UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange
Act of 1934
28
CASINOBUILDERS.COM, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0343834
(State of organization) (I.R.S. Employer Identification No.)
2110 Vickers Drive, Suite 100, Colorado Springs, CO 80918
(Address of principal executive offices)
Registrant's telephone number, including area code (888) 288-7506
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share
ITEM 1. DESCRIPTION OF BUSINESS
Background
CasinoBuilders.com, Inc. (the "Company") is a Nevada corporation
formed on August 23, 1995 as Magic Lantern Group, Inc. On May 13,
1999, the Company changed its name to CasinoBuilders.com, Inc.
Its principal place of business is located at 2110 Vickers Drive,
Suite 100, Colorado Springs, CO 80918.
On October 20, 1995, the Company issued 20,000 shares of its
stock to each of its three initial officers and directors for a
total consideration of $1,500.00 cash. On July 3, 1996, the
Company once again sold 1,000 shares of its stock to its three
initial officers and directors for a total of $1,099.98 cash.
Between May 7, 1997 and May 15, 1997, the Company sold 100,000
shares pursuant to Rule 504.
On March 3, 1998, the Company underwent a forward stock split on
a 30:1 basis, increasing the number of issued and outstanding
shares to 4,890,000. The Company then cancelled 1,890,000 shares
of its common stock, resulting in 3,000,000 shares of common
stock issued and outstanding. On May 13, 1999, the Company's
stock underwent a forward stock split on a 2:1 basis, resulting
in 6,000,000 shares of its stock issued and outstanding.
On May 28, 1999, the Company issued a total of 7,000,000 shares
of stock for a total consideration of $100,000 to four companies
and the two officers of the Company. During the month of August
1999, the Company issued a total of 290,000 shares to two
individuals for services rendered or to be rendered to the
Company.
On September 28, 1999, the Company issued 125,000 shares to Team
Lost Boy BV, Amsterdam, The Netherlands, for the exclusive global
marketing rights to their Avatar gaming platform software. The
Company thenW commissioned the rights to produce and develop the
software to Lost Boys Interactive B.V., a private limited
liability company with its registered and business offices at
Herengracht 410 in (1017 BX) Amsterdam, the Netherlands.
On October 11, 1999, the Company issued a total of 984,000 to 8
individuals and two companies for various services or
acquisitions for the Company. On November 4, 1999, the Company
issued 350,000 shares to an individual under Rule 504.
On November 17, 1999, the Company issued a total of 2,310,723
shares to 3 individuals and two companies for various services or
acquisitions for the Company. Of these 125,000 shares were issued
to Team Lost Boys as additional consideration for the exclusive
global marketing rights of the gaming platform software. On
November 21, 1999, the Company issued a total of 200,000 shares
to two individuals. On November 29, 1999, the Company cancelled
700,476 shares of its stock and re-issued 453,431 shares to one
individual.
In July, 1999, the Company issued a 1% Series A Senior
Subordinated Convertible Redeemable Debenture in the amount of
$600,000 to ZZG Holdings. During August 1999 and November 1999,
the Company issued a total of 334,434 shares of its stock in
exchange for conversion of $150,000 worth of the debentures.
GENERAL BUSINESS PLAN
The Company was originally organized for the purpose of providing
consultants and managers to the Restaurant, Bar, Nightclub and
Gaming industries in southern Nevada. The Company intended to
recruit top managers from this industry, who in turn would use
their expertise in opening new restaurants, bars, taverns,
nightclubs and small casinos for individuals and corporations who
were new to the area. The Company was not able to raise
sufficient funding to pursue that objective, and therefore
abandoned its original business plan and focused its primary
activity in seeking a company or companies with whom it could
merge or acquire.
When the Company changed its name on May 13, 1999, it changed its
focus to providing comprehensive consulting and management
services to the Internet gaming industry. The Company will assist
clients acquire or build Internet casinos. Much of the Company's
plans are in the conceptual stage only, although it made the
first commercial sale of its software in September 1999.
The Company is an Internet marketing and operational services
company focused on the burgeoning Internet gaming industry. The
Company's revenues are derived from providing operational
services, software and support to existing and new operators of
Internet casinos.
The Company will derive revenue from a number of sources,
including web site development, entertainment content delivered
by means of software licensing, marketing, advertising placement
and operational services. The Company presently has a Letter of
Intent from an international company to provide these services to
a group of operating Internet casinos whose revenue is in excess
of $40 million. A number of other Letters of Intent are pending.
The Company is presently completing Internet gaming and
entertainment software sales to international companies under
various agreements including its agreement with Lost Boys
Interactive of the Netherlands. Under the terms of that
agreement, the Company will market various 3-D multimedia
entertainment applications of the Lost Boys gaming Platform to
the Internet portal communities, Internet gaming operators and
advertising industries. Through its planned "gamblersportal.com"
web site, CasinoBuilders.com will present a high-impact, dynamic,
interactive Internet information portal serving the online
community in the global gaming and entertainment market.
Amsterdam-based Lost Boys Interactive B.V. will provide the
technological research and development as well as "leading edge"
on-line gaming and entertainment technology in customized
applications for the global market. Founded in 1993, Lost Boys
has produced more than 200 multimedia titles, winning numerous
international prizes. The first joint `flagship' project
commissioned by the Company is an Avatar (a 3-D manifestation in
cyberspace) based entertainment technology with innovative
application to online gaming casinos. Advanced Avatar technology,
such as that produced by Lost Boys Interactive B.V., enables both
new content and advertising delivery channels as well as client
retention through interactive chat and realistic "personalized"
participation.
The Company designed and opened its first web site to promote
Internet gaming in Panama on July 16, 1999. The Company will
derive revenues under a management contract for a combination of
operational and marketing services provided from its Panama site.
Under a similar agreement the Company expects to promote an
Israeli Internet casino site shortly.
Business of Issuer
The Company provides innovative services designed to provide
client segmented or turnkey solutions to the Internet
entertainment industry. These include e-commerce, licensing,
hosting, marketing, and operational support services in an "off-
shore" environment. Leveraging both our infrastructure and our
exclusive technologies, the Company plans to introduce new,
innovative and entertaining e-commerce systems to the world.
The Company chooses to sequence its markets to build and grow a
significant and profitable ".com" company within three years.
Entering the Internet entertainment industry through the
underserved, and high growth segment of "E-Casinos", the Company
will aggressively expand through three additional "E" sectors:
E-Casinos - The Company is one of the first to market
comprehensive turnkey marketing and support services for
Internet casino entrepreneurs. Offering exclusive and
innovative technological and marketing solutions, the
Company's goal is to establish itself as the premier and
most comprehensive services company in the industry.
Management expects the current fragmented, entrepreneurial
industry to begin consolidating within twelve months. The
Company has positioned itself to lead this consolidation.
E-Gaming - Our strategic technological alliances, and
Internet communications and infrastructure, facilitate easy
entry into non-gambling Global Gaming Malls. Beyond today's
one-dimensional website based, cyber-malls will offer Avatar-
based chat and worldwide play, with local, national and
international competitions. These malls will provide
excellent global advertising opportunities to targeted
market segments.
E-Marketing - The Company will offer small businesses and
corporations the opportunity to enhance their Internet
presence and attract consumers through a clever variation of
the proven E-Gaming technology. Introducing mass
customization of their message through chat rooms,
presentations, research information, and e-commerce,
businesses electing to reach consumers directly will offer
the web's first truly entertaining and "sticky" shopping
experience. The Company will offer multi-lingual,
inexpensive but effective marketing solutions to the Global
Internet business community.
E-Commerce - Combining the above three "E-Sectors" into a
community of commerce in an "off-shore" environment is
Management's destination strategy. Management envisions a "3-
D street" that a user could visit and walk through as an
electronic Avatar "character". After selecting a character
of choice, and providing basic e-commerce information you
join other global Avatars in an interactive city of
entertainment and shopping. You can meet friends from
anywhere in the world in the parks, or you may wish to enter
any of the stores to shop or purchase goods. Entertainment
for all ages is available throughout the "city" including
casinos, gaming, movies and music. This new e-commerce
experience will operate in both cyberspace and a land-based
"off-shore" commerce environment.
Internet Growth
The number of Internet users around the world is constantly
growing. The Computer Industry Almanac reported that by the year
2000, 327 million people around the world are expected to have
Internet access. The top 15 countries will account for nearly 82%
of these worldwide Internet users (including business, education,
and home Internet users). By the year 2000 there will be 25
countries where over 10% of the population will be Internet users
(as of April 12, 1999).
In January 1999, Nua reported that there are 151 million users
accessing the Internet in The World (Source - International
Communications-Headcount.com).
Management believes the Internet is big and growing. According to
Hard Copy, the number of people on the Internet doubles every 60
days. Management also believes that gambling is a perpetual
market, one that has been with us for centuries. The Company will
globally serve the transition of the gaming industry to the
convenient and rapidly expanding Internet e-commerce forum. It is
the confluence of these two giant market forces that provides
dramatic market potential.
E-Commerce Growth
"The results of a new study reveal that revenue generated by
Internet businesses is larger than all previous estimates:
Internet businesses contributed a staggering $300 billion in U.S.
revenue and 1.2 million jobs in 1998. Internet e-commerce is
mushrooming at a rate much faster than previously expected the
report said, finding that in 1998 total e-commerce exceeded $102
billion for U.S. based-companies." - 6/10/99 E-Commerce Guide
A May, 1999, report by the British market research firm Fletcher
Research has found that European e-commerce will come into its
own in the next century. Fletcher estimates the UK market will be
worth 3 billion by 2003.
Online commerce with consumers is something new to Europeans.
Frost & Sullivan research said that 92 percent of the e-commerce
transactions in Europe in 1997 were of the business-to-business
variety. The same report by Frost & Sullivan also predicted e-
commerce revenue in Europe to reach $8 billion by 2004.
E-commerce in Latin America will generate $8 billion in 2003, up
from $170 million in 1998, according to IDC, and the majority of
the sales will come from business-to-business transaction.
Business-to-business sales will represent $6.1 billion of the
total revenue, while consumer sales will account for $1.9
billion.
Internet Gaming Growth
According to Datamonitor, online gambling turnovers have the
potential to dwarf those of other interactive services. These
turnovers tap into an existing traditional gambling market
(handle) valued at over $700 billion in Europe and the US alone.
Casinos, lotteries and sports books dominate the new market.
Customers with an Internet connection and a credit card can
gamble from literally anywhere in the world. With the most
successful gaming services turning over bets of more than $1
million per week, the current market value of Internet gaming
stocks of $600 million is just the tip of the iceberg. Date:
February 8, 1999
The 1998 Casino & Gaming Business Market Research Handbook
predicts that the Internet gaming market could reach from $100
billion to $200 billion in annual revenues by 2005. Date:
November 1998. The Company is well positioned to participate in
this historic growth, taking the position of market leader, and
creating a truly exceptional opportunity for return to its
investors.
The Company announced that it would introduce gamblersportal.com,
an information-centric portal and Internet community, to produce
a vertical destination where customers have access to information
they require in the burgeoning Internet gaming marketplace. The
gamblersportal.com project will be a "market sensitive" Internet
showcase for exciting new interactive technology, including
Avatar-based interactive technology.
Value-added products to attract and retain players at Internet
casinos will be provided during the 3rd quarter of 1999. The
Company has designed a player "loyalty awards" program for the
Internet gaming industry, featuring major sports event awards, as
well as traditional travel and vacation awards. The Program will
attract and retain players to the Internet casinos enrolled in
the program.
Competition
There are currently several competitors for the licensing of
Internet gaming software: including MicroGaming, Atlantic
International Entertainment, Ltd., Chartwell Technology, Inc.,
Cryptologic, Inc., and Boss Media AB. In Management's opinion,
none of these competitors currently offer the possibility of a
business to business solution that includes casino licensing,
software, e-commerce and Internet hosting from a single source.
The online and interactive wagering and e-commerce market is new
and rapidly changing. The Company anticipates that competition
will become more intense and that new companies will enter the
market. Worldwide, several Internet and interactive ventures of
various kinds have been announced. The Company expects to compete
with these entities, as well as with other established gaming and
e-commerce companies, which may enter the interactive gaming
entertainment and e-commerce market. To remain competitive, the
Company may have to reduce the cost of its products and services,
which may negatively affect profitability.
The Company believes that potential new competitors, include
large interactive and online software companies, media companies,
and gaming companies, , may increase their focus on the
interactive wagering market. Competition is influenced by the
timing of competitive product and services releases and the
similarity of such products or services to those of the Company,
which may result in significant price competition or reduced
profit margins.
The Company also anticipates that significant overseas
competition will emerge. This may eventually result in additional
competition as these overseas competitors expand into the United
States or as the Company expands internationally. Specifically,
several well-capitalized Australian media and gaming companies
are already developing systems and services similar to the
Company.
Indirect competition may, in time, come from the "Land Based"
casino industry, although at this time, this portion of the
industry is restrained from direct Internet participation because
they fear jeopardizing their existing regulated legal status with
participation in a currently unregulated industry. When
regulations, which the Company supports, are enacted, the Company
will be in a targeted position for acquisition, which will be an
attractive benefit to our stockholders.
The Company will generally compete for customers with Internet
portal companies (Yahoo, Alta Vista, etc.) and company specific e-
commerce sites, but believes its offerings to be complementary.
The Company's entertaining e-commerce solutions will offer
existing companies the ability to extend and expand their
existing e-commerce investments into additional markets as well
as enable their ability to operate in an offshore environment if
they so choose.
Strategic Acquisitions and Alliances
Since the Company's change in business plan in May 1999,
Management has focused on building the Company's operating
infrastructure and establishing key strategic alliances in
preparation for a fourth quarter market launch. Key actions are:
Avatar Gaming Software - A strategic alliance exists with Lost
Boys Interactive, an Amsterdam based software developer which
provides both an established "world-class" gaming platform and
Avatar technology for extension throughout the Company's
growth sectors. The Company has exclusive global marketing
rights for their Avatar based casino gaming platform.
The terms of the alliance has been described above. (see
"Business Background")
Penny Bingo Software - The Company has obtained the exclusive
global marketing rights for the Internet gaming industry from
The HomeBingo Network, Inc. (THBN), a Pittsburgh, PA based
software developer. This "bingo-like" game, designed for
speedy Internet play, is available in both a free play and
International wagering version.
Under the terms of the agreement, THBN will transfer its
registered Domain "Pennybingo.com" to the Company for the
payment of 10,000 shares of common stock. THBN will also
provide the requirements of a fully configured Internet server
to the Company who will arrange for this server to be
purchased and installed in Curacao at its own cost. The server
will contain a "free play" version and "cash play" version of
"Penny Bingo".
The Company will have exclusive rights as long as the Company
pays the sum of $5,000 to THBN for the initial software sub-
license and collects a monthly software license fee of $10,000
for each sub-license of the product, of which the Company must
remit $5,000 per month to THBN. If the operators' net win
exceeds $40,000 for three consecutive months, the Company will
charge the operator $15,000 per month and remit $7,500 to
THBN. If the operator's net win exceed $80,000 per month for
three consecutive months, the company will charge the operator
$20,000 per month and remit $10,000 to THBN.
Internet Gaming Licenses - An agreement has been signed with
Futurenet Holdings Ltd., which owns all the outstanding shares
of Cyberluck, Curacao N.V. and has the authority to deliver
all of the outstanding shares of Conet N.V. and Global Cash
N.V. This agreement allows the Company to acquire Cyberluck, a
Netherlands Antilles company who is the holder of a Master
License for Internet Gaming in the Netherlands Antilles. As
many local Caribbean "licensing" operations come under
scrutiny and political pressures, the unique master license
the Company administers in Curacao provides legitimate,
responsible licensing protection, supervision, and security to
all contracted casino operators. This master license enables
the Company to issue unlimited licenses to future casino
owners who pass the Company's rigid investigatory process.
Internet Hosting and Communications - An agreement has been
signed to acquire CONET, Inc. a Curacao Netherlands Antilles
based Internet Service Provider (ISP) providing Internet
connectivity directly at the Curacao government's
communication complex located at the foot of their Earth
station. This unique, exclusive arrangement will be enhanced
as the government updates their communications to fiber in the
third quarter in 1999, allowing the Company to have the best
and fastest Internet communications in the industry. Current
Conet bandwidth utilization is only 5% of its current
capability. This gives the Company the capacity necessary to
support our future strategic growth while offering the fastest
failure-free communications in the Caribbean.
Internet Merchant Account Processing - An agreement has been
signed to acquire Global Cash, Inc. a Curacao Netherlands
Antilles based Internet merchant gateway for e-commerce
transactions. Its primary focus has been high volume Internet
gaming casinos, however its strategic plans and offshore
banking relationships complement the Company's expansion into
Internet based, offshore e-commerce business.
Under the terms of the agreement, the shares of Cyberluck
Conet and Global Cash will be transferred upon receipt of
$900,000. $650,000 has been paid to date.
Internet "Incentive Awards" Program - The Company has obtained
from Fennell Promotions, Atlanta, GA., the exclusive global
marketing rights to the "E-Players Club" program for the
Internet gaming industry Similar to frequent traveler awards,
this program builds clients and loyalty for Internet casino
owners by awarding a "point" for every dollar wagered. The
Company may also extend this program into all future Internet
e-commerce ventures.
Under the terms of the agreement, Fennell and the Company will
partner to market the "Supreme Privileges Awards Program" to
the Internet Gaming industry under the brand "E-Players Club".
Fennell will provide the Company with unique web access to
"Supreme Privileges", program training materials, exclusive
marketing rights to the Internet Gaming industry, an
operational point of contact for the Company, and a unique
privately branded web page for each program activated. The
Company will incur and accept all internal marketing and sales
costs, contract directly with its clients, collect all monies
and point information and forward the information to Fennell,
provide market requirements information to Fennell, conduct
business in a highly professional manner, and appoint a
dedicated sales resource to aggressively exploit this market
opportunity.
GOVERNMENTAL REGULATION
The Company is presently in discussions with representatives of
two casino-licensing authorities to provide marketing services
and to develop a regulatory infrastructure in compliance with the
Gaming Laws of these two jurisdictions. Revenue will be derived
from providing a turnkey fully licensed Internet casino to
potential operators willing to abide by the laws of these
jurisdictions.
The legality of gaming on the Internet is uncertain at this time.
The Company does not operate Internet casinos or Internet sports
books. However, sales of our products and services depend on the
continued international growth of Internet casinos. A number of
U.S. federal and state statutes could be construed to prohibit
gaming through use of the Internet. While we focus sales and
marketing efforts in places that allow private network and
interactive gaming, such as the Australian, Caribbean, African
and American gaming markets, we are not sure that international,
federal, state or local laws or regulatory procedures, including
those which relate to the issue of jurisdiction over gaming on
the Internet will not be expanded or imposed.
On November 19, 1999, the United States Senate passed S. 692
sponsored by Republican Jon Kyl of Arizona, called the Internet
Gambling Prohibition Act. It would prohibit all Internet gambling
sites from soliciting and collecting wagers from bettors in the
United States. The companion bill in the House of Representatives
(sponsored by Representative Bob Goodlatte (R-VA)) would ban some
types of gaming on the Internet. The legislation, however, is
still pending in the House of Representatives, and must face
another vote in the Senate before it can become law.
If legislation prohibiting gaming on the Internet is enacted into
law, that legislation could have a significant effect on the
Company's operations. In such a case, Conet, Cyberluck and Global
Cash, operating as wholly owned subsidiaries of the Company,
might be forced to cease all marketing and promotional activities
in the United States to ensure that no solicitation of United
States citizens occurs. If such legislation prohibits United
States citizens from gaming on the Internet, the Company may be
expected to lose a significant portion of its online gaming
customers.
In December 1999, the Company plans to establish sufficient
operating liquidity form three outside sources:
A committed investment of approximately $175,000, from ZZG
Holdings,
A contracted liquidity management program with SBX Inc.,
The equity market
In 2000, Management does not foresee the need for additional
external liquidity programs other than the equity market. The
Company plans to sustain liquidity through operations. As a
services company, the Company will benefit from annuity revenues
that will cover operational expenses, and current sales revenues
that will fuel growth.
Year 2000 Compliance
The year 2000 risk is the result of computer programs being
written using two digits rather than four digits to define the
applicable year. Computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather
than the year 2000. As a result, computer systems and/or software
used by many companies and governmental agencies may need to be
upgraded to comply with year 2000 requirements or risk system
failure or miscalculations causing disruptions of normal business
activities.
The Company has appointed a Year 2000 Committee who has performed
an audit to assess the scope of the Company's risks and bring its
applications into compliance. The Committee has completed its
identification of applications that are not Year 2000 compliant,
if any. In addition, the Company has asked its vendors about
their progress in identifying and addressing problems that their
computer systems may face in correctly processing date
information related to the Year 2000. To date, the Company's
assessment has determined that its key vendors are year 2000
compliant. The Company has minimal in-house Internet software and
in almost all such cases such software was developed using
commercial Internet software operating platforms of Microsoft
which the Company believes are year 2K compliant. Notwithstanding
the Company's Year 2000 compliance efforts, the failure of a
material system or vendor, or the Internet generally, to be Year
2000 compliant could harm the operation of the Company's systems
or have other unforeseen, material adverse consequences. The
Company does not separately track the internal costs incurred for
the Year2000 project, such costs are principally the related
payroll costs for its information systems group. The Company's
external expenditure to date in complying with the Year 2000
audit has been less than $1,000 and Management believes $3,000
will be needed to complete the Year 2000 compliance. However, no
assurance can be given that all of the Company's third party
systems are or will be Year 2000 compliant or that the costs
required to address the Year 2000 issue or that the impact of the
Company's failure to achieve substantial Year 2000 compliance
will not have a material adverse effect on the Company's
business, financial condition or results of operations.
The Company is not currently aware of any significant year 2000
compliance problems relating to its software systems or those of
Conet N.V., Global Cash N.V. or Cyberluck Curacao N.V. that would
have a material and adverse effect on business, results of
operations and financial condition. However, there can be no
assurance that the Company will not discover year 2000 compliance
problems in its proprietary software or other third party
software that will require a substantial investment to correct.
The Company's ability to fix such hardware or software on a
timely basis could result in lost revenues, increased operating
costs and other business interruptions, any of which could have a
material and adverse on the Company's business, results of
operations and financial condition.
Although the Company continues to evaluate its software for
possible year 2000 compliance issues, the Company believes that
its software programs, both those developed internally and
purchased from material outside vendors are already year 2000
compliant or will be by December 31, 1999. Therefore, the Company
does not have a formal contingency plan for a major year 2000
problem. The Company's inability to locate or correct a
significant year 2000 problem, if one exists, could result in an
interruption in, or a failure of, certain normal business
activities or operations. In addition, year 2000 problems may
affect sub-systems of Conet N.V., Global Cash N.V. and Cyberluck
Curacao N.V. such as the ability to provide hosting of casino
gaming servers or processing of electronic commerce transactions.
Any such failure could cause the Company's customers to seek
alternate providers for online wagering. This could require the
Company to incur significant unanticipated expenses to remedy and
could divert the Company's management's time and attention,
either of which could have a material and adverse effect on
business, results of operation and financial condition.
Employees
The Company plans to continue its policy of outsourcing to
independent contractors, whenever possible. Including employees
acquired in the acquisitions, the Company will end the year at
approximately six employees, with plans to grow (as revenue grow)
in the year 2000, to approximately 20.
The Company currently has entered into a consulting agreement
(the "Agreement") to retain Lugion Associates, Ltd. as an
independent consultant to the Company. Lugion carries no
professional licenses and will make itself available to consult
with the board of directors, officers, employees, representatives
and agents of the Company at reasonable times, concur on matters
pertaining to the overall business and financial operations of
the Company as well as the organization of the administrative
staff of the Company, the fiscal policy of the Company, and in
general, concerning any problem of importance concerning the
business affairs of the Company. During the term of the
Agreement, Lugion will not disclose, without the prior written
consent or authorization of the Company, any of such information
to any person for any reason or purpose whatsoever. The Company
will provide 250,000 shares of the Company's common stock, 50,000
shares upon acceptance of the Agreement and 50,000 shares at the
end of each quarter of the one year contract term.
The Company has also entered into a verbal consulting agreement
with Cactus Consultants International, Inc. Under the terms of
the agreement, which Management expects to complete in written
form in the near future, Cactus Consultants will assist in
financial management of the Company, act as a financial advisor
for development of funding sources and alternatives for
acquisitions (Cyberluck, Conet, Global Cash) and operations,
manage the investor relations functions for the Company, develop
and implement a coherent Corporate Investor Relations program and
Corporate communications strategy, act as a strategic Executive
Consultant to the CEO, conduct all business related to the
Company. The Company will pay Cactus Consultants a monthly fee of
$13,666. Due to the start-up nature of the Company, 549,000
shares were issued to Cactus Consultants in lieu of any cash
compensation for 1999.
The Company entered into a one-year renewable (cancelable upon
sixty-day notice) Independent Contractor Agreement with HopeCo
Marketing to market the Company's E-Playersclub loyalty system.
This contract is non-exclusive and provides payment to HopeCo for
actual sales contracted for by the Company to which HopeCo is
responsible for. HopeCo will receive a percentage of the set-up
fees established by the Company for the E-Playersclub plus twenty-
five percent of the fees earned by the Company for any active
client brought to the Company by HopeCo. The Company is not
responsible for the payment of any operating or marketing
expenses incurred by HopeCo.
STOCK OPTIONS
The Company has instituted a stock option and restricted stock
plan, which is available to selected directors, officers,
Employees and Consultants of the Company (Participants). The term
of each Option will be ten years from the date of grant or a
shorter term as determined by the Stock Option Committee (the
"Committee") except for an ISO granted to 10% shareholders, in
which the term of the option will be five years. The exercise
price will be determined by the Committee and will not to be less
than 100% of the Fair Market Value of the Shares subject to the
option on the date of grant.
The Restricted Stock would be granted to Participants for
services rendered, at no additional cost to the Participants. The
value of the services performed must, in the opinion of the
Committee, equal or exceed the par value of the Restricted Stock
to be granted. The terms, conditions and restrictions of the
Restricted Stock will be determined by the Committee on the Date
of Grant. On the date the Restriction Period terminates,
ownership of the Restricted Stock will vest in the Participant.
Trends, Events and Uncertainties
Although all planned Internet market opportunities continue to
reflect dramatic growth potential, there are two major
trends/events that provide potential uncertainty to the company.
Rapid Technology Change - The speed and power of business on the
Internet is driven by ever changing technological advances.
Small, undercapitalized companies cannot compete effectively over
the strategic timeframe without an aggressive technology
investment. To mitigate this situation, the Company has not and
will not build an "in-house" technology staff, instead opting for
strategic agreements with technology partners.
Internet Gaming Legal Issues - On November 19, 1999, the United
States Senate passed S. 692 sponsored by Republican Jon Kyl of
Arizona, called the Internet Gambling Prohibition Act. It would
prohibit all Internet gambling sites from soliciting and
collecting wagers from bettors in the United States. The
companion bill in the House of Representatives (sponsored by
Representative Bob Goodlatte (R-VA) would ban some types of
gaming on the Internet.
The legislation, however, is still pending in the House of
Representatives, and must face another vote in the Senate before
it can become law. Neither proposal recognizes that such a ban
would likely be impossible to enforce. Both bills demand that
federal authorities identify the illegal sites and tell service
providers such as America Online to block access. But operators
of these sites could quickly change their addresses to remain
accessible to U.S. gamblers, engaging law enforcement in a
continuous game of cat and mouse. Compounding this problem,
Internet users could never be prevented from accessing off-limit
sites. Because the act does not criminalize betting, Internet
users could still gamble legally. If their favorite sites were
blocked by AOL, for example, they could simply route their
browser's request through a foreign Internet server to reach
them.
The Company supports regulation of the Internet gaming industry,
but does not believe prohibition is enforceable. The company
addresses this general concern in a number of ways:
a. The Company does not own Internet gaming operations.
b. The Company serves the global (not USA) Internet gaming
market, and any of its planned subsidiaries will only operate in
fully regulated jurisdictions.
c. The Company is diversified, providing marketing and
operational services to land, sea and Internet gaming
environments.
d. The Company provides non-gaming Internet services
e. In 2000, the Company will offer business to consumer
"entertaining" e-commerce technology and services.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management
believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, in conjunction with those forward-looking statements
contained in this Statement.
Plan of Operation for the Next 12 Months
In 2000 and beyond, Management does not foresee the need for
additional external liquidity programs other than the equity
market. The Company plans to sustain liquidity through
operations. As a services company, the Company will benefit from
annuity revenues that will cover operational expenses, and
current sales revenues that will fuel growth.
The Company does plan several major phased marketing programs
with required funds coming from operating funds.
After the close of the current acquisitions on December 15, 1999,
no additional major purchases or sales are foreseen.
Key Success Elements:
1. Company Strategy - Staying on message with our strategy, to
ensure the Company captures "first-to-market" position, is
critical to our strategic success. The Company is committed to
interfacing to its market with operational excellence, high
standards of professional ethics, and personal and organizational
integrity in every business transaction.
2. Focused Execution - Generating revenues and profits quickly
to build value for our stockholders is the Company's primary
operating goal. From September 14 through September 16, 1999, the
Company attended the World Gaming Congress and Expo in Las Vegas,
the world's largest gambling exhibition, where it presented the
newly developed Avatar multi-player online gaming Software.
Contacts made by CasinoBuilders.com during the congress in Las
Vegas led to discussions and negotiations with potential new
customers. CasinoBuilders.com entered into an agreement as a
result of such discussions and negotiated to license its first
Avatar multi-player gaming software to Asian Star Enterprises,
Ltd. of Hong Kong for two-hundred sixty-five thousand seven-
hundred dollars ($265,700). The Company has received an advance
payment of sixty-five thousand seven hundred dollars ($65,700),
and expects to deliver the completed software in December 1999.
The balance of the payment due has been deferred until January
15, 2000.
3. Leveraging Competitive Advantages - Taking advantage of the
wealth of opportunities in the marketplace with the Company's
innovative and exclusive capabilities as well as exclusive
alliances will establish industry leadership and, most
importantly, a sustainable strategic advantage in marketplace.
ITEM 3. DESCRIPTION OF PROPERTY.
Prior to the name change on May 13, 1999, the Company neither
owned nor leased any real property. The Company did have the use
of a limited amount of office space from its Resident Agent,
Incorp Services, Inc., at no cost to the Company. The Company
paid its own charges for long distance telephone calls and other
miscellaneous secretarial, photocopying, and similar expenses.
This was a verbal agreement between the Resident Agent and the
Board of Directors. Neither Incorp Services, Inc. nor any of its
officers or directors served as officers or directors of the
Company, or were holders of 5% or more of the Company's common
stock.
The corporate office is located at 2110 Vickers Drive, Suite 100,
Colorado Springs, CO 80918. The Company utilizes an executive
suite, which provides mailing and secretarial services to the
Company on a month-to-month basis at $50.00 per month. The suite
and services are also leased to other companies on the same
basis.
The Company's client support offices located at 8756 - 122nd
Avenue NE, Kirkland, WA 98033. The Company leases this space on a
month-to-month basis at $500.00 per month.
There are no contracts or lease agreements, except for monthly
invoices for the offices or services rendered.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known to the Company,
as of November 29, 1999, to be a beneficial owner of five percent
(5%) or more of the Company's common stock, by the Company's
directors individually, and by all of the Company's directors and
executive officers as a group. Except as noted, each person has
sole voting and investment power with respect to the shares
shown.
a) Security Ownership of Certain Beneficial Owners
<TABLE>
<S> <C> <C> <C>
Title of Name/Address Shares Percentage
Class of Owner Beneficially Ownership
Owned
Common Aristocrat Group A V V 2,416,667 13.93%
Dominicanessenstraat
22 PO Box 1256
Oranjestad, Aruba
Common Braderlux ARL 2,166,666 12.49%
2nd Floor - Broadcasting
House Rouge Bouillion
St. Helier, Jersey JE43ZA
Common Burgundy Holdings Ltd. 1,666,667 9.61%
PO Box 8920
Nassau, Bahamas
Common Paul Andrew Ruppanner 1,336,247 7.70%
(See Note 2110 Vickers Drive, Suite
1) 100
Colorado Spring, CO 80918
Common Steven B. Randall 953,431 5.50%
(See Note 2110 Vickers Drive, Suite
1) 100
Colorado Spring, CO 80918
Common Dr. Claus Wagner-Bartak 100,000 0.58%
4092 Lee Highway
Arlington, VA 22207
Common Cactus Consultants 549,000 3.16%
(See Note International, Inc.
1) 6400 E. Jackrabbit Rd.
Paradise Valley, AZ 85253
Common ZZG Holdings, LLC 334,434 1.93%
(See Note
2)
Common Total Ownership over 5% 9,523,112 54.90%
and Directors and
Officers as a group (3
individuals)
</TABLE>
Note 1: There is currently a Stock Option Agreement with the two
officers of the Company, Paul Andrew Ruppanner and Steven B.
Randall, and with Cactus Consulting. Each is granted the right
and option to purchase any or all of an aggregate of 2,000,000
shares of Class A Common Stock, vesting over a three year period
from the date of hire, at the purchase price of $.35 (thirty-five
cents) per share. These options are effective as of September 15,
1999 and expire December 31, 2009. To date, none of these options
have been purchased, so the number of shares involved have not
been reflected in the totals.
Note 2: Additionally, ZZG Holdings is the holder of the Company's
convertible debentures. These are convertible into common stock
upon the holder's demand. As of September 30, 1999, the Company
had issued 334,434 shares for conversion of $150,000 of the
debenture. If the remaining debenture was converted at a similar
rate, ZZG Holdings would control a total of 1,337,736 shares or
7.00% of the then-outstanding shares.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
The members of the Board of Directors of the Company serve until
the next annual meeting of the stockholders, or until their
successors have been elected. The officers serve at the pleasure
of the Board of Directors.
There are no agreements for any officer or director to resign at
the request of any other person, and none of the officers or
directors named below are acting on behalf of, or at the
direction of, any other person.
Information as to the directors and executive officers of the
Company is as follows:
<TABLE>
<S> <C> <C>
Name/Address Age Position
Paul Andy Ruppanner 59 President/Direc
2110 Vickers Drive, tor
Suite 100
Colorado Spring, CO
80918
Steven B. Randall 55 Secretary/Treasurer/Director
2110 Vickers Drive,
Suite 100
Colorado Spring, CO
80918
Dr. Claus Wagner-Bartak 62 Director
4092 Lee Highway
Arlington, VA 22207
</TABLE>
Paul Andy Ruppanner; President
Paul Andy Ruppanner is the President and CEO. He has led
organizations through critical startup, restructuring and product
rollout. He has recruited high-performance focused and matrix
teams. Mr. Ruppanner is also skilled in business process
reengineering, competitive/risk analysis, financial planning,
distribution channeling and budget administration.
EMPLOYMENT HISTORY
May 1998 to May 1999 -Mr. Andy Ruppanner has served as VP of
Marketing & Sales at Command Software, Jupiter, FL, an Anti-
Virus software developer
May 1997 to May 1998 - Mr. Ruppanner served as President/CEO of
SoftLock Services, Rochester, NY, a software solution
company focused on content security on the Internet.
1996 to May 1997 - Mr. Ruppanner was President/COO of HotOffice
Technologies, Boca Raton, FL, the first Internet VPN.
1994 to 1996 - As Vice President/General Manager at Office Depot,
Delray Beach, FL, Mr. Ruppanner founded the Uptime Services
Division
1992 to 1994 - Mr. Ruppanner served as Vice President of
Marketing at Technology Service Solutions (TSS), Valley
Forge, PA, a $1.3 billion technology service and support
company. As the co-founder of the company, he was selected
to lead the development of a joint venture between KODAK and
IBM.
1966 to 1992 - IBM Corporation, Armonk, NY,
(1990 to 1992) - General Manager, IBM Consulting, Florida
(1988 to 1990) - Area General Manager, Marketing/Service,
Tampa, Florida
(1985 to 1988) - Vice President of Business Development
GBGI, New York
(1983 to 1985) - Director of Operations, Atlanta
(1966 to 1983) - Promoted from a number of management
positions
EDUCATION
Emory University, Atlanta, GA
Master of Business Administration
Bowling Green State University, Bowling Green, OH
Bachelor of Arts degree in Business
Steven B. Randall; Secretary/Treasurer
Steven B. Randall is the Secretary/Treasurer. Mr. Randall has
over 30 years of investment banking, e-commerce, marketing and
regulatory experience encompassing traditional Internet casinos.
He is experienced in direct marketing, direct mail advertising,
database marketing, customer segmentation and targeted marketing
programs. He has a strong business background in both public and
private sectors, mergers and acquisitions, and leveraged buy-
outs.
EMPLOYMENT HISTORY
As principal of his own marketing company, which was issued a
Casino Service Industry License, Mr. Randall provided marketing
services to major casinos in Atlantic City, NJ in July 1991.
1992 to 1999 - President, Direct Marketing Concepts, Inc. Great
Neck, NY
1989 to 1992 -Executive Vice President, Direct Communications
Group, Inc. Purchase, NY
1985 to 1989 - Mr. Randall served as Co-Chairman at Advanced
Information Marketing, Inc. (AIM), Purchase, NY, a pioneer
database company.
1972 to 1989 - LaSalle Industries, Inc., Bronx, NY (Computer
personalized direct mail marketing)
Vice President of Sales
Vice President of Finance
President
1984 to 1990 - Elected Mayor for three consecutive terms,
Kensington, NY
1986 to 1990 - Appointed Police Commissioner for Police
Department, Kensington, NY
1986 to 1990 - Appointed Director for New York State North Shore
Cable Television Commission
1985 to 1988 - Appointed to Bronx County, NY Overall Economic
Development Commission by Bronx Borough President.
1987- 1992 Director, New York State Water Authority of Great Neck
North
1992 to 1992 - Treasurer, New York State Water Authority of Great
Neck North
EDUCATION
American University, Washington, D.C.
Bachelor of Arts in Public Relations, 1966
Stetson State College of Law, St. Petersburg, FL, 1966 - 1967
New York Institute of Finance (completed certification for New
York Stock Exchange), 1968
Dr. Claus Wagner-Bartak; Director
Listed in the Canadian Who's Who, Dr. Wagner-Bartak is an
accomplished, internationally recognized scientist and business
executive. He currently holds positions with B.A. Technologies as
Director and Chief Operating Officer (previously President and
CEO), Energy Dynamics Inc. as President, and with Manco
Information technology Inc. as Managing Director. In addition to
multiple career executive positions in the business arena, Dr.
Wagner-Bartak has received international recognition and acclaim
for his scientific leadership. Personal achievement awards
include the Engineering Medal of the Professional Engineering
Association of Ontario, multiple awards from NASA including the
hallmark Public Service Medal, and the prestigious Dauphin Award.
Other Management
Austin "Bud" Burrell; Chairman of the Advisory Board
Capitalizing on Mr. Burrell's extensive executive level
experience in strategic planning, mergers and acquisitions and
technology initiatives, Management, under his leadership plans to
recruit additional Advisory Board members. Mr. Burrell has worked
in an executive advisory role with many leading companies, such
as: Dean Witter, Codercard, Shearson-Lehman, and Apollo
Computers. As President of The Quantum Matrix Corp. (a Shearson-
Lehman subsidiary) he led analysis of global, international,
hedged, derivative and risk adjusted money manager investments as
well as designing the Shearson Global Equity Return Indices. The
combination of significant business and financial strategy
experience qualifies Mr. Burrell to lead in the strategic role of
Chairman of the Advisory Board.
There is no family relationship between any of the officers and
directors of the Company.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company
will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive
investment interests in a number of entities, the Company could
be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission
as to the status of the Company under the Investment Company Act
of 1940 and, consequently, any violation of such Act would
subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
Paul A. Ruppanner and Steven B. Randall respectively have
received 549,000 and 353,431 shares of the Company in lieu of any
cash compensation for 1999. They both have agreed to act without
salaried compensation until authorized by the Board of Directors,
which is not expected to occur until the Registrant has generated
revenues from operations. As of the date of this registration
statement, the Company has no funds available to pay directors.
Further, none of the directors or officers is accruing any
compensation pursuant to any agreement with the Company.
Note: There is currently a stock option Agreement with the two
officers of the Company, Paul Andrew Ruppanner and Steven B.
Randall. Each is granted the right and option to purchase any or
all of an aggregate of 2,000,000 shares of Class A Common Stock,
vesting over a three year period from the date of hire, at the
purchase price of $.35 (thirty-five cents) per share. These
options are effective as of September 15, 1999 and expire
December 31, 2009.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock is quoted on the over-the-counter
market in the United States under the symbol CSNO. It was
formerly listed under the symbol MGIL.
Market Price
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity
security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker
or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating
to the penny stock market, which, in highlight form, (i) sets
forth the basis on which the broker or dealer made the
suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in
the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has recently made changes in
the criteria for initial listing on the NASDAQ Small Cap market
and for continued listing. For initial listing, a company must
have net tangible assets of $4 million, market capitalization of
$50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years.
For initial listing, the common stock must also have a minimum
bid price of $4 per share. In order to continue to be included on
NASDAQ, a company must maintain $2,000,000 in net tangible assets
and a $1,000,000 market value of its publicly-traded securities.
In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a transaction
with any merger or acquisition candidate, which will allow the
Company's securities to be traded without the aforesaid
limitations. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its
securities for listing on NASDAQ or some other national exchange,
or be able to maintain the maintenance criteria necessary to
insure continued listing. The failure of the Company to qualify
its securities or to meet the relevant maintenance criteria after
such qualification in the future may result in the discontinuance
of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter
market. As a result, a shareholder may find it more difficult to
dispose of, or to obtain accurate quotations as to the market
value of, the Company's securities.
Holders
There are 46 holders of the Company's Common Stock. On October
20, 1995, the Company issued 20,000 shares of its common stock to
each of its three initial officers and directors. On July 3,
1996, the Company issued 1,000 shares each of its common stock to
its three initial officers and directors. These were issued
according to Rule 144. Between May 7, 1997 and May 15, 1997, the
Company issued 100,000 shares of its common stock pursuant to
Rule 504.
Dividends
The Registrant has not paid any dividends to date, and has no
plans to do so in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
On October 20, 1995, the Company issued 20,000 shares of it stock
to each of its three initial officers and directors for a total
cash consideration of $1,500.00. On July 3, 1996, the Company
once again sold 1,000 shares of its stock to its three initial
officers and directors for $1,099.98. Between May 7, 1997 and May
15, 1997, the Company sold 100,000 shares pursuant to Rule 504.
On March 3, 1998, the Company underwent a forward stock split on
a 30:1 basis, increasing the issued and outstanding number of
shares to 4,890,000. The Company also cancelled 1,890,000 shares
of its common stock resulting in 3,000,000 shares of common stock
issued and outstanding.
On May 13, 1999, the Company once again underwent a forward stock
split on a 2:1 basis, resulting in 6,000,000 shares of its stock
issued and outstanding. On May 28, 1999, the Company issued a
total of 7,000,000 shares of stock for a total consideration of
$100,000 to four companies and the two officers of the Company.
On August 30, 1999, the Company issued a total of 290,000 shares
to two individuals for compensation for services rendered or to
be rendered to the Company, which were issued in accordance with
Rule 144.
On September 28, 1999 and November 17,1999 the Company issued
125,000 of its shares to Team Lost Boy BV (Amsterdam, Holland)
for the exclusive global marketing rights of their Avatar gaming
platform software.
On October 11, 1999, the Company issued a total of 984,000 shares
of its restricted stock to approximately 8 individuals and two
companies for various services or acquisitions for the Company.
On November 4, 1999, the Company issued 350,000 shares to an
individual under Rule 504. On November 17, 1999, the Company
issued a total of 2,310,723 shares to 3 individuals and two
entities for services or acquisitions on behalf of the Company.
On November 21, 1999, the Company issued a total of 200,000
shares to two individuals. On November 29, 1999, the Company
cancelled 700,476 shares of its stock and re-issued 453,431
shares to one individual.
In July, 1999, the Company issued a 1% Series A Senior
Subordinated Convertible Redeemable Debenture in the amount of
$600,000 to ZZG Holdings. During August 1999 and November 1999,
the Company issued a total of 334,434 of its stock in exchange
for conversion of $150,000 worth of the debentures.
With respect to the sales made, the Registrant relied on Section
4(2) of the Securities Act of 1933, as amended. No advertising or
general solicitation was employed in offering the shares. The
securities were offered for investment only and not for the
purpose of resale or distribution, and the transfer thereof was
appropriately restricted.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorizes the issuance
of 50,000,000 shares of Common Stock, par value $0.001 per share,
of which 17,347,112 are issued and outstanding as of November 29,
1999. Of the shares issued and outstanding, a total of 10,662,678
are restricted pursuant to Rule 144. The shares are non-
assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled
to one vote for each share on all matters to be voted on by the
stockholders. The shares are fully paid, non-assessable, without
pre-emptive rights, and do not carry cumulative voting rights.
Holders of common shares are entitled to share ratably in
dividends, if any, as may be declared by the Company from time-to-
time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-
rata basis all assets remaining after payment in full of all
liabilities.
In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under
certain circumstances, may sell within any three-month period a
number of shares which does not exceed the greater of one percent
of the then outstanding Common Stock or the average weekly
trading volume during the four calendar weeks prior to such sale.
Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has
satisfied a two-year holding period and who is not, and has not
been for the preceding three months, an affiliate of the Company.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be
issued to management or promoters, or affiliates or associates of
either.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its
shareholders for errors in judgment or other acts or omissions
not amounting to intentional misconduct, fraud, or a knowing
violation of the law, since provisions have been made in the
Articles of incorporation and By-laws limiting such liability.
The Articles of Incorporation and By-laws also provide for
indemnification of the officers and directors of the Company in
most cases for any liability suffered by them or arising from
their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud, or a knowing
violation of the law. Therefore, purchasers of these securities
may have a more limited right of action than they would have
except for this limitation in the Articles of Incorporation and
By-laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors
are required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure,
be able to bring a class action or derivative suit to enforce
their rights, including rights under certain federal and state
securities laws and regulations. Shareholders who have suffered
losses in connection with the purchase or sale of their interest
in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of
the proceeds from the sale of these securities, may be able to
recover such losses from the Company.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this
Item 13 follow the index of financial statements appearing at
Item 15 of this Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Company recently changed auditors from Barry L. Friedman,
P.C., to Feldman Sherb Horowitz & Co., P.C. when the Company
changed its name on May 13, 1999. The Company had no disagreement
with Mr. Friedman concerning his audit.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Report of Independent Auditors, Feldman Sherb Horowitz
& Co. P.C. dated December 2, 1999.
Balance Sheet as of December 31, 1998 and September 30,
1999
Statement of Operation for the years ended December 31,
1998 and December 31, 1997, and Inception (August
23, 1995) to December 31, 1998, and the nine months
ended September 30, 1999 and the nine months ended
September 30, 1998, and Inception (August 23, 1995)
to September 30, 1999.
Statement of Stockholders' Equity
Statement of Cash Flows for the years ended December
31, 1998 and December 31, 1997, and Inception
(August 23, 1995) to December 31, 1998, and the nine
months ended September 30, 1999 and the nine months
ended September 30, 1998, and Inception (August 23,
1995) to September 30, 1999.
Notes to Financial Statements
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
CasinoBuilders.com, Inc.
We have audited the accompanying balance sheet of
Casinobuilder.Com, Inc. (A Development Stage Company) as of
December 31, 1998, and the related statements of operations,
changes in stockholders equity and cash flows for the years ended
December 31, 1998 and 1997 and for the period from inception
August 23, 1995 to December 31, 1998. These financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Casinobuilders.Com, Inc. as of December 31, 1998 and the
results of its operations and cash flows for the years ended
December 31, 1998 and 1997 and for the period from inception
(August 23, 1995) to December 31, 1998 in conformity with
generally accepted accounting principles.
/s/ Feldman Sherb Horowitz & Co.
P.C.
Certified Public Accountants
December 2, 1999
New York, New York
CASINOBUILDERS.COM, INC.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<S> <C> <C>
December 31, September 30,
1998 1999 (unaudited)
ASSETS
CURRENT ASSETS - CASH $2,853 $207,038
DEPOSIT ON ACQUISITION 450,000
OTHER ASSETS; 123 3,500
TOTAL ASSETS 2,976 660,538
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES;
Accounts payable 691 44,520
Deferred licensing revenues 65,750
Debentures payable - Due July 2001 524,000
COMMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY;
Common stock, $0.001 par value, 9,780 13,552
50,000,000 shares authorized;
9,780,000 and 13,552,330 issued
and outstanding
Additional paid-in Capital 17,820 190,463
Deficit accumulated in the (25,315) (177,747)
development stage
TOTAL STOCKHOLDERS' EQUITY 2,285 (26,268)
(DEFICIT)
TOTAL LIABILITIES AND 2,976 660,538
STOCKHOLDERS' EQUITY
</TABLE>
CASINOBUILDERS.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<S> <C> <C> <C>
Years Ended Years Ended Inception
December 31, December 31, (August 23,
1998 1997 1995) to
December 31,
1998
REVENUES
COSTS AND EXPENSES:
General, Selling and 10,802 12,592 25,315
Administrative
NET LOSS (10,802) (12,591) (25,315)
BASIC AND DILUTED (0.00) (0.00) (0.00)
LOSS PER COMMON
SHARE
WEIGHTED AVERAGE 9,780,000 9,780,000 6,585,000
COMMON SHARES
OUTSTANDING
</TABLE>
See accompanying notes to financial statements & audit report
CASINOBUILDERS.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS (continued)
<TABLE>
<S> <C> <C> <C>
Nine Months Nine Months Inception
Ended September Ended September (August 23,
30, 1999 30, 1998 1995) to
September 30,
1999
REVENUES
COSTS AND EXPENSES:
General, Selling and 249,641 7,764 274,956
Administrative
NET LOSS (249,641) (7,764) (274,956)
BASIC AND DILUTED (0.02) (0.00) (0.04)
LOSS PER COMMON
SHARE
WEIGHTED AVERAGE 10,895,890 9,780,000 7,376,800
COMMON SHARES
OUTSTANDING
</TABLE>
See accompanying notes to financial statements & audit report
CASINOBUILDERS.COM, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C> <C> <C> <C>
Common Shares Stock Amount Additional paid- Deficit Total
in Capital Accumulated in Stockholders'
the Development Equity
Stage
Balance, January 1, 3,780,000 $3,780 $(1,180) $(1,922) $
1997 6
7
8
Issuance of shares 6,000,000 6,000 19,000 25,000
for cash
Net loss (12,591) (12,591)
BALANCE, DECEMBER 9,780,000 9,780 17,820 (14,513) 13,987
31, 1998
Shares contributed (3,780,000) (3,780) 3,780
to treasury and
cancelled
Issuance of shares
for:
Cash 7,000,000 7,000 93,000 100,000
Services 415,000 415 415
Conversion of 137,330 137 75,863 76,000
debentures
Net loss (152,432) (152,432)
BALANCE, SEPTEMBER 13,552,330 $13,552 $190,463 $(177,747) $(26,268)
30, 1999
(Unaudited)
</TABLE>
See accompanying notes to financial statements & audit report.
CASINOBUILDERS.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<S> <C> <C> <C>
Year Ended Year Ended Dec. Inception (Aug.
Dec.31, 1998 31, 1997 23, 1995) to
Dec. 31, 1998
Cash Flows from Operating
Activities:
Net Loss $(10,802) $(12,591) $(25,315)
Changes in Assets and
Liabilities:
Increase in deposit on
acquisition
Decrease (increase) in other 74 74 (123)
assets
Increase in accounts payable 100 241 691
Increase in deferred
licensing revenues
Total adjustments 174 315 568
NET CASH USED IN OPERATING (10,628) (12,276) (24,747)
ACTIVITIES:
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock 25,000 27,600
Increase in debenture payable
NET CASH PROVIDED BY 25,000 27,600
FINANCING ACTIVITIES
NET INCREASE (DECREASE) IN (10,628) 12,724 2,853
CASH
Cash, Beginning of period 13,481 757
Cash, end of period 2,853 13,481 2,853
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
No cash payaments were made
for income taxes or interest
during each of the above the
periods
Noncash financing activities
Common stock issues for:
Conversion of debentures
Services
</TABLE>
See accompanying notes to financial statements & audit report
CASINOBUILDERS.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS (continued)
<TABLE>
<S> <C> <C> <C>
Nine Months Nine Months Inception (Aug.
Ended Sept. 30, Ended Sept. 30, 23, 1995) to
1999 (unaudited) 1998 (unaudited) Sept. 30, 1999
(unaudited)
Cash Flows from Operating
Activities:
Net Loss $(152,432) $(7,764) $(177,747)
Changes in Assets and
Liabilities:
Increase in deposit on (450,000) (450,000)
acquisition
Decrease (increase) in other (3,377) (3,500)
assets
Increase in accounts payable 44,244 100 44,520
Increase in deferred 65,750 65,750
licensing revenues
Total adjustments (343,383) 100 (343,230)
NET CASH USED IN OPERATING (495,815) (7,674) (520,977)
ACTIVITIES:
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock 100,000 128,015
Increase in debenture payable 600,000 600,000
NET CASH PROVIDED BY 700,000 728,015
FINANCING ACTIVITIES
NET INCREASE (DECREASE) IN 204,185 (7,674) 207,038
CASH
Cash, Beginning of period 2,853 13,481
Cash, end of period 207,038 5,807 207,038
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
No cash payaments were made
for income taxes or interest
during each of the above the
periods
Common stock issues for:
Conversion of debentures 76,000 76,000
Services 415 415
</TABLE>
See accompanying notes to financial statements & audit report
CASINOBUILDERS.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
1. THE COMPANY
Casinobuilders.Com, Inc. (the "Company"), formerly
known as Magic Lantern Group, Inc., was organized in Nevada
in August 1995. The Company plans to provide consulting,
marketing and operational services to clients offering
electronic gaming entertainment through the Internet. The
Company was in the development stage at September 30, 1999.
2. SIGNIFICANT ACCOUNTING POLICIES
a. Use of Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and disclosure
of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from these estimates.
b. Loss Per Share - Basic loss per share was computed using the
weighted average number of shares of outstanding common stock.
Weighted average share and per share amounts werer restated to
give retroactive effect to the stock splits occurring in March
1998 and May 1999. Diluted per share amounts when applicable also
include the effect of dilutive common stock equivalents from the
assumed exercise of options and conversion of debentures.
c. Revenue Recognition - Revenues are recognized over the term
of the contracts on a straight-line basis.
d. Income Taxes - Income taxes are accounted for under
Statement of Fianncial Accounting Standards No. 109, "Accounting
for Income Taxes", which is an asset and liability approach that
requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been
recognized in the Company's financial statements or tax returns.
e. Fair Value of Financial Instruments - The carrying amounts
of the assets and liabilities reported in the balance sheet
approximately their fair market value based on the short-term
maturity of these instruments.
f. Stock-Based Compensation - The company accounts for stakc
transactions in accordance with APB No. 25, "Accounting for Stock
Issued to Employees". In accordance with statement of Financial
Accounting Standards No. 123 ("SFAS 123"). "Accounting for Stock-
Based Compensation", the Company adopted the pro forma disclosure
requirement of SFAS 123.
3. DEPOSIT ON ACQUISITION
On October 31, 1999, the Company entered into an
agreement with Futurenet Holdings Ltd. ("Futurenet") to
acquire all of the outstanding shares of Cyberluck, Curacao
N.V., Conet N.V. and Global Cash N.V. for $1,700,000. The
acquisition, if consummated, would provide the Company with
a Netherlands Antilles exclusive master license to operate
Internet gaming casinos in addition to certain computer
equipment and software adapted for such purpose. The
purchase price was payable in installments due as follows:
$620,000 - October 31, 1999; $350,000 - December 1, 1999;
$600,000 - February 29, 2000; $100,000 - July 1, 2000. The
initial payment of $650,000 is non-refundable. The Company
made the initiall payment of $650,000 but was unable to make
the scheduled payemnt of $350,000 on December 1, 1999. The
Company has negotiated an extension to January 20, 2000 for
the payment of $350,000. At the present time, the Company
does not have sufficient funds by such date. If the Company
fails to make the payment on or before January 20, 2000, the
Company will lose the right to make the acquisition and will
forfeit the $650,000 initial payment.
4. DEBENTURES PAYABLE
In July 1999, the Company issued Series A Convertible
Debentures in the amount of $600,000. The debentures are
payable with interest at one percent per annum commencing
August 1999 and are due in full on July 16, 2001. The
debentures are convertible at any time into common stock at
75 percent of the closing bid price, quoted on the day
preceding the conversion date, as reported by the NASD "OTC-
Bulletin Board". Interest is accrued monthly and converted
into common shares as determined by the agreement. The
Company issued 137,330 shares of common stock upon
conversion of $76,000 of debentures through September 30,
1999. Debentures payable were included in the financial
statements, at September 30, 1999, net of unamortized
beneficial conversion feature of $153,000.
5. DEFERRED LICENSING REVENUES
On September 15, 1999, the Company signed a contract to
license a Turn-Key Internet Casino for a term of three years
expiring in September 2002. The agreement calls for an
initial payment of $65,750 upon signing of the contract and
$200,000 within 120 days thereafter. The contract calls for
the licensee to pay monthly license fees of 20 percent of
the gross gaming revenues as defined in the agreement in
addition to monthly service fees of $13,000 over the term of
the agreement. Monthly fee payments will commence with the
inception of operations.
6. LEASES
The Company was inactive during 1998 and 1997 and
accordingly incurred no rent expense in those years.
7. STOCK SPLIT
On March 3, 1998, the Company underwent a forward stock
split on a 30:1 basis. On May 13, 1999, the Company once
again underwent a forward stock split on a 2:1 basis. All
share and per-share amounts in the accompanying financial
statements have been restated to give retroactive effect to
the stock split.
8. STOCK OPTIONS
On September 15, 1999, the Company instituted a stock option
and restricted stock plan which is available to selected
directors, officers, employees and consultants of the Company
("Participants").
The term of each option will be ten years from the date of
grant or a shorter term as determined by the Stock Option
Committee (the "Committee") except for a grant to a 10%
shareholder, in which the term will be five years. The exercise
price will be determined by the Committee and will not be less
than 100% of the fair market value of the shares subject to the
option on the date of grant.
The restricted stock would be granted to Participants for
services rendered at no additional cost to the Participants. The
value of the services performed must equal or exceed the par
value of the restricted stock to be granted. The terms,
conditions and restrictions of the stock will be determined by
the committee on the date of grant. On the date the restriction
period terminates, the restricted stock will vest in the
Participant.
On September 15, 1999, the board of directors granted
Messrs. Ruppanner and Randall, both officers of the Company
options to purchase up to 2,000,000 shares of common stock with
vesting over a three-year period from the date of hire, at the
purchase price of $.35 per share. These options are effective as
of September 15, 1999 and expire December 31, 2009. The
aforementioned 2,000,000 options granted were the only
outstanding options at September 30, 1999.
Pro forma information regarding net loss and loss per share
is presented below as if the Company had accounted for its
employee stock options under the fair value method of SFAS 123;
such pro forma information is not necessarily representative of
the effects on reported net income for future years due to, among
other things: (1) the vesting period of the stock options and the
(2) fair value of additional stock options in future years.
Had compensation cost for the Company's stock option plan
been determined based upon the fair value at the grant date for
awards under the plan consistent with the methodology prescribed
under SFAS 123, the Company's net loss for the period ended
September 30, 1999 would have been approximately ($635,951) or
($0.06) per share. The weighted average fair value o the options
granted during the period ended September 30, 1999 are estimated
as $0.17 on the date of grant using the Black-Scholes option-
pricing model with the following assumptions used for the period
ended September 30, 1999: expected dividend yield of 0%, expected
volatility of 50%, risk free interest rate of .057%, and
estimated life of ten years.
INCOME TAXES
The following is a reconciliation of income taxes and
amounts computed using the U.S. Federal statutory rate and the
effective tax rate for the years ended December 31, 1998 and
1997:
<TABLE>
<S> <C> <C>
1998 1997
Pre-tax loss $ (10,802) $
(12,591
)
Tax benefit at Federal statutory (3,800) (4,400)
rate (35%)
Tax benefit not recognized 3,800 4,400
Taxes per financial statements $ $
- -
</TABLE>
The Company has adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes". Under this
standard, the Company records as an asset its net operating loss
carryforward ("NOL") based upon current tax returns, and
establishes a valuation allowance to the extent of any NOL which
will not be utilized in the foreseeable future. At this time,
the Company can not reliably predict future profitability.
Accordingly, the deferred tax asset has been reduced in its
entirety by the valuation allowance. As of December 31, 1998,
the Company had net operating loss carry forwards of
approximately $25,000 expiring variously through 2014.
A significant portion of these carry forwards may be subject
to limitations on annual utilization due to "equity structure
shifts" or owner shifts" involving "5 percent stockholders" (as
defined in the Internal Revenue Code), which resulted in more
than a 50% change in ownership.
EXHIBITS
3.1 Articles of Incorporation
3.2 By-Laws
10. Material Contracts
1. Agreement with Futurenet Holdings
2. Employee Stock Option Agreement (P.A. Ruppanner)
3. Employment Agreement (Steven Randall)
4. Employment Agreement (P.A. Ruppanner)
5. Letter of Intent (Fennell)
6. Consulting Agreement (Lugion)
7. Software and License Agreement (The Home Bingo Network)
16. Letter re change in certifying accountant
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
CasinoBuilders.com, Inc.
By: /s/ Steve Randall
Steven Randall,
Secretary/Treasurer
ARTICLES OF INCORPORATION
of
MAGIC LANTERN GROUP, INC.
The undersigned, being of the age of majority, file Articles of
Incorporation to conduct business in corporate form according to
Chapter 78 (Private Corporation Act) of the statutes and the law
of the State of Nevada.
1.0 NAME
The name of the corporation is MAGIC LANTERN GROUP, INC.
2.0 DURATION
The period of duration of the Corporation is perpetual.
3.0 PURPOSES AND POWERS
3.1 PURPOSES
The purposes for which the Corporation is organized are
as follows:
3.1.1 To do everything necessary, proper, advisable, or
convenient for the accomplishment of the foregoing purposes, and
to do all things incidental to them or connected with them that
are not forbidden by the Nevada Private Corporation Act
(hereinafter "Act"), by other law, or by these Articles.
3.1.2 To carry on any other activities and business lawful in
Nevada or the United States of America.
3.2 POWERS
The Corporation, subject to any specific written
limitations or restrictions imposed by the Act or by these
Articles of Incorporation, shall have the right to and may
exercise the following powers:
3.2.1 To have and exercise all powers specified in the
Private Corporation Act of Nevada;
3.2.2 To enter into lawful arrangement for sharing profits,
deferring compensation, making and entering into pension plans
and the like for it's employees; to enter into reciprocal
associations, joint ventures, partnerships, cooperative
associations, limited liability companies and other similar
activities;
3.2.3 To make any guaranty respecting stocks, dividends,
securities, indebtedness, interest, contracts, or other
obligations created by any domestic or foreign corporations,
associations, partnerships, individuals, or other entities;
3.2.4 Each of the foregoing clauses of this Section shall be
construed as independent powers and the matters expressed in each
clause shall not, unless otherwise expressly provided, be limited
by reference to, or inference from, the terms of any other
clause. The enumeration of specific powers shall not be construed
as limiting or restricting in any manner either the meaning of
general terms used in any of these clauses, or the scope of the
general powers of the Corporation created by them nor shall the
expression of one thing in any of these clauses be deemed to
exclude another not expressed, although it be of like nature.
3.2.5 The corporation shall not engage in the trust, banking,
insurance or railroad business.
3.3 CARRYING OUT OF PURPOSES AND EXERCISE OF POWERS IN ANY
JURISDICTION
The Corporation may carry out its purposes and exercise
it's powers in any state territory, district, or possession
of the United States, or in any foreign country, to the
extent that these purposes and powers are not forbidden by
the law of the state, territory, district, or possession of
the United States, or by the foreign country; and it may
limit the purpose or purposes that it proposes to carry out
or the powers it proposes to exercise in any application to
do business in any state, territory, district, or possession
of the United States or foreign country.
3.4 DIRECTION OF PURPOSES AND EXERCISE OF POWERS BY DIRECTORS
The Directors, subject to any specific written
limitations or restrictions imposed by the Act or by these
Articles of Incorporation, shall direct the carrying out of
the purposes and exercise the powers of the Corporation
without previous authorization or subsequent approval by the
shareholders of the Corporation.
4.0 SHARES
4.1 NUMBER
The aggregate number of the shares that the Corporation
shall have authority to issue shall be 50,000,000 shares of
common stock, each share having a par value of 1 mil. All
shares shall be common, voting, and non-assessable.
4.2 DIVIDENDS
The holders of the Capital Stock shall be entitled to
receive, when and as declared by the Board of Directors,
solely out of unreserved and unrestricted earned surplus,
dividends payable either in cash, in property, or in shares
of the Capital Stock.
No dividends shall be paid if the source out of which
it is proposed to pay the dividend is due to or arises from
unrealized appreciation in value or from a revaluation of
assets; or if the corporation is incapable of paying its
debts as they become due in the usual course of business.
4.3 CUMULATIVE VOTING; PRE-EMPTIVE RIGHTS
There shall be no cumulative voting for Directors. Pre-
emptive rights shall not be granted.
5.0 MINIMUM CAPITAL
The Corporation will not commence business until consideration of
the value of at least $1,000 has been received.
6.0 REGULATION OF INTERNAL AFFAIRS
6.1. BYLAWS
The initial Bylaws shall be adopted by the Board of
Directors. The power to alter, amend, or repeal the Bylaws
or to adopt new Bylaws shall be vested in the Board of
Directors. The Bylaws may contain provisions for the
regulation and management of the affairs of the Corporation
not inconsistent with the Act or these Articles.
6.2. TRANSACTIONS IN WHICH DIRECTORS HAVE AN INTEREST
Any contract or other transaction between the
Corporation and one or more of its Directors or between the
Corporation and any firm of which one or more of its
Directors are members or employees, or in which they are
interested, or between the Corporation and any corporation
or association of which one or more of its Directors are
shareholders, members, directors, officers, or employees or
in which they are interested, shall be valid for all
purposes, notwithstanding the presence of the Director or
Directors at the meeting of the Board of Directors of the
Corporation that acts upon, or in reference to, the contract
or transaction, and notwithstanding his or their
participation in he action, if the fact of such interest
shall be disclosed or known to the Board of Directors and
the Board of Directors shall, nevertheless, authorize or
ratify the contract or transaction, the interested Director
or Directors to be counted in determining whether a quorum
is present and to be entitled to vote on such authorization
or ratification. The section shall not be construed to
invalidate any contract or other transaction that would
otherwise be valid under common and statutory law applicable
to it.
6.3. INDEMNIFICATION AND RELATED MATTERS
6.3.1. The Corporation shall have power to indemnify any
person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
Corporation) by reason of the fact that he is or was a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expense (
including attorneys fees), judgment, fines and amounts paid in
settlement actually and reasonable incurred by him in connection
with such action, suit of proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contenders or its equivalent, shall not of itself
create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not
opposed to the best interest of the Corporation and, with respect
to any criminal action or proceeding, had actual knowledge that
his or her conduct was unlawful.
6.3.2. The Corporation shall have power to indemnify any
person who was or is a party of is threatened to be made a party
to any threatened or completed action or suit by or in the right
of the Corporation to procure a judgment in it's favor by reason
of the fact that he is or was a director, officer, employee or
agent of the Corporation, or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys fees) actually
and reasonable incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the
best interest of the Corporation except that no indemnification
shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the court in which
such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expense the court shall deem
proper.
6.3.3. To the extent that a Director, officer, employee or
agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in (a) and (b) or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including
attorneys fees) actually and reasonably incurred by him in
connection therewith.
6.3.4. Any indemnification under (a) and (b) (unless ordered
by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination by the Corporation that
indemnification of the Director, officer, employee or agent is
proper in the circumstances because he has met the applicable
standard of conduct set forth in (a) and (b). Such determination
shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of Directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not
obtainable, or even if obtainable, if a quorum of disinterested
Directors so directs, by independent legal counsel in a written
opinion, or (3) by the shareholders.
6.3.5. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or
proceeding as authorized in the manner provided in (d) upon
receipt of an undertaking by or on behalf of the Director,
officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by
the Corporation as authorized in this section.
6.3.6. The indemnification provided by this section shall not
be deemed exclusive of any other rights to which those identified
may be entitled under any Bylaw, agreement, vote of shareholders
or disinterested Directors or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has
ceased to be a Director, officer, employee or agent and shall
inure to the benefit of the heirs, executors, and personal
representatives of such person.
6.3.7. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a
Director, Officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity or
arising our of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability
under the provisions of this section.
6.3.8. A Director shall not be personally liable for breach of
fiduciary duty when acting either as a Director or Officer except
for acts involving intentional misconduct, fraud, a knowing
violation of the law or the payment of illegal dividends. NRS
78.037. NRS 78.300
6.4. REMOVAL OF DIRECTORS
Removal shall be governed by the Bylaw provisions and
the Act.
6.5. AMENDMENT OF ARTICLES
The Corporation reserves the right to amend the
Articles of Incorporation in any manner now or hereafter
permitted by the Act.
7.0 RESIDENT AGENT: ADDRESS OF CORPORATION
7.1. The "registered office" of the corporation shall be 1700 E.
Desert Inn Road, Suite 113, Las Vegas, Nevada 89109.
7.2. The initial Resident agent shall be Robert C. Bovard, 1700
East Desert Inn Rd. Suite 113, Las Vegas, Nevada 89109.
8.0 IDENTITY OF DIRECTOR(S)
The initial Board of Directors (the Directors shall be
styled as Directors and not as Trustees) shall be three
in number but may be increased or decreased at the
formation and organization meeting or by authority of
Bylaws. Members of the Board of Directors need not be
residents of Nevada. The names and addresses of the
person(s) to serve as Director(s) until the formation
meeting or first annual meeting and until their
successor(s) shall have been elected and qualified or
until the number of members of the Board of Directors
is expanded is:
Robert C. Bovard
1700 East Desert Inn Road
Suite 113
Las Vegas, Nevada 89109
The number of Directors may be changed from time to
time by amendment of the Bylaws but no decrease shall
have the effect of reducing such number below one or of
shortening the term of any incumbent Director. Anything
to the contrary notwithstanding, however, the number
shall not be less than two if there are only two if
there are only two shareholders of record or one if
there is only one shareholder of record. The Board, if
there are more than two shareholders, shall consist of
not less than three nor more than seven members.
9.0 ORIGINAL INCORPORATORS
The name, address and identity of the original
Incorporator is:
Robert C. Bovard
1700 East Desert Inn Road
Suite 113
Las Vegas, Nevada 89109
DATED this 22nd day of August, 1995
/s/ Robert C. Bovard
ROBERT C. BOVARD
CERTIFICATE OFAMENDMENT TO ARTICLES OF INCORPORATION
of
MAGIC LANTERN GROUP, INC.
ROBERT C. BOVARD, ESQ. certifies that:
1. He is the sole original incorporator of Magic Lantern
Group, Inc. a Nevada corporation.
2. The original Articles were filed in the Office of the
Secretary of State on August 23, 1995.
3. As of the date of this certificate, no stock of the
corporation has been issued.
4. They hereby adopt the following amendments to the
Articles of Incorporation of this Corporation:
Article 4.1 is amended to read as follows:
4.1 The aggregate number of shares that the Corporation shall
have authority to issue shall be 50,000,000 shares of common
stock, each share having a par value of 1 mil. All shares shall
be common, voting, and non-assessable.
Article 5.0 is amended to read as follows:
5.0 MINIMUM CAPITAL
The Corporation will not commence business until
consideration of the value of at least $1,000 has been recieved.
/s/ Robert C. Bovard
Robert C. Bovard, Esq.
BY-LAWS
OF
Magic Lantern Group, Inc.
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of the
Company shall be held at its office in the City of Las Vegas,
Clark County, at 1 o'clock in the afternoon on the 25th day of
August in each year, if not a legal holiday, and if a legal
holiday, then on the next succeeding day not a legal holiday, for
the purpose of electing directors of the company to serve during
the ensuing year and for the transaction of such other business
as may be brought before the meeting.
At least five days' written notice specifying the time and
place, when and where, the annual meeting shall be convened,
shall be mailed in a United States Post Office addressed to each
of the stockholders of record at the time of issuing the notice
at his or her, or its address last known, as the same appears on
the books of the company.
SECTION 2. Special meetings of the stockholders may be held
at the office of the company in the State of Nevada or elsewhere,
whenever called by the President, or by the Board of Directors,
or by vote of, or by an instrument in writing signed by the
holders of 51% of the issued and outstanding capital stock of the
company. At least ten days' written notice of such meeting,
specifying the day and hour and place, when and where such
meeting shall be convened, and objects for calling the same,
shall be mailed in a United States Post Office, addressed to each
of the stockholders of record at the time of issuing the notice,
at his or her or its address last known, as the same appears on
the books of the company.
SECTION 3. If all the stockholders of the company shall
waive notice of a meeting, no notice of such meeting shall be
required, and whenever all of the stockholders shall meet in
person or by proxy, such meeting shall be valid for all purposes
without call or notice, and at such meeting any corporate action
may be taken.
The written certificate of the officer or officers calling
any meeting setting forth the substance of the notice, and the
time and place of the mailing of the same to the several
stockholders, and the respective addresses to which the same were
mailed, shall be prima facie evidence of the manner and fact of
the calling and giving such notice.
If the address of any stockholder does not appear upon the
books of the company, it will be sufficient to address any notice
to such stockholder at the principal office of the corporation.
SECTION 4. All business lawful to be transacted by the
stockholders of the company, may be transacted at any special
meeting or at any adjournment thereof. Only such business,
however, shall be acted upon at special meeting of the
stockholders as shall have been referred to in the notice calling
such meetings, but at any stockholders' meeting at which all of
the outstanding capital stock of the company is represented,
either in person or by proxy, any lawful business may be
transacted, and such meeting shall be valid for all purposes.
SECTION 5. At the stockholders' meetings the holders of more than
50 percent (50%) in amount of the entire issued and outstanding
capital stock of the company, shall constitute a quorum for all
purposes of such meetings.
If the holders of the amount of stock necessary to
constitute a quorum shall fail to attend, in person or by proxy,
at the time and place fixed by these By-laws for any annual
meeting, or fixed by a notice as above provided for a special
meeting, a majority in interest of the stockholders present in
person or by proxy may adjourn from time to time without notice
other than by announcement at the meeting, until holders of the
amount of stock requisite to constitute a quorum shall attend. At
any such adjourned meeting at which a quorum shall be present,
any business may be transacted which might have been transacted
as originally called.
SECTION 6. At each meeting of the stockholders every
stockholder shall be entitled to vote in person or by his duly
authorized proxy appointed by instrument in writing subscribed by
such stockholder or by his duly authorized attorney. Each
stockholder shall have one vote for each share of stock standing
registered in his or her or its name on the books of the
corporation, ten days preceding the day of such meeting. The
votes for directors, and upon demand by any stockholder, the
votes upon any question before the meeting, shall be by voice
vote.
At each meeting of the stockholders, a full, true and
complete list, in alphabetical order of all the stockholders
entitled to vote at such meeting, and indicating the number of
shares held by each, certified by the Secretary of the Company,
shall be furnished, which list shall be prepared at least ten
days before such meeting, and shall be open to the inspection of
the stockholders, or their agents or proxies, at the place where
such meeting is to be held, and for ten days prior thereto. Only
the persons in whose names shares of stock are registered on the
books of the company for ten days preceding the date of such
meeting, as evidenced by the list of stockholders, shall be
entitled to vote at such meeting. Proxies and powers of Attorney
to vote must be filed with the Secretary of the Company before an
election or a meeting of the stockholders, or they cannot be used
at such election or meeting.
SECTION 7. At each meeting of the stockholders the polls
shall be opened and closed; the proxies and ballots issued,
received, and be taken in charge of, for the purpose of the
meeting, and all questions touching the qualifications of voters
and the validity of proxies, and the acceptance or rejection of
votes, shall be decided by two inspectors. Such inspectors shall
be appointed at the meeting by the presiding officer of the
meeting.
SECTION 8. At the stockholders' meetings, the regular order
of business shall be as follows:
1. Reading and approval of the Minutes of previous meeting
or meetings;
2. Reports of the Board of Directors, the President,
Treasurer and Secretary of the Company in the order named;
3. Reports of Committee;
4. Election of Directors;
5. Unfinished Business;
6. New Business;
7 Adjournment.
ARTICLE II
DIRECTORS AND THEIR MEETINGS
SECTION 1. The Board of Directors of the Company shall
consist of 3 persons who shall be chosen by the stockholders
annually, at the annual meeting of the Company, and who shall
hold office for one year, and until their successors are elected
and qualify.
SECTION 2. When any vacancy occurs among the Directors by
death, resignation, disqualification or other cause, the
stockholders, at any regular or special meeting, or at any
adjourned meeting thereof, or the remaining Directors, by the
affirmative vote of a majority therefor shall elect a successor
to hold office for the unexpired portion of the term of the
Director whose place shall have become vacant and until his
successor shall have been elected and shall qualify.
SECTION 3. Meeting of the Directors may be held at the
principal office of the company in the state of Nevada or
elsewhere, at such place or places as the Board of Directors may,
from time to time, determine.
SECTION 4. Without notice or call, the Board of Directors
shall hold its first annual meeting for the year immediately
after the annual meeting of the stockholders or immediately after
the election of Directors at such annual meeting.
Regular meetings of the Board of Directors shall be held at
the office of the company in the City of Las Vegas, State of
Nevada on November 1, at 3 o'clock in the P.M. Notice of such
regular meetings shall be mailed to each Director by the
Secretary at least three days previous to the day fixed for such
meetings, but no regular meeting shall be held void or invalid if
such notice is not given, provided the meeting is held at the
time and place fixed by these by-laws for holding such regular
meetings.
Special meetings of the Board of Directors may be held on
the call of the President or Secretary on at least three days
notice by mail or telegraph.
Any meeting of the Board, no matter where held, at which all
of the members shall be present, even though without or of which
notice shall have been waived by all absentees, provided a quorum
shall be present, shall be valid for all purposes unless
otherwise indicated in the notice calling the meeting or in the
waiver of notice.
Any and all business may be transacted by any meeting of the
Board of Directors, either regular or special.
SECTION 5: A majority of the Board of Directors in office
shall constitute a quorum for the transaction of business, but if
at any meeting of the Board there be less than a quorum present,
a majority of those present may adjourn from time to time, until
a quorum shall be present, and no notice of such adjournment
shall be required. The Board of Directors may prescribe rules not
in conflict with these By-laws for the conduct of its business;
provided, however, that in the fixing of salaries of the officers
of the corporation, the unanimous action of all of the Directors
shall be required.
SECTION 6. A Director need not be a stockholder of the
corporation.
SECTION 7. The Directors shall be allowed and paid all
necessary expenses incurred in attending any meeting of the
Board, but shall not receive any compensation for their services
as Directors until such time as the company is able to declare
and pay dividends on its capital stock.
SECTION 8. The Board of Directors shall make a report to the
stockholders at annual meetings of the stockholders of the
condition of the company, and shall, at request, furnish each of
the stockholders with a true copy thereof.
The Board of Directors in its discretion may submit any
contract or act for approval or ratification at any annual
meeting of the stockholders called for the purpose of considering
any such contract or act, which, it approved, or ratified by the
vote of the holders of a majority of the capital stock of the
company represented in person or by proxy at such meeting,
provided that a lawful quorum of stockholders be there
represented in person or by proxy, shall be valid and binding
upon the corporation and upon all the stockholders thereof, as if
it had been approved or ratified by every stockholder of the
corporation.
SECTION 9. The Board of Directors shall have the power from
time to time to provide for the management of the offices of the
company in such manner as they see fit, and in particular from
time to time to delegate any of the powers of the Board in the
course of the current business of the company to any standing or
special committee or to any officer or agent and to appoint any
persons to be agents of the company with such powers (including
the power to subdelegate), and upon such terms as may be deemed
fit.
SECTION 10. The Board of Directors is invested with the
complete and unrestrained authority in the management of all the
affairs of the company, and is authorized to exercise for such
purpose as the General Agent of the Company, its entire corporate
authority.
SECTION 11. The regular order of business at meetings of the
Board of Directors shall be as follows:
1. Reading and approval of the minutes of any previous
meeting or meetings;
2. Reports of officers and committeemen;
3. Election of officers;
4. Unfinished business;
5. New business;
6. Adjournment.
ARTICLE III
OFFICERS AND THEIR DUTIES
SECTION 1. The Board of Directors, at its first and after
each meeting after the annual meeting of stockholders, shall
elect a President, a Vice-President, a Secretary and a Treasurer
to hold office for one, year next coming, and until their
successors are elected and qualify. The offices of the Secretary
and Treasurer may be held by one person.
Any vacancy in any of said offices may be filled by the
Board of Directors.
The Board of Directors may from time to time by resolution,
appoint such additional Vice Presidents and additional Assistant
Secretaries, Assistant Treasurer and Transfer Agents of the
company as it may deem advisable; prescribe their duties, and fix
their compensation, and all such appointed officers shall be
subject to removal at any time by the Board of Directors. all
officers, agents, and factors of the company shall be chosen and
appointed in such manner and shall hold their office for such
terms as the Board of Directors may by resolution prescribe.
SECTION 2. The President shall be the executive officer of
the company and shall have the supervision and, subject to the
control of the Board of Directors, the direction of the Company's
affairs, with full power to execute all resolutions and orders of
the Board of Directors not especially entrusted to some other
officer of the company. He shall be a member of the Executive
Committee, and the Chairman thereof; he shall preside at all
meetings of the Board of Directors, and at all meetings of the
stockholders, and shall sign the Certificates of Stock issued by
the company and shall perform such, other duties as shall be
prescribed by the Board of Directors.
SECTION 3. The Vice-President shall be vested with all the
powers and perform all the duties of the President in his absence
or inability to act, including the signing of the Certificates of
Stock issued by the company, and he shall so perform such other
duties as shall be prescribed by the Board of Directors.
SECTION 4. The Treasurer shall have the custody of all the
funds and securities of the company. When necessary or proper he
shall endorse on behalf of the company for collection checks,
notes, and other obligations; he shall deposit all monies to the
credit of the company in such bank or banks or other depository
as the Board of Directors may designate; he shall sign all
receipts and vouchers for payments made by the company, except as
herein otherwise provided. He shall sign with the President all
bills of exchange and promissory notes of the company; he shall
also have the care and custody of the stocks, bonds,
certificates, vouchers, evidence of debts, securities, and such
other property belonging to the company as the Board of Directors
shall designate; he shall sign all papers required by law or by
those By-Laws or the Board of Directors to be signed by the
Treasurer. Whenever required by the Board of Directors, he shall
render a statement of his cash account; he shall enter regularly
in the books of the company to be kept by him for the purpose,
full and accurate accounts of all monies received and paid by him
on account of the company. He shall at all reasonable times
exhibit the books of account to any Directors of the company
during business hours, and he shall perform all acts incident to
the position of Treasurer subject to the control of the Board of
Directors.
The Treasurer shall, if required by the Board of Directors,
give bond to the company conditioned for the faithful performance
of all his duties as Treasurer in such sum, and with such
security as shall be approved by the Board of Directors, with
expense of such bond to be borne by the company.
SECTION 5. The Board of Directors may appoint an Assistant
Treasurer who shall leave such powers and perform such duties as
may be prescribed for him by the Treasurer of the company or by
the Board of Directors, and the Board of Directors shall require
the Assistant Treasurer to give a bond to the company in such sum
and with such security as it shall approve, as conditioned for
the faithful performance of his duties as Assistant Treasurer,
the expense of such bond to be borne by the company.
SECTION 6. The Secretary shall keep the Minutes of all
meetings of the Board of Directors and the Minutes of all
meetings of the stockholders and of the Executive Committee in
books provided for that purpose. He shall attend to the giving
and serving of all notices of the company; he may sign with the
President or Vice-President, in the name of the Company, all
contracts authorized by the Board of Directors or Executive
Committee; he shall affix the corporate seal of the company
thereto when so authorized by the Board of Directors or Executive
Committee; he shall have the custody of the corporate seal of the
company; he shall affix the corporate seal to all certificates of
stock duly issued by the company; he shall have charge of Stock
Certificate Books, Transfer books and Stock Ledgers, and such
other books and papers as the Board of Directors or the Executive
Committee may direct, all of which shall at all reasonable times
be open to the examination of any Director upon application at
the office of the company during business hours, and he shall, in
general, perform all duties incident to the office of Secretary.
SECTION 7. The Board of Directors may appoint an Assistant
Secretary who shall have such powers and perform such duties as
may be prescribed for him by the Secretary of the company or by
the Board of Directors.
SECTION 8. Unless otherwise ordered by the Board of
Directors, the President shall have full power and authority in
behalf of the company to attend and to act and to vote at any
meetings of the stockholders of any corporation in which the
company may hold stock, and at any such meetings, shall possess
and may exercise any and all rights and powers incident to the
ownership of such stock, and which as the new owner thereof, the
company might have possessed and exercised if present. The Board
of Directors, by resolution, from time to time, may confer like
powers on any person or persons in place of the President to
represent the company for the purposes in this section mentioned.
ARTICLE IV
CAPITAL STOCK
SECTION 1. The capital stock of the company shall be issued
in such manner and at such times and upon such conditions as
shall be prescribed by the Board of Directors.
SECTION 2. Ownership of stock in the company shall be
evidenced by certificates of stock in such forms as shall be
prescribed by the Board of Directors, and shall he under the seal
of the company and signed by the President or the Vice-President
and also by the Secretary or by an Assistant Secretary
All certificates shall be consecutively numbered; the name
of the person owning the shares represented thereby with the
number of such shares and the date of issue shall be entered on
time company's books.
No certificates shall be valid unless it is signed by the
President or Vice-President and by the Secretary or Assistant
Secretary.
All certificates surrendered to the company shall be
cancelled and no new certificate shall be issued until the former
certificate for the same number of shares shall have been
surrendered or cancelled.
SECTION 3. No transfer of stock shall be valid as against
the company except on surrender and cancellation of the
certificate therefor, accompanied by an assignment or transfer by
the owner therefor.
Whenever any transfer shall be expressed as made for
collateral security and not absolutely, the same shall be so
expressed in the entry of said transfer on the books of the
company.
SECTION 4. The Board of Directors shall have power and
authority to make all such rules and regulations not inconsistent
herewith as it may deem expedient concerning the issue, transfer
and registration of certificates for shares of the capital stock
of the company.
The Board of Directors may appoint a transfer agent and a
registrar of transfers and may require all stock certificates to
bear the signature of such transfer agent and such registrar of
transfer.
SECTION 5. The Stock Transfer Books shall be closed for all
meetings of the stockholders for the period of ten days prior to
such meetings and shall be closed for the payment of dividends
during such periods as from time to time may be fixed by the
Board of Directors, and during such periods no stock shall be
transferable.
SECTION 6. Any person or persons applying for a certificate
of stock in lieu of one alleged to have been lost or destroyed,
shall make affidavit or affirmation of the fact, and shall
deposit with the company an affidavit. Whereupon, at the end of
six months after the deposit of said affidavit and upon such
person or persons giving Bond of Indemnity to the company with
surety to be approved by the Board of Directors in double the
current value of stock against any damage, loss or inconvenience
to the company which may or can arise in consequence of a new or
duplicate certificate being issued in lieu of the one lost or
missing, the Board of Directors may cause to be issued to such
person or persons a new certificate, or a duplicate of the
certificate, or a duplicate of the certificate so lost or
destroyed. The Board of Directors may, in its discretion refuse
to issue such new or duplicate certificate save upon the order of
some court having jurisdiction in such matter, anything herein to
the contrary notwithstanding.
ARTICLE V
OFFICES AND BOOKS
SECTION 1. The principal office of the corporation, in
Nevada shall be at 2278 Heflin Ave. Las Vegas, and the company
may have a principal office in any other state or territory as
the Board of Directors may designate.
SECTION 2. The Stock and Transfer Books and a copy of the By-
Laws and Articles of Incorporation of the company shall be kept
at the office of its Resident Agent, Robert C. Bovard, Esq. 1700
E. Desert Inn Rd. #113, Las Vegas in the County of Clark, State
of Nevada, for the inspection of all who are authorized or have
the right to see the same, and for the transfer of stock. All
other books of the company shall be kept at such places as may be
prescribed by the Board of Directors.
ARTICLE VI
MISCELLANEOUS
SECTION 1. The Board of Directors shall have power to
reserve over and above the capital stock paid in, such an amount
in its discretion as it may deem advisable to fix as a reserve
fund, and may, from time to time, declare dividends from the
accumulated profits of the company in excess of the amounts so
reserved, and pay the same to the stockholders of the company,
and may also, if it deems the same advisable, declare stock
dividends of the unissued capital stock of the company.
SECTION 2. No agreement, contract or obligation (other than
checks in payment of indebtedness incurred by authority of the
Board of Directors involving the payment of monies or the credit
of the company for more than dollars) shall he made without the
authority of the Board of Directors, or of the Executive
Committee acting as such.
SECTION 3. Unless otherwise ordered by the Board of
Directors, all agreements and contracts shall be signed by the
President and the Secretary in the name and on behalf of the
company, and shall have the corporate seal thereto attached.
SECTION 4. All monies of the corporation shall be deposited
when and as received by the Treasurer in such bank or banks or
other depository as may from time to time be designated by the
Board of Directors, and such deposits shall be made in the name
of the company.
SECTION 5. No note, draft, acceptance, endorsement or other
evidence of indebtedness shall be valid or against the company
unless the same shall be signed by the President or a Vice-
President, and attested by the Secretary or an Assistant
Secretary, or signed by the Treasurer or an Assistant Treasurer,
and countersigned by the President, Vice-President, or Secretary,
except that the Treasurer or an Assistant Treasurer may, without
countersignature, make endorsements for deposit to the credit of
the company in all its duly authorized depositories.
SECTION 6. No loan or advance of money shall be made by the
company to any stockholder or officer therein, unless the Board
of Directors shall otherwise authorize.
SECTION 7. No director nor executive officer of the company
shall be entitled to any salary or compensation for any services
performed for the company, unless such salary or compensation
shall be fixed by resolution of the Board of Directors, adopted
by the unanimous vote of all the Directors voting in favor
thereof.
SECTION 8. The company may take, acquire, hold, mortgage,
sell, or otherwise deal in stocks or bonds or securities of any
other corporation, if and as often as the Board of Directors
shall so elect.
SECTION 9. The Directors shall have power to authorize and
cause to be executed, mortgages, and liens without limit as to
amount upon the property and franchise of this corporation, and
pursuant to the affirmative vote, either in person or by proxy,
of the holders of a majority of the capital stock issued and
outstanding; the Directors shall have the authority to dispose in
any manner of the whole property of this corporation.
SECTION 10. The company shall have a corporate seal, the
design thereof being as follows:
ARTICLE VII
AMENDMENT OF BY-LAWS
SECTION 1. Amendments and changes of these By-Laws may be
made at any regular or special meeting of the Board of Directors
by a vote of not less than all of the entire Board, or may be
made by a vote of, or a consent in writing signed by the holders
of 77% of the issued and outstanding capital stock.
KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned.
being the directors of the above named corporation. do hereby
consent to the foregoing By-Laws and adopt the same as and for
the By-Laws of said corporation.
IN WITNESS WHEREOF we have hereunto act our hands this 3rd.
day of October, 1995.
Magic Lantern Group, Inc.
By_______/s/ Joseph Panebianco
Joseph Panebianco, President
Agreement
This agreement is made this 31st day of October, 1999, by and
between:
Futurenet Holdings Ltd., (Seller) residing at Unit 18, Mill Mall,
Wickham's Cay I, P.O. Box 3339, Road Town, Tortola, British
Virgin Islands.
and
CasinoBuilders.com Inc. (Buyer) a Nevada Corporation residing at
2110 Vickers Drive, Suite 100, Colorado Springs, Colorado, USA.
WHEREAS Seller owns all of the outstanding shares of Cyberluck,
Curacao N.V. (Cyberluck), a Netherlands Antilles Corporation
established in Curacao, Netherlands Antilles on March 15th, 1996.
WHEREAS Seller has the authority to deliver all of the
outstanding shares of Conet N.V. (Conet), a Netherlands Antilles
Corporation established in Curacao, Netherlands Antilles on March
15th, 1996, and Global Cash N.V. (Global Cash) a Netherlands
Antilles Corporation established in Curacao, Netherlands
Antilles.
WHEREAS Buyer is desirous of purchasing all of the outstanding
shares of Cyberluck, Conet and Global Cash (The Companies) for
the sum of US$1,700,000 (ONE MILLION SEVEN HUNDRED THOUSAND U.S.
DOLLARS) (referred to as "full-payment") plus an agreed to sum of
equity shares in CasinoBuilders.com.
Parites have agreed to the above under the folowing provisions:
1. The total cash payment for purchasing The Companies is
$1,700,000 of which $450,000 has been deemed earned.
2. Buyer acknowledges it has incurred additional fees relative
to certain expenses in the amount of $250,000, which is to be
added to the full-payment price.
3. Payment Schedule: All payments to Seller are to be made and
received by the due dates at Mees Pierson Bank, Amsterdam, the
Netherlands, S.W.I.F.T. transfer code in favour of Futurenet
Holdings, Ltd.
a $350,000 to be paid prior to December 1, 1999. If not paid
by December 15, 1999 the sum of $250,000 is deemed forfeited.
Upon receipt of payment of $350,000 the shares of Conet and
Global Cash will be transferred
b $600,000 on or before February 28, 2000 shares of Cyberluck
will be transferred. If not paid and provided the sum of $350,000
has been received a three month extension shall be permitted at a
cost of $20,000 per month, after which Seller is free sell any
unsold assets to any third-party.
c Additional fees that may be owing due and earned may be paid
at any time prior to July 1, 2000 so long has the principal
amounts due have been paid.
d $350,000 due which will be divided equally between
Aristocrat Group N.V. and Crossfire Holdings (Futurenet Holdings
majority shareholders) in a trust managed by Aristocrat Gourp
anddue no later than July 1, 2000
4. In consideration of the extension of the closing date until
February 28, 2000, Buyer will issue in the name or names
designated by Seller, 100,000 shares of restricted 144 CSNO stock
effective as of the date of this agreement.
5. As collateral for the remaining $350,000, Buyer will issue
in trust designated by Seller as ARISTOCRAT GROUP A.V.V. (Aruba)
to act as Trustee and holder of said shares. Upon payment of the
remaining $350,000, and any additional fees that may become due
and earned, the trust arrangement will be dissolved and the
shares returned to the Buyer. If the remaining $350,000 and any
outstanding fees has not been paid by July 1, 2000 these shares
shall not be returned and will be equally divided by Aristocrat
and Crossfire.
6. Effective on or about November 10, 1999, Andy Ruppanner,
President of CasinoBuilders.com will become an unpaid Director of
Conet and be assigned the responsibility of its management. Steve
Randall, Executive Vice President of CasinoBuilders.com shall
have full authority in accordance with his position of Director
of Global Cash, will assume responsibility of its operations.
7. Buyer acknowledges it has had an opportunity to conduct its
due diligence with respect to this transaction.
8. Buyer is responsible for the successful completion of
employment contracts to Conet personnel.
9. Seller is responsible to provide a new lease agreement of
Suite A-4, Ara Hilltop Building, Curacao, Netherlands Antilles,
for a period of three (3) years, whereby the present users will
probably sub-lease approximately 15% of the space under a
separate agreement.
10. Seller is responsible to deliver all of the shares of The
Companies upon closing of this transaction which shall include
the written consent of all majority shareholders.
11. In the event that Seller is unable to transfer all shares of
The Companies at closing, it shall provide five (5) IP statuses
free of license fees to an entity or entities designated by
CasinoBuilders.com..
12. Buyer agrees that Seller may distribute profits earned prior
to January 1, 1999, prior to closing provided said amount does
not exceed US $26,000.
13. If the December 1, 1999 installment is not made or if full-
payment of principal is not received by Seller, a completely
operational Avatar casino free of any liens or encumbrances shall
be delivered to Seller or its nominee as Seller may direct.
This agreement may be singed in counterparts by the parties and
incorporated into one agreement. This agreement shall supercede
all prior agreements whether written or verbal and be subject to
the laws of the Netherlands Antilles.
Agreed to on this 31st day of October 1999 in Curacao,
Netherlands Antilles.
<TABLE>
<S> <C>
For Futurenet Holdings For CasinoBuilders.com
Represented by its sole Paul A. Ruppanner
Director President and CEO
Abacus Management
</TABLE>
CasinoBuilders.com Inc.
Employee Stock Option Agreement
This Agreement, is effective as of September 15, 1999, between
CasinoBuilders.com Inc., a Nevada corporation (the "Company"),
and Andy Ruppanner ("Grantee").
WHEREAS, Company has agreed to employ Grantee; and
WHEREAS, the Company desires to provide an incentive to Grantee
to encourage stock ownership and to remain an employee of the
Company; and
WHEREAS, the achievement of these goals will be assisted by the
grant of a non-qualified option to purchase shares of the
Company's Class A Common Stock, $.01 par value (the "Class A
Common Stock");
NOW, THEREFORE, the parties agree as follows:
1. Grant of Option. The Company hereby grants to Grantee, subject
to the terms and conditions herein set forth, the right and
option to purchase from the Company all or any part of an
aggregate of 2,000,000 (two million) shares of Class A Common
Stock, vesting over a three year period from the Grantee's date
of hire, at the purchase price of $35 (thirty-five cents) per
share. Such option to be exercisable as hereinafter provided.
2. Terms and Conditions. The option evidenced hereby is subject
to the following terms and conditions
(A) Expiration Date. The option shall expire on December 31,
2009.
(B) Exercise of Option.
One third of the option is vested on the dates of each of the
Grantee's annual service anniversaries for a period of three
years from the date of hire. It may be exercised, in whole or in
part, at any time (from time to time) after the third service
year anniversary, before the expiration date of the option as
provided in paragraph (a) above. A written notice shall accompany
any exercise to the Company specifying the number of shares as to
which the option is being 1 exercised. If Grantee shall so
request, shares of the Class A Common Stock purchased upon
exercise of an option may be issued in the name of Grantee or
another person.
(C) Payment of Purchase Price.
At the time of any exercise, Grantee shall deliver to the
Company, together with the notice provided in paragraph (b)
above, the full amount of the purchase price therefore either by
bank cashiers check or certified check payable to the Company or
in Class A Common Stock delivered by Grantee valued at the
Closing Price of the Class A Common Stock, or any combination of
cash or Class A Common Stock. The term "Closing Price" shall be
the last sale price on the date of the exercise of the option or,
in the case no sale takes place on such date, the average of the
high and low sales prices on the next preceding trading day, in
either case as reported by NASDAQ, or if the shares of Class A
Common Stock are not listed or admitted to trading on NASDAQ, the
average high bid and low asked prices on the principal National
Securities Exchange in which the Class A Common Stock is listed
or admitted to trading. If the Class A Common Stock is not traded
such that the Closing Price can be determined in accordance with
the preceding sentence, the Closing Price shall mean the fair
market value of the Class A Common Stock as of the last day of
the measuring period as determined by an independent investment
banker approved by the Company and Grantee.
(D) Exercise Upon Termination of Employment.
After vesting, any option granted hereunder may be exercised by
Grantee, his heirs, devises, legatees, legal representative or
assigns at any time up to and including December 31, 2009,
whether or not Grantee shall cease to be an employee of the
Company for any reason, including, without limitation,
termination by voluntary resignation, by action of the Company,
for cause, without cause, or by reason of death or disability.
(E) Transferability of Option and Shares Acquired Upon Exercise
of Option.
This option shall be transferable only by will or the laws of
descent and distribution; provided Grantee may transfer the
option only with the consent of the Company. Except as limited by
applicable securities laws, shares of Class A Common Stock
acquired upon exercise of this option hereunder shall be freely
tradeable.
(F) Adjustment of the Changes in the Stock.
(i) In the event the shares of Class A Common Stock, as
presently constituted, shall be changed into or
exchanged for a different number or kind of shares of
stock o other securities of the Company or of another
corporation (whether by reason o merger, consolidation,
recapitalization, reclassification, split, reverse
split, combination of shares, or otherwise) or if the
number of such shares of Class A Common Stock shall be
increased through the payment of a stock dividend, then
there shall be substituted for or added to each share
of Class A Common Stock theretofore appropriated or
thereafter subject or which may become subject to an
option, the number and kind of shares of stock or other
securities into which each outstanding share of Class A
Common Stock shall be so changed, or to which each such
share shall be entitled, as the case may be.
Outstanding options shal also be appropriately amended
as to price and other terms as may be necessary to
reflect the foregoing events, and immediately vested in
their entirety.
(ii) Further, in the event of a reorganization,
recapitalization, stock split, stock dividend,
combination of shares, consolidation, merger (other
than a merger or consolidation which does not result in
any reclassification, conversion, exchange or
cancellation of outstanding shares), any sale or
transfer by the Company of al or substantially all of
its assets or any tender offer or exchange offer for or
th acquisition, directly or indirectly, by any person
or group of all or a majority of th then outstanding
voting securities of the Company, rights offering, or
any othe change in the corporate structure or rights
with respect to any shares of th Company, adjustments
shall be made to the number or type of stock subject to
thi Agreement and, in order to prevent dilution or
enlargement of the rights o Grantee, to the number of
shares of Class A Common Stock subject to the option
and the type and option price of the Class A Common
Stock subject to the then outstanding option.
(G) Withholding.
Grantee may elect that shares of the Class A Common Stock valued
at the Closing Price b applied towards the payment of withholding
taxes.
(3) Registration.
The Company shall register all the shares underlying the option
on a Registration Statement with the Registration Statement filed
for the shares underlying the Company's 1999 Stock Option and
Restricted Stock Plan (the "Plan") or on Form S-8 as soon as
reasonably practical after the filing of the Registration
Statement for the Plan, but in no event later than 120 days after
the date the Class A Common Stock shall first be traded on NASDAQ
(on other than a when issued basis). If the shares underlying the
option granted hereunder have not been registered by the Company
by the date of exercise of the option, the Company shall cause
such shares to be registered on Form S-3 upon Grantee's exercise
of the option.
(4) Non-Qualified Stock Options.
The Company and Grantee acknowledge the stock options granted
hereunder shall be treated as nonqualified stock options for U.S.
federal income tax purposes.
(5) Grantee to Have No Rights as a Stockholder.
With regard to the stock underlying the option (from time to
time) Grantee shall not have the rights of a stockholder until
Grantee has timely exercise the option relating to such stock and
paid in full the option price relating thereto.
(6) Notice.
Notice to the Company shall be deemed given if in writing and
mailed to the Secretary of the Company at its principal executive
offices by first class, certified mail at the then principal
office of the Company.
(7) Governing Law.
This Agreement shall be construed and enforced in accordance
with, and governed by, the laws of the State of Nevada.
(8) Binding Agreement.
This Agreement constitutes the binding agreement of the parties
with respect to the grant of options to Grantee. The Company
represents and warrants to Grantee that this Agreement and the
grant of options hereunder have been duly authorized pursuant to
any necessary corporate action. This Agreement may not be
modified except by the mutual agreement of the parties in
writing. In the event of any overlap, inconsistency,
contradiction or any other conflict between this Agreement and
any other agreement, option plan, policy or other statement, this
Agreement shall be controlling.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year written above.
CasinoBuilders.com Inc. Employee
Andy Ruppanner Steve Randall
Chairman and CEO Director and Secretary
CasinoBuilders.com CasinoBuilders.com
Employment Agreement
Employment Agreement made effective as of the date of signing, by
and between CasinoBuilders.com a Nevada corporation, with
principal offices in Colorado Springs, Colorado ("Company"), and
Paul A. Ruppanner, residing in, Boca Raton, Florida ("Employee").
In consideration of the promises and mutual covenants herein set
forth, the Company and the Employee agree as follows:
ARTICLE 1: EMPLOYMENT TERMS
Section 1.1 Employment and Term. The Company hereby employs the
Employee, and the Employee accepts such employment, upon the
terms and conditions hereinafter set forth, for the period
("Employment Term") commencing on and as of the date of this
contract signing hereunder and terminating as provided in Section
1.7 hereof.
Section 1.2 Employment Services. The Employee shall devote his
full working time and effort to promote the business and affairs
of the Company and its Affiliates as necessary in order to enable
them to achieve their business objectives. The Employee's
principal assignment shall be to serve as President and Chief
Executive Officer. In this capacity as an executive of the
company, the Employee shall be responsible for and shall also
perform other duties and assignments, which are consistent with
his responsibilities, which may be reasonably assigned to him
from time to time by the CEO of the Company. Nothing in this
Section 1.2 shall be deemed to prevent the Employee from:
A. Investing his assets in a manner not prohibited by Section
2.5 hereof, and in such form or manner as shall not require any
material services on his part in the operations or affairs of the
companies or other entities in which such investments are made;
B. Serving on the board of directors of any other company,
subject to the prohibitions set forth in Section 2.5 hereof,
provided the Board of Directors of the Company shall have
approved such service in writing, or;
C. Engaging in religious, charitable or other community or non-
profit activities, which do not impair his ability to fulfill his
duties and responsibilities under this Agreement.
Section 1.3. Employment Compensation.
A. Base Salary - For services rendered by the Employee under
this Agreement, the Company shall pay the Employee an initial
annual salary of $200,000.00 per annum, payable in equal semi-
monthly installments (the "Base Salary"). The Base Salary shall
be subject to annual review by the Board of Directors of the
Company on or about each January 1 thereafter for so long as this
Agreement is in effect.
B. Incentive Bonus Compensation - For services rendered by the
Employee under this Agreement, the Company,, by action of the
Board of Directors, shall establish an annual executive incentive
bonus plan in which the Employee shall participate in recognition
of the Employee's contribution to the overall performance of the
Company ("Bonus"). Such Bonus shall be granted within ninety (90)
days following the conclusion of each calendar year commencing
December 31, 1999, after assessment of the Employee's and
Company's performance pursuant to the criteria, terms and
conditions of the bonus plan to be established. The amount of any
Bonus, which the Company may grant to the Employee from time to
time shall be in addition to his Base Salary and shall, under no
circumstances, be included in the Employee's Base Salary.
C. Stock Options - The Employee shall be entitled to
participate The Company's Stock Option Plan ("Option Plan").
Grants under the Option Plan shall be in amounts determined by
the Option Plan administrators or Board of Directors of the
Company. The initial amount of stock, which has been granted to
the Employee under the Company Stock Option Plan, vesting in
equal amounts at the conclusion of each of the subsequent (3)
three years, beginning June 1, 1999, is 2,000,000 shares for
founding the company.
Section 1.4 Benefits. The Employee will participate in any
employee benefit programs provided by the Company and its
Subsidiaries, if any.
Section 1.5 Withholding. The amount of payments to be made by
the Company to the Employee are set forth herein prior to the
deduction of any taxes or other amounts, and all such payments
shall be made by the Company to the Employee under this Agreement
net of any tax or other amounts required to be withheld by the
Company under applicable law.
Section 1.6 Vacation. The Employee shall be entitled to
vacation and holiday plans under the same terms and
considerations, as they are available to all Company employees,
in accordance with Company policy.
Section 1.7 Employment Term; Termination The Employment Term
shall run indefinitely, unless terminated pursuant to the
following provisions of this Section 1.7.
A. "The Employment Term" shall terminate:
1. At the death or 60 days after the Permanent Disability (as
hereinafter defined) of the Employee
2. Immediately at the election of the Company, for Cause (as
hereinafter defined), or
3. At the election of either the Company or the Employee upon
fifteen (15) days' prior written notice to the other.
B. "Permanent Disability", for purposes of this Section 1.7,
shall mean any physical or mental incapacitation which would
materially hinder the Employee from performing the
responsibilities of his assigned duties, as determined by a
medical professional of the company's choosing.
C. "Cause", for purposes of this Section 1.7, shall mean any of
the following, as determined by the management of The Company:
1. Refusal of the Employee to perform his duties hereunder or
other material breach by the Employee of the terms of this
Agreement;
2. Any substantial dishonesty by the Employee in connection
with the performance of his duties hereunder; or
3. Any conviction of, or plea of guilty by, the Employee with
respect to any crime, which conviction or plea is likely in the
reasonable judgment of the management of the Company to adversely
affect the Employee's professional reputation, the reputation of
the Company or of any other member of the Group or the ability of
the Employee to perform his duties satisfactorily hereunder.
4. The Company's right of termination pursuant to this Section
1.7 shall be in addition to, and shall not affect, its rights and
remedies under any other provisions of this Agreement or under
applicable law, and all such rights and remedies shall survive
termination of this Agreement and the employment of the Employee
hereunder. Nothing herein shall be deemed to constitute a waiver
by the Employee of any rights he may have under applicable laws.
5. In the event such termination of employment pursuant to the
terms of this Section 1.7, the Employee shall have no right to
receive any compensation or fees for any period subsequent the
date of such termination; except that:
6. In the event such termination is due to death or Permanent
Disability pursuant to Section 1.7 (b)(I), the Company shall pay
the Employee or his estate, as the case may be, a pro tanto
portion of the Bonus, if any, for the year in which such
termination occurs, a special 90 ninety day bonus severance, and
vesting of the current year's stock options;
7. In the event that such termination is made by the Company
pursuant to Section 1.7 (b)(II or III) hereof, the Company agrees
that during the Severance Period (as such term is defined below)
it will continue to pay the Employee his then current Base
Salary.
D. "Severance Period", for purposes of this Section 1.7, shall
mean the period commencing on the date of such termination and
ending: fifteen (15) calendar days thereafter.
E. "The obligations" of the Employee pursuant to Sections 2.3
and 2.4 of this Agreement shall survive the termination for any
reason of the Employment Term. The obligations of the Employee
pursuant to Section 2.5 hereof shall survive the termination of
this Agreement as provided for in Section 2.5.
1.7.1 Company Change of Control. Notwithstanding any
provisions contained in this Plan or in a Stock Option Agreement
deferring the right of employee to exercise an option, the option
(referred to in 1.3.c above) shall, at the discretion of the
Board, become fully vested and employee shall be entitled to
exercise such option, in whole or in part, during the 30-day
period following the first purchase of Shares of the Company
pursuant to a tender offer or exchange offer (other than an offer
by the Company) for all, or any part of, the Company's Shares or;
A. Commencing on the date of approval by the shareholders of
the Company of an agreement for:
1. A merger or consolidation or similar transaction in which
the Company will not survive as an independent corporation, or
2. A sale, exchange or other disposition of all or more than
75% of all the Company's assets.
ARTICLE 2: GENERAL PROVISIONS
Section 2.1. Expense Account and Allowance. The Company agrees
to reimburse the Employee for all reasonable travel,
entertainment and other documented, itemized business expenses
incurred by him in connection with the performance of his duties
under this Agreement; provided, however, that the amount
available for such travel, entertainment, and other business
expenses shall be consistent with expense reimbursement policies
adopted by the Company as in effect at the time of the incidence
of such expenses by the Employee or as may be fixed in advance by
the Company's Board of Directors.
Section 2.2. Location. The Employee shall perform services
under this agreement at the Employee's private office and at such
other location or locations reasonably specified by the Company.
The Employee shall also make himself available to make reasonable
business trips at the Company's expense, both within and outside
the United States of America, for purposes of consulting with
customers, agents, representatives and suppliers of the Company
and its Affiliates, as well as with other members of the
Company's management.
Section 2.3. Confidential Information Sensitive Company data
and information is the property of the Company, and must be
protected:
A. The Employee hereby agrees to hold and maintain confidential
and private all papers, plans, drawings, specifications, methods,
processes, techniques, shop practices, formulae, customer lists,
personnel and financial data, plans, trade secrets and all
proprietary information belonging to the Company or any Affiliate
thereof of which the Employee may have knowledge or acquire
knowledge whether prior to, during or after the termination of
the Employment Term, and to maintain as confidential and secret
any new processes, formulations, designs, devices, research data,
machines or compositions of matter of the Company or any of its
Affiliates revealed to the Employee or discovered, originated,
made or conceived by the Employee in connection with the
furnishing of employment and consulting services to the Company
or any of its Affiliates.
B. The Employee hereby agrees that he shall not at any time,
either during or subsequent to the Employment Term, disclose or
divulge to any person, other than to the Company's or any of its
Affiliates' officers and other employees as required by the
Employee's duties under this Agreement and to third parties when
required in the ordinary course of business of the company, any
of its Affiliates of which the Employee may have or acquire
knowledge. Notwithstanding anything to the contrary set forth
above, the confidentiality and nondisclosure provisions contained
in this Section 2.4 shall not apply to any information data, if
and when such information or data becomes a matter of public
knowledge through no act or omission of the Employee or to any
information or data which was already known by the Employee or
the other party in question other than as a result of a breach of
this Agreement.
C. Immediately upon the Company's request or promptly upon
termination for any reason or expiration of this Agreement, the
Employee shall deliver to the Company all memoranda, notes,
records, reports, photographs, drawings, plans, papers, or other
documents made or compiled by the Employee in the course of his
services to the Company or any of its Affiliates which are in the
possession of or under the control of the Employee, and any
copies or abstracts thereof, whether or not of a secret or
confidential nature, and all such memoranda or other documents
shall, during and after the termination of the Employment Term,
be deemed to be and shall be the property of the Company.
Section 2.4. Intellectual Property. Intellectual property is
the property of the Company, and must be protected:
A. any and all inventions, improvements, ideas and innovations,
whether or not patentable, which the Employee may invent,
discover, originate, make or conceive during his services to the
Company or any of its Affiliates, whether prior to or during the
Employment Term, either solely or jointly with others, and which
in any way relate to or are or may be used in connection with the
business of the Company or any of its Affiliates shall be, to the
extent of the Employee's interest therein, the sole and exclusive
property of the Company or such Affiliate and the Employee's
interest therein, shall be assigned by the Employee to the
Company or such Affiliate, as the case may be, or to the
Company's or such Affiliate's nominee(s). The Employee, upon the
request and at the expense of the Company, shall and shall use
the best efforts to cause any such other person(s) to promptly
and fully disclose each and all such discoveries, inventions,
improvements, ideas or innovations to the Company, the applicable
Affiliate or any nominee(s) thereof. Further, the Employee, upon
the request and at the expense of the company, shall and shall
use his best efforts to cause any such other person(s) to, assign
to the Company or the applicable Affiliate, without further
compensation therefore, all right, title and interest or
innovations which are reduced to writings, drawings or practice
within two (2) years after the termination of the Employment
Term.
B. The Employee further agrees to execute at any time, upon the
request and at the expense of the Company, for the benefit of the
Company, any of its Affiliates or any nominee(s) thereof, any and
all appropriate applications, instruments, assignments and other
documents, which the Company shall deem necessary or desirable to
protect its (or any of its Affiliates) entire right, title and
interest in and to any of the discoveries, inventions,
improvements, ideas and innovations described in Section 2.5 (a)
hereof:
C. The Employee agrees, upon the request and at the expense of
the company or any person to whom the Company or any of its
Affiliates may have granted or grants rights, to execute any and
all appropriate applications, assignments, instruments and
papers, which the Company shall deem necessary for the
procurement in the United States of America and foreign countries
of patent protection for the discoveries, inventions,
improvements, ideas or innovations to be so assigned, including
the execution of new, provisional, continuing and reissue
applications, to make all rightful oaths, to testify in any
proceeding before any governmental authority authorized to grant
or administer patent protection or before any court, and
generally to do everything lawfully possible to aid the Company,
its Affiliates and its and their successors, assigns and nominees
to obtain, enjoy and enforce proper patent protection for the
discoveries, inventions, improvements, ideas or innovations
conceived or made by him during the course of his services to the
Company or any of its Affiliates for a period of two (2) years
after the termination of the Employment Term.
Section 2.5. Non-competition. The Company and the Employee
acknowledge that Florida Law with respect to contracts entered
into subsequent to July 1, 1996 shall govern the non-competition
provisions of this Agreement. The parties t this Agreement
acknowledge further that this is a development-stage company, and
as such the compensation contacted shall way heavily on the issue
of consideration sufficient for this provision. In the event of
the Employee resigns from the Company, for the period commencing
on the date of resignation and ending one (1) year after the
termination of the Employment Term (the "Restricted Period"), the
Employee shall not:
A. Except as an officer and director of the Company and its
Affiliates, utilize intellectual property or trade secrets,
gained form the Company, which is an asset of the Company, to
engage in business directly competitive to the Company or its
Affiliates, whether directly or indirectly, for his own account
or as an employee, partner, officer, director, consultant or
holder of more than five percent (5%) of the equity interest in
any other person, firm, partnership of corporation
B. Divert to any competitor of the Company or its Affiliates
any customer of the Company or its Affiliates, or
C. Solicit or encourage any officer, key employee or consultant
of the Company or its Affiliates to leave its or their employ for
alternative employment in the Designated Industry, or hire or
offer for employment to any person to whom the Company or any of
its Affiliates has offered employment within the three (3) years
preceding the termination of the Employment Term. The Employee
will continue to be bound by the terms of this Section 2.5 until
their expiration and shall not be entitled to any compensation
with respect thereto.
D. In the event the Company terminates the Employment Term of
the Employee, the Employee shall not utilize intellectual
property or trade secrets, gained form the Company for a period
of two (2) years..
E. With respect to any ambiguity of this provision of the
Agreement it shall be construed with a presumption in favor of
the Employee.
F. Nothing contained within this provision shall be deemed to
limit Employees' ability to earn a living and to support his/her
family.
Section 2.6. Severability. If any provision of this Agreement
shall, in whole or in part, prove to be invalid for any reason,
such invalidity shall affect only the portion of such provision
which shall be invalid, and in all other respects this Agreement
shall stand as if such invalid provision, or other invalid
portion thereof, had not been a part hereof. Without limiting the
generality of the preceding sentence, if any provision of Section
2.6 hereof shall be held to be invalid or unenforceable under any
applicable law, as unreasonably restrictive in duration or
geographical area or otherwise, it is the intention of the
parties hereto that such provision shall be deemed to be
immediately amended to provide for such maximum restriction as
shall be determined t be reasonable and enforceable by the court
or other body having jurisdiction; and the Company and the
Employee expressly agree that such provision, as so amended,
shall be valid and binding.
Section 2.7. Equitable Remedies. Each of the parties hereto
acknowledges and agrees that upon any breach by the Employee of
his obligations under Section 2.3, 2.4 or 2.5 hereof, the Company
will have no adequate remedy at law, and accordingly will be
entitled to specific performance and other appropriate injunctive
and equitable relief.
Section 2.8. Assignment. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and
shall be binding upon the successors and assigns of the Company,
provided that neither this Agreement nor the rights and
obligations of the Company under this Agreement may be assigned
by the Company other than to an Affiliate of the Company. The
Employee may not assign to any other person his rights and/or
obligations under this Agreement.
Section 2.9. Amendment. This Agreement and any term, covenant,
condition or other provision hereof may be changed, waived,
discharged or terminated solely by an instrument in writing
signed by the parties hereto.
Section 2.10. Waiver of Breach. The waiver by the Company of a
breach of any provision of this Agreement by the Employee shall
not operate or be construed as a waiver of any breach by the
Employee.
Section 2.11. Notices. All notices, requests, demands, consents
and other communications in connection with this Agreement shall
be in writing or by written telecommunication and shall be
delivered personally or mailed as follows: by registered or
certified mail or by overnight courier, postage prepaid, or sent
by written telecommunication as follows:
If to the Company:
CasinoBuilders.com
Colorado Springs, CO 80918
If to the Employee:
Paul A. Ruppanner
Boca Raton, Florida
Or, at such other address as the parties hereto may from time to
time designate in writing.
Section 2.12. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of Florida.
Section 2.13. Arbitration of Disputes. Any controversy or claim
arising out of or relating to this Agreement or the breach
thereof shall be settled by arbitration in accordance with
Florida by two arbitrators, one of whom shall be appointed by the
Company, one of whom shall be appointed by the Employee and if
agreement cannot be reached, by the third arbitrator which shall
be appointed by agreement of the first two arbitrators, such
arbitration shall be conducted in Nevada in accordance with the
rules of the prevailing Arbitration Association, except with
respect to the selection of arbitrators which shall be as
provided in this Section 2.13. Judgment upon the award rendered
by the arbitrators may be entered in any court having
jurisdiction thereof. All fees and expenses of the arbitration
process shall be borne equally by the parties hereto regardless
of the final outcome, unless and to the extent the arbitrators
shall determine that under the circumstances the sharing of all
or a part of any such fees and expenses would be unjust.
Section 2.14. Entire Agreement. This Agreement embodies the
entire agreement between the Company and the Employee relating to
the subject matter hereof, and except as other wise expressly
provided herein, this Agreement shall not be affected by
reference to any other document.
Section 2.15. Headings, Etc. The headings of the sections of
this agreement have been inserted for convenience of reference
only and shall not be deemed to be a part of this Agreement.
Section 2.16. Counterparts. This Agreement may be executed in
several identical counterparts, each of which when executed by
the parties hereto and delivered shall be an original, but all of
which together shall constitute a single instrument. In making
proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
Section 2.17. Additional Defined Terms:
A. "Affiliate" means any person, corporation or other business
entity that directly or indirectly controls, or is controlled by,
or is under common control with another person, corporation or
business entity.
B. "Subsidiary" means any corporation fifty percent (50%) or
more of the capital stock of which having ordinary voting power
for the election of directors is owned directly or indirectly by
another corporation or business entity.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of this written date: May 22, 1999.
Accepted and Agreed to:
Employee Signature /s/ Paul A. Ruppanner
Employee Name Paul A. Ruppanner Social Security
####-##-####
Company Officer Signature /s/ Steve Randall,
Secretary
Company Officer Name Steve Randall, Secretary
Employment Agreement
Employment Agreement made effective as of the date of signing, by
and between CasinoBuilders.com a Nevada corporation, with
principal offices in Colorado Springs, Colorado ("Company"), and
Steve Randall, residing in, Delray Beach, Florida ("Employee").
In consideration of the promises and mutual covenants herein set
forth, the Company and the Employee agree as follows:
ARTICLE 1: EMPLOYMENT TERMS
Section 1.1 Employment and Term. The Company hereby employs the
Employee, and the Employee accepts such employment, upon the
terms and conditions hereinafter set forth, for the period
("Employment Term") commencing on and as of the date of this
contract signing hereunder and terminating as provided in Section
1.7 hereof.
Section 1.2 Employment Services. The Employee shall devote his
full working time and effort to promote the business and affairs
of the Company and its Affiliates as necessary in order to enable
them to achieve their business objectives. The Employee's
principal assignment shall be to serve as Executive Vice-
President and Chief Operating Officer. In this capacity as an
executive of the company, the Employee shall be responsible for
and shall also perform other duties and assignments, which are
consistent with his responsibilities, which may be reasonably
assigned to him from time to time by the CEO fo the Company.
Nothing in this Section 1.2 shall be deemed to prevent the
Employee from:
D. Investing his assets in a manner not prohibited by Section
2.5 hereof, and in such form or manner as shall not require any
material services on his part in the operations or affairs of the
companies or other entities in which such investments are made;
E. Serving on the board of directors of any other company,
subject to the prohibitions set forth in Section 2.5 hereof,
provided the Borad of Directors of the Company shall have
approved such service in writing, or;
F. Engaging in religious, charitable or other community or non-
profit activities, which do not impair his ability to fulfill his
duties and responsibilities under this Agreement.
Section 1.3. Employment Compensation.
D. Base Salary - For services rendered by the Employee under
this Agreement, the Company shall pay the Employee an initial
annual salary of $175,000.00 per annum, payable in equal semi-
monthly installments (the "Base Salary"). The Base Salary shall
be subject to annual review by the Board of Directors of the
Company on or about each January 1 thereafter for so long as this
Agreement is in effect.
E. Incentive Bonus Compensation - For services rendered by the
Employee under this Agreement, the Company,, by action of the
Board of Directors, shall establish an annual executive incentive
bonus plan in which the Employee shall participate in recognition
of the Employee's contribution to the overall performanc eof the
Company ("Bonus"). Such Bonus shall be granted within ninety (90)
days following the conclusion of each calendar year commencing
December 31, 1999, after assessment of the Employee's and
Company's performance pursuant to the criteria, terms and
conditions of the bonus plan to be established. The amount of any
Bonus, which the Company may grant to the Employee from time to
time shall be in addition to his Base Salary and shall, under no
circumstances, be included int eh Employee's Base Salary.
F. Stock Options - The Employee shall be entitled to
participate The Company's Stock Option Plan ("Option Plan").
Grants under the Option Plan shall be in amounts determined by
the Option Plan administrators or Board of Directors of the
Company. The initial amount of stock, which has been granted to
the Employee under the Company Stock Option Plan, vesting in
equal amounts at the conclusion of each of the subsequent (3)
three years, beginning June 1, 1999, is 2,000,000 shares for
founding the company.
Section 1.4 Benefits. The Employee will participate ina nay
employee benefit programs provided by the Company and its
Subsidiaries, if any.
Section 1.5 Withholding. The amount of payments to be made by
the Company to the Employee are set forth herein prior to the
deduction of any taxes or other amounts, and all such payments
shall be made by the Company t othe Employee under this Agremeent
net of any tax or other amounts required to be withheld by the
Company under applicable law.
Section 1.6 Vacation. The Employee shall be entitled to
vacation and holiday plans under the same terms and
considerations, as they are available to all Company employees,
in accordance with Company policy.
Section 1.7 Employment Term; Termination The Employment Term
shall run indefinitely, unless terminated pursuant to the
following provisions of this Section 1.7.
F. "The Employment Term" shall termintate:
1. At the death or 60 days after the Permanent Disability (as
hereinafter defined) of the Employee
2. Immediately at the election of theCompnay, for Cause (as
hereinafter defined), or
3. At the election of either the Company or the Employee upon
fifteen (15) days' prior written notice to the other.
G. "Permanent Disability", for purposes of this Seciton 1.7,
shall mean any physical or mental incapacitation which would
materially hinder the Employee from performing the
responsibilities of his assigned duties, as determined by a
medical professional of the company's choosing.
H. "Cause", for purposes of this Section 1.7, shall mean any of
the following, as determined by the management of The Company:
1. Refusal of the Employee to perform his duties hereunder or
other material breach by the Employee of the terms of this
Agreement;
2. Any substantial dishonesty by the Employee in connection
with the performance of his duties hereunder; or
3. Any convictio nfo, or plea of guilty by, the Employee with
respect to any crime, which conviction or plea is likely in the
reasonable judgment of the management of the Company to adversely
affect the Employee's professional reputation, the reputation of
the Company or of any other member of the Group or the ability of
the Employee to perform his duties satisfactorily hereunder.
4. The Company's right of termination pursuant to this Section
1.7 shall be in addition to, and shall not affect, its rights and
remedies under any other provisions of this Agreement or under
applicable law, and all such rights and remedies shall survive
termination of this Agreement and the employment of the Employee
hereunder. Nothing herein shall be deemed to constitute a waiver
by the Employee of any rights he may have under applicable laws.
5. In the event such termination of employment pursuant to the
terms of this Section 1.7, the Employee shall have no right to
receive any compensation or fees for any period subsequent the
date of such termination; except that:
6. In the event such termination is due to death or Permanent
Disability pursuant to Section 1.7 (b)(I), the Company shall pay
the Employee or his estate, as the case may be, a pro tanto
portion of the Bonus, if any, for the year in which such
termination occurs, a special 90 ninety day bonus severance, and
vesting of the current year's stock options;
7. In the event that such termination is made by the Company
pursuant to Section 1.7 (b)(II or III) hereof, the Company agrees
that during the Severance Period (as such term is defined below)
it will continue to pay the Employee his then current Base
Salary.
I. "Severance Period", for purposes of this Section 1.7, shall
mean the period commencing on the date of such termination and
ending: fifteen (15) calendar days thereafter.
J. "The obligations" of the Employee pursuant to Sections 2.3
and 2.4 of this Agreement shall survive the termination for any
reason of the Employment Term. The obligations of the Employee
pursuant to Section 2.5 hereof shall survive the termination of
this Agreement as provided for in Section 2.5.
1.7.2 Company Change of Control. Notwithstandig any
provisions contained in this Plan or in a Stock Option Agreement
deferring the right of employee to exercise an option, the option
(referred to in 1.3.c above) shall, at the discretion of the
Board, become fully vested and employee shall be entitled to
exercise such option, in whole or in part, during the 30-day
period following the first purchase of Shares of the Company
pursuant to a tender offer or exchange offer (other than an offer
by the Company) for all, or any part of, the Company's Shares or;
B. Commencing on the date of approval by the shareholders of
the Company of an agreement for:
1. A merger or consolidation or similar transaction in which
the Company will not survive as an independent corporation, or
2. A sale, exchange or other disposition of all or more than
75% of all the Company's assets.
ARTICLE 2: GENERAL PROVISIONS
Section 2.1. Expense Account and Allowance. The Company agrees
to reimburse the Employee for all reasonable travel,
entertainment and other documented, itemized business expenses
incurred by him in connection with the performance of his duties
under this Agreement; provided, however, that the amount
available for such travel, entertainment, and other business
expenses shall be consistent with expense reimbursement policies
adopted by the Company as in effect at the time of the indidence
of such expenses by the Employee or as may be fixed in advance by
the Company's Board of Directors.
Section 2.2. Location. The Employee shall perform services
under this agreement at the Employee's private office and at such
other location or locations reasonably specified by the Company.
The Employee shall also make himself available to make reasonable
business trips at the Company's expense, both within and outside
the United States of America, for purposes of consulting with
customers, agents, representatives and suppliers of the Company
and its Affiliates, as well as with other members of the
Company's management.
Section 2.3. Confidential Information Sensitive Company data
and information is the property of the Company, and must be
protected:
D. The Employe hereby agrees to hold and maintain confidential
and private all papers, plans, drawings, specifications, methods,
processes, techniques, shop practices, formulae, customer lists,
personnel and financial data, plans, trade secrets and all
proprietary information belonging to the Company or any Affiliate
therof of which the Employee may have knowledge or acquire
knowledge whether prior to, during or after the termination fo
the Employement Term, and to maintain as confidential and secret
any new processes, formulations, designs, devices, research data,
machines or compositions of matter of the Company or any of its
Affiliates revealed to theEmployee or discovered, originated,
made or conceived by the Employee in connection with the
furnishing of employement and consulting services to the Company
or any of its Affiliates.
E. The Employee hereby agrees that he shall not at any time,
either during or subsequent to the Employement Term, disclose or
divulge to any person, other than to the Company's or any of its
Affiliates' officers and other employees as required by the
Employee's duties under this Agreemetn and to third parties when
required in the ordinary course of business of the company, any
of its Affiliates of which the Employee may have or acquire
knowledge. Notwithstanding anything to the contrary set forth
above, the confidentiality and nondisclosure provisions contained
in this Section 2.4 shall not apply to any information data, if
and when such information ro data becomes a matter of public
knowledge through no act or omission of the Employee or to any
information or data which was already known by the Employee or
the other party in question other than as a result of a breach of
this Agreement.
F. Immediately upon the Company's request or promptly upon
termination for any reason or expiration of this Agreement, the
Employee shall deliver to the Company all memoranda, notes,
records, reports, photographs, drawings, plans, papers, or other
documents made or comiled by the Employee in the course of his
services to the Company or any of its Affiliates which are in the
possession of or under the control of the Employee, and any
copies or abstracts thereof, whether or not of a secret or
confidential nature, and all such memoranda or other documents
shall, during and after the termination of the Employement Term,
be deemed to be and shall be the property of the Company.
Section 2.4. Intellectual Property. Intellectual property is
the property of the Company, and must be protected:
D. any and all inventions, improvements, ideas and innovations,
whether or not patentable, which the Employee may invent,
discover, originate, make or conceive during his servides to the
Company or any of its Affiliates, whether prior to or during the
Employement Term, either solely or jointly withothers, and which
in any way relate to or are or may be used in connection with the
business of the Company or any of its Affiliates shall be, to the
extent of the Employee's interest therein, the sole and exclusive
property of the Company or such Affiliate and the Employee's
interest therein, shall be assigned by the Employee to the
Compnay or such Affiliate, as the case may be, or to the
Company's or such Affiliate's nominee(s). The Employee, upon the
request and at the expense fo the Company, shall and shall use
the best efforts to cause any such other person(s) to promptly
and fully disclose each and all such discoveries, inventions,
improvements, ideas or innovations to the Company, the applicable
Affiliate or any nominee(s) thereof. Further, the Employee, upon
the request and at the expense of the company, shall and shall
use his best efforts to cause any such other person(s) to, assign
to the Company or the applicable Affiliate, without further
compensation therefore, all right, title and interest or
innovations which are reduced to writings, drawings or practice
within two (2) years after the termination of the Employment
Term.
E. The Employee further agrees to execute at any time, upon the
request and at the expense of the Company, for the benefit of the
Company, any of its Affiliates or any nominee(s) thereof, any and
all appropriate applications, instruments, assignments andother
documents, which the Company shall deem necessary or desirable to
protect its (or any of its Affiliates) entire right, title and
interest in and to any of the discoveries, inventions,
improvements, ideas and innovations described in Section 2.5 (a)
hereof:
F. The Employee agrees, upon the request and at the expense of
the company or any person to whom the Company or any of its
Affiliates may have granted or grants rights, to execute any and
all appropriate applications, assignements, instruments and
papers, which the Company shall deem necessary for the
procurement in the United States of America and foreign countries
of patent protection for the discoveries, inventions,
improvements, ideas or innovations to be so assigned, including
the execution of new, provisional, continuing and reissue
applications, to make all rightful oaths, to testify in any
proceeding before any governmental authority authorized to grant
or administ patent protection or before any court, and generally
to do everything lawfully possible to aid the Company, its
Affiliates and its and their successors, assigns and nominees to
obtain, enjoy and enforce proper patent protection for the
discoveries, inventions, improvements, ideas or innovations
conceived or made by him during the course of his services to the
Company or any of its Affiliates for a period of two (2) years
after the termination of the Employment Term.
Section 2.5. Non-competition. The Company and the Employee
acknowledge that Florida Law with respect to contracts entered
into subsequent to July 1, 1996 shall govern the non-competition
provisions of this Agreement. The parties t this Agreement
acknowledge further that this is a development-stage company, and
as such the compensation contacted shall way heavilyon the issue
of consideration sufficient for this provision. In the event fo
the Employee resigns from the Company, for the period commencing
on the date of resignation and ending one (1) year after the
termination of the Employment Term (the "Restricted Period"), the
Employee shall not:
G. Except as an officer and director of the Company and its
Affiliates, utilize intellectual property or trade secrets,
gained form the Company, which is an asset of the Company, to
engage in business directly competitive to the Company or its
Affiliates, whether directly or indirectly, for his own account
or as an employee, partner, officer, director, consultant or
holder of more than five percent (5%) of the equity interst in
any toher person, firm, partnership of corporation
H. Divert to any competitor of the Company or its Affiliates
any customer of the Company or its Affiliates, or
I. Solicit or encourage any officer, key employee or consultant
fo the Company or its Affiliates to leave its or their employ for
alternative emplyment in the Designated Industry, or hire or
offer for employment to any person to whom the Company or any of
its Affiliates has offered emplyment within the three (3) years
preceding the termination of the Employment Term. The Employee
will continue to be bound by the terms of this Section 2.5 until
their expiration and shall not be entitled to any compensation
with respect thereto.
J. In the event the Company terminates the Employment Term of
the Employee, the Employee shall not utilize intellectual
property or trade secrets, gained form the Company for a period
of two (2) years..
K. With respect to any ambiguity of this provision fo the
Agremeent it shall be construed with a presumption in favor of
the Employee.
L. Nothing contained within this provision shall be deemed to
limit Employees' ability to earn a living and to support his/her
family.
Section 2.6. Severability. If any provision of this Agreement
shall, in whole or in part, prove to be invalid for any reason,
such invalidity shall affect only the portion of such provision
which shall be invalid, and in all other respects this Agreement
shall stand as if such invalid provision, or other invalid
portion thereof, had not been a part hereof. Without limiting the
generality of the preceding sentence, if any provision of Section
2.6 hereof shall be held to be invalid or unenforceable under any
applicable law, as unreasonably restrictive in duration or
geographical area or otherwise, it is the intention of the
parties hereto that such provision shall be deemed to be
immediately amended to provide for such maximum restriction as
shall be determined t be reasonable and enforceable by the court
or other body having jurisdiction; and the Company and the
Employee expressly agree that such provision, as so amended,
shall be valid and binding.
Section 2.7. Equitable Remedies. Each of the parties hereto
acknowledges and agrees that upon any breach by the Employee of
his obligations under Section 2.3, 2.4 or 2.5 hereof, the Company
will have no adequate remedy at law, and accordingly will be
entitled to specific performance and other appropriate unjunctive
and equitable relief.
Section 2.8. Assignment. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and
shall be binding upon the successors and assigns fo the Company,
provided that neither this Agreement nor the rights and
obligations fo the Company under th is Agreement may be assigned
by the Company other than to an Affiliate of the Company. The
Employee may not assign to any other person his rights and/or
obligations under this Agreement.
Section 2.9. Amendment. This Agreement and any term, covenant,
condition or other provision hereof may be changed, waived,
discharged or terminated solely by an instrument in writing
signed by the parties hereto.
Section 2.10. Waiver of Breach. The waiver by the Company of a
breach of any provision of this Agreement by the Employee
shallnot operate or be construed as a waiver of any breach by the
Employee.
Section 2.11. Notices. All notices, requests, demands, consents
and other communications in connection with this Agreement shall
be in writing or by written telecommunication and shall be
delivered personally or mailed as follows: by registered or
certified mail or by overnight courier, postage prepaid, or sent
by written telecommunication as follows:
If to the Company:
CasinoBuilders.com
Colorado Springs, CO 80918
If to the Employee:
Steve Randall
Delray Beach, Florida
Or, at such other address as the parties hereto may from time to
time designate in writing.
Section 2.12. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of Florida.
Section 2.13. Arbitration of Disputes. Any controversy or claim
arising out of or relating to this Agreement or the breach
thereof shall be settled by arbitration in accordance with
Florida by two arbitrators, one of whom shall be appointed by the
Company, one of whom shall be appointed by the Employee and if
agreement cannot be reached, by the third arbitrator which shall
be appointed by agreement of the first two arbitrators, such
arbitration shall be conducted in Nevada in accordance with the
rules of the prevailing Arbitration Association, except with
respect to the selection of arbitrators which shall be as
provided in this Section 2.13. Judgment upon the award rendered
by the arbitrators may be entered in any court having
jurisdiction thereof. All fees and expenses of the arbitration
process shall be borne equally by the parties hereto regardless
of the final outcome, unless and to the extent the arbitrators
shall determine that under the circumstances the sharing of all
or a part of any such fees and expenses would be unjust.
Section 2.14. Entire Agreement. This Agreement embodies the
entire agreement between the Company and the Employee relating to
the subject matter hereof, and except as other wise expressly
provided herein, this Agreement shall not be affected by
reference to any other document.
Section 2.15. Headings, Etc. The headings of the sections of
this agreement have been inserted for convenience of reference
only and shall not be deemed to be a part of this Agreement.
Section 2.16. Counterparts. This Agreement may be executed in
several identical counterparts, each of which when executed by
the parties hereto and delivered shall be an original, but all of
which together shall constitute a single instrument. In making
proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
Section 2.17. Additional Defined Terms:
C. "Affiliate" means any person, corporation or other business
entity that directly or indirectly controls, or is controlled by,
or is under common control with another person, corporation or
business entity.
D. "Subsidiary" means any corporatio fifty percent (50%) or
more of the capital stock of which having ordinary voting power
for the election of directors is owned directly or indirectly by
another corporation or business entity.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of this written date: May 22, 1999.
Accepted and Agreed to:
Employee Signature /s/ Steve Randall
Employee Name Steve Randall Social Security #041-
36-6675
Date: August 2, 1999
Subject: Letter of Intent (LOI) for CasinoBuilders.com to
partner with Fennell Promotions Inc.
This Letter of Intent (LOI) is intended to outline the framework
and terms under which CasinoBuilders.com Inc., (CB) would work in
partnership with Fennell Promotions, (Fennell), subject to
concurrence by both boards.
Although signing this letter indicates sincere intent by both
parties to work rapidly towards completing the acquisition, the
terms within this document are not legally binding on either
party. It is assumed that this LOI will lead to a signed
contract between the two companies by August 15, 1999.
Purpose:
The purpose of the partnership is to advance the business success
of both companies through synergistic operations and common
market focus.
Concept:
Fennell is a premier loyalty rewards marketing company,
based in Atlanta, GA., serving the Fortune 500 and other vertical
markets.
CB (publicly traded company NASDAQ OTCBB Symbol "CSNO") is
an internet marketing and services company focused on the
burgeoning Internet gaming industry, providing management
consulting and comprehensive operational services to new and
existing members of the internet gaming community.
Fennell and CB will partner to market the "Supreme
Privileges Awards Program" to the Internet gaming industry under
the brand "E-Players Club". Additionally, the parties will
cooperate with each other to advance the general business success
of each other.
Operations:
An exclusive marketing agreement developed by Fennell, is signed
for Internet gaming products. Target 8/15/99.
General responsibilities follow:
Fennell:
Shall provide all award management operations and support,
such as:
CB unique web page access to "Supreme Privileges"
Award inventory
Award claiming process
Etc.
Shall provide program training materials to CB
Shall provide exclusive marketing rights to the Internet
gaming industry
Shall provide an operational point of contact for CB
Shall provide a unique privately branded web page for each
program activated.
Casino Builders:
Shall incur and accept all internal marketing and sales
costs
Shall contract directly with its clients
Shall collect all monies and point information and forward
same to Fennell
Shall provide market requirements information to Fennell
Shall conduct business in a highly professional manner
Shall appoint a dedicated sales resource to aggressively
exploit this market opportunity
Sales and Pricing Assumptions:
Fennell will develop and CB will sell two program levels
(Standard and Platinum)
CB will charge an implementation fee of $5,000 for Standard
and $10,000 for Platinum point programs
CasinoBuilders.com will receive 8% commission on all points
sold from Fennell
Points will be sold to CB at .025 each
The attached awards shall be part of the E-Players Program
(Appendix A) with CB determining which awards from the
Fennell list supplied shall be in the Standard and Platinum
Programs
CB shall remit to Fennell .0025 per point issued with the
balance billed to CB upon redemption.
CB may determine an expiration date of any points earned.
Summary:
Both parties are committed to the successful completion of this
partnership.
Both parties are committed to concluding this important process
with professionalism and integrity.
INDEPENDENT MANAGEMENT CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered
into this 17th day of May, 1999, by and between LUGION
ASSOCIATES, LTD. (the "Consultant") and CASINOBUILDERS.COM, INC.
(the "Client").
WHEREAS, Consultant is in the business of providing management
consulting and advisory services; and
WHEREAS, the Client deems it to be in its best interest to retain
Consultant to render to the Client management consulting and
advisory services, and whereas, the Consultant is ready, willing
and able to render such consulting and advisory services to the
Client as hereinafter described on the terms and conditions more
fully set forth below.
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth in this Agreement, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows.
1. Consulting Services: The client hereby retains the
Consultant as an independent consultant to the Client, and the
Consultant hereby accepts and agrees to such retention. The
Consultant shall render to the Client such services as set forth
on Exhibit A, attached hereto and by reference incorporated
herein.
It is acknowledge and agreed by the Client that
Consultants carries no professional licenses, other
than any that may be listed on Exhibit A; and is not
rendering legal advice or performing accounting
services, nor acting as an investment advisor or
broker/dealer within the meaning of applicable state
and federal securities laws. It is further acknowledged
and agreed by the client that the consulting advisory
services to be performed to the Client hereunder shall
not be rendered in connection with the offer and sale
of Securities in a capital raising transaction.
2. Independent Contractor: Consultant agrees to perform its
consulting duties hereto as an independent contractor. Nothing
contained herein shall be considered to as creating an employer-
employee relationship between the parties to this Agreement. The
Client shall not be liable to third parties for the acts of
Consultant or its servants or agents, in performing the
consulting duties hereunder, except in the cases of damages or
injuries acting on behalf of the Client. The Client shall not
make social security, workers compensation or employment
insurance payments on behalf of Consultant. The parties hereto
acknowledge and agree that Consultant cannot guarantee the
results or effectiveness of any of the services rendered or to be
rendered by Consultant hereunder. Rather, Consultant shall use
its best efforts to conduct its services and affairs in a
professional manner and in accordance with good industry
practice.
3. Time, Place and Manner of Performance: The Consultant shall
be available for advice as and counsel to the officers and
directors of the Client at such reasonable and convenient times
and places as may be mutually agreed upon. Except as aforesaid,
the time, place and manner of performance of the services
hereunder, including the amount of time to be allocated by
Consultant in any specific service shall be determined at the
sole discretion of the Consultant.
4. Term of Agreement: The term of this Agreement shall be one
(1) year, commencing on the date of this Agreement, both subject
to prior termination as hereinafter provided.
5. Compensation: In full consideration of the services to be
provided for the Client by Consultant as fully set forth in
Exhibit A, the Client agrees to compensate Consultant in the
manner set forth in exhibit B.
6. Expenses: The Consultant will be responsible for all
expenses incurred.
7. Termination:
A) Consultant's relationship with the Client hereunder may be
terminated at any time by mutual written agreement of the parties
hereto.
B) This Agreement shall terminate upon the dissolution,
bankruptcy or insolvency of the Client.
C) This Agreement may be terminated by either party upon giving
written notice to the other party if the other party is in
default hereunder and such default is not cured within fourteen
(14) business days of written notice of such default.
D) Without excusing the Client's obligations under Section 5
herein above, Consultant shall have the right and discretion to
terminate this Agreement should the Client violate any law,
ordinance, permit or regulation of any government entity, except
for violations which either singularly or in the aggregate do not
have or will not have a material adverse effect on the operations
of the Client.
E) Without excusing Consultant's obligations under Section 9
herein below the provisions of this Agreement relating to written
notice in any of the following shall occur:
(i) Any willful breach of duty or habitual neglect of duty by
Consultant;
(ii) Any material breach by Consultant of the obligations in
section 9.
8. Work Product: It is agreed that all information and
material produced for the Client shall be the property of the
Consultant, free and clear of all claims thereto by the Client,
and the Client shall retain no claim of authorship therein.
9. Confidentiality: The Consultant recognized and acknowledges
that it has and will have access to certain confidential
information of the Client and its affiliates that are valuable,
special and unique assets and property of the Client and such
affiliates. The Consultant will not, during the term of this
Agreement, disclose, without the prior written consent or
authorization of the Client, any of such information to any
person for any reason or purpose whatsoever. In this regard, the
Client agrees that such authorization or consent to disclose may
be conditioned upon the disclosure being made pursuant to a
secrecy agreement, protective order, provision of statute, rule,
regulation or procedure under which information is to be
disclosed or in compliance with the terms of a judicial order or
administrative process.
10. Conflict of Interest: The consultant shall be free to
perform services for other persons. The Consultant will notify
the client of its performance of consultant services for any
other person, which could conflict with its obligations under the
Agreement. Upon receiving such notice the Client may terminate
this Agreement or consent to the Consultant's outside consulting
activities; failure to terminate this Agreement within seven (7)
days of receipt of written notice of conflict, shall constitute
the Client's ongoing consent to the Consultant's outside
consulting services.
11. Disclaimer of Responsibility for Acts of the Client: The
obligations of Consultant described in this Agreement consist
solely of the furnishing of information and advice to the Client
in the form of services. In no event shall Consultant be required
by this Agreement to represent or make management decisions for
the Client. All final decisions with respect to acts and
omissions of the Client or any affiliates and subsidiaries, shall
be that of the Client or such affiliates and subsidiaries, and
Consultant shall under no circumstances be liable for any expense
incurred or loss suffered by the Client as a consequence of such
acts or omissions.
12. Indemnity by the Client: The Client shall protect, defend,
indemnify and hold Consultant and its assigns and attorney,
accountants, employees, officers and directors harmless from and
against all losses, liabilities, damages, judgments, claims,
counterclaims, demands, actions. Proceedings, costs and expenses
(including reasonable attorney fees) of every kind and character
resulting from, relating to or arising out of (a) the inaccuracy,
non-fulfillment or breach of any representation, warranty,
covenant or agreement made by the Client herein; or (b) any legal
action, including any counterclaim, representation, warranties,
covenant or agreement made by the Client herein; or (c) neglect
or willful misconduct occurring during the terms thereof with
respect to any of the decisions made by the Client.
13. Notices: Any notices required or permitted to be given
under the terms of this agreement shall be considered to be
sufficient if in writing and delivered or sent by registered or
certified mail to the office of each party.
14. Waiver of breach: Any waiver by either party of a breach of
any provision of this Agreement by the other party shall not
operate or be construed as a waiver of any subsequent breach by
any party.
15. Assignment: This Agreement and the rights and obligations
of the Consultant hereunder shall not be assignable without the
written consent of the Client.
16. Applicable Law: It is the intention of the parties hereto
that this Agreement and the performance hereunder and all suits
and special proceedings hereunder be construed in accordance with
and under and pursuant to the laws of the State of Nevada and
that in any action, special proceeding or other proceeding that
may be brought arising out of, in connection with or by reason of
this Agreement, the laws of the State of Nevada shall be
applicable and shall govern to the exclusion of the law of any
other forum, without regard to the jurisdiction on which any
action or special proceeding may be instituted.
17. Severability: All agreements and covenants contained herein
are severable, and in the event any of them shall be held to be
invalid by any competent court, the Agreement shall be
interpreted as if such invalid agreements or covenants were not
contained herein.
18. Entire Agreement: This Agreement constitutes and embodies
the entire understanding and agreement of the parties and
supersedes and replace all prior understanding, agreements and
negotiations between the parties.
19. Waiver and Modification: Any waiver, alteration or
modification of any or parts of this Agreement shall be valid
only if made in writing and signed by the parties hereto. Each
party hereto may waive any of its rights hereunder without
effecting a waiver with respect to any subsequent occurrences or
transactions hereof.
20. Binding Arbitration: As concluded by the parties hereto
upon the advice of counsel, and as evidenced by the signature of
the parties hereto, any controversy between the parties hereto
involving the construction or application of any of the terms,
covenants or conditions of this agreement, shall on the written
request of one party served upon the other, be submitted to
arbitration.
21. Counterparts and Facsimile Signatures: This Agreement may
be executed simultaneously in two or more counterparts, each of
which shall be deemed an original but all of which taken together
shall constitute one and the same instrument. Execution and
delivery of this Agreement by exchange of facsimile copies
bearing the facsimile signature of a party hereto shall
constitute a valid and binding execution and delivery of this
Agreement by such party. Such facsimi8le copies shall constitute
and be enforceable original documents.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the day and year first above
written.
CONSULTANT:
LUGION ASSOCIATES, LTD.
By: /s/ Dan Luther
Dan Luther, President
CLIENT:
By: /s/ Paul A. Ruppanner
Paul A. Ruppanner, President
EXHIBIT A
Consultant agrees to provide the following services to clients:
Consultant shall provide services to Client as an independent
management consultant. The Consultant shall make itself available
to consult with the board of directors, officers, employees,
representatives and agents of the Client at reasonable times,
concurring matters pertaining to the overall business and
financial operations of the Client as well as the organization of
the administrative staff of the Client, the fiscal policy of the
Client, and in general, concerning any problem of importance
concerning the business affairs of the Client. Consultant may at
the request of the Client, assist in the preparation of written
reports on financial, accounting or marketing matters, review
final information, analyze markets and report to the Client's
chief Executive Officer, President, Vice Presidents or treasurer
on proposed investment opportunities, and develop short and long
term strategic business plans. In addition, Consultant shall
provide liaison services to the Client with respect to the
Client's relationships with unaffiliated third parties.
Consultant will not perform any activities that could subject
Consultant to any allegation of violations of Federal or
applicable State securities law.
EXHIBIT B
Client agrees to compensate consultant as follows:
For all services rendered by Consultant under this Agreement,
Client shall provide 250,000 shares of free trading
CasinoBuilders.com, Inc. common stock.
The Client shall provide 50,000 shares upon acceptance of this
Agreement and the remaining shares as follows:
At the end of each quarter of the contract term 50,000 free
trading common shares of CasinoBuilders.com, Inc. stock will be
disbursed to Consultant.
With regard to debt financing, equity financing, mergers or
acquisitions, all of the above will be dealt with on a per deal
basis, submitted in writing by Consultant, and agreed to by and
between the Consultant and the Client as to any additional
compensation or bonuses.
The above compensation is for a one (1) year period.
Initials:
DL /s/DL /s/PAR
David C. Luther Paul A. Ruppanner
Software License and Services Agreement
This AGREEMENT, entered into the 9th day of September, 1999, by
and between The HomeBingo Network, Inc., a Pennsylvania
Corporation (THBN), and CasinoBuilders.com, Inc., a Nevada
corporation, (CasinoBuilders) hereinafter collectively referred
to as the Parties.
WITNESSETH THE FOLLOWING:
The Parties to this Agreement make the following Representations
with the full expectation that the other Parties will rely upon
these representation for the purposes of entering this Agreement.
In the event that any of the following Representations are not
true, the offended Party may choose to terminate its obligations
under this Agreement.
WHEREAS, THBN has created certain unique and proprietary software
for Online Bingo games known and trademarked as "8 Draw Bingo"
that includes a pool of 999 different Bingo cards, a prize paying
structure that awards prize amounts which are proportional to the
amount bet, which prize amounts decrease as each Bingo number
between the fourth and the eighth is drawn, a method of ending
every game after eight numbers have been drawn regardless of how
many players have called bingo, and which software also includes
other unique and proprietary features, and
The U.S. Patent and Trademark office has verbally indicated its
approval and its intent to publish for objection
WHEREAS, THBN will create a version of "8 Draw Bingo" exclusively
for CasinoBuilders.com, to be known as "Penny Bingo", and
WHEREAS, CasinoBuilders.com has entered into an agreement to
purchase CYBERLUCK CURACAO N.V., which currently provides for the
operation of licensed games of change (casino games) from the
Netherlands Antilles, and
WHEREAS, CasinoBuilders.com has provided documentation to THBN
that CYBERLUCK is authorized by the central government of the
Netherlands Antilles to operate, or to further authorize the
operation of certain games of change via service lines and over
the Internet from Curacao, and
WHEREAS, CasinoBuilders.com markets and promotes and develops
various services and online entertainment products for the
Internet gaming industry worldwide, and
WHEREAS, Pennybingo.net is a registered service mark of
CasinoBuilders.com, and
WHEREAS, Pennybingo.com is a registered Domain fo THBN, and
WHEREAS, The Parties herein desire to cooperate with each other
for the purpose of causing the software and technology developed
by THBN to be sub-licensed by CasinoBuilders.com to others who
will use said software, and
WHEREAS, it is the intention of The Parties to install, maintain
and operate a central computer server "hub" in Curacao,
Netherlands Antilles which will enable multiple entities to
operate "I Draw Bingo" and/or Penny Bingo" on the Internet in
accordance with the laws of the Netherlands Antilles.
DEFINITION - Net win is defined as the amount of the gaming
revenue entered less the amount paid out as winnings.
NOW THEREFORE, in reliance upon the foregoing Representation, and
in consideration of the efforts of the parties, and other good
and valuable consideration herewith exchanged, it is mutually
agreed as follows:
1. THBN shall transfer its registered Domain Pennybingo.com to
CasinoBuilders.com no later than October 1, 1999, for the payment
of 10,000 shares of restricted CSNO equity shares.
2. THBN shall provide the requirements of a fully configured
Internet server to CasinoBuilders.com who shall arrange for this
service to be purchased and installed in Curacao at its own cost.
3. Said server shall be configured remotely by THBN in such a
manner as to comply with the specifications of CasinoBuilders.com
and Cyberluck.
4. Said server shall contain a "free play" version and a "cash
play" version of "Penny Bingo" which shall be unified in such a
manner that the prizes awarded at the "free play" version may be
claimed only by visiting the "cash play" version. The "cash play"
version shall include a script provided by Cyberluck to connect
to Global Cash, Inc. the E-commerce provider designated by
Cyberluck.
5. THBN shall takes such steps as may be required to integrate
Global Cash e-commerce into "I Draw and/or Penny Bingo".
6. Said server shall be capable of hosting multiple web sites
for sub-licenses of THBN's software only as authorized by
Cyberluck.
7. CasinoBuilders.com will, at their own expense, purchase,
install, operate and maintain said server and provide Internet
connectivity for it 24 hours a day, 365 day a year.
8. CasinoBuilders.com shall operate said server as a hub for
sub-licenses, and as a bingo web site for the Cyberluck
designated information Provider, and for no other purpose.
9. Neither CasinoBuilders.com nor any of its nominees shall
make any use of THBN's software except as provided for in this
Agreement.
10. State, federal and international laws and treaties
applicable to intellectual property rights and fair trade
practices will be honored by the Parties in such a manner as to
protect THBN's software and CasinoBuilders.com's assets and
rights.
11. THBN hereby grants and extends to CasinoBuilders.com, or
their designee, an exclusive right and license to sub-license to
others and to use THBN's software branded as "Penny Bingo" to
operators who place their gaming server and are licensed within
the Netherlands Antilles, and in accordance with the terms of the
Agreement.
12. Said excusive rights shall remain in full force and effect
only as long as CasinoBuilders.com pay THBN the royalty and
software license fees described below and as long as they perform
all the other duties imposed upon them by the terms of this
Agreement.
13. CasinoBuilders.com shall cause CYBERLUCK to appoint a
designated information Provider to operate for their own "in
house" account two branded "Penny Bingo" games, one for
development testing and one for marketing demographic testing.
14. As payment for the first "in house" "Penny Bingo"
development testing game, CasinoBuilders.com shall pay THBN as
monthly royalty and license fees all net win in any month from
play, with the intent to offset development costs.
15. As payment for the second "in house" Penny Bingo" market
demographic testing game, CasinoBuilders.com shall provide to
THBN free monthly licensing and hosting of the development
testing "in house" game identified in item 15.
16. CasinoBuilders.com shall permit applicants to operate their
own branded and dedicated Online Bingo game under the Cyberluck
license, and using THBN's software if provided by
CasinoBuilders.com, provided such applicants:
a. Have completed and complied with the approved Application
for Information Provider ("IP") status as provided to applicants
by CYBERLUCK and,
b. Once approved by CYBERLUCK, have remitted a license fee
which shall include the sum of $5,000 payable to THBN for the
initial software sub-license fee of $10,000 per month and remit
$5,000 THBN, until such time as the operators Net Win exceeds
$40,000 for three consecutive months wherein CasinoBuilders.com
will charge operator $15,000 per month and remit $7,500 to THBN,
and thereafter should operators Net Win exceed $80,000 per month
for three consecutive months, CasinoBuilders.com shall change
operator $20,000 per month and remit $10,000 to THBN. There will
be no further market increases without the mutual agreement of
both parties.
c. Have entered into and complied with the terms of an
Information Provider ("IP") Agreement with CYBERLUCK which shall
permit the Operator to offer Online Bingo services under the
CYBERLUCK
17. THBN will provide CasinoBuilders.com and all approved "Penny
Bingo" game operators with the ability and constant opportunity
to change the seed for any computer generated random Bingo
numbers that are broadcast by THBN.
18. THBN may replace or change any or all of the 999 Bingo cards
periodically, with ample advance notice to Cyberluck and
CasinoBuilders.com and all approved sub-licenses.
19. CasinoBuilders.com or any approved sub-licensees authorized
by CasinoBuilders.com may create and give away CD's of any
version of THBN's Bingo games that they desire.
20. CasinoBuilders.com shall remit to THBN on the fifteenth day
of each month a collective royalty and sub-license fee in
accordance with the schedule contained in this agreement.
21. In the event that THBN does not receive full payment of the
above monthly obligation of sub-licensees, CasinoBuilders.com
shall terminate the services available to every sub-licensee that
has not fulfilled the financial obligations imposed upon them by
the terms of their IP Agreements.
22. CasinoBuilders.com shall include terminology in its
Agreements with sub-licenses to protect THBN's interest in
collecting said license and royalty fees.
23. Software sub-license fees shall be fixed for a period of
twelve months from the date such fee was first paid. Fees may be
renegotiated between the parties with respect to new sub-licenses
but cannot effect the operation of any existing sub-license.
24. If THBN shall offer similar services in another jurisdiction
at prices less than $10,000 monthly or its equivalent. THBN shall
be precluded from increasing the licensee fee.
25. The initial term of this Agreement shall be for three years
and shall continue for subsequent one-year periods, as long as
The Parties are in compliance with the terms of this Agreement.
26. The Parties may not sell or sub-assign any rights conveyed
under this agreement except as specifically provided in this
Agreement except to wholly owned or affiliated subsidiaries.
27. If THBN fails to deliver the software and configure the
server as required under this agreement within 60 days form the
date it receives full root access to the server from
CasinoBuilders.com, Agreement shall be null and void at the
election of CasinoBuilders.com.
28. THBN agrees to indemnify and defend CyberLuck and
CasinoBuilders.com against all claims for violation of
intellectual property rights, patents or trademarks as a result
of entering into and operating under this Agreement.
29. THBN shall be responsible at all times for routine
maintenance access to the operating servers.
Agreed by the parties on the dates indicated below:
/s/ Alan Frank dated: 9-9-99
Alan Frank - President
The HomeBingo Network, Inc.
/s/ Andy Ruppanner dated: 9-9-99
Andy Ruppanner - President
CasinoBuilders.com, Inc.
CHANGE IN ACCOUNTANTS
Securities and Exchange Commission
450 5th St. N.W.
Washington, D.C. 20549
The decision to change accountants was made by CasinoBuilders.com
and was not due to any disagreement between the Company and this
office concerning accounting principles or practices, disclosure,
or auditing scope or disclosure.
/s/ Barry Friedman
Barry Friedman, P.C.
Las Vegas, Nevada
December 8, 1999
