SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
CARMINA TECHNOLOGIES INC.
(Exact name of Registrant as specified in its charter)
Utah
(Jurisdiction of incorporation or organization)
810, 540 5th Ave. SW, Calgary, Alberta, Canada T2P 0M2
(Address of principal executive offices)
(403) 269-5369
(Registrant's telephone number)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which class
to be so registered is to be registered
- ------------------- ---------------------
N/A N/A
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
--------------------------
Title of Class
Carmina Technologies Inc.
Form 10-SB Submission
27/03/00
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The discussion throughout this registration statement contains certain
forward-looking statements which involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any future results,
performances or achievements expressed or implied by such forward looking
statements. Such factors include, among other things, the uncertainty as to the
Company's future profitability; the uncertainty as to the demand for the
Company's products; industry trends towards Internet gateway systems; increasing
competition in Internet gateway systems; the ability to hire, train and retain
sufficient qualified personnel; the ability to obtain financing on acceptable
terms to finance the Company's growth strategy; the ability to develop and
implement operational and financial systems to manage the Company's growth; and
other factors referenced in this registration statement.
DOCUMENTS INCORPORATED BY REFERENCE: See the Exhibit Index herein.
Item 101. Description of Business.
Business Development.
The Company was incorporated under the laws of the State of Utah on March
5, 1973, as Investors Equity Inc. On or about February 24, 1984, the Company's
outstanding common stock had a 4 for 1 reverse split and on or about October 15,
1991, the Company's outstanding common stock had a 5 for 1 reverse split, and
the Company was renamed "The Americas Mining Corporation", under which name it
operated until January 24, 2000. At that time, pursuant to resolution of the
Board of Directors and subsequent action by the shareholders acting upon written
consent of not less than a majority of the Company's outstanding shares under
Section 16-10a-704 of the Utah Revised Business Corporation Act , the Company
changed its name to "Carmina Technologies Inc." and increased the authorized
share capital to 50,000,000 shares, including 10,000,000 preferred shares and
40,000,000 common shares. Contemporaneous with such action, the Company was
authorized and directed to organize a subsidiary corporation under Utah law and
to proceed with a partial liquidating dividend of shares, provided the Company
received a legal opinion satisfactory to the Secretary that the Company could
legally do so.
Present management of the Issuer are not aware of what business activities
the Issuer might have been engaged in during the interim following its
incorporation and through the early 1980's. In the early 1980's, the Issuer
became engaged in the business (to at least a limited extent) of acquiring
various natural resource properties (principally mineral properties located in
Canada and Oregon). The Issuer carried on such activities into its fiscal year
1999. During that
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year, however, management determined for various reasons (including several
years of depressed mineral prices and adverse developments in the mining
industry in the U.S.) that the Issuer would (and it did) transfer all of its
mineral property interests to a wholly owned subsidiary, issue the subsidiary's
shares to the Issuer's shareholders in the form of a dividend, and thereafter
attempt to seek out new business opportunities in the technology sector. In
furtherance of the latter determination, the Company acquired Rhonda Networks
Inc. (sometimes referred to hereafter as "RNI"). The acquisition of RNI was made
through a stock for stock purchase exchange, thereby making RNI a wholly owned
subsidiary of Issuer. See the caption "Market Information", below.
Business of the Company.
With the acquisition of Rhonda Networks Inc., the Issuer commenced carrying
on the development and marketing of that company's GateCommander 2000 (GC 2000)
server appliance. As evidenced from the above, this is an entirely new business
endeavor for the Company, taking the Company from the mining industry into the
field of technology. See the captions, "Business Development" and "Principal
Products and Services".
Principal Products and Services; Distribution Methods; etc.
At the present time the Issuer's principal product is a new product under
development called the GateCommander 2000, a Linux based server appliance which,
when fully developed, will provide an all-in-one solution for managing and
controlling secure Internet access for business and home. Designed for home and
small business, the GateCommander 2000 will combine firewall, virtual private
networking, voice over Internet protocol, network and system monitoring, E-mail
and domain name services, paging and fax, dynamic web services and other
user-specific options, all within a Linux environment. In addition to these
standard features, the GateCommander 2000 'smart home' server, also under
development, will include 'smart home' applications, including security
monitoring and remote controls of thermostat, lighting and other appliances. The
GC2000, together with a suite of remote services that customers may opt for to
provide more effective use of the GC2000, will initially be the principal
products and services of the Issuer. (See also the caption "Support Services".)
The technology platform of the GC2000 consists of equipment, software and
communications services integrated into a packaged product that requires minimal
configuration and customization when installed in its base form. Once installed,
the GC2000 can be expanded to serve additional customer needs through optional
pre-packaged components or through remote services which will be provided by the
Carmina Technologies service center, currently being set up.
The equipment components of the GC2000 include communications devices,
modems and hubs that connect to the external network providers (telephone,
wireless, satellite and Internet providers) and connect to the client internal
network. The connection from the GC2000
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will normally be an Ethernet connection to the external network supplier
supporting Transmission Control Protocol/Internet Protocol (TCP/IP). The GC2000
is based on a personal computer architecture with a Linux operating system and
commonly available network tools supplemented by proprietary software and
services provided by RNI.
The GC2000's intended basic purpose is to control the information flowing
between the exterior and interior networks passing in and out through it. It
will be responsible for matching and/or packing/unpacking communication
protocols between the connected external and internal networks as well as the
security filtering to prevent unwanted traffic from passing through in either
direction. It will also be a server for resources that straddle between the
interior and exterior such as an electronic mail gateway, WAN access (wide area
network connections to other offices or related parties), file and document
transfer, world wide web (WWW) services and Domain Name Services (DNS).
Definitional Features of the GateCommander 2000:
Firewall/Gateway - Prevents unauthorized Internet users from
accessing private Networks connected to the Internet, especially
Intranets. All messages entering or leaving the Intranet pass through
the firewall, which examines each message and blocks those that do not
meet the specified security criteria.
Virtual Private Network (VPN) - Enables users to create networks
using the Internet as the medium for transporting data. These systems
use encryption and other security mechanisms to ensure that only
authorized users can access the network and that the data cannot be
intercepted, analyzed and tampered with.
Network and System Monitoring - A SMART (Self-Monitoring,
Analysis and Reporting Technology) agent will electronically
accumulate data and monitor status of equipment, network connections,
servers, applications and workstations, and report potential problems.
Ideally, this should allow use of proactive actions to prevent
impending system failures. The SMART agent can be an integral part of
a larger SNMP monitoring and management system providing more
aggressive polling without incurring increased traffic volumes through
the network.
E-mail and Domain Name Services - Can act as the mail gateway
Simple Mail Transfer Protocol (SMTP) and Post Office Protocol (POP)
and Domain Name Server (DNS) for the corporate Local Area Network
(LAN) enabling users to become self-sufficient (create/administer
local E-mail addresses). Acts as a bridge between internal and
external E-mail. Can locally control aliases to IP addresses.
Paging Services - Text paging services can be provided to the
corporate LAN allowing users to send alphanumeric messages from
applications or programmatically.
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Fax Services - Fax services (send/receive) with notification and
possible routing can be provided to the corporate LAN.
Support Services - The Issuer intends to offer a suite of remote
services that customers may opt for to provide more effective use of
the GC2000 as well as provide facilities that would be required by
businesses relying on the Internet for communications. These services
are priced according to desired options under a service contract.
Optional Definitional Features of the GC2000
Voice Over Internet Protocol (VOIP) - Provides real-time, toll
quality voice and fax communication over the existing IP data network
or the Internet without incurring long distance charges. Requires
matching VOIP equipment at each location. These units can be deployed
to provide tie lines, subject to telephone regulation, allowing users
to place local calls through each remote installation.
Video Conferencing - Takes advantage of the high speed and
performance of the cable modem/xDSL Internet access using IP based
video conference products.
Dynamic Web Servers - Houses and controls the web server and web
site within the corporate LAN. Makes it easier for businesses to
connect to databases and internal applications while offering tighter
control over proprietary information and systems without relying on
Internet Service Providers (ISPs) for services and responsiveness to
corporate needs.
Security Alarm Monitoring - Monitors switches, motion detectors,
smoke an heat sensors of a security system through a computer.
Monitors other equipment, which requires full-time critical operation
(i.e. freezer temperatures) for early warning of problems developing
rather than solely reporting after total failure.
Security Camera Monitoring - Uses the high speed Internet for
remote access to control and/or pipe security camera feeds to local
monitoring or recording stations.
The Issuer's development program is currently nearing completion
of design work on the first commercial version of the GC2000. This
unit, with dimensions of approximately twelve inches by six and
one-quarter inches by four and one-half inches, will be test marketed
for "smart home" and small business applications.
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Distribution Methods
The GC2000 has been designed to provide bundled complex network
capabilities to smaller networks with no need for Information Technology (IT)
specialists. Management is focusing on three target markets: (a) households with
two or more computers; (b) small to medium-sized businesses; and (c) large
corporations networking with external employees. Initially the Issuer will sell
to consumers via telco, cable, builder and ISPs, with a goal to quickly gain
mass acceptance of the GC2000 and to establish partners such as resellers,
systems integrators, retailers, etc., to rapidly establish a known presence
around the world. It is also intended to secure the services of an established
distribution company to serve as a source of warehousing and banking for such
initial tier selling partners.
Additionally, upon establishing business and consumer references, the
Issuer will be submitting the GC2000 technology to popular industry product
reviewers with the intention of earning and winning product awards based on
design and performance features. Eventually, the Issuer plans to distribute
product and services as, or through, a full-service Application Service Provider
(ASP) for clients who would prefer to rent, rather than buy, the GC2000 and
other new products and services.
Status of Publicly Announced New Products and Services
Issuer has announced the development of GC2000 via Issuer's Internet web
site (www.carminatech.com/), launched February 29, 2000. The site provides the
reader with information regarding the uses and capabilities of the GC2000, as
well as background information on Issuer and its director of technology, among
other things. As referenced previously [see caption, "Principal Products and
Services", above], the GC2000 is under development and basically in its final
design and development stage. Similarly, Issuer's relationship with the Harris
Corp. as a reseller of that company's "Net Simple" Simple Network Management
Protocol (SNMP) mediation product is in its formation stage. Issuer believes
that the relationship will assist Issuer in reaching a target market for the
GC2000 in such areas as telemetry and Supervisory Control and Data Acquisition
(SCADA).
Competitive Business Conditions, etc.
Corporate file server and networking solutions currently require a great
deal of expertise and investment which put them out of range for most
individuals and smaller businesses. Several low end and "do-it-yourself"
products already exist in the marketplace, however. Such products are typically
offered as a feature of another product, such as Windows 98, adding a minimal
routing capability allowing a second PC to share an Internet access, or provide
software and instructions for the components included in the GC2000, some with
minimal cost, some as public domain software. The GC2000 includes the best
public domain software products provided at no cost, in keeping with
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the public domain licensing. Hence, far from competing with vendors such as
Novell, Microsoft, Intel and IBM, the Issuer's technology is in fact compatible
with these systems.
The competitive value provided in the GC2000 is the pre-installation,
pre-configuration and integration of the components into a comprehensive package
supplemented with proprietary software and methods. While many competitors
restrict their developments to marketing of the hardware, the Issuer will also
focus on providing the convenience of an Application Service Provider (ASP)
relationship with clients. Unlike competing products, the GC2000 already has
integrated VOIP capabilities, greater monitoring abilities and is more adaptable
to other applications, including ASP functions through purchases of, and
alliances with, software developers, as well as smart home technology.
Current major competitors include several companies providing components or
integrated components at approximately twice the offering retail price projected
for GC2000, as well as at least one who provides product at roughly the
equivalent planned retail price.
There is no reasonable way to predict the competitive position of the
Company or any other entity in the these endeavors; however, the Company, having
virtually no assets or cash reserves, will no doubt be at a competitive
disadvantage in competing with entities which have recently completed Initial
Public Offerings (IPOs), have significant cash resources and have operating
histories when compared with the complete lack of any substantive operations by
the Company.
Sources and availability of raw materials and names of principal suppliers
The GC2000 incorporates and/or integrates components and software from
numerous principal suppliers, including Multi-Tech Systems, Pelco, Sony, Intel,
X10.com, Inc., as well as from the public domain. Major components include:
VOIP, surveillance cameras, Linux operating system, motherboard and Central
Processing Unit (CPU), and home control modules provided by various suppliers.
Dependence on major customers
Since the product is in final development stage, there are no major
customers at present.
Patents, trademarks, licenses, franchises, concessions, royalty agreements or
labor contracts
There are no patents, licenses, franchises or concessions. Trademark status
has been applied for for the names GateCommander and GC2000.
Need for government approval of principal products and services
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No government approval is needed for the Issuer's major products and
services aside from the normal appliance safety approvals. Since the products
are assembled from previously approved components, licensing is not a
significant factor.
Effect of existing or probable governmental regulations on business
Government regulation of the Issuer's products is not anticipated. Since
the Company was initially incorporated, federal and state securities laws, rules
and regulations have made the participation in or the conducting of an IPO
substantially easier for certain small and developmental stage companies,
reducing the time constraints previously involved, the legal and accounting
costs and the financial periods required to be included in the financial
statements. Rule 504 of Regulation D of the Securities and Exchange Commission
no longer requires the filing of a Registration Statement with any state or
territory as a condition to its use. Rule 504 is also not available to
"reporting issuers," which the Company will become on the effectiveness of this
Registration Statement.
The integrated disclosure system for small business issuers adopted by the
Securities and Exchange Commission in Release No. 34-30968 and effective as of
August 13, 1992, substantially modified the information and financial
requirements of a "Small Business Issuer," defined to be an issuer that has
revenues of less than $25 million; is a U.S. or Canadian issuer; is not an
investment company; and if a majority owned subsidiary, the parent is also a
small business issuer; provided, however, an entity is not a small business
issuer if it has a public float (the aggregate market value of the issuer's
outstanding voting and non-voting common equity held by non-affiliates) of $25
million or more.
A number of state securities commissions have adopted the use of Form U-7
for SCOR, which also substantially simplifies the registration process for IPOs;
Form U-7 is primarily used in connection with offerings conducted pursuant to
Rule 504 of the Securities and Exchange Commission, but is not limited to this
use.
Research and Development
Issuer's research and development activities in the technology field have
begun only since acquisition of Rhonda Networks, Inc., although RNI has been
involved with such since its inception in May, 1999. Since that time, the Issuer
and RNI have invested approximately $300,000.00 on these activities, inclusive
of consulting and management fees. Prior to that time, there were little or no
research and development expenses to management's knowledge unless the costs
attributable to assignment of various mining claims in January, 1999 are viewed
as research and development under Issuer's predecessor company. (See the caption
"Recent Sales of Unregistered Securities" below and Exhibit 1, "Consolidated
Financial Statements for December 31, 1999".)
Costs and effects of compliance with environmental laws
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None; not applicable.
Number of Employees
The design and manufacture of the Issuer's products are and will continue
to be subcontracted. Employees currently total 5.
Reports to security holders
The Issuer is not currently required to deliver annual reports to
security holders but does, and will continue to, voluntarily send an annual
report including audited financial statements. The Issuer has not in the past
filed reports with the Securities and Exchange Commission. The public may read
and copy any materials the Issuer files with the SEC at SEC's Public Reference
Room at 450 Fifth Street, NW, Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet Site that contains reports, proxy
and information statements, and other information regarding issuers that file
electronically with the SEC at http:/www.sec.gov. The Issuer's Internet address
is http:/www.carminatech.com.
Item 102. Description of Property.
At the present time, the Issuer has no real or personal property. The
offices from which it operates are paid for and maintained by Rhonda Mining
Corporation, a Canadian corporation which is a controlling shareholder of the
Issuer.
Item 103. Legal Proceedings.
The Company is not a party to any pending legal proceeding. To management's
knowledge, no federal, state or local governmental agency is presently
contemplating any proceeding against the Company. No director, executive officer
or affiliate of the Company or owner of record or beneficially of more than five
percent of the Company's common stock is a party adverse to the Company or has a
material interest adverse to the Company in any proceeding.
Item 201. Market for Company's Common Equity and Related Stockholder Matters.
Market Information.
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There has never been any established "public market" for shares of common
stock of the Company. The Company's Directors understand, however, that one or
more broker dealers were publishing quotations on the predecessor company shares
as recently as late 1996, but the Directors have no knowledge as to whether any
trading market in realistic terms existed for such shares. The Company intends
to submit for listing on the National Association of Securities Dealers, Inc.
(the "NASD") Bulletin Board. In any event, no assurance can be given that any
market for the Company's common stock will develop or be maintained. If a public
market ever develops in the future, the sale of "unregistered" and "restricted"
shares of common stock pursuant to Rule 144 of the Securities and Exchange
Commission by members of management or others may have a substantial adverse
impact on any such public market.
There are 1,890,000 options to purchase authorized securities of the
Company inclusive of the 840,000 options exercisable by management. See the
caption "Executive Compensation" of this Registration Statement.
The sales of an aggregate of 18,400,000 "unregistered" and "restricted"
shares of common stock for deemed consideration for assignment of certain mining
claims (2,400,000) and in exchange for shares of Rhonda Networks
Inc.(16,000,000), were the only sales of any securities of the Company during
the past three years. See the caption "Recent Sales of Unregistered Securities"
of this Registration Statement.
Holders.
The number of record holders of the Company's securities as of the date of
this Registration Statement is approximately 400.
Dividends.
The Company has not declared any cash dividends in the last two fiscal
years with respect to its common stock and does not intend to declare dividends
in the foreseeable future. The future dividend policy of the Company cannot be
ascertained with any certainty, and if and until the Company has sales of
products and services and achieves a profit, no such policy will be formulated.
Aside from the fact that the Company's principal product is in final development
and to date has no sales, as further discussed under the caption "Business of
the Company" above, there are no material restrictions limiting, or that are
likely to limit, the Company's ability to pay dividends on its profits when and
if they are achieved.
Item 202. Description of Securities.
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The Company has two classes of securities authorized, consisting of
10,000,000 shares of no par value preferred stock and 40,000,000 shares of no
par value common voting stock. The shares of common stock all have the same
rights and preferences. Stockholders of the Company have no pre-emptive rights
to acquire additional shares of common stock or other securities. All shares of
the common stock now outstanding are fully paid and non-assessable. There are
1,890,000 outstanding non-qualified options to purchase authorized securities of
the Company. There is no provision in the Company's Articles of Incorporation,
as amended, that would delay, defer, or prevent a change in control of the
Company. The Company has no other securities or debt securities.
Item 303. Management's Discussion and Analysis of Plan of Operation.
Plan of Operation.
The Issuer's plan for the next twelve months is to continue developing and
marketing its GateCommander 2000 (GC2000) server appliance. Management estimates
that this will require $2.05 million in additional capital funds which will have
to be raised. Discussions on raising this by an equity issue have been initiated
with interested financial groups. The Issuer's plans include the following
activities: (a) final design and development of the GC2000; (b) technical
writing for manuals; (c) limited production test run; (d) set up of call center
and central servers; (e) limited first and second production runs of saleable
units; (f) development and implementation of initial marketing program; (g)
management of call center and other services; and (h) expenditures for overhead.
The Issuer expects that development and production will continue to be
undertaken utilizing subcontractors so that no plant or equipment purchases are
contemplated. It is anticipated that employees will be contracted to establish
the service center and sales network. Numbers will be dependent on demand for
the service. Projected initial production runs are not expected to exceed a
total of 300 saleable units over the Company's next twelve months.
Item 304. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
There have been no changes in, or disagreements with, the Issuer's
principal independent accountant in the Issuer's two most recent fiscal years or
as of the date of this Registration Statement.
Item 310. Financial Statements.
A Report of Certified Public Accountants is attached hereto and by this
reference incorporated herein. Also attached is an Index to Financial Statements
and such audited statements as are required.
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Item 401. Directors, Executive Officers, Promoters and Control Persons.
Identification of Directors and Executive Officers.
The following table sets forth the names of all current directors and
executive officers of the Company.
<TABLE>
<CAPTION>
Name and Age Position and Offices Term of Office as Period Served
- ------------ -------------------- ----------------- -------------
Director
<S> <C> <C> <C>
John M. Alston, 72 President and Director March 20, 1999 to March 20, 1999 to
next annual meeting present
Stephen Kohalmi, 46 Director of February 25, 2000 to February 25, 2000 to
Technology and next annual meeting present
Director
Glen R. Alston, 43 Chief Financial February 25, 2000 to February 25, 2000 to
Officer and Director next annual meeting present
Robert L. d'Artois, 54 Vice President and February 25, 2000 to February 25, 2000 to
Director next annual meeting present
Richard M. Day, 57 Secretary and March 20, 1999 to March 20, 1999 to
Director next annual meeting present
</TABLE>
John M. Alston resides in Calgary, Alberta, Canada. Mr. Alston is a
graduate of the University of N.B. with a B.Sc. in Arts. He is a
Professional Geologist registered with the Association of Professional
Engineers, Geologists, and Geophysicists of Alberta (since 1966). Since
1971, Mr. Alston has been the CEO of Savanna Resources Ltd. and since 1992,
of Rhonda Mining Corporation, both junior mineral exploration companies
listed on the Canadian Venture Exchange (formerly the Alberta Stock
Exchange). Since 1996, Mr. Alston was instrumental in incorporating three
junior capital pool companies which were listed on the Alberta Stock
Exchange and subsequently completed reverse takeovers of two manufacturing
companies and one high tech private network service provider, all of which
are listed on the Canadian Venture Exchange. In 1999 Mr. Alston oversaw the
creation of Rhonda Networks Inc. as an affiliate of Rhonda Mining to engage
in the development and marketing of an Internet access gateway conceived by
Mr. Stephen Kohalmi. Since the Issuer's takeover of RNI, Mr. Alston is now
devoting approximately 75% of his time to the Issuer. Mr. Alston is a
director of First Step Incorporated, Rhonda Mining Corporation and Savanna
Resources Ltd., all public companies listed on the Canadian Venture
Exchange.
Stephen Kohalmi resides in Thornhill, Ontario, Canada. After graduating
from the University of Toronto in 1975 with a Bachelor of Science (majoring
in computer
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science) Mr. Kohalmi joined I.P. Sharp and Associates as a programming
consultant, later branch manager for their German subsidiary handling
administration, marketing and support services, and participating in design
and implementation of a portfolio management information system. In 1979,
Mr. Kohalmi joined TTL Systems Limited, assuming responsibility for systems
programming and research and development of their communications terminal
and developing a bond analysis system for their VAX computer. In 1999, he
was cofounder of Rhonda Networks Inc., becoming their Director of
Technology, developing innovational Internet related appliances for
industry and consumers, including the GateCommander 2000 series of Internet
access gateway systems. Mr. Kohalmi is a director of Qnetix Inc., a public
company listed on the Canadian Venture Exchange.
Glen R. Alston resides in Calgary, Alberta, Canada. Mr. Alston is the son
of John M. Alston. Upon graduating from the University of Calgary with a
Bachelor of Commerce degree, Mr. Alston worked with a major accounting
firm. From 1991 to 1993 Mr. Alston was Chief Financial Officer for a
Calgary based financial services firm and was instrumental in establishing
their securities office in Calgary. Since 1993, Mr. Alston has been a
director and officer of Rhonda Mining Corporation, taking over as President
and CFO in 1998. Since 1996, Mr. Alston was involved in the incorporation
of three junior capital pool companies and their subsequent major
transactions. In 1999 with the incorporation of Rhonda Networks Inc., an
affiliate of Rhonda Mining Corporation, and it's subsequent takeover by the
Issuer, Mr. Alston became director and CFO of the Corporation, and has
worked on both the business development and the financing of the Issuer and
its predecessor.
Robert d'Artois resides in Calgary, Alberta, Canada. In his capacity as
financial consultant to Rhonda Mining Corporation and Savanna Resources
Ltd., Mr. d'Artois has assisted the companies in raising capital using flow
through vehicles and private placements. Mr. d'Artois is Vice President of
communications of the Issuer. Mr. d'Artois' background includes many years
as Owner/President of a Sales and Marketing consultancy to the broadcast
and publishing industry in Canada and the United States, and attendance at
St. Lawrence College in Quebec City.
Richard M. Day resides in Salt Lake City, Utah. Mr. Day has been a licensed
attorney (by the State of Utah) since 1969, having engaged in private
practice (for the most part as a sole practitioner) until 1993. During 1993
Mr. Day became the sole owner, officer and director of American Registrar &
Transfer Co. (which is the Issuer's transfer agent), and since that time he
has devoted substantially his full time to running that business and
representing it in various securities matters. Mr. Day is either an officer
or director, or both, of Remington Financial Group, Inc.; Temple Mountain
Industries, Inc.; Altamont Mining Co., Inc.; and Merge Tech, Inc.
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Significant Employees.
The Issuer's significant employees at the present time are limited to
executive officers.
Family Relationships.
With the exception of John M. Alston and Glen R. Alston who are father and
son, there are no other family relationships between any directors or executive
officers of the Company, either by blood or by marriage.
Involvement in Certain Legal Proceedings.
During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of the
Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the bankruptcy or
two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or
(4) was found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated.
Item 402. Executive Compensation.
No compensation was paid to any of the executive officers in the Issuer's
most recent fiscal years ending June 30, 1998, and June 30, 1999 and in the six
month period ended December 31, 1999 (the new fiscal year end.)
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Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name Year Salary Bonus Other Restrict Securiti LTIP All
and ($) ($) Annual ed es Payouts Other
Principal Compe Stock Under- ($) Compe
n- Award(s lying n-sation
Position sation ) Options/ ($)
($) ($) SARs
($)
---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lloyd 1997 Nil Nil Nil Nil Nil Nil Nil
Frizzell,
(1) pres
and
CEO
1998 Nil Nil Nil Nil Nil Nil Nil
1999 Nil Nil Nil Nil Nil Nil Nil
</TABLE>
Notes:
(1) Lloyd Frizzell served as President until February 9, 2000.
With the acquisition of Rhonda Networks Inc. as a wholly owned subsidiary
in February 2000, non-qualified incentive stock options were granted by the
Issuer to directors, executive officers, employees and contractors of Rhonda
Networks, replacing options previously granted to them by Rhonda Networks and
surrendered for cancellation by them at the time of the acquisition or (in the
case of Richard Day) as a new incentive option.
Executive officers and directors were granted the following options:
15
<PAGE>
Options granted upon acquisition of Rhonda Networks Inc.
(a) Individual Grants
<TABLE>
<CAPTION>
Name Number of e
Securities
Underlying Options % of Total Options Price
Granted Granted ($/share) Expiration Date
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John M. 160,000 shares 10.6% $0.10 February 28,
Alston 2010
CEO and
Director
Stephen 200,000 shares 13.2% $0.10 February 28,
Kohalmi 2010
Director
of Technology
Glen R. Alston 160,000 shares 10.6% $0.10 February 28,
CFO and 2010
Director
Robert 160,000 shares 10.6% $0.10 February 28,
d'Artois 2010
V-P and
Director
Richard Day 160,000 shares (1) 10.6% $0.10 February 28,
Secretary 2010
and Director
</TABLE>
Notes:
(1) These options were granted as an incentive rather than as a replacement of
options previously granted by Rhonda Networks Inc. as in the case of the other
individuals noted.
No market for the Issuer's shares existed at the time the options were
granted.
Compensation of Directors.
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments. There are no arrangements pursuant to which any of the
Company's directors was compensated during the Company's last completed fiscal
year for any service provided as director.
16
<PAGE>
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his or her resignation, retirement or other
termination of employment with the Company or its subsidiaries, any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.
Item 403. Security Ownership of Certain Beneficial Owners and Management.
Security Ownership of Certain Beneficial Owners.
The following table sets out the ownership of all persons known to the
Issuer to be the beneficial owner of more then five percent of any class of the
Issuer's voting securities:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature
Title of Class Beneficial Owner of Beneficial Owner Percent of Class (3)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
common shares Rhonda Mining 6,000,000 shares (4) 28.7%
Corporation
810, 540 5th Ave. SW
Calgary, Alberta
common shares Dorian Trust 6,050,000 shares (1) 28.9%
c/o Gemexport (4)
Limited
Stevmar House
Rockley, Christ
Church
Barbados
common shares Stephen Kohalmi 4,050,000 shares (2) 19.4%
19 Cavalier Crescent
Thornhill, Ontario
</TABLE>
(1) 4,050,000 shares registered in name of Courage Investments Limited
2,000,000 shares registered in name of Gemexport Limited
(2) includes option on 50,000 shares at $0.10 per share exercisable within 60
days
(3) based on 20,502,300 shares outstanding + options on 427,500 shares
exercisable within 60 days
(4) Due to his status as Chairman and CEO of Rhonda Mining Corporation (RMC),
John M. Alston may also be deemed to control RMC although no shareholder other
than Glen Alston owns in excess of 5% of the voting shares. Additionally, John
M. Alston's daughter, Yvonne Gillespie, is the Protector of the Dorian Trust, a
charitable trust, and she has powers to appoint trustees and nominate
17
<PAGE>
beneficiaries. See the caption "Certain Relationships and Certain Transactions"
of this Registration Statement.
Security Ownership of Management.
The following table sets out the beneficial ownership of all directors and
nominees of any class of equity securities of the Issuer and its parent (there
are no subsidiaries) and of the directors and executive officers of the Issuer
as a group:
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title of Class Name and Address of Amount and Nature Percent of Class
Beneficial Owner of Beneficial Owner
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
common shares of John M. Alston, 265,000 (1)(6) 1.3 (3)
issuer director and CEO
23 Cambridge Place
NW, Calgary, Alberta
T2K 1P8
common shares of Stephen Kohalmi, 4,050,000 (2) 19.4 (3)
issuer director of technology
10 Cavalier Crescent,
Thornhill, Ontario,
L4J 1K4
common shares of Glen R. Alston, 265,000 (1) 1.3 (3)
issuer director and CFO
604 MacEwan Drive
NW, Calgary,
Alberta,
T3K 3T9
common shares of Robert d'Artois, 490,000 (1) 2.3 (3)
issuer director and vice
president
Suite 702 1100 8th
Ave. SW, Calgary,
Alberta
T2P 3T9
common shares of Richard M. Day, 240,000 (1) 1.1 (3)
issuer director and secretary
342 East 900 South,
Salt Lake City. Utah,
84111
common shares of Directors and 5,310,000 25.4%
issuer executive officers
above as a group
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title of Class Name and Address of Amount and Nature Percent of Class
Beneficial Owner of Beneficial Owner
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
common shares of Glen R. Alston, 2,831,250 (4) 11.1% (5)
parent, Rhonda director and CFO
Mining Corporation 604 MacEwan Drive
NW, Calgary,
Alberta,
T3K 3T9
</TABLE>
(1) includes options on 40,000 shares @ $0.10 per share, exercisable within 60
days
(2) includes option on 50,000 shares @ $0.10 per share exercisable within 60
days
(3) based on 20,502,300 shares of Carmina outstanding + 427,50 options
exercisable
(4) includes options on 60,000 shares of Rhonda Mining @ $0.25 (Canadian)
exercisable within 60 days and 1,000,000 shares plus a warrant for an additional
1,000,000 shares (all of Rhonda Mining) owned by Unibanco Financial Corporation,
a company controlled by Glen Alston
(5) based on 22,606,168 shares outstanding + 2,000,000 warrants exercisable +
877,500 options exercisable (all of Rhonda Mining)
(6) As determined elsewhere in this Registration Statement, John M. Alston
family members (excluding the shares above attributed to his son, Glen R.
Alston) and a charitable trust operating under the protection of one of his
daughters own shares totalling 70.4% inclusive of the shares noted above. See
the captions "Security ownership of certain beneficial owners" and "Certain
Relationships and Certain Transactions" of this Registration Statement.
The Issuer has adopted a Stock Option Plan which is intended to encourage
stock ownership by employees, consultants, officers and directors of the Issuer
and it subsidiaries, for the following purposes: (1) that such individuals may
acquire or increase their proprietary interest in the Company; (2) to induce
qualified persons to become employees, officers or directors, etc.; (3) and to
encourage such persons to remain in the employ of, or continue to be associated
with, the Company and to put forth maximum effort for the success of the
Company. The Plan encompasses both incentive stock options as well as
non-qualified stock options. It is noted that since all of the options granted
pursuant to the Carmina/RNI Exchange Agreement are considered to come under the
Stock Option Plan, Management intends to increase the number of options
available under the Plan to a maximum of 3,000,000. See "Carmina Technologies
Inc. Stock Option Plan" at Exhibits.
Changes in Control.
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
Item 404. Certain Relationships and Related Transactions.
Transactions with Management and Others.
19
<PAGE>
The only transaction in the last two years exceeding $60,000 in which the
Issuer was a party and in which any then director or executive officer of the
Issuer had a material interest was of the acquisition of Rhonda Networks Inc. as
a wholly owned subsidiary by an Agreement Exchange dated February 9, 2000
between the Issuer and the shareholders of Rhonda Networks Inc. At the time of
the takeover, Mr. John Alston was a director of the Issuer and members of his
family and a charitable trust operating under the protection of one of his
daughters were shareholders in the Issuer as set out below:
<TABLE>
<CAPTION>
Relationship Shareholding Shareholding
to Issuer (As of February Prior After
Name 2000) to Transaction (%) Transaction (%)
- ---- ------------------------- -------------- --- ----------- ---
<S> <C> <C> <C> <C> <C>
John M. Alston Director -- -- 225,000
1.1%
Waltraud Alston Spouse of John M. Alston 225,000 450,000
5.0% 2.2%
Laurel Eckart Daughter-in-law of John M. 210,250 435,250
Alston/Wife of Glen Alston 4.7% 2.1%
David Cooper Son-in-law of John M. Alston 225,000 225,000
5.0% 1.1%
Maxwell Clark Son-in-law of John M. Alston 221,250 221,250
4.9% 1.1%
Yvonne Gillespie Daughter of John M. Alston 220,250 220,250
4.9% 1.1%
April Arvazzetti Daughter of John M. Alston 204,260 204,260
4.5% 1.0%
Wendy Berger Daughter of John M. Alston 182,300 182,300
4.0% 0.9%
Unibanco Controlled by Glen R. Alston, 157,875 157,875
Financial Corporation son of John M. Alston 3.5% 0.8%
Gemexport Limited Owned by The Dorian Trust 2,000,000 44.4% 2,000,000
Courage Investments Owned by The Dorian Trust -- -- 4,050,000 19.8%
Rhonda Mining Company of which John M. -- -- 6,000,000 29.3%
Corporation Alston is Chairman and CEO
</TABLE>
Notes:
(1) A charitable trust of which Yvonne Gillespie is the Protector, with the
powers to appoint trustees and nominate beneficiaries.
Parents of the Issuer.
The sole parent of the Issuer is Rhonda Mining Corporation as shown in the
table under Security Ownership of Certain Beneficial Owners above. Shares of
Rhonda Mining Corporation are
20
<PAGE>
widely held and trade on the Canadian Venture Exchange. Management control 8% of
the voting shares and no shareholder owns in excess of 5% of the voting shares.
Item 503. Summary Information and Risk Factors:
Risk Factors.
In any business venture, there are substantial risks specific to the
particular enterprise and which cannot be ascertained. The Company's proposed
business operations will be subject to the same types of risks inherent in any
new or unproven venture, and will include those types of risk factors outlined
below.
Extremely Limited Assets; No Source of Revenue. The Company has virtually
no assets and has had no revenue in either of its two most recent fiscal years
or to the date hereof. Nor will the Company receive any revenues until it
completes development of its principal product and begins sales of that product
to the public. The Company can provide no assurance that sales of the product
will produce any material revenues for the Company or its stockholders or that
any such business will operate on a profitable basis.
Voting Control. Due to its ownership of a majority of the shares of the
Company's outstanding common stock, a small number of shareholders has the
ability to elect all of the Company's directors, who in turn elect all executive
officers, without regard to the votes of other stockholders.
No Market for Common Stock; No Market for Shares. Although the Company
intends to submit for listing of its common stock on the Bulletin Board of the
National Association of Securities Dealers, Inc. (the "NASD"), there is
currently no market for such shares; there can be no assurance that such a
market will ever develop or be maintained. Any market price for shares of common
stock of the Company is likely to be very volatile, and numerous factors beyond
the control of the Company may have a significant effect. In addition, the stock
markets generally have experienced, and continue to experience, extreme price
and volume fluctuations which have affected the market price of many small
capital companies and which have often been unrelated to the operating
performance of these companies. These broad market fluctuations, as well as
general economic and political conditions, may adversely affect the market price
of the Company's common stock in any market that may develop.
Risks of "Penny Stock". The Company's common stock may be deemed to be
"penny stock" as that term is defined in Reg. Section 240.3a5l-l of the
Securities and Exchange Commission. Penny stocks are stocks: (I) with a price of
less than five dollars per share; (ii) that are not traded on a "recognized"
national exchange; (iii) whose prices are not quoted on the NASDAQ automated
quotation system (NASDAQ-listed stocks must still meet requirement (I) above);
or (iv) in issuers with net tangible assets less than $2,000,000 (if the issuer
has been in
21
<PAGE>
continuous operation for at least three years) or $5,000,000 (if in continuous
operation for less than three years), or with average revenues of less than
$6,000,000 for the last three years.
Lack of Market for Equity Securities. There has been no "established public
market" for the Company's common stock in the last five years. While the Company
plans to qualify for listing on the NASD, at least initially, any trading in its
common stock will most likely be conducted in the over-the-counter market in the
"pink sheets" (OTC) or the OTC Bulletin Board of the NASD.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Reg.
Section 240.15g-2 of the Securities and Exchange Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in the Company's
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock."
Moreover, Reg. Section 240.15g-9 of the Securities and Exchange Commission
requires broker-dealers in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (I) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for investors in
the Company's common stock to resell their shares to third parties or to
otherwise dispose of them.
Item 701. Recent Sales of Unregistered Securities.
On January 18, 1999, 2,400,000 common shares were issued for a deemed
consideration of $24,000.00 for an assignment of the TAB 99-1 through TAB 99-16
and TAB 99-25 mining claims located in Josephine County, Oregon and the TAB
99-17 through TAB 99-24 and TAB 99-26 mining claims in Del Norte County,
California. The offers and sales of these securities are believed to have been
exempt from the registration requirements of Section 5 of the Securities Act of
1933 pursuant to Section 4(2) thereof (for transactions not involving any public
offering), and from similar states' securities laws, rules and regulations
requiring the offer and sale of securities by available state exemptions from
such registration. See "Tab 99 Assignment Agreement" at Exhibits.
Further, on February 8, 2000, 16,000,000 common shares were issued pursuant
to an Agreement of Exchange with the Shareholders of Rhonda Networks Inc. which
became a wholly owned subsidiary of the Issuer. The offers and sales of these
securities are believed to have been exempt from the registration requirements
of Section 5 of the Securities Act of 1933 pursuant to
22
<PAGE>
Section 4(2) thereof (for transactions not involving any public offering), and
from similar states' securities laws, rules and regulations requiring the offer
and sale of securities by available state exemptions from such registration. See
"Agreement of Exchange" by and between Issuer and Rhonda Networks Inc. at
Exhibits.
Item 702 Indemnification of Directors and Officers.
The Articles of Incorporation of the Issuer state that:
"The Corporation shall indemnify any person who is or was a director
to the maximum extent provided by statute."
"The Corporation shall indemnify any person who is or was an officer,
employee or agent of the Corporation who is not a director to the
maximum extent provided by law, or to a greater extent if consistent
with law and if provided by resolution of the Corporation's
shareholders or directors, or in a contract."
"The Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee, fiduciary or agent
of the Corporation and who while a director, officer, employee,
fiduciary or agent of the Corporation, is or was serving at the
request of the Corporation as a director, officer, partner, trustee,
employee, fiduciary or agent of any other foreign or domestic
corporation, partnership, joint venture, trust, other enterprise or
employee benefit plan against any liability asserted against or
incurred by him in any such capacity or arising out of his status as
such, whether or not the Corporation would have the power to indemnify
him against such liability under provisions of the statute."
and that
"A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director, except for liability (I) for any breach
of the director's duty of loyalty to the Corporation or to its
shareholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation op law, (iii)
for acts specified under Section 16-10-44 of the Utah Revised Business
Corporation Act or any amended or successor provision thereof, or (iv)
for any transaction from which the directors derived an improper
personal benefit. If the Utah Revised Business Corporation Act is
amended after this Article is adopted to authorize corporate action
further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Utah
Revised Business Corporation Act, as so amended."
23
<PAGE>
"Any repeal or modification of the foregoing paragraph by the
shareholders of the Corporation shall not adversely affect any right
or protection of a director of the Corporation existing at the time of
such repeal or modification."
Further, Section 16-10a-841, Utah Code Annotated (U.C.A.), specifically
authorizes a Utah corporation to indemnify an individual made a party to a
proceeding because he is or was a director against liability incurred in the
proceeding if his conduct was in good faith; and he reasonably believed that his
conduct was in, or not opposed to, the corporation's best interests; and in the
case of any criminal proceeding, he had no reasonable cause to believe his
conduct was unlawful. In addition, it also authorizes a Utah corporation to
limit the liability of a director to the corporation or to its shareholders for
monetary damages for any action taken or any failure to take any action as a
director, except for: liability for the amount of a financial benefit received
by a director to which he is not entitled; an intentional infliction of harm on
the corporation or the shareholders; a violation of section 16-10a-842, U.C.A.;
or an intentional violation of criminal law.
PART II
Item 1. Index to Exhibits.
The following exhibits are filed as a part of this Registration Statement:
Exhibit
Number Description
- ------ -----------
1 Financial Statements [Jones, Jensen]
2 Agreement of Exchange w/ Carmina Technologies Inc. Stock Option
Plan and Stock Option Agreement
3 Restated Articles of Incorporation of Carmina Technologies Inc.
with Articles of Amendment to Articles of Incorporation of The
Americas Mining Corporation. (Note: No By-Laws created)
10.1 TAB 99 Assignment Agreement
10.2 Syndicate Agreement (TAB 99)
24
<PAGE>
21 Rhonda Networks Inc. - Articles of Incorporation
Summaries of all exhibits contained within this Registration Statement are
modified in their entirety by reference to these Exhibits.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
CARMINA TECHNOLOGIES INC.
Date: May 16, 2000 By /s/
------------------------------------------------
John M. Alston, Director and President
Date: May 16/00 By /s/
------------------------------------------------
Robert d'Artois, Director and Vice President
Date: May 16/00 By /s/
------------------------------------------------
Richard M. Day, Director and Sec/Treasurer
25
<PAGE>
JONES, JENSEN & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Carmina Technologies Inc. and Subsidiary
(Formerly The Americas Mining Corporation)
(A Development Stage Company)
Calgary, Canada
We have audited the accompanying consolidated balance sheet of Carmina
Technologies, Inc. and Subsidiary (formerly The Americas Mining Corporation) (a
development stage company) as of December 31, 1999 and the related consolidated
statements of operations, stockholders' equity, and cash flows from inception on
May 7, 1999 to December 31, 1999. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Carmina
Technologies, Inc. and Subsidiary (formerly The Americas Mining Company)(a
development stage company) as of December 31, 1999 and the consolidated results
of their operations and their cash flows from inception on May 7, 1999 to
December 31, 1999 in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
2 to the consolidated financial statements, the Company is a development stage
company and has no operating concern. Management's plans in regard to these
matters are also described in Note 2. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
April 8, 2000
26
<PAGE>
CARMINA TECHNOLOGIES, INC.
AND SUBSIDIARY
(Formerly The Americas Mining Corporation)
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
<PAGE>
C O N T E N T S
Independent Auditors' Report............................................... 3
Consolidated Balance Sheet ................................................ 4
Consolidated Statement of Operations....................................... 5
Consolidated Statement of Stockholders' Equity............................. 6
Consolidated Statement of Cash Flows....................................... 7
Notes to the Consolidated Financial Statements............................. 8
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Carmina Technologies, Inc. and Subsidiary
(Formerly The Americas Mining Corporation)
(A Development Stage Company)
Calgary, Canada
We have audited the accompanying consolidated balance sheet of Carmina
Technologies, Inc. and Subsidiary (formerly The Americas Mining Corporation) (a
development stage company) as of December 31, 1999 and the related consolidated
statements of operations, stockholders' equity and cash flows from inception on
May 7, 1999 to December 31, 1999. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated 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 consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Carmina
Technologies, Inc. and Subsidiary (formerly The Americas Mining Company) (a
development stage company) as of December 31, 1999 and the consolidated results
of their operations and their cash flows from inception on May 7, 1999 to
December 31, 1999 in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company is a development stage company
and has no operating capital which together raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 2. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
April 8, 2000
<PAGE>
CARMINA TECHNOLOGIES, INC. AND SUBSIDIARY
(Formerly The Americas Mining Corporation)
(A Development Stage Company)
Consolidated Balance Sheet
December 31,
1999
------------
CURRENT ASSETS
Cash $ 3,417
Tax refund receivable 2,136
Accounts receivable 13,486
----------
Total Current Assets 19,039
----------
OTHER ASSETS
Marketable securities 13,000
----------
Total Other Assets 13,000
----------
TOTAL ASSETS $ 32,039
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable $ 24,189
----------
Total Current Liabilities 24,189
----------
STOCKHOLDERS' EQUITY
Common stock: 40,000,000 shares authorized
of no par, 20,502,300 shares issued and outstanding 316,649
Deficit accumulated during the development stage (308,799)
----------
Total Stockholders' Equity 7,850
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,039
==========
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
CARMINA TECHNOLOGIES, INC. AND SUBSIDIARY
(Formerly The Americas Mining Corporation)
(A Development Stage Company)
Consolidated Statement of Operations
From
Inception on
May 7,
1999 Through
December 31,
1999
------------
REVENUES $ 2,136
COST OF GOODS SOLD 1,942
-----------
GROSS PROFIT 194
-----------
EXPENSES
General and administrative 4,142
Research and development 8,346
Consulting fees 126,974
Management fees 169,445
-----------
Total Expenses 308,907
-----------
LOSS FROM OPERATIONS (308,713)
-----------
OTHER INCOME (EXPENSE)
Interest expense (86)
-----------
Total Other Income (Expense) (86)
-----------
NET LOSS $ (308,799)
===========
BASIC LOSS PER SHARE $ (0.05)
===========
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
CARMINA TECHNOLOGIES, INC. AND SUBSIDIARY
(Formerly The Americas Mining Corporation)
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity
Deficit
Accumulated
During the
Common Stock Development
---------------------- -------------
Shares Amount Stage
----------- --------- -------------
Balance, inception on May 7, 1999 -- $ -- $ --
Common stock issued for services
and cash at $0.02 per share 16,000,000 313,406 --
Common stock issued in
recapitalization 4,502,300 3,243 --
Net loss from inception on May 7, 1999
through December 31, 1999 -- -- (308,799)
----------- --------- -----------
Balance, December 31, 1999 20,502,300 $ 316,649 $ (308,799)
=========== ========= ===========
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE>
CARMINA TECHNOLOGIES, INC. AND SUBSIDIARY
(Formerly The Americas Mining Corporation)
(A Development Stage Company)
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
May 7,
1999 Through
December 31,
1999
------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (308,799)
Adjustments to reconcile net loss to net cash used by operating activities:
Stock issued for services 256,117
Changes in operating assets and liabilities:
(Increase) decrease in receivables (15,622)
Increase (decrease) in accounts payable 24,189
-----------
Net Cash Used by Operating Activities (44,115)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of marketable securities (13,000)
-----------
Net Cash Used by Investing Activities (13,000)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received in recapitalization 3,243
Issuance of common stock for cash 57,289
-----------
Net Cash Provided by Financing Activities 60,532
-----------
NET INCREASE IN CASH 3,417
CASH AT BEGINNING OF PERIOD --
-----------
CASH AT END OF PERIOD $ 3,417
===========
CASH PAID FOR:
Interest $ --
Income taxes $ --
NON-CASH FINANCING ACTIVITIES
Common stock issued for services $ 256,117
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
7
<PAGE>
CARMINA TECHNOLOGIES, INC. AND SUBSIDIARY
(Formerly The Americas Mining Corporation)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 1 - ORGANIZATION AND HISTORY
The consolidated financial statements presented include those of
Carmina Technologies, Inc. (formerly The Americas Mining Corporation)
(a development stage company) and its wholly-owned subsidiary Rhonda
Networks, Inc. Collectively, they are referred to herein as "the
Company."
Carmina Technologies, Inc. (Carmina) was incorporated under the laws
of the State of Utah on March 5, 1973 under the name of "Investors
Equity, Inc." In 1991, the Company changed its name to "The Americas
Mining Corporation." In January of 2000, the Company changed its name
to "Carmina Technologies, Inc."
On February 9, 2000, the Company completed an Agreement and Plan of
Reorganization whereby Carmina issued 16,000,000 shares of its common
stock in exchange for all of the outstanding common stock of Rhonda
Networks, Inc. (Rhonda).
The reorganization was accounted for as a recapitalization of Rhonda
because the shareholders of Rhonda control the Company after the
acquisition. Therefore, Rhonda is treated as the acquiring entity.
Accordingly, there was no adjustment to the carrying value of the
assets or liabilities of Carmina. Carmina is the acquiring entity for
legal purposes and Rhonda is the surviving entity for accounting
purposes.
Carmina was incorporated for the purpose of creating a vehicle to
obtain capital to seek out, investigate and acquire interests in
products and businesses which may have a potential for profit.
Rhonda, a wholly owned subsidiary, was incorporated under the laws of
the Province of Alberta, Canada on May 7, 1999. It was incorporated
for the purpose of developing and marketing its low-cost,
high-capability multipurpose communications wizard and Linux based
GateCommander and Smart-Home networking technologies. The
GateCommander 2000 technology combines firewall, virtual private
networking, network and system monitoring, e-mail and domain name
services, paging and fax with voice over IP, and dynamic web services.
The Smart-Home network management system offers homeowners control
over heating, air conditioning, lighting, appliance management,
switches and outlets, home security and motion and fire detection
zones.
a. Accounting Method
The Company's consolidated financial statements are prepared using the
accrual method of accounting. The Company has elected a calendar year
end.
b. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with
maturities of three months or less at the time of acquisition.
8
<PAGE>
CARMINA TECHNOLOGIES, INC. AND SUBSIDIARY
(Formerly The Americas Mining Corporation)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 1 - ORGANIZATION AND HISTORY (Continued)
c. Basic Loss Per Share
The computation of basic loss per share of common stock is based on
the weighted average number of shares outstanding during the period of
the consolidated financial statements. Common stock equivalents,
consisting of stock warrants and options, have not been included in
the calculation as their effect is antidilutive for the period
presented.
From
Inception on
May 7,
1999 Through
December 31,
1999
------------
Numerator - loss $ (308,799)
Denominator - weighted average number of
shares outstanding 5,635,633
------------
Loss per share $ (0.05)
===========
d. Provision for Taxes
At December 31, 1999, the Company had net operating loss carryforwards
of approximately $308,000 that may be offset against future taxable
income through 2019. No tax benefit has been reported in the
consolidated financial statements, because the Company believes there
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
f. Revenue Recognition
The Company currently has no source of revenues. Revenue recognition
policies will be determined when principal operations begin.
9
<PAGE>
CARMINA TECHNOLOGIES, INC. AND SUBSIDIARY
(Formerly The Americas Mining Corporation)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 1999
NOTE 1 - ORGANIZATION AND HISTORY (Continued)
g. Principles of Consolidation
The consolidated financial statements include those of Carmina
Technologies, Inc. and its wholly owned subsidiary, Rhonda Networks,
Inc. All significant intercompany accounts and transactions have been
eliminated.
NOTE 2 - GOING CONCERN
The Company's consolidated financial statements are prepared using
generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company
does not have significant cash or other material assets, nor does it
have an established source of revenues sufficient to cover its
operating costs and to allow it to continue as a going concern. It is
the intent of the Company to continue in the development and marketing
of its Linux based GateCommander server appliance and its Smart-Home
technology. Additionally, the Company intends to market support
services for these products and to act as a reseller for other
products which it feels are complimentary to the Company's goals.
Until that time, shareholders of the Company have committed to meeting
its minimal operating needs.
NOTE 3 - WARRANTS AND OPTIONS
A summary of the status of the Company's warrants and options as of
December 31, 1999 and changes during the period ending December 31,
1999 is presented below:
Weighted
Average
Exercise
Warrants Options Price
-------- ------- -----
Outstanding, May 7, 1999 -- -- $ --
Granted 3,350,000 505,000 0.13
Expired -- -- --
Exercised (3,350,000) -- 0.14
----------- ----------- ---------
Outstanding, December 31, 1999 -- 505,000 $ 0.07
=========== =========== =========
Exercisable, December 31, 1999 -- 505,000 $ 0.07
=========== =========== =========
On February 9, 2000 the 505,000 options were cancelled and 1,490,000
options at $0.10 per share were issued.
10
<PAGE>
AGREEMENT OF EXCHANGE
THIS AGREEMENT OF EXCHANGE is made and entered into on the __ th day of
February, 2000, by and between CARMINA TECHNOLOGIES INC. (a Utah corporation
hereinafter referred to as "CARMINA"), and the undersigned shareholders in
RHONDA NETWORKS INC. (an Alberta corporation hereinafter referred to as
"RHONDA") (hereinafter sometimes referred to jointly and severally as
"SHAREHOLDERS") and the undersigned option holders in RHONDA NETWORKS INC.,
WITNESSETH:
WHEREAS RHONDA is a privately held corporation owned by SHAREHOLDERS (who
collectively own 100% of the shares of RHONDA); and,
WHEREAS RHONDA has heretofore expended substantial effort and money in
development of its product line consisting of the GateCommander 2000 Internet
gateway and server appliances (hereafter referred to as "GateCommanders"), in
market research and test marketing projects, and in developing a Current
Marketing Plan; intends to commence marketing its product in the immediate
future in selected target markets in the United States and Canada but recognizes
that substantial additional money (which RHONDA estimates to be $3,000,000.00)
will be necessary to finance implementation of its plan; and the SHAREHOLDERS
believe that utilization of a publicly held corporation will facilitate raising
of money for this program; and,
WHEREAS SHAREHOLDERS desire to exchange their shares in RHONDA for shares
in CARMINA and CARMINA desires to acquire RHONDA as a subsidiary, all on the
terms provided herein;
NOW, THEREFORE, in consideration of the premises aforesaid, the shares to
be exchanged pursuant hereto, and of the mutual agreements herein contained,
receipt and the sufficiency of which consideration CARMINA and the SHAREHOLDERS
hereby acknowledge, CARMINA and the SHAREHOLDERS hereby represent and warrant,
further acknowledge, and agree as follows:
WARRANTIES OF CARMINA
CARMINA hereby represents and warrants that:
1.01: The premises set forth above which pertain to it are true.
1.02: CARMINA is duly organized and validly existing under the laws of the
State of Utah, and it is now and will as of closing hereof be in good
standing under the laws of that state and entitled to own properties
and to conduct business therein. No representation is made that
CARMINA is qualified to do business in any other jurisdiction.
1.03: (a) CARMINA's entire authorized capital stock will, immediately
preceding consummation consist of 50,000,000 shares consisting of
10,000,000 shares of no par value preferred stock of which none will
be issued and 40,000,000 shares of no par value common stock of which
4,502,300 shares will immediately prior to closing hereof be issued
(immediately after closing hereof an additional 16,000,000 shares of
CARMINA will be issued). (b) There are not now, and as of closing
hereof will not be, any outstanding options, warrants, or rights of
any kind to purchase from or sell to CARMINA, or to cause it to issue,
any shares of its capital stock, except as set forth in Schedule "B"
hereto.
1.04: CARMINA has at present approximately 400 shareholders of record, but
makes no representation or warranty in respect of the beneficial
owners of, or the nature of any market for, its issued shares.
1.05: CARMINA does not now nor will it as of closing hereof ow or control
any capital stock of any other corporation.
1.06: There has and as of closing hereof will have been no material adverse
change in CARMINA's financial condition as reflected by the audited
financial statements attached as Exhibit "A" to its disclosure
statement dated December 31, 1999, which statements fairly represent
in all material respects the financial condition of CARMINA as at the
date indicated.
1.07: As of closing hereof all tax returns of CARMINA which ar due to be
filed will have been filed, and all taxes or other amounts for which
CARMINA is liable in connection therewith will have been paid. CARMINA
has no knowledge of any unassessed tax deficiencies proposed or
threatened against it or its subsidiaries.
1.08: Consummation of the transactions contemplated by this agreement will
not result in the breach of any term or provision of the governing
instruments of CARMINA.
<PAGE>
1.09: There are not now and as of closing hereof will be no actions or
proceedings pending by or against CARMINA, and (excepting this
agreement and a 1 page document appointing American Registrar and
Transfer Company as its transfer agent) it is a party to any material
agreements.
1.10: The shares of CARMINA to be issued pursuant hereto will be, when
issued as provided herein, validly issued and outstanding, fully paid
and non-assessable.
1.11: CARMINA is at present not required to file any reports under the
Securities Exchange Act of 1934, and it has not heretofore done so.
1.12: CARMINA makes no other or further representation or warranty
excepting as contained herein.
WARRANTIES OF SHAREHOLDERS
SHAREHOLDERS hereby jointly and severally represent and warrant that:
2.01: The premises set forth above which pertain to them and RHONDA are
true.
2.02: RHONDA is duly organized and validly existing under the Alberta
Business Corporations Act, and it is now and will as of closing hereof
be in good standing under the laws of Alberta and entitled to own
properties and to conduct business therein. No representation is made
that RHONDA is qualified to do business in any other jurisdiction.
2.03: (a) RHONDA's authorized capital consists of unlimited shares of no
par value common stock and unlimited preferred shares. Six million
common shares have been issued to the SHAREHOLDERS as fully paid
shares as set forth in Schedule "A" hereto. No preferred shares have
been issued. (b) There are not now, and as of closing hereof will not
be, any outstanding options, warrants, or rights of any kind to
purchase from or sell to RHONDA, or to cause it to issue, any shares
of its capital stock over and above those specified in Schedule "B"
hereto.
2.04: Only the 13 persons specified in Schedules "A" and/or "B above have
any right, title or interest in or to any shares of RHONDA.
2.05: RHONDA has, and as of closing hereof will have, no subsidiaries, nor
does or will it own or control any capital stock of any other
corporation
2.06: There has and as of closing hereof will have been no material adverse
change in RHONDA's financial condition from that reflected in its
financial statements dated December 31, 1999 (attached hereto as
Exhibit "B" which statements fairly represent in all material respects
RHONDA's financial condition as at the date indicated.
2.07: As of closing hereof all tax returns of RHONDA which are due to be
filed will have been filed, and all taxes or other amounts for which
RHONDA is liable in connection therewith will have been paid.
SHAREHOLDERS have no knowledge of any unassessed tax deficiencies
proposed or threatened against RHONDA.
2.08: Consummation of the transactions contemplated by this agreement will
not result in the breach of any term or provision of the governing
instruments of RHONDA, as amended, nor of any material agreements(s)
to which RHONDA is a party.
2.09: There are not now and as of closing hereof will be no actions or
proceedings pending by or against RHONDA.
2.10: The shares of RHONDA to be exchanged to CARMINA pursuant hereto will
be, when registered in CARMINA's name as provided for herein, validly
issued and outstanding, fully paid and non- assessable.
2.11: SHAREHOLDERS make no other further representation or warranty
excepting as contained herein.
EXCHANGE OF SHARES
3.01: In consideration and exchange for the specific number of CARMINA
shares specified as to each of them in paragraph 3.02 below,
SHAREHOLDERS each hereby sell at a deemed price of $0.10 per share,
transfer and assign to CARMINA all of their respective right, title
and interest in and to the RHONDA shares designated in respect of each
SHAREHOLDER in paragraph 2.03 (a) hereof, including but not limited to
the right to have certificates representing the RHONDA shares in
question originally issued by RHONDA transferred into CARMINA's name
and delivered to its transfer agent.
3.02: In exchange for the RHONDA shares to be exchanged to it pursuant to
paragraph 3.01 above,
<PAGE>
CARMINA will issue and deliver to each SHAREHOLDER a certificate
registered in the SHAREHOLDER's name which represents such number of
shares of CARMINA's common stock as equals 2 times the number of
shares of RHONDA that the particular SHAREHOLDER is exchanging to
CARMINA pursuant hereto as set out in Schedule "A" hereto.
CLOSING
4.01: Closing of this Agreement of Exchange shall be effectuated by
delivery of the following to CARMINA's transfer agent American
Registrar & Transfer Co. ("ARTCO"), 342 East 900 South, Salt Lake
City, Utah 84111: a fully executed (in the original) counterpart
hereof; Share certificates aggregating 8,000,000 common shares of
RHONDA duly signed off by the respective SHAREHOLDERS; and a
Resolution of CARMINA's board of directors authorizing and directing
ARTCO to issue certificates registered in the respective names of the
SHAREHOLDERS which represent the CARMINA shares specified in paragraph
3.02 above as to each, and to deliver such certificates to
SHAREHOLDERS (which ARTCO may do by registered or certified mail,
return receipt requested, addressed to each SHAREHOLDER at their
addresses provided below for that purpose).
4.02: "Closing" of this agreement shall be deemed to have occurred at such
time as all of the documents specified in paragraph 4.01 as being
necessary to effectuate closing have been delivered to ARTCO and it
deposits all of the certificates described in paragraph 4.01 above in
the mail, postage prepaid and in the manner provided for in said
paragraph.
4.03: In the event that this agreement has not closed by February 29, 2000,
then effective as of the close of ARTCO's business (at 3:30 p.m.) on
that day this Agreement of Exchange, and all of the terms and
provisions herein contained, shall automatically (without any
requirement of notice) be and thereafter remain void and of no further
force nor effect.
ACKNOWLEDGEMENTS CONCERNING SHARES TO BE EXCHANGED
5.01: Each of the parties hereto acknowledge that the shares which they
will acquire pursuant to the exchange provided for hereby are
"restricted" securities, which is to say that such shares will have
been acquired (directly or indirectly from their respective issuers)
in a transaction not involving any public offering. Accordingly,
neither the shares nor transaction(s) in question have been registered
under either the Securities Act of 1933 (the "Act") or the securities
laws of any state, but said shares will be issued in reliance on the
exemption from the registration requirements of Section 5 of the Act
provided by Section 4 (2) thereof (for transactions not involving any
public offering), and from any state registration by applicable
non-public offering exemptions.
5.02: (a) SHAREHOLDERS acknowledge that they have each receive and reviewed
CARMINA's audited financial statements as at December 31 of 1999 and
1998, and been afforded such access to other books and records of
CARMINA, and the opportunity to ask such questions regarding CARMINA
(to which they received satisfactory answers), as they have deemed
necessary and appropriate; (b) CARMINA acknowledges that SHAREHOLDERS
have heretofore furnished its agents with such information concerning
RHONDA and its financial condition as CARMINA has desired, and that it
is a corporate entity of sufficient business experience and acumen to
evaluate the merits and risks of this transaction.
5.03: Each of the parties hereto represents that the shares being acquired
by them are being purchased for their own respective accounts, for
purposes of investment, and not with a purpose or intent of making any
public distribution of said shares.
5.04: Each of the parties hereto acknowledges and consents tha all
certificates representing any of the shares to be exchanged pursuant
hereto will be imprinted with the standard form restrictive investment
legend utilized by CARMINA's transfer agent (which legend is to the
effect that the shares are not registered under the Securities Act of
1933, and cannot be sold, hypothecated or transferred without such
registration unless an appropriate exemption from registration is
available as evidenced by an opinion of counsel satisfactory to the
issuer and the Transfer Agent). The parties further acknowledge their
familiarity with the fact, content and legal effect of the provisions
<PAGE>
of Rule 144 promulgated by the Securities and Exchange Commission
which generally governs offers, resale, or delivery after sale of
restricted securities in the United States, or by and through the
means or instrumentalities of United States commerce or its mails.
5.05: The parties hereto hereby consent to placement of "stop transfer"
instructions on the transfer records of the issuer of all of the
shares to be issued hereunder which are sufficient in the issuing
transfer agent's sole judgment to ensure compliance with the
restrictive legend to be imprinted on the certificates in question.
5.06: Each of the parties hereby acknowledges that they have consulted, to
the extent that each has deemed it necessary or prudent to do so, with
their own attorneys and advisors in respect of the legal effect and
tax consequences to them of entering into this agreement, and that in
entering into this agreement they are not relying on the advice or any
representation (excepting only such as may be specifically set forth
herein) of any other party (or any representative of a party)hereto.
ADDITIONAL ACKNOWLEDMENTS and AGREEMENTS
6.01: All parties hereto acknowledge that RHONDA has options outstanding as
set forth in Schedule "B" hereto and agree to exchange the said
options for new options to be issued by CARMINA in the number of
shares and exercisable on or before the expiry dates and at the share
prices as set forth in Schedule "B", the new option agreements be in
the form set forth in Schedule "C" hereof.
6.02: The parties hereto acknowledge that in order to have quotations of
CARMINA's shares published on the Bulletin Board it will be necessary
to register CARMINA with the Securities Exchange Commission after
which it will be a "reporting company" under the Securities Exchange
Act of 1934; accordingly SHAREHOLDERS agree that promptly after the
deemed closing the new management of CARMINA shall prepare and file a
Form 10 in order to have CARMINA become a "reporting company".
MISCELLANEOUS
8.01: The validity, interpretation of terms and performance of this
agreement shall be governed by and construed under the laws of the
State of Utah.
8.02: The representations and warranties made herein shall survive closing
hereof.
8.03: All monetary figures stated in this Agreement are in United States
dollars.
IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement of
Exchange (consisting of 24 pages including this page) with the purpose and
intent of making it effective as of the date first written above:
SHAREHOLDERS
RHONDA MINING CORPORATION
per
COURAGE INVESTMENTS LIMITED
per
Witness
STEPHEN KOHALMI
<PAGE>
Witness
ROBERT D'ARTOIS
Witness
JUDITH STOETERAU
Witness
JOHN M. ALSTON
Witness
WALTRAUD ALSTON
Witness
GLEN R. ALSTON
Witness
LAUREL ALSTON
Witness_____________________________ __________________________________
DALE MAH
OPTION HOLDERS
Witness_____________________________ __________________________________
NORMA BECERRA
Witness__________________________ __________________________________
CEDRIC PUDDY
Witness___________________________ __________________________________
BRIAN FALTER
CARMINA TECHNOLOGIES INC.
Per_______________________________
<PAGE>
ACKNOWLEDGEMENT
The undersigned, being first duly sworn, hereby acknowledges that he is the
Secretary of CARMINA TECHNOLOGIES INC., a Utah corporation; that he is
authorized by appropriate action of the board of directors of said corporation
to execute the foregoing Agreement of Exchange on its behalf; and, that he did
in fact execute the same as and for the act of said corporation.
RICHARD M. DAY
SUBSCRIBED and SWORN to before me this day of .
-
NOTARY PUBLIC
Residing in Salt Lake City, Utah
My Commission Expires:
<PAGE>
Schedule "A"
To
Agreement of Exchange
Dated February __ ,2000
Number of Number of
Shares Shares
Shareholder: (Rhonda) (Carmina)
- ------------ -------- ---------
Rhonda Mining Corporation 3,000,000 6,000,000
Stephen Kohalmi 2,000,000 4,000,000
Robert d'Artois 225,000 450,000
Judith Stoeterau 180,000 360,000
Courage Investments 2,025,000 4,050,000
John M. Alson 112,500 225,000
Waltraud Alston 112,500 225,000
Glen R. Alston 112,500 225,000
Laurel Eckart 112,500 225,000
Dale Mah 120,000 240,000
--------- ----------
Total 8,000,000 16,000,000
========= ==========
<PAGE>
Schedule "B"
To
Agreement of Exchange
Dated February __ ,2000
Outstanding Rhonda Replacement
Option Holder Options (1) Americas Options(2)
-------------------- -----------------------
No. Shares Price No. Shares Price
(C$) (C$)
---------- ----- ---------- -----
Stephen Kohalmi 100,000 0.10 200,000 0.10
Robert d'Artois 80,000 0.10 160,000 0.10
Judith Stoeterau 70,000 0.10 140,000 0.10
John M. Alston 80,000 0.10 160,000 0.10
Glen R. Alston 80,000 0.10 160,000 0.10
Norma Becerra 20,000 0.10 40,000 0.10
Dale Mah 45,000 0.10 90,000 0.10
Cedric Puddy 100,000 0.10 200,000 0.10
Brian Falter 100,000 0.10 200,000 0.10
------- ---- ---------- ----
Total 675,000 1,350,000
======= =========
(1) Options expire October 1, 2003
(2) Options expire February 28, 2010
<PAGE>
CARMINA TECHNOLOGIES INC.
STOCK OPTION PLAN
1. Purpose: Restrictions on Amount Available Under the Plan. This Stock
Option Plan (the "Plan") is intended to encourage stock ownership by employees,
consultants, officers and directors of CARMINA TECHNOLOGIES INC., (the
"Corporation"), its divisions and Subsidiary Corporations, so that they may
acquire or increase their proprietary interest in the Corporation; to induce
qualified persons to become employees, officers or directors of or consultants
to the Corporation (whether or not they become employees); and to encourage such
employees, officers, directors and consultants to remain in the employ of or
continue to be associated with the Corporation and to put forth maximum efforts
for the growth and success of the Corporation's business. It is further intended
that options granted by the Committee pursuant to Section 6 of this Plan shall
constitute "incentive stock options" ("Incentive Stock Options") within the
meaning of Section 422 of the Internal Revenue Code, and the regulations issued
thereunder, and that options granted by the Committee pursuant to Section 7 of
this Plan shall constitute "non-qualified stock options" ("Non-qualified Stock
Options").
2. Definitions. As used in this Plan, the following words and phrases shall
have the meanings indicated:
(a) "Disability" shall mean an Optionee's inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or that has lasted or
can be expected to last for a continuous period of not less than 12 months.
(b) "Market Value" per share as of a particular date shall mean the last
sale price of the Corporation's Common Stock as reported on a national
securities exchange or on the NASDAQ National Market System or, if a last sale
reporting quotation is not available for the Corporation's Common Stock, the
average of the bid and asked prices of the Corporation's Common Stock as
reported by NASDAQ or on the electronic bulletin board, or if not so reported,
as listed in the National Quotation Bureau, Inc.'s "Pink Sheets" or, if such
quotations are unavailable, the value determined by the Committee (as
hereinafter defined) in accordance with their discretion in making a bona fide,
good faith determination of fair market value. Market Value shall be determined
without regard to any restriction other than a restriction which, by its terms,
will never lapse.
(c) "Internal Revenue Code" shall mean the United States Internal Revenue
Code of 1986, as amended from time to time (codified at Title 26 of the United
States Code) (the "Internal Revenue Code"), and any successor legislation.
(d) "Parent Corporation" shall mean any corporation (other than the
employer corporation) in an unbroken chain of corporations ending with the
employer corporation if, at the time of granting an option, each of the
corporations other than the
<PAGE>
employer corporation owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
(e) "Subsidiary Corporation shall mean any corporation (other than the
employer corporation) in an unbroken chain of corporations beginning with the
employer corporation if, at the time of granting an option, each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
3. Administration.
(a) (1) The Plan shall be administered by the Compensation Committee (the
"Committee"), consisting of not less than two members, appointed by the
Corporation's Board of Directors (the "Board"). Alternatively, in the absence of
a designated committee, the entire Board shall serve as the Committee.
(2) At such time, if ever, as the Corporation registers a class of its
securities pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), the Committee members shall be required to be members of the Board,
each of whom must be "disinterested" within the meaning of Rule 16b-3(c)(2)(i)
under the 1934 Act, or alternatively, in the absence of a designated and
qualified committee, the entire Board shall serve as the Committee. Options
granted hereunder at any time when any Committee member is not "disinterested"
within the meaning of Rule 16b-3(c)(2)(i) under the 1934 Act shall not qualify
as exempt purchases under Rule 16b-3 of the 1934 Act. At all times after the
Corporation registers a class of securities under the 1934 Act, the Committee
shall endeavor to administer the Plan and grant options hereunder in a manner
that is compatible with the obligations of persons subject to Section 16 of the
1934 Act, although compliance with Section 16 is the obligation of the Optionee,
not the Corporation. Neither the Board nor the Corporation assumes any
responsibility for an Optionee's compliance with his obligations under Section
16 of the 1934 Act.
(b) The Committee shall have the authority in its discretion, subject to
and not inconsistent with the express provisions of the Plan, to administer the
Plan and to exercise all the powers and authorities either specifically granted
to it under the Plan or necessary or advisable in the administration of the
Plan, including (without limitation): the authority to grant options; to
determine which options shall constitute Incentive Stock Options and which
options shall constitute Non-qualified Stock Options; to determine the purchase
price of the shares of Common Stock covered by each option (the "Option Price");
to determine the persons to whom, and the time or times at which, options shall
be granted; to determine the number of shares to be covered by each option; to
determine Market Value per share; to interpret the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to determine the terms and
provisions of the Option Agreements (which need not be identical) entered into
in connection with options granted under the Plan; and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
The Committee may delegate to one or more of its
<PAGE>
members or to one or more agents such administrative duties as it may deem
advisable, and the Committee or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan.
(c) The Board shall fill all vacancies, however caused, in the Committee.
The Board may from time to time appoint additional members to the Committee, and
may at any time remove one or more Committee members and substitute others. One
member of the Committee shall be selected by the Board as chairman. The
Committee shall hold its meetings at such times and places as it shall deem
advisable. Options granted under the Plan shall be evidenced by duly adopted
resolutions of the Committee included in the minutes of the meeting at which
they are adopted or in a unanimous written consent.
(d) No member of the Board or Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any option
granted hereunder.
4. Eligibility.
(a) Subject to certain limitations hereinafter set forth, options may be
granted to employees of consultants to and officers and directors (whether or
not they are employees) of the Corporation or its present or future divisions
and Subsidiary Corporations. In determining the persons to whom options shall be
granted and the number of shares to be covered by each option, the Committee
shall take into account the duties of the respective persons, their present and
potential contributions to the success of the Corporation and such other factors
as the Committee shall deem relevant in connection with accomplishing the
purpose of the Plan. A person to whom an option has been granted hereunder is
sometimes referred to herein as an "Optionee."
(b) An Optionee shall be eligible to receive more than one grant of an
option during the term of the Plan, on the terms and subject to the restrictions
herein set forth.
5. Stock Reserved.
(a) The stock subject to options hereunder shall be shares of the
Corporation's Common Stock, no par value per share ("Common Stock"). The
aggregate number of shares of Common Stock as to which options may be granted
from time to time under the Plan, and the aggregate number which may be issued
to officers and directors, shall not exceed 2,000,000. Such shares may, in whole
or in part, be authorized but unissued shares or shares that shall have been or
that may be reacquired by the Corporation. The limitations established by this
Section 5(a) shall be subject to adjustment as provided in Section 8(i) hereof.
(b) In the event that any outstanding option under the Plan for any reason
expires or is terminated without having been exercised in full, the shares of
Common
<PAGE>
Stock allocable to the unexercised portion of such option (unless the Plan shall
have been terminated) shall become available for subsequent grants of options
under the Plan.
6. Incentive Stock Options.
(a) Options granted pursuant to this Section 6 are intended to constitute
Incentive Stock Options and shall be subject to the following special terms and
conditions, in addition to the general terms and conditions specified in Section
8 hereof. Only employees of the Corporation shall be entitled to receive
Incentive Stock Options.
(b) The aggregate Market Value (determined as of the date the Incentive
Stock Option is granted) of the shares of Common Stock with respect to which
Incentive Stock Options granted under this and any other plan of the Corporation
or any Parent Corporation or Subsidiary Corporation are exercisable for the
first time by an Optionee during any-calendar year may not exceed the amount
(generally, $100,000 per year) set forth in Section 422(d) of the Internal
Revenue Code.
(c) Incentive Stock Options granted under this Plan are intended to satisfy
all requirements for incentive stock options under Section 422 of the Internal
Revenue Code and the Treasury Regulations thereunder and, notwithstanding any
other provision of this Plan, the Plan and all Incentive Stock Options granted
under it shall be so construed, and all contrary provisions shall be so limited
in scope and effect and, to the extent they cannot be so limited, they shall be
void.
7. Non-qualified Stock Options. Options granted pursuant to this Section 7
are intended to constitute Non-qualified Stock Options and shall be subject only
to the general terms and conditions specified in Section 8 hereof.
8. Terms and Conditions of Options. Each option granted pursuant to the
Plan shall be evidenced by a written Option Agreement between the Corporation
and the Optionee, which agreement shall be substantially in the form of Exhibit
"A" attached hereto as modified from time to time by the Committee in its
discretion, and which shall comply with and be subject to the following terms
and conditions:
(a) Number of Shares. Each Option Agreement shall state the number of
shares of Common Stock to which the option relates.
(b) Type of Option. Each Option Agreement shall specifically identify the
portion, if any, of the option which constitutes an Incentive Stock Option and
the portion, if any, which constitutes a Non-qualified Stock Option.
(c) Option Price. (i) Each Option Agreement shall state the Option Price,
which (except as otherwise set forth in paragraphs 8(c)(ii) arid 8(c)(iii)
hereof) shall be not less than 100% of the Market Value per share on the date of
grant of the option.
<PAGE>
(ii) Any Incentive Stock Option granted under the Plan to a person
owning more than ten percent of the total combined voting power of the Common
Stock shall be exercisable at a price no less than 110% of the Market Value per
share on the date of grant of the Incentive Stock Option.
(iii) Any Non-qualified Stock Option granted under the Plan shall be
exercisable at a price no less than 85% of the Market Value per share on the
date of grant of the Non-qualified Stock Option.
(iv) The Option Price shall be subject to adjustment as provided in
Section 8(i) hereof.
(v) The date on which the Committee adopts a resolution expressly
granting an option shall be considered the day on which such option is granted,
unless a future date is specified in the resolution.
(d) Term of Option. Each Option shall be exercisable during the exercise
period as and at the times the Committee, in its sole discretion, may determine,
as reflected in tile Option Agreement; provided, however:
(i) The exercise period shall not exceed ten years from the date of
grant of the option.
(ii) Incentive Stock Options granted to a person owning more than ten
percent of the total combined voting power of the Common Stock of the
Corporation shall be for no more than five years;
(iii) The Committee shall have the authority to accelerate or extend
the exercisability of any outstanding option at such time and under such
circumstances as it, in its sole discretion, deems appropriate. No exercise
period may be extended to increase the term of the option beyond ten years from
the date of the grant.
(iv) The exercise period shall be subject to earlier termination as
provided in Sections 8(f) and 8(g) hereof, and furthermore shall be terminated
upon surrender of the option by the holder thereof if such surrender has been
authorized in advance by the Committee.
(e) Method of Exercise and Medium and Time of Payment.
(i) Each exercise of an option granted hereunder, whether in whole or
in part, shall be by written notice to the Secretary of the Corporation
designating the number of shares as to which the option is exercised, and shall
be accompanied by payment in fall of the Option Price (in cash, shares or
property) for the number of shares so designated, together with any written
statements reasonably required by the Company in order to fulfill its
obligations under any applicable securities laws.
<PAGE>
(ii) The Option Price shall be paid in cash, in shares of Common Stock
having a Market Value equal to such Option Price or in property or in a
combination of cash, shares of Common Stock and property, and (subject to
approval of the Board of Directors) may be effected in whole or in part (A) with
monies received from the Corporation at the time of exercise as a compensatory
cash payment, or (B) with monies borrowed from the Corporation pursuant to
repayment terms and conditions as shall be determined from time to time by the
Committee, in its discretion, separately with respect to each exercise of
options and each Optionee; provided, however, that each such method and time for
payment and each such borrowing and terms and conditions of repayment shall be
permitted by and be in compliance with applicable law.
(iii) The Board of Directors shall have the sole and absolute
discretion to determine whether or not property other than cash or Common Stock
may be used to purchase the shares of Common Stock hereunder and, if so, to
determine the value of the property received.
(f) Termination. Except as provided in this Section 8(f) and in Section
8(g) hereof, an option may not be exercised unless the Optionee is then an
employee or officer or director of or consultant to the Corporation or a
division or Subsidiary Corporation thereof (or a corporation or a Parent or
Subsidiary Corporation of such corporation issuing or assuming the option in a
transaction to which Section 424(a) of the Internal Revenue Code applies), and
unless the Optionee has remained continuously as an employee, officer or
director of or consultant to the Corporation since the date of grant of the
option.
(i) If the Optionee ceases to be an employee, officer or director of
or consultant to the Corporation (other than by reason of death, Disability or
retirement), all options - of such Optionee that are exercisable at the time of
such cessation may, unless earlier terminated in accordance with their terms, be
exercised within three months after such cessation; provided, however, that if
the employment or consulting relationship of an Optionee shall terminate, or if
a director shall be removed, for cause, all options theretofore granted to such
Optionee shall, to the extent not theretofore exercised, immediately terminate.
(ii) Nothing in the Plan or in any option granted pursuant hereto
shall confer upon an individual any right to continue in the employ of the
Corporation or any of its divisions or Subsidiary Corporations or interfere in
any way with the right of the Corporation or its shareholders or any such
division or Subsidiary Corporation to terminate such employment or other
relationship between the individual and the Corporation or any of its divisions
and Subsidiary Corporations.
(g) Death, Disability or Retirement of Optionee. If an Optionee shall die
while a director or officer of, or employed by, or a consultant to, the
Corporation or a Subsidiary Corporation or within three months after the
termination of such Optionee's employment, directorship, service as an officer
<PAGE>
or consulting relationship, other than termination for cause, or if the
Optionee's employment, directorship, service as an officer or consulting
relationship shall terminate by reason of Disability or retirement, all options
theretofore granted to such Optionee (whether or not otherwise exercisable;
unless earlier terminated in accordance with their terms), may be exercised by
the Optionee or by the Optionee's estate or by a person who acquired the right
to exercise such option by bequest or inheritance or otherwise by reason of the
death or Disability of the Optionee, at any time within one year after the date
of death, Disability or retirement of the Optionee; provided, however, that in
the case of Incentive Stock Options such one-year period shall be limited to
three months in the case of retirement.
(h) Transferability Restriction. (i) Options granted under the Plan shall
not be transferable other than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Internal Revenue Code or Title I of the Employee Retirement Income Security
Act, or the rules thereunder. Options may be exercised during the lifetime of
the Optionee only by the Optionee and thereafter only by his legal
representative.
(ii) Any attempted sale, pledge, assignment, hypothecation or other
transfer of an option contrary to the provisions hereof and the levy of any
execution, attachment or similar process upon an option shall be null and void
and without force or effect and shall result in termination of the option.
(iii) (A) As a condition to the transfer of any shares of Common Stock
issued upon exercise of an option granted under this Plan, the Corporation may
require an opinion of counsel, satisfactory to the Corporation, to the effect
that such transfer will not be in violation of the Securities Act of 1933 or any
other applicable securities laws or that such transfer has been registered under
federal and all applicable state securities laws. (B) Further, the Corporation
shall be authorized to refrain from delivering or transferring shares of Common
Stock issued under this Plan until the Board of Directors determines that such
delivery or transfer will not violate applicable securities laws and the
Optionee has tendered to the Corporation any federal state or local tax owed by
the Optionee as a result of exercising the option, or disposing of any Common
Stock, when the Corporation has a legal liability to satisfy such tax. (C) The
Corporation shall not be liable for damages due to delay in the delivery or
issuance of any stock certificate for any reason whatsoever, including, but not
limited to, a delay caused by listing requirements of any securities exchange or
any registration requirements under the Securities Act of 1933, the 1934 Act, or
under any other state or federal law, rule or regulation. (D) The Corporation is
under no obligation to take any action or incur any expense in order to register
or qualify the delivery or transfer of shares of Common Stock under applicable
securities laws or to perfect any exemption from such registration or
qualification. (E) The Corporation will have no liability to any Optionee for
refusing to deliver or transfer shares of Common Stock if such refusal is based
upon the provisions of this Paragraph.
(i) Effect of Certain Changes.
<PAGE>
(i) If there is any change in the number of outstanding shares of
Common Stock through the declaration of stock dividends, or through
recapitalization resulting in stock splits, or combinations or exchanges of such
shares, the number of shares of Common Stock available for options, the number
of such shares covered by outstanding options, and the price per share of such
options, shall be proportionately adjusted by the Committee to reflect any
increase or decrease in the number of issued shares of Common Stock; provided,
however, that any fractional shares resulting from such adjustment shall be
eliminated.
(ii) In the event of the proposed dissolution or liquidation of the
Corporation, or in the event of any corporate separation or division, including,
but not limited to, split-up, split-off or spin-off, or in the event of a merger
or consolidation of the Corporation with another corporation, the Committee may
provide that the holder of each option then exercisable shall have the right to
exercise such option (at its then Option Price) solely for the kind and amount
of shares of stock and other securities, property, cash or any combination
thereof which would be receivable upon such dissolution, liquidation, or
corporate separation or division, or merger or consolidation by a bolder of the
number of shares of Common Stock for which such option might have been exercised
immediately prior to such event; or the Committee may provide, in the
alternative, that each option granted under the Plan shall terminate as of a
date to be fixed by the Committee; provided, however, that not less than 30
days' written notice of the date so fixed shall be given to each Optionee, who
shall have the right, during the period of 30 days preceding such termination,
to exercise the options as to all or any part of the shares of Common Stock
covered thereby, including shares as to which such options would not otherwise
be exercisable.
(iii) Paragraph (II) of this Section 8(i) shall not apply to a merger
or consolidation in which the Corporation is the surviving corporation and
shares of Common Stock are not converted into or exchanged for stock, securities
of any other corporation, cash or any other thing of value. Notwithstanding the
preceding sentence, in case of any consolidation or merger of another
corporation into the Corporation in which the Corporation is the surviving
corporation and in which there is a reclassification or change (including a
change to the right to receive cash or other property) of the shares of Common
Stock (other than a change in par value, or from par value to no par value, or
as a result of a subdivision or combination, but including any change in such
shares into two or more classes or series of shares), the Committee may provide
that the holder of each option then exercisable shall have the right to exercise
such option solely for the kind and amount of shares of stock and other
securities (including those of any new direct or indirect parent of the
Corporation), property, cash or any combination thereof receivable upon such
reclassification, change, consolidation or merger by the holder of the number of
shares of Common Stock for which such option might have been exercised.
(iv) Notwithstanding paragraph (ii) of this Section 8(i), in the event
of any merger or consolidation in which the Company is not the surviving
corporation or any sale or transfer by the Company of all or substantially all
its assets or any tender offer or exchange offer for or the acquisition,
directly or indirectly, by any person or group of
<PAGE>
all or a majority of the then outstanding voting securities of the Company, all
options issued pursuant to the Plan shall become exercisable in full,
notwithstanding any other provision of the Plan or of any outstanding options
granted thereunder, including provisions providing for staggered vesting of
options, on and after (i) the fifteenth day prior to the effective date of such
merger, consolidation, sale, transfer or acquisition or (ii) the date of
commencement of such tender offer or exchange offer, as the case may be. To the
extent that Section 422(d) of the Internal Revenue Code would not permit the
provisions of the foregoing sentenc to apply to any outstanding options, such
options shall immediately upon the occurrence of the event described in the
foregoing sentence, be treated for all purposes of the Plan as nonstatutory
stock options and shall be immediately exercisable as such as provided in the
foregoing sentence. Notwithstanding the foregoing, in no event shall any option
be exercisable after the date of termination of the exercise period of such
option specified in Section 8(d).
(v) In the event of a change in the Common Stock of the Corporation as
presently constituted, which is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be the Common Stock within the meaning of the Plan.
(vi) To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive,
provided that each Incentive Stock Option granted pursuant to this Plan shall
not be adjusted in a manner that causes such option to fail to continue to
qualify as an Incentive Stock Option within the meaning of Section 422 of the
Internal Revenue Code.
(vii) Except as expressly provided in this Section 8(i), the Optionee
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger, consolidation or spin-off of assets or stock
of another corporation; and any issue by the Corporation of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
not 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 option. The grant
of an option pursuant to the Plan shall not affect in any way the right or power
of the Corporation to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or part o its business or assets.
(j) Rights as Shareholder - Non-Distributive Intent.
(i) Neither a person to whom an option is granted, nor such person's
legal representative, heir, legatee or distributee, shall be deemed to be the
holder of, or to have any rights of a holder with respect to, any shares subject
to such option,
<PAGE>
until after the option is exercised and the shares are issued to the person
exercising such option.
(ii) Upon exercise of an option at a time when there is no
registration statement in effect under the Securities Act of 1933 relating to
the shares issuable upon exercise, shares may be issued to the Optionee only if
the Optionee represents and warrants in writing to the Corporation that the
shares purchased are being acquired for investment and not with a view to the
distribution thereof.
(iii) No shares shall be issued upon the exercise of an option unless
and until there shall have been compliance with any then applicable requirements
of the Securities and Exchange Commission, or any other regulatory agencies
having jurisdiction over the Corporation.
(iv) No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distribution or
other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 8(i) hereof.
(k) Other Provisions. Option Agreements authorized under the Plan shall
contain such other provisions, including, without limitation, (i) the imposition
of restrictions upon the exercise of an option, and (ii) in the case of an
Incentive Stock Option, the inclusion of any condition not inconsistent with
such option qualifying as an Incentive Stock Option, as the Committee shall deem
advisable.
9. Agreement by Optionee Regarding Withholding Taxes. If the Committee
shall so require, as a condition of exercise, each Optionee shall agree that:
(a) No later than the date of exercise of any option granted hereunder, the
Optionee will pay to the Corporation or make arrangements satisfactory to the
Corporation regarding payment of any federal, state or local taxes of any kind
required by law to be withheld upon the exercise of such option; and
(b) The Corporation shall, to the extent permitted or required by law, have
the right to deduct federal, state and local taxes of any kind required by law
to be withheld upon the exercise of such option from any payment at any kind
otherwise due to the Optionee. If requested by the Optionee at the time of
exercise of an option granted under the Plan, the Committee in its discretion
may permit an Optionee to satisfy tax obligations resulting therefrom, in full
or in part, by the Corporation withholding a sufficient number of shares in
payment therefor.
(c) The Corporation shall not be obligated to advise any Optionee of the
existence of any tax or the amount which the Corporation will be so required to
withhold.
<PAGE>
10. Term of Plan. Options may be granted pursuant to the Plan from time to
time within a period of ten years from the date the Plan is adopted by the
Board, or the date the Plan is approved by the shareholders of the Corporation,
whichever is earlier.
11. Amendment and Termination of the Plan.
(a) (i) The Board at any time and from time to time may suspend, terminate,
modify or amend the Plan;
(ii) provided, however, that any amendment that would: (A) materially
increase the number of securities issuable under the Plan to persons who are
subject to Section 16(a) of the 1934 Act; or (B) grant eligibility to a class of
persons who are subject to Section 16(a) of the 1934 Act not included within the
terms of the Plan prior to the amendment; (C) materially increase the benefits
accruing to persons who are subject to Section 16(a) of the 1934 Act under the
Plan; or (D) require shareholder approval under applicable state law, the rules
and regulations of any national securities exchange on which the Corporation's
securities then may be listed, the Internal Revenue Code or any other applicable
law, shall be subject to the approval of the shareholders of the Corporation as
provided in Section 12 hereof;
(iii) provided further that any such increase or modification that may
result from adjustments authorized by Section 8(i) hereof or which are required
for compliance with the 1934 Act, the Internal Revenue Code, the Employee
Retirement Income Security Act of 1974, their rules or other laws or judicial
order, shall not require approval of shareholders.
(b) Except as provided in Section 8 hereof, no suspension, termination,
modification or amendment of the Plan may adversely affect any option previously
granted, unless the written consent of the Optionee is obtained.
12. Approval of Shareholders. The Plan shall take effect upon its adoption
by the Board but shall be subject to approval at a duly called and held meeting
of stockholders in conformance with the vote required by the Corporation's
charter documents, resolution of the Board, any other applicable law and the
rules and regulations thereunder, or the rules and regulations of any national
securities exchange upon which the Corporation's Common Stock is listed and
traded, each to the extent applicable.
13. Assumption. The terms and conditions of any outstanding options granted
pursuant to this Plan shall be assumed by, be binding upon and inure to the
benefit of any successor corp9ratiofl to the Corporation and shall continue to
be governed, to the extent applicable, by the terms and conditions of this Plan.
Such successor corporation shall not otherwise be obligated to assume this Plan.
14. Termination of Right of Action. Every right of action arising out of or
in connection with the Plan by or on behalf of the Corporation or of any
Subsidiary
<PAGE>
Corporation, or by any shareholder of the Corporation or of any Subsidiary
Corporation against any past, present or future member of the Board, or against
any employee, or by an employee (past, present or future) against the
Corporation or any Subsidiary Corporation, will, irrespective of the place where
an action may be brought and irrespective of the place of residence of any such
shareholder, director or employee, cease and be barred by the expiration of
three years from the date of the act or omission in respect of which such right
of action is alleged to have risen.
15. Tax Litigation. The Corporation shall have the right, but not the
obligation, to contest, at its expense, any tax ruling or decision,
administrative or judicial, on any issue which is related to the Plan and which
the Board believes to be important to holders of options issued under the Plan
and to conduct any such contest or any litigation arising therefrom to a final
decision.
16. Adoption.
(a) This Plan was adopted by the Board of Directors of the Corporation as
of February ____ , 2000.
(b) If this Plan is not approved by the shareholders of the Corporation
within 12 months of the date the Plan was approved by the Board of Directors of
the Corporation as required by Section 422(b)(1) of the Internal Revenue Code,
this Plan and the options granted hereunder shall be and remain effective, but
the reference to Incentive Stock Options herein shall be deleted and all options
granted hereunder shall be Non-qualified Stock Options pursuant to Section 7
hereof
CARMINA TECHNOLOGIES INC.
(the Corporation)
By
---------------------------
ATTEST:
- -------------------------
<PAGE>
Schedule "C" to the Agreement of Exchange
dated ___ day of February 2000
Exhibit "A" to
Stock Option Plan of
CARMINA TECHNOLOGIES INC.
STOCK OPTION AGREEMENT
----------------------
STOCK OPTION AGREEMENT made as of this 28th day of February , 2000, by and
between CARMINA TECHNOLOGIES INC., a Utah corporation (the "Corporation"), and
______________________ (the "Optionee").
In accordance with its Stock Option Plan (the "Plan"), a copy of which is
attached hereto and incorporated herein by reference, the Corporation desires,
in connection with the services of the Optionee, to provide the Optionee with an
opportunity to acquire shares of the no par value common stock (the "Common
Stock") of the Corporation on favorable terms and thereby grant the Optionee a
proprietary interest in the continued progress and the success of the business
of the Corporation.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein set forth and other good and valuable consideration, the Corporation and
the Optionee agree as follows:
1. Confirmation of Grant of Option. Pursuant to a determination of
Compensation Committee of the Board of Directors of the Corporation made on 28th
of February, 2000 (the "Date of Grant"), the Corporation, subject to the terms
of the Plan and of this Agreement, confirms that the Optionee has been
irrevocably granted on the Date of Grant, as a matter of separate inducement and
agreement, and in addition to and not in lieu of salary or other compensation
far services, a Non-qualified Stock Option pursuant to Section 7 of the Plan
(the "Option") to purchase an aggregate of _______________ shares of Common
Stock on the terms and conditions herein set forth, subject to adjustment as
provided in Section 8 hereof.
2. Purchase Price. The purchase price of shares of Common Stock covered by
the Option will be $ 0.10 per share subject to adjustment as provided in Section
8 hereof.
3. Exercise of Option. Except as otherwise provided in Section 8 of the
Plan, the Option may be exercised in whole or part at any time during the term
of the Option, provided, however, no Option shall be exercisable after the
expiration of the term thereof, and no Option shall be exercisable unless the
holder shall at the time of exercise have been an employee or director of or a
consultant to the Corporation or of any subsidiary of the Corporation for a
period of at least three months.
<PAGE>
4. Term of Option. The term of the Option will be through _________________
subject to earlier termination or cancellation as provided in this Agreement.
Except as otherwise provided in Section 7 hereof, the Option will not be
exercisable unless the Optionee shall, at the time of exercise, be an employee
or director of or consultant to the Corporation or of a subsidiary. As used in
this Agreement, the term "subsidiary" refers to and includes each "subsidiary
corporation" as defined in the Plan.
The holder of the Option will not have any rights to dividends or any other
rights of a shareholder with respect to any shares of Common Stock subject to
the Option until such shares shall have been issued to him (as evidenced by the
appropriate transfer agent of the Corporation) upon purchase of such shares
through exercise of the Option.
5. Transferability Restriction. The Option may not be assigned, transferred
or otherwise disposed of, or pledged or hypothecated in any way (whether by
operation of law or otherwise) otherwise than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order as defined by
the Internal Revenue Code or Title I of the Employee Retirement Income Security
Act, or the rules thereunder, and shall not be subject to execution, attachment,
or other process. Any assignment, transfer, pledge, hypothecation or other
disposition of the Option or any attempt to make any such levy of execution,
attachment or other process will cause the Option to terminate immediately upon
the happening of any such event, provided, however, that any such termination of
the Option under the foregoing provisions of this Paragraph 5 will not prejudice
any rights or remedies which the Corporation or any Subsidiary Corporation may
have under this Agreement or otherwise.
6. Exercise Upon Termination. The Optionee's rights to exercise this Option
upon termination of employment or cessation as a director or consultant shall be
as set forth in Section 8(f) of the Plan.
7. Death, Disability or Retirement of Optionee. The Optionee's rights to
exercise this Option upon the death, disability or retirement of the Optionee
shall be as set forth in Section 8(g) of the Plan.
8. Adjustments. The Option shall be subject to adjustment upon the
occurrence of certain events as set forth in Section 8(i) of the Plan.
9. No Registration Obligation. The Optionee understands that neither the
Option is not registered under the Securities Act of 1933, as amended (the
"Act") and that the Corporation has no obligation to register the shares of
Common Stock subject thereto and issuable upon the exercise thereof under the
Act. The Optionee represents that the Option is being acquired by him and that
such shares of Common Stock will be acquired by him for investment and all
certificates for the shares issued upon exercise of the Option will bear the
following legend unless such shares are registered under the Act prior to their
issuance.
<PAGE>
The shares represented by this Certificate have not been registered under
the Securities Act of 1933 (the "Act"), and are "restricted securities" as
that term is defined in Rule 144 under the Act. The shares may not be
offered for sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act, the availability of which
is to be established to the satisfaction of the Company.
The Optionee further understands and agrees that the Option may only be
exercised if, at the time of such exercise, the Optionee and the Corporation are
able to establish the existence of an exemption from registration under the Act
and applicable state laws, and both the Optionee and the Corporation agree to
use their best efforts to attempt to establish such exemption.
10. Notices. Each notice relating to this Agreement will be in writing and
delivered in person or by certified mail to the proper address. All notices to
the Corporation shall be addressed to it at its office at Suite 810, 540-5th
Ave, SW, Calgary, Alberta, Canada, T2P 0M2. All notices to the Optionee or other
person or persons then entitled to exercise the Option shall be addressed to the
Optionee or such other person or Persons at the Optionee's address below
specified. Anyone to whom a notice may be given under this Agreement may
designate a new address by notice to that effect
11. Approval of Counsel. The exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall be subject to approval
by the Corporation's counsel of all legal matters in connection therewith,
including compliance with the requirements of the Act, the Securities Exchange
Act of 1934, as amended, applicable state securities laws, the rules and
regulations thereunder, and the requirements of any stock exchange upon which
the Common Stock may then be listed
12. Benefits of Agreement. This Agreement will inure to the benefit of and
be binding upon each successor and assign of the Company. All obligations
imposed upon the Optionee and all rights granted to the Corporation under this
Agreement will be binding upon the Optionee's heirs, legal representatives and
successors.
13. Governmental and Other Regulations. The exercise of the Option and the
Corporation's obligation to sell and deliver shares upon the exercise of rights
to purchase shares is subject to all applicable federal and state laws, rules
and regulations, and to such approvals by any regulatory or governmental agency
which may, in the opinion of counsel for the Corporation, be required.
14. Incorporation of the Plan. The Plan is attached hereto and incorporated
herein by reference. In the event that any provision in this Agreement conflicts
with a provision in the Plan, the Plan shall govern.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed in its name by its President or a Vice-President and its corporate seal
to be
<PAGE>
hereunto affixed and attested by its Secretary or its Assistant Secretary
and the Optionee has hereunto set his hand and seal all as of the date first
above written.
CARMINA TECHNOLOGIES INC.
(Seal)
ATTEST: By
----------------------------
President
- -------------------------
Secretary
The undersigned Optionee understands the terms of this Option Agreement
and the attached Plan and hereby agrees to comply therewith.
Date _____________, 20___ __________________________________
Optionee:_________________________
Tax ID Number:____________________
Address:__________________________
__________________________________
__________________________________
<PAGE>
RESTATED
ARTICLES OF INCORPORATION
OF
CARMINA TECHNOLOGIES, INC.
Pursuant to ss.16-10a-1007 of the Utah Revised Business Corporation Act
("the Act") and a resolution heretofore adopted (by written consent pursuant to
ss.16-10a-821 of the Act) by its board of directors, Carmina Technologies, Inc.
hereby restates its Articles of Incorporation - as heretofore amended and
without any further amendment to be effectuated hereby, to-wit:
ARTICLE 1
The name of the corporation is "Carmina Technologies, Inc."
ARTICLE II
(a) Authorized Shares. The total number of shares of all classes of capital
stock which the Corporation shall have authority to issue is 50,000,000 shares,
consisting of 10,000,000 shares of no par value Preferred Stock and 40,000,000
shares of no par value common stock.
(b) Preferred Stock. The designations and powers, preferences and rights, and
qualifications and limitations of the Preferred Stock, the establishment of
different series of Preferred Stock, and variations in the relative rights and
preferences as between different series, shall be established in accordance with
the Utah Revised Business Corporation Act by the Board of Directors; shares of
Preferred Stock when issued shall not have any voting power unless such power
has been provided for by the Board of Directors.
(c) Common Stock. The shares of Common Stock shall when issued have unlimited
voting rights and be entitled to receive the net assets of the corporation on
dissolution.
ARTICLE III
A shareholder of the Corporation shall not be entitled to a preemptive right to
purchase, subscribe for, or otherwise acquire any unissued or treasury shares of
stock of the Corporation, or any options or warrants to purchase, subscribe for
or otherwise acquire any such unissued or treasury shares, or any shares, bonds,
notes, debentures, or other securities convertible into or carrying options or
warrants to purchase, subscribe for or otherwise acquire any such unissued or
treasury shares.
<PAGE>
ARTICLE IV
The corporation shall continue in existence perpetually unless sooner dissolved
according to law, and is organized to engage in any and all lawful acts and/or
activities for which corporations may be organized under the Utah Revised
Business Corporation Act.
ARTICLE V
At all meetings of the shareholders, one-third of all shares entitled to vote at
the meeting shall constitute a quorum, and the affirmative vote of a majority of
a quorum shall constitute the act of the shareholders.
ARTICLE VI
The corporation may take action by the written consent of fewer than all of the
shareholders entitled to vote with respect to the subject matter of an action in
question; provided, however, that in order to be valid any and all such written
consents shall be made and provided in accordance with all applicable
requirements of Section 16-10a-704 of the Utah Revised Business Corporation Act
and signed by the holders of not less than a majority of the corporation's
outstanding shares (calculated as of the record date provided for by Section
16-10a-704(6) of that Act.)
ARTICLE VII
(a) The board of directors of the Corporation shall consist of such number of
persons, not less than three, as shall be determined in accordance with the
by-laws from time to time. As of the effective date of this article the number
of directors is three.
(b) The officers of the Corporation are and shall hereafter be a President, one
or more Vice Presidents (as may be prescribed by the by-laws), a Secretary, a
Treasurer, and such other officers as may hereafter be designated by the board
of directors in a manner not inconsistent with the by-laws.
ARTICLE VIII
The Corporation shall indemnify any person who is or was a director to the
maximum extent provided by statute.
<PAGE>
The Corporation shall indemnify any person who is or was an officer, employee or
agent of the Corporation who is not a director, to the maximum extent provided
by law, or to a greater extent if consistent with law and if provided by
resolution of the Corporation's shareholders or directors, or in a contract.
The Corporation may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee, fiduciary or agent of the Corporation
and who while a director, officer, employee, fiduciary or agent of the
Corporation, is or was serving at the request of the Corporation as a director,
officer, partner, trustee, employee, fiduciary or agent of any other foreign or
domestic corporation, partnership, joint venture, trust, other enterprise or
employee benefit plan against any liability asserted against or incurred by him
in any such capacity or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
provisions of the statute.
ARTICLE IX
A director of the Corporation shall not be personally liable to the Corporation
or its shareholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Corporation or to its shareholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) for acts specified under ss.16-10-44 of the Utah Revised Business
Corporation Act or any amended or successor provision thereof, or (iv) for any
transaction from which the directors derived an improper personal benefit. If
the Utah Business Corporation Act is amended after this Article is adopted to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Utah
Business Corporation Act, as so amended.
Any repeal or modification of the foregoing paragraph by the shareholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
ARTICLE X
The officers, directors and other members of management of this Corporation
shall be subject to the doctrine of corporate opportunities only insofar as it
applies to business opportunities in which the Corporation has expressed an
interest as determined from time to time by the Corporation's Board of Directors
as evidenced by resolutions appearing in the Corporation's minutes. When such
areas of interest are delineated, all such business opportunities within such
areas of interest which come to the attention of the officers, directors and
other members of management of the Corporation shall be disclosed promptly to
the Corporation and made available to it. The Board of Directors may reject any
business opportunity presented to it and thereafter any officer, director and
other member of management may avail himself of such opportunity. Until such
time
<PAGE>
as the Corporation, through its Board of Directors, has designated an area of
interest, the officers, directors and other members of management of the
Corporation shall be free to engage in such areas of interest on their own and
the provisions hereof shall not limit the rights of any officer, director or
other member of management of the Corporation to continue a business existing
prior to the time that such area of interest is designated by the Corporation.
This provision shall not be construed to release any employee of the Corporation
(other than an officer, director or member of management) from any duties which
he may have to the Corporation.
# # #
Upon filing by the Division of Corporations and Commercial Code of the Utah
Department of Commerce these restated Articles of Incorporation of Carmina
Technologies, Inc. shall supersede the original articles of incorporation of
said corporation and all prior amendments to them.
EXECUTED on this 17 day of May, 2000 by:
--------------------------------------
Richard M. Day, Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
THE AMERICAS MINING CORPORATION
The Americas Mining Corporation hereby amends its Articles of Incorporation as
follows:
FIRST, the name of the corporation is "The Americas Mining Corporation".
SECOND, the text of each amendment adopted is:
(a) ARTICLE II is amended to now provide in its entirety:
"(a) Authorized Shares. The total number of shares of all classes of
capital stock which the Corporation shall have authority to issue is
20,000,000 shares, of which 5,000,000 shares shall be shares of
Preferred stock, no par value per share, and 15,000,000 shares shall
be shares of Common Stock, no par value per share.
"(b) Preferred Stock. The designations and powers, preferences and
rights, and qualifications and limitations of the Preferred Stock, the
establishment of different series of Preferred Stock, and variations
in the relative rights and preferences as between different series,
shall be established in accordance with the Utah Revised Business
Corporation Act by the Board of Directors; shares of Preferred Stock
when issued shall not have any voting power unless such power has been
provided by the board of directors.
(c) Common Stock. The shares of Common Stock shall when issued have
unlimited voting rights and be entitled to receive the net assets of
the corporation on dissolution."
(b) ARTICLE IV is amended to now provide in its entirety:
"The corporation shall continue in existence perpetually unless sooner
dissolved according to law, and is organized to engage in any and all
lawful acts and/or activities for which corporations may be organized
under the Utah Revised Business
<PAGE>
Corporation Act."
(c) ARTICLE V is amended to now in its entirety:
"At all meetings of the shareholders, one-third of all shares entitled
to vote at the meeting shall constitute a quorum, and the affirmative
vote of a majority of a quorum shall constitute the act of the
shareholders."
(d) ARTICLE VI is amended to now provide in its entirety:
"The corporation may take action by the written consent of fewer
than all of the shareholders entitled to vote with respect to the
subject matter of an action in question; provided, however, that in
order to be valid any and all such written consents shall be made and
provided in accordance with all applicable requirements of ss.
16-10a-704 of the Utah Revised Business Corporation Act and signed by
the holders of not less than a majority of the corporation's
outstanding shares (calculated as of the record date provided for by
ss. 16-10a-704(6)) of that Act"
(e) ARTICLE VII is amended now in its entirety:
"(a) The board of directors of the Corporation shall consist of such
number of persons, not less than three, as shall be determined in
accordance with the by-laws from time to time. As of the effective
date of this article the number of directors is three.
(b) The officers of the Corporation are and shall hereafter be a
President, one or more Vice Presidents (as may be prescribed by the
by-laws), a Secretary, a Treasurer, and such other officers as may
hereafter be designated by the board of directors in a manner not
inconsistent with the by-laws."
(f) ARTICLE XI (which at present contains provisions having to do with
"compromises with creditors") is deleted in its entirety
THIRD, the foregoing amendments do not provide for any exchange,
reclassification or cancellation of issued shares.
FOURTH, the foregoing amendments were first proposed by the corporation's board
of directors for submission to its shareholders, recommended by the board to the
shareholders, and then adopted by the shareholders at an Annual Meeting duly
held on March 20, 1999 at 203 SW "G" Street, Suite A, Grants Pass, OR.
<PAGE>
FIFTH, (a) the corporation had only one voting group at the time of said
meeting, that is the 4,502,300 shares of common stock it then had issued and
outstanding (all of which were under its Articles of Incorporation entitled to
vote on the amendments), and 2,400,000 shares of the corporation's said sole
voting group were indisputably represented at said meeting; and,
(b) 2,400,000 votes were cast for --and zero votes were cast against-- each
of the amendments set forth above by the corporation's sole voting group, which
number constituted more than a majority of the corporation's outstanding shares
and was sufficient for approval and adoption of the amendments by the
corporation's sole voting group.
WHEREFORE, the undersigned officer of The Americas Mining Corporation hereby
executes and files these Articles of Amendment pursuant to specific
authorization by its board of directors to do so, on this ____15th___ day of
___May_____, 2000:
/s/
------------------------------------
Richard M. Day, Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
THE AMERICAS MINING CORPORATION
The Americas Mining Corporation hereby amends its Articles of Incorporation as
follows:
FIRST, the name of the corporation is "The Americas Mining Corporation".
SECOND, the text of each amendment adopted is:
(a) ARTICLE I is amended to now provide in its entirety:
"The name of the corporation is "Carmina Technologies, Inc.".
(b) ARTICLE II is amended to now provide in its entirety:
(a) Authorized Shares. The total number of shares of all classes of
capital stock which the Corporation shall have authority to issue is
50,000,000 shares, consisting of 10,000,000 shares of no par value
Preferred stock and 40,000,000 shares of no par value common stock.
"(b) Preferred Stock. The designations and powers, preferences and
rights, and qualifications and limitations of the Preferred Stock, the
establishment of different series of Preferred Stock, and variations
in the relative rights and preferences as between different series,
shall be established in accordance with the Utah Revised Business
Corporation Act by the Board of Directors; shares of Preferred Stock
when issued shall not have any voting power unless such power has been
provided by the Board of Directors.
(c) Common Stock. The shares of Common Stock shall when issued have
unlimited voting rights and be entitled to receive the net assets of
the corporation on dissolution."
THIRD, the foregoing amendments do not provide for any exchange,
reclassification or cancellation of issued shares.
<PAGE>
FOURTH, the foregoing amendments were first proposed by the corporation's board
of directors for submission to its shareholders, recommended by the board to the
shareholders, and then adopted by the shareholders by the written consent
actions hereinafter described.
FIFTH, (a) the corporation had only one voting group as of January 24, 2000,
that is the 4,502,300 shares of common stock it then had issued and outstanding
(all of which were under its Articles of Incorporation entitled to vote on the
amendments); and,
(b) 2,300,000 votes were cast in favor of --and zero votes were cast
against-- each of the amendments set forth above by written shareholder
consents, which number constituted more than a majority of the corporation's
outstanding shares and was sufficient for approval and adoption of the
amendments by the corporation's sole voting group.
WHEREFORE, the undersigned officer of The Americas Mining Corporation hereby
executes and files these Articles of Amendment pursuant to specific
authorization by its board of directors to do so, on this ___16th___ day of
____May________, 2000.
/s/
----------------------------------
Richard M. Day, Secretary
<PAGE>
TAB 99 ASSIGNMENT AGREEMENT
THIS AGREEMENT MADE as of the 18th day of January A. D. 1999.
BETWEEN: The TAB 99 SYNDICATE comprising Lloyd Frizzell of Grants Pass, Oregon,
David Vallandingham of Williams, Oregon, Richard Day of Salt Lake
City, Utah, and Gemexport Limited an international business
corporation incorporated under the laws of Barbados, having an office
at the City of Grants Pass, Oregon, U.S.A. (hereafter collectively
called "the Assignor")
OF THE FIRST PART
-and-
THE AMERICAS MINING CORPORATION, a body incorporated under the laws of
the State of Utah, U.S.A., and having an office at Salt Lake City,
Utah, U.S.A. (herein after called "the Assignee")
OF THE SECOND PART
WHEREAS the Assignor is the beneficial owner of the following mining claims
recorded in the name of Lloyd Frizzell:
The TAB 99-1 through TAB 99-16 and TAB 99-25 claims located in Sec 15
Twp 41S Rng 9W of Willamette Meridian, Josephine County, Oregon and
TAB 99-17 through TAB 99-24 and TAB 99-26 through TAB 99-31 claims
located in Twp 18N Rng 4E of Humbolt Meridian, Del Norte County,
California (hereinafter called the "Claims")
by virtue of a syndicate agreement dated December 1, 1998 (attached hereto as
Exhibit "A" and made a part hereof and hereinafter called the "Syndicate
Agreement.")
AND WHEREAS the Assignor has agreed to assign to the Assignee and the
Assignee has agreed to purchase the Assignor's interest in the Claims on the
terms and conditions hereinafter set forth.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the sum of
one dollar now paid by the Assignee to the Assignor (receipt of which is hereby
acknowledged by the Assignor) and of the covenants and agreements of the parties
hereto hereinafter set forth, the parties hereto do hereby covenant and agree as
follows:
TRANSFER OF INTEREST
1.1 The Assignor hereby sells, assigns, transfers and conveys to the Assignee
all of its interest in the Claims to have and to hold the same, together with
all benefit and advantage to be derived therefrom.
<PAGE>
1.2 The Assignee hereby purchases and accepts from the Assignor all its interest
in the Claims.
1.3 The Assignor does not purport to convey and does not warrant any better
title to the Claims hereby assigned than it now has or is entitled to receive
but warrants and represents to the Assignee that it has not encumbered or
alienated any of its interest in the Claims conveyed hereunder.
ASSIGNOR'S COVENANTS
2.1 The Assignor covenants and agrees with the Assignee that the Assignee shall
have all the rights of the Assignor with respect to the Claims and without
limiting the generality of the foregoing, shall have the right to explore and
mine the properties contained within the Claims.
2.2 The Assignor consents and agrees with the Assignee that it shall indemnify
and save harmless the Assignee from and against all claims, causes of action,
suits and demands by any person or persons with respect to the Claims which
arise or may arise as a result of or in any manner connected with an act or
omission occurring prior to the date of this agreement.
ASSIGNOR'S REPRESENTATIONS
3.1 The Assignor represents and warrants that, as of the date of this agreement
the Claims are duly recorded and are in good standing.
3.2 The Assignor represents and warrants that the assignment contained herein
does not contravene or result in a breach of the Syndicate Agreement.
ASSIGNEE'S COVENANTS
4.1 The Assignee covenants and agrees that it shall, as part of the
consideration for the within assignment issue common shares of its capital stock
as now constituted to the members of the TAB 99 Syndicate in the amounts set
forth below opposite their names:
Name Number of Shares
---- ----------------
Lloyd Frizzell 100,000
David Vallandingham 100,000
Richard Day 200,000
Gemexport Limited 2,000,000
4.2 The Assignee covenants and agrees with the Assignor that it shall assume the
Assignor's obligations and burdens under the Claims and that it shall indemnity
and save harmless the Assignor from and against all claims, causes of action,
suits and demands by any person or persons with respect to the Claims.
MUTUAL CONVENANTS
5.1 The parties hereto mutually agree and covenant to exchange all relevant
information concerning the Claims and the Syndicate Agreement in order that the
provisions of the Claims and Syndicate Agreements be complied with and further
agree that if the Assignee has received
<PAGE>
notice of a default and fails to remedy or dispute such default within 5 days of
receipt of the said notice then the Assignor may, at the sole expense of the
Assignee, remedy or dispute such default.
MISCELLANEOUS
6.1 This agreement shall be governed and construed in accordance with the laws
of the State of Oregon.
6.2 This agreement shall enure to the benefit of and be binding upon the parties
hereto, their respective heirs, executors, administrators, successors and
assigns.
6.3 The parties hereto agree to do such further and other acts and execute such
further and other documents as may be necessary to carry out the true intent and
meaning of this Agreement.
6.4 Notwithstanding anything contained herein this agreement shall be effective
as of the 18th day of January 1999.
IN WITNESS WHEREOF the parties hereto have hereunto executed this Agreement
as of the day and year first above written.
TAB 99 SYNDICATE THE AMERICAS MINING CORPORATION
Per: /s/ Lloyd Frizzell Per: /s/ Richard Day
------------------------------------ ---------------------------
Lloyd Frizzell Richard Day
Per: /s/ David Vallandingham
------------------------------------
David Vallandingham
Per: /s/ Richard Day
------------------------------------
Richard Day
GEMEXPORT LIMITED
Per: /s/ Jurg Keller
------------------------------------
Jurg Keller
<PAGE>
EXHIBIT "A"
SYNDICATE AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 1st day of December, 1998.
BETWEEN: LLOYD FRIZZELL, a geologist, having an office at 1332 NW,Conklin Ave.,
Grants Pass, Oregon, 97526 (hereinafter called "Frizzell")
and
DAVID N. VALLANDIGHAM, a prospector, having an office at 203 Southwest
"G" Street, Suite A, Grants Pass, Oregon,97526 (hereinafter called
"Vallandigham")
and
RICHARD M. DAY, an attorney at law, having an office at 10 Exchange
Place, Suite 710, Salt Lake City, Utah, 84111 (hereinafter called
"Day")
and
GEMEXPORT LIMITED, an international investment corporation
incorporated under the laws of Barbados, and having an office at
Stevmar House, Rockley, Christ Church, Barbados (hereinafter called
"Gemexport")
WHEREAS the parties hereto have agreed to form a syndicate to be known as
the TAB 99 Syndicate (the "Syndicate") for the purpose of staking certain mining
claims in the States of Oregon and California with a view to vending them in due
course to a mining exploration company;
AND WHEREAS the parties hereto wish to set forth the terms and conditions
of their participation in the Syndicate;
NOW THEREFORE IN CONSIDERATION of the mutual covenants and agreements
herein contained and other good and valuable consideration, this Agreement
witnesses as follows:
1. The Syndicate shall be named the TAB 99 Syndicate.
2. Frizzell agrees to provide technical advice to the Syndicate as to the
location of the claims to be staked.
3. Vallandigham agrees to supervise the claim staking and recording of
the claims with the appropriate agencies.
4. Day agrees to use his best efforts to identify prospective purchaser
of the claims and to negotiate a sale on behalf of the Syndicate.
<PAGE>
2
5. Gemexport agrees to pay the costs of staking and recording the claims,
including the necessary deposits.
6. The parties hereto agree that ownership in the Syndicate shall be by
way of Units totaling 24 and that in consideration of their respective
contributions the parties shall receive the number of Units set forth
below opposite their names:
Units
-----
Frizzell 1
Vallandigham 1
Day 2
Gemexport 20
----
24
====
7. It is agreed that the claims shall be staked an recorded in the name
of Frizzell who shall hold them in trust for the Syndicate, the
members of which shall own interests in the claims in proportion to
the Units they hold.
8. Upon the claims having been sold and transferre to the purchaser by
the Syndicate, the proceeds of the sale shall be distributed to the
members of the Syndicate in proportion to the number of Units held and
this Agreement shall terminate.
9. All notices, requests or demands to or upon the parties hereto shall
be in writing and delivered or sent by registered mail postage
prepaid, by delivery or by facsimile transmission addressed, to the
parties respective addresses set out below, or to such other address
as may be specified by one of the parties hereto to the others and
notice given in the manner herein provided.
10. The address of the Syndicate shall be:
TAB 99 Syndicate
c/o Mr. Lloyd Frizzell
1332 NW Conklin Avenue
Grants Pass, OR 97526
11. The addresses of the members are:
Lloyd Frizzell
1332 NW Conklin Avenue
Grants Pass, OR 97526
David N. Vallandigham
710 Upper Powell Road,
Williams, OR 97544
Richard M. Day
10 Exchange Place, Suite 525
Salt Lake City, Utah 84111
<PAGE>
9
Gemexport Limited
c/o Stevmar Corporate Services Ltd.
Stevmar House, Rockley,
Christ Church, Barbados
12. This agreement shall terminate December 31, 2002 unless extended by
mutual consent. The parties hereto undertake and agree to execute and
deliver such further and other assurances and documents as may be
necessary to carry out the intention and give effect to all the terms
and conditions of this Agreement.
13. This Agreement may be altered or amended in any of its provisions when
any such changes are reduced to writing and signed by all of the
parties hereto, but not otherwise.
14. Time shall be of the essence of this Agreement.
15. The contract created under this Agreement and the rights of the
parties hereunder shall be governed by and construed and enforced in
accordance with the laws of the State of Oregon. Each of the parties
hereto irrevocably attorns to the jurisdiction of the courts of the
State of Oregon.
16. No provision of this agreement shall be deemed waived unless such
waiver is in writing. Any waiver of any default committed by any of
the parties hereto in the observance of the performance of any part of
this Agreement shall not extend to or be taken in any manner to affect
any other default.
17. This Agreement shall enure to the benefit of an be binding upon the
successors of the parties hereto. This Agreement is not assignable by
any party hereto without the express written consent of all of the
other parties.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day and
year first above written.
/s/ Lloyd Frizzell /s/ David N. Vallandigham
- ------------------------------ ------------------------------
LLOYD FRIZZELL DAVID N. VALLANDIGHAM
/s/ Richard M. Day
- ------------------------------ GEMEXPORT LIMITED
RICHARD M. DAY
Per: /s/ ILLEGIBLE
---------------------------
Director
<PAGE>
CORPORATE ACCESS NUMBER: 208299602
ALBERTA
BUSINESS CORPORATIONS ACT
CERTIFICATE
OF
INCORPORATION
RHONDA NETWORKDS INC.
WAS INCORPORATED IN ALBERTA ON 1999/04/07.
[SEAL OF REGISTRAR OF CORPORATIONS]
<PAGE>
Articles of Incorporation
For
RHONDA NETWORKS INC.
Classes of Shares: SEE SCHEDULE "A" ATTACHED
Number of Directors:
Maximum Number of Directors: 5
Minimum Number of Directors: 2
Restriction on Business To: NO RESTRICTIONS
Restrictions on Business From: NO RESTRICTIONS
Restrictions on Share Transfers: SEE SCHEDULE "B" ATTACHED
Other Rules or Provisions: N/A
<PAGE>
THIS IS SCHEDULE "A" TO THE
ARTICLES OF INCORPORATION
RHOND NETWORKS INC.
The shares which the Corporation is authorized to issue are:
(a) an unlimited number of Common Shares, the holders of which are
entitled:
(i) to receive notice of and to attend and vote at all meetings of
shareholders, except meetings at which only holders of a
specified class of shares other than this class are entitled to
vote; and
(ii) to receive any dividend declared by th Corporation on this class
of shares; and
(iii)subject to the rights, privileges and restrictions normally
attached to common shares; and
(b) an unlimited number of Preferred Shares which, as a class, have
attached thereto the following:
(i) The Preferred Shares may from time to time be issued in one or
more series, and the Directors may fix from time to time before
such issue the number of Preferred Shares which is to comprise
each series and the designation, rights, privileges, restrictions
and conditions attaching to each series of Preferred Shares
including, without limiting the generality of the foregoing, any
voting rights, the rate or amount of dividends or the method of
calculating dividends, the dates of payment thereof, the terms
and conditions of redemption, retraction, purchase and
conversion, if any, and any sinking fund or other provisions.
(ii) The Preferred Shares of each series shall, with respect to the
payment of dividends and the distribution of assets or return of
capital in the event of liquidation, dissolution or winding-up of
the Corporation, whether voluntary or involuntary, or any other
return of capital or distribution of the assets of the
Corporation among its shareholders for the purpose of winding up
its affairs, be entitled to preference over the Common Shares of
the Corporation ranking by their terms junior to the Preferred
Shares of that series. The Preferred Shares of any series may
also be given such other preferences, not inconsistent with these
Articles, over the Common Shares and any other shares of the
Corporation ranking by their terms junior to such Preferred
Shares as may be fixed in accordance with clause (b)(i); and
(iii)if any cumulative dividends or amounts payable on the return of
capital in respect of a series of Preferred Shares are not paid
in full, all series of Preferred Shares shall participate ratably
in respect of accumulated dividends and return of capital; and
THIS IS SCHEDULE "B" TO THE
ARTICLES OF INCORPORATION
RHONDA NETWORKS INC.
<PAGE>
The number of shareholders for the time being of the Corporation shall be
limited to fifty (50) or less (exclusive of persons who are in the employment of
the Corporation or that of an affiliate, and persons who, having been formerly
in the employment of the Corporation or that of an affiliate, were, while in
such employment and have continued after the termination of such employment, to
be shareholders of the Corporation) provided that where two or more persons hold
one or more shares in the Corporation jointly, they shall be treated as a single
shareholder.
No invitation shall be made to the public to subscribe for any shares,
debentures or securities (as the term "securities" is defined by the Securities
Act (Alberta) or any successor legislation of the Corporation.
<PAGE>
Incorporate Alberta Corporation - Registration Statement
Service Request Number: 1159144
Alberta Corporation Type: Named Alberta Corporation
Legal Entity Name: RHONDA NETWORKS INC.
French Equivalent Name:
Nuans Report Number: 64115845
Nuans Report Date: 1999/05/06
French Name Nuans Report Number:
French Name Nuans Report Date:
REGISTERED ADDRESS
Street: 810, 540 5th AVENUE, S.W.
Legal Description:
City: CALGARY
Province: ALBERTA
Postal Code: T2P 0M2
RECORDS ADDRESS
Street: 810, 540 5th AVENUE, S.W.
Legal Description:
City: CALGARY
Province: ALBERTA
Postal Code: T2P 0M2
ADDRESS FOR SERVICE BY MAIL
Post Office Box:
City:
Province:
Postal Code:
Internet Mail ID:
Classes Of Shares and any
Maximum Number (within each class): SEE SCHEDULE "A" ATTACHED
Restrictions On Share Transfers: SEE SCHEDULE "B" ATTACHED
Minimum Number Of Directors: 2
Maximum Number of Directors: 5
Restrictions On Business To: NO RESTRICTIONS
Restrictions On Business From: NO RESTRICTIONS
Other Provisions: N/A
Professional Endorsement Provided:
Directors Issue Shares In Series:
Future Dating Required:
Registration Date: 1999/05/07
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Directors
Last Name: ALSTON
First Name: JOHN
Middle Name: MILLWARD
Street/Box Number: 23 CAMBRIDGE PLACE N.W.
City: CALGARY
Province: ALBERTA
Postal Code: T2K 1P8
Country: CANADA
Appointment Date: 1999/05/07
Resident Canadian: Y
Status: Active
Last Name: ALSTON
First Name: Glen
Middle Name: Robert
Street/Box Number: 604 MACEWAN DRIVE N.W.
City: CALGARY
Province: ALBERTA
Postal Code: T3K 3T9
Country: CANADA
Appointment Date: 1999/05/07
Resident Canadian: Y
Status: Active
Attachments
Attachment Type Microfilm Bar Code Date Recorded
- --------------- ------------------ -------------
Share Capital ELECTRONIC 1999/05/07
Restrictions on Share Transfers ELECTRONIC 1999/05/07
