UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.__)
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
DATIGEN.COM, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and O-11.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
DATIGEN.COM, INC.
c/o David Lubin & Associates
92 Washington Avenue
Cedarhurst, New York 11516
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
A special meeting of the stockholders of Datigen.com, Inc. ("Datigen") will be
held on April _, 2005, at 10:00 a.m., at the offices of David Lubin &
Associates, 92 Washington Avenue, Cedarhurst, New York 11516, for the following
purposes:
1. To act on a proposal to change Datigen's state of incorporation from
Utah to Nevada by the merger of Datigen with and into its
wholly-owned subsidiary, Smart Energy Solutions, Inc., a Nevada
corporation ("Battery Brain").
2. To authorize a change in the name of Datigen to Battery Brain.
3. To authorize an increase in authorized common stock from 50,000,000
shares to 500,000,000 shares.
4. To authorize a class of 1,000,000 shares of preferred stock.
5. To eliminate the personal liability of the directors for breaches of
fiduciary duties.
6. To provide for the mandatory indemnification by the company of the
directors.
7. To change the number of directors of the company.
8. To change the purpose of the company.
9. To increase the number of shares required to call a vote of the
shareholders.
10. To transact such other business as may properly be brought before a
special meeting of the stockholders of Datigen or any adjournment
thereof.
Only stockholders of record at the close of business on February 2, 2005 are
entitled to notice of and to vote at the meeting or any adjournments thereof.
Your attention is called to the Proxy Statement on the following pages. Please
review it carefully. We hope you will attend the meeting. If you do not plan to
attend, please sign, date and mail the enclosed proxy in the enclosed envelope,
which requires no postage if mailed in the United States.
By Order of the Board of Directors,
Amir Uziel
President and Chief Executive Officer
March __, 2005
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON ARE URGED
TO DATE, SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENVELOPE
PROVIDED WHICH REQUIRES NO POSTAGE.
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PROXY STATEMENT
GENERAL
Solicitation of Proxies. This Proxy Statement and the accompanying proxy card
are being mailed to holders of shares of common stock, no par value (the "Common
Stock"), of Datigen.com, Inc., a Utah corporation ("Datigen"), commencing on or
about March __, 2005, in connection with the solicitation of proxies by the
Board of Directors of Datigen (the "Board") for use at the special meeting of
the stockholders of Datigen (the "Meeting") to be held at the offices of David
Lubin & Associates located at 92 Washington Avenue, Cedarhurst, New York 11516
on April __, 2005 at 10:00 A.M.
Vote Required for Approval. The holders of a majority of the shares of Common
Stock issued and outstanding and entitled to vote at the Meeting, present in
person or represented by proxy, will constitute a quorum at the Meeting. Under
Section 16-10-725 of the Utah Law, any stockholder who abstains from voting on
any particular matter described herein will be counted for purposes of
determining a quorum. A majority of the shares of Common Stock outstanding and
entitled to vote at the Meeting is required to approve each proposal. Any shares
not voted at the Special Meeting, whether due to abstentions or broker
non-votes, will have the same effect as a vote against each proposal.
Voting Your Proxy. Proxies in the form enclosed are solicited by the Board for
use at the Meeting. Each such share is entitled to one vote on each matter
submitted to a vote at the Meeting. All properly executed proxies received prior
to or at the Meeting will be voted. If a proxy specifies how it is to be voted,
it will be so voted. If no specification is made, it will be voted (1) for the
change of Datigen's state of incorporation from Utah to Nevada, (2) to authorize
a change in the name of Datigen to Battery Brain, (3) to authorize an increase
in authorized common stock from 50,000,000 shares to 500,000,000 shares, (4) to
authorize a class of 1,000,000 shares of preferred stock, (5) to eliminate the
personal liability of the directors for breaches of fiduciary duties, (6) to
provide for the mandatory indemnification by the company of the directors, (7)
to change the number of directors of the company, (8) to change the purpose of
the company and (9) to increase the number of shares required to call a vote of
the shareholders.. The proxy may be revoked by a properly executed writing of
the stockholder delivered to Datigen's President before the Meeting or by the
stockholders at the Meeting before it is voted, by submitting a later-dated
proxy or by attending the special meeting and voting your shares in person.
Record Date. The Board fixed the close of business on February 2, 2005 as the
record date for determining the stockholders of Datigen entitled to notice of
and to vote at the Meeting.
Outstanding Shares. On the record date, there were 36,593,400 shares of Common
Stock outstanding and entitled to vote.
Cost of Solicitation. We will bear the costs of soliciting proxies. In addition
to the use of the mails, certain directors or officers of our company may
solicit proxies by telephone, facsimile or personal contact. Upon request, we
will reimburse brokers, dealers, banks and trustees, or their nominees, for
reasonable expenses incurred by them in forwarding proxy material to beneficial
owners of shares of Common Stock.
Dissenter's Right. Stockholders are entitled to dissenter's rights as to the
proposal to change Datigen's state of incorporation from Utah to Nevada.
PROPOSAL NO. 1
APPROVAL OF REINCORPORATION OF THE COMPANY
QUESTIONS AND ANSWERS
The following questions and answers are intended to respond to frequently asked
questions concerning the reincorporation of Datigen in Nevada
("Reincorporation"). These questions do not, and are not intended to, address
all the questions that may be important to you. You should carefully read the
entire Proxy Statement, as well as its appendices and the documents incorporated
by reference in this Proxy Statement.
Q: Why is Datigen reincorporating in Nevada?
A: We believe that the Reincorporation in Nevada will give us more flexibility
and simplicity in various corporate transactions. Nevada has adopted a General
Corporation Law that includes by statute many concepts created by judicial
rulings in other jurisdictions and provides additional rights in connection with
the issuance and redemption of stock. Nevada has developed a flexible body of
corporate law that is responsive to the needs of modern business. Nevada has
taken affirmative steps to encourage corporations to establish themselves in the
state of Nevada, including reduced filing fees and corporate taxes, expedited
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filing procedures and flexible policies. The Board believes that the advantages
offered by the corporate laws of Nevada will make Datigen a more manageable
corporation for accomplishing its business activities.
Q: What are the principal features of the Reincorporation?
A: The Reincorporation will be accomplished by a merger of Datigen with and into
our wholly owned subsidiary, Smart Energy Solutions, Inc. ("Battery Brain"). One
new share of Battery Brain common stock will be issued for each share of our
Common Stock held by our stockholders on the record date for the
Reincorporation. The shares of Datigen will cease to trade on the
Over-The-Counter Bulletin Board market. The shares of Battery Brain will begin
trading in their place beginning on or about the effective date of the
Reincorporation under a new CUSIP number and a new trading symbol which has not
yet been assigned. Options and warrants to purchase Common Stock of Datigen will
also be exchanged or exchangeable for similar securities issued by Battery Brain
without adjustment as to the number of shares issuable or the exercise price.
Q: How will the Reincorporation affect my ownership of Datigen?
A: After the effective date of the Reincorporation and the exchange of your
stock certificates, you will own the same number of shares and the same class as
you held immediately before the Reincorporation.
Q: How will the Reincorporation affect the owners, officers, directors and
employees of Datigen?
A: Our officers, directors and employees will become the officers, directors and
employees of Battery Brain after the effective date of the Reincorporation.
Q: How will the Reincorporation affect the business of Datigen?
A: Currently, the only asset of Datigen is the binding letter of intent to
acquire the assets of the Battery Brain product from Purisys, Inc., an
unaffiliated New Jersey corporation. If the Reincorporation is approved by the
shareholders, Battery Brain will acquire the assets from Purisys and effect the
business of manufacturing, marketing and selling Battery Brain. Datigen (Utah)
will cease to exist on the effective date of the Reincorporation; following the
merger, the assets and liabilities of Battery Brain will consist solely of the
assets and liabilities of Datigen. Battery Brain has no assets or liabilities
and no previous operating history.- it has been formed for the sole purpose of
changing the domicile of Datigen. If the Reincorporation is not approved,
Datigen will acquire the assets from Purisys and effect the business of
manufacturing, marketing and selling Battery Brain.
Q: How do I exchange certificates of Datigen for certificates of Battery Brain?
A: If the Reincorporation is approved by the stockholders, promptly after the
effective date of the Reincorporation, you should receive a letter of
transmittal and instructions for use in surrendering certificates representing
your shares. Upon the surrender of each certificate formerly representing Common
Stock, together with a properly completed letter of transmittal, such stock
certificate shall be cancelled; upon such cancellation, each shareholder
participating in the exchange will receive shares of Battery Brain common stock
in exchange for their shares of common stock of Datigen. We will issue new share
certificates representing the shares in Battery Brain. Until so surrendered and
exchanged, each Datigen stock certificate shall represent solely the right to
receive shares in Battery Brain. Battery Brain has no prior operating history,
and, therefore, no prior trading market; however, we expect that the Battery
Brain common shares will be able to trade on the OTCBB at or about the effective
date of the Reincorporation.
Q: What happens if I do not surrender my certificates of Datigen?
A: You are not required to surrender certificates representing shares of Datigen
to receive shares of Battery Brain. All shares of Datigen outstanding after the
effective date of the Reincorporation continue to be valid. Until you receive
shares of Battery Brain you are entitled to receive notice of or vote at
stockholder meetings or receive dividends or other distributions on the shares
of Datigen. However, if the Reincorporation is approved by the shareholders, the
merger certificate will be filed and Datigen the Utah corporation will cease to
exist. In such event, Datigen will cease to trade on the OTCBB and there will be
no trading market for the Datigen stock certificates.
Even if you do not surrender your Datigen certificates, you still have appraisal
rights if you do not vote for the Reincorporation provided you follow properly
your dissenter and appraisal rights as described below under "Dissenters'
Rights".
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Q: What if I have lost Datigen certificates?
A: If you have lost your Datigen certificates, you should contact our transfer
agent as soon as possible to have a new certificate issued. You may be required
to post a bond or other security to reimburse us for any damages or costs if the
certificate is later delivered for conversion. Our transfer agent may be reached
at:
Manhattan Transfer Registrar Company
P.O. Box 756
Miller Place, NY 11764
Telephone: (631) 585-7341
Facsimile: (631) 580-7766
Q: Can I require Datigen to purchase my stock?
A: Yes. Under the Utah Revised Business Corporation Act, you are entitled to
appraisal and purchase of your stock as a result of the Reincorporation if you
dissent to the Reincorporation.
Q: Who will pay the costs of Reincorporation?
A: Datigen will pay all of the costs of Reincorporation in Nevada, including
distributing this Proxy Statement. We may also pay brokerage firms and other
custodians for their reasonable expenses for forwarding information materials to
the beneficial owners of our Common Stock. We do not anticipate contracting for
other services in connection with the Reincorporation. Each stockholder must pay
the costs of exchanging their certificates for new certificates.
Q: Will I have to pay taxes on the new certificates?
A: We believe that the Reincorporation is not a taxable event and that you will
be entitled to the same basis in the shares of Battery Brain that you had in our
Common Stock. No gain or loss will be recognized to the holders of capital stock
of Datigen upon receipt of Battery Brain stock pursuant to the reincorporation,
and no gain or loss will be recognized by the company. Datigen has not obtained
a ruling from the Internal Revenue Service or an opinion of legal or tax counsel
with respect to the consequences of the reincorporation.
EVERYONE'S TAX SITUATION IS DIFFERENT AND YOU SHOULD CONSULT WITH YOUR PERSONAL
TAX ADVISOR REGARDING THE TAX EFFECT OF THE REINCORPORATION.
Q: What effect does the Reincorporation have on the price volatility and
liquidity of the shares of Datigen?
A: We cannot predict what effect the Reincorporation will have on our market
price prevailing from time to time or the liquidity of our shares.
Q: What happens if the shareholders vote for the Reincorporation but do not vote
to approve the proposed changes to the Articles and Bylaws of Datigen?
A: If the shareholders vote for the merger but do not vote to approve the change
in the name of the company, the increase in the authorized share capital, the
authorization of the preferred shares or any of the other proposed changes to
the Articles and Bylaws, then Datigen will become a Nevada corporation with the
Articles and Bylaws which are currently in effect.
Q: What happens if the shareholders do not vote for the Reincorporation but
approve the proposed changes to the Articles and Bylaws of Datigen?
A: If the shareholders do not vote to reincorporate the company in Nevada but
desire to maintain the existence of the company in Utah, the Board will file the
applicable amendments to the Articles of Datigen in Utah to approve the specific
change(s) approved by the shareholders. For example, if the shareholders vote to
change the name of Datigen to "Smart Energy Solutions, Inc.", then an amendment
will be filed to the Articles of Datigen in Utah to change the name of the
company to such name.
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REASONS FOR THE REINCORPORATION
We believe that Reincorporation in Nevada will give Datigen a greater measure of
flexibility and simplicity in corporate governance than is available under Utah
law. The State of Nevada is recognized for adopting comprehensive modern and
flexible corporate laws which are periodically revised to respond to the
changing legal and business needs of corporations. For this reason, many major
corporations have initially incorporated in Nevada or have changed their
corporate domiciles to Nevada in a manner similar to that proposed by Datigen.
Consequently, the Nevada judiciary has become particularly familiar with
corporate law matters and a substantial body of court decisions has developed
construing Nevada Law. Nevada corporate law, accordingly, has been and is likely
to continue to be, interpreted in many significant judicial decisions, a fact
which may provide greater clarity and predictability with respect to Datigen's
corporate legal affairs. For these reasons, the Board believes that Datigen's
business and affairs can be conducted more advantageously if Datigen is able to
operate under Nevada Law.
PRINCIPAL FEATURES OF THE REINCORPORATION
The Reincorporation will be effected by the merger of Datigen with and into
Battery Brain pursuant to an agreement and plan of merger (the "Plan of
Merger"). Battery Brain is a wholly-owned subsidiary of Datigen, incorporated
under the Nevada Revised Statutes (the "Nevada Law") for the sole purpose of
effectuating the Reincorporation. Battery Brain has no operations and no assets
or liabilities. If the Plan of Merger is approved, all the assets and
liabilities of Datigen will become the assets and liabilities of Battery Brain.
The Reincorporation will become effective upon the filing of the requisite
merger documents in Nevada and Utah, which filings will occur upon approval of
Datigen's stockholders to the Reincorporation, or as soon as practicable
thereafter (the "Effective Date"). This summary does not include all of the
provisions of the Plan of Merger, a copy of which is attached hereto as Appendix
B.
On the Effective Date of the Reincorporation, (i) any fractional shares of
Battery Brain common stock that a holder of shares of Datigen Common Stock would
otherwise be entitled to receive upon exchange of his Datigen Common Stock will
be canceled with the holder thereof being entitled to receive one whole share of
Battery Brain common stock, and (ii) each outstanding share of Datigen Common
Stock held by Datigen shall be retired and canceled and shall resume the status
of authorized and unissued Battery Brain common stock.
The Articles of Incorporation and Bylaws of Battery Brain are significantly
different from the Articles of Incorporation and By-Laws of Datigen.
Accordingly, an affirmative vote for the Plan of Merger does not necessarily
represent a vote for the adoption by the shareholders of the Articles and Bylaws
of Battery Brain. Since the adoption of the Articles and Bylaws of Battery Brain
are separate actions distinct from the vote on the Plan of Merger, each of these
differences between the Articles and By-Laws of Datigen from the Articles and
Bylaws of Battery Brain are presented as separate proposals to be voted on at
the Special Meeting. The vote for the Reincorporation is separate from the vote
for the amendments to the Articles of Incorporation and By-Laws. Because of the
differences between the Articles of Incorporation and By-Laws of Datigen and the
laws of the State of Utah which govern Datigen, and the Articles of
Incorporation and By-Laws of Battery Brain and the laws of the State of Nevada
which govern Battery Brain, your rights as stockholders will be affected by the
Reincorporation. See the information under "Significant Changes in Datigen's
Charter and By-Laws" and "Comparative Rights of Stockholders under Utah and
Nevada Law" for a summary of the differences between the Articles of
Incorporation and By-Laws of Datigen and the laws of the State of Utah and the
Articles of Incorporation and By-Laws of Battery Brain and the laws of the State
of Nevada.
The new board of directors will consist of those persons presently serving on
the board of directors of Datigen. The individuals who will serve as executive
officers of Battery Brain are those who currently serve as executive officers of
Datigen. Such persons and their respective terms of office are set forth below
under the caption "Reincorporation in Nevada - Officers and Directors."
Datigen's business operations will continue at the offices located at 92
Washington Avenue, Cedarhurst, New York 11516.
ABANDONMENT
Pursuant to the terms of the Plan of Merger, the merger may be abandoned by the
boards of directors of Datigen and Battery Brain at any time prior to the
Effective Date. In addition, the Board of Datigen may amend the Plan of Merger
at any time prior to the Effective Date provided that any amendment made may
not, without approval by the stockholders of Datigen, alter or change the amount
or kind of Battery Brain common stock to be received in exchange for or on
conversion of all or any of Datigen Common Stock, alter or change any term of
the Articles of Incorporation of Battery Brain (the "Battery Brain Articles") or
alter or change any of the terms and conditions of the Plan of Merger if such
alteration or change would adversely affect the holders of Datigen Common Stock.
The Board has made no determination as to any circumstances which may prompt a
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decision to abandon the Reincorporation. Approval by stockholders of the
Reincorporation will constitute approval of the Plan of Merger, but not
necessarily the adoption of the Articles of Incorporation and the Bylaws of
Battery Brain. Each of the differences between the Articles of Datigen and
Battery Brain and those of the Bylaws of Datigen and Battery Brain must be
affirmatively adopted by the shareholders at the Special Meeting.
CORPORATE NAME
Immediately following the merger, Battery Brain will be the surviving
corporation and its name will remain unchanged.
MATERIAL TAX CONSEQUENCES FOR STOCKHOLDERS
The following description of federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended (the "Code"), and applicable Treasury
regulations promulgated thereunder. This summary does not address the tax
treatment of special classes of stockholders, such as banks, insurance
companies, tax-exempt entities and foreign persons. Stockholders desiring to
know their individual federal, state, local and foreign tax consequences should
consult their own tax advisors.
The Reincorporation is intended to qualify as a tax-free reorganization under
Section 368(a)(1)(F) or 368(a)(1)(A) of the Code. Assuming such tax treatment,
no taxable income, gain, or loss will be recognized by Datigen or the
stockholders as a result of the exchange of shares of Datigen Common Stock for
shares of Battery Brain common stock upon consummation of the transaction. The
Reincorporation and change of each share of Datigen's Common Stock into one
share of Battery Brain common stock will be a tax-free transaction, and the
holding period and tax basis of Common Stock will be carried over to the Battery
Brain common stock received in exchange therefor.
Because of the complexity of the capital gains and loss provisions of the Code
and because of the uniqueness of each individual's capital gain or loss
situation, stockholders contemplating exercising statutory appraisal rights
should consult their own tax advisor regarding the federal income tax
consequences of exercising such rights. State, local or foreign income tax
consequences to stockholders may vary from the federal income tax consequences
described above. STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISOR AS TO
THE CONSEQUENCES TO THEM OF THE REINCORPORATION UNDER ALL APPLICABLE TAX LAWS.
ACCOUNTING TREATMENT OF THE REINCORPORATION
For U.S. accounting purposes, the Reincorporation of our company from a Utah
corporation to a Nevada corporation represents a transaction between entities
under common control. Assets and liabilities transferred between entities under
common control are accounted for at historical cost, in accordance with the
guidance for transactions between entities under common control in Statement of
Financial Accounting Standards No. 141, Business Combinations. The historical
comparative figures of Datigen will be those of Battery Brain.
PRICE VOLATILITY
We cannot predict what effect the Reincorporation will have on our market price
prevailing from time to time or the liquidity of our shares.
APPRAISAL RIGHTS
Stockholders are entitled to dissenter's rights of appraisal as to the
Reincorporation if they dissent thereto. See "Dissenters' Rights."
SIGNIFICANT CHANGES IN DATIGEN'S CHARTER AND BY-LAWS TO BE IMPLEMENTED IF THE
SHAREHOLDERS APPROVE THE CHANGES TO THE ARTICLES AND BY-LAWS
Datigen was incorporated under the laws of the State of Utah and Battery Brain
was incorporated under the laws of the State of Nevada. Upon the
Reincorporation, the stockholders of Datigen will become stockholders of Battery
Brain. Their rights as stockholders will be governed by Title 7, Chapter 78 of
the Nevada Law.
If the shareholders approve the changes described in this proxy regarding the
Articles of Incorporation and By-Laws of Battery Brain, the Articles of
Incorporation and By-Laws of Datigen will no longer be applicable. There are
significant differences between some of the provisions of the Articles and
By-laws of Datigen as compared to some of the provisions of the Articles and
Bylaws of Battery Brain. The other proposals to be voted upon at the Special
Meeting relate to these differences and are further explained in the other
proposals contained in this Proxy.
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COMPARATIVE RIGHTS OF STOCKHOLDERS UNDER UTAH AND NEVADA LAW
The Nevada General Corporation Law (the "Nevada Code") differs from the Utah
Revised Business Corporation Act (the "Utah Code") in certain respects. It is
impractical to describe all such differences, but the following is a summary
description of the more significant differences. This summary description is
qualified in its entirety by reference to the Nevada Code and the Utah Code.
ELECTION AND REMOVAL OF DIRECTORS
In both Nevada and Utah, a director will hold office until the next annual
meeting of stockholders and until his or her successor is elected and qualified,
and a director may be removed during his or her term with or without cause.
However, under the Nevada Code, such removal must be approved by the vote of not
less than two thirds of the voting power of the corporation at a meeting called
for that purpose; whereas under the Utah Code, such removal must be approved by
a majority vote of the stockholders. Moreover, vacancies on the board of
directors may be filled under the Nevada Code by the directors; whereas under
the Utah Code, such vacancies may be filled by either the stockholders or the
directors.
INSPECTION OF BOOKS AND RECORDS
In both Nevada and Utah, certain stockholders have the right to inspect certain
books and records of the Corporation. In Nevada, such a right is available to
any stockholder of record of a corporation for at least six months immediately
preceding the demand, or any person holding at least 5% of all of its
outstanding shares. In Utah, such a right is available to any stockholder (and
such stockholder's agent or attorney) who provides the company with a written
demand at least five business days before the date the stockholder wishes to
make an inspection. Under the Nevada Code, the books and records that may be
inspected are the company's stock ledger, a list of its stockholders, and its
other books and records. Under the Utah Code, the books and records that may be
inspected are (i) the articles of incorporation, bylaws, minutes of stockholders
meetings for the previous three years, written communications to stockholders
for the previous three years, names and business addresses of the officers and
directors, the most recent annual report delivered to the State of Utah, and
financial statements for the previous three years, and (ii) if the stockholder
is acting in good faith and directly connected to a proper purpose, excerpts
from the records of the board of directors and stockholders (including minutes
of meetings, written consents and waivers of notices), accounting records and
stockholder lists. Under both the Utah and Nevada Codes, the inspection is to
take place during normal business hours and copies of the inspected documents
may be made by the stockholder.
TRANSACTIONS WITH OFFICERS AND DIRECTORS
Both Nevada and Utah regulate transactions between a corporation and any of its
directors or officers in which such director or officer is financially
interested.
Under Nevada law, such transactions are not automatically void or voidable if
(i) the fact of the common directorship, office or financial interest is known
to the board of directors or committee, and the board or committee authorizes,
approves or ratifies the contract or transactions in good faith by a vote
sufficient for the purpose, without counting the vote or votes of the common or
interested director or directors, or (ii) the contract or transaction, in good
faith, is ratified or approved by the holders of a majority of the voting power,
or (iii) the fact of common directorship, office or financial interest known to
the director or officer at the time of the transactions is brought before the
board of directors for actions, or (iv) the contract or transaction is fair to
the corporation at the time it is authorized or approved. Common or interested
directors may be counted to determine presence of a quorum and if the votes of
the common or interested directors are not counted at the meeting, then a
majority of directors may authorize, approve or ratify a contract or
transactions.
Under Utah law provides that every director who, directly or indirectly, is
party to, has beneficial interest in or is closely linked to a proposed
corporate transaction that is financially significant to the director is liable
to account to the corporation for any profit made as a consequence of the
corporation entering into such transaction, unless such person (a) disclosed his
or her interest at the meeting of directors where the proposed transaction was
considered and thereafter the transaction was approved by a majority of the
disinterested directors; (b) disclosed his or her interest prior to a meeting or
written consent of stockholders and thereafter the transaction was approved by a
majority of the disinterested shares; or (c) can show that the transaction was
fair and reasonable to the corporation.
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LIMITATION ON LIABILITY OF DIRECTORS; INDEMNIFICATION OF OFFICERS AND DIRECTORS
Nevada law permits corporations to indemnify its directors, officers, and other
agents to a greater extent than Utah law.
Under Utah law, a corporation may indemnify a director, officer, or other agent
only if such person acted in good faith and reasonably believed his or her
conduct to be in the corporation's best interests, and, in the case of a
criminal proceeding, had no reasonable cause to believe his or her conduct was
unlawful.
Utah law also permits a corporation to indemnify its directors, officers,
employees and other agents in connection with a proceeding by or in the right of
the corporation to procure a judgment in its favor by reason of the fact that
the person is such an agent of the corporation, against expenses actually and
reasonably incurred by such person in connection with the proceeding. Utah law
prohibits the indemnification of an agent in connection with a proceeding by or
in the right of the corporation in which the director, officer, employee or
agent was adjudged liable to the corporation, or in connection with any other
proceeding in which the agent is adjudged liable on the basis that the agent
derived an improper personal benefit.
NEVADA. Nevada law provides for discretionary indemnification 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. The determination must be made either: (i) by the stockholders;
(ii) by the board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding; (iii) if a
majority vote of a quorum consisting of directors who were not parties to the
actions, suit or proceeding so orders, by independent legal counsel in a written
opinion; or (iv) If a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal counsel in a
written opinion. The Articles of Incorporation, the bylaws or an agreement made
by the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the actions, suit or proceeding, upon receipt of an undertaking
by or on behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. The provisions do not affect any
right to advancement of expenses to which corporate personnel other than
directors or officers may be entitled under any contract or otherwise by law.
The indemnification and advancement of expenses authorized in or ordered by a
court pursuant to Nevada law does not exclude any other rights to which a person
seeking indemnification or advancement of expenses may be entitled under the
Articles of Incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his or her
official capacity or an action in another capacity while holding office, except
that indemnification, unless ordered by a court or for the advancement of
expenses, may not be made to or on behalf of any director or officer if his or
her acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and were material to the cause of action. In addition,
indemnification continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
UTAH. Utah law permits a corporation, if so provided in its articles of
incorporation, its bylaws or in a stockholder resolution, to eliminate or limit
the personal liability of a director to the corporation or its stockholders for
monetary damages due to any actions taken or any failure to take actions as a
director, except liability for: (a) improper financial benefits received by a
director; (b) intentional inflictions of harm on the corporation or its
stockholders; (c) payment of dividends to stockholders making the corporation
insolvent; and (d) intentional violations of criminal law.
Under Utah law, a corporation may indemnify its current and former directors,
officers, employees and other agents made party to any proceeding because of
their relationship to the corporation against expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred in connection
with such proceeding if that person acted in good faith and reasonably believed
his or her conduct to be in the corporation's best interests, and, in the case
of a criminal proceeding, had no reasonable cause to believe his or her conduct
was unlawful. Utah law also permits a corporation to indemnify its directors,
officers, employees and other agents in connection with a proceeding by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that the person is such an agent of the corporation, against expenses
actually and reasonably incurred by such person in connection with the
proceeding. Utah law prohibits the indemnification of an agent in connection
with a proceeding by or in the right of the corporation in which the director,
officer, employee or agent was adjudged liable to the corporation, or in
connection with any other proceeding in which the agent is adjudged liable on
the basis that the agent derived an improper personal benefit. The Utah charter
documents permit indemnification of all such persons whom the corporation has
the power to indemnify to the fullest extent legally permissible under Utah law.
Utah law permits a corporation to advance expenses incurred by a director,
officer, employee or agent who is a party to a proceeding in advance of final
disposition of the proceeding if that person provides (a) a written affirmation
of his good faith belief that he acted in good faith, in the corporation's best
interests and, in the case of a criminal proceeding, had no reasonable cause to
believe his conduct was unlawful; (b) a written undertaking by or on behalf of
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that person to repay the advance if it is ultimately determined that such
person's conduct did not meet the statutory standard required for
indemnification; and (c) the corporation determines under the facts then known
that indemnification would not be precluded. The Utah charter documents permit
such advances.
VOTING RIGHTS WITH RESPECT TO EXTRAORDINARY CORPORATE TRANSACTIONS
NEVADA. Approval of mergers and consolidations and sales, leases or
exchanges of all or substantially all of the property or assets of a
corporation, whether or not in the ordinary course of business, requires the
affirmative vote or consent of the holders of a majority of the outstanding
shares entitled to vote, except that, unless required by the articles of
incorporation, no vote of stockholders of the corporation surviving a merger is
necessary if: (i) the merger does not amend the articles of incorporation of the
corporation; (ii) each outstanding share immediately prior to the merger is to
be an identical share after the merger, and (iii) either no common stock of the
corporation and no securities or obligations convertible into common stock are
to be issued in the merger, or the common stock to be issued in the merger, plus
that initially issuable on conversion of other securities issued in the merger
does not exceed 20% of the common stock of the corporation outstanding
immediately before the merger.
UTAH. A merger, share exchange or sale of all or substantially all of the
assets of a corporation (other than a sale in the ordinary course of the
corporation's business) requires the approval of a majority (unless the articles
of incorporation, the bylaws or a resolution of the board of directors requires
a greater number) of the outstanding shares of the corporation voting in
separate voting groups, if applicable). No vote of the stockholders of the
surviving corporation in a merger is required if :(i) the articles of
incorporation of the surviving corporation will not be changed; (ii) each
stockholder of the surviving corporation whose shares were outstanding
immediately before the effective date of the merger will hold the same number of
shares, with identical designations, preferences, limitations and relative
rights, immediately after the merger; (iii) the number of voting shares
outstanding immediately after the merger, plus the number of voting shares
issuable as a result of the merger (either by the conversion of securities
issued pursuant to the merger or the exercise of rights and warrants issued
pursuant to the merger), will not exceed by more than 20% of the total number of
voting shares of the surviving corporation outstanding immediately before the
merger; and (iv) the number of participating shares (shares that entitle their
holder to participate without limitation in distributions) outstanding
immediately after the merger, plus the number of participating shares issuable
as a result of the merger (either by the conversion of securities issued
pursuant to the merger or the exercise of rights and warrants issued pursuant to
the merger), will not exceed by more than 20% the total number of participating
shares of the surviving corporation outstanding immediately before the merger.
Both Utah and Nevada law require that a sale of all or substantially all of the
assets of a corporation be approved by a majority of the outstanding voting
shares of the corporation transferring such assets. With certain exceptions,
Utah law also requires certain sales of assets and similar transactions be
approved by a majority vote of each class of shares outstanding. In contrast,
Nevada law generally does not require class voting, except in certain
transactions involving an amendment to the articles of incorporation that
adversely affects a specific class of shares.
STOCKHOLDERS' CONSENT WITHOUT A MEETING
NEVADA. Unless otherwise provided in the articles of incorporation or the
bylaws, any actions required or permitted to be taken at a meeting of the
stockholders may be taken without a meeting if, before or after taking the
actions, a written consent is signed by the stockholders holding at least a
majority of the voting power, except that if a different proportion of voting
power is required for such an actions at a meeting, then that proportion of
written consent is required. In no instance where action is authorized by
written consent need a meeting of the stockholders be called or notice given.
UTAH. Unless otherwise provided in the articles of incorporation, actions
requiring the vote of stockholders may be taken without a meeting and without
prior notice by one or more written consents of the stockholders having not less
than the minimum number of votes that would be necessary to take such actions at
a meeting at which all shares entitled to vote thereon were present and voted
(if stockholder action is by less than unanimous written consent, notice must be
provided to the stockholders who did not consent at least ten days before the
consummation of the transactions, actions or event authorized by the
stockholders). However, any written consent for the election of directors must
be unanimous.
STOCKHOLDER VOTING REQUIREMENTS
NEVADA. Unless the articles of incorporation or bylaws provide for
different proportions, a majority of the voting power, which includes the voting
power that is present in person or by proxy, regardless of whether the proxy has
authority to vote on all matters, constitutes a quorum for the transactions of
business. In all matters other than the election of directors, the affirmative
vote of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders. Directors must be elected by a plurality of the votes of the
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shares present in person or represented by proxy at the meeting and entitled to
vote on the election of directors. Where a separate vote by a class or series or
classes or series is required, a majority of the voting power of the class or
series that is present or by proxy, regardless of whether the proxy has
authority to vote on all matters, constitutes a quorum for the transaction of
business. An act by the stockholders of each class or series is approved if a
majority of the voting power of a quorum of the class or series votes for the
actions.
UTAH. Unless the articles or incorporation provide otherwise, a majority
of the votes entitled to be cast on a matter by the voting group constitutes a
quorum of that voting group for actions on that matter. Once a share is
represented for any purpose at a meeting, including the purpose of determining
that a quorum exists, it is deemed present for quorum purposes for the remainder
of the meeting and for any adjournment of that meeting, unless a new record date
is or must be set for that adjourned meeting. Unless the articles of
incorporation provide otherwise, if a quorum exists, actions on a matter, other
than the election of directors, by a voting group is approved if the votes cast
within the voting group favoring the actions exceed the votes cast within the
voting group opposing the actions. Unless otherwise provided in the articles of
incorporation, directors are elected by a plurality of the votes cast by the
shares entitled to vote in the election, at a meeting of shareholders at which a
quorum is present. Shareholders do not have a right to cumulate their votes for
the election of directors unless the articles of incorporation provide for such
cumulation of votes. Shares entitled to vote cumulatively may be voted
cumulatively at each election of directors unless the articles of incorporation
provide alternative procedures for the exercise of cumulative voting.
DIVIDENDS
NEVADA. A corporation is prohibited from making a distribution to its
stockholders if, after giving effect to the distribution, the corporation would
not be able to pay its debts as they become due in the usual course of business
or the corporation's total assets would be less than its total liabilities (plus
any amounts necessary to satisfy any preferential rights).
UTAH. A corporation is prohibited from making a distribution to its
stockholders if, after giving effect to the distribution, the corporation would
not be able to pay its debts as they become due in the usual course of business
or the corporation's total assets would be less than its total liabilities (plus
any amounts necessary to satisfy any preferential rights).
ANTITAKEOVER PROVISIONS
UTAH. The Utah Control Share Acquisitions Act provides, among other
things, that, when any person obtains shares (or the power to direct the voting
shares) of "an issuing public corporation" such that the person's voting power
equals or exceeds any of three levels (20%, 33 1/3% or 50%), the ability to vote
(or to direct the voting of) the "control shares" is conditioned on approval by
a majority of the corporation's shares (voting in voting groups, if applicable),
excluding the "interested shares". Stockholder approval may occur at the next
annual meeting of the stockholders, or, if the acquiring person requests and
agrees to pay the associated costs of the corporation, at a special meeting of
the stockholders (to be held within 50 days of the corporation's receipt of the
request by the acquiring person). If authorized by the articles of incorporation
or the bylaws, the corporation may redeem "control shares" at the fair market
value if the acquiring person fails to file an "acquiring person statement" or
if the stockholders do not grant voting rights to control shares. (The Company's
current Articles of Incorporation have no such provision). If the stockholders
grant voting rights to the control shares, and if the acquiring person obtained
a majority of the voting power, stockholders may be entitled to dissenters'
rights under the Utah Code. An acquisition of shares does not constitute a
control share acquisition if (i) the corporation's articles of incorporation or
bylaws provide that this Act does not apply, (ii) the acquisition is consummated
pursuant to a merger in accordance with the Utah Code or (iii) under certain
other specified circumstances.
NEVADA. Nevada's "Acquisition of Controlling Interest Statute" applies to
Nevada corporations that have at least 200 stockholders, with at least 100
stockholders of record being Nevada residents, and that do business directly or
indirectly in Nevada. At present, Datigen has fewer than 100 Nevada residents as
record stockholders. Where applicable, the statute prohibits an acquiror from
voting shares of a target company's stock after exceeding certain threshold
ownership percentages, until the acquiror provides certain information to the
company and a majority of the disinterested stockholders vote to restore the
voting rights of the acquiror's shares at a meeting called at the request and
expense of the acquiror. If the voting rights of such shares are restored,
stockholders voting against such restoration may demand payment for the "fair
value" of their shares (which is generally equal to the highest price paid in
the transaction subjecting the stockholder to the statute).The Nevada Code also
restricts a "business combination" with "interested stockholders", unless
certain conditions are met, with respect to corporations which have at least 200
stockholders of record. A "business combination" includes (a) any merger with an
"interested stockholder," or any other corporation which is or after the merger
would be, an affiliate or associate of the interested stockholder, (b) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of assets, to
11
an "interested stockholder," having (i) an aggregate market value equal to 5% or
more of the aggregate market value of the corporation's assets; (ii) an
aggregate market value equal to 5% or more of the aggregate market value of all
outstanding shares of the corporation; or (iii) representing 10% or more of the
earning power or net income of the corporation, (c) any issuance or transfer of
shares of the corporation or its subsidiaries, to the "interested stockholder,"
having an aggregate market value equal to 5% or more of the aggregate market
value of all the outstanding shares of the corporation, (d) the adoption of any
plan or proposal for the liquidation or dissolution of the corporation proposed
by the "interested stockholder," (e) certain transactions which would result in
increasing the proportionate percentage of shares of the corporation owned by
the "interested stockholder," or (f) the receipt of benefits, except
proportionately as a stockholder, of any loans, advances or other financial
benefits by an "interested stockholder." An "interested stockholder" is a person
who, together with affiliates and associates, beneficially owns (or within the
prior three years, did beneficially own) 10% or more of the corporation's voting
stock. A corporation to which this statute applies may not engage in a
"combination" within three years after the interested stockholder acquired its
shares, unless the combination or the interested stockholder's acquisition of
shares was approved by the board of directors before the interested stockholder
acquired the shares. If this approval was not obtained, then after the three
year period expires, the combination may be consummated if all applicable
statutory requirements are met and either (a) (i) the board of directors of the
corporation approves, prior to such person becoming an "interested stockholder",
the combination or the purchase of shares by the "interested stockholder" or
(ii) the combination is approved by the affirmative vote of holders of a
majority of voting power not beneficially owned by the "interested stockholder"
at a meeting called no earlier than three years after the date the "interested
stockholder" became such or (b) (i) the aggregate amount of cash and the market
value of consideration other than cash to be received by holders of common
shares and holders of any other class or series of shares meets certain minimum
requirements set forth in the statutes and (ii) prior to the consummation of the
"combination", except in limited circumstances, the "interested stockholder"
will not have become the beneficial owner of additional voting shares of the
corporation.
APPRAISAL RIGHTS; DISSENTERS' RIGHTS
UTAH. In connection with a merger, share exchange or sale, lease, exchange
or other disposition of all or substantially all of the assets of a corporation
(other than in the ordinary course of the corporation's business), a dissenting
stockholder, after complying with certain procedures, is entitled to payment
from the corporation of the fair value of the stockholder's shares. The fair
value is estimated by the corporation. However, if the stockholder is unwilling
to accept the corporation's estimate, the stockholder may provide the
corporation with an estimate of the fair value and demand payment of that
amount. If the corporation is unwilling to pay that amount, the corporation is
to apply for judicial determination of the fair value. Unless the articles of
incorporation, bylaws or a resolution of the board of directors provide
otherwise, stockholders are not entitled to dissenters' rights when the shares
are listed on a national securities exchange or the National Market System of
NASDAQ, or are held of record by more than 2,000 holders. However, this
exception does not apply if, pursuant to the corporate action, the stockholder
will receive anything except (i) shares of the surviving corporation, (ii)
shares of a corporation that is or will be listed on a national securities
exchange, the National Market System of NASDAQ, or held of record by more than
2,000 holders, (iii) cash in lieu of fractional shares or (iv) any combination
of the foregoing.
NEVADA. Nevada Law similarly limits dissenters rights, when the shares of
the corporation are listed on a national securities exchange included in the
National Market System established by the National Association of Securities
Dealers, Inc. or are held by at least 2,000 stockholders of record, unless the
stockholders are required to accept in exchange for their shares anything other
than cash or (i) shares in the surviving corporation, (ii) shares in another
entity that is publicly listed or held by more than 2,000 stockholders, or (iii)
any combination of cash or shares in an entity described in (i) or (ii). Also,
the Nevada Code does not provide for dissenters' rights in the case of a sale of
assets.
SPECIAL MEETINGS OF STOCKHOLDERS
UTAH. Special meetings of the stockholders may be called by: (i) the board
of directors, (ii) the person or persons authorized by the bylaws to call a
special meeting, or (iii) the holders of shares representing at least 10% of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. The corporation shall give notice of the date, time and place of the
meeting no fewer than 10 and no more than 60 days before the meeting. Notice of
a special meeting must include a description of the purposes for which the
special meeting is called.
NEVADA. The Nevada Code provides that a special meeting of stockholders
may be called by: (i) a corporation's board of directors; (ii) the persons
authorized by the articles of incorporation or bylaws; or (iii) the holders of
not less than 10% of all votes entitled to be cast on any issue to be considered
at the proposed special meeting. A corporation's articles of incorporation may
require a higher percentage of votes, up to a maximum of 50% to call a special
meeting of stockholders. Battery Brain's current Articles of Incorporation do
not include any such provision. The current Bylaws of Battery Brain provide that
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a special meeting of stockholders may be called by the board of directors, the
president, or a majority of the stockholders of record of all shares entitled to
vote.
STOCKHOLDERS' CONSENT WITHOUT A MEETING
UTAH. Unless otherwise provided in the articles of incorporation, action
requiring the vote of stockholders may be taken without a meeting and without
prior notice by one or more written consents of the stockholders having not less
than the minimum number of votes that would be necessary to take such action at
a meeting at which all shares entitled to vote thereon were present and voted
(if stockholder action is by less than unanimous written consent, notice shall
be provided to the stockholders who did not consent at least ten days before the
consummation of the transaction, action or event authorized by the
stockholders). However, any written consent for the election of directors must
be unanimous and the stockholders of any corporation in existence prior to July
1, 1992, are required to adopt a resolution permitting action by less than
unanimous written consent; otherwise, the stockholders are only permitted to act
by unanimous written consent.
NEVADA. The Nevada Code permits corporate action without a meeting of
stockholders upon the written consent of the holders of that number of shares
necessary to authorize the proposed corporate action being taken, unless the
certificate of incorporation or articles of incorporation, respectively,
expressly provide otherwise. In the event such proposed corporate action is
taken without a meeting by less than the unanimous written consent of
stockholders, the Nevada Code requires notice of the taking of such action be
sent to those stockholders who have not consented in writing within ten days of
the date such stockholder authorization is granted.
DISSENTERS' RIGHTS AS A RESULT OF THE REINCORPORATION
Stockholders of Datigen will have dissenters' rights under Utah law as a
result of the proposed Reincorporation. Stockholders who oppose the
Reincorporation will have the right to receive payment for the value of their
shares as set forth in Sections 16-10(a)-1301 et seq. of the Utah Code. A copy
of these sections is attached hereto as Appendix B to this Proxy Statement. The
material requirements for a stockholder to properly exercise his or her rights
are summarized below. However, these provisions are very technical in nature,
and the following summary is qualified in its entirety by the actual statutory
provisions that should be carefully reviewed by any stockholder wishing to
assert such rights.
Under the Utah Code, such dissenters' rights will be available only to
those stockholders of Datigen who (i) object to the proposed Reincorporation in
writing prior to or at the Special Meeting before the vote on the matter is
taken (a negative vote will not itself constitute such a written objection); and
(ii) do not vote any of their shares in favor of the proposed Reincorporation at
the Special Meeting. Within ten days after the effective date of the
Reincorporation, Battery Brain will send to each stockholder who has satisfied
both of the foregoing conditions a written notice in which Battery Brain will
notify such stockholders of their right to demand payment for their shares and
will supply a form for dissenting stockholders to demand payment. Stockholders
will have 30 days to make their payment demands or lose such rights. If required
in the notice, each dissenting stockholder must also certify whether or not he
or she acquired beneficial ownership of such shares before or after the date of
the first announcement to the news media of the proposed transaction. Upon
receipt of each demand for payment, Battery Brain will pay each dissenting
stockholder the amount that Battery Brain estimates to be the fair value of such
stockholder's shares, plus interest from the date of the completion of the
Reincorporation to the date of payment. With respect to any dissenting
stockholder who does not certify that he or she acquired beneficial ownership of
the shares prior to the first public announcement of the transaction, Battery
Brain may, instead of making payment, offer such payment if the dissenter agrees
to accept it in full satisfaction of his or her demand. "Fair value" means the
value of the shares immediately before the effectuation of the Reincorporation,
excluding any appreciation or depreciation in anticipation of such events. Any
dissenter who does not wish to accept the payment or offer made by Battery Brain
must notify Battery Brain in writing of his or her own estimate of the fair
value of the shares within 30 days after the date Battery Brain makes or offers
payment. If the dissenting stockholder and Battery Brain are unable to agree on
the fair value of the shares, then Battery Brain will commence a proceeding with
the Utah courts within 60 days after receiving the dissenter's notice of his or
her own estimate of fair value. If Battery Brain does not commence such a
proceeding within the 60-day period, it must pay each dissenter whose demand
remains unresolved the amount demanded by such dissenter. If a proceeding is
commenced, the court will determine the fair value of the shares and may appoint
one or more appraisers to help determine such value. All dissenting stockholders
must be a party to the proceeding, and all such stockholders will be entitled to
judgment against Battery Brain for the amount of the fair value of their shares,
to be paid on surrender of the certificates representing such shares. The
judgment will include an allowance for interest (at a rate determined by the
court) to the date of payment. The costs of the court proceeding, including the
fees and expenses of any appraisers, will be assessed against Battery Brain
unless the court finds that the dissenters acted arbitrarily, vexatiously or not
in good faith in demanding payment at a higher amount than that offered by
Battery Brain. Both Battery Brain and the dissenters must bear their own
respective legal fees and expenses, unless the court requires one party to pay
13
such legal fees and expenses because of the conduct of such party. The loss or
forfeiture of appraisal rights simply means the loss of the right to receive a
cash payment from Battery Brain in exchange for shares. In such event the
stockholder would still hold the appropriate number of shares of Battery Brain.
Stockholders of Datigen are entitled under Utah law to dissent from approval of
the Reincorporation and obtain payment from Battery Brain of the fair value of
shares held by the stockholder. "Fair value" of a dissenter's shares means the
value of the shares immediately before the effectuation of the Reincorporation,
excluding any appreciation or depreciation in value on account of anticipation
of the corporate action. However, upon compliance with the dissenter's rights
provisions described below, dissenters may not be entitled to immediately
receive cash payment for their shares due to provisions of the Utah Code that
prohibit redemptions of shares in cash where the corporation "would not be able
to pay its debts as they become due in the usual course of business" or "the
corporation's total assets would be less than the sum of its total liabilities"
(Utah Code Section 16-10a-640(3)). The Board has determined that if any
significant number of stockholders exercised dissenter's rights, Battery Brain
would likely be unable to pay such cash payments if, as a result of such
payment, Battery Brain would be rendered unable to pay its debts as they come
due or its liabilities exceed its assets. In such case, the Board may legally
only be able to issue promissory notes to any dissenting stockholders for the
fair value of their shares, the interest and principal of which would be payable
only at an undetermined future date and only if and when funds are legally
available for payment as provided in the Utah Code. The issuance of such notes
would be subject to compliance with the registration or exemption provisions of
the Securities Act of 1933 and such notes would be restricted securities that
would not be transferable without compliance with the requirements of the
Securities Act of 1933. The principal amount of the notes would be determined
based on the fair value of the dissenter's stock as of the meeting date.
OUR RECOMMENDATION TO STOCKHOLDERS
Taking into consideration all of the factors and reasons for the Reincorporation
set forth above and elsewhere in this Proxy Statement, the Board has approved
the Reincorporation and recommends that stockholders of Datigen vote FOR
approval of the Reincorporation and Plan of Merger. IN THE EVENT THAT THIS
PROPOSAL NO. 1 IS APPROVED BUT PROPOSALS NUMBERED 2 THROUGH 9 REGARDING THE
CHANGES IN THE COMPANY'S ARTICLES AND BYLAWS ARE NOT APPROVED, THE BOARD OF
DATIGEN WILL NOT CONTINUE WITH THE PLAN OF MERGER AND DATIGEN WILL REMAIN AN
UTAH CORPORATION.
PROPOSAL NO. 2
CHANGE IN THE COMPANY'S NAME FROM "DATIGEN.COM, INC." TO
"SMART ENERGY SOLUTIONS, INC."
The Board is asking the shareholders to authorize a change in the name of the
company from its current name to "Smart Energy Solutions, Inc." As previously
reported on Datigen's Form 8-K filed with the Securities and Exchange Commission
on December 17, 2004, Datigen entered into a binding letter of intent with
Purisys, Inc., a non-affiliated New Jersey corporation, which provides, among
other things, for the sale by Purisys to Datigen of all of the assets of the
"Battery Brain Product". Since it is the intention of Datigen to acquire these
assets and commence operations relating to the manufacturing, marketing and
selling the Battery Brain product, the Board has determined that the name of the
company should be changed to reflect such operations.
OUR RECOMMENDATION TO SHAREHOLDERS
The Board has approved the change in the name of the Company to "Smart Energy
Solutions, Inc." and recommends that stockholders of Datigen vote FOR approval
of the change in the name of Datigen. IN THE EVENT THAT THIS PROPOSAL NO. 2 IS
APPROVED BUT PROPOSAL NUMBER 1 REGARDING THE REINCORPORATION OF DATIGEN FROM
UTAH TO NEVADA IS NOT APPROVED, THE BOARD OF DATIGEN WILL FILE AN AMENDMENT TO
THE ARTICLES OF DATIGEN IN UTAH SIMILAR TO THE ATTACHED APPENDIX C TO CHANGE THE
NAME OF THE COMPANY.
PROPOSAL NO. 3
INCREASE IN THE NUMER OF AUTHORIZED SHARES OF COMMON STOCK
As of the record date, the authorized capital of Datigen, on the record date,
consisted of 50,000,000 shares of Common Stock, no par value. Approximately
36,593,400 shares of Datigen Common Stock were outstanding. The authorized
capital of Battery Brain, which will be the authorized capital of Datigen if so
approved by the shareholders, consists of 500,000,000 shares of common stock, no
par value and 1,000,000 shares of preferred stock, no par value (the "Battery
Brain Preferred Stock"). The approval of this proposal will not affect total
stockholder equity but will increase the authorized capitalization of Datigen.
14
The binding letter of intent Datigen has executed with Purisys, Inc., a
non-affiliated New Jersey corporation, provides, among other things, for the
sale by Purisys to Datigen of all of the assets of the "Battery Brain Product",
including intellectual property, goodwill, contract rights, purchase orders,
inventory, equipment and other tangible and intangible assets owned by Purisys
in consideration for $100,000 in cash, and such number of shares of Common Stock
which will constitute, as of the closing date of the transaction, twenty (20%)
percent of all issued and outstanding shares of Common Stock of Datigen on a
fully diluted basis. The stock portion of the purchase price will consist of
twenty (20%) of the issued and outstanding common stock of Battery Brain on a
fully diluted basis. You are encouraged to review our report on Form 8-K filed
with the Securities and Exchange Commission on December 17, 2004, and the Form
8-K filed on March 1, 2005, which discusses more thoroughly the terms of the
proposed acquisition, which report is available through EDGAR at www.sec.gov and
is incorporated herein by reference. As described therein, the receipt of equity
investments by Datigen of $900,000 is required for the consummation of the
transaction to acquire the Battery Brain assets. Accordingly, Datigen will be
required to issue additional shares of stock to enable it to meet said
condition. There are currently no definitive plans for such issuances, but
Datigen will be issuing additional shares of common stock to raise capital.
Other than as described above, Datigen has no present arrangements, agreements
or understandings for the use of the additional shares proposed to be
authorized.
The additional shares of Common Stock for which authorization is sought would be
a part of the existing class of Battery Brain common stock and, if and when
issued, would have the same rights and privileges as the currently outstanding
shares of Common Stock. Current stockholders do not have preemptive rights under
Datigen's Certificate of Incorporation, and will not have such rights with
respect to these additional authorized shares of Common Stock. When the Board
elects to issue additional shares of Common Stock, such issuance will have a
dilutive effect on the voting power and percentage ownership of Datigen, and an
adverse effect on the market price of the common stock and the continuation of
the current management of Datigen. The Board believes that the issuance of
additional shares to raise capital and to consummate the transaction to acquire
Batter Brain outweighs any of the disadvantages associated with the increase in
the authorized shares of Common Stock.
The Board further believes that it is in Datigen's best interests to increase
the number of authorized shares of Common Stock in order to provide Datigen with
the flexibility to issue Common Stock without further action by Datigen's
stockholders (unless required by law or regulation) for such other corporate
purposes as the Board may deem advisable. These purposes may include, among
other things, the sale of shares to obtain additional capital funds, the
purchase of property, the use of additional shares for various equity
compensation and other employee benefit plans of Datigen or of acquired
companies, the acquisition of other companies, and other bona fide purposes.
OUR RECOMMENDATION TO SHAREHOLDERS
The Board has approved the change in the Articles of Datigen from having
50,000,000 shares of common stock authorized to the change in the Articles of
Battery Brain providing for 500,000,000 shares of common stock authorized and
recommends that shareholders of Datigen vote FOR approval of the increase in the
number of authorized shares of common stock. IN THE EVENT THAT THIS PROPOSAL NO.
3 IS APPROVED BUT PROPOSAL NUMBER 1 REGARDING THE REINCORPORATION OF DATIGEN
FROM UTAH TO NEVADA IS NOT APPROVED, THE BOARD OF DATIGEN WILL FILE AN AMENDMENT
TO THE ARTICLES OF DATIGEN IN UTAH SIMILAR TO THE ATTACHED APPENDIX C TO
INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK OF THE COMPANY.
PROPOSAL NO. 4
ADOPTION OF "BLANK CHECK" PREFERRED STOCK
The current Articles of Datigen do not authorize the company to issue "blank
check" preferred stock. The Board has determined that having "blank check"
Preferred Stock would facilitate corporate financing and other plans of Datigen,
which are intended to foster its growth and flexibility. The Board believes that
the Battery Brain Preferred Stock may assist Datigen in achieving its business
objectives by making financing easier to obtain. Under the terms of the Battery
Brain Preferred Stock, the Board would be empowered, with no need for further
stockholder approval, to issue Battery Brain Preferred Stock in one or more
series, and with such dividend rates and rights, liquidation preferences, voting
rights, conversion rights, rights and terms of redemption and other rights,
15
preferences, and privileges as determined by the Board. That is the reason the
Battery Brain Preferred Stock is referred to as "blank check preferred stock".
The Board believes that the complexity of modern business financing and possible
future transactions require greater flexibility in Datigen's capital structure
than currently exists. The Board will be permitted to issue Battery Brain
Preferred Stock from time to time for any proper corporate purpose including
acquisitions of other businesses or properties and the raising of additional
capital. Shares of Battery Brain Preferred Stock could be issued publicly or
privately, in one or more series, and each series of Battery Brain Preferred
Stock could rank senior to the Common Stock of Datigen with respect to dividends
and liquidation rights. There are no present plans, understandings or agreements
for, and Datigen is not engaged in any negotiations that will involve, the
issuance of Battery Brain Preferred Stock.
Even though not intended by the Board, the possible overall effect of the
existence of Battery Brain Preferred Stock on the holders of Datigen Common
Stock may include the dilution of their ownership interests in Datigen, the
continuation of the current management of Datigen, prevention of mergers with or
business combinations by Datigen and the discouragement of possible tender
offers for shares of Common Stock.
Upon the conversion into Common Stock of shares of Battery Brain Preferred Stock
issued with conversion rights, if any, the Common Stock holders' voting power
and percentage ownership of Datigen would be diluted and such issuances could
have an adverse effect on the market price of the Common Stock. Additionally,
the issuance of shares of Battery Brain Preferred Stock with certain rights,
preferences and privileges senior to those held by the Common Stock could
diminish the Common Stock holders' rights to receive dividends if declared by
the Board and to receive payments upon the liquidation of Datigen.
If shares of Battery Brain Preferred Stock are issued, approval by holders of
such shares, voting as a separate class, could be required prior to certain
mergers with or business combinations by Datigen. These factors could discourage
attempts to purchase control of Datigen even if such change in control may be
beneficial to the Common Stock holders. Moreover, the issuance of Battery Brain
Preferred Stock having general voting rights together with the Common Stock to
persons friendly to the Board could make it more difficult to remove incumbent
management and directors from office even if such changes would be favorable to
stockholders generally.
If shares of Battery Brain Preferred Stock are issued with conversion rights,
the attractiveness of Datigen to a potential tender offeror for the Common Stock
may be diminished. The purchase of the additional shares of Common Stock or
Battery Brain Preferred Stock necessary to gain control of Datigen may increase
the cost to a potential tender offeror and prevent the tender offer from being
made even though such offer may have been desirable to many of the Common Stock
holders.
The ability of the Board, without any additional stockholder approval, to issue
shares of Battery Brain Preferred Stock with such rights, preferences,
privileges and restrictions as determined by the Board could be employed as an
anti-takeover device. The amendment is not presently intended for that purpose
and is not proposed in response to any specific takeover threat known to the
Board. Furthermore, this proposal is not part of any plan by the Board to adopt
anti-takeover devices and the Board currently has no present intention of
proposing anti-takeover measures in the near future. In addition, any such
issuance of Battery Brain Preferred Stock in the takeover context would be
subject to compliance by the Board with applicable principles of fiduciary duty.
The Board believes that the financial flexibility offered by the Battery Brain
Preferred Stock outweighs any of its disadvantages. To the extent the proposal
may have anti-takeover effects, the proposal may encourage persons seeking to
acquire Datigen to negotiate directly with the Board, enabling the Board to
consider the proposed transaction in a non-disruptive atmosphere and to
discharge effectively its obligation to act on the proposed transaction in a
manner that best serves all the stockholders' interests. It is also the Board's
view that the existence of Battery Brain Preferred Stock should not discourage
anyone from proposing a merger or other transaction at a price reflective of the
true value of Datigen and which is in the interests of its stockholders.
OUR RECOMMENDATION TO SHAREHOLDERS
Taking into consideration all of the factors and reasons set forth above for the
change in the Articles of Datigen from not having authorization to issue
preferred shares of common stock to the change in the Articles of Battery Brain
providing for the authorization of blank check preferred shares, the Board
recommends that shareholders of Datigen vote FOR approval of the authorization
provided in the Articles of Battery Brain to issue up to 1,000,000 shares of
preferred stock. IN THE EVENT THAT THIS PROPOSAL NO. 4 IS APPROVED BUT PROPOSAL
NUMBER 1 REGARDING THE REINCORPORATION OF DATIGEN FROM UTAH TO NEVADA IS NOT
APPROVED, THE BOARD OF DATIGEN WILL FILE AN AMENDMENT TO THE ARTICLES OF DATIGEN
IN UTAH SIMILAR TO THE ATTACHED APPENDIX C TO AUTHORIZE THE COMPANY TO ISSUE
PREFERRED STOCK.
16
PROPOSAL NO. 5
ELIMINATION OF THE PERSONAL LIABILITY OF DIRECTORS
The Battery Brain Articles of Incorporation (the "Battery Brain Articles")
contain a provision limiting or eliminating, with certain exceptions, the
liability of directors to Battery Brain and its stockholders for monetary
damages for breach of their fiduciary duties. The Datigen Articles contains no
similar provision. The Board believes that such a provision will better enable
Battery Brain to attract and retain as directors responsible individuals with
the experience and background required to direct Battery Brain's business and
affairs. It has become increasingly difficult for corporations to obtain
adequate liability insurance to protect directors from personal losses resulting
from suits or other proceedings involving them by reason of their service as
directors. Such insurance is considered a standard condition of directors'
engagement. However, coverage under such insurance is no longer routinely
offered by insurers and many traditional insurance carriers have withdrawn from
the market. To the extent such insurance is available, the scope of coverage is
often restricted, the dollar limits of coverage are substantially reduced and
the premiums have risen dramatically.
At the same time directors have been subject to substantial monetary damage
awards in recent years. Traditionally, courts have not held directors to be
insurers against losses a corporation may suffer as a consequence of directors'
good faith exercise of business judgment, even if, in retrospect, the directors'
decision was an unfortunate one. In the past, directors have had broad
discretion to make decisions on behalf of the corporation under the "business
judgment rule." The business judgment rule offers protection to directors who,
after reasonable investigation, adopt a course of action that they reasonably
and in good faith believe will benefit the corporation, but which ultimately
proves to be disadvantageous. Under those circumstances, courts have typically
been reluctant to subject directors' business judgments to further scrutiny.
Some recent court cases have, however, imposed significant personal liability on
directors for failure to exercise an informed business judgment with the result
that the potential exposure of directors to monetary damages has increased.
Consequently legal proceedings against directors relating to decisions made by
directors on behalf of corporations have significantly increased in number, cost
of defense and level of damages claimed. Whether or not such an action is
meritorious, the cost of defense can be well beyond the personal resources of a
director.
The Nevada legislature considered such developments a threat to the quality and
stability of the governance of Nevada corporations because of the unwillingness
of directors, in many instances, to serve without the protection which insurance
traditionally has provided and because of the deterrent effect on
entrepreneurial decision making by directors who do serve without the protection
of traditional insurance coverage. In response, in 1987 the Nevada legislature
adopted amendments to the Nevada Revised Statues which permit a corporation to
include in its charter a provision to limit or eliminate, with certain
exceptions, the personal liability of directors to a corporation and its
stockholders for monetary damages for breach of their fiduciary duties and to
purchase insurance to provide protection to directors. Similar charter
provisions limiting a director's liability are permitted under Utah law.
However, Datigen's Articles contain no such provision.
The Board believes that the limitation on directors' liability permitted under
Nevada Law will assist Battery Brain in attracting and retaining qualified
directors by limiting directors' exposure to liability. The Reincorporation
proposal will implement this limitation on liability of the directors of Battery
Brain, inasmuch as the Battery Brain Articles provide that to the fullest extent
that the Nevada Law now or hereafter permits the limitation or elimination of
the liability of directors, no director will be liable to Battery Brain or its
stockholders for monetary damages for breach of fiduciary duty. Under such
provision, Battery Brain's directors will not be liable for monetary damages for
acts or omissions occurring on or after the effective date of the
Reincorporation, even if they should fail through negligence or gross negligence
to satisfy their duty of care (which requires directors to exercise informed
business judgment in discharging their duties). The Battery Brain Articles would
not limit or eliminate any liability of directors for acts or omissions
occurring prior to the effective date. As provided under Nevada law, the Battery
Brain Articles cannot eliminate or limit the liability of directors for breaches
of their duty of loyalty to Battery Brain; acts or omissions not in good faith
or involving intentional misconduct or a knowing violation of law, paying a
dividend or effecting a stock repurchase or redemption which is illegal under
Nevada law; or transactions from which a director derived an improper personal
benefit. Further, the Battery Brain Articles would not affect the availability
of equitable remedies, such as an action to enjoin or rescind a transaction
involving a breach of a director's duty of care. The Battery Brain Articles
pertain to breaches of duty by directors acting as directors and not to breaches
of duty by directors acting as officers (even if the individual in question is
also a director). In addition, the Battery Brain Articles would not affect a
director's liability to third parties or under the federal securities laws.
The Battery Brain Articles are worded to incorporate any future statutory
revisions limiting directors' liability. The Battery Brain Articles provide,
however, that no amendment or repeal of its provision will apply to the
liability of a director for any acts or omissions occurring prior to such
amendment or repeal, unless such amendment has the affect of further limiting or
eliminating such liability.
17
Datigen has not received notice of any lawsuit or other proceeding to which the
Battery Brain Articles might apply. In addition, the provision is not being
included in the Battery Brain Articles in response to any director's resignation
or any notice of an intention to resign. Accordingly, Battery Brain is not aware
of any existing circumstances to which the provision might apply. The Board
recognizes that the Battery Brain Articles may have the effect of reducing the
likelihood of derivative litigation against directors, and may discourage or
deter stockholders from instituting litigation against directors for breach of
their duty of care, even though such an action, if successful, might benefit
Battery Brain and its stockholders. However, given the difficult environment and
potential for incurring liabilities currently facing directors of publicly held
corporations, the Board believes that the Battery Brain Articles are in the best
interests of Battery Brain and its stockholders, since they should enhance
Battery Brain's ability to retain highly qualified directors and reduce a
possible deterrent to entrepreneurial decision making. In addition, the Board
believes that the Battery Brain Articles may have a favorable impact over the
long term on the availability, cost, amount and scope of coverage of directors'
liability insurance, although there can be no assurance of such an effect.
The Battery Brain Articles may be viewed as limiting the rights of stockholders,
and the broad scope of the indemnification provisions of Battery Brain could
result in increased expense to Battery Brain. Battery Brain believes, however,
that these provisions will provide a better balancing of the legal obligations
of, and protections for, directors and will contribute to the quality and
stability of Battery Brain's governance. The Board has concluded that the
benefit to stockholders of improved corporate governance outweighs any possible
adverse effects on stockholders of reducing the exposure of directors to
liability and broadening indemnification rights. Because the Battery Brain
Articles deal with the potential liability of directors, the members of the
Board may be deemed to have a personal interest in effecting the
Reincorporation.
OUR RECOMMENDATION TO SHAREHOLDERS
Taking into consideration all of the factors and reasons set forth above for
including a provision limiting or eliminating, with certain exceptions, the
liability of the directors for monetary damages for breach of their fiduciary
duties, the Board recommends that shareholders of Datigen vote FOR the approval
of including such provision in the Articles of Battery Brain.
IN THE EVENT THAT THIS PROPOSAL NO. 5 IS APPROVED BUT PROPOSAL NUMBER 1
REGARDING THE REINCORPORATION OF DATIGEN FROM UTAH TO NEVADA IS NOT APPROVED,
THE BOARD OF DATIGEN WILL FILE AN AMENDMENT TO THE ARTICLES OF DATIGEN IN UTAH
SIMILAR TO THE ATTACHED APPENDIX C TO LIMIT THE PERSONAL LIABILITY OF THE
DIRECTORS OF THE COMPANY.
PROPOSAL NO. 6
MANDATORY INDEMNIFICATION OF DIRECTORS
Section 8.3 of the current Datigen By-Laws provides that there shall be
mandatory indemnification only if the director is successful in the defense of
the proceeding for reasonable expenses incurred by him in connection with a
proceeding. Section 8.2 further provides that the company may not indemnify a
director if the director was adjudged liable to the company or if he derived an
improper personal benefit. Datigen is permitted to indemnify a director only if
he reasonably believed that his condict was in, or not opposed to the company's
best interests. Any permissive indemnification must be approved by the majority
of the directors or shareholders.
The proposed Battery Brain Bylaws authorizes broad indemnification rights which
the company may provide to their directors, officers and other corporate agents.
The Battery Brain Articles reflect the provisions of Nevada Law, as amended,
and, as discussed below, provide broad rights to indemnification.
In recent years, investigations, actions, suits and proceedings, including
actions, suits and proceedings by or in the right of a corporation to procure a
judgment in its favor (referred to together as "proceedings"), seeking to impose
liability on, or involving as witnesses, directors and officers of publicly-held
corporations have become increasingly common. Such proceedings are typically
very expensive, whatever their eventual outcome. In view of the costs and
uncertainties of litigation in general it is often prudent to settle proceedings
in which claims against a director or officer are made. Settlement amounts, even
if material to the corporation involved and minor compared to the enormous
amounts frequently claimed, often exceed the financial resources of most
individual defendants. Even in proceedings in which a director or officer is not
named as a defendant he or she may incur substantial expenses and attorneys'
fees if he or she is called as a witness or otherwise becomes involved in the
proceeding. Although Datigen's directors and officers have not incurred any
liability or significant expense as a result of any proceeding to date the
18
potential for substantial loss does exist. As a result, an individual may
conclude that the potential exposure to the costs and risks of proceedings in
which he or she may become involved may exceed any benefit to such individual
from serving as a director or officer of a public corporation. This is
particularly true for directors who are not also officers of the corporation.
The increasing difficulty and expense of obtaining directors' and officers'
liability insurance discussed above has compounded the problem.
The broad scope of indemnification now available under Nevada Law will permit
Battery Brain to offer its directors and officers greater protection against
these risks. The Board believes that such protection is reasonable and desirable
in order to enhance Battery Brain's ability to attract and retain qualified
directors as well as to encourage directors to continue to make good faith
decisions on behalf of Battery Brain with regard to the best interests of
Battery Brain and its stockholders.
The Battery Brain Bylaws are quite different from the Datigen By-Laws and
require indemnification of Battery Brain's directors and officers to the fullest
extent permitted under applicable law as from time to time in affect, with
respect to expenses, liability or loss (including, without limitation,
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) actually and reasonably incurred by any person
in connection with any actual or threatened proceeding by reason of the fact
that such person is or was a director or officer of Battery Brain or is or was
serving at the request of Battery Brain as a director or officer of another
corporation or of a partnership, joint venture, trust, employee benefit plan or
other enterprise at the request of Battery Brain. The right to indemnification
includes the right to receive payment of expenses in advance of the final
disposition of such proceeding, consistent with applicable law from time to time
in effect; provided, however, that if the Nevada Law requires the payment of
such expenses in advance of the final disposition of a proceeding, payment shall
be made only if such person undertakes to repay Battery Brain if it is
ultimately determined that he or she was not entitled to indemnification.
Directors and officers would not be indemnified for losses, liability or
expenses incurred in connection with proceedings brought against such persons
otherwise than in the capacities in which they serve Battery Brain. Under Nevada
Law Battery Brain may, although it has no present intention to do so, by action
of the Board, provide the same indemnification to its employees, agents,
attorneys and representatives as it provides to its directors and officers. The
Battery Brain Articles provide that such practices are not exclusive of any
other rights to which persons seeking indemnification may otherwise be entitled
under any agreement or otherwise.
Nevada Law authorizes, and the Battery Brain Articles adopt such authorization
of Battery Brain to purchase and maintain indemnity insurance, if it so chooses
to guard against future expense. Nevada Law also provides for payment of all
expenses incurred, including those incurred to defend against a threatened
proceeding. Additionally, the Battery Brain Articles provide that
indemnification shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nevada Law also provides that to the extent any
director or officer who is, by reason of such a position, a witness in any
proceeding, he or she shall be indemnified for all reasonable expenses incurred
in connection therewith.
Under Utah Law, as with Nevada Law, rights to indemnification and expenses need
not be limited to those provided by statute. As a result, under Nevada Law and
the Battery Brain Articles, Battery Brain will be permitted to indemnify its
directors and officers, within the limits established by law and public policy,
pursuant to an express contract, a by-law provision, a stockholder vote or
otherwise, any or all of which could provide indemnification rights broader than
those currently available under the Datigen Articles or expressly provided for
under Nevada or Utah Law.
Insofar as the Battery Brain Articles provide indemnification to directors or
officers for liabilities arising under the Securities Act of 1933, it is the
position of the Securities and Exchange Commission that such indemnification
would be against public policy as expressed in such statute and, therefore,
unenforceable.
The Board recognizes that Battery Brain may in the future be obligated to incur
substantial expense as a result of the indemnification rights conferred under
the Battery Brain Articles, which are intended to be as broad as possible under
applicable law. Because directors of Battery Brain may personally benefit from
the indemnification provisions of the Battery Brain Articles, the members of the
Board may be deemed to have a personal interest in the effectuation of the
Reincorporation.
OUR RECOMMENDATION TO SHAREHOLDERS
Taking into consideration all of the factors and reasons set forth above
regarding the indemnification of directors, the Board recommends that
shareholders of Datigen vote FOR the approval of the Articles and By-Laws of
Battery Brain providing for broad indemnification provisions. IN THE EVENT THAT
THIS PROPOSAL NO. 6 IS APPROVED BUT PROPOSAL NUMBER 1 REGARDING THE
REINCORPORATION OF DATIGEN FROM UTAH TO NEVADA IS NOT APPROVED, THE BOARD OF
DATIGEN WILL FILE AN AMENDMENT TO THE ARTICLES OF DATIGEN IN UTAH SIMILAR TO THE
ATTACHED APPENDIX C TO PROVIDE FOR MANDATORY INDEMNIFICATION OF THE DIRECTORS.
19
PROPOSAL NO. 7
CHANGES IN THE MINIMUM AND MAXIMUM NUMBER OF DIRECTORS
The current Datigen Articles and By-Laws have conflicting provisions regarding
the minimum number of directors of the company. Article VI of the Articles
provides that Datigen should have no less than 2 directors, but Section 3.2 of
the Datigen By-Laws provides that the company shall not have less than 3
directors. The By-Laws provide for a maximum of 9 directors.
The proposed Battery Brain Bylaws provide that the number of directors of the
company shall be a minimum of 1 director and a maximum of 9 directors.
The proposal regarding the change in the number of directors shall eliminate any
confusion or ambiguity inherent in the Datigen constituent documents. The
proposed change provides flexibility to the company to have the number of
directors it considers appropriate.
OUR RECOMMENDATION TO SHAREHOLDERS
The Board recommends that shareholders of Datigen vote FOR the approval of the
Articles and By-Laws of Battery Brain providing for a minimum of 1 director and
a maximum of 9 directors. IN THE EVENT THAT THIS PROPOSAL NO. 7 IS APPROVED BUT
PROPOSAL NUMBER 1 REGARDING THE REINCORPORATION OF DATIGEN FROM UTAH TO NEVADA
IS NOT APPROVED, THE BOARD OF DATIGEN WILL AMEND THE BYLAWS OF DATIGEN SIMILAR
TO THE ATTACHED APPENDIX D TO PROVIDE FOR A MINIMUM OF ONE DIRECTOR AND A
MAXIMUM OF 9 DIRECTORS.
PROPOSAL NO. 8
CHANGE IN THE PURPOSE OF THE COMPANY
The current Datigen Articles provide that the company was established for the
purpose of the development and marketing of various Internet and Internet
related products and services. Datigen is no longer in this business, and has
not been in this business for several years.
The proposed Battery Brain Articles provide that the nature of the business of
the corporation and the objects or the purposes to be transacted, promoted, or
carried on by it are broad and general - to engage in any lawful activity.
Although Datigen intends to consummate the transaction with Purisys and purchase
the assets of the Battery Brain product, it is more prudent to maintain a
general, all purpose provision for the business of the company.
OUR RECOMMENDATION TO SHAREHOLDERS
The Board recommends that shareholders of Datigen vote FOR the approval of the
Articles of Battery Brain providing for the company to have the authority to
engage in any lawful business rather than Internet and Internet related products
and services, which the Datigen Articles currently provide. IN THE EVENT THAT
THIS PROPOSAL NO. 8 IS APPROVED BUT PROPOSAL NUMBER 1 REGARDING THE
REINCORPORATION OF DATIGEN FROM UTAH TO NEVADA IS NOT APPROVED, THE BOARD OF
DATIGEN WILL FILE AN AMENDMENT TO THE ARTICLES OF DATIGEN IN UTAH SIMILAR TO THE
ATTACHED APPENDIX C TO PROVIDE FOR THE COMPANY TO HAVE THE AUTHORITY TO ENGAGE
IN ANY LAWFUL BUSINESS.
PROPOSAL NO. 9
INCREASE IN THE MINIMUM NUMBER OF SHARES
REQUIRED TO CALL A SPECIAL SHAREHOLDERS' MEETING
The current Datigen By-Laws provide that the company must call a special meeting
of the shareholders if no less than shares representing 10% of the issued and
outstanding shares vote for such a meeting.
20
The proposed Battery Brain By-Laws provide that the holders of a majority of the
outstanding shares of capital stock of the company must vote to call a special
shareholders' meeting. While this requirement makes it more difficult for the
shareholders of the company to call for special meetings, the Board feels that
this provision is more appropriate for a public company. The increase in the
minimum number of shares required to call a special shareholders' meeting may
deter hostile takeover attempts because of the higher number of shares required
to call for a shareholders' meeting. The Board believes that this provision will
enhance the Board's opportunity to fully consider and effectively negotiate in
the context of a takeover event.
OUR RECOMMENDATION TO SHAREHOLDERS
The Board recommends that shareholders of Datigen vote FOR the approval of the
Articles of Battery Brain providing for the increase in the minimum number of
shares required to call a special shareholders' meeting. IN THE EVENT THAT THIS
PROPOSAL NO. 9 IS APPROVED BUT PROPOSAL NUMBER 1 REGARDING THE REINCORPORATION
OF DATIGEN FROM UTAH TO NEVADA IS NOT APPROVED, THE BOARD OF DATIGEN WILL FILE
AN AMENDMENT TO THE ARTICLES OF DATIGEN IN UTAH SIMILAR TO THE ATTACHED APPENDIX
C TO PROVIDE FOR THAT THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES MUST
VOTE TO CALL A SPECIAL SHAREHOLDERS' MEETING.
OFFICERS AND DIRECTORS
Upon the Effective Date the present officers and directors of Datigen will
continue to be the officers and directors of Battery Brain. This will result in
the following persons serving in the following capacities until the first annual
meeting after the specified number of years and until their respective
successors are elected and qualified:
Name Age Positions and Offices
---- --- ---------------------
Amir Uziel 39 President, Chief Executive
Officer and Director
Robert Lubin 31 Director
Amir Uziel, age 39, became the President and Chief Executive Officer and a
director of Datigen on November 24, 2004. From 1994 to the present, Mr. Uziel
has been an economist for Amir Uziel Consult, a private company providing
international business development and marketing advisory services to some of
the leading Israeli companies. Prior thereto, Mr. Uziel was Sales and Marketing
Manager of Hollandia Sleep Engineering Center Ltd., a furniture chain in Israel.
Mr. Uziel received his B.A. from Tel Aviv University School of Economics and
Accounting in 1991.
Robert Lubin, age 31, became a director of Datigen on December 4, 2004. Mr.
Lubin has been responsible for Customer Service Management at IDT Corp. since
October 2004. From April 2002 until July 2004, Mr. Lubin was the director of
Employment at Sephardic Career Services. From September 1998 until April 2002 he
was the director of Career Services at Yeshiva University, and from September
1996 until September 1998 worked in the human resources department at Assessment
Solutions Inc. Since 1998, Mr. Lubin has been a Psychology instructor at Touro
College. Mr. Lubin received his B.A. from Queens College in 1995, a M.A. in
psychology from Columbia University in 1996 and a M.A. in educational psychology
from Columbia University in 1996.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists, as of March _, 2005, the number of shares of Common
Stock beneficially owned by (i) each person or entity known to Datigen to be the
beneficial owner of more than 5% of the outstanding common stock; (ii) each
officer and director of Datigen; and (iii) all officers and directors as a
group. Information relating to beneficial ownership of common stock by our
principal stockholders and management is based upon information furnished by
each person using "beneficial ownership" concepts under the rules of the
Securities and Exchange Commission. Under these rules, a person is deemed to be
a beneficial owner of a security if that person has or shares voting power,
which includes the power to vote or direct the voting of the security, or
investment power, which includes the power to vote or direct the voting of the
security. The person is also deemed to be a beneficial owner of any security of
which that person has a right to acquire beneficial ownership within 60 days.
Under the Securities and Exchange Commission rules, more than one person may be
deemed to be a beneficial owner of the same securities, and a person may be
deemed to be a beneficial owner of securities as to which he or she may not have
any pecuniary beneficial interest. Except as noted below, each person has sole
voting and investment power.
21
The percentages below are calculated based on 36,593,400 shares of Common Stock
issued and outstanding.
Other than options to purchase 15,000 shares of common stock at an exercise
price of $1.40 per share and options to purchase shares at an exercise price of
$1.41 per share, there are no outstanding options, warrants or other securities
convertible into shares of common stock.
Unless otherwise indicated, the business address of each such person is c/o
David Lubin & Associates 92 Washington Avenue, Cedarhurst, New York 11516.
Officers, Directors,
5% Stockholder No. of Shares Beneficial Ownership
- -------------- ------------- --------------------
Amir Uziel 1,680,550 4.58%
Robert Lubin 50,000 *
All directors and executive
officers as a group (2 persons) 1,730,550 4.73%
* Less than one percent
OTHER MATTERS
The firm of Squire & Company PC served as independent certified public
accountants of the Company for the years ended December 31, 2002, December 31,
2003, as well as the current fiscal year. Representatives of Squire & Company PC
will not be present at the Meeting.
STOCKHOLDER PROPOSALS
Shareholders of Datigen may submit proposals to be considered for shareholder
action at the Special Meeting of Shareholders if they do so in accordance with
applicable regulations of the SEC and the laws of the State of Utah. In order to
be considered for inclusion in the Proxy Statement for the meeting, the
Secretary must receive proposals no later than ____________, 2005. Shareholder
proposals should be addressed to the Secretary, Datigen.com, Inc., c/o David
Lubin & Associates, 92 Washington Avenue, Cedarhurst, New York 11516.
As of the date of this proxy statement, Datigen knows of no business that will
be presented for consideration at the meeting other than the items referred to
above. If any other matter is properly brought before the meeting for action by
stockholders, proxies in the enclosed form returned to Datigen will be voted in
accordance with the recommendation of the Board or, in the absence of such a
recommendation, in accordance with the judgment of the proxy holder.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Certain financial and other information required pursuant to Item 13 of the
Proxy Rules, including the Company's audited financial statements for the fiscal
year end December 31, 2003 and the financial footnotes thereto, and management's
discussion and analysis of the Company's financial condition and results of
operations for the fiscal year ended December 31, 2003 is incorporated by
reference to the Company's Annual Report, which is being delivered to the
stockholders with this proxy statement. In order to facilitate compliance with
Rule 2-02(a) of Regulation S-X, one copy of the definitive proxy Statement filed
with the Securities and Exchange Commission will include a manually signed copy
of the accountant's report.
Datigen's Current Reports on Form 8-K filed with the Securities and Exchange
Commission on each of March 1, 2005, December 17, 2004 and November 27, 2004 are
incorporated herein by reference. You may request a copy of this filing, at no
cost, by writing or telephoning us at the following address:
22
Datigen.com, Inc.
c/o David Lubin & Associates
92 Washington Avenue
Cedarhurst, NY 11516
(516) 569-9629
By Order of the Board of Directors,
March __, 2005 Amir Uziel, President and Chief Executive Officer
Appendices
Appendix A Plan and Agreement of Merger
Appendix B Utah Revised Statutes
Appendix C Articles of Incorporation
Appendix D Bylaws of Battery Brain Smart Energy Solutions, Inc.
23
PROXY
DATIGEN.COM, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR A SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON
April _, 2005
The undersigned, a stockholder of DATIGEN.COM, INC. (the "Company"), does
hereby appoint Amir Uziel, as the attorney and proxy of the undersigned, with
power of substitution, for and on behalf of the undersigned, and to attend the
Special Meeting of Stockholders of the Company to be held on April _, 2005, at
10:00 a.m., at the offices of David Lubin & Associates, 92 Washington Avenue,
Cedarhurst, New York 11516, (the "Special Meeting"), to represent the
undersigned at the Special Meeting, and there to vote all the shares of Common
Stock of the Company which the undersigned is entitled to vote at the Special
Meeting, in any manner and with the same effect as if the undersigned were
personally present at the Special Meeting, and the undersigned hereby authorizes
and instructs the above named proxies to vote as specified below.
The shares represented by this Proxy will be voted only if this Proxy is
properly executed and timely returned. In that event, such shares will be voted
in the manner directed herein. If no direction is made on how you desire your
shares to be voted, the Proxy holder will have complete discretion in voting the
shares on any matter voted on at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE FOLLOWING:
The shares represented by this Proxy shall be voted in the following
manner:
FOR AGAINST WITHHOLD
- ------------------------- --- ------- --------
REINCORPORATION IN NEVADA [ ] [ ]
CHANGE IN NAME [ ] [ ]
INCREASE IN AUTHORIZED CAPITAL [ ] [ ]
AUTHORIZATION OF PREFRRED STOCK [ ] [ ]
ELIMINATION OF PERSONAL LIABILITY
OF DIRECTORS [ ] [ ]
MANDATORY INDEMNIFICATION OF
DIRECTORS [ ] [ ]
CHANGE IN NUMBER OF DIRECTORS [ ] [ ]
CHANGE IN PURPOSE OF COMPANY [ ] [ ]
CHANGE IN NUMBER OF SHARES REQUIRED
TO CALL SHAREHOLDERS' MEETING [ ] [ ]
The undersigned does hereby revoke any Proxy previously given with respect
to the shares represented by this Proxy.
NOTE: As to shares held in joint names, each joint owner should sign. If
the signer is a corporation, please sign full corporate name by a duly
authorized officer. If a partnership, please sign in partnership name by an
authorized person. If signing as attorney, executor, administrator, trustee,
guardian, or in other representative capacity, please give full title as such.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND PROPERLY RETURN IT USING
THE ENCLOSED ENVELOPE.
Number of Shares Owned: _________________________________
Dated: ____________________ ____________________________________
Signature
------------------------------------
Name (typed or printed)
------------------------------------
Address
Dated: ____________________ ____________________________________
Signature
------------------------------------
Name (typed or printed)
------------------------------------
Address
24
APPENDIX A
PLAN AND AGREEMENT OF MERGER
OF
DATIGEN.COM, INC.
(a Utah corporation)
AND
SMART ENERGY SOLUTIONS, INC.
(a Nevada corporation)
PLAN AND AGREEMENT OF MERGER entered into on April ___, 2005 by
Datigen.com, Inc., a Utah corporation ("Datigen"), and approved by resolution
adopted by its Board of Directors on said date, and entered into on April ___,
2005, by Smart Energy Solutions, Inc., a Nevada corporation ("Battery Brain"),
and approved by resolution adopted by its Board of Directors on said date.
WHEREAS, Datigen is a business corporation of the State of Utah;
WHEREAS, Battery Brain is a business corporation of the State of Nevada;
WHEREAS, Battery Brain is the wholly-owned subsidiary of Datigen:
WHEREAS, the Utah Business Corporation Act permits a merger of a business
corporation of the State of Utah with and into a business corporation of another
jurisdiction;
WHEREAS, Datigen does not intend to carry on any business except the
business necessary to wind up and liquidate its business and affairs by means of
a merger with and into a business corporation of the State of Nevada; and
WHEREAS, Datigen and Battery Brain and the respective Boards of Directors
thereof declare it advisable and to the advantage, welfare, and best interests
of said corporations and their respective stockholders to merge Datigen with and
into Battery Brain (the "Merger") pursuant to the provisions of the Utah
Business Corporation Act and pursuant to the provisions of the Nevada Revised
Statutes upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreement of the parties hereto, being thereunto duly entered into by Datigen
and approved by a resolution adopted by its Board of Directors and being
thereunto duly entered into by Battery Brain and approved by a resolution
adopted by its Board of Directors, the Merger and the terms and conditions
thereof and the mode of carrying the same into effect, are hereby determined and
agreed upon as hereinafter in this Plan and Agreement of Merger set forth.
1. Datigen shall, pursuant to the provisions of the Utah Business
Corporation Act and to the provisions of the Nevada Revised Statutes, be merged
with and into Battery Brain, which shall be the surviving corporation from and
after the effective time of the Merger and which is sometimes hereinafter
referred to as the "surviving corporation", and which shall continue to exist as
said surviving corporation under the name Battery Brain pursuant to the
provisions of the Nevada Revised Statutes. The separate existence of Datigen,
which is sometimes hereinafter referred to as the "terminating corporation",
shall cease at said effective time in accordance with the provisions of the Utah
Business Corporation Act.
2. The present Articles of Incorporation of the surviving
corporation will be the Articles of Incorporation of the surviving corporation
and will continue in full force and effect until changed, altered, or amended as
therein provided and in the manner prescribed by the provisions of the Nevada
Revised Statutes.
3. The present By-Laws of the surviving corporation will be the
By-Laws of said surviving corporation and will continue in full force and effect
until changed, altered, or amended as therein provided and in the manner
prescribed by the provisions of the Nevada Revised Statutes.
4. The directors and officers in office of the surviving corporation
at the effective time of the Merger shall be the members of the Board of
Directors and the officers of the surviving corporation, all of whom shall hold
their directorships and offices until the election and qualification of their
respective successors or until their tenure is otherwise terminated in
accordance with the by-laws of the surviving corporation.
25
5. Each issued share of the common stock of the terminating
corporation shall, from and after the effective time of the Merger, be converted
into one (1) share of the common stock of the surviving corporation. The
surviving corporation shall not issue any certificate or scrip representing a
fractional share of common stock but shall instead issue one (1) full share for
any fractional interest arising from the Merger.
6. Stockholders of the terminating corporation shall continue to
have rights to notices, distributions or voting with respect to the surviving
corporation, and shall receive certificates representing shares of the surviving
corporation upon tender of certificates representing shares of the terminating
corporation for exchange.
7. Except to the extent otherwise provided in the terms of
outstanding options, warrants or other rights to purchase, or securities
convertible into or exchangeable for common stock of the terminating
corporation, each outstanding option, warrant or other right to purchase, and
each outstanding security convertible into or exchangeable for common stock
shall be converted into an option, warrant or other right to purchase, or
security convertible into or exchangeable for common stock of the surviving
corporation on the basis of one (1) share of the common stock of the surviving
corporation for each share of common stock of the terminating corporation. The
exercise price or conversion ratio set forth in such option, warrant or other
right to purchase, or security convertible into or exchangeable for common stock
of the surviving corporation shall be ratably adjusted so that the total
exercise or conversion price shall be the same as under the option, warrant, or
other right to purchase, or security convertible into or exchangeable for common
stock of the terminating corporation.
8. In the event that this Plan and Agreement of Merger shall have
been fully approved and adopted upon behalf of the terminating corporation in
accordance with the provisions of the Utah Business Corporation Act and upon
behalf of the surviving corporation in accordance with the provisions of the
Nevada Revised Statutes, the said corporations agree that they will cause to be
executed and filed and recorded any document or documents prescribed by the laws
of the State of Utah and by the laws of the State of Nevada, and that they will
cause to be performed all necessary acts within the State of Utah and the State
of Nevada and elsewhere to effectuate the Merger herein provided for.
9. The Board of Directors and the proper officers of the terminating
corporation and of the surviving corporation are hereby authorized, empowered,
and directed to do any and all acts and things, and to make, execute, deliver,
file, and record any and all instruments, papers, and documents which shall be
or become necessary, proper, or convenient to carry out or put into effect any
of the provisions of this Plan and Agreement of Merger or of the Merger herein
provided for.
10. The effective time of this Plan and Agreement of Merger, and the
time at which the Merger herein agreed shall become effective in the State of
Utah and the State of Nevada, shall be on the last to occur of:
(a) the approval of this Plan and Agreement of Merger by the
stockholders of the terminating corporation in accordance with
the Utah Business Corporation Act; or
(b) the date this Plan and Agreement of Merger, or a certificate
of merger meeting the requirements of the Nevada Revised
Statutes, is filed with the Secretary of State of the State of
Nevada; or
(c) the date this Plan and Agreement of Merger, or a certificate
of merger meeting the requirements of the Utah Revised
Statutes, is filed with the Secretary of State of the State of
Utah.
11. Notwithstanding the full approval and adoption of this Plan and
Agreement of Merger, the said Plan and Agreement of Merger may be terminated at
any time prior to the filing thereof with the Secretary of State of the State of
Nevada.
12. Notwithstanding the full approval and adoption of this Plan and
Agreement of Merger, the said Plan and Agreement of Merger may be amended at any
time and from time to time prior to the filing thereof with the Secretary of
State of the State of Utah and at any time and from time to time prior to the
filing of any requisite merger documents with the Secretary of State of the
State of Nevada except that, without the approval of the stockholders of Datigen
and the stockholders of Battery Brain, no such amendment may (a) change the rate
of exchange for any shares of Datigen or the types or amounts of consideration
that will be distributed to the holders of the shares of stock of Datigen; (b)
any term of the Articles of Incorporation of the surviving corporation; or (c)
adversely affect any of the rights of the stockholders of Datigen or Battery
Brain.
26
IN WITNESS WHEREOF, this Plan and Agreement of Merger is hereby executed
upon behalf of each of the constituent corporations parties hereto.
Dated: ___________________ DATIGEN.COM, INC.
a Utah corporation
By:
---------------------------------------------
Amir Uziel, President and Chief Executive Officer
SMART ENERGY SOLUTIONS, INC.
a Nevada corporation
By:
---------------------------------------------
Amir Uziel, President and Chief Executive Officer
27
APPENDIX B
UTAH REVISED BUSINESS CORPORATION ACT
PART 13
16-10A-1301. DEFINITIONS. For purposes of Part 13:
(1) "Beneficial stockholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record stockholder.
(2) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring corporation by merger
or share exchange of that issuer.
(3) "Dissenter" means a stockholder who is entitled to dissent from
corporate action under Section 16-10A-1302 and who exercises that right when and
in the manner required by Sections 16-10A-1320 through 16-10A-1328.
(4) "Fair value" with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action to which
the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action.
(5) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the statutory rate set forth in Section
15-1-1, compounded annually.
(6) "Record stockholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares
that are registered in the name of a nominee to the extent the beneficial owner
is recognized by the corporation as the stockholder as provided in Section
16-10A-723.
(7) "Stockholder" means the record stockholder or the beneficial
stockholder.
16-10A-1302. RIGHT TO DISSENT.
(1) A stockholder, whether or not entitled to vote, is entitled to dissent from,
and obtain payment of the fair value of shares held by him in the event of, any
of the following corporate actions:
(a) consummation of a plan of merger to which the corporation is a party
if:
(i) stockholder approval is required for the merger by Section
16-10A-1103 or the articles of incorporation; or
(ii) the corporation is a subsidiary that is merged with its parent
under Section 16-10A-1104;
(b) consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares will be acquired;
(c) consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of the corporation for
which a stockholder vote is required under Subsection
16-10A-1202(1), but not including a sale for cash pursuant to a plan
by which all or substantially all of the net proceeds of the sale
will be distributed to the stockholders within one year after the
date of sale; and
(d) consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of an entity controlled
by the corporation if the stockholders of the corporation were
entitled to vote upon the consent of the corporation to the
disposition pursuant to Subsection 16-10A-1202(2).
(2) A stockholder is entitled to dissent and obtain payment of the fair value of
his shares in the event of any other corporate action to the extent the Articles
of incorporation, bylaws, or a resolution of the board of directors so provides.
(3) Notwithstanding the other provisions of this part, except to the extent
otherwise provided in the articles of incorporation, bylaws, or a resolution of
the board of directors, and subject to the limitations set forth in Subsection
(4), a stockholder is not entitled to dissent and obtain payment under
Subsection (1) of the fair value of the shares of any class or series of shares
which either were listed on a national securities exchange registered under the
Federal Securities Exchange Act of 1934, as amended, or on the National Market
System of the National Association of Securities Dealers Automated Quotation
System, or were held of record by more than 2,000 stockholders, at the time of:
28
(a) the record date fixed under Section 16-10A-707 to determine the
stockholders entitled to receive notice of the stockholders' meeting
at which the corporate action is submitted to a vote;
(b) the record date fixed under Section 16-10A-704 to determine
stockholders entitled to sign writings consenting to the proposed
corporate action; or
(c) the effective date of the corporate action if the corporate action
is authorized other than by a vote of stockholders.
(4) The limitation set forth in Subsection (3) does not apply if the stockholder
will receive for his shares, pursuant to the corporate action, anything except:
(a) shares of the corporation surviving the consummation of the plan of
merger or share exchange;
(b) shares of a corporation which at the effective date of the plan of
merger or share exchange either will be listed on a national
securities exchange registered under the federal Securities Exchange
Act of 1934, as amended, or on the National Market System of the
National Association of Securities Dealers Automated Quotation
System, or will be held of record by more than 2,000 stockholders;
(c) cash in lieu of fractional shares; or
(d) any combination of the shares described in Subsection (4), or cash
in lieu of fractional shares.
(5) A stockholder entitled to dissent and obtain payment for his shares under
this part may not challenge the corporate action creating the entitlement unless
the action is unlawful or fraudulent with respect to him or to the corporation.
16-10A-1303. DISSENT BY NOMINEES AND BENEFICIAL OWNERS.
(1) A record stockholder may assert dissenters' rights as to fewer than all the
shares registered in his name only if the stockholder dissents with respect to
all shares beneficially owned by any one person and causes the corporation to
receive written notice which states the dissent and the name and address of each
person on whose behalf dissenters' rights are being asserted. The rights of a
partial dissenter under this subsection are determined as if the shares as to
which the stockholder dissents and the other shares held of record by him were
registered in the names of different stockholders.
(2) A beneficial stockholder may assert dissenters' rights as to shares held on
his behalf only if:
(a) the beneficial stockholder causes the corporation to receive the
record stockholder's written consent to the dissent not later than
the time the beneficial stockholder asserts dissenters' rights; and
(b) the beneficial stockholder dissents with respect to all shares of
which he is the beneficial stockholder.
(3) The corporation may require that, when a record stockholder dissents with
respect to the shares held by any one or more beneficial stockholders, each
beneficial stockholder must certify to the corporation that both he and the
record stockholders of all shares owned beneficially by him have asserted, or
will timely assert, dissenters' rights as to all the shares unlimited on the
ability to exercise dissenters' rights. The certification requirement must be
stated in the dissenters' notice given pursuant to Section 16-10A-1322.
29
16-10A-1320. NOTICE OF DISSENTERS' RIGHTS.
(1) If a proposed corporate action creating dissenters' rights under Section
16-10A-1302 is submitted to a vote at a stockholders' meeting, the meeting
notice must be sent to all stockholders of the corporation as of the applicable
record date, whether or not they are entitled to vote at the meeting. The notice
shall state that stockholders are or may be entitled to assert dissenters'
rights under this part. The notice must be accompanied by a copy of this part
and the materials, if any, that under this chapter are required to be given the
stockholders entitled to vote on the proposed action at the meeting. Failure to
give notice as required by this subsection does not affect any action taken at
the stockholders' meeting for which the notice was to have been given.
(2) If a proposed corporate action creating dissenters' rights under Section
16-10A-1302 is authorized without a meeting of stockholders pursuant to Section
16-10A-704, any written or oral solicitation of a stockholder to execute a
written consent to the action contemplated by Section 16-10A-704 must be
accompanied or preceded by a written notice stating that stockholders are or may
be entitled to assert dissenters' rights under this part, by a copy of this
part, and by the materials, if any, that under this chapter would have been
required to be given to stockholders entitled to vote on the proposed action if
the proposed action were submitted to a vote at a stockholders' meeting. Failure
to give written notice as provided by this subsection does not affect any action
taken pursuant to Section 16-10A-704 for which the notice was to have been
given.
16-10A-1321. DEMAND FOR PAYMENT -- ELIGIBILITY AND NOTICE OF INTENT.
(1) If a proposed corporate action creating dissenters' rights under Section
16-10A-1302 is submitted to a vote at a stockholders' meeting, a stockholder who
wishes to assert dissenters' rights:
(a) must cause the corporation to receive, before the vote is taken,
written notice of his intent to demand payment for shares if the
proposed action is effectuated; and
(b) may not vote any of his shares in favor of the proposed action.
(2) If a proposed corporate action creating dissenters' rights under Section
16-10A-1302 is authorized without a meeting of stockholders pursuant to Section
16-10A-704, a stockholder who wishes to assert dissenters' rights may not
execute a writing consenting to the proposed corporate action.
(3) In order to be entitled to payment for shares under this part, unless
otherwise provided in the articles of incorporation, bylaws, or a resolution
adopted by the board of directors, a stockholder must have been a stockholder
with respect to the shares for which payment is demanded as of the date the
proposed corporate action creating dissenters' rights under Section 16-10A-1302
is approved by the stockholders, if stockholder approval is required, or as of
the effective date of the corporate action if the corporate action is authorized
other than by a vote of stockholders.
(4) A stockholder who does not satisfy the requirements of Subsections (1)
through (3) is not entitled to payment for shares under this part. 16-10A-1322.
DISSENTERS' NOTICE.
(1) If proposed corporate action creating dissenters' rights under Section
16-10A-1302 is authorized, the corporation shall give a written dissenters'
notice to all stockholders who are entitled to demand payment for their shares
under this part.
(2) The dissenters' notice required by Subsection (1) must be sent no later than
ten days after the effective date of the corporate action creating dissenters'
rights under Section 16-10A-1302, and shall:
(a) state that the corporate action was authorized and the effective
date or proposed effective date of the corporate action;
(b) state an address at which the corporation will receive payment
demands and an address at which certificates for certificated shares
must be deposited;
(c) inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(d) supply a form for demanding payment, which form requests a dissenter
to state an address to which payment is to be made;
30
(e) set a date by which the corporation must receive the payment demand
and by which certificates for certificated shares must be deposited
at the address I indicated in the dissenters' notice, which dates
may not be fewer than 30 nor more than 70 days after the date the
dissenters' notice required by Subsection (1) is given;
(f) state the requirement contemplated by Subsection 16-10A-1303(3), if
the requirement is imposed; and
(g) be accompanied by a copy of this part.
16-10A-1323. PROCEDURE TO DEMAND PAYMENT.
(1) A stockholder who is given a dissenters' notice described in Section
16-10A-1322, who meets the requirements of Section 16-10A-1321, and wishes to
assert dissenters' rights must, in accordance with the terms of the dissenters'
notice:
(a) cause the corporation to receive a payment demand, which may be the
payment demand form contemplated in Subsection 16-10A-1322(2)(d),
duly completed, or may be stated in another writing;
(b) deposit certificates for his certificated shares in accordance with
the terms of the dissenters' notice; and
(c) if required by the corporation in the dissenters' notice described
in Section 16-10A-1322, as contemplated by Section 16-10A-1327,
certify in writing, in or with the payment demand, whether or not he
or the person on whose behalf he asserts dissenters' rights acquired
beneficial ownership of the shares before the date of the first
announcement to news media or to stockholders of the terms of the
proposed corporate action creating dissenters' rights under Section
16-10A-1302.
(2) A stockholder who demands payment in accordance with Subsection (1) retains
all rights of a stockholder except the right to transfer the shares until the
effective date of the proposed corporate action giving rise to the exercise of
dissenters' rights and has only the right to receive payment for the shares
after the effective date of the corporate action.
(3) A stockholder who does not demand payment and deposit share certificates as
required, by the date or dates set in the dissenters' notice, is not entitled to
payment for shares under this part.
16-10A-1324. UNCERTIFICATED SHARES.
(1) Upon receipt of a demand for payment under Section 16-10A-1323 from a
stockholder holding uncertificated shares, and in lieu of the deposit of
certificates representing the shares, the corporation may restrict the transfer
of the shares until the proposed corporate action is taken or the restrictions
are released under Section 16-10A-1326.
(2) In all other respects, the provisions of Section 16-10A-1323 apply to
stockholders who own uncertificated shares.
16-10A-1325. PAYMENT.
(1) Except as provided in Section 16-10A-1327, upon the later of the effective
date of the corporate action creating dissenters' rights under Section
16-10A-1302, and receipt by the corporation of each payment demand pursuant to
Section 16-10A-1323, the corporation shall pay the amount the corporation
estimates to be the fair value of the dissenter's shares, plus interest to each
dissenter who has complied with Section 16-10A-1323, and who meets the
requirements of Section 16-10A-1321, and who has not yet received payment.
(2) Each payment made pursuant to Subsection (1) must be accompanied by:
(a)(i) (A) the corporation's balance sheet as of the end of its most
recent fiscal year, or if not available, a fiscal year ending
not more than 16 months before the date of payment;
31
(B) an income statement for that year;
(C) a statement of changes in stockholders' equity for that
year and a statement of cash flow for that year, if the
corporation customarily provides such statements to
stockholders; and
(D) the latest available interim financial statements, if any;
(ii) the balance sheet and statements referred to in
Subsection (i) must be audited if the corporation customarily
provides audited financial statements to stockholders;
(b) a statement of the corporation's estimate of the fair value of the
shares and the amount of interest payable with respect to the
shares;
(c) a statement of the dissenter's right to demand payment under Section
16-10A-1328; and
(d) a copy of this part.
16-10A-1326. FAILURE TO TAKE ACTION.
(1) If the effective date of the corporate action creating dissenters' rights
under Section 16-10A-1302 does not occur within 60 days after the date set by
the corporation as the date by which the corporation must receive payment
demands as provided in Section 16-10A-1322, the corporation shall return all
deposited certificates and release the transfer restrictions imposed on
uncertificated shares, and all stockholders who submitted a demand for payment
pursuant to Section 16-10A-1323 shall thereafter have all rights of a
stockholder as if no demand for payment had been made.
(2) If the effective date of the corporate action creating dissenters' rights
under Section 16-10A-1302 occurs more than 60 days after the date set by the
corporation as the date by which the corporation must receive payment demands as
provided in Section 16-10A-1322, then the corporation shall send a new
dissenters' notice, as provided in Section 16-10A-1322, and the provisions of
Sections 16-10A-1323 through 16-10A-1328 shall again be applicable.
16-10A-1327. SPECIAL PROVISIONS RELATING TO SHARES ACQUIRED AFTER ANNOUNCEMENT
OF PROPOSED CORPORATE ACTION.
(1) A corporation may, with the dissenters' notice given pursuant to Section
16-10A-1322, state the date of the first announcement to news media or to
stockholders of the terms of the proposed corporate action creating dissenters'
rights under Section 16-10A-1302 and state that a stockholder who asserts
dissenters' rights must certify in writing, in or with the payment demand,
whether or not he or the person on whose behalf he asserts dissenters' rights
acquired beneficial ownership of the shares before that date. With respect to
any dissenter who does not certify in writing, in or with the payment demand
that he or the person on whose behalf the dissenters' rights are being asserted,
acquired beneficial ownership of the shares before that date, the corporation
may, in lieu of making the payment provided in Section 16-10A-1325, offer to
make payment if the dissenter agrees to accept it in full satisfaction of his
demand.
(2) An offer to make payment under Subsection (1) shall include or be
accompanied by the information required by Subsection 16-10A-1325(2).
16-10A-1328. PROCEDURE FOR STOCKHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
(1) A dissenter who has not accepted an offer made by a corporation under
Section 16-10A-1327 may notify the corporation in writing of his own estimate of
the fair value of his shares and demand payment of the estimated amount, plus
interest, less any payment made under Section 16-10A-1325, if:
(a) the dissenter believes that the amount paid under Section
16-10A-1325 or offered under Section 16-10A-1327 is less than the
fair value of the shares;
(b) the corporation fails to make payment under Section 16-10A-1325
within 60 days after the date set by the corporation as the date by
which it must receive the payment demand; or
(c) the corporation, having failed to take the proposed corporate action
creating dissenters' rights, does not return the deposited
certificates or release the transfer restrictions imposed on
uncertificated shares as required by Section 16-10A-1326.
32
(2) A dissenter waives the right to demand payment under this section unless he
causes the corporation to receive the notice required by Subsection (1) within
30 days after the corporation made or offered payment for his shares.
16-10A-1330. JUDICIAL APPRAISAL OF SHARES -- COURT ACTION.
(1) If a demand for payment under Section 16-10A-1328 remains unresolved, the
corporation shall commence a proceeding within 60 days after receiving the
payment demand contemplated by Section 16-10A-1328, and petition the court to
determine the fair value of the shares and the amount of interest. If the
corporation does not commence the proceeding within the 60-day period, it shall
pay each dissenter whose demand remains unresolved the amount demanded.
(2) The corporation shall commence the proceeding described in Subsection (1) in
the district court of the county in this state where the corporation's principal
office, or if it has no principal office in this state, the county where its
registered office is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic corporation
merged with, or whose shares were acquired by, the foreign corporation was
located.
(3) The corporation shall make all dissenters who have satisfied the
requirements of Sections 16-10A-1321, 16-10A-1323, and 16-10A-1328, whether or
not they are residents of this state whose demands remain unresolved, parties to
the proceeding commenced under Subsection (2) as an action against their shares.
All such dissenters who are named as parties must be served with a copy of the
petition. Service on each dissenter may be by registered or certified mail to
the address stated in his payment demand made pursuant to Section 16-10A-1328.
If no address is stated in the payment demand, service may be made at the
address stated in the payment demand given pursuant to Section 16-10A-1323. If
no address is stated in the payment demand, service may be made at the address
shown on the corporation's current record of stockholders for the record
stockholder holding the dissenter's shares. Service may also be made otherwise
as provided by law.
(4) The jurisdiction of the court in which the proceeding is commenced under
Subsection (2) is plenary and exclusive. The court may appoint one or more
persons as appraisers to receive evidence and recommend decision on the question
of fair value. The appraisers have the powers described in the order appointing
them, or in any amendment to it. The dissenters are entitled to the same
discovery rights as parties in other civil proceedings.
(5) Each dissenter made a party to the proceeding commenced under Subsection (2)
is entitled to judgment:
(a) for the amount, if any, by which the court finds that the fair value
of his shares, plus interest, exceeds the amount paid by the
corporation pursuant to Section 16-10A-1325; or
(b) for the fair value, plus interest, of the dissenter's after-acquired
shares for which the corporation elected to withhold payment under
Section 16-10A-1327.
16-10A-1331. COURT COSTS AND COUNSEL FEES.
(1) The court in an appraisal proceeding commenced under Section 16-10A-1330
shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The court shall
assess the costs against the corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable, to
the extent the court finds that the dissenters acted arbitrarily, vexatiously,
or not in good faith in demanding payment under Section 16-10A-1328.
(2) The court may also assess the fees and expenses of counsel and expertsfor
the respective parties, in amounts the court finds equitable:
(a) against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the
requirements of Sections 16-10A-1320 through 16-10A-1328; or
33
(b) against either the corporation or one or more dissenters, in favor
of any other party, if the court finds that the party against whom
the fees and expenses are assessed acted arbitrarily, vexatiously,
or not in good faith with respect to the rights provided by this
part.
(3) If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to those counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited.
34
APPENDIX C
ARTICLES OF INCORPORATION
OF
SMART ENERGY SOLUTIONS, INC.
I, the person hereinafter named as incorporator, for the purpose of
associating to establish a corporation, under the provisions and subject to the
requirements of Title 7, Chapter 78 of Nevada Revised Statutes, and the acts
amendatory thereof, and hereinafter sometimes referred to as the General
Corporation Law of the State of Nevada, do hereby adopt and make the following
Articles of Incorporation:
FIRST: The name of the corporation (hereinafter called the
corporation) is Battery Brain Smart Energy Solutions, Inc.
SECOND: The name of the corporation's resident agent in the State of
Nevada is CSC Services of Nevada, Inc., and the street address of the said
resident agent where process may be served on the corporation is 502 East John
Street, Carson City 89706. The mailing address and the street address of the
said resident agent are identical.
THIRD: (a) The total number of shares of stock which the Corporation
shall have authority to issue is Five Hundred and One Million (501,000,000)
which shall consist of (i) Five Hundred Million (500,000,000) shares of common
stock, no par value per share (the "Common Stock"), and (ii) One Million
(1,000,000) shares of preferred stock, no par value per share (the "Preferred
Stock").
(b) The Preferred Stock may be issued in one or more series, from
time to time, with each such series to have such designation, relative
rights, preferences or limitations, as shall be stated and expressed in
the resolution or resolutions providing for the issue of such series
adopted by the Board of Directors of the Corporation (the "Board"),
subject to the limitations prescribed by law and in accordance with the
provisions hereof, the Board being hereby expressly vested with authority
to adopt any such resolution or resolutions. The authority of the Board
with respect to each series of Preferred Stock shall include, but not be
limited to, the determination or fixing of the following:
(i) The distinctive designation and number of shares comprising such
series, which number may (except where otherwise provided by the Board
increasing such series) be increased or decreased (but not below the
number of shares then outstanding) from time to time by like action of the
Board;
(ii) The dividend rate of such series, the conditions and time upon
which such dividends shall be payable, the relation which such dividends
shall bear to the dividends payable on any other class or classes of Stock
or series thereof, or any other series of the same class, and whether such
dividends shall be cumulative or non-cumulative;
(iii) The conditions upon which the shares of such series shall be
subject to redemption by the Corporation and the times, prices and other
terms and provisions upon which the shares of the series may be redeemed;
35
(iv) Whether or not the shares of the series shall be subject to the
operation of a retirement or sinking fund to be applied to the purchase or
redemption of such shares and, if such retirement or sinking fund be
established, the annual amount thereof and the terms and provisions
relative to the operation thereof;
(v) Whether or not the shares of the series shall be convertible
into or exchangeable for shares of any other class or classes, with or
without par value, or of any other series of the same class, and, if
provision is made for conversion or exchange, the times, prices, rates,
adjustments and other terms and conditions of such conversion or exchange;
(vi) Whether or not the shares of the series shall have voting
rights, in addition to the voting rights provided by law, and, if so, the
terms of such voting rights;
(vii) The rights of the shares of the series in the event of
voluntary or involuntary liquidation, dissolution or upon the distribution
of assets of the Corporation; and
(viii) Any other powers, preferences and relative participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of the shares of such series, as the Board may deem
advisable and as shall not be inconsistent with the provisions of this
Articles of Incorporation.
(c) The holders of shares of the Preferred Stock of each series
shall be entitled to receive, when and as declared by the Board, out of funds
legally available for the payment of dividends, dividends (if any) at the rates
fixed by the Board for such series before any cash dividends shall be declared
and paid or set apart for payment, on the Common Stock with respect to the same
dividend period.
(d) The holders of shares of the Preferred Stock of each series
shall be entitled, upon liquidation or dissolution or upon the distribution of
the assets of the Corporation, to such preferences as provided in the resolution
or resolutions creating such series of Preferred Stock, and no more, before any
distribution of the assets of the Corporation shall be made to the holders of
shares of the Common Stock. Whenever the holders of shares of the Preferred
Stock shall have been paid the full amounts to which they shall be entitled, the
holders of shares of the Common Stock shall be entitled to share ratably in all
remaining assets of the Corporation.
FOURTH: The governing board of the corporation shall be styled as a
"Board of Directors", and any member of said Board shall be styled as a
"Director."
The number of members constituting the first Board of Directors of
the corporation is two; and the name and the post office box or street address,
either residence or business, of each of said members are as follows:
NAME ADDRESS
---- -------
Amir Uziel 9 Hakormim Street
Risho Lezion, Israel 75749
Robert Lubin 410 Lopez Drive
West Hempstead, New York 11552
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The number of directors of the corporation may be increased or
decreased in the manner provided in the Bylaws of the corporation; provided,
that the number of directors shall never be less than one. In the interim
between elections of directors by stockholders entitled to vote, all vacancies,
including vacancies caused by an increase in the number of directors and
including vacancies resulting from the removal of directors by the stockholders
entitled to vote which are not filled by said stockholders, may be filled by the
remaining directors, though less than a quorum.
FIFTH: The name and the post office box or street address, either
residence or business, of the incorporator signing these Articles of
Incorporation are as follows:
NAME ADDRESS
---- -------
Corporate Services Carson City, Nevada
SIXTH: The corporation shall have perpetual existence.
SEVENTH: The personal liability of the directors of the corporation
is hereby eliminated to the fullest extent permitted by the General Corporation
Law of the State of Nevada, as the same may be amended and supplemented. Any
repeal or amendment of this Article by the stockholders of the Corporation shall
be prospective.
EIGHTH: The corporation shall, to the fullest extent permitted by
the General Corporation Law of the State of Nevada, as the same may be amended
and supplemented, indemnify any and all persons whom it shall have power to
indemnify under said Law from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said Law, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any Bylaw, agreement,
vote of stockholders 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.
NINTH: The nature of the business of the corporation and the objects
or the purposes to be transacted, promoted, or carried on by it are to engage in
any lawful activity.
TENTH: The corporation reserves the right to amend, alter, change,
or repeal any provision contained in these Articles of Incorporation in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
37
APPENDIX D
BY-LAWS
OF
SMART ENERGY SOLUTIONS, INC.
(the "Corporation")
* * * * * * * * * * *
ARTICLE I
Offices
The registered office of the Corporation shall be in the City of
Carson City, County of Carson City, State of Nevada. The Corporation also may
have offices at such other places, both within and without the State of Nevada,
as the Board may determine and designate from time to time or the business of
the Corporation requires. The principal business office of the Corporation shall
be in Clifton, County of Passaic, State of New Jersey.
ARTICLE II
Books
The books and records of the Corporation may be kept (except as otherwise
provided by the laws of the State of Nevada) outside of the State of Nevada and
at such place or places as may be designated by the Board of Directors.
ARTICLE III
Stockholders
Section 1. Place of Meetings, etc. Except as otherwise provided in
these Bylaws, all meetings of the stockholders shall be held at such dates,
times and places, within or without the State of Nevada, as shall be determined
by the Board of Directors or the President of the Corporation and as shall be
stated in the notice of the meeting or in waivers of notice thereof. If the
place of any meeting is not so fixed, it shall be held at the registered office
of the Corporation in the State of Nevada.
Section 2. Annual Meetings. The Annual Meeting of stockholders of
the Corporation for the election of Directors and the transaction of such other
business as may properly come before said meeting shall be held at the principal
business office of the Corporation or at such other place or places either
within or without the State of Nevada as may be designated by the Board of
Directors and stated in the notice of the meeting, on a date not later than 120
days following the close of the fiscal year of the Corporation as designated by
the Board of Directors.
Section 3. Special Meetings. Special meetings of the stockholders of
the Corporation shall be held whenever called in the manner required by the laws
of the State of Nevada for purposes as to which there are special statutory
provisions, and for other purposes whenever called by resolution of the Board of
Directors, or by the President, or by the holders of a majority of the
outstanding shares of capital stock of the Corporation the holders of which are
entitled to vote on matters that are to be voted on at such meeting. Any such
Special Meetings of stockholders may be held at the principal business office of
the Corporation or at such other place or places, either within or without the
State of Nevada, as may be specified in the notice thereof. Business transacted
at any Special Meeting of stockholders of the Corporation shall be limited to
the purposes stated in the notice thereof. The notice shall state the date,
time, place and purpose or purposes of the proposed meeting.
38
Section 4. Notice of Meetings. Except as otherwise required or
permitted by law, whenever the stockholders of the Corporation are required or
permitted to take any action at a meeting, written notice thereof shall be
given, stating the place, date and time of the meeting and, unless it is the
annual meeting, by or at whose direction it is being issued. The notice also
shall designate the place where the stockholders' list is available for
examination, unless the list is kept at the place where the meeting is to be
held. Notice of a Special Meeting also shall state the purpose or purposes for
which the meeting is called. A copy of the notice of any meeting shall be
delivered personally or shall be mailed, not less than ten (10) nor more than
sixty (60) days before the date of the meeting, to each stockholder of record
entitled to vote at the meeting. If mailed, the notice shall be given when
deposited in the United States mail, postage prepaid and shall be directed to
each stockholder at his or her address as it appears on the record of
stockholders, unless he or she shall have filed with the Secretary of the
Corporation a written request that notices to him or her be mailed to some other
address, in which case it shall be directed to him or her at the other address.
Notice of any meeting of stockholders shall not be required to be given to any
stockholder who shall attend the meeting, except for the express purpose of
objecting at the beginning thereof to the transaction of any business because
the meeting is not lawfully called or convened, or who shall submit, either
before or after the meeting, a signed waiver of notice. Unless the Board of
Directors, after the adjournment of such meeting, shall fix a new record date
for an adjourned meeting or unless the adjournment is for more than thirty (30)
days, notice of an adjourned meeting need not be given if the place, date and
time to which the meeting shall be adjourned is announced at the meeting at
which the adjournment is taken.
Section 5. List of Stockholders. The officer of the Corporation who
shall have charge of the stock ledger of the Corporation shall prepare and make,
at least ten (10) days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at said meeting, arranged in alphabetical
order and showing the address and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours for a
period of at least ten (10) days prior to the meeting, either at a place
specified in the notice of the meeting or at the place where the meeting is to
be held. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
present at the meeting.
39
Section 6. Quorum. Except as otherwise expressly provided by the
laws of the State of Nevada, or by the Certificate of Incorporation of the
Corporation, or by these Bylaws, at any and all meetings of the stockholders of
the Corporation there must be present, either in person or by proxy,
stockholders owning a majority of the issued and outstanding shares of the
capital stock of the Corporation entitled to vote at said meeting. At any
meeting of stockholders at which a quorum is not present, the holders of, or
proxies for, a majority of the stock which is represented at such meeting, may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
noticed. If the adjournment is for more than thirty (30) days, or if after
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 7. Organization. The President shall call to order meetings
of the stockholders and shall act as Chairman of such meetings. The Board of
Directors or the stockholders may appoint any stockholder or any Director or
officer of the Corporation to act as Chairman at any meeting in the absence of
the President. The Secretary of the Corporation shall act as secretary of all
meetings of the stockholders, but in the absence of the Secretary, the presiding
officer may appoint any other person to act as secretary of the meeting.
Section 8. Voting. Except as otherwise provided by the Certificate
of Incorporation of the Corporation or these Bylaws, at any meeting of the
stockholders each stockholder of record of the Corporation having the right to
vote thereat shall be entitled to one (1) vote for each share of stock
outstanding in his or her name on the books of the Corporation as of the record
date and entitling him or her to so vote. A stockholder may vote in person or by
proxy. Except as otherwise provided by the law of the State of Nevada or by the
Certificate of Incorporation of the Corporation, any corporate action to be
taken by a vote of the stockholders, other than the election of directors, shall
be authorized by not less than a majority of the votes cast at a meeting by the
stockholders present in person or by proxy and entitled to vote thereon.
Directors shall be elected as provided in Section 1 of Article IV of these
Bylaws. Written ballots shall not be required for voting on any matter unless
ordered by the Chairman of the meeting.
Section 9. Proxies. Every proxy shall be executed in writing by the
stockholder or by his or her attorney-in-fact.
Section 10. Consent of Stockholders in Lieu of Meeting. Unless
otherwise provided in the Certificate of Incorporation of the Corporation,
whenever the vote of the stockholders at a meeting thereof is required or
permitted to be taken in connection with any corporate action by any provisions
of the laws of the state of Nevada or of the Certificate of Incorporation, such
corporate 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, in person or by proxy, 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 in person or by proxy. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing,
but who were entitled to vote on the matter.
ARTICLE IV
Directors
Section 1. Number, Election and Term of Office. The business and
affairs of the Corporation shall be managed by the Board of Directors. The
number of Directors which shall constitute the whole Board shall be not less
than one (1) nor more than nine (9). Within such limits, the number of Directors
may be fixed from time to time by vote of the stockholders or of the Board of
Directors, at any regular or special meeting, subject to the provisions of the
Certificate of Incorporation. The initial board shall consist of two (2)
Directors. Directors need not be stockholders. Directors shall be elected at the
Annual Meeting of the stockholders of the Corporation, except as provided in
Section 2 of this Article IV, to serve until their respective successors are
duly elected and qualified. When used in these Bylaws, the phrase "entire Board"
means the total number of directors which the Corporation would have if there
were no vacancies.
40
Section 2. Vacancies and Newly Created Directorships. Except as
hereinafter provided, any vacancy in the office of a Director occurring for any
reason other than the removal of a Director pursuant to Section 3 of this
Article, and any newly created Directorship resulting from any increase in the
authorized number of Directors, may be filled by a majority of the Directors
then in office. In the event that any vacancy in the office of a Director occurs
as a result of the removal of a Director pursuant to Section 3 of this Article,
or in the event that vacancies occur contemporaneously in the offices of all of
the Directors, such vacancy or vacancies shall be filled by the stockholders of
the Corporation at a meeting of stockholders called for that purpose. Directors
chosen or elected as aforesaid shall hold office until their respective
successors are duly elected and qualified.
Section 3. Removals. At any meeting of stockholders of the
Corporation called for that purpose, the holders of a majority of the shares of
capital stock of the Corporation entitled to vote at such meeting may remove
from office any or all of the Directors, with or without cause.
Section 4. Resignations. Any director may resign at any time by
giving written notice of his or her resignation to the Corporation. A
resignation shall take effect at the time specified therein or, if the time when
it shall become effective shall not be specified therein, immediately upon its
receipt, and, unless otherwise specified therein, the acceptance of a
resignation shall not be necessary to make it effective.
Section 5. Place of Meetings. Except as otherwise provided in these
Bylaws, all meetings of the Board of Directors shall be held at the principal
business office of the Corporation or at such other place, within or without the
State of Nevada, as the Board determines from time to time.
Section 6. Annual Meetings. The annual meeting of the Board of
Directors shall be held either (a) without notice immediately after the annual
meeting of stockholders and in the same place, or (b) as soon as practicable
after the annual meeting of stockholders on such date and at such time and place
as the Board determines.
Section 7. Regular Meetings. Regular meetings of the Board of
Directors shall be held on such dates and at the principal business office of
the Corporation or at such other place, either within or without the State of
Nevada, as the Board determines. Notice of regular meetings need not be given,
except as otherwise required by law.
Section 8. Special Meetings. Special meetings of the Board of
Directors may be called by the President or any two Directors on notice given to
each Director, and such meetings shall be held at the principal business office
of the Corporation or at such other place, either within or without the State of
Nevada, as shall be specified in the notices thereof. The request shall state
the date, time, place and purpose or purposes of the proposed meeting.
Section 9. Notice of Meetings. Notice of each special meeting of the
Board of Directors (and of each annual meeting held pursuant to subdivision (b)
of Section 6 of this Article IV) shall be given, not later than 24 hours before
the meeting is scheduled to commence, by the President or the Secretary and
shall state the place, date and time of the meeting. Notice of each meeting may
be delivered to a Director by hand or given to a director orally (whether by
telephone or in person) or mailed or telegraphed to a Director at his or her
residence or usual place of business, provided, however, that if notice of less
than 72 hours is given it may not be mailed. If mailed, the notice shall be
deemed to have been given when deposited in the United States mail, postage
prepaid, and if telegraphed, the notice shall be deemed to have been given when
the contents of the telegram are transmitted to the telegraph service with
instructions that the telegram immediately be dispatched. Notice of any meeting
need not be given to any Director who shall submit, either before or after the
meeting, a signed waiver of notice or who shall attend the meeting, except if
such Director shall attend for the express purpose of objecting at the beginning
thereof to the transaction of any business because the meeting is not lawfully
called or convened. Notice of any adjourned meeting, including the place, date
and time of the new meeting, shall be given to all Directors not present at the
time of the adjournment, as well as to the other Directors unless the place,
date and time of the new meeting is announced at the adjourned meeting.
41
Section 10. Quorum. Except as otherwise provided by the laws of the
State of Nevada or in these Bylaws, at all meetings of the Board of Directors of
the Corporation a majority of the entire Board shall constitute a quorum for the
transaction of business, and the vote of a majority of the Directors present at
a meeting at which a quorum is present shall be the act of the Board of
Directors. A majority of the Directors present, whether or not a quorum is
present, may adjourn any meeting to another place, date and time.
Section 11. Conduct of Meetings. At each meeting of the Board of
Directors of the Corporation, the President or, in his or her absence, a
Director chosen by a majority of the Directors present shall act as Chairman of
the meeting. The Secretary or, in his or her absence, any person appointed by
the Chairman of the meeting shall act as Secretary of the meeting and keep the
minutes thereof. The order of business at all meetings of the Board shall be as
determined by the Chairman of the meeting.
Section 12. Committees of the Board. The Board of Directors, by
resolution adopted by a majority of the entire Board of Directors, may designate
an executive committee and other committees, each consisting of one (1) or more
Directors. Each committee (including the members thereof) shall serve at the
pleasure of the Board of Directors and shall keep minutes of its meetings and
report the same to the Board of Directors. The Board of Directors may designate
one or more Directors as alternate members of any committee. Alternate members
may replace any absent or disqualified member or members at any meeting of a
committee. In addition, in the absence or disqualification of a member of a
committee, if no alternate member has been designated by the Board of Directors,
the members present at any meeting and not disqualified from voting, whether or
not they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of the absent or
disqualified member.
Except as limited by the laws of the State of Nevada, each
committee, to the extent provided in the resolution establishing it, shall have
and may exercise all the powers and authority of the Board of Directors with
respect to all matters.
Section 13. Operation of Committees. A majority of all the members
of a committee shall constitute a quorum for the transaction of business, and
the vote of a majority of all the members of a committee present at a meeting at
which a quorum is present shall be the act of the committee. Each committee
shall adopt whatever other rules of procedure it determines for the conduct of
its activities.
Section 14. Consent to Action. Any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee may be
taken without a meeting if all members of the Board of Directors or committee,
as the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board of Directors or committee.
Section 15. Meetings Held Other Than in Person. Unless otherwise
restricted by the Certificate of Incorporation or these Bylaws, members of the
Board of Directors or any committee may participate in a meeting of the Board of
Directors or committee, as the case may be, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation shall constitute
presence in person at the meeting.
42
Section 16. Compensation of Directors. Directors, as such, shall not
receive any stated salary for their services, but, by resolution of the Board, a
fixed sum and expenses of attendance, if any, may be allowed for the attendance
at each regular or special meeting of the Board; however nothing herein
contained shall be construed to preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefore.
ARTICLE V
Officers
Section 1. Number, Election and Term of Office. The officers of the
Corporation shall be a President, a Chief Executive Officer, a Secretary and a
Chief Financial Officer, and may at the discretion of the Board of Directors
include a Chairman of the Board and one or more Vice Presidents, Director of
Corporate Development, General Managers, Assistant Financial Officers and
Assistant Secretaries. The officers of the Corporation shall be elected annually
by the Board of Directors at its meeting held immediately after the Annual
Meeting of the stockholders, and shall hold their respective offices until their
successors are duly elected and qualified. Any two (2) offices may be held by
the same person. The Board of Directors may from time to time appoint such other
officers and agents as the interests of the Corporation may require and may fix
their duties and terms of office. Any officer may devote less than one hundred
percent (100%) of his or her working time to his or her activities as such if
the Board of Directors so approves.
Section 2. The President. The President shall be the chief executive
and operating officer of the Corporation, and shall preside at all meetings of
the stockholders and of the Board of Directors. The President shall have general
and active management of the business and affairs of the Corporation, subject to
the control of the Board, shall see that all orders and resolutions of the Board
are effectuated, and shall have such other powers and duties as the Board
assigns to him. He shall ensure that the books, reports, statements,
certificates and other records of the Corporation are kept, made or filed in
accordance with the laws of the State of Nevada. He shall cause to be called
regular and special meetings of the stockholders and of the Board of Directors
in accordance with these Bylaws. He may sign, execute and deliver in the name of
the Corporation all deeds, mortgages, bonds, contracts or other instruments
authorized by the Board of Directors, except in cases where the signing,
execution or delivery thereof shall be expressly delegated by the Board of
Directors or by these Bylaws to some other officer or agent of the Corporation
or where required by law to be otherwise signed, executed or delivered. He may
sign, jointly with the Chief Financial Officer, an Assistant Financial Officer,
the Secretary, or an Assistant Secretary, certificates of stock of the
Corporation. He shall appoint and remove, employ and discharge, and fix the
compensation of all servants, agents, employees and clerks of the Corporation
other than the duly elected or appointed officers, subject to the approval of
the Board of Directors. In addition to the powers and duties expressly conferred
upon him by these Bylaws, he shall, except as otherwise specifically provided by
the laws of the State of Nevada, have such other powers and duties as shall from
time to time be assigned to him by the Board of Directors.
Section 3. The Vice President. There may be such Vice Presidents as
the Board of Directors shall determine from time to time, with duties determined
by the Board of Directors. If there is only one Vice President appointed by the
Board, he shall perform, in the absence or disability of the President, the
duties and exercise the powers of the President and shall have such other powers
and duties as the Board or the President assigns to him.
Section 4. The Secretary. The Secretary may sign all certificates of
stock of the Corporation jointly with the President. He shall record all the
proceedings of the meetings of the stockholders and the Board of Directors of
the Corporation in the books to be kept for that purpose. He shall have safe
custody of the seal of the Corporation and, when authorized by the Board, he
shall affix the same to any corporate instrument, and when so affixed he may
attest the same by his signature. He shall keep the transfer books, in which all
transfers of the capital stock of the Corporation shall be registered, and the
stock books, which shall contain the names and addresses of all holders of the
capital stock of the Corporation and the number of shares held by each. He shall
keep the stock and transfer books available during business hours for inspection
by any stockholder and for the transfer of stock. He shall notify the Directors
and stockholders of the respective meetings as required by law or by these
Bylaws of the Corporation. He shall have and perform such other powers and
duties as may be required by law or the Bylaws of the Corporation, or which the
Board or the President may assign to him from time to time.
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Section 5. Assistant Secretaries. The Assistant Secretaries shall,
during the absence or incapacity of the Secretary, assume and perform all
functions and duties which the Secretary might lawfully do if present and not
under any incapacity.
Section 6. The Chief Financial Officer. Subject to the control of
the Board, the Chief Financial Officer shall have the care and custody of the
corporate funds and the books relating thereto. He may sign all certificates of
stock jointly with the President. He shall perform all other duties incident to
the office of Chief Financial Officer. He shall have such other powers and
duties as the Board or the President assigns to him from time to time. He shall
keep full and accurate accounts of all receipts and disbursements of the
Corporation in books belonging to the Corporation and shall deposit all monies
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. He shall
disburse the funds of the Corporation as may be ordered by the Board, and shall
render to the President or the Directors, whenever they may require it, an
account of all his transactions as Chief Financial Officer and an account of the
business and financial position of the Corporation. The Chief Financial Officer
shall be the "Treasurer" for purposes of the laws of the State of Nevada.
Section 7. Assistant Financial Officers. The Assistant Financial
Officers shall, during the absence or incapacity of the Chief Financial Officer,
assume and perform all functions and duties which the Chief Financial Officer
might lawfully do if present and not under any incapacity.
Section 8. Treasurer's Bond. The Chief Financial Officer and
Assistant Financial Officers shall, if required to do so by the Board of
Directors, each give a bond (which shall be renewed every six (6) years) in sum
and with such surety or sureties as the Board of Directors or the laws of the
State of Nevada may require.
Section 9. Transfer of Duties. The Board of Directors may transfer
the power and duties, in whole or in part, of any officer to any other officer,
or other persons, notwithstanding the provisions of these Bylaws, except as
otherwise provided by the laws of the State of Nevada.
Section 10. Removals. Subject to his or her earlier death,
resignation or removal as hereinafter provided, each officer shall hold his or
her office until his or her successor shall have been duly elected and shall
have qualified. Any officer or agent of the Corporation may be removed from
office at any time, with or without cause, by the affirmative vote of a majority
of the entire Board, at a meeting of the Board of Directors called for that
purpose.
Section 11. Resignations. Any officer or agent of the Corporation
may resign at any time by giving written notice of his or her resignation to the
Board of Directors or to the President or Secretary of the Corporation. Any such
resignation shall take effect at the time specified therein or, if the time when
it shall become effective shall not be specified therein, immediately upon its
receipt, and, unless otherwise specified therein, the acceptance of a
resignation shall not be necessary to make it effective.
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Section 12. Vacancies. If the office of President, Secretary or
Chief Financial Officer becomes vacant for any reason, the Board of Directors
shall choose a successor to hold such office for the unexpired term. If any
other officer or agent becomes vacant for any reason, the Board of Directors may
fill the vacancy, and each officer so elected shall serve for the remainder of
his or her predecessor's term.
Section 13. Compensation of Officers. The officers shall receive
such salary or compensation as may be determined by the Board of Directors.
ARTICLE V
Contracts, Checks and Notes
Section 1. Contracts. Unless the Board of Directors shall otherwise
specifically direct, all contracts of the Corporation shall be executed in the
name of the Corporation by the President or a Vice President.
Section 2. Checks and Notes. All negotiable instruments of the
Corporation shall be signed by such officers or agents of the Corporation as may
be designated by the Board of Directors.
ARTICLE VI
Provisions Relating to Stock
Certificates and Stockholders
Section 1. Certificates of Stock. Certificates for the Corporation's
capital stock shall be in such form as required by law and as approved by the
Board. Each certificate shall be signed in the name of the Corporation by the
President or any Vice President and by the Secretary, the Chief Financial
Officer or any Assistant Secretary or any Assistant Financial Officer and shall
bear the seal of the Corporation or a facsimile thereof. If any certificate is
countersigned by a transfer agent or registered by a registrar, other than the
Corporation or its employees, the signature of any officer of the Corporation
may be a facsimile signature. In case any officer, transfer agent or registrar
who shall have signed or whose facsimile signature was placed on any certificate
shall have ceased to be such officer, transfer agent or registrar before the
certificate shall be issued, it may nevertheless be issued by the Corporation
with the same effect as if he or she were such officer, transfer agent or
registrar at the date of issue.
Section 2. Lost Certificates, etc. The Corporation may issue a new
certificate for shares in place of any certificate theretofore issued by it,
alleged to have been lost, mutilated, stolen or destroyed, and the Board may
require the owner of the lost, mutilated, stolen or destroyed certificate, or
his legal representatives, to make an affidavit of that fact and to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation on account of the alleged loss,
mutilation, theft or destruction of the certificate or the issuance of a new
certificate.
Section 3. Transfer of Stock. Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, the Corporation shall issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
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Section 4. Record Date. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining stockholders entitled to
receive payment of any dividend or other distribution or the allotment of any
rights, or for the purpose of any other action, the Board may fix in advance, a
record date, which shall be not more than sixty (60) nor less than ten (10) days
before the date of any such meeting, nor more than sixty (60) days prior to any
other action.
Section 5. Registered Stockholders. The Corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and, accordingly, shall not be bound to recognize any
equitable or other claim to, or interest in, such share or shares by any other
person, whether or not it shall have notice thereof, except as expressly
provided by the laws of the State of Nevada.
ARTICLE VII
General Provisions
Section 1. Dividends. To the extent permitted by law, the Board
shall have full power and discretion, subject to the provisions of the
Certificate of Incorporation of the Corporation and the terms of any other
corporate document or instrument binding upon the Corporation, to determine
what, if any, dividends or distributions shall be declared and paid or made.
Dividends may be paid in cash, in property, or in shares of capital stock,
subject to the provisions of the Certificate of Incorporation. Before payment of
any dividend, there may be set aside out of any funds of the Corporation
available for dividends such sums as the Directors think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other purpose as the
Directors think conducive to the interests of the Corporation. The Directors may
modify or abolish any such reserve in the manner in which it was created.
Section 2. Seal. The corporate seal of the Corporation shall have
inscribed thereon the name of the Corporation, the year of its organization and
the words "Corporate Seal, Nevada."
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
end on December 31.
Section 4. Voting Shares in Other Corporations. Unless otherwise
directed by the Board, shares in other corporations which are held by the
Corporation shall be represented and voted only by the President or by a proxy
or proxies appointed by him or her.
Section 5. Indemnification.
(a) The Corporation shall indemnify any person who was, or is
threatened to be made, a party to a proceeding (as hereinafter defined) by
reason of the fact that he or she (i) is or was a director, officer, employee or
agent of the Corporation, or (ii) while a director, officer, employee or agent
of the Corporation, is or was serving at the request of the Corporation as a
director, officer, employee, agent or similar functionary of another
corporation, partnership, joint venture, trust or other enterprise, to the
fullest extent permitted under the Revised Statutes of the State of Nevada, as
the same exists or may hereafter be amended. Such right shall be a contract
right and as such shall run to the benefit of any director or officer who is
elected and accepts the position of director or officer of the Corporation or
elects to continue to serve as a director or officer of the Corporation while
this Article VII is in effect. The rights conferred above shall not be exclusive
of any other right which any person may have or hereafter acquire under any
statute, bylaw, resolution of stockholders or directors, agreement or otherwise.
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(b) As used herein, the term "proceeding" means any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, any appeal in such an action, suit or
proceeding and any inquiry or investigation that could lead to such an action,
suit or proceeding.
(c) A director or officer of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director or officer, except for liability (i) for acts or
omissions which involve intentional misconduct, fraud or a knowing violation of
law; or (ii) for the payment of distributions in violation of the Revised
Statutes of the State of Nevada. Any repeal or amendment of this Article VII by
the shareholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director or
officer of the Corporation arising from an act or omission occurring prior to
the time of such repeal or amendment. In addition to the circumstances in which
a director or officer of the Corporation is not personally liable as set forth
in the foregoing provisions of this Article VII, a director or officer shall not
be liable to the Corporation or its stockholders to such further extent as
permitted by any law hereafter enacted, including, without limitation, any
subsequent amendment to the Revised Statutes of the State of Nevada.
ARTICLE VIII
Amendments
These Bylaws may be adopted, altered, amended or repealed or new
Bylaws may be adopted by the stockholders, or by the Board of Directors by the
Certificate or Incorporation, at any regular meeting of the stockholders or of
the Board of Directors or at any special meeting of the stockholders or of the
Board of Directors if notice of such alteration, amendment, repeal or adoption
of new Bylaws be contained in the notice of such special meeting. If the power
to adopt, amend or repeal Bylaws is conferred upon the Board of Directors by the
Certificate of Incorporation it shall not divest or limit the power of the
stockholders to adopt, amend or repeal Bylaws.
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