<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
ROYAL HOLDINGS SERVICES LIMITED
- -------------------------------------------------------------------------------
(Name of Small Business Issuer in its Charter)
NEVADA 88-0381259
- --------------------------------------- ------------------------------------
State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
22 OLD QUEEN STREET, LONDON SW1H 9HW UNITED KINGDOM
- ---------------------------------------- -----------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (44) 171 222 5061
-----------------------------------------------------
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
NONE
------------------- ------------------------------
------------------- ------------------------------
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK, $0.001 PAR VALUE
- -------------------------------------------------------------------------------
(Title of class)
<PAGE> 2
PART 1
ITEM 1. DESCRIPTION OF BUSINESS.
(a) Royal Holdings Services Limited ("RHSL" or the "Company") is a Nevada
corporation organized as North American Security & Fire, Inc. on December 17,
1997. On December 21, 1998, the Company changed its name to North American
Security & Fire Acquisitions, Inc., and on December 22, 1998, the Company
incorporated a wholly-owned subsidiary, North American Security & Fire, Inc.,
also a Nevada corporation ("NASF"). In March 1999, the Company and NASF
reorganized. NASF acquired all the assets, liabilities and business of the
Company, and the Company subsequently spun off and distributed ownership of NASF
to the stockholders of the Company. On June 9, 1999, the Company changed its
name to Royal Holdings Securities, Ltd. On June 11, 1999, the Company changed
its name to Royal Holdings Services, Ltd.
(b) Prior to March 1999, the Company sold, installed, serviced and monitored all
types of intrusion detection (burglar), fire detection, access control and
closed-circuit television networks that used badge imaging and other low-voltage
security for home and business automation systems. Since March 1999, the Company
has had no operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The Company currently has no assets, liabilities or operations. On July
13, 1999, a number of investors acquired approximately 91% of the Company's
issued and outstanding shares of common stock from Intrepid International S.A.,
the Company's prior principal shareholder. The investors purchased the Company
to use it as a vehicle to acquire and hold equity interests in other operating
companies, and the Company is currently pursuing the possibility of acquiring a
controlling equity interest in Modiluft Limited ("Modiluft"), an Indian domestic
airline company listed on the Indian stock exchanges. However, the acquisition
of Modiluft is subject to a number of conditions precedent, and there can be no
assurance that the acquisition will close as anticipated.
The Company does not anticipate conducting product research and
development activities in the next twelve months, nor does it expect to purchase
or sell any plants, facilities or significant equipment. The Company's only
expenditures have been to pay administrative, accounting and legal expenses. The
Company's need to raise additional funds in the next twelve months will depend
to a large extent on whether the Company successfully completes both the private
placement offering it is currently conducting (the "Private Placement," as
discussed further below) and the contemplated purchase of Modiluft. If the
Private Placement and the purchase of Modiluft are successful, the proceeds of
the Private Placement remaining after the purchase of Modiluft is expected to
satisfy the Company's cash requirements for the next twelve months, provided
that the Company does not undertake additional acquisitions during the
twelve-month term.
If the acquisition of Modiluft does not take place, the Company will
pursue other acquisition opportunities. Competition in the search for
acquisition targets is intense and may be expected to intensify. Management, in
relying to some extent on others, cannot control the ultimate result of the
venture or assure itself or its current and potential investors that the pursuit
of business opportunities through acquisition or combination will be successful.
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<PAGE> 3
ITEM 3. DESCRIPTION OF PROPERTY.
(a) The Company's principal offices are located at 22 Old Queen Street, London
SW1H 9HW, United Kingdom. The Company's telephone number is (44) 171 222 5061.
The Company has the non-exclusive, rent-free use of the office space and
services of Platinum Securities International. The Company owns no real property
and has no interest in any real property, and the Company does not currently
foresee acquiring an interest in any real property.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) The table below shows the outstanding shares of Common Stock of the Company
owned of record or beneficially by each person who owned of record, or was known
by the Company to own beneficially, more than 5% of the Company's Common Stock
on October 4, 1999. All of the per share numbers are calculated to include the
effect of a reverse stock split of 1.7 shares into 1 share, effective June 19,
1999 (the "Reverse Split"). The table also shows the potential effect of the
Private Placement on ownership of shares of the Company's Common Stock.
<TABLE>
<CAPTION>
Amount and Percent of Class
Nature of Percent of Assuming all
Name and Address of Beneficial Class Prior to Shares Offered are
Title of Class Beneficial Owner Owner Offering Sold
- -------------- ------------------------------------ ----------- -------------- ------------------
<S> <C> <C> <C> <C>
Common Boshof Holdings, Inc. 569,000*(1) 7.65% 2.49%
c/o Morgan y Morgan
53rd Street
Urbanizacion Obarrio
Swiss Tower, 16th Floor
Panama, Republic of Panama
Common Cumbrian Trading Ltd. 560,000*(2) 7.54% 2.45%
Lake Building, 1st Floor
Wickhams Cay 1
P.O. Box 3152
Road Town, Tortolla
British Virgin Islands
Common Kurt Dalmata 576,890 7.75% 2.52%
Corporate Counciling Group
Lavaterstrasse 45
Zurich, Switzerland
Common John Devries 590,000 7.91% 2.58%
P.O. Box 178
Grade Turks-Turks and Caicos Islands
British West Indies
Common Joel Dumaresq 400,000* 5.50% 1.75%
3505 W. 15th Avenue
Vancouver, British Columbia
V6R 2Z3 Canada
Common Gampadona Limited 612,000*(3) 8.19% 2.68%
Trust House
112 Bonadie Street
Kingstown, St. Vincent
West Indies
</TABLE>
2
<PAGE> 4
<TABLE>
<S> <C> <C> <C> <C>
Common Ajmal Khan 400,000* 5.50% 1.75%
1177 West Hastings Street, #2000
Vancouver, British Columbia
V6E 2K3 Canada
Common Kristof Kossuth 564,000 7.59% 2.47%
Hohenstafsenstrasse 32
Berlin 10799 Germany
Common G. Brian Longpre 641,637 8.55% 2.81%
Synergy International
East Bay Centre, Suite B-66
P.O. Box N-1836
Nassau, Bahamas
Common Odadale Portfolio, Inc. 579,000*(4) 7.78% 2.53%
50 Shirley Street
P.O. Box CB-13937
Nassau, Bahamas
Common Sebira Financial, Inc. 580,000*(5) 7.79% 2.54%
Jasmin Court
35A Regent Street
P.O. Box 1777
Belize City, Belize
</TABLE>
* These shares are subject to lock-up agreements whereby the respective owners
of the shares agree that during the period beginning on November 30, 1999 and
ending on November 30, 2000, they will not, directly or indirectly, offer, sell,
contract to sell, grant any option for the sale of, pledge, or otherwise dispose
of those shares, except (i) as a bona fide gift or gifts, provided the donee or
donees thereof agree in writing to be bound by the lock-up agreements, or (ii)
with the prior written consent of the lead placement agents of the Private
Placement.
(1) Includes 284,500 shares of Company Common Stock subject to a purchase
option granted by Boshof Holdings, Inc. to Hampton Associates Limited.
(2) Includes 280,000 shares of Company Common Stock subject to a purchase
option granted by Cumbrian Trading Limited to Sandown Limited.
(3) Includes 306,000 shares of Company Common Stock subject to a purchase
option granted by Gampadona Limited to Ruffino Developments Limited.
(4) Includes 289,500 shares of Company Common Stock subject to a purchase
option granted by Odadale Portfolio, Inc. to Fletcher Investments Limited.
(5) Includes 290,000 shares of Company Common Stock subject to a purchase
option granted by Sebira Financial, Inc. to Stamford Securities Limited.
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<PAGE> 5
(b) The table below shows the outstanding shares of Company Common Stock owned
of record or beneficially by each officer and director of the Company on October
4, 1999, and by all officers and directors as a group.
<TABLE>
<CAPTION>
Amount and Percent of Class
Nature of Percent of Assuming all
Name and Address of Beneficial Class Prior to Shares Offered are
Title of Class Beneficial Owner Owner Offering Sold
- -------------- ------------------------------------ ----------- -------------- ------------------
<S> <C> <C> <C> <C>
Common Ajmal Khan 400,000 5.50% 1.75%
1177 West Hastings Street, #2000
Vancouver, British Columbia
V6E 2K3 Canada
Common Rex Lezard 100,000 1.43% 0.44%
#7 Orchard Hill
Windlesham, Surrey GU 206 DB
United Kingdom
Common All Officers and Directors as a Group 500,000 6.93% 2.19%
(2 persons)
</TABLE>
(c) The Company is conducting a Private Placement of up to 16,000,000 shares of
the Company's Common Stock. Although the Company and the placement agents for
the Private Placement have presented the Private Placement to potential
investors so as to limit the likelihood that investors will purchase large
blocks of the shares offered, there is nevertheless a possibility that one
investor, or a number of investors acting as a group, could purchase enough
shares of the Company's Common Stock to cause a change in control of the
Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
(a) As of December 1, 1999, the directors and executive officers of the Company,
their ages, positions in the Company, the date of their initial election or
appointment as director or executive officer, and the expiration of their terms
as directors, are as follows:
<TABLE>
<CAPTION>
Position and Date of Initial Expiration
Name Age Appointment or Election of Term
- --------------------- --- ----------------------------------------- -----------
<S> <C> <C> <C>
Ajmal Khan 38 President, Secretary, July 1999 April 2000
and a Director
Satish Kumar Modi 53 Director July 1999 April 2000
Rex Lezard 53 Director July 1999 April 2000
Michael J. Forster 35 Director October 1999 April 2000
Mahesh M. Gandhi 46 Director October 1999 April 2000
Paresh J. Khandwala 45 Director October 1999 April 2000
Samir Shantilal Doshi 39 Director October 1999 April 2000
</TABLE>
- ----------
* The Company's directors are elected at the annual meeting of stockholders and
hold office until their successors are elected and qualified. Any vacancy
occurring in the board of directors may be filled by the affirmative vote of the
remaining directors, though less than a quorum of the board. A director elected
to fill a vacancy serves the unexpired term of his predecessor in office.
4
<PAGE> 6
Ajmal Khan, age 38, has been President, Secretary and a director of the
Company since July 1999. Since 1993, Mr. Khan has served as the President of the
Verus Group of Companies, a diversified investment group involved in,
structuring and syndicating North American real estate and corporate
acquisitions. Mr. Khan also has a joint venture interest in Barakaat Holdings
Ltd., a sports marketing company. Mr. Khan currently serves as a director for
the following public companies: iParty Corporation, Wattage Monitor Corporation,
On2.com and Predict-It Corporation.
Satish Kumar Modi, age 53, has been a director of the Company since
July 1999. Mr. Modi is the founder and Chairman of Modiluft. Through his direct
and indirect holdings, Mr. Modi is also the principal stockholder of Modiluft.
Since 1994, Mr. Modi has served as the Chairman of the Modi Group of Companies,
which includes Modi Fibres Limited, Modi Hoover Limited and Modi Hoover
International Limited. Mr. Modi also serves as a director of Modi Spinning and
Weaving Mills Limited, Modi Overseas Investment Limited, Modi Hanro Limited, UK,
and Jardine Fleming India Trust, Hong Kong. In his capacity as the Chairman and
Director of Modiluft, Mr. Modi has been involved in a number of legal
proceedings in India, both civil and criminal, in connection with winding-up
petitions filed by several of Modiluft's former commercial partners, vendors and
employees. Indian courts have not rendered final judgments in regards to those
proceedings.
Rex Lezard, age 53, has served as a director of the Company since July
1999. In 1994, Mr. Lezard became a Senior Associate with Speedwing International
Limited, a division of British Airways Plc offering revenue accounting, cargo,
operations and engineering, passenger services, management and outsourcing
consulting services to companies in the transportation industry. Between 1995
and 1997, Mr. Lezard was seconded from Speedwing to act as Chief Executive
Officer of Ghana Airways. Mr. Lezard subsequently served as the Chief Executive
officer of Air Malawi. Mr. Lezard recently left Speedwing to become the Chief
Executive Officer of Modiluft in connection with that airline's anticipated
re-launch.
Michael J. Forster, age 35, has served as a director of the Company
since October 1999. Since August 1999, Mr. Forster has been the President and
Chief Operating Officer of SmartSources.com, Inc., a software and Internet
company that develops and produces web-based applications software for companies
and organizations functioning on the Internet. From October 1997 to August 1999,
Mr. Forster was the President, Chief Executive Officer and Chairman of Mercury
Scheduling Systems, Inc., a publicly-owned airline operations software company
based in Vancouver, Canada. From May 1996 to September 1997, Mr. Forster was a
business consultant to various airline companies. From February 1995 to April
1996, Mr. Forster served as the President and Chief Executive Officer of Sierra
Expressway Airlines, a regional commuter airline company Mr. Forster founded.
Sierra Expressway Airlines filed for bankruptcy during Mr. Forster's term of
office. From January 1994 to February 1995, Mr. Forster was the General Manager
and Chief Operations Executive for American Airlines and its wholly-owned
subsidiary, Eagle Aviation Services, Inc. Mr. Forster currently serves as a
director for the following public companies: SmartSources.com, Inc. and Mercury
Scheduling Systems, Inc.
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<PAGE> 7
Mahesh M. Gandhi, age 46, has served as a director of the Company since
October 1999. Mr. Gandhi has been a Managing Director of Millennium Capital
Management Pvt. Ltd., an investment management and asset advising company in
Mumbai, India, since September 1996. From 1995 to September 1996, Mr. Gandhi
served as the Chief Executive Officer of Jardine Fleming's Asset Management and
Unit Trusts operations in India. Prior to joining Jardine Fleming, Mr. Gandhi
was employed with the Unit Trust of India, the largest unit trust and mutual
fund in India.
Paresh J. Khandwala, age 45, has served as a director of the Company
since October 1999. Mr. Khandwala has been a Director of Khandwala Securities
Ltd. and its wholly-owned subsidiary, Khandwala Finances Ltd., since the
companies' inception in 1993. Khandwala Securities Ltd. is an investment banking
company, while Khandwala Finances Ltd. is an Indian registered broker-dealer and
a member of the capital market and wholesale debt market segments of the Indian
National Stock Exchange.
Samir Shantilal Doshi, age 39, has served as a director of the Company
since October 1999. Mr. Doshi has been a Director of Khandwala Securities Ltd.
and Khandwala Finances Ltd. since 1993. Mr. Doshi is a member of the Mumbai
Stock Exchange and an authorized dealer of the Over-The-Counter Exchange of
India. Mr. Doshi is also a member of the Bombay Stock Exchange Debt Market
Committee, as well as a member of the Committee to Implement the Dave Commission
Recommendations to the Over-The-Counter Exchange of India.
ITEM 6. EXECUTIVE COMPENSATION.
(a) The Company did not compensate prior management for the fiscal years ended
December 31, 1998 and 1999, nor is it presently compensating its officers or
directors. If the Company's search for a business opportunity through a merger
or combination is successful, the Company does intend at a future date to enter
into employment contracts with its officers for compensation approved by the
Board of Directors of the Company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During 1999 and 1998, $10,000 and $123,000, respectively, was paid in
consulting fees to shareholders and officers of the Company. Also during 1999
and 1998, $950 and $115,000, respectively, was received from related companies
and is considered a current liability with no provision for interest. These
receivables and payables were transferred in the subsidiary spin-off and no
asset or liability exists at December 31, 1999.
On March 17, 1999, Ajmal Khan, in his capacity as President of the
Verus Group ("Verus"), and Satish Modi, in his capacity as Chairman of Modiluft,
concluded an agreement whereby Verus agreed to organize the purchase of control
of the Company to be used as a vehicle to purchase an approximately 55%
controlling interest in Modiluft for an aggregate purchase price of $17.5
million. The letter of intent and subsequent modifications thereto provide that
Verus will receive 6% of the gross proceeds of the Private Placement. The
Company expects gross proceeds from the Private Placement to be approximately
$21.8 million.
On March 1, 1999, Millennium Capital Management Pvt. Ltd.
("Millennium") and Khandwala Securities Ltd. ("Khandwala") signed an agreement
with Modiluft whereby Millennium and Khandwala agreed to advise Modiluft in
connection with simultaneous debt and
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<PAGE> 8
equity offerings to raise an aggregate of $35 million for the re-launch of
Modiluft. On September 9, 1999, Millennium and Khandwala executed a private
placement engagement letter whereby they agreed to act as advisors and lead
placement agents for the Private Placement. The agreements discussed above
provide that, in return for their services, Millennium and Khandwala will
receive a placement fee of $75,000 plus 4% of the gross proceeds of the Private
Placement, payable by the Company to Millennium and Khandwala at the closing of
the Private Placement.
On July 13, 1999, a number of investors acquired from Intrepid
International S.A. 6,222,527 shares of the 6,859,781 total issued and
outstanding shares of the Company's Common Stock, which represents approximately
91% of the issued and outstanding Common Stock of the Company. These shares of
the Company's Common Stock were acquired for an aggregate purchase price of
$150,000 cash which was paid from personal funds of the purchasers. The
transaction was consummated pursuant to a Share Purchase Agreement, dated June
18, 1999 (the "Share Purchase Agreement"). Upon consummation of the Share
Purchase Agreement, all of the Company's incumbent officers and directors
resigned, and Ajmal Khan, Satish Modi and Rex Lezard were elected as directors
of the Company, effective as of the closing. Messrs. Khan, Modi and Lezard are
all designees of the purchasers.
Effective October 28, 1999, Paresh Khandwala, Mahesh Gandhi and Samir
Doshi were elected to the Board of Directors of the Company.
The Private Placement is being conducted on a best efforts,
minimum/maximum basis. The Private Placement may be closed only upon the
acceptance of subscription for a minimum of 12,750,000 shares of the Company's
Common Stock, and the Private Placement will be closed upon the acceptance of
subscriptions for the maximum of 16,000,000 shares. The Company calculates that
the maximum net proceeds of the Private Placement available to the Company will
be $19,545,000.
The Company proposes to use up to $17.5 million of the net proceeds of
the Private Placement to purchase 75-76.5 million shares of Modiluft Limited
Cumulative Redeemable Convertible Preferred Stock (the "CRCPS") which, if
converted, would represent approximately 54.68% of the total issued and
outstanding shares of Modiluft Common Stock. Satish Modi, a director of the
Company, is also the President and a director of Modiluft, as well as its
principal shareholder. In addition, Modiluft has proposed to engage Rex Lezard,
a director and shareholder of the Company, as its Chief Executive Officer. The
purchase of the CRCPS would be subject to the execution of a stock purchase
agreement containing representations, warranties and covenants customary to such
transactions. The stock purchase agreement also contains conditions precedent to
the Company's closing of the transaction intended to minimize the Company's
exposure as a majority shareholder of Modiluft. Nevertheless, the Board of
Directors of the Company will have the power to waive all or any of the
conditions precedent set forth in the stock purchase agreement as it deems in
its business judgment to be in the best interests of the Company and the
Company's stockholders.
ITEM 8. DESCRIPTION OF SECURITIES.
(a) The Company's Articles of Incorporation authorize the issuance of 50,000,000
shares of common voting equity stock , one mil ($0.001) par value per share. The
Company's Articles of Incorporation do not authorize any other classes of stock.
The Company may sell shares of its Common Stock from time to time for such
consideration as the Board of Directors may decide, provided that no
consideration shall be less than par value. Holders of shares of Common Stock
are not entitled to any preemptive or preferential rights to subscribe to any
unissued stock or any other securities which the Company may be authorized to
issue, and there are no conversion rights or redemption or sinking fund
provisions with respect to such shares. The holders of shares of Common Stock
have one vote per share on all matters, and they do not possess cumulative
voting rights. Holders of shares of Common Stock are entitled to share ratably
in dividends, if any, as the Board of Directors may declare from time to time in
its discretion from funds legally available therefor. The Company has paid no
cash dividends on its shares of Common Stock to date. In the event of a
liquidation, dissolution or winding up of the Company, the holders of shares are
entitled to share pro rata all assets remaining after payment in full of all
liabilities.
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<PAGE> 9
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
(a) The Company's Common Stock has been traded on the OTC Bulletin Board since
October 30, 1998. The Company's Common Stock is currently traded on the OTC
Bulletin Board under the symbol "RHSL." The following table sets forth the high
and low bid prices for the Common Stock for the periods indicated therein since
the Common Stock commenced actual trading, as reported by the National Quotation
Bureau. The quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual transactions. In addition,
the quotations should not be construed to imply that an established trading
market exists for the Common Stock; trading to date has been sporadic.
<TABLE>
<CAPTION>
HIGH BID LOW BID
-------- -------
<S> <C> <C>
Quarter ended December 31, 1999 3.0156 2.0000
Quarter ended September 30, 1999* 3.1250 2.1250
Quarter ended June 30, 1999 2.0000 1.5000
Quarter ended March 31, 1999 2.0000 1.0000
October 30 thru December 31, 1998 1.0000 0.0625
</TABLE>
- ----------
* After a 1 for 1.7 reverse stock split effective July 19, 1999. High and low
bid prices for the Common Stock from July 1 thru July 16, 1999 were 2.0000 and
1.7500, respectively.
(b) As of October 4, 1999, there were approximately 26 shareholders of record of
the Company's Common Stock.
(c) The Company has paid no cash dividends on its Common Stock to date. The
Board of Directors may consider paying dividends in the future and will
periodically review its policy regarding dividends. Declaration of dividends, if
any, by the Board of Directors will depend upon a number of factors, including
capital requirements, investment opportunities available to the Company,
regulatory limitations, the Company's results of operations and financial
condition, tax considerations and general economic conditions, as well as other
relevant factors. The Company can give no assurances, however, that it will
declare any dividends, what amount the dividends will be, or whether it will
continue to pay such dividends, once commenced. The Company may pay stock
dividends in lieu of, or in addition to, cash dividends.
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<PAGE> 10
ITEM 2. LEGAL PROCEEDINGS.
The Company is not a party to any litigation nor, to the knowledge of
management, is any litigation pending or threatened against the Company. The
Company is not a party to any other legal proceedings which would have a
material impact on the Company's operations and/or financial condition, nor is
the Company aware of any such threatened proceeding.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Set forth below is certain information concerning sales of securities
by the Company during the past three years that were not registered under the
Securities Act of 1933.
SECURITIES SOLD FOR CASH:
<TABLE>
<CAPTION>
TOTAL
AMOUNT OF TOTAL UNDERWRITING WARRANTS
SECURITIES OFFERING PRINCIPAL DISCOUNTS OR EXCEPTIONS (TENANTS OF
DATE TITLE SOLD PRICE UNDERWRITER COMMISSIONS CLAIMED CONVERSION)
- ------- --------------- ------------ -------- ----------- ------------ ---------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2/24/98 Unit Sale(1) 2,550,000(2) $250,000 None None(3) Reg D-504 The Warrants were
2,500,000 Units Units exercisable at any
*One Share of time up to eighteen
Common Stock (18) months after the
*One Warrant date of the Offering.
The Warrants were
callable at any time,
with 30 days notice,
by the Company at a
price of one tenth
of a cent ($0.001)
</TABLE>
(1) One (1) unit consisted of one share of Common Stock and one
eighteen-month Warrant valid for the purchase of one share of Common
Stock. The offering price for one share of Common Stock was ten cents
($0.10) per share. The warrant exercise price for one share of Common
Stock was fifty cents ($0.50).
(2) The Offering was over-subscribed by 50,000 units for a maximum offering
price of $255,000 (See Form D filed with the SEC dated 5/98). The
Company received $254,950 of the total $255,000.
(3) As reported in the Form D filed with the SEC, dated 5/98.
SECURITIES SOLD OTHER THAN FOR CASH:
Between December 18, 1997 and March 15, 1999, the Company issued an
aggregate of 9,141,628 shares of Common Stock in lieu of compensation of
$373,051 to five (5) investors for services previously rendered to the Company.
The issuance of these shares was exempt from registration pursuant to
Regulation D, Rule 504, of the Securities Act of 1933.
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<PAGE> 11
<TABLE>
<CAPTION>
IDENTITY OF PERSONS DESCRIPTION OF
AMOUNT OF WHO PURCHASED THE TYPE AND AMOUNT OF EXEMPTION
DATE TITLE SECURITIES SOLD SECURITIES TRANSACTION CONSIDERATION CLAIMED
- --------- ------------ --------------- ---------------------- ------------------- -------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
12/18/97 Common Stock 8,000,000 Intrepid International Accepted Consulting services- Reg D-504
S.A. Common Stock compensation was
for services valued at $8,000 and
rendered in lieu of exchanged for
monetary 8,000,000 Shares of
compensation. Common Stock
5/1/98 Common Stock 125,000 Mesa Resources, Inc.(1) Accepted Consulting Services- Reg D-504
350,000 Wade J. Vogel(1) Common Stock Compensation was Reg D-504
20,000 James W. Allen(1) for services valued at $58,905 and Reg D-504
100,000 Gary Leonard(1)(2) rendered in lieu of exchanged for 595,000 Reg D-504
monetary Shares of Common
compensation. Stock
9/9/98 Common Stock 30,000 Martin Young Accepted Consulting Services(3) Reg D-504
Common Stock
for services
rendered in lieu of
monetary
compensation.
1/22/99 Common Stock 400,000 Marshall Worldwide Accepted Consulting Services- Reg D-504
Limited Common Stock Compensation was
for services valued at $39,600 and
rendered in lieu of exchanged for 400,000
monetary Shares of Common
compensation. Stock
3/15/99 Common Stock 116,628 Intrepid International Accepted Compensation was
Ltd. Common Stock valued at $11,546 and
for services exchanged for 116,628
rendered in lieu of Shares of Common
monetary Stock
compensation.
</TABLE>
* The total additional paid-in capital as a result of stock taken as
compensation in lieu of monetary compensation for the December 97-June 99 period
was $373,051. Consequently, all swap transactions of stock in lieu of monetary
compensation claimed the Reg D-504 exemption. A review of the Company's Board
Resolutions indicate that the Board designated some transactions as Reg D-504's,
and others were specified as receiving restricted stock.
(1) The Company's Consolidated Financial Statements for the period June 30,
1999 (unconsolidated) and December 31, 1998 reflect on the Statement of
Stockholders Equity that the compensation valued for the five persons
totaled $58,905 and was exchanged for 595,000 shares of Common Stock.
(2) Gary Leonard's transaction was approved by the Board on June 25, 1998.
The Company's Financial Statements record the transaction on May 1,
1998.
(3) The Company Financial Statements do not record the Martin Young
transaction.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company intends to indemnify its officers and directors as provided
under Nevada law. The applicable statute is Nev. Rev. Stat. Ann. Section 78.7502
(1998), which provides as follows:
Section 78.7502. Discretionary and mandatory indemnification of
officers, directors, employees and agents: General provisions.
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a
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<PAGE> 12
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with the
action, suit or proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and that, with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense.
It is the view of the Company that the foregoing statute permits
indemnification of officers and directors for actions taken in good faith. The
Company intends to indemnify officers and directors to the full extent
permissible under Nevada law.
PART F/S
Please see the Financial Statements appearing on F-1 to F-10 and
incorporated herein by reference. The index to the Financial Statements appears
on page F-1.
11
<PAGE> 13
<TABLE>
<CAPTION>
CONTENTS
<S> <C>
Independent Auditors' Report .................................................................................3
Balance Sheets ...............................................................................................4
Statements of Operations .....................................................................................5
Statements of Stockholders' Equity ...........................................................................6
Statements of Cash Flows .....................................................................................7
Notes to the Financial Statements ...........................................................................8
</TABLE>
F-1
<PAGE> 14
[CROUCH, BIERWOLF & CHISHOLM LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Royal Holdings Services, Ltd.
We have audited the accompanying balance sheets of Royal Holdings Services, Ltd.
as of December 31, 1999 (unconsolidated) and December 31, 1998 (consolidated)
and the related statements of operations, stockholders' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Royal Holdings Services, Ltd.
as of December 31, 1999 (unconsolidated) and December 31, 1998 (consolidated)
and the results of its operations and cash flows for the years then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has minimal assets and no operations and is
dependent upon financing to continue operations. These factors raise substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in the Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ CROUCH, BIERWOLF, CHISHOLM
Salt Lake City, Utah
January 14, 2000
F-2
<PAGE> 15
ROYAL HOLDINGS SERVICES, LTD.
Balance Sheets
<TABLE>
<CAPTION>
ASSETS
December 31, December 31,
1999 1998
------------ ------------
(unconsolidated) (consolidated)
<S> <C> <C>
Current assets
Cash $ -- $ 2,733
Certificate of Deposit -- 31,220
Accounts Receivable (Net of allowance) -- 29,146
Inventory -- 11,256
Notes Receivable - Related Party -- 40,000
Total Current Assets ------------- -------------
-- 114,355
------------- -------------
Equipment
Office Equipment -- 10,394
Van -- 8,368
Less: Accumulated Depreciation -- (4,237)
------------- -------------
Total Equipment -- 14,525
------------- -------------
Other Assets
Organization Costs (Net of Amortization) -- 6,400
------------- -------------
Total Assets $ -- $ 135,280
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ -- $ 31,775
Accrued Expenses -- 9,728
Notes Payable -- 46,134
Notes Payable - Related Party -- 115,000
------------- -------------
Total Current Liabilities -- 202,637
------------- -------------
Stockholders' Equity
Common Stock, authorized
50,000,000 shares of $.001 par value, issued
and outstanding 6,859,781 and
6,555,882 shares, respectively 6,860 6,556
Additional Paid in Capital 367,303 315,944
Retained Earnings (374,113) (229,986)
Minority Interest -- (159,821)
Less: Subscription receivable (50) (50)
------------- -------------
Total Stockholders' Equity -- (67,357)
------------- -------------
Total Liabilities and Stockholders' Equity $ -- $ 135,280
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements
F-3
<PAGE> 16
ROYAL HOLDINGS SERVICES, LTD.
Statements of Operations
<TABLE>
<CAPTION>
For the Year Ended
December 31,
1999 1998
------------- --------------
(unconsolidated) (consolidated)
<S> <C> <C>
Revenues:
Sales $ -- $ 139,353
Cost of Sales -- (67,221)
--------------- --------------
Gross Profit -- 72,132
--------------- --------------
Expenses:
General & Administrative (51,758) (460,155)
--------------- --------------
Total Expenses (51,758) (460,155)
--------------- --------------
Other Income (Expense)
Loss on Spin-Off (181,369) --
Interest Income -- 1,220
Interest Expense -- (3,004)
Organization costs (6,400) --
--------------- --------------
Total Other Income (Expenses) (187,769) (1,784)
--------------- --------------
Minority Interest 21,548 159,821
Net (Loss) $ (217,979) $ (229,986)
=============== ==============
Net Loss Per Share $ (0.032) $ (0.039)
=============== ==============
Weighted average shares outstanding 6,831,762 5,939,060
=============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE> 17
ROYAL HOLDINGS SERVICES, LTD.
Statement of Stockholders' Equity
<TABLE>
<CAPTION>
Additional
Paid-in
Capital
Common Stock (Discount on Retained Minority
Shares Amount Stock) Earnings Interest
---------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance at inception -
December 17, 1997 -- $ -- $ -- $ -- $ --
Shares issued for organizational
costs 4,705,882 4,706 3,294 -- --
Net loss December 31, 1997 -- -- -- -- --
---------- ---------- ------------ ---------- ----------
Balance, December 31, 1997 4,705,882 4,706 3,294 -- --
May 1, 1998 - issued at $.10
per share for services 350,000 350 59,150 -- --
May 1, 1998 - issued at $.10
per share for cash 1,500,000 1,500 253,500 -- --
Net loss December 31, 1998 -- -- -- (229,986) (159,821)
---------- ---------- ------------ ---------- ----------
Balance, December 31, 1998
(consolidated) 6,555,882 6,556 315,944 (229,986) (159,821)
January 22, 1999 - issued at $.10
per share for services 235,294 235 39,765 -- --
March 15, 1999 - issued at $.10
per share for services 68,605 69 11,594 -- --
Spin-off adjustment (Note 6) -- -- -- 73,852 159,821
Net loss for the year
ended December 31, 1999 -- -- -- (217,979) --
---------- ---------- ------------ ---------- ----------
Balance, December 31, 1998
(unconsolidated) 6,859,781 $ 6,860 $ 367,303 $ (374,113) $ --
========== ========== ============ ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
F-5
<PAGE> 18
ROYAL HOLDINGS SERVICES, LTD.
Statement of Cash Flows
<TABLE>
<CAPTION>
For the Years Ended
December 31,
1999 1998
---------------- ----------------
Cash Flows from Operating Activities (unconsolidated) (consolidated)
<S> <C> <C>
Net loss $ (217,979) $ (229,986)
Adjustments to reconcile
net loss to net cash
provided by operations
Depreciation -- 4,237
Amortization -- 1,600
Minority Interest (21,548) (159,821)
Increase in accounts receivable -- (29,146)
Increase in inventory -- (11,256)
Increase in accounts payable and accruals -- 41,503
Shares issued for services 51,663 59,500
Bad Debt 181,369 --
Organization costs 6,400 --
---------------- ----------------
Net Cash Flows used in
Operating Activities (95) (323,369)
---------------- ----------------
Cash Flows from Investment
Activities:
Notes receivable-related party -- (40,000)
Purchase of equipment -- (18,762)
---------------- ----------------
Net Cash Flows (used) in
Investing Activities -- (58,762)
---------------- ----------------
Cash Flows from Financing
Activities:
Issuance of common stock -- 255,000
Subscription receivable -- (50)
Net proceeds (payments) on notes payable -- 46,134
Net proceeds from notes receivable-related party -- 115,000
---------------- ----------------
Net Cash Flows provided (used) by
Financing Activities -- 416,084
---------------- ----------------
Net increase (decrease) in cash (95) 33,953
Cash, beginning of period 95 --
---------------- ----------------
Cash, end of period $ -- $ 33,953
================ ================
Supplemental Cash Flow Information
Cash Paid for:
Interest $ -- $ 2,092
Taxes $ -- $ --
</TABLE>
The accompanying notes are an integral part of these financial statements
F-6
<PAGE> 19
ROYAL HOLDINGS SERVICES, LTD.
Notes to The Financial Statements
December 31, 1999 (unconsolidated) and December 31, 1998 (consolidated)
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
Royal Holdings Services, Ltd., ("the Company") is a Nevada corporation
organized as North American Security & Fire, Inc. on December 17, 1997. On
December 21, 1998, the Company's name was changed to North American
Security & Fire Acquisitions, Inc. In March, 1999, the Company spun-off its
subsidiary. On June 11, 1999, the Company changed its name to Royal
Holdings Services, Ltd. The Company is currently inactive and seeking a
merger candidate.
b. Consolidation
The consolidated December 31, 1998 financial statements include the
accounts of Royal Holdings Services, Ltd. (formerly North American Security
& Fire Acquisition, Inc.) and its wholly owned subsidiary, North American
Security & Fire, Inc., which owns 59 percent of American Security & Fire,
Inc. a Utah corporation.
c. Accounting Method
The Company recognizes income and expenses on the accrual basis of
accounting.
d. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
e. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
f. Inventory
Inventory is valued at the lower of cost or market and consists
primarily of electronic components.
g. Equipment
Equipment is carried at cost and depreciated over the estimated useful
life by the straight-line method.
h. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating
losses totaling approximately $374,113 at December 31, 1999. The net
operating losses will be used only if the Company is able to generate
taxable income.
F-7
<PAGE> 20
ROYAL HOLDINGS SERVICES, LTD.
Notes to the Financial Statements
December 31, 1999 (unconsolidated) and December 31, 1998 (consolidated)
NOTE 1 - Summary of Significant Accounting Policies (continued)
h. Provision for Income Taxes (continued)
Deferred tax assets and the valuation account is as follows at
December 31, 1999 and 1998.
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Deferred tax asset:
NOL carryforward $ 129,154 $ 132,534
Valuation allowance (129,154) (132,534)
------------ ------------
Total $ -- $ --
============ ============
</TABLE>
i. Organization Costs
During 1997, $8,000 of organization costs were paid by shareholders
of the Company. The shareholders were reimbursed by the Company through the
issuance of 8,000,000 shares of common stock valued at $8,000. Prior to
1999, organization costs were being amortized for a period of 60 months
using the straight-line method. In 1999, SOP 98-5 was adopted causing a
change in accounting policy. Organization costs will no longer be
amortized. Accordingly, the remaining balance of organization costs have
been expensed in 1999.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is dependent upon
raising capital to continue operations. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
NOTE 3 - Common Stock
During 1999, there was a reverse stock split of 1.7 to 1. These
financial statements have been retroactively restated to reflect the
reverse stock split.
During 1998, 30,000 shares of common stock were issued for services.
Subsequently, these shares were returned to the Company and retired. The
financial statements have been retroactively restated.
The May 1, 1998 issuance of 2,550,000 shares of common stock were
issued with one warrant per share valid for the purchase of one share of
common stock at an exercise price of $.50. The warrants are exercisable at
any time up to eighteen months after the date of the offering and they may
be called at any time, with 30 days notice by the Company at a price of
$.001.
NOTE 4 - Subscriptions Receivable
As of December 31, 1999, $254,950 has been received for issuance of
2,550,000 shares of common stock, leaving a subscription receivable of $50.
F-8
<PAGE> 21
ROYAL HOLDINGS SERVICES, LTD.
Notes to the Financial Statements
December 31, 1999 (unconsolidated) and December 31, 1998 (consolidated)
NOTE 5 - Related Party Transactions
During 1999 and 1998, $10,000 and $123,000, respectively, was paid in
consulting fees to shareholders and officers of the Company. Also during
1999 and 1998, $950 and $115,000, respectively, was received from related
companies and is considered a current liability with no provision for
interest. During 1998, $40,000 was loaned to a related company and is
considered a current asset with no provision for interest. These
receivables and payables were transferred in the subsidiary spin-off and no
asset or liability exists at December 31, 1999.
NOTE 6 - Spin Off Subsidiary
In March 1999, Royal Holdings Services, Ltd. (formerly North American
Security & Fire Acquisitions, Inc.) (the parent) and North American
Security & Fire, Inc. (the subsidiary) were reorganized, such that the
subsidiary acquired all the assets and business of the parent, and
subsequently spun-off and distributed ownership of its subsidiary to the
parent shareholders, share for share. The December 31, 1999 unconsolidated
financial statements include only the activity of the parent subsequent to
the spin off.
F-9
<PAGE> 22
PART III
ITEM 1. INDEX TO EXHIBITS.
2. Articles of Incorporation and by-laws
2.1 Articles of Incorporation
2.1.1. Articles of Incorporation of North American Security
& Fire, Inc., dated December 16, 1997, and filed with
the Secretary of State of the State of Nevada on
December 18, 1997.
2.1.2. Amendment to Articles of Incorporation of North
American Security & Fire, Inc., filed with the
Secretary of State of the State of Nevada on December
22, 1998.(1)
2.1.3. Amendment to Articles of Incorporation of North
American Security & Fire Acquisitions, Inc., filed
with the Secretary of State of the State of Nevada on
June 9, 1999.(1)
2.1.4. Amendment to Articles of Incorporation of Royal
Holdings Securities Ltd., filed with the Secretary of
State of the State of Nevada on June 14, 1999.
2.2 By-laws
2.2.1. First Amended and Re-stated By-laws of Royal Holdings
Services Limited, executed January 27, 2000.
3. Instruments defining the rights of security holders
None.
5. Voting trust agreements
None.
6. Material contracts
None.
7. Material foreign patents
None.
14. Consent to service on Form F-X
Not applicable.
15. Additional Exhibits
12
<PAGE> 23
15.1 Share Purchase Agreement among Gampadona Limited,
Opadale Portfolio, Inc., Boshof Holding, Inc., Sebira
Financial, Inc., Cumbrian Trading Limited, Rex
Lezard, Joel Dumaresq, Ajmal Khan, Jim Beadle,
Kristof Kossuth, John Devries, Kurt Dalmata, G. Brian
Longpre, North American Security & Fire Acquisitions,
Inc., and Intrepid International, S.A., dated June
18, 1999, as amended on June 29, 1999.(1)
15.2 Articles/Certificate of Share Exchange by which North
American Security & Fire Acquisitions, Inc. Shall
Exchange With North American Security & Fire, Inc.,
dated April 1, 1999.(1)
15.3 First Amendment to Plan of Reorganization and
Spin-off by which North American Security & Fire,
Inc. Shall Spin-Off North American Security & Fire,
Inc., dated December 22, 1998.(1)
15.4 Plan of Reorganization and Spin-Off by which North
American Security & Fire, Inc. Shall Spin-Off North
American Security & Fire, Inc., dated December 21,
1998.(1)
(1) Filed as an Exhibit to the Company's Current Report on Form 8-K dated
December 21, 1998.
13
<PAGE> 24
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROYAL HOLDINGS SERVICES LIMITED
By: /s/ AJMAL KHAN
--------------
Ajmal Khan
President
Dated: January 27, 2000
14
<PAGE> 25
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2. Articles of Incorporation and by-laws
2.1 Articles of Incorporation
2.1.1. Articles of Incorporation of North American Security
& Fire, Inc., dated December 16, 1997, and filed with
the Secretary of State of the State of Nevada on
December 18, 1997.
2.1.2. Amendment to Articles of Incorporation of North
American Security & Fire, Inc., filed with the
Secretary of State of the State of Nevada on December
22, 1998.(1)
2.1.3. Amendment to Articles of Incorporation of North
American Security & Fire Acquisitions, Inc., filed
with the Secretary of State of the State of Nevada on
June 9, 1999.(1)
2.1.4. Amendment to Articles of Incorporation of Royal
Holdings Securities Ltd., filed with the Secretary of
State of the State of Nevada on June 14, 1999.
2.2 By-laws
2.2.1. First Amended and Re-stated By-laws of Royal Holdings
Services Limited, executed January 27, 2000.
3. Instruments defining the rights of security holders
None.
5. Voting trust agreements
None.
6. Material contracts
None.
7. Material foreign patents
None.
14. Consent to service on Form F-X
Not applicable.
15. Additional Exhibits
</TABLE>
<PAGE> 26
<TABLE>
<S> <C>
15.1 Share Purchase Agreement among Gampadona Limited,
Opadale Portfolio, Inc., Boshof Holding, Inc., Sebira
Financial, Inc., Cumbrian Trading Limited, Rex
Lezard, Joel Dumaresq, Ajmal Khan, Jim Beadle,
Kristof Kossuth, John Devries, Kurt Dalmata, G. Brian
Longpre, North American Security & Fire Acquisitions,
Inc., and Intrepid International, S.A., dated June
18, 1999, as amended on June 29, 1999.(1)
15.2 Articles/Certificate of Share Exchange by which North
American Security & Fire Acquisitions, Inc. Shall
Exchange With North American Security & Fire, Inc.,
dated April 1, 1999.(1)
15.3 First Amendment to Plan of Reorganization and
Spin-off by which North American Security & Fire,
Inc. Shall Spin-Off North American Security & Fire,
Inc., dated December 22, 1998.(1)
15.4 Plan of Reorganization and Spin-Off by which North
American Security & Fire, Inc. Shall Spin-Off North
American Security & Fire, Inc., dated December 21,
1998.(1)
</TABLE>
(1) Filed as an Exhibit to the Company's Current Report on Form 8-K dated
December 21, 1998.
<PAGE> 1
EXHIBIT 2.1.1
ARTICLES OF INCORPORATION
[STAMP]
[STAMP] OF
NORTH AMERICAN SECURITY & FIRE, INC.
ARTICLE I. The name of the Corporation is North American Security &
Fire, Inc.
ARTICLE II. Its principal and registered office in the State of Nevada
is 774 Mays Boulevard #10, Incline Village NV 89451. The initial registered
agent for services of process at that address is N & R Limited Group, Inc. a
Nevada Corporation.
ARTICLE III. The purposes for which the corporation is organized are to
engage in any activity or business not in conflict with the laws of the State of
Nevada or of the United States of America. The period of existence of the
corporation shall be perpetual.
ARTICLE IV. The Corporation shall have authority to issue an aggregate
of Fifty Million (50,000,000) shares of common voting equity stock of par value
one mil ($0.001) per share, and no other class or classes of stock, for a total
capitalization of $50,000. The Corporation's capital stock may be sold from
time to time for such consideration as may be fixed by the Board of Directors,
provided that no consideration so fixed shall be less than par value.
ARTICLE V. No shareholder shall be entitled to any preemptive or
preferential rights to subscribe to any unissued stock or any other securities
which the corporation may now or hereafter be authorized to issue, nor shall any
shareholder possess cumulative voting rights at any shareholders meeting for the
purpose of electing Directors.
ARTICLE VI. The affairs of the corporation shall be governed by a Board
of Directors consisting of one to ten persons. The Initial Director of the
Corporation, whose name and address is J. Dan Sifford, Jr., 24843 Del Prado,
Suite 318, Dana Point, California 92629, to serve until the next regular meeting
of shareholders or until his successor is elected.
ARTICLE VII. The Capital Stock after the amount of the subscription price
or par value shall not be subject to assessment to pay the debts of the
corporation, and no stock issued as paid up shall ever be assessable or
assessed.
ARTICLE VIII. The initial By-laws of the corporation shall be adopted by
its Board of Directors. The power to alter, amend or repeal the By-laws, or
adopt new By-laws, shall be vested in the Board of Directors, except as
otherwise may be specifically provided in the By-laws.
ARTICLE IX. The name and address of the incorporator of the corporation
is J. Dan Sifford, Jr., 24843 Del Prado Suite 318, Dana Point, California
92629.
<PAGE> 2
I THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a Corporation pursuant the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have set my hand hereunto this Day, December 16, 1997.
/s/ J. DAN SIFFORD JR.
--------------------------------------
J. Dan Sifford Jr.
INCORPORATOR
<PAGE> 1
EXHIBIT 2.1.4
[SECRETARY OF
STATE STAMP] AMENDMENT TO ARTICLES OF INCORPORATION
OF
ROYAL HOLDINGS SECURITIES LTD.
(AFTER PAYMENT OF CAPITAL AND ISSUANCE OF STOCK)
We the Undersigned, Officers of Royal Holdings Securities Ltd. ("the
Corporation") hereby certify:
The Board of Directors of the Corporation at a meeting of duly convened
and held on June 11, 1999 adopted a resolution to amend the Articles of
Incorporation as Originally filed and/or amended.
The former Article One read:
ARTICLE ONE. THE NAME OF THE CORPORATION IS ROYAL HOLDINGS SECURITIES LTD.
Article One is superseded and replaced as follows:
ARTICLE ONE. THE NAME OF THE CORPORATION IS ROYAL HOLDINGS SERVICES LTD.
The number of shares of the Corporation outstanding and entitled to vote
on an amendment to the Articles of Incorporation is 11,661,628; and the
foregoing changes and amendment have been consented to and approved by a
majority vote of the stockholders holding at least a majority of each class of
stock outstanding and entitled to vote thereon, namely 8,116,628 affirmative
votes, or 69.6%.
/s/ KIRT W. JAMES /s/ J. DAN SIFFORD
- --------------------------------- ---------------------------------
Kirt W. James J. Dan Sifford
PRESIDENT AND SECRETARY CHAIRMAN AND TREASURER
========================================================================
State of California Subscribed and sworn (or affirmed) to
County of Orange before me this 11th day of June
---- ----
1999, by
--
[SEAL] /s/ SHARON BRADSHAW
--------------------------
<PAGE> 1
EXHIBIT 2.2.1
FIRST AMENDED AND RESTATED BYLAWS
OF
ROYAL HOLDINGS SERVICES LIMITED
A NEVADA CORPORATION
ARTICLE I
CORPORATE OFFICES
The principal office of the Corporation shall be located at 22 Old
Queen Street, London, SW1H 9HW, United Kingdom. The Corporation may have such
other offices, either within or without the State of Incorporation as the board
of directors may designate or as the business of the Corporation may from time
to time require.
The registered office of the Corporation shall be established and
maintained at The Corporation Trust Company of Nevada, 6100 Neil Road, Suite
500, Reno, Nevada 89520 and The Corporation Trust Company of Nevada, shall be
the registered agent of this Corporation in charge thereof.
ARTICLE II
SHAREHOLDERS' MEETINGS
SECTION 1. PLACE OF MEETINGS.
The directors may designate any place, either within or without the
State unless otherwise prescribed by statute, as the place of meeting for any
annual meeting or for any special meeting called by the directors. A waiver of
notice signed by all stockholders entitled to vote at a meeting may designate
any place, either within or without the State unless otherwise prescribed by
statute, as the place for holding such meeting. If no designation is made, or if
a special meeting be otherwise called, the place of meeting shall be the
principal office of the Corporation.
SECTION 2. ANNUAL MEETINGS.
The time and date for the annual meeting of the shareholders shall be
set by the Board of Directors of the Corporation, at which time the shareholders
shall elect a Board of Directors and transact any other proper business. Unless
the Board of Directors shall determine otherwise, the annual meeting of the
shareholders shall be held on the second Monday of March in each year, if not a
holiday, at ten o'clock a.m., at which time the shareholders shall elect a Board
of Directors and transact any other proper business. If this date falls on a
holiday, then the meeting shall be held on the following business day at the
same hour.
<PAGE> 2
ROYAL HOLDINGS SERVICES LIMITED
FIRST AMENDED AND RESTATED BYLAWS
PAGE 2
SECTION 3. SPECIAL MEETINGS.
Special meetings of the shareholders may be called by the President,
the Board of Directors, by the holders of at least a majority of all the shares
entitled to vote at the proposed special meeting, or such other person or
persons as may be authorized in the Articles of Incorporation.
SECTION 4. NOTICES OF MEETINGS.
Written or printed notice stating the place, day and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten (10) days nor more
than sixty (60) days before the date of the meeting, either personally or by
mail, by the direction of the President, or Secretary, or the officer or persons
calling the meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder at his address
as it appears on the stock transfer books of the Corporation, with postage
thereon prepaid.
Closing of Transfer Books or Fixing Record Date.
(a) For the purpose of determining shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment thereof, or
shareholders entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the directors of the
Corporation may provide that the stock transfer books shall be closed for a
stated period not to exceed twenty (20) days. If the stock transfer books be
closed for the purpose of determining shareholders entitled to notice or to vote
at a meeting of shareholders, such books shall be closed for at least twenty
(20) days immediately preceding such meeting.
(b) In lieu of closing the stock transfer books, the directors may
prescribe a day not more than sixty (60) days before the holding of any such
meeting as the day as at which shareholders entitled to notice of the and to
vote at such meeting must be determined. Only shareholders of record on that day
are entitled to notice or to vote at such meeting.
(c) The directors may adopt a resolution prescribing a date upon which
the shareholders of record are entitled to give written consent to actions in
lieu of meeting. The date prescribed by the directors may not precede nor be
more than ten (10) days after the date the resolution is adopted by directors.
SECTION 5. VOTING LIST.
The officer or agent having charge of the stock transfer books for the
shares of the Corporation shall make, at least ten (10) days before each meeting
of shareholders, a complete list of shareholders entitled to vote at such
meeting, or any adjournment thereof, arranged in alphabetical order, with the
address of and number of shares held by each, which list, for a period of ten
(10) days
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prior to such meeting, shall be kept on file at the principal office of the
Corporation and shall be subject to inspection by any shareholder at any time
during usual business hours. Such list shall also be produced and kept open at
the time and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting. The original stock transfer
book shall be prima facie evidence as to who are the shareholders entitled to
examine such list or transfer books or to vote at the meeting of shareholders.
SECTION 6. QUORUM.
At any meeting of shareholders, a majority of fifty percent plus one
vote, of the outstanding shares of the Corporation entitled to vote, represented
in person or by proxy, shall constitute a quorum at a meeting of shareholders.
If less than said number of the outstanding shares are represented at a meeting,
a majority of the outstanding shares so represented may adjourn the meeting from
time to time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting originally notified. The shareholders present at
a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
SECTION 7. PROXIES.
At all meetings of the shareholders, a shareholder may vote by proxy
executed in writing by the shareholder or by his duly authorized attorney in
fact. Such proxy shall be filed with the Secretary of the Corporation before or
at the time of the meeting. Such proxies may be deposited by electronic
transmission.
SECTION 8. VOTING.
Each shareholder entitled to vote in accordance with the terms and
provisions of the Articles of Incorporation and these By-Laws shall be entitled
to one vote, in person or by proxy, for each share of stock entitled to vote
held by such shareholder. Upon the demand of any shareholder, the vote for
directors and upon any question before the meeting shall be by ballot. All
elections for directors shall be decided by plurality vote; all other questions
shall be decided by majority vote except as otherwise provided by the
Certificate of Incorporation or the laws of Nevada.
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SECTION 9. ORDER OF BUSINESS.
The order of business at all meetings of the shareholders, shall be as
follows:
(a) Roll Call.
(b) Proof of notice of meeting or waiver of notice.
(c) Reading of minutes of preceding meeting.
(d) Reports of Officers.
(e) Reports of Committees.
(f) Election of Directors.
(g) Unfinished Business.
(h) New Business.
SECTION 10. INFORMAL ACTION BY SHAREHOLDERS.
Unless otherwise provided by law, any action required to be taken, or
any other action which may be taken, at a meeting of the shareholders, may be
taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to vote with respect
to the subject matter thereof. Unless otherwise provided by law, any action
required to be taken, or any other action which may be taken, at a meeting of
the shareholders, may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by a majority of all of the
shareholders entitled to vote with respect to the subject matter thereof at any
regular meeting called on notice, and if written notice to all shareholders is
promptly given of all action so taken.
SECTION 11. BOOKS AND RECORDS.
The Books, Accounts and Records of the Corporation, except as may be
otherwise required by the laws of the State of Nevada, may be kept outside of
the State of Nevada, at such place or places as the Board of Directors may from
time to time appoint. The Board of Directors shall determine whether and to what
extent the accounts and the books of the Corporation, or any of them, other than
the stock ledgers, shall be open to the inspection of the shareholders, and no
shareholder shall have any right to inspect any account or book or document of
this Corporation, except as conferred by law or by resolution of the
shareholders or directors. In the event such right of inspection is granted to
the Shareholder(s) all fees associated with such inspection shall be the sole
expense of the Shareholder(s) demanding the inspection. No book, account, or
record of the Corporation may be inspected without the legal counsel and the
accountants of the Corporation being present. The fees charged by legal counsel
and accountants to attend such inspections shall be paid for by the
Shareholder(s) demanding the inspection.
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ARTICLE III
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS.
The business and affairs of the Corporation shall be managed by its
Board of Directors. The directors shall in all cases act as a board, and they
may adopt such rules and regulations for the conduct of their meetings and the
management of the Corporation, as they may deem proper, not inconsistent with
these By-Laws and the laws of this State.
SECTION 2. NUMBER, TENURE, AND QUALIFICATIONS.
The number of directors of the Corporation shall be a minimum of one
(1) and a maximum of nine (9), or such other number as may be provided in the
Articles of Incorporation, or amendment thereof. Each director shall hold office
until the next annual meeting of shareholders and until his successor shall have
been elected and qualified.
SECTION 3. EXECUTIVE AND OTHER COMMITTEES.
The Board may, by unanimous resolution, designate one or more
committees, each committee to consist of one or more of the Directors of the
Corporation. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of any member or
such committee or committees, the member or members thereof present at any such
meeting and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of Directors,
or in these By-Laws, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; but no such committee shall have the power of
authority in reference to amending the Articles of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the Corporation's property and
assets, recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the By-Laws of the Corporation; and
unless the resolution, these By-Laws, or the Articles of Incorporation expressly
so provide, no such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock.
SECTION 4. REGULAR MEETINGS.
A regular meeting of the directors, shall be held without other notice
than this By-Law immediately after, and at the same place as, the annual meeting
of shareholders. The directors may provide, by resolution, the time and place
for holding of additional regular meetings without other notice than such
resolution.
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SECTION 5. SPECIAL MEETINGS.
Special meetings of the directors or a committee may be called by or at
the request of the President or any two directors. The person or persons
authorized to call special meetings of the directors may fix the place for
holding any special meeting of the directors called by them.
SECTION 6. NOTICE.
Notice of any special meeting or committee meeting shall be given at
least one day previously thereto by written notice delivered personally, or by
telegram or mailed to each director at his business address. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
so addressed, with postage thereon prepaid. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
SECTION 7. QUORUM.
At any meeting of the directors fifty percent (50%) shall constitute a
quorum for the transaction of business, but if less than said number is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time without further notice.
SECTION 8. MANNER OF ACTING.
The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the directors.
SECTION 9. ACTION WITHOUT MEETING.
Any action required or permitted to be taken at a meeting of the Board
of Directors or of a committee thereof may be taken without a meeting if, before
or after the action, a written consent thereto is signed by all the members of
the Board, or of such committee as the case may be, and such written consent is
filed with the minutes of proceedings of the Board or committee.
SECTION 10. MEETINGS BY TELEPHONE CONFERENCE.
Members of the Board of Directors or of a committee thereof may
participate in a meeting of the Board or committee by means of a telephone
conference or similar method of communication by which all persons participating
in the meeting can hear each other. Participation in a meeting pursuant to this
Section 10 constitutes presence in person at the meeting.
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SECTION 11. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the removal
of directors without cause may be filled by a vote of the majority of the
directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without cause shall be filled by
vote of the shareholders. A director elected to fill a vacancy caused by
resignation, death or removal shall be elected to hold office for the unexpired
term of his predecessor.
SECTION 12. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the
shareholders or by action of the board. Directors may be removed without cause
only by vote of the shareholders.
SECTION 13. RESIGNATION.
A director may resign at any time by giving written notice to the
board, the President or the Secretary of the Corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt thereof
by the board or such officer, and the acceptance of the resignation shall not be
necessary to make it effective.
SECTION 14. COMPENSATION.
No compensation shall be paid to directors, as such, for their
services, but by resolution of the board a fixed sum and expenses for actual
attendance at each regular or special meeting of the board may be authorized.
Nothing herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER.
The officers of the Corporation shall be the President, a Secretary and
a Treasurer, each of whom shall be elected by the directors. Such other officers
and assistant officers as may be deemed necessary may be elected or appointed by
the directors.
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SECTION 2. ELECTION AND TERM OF OFFICE.
The officers of the Corporation to be elected by the directors shall be
elected annually at the first meeting of the directors held after each annual
meeting of the shareholders. Each officer shall hold office until his successor
shall have been duly elected and shall have qualified or until his death or
until he shall resign or shall have been removed in the manner hereinafter
provided. In the event that no election of officers be held by the directors at
that time, the existing officers shall be deemed to have been confirmed in
office by the directors.
SECTION 3. REMOVAL.
Any officer or agent elected or appointed by the directors may be
removed by the directors whenever in their judgement the best interest of the
Corporation would be served thereby, but such removal shall be without prejudice
to contract rights, if any, of the person so removed.
SECTION 4. VACANCIES.
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the directors for the unexpired
portion of the term.
SECTION 5. PRESIDENT.
The President shall be the principal executive officer of the
Corporation and, subject to the control of the directors, shall in general
supervise and control all of the business and affairs of the Corporation. He
shall, when present, preside at all meetings of the shareholders and of the
directors. He may sign, with the secretary or any other proper officer of the
Corporation thereunto authorized by the directors, certificates for shares of
the Corporation, any deeds, mortgages, bonds, contracts, or other instruments
which the directors have authorized to be executed, except in cases where the
directors or by these By-Laws to some other officer or agent of the Corporation,
or shall be required by law to be otherwise signed or executed; and in general
shall perform all duties incident to the officer of President an such other
duties as may be prescribed by the directors from time to time.
SECTION 6. CHAIRMAN OF THE BOARD.
In the absence of the President or in the event of his death, inability
or refusal to act, the chairman of the board of directors shall perform the
duties of the President, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. The chairman of the board of
directors shall perform such other duties as from time to time may be assigned
to him by the directors.
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SECTION 7. SECRETARY.
The Secretary shall keep the minutes of the shareholders' and of the
directors' meetings in one or more books provided for that purpose, see that all
notices are duly given in accordance with the provisions of these By-Laws or as
required, be custodian of the corporate records and of the seal of the
Corporation and keep a register of the post office address of each shareholder
which shall be furnished to the Secretary by such shareholder, have general
charge of the stock transfer books of the Corporation and, in general, perform
all the duties incident to the office of Secretary and such other duties as from
time to time may be assigned to him by the President or by the directors.
SECTION 8. TREASURER.
If required by the directors, the Treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such surety or sureties as
the directors shall determine. He shall have charge and custody of and be
responsible for all funds and securities of the Corporation; receive and give
receipts for moneys due and payable to the Corporation from any source
whatsoever, and deposit all such moneys in the name of the Corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with these By-Laws and in general perform all of the duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
to him by the President or by the directors.
SECTION 9. SALARIES.
The salaries of the officers shall be fixed from time to time by the
directors and no officer shall be prevented from receiving such salary by reason
of fact that he is also a director of the Corporation.
SECTION 10. RESIGNATION.
An officer may resign at any time by giving written notice to the Board
of Directors of the Corporation. Unless otherwise specified in the notice, the
resignation shall take effect upon receipt thereof by the board, and the
acceptance of the resignation shall not be necessary to make it effective.
ARTICLE V
MISCELLANEOUS
SECTION 1. CONTRACTS.
The directors may authorize any officer or officers, agent or agents to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the Corporation, and such authority may be general or confined to
specific instances.
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SECTION 2. LOANS.
No loans shall be contracted on behalf of the Corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the directors. Such authority may be general or confined to
specific instances.
SECTION 3. CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the Corporation, shall be
signed by such officer or officers, agent or agents of the Corporation and in
such manner as shall from time to time be determined by resolution of the
directors.
SECTION 4. DEPOSITS.
All funds of the Corporation not otherwise employed shall be deposited
from time to time to the credit of the Corporation in such banks, trust
companies or other depositories as the directors may select.
SECTION 5. CERTIFICATES OF STOCK.
A certificate of stock, signed by the President and the Secretary,
shall be issued to each stockholder certifying the number of shares owned by him
in the corporation. When such certificates are countersigned (1) by a transfer
agent other than the corporation or its employee, or, (2) by a registrar other
than the corporation or its employee, the signatures of such officers may be
facsimiles.
SECTION 6. LOST CERTIFICATES.
A new certificate of stock may be issued in the place of any
certificate theretofore issued by the corporation, alleged to have been lost or
destroyed, and the directors may, in their discretion, require the owner of the
lost or destroyed certificate, or his legal representatives, to give the
corporation a bond, in such sum as they may direct, not exceeding double the
value of the stock, to indemnify the corporation against any claim that may be
made against it on account of the alleged loss of any such certificate, or the
issuance of any such new certificate.
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SECTION 7. TRANSFER OF SHARES.
The shares of stock of the corporation shall be transferrable only upon
its books by the holders thereof in person or by their duly authorized attorneys
or legal representatives, and upon such transfer the old certificate shall be
surrendered to the corporation by the delivery thereof to the person in charge
of the stock and transfer books and ledgers, or to such other person as the
directors may designate, by whom they shall be canceled, and new certificates
shall thereupon be issued. A record shall be made of each transfer and whenever
a transfer shall be made for collateral security, and not absolutely, it shall
be so expressed in the entry of the transfer.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Corporation shall begin on the 1st day of
January in each year, or on such other day as the Board of Directors shall fix.
ARTICLE VII
DIVIDENDS
The directors may, from time to time, declare, and the Corporation may
pay, dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE VIII
SEAL
The directors may provide a corporate seal which shall have inscribed
thereon the name of the Corporation, the state of incorporation, year of
incorporation and the words, "Corporate Seal."
ARTICLE IX
WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any shareholder or director of the Corporation under the provisions of
these By-Laws or under the provisions of the Articles of Incorporation, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
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ARTICLE X
AMENDMENTS
These By-Laws may be altered, amended or repealed and new By-Laws may
be adopted in the same manner as their adoption, by the Board of Directors if so
adopted, by a vote of the shareholders representing a majority of all the shares
issued and outstanding, if so adopted or adopted by the Board of Directors; or,
in any case, at any annual shareholders' meeting or at any special shareholders'
meeting when the proposed amendment has been set out in the notice of such
meeting.
ARTICLE XI
INDEMNIFICATION
No director shall be liable to the corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as a director,
except with respect to (1) a breach of the director's duty of loyalty to the
corporation or its stockholders, (2) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3)
liability which may be specifically defined by law or (4) a transaction from
which the director derived an improper personal benefit, it being the intention
of the foregoing provision to eliminate the liability of the corporation's
directors to the corporation or its stockholders to the fullest extent permitted
by law. The corporation shall indemnify to the fullest extent permitted by law
each person that such law grants the corporation the power to indemnify.
CERTIFICATION
The Secretary of the Corporation hereby certifies that the foregoing is
a true and correct copy of the By-Laws of the Corporation named in the title
thereto and that such By-Laws were duly adopted by the Board of Directors of
said Corporation on the date set forth below.
Executed, January 27, 2000.
/s/ Ajmal Khan
-----------------------------
Ajmal Khan, Secretary
