Banneker Inc. (BANI)

[stocksurgeon]

Information and Disclosure Statement
Pursuant to Rule 15C2‐(11)(a)(5)
This Statement has not been filed with the NASD or any other regulatory agency.
All information contained in this Information and Disclosure Statement has been compiled to fulfill the
disclosure requirements of Rule 15c2‐11(a)(5) promulgated under the Securities Act of 1934 as
amended. The enumerated captions contained herein correspond to the sequential format as set forth
in the Guidelines for Providing Adequate Current Public Information provided by PinkSheets, LLC.
BANNEKER, INC.
1660 South Albion Street Suite 309
Denver, CO 80222
tel. 720‐435‐5528
www.bannekerwatches.com
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Section One: Issuers’ Initial Disclosure Obligations
Part A General Company Information
Item I The exact name of the issuer and its predecessor (if any).
In answering this item, please also provide any names used by predecessor entities in the
past five years and the dates of the name changes.
Banneker Inc.
The name of the Company was chaged to Banneker, Inc. by filing an amendment to
the certificate of incorporation which was approved by the Secrerary of State of the
State of California on November 17 2007. The prior name of the company was
Cumetrix Data Systems Corp.
Item II The address of the issuer’s principal executive offices.
In answering this item, please also provide (i) the telephone and fax number of the
issuer’s principal executive offices, (ii) if applicable, the URL of each website maintained
by or on behalf of the issuer, and (iii) if applicable, the name, phone number, email
address, and mailing address of the person responsible for the issuer’s investor relations.
(i) Banneker, Inc.
1660 South Albion Suite 309
Denver, Colorado 80222
[e-mail]
tel. [phone]
(ii) www.bannekerwatches.com
(iii) none
Item III The state and date of the issuer’s incorporation or organization.
Provide the issuer’s state of incorporation or state of organization (if the issuer is not a
corporation) and the date on which it was incorporated or organized.
The company was incorporated in April 1996 in the state of California
Item IV The name and address of the transfer agent*.
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In answering this item, please also provide the telephone number of the transfer agent,
indicate whether or not the transfer agent is registered under the Exchange Act, and state
the appropriate regulatory authority of the transfer agent.
*To be included in OTCQX, Pink Sheets’ Emerging Equities Category or Pink Sheets’
Current Information Category, the issuer’s transfer agent must be registered under the
Exchange Act.
Standard Registrar & Transfer Company
12528 South 1840 East
Draper, Utah 84020
Salt Lake City, Utah 84107
Tel. [phone]
Fax. [phone]
It is the company's understanding that Standard Registrar & Transfer Company is
registered under the Exchange Act.
Item V The nature of the issuer’s business.
In describing the issuer’s business, please provide the following information:
A. Business Development. Describe the development of the issuer and material
events during the last three years so that a potential investor can clearly understand
the history and development of the business. If the issuer has not been in business for
three years, provide this information for any predecessor company. This business
development description must also include:
1. the form of organization of the issuer (e.g., corporation, partnership,
limited liability company, etc.);
Corporation
2. the year that the issuer (or any predecessor) was organized;
1996
3. the issuer’s fiscal year end date;
December
4. whether the issuer (or any predecessor) has been in bankruptcy,
receivership or any similar proceeding;
No
5. any material reclassification, merger, consolidation, or purchase or sale
of a significant amount of assets;
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Pursuant to a Share Exchange and Recapitalization Agreement dated
September 12, 2007 by and between the Company and Banneker, Inc.
(a Colorado corporation), as amended, the Company issued 31,312,501
shares of its common stock to the shareholders of Banneker, Inc.
(Colorado) for all of the issued and outstanding shares of Banneker, Inc.
(Colorado). As a result of the transaction, Banneker, Inc. (Colorado) is
wholly owned by the Company. In addition, at the consummation of the
transactions contemplated by the Share Exchange Agreement, as
amended, the former shareholders of Banneker, Inc. (Colorado) owned
approximately 80% of the total issued and outstanding common stock of
the Company. In addition, pursuant to the Share Exchange Agreement,
all of the officers and directors of Banneker, Inc. (Colorado) became the
officers and directors of the Company. The Share Exchange Agreement
and amendments are attached hereto.
6. any default of the terms of any note, loan, lease, or other indebtedness
or financing arrangement requiring the issuer to make payments;
no
7. any change of control;
Pursuant to a Share Exchange and Recapitalization Agreement dated
September 12, 2007 by and between the Company and
Banneker, Inc. (a Colorado corporation), as amended, the
Company issued 31,312,501 shares of its common stock to the
shareholders of Banneker, Inc. (Colorado) for all of the issued and
outstanding shares of Banneker, Inc. (Colorado). As a result of
the transaction, Banneker, Inc. (Colorado) is wholly owned by the
Company. In addition, at the consummation of the transactions
contemplated by the Share Exchange Agreement, as amended,
the former shareholders of Banneker, Inc. (Colorado) owned
approximately 80% of the total issued and outstanding common
stock of the Company. In addition, pursuant to the Share
Exchange Agreement, all of the officers and directors of
Banneker, Inc. (Colorado) became the officers and directors of the
Company. The Share Exchange Agreement and amendments
are attached hereto.
8. any increase in 10% or more of the same class of outstanding equity
securities;
Pursuant to a Share Exchange and Recapitalization Agreement dated
September 12, 2007 by and between the Company and Banneker, Inc.
(a Colorado corporation), as amended, the Company issued 31,312,501
shares of its common stock to the shareholders of Banneker, Inc.
(Colorado) for all of the issued and outstanding shares of Banneker, Inc.
(Colorado). As a result of the transaction, Banneker, Inc. (Colorado) is
wholly owned by the Company. In addition, at the consummation of the
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transactions contemplated by the Share Exchange Agreement, as
amended, the former shareholders of Banneker, Inc. (Colorado) owned
approximately 80% of the total issued and outstanding common stock of
the Company. In addition, pursuant to the Share Exchange Agreement,
all of the officers and directors of Banneker, Inc. (Colorado) became the
officers and directors of the Company. The Share Exchange Agreement
and amendments are attached hereto.
9. any past, pending or anticipated stock split, stock dividend,
recapitalization, merger, acquisition, spin-off, or reorganization;
Pursuant to a Share Exchange and Recapitalization Agreement dated
September 12, 2007 by and between the Company and
Banneker, Inc. (a Colorado corporation), as amended, the
Company issued 31,312,501 shares of its common stock to the
shareholders of Banneker, Inc. (Colorado) for all of the issued and
outstanding shares of Banneker, Inc. (Colorado). As a result of
the transaction, Banneker, Inc. (Colorado) is wholly owned by the
Company. In addition, at the consummation of the transactions
contemplated by the Share Exchange Agreement, as amended,
the former shareholders of Banneker, Inc. (Colorado) owned
approximately 80% of the total issued and outstanding common
stock of the Company. In addition, pursuant to the Share
Exchange Agreement, all of the officers and directors of
Banneker, Inc. (Colorado) became the officers and directors of the
Company. The Share Exchange Agreement and amendments
are attached hereto.
10. any delisting of the issuer’s securities by any securities exchange or
NASDAQ or deletion from the OTC Bulletin Board; and
Yes, the Company's shares were formerly listed on the OTC Bulletin
Board. In 2001, the Company's shares were delisted from the OTC
Bulletin Board and thereafter traded on the Pink Sheets.
11. any current, past, pending or threatened legal proceedings or
administrative actions either by or against the issuer that could have a
material effect on the issuer’s business, financial condition, or operations
and any current, past or pending trading suspensions by a securities
regulator. State the names of the principal parties, the nature and
current status of the matters, and the amounts involved.
None
B. Business of Issuer. Describe the issuer’s business so a potential investor can
clearly understand it. To the extent material to an understanding of the issuer, please
also include the following:
1. the issuer’s primary and secondary SIC Codes;
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3873
2. if the issuer has never conducted operations, is in the development
stage, or is currently conducting operations;
The Company is currently in operations and sells its products (watches,
clocks and other jewelery)
3. if the issuer is considered a “shell company” pursuant to Securities Act
Rule 405;
No
4. the names of any parent, subsidiary, or affiliate of the issuer, and its
business purpose, its method of operation, its ownership, and whether it
is included in the financial statements attached to this disclosure
document;
Esteem Inc, a wholy owned subsidiary.
5. the effect of existing or probable governmental regulations on the
business;
None in connection with the specific business of the Company.
6. an estimate of the amount spent during each of the last two fiscal years
on research and development activities, and, if applicable, the extent to
which the cost of such activities are borne directly by customers;
7. costs and effects of compliance with environmental laws (federal, state
and local); and
None
8. the number of total employees and number of full-time employees.
3 full time employees
For issuers engaged in mining, oil and gas production and real estate activities,
substantial additional disclosure of the issuer’s business is required. Contact Pink
Sheets for more information.
Item VI The nature of products or services offered.
In responding to this item, please describe the following so that a potential investor can
clearly understand the products and services of the issuer:
A. principal products or services, and their markets;
BACKGROUND.
The legal name of the Corporation is Banneker, Inc., (“Banneker”) a California
Corporation, and is traded on the Pinksheets.com, stock symbol,
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“BANI.PK”. The Company is not presently doing business under any
other assumed names or brands.
Banneker is an "identity" centric company based on a watch that is steeped in
history. Management believes that the uniqueness of the watch creates
the desire to own. Because of its quality, styling and the heritage of its
namesake; Benjamin Banneker, management believes, the Company’s
collection of watches will attract a broad cross section of America. Some,
who purchase the Banneker, will buy the watch because of its
significance. Others will buy because of the fashion statement
associated with owning a Banneker watch. We believe that our historic,
yet appropriate, time pieces have been fashioned and crafted after the
historical events of Banneker's life as stated below.
Banneker's current line of watches may be viewed (and ordered) from our
website at www.bannekerwatches.com.
At the age of twenty-one, Benjamin Banneker’s abilities were finally utilized. He
met a man named Josef Levi who showed him a pocket watch.
Banneker was so fascinated that Levi gave him the watch. He studied
how it worked, drew a picture of it, and made mathematical calculations
for the parts. He worked on building the clock for two years. In 1753, it
was completed. It was made of wood and he had carved the gears by
hand. This was the first clock built in the United States. For more than
forty years, the clock struck every hour.
We believe that the Banneker collection of watches is special since; each watch
will be crafted with a wooden face denoting the first American made
wooden clock. More importantly, the watches will denote a historical
tribute to a great African American scholar, inventor, mathematician and
astronomer; Benjamin Banneker. Included with the watch will be a brief
profile of the inventor's life and accomplishment. Subsequent watch
productions will include the Banneker profile as well as profiles of other
inventors and scholars of African decent. Along with the wooden face
and the historical profiles, the "Banneker" can be designed with different
varying sizes and shapes, woods (cherry, mahogany, teak, ebony, etc.)
precious metals and stones, as well as crystals, all to increase its value
and marketability.
It is the desire of the Company to make the inaugural watch affordable and
distinctive then build on its market presence, we seek to make the watch
and its enclosure a source of pride, education and enlightenment as well
as high fashion.
Banneker Watches are currently being worn by sports and entertainment
celebrities worldwide.
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Mission
Banneker is a mission! Banneker is an African American watch company, with
an embedded message in its name and an embedded purpose. Its name
is in honor of Benjamin Banneker and its purpose is to re-build pride and
re-focus history toward African American inventors, scientists and
notables. The Company's primary goal is to build extraordinary brand
recognition and market awareness for our watches through constant
recognition of African American heritage and a tribute to those African
Americans who made significant contributions to our society.
Additionally, the Company will embrace our modern day notables who
have positively influenced society and will embrace those who have a
sense of social responsibility. These notables primarily come from
sports and entertainment arenas.
OVERVIEW OF OUR PROPOSED BUSINESS.
Market Analysis Summary and Segmentation
• Population of Urban Youth near 24 million
• Urban Consumers are mostly non-Hispanic Whites
– Whites comprise 55% of total URBAN Consumer population
• Urban Youth
– 48.8% of 15 to 17 year olds Total Youth Population
– 37.7% of 18 to 24 year olds Total Youth Population
• Buying Power Totals $496 Billion annually [source ?]
We anticipate that Banneker Watch will be focusing on three distinct groups of
customers. One is members of championship sports teams who will
receive rings and watches to commemorate the various achievements in
their respective sports at both the professional and college level. The
second is college and high school graduating seniors who purchase or
receive gifts to commemorate their academic achievements. Finally, the
company will focus on the broad spectrum of retail consumers who
associate themselves with the Urban market.
The purchase of lower midlevel and mid level watches in the U.S. has
increased at a rate of 21% over the past two years. [source ?] We expect
the sales to continue growing in this market segment, and to capitalize,
not only on the ever present market for watches, but spend a large part
of our advertising budget aimed at the ‘Urban’ consumer through
advertising medians that market segment is used to viewing. These
medians are, but not limited to:
World Wide Web (Internet) marketing. www.bannekerwatches.com
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M.T.V.
B.E.T. (Black Entertainment Network)
Various CD Covers secured through licensing and partnerships with major
record labels.
Celebrity Endorsement when and where appropriate.
Upscale Department store retail merchandising
Jewelry store outlet venues
Regional and National Sports Celebrity Endorsements
The market segmentation is divided into the leading target markets. This
division reflects the difference in marketing strategy that will be used to
target each different market.
The lower priced watches ($150-$500) will specifically target the consumers
that are looking for an affordable, name brand, quality watch that exudes
‘Luxury’ at a not so luxurious price.
The Mid Priced watches ($501-$1,000) will specifically target buyers who are a
little older and more financially established. These are the consumers
who will spend the dollars on a watch IF they feel the value and prestige
is worth the price charged.
B. distribution methods of the products or services;
Direct Sales
The company intends to utilize direct sales to reach Urban Youth that would
otherwise be missed by sellers to graduating seniors. The direct sales
efforts will be focused on the markets where the largest number of these
buyers will be found including: Los Angeles, Ca., Chicago, Ill., New York,
NY., and other MSAs.
Retail Sales
In year two or three of the plan, the company intends to expand to include retail
sales offering product through traditional retail department and jewelry
stores. At this point the company will have achieved sufficient market
awareness that retailers will gladly carry this product line. Although this
strategy will ultimately become the major source of revenue for the
company, this plan does not attempt to estimate the revenues or
associated costs of this later stage strategy. Certain of the Company's
products are currently sold in "Soulfly" a retail store in Chicago.
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Distribution Patterns
Management plans that Banneker will distribute watches utilizing what is known
as a direct ship format. That is to say, Banneker will receive orders from
the various distribution channels and have the orders shipped in bulk to
the specified locations. Banneker, outside of keeping various samples
on hand, will stock a limited amount of product on site during the start up
process. This pattern of distribution will help in the following areas:
 The direct ship from the manufacturer to the specified location allows for
elimination of the cost of shipping goods twice. This will save expenses
on freight and improve cash flow.
It also allows for Banneker to not spend any money on storage either externally
(Paying another company for use of storage space), or internally
(Building a warehouse) this will keep overhead to a bare minimum during
the ‘Start up Process.
C. status of any publicly announced new product or service;
D. competitive business conditions, the issuer’s competitive position in the
industry, and methods of competition;
The industry leader is Citizen who is projected to do $205 Million in international
Sales in 2008. They hold the dominant market share with an average
MSRP of $270.
Consumers often only buy a new watch every 5 to 10 years, yet they purchase
them often as gifts. Therefore, advertising will be increased during the
Christmas Holiday Season.
The intended retail outlets are full price and full service, therefore Banneker
won't need to use an extreme price markdown strategy to gain a foothold
into the market place. We believe that price says a lot about the quality
of a product.
Competitive Overview
Domestic competition is listed as any and all companies that do business in the
United States or territories. Management believes that brand loyalty isn't
high on potential customer's reason for purchasing. It iis our opinion that
no Company that Banneker could identify has a strong foothold into the
market Banneker is looking to penetrate. Purchasing decisions are
largely based on what is ‘Hip' at the time. Banneker intends to build our
customer base by attacking the market through already established,
successful individuals as spokes people, and wearers of the brand.
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We believe that no wrist watch company has captured the minds of the average
‘Urban' consumer. There is no clear brand loyalty. Banneker intends to
penetrate this market and build brand loyalty in a way no other watch
company is able to do. The Urban watch market in our ‘Pricing Points' is
very under penetrated.
Strategy and Implementation Summary
The overall strategy of the company is to indirectly enter the market through
distribution agreements and direct sales to its target market. This
approach will limit its exposure to competitive companies initially while
building brand recognition. Another benefit of this approach is that the
considerable market presence and capabilities of its distribution partners
will allow the company to sell considerable levels of watches without
making risky investments in inventory.
Competitive Edge
We believe Banneker Watch's competitive edge is fairly simple. It is based on
creative, unusual designs the designed to appeal the Urban community.
The market segment supplies many of the sport stars in college and
professional sports today.
Marketing Strategy
It is anticipated that our marketing strategy will focus primarily on establishing
name brand recognition in the market place by:
Establishing high level partnerships with corporations who have established
distribution to the companies target market.
Inside of Banneker Watch Packaging at the Point of Sale, we place a small
communication advertisement card with such information as: 1)
Banneker’s Web Address, 2) Future Products and release dates, 3)
Warranty and repair information, etc.
Closely associate the Banneker brand name with products designed for the
Urban market.
Leveraging already established celebrities regionally and nationally to wear and
promote the Banneker product line.
Internet marketing. We have a store front on the internet
www.bannekerwatches.com. We will employ ‘Pop up ad’ technologies
when and where applicable. Banneker intends to partner with
professional website developers to utilize every effective web marketing
strategy that , we believe, will give Banneker the leverage needed to be
an effective company in Cyber Space.
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Market Analysis Summary
The U.S. Urban Youth Market is comprised of 15- to 29-year-olds who connect
with Urban music and affiliate with the urban culture. The market is
comprised of those who view "urban" as a state of mind rather than a
geographic place. The size of the market is nearly 24 million youth and
is conservatively estimated to represent $500 billion in purchasing
power. Participants in this market are not limited to urban Blacks but also
contain millions of young consumers in smaller towns and cities as well
as in major metropolitan areas, “MSAs”. Current data indicates that 55%
of the Urban market is comprised of white suburban youth. In total
48.8% of 15 to 17 year olds and 37.7% of 18 to 24 year olds comprise
this market.
We believe that Urban consumers are different from other young consumers
because of their identifying with the core values of urban culture. When
shopping and buying in areas such as apparel, personal care, personal
finance, automotive vehicles, and food these consumers look for
products that appeal to their unique tastes and interests. We believe that
the watches offered by Banneker Watch will appeal to this market
because of the unique designs directed specifically to this market
segment.
Market Segmentation
Banneker Watch intends to target four groups, (1) those related professional
sports championship events, (2) those related to college championship
events, (3) college and high school graduates who will receive these
watches as graduation gifts; and (4) the growing Urban market residing
in large US cities.
• Professional Sports Championships - There is a growing market for products
complimentary to the typical sports championship rings. A custom watch
is a natural compliment to the special award of a championship watch.
Today few teams offer watches as part of the benefit package; however,
more and more teams are now offering this additional incentive to the
players. While the number of players receiving championship watches
will be small, the current trend is to offer these special incentives to
friends, family and fans of the winning team. Initially we anticipate that
this market will consist of Football, Basketball and Baseball in the US
and Europe. Additional sports, including soccer and other world sports
will be added.
• College Sports Championships - 355,000 total participants of which 44,600
participate in NCAA sponsored championships. There is a much larger
market for complimentary product is college sports. There are several
levels of championships in the college sports including Division 1,
Division 2 etc. Additionally, there are the major tournaments and bowl
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games associated with college football, basketball and other sports.
Each of the levels and events offer opportunities for sales of watches as
complimentary awards to the participants. Here too, family, friends and
other supporters may have the opportunity to look like a star and support
their team by the purchase of a commemorative watch.
 Graduating College and High School Seniors - There are nearly 4.2 million
high school and college graduates yearly. Graduation gifts are
purchased in April/May, they are also purchased in December as part of
Christmas giving and in September/October by seniors wishing to "show
off" their status. We believe that watches and rings are the most
common gift given to or purchased by graduates.
 U.S. Urban Youth Market – There are roughly 24 million 15- to 29-year-olds
who connect with urban music and affiliate with urban culture. The
market is comprised of those who view "urban" as a state of mind rather
than a geographic place. Participants in this market are not limited to
urban Blacks but also contain millions of young consumers in smaller
towns and cities as well as in major metropolitan areas. The company
intends to use direct marketing and the web to reach these buyers.
Sales Strategy
Banneker intends to utilize the following sales and distribution strategy. This
strategy, we believe, will be made possible by our strategic partnerships.
Additionally this strategy relies on Banneker on the partnership
agreement with Jostens who will provide access to it sizable market of
college and high school graduating seniors.
1) Class Watch, School Spirit Watch, and Class Ring Sales packages to
graduating college and high school seniors.
2) Internet Sales. Consumers will be able to purchase products at
www.bannekerwatches.com
3) Direct marketing to the target market of Urban Youth in the 15-24 age range
4) Celebrity Signature Watch endorsements
E. sources and availability of raw materials and the names of principal suppliers;
The Company obtains some of its products and manufacturing services from
the following companies: Simmons Jewrellry Company; Think Tank Inc.,
and Castle Merchandising
F. dependence on one or a few major customers;
No
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G. patents, trademarks, licenses, franchises, concessions, royalty agreements or
labor contracts, including their duration; and
yes
H. the need for any government approval of principal products or services and the
status of any requested government approvals.
none
Item VII The nature and extent of the issuer’s facilities.
The goal of this section is to provide a potential investor with a clear understanding of all
assets, properties or facilities owned, used or leased by the issuer.
In responding to this item, please clearly describe the assets, properties or facilities of the
issuer, give the location of the principal plants and other property of the issuer and
describe the condition of the properties. If the issuer does not have complete ownership
or control of the property (for example, if others also own the property or if there is a
mortgage on the property), describe the limitations on the ownership.
If the issuer leases any assets, properties or facilities, clearly describe them as above and
the terms of their leases.
The business is based in Denver, Colorado and is operated from an office suite located at
1660 South Albion Street. The office suite is approximately 7500 square foot. The
Company pays $6,500 per month for the office suite and the term of the lease is 5 years
ending in May 2011.
Part B Share Structure and Issuance History
Item VIII The exact title and class of securities outstanding.
In answering this item, provide the exact title and class of each class of outstanding
securities. In addition, please provide the CUSIP and trading symbol.
Common Stock, no par value per share
Cusip No. 06652L10 1
BANI.PK
Item IX Description of the security.
A. Par or Stated Value. Provide the par or stated value for each class of
outstanding securities.
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Common stock, no par value per share
B. Common or Preferred Stock.
1. For common equity, describe any dividend, voting and preemption rights.
The Company's common stock has voting rights.
2. For preferred stock, describe the dividend, voting, conversion and liquidation
rights as well as redemption or sinking fund provisions.
No preferred stock is issued and outstanding; 2,000,000 shares of preferred
stock, no par value has been authorized
3. Describe any other material rights of common or preferred stockholders.
None, other than rights pursuant to the California corporation laws.
4. Describe any provision in issuer’s charter or by-laws that would delay, defer
or prevent a change in control of the issuer.
None.
Item X The number of shares or total amount of the securities outstanding for
each class of securities outstanding.
In answering this item, provide the information below for each class of securities authorized.
Please provide this information (i) as of the end of the issuer’s most recent fiscal quarter
and (ii) as of the end of the issuer’s last two fiscal years. (The goal of this item is to identify
changes in securities outstanding. If this information is not available for the most recent
fiscal quarter end (“FQE”) and last two fiscal year ends (“FYE”), or if the most recent FQE is
the same as the FYE, please provide it for at least two alternative time periods.)
(i) Period end date;
(ii) Number of shares authorized;
(iii) Number of shares outstanding;
(iv) Freely tradable shares (public float);
(v) Total number of beneficial shareholders; and
(vi) Total number of shareholders of record.
On October 5, 2007, the shs decreased by 1 for 100 split
Pay Date: Oct 5, 2007;
(i) December 31, 2007
(ii) 250,000,000 shares of common stock, no par value; and
2,000,000 shares of preferred stock, no par value.
(iii) 10,509,491 shares of common stock, and no shares of preferred stock (consisted of
10,312,500 shares of common stock which was issued pursuant to the acquisition of
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Banneker. By amendment to the Acquisition Agreement, the amount of shares was increased
to 31,312,501.
(iv) 196,991 shares of common stock were eligible to be traded.
(v)
(vi)
(i) March 31, 2008
(ii) 250,000,000 shares of common stock, no par value; and
2,000,000 shares of preferred stock, no par value.
(iii) 17,509,491 shares of common stock, and no shares of preferred stock (consisted of
10,312,500 shares of common stock which was issued pursuant to the acquisition of
Banneker. By amendment to the Acquisition Agreement, the amount of shares was increased
to 31,312,501.
(iv) 7,196,991 shares of common stock were eligible to be traded (In March 2008 and
February 2008, certain debt of the company was converted into shares of common stock
pursuant to Rule 144(k).
(v)
(vi)
(i) May 15, 2008
(ii) 250,000,000 shares of common stock, no par value; and
2,000,000 shares of preferred stock, no par value.
(iii) 39,609,491 shares of common stock, and no shares of preferred stock (consisted of
10,312,500 shares of common stock which was issued pursuant to the acquisition of
Banneker. By amendment to the Acquisition Agreement, the amount of shares was increased
to 31,312,501.
(iv) 7,196,991 shares of common stock were eligible to be traded
(v)
(vi)
Item XI List of securities offerings and shares issued for services in the past two
years.
List below any events, in chronological order, that resulted in changes in total shares
outstanding by the issuer (1) within the two-year period ending on the last day of the
issuer’s most recent fiscal year and (2) since the last day of the issuer’s most recent fiscal
year.
The list shall include all offerings of securities, whether private or public, and shall indicate:
(i) The nature of each offering (e.g., Securities Act Rule 504, intrastate,
etc.);
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(ii) Any jurisdictions where the offering was registered or qualified;
(iii) The number of shares offered;
(iv) The number of shares sold;
(v) The price at which the shares were offered, and the amount actually paid
to the issuer;
(vi) The trading status of the shares; and
(vii) Whether the certificates or other documents that evidence the shares
contain a legend (1) stating that the shares have not been registered
under the Securities Act and (2) setting forth or referring to the
restrictions on transferability and sale of the shares under the Securities
Act.
The list shall also include all shares or any other securities or options to acquire such
securities issued for services in the past two fiscal years and any interim periods, describing
(1) the securities, (2) the persons or entities to whom such securities were issued and (3)
the services provided by such persons or entities.
With respect to private offerings of securities, the list shall also indicate the identity of the
persons who purchased securities in such private offering; provided, however, that in the
event that any such person is an entity, the list shall also indicate (a) the identity of each
natural person beneficially owning, directly or indirectly, more than five percent (5%) of any
class of equity securities of such entity and (b) to the extent not otherwise disclosed, the
identity of each natural person who controlled or directed, directly or indirectly, the purchase
of such securities for such entity.
Pursuant to a Share Exchange and Recapitalization Agreement dated September 12, 2007
by and between the Company and Banneker, Inc. (a Colorado corporation), as amended,
the Company issued 31,312,501 shares of its common stock to the shareholders of
Banneker, Inc. (Colorado) for all of the issued and outstanding shares of Banneker, Inc.
(Colorado). The shares were issued as restricted shares pursuant to Section 4(2) of the
SEcurities Act of 1933, as amended. As a result of the transaction, Banneker, Inc.
(Colorado) is wholly owned by the Company. In addition, at the consummation of the
transactions contemplated by the Share Exchange Agreement, as amended, the former
shareholders of Banneker, Inc. (Colorado) owned approximately 80% of the total issued
and outstanding common stock of the Company. In addition, pursuant to the Share
Exchange Agreement, all of the officers and directors of Banneker, Inc. (Colorado) became
the officers and directors of the Company. The Share Exchange Agreement and
amendments are attached hereto.
In addtion, during March and February of 2008, certain holders of a note obligation
converted the note into shares of unrestricted common stock of the company pursuant to
Version 9.1 Updated on 4/17/2007 Page 21 of 47
Rule 144(k). The former note holders received a total of 7,000,000 shares of common
stock of the Company. The note was dated November 2, 2005
Part C Management and Control Structure
Item XII The name of the chief executive officer, members of the board of
directors, as well as control persons.
The goal of this section is to provide an investor with a clear understanding of the identity of
all the persons or entities that are involved in managing, controlling or advising the
operations, business development and disclosure of the issuer, as well as the identity of
any significant shareholders.
A. Officers and Directors. In responding to this item, please provide the following
information for each of the issuer’s executive officers, directors, general partners and
control persons, as of the date of this information statement:
1. Full name;
2. Business address;
3. Employment history (which must list all previous employers for the past
10 years, positions held, responsibilities and employment dates);
4. Board memberships and other affiliations;
5. Compensation by the issuer; and
6. Number and class of the issuer’s securities beneficially owned by each
such person.
Derrick M. Holmes, Chief Executive Officer and Chairman of the Board of Directors.
Derrick M. Holmes graduated from Iowa Central Community College with an
Associates degree in Mass Communications in 1983. He worked for Mile High Cable
Company in Denver, Colorado where he was awarded top sales honors on several
occasions. Derrick was founder and CEO of Hollyrock Advertising Company where
they were a one-stop shop for doing jingles, voiceovers, slogans commercial concepts
Version 9.1 Updated on 4/17/2007 Page 22 of 47
and ad placements. Some of their clients included Coors Brewing Company, TWA
Airlines and Disney. Derrick founded Marquee Watch in 1998, a company that used
sports celebrities’ signatures and likeness in the dial in a watch. Some of the
celebrities included Kurt Warner, Tim Hardaway, John Elway, Terrell Davis and Tony
Dorsett.
In 2004 Derrick then founded Banneker Inc. and is currently the CEO. Banneker, Inc.
is a company steeped in history. Derrick his company after the first African American
scientist and inventor, Benjamin Banneker, who is credited with making the 1st fully
assembled clock in America. All of Banneker Inc’s watches are crafted with a wide
assortment of luxury woods to pay homage to Benjamin Banneker’s wooden clock.
Mr. Holmes owns 29,495,000 shares of common stock of Banneker (75% of the total
issued and outstanding of Banneker).
Tim Haraway - President
Tim Hardaway-Tim is a former NBA All-Star and the inventor of the “Cross over
Dribble” that is used by millions of basketball players around the world. Tim is a
business owner with many businesses ventures that are, and have been, successful.
Tim’s notoriety has enabled Marquee Watch and now Banneker to develop very key
relationships.
Alfred Baddington-Johnson - Chief Operations Officer
Ron Hunter, VP Operations.
Ron Hunter earned a Bachelor of Science degree in Business from Regis College in
1982, and a MBA from the University of Phoenix in 1984. During his career he was
assigned to increasingly senior positions within the regulated telephone company. In
1996, he left the corporate environment to become VP Operations at FaxNet, a startup
company that developed a fax to internet capability that was sold be nearly every
regulated telephone company in the US. Ron remained as a senior executive when
FaxNet was sold to Critical Path. In 2001 Ron left telecommunications to become the
principal owner and President of Docuplus a commercial printing company located in
Denver, CO.
In 2006, Ron began working with Banneker to lend his deep business experience in
the development of the company. Mr. Hunter owns 206,250 shares of common stock
of Banneker (less than 1% of the total issued and outstanding of Banneker).
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B. Legal/Disciplinary History. Please identify whether any of the foregoing persons
have, in the last five years, been the subject of:
1. A conviction in a criminal proceeding or named as a defendant in a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
2. The entry of an order, judgment, or decree, not subsequently reversed,
suspended or vacated, by a court of competent jurisdiction that
permanently or temporarily enjoined, barred, suspended or otherwise
limited such person’s involvement in any type of business, securities,
commodities, or banking activities;
3. A finding or judgment by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission, the Commodity
Futures Trading Commission, or a state securities regulator of a violation
of federal or state securities or commodities law, which finding or
judgment has not been reversed, suspended, or vacated; or
4. The entry of an order by a self-regulatory organization that permanently
or temporarily barred, suspended or otherwise limited such person’s
involvement in any type of business or securities activities.
none
C. Disclosure of Certain Relationships. Describe any relationships existing among
and between the issuer’s officers, directors and shareholders.
To the extent not otherwise disclosed, describe all relationships and affiliations among
and between the shareholders and the issuer, its predecessors, its present and prior
officers and directors, and other shareholders.
none
D. Disclosure of Conflicts of Interest. Describe any related party transactions or
conflicts of interests. Provide a description of the circumstances, parties
involved and mitigating factors for any related party transactions or executive
officer or director with competing professional or personal interests.
none
Item XIII Beneficial Owners.
Provide a list of the name, address and shareholdings of all persons beneficially owning
more than five percent (5%) of any class of the issuer’s equity securities.
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To the extent not otherwise disclosed, if any of the above shareholders are corporate
shareholders, provide the name and address of the person(s) owning or controlling such
corporate shareholders and the resident agents of the corporate shareholders.
Mr. Holmes owns 29,495,000 shares of common stock of Banneker (75% of the
total issued and outstanding of Banneker).
Item XIV The name, address, telephone number, and email address of each of the
following outside providers that advise the issuer on matters relating to
the operations, business development and disclosure:
1. Investment Banker
2. Promoters
3. Counsel
4. Accountant or Auditor - the information shall clearly (i) describe if an outside
accountant provides audit or review services, (ii) state the work done by the
outside accountant and (iii) describe the responsibilities of the accountant
and the responsibilities of management (i.e. who audits, prepares or reviews
the issuer’s financial statements, etc.). The information shall include the
accountant’s phone number and email address and a description of the
accountant’s licensing and qualifications to perform such duties on behalf of
the issuer.
5. Public Relations Consultant(s)
6. Investor Relations Consultant
7. Any other advisor(s) that assisted, advised, prepared or provided
information with respect to this disclosure documentation - the information
shall include the telephone number and email address of each advisor.
1) none;
2)none;
3) Erik Morlang, Esq.;
Scobie & Morlang, L.L.C.
Suite 918
1660 S Albion St, Suite 918
Denver, CO 80222
Phone: [phone]
Version 9.1 Updated on 4/17/2007 Page 25 of 47
4) none;
5) none;
6) none;
7) none.
Part D Financial Information
Item XV Financial information for the issuer’s most recent fiscal period.
The issuer shall include the financial statements listed below in the disclosure document and
provide a list in the disclosure document describing the financial statements.
The issuer shall provide the following financial statements for the most recent fiscal period
(whether fiscal quarter or fiscal year).
1) balance sheet;
2) statement of income;
3) statement of cash flows;
4) statement of changes in stockholders’ equity;
5) financial notes; and
6) audit letter, if audited
The financial statements requested pursuant to this item shall be prepared in accordance
with generally accepted accounting principles (GAAP)3 by persons with sufficient financial
skills.
Information contained in annual financial statements will not be considered current more
than 90 days after the end of the issuer’s fiscal year immediately following the fiscal year for
which such statement are provided, or with respect to quarterly financial statements, more
than 45 days after the end of the quarter immediately following the quarter for which such
statements are provided.
For the year ended December 31, 2007, Banneker sold more than approximately $350,000
in product with a margin of 61% excluding additions to inventory. The company incurred
promotion and investor acquisition costs of approximately $120,000 including travel and
entertainment. Other overhead expenses including rent, legal and consulting and officer
3 Foreign private issuers that have furnished information to the Securities and Exchange Commission pursuant to Rule 12g3-2(b) under
the Exchange Act can provide those same financial statements as an alternative to U.S. GAAP. For information regarding U.S. GAAP,
see http://cpaclass.com/gaap/gaap-us-01a.htm.
Version 9.1 Updated on 4/17/2007 Page 26 of 47
salaries were approximately $240,000. As a result of these costs, the company operated at
a loss for 2007.
Please note that these are approximate numbers as our accountant is compiling detailed
numbers for the company at this time.
As of December 31, 2007, the Company had a cash balance of $40,005.53 in a bank
account.
As of March 31, 2008, the Company had a cash balance of $7,846.13 in its bank account.
The company currently has approximately $52,000 cash on hand and inventory
approximately valued at $430,000 at cost. The company has approximately $45,000 in
accounts payable and other short term debt. The company has no long term debt at this
time.
The Company is currently preparing its financials for the year ended December 31, 2007
and the quarter ended March 31, 2008. It expects the finanicials to be completed and
posted at www. pinksheets.com on or by June 15, 2008.
Item XVI Similar financial information for such part of the two preceding fiscal
years as the issuer or its predecessor has been in existence.
Please provide the financial statements described in Item XV above for the issuer’s two
preceding fiscal years.
The Company is currently preparing its financials for the year ended December 31, 2007
and the quarter ended March 31, 2008. It expects the finanicials to be completed and
posted at www. pinksheets.com on or by May 31, 2008.
Item XVII Management’s Discussion and Analysis or Plan of Operation.
Instructions to Item XVII
Issuers that have not had revenues from operations in each of the last two fiscal years, or
the last fiscal year and any interim period in the current fiscal year for which financial
statements are furnished in the disclosure document, shall provide the information in
paragraphs A and C of this item. All other issuers shall provide the information in
paragraphs B and C of this item.
The discussion and analysis shall focus specifically on material events and uncertainties
known to management that would cause reported financial information not to be necessarily
indicative of future operating results or of future financial condition.
Version 9.1 Updated on 4/17/2007 Page 27 of 47
Issuers are not required to supply forward-looking information. This is distinguished from
presently known data that will impact upon future operating results, such as known future
increases in costs of labor or materials. This latter data may be required to be disclosed.
A. Plan of Operation.
1. Describe the issuer’s plan of operation for the next twelve months. This
description should include such matters as:
i. a discussion of how long the issuer can satisfy its cash
requirements and whether it will have to raise additional funds in
the next twelve months;
ii. a summary of any product research and development that the
issuer will perform for the term of the plan;
iii. any expected purchase or sale of plant and significant equipment;
and
iv. any expected significant changes in the number of employees.
B. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
1. Full fiscal years. Discuss the issuer's financial condition, changes in
financial condition and results of operations for each of the last two fiscal years.
This discussion should address the past and future financial condition and
results of operation of the issuer, with particular emphasis on the prospects for
the future. The discussion should also address those key variable and other
qualitative and quantitative factors that are necessary to an understanding and
evaluation of the issuer. If material, the issuer should disclose the following:
i. Any known trends, events or uncertainties that have or are
reasonably likely to have a material impact on the issuer's shortterm
or long-term liquidity;
ii. Internal and external sources of liquidity;
iii. Any material commitments for capital expenditures and the
expected sources of funds for such expenditures;
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iv. Any known trends, events or uncertainties that have had or that
are reasonably expected to have a material impact on the net
sales or revenues or income from continuing operations;
v. Any significant elements of income or loss that do not arise from
the issuer's continuing operations;
vi. The causes for any material changes from period to period in one
or more line items of the issuer's financial statements; and
vii. Any seasonal aspects that had a material effect on the financial
condition or results of operation.
2. Interim Periods. Provide a comparable discussion that will enable the
reader to assess material changes in financial condition and results of
operations since the end of the last fiscal year and for the comparable interim
period in the preceding year.
C. Off-Balance Sheet Arrangements.
1. In a separately-captioned section, discuss the issuer’s off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on the issuer's financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that is material to investors. The disclosure shall include the
items specified in paragraphs C(1)(i), (ii), (iii) and (iv) of this Item XVII to the
extent necessary to an understanding of such arrangements and effect and
shall also include such other information that the issuer believes is necessary
for such an understanding.
i. The nature and business purpose to the issuer of such off-balance
sheet arrangements;
ii. The importance to the issuer of such off-balance sheet
arrangements in respect of its liquidity, capital resources, market
risk support, credit risk support or other benefits;
iii. The amounts of revenues, expenses and cash flows of the issuer
arising from such arrangements; the nature and amounts of any
interests retained, securities issued and other indebtedness
incurred by the issuer in connection with such arrangements; and
the nature and amounts of any other obligations or liabilities
Version 9.1 Updated on 4/17/2007 Page 29 of 47
(including contingent obligations or liabilities) of the issuer arising
from such arrangements that are or are reasonably likely to
become material and the triggering events or circumstances that
could cause them to arise; and
iv. Any known event, demand, commitment, trend or uncertainty that
will result in or is reasonably likely to result in the termination, or
material reduction in availability to the issuer, of its off-balance
sheet arrangements that provide material benefits to it, and the
course of action that the issuer has taken or proposes to take in
response to any such circumstances.
none
2. As used in paragraph C of this Item XVII, the term off-balance sheet
arrangement means any transaction, agreement or other contractual
arrangement to which an entity unconsolidated with the issuer is a party, under
which the issuer has:
i. Any obligation under a guarantee contract that has any of the
characteristics identified in paragraph 3 of FASB Interpretation
No. 45, Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others (November 2002) ("FIN 45"), as may be modified or
supplemented, and that is not excluded from the initial recognition
and measurement provisions of FIN 45 pursuant to paragraphs 6
or 7 of that Interpretation;
ii. A retained or contingent interest in assets transferred to an
unconsolidated entity or similar arrangement that serves as credit,
liquidity or market risk support to such entity for such assets;
iii. Any obligation, including a contingent obligation, under a contract
that would be accounted for as a derivative instrument, except
that it is both indexed to the issuer's own stock and classified in
stockholders' equity in the issuer's statement of financial position,
and therefore excluded from the scope of FASB Statement of
Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities (June 1998),
pursuant to paragraph 11(a) of that Statement, as may be
modified or supplemented; or
iv. Any obligation, including a contingent obligation, arising out of a
variable interest (as referenced in FASB Interpretation No. 46,
Consolidation of Variable Interest Entities (January 2003), as may
be modified or supplemented) in an unconsolidated entity that is
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held by, and material to, the issuer, where such entity provides
financing, liquidity, market risk or credit risk support to, or engages
in leasing, hedging or research and development services with,
the issuer.
Instructions to paragraph C of Item XVII
i. No obligation to make disclosure under paragraph C of this Item XVII
shall arise in respect of an off-balance sheet arrangement until a
definitive agreement that is unconditionally binding or subject only to
customary closing conditions exists or, if there is no such agreement,
when settlement of the transaction occurs.
ii. Issuers should aggregate off-balance sheet arrangements in groups or
categories that provide material information in an efficient and
understandable manner and should avoid repetition and disclosure of
immaterial information. Effects that are common or similar with respect to
a number of off-balance sheet arrangements must be analyzed in the
aggregate to the extent the aggregation increases understanding.
Distinctions in arrangements and their effects must be discussed to the
extent the information is material, but the discussion should avoid
repetition and disclosure of immaterial information.
iii. For purposes of paragraph C of this Item XVII only, contingent liabilities
arising out of litigation, arbitration or regulatory actions are not
considered to be off-balance sheet arrangements.
iv. Generally, the disclosure required by paragraph C of this Item XVII shall
cover the most recent fiscal year. However, the discussion should
address changes from the previous year where such discussion is
necessary to an understanding of the disclosure.
In satisfying the requirements of paragraph C of this Item XVII, the discussion of offbalance
sheet arrangements need not repeat information provided in the footnotes to
the financial statements, provided that such discussion clearly cross-references to
specific information in the relevant footnotes and integrates the substance of the
footnotes into such discussion in a manner designed to inform readers of the
significance of the information that is not included within the body of such discussion.
Part E Exhibits
Version 9.1 Updated on 4/17/2007 Page 31 of 47
The following exhibits must be either described in or attached to the disclosure document:
Item XVIII Material Contracts.
A. Every material contract, not made in the ordinary course of business, that will
be performed after the disclosure document is posted on the Pink Sheets News
Service or was entered into not more than two years before such posting. Also include
the following contracts:
1) Any contract to which directors, officers, promoters, voting
trustees, security holders named in the disclosure document, or
the Designated Advisor for Disclosure are parties other than
contracts involving only the purchase or sale of current assets
having a determinable market price, at such market price;
2) Any contract upon which the issuer’s business is substantially
dependent, including but not limited to contracts with principal
customers, principal suppliers, and franchise agreements;
3) Any contract for the purchase or sale of any property, plant or
equipment for consideration exceeding 15 percent of such assets
of the issuer; or
4) Any material lease under which a part of the property described in
the disclosure document is held by the issuer.
B. Any management contract or any compensatory plan, contract or arrangement,
including but not limited to plans relating to options, warrants or rights, pension,
retirement or deferred compensation or bonus, incentive or profit sharing (or if not set
forth in any formal document, a written description thereof) in which any director or any
executive officer of the issuer participates shall be deemed material and shall be
included; and any other management contract or any other compensatory plan,
contract, or arrangement in which any other executive officer of the issuer participates
shall be filed unless immaterial in amount or significance.
C. The following management contracts or compensatory plans need not be
included:
1) Ordinary purchase and sales agency agreements;
2) Agreements with managers of stores in a chain organization or
similar organization;
Version 9.1 Updated on 4/17/2007 Page 32 of 47
3) Contracts providing for labor or salesmen’s bonuses or payments
to a class of security holders, as such; and
4) Any compensatory plan that is available to employees, officers or
directors generally and provides for the same method of allocation
of benefits between management and non-management
participants
Item XIX Articles of Incorporation and Bylaws.
A. A complete copy of the issuer’s articles of incorporation or in the event that the
issuer is not a corporation, the issuer’s certificate of organization. Whenever
amendments to the articles of incorporation or certificate of organization are filed, a
complete copy of the articles of incorporation or certificate of organization as amended
shall be filed.
B. A complete copy of the issuer’s bylaws. Whenever amendments to the bylaws
are filed, a complete copy of the bylaws as amended shall be filed.
Item XX Issuer’s Certifications.
The issuer shall include certifications by the chief executive officer and chief financial officer
of the issuer (or any other persons with different titles, but having the same responsibilities).
The certifications shall follow the format below:
I, [identify the certifying individual], certify that:
1. I have reviewed this [specify either annual or quarterly disclosure statement] of [identify
issuer];
2. Based on my knowledge, this disclosure statement does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this disclosure statement; and
3. Based on my knowledge, the financial statements, and other financial information
included or incorporated by reference in this disclosure statement, fairly present in all
material respects the financial condition, results of operations and cash flows of the issuer
as of, and for, the periods presented in this disclosure statement.
Item XX Issuer’s Certifications.
I, Derrick Holmes, Chief Executive Officer of Banneker, Inc., certify that:
1. I have reviewed this initial disclosure statement;
2. Based on my knowledge, this disclosure statement does not contain any
untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this disclosure statement;
and
Date: May 22, 2008
BY: ____________________
Name: Derrick Holmes
Chief Executive Officer
Banneker, Inc.
Attachment A
Share Exchange Agreement (with amendments)
ACQUISITION AGREEMENT
AND
PLAN OF SHARE EXCHANGE
AGREEMENT, made effective this September 12, 2007 (the “Effective Date”) by and
among CUMETRIX DATA SYSTEMS CORP., a California corporation (“CUMETRIX”);
BANNEKER, INC., a Colorado corporation (“BANNEKER”); and the persons executing this
agreement (referred to collectively as “Shareholders” and individually as “Shareholder”) who own at
least 100% of the outstanding shares of BANNEKER.
RECITALS
WHEREAS, CUMETRIX desires to acquire all of the issued and outstanding shares of
common stock of BANNEKER in exchange (the "Exchange") for 10,312,500 shares of common
stock of CUMETRIX (the “Common Stock”); and
WHEREAS, BANNEKER and the Shareholders agree to enter into the Exchange which
shall result in BANNEKER becoming a subsidiary of CUMETRIX with the former Shareholders of
BANNEKER controlling a majority of CUMETRIX; and
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contained herein, the parties hereto intending to be legally bound hereby, agree as
follows:
ARTICLE 1
EXCHANGE OF SECURITIES
1.1 Issuance of Shares. Subject to all of the terms and conditions of this Agreement, the
parties hereto agree that for all of the outstanding shares of BANNEKER common stock exchanged
pursuant to this Agreement by the shareholders of BANNEKER, CUMETRIX shall deliver
10,312,500 shares of common stock of CUMETRIX. It is anticipated that if all of the former
shareholders of BANNEKER shall own 60% of the total issued and outstanding common stock of
CUMETRIX.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF BANNEKER
BANNEKER hereby represents and warrants to CUMETRIX that:
2.1 Organization. BANNEKER is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Colorado, has all necessary corporate powers to carry
on its business as now owned and operated, and is duly qualified to do business and is in good
standing in each of the states and other jurisdictions where its business requires qualification.
2
BANNEKER owns all of the issued and outstanding equity of Esteem Enterprises, Inc., a Colorado
corporation.
2.2 Capital. BANNEKER’S authorized capital presently consists of 10,000 shares of capital
stock issued and outstanding. All issued and outstanding shares have been duly authorized, validly
issued and are fully paid and non-assessable, and subject to no preemptive rights of any shareholder.
2.3 Business Plan. The business plan of BANNEKER (the "Business Plan") delivered to
CUMETRIX accurately describes the business and operations of BANNEKER. BANNEKER has
all right title and interest in options, prospects and property discussed in such Business Plan or
required to undertake the business and operations and manufacture and sell the products described in
such Business Plan.
2.4 Compliance with Laws. BANNEKER has substantially complied with, and is not in
violation of, all applicable federal, state or local statutes, laws and regulations, including, without
limitation, any applicable building, zoning, environmental, employment or other law, ordinance or
regulation affecting its properties, products or the operation of its business except where such noncompliance
would not have a materially adverse effect on the business or financial condition of
BANNEKER. BANNEKER has all licenses and permits required to conduct its business as now
being conducted and as contemplated in its Business Plan heretofore delivered to CUMETRIX
except where such non-compliance would not have a materially adverse effect on the business or
financial condition of BANNEKER.
2.5 Investigation of Financial Condition. Without in any manner reducing or otherwise
mitigating the representations contained herein, CUMETRIX and/or its attorneys shall have the
opportunity to meet with accountants and attorneys to discuss the financial condition of
BANNEKER. BANNEKER shall make available to CUMETRIX and/or its attorneys all books and
records of BANNEKER. If the transaction contemplated hereby is not completed, all documents
received by CUMETRIX and/or its attorneys shall be returned to BANNEKER and all information
so received shall be treated as confidential.
2.6 Litigation. BANNEKER is not a party to any suit, action, arbitration or legal,
administrative or other proceeding, or governmental investigation pending or, to the best knowledge
of BANNEKER, threatened against or affecting BANNEKER or its business, assets or financial
condition, except for matters which would not have a material affect on BANNEKER or its
properties. BANNEKER is not in default with respect to any order, writ, injunction or decree of any
federal, state, local or foreign court, department, agency or instrumentality applicable to it.
BANNEKER is not engaged in any lawsuits to recover any material amount of monies due to it.
2.7 Ownership of Shares. The delivery of BANNEKER Common Stock as contemplated
herein will result in CUMETRIX'S immediate acquisition of record and beneficial ownership of at
least 100% of BANNEKER'S capital stock, free and clear of all liens and encumbrances subject to
applicable State and Federal securities laws. Such shares were duly and validly issued, fully paid
and non-assessable.
3
2.8 Ability to Carry Out Obligations. The execution and delivery of this Agreement by
the Shareholders and BANNEKER and the performance by the Shareholders of the obligations
hereunder in the time and manner contemplated will not cause, constitute or conflict with or result
in: (a) any material breach or violation of any of the provisions of or constitute a material default
under any license, indenture, mortgage, charter, instrument, articles of incorporation, by-laws, or
other agreement or instrument to which BANNEKER is a party, or by which it may be bound, nor
will any consents or authorizations of any party other than those hereto be required, (b) an event that
would permit any party to any material agreement or instrument to terminate it or to accelerate the
maturity of any indebtedness or other obligation of BANNEKER, or (c) an event that would result in
the creation or imposition of any material lien, charge, or encumbrance on any asset of
BANNEKER.
2.9 Assets. BANNEKER has good and marketable title to all of the properties and assets
reflected on its latest balance sheet (except for property and assets disposed of in the ordinary course
of business after the date thereof), free and clear of all liens and encumbrances, except as noted
therein, and except for liens of taxes not delinquent.
2.10 Indemnification. Shareholders (severally in proportion to their shares in BANNEKER
as set forth in Exhibit A) and BANNEKER agree to defend and hold CUMETRIX harmless against
and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries and deficiencies, including interest, penalties, and reasonable attorney fees, that
it shall incur or suffer, which arise out of, result from or relate to any breach of, or failure by
BANNEKER or its Shareholders to perform any of their respective representations, warranties,
covenants and agreements in this Agreement or in any exhibit or other instrument furnished or to be
furnished by Shareholders under this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF COMPREHENSIVE MEDICAL DIAGNOSTICS GROUP, INC.
CUMETRIX represents and warrants to BANNEKER and the Shareholders that:
3.1 Organization. CUMETRIX is a corporation duly organized, validly existing, and in
good standing under the laws of California, has all necessary corporate powers to own its properties
and to carry on its business as now owned and operated, and duly qualified to do business in each of
such states and other jurisdictions where its business requires such qualification. CUMETRIX may
change its domicile to prior to closing. CUMETRIX has heretofore delivered to BANNEKER true
and complete copies of the Certificate of Incorporation (certified by the Secretaries of State or other
appropriate official of its jurisdictions of incorporation) and By-laws (certified by Seller's secretary
or an assistant secretary), or comparable instruments, of CUMETRIX as in effect on the date hereof.
The stock books of CUMETRIX which have been made available to BANNEKER for its inspection
are true and complete. The stockholders are the sole record and beneficial owner of all of the
outstanding capital stock of CUMETRIX and there are no options, warrants or other agreements of
any kind outstanding or proposed to be issued with respect to the capital stock of CUMETRIX.
4
3.2 Capital. At the Closing of the transactions contemplated by this Agreement,
CUMETRIX shall have 17,387,500 shares of common stock outstanding (assuming the exchange of
100% of the issued and outstanding common stock of BANNEKER); and no outstanding warrants,
options or other rights to acquire any equity of CUMETRIX except as specifically set forth herein.
3.3 Business. On or before the closing CUMETRIX shall have no operations.
3.4 Investigation of Financial Condition. Without in any manner reducing or otherwise
mitigating the representations contained herein, Shareholders shall have the opportunity to meet with
CUMETRIX's accountants to discuss the financial condition of CUMETRIX. CUMETRIX shall
make available to Shareholders all books and records of CUMETRIX in its possession and control.
3.5 Compliance with Laws. To the best of the officers and directors of CUMETRIX
knowledge and belief, CUMETRIX has complied with all, and is not in violation of any, applicable
order, judgment, injunction, award, decree or writ (collectively, "Orders"), or any applicable law,
statute, code, ordinance, rule, regulation or other requirement (collectively, "Laws"), including,
without limitation, any applicable building, zoning, environmental or other law, ordinance, or
regulation, of any government or political subdivision thereof, whether federal, state, local or
foreign, or any agency or instrumentality of any such government or political subdivision, or any
court or arbitrator (collectively, "Governmental Bodies") affecting its properties or the operation of
its business, except where non-compliance would not have a materially adverse effect on the
business or operations of CUMETRIX. CUMETRIX has not made any illegal payment to officers or
employees of any Governmental Body, or made any illegal payment to customers for the sharing of
fees or to customers or suppliers for rebating of charges, or engaged in any other illegal reciprocal
practice, or made any illegal payment or given any other illegal consideration to purchasing agents
or other representatives of customers in respect of sales made or to be made by CUMETRIX.
3.6 Litigation. CUMETRIX is not a party to any suit, action, arbitration, or legal,
administrative, or other proceeding, or governmental investigation pending or, to the best knowledge
and belief of CUMETRIX, threatened against or affecting CUMETRIX or its business, assets, or
financial condition. CUMETRIX is not in default with respect to any order, writ, injunction or
decree of any federal, state, local or foreign court, department, agency or instrumentality applicable
to it. CUMETRIX is not engaged in any lawsuits to recover any material amount of monies due to it
except as disclosed herein.
3.7 Authority. The Board of Directors of CUMETRIX has authorized the execution of this
Agreement and the transactions contemplated herein, and when approved by the shareholders of
CUMETRIX it will have full power and authority to execute, deliver and perform this Agreement
and this Agreement will be the legal, valid and binding obligation of CUMETRIX, enforceable
against CUMETRIX in accordance with its terms and conditions, except as may be limited by
bankruptcy and insolvency laws and by other laws affecting the rights of creditors generally.
3.8 Ability to Carry Out Obligations. The execution and delivery of this Agreement by
CUMETRIX and the performance by CUMETRIX will not conflict with or result in (a) any material
breach or violation of any of the provisions of or constitute a default under any license, indenture,
mortgage, charter, instrument, certificate of incorporation, bylaw, or other agreement or instrument
5
to which CUMETRIX is a party, or by which it may be bound, nor will any consents or
authorizations of any government body or other party other than those hereto be required, (b) an
event that would violate, conflict with or result in the breach of any of the terms of, result in a
material modification of the effect of, or otherwise cause the termination of or give any other
contracting party to a contract, agreement, indenture, note, bond, loan, instrument, lease, conditional
sale contract, purchase order, sales order, agreement with customer, agreement with supplier, union
contract, collective bargaining agreement, mortgage, license, permit, franchise, commitment or other
binding arrangement, whether written, oral, express or implied, (“Contract”) the right to terminate,
or constitute (or with notice or lapse of time or both constitute) a default (by way of substitution,
novation or otherwise) under any contract to which CUMETRIX is a party or by or to which it or
any of its properties may be bound or subject, or result in the creation of any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind upon the properties of CUMETRIX or to
accelerate the maturity of any indebtedness or other obligation of CUMETRIX, or (c) an event that
would result in the creation or imposition of any material lien, charge, or encumbrance on any asset
of CUMETRIX.
3.9 Title. The shares of CUMETRIX stock to be issued pursuant to this Agreement will be,
at closing, free and clear of all liens, security interests, pledges, charges, claims encumbrances and
restrictions of any kind. None of such shares of CUMETRIX are or will be subject to voting trusts
or agreements, no person holds or has the right to receive any proxy or similar instrument with
respect to such shares, except as provided in this Agreement. CUMETRIX is not a party to any
agreement that offers or grants to any person the right to purchase or acquire any of the securities to
be issued pursuant to this Agreement. There is no applicable local, state or federal law rule,
regulation or decree which would, as a result of the issuance of the shares of CUMETRIX stock,
impair, restrict or delay any voting rights with respect to the shares of CUMETRIX stock.
3.10 Indemnification. CUMETRIX and the CUMETRIX Shareholder, jointly and severally,
agree to indemnify, defend and hold Shareholders, BANNEKER and BANNEKER’S directors,
officers, employees, affiliates, successors and assigns representatives and agents harmless against
and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries and deficiencies, including interest, penalties, and reasonable attorney fees, that
they shall incur or suffer, which arise out of, result from or relate to any inaccuracy in and any
breach of, or failure by CUMETRIX to perform any of its representations, warranties, covenants and
agreements in this Agreement or in any exhibit or other instrument furnished or to be furnished by
CUMETRIX under this Agreement; and any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including without limitation, reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in enforcing this indemnity.
3.11 Subsidiaries. CUMETRIX will not have any subsidiaries (whether held directly or
indirectly) or any equity investment in any corporation, partnership, joint venture or other business at
the time of closing.
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ARTICLE 4
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
4.1 Share Ownership. The Shareholders hold shares of BANNEKER Common Stock as set
forth in Exhibit A hereto. The shares are owned of record and are held beneficially by each holder
thereof, and such shares are not subject to any lien, encumbrance or pledge. Each Shareholder has
the authority to exchange such shares pursuant to this Agreement.
4.2 Investment Intent. Each Shareholder understands and acknowledges that the shares of
CUMETRIX Common Stock are being offered for exchange in reliance upon the exemption
provided in Section 4(2) of the Securities Act of 1933 (the “Securities Act”) for non-public
offerings; and each Shareholder makes the following representations and warranties with the intent
that the same may be relied upon in determining the suitability of each Shareholder as a purchaser of
securities.
(a) The CUMETRIX Shares are being acquired solely for the account of each
Shareholder, for investment purposes only, and not with a view to, or for sale in connection with,
any distribution thereof and with no present intention of distributing or reselling any part of the
CUMETRIX Shares.
(b) Each Shareholder agrees not to dispose of his CUMETRIX Shares or any portion
thereof unless and until counsel for CUMETRIX shall have determined that the intended disposition
is permissible and does not violate the Securities Act of 1933 (the “1933 Act”) or any applicable
state securities laws, or the rules and regulations thereunder.
(c) Each Shareholder acknowledges that CUMETRIX has made all documentation
pertaining to all aspects of CUMETRIX and the transaction herein available to him/her and to his/her
qualified representative(s), if any, and has offered such person or persons an opportunity to discuss
CUMETRIX and the transaction herein with the officers of CUMETRIX.
4.3 Shareholders and Issued Stock. Exhibit A annexed hereto sets forth the names,
shareholdings and consents of share of common stock which represent at least __% of the total
issued and outstanding common stock of BANNEKER shareholders to this transaction.
4.4 Indemnification. Each Shareholder recognizes that the offer of CUMETRIX Shares to
him/her is based upon his/her representations and warranties set forth and contained herein and
hereby agrees to indemnify and hold harmless CUMETRIX against all liability, costs or expenses
(including reasonable attorney's fees) arising as a result of any misrepresentations made herein by
such Shareholder.
4.5 Restrictive Legend. Each Shareholder agrees that the certificates evidencing the
CUMETRIX Shares acquired pursuant to this Agreement will have a legend placed thereon which
will restrict the sale of said shares for times and upon conditions that are subject to federal and state
securities laws.
7
ARTICLE 5
PRE-CLOSING COVENANTS
5.1 Investigative Rights. From the date of this Agreement each party shall provide to the
other party, and such other party's counsels, accountants, auditors, and other authorized
representatives, full access during normal business hours to all of BANNEKER’S and
CUMETRIX’S properties, books, contracts, commitments, and records for the purpose of examining
the same. Each party shall furnish the other party with any information concerning BANNEKER’S
and CUMETRIX’S affairs as the other party may reasonably request. Either party may terminate
this Agreement by notice in writing to the other party if at any time in the seven day period after this
agreement is signed either party determines in its discretion that the results of such investigation are
such that it no longer wishes to proceed with the Closing and delivers notice terminating this
Agreement.
5.2 Conduct of Business. Prior to the Closing, BANNEKER and CUMETRIX shall each
conduct its business in the normal course, and shall not sell, pledge, or assign any assets, without the
prior written approval of the other party, except in the regular course of business. Neither
BANNEKER nor CUMETRIX shall amend its Articles of Incorporation or Bylaws, declare
dividends, redeem or sell stock or other securities, incur additional or newly-funded liabilities,
acquire or dispose of fixed assets, change employment terms, enter into any material or long-term
contract, guarantee obligations of any third party, settle or discharge any balance sheet receivable for
less than its stated amount, pay more on any liability than its stated amount, or enter into any other
transaction other than in the regular course of business.
ARTICLE 6
POST-CLOSING COVENANTS
6.1 For the one year following the Closing herein:
(a) Change of Shares. CUMETRIX will not decrease its outstanding common stock
shares by reverse stock split, combination, reclassification or other similar event for one year
following the Closing herein.
(b) Issue of Additional Shares. Issuance and sales of CUMETRIX’s securities to
affiliated investors will be on the same terms as offered to non-affiliated investors and shall be for
fair market value, which may include a reasonable discount to the quoted price.
(d) No Interference or Denial of Shares. Post closing, the management of
CUMETRIX will not challenge the ownership rights of any existing shareholders at the time of
closing or in any manner interfere with their right to legally transfer the same.
8
6.2 Prompt resignation of officers and directors: Upon closing all existing CUMETRIX
officers and directors shall have resigned and Derrick M. Holmes shall be elected or appointed as a
director and Chief Executive Officer of CUMETRIX, Tim Hardaway shall be elected or appointed
as a director of CUMETRIX and President.
6.3 Benefit for all CUMETRIX Shareholders: The foregoing provisions of this Article 6
are expressly set forth for the benefit of all shareholders of CUMETRIX and may not be amended or
waived. Any shareholder damaged by a violation of these provisions shall have the right to seek an
injunction and/or damages, including reasonable attorneys’ fees, for such violation.
6.3 CUMETRIX Financing: In the event that CUMETRIX has not raised at least: (i)
$200,000 upon the execution of this Agreement; (ii) an additional $500,000 on or by December 15,
2007; (iii) an additional $500,000 on or by February 15, 2008; and (iii) an additional $1,000,000 on
or by May 15, 2008, the Shareholders may elect by unanimous vote to rescind the transaction with
the effect of an unwinding resulting in the cancellation of the CUMETRIX shares owned by the
Shareholders and BANNEKER no longer being a subsidiary of CUMETRIX.
6.4 CUMETRIX Merger: Upon closing of the transactions contemplated by this agreement
CUMETRIX and BANNEKER shall merge with CUMETRIX being the surviving corporation.
Additionally, CUMETRIX shall change its name to “BANNEKER INC.”
ARTICLE 7
CLOSING
7.1 Closing. The Closing of this transaction shall be held at the offices of CUMETRIX, or
such other place as shall be mutually agreed upon, on such date as shall be mutually agreed upon by
the parties. In the event the Closing herein has not been completed by September 20, 2007 any party
hereto may terminate this agreement and in such event this Agreement shall be null and void. At the
Closing:
(a) Each Shareholder shall present the certificates representing his/her/its shares of
BANNEKER being exchanged to CUMETRIX, and such certificates will be duly endorsed.
(b) Each Shareholder shall receive a certificate or certificates representing the number
of shares of CUMETRIX Common Stock for which the shares of BANNEKER common stock shall
have been exchanged.
(c) Each Shareholder shall receive a certificate or certificates representing the number
of shares of CUMETRIX Preferred Stock for which the shares of BANNEKER common stock shall
have been exchanged.
(d) CUMETRIX shall deliver an officer's certificate dated the Closing Date, that all
representations, warranties, covenants and conditions set forth in this Agreement on behalf of
CUMETRIX are true and correct as of, or have been fully performed and complied with by, the
Closing Date.
9
(e) CUMETRIX shall deliver a signed consent and/or Minutes of the Directors of
CUMETRIX approving this Agreement and each matter to be approved by the Directors of
CUMETRIX under this Agreement.
(f) BANNEKER shall deliver an officer’s certificate dated the Closing Date, that all
representations, warranties, covenants and conditions set forth in this Agreement on behalf of
BANNEKER are true and correct as of, or have been fully performed and complied with by, the
Closing Date.
ARTICLE 8
MISCELLANEOUS
8.1 Captions. The Article and paragraph headings throughout this Agreement are for
convenience and reference only, and shall in no way be deemed to define, limit, or add to the
meaning of any provision of this Agreement.
8.2 No Oral Change. This Agreement and any provision hereof, may not be waived,
changed, modified, or discharged orally, but it can be changed by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification, or discharge is sought.
8.3 Non-Waiver. Except as otherwise expressly provided herein, no waiver of any
covenant, condition, or provision of this Agreement shall be deemed to have been made unless
expressly in writing and signed by the party against whom such waiver is charged; and (i) the failure
of any party to insist in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein contained shall not be
construed as a waiver or relinquishment for the future of any such provisions, covenants, or
conditions, (ii) the acceptance of performance of anything required by this Agreement to be
performed with knowledge of the breach or failure of a covenant, condition, or provision hereof shall
not be deemed a waiver of such breach or failure, and (iii) no waiver by any party of one breach by
another party shall be construed as a waiver with respect to any other or subsequent breach.
8.4 Time of Essence. Time is of the essence of this Agreement and of each and every
provision hereof.
8.5 Entire Agreement. This Agreement contains the entire Agreement and understanding
among the parties hereto, supersedes all prior agreements and understandings, and constitutes a
complete and exclusive statement of the agreements, responsibilities, representations and warranties
of the parties.
8.6 Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
10
8.7 Notices. All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the date of service if
served personally on the party to whom notice is to be given or delivered by a national courier
service, or on the third day after mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, and properly addressed as follows:
To CUMETRIX:
CUMETRIX DATA SYSTEMS CORP.,
33 Clematis St. #217
West Palm Beach, FL 33401
To BANNEKER:
BANNEKER, INC.
1660 South Albion Street Suite 309
Denver, CO 80222
8.8 Binding Effect. This Agreement shall inure to and be binding upon the heirs, executors,
personal representatives, successors and assigns of each of the parties to this Agreement.
8.9 Mutual Cooperation. The parties hereto shall cooperate with each other to achieve the
purpose of this Agreement, and shall execute such other and further documents and take such other
and further actions as may be necessary or convenient to effect the transaction described herein.
8.10 Announcements. CUMETRIX and Shareholders will consult and cooperate with each
other as to the timing and content of any announcements of the transactions contemplated hereby to
the general public or to employees, customers or suppliers.
8.11 Expenses. Each party will pay its own legal, accounting and any other out-of-pocket
expenses reasonably incurred in connection with this transaction, whether or not the transaction
contemplated hereby is consummated.
8.12 Brokerage. BANNEKER, CUMETRIX and Shareholders each represent that no finder,
broker, investment banker or other similar person has been involved in this transaction. Each party
agrees to indemnify and hold the others harmless from payment of any brokerage fee, finder’s fee or
commission claimed by any other person or entity who claims to have been involved in the
transaction herein because of an association with such party.
8.13 Survival of Representations and Warranties. The representations and warranties of
the parties set forth in this Agreement or in any instrument, certificate, opinion, or other writing
providing for it, shall survive the Closing irrespective of any investigation made by or on behalf of
any party for a period of one year. Notwithstanding anything contained herein, any obligation to
indemnify pursuant to a claim given within the applicable period hereunder shall continue in effect
until such indemnification obligation is satisfied.
8.14 Exhibits. As of the execution hereof, the parties hereto have provided each other with
the Exhibits provided for hereinabove, including any items referenced therein or required to be
11
attached thereto. Any material changes to the Exhibits shall be immediately disclosed to the other
party.
8.15 Arbitration of Disputes. Any dispute or controversy arising out of or relating to this
Agreement, any document or instrument delivered pursuant to, in connection with, or simultaneously
with this Agreement, or any breach of this Agreement or any such document or instrument shall be
settled by arbitration in accordance with the rules then in effect of the American Arbitration
Association or any successor thereto. The arbitrator may grant injunctions or other relief in such
dispute or controversy. The decision of the arbitration shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court having
jurisdiction. Each party in such arbitration shall pay their respective costs and expenses of such
arbitration and all the reasonable attorneys' fees and expenses of their respective counsel.
8.16 Facsimile Execution. This Agreement may be executed in counterparts by original or
telefax signatures, and all counterparts of this Agreement which are executed by telefax signature
shall be valid and binding as original signatures for all purposes.
8.17 Choice of Law. This Agreement and its application shall be governed by the laws of
the state of New York.
(SIGNATURE PAGE TO FOLLOW)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their authorized representatives, all as of the date first written above.
CUMETRIX DATA SYSTEMS CORP.
(a California corporation)
By: /s/
David Levy, President;
BANNEKER, INC. (a Colorado corporation)
By: /s/
Derrick M. Holmes, CEO
SHAREHOLDERS:
_________/s/___________________________
Name: Derrick M. Holmes
1
FIRST AMENDMENT TO
AGREEMENT
This FIRST AMENDMENT TO AGREEMENT (the "Amendment"), dated as of
November 30, 2007, by and among by and among CUMETRIX DATA SYSTEMS CORP., a
California corporation (“CUMETRIX”); BANNEKER, INC., a Colorado corporation
(“BANNEKER”); and the persons executing this agreement (referred to collectively as
“Shareholders” and individually as “Shareholder”) who own at least 100% of the outstanding
shares of BANNEKER
WHEREAS, CUMETRIX, BANNEKER, and the Shareholders entered into an
Agreement and Plan of Merger dated September 12, 2007 (the "Agreement") pursuant to which
the Shareholders would exchange their shares of BANNEKER for shares of CUMERTIX
resulting in BANNEKER becoming a wholly owned subsidiary of CUMETRIX; and
WHEREAS, the parties desire to amend the Agreement as set forth herein;
NOW THEREFORE, in consideration of the premises and of the mutual agreements and
covenants hereinafter set forth, the parties hereto agree as follows:
1. Capitalized terms used in this Amendment have meanings ascribed to them in the
Agreement and those definitions are incorporated by reference into this Amendment.
2. Section 6.3 of the Agreement is hereby deleted in its entirety and replaced with the
following:
“6.3 CUMETRIX Financing: In the event that CUMETRIX has not raised at least: (i)
$200,000 upon the execution of this Agreement which is hereby acknowledged a
received by CUMETRIX; (ii) an additional $200,000 on or by November 30, 2007; (iii)
an additional $300,000 on or by February 1, 2008; (iii) an additional $500,000 on or by
February 15, 2008; and (iii) an additional $1,000,000 on or by May 15, 2008, the
Shareholders may elect by unanimous vote to rescind the transaction with the effect of an
unwinding resulting in the cancellation of the CUMETRIX shares owned by the
Shareholders and BANNEKER no longer being a subsidiary of CUMETRIX.”
3. Counterparts. This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original as against the party whose signature appears thereon, and all
of which shall together constitute one and the same instrument. This Amendment shall become
binding when one or more counterparts hereof, individually or taken together, shall bear the
signatures of all the parties reflected hereon as the signatories.
4. Governing Law. This Amendment shall be governed and construed in accordance with
the laws of the State of New York applicable to agreements made and to be performed entirely
within such State and the federal laws of the United States of America, without regard to the
conflict of laws rules thereof.
2
IN WITNESS WHEREOF, the undersigned have executed this Amendment as
of the date set forth above.
CUMETRIX DATA SYSTEMS CORP.
(a California corporation)
By: /s/
David Levy, President;
BANNEKER, INC. (a Colorado corporation)
By: /s/
Derrick M. Holmes, CEO
SHAREHOLDERS:
________________/s/____________________
Name: Derrick M. Holmes
1
SECOND AMENDMENT TO
ACQUISITION AGREEMENT AND PLAN OF SHARE EXCHANGE
This SECOND AMENDMENT TO ACQUISITION AGREEMENT AND PLAN
OF SHARE EXCHANGE (the "Amendment"), dated as of March 11, 2008, by and among by
and between BANNEKER, INC. f/k/a CUMETRIX DATA SYSTEMS CORP., a California
corporation ("Buyer"); BANNEKER, INC., a Colorado corporation ("Seller"); and the persons
executing the Agreement (“Shareholder”) who own the majority of the issued and outstanding
shares of Seller.
WHEREAS, Shareholder, Buyer and Seller entered into an Acquisition Agreement and
Plan of Share Exchange dated September 12, 2007, as amended (the "Agreement") pursuant to
which the shareholders of Seller would exchange their shares of common stock of Seller for
shares of common stock of Buyer; and
WHEREAS, the parties desire to amend the Agreement as set forth herein;
NOW THEREFORE, in consideration of the premises and of the mutual agreements and
covenants hereinafter set forth, the parties hereto agree as follows:
1. Capitalized terms used in this Amendment have meanings ascribed to them in the
Agreement and those definitions are incorporated by reference into this Amendment.
2. Section 1.1 is hereby deleted in its entirety and replaced with the following:
" Issuance of Shares. Subject to all of the terms and conditions of this Agreement, the
parties hereto agree that for all of the outstanding shares of BANNEKER common stock
exchanged pursuant to this Agreement by the shareholders of BANNEKER, CUMETRIX shall
deliver 31,312,500 shares of common stock of CUMETRIX. It is anticipated that if all of the
former shareholders of BANNEKER shall own at least 80% of the total issued and outstanding
common stock of CUMETRIX."
3. Section 6.3 is hereby deleted in its entirety and replaced with the following:
“CUMETRIX Financing: In the event that CUMETRIX has not raised at least: (i)
$200,000 upon the execution of this Agreement; (ii) an additional $300,000 on or by March 1,
2008; and (iii) an additional $500,000 on or by April 14, 2008, the Shareholders may elect by
unanimous vote to rescind the transaction with the effect of an unwinding resulting in the
cancellation of the CUMETRIX shares owned by the Shareholders and BANNEKER no longer
being a subsidiary of CUMETRIX.”
2
4. Exhibit A is hereby deleted in its entirety and replaced with the following:
Name of Shareholders Number of
Shares of CUMETRIX DATA SYSTEMS CORP.
Derrick M. Holmes
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
25,950,000
Thor Construction
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
515,625
Brian Dale
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
515,625
Alfred Babbington Johnson
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
515,625
Thor Construction
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
515,625
Tim Hardaway
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
1,546,875
Charles Riehle
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
515,625
Brian Simpson
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
206,250
3
Dave Herda
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
154,688
Ron Hunter
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
206,250
Sherry Nuness
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
309,375
Teneshia Jackson
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
103,125
Bee Harris
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
51,563
Art Valdez
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
103,125
Maurice Nunnally
c/o Banneker, Inc.
1660 S. Albion St. Suite 309
Denver, Co. 80222
103,125
5. Counterparts. This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original as against the party whose signature appears thereon, and all
of which shall together constitute one and the same instrument. This Amendment shall become
binding when one or more counterparts hereof, individually or taken together, shall bear the
signatures of all the parties reflected hereon as the signatories.
6. Governing Law. This Amendment shall be governed and construed in accordance with
4
the laws of the State of New York applicable to agreements made and to be performed entirely
within such State and the federal laws of the United States of America, without regard to the
conflict of laws rules thereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
5
IN WITNESS WHEREOF, the undersigned have executed this Amendment as
of the date set forth above.
BUYER:
BANNEKER F/K/A CUMETRIX DATA
SYSTEMS CORP. (a California corporation)
By: / /s/
Derrick M. Holmes, CEO
BANNEKER, INC. (a Colorado corporation)
By: /s/
Derrick M. Holmes, CEO
SHAREHOLDER:
______________/s/__________________________
Derrick M. Holmes
Attachment B
Articles of Incorporation (including Amendments thereto)












Attachment C
By‐Laws
1
BY-LAWS
OF
BANNEKER, INC.
a California Corporation
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office for the transaction of the business of the
corporation shall be as designated by the Board of Directors. The Board of Directors is hereby
granted full power and authority to change said principal office from one location to another in
said state. Any such change shall be noted in the by-laws by the Secretary, opposite this section,
or this section may be amended to state the new location.
Section 2. Other Offices. Branch or subordinate offices may at any time be established
by the Board of Directors at any place or places where the corporation is qualified to do business
or the business of the corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. All annual meetings of shareholders and all other
meetings of shareholders shall be held either at the principal office of the corporation or at any
other place within or without the State of California as may be designated either by the Board of
Directors pursuant to authority hereinafter granted to said Board or by the written consent of the
shareholders entitled to vote at such meeting holding at least a majority of such shares given
either before or after the meeting and filed with the Secretary of the corporation.
Section 2. Annual Meetings. The annual meetings of shareholders shall be held on such
date not less than sixty (60) nor more than three hundred sixty (360) days after the end of the
corporation's last preceding fiscal year, as the Board of Directors shall prescribe; provided, that if
in any such year the annual meeting shall not have been held within such period, then it shall be
held at 10:00 a.m. on the first Tuesday in the second month after the end of the three hundred
sixty (360) day period; provided, however, that should said day fall on a legal holiday, then any
such annual meeting of shareholders shall be held at the same time and place on the next day
thereafter ensuing which is a full business day. Any such annual meeting may be held at any
other time which may be designated in a resolution by the Board of Directors or by the written
consent of the shareholders entitled to vote at such meeting holding at least a majority of such
shares. At such annual meeting, directors shall be elected, reports of the affairs of the
corporation shall be considered, and any other business may be transacted which is within the
powers of the shareholders to transact and which may be properly brought before the meeting.
Written notice of each annual meeting shall be given to each shareholder entitled to vote,
either personally or by mail or other means of written communication, charges prepaid,
addressed to such shareholder at his address appearing on the books of the corporation or given
by him to the corporation for the purpose of notice. If a shareholder gives no address, notice
shall be deemed to have been given him if sent by mail or other means of written communication
2
addressed to the place where the principal office of the corporation is situated. All such notices
shall be sent to each shareholder entitled thereto not less than thirty (30) nor more than sixty (60)
days before each annual meeting.
Section 3. Special Meetings. Special meetings of the shareholders for any purpose or
purposes, unless otherwise prescribed by statute, may be called at any time by any Director, or
by resolution of the Board of Directors, or by one or more shareholders holding not less than
twenty percent (20%) of the issued and outstanding voting shares of the corporation, or such
meeting may be held at any time without call or notice upon unanimous consent of the
shareholders. Except in special cases where other express provision is made by statute, notice of
such special meetings shall be given in the same manner and pursuant to the same notice
provisions as for annual meetings of shareholders. Notices or any special meeting shall state, in
addition to the place, day and hour of such meeting, the purpose or purposes of the meeting.
Business transacted at any special meeting of shareholders shall be limited to the purposes stated
in the notice.
Section 4. List of Shareholders Entitled to Vote. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of
shareholders, a complete list of the shareholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each shareholder and the number of shares
registered in the name of each shareholder. Such list shall be open to the examination of any
shareholder for any purpose germane to the meeting during ordinary business hours for a period
of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is
to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at
the place where the meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof, and may be inspected by any shareholder
who is present.
Section 5. Quorum. The holders of one-third (1/3) of the stock 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 statute or the Certificate of Incorporation of the corporation. When a quorum is present at any
meeting, a majority of the shares represented thereat and entitled to vote thereat shall decide any
question brought before such meeting. The shareholders present at a duly called or held meeting
at which a quorum is present may continue to do business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
Section 6. Voting. At each meeting of shareholders each shareholder entitled to vote
shall vote in person or by proxy and he shall have one (1) vote for each share standing registered
in his name at the closing of the transfer books for such meeting, or the record date fixed for such
meeting by the Board of Directors, as the case may be, or standing registered in his name at the
time of such meeting if neither a date for the closing of the transfer books nor a record date for
such meeting has been fixed by the Board of Directors.
Section 7. Consent of Absentees. The transaction of any meeting of shareholders, either
annual or special, however called and noticed, shall be as valid as though had at a meeting duly
held after regular call and notice, if a quorum be present either in person or by proxy, and if,
3
either before or after the meeting, each of the persons entitled to vote, not present in person, or
by proxy, signs a written waiver of notice, or a consent to the holding of such meeting, or an
approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
Section 8. Action Without Meeting. Any action which, under any provisions of the laws
of the State of California or under the provisions of the Certificate of Incorporation or under
these by-laws may be taken at a meeting of the shareholders, may be taken without a meeting if a
record or memorandum thereof be made in writing and signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary to authorize or
take the action at a meeting for such purpose, and such record or memorandum be filed with the
Secretary of the corporation and made a part of the corporate records.
Section 9. Proxies. Any shareholder entitled to vote or execute consents shall have the
right to do so either in person or by one or more agents authorized by proxy. The appointment of
a proxy shall be in writing and signed by the shareholder but shall require no other attestation
and shall be filed with the Secretary of the corporation at or prior to the meeting. The
termination of a proxy's authority by act of the shareholder shall, subject to the time limitation
herein set forth, be ineffective until written notice of the termination has been given to the
Secretary of the corporation. Unless otherwise provided therein, an appointment filed with the
Secretary shall have the effect of revoking all proxy appointments of prior date.
ARTICLE III
DIRECTORS
Section 1. Powers. Subject to limitations of the Certificate of Incorporation, of the bylaws
and of the laws of the State of California as to action to be authorized or approved by the
shareholders, and subject to the duties of directors as prescribed by the by-laws, all corporate
powers shall be exercised by or under the authority of, and the business and affairs of the
corporation shall be controlled by, the Board of Directors.
Section 2. Number, Election and Term of Office. The number of directors which shall
constitute the whole Board shall be not less than one (1) nor more than nine (9) and
subsequently, such number as may fixed from time to time by the Board of Directors. The
directors shall be elected at each annual meeting of the shareholders; however, if any such annual
meeting is not held or the directors are not elected thereat, the directors may be elected at any
special meeting of shareholders held for that purpose. All directors shall hold office until their
respective successors are elected. In the absence of a shareholders meeting, the current board
may appoint a director or directors until their respective successors are elected by a meeting of
the shareholders.
Section 3. Vacancies. Vacancies as well as authorized but unfilled board positions on
the Board of Directors may be filled by a majority of the directors then in office, though less than
a quorum, or by a sole remaining director, and each director so elected shall hold office until his
successor is elected at an annual or a special meeting of the shareholders.
4
Section 4. Removal. Except as otherwise provided in the Certificate of Incorporation,
By-Laws or by statute, the entire Board of Directors or any individual director may be removed
from office with or without cause by vote of shareholders holding a majority of the outstanding
shares entitled to vote at any annual or special meeting of shareholders. In case the entire Board
or any one or more directors be so removed, new directors may be elected at the same meeting of
shareholders. A director may be removed by a majority of the directors then in office, but such
removal shall be confirmed by a vote of a shareholders holding a majority of the outstanding
shares entitles to vote at any annual or special meeting of shareholders.
Section 5. Place of Meetings. Regular meetings of Board of Directors shall be held at
any place within or without the State of California as may be designated from time to time by
resolution of the Board of Directors or by the written consent of all members of the Board. In
the absence of such designation, regular meetings shall be held at the principal office of the
corporation. Special meetings of the Board may be held either at a place so designated or at the
principal office.
Section 6. Regular Meetings. A regular annual meetings of the Board of Directors for
the purpose of election of officers of the corporation and the transaction of any other business
coming before such meeting shall be held each year immediately following the adjournment of
the annual shareholder's meeting and no notice of such meeting to the elected directors shall be
necessary in order to legally constitute the meeting, provided a majority of the whole Board shall
be present. If a majority of the Board shall not be present, then such regular annual meeting may
be held at such time as shall be fixed by the consent, in writing, of all of the directors. Other
regular meetings of the Board may be held without notice at such time as shall from time to time
be determined by the Board.
Section 7. Special Meetings. Special meetings of the Board of Directors for any purpose
or purposes shall be called at any time by the President or, if he is absent or unable to act, by any
Vice President or by any two upon three (3) days written notice. No business shall be considered
at any special meeting other than the purposes stated in the notice given to each director of the
meeting, except upon the unanimous consent of all directors. A special meeting may be called
with less than three (3) days written notice upon the unanimous consent of all Directors.
Section 8. Waiver of Notice. Any action taken or approved at any meeting of the Board
of Directors, however called and noticed or wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice, if a quorum be present and if, either before or
after the meeting, each of the directors not present signs a written waiver of notice, or a consent
to the holding of such meeting, or an approval of the minutes thereof. All such waivers, consents
or approvals shall be filed with the corporate records or made a part of the minutes of the
meeting. If a director does not receive notice of a meeting, but attends and participates in the
meeting, he shall be deemed to have waived notice of the meeting.
Section 9. Quorum. At all meetings of the Board, a quorum shall consist of a majority of
the entire number of directors and the acts of a majority of the directors present shall be the acts
of the Board of Directors except as may be otherwise specifically provided by statute or by the
Certificate of Incorporation of the corporation or by these by-laws.
5
Section 10. Fees and Compensation. The Board of Directors may from time to time fix
the compensation of directors for their services in that capacity. The compensation of a director
may consist of an annual fee or a fee for attendance at each regular or special meeting of the
Board or any meeting of any committee of the Board of which such director is a member or a
combination of fees of both types; provided, that nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity and receiving
compensation therefor. The Board may also provide for the reimbursement to any director of
expenses incurred in attending any meeting of the Board or any committee of the Board of which
he is a member.
Section 11. Action Without Meeting. Any action required or permitted to be taken at a
meeting of the Board of Directors may be taken without a meeting if a majority of the members
of the Board shall individually or collectively consent to such action by signing a written record
or memorandum thereof. Such record or memorandum shall have the same effect as a
unanimous vote of the Board of Directors and shall be filed with the Secretary of the corporation
and made a part of the corporate records.
Section 12. Participation in Meetings by Telephone. Any one or more members of the
Board of Directors or of any committee of the Board may participate in a meeting of the Board
or committee by means of conference telephone or similar communications equipment allowing
all persons participating in the meeting to hear each other at the same time. Participation by such
means shall constitute presence in person at a meeting.
ARTICLE IV
EXECUTIVE COMMITTEE
Section 1. Election. At the annual meeting, or any special meeting of the Board of
Directors, the Board may if it deems necessary, acting by resolution adopted by a majority of the
number of directors fixed by these by-laws, elect from their own members an Executive
Committee composed of three or more voting members.
Section 2. Duties. The Executive Committee shall have all of the powers of the directors
in the interim between meetings of the Board, except the power to declare dividends and to
adopt, amend or repeal the by-laws and where action of the Board of Directors is required by
law. It shall keep regular minutes of its proceedings which shall be reported to the directors at
their next meeting.
Section 3. Meetings. The Executive Committee shall meet at such times as may be fixed
by the Committee or on the call of the President. Notice of the time and place of the meeting
shall be given to each member of the Committee in the manner provided for the giving of notice
to members of the Board of Directors of the time and place of special meetings of the Board of
Directors.
Section 4. Quorum and Voting. A majority of the members of the Executive Committee
shall constitute a quorum for the transaction of business. The act of the majority of the members
of the Executive Committee present at a meeting at which a quorum is present shall be the act of
6
the Executive Committee. At all meetings of the Executive Committee, each member present
shall have one (1) vote which shall be cast by him in person.
Section 5. Waiver of Notice. Any actions taken or approved at any meeting of the
Executive Committee, however called and noticed or wherever held, shall be as valid as though
had at a meeting duly held after regular call and notice, if a quorum be present and if, either
before or after the meeting, each of the members not present signs a written waiver of notice or a
consent to holding such meeting or an approval of the minutes thereof.
Section 6. Removal. The entire Executive Committee or any individual member thereof
may be removed from the Committee with or without cause by a vote of a majority of the whole
Board of Directors.
Section 7. Vacancies. The Board of Directors shall fill all vacancies in the Executive
Committee which may occur from time to time.
Section 8. Action Without Meeting. Any action which might be taken at a meeting of
the Executive Committee may be taken without a meeting if a record or memorandum thereof be
made in writing and signed by a majority of the members of the Executive Committee.
ARTICLE V
COMMITTEES OF DIRECTORS
Section 1. Designation. The Board of Directors may, by resolution passed by a majority
of the whole Board, designate one or more committees, in addition to the Executive Committee
provided for in Article IV hereof, each committee to consist of two or more of the directors of
the corporation, which to the extent provided in the resolution, shall have and may exercise the
powers of the Board of Directors in the management of the business and affairs of the
corporation, except where action of the Board of Directors is required by law, and may authorize
the seal of the corporation to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be determined from time to time by
resolution adopted by the Board of Directors.
Section 2. Procedural Rules. Each committee shall comply with the same procedural
rules set forth in Sections 3 through 8, both inclusive, of Article IV that are applicable to the
Executive Committee.
7
ARTICLE VI
OFFICERS
Section 1. Officers and Qualifications. The officers of the corporation shall be a
President, a Secretary, a Treasurer and such other officers as the Board of Directors may deem
necessary or advisable, including but not limited to a Chairman of the Board, a Vice Chairman of
the Board, an Executive Vice President, one or more Vice Presidents, one or more Assistant
Secretaries, one or more Assistant Treasurers, and such other officers as may be appointed in
accordance with the provisions Section 3 or Section 5 of this Article. One person may hold two
or more offices.
Section 2. Election. The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Section 3 or Section 5 of this Article, shall be
chosen annually by the Board of Directors, and each shall hold his office until he shall resign or
shall be removed or otherwise disqualified to serve, or his successor shall be elected and
qualified.
Section 3. Subordinate Officers. The Board of Directors may appoint, and may
empower the President to appoint, such other officers as the business of the corporation may
require, each of whom shall hold office for such period, have such authority and perform such
duties as are provided in the by-laws or as the Board of Directors may from time to time
determine.
Section 4. Removal and Resignation. Any officer may be removed, either with or
without cause, by the Board of Directors, at any regular or special meeting thereof, or, except in
case of an officer chosen by the Board of Directors, by any officer upon whom such power of
removal may be conferred by the Board of Directors.
Section 5. Vacancies. A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in the by-laws for
regular appointments to such office.
Section 6. Duties of Officers. The duties and powers of the officers of the corporation
shall be as follows, and as shall hereafter be set by resolution of the Board of Directors:
Chairman of the Board. The Chairman of the Board shall have full voting rights and
upon a tie vote, shall have the breaking casting vote on all matters and shall, if present, preside at
all meetings of the Board of Directors and its committees and exercise and perform such other
powers and duties as may be from time to time assigned to him by the Board of Directors or
prescribed by the by-laws. The President, in addition to reporting to the Board of Directors, shall
report to the Chairman as deemed appropriate by the Board of Directors.
President. Subject to such powers and duties, if any, as may be assigned by the Board of
Directors to the Chairman of the Board, the President shall be the Chief Executive Officer of the
corporation and shall, subject to the control of the Board of Directors, have general supervision,
direction and control of the business and officers of the corporation.
8
Vice President. In the absence or disability of the President and also the Chairman, the
Vice Presidents in order of their rank as fixed by the Board of Directors, shall perform all 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 Presidents shall have such other powers and perform
such other duties as from time to time may be prescribed for them respectively by the Board of
Directors or the by-laws. The Board of Directors may designate such titles as may be descriptive
of their respective functions or indicative of their relative seniority.
Secretary. The Secretary shall keep or cause to be kept, at the principal office of the
corporation or such other place as the Board of Directors may order, a book of minutes of all
meetings of directors and shareholders, with the time and place of holding, whether regular or
special, and, if special, how authorized, notice thereof given, the names of those present at
directors' meetings, the number of shares present or represented at shareholders' meetings, and
the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office of the corporation or
at the office of the corporation's transfer agent, a share ledger, or a duplicate share ledger,
showing the names of the shareholders and their addresses, the number and classes of shares held
by each, the number and date of certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all meetings of the shareholders
and of the Board of Directors required by the by-laws or by law to be given, and he shall keep
the seal of the corporation in safe custody. He shall also sign, with the President or Vice
President, all contracts, deeds, licenses and other instruments when so ordered. He shall make
such reports to the Board of Directors as they may request and shall also prepare such reports
and statements as are required by the laws of the State of California and shall perform such other
duties as may be prescribed by the Board of Directors or by the by-laws.
The Secretary shall allow any shareholder, on application, during normal business hours,
to inspect the share ledger. He shall attend to such correspondence and perform such other
duties as may be incidental to his office or as may be properly assigned to him by the Board of
Directors.
The Assistant Secretary or Secretaries shall perform the duties of the Secretary in the case
of his absence or disability and such other duties as may be specified by the Board of Directors.
Treasurer. The Treasurer shall keep and maintain, or cause to be kept and maintained,
adequate and correct accounts of the properties and business transactions of the corporation,
including account of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus
and shares. The books of account shall at all reasonable times be open to inspection by any
director.
The Treasurer shall deposit all monies and other valuables in the name and to the credit
of the corporation with such depositories may be designated by the Board of Directors. He shall
disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to
the President and directors, whenever they request it, an account of all of his transactions as
9
Treasurer and of the financial condition of the corporation, and shall have such other powers and
perform such other duties as may be prescribed by the Board of Directors or the by-laws.
The Assistant Treasurer or Treasurers shall perform the duties of the Treasurer in the
event of his absence or disability and such other duties as the Board of Directors may determine.
Section 7. Delegation of Duties. In case of the absence or disability of any officer of the
corporation or for any other reason that the Board of Directors may deem sufficient, the Board of
Directors may, by a vote of a majority of the whole Board, delegate, for the time being, the
powers or duties, or any of them, of such officer to any other officer or to any director.
ARTICLE VII
SHARES OF STOCK
Section 1. Certificates of Stock. A certificate or certificates shares of capital stock of the
corporation shall be issued to each shareholder, showing the number of the shares of the
corporation standing on the books in his name. All such certificates shall be signed by the
President or a Vice President and the Secretary or an Assistant Secretary, or be authenticated by
facsimiles of the signatures of the President and Secretary or by a facsimile of the signature of
the President and a written signature of the Secretary or an Assistant Secretary. Every certificate
authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer
clerk. Even though an officer who signed, or whose facsimile signature has been written, printed
or stamped on, a certificate for shares shall have ceased by death, resignation or otherwise to be
an officer of the corporation before such certificate delivered by the corporation, such certificate
shall be as valid as though signed by a duly elected, qualified and authorized officer, if it be
countersigned by a transfer agent or transfer clerk and registered by an incorporated bank or trust
company as registrar of transfer. Such certificates shall also be numbered and sealed with the
seal of the corporation. Such seal may be a facsimile, engraved or imprinted.
Section 2. Record of Shareholders; Transfer of Shares. There shall be kept at the
registered office of the corporation a record containing the names and addresses of all
shareholders of the corporation, the number and class of shares held by each and the dates when
they respectively became the owners of record thereof; provided, however, that the foregoing
shall not be required if the corporation shall keep at its registered office a statement containing
the name and post office address, including street number, if any, of the custodian of such record.
Duplicate lists may be kept in such other state or states as may, from time to time, be determined
by the Board. Transfers of stock of the corporation shall be made on the books of the
corporation only upon authorization by the registered holder thereof or by his attorney lawfully
constituted in writing and on surrender and cancellation of a certificate or certificates for a like
number of shares of the same class properly endorsed or accompanied by a duly executed proof
of authenticity of the signatures as the corporation or its transfer agents may reasonably require.
Section 3. Fixing Record Date. In order that the corporation may determine the
shareholders entitled to notice of or to vote at any meeting of the shareholders or any
adjournment thereof, or to express consent to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other distribution or allotment or any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange of stock or for
10
the purpose of any other lawful action, the Board of Directors may fix in advance, a record date,
which shall not be more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action. A determination of
shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to
any adjournment of the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
Section 4. Registered Shareholders. The corporation shall be entitled to recognize the
holder of record of any share or shares of stock as the exclusive owner thereof for all purposes,
and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in
such shares on the part of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by law.
Section 5. Lost Certificates. Except as hereinafter in this section provided, no new
certificate for shares shall be issued in lieu of an old one unless the latter is surrendered and
canceled at the same time. The Board of Directors may, however, in case any certificate for
shares is lost, stolen, mutilated or destroyed, authorize the issuance of a new certificate in lieu
thereof, upon such terms and conditions including indemnification of the corporation reasonably
satisfactory to it, as the Board shall determine.
Section 6. Regulations; Appointment of Transfer Agents and Registrars. The Board may
make such rules and regulations as it may deem expedient concerning the issuance, transfer and
registration of certificates for shares of stock. It may appoint one or more transfer agents or
registrars of transfers, or both, and may require all certificates of stock to bear the signature of
either or both.
Section 7. Treasury Shares. Treasury shares, or other shares not at the time issued and
outstanding, shall not, directly or indirectly, be voted at any meeting of the shareholders, or
counted in calculating the actual voting power of shareholders at any given time.
ARTICLE VIII
MISCELLANEOUS
Section 1. Fiscal Year. The fiscal year of the corporation shall be the calendar year
unless otherwise determined by the Board.
Section 2. Seal. The corporate seal shall be a device containing the name of the
corporation, the year, and the words "Corporate Seal, California."
Section 3. Annual Report. An Annual Report may be furnished to the shareholders at the
request of the directors but same shall not be required.
Section 4. Inspection of Corporation Records. The share ledger or duplicate share
ledger, the books of account, copy of the by-laws as amended certified by the Secretary, and
minute of proceedings of the shareholders and directors and of the Executive Committee and
11
other committees of the Board of Directors shall be open to inspection upon the written demand
of any shareholder or holder or as the holder of a voting trust certificate and shall be exhibited at
any time when required by the demand of ten percent (10%) of the shares represented at any
shareholders' meeting. Such inspection may be made in person or by an agent or attorney and
shall include the right to make extracts. Demand of inspection other than at a shareholders'
meeting shall be made in writing upon the President, Secretary or Assistant Secretary of the
corporation.
Section 5. Dividends. Dividends upon the shares of the capital stock of the corporation
may be declared and paid, when earned, to the extent permitted by the laws of the State of
California by the Board of Directors in their discretion at any regular or special meeting.
Dividends may be paid in cash, in property, or in shares of capital stock.
ARTICLE IX
NOTICES
Section 1. Form of Notices. Whenever, under the provisions of these by-laws, notice is
required to be given to any director, officer or shareholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, by depositing the same in the
United States Mail in a postpaid sealed wrapper, addressed to such director, officer or
shareholder at such address as appears on the books of the corporation, or, in default of other
address, to such director, officer or shareholder at the general post office in the city where the
corporation's principal office for the transaction of business is located, and such notice be
deemed to be given at the time when the same shall be thus mailed.
Section 2. Waiver of Notice. Any shareholder, director or officer may waive any notice
required to be given under these by-laws by a written waiver signed by the person, or persons,
entitled to such notice, whether before or after the time stated therein, and such waiver shall be
deemed equivalent to the actual giving of such notice.
ARTICLE X
AMENDMENTS
Section 1. Who May Amend. These by-laws may be amended, altered, changed or
repealed by the affirmative vote of a majority of the shares issued and outstanding, and entitled
to vote thereat, at any regular or special meeting of the shareholders if notice of the proposed
amendment, alteration, change or repeal be contained in the notice of the meeting, or by the
affirmative vote of the majority of the Board of Directors at any regular or special meeting of the
Board of Directors; provided, however, that the Board of Directors shall have no power to adopt,
amend or alter any by-laws fixing their number, qualifications, classifications, term of office or
the right of the shareholders to remove them from office.
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ARTICLE XI
INDEMNIFICATION
Section 1. Indemnification of Officers, Directors, Employees and Agents of the
Corporation. The corporation shall indemnify its officers, directors, employees and agents to the
extent permitted by the California law.
Section 2. Nonexclusive Indemnification. The indemnification provided by this Article
XI shall not be deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any agreement, vote of shareholders or disinterested directors otherwise, both
as to action in his official capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a person.
Section 3. Insurance. The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this Article XI.
Section 4. Constituent Corporation. For the purposes of this Article, references to "the
corporation" include all constituent corporations absorbed in a consolidation or merger as well as
the resulting or surviving corporation so that any person who is or was a director, officer,
employee or agent of such a constituent corporation or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise shall stand in the same position under the
provisions of this Article XI with respect to the resulting or surviving corporation as he would if
he had served the resulting or surviving corporation in the same capacity.