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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
GREEN FUSION CORPORATION
------------------------
(Exact name of Company as specified in its charter)
NEVADA 52-2202446
- ------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6320 S. Sandhill Road, Suite #10
Las Vegas, Nevada 89120
- ----------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 521-1919
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- ------------------- ------------------------------
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Shares, par value $0.001 per share
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(Title of class)
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TABLE OF CONTENTS
Page
COVER PAGE ..................................................... 1
TABLE OF CONTENTS .............................................. 2
PART I ......................................................... 3
DESCRIPTION OF BUSINESS ........................................ 3
DESCRIPTION OF PROPERTY ........................................ 9
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES ........ 9
REMUNERATION OF DIRECTORS AND OFFICERS ......................... 10
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS ... 10
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS ...... 11
DESCRIPTION OF SECURITIES ...................................... 11
PART II ........................................................ 13
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS ............... 13
LEGAL PROCEEDINGS .............................................. 14
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS .................. 14
RECENT SALES OF UNREGISTERED SECURITIES ........................ 14
INDEMNIFICATION OF DIRECTORS AND OFFICERS ...................... 15
PART F/S ....................................................... 17
FINANCIAL STATEMENTS ........................................... F-1
PART III ....................................................... 18
INDEX TO EXHIBITS .............................................. 18
SIGNATURES ..................................................... 19
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PART I
The issuer has elected to follow Form 10-SB, Disclosure Alternative 2.
Item 6. Description of Business
Organization
Green Fusion Corporation was incorporated as a Nevada Corporation on
March 5, 1998.
Business
The Company is an exploration stage company engaged in the acquisition
and exploration of mineral properties. The Company has an interest in
the properties described below. The Company has completed an initial
exploration program on its properties and intends to carry out
additional exploration work in order to ascertain whether these
properties possess commercially viable quantities of uranium ore.
There can be no assurance that a commercially exploitable mineral
deposit, or reserve, exists on the Company's properties until
appropriate exploratory work is done and an economic evaluation based
on such work concludes economic feasibility.
Green Fusion Properties
The Company is the owner of two mineral claims in the Smith Bay region
of the Province of Saskatchewan. The Company is also the owner of an
option to purchase a third mineral claim which is also in the Smith Bay
region of the Province of Saskatchewan. The mineral claims are
contiguous and are referred to as the "Green Fusion Properties".
1. Owned Properties
The Company is the owner of a 100% interest of two mineral claims
encompassing 12,330 acres in the vicinity of the Le Drew Lake Property
in the Smith Bay region of the Province of Saskatchewan, Canada. These
mineral claims are registered with the Province of Saskatchewan as
mineral claims Nos. S106084 and S106085. The Company acquired its
interest in each of the claims by staking. Mineral claim no. S106084
covers 4,349 acres and mineral claim no. S106085 covers 7,981 acres.
2. Property Option Agreement
The Company has acquired an option (the "Option") to acquire a 100%
interest in mineral claim No. S105984 (the "Option Property") covering
1,235 acres situated in the Province of Saskatchewan, Canada. The
Company acquired the Option pursuant to an agreement made as of April
6, 1998 (the "Option Agreement") between the Company and Michael
Lederhouse, of P.O. Box 202, La Ronge, Saskatchewan, and Carl Service
of 34 Moxon Crescent, Saskatoon, Saskatchewan (the "Optionors"). The
Company paid to the Optionors the amount of $6,000 CDN on execution of
the Option Agreement.
The Option is exercisable by the Company:
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1. paying the Optionors the sum of $6,000 CDN (which amount has been
paid)
2. paying the Optionors an additional $12,000 CDN as follows:
(a) $6,000 on or before April 6, 1999 (which amount has been
paid); and
(b) $6,000 on or before April 6, 2000;
3. allotting and issuing to the Optionors a total of 50,000 fully
paid and non-assessable common shares in the capital of the
Company upon execution of the Option Agreement (the "Property
Shares").
The Company has completed the payment to the Optionors of $6,000 CDN
due upon execution of the Option Agreement and the payment to the
Optionors of the $6,000 CDN due on or before April 6, 1999. The
Company has also issued the Property Shares to the Optionors. The
Property Shares are held in escrow pursuant to an escrow agreement
entered into between the Company, the Optionors and O'Neill Ritchie
Taylor Law Corporation (the "Escrow Agreement"), in accordance with the
policies of the Saskatchewan Securities Commission. The shares will be
released from escrow automatically over a three year period, with 30%
of the shares released on the first anniversary of execution of the
agreement, 30% of the shares released on the second anniversary of the
agreement and 40% on the third anniversary of the agreement. A total
of 15,000 shares of the Company's common stock has been released to the
Optionors effective as of April 6, 1999 in accordance with this release
schedule.
The Company has also agreed to pay to the Optionors a royalty equal to
1% of net smelter returns earned from the Option Property. The net
smelter royalty is defined as the gross proceeds received by the
Company from the sale of any ore from the mining of the Option
Property, less costs of transportation, refining and applicable taxes.
The Company's interest in the Option Property is limited to an option
to acquire a 100% interest in the Option Property. If the Company
fails to make any required payment under the Option Agreement, the
Option will terminate and the Company will have no further rights to
the Option Property. If the Company exercises the Option, then the
Company will become the owner of a 100% interest in the Option
Property, subject to the 1% net smelter royalty.
A copy of the Option Agreement is attached to this Registration
Statement and is made a part of this Registration Statement by
reference. The information provided in this Registration Statement
with respect to the Option Agreement is qualified in its entirety by
reference to the complete text of the agreement.
Location of the Green Fusion Properties
The Green Fusion Properties are located in the Province of
Saskatchewan, Canada approximately 15 km (9 mi) northwest of Wollaston
Lake and 35km (21 mi) northeast of Points North, Saskatchewan. They
are situated about 30 km (18 mi) north of four known uranium deposits
(McLean Lake, Rabbit Lake, Collins Bay and Eagle Point). Points North
is a staging area containing an air strip, accommodation, dining
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facilities, aircraft and fuel and may be reached by an all weather road
from the south. The property may be reached by ski or float equipped
aircraft or helicopter from Points North.
A copy of a map showing the location and accessibility of the Green
Lake Properties is attached to this Registration Statement as an
Exhibit.
1998 Work Program
The Company expended approximately $31,777 U.S. to complete a work
program on the properties consisting of sampling, mapping and analysis
in September, 1998.
Geological Report
The Company has obtained a geological report based on the work program
completed by the Company on the Green Fusion Properties in
September,1998. The Geological Report was prepared by Mr. Steven
Earle, PhD, P.Geo of 696 Western Acres Road, Nanaimo, British Columbia,
Canada (the "Geological Report"). The Geological Report summarizes the
results of the geological survey carried out by the Company on the
Green Fusion Properties. The geological survey consisted of the
collection and analysis of 124 samples collected from the Green Fusion
Properties in September, 1998.
The Geological Report concluded that the geology of the Green Fusion
Properties may be indicative of uranium mineralization based the
existence of uranium and lead anomalies on the Green Fusion Properties.
The presence of these geological features indicates the mineralization
of the Green Fusion Properties may be consistent with the geology of
other uranium deposits in the Athabasca Basin area of the Province of
Saskatchewan.
The Geological Report recommended a further follow-up geological work
program in order to further assess the prospect of uranium
mineralization of the Green Fusion Properties. The recommended
geological program would include a sampling program in which a total of
approximately 150 additional samples, assuming sample spacing of 100
meters, would be collected from the Green Fusion Properties at
locations identified in the geological report. The Geological Report
also recommended the types of geological testing to be completed on the
samples collected. The Company is considering undertaking the program
during the 2000 summer exploration period.
Plan of Operation
The Company has decided to proceed with the exploration program on the
Green Fusion Properties as recommended by the Geological Report,
provided the Company can achieve additional financing. The Company
anticipates that proceeding with exploration program will cost
approximately $50,000. The Company will assess whether to proceed with
further exploration programs upon completion of the exploration program
and an evaluation of the results.
The Company had cash on hand in the amount of $32,793 as of January 5,
2000. The Company will require additional financing to enable the
Company to complete the exploration program. The Company will also
require additional financing in order to meet its obligations for the
next twelve month period, including payment of the remaining $6,000
payment due on the Option Property by April 6, 2000, and payment of the
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legal and accounting expense of complying with its obligations as a
reporting issuer under the Securities Exchange Act of 1934.
The Company will also require additional funding in the event that the
Company determines to proceed with additional exploration programs
beyond the exploration program recommended in the Geological Report.
The Company anticipates that the cost of any additional exploration
program would be in excess of the projected cash reserves of the
Company upon completion of the exploration program recommended in the
Geological Report.
The Company anticipates that additional funding will be in the form of
equity financing from the sale of the Company's common stock. There is
no assurance that the Company will be able to achieve additional sales
of its common stock sufficient to fund the planned exploration program,
the remaining payment on the Option Property and any additional
exploration programs. The Company believes that debt financing will
not be an alternative for funding additional exploration programs. The
Company does not have any arrangements in place for equity financing.
The Company may consider bringing in a joint venture partner for the
Green Fusion Properties if it is unable to achieve sufficient funding
by itself to proceed with the planned exploration programs. The
Company does not have any arrangements in place with any potential
joint venture partner.
Employees
As of January 5, 2000, the Company had no employees, other than its
officers.
The Company's two officers are Mr. Logan Anderson, who is President and
a director of the Company, and Mr. Howard Thomson, who is Secretary and
Treasurer and a director of the Company. Each of Mr. Anderson and Mr.
Thomson provides their services on a part-time basis as required for
the business of the Company. Mr. Anderson presently commits
approximately 5% of his business time to the business of the Company.
Mr. Thomson presently commits approximately 5% of his business time to
the business of the Company.
The Company presently does not pay to Mr. Anderson any salary or
consulting fee. The Company presently does not pay to Mr. Thomson any
salary or consulting fee. The Company anticipates that the
compensation payable to Mr. Anderson and Mr. Thomson will be increased
in the event that the Company decides to proceed with additional
exploration programs beyond the geological work program recommended in
the Geological Report.
The Company does not pay to its directors any compensation for each
director serving as a director on the Company's board of directors.
The Company conducts its business through agreements with consultants
and arms-length third-parties.
Marketability of Discovered Minerals
Even if commercial quantities of ore are discovered, there can be no
assurance that a ready market will exist for its sale. Numerous
factors beyond the control of the Company may affect the marketability
of any
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substances discovered. These factors include market
fluctuations, the proximity and capacity of natural resource markets
and processing equipment, government regulations, including regulations
relating to prices, taxes, royalties, land tenure, land use, importing
and exporting of minerals and environmental protection. The exact
effect of these factors cannot be accurately predicted, but the
combination of these factors may result in the Company not receiving an
adequate return on invested capital.
Compliance with Government Regulation
The Company will be required to comply with all regulations, rules and
directives of governmental authorities and agencies applicable to the
exploration of minerals in the Province of Saskatchewan. In addition,
production of minerals in the Province of Saskatchewan will require
prior approval of applicable governmental regulatory agencies. There
can be no assurance that such approvals will be obtained. The cost and
delay involved in attempting to obtain such approvals cannot be known
in advance.
During the exploration phase of the Green Fusion Properties, the
Company will be subject to regulation by the Province of Saskatchewan.
The Company has budgeted for regulatory compliance costs in the
proposed work program recommended by the Geological Report. The
Company will have to sustain the cost of reclamation and environmental
mediation for all exploration (and development) work undertaken. The
amount of these costs is not known at this time as the Company does not
know the extent of the exploration program it will undertake, beyond
completion of the recommended work program, or if it will enter into
production on the Green Fusion Properties. Because there is presently
no information on the size, tenor, or quality of any resource or
reserve at this time, it is impossible to assess the impact of any
capital expenditures on the Company, its earnings or competitive
position in the event a potentially-economic deposit is discovered.
If the Company enters the production phase, the cost of complying with
permit and regulatory environment laws will be greater because the
impact on the project area is greater. Permits and regulations will
control all aspects of the production program if the project continues
to that stage. Examples of regulatory requirements include:
* Water discharge will have to meet drinking water standards;
* Dust generation will have to be minimal or otherwise re-mediated;
* Dumping of material on the surface will have to be re-contoured
and re-vegetated with natural vegetation;
* An assessment of all material to be left on the surface will need
to be environmentally benign;
* Ground water will have to be monitored for any potential
contaminants;
* The socio-economic impact of the project will have to be evaluated
and if deemed negative, will have to be re-mediated; and
* There will have to be an impact report of the work on the local
fauna and flora including a study of potentially endangered
species.
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Exploration Risk
Exploration for minerals is a very speculative venture, necessarily
involving substantial risk. There is no certainty that the
expenditures to be made by the Company in the acquisition of the
interests described herein will result in discoveries of commercial
quantities of ore. Hazards such as unusual or unexpected formations
and other conditions are involved in mineral exploration and
development. The Company may become subject to liability for pollution,
cave-ins or hazards against which it cannot insure or against which it
may elect not to insure. The payment of such liabilities may have a
material adverse effect on the Company's financial position.
The Company cannot give any assurance as to what would be considered a
"commercial quantity" of ore for the Green Fusion Properties. A
"commercial quantity" of ore is a quantity of ore which is sufficient
to economically justify commercial exploitation. In determining
whether a body of ore economically justifies exploitation, the Company
will assess those factors which impact on the economics of production
of the Green Fusion Properties, including prevailing mineral prices,
the concentration of minerals within the ore, cost of mining and
production, costs of money, costs of environmental compliance and
general economic conditions.
No Known Bodies of Ore
There are no known bodies of ore in the Company's properties. The
business plan of the Company is to raise funds to carry out further
exploration with the objective of finding ore of commercial tonnage and
grade. If the Company's exploration programs are successful,
additional funds will be required for the development of economic
reserves and to place them in commercial production. The main source
of future funds presently available to the Company is through the sale
of equity capital. The only reasonable alternative for the financing
of further exploration would be through the offering of an interest in
the Company's properties, a arrangement that is not presently
contemplated.
Research and Development Expenditures
The Company has incurred exploration costs in the amount of $31,777 in
connection with the exploration of the Green Fusion Properties since
its incorporation on March 5, 1998.
Subsidiaries
The Company has no subsidiaries.
Patents and Trademarks
The Company does not own, either legally or beneficially, any patent or
trademark.
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Item 7. Description of Property
The Company is the owner of a 100% interest of two mineral claims, No.
S106084 and No. S106085, encompassing 12,330 acres in the vicinity of
the Le Drew Lake Property in the Province of Saskatchewan, Canada, each
as described in Item 6 - "Description of Business" of Part I of this
Registration Statement. Mineral Claim No. S106084 covers 4,349 acres
and Mineral Claim No. 106085 covers 7,981 acres.
The Company has an option to acquire a 100% interest in the Option
Property, as described in detail in Item 6 - "Description of Business"
of Part I of this Registration Statement under "Option Agreement".
The Company does not own or lease any property other than its interest
in the Green Fusion Properties.
Item 8. Directors, Executive Officers and Significant Employees
The following information sets forth the names of the officers and
directors of the Company, their present positions with the Company, and
their biographical information.
Name Age Office(s) Held
- ---- --- --------------
Logan Anderson 44 Director and President
Howard Thomson 52 Director, Secretary and Treasurer
Logan B. Anderson is a director of the Company and is the President of
the Company. Mr. Anderson has been the President and a director of the
Company since March 5, 1998. Mr. Anderson is a graduate of Otago
University, New Zealand, with a Bachelor's Degree of Commerce in
Accounting and Economics (1977). He is an Associated Chartered
Accountant (New Zealand) and was employed by Coopers & Lybrand in New
Zealand (1977-1980) and Canada (1980-1982). From 1982 to 1992, Mr.
Anderson was Comptroller of Cohart Management Group, Inc., a management
service company which was responsible for the management of a number of
private and public companies. Mr. Anderson has been Principal and
President of Amteck Financial Services Company, a financial consulting
service company since 1993. Mr. Anderson has been an officer and
director of a number of private and public companies in the past 12
years, including PLC Systems, Inc. and 3D-Systems Inc. Mr. Anderson is
also a director and the president of Worldbid Corporation, a public
company that has developed and operates a business trade Internet
website.
Howard Thomson is a director of the Company and is the Secretary and
Treasurer of the Company. Mr. Thomson has been the Secretary and
Treasurer and a director of the Company since May 31, 1998. Mr.
Thomson was employed from 1981 to 1998 in senior management positions
with the Bank of Montreal, including 5 years as Branch Manager, 4 years
as Regional Marketing Manager and 5 years as Senior Private Banker.
Mr. Thomson retired from the Bank of Montreal in 1998. Mr. Thomson
resided in London, England prior to joining the Bank of Montreal and
was employed by the National Westminster Bank in England for 13 years.
Mr. Thomson is also a director of Skinvisible, Inc., a public company
that has developed and is marketing an anti-bacterial skin care product
and the whose common stock is traded on the OTC Bulletin Board.
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Terms of Office
Directors of the Company are appointed for a one year term to hold
office until the next annual general meeting of the holders of the
Company's Common Stock or until removed from office in accordance with
the Company's by-laws. Officers of the Company are appointed by the
Company's board of directors and hold office until removed by the
Company's board of directors.
Item 9. Remuneration of Directors and Officers
The following table sets forth certain information as to the Company's
three highest paid officers and directors for its fiscal year ended
December 31, 1999. No other compensation was paid or will be paid to
any such officer or directors other than the cash compensation set
forth below. See Item 6. "Business - Employees".
Summary Compensation Table
Name of Individual or Capacities in which Aggregate
Identity of Group Remuneration was Received Remuneration
- --------------------- ------------------------- ------------
Logan Anderson Director and President NIL
Howard Thomson Director and Secretary NIL
Treasurer
Officers and Directors Directors and Officers NIL
of the Company as a Group
The Company presently does not pay any salary or fee to either Mr.
Anderson or Mr. Thomson. See Item 6 - "Description of Business -
Employees".
Item 10. Security Ownership of Management and Certain Security Holders
The following table sets forth, as of January 5, 2000, the beneficial
ownership of the Company's Common Stock by each officer and director of
the Company, by each person known by the Company to beneficially own
more than 10% of the Company's Common Stock outstanding and by the
officers and directors of the Company as a group. Except as otherwise
indicated, all shares are owned directly.
Name and address Number of Shares Percentage of
Title of class of beneficial owner of Common Stock Common Stock(1)
- -------------- ------------------- ---------------- ---------------
Common Stock Logan Anderson 700,000 27.3%
Director, President
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Common Stock Howard Thomson 100,000 3.9%
Director, Secretary
and Treasurer
Common Stock Harold C. Moll 700,000 27.3%
Lacovia Condominium
Seven Mile Beach
Grand Cayman, BWI
Common Stock All Officers 800,000 31.2%
and Directors as a
Group (2 persons)
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(1) Based on 2,565,000 shares of Common Stock of the Company issued
and outstanding on January 5, 2000
Item 11. Interest of Management and Others in Certain Transactions
Except as disclosed below, none of the following parties since the date
of the Company's incorporation has had any material interest, direct or
indirect, in any transaction with the Company or in any presently
proposed transaction that, in either case, has or will materially
affect the Company.
* Director or officer of the Company;
* Proposed nominee for election as a director of the Company;
* Person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to all
outstanding shares of the Company;
* Promoter of the Company;
* Relative or spouse of any of the foregoing persons.
Item 12. Description of Securities
Common Stock
The Company's authorized capital consists of 100,000,000 common shares
par value $0.001 of Common Stock, of which 2,565,000 are issued and
outstanding as of January 5, 2000.
Holders of Common Stock have the right to cast one vote for each share
held of record on all matters submitted to a vote of holders of Common
Stock, including the election of directors. There is no right to
cumulate votes for the election of directors. Stockholders holding a
majority of the voting power of the capital stock issued and
outstanding and entitled to vote, represented in person or by proxy,
are necessary to constitute a quorum at any meeting of the Company's
stockholders, and the vote by the holders of a majority of such
outstanding shares is required to effect certain fundamental corporate
changes such as liquidation, merger or amendment of the Company's
Articles of Incorporation.
Holders of Common Stock are entitled to receive dividends pro rata
based on the number of shares held, when, as and if declared by the
Board of Directors, from funds legally available therefor, subject to
the rights of holders of any outstanding preferred stock. In the event
of the liquidation, dissolution or winding up of the affairs of the
Company, all assets and funds of the Company remaining after the
payment of all
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debts and other liabilities, subject to the rights of
the holders of any outstanding preferred stock, shall be distributed,
pro rata, among the holders of the Common Stock. Holders of Common
Stock are not entitled to pre-emptive or subscription or conversion
rights, and there are no redemption or sinking fund provisions
applicable to the Common Stock.
Warrants
The Company does not have any outstanding warrants to purchase the
securities of the Company.
Options
The Company does not have any outstanding options to purchase the
securities of the Company. The Company may in the future establish an
incentive stock option plan for its directors, officers, employees and
consultants.
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PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Stockholder Matters
No Present Public Market
There is no present public market for the Company's Common Stock. The
Company anticipates applying for a listing on the OTC Bulletin Board.
There can be no assurance that a public market will materialize.
Holders of Common Stock
As of the date of this registration statement, there were thirty-seven
(37) registered shareholders of the Company's common stock.
Rule 144 Shares
A total of 1,550,000 shares of the Company's common stock will be
available for resale to the public after March 31, 2000 in accordance
with the volume and trading limitations of Rule 144. In general, under
Rule 144 as currently in effect, a person who has beneficially owned
shares of the Company's common stock for at least one year would be
entitled to sell within any three month period a number of shares that
does not exceed the greater of:
1. 1% of the number of shares of the Company's common stock then
outstanding which will equal approximately 25,650 shares as of the
date of this registration statement; or
2. the average weekly trading volume of the Company's common stock
during the four calendar weeks preceding the filing of a notice on
Form 144 with respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions and
notice requirements and to the availability of current public
information about the Company.
Under Rule 144(k), a person who is not one of the Company's affiliates
at any time during the three months preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two
years, including the holding period of any prior owned other than an
affiliate, is entitled to sell shares without complying with the manner
of sale, public information volume limitation or notice provisions of
Rule 144. Of the 1,550,000 shares which may be sold pursuant to Rule
144, a total of 50,000 shares are held by persons who are not the
Company's affiliates as of the date of this Registration Statement.
Registration Rights
The Company has not granted registration rights to any persons.
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Dividends
The Company has not declared any dividends since its incorporation in
March, 1998. There are no dividend restrictions that limit the
Company's ability to pay dividends on its common stock in its Articles
of Incorporation or Bylaws. The Company's governing statute, Chapter
78 - "Private Corporations" of the Nevada Revised Statutes (the "NRS"),
does provide limitations on the Company's ability to declare dividends.
Section 78.288 of Chapter 78 of the NRS prohibits the Company from
declaring dividends where, after giving effect to the distribution of
the dividend:
1. the Company would not be able to pay its debts as they become due
in the usual course of business; or
2. the Company's total assets would be less than the sum of its total
liabilities plus the amount that would be needed, if the Company
were to be dissolved at the time of distribution, to satisfy the
preferential rights upon dissolution of stockholders who may have
preferential rights and whose preferential rights are superior to
those receiving the distribution. (except as otherwise
specifically allowed by the Company's articles of incorporation).
Item 2. Legal Proceedings
There are no legal proceedings pending or threatened against the
Corporation.
Item 3. Changes in and Disagreements with Accountants
The Company has had no changes in or disagreements with its accountants
since its inception in March 8, 1998
Item 4. Recent Sales of Unregistered Securities
The Company completed an offering of 1,550,000 common shares at a price
of $0.005 per share on March 31, 1999 pursuant to Section 4(2) of the
Securities Act of 1933. All of these shares were sold to directors,
officers and key advisors to the Company, and are "restricted shares"
within the meaning of the Securities Act of 1933.
The Company issued 50,000 shares of its common stock on April 6, 1998
to Mr. Carl Service pursuant to Section 4(2) of the Securities Act of
1933. The shares were issued to Mr. Service in accordance with the
Company's obligations under the Option Agreement. See Item 6 -
"Description of Business" of Part I of this Registration Statement.
None of the securities were sold through an underwriter and
accordingly, there were no underwriting discounts or commissions
involved. All of these shares are "restricted shares" within the
meaning of the Securities Act of 1933.
The Company completed an offering of 700,000 common shares at a price
of $0.05 per share on June 30, 1998 to a total of five (5) investors,
each of which investors was known to the officers and directors of the
Company. The offering was completed pursuant to Rule 504 of Regulation
D of the Act on the basis that (i) the offering was for an offering of
stock less than $1,000,000, in the aggregate; (ii) the Company had a
specific business plan at the time of the offering, being the
exploration of the Green Fusion Properties; (iii)
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the Company was not subject to the reporting requirements of the
Securities and Exchange Act of 1934 at the time of the offering. The
offering was also completed pursuant to exemptions provided by Section
46(j) of the Securities Act of British Columbia. All purchasers had
adequate access to sufficient information about the Company to make an
informed investment decision. None of the securities were sold through an
underwriter and accordingly, there were no underwriting discounts or
commissions involved.
The Company completed an offering of 265,000 common shares at a price
of $0.20 per share on October 15, 1998 to a total of twenty eight (28)
investors, each of which investors was known to the officers and
directors of the Company. The offering was completed pursuant to Rule
504 of Regulation D of the Act on the basis that (i) the offering was
for an offering of stock less than $1,000,000, in the aggregate; (ii)
the Company had a specific business plan at the time of the offering,
being the exploration of the Green Fusion Properties; (iii) the
Company was not subject to the reporting requirements of the Securities
and Exchange Act of 1934 at the time of the offering. The offering was
also completed pursuant to exemptions provided by Section 46(j) of the
Securities Act of British Columbia. All purchasers had adequate access
to sufficient information about the Company to make an informed
investment decision. None of the securities were sold through an
underwriter and accordingly, there were no underwriting discounts or
commissions involved.
Item 5. Indemnification of Directors and Officers
The officers and directors of the Company are indemnified as provided
under the Nevada Revised Statutes (the "NRS") and the Bylaws of the
Company.
Under the NRS, director immunity from liability to a corporation or its
shareholders for monetary liabilities applies automatically unless it
is specifically limited by a corporation's articles of incorporation
(which is not the case with the Company's Articles of Incorporation).
Excepted from that immunity are: (i) a wilful failure to deal fairly
with the corporation or its shareholders in connection with a matter in
which the director has a material conflict of interest; (ii) a
violation of criminal law (unless the director had reasonable cause to
believe that his or her conduct was lawful or no reasonable cause to
believe that his or her conduct was unlawful); (iii) a transaction from
which the director derived an improper personal profit; and (iv) wilful
misconduct.
The By-laws of the Company provide that the Company will indemnify its
directors and officers to the fullest extent not prohibited by the
Nevada General Corporation Law; provided, however, that the Company may
modify the extent of such indemnification by individual contracts with
its directors and officers; and, provided, further, that the Company
shall not be required to indemnify any director or officer in
connection with any proceeding (or part thereof) initiated by such
person unless (i) such indemnification is expressly required to be made
by law, (ii) the proceeding was authorized by the Board of Directors of
the corporation, (iii) such indemnification is provided by the Company,
in its sole discretion, pursuant to the powers vested in the
corporation under the Nevada General Corporation Law or (iv) such
indemnification is required to be made pursuant to the By-laws.
The By-laws of the Company provide that the Company will advance to any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director or officer, of the corporation, or is or
was serving at the request of the corporation as a director or
executive officer of another corporation, partnership, joint venture,
trust or other enterprise, prior to the final disposition of the
15
<PAGE>
proceeding, promptly following request therefor, all expenses incurred
by any director or officer in connection with such proceeding upon
receipt of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not
entitled to be indemnified under the By-laws of the Company or
otherwise.
The By-laws of the Company provide that no advance shall be made by the
Company to an officer of the Company (except by reason of the fact that
such officer is or was a director of the Company in which event this
paragraph shall not apply) in any action, suit or proceeding, whether
civil, criminal, administrative or investigative, if a determination is
reasonably and promptly made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties
to the proceeding, or (ii) if such quorum is not obtainable, or, even
if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to
the decision-making party at the time such determination is made
demonstrate clearly and convincingly that such person acted in bad
faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Company.
16
<PAGE>
PART F/S
FINANCIAL STATEMENTS
The Company's audited Financial Statements, as described below, are
attached hereto.
1. Audited financial statements for the period ending December 31,
1998, including:
(a) Balance Sheet;
(b) Statement of Operations and Accumulated Deficit;
(c) Statement of Changes in Stockholders' Equity;
(d) Statement of Cash Flows;
(e) Notes to Financial Statements.
2. Unaudited financial statements for the nine months ending
September 30, 1999, including:
(a) Balance Sheet;
(b) Statement of Operations and Accumulated Deficit;
(c) Statement of Changes in Stockholders' Equity;
(d) Statement of Cash Flows;
(e) Notes to Financial Statements.
3. Consent of Sarna & Company, Certified Public Accountants
17
<PAGE>
GREEN FUSION CORPORATION
FINANCIAL STATEMENTS
DECEMBER 31, 1998
WITH
INDEPENDENT AUDITOR'S REPORT THEREON
<PAGE>
INDEX TO FINANCIAL STATEMENTS
-----------------------------
Page
----
Independent Auditor's Report. . . . . . . . . . . . . . 1
Financial Statements:
Balance Sheet . . . . . . . . . . . . . . . . . . . . 2
Statement of Operations
and Accumulated Deficit . . . . . . . . . . . . . . 3
Statement of Changes in Stockholders' Equity. . . . . 4
Statement of Cash Flows . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . 6-8
Supplemental Statement:
Statement of Operating Expenses . . . . . . . . . . . 10
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors
Green Fusion Corporation
We have audited the accompanying consolidated balance sheet of
Green Fusion Corporation, ("GFC"), a development stage company,
as of December 31, 1998 and the related statements of operations
and accumulated deficit, changes in stockholders' equity, and
statement of cash flows for the period then ended. These
financial statements are the responsibility of GFC's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the 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 Green Fusion Corporation as of December 31, 1998, and the
results of its operations, changes in stockholders' equity and
cash flows for the period ended December 31, 1998, in conformity
with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
statement of operating expenses is presented for the purposes of
additional analysis and is not a required part of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements
taken as a whole.
/s/ Sarna & Company
Sarna & Company
Westlake Village, California
February 16, 1999
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
Current Assets
Cash $ 40,633
Prepaid Acquisition Costs 1,800
----------
Total Current Assets $ 42,433
Mineral Rights and Development Costs 38,477
Other Asset - Capitalized Start-Up Costs 15,248
----------
TOTAL ASSETS $ 96,158
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses $ 6,034
----------
Total Current Liabilities $ 6,034
Stockholders' Equity
Common Stock, $0.001 par value
100,000,000 shares authorized
2,565,000 shares issued 2,565
Additional Paid in Capital 89,485
Accumulated deficit <1,926>
----------
Total Stockholders' Equity 90,124
----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 96,158
==========
See Notes to Financial Statements
2
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE PERIOD MARCH 5, 1998 (INCEPTION)
THROUGH DECEMBER 31, 1998
Revenues $ 0
Operating Expenses <1,926>
----------
Loss Before Provision for <1,926>
Income Taxes
Provision for Income Taxes <0>
----------
Net Loss <1,926>
Deficit, Inception
of Period <0>
Accumulated Deficit, End of Period $ <1,926>
===========
Net Loss per Share $ <0.00>
===========
Weighted Average Shares Outstanding 2,025,000
===========
See Notes to Financial Statements
3
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD MARCH 5, 1998 (INCEPTION)
THROUGH DECEMBER 31, 1998
Total
Common Stock Additional Accumulated Stock-
Dollar Paid in Deficit holders'
Shares Amount Capital Equity
------ ------ ---------- ----------- --------
Inception ---- $ ---- $ ---- $ ---- $ ----
March 5, 1998
Common Stock Issued
Commencement of
Operations
$0.001 per share
March 30, 1998 1,550,000 1,550 ---- ---- 1,550
Common Stock Issued
in Exchange for
Assets
$0.05 per share
April 6, 1998 50,000 50 2,450 ---- 2,500
Common Stock Issued
First Offering
$0.05 per share
June 30, 1998 700,000 700 34,300 ---- 35,000
Common Stock Issued
Second Offering
$.20 per share
July 28, 1998 265,000 265 52,735 ---- 53,000
Net Loss
Period Ended
December 31, 1998 ---- ---- ---- (1,926) (1,926)
----------------------------------------------------
Balances
December 31, 1998 2,565,000 $ 2,565 $ 89,485 $ (1,926) $ 90,124
====================================================
See Notes to Financial Statements
4
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD MARCH 5, 1998 (INCEPTION)
THROUGH DECEMBER 31, 1998
Cash Flows from Operating Activities:
Net Loss $ <1,926>
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities
<Increase> Decrease in:
Prepaid Acquisition Costs <1,800>
Other Asset <15,248>
Increase <Decrease> in:
Accounts Payable and
Accrued Expenses 6,034
----------
Net Cash Used by Operating Activities <12,940>
Cash Flows from Investing Activities:
Purchase of Mineral Rights $ < 6,700>
Mineral Right Development Costs <31,777>
---------
Net Cash Used by Investing Activities <38,477>
Cash Flows from Financing Activities:
Net Proceeds from the Issuance of
Common Stock 92,050
---------
Net Cash Provided by Financing Activities 92,050
----------
Net Increase in Cash 40,633
Cash at Beginning of Period 0
---------
Cash at End of Period $ 40,633
=========
See Notes to Financial Statements
5
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
General
- -------
Green Fusion Corporation ("GFC") was incorporated on March 5,
1998 in the state of Nevada. The Company acquires and develops
certain mineral rights in Canada.
Basis of Presentation
- ---------------------
The Company reports revenue and expenses using the accrual method
of accounting for financial and tax reporting purposes.
Use of Estimates
- ----------------
Management uses estimates and assumptions in preparing these
financial statements in accordance with generally accepted
accounting principles. Those estimates and assumptions affect
the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities, and the reported revenues and
expenses.
Development Stage Company
- -------------------------
GFC meets the guidelines of SFAS No. 7 and as such is classified
as a development stage company.
Pro Forma Compensation Expense
- ------------------------------
GFC accounts for costs of stock-based compensation in accordance
with APB No. 25, "Accounting for Stock Based Compensation"
instead of the fair value based method in SFAS No. 123. No stock
options have been issued by GFC. Accordingly, no pro forma
compensation expense is reported in these financial statements.
6
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
- ---------------------------------------------------------------
Mineral Rights
- --------------
Mineral rights and related development costs are stated at
historical cost.
Depreciation, Amortization and Capitalization
- ---------------------------------------------
The Company records depreciation and amortization when
appropriate using both straight-line and declining balance
methods over the estimated useful life of the assets (five to
seven years).
Expenditures for maintenance and repairs are charged to expense
as incurred. Additions, major renewals and replacements that
increase the property's useful life are capitalized. Property
sold or retired, together with the related accumulated
depreciation, is removed from the appropriate accounts and the
resultant gain or loss is included in net income.
Income Taxes
- ------------
The Company accounts for its income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes". Under Statement 109, a liability method is
used whereby deferred tax assets and liabilities are determined
based on temporary differences between basis used for financial
reporting and income tax reporting purposes. Income taxes are
provided based on tax rates in effect at the time such temporary
differences are expected to reverse. A valuation allowance is
provided for certain deferred tax assets if it is more likely
than not, that the Company will not realize the tax assets
through future operations.
Fair Value of Financial Instruments
- -----------------------------------
Financial accounting Standards Statement No. 107, "Disclosures
About Fair Value of Financial Instruments", requires the Company
to disclose, when reasonably attainable, the fair market values
of its assets and liabilities which are deemed to be financial
instruments. The Company's financial instruments consist
primarily of cash and certain investments.
7
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
- ---------------------------------------------------------------
Per Share Information
- ---------------------
The Company computes per share information by dividing the net
loss for the period presented by the weighted average number of
shares outstanding during such period.
NOTE 2 - PROVISION FOR INCOME TAXES
- -----------------------------------
The provision for income taxes for the period ended December 31,
1998 represents the minimum state income tax expense of the
Company, which is not considered significant.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------
Operating Leases
- ----------------
The Company currently rents administrative office space under a
monthly renewable contract.
Litigation
- ----------
The Company is not presently involved in any litigation.
8
<PAGE>
SUPPLEMENTAL STATEMENT
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATING EXPENSES
FOR THE PERIOD MARCH 5, 1998 (INCEPTION)
THROUGH DECEMBER 31, 1998
Operating Expenses
Bank and Other Charges $ 376
Management Fees 1,550
--------
Total Operating Expenses $ 1,926
=========
See Notes to Financial Statements
10
<PAGE>
GREEN FUSION CORPORATION
FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
<PAGE>
INDEX TO FINANCIAL STATEMENTS
-----------------------------
Page
----
Accountants' Review Report. . . . . . . . . . . . . . . 1
Financial Statements:
Balance Sheet . . . . . . . . . . . . . . . . . . . . 2
Statement of Operations
and Accumulated Deficit . . . . . . . . . . . . . . 3
Statement of Changes in Stockholders' Equity. . . . . 4
Statement of Cash Flows . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . 6-9
Supplemental Statement:
Statement of Operating Expenses . . . . . . . . . . . 11
<PAGE>
ACCOUNTANTS' REVIEW REPORT
--------------------------
To the Board of Directors
Green Fusion Corporation
We have reviewed the accompanying balance sheet of Green Fusion
Corporation, ("GFC"), a development stage company, as of
September 30, 1999 and the related statements of operations and
accumulated deficit, changes in stockholders' equity, and
statement of cash flows for the nine months then ended, in
accordance with standards established by the American Institute
of Certified Public Accountants. All information included in
these financial statements is the representation of the
management of Green Fusion Corporation.
A review consists principally of inquiries of Company personnel
and analytical procedures applied to financial data. It is
substantially less in scope than an examination in accordance
with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such
an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying financial
statements in order for them to be in conformity with generally
accepted accounting principles.
Our review was made for the purpose of expressing limited
assurance that there are no material modifications that should be
made to the financial statements in order for them to be in
conformity with generally accepted accounting principles. The
supplemental statement of operating expenses is presented for the
purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected
to the inquiry and analytical procedures applied in the review of
the basic financial statements, and we are not aware of any
material modifications that should be made thereto.
\s\ Sarna & Company
Sarna & Company
Westlake Village, California
December 14, 1999
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1999
ASSETS
Current Assets
Cash $ 32,793
Prepaid Acquisition Costs 1,800
----------
Total Current Assets $ 34,593
Mineral Rights and Development Costs 38,477
Other Asset - Capitalized Start-Up Costs 15,248
----------
TOTAL ASSETS $ 88,318
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses $ 2,160
----------
Total Current Liabilities $ 2,160
Stockholders' Equity
Common Stock, $0.001 par value
100,000,000 shares authorized,
2,565,000 shares issued 2,565
Additional Paid in Capital 89,485
Accumulated deficit <5,892>
---------
Total Stockholders' Equity 86,158
----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 88,318
==========
See Notes to Financial Statements
2
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
Revenues $ -0-
Operating Expenses <3,966>
------------
Loss Before Provision for <3,966>
Income Taxes
Provision for Income Taxes <0>
------------
Net Loss <3,966>
Deficit, Beginning
of Period <1,926>
------------
Accumulated Deficit, End of Period $ <5,892>
============
Net Loss per Share $ <0.00>
============
Weighted Average Shares Outstanding 2,565,000
============
See Notes to Financial Statements
3
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
Common Stock Additional Accumulated Total
Dollar Paid in Deficit Stockholders'
Shares Amount Capital Equity
------ ------ ------- ------------ -------------
Balances 2,565,000 $ 2,565 $ 89,485 $ <1,926> $ 90,124
December
31, 1998
Net Loss
Period Ended
September
30, 1999 ---- ---- ---- <3,966> <3,966>
-----------------------------------------------------------
Balances
September
30, 1999 2,565,000 $ 2,565 $ 89,485 $ <5,892> $ 86,158
===========================================================
See Notes to Financial Statements
4
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
Cash Flows from Operating Activities:
Net Loss $ <3,966>
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities
Increase <Decrease> in:
Accounts Payable and
Accrued Expenses <3,874>
---------
Net Cash Used by Operating Activities <7,840>
Net Decrease in Cash <7,840>
Cash at Beginning of Period 40,633
---------
Cash at End of Period $ 32,793
=========
See Notes to Financial Statements
5
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
General
- -------
Green Fusion Corporation ("GFC") was incorporated on March 5,
1998 in the state of Nevada. The Company acquires and develops
certain mineral rights in Canada.
Basis of Presentation
- ---------------------
The Company reports revenue and expenses using the accrual method
of accounting for financial and tax reporting purposes.
Use of Estimates
- ----------------
Management uses estimates and assumptions in preparing these
financial statements in accordance with generally accepted
accounting principles. Those estimates and assumptions affect
the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities, and the reported revenues and
expenses.
Development Stage Company
- -------------------------
GFC meets the guidelines of SFAS No. 7 and as such is classified
as a development stage company.
Pro Forma Compensation Expense
- ------------------------------
GFC accounts for costs of stock-based compensation in accordance
with APB No. 25, "Accounting for Stock Based Compensation"
instead of the fair value based method in SFAS No. 123. No stock
options have been issued by GFC. Accordingly, no pro forma
compensation expense is reported in these financial statements.
6
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
- ---------------------------------------------------------------
Mineral Rights
- --------------
Mineral rights and related development costs are stated at
historical cost.
Depreciation, Amortization and Capitalization
- ---------------------------------------------
The Company records depreciation and amortization when
appropriate using both straight-line and declining balance
methods over the estimated useful life of the assets (five to
seven years).
Expenditures for maintenance and repairs are charged to expense
as incurred. Additions, major renewals and replacements that
increase the property's useful life are capitalized. Property
sold or retired, together with the related accumulated
depreciation, is removed from the appropriate accounts and the
resultant gain or loss is included in net income.
Income Taxes
- ------------
The Company accounts for its income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes". Under Statement 109, a liability method is
used whereby deferred tax assets and liabilities are determined
based on temporary differences between basis used for financial
reporting and income tax reporting purposes. Income taxes are
provided based on tax rates in effect at the time such temporary
differences are expected to reverse. A valuation allowance is
provided for certain deferred tax assets if it is more likely
than not, that the Company will not realize the tax assets
through future operations.
Fair Value of Financial Instruments
- -----------------------------------
Financial accounting Standards Statement No. 107, "Disclosures
About Fair Value of Financial Instruments", requires the Company
to disclose, when reasonably attainable, the fair market values
of its assets and liabilities which are deemed to be financial
instruments. The Company's financial instruments consist
primarily of cash and certain investments.
7
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
- ---------------------------------------------------------------
Per Share Information
- ---------------------
The Company computes per share information by dividing the net
loss for the period presented by the weighted average number of
shares outstanding during such period.
Year 2000 Compliance
- --------------------
The Year 2000 issue is the result of computer programs having
been written using two digits (rather than four) to define years.
Computers or other equipment with date-sensitive software may
recognize "00" as 1900 rather than 2000. This could result in
system failures or miscalculations. If the Company or
significant customers, suppliers or other third parties fail to
correct Year 2000 issues, the Company's ability to operate could
be affected.
The following disclosure is pursuant to the Year 2000 Readiness
and Disclosure Act.
Green Fusion's Year 2000 program is designed to minimize the
possibility of Year 2000 interruptions. Any such interruption
may have a material adverse impact on the Company's future
operating results. In 1999, the Company established procedures
to identify and assess systems and processes vulnerable to Year
2000 problems. The Company also developed procedures to monitor
levels of compliance within its stated goals of compliance.
In each area of vulnerability, various testing and readiness
methodologies are being used to identify and correct suspect
systems, processes or supplier interfaces. The Company projects
to meet its Year 2000 compliance goals prior to the end of fourth
quarter 1999.
Recently Issued Accounting Pronouncements
- -----------------------------------------
Recently issued accounting pronouncements will have no
significant impact on the Company and its reporting methods.
8
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 - PROVISION FOR INCOME TAXES
- -----------------------------------
The provision for income taxes for the nine months ended
September 30, 1999 represents the minimum state income tax
expense of the Company, which is not considered significant.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------
Operating Leases
- ----------------
The Company currently rents administrative office space under a
monthly renewable contract.
Litigation
- ----------
The Company is not presently involved in any litigation.
9
<PAGE>
SUPPLEMENTAL STATEMENT
<PAGE>
GREEN FUSION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATING EXPENSES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
Operating Expenses
Professional Fees $ 3,920
Supplies 46
--------
Total Operating Expenses $ 3,966
========
See Notes to Financial Statements
11
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to inclusion of our audit report dated
February 16, 1999, on the financial statements of Green
Fusion Corporation ("the Company") for the period ended
December 31, 1998 in the Company's Form 10-SB registration
statement to be filed with the United States Securities and
Exchange Commission. We also consent to the application of
such report to the financial information in the Form 10-SB,
when such financial information is read in conjunction with
the financial statements referred to in our report.
/s/ Sarna & Company
Sarna & Company
Certified Public Accountants
Westlake Village, California
January 25, 2000
<PAGE>
PART III
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.1 Articles of Incorporation
3.2 Bylaws of the Company
10.1 Option Agreement dated April 6, 1998 between the Company,
Michael Lederhouse and Carl Service
27.1 Map Showing Location and Accessibility of the Green Lake
Properties
18
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
GREEN FUSION CORPORATION
Date: January 10, 2000
/s/ Logan Anderson
By: _____________________________
LOGAN ANDERSON
Director and President
<PAGE>
FILED
IN THE OFFICE OF
SECRETARY OF STATE OF THE
STATE OF NEVADA ARTICLES OF INCORPORATION
MAR 05 1998
OF
No. C4578-1998
/s/ Dean Heller
Dean Heller Secretary of State GREEN FUSION CORPORATION
------------------------
KNOW ALL MEN BY THESE PRESENTS: That the undersigned,
Pursuant to Chapter 78 of the Nevada Revised Statutes, has
this day made and filed these Articles of Incorporation and
DOES HEREBY CERTIFY:
1. Name: The name of the Corporation shall be:
GREEN FUSION CORPORATION
2. Principal Office: The principal office or place
of business for the corporation shall be located at 6121 Lakeside
Drive, Suite 260, Reno, Nevada 89511-8527. The corporation may
also maintain offices, transact corporate business, and hold
meetings of directors and shareholders at other places in
Nevada or outside the State. The name and address of its Resident
Agent are Richard W. Harris, Esq., 6121 Lakeside Drive, Suite 260,
Reno, Nevada 89511-8527.
3. Purpose: The nature of the business, objects and
purposes to be transacted, promoted, and carried out by the corporation
shall be: To engage in any lawful activity within or without the
State of Nevada.
4. Term: The corporation shall have perpetual existence.
5. Capitalization: The amount of the total authorized capital
of the
-1-
<PAGE>
corporation shall consist of TWENTY FIVE THOUSAND (25,000)
shares having no par value. All of the shares shall be of one
class, without series or other distinction, and shall be
designated as "Common Stock".
6. Assessments: The capital stock, after the amount
of the subscription price has been fully paid, shall not be subject
to assessment for any purpose whatsoever.
7. Directors: The governing board of the corporation
shall be styled "Directors", and the first Board shall be one (1) in
number. The number of directors shall not be reduced to fewer than
one, and may, at any time or times, be increased or decreased in such
manner as provided in the By-Laws of the corporation.
The names and addresses of the first Board of Directors are
as follows:
Name Address
---- -------
Logan Anderson Unit 45, Locavia Condominiums
Seven Mile Beach
Cayman Islands, BWI
8. Election of Directors: At all elections of directors of
the corporation each stockholder possessing voting power is entitled
to as many votes as equal the number of directors to be elected. He
or she may cast all of such votes for a single director or may
distribute them among the number to be voted upon or any two or
more of them, as he or she may see fit.
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<PAGE>
9. Powers of Directors: In furtherance, and not in limitation of
the powers conferred by statute, the Board of Directors is expressly
authorized:
a. To make, alter, amend and rescind the By-Laws of the corporation.
b. To fix the amount to be reserved as working capital.
c. To fix the times for the declaration and payment of dividends.
d. To authorize and cause to be executed mortgages and liens upon
real and personal property of the corporation.
e. To sell, assign, transfer or otherwise dispose of the property
of the corporation as an entirety with the consent in writing or
pursuant to the affirmative vote of the holders or a majority of the
stock issued and outstanding, at a stock-holders' meeting duly called
for that purpose.
f. To sell, assign, transfer, lease and in any lawful manner
dispose of such portions of said property as the Board of Directors
shall deem advisable, and to use and apply the funds received in
payment therefore to the surplus account for the benefit
of the corporation, or the payment of dividends, or
otherwise; provided that a majority of the whole Board
concur therein, and further provided that the capital stock
shall not be decreased except in accordance with the
laws of Nevada.
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g. By a resolution passed by a majority of
the whole Board, under suitable provision of the By-Laws,
to designate two or more of their numbers to
constitute an executive committee, which committee shall
have and exercise any and all of the powers of the Board
of Directors which may be lawfully delegated in the
management of the business and affairs of the corporation,
and shall have the authority to cause the seal of the
corporation to be affixed to all papers which may require it
h. To determine from time to time whether (and if
allowed, under what conditions are regulations) the accounts
and books of the corporation (other than the
books required by law to be kept at the principal office of
the corporation in Nevada), or any of them shall be open to
the inspection of the stockholders, and the stockholders'
rights in this respect are and shall be restricted or
limited accordingly.
10. Liability of Directors and Officers: An office
or director of the corporation shall have no personal
liability to the corporation or its stockholders for
damages for breach of fiduciary duty as an officer or
director except for (a) acts or omissions which involve
intentional misconduct, fraud, or a knowing violation
of the law and (b) the payment of dividends in violation
of N.R.S. 78.300.
11. Indemnification of Officers and Directors: Every
person who was or is a party to, or is threatened to be made a
party to, or is involved in any
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<PAGE>
action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact
that he or she or a person of whom he or she is the legal
representative is or was a director or officer of the
corporation or is or was serving at the request of the
corporation as a director or officer of another corporation,
or as its representative in a partnership, joint venture,
trust or other enterprise, shall be indemnified and held
harmless to the fullest extent legally permissible under
the laws of the State of Nevada from time to time
against all expenses, liability and loss (including
attorney's fees, judgments, fines and
amounts paid or to be paid in settlement) reasonably
incurred or suffered by him or her in connection therewith.
Such right of indemnification shall be a contract right which
may be enforced in any manner desired by such person. Such
right of indemnification which such directors, officers, or
representatives may have or hereafter acquire shall extend to
all actions undertaken on behalf of the corporation; and,
without limiting the generality of such statement, they shall
be entitled to their respective rights of indemnification under
any By-Laws, agreement vote of stockholders, provision of
law or otherwise, as well as their rights under this Article.
Without limiting the application of the foregoing, the
Board of Directors may adopt By-Laws from time to time with
respect to indemnification to provide at all times
the fullest indemnification permitted by the laws of the
State of Nevada and may cause the corporation to purchase
and maintain insurance on
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<PAGE>
behalf of any person who is or was a director or officer
of the corporation, or is or was serving at the request of the
corporation as a director or officer of another
corporation, or as its representative in a
partnership, joint venture, trust or other enterprises
against any liability asserted against
such person and incurred in any such capacity or arising
out of such status, whether or not the corporation would
have the power to indemnify such person.
12. Amendment: The corporation reserves the right to
amend, alter or repeal any provisions contained in these
Articles of Incorporation in the manner now or
hereafter prescribed by statute, and all rights conferred
on stockholders herein are granted
subject to this reservation.
13. Incorporator: The name and post office address
of the person signing these Articles of Incorporation are
as follows:
Richard W. Harris
6121 Lakeside Drive, Suite 260
Reno, Nevada 89511-8527
IN WITNESS WHEREOF, I have hereunto set my hand this
4th day of March, 1998, hereby declaring and certifying that
the facts stated hereinabove are true and
correct to the best of my knowledge.
/s/ Richard W. Harris
---------------------
RICHARD W. HARRIS
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<PAGE>
CERTIFICATE OF ACCEPTANCE OF
APPOINTMENT BY RESIDENT AGENT
-----------------------------
I, RICHARD W. HARRIS, hereby certify that on the 4th
day of March, 1998, I accepted appointment as Resident Agent of
Green Fusion Corporation in accordance with NRS 78.090. The
principal office in the State is located at 6121 Lakeside Drive,
Suite 260, Reno, Nevada 89511-8527, Washoe County, Nevada.
DATED this 4th day of March, 1998.
/s/Richard W. Harris
--------------------
RICHARD W. HARRIS
STATE OF NEVADA )
) ss.
COUNTY OF WASHOE )
On this 4th day of March, 1998, personally appeared
before me, a Notary Public, RICHARD W. HARRIS, personally known
to me, who acknowledged to me that he executed the foregoing
Articles of Incorporation.
Betty Carlson
-------------
NOTARY PUBLIC
BETTY CARLSON
Notary Public - State of Nevada
Appointment Recorded in County of Washoe
97-0073-3 My appointment Expires Feb. 5, 2001
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<PAGE>
AMENDED BYLAWS
OF
GREEN FUSION CORPORATION
(A NEVADA CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
corporation in the State of Nevada shall be in the City of Reno,
State of Nevada.
Section 2. Other Offices. The corporation shall also have
and maintain an office or principal place of business at such place
as may be fixed by the Board of Directors, and may also have
offices at such other places, both within and without the State of
Nevada as the Board of Directors may from time to time determine or
the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The corporate seal shall consist
of a die bearing the name of the corporation and the inscription,
"Corporate Seal-Nevada." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. Place of Meetings. Meetings of the stockholders
of the corporation shall be held at such place, either within or
without the State of Nevada, as may be designated from time to time
by the Board of Directors, or, if not so designated, then at the
office of the corporation required to be maintained pursuant to
Section 2 hereof.
Section 5. Annual Meeting.
(a) The annual meeting of the stockholders of the
corporation, for the purpose of election of directors and for such
other business as may lawfully come before it, shall be held on
such date and at such time as may be designated from time to time
by the Board of Directors.
(b) At an annual meeting of the stockholders, only such
business shall be conducted as shall have been properly brought
before the meeting. To be properly brought before an annual
meeting, business must be: (A) specified in the notice of meeting
(or any supplement thereto) given by or at the direction of the
Board of Directors, (B) otherwise properly brought before the
meeting
<PAGE>
by or at the direction of the Board of Directors, or (C)
otherwise properly brought before the meeting by a stockholder.
For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof
in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation not later than
the close of business on the sixtieth (60th) day nor earlier than
the close of business on the ninetieth (90th) day prior to the
first anniversary of the preceding year's annual meeting; provided,
however, that in the event that no annual meeting was held in the
previous year or the date of the annual meeting has been changed by
more than thirty (30) days from the date contemplated at the time
of the previous year's proxy statement, notice by the stockholder
to be timely must be so received not earlier than the close of
business on the ninetieth (90th) day prior to such annual meeting
and not later than the close of business on the later of the
sixtieth (60th) day prior to such annual meeting or, in the event
public announcement of the date of such annual meeting is first
made by the corporation fewer than seventy (70) days prior to the
date of such annual meeting, the close of business on the tenth
(10th) day following the day on which public announcement of the
date of such meeting is first made by the corporation. A
stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting:
(i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and address, as they
appear on the corporation's books, of the stockholder proposing
such business, (iii) the class and number of shares of the
corporation which are beneficially owned by the stockholder, (iv)
any material interest of the stockholder in such business and (v)
any other information that is required to be provided by the
stockholder pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), in his capacity
as a proponent to a stockholder proposal. Notwithstanding the
foregoing, in order to include information with respect to a
stockholder proposal in the proxy statement and form of proxy for a
stockholder's meeting, stockholders must provide notice as required
by the regulations promulgated under the 1934 Act. Notwithstanding
anything in these Bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the
procedures set forth in this paragraph (b). The chairman of the
annual meeting shall, if the facts warrant, determine and declare
at the meeting that business was not properly brought before the
meeting and in accordance with the provisions of this paragraph
(b), and, if he should so determine, he shall so declare at the
meeting that any such business not properly brought before the
meeting shall not be transacted.
(c) Only persons who are confirmed in accordance with the
procedures set forth in this paragraph (c) shall be eligible for
election as directors. Nominations of persons for election to the
Board of Directors of the corporation may be made at a meeting of
stockholders by or at the direction of the Board of Directors or by
any stockholder of the corporation entitled to vote in the election
of directors at the meeting who complies with the notice procedures
set forth in this paragraph (c). Such nominations, other than
those made by or at the direction of the Board of Directors, shall
be made pursuant to timely notice in writing to the Secretary of
the corporation in accordance with the provisions of paragraph (b)
of this Section 5. Such stockholder's notice shall set forth (i)
as to each person, if any, whom the stockholder proposes to
nominate for election or re-election as a director: (A) the name,
age, business address and residence address of such person, (B) the
principal occupation or employment of such person, (c) the class
and number of shares of the corporation which are beneficially
owned by such person, (D) a description of all arrangements or
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understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant to
which the nominations are to be made by the stockholder, and (E)
any other information relating to such person that is required to
be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A
under the 1934 Act (including without limitation such person's
written consent to being named in the proxy statement, if any, as a
nominee and to serving as a director if elected); and (ii) as to
such stockholder giving notice, the information required to be
provided pursuant to paragraph (b) of this Section 5. At the
request of the Board of Directors, any person nominated by a
stockholder for election as a director shall furnish to the
Secretary of the corporation that information required to be set
forth in the stockholder's notice of nomination which pertains to
the nominee. No person shall be eligible for election as a
director of the corporation unless nominated in accordance with the
procedures set forth in this paragraph (c). The chairman of the
meeting shall, if the facts warrant, determine and declare at the
meeting that a nomination was not made in accordance with the
procedures prescribed by these Bylaws, and if he should so
determine, he shall so declare at the meeting, and the defective
nomination shall be disregarded.
(d) For purposes of this Section 5, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or comparable national news service
or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act.
Section 6. Special Meetings.
(a) Special meetings of the stockholders of the corporation
may be called, for any purpose or purposes, by (i) the Chairman of
the Board of Directors, (ii) the Chief Executive Officer, or (iii)
the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or
not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the
Board of Directors for adoption), and shall be held at such place,
on such date, and at such time as the Board of Directors, shall
determine.
(b) If a special meeting is called by any person or persons
other than the Board of Directors, the request shall be in writing,
specifying the general nature of the business proposed to be
transacted, and shall be delivered personally or sent by registered
mail or by telegraphic or other facsimile transmission to the
Chairman of the Board of Directors, the Chief Executive Officer, or
the Secretary of the corporation. No business may be transacted at
such special meeting otherwise than specified in such notice. The
Board of Directors shall determine the time and place of such
special meeting, which shall be held not less than thirty-five (35)
nor more than one hundred twenty (120) days after the date of the
receipt of the request. Upon determination of the time and place
of the meeting, the officer receiving the request shall cause
notice to be given to the stockholders entitled to vote, in
accordance with the provisions of Section 7 of these Bylaws. If
the notice is not given within sixty (60) days after the receipt of
the request, the person or persons requesting the meeting may set
the time and place of the meeting and give the notice. Nothing
contained in this paragraph (b) shall be construed as limiting,
fixing, or affecting the time when a meeting of stockholders called
by action of the Board of Directors may be held.
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<PAGE>
Section 7. Notice of Meetings. Except as otherwise provided
by law or the Articles of Incorporation, written notice of each
meeting of stockholders shall be given not less than ten (10) nor
more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting, such notice to
specify the place, date and hour and purpose or purposes of the
meeting. Notice of the time, place and purpose of any meeting of
stockholders may be waived in writing, signed by the person
entitled to notice thereof, either before or after such meeting,
and will be waived by any stockholder by his attendance thereat in
person or by proxy, except when the stockholder attends a meeting
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is
not lawfully called or convened. Any stockholder so waiving notice
of such meeting shall be bound by the proceedings of any such
meeting in all respects as if due notice thereof had been given.
Section 8. Quorum. At all meetings of stockholders, except
where otherwise provided by statute or by the Articles of
Incorporation, or by these Bylaws, the presence, in person or by
proxy duly authorized, of the holder or holders of not less than
one percent (1%) of the outstanding shares of stock entitled to
vote shall constitute a quorum for the transaction of business. In
the absence of a quorum, any meeting of stockholders may be
adjourned, from time to time, either by the chairman of the meeting
or by vote of the holders of a majority of the shares represented
thereat, but no other business shall be transacted at such meeting.
The stockholders present at a duly called or convened meeting, at
which a quorum is present, may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders
to leave less than a quorum. Except as otherwise provided by law,
the Articles of Incorporation or these Bylaws, all action taken by
the holders of a majority of the votes cast, excluding abstentions,
at any meeting at which a quorum is present shall be valid and
binding upon the corporation; provided, however, that directors
shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to
vote on the election of directors. Where a separate vote by a
class or classes or series is required, except where otherwise
provided by the statute or by the Articles of Incorporation or
these Bylaws, a majority of the outstanding shares of such class or
classes or series, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that
vote on that matter and, except where otherwise provided by the
statute or by the Articles of Incorporation or these Bylaws, the
affirmative vote of the majority (plurality, in the case of the
election of directors) of the votes cast, including abstentions, by
the holders of shares of such class or classes or series shall be
the act of such class or classes or series.
Section 9. Adjournment and Notice of Adjourned Meetings. Any
meeting of stockholders, whether annual or special, may be
adjourned from time to time either by the chairman of the meeting
or by the vote of a majority of the shares casting votes, excluding
abstentions. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting, the corporation may transact
any business which might have been transacted at the original
meeting. If the adjournment is for more than thirty (30) days or
if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
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Section 10. Voting Rights. For the purpose of
determining those stockholders entitled to vote at any meeting of
the stockholders, except as otherwise provided by law, only persons
in whose names shares stand on the stock records of the corporation
on the record date, as provided in Section 12 of these Bylaws,
shall be entitled to vote at any meeting of stockholders. Every
person entitled to vote shall have the right to do so either in
person or by an agent or agents authorized by a proxy granted in
accordance with Nevada law. An agent so appointed need not be a
stockholder. No proxy shall be voted after three (3) years from
its date of creation unless the proxy provides for a longer period.
Section 11. Joint Owners of Stock. If shares or other
securities having voting power stand of record in the names of two
(2) or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, tenants by the entirety, or
otherwise, or if two (2) or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary is
given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to
voting shall have the following effect: (a) if only one (1) votes,
his act binds all; (b) if more than one (1) votes, the act of the
majority so voting binds all; (c) if more than one (1) votes, but
the vote is evenly split on any particular matter, each faction may
vote the securities in question proportionally, or may apply to the
Nevada Court of Chancery for relief as provided in the General
Corporation Law of Nevada, Section 217(b). If the instrument filed
with the Secretary shows that any such tenancy is held in unequal
interests, a majority or even-split for the purpose of subsection
(c) shall be a majority or even-split in interest.
Section 12. List of Stockholders. The Secretary shall
prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote
at said meeting, arranged in alphabetical order, showing the
address of each stockholder and the number of shares registered in
the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not specified, at
the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole
time thereof and may be inspected by any stockholder who is
present.
Section 13. Action Without Meeting. No action shall be
taken by the stockholders except at an annual or special meeting of
stockholders called in accordance with these Bylaws, or by the
written consent of all stockholders.
Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of the
Board of Directors, or, if a Chairman has not been appointed or is
absent, the President, or, if the President is absent, a chairman
of the meeting chosen by a majority in interest of the stockholders
entitled to vote, present in person or by proxy, shall act as
chairman. The Secretary, or, in his absence, an Assistant
Secretary directed to do so by the President, shall act as
secretary of the meeting.
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(b) The Board of Directors of the corporation shall be
entitled to make such rules or regulations for the conduct of
meetings of stockholders as it shall deem necessary, appropriate or
convenient. Subject to such rules and regulations of the Board of
Directors, if any, the chairman of the meeting shall have the right
and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are
necessary, appropriate or convenient for the proper conduct of the
meeting, including, without limitation, establishing an agenda or
order of business for the meeting, rules and procedures for
maintaining order at the meeting and the safety of those present,
limitations on participation in such meeting to stockholders of
record of the corporation and their duly authorized and constituted
proxies and such other persons as the chairman shall permit,
restrictions on entry to the meeting after the time fixed for the
commencement thereof, limitations on the time allotted to questions
or comments by participants and regulation of the opening and
closing of the polls for balloting on matters which are to be voted
on by ballot. Unless and to the extent determined by the Board of
Directors or the chairman of the meeting, meetings of stockholders
shall not be required to be held in accordance with rules of
parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number and Qualification. The authorized
number of directors of the corporation shall be not less than one
(1) nor more than twelve (12) as fixed from time to time by
resolution of the Board of Directors; provided that no decrease in
the number of directors shall shorten the term of any incumbent
directors. Directors need not be stockholders unless so required
by the Articles of Incorporation. If for any cause, the directors
shall not have been elected at an annual meeting, they may be
elected as soon thereafter as convenient at a special meeting of
the stockholders called for that purpose in the manner provided in
these Bylaws.
Section 16. Powers. The powers of the corporation shall
be exercised, its business conducted and its property controlled by
the Board of Directors, except as may be otherwise provided by
statute or by the Articles of Incorporation.
Section 17. Election and Term of Office of Directors.
Members of the Board of Directors shall hold office for the terms
specified in the Articles of Incorporation, as it may be amended
from time to time, and until their successors have been elected as
provided in the Articles of Incorporation.
Section 18. Vacancies. Unless otherwise provided in the
Articles of Incorporation, any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or
other causes and any newly created directorships resulting from any
increase in the number of directors, shall unless the Board of
Directors determines by resolution that any such vacancies or newly
created directorships shall be filled by stockholder vote, be
filled only by the affirmative vote of a majority of the directors
then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of
the director for which the vacancy was created or occurred and
until such director's successor shall have been elected and
qualified. A vacancy in the Board of Directors
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shall be deemed to exist under this Bylaw in the case of the death,
removal or resignation of any director.
Section 19. Resignation. Any director may resign at any
time by delivering his written resignation to the Secretary, such
resignation to specify whether it will be effective at a particular
time, upon receipt by the Secretary or at the pleasure of the Board
of Directors. If no such specification is made, it shall be deemed
effective at the pleasure of the Board of Directors. When one or
more directors shall resign from the Board of Directors, effective
at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each
director so chosen shall hold office for the unexpired portion of
the term of the director whose place shall be vacated and until his
successor shall have been duly elected and qualified.
Section 20. Removal. Subject to the Articles of
Incorporation, any director may be removed by:
(a) the affirmative vote of the holders of a majority of the
outstanding shares of the Corporation then entitled to vote, with
or without cause; or
(b) the affirmative and unanimous vote of a majority of the
directors of the Corporation, with the exception of the vote of the
directors to be removed, with or without cause.
Section 21. Meetings.
(a) Annual Meetings. The annual meeting of the Board of
Directors shall be held immediately after the annual meeting of
stockholders and at the place where such meeting is held. No
notice of an annual meeting of the Board of Directors shall be
necessary and such meeting shall be held for the purpose of
electing officers and transacting such other business as may
lawfully come before it.
(b) Regular Meetings. Except as hereinafter otherwise
provided, regular meetings of the Board of Directors shall be held
in the office of the corporation required to be maintained pursuant
to Section 2 hereof. Unless otherwise restricted by the Articles
of Incorporation, regular meetings of the Board of Directors may
also be held at any place within or without the state of Nevada
which has been designated by resolution of the Board of Directors
or the written consent of all directors.
(c) Special Meetings. Unless otherwise restricted by the
Articles of Incorporation, special meetings of the Board of
Directors may be held at any time and place within or without the
State of Nevada whenever called by the Chairman of the Board, the
President or any two of the directors.
(d) Telephone Meetings. Any member of the Board of
Directors, or of any committee thereof, may participate in a
meeting by means of conference telephone or similar communications
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equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting by such
means shall constitute presence in person at such meeting.
(e) Notice of Meetings. Notice of the time and place of all
special meetings of the Board of Directors shall be orally or in
writing, by telephone, facsimile, telegraph or telex, during normal
business hours, at least twenty-four (24) hours before the date and
time of the meeting, or sent in writing to each director by first
class mail, charges prepaid, at least three (3) days before the
date of the meeting. Notice of any meeting may be waived in
writing at any time before or after the meeting and will be waived
by any director by attendance thereat, except when the director
attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.
(f) Waiver of Notice. The transaction of all business at any
meeting of the Board of Directors, or any committee thereof,
however called or noticed, or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if
a quorum be present and if, either before or after the meeting,
each of the directors not present shall sign a written waiver of
notice. All such waivers shall be filed with the corporate records
or made a part of the minutes of the meeting.
Section 22. Quorum and Voting.
(a) Unless the Articles of Incorporation requires a greater
number and except with respect to indemnification questions arising
under Section 43 hereof, for which a quorum shall be one-third of
the exact number of directors fixed from time to time in accordance
with the Articles of Incorporation, a quorum of the Board of
Directors shall consist of a majority of the exact number of
directors fixed from time to time by the Board of Directors in
accordance with the Articles of Incorporation provided, however, at
any meeting whether a quorum be present or otherwise, a majority of
the directors present may adjourn from time to time until the time
fixed for the next regular meeting of the Board of Directors,
without notice other than by announcement at the meeting.
(b) At each meeting of the Board of Directors at which a
quorum is present, all questions and business shall be determined
by the affirmative vote of a majority of the directors present,
unless a different vote be required by law, the Articles of
Incorporation or these Bylaws.
Section 23. Action Without Meeting. Unless otherwise
restricted by the Articles of Incorporation or these Bylaws, any
action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without
a meeting, if all members of the Board of Directors or committee,
as the case may be, consent thereto in writing, and such writing or
writings are filed with the minutes of proceedings of the Board of
Directors or committee.
Section 24. Fees and Compensation. Directors shall be
entitled to such compensation for their services as may be approved
by the Board of Directors, including, if so approved, by resolution
of the Board of Directors, a fixed sum and expenses of attendance,
if any, for attendance at each regular or special meeting of the
Board of Directors and at any meeting of a committee of
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the Board of Directors. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other
capacity as an officer, agent, employee, or otherwise and receiving
compensation therefor.
Section 25. Committees.
(a) Executive Committee. The Board of Directors may by
resolution passed by a majority of the whole Board of Directors
appoint an Executive Committee to consist of one (1) or more
members of the Board of Directors. The Executive Committee, to the
extent permitted by law and provided in the resolution of the Board
of Directors shall have and may exercise all the powers and
authority of the Board of Directors in the management of the
business and affairs of the corporation, including without
limitation the power or authority to declare a dividend, to
authorize the issuance of stock and to adopt a certificate of
ownership and merger, and may authorize the seal of the corporation
to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to
amending the Articles of Incorporation (except that a committee
may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board
of Directors fix the designations and any of the preferences or
rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the
conversion into, or the exchange of such shares for, shares of any
other class or classes or any other series of the same or any other
class or classes of stock of the corporation or fix the number of
shares of any series of stock or authorize the increase or decrease
of the shares of any series), adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property
and assets, recommending to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or amending the
bylaws of the corporation.
(b) Other Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors,
from time to time appoint such other committees as may be permitted
by law. Such other committees appointed by the Board of Directors
shall consist of one (1) or more members of the Board of Directors
and shall have such powers and perform such duties as may be
prescribed by the resolution or resolutions creating such
committees, but in no event shall such committee have the powers
denied to the Executive Committee in these Bylaws.
(c) Term. Each member of a committee of the Board of
Directors shall serve a term on the committee coexistent with such
member's term on the Board of Directors. The Board of Directors,
subject to the provisions of subsections (a) or (b) of this Bylaw
may at any time increase or decrease the number of members of a
committee or terminate the existence of a committee. The
membership of a committee member shall terminate on the date of his
death or voluntary resignation from the committee or from the Board
of Directors. The Board of Directors may at any time for any
reason remove any individual committee member and the Board of
Directors may fill any committee vacancy created by death,
resignation, removal or increase in the number of members of the
committee. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee,
and, in addition, in the absence or disqualification of any member
of a committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not
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he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place
of any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise
provide, regular meetings of the Executive Committee or any other
committee appointed pursuant to this Section 25 shall be held at
such times and places as are determined by the Board of Directors,
or by any such committee, and when notice thereof has been given to
each member of such committee, no further notice of such regular
meetings need be given thereafter. Special meetings of any such
committee may be held at any place which has been determined from
time to time by such committee, and may be called by any director
who is a member of such committee, upon written notice to the
members of such committee of the time and place of such special
meeting given in the manner provided for the giving of written
notice to members of the Board of Directors of the time and place
of special meetings of the Board of Directors. Notice of any
special meeting of any committee may be waived in writing at any
time before or after the meeting and will be waived by any director
by attendance thereat, except when the director attends such
special meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. A majority
of the authorized number of members of any such committee shall
constitute a quorum for the transaction of business, and the act of
a majority of those present at any meeting at which a quorum is
present shall be the act of such committee.
Section 26. Organization. At every meeting of the
directors, the Chairman of the Board of Directors, or, if a
Chairman has not been appointed or is absent, the President, or if
the President is absent, the most senior Vice President, or, in the
absence of any such officer, a chairman of the meeting chosen by a
majority of the directors present, shall preside over the meeting.
The Secretary, or in his absence, an Assistant Secretary directed
to do so by the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 27. Officers Designated. The officers of the
corporation shall include, if and when designated by the Board of
Directors, the Chairman of the Board of Directors, the Chief
Executive Officer, the President, one or more Vice Presidents, the
Secretary, the Chief Financial Officer, the Treasurer, the
Controller, all of whom shall be elected at the annual
organizational meeting of the Board of Direction. The Board of
Directors may also appoint one or more Assistant Secretaries,
Assistant Treasurers, Assistant Controllers and such other officers
and agents with such powers and duties as it shall deem necessary.
The Board of Directors may assign such additional titles to one or
more of the officers as it shall deem appropriate. Any one person
may hold any number of offices of the corporation at any one time
unless specifically prohibited therefrom by law. The salaries and
other compensation of the officers of the corporation shall be
fixed by or in the manner designated by the Board of Directors.
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Section 28. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure
of the Board of Directors and until their successors shall have
been duly elected and qualified, unless sooner removed. Any
officer elected or appointed by the Board of Directors may be
removed at any time by the Board of Directors. If the office of
any officer becomes vacant for any reason, the vacancy may be
filled by the Board of Directors.
(b) Duties of Chairman of the Board of Directors. The
Chairman of the Board of Directors, when present, shall preside at
all meetings of the stockholders and the Board of Directors. The
Chairman of the Board of Directors shall perform other duties
commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall
designate from time to time. If there is no President, then the
Chairman of the Board of Directors shall also serve as the Chief
Executive Officer of the corporation and shall have the powers and
duties prescribed in paragraph (c) of this Section 28.
(c) Duties of President. The President shall preside at all
meetings of the stockholders and at all meetings of the Board of
Directors, unless the Chairman of the Board of Directors has been
appointed and is present. Unless some other officer has been
elected Chief Executive Officer of the corporation, the President
shall be the chief executive officer of the corporation and shall,
subject to the control of the Board of Directors, have general
supervision, direction and control of the business and officers of
the corporation. The President shall perform other duties commonly
incident to his office and shall also perform such other duties and
have such other powers as the Board of Directors shall designate
from time to time.
(d) Duties of Vice Presidents. The Vice Presidents may
assume and perform the duties of the President in the absence or
disability of the President or whenever the office of President is
vacant. The Vice Presidents shall perform other duties commonly
incident to their office and shall also perform such other duties
and have such other powers as the Board of Directors or the
President shall designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all
meetings of the stockholders and of the Board of Directors and
shall record all acts and proceedings thereof in the minute book of
the corporation. The Secretary shall give notice in conformity
with these Bylaws of all meetings of the stockholders and of all
meetings of the Board of Directors and any committee thereof
requiring notice. The Secretary shall perform all other duties
given him in these Bylaws and other duties commonly incident to his
office and shall also perform such other duties and have such other
powers as the Board of Directors shall designate from time to time.
The President may direct any Assistant Secretary to assume and
perform the duties of the Secretary in the absence or disability of
the Secretary, and each Assistant Secretary shall perform other
duties commonly incident to his office and shall also perform such
other duties and have such other powers as the Board of Directors
or the President shall designate from time to time.
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(f) Duties of Chief Financial Officer. The Chief Financial
Officer shall keep or cause to be kept the books of account of the
corporation in a thorough and proper manner and shall render
statements of the financial affairs of the corporation in such form
and as often as required by the Board of Directors or the
President. The Chief Financial Officer, subject to the order of
the Board of Directors, shall have the custody of all funds and
securities of the corporation. The Chief Financial Officer shall
perform other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board
of Directors or the President shall designate from time to time.
The President may direct the Treasurer or any Assistant Treasurer,
or the Controller or any Assistant Controller to assume and perform
the duties of the Chief Financial Officer in the absence or
disability of the Chief Financial Officer, and each Treasurer and
Assistant Treasurer and each Controller and Assistant Controller
shall perform other duties commonly incident to his office and
shall also perform such other duties and have such other powers as
the Board of Directors or the President shall designate from time
to time.
Section 29. Delegation of Authority. The Board of
Directors may from time to time delegate the powers or duties of
any officer to any other officer or agent, notwithstanding any
provision hereof.
Section 30. Resignations. Any officer may resign at any
time by giving written notice to the Board of Directors or to the
President or to the Secretary. Any such resignation shall be
effective when received by the person or persons to whom such
notice is given, unless a later time is specified therein, in which
event the resignation shall become effective at such later time.
Unless otherwise specified in such notice, the acceptance of any
such resignation shall not be necessary to make it effective. Any
resignation shall be without prejudice to the rights, if any, of
the corporation under any contract with the resigning officer.
Section 31. Removal. Any officer may be removed from
office at any time, either with or without cause, by the
affirmative vote of a majority of the directors in office at the
time, or by the unanimous written consent of the directors in
office at the time, or by any committee or superior officers upon
whom such power of removal may have been conferred by the Board of
Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 32. Execution of Corporate Instrument. The Board
of Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or
persons, to execute on behalf of the corporation any corporate
instrument or document, or to sign on behalf of the corporation the
corporate name without limitation, or to enter into contracts on
behalf of the corporation, except where otherwise provided by law
or these Bylaws, and such execution or signature shall be binding
upon the corporation.
Unless otherwise specifically determined by the Board of
Directors or otherwise required by law, promissory notes, deeds of
trust, mortgages and other evidences of indebtedness of the
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corporation, and other corporate instruments or documents requiring
the corporate seal, and certificates of shares of stock owned by
the corporation, shall be executed, signed or endorsed by the
Chairman of the Board of Directors, or the President or any Vice
President, and by the Secretary or Treasurer or any Assistant
Secretary or Assistant Treasurer. All other instruments and
documents requiting the corporate signature, but not requiring the
corporate seal, may be executed as aforesaid or in such other
manner as may be directed by the Board of Directors.
All checks and drafts drawn on banks or other depositaries on
funds to the credit of the corporation or in special accounts of
the corporation shall be signed by such person .or persons as the
Board of Directors shall authorize so to do.
Unless authorized or ratified by the Board of Directors or
within the agency power of an officer, no officer, agent or
employee shall have any power or authority to bind the corporation
by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
Section 33. Voting of Securities Owned by the
Corporation. All stock and other securities of other corporations
owned or held by the corporation for itself, or for other parties
in any capacity, shall be voted, and all proxies with respect
thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such
authorization, by the Chairman of the Board of Directors, the Chief
Executive Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 34. Form and Execution of Certificates.
Certificates for the shares of stock of the corporation shall be in
such form as is consistent with the Articles of Incorporation and
applicable law. Every holder of stock in the corporation shall be
entitled to have a certificate signed by or in the name of the
corporation by the Chairman of the Board of Directors, or the
President or any Vice President and by the Treasurer or Assistant
Treasurer or the Secretary or Assistant Secretary, certifying the
number of shares owned by him in the corporation. Any or all of
the signatures on the certificate may be facsimiles. In case any
officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued with the same effect as if
he were such officer, transfer agent, or registrar at the date of
issue. Each certificate shall state upon the face or back thereof,
in full or in summary, all of the powers, designations,
preferences, and rights, and the limitations or restrictions of the
shares authorized to be issued or shall, except as otherwise
required by law, set forth on the face or back a statement that the
corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative,
participating, optional, or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Within a
reasonable time after the issuance or transfer of uncertificated
stock, the corporation shall send to the registered owner thereof a
written notice containing the information required to be
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set forth or stated on certificates pursuant to this section or otherwise
required by law or with respect to this section a statement that
the corporation will furnish without charge to each stockholder who
so requests the powers, designations, preferences and relative
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Except as
otherwise expressly provided by law, the rights and obligations of
the holders of certificates representing stock of the same class
and series shall be identical.
Section 35. Lost Certificates. A new certificate or
certificates shall be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have
been lost, stolen, or destroyed, upon the making of an affidavit of
that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. The corporation may require, as a
condition precedent to the issuance of a new certificate or
certificates, the owner of such lost, stolen, or destroyed
certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require or to give
the corporation a surety bond in such form and amount as it may
direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been
lost, stolen, or destroyed.
Section 36. Transfers.
(a) Transfers of record of shares of stock of the corporation
shall be made only upon its books by the holders thereof, in person
or by attorney duly authorized, and upon the surrender of a
properly endorsed certificate or certificates for a like number of
shares.
(b) The corporation shall have power to enter into and
perform any agreement with any number of stockholders of any one or
more classes of stock of the corporation to restrict the transfer
of shares of stock of the corporation of any one or more classes
owned by such stockholders in any manner not prohibited by the
General Corporation Law of Nevada.
Section 37. Fixing Record Dates.
(a) In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may
fix, in advance, a record date, which record date shall not precede
the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date shall not
be more than sixty (60) nor less than ten (10) days before the date
of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice
is given, or if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix
a new record date for the adjourned meeting.
(b) In order that the corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose
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of any other lawful action, the Board of Directors may fix, in advance,
a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date
shall be not more than sixty (60) days prior to such action. If no
record date is filed, the record date for determining stockholders
for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating
thereto.
Section 38. Registered Stockholders. The corporation shall
be entitled to recognize the exclusive right of a person registered
on its books as the owner of shares to receive dividends, and to
vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on
the part of any other person whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws
of Nevada.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 39. Execution of Other Securities. All bonds,
debentures and other corporate securities of the corporation, other
than stock certificates (covered in Section 34), may be signed by
the Chairman of the Board of Directors, the President or any Vice
President, or such other person as may be authorized by the Board
of Directors, and the corporate seal impressed thereon or a
facsimile of such seal imprinted thereon and attested by the
signature of the Secretary or an Assistant Secretary, or the Chief
Financial Officer or Treasurer or an Assistant Treasurer; provided,
however, that where any such bond, debenture or other corporate
security shall be authenticated by the manual signature, or where
permissible facsimile signature, of a trustee under an indenture
pursuant to which such bond, debenture or other corporate security
shall be issued, the signatures of the persons signing and
attesting the corporate seal on such bond, debenture or other
corporate security may be the imprinted facsimile of the signatures
of such persons. Interest coupons appertaining to any such bond,
debenture or other corporate security, authenticated by a trustee
as aforesaid, shall be signed by the Treasurer or an Assistant
Treasurer of the corporation or such other person as may be
authorized by the Board of Directors, or bear imprinted thereon the
facsimile signature of such person. In case any officer who shall
have signed or attested any bond, debenture or other corporate
security, or whose facsimile signature shall appear thereon or on
any such interest coupon, shall have ceased to be such officer
before the bond, debenture or other corporate security so signed or
attested shall have been delivered, such bond, debenture or other
corporate security nevertheless may be adopted by the corporation
and issued and delivered as though the person who signed the same
or whose facsimile signature shall have been used thereon had not
ceased to be such officer of the corporation.
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ARTICLE IX
DIVIDENDS
Section 40. Declaration of Dividends. Dividends upon the
capital stock of the corporation, subject to the provisions of the
Articles of Incorporation, if any, may be declared by the Board of
Directors pursuant to law at any regular or special meeting.
Dividends may be paid in cash, in property, or in shares of the
capital stock, subject to the provisions of the Articles of
Incorporation.
Section 41. Dividend Reserve. Before payment of any
dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the Board
of Directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property
of the corporation, or for such other purpose as the Board of
Directors shall think conducive to the interests of the
corporation, and the Board of Directors may modify or abolish any
such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 42. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 43. Indemnification of Directors, Executive Officers,
Other Officers, Employees and Other Agents.
(a) Directors Officers. The corporation shall indemnify its
directors and officers to the fullest extent not prohibited by the
Nevada General Corporation Law; provided, however, that the
corporation may modify the extent of such indemnification by
individual contracts with its directors and officers; and,
provided, further, that the corporation shall not be required to
indemnify any director or officer in connection with any proceeding
(or part thereof) initiated by such person unless (i) such
indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board of Directors of the
corporation, (iii) such indemnification is provided by the
corporation, in its sole discretion, pursuant to the powers vested
in the corporation under the Nevada General Corporation Law or (iv)
such indemnification is required to be made under subsection (d).
(b) Employees and Other Agents. The corporation shall have
power to indemnify its employees and other agents as set forth in
the Nevada General Corporation Law.
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(c) Expense. The corporation shall advance to any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director or officer, of the
corporation, or is or was serving at the request of the corporation
as a director or executive officer of another corporation,
partnership, joint venture, trust or other enterprise, prior to the
final disposition of the proceeding, promptly following request
therefor, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by
or on behalf of such person to repay said mounts if it should be
determined ultimately that such person is not entitled to be
indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined
pursuant to paragraph (e) of this Bylaw, no advance shall be made
by the corporation to an officer of the corporation (except by
reason of the fact that such officer is or was a director of the
corporation in which event this paragraph shall not apply) in any
action, suit or proceeding, whether civil, criminal, administrative
or investigative, if a determination is reasonably and promptly
made (i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or
(ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, that the facts known to the decision-
making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in
a manner that such person did not believe to be in or not opposed
to the best interests of the corporation.
(d) Enforcement. Without the necessity of entering into an
express contract, all rights to indemnification and advances to
directors and officers under this Bylaw shall be deemed to be
contractual rights and be effective to the same extent and as if
provided for in a contract between the corporation and the director
or officer. Any right to indemnification or advances granted by
this Bylaw to a director or officer shall be enforceable by or on
behalf of the person holding such right in any court of competent
jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim
is made within ninety (90) days of request therefor. The claimant
in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting his
claim. In connection with any claim for indemnification, the
corporation shall be entitled to raise as a defense to any such
action that the claimant has not met the standard of conduct that
make it permissible under the Nevada General Corporation Law for
the corporation to indemnify the claimant for the amount claimed.
In connection with any claim by an officer of the corporation
(except in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such
officer is or was a director of the corporation) for advances, the
corporation shall be entitled to raise a defense as to any such
action clear and convincing evidence that such person acted in bad
faith or in a manner that such person did not believe to be in or
not opposed in the best interests of the corporation, or with
respect to any criminal action or proceeding that such person acted
without reasonable cause to believe that his conduct was lawful.
Neither the failure of the corporation (including its
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Board of Directors, independent legal counsel or its stockholders) to
have made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in
the Nevada General Corporation Law, nor an actual determination by
the corporation (including its Board of Directors, independent
legal counsel or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the
action or create a presumption that claimant has not met the
applicable standard of conduct. In any suit brought by a director
or officer to enforce a right to indemnification or to an
advancement of expenses hereunder, the burden of proving that the
director or officer is not entitled to be indemnified, or to such
advancement of expenses, under this Article XI or otherwise shall
be on the corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any
person by this Bylaw shall not be exclusive of any other right
which such person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, Bylaws, agreement, vote
of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another
capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting
indemnification and advances, to the fullest extent not prohibited
by the Nevada General Corporation Law.
(f) Survival of Rights. The rights conferred on any person
by this Bylaw shall continue as to a person who has ceased to be a
director, officer, employee or other agent and shall inure to the
benefit of the heirs, executors and administrators of such a
person.
(g) Insurance. To the fullest extent permitted by the Nevada
General Corporation Law, the corporation, upon approval by the
Board of Directors, may purchase insurance on behalf of any person
required or permitted to be indemnified pursuant to this Bylaw.
(h) Amendments. Any repeal or modification of this Bylaw
shall only be prospective and shall not affect the rights under
this Bylaw in effect at the time of the alleged occurrence of any
action or omission to act that is the cause of any proceeding
against any agent of the corporation.
(i) Saving Clause. If this Bylaw or any portion hereof shall
be invalidated on any ground by any court of competent
jurisdiction, then the corporation shall nevertheless indemnify
each director and officer to the full extent not prohibited by any
applicable portion of this Bylaw that shall not have been
invalidated, or by any other applicable law.
(j) Certain Definitions. For the purposes of this Bylaw, the
following definitions shall apply:
(i) The term "proceeding" shall be broadly construed and
shall include, without limitation, the investigation,
preparation, prosecution, defense, settlement, arbitration and
appeal of, and the giving of testimony in, any threatened,
pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative.
(ii) The term "expenses" shall be broadly construed and
shall include, without limitation, court costs, attorneys'
fees, witness fees, fines, amounts paid in settlement or
judgment and any other costs and expenses of any nature or
kind incurred in connection with any proceeding.
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(iii) The term the "corporation" shall include, in
addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so
that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director,
officer, employee or agent or another corporation,
partnership, joint venture, trust or other enterprise, shall
stand in the same position under the provisions of this Bylaw
with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its
separate existence had continued.
(iv) References to a "director," "executive officer,"
"officer," "employee," or "agent" of the corporation shall
include, without limitation, situations where such person is
serving at the request of the corporation as, respectively, a
director, executive officer, officer, employee, trustee or
agent of another corporation, partnership, joint venture,
trust or other enterprise.
(v) References to "other enterprises" shall include
employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee
benefit plan, its participants, or beneficiaries; and a person
who acted in good faith and in a manner he reasonably believed
to be in the interest of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation"
as referred to in this Bylaw.
ARTICLE XII
NOTICES
Section 44. Notices.
(a) Notice to Stockholders. Whenever, under any provisions
of these Bylaws, notice is required to be given to any stockholder,
it shall be given in writing, timely and duly deposited in the
United States mail, postage prepaid, and addressed to his last
known post office address as shown by the stock record of the
corporation or its transfer agent.
(b) Notice to directors. Any notice required to be given to
any director may be given by the method stated in subsection (a),
or by facsimile, telex or telegram, except that such notice other
than one which is delivered personally shall be sent to such
address as such director shall have filed in writing with the
Secretary, or, in the absence of such filing, to the last known
post office address of such director.
19
<PAGE>
(c) Affidavit of Mailing. An affidavit of mailing, executed
by a duly authorized and competent employee of the corporation or
its transfer agent appointed with respect to the class of stock
affected, specifying the name and address or the names and
addresses of the stockholder or stockholders, or director or
directors, to whom any such notice or notices was or were given,
and the time and method of giving the same, shall in the absence of
fraud, be prima facie evidence of the facts therein contained.
(d) Time Notices Deemed Given. All notices given by mail, as
above provided, shall be deemed to have been given as at the time
of mailing, and all notices given by facsimile, telex or telegram
shall be deemed to have been given as of the sending time recorded
at time of transmission.
(e) Methods of Notice. It shall not be necessary that the
same method of giving notice be employed in respect of all
directors, but one permissible method may be employed in respect of
any one or more, and any other permissible method or methods may be
employed in respect of any other or others.
(f) Failure to Receive Notice. The period or limitation of
time within which any stockholder may exercise any option or right,
or enjoy any privilege or benefit, or be required to act, or within
which any director may exercise any power or right, or enjoy any
privilege, pursuant to any notice sent him ill the manner above
provided, shall not be affected or extended in any manner by the
failure of such stockholder or such director to receive such
notice.
(g) Notice to Person with Whom Communication Is Unlawful.
Whenever notice is required to be given, under any provision of law
or of the Articles of Incorporation or Bylaws of the corporation,
to any person with whom communication is unlawful, the giving of
such notice to such person shall not be require and there shall be
no duty to apply to any governmental authority or agency for a
license or permit to give such notice to such person. Any action
or meeting which shall be taken or held without notice to any such
person with whom communication is unlawful shall have the same
force and effect as if such notice had been duly given. In the
event that the action taken by the corporation is such as to
require the filing of a certificate under any provision of the
Nevada General Corporation Law, the certificate shall state, if
such is the fact and if notice is required, that notice was given
to all persons entitled to receive notice except such persons with
whom communication is unlawful.
(h) Notice to Person with Undeliverable Address. Whenever
notice is required to be given, under any provision of law or the
Articles of Incorporation or Bylaws of the corporation, to any
stockholder to whom (i) notice of two consecutive annual meetings,
and all notices of meetings or of the taking of action by written
consent without a meeting to such person during the period between
such two consecutive annual meetings, or (ii) all, and at least
two, payments (if sent by first class mail) of dividends or
interest on securities during a twelve-month period, have been
mailed addressed to such person at his address as shown on the
records of the corporation and have been returned undeliverable,
the giving of such notice to such person shall not be required.
Any action or meeting which shall be taken or held without notice
to such person shall have the same force and effect as if such
notice had been duly given. If any such person shall deliver to
the corporation a written notice setting forth his then current
address, the requirement that notice be given to such
20
<PAGE>
person shall be reinstated. In the event that the action taken by the
corporation is such as to require the filing of a certificate under
any provision of the Nevada General Corporation Law, the
certificate need not state that notice was not given to persons to
whom notice was not required to be given pursuant to this
paragraph.
ARTICLE XII
AMENDMENTS
Section 45. Amendments.
The Board of Directors shall have the power to adopt, amend,
or repeal Bylaws as set forth in the Articles of Incorporation.
ARTICLE XIV
LOANS TO OFFICERS
Section 46. Loans to Officers. The corporation may lend
money to, or guarantee any obligation of, or otherwise assist any
officer or other employee of the corporation or of its
subsidiaries, including any officer or employee who is a Director
of the corporation or its subsidiaries, whenever, in the judgment
of the Board of Directors, such loan, guarantee or assistance may
reasonably be expected to benefit the corporation. The loan,
guarantee or other assistance may be with or without interest and
may be unsecured, or secured in such manner as the Board of
Directors shall approve, including, without limitation, a pledge of
shares of stock of the corporation. Nothing in these Bylaws shall
be deemed to deny, limit or restrict the powers of guaranty or
warranty of the corporation at common law or under any statute.
Declared as the Amended By-Laws of GREEN FUSION CORPORATION as of
the 19th day of October, 1998.
/s/ Logan Anderson
Signature of Officer: ________________________
Name of Officer: Logan Anderson
Position of Officer: President and Director
21
<PAGE>
OPTION AGREEMENT
----------------
THIS AGREEMENT made as of the 6 day of April, 1998
--- -----
BETWEEN:
Michael Lederhouse, of P.O. Box 202, Air
Ronge, Saskatchewan, S0J 3G0
("Lederhouse")
OF THE FIRST PART
AND:
Carl Service, of 34 Moxon Crescent, Saskatoon,
Saskatchewan
("Service")
OF THE SECOND PART
AND:
Green Fusion Corp., a Nevada corporation with
a registered office at Suite B-169, 7373 N.
Scottsdale Road, Scottsdale, Arizona, U.S.A.
85253
(the "Optionee")
OF THE THIRD PART
WHEREAS:
A. Lederhouse is the owner of certain mineral claims located
in the Province of Saskatchewan;
B. The Optionors have agreed to grant an exclusive option to
the Optionee to acquire an interest in and to the Property, subject
to a Royalty, on the terms and conditions hereinafter set forth;
<PAGE>
-2-
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
sum of $1.00 now paid by the Optionee to the Optionors (the receipt
of which is hereby acknowledged), the parties agree as follows:
DEFINITIONS
- -----------
1. For the purposes of this Agreement the following words
and phrases shall have the following meanings, namely:
(a) "Commencement of Commercial Production" means:
(i) if a mill is located on the Property, the last
day of a period of 40 consecutive days in which,
for not less than 30 days, the mill processed ore
from the Property at 60% of its rated
concentrating capacity; or
(ii) if a mill is not located on the Property, the
last day of a period of 30 consecutive days
during which ore has been shipped from the
Property on a reasonably regular basis for the
purpose of earning revenues,
but any period of time during which ore or concentrate is
shipped from the Property for testing purposes or during
which milling operations are undertaken as initial tune-
up, shall not be taken into account in determining the
date of Commencement of Commercial Production;
(b) "Option" means the option to acquire a 100% undivided
interest in and to the Property as provided in this
Agreement;
(c) "Option Period" means the period from the date of this
Agreement to and including the date of exercise or
termination of the Option;
(d) "Optionors" means Lederhouse and Service;
(e) "Property" means the mineral claims described in Schedule
"A" hereto including any replacement or successor claims,
and all mining leases and other mining interests derived
from any such claims. Any reference herein to any
mineral claim comprising the Property includes any
mineral leases or other interests into which such mineral
claim may have been converted;
(f) "Property Rights" means all licenses, permits, easements,
rights-of-way, certificates and other approvals obtained
by either of the parties either before or after the date
of this Agreement and necessary for the exploration of
the Property, or for the purpose of placing the Property
into production or continuing production therefrom;
(g) "Royalty" means the amount of royalty from time to time
payable to Service hereunder and as defined in Schedule
"B" attached hereto.
<PAGE>
-3-
(h) "Shares" means the 50,000 common shares in the capital of
the Optionee to be issued to the Optionor pursuant to the
exercise of the Option.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONORS
- ----------------------------------------------------------
2. (a) The Optionors represent and warrant to and covenant with
the Optionee that:
(i) the Optionors are legally entitled to hold the
Property and the Property Rights and will remain
so entitled until the interest of the Optionors
in the Property which is subject to the Option
has been duly transferred to the Optionee as
contemplated hereby;
(ii) Lederhouse is, and at the time of transfer to the
Optionee of an interest in the mineral claims
comprising the Property pursuant to the exercise
of the Option, will be the recorded holder of and
Service is, and at the time of transfer to the
Optionee of an interest in the mineral claims
comprising the Property pursuant to the exercise
of the Option, will be the beneficial owner of,
all of the mineral claims comprising the Property
free and clear of all liens, charges and claims
of any other party, except as noted on Schedule
"A", and no taxes or rentals are or will be due
in respect of any of the mineral claims;
(iii) Lederhouse holds all interest in the Property in
trust for Service and holds no beneficial
interest in the mineral claims comprising the
Property;
(iv) the mineral claims comprising the Property have,
to the best of the Optionors' knowledge and
belief, been duly and validly located and
recorded pursuant to the laws of the jurisdiction
in which the Property is situate and, except as
specified in Schedule "A" and accepted by the
Optionee, are in good standing with respect to
all filings, fees, taxes, assessments, work
commitments or other conditions on the date
hereof and until the dates of expiry of the
claims listed in Schedule "A";
(v) there are no adverse claims or challenges against
or to the ownership of or title to any of the
mineral claims comprising the Property, nor to
the knowledge of the Optionors is there any basis
therefor, and there are no outstanding agreements
or options to acquire or purchase the Property or
any portion thereof, and no person other than the
Optionors, pursuant to the provisions hereof, has
any royalty or other interest whatsoever in
production from any of the mineral claims
comprising the Property other than as set out in
Schedule "A";
(vi) no proceedings are pending for, and the Optionors
are unaware of any basis for the institution of
any proceedings leading to the placing of the
<PAGE>
-4-
Optionors in bankruptcy or subject to any other
laws governing the affairs of insolvent persons;
(b) The representations and warranties contained in this
section are provided for the exclusive benefit of the
Optionee, and a breach of any one or more thereof may be
waived by the Optionee in whole or in part at any time
without prejudice to its rights in respect of any other
breach of the same or any other representation or
warranty, and the representations and warranties
contained in this section shall survive the execution of
this Agreement and of any transfers, assignments, deeds
or further documents respecting the Property.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONEE
- ---------------------------------------------------------
3. (a) The Optionee represents and warrants to and covenants
with the Optionors that:
(i) it has been duly incorporated, amalgamated or
continued, validly exists and is in good standing
under the laws of the Optionee's state of
residence;
(ii) it has duly obtained all corporate authorizations
for the execution of this Agreement and for the
performance of this Agreement by it, and the
consummation of the transactions herein
contemplated will not conflict with or result in
any breach of any covenants or agreements
contained in, or constitute a default under, or
result in the creation of any encumbrance under
the provisions of the Articles or other
constating documents of the Optionee or any
shareholders' or directors' resolution,
indenture, agreement or other instrument
whatsoever to which the Optionee is a party or by
which it is bound or to which it or the Property
may be subject;
(iii) no proceedings are pending for, and the Optionee
is unaware of any basis for the institution of
any proceedings leading to, the dissolution or
winding up of the Optionee or the placing of the
Optionee in bankruptcy or subject to any other
laws governing the affairs of insolvent
corporations;
(iv) the Shares will, at the time of delivery to
Service, be duly authorized and validly allotted
and issued as fully paid and non-assessable
shares of the Company free of any liens, charges
or encumbrances;
(b) The representations and warranties contained in this
section are provided for the exclusive benefit of the
Optionors and a breach of any one or more thereof may be
waived by the Optionors in whole or in part at any time
without prejudice to its rights in respect of any other
breach of the same or any other representation or
warranty,
<PAGE>
-5-
and the representations and warranties
contained in this section shall survive the execution
hereof.
GRANT AND EXERCISE OF OPTION
- ----------------------------
4. (a) The Optionors hereby grant to the Optionee the sole and
exclusive right and option to acquire a 100% undivided
interest in and to the Property free and clear of all
charges, encumbrances and claims, except for those set
out in Schedule "A" and the Royalty.
(b) The Option shall be exercised by the Optionee:
(i) paying Service $6,000 on the execution of this
Agreement, the receipt of which is hereby
acknowledged by the Optionor;
(ii) paying Service $12,000 as follows:
A. $6,000 on or before the first anniversary of
the date of this Agreement; and
B. an additional $6,000 on or before the second
anniversary of the date of this Agreement.
(iii) allotting and issuing to Service, as fully paid
and non-assessable, the Shares forthwith after
the execution of this Agreement.
(c) If and when the Option has been exercised, a 100%
undivided right, title and interest in and to the
Property shall vest in the Optionee free and clear of all
charges, encumbrances and claims, except for the
obligation of the Optionee hereunder to pay Service the
Royalty.
TRANSFER OF PROPERTY
- --------------------
5. (a) Concurrently with the execution of this Agreement, the
Optionors shall deliver to the Optionee duly executed
transfers of the appropriate interest in the Property
which shall be acquired by the Optionee upon exercise of
the Option.
(b) The Optionee shall be entitled to record such transfers
at its own cost with the appropriate government office to
effect legal transfer of such interest in the Property
into the name of the Optionee, provided that the Optionee
shall hold such interest in the Property subject to the
terms of this Agreement, it being understood that the
transfer of such legal title to the Optionee prior to the
exercise of the Option is for administrative convenience
only.
<PAGE>
-6-
ESCROW AGREEMENT
- ----------------
6. The Company and Service agree that they shall forthwith
upon the execution this
agreement to enter into, and the Shares shall be subject to, an
Escrow Agreement on the terms and conditions required by the
Saskatchewan Securities Commission, a copy of which is attached
hereto as Schedule "C".
RIGHT OF ENTRY
- --------------
7. Throughout the Option Period the directors and officers
of the Optionee and its servants, agents, employees and independent
contractors, shall have the sole and exclusive right in respect of
the Property to:
1. enter thereon;
2. have exclusive and quiet possession thereof;
3. do such prospecting, exploration, development and other
mining work thereon and thereunder as the Optionee in its
sole discretion may determine advisable;
4. bring upon and erect upon the Property such buildings,
plant, machinery and equipment as the Optionee may deem
advisable; and
5. remove therefrom and dispose of reasonable quantities of
ores, minerals and metals for the purposes of obtaining
assays or making other tests.
OBLIGATIONS OF THE OPTIONEE DURING OPTION PERIOD
- ------------------------------------------------
7. During the Option Period the Optionee shall:
(a) maintain in good standing those mineral claims comprising
the Property by the doing and filing of assessment work
or the making of payments in lieu thereof, by the payment
of taxes and rentals, and the performance of all other
actions which may be necessary in that regard and in
order to keep such mineral claims free and clear of all
liens and other charges arising from the Optionee's
activities thereon except those at the time contested in
good faith by the Optionee;
(b) record all exploration work carried out on the Property
by the Optionee as assessment work;
(c) permit the directors, officers, employees and designated
consultants of the Optionors, at their own risk and
expense, access to the Property at all reasonable times,
and the Optionors agree to indemnify the Optionee against
and to save it harmless from all costs, claims,
liabilities and expenses that the Optionee may incur or
suffer as a result
<PAGE>
-7-
of any injury (including injury causing death) to any
director, officer, employee or designated consultant of the
Optionors while on the Property;
(d) do all work on the Property in a good and workmanlike
fashion and in accordance with all applicable laws,
regulations, orders and ordinances of any governmental
authority;
(e) indemnify and save the Optionors harmless in respect of
any and all costs, claims, liabilities and expenses
arising out of the Optionee's activities on the Property,
but the Optionee shall incur no obligation hereunder in
respect of claims arising or damages suffered after
termination of the Option if upon termination of the
Option any workings on or improvements to the Property
made by the Optionee are left in a safe condition;
(f) permit the Optionors, at their own expense, reasonable
access to the results of the work done on the Property
during the last completed calendar year;
(g) deliver to the Optionors, forthwith upon receipt thereof,
copies of all reports, maps, assay results and other
technical data compiled by or prepared at the direction
of the Optionee with respect to the Property.
TERMINATION OF OPTION BY OPTIONEE
- ---------------------------------
8. (a) The Option shall terminate:
(i) upon the Optionee failing to incur or make any
expenditure or payment which must be incurred or
made in exercise of the Option; or
(ii) at any other time, by the Optionee giving notice
of such termination to the Optionor.
(b) If the Option is terminated the Optionee shall:
(i) leave in good standing for a period of at least
12 months from the termination of the Option
Period those mineral claims comprising the
Property;
(ii) deliver or make available at no cost to the
Optionors within 90 days of such termination, all
drill core, copies of all reports, maps, assay
results and other relevant technical data
compiled by, prepared at the direction of, or in
the possession of the Optionee with respect to
the Property and not theretofore furnished to the
Optionors.
<PAGE>
-8-
(c) Notwithstanding the termination of the Option, the
Optionee shall have the right, within a period of 180
days following the end of the Option Period, to remove
from the Property all buildings, plant, equipment,
machinery, tools, appliances and supplies which have been
brought upon the Property by or on behalf of the
Optionee, and any such property not removed within such
180 day period shall thereafter become the property of
the Optionors.
ROYALTY
- -------
9. (a) Upon the Commencement of Commercial Production, the
Optionee shall pay to Service the Royalty, being equal to
1% of Net Smelter Returns, on the terms and conditions as
set out in this paragraph and in Schedule "B".
(b) Installments of the Royalty payable shall be paid by the
Optionee to Service immediately upon the receipt by the
Optionee of the payment from the smelter, refinery or
other place of treatment of the proceeds of sale of the
minerals, ore, concentrates or other product from the
Property.
(c) Within 120 days after the end of each fiscal year,
commencing with the year in which Commencement of
Commercial Production occurs, the accounts of the
Optionee relating to operations on the Property and the
statement of operations, which shall include the
statement of calculation of Royalty for the year last
completed, shall be audited by the auditors of the
Optionee at its expense. The Optionors shall have 45
days after receipt of such statements to question the
accuracy thereof in writing and, failing such objection,
the statements shall be deemed to be correct and
unimpeachable thereafter.
(d) If such audited financial statements disclose any
overpayment of Royalty by the Optionee during the fiscal
year, the amount of the overpayment shall be deducted
from future installments of Royalty payable.
(e) If such audited financial statements disclose any
underpayment of Royalty by the Optionee during the year,
the amount thereof shall be paid to Service forthwith
after determination thereof.
(f) The Optionee agrees to maintain for each mining operation
on the Property, up-to-date and complete records relating
to the production and sale of minerals, ore, bullion and
other product from the Property, including accounts,
records, statements and returns relating to treatment and
smelting arrangements of such product, and the Optionors
or their agents shall have the right at all reasonable
times, including for a period of 12 months following the
expiration or termination of this Agreement, to inspect
such records, statements and returns and make copies
thereof at its own expense for the purpose of verifying
the amount of Royalty payments to be made by the Optionee
to Service pursuant hereto. The Optionors shall have the
right to have
<PAGE>
-9-
such accounts audited by independent
auditors at its own expense once each fiscal year.
POWER TO CHARGE PROPERTY
- ------------------------
10. At any time after the Optionee has exercised the Option,
the Optionee may grant mortgages, charges or liens (each of which
is herein called a "mortgage") of and upon the Property or any
portion thereof, any mill or other fixed assets located thereon,
and any or all of the tangible personal property located on or used
in connection with the Property to secure financing of development
of the Property, provided that, unless otherwise agreed to by the
Optionors, it shall be a term of each mortgage that the mortgagee
or any person acquiring title to the Property upon enforcement of
the mortgage shall hold the same subject to the right of the
Optionors to receive the Royalty hereunder as if the mortgagee or
any such person had executed this Agreement.
TRANSFERS
- ---------
11. (a) The Optionee may at any time either during the Option
Period or thereafter, sell, transfer or otherwise dispose
of all or any portion of its interest in and to the
Property and this Agreement provided that any purchaser,
grantee or transferee of any such interest shall have
first delivered to the Optionors its agreement relating
to this Agreement and to the Property, containing:
(i) a covenant to perform all the obligations of the
Optionee to be performed under this Agreement in
respect of the interest to be acquired by it from
the Optionee to the same extent as if this
Agreement had been originally executed by such
purchaser, grantee or transferee; and
(ii) a provision subjecting any further sale, transfer
or other disposition of such interest in the
Property and this Agreement or any portion
thereof to the restrictions contained in this
paragraph (a).
(b) No assignment by the Optionee of any interest less than
its entire interest in this Agreement and in the Property
shall, as between the Optionee and the Optionors,
discharge it from any of its obligations hereunder, but
upon the transfer by the Optionee of the entire interest
at the time held by it in this Agreement, whether to one
or more transferees and whether in one or in a number of
successive transfers, the Optionee shall be deemed to be
discharged from all obligations hereunder save and except
for the payment of the Royalty or other fulfillment of
such commitments hereunder accrued as are due prior to
the date on which the Optionee shall have no further
interest in this Agreement.
<PAGE>
SURRENDER OF PROPERTY INTERESTS PRIOR TO TERMINATION OF AGREEMENT
- -----------------------------------------------------------------
12. The Optionee may at any time during the Option Period
elect to abandon any one or more of the mineral claims comprised in
the Property by giving notice to the Optionors of such intention.
Any claims so abandoned shall be in good standing under the laws of
the jurisdiction in which they are situate for at least 12 months
from the date of abandonment. Upon any such abandonment, the
mineral claims so abandoned shall for all purposes of this
Agreement cease to form part of the Property.
FORCE MAJEURE
- -------------
13. (a) If the Optionee is at any time either during the Option
Period or thereafter prevented or delayed in complying
with any provisions of this Agreement by reason of
strikes, lock-outs, labour shortages, power shortages,
fuel shortages, fires, wars, acts of God, governmental
regulations restricting normal operations, shipping
delays or any other reason or reasons, other than lack of
funds, beyond the control of the Optionee, the time
limited for the performance by the Optionee of its
obligations hereunder shall be extended by a period of
time equal in length to the period of each such
prevention or delay, but nothing herein shall discharge
the Optionee from its obligations hereunder to maintain
the Property in good standing;
(b) The Optionee shall give prompt notice to the Optionors of
each event of force majeure and upon cessation of such
event shall furnish to the Optionors together with such
notice particulars of the number of days by which the
obligations of the Optionee hereunder have been extended
by virtue of such event of force majeure and all
preceding events of force majeure.
(c) After the Commencement of Commercial Production, the
Optionee shall work, mine and operate the Property during
such time or times as the Optionee in its sole judgment
considers such operations to be profitable. The Optionee
may suspend or curtail operations, both before and after
Commencement of Commercial Production, during periods
when the products derived from the Property cannot be
profitably sold at prevailing prices or if an
unreasonable inventory thereof, in the Optionee's sole
judgment, has accumulated or would otherwise accumulate.
CONFIDENTIAL INFORMATION
- ------------------------
14. No information furnished by the Optionee to the Optionors
hereunder in respect of the activities carried out on the Property
by the Optionee, or related to the sale of minerals, ore, bullion
or other product derived from the Property, shall be published or
disclosed by the Optionors without the prior written consent of the
Optionee, but such consent in respect of the reporting of factual
data shall not be unreasonably withheld, and shall not be withheld
in respect of information
<PAGE>
required to be publicly disclosed pursuant to applicable securities,
corporation or tax laws, regulations or policies.
ARBITRATION
- -----------
15. (a) All questions or matters in dispute under this Agreement
shall be submitted to arbitration pursuant to the terms
hereof.
(b) It shall be a condition precedent to the right of any
party to submit any matter to arbitration pursuant to the
provisions hereof, that any party intending to refer any
matter to arbitration shall have given not less than 10
days' prior notice of its intention to do so to the other
party, together with particulars of the matter in
dispute. On the expiration of such 10 days, the party
who gave such notice may proceed to refer the dispute to
arbitration as provided in paragraph (c).
(c) The party desiring arbitration shall appoint one
arbitrator, and shall notify the other party of such
appointment, and the other party shall, within 15 days
after receiving such notice, either consent to the
appointment of such arbitrator which shall then carry out
the arbitration or appoint an arbitrator, and the two
arbitrators so named, before proceeding to act, shall,
within 30 days of the appointment of the last appointed
arbitrator, unanimously agree on the appointment of a
third arbitrator to act with them and be chairman of the
arbitration herein provided for. If the other party
shall fail to appoint an arbitrator within 15 days after
receiving notice of the appointment of the first
arbitrator, the first arbitrator shall be the only
arbitrator. If the two arbitrators appointed by the
parties shall be unable to agree on the appointment of
the chairman, the chairman shall be appointed under the
provisions of the Commercial Arbitration Act of British
Columbia. Except as specifically otherwise provided in
this section, the arbitration herein provided for shall
be conducted in accordance with such Act. The chairman,
or in the case where only one arbitrator is appointed,
the single arbitrator, shall fix a time and place in
Vancouver, British Columbia, for the purpose of hearing
the evidence and representations of the parties, and he
shall preside over the arbitration and determine all
questions of procedure not provided for under such Act or
this section. After hearing any evidence and
representations that the parties may submit, the single
arbitrator, or the arbitrators, as the case may be, shall
make an award and reduce the same to writing, and deliver
one copy thereof to each of the parties. The expense of
the arbitration shall be paid as specified in the award.
(d) The parties agree that the award of a majority of the
arbitrators, or in the case of a single arbitrator, of
such arbitrator, shall be final and binding upon each of
them.
<PAGE>
-12-
DEFAULT
- -------
16. If at any time during the Option Period the Optionee is
in default of any provision in this Agreement (other than the
provisions of subparagraph 4(b) for which no notice of default need
be given), the Optionor may terminate this Agreement, but only if:
(a) it shall have first given to the Optionee a notice of
default containing particulars of the obligation which
the Optionee has not performed, or the warranty breached;
and
(b) the Optionee has not, within 45 days following delivery
of such notice of default, cured such default or
commenced proceedings to cure such default by appropriate
payment or performance, the Optionee hereby agreeing that
should it so commence to cure any default it will
prosecute the same to completion without undue delay.
Should the Optionee fail to comply with the provision of
subparagraph (b), the Optionors may thereafter terminate this
Agreement by giving notice thereof to the Optionee.
TERMINATION OF MINING OPERATIONS
- --------------------------------
17. The Optionee may permanently discontinue mining
operations on the Property at any time after the Commencement of
Commercial Production when in its opinion no further mining
operations can be economically carried out thereon. At such time,
the Optionee shall dispose of all mining plant and equipment used
on the Property, effect all reclamation work as required by law,
and otherwise dispose of the Property as it thinks fit. Any
purchaser of the Property after termination of mining operations on
the Property shall take the Property free and clear of all claims
by the Optionors. The accounts of the Optionee relating to its
mining operations on the Property shall be audited by the auditors
of the Optionee as soon as practicable after the sale or
disposition of all mining plant, equipment and the Property, and
completion of reclamation. Final settlement of any Royalty payable
to Service shall be effected without delay after receipt of the
final audited statements. After receipt of such final audited
statements and payment of Royalty, if any, this Agreement and the
mutual obligations of the Optionee and the Optionors hereunder
shall terminate.
RULE AGAINST PERPETUITIES
- -------------------------
18. If any right, power or interest held by or to be acquired
by any party in the Property under this Agreement would violate the
rule against perpetuities, then such right, power or interest shall
terminate at the expiration of 20 years after the death of the last
survivor of all the lineal descendants of Her Majesty, Queen
Elizabeth II of England, living on the date of the execution of
this Agreement.
<PAGE>
-13-
NOTICES
- -------
19. Each notice, demand or other communication required or
permitted to be given under this Agreement shall be in writing and
shall be delivered, or telecopied to such party at the address for
such party specified above. The date of receipt of such notice,
demand or other communication shall be the date of delivery thereof
if delivered or, if given by telecopier, shall be deemed
conclusively to be the next business day. Either party may at any
time and from time to time notify the other party in writing of a
change of address and the new address to which notice shall be
given to it thereafter until further change.
GENERAL
- -------
20. (a) This Agreement shall supersede and replace any other
agreement or arrangement, whether oral or written,
heretofore existing between the parties in respect of the
subject matter of this Agreement.
(b) No consent or waiver expressed or implied by either party
in respect of any breach or default by the other in the
performance by such other of its obligations hereunder
shall be deemed or construed to be a consent to or a
waiver of any other breach or default.
(c) The parties shall promptly execute or cause to be
executed all documents, deeds, conveyances and other
instruments of further assurance and do such further acts
which may be reasonably necessary or advisable to carry
out fully the intent of this Agreement or to record
wherever appropriate the respective interest from time to
time of the parties in the Property.
(d) This Agreement shall enure to the benefit of and be
binding upon the parties and their respective successors
and permitted assigns.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the Province of British
Columbia.
(f) Time shall be of the essence in this Agreement.
(g) Wherever the neuter and singular is used in this
Agreement it shall be deemed to include the plural,
masculine and feminine, as the case may be.
<PAGE>
-14-
(h) Any reference in this Agreement to currency shall be
deemed to be Canadian currency.
IN WITNESS WHEREOF the parties hereto have executed this Agreement
as of the day and year first above written.
SIGNED, SEALED AND DELIVERED )
BY Michael Lederhouse )
in the presence of: )
)
/s/ Yvonne Lederhouse ) /s/ Michael Lederhouse
- ------------------------------- ) -------------------------
Signature ) Signature
)
)
Yvonne Lederhouse )
- ------------------------------- )
Name )
)
)
Box 202 )
- ------------------------------- )
Address )
)
)
Air Ronge, SK. SOJ 3G0 )
- ------------------------------- )
)
SIGNED, SEALED AND DELIVERED
BY Carl Service )
in the presence of: )
)
)
/s/ D. Studer )
- ------------------------------- )
Signature )
) /s/ Carl Service
) -------------------------
) Signature
D. Studer )
- ------------------------------- )
Name )
)
)
3428 Dieppe St )
- ------------------------------- )
Address )
)
)
Saskatoon, SK. )
- ------------------------------- )
)
<PAGE>
-15-
THE COMMON SEAL OF )
GREEN FUSION CORP. )
was hereunto affixed in the )
presence of: )
)
) c/s
)
/s/ Logan Anderson )
- ------------------------------- )
Authorized Signatory )
)
)
- ------------------------------- )
Authorized Signatory )
<PAGE>
SCHEDULE "A"
------------
Saskatchewan Mineral claim #S105984
<PAGE>
SCHEDULE "B"
------------
NET PROFITS ROYALTY
-------------------
1. For the purposes of this Agreement the following words
and phrases shall have the following meanings, namely:
(a) "Net Smelter Returns" shall mean the gross proceeds
received by the Optionee in any year from the sale of
Product from the mining operation on the Property, less
successively:
(i) the cost of transportation and insurance of such
Product to a smelter or other place of treatment,
(ii) smelter, treatment and refining charges and
penalties;
(iii) ad valorem taxes and taxes based upon production,
but not income taxes;
(b) "Ore" shall mean any material containing a mineral or
minerals of commercial economic value mined from the
Property; and
(c) "Product" shall mean Ore mined from the Property and any
concentrates or other materials or products derived
therefrom, but if any such Ore, concentrates or other
materials or products are further treated as part of the
mining operation in respect of the Property, such Ore,
concentrates or other materials or products shall not be
considered to be "Product" until after they have been so
treated.
2. For the purposes of calculating the amount of Royalty
payable to Service hereunder, if, after the Commencement of
Commercial Production, the Optionee sells any Product to one of its
subsidiaries or affiliates, and if the sale price of such Product
is not negotiated on an arm's-length basis, the Optionee shall for
the purposes of calculating Net Smelter Returns only and
notwithstanding the actual amount of such sale price, add to the
proceeds from the sale of such Product an amount which would be
sufficient to make such sale price represent a reasonable net sale
price for such Product as if negotiated at arm's length and after
taking into account all pertinent circumstances including, without
limitation, then current market conditions relating to Ore,
concentrates or products similar to such Product.
3. The Optionee shall by notice inform Service of the
quantum of such reasonable net sale price and, if Service does not
object thereto, within 60 days after receipt of such notice, said
quantum shall be final and binding for the purposes of this
Agreement.
4. The Optionee may remove reasonable quantities of Ore and
rock from the Property for the purpose of bulk sampling and of
testing, and there shall be no Royalty payable to Service with
respect thereto unless revenues are derived therefrom.
5. The Optionee shall have the right to commingle with ores
from the Property, ore produced from other properties, provided
that prior to such commingling, the Optionee shall adopt
<PAGE>
-2-
and employ reasonable practices and procedures for weighing,
determination of moisture content, sampling and assaying, as well
as utilize reasonable accurate recovery factors in order to determine
the amounts of products derived from, or attributable to Ore mined and
produced from the Property. The Optionee shall maintain accurate
records of the results of such sampling, weighing and analysis as
pertaining to ore mined and produced from the Property.
<PAGE>
SCHEDULE "C"
------------
ESCROW AGREEMENT
----------------
THIS AGREEMENT is made as of the 6 day of April, 1998
-----
BETWEEN:
O'Neill, Ritchie, Taylor Law Corporation, a
British Columbia company with a registered and
records office at Suite 1880 - 1055 West
Georgia Street, Vancouver, British Columbia,
V6E 3P3
(hereinafter called the "Escrow Agent")
OF THE FIRST PART
AND:
Green Fusion Corp., a Nevada corporation with
a registered office at Suite B - 169, 7373 N.
Scottsdale Road, Scottsdale, Arizona, U.S.A.
85253
(hereinafter called the "Company")
OF THE SECOND PART
AND:
THE UNDERSIGNED SHAREHOLDER IN GREEN FUSION
CORP.
(hereinafter individually called "Shareholder" and
collectively call the "Shareholders)
OF THE THIRD PART
WHEREAS:
A. The Shareholder has acquired or is about to acquire shares of
the Company and has agreed to enter into this escrow agreement on
the terms and conditions hereinafter provided;
B. The Escrow Agent has agreed to undertake and perform its
duties according to the terms and conditions hereof:
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the aforesaid agreements and the sum of one dollar ($1.00) now
paid by the parties hereto, each to the other (receipt of which sum
the parties do hereby respectively acknowledge each to the other)
the
<PAGE>
-2-
shareholders jointly and severally covenant and agree with the
Company and with the Escrow Agent and the Company and the Escrow
Agent covenant and agree each with the other and with the
shareholders jointly and severally as follows:
1. In this Agreement:
(a) "Shares" shall mean the 50, 000 common shares in the
capital of the Company issued to the Shareholder pursuant
to the Option Agreement, together with any additional
shares issued by way of a dividend paid in shares which
accrues to the shares, and the certificate or
certificates representing such shares; and
(b) "Director" shall mean the director or any Deputy Director
of the Saskatchewan Securities Commission.
2. The Shareholder hereby places and deposits in escrow with the
Escrow Agent the Shares and agrees to deliver forthwith to
the Escrow Agent those Shares (including any replacement
shares or certificates if and when issued) to the Escrow Agent
for deposit in escrow.
3. The parties hereby agree that the shares and the beneficial
ownership or any interest in them shall not be sold, assigned,
hypothecated, alienated, released from escrow, transferred
within escrow, or otherwise in any manner dealt with, without
the express consent in writing of the Director being first
obtained except as may be required by reason of the death or
bankruptcy of the Shareholder, in which case the Escrow Agent
shall hold the Shares subject to this agreement, for whatever
person, firm, or corporation shall be legally entitled to be
or become the registered owner thereof.
4. The Shareholder hereby directs the Escrow Agent to retain the
Shares including any replacement shares or certificates, and
not to do or cause anything to be done to release the same
from escrow or to allow any transfer, hypothecation,
alienation, sale, assignment or release thereof except with,
and as directed by, the written consent of the Director. The
Escrow Agent hereby accepts the responsibilities placed on it
hereby and agrees to perform the same in accordance with the
terms hereof and in accordance with the written consent of the
Director.
5. If, during the period in which any of the Shares are retained
in escrow pursuant hereto, any
dividend, other than a dividend paid in shares of the Company,
is received by the Escrow Agent in respect of the Shares, such
dividend shall be paid or transferred forthwith to the
respective Shareholders entitled thereto. Any shares received
by the Escrow Agent by way of dividend in respect of the
Shares shall be dealt with as if they were Shares hereunder.
6. All voting rights to the Shares may at all times be exercised
by the respective registered owner thereof.
7. The Company hereby acknowledges the terms and conditions of
the agreement and agrees to take all reasonable steps to
facilitate its performance.
<PAGE>
-3-
8. The written consent of the Director to release from escrow all
or part of the Shares shall terminate this agreement only in
respect of those Shares so released. For greater certainty, a
transfer within escrow is not a release from escrow.
9. It is acknowledged by the parties that if the Company meets
certain conditions over time, the Shareholders shall be
entitled to a partial or full release by the Director of the
Shares from the terms of this agreement from time to time in
accordance with the policies of the Saskatchewan Securities
Commission.
10. The parties hereto agree and acknowledge that the Shares
subject to escrow shall be released on the following terms:
(a) 30% pro-rata release of the escrowed Shares on the first
anniversary of the date of signing of the Option
Agreement;
(b) 30% pro-rata release for the escrowed Shares on the
second anniversary of the date of signing of the Option
Agreement; and
(c) 40% pro-rata release of the escrowed Shares on the third
anniversary of the date of signing of the Option
Agreement.
11. Notice of any consent of the Director shall be given by the
Escrow Agent to all persons or parties affected thereby at
their last known address.
12. The Shareholders do hereby jointly and severally covenant and
agree to hold harmless and fully indemnify the Escrow Agent
from and against all loss, costs, suits, demands, claims,
damages, and expenses which the Escrow Agent may at any time
or times hereafter suffer as a result of compliance in good
faith with the terms hereof.
13. If the Escrow Agent should wish to resign, it shall give at
least six months' notice to the Company, which may, with the
written consent of the Director, by writing appoint another
Escrow Agent in its place and such appointment shall be
binding on the Shareholders and the New Escrow Agent shall
assume and be bound by the obligations of the Escrow Agent
hereunder.
14. This agreement may be executed in several parts in the same
form and such parts as so executed shall together form one
original agreement, and such parts, if more than one, shall be
read together and construed as if all the signing parties
hereto had executed one copy of this Agreement.
15. This Agreement shall enure to the benefit of and be binding
upon the parties hereto, and upon each of their heirs,
executors, administrators, successors, and permitted assigns.
<PAGE>
-4-
IN WITNESS WHEREOF the parties hereto have executed these
presents the day and year first above written.
SIGNED, SEALED AND DELIVERED
BY Carl Service )
in the presence of: )
)
)
/s/ D. Studer )
- ------------------------------- )
Signature )
) /s/ Carl Service
) -------------------------
) Signature
D. Studer )
- ------------------------------- )
Name )
)
)
3428 - Dieppe St. )
- ------------------------------- )
Address )
)
)
Saskatoon, SK. )
- ------------------------------- )
)
O'Neill, Ritchie, Taylor Law Corporation
Per:
- --------------------------------
Authorized Signatory
Green Fusion Corp.
Per:
- ---------------------------------
Authorized Signatory
Figure 1 Location of the Smith Bay Study Area
[Map]
