UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Texas E-Solutions, Inc.
(Name of small business issuer in its charter)
Nevada 76-0616474
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7720 74th Drive, N.E., Marysville, WA 98270
Address of principle executive offices) (Zip Code)
Issuer's telephone number (360) 658-5566
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
To be so registered each class is to be registered
Securities to be registered under Section 12(g) of the Act:
_______________________________________________Common Stock
(Title of class)
Potential persons who are to respond to
the collection of information contained
in this form are not required to respond
unless the form displays a currently
valid OMB control number.
PART I
Item 1. Description of business
General
Texas E-Solutions, Inc. was incorporated under the laws of the State of
Nevada on September 14, 1999, and is in its early developmental and
promotional stages. To date, Texas E-Solutions, Inc.'s only activities
have been organizational, directed at acquiring its principal asset,
raising its initial capital and developing its business plan. Texas E-
Solutions, Inc. has not commenced commercial operations. Texas E-Solutions,
Inc. has no full time employees and owns no real estate. Texas E-Solutions,
Inc.'s business plan is to determine the feasibility of selling
Vitamineralherb.com products to specific markets. Should Texas E-
Solutions, Inc. determine that the plan is feasible, it intends to market
high-quality, low-cost vitamins, minerals, nutritional supplements, and
other health and fitness products to medical professionals, alternative
health professionals, martial arts studios and instructors, sports and
fitness trainers, other health and fitness professionals, school and other
fund raising programs and other similar types of customers via the Internet
for sale to their clients.
Acquisition of the license
On February 14, 2000, Texas E-Solutions, Inc. acquired a sub-license
agreement with David R. Mortenson & Associates. The License Agreement
grants an exclusive right to distribute Vitamineralherb.com products to
health and fitness professionals in the state of East Texas via the
Internet. Texas E-Solutions, Inc. acquired the license under the terms of a
settlement agreement by and between Texas E-Solutions, Inc. and Mortenson &
Associates, an affiliate of Vitamineralherb.com. Mortenson & Associates
had granted Texas E-Solutions, Inc. a license to distribute and produce an
oxygen enriched water product, called "Biocatalyst," for remediation of
sewage and waste water in septic tanks and waste water treatment
facilities. Mortenson & Associates acquired its right to sublicense
Biocatalyst to Texas E-Solutions, Inc. from NW Technologies Inc. As a
result of a legal dispute between Mortenson & Associates' principal and NW
Technologies, Mortenson & Associates was unable to fulfill its obligations
to Texas E-Solutions, Inc. under the license. Under the terms of the
settlement agreement, Vitamineralherb.com, an affiliate of Mortenson &
Associates, granted to Texas E-Solutions, Inc. the license to distribute
Vitamineralherb.com products in part for its agreement not to pursue its
claims against Mortenson & Associates.
The license
Texas E-Solutions, Inc. has a three-year license to market and sell
vitamins, minerals, nutritional supplements, and other health and fitness
products to medical professionals, alternative health professionals,
martial arts studios and instructors, sports and fitness trainers, other
health and fitness professionals, school and other fund raising programs
and other similar types of customers via the Internet for sale to their
clients. Texas E-Solutions, Inc.'s territory is the state of East Texas.
The license will be automatically renewed unless Texas E-Solutions, Inc.or
Vitamineralherb.com gives the other notice of its intent not to renew.
Vitamineralherb.com has agreed to provide certain business
administrative services to Texas E-Solutions, Inc., including product
development, store inventory, website creation and maintenance,
establishment of banking liaisons, and development and maintenance of an
order fulfillment system, thereby enabling Texas E-Solutions, Inc. to focus
strictly on marketing and sales. Some services, such as development of the
website and the order fulfillment system will be provided by
Vitamineralherb.com, while others, such as product development and store
inventory, will be provided by the product supplier. Vitamineralherb.com
sets the price for products based on the manufacturer's price, plus a mark
up which Vitamineralherb.com and Texas E-Solutions, Inc. share equally.
Texas E-Solutions, Inc. and its customers will also be able to request
quotes for and order custom-formulated and custom-labeled products via the
website. Three different labeling options are available to customers:
First, products may be ordered with the manufacturer's standard label with
no customization. Second, the fitness or health professional may customize
the labels by adding its name, address, and phone number to the standard
label. In most cases, these labels would be a standardized label with
product information and a place on the label for the wording "Distributed
by." This gives these health and fitness professionals a competitive edge.
Third, labels may be completely customized for the health or fitness
professional.
When a fitness or health professional becomes a client, Texas E-
Solutions, Inc.'s salesperson will show the client how to access the
Vitamineralherb website. The client is assigned an identification number
that identifies it by territory, salesperson, and business name, address,
and other pertinent information. The health or fitness professional may
then order the products it desires directly through the Vitamineralherb.com
website. It is anticipated that the customer will pay for the purchase
with a credit card, electronic check ("e-check"), or debit card. All
products will be shipped by the manufacturer directly to the professional
or its clients.
The website is maintained by Vitamineralherb.com, and each licensee pays
an annual website maintenance fee of $500. All financial transactions are
handled by Vitamineralherb.com's Internet clearing bank. The
Vitamineralherb webmaster downloads e-mail orders several times a day,
checks with clearing bank for payment and then submits the product order and
electronic payment to International Formulation and Manufacturing.
Vitamineralherb.com then forwards the money due Texas E-Solutions, Inc. via
electronic funds transfer, Vitamineralherb's software tracks all sales
through the customer's identification number, and at month end, e-mails to
Texas E-Solutions, Inc. and customer a detailed report including sales
commissions. Vitamineralherb has indicated that it will use e-commerce
advertising such as banner ads on major servers and websites, as well as
trying to insure that all major search engines pick Vitamineralherb.com
first. Sales originating from the website to customers located in East
Texas will automatically be assigned to Texas E-Solutions, Inc.
Background on the manufacturer and distributor
On June 9, 1999, Vitamineralherb.com entered into a manufacturing
agreement with International Formulation and Manufacturing, Inc., a
nutraceuticals manufacturing firm, located in San Diego, California, USA.
International Formulation and Manufacturing is a contract manufacturer of
vitamin, mineral, nutritional supplement, and alternative health products
for various marketing organizations; International Formulation and
Manufacturing does no retail marketing. In addition to a line of standard
products, International Formulation and Manufacturing is able to
manufacture custom blended products for customers. International
Formulation and Manufacturing also has the capability to supply privately
labeled products for Texas E-Solutions, Inc.'s customers at a minimal added
cost.
Implementation of business plan: Milestones
Texas E-Solutions, Inc.'s business plan is to determine the feasibility
of selling Vitamineralherb.com products to targeted markets. Should Texas
E-Solutions, Inc. determine that its business plan is feasible, it intends
to employ salespeople to call on medical professionals, alternative health
professionals, alternative health professionals, martial arts studios and
instructors, sports and fitness trainers, other health and fitness
professionals, school and other fund raising programs and other similar
types of customers to interest these professionals in selling to their
clients high-quality, low-cost vitamins, minerals, nutritional supplements
and other health and fitness products. These professionals would sell the
products to their clients via the Internet. Texas E-Solutions, Inc. will
achieve implementation of its business plan by meeting the following
milestones:
Milestone 1: Market Survey. In order to determine the
feasibility of its business plan, Texas E-Solutions, Inc. must
conduct research into the various potential target markets. The
market analysis research will likely consist of a telephone
survey to 100-200 potential clients, focusing on three or four of
the core target markets, such as chiropractors, health clubs, and
alternative medicine practitioners. The survey would likely
contain questions which would determine the marketing approach
and acceptability of specific products. The survey would take
approximately four to six weeks. The cost of the survey is
estimated to range from $10,000-$13,500, which would be paid for
in part out of the proceeds of this offering.
Milestone 2: Hire Salespeople. Should Texas E-Solutions, Inc.
determine that the exploitation of the license is feasible, it
will then have to engage salespeople to market the products.
Texas E-Solutions, Inc. expects that it may hire two salespeople
during its first year of operation. The hiring process would
include running advertisements in the local newspaper and
conducting interviews. It is anticipated that hiring the
salespeople may take four to eight weeks. The cost of the
salespeople, not including compensation, is estimated at $20,000.
Milestone 3: Establish an Office. Texas E-Solutions, Inc. would
then have to establish an office or offices for the sales force
in the appropriate market or markets. This would include an
office, equipment such as computers and telephones, and sample
inventory for the salespeople. It is anticipated that it may
take eight to twelve weeks to locate acceptable office space and
select and purchase equipment. The expense of office rental,
equipment and inventory samples is estimated to be $45,000 per
year.
Milestone 4: Development of Advertising Campaign. The next step
would be to develop an advertising campaign, including
establishing a list of prospects based on potential clients
identified in the market survey, and designing and printing sales
materials. It is anticipated that it would take approximately
six to ten weeks to develop the advertising campaign, although,
depending on the availability of resources, Texas E-Solutions,
Inc. will attempt to develop its advertising campaign
concurrently with establishing an office. The cost of developing
the campaign is estimated at approximately $12,000 per year.
Milestone 5. Implementation of Advertising Campaign/Sales Calls.
Implementation of the advertising campaign would begin with
mailing the sales materials to the identified list of prospects.
Approximately two to four weeks thereafter, the salespeople would
begin telephone follow ups and scheduling of sales calls.
Although it will be necessary to make sales calls throughout the
life of the company, it is estimated that the first round of
sales calls will take approximately eight to twelve weeks to
complete. The cost of salary and expenses for two salespeople is
estimated at $120,000 per year.
Milestone 6: Achieve Revenues. It is difficult to quantify how
long it will take to convert a sales call into actual sales and
revenues. Texas E-Solutions, Inc. will not begin receiving
orders until its sales force is able to convince potential
clients to begin offering such products to their customers, or to
convert from an existing supplier. Texas E-Solutions, Inc. hopes
that clients would begin placing orders within weeks of a sales
call, but it may take several months before people begin to
purchase products. Moreover, customers may not be willing to pay
for products at the time they order, and may insist on buying on
account, which would delay receipt of revenues another month or
two.
No commitments to provide additional funds have been made by
management or shareholders. Accordingly, there can be no assurance
that any additional funds will be available on terms acceptable to
Texas E-Solutions, Inc. or at all.
Regulatory environment
The manufacturing, processing, formulating, packaging, labeling and
advertising of the products Texas E-Solutions, Inc. sells in Colorado are
or may be subject to regulation by the Food & Drug Administration which
administers the Federal Food, Drug, & Cosmetics Act along with relevant
regulation thereto. Regulated products include herbal remedies, natural
health remedies, functional foods and nutraceuticals.
The manufacturing, processing, formulating, packaging, labeling and
advertising of the products Texas E-Solutions, Inc. sells may also be
subject to regulation by one or more U.S. federal agencies, including the
Food and Drug Administration, the Federal Trade Commission, the United
States Department of Agriculture and the Environmental Protection Agency.
These activities also may be regulated by various agencies of the states,
localities and foreign countries in which consumers reside.
The Food and Drug Administration, in particular, regulates the
formulation, manufacture, labeling and distribution of foods, including
dietary supplements, cosmetics and over-the-counter homeopathic drugs.
Under the Federal Food, Drug, and Cosmetic Act, the Food and Drug
Administration may undertake enforcement actions against companies
marketing unapproved drugs, or "adulterated" or "misbranded" products. The
remedies available to the Food and Drug Administration include: criminal
prosecution; an injunction to stop the sale of a company's products;
seizure of products, adverse publicity; and "voluntary" recalls and
labeling changes.
Food and Drug Administration regulations require that certain
informational labeling be presented in a prescribed manner on all foods,
drugs, dietary supplements and cosmetics. Specifically, the Food, Drug, and
Cosmetic Act requires that food, including dietary supplements, drugs and
cosmetics, not be "misbranded." A product may be deemed an unapproved drug
and "misbranded" if it bears improper claims or improper labeling. The Food
and Drug Administration has indicated that promotional statements made
about dietary supplements on a company's website may constitute "labeling"
for purposes of compliance with the provisions of the Food, Drug, and
Cosmetic Act. A manufacturer or distributor of dietary supplements must
notify the Food and Drug Administration when it markets a product with
labeling claims that the product has an effect on the structure or function
of the body. Noncompliance with the Food, Drug, and Cosmetic Act, and
recently enacted amendments to that Act discussed below, could result in
enforcement action by the Food and Drug Administration.
The Food, Drug, and cosmetic Act has been amended several times with
respect to dietary supplements, most recently by the Nutrition Labeling and
Education Act of 1990 and the Dietary Supplement Health and Education Act
of 1994. The Dietary Supplement Health and Education Act created a new
statutory framework governing the definition, regulation and labeling of
dietary supplements. With respect to definition, the Dietary Supplement
Health and Education Act created a new class of dietary supplements,
consisting of vitamins, minerals, herbs, amino acids and other dietary
substances for human use to supplement the diet, as well as concentrates,
metabolites, extracts or combinations of such dietary ingredients.
Generally, under the Dietary Supplement Health and Education Act, dietary
ingredients that were on the market before October 15, 1994 may be sold
without Food and Drug Administration pre-approval and without notifying the
Food and Drug Administration. In contrast, a new dietary ingredient, i.e.,
one not on the market before October 15, 1994, requires proof that it has
been used as an article of food without being chemically altered or
evidence of a history of use or other evidence of safety establishing that
it is reasonably expected to be safe. Retailers, in addition to dietary
supplement manufacturers, are responsible for ensuring that the products
they market for sale comply with these regulations. Noncompliance could
result in enforcement action by the Food and Drug Administration, an
injunction prohibiting the sale of products deemed to be non compliant, the
seizure of such products and criminal prosecution.
The Food and Drug Administration has indicated that claims or statements
made on a company's website about dietary supplements may constitute
"labeling" and thus be subject to regulation by the Food and Drug
Administration. With respect to labeling, the Dietary Supplement Health and
Education Act amends, for dietary supplements, the Nutrition Labeling and
Education Act by providing that "statements of nutritional support," also
referred to as "structure/function claims," may be used in dietary
supplement labeling without Food and Drug Administration pre-approval,
provided certain requirements are met. These statements may describe how
particular dietary ingredients affect the structure or function of the
body, or the mechanism of action by which a dietary ingredient may affect
body structure or function, but may not state a drug claim, i.e., a claim
that a dietary supplement will diagnose, mitigate, treat, cure or prevent a
disease. A company making a "statement of nutritional support" must possess
substantiating evidence for the statement, disclose on the label that the
Food and Drug Administration has not reviewed the statement and that the
product is not intended for use for a disease and notify the Food and Drug
Administration of the statement within 30 days after its initial use. It is
possible that the statements presented in connection with product
descriptions on Texas E-Solutions, Inc. site may be determined by the Food
and Drug Administration to be drug claims rather than acceptable statements
of nutritional support. In addition, some of Texas E-Solutions, Inc.'s
suppliers may incorporate objectionable statements directly in their
product names or on their products' labels, or otherwise fail to comply
with applicable manufacturing, labeling and registration requirements for
over-the-counter or homeopathic drugs or dietary supplements. As a result,
Vitamineralherb.com may have to remove objectionable statements or products
from its site or modify these statements, or product names or labels, in
order to comply with Food and Drug Administration regulations. Such changes
could interfere with Texas E-Solutions, Inc.'s marketing or products and
could cause us to incur significant additional expenses.
In addition, the Dietary Supplement Health and Education Act allows the
dissemination of "third party literature" in connection with the sale of
dietary supplements to consumers at retail if the publication meets
statutory requirements. Under the Dietary Supplement Health and Education
Act, "third party literature" may be distributed if, among other things, it
is not false or misleading, no particular manufacturer or brand of dietary
supplement is promoted, a balanced view of available scientific information
on the subject matter is presented and there is physical separation from
dietary supplements in stores. The extent to which this provision may be
used by online retailers is not yet clear, and Texas E-Solutions, Inc.
cannot assure you that all pieces of "third party literature" that may be
disseminated in connection with the products Texas E-Solutions, Inc. offers
for sale will be determined to be lawful by the Food and Drug
Administration. Any such failure could render the involved product an
unapproved drug or a "misbranded" product, potentially subjecting us to
enforcement action by the Food and Drug Administration, and could require
the removal of the non-compliant literature from Vitarnineralherb.com's
website or the modification of Texas E-Solutions, Inc.'s selling methods,
interfering with Texas E-Solutions, Inc.'s continued marketing of that
product and causing us to incur significant additional expenses. Given the
fact that the Dietary Supplement Health and Education Act was enacted only
five years ago, the Food and Drug Administration's regulatory policy and
enforcement positions on certain aspects of the new law are still evolving.
Moreover, ongoing and future litigation between dietary supplement
companies and the Food and Drug Administration will likely further refine
the legal interpretations of the Dietary Supplement Health and Education
Act. As a result, the regulatory status of certain types of dietary
supplement products, as well as the nature and extent of permissible claims
will remain unclear for the foreseeable future. Two areas in particular
that pose potential regulatory risk are the limits on claims implying some
benefit or relationship with a disease or related condition and the
application of the physical separation requirement for "third party
literature" as applied to Internet sales.
In addition to the regulatory scheme under the Food, Drug and Cosmetic
Act, the advertising and promotion of dietary supplements, foods, over-the-
counter drugs and cosmetics is subject to scrutiny by the Federal Trade
Commission. The Federal Trade Commission Act prohibits "unfair or
deceptive" advertising or marketing practices, and the Federal Trade
Commission has pursued numerous food and dietary supplement manufacturers
and retailers for deceptive advertising or failure to substantiate
promotional claims, including, in many instances, claims made via the
Internet. The Federal Trade Commission has the power to seek administrative
or judicial relief prohibiting a wide variety of claims, to enjoin future
advertising, to seek redress or restitution payments and to seek a consent
order and seek monetary penalties for the violation of a consent order. In
general, existing laws and regulations apply fully to transactions and
other activity on the Internet. The Federal Trade Commission is in the
process of reviewing its policies regarding the applicability of its rules
and its consumer protection guides to the Internet and other electronic
media. The Federal Trade Commission has already undertaken a new monitoring
and enforcement initiative, "Operation Cure-All," targeting allegedly bogus
health claims for products and treatments offered for sale on the Internet.
Many states impose their own labeling or safety requirements that differ
from or add to existing federal requirements.
Texas E-Solutions, Inc. cannot predict the nature of any future state or
Federal laws, regulations, interpretations or applications, nor can it
determine what effect additional governmental regulations or administrative
orders, when and if promulgated, would have on its business in the future.
Although the regulation of dietary supplements is less restrictive than
that of drugs and food additives, Texas E-Solutions, Inc cannot assure you
that the current statutory scheme and regulations applicable to dietary
supplements will remain less restrictive. Further, Texas E-Solutions, Inc.
cannot assure you that, under existing laws and regulations, or if more
stringent statutes are enacted, regulations are promulgated or enforcement
policies are adopted, it is or will be in compliance with these existing or
new statutes, regulations or enforcement policies without incurring
material expenses or adjusting its business strategy. Any laws,
regulations, enforcement policies, interpretations or applications
applicable to Texas E-Solutions, Inc.'s business could require the
reformulation of certain products to meet new standards, the recall or
discontinuance of certain products not capable of reformulation, additional
record keeping, expanded documentation of the properties of certain
products, expanded or different labeling or scientific substantiation.
Regulation of the Internet.
In general, existing laws and regulations apply to transactions and
other activity on the Internet; however, the precise applicability of these
laws and regulations to the Internet is sometimes uncertain. The vast
majority of such laws were adopted prior to the advent of the Internet and,
as a result, do not contemplate or address the unique issues of the
Internet or electronic commerce. Nevertheless, numerous federal and state
government agencies have already demonstrated significant activity in
promoting consumer protection and enforcing other regulatory and disclosure
statutes on the Internet. Additionally, due to the increasing use of the
Internet as a medium for commerce and communication, it is possible that
new laws and regulations may be enacted with respect to the Internet and
electronic commerce covering issues such as user privacy, freedom of
expression, advertising, pricing, content and quality of products and
services, taxation, intellectual property rights and information security.
The adoption of such laws or regulations and the applicability of existing
laws and regulations to the Internet may impair the growth of Internet use
and result in a decline in Texas E-Solutions, Inc. sales.
A number of legislative proposals have been made at the federal state
and local level, and by foreign governments, that would impose additional
taxes on the sale of goods and services over the Internet, and certain
states have taken measures to tax Internet-related activities. Although
Congress recently placed a three-year moratorium on new state and local
taxes on Internet access or on discriminatory taxes on electronic commerce,
existing state or local laws were expressly excepted from this moratorium.
Further, once this moratorium is lifted, some type of federal and/or state
taxes may be imposed upon Internet commerce. Such legislation or other
attempts at regulating commerce over the Internet may substantially impair
the growth of commerce on the Internet and, as a result, adversely affect
Texas E-Solutions, Inc.'s opportunity to derive financial benefit from such
activities.
Conflicts of Interest
Certain conflicts of interest may exist between the Company and its
officers and directors. Mr. Holmes has other business interests to which
he devotes his attention and may be expected to continue to do so although
management time should be devoted to the business of the Company. As a
result, conflicts of interest may arise that can be resolved only through
his exercise of such judgement as is consistent with his fiduciary duties
to the Company.
Possible Need for Additional Financing.
The Company has very limited funds and such funds are adequate to
implement the Company's business plan. The ultimate success of the Company
may depend on its ability to raise additional capital. The Company has not
investigated the availability, source or terms that might govern the
acquisition of additional financing. When additional capital is needed,
there is no assurance that funds will be available from any source or, if
available, that they can be obtained on terms acceptable to the Company. If
not available, the Company's operations would be severely limited and
commencement of business is impossible.
Regulation of Penny Stocks
The Company's securities, when available for trading, will be subject to
the Securities and Exchange Commission rule that imposes special sales
practice requirements upon broker-dealers that sell such securities to
other than established customers or accredited investors. For purposes of
the rule, the phrase "accredited investors" means, in general terms,
institutions with assets exceeding $5,000,000 or individuals having a net
worth in excess of $1,000,000 or having an annual income that exceeds
$200,000 (or that, combined with a spouses income, exceeds $300,000). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to the sale. Consequently, the
rule may affect the ability of purchasers of the Company's securities to
buy or sell in any market that may develop.
In addition, the Securities and Exchange Commission has adopted a
number of rules to regulate "penny Stocks". Such rules included Rules 3a51-
1, 15g-1, 15g-2. 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities
and Exchange Act of 1934, as amended. Because the securities of the Company
may constitute "penny stock" within the meaning of the rules, the rules
would apply to the Company and its securities. The rules may further affect
the ability of owners of shares in the Company to sell their securities in
any market that may develop for them.
Item 2.Management's discussion and analysis or plan of operation
The following discussion and analysis of Texas E-Solutions, Inc.'s
financial condition and results of operations should be read in conjunction
with the Financial Statements and accompanying notes and the other
financial information appearing elsewhere in this Form 10-SB. This Form 10-
SB contains, in addition to historical information, forward-looking
statements that involve risks and uncertainties. Texas E-Solutions, Inc.'s
actual results could differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed below, as well as those discussed
elsewhere in this Form 10-SB.
Results of operations
During the period from September 14, 1999 (date of inception) through
September 30, 2000, Texas E-Solutions, Inc. has engaged in no significant
operations other than organizational activities, acquisition of the rights
to market Vitamineralherb products. No revenues were received by Texas E-
Solutions, Inc. during this period.
For the current fiscal year, Texas E-Solutions, Inc. anticipates
incurring a loss as a result of organizational expenses, expenses
associated with registration under the Securities Act of 1934, and expenses
associated with setting up a company structure to begin implementing its
business plan. Texas E-Solutions, Inc.'s business plan is to determine the
feasibility of marketing the Vitamineralherb products in various markets,
and, if the products prove to be in demand, begin marketing and selling
Vitamineralherb products.
Liquidity and capital resources
Texas E-Solutions, Inc. remains in the development stage and, since
inception, has experienced no significant change in liquidity or capital
resources or shareholders' equity. Consequently, Texas E-Solutions, Inc.'s
balance sheet as of September 30, 2000, reflects total assets of $0.00, in
the form of a license and capitalized organizational costs. Organizational
expenses of $2,575 were paid for by the initial shareholders and expensed
to operations.
Texas E-Solutions, Inc. expects to carry out its plan of business as
discussed above. Texas E-Solutions, Inc. has no immediate expenses, other
than the $3,845 of organizational expenses incurred and paid by the initial
shareholders on behalf of the Company and $12,000 of additional expenses to
be incurred. Mr. Stephen Haues will serve in his capacity as an officer
and director of Texas E-Solutions, Inc. without compensation until a market
is developed for the Vitamineralherb products.
Texas E-Solutions, Inc.'s business plan is to determine the feasibility
of selling Vitamineralherb.com products to targeted markets. Should Texas
E-Solutions, Inc. determine that its business plan is feasible, it intends
to employ sales people to call on medical professionals, alternative health
professionals, martial arts studios and instructors, sports and fitness
trainers, other health and fitness professionals, school and other fund
raising programs and other similar types of customers to interest these
professionals in selling to their clients high-quality, low-cost vitamins,
minerals, nutritional supplements, and other health and fitness products.
These professionals would sell the products to their clients via the
Internet.
In order to determine the feasibility of its business plan, Texas E-
Solutions, Inc. plans, during the next six to twelve months, to conduct
research into these various potential target markets. Should Texas E-
Solutions, Inc. determine that the exploitation of the license is feasible,
it will engage salespeople to market the products. Based primarily on
discussions with the licensor, Texas E-Solutions, Inc. believes that during
its first operational quarter, it will need a capital infusion of
approximately $90,000 to achieve a sustainable sales level where ongoing
operations can be funded out of revenues. This capital infusion is
intended to cover costs of advertising, hiring and paying two salespeople,
and administrative expenses. In addition, Texas E-Solutions, Inc. will
need approximately $260,000 in the even it determines that its market will
not pay in advance and it will have to extend credit.
In addition, Texas E-Solutions, Inc. may engage in a combination with
another business. Texas E-Solutions, Inc. cannot predict the extent to
which its liquidity and capital resources will be diminished prior to the
consummation of a business combination or whether its capital will be
further depleted by the operating losses (if any) of the business entity
with which Texas E-Solutions, Inc. may eventually combine. Texas E-
Solutions, Inc. has engaged in no discussions concerning potential business
combinations, and has not entered into any agreement for such a
combination.
Texas E-Solutions, Inc. will need additional capital to carry out its
business plan or to engage. No commitments to provide additional funds
have been made by management or other shareholders. Accordingly, there can
be no assurance that any additional funds will be available on terms
acceptable to Texas E-Solutions, Inc. or at all. Texas E-Solutions, Inc.
has no commitments for capital expenditures.
Item 3. Description of property
Texas E-Solutions, Inc. currently maintains limited office space of
approximately 800 square feet, occupied by J.P. Beehner, for which it pays
no rent. Its address is 3030 FM 518, Apt 221, Pearland, TX 77584-7817. It
also maintains office space of approximately 250 square feet, occupied by
Stephen D. Holmes at 7720 74th. Drive, N.E., Marysville, WA 98270, and its
phone number is (360) 658-5566. Texas E-Solutions, Inc. does not believe
that it will need to obtain additional office space at any time in the
foreseeable future until its business plan is more fully implemented.
Item 4. Security ownership of certain beneficial
owners and management
The following table sets forth, as of October 1, 2000 Texas E-Solutions,
Inc.'s outstanding common stock owned of record or beneficially by each
Executive Officer and Director and by each person who owned of record, or
was known by Texas E. Solutions, Inc. to own beneficially, more than 5% of
its common stock, and the shareholdings of all Executive Officers and
Directors as a group. Each person has sole voting and investment power
with respect to the shares shown.
Number of Percentage of
Name Shares Held Shares Owned
J.P. Beehner 1,250,000 28%
P.O. Box 2370
Alvin, TX 77512-2370
Dorothy A. Mortenson 1,450,000(1) 32.44%
P.O. Box 5034
Alvin, TX 77512-5034
(1) Dorothy Mortenson's shares include 200,000 shares owned by her
husband, David R. Mortenson.
Item 5. Directors, executive officers, promoters and control persons
The following table sets forth the name age and position of each director
and executive officer of Texas E-Solutions, Inc.
Name Age Position
Stephen D. Holmes 55 President, Director
Mr. Holmes has been employed in both domestic and international sales
and marketing for over twelve years. Over the last five years Mr. Holmes
has worked for Essentially Yours Industries, Inc. and Voit Telecom
International, Inc. Essentially Yours Industries, Inc. is a manufacturer
and distributor of nutrition products. Voit Telecom International, Inc.
is a sales marketing firm which markets various products and services on
an international basis.
Item 6. Executive compensation
No officer or director has received any remuneration for Texas E-
Solutions, Inc. Although there is no current plan in existence, it is
possible that Texas E-Solutions, Inc. will adopt a plan to pay or accrue
compensation to its officers and directors for services related to the
implementation of Texas E-Solutions, Inc.'s business plan. Texas E-
Solutions, Inc. has no stock option, retirement, incentive, defined
benefit, actuarial, pension or profit-sharing programs for the benefit of
directors, officers or other employees, but the Board of Directors may
recommend adoption of one or more such programs in the future. Texas E-
Solutions, Inc. has no employment contract or compensatory plan or
arrangement with any executive officer of Texas E-Solutions, Inc.. The
directors currently do no receive any cash compensation from Texas E-
Solutions, Inc. for their services as members of the Board of Directors.
There is no compensation committee, and no compensation policies have been
adopted.
Item 7.Certain relationships and related transactions
No director, executive officer or nominee for election as a director of
Texas E-Solutions, Inc., and no owner of five percent or more of Texas E-
Solutions, Inc.'s outstanding shares or any member of their immediate
family has entered into or proposed any transaction in which the amount
received exceeds $60,000.
Item 8. Description of Securities
Common Stock
The Company's Articles of Incorporation authorize the issuance of
25,000,000 Shares of Common Stock. Each record holder of Common Stock is
entitled to 1 vote for each share held on all matters properly submitted to
the stockholders for their vote. The Articles of Incorporation do not
permit cumulative voting for the election of directors.
Holders of outstanding shares of Common Stock are entitled to such
dividends as may be declared from time to time by the Board of Directors
out of legally available funds; and, in the event of liquidation,
dissolution or winding up of the affairs of the Company, holders are
entitled to receive, ratably, the net assets of the Company available to
stockholders after distribution is made to the preferred shareholders, if
any, who are given preferred rights upon liquidation. Holders of
outstanding shares of Common Stock have no preemptive, conversion or
redemptive rights. All of the issued and outstanding shares are, and all
unissued shares when offered and sold, will be duly authorized, validly
issued, fully paid, and non-assessable. To the extent that additional
shares of the Company's Common Stock are issued, the relative interests of
then existing stockholders may be diluted.
Transfer Agent
The Company is currently serving as its own transfer agent, and plans to
continue to serve in that capacity until such time as management believes
it is necessary or appropriate to employ an independent transfer agent in
order to facilitate the creation of a public trading market for the
Company's securities. Should the Company's securities be quoted on any
exchange or OTC quotation system or application is made to have the
securities quoted, an independent transfer agent will be appointed.
PART II
Item 1.Market for common equity and related stockholder matters
No established public trading market exists for Texas E-Solutions,
Inc.'s securities. Texas E-Solutions, Inc. has no common equity
subject to outstanding purchase options or warrants. Texas E-
Solutions, Inc. has no securities convertible into its common equity.
There is no common equity that could be sold pursuant to Rule 144
under the Securities Act or that Texas E-Solutions, Inc. has agreed to
register under the Securities Act for sale by shareholders. Except
for this offering, there is no common equity that is being, or has
been publicly proposed to be, publicly offered by Texas E-Solutions,
Inc.
Item 2. Legal proceedings
Texas E-Solutions, Inc. is not a party to any pending legal
proceeding or litigation and none of its property is the subject of a
pending legal proceeding. Further, the officer and director knows of
no legal proceedings against Texas E-Solutions, Inc. or its property
contemplated by any governmental authority.
The Company is not a party to any pending legal proceedings, and no
such proceedings are known to be contemplated.
No director, officer, or affiliate of the Company, and no owner of
record or beneficial owner of more than 5.0% of the securities of the
Company, or any associate of any such director, officer or security
holder is a party adverse to the Company or has a material interest
adverse to the Company in reference to pending litigation.
Item 3. Changes in and Disagreements With Accountants
Not applicable.
Item 4. Recent sales of Unregistered Securities
Name of Date of Purchase Price per
Shareholder Purchase Shares Price Share
J. P. Beehner 8/20/99 1,250,000 $1250.00 $0.001
Dorothy A. Mortenson 8/20/99 1,250,000 $1250.00 $0.001
David R. Mortenson 8/21/99 200,000 $200.00 $0.001
Joshua J. Mortenson 8/21/99 200,000 $200.00 $0.001
Marie M. Charles 8/21/99 200,000 $200.00 $0.001
Roy Donovan
Hinton, Jr. 8/21/992 200,000 $200.00 $0.001
George R. Quan 8/21/99 200,000 $200.00 $0.001
Russell Linnell 2/15/00 200,000 $200.00 $0.001
Gregory Lynn Bauska 2/15/00, 200,000 $200.00 $0.001
William Jay Pierson 2/15/00, 200,000 $200.00 $0.001
Gail Gassert, PhD 2/15/00, 200,000 $200.00 $0.001
1. Issued in consideration of pre-incorporation services and
expenses.
2. Issued in consideration of the transfer of the Company's main
asset.
3. Shares sold by original shareholders for $200.00 consideration.
Each of the sales listed above was made for cash, services, or in
exchange for the Company's principal asset. All of the listed sales
were made in reliance upon the exemption from registration offered by
Section 4 (2) of the Securities Act of 1933. The Company had
reasonable grounds to believe immediately prior to making an offer to
the private investors, and did in fact believe, when such
subscriptions were accepted, that such purchasers (1) were purchasing
for investment and not with a view to distributions, and (2) had such
knowledge and experience in financial and business matters that they
were capable of evaluating the merits and risks of their investment
and were able to bear those risks. The purchasers had access to
pertinent information enabling them to ask informed questions. Two
separate filings of Form D have been made to the Securities and
Exchange Commission concerning the issuance of the aforementioned
shares. All such sales were made without the aid of underwriters, and
no sales commissions were paid.
On August 20, 1999, Texas E-Solutions, Inc., issued 2,500,000
shares of common stock to two shareholders in satisfaction of certain
organizational costs (approximately $2500.00) and activities performed
by the shareholders. The issuance of the shares were exempt from
registration under Rule 506 of Regulation D, and sections 3(b) and
4(2) of the Securities Act of 1933, due to the shareholders being
Texas E-Solutions, Inc.'s founders and serving as its initial
management, and the limited number of investors (two).
On August 21, 1999, Texas E-Solutions, Inc. issued a total of
2,000,000 shares of common stock to ten shareholders, one of whom is
the general partner, and nine of whom are investor participants in the
licensor of Texas E-Solutions, Inc.'s Biocatalyst rights. The
issuance of the common stock was exempt from registration under Rule
504 of Regulation D and section 3(b) of the Securities Act of 1933.
Texas E-Solutions, Inc.'s shares were valued at $0.001 per share, and
they were issued to accredited investors according to an exemption
from registration under Texas law that permits general solicitation
and general advertising so long as sales are made only to accredited
investors. If the exemption under Rule 504 of Regulation D is not
available, Texas E-Solutions, Inc. believes that the issuance was also
exempt under Rule 506 of Regulation D and section 3(b) and 4(2) under
the Securities Act of 1933, due to the limiting manner of the
offering, promptly filing notices of sale, and limiting the issuance
of shares to a small number of accredited investors (ten).
On February 15, 2000, four of the shareholders described above
transferred their shares to four other individuals. These four
selling shareholders received consideration of $200.00 each for their
shares. The purchasers represented and warranted to the Sellers that
Purchasers were "accredited investors" as that term is defined in Rule
501 of Regulation D under the Securities Act of 1933. These were
sales between private individuals.
Item 5. Indemnification of Directors and Officers
The Articles of Incorporation and the By-laws of the Company, filed
as Exhibits 2.1 and 2.2, respectively, provide that the Company will
indemnify its officers and directors for costs and expenses incurred
in connection with the defense of actions, suits, or proceedings where
the officer or director acted in good faith and in a manner he
reasonably believed to be in the Company's best interest and is a
party by reason of his status as an officer or director, absent a
finding of negligence of misconduct in the performance of duty.
PART FS
Texas E-Solutions, Inc.
(A Development Stage Company
Index
Independent Auditor F-1
Balance Sheets F-2
Statements of Operations F-3
Statements of Cash Flows F-4
Statement of Stockholders' Equity F-5
Notes to the Financial Statements F-6 - F-7
Texas E-Solutions Inc.
(A Development Stage Company)
To the Board of Directors
Texas E-Solutions Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Texas E-
Solutions Inc. (A Development Stage Company) as of June 30, 2000
and the related statements of operations, stockholders' equity and
cash flows for the period from August 19, 1999 (Date of Inception)
to June 30, 2000. 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 U.S. 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 aforementioned financial statements present
fairly, in all material respects, the financial position of Texas
E-Solutions Inc. (A Development Stage Company), as of June 30,
2000, and the results of its operations and its cash flows for the
period from August 19, 1999 (Date of Inception) to June 30, 2000,
in conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company has not generated any
revenues or conducted any operations since inception. These
factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these
matters are also discussed in Note 1. The financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.
CHARTERED ACCOUNTANTS
Vancouver, Canada
October 2, 2000
Texas E-Solutions Inc.
(A Development Stage Company)
Balance Sheets
(expressed in U.S. dollars)
September 30,June 30,
2000 2000
(unaudited)
$ $
Assets
License (Note 3) - -
Liabilities and Stockholders' Equity
Current Liability
Accounts payable 1,200 1,200
Contingent Liability (Note 1)
Stockholders' Equity
Common Stock, 25,000,000 shares authorized with a par value
of $.001; 4,500,000 shares issued and outstanding 4,500 4,500
Additional Paid-in Capital 75 75
Total 4,575 4,575
Deficit Accumulated During the Development Stage (5,775) (5,775)
________________
(1,200) (1,200)
- -
Texas E-Solutions Inc.
(A Development Stage Company)
Statements of Operations
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
Accumulated from
August 19,1999 From August 19, 1999
(Date of Inception) Three months ended (Date of Inception)
to September 30,2000 September 30,2000 to June 30,2000
(unaudited) (unaudited)
$ $ $
<S> <C> <C> <C>
Revenues - - -
Expenses
Amortization of
license 500 - 500
License written-off 1,500 - 1,500
Organization expenses 2,575 - 2,575
Transfer agent 1,200 - 1,200
__________________________________________________
5,775 - 5,775
__________________________________________________
Net Loss (5,775) - (5,775)
</TABLE>
Texas E-Solutions Inc.
(A Development Stage Company)
Statements of Cash Flows
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
Accumulated from
August 19,1999 From August 19, 1999
(Date of Inception) Three months ended (Date of Inception)
to September 30,2000 September 30,2000 to June 30,2000
(unaudited) (unaudited)
$ $ $
<S> <C> <C> <C>
Cash Flows to
Operating Activities
Net loss (5,775) - (5,775)
Non cash items
Expenses not paid with cash 2,575 - 2,575
Accounts payable 1,200 - 1,200
Amortization of license 500 - 500
License written-off 1,500 - 1,500
Net Cash Used by
Operating Activities - - -
Cash Flows from
Financing Activities - - -
Net Cash Provided by
Financing Activities - - -
Cash Flows from
Investing Activities - - -
Net Cash Provided by
Investing Activities - - -
Change in cash - - -
Cash - beginning of period - - -
Cash - end of period - - -
Non-Cash Financing Activities
A total of 2,500,000 shares were issued
at a fair market value of $.001 per share
for organizational expenses 2,500 - 2,500
A total of 2,000,000 shares were issued at
a fair market value of $0.001 per share for
the acquisition of a
License (Note 3) 2,000 - 2,000
Organization costs paid for by a director
for no consideration treated as additional
paid in capital 75 - 75
_______________________________________________________
4,575 - 4,575
Supplemental Disclosures
Interest paid - - -
Income tax paid - - -
</TABLE>
Texas E-Solutions Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
From August 19, 1999 (Date of Inception) to June 30, 2000
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Comman Stock Paid-in Development
shares Amount Capital Total Stage
<S> <C> <C> <C> <C> <C>
Balance - August 19, 1999
(Date of Inception) - - - - -
Stock issued for $2,500 of
organizational expenses 2500000 2,500 - 2,500 -
Additional paid in capital
for organizational expenses
incurred by a director on
behalf of the Company - - 75 75 -
Stock issued for "The
Biocatalyst License" at a
fair market value
of $0.001 per share 2000000 2,000 - 2,000 -
Net loss for The
period - - - - (5,775)
Balance - June 30, 2000 4500000 4,500 75 4,575 (5,775)
Net loss for The
period - - - - -
Balance - September 30,
2000 (unaudited) 4500000 4,500 75 4,575 (5,775)
</TABLE>
Texas E-Solutions Inc.
(A Development Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
1.Development Stage Company
Texas E-Solutions Inc. herein (the "Company") was incorporated in
the State of Nevada, U.S.A. on August 19, 1999. The Company
acquired a license to market and distribute a product in the States
of New Hampshire and Vermont. As discussed in Note 3, this license
is in jeopardy and the Company has retained the right to sue the
vendor. As a replacement for this license, the Company was granted
additional rights to market and distribute vitamins, minerals,
nutritional supplements, and other health and fitness products for
North Texas. The grantor of the license offers these products for
sale from various suppliers on their Web Site. See Note 4 regarding
related party transactions.
In a development stage company, management devotes most of its
activities in investigating business opportunities. Planned
principal activities have not yet begun. The ability of the
Company to emerge from the development stage with respect to any
planned principal business activity is dependent upon its
successful efforts to raise additional equity financing and find an
appropriate merger candidate. There is no guarantee that the
Company will be able to raise any equity financing or find an
appropriate merger candidate. There is substantial doubt regarding
the Company's ability to continue as a going concern.
2.Summary of Significant Accounting Policies
(a) Year end
The Company's fiscal year end is June 30.
(b) Licenses
Costs to acquire licenses are capitalized as incurred. These
costs will be amortized on a straight-line basis over their
remaining estimated useful lives.
The carrying value of the License is evaluated in each
reporting period to determine if there were events or
circumstances which would indicate a possible inability to
recover the carrying amount. Such evaluation is based on various
analyses including assessing the Company's ability to bring the
commercial applications to market, related profitability
projections and undiscounted cash flows relating to each
application which necessarily involves significant management
judgment.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a
maturity of three months or less at the time of issuance to be
cash equivalents.
(d) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the periods.
Actual results could differ from those estimates.
3.Licenses
(a) On August 20, 1999 the Company acquired a license for a
product. The Company has the exclusive right to distribute and
market the product under a private label in the States of New
Hampshire and Vermont for a period of three years expiring August
20, 2002. The Company issued 2,000,000 shares at a fair market
value of $.001 or $2,000. The shares were issued to the licensor
who are members of a partnership and whose general partner is
also a spouse of a director and officer of the Company.
The license was to be amortized to operations over one year
starting September 1, 1999.
The Company's right to use this license is in jeopardy due to a
lawsuit between the vendor of the license and the original owner.
As a result, the unamortized balance of $1,500 has been written-
off to operations. The Company and its shareholder have the right
to sue for breach of contract.
(b) As a replacement for the above license, at no additional
cost, the Company was granted additional rights to market
vitamins, minerals, nutritional supplements and other health and
fitness products through the Grantor's Web Site. The Company
desires to market these products to medical practitioners,
alternative health professionals, martial arts studios and
instructors, sports and fitness trainers, other health and
fitness practitioners, school and other fund raising programs and
other similar types of customers for North Texas. The license was
acquired on February 14, 2000 for a term of three years. The
Company must pay an annual fee of $500 for maintenance of the
Grantor's Web Site commencing on the anniversary date. The
Grantor of the license retains 50% of the profits.
4.Related Party Transactions
The Licenses referred to in Note 3 were sold to the Company by a
partnership whose general manager is the spouse of the
Secretary/Treasurer of the Company and a director for consideration
of 2,000,000 shares having a total fair market value of $2,000,
being the transferor's cost of such license. These shares were paid
evenly to the ten partners. The replacement license was also owned
by the same partnership.
PART III
Index of Exhibits
3.1 Articles of Incorporation
3.2 By-laws
4.0 Sample Stock Certificate
10.1 License Agreement
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.
Texas E-Solutions, Inc
January 8, 2001 By:__/s/_________________________
(Date) Stephen D. Holmes, President, Director
Exhibit 3.1
ARTICLES OF INCORPORATION
OF
Texas E-Solutions Inc.
The undersigned natural person of the age of eighteen
years or more, acting as incorporator of a corporation under and
pursuant to the laws of the State of Nevada, hereby adopts the
following Articles of Incorporation for such corporation:
ARTICLE I
The name of the corporation is Texas E-Solutions Inc.
ARTICLE II
The principal office of this corporation is to be at 50
West Liberty Street, Suite 880, Reno 89501, State of Nevada. The
registered office of this corporation is the same as its
principal office. The Nevada Agency and Trust Company is hereby
named as Resident Agent of this corporation and in charge of its
said office in Nevada.
ARTICLE III
The nature of the business, objects and purposes to be
transacted, promoted, or carried on by the corporation are:
A. To conduct any lawful business, to promote any lawful
purpose, and to engage in any lawful act or activity for
which corporations may be organized under the General
Corporation Law of the State of Nevada and to act in every
kind of fiduciary capacity and generally to do all things
necessary or convenient which are incident to or which a
natural person might or could do.
B. To purchase, receive, take by grant, gift, devise,
bequest, or otherwise lease, or otherwise acquire, own,
hold, improve, employ, use and otherwise deal in and with
real or personal property, or any interest therein,
wherever situated, and to sell, convey, lease, exchange,
transfer or otherwise dispose of, or mortgage or pledge,
all or any of its property and assets, or any interests
therein, wherever situated.
C. To engage generally in the real estate business as
principal, and in any lawful capacity, and generally to
take, lease, purchase, or otherwise acquire, and to own,
use, hold, sell, convey, exchange, lease, mortgage, work,
clear, improve, develop, divide, and otherwise handle,
manage, operate, deal in and dispose of mining claims, oil
leases, oil and gas wells, real estate, real property,
lands, multiple-dwelling structures, houses, buildings and
other works and any interest or right therein; to take,
lease, purchase or otherwise handle or acquire, and to
own, use, hold, sell, convey, exchange, hire, lease,
pledge, mortgage, and otherwise handle, and deal in and
dispose of, as principal agent or in any lawful capacity,
such personal property, chattels, chattels real, rights,
easements, privileges, causes inaction, notes, bonds,
mortgages, and securities as may lawfully be acquired,
held or disposed of and to acquire, purchase, sell,
assign, transfer, dispose of and generally deal in and
with as principal, agent, broker, and in any lawful
capacity, mortgages and other interests in real, personal,
and mixed properties; to carry on a general oil
exploration, mining exploration and management business as
principal, agent, representative, contractor, sub-
contractor, and in any other lawful capacity. To
manufacture, purchase or acquire in any lawful manner and
to hold, own, mortgage, pledge, sell, transfer, or in any
manner dispose of, and to deal and trade in goods, wares,
merchandise, and property of any and every class and
description, and in any part of the world.
D. To apply for, register, obtain, purchase, lease, take
licenses in respect of or otherwise acquire, and to hold,
own, use, operate, develop, enjoy, turn to account, grant
licenses and immunities in respect of, manufacture under
and to introduce, sell, assign, mortgage, pledge or
otherwise dispose of and, in any manner deal with and
contract with reference to:
1. Inventions, devices, formulas, processes, improvements
and modifications thereof.
2. Letters patent, patent rights, patented processes,
rights, designs, and similar rights, trademarks, trade
names, trade symbols and other indications of origin and
ownership granted by or recognized under the laws of the
United States of America, any state or subdivision
thereof, and any commonwealth, territory, possession,
dependency, colony, possession agency or instrumentality
of the United States of America and of any foreign
country, and all rights connected therewith or
appertaining thereto.
3. Franchises, licenses, grants and concessions.
E. To make, enter into, perform and carry out contracts of
every kind and description with any person, firm,
association, corporation or government or agency or
instrumentality thereof.
F. To lend money in furtherance of its corporate purposes
and to invest and reinvest its funds from time to time to
such extent, to such persons, firms, associations,
corporations, governments or agencies or instrumentalities
thereof, and on such terms and on such security, if any,
as the Board of Directors of the corporation may determine
and direct any officer to complete.
G. To borrow money without limit as to amount and at such
rates of interest as it may determine; from time to time
to issue and sell its own securities, including its shares
of stock, notes, bonds, debentures, and other obligations,
in such amounts, on such terms and conditions, for such
purposes and for such prices, now or hereafter permitted
by the laws of the State of Nevada and by the Board of
Directors of the corporation as they may determine; and to
secure any of its obligations by mortgage, pledge or other
encumbrance of any or all of its property, franchises and
income.
H. To be a promoter or manager of other corporations of
any type or kind; and to participate with others in any
corporation, partnership, limited partnership, joint
venture, or other association of any kind, or in any
transaction, undertaking or arrangement which the
corporation would have power to conduct by itself, whether
or not such participation involves sharing or delegation
of control with or to others.
I. To promote and exercise all or any part of the
foregoing purposes and powers in any and all parts of the
world, and to conduct its business in all or any branches
in any lawful capacity. The foregoing enumeration of
specific purposes and powers shall not be held to limit or
restrict in any manner the purposes and powers of the
corporation by references to or inference from the terms
or provisions of any other clause, but shall be regarded
as independent purposes.
ARTICLE IV
The aggregate number of shares which the corporation shall
have authority to issue is twenty-five million shares of common
stock having a par value of $.001 each.
No shareholder of the corporation shall have the right of
cumulative voting at any election of directors or upon any other
matter.
No holder of securities of the corporation shall be
entitled as a matter of right, preemptive or otherwise, to
subscribe for or purchase any securities of the corporation now
or hereafter authorized to be issued, or securities held in the
treasury of the corporation, whether issued or sold for cash or
other consideration or as a share dividend or otherwise. Any such
securities may be issued or disposed of by the board of directors
to such persons and on such terms as in its discretion it shall
deem advisable.
ARTICLE V
Any action required to, or that may, be taken at any
annual or special meeting of shareholders may be taken without a
meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be
signed by the holder or holders of shares having not less than
the minimum number of votes that would be necessary to take such
action at a meeting at which the holders of all shares entitled
to vote on the action were present and voted.
ARTICLE VI
The members of the governing board shall be styled DIRECTORS and
the number of such Directors shall be not less than one (1), or
more than five (5). The first board of directors shall be 2.
Members whose names and post office addresses are as follows:
J.P. Beehner
PO Box 5034
Alvin TX 77512-2370
Dorothy A. Mortenson
PO Box 5034
Alvin TX 77512-5034
ARTICLE VII
The initial number of stockholders will be 2. Additional
stockholders maybe obtained. The number of directors may be
changed as provided in N.R.S. 78.330.
ARTICLE VIII
A. No director of the corporation shall be liable to the
corporation or any of its shareholders for monetary damages for
an act or omission in the director's capacity as a director,
except that this Article VIII shall not authorize the elimination
or limitation of liability of a director of the corporation to
the extent the director is found liable for: (i) a breach of such
director's duty of loyalty to the corporation or its
shareholders; (ii) an act or omission not in good faith that
constitutes a breach of duty of such director to the corporation
or an act or omission that involves intentional misconduct or a
knowing violation of the law; (iii) a transaction from which such
director received an improper benefit, whether or not the benefit
resulted from an action taken within the scope of the director's
office; or (iv) an act or omission for which the liability of a
director is expressly provided by an applicable statute.
B. The capital stock of this corporation after the amount
of the subscription price or par value has been paid in, shall
not be subject to assessment to pay debts of this corporation and
no stock issued as fully paid up shall ever be assessable or
assessed and the Articles of Incorporation shall not be amended
in this particular.
ARTICLE IX
This corporation is to have perpetual existence.
Dorothy A. Mortenson, the undersigned, being the original
incorporator for the purpose of forming a corporation to do
business both within and without the state of Nevada, and in
pursuance of the General Corporation Law of the State of Nevada,
effective March 31, 1925 and as subsequently amended do make and
file this certificate, hereby declaring and certifying that the
facts herein above stated are true.
This__________day of __________________, 19 .
________________________________________
Address: PO Box 5034
Alvin TX 77512-5034
On __________________________________, 19 before me, the
undersigned, a Notary Public in and for said State, personally
appeared ______________________________________________ to me
known to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same.
WITNESS my hand and official seal.
___________________________________
Notary Public
Exhibit 3.2
BYLAWS OF
Texas E-Solutions, Inc.
CONTENTS OF INITIAL BYLAWS
ARTICLE PAGE
1.00 CORPORATE CHARTER AND BYLAWS
1.01 Corporate Charter Provision 4
1.02 Registered Agent or Office-Requirement
of Filing Changes with Secretary of State 4
1.03 Initial Business Office 4
1.04 Amendment of Bylaws 5
2.00 DIRECTORS AND DIRECTORS' MEETINGS
2.01 Action Without Meeting 5
2.02 Telephone Meetings 5
2.03 Place of Meetings 5
2.04 Regular Meetings 5
2.05 Call of Special Meeting 6
2.06 Quorum 6
2.07 Adjournment-Notice of Adjourned Meetings 6
2.08 Conduct of Meetings 6
2.09 Powers of the Board of Directors 7
2.10 Board Committees-Authority to Appoint 7
2.11 Transactions with Interested Directors 7
2.12 Number of Directors 8
2.13 Term of Office 8
2.14 Removal of Directors 8
2.15 Vacancies 8
2.15(a) Declaration of Vacancy 9
2.15(b) Filling Vacancies by Directors 9
2.15(c) Filling Vacancies by Shareholders 9
2.16 Compensation 9
2.17 Indemnification of Directors
and Officers 9
2.18 Insuring Directors, Officers, and Employees 9
3.00 SHAREHOLDERS' MEETINGS
3.01 Action Without Meeting 10
3.02 Telephone Meetings 10
3.03 Place of Meetings 10
3.04 Notice of Meetings 10
3.05 Voting List 11
3.06 Votes per Share 11
3.07 Cumulative Voting 11
3.08 Proxies 12
3.09 Quorum 12
3.09(a) Quorum of Shareholders 12
3.09(b) Adjourn for Lack or Loss of Quorum 12
3.10 Voting by Voice or Ballot 12
3.11 Conduct of Meetings 12
3.12 Annual Meetings 13
3.13 Failure to Hold Annual Meeting 13
3.14 Special Meetings 13
4.00 OFFICERS
4.01 Title and Appointment 14
4.01(a) Chairman 14
4.01(b) President 14
4.01(c) Vice President 14
4.01(d) Secretary 15
4.01(e) Treasurer 15
4.01(f) Assistant Secretary or
Assistant Treasurer 16
4.02 Removal and Resignation 16
4.03 Vacancies 16
4.04 Compensation 17
5.00 AUTHORITY TO EXECUTE INSTRUMENTS
5.01 No Authority Absent Specific Authorization 17
5.02 Execution of Certain Instruments 17
6.00 ISSUANCE AND TRANSFER OF SHARES
6.01 Classes and Series of Shares 17
6.02 Certificates for Fully Paid Shares 18
6.03 Consideration for Shares 18
6.04 Replacement of Certificates 18
6.05 Signing Certificates-Facsimile Signatures 18
6.06 Transfer Agents and Registrars 18
6.07 Conditions of Transfer 19
6.08 Reasonable Doubts as to Right to Transfer 19
7.00 CORPORATE RECORDS AND ADMINISTRATION
7.01 Minutes of Corporate Meetings 19
7.02 Share Register 19
7.03 Corporate Seal 20
7.04 Books of Account 20
7.05 Inspection of Corporate Records 20
7.06 Fiscal Year 20
7.07 Waiver of Notice 21
8.00 ADOPTION OF INITIAL BYLAWS 21
ARTICLE ONE-CORPORATE CHARTER AND BYLAWS
1.01 CORPORATE CHARTER PROVISIONS
The Corporation's Charter authorizes Twenty-five million (25,000,000)
shares to be issued. The officers and transfer agents issuing shares of
the Corporation shall ensure that the total number of shares outstanding
at any given time does not exceed this number. Such officers and agents
shall advise the Board at least annually of the authorized shares
remaining available to be issued. No shares shall be issued for less
than the par value stated in the Charter. Each Charter provision shall be
observed until amended by Restated Articles or Articles of Amendment
duly filed with the Secretary of State.
1.02 REGISTERED AGENT AND OFFICE-REQUIREMENT OF FILING
CHANGES WITH SECRETARY OF STATE
The address of the Registered Office provided in the Articles of
Incorporation, as duly filed with the Secretary of State for the State
of Nevada is: 50 West Liberty Street, #880, Reno NV 89501.
The name of the Registered Agent of the Corporation at such address,
as set forth in its Articles of Incorporation, is: The Nevada Agency
and Trust Company.
The Registered Agent or Office may be changed by filing a Statement of
Change of Registered Agent or Office or Both with the Secretary of State,
and not otherwise. Such filing shall be made promptly with each change.
Arrangements for each change in Registered Agent or Office shall ensure
that the Corporation is not exposed to the possibility of a default
judgment. Each successive Registered Agent shall be of reliable character
and well informed of the necessity of immediately furnishing the papers
of any lawsuit against the Corporation to its attorneys.
1.03 INITIAL BUSINESS OFFICE
The address of the initial principal business office of the
Corporation is hereby established as: PO Box 5034, Alvin, TX 77512-5034.
The Corporation may have additional business offices within the State
of Nevada, and where it may be duly qualified to do business outside of
Nevada, as the Board of Directors may from time to time designate or the
business of the Corporation may require.
1.04 AMENDMENT OF BYLAWS
The Shareholders or Board of Directors, subject to any limits imposed
by the Shareholders, may amend or repeal these Bylaws and adopt new Bylaws.
All amendments shall be upon advice of counsel as to legality, except in
emergency. Bylaw changes shall take effect upon adoption unless otherwise
specified. Notice of Bylaws changes shall be given in or before notice
given of the first Shareholders' meeting following their adoption.
ARTICLE TWO-DIRECTORS AND DIRECTORS' MEETINGS
2.01 ACTION BY CONSENT OF BOARD WITHOUT MEETING
Any action required or permitted to be taken by the Board of Directors
may be taken without a meeting, and shall have the same force and effect
as a unanimous vote of Directors, if all members of the Board consent
in writing to the action. Such consent may be given individually or
collectively.
2.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws and by the
Business Corporation Act, Directors may participate in and hold a meeting
by means of conference call or similar communication by which all persons
participating can hear each other. Participation in such a meeting shall
constitute presence in person at such meeting, except participation for the
express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
2.03 PLACE OF MEETINGS
Meetings of the Board of Directors shall be held at the business
office of the Corporation or at such other place within or without the
State of Nevada as may be designated by the Board.
2.04 REGULAR MEETINGS
Regular meetings of the Board of Directors shall be held, without call
or notice, immediately following each annual Shareholders' meeting, and
at such other regularly repeating times as the Directors may determine.
2.05 CALL OF SPECIAL MEETING
Special meetings of the Board of Directors for any purpose may be
called at any time by the President or, if the President is absent or
unable or refuses to act, by any Vice President or any two Directors.
Written notices of the special meetings, stating the time and place of
the meeting, shall be mailed ten days before, or telegraphed or
personally delivered so as to be received by each Director not later than
two days before, the day appointed for the meeting. Notice of meetings
need not indicate an agenda. Generally, a tentative agenda will be included,
but the meeting shall not be confined to any agenda included with the notice.
Meetings provided for in these Bylaws shall not be invalid for lack of
notice if all persons entitled to notice consent to the meeting in writing
or are present at the meeting and do not object to the notice given. Consent
may be given either before or after the meeting.
Upon providing notice, the Secretary or other officer sending notice
shall sign and file in the Corporate Record Book a statement of the details
of the notice given to each Director. If such statement should later not be
found in the Corporate Record Book, due notice shall be presumed.
2.06 QUORUM
The presence throughout any Directors' meeting, or adjournment
thereof, of a majority of the authorized number of Directors shall be
necessary to constitute a quorum to transact any business, except to
adjourn. If a quorum is present, every act done or resolution passed by
a majority of the Directors present and voting shall be the
act of the Board of Directors.
2.07 ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS
A quorum of the Directors may adjourn any Directors' meeting to meet
again at a stated hour on a stated day. Notice of the time and place where
an adjourned meeting will be held need not be given to absent Directors
if the time and place is fixed at the adjourned meeting. In the absence
of a quorum, a majority of the Directors present may adjourn to a set time
and place if notice is duly given to the absent members, or until the time
of the next regular meeting of the Board.
2.08 CONDUCT OF MEETINGS
At every meeting of the Board of Directors, the Chairman of the Board,
if there is such an officer, and if not, the President, or in the President's
absence, a Vice President designated by the President, or in the absence
of such designation, a Chairman chosen by a majority of the Directors
present, shall preside. The Secretary of the Corporation shall act as
Secretary of the Board of Directors' meetings. When the Secretary is absent
from any meeting, the Chairman may appoint any person to act as
Secretary of that meeting.
2.09 POWERS OF THE BOARD OF DIRECTORS
The business and affairs of the Corporation and all corporate powers
shall be exercised by or under authority of the Board of Directors, subject
to limitations imposed by law, the Articles of Incorporation, any
applicable Shareholders' agreement, and these Bylaws.
2.10 BOARD COMMITTEES-AUTHORITY TO APPOINT
The Board of Directors may designate an executive committee and one or
more other committees to conduct the business and affairs of the Corporation
to the extent authorized. The Board shall have the power at any time to
change the powers and membership of, fill vacancies in, and dissolve any
committee. Members of any committee shall receive such compensation as the
Board of Directors may from time to time provide. The designation of any
committee and the delegation of authority thereto shall not operate to
relieve the Board of Directors, or any member thereof, of any
responsibility imposed by law.
2.11 TRANSACTIONS WITH INTERESTED DIRECTORS
Any contract or other transaction between the Corporation and any of
its Directors (or any corporation or firm in which any of its Directors are
directly or indirectly interested) shall be valid for all purposes
notwithstanding the presence of that Director at the meeting during which
the contract or transaction was authorized, and notwithstanding the
Directors' participation in that meeting. This section shall apply only
if the contract or transaction is just and reasonable to the Corporation at
the time it is authorized and ratified, the interest of each Director
is known or disclosed to the Board of Directors, and the Board nevertheless
authorizes or ratifies the contract or transaction by a majority of the
disinterested Directors present. Each interested Director is to be counted
in determining whether a quorum is present, but shall not vote
and shall not be counted in calculating the majority necessary to carry the
vote. This section shall not be construed to invalidate contracts or
transactions that would be valid in its absence.
2.12 NUMBER OF DIRECTORS
The number of Directors of this Corporation shall be 2. No Director
need be a resident of Nevada or a Shareholder. The number of Directors may
be increased or decreased from time to time by amendment to these Bylaws.
Any decrease in the number of Directors shall not have the effect of
shortening the tenure which any incumbent Director would otherwise enjoy.
2.13 TERM OF OFFICE
Directors shall be entitled to hold office until their successors are
elected and qualified. Election for all Director positions, vacant or not
vacant, shall occur at each annual meeting of the Shareholders and may be
held at any special meeting of Shareholders called specifically for that
purpose.
2.14 REMOVAL OF DIRECTORS
The entire Board of Directors or any individual Director may be
removed from office by a vote of Shareholders holding a majority of the
outstanding shares entitled to vote at an election of Directors. However,
if less than the entire Board is to be removed, no one of the Directors
may be removed if the votes cast against his removal would be sufficient
to elect him if then cumulatively voted at an election of the entire Board
of Directors. No director may be so removed except at an election of
the class of Directors of which he is a part. If any or all Directors are
so removed, new Directors may be elected at the same meeting. Whenever a
class or series of shares is entitled to elect one or more Directors under
authority granted by the Articles of Incorporation, the provisions of this
Paragraph apply to the vote of that class or series and not to the vote
of the outstanding shares as a whole.
2.15 VACANCIES
Vacancies on the Board of Directors shall exist upon the occurrence of
any of the following events: (a) the death, resignation, or removal of any
Director; (b) an increase in the authorized number of Directors; or (c) the
failure of the Shareholders to elect the full authorized number of Directors
to be voted for at any annual, regular, or special Shareholders' meeting at
which any Director is to be elected.
2.15(a) DECLARATION OF VACANCY
A majority of the Board of Directors may declare vacant the office of
a Director if the Director: (a) is adjudged incompetent by a court order;
(b) is convicted of a crime involving moral turpitude; (c) or fails to
accept the office of Director, in writing or by attending a meeting of the
Board of Directors, within thirty (30) days of notice of election.
2.15(b) FILLING VACANCIES BY DIRECTORS
Vacancies other than those caused by an increase in the number of
Directors may be filled temporarily by majority vote of the remaining
Directors, though less than a quorum, or by a sole remaining Director. Each
Director so elected shall hold office until
a qualified successor is elected at a Shareholders' meeting.
2.15(c) FILLING VACANCIES BY SHAREHOLDERS
Any vacancy on the Board of Directors, including those caused by an
increase in the number of Directors shall be filled by the Shareholders
at the next annual meeting or at a special meeting called for that purpose.
Upon the resignation of a Director tendered to take effect at a future time,
the Board or the Shareholders may elect a successor to take office when the
resignation becomes effective.
2.16 COMPENSATION
Directors shall receive such compensation for their services as
Directors as shall be determined from time to time by resolution of the
Board. Any Director may serve the Corporation in any other capacity as
an officer, agent, employee, or otherwise, and receive compensation
therefor.
2.17 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Board of Directors shall authorize the Corporation to pay or
reimburse any present or former Director or officer of the Corporation any
costs or expenses actually and necessarily incurred by that officer in any
action, suit, or proceeding to which the officer is made a party by reason
of holding that position, provided, however, that no officer shall receive
such indemnification if finally adjudicated therein to be liable for
negligence or misconduct in office. This indemnification shall extend to
good-faith expenditures incurred in anticipation of threatened or proposed
litigation. The Board of Directors may in proper cases, extend the
indemnification to cover the good-faith settlement of any such action, suit,
or proceeding, whether formally instituted or not.
2.16 INSURING DIRECTORS, OFFICERS, AND EMPLOYEES
The Corporation may purchase and maintain insurance on behalf of any
Director, officer, employee, or agent of the Corporation, or on behalf of
any person 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 that person and
incurred by that person in any such corporation, whether or not the Corporation
has the power to indemnify that person against liability for any of those acts.
ARTICLE THREE-SHAREHOLDERS' MEETINGS
3.01 ACTION WITHOUT MEETING
Any action that may be taken at a meeting of the Shareholders under
any provision of the Nevada Business Corporation Act may be taken without
a meeting if authorized by a consent or waiver filed with the Secretary of
the Corporation and signed by the holders of 51% of shares which would be
entitled to vote on that action at a Shareholders meeting. Each such signed
consent or waiver, or a true copy thereof, shall be placed in the Corporate
Record Book.
3.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws and by the
Business Corporation Act, Shareholders may participate in and hold a
meeting by means of conference call or similar communication by which all
persons participating can hear each other. Participation in such a meeting
shall constitute presence in person at such meeting, except participation
for the express purpose of objecting to the transaction of any business on
the ground that the meeting is not lawfully called or convened.
3.03 PLACE OF MEETINGS
Shareholders meetings shall be held at the business office of the
Corporation, or at such other place within or without the State of Nevada
as may be designated by the Board of Directors or the Shareholders.
3.04 NOTICE OF MEETINGS
The President, the Secretary, or the officer or persons calling a
Shareholders' Meeting. shall give notice, or cause it to be given, in
writing to each Director and to each Shareholder entitled to vote at
the meeting at least ten (10) but not more than sixty (60) days before
the date of the meeting. Such notice shall state the place, day,
and hour of the meeting, and, in case of a special meeting, the purpose or
purposes for which the meeting is called. Such written notice may be
given personally, by mail, or by other means. Such notice shall be addressed
to each recipient at such address as appears on the Books of the
Corporation or as the recipient has given to the Corporation for the
purpose of notice. Meetings provided for in these Bylaws shall not
be invalid for lack of notice if all persons entitled to notice consent to
the meeting in writing or are present at the meeting in person or by proxy
and do not object to the notice given, Consent may be given either before
or after the meeting. Notice of the reconvening of an adjourned meeting is
not necessary unless the meeting is adjourned more than thirty days past
the date stated in the notice, in which case notice of the adjourned
meeting shall be given as in the case of any special meeting.
Notice may be waived by written waivers signed either before or after
the meeting by all persons entitled to the notice.
3.05 VOTING LIST
At least ten (10), but not more than sixty (60), days before each
Shareholders' meeting, the officer or agent having charge of the
Corporation's share transfer books shall make a complete list of the
Shareholders entitled to vote at that meeting or any adjournment thereof,
arranged in alphabetical order, with the address and the number
of shares held by each. The list shall be kept on file at the Registered
Office of the Corporation for at least ten (10) days prior to the meeting,
and shall be subject to inspection by any Director, officer, or Shareholder
at any time during usual business hours. The list shall also be produced and
kept open at the time and place of the meeting and shall be subject, during
the whole time of the meeting, to the inspection of any Shareholder. The
original share transfer books shall be prima facie evidence as to
the Shareholders entitled to examine such list or transfer books or to vote
at any meeting of Shareholders. However, failure to prepare and to make the
list available in the manner provided above shall not affect the validity
of any action taken at the meeting.
3.06 VOTES PER SHARE
Each outstanding share, regardless of class, shall be entitled to one
(1) vote on each matter submitted to a vote at a meeting of Shareholders,
except to the extent that the voting rights of the shares of any class or
classes are limited or denied pursuant to the Articles of Incorporation.
A Shareholder may vote in person or by proxy executed in writing by the
Shareholder, or by the Shareholders duly authorized attorney-in-fact.
3.07 CUMULATIVE VOTING
Subject to any limitation stated in the Articles of Incorporation,
every Shareholder entitled to vote at any election of Directors may
cumulate votes. For this purpose, each Shareholder shall have a number of
votes equal to the number of Directors to be elected multiplied by the
number of votes to which the Shareholders shares are entitled. The
Shareholder may cast all these votes for one candidate or may
distribute the votes among any number of candidates. The candidates
receiving the highest number of votes are elected, up to the number of
vacancies to be filled. No Shareholder may cumulate votes unless that
Shareholder gives written notice of his or her intention to do so to the
Secretary of the Corporation on or before the day
preceding the election at which the votes will be cumulated. If any
Shareholder gives written notice as provided above, all Shareholders may
cumulate their votes.
3.08 PROXIES
A Shareholder may vote either in person or by proxy executed in
writing by the Shareholder or his or her duly authorized attorney in fact.
Unless otherwise provided in the proxy or by law, each proxy shall be
revocable and shall not be valid after eleven
(11) months from the date of its execution.
3.09 QUORUM
3.09(a) QUORUM OF SHAREHOLDERS
As to each item of business to be voted on, the presence (in person or
by proxy) of the persons who are entitled to vote a majority of the
outstanding voting shares on that matter shall constitute the quorum
necessary for the consideration of the matter at a Shareholders' meeting.
The vote of the holders of a majority of the shares entitled to
vote on the matter and represented at a meeting at which a quorum is
present shall be the act of the Shareholders' meeting.
3.09(b) ADJOURNMENT FOR LACK OR LOSS OF QUORUM
No business may be transacted in the absence of a quorum, or upon the
withdrawal of enough Shareholders to leave less than a quorum, other than
to adjourn the meeting from time to time by the vote of a majority of the
shares represented at the meeting.
3.10 VOTING BY VOICE OR BALLOT
Elections for Directors need not be by ballot unless a Shareholder
demands election by ballot before the voting begins.
3.11 CONDUCT OF MEETINGS
Meetings of the Shareholders shall be chaired by the President, or,
in the President's absence, a Vice President designated by the President,
or, in the absence of such designation, any other person chosen by a
majority of the Shareholders of the Corporation present in person or by
proxy and entitled to vote. The Secretary of the Corporation, or, in the
Secretary's absence, an Assistant Secretary, shall act as
Secretary of all meetings of the Shareholders. In the absence of the
Secretary or Assistant Secretary, the Chairman shall appoint another
person to act as Secretary of the meeting.
3.12 ANNUAL MEETINGS
The time, place, and date of the annual meeting of the Shareholders of
the Corporation, for the purpose of electing Directors and for the transaction
of any other business as may come before the meeting, shall be set from time
to time by a majority vote of the Board of Directors. If the day fixed for
the annual meeting shall be on a legal holiday in the State of Nevada, such
meeting shall be held on the next succeeding business day. If the election
of Directors is not held on the day thus designated for any
annual meeting, or at any adjournment thereof, the Board of Directors shall
cause the election to be held at a special meeting of the Shareholders as soon
thereafter as possible.
3.13 FAILURE TO HOLD ANNUAL MEETING
If, within any 13-month period, an annual Shareholders' Meeting is not
held, any Shareholder may apply to a court of competent jurisdiction in the
county in which the principal office of the Corporation is located for a
summary order that an annual meeting be held.
3.14 SPECIAL MEETINGS
A special Shareholders' meeting may be called at any time by. (a) the
President;
(b) the Board of Directors; or (c) one or more Shareholders holding in the
aggregate one-tenth or more of all the shares entitled to vote at the
meeting. Such meeting may be called for any purpose. The party calling the
meeting may do so only by written request sent by registered mail or
delivered in person to the President or Secretary.
The officer receiving the written request shall within ten (10) days from
the date of its receipt cause notice of the meeting to be sent to all the
Shareholders entitled to vote at such a meeting. If the officer does not
give notice of the meeting within ten (10) days after the date of receipt
of the written request, the person or persons calling the
meeting may fix the time of the meeting and give the notice. The notice
shall be sent pursuant to Section 3.04 of these Bylaws. The notice of a
special Shareholders' meeting must state the purpose or purposes of the
meeting and, absent consent of every Shareholder to the specific action
taken, shall be limited to purposes plainly stated in the notice,
notwithstanding other provisions herein.
ARTICLE FOUR-OFFICERS
4.01 TITLE AND APPOINTMENT
The officers of the Corporation shall be a President and a Secretary,
as required by law. The Corporation may also have, at the discretion of the
Board of Directors, a Chairman of the Board, one or more Vice Presidents,
a Treasurer, one or more Assistant Secretaries, and one or more Assistant
Treasurers. Any two or more offices, including President and Secretary, may
be held by one person. All officers shall be elected by and hold office at
the pleasure of the Board of Directors, which shall fix the
compensation and tenure of all officers.
4.01(a) CHAIRMAN OF THE BOARD
The Chairman, if there shall be such an officer, shall, if present,
preside at the meetings of the Board of Directors and exercise and perform
such other powers and duties as may from time to time be assigned to the
Chairman by the Board of Directors or prescribed by these Bylaws.
4.01(b) PRESIDENT
Subject to such supervisory powers, if any, as may be given to the
Chairman, if there is one, by the Board of Directors, the President shall
be the chief executive officer of the Corporation and shall, subject to the
control of the Board of Directors, have general supervision, direction, and
control of the business and officers of the Corporation. The President shall
have the general powers and duties of management usually vested in the
office of President of a corporation; shall have such other powers
and duties as may be prescribed by the Board of Directors or the Bylaws;
and shall be ex officio a member of all standing committees, including the
executive committee, if any. In addition, the President shall preside at all
meetings of the Shareholders and in the absence of the Chairman, or if there
is no Chairman, at all meetings of the Board of Directors.
4.01(c) VICE PRESIDENT
Any Vice President shall have such powers and perform such duties as
from time to time may be prescribed by these Bylaws, by the Board of
Directors, or by the President. In the absence or disability of the
President, the senior or duly appointed Vice President, if any, shall
perform all the duties of the President, pending action by
the Board of Directors when so acting, such Vice President shall have all
the powers of, and be subject to all the restrictions on, the President.
4.01(d) SECRETARY
The Secretary shall:
(1) See that all notices are duly given in accordance with the
provisions of these Bylaws and as required by law. In case of the
absence or disability of the Secretary. or the Secretary's refusal or
neglect to act, notice may be given and served by an Assistant Secretary
or by the Chairman, the President, any Vice President, or by the Board of
Directors.
(2) Keep the minutes of corporate meetings, and the Corporate
Record Book, as set out in Section 7.01 hereof.
(3) Maintain, in the Corporate Record Book, a record of all
share certificates issued or canceled and all shares of the Corporation
canceled or transferred.
(4) Be custodian of the Corporation's records and of any seal
which the Corporation may from time to time adopt. When the
Corporation exercises its right to use a seal, the Secretary shall see
that the seal is embossed on all share certificates prior to their
issuance and on all documents authorized to be executed under seal in
accordance with the provisions of these Bylaws.
(5) In general, perform all duties incident to the office of
Secretary, and such other duties as from time to time may be
required by Sections 7.01, 7.02, and 7.03 of these Bylaws, by
these Bylaws generally, by the Board of Directors, or by the
President.
4.01(e) TREASURER
The Treasurer shall:
(1) Have charge and custody of, and be responsible for, all
funds and securities of the Corporation, and deposit all funds
in the name of the Corporation in those banks, trust companies,
or other depositories that shall be selected by the Board of
Directors.
(2) Receive, and give receipt for, monies due and payable to the
Corporation.
(3) Disburse or cause to be disbursed the funds of the
Corporation as may be directed by the Board of Directors, taking
proper vouchers for those disbursements.
(4) If required by the Board of Directors or the President, give
to the Corporation a bond to assure the faithful performance of
the duties of the Treasurer's office and the restoration to the
Corporation of all corporate books, papers, vouchers, money, and
other property of whatever kind in the Treasurer's possession or
control, in case of the Treasurer's death,
resignation, retirement, or removal from office. Any such
bond shall be in a sum satisfactory to the Board of Directors,
with one or more sureties or a surety company satisfactory to
the Board of Directors.
(5) In general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be
assigned to the Treasurer by Sections 7.04 and 7.05 of these
Bylaws, by these Bylaws generally,
by the Board of Directors, or by the President.
4.01(f) ASSISTANT SECRETARY AND ASSISTANT TREASURER
The Assistant Secretary or Assistant Treasurer shall have such powers
and perform such duties as the Secretary or Treasurer, respectively, or as
the Board of Directors or President may prescribe. In case of the absence
of the Secretary or Treasurer, the senior Assistant Secretary or Assistant
Treasurer, respectively, may perform all of the functions of the Secretary
or Treasurer.
4.02 REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by vote of a
majority of the Directors at any regular or special meeting of the Board,
or, except in case of an officer chosen by the Board of Directors, by any
committee or officer upon whom that power of removal may be conferred by
the Board of Directors. Such removal shall be without prejudice to the
contract rights, if any, of the person removed. Any officer may
resign at any time by giving written notice to the Board of Directors, the
President, or the Secretary of the Corporation. Any resignation shall take
effect on the date of the receipt of that notice or at any later time
specified therein, and, unless otherwise specified therein, the acceptance
of that resignation shall not be necessary to make it effective.
4.03 VACANCIES
Upon the occasion of any vacancy occurring in any office of the
Corporation, by reason of death, resignation, removal, or otherwise, the
Board of Directors may elect an acting successor to hold office for the
unexpired term or until a permanent successor is elected.
4.04 COMPENSATION
The compensation of the officers shall be fixed from time to time by
the Board of Directors, and no officer shall be prevented from receiving
a salary by reason of the fact that the officer is also a Shareholder or
a Director of the Corporation, or both.
ARTICLE FIVE-AUTHORITY TO EXECUTE INSTRUMENTS
5.01 NO AUTHORITY ABSENT SPECIFIC AUTHORIZATION
These Bylaws provide certain authority for the execution of
instruments. The Board of Directors, except as otherwise provided in these
Bylaws, may additionally 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. Unless expressly authorized by these Bylaws
or the Board of Directors, no officer, agent, or employee shall have
any power or authority to bind the Corporation by any contract or
engagement nor to pledge its credit nor to render it pecuniarily liable for
any purpose or in any amount.
5.02 EXECUTION OF CERTAIN INSTRUMENTS
Formal contracts of the Corporation, promissory notes, deeds, deeds of
trust, mortgages, pledges, and other evidences of indebtedness of the
Corporation, other corporate documents, and certificates of ownership of
liquid assets held by the Corporation shall be signed or endorsed by the
President or any Vice President and by the Secretary or the Treasurer,
unless otherwise specifically determined by the Board of Directors or
otherwise required by law.
ARTICLE SIX-ISSUANCE AND TRANSFER OF SHARES
6.01 CLASSES AND SERIES OF SHARES
The Corporation may issue one or more classes or series of shares, or
both. Any of these classes or series may have full, limited, or no voting
rights, and may have such other preferences, rights, privileges, and
restrictions as are stated or authorized in the Articles of Incorporation.
All shares of any one class shall have the same voting, conversion,
redemption, and other rights, preferences, privileges, and restrictions,
unless the class is divided into series. If a class is divided into series,
all the shares of any one series shall have the same voting, conversion,
redemption, and other. rights, preferences, privileges, and restrictions.
There shall always be a class or series of shares outstanding that has
complete voting rights except as limited or restricted by voting rights
conferred on some other class or series of outstanding shares.
6.02 CERTIFICATES FOR FULLY PAID SHARES
Neither shares nor certificates representing shares may be issued by
the Corporation until the full amount of the consideration has been received.
When the consideration has been paid to the Corporation, the shares shall be
deemed to have been issued and the certificate representing the shares shall
be issued to the shareholder.
6.03 CONSIDERATION FOR SHARES
Shares may be issued for such consideration as may be fixed from time
to time by the Board of Directors, but not less than the par value stated
in the Articles of Incorporation. The consideration paid for the issuance
of shares shall consist of money paid, labor done, or property actually
received, and neither promissory notes nor the promise of future services
shall constitute payment nor partial payment for shares of the Corporation.
6.04 REPLACEMENT OF CERTIFICATES
No replacement share certificate shall be issued until the former
certificate for the shares represented thereby shall have been surrendered
and canceled, except that replacements for lost or destroyed certificates
may be issued, upon such terms, conditions, and guarantees as the Board
may see fit to impose, including the filing of sufficient indemnity.
6.05 SIGNING CERTIFICATES-FACSIMILE SIGNATURES
All share certificates shall be signed by the officer(s) designated by
the Board of Directors. The signatures of the foregoing officers may be
facsimiles. If the officer who has signed or whose facsimile signature
has been placed on the certificate has ceased to be such officer before
the certificate issued, the certificate may be issued by the
Corporation with the same effect as if he or she were such officer on the
date of its issuance.
6.06 TRANSFER AGENTS AND REGISTRARS
The Board of Directors may appoint one or more transfer agents or
transfer clerks, and one or more registrars, at such times and places
as the requirements of the Corporation may necessitate and the Board of
Directors may designate. Each registrar appointed, if any, shall be an
incorporated bank or trust company, either domestic or foreign.
6.07 CONDITIONS OF TRANSFER
The party in whose name shares of stock stand on the books of the
Corporation shall be deemed the owner thereof as regards the Corporation,
provided that whenever any transfer of shares shall be made for collateral
security, and not absolutely, and prior written notice thereof shall be
given to the Secretary of the Corporation, or to its transfer agent, if
any, such fact shall be stated in the entry of the transfer.
6.08 REASONABLE DOUBTS AS TO RIGHT TO TRANSFER
When a transfer of shares is requested and there is reasonable doubt
as to the right of the person seeking the transfer, the Corporation or
its transfer agent, before recording the transfer of the shares on its
books or issuing any certificate therefor, may require from the person
seeking the transfer reasonable proof of that person's right to
the transfer. If there remains a reasonable doubt of the right to the
transfer, the Corporation may refuse a transfer unless the person gives
adequate security or a bond of indemnity executed by a corporate surety
or by two individual sureties satisfactory to the Corporation as to form,
amount, and responsibility of sureties. The bond shall be conditioned to
protect the Corporation, its officers, transfer agents, and registrars, or
any of them, against any loss, damage, expense, or other liability for the
transfer or the issuance of a new certificate for shares.
ARTICLE SEVEN-CORPORATE RECORDS AND ADMINISTRATION
7.01 MINUTES OF CORPORATE MEETINGS
The Corporation shall keep at the principal office, or such other
place as the Board of Directors may order, a book recording the minutes
of all meetings of its Shareholders and Directors, with the time and place
of each meeting, whether such meeting was regular or special, a copy of
the notice given of such meeting, or of the written waiver thereof, and,
if it is a special meeting, how the meeting was authorized. The record book
shall further show the number of shares present or represented at
Shareholders meetings, and the names of those present and the proceedings
of all meetings.
7.02 SHARE REGISTER
The Corporation shall keep at the principal office, or at the office
of the transfer agent, a share register showing the names of the
Shareholders, their addresses, the number and class of shares issued to
each, the number and date of issuance of each certificate issued for such
shares, and the number and date of cancellation of every certificate
surrendered for cancellation. The above information may be kept on an
information storage device such as a computer, provided that the device is
capable of reproducing the information in clearly legible form. If the
Corporation is taxed under Internal Revenue Code Section 1244 or Subchapter
S, the Officer issuing shares shall maintain the appropriate requirements
regarding issuance.
7.03 CORPORATE SEAL
The Board of Directors may at any time adopt, prescribe the use of,
or discontinue the use of, such corporate seal as it deems desirable, and
the appropriate officers shall cause such seal to be affixed to such
certificates and documents as the Board of Directors may direct.
7.04 BOOKS OF ACCOUNT
The Corporation shall maintain correct and adequate accounts of its
properties and business transactions, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus,
and shares. The corporate bookkeeping procedures shall conform to accepted
accounting practices for the Corporation's business or businesses. Subject
to the foregoing, the chart of financial accounts shall be taken from, and
designed to facilitate preparation of, current corporate tax returns.
Any surplus, including earned surplus, paid-in surplus, and surplus
arising from a reduction of stated capital, shall be classed by source and
shown in a separate account. If the Corporation is taxed under Internal
Revenue Code Section 1244 or Subchapter S, the officers and agents
maintaining the books of account shall maintain the appropriate
requirements.
7.05 INSPECTION OF CORPORATE RECORDS
A Director or Shareholder demanding to examine the Corporation's books
or records may be required to first sign an affidavit that the demanding
party will not directly or indirectly participate in reselling the
information and will keep it confidential other than in use for proper
purposes reasonably related to the Director's or Shareholder's role. A
Director who insists on examining the records while refusing to
sign this affidavit thereby resigns as a Director.
7.06 FISCAL YEAR
The fiscal year of the Corporation shall be as determined by the Board
of Directors and approved by the Internal Revenue Service. The Treasurer
shall forthwith arrange a consultation with the Corporation's tax advisers
to determine whether the Corporation is to have a fiscal year other
than the calendar year. If so, the Treasurer shall file an election with
the Internal Revenue Service as early as possible, and all
correspondence with the IRS, including the application for the
Corporation's Employer Identification Number, shall reflect such
non-calendar year election.
7.07 WAIVER OF NOTICE
Any notice required by law or by these Bylaws may be waived by
execution of a written waiver of notice executed by the person entitled
to the notice. The waiver may be signed before or after the meeting.
ARTICLE VIII-ADOPTION OF INITIAL BYLAWS
The foregoing bylaws were adopted by the Board of
Directors on August 20, 1999.
J. P. Beehner Dorothy A. Mortenson
Attested to, and certified by: Secretary
<TABLE>
Exhibit 4.0
<C> <C>
NUMBER SHARES
_*****_ **********
Texas E-Solutions Inc.
25,000,000 Shares Authorized, Par Value $0.001
Incorporated under the Laws of the State of Nevada
This certifies that _____SPECIMAN_______________________________________________________is the
registered holder of_____************************_______________________________________shares
of the above Corporation, fully paid and non-assessable and transferrable only on the books of
the corporation by the holder hereof in person or by Attorney upon surrender of this certificate
properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be signed by its duly
authorized officers and its Corporate Seal to be hereunder affixed
this*********day of********A.D.****
/s/ J.P.Beehner /s/Dorothy Mortenson
___________________________ _________________________
President Secretary
Texas
E-Solutions
Nevada Seal
</TABLE>
Exhibit 10.1
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement") is made and effective as of
February 14, 2000 by and between David R. Mortenson & Associates, a
Texas general partnership ("DRM"), and Texas E-Solutions Inc., a Nevada
corporation ("Licensee"), with reference to the following facts:
A. On August 21, 1999, DRM and Licensee entered into an
agreement granting Licensee certain
rights for the use of DRM's oxygen-enriched water product
(the "Water Rights"). In consideration therefor, Licensee
issued DRM 2,000,000 shares of Licensee's common stock (the
Shares").
Subsequent to the grant of the Water Rights, the underlying
contract granting DRM the rights to the technology to produce the
oxygen-enriched water came into dispute. In order to enable
Licensee to conduct a business and to preserve the value of
the Shares, DRM desires to grant additional rights to Licensee
which are not in dispute.
2. DRM is the holder of certain rights to an Internet marketing
system for vitamins, minerals, nutritional supplements, and
other health and fitness products (the "Products") pursuant to an
agreement between Vitamineralherb.com Corp. ("Vita"), a
Nevada corporation, appended hereto as Exhibit C, which rights
include the right to grant licenses for use of the system in various
territories.
3. Licensee desires to market the Products to medical
professionals, alternative health professionals,
martial arts studios and instructors, sports and fitness
trainers, other health and fitness practitioners, school and other
fund raising programs and other similar types of customers
("Customer(s)") in the Territory, as hereinafter defined.
Customers will be able to buy the Products on a continuing basis
through Vita's Web Site.
NOW THEREFORE, in consideration of the mutual promises,
warranties and covenants herein
contained, the parties hereby agree as follows:
1. Scope of Agreement. This Agreement shall govern all Products
sold through Vita's Web Site to
Customer(s). Exhibit A contains detailed information
regarding specifications, quality control,
pricing and other terms relating to the Product(s) to be
ordered through Vita's Web Site. The
parties agree that Exhibit A will be amended to include
similar information with respect to any
future orders of the same Product or any future Product
ordered through Vita by DRM, Licensee,
or Customers. Pricing may be amended from time to time on
the Web Site. The price posted on the Web Site at the time
of order shall prevail. IN THE EVENT OF ANY CONFLICT
BETWEEN THE TERMS OF THIS AGREEMENT AND ANY PURCHASE ORDER
SUBMITTED BY CUSTOMER, THE TERMS OF THIS AGREEMENT WILL
CONTROL.
2. Grant of License Territory. Territory shall be all that
territory in the state of Texas lying north of
a line beginning at the junction of Hwy 285 and the Texas-
New Mexico border, thence east along
Hwy 285 to the junction of Interstate 10 and Hwy 285, thence
east along Interstate 10 to the
junction of Interstate 10 and Hwy 190, thence north and east
along Hwy 190 to the Louisiana
border. DRM grants to Licensee the exclusive rights to
market the Products in the Territory
through the Web Site.
3. Manufacture of Products. All Products marketed through
Vita's Web Site shall be manufactured,
packaged, prepared, and shipped in accordance with the
specifications and requirements described
LICENSE AGREEMENT
Page 1 of 10
on Exhibit A hereto as it may be modified from time to time.
Quality control standards relating to
the Product's weight, color, consistency, micro-biological
content, labeling and packaging are also set forth on
Exhibit A. In the event that Exhibit A is incomplete,
Products shall be manufactured and shipped in accordance
with industry standards.
4. Labeling Packaging. Products shall be labeled with Standard
Labels, except for Private Label
Products, as described herein. Standard labels shall contain
all information necessary to conform
to regulatory and industry requirements.
5. Private Label Products. Vitamins, minerals, herbs, and
nutritional supplement products may be
available for sale with labels customized for the Customer
("Private Label Products"). DRM
shall cause supplier to affix to Private Label Products
labels furnished by Customer which are
consistent with supplier's labeling equipment and meet all
federal and/or state labeling
requirements for the Product(s) ordered. Pricing for Private
Label Products shall be as determined
by supplier and posted on the Web Site by Vita, and the
price posted on the Web Site at time of
order shall obtain.
6. Shipping. Shipping shall be by UPS ground unless Customer
requests and pays for overnight
shipping by UPS. Vita will post shipping and handling fees
for overnight shipping on the Web
Site. The price shall be the price posted on the Web Site at
the time of order. All orders from
supplier's stock shall be shipped within seventy-two (72)
hours of receipt of the order. Items not
in stock (back orders) shall be shipped on a timely basis,
but not later than four to six weeks from
time of order.
7. Products and Pricing. The initial pricing for the Product(s)
is set forth on Exhibit A. The price
at time of purchase may be amended from time to time, and
such amendments will be posted on the Web Site. The price
posted at the time of order shall obtain. Terms are payment
by credit card or electronic funds transfer at time of
purchase..
8. Minimum Order Quantities for Vitamin Mineral and/or
Nutritional Supplements. The minimum order quantity is 100
bottles per formulation for standard Products. Customer Formulas,
as defined herein, shall have minimum order quantities of 5,000
units.
9. Web Site Maintenance Fees. Vita shall maintain Vita's Web
Site (the "Web Site"). The Web
Site shall post current prices for all Products. Customers
will be able to obtain unique
identification codes ("Userid(s)") and select passwords on
the Web Site. Vita shall maintain the Web Site in a manner
that ensures secure Internet financial transactions. Licensee
shall pay Vita a maintenance fee of $500 yearly, beginning
on the anniversary date of this Agreement, for
maintenance of the Web Site.
10. Orders. All Products shall be ordered through the Web Site.
In jurisdictions in which sales tax
would be collected on retail sales of the Products, Licensee
shall ensure that each Customer
provides a sales tax ID number for exemption from sales tax.
Licensee shall assist its Customer to
register on the Web Site. Each Customer shall be issued a
Userid and shall select a password
upon registration. Upon ordering, Customer must pay for
Product by credit card, debit card, or by
electronic funds transfer ("e-check") and all funds will be
remitted to Vita. Upon receipt of order,
Vita will e-mail the supplier to purchase the Product(s)
ordered. Supplier will drop-ship the order
directly to the Customer in accordance with Section 7,
"Shipping."
LICENSE AGREEMENT
Page 2 of 10
11. Sharing of Profits; Sales Reports. Licensee and Vita shall
each receive one-half of the profit on
all sales made through the Web Site by Licensee. Vita agrees
to pay supplier for the Product
purchased upon receipt of cleared funds. Vita will retain
its one-half share of the profit and will
remit the balance to Licensee by the tenth day of the month
following sales. Vita further agrees to
provide Licensee with a Monthly Sales Report of all sales
made by Licensee through the Web Site detailing the
purchases from each Customer. Vita will e-mail the Monthly
Sales Report to
Licensee by the tenth day of the month following such sales.
12. Warranties and Indemnification. DRM warrants that all
Products, including Joint Formula
Products but not including Customer Formula Products, shall
be fit for the purpose for which
produced and shall be in full and complete compliance with
all local, state, and federal laws
applicable thereto. DRM warrants that all Custom Products
shall be manufactured in accordance
with Customer's specifications. DRM warrants that all non-
Private Label Products shall be
correctly and accurately described on each label affixed
thereto, and that all labeling affixed
thereto shall be in full and complete compliance with all
local, state, and federal laws applicable
thereto. DRM warrants, covenants and certifies that its
supplier(s)' manufacturing facilities
comply with applicable federal, state, city, county, and
municipal laws, rules, regulations,
ordinances, and codes in all material respects. DRM hereby
agrees to indemnify, hold harmless
and defend Licensee, its Customers, Buyers, affiliates,
directors, officers, agents and
representatives from and against any loss, claim, and
expense (including attorneys fees and costs,
and costs of a recall of Product) incurred or suffered as a
consequence of DRM's breach of its
product warranties as set forth herein.
13. Nature of Relationship.
(a) This Agreement does not constitute nor empower the
Licensee as the agent or legal representative of DRM
for any purpose whatsoever. Licensee is and will
continue to be an independent contractor.
(b) The arrangement created by this Agreement is not, and
is not intended to be, a
franchise or business opportunity under the United
States' Federal Trade Commission Rule: Disclosure
Requirements and Prohibitions Concerning Franchising
and Business Opportunity Ventures and is not a
franchise, business opportunity or seller assisted
marketing plan or similar arrangement under any other
federal, state, local or foreign law, rule or
regulation.
(c) Licensee is not prohibited by this Agreement from
pursuing other business
opportunities or other employment.
14. Rights in Formulas.
(a) Customer Formulas. Any formula provided exclusively by
Licensee's Customer shall be
owned by Customer ("Customer Formula"), provided that
such Customer Formula does
not substantially duplicate an existing Vita formula.
Vita agrees not to sell products to
other customers using any Customer Formula during the
period in which Customer is
ordering products containing the formula and for so
long as Customer continues to
purchase products containing the Customer Formula.
LICENSE AGREEMENT
Page 3 of 10
(b) Joint Formulas. If Vita and Customer jointly create a
formula ("Joint Formula"), such Joint Formula will be
jointly owned by the parties. Vita agrees not to sell
products to other customers using the Joint Formula
during the period in which Customer is ordering
products containing the Joint Formula from Vita without
written permission from Customer. In the event that
Customer fails to order a specific Joint Formula
Product for a period of 3 months, Vita shall be free to
sell products containing the Joint Formula to other
customers.
15. Term of Agreement; Breach of Agreement. This Agreement shall
continue for three (3) years, and
shall be automatically renewed unless one of the parties
provides ninety (90) days written notice
of termination to the other party. Licensee may terminate
this Agreement for any reason at any
time upon ninety (90) days written notice to DRM. In the
event of a material breach of this
Agreement, the non-breaching party may provide written
notice of breach. Upon notice from the
non-breaching party, the breaching party shall have fourteen
(14) days to cure the breach, after
which period, if not cured, the Agreement shall be
automatically terminated. In no event shall
Vita be required to accept or deliver Product under any
purchase order if Vita has not received the
outstanding balance due on any previous purchase order in a
timely manner. Failure to so perform
shall not be deemed a breach of this Agreement by Vita.
16. Trade Secrets. Vita and DRM and Licensee(s) are the owners
of certain products, technology,
information, customer lists, services, processes, financial
information, pending or prospective
transactions/proposals, operating and marketing plans and
procedures, designs, product formulas,
specifications, manufacturing methods, ideas, prototypes,
software, patent, trademark and
copyright applications or registrations and other similar
data relating to each party's business
which data is not publicly known and derives economic value
from not being publicly known
(collectively "Trade Secrets"). Each party agrees that it
will not use or disclose to third parties any Trade Secret
it receives from the other, except as may be contemplated by
this Agreement. Each party agrees that it will take all
reasonable precautions to assure that no Trade Secret is
conveyed to any officer, employee, agent, manufacturer or
other third party who does not have a need to know such
Trade Secret. The obligations created by this Section 16
shall survive the termination of this Agreement or any
business relationship between the parties. Any Trade Secret
contained in any writing will be returned to the other party
promptly upon written request, together with any
reproductions thereof
17. Governing Law; Dispute Resolution. This Agreement shall be
governed by Texas law in
accordance with the Dispute Resolution Agreement attached
hereto as Exhibit B.
18. Miscellaneous Provisions. This Agreement constitutes the
entire Agreement between the parties and supersedes any
prior or contemporaneous agreements, oral or written. This
Agreement may only be amended by a writing signed by both
parties. Any notice required or permitted to be given under
this Agreement shall be in writing and sent by telecopy,
personal delivery or certified mail, return receipt
requested, as follows:
If to Vitamineralherb.Com, Inc.: Mr. J. P. Beehner
3030 FM 518 Apt 221
Pearland TX 77584-7817
LICENSE AGREEMENT
Page 4 of 10
If to David R. Mortenson & Associates: Mr. David R.
Mortenson
P.O. Box 5034
Alvin TX 77512-5034
If to Licensee: Texas E-
Solutions Inc.
P.O. Box 5034
Alvin TX 77512-5034
Notice shall be deemed effective upon receipt if made by
confirmed telecopy, personal delivery or 48 hours after
deposit in the United States mail with the required postage.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first
above written.
TEXAS E-SOLUTIONS INC. DAVID R. MORTENSON & ASSOCIATES
A NEVADA CORPORATION A TEXAS GENERAL PARTNERSHIP
By: By:
J. P. Beehner, President David R. Mortenson,
/S/J. P. Beehner, President /S/David R. Mortenson,
General Partner
LICENSE AGREEMENT
Page 5of 10
EXHIBIT A
PRODUCT SPECIFICATIONS
In the event of any inconsistency between the terms of
Customer's purchase order and this Product Specification Sheet,
this Sheet and the terms of the Manufacturing Agreement shall
control.
Short Product Name: _______________________________
Exact Product Ingredients and Percentages:
Other Product Specifications:
Color: ____________ Tablet Type: ______________ Consistency:
________________
Weight: ________ Bottle Size/Color:_______________ Bottle Count:
Cotton Insert:____ Bottle Seal:____ Shrink Wrap Neck Band:
Silicon Pack:
Micro-biological content: Customer to specify any requirements;
if none specified, product will be
manufactured to industry standards.
Labels: Labels and/or boxes to be provided by Customer [identify
any size] __________
Labels/Boxes to be Received by [date] ______ to ensure timely
delivery
Master Pack/Wrapping/Palleting Requirements (if
any):____________________________
Ship to Address:
Order Quantity: (minimum 5,000 BOTTLES): ________
Price: _______________ FOB IFM's facility in San Diego, CA.
Delivery Dates(s):
___________________________________________________
Terms of Sale: 50% with submission of purchase order; 50% due
upon completion of manufacturing,
unless otherwise specified _________________________________
Purchase Order Number:
Date of Purchase Order:
LICENSE AGREEMENT
Page 6 of 10
EXHIBIT B
DISPUTE RESOLUTION AGREEMENT
THIS DISPUTE RESOLUTION AGREEMENT ("Dispute Resolution
Agreement") is entered into and effective as of February 14, 2000 by and
between David R. Mortenson & Associates, a Texas general partnership, and
Texas E-Solutions Inc., a Nevada corporation.
1. INTENT OF PARTIES. The parties desire to establish a quick,
final and binding out-of-court dispute resolution procedure to be
followed in the unlikely event any dispute arising out of or
related to the Manufacturing Agreement dated February 14,
2000 between the parties ("Agreement"). As used in this Dispute
Resolution Agreement, the term "dispute" is used in its
broadest and most inclusive sense and shall include, without
limitation, any disagreement, controversy, claim, or cause of action
between the parties arising out of, related to, or involving
the Agreement or the transactions evidenced by the Agreement
(collectively "Dispute").
2. NEGOTIATION. It is the intent of the parties that any
Dispute be resolved informally and promptly through good faith
negotiation between the parties. Therefore, in the event of a Dispute
between the parties, the following will apply
A. Correspondence. Either party may initiate negotiation
proceedings by writing a certified or registered
letter, return receipt requested, to the other party
referencing this Dispute
Resolution Agreement, setting forth the particulars of
the Dispute, the term(s) of the
Agreement involved and a suggested resolution of the
problem. The recipient of the letter
must respond within ten (10) days after its receipt of
the letter with an explanation and
response to the proposed solution.
B. Meeting. If correspondence does not resolve the
Dispute, then the authors of the letters or
their representatives shall meet on at least one
occasion and attempt to resolve the matter.
Such meeting shall occur not later than thirty (30)
days from the parties' last correspondence. If the
parties are unable to agree on the location of such a
meeting, the
meeting shall be held at DRM's offices. Should this
meeting not produce a resolution of
the matter, then either party may request mandatory
mediation (as provided below) by
written notice to the other party.
3. MEDIATION
A. Selection of Mediator. There shall be a single
mediator. If the parties cannot agree upon
an acceptable mediator within ten (10) days of
termination of the negotiation, each party shall select
one mediator from a list of not less than five (5)
mediators provided by the other party. These two
mediators shall select a third mediator who shall serve
as the sole mediator.
LICENSE AGREEMENT
Page 7 of 10
B. Subject to the availability of the mediator, the
mediation shall occur not more than thirty
(30) days after the request for mediation. The
mediation shall be held in Houston, Texas.
The cost of mediation shall be borne equally by the
parties. The mediation process shall
continue until the Dispute (or any part thereof) is
resolved or until such time as the
mediator makes a finding that there is no possibility
of resolution short of referring the
parties to final and binding arbitration.
4. FINAL AND BINDING ARBITRATION. Should any Dispute (or part
thereof) remain between
the parties after completion of the negotiation and
mediation process set forth above, such Dispute shall be
submitted to final and binding arbitration in Houston,
Texas. The arbitration shall be governed by the laws of the
State of Texas and the following provisions, which shall
supersede the Texas rules of civil procedure in the event of
any inconsistency:
A. Selection of Arbitrator(s). There shall be a single
arbitrator, except in the case where the
amount in dispute exceeds $100,000, in which case there
shall be three arbitrators. If the
parties cannot agree upon acceptable arbitrator(s)
within ten (10) days of the termination of the
mediation, each party shall select one arbitrator from
a list of not less than five (5)
arbitrators provided by the other party. These two
arbitrators shall select a third arbitrator
who shall serve as the sole arbitrator or the third
arbitrator, as the case may be. The
determination of a majority of the arbitrators or the
sole arbitrator, as the case may be,
shall be conclusive upon the parties and shall be non-
appealable.
B. Discovery. No discovery shall be permitted, absent a
showing of good cause. Any
discovery request should be reviewed with the knowledge
that this dispute resolution
process was mutually agreed upon and bargained for by
the parties with the intent to
provide a cost-effective and timely method of resolving
disputes. Any discovery granted
by the arbitrator should be limited to that necessary
to protect the minimum due process
rights of the parties.
C. Equitable Remedies. Any party shall have the right to
seek a temporary restraining order,
preliminary or permanent injunction or writ of
attachment, without waiving the
negotiation, mediation and arbitration provision
hereof. Any other form of equitable or
provisional relief and all substantive matters relating
to the Dispute shall be determined
solely by the arbitrator(s).
D. Attorney's Fees; Arbitration Costs. Each party may be
represented by an attorney or other
representative selected by the party. The costs of the
arbitration shall be borne equally by
the parties. Each party shall bear its own
attorneys'/representatives' fees and costs;
provided that if the arbitrator(s) find either party
has acted in bad faith, the arbitrator(s)
shall have discretion to award attorneys' fees to the
other party.
E. Scope of Arbitration; Limitation on Powers of
Arbitrator(s); Applicable Law. No party
may raise new claims against the other party in the
arbitration not raised in the mediation. The
arbitrator(s) shall have the power to resolve all
Disputes between the parties. The arbitrator(s) shall
not have the power to award treble, punitive or
exemplary damages and the parties hereby waive their
right to receive treble, punitive or exemplary damages,
to the extent permitted by law. The arbitrator(s) shall
apply the law of the State of Texas, or federal law, in
those instances in which federal law applies.
LICENSE AGREEMENT
Page 8 of 10
F. Designation of Witnesses/Exhibits; Duration of
Arbitration Process; Written Decision. At
least thirty (30) days before the arbitration is
scheduled to commence, the parties shall
exchange lists of witnesses and copies of all exhibits
intended to be used in arbitration. The arbitration
shall be completed within 90 days of the selection of
the first arbitrator. The arbitrator(s) shall render a
written decision, which contains findings of fact and
conclusions of law, within 30 days of the conclusion of
the arbitration and shall specify a
time within which the award shall be performed.
Judgment upon the award may be entered in any court of
competent jurisdiction.
5. MISCELLANEOUS
A. Enforcement of Negotiation/Mediation Provisions. If a
party demanding such compliance
with this Agreement obtains a court order directing the
other party to comply with this
Dispute Resolution Agreement, the party demanding
compliance shall be entitled to all of
its reasonable Attorneys' fees and costs in obtaining
such order, regardless of which party
ultimately prevails in the matter.
B. Severability. Should any portion of this Dispute
Resolution Agreement be found to be
invalid or unenforceable, such portion will be severed
from this Dispute Resolution
Agreement, and the remaining portions shall continue to
be enforceable unless to do so
would materially alter the effectiveness of this
Dispute Resolution Agreement in achieving the stated
intent of the parties.
C. Confidentiality. The parties agree that they will not
disclose to any third party that (1) they are engaged
in the dispute resolution process described herein, (2)
the fact of, nature or amount of any compromise
resulting herefrom, or (3) the fact of, nature or
amount of any arbitration award. This confidentiality
obligation shall not extend to the party's employees,
spouses, accountant, bankers, attorneys or insurers or
in the event that disclosure is otherwise required by
law.
D. Time to Initiate Claims. An aggrieved party must mail
and the other party must receive the correspondence
which initiates negotiation proceedings in connection
with a Dispute as specified in Paragraph 2 (A) (1)
within one (1) year of the date the aggrieved party
first
has, or with the exercise of reasonable diligence
should have had, knowledge of the
event(s) giving rise to the Dispute (the "One Year
Statute of Limitations"). No Dispute
may be raised under this Dispute Resolution Agreement
after the expiration of the One
Year Statute of Limitations.
E. Entire Agreement. These dispute resolution provisions
express the entire agreement of the parties and there
are no other agreements, oral or written, concerning
dispute resolution, except as provided herein. Any
ambiguity in the provisions hereof shall not be
construed against the drafter. This Dispute Resolution
Agreement may only be modified in a writing signed by
both parties.
F Successors. This Dispute Resolution Agreement is
binding upon and inures to the benefit
of the parties, their agents, heirs, assigns,
successors-in-interest, and any person, firm or
organization acting for or through them.
LICENSE AGREEMENT
Page 9 of 10
G. Venue and Jurisdiction. Venue and exclusive
jurisdiction for any action arising out of or
related to this Dispute Resolution Agreement
(including, but not limited to, equitable
actions contemplated by Section 4 (C) and actions
brought to enforce or interpret this
Dispute Resolution Agreement) shall be in the state
courts for the County of Harris,
Texas, or the federal court for the Southern District
of Texas.
H. Notice. Any notice or communication required to be
given hereunder shall be in writing
and shall be mailed via the United States Postal
Service by Certified Mail or Registered
Mail, Return Receipt Requested, or by Federal Express
or other overnight courier which
can document delivery, to the address of the party to
be served as shown below (or such
other address as the party shall from time to time
notify. Such notice shall be deemed to
have been served at the time when the same is received
by the party being served.
David R. Mortenson & Assoc.: David R. Mortenson,
Gen. Partner
P.O. Box 5034
Alvin TX 77512-5034
Fax: 281-388-1047
Phone: 281-331-5580
Texas E-Solutions Inc.: J. P. Beehner
3030 FM 518 Apt 221
Pearland, TX 77584-7817
Fax: 281-331-9442
Phone: 713-436-2787
I. Acknowledgment of Legal Effect of this Dispute
Resolution Agreement. By signing this
Dispute Resolution Agreement, the parties acknowledge
that they are giving up any rights they may possess to
have Disputes litigated in a court and are hereby
waiving the right to a trial by jury. The parties
further acknowledge that they are agreeing to a one
year statute of limitations regarding all Disputes and
that they are giving up their judicial rights to
discovery and to appeal, unless such rights are
specifically set forth above. The parties acknowledge
that if they refuse to submit to the provisions of this
Dispute Resolution Agreement they may be compelled to
do so. The parties acknowledge that they have had the
opportunity to consult counsel regarding the meaning
and legal effect of this Dispute Resolution Agreement
and enter into it knowingly and voluntarily.
IN WITNESS WHEREOF, the parties have entered into this
Dispute Resolution Agreement as of
the date first above written.
TEXAS E-SOLUTIONS INC. DAVID R. MORTENSON &
ASSOCIATES
A NEVADA CORPORATION A TEXAS GENERAL PARTNERSHIP
By:
By:
J. P. Beehner, President David R. Mortenson,
General Partner
LICENSE AGREEMENT
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