UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
Win-Gate Equity Group, Inc.
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(Name of Issuer)
Common Stock, par value $0.001 per share
----------------------------------------
(Title of Class of Securities)
972639 10 8
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(CUSIP Number)
Gary D. Morgan
100 North Biscayne Boulevard, Suite 2500
Miami, Florida 33132
(305) 371-3300
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
September 27, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|
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SCHEDULE 13D
CUSIP No. 972639 10 8 Page 2 of 7 Pages
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Gary D. Morgan
###-##-####
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X] (1)
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS
(2)
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF
0
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
4,000,000 (1)
OWNED BY
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
0
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
4,000,000 (1)
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,000,000 (1)
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.1%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON
IN
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Page 3 of 7 Pages
(1) In connection with the Amended February Agreement as described in Item 6
below, the Reporting Person has agreed to vote his shares in accordance with
each of the Letter Agreements. Subject to the Amendment February Agreement, if
the Reporting Person fails to vote in accordance thereof, Morgan appoints the
Reporting Person as his proxy to vote the Reporting Person's stock on all
matters as described in the Amended February Agreement. The Reporting Person
also pledged his 4,000,000 shares of Issuer Common Stock pursuant to the Amended
February Agreement. However, other than with respect to the agreements and
covenants described in the Letter Agreements, the Reporting Person does not
affirm the existence of any group.
(2) The Reporting Person sold 4,294,000 shares of Issuer Common Stock at $.01
per share, as described in Item 6 below.
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Page 4 of 7 Pages
Item 4. Purpose of Transaction
The Reporting Person sold 4,294,000 shares of Issuer Common Stock to Tremaine
Trading Co., Ltd., an Isle of Man corporation ("Tremaine"), for $.01 per share
(for an aggregate of $42,940). In connection with the transaction, Mr. Morgan
personally agreed to pay a finder's fee in Issuer Common Stock owned by Mr.
Morgan at nominal cost to Tremaine if Tremaine introduced the Issuer to an
entity that would provide the Issuer with not less than $3.0 million in loans or
equity capital.
Item 5. Interest in Securities of the Issuer
(b) The Reporting Person has shared voting power with GNB Bank Panama S.A., a
bank organized under the laws of the Republic of Panama (the "Bank") ith respect
to 4,000,000 shares held by the Reporting Person, which shares constitute
approximately 21.1% of the issued and outstanding common stock of the Issuer.
The change in the voting power with respect to the shares of common stock held
by the Reporting Person was the result of a letter agreement between the
Reporting Person and the Bank dated February 29, 2000 (the "February Letter
Agreement").
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
In connection with a Loan Agreement (the "Loan Agreement") dated September 27,
2000 by and among the Issuer, Colpafinsa, S.A., a Panama corporation ("CSA"),
and Globaltron Communications Corporation, a wholly owned subsidiary of the
Issuer ("Globaltron") and the Reporting Person (who, along with Globaltron, are
referred to as the "Guarantors"), CSA made a loan to the Issuer in the principal
amount of $4.0 million plus interest at the base rate announced by Citibank N.A
plus 1% (the "Loan") and evidenced by a promissory note (the "Note") due on or
before the earlier of (i) six months from the date of the Loan or (ii) upon the
Issuer receiving $15.0 million pursuant to a Qualifying Private Placement, as
defined below (the "Maturity Date"). The sum of $2.0 million was loaned to the
Issuer on September 27, 2000, an additional $500,000 million will be loaned to
the Issuer on October 13, 2000, an additional $500,000 will be loaned to the
Issuer on October 31, 2000 and the remaining $1.0 million will be loaned to the
Issuer on November 30, 2000.
This Loan is subordinate to the $5.0 million loan made by GNB Bank S.A. to the
Issuer, which is guaranteed by Globaltron and evidenced by a Loan agreement
dated February 29, 2000. Of the initial $2.0 million received by the Issuer, as
assignee of Morgan, the Issuer will repay $1.0 million of its obligations to GNB
Bank, S.A.
A Qualifying Private Placement is defined as a private placement of the Issuer's
Common Stock or any other class of its equity securities with a preference (as
to liquidation, dividend or otherwise) to the Common Stock of not less than
$15.0 million to persons unrelated to the Reporting Person ( the "Qualifying
Private Placement") for cash consideration paid of $10 or more per share.
Interest on the Note and Loan is payable upon the Maturity Date.
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Page 5 of 7 Pages
As an inducement for the Reporting Person to enter into the Loan Agreement,
pursuant to a letter dated September 27, 2000 (the "September Letter
Agreement"), the Reporting Person agreed, subject to the senior rights of GNB
Bank S.A., that:
(i) for a period of three years from the date hereof, Morgan will not
sell, exchange or otherwise transfer (collectively, the "transfer") all or part
of Morgan's stock in the Issuer; provided, however, that Morgan may transfer his
shares in the Issuer in the event of a merger, consolidation or other sale of
assets or other reorganization;
(ii) Morgan will vote his stock in the Issuer in favor of the Reporting
Person's designee(s) nominated to serve as one of the five directors on the
board of directors of the Issuer; and
(iii) Morgan will not vote his stock in the Issuer, without the
Reporting Person's permission, in favor of:
(A) amending the Articles of Incorporation of Win-Gate (other
than in connection with a Qualifying Private Placement or for non-material
amendments),
(B) incurring indebtedness in excess of $40.0 million in
principal amount prior to a Qualifying Private Placement and $80.0 million in
principal amount between such offering and a public offering of any Issuer
securities,
(C) approving a redemption by the Issuer or any of its
affiliates of any securities of the Issuer (other than in connection with the
conversion of the Loan and Note into Qualifying Shares),
(D) acquiring, or investing in any entity (or its assets) in
excess of $1.0 million (in any one or a series of transactions), with certain
exceptions,
(E) undertaking a public offering of Issuer securities of less
than $90.0 million; provided that after the Qualifying Private Placement and
before any public offer of shares, there cannot be an offering unless Qualifying
Shares get a 50% promote per year, on a compounded basis;
(F) declaring any dividends or distributions;
(G) liquidating the Issuer or its affiliates;
(H) changing the compensation arrangements with employees or
current "cap" on compensation for new employees, except in certain instances,
(I) entering into any related party transactions; or
(J) merging, consolidating, reorganizing or selling the assets
unless the Issuer is valued at not less than $200 million, $375 million or $500
million in the three consecutive 12-month periods, respectively, commencing in
February, 2000, and any transaction is also
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Page 6 of 7 Pages
conditioned upon the consideration received being cash or securities immediately
salable on an established securities exchange or NASDAQ.
In the event that Morgan fails to vote his stock in accordance with clauses (ii)
and/or (iii) of the foregoing paragraph, then, in addition to such other rights
and remedies as may be available to the Reporting Person in law or in equity
(including without limitation an action for breach of contract), subject to the
rights of GNB Bank as proxy, Morgan appoints the Reporting Person as his proxy,
which proxy is irrevocable and coupled with an interest, to vote Morgan's stock
on all such matters as are within the contemplation of such clauses (ii) and/or
(iii). In any such event, the Reporting Person has full power of substitution
with regard to such proxy.
The Reporting Person also pledges his 4,000,000 to the Bank, as senior pledgee
and to CSA, as subordinated pledgee.
Additionally, in connection with the loan agreement between and among the
Issuer, CSA and the Guarantors, Mr. Morgan personally agreed to pay a finder's
fee in Issuer Common Stock owned by Mr. Morgan at nominal cost to Tremaine
Trading Company, Ltd. as a result of Tremaine's introducing CSA to the Issuer,
resulting in CSA providing the Issuer with not less than $3.0 million in loans
or equity capital.
Item 7. Material to Be Filed as Exhibits
(a) Loan Agreement dated September 27, 2000 between the Issuer, the
Guarantors and CSA.
(b) Amended Loan Agreement dated September 27, 2000 between the Issuer, the
Guarantors and GNB Bank.
(c) Letter Agreement dated September 27, 2000 between Morgan and GNB Bank.
(d) Stock Purchase Agreement dated September 27, 2000 between the Reporting
Person and Tremaine.
(e) Pledge Agreement between the Reporting Person, GNB Bank and CSA dated
September 27, 2000.
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Page 7 of 7 Pages
Signature
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
September 27, 2000 /s/ Gary D. Morgan
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Gary D. Morgan
