of the Board upon which he does not serve, duly designated in
accordance with a provision of the Certificate of Incorporation or the By-laws,
as to matters within its designated authority, which committee the director
reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
In discharging his duties, a director may consider such factors as the director
deems relevant, including the long term prospects and interests of the
Corporation and its shareholders, and the social, economic, legal, or other
effects of any action on the employees, suppliers, customers of the Corporation
or its subsidiaries, the communities and society inn which the Corporation or
its subsidiaries operate, and the economy of the state and the nation.
A person who performs his duties in compliance with this section shall have no
liability by reason of being or having been a director of the Corporation.
SECTION 5. Presumption of Assent. A director of the Corporation who is present
at a meeting of its Board of Directors or a committee of the Board of Directors
at which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless (a) he objects at the beginning of the
meeting (or promptly upon his arrival) to holding it or transacting specified
business at the Meeting; or (b) he votes against such action or abstains from
voting in respect thereto.
50
SECTION 6. Number. Except as may otherwise be provided pursuant to the
Certificate of Incorporation in connection with rights to elect directors which
may be granted to the holders of any series of Preferred Stock, the number of
directors which shall constitute the whole Board shall be fixed from time to
time exclusively pursuant to a resolution adopted by a majority of the Board of
Directors. At each annual meeting of shareholders, commencing with the 1997
annual meeting, (I) directors elected to succeed those directors whose terms
shall expire shall be elected for a term of office to expire at the succeeding
annual meeting of shareholders after their election, each director to hold
office until his or her successor shall have been duly elected and qualified,
and (ii) if authorized by a resolution of the Board of Directors, directors may
be elected to fill any vacancy on the Board of Directors, regardless of how such
vacancy shall have been created.
SECTION 7. Election of Directors. Except as may otherwise be provided pursuant
to the Certificate of Incorporation in connection with the rights to elect
directors under specified circumstances which may be granted to the holders of
any series of Preferred Stock, and except as otherwise provided pursuant to
Section 8 of this Article II, directors shall be elected by shareholders of the
Corporation. Except as otherwise provided by applicable law, at each election
the persons receiving the greatest number of votes, up to the number of
directors then to be elected, shall be the persons then elected. Each director
shall serve until his or her successor is elected and qualified or until his or
her death, resignation or removal. The election of directors is subject to any
provisions relating thereto contained in the Certificate of Incorporation.
SECTION 8. Vacancies. Except as may otherwise be provided pursuant to the
Certificate of Incorporation in connection with rights to elect additional
directors under specified circumstances which may be granted to the holders of
any series of Preferred Stock, newly created directorships resulting from any
increase in the number of directors, or any vacancies on the Board of Directors
resulting from death, resignation, removal or other causes, shall be filled
solely by the affirmative vote of a majority of the remaining directors then in
office, even though less than a quorum of the Board of Directors. Any director
elected in accordance with the preceding sentence shall hold office until such
director's successor shall have been elected and qualified or until such
director's death, resignation or removal, whichever first occurs. No decrease in
the number of directors constituting the Board shall shorten the term of any
incumbent director.
SECTION 9. Resignation of Directors. Any director of the Corporation may resign
at any time by giving written notice to the Chairman of the Board or to the
Secretary of the Corporation. The resignation of any director shall take effect
at the time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 10. Removal of Directors. Subject to the right to elect directors under
specified circumstances which may be granted pursuant to the Certificate of
Incorporation to the holders of any series of Preferred Stock and unless
otherwise provided by law, any director may be removed from office without cause
only by the affirmative vote of the holders of at least 66 2/3% of the voting
power of the then outstanding shares of voting stock, voting together as a
single class.
SECTION 11. Quorum and Voting. A majority of the number of directors fixed by
these By-laws or by resolution of the Board of Directors shall constitute a
quorum for the transaction of business. 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.
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SECTION 12. Director Conflicts of Interest. No contract or other transaction
between this Corporation and one or more of its directors or any other
corporation, firm, association or entity in which one or more of the directors
are directors or officers or are financially interested, shall be either void or
voidable because of such relationship or interest or because such director or
directors are present at the meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction or
because his or her votes are counted for such purpose, if:
(a) the fact of such relationship or interest is disclosed or known to the Board
of Directors or committee which authorizes, approves or ratifies the contract or
transaction by a vote or consent sufficient for the purpose without counting the
votes or consents of such interested directors; or
(b) the fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) the contract or transaction is fair and reasonable as to the Corporation at
the time it is authorized by the Board, a committee or the shareholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors of a committee thereof which
authorizes, approves or ratifies such contract or transaction.
SECTION 13. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution, shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals
required by law to be approved by shareholders;
(b) designate candidates for the office of director, for purposes
of proxy solicitation or otherwise;
(c) fill vacancies on the Board of Directors or any committee
thereof;
(d) adopt, amend or repeal these By-laws or the Certificate of
Incorporation;
(e) authorize or approve the reacquisition of shares unless
pursuant to a general formula or method specified by the Board of Directors;
(f) adopt an agreement of merger or consolidation; or
(g) authorize or approve the issuance or sale of, or any contract
to issue or sell, shares or designate the terms of a series of a class of
shares, except that the Board of Directors, having acted regarding general
authorization for the issuance or sale of shares, or any contract therefor, and,
in the case of a series, the designation thereof, may, pursuant to a general
formula or method specified by the Board of Directors, by resolution or by
adoption of a stock option or other plan, authorize a committee to fix the terms
of any
52
contract for the sale of the shares and to fix the terms upon which such shares
may be issued or sold, including the price, the rate or manner of payment of
dividends, provisions for redemption, sinking fund, conversion, voting or
preferential rights, and provisions for other features of a class of shares, or
a series of a class of shares, with full power in such committee to adopt any
final resolution setting forth all the terms thereof and to authorize the
statement of the terms of a series for filing with the office of the Secretary
of State.
The Board of Directors, by resolution adopted in accordance with this section,
may designate one or more directors as alternate members of any such committee,
who may act in the place and stead of any absent member or members at any
meeting of such committee.
SECTION 14. Changes in Committees; Resignations, Removals and Vacancies. The
Board of Directors shall have power at any time to change or remove the members
of, to fill vacancies in, and to discharge any committee created pursuant to
these By-laws, either with or without cause. Any member of any such committee
may resign at any time by giving written notice to the Board or the Chairman of
the Board or the Secretary. Such resignation shall take effect upon receipt of
such notice or at any later time specified therein; and, unless otherwise
specified therein, acceptance of such resignation shall not be necessary to make
it effective. Any vacancy in any committee, whether arising from death,
resignation, an increase in the number of committee members or any other cause,
shall be filled by the Board of Directors in the manner prescribed in these
By-laws for the original appointment of the members of such committee.
SECTION 15. Place of Meetings. Regular and special meetings by the Board of
Directors may be held within or without the State of Nevada.
SECTION 16. Time, Notice and Call of Meetings. Regular meetings of the Board of
Directors shall be held at times and places specified by the Board of Directors
without notice of the date, time, place or purpose of the meeting. Written
notice of the date, time and place of special meetings of the Board of Directors
shall be given to each director at least 2 days before the meeting. The notice
need not describe the purpose of the special meeting. In addition to any other
regular meetings, a regular meeting of the Board of Directors shall be held,
without other notice than this by-law, immediately after and at the same place
as the annual meeting of shareholders.
Notice of a meeting of the Board of Directors need not be given to any director
who signs a waiver of notice either before or after the meeting. Attendance of a
director at a meeting shall constitute a waiver of notice of such meeting and
waiver of any and all objections to the place of the meeting, the time of the
meeting, or the manner in which it has been called or convened, except when a
director states, at the beginning of the meeting, any objection to the
transaction of business because the meeting is not lawfully called or convened.
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.
A majority of the directors present, whether or not a quorum exists, may adjourn
any meeting of the Board of Directors to another time and place. Notice of any
such adjourned meeting shall be given to the directors who were not present at
the time of the adjournment and, unless the time and place of the adjourned
meeting is announced at the time of the adjournment, to the other directors.
Meetings of the Board of Directors may be called by the Chairman of the Board,
by the President of the Corporation, or by any two directors.
53
Members of the Board of Directors may participate in meeting of such board by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in person at a
meeting.
SECTION 17. Action Without a Meeting. Any action required to be taken at a
meeting of the directors of the Corporation, or any action which may be taken at
a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action to be taken, signed by
all of the directors, or all the members of the committee, as the case may be,
is filed in the minutes of the proceedings of the Board or of the committee.
Such consent shall have the same effect as a unanimous vote and may be described
as such in any document.
SECTION 18. Advisory Directors. The Board of Directors shall have the authority
to elect a board of outside directors consisting of multiple members, which
number can be increased or decreased by a vote of the shareholders. The outside
directors shall not be shareholders or officers of the Corporation, and shall
not have voting powers, but rather are to act in the capacity of consulting and
advising the Board of Directors at their invitation.
ARTICLE III
Officers
SECTION 1. Officers. The officers of this Corporation shall consist of a
President, Chairman of the Board, a Secretary and a Treasurer, each of whom
shall be elected by the Board of Directors, and shall serve until their
successors are chosen and qualify. Such other officers and assistant officers
and agents as may be deemed necessary may be elected or appointed by the Board
of Directors from time to time.
Any two or more offices may be held by the same person. The failure to elect a
President, Chairman of the Board, Secretary or Treasurer shall not affect the
existence of this Corporation.
SECTION 2. Duties. The officers of this Corporation shall have the following
duties:
The Chairman shall be the chief executive of the Corporation overseeing all
management and directors and shall preside at all meetings of the shareholders,
unless a Chairman of the Board of Directors has been elected and is present, and
shall preside at all meetings of the Board of Directors. The President shall be
the chief operating officer of the Corporation, and shall have general and
active management of the business and affairs of the Corporation subject to the
directions of the Board of Directors.
The Chairman of the Board of Directors shall preside at all meetings of the
Board of Directors.
The Secretary shall have custody of, and maintain, all the corporate records
except the financial records. He or she shall have the authority to execute any
and all documents in connection with intellectual property matters, including,
but not limited to, Powers of Attorney, Appointment of Resident Agent forms and
any other documents which are required in connection with the intellectual
property matters of the
54
Corporation, and shall prepare the minutes of all meetings of the shareholders
and Board of Directors, shall authenticate records of the Corporation; shall
send all notices of meetings out, and shall perform such other duties as may be
prescribed by the Board of Directors or the President.
The Treasurer shall have custody of all corporate funds and financial records,
shall keep full and accurate accounts of receipts and disbursements and render
accounts thereof at the annual meetings of shareholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
SECTION 3. Removal of officers. Any Officer or agent elected or appointed by the
Board of Directors may be removed by the Board at any time with or without
cause.
Removal of any officer shall be without prejudice to the contract rights, if
any, of the person so removed; however, election or appointment of an officer or
agent shall not of itself create contract rights.
SECTION 4. Resignation of Officers. An officer may resign at any time by
delivering notice to the Corporation. A resignation is effective when the notice
is delivered unless the notice specifies a later effective date. If a
resignation is made effective at a later date and the Corporation accepts the
future effective date, the Board of Directors may fill the pending vacancy
before the effective date if the Board of Directors provides that the successor
does not take office until the effective date.
ARTICLE IV
Stock Certificates
SECTION 1. Issuance. Every holder of shares in this Corporation shall be
entitled to have a certificate, representing all shares to which he is entitled.
The Board of Directors may authorize shares to be issued for consideration
consisting of any tangible or intangible property or benefit to the Corporation,
including cash, promissory notes, services performed, promises to perform
services evidenced by a written contract, or other securities of the
Corporation.
Before the Corporation issues shares, the Board of Directors must determine that
the consideration received for shares to be issued is adequate. The
determination by the Board of Directors is conclusive insofar as the adequacy of
consideration for the issuance of shares relates to whether the shares are
validly issued, fully paid and nonassessable. When it cannot be determined that
outstanding shares are fully paid and nonassessable, there shall be a conclusive
presumption that such shares are fully paid and nonassessable if the Board of
Directors makes a good faith determination that there is no substantial evidence
that the full consideration for such shares has not been paid.
When the Corporation receives the consideration for which the Board of Directors
authorized the issuance of shares, the shares issued therefor are fully paid and
nonassessable. Consideration in the form of a promise to pay money or a promise
to perform services is received by the Corporation at the time of the making of
the promise unless the agreement specifically provides otherwise.
SECTION 2. Form. Certificates representing shares in this Corporation shall be
signed by the President or any vice president and the Secretary or any assistant
secretary and may be sealed with the seal of this Corporation or a facsimile
thereof . The signatures of the President or any vice president and the
Secretary or any assistant secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or registrar, other than the
Corporation itself or an employee of the Corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be
55
such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer at the date of its
issuance.
If this Corporation is authorized to issue shares of more than one class or more
than one series of any class, every certificate representing shares issued by
this Corporation shall set forth or fairly summarize upon the face or back of
the certificate, or shall state that the Corporation will furnish any
shareholder upon request and without charge a full statement of, the
designations, preferences, limitations and relative rights of the shares of each
class or series authorized to be issued, and the variations in the relative
rights and preferences between the shares of each series so far as the same have
been fixed and determined, and the authority of the Board of Directors to fix
and determine relative rights and preferences of subsequent series.
Every certificate representing shares which are restricted as to the sale,
disposition or other transfer of such shares shall state that such shares are
restricted as to transfer and shall set forth or fairly summarize upon the
certificate, shall state that the Corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the face thereof: the name
of the Corporation; that the Corporation is organized under the laws of the
State of Nevada, the name of the person or persons to whom issued; the number
and class of shares; and the designation of the series, if any, which such
certificate represents.
SECTION 3. Transfer of Stock. Transfer of shares of the Corporation shall be
made only on the stock transfer books of the Corporation by the holder of record
thereof or by his legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation, and on
surrender for cancellation of the certificate of such shares. The person in
whose name shares stand on the books of the Corporation shall be deemed by the
Corporation to be the owner thereof for all purposes.
SECTION 4. Lost, Stolen, or Destroyed Certificates. The Corporation shall issue
a new stock certificate in the place of any certificate previously issued if the
holder of record of the certificate (a) makes proof in affidavit form that it
has been lost, destroyed or wrongfully taken; (b) requests the issue of a new
certificate before the Corporation has notice that the certificate has been
acquired by a purchaser for value in good faith and without notice of any
adverse claim; (c) gives bond in such form as the Corporation may direct to
indemnify the Corporation, the transfer agent and registrar against any claim
that may be made on account of the alleged loss, destruction or theft of a
certificate; and (d) satisfies any other reasonable requirements imposed by the
Corporation.
ARTICLE V
Contracts, Loans, Checks and Deposits
SECTION 1. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.
56
SECTION 2. Loans. No loans shall be contracted on behalf of the Corporation and
no evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the Board of Directors. Such authority may be general or confined
to specific instances.
SECTION 3. Checks, Drafts, etc. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by such officer or officers, agent or agents, of
the Corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.
SECTION 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.
ARTICLE VI
Books and Records
SECTION 1. Books and Records. The Corporation shall keep as permanent records,
in accordance with applicable law, minutes of all meetings of its shareholders
and Board of Directors, a record of all actions taken by the shareholders or
Board of Directors without a meeting, a record of all actions taken by a
committee of the Board of Directors in place of the Board of Directors on behalf
of the Corporation, and such books or records and accounts as may be necessary
for the proper conduct of the business of the Corporation.
SECTION 2. Inspection of Books and Records. The Board of Directors and, unless
otherwise specified by the Board, the Chairman of the Board and the President
shall, subject to applicable law, have the sole power to determine from time to
time whether and to what extent and at what times and places and under what
conditions and regulations the accounts, books and records of the Corporation,
or any of them, shall be open to the inspection of the shareholders; and, except
as specifically conferred by law, no shareholder shall have, any right to
inspect any account, book, record or document of the Corporation, unless and
until authorized to do so by the Board or, unless otherwise specified by the
Board, by order of the Chairman of the Board or by the President.
ARTICLE VII
Distributions, Share Dividends and Share Options
SECTION 1. Distributions. The Board of Directors of this Corporation may, from
time to time, authorize and the Corporation may pay distributions to the
shareholders. A distribution is a direct or indirect transfer of money or other
property (except the Corporation's own shares) or incurrence of indebtedness by
the Corporation to or for the benefit of the shareholders in respect of any of
its shares. A distribution may be in the form of a declaration or payment of a
dividend; a purchase, redemption, or other acquisition of shares; a distribution
of indebtedness; or otherwise.
No distribution may be made if, after giving it effect:
(a) the Corporation would not be able to pay its debts as they become
due in the usual course of business; or
57
(b) the Corporation's total assets would be less than the sum of
its total liabilities plus the amount that would be needed, if the Corporation
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. If the Board of Directors does
not fix the record date for determining shareholders entitled to a distribution
(other than one involving a purchase, redemption, or other acquisition of the
Corporation's shares), it is the date the Board of Directors authorizes the
distribution.
The Board of Directors may base a determination that a distribution is not
prohibited either on financial statements prepared on the basis of accounting
practices and principles that are reasonable in the circumstances or on a fair
valuation or other method that is reasonable in the circumstances. In the case
of any distribution based upon such a valuation, each such distribution shall be
identified as a distribution based upon current valuation of assets, and the
amount per share paid on the basis of such valuation shall be disclosed to the
shareholders concurrent with their receipt of the distribution.
SECTION 2. Share Dividends. Unless the Certificate of Incorporation provides
otherwise, shares may be issued pro rata and without consideration to the
Corporation's shareholders or to the shareholders of one or more classes or
series. An issuance of shares under this section is a share dividend.
Shares of one class or series may not be issued as a share dividend in
respect of shares of another class or series unless:
(a) the Certificate of Incorporation so authorizes;
(b) a majority of the votes entitled to be cast the class or
series to be issued approves the issue; or
(c) there are no outstanding shares of the class or series to be
issued.
If the Board of Directors does not fix the record date for determining
shareholders entitled to a share dividend, it is the date the Board of Directors
authorizes the share dividend.
SECTION 3. Share Options. Unless the Certificate of
Incorporation provides otherwise, the Corporation may issue rights, options or
warrants for the purchase of its shares. The Board of Directors shall determine
the terms upon which the rights, options or warrants are issued, their form and
content, and the consideration for which the shares are to be issued.
The terms and conditions of stock rights and options which are
created and issued by the Corporation, or its successor, and which entitle the
holders thereof to purchase from the Corporation shares of any class or classes,
whether authorized but unissued shares, treasury shares or shares to be
purchased or acquired by the Corporation, may include restrictions or conditions
that preclude or limit the exercise, transfer, receipt or holding of such rights
or options by any person or persons, including any person or persons owning or
offering to acquire a specified number or percentage of the outstanding common
shares or other securities of the Corporation, or any transferee or transferees
of any such person or persons, or that invalidate or void such rights or options
held by any such person or persons or any such transferee or transferees.
58
ARTICLE VIII
Corporate Seal
The Board of Directors shall provide a corporate seal which shall have inscribed
thereon the name of the Corporation and such other words and figures and in such
design as may be prescribed by the Board of Directors, and may be facsimile,
engraved, printed or an impression, or other type seal.
ARTICLE IX
Fiscal Year
The fiscal year of the Corporation shall end on the 31st day of August,
or by resolution, determined by the Board of Directors.
ARTICLE X
Indemnification of Directors,
Officers, Employees and Agents
SECTION 1. Action Against Party Because of Corporate Position. The Corporation
may indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, partner, officer, employee or
agent of another Corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees inclusive of any
appeal), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such claim, action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
unlawful. The termination of any claim, action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
SECTION 2. Action by or in the Right of Corporation. The Corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed claim, action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, partner, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees inclusive of any
appeal) actually and reasonably incurred by him in connection with the defense
or settlement of such claim, action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Corporation and except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that a court of competent jurisdiction
(the "Court") in which such claim, action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court shall deem proper.
59
SECTION 3. Reimbursement if Successful. To the extent that a director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any claim, action, suit or proceeding referred to in
Sections 1 or 2 of this Article X, or in defense of any claims, issue or matter
therein, he shall be indemnified against expenses (including attorneys fees
inclusive of any appeal) actually and reasonably incurred by him in connection
therewith, notwithstanding that he has not been successful (on the merits or
otherwise ) on any other claim, issue or matter in any such claim, action, suit
or proceeding.
SECTION 4. Authorization. Any indemnification under Sections 1 and 2 of this
Article X (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Sections 1 and 2. Such
determination shall be made (a) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (c) by the shareholders.
SECTION 5. Advanced Reimbursement. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this Article.
SECTION 6. Indemnification Not Exclusive. The indemnification provided by this
Article shall be deemed exclusive of any other rights to which those indemnified
may be entitled under any statute, rule of law, provision of the Certificate of
Incorporation, by-law, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity, while holding such office, and 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. Where such other provision provides broader rights of indemnification
than these by-laws, said other provision shall control.
SECTION 7. Insurance. The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, partner, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article.
60
ARTICLE XI
Amendment
Except as otherwise provided herein, these By-laws may be altered, amended or
repealed or new by-laws may be adopted by the shareholders or by the Board of
Directors at any regular meeting of the shareholders or of the Board of
Directors or at any special meeting of the shareholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new
By-laws be contained in the notice of such special meeting; provided, however,
that in the case of amendments by shareholders, notwithstanding any other
provisions of those By-laws or any other provision of law which might otherwise
permit a lesser vote or no vote, but in addition to any affirmative vote of the
holders of any particular class or series of the capital stock required by law,
the Certificate of Incorporation or these By-laws, the affirmative vote of the
holders of at least 66 2/3% of all then outstanding shares of voting stock of
the Corporation, voting together as a single class, shall be required to alter,
amend or repeal any provision of these By-laws.
ARTICLE XII
Emergency By-laws
SECTION 1. Emergency By-laws. The Board of Directors may adopt by-laws to be
effective only in an emergency. An emergency for the purposes of this section if
a quorum of the Corporation's directors cannot readily be assembled because of
some catastrophic event. The emergency by-laws, which are subject to amendment
or repeal by the shareholders may make all provisions necessary for managing the
Corporation during an emergency, including:
(a) procedures for calling a meeting of the Board of Directors;
(b) quorum requirements for the meeting; and
(c) designation of additional or substitute directors.
SECTION 2. Line of Succession. The Board of Directors, either before, or during
such emergency, may provide, and from time to time modify, lines of succession
in the event that during such emergency any or all officers or agents of the
Corporation are for any reason rendered incapable of discharging their duties.
SECTION 3. Governing By-laws. All provisions of these By-laws consistent with
the emergency by-laws remain effective during the emergency. The emergency
by-laws are not effective after the emergency ends.
SECTION 4. Effect of Corporation Action. Corporate action taken in good faith in
accordance with the emergency are subject to amendment or repeal by the
shareholders, may make all provisions necessary for managing the Corporation
during an emergency, including:
(a) procedures for calling a meeting of the Board of Directors;
(b) quorum requirements for the meeting; and
(c) designation of additional or substitute directors.
SECTION 2. Line of Succession. The Board of Directors, either before or during
such emergency, may provide, and from time to time modify, lines of succession
in the event that during such emergency any or all officers or agents of the
Corporation are for any reason rendered incapable of discharging their duties.
61
SECTION 3. Governing By-laws. All provisions of these By-laws consistent with
the emergency by-laws remain effective during the emergency. The emergency
by-laws are not effective after the emergency ends.
SECTION 4. Effect of Corporate Action. Corporate action taken in good faith in
accordance with the emergency by-laws;
(a) binds the Corporation; and
(b) may not be used to impose liability on a corporate director,
officer, employee or agent.
CERTIFICATE OF SECRETARY
I, the undersigned, do hereby certify:
1. That I am the duly elected and acting Secretary/Treasurer of K-1
BUILDERS, INC. a Nevada Corporation: and
2. That the foregoing By-laws, comprising sixteen (16) pages, constitute
the By-laws of said Corporation as duly adopted at a meeting of the
Board of Directors thereof duly held on the 22nd day of August, 2000.
-------------------------------------
Xxxx Xxxxx Xxxxx, Secretary/Treasurer
THIS COMPLETES THE BY-LAWS OF THE CORPORATION.
62
SCHEDULE 2.13(b)
NexGen Vision, Inc.
K-1 Stockholder Consents and Resolution(s) of the Board of Directors
--------------------------------------------------------------------
CONSENT RESOLUTION IN LIEU OF SPECIAL MEETING OF
THE BOARD OF DIRECTORS OF K-1 BUILDERS, INC.
A Nevada Corporation
March 22, 2002
This Consent Resolution is adopted by Xxxx Xxxxx Xxxxx being the sole
director of K-1 Buildings, Inc., in lieu of a special meeting of the Board of
Directors of the corporation, effective on March 22, 2002.
WHEREAS, an offer has been made by Nextgen Vision Inc. to acquire
control of K-1 Builders, Inc.; and
WHEREAS, Xxxx Xxxxx Xxxxx as the sole director has accepted the terms
of this acquisition; and
WHEREAS, the Board of Directors, after evaluation of this offer, has
agreed to adopt a resolution accepting this acquisition offer.
NOW THEREFORE, IT IS HEREBY RESOLVED that the company enter into a
contract and agreement to complete this acquisition of K-1 Builders, Inc. by
Nextgen Vision, Inc.
Datged this 22nd day of March 2002.
/s/
--------------------------
Xxxx Xxxxx Xxxxx, Director
63
UNANIMOUS CONSENT OIN LIEW OF SPECIAL MEETING
OF THE BOARD OF DIRECTORS OF
K-1 BUILDERS, INC.
The undersigned, being all of the directors of K-1 Builders, Inc., a Nevada
corporation (the "Company"), hereby consent to and do adopt the following
resolution(s):
Plan of Reorganization
----------------------
RESOLVED, that the Company enter into an Agreement and Plan of
Reorganization, as attached hereto, and related transactions, with NexGen
Vision, Inc.
Cancellation of Shares
----------------------
RESOLVED, that the Company cancel the options for issuance of up to
10,000,000 shares of common stock, issued to Xxxx Xxxxx Xxxxx.
IN WITNESS WHEREOF, the undersigned have executed this document to be
effective this 28th day of March, 2002.
/s/ Xxxx Xxxxx Xxxxx
--------------------------------
Xxxx Xxxxx Xxxxx, sole director
64
CONSENT TO CANCEL SHARES
The undersigned hereby consents to the cancellation of 10,000,000
options of K-1 Builders, Inc., issued in my name.
DATED: March 28, 2002
/s/
---------------------------
Xxxx Xxxxx Xxxxx
65
MAJORITY CONSENT IN LIEU OF SPECIAL MEETING
OF THE SHAREHOLDERS OF
K-1 BUILDERS, INC.
The undersigned, being the majority shareholder(s) of K-1 Builders,
Inc., a Nevada corporation (the "Company"), hereby consent to and take the
following action:
WHEREAS, the Board of Directors have voted in favor of entering into an
Agreement and Plan of Reorganization, and related transactions, with NexGen
Vision, Inc.
THEREFORE, the undersigned shareholder(s) owning a majority of the
shares outstanding of the Company, hereby consent and authorize the Company to
enter into the Agreement and Plan of Reorganization with NexGen Vision, Inc.,
including all transactions necessary to effectuate such reorganization.
IN WITNESS WHEREOF, the undersigned have executed this document to be
effective this 28 day of March, 2002.
/s/
------------------------------
Xxxx Xxxxx Xxxxx
Representing 1,350,000 shares
/s/
------------------------------
Xxxxxx Xxxxxx
Representing 303,750 shares
/s/
------------------------------
Xxxxxxxxx Xxxxxxxxx
Representing 315,000 shares
66
SCHEDULE 2.13(c)
NexGen Vision, Inc.
Material Adverse Change
None.
67
SCHEDULE 2.13(e)
NexGen Vision, Inc.
K-1 Federal Tax Returns for Years Ending 2000 and 2001
68
| | OMB No. 1545-0123
| |---------------------
Form 1120 | U. S. Corporation Income Tax Return |
| For calendar year 1999 or tax year beginning 9/01/00 , ending 8/31/01 |
| ---------- ---------- | 2000
Department of the Treasury | Instructions are separate, See page 1 for paperwork Reduction Act Notice. |
Internal Revenue Service | |
------------------------------------------------------------------------------------------------------------------------------------
A Check if a: |Use | | B. Employer identification number
1 Consolidated return [ ] |IRS | | 00-0000000
(attach Form 851) |label. | K-1 BUILDERS, INC. |------------------------------------------
2 Personal holding co. [ ] |Other- | 000 XXXXX XXXX., XXXXX 000 |X. Xxxx incorporated
(attach Sch. PH) |wise, | XXXXXXXX, XX 00000 | 8/22/2000
3. Personal service corp. |please | |------------------------------------------
as defined in |print | |D. Total assets (see page 6 of instructions)
Temporary Regs. |or type. | |
sec. 1.441-4T- | | |
see instructions [ ] | | |
---------------------------------------------------------------------------------------|
E Check applicable boxes: (1) [X] Initial return (2) [ ] Final return (3) [ ] Change |
of address| $ 5,731
------------------------------------------------------------------------------------------------------------------------------------
| 1a Gross receipts/sales | | b Less returns & allowances | | c Balance |1c| |
| | |--------------------------|---
| 2 Cost of goods sold (Schedule A, line 8) ............................................ |2 | |
| | |--------------------------|---
| 3 Gross profit. Subtract line 2 from line 1c ......................................... |3 | |
I | | |--------------------------|---
N | 4 Dividends (Schedule C, line 19)..................................................... |4 |
C | | |--------------------------|---
O | 5 Interest ........................................................................... |5 | |
M | | |--------------------------|---
E | 6 Gross rents......................................................................... |6 | |
| | |--------------------------|---
| 7 Gross royalties..................................................................... |7 | |
| | |--------------------------|---
| 8 Capital gain net income (attach Schedule D (Form 112)............................... |8 | |
| | |--------------------------|---
| 9 Net gain or (loss) from Form 4797, Part II line 18 (attach Form 4797)............... |9 | |
| | |--------------------------|---
| 10 Other income (see page 7 of instructions - attach schedule )........................ |10| |
| | |--------------------------|---
| 11 Total income. Add lines 3 through 10................................................ |11| |
------|-------------------------------------------------------------------------------------------|--|--------------------------|---
| 12 Compensation of officers (Schedule E, line 4)....................................... |12| |
| | |--------------------------|---
D | 13 Salaries and wages (less employment credits)........................................ |13| |
E | | |--------------------------|---
D | 14 Repairs and maintenance............................................................. |14| |
U | | |--------------------------|---
C | 15 Bad debts........................................................................... |15| |
T | | |--------------------------|---
I | 16 Rents............................................................................... |16| 5,470|
O | | |--------------------------|---
N | 17 Taxes and licenses.................................................................. |17| |
S | | |--------------------------|---
| 18 Interest............................................................................ |18| |
| | |--------------------------|---
| 19 Charitable contributions (see page 9 of instructions for 10% limitation)............ |19| |
| | |--------------------------|---
| 20 Depreciation (attach Form 4562).................. |20 | 412 | | | |
| |-------------|-- | | |
| 21 Less depreciation claimed on Schedule A and elsewhere on return |21a| | |21b| 412 |
|-------------|-- | |--------------------------|---
| 22 Depletion........................................................................... |22| |
| | |--------------------------|---
| 23 Advertising......................................................................... |23| |
| | |--------------------------|---
| 24 Pension, profit-sharing, etc. plans................................................. |24| |
| | |--------------------------|---
| 25 Employee benefit programs........................................................... |25| |
| | |--------------------------|---
| 26 Other deductions (attached schedule).......................STMT 1................... |26| 68,056 |
| | |--------------------------|---
| 27 Total deductions. Add lines 12 through 26........................................... |27| 73,938 |
| | |--------------------------|---
| 28 Taxable income before net operating loss deduction and special deductions........... |28| -73,938 |
| Subtract line 27 from line 11 | |--------------------------|---
| 29 Less: a Net operating loss (NOL) deduction (see page 11 of instru) |29a| | | | |
| |-------------|----| | |
| b Special deductions (Schedule C, line 20).................. |29b| | |29c| |
------|------------------------------------------------------------------------|-------------|----| |--------------------------|---
| 30 Taxable income. Subtract line 29c from line 28....................................... |30| -73,938 |
T | | |--------------------------|---
A | 31 Total tax (Schedule J, line 11)..................................................... |31| 0 |
X | | |--------------------------|---
| 32 Payments: |
A | |
N | a 1999 overpayment credited to 2000..|32a| | | |
D | |--------------------- |
| b 2000 estimated tax payments....... |32b| | | |
P | |--------------------- |
A | c Less 2000 refund applied for...... |32c| | |d Bal |32d| | |
Y | on Form 4466 |--------------------- |---|------------|--- |
M | e Tax deposited with Form 7004................................. |32e| | |
E | |----------------|--- |
N | f Credit for tax paid on undistributed capital gains (attach... |32f| | |
T | Form 2439) |----------------|--- |
S | g Credit for Federal tax on fuels (attach Form 4136 (see Instr) |32g| | |32h| |
| |----------------|--- |---|--------------------------|---
| 33 Estimated tax penalty (see page 14 of Instructions). Check if Form 2220 is attached[ ] 33| |
| |---|--------------------------|---
| 34 Tax due. If line 32h is smaller than the total of lines 31 and 33, enter amount owed | 34| |
| |---|--------------------------|---
| 35 Overpayment. If line 32h is larger than the total of lines 31 and 33, enter amount | 35| |
| overpaid |---|--------------------------|---
| 36 Enter amount of line 35 you want: Credited to 2001 estimated tax | Refunded | 36| |
--------|---------------------------------------------------------------------------------------------------------------------------
| Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and
| statements, and to the best of my knowledge and belief, it is true, correct and complete. Declaration of preparer
| (other than taxpayer) is based on all information of which preparer has an knowledge.
Sign |
Here | Signature
| of officer /s/ XXXX XXXXX XXXXX Date 10/30/01 Title President
--------|---------------------------------------------------------------------------------------------------------------------------
Paid | Preparer's | Date |Check if self- |Preparer's SSN or PTIN
Pre- | Signature /s/ XXXXX XXXXXXXX | 10/30/01 |employed [ ] | P00143604
parer's |------------------------------------------------------|-------------|----------------------|-------------------------------
Use | | EIN 00-0000000
Only |Firm's name (or Xxxxxxx, Xxxx & Co. |----------------------------------------------
|yours, if self-employed 0000 X. Xxxxxx-Xxxxxxxx Xx. |
|and address Xxxx Xxxx Xxxx, XX 00000-0000 |Phone no. 000-000-0000
------------------------------------------------------------------------------------------------------------------------------------
69
Form 1120 (2000) K-1 BUILDERS, INC. 00-0000000 Page 2
------------------------------------------------------------------------------------------------------------------------------------
Schedule A | Cost of Goods Sold (See page 12 of insturctions.)
------------------------------------------------------------------------------------------------------------------------------------
1 Inventory at beginning of year....................................................... | 1| |
| |--------------------------|---
2 Purchases............................................................................ | 2| |
| |--------------------------|---
3 Cost of labor........................................................................ | 3| |
| |--------------------------|---
4 Additional section 263A costs (attach schedule)...................................... | 4| |
| |--------------------------|---
5 Other costs (attach schedule)........................................................ | 5| |
| |--------------------------|---
6 Total. Add lines 1 through 5........................................................ | 6| |
| |--------------------------|---
7 Inventory at end of year............................................................. | 7| |
| |--------------------------|---
8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on line 2, page 1... | 8| |
| |--------------------------|---
9a Check all methods used for valuing closing inventory:
(i) [ ] Cost as described in Regulations section 1.471-3
(ii) [ ] Lower of cost or market as described in Regulations section 1.471-4
(iii) [ ] Other (Specify method used and attached explanation.)
-----------------------------------------------------------
b Check if there was a writedown of subnormal goods as described in Regulations section 1.471-2(c).....................[ ]
c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970).............[ ]
d If the LIFO inventory method was used for this tax year, enter percentage (or
amounts) of closing inventory computed under LIFO....................................... |9d| |
|--------------------------|---
e If property is produced or acquired for resale, do the rules of section 263A apply to the corporation.. [ ] Yes [ ] No
f Was there any change in determining quantities, cost or valuations between opening and
and closing inventory? If "Yes," attach explanation................................................... [ ] Yes [ ] No
------------------------------------------------------------------------------------------------------------------------------------
Schedule C Dividends and Special Deductions (see page 15 of instructions. | (a) Dividends | |(c) Special deductions
| received | (b)% | (a) x (b)
-------------------------------------------------------------------------------- |----------------|------|----------------------
1 Dividends from less-than-20%_owned domestic corporations that are subject to | | |
the 70% deduction (other than debt-financed stock).............................. | | 70 |
|----------------|------|----------------------
2 Dividends from 20%-or-more-owned domestic corporations that are subject | | |
to the 80% deduction (other than debt-financed stock)........................... | | 80 |
|----------------|------|----------------------
3 Dividends on debt-financed stock of domestic and foreign corporations | | see |
(section 246A).................................................................. | |Instr.|
|----------------|------|----------------------
4 Dividends on certain preferred stock of less-than-20%_owned public utilities.... | | 42 |
|----------------|------|----------------------
5 Dividends on certain preferred stock of less-than-20%_owned public utilities.... | | 48 |
|----------------|------|----------------------
6 Dividends from less-than-20%-owned foreign corporations and certain | | |
FSCs that are subject to the 70% deduction...................................... | | 70 |
|----------------|------|----------------------
7 Dividends from less-than-20%-owned foreign corporations and certain | | |
FSCs that are subject to the 80% deduction...................................... | | 80 |
|----------------|------|----------------------
8 Dividends from wholly owned foreign subsidiaries subject to the 100% | | |
deduction (section 245(b)....................................................... | | 100 |
|----------------|------|----------------------
9 Total. Add lines 1 through 8. See page 14 of instructions for limitation....... | | |
|----------------|------|----------------------
10 Dividends from domestic corporations received by a small business investment | | |
company operating under the Small Business Investment Act of 1958............... | | 100 |
|----------------|------|----------------------
11 Dividends from certain FSCs that are subject to the 100% deduction | | |
(section 245(c)(1))............................................................. | | 100 |
|----------------|------|----------------------
12 Dividends from affiliated group members subject to the 100% deduction | | |
(section 243(a)(3).............................................................. | | 100 |
|----------------|------|----------------------
13 Other dividends from foreign corporations not included on lines 3, 6, | |
7, 8, or 11..................................................................... | |
|----------------|-----------------------------
14 Income from controlled foreign corporations under subpart F | |
(attach Form(s) 5471)........................................................... | |
|----------------|
15 Foreign dividend gross-up (section 78)................................... | |
|----------------|
16 IC-DISC and former DISC dividends not included on lines 1, 2, or 3 | |
(section 246(d)................................................................. | |
|----------------|
17 Other dividends................................................................. | |
|----------------|
18 Deduction for dividends paid on certain preferred stock of public utilities..... | |
| |-----------------------------
19 Total dividends. Add lines 1 through 17. Enter here and on line 4, page 1...... | |
|----------------|-----------------------------
20 Total special deductions. Add lines 9, 10, 11, 12, and 18. Enter here and | |
on line 29b, page 1............................................................................. |-----------------------------
------------------------------------------------------------------------------------------------------------------------------------
Schedule E Compensation of Officers (See instructions for line 12, page 1.)
Note: Complete Schedule E only if total receipts (line 1a plus lines 4 through 10 on page 1, Form 1120) are
$500,000 or more.
------------------------------------------------------------------------------------------------------------------------------------
(c) Percent Percent of corporation
of time stock owned
devoted to --------------------------- (f) Amount of
(a) Name of Officer (b)Social security number business (d) Common (e)Preferred compensation
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
| | % | % | %|
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
| | % | % | %|
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
| | % | % | %|
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
| | % | % | %|
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
| | % | % | %|
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
2 Total compensation of officers..........................................................................|
|---------------------
3 Compensation of officers claimed on Schedule A and elsewhere on return..................................|
|---------------------
4 Subtract line 3 from line 2. Enter the result here and on line 12, page 1...............................|
--------------------------------------------------------------------------------------------------------------|---------------------
DAA Form 1120 (2000)
70
Form 1120 (2000) K-1 BUILDERS, INC. 00-0000000 PAGE 3
----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE J TAX COMPUTATION (SEE PAGE 17 OF INSTRUCTIONS.)
----------------------------------------------------------------------------------------------------------------------------------
1 Check if the corporation is a member of a controlled group (see sections 1561 and 1563 ................. o [ ] | |
IMPORTANT: Members of a controlled group, see instructions on page 17. | |
2a If the box on line 1 is checked, enter the corporation's share of the $50,000, $25,000, and $9,925,000 taxable | |
income brackets (in that order): | |
(1) | | (2) | | (3)|$ | |
---------------- -------------------- ---------------------------
b Enter the corporation's share of: (1) Additional 5% tax (not more than $11,750) |$ | |
---------------------------
(2) Additional 3% tax (not more than $100,000) |$ | |
---------------------------
3 Income tax. Check if a qualified personal service corporation under section 448(d)(20 (SEE PAGE 17) .... o [ ] | 3 | 0
-------------
4 Alternative minimum tax (attach Form 4626 .......................................................................| 4 |
-------------
5 Add lines 3 and 4 ...............................................................................................| 5 | 0
-------------
6a Foreign tax credit (attach Form 1118) ............................................. | 6a|
-----------------------------| |
b Possessions tax credit (attach Form 5735 .......................................... | 6b|
-----------------------------| |
c Check: [ ] Nonconventional source fuel credit [ ] QEV credit (att. Form 8834) ... | 6c|
-----------------------------| |
d General business credit. Enter here and check which forms are att.: [ ] 3800 | |
[ ] 3468 [ ] 5884 [ ] 6478 [ ] 6765 [ ] 8586 [ ] 8830 [ ] 8826 | |
[ ] 8835 [ ] 8844 [ ] 8845 [ ] 8846 [ ] 8820 [ ] 8847 [ ] 8861 | 6d|
-----------------------------| |
e Credit for prior year minimum tax (attach Form 8827) .............................. | 6e|
-----------------------------| |
f Qualified zone academy bond credit (attach Form 8860) ............................. | 6f|
-----------------------------| |
7 Total credits. Add lines 6a through 6f ..........................................................................| 7 |
-------------
8 Subtract line 7 from line 5 .....................................................................................| 8 |
-------------
9 Personal holding company tax (attach Schedule PH (Form 1120)) ...................................................| 9 |
--------------
10 Recapture taxes. Check if from [ ]Form 4255 [ ] Form 8611 .........................................|10 |
--------------
11 Total tax. Add lines 8 through 10. Enter here and on line 31, page 1 ............................................|11 | 0
--------------
----------------------------------------------------------------------------------------------------------------------------------
Schedule K | OTHER INFORMATION (SEE PAGE 19 INSTRUCTIONS.)
----------------------------------------------------------------------------------------------------------------------------------
1 Check method of accounting: a [ ] Cash |Yes|No | If "Yes," file Form 5452, Corporate Report of |Yes|No |
b [X] Accrual --------| Nondivident Distritutions. --------|
c [ ] Other (specify) o .................................| | | If this is a consolidated return, answer here | | |
2 See page 21 of the instructions and enter the: | | | for the parent corporation and on Form 851, | | |
a Business activity code no. o 233300 | | | Affiliations Schedule, for each subsidiary. | | |
............................ | | | | | |
b Business activity o CONSTRUCTION .....................| | | 7 At any time during the tax year, did one | | |
c Product or service o CONST SERVICE.....................| | | foreign person own, directly indirectly, at least| | |
3 At the end of the tax year, did the corporation own, | | | 25% of (a) the total voting or (b) the total | | |
directly or indirectly, 50% or more of the voting stock | | | value of all classes of stock of the | | |
of a domestic corporation? (For rules of attribution, | | | corporation? ................................... | | X |
see 267(c)) ..............................................| | X | |-------|
If "Yes," attach a schedule showing: (a) name and |-------| If "Yes," | | |
employer identification number (EIN), (b) percentage | | | a Enter percentage owned ......................... | | |
owned, and (c) taxable income or (loss) before NOL and | | | b Enter owner's country o ........................ | | |
special deductions of such corportion for the tax year | | | c The corporation may have to file Form 5472, | | |
ending with or within your tax year. | | | Information Return of a 25% Foreign-Owned U.S. | | |
4 Is the corporation a subsidiary in an affiliated | | | Trade or Business. | | |
group or a parent-subsidiary controlled group? ..........| | X | Enter number of Form 5472 attached o .......... |-------|
If "Yes." enter name and EIN of the parent |-------| 8 Check this box if the corporation issued publicly| | |
corporation o ..........................................| | | offered xxx instruments with original issue | | |
..........................................................| | | discount .......................... o [ ] | | |
5 At the end of the tax year, did any individual, | | | If checked, the corporation may have to file Form| | |
partnership, corporation, estate, or trust own, | | | 8281, information Return for Publicly Offered | | |
directly or indirectly, 50% or more of the | | | Original Issue Discount Instruments. | | |
corporation's voting stock? (For rules of attribution, | | X | 9 Enter the amount of tax-exempt interest received |-------|
see section 267(c).) .....................................|-------| or accrued during the tax year o $ ............. | | |
If "Yes," attach a schedule showing name and | | |10 Enter the number of shareholders at the end of | | |
identifying ..............................................| | | the tax year (if 75 or fewer) 54 ............ | | |
number. (Do not include any information already | | |11 If the corp. has an NOL for the tax year and is | | |
entered in 4 above.) o .. ...............................| | | electing to forego the carryback period, check | | |
6 During this tax year, did the corporation pay dividends | | | here .................................. o [ ] | | |
(other than stock dividends and distributions in exchange | | |12 Enter the available NOL carryover from prior tax | | |
for stock) in excess of the corporation's current and | | | years (Do not reduce it by any deduction on line | | |
accumulated earning and profits? (See sections 301 and | | | 29a). $ 48,100 ................................ | | |
316.) ....................................................| | X | |-------|
|-------|
NOTE: If the corporation, at any time during the tax year, had assets or operated a business in a foreign country or U.S.
possession, it may be required to attach Schedule N (Form 1120), Foreign Operations of U.S. Corporation to this return. See
Schedule N for details.
------------------------------------------------------------------------------------------------------------------------------------
71
Form 1120 (2000) K-1 BUILDERS, INC. 00-0000000 Page 4
-----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE L Balance Sheets per Books Beginning of tax year End of tax year
-----------------------------------------------------------------------------------------------------------------------------------
| a | b | c | d
-------------------------------------------------------------------------------
1 Cash ....................................... | | 16,900 | | 593
-------------------------------------------------------------------------------
2a Trade notes and accounts receivable ........ | | | |
-------------------------------------------------------------------------------
b Less allowance for bad debt ................ | | | |
-------------------------------------------------------------------------------
3 Inventories ................................ | | | |
-------------------------------------------------------------------------------
4 U.S. government obligations ................ | | | |
-------------------------------------------------------------------------------
5 Tax-exempt securities (see instructions .... | | | |
-------------------------------------------------------------------------------
6 Other current assets ....................... | | | |
-------------------------------------------------------------------------------
7 Loans to shareholders ...................... | | | |
-------------------------------------------------------------------------------
8 Mortgage and real estate loans ............. | | | |
-------------------------------------------------------------------------------
9 Other investments .......................... | | | |
-------------------------------------------------------------------------------
10a Buildings and other depreciable assets ..... | | | 5,550 |
-------------------------------------------------------------------------------
b Less accumalated depreciation .............. | | | 412 | 5,138
-------------------------------------------------------------------------------
11a Depletable assets .......................... | | | |
-------------------------------------------------------------------------------
b Less accumulated depletion ................. | | | |
-------------------------------------------------------------------------------
12 Land (net of any amortization .............. | | | |
-------------------------------------------------------------------------------
13a Intangible assets (amoritzable only) ....... | | | |
-------------------------------------------------------------------------------
b Less accumulated amortization .............. | | | |
-------------------------------------------------------------------------------
14 Other assets (attach sch.) ................. | | | |
-------------------------------------------------------------------------------
15 Total assets ............................... | | 16,900 | | 5,731
-----------------------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholder's Equity | | | |
-------------------------------------------------------------------------------
16 Accounts payable ........................... | | | | 131
-------------------------------------------------------------------------------
17 Mortgages, notes, bonds payable in less than | | | |
1 year ..................................... | | | |
-------------------------------------------------------------------------------
18 Other current liabilities STMT 2 ....... | | 20,000 | |
-------------------------------------------------------------------------------
19 Loans from shareholders .................... | | | |
-------------------------------------------------------------------------------
20 Mortgages, notes, bonds payable in 1 year | | | |
or more .................................... | | | |
-------------------------------------------------------------------------------
21 Other liabilities (att. sch.) .............. | | | |
-------------------------------------------------------------------------------
22 Capital stock: a Preferred stock .......... | | | |
-------------------------------------------------------------------------------
b Common stock ............. | 900 | 900 | 3,450 | 3,450
-------------------------------------------------------------------------------
23 Additional paid-in capital ................. | | 44,100 | | 124,988
-------------------------------------------------------------------------------
24 Retained earnings-Appropriated ............. | | | |
-------------------------------------------------------------------------------
25 Retained earnings-Unapprpriated ............ | | -48,100 | | -122,838
-------------------------------------------------------------------------------
26 Adjustments to S/H equity .................. | | | |
-------------------------------------------------------------------------------
27 Less costs of treasury stock ............... | | | |
-------------------------------------------------------------------------------
28 Total liabilities and shareholder's equity . | | 16,900 | | 5,731
-----------------------------------------------------------------------------------------------------------------------------------
NOTE: The corporation is not required to complete Schedules M-1 and M-2 if the total assets on line 15, col. (d) of Schedule L are
less than $25,000.
-----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE M-1 RECONCILIATION OF INCOME (LOSS) PER BOOKS WITH INCOME PER RETURN (See page 20 of Instructions.) |
-----------------------------------------------------------------------------------------------------------------| ----------------
1 Net income (loss) per books ................ | -74,738 | 7 Income recorded on books this year |
|-------------------| not included on this return |
2 Federal income tax ......................... | | (itemize): |
|-------------------| Tax-exempt |
3 Excess of capital losses over capital gains | | interest ......$ ................. |
| | |
4 Income subject to tax not recorded on books | | .................................. |-----------------
this year (itemize): ....................... | | |
| | .................................. |-----------------
............................................ | | |
| | 8 Deductions on this return not |
5 Expenses recorded on books this year not | | charged against book income this |
deducted on this return (itemize): | | year (itemize):................... |
a Depreciation .... $ ....................... | | |
b Contributions ... $ ....................... | | a Depreciation ... $.............. |
c Travel and | | b Contributions |
entertainment ... $ ................. 800 | | carryover $.............. |
| | ................................ |-----------------
............................................ | | ................................ |-----------------
| | ................................ |-----------------
............................................ | 800 | 9 Add lines 7 and 8................. |-----------------
| | |
6 Add lines 1 through 5 ...................... | -73,938 | 10 Income (line 28, page 1)-Line 6 less|
line 9 ........................... | -73,938
-----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE M-2 ANALYSIS OF UNAPPROPRIATED RETAINED EARNINGS PER BOOKS (LINE 25, SCHEDULE L)
-----------------------------------------------------------------------------------------------------------------------------------
1 Balance at begining of year ................ | -48,100 | 5 Distributions: a Cash .........
|-------------------| ------------------
2 Net income (loss) per books ................ | -74,738 | b Stock ........
|-------------------| ------------------
3 Other increases (itemize): ................. | | c Property .....
| | ------------------
............................................ | | 6 Other decreases (itemize): .......
| | ------------------
............................................ | | 7 Add lines 5 and 6 ................
| | ------------------
............................................ | | 8 Balance at end of year (lines 4
4 Add lines 1, 2, and 3 ...................... | -122,838 | less line 7)...................... -122,838
| -------------------
-----------------------------------------------------------------------------------------------------------------------------------
DAA fORM 1120 (2000)
72
Form 4562 Depreciation and Amoritization OMB No. 1545-0172
-----------------
Department of the Treasury (Including Information on Listed Property) 2000
Internal Revenue Service (99) > See separate instructions > Attach this form to your return Attachment
Sequence No. 67
Name(s) shown on return Identifying Number
K-1 BUILDERS, INC. 00-0000000
Business or activity to which this form relates
REGULAR DEPRECIATION
Part I Election to Expense Certain Tangible Property (Section 179)
Note: If you have any "listed property," complete Part V before you complete Part I.
1 Maximum dollar limitation. If an enterprise zone business, see page 2 of the instructions ............. 1 $20,000
2 Total cost of section 179 propety placed in service. See page 2 of the instructions ................... 2
3 Threshold cost of section 179 property before reduction in limitation ................................. 3 $200,000
4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- ...................... 4
5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-, If married
filiing separately, see page 2 of the instructions..................................................... 5
(a) Description of property (b) Cost (business use only) (c) Elected cost
6
7 Listed property. Enter amount from line 17 ................................... 7
8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 .................. 8
9 Tentative deduction. Enter the samller of line 6 or line 8 ............................................ 9
10 Carryover of disallowed deduction from 1999. See page 3 of the instructions ........................... 10
11 Business income limitation. Enter the smaller of business income (not less than zero or line 5
(see instruction)..... 11
12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11 ................. 12
13 Carryover of disallowed deduction to 2001. Add lines 9 and 10, less line 12 .. 13
Note: Do not use Part II or Part III below for listed property (automobiles, certain other vehicles, cellular telephones
certain computers, or property used for entertainment, recreation, or amusement), instead, use Part V for listed property.
Part II MACRS Depreciation for Assets Placed in Service Only During Your 2000 Tax Year (do not include listed property.)
Section A-General Asset Account Election
14 If you are making the election under section 168(i)(4) to group any assets placed in service during the tax year into one
or more general asset accounts, check this box. See page 3 of the instructions.......................................... [ ]
Section B-General Depreciation System (GDS)(See page 3 of the instructions.)
(a) Classification (b) Month and (c) Basis for depreciation (d) Recovery (e) Convention (f) Method (g) Depreciation
of property year placed in (business/investment use period deduction
service only-see instructions)
15a 3-year property
b 5-year property 550 5.0 HY S/L 55
c 7-year property 5,000 7.0 HY S/L 357
d 10-year property
e 15-year property
f 20-year property
g 25-year property 25 yrs. S/L
h Residential rental 27.5 yrs. MM S/L
property 27.5 yrs. MM S/L
I Nonresidential real 39 yrs. MM S/L
propety MM S/L
Section C-Alternative Depreciation System (ADS)(See page 5 of the instructions.)
16a Class life S/L
b 12-year 12 yrs. S/L
c 40-year 40 yrs. MM S/L
Part III Other Depreciation (Do not include listed property.)(See page 5 of the instruction.)
17 GDS and ADS deductions for assets placed in service in tax years beginning before 2000 ................ 17
18 Property subject ot section 168(f)(1) election ........................................................ 18
19 ACRS and other depreciation ........................................................................... 19
Part IV Summary (See page 6 of the instructions.)
20 Listed property. Enter amount from line 26 ............................................................ 20
21 Total. Add deductions from line 12, lines 15 and 16 in column (g), and lines 17 through 20. Enter
here and on the appropriate lines of your return. Partnerships and S corporations-see instructions .... 21 412
22 For assets shown above and placed in service during the current year,
enter the portion of the basis attributable to section 263A costs ............... 22
For paperwork Reduction Act Notice, see page 9 of the Instructions. Form 4562 (2000)
DAA THERE ARE NO AMOUNTS FOR PAGE 2
73
38999 K-1 BUILDERS, INC
00-0000000 Federal Statements
FYE: 8/31/2001
Statement 1 - Form 1120, Page 1, LIne 26 - Other Deductions
-----------------------------------------------------------
Description Amount
----------- ------
GENERAL & ADMINISTRATIVE $ 56,827
INSURANCE 237
UTILITIES AND TELEPHONE 503
VEHICLE EXPENSE 3,933
LEGAL AND ACCOUNTING 4,880
OFFICE SUPPLIES 652
POSTAGE AND SUPPLIES 224
50% OF MEALS & ENTERTAINMENT 800
--------
TOTAL $ 68,056
========
74
38999 K-1 BUILDERS, INC
00-0000000 Federal Statements
FYE: 8/31/2001
Statement 2 - Form 1120, Page 4, Schedule L., Line 18-Other Current Liabilities
-------------------------------------------------------------------------------
Beginning End
Description of Year of Year
----------- ------- -------
SHAREHOLDER ADVANCES $ 20,000 $
-------- -------
TOTAL $ 20,000 $ 0
======== =======
75
38999 K-1 BUILDERS, INC
00-0000000 Federal Asset Report
FYE: 8/31/2001 QTR: 8/31/2001 Regular Depreciation
Date Bus
Asset Description In Service Cost % 179 Basis Per Conv Meth Prior Current
----- ----------- ---------- ---- - --- ------ --- ---- ---- ------ -------
5-year GDS Property
-------------------
2 COUCH 5/29/01 550 550 5 HY S/L 0 55
----- ----- ----- -----
550 550 0 55
===== ===== ===== =====
7-year GDS Property
-------------------
1 COPY MACHINE 1/22/01 5,000 5,000 7 HY S/L 0 357
----- ----- ----- -----
5,000 5,000 0 357
===== ===== ===== =====
Grand Totals 5,550 5,550 0 412
Less: Dispositions 0 0 0 0
----- ----- ----- -----
Net Grand Totals 5,550 5,550 0 412
===== ===== ===== =====
76
38999 K-1 BUILDERS, INC
00-0000000 Federal Statements
FYE: 8/31/2001
Schedule L - Additional Paid-in Capital
Beginning End
Description of Year of Year
----------- ------- -------
$ 44,100 $
ADDITIONAL PAID-IN CAPITAL 124,988
-------- ---------
TOTAL $ 44,100 $ 124,988
======== =========
77
| | OMB No. 1545-0123
| |---------------------
Form 1120 | U. S. Corporation Income Tax Return |
| For calendar year 1999 or tax year beginning 9/01, 1999, ending 8/31, 2000 |
| ---------- ---------- | 1999
Department of the Treasury | Instructions are separate, See page 1 for paperwork Reduction Act Notice. |
Internal Revenue Service | |
------------------------------------------------------------------------------------------------------------------------------------
A Check if a: |Use | | B. Employer identification number
1 Consolidated return [ ] |IRS | | 00-0000000
(attach Form 851) |label. | K-1 BUILDERS, INC. |------------------------------------------
2 Personal holding co. [ ] |Other- | 000 XXXXX XXXX., XXXXX 000 |X. Xxxx incorporate
(attach Sch. PH) |wise, | XXXXXXXX, XX 00000 | 8/22/2000
3. Personal service corp. |please | |------------------------------------------
as defined in |print | |D. Total assets (see page 6 of instructions)
Temporary Regs. |or type. | |
sec. 1.441-4T- | | |
see instructions [ ] | | |
---------------------------------------------------------------------------------------|
E Check applicable boxes: (1) [X] Initial return (2) [ ] Final return (3) [ ] Change |
of address| $ 16,900
------------------------------------------------------------------------------------------------------------------------------------
| 1a Gross receipts/sales | | b Less returns & allowances | | c Balance |1c| |
| | |--------------------------|---
| 2 Cost of goods sold (Schedule A, line 8) ............................................ |2 | |
| | |--------------------------|---
| 3 Gross profit. Subtract line 2 from line 1c ......................................... |3 | |
I | | |--------------------------|---
N | 4 Dividends (Schedule C, line 19)..................................................... |4 |
C | | |--------------------------|---
O | 5 Interest ........................................................................... |5 | |
M | | |--------------------------|---
E | 6 Gross rents......................................................................... |6 | |
| | |--------------------------|---
| 7 Gross royalties..................................................................... |7 | |
| | |--------------------------|---
| 8 Capital gain net income (attach Schedule D (Form 112)............................... |8 | |
| | |--------------------------|---
| 9 Net gain or (loss) from Form 4797, Part II line 18 (attach Form 4797)............... |9 | |
| | |--------------------------|---
| 10 Other income (see page 7 of instructions - attach schedule )........................ |10| |
| | |--------------------------|---
| 11 Total income. Add lines 3 through 10................................................ |11| 0 |
------|-------------------------------------------------------------------------------------------|--|--------------------------|---
| 12 Compensation of officers (Schedule E, line 4)....................................... |12| |
| | |--------------------------|---
D | 13 Salaries and wages (less employment credits)........................................ |13| |
E | | |--------------------------|---
D | 14 Repairs and maintenance............................................................. |14| |
U | | |--------------------------|---
C | 15 Bad debts........................................................................... |15| |
T | | |--------------------------|---
I | 16 Rents............................................................................... |16| |
O | | |--------------------------|---
N | 17 Taxes and licenses.................................................................. |17| |
S | | |--------------------------|---
| 18 Interest............................................................................ |18| |
| | |--------------------------|---
| 19 Charitable contributions (see page 9 of instructions for 10% limitation............. |19| |
| | |--------------------------|---
| 20 Depreciation (attach Form 4562).................. |20 | | | | |
| |-------------|-- | | |
| 21 Less depreciation claimed on Schedule A and elsewhere on return |21a| | |21b| |
|-------------|-- | |--------------------------|---
| 22 Depletion........................................................................... |22| |
| | |--------------------------|---
| 23 Advertising......................................................................... |23| |
| | |--------------------------|---
| 24 Pension, profit-sharing, etc. plans................................................. |24| |
| | |--------------------------|---
| 25 Employee benefit programs........................................................... |25| |
| | |--------------------------|---
| 26 Other deductions (attached schedule).......................See Statement 1.......... |26| 48,100 |
| | |--------------------------|---
| 27 Total deductions. Add lines 12 through 26........................................... |27| 48,100 |
| | |--------------------------|---
| 28 Taxable income before net operating loss deduction and special deductions........... |28| -48,100 |
| Subtract line 27 from line 11 | |--------------------------|---
| 29 Less: a Net operating loss (NOL) deduction (see page 11 of instru) |29a| | | | |
| |-------------|----| | |
| b Special deductions (Schedule C, line 20).................. |29b| | |29c| |
------|------------------------------------------------------------------------|-------------|----| |--------------------------|---
| 30 Taxable income. Subtract line 29c from line 28....................................... |30| -48,100 |
T | | |--------------------------|---
A | 31 Total tax (Schedule J, line 12)..................................................... |31| 0 |
X | | |--------------------------|---
| 32 Payments: |
A | |
N | a 1998 overpayment credited to 1999..|32a| | | |
D | |--------------------- |
| b 1999 estimated tax payments....... |32b| | | |
P | |--------------------- |
A | c 1999 estimated tax payments....... |32c| | |d Bal |32d| 0| |
Y | |--------------------- |---|------------|--- |
M | e Tax deposited with Form 7004................................. |32e| | |
E | |----------------|--- |
N | f Credit for tax paid on undistributed capital gains (attach... |32f| | |
T | Form 2439) |----------------|--- |
S | g Credit for Federal tax on fuels (attach Form 4136 (see Instr) |32g| | |32h| 0 |
| |----------------|--- |---|--------------------------|---
| 33 Estimated tax penalty (see page 12 of Instructions). Check if Form 2220 is attached[ ] 33| |
| |---|--------------------------|---
| 34 Tax due. If line 32h is smaller than the total of lines 31 and 33, enter amount owed | 34| 0 |
| |---|--------------------------|---
| 35 Overpayment. If line 32h is larger than the total of lines 31 and 33, enter amount | 35| |
| overpaid |---|--------------------------|---
| 36 Enter amount of line 35 you want: Credited to 2000 estimated tax | Refunded | 36| |
--------|---------------------------------------------------------------------------------------------------------------------------
| Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and
| statements, and to the best of my knowledge and belief, it is true, correct and complete. Declaration of preparer
| (other than taxpayer) is based on all information of which preparer has an knowledge.
Sign |
Here | Signature
| of officer /s/ Xxxx Xxxxx Xxxxx Date 10/30/01 Title Pres.
--------|---------------------------------------------------------------------------------------------------------------------------
Paid | Preparer's | Date |Check if self- |Preparer's SSN or PTIN
Pre- | Signature /s/ Xxxxx XxxxXxxx | 10/30/01 |employed [ ] | P00143604
parer's |------------------------------------------------------|-------------|----------------------|-------------------------------
Use | | EIN 00-0000000
Only |Firm's name (or Xxxxxxx, Xxxx & Co. |----------------------------------------------
|yours, if self-employed 0000 X. Xxxxxx-Xxxxxxxx Xx. |
|and address Salt Lake City, UT |ZIP code 84117
------------------------------------------------------------------------------------------------------------------------------------
78
Form 1120 (1999) K-1 BUILDERS, INC. 00-0000000 Page 2
------------------------------------------------------------------------------------------------------------------------------------
Schedule A | Cost of Goods Sold (See page 12 of insturctions.)
------------------------------------------------------------------------------------------------------------------------------------
1 Inventory at beginning of year....................................................... | 1| |
| |--------------------------|---
2 Purchases............................................................................ | 2| |
| |--------------------------|---
3 Cost of labor........................................................................ | 3| |
| |--------------------------|---
4 Additional section 263A costs (attach schedule)...................................... | 4| |
| |--------------------------|---
5 Other costs (attach schedule)........................................................ | 5| |
| |--------------------------|---
6 Total. Add lines 1 through 5........................................................ | 6| |
| |--------------------------|---
7 Inventory at end of year............................................................. | 7| |
| |--------------------------|---
8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on line 2, page 1... | 8| |
| |--------------------------|---
9a Check all methods used for valuing closing inventory:
(i) [ ] Cost as described in Regulations section 1.471-3
(ii) [ ] Lower of cost or market as described in Regulations section 1.471-4
(iii) [ ] Other (Specify method used and attached explanation.)
-----------------------------------------------------------
b Check if there was a writedown of subnormal goods as described in Regulations section 1.471-2(c).....................[ ]
c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970).............[ ]
d If the LIFO inventory method was used for this tax year, enter percentage (or
amounts) of closing inventory computed under LIFO....................................... |9d| |
|--------------------------|---
e If property is produced or acquired for resale, do the rules of section 263A apply to the corporation.. [ ] Yes [ ] No
f Was there any change in determining quantities, cost or valuations between opening and
and closing inventory? If "Yes," attach explanation................................................... [ ] Yes [ ] No
------------------------------------------------------------------------------------------------------------------------------------
Schedule C Dividends and Special Deductions (see page 13 of instructions. | (a) Dividends | |(c) Special deductions
| received | (b)% | (a) x (b)
-------------------------------------------------------------------------------- |----------------|------|----------------------
1 Dividends from less-than-20%_owned domestic corporations that are subject to | | |
the 70% deduction (other than debt-financed stock).............................. | | 70 |
|----------------|------|----------------------
2 Dividends from 20%-or-more-owned domestic corporations that are subject | | |
to the 80% deduction (other than debt-financed stock)........................... | | 80 |
|----------------|------|----------------------
3 Dividends on debt-financed stock of domestic and foreign corporations | | see |
(section 246A).................................................................. | |Instr.|
|----------------|------|----------------------
4 Dividends on certain preferred stock of less-than-20%_owned public utilities.... | | 42 |
|----------------|------|----------------------
5 Dividends on certain preferred stock of less-than-20%_owned public utilities.... | | 48 |
|----------------|------|----------------------
6 Dividends from less-than-20%-owned foreign corporations and certain | | |
FSCs that are subject to the 70% deduction...................................... | | 70 |
|----------------|------|----------------------
7 Dividends from less-than-20%-owned foreign corporations and certain | | |
FSCs that are subject to the 80% deduction...................................... | | 80 |
|----------------|------|----------------------
8 Dividends from wholly owned foreign subsidiaries subject to the 100% | | |
deduction (section 245(b)....................................................... | | 100 |
|----------------|------|----------------------
9 Total. Add lines 1 through 8. See page 14 of instructions for limitation....... | | |
|----------------|------|----------------------
10 Dividends from domestic corporations received by a small business investment | | |
company operating under the Small Business Investment Act of 1958............... | | 100 |
|----------------|------|----------------------
11 Dividends from certain FSCs that are subject to the 100% deduction | | |
(section 245(c)(1))............................................................. | | 100 |
|----------------|------|----------------------
12 Dividends from affiliated group members subject to the 100% deduction | | |
(section 243(a)(3).............................................................. | | 100 |
|----------------|------|----------------------
13 Other dividends from foreign corporations not included on lines 3, 6, | |
7, 8, or 11..................................................................... | |
|----------------|-----------------------------
14 Income from controlled foreign corporations under subpart F | |
(attach Form(s) 5471)........................................................... | |
|----------------|
15 Foreign dividend gross-up (section 78)................................... | |
|----------------|
16 IC-DISC and former DISC dividends not included on lines 1, 2, or 3 | |
(section 246(d)................................................................. | |
|----------------|
17 Other dividends................................................................. | |
|----------------|
18 Deduction for dividends paid on certain preferred stock of public utilities..... | |
| |-----------------------------
19 Total dividends. Add lines 1 through 17. Enter here and on line 4, page 1...... | |
|----------------|-----------------------------
20 Total special deductions. Add lines 9, 10, 11, 12, and 18. Enter here and | |
on line 29b, page 1............................................................................. |-----------------------------
------------------------------------------------------------------------------------------------------------------------------------
Schedule E Compensation of Officers (See instructions for line 12, page 1.)
Note: Complete Schedule E only if total receipts (line 1a plus lines 4 through 10 on page 1, Form 1120) are
$500,000 or more.
------------------------------------------------------------------------------------------------------------------------------------
(c) Percent Percent of corporation
of time stock owned
devoted to --------------------------- (f) Amount of
(a) Name of Officer (b)Social security number business (d) Common (e)Preferred compensation
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
| | % | % | %|
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
| | % | % | %|
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
| | % | % | %|
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
| | % | % | %|
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
| | % | % | %|
-------------------------------------|------------------------------|-------------|-------------|-------------|---------------------
2 Total compensation of officers..........................................................................|
|---------------------
3 Compensation of officers claimed on Schedule A and elsewhere on return..................................|
|---------------------
4 Subtract line 3 from line 2. Enter the result here and on line 12, page 1...............................|
--------------------------------------------------------------------------------------------------------------|---------------------
79
Form 1120 (1999) K-1 BUILDERS, INC. 00-0000000 PAGE 3
----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE J TAX COMPUTATION (SEE PAGE 17 OF INSTRUCTIONS.)
----------------------------------------------------------------------------------------------------------------------------------
1 Check if the corporation is a member of a controlled group (see sections 1561 and 1563 ................. o [ ] | |
IMPORTANT: Members of a controlled group, see instructions on page 15. | |
2a If the box on line 1 is checked, enter the corporation's share of the $50,000, $25,000, and $9,925,000 taxable | |
income brackets (in that order): | |
(1) | | (2) | | (3)|$ | |
---------------- -------------------- ---------------------------
b Enter the corporation's share of: (1) Additional 5% tax (not more than $11,750) |$ | |
---------------------------
(2) Additional 3% tax (not more than $100,000) |$ | |
---------------------------
3 Income tax. Check if a qualified personal service corporation under section 448(d)(2) (SEE PAGE 15) .... [ ] | 3 | 0
-------------
4a Foreign tax credit (attach Form 1118) ............................................. | 4a|
-----------------------------| |
b Possessions tax credit (attach Form 5735 .......................................... | 4b|
-----------------------------| |
c Check: [ ] Nonconventional source fuel credit [ ] QEV credit (att. Form 8834) ... | 4c|
-----------------------------| |
d General business credit. Enter here and check which forms are att.: [ ] 3800 | |
[ ] 3468 [ ] 5884 [ ] 6478 [ ] 6765 [ ] 8586 [ ] 8830 [ ] 8826 | |
[ ] 8835 [ ] 8844 [ ] 8845 [ ] 8846 [ ] 8820 [ ] 8847 [ ] 8861 | 4d|
-----------------------------| |
e Credit for prior year minimum tax (attach Form 8827) .............................. | 4e|
-----------------------------| |
f Qualified zone academy bond credit (attach Form 8860) ............................. | 4f|
-----------------------------| |
5 Total credits. Add lines 4a through 4f ..........................................................................| 5 |
-------------
6 Subtract line 5 from line 3 .....................................................................................| 6 |
-------------
7 Personal holding company tax (attach Schedule PH (Form 1120)) ...................................................| 7 |
--------------
8 Recapture taxes. Check if from [ ]Form 4255 [ ] Form 8611 .........................................| 8 |
--------------
9 Alternative minimum tax (attach Form 4626).......................................................................| 9 |
--------------
10 Addlines 6 through 9.............................................................................................|10 |
--------------
11 Qualified zone academy bond credit (attach Form 8860)............................................................|11 |
--------------
12 Total tax. Subtract 11 from line 10. Enter here and on line 31, page 1 ..........................................| 9 |
--------------
----------------------------------------------------------------------------------------------------------------------------------
Schedule K | OTHER INFORMATION (SEE PAGE 19 INSTRUCTIONS.)
----------------------------------------------------------------------------------------------------------------------------------
1 Check method of accounting: a [ ] Cash |Yes|No | If "Yes," file Form 5452, Corporate Report of |Yes|No |
b [X] Accrual --------| Nondivident Distritutions. --------|
c [ ] Other (specify) o .................................| | | If this is a consolidated return, answer here | | |
2 See page 19 of the instructions and enter the: | | | for the parent corporation and on Form 851, | | |
a Business activity code no. o ............................| | | Affiliations Schedule, for each subsidiary. | | |
b Business activity o Construction | | | 7 Was the corporation a U.S. shareholder of any | | |
c Product or service o Construction Service | | | controlled foreign corporation? (See sections | | |
3 At the end of the tax year, did the corporation own, | | | 951 and 957.)................................... | | X |
directly or indirectly, 50% or more of the voting stock | | | If "Yes", attach Form 5471 for each corporation. | | |
of a domestic corporation? (For rules of attribution, | | | Enter number of Forms 5471 attached ___________ | | |
see 267(c)) ..............................................| | X | 8 At anytime during the 1999 calendar year, did the
If "Yes," attach a schedule showing: (a) name and |-------| corporation have an interest in or a signature | | |
employer identification number (EIN), (b) percentage | | | or other authority over a financial account | | |
owned, and (c) taxable income or (loss) before NOL and | | | (such as a bank account, securities account, | | |
special deductions of such corportion for the tax year | | | or other financial account) in a foreign country?| | X |
ending with or within your tax year. | | | If "Yes" the corporation may have to file Form TD| | |
4 Is the corporation a subsidiary in an affiliated | | | F 90-22.1. | | |
group or a parent-subsidiary controlled group? ..........| | X | If "Yes," enter name of foreign country_________ | | |
If "Yes." enter name and EIN of the parent |-------| 9 During the tax year, did the corporation receive | | |
corporation o ..........................................| | | a distribution from, or was it the grantor of, | | |
..........................................................| | | or transferor to, a foreign trust? | | X |
5 At the end of the tax year, did any individual, | | | If yes, the corporation may have to file Form 3520---|---|
partnership, corporation, estate, or trust own, | | |10 At any time during the tax year, did one foreign | | |
directly or indirectly, 50% or more of the | | | person own, directly or indirectly, at least | | |
corporation's voting stock? (For rules of attribution, | | X | 25% of:(a) the total voting power of all classes | | |
see section 267(c).) .....................................|-------| of stock of the corporation entitled to vote, or | | |
If "Yes," attach a schedule showing name and | | | (b) the total value of all classes of stock of | | X |
identifying ..............................................| | | the corporation? If "Yes," |---|---|
number. (Do not include any information already | | | a Enter percentage owned _________________________ | | |
entered in 4 above.) o .. ...............................| | | b Enter owner's country __________________________ | | |
6 During this tax year, did the corporation pay dividends | | | c The corporation may have to file Form 5472. | | |
(other than stock dividends and distributions in exchange | | | Enter number of Forms 5472 attached ____________ | | |
for stock) in excess of the corporation's current and | | |11 Check this box if the corporation issued publicly| | |
accumulated earning and profits? (See sections 301 and | | | offered debt instruments with original issue | | |
316.) ....................................................| | X | discount...................................[ ] | | |
|-------| If checked, the corporation may have to file |-------|
form 8281.
12 Enter the amount of tax-exempt interest received
or accrued during the tax year........___________| | |
13 If there were 75 or fewer shareholders at the end of
the tax year, enter the number 54
------------------
14 If the corporation has an NOL for the tax year and
is electing to forego the carryback period,
check here.................................[ ]
15 Enter the available NOL carryover from prior tax
years (Do not reduce it by any deduction on line 29a)
------------------------------------------------------------------------------------------------------------------------------------
80
Form 1120 (1999) K-1 BUILDERS, INC. 00-0000000 Page 4
-----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE L Balance Sheets per Books Beginning of tax year End of tax year
-----------------------------------------------------------------------------------------------------------------------------------
| a | b | c | d
-------------------------------------------------------------------------------
1 Cash ....................................... | | | | 16,900
-------------------------------------------------------------------------------
2a Trade notes and accounts receivable ........ | | | |
-------------------------------------------------------------------------------
b Less allowance for bad debt ................ | | | |
-------------------------------------------------------------------------------
3 Inventories ................................ | | | |
-------------------------------------------------------------------------------
4 U.S. government obligations ................ | | | |
-------------------------------------------------------------------------------
5 Tax-exempt securities (see instructions).... | | | |
-------------------------------------------------------------------------------
6 Other current assets ....................... | | | |
-------------------------------------------------------------------------------
7 Loans to shareholders ...................... | | | |
-------------------------------------------------------------------------------
8 Mortgage and real estate loans ............. | | | |
-------------------------------------------------------------------------------
9 Other investments .......................... | | | |
-------------------------------------------------------------------------------
10a Buildings and other dpreciable assets ...... | | | |
-------------------------------------------------------------------------------
b Less accumalated depreciation .............. | | | |
-------------------------------------------------------------------------------
11a Depletable assets .......................... | | | |
-------------------------------------------------------------------------------
b Less accumulated depreciation .............. | | | |
-------------------------------------------------------------------------------
12 Land (net of any amortization .............. | | | |
-------------------------------------------------------------------------------
13a Intangible assets (amoritzable only) ....... | | | |
-------------------------------------------------------------------------------
b Less accumulated amortization .............. | | | |
-------------------------------------------------------------------------------
14 Other assets (attach sch.) ................. | | | |
-------------------------------------------------------------------------------
15 Total assets ............................... | | 0 | | 16,900
-----------------------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholder's Equity | | | |
-------------------------------------------------------------------------------
16 Accounts payable ........................... | | | |
-------------------------------------------------------------------------------
17 Mortgages, notes, bonds payable in less than | | | |
1 year ..................................... | | | |
-------------------------------------------------------------------------------
18 Other current liabilities See St. 2......... | | | | 20,000
-------------------------------------------------------------------------------
19 Loans from shareholders .................... | | | |
-------------------------------------------------------------------------------
20 Mortgages, notes, bonds payable in 1 year | | | |
or more .................................... | | | |
-------------------------------------------------------------------------------
21 Other liabilities (att. sch.) .............. | | | |
-------------------------------------------------------------------------------
22 Capital stock: a Preferred stock .......... | | | |
-------------------------------------------------------------------------------
b Common stock ............. | | | 900 | 900
-------------------------------------------------------------------------------
23 Additional paid-in capital ................. | | | | 44,100
-------------------------------------------------------------------------------
24 Retained earnings-Appropriated ............. | | | |
-------------------------------------------------------------------------------
25 Retained earnings-Unapprpriated ............ | | | | -48,100
-------------------------------------------------------------------------------
26 Adjustments to S/H equity .................. | | | |
-------------------------------------------------------------------------------
27 Less costs of treasury stock ............... | | | |
-------------------------------------------------------------------------------
28 Total liabilities and shareholder's equity . | | 0 | | 16,900
-----------------------------------------------------------------------------------------------------------------------------------
NOTE: The corporation is not required to complete Schedules M-1 and M-2 if the total assets on line 15, col. (d) of Schedule L are
less than $25,000.
-----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE M-1 RECONSCILIATION OF INCOME (LOSS) PER BOOKS WITH INCOME PER RETURN (See page 20 of Instructions.)
-----------------------------------------------------------------------------------------------------------------------------------
1 Netincome (loss) per books.................. | -48,100 |7 Income recorded on books this year |
-----------------------not included on this return -------------------
itemize
2 Federal income tax | | |
| |a tax exempt interest________________ |
--------------------- -------------------
3 Excess of capital losses over capital gains... | | ________________________________ |
----------------------
4. Income subject to tax not recorded on books ________________________________
this year
Itemize)___________________________________ 8 Deduction on this return not charged
against book income this year (itemize):
___________________________________________
a Depreciation....$_____________
5 Expenses recorded on books this year not
deducted on this return (itemize): b Contrib carryfover $__________________
a Depreciation............$ _____________ _____________________________________
b Contributions carryover $______________
c Travel and entertainment $______________ ____________________________________
6 Add lines 1 through 5 ................. | -48,100 | 9 Add lines 7 and 8 ................ | 0
---------------
10 Income (line 28, pg. 1) - line 6
less line 9 -48,100
------------------------------------------------------------------------------------------------------------------------------------
Schedule M-2 Analysis of Unappropriated Retained Earnings per Books (Line 25, Schedule L)
------------------------------------------------------------------------------------------------------------------------------------
1 Balance at beginning of year ............ | | 5 Distributions: a Cash ...........
-------------------------------------------------------------------------------
2 Net income (loss) per books................. | -48,100 | b Stock..........
-------------------------------------------------------------------------------
3 Other increase (itemize): ___________________ c Property
-------------------------------------------------------------------------------
_____________________________________________ 6 Other decreases (itemize): _________
-------------------------------------------------------------------------------
4 Add lines 1, 2, and 3 ...................... -48,100 7 Add lines 5 and 6 ..................
-------------------------------------------------------------------------------
8 Balance at end of year (line 4 less line 7) -48,100
-------------------------------------------------------------------------------
81
1999 Federal Statements Page 1
--------------------------------------------------------------------------------
Client 38999 K-1 BUILDERS, INC 00-0000000
--------------------------------------------------------------------------------
10/17/01 04:30 pm
Statement 1
Form 1120, Line 26
Other Deductions
General & Administrative ............................... $ 48,100
--------
Total $ 48,100
========
--------------------------------------------------------------------------------
Statement 2
Form 1120, Schedule L, Line 18
Other Current Liabilities
Beginning Ending
--------- --------
Shareholder Adavaces $ 0 $ 20,000
--------- --------
Total $ 0 $ 20,000
========= ========
82
SCHEDULE 3.13
NexGen Vision, Inc.
NexGen Subsidiaries
FB Optical Mfg., Inc., a Florida corporation
CobraVision, Inc., a Georgia corporation
83
SCHEDULE 3.14(a)
NexGen Vision, Inc.
NexGen Organizational Documents
CERTIFICATE OF INCORPORATION
Nexgen Vision, Inc.
FIRST: The name of this Delaware corporation is:
Nexgen Vision, Inc.
SECOND: The name and address of the Corporation's Registered Agent is:
Corporate Creations Network Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx XX 00000
New Castle County
THIRD: The purpose of the Corporation is to conduct or promote any lawful
business or purposes.
FOURTH: The Corporation shall have the authority to issue 50,000,000 shares of
common stock, par value $.001 per share.
FIFTH: The directors shall be protected from personal liability to the fullest
extent permitted by law.
SIXTH: The name and address of the incorporator is:
Corporate Creations International Inc.
000 Xxxxxx Xxxxxx #000
Xxxxx Xxxxx XX 00000
SEVENTH: This Certificate of Incorporation shall become effective on October 18,
2001
/s/
--------------------------------------
CORPORATE CREATIONS INTERNATIONAL INC.
Xxxxx X. Xxxxxxxxx Vice President
84
BYLAWS
OF
NEXGEN VISION, INC.
As Adopted on
October 20, 2001
Article I. Meeting of Stockholders
----------------------------------
Section 1. Annual Meeting. The annual meeting of the stockholders of
this Corporation shall be held at the time and place designated by the Board of
Directors of the Corporation. Business transacted at the annual meeting shall
include the election of directors of the Corporation.
Section 2. Special Meetings. Special meetings of the stockholders shall
be held when directed by the Board of Directors, or when requested in writing by
the holders of not less than 10 percent of all the shares entitled to vote at
the meeting.
Section 3. Place. Meetings of stockholders may be held within or
without the State of Delaware.
Section 4. Notice. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than 10 nor more than
60 days before the meeting, either personally or by first class mail, by or at
the direction of the president, the secretary, or the officer or persons calling
the meeting to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail addressed to the stockholder at his address as it appears on the
stock transfer books of the Corporation, with postage there on prepaid. The
85
provisions of Section 229 of the Delaware General Corporation Law (the "DGCL")
as to waiver of notice are applicable.
Section 5. Notice of Adjourned Meetings. When a meeting is adjourned to another
time or place, it shall not be necessary to give any notice of the adjourned
meeting if the time and place to which the meeting is adjourned are announced at
the meeting at which the adjournment is taken, and at the adjourned meeting any
business may be transacted that might have been transacted on the original date
of the meeting. If, however, after the adjournment the Board of Directors fixes
a new record date for the adjourned meeting, a notice of adjourned meeting,
shall be given as provided in this section to each stockholder of record on the
new record date entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the purpose of
determining stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of stockholders for any other
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, 60 days. If the
stock transfer books shall be closed for the purpose of determining stockholders
entitled to notice of or to vote at a meeting of stockholders, such books shall
be closed for at least 10 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 the determination of stockholders, such
date in any case to be not more than 60 days and, in case of a meeting of
stockholders, not less than 10 days prior to the date on which the particular
action requiring such determination of stockholders is to be taken.
If the stock transfer books are not closed and no record date is fixed for the
determination of stockholders entitled to notice or to vote at a meeting of
stockholders, or stockholders entitled to receive payment of a dividend, the day
preceding the day on which notice of the meeting is mailed
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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 stockholders.
When a determination of stockholders entitled to vote at any meeting of
stockholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Stockholder Quorum and Voting. A majority of the outstanding shares
of each class or series of voting stock then entitled to vote, represented in
person or by proxy, shall constitute a quorum at a meeting of stockholders. When
a specified item of business is required to be voted on by a class or series of
stock, a majority of the outstanding shares of such class or series shall
constitute a quorum for the transaction of such item of business by that class
or series.
If a quorum is present, the affirmative vote of the majority of those shares
present at the meeting in person or by proxy of each class or series of voting
stock and entitled to vote on the subject matter shall be the act of the
stockholders unless otherwise provided however that the directors of the
Corporation shall be elected by a plurality of such shares.
After a quorum has been established at a stockholders' meeting, the subsequent
withdrawal of stockholders, so as to reduce the number of stockholders entitled
to vote at the meeting below the number required for a quorum, shall not affect
the validity of any action taken at the meeting or any adjournment thereof.
Section 8. Voting of Shares. Each outstanding share, regardless of class, shall
be entitled to one vote on each matter submitted to a vote at a meeting of
stockholders.
Treasury shares, shares of stock of this Corporation owned by another
corporation, the majority of the voting stock of which is owned or controlled by
this Corporation, and shares of stock of this Corporation, held by it in a
fiduciary capacity shall not be voted, directly or indirectly,
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at any meeting, and shall not be counted in determining the total number of
outstanding shares at any given time.
A stockholder may vote either in person or by proxy executed in writing by the
stockholder or his duly authorized attorney-in-fact.
At each election for directors every stockholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected at
that time and for whose election he has a right to vote.
Shares standing in the name of another corporation, domestic or foreign, may be
voted by the officer, agent, or proxy designated by the bylaws of the corporate
stockholder; or, in the absence of any applicable bylaw, by such person as the
Board of Directors of the corporate stockholder may designate. Proof of such
designation may be made by presentation of a certified copy of the bylaws or
other instrument of the corporate stockholder. In the absence of any such
designation, or in case of conflicting designation by the corporate stockholder,
the chairman of the board, president, any vice president, secretary and
treasurer of the corporate stockholder shall be presumed to possess, in that
order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may be voted
by him, either in person or by proxy, without a transfer of such shares into his
name. Shares standing in the name of a trustee may be voted by him, either in
person or by proxy, but no trustee shall be entitled to vote shares held by him
without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such receiver, and
shares held by or under the control of a receiver may be voted by such receiver
without the transfer thereof into his name if authority to do so is contained in
an appropriate order of the court by which such receiver was appointed.
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A stockholder 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 or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of redeemable shares
has been mailed to the holders thereof and a sum sufficient to redeem such
shares has been deposited with a bank or trust company with irrevocable
instruction and authority to pay the redemption price to the holders thereof
upon surrender of certificates therefor, such shares shall not be entitled to
vote on any matter and shall not be deemed to be outstanding shares.
Section 9. Proxies. Every stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent without a meeting of a
stockholders' duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the stockholder or his attorney in-fact. No proxy
shall be valid after the expiration of three years from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the stockholder executing it, except as otherwise provided by law.
The authority of the holder of a proxy to act shall not be revoked by the
incompetence or death of the stockholder who executed the proxy unless, before
the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of stockholders.
If a proxy for the same shares confers authority upon two or more persons and
does not otherwise provide, a majority of them present at the meeting, or if
only one is present then that one, may exercise all the powers conferred by the
proxy; but if the proxy holders present at the meeting are equally divided as to
the right and manner of voting in any particular case, the voting of such shares
shall be prorated.
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If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.
Section 10. Action by Stockholders without a Meeting. Any action required by
law, these bylaws, or the certificate of incorporation of this Corporation to be
taken at any annual or special meeting of stockholders of the Corporation, or
any action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing setting forth the action so taken, shall be signed
by the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. If any class
of shares is entitled to vote thereon as a class, such written consent shall be
required of the holders of a majority of the shares of each class of shares
entitled to vote as a class thereon and of the total shares entitled to vote
thereon.
Promptly after obtaining such authorization by written consent, notice shall be
given to those stockholders who have not consented in writing. The notice shall
fairly summarize the material features of the authorized action, and, if the
action be a merger or consolidation for which appraisal rights are provided
under the DGCL, be given in accordance with Section 262(d)(2) of the Act, as
amended.
Article II. Directors
Section 1. Function. All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the Corporation shall be managed
under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state or
stockholders of this Corporation.
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Section 3. Compensation. The Board of Directors shall have authority to fix the
compensation of directors.
Section 4. Duties of Directors. A director 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:
(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 person's professional
or expert competence, or
(c) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the certificate of incorporation or
the bylaws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
Corporation.
Section 5. Presumption of Assent. A director of the Corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed
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to have assented to the action taken unless he votes against such action or
abstains from voting in respect thereto because of an asserted conflict of
interest.
Section 6. Number. This Corporation shall have no less than one nor
greater than nine directors. The number of directors may be established from
time to time by resolution of the Board of Directors, but no decrease shall have
the effect of shortening the terms of any incumbent director.
Section 7. Election and Term. Each person named in the certificate of
incorporation as a member of the initial Board of Directors and all other
directors appointed by the Board of Directors to fill vacancies thereof shall
hold office until the first annual meeting of stockholders, and until his
successor shall have been elected and qualified or until his earlier
resignation, removal from office or death.
At the first annual meeting of stockholders and at each annual meeting
thereafter the stockholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term for
which he is elected and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number 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 hold office only until the next election of
directors by the stockholders.
Section 9. Removal of Directors. At a meeting of the stockholders
called expressly for that purpose, any director or the entire Board of Directors
may be removed, with or without cause, by a vote of the holders of a majority of
the shares of each class or series of voting stock, present in person or by
proxy, then entitled to vote at an election of directors.
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Section 10. Quorum and Voting. A majority of the number of directors
fixed by these bylaws shall constitute a quorum for the transaction of business.
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.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this Corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to
the stockholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
Corporation at the time it is authorized by the board, a committee or the
stockholders. 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.
Section 12. Place of Meeting. Regular and special meetings by the Board of
Directors may be held within or without the State of Delaware.
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Section 13. Time, Notice and Call of Meetings. Regular meetings of the Board of
Directors shall be held without notice on the second Tuesday of September of
each year. Written notice of the time and place of special meetings of the Board
of Directors shall be given to each director by either personal delivery, first
class mail, facsimile transmission, or telegram at least two days before the
meeting.
Notice of a meeting of the Board of Directors need not be given to any director
who signs a waiver of notice either before or after the meeting. Attendance of a
director at a meeting shall constitute a waiver of notice of such meeting and
waiver of any and all obligations to the place of the meeting, the time of the
meeting, or the manner in which it has been called or convened, except when a
director states, at the beginning of the meeting, any objection to the
transaction of business because the meeting is not lawfully called or convened.
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.
A majority of the directors present, whether or not a quorum exists, may adjourn
any meeting of the Board of Directors to another time and place. Notice of any
such adjourned meeting shall be given to the directors who were not present at
the time of the adjournment and, unless the time and place of the adjourned
meeting are announced at the time of the adjournment, to the other directors.
Meetings of the Board of Directors may be called by the president of the
Corporation or by any director.
Members of the Board of Directors may participate in a meeting of such Board by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in person at a
meeting.
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Section 14. Action Without a Meeting. Any action required to be taken at a
meeting of the directors of the Corporation, or any action which may be taken at
a meeting of the directors, may be taken without a meeting if a consent in
writing, setting forth the action to be taken, signed by all of the directors,
is filed in the minutes of the proceedings of the Board. Such consent shall have
the same effect as a unanimous vote.
Section 15. Committees. The Board of Directors may designate from among its
members such committees it deems prudent, such as, but not limited to, an
executive committee, audit committee, compensation committee, finance committee
and a litigation committee.
Article III. Officers
Section 1. Officers. The officers of this Corporation shall consist of a
chairman, a president, one or more vice presidents, secretary, and treasurer,
and such other officers as may be designated by the Board of Directors, each of
whom shall be elected by the Board of Directors from time to time. Any two or
more offices may be held by the same person. The failure to elect any of the
above officers shall not affect the existence of this Corporation.
Section 2. Duties. The officers of this Corporation shall have the following
duties and such other duties as delegated by the president.
The chairman shall be the chief executive officer of the Corporation, shall have
general and active management of the business and affairs of the Corporation
subject to the directions of the Board of Directors, and shall preside at all
meetings of the stockholders and the Board of Directors.
The president shall be the chief operating officer of the Corporation, and shall
perform such duties as may be prescribed by the Board of Directors or the
chairman and shall act whenever the chairman shall be unavailable.
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The vice president(s) shall perform such duties as may be prescribed by the
Board of Directors or the chairman and shall act whenever the president shall be
unavailable.
The secretary shall have custody of and maintain all of the corporate records
except the financial records, shall record the minutes of all meetings of the
stockholders and whenever else required by the Board of Directors or the
chairman, and shall perform such other duties as may be prescribed by the Board
of Directors.
The Treasurer shall be the chief financial and accounting officer. He shall keep
correct and complete records of account, showing accurately at all times the
financial condition of the corporation. He shall be the legal custodian of all
monies, notes, securities and other valuables that may from timte to time come
into the possession of the Corporation. He shall immediately deposit all funds
of the Corporation coming into his hands in some reliable bank or other
depositary to be designated by the Board of Directors and shall keep this bank
account in the name of the Corporation. He shall furnish at meetings of the
Board of Directors, or whenever requested, a statement of the financial
condition of the Corporation and shall perform such other duties as the bylaws
provide or the Board of Directors may prescribe.
Section 3. Removal of Officers. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board whenever in its judgment the best
interests of the Corporation will be served thereby.
Any officer or agent elected by the stockholders may be removed only by vote of
the stockholders, unless the stockholders shall have authorized the directors to
remove such officer or agent.
Any vacancy, however, occurring, in any office may be filled by the Board of
Directors, unless the bylaws shall have expressly reserved such power to the
stockholders.
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Removal of any officer shall be without prejudice to the contract rights, if
any, of the person so removed; however, election or appointment of an officer or
agent shall not of itself create contract rights.
Article IV. Stock Certificates
Section 1. Issuance. Every holder of shares in this Corporation shall be
entitled to have a certificate, representing all shares to which he is entitled.
No certificate shall be issued for any share until such share is fully paid.
Section 2. Form. Certificates representing shares in this Corporation shall be
signed by the president or vice president and the secretary or an assistant
secretary or treasurer or assistant treasurer and may be sealed with the seal of
this Corporation or a facsimile thereof. The signature of the president or vice
president and the secretary or assistant secretary or treasurer or assistant
treasurer may be facsimiles if the certificate is manually signed on behalf of a
transfer agent or a registrar, other than the Corporation itself or an employee
of the Corporation. In case any officer who signed or whose facsimile signature
has been placed upon such certificate shall have ceased to be such officer
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer at the date of its issuance.
Every certificate representing shares issued by this Corporation shall set forth
or fairly summarize upon the face or back of the certificate, or shall state
that the Corporation will furnish to any stockholder upon request and without
charge a full statement of, the designations, preferences, limitations and
relative rights of the shares of each class or series authorized to be issued,
and the variations in the relative rights and preferences between the shares of
each series so far as the same have been fixed and determined, and the authority
of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the sale,
disposition, or other transfer of such shares shall state that such shares are
restricted as to transfer and shall set forth or
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fairly summarize upon the certificate, or shall state that the Corporation will
furnish to any stockholder upon request and without charge a full statement of,
such restrictions.
Each certificate representing shares shall state upon its face: the name of the
Corporation; that the Corporation is organized under the laws of this state; the
name of the person or persons to whom issued; the number and class of shares,
and the designation of the series, if any, which such certificate represents;
and the par value of each share represented by such certificate, or a statement
that the shares are without par value.
Section 3. Transfer of Stock. Except as provided in Section 4 of this Article,
the Corporation shall register a stock certificate presented to it for transfer
if the certificate is properly endorsed by the holder of record or by his duly
authorized attorney, and the signature of such person has been guaranteed by a
commercial bank or trust company or by a member of the New York or American
Stock Exchange.
Section 4. Off-Shore Offerings. In all offerings of equity securities pursuant
to Regulation S of the Securities Act of 1933 (the "Act"), the Corporation shall
require that its stock transfer agent refuse to register any transfer of
securities not made in accordance with the provisions of Regulation S, pursuant
to registration under the Act or an available exemption under the Act.
Section 5. Lost, Stolen or Destroyed Certificates. The Corporation shall issue a
new stock certificate in the place of any certificate previously issued if the
holder of record of the certificate (a) makes proof in affidavit form that it
has been lost, destroyed or wrongfully taken; (b) requests the issuance of a new
certificate before the Corporation has notice that the certificate has been
acquired by a purchaser for value in good faith and without notice of any
adverse claim; (c) gives bond in such form as the Corporation may direct, to
indemnify the Corporation, the transfer agent, and registrar against any claim
that may be made on account of the alleged loss, destruction, or theft of a
certificate; and (d) satisfies any other reasonable requirements imposed by the
Corporation.
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Article V. Books and Records
Section 1. Books and Records. This Corporation shall keep correct and complete
records and books of account and shall keep minutes of the proceedings of its
stockholders, Board of Directors and committees of directors.
This Corporation shall keep at its registered office or principal place of
business, or at the office of its transfer agent or registrar, a record of its
stockholders, giving the names and addresses of all stockholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other form
capable of being converted into written form within a reasonable time.
Section 2. Stockholder's Inspection Rights. Any person who shall have been a
holder of record of shares or of voting trust certificates therefor at least six
months immediately preceding his demand or shall be the holder of record of, or
the holder of record of voting trust certificates for, at least five percent of
the outstanding shares of any class or series of the Corporation, upon written
demand stating the purpose thereof, shall have the right to examine, in person
or by agent or attorney, at any reasonable time or times, for any proper purpose
its relevant books and records of accounts, minutes and records of stockholders
and to make extracts therefrom.
Section 3. Financial Information. Not later than three months after the close of
each fiscal year, this Corporation shall prepare a balance sheet showing in
reasonable detail the financial condition of the Corporation as of the close of
its fiscal year, and a profit and loss statement showing the results of the
operations of the Corporation during its fiscal year.
Upon the written request of any stockholder or holder of voting trust
certificates for shares of the Corporation, the Corporation shall mail to such
stockholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
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The balance sheets and profit and loss statements shall be filed in the
registered office of the Corporation in this state, shall be kept for at least
five years, and shall be subject to inspection during business hours by any
stockholder or holder of voting trust certificates, in person or by agent.
Article VI. Dividends
The Board of Directors of this Corporation may, from time to time, declare and
the Corporation may pay dividends on its shares in cash, property or its own
shares, except when the Corporation is insolvent or when the payment thereof
would render the Corporation insolvent or when the declaration or payment
thereof would be contrary to any restrictions contained in the certificate of
incorporation, subject to the following provisions:
a. Dividends in cash or property may be declared and paid, except
as otherwise provided in this section, only out of the unreserved and
unrestricted earned surplus of the Corporation or out of capital surplus,
howsoever arising but each dividend paid out of capital surplus shall be
identified as a distribution of capital surplus, and the amount per share paid
from such surplus shall be disclosed to the stockholders receiving the same
concurrently with the distribution.
b. Dividends may be declared and paid in the Corporation's own
treasury shares.
c. Dividends may be declared and paid in the Corporation's own
authorized but unissued shares out of any unreserved and unrestricted surplus of
the Corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such
shares shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at
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the time such dividend is paid an amount of surplus equal to the aggregate par
value of the shares to be issued as a dividend.
(2) If a dividend is payable in shares without a par value,
such shares shall be issued at such stated value as shall be fixed by the Board
of Directors by resolution adopted at the time such dividend is declared, and
there shall be transferred to stated capital at the time such dividend is paid
an amount of surplus equal to the aggregate stated value so fixed in respect of
such shares; and the amount per share so transferred to stated capital shall be
disclosed to the stockholders receiving such dividend concurrently with the
payment thereof.
d. No dividend payable in shares of any class shall be paid to
the holders of shares of any other class unless the certificate of incorporation
so provide or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
e. A split-up or division of the issued shares of any class
into a greater number of shares of the same class without increasing the stated
capital of the Corporation shall not be construed to be a share dividend within
the meaning of this section.
Article VII. Corporate Seal
The Board of Directors shall provide a corporate seal which shall be circular in
form and shall have inscribed thereon the following:
Article VIII. Amendment
These bylaws may be repealed or amended, and new bylaws maybe adopted, by the
Board of Directors.
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I certify that these are the Bylaws adopted by the Board of Directors of the
Corporation on the 20th day of October, 2001
By: /s/
-----------------------------
XxXxx X. Xxxxxxxx, Secretary
[Corporate Seal]
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SCHEDULE 3.14(b)
NexGen Vision, Inc.
NexGen Resolution of Board of Directors
---------------------------------------
CERTIFICATE OF SECRETARY
OF
NEXGEN VISION, INC.
The undersigned does hereby certify that she is the duly elected and
acting Secretary of NexGen Vision, Inc., a Delaware corporation (the "Company"),
and that
1. The Certificate of Incorporation of the Company dated October 18, 2001
has not been otherwise been revoked, amended, or modified in any manner
whatsoever, and a correct, and complete copy is attached as Exhibit A.
2. The By-laws of the Company have not been revoked, amended or modified
in any way and continue in full force and effect as of this date and a
true, correct, and complete copy is attached as Exhibit B.
3. The resolutions duly adopted by unanimous written consent of the board
of directors of the Company on April 2, 2002 authorizing, among other
things, the Company's execution and delivery of that certain Agreement
and Plan of Reorganization by and between the Company, it stockholders
and K-1 Builders, Inc., a Nevada corporation, dated the date hereof
(the "Agreement") which provided for, among other things, a change of
name of the Company to "NexGen Merger, Inc." and share exchange with
K-1 Builder's, Inc., has not been revoked, amended, or modified in any
way and continue in full force and effect as of this date and a true,
correct, and complete copy is attached as Exhibit C.
4. The persons listed below were as of the date hereof, and have been at
all times since that date up to and including the date hereof, duly
elected, qualified, and acting officers of the Company holding the
offices set forth opposite their names below, and that their genuine
signatures are reflected opposite his name:
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Name Office Signature
Xxxx X. Xxxxxxxx Chief Executive Officer /s/
and Treasurer --------------------
Xxxxxxx Xxxxxxxxxx President /s/
---------------------
Xxx Xxxxxxxx Secretary /s/
----------------------
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of April 2,
2002.
NEXGEN VISION, INC.
By:
---------------------------------
Xxx Xxxxxxxx, Secretary
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EXHIBIT A
Reference is made to Schedule 3.14(a) to the Agreement and Plan of
Reorganization.
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EXHIBIT B
Reference is made to Schedule 3.14(a) to the Agreement and Plan of
Reorganization.
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EXHIBIT C
Written Consent
of the DirectorS of
Nexgen Vision, Inc.
The undersigned, being all of the directors of Nexgen Vision, Inc. (the
"Company"), a Delaware corporation, hereby consents to the following action in
lieu of holding a meeting pursuant to the terms of Section 141(f) of the
Delaware General Corporation Law:
WHEREAS, the board of directors proposed and recommended to the
stockholders of the Company, and the stockholders so approved, the Company's
execution and delivery of that certain Agreement and Plan of Reorganization by
and among the Company, its stockholders and K-1 Builders, Inc., a Nevada
corporation, dated April 2, 2002 (the "Agreement"), which provides for, among
other things (i) a change of the name of the Company to "NexGen Merger, Inc.",
(ii) the exchange of Company class A common stock for shares of class B common
stock of K-1 in the manner set forth in the Agreement, (iii) the subsequent
recapitalization and reorganization of K-1 with and into a new Delaware company
to be called NexGen Vision, Inc., and (iv) following the consummation of the
foregoing actions, dissolution of the Company pursuant to and conditioned upon
the terms set forth in the Agreement, therefore, be it hereby
RESOLVED, that the proper officers of the Company are hereby authorized
to file with the Delaware Secretary of State, an amendment to the
Company's Certificate of Incorporation to change the name of the
Company to "NexGen Merger, Inc." It is further
RESOLVED that the proper officers of the Company be and they hereby are
authorized to take such actions and to do any and all things, and as
they shall
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deem necessary or advisable to effectuate the foregoing resolution, and
to effectuate the share exchange between K-1 and the Company as
contemplated in the Agreement, and to the subsequent dissolution of the
Company subject to the terms and conditions of the Agreement and be it
further
RESOLVED, this Consent may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together
shall constitute one and the same instrument. The execution of this
consent may be by actual or facsimile signature.
DATED: April 2, 2002
---------------------------
Xxxx X. Xxxxxxxx, Director
---------------------------
Xxxxxxx Xxxxxxxxxx, Director
---------------------------
Xxxxxxx Xxxxxxxxxx, Director
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AMENDMENT
TO
AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDMENT, dated as of April 11, 2002, is by and between K-1
Builders, Inc., a Nevada corporation ("K-1"), Xxxx Xxxxx Xxxxx ("Xxxxx"), and
NexGen Merger, Inc., a Delaware corporation formerly known as NexGen Vision,
Inc. ("NexGen "), and hereby amends that certain Agreement and Plan of
Reorganization dated April 10, 2002 by and between K-1, Xxxxx, and NexGen and
the NexGen Stockholders (as defined therein) (the "Plan"). Capitalized terms
used herein but not otherwise defined shall have the meaning ascribed to such
term in the Plan.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged and agreed, the parties hereby agree to
amend the Plan as follows:
1. Section 1.06 to the Plan entitled Directors and Officers of
Successor to K-1 shall be deleted in its entirety and the following shall be
inserted in its stead:
"1.06 Directors and Officers of Successor to K-1. Upon
transfer of the NexGen Shares:
(i) the current board of directors and officers of K-1 shall
immediately resign;
(ii) Xxxxx shall immediately resign as a director of NexGen
Vision, Inc. ("Vision"), the successor of K-1, without the requirement
of notice, and shall deliver such resignation in a form satisfactory to
NexGen;
(iii) Xxxxxxx Xxxxxxxxxx and Xxxxxxx Xxxxxxxxxx shall
immediately be nominated and appointed to the board of directors of
Vision . In addition, the officers of Vision shall be as follows: Xxxx
X. Xxxxxxxx, Chief Executive Officer; Xxxxxxx Xxxxxxxxxx, President,
Xxxxxxx Xxxxxxxxxx, Vice President and Xxx Xxxxxxxx, Secretary."
2. Section 1.10 (viii) shall be deleted in its entirety.
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3. Section 4.06 shall be deleted in its entirety and the following
shall be inserted in its stead:
Section 4.06 Compliance with Section 1.06. Upon the transfer
of the NexGen Shares (i) K-1 shall deliver the resignations of the
board of directors and officers of K-1, and Xxxxx shall resign from the
board of directors of Vision pursuant to Section 1.06(ii), (ii) the
directors of Vision shall be Xxxxxxxx, and Messrs. Xxxxxxx Xxxxxxxxxx
and Xxxxxxx Xxxxxxxxxx pursuant to Section 1.06(iii); and (iv) the
officers of Vision shall have been nominated and appointed pursuant to
Section 1.06(iii).
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4. Governing Law. This Agreement shall be governed by, enforced and
construed under and in accordance with the laws of the State of Utah.
5. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered, if sent by
facsimile or telecopy transmission or other electronic communication confirmed
by registered or certified mail, postage prepaid, or if sent by prepaid
overnight courier addressed as follows:
If to K-1. to: If to NexGen or Vision, to:
Xxxxxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx, CEO
K-1 Builders, Inc. NexGen Vision, Inc.
0000 X. Xxxxxxxx Xx., Xxx. 000 0000 Xxx Xxxxxxxxxx Xxxx, Xxxxx #X
Xxxx Xxxx Xxxx, XX 00000 Xxxxxxx, XX 00000
With a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxx, LLP
0000 Xxxx Xxxxx Xxxxx Xxxx.
Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices, hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered or sent by facsimile or
telecopy transmission or other electronic communication, or one day after the
date so sent by overnight courier.
6. Attorney's Fees. In the event that any party institutes any action
or suit to enforce this Agreement or to secure relief from any default hereunder
or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
7. Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter hereof. All previous
agreements between the parties, whether written or oral, have been merged into
this Agreement. This Agreement alone fully and completely expresses the
agreement of the parties relating to the subject matter hereof. There are no
other courses of dealing, understandings, agreements, representations, or
warranties, written or oral, except as set forth herein.
110
8. Counterparts; Facsimile. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument. Facsimile signatures shall constitute
original signatures, and shall be followed by delivery of original signatures.
9. Amendment. Except as modified herein, the Plan shall remain in full
force and effect.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Amendment to be executed by their respective officers, hereunto duly authorized,
as of the date first above written.
K-1 Builders, Inc. NexGen Merger, Inc. (f/k/a NexGen Vision, Inc.)
a Nevada corporation a Delaware corporation
By: _________________________ By: __________________________________
Xxxx Xxxxx Xxxxx, President Xxxxxxx Xxxxxxxxxx, President
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