REGISTRATION NO. ____-______
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
Amended Form SB - 2
Amended Form SB - 2 REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
XUNANTUNICH INC.
(Exact name of registrant as specified in its charter)
Nevada 0273 76-0602960
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification
No.)
21112 123rd Avenue, Maple Ridge, BC V2X 4B4 CANADA
(604 ) 467-9116
(Address, including zip code, and telephone number, including
area code,
of registrant's principal executive offices)
Agent for Service: With a Copy to:
David Young Arthur J. Frost
XUNANTUNICH INC. Inc. Arthur J. Frost Ltd.
21112 123rd Avenue 7549 West Heatherbrae Drive
Maple Ridge, BC V2X 4B4 Canada Phoenix, AZ 85033
(604) 467-9116 (623) 849-2050
(Name, address, including zip code, and telephone number,
including area code,of agent for service)
Approximate date of commencement of proposed sale to
the public:
Approximate date of commencement of proposed sale to
the public:As soon as practicable after the effective
date of this Registration Statement.
As soon as practicable after the effective date of this
Registration Statement.
If any of the securities being registered on this form
are to be offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act, check the following box. [x]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act Registration Statement number of the
earlier effective Registration Statement for the same offering.
[ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and
list the Securities Act Registration Statement number of the
earlier effective Registration Statement for the same offering.
[ ]
If delivery of the Prospectus is expected to be made
pursuant to Rule 434, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Proposed Proposed
each Amount Maximum Maximum Amount of
Class of to be Offering Aggregate Registration
Securities Registered Price Offering Fee
registered per unit price
Common 1,510,000 $ .20 per $302,000.00 $ 84.56
stock shares share
No exchange or over-the-counter market exists for XUNANTUNICH
INC. common stock. The average price paid for XUNANTUNICH INC.
common stock was $.0004 per share.
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to such section 8(a), may
determine.
We will amend and complete the information in this Prospectus.
Although we are permitted by US federal securities law to offer
these securities using this Prospectus, we may not sell them or
accept your offer to buy them until the documentation filed with
the SEC relating to these securities has been declared effective
by the SEC. This Prospectus is not an offer to sell these
securities or our solicitation of your offer to buy these
securities in any jurisdiction where that would not be permitted
or legal.
SUBJECT TO COMPLETION
Prospectus
June 22, 2000
XUNANTUNICH INC.
21112 123rd Avenue
Maple ridge, BC V2X 4B4 Canada
1,510,000 Shares of Common Stock
to be sold by the registrant as issuer and current shareholders
This is the initial public offering of common stock of
Xunantunich Inc. and no public market currently exists for these
shares. Xunantunich Inc. is offering for sale up to one million
shares of its common stock on a "self-underwritten" best efforts
basis at a price of $0.20 per share for a period of one hundred
and eighty days (six months) following the acceptance of the
Registration Statement, of which this Prospectus forms a part.
No commissions will be paid for the sale of the 1,000,000 shares
offered by Xunantunich Inc. unless a broker/dealer agrees to
market them for us. In that case, commissions will be negotiated
and a post-effective amendment will be filed with the SEC
revealing the terms and conditions of the commissions and
expenses charged. The most recent sale of Xunantunich Inc.
common stock was in October, 1999 at a price of $0.001 per share.
Only some of the proceeds from the sale of stock in this offering
will be available to Xunantunich Inc. This Prospectus is part of
a Registration Statement that permits selling shareholders to
sell their shares when this Prospectus becomes effective or in
the future. The shareholders have 510,000 shares that they are
clearing for sale.
This investment involves a high degree of risk. See "risk
factors" beginning on page 1.
Neither the SEC nor any state securities commission has approved
or disapproved of these securities or passed upon the adequacy or
accuracy of this Prospectus. The SEC has not made any
recommendations that you buy or not buy the shares. Any
representation to the contrary is a criminal offense.
PART I - SUMMARY INFORMATION AND RISK FACTORS.
Prospectus Summary.
Xunantunich Inc. is a corporation formed under the laws of the
State of Nevada whose principal executive offices are located in
Maple Ridge, British Columbia, Canada.
The primary objective of the business is designed to market high-
quality, low-cost vitamins, minerals, nutritional supplements, and
other health and fitness products to medical professionals,
alternative health professionals, martial arts studios and
instructors, sports and fitness trainers, other health and fitness
professionals, school and other fund raising programs and other
similar types of customers via the Internet for sale to their
clients.
Name, Address, and Telephone Number of Registrant
Xunantunich Inc.
21112 123rd Avenue
Maple Ridge, BC V2X 4B4, CANADA
(604) 467-7982
The Offering
- Price per share offered $0.20
- common stock offered by the company 1,000,000 shares
- common stock offered by selling shareholders 510,000 shares
- common stock to be outstanding after the 6,000,000 shares
offering (assuming all shares are sold)
- use of proceeds - to fund marketing and setting up of dealers
to handle line of vitamins and mineral supplements.
Risk Factors
An investment in the shares of Xunantunich Inc. involves a high
degree of risk. You should carefully read all of the following
Risk Factors as well as the rest of this Registration Statement.
Management of Xunantunich Inc. believes that the following Risk
Factors describe all of the material risks of which it is aware.
Risk factors affecting operating results
We have had losses since inception and expect such losses to
continue for the foreseeable future.
Xunantunich Inc. has never had any revenues. Costs are incurred
to set up the business plan and to get into business. While the
licensor, Vitamineralherb.com ('Vita") has set up the master web
page and organized the processing of purchases, we must provide
our own accounting systems and sales planning including finding
and hiring good, reliable sales people. These efforts will use
our cash reserves. We will not have any substantial cash reserves
until this Offering is complete. If this Offering is not
completed, we will not be able to get into business. This could
have a serious affect on the price of our stock.
Once we get into business and sales begin, we still expect to lose
money for a considerable period. We will record losses until our
profits from sales exceed our expenses. If we do not accomplish
this, any and all funds that we have in reserve will be used up.
You should consider these facts carefully before you invest.
We do not expect to have any revenues from sales of health
products until some indefinite time in the future.
A great many things must happen before we receive any revenues, at
all. They are:
- this Registration Statement and Prospectus must be accepted
by the Securities and Exchange Commission;
- this Offering must be successfully completed and the funds
received;
- competent administrative people must be hired;
- a minimum of two experienced sales people must be obtained.
After the proper people are hired, it will still take time to
acquaint them with the business plan, the product and the
territory. We cannot expect to generate any kind of sales
activity or revenues until all of the above items have come to
pass. This time lag will have a negative affect on the price of
the stock, if a market ever develops.
Costs of getting new customers for our health products and keeping
them are unknown.
Xunantunich Inc. does not have any experience as to the costs of
setting up a new customer and keeping that customer. We do not
know for sure how acceptable our business is to potential clients.
If repeated calls are made to obtain the first order and further
orders, frequent service calls are necessary to keep that customer
happy. The costs involved could well be greater than the gross
profit on any sale made to that customer. If this should to be
the case, we would lose money on each customer and the whole
business plan would prove to be unworkable.
Our business is sensitive to changes in the prices of Vita and its
competitors.
We have no control over the prices we pay for the products we
sell. Vitamineralherb.com Corp. sets the wholesale and the retail
price of all the products they supply. Vita, in turn, is subject
to pricing pressures put on by their competition. If, for any
reason, Vita's competitors decide to lower their prices, even
below their costs, Vita and Xunantunich Inc. would be forced to
follow. The result? We would lose money until the situation
changed. This should be considered by all prospective investors.
Xunantunich Inc.will compete with other Internet retailers and may
not achieve the customer base necessary to become or remain
profitable
Our future revenues and profits, if any, depend upon the
widespread acceptance and use of the Internet as an effective
medium of business by target consumers. Consumers may not choose
to do business over the Internet in sufficient number to establish
the customer base necessary to obtain revenues and achieve
profitable operations. Even if use of the Internet and electronic
commerce continues to increase, the online vitamins market may not
develop. Xunantunich Inc. may therefore be unable to successfully
market and sell its product, in which case it would not become
profitable.
Failure of the licensor to supply one or more services will hamper
our ability to do business.
As part of its license, Xunantunich Inc.'s licensor has agreed to
provide and maintain;
(1) a website through which orders are placed and
(2) a payment system for receipt of payments from customers and
disbursement of funds
to Xunantunich Inc. and its supplier.
If the licensor fails to provide these services, Xunantunich
Inc.may be unable to conduct its business. If we are unable to
conduct business, we may lose customers and revenues. The future
success of Xunantunich Inc. will depend, in part, on the
licensor's use of leading technologies to provide seamless access
to and services through its website. Computer viruses or problems
caused by third parties could lead to interruptions, delays or
cessation in service to Xunantunich Inc. If the licensor does not
maintain an up-to-date effective website our online sales may not
be effective.
We are dependent on a variety of service providers that may or may
not deliver adequate service.
Xunantunich Inc. is dependent on other service providers with the
exception of direct sales to customers. We will have no control
over the business practices and equipment of these providers. We
are forced to rely on their word that their systems are protected
against damage from fire, earthquakes, power loss, system failures
or similar events. In addition, failure of telecommunications
systems, for any reason, could cause interruptions in the services
we offer.
Xunantunich Inc. will base expenses on what we think sales will be
in the future.
We have no basis for making predictions as to what sales volume we
can achieve and how long it will take. Like any new, untried and
unproven business, management will try to estimate sales volume
and on that estimate will budget for expenses. If they are wrong
estimates or guesses, it is probable that expenses could be much
higher and sales much lower, or both. If this proves to be the
case, it is bound to result in losses. This set of events could
have a very negative affect on your investment in this company.
We may experience a large turnover in personnel before getting
reliable employees.
Hiring reliable and competent staff is always a problem, even for
established companies. For a company like Xunantunich, Inc.,
which is entering entirely new and unproven business areas, it is
even more of a problem. It is especially difficult to prejudge
the degree of success of sales people. This is likely to result
in the hiring of several people, training new employees
continuously, large expenses with little or no sales. Again, a
negative affect on the possible profitability and on the value of
the stock.
We may be unable to adjust to changes in consumer preferences.
Consumers of vitamin, mineral and herbal supplements have changing
requirements which we will have to adjust to. Not only are they
looking for new and different products but they are looking for
new and better ways to take standard products. In order to be
successful, we will need to react to these changes quickly. We
are completely dependent upon Vita to respond to these changes in
the market. We cannot be sure that Vita has the ability to
respond quickly to adjust their products to the changing tastes.
Failure to do so could mean that our sales could lag, our profits,
if any, could go down and stock prices be forced down.
We do not have the ability to react to technology changes of the
Internet.
Internet access and E-commerce are affected by rapidly changing
technology, new industry standards, changes in customer needs and
frequent introduction of new services. Part of our success or
failure will depend on being able to effectively use leading
technologies; to continue to handle new technical developments and
to keep our existing services up to date and develop new services
to meet changing customer needs quickly and at the same time keep
our costs in line.
We are totally dependent on Vita to react quickly to these
changes. They are completely in charge of the Internet aspect of
our business. They may feel that they do not have to change and
that could have a negative affect on our business or if they are
willing to change, their decision to do so could take a long time
and again, the results would seriously affect the success or
failure of our business. You would be wise to consider these
facts when thinking about investing.
Growth strategy and potential acquisitions.
You cannot be sure that Xunantunich Inc. will be successful in
implementing its growth strategy. Failure could result in serious
losses and if severe enough could result in the failure of our
business.
Sales development will depend on our retail distributors accepting
our business concept and their efforts in selling our products to
the consumer. The growth rate of sales will depend on the quality
of our sales people.
Another part of our growth strategy; the strategic acquisition of
similar businesses, involves certain risks, including, among
others:
- the difficulty in assimilating operations and personnel;
- the potential disruption of ongoing business at the time of
acquisition;
- the possible inability of management to take advantage of the
combined operations; after acquisition;
- the risks of entering markets in which we have little or no
prior experience;
- and potential bad effects to relationships with employees and
customers as a result of changes in management.
In addition, any such transaction could have a negative affect on
our operating results due to dilution. This dilution of present
stockholder value could come from the issuance of common stock,
increasing the debt and the costs of goodwill and other intangible
assets, if any.
Competition.
The market for Internet access to individuals is extremely
competitive. Almost anyone can start an Internet business. Most
startups are doomed to failure. We believe that the main things
that determine success in this market are a reputation for
reliability and service, effective customer support, pricing,
creative marketing, easy-to-use software and geographic coverage.
We think we have all of those things but until the business is
operating you cannot rely on our being successful. This fact
needs to be considered before you invest.
Other important factors include the timing of new products and the
economy. We do not know that Xunantunich Inc. will be able to
compete successfully against current or future competitors. We
also do not know if that competition will not have a bad effect on
our business, financial condition and possibility of profit.
Competitors could include many larger companies that may have much
greater market presence and financial, technical, marketing and
other resources than Xunantunich Inc.
Xunantunich Inc. will soon need full-time management and added
personnel which may be difficult to find.
The future success of Xunantunich Inc. depends upon the efforts of
Mark, Michael, Florence and Grant Cramer, its current officers and
directors. They now serve on an "as needed" basis. Upon the
completion of part or all of this offering, one or more of the
Cramers will be needed full-time. We cannot be sure that any of
the Officers and Directors will act in a full-time capacity.
We have no employment contracts with any officer or director. All
have other business interests and occupations and we cannot be
sure that one or all would be available on a full-time basis. If
these key people are not available when they are needed it could
delay getting into business and cause a severe drain on our
available cash. You should be aware that this would affect the
price of the common stock, if and when a market is established for
the shares.
Other senior management and technical, marketing and sales
personnel will be needed. Our success also depends on our ability
to attract and keep this highly qualified management, technical,
marketing and sales personnel. If we cannot attract qualified
personnel it would affect the business, financial condition and
profits, if any.
Security Risks
The Vitamineralherb.com. Internet website may be vulnerable to
computer viruses. Other problems could be caused by customers,
connected Internet sites, the interconnecting networks and the
various telephone networks. Computer viruses or problems caused
by third parties could lead to interruptions, delays or halting of
service to Xunantunich Inc., our dealers and customers.
It is our intention and the intention of Vita to install and
maintain security measures to prevent any of the problems
mentioned above but you should realize that such measures have
been circumvented in the past. Neither you nor we can be sure
that measures taken by both companies will not be circumvented in
the future.
The future market for our health products New and Uncertain Market
New and Uncertain Market is unsure.
Internet - accessible vitamin, health, and nutritional products
and related services is a fairly new market. The success of
Xunantunich Inc. will depend upon the continuing development and
expansion of the Internet. We also are counting on the desire on
the part of the public for Internet goods and services. If
growing demand for Internet goods and services fails to continue
or growth slows or becomes saturated with competitors, our volume
of business, operating results and financial condition may be
affected badly. If, on the other hand, the Internet continues to
experience rapid growth in number of users and level of use, we
cannot be sure that the Internet will be able to handle such
growth.
You should be aware of potential product and sales practices
liability.
Xunantunich Inc. has no control over its customers' use of health
and vitamin supplements after the sale. In addition, we have
little control over the online practices and the information
passed through or stored on our systems by its customers or
members.
The law relating to the liability of Internet access providers and
online service companies for incorrect use of the Internet and
information carried on or spread through their networks is
unsettled. Although we do not plan to actively monitor the
content of our customers' Internet transmissions, someone may
claim that we had knowledge of such content. It is possible that,
if Xunantunich Inc. were to be prosecuted that any defenses to
liability would not be applicable.
We may be subject to future government regulations on the sale of
our products.
Internet-related regulatory policies are continuing to develop,
and it is possible that Xunantunich Inc. could be exposed to new
regulation in the future. Due to the increasing popularity and
use of the Internet, it is possible that additional federal, state
or other laws and regulations may be adopted. These could cover
issues such as content, privacy, encryption standards, consumer
protection, electronic commerce, taxation, copyright infringement
and other issues.
We will definitely need additional capital.
Xunantunich Inc. does not have sufficient capital to properly get
into business, to respond to new technical developments or
competition or to take advantage of unexpected opportunities.
Such items as special marketing programs, the development of new
services or opportunities to acquire complimentary businesses
require capital. Our success, if any, of establishing the
business, creation of sales and follow-up service depends upon new
capital through this Offering.
No other source of capital has been approached and if this
Offering is not at least partially successful, we do not have
other sources. If other sources are available we have no idea
whether capital can be obtained on terms and conditions that are
acceptable. Further, any such financing may be upon terms that
result in dilution or considerable lessening of value of the
shares currently held by Xunantunich Inc. shareholders.
Risks Related to the Securities Market
Xunantunich Inc. common stock has no prior market, and prices may
decline after the effectiveness of this Prospectus and subsequent
resale of shares by selling shareholders.
There is no public market for the common stock of Xunantunich Inc.
and you should not rely on the possibility that a market will
develop or that any shareholder will be able to sell his shares
without considerable delay, if at all.
If there is a market, the price you may receive for the common
stock may be lower than the purchase price If a market should
develop, the price may be highly volatile. In addition, an active
public market may not develop or be sustained. If Xunantunich
Inc. and selling stockholders sell substantial amounts of common
stock through this Offering or in a public market (should one
develop), the market price of its common stock could fall. Any or
all of these factors will have an affect on the price you would
receive if you decided to sell all or part of your stock, should
you decide to invest.
Many brokerage firms may not be willing to handle transactions in
our securities. Even if a buyer finds a broker willing to buy or
sell the stock of Xunantunich Inc., the combination of brokerage
commissions, state transfer taxes, if any, and other selling costs
may be larger than the selling price.
Many lending institutions will not permit the use of such
securities as collateral for loans. Thus, you may be unable to
sell or recover your investment in Xunantunich Inc. stock.
The securities of Xunantunich Inc., when and if they become
available for trading, will be subject to the Securities and
Exchange Commission rule that imposes special sales practice
requirements upon broker-dealers that sell such securities to
other than established customers or accredited investors. For
purposes of the rule, the phrase "accredited investors" means, in
general
terms:
a) institutions with assets exceeding $5,000,000
b) individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or
that, combined with a spouse's income, exceeds
$300,000).
For transactions covered by the rule, the broker-dealer must make
a special suitability determination for the purchaser and receive
the purchaser's written agreement to the transaction prior to the
sale. Consequently, the rule may affect the ability of purchasers
of Xunantunich Inc. securities to buy or sell in any market that
may develop.
Investors may face significant restrictions on the resale of
Xunantunich Inc. stock due to state and federal laws and
regulations.
Because the securities of Xunantunich Inc. have not been
registered for resale under the blue sky laws of any state, the
holders of such shares and those persons desiring to purchase them
in any trading market that may develop in the future should be
aware that there may be significant state blue sky law
restrictions on the ability of investors to sell and on purchasers
to buy its securities. Accordingly, investors should consider the
secondary market for Xunantunich Inc. securities to be a limited
one. You may be unable to sell your stock without the significant
expense of state registration or qualification.
In addition, the Securities and Exchange Commission has adopted a
number of rules to regulate "penny stocks." Because our
securities may constitute a penny stock within the meaning of the
rules, the rules would apply to Xunantunich Inc. and its
securities. The rules may further affect your ability to sell
your shares in any market that may develop.
Shareholders should be aware that, according to the Securities and
Exchange Commission Release No. 34-29093, the market for penny
stocks has suffered in recent years from patterns of fraud and
abuse.
Summary of risks relating to penny stocks.
1) Xunantunich Inc. stock is a penny stock.
2) Some states will not allow you to sell to their citizens.
3) Some broker/dealers will not handle transactions in penny
stocks.
4) SEC rules make selling your stock a cumbersome procedure.
5) Penny stock markets can be very volatile with large swings
up or down.
Management of Xunantunich Inc. believes it has described above all
material risks known to it at this time.
Use of Proceeds
Legal Fees $30,000.00
Accounting 10,000.00
Electronic filing and printing 5,000.00
Start up costs (office equipment,
telephone
system, computers and software) 60,000.00
Working Capital 95,000.00*
Total 200,000.00
* Assumes offering is fully subscribed to. Working capital
figure will be adjusted downward in the event all or any part of
the offering is sold through a Broker/Dealer or total offering is
not subscribed to.
We have estimated that we will have approximately $95,000
working capital if this offering is fully subscribed to. This
money will be used for hiring sales people, office staff and
paying the expenses of getting the business started. This money
may or may not be enough to run the business until sales revenues
can take over. If it is not enough we will be forced to look for
more funding. No arrangements have been made for this funding.
Determination of Offering Price
The offering price of this issue was set in a purely arbitrary
manner. We determined the amount of money needed to start the
business; added a contingency amount; allowed for printing, legal
and accounting costs and possible commissions if a Broker/Dealer
should become involved with the sale to the public of this issue.
We also took into account the resultant number of shares in the
"float", i.e. the number of shares available to be traded. The
final consideration was the perceived market capitalization (the
theoretical total worth of the shares of Xunantunich Inc. if they
were all sold at a specific price at the same time).
Dilution
Xunantunich Inc., prior to this offering has 5,000,000 shares of
stock issued and outstanding. 510,000 shares of this amount are
being qualified for sale by present shareholders as part of this
Registration Statement. The following table will show the net
tangible value of the shares before and after shares are
subscribed in this offering.
Before After 50% After 100%
Offering of Offering of Offering
- - Net tangible book value .0005 $.0010 $.033
- - Increase in net NA $.0005 $.033
tangible book value
- - Dilution factor NA $.1995 $.167
The above table indicates that the net tangible book value of
Xunantunich is 1/20 of one cent. If half of this offering is
subscribed to, you would lose 19.95 cents value of the 20 cents
you paid. If all of the offering were completed you would still
lose 16.7 cents of the 20 cents you invested.
The price paid by Officers, Directors and affiliates was $.001 or
one mill per share. Compare this price with the $.20 you will
pay. These are facts that should be carefully considered.
If you are thinking about investing, you should be aware that the
price of the shares of Xunantunich Inc. might not bear any direct
relationship to net tangible book value per share. The price
received by selling stockholders and paid by purchasing investors
will be determined by supply and demand. If the demand for the
common stock exceeds the available supply, the price will tend to
go up; if the supply exceeds the demand, the price will tend to go
down. In both of the above cases the change in price may have no
relation to the book value of Xunantunich Inc. whether it is
profitable or not.
Selling security holders
The following are the shareholders for whose accounts the shares
are being offered; the amount of securities owned by such
shareholder prior to this offering; the amount to be offered for
such shareholder's account; and the amount to be owned by such
shareholder following completion of the offering:
Number No.
Number of of Percent
Position of Shares Shares After
Name with Shares Offered After Sale
Company Owned Sale
Rod Albers None 1,000 1,000 -0- -0-
Allison Flechl None 251,000 21,000 -0- -0-
Kodi Flechl None 1,000 1,000 -0- -0-
Michael Flynn None 1,000 1,000 -0- -0-
James Fortin None 1,000 1,000 -0- -0-
Peter James None 1,000 1,000 -0- -0-
Sharon None 1,000 1,000 -0- -0-
Marcotte
Al Sanderson None 1,000 1,000 -0- -0-
Jeremy None 1,000 1,000 -0- -0-
Yasenuik
Adrienne None 1,000 1,000 -0- -0-
Yasenuik
David Young None 250,000 250,000 -0- -0-
Plan of Distribution
This is a self - underwritten Offering. This Prospectus is part
of a Registration Statement that permits the Officers and
Directors of Xunantunich Inc. to sell directly to the public, with
no commission or other remuneration payable. At the discretion of
our Board of Directors, an underwriting contract may be entered
into with one or more Broker/Dealers on a "best efforts" or firm
basis. In this case, commissions and expenses within the
guidelines of the NASD would be negotiated. We will be required
to halt sales and file a post-effective amendment to this
Prospectus outlining the payment to the broker/dealer(s).
This Prospectus is also part of a Registration Statement that
enables selling shareholders to sell their shares on a continuous
or delayed basis in the future. Xunantunich Inc. has not
committed to keep the Registration Statement effective for any set
period of time past the 180 days mentioned above.
While the Registration Statement is effective, selling
shareholders may sell their shares directly to the public, without
the aid of a broker or dealer, or they may sell their shares
through a broker or dealer if the stock of Xunantunich Inc. is
authorized for inclusion on the OTC bulletin board or any other
exchange or quotation service. Any commission, fee or other
compensation of a broker or dealer would depend on the brokers or
dealers involved in the transaction.
No public market currently exists for shares of Xunantunich Inc.
common stock. Xunantunich Inc. intends to apply to have its
shares traded on the NASD OTC Bulletin Board.
Legal Proceedings.
We are not aware of any legal proceedings that have been or are
currently being undertaken for or against Xunantunich Inc. nor is
any contemplated
Directors, executive officers, promoters and control persons.
The directors and executive officers currently serving Xunantunich
Inc. are as follows:
Name Age Positions Held and Tenure
Mark Cramer 59 President and Director since
November, 1999
Florence Cramer 59 Secretary/Treasurer and
Director since November/99
Michael Cramer 34 Vice President and Director
Since December, 1999
Grant Cramer 28 Director since
December/99
The directors named above will serve until the first annual
meeting of Xunantunich Inc. stockholders. Thereafter, directors
will be elected for one-year terms at the annual stockholders'
meeting. Officers will hold their positions at the pleasure of
the Board of Directors, absent any employment agreement, of which
none currently exists or is contemplated. There is no arrangement
or understanding between the directors and officers of Xunantunich
Inc. and any other person pursuant to which any director or
officer was or is to be selected as a director or officer.
Biographical information
Mark Cramer. Mr. Cramer, Xunantunich Inc.'s President, has served
as an officer and director since November, 1999. Since 1988, Mr.
Cramer has been actively involved as a Financial Consultant in the
Province of British Columbia, Canada. He holds a Masters Degree
from Simon Fraser University, holds life and mutual funds
licenses. Mr. Cramer is the principal shareholder in IDF
Financial Services, Inc., a securities dealer, through which he
has obtained registration to sell securities in the Province of
British Columbia, only. He has a Chartered Financial Planning
degree. He is President, Chairman and major shareholder in
Comprehensive Financial Services, Inc., a full-service financial
planning and consulting company. He is also President and
Chairman of River Ranch Resort Corp., a full service facility
catering to hunters, fishermen, snowmobilers and nature lovers.
In 1987, Mr. Cramer retired after a twenty-five year career as
teacher, principal and Administrative Assistant to the
Superintendent of Schools, District #57, British Columbia.
Florence Cramer. Mrs. Cramer, Xunantunich Inc.'s
Secretary/Treasurer has served as an officer and director since
November, 1999. She has a multi-year background as a Life
Underwriter and Financial Planner. She formed Comprehensive
Financial Services in 1987 and currently serves as a director and
Secretary/Treasurer of that Company. Mrs. Cramer holds a diploma
in Office Administration .
Michael Cramer. Mr. Cramer, Xunantunich Inc.'s Vice President has
served as an officer and director since December, 1999. Since
1985 he has been involved in the financial services field holding
Life Insurance and Mutual Fund licenses as well as being
registered to sell securities in the Province of British Columbia
through the family-owned company, IDF Financial Services, Inc. He
also has earned a Professional Financial Planning designation and
serves as director and Vice President of Comprehensive Financial
Services Inc.
Grant Cramer. Mr. Cramer has served as a director of Xunantunich
Inc. since December, 1999. He is currently a director of
Comprehensive Financial Services Inc. and IDF Financial Services
Inc. He has a substantial background in hiring and training
Financial Planners and holds a Professional Financial Planning
designation and is registered to sell securities in the Province
of British Columbia through the family-owned firm, IDF Financial
Services, Inc.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of the date of this
Registration Statement, the number of shares of Common Stock owned
of record and beneficially by executive officers, directors and
persons who hold 5.0% or more of the outstanding Common Stock of
Xunantunich Inc.. Also included are the shares held by all
executive officers and directors as a group.
Number of Percent of
Shares Owned
Name and Address Beneficially Class Owned
Mark Cramer*
6822 Valleyview Drive
Prince George, BC V2K 4C6 Canada 1,915,000 38.30
Michael Cramer*
2408 Panorama Place
Prince George, BC V2K 4T9 Canada 1,350,000 27.00
Florence Cramer*
6822 Valleyview Drive
Prince George, BC V2K 4C6 Canada 1,000,000 20.00
Grant Cramer*
#202 - 8636 Laurel Street
Vancouver, BC V6P 3V6 Canada 225,000 04.50
All directors and executive
Officers as a group (4 persons) 4,490,000 89.80%
* All of the officers and directors of Xunantunich Inc. are
related. Florence Cramer, Xunantunich Inc.'s Secretary/Treasurer
and Director is the wife of Mark Cramer, Xunantunich Inc.
President and director. Both Michael Cramer, Vice President and
director and Grant Cramer, director are the adult sons of Mark and
Florence Cramer. All of the officers and directors of Xunantunich
Inc. have independent means and incomes and state categorically
that they are not holding any shares beneficially for any other
person.
The persons listed are the sole officers and directors of
Xunantunich Inc.
Conflicts of Interest
The officers and directors will only devote a portion of their
time to the affairs of Xunantunich Inc. There will be occasions
when the time requirements of the business conflict with the
demands of their other business and investment activities. We may
need to employ additional personnel. If this happens, we cannot
be sure that good people will be available and if they are
available, we can get them at a price we can afford.
There is no procedure in place, which would allow any of the
Cramers to resolve potential conflicts in an arms-length fashion.
We must rely on them to use their discretion to resolve these
conflicts.
Description of securities
Common Stock.
The Articles of Incorporation of Xunantunich Inc. authorize the
issuance of 100,000,000 shares of Common Stock. Each holder of
record of Common Stock is entitled to 1 vote for each share held
on all matters properly submitted to the stockholders for their
vote. The Articles of Incorporation do not permit cumulative
voting for the election of directors.
Holders of Common Stock are entitled to such dividends as may be
declared from time to time by the Board of Directors out of
legally available funds. In the event of liquidation,
dissolution or winding up of the affairs of the Xunantunich Inc.,
holders are entitled to receive, ratably, the net assets available
to stockholders after distribution is made to the preferred
shareholders, if any.
Holders of Common Stock have no preemptive, conversion or
redemptive rights. All of the issued and outstanding shares of
Common Stock are, and all unissued shares when issued will be duly
authorized, validly issued, fully paid, and non assessable. If
additional shares of Xunantunich Inc. Common Stock are issued, the
relative interests of then existing stockholders may be diluted.
Preferred Stock
The Articles of Incorporation of Xunantunich Inc. authorize the
issuance of 10,000,000 shares of preferred stock. The Board of
Directors is authorized to issue preferred shares from time to
time in series and is further authorized to establish such series,
to fix and determine the variations in the relative rights and
preferences as Common Stock. No preferred stock has been issued
by Xunantunich Inc.
Transfer Agent
Xunantunich Inc. is currently serving as its own transfer agent,
and plans to continue to serve in that capacity until such time as
management believes it is necessary or appropriate to employ an
independent transfer agent in order to facilitate the creation of
a public trading market for its securities. Should Xunantunich
Inc. securities be quoted on any exchange or OTC quotation system
or application is made to have the securities quoted, an
independent transfer agent will be appointed.
Indemnification of Officers and Directors
As permitted by Nevada law, Xunantunich Inc.'s Articles of
Incorporation provide that Xunantunich Inc. will indemnify its
directors and officers against expenses and liabilities they incur
to defend, settle or satisfy any civil or criminal action brought
against them on account of their being or having been Company
directors or officers, unless, in any such action, they are
adjudged to have acted with gross negligence or willful
misconduct.
Exclusion of Liabilities
Pursuant to the laws of the State of Nevada, Xunantunich Inc.'s
Articles of Incorporation exclude personal liability for its
directors for monetary damages based upon any violation of their
fiduciary duties as directors, except as to liability for any
breach of the duty of loyalty, acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of
law, acts in violation of Section 7-106-401 of the Nevada Business
Corporation Act, or any transaction from which a director receives
an improper personal benefit. This exclusion of liability does
not limit any right, which a director may have to be indemnified,
and does not affect any director's liability under federal or
applicable state securities laws.
Disclosure of commission position on indemnification for
Securities Act liabilities
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling Xunantunich Inc. pursuant to provisions of the
State of Nevada, Xunantunich Inc. has been informed that, in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in that Act
and is, therefore, unenforceable.
Organization within the last five years
Xunantunich Inc. was incorporated in the State of Nevada on April
2, 1999 and is in the early stages of development. From inception
the only activities of Xunantunich Inc. have been the development
of its business plan and the preparation for this Registration
Statement. It has no revenues nor does it have any expectation of
revenues until the completion of this Offering and the
commencement of business.
Description of business
On April 5, 1999 Xunantunich Inc. received from David R. Mortenson
& Associates of Alvin, Texas, the rights to distribute and
produce, in the states of Arizona and Nevada, an oxygen enriched
water product for fish farming, aquaculture, mariculture, poultry
raising, and for treating animal waste from dairies, feedlots of
all kinds, and for other similar uses. These production and
distribution rights were received from Mortenson in exchange for
2000,000 shares of common stock. Mortenson acquired these rights
from the inventors of the product, N. W. Technologies, Inc. under
a distribution agreement. Several months later the contract
granting David R. Mortenson & Associates rights to the technology
was withdrawn. Mortenson sued NW Technologies Inc. in Harris
County Court, Houston Texas.
To compensate for the possibility that we could lose our principal
asset and the obvious delay that this dispute and court action has
caused, David R. Mortenson & Associates has agreed to suspend all
financial requirements that are due or will be due in the future
until the dispute with NW is resolved. They have also agreed to
grant an alternative license to Xunantunich Inc. for the
distribution of vitamin and herbal supplements for the Province
of Alberta, Canada. This license will enable us to create a
business plan and start the process of getting into business.
The License.
Xunantunich Inc. has a three year license to market and sell
vitamins, minerals, nutritional supplements, and other health and
fitness products to medical professionals, alternative health
professionals, martial arts studios and instructors, sports and
fitness trainers, other health and fitness professionals, school
and other fund raising programs and other similar types of
customers. All of these individuals and organizations will order
their products via the Internet for sale to their clients. The
license will be automatically renewed unless Xunantunich Inc. or
Vitamineralherb.com gives the other notice of its intent not to
renew.
As a licensee of Vitamineralherb.com, Xunantunich Inc. eliminates
the need to develop products, store inventory, build and maintain
a website, establish banking liaisons, and develop a fulfillment
system, thereby enabling us to focus strictly on marketing and
sales. Xunantunich Inc. plans to target health and fitness
professionals in Alberta who wish to offer health and fitness
products to their customers.
Xunantunich Inc. (and its customers) will have access to all
products offered on the Vitamineralherb.com website, as well as
the ability to order custom-formulated and custom-labeled
products. Vitamineralherb.com sets the price for products based
on the manufacturer's price, plus a markup which provides a 10%
commission to Vitamineralherb.com and a profit for Xunantunich
Inc.
Three different labeling options are available to customers:
- products may be ordered with the manufacturer's standard
label with no customization.
- the fitness or health professional may customize the labels
by adding its name, address, and phone number to the standard
label. In most cases, these labels would be a standardized label
with product information and a place on the label for the wording
"Distributed by." This gives these health and fitness
professionals a competitive edge.
- labels may be completely customized for the health or fitness
professional.
When a fitness or health professional becomes a client,
Xunantunich Inc.'s salesperson will show the client how to access
the Vitamineralherb.com website. The client is assigned an
identification number that identifies it by territory,
salesperson, and business name, address, and other pertinent
information. The health or fitness professional may then order the
products it desires directly through the Vitamineralherb.com
website, paying for the purchase with a credit card, electronic
check ("e-check"), or debit card. All products are shipped by the
manufacturer directly to the professional or its clients.
Xunantunich Inc. is not obliged to purchase and maintain a large
inventory, an order desk or shipping department. This method of
doing business, which only a short time ago would be unthinkable
is now a preferred way of shopping (whether wholesale or retail)
for a large segment of the population of North America.
The website is maintained by Vita and each licensee pays an annual
website maintenance fee of $500. All financial transactions are
handled by Vita's Internet clearing bank. The Vitamineralherb.com
webmaster downloads e-mail orders several times a day, checks with
clearing bank for payment and then submits the product order and
electronic payment to International Formulation and Manufacturing.
Vitamineralherb.com then forwards the money due Xunantunich Inc.
via electronic funds transfer.
Vita's software tracks all sales through the customer's
identification number, and at month end, e-mails to Xunantunich
Inc. a detailed report including sales commissions.
Vitamineralherb.com has indicated that it will use e-commerce
advertising such as banner ads on major servers and websites, as
well as attempting to insure that all major search engines pick
Vitamineralherb.com first. All sales originating from the website
to customers located in Alberta will automatically be assigned to
Xunantunich Inc.
The Territory.
The Province of Alberta, Canada reached a population of 3,000,000
this year and is considered to be one of the most prosperous
jurisdictions in the country. The two major cities, Calgary and
Edmonton, the provincial capital have populations of 950,000 and
850,000 respectively. The Province of Alberta has had a balanced
budget for several years and recently a law was passed that
required the province to be debt free by the year 2005. They have
also announced that provincial income taxes will be eliminated in
the next several years.
The principal industries in Alberta are agriculture, producing
grain, oil seeds and cattle; oil and gas; coal mining and tourism.
Alberta produces a large majority of fossil fuels in Canada and
are large exporters to the USA of oil and natural gas. High
quality smelting coal is shipped to Japan and Korea. The province
is the home of two famous national parks, Banff and Jasper.
Our research has indicated that there are nearly 6,000 health
professionals, martial arts instructors, fitness centers and
personal trainers in Alberta
Background on the Manufacturer and Distributor.
On June 9, 1999, Vitamineralherb.com entered into a manufacturing
agreement with International Formulation and Manufacturing Inc. a
nutraceuticals manufacturing firm, located in San Diego,
California, USA. International Formulation and Manufacturing has
been a contract manufacturer of vitamin, mineral, nutritional
supplement, and alternative health products for various marketing
organizations for approximately six years. International
Formulation and Manufacturing does no retail marketing.
In addition to a line of standard products, International
Formulation and Manufacturing is able to manufacture custom
blended products for customers. International Formulation and
Manufacturing also has the capability to supply privately labeled
products for Xunantunich Inc. customers at a minimal added cost.
Vitamineralherb.com has just begun developing its vitamin
marketing and distributorship business.
Implementation of the business plan.
Xunantunich Inc.'s business plan is to determine the feasibility
of selling Vitamineralherb.com products to targeted markets. We
may, during the next six to twelve months, conduct research into
the various potential target markets. Should Xunantunich Inc.
determine that its business plan is feasible, it intends to employ
salespeople to call on medical professionals, alternative health
professionals, martial arts studios and instructors, sports and
fitness trainers, other health and fitness professionals, school
and other fund raising programs and other similar types of
customers to interest these professionals in selling to their
clients high-quality, low-cost vitamins, minerals,
nutritional supplements, and other health and fitness products.
These professionals would sell the products to their clients and
order them through the Internet.
If the net proceeds received from this offering are not enough to
accomplish those things we will have to obtain additional
financing through an additional offering or through capital
contributions by current shareholders. No commitments to provide
additional funds have been made by management or shareholders.
You cannot be sure that any additional funds will be available on
terms acceptable to Xunantunich Inc. or at all. Xunantunich Inc.
expects to begin earning revenues shortly after a sales force is
in place.
Growth of the Internet and electronic commerce.
The Internet has become an increasingly significant medium for
communication, information and commerce. According to NUA
Internet Surveys, as of February 2000, there were approximately
275.5 million Internet users worldwide. At the IDC Internet
Executive Forum held on September 28-29, 1999, IDC stated that in
1999 US $109 billion in purchases were impacted by the Internet.
IDC's vice president, Sean Kaldor, indicated that figure is
expected to increase more than ten-fold over the next five years
to US $1.3 trillion in 2003, with $842 million completed directly
over the Web. Xunantunich Inc. believes that this dramatic growth
presents significant opportunities for online retailers.
The vitamin, supplement, mineral and alternative health product
market.
In recent years, a growing awareness of vitamins, herbs, and other
dietary supplements by the general public has created a whole new
segment in the field of medicine and health care products.
According to Jupiter Communications, online sales of such products
are expected to be US $434 million in the year 2003, up from $1
million in 1998. Xunantunich Inc. believes that several factors
are driving this growth, including a rapidly growing segment of
the population that is concerned with aging and disease, a growing
interest in preventative health care, favorable consumer attitudes
toward alternative health products and a favorable regulatory
statute, the Dietary Supplement
Health and Education Act of 1994.
The removal of most, if not all import duties, under the NAFTA
accord enables Xunantunich Inc. to import its goods without undue
trouble or delay. Some of sources relied upon for product will
undoubtedly be located in Canada and will be easily available to
Canadian customers as well as being exported to the United States.
The electronic commerce industry is new, rapidly evolving and
intensely competitive, and Xunantunich Inc. expects competition to
intensify in the future. Barriers to entry are minimal and current
and new competitors can launch sites at a relatively low cost. In
addition, the vitamin supplement, mineral and alternative health
product market is very competitive and highly
fragmented, with no clear dominant leader and increasing public
and commercial attention.
Xunantunich Inc.'s competitors can be divided into several groups
including:
- traditional vitamins, supplements, minerals and alternative
health products retailers;
- the online retail initiatives of several traditional
vitamins, supplements, minerals and alternative health products
retailers;
- online retailers of pharmaceutical and other health-related
products that also carry vitamins, supplements, minerals and
alternative health products;
- independent online retailers specializing in vitamins,
supplements, minerals and alternative health products;
- mail-order and catalog retailers of vitamins, supplements,
minerals and alternative health products, some of which have
already developed online retail outlets; and
- direct sales organizations, retail drugstore chains, health
food store merchants, mass market retail chains and various
manufacturers of alternative health products.
Many of Xunantunich Inc.'s potential competitors have longer
operating histories, larger customer or user base, greater brand
recognition and significantly greater financial, marketing and
other resources than we have. In addition, an online retailer may
be acquired by, receive investments from, or enter into other
commercial relationships with, larger, well-established and well-
financed companies as use of the Internet and other electronic
services increases.
Competitors have and may continue to have aggressive pricing
policies and devote substantially more resources to website and
systems development than Xunantunich Inc. does. Increased
competition may result in reduced operating margins and loss of
market share.
Xunantunich Inc. believes that the principal competitive factors
in its market are:
- ability to attract and retain customers;
- breadth of product selection;
- product pricing;
- ability to customize products and labeling;
- quality and responsiveness of customer service.
Xunantunich Inc. believes that it can compete favorably on these
factors. However, we will have no control over how successful our
competitors are in addressing these factors. In addition,
Xunantunich Inc. online competitors can duplicate many of the
products or services offered on the Vitamineralherb.com site.
Xunantunich Inc. believes that traditional retailers of vitamins,
supplements, minerals and other alternative health products face
several challenges in succeeding:
- Lack of convenience and personalized service. Traditional
retailers have limited store hours and locations. Traditional
retailers are also unable to provide consumers with product advice
tailored to their particular situation.
- Limited product assortment. The capital and real estate
intensive nature of store-based retailers limit the product
selection that can be economically offered in each store location.
- Lack of Customer Loyalty. Although the larger traditional
retailers often attract customers, many of these customers are
only one-time users. People are often attracted to the name
brands, but find the products too expensive.
- The multilevel structure of some marketing organizations
mandates high prices.
As a result of the foregoing limitations, Xunantunich Inc.
believes there is significant unmet demand for a shopping channel
like that of Vita that can provide consumers of vitamins,
supplements, minerals and other alternative health products with a
broad array of products and a convenient and private shopping
experience.
Xunantunich Inc. hopes to attract and retain consumers through the
following key attributes of its business:
- Broad Expandable Product Assortment. Xunantunich Inc.'s
product selection is substantially larger than that offered by
store-based retailers.
- Low Product Prices. Product prices can be kept low due to
volume purchases through Xunantunich Inc.'s affiliation with
Vitamineralherb.com and other licensees. Our not having an
inventory, warehouse space and need for limited administration
will also make our prices lower.. All products are shipped from
International Formulation and Manufacturing's
inventory.
- Accessibility to Customized Products. At minimal cost, health
and fitness practitioners may offer their customers customized
products.
- Access to Personalized Programs. Health or fitness
professional can tailor vitamin and dietary supplement regimes to
their clients.
Regulatory Environment.
The manufacturing, processing, formulating, packaging, labeling
and advertising of the products Xunantunich Inc. sells in Canada
are or may be subject to regulation by Health Canada which
administers the Food and Drugs Act along with relevant regulation
thereto. Regulated products include herbal remedies, natural
health remedies, functional foods and nutraceuticals. Health
Canada regulates the formulation, manufacture, labeling and
distribution of foods, including dietary supplements, cosmetics
and over-the-counter or homeopathic drugs. Under the Food and
Drugs Act, a variety of enforcement actions are available to
Health Canada against marketers of unapproved drugs or
"adulterated" or "misbranded" products. These include: criminal
prosecution; injunctions to stop the sale of a company's products;
seizure of products; adverse publicity "voluntary" recalls and
labeling changes.
The Consumer Packaging and Labeling Act, as administered by
Industry Canada, requires that certain information labeling be
presented in a prescribed manner on all foods, drugs, dietary
supplements and cosmetics. A product may be deemed an unapproved
drug and "misbranded" if it bears improper claims or improper
labeling.
The manufacturing, processing, formulating, packaging, labeling
and advertising of the products Xunantunich Inc. sells may also be
subject to regulation by one or more U.S. federal agencies,
including the Food and Drug Administration, the Federal Trade
Commission, the United States Department of Agriculture and the
Environmental Protection Agency. These activities also may
be regulated by various agencies of the states, localities and
foreign countries in which consumers reside.
The Food and Drug Administration, in particular, regulates the
formulation, manufacture, labeling and distribution of foods,
including dietary supplements, cosmetics and over-the- counter or
homeopathic drugs.
Food and Drug Administration regulations require that certain
informational labeling be presented in a prescribed manner on all
foods, drugs, dietary supplements and cosmetics.
The Food and Drug Administration has indicated that claims or
statements made on a company's website about dietary supplements
may constitute "labeling" and thus be subject to regulation by the
Food and Drug Administration.
It is possible that the statements presented in connection with
product descriptions on Xunantunich Inc.'s site may be determined
by the Food and Drug Administration to be drug claims rather than
nutritional statements. Some of Xunantunich Inc.'s suppliers may
incorporate objectionable statements directly in their product
names or on their products' labels, or otherwise fail to comply
with applicable manufacturing, labeling and registration
requirements for over-the-counter or homeopathic drugs or dietary
supplements. As a result, Vitamineralherb.com may have to remove
or modify some statements, products or labeling from its website.
Xunantunich Inc. cannot predict the nature of any future Canadian
or U.S. laws and regulations nor can it determine what effect
additional governmental regulations or administrative orders would
have on our business in the future. Although the regulation of
dietary supplements is less restrictive than that of drugs and
food additives Xunantunich Inc. cannot assure you that the current
statutory scheme and regulations applicable to dietary supplements
will remain less restrictive.
Any laws, regulations, enforcement policies, interpretations or
applications applicable to Xunantunich Inc.'s business could
require the reformulation of certain products to meet new
standards, the recall or dropping of certain products, additional
record keeping, expanded documentation of the properties of
certain products, expanded or different labeling.
Regulation of the Internet.
In general, existing laws and regulations apply to the Internet.
The precise applicability of these laws and regulations to the
Internet is sometimes uncertain. The vast majority of such laws
were adopted prior to the Internet and do not address the unique
issues of the Internet or electronic commerce.
Numerous federal and state government agencies have already
demonstrated significant activity in promoting consumer protection
on the Internet. Due to the increasing use of the Internet as a
medium for commerce and communication, it is possible that new
laws and regulations could be passed with respect to the Internet.
These new laws and regulations could cover issues such as user
privacy, freedom of expression, advertising, pricing, content and
quality of products and services, taxation, intellectual property
rights and information security. The adoption of such laws or
regulations and the applicability of existing laws and regulations
to the Internet may slow the growth of Internet use and result in
a decline in Xunantunich Inc.'s sales.
A number of legislative proposals have been made at the federal,
state and local level, and by foreign governments, that would
impose additional taxes on the sale of goods and services over the
Internet, and some states have taken measures to tax Internet-
related activities. Although Congress recently placed a three-year
moratorium on new state and local taxes on Internet access or on
discriminatory taxes on electronic commerce, existing state or
local laws were expressly excepted from this moratorium. Once
this moratorium is lifted, some type of federal and/or state taxes
may be imposed upon Internet commerce. Such legislation or other
attempts at regulating commerce over the Internet may
substantially impair growth and, as a result have a negative
affect on our business.
Employees.
Xunantunich Inc. is a development stage company and currently has
no employees. Xunantunich Inc. is currently managed by Mark,
Florence, Michael and Grant Cramer, its officers and directors.
Xunantunich Inc. looks to the Cramers for their management and
financial skills and talents. For a complete discussion of the
Cramer family's experience, please see "Directors and Executive
Officers." Management plans to use consultants, attorneys and
accountants as necessary and does not plan to engage any full-time
employees in the near future other than sales people to set up
accounts.
Available Information and Reports to Securities Holders.
Xunantunich Inc. has filed with the Securities and Exchange
Commission a Registration Statement on Form SB-2 with respect to
the common stock offered by this Prospectus. This Prospectus,
which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration
Statement or the exhibits and schedules which are part of the
Registration Statement. For further information with respect to
Xunantunich Inc. and its common stock, see the Registration
Statement and the exhibits and schedules thereto. Any document
Xunantunich Inc. files may be read and copied at the Commission's
Public Reference Room located at 450
Fifth Street N.W., Washington D.C. 20549, and the public reference
rooms in New York, New York, and Chicago, Illinois. Please call the
Commission at 1-800-SEC-0330 for further information about the public
reference rooms. Xunantunich Inc.'s filings with the Commission
are also available to the public from the Commission's website at
http://www.sec.gov.
Upon completion of this offering, Xunantunich Inc. will become
subject to the information and periodic reporting requirements of
the Securities Exchange Act and, accordingly, will file periodic
reports, proxy statements and other information with the
Commission. Such periodic reports, proxy statements and other
information will be available for inspection and copying at the
Commission's public reference rooms, and the website of the
Commission referred to above.
Forward looking statements.
You should not rely on forward-looking statements in this
Prospectus. This Prospectus contains forward-looking statements
that involve risks and uncertainties. We use words such as
anticipates", "believes", "plans", "expects", "future", "intends"
and similar expressions to identify these forward-looking statements.
Actual results could differ materially from those anticipated in these
forward-looking statements for many reasons.
Management's discussion and analysis or plan of operation.
Upon the completion of all or part of the sale of shares contained
in this Offering, Xunantunich Inc. intends to proceed as quickly
as possible to do an in-depth feasibility study and if and when
that study proves the project to be feasible, hire one or more
sales representatives to present its service to potential
customers. Geography is an obstacle that must be dealt with. The
Province of Alberta is very large, making adequate coverage by one
salesperson virtually impossible. A minimum of two
representatives will be necessary. After opening accounts, these
representatives will be necessary to service existing customers.
Research has indicated that this servicing or detailing of already
established accounts results in larger increases in reorders of
product.
Estimated expenses for the next
twelve months are as follows:
US dollars Cdn.dollars
Two sales persons (draw against commissions)
@ $1000 per month* $ 36,000 $54,000
Administration $ 12,000 $18,000
Employee benefits $ 16,000 $24,000
Office rent $ 12,000 $18,000
Office supplies ( including furniture) $ 10,000 $15,000
Development stage costs
(including recruiting costs) $ 1,000 $ 1,500
Website maintenance $ 500 $ 750
Contingency (10%) $ 8,750 $13,125
Total first year expenses $ 96,250 $144,375
All figures shown are in United States and Canadian dollars. A
conversion rate of 1.5 was used.
If the proposed offering proceeds are not received, operations
would be scaled down. One sales person would be hired instead of
two; administration would be handled by an officer and director at
no cost. The same officer and director would supply office space
during the start-up process. Growth would be much slower and
Xunantunich Inc. would not be able to rent office space and hire
administrative help until sales volumes and gross profits were
large enough. If no funds are received from this offering,
management would be forced to decide whether or not to proceed
with the business and either delay starting or cancel the project
completely.
Description of property.
Xunantunich Inc. maintains a mailing address at the office of one
of its shareholders, but otherwise does not maintain an office.
We pay no rent and own no real estate.
Certain Relationships and Related Transactions
Prior to the date of this Registration Statement Xunantunich
issued to ten individuals a total of 2,000,000 shares of common
stock in consideration of acquiring the rights to manufacture and
market an oxygen-enhanced product for use in aquaculture, fish and
poultry farming and the bioremediation of waste ponds and lagoons
in the states of Arizona and Nevada. Mortenson acquired these
rights from the inventors of the product, N.W. Technologies Inc.
under a distribution agreement.
In December, 1999 N.W. Technologies unilaterally canceled its
contract and distribution agreement with David R. Mortenson and
Associates. Mortenson and several of the concerns that have an
interest in the technology through distribution agreements with
Mortenson, have filed suit in Harris County court, Texas against
N.W. Technologies Inc, its officers and directors and several
other individual and concerns involved with the cancellation and
withdrawal.
Xunantunich is not withdrawing from its from its agreement with
Mortenson for the distribution and manufacture of the oxygen-
enhanced products, nor has it any intention of doing so at the
present time. All obligations under that agreement have been
suspended until the lawsuit is resolved.
In order to avoid litigation with Xunantunich and to protect our
shareholders Mortenson granted a distribution territory for an
Internet based vitamin and health supplement company. The
company, Vitamineralherb.com, is located San Diego, California.
There was no charge for this distribution territory which is for
the Province of Alberta, Canada.
Market for common equity and related stockholder matters.
Xunantunich Inc. is a development stage company that is still in
the beginning stages of implementing its business plan. No market
currently exists for the common stock. Upon completion of all or
part of the offering of common shares contained in this
Registration Statement, it is the intention of Xunantunich Inc. to
apply for a trading symbol and a listing to have its shares quoted
on the NASD OTC Bulletin Board. There can be no assurance that
any part of this Offering will be subscribed to and if all or part
of the offering is subscribed to, that the request of Xunantunich
Inc. to have the price of its stock quoted on the OTC Bulletin
Board will be granted. You should take all of the above facts
into consideration before making a decision to purchase any amount
of Xunantunich Inc. stock.
Executive compensation.
No officer or director of Xunantunich Inc. has received any
remuneration. Although there is no current plan in existence, it
is possible that Xunantunich Inc. will adopt a plan to pay or
accrue compensation to its officers and directors for services
related to the implementation of the business plan. See "Certain
Relationships and Related Transactions". Xunantunich Inc. has no
stock option, retirement, pension or profit-sharing programs for
the benefit of directors, officers or other employees, but the
Board of Directors may recommend adoption of one or more such
programs in the future.
XUNANTUNICH, INC.
(A Development Stage Enterprise)
Interim Financial Statements
(Prepared by Management)
As at May 31, 2000 and December 31, 1999
XUNANTUNICH INC.
BALANCE SHEETS
As at May 31, 2000 and December 31, 1999
(Prepared by Management)
May 31, 2000 December 31,1999
Unaudited Audited
ASSETS
CURRENT ASSETS:
CASH 617 0
TOTAL CURRENT ASSETS 617 0
OTHER ASSETS
LICENSE RIGHTS 2,000 2,000
TOTAL ASSETS 2,617 2,000
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES: 0 0
TOTAL CURRENT LIABILITIES 0 0
STOCKHOLDERS EQUITY:
Common stock, $0.001 par
Value; 100,000,000 shares
Authorized, and 5,100,000 (5,000,000)
Shares Issued and outstanding 2,600 2,500
ADDITIONAL PAID-IN CAPITAL 11,934 34
(DEFICIT ACCUMULATED DURING
THE DEVELOPMENT STAGE) (11,917) ( 534)
TOTAL STOCKHOLDERS' EQUITY 2,617 2,000
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 2617 2,000
XUNANTUNICH INC.
STATEMENT OF OPERATIONS
For the five months ended May 31, 2000 and for the period
April 2, 1999 (Inception) to December, 31, 1999
(Prepared by Management)
May 31, 2000 December 31, 1999
Unaudited Audited
REVENUES: $ 0 $0
OPERATING EXPENSES:
FEES 0 165
TAXES AND LICENSES 0 320
OFFICE EXPENSES 383 49
LEGAL AND ACCOUNTING FEES 9,500 0
CONSULTING FEES 1,500 0
TOTAL OPERATING EXPENSES 11,383 534
NET (LOSS)FOR THE PERIOD (11,383) (534)
NET (LOSS) PER SHARE $ (0.00) $ (0.00)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,100,000 5,000,000
XUNANUTUNICH, INC.
STATEMENT OF CASH FLOWS
For the five months ending May 31, 2000 and the Period
April 2, 1999 (Inception) through December 31, 2000
(Prepared by Management)
May 31, 2000 December 31,1999
CASH FLOWS FROM (TO)
OPERATING ACTIVITIES:
NET INCOME (LOSS) $(11,383) $(534)
CASH FLOWS FROM (TO)
INVESTING ACTIVITIES:
PURCHASE OF LICENSE RIGHTS 0 (2,000)
CASH FLOWS FROM (TO)
FINANCING ACTIVITIES:
ISSUANCE OF COMMON STOCKS 12,000 2,534
NET INCREASE (DECREASE) IN CASH 617 0
CASH, BEGINNING OF PERIOD 0 0
CASH, END OF PERIOD 617 0
FINANCIAL STATEMENTS.
XUNANTUNICH, INC.
(A Development Stage Enterprise)
AUDIT REPORT
December 31, 1999
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1777 S. Harrison Street, Suite 2100
Denver, Colorado 80210
XUNANTUNICH, INC.
(A Development Stage Enterprise)
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
ITEM PAGE
Report of Certified Public Accountant 34
Balance Sheet, December 31, 1999 35
Statement of Operations, for the
Period April 2, 1999 (Inception)
Through December 31, 1999 36
Statement of Stockholders' Equity
(Deficit), April 2, 1999 (Inception)
Through December 31, 1999 37
Statement of Cash Flows for the
Period From April 2, 1999 (Inception)
Through December 31, 1999 38
Notes to Financial Statements 39 & 40
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1777 S. Harrison Street, Suite 2100
Denver, Colorado 80210
(303) 782-0878
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Xunantunich, Inc.
21112 123rd Avenue
Maple Ridge, British Columbia V2X4B4
Canada
I have audited the accompanying Balance Sheet of Xunantunich, Inc.
(A Development Stage Enterprise) as of December 31, 1999 and the
Statements of Operations, Stockholders' Equity, and Cash Flows for
the period April 2, 1999 (Inception) through December 31, 1999.
These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these
financial statements based on my audits.
My examination was made in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audits to obtain reasonable assurance as to whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that our
audit provides a reasonable basis for our opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Xunantunich, Inc.(a development stage enterprise) as of December
31, 1999, and the results of its operations and changes in its
cash flows for the period from April 2, 1999 (Inception) through
December 31, 1999, in conformity with generally accepted
accounting principles.
Janet Loss, C.P.A., P.C.
February 29, 2000
XUNANTUNICH, INC.
(A Development Stage Enterprise)
BALANCE SHEET December 31, 1999
ASSETS
CURRENT ASSETS:
License Rights $ 2,000
TOTAL ASSETS 2,000
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES:
TOTAL CURRENT LIABILITIES 0
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value;
100,000,000 shares Authorized, and
5,000,000 shares Issued and outstanding 2,500
Additional Paid-In Capital 34
(Deficit) (534)
Total Stockholders' Equity (Deficit) 2000
TOTAL LIABILITY AND STOCKHOLDERS' EQUITY $ 2,000
The accompanying notes are an integral part of the financial
statements.
Xunantunich, Inc.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
For the Period April 2, 1999 (Inception)
Through December 31, 1999
REVENUES: $ 0
OPERATING EXPENSES:
Fees $ 165
Taxes and Licenses 320
Office Expenses 49
TOTAL OPERATING EXPENSES 534
NET (LOSS) $ ( 534)
NET (LOSS) PER SHARE $ (0.0000)
Weighted Average Number of
Common Shares Outstanding 5,000,000
The accompanying notes are an integral part of the financial
statements.
XUNANTUNICH, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Period April 2, 1999
Through December 31, 1999
Common Additional (Deficit) Total
Stock Common Paid-in Accumulated Stockholders
Number of Stock Capital During the Equity Deficit)
Shares Amount Developement
Stage
April 2, 1999
Issuance of
Common Stock 500000 500 34 0 534
for Cash
Issuance of
Common Stock
for License
Rights 2000000 2000 0 0 2000
Issuance of
Common Stock
on November
24, 1999 for
2-1 split 2500000 0 0 0 0
Deficit for
the Period
from April 2,
1999
(Inception)
through
December 31
1999 0 0 0 (534) (534)
Balance
December
31, 1999 5000000 2500 34 (534) 2000
The accompanying notes are an integral art of these financial statements
XUNANTUNICH INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
For the Period April 2, 1999 (Inception)
Through December 31, 1999For the Period April 2, 1999 (Inception)
Through December 31, 1999
CASH FLOWS FROM (TO) OPERATING
ACTIVITIES:
Net Income (Loss) $ (534)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of License Rights (2,000)
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Issuance of Common Stocks 2,534
Increase (Decrease) in Cash $ 0
CASH, BEGINNING OF PERIOD 0
CASH, END OF PERIOD $ 0
The accompanying notes are an integral part of the financial
statements.
XUNANTUNICH, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE I - ORGANIZATION AND HISTORY
The Company is a Nevada Corporation and the Company has been in
the development stage since its formation on April 2, 1999.
The Company's only activities have been organizational, directed
at acquiring its principle assets, raising its initial capital and
developing its business plan.
On April 2, 1999, Xunantunich Inc. issued 500,000 shares of common
stock to the officers and directors as founders' shares in return
for the time, effort and expenditures to organize and form the
corporation. On April 28, 1999 Xunantunich Inc. issued 2,000,000
shares of common stock in return for the water treatment rights
for the states of Arizona and Nevada and the development of the
business plan.
On November 24, 1999 all 2,500,000 shares of common stock of
Xunantunich Inc. were purchased by the present shareholders. They
immediately effected a two - to - one forward split for a total of
5,000,000 issued and outstanding shares
NOTE II - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DEVELOPMENT STAGE ACTIVITIES
The Company has been in the development stage since inception.
ACCOUNTING METHOD
The Company records income and expenses on the accrual method.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, cash on deposit,
and highly liquid investments with maturities generally of three
months or less. At December 31, 1999, there Ire no cash
equivalents.
YEAR END
The Company has elected to have a fiscal year ended December 31.
USE OF ESTIMATES
The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that effect the reported amounts of
assets and liabilities at the date of financial statements, as Ill
as revenues and expenses reported for the periods presented. The
Company regularly assesses these estimates and, while actual
results may differ management believes that the estimates are
reasonable.
NOTE III - RELATED PARTY TRANSACTIONS
The Company has entered into an agreement made effective April 5,
1999 with David R. Mortenson & Associates (Grantor) to receive a
three-year license to distribute the products developed by NW
Technologies, Inc. The contract, for the states of Arizona and
Nevada, called for a $5,000 initial payment and a royalty of 5% of
gross sales. It also required the Company to purchase a minim of
$50,000 of product the first year, $75,000 the second year and
$125,000 the third year.
The initial $5,000 payment was waived and the Company agreed to
pay the Grantor the sum of $2,000 in the form of 2,000,000 shares
of common stock having a par value of $0.001 per share.
Management puts a fair market value of $2,000 on the license. The
agreement qwith David R. Mortenson & Associates was entered into
by previous management.
NOTE IV - SUBSEQUENT EVENTS
In December, 1999 N.W. Technologies, Inc. unilaterally cancelled
its contract with David Mortenson & Associates. Early in the year
2000 David Mortenson & Associates laid suit against N.W.
Technologies, Inc. in Harris County Court, Texas.
In the opinion of management, the Company has no direct or
indirect interest in the Texas lawsuit
In a letter dated January 5, 2000 David Mortenson & Associates
suspended all present and future payments under the License
Agreement until their dispute with N.W. Technologies is resolved.
In March, 2000 David Mortenson & Associates gave the Company a
License to distribute vitamins, minerals, herbs and other health
products and supplements through the Internet. The license calls
for a 10% add-on for all products purchased and an annual $500
website maintenance fee. The effective date of the License
Agreement was January 3, 2000.
David R. Mortenson is a principal in both David Mortenson &
Associates and Vitamioneralherb.com. He has no non-arms length
association with the Company.
Changes in and Disagreements with Accountants on Accounting and
Financial disclosure.
There have been no changes in and/or disagreements with Janet
Loss, C.P.A., P.C. on accounting and financial disclosure matters.
PART II - Information Not Required in Prospectus
Indemnification of directors and officers.
Pursuant to Nevada law, a corporation may indemnify a person who
is a party or threatened to be made a party to an action, suit or
proceeding by reason of the fact that he or she is an officer,
director, employee or agent of the corporation, against such
person's costs and expenses incurred in connection with such
action so long as he/she has acted in good faith and in a manner
which he/she reasonably believed to be in, or not opposed to, the
best interests of the corporation, and, in the case of criminal
actions, had no reasonable cause to believe his or her conduct was
unlawful. Nevada law requires a corporation to indemnify any such
person who is successful on the merits or defense of such action
against costs and expenses actually and reasonably incurred in
connection with the action.
The bylaws of Xunantunich Inc. filed as Exhibit 3.2, provide that
Xunantunich Inc. will indemnify its officers and directors for
costs and expenses incurred in connection with the defense of
actions, suits, or proceedings against them on account of their
being or having been directors or officers of Xunantunich Inc.,
absent a finding of negligence or misconduct in office. The
Bylaws also permit Xunantunich Inc. to maintain insurance on
behalf of its officers, directors, employees and agents against
any liability asserted against and incurred by that person whether
or not Xunantunich Inc. has the power to indemnify such person
against liability for any of those acts.
Other expenses of issuance and distribution.
Expenses incurred or (expected) relating to this Registration
Statement and distribution are as follows:
Legal fees $ 8,500.00
Accounting 1,500.00
(Edgar filing and Printing) 5,000.00
TOTAL $15,000.00
To date Xunantunich Inc. has spent a total of $11,383 for office
expenses and legal and accounting fees.
Recent sales of unregistered securities.
Set forth below is information regarding the issuance and sales of
Xunantunich Inc. securities without registration since its
formation. No such sales involved the use of an underwriter and
no commissions were paid in connection with the sale of any
securities.
On April 2, 1999, Xunantunich Inc. issued 500,000 shares of common
stock to the officers and directors as founders' shares in return
for the time, effort and expenditures to organize and form the
corporation. On April 28, 1999 Xunantunich Inc. issued 200,000
shares of common stock each to ten individuals for a total of
2,000,000 shares in return for the water treatment rights for the
states of Arizona and Nevada and the development of the business
plan.
On August 17, 1999, the Board of Directors of Xunantunich Inc.
filed an amendment to its Articles of Incorporation with the state
of Nevada increasing the authorized capital to 100,000,000 shares
of common stock.
On November 24, 1999 all 2,500,000 shares of common stock of
Xunantunich Inc. Ire purchased by the present shareholders. They
immediately effected a two - to - one forward split for a total of
5,000,000 issued and outstanding shares
Exhibits.
The following exhibits are filed as part of this Registration
Statement;
Exhibit
Number Description
3.1 Articles of Incorporation
3.2 Bylaws
5.1 Opinion re: Legality
10.1 License Agreement
10.2 Assignment of License Agreement
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (See Exhibit 5.1)
Undertakings.
The undersigned registrant hereby undertakes:
1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) To include any Prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(b) To reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered
(c) To include any additional or changed material
information to the plan of distribution.
2) For determining liability under the Securities Act, treat
each post-effective amendment as a new Registration Statement
of the securities offered and the offering of the securities at
that time to be the initial bona fide offering.
3) file a post-effective amendment to remove from
registration any of the securities being registered, which
remain unsold at the end of the offering.
4) For determining any liability under the Securities Act, to
treat the information omitted from the form of Prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of Prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act as
part of this Registration Statement as of the time the Commission
declared it effective.
5) For determining any liability under the Securities Act to
treat each post-effective amendment that contains a form of
Prospectus as a new Registration Statement for the securities
offered and the offering of the securities at that time as the
initial bona fide Offering of those Securities.
Signatures
In accordance with the requirements of the Securities Act of1933,
the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form SB-2 and
authorized this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of
Prince George, Province of British Columbia Canada
On June 22, 2000
(Registrant) Xunantunich Inc.
By: /S/ Mark Cramer
Mark Cramer, President.
In accordance with the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the
capacities and on the date stated.
By: /S/ Mark Cramer
Mark Cramer, President
Date: June 22, 2000
By: /S/ Florence Cramer
Florence Cramer, Secretary/Treasurer
Date: June 22, 2000
By: /S/ Michael Cramer
Michael Cramer, Vice President
Date: June 22, 2000
By: /S/ Grant Cramer
Grant Cramer, Director
Date: June 22, 2000
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
XUNANTUNICH INC.
ARTICLES OF INCORPORATION
Of
XUNANTUNICH INC.
The undersigned natural person of the age of eighteen years
or more, acting as incorporator of a corporation under and
pursuant to the laws of the State of Nevada, hereby adopts
the following Articles of Incorporation for such
corporation:
ARTICLE I
The name of the corporation is XUNANTUNICH INC.
ARTICLE II
The principal office of this corporation is to be at 50 West
Liberty Street #880, Reno, 89501, State of Nevada. The
Nevada Agency and Trust Company is hereby named as Resident
Agent of this corporation and in charge of its said office
in Nevada.
ARTICLE III
The nature of the business, objects and purposes to be
transacted, promoted, or carried on by the corporation are:
A To conduct any lawful business, to promote any lawful
purpose, and to engage in any lawful act or activity for
which corporations maybe organized under the General
Corporation Law of the State of Nevada and to act in every
kind of fiduciary capacity. and generally to do all things
necessary or convenient which are incident to or which a
natural person might or could do.
B To purchase, receive, take by grant, gift, devise,
bequest, or otherwise. lease, or otherwise acquire, own,
hold, improve, employ, use and otherwise deal in and with
real or personal property, or any interest therein, wherever
situated, and to sell, convey, lease, exchange, transfer or
otherwise dispose of, or mortgage or pledge, all or any of
its property and assets, or any interests therein, wherever
situated.
C To engage generally in the real estate business as
principal, and in any lawful capacity, and generally to
take, lease, purchase, or otherwise acquire, and to own,
use, hold, sell, convey, exchange, lease, mortgage, work,
clear, improve, develop, divide, and otherwise handle,
manage, operate, deal in and dispose of mining claims, oil
leases, oil and gas wells, real estate, real property,
lands, multiple-dwelling structures, houses, buildings and
other works and any interest or right therein; to take,
lease, purchase or otherwise handle or acquire, and to own,
use, hold, sell, convey, exchange, hire, lease, pledge,
mortgage, and otherwise handle, and deal in and dispose of,
as principal agent or in any lawful capacity, such personal
property, chattels, chattels real, rights, easements,
privileges, causes in action, notes, bonds, mortgages, and
securities as may lawfully be acquired, held or disposed of
and to acquire, purchase, sell, assign, transfer, dispose of
and generally deal in and with as principal, agent, broker,
and in any lawful capacity, mortgages and other interests in
real, personal, and mixed properties; to carry on a general
oil exploration, mining exploration and management business
as principal, agent, representative, contractor, sub-
contractor, and in any other lawful capacity. To
manufacture, purchase or acquire in any lawful manner and to
hold, own, mortgage, pledge, sell, transfer, or in any
manner dispose of, and to deal and trade in goods, wares,
merchandise, and property of any and every class and
description, and in any part of the world.
D To apply for, register, obtain, purchase, lease, take
licenses in respect of or otherwise acquire, and to hold,
own, use, operate, develop, enjoy, turn to account, grant
licenses and immunities in respect of, manufacture under and
to introduce, sell, assign, mortgage, pledge or otherwise
dispose of and, in any manner deal with and contract with
reference to:
1. Inventions, devices, formulas, processes,
improvements and modifications thereof;
2. Letters patent, patent rights, patented
processes, rights, designs, and similar rights,
trademarks, trade names, trade symbols and other
indications or origin and ownership granted by or
recognized under the laws of the United States of
America, any state or subdivision thereof, and any
commonwealth, territory, possession, dependency,
colony, possession agency or instrumentality of the
United States of America and of any foreign country,
and all rights connected therewith or appertaining
thereto.
3. Franchises licenses, grants and concessions.
E To make, enter into, perform and carry out contracts of
every kind and description with any person, firm,
association, corporation or government or agency or
instrumentality thereof.
F To lend money in furtherance of its corporate purposes
and to invest and reinvest its funds from time to time to
such extent, to such persons, firms, associations,
corporations, governments or agencies or instrumentality's
thereof, and on such terms and on such security, if any, as
the Board of Directors of the corporation may determine and
direct any officer to complete.
G To borrow money without limit as to amount and at such
rates of interest as it may determine; from time to time to
issue and sell its own securities, including its shares of
stock, notes, bonds, debentures, and other obligations, in
such amounts, on such terms and conditions, for such
purposes and for such prices, now or hereafter permitted by
the laws of the State of Nevada and by the Board of
Directors of the corporation as they may determine; and to
secure any of its obligations by mortgage, pledge or other
encumbrance of any or all of its property, franchises and
income.
H To be a promoter or manager of other corporations of
any type or kind; and to participate with others in any
corporation, partnership, limited partnership, joint
venture, or other association of any kind, or in any
transaction, undertaking or arrangement which the
corporation would have power to conduct by itself, whether
or not such participation involves sharing or delegation of
control with or to others.
I To promote and exercise all or any part of the foregoing
purposes and powers in and all parts of the world, and to
conduct its business in all or any branches in any lawful
capacity.
The foregoing enumeration of specific purposes and powers shall
not be held to limit or restrict in any manner the purposes and
powers of the corporation by references to or inference from the
terms or provisions of any other clause, but shall be regarded as
independent purposes.
ARTICLE IV
The aggregate number of shares, which the corporation shall have
authority to issue, is 100,000,000 shares of common stock with
$0.001 par value each and 10,000,000 shares of preferred stock.
No shareholder of the corporation shall have the right of
cumulative voting at any election of directors or upon any other
matter.
No holder of securities of the corporation shall be entitled as a
matter of right, preemptive or otherwise, to subscribe for or
purchase any securities of the corporation now or hereafter
authorized to be issued, or securities held in the treasury of
the corporation, whether issued or sold for cash or other
consideration or as a share dividend or otherwise. Any such
securities may be issued or disposed of by the board of directors
to such persons and on such terms as in its discretion it shall
deem advisable.
ARTICLE V
Any action required to, or that may, be taken at any annual or
special meeting of shareholders may be taken without a meeting,
without prior notice and without a vote, if a consent or consents
in writing, setting forth the action so taken, shall be signed by
the holder or holders of shares having not less than the minimum
number of votes that would be necessary to take such action at a
meeting at which the holders of all shares entitled to vote on
the action were present and voted.
ARTICLE VI
The members of the governing board shall be styled DIRECTORS and
the number of such Directors shall be not less found liable for:
(i) a breach of such director's duty of loyalty to the
corporation or its shareholders; (ii) an act or omission not in
good faith that constitutes a breach of duty of such director to
the corporation or an act or omission that involves intentional
misconduct or a knowing violation of the law; (iii) a transaction
from than one (l), or more than five (5). The first board of
directors shall be Two Members whose names and post office
addresses are as follows:
John T. Bauska
302 Hwy 2 East, Suite 4
Kalispell, Montana 59901
David R. Mortenson
P.O. Box 5034
Alvin, Texas 77512
ARTICLE VII
The initial number of stockholders will be two (2). Additional
stockholders may be obtained. The number of directors may be
changed as provided in N.R.S. 78.330.
ARTICLE VIII
A No director of the corporation shall be liable to the
corporation or any of its shareholders for monetary damages for
an act or omission in the director's capacity as a director,
except that this Article VIII shall not authorize the elimination
or limitation of liability of a director of the corporation to
the extent the director is which such director received an
improper benefit, whether or not the benefit resulted from an
action taken within the scope of the director's office; or (iv)
an act or omission for which the liability of a director is
expressly provided by an applicable statute.
B. The capital stock of this corporation after the amount of
the subscription price or par value has been paid in, shall not
be subject to assessment to pay debts of this corporation and no
stock issued as fully paid up shall ever be assessable or
assessed and the Articles of Incorporation shall not be amended
in this particular.
ARTICLE IX
This corporation is to have perpetual existence. David R.
Mortenson, being the original incorporator for the purpose of
forming a corporation to do business both within and without the
State of Nevada and in pursuance of the General Corporation law
of the State of Nevada, do make and file this certificate, hereby
declaring and certifying that the facts herein above stated are
true.
April 2, 1999
Address: PO Box 5034
Alvin, TX 77512
EXHIBIT 3.2
BYLAWS
XUNANTUNICH, INC.
BYLAWS OF
Xunantunich Inc.
CONTENTS OF INITIAL BYLAWS
ARTICLE PAGE
1.00CORPORATE CHARTER AND BYLAWS
1.01Corporate Charter Provisions 4
1.02 Registered Agent or Office Requirement
of Filing Changes with Secretary of State 4
1.03Initial Business Office 4
1.04Amendment of Bylaws 4
2.00DIRECTORS AND DIRECTORS MEETINGS
2.01Action Without Meeting 5
2.02Telephone Meetings 5
2.03Place of Meetings 5
2.04Regular Meetings 5
2.05Call of Special Meeting 5
2.06Quorum 6
2.07Adjournment Notice of Adjourned Meetings 6
2.08Conduct of Meetings 6
2.09Powers of the Board of Directors 6
2.10Board Committees Authority to Appoint 7
2.11Transactions with Interested Directors 7
2.12Number of Directors 7
2.13Term of Office 7
2.14Removal of Directors 8
2.15Vacancies 8
2.15(a)Declaration of Vacancy 8
2.15(b)Filling Vacancies by Directors 8
2.15(c)Filling Vacancies by Shareholders 8
2.16Compensation 9
2.17Indemnification of Directors and Officers 9
2.18Insuring Directors, Officers, and Employees 9
3.00SHAREHOLDERS MEETINGS
3.01Action Without Meeting 9
3.02Telephone Meetings 10
3.03Place of Meetings 10
3.04Notice of Meetings 10
3.04Voting List 10
3.05Votes per Share 11
3.07Cumulative Voting 11
3.08Proxies 11
3.09Quorum 12
3.09(a)Quorum of Shareholders 12
3.09(b)Adjourn for Lack or Loss of Quorum 12
3.10Voting by Voice or Ballot 12
3.11Conduct of Meetings 12
3.12Annual Meetings 12
3.13Failure to Hold Annual Meeting 13
3.14Special Meetings 13
4.00 OFFICERS
4.01Title and Appointment 13
4.01(a)Chairman 13
4.01(b)President 14
4.01(c)Vice President 14
4.01(d)Secretary 14
4.01(e)Treasurer 15
4.01(f)Assistant Secretary or Assistant Treasurer 15
4.02Removal and Resignation 15
4.03Vacancies 16
4.04Compensation 16
5.00 AUTHORITY TO EXECUTE INSTRUMENTS
5.01No Authority Absent Specific Authorization 16
5.02Execution of Certain Instruments 16
6.00 ISSUANCE AND TRANSFER OF SHARES
6.01Classes and Series of Shares 17
6.02Certificates for Fully Paid Shares 17
6.03Consideration for Shares 17
6.04Replacement of Certificates 17
6.05Signing Certificates Facsimile Signatures 18
6.06Transfer Agents and Registrars 18
6.07Conditions of Transfer 18
6.08Reasonable Doubts as to Right to Transfer 18
7.00 CORPORATE RECORDS AND ADMINISTRATION
7.01Minutes of Corporate Meetings 18
7.02Share Register 19
7.03Corporate Seal 19
7.04Books of Account 19
7.05Inspection of Corporate Records 20
7.06Fiscal Year 20
7.07Waiver of Notice 20
8.00ADOPTION OF INITIAL BYLAWS 20
ARTICLE ONE - CORPORATE CHARTER AND BYLAWS
1.01 CORPORATE CHARTER PROVISIONS
The Corporation's Charter authorizes one hundred million
(100,000,000) common shares and ten million preferred shares
to be issued. The officers and transfer agents issuing shares
of the Corporation shall ensure that the total number of
shares outstanding at any given time does not exceed this
number. Such officers and agents shall advise the Board at
least annually of the authorized shares remaining available
to be issued. No shares shall be issued for less than the par
value stated in the Charter. Each Charter provision shall be
observed until amended by Restated Articles or Articles of
Amendment duly filed with the Secretary of State.
1.02 REGISTERED AGENT AND OFFICE REQUIREMENT OF FILING
CHANGES WITH SECRETARY OF STATE
The address of the Registered Office provided in the Articles
of Incorporation, as duly filed with the Secretary of State
for the State of Nevada, is: 50 West Liberty Street, Suite
880, Reno, Nevada 89501.
The name of the Registered Agent of the Corporation at such
address, as set forth in its Articles of Incorporation, is:
Nevada Agency and Trust Company. The Registered Agent or
Office may be changed by filing a Statement of Change of
Registered Agent or Office or Both with the Secretary of
State, and not otherwise. Such filing shall be made promptly
with each change. Arrangements for each change in Registered
Agent or Office shall ensure that the Corporation is not
exposed to the possibility of a default judgment. Each
successive Registered Agent shall be of reliable character
and Ill informed of the necessity of immediately furnishing
the papers of any lawsuit against the Corporation to its
attorneys.
1.03 INITIAL BUSINESS OFFICE
The address of the initial principal business office of the
Corporation is hereby established as: 2400 Loop 35 #1502,
Alvin, Texas 77511.
The Corporation may have additional business offices within
the State of Nevada and where it may be duly qualified to do
business outside of Nevada, as the Board of Directors may
from time to time designate or the business of the
Corporation may require.
1.04 AMENDMENT OF BYLAWS
The Shareholders or Board of Directors, subject to any limits
imposed by the Shareholders, may amend or repeal these Bylaws
and adopt new Bylaws. All amendments shall be upon advice of
counsel as to legality, except in emergency. Bylaw changes
shall take effect upon adoption unless otherwise specified.
Notice of Bylaws changes shall be given in or before notice
given of the first Shareholders' meeting following their
adoption.
ARTICLE TWO - DIRECTORS AND DIRECTORS' MEETINGS
2.01 ACTION BY CONSENT OF BOARD WITHOUT MEETING
Any action required or permitted to be taken by the Board of
Directors may be taken without a meeting, and shall have the
same force and effect as a unanimous vote of Directors, if
all members of the Board consent in writing to the action.
Such consent may be given individually or collectively.
2.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws
and by the Business Corporation Act, Directors may
participate in and hold a meeting by means of conference
call or similar communication by which all persons
participating can hear each other. Participation in such a
meeting shall constitute presence in person at such meeting,
except participation for the express purpose of objecting to
the transaction of any business on the ground that the
meeting is not lawfully called or convened.
2.03 PLACE OF MEETINGS
Meetings of the Board of Directors shall be held at the
business office of the Corporation or at such other place
within or without the State of Nevada as may be designated
by the Board.
2.04 REGULAR MEETINGS
Regular meetings of the Board of Directors shall be held,
without call or notice, immediately following each annual
Shareholders' meeting, and at such other regularly repeating
times as the Directors may determine.
2.05 CALL OF SPECIAL MEETING
Special meetings of the Board of Directors for any purpose
may be called at any time by the President or, if the
President is absent or unable or refuses to act, by any Vice
President or any two Directors. Written notices of the
special meetings, stating the time and place of the meeting,
shall be mailed ten days before, or telegraphed or
personally delivered so as to be received by each Director
not later than two days before, the day appointed for the
meeting. Notice of meetings need not indicate an agenda.
Generally, a tentative agenda will be included, but the
meeting shall not be confined to any agenda included with
the notice.
Meetings provided for in these Bylaws shall not be invalid
for lack of notice if all persons entitled to notice consent
to the meeting in writing or are present at the meeting and
do not object to the notice given. Consent may be given
either before or after the meeting.
Upon providing notice, the Secretary or other officer
sending notice shall sign and file in the Corporate Record
Book a statement of the details of the notice given to each
Director. If such statement should later not be found in
the Corporate Record Book, due notice shall be presumed.
2.06 QUORUM
The presence throughout any Directors' meeting, or
adjournment thereof, of a majority of the authorized number
of Directors shall be necessary to constitute a quorum to
transact any business, except to adjourn. If a quorum is
present, every act done or resolution passed by a majority
of the Directors present and voting shall be the act of the
Board of Directors.
2.07 ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS
A quorum of the Directors may adjourn any Directors' meeting
to meet again at a stated hour on a stated day. Notice of
the time and place where an adjourned meeting will be held
need not be given to absent Directors if the time and place
is fixed at the adjourned meeting. In the absence of a
quorum, a majority of the Directors present may adjourn to a
set time and place if notice is duly given to the absent
members, or until the time of the next regular meeting of
the Board.
2.08 CONDUCT OF MEETINGS
At every meeting of the Board of Directors, the Chairman of
the Board, if there is such an officer, and if not, the
President, or in the President's absence, a Vice President
designated by the President, or in the absence of such
designation, a Chairman chosen by a majority of the
Directors present, shall preside. The Secretary of the
Corporation shall act as Secretary of the Board of
Directors' meetings. When the Secretary is absent from any
meeting, the Chairman may appoint any person to act as
Secretary of that meeting.
2.09 POWERS OF THE BOARD OF DIRECTORS
The business and affairs of the Corporation and all
corporate powers shall be exercised by or under authority of
the Board of Directors, subject to limitations imposed by
law, the Articles of Incorporation, any applicable
Shareholders' agreement, and these Bylaws.
2.10 BOARD COMMITTEESBAUTHORITY TO APPOINT
The Board of Directors may designate an executive committee
and one or more other committees to conduct the business and
affairs of the Corporation to the extent authorized. The
Board shall have the power at any time to change the powers
and membership of, fill vacancies in, and dissolve any
committee. Members of any committee shall receive such
compensation as the Board of Directors may from time to time
provide. The designation of any committee and the delegation
of authority thereto shall not operate to relieve the Board
of Directors, or any member thereof, of any responsibility
imposed by law.
2.11 TRANSACTIONS WITH INTERESTED DIRECTORS
Any contract or other transaction between the Corporation
and any of its Directors (or any corporation or firm in
which any of its Directors are directly or indirectly
interested) shall be valid for all purposes notwithstanding
the presence of that Director at the meeting during which
the contract or transaction was authorized, and
notwithstanding the Directors' participation in that
meeting. This section shall apply only if the contract or
transaction is just and reasonable to the Corporation at the
time it is authorized and ratified, the interest of each
Director is known or disclosed to the Board of Directors,
and the Board nevertheless authorizes or ratifies the
contract or transaction by a majority of the disinterested
Directors present. Each interested Director is to be counted
in determining whether a quorum is present, but shall not
vote and shall not be counted in calculating the majority
necessary to carry the vote. This section shall not be
construed to invalidate contracts or transactions that would
be valid in its absence.
2.12 NUMBER OF DIRECTORS
The number of Directors of this Corporation shall be no more
than five (5) or less than one (1). No Director need be a
resident of Nevada or a Shareholder. The number of Directors
may be increased or decreased from time to time by amendment
to these Bylaws. Any decrease in the number of Directors
shall not have the effect of shortening the tenure, which
any incumbent Director would otherwise enjoy.
2.13 TERM OF OFFICE
Directors shall be entitled to hold office until their
successors are elected and qualified. Election for all
Director positions, vacant or not vacant, shall occur at
each annual meeting of the Shareholders and may be held at
any special meeting of Shareholders called specifically for
that purpose.
2.14 REMOVAL OF DIRECTORS
The entire Board of Directors or any individual Director may
be removed from office by a vote of Shareholders holding a
majority of the outstanding shares entitled to vote at an
election of Directors. HoIver, if less than the entire Board
is to be removed, no one of the Directors may be removed if
the votes cast against his removal would be sufficient to
elect him if then cumulatively voted at an election of the
entire Board of Directors. No director may be so removed
except at an election of the class of Directors of which he
is a part. If any or all Directors are so removed, new
Directors may be elected at the same meeting. Whenever a
class or series of shares is entitled to elect one or more
Directors under authority granted by the Articles of
Incorporation, the provisions of this Paragraph apply to the
vote of that class or series and not to the vote of the
outstanding shares as a whole.
2.15 VACANCIES
Vacancies on the Board of Directors shall exist upon the
occurrence of any of the following events: (a) the death,
resignation, or removal of any Director; (b) an increase in
the authorized number of Directors; or (c) the failure of
the Shareholders to elect the full authorized number of
Directors to be voted for at any annual, regular, or special
Shareholders' meeting at which any Director is to be
elected.
2.15(a) DECLARATION OF VACANCY
A majority of the Board of Directors may declare vacant the
office of a Director if the Director: (a) is adjudged
incompetent by a court order; (b) is convicted of a crime
involving moral turpitude; (c) or fails to accept the office
of Director, in writing or by attending a meeting of the
Board of Directors, within thirty (30) days of notice of
election.
2.15(b) FILLING VACANCIES BY DIRECTORS
Vacancies other than those caused by an increase in the
number of Directors may be filled temporarily by majority
vote of the remaining Directors, though less than a quorum,
or by a sole remaining Director. Each Director so elected
shall hold office until a qualified successor is elected at
a Shareholders' meeting.
2.15(c) FILLING VACANCIES BY SHAREHOLDERS
Any vacancy on the Board of Directors, including those
caused by an increase in the number of Directors shall be
filled by the Shareholders at the next annual meeting or at
a special meeting called for that purpose. Upon the
resignation of a Director tendered to take effect at a
future time, the Board or the Shareholders may elect a
successor to take office when the resignation becomes
effective.
2.16 COMPENSATION
Directors shall receive such compensation for their services
as Directors as shall be determined from time to time by
resolution of the Board. Any Director may serve the
Corporation in any other capacity as an officer, agent,
employee, or otherwise, and receive compensation therefor.
2.17 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Board of Directors shall authorize the Corporation to
pay or reimburse any present or former Director or officer
of the Corporation any costs or expenses actually and
necessarily incurred by that officer in any action, suit, or
proceeding to which the officer is made a party by reason of
holding that position, provided, hoIver, that no officer
shall receive such indemnification if finally adjudicated
therein to be liable for negligence or misconduct in office.
This indemnification shall extend to good-faith expenditures
incurred in anticipation of threatened or proposed
litigation. The Board of Directors may in proper cases,
extend the indemnification to cover the good-faith
settlement of any such action, suit, or proceeding, whether
formally instituted or not.
2.18 INSURING DIRECTORS, OFFICERS, AND EMPLOYEES
The Corporation may purchase and maintain insurance on
behalf of any Director, officer, employee, or agent of the
Corporation, or on behalf of any person serving at the
request of the Corporation as a Director, officer, employee,
or agent of another corporation, partnership, joint venture,
trust, or other enterprise, against any liability asserted
against that person and incurred by that person in any such
corporation, whether or not the Corporation has the power to
indemnify that person against liability for any of those
acts.
ARTICLE THREE - SHAREHOLDERS' MEETINGS
3.01 ACTION WITHOUT MEETING
Any action that may be taken at a meeting of the
Shareholders under any provision of the Nevada Business
Corporation Act may be taken without a meeting if authorized
by a consent or waiver filed with the Secretary of the
Corporation and signed by all persons who would be entitled
to vote on that action at a Shareholders' meeting. Each such
signed consent or waiver, or a true copy thereof, shall be
placed in the Corporate Record Book.
3.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws
and by the Business Corporation Act, Shareholders may
participate in and hold a meeting by means of conference
call or similar communication by which all persons
participating can hear each other. Participation in such a
meeting shall constitute presence in person at such meeting,
except participation for the express purpose of objecting to
the transaction of any business on the ground that the
meeting is not lawfully called or convened.
3.03 PLACE OF MEETINGS
Shareholders' meetings shall be held at the business office
of the Corporation, or at such other place within or without
the State of Nevada as may be designated by the Board of
Directors or the Shareholders.
3.04 NOTICE OF MEETINGS
The President, the Secretary, or the officer or persons
calling a Shareholders' Meeting. shall give notice, or cause
it to be given, in writing to each Director and to each
Shareholder entitled to vote at the meeting at least ten
(10) but not more than sixty (60) days before the date of
the meeting. Such notice shall state the place, day, and
hour of the meeting, and, in case of a special meeting, the
purpose or purposes for which the meeting is called. Such
written notice may be given personally, by mail, or by other
means. Such notice shall be addressed to each recipient at
such address as appears on the Books of the Corporation or
as the recipient has given to the Corporation for the
purpose of notice. Meetings provided for in these Bylaws
shall not be invalid for lack of notice if all persons
entitled to notice consent to the meeting in writing or are
present at the meeting in person or by proxy and do not
object to the notice given, Consent may be given either
before or after the meeting. Notice of the reconvening of an
adjourned meeting is not necessary unless the meeting is
adjourned more than thirty days past the date stated in the
notice, in which case notice of the adjourned meeting shall
be given as in the case of any special meeting. Notice may
be waived by written waivers signed either before or after
the meeting by all persons entitled to the notice.
3.05 VOTING LIST
At least ten (10), but not more than sixty (60), days before
each Shareholders' meeting, the officer or agent having
charge of the Corporation's share transfer books shall make
a complete list of the Shareholders entitled to vote at that
meeting or any adjournment thereof, arranged in alphabetical
order, with the address and the number of shares held by
each. The list shall be kept on file at the Registered
Office of the Corporation for at least ten (10) days prior
to the meeting, and shall be subject to inspection by any
Director, officer, or Shareholder at any time during usual
business hours. The list shall also be produced and kept
open at the time and place of the meeting and shall be
subject, during the whole time of the meeting, to the
inspection of any Shareholder. The original share transfer
books shall be prima facie evidence as to the Shareholders
entitled to examine such list or transfer books or to vote
at any meeting of Shareholders. HoIver, failure to prepare
and to make the list available in the manner provided above
shall not affect the validity of any action taken at the
meeting.
3.06 VOTES PER SHARE
Each outstanding share, regardless of class, shall be
entitled to one (1) vote on each matter submitted to a vote
at a meeting of Shareholders, except to the extent that the
voting rights of the shares of any class or classes are
limited or denied pursuant to the Articles of Incorporation.
A Shareholder may vote in person or by proxy executed in
writing by the Shareholder, or by the Shareholder's duly
authorized attorney-in-fact.
3.07 CUMULATIVE VOTING
Cumulative voting is expressly forbidden.
3.08 PROXIES
A Shareholder may vote either in person or by proxy executed
in writing by the Shareholder or his or her duly authorized
attorney in fact. Unless otherwise provided in the proxy or
by law, each proxy shall be revocable and shall not be valid
after eleven (11) months from the date of its execution,
3.09 QUORUM
3.09(a) QUORUM OF SHAREHOLDERS
As to each item of business to be voted on, the presence (in
person or by proxy) of the persons who are entitled to vote a
majority of the outstanding voting shares on that matter
shall constitute the quorum necessary for the consideration
of the matter at a Shareholders' meeting. The vote of the
holders of a majority of the shares entitled to vote on the
matter and represented at a meeting at which a quorum is
present shall be the act of the Shareholders' meeting.
3.09(b) ADJOURNMENT FOR LACK OR LOSS OF QUORUM
No business may be transacted in the absence of a quorum, or
upon the withdrawal of enough Shareholders to leave less than
a quorum; other than to adjourn the meeting from time to time
by the vote of a majority of the shares represented at the
meeting.
3.10 VOTING BY VOICE OR BALLOT
Elections for Directors need not be by ballot unless a
Shareholder demands election by ballot before the voting
begins.
3.11 CONDUCT OF MEETINGS
Meetings of the Shareholders shall be chaired by the
President, or, in the President's absence, a Vice President
designated by the President, or, in the absence of such
designation, any other person chosen by a majority of the
Shareholders of the Corporation present in person or by proxy
and entitled to vote. The Secretary of the Corporation, or,
in the Secretary's absence, an Assistant Secretary, shall act
as Secretary of all meetings of the Shareholders. In the
absence of the Secretary or Assistant Secretary, the Chairman
shall appoint another person to act as Secretary of the
meeting.
3.12 ANNUAL MEETINGS
The time, place, and date of the annual meeting of the
Shareholders of the Corporation, for the purpose of electing
Directors and for the transaction of any other business as
may come before the meeting, shall be set from time to time
by a majority vote of the Board of Directors. If the day
fixed for the annual meeting shall be on a legal holiday in
the State of Nevada, such meeting shall be held on the next
succeeding business day. If the election of Directors is not
held on the day thus designated for any annual meeting, or at
any adjournment thereof, the Board of Directors shall cause
the election to be held at a special meeting of the
Shareholders as soon thereafter as possible.
3.13 FAILURE TO HOLD ANNUAL MEETING
If, within any 13-month period, an annual Shareholders'
Meeting is not held, any Shareholder may apply to a court of
competent jurisdiction in the county in which the principal
office of the Corporation is located for a summary order that
an annual meeting be held.
3.14 SPECIAL MEETINGS
A special Shareholders' meeting may be called at any time by.
(a) the President; (b) the Board of Directors; or (c) one or
more Shareholders holding in the aggregate one-tenth or more
of all the shares entitled to vote at the meeting. Such
meeting may be called for any purpose. The party calling the
meeting may do so only by written request sent by registered
mail or delivered in person to the President or Secretary.
The officer receiving the written request shall within ten
(10) days from the date of its receipt cause notice of the
meeting to be sent to all the Shareholders entitled to vote
at such a meeting. If the officer does not give notice of the
meeting within ten (10) days after the date of receipt of the
written request, the person or persons calling the meeting
may fix the time of the meeting and give the notice. The
notice shall be sent pursuant to Section 3.04 of these
Bylaws. The notice of a special Shareholders' meeting must
state the purpose or purposes of the meeting and, absent
consent of every Shareholder to the specific action taken,
shall be limited to purposes plainly stated in the notice,
notwithstanding other provisions herein.
ARTICLE FOUR - OFFICERS
4.01 TITLE AND APPOINTMENT
The officers of the Corporation shall be a President and a
Secretary, as required by law. The Corporation may also have,
at the discretion of the Board of Directors, a Chairman of
the Board, one or more Vice Presidents, a Treasurer, one or
more Assistant Secretaries, and one or more Assistant
Treasurers. One person may hold any two or more offices,
including President and Secretary. All officers shall be
elected by and hold office at the pleasure of the Board of
Directors, which shall fix the compensation and tenure of all
officers.
4.01(a) CHAIRMAN OF THE BOARD
The Chairman, if there shall be such an officer, shall, if
present, preside at the meetings of the Board of Directors
and exercise and perform such other powers and duties as may
from time to time be assigned to the Chairman by the Board of
Directors or prescribed by these Bylaws.
4.01(b) PRESIDENT
Subject to such supervisory powers, if any, as may be given
to the Chairman, if there is one, by the Board of Directors,
the President shall be the chief executive officer of the
Corporation and shall, subject to the control of the Board of
Directors, have general supervision, direction, and control
of the business and officers of the Corporation. The
President shall have the general powers and duties of
management usually vested in the office of President of a
corporation; shall have such other powers and duties as may
be prescribed by the Board of Directors or the Bylaws; and
shall be ex officio a member of all standing committees,
including the executive committee, if any. In addition, the
President shall preside at all meetings of the Shareholders
and in the absence of the Chairman, or if there is no
Chairman, at all meetings of the Board of Directors.
4.01(c) VICE PRESIDENT
Any Vice President shall have such powers and perform such
duties as from time to time may be prescribed by these
Bylaws, by the Board of Directors, or by the President. In
the absence or disability of the President, the senior or
duly appointed Vice President, if any, shall perform all the
duties of the President, pending action by the Board of
Directors when so acting, such Vice President shall have all
the powers of, and be subject to all the restrictions on, the
President.
4.01(d) SECRETARY
The Secretary shall:
A. See that all notices are duly given in accordance with
the provisions of these Bylaws and as required by law. In
case of the absence or disability of the Secretary. or the
Secretary's refusal or neglect to act, notice may be given
and served by an Assistant Secretary or by the Chairman, the
President, any Vice President, or by the Board of Directors.
B. Keep the minutes of corporate meetings, and the
Corporate Record Book, as set out in Section 7.01 hereof.
C. Maintain, in the Corporate Record Book, a record of
all share certificates issued or canceled and all shares of
the Corporation canceled or transferred.
D. Be custodian of the Corporation's records and of any
seal, which the Corporation may from time to time adopt. when
the Corporation exercises its right to use a seal, the
Secretary shall see that the seal is embossed on all share
certificates prior to their issuance and on all documents
authorized to be executed under seal in accordance with the
provisions of these Bylaws.
E. In general, perform all duties incident to the office
of Secretary, and such other duties as from time to time may
be required by Sections 7.01, 7.02, and 7.03 of these Bylaws,
by these Bylaws generally, by the Board of Directors, or by
the President.
4.01(e) TREASURER
The Treasurer shall:
F. Have charge and custody of, and be responsible for,
all funds and securities of the Corporation, and deposit all
funds in the name of the Corporation in those banks, trust
companies, or other depositories that shall be selected by
the Board of Directors.
G. Receive, and give receipt for, monies due and payable
to the Corporation.
H. Disburse or cause to be disbursed the funds of the
Corporation as may be directed by the Board of Directors,
taking proper vouchers for those disbursements.
I. If required by the Board of Directors or the
President, give to the Corporation a bond to assure the
faithful performance of the duties of the Treasurer's office
and the restoration to the Corporation of all corporate
books, papers, vouchers, money, and other property of
whatever kind in the Treasurer's possession or control, in
case of the Treasurer's death, resignation, retirement, or
removal from office. Any such bond shall be in a sum
satisfactory to the Board of Directors, with one or more
sureties or a surety company satisfactory to the Board of
Directors.
J. In general, perform all the duties incident to the
office of Treasurer and such other duties as from time to
time may be assigned to the Treasurer by Sections 7.O4 and
7.05 of these Bylaws, by these Bylaws generally, by the Board
of Directors, or by the President.
4.01(f) ASSISTANT SECRETARY AND ASSISTANT TREASURER
The Assistant Secretary or Assistant Treasurer shall have
such powers and perform such duties as the Secretary or
Treasurer, respectively, or as the Board of Directors or
President may prescribe. In case of the absence of the
Secretary or Treasurer, the senior Assistant Secretary or
Assistant Treasurer, respectively, may perform all of the
functions of the Secretary or Treasurer.
4.02 REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by
vote of a majority of the Directors at any regular or special
meeting of the Board, or, except in case of an officer chosen
by the Board of Directors, by any committee or officer upon
whom that power of removal may be conferred by the Board of
Directors. Such removal shall be without prejudice to the
contract rights, if any, of the person removed. Any officer
may resign at any time by giving written notice to the Board
of Directors, the President, or the Secretary of the
Corporation. Any resignation shall take effect on the date of
the receipt of that notice or at any later time specified
therein, and, unless otherwise specified therein, the
acceptance of that resignation shall not be necessary to make
it effective.
4.03 VACANCIES
Upon the occasion of any vacancy occurring in any office of
the Corporation, by reason of death, resignation, removal, or
otherwise, the Board of Directors may elect an acting
successor to hold office for the unexpired term or until a
permanent successor is elected.
4.04 COMPENSATION
The compensation of the officers shall be fixed from time to
time by the Board of Directors, and no officer shall be
prevented from receiving a salary by reason of the fact that
the officer is also a Shareholder or a Director of the
Corporation, or both.
ARTICLE FIVE - AUTHORITY TO EXECUTE INSTRUMENTS
5.01 NO AUTHORITY ABSENT SPECIFIC AUTHORIZATION
These Bylaws provide certain authority for the execution of
instruments. The Board of Directors, except as otherwise
provided in these Bylaws, may additionally authorize any
officer or officers, agent or agents, to enter into any
contract or execute and deliver any instrument in the name of
and on behalf of the Corporation, and such authority may be
general or confined to specific instances. Unless expressly
authorized by these Bylaws or the Board of Directors, no
officer, agent, or employee shall have any power or authority
to bind the Corporation by any contract or engagement nor to
pledge its credit nor to render it peculiarly liable for any
purpose or in any amount.
5.02 EXECUTION OF CERTAIN INSTRUMENTS
Formal contracts of the Corporation, promissory notes, deeds,
deeds of trust, mortgages, pledges, and other evidences of
indebtedness of the Corporation, other corporate documents,
and certificates of ownership of liquid assets held by the
Corporation shall be signed or endorsed by the President or
any Vice President and by the Secretary or the Treasurer,
unless otherwise specifically determined by the Board of
Directors or otherwise required by law.
ARTICLE SIX - ISSUANCE AND TRANSFER OF SHARES
6.01 CLASSES AND SERIES OF SHARES
The Corporation may issue one or more classes or series of
shares, or both. Any of these classes or series may have
full, limited, or no voting rights, and may have such other
preferences, rights, privileges, and restrictions as are
stated or authorized in the Articles of Incorporation. All
shares of any one class shall have the same voting,
conversion, redemption, and other rights, preferences,
privileges, and restrictions, unless the class is divided
into series, If a class is divided into series, all the
shares of any one series shall have the same voting,
conversion, redemption, and other. rights, preferences,
privileges, and restrictions. There shall always be a class
or series of shares outstanding that has complete voting
rights except as limited or restricted by voting rights
conferred on some other class or series of outstanding
shares.
6.02 CERTIFICATES FOR FULLY PAID SHARES
Neither shares nor certificates representing shares may be
issued by the Corporation until the full amount of the
consideration has been received when the consideration has
been paid to the Corporation, the shares shall be deemed to
have been issued and the certificate representing the shares
shall be issued to the shareholder.
6.03 CONSIDERATION FOR SHARES
Shares may be issued for such consideration as may be fixed
from time to time by the Board of Directors, but not less
than the par value stated in the Articles of Incorporation.
The consideration paid for the issuance of shares shall
consist of money paid, labor done, or property actually
received, and neither promissory notes nor the promise of
future services shall constitute payment nor partial payment
for shares of the Corporation.
6.04 REPLACEMENT OF CERTIFICATES
No replacement share certificate shall be issued until the
former certificate for the shares represented thereby shall
have been surrendered and canceled, except that replacements
for lost or destroyed certificates may be issued, upon such
terms, conditions, and guarantees as the Board may see fit to
impose, including the filing of sufficient indemnity.
6.05 SIGNING CERTIFICATES-FACSIMILE SIGNATURES
All share certificates shall be signed by the officer(s)
designated by the Board of Directors. The signatures of the
foregoing officers may be facsimiles. If the officer who has
signed or whose facsimile signature has been placed on the
certificate has ceased to be such officer before the
certificate issued, the certificate may be issued by the
Corporation with the same effect as if he or she Ire such
officer on the date of its issuance.
6.06 TRANSFER AGENTS AND REGISTRARS
The Board of Directors may appoint one or more transfer
agents or transfer clerks, and one or more registrars, at
such times and places as the requirements of the Corporation
may necessitate and the Board of Directors may designate.
Each registrar appointed, if any, shall be an incorporated
bank or trust company, either domestic or foreign.
6.07 CONDITIONS OF TRANSFER
The party in whose name shares of stock stand on the books of
the Corporation shall be deemed the owner thereof as regards
the Corporation, provided that whenever any transfer of
shares shall be made for collateral security, and not
absolutely, and prior written notice thereof shall be given
to the Secretary of the Corporation, or to its transfer
agent, if any, such fact shall be stated in the entry of the
transfer.
6.08 REASONABLE DOUBTS AS TO RIGHT TO TRANSFER
When a transfer of shares is requested and there is
reasonable doubt as to the right of the person seeking the
transfer, the Corporation or its transfer agent, before
recording the transfer of the shares on its books or issuing
any certificate therefor, may require from the person seeking
the transfer reasonable proof of that person's right to the
transfer. If there remains a reasonable doubt of the right to
the transfer, the Corporation may refuse a transfer unless
the person gives adequate security or a bond of indemnity
executed by a corporate surety or by two individual sureties
satisfactory to the Corporation as to form, amount, and
responsibility of sureties. The bond shall be conditioned to
protect the Corporation, its officers, transfer agents, and
registrars, or any of them, against any loss, damage,
expense, or other liability for the transfer or the issuance
of a new certificate for shares.
ARTICLE SEVEN - CORPORATE RECORDS AND ADMINISTRATION
7.01 MINUTES OF CORPORATE MEETINGS
The Corporation shall keep at the principal office, or such
other place as the Board of Directors may order, a book
recording the minutes of all meetings of its Shareholders and
Directors, with the time and place of each meeting, whether
such meeting was regular or special, a copy of the notice
given of such meeting, or of the written waiver thereof, and,
if it is a special meeting, how the meeting was authorized.
The record book shall further show the number of shares
present or represented at Shareholders' meetings, and the
names of those present and the proceedings of all meetings.
7.02 SHARE REGISTER
The Corporation shall keep at the principal office, or at the
office of the transfer agent, a share register showing the
names of the Shareholders, their addresses, the number and
class of shares issued to each, the number and date of
issuance of each certificate issued for such shares, and the
number and date of cancellation of every certificate
surrendered for cancellation. The above information may be
kept on an information storage device such as a computer,
provided that the device is capable of reproducing the
information in clearly legible form. If the Corporation is
taxed under Internal Revenue Code Section 1244 or Subchapter
S, the Officer issuing shares shall maintain the appropriate
requirements regarding issuance.
7.03 CORPORATE SEAL
The Board of Directors may at any time adopt, prescribe the
use of, or discontinue the use of, such corporate seal as it
deems desirable, and the appropriate officers shall cause
such seal to be affixed to such certificates and documents as
the Board of Directors may direct.
7.04BOOKS OF ACCOUNT
The Corporation shall maintain correct and adequate
accounts of its properties and business transactions,
including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital,
surplus, and shares. The corporate bookkeeping
procedures shall conform to accepted accounting
practices for the Corporation's business or businesses.
subject to the foregoing, The chart of financial
accounts shall be taken from, and designed to
facilitate preparation of, current corporate tax
returns. Any surplus, including earned surplus, paid-in
surplus, and surplus arising from a reduction of stated
capital, shall be classed by source and shown in a
separate account. If the Corporation is taxed under
Internal Revenue Code Section 1244 or Subchapter S, the
officers and agents maintaining the books of account
shall maintain the appropriate requirements.
7.05INSPECTION OF CORPORATE RECORDS
A Director or Shareholder demanding to examine the
Corporation's books or records may be required to first
sign an affidavit that the demanding party will not
directly or indirectly participate in reselling the
information and will keep it confidential other than in
use for proper purposes reasonably related to the
Director's or Shareholder's role. A Director who
insists on examining the records while refusing to sign
this affidavit thereby resigns as a Director.
7.06FISCAL YEAR
The fiscal year of the Corporation shall be as
determined by the Board of Directors and approved by
the Internal Revenue Service. The Treasurer shall
forthwith arrange a consultation with the Corporation's
tax advisers to determine whether the Corporation is to
have a fiscal year other than the calendar year. If so,
the Treasurer shall file an election with the Internal
Revenue Service as early as possible, and all
correspondence with the IRS, including the application
for the Corporation's Employer Identification Number,
shall reflect such non-calendar year election.
7.07 WAIVER OF NOTICE
Any notice required by law or by these Bylaws may be
waived by execution of a written waiver of notice
executed by the person entitled to the notice. The
waiver may be signed before or after the meeting.
ARTICLE EIGHT- ADOPTION OF INITIAL BYLAWS
The Board of Directors adopted the foregoing bylaws on
October 6, 1999.
/S/ John T. Bauska
Director
/S/ David R. Mortenson
Director
Attested to, and certified by: /S/ David R. Mortenson,
Secretary
EXHIBIT 5.1
OPINION RE: LEGALITY
ARTHUR J. FROST, LTD.
Arthur J. Frost, Esq.
7549 W. Heatherbrae Drive
Phoenix, Arizona 85033
(623) 849-2050
(623) 873-1799 Facsimile
June 20, 2000
Xunantunich Inc.
21112 123rd Avenue
Maple Ridge, BC V2X 4B4
Canada
Re: Xunatunich Inc. Registration Statement on Form SB2
Ladies and Gentlemen:
I have acted as counsel for Xunantunich Inc., a Nevada corporation
(the "Company"), in connection with the preparation of the
registration statement on Form SB-2 (the "Registration Statement")
filed with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933, as amended (the "Act"),
relating to the public offering (the "Offering") of up to 500,000
shares (the "Shares") of the Company's common stock, $.001 par value
(the "Common Stock"). This opinion is being furnished pursuant to Item
601(b)(5) of Regulation S-K under the Act.
In rendering the opinion set forth below, I have reviewed (a) the
Registration Statement and the exhibits thereto; (b) the Company's
Articles of Incorporation; (c) the Company's Bylaws; (d) certain
records of the Company's corporate proceedings as reflected in its
minute books; and (e) such statutes, records and other documents as we
have deemed relevant. In my examination, I have assumed the
genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and conformity with the originals of all
documents submitted to us as copies thereof. In addition, I have made
such other examinations of law and fact as we have deemed relevant in
order to form a basis for the opinion hereinafter expressed.
Based upon the foregoing, I am of the opinion that the Shares are
validly
issued, fully paid and non-assessable.
I hereby consent to the use of this opinion as an Exhibit to the
Registration
Statement
Very truly yours,
/s/ Arthur J. Frost
Arthur J. Frost
EXHIBIT 10.1
LICENSE AGREEMENT
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT ("Agreement") is made and effective as of
June 10, 1999 by and between Vitamineralherb.Com Inc., a Nevada
Corporation ("Vita") and David R. Mortenson & Associates, a Texas
general partnership (DRM), with reference to the following facts:
A. Vita is in the business of Internet marketing of private labeled
vitamin, mineral and/or nutritional supplement products as well
as other health and fitness (the Products) to health
practitioners and fitness practitioners.
B. Vita desires to increase its marketing exposure to health
practitioners and fitness practitioners.
C. DRM desires to market the Products to various health and fitness
practitioners in territories in which Vita does not currently market.
The parties agree that DRM may expand the marketing of the Products by
entering into sub-distribution agreements with other entities (the
Sub-licensees).
NOW THEREFORE, for $10.00 and in consideration of the mutual promises,
warranties and covenants herein contained, the parties hereby agree as
follows:
1. Scope of Agreement. This Agreement shall govern all Products sold
through Vitas web site to any customer of DRM or of Sub-licensee(s)
(Customers(s)). Exhibit A contains detailed information regarding
specifications, quality control, pricing and other terms relating to
the first Product(s) to be ordered through Vitas web site. The
parties agree that Exhibit A will be amended to include similar
information with respect to any future orders of the same product or
any new Product ordered through Vita by DRM or by Sub-licensee(s) or
Customers. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS
AGREEMENT AND ANY PURCHASE ORDER SUBMITTED BY CUSTOMER, THE TERMS OF
THIS AGREEMENT WILL CONTROL.
2. Manufacture of Products. Vitamin, mineral and/or nutritional
supplement Products marketed through Vitas web site shall be products
manufactured by FDA approved manufacturers which shall manufacture,
package and prepare the Products for shipment in accordance with the
specifications and requirements described on Exhibit A hereto as it
may be modified from time to time. Quality control standards relating
to the Product's weight, color, consistency, micro-biological content,
labeling and packaging are also set forth on Exhibit A. In the event
that Exhibit A is incomplete, Products shall be manufactured and
shipped in accordance with industry standards.
3. Labeling; Packaging; Shipping. DRMs or Sub-licensees customers
shall use standard labels as specified by Vita. Vita agrees to insert
each customers name and address on the standard labels in return for
handling charges which shall be specified from time to time. Vita
warrants that the standard labels shall contain all information
necessary to conform to industry requirements.
4. Products and Pricing. The pricing for the Product(s) is set forth
on Exhibit A and may be amended from time to time. Terms are payment
by credit card or electronic funds transfer at time of purchase.
Unless otherwise specified on Exhibit A, the lead time from receipt of
payment to delivery is 4-6 weeks.
5. Minimum Purchases for Vitamin, Mineral, and/or Nutritional
Supplements. The minimum purchase order quantity is 100 bottles per
formulation for standard Products. Customer Formulas, as defined
herein, shall have minimum purchase quantities of 5,000 units unless
and until such Customer Formula shall have been added to the standard
Products.
6. Web Site Maintenance; Fees. Vita agrees to maintain a web site
(the Web Site) for sales of Product by DRM or its Sub-licensee(s).
DRM agrees that all sales of Product made by DRM or its Sub-licensees
will be accomplished through the Web Site. DRM further agrees that
DRM shall pay to Vita a maintenance fee of $500 yearly, beginning on
the anniversary date of this Agreement, for maintenance of the Web
site. DRM further agrees that the Sub-licensees shall each be
obligated to pay $500 yearly to Vita, on the anniversary date(s) of
the agreement(s) between Sub-licensee(s) and DRM, for maintenance of
the Web Site.
7. Rights in Formulas.
(a) Customer Formulas. Any formula provided exclusively by DRMs
or Sub-licensees Customer shall be owned by Customer
("Customer Formula"), provided that such Customer Formula
does not substantially duplicate an existing Vita formula.
Vita agrees not to sell products to other customers using
any Customer Formula during the period in which Customer is
ordering products containing the formula and for so long as
Customer continues to purchase products containing the
Customer Formula.
(c) Joint Formulas. If Vita and Customer jointly create a
formula ("Joint Formula"), such Joint Formula will be
jointly owned by the parties. Vita agrees not to sell
products to other customers using the Joint Formula during
the period in which Customer is ordering products containing
the Joint Formula from Vita without written permission from
Customer. In the event that Customer fails to order a
specific Joint Formula Product for a period of 3 months,
Vita shall be free to sell products containing the Joint
Formula to other customers.
1. Term of Agreement; Breach of Agreement. This Agreement shall
continue for three (3) years, and shall be automatically renewed
unless one of the parties provides ninety (90) days written notice of
termination to the other party. In the event of a material breach of
this Agreement, the non-breaching party may provide written notice of
termination which shall be effective upon receipt. In the event of
termination by DRM or Sub-licensee prior to delivery of Product for
which a purchase order has been submitted, the terminating party shall
reimburse Vita for the cost of all Product and return of any boxes and
labels. In no event shall reimbursement of these amounts limit Vitas
legal right to seek compensation for the amount of its profit or any
other damages accrued under any canceled purchase order. In no event
shall Vita be required to accept or deliver product under any purchase
order if Vita has not received the outstanding balance due on any
previous purchase order in a timely manner. Failure to so perform
shall not be deemed a breach of this Agreement by Vita.
2. Override; Payment to DRM. All purchases shall be made through
the Web Site, and payments shall be made by credit card or other
approved methods such as electronic funds transfer or debit card. DRM
agrees that Vita shall retain a 10% override on all sales made through
the Web Site by DRM or Sub-licensee(s). Vita agrees to pay supplier
for the Product purchased, retain Vitas override, and remit the
balance to DRM or Sub-licensee. Vita further agrees to provide DRM
with a Monthly Sales Report of all sales made by DRM through the Web
Site. After DRM has notified Vita of any grant of Sub-license to a
territory, Vita will provide Sub-licensee(s) with a Monthly Sales
Report of all sales made by Sub-licensee(s) in Sub-licensee(s)
territory. Vita will deliver the printed breakdown by the tenth day
of the month following such sales.
3. Trade Secrets. Vita and DRM and Sub-licensee(s) are the owners of
certain products, technology, information, customer lists, services,
processes, financial information, pending or prospective
transactions/proposals, operating and marketing plans and procedures,
designs, product formulas, specifications, manufacturing methods,
ideas, prototypes, software, patent, trademark and copyright
applications or registrations and other similar data relating to each
party's business which data is not publicly known and derives economic
value from not being publicly known (collectively "Trade Secrets").
Each party agrees that it will not use or disclose to third parties
any Trade Secret it receives from the other, except as may be
contemplated by this Agreement. Each party agrees that it will take
all reasonable precautions to assure that no Trade Secret is conveyed
to any officer, employee, agent, manufacturer or other third party who
does not have a need to know such Trade Secret. The obligations
created by this Section 10 shall survive the termination of this
Agreement or any business relationship between the parties. Any Trade
Secret contained in any writing will be returned to the other party
promptly upon written request, together with any reproductions
thereof.
4. Governing Law; Dispute Resolution. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Texas. Any dispute arising under this Agreement shall be resolved
pursuant to the terms of the Dispute Resolution Agreement attached
hereto as Exhibit B.
5. Miscellaneous Provisions. This Agreement constitutes the entire
Agreement between the parties and supersedes any prior or
contemporaneous agreements, oral or written. This Agreement may only
be amended by a writing signed by both parties. This Agreement may not
be assigned without the written consent of the other party; provided
that this Agreement may be assigned without consent to an entity
acquiring all or substantially all of the assets of either party. Any
notice required or permitted to be given under this Agreement shall be
in writing and sent by telecopy, personal delivery or certified mail,
return receipt requested, as follows:
If to Vitamineralherb.Com, Inc.: Mr. D. R. Mortenson, President
P. O. Box 2370
Alvin TX 77512-
2370
If to David R. Mortenson &
Associates: Mr. David R.
Mortenson
P. O. Box
5034
Alvin TX
77512-5034
Fax:
(281)388-1047
Notice shall be deemed effective upon receipt if made by
confirmed telecopy, personal delivery or 48 hours after deposit
in the United States mail with the required postage.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of
the date first above written.
VITAMINERALHERB.COM INC.
a Nevada corporation
By:
David R. Mortenson, President
DAVID R. MORTENSON & ASSOCIATES
a Texas General Partnership
By _________________________________
David R. Mortenson, General Partner
EXHIBIT A
PRODUCT SPECIFICATIONS
In the event of any inconsistency between the terms of Customer's
purchase order and this Product Specification Sheet, this Sheet and
the terms of the Manufacturing Agreement shall control.
Short Product Name: _____________________________
Exact Product Ingredients and Percentages:
Other Product Specifications:
Color: ___________ Tablet Type: ____________
Consistency:______________
Weight: _______ Bottle Size/Color:____________ Bottle Count:
___________
Cotton Insert:____ Bottle Seal:____ Shrink Wrap Neck Band:___ Silicon
Pack:____
Micro-biological content: Customer to specify any requirements, if
none specified, product will be manufactured to industry standards.
Labels: Labels and/or boxes to be provided by Customer [identify any
size] _________
Labels/Boxes to be Received by [date] _____ to ensure timely delivery
Master Pack/Wrapping/Palleting Requirements (if
any):_________________________
Ship to Address: _________________________________________________
Order Quantity: (minimum 5,000 BOTTLES): ________
Price: _____________ FOB IFM's facility in San Diego, CA.
Delivery Dates(s): _______________________________________
Terms of Sale: 50% with submission of purchase order; 50% due upon
completion of manufacturing, unless otherwise specified
_________________________
Purchase Order Number: ________________
Date of Purchase Order: ________________
EXHIBIT B
DISPUTE RESOLUTION AGREEMENT THIS DISPUTE RESOLUTION AGREEMENT
("Dispute Resolution Agreement") is entered into and effective as of
December 24, 1999 by and between Vitamineralherb.com Inc., a Nevada
corporation, and David R. Mortenson & Associates, a Texas general
partnership.
1. INTENT OF PARTIES. The parties desire to establish a quick, final
and binding out-of-court dispute resolution procedure to be followed
in the unlikely event any dispute arising out of or related to the
Manufacturing Agreement dated June 9, 1999 between the parties
("Agreement"). As used in this Dispute Resolution Agreement, the term
"dispute" is used in its broadest and most inclusive sense and shall
include, without limitation, any disagreement, controversy, claim, or
cause of action between the parties arising out of, related to, or
involving the Agreement or the transactions evidenced by the Agreement
(collectively "Dispute").
2. NEGOTIATION. It is the intent of the parties that any Dispute be
resolved informally and promptly through good faith negotiation
between the parties. Therefore, in the event of a Dispute between the
parties, the following will apply:
A. Correspondence. Either party may initiate negotiation
proceedings by writing a certified or registered letter,
return receipt requested, to the other party referencing
this Dispute Resolution Agreement, setting forth the
particulars of the Dispute, the term(s) of the Agreement
involved and a suggested resolution of the problem. The
recipient of the letter must respond within ten (10) days
after its receipt of the letter with an explanation and
response to the proposed solution.
B. Meeting. If correspondence does not resolve the
Dispute, then the authors of the letters or their
representatives shall meet on at least one occasion and
attempt to resolve the matter. Such meeting shall occur not
later than thirty (30) days from the parties' last
correspondence. If the parties are unable to agree on the
location of such a meeting, the meeting shall be held at
IFM's corporate offices. Should this meeting not produce a
resolution of the matter, then either party may request
mandatory mediation (as provided below) by written notice to
the other party.
3. MEDIATION. Subject to the availability of the mediator, the
mediation shall occur not more than thirty (30) days after the request
for mediation. The mediation shall be conducted by retired Judge
William Yale, former Presiding Judge of the San Diego Superior Court,
who now acts as a full-time, highly respected mediator. The mediation
shall be held in San Diego, California. The cost of mediation shall be
borne equally by the parties. The mediation process shall continue
until the Dispute (or any part thereof) is resolved or until such time
as the mediator makes a finding that there is no possibility of
resolution short of referring the parties to final and binding
arbitration.
4. FINAL AND BINDING ARBITRATION. Should any Dispute (or pan
thereof) remain between the parties after completion of the
negotiation and mediation process set forth above, such Dispute shall
be submitted to final and binding arbitration in San Diego,
California. The arbitration shall be governed by the provisions of the
California Code of Civil Procedure ("CCP"), and the following
provisions, which shall supersede the CCP in the event of any
inconsistency:
A. Selection of Arbitrator(s). There shall be a single
arbitrator, except in the case where the amount in dispute
exceeds $100,000, in which case there shall be three
arbitrators. If the parties cannot agree upon acceptable
arbitrators(s) within ten (10) days of the termination of
the mediation, each party shall select one arbitrator from a
list of not less than five (5) arbitrators provided by the
other party. These two arbitrators shall select a third
arbitrator who shall serve as the sole arbitrator or the
third arbitrator, as the case may be. The determination of a
majority of the arbitrators or the sole arbitrator, as the
case may be, shall be conclusive upon the parties and shall
be non-appealable.
B. Discovery. No discovery shall be permitted, absent a
showing of good cause. Any discovery request should be
reviewed with the knowledge that this dispute resolution
process was mutually agreed upon and bargained for by the
parties with the intent to provide a cost-effective and
timely method of resolving disputes. Any discovery granted
by the arbitrator should be limited to that necessary to
protect the minimum due process rights of the parties.
C. Equitable Remedies. Any party shall have the right to
seek a temporary restraining order, preliminary or permanent
injunction or writ of attachment, without waiving the
negotiation, mediation and arbitration provision hereof. In
so doing, such party shall not be required to meet the
requirement of California Civil Code Section 1281.8. Any
other form of equitable or provisional relief and all
substantive matters relating to the Dispute shall be
determined solely by the arbitrator(s).
D. Attorney's Fees; Arbitration Costs. Each party may be
represented by an attorney or other representative selected
by the party. The costs of the arbitration shall be borne
equally by the parties. Each party shall bear its own
attorneys'/representatives' fees and costs; provided that if
the arbitrator(s) find either party has acted in bad faith,
the arbitrator(s) shall have discretion to award attorneys'
fees to the other party.
E. Scope of Arbitration; Limitation on Powers of
Arbitrator(s); Applicable Law. No party may raise new claims
against the other party in the arbitration not raised in the
mediation. The arbitrator shall have the power to resolve
all Disputes between the parties. The arbitrator(s) shall
not have the power to award treble, punitive or exemplary
damages and the parties hereby waive their right to receive
treble, punitive or exemplary damages, to the extent
permitted by law. The arbitrator(s) shall only interpret and
apply the terms and provision of the Agreement and shall not
change any such terms or provisions or deprive either party
of any right or remedy expressly or impliedly provided for
in the Agreement. The arbitrator(s) shall apply the law of
the State of California (excluding California's conflict of
law rules), or federal law, in those instances in which
federal law applies.
F. Designation of Witnesses/Exhibits; Duration of
Arbitration Process; Written Decision. At least thirty (30)
days before the arbitration is scheduled to commence, the
parties shall exchange lists of witnesses and copies of all
exhibits intended to be used in arbitration. The arbitration
shall be completed within 90 days o fthe selection of the
first arbitrator. The arbitrator(s) shall render a written
decision, which contains findings of fact and conclusions of
law, within 30 days of the conclusion of the arbitration and
shall specify a time within which the award shall be
performed. Judgment upon the award may be entered in any
court of competent jurisdiction.
5. MISCELLANEOUS
A. Enforcement of Negotiation/Mediation Provisions. If a party
demanding such compliance with this Agreement obtains a
court order directing the other party to comply with this
Dispute Resolution Agreement, the party demanding compliance
shall be entitled to all of its reasonable attorneys' fees
and costs in obtaining such order, regardless of which party
ultimately prevails in the matter.
B. Severability. Should any portion of this Dispute
Resolution Agreement be found to be invalid or unenforceable
such portion will be severed from this Dispute Resolution
Agreement, and the remaining portions shall continue to be
enforceable unless to do so would materially alter the
effectiveness of this Dispute Resolution Agreement in
achieving the stated intent of the parties.
C. Confidentiality. The parties agree that they will not
disclose to any third party that (1) they are engaged in the
dispute resolution process described herein, (2) the fact
of, nature or amount of any compromise resulting herefrom,
or (3) the fact of, nature or amount of any arbitration
award. This confidentiality obligation shall not extend to
the party's employees, spouses, accountant, bankers,
attorneys or insurers or in the event that disclosure is
otherwise required by law.
D. Time to Initiate Claims. An aggrieved party must mail
and the other party must receive the correspondence which
initiates negotiation proceedings in connection with a
Dispute as specified in Paragraph 2(A) (1) within one (1)
year of the date the aggrieved party first has, or with the
exercise of reasonable diligence should have had, knowledge
of the event(s) giving rise to the Dispute (the "One Year
Statute of Limitations"). No Dispute may be raised under
this Dispute Resolution Agreement after the expiration of
the One Year Statute of Limitations.
E. Entire Agreement. These dispute resolution provisions
express the entire agreement of the parties and there are no
other agreements, oral or written, concerning dispute
resolution, except as provided herein. Any ambiguity in the
provisions hereof shall not be construed against the
drafter. This Dispute Resolution Agreement may only be
modified in a writing signed by both parties.
F. Successors. This Dispute Resolution Agreement is
binding upon and inures to the benefit of the parties, their
agents, heirs, assigns, successors-in-interest, and any
person, firm or organization acting for or through them.
G. Venue and Jurisdiction. Venue and exclusive jurisdiction for
any action arising out of or related to this Dispute
Resolution Agreement (including, but not limited to,
equitable actions contemplated by Section 4 (C) and actions
brought to enforce or interpret this Dispute Resolution
Agreement) shall be in the state courts for the County of
San Diego, California or the federal court for the Southern
District of California.
H. Notice. Any notice or communication required to be
given hereunder shall be in writing and shall be mailed via
the United States Postal Service by Certified Mail or
Registered Mail, Return Receipt Requested, or by Federal
Express or other overnight courier which can document
delivery, to the address of the party to be served as shown
below (or such other address as the party shall from time to
time notify). Such notice shall be deemed to have been
served at the time when the same is received by the party
being served.
Vitameneralherb.com Inc.: Vitamineralherb.Com Inc
D. R.
Mortenson, President
P.O. Box 2370
Alvin TX 77512-
2370
David R. Mortenson & Assoc.:
David R. Mortenson, Gen. Partner
P. O.
Box 5034
Alvin, Texas 77512-5034
I. Acknowledgment of Legal Effect of this Dispute
Resolution Agreement. By signing this Dispute Resolution
Agreement, the parties acknowledge that they are giving up
any rights they may possess to have Disputes litigated in a
court and are hereby waiving the right to a trial by jury.
The parties further acknowledge that they are agreeing to a
one year statute of limitations regarding all Disputes and
that they are giving up their judicial rights to discovery
and to appeal, unless such rights are specifically set forth
above. The parties acknowledge that if they refuse to submit
to the provisions of this Dispute Resolution Agreement they
may be compelled to do so under the authority of the
California Code of Civil Procedure. The parties acknowledge
that they have had the opportunity to consult counsel
regarding the meaning and legal effect of this Dispute
Resolution Agreement and enter into it knowingly and
voluntarily.
IN WITNESS WHEREOF, the parties have entered into this Dispute
Resolution Agreement as of the date first above written.
Vitamineralherb.com Inc. David
R. Mortenson &
Associates
A
Nevada corporation
a Texas General
Partnership
By:
By:
Title: President
Title: General Partner
EXHIBIT 10.2
ASSIGNMENT OF LICENSE AGREEMENT
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement") is made and effective as of
January 3, 2000 by and between David R. Mortenson & Associates, a
Texas general partnership (DRM), and Xunantunich Inc., a Nevada
corporation (Licensee), with reference to the following facts:
A. On April 5, 1999, DRM and Licensee entered into an agreement
granting Licensee certain rights for the use of DRMs oxygen-enriched
water product (the Water Rights). In consideration therefor,
Licensee issued DRM 2,000,000 shares of Licensees common stock (the
Shares). Subsequent to the grant of the Water Rights, the underlying
contract granting DRM the rights to the technology to produce the
oxygen-enriched water came into dispute. In order to enable Licensee
to conduct a business and to preserve the value of the Shares, DRM
desires to grant additional rights to Licensee which are not in
dispute.
B. DRM is the holder of certain rights to an Internet marketing
system for vitamins, minerals, nutritional supplements, and other
health and fitness products (the Products) pursuant to an agreement
between Vitamineralherb.com Corp. (Vita), a Nevada corporation,
appended hereto as Exhibit C, which rights include the right to grant
licenses for use of the system in various territories.
C. Licensee desires to market the Products to various health and
fitness practitioners in the Territory, as hereinafter defined.
NOW THEREFORE, in consideration of the mutual promises, warranties and
covenants herein contained, the parties hereby agree as follows:
1. Scope of Agreement. This Agreement shall govern all Products sold
through Vitas web site to any of Licensees customers
(Customer(s)). Exhibit A contains detailed information regarding
specifications, quality control, pricing and other terms relating to
the first Product(s) to be ordered through Vitas web site. The
parties agree that Exhibit A will be amended to include similar
information with respect to any future orders of the same product or
any new Product ordered through Vita by DRM or by Sub-licensee(s) or
Customers. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS
AGREEMENT AND ANY PURCHASE ORDER SUBMITTED BY CUSTOMER, THE TERMS OF
THIS AGREEMENT WILL CONTROL.
2. Grant of License; Territory. Territory shall be the Canadian
Province of Alberta. DRM grants to Licensee the exclusive rights to
market the Products in the Territory through the Web Site.
3. Manufacture of Products. Vitamin, mineral and/or nutritional
supplement Products marketed through Vitas web site shall be products
manufactured by FDA approved manufacturers which shall manufacture,
package and prepare the Products for shipment in accordance with the
specifications and requirements described on Exhibit A hereto as it
may be modified from time to time. Quality control standards relating
to the Product's weight, color, consistency, micro-biological content,
labeling and packaging are also set forth on Exhibit A. In the event
that Exhibit A is incomplete, Products shall be manufactured and
shipped in accordance with industry standards.
4. Labeling; Packaging; Shipping. Customers shall use standard
labels as specified by Vita. Upon request by Customer, Customers
name and address will be inserted on the standard labels in return for
handling charges which shall be specified from time to time. Standard
labels shall contain all information necessary to conform to industry
requirements.
5. Products and Pricing. The pricing for the Product(s) is set forth
on Exhibit A and may be amended from time to time. Terms are payment
by credit card or electronic funds transfer at time of purchase.
Unless otherwise specified on Exhibit A, the lead time from receipt of
payment to delivery is 4-6 weeks.
6. Minimum Purchases for Vitamin, Mineral, and/or Nutritional
Supplements. The minimum purchase order quantity is 100 bottles per
formulation for standard Products. Customer Formulas, as defined
herein, shall have minimum purchase quantities of 5,000 units unless
and until such Customer Formula shall have been added to the standard
Products.
7. Web Site Maintenance; Fees. Licensee agrees that all sales of
Product to Customers will be accomplished through the Vita Web Site
(the Web Site). Licensee further agrees that Licensee shall pay to
Vita a maintenance fee of $500 yearly, beginning on the anniversary
date of this Agreement, for maintenance of the Web site.
8. Nature of Relationship. (a) This Agreement does not constitute
nor empower the Licensee as the agent or legal representative of the
Company for any purpose whatsoever. Licensee is and will continue to
be an independent contractor.
(b) The arrangement created by this Agreement is not, and
is not intended to be, a franchise or business opportunity under
the United States' Federal Trade Commission Rule: Disclosure
Requirements and Prohibitions Concerning Franchising and Business
Opportunity Ventures and is not a franchise, business opportunity
or seller assisted marketing plan or similar arrangement under
any other federal, state, local or foreign law, rule or
regulation.
(c) Licensee is not prohibited by this Agreement from
pursuing other business opportunities or other employment.
9. Rights in Formulas.
(a) Customer Formulas. Any formula provided exclusively by
Licensees Customer shall be owned by Customer ("Customer
Formula"), provided that such Customer Formula does not
substantially duplicate an existing Vita formula. Vita
agrees not to sell products to other customers using any
Customer Formula during the period in which Customer is
ordering products containing the formula and for so long as
Customer continues to purchase products containing the
Customer Formula.
(c) Joint Formulas. If Vita and Customer jointly create a
formula ("Joint Formula"), such Joint Formula will be
jointly owned by the parties. Vita agrees not to sell
products to other customers using the Joint Formula during
the period in which Customer is ordering products containing
the Joint Formula from Vita without written permission from
Customer. In the event that Customer fails to order a
specific Joint Formula Product for a period of 3 months,
Vita shall be free to sell products containing the Joint
Formula to other customers.
1. Term of Agreement; Breach of Agreement. This Agreement shall
continue for three (3) years, and shall be automatically renewed
unless one of the parties provides ninety (90) days written notice of
termination to the other party. In the event of a material breach of
this Agreement, the non-breaching party may provide written notice of
termination which shall be effective upon receipt. In the event of
termination by Licensee prior to delivery of Product for which a
purchase order has been submitted, Licensee shall reimburse Vita for
the cost of all Product and return of any boxes and labels. In no
event shall reimbursement of these amounts limit Vitas legal right to
seek compensation for the amount of its profit or any other damages
accrued under any canceled purchase order. In no event shall Vita be
required to accept or deliver product under any purchase order if Vita
has not received the outstanding balance due on any previous purchase
order in a timely manner. Failure to so perform shall not be deemed a
breach of this Agreement by Vita.
2. Override; Payment to Licensee. All purchases shall be made
through the Web Site, and payments shall be made by credit card or
other approved method of payment, such as be electronic funds transfer
or debit card. Licensee agrees that Vita shall retain a 10% override
on all sales made through the Web Site by Licensee(s). Vita agrees to
pay supplier for the Product purchased, retain Vitas override, and
remit the balance to Licensee. Vita further agrees to provide
Licensee with a Monthly Sales Report of all sales made by Licensee
through the Web Site. Vita will deliver the printed breakdown by the
tenth day of the month following such sales.
3. Trade Secrets. Vita and DRM and Licensee(s) are the owners of
certain products, technology, information, customer lists, services,
processes, financial information, pending or prospective
transactions/proposals, operating and marketing plans and procedures,
designs, product formulas, specifications, manufacturing methods,
ideas, prototypes, software, patent, trademark and copyright
applications or registrations and other similar data relating to each
party's business which data is not publicly known and derives economic
value from not being publicly known (collectively "Trade Secrets").
Each party agrees that it will not use or disclose to third parties
any Trade Secret it receives from the other, except as may be
contemplated by this Agreement. Each party agrees that it will take
all reasonable precautions to assure that no Trade Secret is conveyed
to any officer, employee, agent, manufacturer or other third party who
does not have a need to know such Trade Secret. The obligations
created by this Section 10 shall survive the termination of this
Agreement or any business relationship between the parties. Any Trade
Secret contained in any writing will be returned to the other party
promptly upon written request, together with any reproductions
thereof.
4. Governing Law; Dispute Resolution. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Texas. Any dispute arising under this Agreement shall be resolved
pursuant to the terms of the Dispute Resolution Agreement attached
hereto as Exhibit B.
5. Miscellaneous Provisions. This Agreement constitutes the entire
Agreement between the parties and supersedes any prior or
contemporaneous agreements, oral or written. This Agreement may only
be amended by a writing signed by both parties. This Agreement may not
be assigned without the written consent of the other party; provided
that this Agreement may be assigned without consent to an entity
acquiring all or substantially all of the assets of either party. Any
notice required or permitted to be given under this Agreement shall be
in writing and sent by telecopy, personal delivery or certified mail,
return receipt requested, as follows:
If to Vitamineralherb.Com, Inc.: J. P. Beehner
3030 FM 518 Apt 221
Pearland TX
77584-7817
If to David R. Mortenson & Associates: Mr. David R.
Mortenson
P.O. Box 5034
Alvin TX
77512-5034
Fax:(281)388-1047
If to Licensee: Xunantunich Inc.
21112 123rd Avenue
Maple Ridge, B.C. V2X 4B4
Canada
Fax: 604-467-7982
Notice shall be deemed effective upon receipt if made by
confirmed telecopy, personal delivery or 48 hours after deposit
in the United States mail with the required postage.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of
the date first above written.
XUNANTUNICH INC.
a Nevada corporation
By: /S/ Michael C. Cramer
Michael C. Cramer, President
DAVID R. MORTENSON & ASSOCIATES
a Texas General Partnership
By /S/ David R. Mortenson____________
David R. Mortenson, General Partner
EXHIBIT A
PRODUCT SPECIFICATIONS
In the event of any inconsistency between the terms of Customer's
purchase order and this Product Specification Sheet, this Sheet and
the terms of the Manufacturing Agreement shall control.
Short Product Name: _____________________________
Exact Product Ingredients and Percentages:
Other Product Specifications:
Color: ___________ Tablet Type: ____________
Consistency:______________
Weight: _______ Bottle Size/Color:____________ Bottle Count:
___________
Cotton Insert:____ Bottle Seal:____ Shrink Wrap Neck Band:___ Silicon
Pack:____
Micro-biological content: Customer to specify any requirements, if
none specified, product will be manufactured to industry standards.
Labels: Labels and/or boxes to be provided by Customer [identify any
size] _________
Labels/Boxes to be Received by [date] _____ to ensure timely delivery
Master Pack/Wrapping/Palleting Requirements (if
any):_________________________
Ship to Address: _________________________________________________
Order Quantity: (minimum 5,000 BOTTLES): ________
Price: _____________ FOB IFM's facility in San Diego, CA.
Delivery Dates(s): _______________________________________
Terms of Sale: 50% with submission of purchase order; 50% due upon
completion of manufacturing, unless otherwise specified
_________________________
Purchase Order Number: ________________
Date of Purchase Order: ________________
EXHIBIT B
DISPUTE RESOLUTION AGREEMENT THIS DISPUTE RESOLUTION AGREEMENT
("Dispute Resolution Agreement") is entered into and effective as of
January 3, 2000 by and between David R. Mortenson & Associates, a
Texas general partnership, and Xunantunich Inc., a Nevada corporation.
1. INTENT OF PARTIES. The parties desire to establish a quick, final
and binding out-of-court dispute resolution procedure to be followed
in the unlikely event any dispute arising out of or related to the
Manufacturing Agreement dated January 3, 2000 between the parties
("Agreement"). As used in this Dispute Resolution Agreement, the term
"dispute" is used in its broadest and most inclusive sense and shall
include, without limitation, any disagreement, controversy, claim, or
cause of action between the parties arising out of, related to, or
involving the Agreement or the transactions evidenced by the Agreement
(collectively "Dispute").
2. NEGOTIATION. It is the intent of the parties that any Dispute be
resolved informally and promptly through good faith negotiation
between the parties. Therefore, in the event of a Dispute between the
parties, the following will apply:
A. Correspondence. Either party may initiate negotiation
proceedings by writing a certified or registered letter,
return receipt requested, to the other party referencing
this Dispute Resolution Agreement, setting forth the
particulars of the Dispute, the term(s) of the Agreement
involved and a suggested resolution of the problem. The
recipient of the letter must respond within ten (10) days
after its receipt of the letter with an explanation and
response to the proposed solution.
B. Meeting. If correspondence does not resolve the
Dispute, then the authors of the letters or their
representatives shall meet on at least one occasion and
attempt to resolve the matter. Such meeting shall occur not
later than thirty (30) days from the parties' last
correspondence. If the parties are unable to agree on the
location of such a meeting, the meeting shall be held at
DRM's corporate offices. Should this meeting not produce a
resolution of the matter, then either party may request
mandatory mediation (as provided below) by written notice to
the other party.
3. MEDIATION. Subject to the availability of the mediator, the
mediation shall occur not more than thirty (30) days after the request
for mediation. The mediation shall be conducted by retired Judge
William Yale, former Presiding Judge of the San Diego Superior Court,
who now acts as a full-time, highly respected mediator. The mediation
shall be held in San Diego, California. The cost of mediation shall be
borne equally by the parties. The mediation process shall continue
until the Dispute (or any part thereof) is resolved or until such time
as the mediator makes a finding that there is no possibility of
resolution short of referring the parties to final and binding
arbitration.
4. FINAL AND BINDING ARBITRATION. Should any Dispute (or part
thereof) remain between the parties after completion of the
negotiation and mediation process set forth above, such Dispute shall
be submitted to final and binding arbitration in San Diego,
California. The arbitration shall be governed by the provisions of the
California Code of Civil Procedure ("CCP"), and the following
provisions, which shall supersede the CCP in the event of any
inconsistency:
A. Selection of Arbitrator(s). There shall be a single
arbitrator, except in the case where the amount in dispute
exceeds $100,000, in which case there shall be three
arbitrators. If the parties cannot agree upon acceptable
arbitrators(s) within ten (10) days of the termination of
the mediation, each party shall select one arbitrator from a
list of not less than five (5) arbitrators provided by the
other party. These two arbitrators shall select a third
arbitrator who shall serve as the sole arbitrator or the
third arbitrator, as the case may be. The determination of a
majority of the arbitrators or the sole arbitrator, as the
case may be, shall be conclusive upon the parties and shall
be non-appealable.
B. Discovery. No discovery shall be permitted, absent a
showing of good cause. Any discovery request should be
reviewed with the knowledge that this dispute resolution
process was mutually agreed upon and bargained for by the
parties with the intent to provide a cost-effective and
timely method of resolving disputes. Any discovery granted
by the arbitrator should be limited to that necessary to
protect the minimum due process rights of the parties.
C. Equitable Remedies. Any party shall have the right to
seek a temporary restraining order, preliminary or permanent
injunction or writ of attachment, without waiving the
negotiation, mediation and arbitration provision hereof. In
so doing, such party shall not be required to meet the
requirement of California Civil Code Section 1281.8. Any
other form of equitable or provisional relief and all
substantive matters relating to the Dispute shall be
determined solely by the arbitrator(s).
D. Attorney's Fees; Arbitration Costs. Each party may be
represented by an attorney or other representative selected
by the party. The costs of the arbitration shall be borne
equally by the parties. Each party shall bear its own
attorneys'/representatives' fees and costs; provided that if
the arbitrator(s) find either party has acted in bad faith,
the arbitrator(s) shall have discretion to award attorneys'
fees to the other party.
E. Scope of Arbitration; Limitation on Powers of
Arbitrator(s); Applicable Law. No party may raise new claims
against the other party in the arbitration not raised in the
mediation. The arbitrator shall have the power to resolve
all Disputes between the parties. The arbitrator(s) shall
not have the power to award treble, punitive or exemplary
damages and the parties hereby waive their right to receive
treble, punitive or exemplary damages, to the extent
permitted by law. The arbitrator(s) shall only interpret and
apply the terms and provision of the Agreement and shall not
change any such terms or provisions or deprive either party
of any right or remedy expressly or implied provided for in
the Agreement. The arbitrator(s) shall apply the law of the
State of California (excluding California's conflict of law
rules), or federal law, in those instances in which federal
law applies.
F. Designation of Witnesses/Exhibits; Duration of
Arbitration Process; Written Decision. At least thirty (30)
days before the arbitration is scheduled to commence, the
parties shall exchange lists of witnesses and copies of all
exhibits intended to be used in arbitration. The arbitration
shall be completed within 90 days o fthe selection of the
first arbitrator. The arbitrator(s) shall render a written
decision, which contains findings of fact and conclusions of
law, within 30 days of the conclusion of the arbitration and
shall specify a time within which the award shall be
performed. Judgment upon the award may be entered in any
court of competent jurisdiction.
5. MISCELLANEOUS
A. Enforcement of Negotiation/Mediation Provisions. If a party
demanding such compliance with this Agreement obtains a
court order directing the other party to comply with this
Dispute Resolution Agreement, the party demanding compliance
shall be entitled to all of its reasonable attorneys' fees
and costs in obtaining such order, regardless of which party
ultimately prevails in the matter.
B. Severability. Should any portion of this Dispute
Resolution Agreement be found to be invalid or unenforceable
such portion will be severed from this Dispute Resolution
Agreement, and the remaining portions shall continue to be
enforceable unless to do so would materially alter the
effectiveness of this Dispute Resolution Agreement in
achieving the stated intent of the parties.
C. Confidentiality. The parties agree that they will not
disclose to any third party that (1) they are engaged in the
dispute resolution process described herein, (2) the fact
of, nature or amount of any compromise resulting herefrom,
or (3) the fact of, nature or amount of any arbitration
award. This confidentiality obligation shall not extend to
the party's employees, spouses, accountant, bankers,
attorneys or insurers or in the event that disclosure is
otherwise required by law.
D. Time to Initiate Claims. An aggrieved party must mail
and the other party must receive the correspondence which
initiates negotiation proceedings in connection with a
Dispute as specified in Paragraph 2(A) (1) within one (1)
year of the date the aggrieved party first has, or with the
exercise of reasonable diligence should have had, knowledge
of the event(s) giving rise to the Dispute (the "One Year
Statute of Limitations"). No Dispute may be raised under
this Dispute Resolution Agreement after the expiration of
the One Year Statute of Limitations.
E. Entire Agreement. These dispute resolution provisions
express the entire agreement of the parties and there are no
other agreements, oral or written, concerning dispute
resolution, except as provided herein. Any ambiguity in the
provisions hereof shall not be construed against the
drafter. This Dispute Resolution Agreement may only be
modified in a writing signed by both parties.
F. Successors. This Dispute Resolution Agreement is
binding upon and inures to the benefit of the
parties, their agents, heirs, assigns, successors-
in-interest, and any person, firm or organization
acting for or through them.
G. Venue and Jurisdiction. Venue and exclusive
jurisdiction for any action arising out of or
related to this Dispute Resolution Agreement
(including, but not limited to, equitable actions
contemplated by Section 4 (C) and actions brought
to enforce or interpret this Dispute Resolution
Agreement) shall be in the state courts for the
County of San Diego, California or the federal
court for the Southern District of California.
H. Notice. Any notice or communication required to be
given hereunder shall be in writing and shall be
mailed via the United States Postal Service by
Certified Mail or Registered Mail, Return Receipt
Requested, or by Federal Express or other
overnight courier which can document delivery, to
the address of the party to be served as shown
below (or such other address as the party shall
from time to time notify). Such notice shall be
deemed to have been served at the time when the
same is received by the party being served.
David R. Mortenson & Assoc.: David R. Mortenson,
Gen. Partner
P. O. Box 5034
Alvin, Texas
77512-5034
Fax: 281-388-1047
Phone: 281-331-5580
Xunantunich Inc.: Michael C. Cramer
21112 123rd Avenue
Maple Ridge,
B.C. V2X4B4 Canada
Fax: 604-467-7982
Phone: 604-467-9116
I. Acknowledgment of Legal Effect of this Dispute
Resolution Agreement. By signing this Dispute
Resolution Agreement, the parties acknowledge that
they are giving up any rights they may possess to
have Disputes litigated in a court and are hereby
waiving the right to a trial by jury. The parties
further acknowledge that they are agreeing to a
one year statute of limitations regarding all
Disputes and that they are giving up their
judicial rights to discovery and to appeal, unless
such rights are specifically set forth above. The
parties acknowledge that if they refuse to submit
to the provisions of this Dispute Resolution
Agreement they may be compelled to do so under the
authority of the California Code of Civil
Procedure. The parties acknowledge that they have
had the opportunity to consult counsel regarding
the meaning and legal effect of this Dispute
Resolution Agreement and enter into it knowingly
and voluntarily.
IN WITNESS WHEREOF, the parties have entered into this
Dispute Resolution Agreement as of the date first above
written.
Xunantunich Inc. David R. Mortenson & Associates
a Nevada corporation a Texas General Partnership
By: /S/ Michael C. Cramer By: /S/ David R. Motenson
Michael C. Cramer, President David R. Mortenson, General
Partner
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
Janet Loss, C.P.A., P.C.
Certtfied Publcc Accountant
1777 S. Harrison Street
Suite 2100
Denver, CO 80210
The Board of Directors
XUNANTUNICH, INC.
21112 123rd Avenue
Maple Ridge, BC V2X 4B4
Canada
Dear Sirs:
This letter will authorize you to include the Audit of
your company dated December 31,1999 and the Audit
Report dated February 29, 2000 in the Registration
Statement currently under review with the Securities
and Exchange Commission.
Yours Truly,
S/S Janet Loss, C.P.A., P.C.
Janet Loss, C.P.A., P.C.
June 20, 2000