SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of
The Securities and Exchange Act of 1934
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U.S.A. SUNRISE BEVERAGES, INC.
(Exact name of registrant as specified in its charter)
South Dakota 46-0439668
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
P.O. Box 938 Spearfish, SD 57783
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(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code:
(605) 642-5560
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Securities to be registered pursuant to Section 12(b)
of the Act:
None
Securities to be registered pursuant to Section 12(g)
of the Act:
Common Stock, par value $0.01 per share
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(Title of Class)
Class A Voting Preferred, par value $0.01 per share
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(Title of Class)
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TABLE OF CONTENTS
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TOPIC PAGE
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ITEM 1. BUSINESS
(a) General Development of Business 1
(b) Narrative Description of Business 6
(c) Financial Information About Foreign and 7
Domestic Operations and Export Sales
ITEM 2. FINANCIAL INFORMATION
(a) Selected Financial Data 8
(b) Management's Discussion and Analysis of 8
Financial Condition and Results of Operation
ITEM 3. PROPERTIES 10
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners 10
(b) Security Ownership of Management 11
(c) Changes in Control 12
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
(a) Identification of Directors 12
(b) Identification of Executive Officers 13
(c) Identification of Certain Significant Employees 13
(d) Family Relationships 13
(e) Business Experience 13
(f) Involvement in Certain Legal Proceedings 15
ITEM 6. EXECUTIVE COMPENSATION
(a) Cash Compensation, Bonus, and Deferred Compensation 15
(b) Compensation Pursuant to Plans 15
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Transactions with Management and Others 15
(b) Certain Business Relationships 16
(c) Indebtedness of Management 16
ITEM 8. LEGAL PROCEEDINGS 16
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
(a) Market Information 17
(b) Holders 18
(c) Dividends 18
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TOPIC PAGE
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ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES 18
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE
REGISTERED
(a) Capital Stock 18
(b) Debt Securities 20
(c) Further Information 20
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS 20
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 21
ITEM 14. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 35
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
(a) List of Financial Statements 35
(b) Exhibit Index 35
SIGNATURES 36
EXHIBIT INDEX 37
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ITEM 1: BUSINESS
(a) General Development of Business.
U.S.A. Sunrise Beverages, Inc. (the "Company") was incorporated in August 13,
1990 in the State of South Dakota under the name Papaya U.S.A. Corporation. On
November 4, 1993, the Company changed its name to U.S.A. Sunrise Beverages, Inc.
Since its inception, the Company has conducted limited operations, principally
in the United States, of engaging in manufacturing and test marketing of a South
American formulated papaya soft drink known as "Papaya Sunrise".
The Company has 10,000,000 shares of common stock authorized for issuance (the
"Common Stock") with 3,750,000 shares issued and outstanding (the "Common
Shares"), and has 500,000 shares of preferred stock authorized for issuance (the
"Preferred Stock") with 400,000 shares issued and outstanding (the "Preferred
Shares" and together with the Common Shares as the "Shares"), and has sixty five
(65) shareholders (the "Shareholders"). All of the Shares were issued in private
placement transactions. As of the date of filing this Form 10-SB and upon
meeting applicable state securities rules, there will be 3,750,000 Common Shares
and 400,000 Preferred Shares eligible for resale pursuant to Securities and
Exchange ("SEC") Rule 144. The Company intends to enter into agreements with all
of the Shareholders to restrict them from reselling any of their Shares for a
period of six months beginning with the effective date of this Form 10-SB. See
Market Information.
The Company is a development stage company and is in the process of developing a
bottled water manufacturing facility, acquiring bottling equipment and
formulating plans for the production and distribution of bottled water. The
location of the proposed bottling facility is in an industrial park located in
Spearfish, South Dakota. The Company intends to bottle water acquired from the
Tesoro Corporation ("Tesoro") (a corporation in which Omar Barrientos, the
Company's president is a minority shareholder) and to distribute this water
under the name "Rushmore Springs." The Company plans to achieve distribution
through the network of product distributors previously engaged by the Company to
distribute Papaya Sunrise, the Company's original papaya based beverage.
In November 1990, the Company entered into an agreement with Salvietti
International Beverage Corp. ("Salvietti"), a Bolivian beverage company,
pursuant to which the Company acquired the exclusive production and distribution
rights in the United States to a papaya soft drink. The Company commenced its
initial operations in January 1991 by conducting blind runs of its papaya soft
drink product without labeling. The Company produced and distributed its product
as blind samples to distributors and bottlers located in the mid-west U.S. The
Company commenced manufacturing operations in July 1991 by manufacturing its
papaya product under contract with Full Service Beverages, Inc. utilizing its
facilities at Denver, Colorado. The Company's cans were produced by Ball
Manufacturing and its bottles by Owens Illinois. Production also was made under
contract with two other bottlers.
Until October 1993, the Company introduced the papaya beverage under its own
name, "Papaya Sunrise", in test markets within the United States. Using two
marketing companies, the product was distributed in several markets, including
areas of South Dakota, Nebraska, Colorado,
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Washington DC, Florida, New York, Illinois and California. Limited exposure was
also effected in Kansas, Montana, and Wyoming. The Company was subsequently
unable to continue producing and marketing the papaya drink due to a shortage of
working capital and operations were discontinued.
The rights to the papaya soft drink were subsequently acquired by other bottling
companies including Embotelladora La Cascada Ltda. ("Cascada"), the leading
beverage producer in Bolivia, and one of the largest beverage and flavor
producers in South America. On September 30, 1993, the Company entered into an
exclusive purchase and distribution agreement with Cascada pursuant to which the
Company acquired the formulas for ten beverage flavors (including the papaya
beverage) in exchange for the issuance of 152,600 Common Shares of the Company.
Pursuant to a subsequent contract, the Company has acquired from Tesoro the
exclusive rights to import and distribute a mineral water (the "Viscachani
Water") which is bottled in Bolivia by Cascada. The Company has also acquired
from Tesoro the exclusive rights to a source of spring water from the Black
Hills of South Dakota.
Based upon the results of the Company's prior test market activities with the
Papaya Sunrise product, management believes that the most cost effective method
for entry into the bottled beverage business is to control the production and
bottling of a locally available quality spring water and to distribute this
product through regional beverage distributors. The Company anticipates the cost
to begin operations to be $250,000, which includes, among other things, the
acquisition of a facility in which to conduct its operations, the acquisition of
bottling equipment and associated manufacturing equipment, implementation of
initial marketing, modifications to new facilities, and acquisition of molds for
the Company's proprietary bottle design. See Management's Discussion and
Analysis of Financial Condition and Results of Operations.
The Company intends to produce Rushmore Springs water in 1/2 liter, 1 liter, and
1 1/2 liter bottles and anticipates that the retail price to be $0.69, $1.09 and
$1.49 respectively. The Company's cost estimates indicate that the Company can
produce this product for $3.61 per case (a case being either twenty four 1/2
liter, twelve 1 liter, or twelve 1 1/2 liter bottles) for an expected profit of
$2.00 per case of water sold. The management of the Company has had substantial
experience in the retail beverage business, however, the Company's experience
has been limited to production and test marketing the papaya beverage during
1991 to 1993.
The Company had a favorable response to its test marketing and experienced good
turnover of its product. The primary difficulty encountered by the Company in
its initial marketing efforts was the inability, due to limited cash flow, to
supply the demand for its product.
During its test marketing, the Company had established distribution channels
through bottlers and independent distributors in several locations across the
United States and the Caribbean basin for papaya beverages and its other
flavored drinks. These locations included distributors in Wyoming, South Dakota,
Nebraska, Iowa, Kansas, Colorado, New Mexico, all of New England, Florida,
Virginia, West Virginia, Maryland, Missouri, Illinois, Michigan, Minnesota,
Ohio, and Oklahoma. After ceasing its initial test marketing, the Company
reacquired and/or terminated all prior contracts with distributors. The Company
has no present agreements with any of these
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distributors and there is no assurance that the Company will be able to
establish or reestablish a business relationship with these prior distributors
in any or all of these geographical areas.
Proposed Operations
The Company plans to offer a domestic spring water from the Black Hills of South
Dakota and an imported mineral water from the Andes Mountains. The Company plans
to first dedicate all its efforts to producing and marketing its domestic spring
water. The source and supply of water are located on land next to the Company's
former property. The Company intends to bottle the spring water at new
facilities which are to be located in an industrial park within Spearfish, South
Dakota, about ten miles from the waters' source.
Until August 18, 1998, the Company owned a 8,960 square foot warehouse facility
located on 18 acres of land in Spearfish, South Dakota. The property was subject
to foreclosure proceedings, and on August 18, 1998, the Company surrendered
these facilities to the lessor via quit claim deed in exchange for a release
from its contract obligations.
The Company presently owns the rights to: (a) purchase in bulk, water from a
spring located in Spearfish, South Dakota from Tesoro (the "Rushmore Water");
(b) distribute and sell a mineral water bottled by Cascada in the Andes
Mountains; and, (c) pursuant to a separate agreement with Cascada, produce and
distribute ten beverage flavors (including a papaya beverage) in North America,
Central America, the Caribbean, and all U.S. military installations, except
those located in South America.
The Rushmore Water
On October 22, 1995 (as amended by an Addendum dated January 10, 1997), Tesoro
and a Shareholder, the Paul Miller Sr. Trust (the "Trust") entered into an
agreement in respect of the Rushmore Water (the "Rushmore Water Contract") which
gave Tesoro the first right to purchase 23 million gallons (that amount being
subject to increase by mutual agreement) of spring water from property owned by
the Trust at a cost of $.07 per gallon. The term of the agreement is for one
year, with automatic annual renewal for a period of twenty years. The agreed
upon purchase price is subject to revision every fifth year based upon the
average price of spring water as published in certain trade publications, and in
no event shall the amount of an individual increase exceed $.07 per gallon. The
agreement also grants to Tesoro the right of first refusal to purchase the
source property. In the event of a transfer of the source property and/or water
rights, the transferee shall be bound by the obligations of the agreement.
The Viscachani Water
On September 30, 1993, Cascada and Tesoro entered into an agreement in respect
of the Viscachani Water (the "Viscachani Water Contract") which gave Tesoro the
right to purchase, distribute, and sell the water bottled by Cascada in the
Andes Mountains in Bolivia. The agreement has no specified duration period.
Purchase price is to be determined by quotation FOB port and shall remain valid
for a period of less than one year. On October 1, 1993, Tesoro and the Company
entered into a substantially identical agreement wherein the Company obtained
the
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distribution rights from Tesoro under the same terms as described above for
nominal consideration.
Other Beverage Products
On September 30, 1993, the Company entered into an exclusive purchase agreement
with Cascada wherein the Company acquired the formulas, trademarks,
technologies, and the exclusive right to produce and distribute ten beverage
flavors (including a papaya beverage) in North America, Central America, the
Caribbean, and all U.S. military installations, except those located in South
America. The Company acquired these rights in exchange for the issuance of
152,600 Common Shares of the Company, which represented an agreed upon value of
the technology in the amount of $1,144,500. The term of the technology agreement
is "continuous with revisions every ten years or when the parties, by mutual
accordance, find it pertinent."
This agreement further provides the Company with the right of first refusal
should Cascada wish to sell their Common Shares prior to the time the Company's
Shares become publicly registered. In the event of a dispute of the value or
number of the shares, the Company has further agreed to pay the agreed upon
value of $1,144,500 to Cascada. The Company has also agreed to pay to Cascada a
royalty of $.30 for each 240 fluid ounces of product which it sells. See
Material Contracts, Exhibit 10.1 and 10.2.
The Rushmore Water Bottling Facility
On July 13, 1998, the Company and the Trust entered into a letter of intent (the
"Letter of Intent") describing the basic terms for several contemplated
agreements between the Trust, the Company and Tesoro. See Certain Relationships
and Related Transactions, and see also Material Contracts, Exhibit 10.7.
The contemplated agreements described in the Letter of Intent are subject to the
Company's successful completion of several contingencies including, among other
things, the Company achieving initial capitalization in the amount of $50,000
and income projections in the amount of $150,000 in the first year of
operations, which the parties acknowledge to be necessary to comply with the
basic terms of the Letter of Intent. Upon satisfaction of the contingencies, the
Letter of Intent contemplates that the Company, the Trust, and Tesoro would
enter into a bulk water sales agreement and a water hauling contract, and that
the Trust and the Company would enter into a building lease and an equipment
lease for the use of production facilities and property which would be used in
the bottling and distribution of the Rushmore Water.
Pursuant to the terms of the Letter of Intent, the contemplated bulk water sales
agreement would specify that the Trust would sell water to Tesoro, and Tesoro
would exclusively buy from the Trust, up to 23 million gallons annually, for
$.07 per gallon. Pursuant to the water hauling agreement contemplated under the
Letter of Intent, the Trust would deliver the water sold to Tesoro to the
Company at the rate of $.03 per gallon, payment of such price under each of
these agreement would be paid by Tesoro and the payment guaranteed by the
Company. The hauling agreement is contemplated to be subject to termination by
the Trust upon ninety days notice. The Letter of Intent specifies no period of
duration for these agreements.
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Pursuant to the equipment lease contemplated under the Letter of Intent, the
Trust would lease to the Company a bottling unit, tanks, and miscellaneous
equipment, having a maximum value of $150,000. The Letter of Intent specifies
that the Company be obligated at its own cost, to maintain, repair or replace
the equipment during the term of the equipment lease. The equipment lease
payments are contemplated to be as follows: (a) 1-3 months, $3,000 per month;
(b) 5-6 months, $4,000 per month; (c) 7-12 months, $5,000 per month; (d) 13-36
months, $7,250 per month; (e) 37-84 months, $6,250 per month. During the 84th
month, the Company may renew the lease on a year to year basis. The Company
would also have the option to purchase the equipment for $75,000 in the tax year
following the 84th month of the lease.
Pursuant to the terms of the building lease contemplated under the Letter of
Intent, the Trust would lease to the Company a building owned by the Trust, and
located in Spearfish, SD. The Letter of Intent specifies that the Company would
be obligated at its own cost for any improvements required to conduct the
Company's business. The lease payments are contemplated to be as follows: (a)
1-3 year, $1,417 per month; (b) 4-6 year, $1,487 per month; (c) 7-9 year,
$1,562 per month; and (d) 10 year, $1,640 per month. The Letter of Intent also
contemplates that the Company would have a ninety day right of first refusal to
match any bona fide offer received by the Trust to purchase the premises.
The Company believes that it will be able to complete the contingencies in the
Letter of Intent and commence manufacturing operations within three months
following the receipt of $250,000 and completion of modifications to its
proposed new facility. There are no assurances that the Company will be able to
secure such funds or that the Company will be able to start manufacturing. The
Company intends to conduct initial production runs which will produce product
samples for distributors to assist in the solicitation of product orders. The
Company thereafter intends to manufacture product to deliver to distributors in
response to its sample program. There are no assurances that the Company will be
able to start manufacturing or meet its proposed product roll out schedule. The
proposed operations as described above will be dependent entirely upon the
Company obtaining sufficient capital to conduct its proposed operations. There
are no assurances that the Company will be able to obtain the necessary capital
to commence its operations. See Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Capital Resources
Since its inception the Company has worked with a shortage of working capital.
In June 1993, after having suspended operations, the Company entered into an
agreement with an investment banker located in Dallas, Texas. This investment
banker introduced Company to another financial advisor with which the Company
initially entered into an agreement to pursue the acquisition of a regional
bottler in August 1993. When the acquisition stalled, the financial advisor
introduced the Company to other potential sources of financing, all of which did
not materialize. In November 1994, the Company entered into an agreement with
another financing source, a NASD broker-dealer, pursuant to which the
broker-dealer agreed to underwrite on a best efforts basis a private offering
for the Company. Substantial due diligence was undertaken by the broker-dealer
and a private placement memorandum was prepared. The Company expended in excess
of $60,000 in
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legal, accounting and Blue Sky fees in connection with the offering. This
offering was terminated in June 1995 due to events beyond the control of the
Company. Following this event, the Company made other attempts to raise capital
through other third party financing sources, none of which materialized.
The proposed operations of the Company will be dependent entirely upon the
Company obtaining sufficient capital to conduct its business. There are no
assurances that the Company will be able to obtain the necessary capital to
commence its operations. As noted in the financial statements incorporated
herein, should the Company note be able to implement its business plan, there
exists substantial doubt about the Company continuing to exist as a going
concern. See Note 1 to Financial Statements.
The Company anticipates that it will be required to borrow additional money and
may be required to issue additional debt or equity securities. There is no
assurance that available investors or lenders can be found or that the terms of
any financing which may be available to the Company would become available on
suitable terms.
Results of Operation
As of December 31, 1997, the Company had cash on hand in the amount of $29, with
$266,361 in total assets and $627,422 in total liabilities. The Company has not
conducted sales except for its previous sales in test market areas. In fiscal
1997, the Company had $0 in gross sales, with a net deficit of $115,299. In
fiscal 1996, the Company had $0 in gross sales and a net loss of $1,845,266. The
Company had operation expenses of $115,299 and $1,405,189 for 1997 and 1996,
respectively. The losses include a provision of $ (1,274,500) for the decline in
value of the Company's formulas, technology, and territories. See Note 4 to the
Financial Statements.
To the extent that the Company is able to attain profitable operations, the
Company may be able to take advantage of approximately $700,000 of federal
income tax net operating loss carryforwards (the "NOL"). However, in the event
the Company is required to issue additional equity securities, such issuance or
issuances may trigger various provisions of the Federal income tax laws
(including, but not limited to, IRC Sec. 381 as it relates to changes of
control) and the NOL could be severely limited or eliminated in its future
utilization.
(b) Narrative Description of Business
The Company was incorporated in the State of South Dakota in 1990. In November
1990, the Company acquired the exclusive production and distribution rights in
the United States to a papaya soft drink. From January 1991 to October 1993, the
Company introduced this beverage under its own name, in test markets within the
United States. However, the Company was unable to continue producing and
marketing the papaya drink due to a shortage of working capital. The rights to
the papaya soft drink were subsequently acquired by other bottling companies
including Cascada. On September 30, 1993, the Company entered into an exclusive
purchase and distribution agreement with Cascada pursuant to which the Company
acquired the formulas for ten beverage flavors (including the papaya beverage)
in exchange for the issuance of 152,600 shares of Common Stock.
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Pursuant to separate contracts with Tesoro, the Company has acquired the rights
to import and distribute Viscachani Water and has also acquired the rights to
the source of the Rushmore Water. The Rushmore Water rights are of an exclusive
nature in that the Company has the exclusive right to draw up to twenty three
million gallons of water annually. Tesoro may sell any surplus water not used by
the Company to third parties, with the understanding that the Company's demands
for water will always take precedence as to the first twenty three million
gallons. In exchange for the exclusive right, the Company is obligated to
purchase from Tesoro the first twenty three million gallons of water the Company
uses annually.
Under its proposed plan of operations, the Company intends to lease a
manufacturing facility, and to lease the bottling and manufacturing equipment
necessary to begin operations. The Company plans to dedicate all its initial
efforts to producing and marketing its Rushmore Water under the name "Rushmore
Springs". The Company thereafter intends to manufacture and distribute, through
independent bottlers and distributors, a line of beverages under the brand name
"Sunrise." In addition, the Company intends to import and distribute another
brand of water from the Andes Mountains in Bolivia known as Viscachani Water.
The Company has entered into a Letter of Intent with a Shareholder of the
Company which contemplates several contingent agreements under which the Company
will be able to lease the described manufacturing facilities and equipment
necessary to begin producing its product. See Business.
The Company's current business address is Box 938, Spearfish, South Dakota 57783
and its phone number is 605-642-5560. The Company is currently seeking a new
facility in which to locate its proposed operations.
Company's ability to successfully implement its business plan will also depend
upon attracting and retaining competent employees and management personnel. The
Company's ability to attract competent personnel will be dependent on the
ability of the Company to provide competitive salaries, benefits, support, and
opportunity. The Company's primary key employee is its President, Omar
Barrientos. If the Company should lose the services of Mr. Barrientos, there are
no assurances that the Company would be able to obtain an acceptable replacement
on suitable terms. There are no assurances that Company will be able to provide
suitable compensation and/or benefits to attract and retain such personnel as
are necessary to conduct its business.
(c) Financial Information About Foreign and Domestic Operations
and Export Sales.
The Company at present conducts no foreign operations and has no export sales
although it will have foreign Shareholders owning a total of less than 5% of the
Company upon registration of its Shares as described in Section 9(b).
ITEM 2: FINANCIAL INFORMATION
(table appears on next page)
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<TABLE>
(a) Selected Financial Data
<CAPTION>
January 1, 1998
Through
June 30, 1998
(unaudited) (unaudited) (unaudited)
1998 1997 1996 1995 1994
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Summary of Earnings
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Revenue .................................... $ 0 $ 0 $ 0 $ 0 $ 0
Net income (loss) .......................... -- $ (115,299) $(1,405,189) $ (147,086) $ (68,097)
Net earnings per share ..................... -- $ (.03) $ (.26) $ (.02) $ (.01)
Weighted average number of ................. -- 3,750,000 5,503,052 6,211,730 5,514,509
shares outstanding
Summary of Financial Position:
Total assets ............................... $ 268,998 $ 266,361 $ 305,544 $ 2,040,956 $ 2,168,262
Unsecured liabilities ...................... 334,300 353,283 215,637 153,164 88,298
Secured liabilities ........................ 274,139 274,139 275,669 282,161 234,286
Shareholders' equity (deficit) ............. $(339,440) $ (361,061) $ (185,762) $ 1,610,899 $ 1,845,728
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Notes:
<FN>
(1) In 1996 and 1997, as a result of the certified audit, the Company
placed in reserve, the values given to the acquisition of technology
and territorial values by adjusting these values to $0.
(2) The 1997 and 1996 figures above are from the Company's certified audit.
(3) The 1995 and 1994 figures are extracted from the Company's income tax
returns and from the Independent Balance Sheet Audit for the year
ended 1994.
(4) The 1998 figures are from the Company's unaudited Interim Balance Sheet.
</FN>
</TABLE>
(b) Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following is management's discussion of certain significant factors which
have affected the Company's financial position and operating results during the
periods included in the accompanying audited and unaudited financial statements,
and should be read in conjunction with such statements.
In an effort to give investors a well-rounded view of the Company's current
financial condition and future opportunities, management's discussion and
analysis of the results of operations and financial condition and other sections
of this Form 10-SB contain "forward-looking statements" about its prospects for
the future. Such statements are subject to certain risks and uncertainties which
would cause actual results to differ materially from those projected.
Revenues
The Company's revenues consist of test marketing sales of the Company's beverage
products. The
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Company's strategy has been to use all available capital for its product
development and test marketing. Since its inception, the Company has primarily
been involved in the product development and test marketing of its beverage and
bottled water products. The Company has not derived any significant revenues
from its limited product sales. The Company expects to incur significant capital
expenditures prior to deriving any such product revenues.
Liquidity and Capital Resources
The Company continues to experience a significant lack of cash flow and it is
questionable as to whether the Company can maintain its business as a going
concern.
The Company's cash requirements to date have been met by the proceeds of its
private placement of equity securities, issuance of debt securities, and cash
generated from operations. The Company's expenditures have been primarily to
fund research and development, acquisition of technology and formulas, general
and administrative expenses, financing efforts, and test marketing of its
products.
The Company's present cash balance will not be sufficient to fund its current
and proposed operations in the future. The Company's capital strategy
anticipates that the Company will increase its cash balance through financing
transactions, including the issuance of debt and/or equity securities. No
arrangements have been entered into for any future financing and no assurances
can be given that adequate levels of additional funding can be obtained on
favorable terms, if at all.
As of January 1, 1998, the Company had approximately $700,000 of net operating
loss carryforwards (the "NOL"). However, in the event the Company is required to
issue additional equity securities, such issuance or issuances may trigger
various provisions of the Federal income tax laws (including, but not limited
to, IRC Sec. 381 as it relates to changes of control) and the NOL could be
severely limited or eliminated in its future utilization.
Based upon the results of the Company's prior test market activities with the
Papaya Sunrise product, management believes that the most cost effective method
for entry into the bottled beverage business is to control the production and
bottling of a locally available quality spring water and to distribute this
product through regional beverage distributors.
The Company has entered into a Letter of Intent with a Shareholder of the
Company which contemplates several contingent agreements under which the Company
will be able to lease the described manufacturing facilities and equipment
necessary to begin producing its product. The Company anticipates the cost to
begin operations to be $250,000, which includes, among other things, the
acquisition of a facility in which to conduct its operations, the acquisition of
bottling equipment and associated manufacturing equipment, implementation of
initial marketing, modifications to new facilities, and acquisition of molds for
the Company's proprietary bottle design.
The Company believes that it will be able to complete the contingencies in the
Letter of Intent and commence manufacturing operations within three months
following the receipt of $250,000 and completion of modifications to its
proposed new facility. There are no assurances that the Company will be able to
secure such funds or that the Company will be able to start manufacturing. See
Narrative Description of Business.
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ITEM 3: PROPERTIES
Until August 18, 1998, the Company owned a 8,960 square foot warehouse facility
located on 18 acres of land in Spearfish, South Dakota. This property was
subject to a Contract for Deed dated February 1, 1995, between Dakota Mining and
Construction, Inc. (hereinafter "Dakota"), a South Dakota corporation, and the
Company. Pursuant to the Contract for Deed. Dakota had filed a foreclosure
action against the Company, being Court File No: C97-46, in Lawrence County,
South Dakota.
On August 18, 1998, in exchange for a release from its contract obligations, the
Company surrendered the property to the lessor via quit claim deed. See Legal
Proceedings and see also Exhibit 10.6.
The Company intends to move it proposed operations to a 5,000 square foot
facility located in an industrial park in Spearfish, South Dakota. The Company
has also entered into a Letter of Intent with the Trust regarding a contemplated
building lease for the proposed 5,000 square foot facility where the Company
intends to conduct its operations. See Proposed Operations.
ITEM 4: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners.
The following tables set forth as of June 1, 1998 the number and percentage of
outstanding Shares of the Company beneficially owned by all persons known by the
Company to be the owners of more than 5% of the Company's outstanding voting
securities.
<TABLE>
<CAPTION>
Name and Address Amount and Nature
Title of of Beneficial of Beneficial Percent of
Class Owner Ownership Class
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Voting Isabel & Elizabeth Barrientos 400,000 shares 100%
Preferred (3) 719 Cedar Lane
Spearfish, SD 57783
Voting Omar Barrientos 400,000 shares 100%
Preferred (5) P.O. Box 938
Spearfish, SD 57783
Common (2) Hugo Barrientos 285,000 shares 7.6%
937 Herman Place
Rapid City, SD 57701
Common (1) Omar A. Barrientos 283,000 shares 7.55%
1512 Marston
Ames, IA 50010
Common (6) Birchwood Cptl. Advisors 400,000 shares 10.66%
4 Dogwood Court
West Paterson, NJ 07424
-10-
<PAGE>
<S> <C> <C> <C>
Common Paul Miller Sr. Trust 271,169 shares 7.23%
967 Main
Deadwood, SD 57732
Common (4) Elizabeth Schroeder 285,000 shares 7.6%
6778 Rosefield Dr.
San Diego, CA 92115
Common (3) Elizabeth Schroeder and 405,000 shares 10.8%
Isabel Barrientos
719 Cedar Lane
Spearfish, SD 57783
Common (5) Omar Barrientos 405,000 shares 10.8%
P.O. Box 938
Spearfish, SD 57783
Common (7) Chris Giordano 180,000 shares 4.8%
4 Dogwood Court
West Paterson, NJ 07424
- ----------
<FN>
(1) Omar A. Barrientos is the son of Omar Barrientos, the Company's President.
(2) Hugo Barrientos is the son of Omar Barrientos, the Company's President.
(3) Isabel and Elizabeth (Schroeder) Barrientos are the wife and daughter
respectively of Omar Barrientos, the Company's President.
(4) Elizabeth Schroeder is the daughter of Omar Barrientos, the Company's
President.
(5) Shares are in the names of Isabel and Elizabeth (Schroeder) Barrientos and
are reported here for purposes of beneficial ownership and not actual
ownership.
(6) Chris Giordano, the principal of Birchwood Cptl. Advisors, is an Advisory
Board Director of the Company.
(7) Total includes shares (180,000 Common) that are reported here for purposes
of beneficial ownership only and not actual ownership. See note (6) above.
</FN>
</TABLE>
(b) Security Ownership of Management.
The following table sets forth as of the date of this Registration Statement the
number and percentage of outstanding voting securities of the Company
beneficially owned by Management.
<TABLE>
<CAPTION>
Name and Address Amount and Nature
Title of of Beneficial of Beneficial Percent of
Class Owner Ownership Class
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Voting Omar Barrientos 400,000 shares 100%
Preferred (2) P.O. Box 938
Spearfish, SD 57783
Commons (2) Omar Barrientos 405,000 shares 10.8%
P.O. Box 938
Spearfish, SD 57783
Common Omar Barrientos 3,024 shares 0.08%
P.O. Box 938
Spearfish, SD 57783
-11-
<PAGE>
<S> <C> <C> <C>
Common Robert Westerfield 10,000 shares 0.27%
814 Dayton St.
Wichita, KS 67213
Common Gene Fairchild 51,000 shares 1.36%
1807 Spade Ct.
Rapid City, SD 57701
Common Louis J. Twiss 10,000 shares 0.27%
HC 57, Box 12
Buffalo Gap, SD 57722
Common (3) Chris Giordano 580,000 shares 15.46%
4 Dogwood Court
West Paterson, NJ 07424
All directors and officers as 1,059,024 shares (Common) 28.24%
a group (10 persons) 400,000 shares (Preferred)100.00%
- ----------
<FN>
(1) Director William S. Brewster, and Advisory Directors Carlos Caceres,
Donald L. Antle, Ing. Jaime Aponte Issa and Jose Ezzidin Eid Montano do
not own any shares of the Company.
(2) Shares are in the names of Isabel and Elizabeth (Schroeder) Barrientos and
are reported here for purposes of beneficial ownership only and not actual
ownership.
(3) Total includes shares (580,000 Common) that are reported here for
purposes of beneficial ownership only and not actual ownership.
</FN>
</TABLE>
(c) Changes in Control.
No shares of the Company are presently delivered as security to third parties.
There are no outstanding options or agreements which would affect control of the
Company.
ITEM 5: DIRECTORS AND EXECUTIVE OFFICERS
(a) Identification of Directors.
Directors are elected by the shareholders to hold office for a one year term or
until a successor is elected and qualified.
<TABLE>
<CAPTION>
Name Age Position Served From
- ---- --- -------- -----------
<S> <C> <C> <C>
Omar Barrientos 57 CEO, Chairman, Treasurer, August, 1990
President
Robert Westerfield 57 Vice-President, Director October, 1993
Gene Fairchild 51 Vice-President, Director P.R., March, 1996
Secretary
Louis J. Twiss 58 Director October, 1993
William S. Brewster 57 Director October, 1993
Carlos Caceres 50 Advisory Board Director Nov., 1993
Chris Giordano 42 Advisory Board Director July, 1993
Donald L. Antle 56 Advisory Board Director October, 1993
Ing. Jaime Aponte Issa 56 Advisory Board Director October, 1993
Jose Ezzidin Eid Montano 51 Advisory Board Director October, 1993
</TABLE>
-12-
<PAGE>
(b) Identification of Executive Officers.
Executive Officers serve in their capacities at the pleasure of the Board of
Directors of the Company.
(c) Identification of Certain Significant Employees.
The Company's only significant employee at the present time is its President,
Omar Barrientos.
(d) Family Relationships.
At present, no directors, officers or employees of the Company are related.
However, the controlling shareholders of Tesoro Corporation are immediate family
members of Omar Barrientos, the Company's president.
(e) Business Experience.
Omar Barrientos
Mr. Barrientos has been an officer and director of the Company since August 13,
1990. During the last seven years, he has researched all aspects of the beverage
industry, including concentrate components, production and sales, cost
calculations, distribution systems, and bottling requirements. Mr. Barrientos'
contacts enabled the Company to acquire the rights to its Sunrise product line
and its domestic and imported waters.
Robert Westerfield
Mr. Westerfield has been an officer and director of the Company since October
23, 1993. Mr. Westerfield has over 30 years of beverage industry experience. His
background within the industry covers many major bottling plants including All
American. Mr. Westerfield is the former president and CEO of Full Service
Beverage, and member of the Board of Directors of the Royal Crown Bottlers
Association.
Gene Fairchild
Mr. Fairchild has been an officer and director of the Company since March 1996.
Mr. Fairchild has extensive background in marketing, management, news media, and
the insurance field. Mr. Fairchild is a stockholder and the vice-president and
Treasurer of Agents of Insurance, one of the largest insurance agencies in South
Dakota. Mr. Fairchild has been in the insurance field since 1973, starting as a
co-owner of McKinney-Weddell Insurance, predecessor of Agents of Insurance.
Louis J. Twiss
Mr. Twiss has been a director of the Company since October, 1993. Mr. Twiss is
involved in developing special programs of distribution to Indian casinos and
reservations. Mr. Twiss, a native American has prior experience as a consultant
for Native Americans as well as for companies dealing
-13-
<PAGE>
with Native Americans.
William S. Brewster
Mr. Brewster is President of Brewster Marketing Company, Brewster Associates, a
consulting firm, Brewster Financial group and BCP Marketing Group. Mr. Brewster
has over 30 years of marketing experience. He has been consulting manager to
several companies and has been a member of professional organizations such as
the American Society of Training and the New England Association of Advertising.
Mr. Brewster has lectured at seminars for the State of Connecticut, the
University of Hartford, and University Health Center.
Advisory Board Directors
Carlos Caceres
Mr. Caceres has been an advisory director of the Company since November 30,
1993. From 1991 to 1993, Mr. Caceres was the President of McLane International,
an affiliate of McLane, Inc. and Wal-Mart. Mr. Caceres has substantial knowledge
of, and contacts in, the food and beverage industries. Mr. Caceres will assist
in the Company's efforts to place its product in national markets and in the
Caribbean Basin. Mr. Caceres is a native of Peru.
Chris Giordano
Mr. Giordano has been an advisory director of the Company since July, 1993. Mr.
Giordano is a principal of Birchwood Capital Advisors, and has previously served
as a consultant with William Scott, and in the asset management departments of
Paine Webber, and Smith Barney during the period from 1983 to 1990.
Subsequently, Mr. Giordano owned Manchester Rhone Securities, a brokerage firm,
until its sale in 1991. Mr. Giordano also served as the director of corporate
finance at M.S. Farrell from 1992 through 1993. Mr. Giordano has assisted the
Registrant in matters related to equity financing and as a contact with
brokerage houses and investment bankers.
Donald L. Antle
Mr. Antle is the founder and President of Antle Enterprises, Inc., a consulting
and service entity to the beverage industry. He is also a Director of the
Equitable Bank, Dallas, Texas. Mr. Antle has 30 years experience in the beverage
industry and specific experience concerning mergers and acquisitions within that
industry. Mr. Antle has successfully completed a variety of beverage company
mergers, acquisitions, corporate financing and special consulting projects.
Ing. Jaime Aponte Issa
Mr. Aponte is the General Manager of Embotelladora La Cascada and the President
of the Bolivian National Association of Bottlers.
Jose Ezzidin Eid Montano
Mr. Ezzidin Eid Montano is the President and principal owner of Grupo Industrial
"La Cascada". His
-14-
<PAGE>
company has grown to become the largest independent bottling company in South
America with eleven bottling plants. There are no assurances that the Company
will be able to retain the services of the current members of the Board of
Directors, or that it will be able to attract other members to serve as
directors should vacancies develop.
(f) Involvement in Certain Legal Proceedings.
The Company has conducted due diligence and has no record of existing officers
or directors that currently have, and does not believe that they been involved
in, any legal proceedings material to an evaluation of the ability or integrity
of any director or officer.
ITEM 6: EXECUTIVE COMPENSATION
(a) Cash Compensation, Bonus, and Deferred Compensation.
The following table sets certain information with respect to annual compensation
paid in 1996, 1997 and to the present to the Company's only executive officer.
<TABLE>
<CAPTION>
Name and Principal Other Annual All Other
Position Year Salary Bonus Compensation Compensation
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Omar Barrientos, 1998 None None N/A N/A
President 1997 None None N/A N/A
1996 None None N/A N/A
</TABLE>
(b) Compensation Pursuant to Plans.
Company currently has no plans for compensation, key man insurance, pension, or
stock options stock appreciation rights plans.
ITEM 7: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Transactions with Management and Others.
On January 1, 1994, the Company entered into a loan agreement with its
president, Omar Barrientos. Pursuant to the agreement, the president
periodically pays expenses on behalf of the Company, or advances money to the
Company to pay its expenses. The note payable bears interest at 7% and is
calculated each December 31 to include all amounts due, including interest
accrued at 7% thorough December 31. See Note 5 to Financial Statements. See also
Material Contracts, Exhibit 10.8.
On November 16, 1995, the Company entered into a note agreement with Dr. Neil
Kurti, a Shareholder of the Company. The $50,000 note payable bears interest at
10% and carries a due date of
-15-
<PAGE>
February 1, 1996 or earlier if the Company completed a private placement. The
note also provides for the issuance of Common Shares upon any initial public
offering of the Company's Common Shares. See Note 5 to Financial Statements. See
also Material Contracts, Exhibit 10.9. The Company has an outstanding loan
amount of $66,000 to a Shareholder which was due and payable July 11, 1995. The
loan was in good standing until December 1996. However, on December 15, 1996,
the Company was served a summons and complaint in connection with the loan. A
judgment was entered on February 18, 1997. See Note 5 to Financial Statements.
See also Legal Proceedings.
During 1997, family members of the Company's president exchanged 1.8 million
Common Shares for 400,000 Preferred Shares. See Note 6 to Financial Statements.
(b) Certain Business Relationships.
Omar Barrientos is the President and a minority shareholder of Tesoro
Corporation ("Tesoro"). The balance of the controlling shareholders are Mr.
Barriento's family members. The Company has entered into an agreement with
Tesoro whereby the Company acquired the exclusive right (except for certain
areas of Illinois and California) to distribute the Viscachani Water ("Aqua from
the Andes") in the U.S. Tesoro is the exclusive licensee of these rights and it
has sub-licensed these rights to the Company. See Material Contracts, Exhibit
10.3. See also Proposed Operations.
The Company has also entered into a separate agreement with Tesoro whereby the
Company has acquired the rights to the source of the spring water from which the
Company intends to bottle its Rushmore Springs product. See Proposed Operations.
On September 30, 1993, the Company entered into an agreement with Cascada
wherein the Company acquired the formulas, trademarks, technologies, and the
exclusive right to produce and distribute ten beverage flavors in North America,
Central America, the Caribbean, and all U.S. military installations, except
those located in South America. The Company acquired these rights in exchange
for the issuance of 152,600 Common Shares of the Company, which represented an
agreed upon value of the technology in the amount of $1,144,500. The term of the
technology agreement is "continuous with revisions every ten years or when the
parties, by mutual accordance, find it pertinent." See Material Contracts,
Exhibit 10.1. See also Proposed Operations.
(c) Indebtedness of Management.
There is no indebtedness of officers or directors to the Company.
ITEM 8: LEGAL PROCEEDINGS
The Company was named in an action filed in the State of Minnesota by a
Shareholder of the Company. The action was based upon a breach of contract in
connection with a loan made by the Shareholder to the Company. The principal
amount of the loan was $60,000. The Shareholder made demand for payment of the
principal amount together with accrued interest, legal fees and court costs. A
partial judgment was entered against the Company in Minnesota on February 18,
1997. Omar Barrientos, the Company's president, has assumed personal liability
for payment of the judgment described above. To date, the judgment, including
interest and legal fees in the total amount of
-16-
<PAGE>
$72,564 remains unpaid.
The Company had entered a Contract for Deed dated February 1, 1995, between
Dakota Mining and Construction, Inc. (hereinafter "Dakota"), a South Dakota
corporation, and the Company. Dakota had filed a foreclosure action against the
Company, being Court File No: C97-46, in Lawrence County, South Dakota. On
August 18, 1998, the Company executed a quit claim deed and surrendered the
property, in exchange for a release from its contractual obligations.
To the best of the Company's knowledge, it is not involved in any other
litigation.
ITEM 9: MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
(a) Market Information.
There is no established United States or foreign public trading market for the
Company's Common Shares of $0.01 par value stock. The common equity is presently
not subject to any outstanding options or warrants to purchase it, nor are there
any securities convertible into common equity, except as provided for in the
statement of rights of the Preferred Stock. Upon filing this Form 10-SB and the
consent of its Shareholders to an agreement between the Shareholders and the
Company restricting the transferability of those shares for a period of six (6)
months, the Company plans to register the issued and outstanding Common Shares
in certain states. A copy of the proposed lockup agreement is attached hereto,
and is hereby incorporated by reference. See Exhibit 4.3.
There is no established United States or foreign public trading market for the
Company's Preferred Shares of $0.01 par value stock. The preferred equity is
presently not subject to any outstanding options or warrants to purchase it, nor
are there any securities convertible into preferred equity. Upon filing this
Form 10-SB and the consent of its Shareholders to an agreement between the
Shareholders and the Company restricting the transferability of those shares for
a period of six (6) months, the Company plans to register the issued and
outstanding Preferred Shares in certain states. A copy of the proposed lockup
agreement is attached hereto, and is hereby incorporated by reference. See
Exhibit 4.3.
Upon Shareholder consent, each share of the Company's Shares shall be subject to
a lockup agreement between the Company and each Shareholder. The Shares shall be
subject to a legend restricting the transferability of the Shares for a period
of six (6) months, commencing upon the effective date of this Form 10-SB. Each
Share shall bear the following legend upon each certificate:
"This share certificate is subject to an agreement between the Company
and its Shareholders which sets forth restrictions upon the
transferability of the shares represented by this certificate. The
holder of this certificate hereby agrees that during the period of six
(6) months after the effective date of the Company's Form 10-SB, the
holder will not, without obtaining prior written consent of the
Company, or, if required, the consent of any exchange or regulatory
entity, offer, exchange, sell, contract to sell, grant any option for
the sale of, or otherwise dispose of, directly or indirectly, any
Common Shares or Preferred Shares represented by this certificate."
-17-
<PAGE>
Notwithstanding this agreement, the resale of the Shares, nonetheless, will also
be subject to the respective state securities law requirements in the governing
jurisdictions which would impose restrictions on the resale of the securities
(including the placement of an additional legend or legends on the certificate).
There are no Shares that the Company has agreed to register under the Securities
Act for sale by security holders except for those Shares to be distributed with
this Form 10-SB. No common or preferred equity is being or has been proposed to
be publicly offered by the Company which could have a material effect on the
market price of the Company's common or preferred equity other than Shares to be
distributed under this Registration.
(b) Holders.
The Company believes that there are presently 3,750,000 shares of common equity
and 400,000 shares of preferred equity issued and outstanding. The Company
believes that the Company has sixty-five stockholders living throughout the
United States holding Shares of the Company. The Company also has certain
foreign Shareholders who hold a total of less than 5% of Company's Common
Shares.
(c) Dividends.
To the present, the Company has paid no cash dividends on its Shares. The
Company has no present intention of paying cash dividends in the foreseeable
future. It is the present policy of the Board of Directors to retain any
earnings to provide funds for the growth of the Company. The Board of Directors
in its discretion, may decide to change such policy in the future, but the
future payments of cash dividends will depend, among other things, upon the
Company's future earnings, capital requirements, financial condition and
restrictions on the payment of dividends in future loan agreements, if any.
The rights of holders of the Shares to payments of dividends, if any, are
further described below in Item 11 Description of Registrant's Securities To Be
Registered.
ITEM 10: RECENT SALES OF UNREGISTERED SECURITIES
Pursuant to the Consulting Agreement dated February 12, 1998, between the
Company and Administrative Consultants, Inc. (hereinafter "ACI"), and as amended
on July 14, 1998, the Company has agreed to issue 25,000 Common Shares to ACI as
compensation for consulting services. These Common Shares shall be registered by
the Company within 180 days of the effective date of this Form 10-SB, and the
share certificates shall be issued to ACI within thirty days after the effective
date of the registration of the Common Shares.
ITEM 11: DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
(a) Capital Stock.
The Company has the authority to issue 10,000,000 One Cent ($0.01) par value
common stock shares. Under this Form 10-SB, the Company plans to register
3,750,000 Common Shares which are currently issued and outstanding. A copy of
the detailed description of the Shares is attached and is incorporated
-18-
<PAGE>
herein by reference to Exhibit 4.1.
The Company is authorized to issue 500,000 One Cent ($0.01) par value preferred
stock shares. Under this Form 10-SB, the Company plans to register 400,000
Preferred Shares which are currently issued and outstanding. The Board of
Directors has defined the nature of the Preferred Stock as set forth in the
Certificate of Incorporation and the Bylaws (see Exhibits 3(i) and 3(ii)) and
the resolution of the Board dated May 31, 1997 (Exhibit 4.2).
See also Description of Securities, Exhibit 4.1.
(1) Brief outline of Common Stock and Preferred Stock.
(i) Dividend rights.
(a) Common Stock. Subject to any preferential rights of
the Preferred Shares, the holders of the Common Shares are entitled to receive
to the extent permitted by law, such dividends as may be declared from time to
time by the Board of Directors of the Corporation. There is no obligation to
declare dividends of any kind.
(b) Preferred Stock. Pursuant to the Certificate of
Incorporation and the Bylaws of the Company, and the resolution of the Board
dated May 31, 1997, the holders of the Preferred Shares are entitled to
receive the following dividends:
"The Class A Voting Preferred shall be entitled to a cumulative annual
dividend equal to 5% of its stated value ($3.00). The dividend shall be
paid annually at the end of the Company's fiscal year. There shall be
no restriction on the payment of dividends on the Common Stock in any
year in which the dividend on the Class A Voting Preferred Stock shall
not have been paid. In addition, the holders of the Class A Voting
Preferred Stock may elect to take the dividend in the form of either
cash or Common Stock based upon a price per share equal to (i) 50% of
the last transaction price which occurred in the month prior to the
dividend declaration or (ii) $1.50 per share."
(ii) Voting rights.
(a) Common Stock. Each holder of a share of common stock
has one vote for each share of stock held by the person of record on the books
of the Corporation on all matters voted upon by the stockholders. The common
stockholder does not have cumulative voting rights. At any meeting of the
stockholders, the holders of not less than 51% of the outstanding shares
entitled to vote, present in person or by proxy shall constitute a quorum for
the transaction of business, and a majority vote of such quorum shall prevail
except as otherwise required by law, the Certificate of Incorporation or the
Bylaws.
(b) Preferred Stock. Each holder of a share of preferred
stock has ten votes for each share of preferred stock held by the person of
record on the books of the Corporation on all matters voted upon by the
stockholders. The preferred stockholder does not have cumulative voting rights.
(iii) Liquidation. Lien creditors, secured creditors, unsecured
creditors, and preferred stockholders (if any) shall be entitled to receive
assets prior to distribution to common
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<PAGE>
stockholders. In the event that such parties have been paid under the terms of
their agreements, and assets remain for distribution, such assets will be
distributed to the common stockholders of the Company in cash or in kind ratably
in proportion to the number of shares of common held by them.
(iv) Preemptive Rights. No stockholder shall have any preemptive
right to subscribe to additional issues or shares of stock of any class or
series or to any stock rights, options, warrants, ventures or other securities
of the Company convertible into stock.
(v) Liability to further calls or to assessment. The Common Shares
of common stock will be issued on a fully paid and non-accessible basis.
(2) The Company's Certificate of Incorporation or Bylaws presently have no
provisions which would have an effect of delaying, deferring or preventing a
change in control of the Company or that would operate with respect to any
extraordinary corporation transaction involving the Company.
(b) Debt Securities.
No debt securities are being registered at this time.
(c) Further Information.
For further information regarding the Company's securities, see Exhibit 4.1
attached and incorporated herein by reference to this Registration Statement
which provides a detailed description of the securities. See also, the
Certificate of Incorporation and the Bylaws attached and incorporated herein by
reference as Exhibits 3(i) and 3(ii).
ITEM 12: INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Certificate of Incorporation and Bylaws of the Company authorize the
indemnification of all officers and directors and agents of the Corporation. The
Company presently does not have officers and directors insurance, although when
it becomes commercially available at a reasonable cost, it is expected that it
will be purchased.
(Item 13 appears on the next page)
-20-
<PAGE>
ITEM 13: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
U.S.A. Sunrise Beverages, Inc.
We have audited the accompanying balance sheet of U.S.A. Sunrise Beverages,
Inc., as of December 31, 1997 and 1996, and the related statements of operations
(loss), cash flows, and stockholders' equity (deficit) for each of the two years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of U.S.A. Sunrise Beverages, Inc.
as of December 31, 1997 and 1996, and the results of its operations (loss), cash
flows, and changes in stockholders' equity (deficit) for each of the two years
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has had no significant operations to date and
must obtain funding to meet its obligations and to begin operations. These
conditions raise substantial doubt about its ability to continue as a going
concern. Management's plans regarding those matters also are described in Note
2. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Denver, Colorado Comiskey & Company
April 30, 1998 PROFESSIONAL CORPORATION
-21-
<PAGE>
<TABLE>
U.S.A. Sunrise Beverages, Inc.
BALANCE SHEETS
December 31, 1997 and 1996
<CAPTION>
December 31, December 31,
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash ...................................... $ 29 $ 14,060
Accounts receivable ....................... -- 9,334
Inventory ................................. 14,398 14,398
----------- -----------
Total current assets ................. 14,427 37,792
----------- -----------
OTHER ASSETS
Fixed assets, net of accumulated depreciation
(Note 3) .................................... 251,934 267,752
Formulas, technology, and territories, net of
valuation allowance (Note 4) ................. -- --
----------- -----------
Total other assets .............................. 251,934 267,752
----------- -----------
TOTAL ASSETS ................................ $ 266,361 $ 305,544
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ................................ $ 21,662 $ 9,661
Accrued interest and dividends payable (Note 6) . 71,635 5,625
Note payable - in foreclosure (Note 5) ......... 274,139 275,669
Note payable - related parties (Note 5) ........ 259,986 200,351
----------- -----------
Total current liabilities ....................... 627,422 491,306
OTHER LIABILITIES
Note payable (Note 5) ........................... -- --
----------- -----------
TOTAL LIABILITIES ............................... 627,422 491,306
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT) (NOTES 2 and 6)
Common stock, $.01 par value; 10,000,000 shares
authorized; 3,703,052 shares issued in 1997,
5,503,052 shares in 1996 ........................ 37,031 55,031
Preferred stock, $.01 par value;
$3.00 stated value; 500,000 shares
authorized; 400,000 shares issued in 1997, ...... 4,000 --
none in 1996
Additional paid-in capital ...................... 1,618,473 1,604,473
Retained earnings (deficit) ..................... (2,020,565) (1,845,266)
----------- -----------
Total stockholders' equity (deficit) ............ (361,061) (185,762)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) .................... $ 266,361 $ 305,544
=========== ===========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
-22-
<PAGE>
<TABLE>
U.S.A. Sunrise Beverages, Inc.
STATEMENTS OF OPERATIONS (LOSS)
For the two years ended December 31, 1997 and 1996
<CAPTION>
December 31, December 31,
1997 1996
----------- -----------
<S> <C> <C>
EXPENSES
Depreciation and amortization ................. $ 15,818 $ 16,545
Interest ...................................... 41,208 31,731
Legal services ................................ 15,154 774
Offering memorandum preparation costs (Note 2) 17,409 8,000
Provision for decline in value of formulas,
technology, and territories (Note 4) . -- 1,274,500
Real estate taxes ............................. 11,253 --
Telephone, utilities, and office expenses ..... 14,457 29,123
Write-off of receivables ...................... -- 44,516
--------- -----------
NET LOSS ........................... $(115,299) $(1,405,189)
========= ===========
NET LOSS PER SHARE ............................ $ (.03) $ (.26)
========= ===========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
-23-
<PAGE>
<TABLE>
U.S.A. Sunrise Beverages, Inc.
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the two years ended December 31, 1997 and 1996
<CAPTION>
Total
stock
Pre- Additional Retained holders'
Common ferred paid-in earnings equity
stock stock capital (deficit) (deficit)
---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995 ................. $ 54,137 $ -- $ 1,578,385 $ (440,077) $ 1,192,445
Issuance of stock for cash ................. 894 -- 26,088 -- 26,982
and services
Net loss for the year ...................... -- -- -- (1,405,189) (1,405,189)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 1996 ................. 55,031 -- 1,604,475 (1,845,266) (185,762)
Exchange of common stock
for preferred stock (Note 6) ............. (18,000) 4,000 14,000 -- --
Dividend on preferred stock
(Note 6) ................................ -- -- -- (60,000) (60,000)
Net loss for the year ...................... -- -- -- (115,299) (115,299)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 1997 ................. $ 37,031 $ 4,000 $ 1,618,473 $(2,020,565) $ (361,061)
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
-24-
<PAGE>
<TABLE>
U.S.A. Sunrise Beverages, Inc.
STATEMENTS OF CASH FLOWS
For the two years ended December 31, 1997 and 1996
<CAPTION>
December 31, December 31,
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ............................................ $(115,299) $(1,405,189)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization .............. 15,818 16,545
Provision for decline in value of
formulas, technology, and territories .. -- 1,274,500
Write-off of receivables ................... -- 44,516
Increase in accounts payable, accrued
interest, and interest added to the
balance of notes payable ............... 22,213 15,288
Other ...................................... 9,337 12,739
-------- -----------
Net cash used by operating activities (67,931) (41,601)
-------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES ................... -- --
-------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to notes payable .......................... 53,900 9,400
Additions to capital stock and additional paid-in
capital ........................................ -- 26,982
-------- -----------
Net cash provided by financing activities .. 53,900 36,382
-------- -----------
DECREASE IN CASH ....................................... (14,031) (5,219)
CASH, BEGINNING OF YEAR ................................ 14,060 19,279
-------- -----------
CASH, END OF YEAR ...................................... $ 29 $ 14,060
======== ===========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
-25-
<PAGE>
U.S.A. Sunrise Beverages, Inc.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
1. Summary of Significant Accounting Policies
U.S.A. Sunrise Beverages, Inc. (the "Company") is incorporated under the
laws of the State of South Dakota. The Company intends to produce and
distribute mineral water and soft drink products.
Going Concern
As more fully discussed in Note 2, the accompanying financial statements
have been prepared assuming the Company will continue as a going concern.
There exists substantial doubt about the Company's ability to continue
as a going concern.
Accounting Method
The Company records income and expense on the accrual method.
Loss per Share
Loss per share has been computed using the weighted average number of
shares outstanding.
Use of Estimates
The preparation of the Company's financial statements in conformity
with generally accepted accounting principles requires the Company's
management to make estimates and assumptions that affect the amounts
reported in these financial statements and accompanying notes. Actual
results could differ from those estimates.
2. Going Concern
The Company's financial statements have been prepared assuming the
Company will continue as a going concern; however, there exists
substantial doubt about the Company's ability to continue as a going
concern.
Liabilities of $627,422 exceed assets of $266,361 by $361,061 at
December 31, 1997. The Company has had no significant operations to
date and must obtain additional funding to meet its obligations and to
begin operations. There can be no guarantee that such financing can be
obtained and that the Company will have sufficient resources to pursue
its business plan. Effective February 12, 1998, management entered into
a letter of intent with a consulting firm to attempt a business
combination with a shell company, followed by a capital infusion from
the sale of stock in the combined entity. The accompanying financial
statements include no adjustments which might be necessary if the
Company is unable to continue.
-26-
<PAGE>
<TABLE>
U.S.A. Sunrise Beverages, Inc.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
3. Fixed Assets
Fixed assets consist of the following:
<CAPTION>
December 31, December 31,
1997 1996
----------- -----------
<S> <C> <C>
Land and buildings ................ $ 254,475 $ 254,475
Equipment ......................... 44,473 44,473
Furniture and fixtures ............ 7,804 7,804
--------- ---------
Total cost ................ 306,752 306,752
Less accumulated depreciation ..... (54,818) (39,000)
--------- ---------
Net book value ............... $ 251,934 $ 267,752
========= =========
</TABLE>
Depreciation is calculated on a straight-line basis over the estimated
useful lives of the assets, from 3 to 40 years.
As explained in Note 5, the Company has a note payable of $274,139
secured by land, building, equipment, furniture and fixtures with a
cost of $285,000 and a net book value of $246,109 at December 31, 1997.
The Company's creditor on this note payable has filed a foreclosure
action.
4. Formulas, Technology, and Territories
Formulas, technology, and territories consist of the following at
December 31, 1997 and 1996:
<TABLE>
<S> <C>
Product formulas and technology $ 1,144,500
Territories 130,000
Less valuation allowance (1,274,500)
------------
Net book value $ --
============
</TABLE>
Product formulas and technology have been recorded on the Company's
books at values set by contracts. Territories represent amounts the
Company expended or agreed to expend to re-acquire marketing
territories it had previously sold. See Note 5 regarding a $22,500 note
payable issued in connection with the re-acquisition of marketing
rights to certain territories.
Due to substantial doubts about the Company's ability to continue as a
going concern and due to the lack of operations to ensure
recoverability of the values assigned to formulas, technology, and
territories, a valuation allowance has been recorded to reduce the
carrying value of these items to zero.
Product formulas and technology represent a 1993 agreement under which
the Company acquired the right to be the exclusive producer and
distributor of ten products in North America, Central America, the
Caribbean, and all U. S. military installations in the world except
those installations located in South America. The products covered by
the technology agreement are soft drinks developed by a Bolivian
concern.
-27-
<PAGE>
U.S.A. Sunrise Beverages, Inc.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
4. Formulas, Technology, and Territories (continued)
To acquire the rights covered under the technology agreement, the
Company and the Bolivian concern agreed that the value of the
transferred technology was $1,144,500. Payment of the acquisition price
was accomplished by the Company issuing 152,600 shares of its common
stock, resulting in an agreed-upon value of $7.50 per share. The term
of the technology agreement is "continuous with revisions every 10
years or when the parties, by mutual accordance, find it pertinent."
The agreement provides the Company with a first right of refusal should
the Bolivian company wish to sell their shares of stock prior to the
time the Company's stock is trading in the public market. The agreement
also provides that "in the event of any problem arising with the
verification of the correct number of shares that represent the number
agreed, U.S.A. Sunrise agrees to come forward and evict and sanitize
the $1,144,500 that must be paid" to the Bolivian company.
The technology agreement also contains a royalty agreement whereby the
Company agreed to pay a royalty of $.30 for each 240 fluid ounces of
product which it sells.
<TABLE>
5. Notes Payable
Notes payable consist of the following:
<CAPTION>
December 31, December 31,
1997 1996
----------- -----------
<S> <C> <C>
10% mortgage note payable secured by
certain fixed assets (see Note 3)
Presently in foreclosure ......................... $ 274,139 $ 275,669
7% note payable to the Company's
president ........................................ 102,357 61,851
Judgment payable to a stockholder ................ 74,129 66,000
10% note payable to a stockholder ................ 50,000 50,000
Non-interest bearing debt payable
to a related party ............................... 22,500 22,500
12% notes payable to a stockholder ............... 6,000 --
10% note payable to a stockholder ................ 5,000 --
-------- --------
$ 534,125 $ 476,020
======== ========
</TABLE>
-28-
<PAGE>
U.S.A. Sunrise Beverages, Inc.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
5. Notes Payable (continued)
The mortgage note payable is secured by the Company's land and building
and a substantial portion of its plant and office equipment (Note 3).
Original terms of the note called for a down payment of $50,000 to be
paid by May 1, 1995, 59 monthly payments, and a final balloon payment
of $227,000 due May 1, 2000. The Company has been unable to comply with
the payment terms of the note and the noteholder has filed for
foreclosure. The foreclosure case, scheduled for trial in May 1998,
requests that a judgment be granted the lender for unpaid amounts plus
fees of approximately $43,000. Management intends to seek an
out-of-court settlement, if possible. The Company's counsel estimates
that the likelihood of an unfavorable outcome is slightly less than
50%. Should the Company be unsuccessful in its efforts, counsel feels
the only loss to the Company will be the loss of funds already paid
under the note payable.
The note payable to the Company's president is pursuant to a loan
agreement whereby the president periodically pays expenses on behalf of
the Company, or advances money to the Company for the Company to pay
its expenses. The note payable bears interest at 7% and is calculated
each December 31 to include all amounts due, including interest accrued
at 7%, through December 31. Interest expense paid or payable to the
Company's president is $4,202 for 1997 and $1,228 for 1996.
The judgment payable to a stockholder is the result of the Company
being unable to comply with the payment terms of a note payable, issued
to a stockholder, that was originally due in July 1995. The judgment
payment is due by June 1, 1998.
The $50,000 10% note payable to a stockholder carries a due date of
February 1996. In addition to interest, the noteholder received 40,000
shares of the Company's common stock. The $5,000 10% note payable to a
stockholder carries a due date of February 1998 and the principal
amount was paid in 1998. In addition to interest, the note holder
received 26,000 shares of the Company's common stock.
The non-interest bearing debt was originally due in April 1992. The
agreement incurring the debt provides that, in the event the Company
fails to make payments required by the agreement, the Company and the
other party to the agreement will share equally all costs and profits
from marketing the Company's product in Florida until such time that
the other party has received all funds due under the agreement.
Contractual maturities of the Company's notes payable, excluding the
10% mortgage note in foreclosure, at December 31, 1997 are as follows:
<TABLE>
<S> <C>
Due in Amount
------ ------------
Past due $ 157,629
1998 102,357
Thereafter --
------------
$ 259,986
============
</TABLE>
-29-
<PAGE>
U.S.A. Sunrise Beverages, Inc.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
5. Notes Payable (continued)
The 10% mortgage note, which is in foreclosure, has been excluded from
the preceding table as the contractual payments are not meaningful
until the present foreclosure action is resolved. The note has been
included in current liabilities in the accompanying financial
statements.
6. Stockholders' Equity
Each share of the Company's common stock entitles the holder to one
vote per share. Each share of the preferred stock entitles the holder
to ten votes per share.
The preferred stock provides for an annual dividend of 5% of its $3.00
stated value. The preferred stock dividend is cumulative and is to be
paid annually at the end of the Company's fiscal year. The holders of
the preferred stock may elect to take their dividend in either cash or
common stock. If the holder elects to take the dividend in stock, the
per share price of the common stock is either $1.50 per share or 50% of
the last transaction price which occurred in the month prior to the
preferred stock dividend declaration.
At December 31, 1997, the Company had not paid the 1997 dividend on the
preferred stock.
During 1997, family members of the Company's president exchanged 1.8
million shares of common stock for 400,000 shares of preferred stock.
-30-
<PAGE>
<TABLE>
U.S.A. Sunrise Beverages, Inc.
INTERIM BALANCE SHEET (UNAUDITED)
January 1, 1998 through June 30, 1998
<CAPTION>
June 30,
1998
-------
<S> <C>
ASSETS
CURRENT ASSETS
Cash .................................................. $ 2,667
-----------
Accounts receivable
Inventory
14,398
Total current assets ........................... 17,065
OTHER ASSETS
Fixed assets, net of accumulated depreciation
244,024
Formulas, technology, and territories, net of
valuation allowance (Note 4) .......................... 0
Total other assets .................................... 0
TOTAL ASSETS .......................................... $ 261,089
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable .......................................... $ 79,985
Note payable - related parties ................................. 20,500
Note payable - related parties ............................ 74,128
Accrued interest .......................................... 33,635
Total current liabilities
208,248
OTHER LIABILITIES .............................................. 442,981
TOTAL LIABILITIES ......................................... 651,229
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.01 par value; 10,000,000 shares
authorized; 3,750,000 shares issued and outstanding ....... 37,500
Preferred stock, $.01 par value; $3.00 stated value;
500,000 shares authorized; 400,000 shares issued
and outstanding ...................................... 4,000
Additional paid-in capital ................................ 1,641,476
Retained earnings (deficit) ............................... (2,073,116)
Total stockholders' equity (deficit) ...................... (340,140)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) ............................. $ 261,089
===========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
-31-
<PAGE>
<TABLE>
U.S.A. Sunrise Beverages, Inc.
STATEMENT OF CASH FLOWS
For the six months ended June 30, 1998 and 1997
(unaudited)
<CAPTION>
For the six months ended
June 30,
1998 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES .... $ (12,292) $ (41 ,093)
CASH FLOWS FROM INVESTING ACTIVITIES .... -- --
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in notes payable ..... 14,930 27,095
DECREASE IN CASH ........................ 2,638 (13,998)
CASH, BEGINNING OF YEAR ................. 29 14,060
-------- --------
CASH, END OF YEAR ....................... $ 2,667 $ 62
======== ========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
-32-
<PAGE>
<TABLE>
U.S.A. Sunrise Beverages, Inc.
STATEMENTS OF LOSS
For the six months ended June 30, 1998 and 1997
(unaudited)
<CAPTION>
For the six months ended
June 30,
1998 1997
-------- --------
<S> <C> <C>
Revenues ............................................ $ -- $ --
Interest expense .................................... 23,368 15,866
Depreciation expense ................................ 7,909 8,273
Other general and administrative expenses ........... 21,274 14,185
Total operating expenses ............................ 52,551 38,324
Non-operating expenses
Writedown of assets to net realizable value -- 1,274,500
-------- -----------
Net Loss ......................... $(52,551) $(1,312,824)
======== ===========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
-33-
<PAGE>
U.S.A. Sunrise Beverages, Inc.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
1. Management's Representation of Interim Financial Information.
The accompanying financial statements have been prepared by U.S.A.
Sunrise Beverages, Inc. without audit pursuant to the rules and
regulations of the Securities & Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted as allowed by such rules and
regulations, and management believes that the disclosures are adequate
to make the information presented not misleading. Theses financial
statements include all of the adjustments which, in the opinion of
management, are necessary to a fair representation of financial
position and results of operations. All such adjustments are of a
normal and recurring nature. These financial statements should be read
in conjunction with the audited financial statements at December 31,
1997.
-34-
<PAGE>
ITEM 14: DISAGREEMENTS WITH ACCOUNTANTS REGARDING
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 15: FINANCIAL STATEMENTS AND EXHIBITS
(a) List of all financial statements filed.
None other than in Item 13 above.
(b) Exhibit Index.
The Exhibit Index immediately follows the signature page.
(signature page appears on next page)
-35-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Company has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
U.S.A. SUNRISE BEVERAGES, INC.
(Registrant)
Date: October 8, 1998 By: /s/ Omar B. Barrientos
(Signature) President
Omar B. Barrientos
(Print Name)
Date: October 8, 1998 By: /s/ Gene Fairchild
(Signature) Secretary
Gene Fairchild
(Print Name)
DIRECTORS:
/s/ Omar B. Barrientos Date: October 8, 1998
Omar Barrientos, Director
/s/ Robert Westerfield Date: October 8, 1998
Robert Westerfield, Director
/s/ Gene Fairchild Date: October 8, 1998
Gene Fairchild, Director
/s/ Louis J. Twiss Date: October 8, 1998
Louis J. Twiss, Director
/s/ William S. Brewster Date: October 8, 1998
William S. Brewster, Director
Exhibit Index is located on page 37
-36-
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit Located
Number Description on Page
- ------ ----------- -------
<S> <C> <C>
3(i) Articles of Incorporation 39
of Papaya U.S.A. Corporation
Articles of Amendment 44
Filed November 4, 1993
Articles of Amendment 45
Filed December 26, 1995
Articles of Amendment 47
Filed August 13, 1997
Letter of Amendment 50
Filed July 28, 1997
3(ii) Bylaws 51
4.1 Description of Securities 54
4.2 Resolution of Board of Directors dated
May 31, 1997 re: rights of Preferred Stock 56
4.3 Proposed Lockup Agreement between the
Shareholders and the Company 57
Material Contracts
10.1 Technology Transfer Agreement & Addendum
between Cascada and Tesoro dated
September 30, 1993 58
10.2 Viscachani Contract between
Cascada and Tesoro dated
September 30, 1993 66
10.3 Viscachani Contract between
Tesoro and the Company dated
October 1, 1993 70
10.4 Water Contract between Paul
Miller Sr. Trust and Tesoro dated
October 22, 1995 73
-37-
<PAGE>
EXHIBIT INDEX (continued)
<CAPTION>
Exhibit Located
Number Description on Page
- ------ ----------- -------
<S> <C> <C>
10.5 Addendums to Water Contract
between Paul Miller Sr. Trust and
Tesoro dated January 10, 1997 78
10.6 Quit Claim Deed and Release dated
August 18, 1998 between Dakota Mining
and Construction, Inc. and the Company 80
10.7 Letter of Intent between Paul Miller Sr.
Trust, Tesoro and Company dated July 13,
1998 82
10.8 Loan Agreement between Omar Barrientos
and the Company dated January 1, 1994 85
10.9 Note Agreement between Dr. Neil Kurti
and the Company dated November 11, 1995 91
99.1 Accountant's consent letter to use financial
statements dated October 8, 1998 92
</TABLE>
-38-
<PAGE>
EXHIBIT 3(i)
ARTICLES OF INCORPORATION
OF
PAPAYA U.S.A. CORPORATION
We the undersigned natural person of the age of twenty-one years or more acting
as incorporators under the South Dakota Business Corporation Act, adopt the
following Articles of Incorporation for such corporation.
I.
The name of the corporation is Papaya U.S.A. Corporation.
II.
The period of its duration is perpetual.
III.
The purpose or purposes for which the corporation is organized are
(1) To act as distributor, representative, licensee, producer,
manufacturer, bottler or agent as such, to establish marketing companies,
directly or by contract to establish advertising companies, warehouses, product
lines, trucking lines direct or under contract, to establish retail and
wholesale operations of international and interstate commerce.
(2) The corporation hereby formed shall have power to purchase lease, or
otherwise acquire by bequest, devise, gift or other means, and to hold, own,
manage, or develop, and to mortgage, hypothecate deed in trust, sell, convey,
exchange, option, sub-divide, or otherwise dispose of real and personal property
of every class and description and any estate or interest therein, as may be
necessary or convenient for the proper conduct of the affairs of the
corporation, without limitation as to amount or value, in any of the states,
districts, or territories of the United States and in any and all foreign
countries, subject to the laws of such States, districts, territories, or
countries.
(3) To finance, erect, construct, maintain, improve, rebuild, enlarge,
alter, manage, and control, directly or through ownership (if stock in any
corporation, any and all kinds of buildings, houses, stores, offices, shops,
warehouses, factories, mills, machinery, and plants, and any and all other
structures and erections that may at anytime be necessary, useful, or
advantageous for the purposes of the corporation.
(4) To incur obligations and debts and borrow money, either upon or
without security, from any person, firm or corporation, for any purpose or
object in or about its business or affairs or purposes, without limitation as to
amount, and to cause the payment of money and of debts in any lawful manner,
including, but not limited to, the issuance and sale or other disposition of
bonds, obligations, negotiable and transferable instruments and evidence of
indebtedness of all kinds whether secured by hypothecation of property or
otherwise to mortgage, pledge, make deeds of trust, create lien upon, or
otherwise to alienate, or hypothecate any or all of the real estate and personal
property and things of value of the corporation as security for the payment of
debts.
-39-
<PAGE>
(5) To organize or cause to be organized under the laws of any state,
district, territory, province or government, a corporation or corporations for
the purpose of accomplishing any or all of the objects for which this
corporation is organized and to dissolve, wind up, liquidate, merge or
consolidate any such corporation or corporations or to cause the same to be
dissolved, wound up, liquidated, merged or consolidated, to subscribe or to
cause to be subscribed for and to purchase or otherwise acquire, hold, sell,
assign, transfer, mortgage, pledge, exchange distribute, and otherwise dispose
of, the whole or any part of the shares of the capital stock, bonds coupons,
preferred stock mortgages, deeds of trust, debentures, securities, obligations,
evidences of indebtedness, notes, good will, rights, assets, and property of any
and every kind, or any part thereof, of any other corporation or corporations,
or associations, including, but not limited to, banking corporations now or
hereafter existing and whether or not created by the laws of the State of South
Dakota; to operate, manage, and control such properties or any of them either in
the name of such corporation or corporations or in shares of capital stock. to
exercise all the rights, powers and privileges of ownership of every kind and
description, including the right to vote thereon with power to designate some
persons for that purpose from time to time to the same extent as natural persons
might or could do; to purchase hold, acquire, sell, exchange, transfer pledge,
hypothecate, or otherwise deal in shares of this corporation's own capital
stock, bonds or other obligations from time to time to such an extent and in
such manner and upon such terms as its Board of Directors shall determine at the
delegation of such power to the Board of Directors by the shareholders.
(6) To issue capital stock of this corporation in payment for real or
personal property, services, or any other right. or thing of value, for the uses
and purposes of the corporation, and when so issued such stock shall become and
be fully paid, and the same as though paid for in cash at par and the Directors
shall be the sole judges of the value of any property, services, rights, or
things acquired in exchange for capital stock.
(7) Without limitation or restriction either by or upon the foregoing
specified powers and purposes, to own buy, hold, acquire by conveyance,
instruments of transfer, contract, lease, royalty arrangement, license, permit,
option, franchise, grant, assignment, gift, divise, bequeath or otherwise, by
any lawful means any real or personal property or thing of value of any
character, and to sell, convey, use, operate, trade, rent, pledge, mortgage,
transfer. hypothecate, alienate, or dispose of the same, and to build,
construct, install, erect and operate buildings, structures terminals, garages,
stations. stores, warehouses, bottling companies, distribution centers, sales
routes, improvements, and facilities, equipment and appliances, machinery and
installations of any kind, to further the purposes of this corporation and as
may be incidental, necessary or convenient in connection with its business, or
to carry on any other business which may seem to this corporation capable of
being convenient in connection with its business, or to carry on any other
business which may seem to this corporation capable of being conveniently
carried on in connection with its business or calculated directly or indirectly
to enhance the value of or render possible any of the corporation's property or
rights.
(8) To do each and every thing necessary, suitable, or proper for the
accomplishment of any of the purposes or the attainment of any one or more of
the objects herein enumerated, or which shall at any time be conducive to or
expedient for the protection or benefit of this corporation. The purposes
specified herein shall he construed both as purposes and powers and shall be in
no way limited or restricted by reference to or inference from, the terms of any
other clause in this or any other article, but the purposes or powers specified
in each of the clauses herein shall be regarded as independent purposes and
powers, and the enumeration of the specific purposes and powers shall not be
construed to limit or restrict in any manner the meaning of general terms or of
the general power of this corporation; nor shall the expression of one thing be
deemed to exclude another, although it be of like nature not expressed.
(9) And to have any and all powers set forth above as fully as natural
persons whether as
-40-
<PAGE>
principals, agents, trustees, or otherwise.
(10) And for any other lawful purpose.
IV.
The number of shares that the corporation shall have authority to issue,
shall be and is Two Million Five Hundred Thousand (2,500,000) shares of common
stock of One Cent ($0.01) par value each. Said stock, when issued, shall be
fully paid and non-assessable.
V.
Before the can be a valid sale or transfer of any of the shares of the
corporation by any holder, he shall first offer the shares to the corporation
and then to the other holders of shares in the following manner:
(a) The offering shareholder shall deliver a notice in writing by
mail, or otherwise to the Secretary of the corporation stating the price, terms,
and conditions of the proposed sale or transfer, the number of shares to be sold
or transferred, and his intention so to sell or transfer these shares. Within
thirty (30) days thereafter, the corporation shall have the prior right to
purchase all of the shares so offered at the price and upon the terms and
conditions stated in the notice. Should the corporation fail to purchase all of
these shares, at the expiration of said thirty (30) day period, or prior thereto
upon the determination of the corporation to purchase none or only a portion of
such shares so offered, the Secretary of the corporation shall, within five (5)
days thereafter, mail or deliver to each of the other shareholders a notice
setting forth the particulars concerning said shares not so purchased by the
corporation described in the notice received from the offering shareholder. The
other shareholders shall have the right to purchase all of the shares specified
in said Secretary's notice by delivering to the Secretary by mail or otherwise a
written offer or offers to purchase all or any specified number of such shares
upon the terms so described in the Secretary's notice if such offer or offers
are so delivered to the Secretary within fifteen (15) days after mailing or
delivering such Secretary's notice to such other shareholders. if the total
number of shares specified in such offers so received within such period by the
Secretary exceeds the number of shares referred to in such Secretary's notice,
each offering shareholder shall be entitled to purchase such proportion of the
shares referred to in said notice to the Secretary, as the number of shares of
this corporation, which he holds, bears to the total number of shares held by
all such shareholders desiring to purchase the shares referred to in said notice
to the Secretary.
(b) If all of the shares referred to in said notice to the Secretary are
not disposed of under apportionment, each shareholder desiring to purchase
shares in a number in excess of his proportionate share, as provided above,
shall be entitled to purchase such proportion of those shares which remain thus
indisposed of, as the total number of shares which he holds bears to the total
number of shares held by all of the shareholders desiring to purchase shares in
excess of those to which they are entitled under such apportionment.
(c) If none or only a part of the shares referred to in said notice to
the Secretary are purchased, as aforesaid, by the corporation or in accordance
with offers made by other shareholders within said fifteen (15) day period, the
shareholder desiring to sell or transfer shall not be obligated to accept any
such offers from the corporation or from one or more of the other shareholders
and may dispose of all of the shares of stock referred to in said notice to any
person or persons, provided, however, that he shall not sell or transfer such
shares at a lower price or on terms more favorable to the purchaser or
transferee than those specified in said notice to the Secretary.
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<PAGE>
(d) Any sale or transfer or purported sale or transfer of the shares of
the corporation shall be null and void unless the terms, conditions and
provisions of this article are strictly observed and followed.
VI.
The corporation will not commence business until consideration of the
value of at least One Thousand Dollars ($1,000.00) has been received for the
issuance of shares.
VII.
The address of the corporation's registered office is 2141 Maywood
Drive, City of Rapid City, County of Pennington, State of South Dakota, 57701.
The mailing address is P.O. Box 8389 Rapid City SD 57709 and the name of the
registered agent at such address is Omar Barrientos.
VIII.
The number of directors of this corporation shall be established by the
By-Laws of the corporation The number of directors constituting the initial
Board of Directors of the corporation is two (2) and the names and addresses of
the persons who are to serve as directors until the first annual meeting of
shareholders or until their successor is elected and shall qualify is:
NAME ADDRESS
Omar Barrientos 2141 Maywood Drive, City of Rapid.
Rapid City, SD 57701
David Sickels 504 McMillan
Holdrege, NE 68949
The number of directors may hereafter be fixed by the By-Laws of the
corporation. A director need not be a shareholder of this corporation.
IX.
The By-Laws of the corporation shall be amended only by the affirmative
vote of a majority of the stockholders.
X.
The names and addresses of the incorporators are as follows:
NAME ADDRESS
Omar Barrientos 2141 Maywood Drive, City of Rapid.
Rapid City, SD 57701
NAME ADDRESS
Isabel Barrientos 2141 Maywood Drive, City of Rapid.
Rapid City, SD 57701
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XI.
No shareholder shall be liable for the debts of the corporation in any
amount greater than the amount remaining unpaid on the capital stock for which
he has subscribed.
XII.
The corporation insofar as permitted by law, may indemnify any and all
of its Directors or officers or both, or former Directors or officers, of any
person who may have served at its request as a Director or officer of another
corporation in which this, corporation owns shares of capital stock, or of which
it is a creditor, against any liabilities arising and in connection therewith
expenses actually and necessarily incurred by them with the defense of any
claim, action, suit or proceedings, civil or criminal, which they or any of them
are made parties or a party, by reason of being or having been such Director or
officer, except in relation to matters as to which any such Director officer
shall be adjudged in such action, suit or proceeding to be liable for negligence
or misconduct in the performance of duty. Such indemnification shall be deemed
to be exclusive of any other rights to which those indemnified may be entitled,
under any by law, agreement, vote of shareholders or otherwise.
IN TESTIMONY WHEREOF, we have set our hands and seals this 9th day of Aug. 1990
/s/ Omar Barrientos /s/ Isabel Barrientos
Omar Barrientos Isabel Barrientos
STATE OF SOUTH DAKOTA
COUNTY OF PENNINGTON
On this the 9th day of August, 1990, before me, the
undersigned officer, personally appeared Omar Barrientos and Isabel Barrientos,
known to me or satisfactorily proven to be the persons whose names are
subscribed to the within instrument and acknowledged that they executed the same
for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/
Notary Public, South Dakota
My Commission Expires July 21, 1991
(SEAL)
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RETURN TO
SECRETARY OF STATE
STATE CAPITOL
500 E. CAPITOL ARTICLES OF AMENDMENT
PIERRE, SD 57501-5070 TO THE
605-773-4845 ARTICLES OF INCORPORATION
Pursuant to the provisions of SDCL 47-2-9, the undersigned corporation
adopts the following Articles of Amendment to its Articles of Incorporation:
1. The name of the corporation is PAPAYA U.S.A. CORPORATION
2. The following amendment of the Articles of Incorporation was adopted by the
shareholders of the corporation on October 28, 1993 in the manner prescribed by
the South Dakota Corporation Acts:
OR
No shares have been issued and the following amendment was adopted by the
Board of Directors on 19--.
Approved Amendments by shareholders as follows:
Article one (1) above:
Change of name of the corporation from Papaya U.S.A. Corporation
to: U.S.A. SUNRISE BEVERAGES, INC.
Approved increase of authorized stock it can issue from present
3,000,000 shares to: 10,000,000 (ten million) shares.
Therefore it is approved to change the name of the corporation
to U.S.A. SUNRISE BEVERAGES, INC. and,
It is approved to increase authorized stock it can
issue to 10,000,000 shares, with par value of $0.01 cents.
Filed this 4th day of
Nov. 1993
/s/ Joyce Hazeltine
Secretary of State
3. The number of shares of the corporation outstanding at the time of such
amendment was 3,000,000 and the number of shares entitled to vote thereon was
3,000,000.
4. The designation and number of outstanding shares of each class entitled
to vote thereon as a class were as follows:
Class: Common Number of shares:3,000,000
5. The number of shares voted for such amendment was 2,850,000. The
number of shares voted against such amendment was 150,000 (not voted)
The number of shares of each class entitled to vote thereon as a class voted for
and against such amendment was:
Number of shares: 3,000,000
Class: Common For: 2,850,000 Against 0
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RETURN TO
SECRETARY OF STATE
STATE CAPITOL
500 E. CAPITOL ARTICLES OF AMENDMENT
PIERRE, SD 57501-5070 TO THE
605-773-4845 ARTICLES OF INCORPORATION
Pursuant to the provisions of SDCL 47-2-9, the undersigned corporation
adopts the following Articles of Amendment to its Articles of Incorporation:
1. The name of the corporation is U.S.A. Sunrise Beverages, Inc. DB-029741
2. The following amendment of the Articles of Incorporation was adopted by the
shareholders of the corporation on September 5, 1995 in the manner prescribed by
the South Dakota Corporation Acts:
OR
No shares have been issued and the following amendment was adopted by the Board
of Directors on 19--.
Approved Amendments by shareholders as follows:
Approved to amend the articles of incorporation. Approved to be
authorized and amend the stock it can issue.
Approved to have the authority to issue 500,000 Five Hundred
Thousand) of Series A, preferred stock, Therefore it is approved to have
the authority to issue such preferred Series A , Preferred stock, which
will have the same value as to par value of $0.01, with no voting rights,
except with respect to certain matters required by South Dakota General
Corporation Law.
Filed this 26th day of
Dec. 1995
/s/ Joyce Hazeltine
Secretary of State
3. The number of shares of the corporation outstanding at the time of such
amendment was 6,211,730 and the number of shares entitled to vote thereon was
6,211,730.
4. The designation and number of outstanding shares of each class entitled to
vote thereon as a class were as follows:
Class: Common Number of shares:6,211,730.
5. The number of shares voted for such amendment was 4,601,460. The number of
shares voted against such amendment was None.
The number of shares of each class entitled to vote thereon as a class voted
for and against such amendment was: Number of shares:
Class: Common For: 4,601,460 Against None
Common 1,610,270 Absent (not voted)
6. The manner, if not set forth in such amendment, in which any exchange,
reclassification or cancellation of issued shares provided for in the amendment
shall be effected, is as follows:
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7. The manner in which such amendment effects a change in the amount of stated
capital, and a statement expressed in dollars, of the amount of stated capital
as changed by such amendment.
Present stated common stock stated capital $ 62,117.00
When issued, series A preferred stock inc. stated cap. 5,000.00 (increase)
To be signed in the presence of a notary public by either the chairman of the
Board of directors, or by the president or any other officer.
Dated 12-6, 1995 /s/ Omar Barrientos
President
State of Pennington
County of South Dakota
On this 6 day of Dec 1995 before me personally appeared Omar Barrientos, known
to me, or proved to me, to be the president of the corporation that is described
in and that executed the within instrument and acknowledged to me that such
corporation executed same.
Notarial Seal
13 June 2003 /s/ Earl Llewellyn
My Commission Expires: Notary Public
FILING FEE: $20
1. Please list EXACT corporate name in number one.
2. Complete signatures and titles of the officers signing for the corporation.
3. Complete notary verification.
AN ORIGINAL and ONE EXACT COPY of the Articles of Amendment must be submitted
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<PAGE>
RETURN TO
SECRETARY OF STATE
STATE CAPITOL
500 E. CAPITOL ARTICLES OF AMENDMENT
PIERRE, SD 57501-5070 TO THE
605-773-4845 ARTICLES OF INCORPORATION
Pursuant to the provisions of SDCL 47-2-9, the undersigned corporation
adopts the following Articles of Amendment to its Articles of Incorporation:
1. The name of the corporation is U.S.A. Sunrise Beverages, Inc. (Former Papaya
USA Corporation)
2. The following amendment of the Articles of Incorporation was adopted by the
shareholders of the corporation on 1/4/93 in the manner prescribed by the South
Dakota Corporation Acts:
OR
No shares have been issued and the following amendment was adopted by the Board
of Directors on 19--.
Article V of the Articles of Incorporation was and is repealed and deleted
Please see attached
Article IX of the Articles of Incorporation is ammended as follows:
Please see attached
Filed this 13th day of
Aug. 1997
/s/ Joyce Hazeltine
Secretary of State
3. The number of shares of the corporation outstanding at the time of such
amendment was 1,457,000 and the number of shares entitled to vote thereon was
1,457,000.
4. The designation and number of outstanding shares of each class entitled to
vote thereon as a class were as follows:
Class: Common Number of shares:1,457,000
5. The number of shares voted for such amendment was 1,457,000. The number of
shares voted against such amendment was 0.
The number of shares of each class entitled to vote thereon as a class voted
for and against such amendment was: Number of shares:
Class: Common Stock For: 1,457,000 Against 0
Absent 5,
6. The manner, if not set forth in such amendment, in which any exchange,
reclassification or cancellation of issued shares provided for in the amendment
shall be effected, is as follows:
N/A
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<PAGE>
7. The manner in which such amendment effects a change in the amount of stated
capital, and a statement expressed in dollars, of the amount of stated capital
as changed by such amendment.
N/A
To be signed in the presence of a notary public by either the chairman of the
Board of directors, or by the president or any other officer.
Dated 07/28, 1997 /s/ Omar Barrientos
President
State of South Dakota
County of Pennington
On this 28 day of July 1997 before me Douglas M. Schmit personally appeared Omar
Barrientos, known to me, or proved to me, to be the President of the corporation
that is described in and that executed the within instrument and acknowledged to
me that such corporation executed same.
Notarial Seal
10/24/2004 /s/ Douglas M. Schmit
My Commission Expires: Notary Public
FILING FEE: $20
1. Please list EXACT corporate name in number one.
2. Complete signatures and titles of the officers signing for the corporation.
3. Complete notary verification.
AN ORIGINAL and ONE EXACT COPY of the Articles of Amendment must be submitted.
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<PAGE>
AMENDMENTS TO ARTICLES OF INCORPORATION ADOPTED AT A SHAREHOLDER'S MEETING ON
JANUARY 4, 1993
Article v, (a),(b),(c),(d) of the Articles of Incorporation is hereby by duly
Resolution of stockholders repealed and replaced as follows:
Except for duly made shareholder's agreement between the company and a
stockholder/employee/director or other entity, and which agreement is governed
by the terms of said shareholder's agreement, any transfer or sale of stock by a
stockholder may, at the discretion of the Board or under legal counsel be
rejected by the company. Further the company reserves the right to reject any
purchase/transfer directly of indirectly from any entity or individual of
company's stock or transfer of stock. For transfers of stock to be considered
valid, the company, at its option may request a binding legal opinion of
counsel, establishing that such transfer or assignment complies with law. Any
and all costs of such an opinion shall entirely be borne by the party effecting
the transfer without regards of acceptance or rejection by the company of such
transfers or assignments. All transfers/assignments shall establish a
consideration or agreement between the parties of transfer. All
transfers/assignments shall be evidenced by a transfer/assignment document from
transferor and company may request at any time a document letter from
beneficiary (receiver) of transfer establishing whether or not the company has
or has not received any direct consideration for the stock transferred. In the
event that no direct investment or consideration from beneficiary has been
received by company, receiver of stock transferred shall be required to state:
"The assignment or transfer of shares constitutes a transfer of personally owned
shares by the assignor and not a direct investment on the company. The company
shall be held harmless of any consequential damages or liabilities other than
perfecting the enclosed assignment in compliance thereof". All stock
certificates issued by the company shall be subject to proper compliance in the
event of any dispute between transferor/assignor and/or assignee/transferee.
Company shall not be made a part of any disputes between the parties of a
transfer. Any disputed transfer shall be held pending by the company until
documents to perfect the transfer on books of the company have been received in
satisfaction to legal counsel of company. All certificates issued by company to
a third party shall be considered pending and registered only to the name under
the underlying certificate of original owner of shares on record.
Article IX of the Articles of Incorporation is hereby amended by duly resolution
of the majority of stockholders as set for in records of a special stockholders
and Board meeting on January 4, 1993, as follows:
The Board of Directors of Papaya U.S.A. Corporation have the authority granted
to amend, alter, add to, repeal, rescind or change in any other way any and all
of the Bylaws of this Corporation as the Board of Directors shall deem fit and
proper, and such authority shall not require either any action or consent by of
from the shareholders of the Corporation. The shareholders are to retain the
right to revoke the above grant of authority to the directors. Such revocation
shall be made by a resolution adopted by the holders of a majority of the
Corporation's stock entitled to vote at a duly convened meeting of shareholders.
Unless and until such revocation action is taken by the shareholders, the
shareholders shall not exercise their power, under Articles of the Bylaws to
amend, alter, add to, repeal, rescind or change in any way the Bylaws of Papaya
U.S.A. Corporation
/s/ Omar Barrientos
President
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<PAGE>
U.S.A. Sunrise Beverages, Inc.
{Graphic Omitted}
Filed this 26th day of
Dec. 1995
/s/ Joyce Hazeltine
Secretary of State
July 28, 1997
Joyce Hazeltine
Secretary of State
State Capitol
500 E. Capitol
Pierre, SD 57501-5070
RE: Correction: Articles of Correction
Enclosed please find a copy of an amendment to the articles of incorporation, of
which we request a correction.
The amendment is for the Series A, Preferred stock, and in mistake reads: with
no voting rights. It should be corrected to read:
Therefore it is approved to have the authority to issue such preferred series A,
Preferred Stock, which will have the same value as to par value of $0.01 with
voting rights and with respect to certain matters required by South Dakota
General Corporation Law.
Respectfully,
/s/ Omar Barrientos
President
STATE OF SOUTH DAKOTA
SS.
COUNTY OF LAWRENCE
On this the 28 day of July, 1997, before me, the undersigned officer,
personally appeared Omar Barrientos known to me or satisfactorily proven to be
the President of the corporation that is described in and that executed the
within instrument and acknowledged that such corporation executed same.
/s/ Douglas M. Schmit
Notary Public
My Commission Expires 10/24/2004
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EXHIBIT 3(ii)
BYLAWS OF PAPAYA U.S.A. CORPORATION
1. The Articles of Incorporation as filed shall constitute the initial
Bylaws of the company. The articles of incorporation are attached to
the bylaws.
ADOPTED BYLAWS AT A SPECIAL MEETING OF STOCKHOLDERS
AND BOARD OF DIRECTORS ON 1/4/93
The following were considered implicit Bylaws and are hereby ratified:
2. Vote by Stockholders is non-cumulative.
3. The president and or the Board have the right to designate places and
times for Board Meetings and stockholder's meetings.
4. Annual stockholder's meetings may be called with ten days notification.
5. To be valid, Special meetings do not need timely notices, but must have
quorum of at least majority of Director's for Board meetings and
majority of stockholder's votes, including proxies for stockholder's
meetings.
6. The percentage of stock to constitute a majority for stockholder's
meetings shall be 51%.
The following are Bylaws of the company approved on January 4, 1993
7. Records of the company may be inspected by its stockholder's with
previous written request and within legal and corporate parameters and
with the utmost care to protect the confidentiality of other
stockholder's. Records of company may be examined for a specific
purpose only, no copies of sensitive information shall be permitted, no
copies of confidential ledgers shall be permitted, no copies of
contracts shall be permitted, no copies of stock consideration shall be
permitted.
7.1 Private Ledger inclusions are: Stock consideration, any request by any
stockholder's of privacy retention, Stock's Certificates, contracts of
the company with individuals or entities where sensitive information is
included at the discretion of the officers of the company.
8. Every stockholder is entitled to review and comment on his
(her's)(lt's) own stock ledger and is entitled to the copies of record.
9. The company, with a view of in the future effecting private or public
offerings, and the implications afterwards, may at the discretion of
its officers deny any information considered sensitive to any
stockholder suspected of trying to gain information for the purpose of
personal gain by obtaining insider's information or privileged
information with the purpose of personal gain, before the information
becomes public. Or where the company's interest and that of its
stockholder's may be in jeopardy due to the hostile intentions of any
stockholder demonstrating
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animosity towards the company's plans and developments.
10. All of the provision established on articles of incorporation, unless
revoked, by resolution shall be part of the By-Laws of the Company.
10.1 Article v, (a),(b),(c),(d) of the Articles of Incorporation is hereby
by duly Resolution of stockholders repealed and replaced as follows:
10.2 Except for duly made shareholder's agreement between the company and a
stockholder/employee/director or other entity, and which agreement is
governed by the terms of said shareholder's agreement, any transfer or
sale of stock by a stockholder may, at the discretion of the Board or
under legal counsel be rejected by the company. Further the company
reserves the right to reject any purchase/transfer directly of
indirectly from any entity or individual of company's stock or transfer
of stock. For transfers of stock to be considered valid, the company,
at its option may request a binding legal opinion of counsel,
establishing that such transfer or assignment complies with law. Any
and all costs of such an opinion shall entirely be borne by the party
effecting the transfer without regards of acceptance or rejection by
the company of such transfers or assignments. All transfers/assignments
shall establish a consideration or agreement between the parties of
transfer. transfers/assignments shall be evidenced by a
transfer/assignment document from transferor and company may request at
any time a document letter from beneficiary (receiver) of transfer
establishing whether or not the company has or has not received any
direct consideration for the stock transferred. In the event that no
direct investment or consideration from beneficiary has been received
by company, receiver of stock transferred shall be required to state:
"The assignment or transfer of shares constitutes a transfer of
personally owned shares by the assignor and not a direct investment on
the company. The company shall be held harmless of any consequential
damages or liabilities other than perfecting the enclosed assignment in
compliance thereof". All stock certificates issued by the company shall
be subject to proper compliance in the event of any dispute between
transferor/assignor and/or assignee/transferee. Company shall not be
made a part of any disputes between the parties of a transfer. Any
disputed transfer shall be held pending by the company until documents
to perfect the transfer on books of the company have been received in
satisfaction to legal counsel of company. All certificates issued by
company to a third party shall be considered pending and registered
only to the name under the underlying certificate of original owner of
shares on record.
10.3 Article IX of the Articles of Incorporation is hereby amended by duly
resolution of the majority of stockholders as set for in records of a
special stockholders and Board meeting on January 4, 1993, as follows:
10.4 The Board of Directors of Papaya U.S.A. Corporation have the authority
granted to amend, alter, add to, repeal, rescind or change in any other
way any and all of the Bylaws of this Corporation as the Board of
Directors shall deem fit and proper, and such authority shall not
require either any
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<PAGE>
action or consent by of from the shareholders of the Corporation The
shareholders are to retain the right to revoke the above grant of
authority to the directors. Such revocation shall be made by a
resolution adopted by the holders of a majority of the Corporation's
stock entitled to vote at a duly convened meeting of shareholders.
Unless and until such revocation action is taken by the shareholders,
the shareholders shall not exercise their power, under Articles of the
Bylaws to amend, alter, add to, repeal, rescind or change in any way
the Bylaws of Papaya U.S.A. Corporation.
11. Resolutions of the Board of Directors shall constitute amendments or
additions to the By-Laws of the Company. The incorporation of the
Resolutions shall be by attachment to records.
12. Corporate records, Ledgers, Stockholders lists, certificates lists and
templates, financial transactions and in general books of the company
shall be considered legal and for the record subject to compliance and
verification and adjustments of record.
13. Any By-Laws adopted by the company found to be illegal by a competent
jurisdictional body of law within the state of South Dakota, shall be
considered upon such finding as void. Balance of By-Laws shall not be
affected by any such finding.
/s/ Omar Barrientos
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EXHIBIT 4.1
DESCRIPTION OF SECURITIES
General
The Company's authorized capital stock consists of 10,000,000 shares of Common
Stock, par value $0.01 per share, and 500,000 shares of Preferred Stock, $0.01
par value per share.
Common Stock
The authorized Common Stock of the Company is 10,000,000 shares, $0.01 par
value. As of the date of this filing, 3,750,000 Common Shares are issued and
outstanding. The holders of Common Shares (i) have equal rights to dividends
from funds legally available therefore, when, as and if declared by the Board of
Directors of the Company; (ii) are entitled to share ratably in all of the
assets of the Company available for distribution to holders of Common Shares
upon liquidation, dissolution or winding up of the affairs of the Company; (iii)
do not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions applicable thereto; and (iv) are entitled
to one non-cumulative vote per share on all matters which stockholders may vote
on at all meetings of Shareholders. All of the Common Shares now issued and
outstanding are fully paid and non-assessable. Holders of Common Shares of the
Company do not have cumulative voting rights.
Preferred Stock
The Company has authorized 500,000 Preferred Shares of Class A Voting Preferred
Stock, $0.01 par value. As of the date of this filing, 400,000 Preferred Shares
of the Class A Voting Preferred Stock are issued and outstanding.
Pursuant to a resolution dated May 31, 1997, the issued and outstanding
Preferred Shares have been assigned the following rights and preferences by the
Board:
1. All 400,000 shares of Class A Voting Preferred Stock issued and
outstanding shall be deemed Class A Voting Preferred and shall have ten (10)
votes on all matters which require or are submitted to the shareholders of the
Company for their approval and for all votes of the Company.
2. The Class A Voting Preferred shall be entitled to a cumulative
annual dividend equal to 5% of its stated value ($3.00). The dividend shall be
paid annually at the end of the Company's fiscal year. There shall be no
restriction on the payment of dividends on the Common Stock in any year in which
the dividend on the Class A Voting Preferred Stock shall not have been paid. In
addition, the holders of the Class A Voting Preferred Stock may elect to take
the dividend in the form of either cash or Common Stock based upon a price per
share equal to (i) 50% of the last transaction price which occurred in the month
prior to the dividend declaration or (ii) $1.50 per share.
3. Upon the liquidation of the Company, the Class A Voting Preferred
Stock shall be redeemed for stated value plus accrued and unpaid dividends.
4. Each share of Class A Voting Preferred Stock has the right to cast
10 votes (for each share beneficially held) in all matters coming before a
Shareholders meeting. The executive officer controls 100% of the outstanding
Class A Voting Preferred or 400,000 shares as a group.
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Dividend Policy
The present policy of the Company is to utilize earnings to fund its ongoing
business. The Company has not declared or paid cash dividends on its Shares and
does not anticipate that it will do so in the future.
Restrictions On Transfer
Each of the Company's Shares shall be subject to a lockup agreement between the
Company and each Shareholder. The aforementioned Shares shall be subject to a
legend restricting the transferability of those Shares for a period of six (6)
months, commencing upon the effective date of this Form 10-SB. Each Share shall
bear the following legend upon each certificate:
"This share certificate is subject to an agreement between the Company
and its Shareholders which sets forth restrictions upon the
transferability of the Shares represented by this certificate. The
holder of this certificate hereby agrees that during the period of six
(6) months after the effective date of the Company's Form 10-SB, the
holder will not, without obtaining prior written consent of the
Company, or, if required, the consent of any exchange or regulatory
entity, offer, exchange, sell, contract to sell, grant any option for
the sale of, or otherwise dispose of, directly or indirectly, any
Shares represented by this certificate."
Pursuant to this agreement, the Shares would be deemed "restricted securities".
Notwithstanding this agreement, the resale of the Shares, nonetheless, will also
be subject to the respective state securities law requirements in the governing
jurisdictions which would impose restrictions on the resale of the securities
(including, but not limited to, placement of an additional legend or legends on
the certificate). The Company may elect to register its securities in certain
states, but no assurances can be made that such registrations may become
effective. In the event the Company successfully registers its securities in one
or more states, a purchaser of the Company's Shares may not be able to resell
such stock outside the jurisdiction of these states and may be subject to the
securities requirements governing resale in such states and, to that extent,
such requirements may restrict or otherwise prohibit the resale of the Shares.
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EXHIBIT 4.2
CERTIFICATION OF
BOARD OF DIRECTOR'S RESOLUTION
TO ISSUE AUTHORIZED PREFERRED STOCK
This is to certify that the Board of Directors of U.S.A. Sunrise Beverages,
Inc., has duly passed and approved the following Resolution effective May 31,
1997.
RESOLVED: that the Board of Directors of U.S.A. Sunrise Beverages, Inc., by the
powers given under the By-Laws of the Company, issues as fully paid and
non-assessable 400,000 Class A Voting Preferred Stock to Isabel and Liz
Barrientos (WROS).
1. All 400,000 shares of Class A Voting Preferred Stock issued hereunder
and outstanding shall be deemed Class A Voting Preferred Stock and
shall have ten (10) votes on all matters which require or are submitted
to the shareholders of the Company for their approval and for all votes
of the Company.
2. The Class A Voting Preferred Stock shall be entitled to a cumulative
annual dividend equal to 5% of its stated value ($3.00). The dividend
shall be paid annually at the end of the Company's fiscal year. There
shall be no restriction on the payment of dividends on the Common Stock
in any year in which the dividend on the Class A Voting Preferred Stock
shall not have been paid. In addition the holders of the Class A Voting
Preferred Stock may elect to take the dividend in the form of either
cash or Common Stock based upon a price per share equal to (i) 50% of
the last transaction price which occurred in the month prior to the
dividend declaration or (ii) $1.50 per share.
3. Upon the liquidation of the Company, the Class A Voting Preferred Stock
shall be redeemed for stated value plus accrued and unpaid dividends.
4. Each share of Class A Voting Preferred Stock has the right to cast 10
votes for each share beneficially held, in all matters coming before a
shareholder's meeting.
IN WITNESS HEREOF, I have affixed my name as secretary of the Corporation and
have attached the seal of the corporation to this Resolution.
/s/ Gene Fairchild
Gene Fairchild, Secretary
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EXHIBIT 4.3
LOCKUP AGREEMENT
The undersigned is the record owner of shares of Common Stock, par value $.01
per share (the "Common Stock") and/or of Preferred Stock, par value $.01 per
share (the "Preferred Stock") (collectively the "Shares") of USA SUNRISE
BEVERAGES, INC. (the "Company"). The undersigned has been advised that the
Company intends to effect a registration of the company's shares of issued and
outstanding Shares (the "Registration"). The undersigned further understands
that it is a condition of the successful completion of the Registration that the
undersigned execute and deliver this Lockup Agreement to the Company. The
undersigned hereby agrees that until six (6) months after the effective date of
the Registration, the undersigned will not, without the prior written consent of
the Company or, if required, any federal or state regulatory agency, offer,
pledge, sell, contract to sell, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, any shares of Shares currently owned by the
undersigned (collectively the "Lockup Securities").
The undersigned acknowledges and agrees that the Company will cause the
Company's Transfer agent to place a stop transfer notation on all lockup
securities of the Company registered in the name of the undersigned as of the
date of this agreement.
- ---------------------- --------------------
Signature Date
- ---------------------- -------------------- ----------------
Print name Class Number of Shares
- ---------------------- -------------------- ----------------
Address Class Number of Shares
- -----------------------------------------
City State Zip Code
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EXHIBIT 10.1
AGREEMENT FOR THE
TRANSFER OF TECHNOLOGY
Subscribed between EMBOTELLADORA "LA CASCADA LTDA.", represented by their
general managers Mr. Jose Ezzidin Eid Montano with I.D. # 1479436 - SC and Ms.
Angelina Torchio de Eid with I.D. # 1984600 -SC, with the power of attorney by
affidavit # 305 by and in front of the notary public Mr. Rebeca Mendoza,
hereinafter referred to as "CASCADA" and PAPAYA U.S.A. CORPORATION, represented
by its President Mr. Omar Barrientos Gahona with I.D. #00474716 (South Dakota
USA), also with power of attorney by document form # N/A, in front of Diane K.
Huntley, hereinafter referred to as "USASUNRISE", under the following clauses
and conditions.
FIRST: (CONTRACTING PARTIES)
'CASCADA", being a Partnership of Limited Responsibility dedicated to the
industry of soft-drinks, with legal domicile in the city of La Paz, Bolivia, by
articles of constitution #138 on the 26 day of April, 1978, front of Notary Mr.
Hereto Osigna, with capacity of manufacturing, bottling and distributing of its
different lines of products, amongst them the line of soft-drinks.
"USASUNRISE" a Commercial and Industrial Corporation constituted in the city of
Rapid City, in the, State of South Dakota, United States of America by document
#N/A in front of the Secretary of State of South Dakota Ms. Joyce Hazeltine, and
dedicated to the manufacturing and distributing of non-alcoholic soft-drinks, by
services of Industrial, Commercial and Transport entities under contract to the
good satisfaction of labor.
"USASUNRISE", is formed under as a closely held stock with the name of PAPAYA
U.S.A., and presently pursuing a name change and the placement of stock on the
open market, to allow the generating of resources to upcoming acquisition of
Industrial Entities with ownership characteristics to increment its
manufacturing and distributing capabilities of soft-drinks lines of products,
both owned and franchised. (Product lines of others that have given the license
of manufacturing, bottling and/or distribution).
SECOND: (PURPOSE OF AGREEMENT) .-
Under this Agreement and for being satisfactory to its own interest, "CASCADA"
grants in favor of "USASUNRISE" the rights of manufacturing, bottling and
distributing of its LINE OF SOFT-DRINKS, limited to the restrictions defined
within the following clauses to this document
THIRD: (PRODUCT LINE GRANTED)
Of the Line of Sodas of "CASCADA", by the present agreement, "USASUNRISE" is
authorized to have the knowledge of the formulation, production bottling and
distributing of the following Products:
(a).- Papaya; (b).- Guarana Champagne; (c).- Durazno (peach); (d) Mondiarin
(mandarina); (e). - Pomelo (toronja);(f)- Fresoda (frutilla); (.g). -Naranjada:
(h).- Limon; (I). - Pina and (j).- Lima Limon (Citrus).
These 10 (ten) products conform the scope limit of the present agreement,
however, within the next development of other flavors that may be launched in
the Bolivian market by "CASCADA" ther possibility is open of granting same to
"USASUNRISE", to which other accords shall necessarily be subscribed as a
complement to the presents.
Excluded from this agreement all other lines and/or flavors in the market
presently under the proprietorship
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of "CASCADA".
FOURTH: FORMULATION AND SUPPLY OF INGREDIENTS).
Having been verified by "CASCADA", the availability of industrial installations
by "USASUNRISE" as having the adequate industrial equipment, upon execution of
this agreement are released to "USASUNRISE", the formulas to each of the
products described above in third clause of the present agreement.
Regarding supply of the required basic materials, "CASCADA" shall provide to
"USASUNRISE", the addresses of the different suppliers and shall notify same
that "USASUNRISE" can acquire them directly and without limitations without
prior approval by "CASCADA".
In the event of "CASCADA" having to provide directly some of the basic
materials, those shall be sold at preferential pricing, but in no event
affecting "CASCADA'S" interest.
FIFTH: (EXCLUSIVITY AND AREAS OF INFLUENCE BY "USASUNRISE").-
"CASCADA" accepts and recognizes 'USASUNRISE" as exclusive producer, and
distributors of the products described on third clause of this agreement within
the territory of North America, Central America and the Caribbean, likewise all
of the military installations that United States of America may have in the
World are considered direct areas of influence of "USASUNRISE"', except the ones
located in South America, which shall be supplied by "CASCADA".
Should "USASUNRISE" gain access to other markets not defined on the preceding
paragraph, could access same as long as for each case an express agreement with
"CASCADA" be in place; This authorization shall be extended in function to a
revision and accord of the Royalties for each market area other than the
previously described.
SIXTH: (TECHNICAL ASSISTANCE). - : "CASCADA" shall train the technical
personnel of "USASUNRISE" at its Industrial Installation of Villa Fatima at
La Paz, Bolivia, as long as necessary until emitting a certificate of
capacitation. The cost of this training shall be free, however, "USASUNRISE"
shall be responsible for the cost of transportation, stay and remuneration of
its own personnel during their stay in Bolivia.
Personnel having the certification of "CASCADA" shall be the only one to effect
the preparation of product within the territory of 'USASUNRISE"; should the need
arise for more training of subordinated personnel in other "USASUNRISE" plants,
same may be conducted in the United States. In such event, "USASUNRISE" shall
bear the cost of transportation and stay , plus $US 100.00 per day, per person.
Quality Control. Periodically, not longer than 30 days, "USASUNRISE" shall
provide "CASCADA" samples of product in the market, so this last one may conduct
quality tests. In the certification of quality and/or suggestions by "CASCADA",
"CASCADA" agrees to let "USASUNRISE" know any betterment achieved over the
flavors hereby agreed, without this meaning an imposition of formulation
changes.
SEVENTH: (PRICE AND PAYMENT MODE).-
"USASUNRISE", shall pay "CASCADA", the amount of One Dollar ($US l.00) and other
valuable consideration, which shall be in time defined. The payment is effected
in, cash upon execution of this agreement.
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EIGHTH: (TERM)
It is agreed that the term shall be continuos with revisions every 10 years or
when the parties, by mutual accordance find it pertinent.
NINTH: (PRODUCT PRESENTATION)
(a).- Etiquetas.- The "CASCADA" logo shall be displayed visibly on the label
together with the symbol TM and a legend clarifying that "'CASCADA" is the owner
of the trade marks. Otherwise the product may be marketed under the name SUNRISE
o CASCADA-SUNRISE. The label design shall be done by "USASUNRISE", in accordance
to the preferences of its trade areas; "CASCADA", shall only approve the
location of its logo and the legend of its trademark.
(b).- Containers.- The container to be utilized shall be defined by
"USASUNRISE"; however, the containers over which royalty payments shall be
calculated will be 10 ounces, with ounces corresponding to the American gallon
containing 128 fluid ounces.
(c).- Closures.- Product shall be marketed with printed caps. To the extent of
space allowing, somewhere on the printing shall also be seen the "CASCADA" logo.
NINTH. - (OTHER DEFINITIONS)
(a).- Supply of Ingredients. To the margin of the definition made in clause
fourth above, it is expressly agreed that, "USASUNRISE" may acquire ingredients
with any other supplier it deems necessary, warranting no variation in flavor or
quality by this change of supplier. In the event of existing variations
unacceptable by "CASCADA", "USASUNRISE" shall return immediately to the
authorized suppliers or corresponding penalties will be applied.
(b) Payments.- All payments effected by "USASUNRISE" to "CASCADA", for
ingredients or royalties, shall be made to a bank account specifically designed
by "CASCADA". Payment shall be considered against the reception of a deposit
slip by "CASCADA" and/or against the receipt of bank statement as long as
payment is shown on it. The payment date shall be the one shown on the bank
statement.
(c).- Independent Relationship.- It is expressly understood and agreed, that
this agreement, does not create a relation, fiduciary or economic between the
parties; Exclusively defined is the purchase-sale of a license, without any of
the parties having to respond, or help to respond to the needs financially,
economically, administratively, commercially or productively of the other.
Therefore, nothing in this agreement, shall be judged to create between
"CASCADA" and "USASUNRISE", a relationship of Principal and Agent,
Employer/Employee, Shared Risk (Joint-Venture), Partnership or any other similar
relationship or representative of each other. Each party shall never be
responsible or subject to the debts, acts, obligations or offenses of the other,
whether as Companies or Owners or Employees Representatives.
(d).- Rights of Ownership: All the registered names, such as product names
logos, themes and publicity art, belongs to the party having them registered and
will be simple understood as a support to this agreement, without meaning that
the other party could argue rights partially or totally over registry not
effected by itself or with characteristics prior to this agreement.
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Likewise is established that any translation of language by registry is only one
with the original language of registry, in such manner that there will not be
possibilities of separating of announcements in English and the same in Spanish.
Therefore, the name LA CASCADA, shall always be the exclusive property of
"CASCADA"' and the name SUNRISE, shall always be property of "USASUNRISE" as are
the slogans "Drink of Paradise" (Bebida del Paraiso) and "A South American
Delight" (Una Delicia Sudamericana).
The property and rights of' names and slogans to be created as emerging of' this
contract, can be shared in proportion, defining on each case the factors of the
proportion.
Audit.- "USASUNRISE" shall supply quarterly to "CASCADA", with a printed report
of sales and "CASCADA" shall have the right to audit and verify said report, by
having access to the receipts of warehouse, production of concentrate, shipping,
bottling orders, supplier orders of basic materials and inventories on hand.
TENTH: (RESTRICTIONS AND PENALTIES).- During the life of this agreement,
"USASUNRISE" may not manufacture, bottle or distribute, foreign products to the
United States of America of similar flavors to the ones accorded on clause third
above, that not belong to the trade names of "CASCADA" The use of any other
brand in the flavors accorded will be basis of non-compliance ton this
restriction and will void as whole the agreement, same that shall be governed by
applicable laws, until satisfaction of damages.
Likewise. "USASUNRISE" shall not re-sell, endorse or rent the trade name
"CASCADA", to any person natural or judicial, having or not partnership
relations. Relationship involving products with the trade name "CASCADA",
between "SUNRISE" and other companies or persons shall be limited to aspects of
services of bottling, distributing, marketing promoting and advertising. This
limitation shall not be construed as an impediment to transfer of stock of
investors, as in reality each share of stock in part contains its proportion of
the rights hereby granted; therefore, when certain stock is sold or transferred,
the rights are being transferred to the new holder(s) of same.
In the event of the indication of hostile take over aiming to a change of
management and control of "USASUNRISE", and due that the genesis of the present
agreement is rooted in the mutual trust to Mr. Omar Barrientos, "CASCADA" shall
be previously consulted and may opt unilaterally on the continuity or not of the
rights hereby compromised.
"CASCADA" may not intervene in the relationship that "USASUNRISE" maintains with
other suppliers of franchises and in general with any company that acts
conjunctively in the fabrication, distribution, etc., of other trade marks that
not involucrate similar flavors to the ones hereby accorded.
Without changing the present affidavit, by which the two parties become
independently affiliated, regulations are established in the event that
"USASUNRISE" does not comply with the specific delineations defined for quality
control,. event under which "CASCADA" may ask the certification of an
independent laboratory authorized in the United States of America and this
certification shall be enough to force the application of clause sixth above. If
even so, "USASUNRISE" persists non-complying, the accord as whole shall be void
and "USASUNRISE" blocked of the utilization of the "CASCADA" franchise.
Likewise, if any of the two parties exceeds the scope of the present agreement
regarding the rights of brands and property, areas of market influence and any
other, it shall reimburse to the other party the
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proven expenses that may have caused.
ELEVENTH. (CONTINUITY).- It is established a mutual compromise that neither,
"CASCADA" or "SUNRISE", may have freely available the time hereby compromised,
meaning that, in the next 10 years, starting with and or each of the revisions
as provided on the eight clause above, "USASUNRISE", may not bottle any other
registered trade mark in the flavors hereby accorded, even if the present
agreement is voided. Likewise, "CASCADA" may not grant such products to any
other bottler within the agreed territories (North America, Central America and
the Caribbean), even if the present agreement is voided.
TWELVETH: (CONFORMING AND GOVERNING LAW)
The signatories of this agreement, declare to have the corresponding resolutions
of the Board of Directors authorizing the execution to the present agreement and
that we are executing same upon our free and spontaneous will, without any vice
or impediment.
Hereby, we ascertain that everything described within this document constitutes
the entire agreement, there are no other agreements that weakens the one written
hereby, because each one of us are trusting in the honesty of the other. Reason
why, in the future there may be supplementation and/or elimination of some
clauses to introduce others; said supplementation shall be effective only when
approved, reduced to a written form and executed by both parties.
For effecting arbitrage, we agree to submit this agreement to the governing laws
of the state of South Dakota, which is the state of the United States of America
where "USASUNRISE" has obtained its registry and license of operations.
Now, therefore, we subscribe initially in 2 counterparts in English and 2
counterparts in Spanish (being the four one and the same), all of the same
context and with the same effect of law, additional copies , however may be made
(always one in English and a corresponding one in Spanish) for any ulter
business needed, compromising ourselves to the faithful and strict compliance of
all and each one of its clauses on this 3d day of September 1993.
EMBOTELLADORA "LA CASCADA LTDA."
/s/ Jose Ezzidin Eid Montano /s/ Angelina Torchio de Eid
General Manager Co-General manager
PAPAYA U.S.A. CORPORATION
/s/ Omar Barrientos
President
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VALUABLE - ADDENDUM TO THE AGREEMENT
OF TECHNOLOGY TRANSFER
Subscribed between EMBOTELLADORA "LA CASCADA LTDA.", represented by its general
managers Mr. Jose Ezzidin Eid Montano with I.D. # 1479436-SC and Ms. Angelina
Torchio de Eid with I.D. # 1984600-SC, with the power of attorney by affidavit #
305 by and in front of the notary public Mr. Horacio Osinaga, hereinafter
referred to as "CASCADA" and PAPAYA U.S.A. CORPORATION, represented by its
President Mr. Omar Barrientos Gahona with I.D. #00474716, and with power of
attorney in force by means of a corporate resolution that is part of this
addendum, hereinafter referred to as "USASUNRISE", under the following clauses
and conditions.
FIRST: (PRECEDING).
With the same date as today, "CASCADA" as well "USASUNRISE" have subscribed an
agreement for the transference of technology and formulation of the soft-drinks
line of "CASCADA" in favor of "USASUNRISE", so the last one may manufacture said
product in the territories of the North American Continent, Central America and
the Caribbean.
In said document, on its SEVENTH clause: (PRICE AND PAYMENT MODE), has been
defined that the amount that "USASUNRISE", must pay to "CASCADA" for this
transfer to be $US l.00 (One Dollar), plus other valuable considerations that
will be timely defined.
SECOND: (PURPOSE OF THE ADDENDUM)
Under the present Addendum, it is defined what are the valuable considerations,
that are the ones that in reality establish the real amount of the technology
transfer, hereby is declared also that the present document form an integral
part of the Agreement of Technology Transfer.
THIRD: (REAL VALUE OF THE TRANSFER)
The amount freely agreed without pressure of any kind is that "USASUNRISE" must
pay to "CASCADA" is One Million, One Hundred Forty Four Thousand, Five Hundred
American Dollars ($US 1,144,500.00), as a retribution that justly compensates
the value of the transferred technology.
FOURTH: (MANNER OF PAYMENT).-
"USASUNRISE" has proposed, and "CASCADA" has accepted, that this payment be
effected by the transfer of a block of stock of l52,600 (One Hundred Fifty Two
Thousand, Six Hundred) shares, of the total of the stock issued by PAPAYA U.S.A.
CORPORATION as of July 17, 1993, which as declared by "USASUNRISE" constitutes
5% (Five percent) of the stock issued on said date and also declared by
"USASUNRISE" each share with market value of $7.50. However, according to
"USASUNRISE", the par value of each share is $0.0l (One Cent of a Dollar) per
share. Being the concept of par value, the one given to effect the filing of the
stock with the South Dakota Secretary of State, being such merely a nominal
value. and in no way can the par value be considered as the equivalent that
"USASUNRISE" pays to "CASCADA".
In the event of any problem arising with the verification of the correct number
of shares that represent the number agreed, "USASUNRISE" agrees to come forward
and evict and sanitize the $1,144,500.00 that must pay to "CASCADA", in shares.
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FIFTH: COMMERCIALIZATION OF "CASCADA'S" STOCK
Presently, "USASUNRISE" is pursuing the acquisition and/or merge with other
entities that are operating as public entities, and that in the future may form
one block of stock with the stock of PAPAYA U.S.A.
The block of stock with which "USASUNRISE" pays "CASCADA", are part of the
"privately held" stock of 3,052.000 shares of PAPAYA U.S.A., therefore, after
the merger process of PAPAYA U.S.A. to "USASUNRISE", there will be a certain
lapse of time, during which this stock may not freely trade over the counter in
the United States of America, in compliance to the rules and regulations of the
Securities and Exchange Commission and the Securities Act of 1934 as amended.
This restriction of free trading in the open market is two years, during this
time these stock is known as "Letter stock", after such time, "USASUNRISE"
guarantees that same may freely be traded in the open market, provided that the
company has become public.
Should "CASCADA" wanted to sell its stock within the time considered "letter
stock", (two years), it may do so under the same condition, for which it will
give to "USASUNRISE" the first option of purchase, this option shall be valid
for 90 days (Ninety days), starting with date of notification to "USASUNRISE",
the price under which "USASUNRISE" may exercise the option shall be the price at
which "CASCADA" is receiving them under the present document, ($7.50 per share).
It is agreed that "USASUNRISE", shall respond to "CASCADA", within 15 days;
(fifteen days), following receipt of notification, letting it know if it will
exercise, partially or totally its option.
In the event that "USASUNRISE", opts not to exercise the option or fails to
respond within the 15 days "CASCADA" shall be free to sell its stock to a third
party.
In the event that "CASCADA" wanted to sell its stock totally or partially when
same are free trading, it shall follow the same procedure of the option to
"USASUNRISE" except that the price of stock shall be the average in the open
market of the thirty days prior to notification.
SIXTH: DELIVERY AND ENDORSEMENT OF STOCK
Under this act of subscription to the agreement of valuable consideration,
"USASUNRISE", delivers the block of stock hereby agreed, duly executed with
approval of its Board.
SEVENTH: GOVERNING LAW.-
By virtue of the present act, "CASCADA" becomes a stockholder with all its
rights to "USASUNRISE" and/or PAPAYA U.S.A. with legal domicile in the Sate of
South Dakota, United Sates of America., the present agreement is subject and
governed under the laws of the state of South Dakota.
EIGHT: CONFORMITY-
We, Jose Ezzidin Eid Montano and Angelina Torchio de Eid, and representing
EMBOTELLADORA "LA CASCADA LTDA." and Omar Barrientos, representing of U.S.A.
SUNRISE ENTERPRISES and PAPAYA U.S.A. CORPORATION, declare to have read and
understood the meanings of all and each of the clauses of the present
ADDENDUM-VALUABLE TO THE AGREEMENT OF TECHNOLOGY TRANSFER, expressing our
absolute conformity to same, reason why we execute same as evidence in two
counterparts in English and two counterparts in Spanish (being the four one and
the same), all of the same context and for the same purposes of law on this 30
day of September 1993.
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EMBOTELLADORA "LA CASCADA LTDA."
/s/ Jose Ezzidin Eid Montano /s/ Angelina Torchio de Eid
General Manager Co-General manager
PAPAYA U.S.A. CORPORATION
U.S.A. SUNRISE CORPORATION
/s/ Omar Barrientos
President
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EXHIBIT 10.2
"PURCHASE - SALE CONTRACT
AND FRANCHISE DISTRIBUTION
Subscribed between EMBOTELLADORA "LA CASCADA LTDA.", represented by General
Managers Mr. Jose Ezzidin Eid Montano with I.D. # 1479436 - SC and Ms. Angelina
Torchio de Eid with I.D. # 1984600 -SC, both with power of attorney by affidavit
# 305 by and in front of the notary public Mr. Horacio Osinaga, hereinafter
referred to as "CASCADA" for the first party, and TESORO CORPORATION represented
by its President Mr. Omar Barrientos Gahona with I.D. #00474716 (South Dakota
USA), with power of attorney by document # N/A, by and in front of Diane K.
Huntley, hereinafter referred to as "TESORO" for the second party, under the
following clauses and conditions.
FIRST: (CONTRACTING PARTIES) . -
"CASCADA" is a Industrial Partnership of Limited Responsibility of the Republic
of Bolivia, dedicated to the manufacture And distribution of Soft-Drinks, Fruit
Juices and Viscachani Mineral Water, all with brands, and rights registered on
its name and therefore of its exclusive property.
"TESORO", is Business Corporation of the State of South Dakota in the United
States of America, dedicated, amongst others, to the distribution of all kinds
of soft-drinks with franchise characteristics, with license of the respective
manufacturers.
SECOND: (PURPOSE OF THE CONTRACT) . - Both companies, "CASCADA" and "TESORO" see
the convenience of the commercialization of the Mineral Waters of Viscachani, in
all of the territory of the United States of America, Central America and the
Caribbean, reason why "CASCADA" grants to "TESORO" the Exclusive Commercial
Franchise, to sell THE MINERAL WATER OF VISCACHANI, carbonated, non-carbonated,
with or without flavor, in the territories named above, without this giving
rights of production, bottling, labeling or over-labeling.
THIRD: (PRODUCT DESCRIPTION) . The Mineral Waters of Viscachani, are waters
exploited in the locality of Viscachani of the Aroma Province of the department
of La Paz In the Republic of Bolivia, the water is bottled at the same site of
exploitation, being previously filtered, ozonized and ionized.
The bottling is done with carbonic anhydride, (carbonated) or without (natural).
"CASCADA"' has also developed other products such as "Limon Viscachani"
(carbonated and the " Limon Diet (non-carbonated) which are processed and
bottled at its industrial plants of Villa Fatima and El Alto, in the city of La
Paz.
All of these products, are distributed in plastic containers (PVC and/or HPT)
and in glass in several sizes from a capacity of 296 c.c. up to 2 liters.
FOURTH: (BOUNDARIES OF THE FRANCHISE") . -By the present contract, "TESORO" is
authorized by "CASCADA", to distribute, commercialize and sell without any
restriction all and each one of the products of Viscachani Mineral Water, within
of the territories of North America, Central America and the Caribbean under any
concept shall be bottling or cause to be bottling of products distributed with
the above brands.
"TESORO ", may not distribute any other Mineral Water natural or artificially
mineralized, as long as this. contract remains in force.
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Likewise, it is the absolute responsibility of "TESORO", the no adulteration of
the products, by itself, or by its agents or distributors. Any violation in this
respect, shall cause "TESORO" to recover the product from the market place being
its burden the economic, civil and penal responsibilities that such acts may
generate. If under these circumstances, the good name of Viscachani was
compromised, without immediate solution by the part of "TESORO", "CASCADA" may
conclude the relationship hereby established and demand certain damages that may
incur.
FIFTH: SALE-PURCHASE) . -
By the present contract, it is absolutely established that "CASCADA" will sell
and "TESORO" will buy determined quantities periodically of the granted
products.
Said purchases shall be done by quotation FOB port, that will be valid for a
time no shorter that one year and for quantities agreed previously in writing by
the parties. Each of these accords, shall be considered integral part of the
present contract.
Both parties declare that the present contract does not imply any kind of
relationship as partners, nor employer/employee, shared-risk or casual
partnership. Interpretation shall only be the merely relation of a buyer and a
Seller.
SIXTH: (EXCLUSIVITY) . -
The present contract, grants to 'TESORO", absolute exclusivity of distribution
in the territories hereby agreed upon, being established a minimum annual
quantity of purchases of 600,000 packages in total of the different products of
Viscachani. The first year term, shall be effective starting with the placement
of the second shipping order, with the understanding that the first shipment
will be utilized primarily in the launching of product.
Should "CASCADA" receive information from specialized auditors, informing the
existence of major potential in the market, shall solicit from "TESORO" to
increment the minimum quantities of the annual purchases and depending of the
answer and commercial capacity of "TESORO", the minimum quantity may be
increased, or the exclusive character may be eliminated and/or the magnitude of
the territory may be reduced. All of this shall have contractual validity when
on each instance had been reduced to written form.
SEVENTH: (OTHER CONSIDERATIONS) . -
(a).- Costs. - The costs of interning, distribution, promotion, advertising,
local, state and governmental taxes, etc., etc., that arise within the territory
defined as property of "TESORO", shall be of the exclusive responsibility of
"TESORO". Under no circumstances shall they be shared with or transferred to
"CASCADA",
(b).-Prices.-
In the same manner, the final price to the consumer, to the point of sale,
commission to retailers, etc., etc., shall be defined by 'TESORO". "CASCADA"
shall not be able to limit same (except suggestion, ) or restrict the activities
of "'TESORO".
(c).- Result. - Having been defined the conditions, the results of the
commercialization and distribution of
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the Viscachani products within the territories agreed upon with "TESORO",
whether, there are profits or loses, such will be to the benefit or loss of
"TESORO".
(d). - Support. -
However, "CASCADA" hereby agrees to facilitate, without expense to "TESORO", all
of the advertising materials that are available for the Bolivian market, amongst
which are considered: TV spots, Samples of Posters, infomercials regarding the
benefits of the Vicachani Water, to utilize them as a guide and for "TESORO" to
incorporate same on its own diffusion activities.
(e).- Certification and Analysis.- Is "CASADA'S" exclusive responsibility, to
provide in order, all of the documentation of exportation and the quality
certificates that may be required in the territory agreed upon with "TESORO",
which shall timely inform to "CASCADA"., of the different kinds of required
certificates, so such may be incorporated to the export documentation.
(f).- Package description. - A package is defined as the commercial unit
containing 12 bottles of 1/2 (half) liter, or hie commercial unit containing 6
bottles of 1 1/2 (One and Half) liter.
(g).- Validity.- This contract is granted with a validity of 10 (ten) years
starting with the date of its execution, which may be renewed by mutual accord
of the parties.
EIGHTH: (MODE OF PAYMENT) . - For each order, the payment mode shall be by the
aperture of Letters of Credit confirmed and irrevocable payable against the
presentation of the shipping documents, apertured on a major bank.
Exceptionally, and depending of the quantities ordered, there may be other
payment modes, without such constituting a habit. In any event, each time that
"TESORO", requests a different form of payment, such request shall be analyzed
by "CASCADA" and shall have validity only once.
NINTH: CONFORMITY AND GOVERNING LAW . -
We, Jose Ezzidin Eid Montano and Ms. Angelina Torchio de Eid representing
EMBOTELLADORA "LA CASCADA LTDA," and Omar Barrientos Gahona, representing TESORO
CORPORATION, declare having read and understood all and each one of the clauses
of the present contract expressing our absolute agreement with its contents,
agreeing to resolve any divergence under the norms of the laws of the Republic
of Bolivia, as proof we execute in 2 (two) counterparts of the same context and
to the same effects of law on this the 30 day of Sep. 1993.
Translation, Not valid without original is Spanish.
ACCEPTED ONLY AS ACCURATE TRANSLATION. WITHOUT THE LEGAL VALIDITY OF THE
ORIGINAL CONTRACT IN SPANISH. A COPY OF WHICH SHALL ALWAYS BE ATTACHED HERETO.
ACEPTADO SOLAMENTE COMO UNA TRADUCCION FIEL. NO TIENE LA VALDIEZ LEGAL DEL
CONTRATO ORIGINAL ESPANOL UNA COPIA DEL CUAL DEBERA SER ACOMPANADA.
EMBOTELLADORA "LA CASCADA LTDA,"
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/s/ Jose Ezzidin Eid Montano /s/ Angelina Torchio de Eid
General Manager Co-General Manager
TESORO CORPORATION
/s/ Omar Barrientos
President
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EXHIBIT 10.3
"PURCHASE - SALE
AND FRANCHISE DISTRIBUTION
Granted to U.S.A. SUNRISE BEVERAGES, INC., hereinafter referred to as "Sunrise"
by Tesoro Corporation, a South Dakota corporation hereinafter referred to as
"Tesoro", under the following clauses and conditions.
FIRST: ( PARTIES) . -
"TESORO", is a Business Corporation of the State of South Dakota, with license
of the respective manufacturers.
U.S.A. Sunrise Beverages, Inc. , is a Business Corporation of the State of
South Dakota with marketing rights and distribution systems.
SECOND: (PURPOSE OF THIS DISTRIBUTION GRANTING) . - Both companies, "TESORO" and
"SUNRISE" see the convenience of the commercialization of the Mineral Waters of
Viscachani, reason why "Tesoro" grants to "Sunrise", a Commercial Franchise, to
sell THE MINERAL WATER OF VISCACHANI, carbonated, non-carbonated, with or
without flavor, in the territories named above, without this giving rights of
production, bottling, labeling or over-labeling.
THIRD: (PRODUCT DESCRIPTION) . The Mineral Waters of Viscachani, are waters
exploited in the locality of Viscachani of the Aroma Province of the department
of La Paz In the Republic of Bolivia, the water is bottled at the same site of
exploitation, being previously filtered, ozonized and ionized.
The bottling is done with carbonic anhydride, (carbonated) or without (natural).
"Tesoro"' other products such as "Limon Viscachani" (carbonated and the " Limon
Diet (non-carbonated) which are processed and bottled at its industrial plants
of Villa Fatima and El Alto, in the city of La Paz.
All of these products, are distributed in plastic containers (PVC and/or HPT)
and in glass in several sizes from a capacity of 296 c.c. up to 2 liters.
FOURTH: (BOUNDARIES OF THE FRANCHISE") . -By the present contract, "SUNRISE"
is authorized by "TESORO", to distribute, commercialize and sell without any
restriction all and each one of the products of Viscachani Mineral Water, within
of the territories where Tesoro has available distributors.
It is the absolute responsibility of "SUNRISE", the no adulteration of the
products, by itself, or by its agents or distributors. Any violation in this
respect, shall cause "SUNRISE" to recover the product from the market place
being its burden the economic, civil and penal responsibilities that such acts
may generate. If under these circumstances, the good name of Viscachani was
compromised, without immediate solution by the part of " SUNRISE ", "TESORO" may
conclude the relationship hereby established and demand certain damages that may
incur.
FIFTH: SALE-PURCHASE) . -
By this GRANTING, it is absolutely established that "TESORO" will sell and
"SUNRISE" will buy determined quantities periodically of the granted products.
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Said purchases shall be done by quotation FOB port, that will be valid for a
time no shorter that one year and for quantities agreed previously in writing by
the parties. Each of these accords, shall be considered integral part of the
present contract.
Both parties declare that this granting does not imply any kind of relationship
as partners, nor employer/employee, shared-risk or casual partnership.
Interpretation shall only be the merely relation of a buyer and a seller.
SIXTH: (AREA-SALES) . -
The present grants to `SUNRISE ", absolute exclusivity of distribution in the
territories named above, being established a minimum annual quantity of
purchases of 600,000 packages in total of the different products of Viscachani.
The first year term, shall be effective starting with the placement of the
second shipping order, with the understanding that the first shipment will be
utilized primarily in the launching of product.
SEVENTH: (OTHER, CONSIDERATIONS) . -
(a).- Costs. - The costs of interning, distribution, promotion, advertising,.
local, state and governmental taxes, etc., etc., that arise within the territory
defined as property of "SUNRISE", shall be of the exclusive responsibility of
"SUNRISE". Under no circumstances shall they be shared with or transferred to
"TESORO"
(b).-Prices.-
In the same manner, the final price to the consumer, to the point of sale,
commission to retailers, etc., etc., shall be defined by "SUNRISE". "CASCADA"
shall not be able to limit same (except suggestions) or restrict the activities
of " SUNRISE ".
(c).- Results. -
Having been defined the conditions, the results of the commercialization and
distribution of the Viscachani products within the territories agreed upon with
" SUNRISE ", whether, there are profits or loses, such will be to the benefit or
loss of "SUNRISE ".
(d). - Support. -
"TESORO" hereby agrees to facilitate, without expense to "SUNRISE ", all of the
advertising materials that are available for the Bolivian market, amongst which
are considered: TV spots, Samples of Posters, infomercials regarding the
benefits of the Vicachani Water, to utilize them as a guide and for "SUNRISE" to
incorporate same on its own diffusion activities.
(e).- Certification and Analysis.- It is "TESORO'S" exclusive responsibility, to
provide in order, all of the documentation of exportation and the quality
certificates that may be required in the territory granted to "SUNRISE".
(f).- Package description. -
A package is defined as the commercial unit containing 12 bottles of 1/2 (half)
liter, or the commercial unit containing 6 bottles of 1 1/2 (One and Half)
liter.
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(g).- Validity.- This contract is granted with a validity of 10 (ten) years
starting with the date of its execution, , or for as long as Tesoro's
relationship with Viscachani product lasts. This granting shall be renewed by
mutual accord of the parties. Tesoro shall have the right to replace product
with similar or equal brand or procedence.
EIGHTH: (MODE OF PAYMENT) . - For each order, the payment mode shall be by the
aperture of Letters of Credit confirmed and irrevocable payable against the
presentation of the shipping documents, apertured on a major bank.
Exceptionally, and depending of the quantities ordered, there may be other
payment modes, without such constituting a habit. In any event, each time that
"SUNRISE", requests a different form of payment, such request shall be analyzed
by "TESORO" and shall have validity only once.
NINTH: CONFORMITY AND GOVERNING LAW . -
This granting shall be governed by the laws of the state of South Dakota.
Granted on this the 1st day of October, 1993
TESORO CORPORATION
/s/ Omar Barrientos
President
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EXHIBIT 10.4
CONTRACT
This Agreement is made and entered into this 22nd day of October, 1995,
between Paul M. Miller Senior Trust, with domicile at ____________ hereinafter
referred to as Paul Miller and Tesoro Corporation with address at P.O. BOX 8389,
Rapid City, SD 57709-8389, hereinafter referred to as Tesoro.
Whereas Paul Miller is the owner of a certain water source, located at
I-90, exit 2, south (1/4 of a mile), with permits of commercial use, and whereas
Paul Miller wishes to sell [hand- written and initialed in margin "drinking only
drinking quality"] water in bulk to Tesoro, and
Whereas, Tesoro wishes to buy spring water, from the source, from Paul
Miller.
Now, therefore, for One dollar ($l.00), receipt of which is hereby
acknowledged by Paul Miller, and other valuable consideration, it is mutually
agreed as follows:
1. Buyer/Seller. Tesoro shall buy the water and Paul Miller shall sell the
water at a mutually agreed price in accordance with confidential
exhibit "A", which forms an integral part to this contract and which is
attached by reference hereto.
2. Exclusive Nature. Paul Miller agrees that the sale of water to Tesoro
is of the exclusive nature until the first 23 million gallons of water
annually have been maximized. This maximization clause starts over
automatically at each anniversary contract date. Before maximization,
Paul Miller may sell any surplus water not used by Tesoro to third
parties, with the understanding that Tesoro demands for water will
always take precedence as to the first twenty three million gallons of
water.
2.1 Tesoro agrees that the exclusive nature also applies to the purchase of
water exclusively from Paul Miller until the first 23 million gallons
of water annually have been maximized. This maximization clause starts
over automatically at each anniversary contract date. Before
maximization, Tesoro agrees not to purchase water from any other
source, but Paul Miller.
2.2 As Paul Miller's water rights are gradually authorized to increase on
the amount of water it can use commercially, the maximization clauses
referred to on clauses 2. and 2.1. may be increased by common
accordance, provided that both parties agree to such increase in
writing. In such an event, clauses of this contract shall apply to such
additional agreement.
2.3 Tesoro must, by the fifth anniversary date of this agreement, be buying
from Paul Miller, more than one million gallons of water per year,
failure by Tesoro to reach and keep this quantity shall cause clauses
2., and 2.1, and 2.2 of this contract to be no longer applicable. The
remainder of this contract shall be unaffected.
2.4 Permits. Paul Miller shall, upon execution of this agreement provide
Tesoro with copies of water permits, tests done to water with an
analysis of any contents, including mineral contents and deposits on
water and survey maps and water formations and information on files.
3. Water sold to Tesoro shall pass requirements imposed by governing
authorities, including FDA and Health Department rules.
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3.1 Should the water at any time, found to be contaminated or unfit for
consumption, by tests effected by Tesoro, or a governing authority,
then Paul Miller shall be notified and required to cure such
contamination or problem within thirty days of notification. Failure of
Paul Miler to cure any contamination or problem shall not be grounds
for termination of this contract, such termination under such failure
may be made only at the election of Tesoro.
3.2 During any periods of water contaminations, or water being unavailable
for any reason, including reasons beyond the control of Paul Miller,
Tesoro shall have the right, without breach of contract to acquire
water from any source it deems necessary for the continuance of its
operation.
3.4 Paul Miller shall install, as soon as feasible, but not later than
three months (excepting periods of frozen ground) after commencement of
bottling by Tesoro or its affiliates, an underground pipe system to
reach within 125 inside Tesoro's bottling plant property line [hand-
written and initialed in margin "my property line"].
4. Ownership. Each party is the owner of the product (water) until it
changes hands. The use and application of the purchased water is right
of the exclusive ownership of Tesoro, for any configuration or
commercial or noncommercial use or development. The name, brand or
claims used by Tesoro or its affiliates for the purchased water are the
exclusive property of Tesoro, including any divisibilities applied to
water purchased from alternative suppliers or used from Tesoro's own
sources. Paul Miller shall not claim rights of any kind to benefits of
brand or product development, the only role of Paul Miller being of the
nature of a water supplier to Tesoro. This clause shall survive forever
this contract.
5. Agency. Nothing contained in this agreement shall be construed or
interpreted to create an agency relationship, a partnership, joint
venture, employee-employer relationship or similar between Tesoro and
Paul Miller, other than the relationship of buyer/seller-
supplier/purchaser contemplated under this agreement.
6 Commencement - Term - Continuity. Tesoro or its affiliates shall start
purchasing water from Paul Miller within a year from execution of this
agreement, failure to meet this requirement shall be grounds for
termination of this contract.
6.1 This being an agreement on the best efforts basis of product
development on the part of Tesoro, with considerable amounts spent on
pre-development, installations and research, then, the term of this
agreement shall, and is considered of continuous nature for 20 (twenty)
years, with automatic yearly renewals with the proviso of adherence to
the terms and conditions of this agreement.
6.2 At the end of twenty years renewal must be negotiated by mutual
accordance on a Meeting of the Minds. Death of any of the executors of
this agreements shall not constitute a default or termination.
7. Sales/Rights. In the case of an attempted sale or sale of Paul Miller's
property (or it's successor), or that part controlling the water
rights, Paul Miller or it's successor shall give Tesoro or its
successor a notice on land and water rights for Tesoro to compete or
bid at its option on the purchase from Paul Miller of the land and or
the water rights. In any event this contract and its provisions shall
transfer along with any sale, change of ownership or controlling
interest of the property and/or its water rights.
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8. Transfers/Obligations. Notwithstanding anything to the contrary, and
applying clause 7. above, in the event of a sale, transfer, takeover,
or any other legal transaction of both parties of this agreement, this
contract, its exhibits or addendum's clauses shall apply and be binding
to all new parties involved. Failure of any of the parties of this
agreement, to notify or provide each other proof of compliance thereof,
and to notify, disclose and make any new parties to be bound by all the
certain conditions contained herein and as described on clauses 7. and
8. of this contract shall not excuse the conditions and terms of this
agreement and shall be binding to all previous parties.
9. Time. Time is of the essence of this agreement.
10. Inuring. This agreement shall inure to the benefit of the parties
hereto, their heirs, successors and assigns.
11. Entire Agreement. The parties hereto agree that this document
constitutes the entire agreement, and any changes, additions or
modifications shall be only valid when approved mutually and reduced to
a written form and executed by both parties.
12. Governing Law. This contract shall be governed by the laws of the
state of South Dakota.
13. Paragraphs. The titles and captions contained herein are inserted for
convenience only, and do not constitute a part or alter a part or
meaning of this agreement. If any provision or combination contained in
this agreement should be lawfully declared to be illegal or
unenforceable, that provision or combination shall be inoperative and
divisible from this agreement and shall not impair or have any effects
upon the remaining parts, terms and conditions of this agreement.
14. Waiver. The waiver of any provision of this agreement, by either party,
written shall not be deemed a continuing waiver or waivers of any
provision of this agreement by either party. Waivers must be in
writing.
15. Notices. All notices shall be valid when delivered by a certified
server or when deposited in the United States mail, certified mail,
postage pre-paid return receipt requested to the last known address of
the parties.
AGREED AND ACCEPTED ON THE DATE FIRST WRITTEN ABOVE, THE PARTIES TO THIS
AGREEMENT EXECUTE SAME IN TWO COUNTERPARTS (BEING THE TWO ONE AND THE SAME) FOR
THE PURPOSES HEREIN CONTAINED BINDING EACH OTHER PERFORMANCE THEREIN.
BY: /s/ PAUL MILLER
TESORO CORPORATION
BY: /s/ OMAR BARRIENTOS
contract, page # 3
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CONFIDENTIAL
EXHIBIT "A"
This document constitutes Exhibit "A" to a certain contract between Paul
M. Miller Senior Trust (referred to as Paul Miller), and Tesoro Corporation
(referred to as Tesoro).
The purpose of this exhibit "A" is to set the price per unit of water
sold by Paul Miller to Tesoro under the above mentioned contract. The unit of
water is the equivalent of One US Gallon of 128 fluid ounces.
It is agreed therefore, that the price per unit that Paul Miller shall
charge Tesoro, and the price per unit Tesoro shall pay Paul Miller, is hereby
established at Five cents of a dollar (0.05c) per unit. The basis of the pricing
has been determined in common accordance of the parties hereto and in reliance
to prices believed to be within industry standards for similar water available
in other regions as advertised in national industry publications such as
Beverage World and Beverage Industry, copy samples of advertised water sources
and prices are attached by convenience and reference herein with the
initialization of the parties thereto.
It is also agreed that the unit shall be calculated as follows: Payment
shall be the higher of quantity gallons or cased gallons.
A meter shall be installed at both ends of pipeline. These meters shall
read the gallons flowing for delivery to Tesoro. In addition a count of
production of water filled cases shall be maintained and open for inspection,
the gallonage per case calculated and added to the average of the two meters,
and then the total sum shall be divided by two, from this result a two percent
loss shall be deducted. The below example clarifies this formula:
Meter One reading (at beginning of pipe): ....... 10,730 Gallons
Meter Two reading (at end of pipe)......... 10,580 Gallons
Total added reading ............................. 21,310 Gallons
Average gallons(divided by 2) ................... 10,655 Gallons
2,200 cases of 1.1/2 Liters (4.75 Gls. each): ... 10,450 Gallons
Average gallons plus cased gallons.: ............ 21,105 Gallons
Divided by two............... 10,552.50 Gallons
Minus two percent loss .......................... 211.50 Gallons
Quantity gallons ................................ 10,341 Gallons
Quantity paid to Paul Miller
(higher of cases or quantity gallons) ....... 10,450 Gallons Times 0.05=$522.50
The price per unit may have a revision by common accordance and agreement every
fifth anniversary date. The price revision shall use as a guideline an average
price of spring water at the source as provided by advertised water available on
national publications such as Beverage Industry or Beverage World, in the event
of no mutual agreement reached, then an independent consulting firm chosen
mutually shall be hired to find the average, the cost of the consulting firm
shall be equally shared.
In any event, with revisions or not,. the basic price of water shall never be
less than 0.05c per unit and any revision shall never at each revision have an
increase in excess of first agreed price per unit.
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Tesoro shall pay purchase water on the following terms:
Net 30 days from billing date or as
otherwise agreed in writing.
Unless agreed to extensions in writing, a past due bill in excess of 90 days of
water purchase under the contract to which this exhibit is attached, shall be
grounds for breach of said contract.
This exhibit and contract to which is attached were prepared by Tesoro and
revised by Paul Miller to both parties satisfaction and agreement.
AGREED AND ACCEPTED ON THE ABOVE TERMS AND CONDITIONS ON THIS THE 22nd
DAY OF OCTOBER, 1995.
BY: /s/ Paul Miller
TESORO CORPORATION
BY: /s/ Omar Barrientos
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EXHIBIT 10.5
ADDENDUM TO EXHIBIT "'A"
This Addendum to Exhibit "A" is made and entered into this 10th day of
January, 1997, between Paul M. Miller Senior Trust, hereinafter referred
to as Paul Miller and Tesoro Corporation, hereinafter referred to as
Tesoro.
The purpose of this Addendum to Exhibit "A" is to modify Exhibit "A" that
sets up the price per unit of water sold by Paul Miller to Tesoro under
certain Contract between the parties entered and executed on October 22,
1995, regarding selling and buying water, a copy of said contract is
attached by reference hereto and constitutes a integral part to this
Addendum.
The following change to the Exhibit "A" dated October 22, 1995 shall be
effective as to the date of this Addendum:
Exhibit "A":
The agreed price per unit of water under the contract (unit being One US
Gallon) shall change from five cents of a dollar (0.05c), to Seven cents
of a dollar (0.07c).
This Addendum to Exhibit "A" between the parties executed on October 22,
1995 is hereby agreed and accepted on the above terms and conditions as
to the date first written above.
By Paul M. Miller Senior Trust By Tesoro Corporation
/s/ Paul Miller /s/ Omar Barrientos, President
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ADDENDUM TO CONTRACT
This Addendum to contract is made and entered into this Jan, day of
10th between Paul M. Miller Senior Trust hereinafter referred to as Paul Miller
and Tesoro Corporation, hereinafter referred to as Tesoro.
The purpose of this Addendum is to modify and clarify certain contract between
the parties entered and executed on October 22, 1995, regarding selling and
buying water, a copy of said contract is attached by reference hereto and
constitutes a integral part to this Addendum
The following changes or modification to the contract dated October 22, 1995
shall he effective as to the date of this Addendum:
Contract:
Paragraph 3.1 is hereby deleted from contract
Paragraph 3.4 shall now read: Paul Miller shall install. as soon as feasible.
but not later than three months (excepting periods of frozen ground) after
commencement of installation of bottling equipment by Tesoro or its affiliates,
an underground pipe system to reach Paul Miller's inside property line closet's
to Tesoro's property line.
Paragraph 14, shall now read: Waiver. The waiver of any provision of this
agreement, by either party, written or not, shall not be deemed a continuing
waiver or waiver of any provision of this agreement by either party.
Waivers must be in writing.
This Addendum to the contract between the parties executed on October 22, 1995
is hereby agreed and accepted on the above terms and conditions as to the date
first written above.
By Paul M. Miller Senior Trust By Tesoro Corporation
/s/ Paul Miller /s/ Omar Barrientos, President
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EXHIBIT 10.6
QUIT CLAIM DEED AND RELEASE
U.S.A. SUNRISE BEVERAGES, INC.,
a South Dakota corporation,
and
OMAR BARRIENTOS,
a married man,
grantors, of Lawrence County, State of South Dakota, for and in consideration of
One Dollar ($1.00) and other good and valuable consideration, conveys and quit
claims to
DAKOTA MINING & CONSTRUCTION, INC.
a South Dakota corporation,
grantee, of P.O. Box 100, Spearfish, South Dakota 57783, all interest, including
after-acquired title, in the following described real estate in the County of
Lawrence in the State of South Dakota:
Tract A-1, being the N1/2 of Tract A of Reebe Ranch Estates
located in the NW 1/4 of Section 28, T7N R1E, Lawrence County,
South Dakota, according to Plat Document #94-5871.
GRANTORS FURTHER UNCONDITIONALLY RELEASE GRANTEE AND WILLIAM H. TRENT FROM ANY
AND ALL LIABILITIES AS A RESULT OF THE TRANSACTIONS BETWEEN THE PARTIES.
Dated this 18th day of August, 1998.
U.S.A. SUNRISE BEVERAGES, INC.
By: /s/ Omar Barrientos
Omar Barrientos
Its President
/s/ Omar Barrientos
STATE OF SOUTH DAKOTA
SS:
COUNTY OF LAWRENCE
On this the 18th day of August, 1998, before me, the
undersigned officer, personally appeared Omar Barrientos, who acknowledged
himself to be the president of U.S.A. Sunrise Beverages Inc., a corporation, and
that he, as such president, being authorized to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself as president.
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IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Cindy Herman
Notary Public
STATE OF SOUTH DAKOTA
ss.
COUNTY OF LAWRENCE
On this, the 18th day of August, 1998, before me, the
undersigned officer personally appeared Omar Barrientos, known to me or
satisfactorily proven to be the person subscribed to in the within instrument
and acknowledged that he executed the same for the purposes therein contained
and as his own free act and deed.
IN WITNESS WHEREOF, I hereunto set my hand and official Seal.
Cindy Herman
Notary Public
This document was prepared by:
Harlan A. Schmidt
Attorney at Law
P.O. Box 1048
Spearfish, South Dakota 57783
605-642-2622
I hereby acknowledge receipt of delivery in good order to my satisfaction, or
property buildings and contents as described on a certain contract for deed and
its exhibits between Dakota Mining and Construction, Inc., and U.S.A. Sunrise
Beverages, Inc., dated February 1st, 1995 incorporated by reference herein,
together with keys of access to buildings and offices from Omar Barrientos,
President of U.S.A. Sunrise Beverages, Inc.
Signed on this date August 18, 1998
By: By:
Dakota Mining & Construction, Inc. U.S.A. Sunrise Beverages, Inc.
William H. Trent Omar Barrientos
President President
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EXHIBIT 10.7
PAUL MILLER SR. TRUST
PAUL MILLER, TRUSTEE
867 MAIN STREET
DEADWOOD, SD 57732
JULY 13, 1998
TO: TESORO CORPORATION
C/O OMAR BARRIENTOS
P.O. BOX 938
SPEARFISH, SD 57783
USA SUN RISE
C/O OMAR BARRIENTOS
P.O. BOX 938
SPEARFISH, SD 57783
Gentlemen:
This letter is to memorialize my intent concerning the sale of water,
the hauling of that water, the leasing of equipment for bottling and
miscellaneous procedures and the leasing of a building for the water bottling
plant. A formal water sales agreement, hauling contract, equipment lease and
building lease will be entered into when USA Sun Rise and Tesoro possess the
necessary capitalization and income projections to comply with the basics of our
agreement as expressed in this letter. The parties recognize that a more formal
agreement will be entered into setting forth in greater detail typical and usual
business agreements. We all acknowledge that we are sophisticated business
people and understand that this letter of intent is to express the basics of our
business arrangements.
SALE OF WATER: The Paul Miller Sr. Trust will sell water to Tesoro for
the sum of $0.7 per gallon. USA Sun Rise will guarantee the payment or $0.7 per
gallon. Tesoro will purchase water exclusively from Miller up to 23 million
gallons annually. The parties have tested the water and determined that the
water is fit for the uses intended by USA Sun Rise and Tesoro.
HAULING CONTRACT: The Trust will deliver to USA Sun Rise the water
sold to Tesoro for $0.3 a gallon. Tesoro will be responsible for paying the
$0.3 per gallon and USA Sun Rise shall guarantee the payment. This
agreement may be terminated by the Trust upon 90 days notice.
EQUIPMENT LEASE: The Trust will lease to USA Sun Rise a bottling unit, tanks and
miscellaneous equipment having a maximum value of $150,000.00. USA Sun Rise will
maintain, repair or replace the equipment during the term of the lease at their
cost. USA Sun Rise will have an option to purchase all the equipment or the
replacement equipment for $75,000.00 in the tax year after the 84th month. The
rental fee will be as follows.
1 - 3 months $3,000.00 per month
4 - 6 months $4,000.00 per month
7 - 9 months $5,000.00 per month
10 - 12 months $5,000.00 per month
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13 to 36 months $7,250.00 per month
37 - 84 month $6,250.00 per month
During the 84th month, USA Sun Rise may renew this lease from year to year for
the sum of $25,000.00 per year payable in 12 equal annual installments.
BUILDING LEASE: USA Sun Rise will lease the building located in
Spearfish, South Dakota, from the Trust. USA Sun Rise will be leasing the
building and property "AS IS"'. Any improvements required by USA Sun Rise's
business shall be paid for completely by USA Sun Rise. All leasehold
improvements attached to foundation(s) or the structure(s) located thereon
affixed to the ground or the structures (not movables) shall, at the end of the
lease, becomes the sole property of the Paul Miller Sr. Trust. If the Trust
receives, during the term of the lease, a bona fide offer to purchase that the
Trust will accept, the Trust is obligated to submit the bona fide offer to USA
Sun Rise and USA Sun Rise shall have ninety (90) days in which to meet the terms
of the bona fide offer. If USA Sun Rise shall not do so, then Paul Miller may,
at his sole option, sell to the bona fide purchaser. USA Sun Rise will agree to
pay as and for lease payments as follows:
1st year through the 3rd year $1,417.00 per month
4th year through the 5th year $1,487.00 per month
7th year through the 9th year $1,562.00 per month
10th year $1,640.00 per month
AGREEMENTS GLOBAL IN NATURE: The Sale of Water Agreement, the equipment
Lease Agreement and the Building Lease are global in nature. If Tesoro or USA
Sun Rise shall default or breach any of these agreements, then such breach shall
be a breach of all of the agreements.
USA Sun Rise or Tesoro will have a fifteen (15) day grace period during
the term of these agreements to make the payments set forth. If payment is not
received by the Trust on the due date or within the 15 day grace period, then
the agreement and all other agreements will terminate immediately and USA Sun
Rise and Tesoro will peacefully surrender possession of the property and
premises. As to all other terms and conditions in the agreements, Paul Miller
will give 15 days notice of delinquency and USA Sun Rise or Tesoro will have 15
days in which to correct the breach or delinquency.
No additional buy-outs or options will be available to USA Sun Rise or
Tesoro except for those expressly set forth above. There will be no buy out of
the equipment lease or the building lease.
If you agree that this letter sets forth the basic agreements between
the parties, please affix your signature. By my signature, I so agree.
Sincerely yours,
PAUL M. MILLER SR. TRUST
By: /s/ Paul M. Miller, Trustee
Paul M. Miller, Sr. , Trustee
ACCEPTED AND AGREED to this 14th day of July 1998
TESORO CORPORATION
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By: /s/ Omar Barrientos
Its President
ATTEST
Secretary
ACCEPTED AND AGREED to this 14th day of July 1998
USA SUN RISE
By: /s/ Omar Barrientos
Its President
ATTEST
Secretary
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EXHIBIT 10.8
LOAN AGREEMENT
Between U.S.A. Sunrise Beverages, Inc., and Omar Barrientos as an individual.
U.S.A. Sunrise hereby agrees to accept from time to time monetary advances from
Omar Barrientos, which shall be considered bonafide loans and not investment in
company. It is understood that the loans will not constitute a dilution to the
basis of shares of the company.
U.S.A. Sunrise Beverages, Inc., may from time to time disburse repayments to
Omar Barrientos, any and all repayments shall be applied to principal arid
interest calculated to the dates of periodic repayments or end of period. If the
company is issuing payroll payments such shall not count as repayment of
advances.
The interest rate shall be simple interest at the rate of 7% A.P.R. computed at
360 days and calculated by the number of days between receipts of repayment and
last principal amount.
It is understood that the loans are unsecured, unless a provision in writing is
effected to any particular transaction. The balance of the loan agreement shall
be calculated in full at the end of each calendar year and a Note for such
balance (if any) shall be given from the company to Omar Barrientos with a due
date not to exceed one year.
It is understood that the loan balance amounts and interest rates, due dates,
etc. shall he disclosed on all financial statements of the company as an ongoing
liability, further it is understood that the company will disclose such
liability (if any) on all of its disclosures for the purpose of registrations
for any offerings and for the purpose of independent auditing by Certified
Public Accountants. For the purpose of any balances, the results of balance
figures resulting from such independent audits will prevail over any other
records maintained by the company or by Omar Barrientos.
It is understood that this agreement constitutes an arms length transaction
between the parties. The position of Omar Barrientos as president of the company
being incidental and not permanent as the company is pursuing to become a public
entity and Omar Barrientos personally is not a majority shareholder and may be
replaced as president upon vote.
Time is of the essence of this agreement.
This agreement does not constitute a line of credit and the company shall keep
Omar Barrientos harmless and free of any consequential liabilities or damages of
any kind arising in the event of Omar Barrientos being unable to make any
advances upon request or Omar Barrientos requesting repayments from time to
time.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals.
U.S.A. Sunrise Beverages, Inc. Omar Barrientos
By: /s/ Omar Barrientos By: /s/ Omar Barrientos
as its president Omar Barrientos, as individual
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STATE OF SOUTH DAKOTA }
} SS
County of Pennington }
On this the 1st day of January, 1994, before me, the undersigned officer,
personally appeared Omar Barrientos, known to me or satisfactorily proven to be
the person whose name is subscribed to the within instrument and acknowledged
that he executed the same for the purposes therein contained.
In witness whereof I hereunto set my hand and official seal.
/s/ Diane K. Huntley
Notary Public
My commission expires 12/18/03
STATE OF SOUTH DAKOTA }
} SS
County of Pennington }
On this the 1st day of January, 1994, before me, the undersigned officer,
personally appeared Omar Barrientos, who acknowledged himself to be the
president of U.S.A. Sunrise Beverages, Inc., a corporation, and that he
personally and as such president, being authorized to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation as president .
In witness whereof I hereunto set my hand and official seal.
/s/ Diane K. Huntley
Notary Public
My commission expires 12/18/03
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NOTE
$50,967.00 DUE DATE December 31,1995
For valuable monetary advances as loans, received from Omar Barrientos,
during 1994, U.S.A. Sunrise Beverages, Inc. promises to pay to Omar Barrientos,
the sum of $50,967.00, plus accrued simple interest at the rate of 7% per annum
from December 31, 1994. The Principal and Interest accrued shall be reduced by
any amounts received by Omar Barrientos from the company from the date herein,
except for payroll disbursements to Omar Barrientos.
Any other form of payment must be agreed upon in writing. No
collateral is hereby granted.
This Document may not be re-negotiated by the Maker, except to comply
with the terms above. The Maker hereof waive presentment for payment, protest,
notice of non-payment and notice of protest.
Executed in Rapid City, South Dakota, this 31st day of Dec. 1994.
Maker:
U.S.A. SUNRISE BEVERAGES, INC.
By: /s/ Omar Barrientos
President
Witnessed:
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Calendar Year 1995
NOTE 2
$47,914.40 Due On or Before: December 31, 1996
For valuable monetary advances as loans, received from Omar Barrientos, started
1994, and continuing through 1995, to date. U.S.A. Sunrise Beverages, Inc.
(Maker), promises to pay to Omar Barrientos, as individual, the sum of
$47,914.40, plus accrued simple interest at the rate of 7% per annum from
December 31, 1995. This amount being the outstanding balance as to date of a
certain Loan Agreement entered between the parties on January 1,1994, a copy of
which is incorporated by reference hereto. This Note is governed by the terms of
said agreement and its addendum's thereto. The Principal and Interest accrued
shall be reduced by any amounts received by Omar Barrientos from the company
from the date herein, except for payroll disbursements to Omar Barrientos.
At his option Omar Barrientos may accept partial or total payment in negotiated
stock.
This Document may be negotiated, altered or changed by the parties in writing
only. The Maker hereof waive presentment for payment, protest, notice of
nonpayment and notice of protest.
Executed in Rapid City. South Dakota, this 31st day of December, 1995.
Maker:
U.S.A. SUNRISE BEVERAGES, INC.
By: /s/ Omar Barrientos
President
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Calendar Year 1996
NOTE 3
$65,691 .24 Due on or Before: December 31, 1997
For valuable monetary advances as loans, received from Omar Barrientos, started
1994, and continuing through 1995, 1996, to date. U.S.A. Sunrise Beverages, Inc.
(Maker), promises to pay to Omar Barrientos, as individual, the sum of $
65,691.24, plus accrued simple interest at the rate of 7% per annum from
December 31, 1996. This amount being the outstanding balance as to date of a
certain Loan Agreement entered between the parties on January 1, 1994, a copy of
which is incorporated by reference hereto. This Note is governed by the terms of
said agreement and its addendum's thereto. The Principal and Interest accrued
shall be reduced by any amounts received by Omar Barrientos from the company
from the date herein, except for payroll disbursements to Omar Barrientos.
At his option Omar Barrientos may accept partial or total payment in negotiated
stock.
This Document may be negotiated, altered or changed by the parties in writing
only. The Maker hereof waive presentment for payment, protest, notice of
nonpayment and notice of protest.
Executed in Rapid City, South Dakota, this the 31st day of December 1996.
Maker:
U.S.A. SUNRISE BEVERAGES, INC.
By: /s/ Omar Barrientos
President
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Calendar Year 1997
NOTE 4
$108,480.72 Due on or Before December 31, 1998
For valuable monetary advances as loans, received from Omar Barrientos,
started 1994, and continuing through 1995, 1996, 1997, to date. U.S.A. Sunrise
Beverages, Inc. (Maker), promises to pay to Omar Barrientos, as individual, the
sum of $108,480.72, plus accrued simple interest at the rate of 7% per annum
from December 31, 1997. This amount being the outstanding balance as to date of
a certain Loan Agreement entered between the parties on January 1, 1994, a copy
of which is incorporated by reference hereto. This Note is governed by the terms
of said agreement and its addendum's thereto. The Principal and Interest accrued
shall be reduced by any amounts received by Omar Barrientos from the company
from the date herein, except for payroll disbursements to Omar Barrientos.
At his option Omar Barrientos may accept partial or total payment in
negotiated stock.
This Document may be negotiated, altered or changed by the parties in
writing only. The Maker hereof waive presentment for payment, protest, notice of
nonpayment and notice of protest.
Executed in Rapid City, South Dakota this 31st day of Dec. 1997.
Maker:
U.S.A. SUNRISE BEVERAGES, INC.
By: /s/ Omar Barrientos
President
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EXHIBIT 10.9
DATE 11-16-95 NOTE AMOUNT $50,000
AFTER DATE, for value received, U.S.A. Sunrise Beverages, Inc., (Maker) promises
to pay to the order of: NEIL KURTI, (Payee) The amount of: fifty thousand
dollars ($50,000) with interest on unpaid balance at the rate of 10% ( ), per
annum, from Date and until principal and interest fully paid. The due date of
this Note is on or before the earliest date of February 1st, 1996, or on the
closing of the first $250,000 of the company's current Private Placement. In
addition U.S.A. Sunrise Beverages, Inc., will also pay the sum of 20,000 shares
of the company's common stock, which will have registration rights with any
Initial Public Offering of the company's common shares.
In case of default of any of the payments, when due, the whole of this Note,
both principal and interest, may, at the option of Payee, be declared due and
payable. The maker hereof waives presentment for payment, notice of non-payment,
protest and notice of protest.
Executed and agreed to, in Rapid City, South Dakota on this the 11th day of Nov,
1995.
U.S.A. Sunrise Beverages, Inc.
By:
/s/ Omar Barrientos
Omar Barrientos, President
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EXHIBIT 99.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
U.S.A. Sunrise Beverages, Inc. on Form 10-SB of our audited financial statements
as of December 31, 1997 for the period of January 1, 1996 through December 31,
1997.
/s/ Comiskey & Company
COMISKEY & COMPANY
PROFESSIONAL CORPORATION
Denver, Colorado
October 8, 1998
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