FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EQUITYALERT.COM, INC.
(Exact name of registrant as specified in its charter)
NEVADA 58-2377963
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
214 - 1628 West 1st Avenue, Vancouver, BC, V6J 1G1
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (604) 659-5009
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class to be so registered
NONE
Name of each exchange on which each class is to be registered
NONE
Securities to be registered pursuant to Section 12(g) of the Act:
100,000,000 Shares of Common Stock
<PAGE>
TABLE OF CONTENTS
Page
COVER PAGE 1
TABLE OF CONTENTS 2
PART I 3
DESCRIPTION OF BUSINESS 3
DESCRIPTION OF PROPERTY 6
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES 7
REMUNERATION OF DIRECTORS AND OFFICERS 8
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITYHOLDERS 10
INTEREST OF MANAGEMENT AND OTHERS IN
CERTAIN TRANSACTIONS 10
SECURITIES BEING OFFERED 10
PART II
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS 11
LEGAL PROCEEDINGS 11
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 11
RECENT SALES OF UNREGISTERED SECURITIES 11
INDEMNIFICATION OF DIRECTORS AND OFFICERS 11
PART F/S 12
FINANCIAL STATEMENTS
PART III
<PAGE>
PART I
The issuer has elected to follow Form 10-SB, Disclosure Alternative 2.
ITEM 6. DESCRIPTION OF BUSINESS
EquityAlert.com, Inc. (The Company) is a developmental stage company. The
Company was incorporated under the laws of the State of Florida, on January 13,
1997 under the name of San Marino Minerals, Inc., with an authorized capital of
100,000,000 shares of common stock with a par value of $.001 per share. On April
15, 1998, the Company reverse split its common outstanding shares on a 100 old
to 1 new basis, with the authorized capital remaining at 100,000,000 shares. On
May 14, 1999, the Company forward split its outstanding shares on a 1 old to 2
new basis. The description that follows includes the originally issued shares
and current equivalent in brackets.
On January 13, 1997, the Company issued 3,000,000 restricted (60,000 current
equivalent) shares of common stock, $.001 par value for services rendered or
$3000. During January and February, 1997, the Company completed an Offering
Memorandum for 300,000 (6,000 current equivalent) shares of common stock for
cash at $0.25 per share or $75,000. The shares were issued during February 1997.
On July 28, 1997, the Company converted $84,691 of debt into equity by issuing
1,693,800 (33,876 current equivalent) common shares at $0.05 per share. On July
28, 1997, the Company issued for cash 291,700 (5,834 current equivalent) common
shares at $0.05 per share, or $14,586. On July 28, 1997, the Company issued
4,114,450 (82,289 current equivalent) common shares at $0.05 in exchange for
services valued at $205,723. On August 12, 1997, the Company issued for cash
100,000 (2,000 current equivalent) common shares at $0.25 per share, or $25,000.
On August 12, 1997, the Company issued 300,000 (6,000 current equivalent) common
shares at $0.25 in exchange for services valued at $75,000. On December 31,
1997, the Company converted $63,948.30 into 109,205 restricted (2,187 current
equivalent) common shares of stock at $0.59 per share. On August 15, 1998,
100,000 (200,000 current equivalent) common shares were issued for cash at $0.05
per share. On August 17, 1998, the Company cancelled 800,000 (8,000 current
equivalent) common shares previously issued on July 28, 1997 for $16,000 in
services. On December 11, 1998, the Company issued 1,000,000 (2,000,000 current
equivalent) common shares at $0.05 in exchange for services valued at $50,000.
On December 11, 1998, the Company issued for cash 2,000,000 (4,000,000 current
equivalent) common shares at $0.05 per share, or $100,000. On December 31, 1998,
10,000,000 restricted (20,000,000 current equivalent) common shares were issued
at $.001 par value for services rendered or $10,000. On March 31, 1999, the
Company issued 7,500,000 (15,000,000 current equivalent) common shares for cash
at $0.11 per share, or $825,000.
At an annual general meeting of shareholders held on December 1, 1997,
shareholders of the Company approved the Company's 1997 Stock Option Plan and
reserved 500,000 (10,000 current equivalent) shares for issuance there under and
to amend to the Company's Articles of Incorporation to included 1,000,000
authorized preferred shares at a par value of $.10, with none issued. On May 14,
1998, the Company's Articles of Incorporation were amended to change the name of
the Company from San Marino Minerals, Inc. to Molina Corp., with no change in
authorized capital or par value. At an annual general meeting of shareholders
held on July 31, 1998, shareholders of the Company approved the Company's 1998
Stock Option Plan and reserved 2,000,000 (4,000,000 current equivalent) shares
for issuance there under, to change the par value of the Company's common shares
<PAGE>
from $.001 to $.00001, and to change the par value of the Company's preferred
shares from $.10 to $.001, with the authorized capital of the common and
preferred shares remaining at 100,000,000 and 1,000,000 respectively. On August
11, 1998, Molina Corp. was dissolved. On February 17, 1999, Molina Corp. was
reincorporated in Florida, and on March 10, 1999, Molina Corp. merged with
Centaur Technologies, Inc., a Nevada corporation, with Centaur Technologies,
Inc. becoming the surviving corporation. At an annual general meeting of
shareholders held on May 14, 1999, shareholders of the Company approved the
Company's 1999 Stock Option Plan and reserved 5,000,000 (10,000,000 current
equivalent) common shares for issuance there under, authorized a name change to
TraderAlert.com, Inc. and to amend the Company's Articles of Incorporation to
reflect such change. On June 3, 1999, due to a trademark conflict, the Company
changed its name to EquityAlert.com, Inc. and amended its Articles of
Incorporation accordingly.
On April 26, 1999, the Company entered into a License Agreement with Ethos
Corporation and agreed to pay $10,000 upon signing and three quarterly payments
of $10,000. The agreement is for a one year term, during which time Ethos is to
be host and serve certain online financial content, including stock quotes,
stock charts, SEC filings and certain other financial information. On August 31,
1999, the Company entered into a one year Distributor Agreement with Comtex
Scientific Corporation. In addition to a $400 per month communication charge,
the Company agreed to pay Comtex $625 during the month of October 1999, $1250 in
November 1999, $1875 in December 1999 and $2100 in January and thereafter until
the expiration of the agreement. Comtex is to provide an online fee for public
company press releases and certain major daily news headlines.
On June 7, 1999, the Company launched a web site (www.equityalert.com) developed
for pro-active online investors providing a broad range of financial
information. The Company is a development stage company, as defined in Financial
Accounting Standards Board No. 7. The Company is devoting substantially all of
its present efforts in securing and establishing its business, and although its
planned operations have commenced there have been no significant revenues
derived there from.
With the proliferation of financial information on the Internet, more and more
individuals are taking greater control of their investments and trading
securities through an online broker versus the traditional securities broker.
According to a recent survey conducted by Gomez Advisors, an estimated 3.5
million investors intend to open online stock trading accounts in the next 6
months, increasing the current total from 5.1 million to 8.6 million individual
online investors. By the year 2000, the total number of online investors
expected to further increase to over 24 million, with a combined asset base of
$1.5 trillion.
Since launching on June 7, 1999, EquityAlert.com's subscriber base has grown to
over 120,000 within 90 days. The Company's website offers a broad suite of
traditional trading tools, including IPO information, stock quotes, public
company news, earnings surprises and announcements, stock buy backs, stock
splits, SEC filings, news headlines, new analyst coverage, upgrades and
downgrades, a powerful, fully customizable interactive charting system, and
comprehensive trading screens involving up to 26 different data fields, such as
earnings growth, weekly price changes, short interest, insider and institutional
ownership, market cap, and others. Additionally EquityAlert.com provides
commentary on the biggest movers of the day and displays a compilation of
investor sentiment or expectations of on various public companies.
<PAGE>
The online investor represents one of the most desirable of any demographic on
the web, being better educated, having a higher income and net worth than most
other online users. Consequently, the Company is placing emphasis on acquiring
market share by offering individuals free subscriptions to its website. Once the
Company reaches a subscriber base of over 500,000 unique users and is able to
garner significant traffic levels on its web site, the Company plans generate
revenues from sponsorships, advertising and subscriptions from value added
services, such as pay per view analyst reports and co-branded content feeds.
The competition for online investors is intense, with many better capitalized
and well managed companies offering similar information services as
EquityAlert.com. This competition comes from direct competitors, such as
traditional media sources and websites like Jagnotescom, Multex.com, Street.com,
Ragingbull.com, Siliconinvestor.com and hundreds of others, as well as from many
indirect competitors, such as online brokerage firms and online portals such as
Yahoo.com. The competition for the online investor is expected to increase in
the future as greater a number of vendors come online.
While competition is expected to intensify in the future, the high growth of the
Internet itself is expected to expand the size of the marketplace in order to
allow for many competitors. The Computer Industry Almanac reported that there
were more than 147 million world-wide users of the Internet at the end of 1998,
compared to just 61 million at the end of 1996, with approximately 50% of the
total being in the US. With the number of Internet users around the world
constantly growing, the Computer Industry Almanac projects that worldwide users
will reach 320 million by the end of year 2000, and surpass 720 million by 2005.
Management's Discussion and Analysis and Plan of Operations
The Company has not had any revenues from operations in each of the last two
fiscal years, nor during the most recent six month period ended June 30, 1999.
Further, the Company expects minimal, if any, revenues during the six month
period between July 1, 1999 and December 31, 1999. The Company's operations are
currently centered around the further development of its web site and increasing
its subscriber base. The development work currently taking place is centered
around making the site more user-friendly, making the site more stable as
greater numbers of individuals use the site, developing back up systems in case
of down times, developing a wider variety of compelling financial content and
developing advertising and sponsorship content.
At present, the Company is expending approximately $30,000 per month in the
further development of its site and content. The Company currently employs 6
individuals full time at its head office, as well as one part-time bookkeeper,
and expects to add another 2 individuals in the next 60 to 90 days. These new
employees are expected to add an additional $6,000 per month to the Company's
monthly cost of operations. As of June 30, 1999, the Company had $901,421 in
cash, $32,059 in total current liabilities. The Company's cash reserve is
sufficient to cover the operating expenses of the Company for the next 12
months. The Company does not expect to purchase any additional computer hardware
or make any significant equipment purchases in the next 12 months.
Results of Operations
The Company has not had any revenues from operations in each of the last two
fiscal years, nor for the six month period ended June 30, 1999.
<PAGE>
For the period from inception, January 13, 1997, to December 31, 1997, the
Company's general and administrative operating expenses totaled $510,817 and
interest income totaled $422, resulting in a total loss $510,395, or $3.64 per
share. During this same period, the Company raised a total of $75,000 through
the sale of 300,000 common shares at $0.25 per share, and financed its
operations from cash on hand. As at December 31, 1997, the Company had a cash
balance was $47,069 and $19,115 in total current liabilities.
For the twelve month period ending December 31, 1998, the Company's general and
administrative operating expenses totaled $129,461, a decrease of $381,356, or
295%, from the fiscal 1997 total of $510,817. The Company experienced a loss of
$129,460 or $0.05 per share for the twelve month period ended December 31, 1998,
versus a $3.64 per share loss or $510,817 for the same twelve month period in
1998. The decrease in expenses and loss per share is primarily due to decreased
corporate activity. During fiscal 1998, interest income totaled $1, or a
decrease of 422% from the $422 interest earned in fiscal 1997. As at December
31, 1998, the Company had a $31,458 in current payables, an increase of $12,343
or 64% from the $19,115 amount the prior year. This increase was primarily a
result of a non-interest bearing, unsecured and due on demand $10,000 advance
made by a director. As at December 31, 1998 the Company had a cash balance of
$3,551, a decrease of $43,518 or 1226% from the Company's cash balance as at
December 31, 1997. As at December 31, 1998, the Company also had a subscription
receivable for $100,000 from an offering dated December 11, 1998. These funds
were received on January 8, 1999.
For the six month period ending June 30, 1999, the Company's general and
administrative operating expenses totaled $41,575, a decrease of $25,362, or
38%, from the six month period ended June 30, 1998 total of $66,937. The Company
experienced a loss of $27,731 or $0.00 per share for the six month period ended
June 30, 1999, versus a $0.34 per share loss or $66,936 for the same six month
period in 1998. The decrease in expenses and loss per share is primarily due to
decreased corporate activity. For the six month period ending June 30, 1999,
interest income totaled $13,844, or an increase of 13844% from the $1 interest
earned in the same period in 1998. Interest earned in the future will be
dependant upon Company funding cycles and prevailing interest rates. For the
three month period ending June 30, 1999, the Company's general and
administrative operating expenses totaled $41,508, a decrease of $13,738, or
25%, from the same three month period ended June 30, 1998 total of $55,246. The
Company experienced a loss of $30,404 or $0.00 per share for the three month
period ended June 30, 1999, versus a $0.27 per share loss or $55,245 for the
same three month period in 1998. The decrease in expenses and loss per share is
primarily due to decreased corporate activity. For the three month period ending
June 30, 1999, interest income totaled $11,105, or an increase of 11,105% from
the $1 interest earned in the same period in 1998. During the six month period
ending June 30, 1999 and the three month period ending June 30, 1999, the
Company primarily funded its operations the sale of common share, which raised
$925,000.
ITEM 7. DESCRIPTION OF PROPERTY
The Company maintains its head office at Suite 214, 1628 West
1st Avenue, Vancouver, BC, V6J 1G1. These premises are owned by Northwest
Management & Consulting Services, Inc., a company which is 50% owned by the
Company's President and Chief Executive Officer, Mr. Jasvir S. Rayat, and 50%
owned by a former director, Mr. Herdev S. Rayat. The premise is approximately
500 sq. ft. and is leased for $1000 per month until June 30, 2000. There is no
option to renew. The Company also maintains a 200 square foot office located at
7890 East Desert Cove Avenue, Scottsdale, AZ 85260. These premises are provided
to the Company free of charge by the Company's President and Chief Executive
Officer, Mr. Jasvir S. Rayat, and by a former director, Mr Herdev S. Rayat.
These premises serve primarily as a satellite office and mailing address.
<PAGE>
ITEM 8. DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The following information sets forth the names of the officers
and directors of the Company, their present positions with the Company and
biographical information.
HARMEL S. RAYAT (Age 38) Chairman, Director. Mr. Rayat has been in the venture
capital industry since 1981 and since January 1993 has been the president of
Hartford Capital Corporation, a company which specializes in providing early
stage funding and investment banking services to emerging growth corporations.
From January 1989 through December 1992 Mr. Rayat was the President and CEO of
K.S. Rayat & Company, an investment banking and venture capital company, where
he was responsible for research, due diligence and investment strategy in early
stage, start-up venture capital investments. Mr. Rayat served as a director and
the Company's President from April 19th, 1999 to August 2, 1999, and the
Company's Chairman since August 2nd, 1999.
JASVIR S. RAYAT (Age 39) President and Chief Executive Officer, Director.
Working directly in the securities business since 1986, Mr. Rayat has amassed an
extensive knowledge base of the securities business, and in particular, with
active traders. Mr. Rayat worked as a securities broker from 1986 to 1987 with
Canarim Investment Corporation, from 1988 to 1989 with Pacific International
Securities and most recently with Yorkton Securities Inc. from 1990 to 1997. He
has been a director of Northwest Management & Consulting Services, Inc., a
consulting company, since 1998 and joined EquityAlert.com, Inc. on August 2,
1999 as a Director and the Company 's President and Chief Executive Officer.
GURMUKH S. KUNDAN (Age 25) Secretary /Treasurer, Director. Mr. Kundan has held
positions with several communications organizations. From 1997 to 1998, Mr.
Kundan was Vice President of Marketing for a start up Web site design company
where he was responsible for developing and initiating marketing strategies that
grew the company's market share. From May 1997 to September 1997, Mr. Kundan was
Information Officer for one of the world's top sub-atomic particle research
institutes where he was responsible for public relations. From January 1997 to
March 1997, Mr. Kundan was a co-owner of a public relations firm, which
specialized in contracts with the federal government, where he was responsible
for the daily operations of the firm and for public relations work. From
September 1996 to December 1997, Mr. Kundan was a journalist for the Department
of Indian Affairs and Northern Development, where he wrote newspaper articles
about First Nations economic development. Mr. Kundan holds a Bachelor of Arts
Degree from Simon Fraser University, with a major in Communication and an
extended minor in Archaeology. Mr. Kundan has been a Director, Secretary and
Treasurer of the Company since July 28th, 1999. From Fall of 1992 to June 1999,
Mr. Kundan was a student at Simon Fraser University.
KATARYNA T. PUHACZ. (Age 25) Technical Director. Ms. Puhacz has held senior
positions with several high tech firms that provide significant data-driven
on-line information. She has directed large-scale technical undertakings
including several proprietary applications which she efficiently conceived from
a vision to implementation and beyond. In early 1999, she developed a custom,
databasing and reporting consolidation application tailored to the business
logic of a leading quality assurance and performance analysis benchmarking firm,
Saratoga Institute. In March of 1999, Ms. Puhacz developed both public & private
administrative interfaces and advanced site search applications using active
server technology for Jazzers Multimedia Productions Ltd., creating the
Internet's first vendor-client and peer to peer online music community for
guitarists. From 1997 to 1999, she has specialized in creating compelling
business solutions that have allowed traditional industries to develop a virtual
on-line presence, streamline inventory applications and simplify online
transactions. From June, 1997 to 1999 Ms. Puhacz developed a large,
database-driven, information based web site for the mining industry at Robertson
Info-Data, Inc. During her tenure, Ms. Puhacz became exclusively responsible for
managing all technical matters, including advanced technologies, implementing
operating platforms and integrating custom applications for the mining data
industry. From 1992 to 1997, Ms. Puhacz studied the sciences at the University
of British Columbia and has been fascinated with computers since childhood.
<PAGE>
ITEM 9. REMUNERATION OF DIRECTORS AND OFFICERS
The following table shows, for the three-year period ended December 31,
1998, the cash compensation paid by the Company, as well as other compensation
paid or accrued for such year, to the Company's Chief Executive Office and the
Company's other most highly compensated executive officers. Except as set forth
on the following table, no executive office of the Company had a total annual
salary and bonus for 1998 that exceeded $100,000.
<TABLE>
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Summary Compensation Table
Annual Compensation Long Term Compensation
Other Restricted
Annual Stock Options/ LTIP All Other ($)
Name Title Year Salary Bonus Compensation Awarded SARs (#) payouts Compensation
Harmel S. Rayat 1998 $ -0- - 0 - -0 - - 0 - - 0 - - 0 - - 0 -
Chairman 1997 $ -0- - 0 - -0 - - 0 - - 0 - - 0 - - 0 -
Director 1996 $ -0- - 0 - -0 - - 0 - - 0 - - 0 - - 0 -
Jasvir S. Rayat 1998 $ -0- - 0 - -0 - - 0 - - 0 - - 0 - - 0 -
President 1997 $ -0- - 0 - -0 - - 0 - - 0 - - 0 - - 0 -
& CEO
Director 1996 $ -0- - 0 - -0 - - 0 - - 0 - - 0 - - 0 -
Gurmukh Kundan 1998 $ -0- - 0 - -0 - - 0 - - 0 - - 0 - - 0 -
Director 1997 $ -0- - 0 - -0 - - 0 - - 0 - - 0 - - 0 -
& Secretary
Treasurer 1996 $ -0- - 0 - -0 - - 0 - - 0 - - 0 - - 0 -
</TABLE>
In fiscal 1998, 1997 and 1996, the aggregate amount of compensation paid to
all executive officers and directors as a group for services in all capacities
was nil On June 14th , 1999, the Company granted stock options to one present
director and two former directors totally 4,000,000 shares (2,000,000 pre-split)
at an exercise price of $2.00 per share until June 14th, 2008. There are no
vesting periods. A summary of these grants is listed below:
<TABLE>
<CAPTION>
<S> <C> <C>
Name Amount of Options Exercise Price Expiry Date
Mr. Harmel S. Rayat 2,000,000 (1,000,000 pre-split) $2.00 June 14th, 2008
Mr. Herdev S. Rayat (former director) 1,000,000 (500,000 pre-split) $2.00 June 14th, 2008
Mr. Harv Dhaliwal (former director) 1,000,000 (500,000 pre-split) $2.00 June 14th, 2008
</TABLE>
<PAGE>
Shown below is further information regarding employee stock options awarded
during 1998 to the named executive officers and directors.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
<S> <C> <C> <C> <C>
Number of Securities
Percent of Total Options/
Underlying Options/ SARs Granted To Employees
Name SARs Granted (#) In Fiscal Year Exercise or Base Price Expiration
Mr. Harmel S. Rayat 0 -0- -0-
Director, Chairman
Mr. Jasvir S. Rayat 0 -0- -0-
Director, President & CEO
Mr. Gurmuhk Kundan 0 -0- -0-
Director, Secretary Treasurer
</TABLE>
The following table shows certain information about unexercised options at
year-end 1998 with respect to named executive officers and directors:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
securities Value of
underlying unexercised
unexercised in-the-money
options/SARS options/SARs
Number of Value at 12/31/98 at FY-end
Shares ($)
Acquired on Realized exercisable/ exercisable/
Name Exercise (#) ($) unexercisable unexercisable
Harmel S. Rayat 0 0 0 0
Jasvir S. Rayat 0 0 0 0
Gurmuhk Kundan 0 0 0 0
</TABLE>
There were no options granted nor exercised by any of the officers and directors
listed above during fiscal 1998.
<PAGE>
ITEM 10. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY
HOLDERS
The following table sets forth, as of August 31, 1999, the beneficial
ownership of the Company's Common Stock by each person known by the Company to
beneficially own more than 5% of the Company's Common Stock outstanding as of
such date and by the officers and directors of the Company as a group. Except as
otherwise indicated, all shares are owned directly.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Amount and
Title of Name and Address Nature of Percent of
Class of Beneficial Owner Beneficial Owner Class
Common Harmel S. Rayat 22,004,000(1) 53.2%
216-1628 West 1st Ave
Vancouver, B.C., V6J 1G1
Common Jasvir S. Rayat 2,750 (2) .007%
214-1628 West 1st Ave
Vancouver, B.C., V6J 1G1
</TABLE>
(1) Includes 20,000,000 common shares held directly, 4,000 shares held in the
name of Hartford Capital Corporation, a company controlled by Mr. Harmel S.
Rayat and 2,000,000 (1,000,000 pre-split) stock options that were granted on
June 14th, 1999. These options have no vesting period and are exercisable up to
June 14th, 2008 at a price of $2.00 per share. (2) Common shares held directly.
ITEM 11. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
The Company rents office space located at Suite 214, 1628 West 1st Avenue,
Vancouver, BC, V6J 1G1, from Northwest Management & Consulting Services, Inc., a
company which is 50% owned by the Company's President and Chief Executive
Officer, Mr. Jasvir S. Rayat, and 50% owned by a former director, Mr. Herdev S.
Rayat. The Company also has the use of a 200 square foot office located at 7890
East Desert Cove Avenue, Scottsdale, AZ, 85260. These premises are provided to
the Company free of charge by the Company's President and Chief Executive
Officer, Mr. Jasvir S. Rayat, and by a former director, Mr. Herdev S. Rayat.
In 1998, Mr. Harmel S. Rayat made a non-interest bearing, unsecured and due
on demand advance of $10,000. This resulted in the Company's current payables to
incur an increase of 64%.
ITEM 12. SECURITIES BEING OFFERED
Common Stock
The Company has 100,000,000 common shares authorized with $0.00001 par
value. Holders of the Common Stock are entitled to one vote for each share held
by them of record on the books of the Company in all matters to be voted on by
the stockholders. Holders of Common Stock are entitled to receive such dividends
as may be declared from time to time by the Board of Directors out of funds
legally available, and in the event of liquidation, dissolution or winding up of
the Company, to share ratably in all assets remaining after payment of
liabilities. Declaration of dividends on Common Stock is subject to the
discretion of the Board of Directors and will depend upon a number of factors,
including the future earnings, capital requirements and financial condition of
the Company. The Company has not declared dividends on its Common Stock in the
past and the management currently anticipates that retained earnings, if any, in
the future will be applied to the expansion and development of the Company
rather than the payment of dividends.
The holders of Common Stock have no preemptive or conversion rights and are
not subject to further calls or assessments by the Company. There are no
redemption or sinking fund provisions applicable to the Common Stock. The Common
Stock currently outstanding is, and the Common Stock offered by the Company
hereby will, when issued, be validly issued, fully paid and nonassessable.
Stock Options
The Company has 4,000,000 (2,000,000 pre-split) shares reserved under its
1998 Stock Option Plan for issuance at $2.00 per share until June 14th, 2008.
The optionees and numbers of shares optioned are as follows:
Mr. Harmel S. Rayat, 2,000,000 (1,000,000 pre-split)
Mr. Herdev S. Rayat (former director) 1,000,000 (500,000 pre-split)
Mr. Harv Dhaliwal (former director) 1,000,000 (500,000 pre-split)
The Company has also 10,000 (500,000 pre-roll back and pre-split) shares
reserved under its 1997 Stock Option Plan and 10,000,000 (5,000,000 pre-split)
under its 1999 Stock Option Plan. As at September 10th, 1999, no options in
either plan had been granted to any directors, officers or employees.
<PAGE>
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER STOCKHOLDER MATTERS
The shares of the Company's stock are traded on the OTC Bulletin
Board under the symbol EINC and the following have been the High and Low prices
for the times indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
High Low
April - June 1999 $ 10.00 $ 0.56
January - March 1999 $ 1.56 $ 0.15
October - December 1998 $ 0.55 $ 0.09
July - September 1998 $ 0.10 $ 0.01
April - June 1998 $ 0.41 $ 0.01
January - March 1998 $ 0.75 $ 0.19
October - December 1997 $ 0.88 $ 0.31
July - September 1997 $ 0.88 $ 0.13
April - June 1997 $ 0.19 $ 0.06
</TABLE>
Other than stock options currently outstanding, there are no other
convertible securities.
As of August 10, 1999 there were 54 registered shareholders of the Company.
There are no dividend restrictions on the Company. Market makers who have posted
bids or offers during the period April 1997 to June 1999 include J. Alexander
Securities, Inc., DL Cromwell Investments Inc., Fin-Atlantic Securities, Inc.,
Wm. V. Frankel & Co., Incorporated, GVR Company, Hill Thompson Magid & Co. Inc.,
Herzog, Heine, Geduld, Inc., Lloyd Wade Securities, Inc., MH Meyerson & Co.,
Inc., North American Institutional Brokers, Knight Securities, Inc., The Agean
Group, Inc., Paragon Capital Corporation, Philip Louis Trading Inc., Sharpe
Capital Inc., Public Securities, Sherwood Securities Corp., USCC Trading and
Wein Securities Corp.
ITEM 2. LEGAL PROCEEDINGS
There are no legal proceedings pending or threatened against the
Corporation.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company's accountants since inception have been Clancy and Co., PLLC.
There are no disagreements with Clancy and Co., PLLC.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
On January 13, 1997, the Company issued 3,000,000 restricted (60,000
current equivalent) shares of common stock, $.001 par value for services
rendered or $3000. During January and February, 1997, the Company completed an
Offering Memorandum for 300,000 (6,000 current equivalent) shares of common
stock for cash at $0.25 per share or $75,000. The shares were issued during
February 1997. On July 28, 1997, the Company converted $84,691 of debt into
equity by issuing 1,693,800 (33,876 current equivalent) common shares at $0.05
per share. On July 28, 1997, the Company issued for cash 291,700 (5,834 current
equivalent) common shares at $0.05 per share, or $14,586. On July 28, 1997, the
Company issued 4,114,450 (82,289 current equivalent) common shares at $0.05 in
exchange for services valued at $205,723. On August 12, 1997, the Company issued
for cash 100,000 (2,000 current equivalent) common shares at $0.25 per share, or
$25,000. On August 12, 1997, the Company issued 300,000 (6,000 current
equivalent) common shares at $0.25 in exchange for services valued at $75,000.
On December 31, 1997, the Company converted $63,948.30 into 109,205 restricted
(2,187 current equivalent) common shares of stock at $0.59 per share. On August
15, 1998, 100,000 (200,000 current equivalent) common shares were issued for
cash at $0.05 per share. On August 17, 1998, the Company cancelled 800,000
(8,000 current equivalent) common shares previously issued on July 28, 1997 for
$16,000 in services. On December 11, 1998, the Company issued 1,000,000
(2,000,000 current equivalent) common shares at $0.05 in exchange for services
valued at $50,000. On December 11, 1998, the Company issued for cash 2,000,000
(4,000,000 current equivalent) common shares at $0.05 per share, or $100,000. On
December 31, 1998, 10,000,000 restricted (20,000,000 current equivalent) common
shares were issued at $.001 par value for services rendered or $10,000. On March
31, 1999, the Company issued 7,500,000 (15,000,000 current equivalent) common
shares for cash at $0.11 per share, or $825,000.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The officers and directors of the Company are indemnified as provided under
the Nevada Revised Statutes and pursuant to the Bylaws of the Company. This
indemnification, as described in Article VII, Section 1 of the Bylaws, includes
current and future legislation or judicial or administrative decision against
all fines, liabilities, costs and expenses, including attorneys' fees.
<PAGE>
C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . 1
Balance Sheet at June 30, 1999, December 31, 1998 and 1997 . . . . . .2
Statementof Operations For The Six Months Period Ended June 30, 1999,
For the Year Ended December 31, 1998, For the Period From
Inception (January 13, 1997) To December 31, 1997, And For the
Period From Inception (January 13, 1997) to
June 30, 1999 . . . . . . . . . . . . . . . . . . . . . . . .3
Statement of Stockholders' Equity For The Period From Inception
(January 13, 1997) to June 30, 1999 . . . . . . . . . . . .4-5
Statementof Cash Flows For The Six Months Period Ended June 30, 1999,
For the Year Ended December 31, 1998, For the Period From
Inception (January 13, 1997) To December 31, 1997, And For the
Period From Inception (January 13, 1997) to
June 30, 1999 . . . . . . . . . . . . . . . . . . .. . . . 6-7
Notes to the Financial Statements . . . . . . . . . . . . . . . . 8-13
All schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
<PAGE>
INDEPENDENT AUDITORS REPORT
Board of Directors
EquityAlert.Com, Inc.
Vancouver, B.C. V6J 1G1
We have audited the accompanying balance sheet of EquityAlert.Com, Inc. (A
Development Stage Company), (the Company), as of June 30, 1999, December 31,
1998 and 1997, and the related statements of operations, stockholders' equity
and cash flows for the six months period ended June 30, 1999, the year ended
December 31, 1998, the period from inception (January 13, 1997) to December 31,
1997, and the period from inception (January 13, 1997) to June 30, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit of the financial statements provides a reasonable
basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company at June 30, 1999, December 31,
1998 and 1997, and the results of its operations and its cash flows for the
periods indicated, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Company has been in the
development stage since its inception on January 13, 1997. The Company is
devoting substantially all of its present efforts in establishing a new business
and planned principal operations have not commenced. These factors raise
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
<PAGE>
<TABLE>
<CAPTION>
EQUITYALERT.COM, INC.
(A Development Stage Company)
BALANCE SHEET
JUNE 30, 1999, DECEMBER 31, 1998 AND 1997
<S> <C> <C> <C>
June 30, December 31, December 31,
1999 1998 1997
---- ---- ----
ASSETS
Current Assets
Cash $ 901,421 $ 3,551 $ 47,069
Stock Subscription Receivable (Note 5) 0 100,000 0
Other Receivables 0 0 6,744
------------ ----------- -------
Total Current Assets 901,421 103,551 53,813
Other Assets
Deposits 0 0 1,855
------------ ------------ -------
Total Assets $ 901,421 $ 103,551 $ 55,668
======= ======= ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 22,059 $ 21,458 $ 19,115
Other Advances (Note 6) 10,000 10,000 0
------ ------ --------
Total Current Liabilities 32,059 31,458 19,115
Stockholders' Equity
The accompanying notes are an integral part of these financial statements.
-1-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITYALERT.COM, INC.
(A Development Stage Company)
BALANCE SHEET
JUNE 30, 1999, DECEMBER 31, 1998 AND 1997
<S> <C> <C> <C>
Preferred Stock: $0.001 Par Value; Authorized
Shares, 1,000,000 None None None
Common Stock: $0.00001 Par Value;
Authorized Shares, 100,000,000; Issued and
Outstanding, 41,382,186, 26,382,186, and
198,186 Shares at June 30, 1999, December
31, 1998 and 1997 414 264 2
Additional Paid In Capital 1,536,534 711,684 546,946
Loss Accumulated During the Development (667,586) (639,855) (510,395)
Stage -------- --------- ---------
Total Stockholders' Equity 869,362 72,093 36,553
-------- --------- ---------
Total Liabilities and Stockholders' Equity $ 901,421 $ 103,551 $ 55,668
The accompanying notes are an integral part of these financial statements.
-2-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITYALERT.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998,
AND FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998,
AND FOR THE PERIOD FROM INCEPTION
(JANUARY 13, 1997) TO JUNE 30, 1999
<S> <C> <C> <C> <C> <C>
Loss
For the Six For the Six Accumulated
Months Months For the Three For the Three During the
Ended Ended Months Ended Months Ended Development
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998 Stage
------------- ------------- ------------- ------------- -----
Revenues $ 0 $ 0 $ 0 $ 0 $ 0
Expenses
General and Administrative 41,575 66,937 41,508 55,246 681,853
Other Income
Interest Income 13,844 1 11,105 1 14,267
------ ----------- ------ ----------- --------
Net Loss Available to
Common Stockholders $ (27,731) $ (66,936) $ (30,404) $ (55,245) $ (667,586)
====== ====== ======= ======= =======
Basic Loss Per Common
Share $ Nil $ (0.34) $ Nil $ (0.27) $ (0.02)
=== ====== === ===== ====
Basic Weighted Average
Common Shares Outstanding 36,382,186 198,186 36,382,186 198,186 36,382,186
========== ======= ========== ======= ==========
.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITYALERT.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS PERIOD ENDED JUNE 30, 1999, FOR THE YEAR ENDED
DECEMBER 31, 1998, FOR THE PERIOD FROM INCEPTION (JANUARY 13, 1997)
TO DECEMBER 31, 1997, AND FOR THE PERIOD FROM INCEPTION
(JANUARY 13, 1997) TO JUNE 30, 1999
<S> <C> <C> <C> <C>
For the
Period From
For the Inception Loss
Six Months For the Year (January 13, Accumulated
Ended Ended 1997) to During the
June 30, December 31, December 31, Development
1999 1998 1997 Stage
---- ---- ---- -----
Revenues $ 0 $ 0 $ 0 $ 0
Expenses
General and Administrative 41,575 129,461 510,817 681,853
Other Income
Interest Income 13,844 1 422 14,267
------ ----------- ----------- --------
Net Loss Available to Common
Stockholders $ (27,731) $ (129,460) $ (510,395) $ (667,586)
======= ======= ======= =======
Basic Loss Per Common Share $ Nil $ (0.05) $ (3.64) $ (0.02)
=== ===== ===== ====
The accompanying notes are an integral part of these financial statements.
-3-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITYALERT.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS PERIOD ENDED JUNE 30, 1999, FOR THE YEAR ENDED
DECEMBER 31, 1998, FOR THE PERIOD FROM INCEPTION (JANUARY 13, 1997)
TO DECEMBER 31, 1997, AND FOR THE PERIOD FROM INCEPTION
(JANUARY 13, 1997) TO JUNE 30, 1999
<S> <C> <C> <C> <C>
Basic Weighted Average Common
Shares Outstanding 36,382,186 2,432,186 140,182 36,382,186
========== ========= ======= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
<TABLE>
<CAPTION>
EQUITYALERT.COM, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (JANUARY 13, 1997) TO JUNE 30, 1999
<S> <C> <C> <C> <C> <C> <C> <C>
Loss
Accumulated
Additional During the
Preferred Stock Common Stock Paid In Development
Shares Amount Shares Amount Capital Stage Total
------ ------ ------ ------ ------- ----- -----
Issuance of Common Stock For
Services Rendered, January 13, 1997 60,000 $ 1 2,999 $ 3,000
Issuance of Common Stock For Cash,
February 28, 1997 6,000 0 75,000 75,000
Conversion of Debt to Equity, June 16,
1997 33,876 0 84,691 84,691
Issuance of Common Stock For Cash,
June 16, 1997 5,834 0 14,586 14,586
Issuance of Common Stock For
Services, June 16, 1997 82,289 1 205,722 205,723
Issuance of Common Stock For Cash,
August 12, 1997 2,000 0 25,000 25,000
Issuance of Common Stock For Services
Rendered, August 12, 1997 6,000 0 75,000 75,000
The accompanying notes are an integral part of these financial statements.
1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITYALERT.COM, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (JANUARY 13, 1997) TO JUNE 30, 1999
<S> <C> <C> <C> <C> <C> <C> <C>
Conversion of Debt to Equity,
December 31, 1997 2,187 0 63,948 63,948
Loss, From Inception (January 13, 1997)
to December 31, 1997
(510,395) (510,395)
---- ---- ------- ---- ------- -------- ------
Balance, December 31, 1997 0 0 198,186 2 546,946 (510,395) 36,553
Issuance of Common Stock For Cash,
August 15, 1998
200,000 2 4,998 5,000
Loss
Accumulated
Additional During the
Preferred Stock Common Stock Paid In Development
Shares Amount Shares Amount Capital Stage Total
------ ------ ------ ------ ------- ----- -----
Cancellation of Common Stock Issued,
August 17, 1998
(16,000) 0 0 0
Issuance of Common Stock For Cash,
December 11, 1998
4,000,000 40 99,960 100,000
Issuance of Common Stock For
Services, December 11, 1998
2,000,000 20 49,980 50,000
</TABLE>
The accompanying notes are an integral parrt of these financial statements
2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of Common Stock for Services
Rendered, December 31, 1998
20,000,000 200 9,800 10,000
Loss, Year Ended December 31, 1998 (129,460) (129,460)
----- ----- ---------- --- ------- -------- -------
Balance, December 31, 1998 0 0 26,382,186 264 711,684 (639,855) 72,093
Common Stock Issued For Cash, March
31, 1999
15,000,000 150 824,850 825,000
Loss, Six Months Period Ended June 30,
1999
(27,731) (27,731)
------ ----- ---------- ----- ---------- -------- -------
Balance, June 30, 1999 0 $ 0 41,382,186 $ 414 $ 1,536,534 $ (667,586) $ 869,362
====== ===== ========== ===== ========== ========= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
EQUITYALERT.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS PERIOD ENDED JUNE 30, 1999, FOR THE YEAR ENDED
DECEMBER 31, 1998, FOR THE PERIOD FROM INCEPTION (JANUARY 13, 1997)
TO DECEMBER 31, 1997, AND FOR THE PERIOD FROM INCEPTION
(JANUARY 13, 1997) TO JUNE 30, 1999
<S> <C> <C> <C> <C>
For the
For the Period From
Six Inception Loss
Months For the Year (January 13, Accumulated
Ended Ended 1997) to During the
June 30, December 31, December 31, Development
1999 1998 1997 Stage
---- ---- ---- -----
Cash Flows From Operating Activities
Net Loss $ (27,731) $ (129,460) $ (510,395) $ (667,586)
Adjustments to Reconcile Net Loss to Net
Cash Used By Operating Activities
Common Stock Issued For Services 0 60,000 283,723 343,723
Changes in Assets and Liabilities
(Increase) Decrease in Other Receivables 0 6,744 (6,744) 0
(Increase) Decrease in Deposits 0 1,855 (1,855) 0
Increase (Decrease) in Accounts Payable 601 2,343 19,115 22,059
---------- -------- -------- ---------
Total Adjustments 601 70,942 294,239 365,782
---------- ------- ------- --------
Net Cash Used By Operating Activities (27,130) (58,518) (216,156) (301,804)
Cash Flows From Investing Activities 0 0 0 0
----------- ---------- ----------- -----------
Net Cash Flows From Investing Activities 0 0 0 0
Cash Flows From Financing Activities
Proceeds From Sale of Common Stock 925,000 5,000 114,586 1,044,586
The accompanying notes are an integral part of these financial statements.
-1-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITYALERT.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS PERIOD ENDED JUNE 30, 1999, FOR THE YEAR ENDED
DECEMBER 31, 1998, FOR THE PERIOD FROM INCEPTION (JANUARY 13, 1997)
TO DECEMBER 31, 1997, AND FOR THE PERIOD FROM INCEPTION
(JANUARY 13, 1997) TO JUNE 30, 1999
<S> <C> <C> <C> <C>
Advances From Related Parties 0 10,000 148,639 158,639
---------- -------- ------- ----------
Net Cash Provided By Financing Activities 925,000 15,000 263,225 1,203,225
------- -------- ------- ---------
Increase (Decrease) in Cash and Cash Equivalents 897,870 (43,518) 47,069 901,421
Cash and Cash Equivalents, Beginning of Period 3,551 47,069 0 0
--------- -------- ---------- ------------
Cash and Cash Equivalents, End of Period $ 901,421 $ 3,551 $ 47,069 $ 901,421
For the
For the Period From
Six Inception Loss
Months For the Year (January 13, Accumulated
Ended Ended 1997) to During the
June 30, December 31, December 31, Development
1999 1998 1997 Stage
---- ---- ---- -----
Supplemental Information
Cash Paid For:
Interest $ 0 $ 0 $ 0 $ 0
====== ===== ===== =====
Income Taxes $ 0 $ 0 $ 0 $ 0
====== ===== ===== =====
Noncash Investing and Financing Activities:
Common Stock Issued For Services $ 0 $ 60,000 $ 283,723 $ 343,723
====== ======= ======== =======
Conversion of Debt to Equity $ 0 $ 0 $ 148,639 $ 148,639
====== ======= ========= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
EQUITYALERT.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS PERIOD ENDED JUNE 30, 1999 AND 1998,
AND FOR THE PERIOD FROM INCEPTION
(JANUARY 13, 1997) TO JUNE 30, 1999
<S> <C> <C> <C>
Loss
Accumulated
For the Six For the Six During the
Months Ended Months Ended Development
June 30, 1999 June 30, 1998 Stage
------------- ------------- -----------
Cash Flows From Operating Activities
Net Loss $ (27,731) $ (66,936) $ (667,586)
Adjustments to Reconcile Net Loss to Net
Cash Used By Operating Activities
Common Stock Issued For Services 0 0 343,723
Changes in Assets and Liabilities
(Increase) Decrease in Other Receivables 0 6,744 0
(Increase) Decrease in Deposits 0 1,855 0
Increase (Decrease) in Accounts Payable 601 (295) 22,059
---------- --------- --------
Total Adjustments 601 8,304 365,782
---------- --------- --------
Net Cash Used By Operating Activities (27,130) (58,632) (301,804)
Cash Flows From Investing Activities 0 0 0
------------ ------------- ----------
Net Cash Flows From Investing Activities 0 0 0
Cash Flows From Financing Activities
Proceeds From Sale of Common Stock 925,000 0 1,044,586
Advances From Related Parties 0 11,635 158,639
------------ ------ ----------
Net Cash Provided By Financing Activities 925,000 11,635 1,203,225
------- ------ ----------
Increase (Decrease) in Cash and Cash Equivalents 897,870 (46,997) 901,421
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITYALERT.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS PERIOD ENDED JUNE 30, 1999 AND 1998,
AND FOR THE PERIOD FROM INCEPTION
(JANUARY 13, 1997) TO JUNE 30, 1999
<S> <C> <C> <C>
Cash and Cash Equivalents, Beginning of Period 3,551 47,069 0
------- ------ --------
Cash and Cash Equivalents, End of Period $ 901,421 $ 72 $ 901,421
======= ====== =======
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
For the Six For the Six During the
Months Ended Months Ended Development
June 30, 1999 June 30, 1998 Stage
------------- ------------- -----------
Supplemental Information
Cash Paid For:
Interest $ 0 $ 0 $ 0
====== ====== ======
Income Taxes $ 0 $ 0 $ 0
====== ====== ======
Noncash Investing and Financing Activities:
Common Stock Issued For Services $ 0 $ 0 $ 343,723
====== ====== =======
Conversion of Debt to Equity $ 0 $ 0 $ 148,639
====== ====== =======
</TABLE>
<PAGE>
CONTENTS
Independent Auditors Report I 1
Balance Sheet at February 28, 1997 2
Statement of Operations for the Period Ended February 28, 1997 3
Statement of Stockholders' Equity for the period from Inception (January
13, 1997) Through February 28, 1997 4
Statement of Cash Flows for the Period Ended February 28, 1997 5-6
Notes to the Financial Statements I 7-8
All schedules am omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
<PAGE>
INDEPENDENT AUDITORS REPORT
Board of Directors
San Marino Minerals, Inc.
Riverside, CA 92504
We have audited the accompanying balance sheet of San Marino Minerals, Inc. (A
Development Stage Company), (the Company), as of February 28, 1997 and the
related statements of income, stockholdeW equity and cash flows for the period
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit of the financial statements provides a reasonable
basis for our opinion.
in our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company at February 28, 1997 and the
results of its operations and its cash flows for the period then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note I to the financial
statements, the Company is a development stage Company as defined in Financial
Accounting Standards Board Statement No. 7. The Company is devoting
substantially all of its present efforts in establishing a now business and
planned principal operations have not commenced. These factors raise substantial
doubt about its ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
<PAGE>
SAN MARINO MINERALS, INC.
(A Development Stage Company)
BALANCE SHEET
FEBRUARY 28,1997
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current Assets
Cash $ 74,028
Stock Subscriptions Receivable 500
Total Current Assets 74,528
Other Assets
Rent Security Deposit 155
155
Total Assets $ 74,683
</TABLE>
LIABILITIES AND STOCKHOLDERS'EQUITY
<TABLE>
<CAPTION>
<S> <C>
Liabilities None
Stockholders, Equity
Common Stock: $0.001 Par Value,
100,000,000 Authorized
Shares; Issued and Outstanding,
3,300,000 Shares at February 28,
1997 3,300
Additional Paid In Capital 74,700
Loss Accumulated During The Development Stage (3,317)
Total Stockholders'Equity 74,683
Total Liabilities and Stockholders' Equity 74,683
</TABLE>
The accompanying notes are integral part of these financial staternents.
-2-
<PAGE>
SAN MARINO MINERALS, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (JANUARY 13,1997) THROUGH FEBRUARY 28,1997 For the
Period January 13, Income 1997 Accumulated Through February 28, 1997
Through the DevelopmentStage
<TABLE>
<CAPTION>
<S> <C> <C>
Revenues $ 0 0
Expenses
General and Administrative 3,407 3,407
Total Expenses 3,407
Other Income
Interest Income 90 90
Net Loss $ (3,317) $ - (3,317)
Net (Loss) Per Share, of Comnon Stork $ NIL $ NIL
</TABLE>
The accompanying notes are an integral part of then financial statements.
-3-
<PAGE>
SAN MARINO MINERALS, INC. (A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (JANUARY 13,1997) THROUGH FEBRUARY 28,1997
income Accurnulated Additional During the
Common Stock Paid In Development
Shares Amount Capital Stage Total
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Issuance of Common Stock
for Services Rendered
January 13, 1997 3,000,000 $ 3,000 $ 3,000
Issuance of Common Stock
For Cash Through
February 28, 1997 300,000 300 74,700 75,000
Income From Inception
(January 13,1997)
Through February
28,1997 (3,317) (3,317)
Balance - February 28, 3,300,000 $ 3,300 74,700 (3,317) $ 74,683
1997
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
SAN MARINO MINERALS,INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (JANUARY 13,1997)
THROUGH FEBRUARY 28,1997
Cash Flows from Operating Activities
Net Income
Adjustments to Reconcile Net (Loss) to Net Cash Provided by Operating Activities
Changes in Assets and Liabilities
(Increase) Decrease in Stock Subscriptions
Receivable
(Increase) Decrease in Rent Security Deposits Total Adjustments
Net Cash Provided (Used) by Operating Activities
Cash Flows from Investing Activities
Net Cash Flows from Investing Activities
Cash Flows from Financing Activities
Proceeds from Sale of Common Stock
Net Cash Provided by Financing Activities
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period
<S> <C> <C>
For The From
Period Inception
January 13, Through
1997 February
Through 28,1997
February
28,1997
$ (3,317) $ (3,317)
(500)
(655)
(3,972)
0
0
(500)
(155)
(3,972)
78,090 78,000
78,000 78,000
74,028 74,028
0 0
$ 74,028 $ 74,028
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
SAN MARINO MINERALS, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (JANUARY 13,1997) THROUGH FEBRUARY 28,1997 For the
From Period Inception January 13, Through 1997 February Through 28,1997 February
28,1997
Supplemental Information
Cash Paid For:
Interest $ 0 $ 0
Income taxes $ 0 $ 0
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
SAN MARINO MINERALS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
FEBRUARY 28, 1997
NOTE I - ORGANIZATION
Swi Marino Minerals, Inc. (the Company) was incorporated under the laws of the
State of Florida on January 13, 1997, with an authorized capital of 100,000,000
shares of common stock with a par value of one mil (SO.001) per share. The
Company is a exploration and developer of mineral resource properties including,
but not limited to gold, silver, base minerals, precious metals, oil and gas.
On January 13, 1997, the Company issued 3,000,000 shares of common stock at
S.001 par value for services rendered or $3,000.
During January and February, 1997, the Company completed an Offering Memorandum
for 300,000 shares of common stock for cash at $0.25 per share or $75,000. The
shares were issued during February, 1997.
The Company is a development stage company, as defined in the Financial
Accounting Standards Board No. 7. The Company is devoting substantially all of
its present efforts in securing and establishing a new business, and planned
principal operations have not commenced. These factors raise substantial doubt
about its ability to continue as a going concern.
The rmancial statements have been prepared on the basis of accounting principles
applicable to a going concern. Accordingly, they do not purport to give effect
to adjustments, if any, that may be necessary should the Company be unable to
continue as a going concern. The continuation of the Company as a going concern,
is dependent upon the. Company's ability to establish itself as a profitable
business. The Company's ability to achieve these objectives cannot be determined
at this time.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
A. Accrual Method
The Company's financial statements are prepared using the accrual method of
accounting.
B. Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with a maturity of
three months or less to be cash and cash equivalents.
C. Income or Less Per Share
The computations of income or loss per sham of common stock are based on the
weighted average number of shares outstanding at the date of the financial
statements.
The accompanying notes am an integral part of these financial statements.
-7-
<PAGE>
SAN MARINO MINERALS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
FEBRUARY 28, 1997
NOTE 3 - LEASES
The Company entered into an office lease on January 15, 1997 ofProperty located
at 353 Sacramento Street, Suite #600, San Francisco, California 94111. The
officer, area is approximately 400 square feet and is lea5cd on a month to month
basis at the rate of $155 per month. Lease expense included in operations
through February 28, 1997 was $512.
NOTE 4 - SUBSEQUENT EVENTS
On April 1, 1997, the Company entered into an agreement with Oalanont Resources,
Inc. and obtained an option to acquire a 50% interest in and to 17 mining claims
located in the Lucite Hills in the state of Wyoming. The Company will have
exercised the option at such time as it has incurred a minimum of $200,000 in
exploration expenditures. An exclusive option to cam a 50% interest in and to
the property, subject only to a 2% NSR (Not Smelter Royalty) and yearly work
commitments can be exercised upon completion of the following:
(a) to incur a minimum of $200,000 on exploration expenditures on the Property
as follows:
(i) a total of $ 10,000 shall be expended on or before one year from acceptance;
(ii) a total of $50,000 shall be expended on or before two years from the date
of acceptance (inclusive of amounts expensed in the first year from the date of
acceptance).
The accompanying notes are an integral part of these financial statements,
-8-
<PAGE>
SIGNATURES
The issuer has duly caused this offering statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Vancouver,
Province of British Columbia, Canada, on September 10, 1999.
EQUITYALRTY.COM, INC.
By /s/ Harmel S. Rayat
---------------------------------
Harmel S. Rayat, Director, Chairman
This offering statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ Harmel S. Rayat
- - ------------------------------------------- -----------------------------
Harmel S. Rayat, Director
Date
/s/ Gurmuhk Kundan
- - ------------------------------------------- -----------------------------
Gurmuhk Kundan, Director
Date
/s/ Jasvir S. Rayat
- - ------------------------------------------- -----------------------------
Jasvir S. Rayat, Director
Date
<PAGE>
H98000014749
ARTICLES OF DISSOLUTION
Article I
- - ---------
The name of this Florida corporation is Molina Corp.
Article II
- - ----------
The Corporation's dissolution was authorized on the date stated in Article IV of
this document.
Article III
- - -----------
The Corporation's dissolution was authorized by its shareholders, and the number
of votes cast for dissolution was sufficient for approval. Tbe Corporation shall
pay or make reasonable provision to pay all claims and obligations known to the
Corporation. After known claims and obligations are paid, any remaining funds
shall be distributed to the shareholders of the dissolved Corporation.
Article IV
- - ----------
Tbese Articles of Dissolution and the dissolution of the Corporation will be
effective on January 9, 1997.
The undersigned executed this document on the date shown below.
Molina Corp.
By: /s/ H.S. Rayat
--------------
Name: Herdev S. Rayat
---------------
Title: President/Director
------------------
Date: August 10, 1998
Corporate Creations International
941 Fourth Street #200
Miami Beach FL 33139
(305) 672-0686
<PAGE>
ARTICLES OF AMENDMENT
Article I. Name
- - ---------------
The name of this Florida corporation is: San Marino Minerals, Inc. (the
"Corporation").
Article II. Amendment
- - ---------------------
The Articles of Incorporation of the Corporation are amended as follows:
Article III is deleted in its entirety and replaced with the following:
Article III - Capital Stock
- - ---------------------------
The corporation shall have the authority to issue 100,000,000 shares of common
stock, par value $0.001 per share, and 1,000,000 preferred shares at a par value
of $0.10.
Article III. Date Amendment Adopted
- - -----------------------------------
The amendment set forth in these Articles of Amendment was adopted on December
5, 1997.
Article IV. Shareholder Approval of Amendment
- - ---------------------------------------------
The amendment set forth in these Articles of Amendment was proposed by the
Corporation's Board of Directors and approved by the shareholders by a vote
sufficient for approval of the amendment.
The undersigned executed this document on the date shown below.
San Marino Minerals, Inc.
By: /s/ Greg K. Kuroda
-------------------
Print Name: Greg K. Kuroda
Print Title: Assistant Secretary
Date: 12/5/97
-------
Corporate Creations International Inc.
941 Fourth Street #200
Miami Beach FL 33139
(305) 672-0686
H07000020075
<PAGE>
H97000020075
ARTICLES OF AMENDMENT
Article I. Name
- - ---------------
The name of this Florida corporation is: San Marino Minerals, Inc. (the
"Corporation").
Article II. Amendment
- - ---------------------
The Articles of Incorporation of the Corporation are amended as follows:
Article III is deleted in its entirety and replaced with the following:
Article III - Capital Stock
- - ---------------------------
The corporation shall have the authority to issue 100,000,000 shares of common
stock, par value $0.001 per share, and 1,000,000 preferred shares at a par value
of $0.10.
Article III. Date Amendment Adopted
- - -----------------------------------
The amendment set forth in these Articles of Amendment was adopted on December
5, 1997.
Article IV. Shareholder Approval of Amendment
- - ---------------------------------------------
The amendment set forth in these Articles of Amendment was proposed by the
Corporation's Board of Directors and approved by the shareholders by a vote
sufficient for approval of the amendment.
The undersigned executed this document on the date shown below.
San Marino Minerals, Inc.
By: /s/ Greg K. Kuroda
-------------------
Print Name: Greg K. Kuroda
Print Title: Assistant Secretary
Date: 12/5/97
-------
Corporate Creations International Inc.
941 Fourth Street #200
Miami Beach FL 33139
(305) 672-0686
MOLINA CORP.
CONSENT OF DIRECTORS
Board Resolutions for Migratory Merger to Nevada
Pursuant to the Florida Revised Statutes, the undersigned directors of
Molina Corp. ("Molina", "Corporation"), a Florida corporation, comprising all
the directors of the Corporation, consent to the following resolutions:
RESOLVED, that it is in the best interests of the Corporation and its
shareholders to effect a tax-free reorganization under Section 368(a) (1)(F) of
the Internal Revenue Code to change the state of incorporation of the
Corporation from Florida to Nevada by means of a merger on a tax-free basis;
RESOLVED FURTHER, that the Agreement and Plan of Merger ("Merger
Agreement") between the Corporation and Centaur Technologies, Inc., a Nevada
corporation, a copy of which has been provided to each director, and all actions
required thereby are hereby approved subject to receipt of shareholder approval
of the plan of merger; however, the officers of the Corporation are authorized
to make such nonsubstantive changes and amendments to said agreement as they
deem necessary or advisable with the advice of counsel;
RESOLVED FURTHER, that the Plan of Merger be submitted to a vote of the
shareholders of the Corporation at a meeting thereof to be held on July 31,
1998, and that the secretary of the Corporation shall promptly prepare and give
due notice of such meeting in accordance with the provisions of the bylaws of
the Corporation and such other law as may be applicable under the circumstances;
RESOLVED FURTHER, that all agreements governing or applying to the
Corporation's capital shares shall continue to apply to shares received in the
merger reorganization;
RESOLVED FURTHER, that the officers of the Corporation are hereby
authorized and directed to take all actions, including the filing, execution,
and delivery of any and all articles, documents, certificates or instruments,
amendments to articles, documents, certificates or instruments, and to do or
cause to be done any and all acts which may be deemed necessary or desirable to
effect the foregoing resolutions and transactions.
BOARD OF DIRECTORS:
/s/ Herdev S. Rayat
- - ------------------------------------------
Herdev S. Rayat
<PAGE>
/s/ Wes Janzen
- - ------------------------------------------
Wes Janzen
/s/ Wes Kroeker
- - ------------------------------------------
Wes Kroeker
<PAGE>
ACTION BY WRITTEN CONSENT OF
THE DIRECTORS OF
CENTAUR TECHNOLOGIES, INC.
A Nevada corporation
In accordance with Section 92A.190 of the Nevada Revised Statutes, the
undersigned, constituting all the directors of Centaur Technologies, Inc., a
Nevada corporation (the "Corporation"), no shares having yet been issued or paid
for in the Corporation, hereby unanimously adopt the following resolutions:
RESOLVED, that the Bylaws in the form attached are hereby adopted as
the Bylaws of the Corporation. That these Bylaws are those used by Molina Corp.,
a Florida Corporation.
RESOLVED, that the fiscal year of the Corporation shall be December 31.
RESOLVED, that the following listed persons are elected to the
respective offices of the Corporation shown opposite their names below,
effective immediately, to serve at the pleasure of the Board or until their
respective successors are duly elected and qualified:
Herdev S. Rayat President
Wes Janzen Secretary, Treasurer
RESOLVED, that the President and Secretary of the Corporation are
authorized to open such bank accounts (including certificates or other time
deposit accounts) as they deem to be in the Corporation's best interests and the
Secretary is authorized to certify as to the passage of all Board resolutions
required to open such accounts.
RESOLVED, that it is in the best interests of the Corporation to effect
a reorganization under Section 368(a)(1)(F) of the Internal Revenue Code to
change the state of incorporation of Molina Corp., a Florida corporation, from
Florida to Nevada by means of a merger into the Corporation on a tax-free basis;
RESOLVED FURTHER, that the Agreement and Plan of Merger between the
Corporation and Molina Corp., a Florida corporation, a copy of which is attached
hereto, and all actions required thereby are hereby approved, provided that the
officers of the Corporation are authorized to make such nonsubstantive changes
and amendments to said agreement as they deem necessary or advisable with the
advice of counsel;
RESOLVED FURTHER, that all agreements governing or applying to the
Florida corporation's capital shares shall continue to apply to shares of this
Corporation issued in exchange therefor in the merger;
RESOLVED FURTHER, that the Corporation hereby takes all steps necessary
or appropriate to assuming the liabilities and obtaining the assets and benefits
of the Florida corporation;
<PAGE>
RESOLVED that the officers of the Corporation are hereby authorized and
directed to take all actions, including the filing, execution, and delivery of
any and all applications, articles, documents, certificates or instruments,
amendments to applications, articles, documents, certificates or instruments and
to do or cause to be done any and all acts which may be deemed necessary or
desirable to effect the foregoing resolutions and transactions.
BOARD OF DIRECTORS:
/s/ Herdev S. Rayat
- - ------------------------------------------
Herdev S. Rayat
/s/ Wes Janzen
- - ------------------------------------------
Wes Janzen
/s/ Wes Kroeker
- - ------------------------------------------
Wes Kroeker
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER made as of the 31th day of July, 1998 by
and between Molina Corp., a Florida corporation (hereinafter referred to as "Old
Company" or as a "Constituent Corporation") ("Molina"), and Centaur
Technologies, Inc., a Nevada corporation (hereinafter referred to as "New
Company" or as a "Constituent Corporation") ("Centaur").
WHEREAS, Old Company has determined that it is in the best interest of
Old Company to change the state of its incorporation from the State of Florida
to the State of Nevada; and
WHEREAS, Old Company has caused New Company to be formed and desires to
merge with and into New Company for the purpose of accomplishing such change,
and New Company desires to merge with Old Company pursuant to Nevada Revised
Statutes ss.92A.190, no shares having been issued by New Company (the "Merger"),
upon the terms, and subject to the conditions, set forth in this Agreement and
Plan of Merger (hereinafter called the "Agreement") in accordance with the laws
of the State of Nevada and the State of Florida; and
WHEREAS, the authorized capital stock of Old Company consists of one
hundred million (100,000,000) shares of common stock, par value $0.00001 per
share (hereinafter called the "Old Company Common Stock"), of which ninety-nine
thousand ninety-two (99,092) shares are issued and outstanding (as may hereafter
be adjusted for any change in the number of shares of Old Company Common Stock)
and one million (1,000,000) shares of preferred stock (hereinafter called the
"Old Company Preferred Stock"), par value $0.001 per share, of which zero (0)
shares are issued and outstanding; and
WHEREAS, the authorized capital stock of New Company consists of one
hundred million (100,000,000) shares of common stock, $0.00001 par value
(hereinafter called the "New Company Common Stock"), and one million (1,000,000)
shares of preferred stock, par value $0.001 per share (hereinafter called the
"New Company Preferred Stock"), none of which shares are outstanding as of the
date hereof, and
WHEREAS, the Boards of Directors of Old Company and New Company by
resolutions duly adopted have approved the terms of this Agreement and Plan of
the Merger and have directed the submission of this Agreement to the
stockholders of Old Company for approval;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, covenants, and provisions herein contained, the parties hereto agree
as follows:
1
<PAGE>
ARTICLE I
THE MERGER
1.1 At the Effective Time as defined in Section 4.1 hereof, Old Company
shall be merged with and into New Company which shall be the surviving
corporation and New Company at such time shall merge Old Company with and into
New Company. The corporate existence of New Company with all its purposes,
powers, and objects shall continue unaffected and unimpaired by the Merger and
New Company as it shall be constituted after the Effective Time is herein called
the "Surviving Corporation." The Surviving Corporation shall, from and after the
Effective Time, possess all of the rights, privileges, powers, and franchises of
a public, as well as a private, nature and be subject to and liable for all the
restrictions, disabilities, debts, liabilities, obligations, penalties and
duties of each of the Constituent Corporations and all of the rights,
privileges, powers, and franchises of each of the Constituent Corporations in
all property, real, personal, or mixed, and all debts due either of the
Constituent Corporations on whatever account, including stock subscriptions and
other things in action and all or every other interest of or belonging to either
of the Constituent Corporations shall be vested in the Surviving Corporation
without further act or deed; and the title to any real estate, whether vested by
deed or otherwise in either of the Constituent Corporations, shall not revert or
be in any way impaired by reason of the Merger, and no liability or obligation
due or to become due at the Effective Time or any claim or demand for any cause
then existing or action or proceeding pending by or against either of the
Constituent Corporations or any shareholder, officer or director thereof shall
be released or impaired by the Merger; and all rights of creditors and liens
upon property, of either of the Constituent Corporations, shall be preserved
unimpaired, all in accordance with, and with the effect stated in Section
92A.250 of the Nevada Revised Statutes, as amended. The separate existence and
corporate organization of Old Company shall cease upon the Effective Time and
thereupon Old Company and New Company shall be a single corporation, New
Company.
1.2 If at any time after the Effective Time the Surviving Corporation
shall consider or be advised that any further assignment, assurances in law, or
any other things are necessary or desirable to vest, perfect, or confirm of
record or otherwise in the Surviving Corporation, the title to any property or
right of Old Company acquired or to be acquired by reason of or as a result of
the Merger, Old Company and its proper officers and directors will, upon notice,
execute and deliver such proper deeds, assignments, and assurances reasonably
requested by the Surviving Corporation and do all things necessary or advisable
to vest, perfect, or confirm title to such property or rights in the Surviving
Corporation and otherwise to carry out the intent and purposes of this Agreement
and the proper officers and directors of the Surviving Corporation are fully
authorized in the name of Old Company or otherwise to take any and all such
action.
2
<PAGE>
ARTICLE II
ARTICLES OF INCORPORATION; BYLAWS; BOARD OF
DIRECTORS; OFFICERS
2.1 The Articles of Incorporation of New Company as in effect at the
Effective Time shall be the Articles of Incorporation of the Surviving
Corporation until the same shall be amended as provided by law.
2.2 The Bylaws of New Company as in effect at the Effective Time shall
be the Bylaws of the Surviving Corporation until the same shall thereafter be
altered, amended, or repealed in accordance with law, the Articles of
Incorporation of the Surviving Corporation, or said Bylaws.
2.3 From and after the Effective Time the officers and directors of Old
Company immediately prior to the Effective Time shall serve in their respective
capacities as the officers and directors of the Surviving Corporation, each to
serve until his respective successor shall have been duly elected and qualified.
2.4 The laws which are to govern the Surviving Corporation are the laws
of the State of Nevada.
ARTICLE III
CONVERSION OF SHARES
3.1 At the Effective Time each one (1) share of Old Company Common
Stock issued and outstanding immediately prior to the Effective Time then held
by each Old Company shareholder of record shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into one (1)
share of New Company Common Stock. At the Effective Time, each one (1) share of
Old Company Preferred Stock issued and outstanding prior to the Effective Time
then held by each Old Company shareholder of record shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into one (1) share of New Company Preferred Stock..
3.2 All agreements of any kind governing the Old Company Common Stock
are adopted by New Company at the Effective Time and shall apply to and burden
and benefit the New Company Common Stock.
3.3 Within a reasonable time after the Effective Time, each holder of
Old Company Common Stock prior to the Merger shall surrender to the Surviving
Corporation each certificate (the "'Certificates"') representing such Old
Company Common Stock prior to the Merger and shall receive in exchange therefor
a certificate or certificates representing the shares of stock of the Surviving
Corporation into which such Old Company Common Stock shall have been converted.
Except as otherwise provided by law, at and after the Effective Time, each
holder of a Certificate
3
<PAGE>
shall cease to have any rights as a shareholder of Old Company, except for the
right to surrender such Certificate in exchange for shares of stock of the
Surviving Corporation as provided herein.
ARTICLE IV
PROCEDURE TO EFFECT MERGER
4.1 The term "Effective Time" as used herein shall mean the time on the
day on which this Agreement shall become effective in accordance with the laws
of the State of Nevada. Each of the Constituent Corporations hereby agrees to do
promptly all of such acts, and to take promptly all such measures as may be
appropriate to enable it to perform as early as practicable the covenants and
agreements herein provided to be performed by it.
4.2 This Agreement may be terminated by the mutual consent of the
Boards of Directors of the Constituent Corporations whether before or after
approval of this Agreement by the stockholders of Old Company.
4.3 A copy of this Agreement or Articles of Merger with respect thereto
shall be filed in the office of the Secretary of State of the State of Nevada
and in the office of the Secretary of State of the State of Florida. Duplicate
copies of this Agreement, certified by the appropriate authorities, if necessary
or desirable, shall be filed or recorded in such other offices or places as
shall be required by the laws of the State of Nevada and the State of Florida.
ARTICLE V
MISCELLANEOUS
5.1 This Agreement may be executed in several counterparts each of
which shall be deemed an original but all of which counterparts collectively
shall constitute one instrument representing the agreement between the parties
hereto.
5.2 Except as otherwise provided in this Agreement, nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm or corporation, other than the Constituent Corporations or
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
5.3 This Agreement and legal relations between the parties hereto shall
be governed by and construed in accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, each of the Constituent Corporations has caused
this Agreement and Plan of Merger to be signed in its corporate name by its duly
authorized officers all as of the date first above written.
4
<PAGE>
Centaur Technologies, Inc.
a Nevada corporation
214-1628 West 1st Avenue
Vancouver, B.C. V6J 1G1 Canada
By: /s/ Herdev S. Rayat
---------------------------
President
ATTEST:
/s/ Wes Janzen
- - -------------------------------------
Secretary
Molina Corp.
a Florida corporation
214-1628 West 1st Avenue
Vancouver, B.C. V6J 1G1 Canada
By: /s/ Herdev S. Rayat
---------------------------
President
ATTEST:
/s/ Wes Janzen
- - ---------------------------------------
Secretary
I, Wes Janzen, Secretary of Centaur Technologies, Inc., a Nevada
corporation organized and existing under the laws of the State of Nevada, hereby
certify, as such secretary, that the Agreement and Plan of Merger to which this
certificate is attached, after having first being duly signed on behalf of the
said corporation and having been signed on behalf of Molina Corp., a corporation
of the State of Florida, was duly adopted pursuant to Section 92A.190 of the
Nevada Revised Statutes, without any vote of the stockholders of the surviving
corporation; and that no shares of the corporation were issued prior to the
adoption by the Board of Directors of the surviving corporation of the
resolution approving the Agreement and Plan of Merger, and that Section 92A.190
of the Nevada Revised Statutes, is applicable; and that the Agreement and Plan
of Merger was adopted by action of the Board of Directors of said Centaur
Technologies, Inc., a Nevada corporation, and is the duly adopted agreement and
act of the said corporation.
WITNESS my hand on this 19th day of February, 1999.
/s/ Wes Janzen
------------------------------------
Secretary
5
<PAGE>
ARTICLES OF MERGER
OF
MOLINA CORP.
a Florida corporation,
INTO
CENTAUR TECHNOLOGIES, INC.
a Nevada corporation,
Pursuant to the Florida Revised Statues ss.607.1105 and Nevada Revised
Statutes ss.92A.190, the undersigned corporations, by and through the
undersigned officers, hereby set forth the following Articles of Merger:
1. Plan of Merger. The Plan of Merger is set forth on Exhibit A attached hereto
and is incorporated herein by this reference. Centaur Technologies, Inc., a
Nevada corporation, is the Surviving Corporation.
2. Addresses. Molina Corp. and Centaur Technologies, Inc. each have their
corporate headquarters located at 214-1628 West 1st Avenue, Vancouver, B.C. V6J
1G1 Canada. The Statutory Agent for Centaur Technologies, Inc., the Surviving
corporation, is National Registered Agents, Inc. of Nevada, 400 West King
Street, Carson City, Nevada, 89703.
3. Outstanding Shares. The number of shares outstanding for each corporation
named in the plan of merger was as follows:
Common Stock
Molina Corp., a Florida corporation 99,092
Centaur Technologies, Inc., a Nevada corporation 0
-------------------------- --------
Preferred Stock
Molina Corp., a Florida corporation 0
Centaur Technologies, Inc., a Nevada corporation 0
-------------------------- --------
4. Approvals. All issued and outstanding shares of Molina Corp., a Florida
corporation, were voted in favor of the plan of merger. There are no
shareholders of Centaur Technologies, Inc., a Nevada corporation.
5. Agreements. The Surviving Corporation hereby agrees that:
1
<PAGE>
(a) it may be served with process in the State of Florida in any
proceeding for the enforcement of any obligation of the disappearing corporation
and in any proceeding for the enforcement of the rights of a dissenting
shareholder of such disappearing corporation against the Surviving Corporation;
(b) the Florida Department of State may accept service in any such
proceeding on behalf of the Surviving Corporation, or service may be had on this
Corporation's agent as appointed in its application for authority to do business
in the state of Florida; and
(c) it will pay to any dissenting shareholder of the disappearing
corporation the amount, if any, to which such dissenting shareholder may be
entitled under the provisions of ss. 607.1302 of the Florida Revised Statues, as
amended, and of Nevada Revised Statutes ss.92A.380.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the 19th day of February, 1999.
Molina Corp.,
a Florida corporation
By: /s/ Herdev S. Rayat
-----------------------
President
By: /s/ Wes Janzen
-----------------------
Secretary
Centaur Technologies, Inc.
a Nevada corporation
By: /s/ Herdev S. Rayat
-----------------------
President
By: /s/ Wes Janzen
-----------------------
Secretary
PROVINCE OF BRITISH COLUMBIA )
)ss.
County of ______________ )
On this, the 19th day of February, 1999, before me, the under signed Notary
Public, personally appeared Herdev S. Rayat and Wes Janzen, the President and
Secretary of Molina Corp., a Florida corporation, and acknowledged to me that
they,
2
<PAGE>
being authorized to do so, executed the foregoing instrument for the purposes
therein contained by signing the name of the corporation by themselves as such
officers.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
/s/
-------------------------------------
Notary Public
My Commission Expires:
- - ---------------------
PROVINCE OF BRITISH COLUMBIA )
)ss.
County of ______________ )
On this, the 19th day of February, 1999, before me, the under signed Notary
Public, personally appeared Herdev S. Rayat and Wes Janzen, the President and
Secretary of Centaur Technologies, Inc., a Nevada corporation, and acknowledged
to me that they, being authorized to do so, executed the foregoing instrument
for the purposes therein contained by signing the name of the corporation by
themselves as such officers.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
/s/
-------------------------------------
Notary Public
My Commission Expires:
- - ---------------------
3
<PAGE>
FLORIDA DEPARTMENT OF STATE
Sandra B. Mortham
Secretary of State
January 13, 1997
SAN MARINO MINERALS, INC.
3957 SAN MATEO AVENUE
RIVERSIDE, CA 92504
The Articles of Incorporation for SAN MARINO MINERALS, INC. were filed on
January 13, 1997, effective January 9, 1997, and assigned document number
P97000003298. Please refer to this number whenever corresponding with this
office.
Enclosed is the certification requested. To be official, the certification for a
certified copy must be attached to the original document that was electronically
submitted and filed under FAX audit number H97000000550.
A corporation annual report will be due this office between January 1 and May 1
of the year following the calendar year of the file date year. A Federal
Employer Identification (FEI) number will be required before this report can be
filed. Please apply NOW with the Internal Revenue Sarvice by calling
1-800-829-3676 and requesting form SS-4.
Please be aware if the corporate address changes, it is the responsibility of
the corporation to notify this office.
Should you have questions regarding corporations, please contact this office at
the address given below.
Terri Buckley
Corporate Specialist
New Filings Section
Division of Corporations LetterNumber: 297AO0001687
Division of Corporations - P.O. BOX 6327 - Tallahassee, Florida 32314
<PAGE>
STATE OF FLORIDA
DEPARTMENT OF STATE
I certify from the records of this office that SAN MARINO MINERALS, INC. is a
corporation organized under the laws of the State of Florida, file~ on January
13, 1997, effective January 9, 1997.
The document number of this corporation is P97000003298.
I further certify that said corporation has not filed Articles of Dissolution.
I further certify that this is an electronically transmitted certificate
authorized by section 15.16, Florida Statutes, and authenticated by the code,
297AC0001687-011397-P97000003298-111, noted below.
Authentication Code: 297AD0001687-011397-P97000003298-1/1
Given under my hand and the Great Seal of the State of Florida, at Tallahassee,
the Capital, this the Thirteenth day of January, 1997
[SEAL] /s/ Sandra B. Mortham
Secretary of State
<PAGE>
H97000000550
Articles of Incorporation
of
San Marino Minerals, Inc.
Article I. Name
---------------
The name of this Florida corporation is:
San Marino Minerals, Inc.
Article II. Address
-------------------
The mailing address of the Corporation is:
San Marino Minerals, Inc.
3957 San Mateo Avenue
Riverside CA 92504
Article III. Registered Agent
-----------------------------
The name and address of the registered agent of the Corporation is:
Corporate Creations Enterprises, Inc.
4521 PGA Boulevard #211
Palm Beach Gardens FL 33418
Article IV. Board of Directors
------------------------------
The name of each initial member of the Corporation's Board of Directors is:
Ken Finkelstein
The affairs of the Corporation shall be managed by a Board of Directors
consisting of no less than one director. The number of directors may be
increased or decreased from time to time in accordance with the Bylaws of the
Corporation. The election of directors shall be done in accordance with the
Bylaws. The directors shall be protected from personal liability to the fullest
extent permitted by applicable law.
H97000000550
Corporate Creations International Inc.
401 Ocean Drive #312 (Door Code #125)
Miami Beach FIL 33139-6629
(305) 672-0686
<PAGE>
Article V. Capital Stock
------------------------
The Corporation shall have the authority to issue 100,000,000 shares of common
stock, par value $.001 per share.
Article VI. Incorporator
------------------------
The name and address of the incorporator is:
Corporate Creations International Inc.
401 Ocean Drive #312 (Door Code #125)
Miami Beach FL 33139-6629
Article VII. Corporate Existence
--------------------------------
The corporate existence of the Corporation shall begin effective January 9, 1997
The undersigned incorporator executed these Articles of Incorporation on January
13, 1997
Corporate Creations International Inc.
By: /s/ Brian R. Fons
---------------------------------
Brian R. Fons Vice President
H97000000550
Corporate Creations International Inc.
401 Ocean Drive #312 (Door Code #125)
Miami Beach FL 33139-6629
(305) 672-0686
<PAGE>
H97000000550
CERTIFICATE OF DESIGNATION
REGISTERED AGENT AND REGISTERED OFFICE
CORPORATION:
San Marino Minerals, Inc.
REGISTERED AGENT:
Corporate Creations Enterprises, Inc.
4521 PGA Boulevard #211
Palm Beach Gardens FL 33418
I agree to act as registered agent to accept service of process for the
corporation named above at the place designated in this Certificate. I agree to
comply with the provisions of all statutes relating to the proper and complete
performance of the registered agent duties. I am familiar with and accept the
obligations of the registered agent position.
/s/ Brian R. Fons
- - -------------------------------------
Corporate Creations Enterprises, Inc.
Brian R. Forts, Vice President
Date: January 13, 1997
Corporate Creations International Inc.
401 Ocean Drive #312 (Door Code #125)
Miami Beach FL 33139-6629
(305) 672-0686
<PAGE>
SECRETARY OF STATE
CORPORATE CHARTER
I, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that CENTAUR TECHNOLOGIES, INC. did on August 10, 1998 file in
this office the original Articles of Incorporation; that said Articles are now
on file and of record in the office of the Secretary of State of the State of
Nevada, and further, that said Articles contain all the provisions required by
the law of said State of Nevada.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Great Seal of
State, at my office, in Carson City, Nevada, on August 11, 1998.
/s/ Dean Heller
Secretary of State
By /s/ Denise A. Bates
Certification Clerk
[SEAL]
<PAGE>
Articles of Incorporation
(PURSUANT TO NRS 78)
STATE OF NEVADA
1. NAME OF CORPORATION: Centaur Technologies, Inc.
--------------------------
2. RESIDENT AGENT: (designated resident agent and STREET ADDRESS in Nevada where
process may be served)
Name of Resident Agent: National Resident Agents, Inc. of Nevada
----------------------------------------
Street Address: 400 West King Street Carson City NV 89703
-----------------------------------------------------
Street No. Street Name City State ZIP
Mailing Address (if different):
3. AUTHORIZED SHARES: (number of shares the corporation is authorized to issue)
Number of shares with par value 100,000,000 Par value: $.00001
----------- -------
Number of shares without par value:
-----------
4. GOVERNING BOARD: shall be styled as (check one): X Directors Trustees
--- ----
The FIRST BOARD OF DIRECTORS shall consist of three members and the names
-----
and addresses are as follows:
Herdev S. Rayat 214-1628 West 1st Avenue Vancouver BC V6J 1G1
--------------- -----------------------------------------------
Name Address City/State/Zip
Herdev S. Rayat 214-1628 West 1st Avenue Vancouver BC V6J 1G1
--------------- -----------------------------------------------
Name Address City/State/Zip
Wes Jansen 214-1628 West 1st Avenue Vancouver BC V6J 1G1
--------------- -----------------------------------------------
Name Address City/State/Zip
Wes Kroeker 214-1628 West 1st Avenue Vancouver BC V6J 1G1
--------------- -----------------------------------------------
Name Address City/State/Zip
--------------- -----------------------------------------------
Name Address City/State/Zip
--------------- -----------------------------------------------
Name Address City/State/Zip
5. PURPOSE: The purpose of the corporation is to conduct or promote any lawful
business or purposes.
6. NRS 78.037: States that the articles of incorporation may also contain a
provision eliminating or limiting the personal liability of a director or
officer of the corporation or its stockholders for damages for breach of
fiduciary duty as a director or officer except acts or omissions which
include misconduct or fraud. Do you want this provision to be part of your
articles? Please check one of the following: YES X NO --- ---
7. OTHER MATTERS: This form includes the minimal statutory requirements to
incorporate under NRS 78. You may attach additional information noted on
separate pages. But, if any of the additional information is contradictory
to this form it cannot be filed and will be returned to you for correction.
NUMBER OF PAGES ATTACHED 1
---
8. SIGNATURES OF INCORPORATORS: The names and addresses of each of the
incorporators signing the articles:
Corporate Creations International Inc. Subscribed and sworn to before me
- - -------------------------------------- this 10th day of August 1998
Name (print) ---- ------ --
941 Fourth Street #200 Miami Beach FL 33139
- - -------------------------------------------
Address
/s/ Greg K. Kuroda /s/
- - -------------------------------------- ------------------------------
CORPORATE CREATIONS INTERNATIONAL INC. Notary Public
[SEAL]
9. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
National Registered Agents, Inc. of Nevada
- - ------------------------------------------ hereby accepts appointment as
Resident Agent for the above named corporation.
/s/ Date: 8/10/98
- - ------------------------------------------ -------
NATIONAL REGISTERED AGENTS, INC. OF NEVADA
<PAGE>
ARTICLES OF INCORPORATION
(PURSUANT TO NRS 78)
STATE OF NEVADA
STATE OF NEVADA
Secretary of State
Attachment #1
3. SHARES: Continued
In addition, the Corporation shall have the authority to issue 1,000,000
shares of preferred stock, par value $.001 per share, which may be divided into
series and with the preferences, limitations and relative rights determined by
the Board of Directors.
<PAGE>
H97000020075
ARTICLES OF AMENDMENT
Article I. Name
- - ---------------
The name of this Florida corporation is: San Marino Minerals, Inc. (the
"Corporation").
Article II. Amendment
- - ---------------------
The Articles of Incorporation of the Corporation are amended as follows:
Article III is deleted in its entirety and replaced with the following:
Article III - Capital Stock
- - ---------------------------
The corporation shall have the authority to issue 100,000,000 shares of common
stock, par value $0.001 per share, and 1,000,000 preferred shares at a par value
of $0.10.
Article III. Date Amendment Adopted
- - -----------------------------------
The amendment set forth in these Articles of Amendment was adopted on December
5, 1997.
Article IV. Shareholder Approval of Amendment
- - ---------------------------------------------
The amendment set forth in these Articles of Amendment was proposed by the
Corporation's Board of Directors and approved by the shareholders by a vote
sufficient for approval of the amendment.
The undersigned executed this document on the date shown below.
San Marino Minerals, Inc.
By: /s/ Greg K. Kuroda
-------------------
Print Name: Greg K. Kuroda
Print Title: Assistant Secretary
Date: 12/5/97
-------
Corporate Creations International Inc.
941 Fourth Street #200
Miami Beach FL 33139
(305) 672-0686
H07000020075
<PAGE>
H98000008657
ARTICLES OF AMENDMENT
Article I. Name
- - ---------------
The name of this Florida corporation is San Marino Minerals, Inc.
Article II. Amendment
- - ---------------------
The Articles of Incorporation of the Corporation are amended so that the name of
the Corporation is changed from San Marino Minerals, Inc. to Molina Corp.
Article III. Date Amendment Adopted
- - -----------------------------------
The amendment set forth in these Articles of Amendment was adopted on the date
shown below.
Article IV. Shareholder Approval of Amendment
- - ---------------------------------------------
The amendment set forth in these Articles of Amendment was proposed by the
Corporation's Board of Directors and approved by the shareholders by a vote
sufficient for approval of the amendment.
The undersigned executed this document on the date shown below.
San Marino Minerals, Inc.
By: /s/ Greg K. Kuroda
------------------
Name: Greg K. Kuroda
Title: Assistant Secretary
Date: 5/13/98
-------
Corporate Creations International Inc.
941 Fourth Street #200
Miami Beach FL 33139
(305) 672-0686
H98000008657
<PAGE>
Bylaws
of
San Marino Minerals, Inc.
ARTICLE I. DIRECTORS
--------------------
Section 1. Function. All corporate powers shall be exercised by or under the
authority of the Board of Directors. The business and affairs of the Corporation
shall be managed under the direction of the Board of Directors. Directors must
be natural persons who are at least 18 years of age but need not be shareholders
of the Corporation. Residents of any state may be directors.
Section 2. Compensation. The shareholders shall have authority to fix the
compensation of directors. Unless specifically authorized by a resolution of the
shareholders, the directors shall serve in such capacity without compensation.
Section 3. Presumption of Assent. A director who is present at a meeting of the
Board of Directors or a committee of the Board of Directors at which action on
any corporate matter is taken shall be presumed to have assented to the action
taken unless he objects at the beginning of the meeting (or promptly upon
arriving) to the holding of the meeting or transacting the specified business at
the meeting, or if the director votes against the action taken or abstains from
voting because of an asserted conflict of interest.
Section 4. Number. The Corporation shall have at least the minimum number of
directors required by 1 aw. The number of directors may be increased or
decreased from time to time by the Board of Directors.
Section 5. Election and Term. At each annual meeting of shareholders, the
shareholders shall elect directors to hold office until the next annual meeting
or until their earlier resignation, removal from office or death. Directors
shall be elected by a plurality of the votes cast by the shares entitled to vote
in the election at a meeting at which a quorum is present.
Section 6. Vacancies. Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of directors, may be
filled by the shareholders or by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board of Directors. A
director elected to fill a vacancy shall hold office only until the next
election of directors by the shareholders. If there are no remaining directors,
the vacancy shall be filled by the shareholders.
1
<PAGE>
Section 7. Removal of Directors. At a meeting of shareholders, any director or
the entire Board of Directors may be removed, with or without cause, provided
the notice of the meeting states that one of the purposes of the meeting is the
removal of the director. A director may be removed only if the number of votes
cast to remove him exceeds the number of votes cast against removal.
Section 8. Quorum and Voting. A majority of the number of directors fixed by
these Bylaws shall constitute a quorum for the transaction of business. The act
of a majority of directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 9. Executive and Other Committees. The Board of Directors, by resolution
adopted by a majority of the full Board of Directors, may designate from among
its members one or more committees each of which must have at least two members.
Each committee shall have the authority set forth in the resolution designating
the committee.
Section 10. Place of Meeting. Regular and special meetings of the Board of
Directors shall be held at the principal place of business of the Corporation or
at another place designated by the person or persons giving notice or otherwise
calling the meeting.
Section 11. Time, Notice and Call of Meetings. Regular meetings of the Board of
Directors shall be held without notice at the time and on the date designated by
resolution of the Board of Directors. Written notice of the time, date and place
of special meetings of the Board of Directors shall be given to each director by
mail delivery at least two days before the meeting.
Notice of a meeting of the Board of Directors need not be given to a
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting constitutes a waiver of notice of that
meeting and waiver of all objections to the place of the meeting, the time of
the meeting, and the manner in which it has been called or convened, unless a
director objects to the transaction of business (promptly upon arrival at the
meeting) because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors must be specified in the notice or waiver of notice of
the meeting.
A majority of the directors present, whether or not a quorum exists, may
adjourn any meeting of the Board of Directors to another time and place. Notice
of an adjourned meeting shall be given to the directors who were not present at
the time of the adjournment and, unless the time and place
2
<PAGE>
of the adjourned meeting are announced at the time of the adjournment, to the
other directors. Meetings of the Board of Directors may be called by the
President or the Chairman of the Board of Directors. Members of the Board of
Directors and any committee of the Board may participate in a meeting by
telephone conference or similar communications equipment if all persons
participating in the meeting can hear each other at the same time. Participation
by these means constitutes presence in person at a meeting.
Section 12. Action By Written Consent. Any action required or permitted to be
taken at a meeting of directors may be taken without a meeting if a consent in
writing setting forth the action to be taken and signed by all of the directors
is filed in the minutes of the proceedings of the Board. The action taken shall
be deemed effective when the last director signs the consent, unless the consent
specifies otherwise.
ARTICLE II. MEETINGS OF SHAREHOLDERS
------------------------------------
Section 1. Annual Meeting. The annual meeting of the shareholders of the
corporation for the election of officers and for such other business as may
properly come before the meeting shall be held at such time and place as
designated by the Board of Directors.
Section 2. Special Meeting. Special meetings of the shareholders shall be held
when directed by the President or when requested in writing by shareholders
holding at least 10% of the Corporation's stock having the right and entitled to
vote at such meeting. A meeting requested by shareholders shall be called by the
President for a date not less than 10 nor more than 60 days after the request is
made. Only business within the purposes described in the meeting notice may be
conducted at a special shareholders' meeting.
Section 3. Place. Meetings of the shareholders will be held at the principal
place of business of the Corporation or at such other place as is designated by
the Board of Directors.
Section 4. Notice. A written notice of each meeting of shareholders shall be
mailed to each shareholder having the right and entitled to vote at the meeting
at the address as it appears on the records of the Corporation. The meeting
notice shall be mailed not less than 10 nor more than 60 days before the date
set for the meeting. The record date for determining shareholders entitled to
vote at the meeting will be the close of business on the day before the notice
is sent. The notice shall state the time and place the meeting is to be held. A
notice of a special meeting shall also state the purposes of the meeting. A
notice of meeting shall be sufficient for that meeting and any adjournment of
it. If a shareholder transfers any shares after the notice is sent, it shall not
be necessary to notify the transferee. All shareholders may waive notice
3
<PAGE>
of a meeting at any time.
Section 5. Shareholder Quorum. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. Any number of shareholders, even if less than a quorum, may
adjourn the meeting without further notice until a quorum is obtained.
Section 6. Shareholder Voting. If a quorum is present, the affirmative vote of a
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders. Each outstanding share
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. An alphabetical list of all shareholders who are entitled to
notice of a shareholders, meeting along with their addresses and the number of
shares held by each shall be produced at a shareholders, meeting upon the
request of any shareholder.
Section 7. Proxies. A shareholder entitled to vote at any meeting of
shareholders or any adjournment thereof may vote in person or by proxy executed
in writing and signed by the shareholder or his attorney-in-fact. The
appointment of proxy will be effective when received by the Corporation's
officer or agent authorized to tabulate votes. No proxy shall be valid more than
11 months after the date of its execution unless a longer term is expressly
stated in the proxy.
Section 8. Validation. If shareholders who hold a majority of the voting stock
entitled to vote at a meeting are present at the meeting, and sign a written
consent to the meeting on the record, the acts of the meeting shall be valid,
even if the meeting was not legally called and noticed.
Section 9. Conduct of Business By Written Consent. Any action of the
shareholders may be taken without a meeting if written consents, setting forth
the action taken, are signed by at least a majority of shares entitled to vote
and are delivered to the officer or agent of the Corporation having custody of
the Corporation's records within 60 days after the date that the earliest
written consent was delivered. Within 10 days after obtaining an authorization
of an action by written consent, notice shall be given to those shareholders who
have not consented in writing or who are not entitled to vote on the action. The
notice shall fairly summarize the material features of the authorized action. If
the action creates dissenters' rights, the notice shall contain a clear
statement of the right of dissenting shareholders to be paid the fair value of
their shares upon compliance with and as provided for by the state law governing
corporations.
ARTICLE III. OFFICERS
---------------------
Section 1. Officers; Election; Resignation; Vacancies. The
4
<PAGE>
Corporation shall have the officers and assistant officers that the Board of
Directors appoint from time to time. Except as otherwise provided in an
employment agreement which the Corporation has with an officer, each officer
shall serve until a successor is chosen by the directors at a regular or special
meeting of the directors or until removed. Officers and agents shall be chosen,
serve for the terms, and have the duties determined by the directors. A person
may hold two or more offices.
Any officer may resign at any time upon written notice to the Corporation. The
resignation shall be effective upon receipt, unless the notice specifies a later
date. If the resignation is effective at a later date and the Corporation
accepts the future effective date, the Board of Directors may fill the pending
vacancy before the effective date provided the successor officer does not take
office until the future effective date. Any vacancy occurring in any office of
the Corporation by death, resignation, removal or otherwise may be filled for
the unexpired portion of the term by the Board of Directors at any regular or
special meeting.
Section 2. Powers and Duties of Officers. The officers of the Corporation shall
have such powers and duties in the management of the Corporation as may be
prescribed by the Board of Directors and, to the extent not so provided, as
generally pertain to their respective offices, subject to the control of the
Board of Directors.
Section 3. Removal of officers. An of f icer or agent or member of a committee
elected or appointed by the Board of Directors may be removed by the Board with
or without cause whenever in its judgment the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of an
officer, agent or member of a committee shall not of itself create contract
rights. Any officer, if appointed by another officer, may be removed by that
officer.
Section 4. Salaries. The Board of Directors may cause the Corporation to enter
into employment agreements with any officer of the Corporation. Unless provided
for in an employment agreement between the Corporation and an officer, all
officers of the Corporation serve in their capacities without compensation.
Section 5. Bank Accounts. The Corporation shall have accounts with financial
institutions as determined by the Board of Directors.
ARTICLE IV. DISTRIBUTIONS
-------------------------
The Board of Directors may, from time to time, declare
5
<PAGE>
distributions to its shareholders in cash, property, or its own shares, unless
the distribution would cause (i) the Corporation to be unable to pay its debts
as they become due in the usual course of business, or (ii) the Corporation's
assets to be less than its liabilities plus the amount necessary, if the
Corporation were dissolved at the time of the distribution, to satisfy the
preferential rights of shareholders whose rights are superior to those receiving
the distribution. The shareholders and the Corporation may enter into an
agreement requiring the distribution of corporate profits, subject to the
provisions of law.
ARTICLE V. CORPORATE RECORDS
----------------------------
Section 1. Corporate Records. The corporation shall maintain its records in
written form or in another form capable of conversion into written form within a
reasonable time. The Corporation shall keep as permanent records minutes of all
meetings of its shareholders and Board of Directors, a record of all actions
taken by the shareholders or Board of Directors without a meeting, and a record
of all actions taken by a committee of the Board of Directors on behalf of the
Corporation. The Corporation shall maintain accurate accounting records and a
record of its shareholders in a form that permits preparation of a list of the
names and addresses of all shareholders in alphabetical order by class of shares
showing the number and series of shares held by each.
The Corporation shall keep a copy of its articles or restated articles
of incorporation and all amendments to them currently in effect; these Bylaws or
restated Bylaws and all amendments currently in effect; resolutions adopted by
the Board of Directors creating one or more classes or series of shares and
fixing their relative rights, preferences, and limitations, if shares issued
pursuant to those resolutions are outstanding; the minutes of all shareholders,
meetings and records of all actions taken by shareholders without a meeting for
the past three years; written communications to all shareholders generally or
all shareholders of a class of series within the past three years, including the
financial statements furnished for the last three years; a list of names and
business street addresses of its current directors and officers; and its most
recent annual report delivered to the Department of State.
Section 2. Shareholders' Inspection Rights. A shareholder is entitled to inspect
and copy, during regular business hours at a reasonable location specified by
the Corporation, any books and records of the Corporation. The shareholder must
give the Corporation written notice of this demand at least five business days
before the date on which he wishes to inspect and copy the record(s). The demand
must be made in good faith and for a proper purpose. The shareholder must
describe with reasonable particularity the purpose and the records he
6
<PAGE>
desires to inspect, and the records must be directly connected with this
purpose. This Section does not affect the right of a shareholder to inspect and
copy the shareholders' list described in this Article if the shareholder is in
litigation with the Corporation. In such a case, the shareholder shall have the
same rights as any other litigant to compel the production of corporate records
for examination.
The Corporation may deny any demand for inspection if the demand was
made for an improper purpose, or if the demanding shareholder has within the two
years preceding his demand, sold or offered for sale any list of shareholders of
the Corporation or of any other corporation, has aided or abetted any person in
procuring any list of shareholders for that purpose, or has improperly used any
information secured through any prior examination of the records of this
Corporation or any other corporation.
Section 3. Financial Statements for Shareholders. Unless modified by resolution
of the shareholders within 120 days after the close of each fiscal year, the
Corporation shall furnish its shareholders with annual financial statements
which may be consolidated or combined statements of the Corporation and one or
more of its subsidiaries, as appropriate, that include a balance sheet as of the
end of the fiscal year, an income statement for that year, and a statement of
cash flows for that year. If financial statements are prepared for the
Corporation on the basis of generally accepted accounting principles, the annual
financial statements must also be prepared on that basis.
If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the President or the person responsible for the
Corporation's accounting records stating his reasonable belief whether the
statements were prepared on the basis of generally accepted accounting
principles and, if not, describing the basis of preparation and describing any
respects in which the statements were not prepared on a basis of accounting
consistent with the statements prepared for the preceding year. The Corporation
shall mail the annual financial statements to each shareholder within 120 days
after the close of each fiscal year or within such additional time thereafter as
is reasonably necessary to enable the Corporation to prepare its financial
statements. Thereafter, on written request from a shareholder who was not mailed
the statements, the Corporation shall mail him the latest annual financial
statements.
Section 4. Other Reports to Shareholders. If the Corporation indemnifies or
advances expenses to any director, officer, employee or agent otherwise than by
court order or action by
7
<PAGE>
the shareholders or by an insurance carrier pursuant to insurance maintained by
the Corporation, the Corporation shall report the indemnification or advance in
writing to the shareholders with or before the notice of the next annual
shareholders' meeting, or prior to the meeting if the indemnification or advance
occurs after the giving of the notice but prior to the time the annual meeting
is held. This report shall include a statement specifying the persons paid, the
amounts paid, and the nature and status at the time of such payment of the
litigation or threatened litigation.
If the Corporation issues or authorizes the issuance of shares for
promises to render services in the future, the Corporation shall report in
writing to the shareholders the number of shares authorized or issued, and the
consideration received by the corporation, with or before the notice of the next
shareholders, meeting.
ARTICLE VI. STOCK CERTIFICATES
------------------------------
Section 1. Issuance. The Board of Directors may authorize the issuance of some
or all of the shares of any or all of its classes or series without
certificates. Each certificate issued shall be signed by the President and the
Secretary (or the Treasurer). The rights and obligations of shareholders are
identical whether or not their shares are represented by certificates.
Section 2. Registered Shareholders. No certificate shall be issued for any share
until the share is fully paid. The Corporation shall be entitled to treat the
holder of record of shares as the holder in fact and, except as otherwise
provided by law, shall not be bound to recognize any equitable or other claim to
or interest in the shares.
Section 3. Transfer of Shares. Shares of the Corporation shall be transferred on
its books only after the surrender to the Corporation of the share certificates
duly endorsed by the holder of record or attorney-in-fact. If the surrendered
certificates are canceled, new certificates shall be issued to the person
entitled to them, and the transaction recorded on the books of the Corporation.
Section 4. Lost, Stolen or Destroyed Certificates. If a shareholder claims to
have lost or destroyed a certificate of shares issued by the Corporation, a new
certificate shall be issued upon the delivery to the Corporation of an affidavit
of that fact by the person claiming the certificate of stock to be lost, stolen
or destroyed, and, at the discretion of the Board of Directors, upon the deposit
of a bond or other indemnity as the Board reasonably requires.
ARTICLE VII. INDEMNIFICATION
----------------------------
8
<PAGE>
Section 1. Right to Indemnification. The Corporation hereby indemnifies each
person (including the heirs, executors, administrators, or estate of such
person) who is or was a director or officer of the Corporation to the fullest
extent permitted or authorized by current or future legislation or judicial or
administrative decision against all fines, liabilities, costs and expenses,
including attorneys, fees, arising out of his or her status as a director,
officer, agent, employee or representative. The foregoing right of
indemnification shall not be exclusive of other rights to which those seeking an
indemnification may be entitled. The Corporation may maintain insurance, at its
expense, to protect itself and all officers and directors against fines,
liabilities, costs and expenses, whether or not the Corporation would have the
legal power to indemnify them directly against such liability.
Section 2. Advances. Costs, charges and expenses (including attorneys, fees)
incurred by a person referred to in Section 1 of this Article in defending a
civil or criminal proceeding shall be paid by the Corporation in advance of the
final disposition thereof upon receipt of an undertaking to repay all amounts
advanced if it is ultimately determined that the person is not entitled to be
indemnified by the Corporation as authorized by this Article, and upon
satisfaction of other conditions required by current or future legislation.
Section 3. Savings Clause. If this Article or any portion of it is invalidated
on any ground by a court of competent jurisdiction, the Corporation nevertheless
indemnifies each person described in Section I of this Article to the fullest
extent permitted by all portions of this Article that have not been invalidated
and to the fullest extent permitted by law.
ARTICLE VIII. AMENDMENT
-----------------------
These Bylaws may be altered, amended or repealed, and new Bylaws
adopted, by a majority vote of the directors or by a vote of the shareholders
holding a majority of the shares.
I certify that these are the Bylaws adopted by the Board of Directors of
the Corporation.
/s/
---------
Secretary
Date: 1/12/97
-------
9
<PAGE>
DISTRIBUTOR AGREEMENT
This Distributor Agreement ("Agreemenf'), is entered into by and between
COMTEX Scientific Corporation (COMTEX") and EquityAlert.com, Inc. (the
"Distributor').
1. Definitions
"Information Providers" ("lPs") are third parties from whom COMTEX acquires
the right to distribute Content. "Content' means all material, whether or not
protected by copyright, including but not limited to text, images, and other
multimedia data, that COMTEX obtains from IPs or creates itself. COMTEX reserves
the right to add or withdraw IPs and items of coverage to or from the Content
without notice. "End-User' means each third party to whom Distributor provides
the Services as authorized in Exhibit A. "Services" are the electronic
information services offered by Distributor that make available the Content, as
authorized in Exhibit A.
2. Distribution
a. Grant of Rights; Distribution by Distributor. Subject to the terms and
conditions of this Agreement and its Exhibits, COMTEX grants Distributor a
nonexclusive license and right (A) to distribute the Content to EndUsers as part
of the Services, and (B) to license End-Users to use the Content as authorized
by the End-User Agreement. Distributor may retain,copies of the Content for
thirty (30) days after receipt from COMTEX, or such other time period as
authorized in Exhibit A. At no charge to COMTEX, Dis tributor shall provide
COMTEX reasonable access to the Services for the purposes of reviewing
Distributors incorporation of the Content into the Services and evaluating
compliance with this Agreement. Before implementing any major changes to the
Services, Distributor shall provide notice thereof to COMTEX.
b. Notices. Distributor shall cause the Services to display as part of each
story that includes Content transmitted by COMTEX (A) the copyright notice
transmitted therewith indicating that the copyright owner is a COMTEX IP or
COMTEX, (B) the phrase "News Provided by COMTEX" (or similar phrase requested by
COMTEX), (C) the COMTEX logo, and (D) an operational link to www.comtexnews.com
(or other COMTEX World Wide Web site). Such notices shall be conspicuous to the
End-User and comply with any further requi rements set forth in Exhibit A, and
must also be mutually agreeable to both Parties.
c. Restrictions. Distributor shall not knowingly distribute the Content to
any entity (A) for use in print, ar, television or radio news media or (B) that
redistributes the Content to its customers, with or without charge. In 4 the
event that any unauthorized distribution occurs, Distributor immediately shall
notify COMTEx and use its best efforts to immediately cease such distribution.
d. Modifications. Distributor shall not edit, abridge, rewrite, translate
or in any other way alter or modify the Content or create any work derived
from the Content, except to the minimum extent necessarily incident to forming
the look and feel of Distributor's Services.
e. Corrections. Upon receipt of notice from ComTEX of an error in Content
provided Distributor or in the provision of the Services by Distributor to
End-Users, Distributor immediately shall (A) consult, if necessary, with COMTEX
regarding the appropriate correction or other remedy for such error, (B)
implement as directed by COMTEX such correction or other remedy, such as
retracting a story or article or transmitting a correction, and (C) provide
COMTEx documentation evidencing such correction or other remedy.
f. End-User Agreements. Distributor shall obtain from each End-User, either
in writing or via acknowledgment of an electronic form (which acknowledgment can
be provided by the End-User's use of Distributor's Services), consent to the
terms set forth in Exhibit C (or terms substantially equivalent thereto).
g. Use of Name. Distributor shall name COMTEX as one of its content sources
in all material (A) provided End-Users about the Service or (B) that identify
Distributor's content sources. Distributor agrees, that at least ten (10)
business days prior to use, to submit to COMTEX for approval all promotional
materials, including press releases and advertisements (whether using print,
broadcast or on-line media) that are produced by Distributor
Confidential Distribution Agreement Page I of 2
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and describe the Content or identify COMTEX' IPs. Approval of use of such
materials shall be deemed granted unless written notice of disapproval is
received within five (5) business days.
3. Terms and Termination
a. Term. The term of this Agreement starts on the date of the last
signature to this Agreement and shall remain in effect for two (2) years and
shall automatically renew for successive two-year terms unless either party
elects not to renew by giving written notice to the other party at least ninety
(90) days before the end of the then current term.
b. Suspension. COMTEX, in its sole discretion, may immediately suspend
delivery of Content to Distributor if A) the Distributor or its End-Users breach
of this Agreement has a reasonable possibility of causing COMTEX to breach its
agreement with an Information Provider or B) Distributor either fails to make
payments in full in accordance with this Agreement, or C) Distributor fails to
provide COMTEX the Usage Tracking Report as required in this Agreement. COMTEX
shall resume delivery of Content only.after Distributor has taken action
satisfactory to COMTEX to assure that no further breach of this Agreement shall
occur.
c. Termination for Breach. If a party materially breaches this Agreement,
the other party, after giving the breaching party sixty (60) days prior written
notice, may terminate this Agreement if the breach remains uncured. In addition,
either party may terminate this Agreement if the other party makes a general
assignment for the benefit of its creditors, permits the appointment of a
receiver for its business or assets, or takes steps to wind down its business.
d. Obligations upon Termination. Upon termination of this Agreement,
Distributor shall not distribute or use the Content. Distribut - or shall (A)
within thirty (30) days of termination, pay to COMTEx all charges then owed, (B)
for the remainder of the then-current term pay to COMTEX all Minimums unless
termination is due Solely to COMTEX' material breach of this Agreement, and (C)
within fifteen (15) days of termination, deliver to COMTEX all hardware owned by
COMTEX. If such hardware is not returned, Distributor shall pay COMTEX the
replacement value thereof. Within thirty (30) days of termination, Distributor
shall erase and purge the Content from any accessible database and/or storage
material. Immediately upon termination Distributor shall return to COMTEx all
materials proprietary to COMTEX or containing COMTEX Confidential Information.
4. Confidential Information.
The Receiving Party shall not disclose or otherwise transfer Confidential
Information of the Disclosing Party to any third party, without first obtaining
the Disclosing Party's consent, and shall take all reasonable precautions to
prevent inadvertent disclosure of such Confidential Information. "Confidential
Information" shall mean: (A) the terms and conditions of this Agreement, any
information regarding COMTEX' prices, or any information concerning the
composition Of COMTEX' products; (13) information w hich is designated as
Confidential Information by the party disclosing such information (the
"Disclosing Party"); (C) with respect to information provided on paper, by
facsimile or electronic mail, by any electronic means or by any other medium
(collectively "in writing"), by labeling such information as "CONFIDENTIAL
INFORMATION" before the information is provided to the other party (the
"Receiving Party"); and (iv) with respect to information disclosed either
verbally or in writing, by notifying the Rece iving Party, in writing within
thirty (30) days of the disclosure, that the information identified in such
notice is designated Confidential Information effective as of the Receiving
Party's receipt of such notice. "Confidential Information" shall not include
information that (A) is or shall become generally available without fault of the
Receiving Party, (13) is in the Receiving Party's possession prior to its
disclosure by the Disclosing Party, (C) is independently developed by the
Receiving Party, or (D ) is rightfully obtained by the Receiving Party from
third parties without similar restrictions. This contract, and everything
contained herein, is confidential.
5. Further Rights Obligations and Limitations
a. Ownership. This Agreement does not transfer to Distributor or any of its
End-Users ownership of the Content.
Confidential Distribution Agreement Page 2 of 2
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b. No Warranty. Distributor agrees that the Content and Service is provided
by COMTEX "AS IS". COMTEX does not warrant (A) the accuracy, completeness or
timeliness of the Content and (B) that the Content will not infringe any
copyright or other right of any third party. COMTEX DISCLAIMS ALL WARRANTIES,
INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, RELATING TO THIS AGREEMENT, PERFORMANCE OR
INABILITY TO PERFORM UNDER THIS AGREEMENT, THE CONTEN T, AND EACH PARTY'S
COMPUTING AND DISTRIBUTION SYSTEM. that the Content will not infringe any
copyright or other right of any third party.
c. Indemnification. Distributor shall indemnify COMTEX and its Information
Providers against any third party claims and damages, including attorneys'fees
and related expenses, arising out of Distributors breach of this Agreement.
d. Limitation. In no event shall either party be liable to the other for
any indirect, special, exemplary or consequential damages, including lost
profits, whether arising in contract or tort.
e. Assignment. Distributor may assign this Agreement only with
COMTEX'written consent.
f. Beneficiaries. The Information Providers may enforce this Agreement to
the same extent as COMTEX.
6. General Terms
This is the complete and only agreement between the parties. This Agreement
and performance hereunder shall be governed by laws of Virginia, and the parties
consent to the exclusive jurisdiction of the state and federal courts of
Virginia. In any action related to this Agreement, the prevailing pafty shall
recover attorneys' fees and related expenses from the other party. Notices shall
be delivered by hand or U.S. certified mail to the addresses set forth below.
AGREED:
EquityAlert.com, Inc., by COMTEX Scientific Corporation
1628 W. First Ave. #216 4900 Seminary Road, Suite 800
Vancouvor, BC V6J IG1 Alexandria, Virginia 22311
(604)659-5030 (fax) 703-820-2005 (fax)
/s/ Harmel Rayat /s/
- - ------------------------- -----------------------------
Harmel Rayat Signature
/s/ Harmel Rayat
- - ------------------------- Executive Vice President, Sales
Printed Name
/s/ Director
- - ------------------------- Date: -----------------------
Title
/s/ August 31, 1999
Date: --------------------
Confidential Distribution Agreement Page 3 of 3
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EXHIBITS A and B - Services, Charges, Payments
1. The Services:
COMTEX shall deliver the COMTEX Public Companies CustomWire (press releases
only), and the Business, Finance, and High Tech Top Story Newsrooms to
Distributor for use by the Distributor on the Distributor's Web site:
www.equityalert.com. COMTEX CustomWire news in the Services will be accessible
to End-Users for a period not to exceed thirty (30) days ("Archive Length").
2. Charges and Payment Terms
Distributor shall pay COMM any Minimums, Fees, Royalties and/or Communication
charges as set forth below. Each month, COMTEX shall provide Distributor an
invoice stating the Minimums, Fees and Communications Charges owed by
Distributor to COMTEX. Such invoice will be paid within thirty (30) days of the
date of the invoice. Further, Distributor shall calculate all due Royalties on a
monthly basis and remit such Royalties to COMTEX within thirty (30) days of the
close of the month in which the Royalties occu rred. Start-Up/Installation Fees
shall be due upon contract execution.
Monthly Fee: the following schedule, will be used for the monthly Fees due to
Comtex:
October, 1999 $625
November, 1999 $1250
December, 1999 $1875
January, 2000 and thereafter $2100
Communication Charges: $400 per month
Start-Up/Installation Fee: $1500.
Royalty (Royalties) Schedule: No Royalties will be due under the terms of this
Agreement.
Royalty Reporting: No Reporting will be necessary under the terms of this
Agreement.
3. Term. The Initial Term shall be one year. There shall be no automatic renewal
of this Agreement, unless agreed to by both Parties. This clause shall take
precedence over Section 3(a).
Confidential Distribution Agreement Page 4 of 4
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Exhibit C -- COMTEX End-User Agreement Provisions
1. Ownership. End-User agrees that COMTEX Scientific Corporation ("COMTEX") and
its information providers retain all proprietary right, title or interest,
including copyright, in the stories, articles or other material, including but
not limited to text, images, and other multimedia data, that COMTEX provides as
part of Distributor's Services (the "Content").
2. Restrictions on Use. End-User agrees that it will not copy nor license, sell,
transfer, make available or otherwise distribute the Content to any entity or
person. End-User shall use its best efforts to stop any such copying or
distribution immediately after such use becomes known.
3. No Warranty. The Content is provided "AS IS." COMM AND ITS INFORMATION
PROVIDERS DISCLAIM ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, RELATING TO THIS AGREEMENT, THE CONTENT AND ALL PERFORMANCE
HEREUNDER. COMTEx and its information providers make no warranties regarding the
completeness, accuracy or availability of the Content.
4. Limitation of Liabilily. Iri'no event shall COMTEX or its information
providers be liable to End-User or any other person or entity for any direct,
indirect, special, exemplary or consequential damages, including lost profits,
arising under this Agreement or from performance thereunder based in contract,
negligence, strict liability or otherwise, whether or not they or it had any
knowledge, actual or constructive,, that such damages might be incurred.
5. Indemnification. End-User shall indemnify and hold harmless COMTEX and its
information providers against any claim, damages, loss, liability or expense,
including attorneys fees, arising out of End-User's use of the Content in any
way contrary to this Agreement.
6. Beneficiaries of this Agreement. The rights and limitations in this COMTEx
End-User Agreement are for the benefit Of COMTEx and its information providers,
each of which shall have the right to enforce its rights hereunder directly and
on its own behalf.
Confidential Distribution Agreement Page 5 of 5
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Exhibit D - Changes and Other
The parties agree that the following items are supplemental to the terms and
conditions contained within the body of this Agreement.
Critical Information Providers: Comtex recognizes that the Information Providers
PR Newswire and Business Wire are critical to the business model of the
Distributor, and that the withdrawal of either of these Information Providers is
grounds for immediate termination with written notification to Comtex.
Performance Clause: Comtex warrants that it delivers Content on a 240 basis, and
maintains a monthly network up time of 99%. If Comtex should ever fall below
this percentage, then the Distributor may consider it a breach of this
Agreement.
Indemnification by Comtex: Comtex shall indemnify and hold harmless Distributor
from and against any third party losses, expenses, liabilities, damages and
other claims, including reasonable legal fees and expenses, arising out of
Comtex' breach of any provision of this Agreement.
Confidential Distribution Agreement Page 6 of 6
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LICENSE AGREEMENT
This Agreement ("Agreement")is made and entered into April 26,1999 ("Effective
Date") by and between Ethos Corporation d/b/a Stockpoint, a California
corporation, (a wholly owned subsidiary of Neural Applications Corporation, a
Delaware corporation) located at 475 Sansome Street, Suite 810, San Francisco,
CA 94111 ("Stockpoint") and Zeta Corp., located at Suite 216-1628 West I"
Avenue, Vancouver. Bc. V6JIGI ("Client").
1. Content and Services: Stockpoint shall perform such reasonable development
and custornization services required to deliver the content ("Content")
described in Exhibit A ("Content and Delivery') attached hereto.
Stockpoint agrees to meet performance standards set out in EXHIBIT C ("Service
Level").
2. License: Subject to payment under Section 3 and to the other terms of this
Agreement, Stockpoint hereby grants to client a non-exclusive license to display
for the term of this Agreement the Content described in Exhibit A ("Content and
Delivery") on Client's web site for the sole purpose of displaying said Content
to Client's web site users. Client may not distribute, transmit, or in any other
way provide Content to another entity. Nothing in this Agreement is intended nor
shall be interpreted as granting Client a license or other rights in or to, or
to use any trade names, trade or service inarks, copyrights or patents or other
intellectual or other properties A Stockpoint or Neural Applications Corporation
for any purpose unless otherwise provided in this Agreement.
Client agrees to include Stockpoint's copyright and other notices, which appear
on or in the Content and Services, on pages of Client's site that displays
Content.
3. License Fee, Consideration: The license to be provided by Stockpoint will be
provided at the rates or amounts set forth in the Exhibit B ("Fees") attached
hereto. Client shall be responsible for all governmental taxes (including,
without limitation, sales, use, import, export and excise taxes). tariffs,
assessments, duties or levies of a iy kind or nature relating to or arising from
the license of the Content or otherwise from this Agreeme shall be the
responsibility of Client. Client shall reimburse Stockpoint for any mutually
agreed upon expenses curred in performance of the services, including travel and
lodging.
Client agrees that the Stockpoint logo shall be branded on each page of the
Client's site that displays Stockpoint Content, and "mapped" to
http://www.stockpoint.com or another URL designated by Stockpoint. The size and
location or such logo shall be mutually agreed upon by the parties.
4. Except as otherwise specified in Exhibit B ("Fees") attached hereto, all fees
shall be payable by Client on in annual basis within thirty (30) days from the
date of invoice. All delinquent accounts shall be subject to a service charge of
1 1/2% per month of the amount then delinquent.
5. Term and Termination: This Agreernent shall commence on the Effective Date
and shall remain in full force and effect (unless terminated earlier as provided
below) for an initial term of one (1) year. The Agreement shall be automatically
renewable for additional one year periods (collectively. the "Term"), unless a
party gives notice of termination at least sixty (60) days prior to the
expiration of the initial term or any subsequent renewal term.
This Agreement may be terminated by a party for cause immediately by written
notice upon the occurrence of any of the following events:
i) If the other ceases to do business, or otherwise terminates its business
operations; or
ii) If the other shall fail to promptly secure or renew any license,
registration, permit, authorization or approval for the conduct of its business
in the manner contemplated by this Agreement or if any such license,
registration,
<PAGE>
permit, authorization or approval is revoked or suspended and not reinstated
within sixty (60) days; or
iii) If the other materially breaches any material provision of this Agreement
and fails to substantially cure such breach within thirty (30) days of receiving
written notice describing the breach; or
iv) If the other becomes insolvent or seeks protection under any bankruptcy,
receivership, trust deed, creditors arrangement, composition or comparable
proceeding, or if any such proceeding is instituted against the other(and not
dismissed within 90 days).
6. Express Warranty. Stockpoint represents and warrants to Client that for a
period of ninety (90) days from the date of receipt of the goods and services
under this Agreement, the same will be free from defects in material and
workmanship under normal installation, use and service. This warranty does not
include, and Stockpoint disclaims any warranty with respect to, errors in,
damage to or failures, defects or other problems in or with the Content arising
in any way from (i) fire; (ii) flood., lightning or other acts of God or other
force majeure; (iii) accident or a computer virus; (iv) misuse or negligence;
(v) improper handling or operation; (vi) repair, maintenance, alteration,
modification, customization or tampering of or by any person or other entity
other than Stockpoint; (vii) any Hardware or other hardware or any external
electrical work; (viii) failure to use, maintain or operate the same as provided
or in accordance with any documentation provided; (ix) any software not provided
to Stockpoint or any interfaces of the same with any other software; or (x)
ordinary wear and tear or depreciation arising from lapse of time,
If the goods or services should fail to confirm to the above warranty during the
warranty period and subject to the conditions below, Stockpoinit shall at its
option either (i) refund to Client the fee(s), in which event this Agreement
shall be deemed teriminated and Stockpoint shall have no further obligation or
liability to Client whatsoever; (ii) bring services into compliance with this
Agreement and repair or replace any good and materials.
In addition to any contingency set forth above, the above warranty is contingent
upon Client notifying Stockpoint in writing of any alleged breach of said
warranty within ten (10) days of the date on which Client discovers such breach
and in all events within the Warranty Period.
7. LIMITATION OF EXPRESS WARRANTIES: THE WARRANTIES SET FORTH IN PARAGRAPH 6
ABOVE ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED. WHICH ARE HEREBY
DISCLAIMED AND EXCLUDED BY STOCKPOINT, INCLUDING WITHOUT LIMITATION ANY WARRANTY
OF MERCHANTIBTLITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE AND ALL
OBILIGATIONS OR LIABILITIES ON THE PART OF STOCKPOINT FOR DAMAGES ARISING OUT OF
OR IN CONNECTION WITH THE USE, FUNCTIONALITY, REPAIR OR PERFORMANCF OF THE
CONTENT AND SERVICES.
8. LIMITATION OF REMEDIES: STOCKPOINT SHALL NOT BE LIABLE FOR ANY DIRECT,
SPECIA1 INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER ARISING OUT OF OR
INCLUDING, BUT WITHOUT LIMITATION, DAMAGES FOR LOST PROFITS, BUSINESS
INTERUPTION, LOSS OF BUSINESS INFORMATION OR INABILITY TO USE THE SOFTWARE, EVEN
IF STOCKPOINT WAS ADVISED OF THE POSSIBILITY OF DAMAGES.
9. Indemnification a. Each party ("Provider") will defend and indemnify and hold
harmless the other party ("Recipient") against all loses related to, resulting
from, or arising out of any claim that any information, design, specification,
instruction, software, data or material furnished by the Provider ("Material")
and used by the Recipient for the Services infringes a United States copyright
or patent provided that: (a) the Recipient notifies the Provider in writing
within thirty (30) days of the claim, (b) the Provider has sole control of the
defense and all related settlement negotiations; and (c) the Recipient provides
the Provider with the assistance, information, and authority reasonably
necessary to perform the above; reasonable out-of-pocket expenses incuded by the
Recipient in providing such assistance will be reimbursed by the Provider.
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b. The Provider shall have no liability for any claim of infringement resulting
from: (a) the Recipient's use of a superseded or altered release of some or all
of the Material if infringement would have been avoided by the use of subsequent
unaltered release of the Material which is provided to the Recipient; or (b) any
information, design, specification, instruction, software, data, or material not
furnished by the Provider.
c. In the event that some or all of the Material is held or is believed by the
Provider to infringe, the Provider shall have the option, at its expense, (a) to
modify the Material to be non-infringing; (b) to obtain for the Recipient a
license to continue using the Material, or (c) to require return of the
infringing Material and all rights hereto from the Recipient. If Stockpoint is
the Provider and such return materially effects Client's ability to meet its
obligations under the relevant Work Order, then Client may, at its option and
upon thirty days prior written notice to Stockpoint, terminate the Work Order
and shall be entitled to recover the fees paid by Client for that portion of the
Material prorated over a five year period from the effective date of the
applicable Work Order. If Client is the Provider and such return materially
effects Stockpoint's ability to meet its obligations under the relevant Work
Order, then Stockpoint may, at its option and upon thirty days prior written
notice to Client, terminate the Work Order and Client shall pay Stockpoint for
the Services rendered through the date of termination on a T&M or percent of
completion basis as applicable.
10. Proprietary Rights. Other than the license herein granted, all right, title
and interest in and to the Content, its enhancements, modifications, or
alterations are the property of Stockpoint or its providers. Nothing herein
shall be construed to otherwise give the Client or its end-users any proprietary
rights, thereto.
11. Confidential Information. Each party agrees to keep confidential and not
disclose or use except in performance of its obligations under this Agreement,
confidential or proprietary information related to the other party's technology
or business that it learns in connection with this Agreement and any other
information received from the other provided that such other information or
material is clearly marked confidential (or preceded by a statement that such
information is confidential, if provided in oral form, which statement must be
confirmed in writing; all of the foregoing, "Confidential Information").
"Confidential Information" shall not include information (i) already lawfully
known to or independently developed by the receiving party without access to or
use of the other party's Confidential Information, (ii) disclosed in published
materials, (iii) generally known to the public, (iv) lawfully obtained from any
third party, or (v) required to be disclosed by law.
12. Miscellaneous (a) Relationship. Stockpoint is an independent contractor;
nothing in this Agreement shall be construed to create a partership, joint
venture, or agency relationship between the parties. (b) Ownership. Client
agrees that the Content is the sole and exclusive property of Stockpoint and/or
its licensors and independent third party information and content providers and
agree not to infringe or violate its or their copyrights and other proprietary
rights therein. Ownership of all copyrights and other proprietary rights in the
Services is retained by Stockpoint and its licensors and information and content
providers. Except as expressly provided herein, Stockpoint does not convey and
Client does not obtain any right in the Content or any data or materials
utilized or provided by Stockpoint in connection with the Content and Services.
All rights not granted hereunder are expressly reserved to Stockpoint and its
licensors and information and content providers.
(c) Promotion. The parties agree that each may include the other in standard
marketing material and in press releases, and other form of promotion with prior
approval from the other party. Neither party shall otherwise disclose any
information relating to the existence or terms of this Agreement.
(d) Laws, Regulations and Exchange Rules. Both parties agree to comply with
applicable laws and regulations, and the rules of applicable exchanges and third
party data providers. Client acknowledges, and agrees that Stockpoint agreements
with such exchanges and third party data providers may require, among other
things, that data and information be formatted or presented differently, that
certain agreements and/or disclaimers be in
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<PAGE>
place with end users, and that the exchanges may cancel or withdraw certain
information or data in their sole discretion. In addition, Client acknowledges
that Stockpoint is bound by its agreements with exchanges and third party data
providers, and to the extent that exchanges and/or third party data providers
make changes to the format or presentation of data. The Client's Site will be
affected to the same extent.
(e) Financial Exchange Agreements. Client shall obtain any necessary financial
exchange agreements from the principal stock exchanges in order to allow
Stockpoint to perform its obligations hereunder.
(f) Third Party Providers. It is expressly understood that Stockpoint may at its
sole discretion, substitute any third party data provider for one of comparable
quality during the Term of this Agreement.
(g) Assignment. Neither party may assign or otherwise transfer its rights under
this Agreement, except among the corporations, without the prior written consent
of the other, which consent shall not be unreasonably withheld.
(h) Notices. permitted or required to be given under the terms of this Agreement
shall be deemed sufficient if given by (a) registered or certified mail, postage
prepaid, return receipt requested or (b) private courier service, addressed to
the respective parties at the addresses shown below their signatures to this
Agreement, or such other addresses as they may from time to time designate.
notices shall be effective upon receipt by the party to which notice is given.
(i) Arbitration. Any claim, dispute, controversy or other matter in question
with regard to this Agreement shall exclusively be subject to final binding
arbitration in accordance with the commercial arbitration rules and regulatiors
of the American Arbitration Association (AAA). The parties or the arbitrators,
as appropriate, shall undertake the duties of the AAA under the AAA rules. All
arbitration shall be conducted in the city of Seattle, Washington.
(J) Attorney's fees. The unsuccessful party in any action or proceeding shall
pay for all costs, expenses and reasonable attomeys' fees incurred by the
prevailing party or its agents or both in enforcing the terms and conditions of
the Agreement. The term "prevailing party" as used herein shall include without
limitation a party who utilizes legal counsel and brings any action against the
other party by reason of the other party's breach or default and obtains
substantially the relief sought, whether by compromise, settlement or judgment.
(k) Severability. If any provision of this Agreement is found unenforceable,
such invalidity or unenforceability shall not invalidate any other provision of
this Agreement.
(l) Counterparts. This Agreement may be executed in two or more counterparts,
and each such counterpart shall be deemed an original thereof.
(m) Waiver. No failure of either party to take any action or assert any right
hereunder shall be deemed to be a waiver or such right in the event of the
continuation or repetition of the circumstances giving rise to such rights.
(n) Governing law. This Agreement shall be governed by the laws of the state of
California.
(o) Entire Agreement Amendment. This Agreement, including exhibits hereto,
constitutes the entire Agreement of the parties. This Agreement may not be
modified, amended, rescinded. canceled or waived, in whole or on part, except by
written amendments signed by both parties hereto.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
STOCKPOINT CLIENT
Signature: Signature: /s/ Harmel Rayat
--------------------- ---------------------
Harmel Rayat
Name: Name: /s/ Harmel Rayat
--------------------- -------------------------
Harmel Rayat
Title: --------------------- Title: Director
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EXHIBIT A
"Content and Delivery"
I. Content
Stockpoint will provide the financial content listed below. The financial
content will be displayed within a customized, co-branded web site hosted on
Stockpoint's servers. The web site will retain the "look and feel" of the
client's web site including logos, navigation and background color.
a. Stock Quote Server
This custom-tailored server displays detailed stock quote information,
including current price quotes (20 minute delay), open, change, high, low,
earnings per share, volume, shares outstanding, market capitalization, P/E
ratio, and industry sector. Users can access quote information for companies
listed on the NYSE, NASDAQ/Amex (to include OTC: BB) and Canadian Exchanges. A
ticker look-up feature is included.
A second custom tailored stock quote server will provide current price
quotes (20 minute delay) for up to five symbols that may be listed on the NYSE.
NASDAQ/Amex (to include OTC:BB) and Canadian Exchanges. Quote server my be
accessed by Client's servers at a rate not to exceed 5 requests per second for a
sustained period of 15 minutes.
b. Charting
Quick Charts(GIF)
The Quick Charts allow users to select price and volume performance as well
as time resolutions including intraday, 1 week, 1 month 3 months, 6 months, 1
year. 3 years and 5 years on NYSE, NASDAQ/Amex (OTC:BB as available) and
Canadian Exchanges listed issues as well as U.S. retail mutual funds.
Quick Charts also include interactive features such as moving average, and
the ability to plot against other stocks and indexes. Technical indicators can
be added for comparison, which include Bollinger tands, moving averages, moving
average convergence/divergence (MACD), on balance volume, price rate of change,
relative strength, standard deviation and stochastics.
Interactive Charts (Java)
The Interactive Charts include NYSE, NASDAQ/Amex(OTC:BB as available) and
Canadian excbanges listed issues as well as U.S. retail mutual funds. User
selectable time resolutions ranging from 1, 10, and 60 minutes; 52 week daily
functionality accessible via a pull down menu located at the top of the charting
feature. User has the ability to zoom in on date ranges by clicking and dragging
on chart.
Users can add technical indicators, and stocks or indices for comparison on
a chart without refreshing the chart or Web page. Technical indicators include
Bollinger bands, moving averages, moving averages conv/div., on balance volume,
price rate of change, relative strength, standard deviation, and stochastics.
-5-
<PAGE>
c. Market Watch
By providing the daily top 10 traded US stocks as of intra-day based on a
20 minute delay, users will have a solid resource for tracking the movers and
shakers. Users can access quote information for companies listed on the NYSE,
NASDAQ/Amex (to include OTC: BB) and Canadian Exchanges The categories would be
a) Most active b) Biggest gainers c) Biggest losers
d. StockFinder Pro
Use StockFinder Pro to search multiple data sources of nearly 10,000
publicly traded companies. Stockfinder Pro returns a list of up to one hundred
stocks that match their customized search criteria based on over 26 data fields.
such as price, volume. P/E ratio, four-week price change percentage and industry
sectors, Results are presented in a spreadsheet format. Because StockFinder Pro
is Java-based, users can interact with the results, add customized data fields,
and reorder columns according to your personal preference without conducting
another search
e. Major US Market Indices with Mini Thumb Nail Charts
Selected Market Indices to include: Dow Jones, NASDAQ, S&P 500, and the
Russell 2000. Additional U.S. market indices may also be included as part of the
market update. This shall also include the FTSE, Nikkei, interest rates (3
month, 5 year, 10 year, 30 year), the Japanese Yen, Canadian Dollar, British
Pound and Swiss Franc.
f. SEC Filings
Through a service provided by Edgar Online, users can read the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" except from SEC filings for publicly traded companies.
II. Delivery
o Stockpoint will deliver the customized web site within 5 business days upon
receipt of the executed License Agreement and design templates from Client.
o Stockpoint will host and serve the financial content for Client
o Stockpoint will provide all necessary hardware, bandwidth, and infrastructure
administration
o Stockpoint will notify Client of planned, off-hours maintenance at least 24
hours in advance
-6-
<PAGE>
EXHIBIT B
"Fees"
a. Development Fees
Description Fee
Set-Up Fee $10,000*
* The set-up fee will he waived if this License Agreement is executed by
April 30. 1999.
b. Annual License Fee
Annual License Fee Year One(1) $40,000
C. Maintenance Fees
Maintenance Fees, equal to .005 per page view, will be assessed if the
traffic on the co-branded web pages hosted by Stockpoint exceeds 500,000
page views per month.
d. Payment
License Fees are payable 25% down ($10,000) upon contract execution and the
remaining 75% ($30,O00) payable in quarterly installments from contract
execution.
-7-
<PAGE>
EXHIBIT C
"Service Level"
1. Performance
a) Average 97% uptime during business hours (6:00 A.M. to 3:00 P.M. Pacific
Time). The performance requirements; set forth in this paragraph apply to
Stockpoint's servers and Internet connectivity, and sha11 be measured on a daily
basis.
b) Average 95% up time during non-business hours. The performance
requirements set forth in this paragraph apply to Stockpoint servers mid
Internet connectivity, and shall be measured on a daily basis. The average up
time shall not include any down time for regularly scheduled maintenance.
Scheduled maintenance is defined as maintenance for which 48 hours advance
notice has been given for the required down time.
-8-
<PAGE>
CLANCY AND CO., P.L.L.C.
CERTIFIED PUBLIC ACCOUNTANT 2601 E.THOMAS ROAD PHOENIX, AZ 85016
(602) 266-2646 FAX (602) 224-9496
July 8, 1999
CONSENT OF INDEPENDENT AUDITOR
------------------------------
As the independent auditor for EquityAlert.com, Inc., I hereby consent to the
incorporation by reference in this Form 10SB Statement and any amendments
thereto of my report, relating to the financial statements and financial
statement schedules of EquityAlert.com, Inc. for the years ended December 31,
1998 and 1997 included on Form 10SB and amendments. Reporst are dated January
13, 1999 for the year ended December 31, 1998 and February 5, 1999, both reports
were reissued July 8, 1999.
I further consent to the incorporation of my review report and financial
statements by reference in the Form 10-SB and amendments thereto. These
statements cover the period for June 31, 1999, 1998 and 1997. Report date of
April 1, 1999 and reissued July 8, 1999.
/s/ Clancy and Co., P.L.L.C.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS 12-MOS
<FISCAL-YEAR-END> JUN-30-1999 DEC-31-1998 DEC-31-1997
<PERIOD-END> JUN-30-1999 DEC-31-1998 DEC-31-1997
<CASH> 901,421 3,551 47,069
<SECURITIES> 0 0 0
<RECEIVABLES> 0 100,000 6,744
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 901,421 103,551 53,813
<PP&E> 0 0 0
<DEPRECIATION> 0 0 0
<TOTAL-ASSETS> 901421 103551 55668
<CURRENT-LIABILITIES> 22,059 21,458 19,115
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 414 264 2
<OTHER-SE> 0 0 0
<TOTAL-LIABILITY-AND-EQUITY> 901,421 103,551 55,668
<SALES> 0 0 0
<TOTAL-REVENUES> 0 0 0
<CGS> 0 0 0
<TOTAL-COSTS> 0 0 0
<OTHER-EXPENSES> 41,575 129,461 510,817
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> 0 0 0
<INCOME-TAX> 0 0 0
<INCOME-CONTINUING> 0 0 0
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 13,844 1 422
<EPS-BASIC> 0 0 0
<EPS-DILUTED> 0 0 0
</TABLE>
Offering Memoradum Confidential
Dated January 10, 1997 Copy No. 1
SAN MARINO MINERALS, INC.
(A Florida Corporation)
300,000 Shares
At A Price of $0.25 Per Share
San Marino Minerals, Inc., a Florida corporation, (the Company) is involved
in the exploration and develoment of resource properties, including gold,
silver, base metals, and oil and gas. The Company has no earnings to date, and
in fact has sustained significant losses. There is no assurance that the Company
will be successful or profitable in the future.
The Company's principal place office is located at 353 Sacramento Street,
Suite 600, San Francisco, CA, 94111 and its telephone number is (415) 474-7047.
AN INVESTMENT IN THE COMPANY IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF
RISK. INVESTMENT IN THE SECURITIES OFFERED HEREBY IS SUITABLE ONLY FOR PERSONS
OF SUBSTANTIAL FINANCIAL MEANS WHO CAN AFFORD A TOTAL LOSS OF THEIR INVESTMENT
AND WILL BE SOLD ONLY TO ACCREDITED OR OTHERWISE QUALIFIED INVESTORS. FOR A
DISCUSSION OF THE MATERIAL RISK IN CONNECTION WITH THE PURCHASE OF THE SHARES,
SEE "INVESTMENT RISK CONSIDERATIONS".
THE SECURITIES ARE BEING OFFERED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (The "ACT"), IN RELIANCE UPON THE EXEMPTION
FROM REGISTRATION AFFORDED BY SECTIONS 4 (2) AND 3 (b) OF The SECURITIES ACT AND
REGULATION D PROMULGATED THEREUNDER.
THIS MEMORANDUM HAS NOT BEEN REVIEWED OR APPROVED OR DISAPPROVED NOR HAS
THE ACCURACY OR ADEQUACY OF THE INFORMATION SET FORTH HEREIN BEEN PASSED UPON BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES ADMINISTRATOR.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS OFFERING IS BEING
MADE PURSUANT TO THE EXEMPTIONS AFFORDED BY SECTIONS 4(2) or 3(b) OF THE
SECURITIES ACT OF 1933 AND RULE 504 OF REGULATION D PROMULGATED THEREUNDER AND
STATE SMALL CORPORATE OFFERING REGISTRATION PROVISIONS. PURSUANT TO RULE 504,
THE SHARES SOLD HEREBY WILL NOT BE SUBJECT TO ANY LIMITATIONS ON RESALE THEREOF
UNDER FEDERAL LAW. THE SHARES MAY, HOWEVER, BE SUBJECT TO LIMITATIONS ON THE
OFFER AND SALE AND THE RESALE OF THE SHARES IMPOSED BY THE BLUE SKY LAWS OF
INDIVIDUAL STATES. IN ADDITION, THE COMPANY INTENDS TO FILE THE REQUIRED
DOCUMENTS IN CERTAIN OTHER STATES IDENTIFIED BY MANAGEMENT AS HAVING POSSIBLE
INVESTOR INTEREST AND USE ITS BEST EFFORTS TO QUALIFY THE SHARES FOR SECONDARY
TRADING IN SUCH STATES, THOUGH NO ASSURANCE CAN BE GIVEN THAT IT WILL BE ABLE TO
QUALIFY THE SHARES FOR SECONDARY TRADING IN ANY SUCH STATES IN WHICH IT SUBMITS
SUCH APPLICATIONS AND DOCUMENTS. AN INABILITY TO QUALIFY THE SHARES FOR
SECONDARY TRADING WILL CREATE SUBSTANTIAL RESTRICTION ON THE TRANSFERABILITY OF
SUCH SHARES WHICH MAY NEGATE THE BENEFIT OF THE EXEMPTION PROVIDED BY RULE 504
OF REGULATION D. SEE "RISK FACTORS." THE COMPANY WILL USE ITS BEST EFFORTS TO
CAUSE THE SHARES TO BE LISTED ON THE ELECTRONIC BULLETIN BOARD OPERATED BY THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AS A MARKET IN WHICH THEY MAY
BE TRADED. THERE IS NO ASSURANCE THAT SUCH LISTING WILL BE OBTAINED OR THAT IF A
LISTING IS OBTAINED THAT ANY MARKET FOR THE SHARES WILL DEVELOP, OR IF
DEVELOPED, THAT IT WILL BE SUSTAINED.
---------------
Subscription Price Per Share Commissions(l) Proceeds to the Company
$0.25 $-0- $75,000
(1) The Shares are being sold by the Company's Directors and no commissions
will be paid in connection with the Offering.
San Marino Minerals, Inc.
600 - 353 Sacramento Street,
San Francisco, California, 92504
415-474-7047
<PAGE>
OFFERING MEMORANDUM
SAN MARINO MINERALS, INC.
(A Florida Corporation)
Offering Memorandum Dated January 10, 1997
300,000 Shares
San Marino Minerals, Inc. (the "Company"), a Florida corporation, is offering on
a "best efforts, no minimum basis" up to a maximum of 300,000 shares of common
stock ("Common Stock"), $.001 par value, at $0.25 per Share. Since there is no
minimum, no proceeds will be held in escrow account and all funds will be
immediately available to the Company.
The Company intends to apply for inclusion of the Common Stock on the Over the
Counter Electronic Bulletin Board. There can be no assurances that an active
trading market will develop, even if the securities are accepted for quotation.
Additionally, even if the Company's securities are accepted for quotation and
active trading develops, the Company is still required to maintain certain
minimum criteria established by NASDAQ, of which there can be no assurance that
the Company will be able to continue to fulfill such criteria.
Prior to this offering, there has been no public market for the common stock of
the Company. The price of the Shares offered hereby was arbitrarily determined
by the Company and does not bear any relationship to the Company's assets, book
value, net worth, results of operations or any other recognized criteria of
value. For additional information regarding the factors considered in
determining the offering price of the Shares, see "Risk Factors - Arbitrary
Offering Price", "Description of Securities".
The Company does not presently file reports or other information with the
Securities and Exchange Commission ("Commission"). However, following completion
of this offering, the Company intends to furnish its security holders with
annual reports containing audited financial statements and such interim reports,
in each case as it may determine to furnish or as may be required by law.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OF
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
1
<PAGE>
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE, ACCEPTANCE OR
AN OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFER,
WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER, IN WHOLE OR
IN PART, FOR THE PURCHASE OF ANY OF THE SECURITIES OFFERED HEREBY.
This offering involves special risks concerning the Company (see "Risk
Factors"). Investors should carefully review the entire Memorandum and should
not invest any funds in this Offering unless they can afford to lose their
entire investment. In making an investment decision, investors must rely on
their own examination of the issuer and the terms of the Offering, including the
merit and risks involved.
OFFERING SUMMARY
The following summary information is qualified in its entirety by the detailed
information and financial statements and notes thereto appearing elsewhere in
this Memorandum.
The Company is involved in the exploration and development of resource
properties, including gold, silver, base metals, and oil and gas. The Company
was incorporated in the State of Florida and its principal executive office is
located at 353 Sacramento Street, Suite 600, San Francisco, California, 94111
(telephone: 415-474-7047).
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.
ONLY THOSE PERSONS ABLE TO LOSE THEIR ENTIRE INVESTMENT SHOULD PURCHASE THESE
SECURITIES. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT DECISION,
SHOULD CAREFULLY READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER MATTERS
REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS:
Risk Factors Relating to the Business of the Company
- - ----------------------------------------------------
START-UP OR DEVELOPMENT STAGE COMPANY -- The Company has had no operations since
its organization and is a "start-up" or "development stage" company. No
assurances can be given that the Company will be able to compete with other
companies in its industry. The purchase of the securities offered hereby must be
regarded as the placing of funds at a high risk in a new or "start-up" venture
with all the unforeseen costs, expenses, problems, and difficulties to which
such ventures are subject. See "Use of Proceeds to Issuer" and "Description of
Business."
NO ASSURANCE OF PROFITABILITY -- To date, the Company has not generated any
revenues from operations. The Company does not anticipate any significant
revenues in the near future. The Company's ability to successfully implement its
business plan is dependent on the completion of this Offering. There can be no
assurance that the Company will be able to develop into a successful or
profitable business.
2
<PAGE>
NO ASSURANCE OF PAYMENT OF DIVIDENDS - No assurances can be made that the future
operations of the Company will result in additional revenues or will be
profitable. Should the operations of the Company become profitable, it is likely
that the Company would retain much or all of its earnings in order to finance
future growth and expansion. Therefore, the Company does not presently intend to
pay dividends, and it is not likely that any dividends will be paid In the
foreseeable future. See "Dividend Policy."
POSSIBLE NEED FOR ADDITIONAL FINANCING -- The Company intends to fund its
operations and other capital needs for the next 12 months substantially from the
proceeds of this Offering, but there can be no assurance that such funds will be
sufficient for these purposes. The Company may require additional amounts of
capital for property acquisitions, exploration and development costs, operating
expenses and working capital. The Company has made no arrangements to obtain
future additional financing, and if required, there can be no assurance that
such financing will be available, or that such financing will be available on
acceptable terms. See "Use of Proceeds."
DEPENDENCE ON MANAGEMENT -- The Company's success is principally dependent on
its current management personnel for the operation of its business.
BROAD DISCRETION IN APPLICATION OF PROCEEDS -- The management of the Company has
broad discretion to adjust the application and allocation of the net proceeds of
this offering, in order to address changed circumstances and opportunities. As a
result of the foregoing, the success of the Company will be substantially
dependent upon the discretion and judgment of the management of the Company with
respect to the application and allocation of the net proceeds hereof. Pending
use of such proceeds, the net proceeds of this offering will be invested by the
Company in temporary, short-term interest-bearing obligations. See "Use of
Proceeds."
ARBITRAYY OFFERING PRICE -- There has been no prior public market for the
Company's securities. The price to the public of the Shares offered hereby has
been arbitrarily determined by the Company and bears no relationship to the
Company's earnings, book value or any other recognized criteria of value.
IMMEDIATE AND SUBSTANTIAL DILUTION -- An investor in this offering will
experience immediate and substantial dilution.
LACK OF PRIOR MARKETFOR SECURITIES OF THE COMPANY -- No prior market has existed
for the securities being offered hereby and no assurance can be given that a
market will develop subsequent to this offering.
NO ESCROW OF INVESTORS FUNDS -- This offering is being made on a "best efforts,
no minimum basis." As such, all the funds from this Offering will be immediately
available to the Company.
USE OF PROCEEDS
3
<PAGE>
The proceeds from this Offering will be used for the acquisition, exploration
and development of resource properties and for working capital.
DIVIDEND POLICY
Holders of the Company's Common Stock are entitled to dividends when, as and if
declared by the Board of Directors out of funds legally available therefor. The
Company does not anticipate the declaration or payment of any dividends in the
foreseeable future. The Company intends to retain earnings, if any, to finance
the development and expansion of its business. Future dividend policy will be
subject to the discretion of the Board of Directors and will be contingent upon
future earnings, if any, the Company's financial condition, capital
requirements, general business conditions and other factors. Therefore, there
can be no assurance that any dividends of any kind will ever be paid.
THE COMPANY
The Company is involved in the exploration and development of mineral resource
properties, including but not limited to base metals, gold, silver, oil and gas.
There is no assurance, however, that the Company will be successful in
discovering and/or developing a resource property with economic reserves, or
even if it does, that the Company will be profitable.
Management
- - ----------
The following sets forth the names of the Company's officers and directors:
Ken Finkelstein, is a Director to the Company and its President. Following his
graduation from law school in 1990, Mr. Finkelstein gained adniission to the Bar
in the Provinces of Ontario and British Columbia, as well as the states of New
York and Washington. Mr. Finkelstein maintains offices in New York, N.Y. and
Vancouver. B.C., where he is involved with the practice of law and pursuit of
business opportunities.
Frank Mueller, is a Director of the Company. Mr. Mueller has over 17 years of
experience as an entrepreneur and a partner in Pioneer Design Corporation, a
development company that designs and builds mult-unit residential and commercial
developments. Mr. Mueller's has extensive experience in finance and personnel
management skills.
Jasbinder Chohan, is a Director and Vice President of the Company. Ms. Chohan
has extensive sales experience and is experienced in all aspects of managing a
small business, including product development, marketing, payroll, employee
relations, customer service, and accounting.
EXECUTIVE COMPENSATION
Since the Company was recently incorporated, it has no historical information
with respect to executive compensation. At the conclusion of the Offering, the
Company does not intend to
4
<PAGE>
compensate its officers for services to the Company from the proceeds of this
Offering and will only do so when and if the Company generates profits.
Compensation of Directors
- - -------------------------
Directors are not paid fees for their services nor reimbursed for expenses of
attending board meetings.
DESCRIPTION OF SECURITIES
Shares
- - ------
The Company is offering hereby a "best efforts, no minimum basis" up to 300,000
shares of Common Stock at $0.25 per Share.
Common Stock
- - ------------
The authorized capital stock of the Company consists of 100,000,000 shares of
Common Stock, $.001 par value. Holders of the Common Stock do not have
preemptive rights to purchase additional shares of Common Stock or other
subscription' rights. The Common Stock carries no conversion rights and is not
subject to redemption or to any sinking fund provisions. All shares of Common
Stock are entitled to share equally in dividends from sources legally available
therefor when, as and if declared by the Board of Directors and, upon
liquidation or dissolution of the Company, whether voluntary or involuntary, to
share equally in the assets of the Company available for distribution to
stockholders. All outstanding shares of Common Stock are validly authorized and
issued, fully paid and nonassessable, and all shares to be sold and issued as
contemplated hereby, will be validly authorized and issued, fully paid and
nonassessable. The Board of Directors is authorized to issue additional shares
of Common Stock, not to exceed the amount authorized by the Company's
Certificate of Incorporation, on such terms and conditions and for such
consideration as the Board may deem appropriate without further stockholder
action. The above description concerning the Common Stock of the Company does
not purport to be complete. Reference is made to the Company's Certificate of
Incorporation and Bylaws which are available for inspection upon proper notice
at the Company's offices, as well as to the applicable statutes of the State of
Florida for a more complete description concerning the rights and liabilities of
stockholders.
Prior to this offering, there has been no market for the Common Stock of the
Company, and no predictions can be made of the effect, if any, that market sales
of shares or the availability of shares for sale will have on the market price
prevailing from time to time. Nevertheless, sales of significant amounts of the
Common Stock of the Company in the public market may adversely affect prevailing
market prices, and may impair the Company's ability to raise capital at that
time through the sale of its equity securities.
5
<PAGE>
Each holder of Common Stock is entitled to one vote per share on all matters on
which such stockholders are entitled to vote. Since the shares of Common Stock
do not have cumulative voting rights, the holders of more than 50 percent of the
shares voting for the election of directors can elect all the directors if they
choose to do so and, in such event, the holders of the remaining shares will not
be able to elect any person to the Board of Directors.
PLAN OF DISTRIBUTION
The Company has no underwriter for this Offering. The Offering is therefore a
self-underwriting. The Shares will be offered by the Company at the offering
price of $0.25 per Share.
Price of the Offering.
- - ----------------------
There is no, and never has been, a market for the Shares, and there is no
guaranty that a market will ever develop for the Company's shares. Consequently,
the offering price has been determined by the Company. Among other factors
considered in such determination were estimates of business potential for the
Company, the Company's financial condition, an assessment of the Company's
management and the general condition of the securities market at the time of
this Offering. However, such price does not necessarily bear any relationship to
the assets, income or net worth of the Company.
The offering price should not be considered an indication of the actual value of
the Shares. Such price is subject to change as a result of market conditions and
other factors, and no assurance can be given that the Shares can be resold at
the Offering Price.
There can be no assurance that an active trading market will develop upon
completion of this Offering, or if such market develops, that it will continue.
Consequently, purchasers of the Shares offered hereby may not find a ready
market for Shares.
ADDITIONAL INFORMATION
Each investor warrants and represents to the Company that, prior to making an
investment in the Company, that he has had the opportunity to inspect the books
and records of the Company and that he has had the opportunity to make inquiries
to the officers and directors of the Company and further that he has been
provided full access to such information.
6
<PAGE>
INVESTOR SUITABILITY STANDARDS AND
INVESTMENT RESTRICTIONS
Suitability
Shares will be offered and sold pursuant an exemption under the Securities Act,
and exemptions under applicable state securities and Blue Sky laws. There are
different standards under these federal and state exemptions which must be met
by prospective investors in the Company.
The Company will sell Shares only to those Investors it reasonably believes meet
certain suitability requirements described below.
Each prospective Investor must complete a Confidential Purchaser questionnaire
and each Purchaser Representative, if any, must complete a Purchaser
Representative Questionnaire.
EACH INVESTOR MUST BE RESPONSIBLE FOR DETERMINING THAT IT IS PERMITTED TO INVEST
IN THE COMPANY, THAT ALL APPROPRIATE ACTIONS TO AUTHORIZE SUCH AN INVESTMENT
HAVE BEEN TAKEN, AND THAT ANY REQUIREMENTS THAT ITS INVESTMENTS BE DIVERSIFIED
OR SUFFICIENTLY LIQUID HAVE BEEN MET.
An investor will qualify as an accredited Investor if it falls within any one of
the following categories at the time of the sale of the Shares to that Investor:
( 1) A bank as defined in Section 3 (a) (2) of the Securities Act, or a savings
and loan association or other institution as defined in Section 3 (a) (5) (A) of
the Securities Act, whether acting in its individual or fiduciary capacity; a
broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934; an insurance company as defined in Section 2(13) of the Securities
Act; an investment company registered under the Investment Company Act of 1940
or a business development company as defined in Section 2 (a) (48) of that Act;
a Small Business Investment Company licensed by the United States Small Business
Administration under Section 301 (c) or (d) of the Small Business Investment Act
of 1958; a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 19 74, if the investment decision is
made by a plan fiduciary, as defined in Section 3 (2 1) of that Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if aself-directed plan with the investment decisions made
solely by persons that are accredited investors;
7
<PAGE>
(2) A private business development company as defined in Section 202 (a) (22) of
the Investment Advisers Act of 1940;
(3) An organization described in Section 501 (c) (3) of the Internal Revenue
Code with total assets in excess of $5,000,000;
(4) A director or executive officer of the Company.
(5) A natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of such person's purchase of the Shares exceeds $
1,000,000;
(6) A natural person who had an individual income in excess of $200,000 in each
of the two most recent years or joint income with that person's spouse in excess
of $300,000 in each of those years and has a reasonable expectation of reaching
the same income level in the current year;
(7) A trust with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person as describe in Rule 506(b)(2)(ii) of Regulation D; and
(8) An entity in which all of the equity owners are accredited investors (as
defined above).
As used in this Memorandum, the term "net worth" means the excess of total
assets over total liabilities. In computing net worth for the purpose of (5)
above, the principal residence of the investor must be valued at cost, including
cost of improvements, or at recently appraised value by an institutional lender
making a secured loan, net of encumbrances. In determining income an investor
should add to the investor's adjusted gross income any amounts attributable to
tax exempt income received, losses claimed as a limited partner in any limited
partnership, deductions claimed for depletion, contributions to an IRA or KEOGH
retirement plan, alimony payments, and any amount by which income form long-term
capital gains has been reduced in arriving at adjusted gross income.
In order to meet the conditions for exemption from the registration requirements
under the securities laws of certain jurisdictions, investors who are residents
of such jurisdiction may be required to meet additional suitability
requirements.
An Investor that does not qualify as an accredited Investor is a nonaccredited
Investor and may acquire Shares only if:
(1) The Investor is knowledgeable and experienced with respect to investments in
limited partnerships either alone or with its Purchaser Representative, if any;
and
(2) The Investor has been provided access to all relevant documents it desires
or needs; and
(3) The Investor is aware of its limited ability to sell and/or transfer its
Shares in the Company; and
8
<PAGE>
(4) The Investor can bear the economic risk (including loss of the entire
investment) without impairing its ability to provide for its financial needs and
contingencies in the same manner as it was prior to making Such investment.
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION TO DETERMINE IF A
POTENTIAL INVESTOR MEETS OR FAILS TO MEET THE SUITABILITY STANDARDS SET FORTH IN
THIS SECTION.
Additional Suitability Requirements for Benefit Plan Investor:
- - --------------------------------------------------------------
In addition to the foregoing suitability standards generally applicable to all
Investors, the Employee Retirement Income Security Act of 1934, as amended
("ERISA"), and the regulations promulgated thereunder by the Department of Labor
impose certain additional suitability standards for Investors that are qualified
pension, profit-sharing or stock bonus plans ("Benefit Plan Investor"). In
considering the purchase of Shares, a fiduciary with respect to a prospective
Benefit Plan Investor must consider whether an investment in the Shares will
satisfy the prudence requirement of Section 404(a)(1)(B) of ERISA, since there
is not expected to be any market created in wl-dch to sell or otherwise dispose
of the Shares. In addition, the fiduciary must consider whether the investment
in Shares will satisfy the diversification requirement of Section 404(a)(1)(C)
of ERISA.
Restrictions on Transfer or Resale of Shares
- - --------------------------------------------
The Availability of Federal and state exemptions and the legality of the offers
and sales of the Shares are conditioned upon, among other things, the fact that
the purchase of Shares by all Investors are for investment purposes only and not
with a view to resale or distribution. Accordingly, each prospective Investor
will be required to represent in the Subscription Agreement that it is
purchasing the Shares for its own account and for the purpose of investment
only, not with a view to, or in accordance with, the distribution of sale of the
Shares and that it will not sell, pledge, assign or transfer or offer to sell,
pledge, assign or transfer any of its Shares without an effective registration
statement under the Securities Act, or an exemption there from and an opinion of
counsel acceptable to the Company that registration under the Securities Act is
not required and that the transaction complies with all other applicable Federal
and state securities or Blue Sky laws.
9
SAN MARINO MINERALS, INC.
(A Florida Corporation)
300,000 Shares
at a Price of $0.25 Per Share
Subscription Documents
January 10, 1997
<PAGE>
INSTRUCTION FOR COMPLETION:
---------------------------
In connection with your subscription for Shares of San Marino Minerals, Inc.
(the "Company'), enclosed herewith are the following documents which must be
properly and fully completed and signed:
1 . INVESTMENT AGREEMENT. Fully completed and signed. Please make your check
payable to San Marino Minerals, Inc. (Note to partnerships who wish to
subscribe: each general partner of the partnership must fully complete and sign
the Investment Agreement).
2. CONFIDENTIAL PURCHASER QUESTIONNAIRE. Fully completed and sign. (Note to
partnerships who wish to subscribe: each general partner of the partnership must
fully complete and sign the Investment Agreement).
3. PURCHASER REPRESENTATIVE QUESTIONNAIRE. To be completed and signed by your
Purchaser Representative only if you have elected to use a Purchaser
Representative. If you have elected not to use a Purchaser Representative, you
must so state in the Purchaser Questionnaire.
4. ACKNOWLEDGMENT OF USE OF PURCHASER REPRESENTATIVE. To be completed and
executed by the Investor only if an election to use a Purchaser Representative
has been made.
NOTES TO SUBSCRIBERS:
(a) Please indicate on the Subscription Agreement and the Confidential Purchaser
Questionnaire how the Units are to be held (e.g. joint tenants with rights of
survivorship, tenants by the entireties, etc.)
(b) Please return Subscription Documents and checks to the Company at 353
Sacramento Street, Suite 600, San Francisco, California, 94111. Checks should be
made payable to the Company.
(c) Additional copies of the required forms are available from the Company at
353 Sacramento Street, Suite 600, San Francisco, California, 94111 or by calling
Mr. Ken Finkelstein, the Company's president at (415) 474-7047.
i
<PAGE>
INVESTMENT SUBSCRIPTION AGREEMENT
To: San Marino Minerals, Inc.
353 Sacramento Street, Suite 600,
San Francisco, California, 94111
Gentlemen:
You have informed me that the Company is offering up to 300,000 shares of the
Company's common stock at a price of $0.25 per share.
1. SUBSCRIPTION. Subject to the terms and conditions of this Subscription
Agreement (the "Agreement"), the undersigned hereby tenders this subscription,
together with the payment (in cash or by bank check in lawful funds of the
United States) of an amount equal to $0.25 per Share, and the other subscription
documents, all in the forms submitted to the undersigned.
2. ACCEPTANCE OF SUBSCRIPTION: ADOPTION AND APPOINTMENT. It is understood and
agreed that this Agreement is made subject to the following terms and
conditions:
(a) The Company shall have the right to accept or reject subscriptions in any
order it shall determine, in whole or in part, for any reason (or for no
reason).
(b) Investments are not binding on the Company until accepted by the Company.
The Company will refuse any subscription by giving written notice to the
purchaser by personal delivery or first-class mail. In its sole discretion, the
Company may establish a limit on the purchase of Units by a particular
purchaser.
(c) The undersigned hereby intends that his signature hereon shall constitute an
irrevocable subscription to the Company of this Agreement, subject to a three
day right of rescission for Florida residents pursuant to Section 517.061 of the
Florida Securities and Investor Protection Act. Each Florida resident has a
right to withdraw his or her subscription for Units, without any liability
whatsoever, and receive a full refund of all monies paid, within three days
after the execution of this Agreement or payment for the Units has been made,
whichever is later. To accomplish this withdrawal, a subscriber need only send a
letter or telegram to the Company at the address set forth in this Agreement,
indicating his or her intention to withdraw. Such letter or telegram should be
sent and postmarked prior to the end of the aforementioned third day. It is
prudent to send such letter by certified mail, return receipt requested, to
ensure that is received and also to evidence the time when it was mailed. If the
request is made orally (in person or by telephone) to the Company a written
confirmation that the request has been received should be requested.
Upon satisfaction of the all the conditions referred to herein, copies of this
Agreement, duly executed by the Company, will be delivered to the undersigned.
1
<PAGE>
3. REPRESENTATIONS AND WARRANTIES OF THE UNDERSIGNED. The undersigned hereby
represents and warrants to the Company as follows:
(a) The undersigned (1) has adequate means of providing for his current needs
and possible personal contingencies, and he has no need for liquidity of his
investment in the Company; (ii) is an Accredited Investor, as defined below, or
has the net worth sufficient to bear the risk of losing his entire investment;
and (iii) has, alone or together with his Purchaser Representative (as
hereinafter defined), such knowledge and experience in financial matters that
the undersigned is capable of evaluating the relative risks and merits of this
investment.
"Accredited Investors" include: (I) accredited investors as defined in
Regulation D under the Securities Act of 1933, as amended ("Reg. D") i.e., (a)
$1,000,000 in net worth (including spouse) or (b) $200,000 in annual income for
the last two years and projected for the current year; and (il) the Company or
affiliates of the Company.
"Non-Accredited Investors" are all subscribers who are not "Accredited
Investors."
All investors must have either a preexisting personal or business relationship
with the Company or any of its affiliates, or by reason of their business or
financial experience (or the business or financial experience of their
unaffiliated professional advisors) would reasonably be assumed to have the
capacity to protect their own interests in connection with this investment. Each
subscriber must represent that he is purchasing for his own account not with a
view to or for resale in connection with any distribution of the Units.
(b) The address set forth in his Purchaser Questionnaire is his true and correct
residence, and he has no present intention of becoming a resident of any other
state or jurisdiction.
(c) The undersigned acknowledges that if a "Purchaser Representative", as
defined in Regulation D, has been utilized by the undersigned, (1) the
undersigned has completed and executed the Acknowledgment of Use of Purchaser
Representative; (ii) in evaluating his investment as contemplated hereby, the
undersigned has been advised by his Purchaser Representative as to the merits
and risks of the investment in general and the suitability of the investment for
the undersigned in particular; and (ii) the undersigned's Purchaser
Representative has completed and executed the Purchaser Representative
Questionnaire.
(d) The undersigned has received and read or reviewed with his Purchaser
Representative, if any, and represents he is familiar with this Agreement, the
other Subscription Documents and the Offering Memorandum accompanying these
documents. The undersigned confirms that all documents, records and books
pertaining to the investment in the Company and requested by the undersigned or
his Purchaser Representative have been made available or have been delivered to
the undersigned and/or the undersigned's Purchaser Representative.
(e) The undersigned and/or his Purchaser Representative have had an opportunity
to ask questions of and receive answers from the Company or a person or persons
acting on its behalf,
2
<PAGE>
concerning the terms and conditions of this investment and the financial
condition, operations and prospects of the Company.
(f) The undersigned understands that the Units have not been registered under
the Securities Act of 1933, as amended (the "Securities Act") or any state
securities laws and are instead being offered and sold in reliance on exemptions
from registration; and the undersigned further understands that he is purchasing
an interest in a Company without being furnished any offering literature or
prospectus other than the material furnished hereby.
(g) The Units for which the undersigned hereby subscribed are being acquired
solely for his own account, and are not being purchased with a view to or for
the resale, distribution, subdivision, or fractionalization hereof. He has no
present plans to enter into any such contract, undertaking, agreement or
arrangement. In order to induce the Company to sell and issue the Units
subscribed for hereby to the undersigned, it is agreed that the Company will
have no obligation to recognize the ownership, beneficial or otherwise, of such
Units by anyone but the undersigned.
(h) The undersigned has received, completed and returned to the Company the
Purchaser Questionnaire relating to his general ability to bear the risks of an
investment in the Company and his suitability as an investor in a private
offering; and the undersigned hereby affirms the correctness of his answers to
such Confidential Purchaser Questionnaire and all other written or oral
information concerning the undersigned's suitability provided to the Company by,
or on behalf of, the undersigned.
(1) The person, if any, executing the Purchaser Representative Questionnaire, a
copy of which has been received by the undersigned, is acting and is hereby
designated to act as the undersigned's Purchaser Representative in connection
with the offer and sale of the Units to the undersigned. This designation of a
Purchaser Representative was made with the knowledge of the representations and
disclosures made in such Purchaser Representative Questionnaire and other
Subscription Documents.
(j) The undersigned acknowledges and is aware of the following:
(i) That there are substantial restrictions on the transferability of the Units
and the Units will not be, and investors in the Company have no rights to
require that, the Units be registered under the Securities act; the undersigned
may not be able to avail himself of certain of the provisions of Rule 144
adopted by the Securities and Exchange Commission under the Securities Act with
respect to the resale of the Units and, accordingly, the undersigned may be
required to hold the Units for a substantial period of time and it may not be
possible for the undersigned to liquidate his investment in the Company.
(ii) That no federal or state agency has made any finding or determination as to
the fairness of the offering of Units for investment or any recommendation or
endorsement of the Units.
(1) The approximate or exact length of time that he will be required to remain
as owner of the
3
<PAGE>
Units.
(2) The prior performance on the part of the Company or any Affiliate (as
defined in Rule 405 under the Securities Act), or its associates, agents, or
employees or of any other person, will in any way indicate the predictable
results of the ownership of the Units or of the overall Company.
(3) Subscriptions will be accepted in the order in which they are received.
(iii) That the Company shall incur certain costs and expenses and undertake
other actions in reliance upon the irrevocability of the subscription (following
the three day rescission period described in Paragraph 2(c) of this Agreement)
for the Units made hereunder.
The foregoing representations and warranties are true and accurate as of the
date of delivery of the Funds to the Company and shall survive such delivery.
If, in any respect, such representations and warranties shall not be true and
accurate prior to the delivery of the Funds pursuant to Paragraph I hereof, the
undersigned shall give written notice of such fact to his Purchaser
Representative, if any, specifying which representations and warranties are not
true and accurate and the reasons therefor, with a copy to the Company and
otherwise to give the same information to the Company directly.
4. INDEMNIFICATION. The undersigned acknowledges that he understands the meaning
and legal consequences of the representations and warranties contained in
Paragraph 3 hereof, and he hereby indemnifies and holds harmless the Company,
agents, employees and affiliates, from and against any and all losses, claims,
damages or liabilities due to or arising out of a breach of any representations
(s) or warranty(s) of the undersigned contained in this Agreement.
5. NO WAIVER. Notwithstanding any of the representations, warranties,
acknowledgment or agreements made herein by the undersigned, the undersigned
does not thereby or in any other manner waive any rights granted to him under
federal or sate securities laws.
6. TRANSFERABILILY. The undersigned agrees not to transfer or assign this
Agreement, or any of his interest herein. Further, an investor in the Units
pursuant to this Agreement and applicable law, will not be permitted to transfer
or dispose of the Units unless they are registered or unless such transaction is
exempt from registration under the Securities Act or other securities laws and
in the case of the purportedly exempt sale, such investor provided (at his own
expense) an opinion of counsel reasonably satisfactory to the Company that such
exemption is, in fact available.
7. REVOCATION. The undersigned acknowledges and agrees that his subscription for
the Units made by the execution and delivery of this Agreement by the
undersigned is irrevocable and subject to the three day right of rescission in
Florida described in Section 2(c) herein, and that such subscription shall
survive the death or disability of the undersigned, except as provided pursuant
to the blue sky laws of the states in which the Units may be offered, or any
other applicable state statutes or regulations.
4
<PAGE>
8. MISCELLANEOUS. (a) All notices or other communications given or made
hereunder shall be in writing and shall be delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, to the undersigned at
his address set forth below and to
(b) Notwithstanding the place where this Agreement may be executed by any of the
parties hereto, the parties expressly agree that all the terrns and provisions
hereof shall be construed in accordance with and shall be govern by the laws of
the State of Florida.
(c) This Agreement constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof any may be amended only by writing
executed by all parties.
(d) This Agreement shall be binding upon the heirs, estates, legal
representatives, successors and assigns of all parties hereto.
(e) All terms used herein shall be deemed to include the masculine and the
feminine and the singular and the plural as the context requires.
5
<PAGE>
SAN MARINO MINERALS, INC.
SUBSCRIPTION AGREEMENT SIGNATURE PAGE FOR INDIVIDUALS
Number of Shares Subscribed for:
------------
Amount tendered at $0.25 per Share:
---------
- - ------------------------- --------------------------------------
(Signature of Subscriber) (Signature of Spouse, or joint tenant,
if any)
- - ------------------------- --------------------------------------
(Printed Name of Subscriber) (Printed Name of Spouse, or
other joint tenant, if any)
- - ------------------------- --------------------------------------
(Address) (Address)
- - ------------------------- --------------------------------------
- - ------------------------- --------------------------------------
(Social Security Number) (Social Security Number)
APPROVED AND ACCEPTED in accordance with the terms of this Agreement on this ___
day of _____________________, 1997.
SAN MARINO MINERALS, INC.
By:
KEN FINKELSTEIN, PRESIDENT
6
CONFIDENTIAL
NOT TO BE REPRODUCED OR DISTRIBUTED
Memorandum No.
Name of Offeree :
PRIVATE PLACEMENT MEMORANDUM OF
San Marino Minerals, Inc.
(a Florida Corporation)
6,100,000 Common Shares
$0.05 Per Share
MINIMUM INVESTMENT
2,500 Shares
$125.00
Principal Executive Offices:
353 Sacramento Street
San Francisco, CA, 94111
(415) 474-7047
The date of this Memorandum is June 17, 1997
SAN MARINO MINERALS, INC.
1
<PAGE>
Type of Securities Offered : Common Shares, $0.001 par value.
Number of Shares Offered : 6,100,000 Shares
Price per security : $0.05 per Share.
Total proceeds : If all shares sold : $305,000.00
Is a commissioned selling agent selling the securities in this offering ?
[ ] Yes [ X ] No
If yes , what percent is commission of price to public ?
Is there other compensation to selling agent(s) ?
[ ] Yes [ X ] No
Is there a finder's fee or similar payment to any person ?
[ ] Yes [ X ] No
Is there an escrow of proceeds until minimum is obtained ?
[ ] Yes [ X ] No
Is this offering limited to members of a special group, such as employees of the
Company or individuals ?
[ ] Yes [ X ] No
Is transfer of the securities restricted ?
[ ] Yes [ X ] No
THIS OFFERING OF SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR
HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. THE OFFERING WILL
TERMINATE UPON THE EARLIER OF ALL OF THE SHARES OR JULY 31ST, 1997. THE COMPANY
IS NOT REQUIRED TO SELL ANY MINIMUM NUMBER OF SHARES IN ORDER TO SELL SHARES IN
THE OFFERING. THE COMPANY MAY, IN ITS DISCRETION, CONDUCT MULTIPLE CLOSINGS.
(SEE " DESCRIPTION OF THE OFFERING." )
<PAGE>
THIS MEMORANDUM HAS BEEN PREPARED SOLELY FOR USE IN CONNECTION WITH THE PRIVATE
PLACEMENT OF THE SHARES OFFERED HEREBY AND MAY NOT BE REPRODUCED OR USED FOR ANY
OTHER PURPOSE. THE OFFEREE AGREES TO RETURN TO THE COMPANY THIS MEMORANDUM AND
ALL ATTACHMENTS AND RELATED DOCUMENTATION IF THE OFFEREE DOES NOT SUBSCRIBE TO
PURCHASE SHARES IN THE OFFERING.
THESE SECURITIES ARE BEING OFFERED ONLY TO INVESTORS WHO THE OFFEROR BELIEVES
HAVE THE QUALIFICATIONS NECESSARY TO PERMIT THE SECURITIES TO BE OFFERED AND
SOLD UNDER APPLICABLE EXEMPTIONS FROM REGISTRATION UNDER THE ACT AND
QUALIFICATION UNDER APPLICABLE STATE STATUTES. THE OFFEROR WILL BE THE SOLE
JUDGE OF WHETHER AN INVESTOR POSSESSES SUCH QUALIFICATIONS. NOTWITHSTANDING
DELIVERY OF THIS MEMORANDUM AND ASSOCIATED DOCUMENTATION, THE OFFEROR DOES NOT
INTEND TO EXTEND AN OFFER TO SELL OR TO SOLICIT AN OFFE TO BUY THESE SECURITIES
UNTIL THE OFFEROR DETERMINES THAT THE OFFEREE IS QUALIFIED AND COMMUNICATES SUCH
DETERMINATION TO INVESTORS IN WRITING. THE SHARES ARE BEING OFFERED IN A PRIVATE
PLACEMENT TO A LIMITED NUMBER OF INVESTORS. THIS MEMORANDUM DOES NOT CONSTITUTE
AN OFFER OR SOLICITATION IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT PERMITTED UNDER APPLICABLE LAW OR ANY FIRM OR INDIVIDUAL WHO DOES NOT
POSSESS THE QUALIFICATIONS DESCRIBED IN THIS MEMORANDUM.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT"), OR THE SECURITIES LAWS OF FLORIDA OR OTHER STATES, AND ARE
BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH LAWS. THERE IS A PUBLIC MARKET FOR SECURITIES
OF THE COMPANY. EVEN IF SUCH A MARKET DID NOT EXIST, PURCHASERS OF SHARES WILL
BE REQUIRED TO REPRESENT THAT THE SHARES ARE BEING ACQUIRED FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO SALE OR DISTRIBUTION, AND PURCHASERS WILL NOT BE
ABLE TO RESELL THE SHARES UNLESS THE SHARES ARE REGISTERED UNDER THE ACT AND
QUALIFIED UNDER THE APPLICABLE STATE STATUTES (UNLESS AN EXEMPTION FROM SUCH
REGISTRATION AND QUALIFICATION IS AVAILABLE). PURCHASERS OF THE SHARES SHOULD BE
PREPARED TO BEAR THE ECONOMIC RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
THE PURCHASE OF THESE SECURITIES WILL ENTAIL A HIGH DEGREE OF RISK. THESE
SECURITIES ARE SUITABLE ONLY FOR PERSONS WHO HAVE SUBSTANTIAL FINANCIAL
RESOURCES AND HAVE NO LIQUIDITY IN THIS INVESTMENT. NO ONE SHOULD INVEST IN THE
SHARES WHO IS NOT PREPARED TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE
INVESTORS SHOULD CONSIDER CAREFULLY THE RISK FACTORS INDICATED UNDER " RISK
FACTORS."
<PAGE>
INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS MEMORANDUM OR ANY
COMMUNICATION, WHETHER WRITTEN OR ORAL, FROM THE COMPANY, ITS FOUNDERS,
MANAGEMENT, EMPLOYEES OR AGENTS, AS LEGAL, TAX, ACCOUNTING OR OTHER EXPERT
ADVICE. EACH INVESTOR SHOULD CONSULT THEIR OWN COUNSEL, ACCOUNTANT AND OTHER
PROFESSIONAL ADVISORS AS TO LEGAL,TAX, ACCOUNTING, AND RELATED MATTERS
CONCERNING HIS INVESTMENT AND ITS SUITABILITY FOR THEM.
NO PERSON (OTHER THAN OFFICERS OF THE COMPANY TO WHOM REQUESTS ARE DIRECTED FOR
ADDITIONAL INFORMATION CONCERNING THIS OFFERING) IS AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS (WHETHER ORAL OR WRITTEN) IN CONNECTION
WITH THIS OFFERING EXCEPT SUCH INFORMATION AS IS CONTAINED IN THIS PRIVATE
PLACEMENT MEMORANDUM AND THE ATTACHMENTS THERETO AND DOCUMENTS REFERRED TO
HEREIN. ONLY INFORMATION OR REPRESENTATIONS CONTAINED HEREIN AND THEREIN MAY BE
RELIED UPON AS HAVING BEEN AUTHORIZED.
THE SECURITIES OFFERED HEREBY WILL BE SOLD TO SUBJECT TO THE STOCK SUBSCRIPTION
AGREEMENT ATTACHED AS ATTACHMENT A OF THIS MEMORANDUM, WHICH CONTAINS CERTAIN
REPRESENTATIONS, WARRANTIES, TERMS AND CONDITIONS. EACH INVESTOR SHOULD
CAREFULLY REVIEW THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT BEFORE INVESTING.
This Company :
[ ] Has never conducted operations.
[ x ] Is in the development stage.
[ ] Is currently conducting operations.
[ ] Has shown a profit in the last fiscal year.
[ ] Other ( Specify ) ______________________
(Check at one, as appropriate)
This offering has been registered for offer and sale in the following states :
State State File No Effective Date
<PAGE>
SUMMARY OF THE OFFERING
The following material is intended to summarize information contained elsewhere
in this Memorandum. This summary is qualified in its entirety by express
reference to the Memorandum and the exhibits referred to therein. Each
prospective investor is urged to read this Memorandum in its entirety.
San Marino Minerals, Inc., a Florida corporation (the " Company "), is the
issuer of the Shares.The address of the Company is 353 Sacramento Street, San
Francisco, CA, 94111.
The Offering. The Company is offering up to 6,100,000 of its common shares, par
value $.001 per share (the "Shares"). The Minimum investment for an Investor is
2,500 Shares, or $125.00. The Company, in its sole discretion, may accept
subscriptions for up to an aggregate of 2,500 Shares, or $125.00 until July
31st, 1997, or until such earlier date as the Company determines that this
Offering shall be terminated. In its sole discretion, the Company may elect to
terminate this Offering even if subscriptions for Shares have been received and
accepted by the Company. See "Terms of the Offering" and "Subscription for
Shares".
Company's Business: The Company is involved in the exploration and development
or resource properties, including precious metals and oil and gas.
Risk Factors: The offering involves speculative investment with substantial
risks, including those risks associated with the industry. Although the Company
will use its best efforts to protect the investments of the Investors, there is
no assurance that the Company's efforts will be successful. Accordingly, a
prospective Investor should not view the Company or its Officers, Directors,
employees or agents as guarantors of the financial success of an investment in
the Shares. See "Risk Factors".
Limited Transferability of the Shares. The Shares have not been registered under
the 1933 Act or the securities laws of any state. The Shares of common stock
purchased pursuant to this Offering will not be "restricted" shares because the
shares are offered under Rule 504 and this offering is excluded from the
provisions of Regulation D pertaining to restricted shares. This does not mean,
however, that a public market does exist for the Shares. Currently there is a
market for the Shares on NASDAQ - OTC Bulletin Board . See "Risk Factors" and
Terms of the Offering".
Limitation of Liability. Except for the amounts paid by Investors for their
purchase of any Shares, and as required by Florida State law, no investor will
be liable for any debts of the Company or be obligated to contribute any
additional capital or funds to the Company. See " Risk Factors".
<PAGE>
Suitability Standards. Each Investor must meet certain eligibility standards
established by the Company for the purchase of the Shares. See "Terms of the
Offering" and "Subscription for Shares".
Use of Proceeds. The Company plans to use the money received from this offering
to cover the costs involved with public relations and building of investor
awareness. The funds will not be deposited in an escrow account and will be
available to the Company immediately. No minimum amount of Shares is required to
be sold.
THE COMPANY
Exact corporate name: San Marino Minerals, Inc.
State and date of incorporation: Florida State
January 13, 1997
Street address of principal office: 353 Sacramento Street
San Francisco, CA, 94111
(415) 474-7047
Fiscal Year: December 31st.
PRODUCTS
The Company is involved in the exploration and development or resource
properties, including precious metals and oil and gas.
RISK FACTORS
An investment in the Shares involves a high degree of risk. No prospective
Investor should acquire the Shares unless he can afford a complete loss of his
investment. The risks described below are those which the Company deems most
significant as of the date hereof. Other factors which may have a material
impact on the operations of the Company may not be foreseen. In addition to the
other factors set forth elsewhere in this Memorandum, prospective Investors
should carefully consider the following specific risk factors:
<PAGE>
A. OPERATING RISKS
General. The economic success of an investment in the Shares depends, to a
large degree, upon many factors over which the Company has no control. These
factors include general economic, industrial and international conditions;
changes in world oil, gas, gold and other metal prices; inflation or deflation;
fluctuation in interest rates; the availability of, and fluctuations in the
money supply. The extent, type and sophistication of the Company?s competition;
and government regulations.
Operations. The Company is a development stage corporation, with limited
operating and financial history.
Dependence on Key Personnel. The Company's success will depend, in large
part, upon the talents and skills of key management personnel. To the extent
that any of its management personnel is unable or refuses to continue
association with the Company, a suitable replacement would have to be found.
There is no assurance that the Company would be able to find suitable
replacements for such personnel, or that suitable person.
Lack of Adequate Capital. Additional capital will be required in the
Company's future operations. In the absence of any additional funding, the
Company's operations may be affected negatively. Therefore, the Company's
management will be careful and use its best judgement in directing the affairs
of the Company in a manner that maximizes its chances of success and,
accordingly, the best chances of raising future funding.
Inherent Business Risks. The business that the Company is engaged in
involves substantial and inherent risks associated with an emerging company with
limited financial resources.
B. INVESTMENT RISKS
Speculative Investment. The Shares are a very speculative investment. There
can be no assurance that the Company will attain its objective and it is very
likely that the Company will not be able to advance any business activities and
Investors could lose their entire investments.
Arbitrary Purchase Price; No Market. The purchase price for the Shares has
been arbitrarily determined by the Company, and is not necessarily indicative of
their value. No assurance is or can be given that the Shares, although
transferable, could be sold for the purchase price, or for any amount. There
currently is a market for resale of the Shares.
Restriction of Transferability. While the Company believes that no
restriction exists for the transfer of the Shares being offered by the Company,
an investment in the Shares may be a long term investment. Investors who do not
wish or who are not financially able to hold the Shares for a substantial period
of time are advised against purchasing Shares. The Shares are not registered
under the 1933 Act or under the securities laws of any state, but are being
offered by the Company under the exemption from registration provided by Rule
504 under Regulation D and related state and foreign exceptions.
<PAGE>
"Best Efforts" Offering. The Shares are being offered on a "best efforts"
basis by the Company. No person or entity is committed to purchase or take down
any of the Shares offered pursuant to this Offering. No escrow account is
maintained and no minimum amount is required to be sold. Funds will be available
to the Company upon receipt.
Management and Operation Experience. The Company's Officers, Directors and
other personnel have engaged in a variety of businesses and have been involved
in business financing, operations, marketing and research but their experience
in these fields is limited. There is no assurance that such experience will
result in the success of the Company.
Other Risks. No assurance can be given that the Company will be successful
in achieving its stated objectives, that the Company's business is undertaken by
the Company, will generate cash sufficient to operate the business of the
Company or that other parties entering into agreements relating to the Company's
business will meet their respective obligations.
Dividends. The Company's Board of Directors presently intends to cause the
Company to follow a policy of retaining earnings, if any, for the purpose of
increasing the net worth and reserves of the Company. Therefore, there can be no
assurance that any holder of Common Stock will receive any cash, stock or other
dividends on his shares of Common Stock. Future dividends on Common Stock, if
any, will depend on the future earnings, financing requirements and other
factors.
Additional Securities Available for Issuance. The Company's Certificate of
Incorporation authorizes the issuance of 100,000,000 shares of Common Stock.
Accordingly, including those purchasing the shares offered with the sale of this
offering, investors will be dependent upon the judgement of management in
connection with the future issuance and sale of shares of the Company's capital
stock, in the event purchasers can be found for such securities.
USE OF PROCEEDS
The Company will incur expenses in connection with the Offering in an
amount anticipated not to exceed $5,000 for legal fees, accounting fees, filing
fees, printing costs and other expenses. If the maximum number of Shares are
sold, the Company anticipates that the net proceeds to it from the Offering will
be as follows:
<PAGE>
Maximum
Item Shares Sold
Gross Proceeds of Offering $305,000.00
Offering Expenses
Cost of Offering $ 5,000.00
-----------
TOTAL PROCEEDS RECEIVED: $300,000.00
Operating Expenses
------------------
Working Capital $ 35,000.00
Resource Property Development $ 200,000.00
Public Relations $ 65,000.00
-------------
TOTAL $ 300,000.00
NET FUNDS AVAILABLE TO COMPANY
The Company estimates that the costs of the Offering will be as
follows: (i) legal fees of approximately $1,500.00, (ii) accounting fees of
approximately $2,500 and (iii) printing and other miscellaneous costs of
approximately $1,000. A sales commissions will be paid only to NASD
broker/dealers and no other person will receive any commissions or remuneration
from the Company.
The net proceeds of this offering, assuming all the Shares are sold,
will be sufficient to sustain the planned activities of the Company for a period
of 6 months, depending upon the number of Shares sold in the offering and other
factors. Even if all the Shares offered hereunder are sold, the Company will
require additional capital in order to fund continued development activities and
capital expenditures that must be made. The Company's business plan is based on
the premise that additional funding will be obtained through funds generated
from operations, the exercising of the options, additional offerings of its
securities, or other arrangements. There can be no assurance that any securities
offerings will take place in the future, or that funds sufficient to meet any of
the foregoing needs or plans will be raised from operations or any other source.
DESCRIPTION OF SECURITIES
The following discussion describes the stock and other securities of
the Company.
General. The Company currently has 100,000,000 authorized common shares,
par value $.001 per share, of which 3,300,000 common shares were issued and
outstanding as of the date of this Placement. All of the outstanding common
shares of the Company are fully paid for and nonassessable.
<PAGE>
Voting Rights. Each share of the 3,300,000 shares of the Company's common
stock held by its current shareholders is entitled to one vote at shareholders
meetings.
Dividends. The Company has never paid a dividend and does not anticipate
doing so in the near future.
Miscellaneous Rights and Provisions. Shares of the Company's common stock
have no pre-emptive rights. The Shares do not have any conversion rights, no
redemption or sinking fund provisions, and are not liable to further call or
assessment. The Shares, when paid for by Investors, will be fully paid and
nonassessable. Each share of the Company's common shares is entitled to a pro
rata share in any asset available for distribution to holders of equity
securities upon the liquidation of the Company.
TERMS OF THE OFFERING
The Company is offering to qualified investors a maximum of 6,100,000
Shares at a purchase price of $0.05 per share of the Company's common stock. The
Company may, in its sole discretion, terminate the offering at any time. The
Offering will close on the earliest of July 31st , 1997 or the election of the
Company when all of the Shares are sold, in no event later than July 31st ,
1997. The minimum subscription is $125 (2,500 Shares) per Investor, although the
Company, in its sole discretion, may accept subscriptions for lesser amounts.
Terms of Sale: The Company hereby agrees to sell to the purchaser and the
purchaser hereby agrees to subscribe for 2,500 shares in the capital of the
Company (the "Shares") for a purchase of $0.05 per share for an aggregate
purchase of $125.00 ( the "Purchase Funds").
Constitution of Shares: Each share consists of one fully paid and
non-assessable common share in the capital stock (the "Share") of the Company.
The Shares are being offered and sold by the Company under the exemption
from registration contained in Rule 504 under Regulation D and related
exemptions from state registration requirements. Rule 504 permits the Company to
offer and sell its stock in an amount not exceeding $1,000,000 to an unlimited
number of persons. Until 1992, Rule 504(b)(2)(ii) imposed a limited disclosure
obligation of all issuers such as the Company which was intended to ensure that
investors in a Rule 504 transaction were clearly advised of the restricted
character of the securities being offered for sale. This requirement was
eliminated in July, 1992 at which time the Securities and Exchange Commission
adopted an amendment to Rule 504 that eliminated all limitations on the manner
of offering of stock under that rule and/or the resale of stock purchased in
reliance on that rule. Therefore, following adoption of the 1992 amendment, the
securities being offered and sold by the Company pursuant to the present
Offering ar available for immediate resale by nonaffiliates of the issuer.
<PAGE>
The Shares are being offered on a "best efforts" basis by the Company and
certain expenses of the Offering will be paid from the proceeds of the Offering.
The Company anticipates that such expenses will not exceed $5,000 as detailed in
the Use of Proceeds.
DIRECTORS, OFFICERS AND KEY PERSONNEL OF THE COMPANY e
Officers and Directors. The following information sets forth the names of
the officers and directors of the Company, their present position with the
Company and biographic information:
NAME POSITION
---- --------
Mr. Ken Finkelstein President and Director
Ms. Jasbinder Chohan Director, Secretary and Treasurer
Mr. Narinder Thouli Director
Mr. Trevor Smith Director
Mr. Michael Wagget Director
REMUNERATION OF DIRECTORS AND OFFICERS
Directors of the Company who are also employees of the Company receive no
additional compensation for their services as Directors. The Company intends, in
the future, to pay Directors who are not employees of the Company, compensation
of $500 per Director's Meeting, as well as reimbursements of any out of pocket
expenses incurred in the Company's behalf.
REPORTS
The books and records of the Company will be maintained by the Company. The
books of account and records shall be kept at the principal place of business of
San Marino Minerals, Inc., and each shareholder, or his duly authorized
representatives, shall have upon giving ten (10) days prior notice, access
during reasonable business hours to such books and records, and the right to
inspect and copy them. Within 120 days after the close of each fiscal year,
reports will be distributed to the shareholders which will include financial
statements (including a balance sheet and statements of income, shareholder's
equity, and cash flows) prepared in accordance with generally accepted
accounting principals, with a reconciliation to the tax information
supplementary supplied, accompanied by a copy of the accountant's report.
LEGAL MATTERS
Gary R. Blume, Esquire, 11801 North Tatum Blvd, Suite 108, Phoenix,
Arizona, 85028 will pass upon certain matters for the Company.
<PAGE>
LITIGATION
The Company is not presently involved in any material litigation or other
legal proceedings.
ADDITIONAL INFORMATION
In the opinion of the Board of Directors of the Company, this memorandum
contains a fair presentation of the subjects discussed herein and does not
contain a misstatement of material fact or fail to state a material fact
necessary to make any statements made herein not misleading. Persons to whom
offers are made will be furnished with such additional information concerning
the Company and other matters discussed herein as they, or their purchaser
representative or other advisors, may reasonably request. The Company shall, to
the extent such information is available or can be acquired without unreasonable
effort or expense, endeavour to provide the information to such persons. All
offeree?s are urged to make such personal investigations, inspections or
inquiries as they deem appropriate.
Questions or requests for additional information may be directed to Mr. Ken
Finkelstein by calling (415) 474-7047. Requests for additional copies of this
Memorandum or assistance in executing subscription documents may be directed to
the Company.
STATE RESTRICTIONS AND DISCLOSURES
FOR UNREGISTERED SECURITIES OFFERINGS
NOTICE TO ARIZONA RESIDENTS:
These securities are being sold in reliance upon Arizona's Limited Offering
exemption from registration pursuant to A.R.S. 44-1844.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE ARIZONA
SECURITIES ACT, AS AMENDED, AND THEREFORE, CANNOT BE TRANSFERRED OR RESOLD
UNLESS THEY ARE REGISTERED UNDER SUCH ACT OR AN EXEMPTION THEREFROM IS
AVAILABLE.
As a purchaser of such securities hereby represent that I understand these
securities cannot be resold without registration under the Arizona Securities
Act or an exemption therefrom. I am not an underwriter within the meaning of
A.R.S 44-1801(17), and I am acquiring these securities for myself, not for other
persons. If qualifying as a non-accredited investor, I further represent that
this investment does not exceed 20% of my net worth ( excluding principal
residence, furnishings therein and personal automobiles).
<PAGE>
NOTICE TO CALIFORNIA RESIDENTS:
These securities are being sold in reliance upon California's Limited
Offering Exemption. 25102(f) of the California Code, as amended.
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS MEMORANDUM HAS NOT
BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA
AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFROM PRIOR TO SUCH QUALIFICATIONS IS UNLAWFUL, UNLESS THE
SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATIONS BY SECTION 25100, 25102 OR
26105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA DOES NOT
RECOMMEND OR ENDORSE THE PURCHASE OF THESE SECURITIES.
NOTICE TO COLORADO RESIDENTS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE COLORADO SECURITIES ACT OF 1981 BY REASON OF SPECIFIC
EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY
PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE COLORADO SECURITIES ACT OF 1981, IF SUCH REGISTRATION
IS REQUIRED.
NOTICE TO NEW YORK RESIDENTS:
THIS PRIVATE PLACEMENT MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY
THE ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE
STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION OF THE CONTRARY IS UNLAWFUL.
THIS PRIVATE PLACEMENT MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF
MATERIAL FACT AND DOES NOT OMIT ANY MATERIAL FACT NECESSARY TO MAKE THE
STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS
PURPOSED TO BE SUMMARIZED HEREIN.
Purchaser Statement:
<PAGE>
I understand that this Offering of Shares has not been reviewed by the
Attorney General of the State of New York because of the Offeror's
representations that this intended to be a non-public Offering pursuant to the
Regulation D Rule 504 or 505, and that if all of the conditions and limitations
of Regulation D are not complied with, the Offering will be resubmitted to the
Attorney General for amended exemption. I understand that any literature used in
connection with this Offering has not been previously filed with the Attorney
General and has not been reviewed by the Attorney General. This Investment Unit
is being purchased for my own account for investment, and not for distribution
or resale to others. I agree that I will not sell or otherwise transfer these
securities unless they are registered under the Federal Securities Act of 1933
or unless an exemption from such registration is available. I represent that I
have adequate means of providing for my current needs and possible personal
contingencies of financial problems, and that I have no need for liquidity of
this investment.
It is understood that all documents, records and books pertaining to this
investment have been made available to my attorney, my accountant, or my offeree
representative and myself, and that, upon reasonable notice, the books and
records of the issuer will be available for inspection by investors, at
reasonable hours at the principal place of business.
EXHIBITS
San Marino Minerals, Inc.
SUBSCRIPTION DOCUMENT
1. The undersigned hereby subscribes for ___________ common stock (hereinafter
"Shares"), as described in the Private Offering Memorandum dated June 17th
, 1997 ("Memorandum"), of San Marino Minerals, Inc., a Florida corporation
(the "Company"), being offered by the Company for a purchase price of $0.05
per Unit and tenders herewith the sum of $________________ in payment
therefore, together with tender of this Subscription Document.
<PAGE>
2. The undersigned represents and warrants that he is a bona fide resident of
the State of _________________ .
3 The undersigned acknowledges:
a. Receipt of a copy of the Private Offering Memorandum;
b. That this subscription, if accepted by the Company, is legally binding and
irrevocable;
c. The Company is a development stage corporation with limited financial and
operating history;
d. That the Shares have not been registered under the Securities Act of 1933,
as amended, in reliance upon exemptions contained in that Act, and that the
Shares have not been registered under the securities acts of any state in
reliance upon exemptions contained in certain state's securities laws; and
e. That the representations and warranties provided in this Subscription
Document are being relied upon by the Company as the basis for the
exemption from the registration requirements of the Securities Act of 1933
and of the applicable state's securities laws.
4. The undersigned represents and warrants as follows:
a. That the undersigned subscriber is purchasing said Shares as an investment
and said Shares are purchased solely for the undersigned's own account.
b. That the undersigned subscriber has sufficient knowledge and experience in
financial and business matters to evaluate the merits and risks of an investment
in the Shares;
c. That the undersigned subscriber is able to bear the economic risk of an
investment in the Shares;
d. That the undersigned subscriber has read and is thoroughly familiar with
the Private Offering Memorandum and represents and warrants that he is
aware of the high degree of risk involved in making investment in the
Shares;
<PAGE>
e. That the undersigned subscriber's decision to purchase the Shares is based
solely on the information contained in the Private Offering Memorandum and
on written answers to such questions as he has raised concerning the
transaction;
f. That the undersigned subscriber is purchasing the Shares directly from the
Company and understands that neither the Company nor the Offering is
associated with; endorsed by nor related in any way with any investment
company, national or local brokerage firm or broker dealer. The undersigned
subscriber's decision to purchase the Shares is not based in whole or in
part on any assumption or understanding that an investment company,
national or local brokerage firm or other broker dealer is involved in any
way in this Offering or has endorsed or otherwise recommended an investment
in these Shares.
g. That the undersigned subscriber has an investment portfolio of sufficient
value that he could suitably absorb a high risk illiquid addition such as
an investment in the Shares.
h. The undersigned further represents that (INITIAL APPROPRIATE CATEGORY):
[ ] I am a natural person whose individual net worth, or joint worth with my
spouse at the time of purchase, exceeds $200,000;
[ ] I am a natural person who had an individual income in excess of $50,000
or joint income with my suppose in excess of $50,000 in each of the two
most recent years and who reasonably expects an income in excess of those
amounts in the current year;
i. That Regulation D requires the Company to conclude that each investor has
sufficient knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the
shares, or to verify that the investor has retained the services of one or
more purchaser representatives for the purpose of evaluating the risks of
investment in the shares and hereby represents and warrants that he has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of an investment in the shares
and of making an informed investment decision and will not require a
purchaser representative.
5. The undersigned understands and agrees that this subscription is made subject
to each of the following terms and conditions:
a. The Company shall have the right to accept or reject this subscription, in
whole or part, for any reason. Upon receipt of each Subscription Document,
the Company shall have until July 31st , 1997 in which to accept or reject
it. If no action is taken by the Company within said period, the
subscription shall be deemed to have been accepted. In each case where the
subscription is rejected, the Company shall return the entire amount
tendered by the subscriber, without interest;
<PAGE>
b. That the undersigned subscriber will, from time to time, execute and
deliver such documents or other instruments as may be requested by the
Company in order to aid the Company in the consummation of the transactions
contemplated by the Memorandum.
6. The undersigned hereby constitutes and appoints the Company, with full
power of substitution, as attorney-in-fact for the purpose of executing and
delivering, swearing to and filing, any documents or instruments related to
or required to make any necessarclarifying or conforming changes in the
Subscription Document so that such document is correct in all respects.
7. As used herein, the singular shall include the plural and the masculine
shall include thfeminine where necessary to clarify the meaning of this
Subscription Document. All terms not defined herein shall have the same
meanings as in the Memorandum.
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Document this _____ day of ____________, 1997.
Number of Shares _________
Total amount tendered $ ________
INDIVIDUAL OWNERSHIP: __________________________________________
Name ( Please Type or Print )
------------------------------------------
Signature
------------------------------------------
Social Security Number
JOINT OWNERSHIP: __________________________________________
Name ( Please Type or Print )
__________________________________________
Signature
__________________________________________
Social Security Number
<PAGE>
OTHER OWNERSHIP __________________________________________
Name ( Please Type or Print )
By:_______________________________________
( Signature )
------------------------------------------
Title
------------------------------------------
Employer Identification Number
ADDRESS:________________________________________________________________________
Street City State Zip
Phone ( Residence )_____________________ ; Phone ( Business ) __________________
I,________________________________, do hereby certify that the
representations made herein concerning my financial status are true, and that
all other statements contained herein are true, accurate and complete to the
best of my knowledge.
Date: ___________________ , 1997.
Signature____________________________________
CERTIFICATE OF DELIVERY
I hereby acknowledge that I delivered the foregoing Subscription
Document to_________ _________________ on the _______ day of __________________
, 1997.
__________________________________________
Signature
ACCEPTANCE
This Subscription is accepted by SAN MARINO MINERALS, INC., as of the
______ day of _____________ , 1997.
<PAGE>
SAN MARINO MINERALS, INC.
By:_____________________________
Director
<PAGE>
<PAGE>
CONFIDENTIAL
NOT TO BE REPRODUCED OR DISTRIBUTED
Memorandum No.
Name of Offeree :
PRIVATE PLACEMENT MEMORANDUM OF
San Marino Minerals, Inc.
(a Florida Corporation)
100,000 Common Shares
$0.25 Per Share
MINIMUM INVESTMENT
10,000 Shares
$2,500.00
Principal Executive Offices:
Suite 600 - 353 Sacramento Street
San Francisco, CA, 94111
(415) 474-7047
The date of this Memorandum is August 12, 1997
<PAGE>
SAN MARINO MINERALS, INC.
Type of Securities Offered : Common Shares, $0.001 par value.
Number of Shares Offered : 100,000 Shares
Price per security : $0.25 per Share.
Total proceeds : If all shares sold : $100,000.00
Is a commissioned selling agent selling the securities in this offering ?
[ ] Yes [ X ] No
If yes , what percent is commission of price to public ?
Is there other compensation to selling agent(s) ?
[ ] Yes [ X ] No
Is there a finder's fee or similar payment to any person ?
[ ] Yes [ X ] No
Is there an escrow of proceeds until minimum is obtained ?
[ ] Yes [ X ] No
Is this offering limited to members of a special group, such as employees of the
Company or individuals ?
[ ] Yes [ X ] No
Is transfer of the securities restricted ?
[ ] Yes [ X ] No
<PAGE>
THIS OFFERING OF SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR
HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. THE OFFERING WILL
TERMINATE UPON THE EARLIER OF ALL OF THE SHARES OR SEPTEMBER 30TH, 1997. THE
COMPANY IS NOT REQUIRED TO SELL ANY MINIMUM NUMBER OF SHARES IN ORDER TO SELL
SHARES IN THE OFFERING. THE COMPANY MAY, IN ITS DISCRETION, CONDUCT MULTIPLE
CLOSINGS. (SEE " DESCRIPTION OF THE OFFERING." )
THIS MEMORANDUM HAS BEEN PREPARED SOLELY FOR USE IN CONNECTION WITH THE PRIVATE
PLACEMENT OF THE SHARES OFFERED HEREBY AND MAY NOT BE REPRODUCED OR USED FOR ANY
OTHER PURPOSE. THE OFFEREE AGREES TO RETURN TO THE COMPANY THIS MEMORANDUM AND
ALL ATTACHMENTS AND RELATED DOCUMENTATION IF THE OFFEREE DOES NOT SUBSCRIBE TO
PURCHASE SHARES IN THE OFFERING.
THESE SECURITIES ARE BEING OFFERED ONLY TO INVESTORS WHO THE OFFEROR BELIEVES
HAVE THE QUALIFICATIONS NECESSARY TO PERMIT THE SECURITIES TO BE OFFERED AND
SOLD UNDER APPLICABLE EXEMPTIONS FROM REGISTRATION UNDER THE ACT AND
QUALIFICATION UNDER APPLICABLE STATE STATUTES. THE OFFEROR WILL BE THE SOLE
JUDGE OF WHETHER AN INVESTOR POSSESSES SUCH QUALIFICATIONS. NOTWITHSTANDING
DELIVERY OF THIS MEMORANDUM AND ASSOCIATED DOCUMENTATION, THE OFFEROR DOES NOT
INTEND TO EXTEND AN OFFER TO SELL OR TO SOLICIT AN OFFER TO BUY THESE SECURITIES
UNTIL THE OFFEROR DETERMINES THAT THE OFFEREE IS QUALIFIED AND COMMUNICATES SUCH
DETERMINATION TO INVESTORS IN WRITING. THE SHARES ARE BEING OFFERED IN A PRIVATE
PLACEMENT TO A LIMITED NUMBER OF INVESTORS. THIS MEMORANDUM DOES NOT CONSTITUTE
AN OFFER OR SOLICITATION IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT PERMITTED UNDER APPLICABLE LAW OR ANY FIRM OR INDIVIDUAL WHO DOES NOT
POSSESS THE QUALIFICATIONS DESCRIBED IN THIS MEMORANDUM.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT"), OR THE SECURITIES LAWS OF FLORIDA OR OTHER STATES, AND ARE
BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH LAWS. THERE IS A PUBLIC MARKET FOR SECURITIES
OF THE COMPANY. EVEN IF SUCH A MARKET DID NOT EXIST, PURCHASERS OF SHARES WILL
BE REQUIRED TO REPRESENT THAT THE SHARES ARE BEING ACQUIRED FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO SALE OR DISTRIBUTION, AND PURCHASERS WILL NOT BE
ABLE TO RESELL THE SHARES UNLESS THE SHARES ARE REGISTERED UNDER THE ACT AND
QUALIFIED UNDER THE APPLICABLE STATE STATUTES (UNLESS AN EXEMPTION FROM SUCH
REGISTRATION AND QUALIFICATION IS AVAILABLE). PURCHASERS OF THE SHARES SHOULD BE
PREPARED TO BEAR THE ECONOMIC RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
<PAGE>
THE PURCHASE OF THESE SECURITIES WILL ENTAIL A HIGH DEGREE OF RISK. THESE
SECURITIES ARE SUITABLE ONLY FOR PERSONS WHO HAVE SUBSTANTIAL FINANCIAL
RESOURCES AND HAVE NO LIQUIDITY IN THIS INVESTMENT. NO ONE SHOULD INVEST IN THE
SHARES WHO IS NOT PREPARED TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE
INVESTORS SHOULD CONSIDER CAREFULLY THE RISK FACTORS INDICATED UNDER " RISK
FACTORS."
INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS MEMORANDUM OR ANY
COMMUNICATION, WHETHER WRITTEN OR ORAL, FROM THE COMPANY, ITS FOUNDERS,
MANAGEMENT, EMPLOYEES OR AGENTS, AS LEGAL, TAX, ACCOUNTING OR OTHER EXPERT
ADVICE. EACH INVESTOR SHOULD CONSULT THEIR OWN COUNSEL, ACCOUNTANT AND OTHER
PROFESSIONAL ADVISORS AS TO LEGAL,TAX, ACCOUNTING, AND RELATED MATTERS
CONCERNING HIS INVESTMENT AND ITS SUITABILITY FOR THEM.
NO PERSON (OTHER THAN OFFICERS OF THE COMPANY TO WHOM REQUESTS ARE DIRECTED FOR
ADDITIONAL INFORMATION CONCERNING THIS OFFERING) IS AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS (WHETHER ORAL OR WRITTEN) IN CONNECTION
WITH THIS OFFERING EXCEPT SUCH INFORMATION AS IS CONTAINED IN THIS PRIVATE
PLACEMENT MEMORANDUM AND THE ATTACHMENTS THERETO AND DOCUMENTS REFERRED TO
HEREIN. ONLY INFORMATION OR REPRESENTATIONS CONTAINED HEREIN AND THEREIN MAY BE
RELIED UPON AS HAVING BEEN AUTHORIZED.
THE SECURITIES OFFERED HEREBY WILL BE SOLD TO SUBJECT TO THE STOCK SUBSCRIPTION
AGREEMENT ATTACHED AS ATTACHMENT A OF THIS MEMORANDUM, WHICH CONTAINS CERTAIN
REPRESENTATIONS, WARRANTIES, TERMS AND CONDITIONS. EACH INVESTOR SHOULD
CAREFULLY REVIEW THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT BEFORE INVESTING.
This Company :
[ ] Has never conducted operations.
[ x ] Is in the development stage.
[ ] Is currently conducting operations.
[ ] Has shown a profit in the last fiscal year.
[ ] Other ( Specify ) ______________________
(Check at one, as appropriate)
This offering has been registered for offer and sale in the following states :
State State File No Effective Date
----- -------------- ---------------
<PAGE>
SUMMARY OF THE OFFERING
The following material is intended to summarize information contained elsewhere
in this Memorandum. This summary is qualified in its entirety by express
reference to the Memorandum and the exhibits referred to therein. Each
prospective investor is urged to read this Memorandum in its entirety.
San Marino Minerals, Inc., a Florida corporation (the " Company "), is the
issuer of the Shares.The address of the Company is Suite 600, 353 Sacramento
Street, San Francisco, CA, 94111.
The Offering. The Company is offering up to 100,000 of its common shares, par
value $.001 per share (the "Shares"). The Minimum investment for an Investor is
10,000 Shares, or $2,500.00. The Company, in its sole discretion, may accept
subscriptions for up to an aggregate of 10,000 Shares, or $2,500.00 until
September 31st, 1997, or until such earlier date as the Company determines that
this Offering shall be terminated. In its sole discretion, the Company may elect
to terminate this Offering even if subscriptions for Shares have been received
and accepted by the Company. See "Terms of the Offering" and "Subscription for
Shares".
Company's Business: The Company is involved in the exploration and development
or resource properties, including precious metals and oil and gas.
Risk Factors: The offering involves speculative investment with substantial
risks, including those risks associated with the industry. Although the Company
will use its best efforts to protect the investments of the Investors, there is
no assurance that the Company's efforts will be successful. Accordingly, a
prospective Investor should not view the Company or its Officers, Directors,
employees or agents as guarantors of the financial success of an investment in
the Shares. See "Risk Factors".
Limited Transferability of the Shares. The Shares have not been registered under
the 1933 Act or the securities laws of any state. The Shares of common stock
purchased pursuant to this Offering will not be "restricted" shares because the
shares are offered under Rule 504 and this offering is excluded from the
provisions of Regulation D pertaining to restricted shares. This does not mean,
however, that a public market does exist for the Shares. Currently there is a
market for the Shares on NASDAQ - OTC Bulletin Board . See "Risk Factors" and
Terms of the Offering".
Limitation of Liability. Except for the amounts paid by Investors for their
purchase of any Shares, and as required by Florida State law, no investor will
be liable for any debts of the Company or be obligated to contribute any
additional capital or funds to the Company. See " Risk Factors".
<PAGE>
Suitability Standards. Each Investor must meet certain eligibility standards
established by the Company for the purchase of the Shares. See "Terms of the
Offering" and "Subscription for Shares".
Use of Proceeds. The Company plans to use the money received from this offering
to cover the costs involved with public relations and building of investor
awareness. The funds will not be deposited in an escrow account and will be
available to the Company immediately. No minimum amount of Shares is required to
be sold.
THE COMPANY
Exact corporate name: San Marino Minerals, Inc.
State and date of incorporation: Florida State
January 13, 1997.
Street address of principal office: 600 - 353 Sacramento Street
San Francisco, CA, 94111
(415) 474-7047
Fiscal Year: December 31st.
PRODUCTS
The Company is involved in the exploration and development or resource
properties, including precious metals and oil and gas.
<PAGE>
RISK FACTORS
An investment in the Shares involves a high degree of risk. No prospective
Investor should acquire the Shares unless he can afford a complete loss of his
investment. The risks described below are those which the Company deems most
significant as of the date hereof. Other factors which may have a material
impact on the operations of the Company may not be foreseen. In addition to the
other factors set forth elsewhere in this Memorandum, prospective Investors
should carefully consider the following specific risk factors:
A. OPERATING RISKS
General. The economic success of an investment in the Shares depends, to a
large degree, upon many factors over which the Company has no control. These
factors include general economic, industrial and international conditions;
changes in world oil, gas, gold and other metal prices; inflation or deflation;
fluctuation in interest rates; the availability of, and fluctuations in the
money supply. The extent, type and sophistication of the Companys competition;
and government regulations.
Operations. The Company is a development stage corporation, with limited
operating and financial history.
Dependence on Key Personnel. The Company's success will depend, in large
part, upon the talents and skills of key management personnel. To the extent
that any of its management personnel is unable or refuses to continue
association with the Company, a suitable replacement would have to be found.
There is no assurance that the Company would be able to find suitable
replacements for such personnel, or that suitable person.
Lack of Adequate Capital. Additional capital will be required in the
Companys future operations. In the absence of any additional funding, the
Company's operations may be affected negatively. Therefore, the Company's
management will be careful and use its best judgement in directing the affairs
of the Company in a manner that maximizes its chances of success and,
accordingly, the best chances of raising future funding.
Inherent Business Risks. The business that the Company is engaged in
involves substantial and inherent risks associated with an emerging company with
limited financial resources.
B. INVESTMENT RISKS
Speculative Investment. The Shares are a very speculative investment. There
can be no assurance that the Company will attain its objective and it is very
likely that the Company will not be able to advance any business activities and
Investors could lose their entire investments.
<PAGE>
Arbitrary Purchase Price; No Market. The purchase price for the Shares has
been arbitrarily determined by the Company, and is not necessarily indicative of
their value. No assurance is or can be given that the Shares, although
transferable, could be sold for the purchase price, or for any amount. There
currently is a market for resale of the Shares.
Restriction of Transferability. While the Company believes that no
restriction exists for the transfer of the Shares being offered by the Company,
an investment in the Shares may be a long term investment. Investors who do not
wish or who are not financially able to hold the Shares for a substantial period
of time are advised against purchasing Shares. The Shares are not registered
under the 1933 Act or under the securities laws of any state, but are being
offered by the Company under the exemption from registration provided by Rule
504 under Regulation D and related state and foreign exceptions.
"Best Efforts" Offering. The Shares are being offered on a "best efforts"
basis by the Company. No person or entity is committed to purchase or take down
any of the Shares offered pursuant to this Offering. No escrow account is
maintained and no minimum amount is required to be sold. Funds will be available
to the Company upon receipt.
Management and Operation Experience. The Company's Officers, Directors and
other personnel have engaged in a variety of businesses and have been involved
in business financing, operations, marketing and research but their experience
in these fields is limited. There is no assurance that such experience will
result in the success of the Company.
Other Risks. No assurance can be given that the Company will be successful
in achieving its stated objectives, that the Company's business is undertaken by
the Company, will generate cash sufficient to operate the business of the
Company or that other parties entering into agreements relating to the Company's
business will meet their respective obligations.
Dividends. The Company's Board of Directors presently intends to cause the
Company to follow a policy of retaining earnings, if any, for the purpose of
increasing the net worth and reserves of the Company. Therefore, there can be no
assurance that any holder of Common Stock will receive any cash, stock or other
dividends on his shares of Common Stock. Future dividends on Common Stock, if
any, will depend on the future earnings, financing requirements and other
factors.
Additional Securities Available for Issuance. The Company's Certificate of
Incorporation authorizes the issuance of 100,000,000 shares of Common Stock.
Accordingly, including those purchasing the shares offered with the sale of this
offering, investors will be dependent upon the judgement of management in
connection with the future issuance and sale of shares of the Company's capital
stock, in the event purchasers can be found for such securities.
<PAGE>
USE OF PROCEEDS
The Company will incur expenses in connection with the Offering in an
amount anticipated not to exceed $1,000 for legal fees, accounting fees, filing
fees, printing costs and other expenses. If the maximum number of Shares are
sold, the Company anticipates that the net proceeds to it from the Offering will
be as follows:
Item Maximum
Shares Sold
Gross Proceeds of Offering $100,000.00
Offering Expenses
Cost of Offering $ 1,000.00
TOTAL PROCEEDS RECEIVED: $ 99,000.00
Operating Expenses
Working Capital $ 24,000.00
Consulting $ 75,000.00
TOTAL $ 99,000.00
NET FUNDS AVAILABLE TO COMPANY
The Company estimates that the costs of the Offering will be as follows:
(i) legal fees of approximately $300.00, (ii) accounting fees of approximately
$300 and (iii) printing and other miscellaneous costs of approximately $100. A
sales commissions will be paid only to NASD broker/dealers and no other person
will receive any commissions or remuneration from the Company.
The net proceeds of this offering, assuming all the Shares are sold, will
be sufficient to sustain the planned activities of the Company for a period of 6
months, depending upon the number of Shares sold in the offering and other
factors. Even if all the Shares offered hereunder are sold, the Company will
require additional capital in order to fund continued development activities and
capital expenditures that must be made. The Company's business plan is based on
the premise that additional funding will be obtained through funds generated
from operations, the exercising of the options, additional offerings of its
securities, or other arrangements. There can be no assurance that any securities
offerings will take place in the future, or that funds sufficient to meet any of
the foregoing needs or plans will be raised from operations or any other source.
<PAGE>
DESCRIPTION OF SECURITIES
The following discussion describes the stock and other securities of the
Company.
General. The Company currently has 100,000,000 authorized common shares,
par value $.001 per share, of which 9,400,000 common shares were issued and
outstanding as of the date of this Placement. All of the outstanding common
shares of the Company are fully paid for and nonassessable.
Voting Rights. Each share of the 9,400,000 shares of the Company's common
stock held by its current shareholders is entitled to one vote at shareholders
meetings.
Dividends. The Company has never paid a dividend and does not anticipate
doing so in the near future.
Miscellaneous Rights and Provisions. Shares of the Company's common stock
have no preemptive rights. The Shares do not have any conversion rights, no
redemption or sinking fund provisions, and are not liable to further call or
assessment. The Shares, when paid for by Investors, will be fully paid and
nonassessable. Each share of the Company's common shares is entitled to a pro
rata share in any asset available for distribution to holders of equity
securities upon the liquidation of the Company.
TERMS OF THE OFFERING
The Company is offering to qualified investors a maximum of 100,000 Shares
at a purchase price of $0.25 per share of the Company's common stock. The
Company may, in its sole discretion, terminate the offering at any time. The
Offering will close on the earliest of September 31st , 1997 or the election of
the Company when all of the Shares are sold, in no event later than September
31st , 1997. The minimum subscription is $2,500 (10,000 Shares) per Investor,
although the Company, in its sole discretion, may accept subscriptions for
lesser amounts.
Terms of Sale: The Company hereby agrees to sell to the purchaser and the
purchaser hereby agrees to subscribe for 10,000 shares in the capital of the
Company (the Shares) for a purchase of $0.25 per share for an aggregate purchase
of $2,500 ( the Purchase Funds).
<PAGE>
Constitution of Shares: Each share consists of one fully paid and
non-assessable common share in the capital stock (the Share) of the Company.
The Shares are being offered and sold by the Company under the exemption
from registration contained in Rule 504 under Regulation D and related
exemptions from state registration requirements. Rule 504 permits the Company to
offer and sell its stock in an amount not exceeding $1,000,000 to an unlimited
number of persons. Until 1992, Rule 504(b)(2)(ii) imposed a limited disclosure
obligation of all issuers such as the Company which was intended to ensure that
investors in a Rule 504 transaction were clearly advised of the restricted
character of the securities being offered for sale. This requirement was
eliminated in July, 1992 at which time the Securities and Exchange Commission
adopted an amendment to Rule 504 that eliminated all limitations on the manner
of offering of stock under that rule and/or the resale of stock purchased in
reliance on that rule. Therefore, following adoption of the 1992 amendment, the
securities being offered and sold by the Company pursuant to the present
Offering are available for immediate resale by nonaffiliates of the issuer.
<PAGE>
The Shares are being offered on a "best efforts" basis by the Company and
certain expenses of the Offering will be paid from the proceeds of the Offering.
The Company anticipates that such expenses will not exceed $5,000 as detailed in
the Use of Proceeds.
DIRECTORS, OFFICERS AND KEY PERSONNEL OF THE COMPANY
Officers and Directors. The following information sets forth the names of
the officers and directors of the Company, their present position with the
Company and biographic information:
NAME POSITION
Mr. Ken Finkelstein President and Director
Ms. Jasbinder Chohan Director, Secretary and Treasurer
Mr. Narinder Thouli Director
Mr. Trevor Smith Director
Mr. Michael Wagget Director
REMUNERATION OF DIRECTORS AND OFFICERS
Directors of the Company who are also employees of the Company receive no
additional compensation for their services as Directors. The Company intends, in
the future, to pay Directors who are not employees of the Company, compensation
of $500 per Director's Meeting, as well as reimbursements of any out of pocket
expenses incurred in the Company's behalf.
REPORTS
The books and records of the Company will be maintained by the Company. The
books of account and records shall be kept at the principal place of business of
San Marino Minerals, Inc., and each shareholder, or his duly authorized
representatives, shall have upon giving ten (10) days prior notice, access
during reasonable business hours to such books and records, and the right to
inspect and copy them. Within 120 days after the close of each fiscal year,
reports will be distributed to the shareholders which will include financial
statements (including a balance sheet and statements of income, shareholder's
equity, and cash flows) prepared in accordance with generally accepted
accounting principals, with a reconciliation to the tax information
supplementary supplied, accompanied by a copy of the accountant's report.
<PAGE>
LEGAL MATTERS
Gary R. Blume, Esquire, 11801 North Tatum Blvd, Suite 108, Phoenix,
Arizona, 85028 will pass upon certain matters for the Company.
LITIGATION
The Company is not presently involved in any material litigation or other
legal proceedings.
ADDITIONAL INFORMATION
In the opinion of the Board of Directors of the Company, this memorandum
contains a fair presentation of the subjects discussed herein and does not
contain a misstatement of material fact or fail to state a material fact
necessary to make any statements made herein not misleading. Persons to whom
offers are made will be furnished with such additional information concerning
the Company and other matters discussed herein as they, or their purchaser
representative or other advisors, may reasonably request. The Company shall, to
the extent such information is available or can be acquired without unreasonable
effort or expense, endeavour to provide the information to such persons. All
offerees are urged to make such personal investigations, inspections or
inquiries as they deem appropriate.
Questions or requests for additional information may be directed to Mr.
Michael Wagget by calling (415) 474-7047. Requests for additional copies of this
Memorandum or assistance in executing subscription documents may be directed to
the Company.
STATE RESTRICTIONS AND DISCLOSURES
FOR UNREGISTERED SECURITIES OFFERINGS
NOTICE TO ARIZONA RESIDENTS:
These securities are being sold in reliance upon Arizona's Limited Offering
exemption from registration pursuant to A.R.S. 441844.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE ARIZONA
SECURITIES ACT, AS AMENDED, AND THEREFORE, CANNOT BE TRANSFERRED OR RESOLD
UNLESS THEY ARE REGISTERED UNDER SUCH ACT OR AN EXEMPTION THEREFROM IS
AVAILABLE.
<PAGE>
As a purchaser of such securities hereby represent that I understand these
securities cannot be resold without registration under the Arizona Securities
Act or an exemption therefrom. I am not an underwriter within the meaning of
A.R.S 441801(17), and I am acquiring these securities for myself, not for other
persons. If qualifying as a nonaccredited investor, I further represent that
this investment does not exceed 20% of my net worth ( excluding principal
residence, furnishings therein and personal automobiles).
NOTICE TO CALIFORNIA RESIDENTS:
These securities are being sold in reliance upon California's Limited
Offering Exemption. 25102(f) of the California Code, as amended.
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS MEMORANDUM HAS NOT
BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA
AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFROM PRIOR TO SUCH QUALIFICATIONS IS UNLAWFUL, UNLESS THE
SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATIONS BY SECTION 25100, 25102 OR
26105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA DOES NOT
RECOMMEND OR ENDORSE THE PURCHASE OF THESE SECURITIES.
NOTICE TO COLORADO RESIDENTS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE COLORADO SECURITIES ACT OF 1981 BY REASON OF SPECIFIC
EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY
PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE COLORADO SECURITIES ACT OF 1981, IF SUCH REGISTRATION
IS REQUIRED.
NOTICE TO NEW YORK RESIDENTS:
THIS PRIVATE PLACEMENT MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY
THE ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE
STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION OF THE CONTRARY IS UNLAWFUL.
<PAGE>
THIS PRIVATE PLACEMENT MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF
MATERIAL FACT AND DOES NOT OMIT ANY MATERIAL FACT NECESSARY TO MAKE THE
STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS
PURPOSED TO BE SUMMARIZED HEREIN.
Purchaser Statement:
I understand that this Offering of Shares has not been reviewed by the
Attorney General of the State of New York because of the Offeror's
representations that this intended to be a nonpublic Offering pursuant to the
Regulation D Rule 504 or 505, and that if all of the conditions and limitations
of Regulation D are not complied with, the Offering will be resubmitted to the
Attorney General for amended exemption. I understand that any literature used in
connection with this Offering has not been previously filed with the Attorney
General and has not been reviewed by the Attorney General. This Investment Unit
is being purchased for my own account for investment, and not for distribution
or resale to others. I agree that I will not sell or otherwise transfer these
securities unless they are registered under the Federal Securities Act of 1933
or unless an exemption from such registration is available. I represent that I
have adequate means of providing for my current needs and possible personal
contingencies of financial problems, and that I have no need for liquidity of
this investment.
It is understood that all documents, records and books pertaining to this
investment have been made available to my attorney, my accountant, or my offeree
representative and myself, and that, upon reasonable notice, the books and
records of the issuer will be available for inspection by investors, at
reasonable hours at the principal place of business.
<PAGE>
EXHIBITS
San Marino Minerals, Inc.
SUBSCRIPTION DOCUMENT
1. The undersigned hereby subscribes for ___________ common stock (hereinafter
"Shares"), as described in the Private Offering Memorandum dated August 12th ,
1997 ("Memorandum"), of San Marino Minerals, Inc., a Florida corporation (the
"Company"), being offered by the Company for a purchase price of $0.25 per Unit
and tenders herewith the sum of $________________ in payment therefore, together
with tender of this Subscription Document.
2. The undersigned represents and warrants that he is a bona fide resident of
the State of _________________ .
3 The undersigned acknowledges:
a. Receipt of a copy of the Private Offering Memorandum;
b. That this subscription, if accepted by the Company, is legally binding and
irrevocable;
c. The Company is a development stage corporation with limited financial and
operating history;
d. That the Shares have not been registered under the Securities Act of 1933, as
amended, in reliance upon exemptions contained in that Act, and that the Shares
have not been registered under the securities acts of any state in reliance upon
exemptions contained in certain state's securities laws; and
e. That the representations and warranties provided in this Subscription
Document are being relied upon by the Company as the basis for the exemption
from the registration requirements of the Securities Act of 1933 and of the
applicable state's securities laws.
4. The undersigned represents and warrants as follows:
a. That the undersigned subscriber is purchasing said Shares as an investment
and said Shares are purchased solely for the undersigned's own account.
<PAGE>
b. That the undersigned subscriber has sufficient knowledge and experience in
financial and business matters to evaluate the merits and risks of an investment
in the Shares;
c. That the undersigned subscriber is able to bear the economic risk of an
investment in the Shares;
d. That the undersigned subscriber has read and is thoroughly familiar with the
Private Offering Memorandum and represents and warrants that he is aware of the
high degree of risk involved in making investment in the Shares;
e. That the undersigned subscriber's decision to purchase the Shares is based
solely on the information contained in the Private Offering Memorandum and on
written answers to such questions as he has raised concerning the transaction;
f. That the undersigned subscriber is purchasing the Shares directly from the
Company and understands that neither the Company nor the Offering is associated
with; endorsed by nor related in any way with any investment company, national
or local brokerage firm or broker dealer. The undersigned subscriber's decision
to purchase the Shares is not based in whole or in part on any assumption or
understanding that an investment company, natio or local brokerage firm or other
broker dealer is involved in any way in this Offering or has endorsed or
otherwise recommended an investment in these Shares.
g. That the undersigned subscriber has an investment portfolio of sufficient
value that he could suitably absorb a high risk illiquid addition such as an
investment in the Shares.
h. The undersigned further represents that (INITIAL APPROPRIATE CATEGORY):
[ ] I am a natural person whose individual net worth, or joint worth with my
spouse at the time of purchase, exceeds $200,000;
[ ] I am a natural person who had an individual income in excess of $50,000 or
joint income with my suppose in excess of $50,000 in each of the two most recent
years and who reasonably expects an income in excess of those amounts in the
current year;
<PAGE>
i. That Regulation D requires the Company to conclude that each investor has
sufficient knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the shares, or to
verify that the investor has retained the services of one or more purchaser
representatives for the purpose of evaluating the risks of investment in the
shares represents and warrants that he has such knowledge and experience in
financial and business matters that he is capable of evaluating the merits and
risks of an investment in the shares and of making an informed investment
decision and will not require a purchaser representative.
5. The undersigned understands and agrees that this subscription is made subject
to each of the following terms and conditions: a. The Company shall have the
right to accept or reject this subscription, in whole or part, for any reason.
Upon receipt of each Subscription Document, the Company shall have until
September 31st , 1997 in which to accept or reject it. If no action is taken by
the Company within said period, the subscription shall be deemed to have been
accepted. In each case where the subscription is rejected, the Company shall
return the entire amount without interest;
b. That the undersigned subscriber will, from time to time, execute and deliver
such documents or other instruments as may be requested by the Company in order
to aid the Company in the consummation of the transactions contemplated by the
Memorandum.
6. The undersigned hereby constitutes and appoints the Company, with full power
of substitution, as attorneyinfact for the purpose of executing and delivering,
swearing to and filing, any documents or instruments related to or required to
make any necessary clarifying or conforming changes in the Subscription Document
so that such document is correct in all respects.
7. As used herein, the singular shall include the plural and the masculine shall
include the feminine where necessary to clarify the meaning of this Subscription
Document. All terms not defined herein shall have the same meanings as in the
Memorandum.
IN WITNESS WHEREOF, the undersigned has executed this Subscription Document this
_____ day of ____________, 1997.
Number of Shares _________
Total amount tendered $ ________
INDIVIDUAL OWNERSHIP: __________________________________________
Name ( Please Type or Print )
- - ------------------------------------------
Signature
- - ------------------------------------------
Social Security Number
<PAGE>
JOINT OWNERSHIP: __________________________________________
Name (Please Type or Print)
__________________________________________
Signature
__________________________________________
Social Security Number
OTHER OWNERSHIP __________________________________________
Name (Please Type or Print)
By:_______________________________________
( Signature )
- - ------------------------------------------
Title
- - ------------------------------------------
Employer Identification Number
ADDRESS:________________________________________________________________________
Street City State Zip
Phone ( Residence )_____________________ ; Phone ( Business ) __________________
I,________________________________, do hereby certify that the representations
made herein concerning my financial status are true, and that all other
statements contained herein are true, accurate and complete to the best of my
knowledge.
Date: ___________________ , 1997.
Signature____________________________________
<PAGE>
CERTIFICATE OF DELIVERY
I hereby acknowledge that I delivered the foregoing Subscription
Document to_________ _________________ on the _______ day of
__________________ , 1997.
Signature _________________________________
ACCEPTANCE
This Subscription is accepted by SAN MARINO MINERALS, INC., as of the
______ day of _____________ , 1997.
SAN MARINO MINERALS, INC.
By:_____________________________
Director
<PAGE>
<PAGE>
CONFIDENTIAL
NOT TO BE REPRODUCED OR DISTRIBUTED
Memorandum No.
Name of Offeree :
PRIVATE PLACEMENT MEMORANDUM OF
Centaur Technologies, Inc.
(a Nevada Corporation) (" Company ")
3,100,000 Common Shares
$.00001 Par Value
$0.05 Per Share
MINIMUM INVESTMENT
10,000 Shares
$500.00
Principal Executive Offices:
216 1628 West 1st Avenue
Vancouver, BC, V6J 1G1
(604) 659-5009
The date of this Memorandum is December 11, 1998
<PAGE>
CENTAUR TECHNOLOGIES, INC.
Type of Securities Offered : Common Shares, $0.00001 par value.
Number of Shares Offered : 3,100,000 Shares
Price per security : $0.05 per Share.
Total proceeds : If all shares sold : $155,000.00
Is a commissioned selling agent selling the securities in this offering ?
[ ] Yes [ X ] No
If yes , what percent is commission of price to public ?
Is there other compensation to selling agent(s) ?
[ ] Yes [ X ] No
Is there a finder's fee or similar payment to any person ?
[ ] Yes [ X ] No
Is there an escrow of proceeds until minimum is obtained ?
[ ] Yes [ X ] No
Is this offering limited to members of a special group, such as employees of the
Company or individuals ?
[ ] Yes [ X ] No
Is transfer of the securities restricted ?
[ ] Yes [ X ] No
<PAGE>
THIS OFFERING OF SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR
HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. THE OFFERING WILL
TERMINATE UPON THE EARLIER OF ALL OF THE SHARES OR JANUARY 31ST, 1999. THE
COMPANY IS NOT REQUIRED TO SELL ANY MINIMUM NUMBER OF SHARES IN ORDER TO SELL
SHARES IN THE OFFERING. THE COMPANY MAY, IN ITS DISCRETION, CONDUCT MULTIPLE
CLOSINGS. (SEE " DESCRIPTION OF THE OFFERING." )
THIS MEMORANDUM HAS BEEN PREPARED SOLELY FOR USE IN CONNECTION WITH THE PRIVATE
PLACEMENT OF THE SHARES OFFERED HEREBY AND MAY NOT BE REPRODUCED OR USED FOR ANY
OTHER PURPOSE. THE OFFEREE AGREES TO RETURN TO THE COMPANY THIS MEMORANDUM AND
ALL ATTACHMENTS AND RELATED DOCUMENTATION IF THE OFFEREE DOES NOT SUBSCRIBE TO
PURCHASE SHARES IN THE OFFERING.
THESE SECURITIES ARE BEING OFFERED ONLY TO INVESTORS WHO THE OFFEROR BELIEVES
HAVE THE QUALIFICATIONS NECESSARY TO PERMIT THE SECURITIES TO BE OFFERED AND
SOLD UNDER APPLICABLE EXEMPTIONS FROM REGISTRATION UNDER THE ACT AND
QUALIFICATION UNDER APPLICABLE STATE STATUTES. THE OFFEROR WILL BE THE SOLE
JUDGE OF WHETHER AN INVESTOR POSSESSES SUCH QUALIFICATIONS. NOTWITHSTANDING
DELIVERY OF THIS MEMORANDUM AND ASSOCIATED DOCUMENTATION, THE OFFEROR DOES NOT
INTEND TO EXTEND AN OFFER TO SELL OR TO SOLICIT AN OFFER TO BUY THESE SECURITIES
UNTIL THE OFFEROR DETERMINES THAT THE OFFEREE IS QUALIFIED AND COMMUNICATES SUCH
DETERMINATION TO INVESTORS IN WRITING. THE SHARES ARE BEING OFFERED IN A PRIVATE
PLACEMENT TO A LIMITED NUMBER OF INVESTORS. THIS MEMORANDUM DOES NOT CONSTITUTE
AN OFFER OR SOLICITATION IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT PERMITTED UNDER APPLICABLE LAW OR ANY FIRM OR INDIVIDUAL WHO DOES NOT
POSSESS THE QUALIFICATIONS DESCRIBED IN THIS MEMORANDUM.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT"), OR THE SECURITIES LAWS OF FLORIDA OR OTHER STATES, AND ARE
BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH LAWS. THERE IS A PUBLIC MARKET FOR SECURITIES
OF THE COMPANY. EVEN IF SUCH A MARKET DID NOT EXIST, PURCHASERS OF SHARES WILL
BE REQUIRED TO REPRESENT THAT THE SHARES ARE BEING ACQUIRED FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO SALE OR DISTRIBUTION, AND PURCHASERS WILL NOT BE
ABLE TO RESELL THE SHARES UNLESS THE SHARES ARE REGISTERED UNDER THE ACT AND
QUALIFIED UNDER THE APPLICABLE STATE STATUTES (UNLESS AN EXEMPTION FROM SUCH
REGISTRATION AND QUALIFICATION IS AVAILABLE). PURCHASERS OF THE SHARES SHOULD BE
PREPARED TO BEAR THE ECONOMIC RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
<PAGE>
THE PURCHASE OF THESE SECURITIES WILL ENTAIL A HIGH DEGREE OF RISK. THESE
SECURITIES ARE SUITABLE ONLY FOR PERSONS WHO HAVE SUBSTANTIAL FINANCIAL
RESOURCES AND HAVE NO LIQUIDITY IN THIS INVESTMENT. NO ONE SHOULD INVEST IN THE
SHARES WHO IS NOT PREPARED TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE
INVESTORS SHOULD CONSIDER CAREFULLY THE RISK FACTORS INDICATED UNDER " RISK
FACTORS."
INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS MEMORANDUM OR ANY
COMMUNICATION, WHETHER WRITTEN OR ORAL, FROM THE COMPANY, ITS FOUNDERS,
MANAGEMENT, EMPLOYEES OR AGENTS, AS LEGAL, TAX, ACCOUNTING OR OTHER EXPERT
ADVICE. EACH INVESTOR SHOULD CONSULT THEIR OWN COUNSEL, ACCOUNTANT AND OTHER
PROFESSIONAL ADVISORS AS TO LEGAL,TAX, ACCOUNTING, AND RELATED MATTERS
CONCERNING HIS INVESTMENT AND ITS SUITABILITY FOR THEM.
NO PERSON (OTHER THAN OFFICERS OF THE COMPANY TO WHOM REQUESTS ARE DIRECTED FOR
ADDITIONAL INFORMATION CONCERNING THIS OFFERING) IS AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS (WHETHER ORAL OR WRITTEN) IN CONNECTION
WITH THIS OFFERING EXCEPT SUCH INFORMATION AS IS CONTAINED IN THIS PRIVATE
PLACEMENT MEMORANDUM AND THE ATTACHMENTS THERETO AND DOCUMENTS REFERRED TO
HEREIN . ONLY INFORMATION OR REPRESENTATIONS CONTAINED HEREIN AND THEREIN MAY BE
RELIED UPON AS HAVING BEEN AUTHORIZED.
THE SECURITIES OFFERED HEREBY WILL BE SOLD TO SUBJECT TO THE STOCK SUBSCRIPTION
AGREEMENT ATTACHED AS ATTACHMENT A OF THIS MEMORANDUM, WHICH CONTAINS CERTAIN
REPRESENTATIONS, WARRANTIES, TERMS AND CONDITIONS. EACH INVESTOR SHOULD
CAREFULLY REVIEW THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT BEFORE INVESTING.
This Company :
[ ] Has never conducted operations.
[ x ] Is in the development stage.
[ ] Is currently conducting operations.
[ ] Has shown a profit in the last fiscal year.
[ ] Other ( Specify ) ______________________
( Check at one , as appropriate )
This offering has been registered for offer and sale in the following states :
State State File No Effective Date
<PAGE>
SUMMARY OF THE OFFERING
The following material is intended to summarize information contained elsewhere
in this Memorandum. This summary is qualified in its entirety by express
reference to the Memorandum and the exhibits referred to therein. Each
prospective investor is urged to read this Memorandum in its entirety.
Centaur Technologies, Inc., a Nevada corporation (the " Company "), is the
issuer of the Shares. The address of the Company is Suite 216 1628 West 1st
Ave., Vancouver, BC, V6J 1G1.
The Offering. The Company is offering up to 3,100,000 of its common shares, par
value $.00001 per share (the "Shares"). The Minimum investment for an Investor
is 10,000 Shares, or $500.00. The Company, in its sole discretion, may accept
subscriptions for up to an aggregate of 10,000 Shares, or $500.00 until January
31st, 1999, or until such earlier date as the Company determines that this
Offering shall be terminated. In its sole discretion, the Company may elect to
terminate this Offering even if subscriptions for Shares have been received and
accepted by the Company. See "Terms of the Offering" and "Subscription for
Shares".
Company's Business: The Company is engaged in the development of multiple
electronic initiatives through the Internet.
Risk Factors: The offering involves speculative investment with substantial
risks, including those risks associated with the industry. Although the Company
will use its best efforts to protect the investments of the Investors, there is
no assurance that the Company's efforts will be successful. Accordingly, a
prospective Investor should not view the Company or its Officers, Directors,
employees or agents as guarantors of the financial success of an investment in
the Shares. See "Risk Factors".
Limited Transferability of the Shares. The Shares have not been registered under
the 1933 Act or the securities laws of any state. The Shares of common stock
purchased pursuant to this Offering will not be "restricted" shares because the
shares are offered under Rule 504 and this offering is excluded from the
provisions of Regulation D pertaining to restricted shares. This does not mean,
however, that a public market does exist for the Shares. Currently there is a
market for the Shares on NASDAQ - OTC Bulletin Board . See "Risk Factors" and
Terms of the Offering".
Limitation of Liability. Except for the amounts paid by Investors for their
purchase of any Shares, and as required by Nevada State law, no investor will be
liable for any debts of the Company or be obligated to contribute any additional
capital or funds to the Company. See " Risk Factors".
<PAGE>
Suitability Standards. Each Investor must meet certain eligibility standards
established by the Company for the purchase of the Shares. See "Terms of the
Offering" and "Subscription for Shares".
Use of Proceeds. The Company plans to use the money received from this offering
to cover the costs involved with public relations and building of investor
awareness. The funds will not be deposited in an escrow account and will be
available to the Company immediately. No minimum amount of Shares is required to
be sold.
THE COMPANY
Exact corporate name: Centaur Technologies, Inc.
State and date of incorporation: Florida State
January 13, 1997.
Street address of principal office: 216 1628 West 1st Ave
Vancouver, BC, V6J 1G1
(604) 659-5009
Fiscal Year: December 31st.
PRODUCTS
The Company is engaged in the development of multiple electronic initiatives
through the Internet.
<PAGE>
RISK FACTORS
An investment in the Shares involves a high degree of risk. No prospective
Investor should acquire the Shares unless he can afford a complete loss of his
investment. The risks described below are those which the Company deems most
significant as of the date hereof. Other factors which may have a material
impact on the operations of the Company may not be foreseen. In addition to the
other factors set forth elsewhere in this Memorandum, prospective Investors
should carefully consider the following specific risk factors:
A. OPERATING RISKS
General. The economic success of an investment in the Shares depends, to a
large degree, upon many factors over which the Company has no control. These
factors include general economic, industrial and international conditions;
changes in technology; inflation or deflation; fluctuation in interest rates;
the availability of, and fluctuations in the money supply. The extent, type and
sophistication of the Companys competition; and government regulations.
Operations. The Company is a development stage corporation, with limited
operating and financial history.
Dependence on Key Personnel. The Company's success will depend, in large
part, upon the talents and skills of key management personnel. To the extent
that any of its management personnel is unable or refuses to continue
association with the Company, a suitable replacement would have to be found.
There is no assurance that the Company would be able to find suitable
replacements for such personnel, or that suitable person.
Lack of Adequate Capital. Additional capital will be required in the
Companys future operations. In the absence of any additional funding, the
Company's operations may be affected negatively. Therefore, the Company's
management will be careful and use its best judgement in directing the affairs
of the Company in a manner that maximizes its chances of success and,
accordingly, the best chances of raising future funding.
Inherent Business Risks. The business that the Company is engaged in
involves substantial and inherent risks associated with an emerging company with
limited financial resources.
B. INVESTMENT RISKS
Speculative Investment. The Shares are a very speculative investment. There
can be no assurance that the Company will attain its objective and it is very
likely that the Company will not be able to advance any business activities and
Investors could lose their entire investments.
<PAGE>
Arbitrary Purchase Price; No Market. The purchase price for the Shares has
been arbitrarily determined by the Company, and is not necessarily indicative of
their value. No assurance is or can be given that the Shares, although
transferable, could be sold for the purchase price, or for any amount. There
currently is a market for resale of the Shares.
Restriction of Transferability. While the Company believes that no
restriction exists for the transfer of the Shares being offered by the Company,
an investment in the Shares may be a long term investment. Investors who do not
wish or who are not financially able to hold the Shares for a substantial period
of time are advised against purchasing Shares. The Shares are not registered
under the 1933 Act or under the securities laws of any state, but are being
offered by the Company under the exemption from registration provided by Rule
504 under Regulation D and related state and foreign exceptions.
"Best Efforts" Offering. The Shares are being offered on a "best efforts"
basis by the Company. No person or entity is committed to purchase or take down
any of the Shares offered pursuant to this Offering. No escrow account is
maintained and no minimum amount is required to be sold. Funds will be available
to the Company upon receipt.
Management and Operation Experience. The Company's Officers, Directors and
other personnel have engaged in a variety of businesses and have been involved
in business financing, operations, marketing and research but their experience
in these fields is limited. There is no assurance that such experience will
result in the success of the Company.
Other Risks. No assurance can be given that the Company will be successful
in achieving its stated objectives, that the Company's business is undertaken by
the Company, will generate cash sufficient to operate the business of the
Company or that other parties entering into agreements relating to the Company's
business will meet their respective obligations.
Dividends. The Company's Board of Directors presently intends to cause the
Company to follow a policy of retaining earnings, if any, for the purpose of
increasing the net worth and reserves of the Company. Therefore, there can be no
assurance that any holder of Common Stock will receive any cash, stock or other
dividends on his shares of Common Stock. Future dividends on Common Stock, if
any, will depend on the future earnings, financing requirements and other
factors.
Additional Securities Available for Issuance. The Company's Certificate of
Incorporation authorizes the issuance of 100,000,000 shares of Common Stock.
Accordingly, including those purchasing the shares offered with the sale of this
offering, investors will be dependent upon the judgement of management in
connection with the future issuance and sale of shares of the Company's capital
stock, in the event purchasers can be found for such securities.
<PAGE>
USE OF PROCEEDS
The Company will incur expenses in connection with the Offering in an
amount anticipated not to exceed $5,000 for legal fees, accounting fees, filing
fees, printing costs and other expenses. If the maximum number of Shares are
sold, the Company anticipates that the net proceeds to it from the Offering will
be as follows:
Item Maximum
Shares Sold
Gross Proceeds of Offering $ 155,000.00
Offering Expenses
Cost of Offering $ 5,000.00
TOTAL PROCEEDS RECEIVED: $ 150,000.00
Operating Expenses
Working Capital $ 25,000.00
Internet Web Site Development $ 75,000.00
Marketing, Media Relations $ 50,000.00
TOTAL $ 150,000.00
NET FUNDS AVAILABLE TO COMPANY
The Company estimates that the costs of the Offering will be as follows:
(i) legal fees of approximately $2,500.00, (ii) accounting fees of approximately
$1,000 and (iii) printing and other miscellaneous costs of approximately $1,500.
A sales commissions will be paid only to NASD broker/dealers and no other person
will receive any commissions or remuneration from the Company.
The net proceeds of this offering, assuming all the Shares are sold, will
be sufficient to sustain the planned activities of the Company for a period of 6
months, depending upon the number of Shares sold in the offering and other
factors. Even if all the Shares offered hereunder are sold, the Company will
require additional capital in order to fund continued development activities and
capital expenditures that must be made. The Company's business plan is based on
the premise that additional funding will be obtained through funds generated
from operations, the exercising of the options, additional offerings of its
securities, or other arrangements. There can be no assurance that any securities
offerings will take place in the future, or that funds sufficient to meet any of
the foregoing needs or plans will be raised from operations or any other source.
<PAGE>
DESCRIPTION OF SECURITIES
The following discussion describes the stock and other securities of the
Company.
General. The Company currently has 100,000,000 authorized common shares,
par value $.00001 per share, of which 173,093 common shares were issued and
outstanding as of the date of this Placement. All of the outstanding common
shares of the Company are fully paid for and nonassessable.
Voting Rights. Each share of the 173,093 shares of the Company's common
stock held by its current shareholders is entitled to one vote at shareholders
meetings.
Dividends. The Company has never paid a dividend and does not anticipate
doing so in the near future.
Options. The Company currently has 50,000 options outstanding in relation
to its common stock, no options have been exercised to date.
Miscellaneous Rights and Provisions. Shares of the Company's common stock
have no preemptive rights. The Shares do not have any conversion rights, no
redemption or sinking fund provisions, and are not liable to further call or
assessment. The Shares, when paid for by Investors, will be fully paid and
nonassessable. Each share of the Company's common shares is entitled to a pro
rata share in any asset available for distribution to holders of equity
securities upon the liquidation of the Company. TERMS OF THE OFFERING
The Company is offering to qualified investors a maximum of 3,100,000
Shares at a purchase price of $0.05 per share of the Company's common stock. The
Company may, in its sole discretion, terminate the offering at any time. The
Offering will close on the earliest of January 31st , 1999 or the election of
the Company when all of the Shares are sold, in no event later than January 31st
, 1999. The minimum subscription is $5,000 (10,000 Shares) per Investor,
although the Company, in its sole discretion, may accept subscriptions for
lesser amounts.
Terms of Sale: The Company hereby agrees to sell to the purchaser and the
purchaser hereby agrees to subscribe for 10,000 shares in the capital of the
Company (the Shares) for a purchase of $0.05 per share for an aggregate purchase
of $5,000.00 ( the Purchase Funds).
<PAGE>
Constitution of Shares: Each share consists of one fully paid and
non-assessable common share in the capital stock (the Share) of the Company.
The Shares are being offered and sold by the Company under the exemption
from registration contained in Rule 504 under Regulation D and related
exemptions from state registration requirements. Rule 504 permits the Company to
offer and sell its stock in an amount not exceeding $1,000,000 to an unlimited
number of persons. Until 1992, Rule 504(b)(2)(ii) imposed a limited disclosure
obligation of all issuers such as the Company which was intended to ensure that
investors in a Rule 504 transaction were clearly advised of the restricted
character of the securities being offered for sale. This requirement was
eliminated in July, 1992 at which time the Securities and Exchange Commission
adopted an amendment to Rule 504 that eliminated all limitations on the manner
of offering of stock under that rule and/or the resale of stock purchased in
reliance on that rule. Therefore, following adoption of the 1992 amendment, the
securities being offered and sold by the Company pursuant to the present
Offering are available for immediate resale by nonaffiliates of the issuer.
<PAGE>
The Shares are being offered on a "best efforts" basis by the Company and
certain expenses of the Offering will be paid from the proceeds of the Offering.
The Company anticipates that such expenses will not exceed $5,000 as detailed in
the Use of Proceeds.
DIRECTORS, OFFICERS AND KEY PERSONNEL OF THE COMPANY
Officers and Directors. The following information sets forth the names of
the officers and directors of the Company, their present position with the
Company and biographic information:
NAME POSITION
Mr. Herdev S. Rayat President and Director
Mr. Wes Janzen Director, Secretary and Treasurer
Mr. Wes Kroeker Director
REMUNERATION OF DIRECTORS AND OFFICERS
Directors of the Company who are also employees of the Company receive no
additional compensation for their services as Directors. The Company intends, in
the future, to pay Directors who are not employees of the Company, compensation
of $500 per Director's Meeting, as well as reimbursements of any out of pocket
expenses incurred in the Company's behalf.
REPORTS
The books and records of the Company will be maintained by the Company. The
books of account and records shall be kept at the principal place of business of
Centaur Technologies, Inc., and each shareholder, or his duly authorized
representatives, shall have upon giving ten (10) days prior notice, access
during reasonable business hours to such books and records, and the right to
inspect and copy them. Within 120 days after the close of each fiscal year,
reports will be distributed to the shareholders which will include financial
statements (including a balance sheet and statements of income, shareholder's
equity, and cash flows) prepared in accordance with generally accepted
accounting principals, with a reconciliation to the tax information
supplementary supplied, accompanied by a copy of the accountant's report.
<PAGE>
LEGAL MATTERS
Gary R. Blume, Esquire, 11801 North Tatum Blvd, Suite 108, Phoenix,
Arizona, 85028 will pass upon certain matters for the Company.
LITIGATION
The Company is not presently involved in any material litigation or other
legal proceedings.
ADDITIONAL INFORMATION
In the opinion of the Board of Directors of the Company, this memorandum
contains a fair presentation of the subjects discussed herein and does not
contain a misstatement of material fact or fail to state a material fact
necessary to make any statements made herein not misleading. Persons to whom
offers are made will be furnished with such additional information concerning
the Company and other matters discussed herein as they, or their purchaser
representative or other advisors, may reasonably request. The Company shall, to
the extent such information is available or can be acquired without unreasonable
effort or expense, endeavour to provide the information to such persons. All
offerees are urged to make such personal investigations, inspections or
inquiries as they deem appropriate.
Questions or requests for additional information may be directed to Mr.
Herdev S. Rayat by calling (604) 659-5009. Requests for additional copies of
this Memorandum or assistance in executing subscription documents may be
directed to the Company.
STATE RESTRICTIONS AND DISCLOSURES
FOR UNREGISTERED SECURITIES OFFERINGS
NOTICE TO ARIZONA RESIDENTS:
These securities are being sold in reliance upon Arizona's Limited Offering
exemption from registration pursuant to A.R.S. 441844.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE ARIZONA
SECURITIES ACT, AS AMENDED, AND THEREFORE, CANNOT BE TRANSFERRED OR RESOLD
UNLESS THEY ARE REGISTERED UNDER SUCH ACT OR AN EXEMPTION THEREFROM IS
AVAILABLE.
<PAGE>
As a purchaser of such securities hereby represent that I understand these
securities cannot be resold without registration under the Arizona Securities
Act or an exemption therefrom. I am not an underwriter within the meaning of
A.R.S 441801(17), and I am acquiring these securities for myself, not for other
persons. If qualifying as a nonaccredited investor, I further represent that
this investment does not exceed 20% of my net worth ( excluding principal
residence, furnishings therein and personal automobiles).
NOTICE TO CALIFORNIA RESIDENTS:
These securities are being sold in reliance upon California's Limited
Offering Exemption. 25102(f) of the California Code, as amended.
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS MEMORANDUM HAS NOT
BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA
AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFROM PRIOR TO SUCH QUALIFICATIONS IS UNLAWFUL, UNLESS THE
SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATIONS BY SECTION 25100, 25102 OR
26105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA DOES NOT
RECOMMEND OR ENDORSE THE PURCHASE OF THESE SECURITIES.
NOTICE TO COLORADO RESIDENTS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE COLORADO SECURITIES ACT OF 1981 BY REASON OF SPECIFIC
EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY
PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE COLORADO SECURITIES ACT OF 1981, IF SUCH REGISTRATION
IS REQUIRED.
NOTICE TO NEW YORK RESIDENTS:
THIS PRIVATE PLACEMENT MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY
THE ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE
STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION OF THE CONTRARY IS UNLAWFUL.
<PAGE>
THIS PRIVATE PLACEMENT MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF
MATERIAL FACT AND DOES NOT OMIT ANY MATERIAL FACT NECESSARY TO MAKE THE
STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS
PURPOSED TO BE SUMMARIZED HEREIN.
Purchaser Statement:
I understand that this Offering of Shares has not been reviewed by the
Attorney General of the State of New York because of the Offeror's
representations that this intended to be a nonpublic Offering pursuant to the
Regulation D Rule 504 or 505, and that if all of the conditions and limitations
of Regulation D are not complied with, the Offering will be resubmitted to the
Attorney General for amended exemption. I understand that any literature used in
connection with this Offering has not been previously filed with the Attorney
General and has not been reviewed by the Attorney General. This Investment Unit
is being purchased for my own account for investment, and not for distribution
or resale to others. I agree that I will not sell or otherwise transfer these
securities unless they are registered under the Federal Securities Act of 1933
or unless an exemption from such registration is available. I represent that I
have adequate means of providing for my current needs and possible personal
contingencies of financial problems, and that I have no need for liquidity of
this investment.
It is understood that all documents, records and books pertaining to this
investment have been made available to my attorney, my accountant, or my offeree
representative and myself, and that, upon reasonable notice, the books and
records of the issuer will be available for inspection by investors, at
reasonable hours at the principal place of business.
<PAGE>
EXHIBITS
Centaur Technologies, Inc.
SUBSCRIPTION DOCUMENT
1. The undersigned hereby subscribes for ___________ common stock (hereinafter
"Shares"), as described in the Private Offering Memorandum dated December
11, 1998 ("Memorandum"), of Centaur Technologies, Inc., a Nevada
corporation (the "Company"), being offered by the Company for a purchase
price of $0.05 per Unit and tenders herewith the sum of $________________
in payment therefore, together with tender of this Subscription Document.
2. The undersigned represents and warrants that he is a bona fide resident of
the State of _________________ .
3 The undersigned acknowledges:
a. Receipt of a copy of the Private Offering Memorandum;
b. That this subscription, if accepted by the Company, is legally binding and
irrevocable;
c. The Company is a development stage corporation with limited financial and
operating history;
d. That the Shares have not been registered under the Securities Act of 1933,
as amended, in reliance upon exemptions contained in that Act, and that the
Shares have not been registered under the securities acts of any state in
reliance upon exemptions contained in certain state's securities laws; and
e. That the representations and warranties provided in this Subscription
Document are being relied upon by the Company as the basis for the
exemption from the registration requirements of the Securities Act of 1933
and of the applicable state's securities laws.
4. The undersigned represents and warrants as follows:
a. That the undersigned subscriber is purchasing said Shares as an investment
and said Shares are purchased solely for the undersigned's own account.
<PAGE>
b. That the undersigned subscriber has sufficient knowledge and experience in
financial and business matters to evaluate the merits and risks of an
investment in the Shares;
c. That the undersigned subscriber is able to bear the economic risk of an
investment in the Shares;
d. That the undersigned subscriber has read and is thoroughly familiar with
the Private Offering Memorandum and represents and warrants that he is
aware of the high degree of risk involved in making investment in the
Shares;
e. That the undersigned subscriber's decision to purchase the Shares is based
solely on the information contained in the Private Offering Memorandum and
on written answers to such questions as he has raised concerning the
transaction;
f. That the undersigned subscriber is purchasing the Shares directly from the
Company and understands that neither the Company nor the Offering is
associated with; endorsed by nor related in any way with any investment
company, national or local brokerage firm or broker dealer. The undersigned
subscriber's decision to purchase the Shares is not based in whole or in
part on any assumption or understanding that an investment company, natio
or local brokerage firm or other broker dealer is involved in any way in
this Offering or has endorsed or otherwise recommended an investment in
these Shares.
g. That the undersigned subscriber has an investment portfolio of sufficient
value that he could suitably absorb a high risk illiquid addition such as
an investment in the Shares.
h. The undersigned further represents that (INITIAL APPROPRIATE CATEGORY):
[ ] I am a natural person whose individual net worth, or joint worth
with my spouse at the time of purchase, exceeds $200,000;
[ ] I am a natural person who had an individual income in excess of
$50,000 or joint income with my suppose in excess of $50,000 in each
of the two most recent years and who reasonably expects an income in
excess of those amounts in the current year;
<PAGE>
i. That Regulation D requires the Company to conclude that each investor has
sufficient knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the
shares, or to verify that the investor has retained the services of one or
more purchaser representatives for the purpose of evaluating the risks of
investment in the shares represents and warrants that he has such knowledge
and experience in financial and business matters that he is capable of
evaluating the merits and risks of an investment in the shares and of
making an informed investment decision and will not require a purchaser
representative.
5. The undersigned understands and agrees that this subscription is made
subject to each of the following terms and conditions: a. The Company shall
have the right to accept or reject this subscription, in whole or part, for
any reason. Upon receipt of each Subscription Document, the Company shall
have until January 31st , 1999 in which to accept or reject it. If no
action is taken by the Company within said period, the subscription shall
be deemed to have been accepted. In each case where the subscription is
rejected, the Company shall return the entire amount tendered without
interest;
b. That the undersigned subscriber will, from time to time, execute and
deliver such documents or other instruments as may be requested by the
Company in order to aid the Company in the consummation of the transactions
contemplated by the Memorandum.
6. The undersigned hereby constitutes and appoints the Company, with full
power of substitution, as attorneyinfact for the purpose of executing and
delivering, swearing to and filing, any documents or instruments related to
or required to make any necessary clarifying or conforming changes in the
Subscription Document so that such document is correct in all respects.
7. As used herein, the singular shall include the plural and the masculine
shall include the feminine where necessary to clarify the meaning of this
Subscription Document. All terms not defined herein shall have the same
meanings as in the Memorandum.
IN WITNESS WHEREOF, the undersigned has executed this Subscription Document this
_____ day of ____________, 1998.
Number of Shares _________
Total amount tendered $ ________
INDIVIDUAL OWNERSHIP: __________________________________________
Name ( Please Type or Print )
- - ------------------------------------------
Signature
- - ------------------------------------------
Social Security Number
<PAGE>
JOINT OWNERSHIP: __________________________________________
Signature _____________________________________________
Social Security Number ____________________________________________
OTHER OWNERSHIP __________________________________________
Name ( Please Type or Print )
By:_______________________________________
( Signature )
------------------------------------------
Title
------------------------------------------
Employer Identification Number
ADDRESS:____________________________________________________________________
Street City State Zip
Phone ( Residence )_____________________ ; Phone ( Business ) __________________
I,________________________________, do hereby certify that the
representations made herein concerning my financial status are true, and that
all other statements contained herein are true, accurate and complete to the
best of my knowledge.
Date: ___________________ , 1998.
Signature____________________________________
<PAGE>
CERTIFICATE OF DELIVERY
I hereby acknowledge that I delivered the foregoing Subscription Document
to_________ _________________ on the _______ day of __________________ , 1998.
__________________________________________
Signature
ACCEPTANCE
This Subscription is accepted by CENTAUR TECHNOLOGIES, INC., as of the
______ day of _____________ , 1998.
CENTAUR TECHNOLOGIES, INC.
By:_____________________________
Director
<PAGE>
CONFIDENTIAL
NOT TO BE REPRODUCED OR DISTRIBUTED
Memorandum No.
Name of Offeree :
PRIVATE PLACEMENT MEMORANDUM OF
Centaur Technologies, Inc.
(a Nevada Corporation) (" Company ")
7,500,000 Common Shares
$.00001 Par Value
$0.11 Per Share
MINIMUM INVESTMENT
$25,000.00
Principal Executive Offices:
216 - 1628 West 1st Avenue
Vancouver, BC, V6J 1G1
(604) 659-5009
The date of this Memorandum is March 2, 1999
<PAGE>
<TABLE>
CENTAUR TECHNOLOGIES, INC.
<CAPTION>
<S> <C>
Type of Securities Offered : Common Shares, $0.00001 par value.
Number of Shares Offered : 7,500,000 Shares
Price per security : $0.11 per Share.
Total proceeds : If all shares sold : $825,000.
</TABLE>
Is a commissioned selling agent selling the securities in this offering ?
[ ] Yes [ X ] No
If yes , what percent is commission of price to public ?
Is there other compensation to selling agent(s) ?
[ ] Yes [ X ] No
Is there a finder's fee or similar payment to any person ?
[ ] Yes [ X ] No
Is there an escrow of proceeds until minimum is obtained ?
[ ] Yes [ X ] No
Is this offering limited to members of a special group, such as employees of the
Company or individuals ?
[ ] Yes [ X ] No
Is transfer of the securities restricted ?
[ ] Yes [ X ] No
THIS OFFERING OF SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR
HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. THE OFFERING WILL
TERMINATE UPON THE EARLIER OF ALL OF THE SHARES OR OCTOBER 30th, 1998. THE
COMPANY IS NOT REQUIRED TO SELL ANY MINIMUM NUMBER OF SHARES IN ORDER TO SELL
SHARES IN THE OFFERING. THE COMPANY MAY, IN ITS DISCRETION, CONDUCT MULTIPLE
CLOSINGS. ( SEE " DESCRIPTION OF THE OFFERING." )
THIS MEMORANDUM HAS BEEN PREPARED SOLELY FOR USE IN CONNECTION WITH THE PRIVATE
PLACEMENT OF THE SHARES OFFERED HEREBY AND MAY NOT BE REPRODUCED OR USED FOR ANY
OTHER PURPOSE. THE OFFEREE AGREES TO RETURN TO THE COMPANY THIS MEMORANDUM AND
ALL ATTACHMENTS AND RELATED DOCUMENTATION IF THE OFFEREE DOES NOT SUBSCRIBE TO
PURCHASE SHARES IN THE OFFERING.
THESE SECURITIES ARE BEING OFFERED ONLY TO INVESTORS WHO THE OFFEROR BELIEVES
HAVE THE QUALIFICATIONS NECESSARY TO PERMIT THE SECURITIES TO BE OFFERED AND
SOLD UNDER APPLICABLE EXEMPTIONS FROM REGISTRATION UNDER THE ACT AND
QUALIFICATION UNDER APPLICABLE STATE STATUTES. THE OFFEROR WILL BE THE SOLE
JUDGE OF WHETHER AN INVESTOR POSSESSES SUCH QUALIFICATIONS. NOTWITHSTANDING
DELIVERY OF THIS MEMORANDUM AND ASSOCIATED DOCUMENTATION, THE OFFEROR DOES NOT
INTEND TO EXTEND AN OFFER TO SELL OR TO SOLICIT AN OFFER TO BUY THESE SECURITIES
UNTIL THE OFFEROR DETERMINES THAT THE OFFEREE IS QUALIFIED AND COMMUNICATES SUCH
DETERMINATION TO INVESTORS IN WRITING. THE SHARES ARE BEING OFFERED IN A PRIVATE
PLACEMENT TO A LIMITED NUMBER OF INVESTORS. THIS MEMORANDUM DOES NOT CONSTITUTE
AN OFFER OR SOLICITATION IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT PERMITTED UNDER APPLICABLE LAW OR ANY FIRM OR INDIVIDUAL WHO DOES NOT
POSSESS THE QUALIFICATIONS DESCRIBED IN THIS MEMORANDUM.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT"), OR THE SECURITIES LAWS OF FLORIDA OR OTHER STATES, AND ARE
BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH LAWS. THERE IS A PUBLIC MARKET FOR SECURITIES
OF THE COMPANY. EVEN IF SUCH A MARKET DID NOT EXIST, PURCHASERS OF SHARES WILL
BE REQUIRED TO REPRESENT THAT THE SHARES ARE BEING ACQUIRED FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO SALE OR DISTRIBUTION, AND PURCHASERS WILL NOT BE
ABLE TO RESELL THE SHARES UNLESS THE SHARES ARE REGISTERED UNDER THE ACT AND
QUALIFIED UNDER THE APPLICABLE STATE STATUTES (UNLESS AN EXEMPTION FROM SUCH
REGISTRATION AND QUALIFICATION IS AVAILABLE). PURCHASERS OF THE SHARES SHOULD BE
PREPARED TO BEAR THE ECONOMIC RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
THE PURCHASE OF THESE SECURITIES WILL ENTAIL A HIGH DEGREE OF RISK. THESE
SECURITIES ARE SUITABLE ONLY FOR PERSONS WHO HAVE SUBSTANTIAL FINANCIAL
RESOURCES AND HAVE NO LIQUIDITY IN THIS INVESTMENT. NO ONE SHOULD INVEST IN THE
SHARES WHO IS NOT PREPARED TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE
INVESTORS SHOULD CONSIDER CAREFULLY THE RISK FACTORS INDICATED UNDER " RISK
FACTORS."
<PAGE>
INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS MEMORANDUM OR ANY
COMMUNICATION, WHETHER WRITTEN OR ORAL, FROM THE COMPANY, ITS FOUNDERS,
MANAGEMENT, EMPLOYEES OR AGENTS, AS LEGAL, TAX, ACCOUNTING OR OTHER EXPERT
ADVICE. EACH INVESTOR SHOULD CONSULT THEIR OWN COUNSEL, ACCOUNTANT AND OTHER
PROFESSIONAL ADVISORS AS TO LEGAL,TAX, ACCOUNTING, AND RELATED MATTERS
CONCERNING HIS INVESTMENT AND ITS SUITABILITY FOR THEM.
NO PERSON (OTHER THAN OFFICERS OF THE COMPANY TO WHOM REQUESTS ARE DIRECTED FOR
ADDITIONAL INFORMATION CONCERNING THIS OFFERING) IS AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS (WHETHER ORAL OR WRITTEN) IN CONNECTION
WITH THIS OFFERING EXCEPT SUCH INFORMATION AS IS CONTAINED IN THIS PRIVATE
PLACEMENT MEMORANDUM AND THE ATTACHMENTS THERETO AND DOCUMENTS REFERRED TO
HEREIN . ONLY INFORMATION OR REPRESENTATIONS CONTAINED HEREIN AND THEREIN MAY BE
RELIED UPON AS HAVING BEEN AUTHORIZED.
THE SECURITIES OFFERED HEREBY WILL BE SOLD TO SUBJECT TO THE STOCK SUBSCRIPTION
AGREEMENT ATTACHED AS ATTACHMENT A OF THIS MEMORANDUM, WHICH CONTAINS CERTAIN
REPRESENTATIONS, WARRANTIES, TERMS AND CONDITIONS. EACH INVESTOR SHOULD
CAREFULLY REVIEW THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT BEFORE INVESTING.
This Company :
[ ] Has never conducted operations.
[ x ] Is in the development stage.
[ ] Is currently conducting operations.
[ ] Has shown a profit in the last fiscal year.
[ ] Other ( Specify ) ______________________
( Check at one , as appropriate )
This offering has been registered for offer and sale in the following states :
State Sate File No. Effective Date
----- ------------- --------------
<PAGE>
SUMMARY OF THE OFFERING
The following material is intended to summarize information contained elsewhere
in this Memorandum. This summary is qualified in its entirety by express
reference to the Memorandum and the exhibits referred to therein. Each
prospective investor is urged to read this Memorandum in its entirety.
Centaur Technologies, Inc., a Nevada corporation (the " Company "), is the
issuer of the Shares. The address of the Company is Suite 216 ? 1628 West 1st
Ave., Vancouver, BC, V6J 1G1.
The Offering. The Company is offering up to 7,500,000 of its common shares, par
value $.00001 per share (the "Shares"). The Minimum investment for an Investor
is 227,273 Shares, or $25,000.00. The Company, in its sole discretion, may
accept subscriptions for up to an aggregate of 227,273 Shares, or $25,000.00
until June 30th, 1999, or until such earlier date as the Company determines that
this Offering shall be terminated. In its sole discretion, the Company may elect
to terminate this Offering even if subscriptions for Shares have been received
and accepted by the Company. See "Terms of the Offering" and "Subscription for
Shares".
Company's Business: The Company is engaged in the development of multiple
electronic initiatives through the Internet.
Risk Factors: The offering involves speculative investment with substantial
risks, including those risks associated with the industry. Although the Company
will use its best efforts to protect the investments of the Investors, there is
no assurance that the Company's efforts will be successful. Accordingly, a
prospective Investor should not view the Company or its Officers, Directors,
employees or agents as guarantors of the financial success of an investment in
the Shares. See "Risk Factors".
Limited Transferability of the Shares. The Shares have not been registered under
the 1933 Act or the securities laws of any state. The Shares of common stock
purchased pursuant to this Offering will not be "restricted" shares because the
shares are offered under Rule 504 and this offering is excluded from the
provisions of Regulation D pertaining to restricted shares. This does not mean,
however, that a public market does exist for the Shares. Currently there is a
market for the Shares on NASDAQ - OTC Bulletin Board . See "Risk Factors" and
"Terms of the Offering".
Limitation of Liability. Except for the amounts paid by Investors for their
purchase of any Shares, and as required by Nevada State law, no investor will be
liable for any debts of the Company or be obligated to contribute any additional
capital or funds to the Company. See " Risk Factors".
Suitability Standards. Each Investor must meet certain eligibility standards
established by the Company for the purchase of the Shares. See "Terms of the
Offering" and "Subscription for Shares".
Use of Proceeds. The Company plans to use the money received from this offering
to cover the costs involved with public relations and building of investor
awareness. The funds will not be deposited in an escrow account and will be
available to the Company immediately. No minimum amount of Shares is required to
be sold.
<PAGE>
<TABLE>
THE COMPANY
<CAPTION>
<S> <C>
Exact corporate name: Centaur Technologies, Inc.
State and date of incorporation: Florida State
January 13, 1997.
Street address of principal office: 216 - 1628 West 1st Ave
Vancouver, BC, V6J 1G1
(604) 659-5009
Fiscal Year: December 31st.
</TABLE>
PRODUCTS
- - --------
The Company is engaged in the development of multiple electronic initiatives
through the Internet.
<PAGE>
RISK FACTORS
An investment in the Shares involves a high degree of risk. No prospective
Investor should acquire the Shares unless he can afford a complete loss of his
investment. The risks described below are those which the Company deems most
significant as of the date hereof. Other factors which may have a material
impact on the operations of the Company may not be foreseen. In addition to the
other factors set forth elsewhere in this Memorandum, prospective Investors
should carefully consider the following specific risk factors:
A. OPERATING RISKS
General. The economic success of an investment in the Shares depends, to a
large degree, upon many factors over which the Company has no control. These
factors include general economic, industrial and international conditions;
changes in technology; inflation or deflation; fluctuation in interest rates;
the availability of, and fluctuations in the money supply. The extent, type and
sophistication of the Company?s competition; and government regulations.
Operations. The Company is a development stage corporation.
Dependence on Key Personnel. The Company's success will depend, in large
part, upon the talents and skills of key management personnel. To the extent
that any of its management personnel is unable or refuses to continue
association with the Company, a suitable replacement would have to be found.
There is no assurance that the Company would be able to find suitable
replacements for such personnel, or that suitable person.
Lack of Adequate Capital. Additional capital will be required in the
Company's future operations. In the absence of any additional funding, the
Company's operations may be affected negatively. Therefore, the Company's
management will be careful and use its best judgement in directing the affairs
of the Company in a manner that maximizes its chances of success and,
accordingly, the best chances of raising future funding.
Inherent Business Risks. The business that the Company is engaged in
involves substantial and inherent risks associated with an emerging company with
limited financial resources.
B. INVESTMENT RISKS
Speculative Investment. The Shares are a very speculative investment. There
can be no assurance that the Company will attain its objective and it is very
likely that the Company will not be able to advance any business activities and
Investors could lose their entire investments.
Arbitrary Purchase Price; No Market. The purchase price for the Shares has
been arbitrarily determined by the Company, and is not necessarily indicative of
their value. No assurance is or can be given that the Shares, although
transferable, could be sold for the purchase price, or for any amount. There
currently is a market for resale of the Shares.
Restriction of Transferability. While the Company believes that no
restriction exists for the transfer of the Shares being offered by the Company,
an investment in the Shares may be a long term investment. Investors who do not
wish or who are not financially able to hold the Shares for a substantial period
of time are advised against purchasing Shares. The Shares are not registered
under the 1933 Act or under the securities laws of any state, but are being
offered by the Company under the exemption from registration provided by Rule
504 under Regulation D and related state and foreign exceptions.
"Best Efforts" Offering. The Shares are being offered on a "best efforts"
basis by the Company. No person or entity is committed to purchase or take down
any of the Shares offered pursuant to this Offering. No escrow account is
maintained and no minimum amount is required to be sold. Funds will be available
to the Company upon receipt.
Management and Operation Experience. The Company's Officers, Directors and
other personnel have engaged in a variety of businesses and have been involved
in business financing, operations, marketing and research but their experience
in these fields is limited. There is no assurance that such experience will
result in the success of the Company.
Other Risks. No assurance can be given that the Company will be successful
in achieving its stated objectives, that the Company's business is undertaken by
the Company, will generate cash sufficient to operate the business of the
Company or that other parties entering into agreements relating to the Company's
business will meet their respective obligations.
Dividends. The Company's Board of Directors presently intends to cause the
Company to follow a policy of retaining earnings, if any, for the purpose of
increasing the net worth and reserves of the Company. Therefore, there can be no
assurance that any holder of Common Stock will receive any cash, stock or other
dividends on his shares of Common Stock. Future dividends on Common Stock, if
any, will depend on the future earnings, financing requirements and other
factors.
Additional Securities Available for Issuance. The Company's Certificate of
Incorporation authorizes the issuance of 100,000,000 shares of Common Stock.
Accordingly, including those purchasing the shares offered with the sale of this
offering, investors will be dependent upon the judgement of management in
connection with the future issuance and sale of shares of the Company's capital
stock, in the event purchasers can be found for such securities.
<PAGE>
USE OF PROCEEDS
The Company will incur expenses in connection with the Offering in an
amount anticipated not to exceed $5,000 for legal fees, accounting fees, filing
fees, printing costs and other expenses. If the maximum number of Shares are
sold, the Company anticipates that the net proceeds to it from the Offering will
be as follows: Maximum Item Shares Sold
<TABLE>
<CAPTION>
<S> <C>
Gross Proceeds of Offering $825,000.00
Offering Expenses
Cost of Offering $5,000.00
TOTAL PROCEEDS RECEIVED: $820,000.00
Operating Expenses
Working Capital $ 150,000.00
Internet Related Initiatives $ 600,000.00
Consulting, Hardware Purchases $ 70,000.00
TOTAL $ 820,000.00
</TABLE>
NET FUNDS AVAILABLE TO COMPANY
- - ------------------------------
The Company estimates that the costs of the Offering will be as follows: (i)
legal fees of approximately $1,500.00, (ii) accounting fees of approximately
$2,500 and (iii) printing and other miscellaneous costs of approximately $1,000.
A sales commissions will be paid only to NASD broker/dealers and no other person
will receive any commissions or remuneration from the Company.
The net proceeds of this offering, assuming all the Shares are sold, will be
sufficient to sustain the planned activities of the Company for a period of 12
months, depending upon the number of Shares sold in the offering and other
factors. Even if all the Shares offered hereunder are sold, the Company will
require additional capital in order to fund continued development activities and
capital expenditures that must be made. The Company's business plan is based on
the premise that additional funding will be obtained through funds generated
from operations, the exercising of the options, additional offerings of its
securities, or other arrangements. There can be no assurance that any securities
offerings will take place in the future, or that funds sufficient to meet any of
the foregoing needs or plans will be raised from operations or any other source.
<PAGE>
DESCRIPTION OF SECURITIES
The following discussion describes the stock and other securities of the
Company.
General
- - -------
The Company currently has 100,000,000 authorized common shares, par value
$.00001 per share, of which 13,181,093 common shares were issued and outstanding
as of the date of this Placement. All of the outstanding common shares of the
Company are fully paid for and nonassessable.
Voting Rights
- - -------------
Each share of the 13,181,093 shares of the Company's common stock held by its
current shareholders is entitled to one vote at shareholders meetings.
Dividends
- - ---------
The Company has never paid a dividend and does not anticipate doing so in the
near future.
Options
- - -------
The Company currently has 2,050,000 options outstanding in relation to its
common stock, no options have been exercised to date.
Miscellaneous Rights and Provisions
- - -----------------------------------
Shares of the Company's common stock have no pre-emptive rights. The Shares do
not have any conversion rights, no redemption or sinking fund provisions, and
are not liable to further call or assessment. The Shares, when paid for by
Investors, will be fully paid and nonassessable. Each share of the Company's
common shares is entitled to a pro rata share in any asset available for
distribution to holders of equity securities upon the liquidation of the
Company. TERMS OF THE OFFERING
The Company is offering to qualified investors a maximum of 7,500,000 Shares at
a purchase price of $0.11 per share of the Company's common stock. The Company
may, in its sole discretion, terminate the offering at any time. The Offering
will close on the earliest of June 30th, 1999 or the election of the Company
when all of the Shares are sold, in no event later than June 30th, 1999. The
minimum subscription is $25,000 (227,273 Shares) per Investor, although the
Company, in its sole discretion, may accept subscriptions for lesser amounts.
Terms of Sale
- - -------------
The Company hereby agrees to sell to the purchaser and the purchaser hereby
agrees to subscribe for 227,273 sharess in the capital of the Company (the
"Shares") for a purchase of $0.11 per share for an aggregate purchase of
$25,000.00 ( the "Purchase Funds").
Constitution of Shares
- - ----------------------
Each share consists of one fully paid and non-assessable common share in the
capital stock (the ?Share?) of the Company.
The Shares are being offered and sold by the Company under the exemption from
registration contained in Rule 504 under Regulation D and related exemptions
from state registration requirements. Rule 504 permits the Company to offer and
sell its stock in an amount not exceeding $1,000,000 to an unlimited number of
persons. Until 1992, Rule 504(b)(2)(ii) imposed a limited disclosure obligation
of all issuers such as the Company which was intended to ensure that investors
in a Rule 504 transaction were clearly advised of the restricted character of
the securities being offered for sale. This requirement was eliminated in July,
1992 at which time the Securities and Exchange Commission adopted an amendment
to Rule 504 that eliminated all limitations on the manner of offering of stock
under that rule and/or the resale of stock purchased in reliance on that rule.
Therefore, following adoption of the 1992 amendment, the securities being
offered and sold by the Company pursuant to the present Offering are available
for immediate resale by nonaffiliates of the issuer.
The Shares are being offered on a "best efforts" basis by the Company and
certain expenses of the Offering will be paid from the proceeds of the Offering.
The Company anticipates that such expenses will not exceed $5,000 as detailed in
the Use of Proceeds.
<PAGE>
DIRECTORS, OFFICERS AND KEY PERSONNEL OF THE COMPANY
Officers and Directors
- - ----------------------
The following information sets forth the names of the officers and directors of
the Company, their present position with the Company and biographic information:
<TABLE>
<CAPTION>
NAME POSITION
---- --------
<S> <C> <C>
Mr. Herdev S. Rayat President and Director
Mr. Harv Dhaliwal Director, Secretary and Treasurer
Mr. Jimmy Quon Director
</TABLE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the shares of Common Stock
of the Company owned of record and beneficially held as of the date of this
Memorandum by (i) each person known to the Company to own of record or
beneficially 5% or more of the 13,181,093 outstanding shares of Common Stock of
the Company, (ii) each Director of the Company, and (iii) all officers and
directors of the Company as a group, as of the date of this Memorandum and
adjusted to reflect share holdings after the sale of the maximum number of
Shares offered hereby.
<TABLE>
<CAPTION>
Ownership No Shares % No Shares %
Name & Position Pre Issue Post Issue
<S> <C> <C> <C> <C>
Mr. Herdev S. Rayat 5,000,000 38% 5,000,000 24%
Mr. Harv Dhaliwal 5,000,000 38% 5,000,000 24%
</TABLE>
<PAGE>
REMUNERATION OF DIRECTORS AND OFFICERS
Directors of the Company who are also employees of the Company receive no
additional compensation for their services as Directors. The Company intends, in
the future, to pay Directors who are not employees of the Company, compensation
of $500 per Director's Meeting, as well as reimbursements of any out of pocket
expenses incurred in the Company's behalf.
REPORTS
The books and records of the Company will be maintained by the Company. The
books of account and records shall be kept at the principal place of business of
Centaur Technologies, Inc., and each shareholder, or his duly authorized
representatives, shall have upon giving ten (10) days prior notice, access
during reasonable business hours to such books and records, and the right to
inspect and copy them. Within 120 days after the close of each fiscal year,
reports will be distributed to the shareholders which will include financial
statements (including a balance sheet and statements of income, shareholder's
equity, and cash flows) prepared in accordance with generally accepted
accounting principals, with a reconciliation to the tax information
supplementary supplied, accompanied by a copy of the accountant's report.
LEGAL MATTERS
Gary R. Blume, Esquire, 11801 North Tatum Blvd, Suite 108, Phoenix, Arizona,
85028 will pass upon certain matters for the Company.
LITIGATION
The Company is not presently involved in any material litigation or other legal
proceedings.
ADDITIONAL INFORMATION
In the opinion of the Board of Directors of the Company, this memorandum
contains a fair presentation of the subjects discussed herein and does not
contain a misstatement of material fact or fail to state a material fact
necessary to make any statements made herein not misleading. Persons to whom
offers are made will be furnished with such additional information concerning
the Company and other matters discussed herein as they, or their purchaser
representative or other advisors, may reasonably request. The Company shall, to
the extent such information is available or can be acquired without unreasonable
effort or expense, endeavour to provide the information to such persons. All
offeree?s are urged to make such personal investigations, inspections or
inquiries as they deem appropriate.
Questions or requests for additional information may be directed to Mr. Herdev
S. Rayat by calling (604) 659-5009. Requests for additional copies of this
Memorandum or assistance in executing subscription documents may be directed to
the Company.
<PAGE>
STATE RESTRICTIONS AND DISCLOSURES
FOR UNREGISTERED SECURITIES OFFERINGS
NOTICE TO ARIZONA RESIDENTS:
These securities are being sold in reliance upon Arizona's Limited Offering
exemption from registration pursuant to A.R.S. 44-1844.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE ARIZONA SECURITIES
ACT, AS AMENDED, AND THEREFORE, CANNOT BE TRANSFERRED OR RESOLD UNLESS THEY ARE
REGISTERED UNDER SUCH ACT OR AN EXEMPTION THEREFROM IS AVAILABLE.
As a purchaser of such securities hereby represent that I understand these
securities cannot be resold without registration under the Arizona Securities
Act or an exemption therefrom. I am not an underwriter within the meaning of
A.R.S 44-1801(17), and I am acquiring these securities for myself, not for other
persons. If qualifying as a non-accredited investor, I further represent that
this investment does not exceed 20% of my net worth ( excluding principal
residence, furnishings therein and personal automobiles).
NOTICE TO CALIFORNIA RESIDENTS:
These securities are being sold in reliance upon California's Limited Offering
Exemption. 25102(f) of the California Code, as amended.
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS MEMORANDUM HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFROM PRIOR TO SUCH QUALIFICATIONS IS UNLAWFUL, UNLESS THE
SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATIONS BY SECTION 25100, 25102 OR
26105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA DOES NOT RECOMMEND
OR ENDORSE THE PURCHASE OF THESE SECURITIES.
NOTICE TO COLORADO RESIDENTS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE COLORADO SECURITIES ACT OF 1981 BY REASON OF SPECIFIC EXEMPTIONS
THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE
SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON
OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE COLORADO SECURITIES ACT OF 1981, IF SUCH REGISTRATION IS
REQUIRED.
NOTICE TO NEW YORK RESIDENTS:
THIS PRIVATE PLACEMENT MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY THE
ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE
STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION OF THE CONTRARY IS UNLAWFUL.
THIS PRIVATE PLACEMENT MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF
MATERIAL FACT AND DOES NOT OMIT ANY MATERIAL FACT NECESSARY TO MAKE THE
STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS
PURPOSED TO BE SUMMARIZED HEREIN.
<PAGE>
Purchaser Statement:
I understand that this Offering of Shares has not been reviewed by the
Attorney General of the State of New York because of the Offeror's
representations that this intended to be a non-public Offering pursuant to the
Regulation D Rule 504 or 505, and that if all of the conditions and limitations
of Regulation D are not complied with, the Offering will be resubmitted to the
Attorney General for amended exemption. I understand that any literature used in
connection with this Offering has not been previously filed with the Attorney
General and has not been reviewed by the Attorney General. This Investment Unit
is being purchased for my own account for investment, and not for distribution
or resale to others. I agree that I will not sell or otherwise transfer these
securities unless they are registered under the Federal Securities Act of 1933
or unless an exemption from such registration is available. I represent that I
have adequate means of providing for my current needs and possible personal
contingencies of financial problems, and that I have no need for liquidity of
this investment.
It is understood that all documents, records and books pertaining to this
investment have been made available to my attorney, my accountant, or my offeree
representative and myself, and that, upon reasonable notice, the books and
records of the issuer will be available for inspection by investors, at
reasonable hours at the principal place of business.
<PAGE>
EXHIBITS
Centaur Technologies, Inc.
SUBSCRIPTION DOCUMENT
1. The undersigned hereby subscribes for ___________ common stock (hereinafter
"Shares"), as described in the Private Offering Memorandum dated March 2,
1999 ("Memorandum"), of Centaur Technologies, Inc., a Nevada corporation
(the "Company"), being offered by the Company for a purchase price of $0.11
per Unit and tenders herewith the sum of $________________ in payment
therefore, together with tender of this Subscription Document.
2. The undersigned represents and warrants that he is a bona fide resident of
the State of _________________ .
3 The undersigned acknowledges:
a. Receipt of a copy of the Private Offering Memorandum;
b. That this subscription, if accepted by the Company, is legally
binding and irrevocable;
c. The Company is a development stage corporation with limited
financial and operating history;
d. That the Shares have not been registered under the Securities Act
of 1933, as amended, in reliance upon exemptions contained in
that Act, and that the Shares have not been registered under the
securities acts of any state in reliance upon exemptions
contained in certain state's securities laws; and
e. That the representations and warranties provided in this
Subscription Document are being relied upon by the Company as the
basis for the exemption from the registration requirements of the
Securities Act of 1933 and of the applicable state's securities
laws.
4. The undersigned represents and warrants as follows:
a. That the undersigned subscriber is purchasing said Shares as an
investment and said Shares are purchased solely for the
undersigned's own account.
b. That the undersigned subscriber has sufficient knowledge and
experience in financial and business matters to evaluate the
merits and risks of an investment in the Shares;
c. That the undersigned subscriber is able to bear the economic risk
of an investment in the Shares;
d. That the undersigned subscriber has read and is thoroughly
familiar with the Private Offering Memorandum and represents and
warrants that he is aware of the high degree of risk involved in
making investment in the Shares;
e. That the undersigned subscriber's decision to purchase the Shares
is based solely on the information contained in the Private
Offering Memorandum and on written answers to such questions as
he has raised concerning the transaction;
f. That the undersigned subscriber is purchasing the Shares directly
from the Company and understands that neither the Company nor the
Offering is associated with; endorsed by nor related in any way
with any investment company, national or local brokerage firm or
broker dealer. The undersigned subscriber's decision to purchase
the Shares is not based in whole or in part on any assumption or
understanding that an investment company, national or local
brokerage firm or other broker dealer is involved in any way in
this Offering or has endorsed or otherwise recommended an
investment in these Shares.
<PAGE>
g. That the undersigned subscriber has an investment portfolio of
sufficient value that he could suitably absorb a high risk
illiquid addition such as an investment in the Shares.
h. The undersigned further represents that (INITIAL APPROPRIATE
[ ] I am a natural person whose individual net worth, or joint
worth with my spouse at the time of purchase, exceeds
$200,000;
[ ] I am a natural person who had an individual income in
excess of $50,000 or joint income with my suppose in excess
of $50,000 in each of the two most recent years and who
reasonably expects an income in excess of those amounts in
the current year;
i. That Regulation D requires the Company to conclude that each
investor has sufficient knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks of an investment in the shares, or to verify that the
investor has retained the services of one or more purchaser
representatives for the purpose of evaluating the risks of
investment in the shares and hereby represents and warrants that
he has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of
an investment in the shares and of making an informed investment
decision and will not require a purchaser representative.
5. The undersigned understands and agrees that this subscription is made
subject to each of the following terms and conditions:
a. The Company shall have the right to accept or reject this
subscription, in whole or part, for any reason. Upon receipt of
each Subscription Document, the Company shall have until June
30th, 1999 in which to accept or reject it. If no action is taken
by the Company within said period, the subscription shall be
deemed to have been accepted. In each case where the subscription
is rejected, the Company shall return the entire amount tendered
by the subscriber, without interest;
b. That the undersigned subscriber will, from time to time, execute
and deliver such documents or other instruments as may be
requested by the Company in order to aid the Company in the
consummation of the transactions contemplated by the Memorandum.
6. The undersigned hereby constitutes and appoints the Company, with full
power of substitution, as attorney-in-fact for the purpose of executing and
delivering, swearing to and filing, any documents or instruments related to
or required to make any necessary clarifying or conforming changes in the
Subscription Document so that such document is correct in all respects.
7. As used herein, the singular shall include the plural and the masculine
shall include the feminine where necessary to clarify the meaning of this
Subscription Document. All terms not defined herein shall have the same
meanings as in the Memorandum.
IN WITNESS WHEREOF, the undersigned has executed this Subscription Document
this _____ day of ____________, 1999.
Number of Shares _________
Total amount tendered $
INDIVIDUAL OWNERSHIP: ____________________________________
Name ( Please Type or Print )
____________________________________
Signature
____________________________________
Social Security Number
JOINT OWNERSHIP: ____________________________________
Name ( Please Type or Print )
____________________________________
Signature
____________________________________
Social Security Number
OTHER OWNERSHIP ____________________________________
Name ( Please Type or Print )
By:_________________________________
( Signature )
____________________________________
Title
____________________________________
Employer Identification Number
ADDRESS:____________________________________________________________________
Street City State Zip
Phone(Residence)_____________________ ; Phone(Business) ________________________
I,________________________________, do hereby certify that the
representations made herein concerning my financial status are true, and that
all other statements contained herein are true, accurate and complete to the
best of my knowledge.
Date: ___________________ , 1999.
Signature_____________________________
<PAGE>
CERTIFICATE OF DELIVERY
I hereby acknowledge that I delivered the foregoing Subscription Document
to_________ _________________ on the _______ day of __________________ , 1999.
__________________________________________
ACCEPTANCE
This Subscription is accepted by CENTAUR TECHNOLOGIES, INC., as of the
______ day of _____________ , 1999.
CENTAUR TECHNOLOGIES, INC.
By:_____________________________
Director
<PAGE>
1997 INCENTIVE STOCK OPTION PLAN AND 1997
NONSTATUTORY STOCK OPTION PLAN
1. NAMES AND PURPOSES OF THE PLANS. This Plan document is intended to
implement and govern two separate Stock Option Plans of San Marino Minerals,
Inc., a Florida corporation (the "Company"): the 1997 Incentive Stock Option
Plan ("Plan A") and the 1997 Nonstatutory Stock Option Plan ("Plan B")
(collectively the "Plans"). Plan A provides for the granting of options that are
intended to qualify as incentive stock options ("Incentive Stock Options")
within the meaning of Section 422(b) of the Internal Revenue Code, as amended.
Plan B provides for the granting of options that are not intended to so qualify.
Unless specified otherwise, all the provisions of this Plan document relate
equally to both Plan A and Plan B, which Plans are condensed into one Plan
document solely for purposes of administrative convenience and are not intended
to constitute tandem plans. The purposes of the Plans are (a) to attract and
retain the best available people for positions of substantial responsibility,
and (b) to provide additional incentive to the Employees of the Company (and its
future parents and subsidiaries, if any) and to promote the success of the
Company's business.
2. DEFINITIONS. For purposes of the Plans, the following terms will have
the respective meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company;
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended;
(c) "Common Stock" shall mean the Class A common stock of the Company;
(d) "Company" shall mean San Marino Minerals, Inc., a Florida
corporation;
(e) "Committee" shall mean the committee appointed by the Board in
accordance with Paragraph 3(a) of this Plan document, if one is appointed;
(f) "Employee" shall mean any person, including an officer or
director, who is an employee (within the meaning of Section 422 of the
Code) of the Company, any parent, any subsidiary or any successors to any
of the foregoing;
(g) "Incentive Option" shall mean an incentive stock option as defined
in Section 422(b) of the Code;
(h) "Non-Statutory Option" shall mean an option which does not qualify
as an Incentive Option;
(i) "Option" shall mean a stock option granted pursuant to the Plan,
whether an Incentive Option or a Non-Statutory Option;
(j) "Option Agreement" shall mean an agreement substantially in the
form attached hereto as Exhibit A or the form attached hereto as Exhibit B,
or such other form or forms as the Board (subject to the terms and
conditions of the Plans) may from time to time approve, evidencing an
Option;
(k) "Option Grant Date" shall mean the date on which an Option is
granted by the Board;
(1) "Optioned Stock" shall mean the Common Stock subject to an Option
granted pursuant to a Plan;
(m) "Optionee" shall mean an Employee or other Eligible Person who
receives an Option;
(n) "Outstanding Incentive Option" shall mean any Incentive Stock
Option which has not yet been exercised in full or has not yet expired by
lapse of time;
(o) "Parent" shall mean a "parent corporation" as defined in Section
424(e) of the Code;
(p) "Plan A" shall mean the 1997 Incentive Stock Option Plan;
(q) "Plan B" shall mean the 1997 Non-Statutory Stock Option Plan;
(r) "Predecessor Corporation" shall mean a corporation which is a
party to a transaction described in Code Section 424(a) (or which would be
so described if a substitution or assumption under such section had been
effected) with the Company, a Parent, a Subsidiary or a predecessor
corporation of any such corporations.
<PAGE>
(s) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 13 of this Plan document;
(t) "Stock Purchase Agreement" shall mean an agreement substantially
in the form attached hereto as Exhibit D or such other form or forms as the
Board (subject to the terms and conditions of this Plan) may from time to
time approve, which is to be executed as a condition of purchasing Optioned
Stock upon exercise of an Option as provided in a Plan; and,
(u) "Subsidiary" shall mean a subsidiary corporation as defined in
Section 424(f) of the Code.
3. ADMINISTRATION OF PLAN.
(a) Procedure. The Plans shall be administered by the Board. The Board
may appoint a Committee consisting of not less than two (2) members of the
Board to administer one or both of the Plans on behalf of the Board,
subject to such terms and conditions as the Board may prescribe. Once
appointed, the Committee shall continue to serve until otherwise directed
by the Board. From time to time, the Board may increase the size of the
Committee and appoint additional members thereof, remove members of the
Committee, and thereafter, directly administer the Plans. Any references
herein to the Board shall refer to the Committee, if one is appointed, to
the extent of the Committee's authority.
(b) Limitations on Members of Board. Members of the Board who are
either eligible for options or have been granted Options may vote on any
matters affecting the administration of the Plans or the grant of any
Options pursuant to the Plans; except that no such member shall act in
connection with an Option to himself or herself, but any such member may be
counted in determining the existence of a quorum at any meeting of the
Board during which action is taken with respect to Options of such member
(c) Powers of the Board. Subject to the provisions of the Plan the
Board shall have the authority, in its discretion, to make all
determinations necessary or advisable for the administration of the Plans,
including without limitation:
(i) to determine, upon review of relevant information, the then
fair market value per share of the Common Stock;
(ii) to determine the exercise price of the Options to be
granted, subject to the provisions of Paragraph 8 of this Plan
document;
(iii) to determine the Employees to whom, and the time or times
at which, Options shall be granted, and the number of shares of
Optioned Stock to be represented by each Option;
(iv) to determine whether Options granted hereunder shall be
granted under Plan A as Incentive Options or Plan B as Non-statutory
Options;
(v) to prescribe, amend and rescind rules and regulations
relating to the Plans;
(vi) to determine the terms and provisions of each Option granted
under the Plans (which need not be identical) and to modify or amend
each Option (with or without consent of the Optionee, if necessary);
(vii) to accelerate the exercise date of any Option;
(viii) to construe and interpret the Plans, the Option
Agreements, Stock Purchase Agreements and any other agreements
provided for hereunder; and
(ix) to authorize any person to execute on behalf of the Company
any instrument required to effectuate the grant of an Option
previously granted by the Board or to take such other actions as may
be necessary or advisable with respect to the Company's rights
pursuant to the Option, Stock Purchase Agreement or other agreement
approved hereunder.
<PAGE>
(d) Effect of the Board's or Committee's Decision. All decisions,
determinations and interpretations of the Board or the Committee shall be
final and binding on all Optionees and any other proper holders of any
Options granted under the Plan.
4. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 13 of
this Plan document, the maximum aggregate number of shares which may be optioned
under these Plans is 500,000 shares of authorized Common Stock. This constitutes
an absolute cumulative limitation on the total number of shares that may be
optioned under Plan A and Plan B and, therefore, at any particular date the
maximum aggregate number of shares which may be optioned under Plan A is equal
to 500,000 minus the number of shares previously optioned under Plan A and Plan
B; and the maximum aggregate number of shares which may be optioned under Plan B
is equal to 500,000 minus the number of shares which have been previously
optioned under Plan A or Plan B. All shares to be optioned under either Plan A
or Plan B may be either authorized but unissued shares or shares held in the
treasury. Shares of Common Stock that (a) are repurchased by the Company after
issuance hereunder pursuant to the exercise of an Option or (b) are not
purchased by the Optionee prior to the expiration of the applicable Option
Period (as described hereinbelow) shall again become available to be covered by
Options to be issued hereunder and shall not, as of the effective date of such
repurchase or expiration, be counted as having been previously optioned for
purposes of the above-described maximum number of shares which may be optioned
hereunder.
5. ELIGIBILITY. Options under Plan A may be granted to any Employee who is
designated by the Board in its discretion. NonEmployees, including directors of
the Company or any Parent or Subsidiary, who are not regular employees of the
Company, are not eligible to receive Options under Plan A. Options under Plan B
may be granted to any Employee, any Non-Employee director of Company or any
Parent or Subsidiary, and any consultant or independent contractors who provide
valuable services to the Company (or its Parent or Subsidiary), all as
designated by the Board in its discretion. An Optionee who has been granted an
Option may, if otherwise eligible, be granted an additional Option or Options.
Options may be granted to one or more persons without being granted to other
eligible persons, as the Board may deem fit.
6. TERM OF THE PLAN. Plan A shall become effective immediately upon the
earlier to occur of its adoption by the Board or its approval by vote of a
majority of the outstanding shares of the Company entitled to vote on the
adoption of such Plan. Plan B shall become effective immediately upon its
adoption by the Board. Each Plan shall continue in effect until December 31,
2007 unless sooner terminated under Sections 15 or 18 of this Plan document. No
Option may be granted under a Plan after its expiration.
7. OPTION PERIOD. Each Option granted pursuant to either Plan shall be
evidenced by an Option Agreement. Each Option shall expire and all rights
thereunder shall end at the expiration of such period (which shall in no event
be more than ten (10) years) after the Option Grant Date as shall be fixed by
the Board, subject in all cases to earlier expiration as provided in Section 11
of this Plan document. Notwithstanding the foregoing, the term of each Incentive
Option granted to an Employee who, at the time the Incentive Option is granted,
owns stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary
(determined as required by the Code as applied to Incentive Options) shall not
be more than five (5) years from the Option Grant Date.
8. OPTION PRICE AND CONSIDERATION.
(a) Price. The per share Option price for the Shares to be issued
pursuant to an Option granted under either Plan shall be such price as is
determined by the Board in its sole discretion. Notwithstanding the
foregoing, with respect to Incentive Options granted under Plan A: (i) such
price shall in no event be less than one hundred percent (100%) of the fair
market value per Share of the Company's Common Stock on the Option Grant
Date, as determined by the Board; and (ii) in the case of an Incentive
Option granted to an Employee who, at the time the Option is granted, owns
stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent, Subsidiary or
Predecessor Corporation (determined as required by the Code as applied to
Incentive Options), the per share Option price shall be at least one
hundred ten percent (110%) of the fair market value as of the Option Grant
Date, as determined by the Board. The fair market value shall be determined
by the Board in its sole discretion, exercised in good faith; provided,
however, that where there is a public market for the Common Stock, the fair
market value per share shall be the mean of the reported bid and asked
price for the Common Stock on the date of the grant, or, in the event the
Common Stock is listed on a stock exchange, the fair market value per share
shall be the closing price on the exchange as of the date of grant of the
Option.
<PAGE>
(b) Form of Consideration. The form of consideration to be paid for
the Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Board and may consist of cash,
promissory notes, or the surrender of shares of Common Stock having a fair
market value on the date of surrender equal to the purchase price of the
Shares as to which said Option shall be exercised, a combination thereof,
or such other consideration and method of payment for the issuance of
Shares as is permitted under applicable law.
(c) Promissory Notes. If the consideration for the exercise of an
Option is a promissory note, such note shall be a full recourse promissory
note executed by the Optionee. If the option is an Incentive Option under
Plan A, such note shall bear interest at a per annum rate which is not less
than the greater of (i) the applicable "test rate" described in Treasury
Regs. Section 1.4831(d) in effect on the date of exercise or (ii) a fair
market interest rate, as determined by the Board in its good faith
discretion. If a promissory note is given as consideration, the Company may
retain the Shares purchased upon exercise of the Option in escrow as
security for payment of the promissory note.
(d) Surrendered Common Stock. If the consideration for the exercise of
an Option is the surrender of previously acquired and owned shares of
common stock of the Company, the Optionee will be required to make
representations and warranties satisfactory to the Company regarding the
Optionee's title to the shares used to effect the purchase, including
without limitation, representations and warranties that the Optionee has
good and marketable title to such shares free and clear of any and all
liens, encumbrances, charges, equities, claims, security interests, options
or restrictions and has full power to deliver such shares without obtaining
the consent or approval of any person or governmental authority other than
those which have already given consent or approval in a form satisfactory
to the Company. The value of the shares used to effect the purchase shall
be the fair market value of those shares as determined by the Board in its
sole discretion, exercised in good faith.
9. LIMIT ON VALUE OF OPTIONED STOCK ISSUED UNDER PLAN A. The aggregate fair
market value (determined as of the Option Grant Date of each Option) of the
Shares with respect to which Incentive Options are exercisable for the first
time by the Optionee during any calendar year under Plan A and all other
incentive stock option plans of the Company, any Parent or Subsidiary, or any
Predecessor Corporation of any such corporation shall not exceed One Hundred
Thousand Dollars ($100,000.00), as determined pursuant to Section 422(d) of the
Code.
10. EXERCISE OF OPTION.
(a) General Terms. Any Option granted hereunder shall be exercisable
at such times and under such conditions as may be determined by the Board
which conditions may include performance criteria with respect to the
Company and/or the Optionee or provisions for vesting over a period of time
conditioned upon continued employment and shall include the contemporaneous
execution of a Stock Purchase Agreement in a form approved by the Board and
as shall be permissible under the terms of the Plan. In all events, in
order to exercise an Option hereunder the Optionee shall execute a Stock
Purchase Agreement in a form approved by the Board and shall deliver the
required (or permitted) exercise consideration to the Company. As a
condition to the exercise of an Option, the Board may require the Optionee
pursuant to the Option Agreement to agree to restrictions on the sale or
other transfer of ownership of the Common Stock acquired by an Optionee or
to sell such Shares to the Company upon termination of employment.
(b) Partial Exercise. An Option may be exercised in accordance with
the provisions of either Plan as to all or any portion of the Shares then
exercisable under an Option, from time to time during the term of the
Option. An Option may not be exercised for a fraction of a Share.
(c) Time of Exercise. An Option shall be deemed to be exercised when
the Company has received at its principal business office: (i) written
notice of such exercise in accordance with the terms of the Option
Agreement and given by the person entitled to exercise the Option; (ii)
full payment for the Shares with respect to which the Option is exercised;
(iii) the executed Stock Purchase Agreement if required; and (iv) any other
representations or agreements required by the terms of this Plan or the
Option Agreement. Full payment may consist of such consideration as is
authorized by the Board as provided hereunder.
<PAGE>
(d) No Rights as Shareholder Until Exercise. Until this Option is
properly exercised hereunder and the Company receives full payment for the
Shares with respect to which the Option is exercised, no right to receive
dividends or any other rights as a stockholder shall exist with respect to
the Optioned Stock. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the Option is properly
exercised and payment in full is received, except as provided in Section 13
of this Plan document.
(e) Issuance of Share Certificates. As soon as practicable after any
proper exercise of an Option in accordance with the provisions of this Plan
document and payment in full for the exercised Shares, the Company shall,
without transfer or issue tax to the Optionee, deliver to the Optionee at
the principal business office of the Company, or such other place as shall
be mutually acceptable, a certificate or certificates representing the
Shares of Common Stock as to which the Option has been exercised. The time
of issuance and delivery of the certificates) representing the Shares of
Common Stock may be postponed by the Company for such period as may be
required for it, with reasonable diligence, to comply with any applicable
listing requirements of any national or regional securities exchange and
any law or regulation applicable to the issuance and delivery of such
Shares.
(f) Reduction of Shares Upon Exercise. Exercise of an Option in any
manner shall result in a decrease in the number of Shares which thereafter
may be available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
11. TERMINATION OF EMPLOYMENT.
(a) General. If an Optionee ceases to be an Employee for any reason
then, except as provided in Paragraph 11(a) or 11(b) hereof, any Option of
the Optionee, whether vested or non-vested, and if issued under Plan A or
Plan B, shall terminate as of the date of termination of employment.
(b) Death or Disability. If Optionee dies or becomes disabled (within
the meaning of Code Section 422 and the rules and regulations thereunder)
then, within the earlier of thirty (30) days (or such other period of time
not exceeding six (6) months as set forth in the Option Agreement)
following the date of such death or disability and the time the Option
expires by its terms, the Optionee or such person or persons to whm the
Optionee's rights under the Option shall pass by the Optionee's will or by
the laws of descent and distribution, may exercise the Option to the extent
it was vested and exercisable on the date of death or disability.
12. NON-TRANSFERABILITY OF OPTIONS. The Options and any rights and
privileges granted under any Option Agreement are not transferable by the
Optionee, either voluntarily or by operation of law, otherwise than by will and
the laws of descent and distribution and shall be exercisable during Optionee's
lifetime only by Optionee.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) Reorganizations, Recapitalization, Etc. If the outstanding shares
of Common Stock of the Company are increased, decreased, changed into or
exchanged for a different number or kind of shares or securities of the
Company through reorganization, recapitalization, reclassification, stock
dividend (but only on Common Stock), stock split, reverse stock split or
other similar transaction, or, if any other increase or decrease occurs in
the number of Shares of Common Stock of the Company without the receipt of
consideration by the Company, then an appropriate and proportional
adjustment shall be made in (i) the number and kind of shares of stock
covered by each outstanding Option, (ii) the number and kind of shares of
stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted (or which have been returned to the
Plan upon cancellation of an Option), and (iii) the exercise price per
share of stock covered by each such outstanding Option. The granting of
stock options or bonuses to Employees of the Company and the conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without the receipt of consideration." Notwithstanding the
foregoing, no adjustment need be made under this paragraph if, upon the
advice of counsel, the Board determines that such adjustment may result in
federal taxable income to the holders of Options or Common Stock or other
classes of the Company's securities.
<PAGE>
(b) Dissolution, Liquidation, Etc. Upon the dissolution or liquidation
of the Company, or upon a reorganization, merger or consolidation of the
Company with one or more corporations as a result of which the Company is
not the surviving corporation, or upon a sale (or exchange through merger)
of substantially all the property or more than fifty percent (50%) of the
then outstanding stock of the Company to another corporation, the Plan
shall terminate, and any Option theretofore granted hereunder shall
terminate. Notwithstanding the foregoing, the Board may provide in writing
in connection with, or in contemplation of, such transaction for any, all
or none of the following alternatives (separately or in combination): (i)
for all or a portion of the Options theretofore granted to become
immediately exercisable; (ii) for the assumption by the successor
corporation of the Options theretofore granted or the substitution by such
corporation for such Options of new options covering the stock of the
successor corporation, or a Parent or Subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; or (iii) for
the continuance of the Plan by such successor corporation in which event
the Plan and the Options theretofore granted shall continue in the manner
and under the terms so provided.
(c) No Fractional Shares. No fractional shares of the Common Stock
shall be issuable on account of any action under this Paragraph 13, and the
aggregate number of shares into which Shares then covered by an Option,
when changed as the result of such action, shall be reduced to the largest
number of whole Shares resulting from such action. Notwithstanding the
foregoing, the Board, in its sole discretion, may determine to issue scrip
certificates, in respect to any fractional shares, which scrip
certificates, in such event, shall be in a form and have such terms and
conditions as the Board in its discretion shall prescribe.
(d) Binding Effect of Board Determinations. All adjustments under this
Paragraph 13 shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive.
(e) No Other Adjustments. Except as expressly provided herein, no
issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of Shares of Common Stock subject to the Plan or any Options.
14. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Amendment and Termination. The Board may at any time and from time
to time suspend or terminate either Plan. The Board may also amend or
revise either Plan from time to time in such respects as the Board may deem
advisable, except that, without approval of the holders of the majority of
the outstanding shares of the Company's Common Stock, no such revision or
amendment shall amend Plan A or Plan B so as to:
(i) Increase the number of Shares subject to Plan A or Plan B
other than in connection with an adjustment under Section 13 of this
Plan document;
(ii) Permit the granting of Incentive Options to anyone other
than as provided in Paragraph 5;
(iii) Remove the administration of Plan A or Plan B from the
Board;
(iv) Extend the term of Plan A or Plan B beyond that provided in
Paragraph 6 hereof;
(v) Extend the term of any Incentive Option beyond the maximum
term set forth in Paragraph 7;
(vi) Permit the granting of Incentive Options which would not
qualify as Incentive Stock Options; or (vii) Decrease the per share
option price required with respect to Incentive Options under
Paragraph 8(a) hereof.
(b) Effect of Termination. Except as otherwise provided in Section 13,
without the written consent of the Optionee, any such termination of the
Plan shall not affect Options already granted and such Options shall remain
in full force and effect as if the Plan had not been terminated.
<PAGE>
15. CONDITIONS UPON ISSUANCE OF SHARES. Options granted under either Plan
are conditioned upon the Company obtaining any required permit, or exemption
from the qualification or registration provisions of any applicable state
securities law and other appropriate governmental agencies, authorizing the
Company to issue such Options and Optioned Stock upon terms and conditions
acceptable to the Company. Shares shall not be issued with respect to an Option
granted under either Plan unless the exercise of such Option and the issuance
and delivery of such shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an Option, the Board may require the person
exercising such Option to execute an agreement approved by the Board, and may
require the person exercising such Option to make any representation and
warranty to the Company as may, in the judgment of counsel to the Company, be
required under applicable laws or regulations.
16. RESERVATION OF SHARES. During the term of the Plans, the Company will
at all times reserve and keep available the number of Shares as shall be
sufficient to satisfy the requirements of the Plans. During the term of the
Plans, the Company will use its best efforts to seek to obtain from appropriate
regulatory agencies any requisite authorization in order to issue and sell such
number of Shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Plan. The inability of the Company to obtain from any such
regulatory agency the requisite authorization(s) deemed by the Company's counsel
to be necessary to the lawful issuance and sale of any Shares hereunder, or the
inability of the Company to confirm to its satisfaction that any issuance and
sale of any Shares hereunder will meet applicable legal requirements, shall
relieve the Company of any liability in respect to the non-issuance or sale of
such Shares as to which such requisite authority shall not have been obtained.
17. TAXES, FEES, EXPENSES AND WITHHOLDING OF TAXES.
(a) Issue and Transfer Taxes. The Company shall pay all original issue
and transfer taxes (but not income taxes, if any) with respect to the grant
of Options and the issue and transfer of Shares pursuant to the exercise of
such Options, and all other fees and expenses necessarily incurred by the
Company in connection therewith, and will use its best efforts to comply
with all laws and regulations which, in the opinion of counsel for the
Company, shall be applicable thereto.
(b) Withholding. The grant of Options hereunder and the issuance of
Shares of Common Stock pursuant to the exercise of such Options are
conditioned upon the Company's reservation of the right to withhold, in
accordance with any applicable law, from any compensation payable to the
Optionee any taxes required to be withheld by federal, state or local law
as a result of the grant or exercise of such Option or the sale of the
Shares issued upon exercise of the Option.
18. SHAREHOLDER APPROVAL OF PLAN A AND PLAN B. Continuance of Plan A and
Plan B and the effectiveness of any Option granted under such Plan shall be
subject to approval by the holders of the outstanding voting stock of the
Company in accordance with applicable law within twelve (12) months before or
after the date Plan A and Plan B is adopted by the Board. Any Options granted
under Plan A and Plan B prior to obtaining such shareholder approval shall be
granted upon the conditions that the Options so granted: (i) shall not be
exercisable prior to such approval and (ii) shall become null and void ab initio
if such shareholder approval is not obtained.
19. LIABILITY OF COMPANY. The Company, its Parent or any Subsidiary which
is in existence or hereafter comes into existence, will not be liable to an
Optionee granted an Incentive Option or other person if it is determined for any
reason by the Internal Revenue Service or any court having jurisdiction that any
Incentive Options granted hereunder are not Incentive Stock Options.
20. NOTICES. Any notice to be given to the Company pursuant to the
provisions of the Plans shall be addressed to the Company in care of its
Secretary at its principal office, and any notice to be given to an Optionee
shall be delivered personally or addressed to such Optionee at the address given
beneath such Optionee's signature on such Optionee's Stock Option Agreement, or
at such other address as such Employee (or any transferee) upon the transfer of
the Optioned Stock may hereafter designate in writing to the Company. Any such
notice shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, registered or certified, and deposited, postage
and registry or certification fee prepaid, in a post office or branch post
office regularly maintained by the United States Postal Service. It shall be the
obligation of each Optionee and each transferee holding Shares purchased upon
exercise of an Option to provide the Secretary of the Company, by letter mailed
as provided hereinabove, with written notice of such person's direct mailing
address.
<PAGE>
21. NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is purely voluntary on the
part of the Company, and the continuance of the Plan shall not be deemed to
constitute a contract between the Company and any Employee, or to be
consideration for or a condition of the employment of any Employee. Nothing
contained in this Plan shall be deemed to give any Employee the right to be
retained in the employ of the Company, its Parent, Subsidiary or a successor
corporation, or to interfere with the right of the Company or any such
corporations to discharge or retire any Employee thereof at any time. No
Employee shall have any right to or interest in Options authorized hereunder
prior to the grant of such Option to such employee, and upon such grant he or
she shall have only such rights and interests as are expressly provided herein,
subject, however, to all applicable provisions of the Company's Certificate of
Incorporation, as the same may be amended from time to time.
22. LEGENDS ON CERTIFICATES.
(a) Federal Law. Unless an appropriate registration statement is filed
pursuant to the Federal Securities Act of 1933, as amended, with respect to
the Options and Shares issuable under the Plans, each certificate
representing such Options and Shares shall be endorsed on its face with a
legend substantially as follows:
"THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE
OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED."
(b) State Legend. If required by applicable state authorities each
certificate representing the Options and Shares issuable under the Plans
shall be endorsed on its face with any legends required by such
authorization.
(c) Additional Legends. Each certificate representing the Options and
Shares issuable under the Plans shall also contain legends as are set forth
in any Stock Purchase Agreement or other agreement the execution of which
is a condition to the exercise of an Option under this Plan. In addition,
each Option Agreement shall be endorsed with a legend substantially as
follows:
"THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAYBE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE
AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY, TO BE ENTERED INTO BETWEEN THE HOLDER OF THIS OPTION AND THE
COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION."
23. AVAILABILITY OF PLAN. A copy of the Plans shall be delivered to the
Secretary of the Company and shall be shown by him to any eligible person making
reasonable inquiry concerning it.
24. INVALID PROVISIONS. In the event that any provision of the Plans is
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein as invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision was not contained herein.
25. APPLICABLE LAW. These Plans shall be governed and construed in
accordance with the laws of the State of Florida applicable to contracts
executed, and to be fully performed, in Florida.
<PAGE>
IN WITNESS WHEREOF, pursuant to the due authorization and adoption of these
Plans by the Board on , 199__, the Company has caused these Plans to be duly
executed by its duly authorized officers, effective as of , 199__.
San Marino Minerals, Inc.
a Florida corporation
-------------------------
By:
---------------------
Title:
------------------
<PAGE>
EXHIBIT "A"
PLAN A
THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS
OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO
BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION.
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made as of the ___ day of _______, 199__, by and between San
Marino Minerals, Inc., a Florida corporation (hereinafter called "Company") and
____________ (hereinafter called "Optionee").
RECITALS
A. The Board of Directors of the Company has adopted the Company's 1997
Incentive Stock Option Plan (the "Plan") for the purpose of attracting and
retaining the services of selected key employees (including officers and
employee directors), who contribute to the financial success of the Company or
its parent or subsidiary corporations.
B. Optionee is a key member of the Company or its parent or subsidiary
corporations, and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Company's grant of a
stock option to the Optionee.
C. The granted option is intended to be an incentive stock option
("Incentive Option") within the meaning of Section 422 of the Internal Revenue
Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions set forth
in this Agreement, there is hereby granted to Optionee, as of the date of this
Agreement (the "Grant Date"), a stock option to purchase up to __________ shares
of the Company's Common Stock (the "Optioned Shares") from time to time during
the option term at the option price of $_____ per share.
2. PLAN. The options granted hereunder are in all instances subject to the
terms and conditions of the Plan. In the event of any conflict between this
Agreement and the Plan, the provisions of the Plan shall control. Optionee
acknowledges receipt of a copy of the Plan and hereby accepts this option
subject to all of the terms and conditions of the Plan. Optionee agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board upon any questions arising under the Plan.
<PAGE>
3. OPTION TERM. This option shall have a maximum term of ___ (__) years
measured from the Grant Date and shall accordingly expire at the close of
business on ______, _____ (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 7, 9(a) or 20.
4. OPTION NONTRANSFERABLE; EXCEPTION. This option shall be neither
transferable nor assignable by Optionee, either voluntarily or involuntarily,
other than by will or by the laws of descent and distribution and may be
exercised, during Optionee's lifetime, only by Optionee.
5. CONDITION PRECEDENT TO EXERCISE. This option may not be exercised in
whole or in part at any time prior to the time the Company has satisfied the
following condition precedent: ______________. In the event the foregoing
condition precedent has not been satisfied prior to the Expiration Date or prior
to this option's earlier termination in accordance with Paragraph 7, 9(a) or 20,
then this option shall terminate and cease to be outstanding.
6. DATES OF EXERCISE. This option may not be exercised in whole or in part
at any time prior to the time it is approved by the Company's shareholders in
accordance with Paragraph 20. Provided such shareholder approval is obtained and
the condition precedent to exercise set forth in Paragraph 5 has been satisfied,
this option shall become exercisable for 100% of the Optioned Shares one (1)
year from the Grant Date, provided that in no event may options for more than
One Hundred Thousand Dollars ($100,000) of Optioned Shares, calculated at the
exercise price, become exercisable for the first time in any calendar year. Once
exercisable, options shall remain so exercisable until the expiration or sooner
termination of the option term under Paragraph 7 or Paragraph 9(a) of this
Agreement. In no event, however, shall this option be exercisable for any
fractional shares.
7. ACCELERATED TERMINATION OF OPTION TERM. The option term specified in
Paragraph 3 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should one of the following provisions become
applicable:
(i) Except as otherwise provided in subparagraphs (ii) and (iii)
below, should Optionee cease to be an Employee of the Company for any
reason at any time during the option term, any option of the Optionee,
whether vested or non-vested, and if issued under Plan A, shall terminate
as of the date of termination of employment.
(ii) Should Optionee die while this option is outstanding, then the
executors or administrators of Optionee's estate or Optionee's heirs or
legatees (as the case may be) shall have the right to exercise this option
for the number of shares (if any) for which the option is exercisable on
the date of the optionee's death. Such right shall lapse and this option
shall cease to be exercisable upon the earlier of (i) six (6) months from
the date of the optionee's death or (ii) the Expiration Date.
(iii) Should Optionee become permanently disabled and cease by reason
thereof to be an Employee of the Company at any time during the option
term, then Optionee shall have a period of six (6) months (commencing with
the date of such cessation of Employee status) during which to exercise
this option; provided, however, that in no event shall this option be
exercisable at any time after the Expiration Date. Optionee shall be deemed
to be permanently disabled if Optionee is, by reason of any medically
determinable physical or mental impairment expected to result in death or
to be of continuous duration of not less than twelve (12) months, unable to
perform his/her usual duties for the Company or its Parent or Subsidiary
corporations. Upon the expiration of the limited period of exercisability
or (if earlier) upon the Expiration Date, this option shall terminate and
cease to be outstanding.
(iv) For purposes of this Paragraph 7 and for all other purposes under
this Agreement, Optionee shall be deemed to be an Employee of the Company
and to continue in the Company's employ for so long as Optionee remains an
Employee of the Company or one or more of its parent or subsidiary
corporations as such terms are defined in the Plan.
8. ADJUSTMENT IN OPTION SHARES.
(a) In the event any change is made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, combination of
shares, or other change affecting the outstanding Common Stock as a class
without receipt of consideration (as set forth in the Plan), then
appropriate adjustments will be made to (i) the total number of Optioned
Shares subject to this option and (h) the option price payable per share in
order to reflect such change and thereby preclude a dilution or enlargement
of benefits hereunder.
<PAGE>
(b) If the Company is the surviving entity in any merger or other
business combination, then this option, if outstanding under the Plan
immediately after such merger or other business combination shall be
appropriately adjusted to apply and pertain to the number and class of
securities to which Optionee immediately prior to such merger of other
business combination would have been entitled to receive in the
consummation of such merger or other business combination.
9. SPECIAL TERMINATION OF OPTION.
(a) In the event of one or more of the following transactions (a
"Corporate Transaction"):
(i) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company; or
(iii) any other corporate reorganization or business combination
in which fifty percent (50%) or more of the Company's outstanding
voting stock is transferred, or exchanged through merger, to different
holders in a single transaction or a series of related transactions;
then this option shall terminate upon the consummation of such Corporate
Transaction and cease to be exercisable, unless it is expressly assumed by
the successor corporation or parent thereof. The Company shall provide
Optionee with at least thirty (30) days prior written notice of the
specified date for the Corporate Transaction. The Company can give no
assurance that the options shall be assumed by the successor corporation or
its parent company and it may occur that some options outstanding under the
Plan will be assumed while these options are terminated.
(b) In the event of a Corporate Transaction, the Company may, at its
option, accelerate the vesting schedule contained in Section 6 hereof, but
shall have no obligation to do so. The Company shall have the right to
accelerate other options outstanding under the Plan or any other plan, even
if it does not accelerate the options of Optionee hereunder.
(c) This Agreement shall not in any way affect the right of the
Company to make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
10. PRIVILEGE OF STOCK OWNERSHIP. The holder of this option shall not have
any of the rights of a shareholder with respect to the Optioned Shares until
such individual shall have exercised the option and paid the option price in
accordance with this Agreement.
<PAGE>
11. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any part
of the Optioned Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
(i) Execute and deliver to the Secretary of the Company a stock
purchase agreement in substantially the form of Exhibit D to this
Agreement (the "Purchase Agreement");
(ii) Pay the aggregate option price for the purchased shares in
cash, unless another form of consideration is permitted as described
in Exhibit C, if any, attached hereto or by the Board at the time of
exercise.
(b) This option shall be deemed to have been exercised with respect to
the number of Optioned Shares specified in the Purchase Agreement at such
time as the executed Purchase Agreement for such shares shall have been
delivered to the Company and all other conditions of this Section have been
fulfilled. Payment of the option price shall immediately become due and
shall accompany the Purchase Agreement. As soon thereafter as practical,
the Company shall mail or deliver to Optionee or to the other person or
persons exercising this option a certificate or certificates representing
the shares so purchased and paid for.
12. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of Optioned Shares
upon such exercise shall be subject to compliance by the Company and
Optionee with all applicable requirements of law relating thereto and with
all applicable regulations of any stock exchange on which shares of the
Company's Common Stock may be listed at the time of such exercise and
issuance.
(b) In connection with the exercise of this option, Optionee shall
execute and deliver to the Company such representations in writing as may
be requested by the Company in order for it to comply with the applicable
requirements of federal and state securities laws.
13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraph 4 or 9(a), the provisions of this Agreement shall insure to the
benefit of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Company.
14. LIABILITY OF COMPANY.
(a) If the Optioned Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without
shareholder approval be issued under the Plan, then this option shall be
void with respect to such excess shares unless shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of
Section 18 of the Plan.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option
without the imposition of requirements unacceptable to the Company in its
reasonable discretion shall relieve the Company of any liability with
respect to the non-issuance or sale of the Common Stock as to which such
approval shall not have been obtained. The Company, however, shall use its
best efforts to obtain all such approvals.
(c) Neither the Company nor any Parent, Subsidiary or successor
corporation will have any liability to Optionee or any other person if it
is determined for any reason that any options granted hereunder are not
Incentive Stock Options.
15. NO EMPLOYMENT CONTRACT. Except to the extent the terms of any written
employment contract between the Company and Optionee may expressly provide
otherwise, the Company (or any parent or subsidiary corporation of the Company
employing Optionee) shall be under no obligation to continue the employment of
Optionee for any period of specific duration and may terminate Optionee's status
as an Employee at any time, with or without cause.
16. NOTICES. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Company in care of its Secretary at its corporate offices. Any notice required
to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated below Optionee's signature line on this
Agreement. All notices shall be deemed to have been given or delivered upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and properly
addressed to the party to be notified.
17. LOANS OR GUARANTEES. The Company may, in its absolute discretion and
without any obligation to do so, assist Optionee in the exercise of this option
by (i) authorizing the extension of a loan to Optionee from the Company, (ii)
permitting Optionee to pay the option price for the purchased Common Stock in
installments over a period of years, or (iii) authorizing a guarantee by the
Company of a third party loan to Optionee. The terms of any loan, installment
method of payment or guarantee (including the interest rate, the Collateral
requirements and terms of repayment) shall be established by the Company in its
sole discretion.
18. CONSTRUCTION. This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the Plan. All decisions of the Company with respect to any question or issue
arising under the Plan or this Agreement shall be conclusive and binding on all
persons having an interest in this option.
<PAGE>
19. GOVERNING LAW. The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida.
20. SHAREHOLDER APPROVAL. The grant of this option is subject to approval
of the Plan by the Company's shareholders within twelve (12) months after the
adoption of the Plan by the Board of Directors, and this option may not be
exercised in whole or in part until such shareholder approval is obtained. In
the event that such shareholder approval is not obtained, then this option shall
thereupon terminate and Optionee shall have no further rights to acquire any
Optioned Shares hereunder.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
in duplicate on its behalf by its duly authorized officer and Optionee has also
executed this Agreement in duplicate, all as of the day and year indicated
above.
San Marino Minerals, Inc.
a Florida corporation
-------------------------
By:
---------------------
Title:
------------------
- - ------------------------------------
Optionee
Address:
---------------------------
---------------------------
<PAGE>
EXHIBIT "B"
PLAN A
Other Forms of Acceptable Consideration
[If no forms are listed hereon, cash shall be the only
acceptable form of consideration for the exercise of the
options.]
-----------------
<PAGE>
EXHIBIT "C"
PLAN B
THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS
OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION TATEMENT RELATING
THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO
BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION.
NON-STATUTORY STOCK OPTION AGREEMENT
AGREEMENT made as of the ____ day of ______, 199__, by and between San
Marino Minerals, Inc., a Florida corporation (hereinafter called "Company"), and
_______________ (hereinafter called "Optionee").
RECITALS
A. The Board of Directors of the Company has adopted the Company's 1997
Non-Statutory Stock Option Plan (the "Plan") for the purpose of attracting and
retaining the services of selected key employees (including officers and
employee directors) and others (collectively, "Eligible Persons"), who
contribute to the financial success of the Company or its parent or subsidiary
corporations.
B. Optionee is an Eligible Person and this Agreement is executed pursuant
to, and is intended to carry out the purposes of, the Plan in connection with
the Company's grant of a stock option to Optionee.
C. The granted option is not intended to be an incentive stock option
("Incentive Option") within the meaning of Section 422 of the Internal Revenue
Code, but is rather a non-statutory option.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions set forth
in this Agreement, there is hereby granted to Optionee, as of the date of this
Agreement (the "Grant Date"), a stock option to purchase up to _________ shares
of the Company's Common Stock (the "Optioned Shares") from time to time during
the option term at the option price of $____ per share. ----------
2. PLAN. The options granted hereunder are in all instances subject to the
terms and conditions of the Plan. In the event of any conflict between this
Agreement and the Plan, the provisions of the Plan shall control. Optionee
acknowledges receipt of a copy of the Plan and hereby accepts this option
subject to all of the terms and conditions of the Plan. Optionee agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board upon any questions arising under the Plan.
<PAGE>
3. OPTION TERM. This option shall have a maximum term of years measured
from the Grant Date and shall accordingly expire at the close of business on
_____ ____ , 199__ (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 6 or 8(a).
4. OPTION NONTRANSFERABLE; EXCEPTION. This option shall be neither
transferable nor assignable by Optionee, either voluntarily or involuntarily,
other than by will or by the laws of descent and distribution and may be
exercised, during Optionee's lifetime, only by Optionee.
5. DATES OF EXERCISE. This option shall be exercisable as follows:
_________. Once exercisable, options shall remain so exercisable until the
expiration or sooner termination of the option term under Paragraph 6 or
Paragraph 8(a) of this Agreement. In no event, however, shall this option be
exercisable for any fractional shares.
6. ACCELERATED TERMINATION OF OPTION TERM. The option term specified in
Paragraph 3 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should one of the following provisions become
applicable:
(i) (i) Except as otherwise provided in subparagraphs (ii) and (iii)
below, should Optionee cease to be an Employee of the Company for any
reason at any time during the option term, any option of the Optionee,
whether vested or non-vested, and if issued under Plan B, shall terminate
as of the date of termination of employment.
(ii) Should Optionee die while this option is outstanding, then the
executors or administrators of Optionee's estate or Optionee's heirs or
legatees (as the case may be) shall have the right to exercise this option
for the number of shares (if any) for which the option is exercisable on
the date of the optionee's death. Such right shall lapse and this option
shall cease to be exercisable upon the earlier of (i) six (6) months from
the date of the optionee's death or (ii) the Expiration Date.
(iii) Should Optionee become permanently disabled and cease by reason
thereof to be an Employee of the Company at any time during the option
term, then Optionee shall have a period of six (6) months (commencing with
the date of such cessation of Employee status) during which to exercise
this option; provided, however, that in no event shall this option be
exercisable at any time after the Expiration Date. Optionee shall be deemed
to be permanently disabled if Optionee is, by reason of any medically
determinable physical or mental impairment expected to result in death or
to be of continuous duration of not less than twelve (12) months, unable to
perform his/her usual duties for the Company or its Parent or Subsidiary
corporations. Upon the expiration of the limited period of exercisability
or (if earlier) upon the Expiration Date, this option shall terminate and
cease to be outstanding.
(iv) For purposes of this Paragraph 6 and for all other purposes under
this Agreement, if Optionee is an Employee, Optionee shall be deemed to be
an Employee of the Company and to continue in the Company's employ for so
long as Optionee remains an Employee of the Company or one or more of its
parent or subsidiary corporations as such terms are defined in the Plan.
For purposes of this Paragraph 6 and for all other purposes under this
Agreement, if Optionee is not an Employee, but is eligible because Optionee
is a director, consultant or contractor of Company or a parent or
subsidiary corporation, Optionee shall be deemed to be an Eligible Person
for so long as Optionee remains a director, consultant or contractor of the
Company or one or more of its parent or subsidiary corporations as such
terms are defined in the Plan.
7. ADJUSTMENT IN OPTION SHARES.
(a) In the event any change is made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, combination of
shares, or other change affecting the outstanding Common Stock as a class
without receipt of consideration (as set forth in the Plan), then
appropriate adjustments will be made to (i) the total number of Optioned
Shares subject to this option and (ii) the option price payable per share
in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
<PAGE>
(b) If the Company is the surviving entity in any merger or other
business combination, then this option, if outstanding under the Plan
immediately after such merger or other business combination shall be
appropriately adjusted to apply and pertain to the number and class of
securities to which Optionee immediately prior to such merger or other
business combination would have been entitled to receive in the
consummation of such merger or other business combination.
8. SPECIAL TERMINATION OF OPTION.
(a) In the event of one or more of the following transactions (a
"Corporate Transaction"):
(i) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company; or
(iii) any other corporate reorganization or business
combination in which fifty percent (50%) or more of the Company's
outstanding voting stock is transferred, or exchanged through
merger, to different holders in a single transaction or a series
of related transactions;
then this option shall terminate upon the consummation of such Corporate
Transaction and cease to be exercisable, unless it is expressly assumed by
the successor corporation or parent thereof. The Company shall provide
Optionee with at least thirty (30) days prior written notice of the
specified date for the Corporate Transaction. The Company can give no
assurance that the options shall be assumed by the successor corporation or
its parent company and it may occur that some options outstanding under the
Plan will be assumed while these options are terminated.
(b) In the event of a Corporate Transaction, the Company may, at its
option, accelerate the vesting schedule contained in Section 5 hereof, but
shall have no obligation to do so. The Company shall have the right to
accelerate other options outstanding under the Plan or any other plan, even
if it does not accelerate the options of Optionee hereunder.
(c) This Agreement shall not in any way affect the right of the
Company to make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
9. PRIVILEGE OF STOCK OWNERSHIP. The holder of this option shall not have
any of the rights of a shareholder with respect to the Optioned Shares until
such individual shall have exercised the option and paid the option price in
accordance with this Agreement.
10. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any part
of the Optioned Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
(i) Execute and deliver to the Secretary of the Company a stock
purchase agreement in substantially the form of Exhibit "E" to this
Agreement (the "Stock Purchase Agreement");
(ii) Pay the aggregate option price for the purchased shares in
cash, unless another form of consideration is permitted as described
in Exhibit D, if any, attached hereto or by the Board at the time of
exercise.
(b) This option shall be deemed to have been exercised with respect to
the number of Optioned Shares specified in the Purchase Agreement at such
time as the executed Purchase Agreement for such shares shall have been
delivered to the Company and all other conditions of this Section have been
fulfilled. Payment of the option price shall immediately become due and
shall accompany the Purchase Agreement. As soon thereafter as practical,
the Company shall mail or deliver to Optionee or to the other person or
persons exercising this option a certificate or certificates representing
the shares so purchased and paid for.
<PAGE>
11. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of Optioned Shares
upon such exercise shall be subject to compliance by the Company and
Optionee with all applicable requirements of law relating thereto and with
all applicable regulations of any stock exchange on which shares of the
Company's Common Stock may be listed at the time of such exercise and
issuance.
(b) In connection with the exercise of this option, Optionee shall
execute and deliver to the Company such representations in writing as may
be requested by the Company in order for it to comply with the applicable
requirements of federal and state securities laws.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraph 4 or 8(a), the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Company.
13. LIABILITY OF COMPANY.
(a) If the Optioned Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without
shareholder approval be issued under the Plan, then this option shall be
void with respect to such excess shares unless shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of
Section 18 of the Plan.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option
without the imposition of requirements unacceptable to the Company in its
reasonable discretion shall relieve the Company of any liability with
respect to the nonissuance or sale of the Common Stock as to which such
approval shall not have been obtained. The Company, however, shall use its
best efforts to obtain all such approvals.
14. NO EMPLOYMENT CONTRACT. Except to the extent the terms of any written
employment contract between the Company and Optionee may expressly provide
otherwise, the Company (or any parent or subsidiary corporation of the Company
employing Optionee) shall be under no obligation to continue the employment of
Optionee for any period of specific duration and may terminate Optionee's status
as an Employee at any time, with or without cause.
15. NOTICES. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Company in care of its Secretary at its corporate offices. Any notice required
to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated below Optionee's signature line on this
Agreement. All notices shall be deemed to have been given or delivered upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and properly
addressed to the party to be notified.
16. WITHHOLDING. Optionee acknowledges that, upon any exercise of this
option, the Company shall have the right to require Optionee topay to the
Company an amount equal to the amount the Company is required to withhold as a
result of such exercise for federal and state income tax purposes.
17. LOANS OR GUARANTEES. The Company may, in its absolute discretion and
without any obligation to do so, assist Optionee in the exercise of this option
by (i) authorizing the extension of a loan to Optionee from the Company, (ii)
permitting Optionee to pay the option price for the purchased Common Stock in
installments over a period of years, or (iii) authorizing a guarantee by the
Company of a third party loan to Optionee. The terms of any loan, installment
method of payment or guarantee (including the interest rate, the Collateral
requirements and terms of repayment) shall be established by the Company in its
sole discretion.
18. CONSTRUCTION. This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the express terms and provisions of the Plan. All decisions of the Company
with respect to any question or issue arising under the Plan or this Agreement
shall be conclusive and binding on all persons having an interest in this
option.
<PAGE>
19. GOVERNING LAW. The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida.
20. REPURCHASE R1GHTS. OPTIONEE HEREBY AGREES THAT ALL OPTIONED SHARES
ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF
THE COMPANY AND ITS ASSIGNS TO REPURCHASE SUCH SHARES IN ACCORDANCE WITH THE
TERMS AND CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT,
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
duplicate on its behalf by its duly authorized officer and Optionee has also
executed this Agreement in duplicate, all as of the day and year indicated
above.
San Marino Minerals, Inc.
a Florida corporation
-------------------------
By:
---------------------
Title:
------------------
- - ------------------------------------
Optionee
Address:
---------------------------
---------------------------
<PAGE>
EXHIBIT "D"
PLAN B
Other Forms of Acceptable Consideration
[If no forms are listed hereon, cash shall be the only acceptable form
of consideration for the exercise of the options.]
<PAGE>
EXHIBIT "E"
STOCK PURCHASE AGREEMENT
This Agreement is made as of this ____ day of ______, 199__, by and among
San Marino Minerals, Inc., a Florida corporation ("Corporation"), and ________,
the holder of a stock option under the Corporation's 1997 Stock Option Plan
("Optionee").
1. EXERCISE OF OPTION
1.1 Exercise. Optionee hereby purchases shares of Class A Common Stock
of the Corporation ("Purchased Shares") pursuant to that certain option
("Option") granted Optionee on _______, 199__, under the Corporation's 1997
Stock Option Plan ("Plan") to purchase up to ______ shares of the
Corporation's Common Stock at an option price of $___ per share ("Option
Price").
1.2 Payment. Concurrently with the delivery of this Agreement to the
Secretary of the Corporation, Optionee shall pay the Option Price for the
Purchased Shares in accordance with the provisions of the agreement between
the Corporation and Optionee evidencing the Option ("Option Agreement") and
shall deliver whatever additional documents may be required by the Option
Agreement as a condition for exercise.
2. INVESTMENT REPRESENTATIONS
2.1 Investment Intent. Optionee hereby warrants and represents that
Optionee is acquiring the Purchased Shares for Optionee's own account and
not with a view to their resale or distribution and that Optionee is
prepared to hold the Purchased Shares for an indefinite period and has no
present intention to sell, distribute or grant any participating interests
in the Purchase Shares. Optionee hereby acknowledges the fact that the
Purchased Shares have not been registered under the Securities Act of 1933,
as amended (the "1933 Act"), and that the Corporation is issuing the
Purchased Shares to Optionee in reliance on the representations made by
Optionee herein.
2.2 Restricted Securities. Optionee hereby confirms that Optionee has
been informed that the Purchased Shares may not be resold or transferred
unless the Purchased Shares are first registered under the Federal
securities laws or unless an exemption from such registration is available.
Accordingly, Optionee hereby acknowledges that Optionee is prepared to hold
the Purchased Shares for an indefinite period and that Optionee is aware
that Rule 144 of the Securities and Exchange Commission issued under the
1933 Act is not presently available to exempt the sale of the Purchased
Shares from the registration requirements of the 1933 Act. Should Rule 144
subsequently become available, Optionee is aware that any sale of the
Purchased Shares effected pursuant to the Rule may, depending upon the
status of Optionee as an affiliate" or "non-affiliate" under the Rule, be
made only in limited amounts in accordance with the provisions of the Rule,
and that in no event may any Purchased Shares be sold pursuant to the Rule
until Optionee has held the Purchased Shares for the requisite holding
period following payment in cash of the Option Price for the Purchased
Shares.
2.3 Optionee Knowledge. Optionee represents and warrants that he or
she has a preexisting business or personal relationship with the officers
and directors of the Corporation, that he or she is aware of the business
affairs and financial condition of the Corporation and that he or she has
such knowledge and experience in business and financial matters with
respect to companies in business similar to the Corporation to enable him
or her to evaluate the risks of the prospective investment and to make an
informed investment decision with respect thereto. Optionee further
represents and warrants that the Corporation has made available to Optionee
the opportunity to ask questions and receive answers from the Corporation
concerning the terms and conditions of the issuance of the Purchased Shares
and that he or she could be reasonably assumed to have the capacity to
protect his or her own interests in connection with such investment.
2.4 Speculative Investment. Optionee represents and warrants that he
or she realizes that his or her purchase of the Purchased Shares will be a
speculative investment and that he or she is able, without impairing his or
her financial condition, to hold the Purchased Shares for an indefinite
period of time and to suffer a complete loss of his or her investment.
Optionee represents and warrants that he or she is aware and fully
understands the implications of the restrictions upon transfer imposed by
the Plan and therefore on the Purchased Shares.
2.5 Restrictive Legends. In order to reflect the restrictions on
disposition of the Purchased Shares, the stock certificates for the
Purchased Shares will be endorsed with the following legend:
<PAGE>
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, ASSIGNED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
THEREUNDER OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
3. MISCELLANEOUS PROVISIONS
3.1 Optionee Undertaking. Optionee hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation
may in its judgment deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions imposed on either the
Optionee or the Purchased Shares pursuant to the express provisions of this
Agreement.
3.2 Agreement Is Entire Contract. This Agreement constitutes the
entire contract between the parties hereto with regard to the subject
matter hereof. This Agreement is made pursuant to the provisions of the
Plan and shall in all respects be construed in conformity with the express
terms and provisions of the Plan.
3.3 Governing Law. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
3.4 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
3.5 Successors and Assigns. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and the Optionee and the Optionee's legal
representatives, heirs, legatees, distributees, assigns and transfer by
operation of law, whether or not any such person shall have become a party
to this Agreement and have agreed in writing to join herein and be bound by
the terms and conditions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first indicated above.
San Marino Minerals, Inc.
a Florida corporation
-------------------------
By:
---------------------
Title:
------------------
- - ------------------------------------
Optionee
Address:
---------------------------
---------------------------
<PAGE>
1998 INCENTIVE STOCK OPTION PLAN AND 1998
NONSTATUTORY STOCK OPTION PLAN
1. NAMES AND PURPOSES OF THE PLANS. This Plan document is intended to
implement and govern two separate Stock Option Plans of San Marino Minerals,
Inc., a Florida corporation (the "Company"): the 1998 Incentive Stock Option
Plan ("Plan A") and the 1998 Nonstatutory Stock Option Plan ("Plan B")
(collectively the "Plans"). Plan A provides for the granting of options that are
intended to qualify as incentive stock options ("Incentive Stock Options")
within the meaning of Section 422(b) of the Internal Revenue Code, as amended.
Plan B provides for the granting of options that are not intended to so qualify.
Unless specified otherwise, all the provisions of this Plan document relate
equally to both Plan A and Plan B, which Plans are condensed into one Plan
document solely for purposes of administrative convenience and are not intended
to constitute tandem plans. The purposes of the Plans are (a) to attract and
retain the best available people for positions of substantial responsibility,
and (b) to provide additional incentive to the Employees of the Company (and its
future parents and subsidiaries, if any) and to promote the success of the
Company's business.
2. DEFINITIONS. For purposes of the Plans, the following terms will have
the respective meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company;
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended;
(c) "Common Stock" shall mean the Class A common stock of the Company;
(d) "Company" shall mean San Marino Minerals, Inc., a Florida
corporation;
(e) "Committee" shall mean the committee appointed by the Board in
accordance with Paragraph 3(a) of this Plan document, if one is appointed;
(f) "Employee" shall mean any person, including an officer or
director, who is an employee (within the meaning of Section 422 of the
Code) of the Company, any parent, any subsidiary or any successors to any
of the foregoing;
(g) "Incentive Option" shall mean an incentive stock option as defined
in Section 422(b) of the Code;
(h) "Non-Statutory Option" shall mean an option which does not qualify
as an Incentive Option;
(i) "Option" shall mean a stock option granted pursuant to the Plan,
whether an Incentive Option or a Non-Statutory Option;
(j) "Option Agreement" shall mean an agreement substantially in the
form attached hereto as Exhibit A or the form attached hereto as Exhibit B,
or such other form or forms as the Board (subject to the terms and
conditions of the Plans) may from time to time approve, evidencing an
Option;
(k) "Option Grant Date" shall mean the date on which an Option is
granted by the Board;
(1) "Optioned Stock" shall mean the Common Stock subject to an Option
granted pursuant to a Plan;
(m) "Optionee" shall mean an Employee or other Eligible Person who
receives an Option;
(n) "Outstanding Incentive Option" shall mean any Incentive Stock
Option which has not yet been exercised in full or has not yet expired by
lapse of time;
(o) "Parent" shall mean a "parent corporation" as defined in Section
424(e) of the Code;
(p) "Plan A" shall mean the 1998 Incentive Stock Option Plan;
(q) "Plan B" shall mean the 1998 Non-Statutory Stock Option Plan;
(r) "Predecessor Corporation" shall mean a corporation which is a
party to a transaction described in Code Section 424(a) (or which would be
so described if a substitution or assumption under such section had been
effected) with the Company, a Parent, a Subsidiary or a predecessor
corporation of any such corporations.
<PAGE>
(s) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 13 of this Plan document;
(t) "Stock Purchase Agreement" shall mean an agreement substantially
in the form attached hereto as Exhibit D or such other form or forms as the
Board (subject to the terms and conditions of this Plan) may from time to
time approve, which is to be executed as a condition of purchasing Optioned
Stock upon exercise of an Option as provided in a Plan; and,
(u) "Subsidiary" shall mean a subsidiary corporation as defined in
Section 424(f) of the Code.
3. ADMINISTRATION OF PLAN.
(a) Procedure. The Plans shall be administered by the Board. The Board
may appoint a Committee consisting of not less than two (2) members of the
Board to administer one or both of the Plans on behalf of the Board,
subject to such terms and conditions as the Board may prescribe. Once
appointed, the Committee shall continue to serve until otherwise directed
by the Board. From time to time, the Board may increase the size of the
Committee and appoint additional members thereof, remove members of the
Committee, and thereafter, directly administer the Plans. Any references
herein to the Board shall refer to the Committee, if one is appointed, to
the extent of the Committee's authority.
(b) Limitations on Members of Board. Members of the Board who are
either eligible for options or have been granted Options may vote on any
matters affecting the administration of the Plans or the grant of any
Options pursuant to the Plans; except that no such member shall act in
connection with an Option to himself or herself, but any such member may be
counted in determining the existence of a quorum at any meeting of the
Board during which action is taken with respect to Options of such member
(c) Powers of the Board. Subject to the provisions of the Plan the
Board shall have the authority, in its discretion, to make all
determinations necessary or advisable for the administration of the Plans,
including without limitation:
(i) to determine, upon review of relevant information, the then
fair market value per share of the Common Stock;
(ii) to determine the exercise price of the Options to be
granted, subject to the provisions of Paragraph 8 of this Plan
document;
(iii) to determine the Employees to whom, and the time or times
at which, Options shall be granted, and the number of shares of
Optioned Stock to be represented by each Option;
(iv) to determine whether Options granted hereunder shall be
granted under Plan A as Incentive Options or Plan B as Non-statutory
Options;
(v) to prescribe, amend and rescind rules and regulations
relating to the Plans;
(vi) to determine the terms and provisions of each Option granted
under the Plans (which need not be identical) and to modify or amend
each Option (with or without consent of the Optionee, if necessary);
(vii) to accelerate the exercise date of any Option;
(viii) to construe and interpret the Plans, the Option
Agreements, Stock Purchase Agreements and any other agreements
provided for hereunder; and
(ix) to authorize any person to execute on behalf of the Company
any instrument required to effectuate the grant of an Option
previously granted by the Board or to take such other actions as may
be necessary or advisable with respect to the Company's rights
pursuant to the Option, Stock Purchase Agreement or other agreement
approved hereunder.
<PAGE>
(d) Effect of the Board's or Committee's Decision. All decisions,
determinations and interpretations of the Board or the Committee shall be
final and binding on all Optionees and any other proper holders of any
Options granted under the Plan.
4. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 13 of
this Plan document, the maximum aggregate number of shares which may be optioned
under these Plans is 2,000,000 shares of authorized Common Stock. This
constitutes an absolute cumulative limitation on the total number of shares that
may be optioned under Plan A and Plan B and, therefore, at any particular date
the maximum aggregate number of shares which may be optioned under Plan A is
equal to 2,000,000 minus the number of shares previously optioned under Plan A
and Plan B; and the maximum aggregate number of shares which may be optioned
under Plan B is equal to 2,000,000 minus the number of shares which have been
previously optioned under Plan A or Plan B. All shares to be optioned under
either Plan A or Plan B may be either authorized but unissued shares or shares
held in the treasury. Shares of Common Stock that (a) are repurchased by the
Company after issuance hereunder pursuant to the exercise of an Option or (b)
are not purchased by the Optionee prior to the expiration of the applicable
Option Period (as described hereinbelow) shall again become available to be
covered by Options to be issued hereunder and shall not, as of the effective
date of such repurchase or expiration, be counted as having been previously
optioned for purposes of the above-described maximum number of shares which may
be optioned hereunder.
5. ELIGIBILITY. Options under Plan A may be granted to any Employee who is
designated by the Board in its discretion. NonEmployees, including directors of
the Company or any Parent or Subsidiary, who are not regular employees of the
Company, are not eligible to receive Options under Plan A. Options under Plan B
may be granted to any Employee, any Non-Employee director of Company or any
Parent or Subsidiary, and any consultant or independent contractors who provide
valuable services to the Company (or its Parent or Subsidiary), all as
designated by the Board in its discretion. An Optionee who has been granted an
Option may, if otherwise eligible, be granted an additional Option or Options.
Options may be granted to one or more persons without being granted to other
eligible persons, as the Board may deem fit.
6. TERM OF THE PLAN. Plan A shall become effective immediately upon the
earlier to occur of its adoption by the Board or its approval by vote of a
majority of the outstanding shares of the Company entitled to vote on the
adoption of such Plan. Plan B shall become effective immediately upon its
adoption by the Board. Each Plan shall continue in effect until December 31,
2008 unless sooner terminated under Sections 15 or 18 of this Plan document. No
Option may be granted under a Plan after its expiration.
7. OPTION PERIOD. Each Option granted pursuant to either Plan shall be
evidenced by an Option Agreement. Each Option shall expire and all rights
thereunder shall end at the expiration of such period (which shall in no event
be more than ten (10) years) after the Option Grant Date as shall be fixed by
the Board, subject in all cases to earlier expiration as provided in Section 11
of this Plan document. Notwithstanding the foregoing, the term of each Incentive
Option granted to an Employee who, at the time the Incentive Option is granted,
owns stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary
(determined as required by the Code as applied to Incentive Options) shall not
be more than five (5) years from the Option Grant Date.
8. OPTION PRICE AND CONSIDERATION.
(a) Price. The per share Option price for the Shares to be issued
pursuant to an Option granted under either Plan shall be such price as is
determined by the Board in its sole discretion. Notwithstanding the
foregoing, with respect to Incentive Options granted under Plan A: (i) such
price shall in no event be less than one hundred percent (100%) of the fair
market value per Share of the Company's Common Stock on the Option Grant
Date, as determined by the Board; and (ii) in the case of an Incentive
Option granted to an Employee who, at the time the Option is granted, owns
stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent, Subsidiary or
Predecessor Corporation (determined as required by the Code as applied to
Incentive Options), the per share Option price shall be at least one
hundred ten percent (110%) of the fair market value as of the Option Grant
Date, as determined by the Board. The fair market value shall be determined
by the Board in its sole discretion, exercised in good faith; provided,
however, that where there is a public market for the Common Stock, the fair
market value per share shall be the mean of the reported bid and asked
price for the Common Stock on the date of the grant, or, in the event the
Common Stock is listed on a stock exchange, the fair market value per share
shall be the closing price on the exchange as of the date of grant of the
Option.
<PAGE>
(b) Form of Consideration. The form of consideration to be paid for
the Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Board and may consist of cash,
promissory notes, or the surrender of shares of Common Stock having a fair
market value on the date of surrender equal to the purchase price of the
Shares as to which said Option shall be exercised, a combination thereof,
or such other consideration and method of payment for the issuance of
Shares as is permitted under applicable law.
(c) Promissory Notes. If the consideration for the exercise of an
Option is a promissory note, such note shall be a full recourse promissory
note executed by the Optionee. If the option is an Incentive Option under
Plan A, such note shall bear interest at a per annum rate which is not less
than the greater of (i) the applicable "test rate" described in Treasury
Regs. Section 1.4831(d) in effect on the date of exercise or (ii) a fair
market interest rate, as determined by the Board in its good faith
discretion. If a promissory note is given as consideration, the Company may
retain the Shares purchased upon exercise of the Option in escrow as
security for payment of the promissory note.
(d) Surrendered Common Stock. If the consideration for the exercise of
an Option is the surrender of previously acquired and owned shares of
common stock of the Company, the Optionee will be required to make
representations and warranties satisfactory to the Company regarding the
Optionee's title to the shares used to effect the purchase, including
without limitation, representations and warranties that the Optionee has
good and marketable title to such shares free and clear of any and all
liens, encumbrances, charges, equities, claims, security interests, options
or restrictions and has full power to deliver such shares without obtaining
the consent or approval of any person or governmental authority other than
those which have already given consent or approval in a form satisfactory
to the Company. The value of the shares used to effect the purchase shall
be the fair market value of those shares as determined by the Board in its
sole discretion, exercised in good faith.
9. LIMIT ON VALUE OF OPTIONED STOCK ISSUED UNDER PLAN A. The aggregate fair
market value (determined as of the Option Grant Date of each Option) of the
Shares with respect to which Incentive Options are exercisable for the first
time by the Optionee during any calendar year under Plan A and all other
incentive stock option plans of the Company, any Parent or Subsidiary, or any
Predecessor Corporation of any such corporation shall not exceed One Hundred
Thousand Dollars ($100,000.00), as determined pursuant to Section 422(d) of the
Code.
10. EXERCISE OF OPTION.
(a) General Terms. Any Option granted hereunder shall be exercisable
at such times and under such conditions as may be determined by the Board
which conditions may include performance criteria with respect to the
Company and/or the Optionee or provisions for vesting over a period of time
conditioned upon continued employment and shall include the contemporaneous
execution of a Stock Purchase Agreement in a form approved by the Board and
as shall be permissible under the terms of the Plan. In all events, in
order to exercise an Option hereunder the Optionee shall execute a Stock
Purchase Agreement in a form approved by the Board and shall deliver the
required (or permitted) exercise consideration to the Company. As a
condition to the exercise of an Option, the Board may require the Optionee
pursuant to the Option Agreement to agree to restrictions on the sale or
other transfer of ownership of the Common Stock acquired by an Optionee or
to sell such Shares to the Company upon termination of employment.
(b) Partial Exercise. An Option may be exercised in accordance with
the provisions of either Plan as to all or any portion of the Shares then
exercisable under an Option, from time to time during the term of the
Option. An Option may not be exercised for a fraction of a Share.
(c) Time of Exercise. An Option shall be deemed to be exercised when
the Company has received at its principal business office: (i) written
notice of such exercise in accordance with the terms of the Option
Agreement and given by the person entitled to exercise the Option; (ii)
full payment for the Shares with respect to which the Option is exercised;
(iii) the executed Stock Purchase Agreement if required; and (iv) any other
representations or agreements required by the terms of this Plan or the
Option Agreement. Full payment may consist of such consideration as is
authorized by the Board as provided hereunder.
<PAGE>
(d) No Rights as Shareholder Until Exercise. Until this Option is
properly exercised hereunder and the Company receives full payment for the
Shares with respect to which the Option is exercised, no right to receive
dividends or any other rights as a stockholder shall exist with respect to
the Optioned Stock. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the Option is properly
exercised and payment in full is received, except as provided in Section 13
of this Plan document.
(e) Issuance of Share Certificates. As soon as practicable after any
proper exercise of an Option in accordance with the provisions of this Plan
document and payment in full for the exercised Shares, the Company shall,
without transfer or issue tax to the Optionee, deliver to the Optionee at
the principal business office of the Company, or such other place as shall
be mutually acceptable, a certificate or certificates representing the
Shares of Common Stock as to which the Option has been exercised. The time
of issuance and delivery of the certificates) representing the Shares of
Common Stock may be postponed by the Company for such period as may be
required for it, with reasonable diligence, to comply with any applicable
listing requirements of any national or regional securities exchange and
any law or regulation applicable to the issuance and delivery of such
Shares.
(f) Reduction of Shares Upon Exercise. Exercise of an Option in any
manner shall result in a decrease in the number of Shares which thereafter
may be available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
11. TERMINATION OF EMPLOYMENT.
(a) General. If an Optionee ceases to be an Employee for any reason then,
except as provided in Paragraph 11(a) or 11(b) hereof, any Option of the
Optionee, whether vested or non-vested, and if issued under Plan A or Plan B,
shall terminate as of the date of termination of employment.
(b) Death or Disability. If Optionee dies or becomes disabled (within the
meaning of Code Section 422 and the rules and regulations thereunder) then,
within the earlier of thirty (30) days (or such other period of time not
exceeding six (6) months as set forth in the Option Agreement) following the
date of such death or disability and the time the Option expires by its terms,
the Optionee or such person or persons to whm the Optionee's rights under the
Option shall pass by the Optionee's will or by the laws of descent and
distribution, may exercise the Option to the extent it was vested and
exercisable on the date of death or disability.
12. NON-TRANSFERABILITY OF OPTIONS. The Options and any rights and
privileges granted under any Option Agreement are not transferable by the
Optionee, either voluntarily or by operation of law, otherwise than by will and
the laws of descent and distribution and shall be exercisable during Optionee's
lifetime only by Optionee.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) Reorganizations, Recapitalization, Etc. If the outstanding shares
of Common Stock of the Company are increased, decreased, changed into or
exchanged for a different number or kind of shares or securities of the
Company through reorganization, recapitalization, reclassification, stock
dividend (but only on Common Stock), stock split, reverse stock split or
other similar transaction, or, if any other increase or decrease occurs in
the number of Shares of Common Stock of the Company without the receipt of
consideration by the Company, then an appropriate and proportional
adjustment shall be made in (i) the number and kind of shares of stock
covered by each outstanding Option, (ii) the number and kind of shares of
stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted (or which have been returned to the
Plan upon cancellation of an Option), and (iii) the exercise price per
share of stock covered by each such outstanding Option. The granting of
stock options or bonuses to Employees of the Company and the conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without the receipt of consideration." Notwithstanding the
foregoing, no adjustment need be made under this paragraph if, upon the
advice of counsel, the Board determines that such adjustment may result in
federal taxable income to the holders of Options or Common Stock or other
classes of the Company's securities.
<PAGE>
(b) Dissolution, Liquidation, Etc. Upon the dissolution or liquidation
of the Company, or upon a reorganization, merger or consolidation of the
Company with one or more corporations as a result of which the Company is
not the surviving corporation, or upon a sale (or exchange through merger)
of substantially all the property or more than fifty percent (50%) of the
then outstanding stock of the Company to another corporation, the Plan
shall terminate, and any Option theretofore granted hereunder shall
terminate. Notwithstanding the foregoing, the Board may provide in writing
in connection with, or in contemplation of, such transaction for any, all
or none of the following alternatives (separately or in combination): (i)
for all or a portion of the Options theretofore granted to become
immediately exercisable; (ii) for the assumption by the successor
corporation of the Options theretofore granted or the substitution by such
corporation for such Options of new options covering the stock of the
successor corporation, or a Parent or Subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; or (iii) for
the continuance of the Plan by such successor corporation in which event
the Plan and the Options theretofore granted shall continue in the manner
and under the terms so provided.
(c) No Fractional Shares. No fractional shares of the Common Stock
shall be issuable on account of any action under this Paragraph 13, and the
aggregate number of shares into which Shares then covered by an Option,
when changed as the result of such action, shall be reduced to the largest
number of whole Shares resulting from such action. Notwithstanding the
foregoing, the Board, in its sole discretion, may determine to issue scrip
certificates, in respect to any fractional shares, which scrip
certificates, in such event, shall be in a form and have such terms and
conditions as the Board in its discretion shall prescribe.
(d) Binding Effect of Board Determinations. All adjustments under this
Paragraph 13 shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive.
(e) No Other Adjustments. Except as expressly provided herein, no
issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of Shares of Common Stock subject to the Plan or any Options.
14. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Amendment and Termination. The Board may at any time and from time
to time suspend or terminate either Plan. The Board may also amend or
revise either Plan from time to time in such respects as the Board may deem
advisable, except that, without approval of the holders of the majority of
the outstanding shares of the Company's Common Stock, no such revision or
amendment shall amend Plan A or Plan B so as to:
(i) Increase the number of Shares subject to Plan A or Plan B
other than in connection with an adjustment under Section 13 of this
Plan document;
(ii) Permit the granting of Incentive Options to anyone other
than as provided in Paragraph 5;
(iii) Remove the administration of Plan A or Plan B from the
Board;
(iv) Extend the term of Plan A or Plan B beyond that provided in
Paragraph 6 hereof;
(v) Extend the term of any Incentive Option beyond the maximum
term set forth in Paragraph 7;
(vi) Permit the granting of Incentive Options which would not
qualify as Incentive Stock Options; or (vii) Decrease the per share
option price required with respect to Incentive Options under
Paragraph 8(a) hereof.
(b) Effect of Termination. Except as otherwise provided in Section 13,
without the written consent of the Optionee, any such termination of the
Plan shall not affect Options already granted and such Options shall remain
in full force and effect as if the Plan had not been terminated.
<PAGE>
15. CONDITIONS UPON ISSUANCE OF SHARES. Options granted under either Plan
are conditioned upon the Company obtaining any required permit, or exemption
from the qualification or registration provisions of any applicable state
securities law and other appropriate governmental agencies, authorizing the
Company to issue such Options and Optioned Stock upon terms and conditions
acceptable to the Company. Shares shall not be issued with respect to an Option
granted under either Plan unless the exercise of such Option and the issuance
and delivery of such shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an Option, the Board may require the person
exercising such Option to execute an agreement approved by the Board, and may
require the person exercising such Option to make any representation and
warranty to the Company as may, in the judgment of counsel to the Company, be
required under applicable laws or regulations.
16. RESERVATION OF SHARES. During the term of the Plans, the Company will
at all times reserve and keep available the number of Shares as shall be
sufficient to satisfy the requirements of the Plans. During the term of the
Plans, the Company will use its best efforts to seek to obtain from appropriate
regulatory agencies any requisite authorization in order to issue and sell such
number of Shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Plan. The inability of the Company to obtain from any such
regulatory agency the requisite authorization(s) deemed by the Company's counsel
to be necessary to the lawful issuance and sale of any Shares hereunder, or the
inability of the Company to confirm to its satisfaction that any issuance and
sale of any Shares hereunder will meet applicable legal requirements, shall
relieve the Company of any liability in respect to the non-issuance or sale of
such Shares as to which such requisite authority shall not have been obtained.
17. TAXES, FEES, EXPENSES AND WITHHOLDING OF TAXES.
(a) Issue and Transfer Taxes. The Company shall pay all original issue
and transfer taxes (but not income taxes, if any) with respect to the grant
of Options and the issue and transfer of Shares pursuant to the exercise of
such Options, and all other fees and expenses necessarily incurred by the
Company in connection therewith, and will use its best efforts to comply
with all laws and regulations which, in the opinion of counsel for the
Company, shall be applicable thereto.
(b) Withholding. The grant of Options hereunder and the issuance of
Shares of Common Stock pursuant to the exercise of such Options are
conditioned upon the Company's reservation of the right to withhold, in
accordance with any applicable law, from any compensation payable to the
Optionee any taxes required to be withheld by federal, state or local law
as a result of the grant or exercise of such Option or the sale of the
Shares issued upon exercise of the Option.
18. SHAREHOLDER APPROVAL OF PLAN A AND PLAN B. Continuance of Plan A and
Plan B and the effectiveness of any Option granted under such Plan shall be
subject to approval by the holders of the outstanding voting stock of the
Company in accordance with applicable law within twelve (12) months before or
after the date Plan A and Plan B is adopted by the Board. Any Options granted
under Plan A and Plan B prior to obtaining such shareholder approval shall be
granted upon the conditions that the Options so granted: (i) shall not be
exercisable prior to such approval and (ii) shall become null and void ab initio
if such shareholder approval is not obtained.
19. LIABILITY OF COMPANY. The Company, its Parent or any Subsidiary which
is in existence or hereafter comes into existence, will not be liable to an
Optionee granted an Incentive Option or other person if it is determined for any
reason by the Internal Revenue Service or any court having jurisdiction that any
Incentive Options granted hereunder are not Incentive Stock Options.
20. NOTICES. Any notice to be given to the Company pursuant to the
provisions of the Plans shall be addressed to the Company in care of its
Secretary at its principal office, and any notice to be given to an Optionee
shall be delivered personally or addressed to such Optionee at the address given
beneath such Optionee's signature on such Optionee's Stock Option Agreement, or
at such other address as such Employee (or any transferee) upon the transfer of
the Optioned Stock may hereafter designate in writing to the Company. Any such
notice shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, registered or certified, and deposited, postage
and registry or certification fee prepaid, in a post office or branch post
office regularly maintained by the United States Postal Service. It shall be the
obligation of each Optionee and each transferee holding Shares purchased upon
exercise of an Option to provide the Secretary of the Company, by letter mailed
as provided hereinabove, with written notice of such person's direct mailing
address.
<PAGE>
21. NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is purely voluntary on the
part of the Company, and the continuance of the Plan shall not be deemed to
constitute a contract between the Company and any Employee, or to be
consideration for or a condition of the employment of any Employee. Nothing
contained in this Plan shall be deemed to give any Employee the right to be
retained in the employ of the Company, its Parent, Subsidiary or a successor
corporation, or to interfere with the right of the Company or any such
corporations to discharge or retire any Employee thereof at any time. No
Employee shall have any right to or interest in Options authorized hereunder
prior to the grant of such Option to such employee, and upon such grant he or
she shall have only such rights and interests as are expressly provided herein,
subject, however, to all applicable provisions of the Company's Certificate of
Incorporation, as the same may be amended from time to time.
22. LEGENDS ON CERTIFICATES.
(a) Federal Law. Unless an appropriate registration statement is filed
pursuant to the Federal Securities Act of 1933, as amended, with respect to
the Options and Shares issuable under the Plans, each certificate
representing such Options and Shares shall be endorsed on its face with a
legend substantially as follows:
"THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE
OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED."
(b) State Legend. If required by applicable state authorities each
certificate representing the Options and Shares issuable under the Plans
shall be endorsed on its face with any legends required by such
authorization.
(c) Additional Legends. Each certificate representing the Options and
Shares issuable under the Plans shall also contain legends as are set forth
in any Stock Purchase Agreement or other agreement the execution of which
is a condition to the exercise of an Option under this Plan. In addition,
each Option Agreement shall be endorsed with a legend substantially as
follows:
"THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAYBE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE
AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY, TO BE ENTERED INTO BETWEEN THE HOLDER OF THIS OPTION AND THE
COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION."
23. AVAILABILITY OF PLAN. A copy of the Plans shall be delivered to the
Secretary of the Company and shall be shown by him to any eligible person making
reasonable inquiry concerning it.
24. INVALID PROVISIONS. In the event that any provision of the Plans is
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein as invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision was not contained herein.
25. APPLICABLE LAW. These Plans shall be governed and construed in
accordance with the laws of the State of Florida applicable to contracts
executed, and to be fully performed, in Florida.
IN WITNESS WHEREOF, pursuant to the due authorization and adoption of these
Plans by the Board on , 199__, the Company has caused these Plans to be duly
executed by its duly authorized officers, effective as of , 199__.
San Marino Minerals, Inc.
a Florida corporation
-------------------------
By:
---------------------
Title:
------------------
<PAGE>
EXHIBIT "A"
PLAN A
THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS
OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO
BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION.
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made as of the ___ day of _______, 199__, by and between San
Marino Minerals, Inc., a Florida corporation (hereinafter called "Company") and
____________ (hereinafter called "Optionee").
RECITALS
A. The Board of Directors of the Company has adopted the Company's 1998
Incentive Stock Option Plan (the "Plan") for the purpose of attracting and
retaining the services of selected key employees (including officers and
employee directors), who contribute to the financial success of the Company or
its parent or subsidiary corporations.
B. Optionee is a key member of the Company or its parent or subsidiary
corporations, and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Company's grant of a
stock option to the Optionee.
C. The granted option is intended to be an incentive stock option
("Incentive Option") within the meaning of Section 422 of the Internal Revenue
Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions set forth
in this Agreement, there is hereby granted to Optionee, as of the date of this
Agreement (the "Grant Date"), a stock option to purchase up to __________ shares
of the Company's Common Stock (the "Optioned Shares") from time to time during
the option term at the option price of $_____ per share.
2. PLAN. The options granted hereunder are in all instances subject to the
terms and conditions of the Plan. In the event of any conflict between this
Agreement and the Plan, the provisions of the Plan shall control. Optionee
acknowledges receipt of a copy of the Plan and hereby accepts this option
subject to all of the terms and conditions of the Plan. Optionee agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board upon any questions arising under the Plan.
<PAGE>
3. OPTION TERM. This option shall have a maximum term of ___ (__) years
measured from the Grant Date and shall accordingly expire at the close of
business on ______, _____ (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 7, 9(a) or 20.
4. OPTION NONTRANSFERABLE; EXCEPTION. This option shall be neither
transferable nor assignable by Optionee, either voluntarily or involuntarily,
other than by will or by the laws of descent and distribution and may be
exercised, during Optionee's lifetime, only by Optionee.
5. CONDITION PRECEDENT TO EXERCISE. This option may not be exercised in
whole or in part at any time prior to the time the Company has satisfied the
following condition precedent: ______________. In the event the foregoing
condition precedent has not been satisfied prior to the Expiration Date or prior
to this option's earlier termination in accordance with Paragraph 7, 9(a) or 20,
then this option shall terminate and cease to be outstanding.
6. DATES OF EXERCISE. This option may not be exercised in whole or in part
at any time prior to the time it is approved by the Company's shareholders in
accordance with Paragraph 20. Provided such shareholder approval is obtained and
the condition precedent to exercise set forth in Paragraph 5 has been satisfied,
this option shall become exercisable for 100% of the Optioned Shares one (1)
year from the Grant Date, provided that in no event may options for more than
One Hundred Thousand Dollars ($100,000) of Optioned Shares, calculated at the
exercise price, become exercisable for the first time in any calendar year. Once
exercisable, options shall remain so exercisable until the expiration or sooner
termination of the option term under Paragraph 7 or Paragraph 9(a) of this
Agreement. In no event, however, shall this option be exercisable for any
fractional shares.
7. ACCELERATED TERMINATION OF OPTION TERM. The option term specified in
Paragraph 3 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should one of the following provisions become
applicable:
(i) Except as otherwise provided in subparagraphs (ii) and (iii)
below, should Optionee cease to be an Employee of the Company for any
reason at any time during the option term, any option of the Optionee,
whether vested or non-vested, and if issued under Plan A, shall terminate
as of the date of termination of employment.
(ii) Should Optionee die while this option is outstanding, then the
executors or administrators of Optionee's estate or Optionee's heirs or
legatees (as the case may be) shall have the right to exercise this option
for the number of shares (if any) for which the option is exercisable on
the date of the optionee's death. Such right shall lapse and this option
shall cease to be exercisable upon the earlier of (i) six (6) months from
the date of the optionee's death or (ii) the Expiration Date.
(iii) Should Optionee become permanently disabled and cease by reason
thereof to be an Employee of the Company at any time during the option
term, then Optionee shall have a period of six (6) months (commencing with
the date of such cessation of Employee status) during which to exercise
this option; provided, however, that in no event shall this option be
exercisable at any time after the Expiration Date. Optionee shall be deemed
to be permanently disabled if Optionee is, by reason of any medically
determinable physical or mental impairment expected to result in death or
to be of continuous duration of not less than twelve (12) months, unable to
perform his/her usual duties for the Company or its Parent or Subsidiary
corporations. Upon the expiration of the limited period of exercisability
or (if earlier) upon the Expiration Date, this option shall terminate and
cease to be outstanding.
(iv) For purposes of this Paragraph 7 and for all other purposes under
this Agreement, Optionee shall be deemed to be an Employee of the Company
and to continue in the Company's employ for so long as Optionee remains an
Employee of the Company or one or more of its parent or subsidiary
corporations as such terms are defined in the Plan.
8. ADJUSTMENT IN OPTION SHARES.
(a) In the event any change is made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, combination of
shares, or other change affecting the outstanding Common Stock as a class
without receipt of consideration (as set forth in the Plan), then
appropriate adjustments will be made to (i) the total number of Optioned
Shares subject to this option and (h) the option price payable per share in
order to reflect such change and thereby preclude a dilution or enlargement
of benefits hereunder.
<PAGE>
(b) If the Company is the surviving entity in any merger or other
business combination, then this option, if outstanding under the Plan
immediately after such merger or other business combination shall be
appropriately adjusted to apply and pertain to the number and class of
securities to which Optionee immediately prior to such merger of other
business combination would have been entitled to receive in the
consummation of such merger or other business combination.
9. SPECIAL TERMINATION OF OPTION.
(a) In the event of one or more of the following transactions (a
"Corporate Transaction"):
(i) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company; or
(iii) any other corporate reorganization or business combination
in which fifty percent (50%) or more of the Company's outstanding
voting stock is transferred, or exchanged through merger, to different
holders in a single transaction or a series of related transactions;
then this option shall terminate upon the consummation of such Corporate
Transaction and cease to be exercisable, unless it is expressly assumed by
the successor corporation or parent thereof. The Company shall provide
Optionee with at least thirty (30) days prior written notice of the
specified date for the Corporate Transaction. The Company can give no
assurance that the options shall be assumed by the successor corporation or
its parent company and it may occur that some options outstanding under the
Plan will be assumed while these options are terminated.
(b) In the event of a Corporate Transaction, the Company may, at its
option, accelerate the vesting schedule contained in Section 6 hereof, but
shall have no obligation to do so. The Company shall have the right to
accelerate other options outstanding under the Plan or any other plan, even
if it does not accelerate the options of Optionee hereunder.
(c) This Agreement shall not in any way affect the right of the
Company to make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
10. PRIVILEGE OF STOCK OWNERSHIP. The holder of this option shall not have
any of the rights of a shareholder with respect to the Optioned Shares until
such individual shall have exercised the option and paid the option price in
accordance with this Agreement.
11. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any part
of the Optioned Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
(i) Execute and deliver to the Secretary of the Company a stock
purchase agreement in substantially the form of Exhibit D to this
Agreement (the "Purchase Agreement");
(ii) Pay the aggregate option price for the purchased shares in
cash, unless another form of consideration is permitted as described
in Exhibit C, if any, attached hereto or by the Board at the time of
exercise.
<PAGE>
(b) This option shall be deemed to have been exercised with respect to
the number of Optioned Shares specified in the Purchase Agreement at such
time as the executed Purchase Agreement for such shares shall have been
delivered to the Company and all other conditions of this Section have been
fulfilled. Payment of the option price shall immediately become due and
shall accompany the Purchase Agreement. As soon thereafter as practical,
the Company shall mail or deliver to Optionee or to the other person or
persons exercising this option a certificate or certificates representing
the shares so purchased and paid for.
12. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of Optioned Shares
upon such exercise shall be subject to compliance by the Company and
Optionee with all applicable requirements of law relating thereto and with
all applicable regulations of any stock exchange on which shares of the
Company's Common Stock may be listed at the time of such exercise and
issuance.
(b) In connection with the exercise of this option, Optionee shall
execute and deliver to the Company such representations in writing as may
be requested by the Company in order for it to comply with the applicable
requirements of federal and state securities laws.
13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraph 4 or 9(a), the provisions of this Agreement shall insure to the
benefit of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Company.
14. LIABILITY OF COMPANY.
(a) If the Optioned Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without
shareholder approval be issued under the Plan, then this option shall be
void with respect to such excess shares unless shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of
Section 18 of the Plan.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option
without the imposition of requirements unacceptable to the Company in its
reasonable discretion shall relieve the Company of any liability with
respect to the non-issuance or sale of the Common Stock as to which such
approval shall not have been obtained. The Company, however, shall use its
best efforts to obtain all such approvals.
(c) Neither the Company nor any Parent, Subsidiary or successor
corporation will have any liability to Optionee or any other person if it
is determined for any reason that any options granted hereunder are not
Incentive Stock Options.
15. NO EMPLOYMENT CONTRACT. Except to the extent the terms of any written
employment contract between the Company and Optionee may expressly provide
otherwise, the Company (or any parent or subsidiary corporation of the Company
employing Optionee) shall be under no obligation to continue the employment of
Optionee for any period of specific duration and may terminate Optionee's status
as an Employee at any time, with or without cause.
16. NOTICES. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Company in care of its Secretary at its corporate offices. Any notice required
to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated below Optionee's signature line on this
Agreement. All notices shall be deemed to have been given or delivered upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and properly
addressed to the party to be notified.
17. LOANS OR GUARANTEES. The Company may, in its absolute discretion and
without any obligation to do so, assist Optionee in the exercise of this option
by (i) authorizing the extension of a loan to Optionee from the Company, (ii)
permitting Optionee to pay the option price for the purchased Common Stock in
installments over a period of years, or (iii) authorizing a guarantee by the
Company of a third party loan to Optionee. The terms of any loan, installment
method of payment or guarantee (including the interest rate, the Collateral
requirements and terms of repayment) shall be established by the Company in its
sole discretion.
<PAGE>
18. CONSTRUCTION. This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the Plan. All decisions of the Company with respect to any question or issue
arising under the Plan or this Agreement shall be conclusive and binding on all
persons having an interest in this option.
19. GOVERNING LAW. The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida.
20. SHAREHOLDER APPROVAL. The grant of this option is subject to approval
of the Plan by the Company's shareholders within twelve (12) months after the
adoption of the Plan by the Board of Directors, and this option may not be
exercised in whole or in part until such shareholder approval is obtained. In
the event that such shareholder approval is not obtained, then this option shall
thereupon terminate and Optionee shall have no further rights to acquire any
Optioned Shares hereunder.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
duplicate on its behalf by its duly authorized officer and Optionee has also
executed this Agreement in duplicate, all as of the day and year indicated
above.
San Marino Minerals, Inc.
a Florida corporation
-------------------------
By:
---------------------
Title:
------------------
- - ------------------------------------
Optionee
Address:
---------------------------
---------------------------
<PAGE>
EXHIBIT "B"
PLAN A
Other Forms of Acceptable Consideration
[If no forms are listed hereon, cash shall be the only
acceptable form of consideration for the exercise of the
options.]
-----------------
<PAGE>
EXHIBIT "C"
PLAN B
THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS
OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION TATEMENT RELATING
THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO
BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION.
NON-STATUTORY STOCK OPTION AGREEMENT
AGREEMENT made as of the ____ day of ______, 199__, by and between San
Marino Minerals, Inc., a Florida corporation (hereinafter called "Company"), and
_______________ (hereinafter called "Optionee").
RECITALS
A. The Board of Directors of the Company has adopted the Company's 1998
Non-Statutory Stock Option Plan (the "Plan") for the purpose of attracting and
retaining the services of selected key employees (including officers and
employee directors) and others (collectively, "Eligible Persons"), who
contribute to the financial success of the Company or its parent or subsidiary
corporations.
B. Optionee is an Eligible Person and this Agreement is executed pursuant
to, and is intended to carry out the purposes of, the Plan in connection with
the Company's grant of a stock option to Optionee.
C. The granted option is not intended to be an incentive stock option
("Incentive Option") within the meaning of Section 422 of the Internal Revenue
Code, but is rather a non-statutory option.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions set forth
in this Agreement, there is hereby granted to Optionee, as of the date of this
Agreement (the "Grant Date"), a stock option to purchase up to _________ shares
of the Company's Common Stock (the "Optioned Shares") from time to time during
the option term at the option price of $____ per share. ----------
2. PLAN. The options granted hereunder are in all instances subject to the
terms and conditions of the Plan. In the event of any conflict between this
Agreement and the Plan, the provisions of the Plan shall control. Optionee
acknowledges receipt of a copy of the Plan and hereby accepts this option
subject to all of the terms and conditions of the Plan. Optionee agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board upon any questions arising under the Plan.
<PAGE>
3. OPTION TERM. This option shall have a maximum term of years measured
from the Grant Date and shall accordingly expire at the close of business on
_____ ____ , 199__ (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 6 or 8(a).
4. OPTION NONTRANSFERABLE; EXCEPTION. This option shall be neither
transferable nor assignable by Optionee, either voluntarily or involuntarily,
other than by will or by the laws of descent and distribution and may be
exercised, during Optionee's lifetime, only by Optionee.
5. DATES OF EXERCISE. This option shall be exercisable as follows:
_________. Once exercisable, options shall remain so exercisable until the
expiration or sooner termination of the option term under Paragraph 6 or
Paragraph 8(a) of this Agreement. In no event, however, shall this option be
exercisable for any fractional shares.
6. ACCELERATED TERMINATION OF OPTION TERM. The option term specified in
Paragraph 3 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should one of the following provisions become
applicable:
(i) (i) Except as otherwise provided in subparagraphs (ii) and (iii)
below, should Optionee cease to be an Employee of the Company for any
reason at any time during the option term, any option of the Optionee,
whether vested or non-vested, and if issued under Plan B, shall terminate
as of the date of termination of employment.
(ii) Should Optionee die while this option is outstanding, then the
executors or administrators of Optionee's estate or Optionee's heirs or
legatees (as the case may be) shall have the right to exercise this option
for the number of shares (if any) for which the option is exercisable on
the date of the optionee's death. Such right shall lapse and this option
shall cease to be exercisable upon the earlier of (i) six (6) months from
the date of the optionee's death or (ii) the Expiration Date.
(iii) Should Optionee become permanently disabled and cease by reason
thereof to be an Employee of the Company at any time during the option
term, then Optionee shall have a period of six (6) months (commencing with
the date of such cessation of Employee status) during which to exercise
this option; provided, however, that in no event shall this option be
exercisable at any time after the Expiration Date. Optionee shall be deemed
to be permanently disabled if Optionee is, by reason of any medically
determinable physical or mental impairment expected to result in death or
to be of continuous duration of not less than twelve (12) months, unable to
perform his/her usual duties for the Company or its Parent or Subsidiary
corporations. Upon the expiration of the limited period of exercisability
or (if earlier) upon the Expiration Date, this option shall terminate and
cease to be outstanding.
(iv) For purposes of this Paragraph 6 and for all other purposes under
this Agreement, if Optionee is an Employee, Optionee shall be deemed to be
an Employee of the Company and to continue in the Company's employ for so
long as Optionee remains an Employee of the Company or one or more of its
parent or subsidiary corporations as such terms are defined in the Plan.
For purposes of this Paragraph 6 and for all other purposes under this
Agreement, if Optionee is not an Employee, but is eligible because Optionee
is a director, consultant or contractor of Company or a parent or
subsidiary corporation, Optionee shall be deemed to be an Eligible Person
for so long as Optionee remains a director, consultant or contractor of the
Company or one or more of its parent or subsidiary corporations as such
terms are defined in the Plan.
7. ADJUSTMENT IN OPTION SHARES.
(a) In the event any change is made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, combination of
shares, or other change affecting the outstanding Common Stock as a class
without receipt of consideration (as set forth in the Plan), then
appropriate adjustments will be made to (i) the total number of Optioned
Shares subject to this option and (ii) the option price payable per share
in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
<PAGE>
(b) If the Company is the surviving entity in any merger or other
business combination, then this option, if outstanding under the Plan
immediately after such merger or other business combination shall be
appropriately adjusted to apply and pertain to the number and class of
securities to which Optionee immediately prior to such merger or other
business combination would have been entitled to receive in the
consummation of such merger or other business combination.
8. SPECIAL TERMINATION OF OPTION.
(a) In the event of one or more of the following transactions (a
"Corporate Transaction"):
(i) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company; or
(iii) any other corporate reorganization or business combination
in which fifty percent (50%) or more of the Company's outstanding
voting stock is transferred, or exchanged through merger, to different
holders in a single transaction or a series of related transactions;
then this option shall terminate upon the consummation of such Corporate
Transaction and cease to be exercisable, unless it is expressly assumed by
the successor corporation or parent thereof. The Company shall provide
Optionee with at least thirty (30) days prior written notice of the
specified date for the Corporate Transaction. The Company can give no
assurance that the options shall be assumed by the successor corporation or
its parent company and it may occur that some options outstanding under the
Plan will be assumed while these options are terminated.
(b) In the event of a Corporate Transaction, the Company may, at its
option, accelerate the vesting schedule contained in Section 5 hereof, but
shall have no obligation to do so. The Company shall have the right to
accelerate other options outstanding under the Plan or any other plan, even
if it does not accelerate the options of Optionee hereunder.
(c) This Agreement shall not in any way affect the right of the
Company to make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
9. PRIVILEGE OF STOCK OWNERSHIP. The holder of this option shall not have
any of the rights of a shareholder with respect to the Optioned Shares until
such individual shall have exercised the option and paid the option price in
accordance with this Agreement.
10. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any part
of the Optioned Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
(i) Execute and deliver to the Secretary of the Company a stock
purchase agreement in substantially the form of Exhibit "E" to this
Agreement (the "Stock Purchase Agreement");
(ii) Pay the aggregate option price for the purchased shares in
cash, unless another form of consideration is permitted as described
in Exhibit D, if any, attached hereto or by the Board at the time of
exercise.
(b) This option shall be deemed to have been exercised with respect to
the number of Optioned Shares specified in the Purchase Agreement at such
time as the executed Purchase Agreement for such shares shall have been
delivered to the Company and all other conditions of this Section have been
fulfilled. Payment of the option price shall immediately become due and
shall accompany the Purchase Agreement. As soon thereafter as practical,
the Company shall mail or deliver to Optionee or to the other person or
persons exercising this option a certificate or certificates representing
the shares so purchased and paid for.
<PAGE>
11. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of Optioned Shares
upon such exercise shall be subject to compliance by the Company and
Optionee with all applicable requirements of law relating thereto and with
all applicable regulations of any stock exchange on which shares of the
Company's Common Stock may be listed at the time of such exercise and
issuance.
(b) In connection with the exercise of this option, Optionee shall
execute and deliver to the Company such representations in writing as may
be requested by the Company in order for it to comply with the applicable
requirements of federal and state securities laws.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraph 4 or 8(a), the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Company.
13. LIABILITY OF COMPANY.
(a) If the Optioned Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without
shareholder approval be issued under the Plan, then this option shall be
void with respect to such excess shares unless shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of
Section 18 of the Plan.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option
without the imposition of requirements unacceptable to the Company in its
reasonable discretion shall relieve the Company of any liability with
respect to the nonissuance or sale of the Common Stock as to which such
approval shall not have been obtained. The Company, however, shall use its
best efforts to obtain all such approvals.
14. NO EMPLOYMENT CONTRACT. Except to the extent the terms of any written
employment contract between the Company and Optionee may expressly provide
otherwise, the Company (or any parent or subsidiary corporation of the Company
employing Optionee) shall be under no obligation to continue the employment of
Optionee for any period of specific duration and may terminate Optionee's status
as an Employee at any time, with or without cause.
15. NOTICES. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Company in care of its Secretary at its corporate offices. Any notice required
to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated below Optionee's signature line on this
Agreement. All notices shall be deemed to have been given or delivered upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and properly
addressed to the party to be notified.
16. WITHHOLDING. Optionee acknowledges that, upon any exercise of this
option, the Company shall have the right to require Optionee topay to the
Company an amount equal to the amount the Company is required to withhold as a
result of such exercise for federal and state income tax purposes.
17. LOANS OR GUARANTEES. The Company may, in its absolute discretion and
without any obligation to do so, assist Optionee in the exercise of this option
by (i) authorizing the extension of a loan to Optionee from the Company, (ii)
permitting Optionee to pay the option price for the purchased Common Stock in
installments over a period of years, or (iii) authorizing a guarantee by the
Company of a third party loan to Optionee. The terms of any loan, installment
method of payment or guarantee (including the interest rate, the Collateral
requirements and terms of repayment) shall be established by the Company in its
sole discretion.
18. CONSTRUCTION. This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the express terms and provisions of the Plan. All decisions of the Company
with respect to any question or issue arising under the Plan or this Agreement
shall be conclusive and binding on all persons having an interest in this
option.
<PAGE>
19. GOVERNING LAW. The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida.
20. REPURCHASE R1GHTS. OPTIONEE HEREBY AGREES THAT ALL OPTIONED SHARES
ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF
THE COMPANY AND ITS ASSIGNS TO REPURCHASE SUCH SHARES IN ACCORDANCE WITH THE
TERMS AND CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT,
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
duplicate on its behalf by its duly authorized officer and Optionee has also
executed this Agreement in duplicate, all as of the day and year indicated
above.
San Marino Minerals, Inc.
a Florida corporation
-------------------------
By:
---------------------
Title:
------------------
- - ------------------------------------
Optionee
Address:
---------------------------
---------------------------
<PAGE>
EXHIBIT "D"
PLAN B
Other Forms of Acceptable Consideration
[If no forms are listed hereon, cash shall be the only acceptable form
of consideration for the exercise of the options.]
<PAGE>
EXHIBIT "E"
STOCK PURCHASE AGREEMENT
This Agreement is made as of this ____ day of ______, 199__, by and among
San Marino Minerals, Inc., a Florida corporation ("Corporation"), and ________,
the holder of a stock option under the Corporation's 1998 Stock Option Plan
("Optionee").
1. EXERCISE OF OPTION
1.1 Exercise. Optionee hereby purchases shares of Class A Common Stock
of the Corporation ("Purchased Shares") pursuant to that certain option
("Option") granted Optionee on _______, 199__, under the Corporation's 1998
Stock Option Plan ("Plan") to purchase up to ______ shares of the
Corporation's Common Stock at an option price of $___ per share ("Option
Price").
1.2 Payment. Concurrently with the delivery of this Agreement to the
Secretary of the Corporation, Optionee shall pay the Option Price for the
Purchased Shares in accordance with the provisions of the agreement between
the Corporation and Optionee evidencing the Option ("Option Agreement") and
shall deliver whatever additional documents may be required by the Option
Agreement as a condition for exercise.
2. INVESTMENT REPRESENTATIONS
2.1 Investment Intent. Optionee hereby warrants and represents that
Optionee is acquiring the Purchased Shares for Optionee's own account and
not with a view to their resale or distribution and that Optionee is
prepared to hold the Purchased Shares for an indefinite period and has no
present intention to sell, distribute or grant any participating interests
in the Purchase Shares. Optionee hereby acknowledges the fact that the
Purchased Shares have not been registered under the Securities Act of 1933,
as amended (the "1933 Act"), and that the Corporation is issuing the
Purchased Shares to Optionee in reliance on the representations made by
Optionee herein.
2.2 Restricted Securities. Optionee hereby confirms that Optionee has
been informed that the Purchased Shares may not be resold or transferred
unless the Purchased Shares are first registered under the Federal
securities laws or unless an exemption from such registration is available.
Accordingly, Optionee hereby acknowledges that Optionee is prepared to hold
the Purchased Shares for an indefinite period and that Optionee is aware
that Rule 144 of the Securities and Exchange Commission issued under the
1933 Act is not presently available to exempt the sale of the Purchased
Shares from the registration requirements of the 1933 Act. Should Rule 144
subsequently become available, Optionee is aware that any sale of the
Purchased Shares effected pursuant to the Rule may, depending upon the
status of Optionee as an affiliate" or "non-affiliate" under the Rule, be
made only in limited amounts in accordance with the provisions of the Rule,
and that in no event may any Purchased Shares be sold pursuant to the Rule
until Optionee has held the Purchased Shares for the requisite holding
period following payment in cash of the Option Price for the Purchased
Shares.
2.3 Optionee Knowledge. Optionee represents and warrants that he or
she has a preexisting business or personal relationship with the officers
and directors of the Corporation, that he or she is aware of the business
affairs and financial condition of the Corporation and that he or she has
such knowledge and experience in business and financial matters with
respect to companies in business similar to the Corporation to enable him
or her to evaluate the risks of the prospective investment and to make an
informed investment decision with respect thereto. Optionee further
represents and warrants that the Corporation has made available to Optionee
the opportunity to ask questions and receive answers from the Corporation
concerning the terms and conditions of the issuance of the Purchased Shares
and that he or she could be reasonably assumed to have the capacity to
protect his or her own interests in connection with such investment.
2.4 Speculative Investment. Optionee represents and warrants that he
or she realizes that his or her purchase of the Purchased Shares will be a
speculative investment and that he or she is able, without impairing his or
her financial condition, to hold the Purchased Shares for an indefinite
period of time and to suffer a complete loss of his or her investment.
Optionee represents and warrants that he or she is aware and fully
understands the implications of the restrictions upon transfer imposed by
the Plan and therefore on the Purchased Shares.
2.5 Restrictive Legends. In order to reflect the restrictions on
disposition of the Purchased Shares, the stock certificates for the
Purchased Shares will be endorsed with the following legend:
<PAGE>
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, ASSIGNED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
THEREUNDER OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
3. MISCELLANEOUS PROVISIONS
3.1 Optionee Undertaking. Optionee hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation
may in its judgment deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions imposed on either the
Optionee or the Purchased Shares pursuant to the express provisions of this
Agreement.
3.2 Agreement Is Entire Contract. This Agreement constitutes the
entire contract between the parties hereto with regard to the subject
matter hereof. This Agreement is made pursuant to the provisions of the
Plan and shall in all respects be construed in conformity with the express
terms and provisions of the Plan.
3.3 Governing Law. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
3.4 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
3.5 Successors and Assigns. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and the Optionee and the Optionee's legal
representatives, heirs, legatees, distributees, assigns and transfer by
operation of law, whether or not any such person shall have become a party
to this Agreement and have agreed in writing to join herein and be bound by
the terms and conditions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first indicated above.
San Marino Minerals, Inc.
a Florida corporation
-------------------------
By:
---------------------
Title:
------------------
- - ------------------------------------
Optionee
Address:
---------------------------
---------------------------
<PAGE>
1999 INCENTIVE STOCK OPTION PLAN AND 1999
NONSTATUTORY STOCK OPTION PLAN
1. NAMES AND PURPOSES OF THE PLANS. This Plan document is intended to
implement and govern two separate Stock Option Plans of Centaur Technologies,
Inc., a Nevada corporation (the "Company"): the 1999 Incentive Stock Option Plan
("Plan A") and the 1999 Nonstatutory Stock Option Plan ("Plan B") (collectively
the "Plans"). Plan A provides for the granting of options that are intended to
qualify as incentive stock options ("Incentive Stock Options") within the
meaning of Section 422(b) of the Internal Revenue Code, as amended. Plan B
provides for the granting of options that are not intended to so qualify. Unless
specified otherwise, all the provisions of this Plan document relate equally to
both Plan A and Plan B, which Plans are condensed into one Plan document solely
for purposes of administrative convenience and are not intended to constitute
tandem plans. The purposes of the Plans are (a) to attract and retain the best
available people for positions of substantial responsibility, and (b) to provide
additional incentive to the Employees of the Company (and its future parents and
subsidiaries, if any) and to promote the success of the Company's business.
2. DEFINITIONS. For purposes of the Plans, the following terms will have the
respective meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company;
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended;
(c) "Common Stock" shall mean the Class A common stock of the Company;
(d) "Company" shall mean Centaur Technologies, Inc., a Nevada
corporation;
(e) "Committee" shall mean the committee appointed by the Board in
accordance with Paragraph 3(a) of this Plan document, if one is appointed;
(f) "Employee" shall mean any person, including an officer or director,
who is an employee (within the meaning of Section 422 of the Code) of the
Company, any parent, any subsidiary or any successors to any of the foregoing;
(g) "Incentive Option" shall mean an incentive stock option as defined
in Section 422(b) of the Code;
(h) "Non-Statutory Option" shall mean an option which does not qualify
as an Incentive Option;
(i) "Option" shall mean a stock option granted pursuant to the Plan,
whether an Incentive Option or a Non-Statutory Option;
(j) "Option Agreement" shall mean an agreement substantially in the
form attached hereto as Exhibit A or the form attached hereto as Exhibit B, or
such other form or forms as the Board (subject to the terms and conditions of
the Plans) may from time to time approve, evidencing an Option;
(k) "Option Grant Date" shall mean the date on which an Option is
granted by the Board;
(1) "Optioned Stock" shall mean the Common Stock subject to an Option
granted pursuant to a Plan;
(m) "Optionee" shall mean an Employee or other Eligible Person who
receives an Option;
(n) "Outstanding Incentive Option" shall mean any Incentive Stock
Option which has not yet been exercised in full or has not yet expired by lapse
of time;
(o) "Parent" shall mean a "parent corporation" as defined in Section
424(e) of the Code;
(p) "Plan A" shall mean the 1999 Incentive Stock Option Plan;
(q) "Plan B" shall mean the 1999 Non-Statutory Stock Option Plan;
(r) "Predecessor Corporation" shall mean a corporation which is a party
to a transaction described in Code Section 424(a) (or which would be so
described if a substitution or assumption under such section had been effected)
with the Company, a Parent, a Subsidiary or a predecessor corporation of any
such corporations.
<PAGE>
(s) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 13 of this Plan document;
(t) "Stock Purchase Agreement" shall mean an agreement substantially in
the form attached hereto as Exhibit D or such other form or forms as the Board
(subject to the terms and conditions of this Plan) may from time to time
approve, which is to be executed as a condition of purchasing Optioned Stock
upon exercise of an Option as provided in a Plan; and,
(u) "Subsidiary" shall mean a subsidiary corporation as defined in
Section 424(f) of the Code.
3. ADMINISTRATION OF PLAN.
(a) Procedure. The Plans shall be administered by the Board.
The Board may appoint a Committee consisting of not less than two (2)
members of the Board to administer one or both of the Plans on behalf of the
Board, subject to such terms and conditions as the Board may prescribe. Once
appointed, the Committee shall continue to serve until otherwise directed by the
Board. From time to time, the Board may increase the size of the Committee and
appoint additional members thereof, remove members of the Committee, and
thereafter, directly administer the Plans. Any references herein to the Board
shall refer to the Committee, if one is appointed, to the extent of the
Committee's authority.
(b) Limitations on Members of Board. Members of the Board who are either
eligible for options or have been granted Options may vote on any matters
affecting the administration of the Plans or the grant of any Options pursuant
to the Plans; except that no such member shall act in connection with an Option
to himself or herself, but any such member may be counted in determining the
existence of a quorum at any meeting of the Board during which action is taken
with respect to Options of such member
(c) Powers of the Board. Subject to the provisions of the Plan the Board
shall have the authority, in its discretion, to make all determinations
necessary or advisable for the administration of the Plans, including without
limitation:
(i) to determine, upon review of relevant information, the then fair
market value per share of the Common Stock;
(ii) to determine the exercise price of the Options to be granted,
subject to the provisions of Paragraph 8 of this Plan document;
(iii)to determine the Employees to whom, and the time or times at
which, Options shall be granted, and the number of shares of Optioned Stock
to be represented by each Option;
(iv) to determine whether Options granted hereunder shall be granted
under Plan A as Incentive Options or Plan B as Non-statutory Options;
(v) to prescribe, amend and rescind rules and regulations relating to
the Plans;
(vi) to determine the terms and provisions of each Option granted
under the Plans (which need not be identical) and to modify or amend each
Option (with or without consent of the Optionee, if necessary);
(vii) to accelerate the exercise date of any Option;
(viii) to construe and interpret the Plans, the Option Agreements,
Stock Purchase Agreements and any other agreements provided for hereunder;
and
(ix) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted
by the Board or to take such other actions as may be necessary or advisable
with respect to the Company's rights pursuant to the Option, Stock Purchase
Agreement or other agreement approved hereunder.
<PAGE>
(d) Effect of the Board's or Committee's Decision. All decisions,
determinations and interpretations of the Board or the Committee shall be final
and binding on all Optionees and any other proper holders of any Options granted
under the Plan.
4. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 13 of this
Plan document, the maximum aggregate number of shares which may be optioned
under these Plans is 5,000,000 shares of authorized Common Stock. This
constitutes an absolute cumulative limitation on the total number of shares that
may be optioned under Plan A and Plan B and, therefore, at any particular date
the maximum aggregate number of shares which may be optioned under Plan A is
equal to 5,000,000 minus the number of shares previously optioned under Plan A
and Plan B; and the maximum aggregate number of shares which may be optioned
under Plan B is equal to 5,000,000 minus the number of shares which have been
previously optioned under Plan A or Plan B. All shares to be optioned under
either Plan A or Plan B may be either authorized but unissued shares or shares
held in the treasury. Shares of Common Stock that (a) are repurchased by the
Company after issuance hereunder pursuant to the exercise of an Option or (b)
are not purchased by the Optionee prior to the expiration of the applicable
Option Period (as described hereinbelow) shall again become available to be
covered by Options to be issued hereunder and shall not, as of the effective
date of such repurchase or expiration, be counted as having been previously
optioned for purposes of the above-described maximum number of shares which may
be optioned hereunder.
5. ELIGIBILITY. Options under Plan A may be granted to any Employee who is
designated by the Board in its discretion. NonEmployees, including directors of
the Company or any Parent or Subsidiary, who are not regular employees of the
Company, are not eligible to receive Options under Plan A. Options under Plan B
may be granted to any Employee, any Non-Employee director of Company or any
Parent or Subsidiary, and any consultant or independent contractors who provide
valuable services to the Company (or its Parent or Subsidiary), all as
designated by the Board in its discretion. An Optionee who has been granted an
Option may, if otherwise eligible, be granted an additional Option or Options.
Options may be granted to one or more persons without being granted to other
eligible persons, as the Board may deem fit.
6. TERM OF THE PLAN. Plan A shall become effective immediately upon the earlier
to occur of its adoption by the Board or its approval by vote of a majority of
the outstanding shares of the Company entitled to vote on the adoption of such
Plan. Plan B shall become effective immediately upon its adoption by the Board.
Each Plan shall continue in effect until December 31, 2009 unless sooner
terminated under Sections 15 or 18 of this Plan document. No Option may be
granted under a Plan after its expiration.
7. OPTION PERIOD. Each Option granted pursuant to either Plan shall be evidenced
by an Option Agreement. Each Option shall expire and all rights thereunder shall
end at the expiration of such period (which shall in no event be more than ten
(10) years) after the Option Grant Date as shall be fixed by the Board, subject
in all cases to earlier expiration as provided in Section 11 of this Plan
document. Notwithstanding the foregoing, the term of each Incentive Option
granted to an Employee who, at the time the Incentive Option is granted, owns
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Parent or Subsidiary (determined
as required by the Code as applied to Incentive Options) shall not be more than
five (5) years from the Option Grant Date.
8. OPTION PRICE AND CONSIDERATION.
(a) Price. The per share Option price for the Shares to be issued
pursuant to an Option granted under either Plan shall be such price as is
determined by the Board in its sole discretion. Notwithstanding the foregoing,
with respect to Incentive Options granted under Plan A: (i) such price shall in
no event be less than one hundred percent (100%) of the fair market value per
Share of the Company's Common Stock on the Option Grant Date, as determined by
the Board; and (ii) in the case of an Incentive Option granted to an Employee
who, at the time the Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Parent, Subsidiary or Predecessor Corporation (determined as
required by the Code as applied to Incentive Options), the per share Option
price shall be at least one hundred ten percent (110%) of the fair market value
as of the Option Grant Date, as determined by the Board. The fair market value
shall be determined by the Board in its sole discretion, exercised in good
faith; provided, however, that where there is a public market for the Common
Stock, the fair market value per share shall be the mean of the reported bid and
asked price for the Common Stock on the date of the grant, or, in the event the
Common Stock is listed on a stock exchange, the fair market value per share
shall be the closing price on the exchange as of the date of grant of the
Option.
<PAGE>
(b) Form of Consideration. The form of consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Board and may consist of cash, promissory notes, or
the surrender of shares of Common Stock having a fair market value on the date
of surrender equal to the purchase price of the Shares as to which said Option
shall be exercised, a combination thereof, or such other consideration and
method of payment for the issuance of Shares as is permitted under applicable
law.
(c) Promissory Notes. If the consideration for the exercise of an
Option is a promissory note, such note shall be a full recourse promissory note
executed by the Optionee. If the option is an Incentive Option under Plan A,
such note shall bear interest at a per annum rate which is not less than the
greater of (i) the applicable "test rate" described in Treasury Regs. Section
1.4831(d) in effect on the date of exercise or (ii) a fair market interest rate,
as determined by the Board in its good faith discretion. If a promissory note is
given as consideration, the Company may retain the Shares purchased upon
exercise of the Option in escrow as security for payment of the promissory note.
(d) Surrendered Common Stock. If the consideration for the exercise of
an Option is the surrender of previously acquired and owned shares of common
stock of the Company, the Optionee will be required to make representations and
warranties satisfactory to the Company regarding the Optionee's title to the
shares used to effect the purchase, including without limitation,
representations and warranties that the Optionee has good and marketable title
to such shares free and clear of any and all liens, encumbrances, charges,
equities, claims, security interests, options or restrictions and has full power
to deliver such shares without obtaining the consent or approval of any person
or governmental authority other than those which have already given consent or
approval in a form satisfactory to the Company. The value of the shares used to
effect the purchase shall be the fair market value of those shares as determined
by the Board in its sole discretion, exercised in good faith.
9. LIMIT ON VALUE OF OPTIONED STOCK ISSUED UNDER PLAN A. The aggregate fair
market value (determined as of the Option Grant Date of each Option) of the
Shares with respect to which Incentive Options are exercisable for the first
time by the Optionee during any calendar year under Plan A and all other
incentive stock option plans of the Company, any Parent or Subsidiary, or any
Predecessor Corporation of any such corporation shall not exceed One Hundred
Thousand Dollars ($100,000.00), as determined pursuant to Section 422(d) of the
Code.
10. EXERCISE OF OPTION.
(a) General Terms. Any Option granted hereunder shall be exercisable at
such times and under such conditions as may be determined by the Board which
conditions may include performance criteria with respect to the Company and/or
the Optionee or provisions for vesting over a period of time conditioned upon
continued employment and shall include the contemporaneous execution of a Stock
Purchase Agreement in a form approved by the Board and as shall be permissible
under the terms of the Plan. In all events, in order to exercise an Option
hereunder the Optionee shall execute a Stock Purchase Agreement in a form
approved by the Board and shall deliver the required (or permitted) exercise
consideration to the Company. As a condition to the exercise of an Option, the
Board may require the Optionee pursuant to the Option Agreement to agree to
restrictions on the sale or other transfer of ownership of the Common Stock
acquired by an Optionee or to sell such Shares to the Company upon termination
of employment.
(b) Partial Exercise. An Option may be exercised in accordance with the
provisions of either Plan as to all or any portion of the Shares then
exercisable under an Option, from time to time during the term of the Option. An
Option may not be exercised for a fraction of a Share.
(c) Time of Exercise. An Option shall be deemed to be exercised when the
Company has received at its principal business office: (i) written notice of
such exercise in accordance with the terms of the Option Agreement and given by
the person entitled to exercise the Option; (ii) full payment for the Shares
with respect to which the Option is exercised; (iii) the executed Stock Purchase
Agreement if required; and (iv) any other representations or agreements required
by the terms of this Plan or the Option Agreement. Full payment may consist of
such consideration as is authorized by the Board as provided hereunder.
<PAGE>
(d) No Rights as Shareholder Until Exercise. Until this Option is properly
exercised hereunder and the Company receives full payment for the Shares with
respect to which the Option is exercised, no right to receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Option is properly exercised and payment in full is
received, except as provided in Section 13 of this Plan document.
(e) Issuance of Share Certificates. As soon as practicable after any proper
exercise of an Option in accordance with the provisions of this Plan document
and payment in full for the exercised Shares, the Company shall, without
transfer or issue tax to the Optionee, deliver to the Optionee at the principal
business office of the Company, or such other place as shall be mutually
acceptable, a certificate or certificates representing the Shares of Common
Stock as to which the Option has been exercised. The time of issuance and
delivery of the certificates) representing the Shares of Common Stock may be
postponed by the Company for such period as may be required for it, with
reasonable diligence, to comply with any applicable listing requirements of any
national or regional securities exchange and any law or regulation applicable to
the issuance and delivery of such Shares.
(f) Reduction of Shares Upon Exercise. Exercise of an Option in any manner
shall result in a decrease in the number of Shares which thereafter may be
available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.
11. TERMINATION OF EMPLOYMENT.
(a) General. If an Optionee ceases to be an Employee for any reason then,
except as provided in Paragraph 11(a) or 11(b) hereof, any Option of the
Optionee, whether vested or non-vested, and if issued under Plan A or Plan B,
shall terminate as of the date of termination of employment.
(b) Death or Disability. If Optionee dies or becomes disabled (within the
meaning of Code Section 422 and the rules and regulations thereunder) then,
within the earlier of thirty (30) days (or such other period of time not
exceeding six (6) months as set forth in the Option Agreement) following the
date of such death or disability and the time the Option expires by its terms,
the Optionee or such person or persons to whm the Optionee's rights under the
Option shall pass by the Optionee's will or by the laws of descent and
distribution, may exercise the Option to the extent it was vested and
exercisable on the date of death or disability.
12. NON-TRANSFERABILITY OF OPTIONS. The Options and any rights and privileges
granted under any Option Agreement are not transferable by the Optionee, either
voluntarily or by operation of law, otherwise than by will and the laws of
descent and distribution and shall be exercisable during Optionee's lifetime
only by Optionee.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) Reorganizations, Recapitalization, Etc. If the outstanding shares of
Common Stock of the Company are increased, decreased, changed into or exchanged
for a different number or kind of shares or securities of the Company through
reorganization, recapitalization, reclassification, stock dividend (but only on
Common Stock), stock split, reverse stock split or other similar transaction,
or, if any other increase or decrease occurs in the number of Shares of Common
Stock of the Company without the receipt of consideration by the Company, then
an appropriate and proportional adjustment shall be made in (i) the number and
kind of shares of stock covered by each outstanding Option, (ii) the number and
kind of shares of stock which have been authorized for issuance under the Plan
but as to which no Options have yet been granted (or which have been returned to
the Plan upon cancellation of an Option), and (iii) the exercise price per share
of stock covered by each such outstanding Option. The granting of stock options
or bonuses to Employees of the Company and the conversion of any convertible
securities of the Company shall not be deemed to have been "effected without the
receipt of consideration." Notwithstanding the foregoing, no adjustment need be
made under this paragraph if, upon the advice of counsel, the Board determines
that such adjustment may result in federal taxable income to the holders of
Options or Common Stock or other classes of the Company's securities.
<PAGE>
(b) Dissolution, Liquidation, Etc. Upon the dissolution or liquidation of
the Company, or upon a reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the Company is not the
surviving corporation, or upon a sale (or exchange through merger) of
substantially all the property or more than fifty percent (50%) of the then
outstanding stock of the Company to another corporation, the Plan shall
terminate, and any Option theretofore granted hereunder shall terminate.
Notwithstanding the foregoing, the Board may provide in writing in connection
with, or in contemplation of, such transaction for any, all or none of the
following alternatives (separately or in combination): (i) for all or a portion
of the Options theretofore granted to become immediately exercisable; (ii) for
the assumption by the successor corporation of the Options theretofore granted
or the substitution by such corporation for such Options of new options covering
the stock of the successor corporation, or a Parent or Subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices; or (iii)
for the continuance of the Plan by such successor corporation in which event the
Plan and the Options theretofore granted shall continue in the manner and under
the terms so provided.
(c) No Fractional Shares. No fractional shares of the Common Stock shall be
issuable on account of any action under this Paragraph 13, and the aggregate
number of shares into which Shares then covered by an Option, when changed as
the result of such action, shall be reduced to the largest number of whole
Shares resulting from such action. Notwithstanding the foregoing, the Board, in
its sole discretion, may determine to issue scrip certificates, in respect to
any fractional shares, which scrip certificates, in such event, shall be in a
form and have such terms and conditions as the Board in its discretion shall
prescribe.
(d) Binding Effect of Board Determinations. All adjustments under this
Paragraph 13 shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive.
(e) No Other Adjustments. Except as expressly provided herein, no issue by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares of Common Stock
subject to the Plan or any Options.
14. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Amendment and Termination. The Board may at any time and from time to
time suspend or terminate either Plan. The Board may also amend or revise either
Plan from time to time in such respects as the Board may deem advisable, except
that, without approval of the holders of the majority of the outstanding shares
of the Company's Common Stock, no such revision or amendment shall amend Plan A
or Plan B so as to:
(i) Increase the number of Shares subject to Plan A or Plan B other
than in connection with an adjustment under Section 13 of this Plan
document;
(ii) Permit the granting of Incentive Options to anyone other than as
provided in Paragraph 5;
(iii) Remove the administration of Plan A or Plan B from the Board;
(iv) Extend the term of Plan A or Plan B beyond that provided in
Paragraph 6 hereof;
(v) Extend the term of any Incentive Option beyond the maximum term
set forth in Paragraph 7;
(vi) Permit the granting of Incentive Options which would not qualify
as Incentive Stock Options; or (vii) Decrease the per share option price
required with respect to Incentive Options under Paragraph 8(a) hereof.
(b) Effect of Termination. Except as otherwise provided in Section 13,
without the written consent of the Optionee, any such termination of the Plan
shall not affect Options already granted and such Options shall remain in full
force and effect as if the Plan had not been terminated.
<PAGE>
15. CONDITIONS UPON ISSUANCE OF SHARES. Options granted under either Plan are
conditioned upon the Company obtaining any required permit, or exemption from
the qualification or registration provisions of any applicable state securities
law and other appropriate governmental agencies, authorizing the Company to
issue such Options and Optioned Stock upon terms and conditions acceptable to
the Company. Shares shall not be issued with respect to an Option granted under
either Plan unless the exercise of such Option and the issuance and delivery of
such shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance. As a condition to the
exercise of an Option, the Board may require the person exercising such Option
to execute an agreement approved by the Board, and may require the person
exercising such Option to make any representation and warranty to the Company as
may, in the judgment of counsel to the Company, be required under applicable
laws or regulations.
16. RESERVATION OF SHARES. During the term of the Plans, the Company will at all
times reserve and keep available the number of Shares as shall be sufficient to
satisfy the requirements of the Plans. During the term of the Plans, the Company
will use its best efforts to seek to obtain from appropriate regulatory agencies
any requisite authorization in order to issue and sell such number of Shares of
its Common Stock as shall be sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain from any such regulatory agency the
requisite authorization(s) deemed by the Company's counsel to be necessary to
the lawful issuance and sale of any Shares hereunder, or the inability of the
Company to confirm to its satisfaction that any issuance and sale of any Shares
hereunder will meet applicable legal requirements, shall relieve the Company of
any liability in respect to the non-issuance or sale of such Shares as to which
such requisite authority shall not have been obtained.
17. TAXES, FEES, EXPENSES AND WITHHOLDING OF TAXES.
(a) Issue and Transfer Taxes. The Company shall pay all original issue and
transfer taxes (but not income taxes, if any) with respect to the grant of
Options and the issue and transfer of Shares pursuant to the exercise of such
Options, and all other fees and expenses necessarily incurred by the Company in
connection therewith, and will use its best efforts to comply with all laws and
regulations which, in the opinion of counsel for the Company, shall be
applicable thereto.
(b) Withholding. The grant of Options hereunder and the issuance of Shares
of Common Stock pursuant to the exercise of such Options are conditioned upon
the Company's reservation of the right to withhold, in accordance with any
applicable law, from any compensation payable to the Optionee any taxes required
to be withheld by federal, state or local law as a result of the grant or
exercise of such Option or the sale of the Shares issued upon exercise of the
Option.
18. SHAREHOLDER APPROVAL OF PLAN A AND PLAN B. Continuance of Plan A and Plan B
and the effectiveness of any Option granted under such Plan shall be subject to
approval by the holders of the outstanding voting stock of the Company in
accordance with applicable law within twelve (12) months before or after the
date Plan A and Plan B is adopted by the Board. Any Options granted under Plan A
and Plan B prior to obtaining such shareholder approval shall be granted upon
the conditions that the Options so granted: (i) shall not be exercisable prior
to such approval and (ii) shall become null and void ab initio if such
shareholder approval is not obtained.
19. LIABILITY OF COMPANY. The Company, its Parent or any Subsidiary which is in
existence or hereafter comes into existence, will not be liable to an Optionee
granted an Incentive Option or other person if it is determined for any reason
by the Internal Revenue Service or any court having jurisdiction that any
Incentive Options granted hereunder are not Incentive Stock Options.
20. NOTICES. Any notice to be given to the Company pursuant to the provisions of
the Plans shall be addressed to the Company in care of its Secretary at its
principal office, and any notice to be given to an Optionee shall be delivered
personally or addressed to such Optionee at the address given beneath such
Optionee's signature on such Optionee's Stock Option Agreement, or at such other
address as such Employee (or any transferee) upon the transfer of the Optioned
Stock may hereafter designate in writing to the Company. Any such notice shall
be deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, registered or certified, and deposited, postage and
registry or certification fee prepaid, in a post office or branch post office
regularly maintained by the United States Postal Service. It shall be the
obligation of each Optionee and each transferee holding Shares purchased upon
exercise of an Option to provide the Secretary of the Company, by letter mailed
as provided hereinabove, with written notice of such person's direct mailing
address.
<PAGE>
21. NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is purely voluntary on the part
of the Company, and the continuance of the Plan shall not be deemed to
constitute a contract between the Company and any Employee, or to be
consideration for or a condition of the employment of any Employee. Nothing
contained in this Plan shall be deemed to give any Employee the right to be
retained in the employ of the Company, its Parent, Subsidiary or a successor
corporation, or to interfere with the right of the Company or any such
corporations to discharge or retire any Employee thereof at any time. No
Employee shall have any right to or interest in Options authorized hereunder
prior to the grant of such Option to such employee, and upon such grant he or
she shall have only such rights and interests as are expressly provided herein,
subject, however, to all applicable provisions of the Company's Certificate of
Incorporation, as the same may be amended from time to time.
22. LEGENDS ON CERTIFICATES.
(a) Federal Law. Unless an appropriate registration statement is filed
pursuant to the Federal Securities Act of 1933, as amended, with respect to the
Options and Shares issuable under the Plans, each certificate representing such
Options and Shares shall be endorsed on its face with a legend substantially as
follows:
"THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF
THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER
OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
(b) State Legend. If required by applicable state authorities each
certificate representing the Options and Shares issuable under the Plans shall
be endorsed on its face with any legends required by such authorization.
(c) Additional Legends. Each certificate representing the Options and
Shares issuable under the Plans shall also contain legends as are set forth in
any Stock Purchase Agreement or other agreement the execution of which is a
condition to the exercise of an Option under this Plan. In addition, each Option
Agreement shall be endorsed with a legend substantially as follows:
"THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAYBE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO
BETWEEN THE HOLDER OF THIS OPTION AND THE COMPANY AS A CONDITION TO EXERCISE OF
THIS OPTION."
23. AVAILABILITY OF PLAN. A copy of the Plans shall be delivered to the
Secretary of the Company and shall be shown by him to any eligible person making
reasonable inquiry concerning it.
24. INVALID PROVISIONS. In the event that any provision of the Plans is found to
be invalid or otherwise unenforceable under any applicable law, such invalidity
or unenforceability shall not be construed as rendering any other provisions
contained herein as invalid or unenforceable, and all such other provisions
shall be given full force and effect to the same extent as though the invalid or
unenforceable provision was not contained herein.
25. APPLICABLE LAW. These Plans shall be governed and construed in accordance
with the laws of the State of Nevada applicable to contracts executed, and to be
fully performed, in Nevada.
<PAGE>
IN WITNESS WHEREOF, pursuant to the due authorization and adoption of these
Plans by the Board on , 199__, the Company has caused these Plans to be duly
executed by its duly authorized officers, effective as of , 199__.
Centaur Technologies, Inc.
a Nevada corporation
--------------------------
By:
------------------------
Title:
--------------------
<PAGE>
EXHIBIT "A"
PLAN A
THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS
OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO
BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION.
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made as of the ___ day of _______, 199__, by and between Centaur
Technologies, Inc., a Nevada corporation (hereinafter called "Company") and
____________ (hereinafter called "Optionee").
RECITALS
A. The Board of Directors of the Company has adopted the Company's 1999
Incentive Stock Option Plan (the "Plan") for the purpose of attracting and
retaining the services of selected key employees (including officers and
employee directors), who contribute to the financial success of the Company or
its parent or subsidiary corporations.
B. Optionee is a key member of the Company or its parent or subsidiary
corporations, and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Company's grant of a
stock option to the Optionee.
C. The granted option is intended to be an incentive stock option
("Incentive Option") within the meaning of Section 422 of the Internal Revenue
Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions set forth
in this Agreement, there is hereby granted to Optionee, as of the date of this
Agreement (the "Grant Date"), a stock option to purchase up to __________ shares
of the Company's Common Stock (the "Optioned Shares") from time to time during
the option term at the option price of $_____ per share.
2. PLAN. The options granted hereunder are in all instances subject to the
terms and conditions of the Plan. In the event of any conflict between this
Agreement and the Plan, the provisions of the Plan shall control. Optionee
acknowledges receipt of a copy of the Plan and hereby accepts this option
subject to all of the terms and conditions of the Plan. Optionee agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board upon any questions arising under the Plan.
<PAGE>
3. OPTION TERM. This option shall have a maximum term of ___ (__) years
measured from the Grant Date and shall accordingly expire at the close of
business on ______, _____ (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 7, 9(a) or 20.
4. OPTION NONTRANSFERABLE; EXCEPTION. This option shall be neither
transferable nor assignable by Optionee, either voluntarily or involuntarily,
other than by will or by the laws of descent and distribution and may be
exercised, during Optionee's lifetime, only by Optionee.
5. CONDITION PRECEDENT TO EXERCISE. This option may not be exercised in
whole or in part at any time prior to the time the Company has satisfied the
following condition precedent: ______________. In the event the foregoing
condition precedent has not been satisfied prior to the Expiration Date or prior
to this option's earlier termination in accordance with Paragraph 7, 9(a) or 20,
then this option shall terminate and cease to be outstanding.
6. DATES OF EXERCISE. This option may not be exercised in whole or in part
at any time prior to the time it is approved by the Company's shareholders in
accordance with Paragraph 20. Provided such shareholder approval is obtained and
the condition precedent to exercise set forth in Paragraph 5 has been satisfied,
this option shall become exercisable for 100% of the Optioned Shares one (1)
year from the Grant Date, provided that in no event may options for more than
One Hundred Thousand Dollars ($100,000) of Optioned Shares, calculated at the
exercise price, become exercisable for the first time in any calendar year. Once
exercisable, options shall remain so exercisable until the expiration or sooner
termination of the option term under Paragraph 7 or Paragraph 9(a) of this
Agreement. In no event, however, shall this option be exercisable for any
fractional shares.
7. ACCELERATED TERMINATION OF OPTION TERM. The option term specified in
Paragraph 3 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should one of the following provisions become
applicable:
(i) Except as otherwise provided in subparagraphs (ii) and (iii)
below, should Optionee cease to be an Employee of the Company for any
reason at any time during the option term, any option of the Optionee,
whether vested or non-vested, and if issued under Plan A, shall terminate
as of the date of termination of employment.
(ii) Should Optionee die while this option is outstanding, then the
executors or administrators of Optionee's estate or Optionee's heirs or
legatees (as the case may be) shall have the right to exercise this option
for the number of shares (if any) for which the option is exercisable on
the date of the optionee's death. Such right shall lapse and this option
shall cease to be exercisable upon the earlier of (i) six (6) months from
the date of the optionee's death or (ii) the Expiration Date.
(iii) Should Optionee become permanently disabled and cease by reason
thereof to be an Employee of the Company at any time during the option
term, then Optionee shall have a period of six (6) months (commencing with
the date of such cessation of Employee status) during which to exercise
this option; provided, however, that in no event shall this option be
exercisable at any time after the Expiration Date. Optionee shall be deemed
to be permanently disabled if Optionee is, by reason of any medically
determinable physical or mental impairment expected to result in death or
to be of continuous duration of not less than twelve (12) months, unable to
perform his/her usual duties for the Company or its Parent or Subsidiary
corporations. Upon the expiration of the limited period of exercisability
or (if earlier) upon the Expiration Date, this option shall terminate and
cease to be outstanding.
(iv) For purposes of this Paragraph 7 and for all other purposes under
this Agreement, Optionee shall be deemed to be an Employee of the Company
and to continue in the Company's employ for so long as Optionee remains an
Employee of the Company or one or more of its parent or subsidiary
corporations as such terms are defined in the Plan.
8. ADJUSTMENT IN OPTION SHARES.
(a) In the event any change is made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, combination of
shares, or other change affecting the outstanding Common Stock as a class
without receipt of consideration (as set forth in the Plan), then
appropriate adjustments will be made to (i) the total number of Optioned
Shares subject to this option and (h) the option price payable per share in
order to reflect such change and thereby preclude a dilution or enlargement
of benefits hereunder.
<PAGE>
(b) If the Company is the surviving entity in any merger or other
business combination, then this option, if outstanding under the Plan
immediately after such merger or other business combination shall be
appropriately adjusted to apply and pertain to the number and class of
securities to which Optionee immediately prior to such merger of other
business combination would have been entitled to receive in the
consummation of such merger or other business combination.
9. SPECIAL TERMINATION OF OPTION.
(a) In the event of one or more of the following transactions (a
"Corporate Transaction"):
(i) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company; or
(iii) any other corporate reorganization or business combination
in which fifty percent (50%) or more of the Company's outstanding
voting stock is transferred, or exchanged through merger, to different
holders in a single transaction or a series of related transactions;
then this option shall terminate upon the consummation of such Corporate
Transaction and cease to be exercisable, unless it is expressly assumed by
the successor corporation or parent thereof. The Company shall provide
Optionee with at least thirty (30) days prior written notice of the
specified date for the Corporate Transaction. The Company can give no
assurance that the options shall be assumed by the successor corporation or
its parent company and it may occur that some options outstanding under the
Plan will be assumed while these options are terminated.
(b) In the event of a Corporate Transaction, the Company may, at its
option, accelerate the vesting schedule contained in Section 6 hereof, but
shall have no obligation to do so. The Company shall have the right to
accelerate other options outstanding under the Plan or any other plan, even
if it does not accelerate the options of Optionee hereunder.
(c) This Agreement shall not in any way affect the right of the
Company to make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
10. PRIVILEGE OF STOCK OWNERSHIP. The holder of this option shall not have
any of the rights of a shareholder with respect to the Optioned Shares until
such individual shall have exercised the option and paid the option price in
accordance with this Agreement.
11. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any part
of the Optioned Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
(i) Execute and deliver to the Secretary of the Company a stock
purchase agreement in substantially the form of Exhibit D to this
Agreement (the "Purchase Agreement");
(ii) Pay the aggregate option price for the purchased shares in
cash, unless another form of consideration is permitted as described
in Exhibit C, if any, attached hereto or by the Board at the time of
exercise.
<PAGE>
(b) This option shall be deemed to have been exercised with respect to
the number of Optioned Shares specified in the Purchase Agreement at such
time as the executed Purchase Agreement for such shares shall have been
delivered to the Company and all other conditions of this Section have been
fulfilled. Payment of the option price shall immediately become due and
shall accompany the Purchase Agreement. As soon thereafter as practical,
the Company shall mail or deliver to Optionee or to the other person or
persons exercising this option a certificate or certificates representing
the shares so purchased and paid for.
12. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of Optioned Shares
upon such exercise shall be subject to compliance by the Company and
Optionee with all applicable requirements of law relating thereto and with
all applicable regulations of any stock exchange on which shares of the
Company's Common Stock may be listed at the time of such exercise and
issuance.
(b) In connection with the exercise of this option, Optionee shall
execute and deliver to the Company such representations in writing as may
be requested by the Company in order for it to comply with the applicable
requirements of federal and state securities laws.
13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraph 4 or 9(a), the provisions of this Agreement shall insure to the
benefit of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Company.
14. LIABILITY OF COMPANY.
(a) If the Optioned Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without
shareholder approval be issued under the Plan, then this option shall be
void with respect to such excess shares unless shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of
Section 18 of the Plan.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option
without the imposition of requirements unacceptable to the Company in its
reasonable discretion shall relieve the Company of any liability with
respect to the non-issuance or sale of the Common Stock as to which such
approval shall not have been obtained. The Company, however, shall use its
best efforts to obtain all such approvals.
(c) Neither the Company nor any Parent, Subsidiary or successor
corporation will have any liability to Optionee or any other person if it
is determined for any reason that any options granted hereunder are not
Incentive Stock Options.
15. NO EMPLOYMENT CONTRACT. Except to the extent the terms of any written
employment contract between the Company and Optionee may expressly provide
otherwise, the Company (or any parent or subsidiary corporation of the Company
employing Optionee) shall be under no obligation to continue the employment of
Optionee for any period of specific duration and may terminate Optionee's status
as an Employee at any time, with or without cause.
16. NOTICES. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Company in care of its Secretary at its corporate offices. Any notice required
to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated below Optionee's signature line on this
Agreement. All notices shall be deemed to have been given or delivered upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and properly
addressed to the party to be notified.
17. LOANS OR GUARANTEES. The Company may, in its absolute discretion and
without any obligation to do so, assist Optionee in the exercise of this option
by (i) authorizing the extension of a loan to Optionee from the Company, (ii)
permitting Optionee to pay the option price for the purchased Common Stock in
installments over a period of years, or (iii) authorizing a guarantee by the
Company of a third party loan to Optionee. The terms of any loan, installment
method of payment or guarantee (including the interest rate, the Collateral
requirements and terms of repayment) shall be established by the Company in its
sole discretion.
<PAGE>
18. CONSTRUCTION. This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the Plan. All decisions of the Company with respect to any question or issue
arising under the Plan or this Agreement shall be conclusive and binding on all
persons having an interest in this option.
19. GOVERNING LAW. The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Nevada.
20. SHAREHOLDER APPROVAL. The grant of this option is subject to approval
of the Plan by the Company's shareholders within twelve (12) months after the
adoption of the Plan by the Board of Directors, and this option may not be
exercised in whole or in part until such shareholder approval is obtained. In
the event that such shareholder approval is not obtained, then this option shall
thereupon terminate and Optionee shall have no further rights to acquire any
Optioned Shares hereunder.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
duplicate on its behalf by its duly authorized officer and Optionee has also
executed this Agreement in duplicate, all as of the day and year indicated
above.
Centaur Technologies, Inc.
a Nevada corporation
---------------------------
By: __________________
Title: ________________
- - ------------------------------------
Optionee
Address:
--------------------------
--------------------------
<PAGE>
EXHIBIT "B"
PLAN A
Other Forms of Acceptable Consideration
[If no forms are listed hereon, cash shall be the only
acceptable form of consideration for the exercise of the
options.]
-----------------
<PAGE>
EXHIBIT "C"
PLAN B
THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS
OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION TATEMENT RELATING
THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO
BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO EXERCISE OF THIS OPTION.
NON-STATUTORY STOCK OPTION AGREEMENT
AGREEMENT made as of the ____ day of ______, 199__, by and between Centaur
Technologies, Inc., a Nevada corporation (hereinafter called "Company"), and
_______________ (hereinafter called "Optionee").
RECITALS
A. The Board of Directors of the Company has adopted the Company's 1999
Non-Statutory Stock Option Plan (the "Plan") for the purpose of attracting and
retaining the services of selected key employees (including officers and
employee directors) and others (collectively, "Eligible Persons"), who
contribute to the financial success of the Company or its parent or subsidiary
corporations.
B. Optionee is an Eligible Person and this Agreement is executed pursuant
to, and is intended to carry out the purposes of, the Plan in connection with
the Company's grant of a stock option to Optionee.
C. The granted option is not intended to be an incentive stock option
("Incentive Option") within the meaning of Section 422 of the Internal Revenue
Code, but is rather a non-statutory option.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions set forth
in this Agreement, there is hereby granted to Optionee, as of the date of this
Agreement (the "Grant Date"), a stock option to purchase up to _________ shares
of the Company's Common Stock (the "Optioned Shares") from time to time during
the option term at the option price of $____ per share. ----------
2. PLAN. The options granted hereunder are in all instances subject to the
terms and conditions of the Plan. In the event of any conflict between this
Agreement and the Plan, the provisions of the Plan shall control. Optionee
acknowledges receipt of a copy of the Plan and hereby accepts this option
subject to all of the terms and conditions of the Plan. Optionee agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board upon any questions arising under the Plan.
<PAGE>
3. OPTION TERM. This option shall have a maximum term of years measured
from the Grant Date and shall accordingly expire at the close of business on
_____ ____ , 199__ (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 6 or 8(a).
4. OPTION NONTRANSFERABLE; EXCEPTION. This option shall be neither
transferable nor assignable by Optionee, either voluntarily or involuntarily,
other than by will or by the laws of descent and distribution and may be
exercised, during Optionee's lifetime, only by Optionee.
5. DATES OF EXERCISE. This option shall be exercisable as follows:
_________. Once exercisable, options shall remain so exercisable until the
expiration or sooner termination of the option term under Paragraph 6 or
Paragraph 8(a) of this Agreement. In no event, however, shall this option be
exercisable for any fractional shares.
6. ACCELERATED TERMINATION OF OPTION TERM. The option term specified in
Paragraph 3 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should one of the following provisions become
applicable:
(i) (i) Except as otherwise provided in subparagraphs (ii) and (iii)
below, should Optionee cease to be an Employee of the Company for any
reason at any time during the option term, any option of the Optionee,
whether vested or non-vested, and if issued under Plan B, shall terminate
as of the date of termination of employment.
(ii) Should Optionee die while this option is outstanding, then the
executors or administrators of Optionee's estate or Optionee's heirs or
legatees (as the case may be) shall have the right to exercise this option
for the number of shares (if any) for which the option is exercisable on
the date of the optionee's death. Such right shall lapse and this option
shall cease to be exercisable upon the earlier of (i) six (6) months from
the date of the optionee's death or (ii) the Expiration Date.
(iii) Should Optionee become permanently disabled and cease by reason
thereof to be an Employee of the Company at any time during the option
term, then Optionee shall have a period of six (6) months (commencing with
the date of such cessation of Employee status) during which to exercise
this option; provided, however, that in no event shall this option be
exercisable at any time after the Expiration Date. Optionee shall be deemed
to be permanently disabled if Optionee is, by reason of any medically
determinable physical or mental impairment expected to result in death or
to be of continuous duration of not less than twelve (12) months, unable to
perform his/her usual duties for the Company or its Parent or Subsidiary
corporations. Upon the expiration of the limited period of exercisability
or (if earlier) upon the Expiration Date, this option shall terminate and
cease to be outstanding.
(iv) For purposes of this Paragraph 6 and for all other purposes under
this Agreement, if Optionee is an Employee, Optionee shall be deemed to be
an Employee of the Company and to continue in the Company's employ for so
long as Optionee remains an Employee of the Company or one or more of its
parent or subsidiary corporations as such terms are defined in the Plan.
For purposes of this Paragraph 6 and for all other purposes under this
Agreement, if Optionee is not an Employee, but is eligible because Optionee
is a director, consultant or contractor of Company or a parent or
subsidiary corporation, Optionee shall be deemed to be an Eligible Person
for so long as Optionee remains a director, consultant or contractor of the
Company or one or more of its parent or subsidiary corporations as such
terms are defined in the Plan.
7. ADJUSTMENT IN OPTION SHARES.
(a) In the event any change is made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, combination of
shares, or other change affecting the outstanding Common Stock as a class
without receipt of consideration (as set forth in the Plan), then
appropriate adjustments will be made to (i) the total number of Optioned
Shares subject to this option and (ii) the option price payable per share
in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
<PAGE>
(b) If the Company is the surviving entity in any merger or other
business combination, then this option, if outstanding under the Plan
immediately after such merger or other business combination shall be
appropriately adjusted to apply and pertain to the number and class of
securities to which Optionee immediately prior to such merger or other
business combination would have been entitled to receive in the
consummation of such merger or other business combination.
8. SPECIAL TERMINATION OF OPTION.
(a) In the event of one or more of the following transactions (a
"Corporate Transaction"):
(i) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company; or
(iii) any other corporate reorganization or business combination
in which fifty percent (50%) or more of the Company's outstanding
voting stock is transferred, or exchanged through merger, to different
holders in a single transaction or a series of related transactions;
then this option shall terminate upon the consummation of such Corporate
Transaction and cease to be exercisable, unless it is expressly assumed by
the successor corporation or parent thereof. The Company shall provide
Optionee with at least thirty (30) days prior written notice of the
specified date for the Corporate Transaction. The Company can give no
assurance that the options shall be assumed by the successor corporation or
its parent company and it may occur that some options outstanding under the
Plan will be assumed while these options are terminated.
(b) In the event of a Corporate Transaction, the Company may, at its
option, accelerate the vesting schedule contained in Section 5 hereof, but
shall have no obligation to do so. The Company shall have the right to
accelerate other options outstanding under the Plan or any other plan, even
if it does not accelerate the options of Optionee hereunder.
(c) This Agreement shall not in any way affect the right of the
Company to make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
9. PRIVILEGE OF STOCK OWNERSHIP. The holder of this option shall not have
any of the rights of a shareholder with respect to the Optioned Shares until
such individual shall have exercised the option and paid the option price in
accordance with this Agreement.
10. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any part
of the Optioned Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
(i) Execute and deliver to the Secretary of the Company a stock
purchase agreement in substantially the form of Exhibit "E" to this
Agreement (the "Stock Purchase Agreement");
(ii) Pay the aggregate option price for the purchased shares in
cash, unless another form of consideration is permitted as described
in Exhibit D, if any, attached hereto or by the Board at the time of
exercise.
(b) This option shall be deemed to have been exercised with respect to
the number of Optioned Shares specified in the Purchase Agreement at such
time as the executed Purchase Agreement for such shares shall have been
delivered to the Company and all other conditions of this Section have been
fulfilled. Payment of the option price shall immediately become due and
shall accompany the Purchase Agreement. As soon thereafter as practical,
the Company shall mail or deliver to Optionee or to the other person or
persons exercising this option a certificate or certificates representing
the shares so purchased and paid for.
<PAGE>
11. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of Optioned Shares
upon such exercise shall be subject to compliance by the Company and
Optionee with all applicable requirements of law relating thereto and with
all applicable regulations of any stock exchange on which shares of the
Company's Common Stock may be listed at the time of such exercise and
issuance.
(b) In connection with the exercise of this option, Optionee shall
execute and deliver to the Company such representations in writing as may
be requested by the Company in order for it to comply with the applicable
requirements of federal and state securities laws.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraph 4 or 8(a), the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Company.
13. LIABILITY OF COMPANY.
(a) If the Optioned Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without
shareholder approval be issued under the Plan, then this option shall be
void with respect to such excess shares unless shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of
Section 18 of the Plan.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option
without the imposition of requirements unacceptable to the Company in its
reasonable discretion shall relieve the Company of any liability with
respect to the nonissuance or sale of the Common Stock as to which such
approval shall not have been obtained. The Company, however, shall use its
best efforts to obtain all such approvals.
14. NO EMPLOYMENT CONTRACT. Except to the extent the terms of any written
employment contract between the Company and Optionee may expressly provide
otherwise, the Company (or any parent or subsidiary corporation of the Company
employing Optionee) shall be under no obligation to continue the employment of
Optionee for any period of specific duration and may terminate Optionee's status
as an Employee at any time, with or without cause.
15. NOTICES. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Company in care of its Secretary at its corporate offices. Any notice required
to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated below Optionee's signature line on this
Agreement. All notices shall be deemed to have been given or delivered upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and properly
addressed to the party to be notified.
16. WITHHOLDING. Optionee acknowledges that, upon any exercise of this
option, the Company shall have the right to require Optionee topay to the
Company an amount equal to the amount the Company is required to withhold as a
result of such exercise for federal and state income tax purposes.
17. LOANS OR GUARANTEES. The Company may, in its absolute discretion and
without any obligation to do so, assist Optionee in the exercise of this option
by (i) authorizing the extension of a loan to Optionee from the Company, (ii)
permitting Optionee to pay the option price for the purchased Common Stock in
installments over a period of years, or (iii) authorizing a guarantee by the
Company of a third party loan to Optionee. The terms of any loan, installment
method of payment or guarantee (including the interest rate, the Collateral
requirements and terms of repayment) shall be established by the Company in its
sole discretion.
18. CONSTRUCTION. This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the express terms and provisions of the Plan. All decisions of the Company
with respect to any question or issue arising under the Plan or this Agreement
shall be conclusive and binding on all persons having an interest in this
option.
<PAGE>
19. GOVERNING LAW. The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Nevada.
20. REPURCHASE R1GHTS. OPTIONEE HEREBY AGREES THAT ALL OPTIONED SHARES
ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF
THE COMPANY AND ITS ASSIGNS TO REPURCHASE SUCH SHARES IN ACCORDANCE WITH THE
TERMS AND CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT,
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
duplicate on its behalf by its duly authorized officer and Optionee has also
executed this Agreement in duplicate, all as of the day and year indicated
above.
Centaur Technologies, Inc.
a Nevada corporation
---------------------------
By: __________________
Title: ________________
- - ------------------------------------
Optionee
Address:
--------------------------
--------------------------
<PAGE>
EXHIBIT "D"
PLAN B
Other Forms of Acceptable Consideration
[If no forms are listed hereon, cash shall be the only acceptable form
of consideration for the exercise of the options.]
<PAGE>
EXHIBIT "E"
STOCK PURCHASE AGREEMENT
This Agreement is made as of this ____ day of ______, 199__, by and
among Centaur Technologies, Inc., a Nevada corporation ("Corporation"), and
________, the holder of a stock option under the Corporation's 1999 Stock
Option Plan ("Optionee").
1. EXERCISE OF OPTION
1.1 Exercise. Optionee hereby purchases shares of Class A Common Stock
of the Corporation ("Purchased Shares") pursuant to that certain option
("Option") granted Optionee on _______, 199__, under the Corporation's 1999
Stock Option Plan ("Plan") to purchase up to ______ shares of the
Corporation's Common Stock at an option price of $___ per share ("Option
Price").
1.2 Payment. Concurrently with the delivery of this Agreement to the
Secretary of the Corporation, Optionee shall pay the Option Price for the
Purchased Shares in accordance with the provisions of the agreement between
the Corporation and Optionee evidencing the Option ("Option Agreement") and
shall deliver whatever additional documents may be required by the Option
Agreement as a condition for exercise.
2. INVESTMENT REPRESENTATIONS
2.1 Investment Intent. Optionee hereby warrants and represents that
Optionee is acquiring the Purchased Shares for Optionee's own account and
not with a view to their resale or distribution and that Optionee is
prepared to hold the Purchased Shares for an indefinite period and has no
present intention to sell, distribute or grant any participating interests
in the Purchase Shares. Optionee hereby acknowledges the fact that the
Purchased Shares have not been registered under the Securities Act of 1933,
as amended (the "1933 Act"), and that the Corporation is issuing the
Purchased Shares to Optionee in reliance on the representations made by
Optionee herein.
2.2 Restricted Securities. Optionee hereby confirms that Optionee has
been informed that the Purchased Shares may not be resold or transferred
unless the Purchased Shares are first registered under the Federal
securities laws or unless an exemption from such registration is available.
Accordingly, Optionee hereby acknowledges that Optionee is prepared to hold
the Purchased Shares for an indefinite period and that Optionee is aware
that Rule 144 of the Securities and Exchange Commission issued under the
1933 Act is not presently available to exempt the sale of the Purchased
Shares from the registration requirements of the 1933 Act. Should Rule 144
subsequently become available, Optionee is aware that any sale of the
Purchased Shares effected pursuant to the Rule may, depending upon the
status of Optionee as an affiliate" or "non-affiliate" under the Rule, be
made only in limited amounts in accordance with the provisions of the Rule,
and that in no event may any Purchased Shares be sold pursuant to the Rule
until Optionee has held the Purchased Shares for the requisite holding
period following payment in cash of the Option Price for the Purchased
Shares.
2.3 Optionee Knowledge. Optionee represents and warrants that he or
she has a preexisting business or personal relationship with the officers
and directors of the Corporation, that he or she is aware of the business
affairs and financial condition of the Corporation and that he or she has
such knowledge and experience in business and financial matters with
respect to companies in business similar to the Corporation to enable him
or her to evaluate the risks of the prospective investment and to make an
informed investment decision with respect thereto. Optionee further
represents and warrants that the Corporation has made available to Optionee
the opportunity to ask questions and receive answers from the Corporation
concerning the terms and conditions of the issuance of the Purchased Shares
and that he or she could be reasonably assumed to have the capacity to
protect his or her own interests in connection with such investment.
2.4 Speculative Investment. Optionee represents and warrants that he
or she realizes that his or her purchase of the Purchased Shares will be a
speculative investment and that he or she is able, without impairing his or
her financial condition, to hold the Purchased Shares for an indefinite
period of time and to suffer a complete loss of his or her investment.
Optionee represents and warrants that he or she is aware and fully
understands the implications of the restrictions upon transfer imposed by
the Plan and therefore on the Purchased Shares.
2.5 Restrictive Legends. In order to reflect the restrictions on
disposition of the Purchased Shares, the stock certificates for the
Purchased Shares will be endorsed with the following legend:
<PAGE>
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, ASSIGNED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
THEREUNDER OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
3. MISCELLANEOUS PROVISIONS
3.1 Optionee Undertaking. Optionee hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation
may in its judgment deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions imposed on either the
Optionee or the Purchased Shares pursuant to the express provisions of this
Agreement.
3.2 Agreement Is Entire Contract. This Agreement constitutes the
entire contract between the parties hereto with regard to the subject
matter hereof. This Agreement is made pursuant to the provisions of the
Plan and shall in all respects be construed in conformity with the express
terms and provisions of the Plan.
3.3 Governing Law. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
3.4 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
3.5 Successors and Assigns. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and the Optionee and the Optionee's legal
representatives, heirs, legatees, distributees, assigns and transfer by
operation of law, whether or not any such person shall have become a party
to this Agreement and have agreed in writing to join herein and be bound by
the terms and conditions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first indicated above.
Centaur Technologies, Inc.
a Nevada corporation
---------------------------
By: __________________
Title: ________________
- - ------------------------------------
Optionee
Address:
--------------------------
--------------------------
