U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
AMENDMENT NO. 1 TO FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
CASTLE CORP. INTERNATIONAL
(Name of Small Business Issuer in its charter)
Nevada
77-0510726
------------------------------------------ --------------------
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
2077 West Nancy Avenue
Porterville, CA
93257
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code 559-781-2981
-------------
Securities to be registered under Section 12(g) of the Act:
Title of each class Name of each exchange on which
to be so registered each such class is to be
registered
None N/A
------------------- -------------------------------
Common Stock, $.001 par value
-----------------------------
(Title of class)
<PAGE>
Item 1. DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
The Company was organized on February 5, 1999, and is in the process of
commencing operations, but has not generated any revenue and is still a
development stage corporation. The Company's plan of operations is to
obtain clear title of Gwyrch Castle in Wales, U.K., and develop it into a
luxury resort.
IN GENERAL - THE COMPANY
Gwyrch Castle ("the Castle") was owned, in 1993, by Ruth Williams and
Nicholas Tavaglione. In April, 1993, Williams agreed to sell her
interest in the castle to LM Enterprises, a company owned by Richard,
Bonnie and Lyndell Lawson ("the Lawsons"). In September, 1996, as a
result of a lawsuit brought against Williams by the Lawsons, the Lawsons
obtained a judgment finding that Williams had breached her contract
to sell the castle and awarding damages of $3,632,000.
Unbeknownst to the Lawsons, Williams had also contracted to sell her
interest in the Castle to TwoVx Corporation, who filed a caution, or cloud
on the title of the Castle. The Lawsons assigned their interest in the
Castle to Martel Corporation, and Martel orchestrated a joint venture
agreement with Tavaglione, and with TwoVx, who obtained Williams' interest
in
the Castle. The joint venture agreement provides for the Castle to be
owned 100% by a corporation in the U.K. named Castle Corporation Resorts,
Ltd. Castle Corp. is the 100% owner of Castle Corporation Resorts, Ltd.
In August 1998, Martel and TwoVx withdrew their cautions on the Castle
and title to the castle was transferred to Castle Corporation Resorts, Ltd.
In March, 2000, citing the failure of Castle Corp. to fund the development
of the castle or the buy out of Tavaglione and TwoVx, Tavaglione and TwoVx
transferred title from Castle Corporation Resorts Limited to themselves.
This was done without the authority of officers or the Board of Directors
of
Castle Corporation Resorts, Ltd. and it has taken action to restore a
caution
on the title of the castle. Castle Corp. will seek to raise capital
via private placements of its common stock to buy out Tavaglione and TwoVx
and to develop the castle. There can be no assurance that such private
placements will be successful in raising any capital.
Government approval is not necessary for the Company's business, and
government regulations have no or only a negligible effect on their
respective businesses.
The Company has not booked any significant research and development costs
and therefor do not expect to pass any of those costs to customers. And has
no product development or research and development costs.
The Company's mailing address is west 2077 Nancy Avenue, Porterville, CA
93257. The telephone number of its principal executive office is (559) 781-
2981.
THE CASTLE
Gwyrch Castle is located on the Northern Welsh Coast with a commanding view
of the Irish Sea. Nestled on the side of a lushly forested mountainside,
Gwyrch Castle and its 280 acres project an air of majesty which is
unsurpassed. The visual impact on approach to the Castle is that of a
magnificent medieval construction set into the hillside. Hanging woods form
the background to the extended castle walls, punctuated by numerous
circular and rectangular turrets and towers which are built against the
hillside. The sheer size and complexity of the castle provides a
breathtaking impact when viewed from a distance. The Castle has convenient
access to the A55 expressway. Its 280 acres of grounds consists of meadows
and elevated woodlands with many concealed walks. It is adjacent to an
existing golf course. It is about four miles from Colwyn Bay, fifteen miles
from the historic Roman town of Chester, and approximately 35 miles from
Manchester. The Company is the owner of 100% of all the issued and
outstanding stock of Castle Corp. International, Ltd., and English
corporation, which holds the right, title, and interest in Gwrych Castle,
Abergele, North Wales, pursuant to a joint venture agreement between the
majority shareholders of the Company, Martel Corporation, Two Vx
Corporation, and Nicholas Tavglione. Pursuant to this joint venture
agreement, the Company has 180 days to obtain financing for the first phase
of development for the Castle into a resort. If this is not accomplished
within 180 days, the Board of Directors of the Company may extend the time,
or the interest in the Castle may revert back to the majority shareholders.
The Company is confident that it can obtain financing for the initial phase
of the development of the Castle, but there can be no assurance that it is
able to do so. The Company estimates initial financing requirements to be
the sum of $5,250,000. With an equity of over $22,000,000 in appraised
value in its present state, management believes that it will be able to
obtain the first phase financing required.
The Castle is a historic listed building, which makes it available for many
grants private and government agencies, including the Welsh Office, the
European Social and Tourist Grant, and the Historic Building Grant. The
property is situated in a potential growth area for leisure and
entertainment, as there presently is a lack of facilities for the
performing arts, and a great demand for such facilities in the surrounding
area.
HISTORY
History. From the battlements of the Castle you can see the
plain which is the site of the bloodiest battle which ever took place
between the Welsh and English armies in 1167, between Owain Gwynnedd and
Henry II and The Earl of Chester. The English were defeated at this battle,
but the unrest continued and ended with the death of Llewellyn Ap Gruffydd
in the rebellion of 1282. The same plains also saw the capture of King
Richard II on his return from Anglesy in 1399 by Henry Bollingbroke, who
became King Henry IV. Richard II was first imprisoned in Flint Castle,
prior to his removal to Berkeley Castle, where he was subsequently
murdered, a historic event described by Shakespeare in his play, "Richard
II."
During the early nineteenth century, inspired by the medieval
masterpiece of Conwy Castle, a rich Lancastrian industrialist, Lloyd
Bamford Hesketh, began the construction of Gwrych Castle in 1815. Finding
the original architect's work too modest for his taste, he later added a
plethora of screen walls and towers to produce a fantasy effect of a fairy
tale castle. Construction of the Castle was completed in 1822, and acted as
the residence for Hesketh and his wife during their entire lifetime. Upon
Hesketh's death in 1861, the Castle passed to his son, Robert Bamford
Hesketh, and, subsequently to his daughter, the wife of the twelfth Earl of
Dundonald. It is reputed that one of the female descendants committed
suicide by throwing herself from the tower which is known as Hesketh Tower,
and legend suggests that the lady's ghost now haunts the Castle. Since the
Second World War, it has been successful as a place of entertainment and
leisure for many years, and was used as a training camp by Bruce Woodcock
for his fight against Lee Savold in his attempt to win the World
Heavyweight Championship. It was also used by Randolf Turpin in preparation
for his unsuccessful defense of the World Middleweight Championship against
Sugar Ray Robinson. In recent years, the Castle has been abandoned, and is
currently uninhabited.
PROPOSED DEVELOPMENT
The Company proposes to renovate the Castle in phases, beginning with the
Castle itself, which can accommodate 70 guest suites. In addition, the
renovation will include the usual resort amenities, a restaurant, cafe,
bars, banquet facilities and meeting rooms, a performing arts center, and
an equestrian facility, a grand ballroom and golf course. Further phases of
development include the addition of 150 luxury suites and 300 cabins on the
castle grounds. These developments will be designed to fashion the Castle
as a five star luxury hotel, with all the amenities one would imagine,
including an exclusive personal concierge services.
THE INDUSTRY
It is estimated that five million holiday visitors stay in North Wales
annually. Including the visitors to Abergele and neighboring Colwyn, there
are an estimated 3 million holiday visitors annually within a one hour
drive from the Castle. Traffic along Highway A55 is estimated at an average
of 10,000 to 11,000 cars per day, with as many as 15,000 per day at peak
times during holiday seasons. This traffic flow, which includes the
majority of visitors to North Wales, the visual prominence of the Castle
and its physical proximity to the highway provides an excellent opportunity
to promote its development.
The Wales Tourist Board, basing its estimates on the British Home Tourism
Survey, estimates that there are approximately 3.7 trips to North Wales
every year by the average British household, for holiday purposes, by
visitors staying one night or more. The size of this market has remained
fairly constant over the past decade, despite the increase in numbers of
overseas holidays taken by British residents. The central importance of the
main holiday in generating holiday trips still remains, despite the
observed increase in short breaks. Over two-thirds of the visits for
holiday purposes to North Wales last four or more nights. There is also an
anticipated increase in trips being seen from residents of the newly
reformed "Eastern Block" countries.
PATENTS
The Company holds no patents.
GOVERNMENT REGULATION
Government approval is not necessary for the Company's business, and
government regulations have no effect or a negligible effect on its
business. The Company does have to pay duties on the products it imports.
EMPLOYEES
The Company presently employs three employees, Richard Lawson and Bonnie
who devote their full-time efforts to Castle Corp., and Lyndell Lawson,
who devotes their part time efforts to the company.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
PLAN OF OPERATIONS-IN GENERAL
The Company's plan of operations is to complete the buy out of Nicholas
Tavaglione and TwoVx and to develop the Castle into a luxury resort. There
can be no assurance that the Company will be able to resolve the
controversy between itself and Tavaglione and TwoVx. The Company has
financed its operations to date through sales of its equity securities.
During the next twelve months, the Company plans to satisfy its cash
requirements by additional equity financing. There can be no assurance that
the company will be successful in raising additional equity financing, and,
thus, be able to satisfy its cash requirements, which primarily consist of
legal and accounting fees at the present time. If the company is not able
to raise equity capital, and it presently has no cash with which to satisfy
any future cash requirements. The company will need a minimum of $50,000 to
satisfy its cash requirements for the next 12 months. The company will not
be able to operate if it does not obtain equity financing. The Company has
no current material commitments. The Company depends upon capital to be
derived from future financing activities such as subsequent offerings of
its stock. There can be no assurance that the Company will be successful in
raising the capital it requires. The company does not anticipate any
further research and development of any products, nor does it expect to
incur any research and development costs. The company does not expect the
purchase or sale of plant or any significant equipment, and it does not
anticipate any change in the number of its employees. The Company has no
current material commitments. The Company has generated no revenue since
its inception.
The Company is still considered to be a development stage company, with no
significant revenue, and is dependent upon the raising of capital through
placement of its common stock. There can be no assurance that the Company
will be successful in raising the capital it requires through the sale of
its common stock.
FORWARD LOOKING STATEMENTS
This registration statement contains forward-looking statements. The
Company's expectation of results and other forward-looking statements
contained in this registration statement involve a number of risks and
uncertainties. Among the factors that could cause actual results to differ
materially from those expected are the following: business conditions and
general economic conditions; competitive factors, such as pricing and
marketing efforts; and the pace and success of product research and
development. These and other factors may cause expectations to differ.
YEAR 2000 COMPLIANCE
With respect to Year 2000 compliance, the Company has performed an audit of
all of its computer hardware, internal accounting and software
applications; in short, all of its information technology and non
information technology systems, and found all to be Year 2000 compliant. As
of this date, the Company has been given assurances from its banking
institution and transfer agent that they are working toward compliance or
are in compliance. The Company has completed an audit of its vendors and
suppliers to identify relevant Year 2000 issues, and has found them all to
be Year 2000 compliant. The status of the company's progress is that it has
completed all that it must do in order to be considered Year 2000
compliant. The worst case scenario would be the risk that the company's
transfer agent may have not complied adequately. However, the transfer
agent has assured the Company that it is Year 2000 compliant. The Company
had nominal costs in becoming compliant, consisting of employee labor and
no actual costs to any third parties. The Company does not anticipate any
additional remediation costs, as it is already Year 2000 compliant.
DESCRIPTION OF PROPERTY
The Company rents professional offices and telephones at a nominal no
charge from its attorney, Kenneth G. Eade, on a month to month basis,
pursuant to an oral agreement. The Company claims ownership to the Castle,
and contends that it was illegally transferred from the Company to
Tavaglione and TwoVx. It has no other property.
Item 4. SECURITIES OWNERSHIP OF MANAGEMENT AND CONTROLLING PERSONS
The following table sets forth certain information regarding the beneficial
ownership of the shares of Common Stock of the Company as of the date of
this disclosure(1), by (I) each person who is known by the Company to be
the beneficial owner of more than five percent (5%) of the issued and
outstanding shares of common stock, (ii) each of the Company's directors
and executive officers, and (iii) all directors and executive officers as
a group.
Name and Address Number of Shares Percentage Owned *****
---------------- ---------------- ----------------
Martel Corporation 1166500 23.33%
Nicholas Tavglione 1166500 23.33%
Two Vx Corporation 1166500 23.33%
Directors and Officers 3499500 70 %
as a Group
Item 5. EXECUTIVE OFFICERS, KEY EMPLOYEES AND DIRECTORS
The members of the Board of Directors of the Company serve until the next
annual meeting of stockholders, or until their successors have been
elected. The officers serve at the pleasure of the Board of Directors.
The current executive officers, key employees and directors of the Company
are as follows:
Name Age Position
------------ --- --------------------------------
Lyndell M. Lawson 60 President, Director, CEO
Bonnie Lawson 55 Chief Financial Officer, Director
Richard Lawson 37 Secretary, Director
LYNDELL M. LAWSON. Mr. Lawson is the President, Chief Executive Officer,
and Director of the Company. Mr. Lawson has over 35 years of experience in
all phases of construction projects, including planning, and managing all
trades. As the Owner of Martel's Catering, he has extensive experience in
the restaurant and catering business. He was previously employed by McNamee
Electric, specializing in the blueprint redesign of electrical plans, and
Giant Forest Lodge, as resort manager.
BONNIE M. LAWSON. Ms. Lawson is the Chief Financial Officer of the Company.
She has extensive accounting and bookkeeping experience. From 1991 through
1994, she operated an estate liquidation business, LM Enterprises. From
1989 through 1991 she served as Secretary/Treasurer of Royal Carriage Buick
GMC Jeep Eagle Sterling in Oxnard, California. From 1986 through 1989 she
was Business Manager of Ventura Porsche Audi. From 1982 through 1986, she
was Office Manager of Earl Manzer Accountancy Corporation, maintaining
accounting records, balancing accounts, and assisting in tax preparation,
audits and compiling financial statements, and from 1972 through 1982, she
was the Business Manager of Masterson Motors.
RICHARD LAWSON. Mr. Lawson is the Secretary of the Company. From 1991
through 1994, Mr. Lawson operated LM Enterprises, an estate liquidation
firm. He previously served as Secretary and Bookkeeper for Zsa Zsa Gabor.
Prior to that, he was employed as Supervisor of Cathedral Canyon Resort,
responsible for training of all hotel departments, daily audits, and room
revenue reports, including weekly and monthly occupancy forecasts. Mr.
Lawson received his educational training at the University of California at
Santa Barbara.
Item 6. EXECUTIVE COMPENSATION
The following table sets forth the cash and non-cash compensation paid by
the Company to its Chief Executive Officer and all other executive officers
for services rendered. No salaries are being paid at the present time, and
will not be paid unless and until there is available cash flow from
operations to pay salaries. There were no grants of options or SAR grants
given to any executive officers during the last fiscal year.
Annual Compensation
-------------------
Name and Position Salary Bonus Annual Deferred Salary
Lyndell Lawson, Pres. 50,000 0 50,000
Bonnie Lawson, Treas. 50,000 0 50,000
Richard Lawson 50,000 0 50,000
Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with organizing the Company, on April 6, 1999, 1,166,500
shares were issued each to Martel Corporation, TwoVx, Inc., and Nicholas
Tavaglione, for an aggregate issue of 3,499,500 shares, in exchange for
their respective interests in a joint venture agreement, which defined the
ownership rights of the castle in the Company. The issuance of stock was
made in reliance upon Section 4(2) of the Securities Act of 1933, to
sophisticated persons (officers and directors) having superior access to
all corporate and financial information. Under Rule 405 promulgated under
the Securities Act of 1933, Lyndell, Bonnie and Richard Lawson, Martel
Corporation, TwoVx and Nicholas Tavaglione may all be deemed to be
promoters of the Company. No other persons are known to Management that
would be deemed to be promoters.
On April 6, 1999, the Company issued 350,000 shares of its common stock to
Kenneth G. Eade, counsel to the Company, under Rule 504 promulgated by the
Securities and Exchange Commission in exchange for legal services rendered.
Mr. Eade is a sophisticated investor who had access to all corporate
information.
On April 6, 1999, the Company issued 156,100 shares to 47 shareholders,
pursuant to its Regulation D, Rule 504 offering.
Item 8. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party or
to which the property interests of the Company is subject.
Item 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
The Company's common stock is not listed or quoted at the present time, and
there is no present public market for the Company's common stock. The
Company has obtained a market maker and who intends to file a form 211 with
the National Association of Securities Dealers to quote the Company's
securities on the NASD OTC Bulletin Board, but there can be no assurance
that the Company's stock will be quoted on the NASD OTC Bulletin Board. The
filing of the Form 211 is contingent upon this form 10 becoming effective
with no pending comments by the S.E.C.
The Company has not paid any cash dividends since its inception and does
not contemplate paying any in the foreseeable future. It is anticipated
that earnings, if any, will be retained for the operation of the Company's
business.
PENNY STOCK STATUS
If and when it creates a market for its common stock, the Company's common
stock is a "penny stock," as the term is defined by Rule 3a51-1 of the
Securities Exchange Act of 1934. This makes it subject to reporting,
disclosure and other rules imposed on broker-dealers by the Securities and
Exchange Commission requiring brokers and dealers to do the following in
connection with transactions in penny stocks:
1. Prior to the transaction, to approve the person's account for
transactions in penny stocks by obtaining information from the person
regarding his or her financial situation, investment experience and
objectives, to reasonably determine based on that information that
transactions in penny stocks are suitable for the person, and that the
person has sufficient knowledge and experience in financial matters that
the person or his or her independent advisor reasonably may be expected to
be capable of evaluating the risks of transactions in penny stocks. In
addition, the broker or dealer must deliver to the person a written
statement setting forth the basis for the determination and advising in
highlighted format that it is unlawful for the broker or dealer to effect a
transaction in a penny stock unless the broker or dealer has received,
prior to the transaction, a written agreement from the person. Further, the
broker or dealer must receive a manually signed and dated written agreement
from the person in order to effectuate any transactions is a penny stock.
2. Prior to the transaction, the broker or dealer must disclose to the
customer the inside bid quotation for the penny stock and, if there is no
inside bid quotation or inside offer quotation, he or she must disclose the
offer price for the security transacted for a customer on a principal basis
unless exempt from doing so under the rules.
3. Prior to the transaction, the broker or dealer must disclose the
aggregate amount of compensation received or to be received by the broker
or dealer in connection with the transaction, and the aggregate amount of
cash compensation received or to be received by any associated person of
the broker dealer, other than a person whose function in solely clerical or
ministerial.
4. The broker or dealer who has effected sales of penny stock to a
customer, unless exempted by the rules, is required to send to the customer
a written statement containing the identity and number of shares or units
of each such security and the estimated market value of the security. The
imposition of these reporting and disclosure requirements on a broker or
dealer make it unlawful for the broker or dealer to effect transactions in
penny stocks on behalf of customers. Brokers or dealers may be discouraged
from dealing in penny stocks, due to the additional time, responsibility
involved, and, as a result, this may have a deleterious effect on the
market for the company's stock.
TRANSFER AGENT, WARRANT AGENT AND REGISTRAR
The transfer agent, warrant agent and registrar for the Common Stock is
American Registrar & Transfer Co., 342 E. 900 South, P.O. Box 1798, Salt
Lake City, Utah 84110.
Item 10. RECENT SALES OF UNREGISTERED SECURITIES
In connection with organizing the Company, on April 6, 1999, 1,166,500
shares were issued each to Martel Corporation, TwoVx, Inc., and Nicholas
Tavaglione, for an aggregate issue of 3,499,500 shares, in exchange for
their respective interests in a joint venture agreement, which defined the
ownership rights of the castle in the Company. The issuance of stock was
made in reliance upon Section 4(2) of the Securities Act of 1933, to
sophisticated persons (officers and directors) having superior access to
all corporate and financial information. Under Rule 405 promulgated under
the Securities Act of 1933, Lyndell, Bonnie and Richard Lawson, Martel
Corporation, TwoVx and Nicholas Tavaglione may all be deemed to be
promoters of the Company. No other persons are known to Management that
would be deemed to be promoters.
On April 6, 1999, the Company issued 350,000 shares of its common stock to
Kenneth G. Eade, counsel to the Company, under Rule 504 promulgated by the
Securities and Exchange Commission in exchange for legal services rendered.
Mr. Eade is a sophisticated investor who had access to all corporate
information. On April 6, 1999, the Company issued 156,100 shares to 47
shareholders, pursuant to its Regulation D, Rule 504 offering.
Item 11. DESCRIPTION OF SECURITIES
COMMON STOCK
The Company is authorized to issue 25,000,000 Shares, all of which are
Common Stock at a par value of $.001. The presently outstanding shares of
Common Stock are fully paid and non- assessable. There are currently
outstanding 1,800,000 Shares of Common Stock. Holders of shares of Common
Stock are entitled to one vote per share on all matters submitted to a vote
of the shareholders. Shares of Common Stock do not have cumulative voting
rights, which means that the holders of the majority of the shareholder
votes eligible to vote and voting for the election of the Board of
Directors can elect all members of the Board of Directors. Holders of
shares of Common Stock are entitled to one vote per share on all matters to
be voted upon by the stockholders generally. The approval of proposals
submitted to stockholders at a meeting other than for the election of
directors requires the favorable vote of a majority of the shares voting,
except in the case of certain fundamental matters (such as certain
amendments to the Articles of Incorporation, and certain mergers and
reorganizations), in which cases Nevada law and the Company's Bylaws
require the favorable vote of at least a majority of all outstanding
shares.
Stockholders are entitled to receive such dividends as may be declared from
time to time by the Board of Directors out of funds legally available
therefor, and in the event of liquidation, dissolution or winding up of the
Company to share ratably in all assets remaining after payment of
liabilities. The holders of shares of Common Stock have no preemptive,
conversion, subscription or cumulative voting rights.
Under current Nevada law, a shareholder is afforded dissenters' rights
which, if properly exercised, may require the Company to purchase his or
her shares. Dissenters' rights commonly arise in extraordinary transactions
such as mergers, consolidations, reorganizations, substantial asset sales,
liquidating distributions, and certain amendments to the Company's
certificate of incorporation.
Item 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
NEVADA STATUTES
NRS 78.751 provides that the Company may provide in its articles of
incorporation, by laws or by agreement, to indemnify the Company's officers
and directors and affects their liability in that capacity, for any and all
costs incurred in defending a civil or criminal action, suit or proceeding
must be paid by the corporation as they are incurred and in advance of the
final disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount
if it is ultimately determined by a court of competent jurisdiction that he
is not entitled to be indemnified by the corporation. The provisions of
this subsection do not affect any rights to advancement of expenses to
which corporate personnel other than directors or officers may be entitled
under any contract or otherwise by law.
The indemnification and advancement of expenses authorized in or ordered
by a court pursuant to the statute:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
articles of incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his official
capacity or an action in another capacity while holding his office, except
that indemnification, unless ordered by a court pursuant to NRS 78.7502 or
for the advancement of expenses made pursuant to subsection 2, may not be
made to or on behalf of any director or officer if a final adjudication
establishes that his acts or omissions involved intentional misconduct,
fraud or a knowing violation of the law and was material to the cause of
action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
ARTICLES OF INCORPORATION AND BY-LAWS
The Company's Articles of Incorporation, Article VIII, provides that the
Company shall, to the fullest extent legally permissible under the
provisions of the General Corporation Law of the State of Nevada, indemnify
and hold harmless officers and directors from any and all liabilities and
expenses imposed upon them in connection with any action, suit or other
proceeding.
<PAGE>
Item 13. FINANCIAL STATEMENTS
Report of Independent Certified Public Accountant dated September 15, 2000
Financial Statements
Balance Sheets
Statement of Loss and Accumulated Deficit
Statements of Stockholder's Equity
Statements of Cash Flows
Notes to Financial Statements
<PAGE>
[CAPTION]
ROGELIO G. CASTRO
Certified Public Accountant
REPORT OF INDEPENDENT AUDITOR
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Castle Corp. International
(A Development Stage Company)
Santa Barbara, California
We have audited the accompanying balance sheet of Castle Corp.
International (A Development Stage Company), as of March 31, 2000 and the
related statement of operation, stockholders' equity, and cash flow for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
Except as discussed in the following paragraph, we conducted our audits in
accordance with generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
As discussed in Note 5 of the Notes to Financial Statements, we were
unable to satisfy ourselves about the valuation of the investment account
since independent appraisals were not furnished to us.
In our opinion, except for the effects of such adjustments, if any, as
might have been determined to be necessary had an independent appraisal
been furnished to us, the financial statements referred to in the first
paragraph present fairly, in all material respects, the financial position
of Castle Corp. International as of March 31, 2000, and the results of its
operations and cash flows for the year then ended in conformity with
generally accepted accounting principles
Rogelio G. Castro
Rogelio G. Castro
Certified Public Accountant
[CAPTION]
CASTLE CORP. INTERNATIONAL
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
As of March 31, 2000
ASSETS
Current Assets:
Cash and cash equivalents $3,872
Other Assets:
Investment 3,499
-------
TOTAL ASSETS $7,371
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $ -
Stockholders' Equity
Common Stock, $.001 par value
25,000,000 shares authorized;
3,955,600 shares issued and outstanding 3,955
Paid in capital 455,644
Accumulated deficit (452,228)
-------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 7,371
=======
The accompanying notes are an integral part of these financial statements.
<PAGE>
[CAPTION] CASTLE CORP. INTERNATIONAL
(A DEVELOPMENT STAGE COMPANY)
Statement of Operation
Revenue $ -
General and Administrative 452,228
-----------
Net Loss $ (452,228)
===========
Net Loss Per Share (Basic and Diluted) $ (0.11)
===========
Weighted Average Common Shares
Outstanding $ 3,995,600
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
Statement of Stockholders' Equity
Year ended March 31, 2000
<S> <C> <C> <C> <C> <C>
Additional
Common Stock paid-in Accumulated
Shares Amount capital Deficit Total
--------- ------ ------------ ---------- -------
Stocks issued for cash 6,100 6 6094 6,100
-
Stocks issued for services 450,000 450 449,550 450,000
Stocks issued for investments 3,449,500 3,499 3,499
Net loss for the year
ended March 31, 2000 (452,228) (452,228)
--------- ------ ------------ ---------- -------
Balance at March 31, 2000 3,955,600 3,995 455,644 (452,228) 7,371
========= ====== ============ ========== =======
These notes are an integral part of these financial statements
</TABLE>
[CAPTION]
CASTLE CORP. INTERNATIONAL
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flow
Year ended March 31, 2000
Operating activities
Net Loss
$(452,228)
Adjustments to reconcile net loss to
net cash used in operating activities:
Stocks issued for services at fair value 450,000
---------
Net cash used in operating activities (2,228)
---------
Financing activities
Proceeds from the issuance of stocks 6,100
---------
Net cash provided by financing activities 6,100
---------
Net increase (decrease) in cash and cash equivalents 3,872
Cash and cash equivalents - beginning of year -
Cash and cash equivalents - end of year $ 3,872
=========
Non cash activities:
Stocks issued for services at fair value $ 450,000
Stocks issued for investments $ 3,499
The accompanying notes are an integral part of these financial statements
Castle Corp. International
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
NOTE 1. BUSINESS ACTIVITY
The Company was incorporated under the laws of the state of Nevada on
January 29, 1997 using the name Castle Corp. International.
The primary purpose for which the Corporation is organized is to engage in
the business of construction and development of Gwrych Castle in Abergele,
North Wales, U.K. The Company's plan is to refurbish the interior of the
castle and the grounds to develop the property into a five-star resort
hotel, and to later add additional luxury cabins to increase revenue.
The Company has been in the development stage since its formation. Planned
principal operations have not yet commenced. There were no activities from
its inception date through March 31, 2000.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The Company uses the accrual method of accounting.
The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
1. Primary Earnings Per Share amounts are based on the weighted average
number of shares outstanding at the dates of the financial statements.
Fully Diluted Earnings Per Shares shall be shown on stock options and other
convertible issues that may be exercised within ten years of the financial
statement dates.
2. Depreciation - The cost of property and equipment is depreciated over
the estimated useful lives of the related assets. The cost of leasehold
improvements is depreciated (amortized) over the lesser of the length of
the related assets or the estimated lives of the assets. Depreciation is
computed on the straight-line method for reporting purposes and for tax
purposes.
3. Estimates - The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates
NOTE 3. DEPENDENCE ON KEY PERSONNEL
The Company is dependent upon the services and efforts of its executive and
operating officers. The loss of one or more of its executive and operating
officers could have a materially adverse effect on the Company.
NOTE 4. GOING CONCERN
The Company has nominal assets and no current operations with which to
create operating capital. The Company seeks to raise operating capital with
which to seek business opportunities to utilize the technology it has
acquired via private placements of its common stock. However, there can be
no assurance that such offering or negotiations for private capital will be
successful.
NOTE 5. INVESTMENT IN SUBSIDIARY
The Company is a joint venture of three parties claiming title to Gwrych
Castle. One individual is the holder of a 40% interest in the Castle.
Another party is the holder of a caution duly registered in the land
registry clouding the title to the castle and warrants that it is the
holder of a 60% interest acquired from a former owner. The third party
warrants that it is the holder of a caution duly registered in the land
registry, clouding the title to the castle, and claims a prior conveyance
of the same former owner's 60% interest. The parties combined their
respective interest and formed a United States corporation (Castle Corp.
International), which will hold 100% of a U.K. corporation (Castle Corp.
Resorts, Ltd.), which in turn will hold 100% of the title to the castle.
Each party was issued 1,166,500 shares in exchange for their interest for a
total of 3,499,500 shares. These shares were recorded in the books at par
value ($.001), recognizing an investment in subsidiary. No independent
appraisal has been made to establish the value of this investment.
Item 14. EXHIBITS, FINANCIAL STATEMENTS
14(a) Report of Independent Certified Public Accountant September 15, 2000
Financial Statements
Balance Sheets
Statement of Loss And Accumulated Deficit
Statements of Stockholder's Equity
Statements of Cash Flows
Notes to Consolidated Financial Statements
(b) Reports on Form 8-K: Not Applicable
(c) Exhibits
Exhibit No. D E S C R I P T I O N
----------- ---------------------
3.1 Articles of Incorporation CASTLE CORP. INTERNATIONAL
3.2 By-laws CASTLE CORP. INTERNATIONAL
4.1 Specimen certificate of common stock
10.1 Joint Venture Contract
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, there unto duly authorized.
CASTLE CORP. INTERNATIONAL
LYNDELL LAWSON
_____________________________________
Lyndell Lawson, President and Director
Date: September 21, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Capacity Date
---------- -------------- -------
Lyndell Lawson Pres., Director Sept. 21, 2000
Bonnie Lawson Treasurer/Director Sept. 21, 2000
Richard Lawson Secretary/Director Sept. 21, 2000
[CAPTION]
EXHIBIT 3.1
FILED IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
FEB 05 1999
C2828-99
Dean Heller, Secretary of State
ARTICLES OF INCORPORATION OF CASTLE CORP. INTERNATIONAL
The undersigned, being a natural person of full age and acting as the
incorporator, for the purpose of forming a corporation under the laws of
the State of Nevada, hereby adopts the following Articles of Incorporation
and declares:
FIRST: The name of the corporation (hereinafter referred to as the
corporation) is: CASTLE CORP. INTERNATIONAL
SECOND: The place of the principal office of the corporation is 820 South
Sixth Street, Suite C, Las Vegas, Nevada 89101.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General
Corporation Law of Nevada, other than the banking business, the trust
company business, or the practice of a profession permitted to be
incorporated by law.
FOURTH: The amount of total authorized capital stock is Twenty-Five Million
(25,000,000) shares of capital stock, par value $0.001, all of which are
one class, to be designated "Common Stock."
FIFTH: Members of the governing board or this corporation shall be
designated directors, and there shall be at least one (1) director of this
corporation. The number of directors may be changed from time to time by
amendment to the corporation's by-laws. There are three directors of this
corporation. The name and address of the first three directors are: LYNDELL
LAWSON, 2174 Eastridge Loop, Oxnard, CA 93030; NICHOLAS TAVGLIONE,
SIXTH: No paid up capital stock issued as fully paid up, after the amount
of the subscription price has been paid in is subject to assessment to pay
the debts of the corporation.
SEVENTH: The name and address of the incorporator of this corporation is:
BONNIE LAWSON
2714 Eastridge Loop
Oxnard, CA 93030
EIGHTH: This corporation is to have perpetual existence.
NINTH: There shall be no liability on the part of a director or officer of
this corporation or its shareholders for damages for breach of fiduciary
duty, except for acts or omissions which involve intentional misconduct,
fraud or a knowing violation of law, or the payment of dividends in
violation of NRS 78.300.
TENTH: The name and address in this state of the corporation's resident
agent is:
KENNETH G. EADE
820 South Sixth Street, Suite C
Las Vegas, Nevada 89101
IN WITNESS WHEREOF, the undersigned incorporator has executed these
articles of incorporation this 17 day of Nov., 1998.
STATE OF CALIFORNIA
COUNTY OF VENTURA
I, BONNIE LAWSON, being first duly sworn, depose and say that I am the
person who executed the foregoing Articles of Incorporation, and that the
said Articles of Incorporation are my own act and deed.
Executed at Oxnard, California, this 17 day of Nov., 1998.
BONNIE LAWSON
Subscribed and sworn before me, Notary Public of the State of California
this ____ day of April, 1998.
HELEN GRANT
________________________________
Notary Public
[SEAL OF NOTARY PUBLIC]
[CAPTION]
EXHIBIT 3.2
BY-LAWS OF CASTLE CORP. INTERNATIONAL, Inc.
ARTICLE I - OFFICES
The office of the Corporation shall be located in the City and State
designated in the Articles of Incorporation. The Corporation may also
maintain offices at such other places within or without the United States
as the Board of Directors may, from time to time determine.
ARTICLE II - MEETING OF SHAREHOLDERS
Section 1 - Annual Meetings:
The annual meeting of the shareholders of the Corporation shall be held
within five months after the close of the fiscal year of the Corporation,
for the purpose of electing directors, and transacting such other business
as may properly come before the meeting.
Section 2 - Special Meetings:
Special meetings of the shareholders may be called at any time by the Board
of Directors or by the President, and shall be called by the President or
the Secretary at the written request of the holders of ten per cent (10%)
of the shares then outstanding and entitled to vote thereat, or as
otherwise required under the provisions of the Business Corporation Law.
Section 3 - Place of Meetings:
All meetings of shareholders shall be held at the principal office of the
Corporation, or at such other places as shall be designated in the notices
or waives of notice of such meetings.
ARTICLE IV - OFFICERS
Section 1 - Number, Qualifications, Election and Term of Office:
(a) The officers of the Corporation shall consist of a President, a
Secretary, a Treasurer, and such other officers, including a Chairman of
the Board of Directors, and one or more Vice Presidents, as the Board of
Directors may from time to time deem advisable. Any officer other than the
Chairman of the Board of Directors may be, but is not required to be, a
director of the Corporation. Any two or more offices may be held by the
same person.
(b) The officers of the Corporation shall be elected by the Board of
Directors at the regular annual meeting of the Board following the annual
meeting of shareholders.
(c) Each officer shall hold office until the annual meeting of the Board of
Directors next succeeding his election, and until his successor shall have
been elected and qualified, or until his death, resignation or removal.
Section 2 - Resignation:
Any officer may resign at any time by giving written notice of such
resignation to the Board of Directors, or to the President or the Secretary
of the Corporation. Unless otherwise specified in such written notice, such
resignation shall take effect upon receipt thereof by the Board of
Directors or by such officer, and the acceptance of such resignation shall
not be necessary to make it effective.
Section 3 - Removal:
Any officer may be removed, either with or without cause, and a successor
elected by a majority vote of the Board of Directors at any time.
Section 4 - Vacancies:
A vacancy in any office by reason of death, resignation, inability to act,
disqualification, or any other cause, may at any time be filled for the
unexpired portion of the term by a majority vote of the Board of Directors.
Section 5 - Duties of Officers:
Officers of the Corporation shall, unless otherwise provided by the Board
of Directors, each have such powers and duties as generally pertain to
their respective offices as well as such powers and duties as may be set
forth in these by-laws, or may from time to time be specifically conferred
or imposed by the Board of Directors. The president shall be the chief
executive officer of the Corporation.
ARTICLE V - SHARES OF STOCK
Section 1 - Certificate of Stock:
(a) The certificates representing the shares of the Corporation shall be in
such form as shall be adopted by the Board of Directors, and shall be
numbered and registered in the order issued. They shall bear the holder's
name and the number of shares, and shall be signed by (I) the Chairman of
the Board of the Present or a Vice President, and (ii) the Secretary or
Treasurer, or any Assistant Secretary or Assistant Treasurer, and shall
bear the corporate seal.
(b) No certificate representing shares shall be issued until the full
amount of consideration therefor has been paid, except as otherwise
permitted by law.
(c) To the extent permitted by law, the Board of Directors may authorize
the issuance of certificates for fractions of a share which shall entitle
the holder to exercise voting rights, receive dividends and participate in
liquidating distributions, in corporation to the fractional holdings; or it
may authorize the payment in cash of the fair value of fractions of a share
as of the time when those entitled to receive such fractions are
determined; or it may authorize the issuance, subject to such conditions as
may be permitted by law, of scrip in registered or bearer form over the
signature of an officer or agent of the Corporation, exchangeable as
therein provided for full shares, but such scrip shall not entitle the
holder to any rights of a shareholder, except as therein provided.
Section 2 - Lost or Destroyed Certificates:
The holder of any certificate representing shares of the Corporation shall
immediately notify the Corporation of any loss or destruction of the
certificate representing the same. The Corporation may issue a new
certificate in the place of any certificate theretofore issued by it,
alleged to have been lost or destroyed. On production of such evidence of
loss or destruction as the Board of Directors in its discretion may
require, the Board of Directors may, in its discretion, require the owner
of the lost or destroyed certificate, or his legal representatives, to give
the Corporation a bond in such sum as the Board may direct, and with such
surety or sureties as may be satisfactory to the Board, to indemnify the
Corporation against any claims, loss, liability or damage it may suffer on
account of the issuance of the new certificate. A new certificate may be
issued without requiring any such evidence or bond when, in the judgement
of the Board of Directors, it is proper so to do.
Section 6 - Sureties and Bonds:
In case the Board of Directors shall so require, any officer, employee or
agent of the Corporation shall execute to the Corporation a bond in such
sum, and with such surety or sureties as the Board of Directors may direct,
conditioned upon the faithful performance of his duties to the Corporation,
including responsibility for negligence and for the accounting for all
property, funds or securities of the Corporation which may come into his
hands.
Section 7 - Shares of Other Corporations:
Whenever the Corporation is the holder of shares of any other corporation,
any right or power of the Corporation as such shareholder (including the
attendance, acting and voting at shareholders' meetings and execution of
waivers, consents, proxies or other instruments) may be exercised on behalf
of the Corporation by the President, any Vice President, or such other
person as the Board of Directors may authorize.
ARTICLE VI - DIVIDENDS
Subject to applicable law, dividends may be declared and paid of any funds
available therefor, as often, in such amounts, and at such time or times as
the Board of Directors may determine.
ARTICLE VII-FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of Directors
from time to time, subject to applicable law.
ARTICLE VIII-CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be approved from
time to time by the Board of Directors.
ARTICLE IX - AMENDMENTS
Section 1 - By Shareholders:
All by-laws of the Corporation shall be subject to alteration or repeal,
and new by-laws may be made, by the affirmative vote of shareholders
holding of record in the aggregate at least a majority of the outstanding
shares entitled to vote in the election of directors at any annual or
special meeting of shareholders, provided that the notice or waiver of
notice of such meeting shall have summarized or set forth in full therein,
the proposed amendment.
Section 2 -By Directors:
The Board of Directors shall have power to make, adopt, alter, amend and
repeal, from time to time, by-laws of the Corporation; provided, however,
that the shareholders entitled to vote with respect thereto as in this
Article IX above-provided may alter, amend or repeal by-laws made by the
Board of Directors, except that the Board of Directors shall have no power
to change the quorum for meetings of shareholders or the Board of
Directors, or to change any provisions of the by-laws with respect to the
removal of directors or the filling of vacancies in the Board resulting
from the removal by the shareholders. If any by-law regulating an impending
election of directors is adopted, amended or repealed by the Board of
Directors, there shall be set forth in the notice of the next meeting of
shareholders for the election of directors, the by-law so adopted, amended
or repealed, together with a concise statement of the changes made.
Section 3 - Transfers of Shares:
(a) Transfers of shares of the Corporation shall be made on the share
records of the Corporation only by the holder of record thereof, in person
or by his duly authorized attorney, upon surrender for cancellation of the
certificate or certificates representing such shares, with an assignment or
power of transfer endorsed thereon or delivered therewith, duly executed,
with such proof of the authenticity of the signature and of authority to
transfer and of payment of transfer taxes as the Corporation or its agents
may require.
(b) The Corporation shall be entitled to treat the holder of record of any
share or shares as the absolute owner thereof for all purposes and,
accordingly, shall not be bound to recognize any legal, equitable or other
claim to, or interest in, such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof,
except as otherwise expressly provided by law.
Section 4 - Record Date:
In lieu of closing the share records of the Corporation, the Board of
Directors may fix, in advance, a date not exceeding fifty days, or less
than ten days, as the record date for the determination of shareholders
entitled to receive notice of, or to vote at, any meeting of shareholders,
or to consent to any proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any dividends, or
allotment of any rights, or for the purpose of any other action. If no
record date is fixed, the record date for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders shall be at
the close of business on the day next preceding the day on which notice is
given, or, if no notice is given, the day on which the meeting is held; the
record date for determining shareholders for any other purpose shall be at
the close of business on the day on which the resolution of the directors
relating thereto is adopted. When a determination of shareholders of record
entitled to notice of or to vote at any meeting of shareholders has been
made as provided for herein, such determination shall apply to any
adjournment thereof, unless the directors fix a new record date for the
adjourned meeting.
Section 13 - Committees:
The Board of Directors, by resolution adopted by a majority of the entire
Board, may from time to time designate from among its members an executive
committee and such other committees, and alternate members thereof, as they
deem desirable, each consisting of three or more members, with such powers
and authority (to the extent permitted by law) as may be provided in such
resolution. Each such committee shall serve at the pleasure of the Board.
ARTICLE X - INDEMNITY
(a) Any person made a party to any action, suit or proceeding, by reason of
the fact that he, his testator or intestate representative is or was a
director, officer of employee of the Corporation, or of any Corporation in
which he served as such at the request of the Corporation, shall be
indemnified by the Corporation against the reasonable expenses, including
attorney's fees, actually and necessarily incurred by him in connection
with the defense of such action, suit or proceedings, or in connection with
any appeal therein, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding, or in connection with any
appeal therein that such officer, director or employee is liable for
negligence or misconduct in the performance of his duties.
(b) The foregoing right of indemnification shall not be deemed exclusive of
any other rights to which any officer or director or employee may be
entitled apart from the provisions of this section.
(c) The amount of indemnity to which any officer or any director may be
entitled shall be fixed by the Board of Directors, except that in any case
where there is no disinterested majority of the Board available, the amount
shall be fixed by arbitration pursuant to the then existing rules of the
American Arbitration Association.
The undersigned incorporator certifies that he has adopted the foregoing
by-laws as the first by-laws of the Corporation.
BONNIE LAWSON
-------------------------
Incorporator
[CAPTION]
Exhibit 4.1SPECIMEN OF COMMON STOCK CERTIFICATE
[________]NUMBER
SHARES[________]
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
25,000,000 SHARES COMMON STOCK AUTHORIZED, $.001 PAR VALUE
COMMON STOCK CUSIP
SEE REVERSE FOR CERTAIN
DEFINITIONS
THIS CERTIFIES THAT
Is the RECORD HOLDER OF SHARES OF FULLY PAID AND NON-ASSESSABLE
SHARES OF COMMON STOCK OF CASTLE CORP. INTERNATIONAL
TRANSFERABLE ON THE BOOKS OF THE CORPORATION IN PERSON OR BY DULY
AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED.
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE LAWS
OF THE STATE OF NEVADA, AND TO THE CERTIFICATE OF INCORPORATION AND BYLAWS
OF THE CORPORATION, AS NOW OR HEREAFTER AMENDED. THIS CERTIFICATE IS NOT
VALID UNTIL COUNTERSIGNED BY THE TRANSFER AGENT.
WITNESS the facsimile seal of the Corporation and the signature of its duly
authorized officers.
Dated:
[SEAL OF CASTLE CORP. INTERNATIONAL}
Bonnie Lawson
Richard Lawson
------------------------ ---------------------
President Secretary
COUNTERSIGNED
AMERICAN REGISTRAR & TRANSFER CO.
342 E. 900 South
P.O. Box 1798
Salt Lake City, Utah 84110
By: ^^Illegible Signature^^
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
____Custodian____
TEN ENT - as tenants by the entireties (Cust)
(Minor)
JT TEN - as joint tenants with right under Uniform Gifts to
Minors
of survivorship and not as Act
________________________
tenants in common (State)
Additional abbreviation may also be used though not in above
list.
FOR VALUE RECEIVED, _________hereby sell, assign and transfer
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
---------------------------------------
---------------------------------------
__________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
Shares of the capital stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint
__________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named
Corporation with full power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Certificate, in every particular, without
alteration or enlargement, or any change whatever.
[CAPTION]
Exhibit 10.1 Joint Venture Agreement
JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT (hereinafter "the agreement"), is made and
entered into as of the 30th day of September, 1998, by and between TWO V.X.
CORPORATION ("Two VX"), MARTEL CORPORATION ("Martel"), and NICHOLAS
TAVGLIONE ("Tavglione"), provides as follows:
1. RECITALS:
This agreement is made and entered into with reference to the following
facts and circumstances:
A. Tavglione is the holder of a 40% interest in Gwrych Castle, Abergele,
Wales, U.K. (hereinafter "the Castle"), and is the Plaintiff in that
certain litigation in the High Court of Justice, Chancery Division,
Liverpool District Registry, Case No. 1994 T No. 3264.
B. Two VX is the holder of a caution duly registered in the land registry
clouding the title to the castle, and hereby represents and warrants that
it is the holder of a 60% interest in the castle, acquired from Ethel Ruth
Williams, a former owner.
C. LM Enterprises, a subsidiary of Martel, hereby represents and warrants
that it is the holder of a caution duly registered in the land registry,
clouding the title to the castle, and claims a prior conveyance of Ethel
Ruth Williams' 60% interest therein.
D. The parties desire to combine their respective interests in a joint
venture to develop the castle as a world class resort. The joint venture
will be formed as a United States corporation, which will hold 100% of a
British corporation, which in turn will hold 100% of the title to the
castle. The United States corporation will undertake a non-registered
public offering of its securities, and obtain a quote on the NASD OTC
Bulletin Board.
2. FORMATION OF JOINT VENTURE
A. The parties hereby create and establish a corporation, which shall be
incorporated under the laws of the state of Nevada ("the joint venture".)
The primary purpose of the joint venture is to develop, manage and operate
the castle as a world class resort.
B. The name of the Joint Venture shall be: "Castle Corp. International" and
its principal executive offices shall be in Santa Barbara County,
California. The principal place of business may be changed from time to
time, and other places of business may be established from time to time, by
actions taken in accordance with this contract. The parties agree to cause
to be executed, posted and filed such Certificates of Incorporation, or
other instruments as shall, from time to time, be required by law to
evidence the conduct of business by the Joint Venture.
3. TERM
The term shall commence as of the date first mentioned above, and shall
continue for a period of 90 days, unless extended by mutual agreement, or
until closing of the agreement as provided for in accordance with the
escrow provisions of this agreement.
4. CAPITAL CONTRIBUTIONS, OWNERSHIP AND FORMATION
A. The parties shall each contribute all of their right, title, and
interest in Gwrych Castle to a U.K. corporation, "Castle Corp. Resorts,
Ltd., which shall in turn be owned 100% by Castle Corp. International.
B. The parties shall cause all cautions on the land registry shall be
withdrawn.
C. The ownership in the Joint Venture shall be distributed as follows:
1. 20% shall be reserved for the Joint Venture's initial stock offering;
2. 10% shall be reserved for payment of expenses in connection with the
initial stock offering;
3. 23.33% each shall be distributed to each of the parties hereto, in the
form of restricted common stock.
D. Martel Corporation shall pay all costs associated with the offering of
stock of the Joint Venture to the public, and shall be reimbursed out of
the proceeds of the offering.
5. RESPONSIBILITIES OF THE PARTIES
A. Martel shall be solely responsible for the day to day management and
development of Castle Corp. International, including but not limited to
personnel management, supervision of construction, and purchasing of
ordinary and necessary supplies and materials necessary to operate. Martel
shall be responsible for obtaining financing in the minimum amount of $5
million.
B. The following acts may be done only after a regularly or specially
noticed meeting of Castle Corp. International, and a majority vote of the
Board of Directors:
1. Selling, leasing, or hypothecating any company real property, or
entering into any contract for that purpose, other than in the ordinary
course of the company's business and other than any hypothecation of
company property to secure a debt resulting from financing activities;
2. Assigning property of the company in trust for creditors or on the
assignee's promise to pay the company's debts; or
3. Disposing of the goodwill of the company's business.
4. Approval of annual operating budget, and salaries of management.
6. DIRECTORS AND CORPORATE OFFICERS
A. The Board of Directors shall consist of the following members: Lyndell
Lawson, Winfred Wong, and Nicholas Tavglione.
B. The business and affairs of the Joint Venture shall be managed, and all
authority and power of the Joint Venture shall be exercised, by and under
the direction of the Board of Directors as provided in this agreement.
C. The officers of the Joint Venture shall serve at the pleasure of the
Board of Directors. Initially, the officers shall be as follows:
1. Lyndell Lawson President/Chief Executive Officer
2. Bonnie Lawson Chief Financial Officer
3. Richard Lawson Secretary
7. PROFIT SHARING
A. The net profits from operations of the Joint Venture shall be defined
to be net proceeds from all revenues generated from company operations,
after the payment of all operating expenses, salaries, taxes, and a
reasonable reserve of capital for future operations. All net profits,
subject to the Joint Venture's responsibilities to pay dividends to its
public shareholders, shall be paid in three equal parts as annual dividends
on the parties' preferred common stock in the Joint Venture.
8. TRANSFER OF SHARES; RIGHT OF FIRST REFUSAL
A. The parties may only sell their stock in the Joint Venture at such time
the aggregate market value of each party's stock can be sold for $1,000,000
or more, or upon a majority vote of the Board of Directors.
B. If a party (the "offering party") has received a bona fide offer (the
"offer") to sell all or a part of his or her shares and desires to accept
the offer, the offering party shall give written notice ("notice") thereof
to the Joint Venture. The notice shall name the proposed transferee,
specify the number of shares intended to be transferred ("offered shares"),
the price per share and all other terms and conditions of the offer. The
Joint Venture shall have the exclusive and irrevocable right and option for
twenty (20) days from the date of the notice to purchase all, but not less
than all, of the offered shares at the price and on the same terms and
conditions as set forth in the notice. The Joint Venture shall exercise
such option by giving written notice to the offering party within twenty
(20) days from the date of the Notice.
C. If the Joint Venture does not exercise the option to purchase the
offered shares within thirty (30) days from the date of the notice, the
parties shall have an additional ten (10) days to purchase all, but not
less than all, of the offered shares at the price and on the same terms and
conditions as set forth in the notice. The party shall exercise such option
by giving written notice to the offering party within twenty (20) days from
the date of the Notice. If other parties also elect to purchase the
offering party's shares, the party may purchase the product of the number
of offered shares available times the percentage the party holds of the
total number of shares held by all other parties electing to purchase.
D. Notwithstanding any provisions to the contrary in this agreement, a
party may transfer legal title to all or any portion of his or her shares
to (I) his or her spouse, mother, father, child, grandchild, sister or
brother ("Immediate Family"), or any entity in which a member or members of
such immediate family own all beneficial and voting interest, or (ii) to a
Trustee of any trust created by him/her during his or her lifetime (and to
the beneficiaries upon termination of the trust), provided that such party
is a Trustor of such trust, the beneficiaries of the trust are members of
such immediate family, and both such trust and the transfer of such sharers
thereto are revocable by the party during his or her lifetime and such
party continues to control the voting of the shares subject to the trust
and the power to sell such shares.
9. OPTION OF MARTEL CORPORATION
A. Martel Corporation, or its nominee/financier, shall have the option for
a period of 90 days following the execution of this agreement by written
notice to the parties and the escrow agent in writing, to:
1. Purchase all of TwoVx's interest in the joint venture and in the castle
for the sum of $1,500,000 cash;
2. Purchase Nicholas Tavglione's interest in the joint venture and in the
castle for the sum of $2,000,000 cash.
B. The exercise of Martel Corporation's option within 90 days following the
execution of this agreement and closing in accordance with paragraph 14c of
this agreement, shall terminate this joint venture agreement and all of the
rights and responsibilities of the parties hereunder.
10. NONCOMPLYING TRANSFERS
No shares of common stock owned by a party shall be transferred on the
books of the Joint Venture or by the Joint Venture's transfer agent and no
sale or transfer or any other disposition thereof shall be effective,
unless and until all of the terms an conditions of this agreement are first
complied with. In the event of any violation of this agreement by the
attempted transfer of shares without compliance with the terms hereof, the
person or persons for whose benefit the agreement is made shall have the
right to compel the violating party to transfer and deliver the shares in
accordance with this agreement.
11. DISSOLUTION
On any dissolution of the Joint Venture under applicable law, except as
otherwise provided in this agreement, the continuing operation of the
Company's business shall be confined to those activities reasonably
necessary to wind up the company's affairs, discharge its obligations, and
preserve and distribute its assets. In the event of dissolution of the
Company, after payment of all company obligations, including any
obligations to the parties hereto, the assets of the company shall be
distributed according to the percentages of ownership set forth in this
agreement.
The dissolution of the Joint Venture shall only occur upon the following
circumstances:
A. The sale or disposition of substantially all of the Joint Venture's
assets;
B. The agreement of a majority of the shareholders;
12. TERMINATION
This agreement shall terminate on the written agreement of the parties
hereto, the closing of the financing of the Castle, the dissolution of the
Joint Venture, or the exercise of Martel Corporation's option in accordance
with paragraph 9 herein.
13. REVERSION OF INTEREST
If Martel does not exercise its option under paragraph 9 of this agreement,
Martel shall obtain financing for a minimum of $5 million for the initial
phase of remodeling of the castle within 90 days from the date of the
undertaking (escrow) established in the United Kingdom. The parties shall
all cooperate with each other to accomplish financing. If the 90 day period
is not sufficient to obtain financing, the Board of Directors shall
determine if the period shall be extended. If the period is not extended,
or if the extension expires and no further extension is granted by the
Board of Directors, then this agreement shall be null and void and all
interests in the castle which existed prior to this agreement shall revert
50% to TwoVx, Inc. and 50% to Tavglione, and all stock owned by the parties
in Castle Corp. International shall revert to Martel.
14. ESCROW AND FINANCING PROVISIONS
A. An undertaking shall be established with the U.K. firm of Roberts & Co.,
or the U.K. firm of the financier's choosing, ("escrow agent"), who shall
undertake to hold, administer the following documents, which the parties
shall deposit with the escrow agent in accordance with the terms of this
paragraph:
1. Releases and withdrawals of cautions registered in the name of TwoVx,
Inc. and Martel Corporation;
2. A duly executed conveyance of Nicholas Tavglione's interest in the
Castle to Castle Corp. Resorts, Ltd.;
3. A duly executed conveyance of TwoVx's interest in the Castle to Castle
Corp. Resorts, Ltd.;
4. Stock powers separate from certificates executed by Nicholas Tavglione
and TwoVx, Inc. with signature guarantees, on the stock owned by Nicholas
Tavglione and TwoVx, Inc.
5. Any other documents reasonably necessary to effectuate this agreement.
B. Funds shall be deposited in an escrow account of the lender's choice
with an escrow in the United States.
C. In the event of Martel Corporation or its nominee's exercise of the
option contained in paragraph 9 hereof, the closing of the transaction
shall occur 90 days after the establishment of the undertaking, unless
extended by mutual agreement, and funds shall be wired from lender's escrow
account to the account of the escrow agent, who shall simultaneously cause
the withdrawals of the cautions to be recorded and the conveyances of TwoVx
and Tavglione to be recorded in the name of Castle Corp. Resorts, Ltd., and
simultaneously deliver to lender the executed stock powers of TwoVx and
Tavglione in Castle Corp. International.
D. In the event that Martel Corporation does not exercise its option under
paragraph 9 hereof, but financing of a minimum of $5 million for the
development of the Castle is obtained, a first mortgage shall be
established on the Castle in favor of the lender, and the stock powers and
certificates of Two Vx, Inc. and Tavglione shall be returned to them by the
escrow agent. In the event of closing of the transaction pursuant to this
provision, the proceeds of the financing shall be distributed as follows:
1. $250,000 to each party of this agreement, as consideration for the
removal of each party's caution and conveyance of title;
2. $4,250,000 to be utilized for development of the Castle as a resort and
to obtain additional financing, subject to the direction of the Board of
Directors.
E. No shares shall be issued in Castle Resorts, Ltd. until such time as
Martel's option has been exercised in accordance with paragraph 9 or
financing has been completed.
15. NOTICES
Any notices called for in this agreement shall be effective upon personal
service or upon service by first class mail, postage prepaid, to the
parties at such addresses to be designated by the parties in writing.
16. MISCELLANEOUS PROVISIONS:
This agreement shall be construed in accordance with the laws of the State
of Nevada.
This agreement shall be binding upon and shall inure to the benefit of the
parties hereto, their beneficiaries, heirs, representatives, assigns, and
all other successors in interest.
Each of the parties shall execute any and all documents required to be
executed and perform all acts required to be performed in order to
effectuate the terms of this agreement.
This agreement contains all of the agreements and understandings of the
parties hereto with respect to the matters referred to herein, and no prior
agreement or understanding pertaining to any such matters shall be
effective for any purpose.
Each of the parties hereto has agreed to the use of the particular language
of the provisions of this Agreement, and any question of doubtful
interpretation shall not be resolved by any rule of interpretation against
the party who causes the uncertainty to exist or against the draftsman.
This agreement may not be superseded, amended or added to except by an
agreement in writing, signed by the parties hereto, or their respective
successors-in-interest.
Any waiver of any provision of this agreement shall not be deemed a waiver
of such provision as to any prior or subsequent breach of the same
provision or any other breach of any other provision of this agreement.
If any provision of this agreement is held, by a court of competent
jurisdiction, to be invalid, or unenforceable, said provisions shall be
deemed deleted, and neither such provision, its severance or deletion shall
affect the validity of the remaining provisions of this agreement, which
shall, nevertheless, continue in full force and effect.
The parties may execute this agreement in two or more counterparts, each of
which shall be signed by all of the parties; and each such counterpart
shall be deemed an original instrument as against any party who has signed
it.
The parties shall use their reasonable best efforts to obtain the consent
of all necessary persons and agencies to the transfer of shares provided
for in this agreement.
IN WITNESS WHEREOF, the parties have executed this agreement as of the day
and year first above written.
Two V.X., Inc.
STEVE LLYRU
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STEVE LLYRU
Title: V.P.
MARTEL CORPORATION
LYNDELL LAWSON
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Lyndell Lawson, President
NICHOLAS TAVAGLIONE
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NICHOLAS TAVAGLIONE
