<PAGE>2
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10SB
General Form for Registration of Securities of Small
Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
AURIC ENTERPRISES, INC.
(Exact name of Small Business Issuer in its charter)
NEVADA 91-1950699
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
10 Office Park Rd, Suite 222,
Carolina Building, Hilton Head, SC 29928.
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: (843) 686-5590
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
Forward-Looking Statements and Associated Risk. This Registration
Statement, including the information incorporated herein by reference,
contains forward-looking statements including statements regarding, among
other items, the Company's growth strategies, and anticipated trends in
the Company's business and demographics. These forward-looking
statements are based largely on the Company's expectations and are
subject to a number of risks and uncertainties, certain of which are
beyond the Company's control. Actual results could differ materially
from these forward-looking statements as a result of the factors
described in this section "Risk Factors," including among others,
regulatory or economic influences.
<PAGE>3
ITEM 1. DESCRIPTION OF BUSINESS
A. The Company was incorporated as Auric Enterprise, Inc. in Nevada in
December, 1998. The Company is authorized to issue Fifty Million
(50,000,000) Common Shares, $.001 par value.
Corporate Operations. The Company is in the development stage. The
Company shall engage in the further assaying, exploration and development
of its mining claims located in Trinity County, California.
Acquisition of Property. The Company acquired four mining claims on
November 23, 1999 pursuant to a purchase agreement between the Company
and the R.E. Hunt Trust (Hunt). The Company issued to Hunt 200,000
shares of its restricted common stock in exchange for the claims. In
connection with the mining claims acquired, the Company is obligated to
pay an aggregate minimum of $400 per year for improvements.
The Companies claims consist of four plots located on Wild Mountain
(plots # 1,2,3,4) in Trinity County California. Plots 1,2,4 measure
1800'x1500' and #3 measures 600'x1500'. CAMC numbers for the four
claims are 274737, 274738, 274739, and 274740 respectively. On October
16, 1997 the claims were assayed by J.C. Refining & Assay of Junction
City, Ca.
Consulting Agreements. The Company issued an aggregate of 935,000
shares of its common stock for financial advisory services, and
accounting and management services including office costs provided and to
be provided to the Company by two independent consultants, Timothy Miles
and Joel R. Shine. The consultant contracts are for a four month period
and were arranged during February 1999. The fair value of the shares
issued for the services amounted to $.10 per share and such value is
consistent with the cash amount paid by the Company's initial investors.
Dependence on One or a Few Major Customers. The Company does not expect
that any single customer will account for more than ten percent of its
business.
Employees. The Company currently employs no full time persons or part
time persons. The Company shall employ individuals as required.
Governmental Regulation. Environmental and other government regulations
at the federal, state and local level pertaining to the Company's
business and properties may include: (a) surface impact; (b) water
acquisition; (c) site access; (d) reclamation; (e) wildlife preservation;
(f) licenses and permits; and, (e) maintaining the fees for unpatented
mining claims. See "Business - Government Regulation and Environmental
Concerns."
Seasonal Nature of Business Activities. The Company's business
activities are not seasonal.
Item 2. Management's Discussion and Analysis or Plan of Operation
Trends and Uncertainties. Demand for the Company's products will be
dependent on, among other things, market acceptance of the Company's
concept, its proposed operations and general economic conditions that are
cyclical in nature. Inasmuch as a major portion of the Company's
activities is the receipt of revenues from the sales of its products, the
Company's business operations may be adversely affected by the Company's
inability to obtain the necessary financing, competitors and prolonged
recessionary periods.
Capital and Source of Liquidity. The Company requires substantial
capital in order to meet its ongoing corporate obligations and in order
to continue and expand its current and strategic business plans.
Initial working capital has been obtained by private sale of common
stock.
The Company received proceeds from the sale of Common Stock of $44,000
resulting in net cash provided by financing activities of $44,000 for the
period from inception to February 28, 1999.
The Company had not investing activities for the period from inception to
February 28, 1999.
Results of Operations. Since inception, the Company has not received
any revenues from operations. The Company issued common stock valued at
$23,405 for services for the period from inception to February 28, 1999.
The Company had an increase in other assets of $572 and had an increase
in accounts payable of $10,572 for the period from inception to February
28, 1999. The Company had net cash of $0.00 provided by operating
activities for the period from inception (October 26, 1998) to February
28, 1999.
General and administrative expenses were $32,336 and consisted primarily
of consulting fee of $10,000, legal fees of $20,000, accounting expense
of $1,665 and miscellaneous expenses of $671 for the period from
inception (October 26, 1998) to February 28, 1999.
Plan of Operation. The Company is not delinquent in any of its
obligations even though the Company has generated no operating revenues.
However, the Company continues its efforts to raise capital. The Company
intends to pursue its business plan utilizing cash made available from
the private and future public sale of its securities. The Company's
management is of the opinion that revenues from the proceeds of the sales
of its securities will be sufficient to pay its expenses until its
business operations create revenue
On a long-term basis, the Company's liquidity is dependent on
commencement operations, revenue generation, additional infusions of
capital and potential debt financing. Company management believes that
additional capital and debt financing in the short term will allow it to
commence its business plan and thereafter result in revenue and greater
liquidity in the long term. However, there can be no assurance that the
Company will be able to obtain the needed additional equity or debt
financing in the future.
Year 2000 Compliance Issues. The Company has established a plan to
address Year 2000 issues. This plan encompasses the phases of awareness,
assessment, renovation, validation and implementation. These phases will
enable the Company to identify risks, develop action plans, perform
adequate testing and determine if its processing systems will be Year
2000 ready. Successful implementation of this plan are expected to
mitigate any extraordinary expenses related to the Year 2000 issue. The
Company has a reasonable basis to preclude that the Year 2000 issue will
not materially affect future financial results, or cause reported
financial information not to be necessarily indicative of future
operating results or future financial conditions. This basis is due to
the fact that the Company has or is installing all new information
technology systems, including computer hardware and software which are
Year 2000 compliant. This is the first generation of equipment and
software for the Company since it has just recently began operations. It
also plans that restaurant operations as they begin will utilize state of
the art point of sale equipment.
The Company plans to contact all material customers, vendors, suppliers
and non-information technology suppliers (if any) regarding their Year
2000 state of readiness. This process will be conducted over the next six
to nine months. No assurance can be given that the Year 2000 compliance
plan will be completed successfully by the Year 2000. The Company's
current contingency plan is simplistic and involves operating on a manual
basis for a short period of time without interruption of service or
quality.
Successful and timely completion of the Year 2000 project is based on
management's best estimates derived from various assumptions of future
events. These events are inherently uncertain, including the progress and
results of vendors, suppliers and customers Year 2000 readiness.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company's executive offices are located at 10 Office Park Rd, Suite
222, Carolina Building, Hilton Head, SC 29928. Telephone number is (843)
686-5590. These offices consist of 500 square feet, which are provided
free of charge by Timothy Miles, a principal shareholder of the Company.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There are currently outstanding 1,675,000 Common Shares outstanding.
The following tabulates holdings of shares of the Company by each person
who, subject to the above, at the date of this prospectus, holds of
record or is known by Management to own beneficially more than 5.0% of
the Common Shares and, in addition, by all directors and officers of the
Company individually and as a group. Each named beneficial owner has
sole voting and investment power with respect to the shares set forth
opposite his name.
<PAGE>5
Shareholdings at Date of
This Prospectus
<TABLE>
<CAPTION>
Percentage
of
Number & Class(1) Outstanding
Name and Address of Shares Common
Shares
<S> <C> <C>
Margot Knepp 10,000 .60%
11 San Pedro
Salinas, California 93901
Samantha Moody 10,000 .60%
2 Ocean Breeze
Hilton Head, SC 29928
Robert Hinchey 10,000 .60%
22 Woodbine Place
Hilton Head, SC 29928
R.E. Hunt 200,000 11.94%
29543 Greenwood Lane
Evergreen, CO 80439
Timothy Miles 885,000 52.84%
1921 South Downing
Denver, CO 80210
Officers and Directors
As a group (3) 220,000 13.13%
(1)Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the voting) and/or
sole or shared investment power (including the power to dispose or
direct the disposition) with respect to a security whether through a
contract, arrangement, understanding, relationship or otherwise.
Unless otherwise indicated, each person indicated above has sole power
to vote, or dispose or direct the disposition of all shares beneficially
owned, subject to applicable unity property laws.
There are currently 687,500 A Warrants outstanding. The following
tabulates holdings of shares of the Company by each person who, subject
to the above, at the date of this prospectus, holds of record or is known
by Management to own beneficially more than 5.0% of the Common Shares
and, in addition, by all directors and officers of the Company
individually and as a group. Each named beneficial owner has sole
voting and investment power with respect to the shares set forth opposite
his name.
Margot Knepp 0 0%
11 San Pedro
Salinas, California 93901
Samantha Moody 0 0%
2 Ocean Breeze
Hilton Head, SC 29928
Robert Hinchey 0 0%
22 Woodbine Place
Hilton Head, SC 29928
Timothy Miles 442,500 64.36%
1921 South Downing
Denver, CO 80210
Officers and Directors
As a group (3) 0 0%
<PAGE>6
There are currently 687,500 B Warrants outstanding. The following
tabulates holdings of shares of the Company by each person who, subject
to the above, at the date of this prospectus, holds of record or is known
by Management to own beneficially more than 5.0% of the Common Shares
and, in addition, by all directors and officers of the Company
individually and as a group. Each named beneficial owner has sole
voting and investment power with respect to the shares set forth opposite
his name.
Margot Knepp 0 0%
11 San Pedro
Salinas, California 93901
Samantha Moody 0 0%
2 Ocean Breeze
Hilton Head, SC 29928
Robert Hinchey 0 0%
22 Woodbine Place
Hilton Head, SC 29928
Timothy Miles 442,500 64.36%
1921 South Downing
Denver, CO 80210
Officers and Directors
As a group (3) 0 0%
There are currently 2,750,000 C Warrants outstanding. The following
tabulates holdings of shares of the Company by each person who, subject
to the above, at the date of this prospectus, holds of record or is known
by Management to own beneficially more than 5.0% of the Common Shares
and, in addition, by all directors and officers of the Company
individually and as a group. Each named beneficial owner has sole
voting and investment power with respect to the shares set forth opposite
his name.
Margot Knepp 0 0%
11 San Pedro
Salinas, California 93901
Samantha Moody 0 0%
2 Ocean Breeze
Hilton Head, SC 29928
Robert Hinchey 0 0%
22 Woodbine Place
Hilton Head, SC 29928
Timothy Miles 1,770,000 64.36%
1921 South Downing
Denver, CO 80210
Officers and Directors
As a group (3) 0 0%
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Board of Directors. The following persons listed below have been
retained to provide services as director until the qualification and
election of his successor. All holders of Common Stock will have the
right to vote for Directors of the Company. The Board of Directors has
primary responsibility for adopting and reviewing implementation of the
business plan of the Company, supervising the development business plan,
review of the officers' performance of specific business functions. The
Board is responsible for monitoring management, and from time to time, to
revise the strategic and operational plans of the Company. Directors
receive no cash compensation or fees for their services rendered in such
capacity.
The Executive Officers and Directors are:
Name Position
Term(s) of Office
Samantha Moody, age 31 Secretary/Director
From Inception
To Present
Robert Hinchey, age 53 President/Treasurer
From Inception
Director
To Present
<PAGE>7
Margot Knepp, age 30 Director
From Inception
To Present
Resumes:
Robert Hinchey. Mr. Hinchey is currently an independent business
consultant. From 1994 to 1996, Mr. Hinchey was the President and CEO of
Knowledge Systems Corporation, a leading provider of Object Technology
consulting/training. From 1991 to 1993, Mr. Hinchey was President and
CEO of Human Capital Corporation. Mr. Hinchey is a senior executive who
has had complete P&L responsibility with domestic/international
experience in strategic planning, operations, finance, and
business/product development. Mr. Hinchey received his BBA from the
University of Notre Dame in 1967, and MBA from the University of Chicago
in 1975.
Samantha Moody. Mrs. Moody is currently a partner in Moody's Financial
Relations, providing financial relations consulting. From 1995 to 1997
Mrs. Moody was the owner of Sacred Valley Organic Produce, a wholesale
distributor of organic produce. From 1991 to 1995, Mrs. Moody was the
owner of Silkworks, a manufacturer and distributor of silk outerwear.
Margot Knepp. Mrs Knepp is currently the owner of Hey Diddle Diddle
Diaper Company, a cloth diaper service. Form 1993 to 1996 she was a
distributor and retailer of sensory based personal fulfillment devices
for Playful Pleasures.
Remuneration.
No salaries have been paid, and there are currently no proposed
employment arrangements.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
ITEM 8. DESCRIPTION OF SECURITIES
Qualification. The following statements constitute brief summaries of
the Company's Certificate of Incorporation and Bylaws, as amended. Such
summaries do not purport to be complete and are qualified in their
entirety by reference to the full text of the Certificate of
Incorporation and Bylaws.
The Company's articles of incorporation authorize it to issue up to
50,000,000 Common Shares, $.001 par value per Common Share and 10,000
Preferred Shares.
Common Stock. The Company's articles of incorporation authorize it to
issue up to 50,000,000 Common Shares, $.001 par value per Common Share.
All outstanding Common Shares are, and the Common Shares offered hereby
will be when legally issued, fully paid and non-assessable.
Liquidation Rights. Upon liquidation or dissolution, each outstanding
Common Share will be entitled to share equally in the assets of the
Company legally available for distribution to shareholders after the
payment of all debts and other liabilities.
Dividend Rights. There are no limitations or restrictions upon the
rights of the Board of Directors to declare dividends out of any funds
legally available therefor. The Company has not paid dividends to date
and it is not anticipated that any dividends will be paid in the
foreseeable future. The Board of Directors initially may follow a policy
of retaining earnings, if any, to finance the future growth of the
Company. Accordingly, future dividends, if any, will depend upon, among
other considerations, the Company's need for working capital and its
financial conditions at the time.
Voting Rights. Holders of Common Shares of the Company are entitled to
cast one vote for each share held at all shareholders meetings for all
purposes.
Other Rights. Common Shares are not redeemable, have no conversion
rights and carry no preemptive or other rights to subscribe to or
purchase additional Common Shares in the event of a subsequent offering.
Units. The Units consist of two (2) shares of Common Stock, one class A
warrant exercisable at $.50 for a period of three years from the close of
the offering, one class B warrant exercisable at $.75 for a period of
<PAGE>8
three years from the close of the offering, and four class C warrants
exercisable at $4.00 for a period of five years from the close of the
offering. . All warrants are callable for $.01 with 30 days notice.
Transfer Agent. Florida Atlantic Stock Transfer shall act as the
Company's transfer agent.
<PAGE>9
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
The Company intends to apply for trading in the over-the-counter market
to be listed on the NASDAQ Bulletin Board.
The Company has never paid any cash dividends nor does it intend, at this
time, to make any cash distributions to its shareholders as dividends in
the near future.
As of February 28, 1999, the number of holders of Company's common stock
is forty nine (49).
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings nor is the Company
aware of any disputes that may result in legal proceedings.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
During the Company's two most recent fiscal years or any later interim
period, there have been no changes in or disagreements with the Company's
principal independent accountant or a significant subsidiary's
independent accountant.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
At inception, the Company issued 30,000 shares of its restricted common
stock (10,000 each) to Samantha Moody, Robert Hinchey, and Margot Knepp,
in exchange for their services in forming the Company. The shares were
valued at par value. The Common Shares were issued to sophisticated
investors who had access to information on the Company necessary to make
an informed investment decision for cash consideration or services
pursuant to an exemption from registration under Section 4(2) of the
Securities Act of 1933
On November 23, 1998, the Company issued 200,000 shares of its common
stock to R.E. Hunt Trust in connection with the acquisition of the mining
claims described in Note 1. The shares were valued at par value. The
purchase agreement provides that Hunt give the Company options to
repurchase up to 150,000 of its shares from Hunt for a two year period.
The option price for 100,000 of the shares is $.25 per share and $.50 per
share for the remaining 50,000 shares. The options are fully
transferable by the Company. The Common Shares were issued to
sophisticated investors who had access to information on the Company
necessary to make an informed investment decision for cash consideration
or services pursuant to an exemption from registration under Section 4(2)
of the Securities Act of 1933
The Company issued an aggregate of 935,000 units for The units consist of
two shares Common Stock, one class A warrant exercisable at $.50 for a
period of three years from the close of the offering, one class B warrant
exercisable at $.75 for a period of three years from the close of the
offering, and four class C warrants exercisable at $4.00 for a period of
five years from the close of the offering. All warrants are callable for
$.01 with 30 days notice.
financial advisory services, and accounting and management services
including office costs provided and to be provided to the Company by two
independent consultants. The consultant contracts are for a four month
period and were arranged during February 1999. The fair value of the
units issued for the services amounted to $.20 per unit and such value
is consistent with the cash amount paid by the Company's initial
investors. The Common Shares were issued to sophisticated investors who
had access to information on the Company necessary to make an informed
investment decision for cash consideration or services pursuant to an
exemption from registration under Section 4(2) of the Securities Act of
1933
During the first quarter of 1999, the Company issued an aggregate of
220,000 units to a limited group of investors for cash aggregating
$44,000 in private sale transactions. The units were sold at a price of
$.20 per unit. The units consist of two shares Common Stock, one class A
warrant exercisable at $.50 for a period of three years from the close of
the offering, one class B warrant exercisable at $.75 for a period of
three years from the close of the offering, and four class C warrants
exercisable at $4.00 for a period of five years from the close of the
offering. All warrants are callable for $.01 with 30 days notice.
<PAGE>10
Steve Fry 5,000 $1,000
Mitsuso Tasugawa 5,000 $1,000
Kevin Tatsugawa 5,000 $1,000
Lorie Tasugawa-Spackman 5,000 $1,000
John Wong 5,000 $1,000
Patrick Gundlach 5,000 $1,000
Tom Geise 5,000 $1,000
J. Geise 5,000 $1,000
RE Hunt 5,000 $1,000
Margie Seymour 5,000 $1,000
Robert Hinchey 5,000 $1,000
Paul Spiegler 5,000 $1,000
Erich Schmid 5,000 $1,000
Duane Tracy 5,000 $1,000
Gary R See 5,000 $1,000
Jody Walker 5,000 $1,000
Joseph Petrucelli 5,000 $1,000
Robert Gerner 5,000 $1,000
Juanita Gallegos 5,000 $1,000
James Yanai 5,000 $1,000
Fred Quadros 5,000 $1,000
Larry Slayton 5,000 $1,000
Willie Serrano 5,000 $1,000
John Poli 5,000 $1,000
Judith Poli 5,000 $1,000
Elizabeth Gheen 5,000 $1,000
Abigail Miles 5,000 $1,000
Timothy Kasden 5,000 $1,000
Dean Cummings 5,000 $1,000
Mary Ann Lang 5,000 $1,000
James Potter 10,000 $2,000
Brian Murphy 5,000 $1,000
Kazu Fujita 5,000 $1,000
Marylin Post 5,000 $1,000
Dennis Knepp 5,000 $1,000
Shawn Nevitt 5,000 $1,000
Robert Ichikawa 5,000 $1,000
Gary Kihs 5,000 $1,000
Robert Watson 5,000 $1,000
Roger Vosti 5,000 $1,000
Thomas Bass 5,000 $1,000
Kevin Robinson 5,000 $1,000
Subrina Lackman 5,000 $1,000
These issuances were made in compliance with Rule 504, Regulation D of
the Securities Act of 1933 by Company's management, consultants and
selected broker/dealers. No commissions or other remuneration was paid
to anyone. No general solicitation was utilized.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Indemnification. The Company shall indemnify to the fullest extent
permitted by, and in the manner permissible under the laws of the State
of Nevada, any person made, or threatened to be made, a party to an
action or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he is or was a director or
officer of the Company, or served any other enterprise as director,
officer or employee at the request of the Company. The Board of
Directors, in its discretion, shall have the power on behalf of the
Company to indemnify any person, other than a director or officer, made a
party to any action, suit or proceeding by reason of the fact that he/she
is or was an employee of the Company.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company,
the Company has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of
any action, suit or proceedings) is asserted by such director, officer,
or controlling person in connection with any securities being registered,
the Company will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issues.
<PAGE>11
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE CORPORATION FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS
THEREFORE UNENFORCEABLE.
GENERAL - YEAR 2000 ISSUES
Year 2000 Compliance Issues. The Company has established a plan to
address Year 2000 issues. This plan encompasses the phases of awareness,
assessment, renovation, validation and implementation. These phases will
enable the Company to identify risks, develop action plans, perform
adequate testing and determine if its processing systems will be Year
2000 ready. Successful implementation of this plan are expected to
mitigate any extraordinary expenses related to the Year 2000 issue. The
Company has a reasonable basis to preclude that the Year 2000 issue will
not materially affect future financial results, or cause reported
financial information not to be necessarily indicative of future
operating results or future financial conditions. This basis is due to
the fact that the Company has or is installing all new information
technology systems, including computer hardware and software which are
Year 2000 compliant. This is the first generation of equipment and
software for the Company since it has just recently began operations. It
also plans that restaurant operations as they begin will utilize state of
the art point of sale equipment.
The Company plans to contact all material customers, vendors, suppliers
and non-information technology suppliers (if any) regarding their Year
2000 state of readiness. This process will be conducted over the next six
to nine months. No assurance can be given that the Year 2000 compliance
plan will be completed successfully by the Year 2000. The Company's
current contingency plan is simplistic and involves operating on a manual
basis for a short period of time without interruption of service or
quality.
Successful and timely completion of the Year 2000 project is based on
management's best estimates derived from various assumptions of future
events. These events are inherently uncertain, including the progress and
results of vendors, suppliers and customers Year 2000 readiness.
<PAGE>12
PART F/S
The following financial statements required by Item 310 of Regulation S-B
are furnished below:
Independent Auditor's Report dated March 8, 1999
Balance Sheet as of February 28, 1999
Statement of Operations for the Period From Inception (October 26, 1998)
to February 28, 1999
Statement of Stockholders' Equity for the Period From Inception (October
26, 1998) to February 28, 1999
Statement of Cash Flows for the Period From Inception (October 26, 1998)
to February 28, 1999
Notes to Financial Statements
<PAGE>13
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
Auric Enterprises, Inc.
We have audited the balance sheet of Auric Enterprises, Inc. as of
February 28, 1999, and the related statements of operations, changes in
stockholders' equity, and cash flows for the period from inception
(October 26, 1998) to February 28, 1999. These financial statements are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit 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 audit provides 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 Auric
Enterprises, Inc. as of February 28, 1999, and the results of its
operations and cash flows for the period from inception (October 26,
1999) to February 28, 1999, in conformity with generally accepted
accounting principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
March 8, 1999
<PAGE>14
Auric Enterprises, Inc.
(A Development Stage Company)
Balance Sheet
February 28, 1999
ASSETS
Current assets: 1999
Cash $ 44,000
---------
Total current assets 44,000
Property 200
Organization costs 572
---------
$ 44,772
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,572
---------
Total current liabilities 10,572
Commitments and contingencies
Stockholders' equity:
Common stock, $.001 par value,
50,000,000 shares authorized, 1,605,000 shares
issued and outstanding 1,605
Additional paid in capital 136,125
Unpaid stock subscriptions (70,125)
(Deficit) accumulated during
development stage (33,405)
---------
34,200
---------
$ 44,772
See accompanying notes to financial statements.
<PAGE>15
Auric Enterprises, Inc.
(A Development Stage Company)
Statement of Operations
For the Period From Inception (October 26, 1998) to February 28, 1999
Period From
Inception To
February 28,
1999
Operating expenses $ 33,405
---------
(Loss from operations) and net (loss) (33,405)
Per share information:
Basic and diluted (loss) per common share $ (0.05)
Weighted average shares outstanding 688,333
See accompanying notes to financial statements.
<PAGE>16
Auric Enterprises, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From Inception (October 26, 1998) to February 28, 1999
<TABLE.
<CAPTION>
Deficit
Additional Unpaid Accumulated
Common Stock Paid-
in Stock During Develop-
ACTIVITY Shares Amount
Capital Subscriptions ment Stage Total
<S> <C> <C>
<C> <C> <C> <C>
Shares issued to directors at inception 30,000 $ 30 $ -
$ - $ - $ 30
Shares issued for property
acquired, November 1998 200,000 20
2
Shares issued for cash
February 1999 @ $.10 440,000 440
43,560 44,000
Shares issued for services
February 1999 @ $.10 935,000 935
92,565 (70,125) 23,375
Net (loss) for the period
ended February 28, 1999 -
- - (33,405) (33,405)
---------- -------- ------
- --- --------- --------- ---------
Balance, February 28, 1999 1,605,000 $ 1,605 $
136,125 $ (70,125) $ (33,405) $ 34,200
</TABLE>
See accompanying notes to financial statements.
<PAGE>17
Auric Enterprises, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Period From Inception (October 26, 1998) to February 28, 1999
Period From
Inception To
February 28,
1999
Net income (loss) $ (33,405)
Adjustments to reconcile net income to net
cash provided by operating activities:
Services provided for common stock 23,405
Changes in assets and liabilities
(Increase) in other assets (572)
Increase in accounts payable 10,572
---------
Total adjustments 33,405
---------
Net cash provided by (used in) -
operating activities
----------
Cash flows from financing activities:
Common stock sold for cash 44,000
---------
Net cash provided by (used in)
financing activities 44,000
---------
Increase (decrease) in cash 44,000
Cash and cash equivalents,
beginning of period -
---------
Cash and cash equivalents,
end of period $ 44,000
See accompanying notes to financial statements.
<PAGE>18
Auric Enterprises, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Period From Inception (October 26, 1998) to February 28, 1999
Period From
Inception To
February 28,
1999
Supplemental cash flow information:
Cash paid for interest $ -
Cash paid for income taxes $ -
Non-cash investing and financing activities:
Property acquired for common stock $ 200
See accompanying notes to financial statements.
<PAGE>19
Auric Enterprises, Inc.
Notes to Financial Statements
February 28, 1999
Note 1. Organization and Summary of Significant Accounting Policies.
The Company was incorporated in Nevada on October 26, 1998. The Company
is
in its development stage and to date its activities have been limited to
organization and capital formation. The Company plans to engage in the
exploration, assaying and development of its four Wild Mountain mining
claims located in Trinity County, California. The claims are located
approximately 15 miles of Junction City CA and consist of four
undeveloped contiguous parcels located on approximately 90 acres of U.S.
Forest Service owned land. Activities associated with the claims have
been
limited to assaying test samples taken from the claims by the previous
owners. No engineering studies have been made and the Company therefore
has no estimates of gold reserves associated with the claims.
The claims were acquired from a trust on November 23, 1998 in exchange
for
200,000 shares of the Company's restricted common stock.
Property, Plant and Equipment:
Property, plant and equipment are recorded at cost and are depreciated
based upon estimated useful lives using the straight-line method.
Estimated
useful lives range from 3 to 5 years for furniture and fixtures and from
5
to 10 years for equipment.
Loss per share:
Basic Earnings per Share ("EPS") is computed by dividing net income
available to common stockholders by the weighted average number of
common stock shares outstanding during the year. Diluted EPS is
computed by dividing net income available to common stockholders by
the weighted-average number of common stock shares outstanding during
the year plus potential dilutive instruments such as stock options
and warrants. The effect of stock options on diluted EPS is
determined through the application of the treasury stock method,
whereby proceeds received by the Company based on assumed exercises
are hypothetically used to repurchase the Company's common stock at
the average market price during the period. Loss per share is
unchanged on a diluted basis since the assumed exercise of common stock
equivalents would have an anti-dilutive effect.
Intangible Assets:
Intangible assets consist of organization costs related to the formation
of
the Company. Such costs will be amortized using the straight line method
over a period of 5 years beginning in March 1999.
The Company makes reviews for the impairment of long-lived assets and
certain identifiable intangibles whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Under SFAS No. 121, an impairment loss would be recognized
when estimated future cash flows expected to result from the use of the
asset and its eventual disposition is less than its carrying amount. No
such impairment losses have been identified by the Company to date.
Cash:
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months
or
less to be cash equivalents.
Estimates:
The preparation of the Company's financial statements requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from these estimates
Fair value of financial instruments
The Company's short-term financial instruments consist of cash and cash
equivalents and accounts payable. The carrying amounts of these
financial
instruments approximates fair value because of their short-term
maturities.
Financial instruments that potentially subject the Company to a
concentration of credit risk consist principally of cash. During the
year
the Company did not maintain cash deposits at financial institutions in
excess of the $100,000 limit covered by the Federal Deposit Insurance
Corporation. The Company does not hold or issue financial instruments
for
trading purposes nor does it hold or issue interest rate or leveraged
derivative financial instruments
<PAGE>20
Stock-based Compensation
The Company adopted Statement of Financial Accounting Standard No. 123
(FAS
123), Accounting for Stock-Based Compensation beginning with the
Company's
first quarter of 1996. Upon adoption of FAS 123, the Company continued
to
measure compensation expense for its stock-based employee compensation
plans using the intrinsic value method prescribed by APB No. 25,
Accounting
for Stock Issued to Employees. Stock based compensation paid by the
Company during the period ended February 28, 1999 is disclosed in Note 4.
New Accounting Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines
for all items that are to be recognized under accounting standards as
components of comprehensive income to be reported in the financial
statements. The statement is effective for all periods beginning after
December 15, 1997 and reclassification financial statements for earlier
periods will be required for comparative purposes. To date, the
Company has not engaged in transactions which would result in any
significant difference between its reported net loss and comprehensive
net loss as defined in the statement.
In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use ("SOP 98-
1"). SOP 98-1 provides authoritative guidance on when internal-use
software costs should be capitalized and when these costs should be
expensed as incurred.
Effective in 1998, the Company adopted SOP 98-1, however the Company
has not incurred costs to date which would require evaluation in
accordance with the SOP.
Effective December 31, 1998, the Company adopted SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information
("SFAS 131"). SFAS 131 superseded SFAS No. 14, Financial Reporting
for Segments of a Business Enterprise. SFAS 131 establishes standards
for the way that public business enterprises report information about
operating segments in annual financial statements and requires that
those enterprises report selected information about operating
segments in interim financial reports. SFAS 131 also establishes
standards for related disclosures about products and services,
geographic areas, and major customers. The adoption of SFAS 131 did
not affect results of operations or financial position. To date, the
Company has not operated in its one planned business activity.
Effective December 31, 1998, the Company adopted the provisions of
SFAS No. 132, Employers' Disclosures about Pensions and Other Post-
retirement Benefits ("SFAS 132"). SFAS 132 supersedes the disclosure
requirements in SFAS No. 87, Employers' Accounting for Pensions, and
SFAS No. 106, Employers' Accounting for Post-retirement Benefits
Other Than Pensions. The overall objective of SFAS 132 is to improve
and standardize disclosures about pensions and other post-retirement
benefits and to make the required information more understandable.
The adoption of SFAS 132 did not affect results of operations or
financial position.
The Company has not initiated benefit plans to date which would
require disclosure under the statement.
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities
("SFAS 133"), which is required to be adopted in years beginning
after June 15, 1999. SFAS 133 will require the Company to recognize
all derivatives on the balance sheet at fair value. Derivatives that
are not hedges must be adjusted to fair value through income. If the
derivative is a hedge, depending on the nature of the hedge, changes
in the fair value of derivatives will either be offset against the
change in fair value of hedged assets, liabilities, or firm
commitments through earnings or recognized in other comprehensive
income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be
immediately recognized in earnings. The Company has not yet
determined what the effect of SFAS 133 will be on earnings and the
financial position of the Company, however it believes that it has
not to date engaged in significant transactions encompassed by the
statement.
<PAGE>21
Note 2. Property.
Property at February 28, 1999 consists of the four mining claims
described in Note 1. The claims were acquired on November 23, 1999
pursuant to a purchase agreement between the Company and the R.E.
Hunt Trust (Hunt). The Company issued to Hunt 200,000 shares of its
restricted common stock in exchange for the claims. The claims were
valued at the fair value of the stock issued which was considered to
be the par value of the stock.
Hunt's basis in the claims could not be otherwise reasonably
established. Hunt's annual costs of maintaining the claims amounted
to an annual minimum of $100 per year per claim and no commercial
activity associated with the claims was carried on by Hunt in any
prior period.
Note 3. Organization costs.
The costs of the Company's corporate organization were paid by an
individual and amounted to $572. This amount was reimbursed to the
individual subsequent to February 28, 1999 and the amount has been
included in accounts payable at that date.
Note 4. Stockholders' Equity.
During the periods covered by these financial statements the Company
issued certain of its securities in reliance upon an exemption from
registration with the Securities and Exchange Commission. Although
the Company believes that the sales did not involve a public offering
and that it did comply with the exemptions from registration, it
could be liable for rescission of said sales if such exemption was
found not to apply. The Company has not received a request for
rescission of shares nor does it believe that it is probable that its
shareholders would pursue rescission nor prevail if such action were
undertaken
At inception, the Company issued 30,000 shares of it's restricted
common stock to three individuals who became its directors in
exchange for their services in forming the Company. The shares were
valued at par value.
On November 23, 1998, the Company issued 200,000 shares of its common
stock to Hunt in connection with the acquisition of the mining claims
described in Note 1. The shares were valued at par value. The
purchase agreement provides that Hunt give the Company options to
repurchase up to 150,000 of its shares from Hunt for a two year
period. The option price for 100,000 of the shares is $.25 per share
and $.50 per share for the remaining 50,000 shares. The options are
fully transferable by the Company.
The Company issued an aggregate of 935,000 units (each unit consisting of
two Common Shares, one class A warrant exercisable at $.50 for a period
of three years from the close of the offering, one class B warrant
exercisable at $.75 for a period of three years from the close of the
offering, and four class C warrants exercisable at $4.00 for a period of
five years from the close of the offering. All warrants are callable for
$.01 with 30 days notice. These units were issued for financial advisory
services, and accounting and management services including office costs
provided and to be provided to the Company by two independent
consultants. The consultant contracts are for a four month period and
were arranged during February 1999. The fair value of the shares issued
for the services amounted to $.10 per share and such value is consistent
with the cash amount paid by the Company's initial investors.
During the February 1999, the Company issued an aggregate of 440,000
shares of its common stock to a limited group of investors for cash
aggregating $44,000 in private sale transactions. The shares were
sold at a price of $.10 per share in a unit offering. Subsequent to
February 28, 1999, the Company sold an additional 70,000 shares under
identical terms. The units consist of two shares Common Stock, one
class A warrant exercisable at $.50 for a period of three years from
the close of the offering, one class B warrant exercisable at $.75
for a period of three years from the close of the offering, and four
class C warrants exercisable at $4.00 for a period of five years from
the close of the offering. All warrants are callable for $.01 with
30 days notice.
<PAGE>22
Note 5. Commitments and contingencies
In connection with the mining claims acquired, the Company is obligated
to pay an aggregate minimum of $400 per year for improvements.
<PAGE>23
PART III
ITEM 1. INDEX TO EXHIBITS
(3) Charter and By-Laws
(4) Instruments defining the rights of security holders
(10) Material Contracts
(27) Financial Data Schedule
ITEM 2. DESCRIPTION OF EXHIBITS
(3.1) Articles of Incorporation
(3.2) Bylaws
(4.1) Common Stock Certificate
[10.1] Agreement by and between the Company and the
RE Hunt Trust dated
[10.2] Consulting Agreement by and between the Company
and Joel R. Shine dated December, 1998
[10.3] Consulting Agreement by and between the Company
and Timothy Miles dated December, 1998
[27] Financial Data Schedule
<PAGE>24
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.
AURIC ENTERPRISES, INC.
Date: March 30, 1999 /s/ Robert Hinchey
By: Robert Hinchey, President
ARTICLES OF INCORPORATION
OF
Auric Enterprises, INC.
The undersigned natural person of the age of eighteen years or more,
acting as incorporator of a corporation under the provisions of the
Nevada Business Act of the State of Nevada, adopts the following Articles
of Incorporation for such corporation.
ARTICLE I
NAME
The name of the corporation is Auric Enterprises, Inc.
ARTICLE II
EXISTENCE AND DURATION
The period of duration of this corporation is perpetual.
ARTICLE III
PURPOSES AND POWERS
The purpose for which this corporation is organized is to engage in all
lawful business for which corporations may be incorporated pursuant to
the Nevada Business Corporation Act. In furtherance of its lawful
purposes, the corporation shall have and may exercise all rights, powers
and privileges now or hereafter exercisable by corporations organized
under the laws of Nevada. In addition, it may do everything necessary,
suitable, convenient or proper for the accomplishment of any of its
corporate purposes.
ARTICLE IV
CAPITALIZATION
(a) Authorized Shares. The aggregate number of shares which the
corporation shall have the authority to issue is 25,000,000 shares.
Twenty-five Million (25,000,000) shares shall be designated "Common
Stock", and shall have a par value of $.001, and shall be issued for such
consideration, expressed in dollars, as the Board of Directors may, from
time to time, determine.
(b) Consideration for Shares. All shares of Common Stock shall be issued
by the corporation for cash, property or services actually performed, for
no less than the par value of $.001 for Common Stock. All shares shall
be fully paid and non-assessable.
(c) Dividends. Dividends in cash, property or share of the corporation
may be paid upon the Common Stock, as and when declared by the Board of
Directors, out of funds of the corporation to the extent, and in the
manner permitted by law.
(d) Voting Rights & Cumulative Voting. Each outstanding share of Common
Stock shall be entitled to one vote, and each fractional share of Common
Stock shall be entitled to a corresponding fractional vote on each matter
submitted to a vote of shareholders. Cumulative voting shall not be
allowed in the election of directors of the corporation.
(e) Denial of Preemptive Rights. No holder of any shares of the
corporation, whether now or hereafter authorized, shall have any
preemptive or preferential right to acquire any shares or securities of
the corporation, including shares or securities held in the treasury of
the corporation.
(f) Dissolution or Liquidation. Upon any dissolution or liquidation,
whether voluntary or involuntary, the holders of preferred shares shall
be entitled to receive out of the assets of the Corporation, whether such
assets are capital or surplus, the sum initially paid per share and a
further amount equal to any dividend thereon declared and unpaid to the
date of such distribution, before any payment shall be made or any assets
distributed to the common stock shareholders. Upon any dissolution or
liquidation, whether voluntary or involuntary, if the assets thus
distributed among the holders of preferred shares are insufficient to
permit the payment to such shareholder of the full preferential amounts,
then the entire assets of the Corporation to be distributed shall be
distributed ratably among the holders of preferred shares and after
payment to the preferred shareholders of such preferential amounts, the
holders of common shares shall be entitled to receive ratably all the
remaining assets. A merger or consolidation of this corporation with or
into any other corporation or corporations shall not be deemed to be a
dissolution or liquidation within the meaning of this provision.
ARTICLE V
INITIAL OFFICE AND AGENT
The address of this corporation's initial registered office is 10 Office
Park Rd, Suite 222 Carolina Building, Hilton Head Island, SC 29928, and
the name of its initial registered agent is Laughlin Associates, Inc.
2533 North Carson Street, Carson City, NV 89706.
ARTICLE VI
PRINCIPAL OFFICE
The address of the principal office of the corporation is 10 Office Park
Rd, Suite 222 Carolina Building, Hilton Head Island, SC 29928. The
corporation may maintain such other offices, either within or out of the
State of Nevada, as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE VII
INITIAL BOARD OF DIRECTORS
The number of directors constituting the initial board of directors of
this corporation is three. The number of directors of this corporation
shall be not less than three; except there need be only as many directors
as there are shareholders in the event that the outstanding shares are,
or initially will be, held of record by fewer than three shareholders.
The names and addresses of the person who are to serve as directors until
the first annual meeting of shareholders or until their successors are
elected and qualified are:
Samantha Moody
2 Ocean Breeze
Hilton Head, SC 29928
Robert Hinchey
22 Woodbine Place
Hilton Head, SC 29928
Margo Knepp
11 San Pedro
Salinas, California 93901
ARTICLE VIII
INDEMNIFICATION
As the Board of Directors may from time to time provide in the By-Laws or
by resolution, the corporation may indemnify its officers, directors,
agents and other persons to the full extent permitted by the laws of the
State of Nevada.
ARTICLE IX
INCORPORATOR
The name and address of the incorporator is:
Joel R Shine
PO Box 5948
Hilton Head, SC 29938
Dated this day of October, 1998
/s/ Joel R. Shine
- ---------------------
Joel R Shine, Incorporator
STATE OF SOUTH CAROLINA )
)ss.
COUNTY OF BEUFORT )
I, , a Notary Public, hereby certify that Joel R Shine,
known to me to be the person whose name is subscribed to the annexed and
foregoing Articles of Incorporation, appeared before me this day of
October, 1998, in person and being by me first duly sworn, acknowledged
that he signed said Articles of Incorporation as his free and voluntary
act and deed for the uses and purposes therein set forth and that
statements therein contained are true.
My Commission Expires: .
Notary Public
Address
SEAL
BYLAWS OF
AURIC ENTERPRISES, INC.
A NEVADA CORPORATION
ARTICLE I
OFFICES
Section 1.01 Registered Office and Agent. The name of the registered
agent and the location of the registered office of the Corporation in the
State of Nevada shall be Laughlin Associates, 2533 North Carson Street,
Carson City, NV 89706, and such information shall be filed in the
appropriate office of the State of Nevada pursuant to applicable
provisions of law.
Section 1.02 Corporate Offices. The Corporation may have such
corporate offices within and outside the State of Nevada as the board of
directors from time to time may direct or the Corporation may require.
The principal office of the Corporation may be fixed and so designated
from time to time by the board of directors, but the location or
residence of the Corporation in Nevada shall be deemed for all purposes
to be in the county in which its principal office in Nevada is
maintained. The location of the principal office of the Corporation
shall be 10 Office Park Rd, Suite 222 Carolina Building, Hilton Head
Island, SC 29928.
Section 1.03 Records. The Corporation shall keep correct and complete
books and records of account, minutes of proceedings of its shareholders
and board of directors, and such other or additional records as may be
required by law. The Corporation shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, either within or outside Nevada, a record of its shareholders,
giving the names and addresses of all shareholders and the number and
class of the shares held by each.
ARTICLE II
SHAREHOLDERS' MEETINGS
Section 2.01 Place of Meeting. All meetings of the shareholders shall
be held at the principal office of the Corporation, unless the board of
directors designates some other place either within or outside the State
of Nevada. Unless specifically prohibited by law any meeting may be held
at any place and at any time and for any purpose if consented to in
writing by all of the shareholders entitled to vote at such meeting.
Section 2.02 Annual Meetings. An annual meeting of the shareholders
shall be held on the 1st day of August of each year, unless notified of
an alternate date in accordance with the provisions of these bylaws, at
3:00 p.m. for the purpose of electing directors and for the transaction
of such other business as may properly come before it. If such day is a
legal holiday, the meeting shall be on the next business day.
Section 2.03 Special Meetings. Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by statute, may
be called by the president, secretary or by the board of directors, and
shall be called by the president at the request of holders of not less
than 10% of all the outstanding shares of the Corporation entitled to
vote at the meeting. No business other than that specified in the notice
of the meeting shall be transacted at any such special meeting.
Section 2.04 Notice of Meetings. Written or printed notice stating the
place, day and hour of the meeting and, in case of a special meeting, the
purpose for which the meeting is called, shall be delivered not less than
ten days nor more than fifty days before the date of the meeting, either
personally or by mail, by or at the direction of the board of directors,
the president, the secretary, or the officer or person calling the
meeting to each shareholder of record entitled to vote at such meeting;
except that, if the authorized shares are to be increased at least thirty
days' notice shall be given.
Section 2.05 Fixing Record Date and Closing Transfer Books. The board
of directors may fix a date not less than ten nor more than fifty days
prior to any meeting as the record date for the purpose of determining
shareholders entitled to notice of and to vote at such meetings, of the
shareholders. The transfer books may be closed by the board of directors
for a stated period not to exceed fifty days for the purpose of
determining shareholders entitled to receive payment of any dividend or
in order to make a determination of shareholders for any other purpose.
In the absence of any action by the board of directors, the date upon
which the board of directors adopts the resolution declaring the dividend
shall be the record date.
Section 2.06 Voting Lists. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least
ten days before each meeting of the shareholders, a complete record of
the shareholders entitled to vote at the meeting or any adjournment
thereof, arranged in alphabetical order with the address of, and the
number of shares held by each. The record, for a period of ten days
before such meeting, shall be kept on file at the principal office of the
Corporation whether within or outside the State of Nevada, and shall be
subject to inspection by any shareholder for any purpose germane to the
meeting at any time during normal business hours. Such record shall also
be produced and kept open at the time and place of any purpose germane to
the meeting during the whole time of the meeting. The original stock
transfer book shall be prima facie evidence as to the shareholders who
are entitled to examine the record or transfer books or to vote any
meeting of shareholders.
Section 2.07 Quorum. The holders of a majority of the shares who are
entitled to vote at a shareholders meeting and who are present in person
or by proxy shall be necessary for and shall constitute a quorum for the
transaction of business at such meetings, except as otherwise provided by
statute, by the Articles of Incorporation or these Bylaws. If a quorum
is not present or represented at a meeting of the shareholders, those
present in person or represented by proxy shall have the power to adjourn
the meeting from time to time, without notice other than announcement at
the meeting, until a quorum is present or represented. At an adjourned
meeting where a quorum is present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 2.08 Majority Vote; Withdrawal of Quorum. When a quorum is
present at a meeting, the vote of the holders of a majority of the issued
and outstanding shares having voting power, present in person or
represented by proxy, shall decide any question brought before the
meeting, unless the question is one which, by express provision of the
statutes, the Articles of Incorporation or these Bylaws, requires a
higher vote in which case the express provision shall govern. The
shareholders present at a duly constituted meeting may continue to
transact business until adjournment, despite the withdrawal of enough
shareholders holding, in the aggregate, issued and outstanding shares
having voting power to leave less than a quorum.
Section 2.09 Proxies. At all meetings of shareholders, a shareholder
may vote in person or by proxy executed in writing by the shareholder or
by his or her duly authorized attorney in fact. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise
provided by the proxy. Each proxy shall be filed with the secretary of
the Corporation before or at the time of the meeting.
Section 2.10 Voting. Each issued and outstanding share is entitled to
its respective vote and each fractional share is entitled to a
corresponding fractional vote on each matter submitted to a vote at a
meeting of shareholders. The vote of a majority of the shares voting on
any matter at a meeting of shareholders at which a quorum is present
shall be the act of the shareholders on that matter, unless the vote of a
greater number is required by law, the Articles of Incorporation, or
these Bylaws. Voting on all matters except the election of directors
shall be by voice or by show of hands, unless the holders of one-tenth of
the shares represented at the meeting shall, prior to the voting on any
matter, demand a ballot vote on that particular matter.
(A) Neither treasury shares nor shares held by another
Corporation if the majority of the shares entitled to vote for the
election of directors of such other Corporation is held by the
Corporation shall be voted at any meeting or counted in determining the
total number of issued and outstanding shares at any given time.
(B) Shares standing in the name of another Corporation,
domestic or foreign, may be voted by such officer, agent or proxy as the
Bylaws of that Corporation may prescribe, or, in the absence of such
provision, as the board of directors of that Corporation may determine.
(C) Shares held by an administrator, executor,
guardian, or conservator may be voted by him or her, either in person or
by proxy, without the transfer of such shares into his name. Shares
standing in the name of a trustee may be voted by him or her, either in
person or by proxy, but no trustee shall be entitled to vote shares held
by him or her without a transfer of the shares into his or her name.
(D) Shares standing in the name of a receiver may be
voted by such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer into his or
her name if authority to do so is contained in an appropriate order of
the court by which the receiver was appointed.
(E) A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been transferred into
the name of the pledgee, and thereafter the pledgee shall be entitled to
vote the shares transferred.
(F) Redeemable shares which have been called for
redemption shall not be entitled to vote on any matter and shall not be
deemed issued and outstanding shares on and after the date on which
written notice of redemption has been mailed to shareholders and a sum
sufficient to redeem such shares has been deposited with a bank or trust
corporation with irrevocable instruction and authority to pay the
redemption price to the holders of the shares upon surrender of their
certificates.
Section 2.11 Action Without Meeting. Any action required by statute to
be taken at a meeting of the shareholders, or any action which may be
taken at a meeting of the shareholders, may be taken without a meeting if
a consent in writing, setting forth the action so taken, shall be signed
by all of the holders entitled to vote with respect to the subject matter
thereof and such consent shall have the same force and effect as a
unanimous vote of the shareholders. The consent may be in more than one
counterpart so long as each shareholder signs one of the counterparts.
The signed consent, or a signed copy shall be placed in the minutes book.
Section 2.12 Telephone and Similar Meetings. Shareholders may
participate in and hold a meeting by means of conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in such
a meeting shall constitute presence in person at the meeting, except
where a person participates in the meeting for the express purpose of
objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
Section 2.13 Order of Business at Meetings. The order of business at
annual meetings and so far as practicable at other meetings of
shareholders shall be as follows unless changed by the board of
directors: (a) call to order; (b) proof of due notice of meeting; (c)
determination of quorum and examination of proxies; (d) announcement of
availability of voting lists; (e) announcement of distribution of annual
statement; (f) reading and disposing of minutes of last meeting of
shareholders; (g) reports of officers and committees; (h) reports of
directors; (l) opening of polls for voting; (m) recess; (n) reconvening,
closing of polls; (o) report of voting inspectors; (p) other business;
and (q) adjournment.
ARTICLE III
BOARD OF DIRECTORS
Section 3.01 General Powers. The business and affairs of the
Corporation shall be managed by its board of directors. The directors
shall in all cases act as a board of directors, and they may adopt such
rules and regulations for the conduct of their meetings and the
management of the Corporation as they deem proper. Such rules and
regulations may not be inconsistent with these Bylaws, the Articles of
Incorporation, and the laws of Nevada.
Section 3.02 Number, Tenure and Qualifications. The number of
directors constituting the board of directors of this Corporation is
four. The number of directors of this Corporation shall not be less than
three; except that there need by only as many directors as there are
shareholders in the event that the issued and outstanding shares are held
of record by fewer than three shareholders. A director shall be elected
by the shareholders to serve until the next annual meeting of
shareholders, or until his or her death, or resignation and his or her
successor is elected. A director must be at least eighteen years of age
but need not be a shareholder in the Corporation nor a resident of the
State of Nevada.
Section 3.03 Change in Number. The number of directors may be
increased or decreased from time to time by amendment to these Bylaws but
no decrease shall have the effect of shortening the term of any incumbent
director. Any directorship to be filled by reason of an increase in the
number of directors shall be filled by election at an annual meeting or
at a special meeting of shareholders called for that purpose.
Section 3.04 Election of Directors. The directors shall be elected at
the annual meeting of shareholders and those persons who receive the
highest number of votes shall be deemed to have been elected. Election
of directors shall be by ballot.
Section 3.05 Cumulative Voting. Directors shall be elected by majority
vote. Cumulative voting shall not be permitted.
Section 3.06 Removal of Directors. A meeting called expressly for the
purpose of removing a director, the entire board of directors or any
lessor number may be removed, with or without cause, by a vote of the
holders of the majority of the shares then entitled to vote at an
election of directors. If any directors are so removed, new directors
may be elected at the same meeting.
Section 3.07 Resignation. Subject to Section 3.02, a director may
resign at any time by giving written notice to the board of directors,
the president, or the secretary of the Corporation and unless otherwise
specified in the notice, the resignation shall take effect upon receipt
thereof by the board of directors or such officer, and the acceptance of
the resignation shall not be necessary to make it effective.
Section 3.08 Vacancies. A vacancy occurring in the board of directors
may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the board of directors remains. A
director elected to fill a vacancy shall be elected for the unexpired
term of his or her predecessor in office. Any directorship to be filled
by reason of an increase in the number of directors shall be filled by
election at an annual meeting of shareholders or at a special meeting of
the shareholders called for that purpose. A director chosen to fill a
position resulting from an increase in the number of directors shall
holder office until his or her successor(s) shall have been qualified.
Section 3.09 Compensation. By resolution of the board of directors,
compensation may be paid to directors for their services. Also by
resolution of the board of directors, a fixed sum and expenses for actual
attendance at each regular or special meeting of the board of directors
may also be paid. Nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other capacity
and receiving compensation therefore. Members of the executive committee
or of special or standing committees may, by resolution of the board of
directors, be allowed like compensation for attending committee meetings.
Section 3.10 First Meeting. The first meeting of a newly elected board
shall be held without further notice immediately following the annual
meeting of shareholders, and it shall be at the same place, unless by
unanimous consent of the directors then electing and serving, the time or
place is changed.
Section 3.11 Regular Meetings. Regular meetings of the board of
directors may be held without notice at such time and place as shall from
time to time be determined by the board of directors.
Section 3.12 Special Meetings. Special meetings of the board of
directors may be called by the president on three days notice to each
director, either personally or by mail or by telegram. Special meetings
shall be called in like manner and on like notice on the written request
of two directors. Except as otherwise expressly provided by statute, the
Articles of Incorporation or these Bylaws, neither the business to be
transacted at, nor the purpose of, any special meeting need be specified
in a notice or waiver of notice.
Section 3.13 Quorum; Majority Vote. At meetings of the board of
directors a majority of the number of directors fixed by these Bylaws
shall constitute a quorum for the transaction of business. The act of a
majority of the directors present at a meeting at which quorum is not
present at a meeting of the board of directors, the directors present may
adjourn the meeting from time to time, without notice other than
announcement at the meeting until, a quorum is present.
Section 3.14 Procedure. The board of directors shall keep regular
minutes of its proceedings. The minutes shall be placed in the minutes
book of the Corporation.
Section 3.15 Action Without Meeting. Any action required or permitted
to be taken at a meeting of the board of directors may be taken without a
meeting if a consent in writing, setting forth the action so taken, is
signed by all members of the board of directors. Such consent shall have
the same force and effect as a unanimous vote at a meeting. The signed
consent, or a signed copy, shall be placed in the minutes book. The
consent may be in more than one counterpart so long as each director
signs one of the counterparts.
Section 3.16 Telephone and Similar Meetings. Directors may participate
in and hold a meeting by means of conference telephone or similar
communications equipment by means of which all persons participating in
the meeting can hear each other. Participation in such a meeting shall
constitute presence in person at the meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not
lawfully called or convened.
Section 3.17 Interested Directors and Officers.
(A) No contract or transaction between the
Corporation and one or more of its directors or officers, or any other
corporation, firm, association, partnership or entity in which one or
more of its directors or officers are directors or officers or are
financially interested shall be either void or voidable solely because of
such relationship or interest or solely because such directors or
officers are present at the meeting of the board of directors or a
committee thereof which authorizes, approves, or ratifies such contract
or transaction or solely because their votes are counted for such
purposes if:
(1) the fact of the common directorship or
financial interest is disclosed to or known by the board of directors or
committee and noted in the minutes, and the board or committee which
authorizes, approves, or ratifies the contract or transaction by a vote
sufficient for the purpose without counting the votes or consents of such
interested directors; or
(2) the material facts of such relationship
or financial interest is disclosed to or known by the shareholders
entitled to vote thereon and they authorize, approve or ratify such
contract or transaction in good faith by a majority vote or written
consent of shareholders holding a majority of the shares the votes of the
common or interested directors or officers shall be counted in any such
vote of shareholders; or
(3) the contract or transaction is fair and
reasonable to the Corporation.
(B) Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board of
directors or a committee thereof which authorizes, approves or ratifies
such contract or transaction.
ARTICLE IV
EXECUTIVE COMMITTEE
Section 4.01 Designation. The board of directors may from time to
time, by resolution adopted by a majority of the whole board, designate
an executive committee.
Section 4.02 Number; Qualification and Term. The executive committee
shall consist of one or more directors, one of whom shall be the
president of the executive committee. The executive committee shall
serve at the pleasure of the board of directors.
Section 4.03 Authority. The executive committee, to the extent
provided in such resolution, shall have and may exercise all of the
authority of the board of directors in the management of the business and
affairs of the Corporation, including authority over the use of the
corporate seal. However, the executive committee shall not have the
authority of the board of directors in reference to: (a) amending the
Articles of Incorporation; (b) approving a plan of merger or
consolidation; (c) recommending to the shareholders the sale, lease or
exchange of all or substantially all of the property and assets for the
corporation other than in the usual and regular course of its business;
(d) recommending to the shareholders a voluntary dissolution of the
Corporation or a revocation thereof; (e) amending, altering, or repealing
these Bylaws or adopting new Bylaws; (f) filling vacancies in or removing
members of the board of directors or of any committee appointed by the
board of directors; (g) electing or removing officers or members of any
such committee; (h) fixing the compensation of any member of such
committee; (i) altering or repealing any resolution of the board of
directors which by its terms provides that it shall not be so amendable
or repealable; (j) declaring a dividend; or (k) authorizing the issuance
of shares of the Corporation.
Section 4.04 Change in Number. The number of executive committee
members may be increased or decreased from time to time by resolution
adopted by a majority of the board of directors.
Section 4.05 Removal. Any member of the executive committee may be
removed by the board of directors by the affirmative vote of the majority
of the board of directors, whenever in its judgment the best interests of
the Corporation will be served thereby.
Section 4.06 Vacancies. A vacancy occurring in the executive committee
(by death, resignation, removal or otherwise) may be filled by the board
of directors in the manner providing for original designation in Bylaw
Section 4.01.
Section 4.07 Resignation. A committee member may resign by giving
written notice to the board of directors, the president or the secretary
of the Corporation. The resignation shall take effect at the time
specified in it, or immediately if no time is specified. Unless it
specifies otherwise, a resignation takes effect without being accepted.
Section 4.08 Meetings. Time, place and notice (if any) of executive
committee meetings shall be determined by the executive committee.
Section 4.09 Quorum; Majority Vote. At meetings of the executive
committee, a majority of the number of members designated by the board of
directors shall constitute a quorum for the transaction of business. The
act of a majority of the members present at any meeting at which a quorum
is present shall be the act of the executive committee, except as
otherwise specifically provided by statute, the Articles of Incorporation
or these Bylaws. If a quorum is not present at a meeting of the
executive committee, the members present may adjourn the meeting from
time to time, without notice other than an announcement at the meeting,
until a quorum is present.
Section 4.10 Compensation. By resolution of the board of directors,
compensation may be paid to members of the executive committee for their
services. Also by resolution of the board of directors, a fixed sum and
expenses for actual attendance at each regular or special meeting of the
executive committee may also be paid.
Section 4.11 Procedure. The executive committee shall keep regular
minutes of its proceedings and report the same to the board of directors
when required. The minutes of the proceedings of the executive committee
shall be placed in the minutes book of the Corporation.
Section 4.12 Action Without Meeting. Any action required or permitted
to be taken at a meeting of the executive committee may be taken without
a meeting if a consent in writing, setting forth the action so taken, is
signed by all the members of the executive committee. Such consent shall
have the same force and effect as a unanimous vote at a meeting. The
signed consent, or a signed copy, shall be placed in the minutes book.
Section 4.13 Telephone and Similar Meetings. Members of the executive
committee may participate in and hold a meeting by means of conference
telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other. Participation
in such a meeting shall constitute presence in person at the meeting,
except where a person participates in the meeting for the express purpose
of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
Section 4.14 Responsibility. The designation of an executive committee
and the delegation of authority to it shall not operate to relieve the
board of directors, or any member thereof, of any responsibility imposed
upon it, him or her by law.
ARTICLE V
NOTICE
Section 5.01 Method. Whenever by statute, the Articles of
Incorporation, these Bylaws or otherwise, notice is required to be given
to a shareholder, director or committee member, and no provision is made
as to how the notice shall be given, it shall not be construed to mean
personal notice, but any such notice may be given: (a) in writing, by
United States mail, certified, return receipt requested, postage prepaid,
addressed to the shareholder, director or committee member at the address
appearing on the books of the Corporation; or (b) in any other method
permitted by law. Any notice required or permitted to be given by mail
shall be deemed given at the time when the same is deposited in the
United States mails.
Section 5.02 Waiver. Whenever by statute, the Articles of
Incorporation or these Bylaws, notice is required to be given to a
shareholder, committee member or director, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before
or after the time stated in such notice, shall be equivalent to the
giving of such notice. Attendance at a meeting shall constitute a waiver
of notice of such meeting, except where a person attends for the express
purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
ARTICLE VI
OFFICERS AND AGENTS
Section 6.01 Number, Qualification; Election; Term.
(A) The Corporation shall have:
(1) a president, a vice president, a secretary and a treasurer; and
(2) such other officers (including a chairman of the board of
directors and additional Vice Presidents) and assistant officers and
agents as the board of directors may deem necessary.
(B) No officer or agent need be a shareholder, a director or a
resident of the state of incorporation.
(C) Officers named in Bylaw Section 6.01(A)(1) shall be elected by
the board of directors on the expiration of an officer's term or whenever
a vacancy exists. Officers and agents named in Bylaw Section 601(A)(2)
may be elected by the Board of Directors at any meeting.
(D) Unless otherwise specified by the board of directors at the time
of election or appointment, or in an employment contract approved by the
board of directors, each officer's and agent's term shall end at the
first meeting of directors held after each annual meeting of the
shareholders. He shall serve until the end of his or her term, or if
earlier, until his or her death, resignation or removal.
(E) Any two or more offices may be held by the same person, except
that the president and the secretary shall not be the same person.
Section 6.02 Election and Term of Office. The officers of the
Corporation shall be elected annually by the board of directors at the
first meeting of the board of directors held after each annual meeting of
the shareholders. If the election of officers shall not be held at such
meeting, such election shall be held as soon thereafter as convenient.
Each officer shall hold office until his or her successor shall have been
duly elected and shall have qualified or until his or her death or until
he or she shall resign or shall have been removed in the manner
hereinafter provided.
Section 6.03 Resignation. Any officer may resign at any time by
delivering a written resignation either to the board of directors, the
president or the secretary of the Corporation. The resignation shall
take effect at the time specified therein or immediately if no time is
specified. Unless it specifies otherwise, a resignation takes effect
without being accepted.
Section 6.04 Removal. Any officer or agent elected or appointed by the
board of directors may be removed by the board of directors, whenever, in
its judgment, the best interest of the Corporation will be served
thereby, but such removal shall be without prejudice to the contractual
rights, if any, of the person so removed.
Section 6.05 Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, creation of a new office, or
otherwise, may be filled by the board of directors for the unexpired
portion of the term.
Section 6.06 Salaries and Compensation. The salaries or other
compensation of the officers of the Corporation shall be fixed from time
to time by the board of directors, except that the board of directors may
delegate to any person or group of persons the duty of fixing salaries or
other compensation by reason of the fact that he or she is also a
director of the Corporation.
Section 6.07 Surety Bonds. In the event the board of directors shall
so require, any officer or agent of the Corporation shall execute to the
Corporation a bond in such sums and with such surety or sureties as the
board of directors may direct, conditioned upon the faithful performance
of his or her duties to the Corporation, including responsibility for
negligence and for the accounting for all property, monies, or securities
of the Corporation which may come into his or her hands.
Section 6.08 President.
(A) The president shall be the chief executive and administrative
officer of the Corporation.
(B) The president shall preside at all meetings of the shareholders,
and, in the absence of the chairman of the board of directors, at
meetings of the board of directors.
(C) The president shall exercise such duties as customarily pertain to
the office of the president and shall have general and active supervision
over the property, business and affairs of the Corporation and over its
several officers.
(D) The president may appoint officers, agents, or employees other than
those appointed by the board of directors.
(E) The president may sign, execute and deliver in the name of the
Corporation powers of attorney, contracts, bonds and other obligations,
and shall perform such other duties as may be prescribed from time to
time by the board of directors or by the Bylaws.
Section 6.09 Vice President. The vice president(s) in the order of
their seniority, unless otherwise determined by the board of directors,
shall, in the absence or disability of the president, perform the duties
and have the authority and exercise the powers of the president. They
shall perform such other duties and have such other authority and powers
as the board of directors may from time to time prescribe or as the
president may from time to time delegate.
Section 6.10 Secretary.
(A) The secretary shall keep the minutes of all meetings of the
shareholders and of the board of directors and, to the extent ordered by
the board of directors or the president, the minutes of meetings of all
committees.
(B) The secretary shall cause notice to be given of meetings of
shareholders, of the board of directors, and of any committee appointed
by the board of directors.
(C) The secretary shall have custody of the corporate seal and general
charge of the records, documents and papers of the Corporation not
pertaining to the performance of the duties vested in other officers,
which shall at all reasonable times be open to the examination of any
director.
(D) The secretary may sign or execute contracts with the president in
the name of the Corporation and affix the seal of the Corporation
thereto.
(E) The secretary shall perform such other duties as may be prescribed
from time to time by the board of directors or the Bylaws.
Section 6.11 Assistant Secretary. The assistant secretaries in the
order of their seniority, unless otherwise determined by the board of
directors, shall, in the absence or disability of the secretary, perform
the duties and have the authority and exercise the powers of the
secretary. They shall perform other duties and have such other powers as
the board of directors may from time to time prescribe or as the
president may from time to time delegate.
Section 6.12 Treasurer.
(A) The treasurer shall have general custody of the collection and
disbursements of funds of the Corporation.
(B) The treasurer shall endorse on behalf of the Corporation for
collection, checks, notes and other obligations, and shall deposit the
same to the credit of the Corporation in such bank or banks or
depositories as the board of directors may direct.
(C) The treasurer may sign, for the president and other persons as may
be designated for the purpose by the board of directors, all bills of
exchange or promissory notes of the Corporation.
(D) The treasurer shall enter or cause to be entered regularly in the
books of the Corporation a full and accurate account of all monies
received and paid by him or her on account of the Corporation; shall at
all times exhibit his or her books and accounts to any director of the
Corporation upon application at the office of the Corporation during
business hours; and, whenever required by the board of directors or the
president, shall render statements of his or her accounts. The treasurer
shall perform such other duties as may be prescribed from time to time by
the board of directors or by the Bylaws.
(E) If the board of directors require, the treasurer shall give bond
for the faithful performance of his or her duties in such sum and with or
without such surety as shall be approved by the board of directors.
Section 6.13 Assistant Treasurer. The assistant treasurers in the
order of their seniority, unless otherwise determined by the board of
directors, shall, in the absence or disability of the treasurer, perform
the duties and have the authority and exercise the powers of the
treasurer. They shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe or the
president may from time to time delegate.
Section 6.14 Registered Agent. The Registered Agent shall serve as the
agent of the Corporation for purposes of receiving service of process or
any demand or notice authorized by law to be served on the Corporation.
Section 6.15 Other Officers. Other officers shall perform such duties
and have such powers as may be assigned to them by the board of directors
or the president.
Section 6.16 Delegation of Duties. If any officer of the Corporation
is absent or unable to act for any other reason the board of directors
may deem sufficient, the board of directors may delegate, for a period of
time, some or all of the functions, duties, powers and responsibilities
of any officer to any other officer, agent or employee of the Corporation
or other responsible person, provided a majority of the whole board of
directors concurs therein.
ARTICLE VII
CONTRACTS, LOANS, DEPOSITS AND CHECKS
Section 7.01 Contracts. The board of directors may authorize any
officer or officers, agent or agents, to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the
Corporation and such authority may be general or confined to specific
instances.
Section 7.02 Loans. No loans or advances shall be contracted on behalf
of the Corporation; on negotiable paper or other evidence of its
obligation under any loan or advance shall be issued in its name, and no
property of the Corporation shall be mortgaged, pledged, hypothecated, or
transferred as security for the payment of any loan, advance,
indebtedness or liability of the Corporation unless and except as
authorized by the board of directors. Any such authorization may be
general or confined to specific instances.
Section 7.03 Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositories as the
board of directors may select, or as may be selected by an officer or
agent authorized to do so by the board of directors.
Section 7.04 Checks and Drafts. All notes, drafts, acceptances,
checks, endorsements, and evidences of indebtedness of the Corporation
shall be signed by such officer or officers, or such agent or agents of
the Corporation and in such manner as the board of directors from time to
time may determine.
ARTICLE VIII
CAPITAL STOCK
Section 8.01 Certificates. Certificates representing shares of the
Corporation shall be issued, in such form as the board of directors shall
determine, to every shareholder for the fully paid shares owned by him.
These certificates shall be signed by the president and the secretary.
They shall be consecutively numbered or otherwise identified; and the
name and address of the person to whom they are issued, with the number
of shares and the date of issue, shall be entered on the stock transfer
books of the Corporation.
Section 8.02 Issuance. Shares (both treasury and authorized but
unissued) may be issued for such consideration (not less than par value)
and to such persons as the board of directors may determine from time to
time. Shares may not be issued until the full amount of the
consideration, fixed as provided by law, has been paid.
Section 8.03 Payment of Shares.
(A) The consideration for the issuance of shares shall consist of money
paid, labor done (including the services actually performed for the
Corporation) or property (tangible or intangible) actually received.
Neither promissory notes nor the promise of future services shall
constitute payment for shares.
(B) In the absence of fraud in the transaction, the judgment of the
board of directors as to the value of consideration received shall be
conclusive.
(C) When consideration, fixed as provided by law, has been paid, the
shares shall be deemed to have been issued and shall be considered fully
paid and nonassessable.
(D) The consideration received for shares shall be allocated by the
board of directors, in accordance with law, between stated capital and
capital surplus accounts.
Section 8.04 Subscriptions. Unless otherwise provided in the
subscription agreement, subscriptions for shares, whether made before or
after organization of the Corporation, shall be paid in full at such time
or in such installments and at such times as shall be determined by the
board of directors. Any call made by the board of directors for payment
of subscriptions shall be uniform as to all shares of the same series.
In case of default in the payment on any installment or call when payment
is due, the Corporation may proceed to collect the amount due in the same
manner as any debt due the Corporation.
Section 8.05 Lien. For any indebtedness of a shareholder to the
Corporation, the Corporation shall have a first and prior lien on all
shares of its stock owned by him or her and on all dividends or other
distributions declared thereon.
Section 8.06 Lost, Stolen or Destroyed Certificates. The Corporation
shall issue a new certificate in place of any certificate for shares
previously issued if the registered owner of the certificate: (a) makes
proof in affidavit form that it has been lost, destroyed or wrongfully
taken; (b) requests the issuance of a new certificate before the
Corporation has notice that the certificate has been acquired by a
purchaser for value in good faith and without notice of an adverse claim;
(c) gives a bond in such form, and with such surety or sureties, with
fixed or open penalty, as the Corporation may direct, to indemnify the
Corporation (and its transfer agent and registrar, if any) against any
claim that may be made on account of the alleged loss, destruction or
theft of the certificate; and (d) satisfies any other reasonable
requirements imposed by the Corporation. When a certificate has been
lost, apparently destroyed or wrongfully taken, and the holder of record
fails to notify the Corporation within a reasonable time after he or she
has notice of it, and the Corporation registers a transfer of the shares
represented by the certificate before receiving such notification, the
holder of record is precluded from making any claim against the
Corporation for the transfer or for a new certificate.
Section 8.07 Registration of Transfer. The Corporation shall register
the transfer of a certificate for shares presented to it for transfer if:
(a) the certificate is properly endorsed by the registered owner or by
his or her duly authorized attorney; (b) the signature of such person has
been notarized and reasonable assurance is given that such endorsements
are effective; (c) the Corporation has no notice of an adverse claim or
has discharged any duty to inquire into such a claim; (d) any applicable
law relating to the collection of taxes has been complied with; and (e)
there is an opinion of counsel satisfactory to counsel of the Corporation
that such transfer is made in accordance with all federal and state
securities regulations.
Section 8.08 Registered Owner. Prior to due presentment for
registration of transfer of a certificate for shares, the Corporation may
treat the registered owner as the person exclusively entitled to vote, to
receive notices and otherwise to exercise all the rights and powers of a
shareholder.
Section 8.09 Transfer of Shares. Transfer of shares of the Corporation
shall be made only in the stock transfer books of the Corporation by the
holder of record thereof or by his or her legal representative, who shall
furnish proper evidence of authority to transfer, or by his attorney
therein authorized by power of attorney duly executed and filed with the
secretary of the Corporation and on surrender for cancellation of the
certificate for such shares. The person in whose name the shares stand
on the books of the Corporation shall be deemed by the Corporation to be
the owner thereof for all purposes by the stock transfer books shall be
in the possession of the secretary or transfer agent or clerk of the
Corporation.
Section 8.10 Transfer Agent and Registrar. By resolution of the board
of directors, the Corporation may from time to time appoint a transfer
agent, and, if desired, a registrar, who will perform his or her duties
in accordance with the terms and conditions the board of directors deems
advisable; provided, however, that until and unless the board of
directors appoints some other person, firm or Corporation as its transfer
agent, the secretary of the Corporation shall act as transfer agent
without the necessity of any formal action of the board of directors and
he or she shall perform all of the duties thereof.
ARTICLE IX
INDEMNIFICATION
Section 9.01 Indemnification.
(A) No officer or director shall be personally liable for any
obligations of the Corporation or for any duties or obligation of the
Corporation or for any duties or obligations arising out of any actions
or conduct of such officer or director performed for or on behalf of the
Corporation.
(B) The Corporation shall and does hereby indemnify and hold harmless
each person and his or her heirs and administrators who shall serve at
any time hereafter as a director or officer of the Corporation from and
against any and all claims, judgments and liabilities to which such
person shall become subject by reason of his or her having heretofore or
hereafter been a director or officer of the Corporation or by reason of
any action alleged to have heretofore or hereafter been taken or admitted
to have been taken by him or her as such director or officer, and shall
reimburse each such person for all legal and other expenses reasonably
incurred by him or her in connection with any such claim or liability,
including power to defend such person from all suits or claims as
provided for under the laws of the State of Nevada; provided, however,
that no such person shall be indemnified against, or be reimbursed for,
any expense incurred in connection with any claim or liability arising
out of his or her negligence or willful misconduct. The rights accruing
to any person under the foregoing provisions of this section shall not
exclude any other right to which he or she may lawfully be entitled, nor
shall anything herein contained restrict the right of the Corporation to
indemnify or reimburse such person in any proper case, even though not
specifically herein provided. The Corporation, its directors, officers,
employees and agents shall be fully protected in taking any action or
making any payment in reliance upon the advice of counsel.
Section 9.02 Other Indemnification. The indemnification herein
provided shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any Bylaw, agreement, vote
of shareholders, or disinterested directors, or otherwise, both as to
action in his or her official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who
has ceased to be a director, officer, employee or agent, and shall inure
to the benefit of the heirs, executors and administrators of such person.
Section 9.03 Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation or is or who was serving at the
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status
as such, whether or not the Corporation would have the power to indemnify
him or her against liability under the provisions of this section or of
the laws of the State of Nevada.
Section 9.04 Settlement by Corporation. The right of any person to be
indemnified shall be subject always to the right of the Corporation by
its board of directors, in lieu of such indemnity, to settle any claim,
action, suit or proceeding at the expense of the Corporation by the
payment of the amount of such settlement and the cost and expense
incurred in connection therewith.
ARTICLE X
GENERAL PROVISIONS
Section 10.01 Dividends and Reserves.
(A) Subject to statute, the Articles of Incorporation and these
Bylaws, dividends may be declared by the board of directors at any
regular or special meeting and may be paid in cash, in property, or in
shares of the Corporation. The declaration and payment shall be at the
discretion of the board of directors.
(B) By resolution, the board of directors may create such reserve or
reserves out of the earned surplus of the Corporation as the directors
from time to time, in their discretion, think proper to provide for
contingencies, or to equalize dividends, or to repair or maintain any
property of the Corporation, or for any other purpose they think
beneficial to the Corporation. The directors may modify or abolish any
such reserve in the manner in which it was created.
Section 10.02 Books and Records. The Corporation shall keep correct
and complete books and records of account, shall keep minutes of the
proceedings of its shareholders and board of directors, and shall keep at
its registered office or principal place of business, or at the office of
its transfer agent or registrar, a record of its shareholders, giving the
names and addresses of all shareholders and the number and class of
shares held by each.
Section 10.03 Annual Statement. The board of directors shall mail to
each shareholder of record, at least ten days before each annual meeting
a full and clear statement of the business and condition of the
Corporation, including a reasonably detailed balance sheet, income
statement, surplus statement, and statement of changes in financial
position, for the last fiscal year and for the prior fiscal year, all
prepared in conformity with generally accepted accounting principals
applied on a consistent basis.
Section 10.04 Checks and Notes. Checks, demands for money and notes of
the Corporation shall be signed by officer(s) or other person(s)
designated from time to time by the board of directors.
Section 10.05 Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the board of directors.
Section 10.06 Seal. The corporate seal of the Corporation (of which
there may be one or more exemplars) shall contain the name of the
Corporation and the name of the state of incorporation. The seal may be
used by impressing it or reproducing a facsimile of it, or otherwise.
Section 10.07 Amendment of Bylaws.
(A) These Bylaws may be altered, amended or repealed at any meeting of
the board of directors at which a quorum is present, by the affirmative
vote of a majority of the directors present at such meeting, provided
notice of the proposed alteration, amendment, or repeal is contained in
the notice of the meeting.
(B) These Bylaws may also be altered, amended or repealed at any
meeting of the shareholders at which a quorum is present or represented,
by the affirmative vote of the holders of a majority of the shares
present or represented at the meeting and entitled to vote thereat,
provided notice of the proposed alteration, amendment or repeal is
contained in the notice of the meeting.
Section 10.08 Construction. Whenever the context so requires, the
masculine shall include the feminine and neuter, and the singular shall
include the plural, and conversely. If any portion of these Bylaws shall
be invalid or inoperative, then, so far as is reasonable and possible:
(a) the remainder of these Bylaws shall be considered valid and operative
and (b) effect shall be given to the intent manifested by the portion
held invalid or inoperative.
Section 10.09 Table of Contents; Headings. The table of contents and
headings are for organization, convenience and clarity. In interpreting
these Bylaws, they shall be subordinated in importance to the other
written material.
Section 10.10 Relation to Articles of Incorporation. These Bylaws are
subject to and governed by the Articles of Incorporation.
Adopted by the directors on this day of October, 1998.
/s/ Samantha Moody
- --------------------------
Samantha Moody, Director
/s/ Margot Knepp
- --------------------------
Margot Knepp, Director
/s/ Robert Hinchey
- --------------------------
Robert Hinchey, Director
NUMBER SHARES
AURIC ENTERPRISES, INC.
Incorporated Under the Laws of the State of Nevada
Common Stock Par Value $.001 CUSIP
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID and NON_ASSESABLE Shares of Auric Enterprises, Inc.,
transferable only on the books of the Corporation by the holder hereof in
person or by duly authorized attory upon surrender of this Certificate
properly endorsed. This certificate is not valid unless countersigned
and registered by the Transfer Agent and Registrar
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authoorized officers.
Samatha Moody Robert Hinchey
Secretary President
PURCHASE AGREEMENT
This purchase agreement is entered into between Auric Enterprises, Inc.
(Auric) and R.E. Hunt, (the "Agreement") with reference to the following
facts.
1. PURCHASE OF CLAIMS
Auric has agreed to purchase four mine claims located in Trinity County,
California, (Wild Mountain 1,2,3,4), from R.E. Hunt. For consideration
in the purchase, Auric will issue R.E. Hunt 200,000 shares of
unregistered common stock, subject to rule 144 of the Securities and
Exchange Act of 1933.
2. RIGHTS GRANTED TO AURIC BY R.E. HUNT
R.E. Hunt will grant Auric the right to assign the following options on
150,000 of the 200,000 shares issued to R.E. Hunt as consideration for
the prementioned claims:
An option to purchase from R.E. Hunt 100,000 shares of Auric
common stock at $.25 per share, exercisable for a period of two
years from the date of this agreement
An option to purchase from R.E. Hunt 50,000 shares of Auric
common stock at $.50 per share, exercisable for a period of two
years from the date of this agreement
3. NOTICES
Any notices from either party to the other shall be deemed received on
the date such notice is personally delivered. Any notice sent by fax
transmission shall be deemed received by the other party on the day it
has been transmitted. Any notice sent by mail by either party to the
other shall be deemed received on the third business day after is has
been deposited at a United States Post Office. For purposes of
delivering or sending notice to the parties to this Agreement such
notices shall be delivered or sent as follows:
If notice is delivered If notice is delivered
to Auric Enterprises to RE Hunt
Auric Enterprises, Inc. Hunt, R. E.
10 Office Park Road 17-777 Langlois Rd. #38
Suite 222 Carolina Bld Desert Hot Springs, Ca 92241
Hilton Head, SC 29928 Bus: (760) 329-6650
Phone: 843-686-5590
Fax: 843-686-5595
4. ENTIRE AGREEMENT
Neither party has made any representations to the other which are not
specifically set forth in this Agreement. There are no oral or other
agreements between the parties, which have been entered into prior or
contemporaneously with the formation of this Agreement. All oral
promises, agreements, representations, statements and warranties
hereinafter asserted by one party against the other shall be deemed to
have been waived by such party asserting that they were made and this
Agreement shall supersede all prior negotiations, statements
representations, warranties and agreements made or entered into between
the parties to this Agreement.
5. NO ASSIGNMENT
Neither party may assign any benefit due or delegate performance under
this Agreement without the express written consent of the other party.
6. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada. It shall also be construed as if the parties
participated equally in its negotiation and drafting. The Agreement shall
not be construed against one party over another party. Should a dispute
arise, both parties agree to submit to binding arbitration under the
guidelines of the American Arbitration Association or some other mutually
agreeable Arbitration Association.
7. WAIVER
The waiver of any provision of this Agreement by either party shall not
be deemed to be a continuing waiver or a waiver of any other provision of
this Agreement by either party.
8. SERVERABILITY
If any provision of this Agreement or any subsequent modifications hereof
are found to be unenforceable by a court of competent jurisdiction, the
remaining provisions shall continue to remain in full force and effect.
9. AUTHORITY TO ENTER INTO AGREEMENT
Robert Hinchey, signing this Agreement below represent to RE Hunt that he
has the authority to bind Auric Enterprises to the terms and conditions
of this Agreement. Robert Hinchey shall not, however have personal
liability by executing this Agreement and sign this Agreement only in his
representative capacities as an authorized officer of Auric Enterprises,
Inc.
Dated this of December, 1998 Dated this of December, 1998
Auric Enterprises, Inc.
by___________________________ ________________________
Robert Hinchey, President RE Hunt
CONSULTING AGREEMENT
This Consulting Agreement is entered into between Joel R Shine and Auric
Enterprises, Inc. (Client), (the "Agreement") with reference to the
following facts.
Client has expressed a desire to enter into this Agreement with Joel R
Shine for Joel R Shine to provide accounting and administrative services
the ("the Services")for the Client (the "Services"). Joel R Shine is in
the business of providing such services and desires to enter into an
Agreement with Client to provide such "Services". This Agreement is for
the purpose of defining the services provided and the rights and
responsibilities of both parties.
1. SERVICES PROVIDED BY Joel R Shine.
1. Joel R Shine will provide various accounting and administrative
services for the Client, including drawing up for the Company a set of
books and maintaining the books for a period of six months.
2. Joel R Shine agrees to provide consulting services on an as needed
basis to Client for a period of six months from this Agreement. Joel R
Shine and will make itself available to render advice to Client
concerning but not limited to accounting, administrative work, and any
other subjects as may fall under the services provided within this
contract.
2. RESPONSIBILITIES OF CLIENT
1. Client agrees to provide Joel R Shine such financial, business and
other material and information about Client, its products, services,
contracts, litigation, patents, trademarks and other such business
matters which Joel R Shine may request and which Joel R Shine
considers to be important and material information for the completion
of this contract.
2. Client agrees to provide Joel R Shine and/or Client's attorneys and
accountants all material requested in order to prepare the companies
books. These materials include but are not limited to: articles of
incorporation and all amendments thereto, by laws of the corporation,
its minutes and resolutions of all shareholders and board of
directors meetings, a copy of the share register showing the names,
addresses and social security number of shareholders and the dates of
issuance and the numbers of shares owned by each shareholder, the
names and addresses of all officers and directors of the corporation,
a resume for each officer and director of the corporation and audited
financial statements providing balance sheets for the two previous
years and Statement of Operations for the three previous years.
3. CASH COMPENSATION
Joel R Shine will receive a total fee of $5,000 for the above services
rendered. Fee does not include any preapproved expenses incurred by Joel
R Shine. The cash portion of the fees are only to be paid from the
proceeds of the offering.
4. CONVERSION TO EQUITY
Joel R Shine may at its option convert up to $5,000 of its fees into
Units of Client pursuant to a 504 offering.
5. REPRESENTATIONS BY Joel R Shine
LPE represents warrants and covenants the following:
1. Joel R Shine will disclose to Client all material facts and
circumstances which may affect its ability to perform its undertaking
herein.
2. Joel R Shine will cooperate in a prompt and professional manner with
Client, its attorneys, accountants and agents in the performance of
this Agreement.
6. REPRESENTATIONS OF CLIENT
Client represents warrants and covenants the following:
1. Corporation will cooperate fully with Joel R Shine in executing the
responsibilities required under this contract so that Joel R Shine
may fulfill its responsibilities in a timely manner.
2. Client will not circumvent this Agreement either directly or
indirectly nor will it interfere with, impair, delay or cause Joel R
Shine to perform work not described in this Agreement.
3. Client and each of its subsidiaries is a corporation duly organized
and existing under the laws of its state of incorporation and is in good
standing with the jurisdiction of its incorporation in each state where
it is required to be qualified to do business.
4. Client's articles of incorporation and bylaws delivered pursuant to
this Agreement are true and complete copies of same and have been duly
adopted.
5. Client will cooperate in a prompt and professional manner with Joel R
Shine, his attorneys, accountants and agents during the performance of
the obligations due under this Agreement.
6. Client represents that no person has acted as a finder or investment
advisor in connection with the transactions contemplated in this letter
other than those listed on Exhibit A, and Client will indemnify Joel R
Shine with respect to any claim for a finders fee in connection with this
Agreement. Client represents that no officer, director or stockholder of
the company is a member of the NASD, an employee or associated member of
the NASD, or an employee or associated person or member of the NASD.
Client represents that is separately has disclosed to Joel R Shine all
potential conflicts of interest involving officers, directors, principal
stockholders and/or employees.
7. CONFIDENTIALITY
Joel R Shine agrees that all information received from Client shall be
treated as confidential information and Joel R Shine shall not share such
information with any other person or entity, except the SEC, attorneys
and accountants, without the express written consent of Client, unless
such disclosure clearly will not cause damages to Client.
Client agrees not to divulge each and any named source (lending,
institutions, investors, individuals, Brokers, etc.) which have been
introduced by Joel R Shine for a period of one year from the execution of
this Agreement. Furthermore, Client agrees not to circumvent, either
directly or indirectly, the relationship that each Joel R Shine has with
said sources.
8. NOTICES
Any notices from either party to the other shall be deemed received on
the date such notice is personally delivered. Any notice sent by fax
transmission shall be deemed received by the other party on the day it
has been transmitted. Any notice sent by mail by either party to the
other shall be deemed received on the third business day after is has
been deposited at a United States Post Office. For purposes of
delivering or sending notice to the parties to this Agreement such
notices shall be delivered or sent as follows:
If notice is delivered If notice is delivered
to Joel R Shine to Client
Joel R Shine Auric Enterprises, Inc.
PO Box 5948 Carolina Bldg. Suite 222
Hilton Head Is, SC 29938 10 Office Park Rd.
Phone 843-683-5635 PO Box 7571
Hilton Head Island, SC 29938
Phone 803-686-5590
Fax # 803-686-5595
9. ENTIRE AGREEMENT
Neither party has made any representations to the other which are not
specifically set forth in this Agreement. There are no oral or other
agreements between the parties which have been entered into prior or
contemporaneously with the formation of this Agreement. All oral
promises, agreements, representations, statements and warranties
hereinafter asserted by one party against the other shall be deemed to
have been waived by such party asserting that they were made and this
Agreement shall supersede all prior negotiations, statements
representations, warranties and agreements made or entered into between
the parties to this Agreement.
10. NO ASSIGNMENT
Neither party may assign any benefit due or delegate performance under
this Agreement without the express written consent of the other party.
11. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of South Carolina. It shall also be construed as if the
parties participated equally in its negotiation and drafting. The
Agreement shall not be construed against one party over another party.
Should a dispute arise, both parties agree to submit to binding
arbitration under the guidelines of the American Arbitration Association
or some other mutually agreeable Arbitration Association.
12. WAIVER
The waiver of any provision of this Agreement by either party shall not
de deemed to be a continuing waiver or a waiver of any other provision of
this Agreement by either party.
13. SEVERABILITY
If any provision of this Agreement or any subsequent modifications hereof
are found to be unenforceable by a court of competent jurisdiction, the
remaining provisions shall continue to remain in full force and effect.
14. AUTHORITY TO ENTER INTO AGREEMENT
The individuals signing this Agreement below represent to each other that
they have the authority to bind their respective corporations to the
terms and conditions of this Agreement. The individuals shall not,
however have personal liability by executing this Agreement and sign this
Agreement only in their representative capacities as authorized officers
of the Client and Joel R Shine respectively.
Dated this of December, 1998 Dated this of December, 1998
Joel R Shine Auric Enterprises, Inc.
By By
Joel R Shine Robert Hinchey, President
CONSULTING AGREEMENT
This Consulting Agreement is entered into between Timothy Miles and Auric
Enterprises, Inc.(Client), (the "Agreement") with reference to the
following facts.
Client has expressed a desire to enter into this Agreement with Timothy
Miles for Timothy Miles to provide consulting services through which
Client will become a publicly traded company (the "Services"). Timothy
Miles is in the business of providing such services and desires to enter
into an Agreement with Client to provide such "Services". This Agreement
is for the purpose of defining the services provided and the rights and
responsibilities of both parties.
1. SERVICES PROVIDED BY Timothy Miles.
3. Timothy Miles will recommend a structure for Client's entry into the
public market. This structure will be approved by Client. The structure
will include distribution to shareholders, creditors, and other parties
and will include agreed upon capital formation requirements of Client.
4. Timothy Miles will interact with Clients attorney for the
preparation of a 504 or similar offering prospectus. If requested,
Timothy Miles will use its expertise and contacts to locate a suitable
securities attorney to represent client.
5. Timothy Miles will, if requested, arrange to be provided, such
accounting services as necessary to complete audits of Client's books in
order to proceed with the preparation and filing of the registration.
6. Timothy Miles will locate, if appropriate, suitable individuals to
serve as directors of Clients company. These directors will have relevant
experience either to Clients industry, accounting or public markets to
encourage market support for Clients stock.
7. Timothy Miles will interact with Clients securities attorney for the
preparation and filing of a Registration Statement on Form SB2 with the
Securities and Exchange Commission (SEC). Securities to be registered in
said registration include the stock issued to Timothy Miles, and other
such stock as agreed upon by both parties.
8. Timothy Miles will use its contacts and expertise to locate a
suitable investor relations firm to represent client and will interact
with the firm to cause to be prepared such packaging and promotional
materials as Timothy Miles, the investor relations firm and Client deem
necessary.
9. Timothy Miles will prepare a form 15c2-11 and coordinate its
distribution to the brokerage community at its own expense for the
purpose of establishing a market for the stock and arrange a listing on
the Over the Counter Market.
10. Timothy Miles agrees to use its expertise and business contacts to
locate a suitable broker relations firm to represent Client. Timothy
Miles will interact with the broker relations firm for the purpose of
developing market support and/or an underwriter for the Client's
offering.
11. Timothy Miles agrees interact with the Client's investor relations
firm to assure the continued promotion of Client's stock. This promotion
will be evidenced by the implementation of a financial relations program
created by the IR firm in conjunction with Timothy Miles and Client.
12. Timothy Miles agrees to arrange for the inclusion of the Company in
Moody's company listing services or another comparable service for the
purpose of expanding the marketability of the stock. Timothy Miles will
obtain the application for the Client and assist the Client in preparing
the applications.
13. Timothy Miles agrees to provide consulting services on an as needed
basis to Client for a period of 1 year from this Agreement. Timothy Miles
and will make itself available to render advice to Client concerning but
not limited to shareholder relations, market strategy, broker relations
and additional capitalization and any other subjects as may fall under
the services provided within this contract.
2. RESPONSIBILITIES OF CLIENT
1. Client agrees to provide Timothy Miles such financial, business
and
other material and information about Client, its products, services,
contracts, litigation, patents, trademarks and other such business
matters which Timothy Miles may request and which Timothy Miles
considers to be important and material information for the completion
of this contract.
2. Client agrees to provide Timothy Miles and/or Client's attorneys
and
accountants all material requested in order to prepare the
registration documents. These materials include but are not limited
to: articles of incorporation and all amendments thereto, by laws of
the corporation, its minutes and resolutions of all shareholders and
board of directors meetings, a copy of the share register showing the
names, addresses and social security number of shareholders and the
dates of issuance and the numbers of shares owned by each
shareholder, the names and addresses of all officers and directors of
the corporation, a resume for each officer and director of the
corporation and audited financial statements providing balance sheets
for the two previous years and Statement of Operations for the three
previous years.
3. Client agrees to provide Timothy Miles with monthly financial
statements containing Balance Sheets and Profit and Loss statements
utilizing "GAP" accounting until the effective date of the
registration and the Client also agrees to notify Timothy Miles of
any changes in the status or nature of its business, any litigation,
or any other developments that may require further disclosure in the
registration or other documents.
3. CASH COMPENSATION
Timothy Miles will receive a total fee of $97,500 for the above services
rendered. Fee does not include any preapproved expenses incurred by
Timothy Miles. $87,500 of the fees are to be paid from the proceeds of
the offering.
4. CONVERSION TO EQUITY
Timothy Miles may at its option convert up to $87,500 of its fees into
common stock of Client pursuant to a 504 offering.
5. REPRESENTATIONS BY Timothy Miles
Timothy Miles represents warrants and covenants the following:
1. Timothy Miles will disclose to Client all material facts and
circumstances which may affect its ability to perform its undertaking
herein.
2. Timothy Miles will cooperate in a prompt and professional manner
with
Client, its attorneys, accountants and agents in the performance of
this Agreement.
6. REPRESENTATIONS OF CLIENT
Client represents warrants and covenants the following:
7. Corporation will cooperate fully with Timothy Miles in executing the
responsibilities required under this contract so that Timothy Miles may
fulfill its responsibilities in a timely manner.
8. Client will not circumvent this Agreement either directly or
indirectly nor will it interfere with, impair, delay or cause Timothy
Miles to perform work not described in this Agreement.
9. Client and each of its subsidiaries is a corporation duly organized
and existing under the laws of its state of incorporation and is in good
standing with the jurisdiction of its incorporation in each state where
it is required to be qualified to do business.
10. Client's articles of incorporation and bylaws delivered pursuant to
this Agreement are true and complete copies of same and have been duly
adopted.
11. Client will cooperate in a prompt and professional manner with
Timothy Miles, its attorneys, accountants and agents during the
performance of the obligations due under this Agreement.
12. Client represents that no person has acted as a finder or investment
advisor in connection with the transactions contemplated in this letter,
and Client will indemnify Timothy Miles with respect to any claim for a
finders fee in connection with this Agreement. Client represents that no
officer, director or stockholder of the company is a member of the NASD,
an employee or associated member of the NASD, or an employee or
associated person or member of the NASD. Client represents that is
separately has disclosed to Timothy Miles all potential conflicts of
interest involving officers, directors, principal stockholders and/or
employees.
7. CONFIDENTIALITY
Timothy Miles agrees that all information received from Client shall be
treated as confidential information and Timothy Miles shall not share
such information with any other person or entity, except the SEC,
attorneys and accountants, without the express written consent of Client,
unless such disclosure clearly will not cause damages to Client.
Client agrees not to divulge each and any named source (lending,
institutions, investors, individuals, Brokers, etc.) which have been
introduced by Timothy Miles for a period of one year from the execution
of this Agreement. Furthermore, Client agrees not to circumvent, either
directly or indirectly, the relationship that each Timothy Miles has with
said sources.
8. NOTICES
Any notices from either party to the other shall be deemed received on
the date such notice is personally delivered. Any notice sent by fax
transmission shall be deemed received by the other party on the day it
has been transmitted. Any notice sent by mail by either party to the
other shall be deemed received on the third business day after is has
been deposited at a United States Post Office. For purposes of
delivering or sending notice to the parties to this Agreement such
notices shall be delivered or sent as follows:
If notice is delivered to If notice is delivered to
Timothy Miles. to Client
Little Pond Enterprises Auric Enterprises, Inc.
1921 South Downing PO Box 7654
Denver, CO 80210 Hilton Head, SC 29938
9. ENTIRE AGREEMENT
Neither party has made any representations to the other which are not
specifically set forth in this Agreement. There are no oral or other
agreements between the parties which have been entered into prior or
contemporaneously with the formation of this Agreement. All oral
promises, agreements, representations, statements and warranties
hereinafter asserted by one party against the other shall be deemed to
have been waived by such party asserting that they were made and this
Agreement shall supersede all prior negotiations, statements
representations, warranties and agreements made or entered into between
the parties to this Agreement.
10. NO ASSIGNMENT
Neither party may assign any benefit due or delegate performance under
this Agreement without the express written consent of the other party.
11. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of South Carolina. It shall also be construed as if the
parties participated equally in its negotiation and drafting. The
Agreement shall not be construed against one party over another party.
Should a dispute arise, both parties agree to submit to binding
arbitration under the guidelines of the American Arbitration Association
or some other mutually agreeable Arbitration Association.
12. WAIVER
The waiver of any provision of this Agreement by either party shall not
de deemed to be a continuing waiver or a waiver of any other provision of
this Agreement by either party.
13. SEVERABILITY
If any provision of this Agreement or any subsequent modifications hereof
are found to be unenforceable by a court of competent jurisdiction, the
remaining provisions shall continue to remain in full force and effect.
14. AUTHORITY TO ENTER INTO AGREEMENT
The individuals signing this Agreement below represent to each other that
they have the authority to bind their respective corporations to the
terms and conditions of this Agreement. The individuals shall not,
however have personal liability by executing this Agreement and sign this
Agreement only in their representative capacities as authorized officers
of the Client and Timothy Miles respectively.
Dated this of February, 1999 Dated this of February, 1999
Auric Enterprises, Inc.
By /s/ Timothy Miles By /s/ Robert Hinchey
------------------ ------------------------
Timothy Miles Robert Hinchey, President
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<FISCAL-YEAR-END> FEB-28-2000
<PERIOD-END> FEB-28-1999
<CASH> 44,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 44,772
<PP&E> 200
<DEPRECIATION> 0
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<CURRENT-LIABILITIES> 10,572
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<COMMON> 1,605
0
0
<OTHER-SE> 32,595
<TOTAL-LIABILITY-AND-EQUITY> 44,772
<SALES> 0
<TOTAL-REVENUES> 0
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