FORM 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of The Securities Exchange Act of 1934
eMajix.com, Inc.
(Exact name of Small Business Issuer in its charter)
Oklahoma 73-1561191
(State of Incorporation) (I.R.S. Employer Identification No.)
7450 South Winston Ave.
Tulsa, Oklahoma 74136
(Address of executive offices, including zip code.)
Registrant's telephone number: (918) 494-0004
Copies to: Conrad C. Lysiak, Esq.
601 West First Avenue
Suite 503
Spokane, Washington 99201
(509) 624-1475
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Securities to be registered pursuant to Section 12(b) of the Act:
Securities to be registered pursuant to Section 12(g) of the Act:
This Registration Statement contains certain forward looking statements. These forward looking statements include statements regarding (i) the Registrant's research and development plans, marketing plans, capital and operations expenditures, and results of operations; (ii) potential financing arrangements; (iii) potential utility and acceptance of the Registrant's existing and proposed products; and (iv) the need for, and availability of, additional financing.
The forward looking statements included herein are based on current expectations and involve a number of risks and uncertainties. These forward looking statements are based on assumptions regarding the Registrant's business which involve judgments with respect to, among other things, future economic and competitive conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Registrant. Although the Registrant believes that the assumptions underlying the forward looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, actual results may differ materially from those set forth in the forward looking statements. In light of the significant uncertainties inherent in the forward looking information contained herein, the inclusion of such information should not be regarded as any representation by the Registrant or any other person that the objectives or plans of the Registrant will be achieved.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
THE BUSINESS
eMajix.com, Inc. (the "Company") is a development stage enterprise formed under the laws of the State of Oklahoma on March 30, 1999 as Southern Wireless, Inc. to engage in the business of developing, manufacturing and marketing software for use in connection with the wireless transmission of computer data. The Company changed its name to eMajix.com, Inc. on April 6, 2000.
The Product
The Company has acquired a license to manufacture and market copyrighted and trademarked software, denoted herein as "ClearVideo." Clearview is desinged for fractal digitization and compression of video images with quality audio synchronization.
The License
On March 17, 2000 the Company acquired an exclusive world-wide license from Iterated Systems, Inc. ("ISI") to:
1. Compile, display, use copy and modify ClearVideo Source Codes.
2. Use the ClearVideo Source Codes, its run-time versions and the derivatives to create and manufacture products and services.
3. Use the products and services created and manufactured for the purpose of distributing and sub-licensing the products and services to end users.
4. Sublicense the rights granted under the licensing agreement.
The consideration of the license is as follows:
1. Initial payment of $100,000 which has been paid to ISI and 297,500 restricted shares of the Company's common stock which have been delivered to ISI.
2. $150,000 which was due by May 15, 2000 which has been paid.
At any time in the future should the Company file a registration statement, with the Securities and Exchange Commission, to register additional shares of its Common Stock and it doesn't include all shares of Common Stock issued to ISI in a successful effort, then and only then will the Company will be required to use its best efforts to file a registration statement with the Securities and Exchange Commission registering the shares issued to ISI. As of the date hereof, the Company has not filed a registration statement to register any additional shares or the shares issued to ISI.
The Technology
ClearVideo utilizes fractal digitization creating the smallest file possible while virtually duplicating the quality of the original. All computers and software work with only zeros and ones, nothing more, nothing less. The size and speed of files are dependent upon how they are written and with what they are written. Fractal digitization takes a formula for video and or audio, finds the comparable areas, determines the length of those areas, and then writes one formula that works throughout the file. Video files are very large, requiring a lot of bandwidth and time to transmit in their original format.
ClearVideo is designed to overcome the limited bandwidth of the Internet, which leads to unrealistic download times and poor quality video when run across the Internet. ClearVideo achieves a very high compression rate, thus producing a much faster download while maintaining the quality of the original video file. It can be seamlessly integrated into existing multimedia frameworks, including Windows 95, Windows 98, Windows NT, MacIntosh QuickTime, Activemovie, Video for Windows, Windows Multimedia Player and RealMedia. It can be plugged into Adobe Premier, Ulead Media Studio Pro, Microsoft's VidEdit, Premiere, Director, Avid, Media 100 and many other video editing and capturing packages. ClearVideo simply becomes a compression option in that editing system. This means that a user can maintain the investment in the technology they currently own.
ClearVideo compresses video at data rates as low as 16 kilobits (2 kilobytes) per second for limited motion video, up to 80 kilobits to 1 megabit per second for action filled video that demands higher data rates for viewing quality. Compression rates are completely scalable so that a user can customize the video quality, frame rate and frame size to their audience's bandwidth and computer system. ClearVideo works with MMX technology and delivers much larger frame sizes at much faster frame rates.
ClearVideo compression allows high quality video "HQV" files to be easily received and viewed in HQV quality by most users on the Internet with a computer running Windows 95, Windows 98, Windows NT or MacIntosh QuickTime. The decoder ("codec") software required for a user to run a ClearVideo file is already a part of Windows 95, Windows 98, Windows NT and MacIntosh QuickTime. The Company will provide the codec on disc or by direct download over the Internet to those that do not have one of the above listed operating systems. No special hardware or software, other than the readily available codec, is required to view ClearVideo files.
ClearVideo should revolutionize how audio and video files are transmitted over both narrow and broadband lines. With its outstanding compression capabilities, depending upon the users parameters, can deliver HQV type and quality audio files to almost any Internet user over ordinary analog connections or digital connections.
By defining and using ClearVideo's parameters, a user can place approximately three hours or more of film, video or audio on one side of a standard CD-ROM disc. Quality comparable to NY|TSC (standard television viewing quality) can be achieved or exceeded, depending upon the users demands and parameter settings. In the case of audio only files, ClearVideo can compress approximately 900 minutes of quality audio on one standard CD-ROM. Full motion video with synching audio can also be transmitted on the Internet and clearly received by viewers with the ClearVideo codec installed on their computer systems.
Additionally, a ClearVideo compressed 120 minute film can be downloaded over the Internet in much less time than the hours it now requires, the greater the bandwidth of the line, the higher quality the connection, and the faster the computer, the shorter the download time. Also, with ClearVideo, compressed HQV and audio files considerable hard drive space is saved on the host file servers.
Another important feature of ClearVideo is that it works equally well with NTSC, PAL, or SECAM (the three different TV formats used around the world) television as well as the Internet. It can be effectively used worldwide for the compression and transmission of video files for the broadcast industry.
Corley License
On December 22, 1999, the Company and its current president, Ryan Corley entered into a four year exclusive licensing agreement whereby Corley, as nominee for a corporation to be formed was granted the right to use certain technology that the Company may acquire in the future relating to the compression of video and streaming real time video via the Internet. Pursuant to the license between the Company and Corley, the corporation to be formed will receive a limited exclusive license for the use of the technology solely for video/audio streaming over the internet of TV type programming, news content and programming, sport content and programming and non-exclusive use for documentary content and programming.
Furthermore, during this four year exclusive licensing period, the Company shall not perform streaming services for any third parties for TV type programming in the areas of entertainment, sports and news without the express written permission of the corporation to be formed. If such permission is granted by either party, all revenues derived therefrom will be split 75% to the Company and 25% to the corporation to be formed for the term of the agreement(s) and any and all renewals of the agreement(s).
Manufacturing
The Company will have limited manufacturing needs for product as its primary product being offered is processing services that require computers with a high degree of processing capability, file servers to be used as Websites, and a means to compress data and place it on CD- ROMS. As of this date the Company has limited experience in the compression of videotapes, CD-ROMS, DVD discs or downloaded files and
there is no assurance that the Company will be able to handle the volume of business that may come its way internally. However, there are numerous companies that are capable of provide outsourcing services should the Company encounter difficulty in meeting its obligations to customers.
Distribution
The Company intends to distribute ClearVideo by direct shipment from its offices or by downloading to users on the Internet.
Marketing
The Company intends to market ClearVideo initially by licensing the technology to third parties, offering compression services to customers and offering downloading and streaming services. At this time the Company plans to market its product through an in-house sales force and by advertising on the Internet.
Licenses will be granted to third parties for limited application which will allow for accurate accounting of usage on a negotiated "per use" royalty basis and may be paid in cash or a combination of a negotiated equity position with a per use cash fee.
Compression services will be offered whereby the Company will receive files in many different forms, such as videotapes, CD-ROM or DVD discs or downloaded files. The Company will then digitize and compress these files and deliver them to the customer, either in the form of downloaded files or CD-ROMS. The Company will charge a set-up fee, a compression fee, and when appropriate, a usage fee for each time the file is used or sent to an end user.
Downloading and streaming services will be offered to various customers whereby the Company will accept video files for digitization and compression that are designed to be downloaded or streamed on request over the Internet. These files will be stored on the Company's file servers and delivered on request by an end user by "mirroring." The end user will not "see" the Company's Website, but will only see the client's Website. This method of delivery frees up the client's server space and provides a low-cost revenue center for the Company, along with control over accounting for usage fees.
Patents
Iterated Systems, Inc., the developer and licensor of ClearVideo software has twenty four U.S. Patents and various international patents covering the methods, apparatus and processes used in compressing digital data, fractal encoding of data streams, fractal transformation of data, fractal compression of data, protecting the technology. The Company believes that these patents afford protection under existing patent laws against infringement for a period of time ranging from seven years to seventeen years. There is no assurance, however, that third parties will not infringe on the ClearVideo patents.
Competition
There are numerous companies offering video compression, downloading and streaming services, most of which have more financial and technical resources than the Company and there can be no assurance that in the future, the Company will be able to compete successfully with other video compression, downloading and streaming service companies. The Company is a small participant within the compression, downloading and streaming service arena. The Company will compete with other video compression, downloading and streaming service companies, all of whom have more resources than the Company.
Governmental Regulation
The Company is not aware of any governmental regulations which effect the manufacture, development or sale of ClearVideo other than those imposed applicable to technical data included in Export/Import Regulations imposed by the United States government and those controlling regulations and regulations of countries into which any products may be imported.
Company's Office
The Company's offices are located at 7450 South Winston Avenue, Tulsa, Oklahoma 74136 and its telephone number is (918) 494-0004.
Employees
The Company has one full time employee and two part time employees.
Risk Factors
1. No Operating History and Revenues and Development Stage Operation. The Company is recently formed and is subject to all the risks inherent in the creation of a new business. Since the Company is a new venture, it has no record of operations and there is nothing at this time upon which to base an assumption that the Company's plans will ultimately prove successful. The Company's Independent Certified Public Accountant's report on the Company's March 31, 2000 financial statements contained an explanatory paragraph which expressed substantial doubt about the Company's ability to continue as a going concern due to the Company's loss from operations and lack of revenue.
2. Lack of Market Research. The Company has conducted limited research and has not engaged other entities on its behalf to conduct market research to provide management with assurance that market demand exists for the business contemplated by the Company. See "Business."
3. Securities are Subject to Penny Stock Rules. The Company's shares are "penny stocks" consequently they are subject to Securities and Exchange commission regulations which impose sales practice requirements upon brokers and dealers to make risk disclosures to customers before effecting any transactions therein.
4. Lack of Key Personnel Insurance. The Company has not obtained key personnel life insurance on the lives of any of the officers or directors of the Company. The death or unavailability of one or all of the officers or directors of the Company could have a material adverse impact on the operation of the Company. See "Management."
5. No Insurance Coverage. The Company, like other companies in its industry, is finding it difficult to obtain adequate insurance coverage against possible liabilities that may be incurred in conducting its business activities. At present, the Company has not secured any liability insurance. The Company has potential liability from its general business activities, and accordingly, it could be rendered insolvent by a serious error or omission.
6. Uninsured Risks. The Company may not be insured against all losses or liabilities which may arise from operations, either because such insurance is unavailable or because the Company has elected not to purchase such insurance due to high premium costs or other reasons.
7. Need for Subsequent Funding. The Company believes it will need to raise additional funds in order to achieve profitable operations. The Company's continued operations therefore will depend upon the availability of cash flow, if any, from its operations or its ability to raise additional funds through bank borrowings or equity or debt financing. There is no assurance that the Company will be able to obtain additional funding when needed, or that such funding, if available, can be obtained on terms acceptable to the Company. If the Company cannot obtain needed funds, it may be forced to curtail or cease its activities. See "Business."
8. Need for Additional Key Personnel. At the present time, the Company employs one full time employee and two part time employees. Additionally, the Company employees three software engineers on a consulting basis. The success of the Company's proposed business will depend, in part, upon the ability to attract and retain qualified employees. The Company believes that it will be able to attract competent employees, but no assurance can be given that the Company will be successful in this regard. If the Company were unable to engage and retain the necessary personnel, its business would be materially and adversely affected. See "Business."
9. Reliance upon Directors and Officers. The Company is wholly dependent, at the present, upon the personal efforts and abilities of its Officers and employees who will exercise control over the day-to- day affairs of the Company, and upon its Directors, most of whom are engaged in other activities, and will devote limited time to the Company's activities. Accordingly, while the Company may solicit business through its Officers, there can be no assurance as to the volume of business, if any, which the Company may succeed in obtaining, nor that its proposed operations will prove to be profitable. As of the date hereof, the Company does not have any commitments regarding its proposed operations and there can be no assurance that any commitments will be forthcoming. See "Business" and "Management."
10. Issuance of Additional Shares. As of May 16, 2000, approximately 178,626,500 shares of Common Stock or 89.31% of the 200,000,000 authorized shares of Common Stock of the Company remain unissued. The Board of Directors has the power to issue such shares, without shareholder approval. The Company may also issue additional shares of Common Stock pursuant to a plan and agreement of merger with a private corporation. Although the Company presently has no commitments, contracts or intentions to issue any additional shares to other persons, the Company may in the future attempt to issue shares to raise capital, acquire products, equipment or properties, or for other corporate purposes. See "Description of Securities - Shares Eligible for Future Sale."
11. Non-Arms' Length Transaction. The number of shares of Common stock issued to present shareholders of the Company was arbitrarily priced and may not be considered the product of arm's length transactions. See "Principal Shareholders."
12. Indemnification of Officers and Directors for Securities Liabilities. The Articles of Incorporation of the Company provide that the Company may indemnify any Director, Officer, agent and/or employee as to those liabilities and on those terms and conditions as are specified in the Oklahoma Business Corporation Act. Further, the Company may purchase and maintain insurance on behalf of any such persons whether or not the corporation would have the power to indemnify such person against the liability insured against. The foregoing could result in substantial expenditures by the Company and prevent any recovery from such Officers, Directors, agents and employees for losses incurred by the Company as a result of their actions. Further, the Company has been advised that in the opinion of the Securities and Exchange Commission, indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable.
13. Competition. The Company believes that it will have competitors and potential competitors, many of which may have considerably greater financial and other resources than the Company. See "Business - Competition."
14. No Public Market for Securities. At present, no public market exists for the Company's securities and there is no assurance that a trading market will develop in the future, or if developed, that it will be sustained. A shareholder of the Company's securities may, therefore, be unable to resell the securities should he/she desire to do so. Furthermore, it is unlikely that a lending institution will accept the Company's securities as pledged collateral for loans unless a regular trading market develops.
15. Cumulative Voting, Preemptive Rights and Control. There are no preemptive rights in connection with the Company's Common Stock. Cumulative voting in the election of Directors is not provided for. Accordingly, the holders of a majority of the shares of Common Stock, present in person or by proxy, will be able to elect all of the Company's Board of Directors.
16. No Dividends Anticipated. At the present time the Company does not anticipate paying dividends, cash or otherwise, on its Common Stock in the foreseeable future. Future dividends will depend on earnings, if any, of the Company, its financial requirements and other factors. Investors who anticipate the need of an immediate income from their investment in the Company's Common Stock should refrain from the purchasing the Company's securities. See "Dividend Policy."
17. Anti-Dilution Provisions. There is an anti-dilution provision contained in the agreement with Iterated Systems, Inc. that provides for the issuance of additional shares of Common Stock under certain conditions. Although the Company has no obligation to issue additional shares at this time, the Company may be required to issue additional shares at a future date. See "Rights of Shareholders."
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
During the next twelve months, the Company plans to enter into contracts to license its technology and complete agreements for compression services with various customers whereby the Company will commence providing services and generating revenue.
The Company has inadequate cash to maintain operations during the next twelve months. In order to meet its cash requirements the Company will have to raise additional capital through the sale of securities or borrowings from the Company's shareholders. There is no assurance that it will be able to raise additional capital through the sale of securities in the future. Additionally, the Company has a demand note payable to Ryan Corley, the Company's President in the amount of $100,000. In the event that the Company is unable to raise additional capital, it may have to suspend or cease operations.
The Company does intend to conduct additional product research or development primarily to provide enhancements to increase operating efficiency or to enhance its capabilities. The Company believes that ClearVideo is ready for manufacturing and marketing in its current status. As a result, the Company is in the process of seeking licensees for its product and customers to provide compression services, downloading and streaming services.
The Company does not intend to purchase a plant, it does however intend to purchase additional computer equipment and lease additional office space as the need arises.
The Company will hire employees on an as needed basis. The Company, however, does not expect any significant changes in the number of employees.
Results of Operations - Period from Inception (March 30, 1999) through March 31, 2000.
The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards No. 7. There have been no revenues since incorporation. For the year ended March 31, 2000, the Company incurred a net loss of $10,144, or $(0.002) per share, which is primarily the result of payment of consulting fees, travel and office expense.
Liquidity and Capital Resources.
Through May 16, 2000, the Company has issued 21,373,500 shares of its Common Stock to officers, directors and others. The Company has no operating history and no material assets other than the license agreement for ClearVideo. The Company has $27,060 in cash as of March 31, 2000.
At March 31, 2000, the Company had net deferred tax assets of approximately $3,500 and has established a valuation allowance equal to the net deferred tax assets as management of the Company cannot determine that it is more likely then not that the Company will realize the benefit of the net deferred tax asset.
The Company has received funds of $202,000 from the sale of capital stock to officers, directors and others and $100,000 from Ryan Corley upon the execution of a demand note executed on March 30, 2000. Because the Company is in its initial stages of development and has not commenced operations or generated revenues, the Company intends to finance its operations by the entering into licensing agreements with potential customers and by the sale of additional shares of its common stock. Other than the foregoing, there are no additional sources for cash for operating, investing and financing activities.
The Company has been in the development stage since its inception. The Company has had no recurring source of revenue and has incurred operating losses since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. As a result of these factors, the Company's independent certified public accountants have included an explanatory paragraph in their report on the Company's March 31, 2000 financial statements which expressed substantial doubt about the Company's ability to continue as a going concern.
At the present time, the Company has no material commitments for capital expenditures. If capital expenditures are required after operations commence, the Company will pay for the same through the sale of common stock; or through loans from third parties. There is no assurance, however, that such financing will be available and in the event such financing is not available, the Company may have to cease operations.
Management of the Company has undertaken certain actions to address these conditions. Management currently plans to enter into agreements for the licensing of ClearVideo and for the compression services and downloading and streaming services to third parties within the next 90 to 180 days. To this end, management is currently in negotiations with several potential customers for its ClearVideo and its services. Funds required to carry out management's plans are expected to be derived from future stock sales or borrowings from the Company's shareholders. There can be no assurances that the Company will be successful in executing its plans.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Financial Accounting Standards Board issued SFAS No. 130, "Reporting Comprehensive Income," which establishes standards for reporting and displaying comprehensive income and its components in a full set of general purpose financial statements. This statement was effective for the Company during the current year. Comprehensive income generally represents all changes in stockholders' equity except those resulting from contributions by stockholders. There was no impact to the Company as a result of the adoption of SFAS No. 130, as there were no differences between net loss and comprehensive loss available to common stockholders for the year ended March 31, 2000.
In December 1999, the Staff of the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition in financial Statements" ("SAB 101"). This SAB summarizes certain of the Staff's views in applying generally accepted accounting principles in the United States, to revenue recognition in financial statements. The Company's revenue recognition policy is in compliance with SAB 101.
In June 1998, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs of Start-up Activities." SOP 98-5 requires all start-up and organizational costs to be expensed as incurred. It also requires all remaining historically capitalized amounts of these costs existing at the date of adoption to be expensed and reported as the cumulative effect of a change in accounting principle. SOP 98-5 is effective for all fiscal years beginning after December 31, 1998. The Company believes that the adoption of SOP 98-5 on April 1, 1999 had no significant effect on its financial statements.
In February 1999 the Financial Accounting Standards Board issued SFAS No. 135, "Rescission of FASB Statement No. 75 and Technical Corrections." SFAS No. 135 rescinds SFAS No. 75 and amends SFAS No 35. SFAS No. 135 also amends other existing authoritative literature to make various technical corrections, clarify meanings, or describe applicability under changed conditions. SFAS No. 135 is effective for financial statements issued for fiscal years ending after February 15, 1999. The Company believes that the adoption of SFAS No. 135 had no significant effect on its financial statements.
ITEM 3. DESCRIPTION OF PROPERTIES.
The Company does not own any real property. The Company owns personal property in the form of licenses and office equipment. The Company currently uses office space provided by Ryan Corley, the Company's President and major shareholder on a rent free basis. There is no formal lease agreement for the Company's offices.
The Company's offices are currently adequate and suitable for its operations. The Company will relocate its offices upon generating revenues from operations. However, currently the Company has not entered into any negotiations with anyone to relocate its offices.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth the Common Stock ownership as of May 17, 2000, of each person known by the Company to be the beneficial owner of five percent or more of the Company's Common Stock, each director individually and all officers and directors of the Company as a group. Each person has sole voting and investment power with respect to the shares of Common Stock shown, unless otherwise noted, and all ownership is of record and beneficial.
Percentage
Name and Number of Of Shares
address of owner Shares Position Owned
Ryan Corley 12,402,000 President, Treasurer, 58.03%
P.O. Box 140021 Chief Financial Officer
Austin, TX 78714 and a member of the
Board of Directors
Leon P. Davis [1] 1,280,000 Secretary 5.99%
1516 East 21st Street
Tulsa, Ok 74114-1339
W. H. Walker, Jr. 50,000 Member of the Board 0.23%
3420 East 61st Place of Directors
Tulsa, OK 74136
All officers and 13,732,000 64.25%
directors as a
group (3 persons)
Guy Reidel 3,000,000 14.04%
46 Tenney Ave.
River Edge, NJ 07661
Leonard D. Hilt 1,815,000 8.49%
P.O. Box 140661
Austin, TX 78714
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[1] 440,000 shares are held in the name of The John Allen Corley Irrevocable Trust dated March 17, 1995 and 440,000 shares are held in the name of The Maryssa Elonca Corley Irrevocable Trust dated June 17, 1996, for which Mr. Davis is Trustee.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The officers and directors of the Company are as follows:
Name Age Position
Ryan Corley 57 President, Treasurer and a member of the
Board of Directors
Leon P. Davis 58 Secretary
W. H. Walker Jr. 48 Member of the Board of Directors
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All directors hold office until the next annual meeting of shareholders and until their successors have been elected and qualified. The Company's officers are elected by the Board of Directors after each annual meeting of the Company's shareholders and hold office until their death, or until they resign or have been removed from office.
Ryan Corley - President, Treasurer and a member of the Board of Directors.
Mr. Corley has served as president and a member of the Board of Directors of the Company since February 5, 2000. Mr. Corley was the founder of Tsunami Media Corporation (formerly Gatsby's Coffee Company) and served as Chairman of the Board of Directors, Chief Executive Officer and Secretary/Treasurer since its inception September 10, 1998, until his resignation on February 22, 2000. Mr. Corley served as a consultant to several startup companies and small public companies during the period of July 1955 through November 1998. Mr. Corley was Chairman of the Board of Directors and President of Charge, Inc., and Charge Entertainment Corporation, its wholly owned subsidiary, from October 1986 through October 1995. Mr. Corley also was a founder in 1986, a member of the Board of Directors until his resignation on October 30, 1995, having served as Chairman of the Board of Directors from 1987 until January 23, 1995, President and Chief Executive Officer unit his resignation from these positions on May 30, 1995, of U.S. Technologies Inc., a NASDAQ listed public corporation. In October 1990, Mr. Corley helped found and was the President and principal Stockholder of the Texas Outlaws Bicycling Team, Inc. of the National Cycle League until August 1996. Mr. Corley received a Bachelor of Science in Business Administration and a Masters in Business Administration from the University of Tulsa.
Leon P. Davis - Secretary
Mr. Davis is the Secretary of the Corporation, having been appointed to serve beginning April 1, 2000. Mr. Davis is an attorney, admitted to the Oklahoma Bar in 1989, in private practice with his own law firm since April 1993. Mr. Davis currently serves as a Director for several private companies, Food and Beverage, Inc., Food & Beverage II, Inc., Food & Beverage IV, Inc. and McGill's 61st, Inc. In November 1992 Mr. Davis founded and was the President and principle stockholder of Team Tulsa, Inc., a bicycle racing team in the National Cycle League, serving until November 1995. Mr. Davis received a Bachelor of Arts in Economics and History from Northeastern State University and a Juris Doctorate from the University of Tulsa.
W. H. Walker Jr - Member of the Board of Directors
Mr. Walker is the founder of the Company. He has been a Director of the Company since its founding and served as its President until February 5, 2000. For the past five years Mr. Walker has been the Secretary, a Director, and fifty percent stockholder of Food and Beverage, Inc., Food & Beverage II, Inc., Food & Beverage IV, Inc., and McGill's 61st, Inc. These companies are in the restaurant business. Mr. Walker serves each of these companies in the capacity of Chief Financial Officer and Co-Manager of Operations. Mr. Walker is a active investor in commercial real estate and other business ventures.
ITEM 6. EXECUTIVE COMPENSATION.
Summary Compensation.
There was no compensation paid by the Company to any of its officers since inception.
There are no stock option, retirement, pension, or profit sharing plans for the benefit of the Company's officers and directors.
Option/SAR Grants.
No individual grants of stock options, whether or not in tandem with stock appreciation rights ("SARs"), and freestanding SARs have been made to any executive officer or any director since the inception of the Company, accordingly, no stock options have been exercised by any of the officers or directors in fiscal 2000.
Long-Term Incentive Plan Awards.
The Company does not have any long-term incentive plans that provide compensation intended to serve as incentive for performance to occur over a period longer than one fiscal year, whether such performance is measured by reference to financial performance of the Company or an affiliate, the Company's stock price, or any other measure.
Compensation of Directors.
The directors did not receive any compensation for serving as members of the Board of Directors. The Board has not implemented a plan to award options. There are no contractual arrangements with any member of the Board of Directors.
The Company did not to pay any salaries to its officers for the fiscal year-ended March 31, 2000. The Company does not expect to pay salaries to any of its officers until such time as the Company generates sufficient cash to do so. The Company does not intend to pay any compensation to its directors.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On December 21, 1999, the Company entered into an agreement with Ryan Corley as nominee for a corporation to be formed "Corporation" for the purpose of developing and distributing multiple branded networks of digital content and programming for distribution over the Internet. Said sub-license provides that the Company is to receive a 15% equity ownership in the Corporation to be formed and also contains an anti- dilution clause for a period of five years for the equity ownership. Additionally, the agreement provides for a limited exclusive license for the use of the technology solely for video and audio streaming over the Internet of TV type programming and content on multiple branded broadcast networks, specifically entertainment content and programming, news content and programming and sports content and programming. The sub-license provides for non exclusive use for amateur sports programming at the high school level or lower, non-exclusive use for video and audio compression and downloading in developing and operating broadcast networks, streaming commercial advertising over the Internet on any wholly owned and operated networks of Corporation. The sub- license also provides that should the Company sub-license the same rights, as those limited exclusive rights given to Corporation, to another party, then the Company will pay Corporation 25% of the revenues received from those activities.
On March 30, 2000, the Company entered into a funding arrangement whereby Ryan Corley, president and member of the Board of Directors, loaned the Company $100,000 payable on demand bearing interest at the rate of 10% per annum and is unsecured.
On April 6, 1999, the Company issued 2,422,000 shares of Common Stock to the following pursuant to Reg. 504 of the Securities Act of 1933 (the "Act"):
Total Shares
Name Consideration Acquired
Ryan Corley $ 588 1,177,000
President and Director
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Leon P. Davis 50 100,000
Secretary
W. H. Walker, Jr. 25 50,000
Director
Leonard D. Hilt 548 1,095,000
Beneficial Owner
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TOTAL $ 1,211 2,422,000
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On January 28, 2000, and February 4, 2000 the Company issued 15,625,000 shares of Rule 144 restricted Common Stock to the following:
Total Shares
Name Consideration Acquired
Ryan Corley $ 5,603 11,225,000
President and Director
Leon P. Davis 475 1,180,000
Secretary and Director
Leonard D. Hilt 100 220,000
Beneficial Owner
Guy Riedel
Beneficial Owner 1,500 3,000,000
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TOTAL $ 7,678 15,625,000
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On March 15, 2000, the Company issued 500,000 shares of its restricted Rule 144 Common Stock to Leonard D. Hilt, a beneficial owner, for $250.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company currently consists of 200,000,000 shares of Common Stock, $0.00005 par value per share. As of May 16, 2000, 21,373,500 share of common stock were issued and outstanding. Of the 21,373,500 shares outstanding, 20,795,500 are restricted securities and only may be resold in compliance with Rule 144 of the Securities Act of 1933 (the "ACT"). The balance of the shares (578,000) are freely tradeable.
In general, under Rule 144, a person who has held his shares for a period of one (1) year, may sell in ordinary market transactions through a broker or with a market maker, within any three (3) month period a number of shares which does not exceed the greater of one percent (1%) of the number of outstanding shares of Common Stock or the average of the weekly trading volume of the Common Stock during the
four calendar weeks prior to such sale. Sales under Rule 144 require the filing of Form 144 with the Securities and Exchange Commission. If the shares of Common Stock have been held for more than two (2) years by a person who is not an affiliate, there is no limitation on the manner of sale or the volume of shares that may be sold and no Form 144 is required. Sales under Rule 144 may have a depressive effect on the market price of the Company's Common Stock.
Dividends
Holders of the Common Stock are entitled to share equally in dividends when, as and if declared by the Board of Directors of the Company, out of funds legally available therefore. No dividend has been paid on the Common Stock since inception, and none is contemplated in the foreseeable future.
Transfer Agent
The Company's transfer agent is Pacific Stock Transfer Company, 5844 South Pecos Road, Suite D, Las Vegas, Nevada 89120 and its telephone number is (702) 361-3033.
Rights of Shareholders
All shares have equal voting rights and are not assessable. Voting rights are not cumulative and, therefore, the holders of more than 50% of the Common Stock could, if they chose to do so, elect all of the directors of the Company.
Shareholders of the Company have no preemptive rights to acquire additional shares of Common Stock or other securities. The Common Stock is not subject to redemption and carries no subscription or conversion rights. In the event of liquidation of the Company, the shares of Common Stock are entitled to share equally in corporate assets after satisfaction of all liabilities. The shares of Common Stock, when issued, will be fully paid and non-assessable.
There are no outstanding options, warrants or rights to purchase shares of the Company's Common Stock, other than as disclosed herein.
The agreement with Iterated Systems, Inc., contains an anti-
dilution clause whereby the percentage of ownership of the Company's
Common Stock by Iterated shall be no less than 1.25% of the total
outstanding shares of the Company's Common Stock at any given time.
This provision shall terminate after the last day of the first sixty
(60) day period during which : (i) the Common Stock of the Company is
traded on NASDAQ, or the American or the New York Stock Exchange and
(ii) the Market Capitalization of the Company dose not fall below fifty
million dollars and (iii) the 297,500 shares of Common Stock that
Iterated received under the agreement become free trading 144 stock or
are covered by a registration statement in compliance with the Act and
(iv) the share price of the Company's shares traded on NASDAQ, the
American Stock Exchange or the New York Stock exchange does not fall
below $2.10. This provision also terminates if Iterated sells or
disposes of the shares that it received under this agreement.
Part II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANTS COMMON EQUITY AND OTHER SHAREHOLDER MATTERS.
No market exists for the Company's securities and there is no assurance that a regular trading market will develop, or if developed, that it will be sustained. A shareholder in all likelihood, therefore, will be unable to resell the securities referred to herein should he or she desire to do so. Furthermore, it is unlikely that a lending institution will accept the Company's securities as pledged collateral for loans unless a regular trading market develops.
There are no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market in any of the Company's securities. The Company plans to file or have filed the required forms with the National Association of Securities Dealers, Inc. (the "NASD") requesting that the Company's common stock be listed on the Bulletin Board operated by the NASD when this registration statement is declared effective by the Securities and Exchange Commission (the "Commission") and the Company has satisfied all comments made by the Commission.
There are no outstanding options or warrants, or other securities convertible into, common equity of the Company. Of the 21,373,500 shares of common stock outstanding as of May 17, 2000, 16,732,000 shares were issued to the Company's officers, directors, and beneficial owners, of more than 10% of the Company's shares, and may only be resold in compliance with Rule 144 of the Securities Act of 1933.
There are no shares of common stock currently being proposed to be publicly offered (pursuant to an employee benefit plan or dividend reinvestment plan) the offering of which could have a material adverse effect upon the market price of the Company's common stock.
As of May 17, 2000, the Company has 88 holders of record of its Common Stock.
The Company has not paid any dividends since it is inception and does not anticipate paying any dividends on its Common Stock in the foreseeable future.
SEC Rule 15g
The Company's shares are covered by Section 15g of the Securities Act of 1933, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser's
written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell the Company's securities and also may affect the ability of purchasers to sell their shares in the secondary market.
Section 15g also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one- page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as "bid" and "offer" quotes, a dealers "spread" and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, the NASD's toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.
ITEM 2. LEGAL PROCEEDINGS.
No material legal proceedings to which the Company is a party are pending nor are any known to be contemplated and the Company knows of no legal proceedings pending or threatened, or judgments entered against, any Director or Officer of the Company in his capacity as such.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
There have been no disagreements on accounting and financial disclosures from the inception of the Company through the date of this Registration Statement.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
On April 6, 1999, the Company issued 3,000,000 shares of Common Stock to its officers, directors and 77 other persons in consideration of $1,500. No commissions were paid to any persons in connection with such sales, no advertising of any nature was made in connection with the sale of said shares and all Company information was made available to said purchasers. The foregoing shares were issued pursuant to Reg. 504 of the Securities Act of 1933, as amended (the "Act").
On January 28, 2000, the Company sold 1,000,000 restricted shares of its Common Stock to seven persons in consideration of $250. No commissions were paid to any persons in connection with such sales, no advertising of any nature was made in connection with the sale of said shares. The shares were sold pursuant to Section 4(2) of the Act.
On February 4, 2000, the Company sold 15,190,000 restricted shares of its Common Stock to 10 persons in consideration of $6,836. No commissions were paid to any person in connection with such sales, no advertising of any nature was made in connection with the sale of said shares. The shares were sold pursuant to Section 4(2) of the Act.
On March 3, 2000, the Company sold 800,000 restricted shares of Common Stock to one person in consideration of $400. No commissions were paid to any person in connection with such sales, no advertising of any nature was made in connection with the sale of said shares. The shares were sold pursuant to Section 4(2) of the Act.
On March 15, 2000, the Company sold 510,000 restricted shares of Common Stock to two people in consideration of $255. No commissions were paid to any person in connection with such sales, no advertising of any nature was made in connection with the sale of said shares. The shares were sold pursuant to Section 4(2) of the Act.
On March 30, 2000, the Company issued 297,500 restricted shares of Common Stock to Iterated Systems, Inc., in exchange for an exclusive license agreement for the ClearVideo software. The shares were issued pursuant to Section 4(2) of the Act.
On March 31, 2000, the Company issued 75,000 restricted shares of Common Stock to an accredited individual for $25,000. No commissions were paid to any person in connection with such sales, no advertising of any nature was made in connection with the sale of said shares. The shares were sold pursuant to Section 4(6) of the Act.
On May 11, 2000, the Company issued 501,000 restricted shares of Common Stock to an accredited individual for $167,000. No commissions were paid to any person in connection with such sales, no advertising of any nature was made in connection with the sale of said shares. The shares were sold pursuant to Section 4(6) of the Act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Oklahoma Statutes and certain provisions of the Company's Bylaws under certain circumstances provide for indemnification of the Company's Officers, Directors and controlling persons against liabilities which they may incur in such capacities. A summary of the circumstances in which such indemnification is provided for is contained herein, but this description is qualified in its entirety by reference to the Company's Bylaws and to the statutory provisions.
In general, any Officer, Director, employee or agent may be indemnified against expenses, fines, settlements or judgments arising in connection with a legal proceeding to which such person is a party, if that person's actions were in good faith, were believed to be in the Company's best interest, and were not unlawful. Unless such person is successful upon the merits in such an action, indemnification may be
awarded only after a determination by independent decision of the Board of Directors, by legal counsel, or by a vote of the shareholders, that the applicable standard of conduct was met by the person to be indemnified.
The circumstances under which indemnification is granted in connection with an action brought on behalf of the Company is generally the same as those set forth above; however, with respect to such actions, indemnification is granted only with respect to expenses actually incurred in connection with the defense or settlement of the action. In such actions, the person to be indemnified must have acted in good faith and in a manner believed to have been in the Company's best interest, and have not been adjudged liable for negligence or misconduct.
Indemnification may also be granted pursuant to the terms of agreements which may be entered into in the future or pursuant to a vote of shareholders or Directors. The statutory provision cited above also grants the power to the Company to purchase and maintain insurance which protects its Officers and Directors against any liabilities incurred in connection with their service in such a position, and such a policy may be obtained by the Company.
PART F/S
INDEX TO FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants . . F-1 Balance Sheet . . . . . . . . . . F-2 Statement of Loss . . . . . . . . . F-3 Statement of Changes in Stockholders' Equity . . . . F-4 Statement of Cash Flows . . . . . . . . F-5 Summary of Accounting Policies . . . . . F-6 Notes to Financial Statements . . . . . . F-7 |
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
eMajix.com, Inc.
We have audited the accompanying balance sheet of eMajix.com, Inc. (a development stage company), as of March 31, 2000, and the related statements of loss, changes in stockholders' equity and cash flows for the year ended March 31, 2000. We have also audited the statements of loss, changes in stockholders' equity and cash flows from inception (March 30, 1999) through March 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of eMajix.com, Inc. as of March 31, 2000, and the results of its operations and its cash flows for the year ended March 31, 2000, and the period from inception (March 30, 1999) through March 31, 2000, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has no recurring source of revenue and has incurred losses since inception. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Brown, Graham and Company P.C.
Georgetown, Texas
April 8, 2000, except for Note 6
which is as of May 17, 2000
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eMajix.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
ASSETS
March 31, 2000
Current assets:
Cash $ 27,060
---------
Total current assets 27,060
---------
Equipment 2,416
Other assets:
Licenses (Note 2) 252,975
---------
Total assets $ 282,451
=========
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,620
Notes payable - current (Note 4) 250,000
---------
Total current liabilities 254,620
---------
Commitments and contingencies
(Notes 1, 4 and 5)
Stockholders' equity:
Common stock, $.00005 par value;
200,000,000 shares authorized;
20,872,500 issued and outstanding 1,044
Additional paid-in capital 36,931
Deficit accumulated during the
development stage (10,144)
---------
Total stockholders' equity 27,831
---------
Total liabilities and
stockholders' equity $ 282,451
=========
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The accompanying notes are an integral part of these financial statements.
eMajix.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF LOSS
Date from
Inception
Year (10/30/99)
Ended Through
March 31, March 31,
2000 2000
Revenues $ - $ -
--------- ---------
Operating expenses:
Professional services 5,200 5,200
Filing fees 459 459
Office expense 2,145 2,145
Postage & delivery expense 283 283
Telephone expense 452 452
Travel expense 1,605 1,605
--------- ---------
Total operating expenses 10,144 10,144
--------- ---------
Net Loss $ (10,144) $ (10,144)
=========
Net loss per share
basic and diluted $ (0.002)
=========
Weighted average number
of shares basic and diluted 5,603,753
=========
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The accompanying notes are an integral part of these financial statements.
eMajix.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
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Shares Amount Capital Stage Total
Common stock issued for
Cash at $0.001 per
share 19,000,000 $ 960 $ 8,385 - $ 9,345
Common stock issued for
Cash at $0.0005 per share 1,500,000 65 590 - 655 Cash at $0.333 per share 75,000 4 24,996 - 25,000 |
Common stock issued for
License agreement at
$0.01 per share 297,500 15 2,960 - 2,975
Net loss - - - (10,144) (10,144)
---------- ------- -------- --------- ---------
Balance
March 31, 2000 20,872,500 $ 1,044 $ 36,931 $ (10,144) $ 27,831
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The accompanying notes are an integral part of these financial statements.
eMajix.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
Date from
Inception
Year March 30, 1999
Ended Through
March 31, March 31,
2000 2000
Cash flows from operating activities:
Net loss $ (10,144) $ (10,144)
Changes in assets and liabilities:
Accounts payable 4,620 4,620
---------- ---------
Net cash used in operating activities (5,524) (5,524)
---------- ---------
Cash flows from investing activities:
Cash paid to purchase equipment (2,416) (2,416)
---------- ---------
Net cash used in investing activities (2,416) (2,416)
---------- ---------
Cash flows from financing activities:
Note payable - related party 100,000 100,000
Net proceeds from sale of common stock 35,000 35,000
Cash paid on note payable (100,000) (100,000)
---------- ---------
Net cash provided by financing
activities 35,000 35,000
---------- ---------
Net increase (decrease) in cash 27,060 27,060
Cash, beginning of period - -
---------- ---------
Cash, end of period $ 27,060 $ 27,060
========== =========
Supplemental disclosures of
cash flow information:
Cash paid during the period for:
Interest $ - $ -
========== =========
Income taxes $ - $ -
========== =========
Noncash financing activities:
Issuance of common stock in
exchange for ClearVideo $ 2,975 $ 2,975
Issuance of note payable in
exchange for ClearVideo license 250,000 250,000
---------- ---------
$ 252,975 $ 252,975
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The accompanying notes are an integral part of these financial
statements.
EMajix.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
SUMMARY OF ACCOUNTING POLICIES
Nature of Business
eMajix.com, Inc. ("the Company") is a development stage enterprise which holds an exclusive license to 1) compile, display, use, copy and modify ClearVideosource code and create enhancements to the source code, 2) use the ClearVideo source code, its run-time versions and any derivatives created by the Company, 3) the right to manufacture for the purpose of distributing and sub-licensing products and services created by any derivatives to end users in run time versions, 4) the right to sublicense the rights granted by the licensor to the Company, 5) and the right to enter into a research and development agreement with another entity for developing new products provided that the Company will own at least (50%) or more of the voting securities of such entity. The Company intends to offer video compression services primarily for downloading and streaming HQV and quality audio for use on the Internet and various advertising applications for radio, television, and cable broadcasting companies. The Company was incorporated pursuant to the laws of the state of Oklahoma on March 30, 1999 as Southern Wireless, Inc. The Company changed its name to eMajix.com, Inc. on April 5, 2000.
Cash Equivalents
For financial reporting purposes, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent. Financial instruments, which potentially subject the Company to a concentration of credit risk, consist of cash and cash equivalents. Cash and cash equivalents consist of funds deposited with various high credit quality financial institutions.
Equipment
Equipment is recorded at cost. Depreciation and amortization are provided using the straight-line method over the useful lives of the respective assets. Major additions and betterments are capitalized. Upon retirement or disposal, the cost and related accumulated depreciation or amortization are removed from the accounts and any gain or loss is reflected in operations.
Licenses
The costs associated with acquiring exclusive licensing rights to patented technology have been capitalized and are being charged to expense using the straight line method of amortization over ten years, the estimated remaining useful lives of the patents.
eMajix.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
SUMMARY OF ACCOUNTING POLICIES
In accordance with the provisions of Statement of Financial Accounting Standards("SFAS") No. 121, "Accounting for the Impairment of Long- lived Assets and for Long-lived Assets to be Disposed of", management of the Company reviews the carrying value of its intangible assets on a regular basis. Estimated undiscounted future cash flows from the intangible assets are compared with the current carrying value. Reductions to the carrying value are recorded to the extent the net book value of the property exceeds the estimate of future discounted cash flows.
Income Taxes
Income taxes are provided based on the liability method of accounting pursuant to SFAS No. 109, "Accounting for Income Taxes." Under this approach, deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end. A valuation allowance is recorded against deferred tax assets as management does not believe the Company has met the "more likely than not" standard imposed by SFAS No. 109 to allow recognition of such an asset.
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Fair Value of Financial Instruments
The carrying amounts reported in the balance sheet as of March 31, 2000 for cash equivalents and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments.
Research and Development Costs
Research and development costs are charged to expense as incurred.
eMajix.com, Inc.(A DEVELOPMENT STAGE COMPANY)
SUMMARY OF ACCOUNTING POLICIES
Net Loss Per Share
SFAS No. 128 requires dual presentation of basic EPS and diluted EPS on the face of all income statements for all entities with complex capital structures. Basic EPS is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities. The Company had no dilutive potential common stock at March 31, 2000 and therefore, basic and diluted EPS are the same for both periods.
New Accounting Pronouncements
Financial Accounting Standards Board issued SFAS No. 130, "Reporting Comprehensive Income," which establishes standards for reporting and displaying comprehensive income and its components in a full set of general purpose financial statements. This statement was effective for the Company during the current year. Comprehensive income generally represents all changes in stockholders' equity except those resulting from contributions by stockholders. There was no impact to the Company as a result of the adoption of SFAS No. 130, as there were no differences between net loss and comprehensive loss available to common stockholders for the year ended March 31, 2000.
In December 1999, the Staff of the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). This SAB summarizes certain of the Staff's views in applying generally accepted accounting principles in the United States, to revenue recognition in financial statements. The Company's revenue recognition policy is in compliance with SAB 101.
In June 1998, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs of Start-up Activities." SOP 98-5 requires all start-up and organizational costs to be expensed as incurred. It also requires all remaining historically capitalized amounts of these costs existing at the date of adoption to be expensed and reported as the cumulative effect of a change in accounting principle. SOP 98-5 is effective for all fiscal years beginning after December 31, 1998. The Company believes that the adoption of SOP 98-5 on April 1, 1999, had no significant effect on its financial statements.
eMajix.com, Inc.(A DEVELOPMENT STAGE COMPANY)
SUMMARY OF ACCOUNTING POLICIES
In February 1999, the Financial Accounting Standards Board issued SFAS No. 135, "Rescission of FASB Statement No. 75 and Technical Corrections." SFAS No. 135 rescinds SFAS No. 75 and amends SFAS No 35. SFAS No. 135 also amends other existing authoritative literature to make various technical corrections, clarify meanings, or describe applicability under changed conditions. SFAS No. 135 is effective for financial statements issued for fiscal years ending after February 15, 1999. The Company believes that the adoption of SFAS No. 135 had no significant effect on its financial statements.
eMajix.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1. Development Stage Operations and Going Concern
The Company has been in the development stage since its inception. The Company has no recurring source of revenue and has incurred losses since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.
Management of the Company has undertaken certain actions to address these conditions. Management currently plans to commence production in fiscal 2000. To this end, management is currently in negotiations with potential customers and with marketing representatives to establish a product channel. Funds required to carry out management's plans are expected to be derived from future stock sales or borrowings from outside parties. There can be no assurances that the Company will be successful in executing its plans.
2. Licenses
In March 2000, the Company acquired exclusive licensing rights, from Iterated Systems, Inc., to compile, use, copy and modify ClearVideo Source Code and to create and manufacture products and services. Additionally, the license agreement provides that the Company may sublicense any products and services which it creates using the technology under the licensing agreement. The license was acquired for a $250,000 note payable and the issuance of 297,500 shares of common stock, valued at $2,975.
3. Income Taxes
At March 31, 2000, the Company had net deferred tax assets of approximately $3,500 principally arising from net operating loss carryforwards for income tax purposes. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset has been established at March 31, 2000. At March 31, 2000, the Company has net operating loss carryforwards totaling approximately $10,144, which will expire in the year 2015.
eMajix.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
4. Notes Payable
Notes payable at March 31, 2000, consist of the following:
Non-interest bearing note payable to Iterated Systems, Inc., due on May 15, 2000, secured by all tangible and intangible assets of the Company $ 150,000
The agreement with Iterated Systems, Inc. "Iterated", contains an anti-dilution clause whereby the percentage of ownership of the Company's common stock by Iterated shall be no less than 1.25% of the total outstanding shares of the Company's common stock at any given time. This provision shall terminate after the last day of the first sixty (60) day period during which : (i) the common stock of the Company is traded on NASDAQ, or the American or the New York Stock Exchange and (ii) the Market Capitalization of the Company does not fall below fifty million dollars and (iii) the 297,500 shares of common stock that Iterated received under the agreement become free trading Rule 144 stock or are covered by a registration statement in compliance with the Act and (iv) the share price of the Company's shares traded on NASDAQ, the American Stock Exchange or the New York Stock exchange does not fall below $2.10. This provision also terminates if Iterated sells or disposes of the shares that it received under this agreement.
6. Subsequent Events
On May 11, 2000, the Company issued 501,000 restricted shares of Common Stock to an accredited investor for $167,000.
Ob May 15, 2000, the non-interest bearing note payable to Iterate Systems was paid.
Part III
Item 1. Index to Exhibits
Exhibit
Number Description
3.1 Articles of Incorporation.
3.2 First Amendment to Articles of Incorporation.
3.3 Second Amendment to Articles of Incorporation.
3.4 Bylaws.
4.1 Specimen Stock Certificate.
10.1 Sub-License Agreement With Ryan Corley as Nominee.
10.2 Licensing Agreement for ClearVideo.
10.3 Licensing Agreement for ClearVideo - Addendum.
27.1 Financial Data Schedule.
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SIGNATURES
In accordance with Section 12 of the Securities Ace of 1934, the registrant caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized:
eMajix.com, Inc.
BY: /s/ Ryan Corley
Ryan Corley, President
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KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears below constitutes and appoints Ryan Corley, as true and lawful attorney-in-fact and agent, with full power of substitution, for his and in his name, place and stead, in any all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, therewith, with the Securities and Exchange Commission, and to make any and all state securities law or blue sky filings, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intends and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in- fact and agent, or any substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10SB Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
Signatures Title Date
/s/ Ryan Corley Chairman of the Board 05/16/00
Ryan Corley of Directors, President,
Chief Executive Officer,
Treasurer, and Chief Financial
Officer
/s/ Leon P. Davis Secretary 05/16/00
Leon P. Davis
/s/ W. H. Walker, Jr. Member of the Board 05/16/00
W. H. Walker, Jr. of Directors
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EXHIBIT 3.1
OFFICE OF THE SECRETARY OF STATE
STATE OF OKLAHOMA
[State of Oklahoma Seal]
CERTIFICATE OF INCORPORATION
WHEREAS, the Certificate of Incorporation of
SOUTHERN WIRELESS, INC.
has been filed in the office of the Secretary of State as provided by the laws of the State of Oklahoma.
NOW THEREFORE, I, the undersigned, Secretary of State of the State of Oklahoma, by virtue of the powers vested in me by law, do hereby issue this certificate evidencing such filing.
IN TESTIMONY WHEREOF, I have hereunto set my hand and caused to be affixed the Great Seal of the State of Oklahoma.
Filed in the City of Oklahoma City this 30th day of March, 1999.
/s/ Mike Hunter Secretary of State |
CERTIFICATE OF INCORPORATION
OF OKLAHOMA SECRETARY
OF STATE
SOUTHERN WIRELESS, INC.
FIRST: The name of the corporation is Southern Wireless, Inc.,
SECOND: The address of the corporation's registered office in the State of Oklahoma is Penthouse Suite, 403 South Cheyenne Avenue, Tulsa, Oklahoma 74103. The name of the corporation's registered agent at such address is Lonny Davis.
THIRD: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the general corporation law of the State of Oklahoma.
FOURTH: The total number of shares of stock which the corporation shall have authority to issue is 100,000,000 shares, each of the shares having a par value of $0.0001, thereby resulting in the corporation having total authorized capital stock in the amount of $10,000.00, all of which shall be Common Stock.
The Board of Directors of the corporation shall have full authority, to the extent permitted by law, to increase, decrease or otherwise adjust the capital stock of the corporation, to designate the classes or series thereof and to determine whether all or any part of such stock shall have voting power, full or limited, or no voting powers, and to determine such designations, and such powers, preferences, relative, participating or optional, or other special rights and the qualifications, limitations or restrictions thereof as the Board shall from time to time determine in duly adopted resolutions.
At any time and from time to time when authorized by resolution of the Board of Directors and without any action by its shareholders, the corporation may issue or sell any shares of its capital stock of any class or series, whether out of the unissued shares thereof authorized by the Certificate of Incorporation of the corporation as originally filed or by an amendment thereof or out of shares of its capital stock acquired by it after the issue thereof, and whether or not the shares thereof so issued or sold shall confer upon the holders thereof the right to exchange or convert such shares for or into other shares of capital stock of the corporation of any class or classes or any series thereof. When similarly authorized but without any action by its shareholders, the corporation may issue or grant rights, warrants or options, in bearer or registered or such other form as the Board of Directors may determine, for the purchase of shares of the capital stock of any class or series of the corporation within such period of time, or without limit as to time, to such aggregate number of shares, and at such price per share, as the Board of Directors may determine. Such rights, warrants or options may be issued or granted separately or in connection with the issue of any bonds, debentures, notes, obligations or other evidences of indebtedness or shares of the capital stock of any class or series of the corporation and for such
consideration and on such terms and conditions as the Board of Directors in its sole discretion may determine. In such case the consideration to be received by the corporation for any such shares so issued or sold shall be such as shall be fixed from time to time by resolution of the Board of Directors. Notwithstanding the above, the shares of stock of the Corporation shall have pre-emptive rights so that no Stockholder's share can be diluted without the consent of the Stockholder.
FIFTH: The name and mailing address of the incorporator is as follows:
Leon P. Davis
Penthouse Suite
403 South Cheyenne
Tulsa, OK 74103
SIXTH: In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized:
(a) To adopt amend or repeal the Bylaws of the corporation;
(b) To authorize and cause to be executed or granted mortgages, security interests and liens upon the real and personal property of the corporation;
(c) To set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve in the manner in which it was created;
(d) By a majority of the whole Board of Directors, to designate one or more committees, each committee to consist of one (1) or more of the directors of the corporation. The Board may designate one (1) or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution or in the Bylaws of the corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; provided, however, the Bylaws may provide that in the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.
(e) When and as authorized by the affirmative vote of the holders of a majority of the stock issued and outstanding having voting power given at a shareholders' meeting duly called upon such notice as is required by law, or when authorized by the written consent of the holders of a majority of the voting stock issued and outstanding, to sell, lease or exchange all or substantially all of the property and assets of the corporation, including its goodwill and its corporate
franchises, upon such terms and conditions and for such consideration, which may consist, in whole or in part, of money or property including shares of stock in, and/or other securities of, any other corporation or corporations, as its Board of Directors shall deem expedient and for the best interests of the corporation.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors, or any class of them,
and/or between this corporation and its shareholders, or any class of
them, any court of equitable jurisdiction within the State of Oklahoma,
on the application in a summary way of this corporation, or of any
creditor or shareholder thereof, or on the application of any receiver
or receivers appointed for this corporation under the provisions of
Section 1106 of Title 18 of the Oklahoma Statutes or on the application
of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of Section 1100 of Title 18
of the Oklahoma Statutes, order a meeting of the creditors or class of
creditors, and/or the shareholders or class of shareholders of this
corporation, as the case may be, to be summoned in such manner as the
court directs. If a majority in number representing three-fourths
(3/4ths) in value of the creditors or class of creditors, and/or of the
shareholders or class of shareholders of this corporation, as the case
may be, agree to any compromise or arrangement and to any
reorganization of this corporation as consequence of such compromise or
arrangement, the compromise or arrangement and the reorganization
shall, if sanctioned by the court to which the application has been
made, be binding on all the creditors or class of creditors and/or on
all the shareholders or class of shareholders of this corporation, as
the case may be, and also on this corporation.
EIGHTH: Meetings of shareholders may be held within or without the State of Oklahoma as the Bylaws may provide. The books of the corporation may be kept (subject to applicable law) inside or outside the State of Oklahoma at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the corporation. Elections of directors need not be by written ballot unless the Bylaws of the corporation shall so provide. One-third (1/3) of the shares entitled to vote, present or represented by proxy at a meeting, shall constitute a quorum.
NINTH: To the extent permitted by law no contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason or solely because the directors or officers are present at or participate in the meeting of the board or committee thereof which authorizes the contract or transaction or solely because the directors or officers or their votes are counted for such purpose.
TENTH: The Board of Directors is expressly authorized to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceedings, whether civil, criminal, administrative or investigative, other than action by or in the right of the corporation, by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement to the extent and in the manner permitted by the laws of the State of Oklahoma.
A director of the corporation shall not be liable to the corporation or its shareholders for monetary damages for an act or omission in the director's capacity as a director, except to the extent the director is round liable for (1) a breach of the director's duty or loyalty to the corporation or its shareholders or members; (2) an act or omission not in good faith that constitutes a breach or duty or the director to the corporation or in act or omission that involves intentional misconduct or a knowing violation of the law, (3) a transaction from which the director received an improper benefit. whether or not tile benefit resulted from an action taken within the scope of the directors office. or (5) an act or omission (or which tile liability or a director is expressly provided by an applicable statute,
ELEVENTH: In furtherance and not in limitation of the powers conferred by the laws of the State of Oklahoma, the Board of Directors is expressly authorized to adopt, amend or repeal the Bylaws of the corporation.
TWELFTH: The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by law, and all rights conferred upon the shareholders herein are granted subject to this reservation.
THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the Oklahoma General Corporation Act, makes this Certificate hereby declaring and certifying that this is the act and deed of the undersigned and that the facts herein stated are true as of March 2, 1999.
/s/ Leon P. Davis Leon P. Davis |
EXHIBIT 3.2
OFFICE OF THE SECRETARY OF STATE
STATE OF OKLAHOMA
[State of Oklahoma Seal]
AMENDED
CERTIFICATE OF INCORPORATION
WHEREAS, the Amended Certificate of Incorporation of
SOUTHERN WIRELESS, INC.
has been filed in the office of the Secretary of State as provided by the laws of the State of Oklahoma.
NOW THEREFORE, I, the undersigned, Secretary of State of the State of Oklahoma, by virtue of the powers vested in me by law, do hereby issue this certificate evidencing such filing.
IN TESTIMONY WHEREOF, I hereunto set my hand and cause to be affixed the Great Seal of the State of Oklahoma.
Filed in the City of Oklahoma City this 20th day of March, 2000.
/s/ Mike Hunter
Secretary of State
[ Seal of Oklahoma]
|
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
SOUTHERN WIRELESS, INC.
PURSUANT TO a Resolution of the Stockholders which was approved and passed February 2, 2000 by a majority of more that 2/3 of the shares issued and outstanding, and by a Resolution approved and passed unanimously by the Board of Directors February 2, 2000, the Certificate of Incorporation is hereby amended in that the Par Value of the common stock is changed to $0.00005 and the number of authorized shares is increased to 200,000,000. Pursuant to the aforementioned Resolutions, this amendment is effective at the closed of business March 21, 2000.
THE UNDERSIGNED, being all of the Directors of the Corporation, hereby declare and certify that this amendment is pursuant to a Resolution of a majority of the shareholders and of a Resolution of all of the Directors and that the amendment has been duly adopted in accordance with the provisions of Title 18 subsection 1077 of the General Corporation Act.
/s/ W. A. Walker W. A. Walker, Jr. Director /s/ Ryan Corley Ryan Corley, Director |
EXHIBIT 3.3
OFFICE OF THE SECRETARY OF STATE
STATE OF OKLAHOMA
[State of Oklahoma Seal]
AMENDED
CERTIFICATE OF INCORPORATION
WHEREAS, the Amended Certificate of incorporation of
EMAJIX.COM, INC.
has been filed in the office of the Secretary of State as provided by the laws of the State of Oklahoma.
NOW THEREFORE, 1, the undersigned, Secretary of State of the State Of Oklahoma, by virtue of the powers vested in me by law, do hereby issue this certificate evidencing such filing.
IN TESTIMONY WHEREOF, I have hereunto set my hand and caused affixed the Great Seal of the State of Oklahoma.
Filed in the City of Oklahoma City this 6th day of April, 2000.
/s/ Mike Hunter Secretary of State |
[ Seal of Oklahoma]
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
EMAJIX.com, Inc.
PURSUANT TO a Resolution of the Stockholders of Southern Wireless, Inc. which was approved and passed March 28, 2000 by a majority of more that 2/3 of the shares then outstanding, and by a Resolution approved and passed unanimously by the Board of Directors of Southern Wireless, Inc. March 28, 2000, the Certificate of Incorporation is hereby amended in that the name of the Corporation is changed to EMAJIX.com, Inc.. Pursuant to the aforementioned Resolutions, this amendment is effective upon filing.
THE UNDERSIGNED, being all of the Directors of the Corporation, hereby declare and certify that this amendment is pursuant to a Resolution of a majority of the shareholders and of a Resolution of all of the Directors and that the amendment has been duly adopted in accordance with the provisions of Title 18 subsection 1077 of the General Corporation Act.
Dated this 28th day of March, 2000
/s/ W. A. Walker
W. A. Walker, Jr. Director
/s/ Ryan Corley
Ryan Corley, Director
|
EXHIBIT 3.4
BY-LAWS
OF
SOUTHERN WIRELESS, INC.
ARTICLE I - OFFICE
1.1 REGISTERED OFFICE AND AGENT
The registered office of the Corporation maintained in the State of Oklahoma, may be, but need not be, identical with the principal business office in the State of Oklahoma, and the address of the registered office may be changed from time to time by the Board of Directors.
1.2 PRINCIPAL OFFICE
The principal office of the Corporation in the State of Oklahoma shall be located in the County of Tulsa. The Corporation may have such other offices, either within or without the State of Oklahoma, as the Board of Directors may designate or as the business of the Corporation may require from time to time.
1.3 OTHER OFFICES
The Corporation may also have offices at such other places both within and without the State of Oklahoma as the Board of Directors may from time to time determine or the business of the Corporation may require.
ARTICLE 11 - MEETINGS OF SHAREHOLDERS
2.1 ANNUAL MEETING
Annual meetings of stockholders, commencing with the year 2000, is to be set by the Board of Directors and shall be held no less than ten (10) days after the close of each fiscal year and no longer the nine (9) months after the close of any fiscal year. The date, time and place within or without the State of Oklahoma, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof, at which meeting the stockholders shall elect a Board of Directors, and transact such other business as may properly be brought before the meeting.
2.2 FAILURE TO HOLD ANNUAL MEETING
Failure to hold any annual meeting shall not work a dissolution of the Corporation. If the annual meeting is not held within any thirteen (13) month period, any court of competent jurisdiction in the county in which the principal office of the Corporation is located may, on application of any shareholder, summarily order a meeting to be held.
2.3 SPECIAL MEETINGS
Special meetings of the shareholders for any purpose or purposes may be called by the President or by the Secretary at the request in writing of a majority of the Board of Directors, or at the request of shareholders owning not less than thirty (30%) percent of all the shares entitled to vote for the purpose of the proposed meeting. Business transacted at any such special meeting of shareholders shall be limited to the purposes stated in the notice.
2.4 NOTICE AND WAIVERS OF NOTICE
(a) Written notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting, either personally or by mail, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting.
(b) Notice may be waived in writing signed by the person or persons entitled to such notice. Such waiver may be executed at any time before or after the holding of such meeting. Attendance at a meeting shall constitute a waiver of notice, except where the person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called.
2.5 RECORD DATE
For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, the Board of Directors may in advance establish a record date which must be at least ten (1 0) but not more than fifty (50) days prior to such meeting. If the Board of Directors fail to establish a record date, the record date shall be the date on which notice of the meeting is mailed.
2.6 VOTING LIST
(a) The officer or agent having charge of the stock transfer books for shares of the Corporation shall make, at least ten (1 0) days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten (1 0) days prior to such meeting, shall be kept on file at the registered office of the Corporation and shall be subject to inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time
and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting. The original stock transfer book shall be prima facie evidence as to who are the shareholders entitled to examine such list or transfer books or to vote at any meeting of shareholders.
(b) Failure to comply with the requirements of this section shall not affect the validity of any action taken at such meeting.
2.7 QUORUM OF SHAREHOLDERS
The holders of one third of the shares issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of business except as otherwise provided by a statute or by the Articles of Incorporation. If, however, a quorum shall not be present or represented at any meeting of the shareholders, the shareholders entitled to vote thereat, present in person or represented by proxy, shall have power to 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, provided a quorum shall be present or represented thereat, any business may be transacted which might have been transacted if the meeting had been held in accordance with the original notice thereof.
2.8 WITHDRAWAL OF QUORUM
If a quorum is present at any meeting, the vote of holders of a majority of the shares entitled to vote, present in person or represented by proxy, shall decide any question brought before such meeting unless the question is one upon which a different vote is required by express provision of the statutes or by the Articles of Incorporation or these By-Laws. The shareholders present at a meeting at which a quorum is present may continue to transact business until the adjournment, despite the withdrawal of shareholders after the commencement of the meeting, which withdrawal leaves less than a quorum remaining at the meeting.
2.9 PROXIES
No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise expressly provided in the proxy. Each proxy shall be revocable unless expressly provided therein to be irrevocable and unless otherwise made irrevocable by law.
2.10 VOTING OF SHARES
Each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of any class or classes are limited or denied by the Articles of Incorporation. A shareholder may vote either in person or by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact.
2.11 ACTION WITHOUT MEETING OR BY USE OF CONFERENCE TELEPHONE
Any action required by the Oklahoma Business Corporation Act to be taken at a meeting of the shareholders, or any action which may be taken at a meeting of the shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof, and such consent shall have the same force and effect as a unanimous vote of shareholders, and may be stated as such in any articles or document filed with the Secretary of State. Subject to the provisions of the Oklahoma Business Corporation Act and these By-Laws for notice of meetings, shareholders may participate in and hold a meeting of such shareholders by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in such a meeting shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
ARTICLE III - DIRECTORS
3.1 POWERS
The business and affairs of the Corporation and all corporate powers shall be managed by the Board of Directors, subject to any limitation imposed by statute, the Articles of Incorporation, or these ByLaws as to action which requires authorization or approval by the shareholders.
3.2 NUMBER, TENURE AND QUALIFICATIONS.
The number of Directors of the Corporation shall be not greater than fifteen and shall be set annually by resolution of the Corporation's Board of Directors. Each Director shall hold office until the next annual meeting of Shareholders and until his or her successor shall have been elected and qualified. Directors need not be residents of the State of Oklahoma or Shareholders of the Corporation.
3.3 ELECTION
The Directors shall be elected at the annual meeting of the shareholders, and each Director elected shall serve until his successor shall have been elected and qualified.
3.4 VOTING
Every shareholder entitled to vote shall have the right to
vote the number of voting shares owned
by such shareholder for as many persons as there are directors to
be elected and for whose election the shareholder has the right to
vote. Shareholders may not cumulate their votes.
3.5 REMOVAL OF DIRECTORS
At any meeting of shareholders called expressly for the purpose of removing a Director, any Director or the entire Board of Directors may be removed, with or without cause, by a vote of the holders of a majority of the shares then entitled to vote at an election of Directors.
3.6 VACANCIES
(a) Any vacancy in the Board of Directors caused by death, resignation, removal or otherwise shall be appointed by a majority of the remaining Directors. A Director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office.
(b) A directorship to be filled by reason of an increase in the number of directors may be filled by (1) an annual or special meeting of shareholders called for that purpose; or (2) by the board of directors for a term of office continuing only until the next election of one or more directors by the shareholders; provided that the board of directors may not fill more than two such directorships during the period between any two successive annual meetings of shareholders.
3.7 INCREASE OR DECREASE IN NUMBER
The number of Directors may be increased or decreased from time to time by amendment to these ByLaws, but no decrease shall have the effect of shortening the term of any incumbent Director. Any directorship to be filled by reason of an increase in the number of Directors shall be filled by election at an annual or special meeting of shareholders.
ARTICLE IV - MEETINGS OF THE BOARD OF DIRECTORS
4.1 PLACE Meetings of the Board of Directors, regular or special, may be held either within or without the State of Oklahoma.
4.2 ANNUAL MEETING
Within thirty (30) days after each annual meeting of shareholders, the Board of Directors elected at such meeting shall hold an annual meeting at which the Board of Directors shall elect officers and transact such other business as shall come before the meeting.
4.3 REGULAR MEETINGS
Regular meetings of the Board of Directors may be held without notice at such time and at such place as, shall from time to time be determined by the Board of Directors.
4.4 SPECIAL MEETINGS
Special meetings of the Board of Directors may be called by the Chief Executive Officer on three days notice to each director. Special meetings shall be called by the Secretary on the written request of two (2) or a majority of the Directors, whichever is less, by giving three days notice to each director.
4.5 NOTICE AND WAIVER OF NOTICE
Attendance of a Director at any meeting shall constitute a waiver of notice of such meeting, except where a Director attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
4.6 QUORUM OF DIRECTORS
At all meetings of the Board of Directors, a majority of the Directors shall constitute a quorum for the transaction of business and the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of Directors, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
4.7 ACTION WITHOUT MEETINGS
Unless otherwise restricted by the Articles of Incorporation, any action required or permitted to be taken at a meeting of the Board of Directors or any committee designated by the Board of Directors may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all members of the Board of Directors or committee, as the case may be. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may be stated as such in any document or instrument filed with the Secretary of State. Subject to the provisions of the Oklahoma Business Corporation Act and these By-Laws for notice of meetings, unless otherwise restricted by the Articles of Incorporation, members of the Board of Directors or members of any committee designated by the Board of Directors, may participate in and hold a meeting of the Board of Directors or such 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 participation in a meeting pursuant to this Section shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
4.8 COMMITTEES
The Board of Directors may from time to time designate members of the Board to constitute committees, including an Executive Committee, which shall in each case consist of not less than two Directors, and shall have and may exercise such power, as the Board may determine and specify in the respective resolutions appointing them; except that no such committee shall have the authority of the Board of Directors in reference to amending the Articles of Incorporation, approving a plan of merger or consolidation, recommending to the shareholders the sale, lease, or exchange of all or substantially all of the property and assets of the corporation otherwise than in the usual and regular course of its business, recommending to the shareholders a voluntary dissolution of the corporation or a revocation thereof, amending, altering, or repealing the By-Laws of the corporation or adopting new By-Laws for the corporation, filling vacancies in the Board of Directors or any committee thereof, filling any directorship to be filled by reason of an increase in the number of directors, electing or removing officers or members of such committee, fixing the compensation of any member of such committee, or altering or repealing any resolution of the Board of Directors which by its terms provides that it shall not be so amendable or repealable; and, shall not have the power or authority to declare a dividend or to authorize the issuance of shares of the corporation. A majority of all the members of any such committee may determine its action and fix the time and place of its meeting, unless the Board of Directors shall otherwise provide. The Board of Directors shall have power at any time to change the number, subject as aforesaid, and members of any such committee, to fill vacancies and to discharge any such committee.
4.9 ORDER OF BUSINESS
At meetings of the Board of Directors, business shall be transacted in such order as from time to time the Board may determine. At meetings of the Board of Directors, the Chief Executive Officer shall preside, and in the absence of the Chief Executive Officer, a vice chairman shall be chosen by the Board from among the Directors present. The Secretary of the Corporation shall act as Secretary of the meetings of the Board of Directors, but in the absence of the Secretary, the presiding officer may appoint any person to act as Secretary of the meeting.
4.10 COMPENSATION
Directors, as such, shall not receive any stated salary for their service, but by resolution of the Board a fixed sum and expenses of attendance, if any, may be allowed for attendance at each annual, regular, or special meeting of the Board; provided, that nothing contained herein shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
ARTICLE V - OFFICERS
5.1 ELECTION, NUMBER, QUALIFICATION, TERM, COMPENSATION
The officers of the Corporation shall be elected by the Board of Directors at the annual meeting of the Board of Directors provided for in Article IV, Section 4.2. The officers shall consist of a President, who is the Chief Executive Officer, and a Secretary. The Board of Directors may also elect a Treasurer, one or more Vice-Presidents, Assistant Secretaries and Assistant Treasurers and such other officers and assistant officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall have such authority and exercise such powers and perform such duties as shall be determined from time to time by the Board by resolutions not inconsistent with these By-Laws. Two or more offices may be held by the same person. None of the officers need be Directors except the Chief Executive Officer. The Board of Directors shall have the power to enter into contracts of employment and compensation of officers for such terms as the Board deems advisable. The salaries of all officers and agents of the Corporation shall be fixed by the Board of Directors.
5.2 REMOVAL
The officers of the Corporation shall hold office until their successors are elected or appointed and qualify, or until their death or until their resignation or removal from office. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board whenever in its judgment the best
interests of the Corporation will be served thereby. Such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer shall not of itself create contract rights.
5.3 VACANCIES
Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors.
5.4 AUTHORITY
Officers and agents shall have such authority and perform such duties in the management of the Corporation as may be provided in these ByLaws or as may be determined by the Board of Directors, not inconsistent with these ByLaws.
5.5 PRESIDENT
The President shall be the Chief Executive officer of the Corporation and shall have general charge of the business of the Corporation. The president shall from time to time obtain information concerning the affairs and business of the Corporation and shall promptly lay such information before the Board of Directors, all matters presented by any officer of the Corporation for the Corporation's consideration and shall from time to time communicate to the officers such action of the Board of Directors as may in the Presidents judgment affect the performance of their official duties.
The President may execute and deliver on behalf of the Corporation any deeds, bonds, mortgages, contracts, powers of attorney, or any other instruments which the Board of Directors have authorized to be executed, except in cases where the signing and execution shall be expressly delegated by the Board of Directors or these bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed. The President may employ all agents and employees of the Corporation and may discharge any such agent or employee and shall perform such other duties as may be prescribed by the Board of Directors from time to time.
5.6 THE VICE-PRESIDENT In the absence of the President or in the event of the inability or refusal to act of the President, the Vice-President (or in the event there be more than one Vice-President, the Vice- Presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the President and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The Vice-President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
5.7 THE SECRETARY
The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the stockholders of the Corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision the Secretary shall be. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or an Assistant secretary shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seat of the Corporation and to attest the affixing by his signature.
5.8 THE ASSISTANT SECRETARY
The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of the inability or refusal to act of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
5.9 THE TREASURER
The Treasurer, if any, shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys 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. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all transactions as Treasurer and of the financial condition of the Corporation.
5.10 THE ASSISTANT TREASURER
The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of the inability or refusal to act of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
ARTICLE VI - CERTIFICATES REPRESENTING SHARES
6.1 CERTIFICATES
The shares of the Corporation shall be represented by certificates signed by the President and the Secretary or an Assistant Secretary of the corporation, and shall be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the President and the Secretary or Assistant Secretary upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent, or registered by a registrar, other than the Corporation itself or an employee of the Corporation. The certificates shall be consecutively numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall state on the face thereof the holders name and the number of shares. Certificates shall be in such form as shall be prescribed from time to time in conformity with law by the Board of Directors. The Corporation may appoint from time to time transfer agents and registrars, who shall perform their duties under the supervision of the Secretary.
6.2 PAYMENT, ISSUANCE
Shares may be issued for such consideration, not less than the par value thereof, as may be fixed from time to time by the Board of Directors. The consideration for the payment of shares shall consist of money paid, labor done, or property actually received. Shares may not be issued until the full amount of the consideration fixed therefor has been paid.
6.3 LOST, STOLEN, OR DESTROYED CERTIFICATES
The Board of Directors may direct a new certificate to be issued in place of any certificate previously issued by the Corporation and alleged to have been lost, stolen, or destroyed upon the making of an affidavit of that fact by the person claiming the certificate to have been lost, stolen, or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, prescribe such terms and conditions as it deems expedient and may require such indemnities as in deems adequate to protect
the Corporation from any claim that may be made against it with respect to any such certificate alleged to have been lost or destroyed
6.3 REGISTRATION OF TRANSFER
Shares of stock shall be transferable only on the books of the Corporation by the holder there of in person or by his duly authorized attorney. 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, a new certificate shall be issued to the person entitled thereto and the old certificate canceled and the transaction recorded upon the books of the Corporation.
ARTICLE VII - DIVIDENDS
7.1 DECLARATION AND PAYMENT
Subject to the Laws of the State of Oklahoma and the Articles of Incorporation, dividends may be declared by the Board of Directors, in its discretion, at any regular or special meeting, pursuant to law and may be paid in cash, in property, or in the Corporation's own shares.
7.2 RESERVES
Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve fund for meeting contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created.
ARTICLE VII - INDEMNIFICATION OF OFFICERS,
DIRECTORS, AND EMPLOYEES
8.1 INDEMNIFICATION
The Corporation shall, to the fullest extent now or hereafter permitted by law, indemnify any Director or officer or former Director or officer of the Corporation, or any person who may have served at its request as a director or officer or former director or officer of another corporation in which it owns shares of capital stock or of which it is a creditor, against expenses actually and necessarily incurred by him in connection with the defense of any action, suit, or proceeding, whether civil or criminal, in which he is made a party by reason or being or having been such Director or officer, except in relation to matters as to
which he shall be adjudged in such action, suit or proceeding to be liable for negligence or misconduct in performance of duty. The Corporation shall also reimburse any such Director or officer or former Director or officer or any such person serving or formerly serving in the capacities set forth in the first sentence above at the request of the Corporation for the reasonable cost of settlement of any such action, suit or proceeding, if it shall be found by a majority of the Directors not involved in the matter in controversy, whether or not a quorum, that it was in the best interest of the Corporation that such settlement be made, and that such Director or officer or former Director or officer or such person was not guilty of negligence or misconduct in performance of duty.
8.2 INSURANCE
The Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee, or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under these By-Laws or the laws of the State of Oklahoma.
8.3 ADVANCED EXPENSES
The Corporation may pay in advance any expenses which may become subject to indemnification if the Board of Directors authorizes the specific payment and the person receiving the payment undertakes in writing to repay unless it is ultimately determined that he is entitled to indemnification by the Corporation.
8.4 OTHER PROTECTION AND INDEMNIFICATION
The protection and indemnification provided hereunder shall
not be deemed exclusive of any other
rights to which such Director or officer or former Director or
officer or such person may be entitled, under any agreement,
Corporate policy, insurance policy or vote of shareholders, or
otherwise.
ARTICLE IX - MISCELLANEOUS PROVISIONS
9.1 FISCAL YEAR
The fiscal year of the Corporation shall be fixed by resolution for the Board of Directors.
9.2 SEAL
The Corporate seal shall contain the name of the Corporation, and the word "OKLAHOMA". The seal may be used by causing it or a facsimile to be impressed or affixed or in any other manner reproduced. The corporate seal may be altered by order of the Board of Directors at any time.
9.3 MINUTES
The Corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its shareholders and Board of Directors, and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders, and the number and class of the shares held by each.
9.4 RESIGNATIONS
Any director or office may resign at anytime. Such resignations shall be made in writing and shall take effect at the time specified therein, or if no time is specified, at the time of its receipt by the President or Secretary. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.
9.5 AMENDMENT
These By-Laws may be altered, amended, or repealed and new By- Laws may be adopted by the Board of Directors, subject to repeal or change by action of the shareholders, at any meeting of the Board of Directors at which a quorum is present, provided notice of the proposed alteration, amendment, or repeal is contained in the notice of the meeting.
9.6 NOTICE
Any notice to Directors or shareholders shall be in writing and shall be delivered personally or mailed to the Directors or shareholders at their respective addresses appearing on the books of the Corporation. Notice by mail shall be deemed to be given at the time when the same shall be deposited in the United States mail, postage prepaid. Notice to Directors may also be given by telegram or facsimile. Whenever any notice is required to be given under the provisions of applicable statutes or of the Articles of Incorporation or of these By-Laws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.
/s/ W. H. Walker, Jr W. H. Walker, Jr., Director |
Exhibit 4.1
Numbers eMajix.com, Inc. Shares Incorporated under the laws of the state of Oklahoma 200,000,000 shares common stock authorized $.00005 par value
This
certifies CUSIP 29077Q 10 9
that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARE OF COMMON STOCK OF
eMajix.com, Inc.
transferable on the books of the corporation in person or by duly authorized attorney upon surrender of this certificate properly endorsed. This certificate and the shares represented hereby are subject to the laws of the State of Oklahoma, and to the Certificate of Incorporation and Bylaws of the Corporation, as now or hereafter amended. This certificate is not valid unless countersigned by a Transfer Agent.
WITNESS the facsimile seal of the Corporation and the signature of it's duly authorized officers.
DATED ___________________________
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with the rights of Survivorship
and not as tenants in Common
UNIF GIFT
MIN ACT ____________________ Custodian ______________
(Minor) _____________ ACT
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Additional abbreviations may also be used though not in the above list.
For value received ________________ hereby sell, assign and
transfer unto:
(Please insert social security or other identifying number of
assignee)
Dated_________________________
X________________________________________________________________ The signature of this agreement must correspond with the names as written upon the face if this certificate in every particular, without alteration or enlargement or any change whatsoever. The signature(s) must be guaranteed by an eligible guarantor institution (banks, stockbroker, savings and loan association and credit union.)
SIGNATURE GUARANTEED:
TRANSFER FEE WILL APPLY
Exhibit 10.1
License Agreement
THIS DEVELOPMENT AND LICENSE AGREEMENT ("Agreement") is made and entered into this 22nd day of December, 1999 by and between Southern Wireless, Inc. (SWI) and Ryan Corley as nominee for a corporation to be formed.
WHEREAS SWI intends to acquire certain technology that will compress video and stream real time video via the internet and desires to grant certain limited licenses for use of same;
WHEREAS Ryan Corley, is acting as nominee for a corporation to be formed for the purpose of developing and distributing multiple branded networks of digital content and programming for distribution over the Internet, herein referred to as Internet Broadcasting Networks ("IBN");
WHEREAS Ryan Corley on behalf of IBN acknowledges that SWI does not currently own or have the rights to the technology that is the subject of this agreement and that SWI may never obtain the rights to said technology, IBN and SWI enter into this agreement subject to the provision that it only becomes binding on the parties if SWI obtains the rights to the subject technology;
WHEREAS the parties hereto acknowledge that this agreement is subordinate to, subject to and incorporates all of the definitions, conditions, requirements, restrictions and restrictive covenants that may be included in any contract that SWI may enter into for the purchase of licencing of the certain technology for video/audio compression and video/audio streaming.
NOW THEREFORE, in consideration of the covenants set forth herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged and intending to be legally bound, the parties hereby agree as follows:
1. Subject to the conditions herein SWI agrees to grant IBN a limited exclusive license for the uses of the subject technology solely for video/audio streaming over the internet of TV type programming and content on multiple branded broadcast networks, specifically entertainment content and programming, news content and programming, sports content and programming and a non-exclusive use for documentary content and programming. Notwithstanding the foregoing, use of the subject technology for amateur sports programming at the high school level or lower is granted on a non- exclusive basis. SWI also agrees to grant IBN a non-exclusive license for use of the subject technology for video/audio compression and downloading in developing and operating IBN wholly owned broadcast networks and a non-exclusive license for streaming commercial advertising over the Internet on IBN wholly owned and operated networks. Expressly excluded from the licenses and rights conveyed under this agreement is use of the technology in conjunction with any programming or content considered to be rated X, XXX or pornographic.
The limited exclusive license granted herein shall convert to a limited non-exclusive license after four years. Said four year period to commence with the date identified in section 6 following herein.
2. All rights and licenses conveyed under this agreement are for use of the subject technology with programming and content delivered solely through IBN owned and operated networks. IBN shall not use the subject technology in any way to perform any services for other broadcast networks, web sites, distribution channels or any third party whatsoever.
3. SWI agrees that during the four-year period commencing on the date SWI is ready, willing and able to deliver the subject technology to IBN, it shall not execute or convey in any manner any license agreements with third parties for the use of the subject technology for the purpose off streaming TV type programming, specifically entertainment content and programming, sports content and programming and news content and programming over the internet without the express written permission of IBN. Furthermore, during the aforementioned four-year period, SWI shall not perform streaming services for any third parties for TV type programming in the areas of entertainment, sports and news without the express written permission of IBN. If such permission is granted by either party, all revenues derived therefrom will be split 75% to SWI and 25% to IBN for the term of the agreement(s) and any and all renewals of the agreement(s).
4. SWI may license subject technology for any other purposes not granted exclusively to IBN in sections 1 and 3 without restriction and without permission including but not limited to distribution, downloading and/or streaming of commercial advertising, feature length motion pictures, MOW's (feature length movies produced for television), documentary programming, musical performances, stage performances, educational content streamed directly to educational institutions and organizations, corporate training and informational content and programming, amateur sports programming and content at the high school level or less and for any other purposes not considered to be entertainment programming and content, sports programming and content and or news programming and content, that SWI deems appropriate.
5. Furthermore, SWI retains the right to utilize subject technology for streaming, downloading and distribution of any content and programming whatsoever through SWI's wholly owned and operated Internet broadcast networks should SWI choose to develop and operate such networks in the future. SWI also retains the right to stream commercial advertising from SWI wholly owned and operated severs to any web sites, broadcast networks or distribution channels it deems appropriate and to license the subject technology to third parties for streaming commercial advertising without permission from IBN or revenue split with IBN.
6. SWI will notify IBN in writing of the commencement date of the four-year period of exclusivity pursuant to section 3. When SWI is ready, able and willing to deliver the technology to IBN, the four year period will begin whether or not IBN is prepared to take delivery of the technology.
7. On the first day following the end of the said four year period provided for in section 3, SWI may license said technology without restriction or permission from IBN and without any payments to IBN.
8. IBN may sell all or part of one or more of the branded networks developed by IBN incorporating the subject technology and the licenses granted in section 1 of this agreement only with the express written permission of SWI. IBN may sell its names, branded networks and trademarks without SWI permission, but it may not sell or sub-license its rights to, or the use of, the subject technology or licenses granted herein without the express written permission of SWI.
9. As a condition of this agreement, IBN will issue shares of its common stock to SWI equal to 15% of the total stock outstanding computed on a fully-diluted basis for a period of 5 years from the "commencement date" as outlined in paragraph 6 above. At such times as the number of shares of outstanding Common Stock of IBN increases, computed on a fully diluted basis, to include stock options, warrants and other instruments which could be converted into common stock or any other class of stock, then IBN will issue additional shares of Common Stock to SWI, at no cost to SWI, so that the shares of SWI's percentage will be equal to 15% of the outstanding shares computed on a fully-diluted basis, at that time. If SWI sells any of its shares during the five year period, the dilution percentage shall be reduced by a calculation as follows (take number of shares sold divided by the number of shares held by SWI at the time of sale and reduce the 15% by the same percentage to obtain the new anti-dilution percentage). Should there be more than one sale, this procedure should be followed for each sale.
IBN shall not assign, transfer, or pledge this Agreement, in any manner without the prior written consent of SWI, except as part of a merger, reorganization or acquisition of all or substantially all of the assets or stock of the assignor, and upon the written agreement of the assignee to assume all of the obligations of the assignor.
This agreement will not be effective until SWI has received the IBN stock herein identified as consideration. SWI is not obligated to convey the subject technology unless IBN is a corporation lawfully incorporated under the laws of a State of the United States.
This agreement, and not the completion of any technology transfer, is full and complete satisfaction for all claims that Ryan Corley, as an individual has or may have for his efforts in helping SWI procure the subject technology.
This agreement may be executed in one or more counterparts, all of which, together, shall constitute one and the same instrument. The laws of the State of Oklahoma shall govern this Agreement
/s/ Ryan Corley_________________ /s/ W.H. Walker, Jr.,President
Ryan Corley, Individual W. H. Walker, Jr, President
Southern Wireless, Inc.
/s/ Ryan Corley ____________
Ryan Corley, Nominee for IBN
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EXHIBIT 10.2
LICENSE
THIS DEVELOPMENT AND LICENSE AGREEMENT ("Agreement') is made and entered into this 17th day of March 2000 by and between Iterated Systems, Inc. ("ISI") a corporation formed and existing under the laws of the State of Georgia, and Southern Wireless, Inc.("SWI"), a corporation formed and existing under the laws of the State of Oklahoma.
WHEREAS, SWI desires to license from ISI certain ISI technology;
WHEREAS, ISI desires to license certain of its technology to SWI;
NOW THEREFORE, in consideration of the covenants set forth herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged and intending to be legally bound, the parties hereby agree as follows:
Section 1. Definitions
1.1 ACT. The ACT is the Securities Act of 1933, as amended
1.2 ClearVideo Source Code. ClearVideo Source Code is the human readable code that compiles to the personal computer software described in Exhibit B as delivered by ISI to SWI under its Paragraph 4.1 obligation. The ClearVldeo Source Code includes source code for both encoder and decoders, which source code can be compiled into run-time versions.
1.3 ClearVideo Source Code Encoder. ClearVideo Source Code Encoder is that portion of the ClearVideo Source e which, when compiled takes digital image data as Input and processes such input data to output compressed data.
1.4 Common Stock. Common Stock means the common stock of SWI, and any and all shares, interests, participations or equivalent ownership. interests of SWI that has the right (whether or not subject to any prior rights of any other class or series of stock) to participate in any distribution of the assets or earnings of SWI without effective or practical limit as to share amount.
1.5 Confidential Information. As used in this Agreement, the term "Confidential Information shall mean any Technical Information, trade secrets or other information disclosed by either party which is in written, graphic, machine readable or other tangible form and is identified as "Confidential,"Proprietary" or In some other manner to indicate its confidential nature. Confidential Information may include oral information disclosed by either party. ClearVideo Source Code and disclosures made in the course of ISI's obligations herein shall be deemed Confidential Information of ISI.
1.6 Confidentiality and Non-Circumvention Agreement The Confidentiality and Non-Circumvention Agreement is the agreement between the parties attached as Exhibit C to this Agreement.
1.7 End User. End User is defined in Section 2.1.3.
1.8 End User License. End User License is defined in Section 4.2.2.
1.9 Initial Payment. The Initial Payment shall consist of both the payments described In Paragraph 3.1 (a) and 3. 1 (b).
1.10 Public Offering. Public Offering ("PO") means the sale and issuance by SWI of shares of Common Stock pursuant to an effective registration statement filed under the ACT with the Securities and Exchange Commission.
1.11 Intellectual Property Infringement. An Intellectual Property Infringement is an infringement of one or more of: (a) United States patents; (b) patents issued to any person by a European or Japanese patent office; (c) copyrights; (d) trademarks, service marks, or trade names; and/or (e) trade secrets.
1.12 ISI Technology. ISI Technology means any and all copyrighted material, patents, technology or Confidential Information of ISI licensed by ISI to SWI hereunder.
1.13 Marketing Material. Marketing Material shall consist only of
(1) the name "ClearVideo"; (2) the manual and packaging of ClearVideo,
Version 1.2, but excluding: (a) all references to Iterated Systems Inc.
(in any form including but not limited to Iterated Systems and
Iterated), (b) Iterated Systems' fem logo and (c) general corporate
information of Iterated Systems including but limited to addresses,
phone numbers and other contact information; (3) the ClearVideo logo(s)
as contained in the manual and packaging of ClearVideo Version 1.2; (4)
any ISI trademark rights in the name ClearVideo, or any ISI service
mark rights in the name ClearVideo, to the extent they exist; and (5)
the web addresses: www.clearvideo.com and www.clearvideo.com.uk.
1.14 SWI-Enhancements. SWI-Enhancements are those modifications, enhancements and derivatives of the ClearVideo Source Code made by SWI under the licenses granted herein.
1.15 Technical Material. Technical Material is drawings, diagrams, oral presentations and textual material, which may be provided on any media, which describes the functionality and use of ISI Technology.
1.16 ClearVideo Decoder. ClearVideo Decoder Is the program which results from compiling the ClearVideo Source Code which takes certain compressed data as its input and outputs decompressed data.
Section 2. License
2.1 License Grant. Subject to the terms herein, including without
limitation Section 3 of this Agreement, ISI grants the following
licenses to SWI which are exclusive solely as expressly provided for in
Section 2.2 of this Agreement, and which are non-transferable except as
expressly provided for herein:
2.1.1 ISI grants to SWI a license to compile, display, use, copy and modify ClearVideo Source Code to create SWI-Enhancements that are derivatives of ClearVideo Source Code.
2.1.2 ISI grants to SWI a license to use the ClearVideo Source Code, its run-time versions and the derivatives created In Paragraph 2.1.1 to create and manufacture products and service.
2.1.3 ISI grants to SWI a license to use the products and services created and manufactured under Paragraph 2.1.2 for the purpose of distributing and sub-licensing the products and services created in this Section 2.1.3 to end users ("End Users") pursuant to a valid End User License Agreement, provided: (a) such products and services are in compiled or other run-time form and (b) such products and services are sub-licensed under the terms set forth herein.
2.1.4 ISI grants to SWI a license to sublicense the right granted in Section 2.1.3 of this Agreement providing the sublicensee agrees in writing to be bound by the terms of this Agreement. SWI agrees that it will provide a copy of such written agreement to ISI within tan (10) days of its execution.
2.1.5 ISI grants to SWI the right to sublicense the licenses
granted in subsections 2.1.1 and 2.1.2 above to any entity provided:
(a) SWI enters into a written marketing agreement for SWI products with
such entity which restricts the use of ClearVideo Source Code which it
receives from SWI hereunder only to use for support and maintenance of
such SWI products; or (b) SWI enters into a written research and
development agreement with such entity for developing new SWI owned
products or new products jointly owned by SWI; or (c) SWI owns fifty
percent (50%) or more of the voting securities of such entity. The
right granted in this Section 2.14 is limited to only those entities
which agree in writing to be bound by the terms of this Agreement. SWI
agrees that it will provide a copy of such written agreement to ISI
within ten (10) days of its execution.
2.2 Exclusivity
2.2.1 Except as provided for In Section 2.2.3 below, ISI agrees that during the term of this Agreement it shall not execute or convey in any manner any license agreements with third parties for the use of ClearVideo Source Code Encoder, or its run-time forms.
2.2.2 ISI agrees that during the term of this Agreement (a) It will not use the name "ClearVideo" as the name of a product that it licenses and (b) it will not grant or convey in any manner any licenses to any third parties to use the name "ClearVideo" as the name of such third party's product.
2.2.3 Notwithstanding Section 2.2.1 of this Agreement, ISI may use and modify the ClearVideo Source Code Encoder, including Its run-time versions: (a) to integrate into other ISI products and then license and distribute the other such ISI products; or (b) to license and distribute materially and substantially modified ClearVideo Source Code Encoder, Including its run time versions.
2.2.4 Any licenses sold, issued or granted by ISI for the use of ClearVideo Source Code Encoder or its run-time forms or the Marketing Material that may exist at the execution of this agreement are not subject to the exclusivity restrictions herein. Any licenses for the ClearVideo Source Code Encoder which have not expired or been terminated and a summary of their general terms and restrictions, are listed on Exhibit D to this agreement.
2.3 Restrictions.
2.3.1 No Source Code Distribution. In addition to any other restrictions contained herein, SWI agrees that any product distributed or sublicensed under the licenses granted in this Section 2 shall not contain or disclose any ClearVideo Source Code and shall not contain or disclose any source code for SWI-Enhancements, except as expressly provided for in Section 2.1.5. The license grant of this Section 2 does not include either a license to sublicense or distribute ClearVideo Source Code, or the source code of SWI-Enhancements except as expressly provided for in Section 2.1.5.
2.3.2 Geography. The rights and licenses granted under subparagraphs 2. 1.1 through 2. 1.5 above are for exploitation throughout the world and via any satellite or other system serving Earth, subject to the terms hereof and compliance by SWI with all applicable export and legal regulations and laws relating to the export of the Licensed Products. No less than thirty (30) days prior to distribution outside of North America, the European Union, Australia, or Japan, SWI will notify ISI, via certified mail, of its intention to distribute in each given territory, and ISI will then have fifteen (15) days after receipt of such notice in which to register any objection to such distribution in writing to SWI, setting forth the specific basis of such objection, which basis may only relate to the state of intellectual property protection in the subject territory. If no objection Is received in a timely fashion, then ISI will waive any such objection. If an objection is timely registered, then SWI shall have ten (10) days in which to provide its response to the objection, ensuring that reasonable legal protections are available for the intellectual property of the parties in such territory. ISI shall not fall thereafter promptly to grant its consent to the distribution without good reason or cause.
2.3.3 Effectiveness of Licenses Upon Payment. The rights and licenses granted under subparagraphs 2.1.1 through 2.1.5 shall only become effective upon ISI's receipt of the Initial Payment as described in Section 3.1,
2.3.4 No Transfer. The rights and licenses granted herein are not transferable or assignable, except (a) as expressly provided for in Section 10.14 of this Agreement, or (b) as agreed to in writing by ISI.
2.4 License to Marketing Material. ISI grants SWI the exclusive license to reproduce and use the Marketing Material under any copyrights or trademarks that ISI may have in the Marketing Material.
2.5 Limitations. Notwithstanding anything else to the contrary in this agreement, SWI has no right or license with respect to any ISI intellectual property including, without limitation patents and copyrights, not existing at the execution of this agreement.
2.6 Term of License. The licenses granted herein shall continue until the termination of this Agreement pursuant to Section 9. Notwithstanding anything in this Agreement to the contrary, no license granted herein with respect to any copyright or patent with respect to any such technology shall continue in effect beyond the period of time that the legal rights of ISI, or ISI's successors or assigns, as the case may be, remain valid under the respective copyright and/or patent. To the extent a licensing right granted or payment obligation under this Agreement provides for continuation beyond the period of time that the legal rights of a designated licensor remain valid under a given copyright or patent, the parties agree that such continued payment obligation shall not include any payment obligation with respect to such expired rights, but the license rights and payment obligations shall continue to apply with respect to all remaining technical intellectual property rights granted herein In accordance with the terms hereof.
Section 3. Payments
3.1 Initial Payment. SWI agrees to deliver to ISI payment of
(a) One Hundred Thousand Dollars ($100,000) and
(b) Two Hundred Ninety Seven Thousand Five Hundred (297,500) shams of SWI's common stock which SWI hereby represents and warrants as comprising at least one and one quarter percent (1.25%) of the number of outstanding shams of SWI, computed on a fully diluted basis. Said shares will be issued pursuant to Rule 144 of the Act.
3.2 Initial Payment Schedule. The Initial Payment is due on or before March 31, 2000.
3.3 Additional Payment. SWI agrees to deliver to ISI a payment of One Hundred Fifty Thousand Dollars ($150,000), In addition to the Initial Payment, payable on May 15, 2000.
3.4 Non-Refundable Payment. All payments hereunder are nonrefundable, non-assessable and fully earned when delivered to ISI and not subject to any right of set-off.
3.5 Payment Method.
3.5.1 Share Payments. SWI shall take all such actions as are
required to transfer shares of SWI Common Stock pursuant to Section 3.1
(b) hereof to ISI on the corporate books of SWI and further remit SWI
share certificates for all such shares to ISI at its address contained
in Section 10.13 by means of certified mail.
3.5.2 Dollar Payments. SWI shall remit all dollar payments due to ISI hereunder so that ISI receives such amount according to the following Instructions or other instructions as may be provided by ISI:
Account Name: Iterated Systems, Inc.
Account Number: 3256546914
Bank Name: Bank of America
ABA Number 061000052
Special Instructions: Please Notify Susan Settle @ 404-264-
8000 upon receipt.
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3.6 Taxes. All payments set forth in this Section are exclusive of taxes. SWI shall be responsible for all taxes, levies and assessments relating to the exercise of its rights, licenses and obligations hereunder, including but not limited to, sales and use taxes. Both ISI and SWI shall be governed in their actions in various worldwide jurisdictions by the relevant tax laws In each such jurisdiction, and no liability relating to the application of such tax laws shall exist from one party hereto the other. Not withstanding the forgoing, ISI is responsible for any United States or Georgia corporate income taxes or tax liability related to the receipt of the $250,000 license fee set out herein.
3.7 Voting Rights. SWI represents and warrants that all shares of Common Stock which ISI receives under this Agreement shall have voting rights as favorable as any granted to any other shareholder of SWI Common Stock.
3.8 Shares Fully Paid. SWI represents and warrants that all shares of Common Stock which ISI receives under this Agreement shall be duly authorized, validly issued in compliance with all applicable securities laws, pursuant to Rule 144 of the Act, and shall be outstanding, fully paid and non-assessable and not subject to preemptive rights.
3.9 Piggy-back Registration Rights. If SWI does a PO, SWI shall use its best efforts to file and have declared effective a registration statement in compliance with the ACT which includes all shares of Common Stock which ISI receives under this Agreement.
3.10 Registration Rights. At the time of any SWI PO, despite using its best efforts. Should SWI fail to file and have declared effective a registration statement in compliance with the ACT which includes all shares of Common Stock which ISI receives under this Agreement, then SWI should use its best efforts to file and have declared effective a registration in compliance with the ACT which includes all shares of Common Stock which ISI receives under this Agreement, if SWI should file a subsequent registration statement in compliance with the ACT, which covers any shares Of SWI's Common Stock.
3.11 Anti-Dilution. The shares given by SWI to ISI under this Agreement shall be subject to the following anti-dilution provision. At such times as the number of outstanding shares of Common Stock of SWI, computed on a fully-diluted basis, increases, then SWI shall Issue additional shares of Common Stock to ISI, at no cost to ISI, so that the total number of shares of SWI Common Stock which SWI grants to ISI under this Agreement Is 1.25% of the then Increased number of outstanding shares of Common Stock of SWI, computed on a fully-diluted basis. This provision shall terminate after the last day of the first sixty (60) day period during which: (i) the Common Stock of SWI is traded on NASDAQ or American Stock Exchange or New York Stock Exchange and (11) the Market Capitalization of SWI does not fall below fifty million dollars ($50,000,000) and (iii) Two Hundred Ninety Seven Thousand Five Hundred (297,500) shares of Common Stock which ISI receives under this Agreement become free trading 144 stock or are covered by a registration statement In compliance with the ACT and (1v) the share price which shares of SWI are traded on NASDAQ, the American Stock Exchange or the New York Stock exchange does not fall below $2.10. This provision shall also terminate if ISI sells or disposes of the shares of Common Stock which ISI receives under this Agreement. For the purposes of this Agreement, the Market Capitalization of SWI during a period is computed by multiplying (A) the smallest number of shares of SWI outstanding during the period by (B) the lowest price at which shares of SWI are traded on NASDAQ or American Stock Exchange or New York Stock Exchange.
3.12 Cash Payment Allocation The Two hundred and fifty thousand dollars ($250,000) cash payment of the Section 3 payment shall be deemed a license fee for the use, as provided for herein, of the ClearVideo Source Code. The remainder of the payments shall be deemed as payment for the exclusivity as provided for in Section 2.2.
4. Obligations
4.1 ISI Obligations
4.1.1. Provision of Source Codes. ISI agrees to provide ClearVideo Source Code to SWI upon ISI's receipt of the Initial Payment of Section 3.1 as follows:
(a) SWI, at its own expense, shall provide a personal computer meeting the technical specifications of Exhibit A to ISI,
(b) ISI shall load the ClearVideo Source Code and corresponding run-time encoders and decoders onto the personal computer described in 4.1.1 (a)
(c) ISI and SWI shall agree upon a date to meet at ISI'S location and on such date, ISI shall deliver to the SWI representative(s) the personal computer installed with the ClearVideo Source Code and demonstrate that the source codes can be compiled into run-time versions.
(d) During the thirty (30) days following the date agreed to in (c) above, ISI agrees to provide email support of SWI.
(e) ISI shall provide, on removable media, a back-up copy of the software loaded under subparagraph 4.1.1(b) above.
4.1.2 No Support Except as provided for in Section 4.1.1, ISI shall have no obligations of support, maintenance or training to SWI, unless in their sole discretion, ISI and SWI agree in writing to the terms and conditions of such obligation. ISI shall have no obligation to support SWI I s licensees.
4.2 SWI obligations.
4.2.1 Support. SWI agrees to use commercially reasonable efforts to support all users of its products and services licensed hereunder.
4.2.2 User License. With respect to any distribution to End Users permitted to SWI under this Agreement, SWI agrees that such distribution shall be accompanied by a license agreement ("End User License") which: (a) prohibits further copying, disassembly, decompilation or reverse engineering; (b) includes a statement substantially similar to the following: "Product(s) provided under this agreement contains portions of program code and other intellectual property rights of third parties and each such third party shall be entitled to enforce this license as an intended third party beneficiary. ALL SUCH THIRD PARTIES (INCLUDING ITERATED SYSTEMS, INC.) EXPRESSLY DISCLAIM ALL WARRANTIES AND CONDITIONS WITH RESPECT TO THE USE OF SUCH PRODUCTS, INCLUDING (WITHOUT LIMITATION) ANY WARRANTIES OR CONDITIONS OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. In no event shall any such third party, including Iterated Systems, Inc., have any liability whether direct, indirect, Incidental, consequential, statutory, exemplary or otherwise to Licensee arising in connection with this License, the use of the Product(s), or the inability to use Product(s); (c) includes a provision that terminates the End User License and right to maintain possession of the product and program code upon End User, a breach of any material provision of such agreement; (d) reserves to licensors all rights, title and interest in and to program code; and (e) restricts the transfer of the product only to third parties who agree to be bound by the license terms set forth in this Section 4.2.2 In addition, SWI agrees that the End User License will not (I) impose any liabilities upon ISI, (Ii) grant any warranty to the End User on behalf of ISI.
4.2.3 Distribution to U.S. Government. When information or products are provided to the United States federal governmental authorities as users or customers, SWI will add a legend substantially as follows:
The material Is confidential property of Iterated Systems,
Inc., as to which affixing the following notice is not an
admission of the intention to, or fact of, publication. COPYRIGHT
ITERATED SYSTEMS, INC. ALL RIGHTS RESERVED. PATENT(S) PENDING,
ITERATED SYSTEMS. U.S. GOVERNMENT RESTRICTED RIGHTS. The programs
within, accompanying documentation and/or other products are
provided with RESTRICTED RIGHTS. Use, duplication or disclosure by
the Government Is subject to restrictions as set forth in
subparagraph (c)(1) the Rights in Technical Data and Computer
Software clause at DFARS 252.227-7013 or subparagraph (c)(1) and
(2) of the Commercial Computer Software B Restricted Rights at 48
CFR 52.227-19 of FAR, or Clause 18-52.227-86(d) of NASA Supplement
to the FAR, as applicable. Contractor/manufacturer is Iterated
Systems, Inc. 3525 Piedmont Road, Seven Piedmont Center, Suite
600, Atlanta, Georgia, 30305."
4.2.4 Review of Records. SWI shall maintain accurate records regarding use, licensing and distribution permitted under this Agreement. ISI shall have the right, upon reasonable notice, to engage a certified public accountant ("CPA") to review such records, and records of SWI's Common Stock, during SWI's normal business hours, providing however that such reviews shall be separated by at least six months. Such CPA shall agree in writing to maintain the confidentiality of SWI records according to the terms of Section 5.1 and 5.2.
4.2.5 Export Compliance. SWI acknowledges and understands that ClearVIdeo Source Code contains technical data and is therefore subject to United States export control regulations and regulations of countries into which any products may be imported ("Export/Import Regulations"). SWI shall comply with all such Export/import Regulations and obtain at its expense any and all licenses, permits and regulatory approvals required by any and all governmental authorities and agencies having jurisdiction over export, re export and import of technical data. To the extent permitted by applicable law, SWI will defend, indemnify, and hold ISI and its officers and directors harmless from and against any and all damages and expenses, including legal and professional fees, Incurred directly or indirectly as a consequence of any failure of SWI to comply with any such Export/Import Regulations. This obligation will survive termination of this Agreement.
4.3 Joint Obligations.
4.3.1 ISI and SW I will promptly notify the other party hereto of any and all known infringements or misappropriations or known attempted infringement or misappropriation of any ISI Technology licensed hereunder.
4.3.2 ISI reserves the right to Initiate legal action against any party allegedly committing infringement or misappropriation of any ISI Technology. At the request and cost of ISI, SWI shall provide reasonable assistance to ISI in connection therewith.
4.3.3 SWI reserves the right to pursue and initiate legal action for infringements or misappropriation of ClearVideo If ISI refuses or fails to proceed. In such a case and at the request and cost of SWI, ISI will provide assistance at reasonable costs to SWI in connection therewith.
Section 5. Confidentiality
5.1 Terms of Confidentiality. ISI and SWI agree to treat as confidential all Confidential Information of the other party, not to disclose or use such Confidential Information except as expressly permitted in this Agreement, and to ensure that only those employees having a need to know such Confidential Information shall be privy to such Confidential Information. All such employees shall be required in writing to abide by the obligations of this Section 5. Unless autho6zed in writing, each party shall not disclose the other party, s Confidential Information to any third party. Each party shall promptly notify the other of any actual or suspected misuse or unauthorized disclosure of Confidential Information. With regard to Confidential Information deemed a trade secret under applicable law, the obligations in this section shall continue for so long as such Information constitutes a trade secret. With regard to all other Confidential Information, the obligations in this section shall continue for the term of this Agreement and for a period of five (5) years thereafter.
5.2 Exceptions to Confidentiality Restrictions. Notwithstanding the above, Confidential Information shall not include any information which 1he party receiving such information can demonstrate:
(i) was in the public domain at the time it was disclosed, or has entered the public domain through no fault of the parties;
(ii) was known to both parties, without restriction, at the time of disclosure, as demonstrated by files or documents in existence at the time of disclosure;
(iii) was publicly disclosed with the prior written approval of the party whose Confidential Information was disclosed;
(iv) was Independently developed without any use of the Confidential Information, as demonstrated by evidence created at the time of such independent development;
(v) became known to both parties, without restrictions, from a source other than each party or any of its employees, without breach of this Agreement and otherwise in a manner not in violation of each party's rights;
(vi) was disclosed pursuant to the order or requirement of a court, administrative agency, or other governmental body; provided however, that each party shall provide prompt, written, and sufficient advance notice thereof to the other party to enable such other party to seek a protective order or otherwise prevent or restrict such disclosure; or
(vii) was disclosed to the extent required by law or regulation, including applicable securities, corporate and other laws or regulations of applicable jurisdictions.
5.3 Identification of Certain Confidential Information. SWI and ISI agree that this Agreement is Confidential Information of both ISI and SWI, except however, the parties agree to issue a press release announcing this Agreement within six (6) months of signing this Agreement. SWI and ISI agree riot to either (a) issue other press releases mentioning the name of the other party without the written permission of such other party, except as Is required under Section 5.2(vii); or (b) use the name of the other party in sales and marketing literature. SWI and ISI further agree that (a) all confidential information disclosed between the parties covered by their Confidentiality and Non-Circumvention Agreement shall be considered as Confidential Information under this Agreement and (b) the Confidentiality and Non-Circumvention Agreement signed on January 22, 2000 is terminated as of the execution date of this Agreement.
Section 6. Warranty and Indemnification
6.1 Warranty Disclaimer. Except as otherwise expressly provided herein: (a) SWI ACKNOWLEDGES AND AGREES THAT ANY CLEARVIDEO SOURCE CODE AND ALL OTHER MATERIAL WHICH MAY BE PROVIDED BY ISI HEREUNDER ARE PROVIDED "AS IS". (b) ISI MAKES NO EXPRESS OR IMPLIED WARRANTIES OR CONDITIONS To SWI WITH RESPI~CT TO CLEARVIDEO SOURCE CODE ANY DOCUMENTATION THERETO, AND ANY SERVICES PROVIDED HEREUNDER OR OTHERWISE REGARDING THIS AGREEMENT, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY AND THE IMPLIED WARRANTY OR CONDITION OF FITNESS FOR A PARTICULAR PURPOSE. WITHOUT LIMITING THE FOREGOING, SWI AND ISI ACKNOWLEDGE THAT ISI DOES NOT WARRANT THE QUALITY OR ACCURACY OF THE DELIVERABLES.
6.2 Warranty.
(a) ISI makes no warranty that the ClearVideo Source Code does not infringe upon the patents and copyrights of others, except ISI warrants that as of the date hereof it has no present knowledge of any such patent or copyright infringement or of any claim of such patent or copyright infringement.
(b) ISI warrants that it will deliver ClearVideo Source Code which (a) compiles to a run-time encoder and run-time decoder as described in Exhibit B and (b) is the latest complete version of ClearVideo.
6.3 Indemnification. In addition to any other obligations of indemnification set forth in this Agreement, SWI agrees to the following obligations of indemnification:
6.3.1 Indemnification by SWI.
(a) If notified In writing within ten (10) calendar days of any claim of infringement against ISI alleging that SWI's manufacture, use, sale or other disposition of ClearVideo Source Code SWI-Enhancements and products or services based thereon is an Intellectual Property Infringement, and such allegation is based on (1) designs, modifications or selections made by SWI, or (ii) products or services created or manufactured by SWI or the use of the ClearVideo, Source Code or SWI-Enhancements in combination with other products or technology not furnished by ISI, or (ill) use of the ClearVideo Source Code or SWI-Enhancements except as authorized herein, then SWI will defend such action at its expense and will pay, when due, the costs and damages awarded against ISI in such action.
(b) SWI agrees to defend, indemnify and hold ISI harmless from all liabilities, losses, costs and damages (including reasonable attorneys fees) arising from any actions or omissions on the part of SWI in distributing, marketing and sublicensing of any products created from ClearVideo Source Code, or SWI-Enhancements or any statements, claims or warranties made by SWI in connection therewith.
6.3.2 Indemnification by ISI. If notified in writing within ten (10) calendar days of any claim of infringement against SWI alleging that exercise of its rights with respect to the ClearVideo Source Code as set forth herein Is an Intellectual Property Infringement, and such allegation Is based solely and directly on the ClearVideo Source Code then ISI will defend, indemnify and hold SWI harmless from liabilities, losses, costs and damages (including reasonable attorney's fees) arising out of such action. Notwithstanding the foregoing, ISI shall have no obligation under this Section 6.3.2 for any Infringement attributable to (a) designs, modifications or selections made by SWI, or (b) products or services created or manufactured by SWI or the use of the ClearVideo Source Code or SWI Enhancements in combination with other products or technology not furnished by ISI or (c) use of the Clear Video Source Code or SWI-Enhancements except as authorized herein.
6.3.3 Procedure. Indemnification set forth herein is contingent upon the party providing the Indemnification (the "Indemnifying Party") having sole control of the defense of such action, and all negotiations and agreements for its settlement or compromise of any claim above. No settlement or compromise shall be made by the Indemnifying Party without the prior consent of the party to be indemnified (the "Indemnified Party"), which shall not be unreasonably withheld or delayed. The Indemnified Party agrees to cooperate with the Indemnifying Party in the defense of any such action and the Indemnifying Party agrees to reimburse the Indemnified Party
for any reasonable costs associated with such cooperation. The Indemnified Party at its own expense shall be permitted to participate in such defense, subject however to the control thereof by the Indemnifying Party.
Section 7. Limitation of Liability
7.1 Limitation on SWI Damages. SWI further acknowledges and agrees that in no event will ISI, its affiliates or any of their respective officers, directors, employees, shareholders or representatives be liable to SWI or any third party for any, special, general, indirect, incidental, punitive or consequential damages, in any way pertaining to this Agreement or the rights or obligations created under this Agreement, even if ISI has been notified of the possibility or likelihood of such damages occurring.
7.2 Limitation on ISI Damages. ISI acknowledges and agrees that in no event will SWI, its affiliates or any of their respective officers, directors, employees, shareholders or representatives be liable to ISI or any third party for any special, general, indirect, Incidental, punitive or consequential damages in any way pertaining to this Agreement or the rights and obligations created under this Agreement, even if SWI has been notified of the possibility or likelihood of such damages occurring.
7.3 Liability Cap. In no event shall ISI or SWI be liable to the other under this Agreement for any sums in excess of those cash sums paid by SWI to ISI under this Agreement (the "Liability Cap"). Each party shall promptly notify the other of the allegation by a third party of liability on the part of such party under this Agreement. This Liability Cap shall survive even if any of the remedies set forth in this Agreement fall of their essential purpose. The limitations of liability set forth in Section 7 shall not apply to any indemnification amounts arising under Section 6.3 above or any amounts arising from a breach of Section 2 or 5.
Section 8. Proprietary Rights
8.1 Reservation of Rights. SWI acknowledges and agrees that, except for the licenses granted herein, ISI shall retain all right, title and Interest in and to the ISI Technology including, but not limited to the ClearVideo Source Code and portions thereof, including but not limited to its worldwide patents, patent applications, copyright, trademarks, trade secrets and other intellectual property rights and Interests therein. This Agreement does not provide SWI with title or ownership of the ClearVideo Source Code or Technical Material but only a license to use the same in accordance with the provisions of the Agreement. SWI agrees that, except for such license, it shall not assert any right title or interest in or to the ClearVideo Source Code or portions thereof. SWI will include and not remove any proprietary and copyright notices and legends included by ISI in its products licensed hereunder. This Agreement does not restrict ISI from developing licensing or distributing its technology except as expressly provided for in Paragraph 2.2. SWI agrees that it has no rights or
licenses with respect to, and that ISI is under no restrictions with respect to, ISI's technology other than ClearVideo Source Code including but not limited to ISI's iv Source Code, modifications of iv Source Code or run-time versions of iv Source Code, ISO's real-time low bitrate codec (called ClearVideoLive) or its modifications or run-time versions.
8.2 Equitable Remedies. The parties acknowledge that each provision in this Agreement providing for the protection of copyrights, Confidential Informational and other proprietary rights is material to this Agreement. The parties acknowledge that any threatened or actual breach of such rights shall constitute immediate, irreparable harm to the non-breaching party for which monetary damages is an inadequate remedy and for which equitable remedies may be awarded by a court of competent jurisdiction without requiring the non-breaching party to post any bond.
Section 9 Term and Termination
9.1 Term. The term of this Agreement will commence once the Agreement has been signed by an authorized representative of each party and shall continue until terminated by mutual agreement of the parties or as set forth herein.
9.2 Termination.
(a) Either party may terminate this Agreement if the other party commits a material breach, other than as regards the payments of Section 3 of this A6reement which is not cured by the breaching party within sixty (60) calendar days of the receipt of written notice of such breach.
(b) Any dispute, except as regards the payments of
Section 3 of this Agreement, among the parties as to whether a
material breach has been committed or whether a material breach
has been cured, shall be settled according to the provisions of
Section 10.7, prior to the effectiveness of any termination under
(a) above.
Notwithstanding the foregoing, ISI may terminate this Agreement by
written notice without further opportunity to cure, if ISI does not
receive either the One hundred thousand dollar ($100,000) payment of
Section 3.1 on or before March 31, 2000, or the Section 3.1 (b) payment
within (10) days of the date indicated in Section 3, or the One hundred
and fifty thousand dollar ($150,000) payment of Section 3.3 on or
before May 15, 2000.
9.3 Effect of Termination. Upon termination for any reason other
than ISI's breach, (a) all licenses will be terminated and cease
immediately; (b) SWI shall promptly return to ISI the ClearVideo Source
Code and all copies thereof in its possession, (c) ISI shall have no
obligations under either Section 2 or Section 4 of this Agreement, and
(d) each party shall promptly return to the other such party's
Confidential Information and copies thereof.
9.4 Survival, Upon termination of this Agreement, Sections 2.3, 3, 5, 6.1, 6.3, 7, 8. 9.3, 9.4 and 10 shall survive in full force and effect.
Section 10. General Terms
10.1 Independent Principals. ISI and SWI are independent principals in all relationships and actions under and contemplated by this Agreement. This Agreement shall not be construed to create any employment relationship, partnership, joint venture or agency relationship between the parties or to authorize any party to enter into any commitment or agreement binding on the other party. Each party is responsible for its own costs in exercising its rights and obligations under this Agreement.
10.2 No Waiver. Any failure by either party to detect or protest a breach of any term or condition of this Agreement shall not constitute a waiver or impairment of any such term or condition, or the right of such party at any time to seek such remedies as may be available for any breach or breaches of such term or condition. A waiver, including a waiver of this provision, will be effective only if given in writing signed by an authorized officer of such party.
10.3 Severability. If any provision of this Agreement is held invalid, Illegal or unenforceable by a tribunal or court of competent jurisdiction, such Invalidity shall not affect the enforceability of any other provisions contained In this Agreement, and the remaining portions of this Agreement shall be valid and enforceable to the fullest extent permitted by applicable law.
10.4 Force Majeure. Except for any payment and delivery obligations hereunder, no party shall be In default of any obligation hereunder if such failure Is due to causes beyond such party's reasonable control; and such party acts diligently in attempting to remedy the cause; and such party promptly gives written notice to the other party of the event of force majeure. In any such event, such party shall be given an additional time to perform equal to the delay caused directly by such event.
10.5 Entire Agreement. This Agreement constitutes the entire Agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, proposals, representations, discussions, and under-standings, whether verbal or written, including the Confidentiality and NonCircumvention Agreement which is hereby terminated in all respects. This Agreement may be amended only by a subsequent writing signed by both parties.
10.6 Non-Solicitation. Each party acknowledges and agrees to the other that during the term of this7kgreement and for one (1) year thereafter, it will not solicit any employee of the other party, or any person who has been an employee within the prior applicable six month period, for the purposes of employment, independent contractor duties or other work relationship. The forgoing restrictions may be waived in writing.
10.7 Dispute Resolution Any dispute arising out of or relating to this Agreement which cannot be amicably resolved by the parties, shall be settled before three (3) arbitrators, under the Rules of Conciliation and Arbitration of the International Chamber of Commerce, the said arbitrators to be appointed by said rules. Judgment upon the award rendered by the arbitrators may be entered into any court having jurisdiction thereof. A dispute shall be deemed to have arisen when either party notifies the other party in writing at the addresses set forth in Paragraph 10. 13 of such dispute.
10.8 Governing Law. This Agreement shall be governed by, construed and interpreted In accordance with the laws of the State of Georgia, without regard to the principles of conflicts of law thereof.
10.9 Dollars. All amounts referencing Dollars shall mean United States currency.
10.10 Days. All references to days and Days are calendar days unless specified otherwise.
10.11 Headings. Headings used in this Agreement are for convenience only and shall not be considered in construing or interpreting this Agreement.
10.12 Binding Effect. This Agreement and the transactions provided for herein shall be binding upon and inure to the benefit of the parties, their legal representatives, and their permitted transferees, successors and assigns.
10.13 Notices. All communications required or permitted under this Agreement shall be In writing and either mailed first class, postage pre-paid, sent by reputable overnight delivery services (with request for written confirmation of receipt), hand-delivered to the parties at the addresses shown below, or at such other addresses as one party may notify the other of from time to time:
If to ISI: President and CEO
John Bacon
Iterated Systems, Inc.
3525 Piedmont Road
Building Seven, Suite 600
Atlanta, Georgia 30305
If to SWI: Ryan Corley, President
Southern Wireless, Inc.
The Penthouse
403 South Cheyenne Avenue
Tulsa, Oklahoma 74104
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10.14 No Assignment. Neither party shall assign, transfer or pledge this Agreement, in any manner without the prior written consent of the other party, which consent shall not be unreasonably withheld, except as part of a merger, reorganization or acquisition of all or substantially all of the assets or stock of the assignor, and upon the written agreement of the assignee to assume all the obligations of the assignor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives.
SOUTHERN WIRELESS, INC. ITERATED SYSTEMS, INC.
BY: /s/ Ryan Corley BY: /s/ Alan Sloan Printed Name Ryan Corley Printed Name Alan Sloan Position: President Position: Executive Vice President Date: 3-17-2000 Date: 3-17-2000 |
Address: The Penthouse Address: 3525 Piedmont Road
403 South Cheyenne Building Seven, Ste 600
Tulsa, OK 74104 Atlanta, GA 30305
EXHIBIT LIST
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Exhibit A PC Specifications
A personal computer with a Pentium 111733 MHz processors with Microsoft NT 4.0 Service Pack 4 installed and with the following hardware installed:
a. 40X CD ROM/DVD
b. 32 MB 3D Graphics Card
c. 512 MB RAM
d. 20 GIG LVD SCS13 RAIDO Hard Drive
e. Adobe Premier 5.1
Exhibit B ClearVideo Description
ClearVideo is computer software that runs on Pentium processors inside personal computers which have compatible configurations including compatible memory, graphics and input/output resources. ClearVideo includes both encoder and decoder functionality. The encoder is not a stand-alone program but requires a compatible video editor such as Adobe Premier 4.0. The ClearVideo encoder encodes video only, but a compatible video editor and personal computer environment will provide the ability to encode audio as well. The ClearVideo Source Code Will compile to version 1.2 provided to SWI for evaluation prior to the execution of this Agreement
Exhibit C Confidentiality and Non-Circumvention Agreement
CONFIDENTIALITY AND NON-CIRCUMVENTION AGREEMENT
THIS AGREEMENT, entered into on the date of the signature of the parties hereto as entered below, is by and between Iterated Systems, Inc., ("ISI") a Georgia Corporation and two individuals, ("RCTO"), one which is Ryan Corley residing at P.O. Box 140021, Austin, Texas 78714 and the other of which is Timothy Hargreaves-Oliver residing at 1612 So. Boston Avenue, Townhome 1, Tulsa, Oklahoma 74119.
IT IS THE INTENTION OF THIS AGREEMENT TO PROVIDE ALL PARTIES HERETO EQUAL PROTECTION OF CONFIDENTIAL MATERIALS AND BUSINESS CONTACTS THAT MAY BE DISCLOSED DURING EVALUATION OF POTENTIAL BUSINESS OPPORTUNITIES.
1. The parties hereto may furnish and disclose confidential nonpublic information and business contacts to each other to provide assistance in evaluating and financing possible business arrangement involving RCTO and ISI. As a condition to each party's furnishing such information to the other party hereto, the party, furnishing such information shall be hereinafter referre8 to, with respect to such information, as the "Disclosing Party" and the party receiving such information shall be hereinafter referred to, with respect to such information, as the "Receiving Party". Each party agrees, as set forth below, to treat any and all information (herein collectively referred to as the "Evaluation Material") so provided (whether prepared by the Disclosing Party or its agents or advisors or otherwise) which is furnished to the Receiving Party by the Disclosing Party In accordance with the provisions of this Agreement and to take or abstain from taking certain other actions herein set forth.
2. The term "Evaluation Material" includes all information, whatever its source, provided by Disclosing Party to Receiving Party Including but not limited to, computer software and related documentation in all forms and on whatever media, all Information about the Disclosing party's projects, present and ongoing research, developments, processes, technologies, and inventions, as well as its methods of engineering, financing, manufacturing, producing, purchasing, marketing and selling of the Disclosing Party's products, processes, services, and technologies; and shall include all business contacts revealed.
The term "Evaluation Material" also Includes all analyses, compilations, studies and other materials prepared by the Receiving Party or its directors, officers, employees, agents. advisors and representatives of advisors (collectively, the "Representatives") containing, based on or reflecting any Information furnished by the Disclosing Party or any of Its Representatives.
<PAG> 84
Not withstanding the definition above, the term "Evaluation Material" does not include information which (I) is already in the possession of the Receiving Party, provided that such Information is not known by such Receiving Party to be subject to another confidentiality agreement with or other obligation of secrecy to the Disclosing Party or third party, or (H) is or becomes generally available to the public other than as a result of a disclosure by the Receiving Party or any of its Representatives in violation of this Agreement, or (111) becomes available to the Receiving Party from a source other than the Disclosing Party or Its Representatives, provided that such source is not known by such Receiving Party to be in breach of a confidentiality agreement with or other obligation of secrecy to the Disclosing Party or a third party.
3. The parties hereby agree that the Evaluation Material will be used solely for the purpose of evaluating a possible business arrangement involving RCTO and ISI and that such information will be kept confidential by such Receiving Party; provided, however, that (1) any such information may be disclosed to officers, directors, employees and other representatives of Receiving Party who have an existing legal obligation to maintain the confidentiality of Disclosing Party's Evaluation material and where such obligation Is written or is implied by operation of law, and (11) any such information may be disclosed to third parties who signed a written agreement materially the same as this agreement and such written agreement Is received by Disclosing Party prior to such disclosures, (III) any disclosure of such information may be made to which the Disclosing Party consents in writing and (Iv) any disclosures of such Information may be made as otherwise required by law in the written opinion of counsel to the Receiving Party (including, without limitation, pursuant to any federal or state securities laws or pursuant to any legal, regulatory or legislative proceedings) or as contemplated by the following sentence (the "Legal Exception"), In the event that the Receiving Party or anyone to whom such Receiving Party supplies the Evaluation Material receives a request to disclose all or any part of the information contained in the Evaluation Materials under the terms of a subpoena, order, civil investigative demand or similar process or other oral or written request issued by a court of competent jurisdiction or by a federal, state or local, foreign or domestic, governmental or regulatory body or agency, such Receiving Party agrees to the extent practicable to: (A) promptly notify the Disclosing Party of the existence, terms and circumstances surrounding such request; (B) consult with the Disclosing Party on the advisability of taking legally available steps to resist or narrow such request; and, (C) only disclose such information after complying with clauses (A) and (B) and exercising reasonable effort, if so requested by the Disclosing Party and at the Disclosing Party's sole expense, to obtain, to the extent practical, an order or other reliable assurance that confidential treatment will be accorded to such portion o( any disclosed information which the Disclosing Party so designates. The Receiving Party shall be responsible for ensuring that all persons to whom the Evaluation Material is disclosed under this Agreement shall keep such information confidential and shall not disclose or divulge the same to any unauthorized person.
4. In consideration of the disclosure referred to In Paragraph 1 hereof, the Receiving Party agrees that the Evaluation Material shall be kept strictly confidential for a period of ten (10) years from the date of signature of this Agreement and shall not be sold, traded, published, used or otherwise disclosed to anyone In any manner whatsoever, including by means of photocopy or reproduction, without the Disclosing Party's written consent, except as provided in paragraph 5 below.
5. The Receiving Party hereby acknowledges that it Is aware, and that it will advise its Representatives who are informed as to the matters which are subject to this Agreement, that the United States and certain foreign securities laws prohibit any person who has received from an issuer material, nonpublic Information concerning the matters which are the subject of this Agreement from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances In which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
6. This Agreement and as well as any fact that negotiations are taking place under this Agreement shall be treated as Evaluation Material of both parties under this Agreement. Notwithstanding this Agreement, each party shall be allowed to disclose with any that they are negotiating with an unnamed third party regarding the exclusive use of technology, Including possible limitations of such use, provided such third party is bound to maintain the confidentiality of such disclosure by a written confidentiality agreement.
7. For a two-year period commencing on the date hereof each of RCTO and ISI shall not solicit to employ any person who is, at the time of such solicitation, an employee of the other or any subsidiaries of the other.
8. The Evaluation Material shall remain the property of the Disclosing Party and the Receiving Party agrees to promptly redeliver to the Disclosing Party upon request all written or otherwise tangible Evaluation Material provided to it by the Disclosing Party or its Representatives and will not retain any copies, extracts or other reproductions in whole or In part of such written or otherwise tangible material. All other Evaluation Material and documents, memoranda, notes, computer discs or files or tapes, other writings and otherwise tangible materials whatsoever prepared by the Receiving Party or its Representatives based upon the information in the Evaluation Material which were not provided to the Receiving Party or Its Representatives shall be destroyed, and such destruction shall be certified in writing to the Disclosing Party by an authorized officer supervising such destruction.
9. In the event the parties hereto elect to participate in a business arrangement, then this Agreement shall be replaced with such terms and conditions as are contained in the written agreement establishing such arrangement,
10. The Disclosing Party hereby represents and warrants that it has the right and authority to disclose the Evaluation Material to the Receiving Party. The Disclosing Party, however, makes no representations or warranties, expressed or implied, as to the quality, accuracy, and completeness of the Evaluation Material disclosed hereunder, and the Receiving Party expressly acknowledges the inherent risk in development of new technologies. The Disclosing Party, its Affiliated Companies, their officers, directors and employees shall have no liability whatsoever with respect to the use or reliance upon the Evaluation Material by the Receiving Party or by any further persons or parties referred to in Paragraph 5 hereof.
11. The Receiving Party believes it is free to enter into this Agreement and perform in accordance therewith. If, however, the Receiving Party finds, upon and as a result of receipt of Evaluation Material from the Disclosing Party, that a conflict appears likely to occur because of Receiving Party's previous and continuing obligations or commitments to other parties, the Receiving Party will promptly so advise the Disclosing Party in writing and, unless otherwise then agreed by the parties, will return to the Disclosing Party all documents and other materials containing Evaluation Material without copying or summarizing them in any way and immediately cease proceeding with the evaluation contemplated by this Agreement.
12. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Oklahoma, without regard to the conflict of laws principles thereof. Venue shall reside in the City of Tulsa, County of Tulsa, State of Oklahoma, United States of America. Any dispute arising out of or relating to this Agreement, including any question regarding its existence, validity or termination, which cannot be amicably resolved by the Parties, shall be settled before three (3) arbitrators, under the Rules of Conciliation and Arbitration of the International Chamber of Commerce, the said arbitrators to be appointed in accordance with said Rules. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. A dispute shall be deemed to have arisen when either Party notifies the other Party in writing at the address as first set forth herein to that effect.
13. It Is further understood and agreed that the execution of this Agreement creates only the relationship recited herein and convoys no right to use any of the Evaluation Material disclosed for any purpose whatsoever beyond the contemplated evaluation without the express written authorization of the Disclosing Party. Termination of this Agreement shall not in itself operate to terminate obligations of the parties arising under the Agreement. Nothing contained herein is intended to confer upon the Receiving Party any right whatsoever to the Disclosing Party's technologies.
14. Each party hereto acknowledges and agrees that money damages would not be a sufficient remedy for any breach of this Agreement. RCTO and ISI, as the case may be, shall be entitled to equitable relief Including, without limitation, injunction, and specific performance, as a remedy for any breach and that the party hereto which is in breach
hereby shall not oppose the granting of such relief. Such remedy shall not be deemed to be the exclusive relief for a breach of this Agreement, but shall be in addition to all other remedies available to a party hereto for ail damages, costs and expenses (including reasonable attorneys' fees), Incurred by it in this regard.
15. Each party hereto agrees that unless and until a definite agreement with respect to any transaction referred to herein has been executed and delivered, neither it nor the other party hereto will be under any legal obligation of any kind whatsoever with respect to such transaction by virtue of this or any written or oral expression with respect to such a transaction by any of its Representatives, except, in the case of this Agreement, for the matters specifically agreed to herein.
16. No amendments, changes or modifications of this Agreement shall be valid except if the same are in writing and signed by a duly authorized representative of each of the parties hereto.
17. Each party hereto acknowledges and agrees that no failure or delay by the other party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other further exercise thereof or the exercise of any right, power or privilege hereunder.
18. This Agreement shall be binding upon the respective successors and assigns of the parties hereto and shall inure to the benefit of, and be enforceable by, the respective successors and assigns of the parties hereto. In addition, this Agreement shall Inure to the benefit of, and be enforceable by, each of the respective financial advisors of RCTO and ISI as to any portion of the Evaluation Material prepared by each such financial advisor.
19. Regarding business contacts disclosed by Disclosing Party to Receiving Party as Evaluation Material herein, Receiving Party agrees that, for a period of one (I)-year following the execution of this Agreement, It and its employees will not enter Into any business relationship regarding ISI's ViO and ClearVideo computer software with such business contact unless (a) Receiving Party has known such business contact prior to such disclosure or (b) mutually agreeable terms are negotiated, described In writing and signed by all parties hereto, These terms may include, but are not limited to cash compensation, royalty interests, equity shares, expenses or other compensatory arrangements.
20. Any notice, request, demand, or other communication required or permitted to be made under this Agreement shad be in writing and shall be delivered personally, sent by courier, sent by registered or certified mail or shall be sent by facsimile transmission. Any notice, request demand, or other communication will be deemed to have been given as of the date so delivered personally or sent by facsimile. Any such notice shall be deemed given when so delivered personally, sent by courier, sent by registered or certified mail or sent by facsimile transmission (and confirmed to have been received) to the address or
number set forth above each party's signature hereto (or to any other address or number subsequently furnished In writing by any party to the other party hereto, as the case may be, in accordance with this paragraph):
21. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal or unenforceable, the remainder of the provisions of this Agreement shall remain in full force and effect. The Parties hereto shall endeavor In good faith negotiations to replace any Invalid, Illegal or unenforceable provision with a valid, legal and enforceable provision, the effect of which comes as close as possible to that of the invalid, illegal or unenforceable provision.
22. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute the same Agreement.
24. This Agreement comprises the full and complete agreement of the parties hereto with respect to the disclosure of the Evaluation Material and supersedes and cancels all prior communication, understandings and agreements between the parties hereto, whether written or oral, expressed or implied.
25. This Agreement shall terminate ninety (90) days after its execution unless the term is extended by written agreement of the parties.
IN WITNESS WHEREOF, the duly authorized representatives of the parties have caused this Agreement to be executed on the date the last party has signed this Agreement below.
Timothy Hargreaves-Oliver Iterated Systems, Inc.
P. 0. Box 700514 3525 Piedmont Rd.,
Bldg. 7, Suite 600
Tulsa, Oklahoma 74170 Atlanta, Georgia, 30305
P 918-494-0004 P 404-264-0000
F 918-494-6663 F 404-264-8313
By: Ryan Corley Date By: Alan Sloan Date
Iterated Systems, Inc.
|
By: Timothy Hargreaves-Oliver Date
Exhibit D - Licenses issued by ISI which have not been terminated or expired for the use of ClearVideo Source Code Encoder
Exhibit E - ISI United States Patents
United States Patents
Patent No. Patent Title
4,941,193 Method & Apparatus for Image Compression By Iterated
Function System
5,065,447 Method & Apparatus For Processing Digital Data
5,347,600 Method & Apparatus for Compression & Decompression of
Digital Image Date
5,384,867 Fractal Transform Compression Board
5,430,812 Fractal Transform Compression Board - R80 Continuation
5,754,704 Method & Apparatus for Compression & Decompression of
Three Dimension Digital Data Using Fractal Transform
5,838,832 Method & System for Representing a Data Set with a Data
Transforming Function and Data Mask
5,717,788 Method & System for Analyzing Data
5,740,282 System & Method for Contractive Mapping
Resynchronization of a Data Transmission
5,721,543 System & Method for Modeling Discrete Data Sequences
5,867,603 Method for Transmitting Fractal Transform Data to
Support Different Compression/Decompression Designs
5,822,721 Method & Apparatus for Fractal-Excited Linear Predictive
Coding of Digital Signals
5,982,441 System & Method for Representing a Video Sequence
5,857,036 System & Method for Fractal Encoding of Data Streams
5,867,221 Method & System for Fractal Compression of Data Using an
Integrated Circuit for Discrete Cosine Transform
Compression/ Decompression
5,923,376 2nd Patent from above
5,790,131 System & Method for Lossy Compression of Data with
Output File Size Control
5,821,999 Method & System for Fractally Interpreting Intensity
Values for a Single Color Component Array Obtained from
a Single Color Sensor
5,805,217 Method & System for Interpreting Missing Picture
Elements in a Single Color Component Array Obtained from
a Single Color Sensor
5,835,037 Method & Apparatus for Modeling Discrete Data Sequences
by Multi Vector Representation
5,923,785 System & Method for Compressing Data
5,982,938 System & Method for Compressing Data Using Differential
Coding of Coefficient Addresses
5,990,950 Method & System for Color Filter Array Multifactor
Interpolation
5,923,376 Method & System for Fractal Compression of Data Using an
Integrated Circuit for DCT - CIP
|
EXHIBIT 10.3
ADDENDUM
To
Development and License Agreement
Between
Southern Wireless, Inc. and Iterated Systems, Inc.
Executed March 17, 2000
This Addendum is executed for the mutual benefit of both parties.
The definitions, abbreviations and section numbers used in the Development and License Agreement between Southern Wireless, Inc. and Iterated Systems, Inc., and executed on March 17, 2000, are incorporated herein.
1. Replacement Sections. The numbered sections below replace, in their entirety, the corresponding numbered sections in the Agreement. Exhibit B below replaces, in its entirety, Exhibit B from the Agreement.
1.2 ClearVideo Source Code. ClearVideo Source Code is the human readable code that compiles to the personal computer software described in Exhibit B as delivered by ISI to SWI under its Section 4.1.1 obligation. The ClearVideo Source Code includes source code for both encoder and decoder, which source code can be compiled into run-time versions. For the purposes of the Agreement, the ClearVideo Source Code includes source code for ClearFusion as delivered by ISI to SWI under its Section 4.1.1(f) obligation, which source code can be compiled into a browser plug-in
1.13 Marketing Material. Marketing Material shall consist of (1) the names "ClearVideo" and "ClearFusion"; (2) the manual and packaging of ClearVideo Version 1.2, but excluding: (a) all references to Iterated Systems, Inc. (in any form including but not limited to Iterated Systems and Iterated), (b) Iterated Systems' fern logo and (c) general corporate information of Iterated Systems including but not limited to addresses, phone numbers and other contact information; (3) the ClearVideo logo(s) as contained in the manual and packaging of ClearVideo Version 1.2; (4) any ISI trademark rights in the name ClearVideo or ClearFusion, or any ISI service mark rights in the name ClearVideo and the name ClearFusion, but only to the extent, if any, such rights exists; and (5) the web addresses: www.clearvideo.com and www.clearvideo.com.uk.
Exhibit B
ClearVideo Description
ClearVideo is computer software that runs on Pentium processors inside personal computers which have compatible configurations including compatible memory, graphics, operating systems, browser, and input/output resources. ClearVideo includes both encoder and decoder functionality. The encoder is not a stand-alone program but requires a compatible video editor such as Adobe Premier 4.0. The ClearVideo
encoder encodes video only, but a compatible video editor and personal computer environment will provide the ability to encode audio as well. The ClearVideo Source Code will compile to version 1.2 provided to SWI for evaluation prior to the execution of the Agreement. For the purposes of the Agreement, ClearVideo also includes ClearFusion. ClearFusion is a plug-in for certain versions of browsers which was distributed by ISI under the name ClearFusion. ClearFusion is distinct from, and not part of, the ClearVideo Source Code Encoder.
2. Additional Sections. The numbered sections below are to be added to the sections indicated below.
The following section is added to Section 1 of the Agreement:
1.17 ClearFusion Source Code. ClearFusion Source Code is that portion of the ClearVideo Source Code which compiles to the ClearFusion plug-in provided to SWI by ISI under ISI Section 4.1.1(f) obligation.
The following section is added to Section 2 of the Agreement:
2.1 (a) ClearFusion License. All of the rights, benefits and provisions of the licenses granted to SWI for ClearVideo are also granted to SWI for ClearFusion. All of the reservations and restrictions of the licenses granted to SWI for ClearVideo also apply to ClearFusion.
The following section are added to Section 4.1 of the Agreement:
4.1.1 (f) Within five (5) days of the execution date of this Addendum, ISI will provide Southern Wireless with ClearFusion Source Code.
EMajix.com, Inc. formally
SOUTHERN WIRELESS, INC. ITERATED SYSTEMS, INC.
BY: /s/ Ryan Corley BY: /s/ Alan Sloan
Ryan Corley, President Alan Sloan, Executive V.P.
Dated May 8, 2000 Dated May 8, 2000
|
| ARTICLE 5 |
| This schedule contains summary financial information extracted from the Statement of Financial Condition at March 31, 2000 Audited and the Statement of Loss for the year ended March 31, 2000 Audited and is qualified in its entirety by reference to such financial statements. |
| PERIOD TYPE | YEAR |
| FISCAL YEAR END | MAR 31 2000 |
| PERIOD END | MAR 31 2000 |
| CASH | 27,060 |
| SECURITIES | 0 |
| RECEIVABLES | 0 |
| ALLOWANCES | 0 |
| INVENTORY | 0 |
| CURRENT ASSETS | 27,060 |
| PP&E | 2,416 |
| DEPRECIATION | 0 |
| TOTAL ASSETS | 282,451 |
| CURRENT LIABILITIES | 254,620 |
| BONDS | 0 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| COMMON | 1,044 |
| OTHER SE | 26,767 |
| TOTAL LIABILITY AND EQUITY | 27,831 |
| SALES | 0 |
| TOTAL REVENUES | 0 |
| CGS | 0 |
| TOTAL COSTS | 0 |
| OTHER EXPENSES | 10,144 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 0 |
| INCOME PRETAX | (10,144) |
| INCOME TAX | 0 |
| INCOME CONTINUING | (10,144) |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | (10,144) |
| EPS BASIC | (0.002) |
| EPS DILUTED | (0.002) |