UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
dot com Entertainment Group, Inc.
(Name of Small Business Issuer in its charter)
Florida 58-2466312
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
300 Pearl Street, Suite 200, Buffalo, NY 14202
(Address of principal executive offices) (zip code)
(905) 337-8524
Issuer's telephone number
Securities to be registered under section 12(b) of the Act:
None.
Securities to be registered under section 12(g) of the Act:
Title of Class
--------------
Common Stock, $.001 par value per share
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TABLE OF CONTENTS
Page
PART I.........................................................................1
Description of Business..................................................1
Item 2. Management's Discussion and Analysis or Plan of Operation.......13
Item 3. Description of Property.........................................13
Item 4. Security Ownership of Certain Beneficial Owners and Management..14
Item 5. Directors, Executive Officers and Significant Employees.........14
Item 6. Executive Compensation..........................................16
Item 7. Certain Relationships and Related Transactions..................17
Item 8. Description of Securities.......................................17
PART II.......................................................................17
Item 1. Market Price of and Dividends on the
Registrant's Common Equity and Other Shareholder Matters.......17
Item 2. Legal Proceedings...............................................18
Item 3. Changes in and Disagreements with Accountants...................18
Item 4. Recent Sales of Unregistered Securities.........................18
Item 5. Indemnification of Directors and Officers.......................18
PART F/S......................................................................19
Item 1. Financial Statements............................................19
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS....................................19
PART III......................................................................19
Item 1. Index to Exhibits (Pursuant to Item 601 of Regulation SB).......19
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PART I
Description of Business
A. BUSINESS DEVELOPMENT AND SUMMARY
dot com Entertainment Group, Inc., hereinafter referred to as "dot com" or
the "Company", is a diversified Internet software development company,
specializing in the creation and support of Internet entertainment products and
related services. dot com is in the business of developing, supporting,
maintaining and promoting the sale of entertainment software products that can
be used either on or off the Internet. The Company focuses its efforts on
developing and supporting Internet gaming, lottery, entertainment and related
software products. The Company also develops, implements and manages the use of
entertainment software products and technical support services for the
not-for-profit and charitable business sectors, and develops and sells
commercial entertainment software for use by private users.
dot com is not an Internet gaming company. Rather, it develops and licenses
the use of its commercial software products and trademarks such as its
CyberBingo(TM) software system to independent third parties located in
jurisdictions that permit Internet gaming as a legitimate business enterprise.
CyberBingo(TM) is the world's longest running, fully interactive, java-based
Internet Bingo Hall.
dot com derives its revenues from several sources, including its assessment
of license fees and royalties from the use of its software. Additionally, dot
com provides licensees with technical support, maintenance, software upgrades,
information and systems consulting services, and marketing and promotional
initiatives and services geared toward generating goodwill and brand awareness
of its products.
dot com is listed for trading on the Over-The-Counter Bulletin Board (also
known as the "OTCBB") under the symbol "DCEG". The Company is headquartered in
Buffalo, New York and was formed in January 1999 through the acquisition of 100%
of the shares of the Precyse Corporation by Affiliated Adjusters, Inc. On
February 2, 1999, Affiliated Adjusters, organized under the laws of the State of
Florida on December 11, 1981, changed its name to dot com Entertainment Group,
Inc. Prior to its acquisition of Precyse Corporation, Affiliated Adjusters, Inc.
conducted no business and had only nominal assets and liabilities.
All information in this registration statement concerns the historical
business of Precyse Corporation. Dot com cannot assure you that it will continue
to qualify for quotation on the OTCBB and trade under the symbol "DCEG". The
company has not been subject to any bankruptcy, receivership or other similar
proceeding.
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B. BUSINESS OF ISSUER
1. PRINCIPAL PRODUCT AND SERVICES AND PRINCIPAL MARKETS
In view of the dynamic growth of the Internet, the Company has focused its
software development on the creation and enhancement of CyberBingo(TM), a "live"
Internet Bingo game currently played on the Internet by approximately 15,500
people from five continents. Through international marketing and promotion, the
Company plans to assist its licensees in developing CyberBingo(TM) as the
recognized name for online Bingo entertainment throughout the world.
CyberBingo(TM)
CyberBingo(TM) is one of the world's first Internet Bingo games written in
the "java" programming language. CyberBingo(TM) was created to capitalize on the
growing demand for Internet based online gaming by offering players a
pleasurable, interactive, electronic version of the classic Bingo Hall-style
game. CyberBingo(TM) has been extensively tested on the Internet since January,
1997. Management believes that the software is fully Y2K compliant. During the
beta testing stage, a non-gaming version of CyberBingo(TM) was tested 96 times
per day, on a 24-hour basis. This beta version was successfully played worldwide
to anyone who had access to the Internet. Since May of 1998, when CyberBingo(TM)
became a pay-as-you-play game, there have been more than 50,000 games played
with winnings returned to players exceeding $700,000. CyberBingo(TM) is
presently accessed and played by entering The CyberBingo Corporation's website
at www.cyberbingo.net. The CyberBingo Corporation licenses dot com's
CyberBingo(TM) software, but otherwise has no affiliation whatsoever with dot
com.
How it Works
After players have found CyberBingo(TM) , either through a search-engine or
through dot com marketing initiatives, they register as a player by providing
basic information and a contact address. Upon registration, players receive a
unique player account number, which has a personal password. Bingo games are
initially purchased online using credit cards, on-line checking, 1-800 and 1-900
services, through secure commerce connections. CyberBingo(TM) game cards can be
purchased after a player deposits $10.00, $20.00, $50.00 or $100.00 in his
CyberBingo(TM) account. The player can then purchase up to 24 cards in each of
the 110 CyberBingo(TM) games played throughout the day, with each card purchased
for $0.25.
Any time after registration, the player can navigate directly to
CyberBingo(TM) and obtain additional credits by "recharging" their player
account either through a new E-commerce purchase or through previously won
CyberBingo(TM) dollars.
At the conclusion of each game, CyberBingo(TM) will award the winning
player(s) with a pre-determined cash prize. Multiple winners will split the
prize equally. The prize amount is announced prior to each game and is
established either as a minimum amount, a declining amount or as a percentage of
revenue collected for the current game.
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Players that win CyberBingo(TM) cash, see proceeds from the win deposited
automatically into their account. Winnings can either be used to purchase new
game cards or returned to the player on a "pay-out" request.
The CyberBingo(TM) hardware system is a leased system which operates in the
secure premises of TCC in St. John's, Antigua. The CyberBingo(TM) hardware
system consists of 5 Microsoft NT based Pentium class computers which
participate together on a local area network to form the back end of the
CyberBingo(TM) 3-tier architecture. The servers provide Database, Web Server and
Application Server functionality in addition to various e-commerce related
automation services. The hardware system is supported by a state-of-the art tape
backup system, which provides for safe keeping of all software and data systems.
Because this system accesses the Internet through a local Internet service
provider in St. John's, Antigua, temporary service interruptions will occur
periodically, particularly in times when the island has a communication service
breakdown. Similarly, service interruptions can occur when the island
experiences power outages, which can not be supported by back-up generating
systems, in place at TCC's premises.
The potential exists and we are exposed to a risk that certain of our
systems or those of our licensees will fail or suffer impairment as a result of
the Year 2000 issue (hereinafter "Y2K"), Y2K relates to the rollover date of
programming defaulting to 01/01/1900 rather than 01/01/2000. Although management
believes that all hardware is Y2Kcompliant, there is a risk that the Company's
reliance on certain hardware systems, software and related services could result
in a complete system failure to its software and/or hardware systems and/or any
related information technology system including communication systems. Although
the Company relies on systems developed using current technology and on systems
designed to be Y2K compliant, we may have to replace, upgrade or re-engineer or
program certain systems to ensure that all technology will be Y2K compliant when
operating together. Management does not anticipate having to incur any major
operating or capital expenditures which would have a material impact on our
financial condition. While management believes that the Company's hardware and
software systems are Y2K compliant, there can be no assurance until the year
2000 occurs, that all systems will function adequately.
Income Streams
dot com plans to draw its revenues from several sources including:
o Royalty income
o Technology, support, maintenance and consulting fees
o Sub-license agreements and set-up fees
o License of commercial/non-gaming entertainment software products
o Software licensing, support and operating income and fees to the
not-for-profit and charitable business sector
o Advertising fees and revenue
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Royalties
Royalty fees are collected from individual licensees, who license the
Company's Internet entertainment software and operate their business from
jurisdictions that have embraced Internet gaming and entertainment.
In May of 1998, dot com concluded its first license agreement with The
CyberBingo Corporation of St. John's, Antigua ("TCC"). dot com's royalty fees
from this license agreement are established at 50% of TCC's gross revenue from
sales of games to individual players.
Technology, Support, Maintenance and Consulting Fees
In addition to generating a revenue stream from royalties, the Company
provides software support, consulting, strategic analysis and development
services to its licensees and to third parties. The Company is developing TV
support type interfaces for its software products, which will allow its internet
games and entertainment to be used by technology, such as Web TV, in order to
increase user-friendliness and offer access through the internet to a broader
user base.
Sub-License Agreements
As part of its license agreement, dot com is obligated to assist TCC in its
continued development of the world's largest Bingo hall. As such, and with the
consent of TCC, dot com is promoting the sale of sub-licenses, which will be
sold on a "territorial" basis to interested licensees worldwide who will promote
CyberBingo(TM) in their local jurisdiction.
The sale of sub-licenses is expected to have immediate, significant impact
on TCC and dot com. As these sub-licenses are sold, there will be a requirement
to translate TCC's web-site and information pages into different languages. This
will open up entirely new player bases to CyberBingo(TM). Furthermore, through
the assistance of each sub-licensee, who will be obligated to help in the
marketing and promotion of CyberBingo(TM) in that jurisdiction, direct local
advertising will increase CyberBingo(TM)'s player base which will be managed by
the sub-licensee who will be familiar with the different elements of that local
market.
What makes this arrangement attractive to a sub-licensee is the relatively
small investment. It also allows the licensee to make use of CyberBingo(TM)'s
goodwill, e-commerce and player loyalty. Each sub-licensee will pay dot com a
development and licensing fee in the amount of $50,000, which will cover all
development costs incurred in creating the local website. The sub-licensee will
then receive 25% of the gross sales (after e-commerce charges) which enter the
CyberBingo(TM) game system in Antigua through the sub-licensee's web-site. dot
com believes that this sub-licensing agreement will immediately increase
CyberBingo(TM) player levels, which will lead to increased royalty income to dot
com. Although as of June 15, 1999, dot com had not concluded any sub-license
agreements, it is in discussion with several interested sub-licensees.
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License of Individual Entertainment Software
The Company recently developed a Bingo game which can be purchased by
private or individual licensees and used either on the internet, in Bingo halls,
in intranets, University and College campuses, hotel systems, airlines, at home
and in a variety of different settings. As the Company develops additional
entertainment products and games for internet licensees, it will also add new
games to its sale of software to individual or private users, either through its
corporate website or in a retail setting.
In addition to the sale of "traditional" games, the Company has been
approached by potential licensees who require software development of virtual
entertainment products, and entertainment products which have their roots in
"traditional" games but have very different application and use. Various
entertainment providers are looking at traditional entertainment games such as
Bingo, to generate increased awareness and loyalty from their constituents and
dot com sees this as a new area of commercial software development and license
fees. No agreements have yet been signed to develop such software.
Software Licensing to the Not-for-Profit and Charitable Business Sector
Through limited customization of its internet Bingo and other games, the
Company believes it is positioned to be an industry leader in the provision of
information technology solutions and support to charities, foundations and other
organizations, allowing them to easily transform and focus their fundraising
sources to the internet as it matures. This may allow donors to enjoy internet
Bingo and other games for the cost of their ticket purchases which may continue
to be characterized as a donation for tax purposes by the participant. The
Company is developing licensable versions of its first software product,
CyberBingo(TM), which will be followed by other games and systems.
The Company plans to provide charitable organizations with new media to
collect donations and subscription revenues in the not-for-profit business
sector. Under its agreements, the Company will provide software and technical
support to these organizations which will enable them, through their use of
CyberBingo and other similar entertainment products, to offer a medium through
which donations can be made as described previously.
Advertising and Promotional Fees and Revenues
dot com plans to become a leader in the development of software products
that become "sticky sites" in the internet entertainment business sector. A
"sticky site" is one that can attract repeat users for a longer period of time.
These have become the most desirable of websites since they are very attractive
to potential advertisers.
dot com plans to help its sub-licensees, if any, develop international
marketing and promotional campaigns for CyberBingo(TM). These campaigns, for
which dot com will receive fees to be negotiated amongst each sub-licensee, will
encourage and authorize sub-licensees to attract advertising on their local
website. The Company believes that this unique arrangement will give dot com a
competitive advantage over competing software development firms who simply sell
software. The Company's intention is to provide "added value" for the purchaser
of a sub-license. The sub-licensee will be positioned to benefit through royalty
income plus, if they
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are successful in their promotional efforts, local or other advertising
revenues. As the number of game players increases, the marketability of each
"sticky site" will improve, advancing the overall profile of dot com and its
products.
Each potential sponsor will deal with dot com on the development,
implementation and design of the advertising on the licensee site. The Company
anticipates that dot com will be able to generate significant marketing, design
and implementation fees, paid by the prospective sponsor and the licensee. There
can be no assurances that such fees will be generated. Changes and improvements
to the downloadable version of the CyberBingo(TM) software system have now been
made bringing banner and other advertising directly into the virtual Bingo card.
The Company intends to create this promotional ability within each game or card
as part of each new software innovation.
Overall Market
With the explosive growth of the Internet, particularly in areas outside of
North America, accompanied by technological innovations such as high-speed
internet connectivity, the Company believes it is poised for tremendous growth.
According to industry sources and analysts overall revenues generated on the
Internet are expected to exceed $1.2 trillion by 2002. These sources estimate
that revenue from Internet gaming alone may approach several billion dollars
over the next few years..
It is estimated that more than $10 billion dollars was wagered in Bingo
halls worldwide in 1996 and that approximately 500 million games were played
that year. The 1990s have been a breakthrough decade for casinos and other
gaming industries in both the United States and abroad. During this decade,
gaming has been one of the fastest growing industries in the U.S. with gross
annual revenues generated by casinos, Bingo, lotteries and racing exceeding $1
trillion in gaming wagering according to International Gaming & Wagering
Business Magazine. Conservative estimates of the current Internet gaming market
in the U.S. alone total $8.5 billion. Its potential is expected to exceed $50
billion worldwide by the end of the century according to the Casino Gaming
Business Market Research Handbook. With the exception of the United States,
governments of countries worldwide, including Australia, Germany and South
Africa are liberalizing and developing their internet gaming laws in order to
regulate internet gaming and benefit from the "voluntary tax" monies that flow
from internet gaming activities.
Based on data gathered from CyberBingo(TM) players and on information
available from other internet Bingo games, the Company believes that there is a
large and growing player base which demands a quality Bingo game on the
internet. The Company's research indicates that the demographics of the Bingo
player on the internet are very different from those of the conventional Bingo
hall player, and that the number of Bingo enthusiasts migrating to the internet
is rapidly growing. Also, the Company believes that an increasing number of
non-Bingo enthusiasts are participating in games like CyberBingo(TM) for
entertainment and the possibility of winning a cash prize. Since its inception
in May, 1998, over 17,000 players have become CyberBingo(TM) members and have
registered to play for cash prizes.
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2. DISTRIBUTION METHODS OF THE PRODUCTS AND SERVICES
dot com's marketing strategy is built on the development of real-world and
online advertising campaigns. Leveraging existing real world and online
promotion through related organizations is intended to generate and capitalize
on momentum and build customer and licensee player relationships and royalty.
The Company believes it is critical to achieve reach of target groups in the
first year of operation. This is intended to establish dot com as the "first
mover" in the internet entertainment sector by creating product awareness and
reliability of product operation with all potential customers and licensees.
Just as online consumers refer to Amazon.com as the online bookstore and Yahoo!
as the search engine and portal, the Company intends to become known as the
provider and developer of internet entertainment products. The Company intends
to generate this awareness through several media strategies, including:
o Online media
o Direct response media
o Traditional media
o Investor and public relations
o Promotion through the not-for-profit sector
The Company has concluded its first License and Technology and Support
Agreement. TCC of Antigua, West Indies was the first company to purchase a
CyberBingo(TM) license from dot com, and at the present, is the only such
licensee. The license provides for the full implementation, support and
operation of CyberBingo(TM) in Antigua. In order to operate CyberBingo(TM)
legally, TCC purchased a Virtual Gaming License, which was issued effective
January 1, 1998 in accordance with the regulatory requirements set out by the
Free Trade and Processing Zone Act (1994, Antigua and Barbuda).
The Company intends to sell additional License and Technology and Support
Agreements with other third parties (its "sub-licensees"), who will make use of
the existing infrastructure in Antigua. New licensees will operate and promote
CyberBingo(TM) in their local jurisdiction and cause their player base to "click
through" to the CyberBingo(TM) game in Antigua. The Company anticipates that
additional license fees will be generated from the sale of an interest in the
software in locations throughout the world.
Assuming it can secure adequate capital, dot com intends to allocate
significant financial resources to the international marketing and sale of
sub-licenses, which will be sold on a "territorial" basis to interested
licensees, CyberBingo(TM) will be promoted in local jurisdictions by
sub-licensees, thereby building significantly the number of players per game and
the resulting royalty streams to dot com. As these sub-licenses are sold,
CyberBingo(TM) will become available in different languages, attracting entirely
new players to CyberBingo(TM). Because each sub-licensee will be obligated to
help in the marketing and promotion of CyberBingo(TM) in that jurisdiction,
direct local advertising will also increase CyberBingo(TM)'s player-base. dot
com's intention is to attract quality sub-licensees who will be familiar with
the nuances of marketing in that local market, thereby further increasing
royalty revenues to dot com.
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As part of its growth strategy, the Company will actively seek potential
acquisitions of businesses and business assets. The Company has already
identified some immediate target acquisitions and is looking at the following
industry groups:
o Private internet marketing and promotional firms
o Private software development firms
o Other complimentary entertainment providers
The Company has not reached any agreements or understandings, oral or
written, to acquire any businesses.
On-line media
The Company intends to negotiate banners and links on widely used Search
Engines, both domestically and internationally and on sites which offer
strategic advantage to the target audience. This will not only drive awareness
and traffic to licensee sites, but, to the extent exclusivity can be achieved,
it will pre-empt competitors from this vital medium during the Company's first
year.
dot com intends to develop as many associations as possible with other
comparable online websites, such as those maintained by clubs, organizations and
other international groups. Many of these groups have established an on-line
presence to promote and provide access to their membership and prospects.
dot com has investigated comparable websites and we hope to negotiate
suitable arrangements, which may provide the sites with the opportunity to earn
revenue (percent of sales) in exchange for hosting links. Some of the sites will
represent non-profit organizations, charities and other groups, in an attempt to
draw the commercial side of dot com's business into its internet product base.
In those cases proceeds earned could be donated on the site's behalf.
Direct Response Media
The Company believes that direct response is by far the most efficient
medium to inform prospects about the features and benefits of dot com's products
and those offered by its licensees. Targeted direct response typically takes the
form of personally addressed direct mail. Because the cost of traditional direct
response is prohibitive to our industry competitors, particularly on an
international scale, our intention is to sufficiently capitalize dot com so it
can take advantage of this medium. There can be no assurance that dot com will
be able to obtain adequate financing to achieve this goal.
On a city by city basis, dot com plans to also develop relationships with
top internet service providers and hopes to enter into agreements with these
service providers and organizations. The agreements may offer advertising
listings on dot com or licensee sites in exchange for client lists. An
advertising presence or the right to place inserts, or "piggy-back", in their
direct mailing will save dot com postage, ensure access to perfectly targeted
prospect groups and leverage the existing loyalty between the service providers
and their customers. The inserts could include customer discounts, free licensee
game activity or other promotional items. "Piggy-backing" is significantly more
efficient than traditional direct response media. The
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Company will segment various sub-sets of the direct response target groups and
test insert designs, lists, incentives etc.
Outbound e-mail is also a unique opportunity and a relevant medium. This
type of "push medium" has received some negative response from the on-line
community, and as such, dot com will proceed with this initiative only after it
studies the issues more carefully, and deems it appropriate and a valuable
option.
Traditional Media
Traditional media including consumer magazines, industry specific programs,
commercial advertising, television and radio coverage and related offerings,
will be developed with the assistance of specialists in marketing and promotion,
whom the Company will retain on a contract basis on tender. With the assistance
of our advisers, dot com plans to use page dominant advertising for its products
and participating licensees, sustaining weight and frequency in selected
publications thereafter.
In addition, the Company will work aggressively with its licensees to
provide information on product incentives, such as free games or million dollar
prizes. The data based nature of the business provides the technology capable of
truly carrying on a one-to-one relationship with every single user, providing
the added value features that are relevant to that particular internet
entertainment customer.
Not For Profit Sector
We have commenced positive discussions with not-for-profit organizations in
Toronto, Canada. dot com will provide sponsorship, fundraising, charitable
representation and other relationships and programs using our software, support
and industry knowledge to help the not-for-profit business sector increase
donation revenues. This represents a highly cost effective tactical strategy to
support our "first mover" status in this industry. It also serves as a
pre-emotive function, excluding potential competitive on-line vendors from
leveraging the same opportunity.
3. NEW PRODUCTS
In addition to CyberBingo(TM), the Company plans to develop other internet
entertainment products, along with corresponding e-commerce systems which can be
used in conjunction with its online games to process credit cards over the
internet. The Company has set a goal of releasing a new software product
approximately every three months assuming adequate Keno game, which it expects
will be released in the summer of 1999.
In addition to its software products, the Company intends to provide value
to customers in terms of development support, such as in the design and
implementation of websites which distribute the core entertainment software to
end users.
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4. COMPETITION AND E-COMMERCE
Although other Bingo games exist on the Internet, many employ inferior
technologies that produce substandard game interfaces, require lengthy downloads
or are otherwise not appealing to customers. Management has re-developed the
CyberBingo(TM) game system on several occasions over the past 12 months, with
the most recent version 4.5 being released in May of 1999. As such and based on
licensee comments derived from customer input, management believes that the
games are functionally superior and more visually appealing, when compared to
those developed by its competitors.
Software development for the Internet gaming business is a newly emerging
and highly competitive business and there is competition from North American and
foreign software development companies, some of which have their business focus
only in software development and others operating both as a developer and owner,
directly or indirectly, of subsidiary companies who operate Internet casinos.
There are presently more than 300 on-line casinos offering gaming on the
Internet , with more than 30 such businesses offering Bingo, in one form or
another. Ibingo, Bingomania, BingoZone and HomeBingo are some of the competing
software products which compete with CyberBingo(TM), with other companies such
as Bingo.com and Dion Entertainment Inc. attempting to enter the industry.
The Company's primary competition includes, but is not limited to,
Cryptologic Inc., Venturetech Inc., Internet Casinos Ltd., Starnet
Communications, Interactive Gaming and Communications Corp., Wager Net Inc.,
Casinos of the South Pacific, World Wide Web Casinos and Virtual Vegas. Some of
these companies deliver software solutions but that also participate in Internet
gaming as operators. Dot com is a software development company only with no
corporate affiliation between its business and that of its licensees.
A barrier to entry into this business sector is the availability and/or
cost of e-commerce systems. The term "e-commerce" encompasses business to
consumer transactions conducted over the Internet and the World Wide Web.
Present sub-merchant arrangements for operators of Internet entertainment
software costs operators 15-20% of e-commerce sales. Further, there are very
significant application processing periods for e-commerce services in online
entertainment, particularly Internet gaming, with many North American financial
institutions not participating.
Given this environment, dot com has developed a close relationship with
Firstatlantic Commerce of Bermuda ("FAC"), which is a world leading e-commerce
system using "cGate" technology. This arrangement with FAC allows dot com to
have a comprehensive and secure Bermuda-based e-commerce solution, which can be
made available to its licensees. cGate uses powerful encryption to protect
credit and debit card transactions transmitted over the Internet. In North
America, the maximum encryption key legally available to export for e-commerce
merchants is 40 bit. cGate Secure raises the level of security for transaction
processing to 256 bit key encryption for international merchants. Using state of
the art encryption methodology, cGate Secure provides unparalleled processing
security between the CyberBingo(TM) software and hardware systems and FAC's
server in Bermuda. The product is customizable up to 2048-bit encryption to meet
the transaction security requirements of CyberBingo(TM) clients and additional
dot com licensees. FAC and dot com have concluded an agreement providing
e-commerce services to dot com and its licensees at a fraction of the cost noted
above.
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Management believes that the way in which products and services will be
directly or indirectly sold in the future will shift to e-commerce means of
transaction processing. As such, the integrity of the e-commerce system used by
any "virtual" company and its corresponding financial institution will become
critical to the success of the business. In view of the nature of the Company's
business, it can not assure you that our products and services will continue to
be supported by FAC or any other on-line e-commerce system. Further, the Company
is also unable to assure you that its e-commerce and or financial institutional
support will continue to be available for its operations or any of its
licensees.
Management believes that the advantages of FAC processing for its software
products include: (1) secure communication systems between dot com licensees and
FAC on a 24 hour basis, 7 days per week; (2) the development of state-of-the-are
encryption systems, which protect payment information between licensees and the
customer; (3) the authentication of messages which identify the parties sending
and receiving payment information; and (4) operation of e-commerce processing
systems under credit card protocol and agreements, which have been established
and implemented for countries such as Bermuda and Antigua, located in the
Caribbean.
5. RAW MATERIALS AND SUPPLIERS
The Company is a software technology business, and thus does not use raw
materials or have any principal suppliers.
6. CUSTOMERS
As stated above, TCC of Antigua, West Indies was the first, and so far is
the only, company to purchase a CyberBingo(TM) license from dot com. The Company
intends to sell additional License and Technology and Support Agreements with
other sub-licensees, who will make use of the existing infrastructure in
Antigua.
Through its intended allocation of significant financial resources to the
international marketing and sale of sub-licenses, which will be sold on a
"territorial" basis to interested licensees, CyberBingo(TM) will be promoted in
local jurisdictions by sub-licensees, thereby building significantly the number
of players per game and the resulting royalty streams to dot com. As these
sub-licenses are sold, CyberBingo(TM) will become available in different
languages, attracting entirely new players to CyberBingo(TM).
7. PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY
AGREEMENTS OR LABOR CONTRACTS
The Company has applied to register its CyberBingoTM trademark in the
United States and Canada.
8. GOVERNMENT REGULATION
The Company's business is not presently regulated by any governmental
entity. While dot com provides only the CyberBingo(TM) software solution to its
licensees, a government may
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<PAGE>
take the position that dot com is an integral component of its licensees'
businesses, because the software runs on dot com's server.
Many countries are currently analyzing the issues surrounding wagering on
the Internet. More particularly, they are considering the merits, limitations
and enforceability of prohibition, regulation or taxation of Internet wagering
transactions. There are significant differences of opinion and law between
countries such as the United States, Canada, Australia, Liechtenstein and
Antigua. For example, in Queensland, Australia there is now regulation which
authorizes and regulates Internet wagering; the United Kingdom has now chosen to
sponsor a national lottery which will be operated over the Internet; and many
Caribbean countries have now regulated Internet gaming.
In the United States, on the other hand, ownership and operation of
land-based gaming facilities are often regulated on a state by state basis.
Certain of these Internet casino operators of have been the subject of criminal
complaints in the states of New York, Missouri and Minnesota. See, for example,
Minnesota v. Granite Gate Resorts, Inc., 568 N.W.2nd 715 (1997); Missouri V.
Interactive Gaming & Communications Corp., No. CV 97-7808 (Mo.Cit.Ct. 6\16\97)
and New York V. World Interactive Gaming Corporation (filed 07/13/98).
The United States Federal Interstate Wire Act provides language which inter
alia makes it a crime to use interstate or international telephone lines to
transmit information assisting in the placing of wagers, unless the wagering is
authorized in law in the jurisdiction from which and into which the transmission
is made. There is also other similar legislation which arguably can be used to
limit or prohibit Internet gaming in the United States. Further, United States
regulatory and legislative agencies have conducted study of the on-line wagering
and through the National Gambling Impact Study, now intend to develop
enforcement strategies to curtail Internet wagering in the United States. The
Kyl Bill (S-692) may also provide for the prohibition of intrastate or
interstate gaming and wagering.
While CyberBingo(TM) licensees operate from Antigua, where such business is
lawful if licensed, governments elsewhere, including the federal, state or any
local governments in the United States may take the position that CyberBingo(TM)
is being played unlawfully in their jurisdiction. Accordingly, the Company may
face criminal prosecution in any number of jurisdictions, either for operating
an illegal gaming operation, or as aiding and abetting others, such as its
licensees, in operating an illegal gaming operation. The Company has not devoted
any of its limited resources to investigating the legal climate in which it
operates. Many of the issues facing the Company are the same as those facing all
other e-commerce providers, as current laws are not clear as to who, if anyone,
has jurisdiction over Internet based commerce. As we noted above, a number of
proposals have been presented in the United States congress to expressly ban
Internet gaming, although none of these proposals have yet been enacted.
Although the Company intends to do business worldwide, any enforceable ban on
Internet gaming in the United States would have a material adverse effect on the
Company's business.
12
<PAGE>
9. RESEARCH AND DEVELOPMENT
Present allocations to research and development are 21% of total expenses.
Subject to receipt of adequate financing, our intention is to spend between
10-15% of future revenues on development of new software products and services.
10. EMPLOYEES
The Company presently has 5 employees, 3 of which are full time employees.
Item 2. Management's Discussion and Analysis or Plan of Operation
PLAN OF OPERATION
The Company has historically generated minimal revenues, having operated
throughout 1998 without revenue until May, 1998. As of June, 1999, the Company
is generating gross sales in the $25,000-35,000 per month range, which are
adequate to cover current cash expenses. We plan to raise $10 million in order
to expand our operations.
We intend to expand operations through the development of our sub-license
model and the addition of new software products. Should the company not complete
suitable financing, it will continue operating, with the expectation that
revenue will continue to increase on a quarterly basis.
If the Company raises adequate financing, it expects to add 10-20 employees
during the next twelve months. If the Company cannot obtain the financing it
seeks, the Company will add employees only as cash flow allows.
Item 3. Description of Property
The Company's interim corporate headquarters are located at 300 Pearl
Street, Suite 200, Buffalo, NY 14202. The Company has use of this space through
a sublease arrangement from US Address Inc. in Buffalo, New York. The lease is
for six months ending in August, 1999. This is a shared office facility.
Management will be leasing permanent office facilities in the next twelve (12)
month period.
The Company has additional facilities located at 345 Lakeshore Blvd. W.,
Suite 207 in Oakville, Ontario, Canada, which houses the offices of its
wholly-owned subsidiary, Precyse Corporation. The lease is for one year and ends
on March 31, 2000. The total lease obligation is CAD$1,186.00 per month. This
office will also be replaced by larger premises should dot com be successful in
its acquisition of suitable financing.
There are currently no proposed programs for the renovation, improvement or
development of the properties currently leased by the Company.
13
<PAGE>
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth information with respect to ownership of the
Company's securities by its officers and directors and by any person (including
any "group") who is the beneficial owner of more than 5% of the Company's common
stock:
Name And Address Amount and Nature of Percent Of
Of Owner (1) Beneficial Owner (2) Class
------------ -------------------- -----
Ken Lusk 1,028,000 9.8%
Scott White 912,000 8.7
Perry Malone 912,000 8.7
Ted Colivas 912,000 8.7
Euroswiss Securities Limited 900,000 8.6
Marie Rose Holdings Limited 750,000 7.1
George White 50,000 (3) Nil
John Reilly 50,000 (3) Nil
Andre Kern 100,000 (3) Nil
All officers and directors as a group 3,964,000 37.00%
(eight persons)
(1) All persons have an address c/o the Company, 300 Pearl Street, Suite
200, Buffalo, NY 14202, except Euroswiss Securities Limited, whose
address is 8 Queensway House, Queen Street, St. Heller (Jersey) C.I.
and Marie Rose Holdings Limited, whose address is P.O. Box 588, St.
Peter Port, Guernsey, C.I .
(2) Includes shares of common stock currently owned and any shares as to
which the holder may become the owner within 60 days, such as by the
exercise of options.
(3) Consists solely of options to purchase common stock at $3.00 per
share.
Item 5. Directors, Executive Officers and Significant Employees
A. MANAGEMENT, EXECUTIVE OFFICERS AND DIRECTORS
The Company's executive officers and directors are as follows:
Name Age Position
- ---- --- --------
Ken Lusk.............. 45 Director and Chairman
Scott White........... 37 Director, President and CEO
George White.......... 65 Director
Perry Malone.......... 37 Director and Vice President of Technology
Ted Colivas........... 38 Vice President, Operations
Andre Kern............ 37 Controller and Vice President, Investor Relations
Howard Rubinoff....... 40 Secretary and General Counsel
John Reilly........... 40 Director
14
<PAGE>
Scott White - President and CEO: Mr. White is a lawyer, called to the bar in the
Province of Ontario in 1989. He is a graduate from the University of Toronto
with a bachelor of arts degree and the University of Windsor with a bachelor of
laws degree. Over the past 10 years, Mr. White has acquired extensive experience
in the completion of public and private financing; compliance and the
development of corporate strategy and policy for small-cap companies. Mr. White
is skilled in the identification, analysis and resolution of operating problems
within organizations and the implementation of financial and operational goals.
Perry Malone - Director and Vice President Technology: Mr. Malone is a graduate
of Ryerson University in Toronto with a bachelor degree in Engineering. Since
1984, Mr. Malone has acquired extensive experience as a computer systems
architect and engineer. Providing consulting services to some of Canada's
leading corporations such as IBM Canada, Toronto Dominion Securities, Bell
Canada and Canadian Pacific. Mr. Malone has extensive knowledge in systems
integration and software development in applications with cutting edge
client/server and Internet development tools.
Ted Colivas - Vice President Operations: Mr. Colivas graduated from the
University of Toronto in 1987 with a bachelor of science degree in Physics.
Since 1987, Mr. Colivas has acquired extensive experience as a computer systems
specialist in a wide variety of enterprise wide IT/IS operations and management.
Mr. Colivas has provided consulting services to some of Canada's leading
corporations such as IBM Canada, Canadian Pacific and Ericsson Communications.
Mr. Colivas contributes in areas of E-commerce and E-business, which includes
business process reengineering and mapping of business strategy development.
Andre Kern - Controller: Mr. Kern was appointed to the position of Controller in
January 1999. Since 1996, Mr. Kern has served as Corporate Controller for Devtek
Corporation, which operates as a Canadian public company, listed on the Toronto
Stock Exchange. Prior to his employment with Devtek, Mr. Kern has held senior
financial positions with other publicly traded companies where he acquired
excellent exposure to securities regulation and compliance in Canada and the
United States. Mr. Kern has a bachelor of commerce degree from the University of
Toronto and is a Professional Chartered Accountant.
Howard D. Rubinoff - Secretary and Corporate Counsel: Mr. Rubinoff is a partner
of Fogler, Rubinoff Barristers & Solicitors and was called to the Ontario bar in
1985. Mr. Rubinoff graduated with a bachelor degree in arts from York University
and a bachelor of laws degree from the University of Windsor. He also attended
the Detroit College of Law for one semester and took courses at the University
of Detroit. Mr. Rubinoff practices primarily in the area of corporate/commercial
law with emphasis on mergers and acquisitions and financing. In the last few
years, he has been involved in a number of major restructurings of Fortune 500
companies.
Kenneth R. Lusk - Director and Chairman: Mr. Lusk is a Professional Chartered
Accountant in the Province of Ontario and possesses a bachelor of commerce
degree from Queens University in Kingston. Mr. Lusk has worked with major North
American real estate developers and major
15
<PAGE>
Federal Crown corporations. His responsibilities included overseeing the
property development activities in both the United States and Canada, and a
variety of financial, treasury management and corporate planning functions.
George S. White - Director: Mr. White has acquired more than 30 years of
experience as a senior officer, director and management consultant with Fortune
500 companies. Prior to his retirement in 1994, Mr. White served as a Vice
President and General Manager of Westburne Industries, which is North America's
largest distributor of electronic, electrical and plumbing supplies. In addition
to his experience with Fortune 500 companies, over the past 30 years, Mr. White
has provided consulting advice on mergers, acquisitions, marketing and public
relations for a variety of public small-cap companies in Canada and the United
States.
John F. Reilly - Director: Mr. Reilly is currently the Managing Director for
State Street Brokerage Services (Canada) Inc. State Street is one of the world's
largest financial institutions specializing in custody, trust, investment
management and brokerage. Prior to joining State Street Mr. Reilly was CEO of
Versus Brokerage Services, President of Versus Brokerage Services (US), and
Managing Director CEO of Versus Technologies. He was primarily responsible for
bringing E*Trade, the Internet securities dealer to Canada and launching it
under Versus Brokerage Services. Prior to co-founding Versus, Mr. Reilly was
Vice President Electronic Trading at RBC Dominion Securities. In the 1980s, Mr.
Reilly spent 3 years with Reuters specializing in market data and trading room
systems and six years as a management consultant. Mr. Reilly obtained a Bachelor
of Business Administration, Finance from Wilfrid Laurier in 1981 and has taken
numerous industry-related courses and qualifications including the Partners,
Officer and Directors Exam.
All directors are elected annually. George S. White and Scott F. White are
father-son. There are no other family relationships among the Company's officers
and directors.
No director, officer, significant employee or consultant has been convicted
in a criminal proceeding, exclusive of traffic violations.
No director, officer, significant employee or consultant has been
permanently or temporarily enjoined, barred, suspended or otherwise limited from
involvement in any type of business, securities or banking activities.
No director, officer or significant employee has been convicted of
violating a federal or state securities or commodities law.
Item 6. Executive Compensation
A. REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
No compensation was paid in 1998 to any officer or director of the Company.
In March of 1999, Mr. Malone entered into a Consulting Agreement with the
Company, which agreement provides for his full-time and attention to the
Company's information technology
16
<PAGE>
requirements. The Consulting Agreement provides for remuneration based at a rate
of $85.00 per hour, payable monthly. The term of this agreement is for one year,
renewable automatically for additional one-year terms. Mr. Malone's reasonable
expenses are paid by the Company.
In May of 1999, Mr. Colivas entered into a Consulting Agreement with the
company, which agreement provides for his full-time an attention to the
company's information technology requirements. The Consulting Agreement provides
for remuneration based at a rate of $65.00 per hour, payable monthly. The term
of this agreement is for six months, renewable automatically for additional one
year terms. Mr. Colivas' reasonable expenses are paid by the Company.
B. COMPENSATION OF DIRECTORS
No compensation was paid to any director in 1998. The Company has no plans to
pay its directors in 1999 other than to reimburse them for actual expenses in
attending meetings.
Item 7. Certain Relationships and Related Transactions
None applicable.
Item 8. Description of Securities
The Company's authorized capital consists of 50,000,000 shares of common stock.
At June 15, 1999, there were 10,500,000 shares of common stock issued and
outstanding. In addition, the Company has outstanding options to purchase
1,445,000 shares of common stock at a price of $3.00 per share, all of which
were granted in 1999. The holders of common stock are entitled to one vote per
share on all matters voted on by the stockholders, including elections of
directors. The holders of shares of common stock will exclusively possess all
voting power. The holders of common stock are entitled to receive dividends
when, as and if declared by the board of directors out of funds legally
available therefor. The terms of the common stock do not grant to the holders
thereof any preemptive, subscription, redemption, conversion or sinking fund
rights. The holders of common stock are entitled to share ratably in the assets
of dot com legally available for distribution to stockholders in the event of
the liquidation, dissolution or winding up of dot com.
pARt II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
dot com common stock is currently listed on the OTC Bulletin Board under
the symbol "DCEG." For each quarter since the beginning of 1999, the high and
low bid quotations for our common stock, as reported by Nasdaq, were as follows:
17
<PAGE>
High Low
---- ---
1999
First Quarter 5-1/4 3-3/8
Second Quarter (through June 18, 1999) 5-3/8 3-3/4
The foregoing bid quotations reflect inter-dealer prices, without retail
mark-up, mark-downs or commissions and may not necessarily represent actual
transactions.
At June 1, 1999, the Company had 26 shareholders of record. The Company has
never paid a dividend, and has no intention of paying dividends for the
foreseeable future.
Item 2. Legal Proceedings
The Company is not a party to any litigation.
Item 3. Changes in and Disagreements with Accountants
Not applicable.
Item 4. Recent Sales of Unregistered Securities
The Company issued 9,420,000 shares of common stock at a price of $0.001
per share for total proceeds of $9,420 on January 29, 1999 (the date when
Affiliated Adjusters acquired the Precyse Corporation) to 19 investors, 13 of
whom were accredited investors, in an offering exempt from registration under
the Securities Act of 1933 pursuant to Rule 504. No broker was engaged in such
offering. The Company issued 80,000 shares of common stock at a price of $3.00
per share for total proceed of $240,000 on February 2, 1999 to one accredited
investor, in an offering exempt from registration under the Securities Act if
1933 pursuant to Rule 504. No broker was engaged in such offering. The Company
has granted options to 14 employees, officers, directors and consultants
totaling options to purchase up to 1,445,000 shares, all at an exercise price of
$3.00 per share. Such options were granted pursuant to an exemption from
registration under the Securities Act of 1933 pursuant to Rule 701.
Item 5. Indemnification of Directors and Officers
The Company's Articles of Incorporation provide that the Company's officers
and directors shall have no liability to the Company or its shareholders to the
maximum extent permitted by Florida law. The Company's bylaws provide for the
maximum indemnification of officers and directors permitted by Florida law.
18
<PAGE>
PART F/S
Item 1. Financial Statements
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditors' Report................................................
Consolidated Balance Sheet, December 31, 1998...............................
Consolidated Statement of Operations, Year ended December 31, 1998..........
Consolidated Statement of Cash Flows
Year ended December 31, 1998.......................................
Notes to Consolidated Financial Statements..................................
Consolidated Balance Sheet, March 31, 1999 (Unaudited) .....................
Consolidated Statement of Operations for the
Three Month Period ended March 31, 1999 (Unaudited)...............
Consolidated Statement of Cash Flows for the
Three Month Period ended March 31, 1999 (Unaudited)................
PART III
Item 1. Index to Exhibits (Pursuant to Item 601 of Regulation SB)
Exhibit
Number Name and/or Identification of Exhibit
------ -------------------------------------
2.1 Memorandum of Agreement among Affiliated Adjusters, Inc. and the
stockholders of The Precyse Corporation dated as of January 27, 1999
3.1 Articles of Incorporation, as amended
3.2 Bylaws
10.1 Technology License and Maintenance Agreement between The Precyse
Corporation and The CyberBingo Corporation dated December 4, 1997
10.2 Consulting Agreement between registrant and Colivas Enterprises Ltd.
dated March 16, 1999
10.3 Consulting Agreement between registrant and Pericom Systems Corp.,
undated
21 List of subsidiaries of the registrant
27 Financial data schedule
19
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
dot com Entertainment Group, Inc.
By: /s/ Scott White
Scott White, CEO
Principal Executive Officer
Date: June 30, 1999
/s/ Scott White Principal June 30, 1999
Scott White Executive Officer
and Principal Accounting Officer
______________________________ Director June ___, 1999
Ken Lusk
/s/ George White Director June 30, 1999
George White
/s/ Perry Malone Director June 30, 1999
Perry Malone
/s/ John Reilly Director June 30, 1999
John Reilly
20
<PAGE>
PRECYSE CORPORATION
FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
DECEMBER 31, 1998
<PAGE>
PRECYSE CORPORATION
DECEMBER 31, 1998
CONTENTS
Page
----
Auditors' Report 1
Financial statements
(Stated in U.S. Dollars)
Balance sheet 2
Statement of income and retained earnings 3
Statement of changes in financial position 4
Notes to financial statements 5 - 6
<PAGE>
AUDITORS' REPORT
To the shareholders of
Precyse Corporation
We have audited the balance sheet of Precyse Corporation as at December 31, 1998
and the statements of income and retained earnings, and changes in financial
position for the year then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable
assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at December 31, 1998 and the
results of its operations and changes in its financial position for the year
then ended in accordance with generally accepted accounting principles.
/s/ ROSENSWIG CARERE McRAE
Toronto, Canada
June 29, 1999 Chartered Accountants
<PAGE>
PRECYSE CORPORATION
BALANCE SHEET
(Stated in U.S. Dollars)
DECEMBER 31, 1998
1998 1997
-------- --------
(unaudited)
ASSETS
Current
Cash $ 3,419 $ 11,045
Accounts receivable 12,267 15,449
-------- --------
$ 15,686 $ 26,494
======== ========
LIABILITIES
Current
Accounts payable and accrued liabilities $ -- $ 30,550
Income taxes payable 3,400 --
Shareholder's loan 2,485 2,689
-------- --------
5,885 33,369
-------- --------
SHAREHOLDERS' EQUITY
Share capital (Note 3) 130 130
Retained earnings (deficit) 9,671 (6,875)
-------- --------
9,801 (6,745)
-------- --------
Approved on behalf of the Board:
_________________________ , Director ________________, Director
See accompanying notes. 2
<PAGE>
PRECYSE CORPORATION
STATEMENT OF INCOME AND RETAINED EARNINGS
(Stated in U.S. Dollars)
YEAR ENDED DECEMBER 31, 1998
1998 1997
--------- ---------
(unaudited)
Revenue $ 121,535 $ 1,536
Expenses
Development 73,856 --
General and administrative 27,733 8,411
--------- ---------
101,589 8,411
--------- ---------
Income before income taxes 19,946 (6,875)
Income taxes - current 3,400 --
--------- ---------
Net income for the year 16,546 (6,875)
Retained earnings, beginning of year (6,875) --
--------- ---------
Retained earnings, end of year $ 9,671 $ (6,875)
========= =========
See accompanying notes. 3
<PAGE>
PRECYSE CORPORATION
STATEMENT OF CHANGES IN FINANCIAL POSITION
(Stated in U.S. Dollars)
YEAR ENDED DECEMBER 31, 1998
Cash provided from:
Operating activities
Net income for the year $ 16,546
Changes in non-cash working capital
Accounts receivable 3,182
Income taxes payable 3,400
Accounts payable and accrued liabilities (30,550)
--------
(7,422)
Financing activities
Shareholder loan (204)
Change in cash during year (7,626)
Cash, beginning of year 11,045
Cash, end of year $ 3,419
========
See accompanying notes. 4
<PAGE>
PRECYSE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
DECEMBER 31, 1998
1. Incorporation
The Company was incorporated on November 26, 1996 under The Business
Corporations Act of Ontario.
2. Significant accounting policies
These financial statements have been prepared in United States Dollars
using accounting principles generally accepted in Canada ("Canadian GAAP")
and accepted in the United States ("U.S. GAAP").
3. Share capital
The Company's authorized share capital consists of an unlimited number of
Class A shares, Class B shares, Class C shares and common shares.
At December 31, 1998, 130 common shares had been issued for aggregate
consideration of $130.
4. Commitments
(a) The Company has entered into operating leases for computers. The
aggregate payments under the leases are as follows:
1999 $18,780
2000 $18,780
(b) Subsequent to year end the company entered into a one year lease for
premises for $14,000 per year.
5. U.S. Dollar presentation
The United States dollar is the principal currency of the company's
business and accordingly these financial statements are expressed in United
States dollars.
5
<PAGE>
PRECYSE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
DECEMBER 31, 1998
6. Year 2000 issue
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the Year 2000 issue
may be experienced before, on or after January 1, 2000 and, if not
addressed, the impact on operations and financial reporting may range from
minor errors to significant systems failure which could affect an entity's
ability to conduct normal business operations. It is not possible to be
certain that all aspects of the Year 2000 issue affecting the entity
including those related to the efforts of customers, suppliers or other
third parties, will be fully resolved.
7. Financial instruments
a) Nature of operations
The Company is in the business of the development and licensing of
intellectual property.
b) Fair value
The carrying amount of cash, accounts receivable and accounts payable,
and accrued liabilities approximate their fair value due to the
short-term maturity of theses instruments.
8. Subsequent event
Subsequent to the year-end, all the common shares of the Company were
purchased by a public company.
6
<PAGE>
DOT COM ENTERTAINMENT GROUP, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
As at March 31, 1999
(unaudited)
Cash $ 153,221
Accounts receivable 87,702
Prepaid expenses 16,500
---------
Current assets 257,423
---------
---------
$ 257,423
=========
Current Liabilities $ 7,118
---------
Total liabilities 7,118
---------
Stockholders' equity
Common stock, $0.001 par value
authorized 50,000,000 shares
issued and outstanding at
February 28, 1999 - 10,500,000 shares 10,500
Additional paid in capital 242,554
Retained earnings (deficit) (2,749)
---------
250,305
---------
---------
$ 257,423
=========
<PAGE>
DOT COM ENTERTAINMENT GROUP, INC.
(A Development Stage Company)
CONSOLIDATED INCOME STATEMENT
Three months ended March 31, 1999
(unaudited)
Revenues
Royalties $ 55,306
Support & Maintenance 10,000
Advertising 743
----------
66,049
Expenses
Marketing 25,800
Development 14,221
General and administrative 25,143
----------
65,164
----------
Net income (loss) $ 885
==========
Weighted average number of shares
outstanding 7,666,667
----------
Earnings (loss) per share $ 0.00
==========
<PAGE>
DOT COM ENTERTAINMENT GROUP, INC.
(A Development Stage Company)
CONSOLIDATED CASH FLOW STATEMENT
Three months ended March 31, 1999
(unaudited)
- -------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income for the period $ 885
- -------------------------------------------------------------------------------
885
Changes in non-cash working capital related to operations
Accounts receivable (86,702)
Prepaid expenses (16,500)
Accounts payable 7,118
- -------------------------------------------------------------------------------
Cash used in operating activities (95,199)
- -------------------------------------------------------------------------------
INVESTMENT ACTIVITIES
Acquisition of The Precyse Corporation (1,000)
- -------------------------------------------------------------------------------
Cash used in investment activities (1,000)
- -------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issuance of common stock 9,500
Addional paid in capital 239,920
- -------------------------------------------------------------------------------
Cash provided by (used in) financing activities 249,420
- -------------------------------------------------------------------------------
Net increase (decrease) in cash during the period 153,221
Cash position, beginning of period --
- -------------------------------------------------------------------------------
Cash position, end of period $153,221
================================================================================
A. Cash position
Cash position is defined as cash on hand and balances with banks
B. Interest and income taxes paid
Interest paid --
Income taxes paid --
MEMORANDUM OF AGREEMENT made as of the 27th day of January, 1999.
B E T W E E N :
PERICOM SYSTEMS CORPORATION, SANNEK ASSOCIATES, INC., GLOBAL
INVESTMENTS AND TRADING LTD., 1025504 ONTARIO LTD., COLIVAS
ENTERPRISES LTD., USS ENTERPRISE INC.
(collectively hereinafter referred to as the "Vendors")
OF THE FIRST PART;
- and -
AFFILIATED ADJUSTERS, INC.
(hereinafter referred to as the "Purchaser")
OF THE SECOND PART.
WHEREAS the Vendors are the registered and beneficial owners of all of the
issued and outstanding shares in the capital of The Precyse Corporation (the
"Corporation"), which shares are hereinafter referred to as the "Purchased
Shares";
AND WHEREAS the parties hereto have agreed that the Vendors
shall sell and the Purchaser shall purchase from the Vendors the Purchased
Shares on the terms and conditions hereinafter set out;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. The foregoing recitals are true in substance and in fact.
<PAGE>
-2-
2. Subject to the terms and conditions hereof, the Vendors covenant and agree
to sell, assign and transfer to the Purchaser and the Purchaser covenants
and agrees to purchase from the Vendors all (and not less than all) of the
Purchased Shares in the capital stock of the Corporation controlled by the
Vendors for the purchase price (the "Purchase Price") payable as set out in
Section 3 hereof.
3. The Purchase Price for the Purchased Shares shall be the sum of $7.353 per
share of lawful money of the United States of America (the total Purchase
Price for all of these outstanding shares being $1,000.00).
4. The Purchase Price shall be payable to or as directors by the Vendors by
cheque payable on the Closing Date.
5. The closing of this transaction shall take place no later than January 27,
1999, or such other date as may be agreed to between the parties hereto
(the "Closing Date").
6. On the Closing Date, upon fulfilment of all the conditions set out herein,
the Vendors shall deliver to the Purchaser the certificates representing
all the Purchased Shares duly endorsed in favour of the Purchaser.
7. In connection with the purchase and sale of the Purchased Shares, each of
the Vendors represents and warrants to the Purchaser as follows:
(a) the authorized capital of the Corporation consists of an unlimited
number of common shares of which 130 have been duly issued and are
outstanding as fully paid and non-assessable;
(b) the shareholders of record are as follows:
Number of
Name of Shareholder Common Shares
------------------- -------------
Pericom Systems Corporation 31
Sannek Associates, Inc. 30
Global Investments and Trading Ltd. 7
1025504 Ontario Ltd. 31
Colivas Enterprises Ltd. 31
USS Enterprise Inc. 6
<PAGE>
-3-
and such shares are owned by the Vendors, are held with good and
marketable title, free and clear of all mortgages, liens, charges,
security interests, adverse claims, pledges, encumbrances and demands
whatsoever;
(c) no person, firm or corporation has any agreement or option or any
right (whether by law, pre-emptive or contractual and including
convertible securities, warrants or convertible obligations of any
nature) for the purchase or the issue of either the Purchased Shares
or any unissued shares in the capital stock of the Corporation;
(d) the entering into of this agreement and the transactions contemplated
hereby will not result in the violation of any of the terms and
provisions of the constating documents or by-laws of the Vendors or of
any indenture or other agreement, written or oral, to which the
Vendors may be a party;
(e) this agreement has been duly executed and delivered by the Vendors and
is a valid and binding obligation of the Vendors enforceable in
accordance with its terms;
(f) the Vendors are not insolvent, have not committed an act of
bankruptcy, proposed a compromise or arrangement to their creditors
generally, had any petition for a receiving order in bankruptcy filed
against them, taken any proceeding with respect to a compromise or
arrangement, taken any proceeding to have themselves declared
bankrupt, taken any proceeding to have a receiver appointed over any
part of their assets, had any encumbrancer take possession of any of
their property, or had any execution or distress become enforceable or
become levied upon any of their property;
(g) to the Vendors' knowledge, there are no existing or threatened legal
actions or claims against the Corporation; and
(h) there are no liens, charges or encumbrances of any kind whatsoever on
the assets of the Corporation.
8. In connection with the purchase and sale of the Purchased Shares, Pericom
Systems Corporation, 1022504 Ontario Ltd. and Colivas Enterprises Ltd.
hereby represent and warrant to the Purchaser as follows:
(a) the unaudited internal statements dated December 31, 1998 and attached
hereto as Schedule "A" fairly represent the financial position of the
Corporation as at the date of such statements;
(b) there are no employees of the Corporation; and
<PAGE>
-4-
(c) the business of the Corporation is described in Schedule "B" attached
hereto and such schedule fairly represents the business presently
being carried on by the Corporation;
9. After the execution hereof, the parties shall execute all such further
instruments and assurances and shall do all such other acts and things as
may be necessary or desirable in connection with the transactions
contemplated herein, including the transfer of registered and beneficial
ownership of the Purchased Shares to the Purchaser.
10. This agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the Province of
Ontario. Each of the parties hereto hereby irrevocably submits and attorns
to the jurisdiction of the courts of the Province of Ontario.
11. The provisions hereof shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators,
successors and assigns.
IN WITNESS WHEREOF the parties hereto have executed this agreement as of
the date first written above.
PERICOM SYSTEMS CORPORATION SANNEK ASSOCIATES, INC.
Per: ______________________ Per:
GLOBAL INVESTMENTS AND
TRADING LTD. 1025504 ONTARIO LTD.
Per: ______________________ Per:
COLIVAS ENTERPRISES LTD. USS ENTERPRISE INC.
Per: _______________________ Per:
AFFILIATED ADJUSTERS, INC.
Per:
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
AFFILIATED ADJUSTERS, INC.
Pursuant to the provisions of section 607.1006, Florida Statutes, this
Florida profit corporation adopts the following articles of amendment to its
articles of incorporation:
FIRST: Amendment adopted:
Article I is hereby amended to read as follows:
The name of this corporation is dot com Entertainment Group, Inc.
SECOND: There is no change to the capital of the corporation.
THIRD: This amendment was adopted on January 29, 1999.
FOURTH: The amendment was approved by the shareholders. The number of votes
cast for the amendment was sufficient for approval.
Signed this 29th day of January, 1999.
Scott White, President
Prepared by: Thomas Braun, Articled Student
Venture Law Corporation
#618 - 688 W. Hastings Street
Vancouver, BC V6L 3E3
Tel: (604) 659-9188
Fax: (604) 659-9178
<PAGE>
AFFILIATED ADJUSTERS, INC.
ARTICLE I
NAME
The name of the Corporation to AFFILIATED ADJUSTERS, INC.
ARTICLE II
DURATION
This Corporation shall have perpetual existence.
ARTICLE III
PURPOSE
This Corporation is organized for the following purposes:
A. To engage in the business of any insurance adjuster agency. To furnish the
services of licensed insurance adjustors and generally to accept employment, or
enter into and perform contracts, to adjust, or otherwise participate in the
disposal of, claims under or in connection with insurance policies; and in the
course thereof to furnish, or to agree to make or make investigations for the
purpose of obtaining information with reference to any one or more of the
following: crime or wrongs done or threatened against the United States of
America or any state or territory thereof; the identity, habits, conduct,
business, occupation, honesty, integrity, credibility, knowledge,
trustworthiness, efficiency, loyalty, activity, movement, whereabouts,
affiliations, associations, transactions, acts, reputation, or character of any
person; the location, disposition, or recovery of lost or stolen property; the
cause or responsibility for fires, libels, losses, accidents, or damage or
injury to persons or to property; or the securing of evidence to be sued before
any court, board, office, or investigating committee, and generally to solicit
such business.
<PAGE>
B. To such extent as a corporation organized under the Business Corporation Law
of this state may now or hereafter lawfully do, to do, either as principal or
agent and either alone or in connection with other corporations, firms, or
individuals, all and everything necessary, suitable, convenient, or proper for,
or in connection with, or incident to, the accomplishment of any of the purposes
or the attainment of any one or more of the objects herein enumerated, or
designed directly or indirectly to promote the interests of this Corporation or
to enhance the value of its properties; and in general to do any and all things
and exercise any and all powers, rights, and privileges which a corporation may
now or hereafter be organized to do or to exercise under the Business
Corporation Law of this state or under any act amendotory thereof, supplemental
thereto, or substituted therefor.
C. To cause or allow the legal title, or any estate, right, or interest in any
property owned, acquired, controlled, or operated by this corporation to remain
or to be vested in the name of any person, firm, organization, association, or
corporation, as agent, trustee, or nominee of this Corporation, upon such terms
or conditions which the Board of Directors may consider for the benefit of this
Corporation.
D. To engage, transact, or enter into any and all business or activity permitted
under the laws of the United States and the State of Florida
ARTICLE IV
??
This Corporation in authorized to issue 100 shares of $.10 par value common
stock.
ARTICLE V
PREEMPTIVE RIGHTS
Every shareholder, upon the sale for cash of any new stock of this
Corporation of the same kind, class or series as that which he already holds
shall have the right to purchase its pro rata share thereof (as nearly as may be
done without the issuance of fractional shares at the price at which it is
offered to others.
ARTICLE VI
INITIAL REGISTERED OFFICE AND AGENT
The street address of the initia1 registered office of this Corporation is
700 Brickell Avenue, Suite 900, Miami, Florida 33131 and the name of the initial
registered agent of this Corporation at that address is Stephen S. Nuell.
ARTICLE VII
INITIAL BOARD OF DIRECTORS
This Corporation shall have one (1) director initially. The number of
Directors may be either increased or diminished from lime to time by the By-Laws
but shall never be less than one (1). The names and addresses of the Initial
Director of this Corporation is:
ROBERT J. HEDEMAN
7840 Camino Real. P-209
Miami, Fla. 33143
<PAGE>
ARTICLE VIII
INCORPORATOR
The name and address of the person signing these Articles is Stephen S.
Nuell, 700 Brickell Ave., Suite 900, Miami, Florida.
IN WITNESS WHEREOF, the undersigned subscriber has executed these Articles
of Incorporation this 10th day of December, 1981
STEPHEN S. NUELL
Subscriber
STATE OF FLORIDA )
COUNTY OF DADE ) ss
Before me the undersigned authority, authorized to take acknowledgments in
the State and County set forth above, personally appeared Stephen S. Nuell,
known to me and known by me to be the person who executed the foregoing Articles
of Incorporation, and he acknowledged before me that he executed those Articles
of Incorporation for the purposes set forth herein.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, in the State and County aforesaid, this 10th day of December, 1981
Notary Public, State of Florida
<PAGE>
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR
THE SERVICE OF PROCESS WITHIN THIS STATE, NAMING AGENT UPON
WHOM PROCESS MAY BE SERVED.
In pursuant of Chapter 48.091, Florida Statutes, the following is
submitted, in compliance with said Act:
First -- That AFFILIATED ADJUSTERS, INC. desiring to organize under the
laws of the State of Florida with its principal office, as indicated in the
Articles of Incorporation at City of Miami, County of Dade State of Florida has
named Stephen S. Nuell located at 700 Brickell Ave., Suite 900,City of Miami ,
County of Dade, State of Florida , as its agent to accept service of process
within this state.
ACKNOWLEDGMENT: (MUST BE SIGNED BY DESIGNATED AGENT)
Having been named to accept service of process for the above stated
corporation, at place designated in this certificate, I hereby accept to act in
this capacity, and agree to comply with the provision of said Act re1ative to
keeping open said office.
BY:
(RESIDENT AGENT)
<PAGE>
ARTICLES OF AMENDMENT TO
AFFILIATED ADJUSTERS, INC.
THE UNDERSIGNED, being the president of AFFILIATED ADJUSTERS, INC., does
hereby amend its Articles of Incorporation, effective August 10, 1998, as
follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation is AFFILIATED ADJUSTERS, INC.
ARTICLE II
PURPOSE
The Corporation shall be organized for any and all purposes authorized
under the laws of the state of Florida.
ARTICLE III
PERIOD OF EXISTENCE
The period during which the Corporation shall continue is perpetual.
ARTICLE IV
SHARES
The capital stock of this corporation shall consist of 50,000,000 shares of
common stock, $.001 par value.
ARTICLE V
PLACE OF BUSINESS
The address of the principal place of business of this corporation in the
State of Florida shall be 7695 S.W. 104th Street, Suite 210, Miami, FL 33156.
The Board of Directors may at any time and from time to time move the principal
office of this corporation.
ARTICLE VI
DIRECTORS AND OFFICERS
The business of this corporation shall be managed by its Board of
Directors. The number of such directors shall be not be less than one (1) and,
subject to such minimum may be increased or decreased from time to time in the
manner provided in the By-Laws.
<PAGE>
ARTICLE VII
DENIAL OF PREEMPTIVE RIGHTS
No shareholder shall have any right to acquire shares or other securities
of the Corporation except to the extent such right may be granted by an
amendment to these Articles of Incorporation or by a resolution of the board of
Directors.
ARTICLE VIII
AMENDMENT OF BYLAWS
Anything in these Articles of Incorporation, the Bylaws, or the Florida
Corporation Act notwithstanding, bylaws shall not be adopted, modified, amended
or repealed by the shareholders of the Corporation except upon the affirmative
vote of a simple majority vote of the holders of all the issued and outstanding
shares of the corporation entitled to vote thereon.
ARTICLE IX
SHAREHOLDERS
9. 1 Inspection of Books. The board of directors shall make reasonable
rules to determine at what times and places and under what conditions the books
of the Corporation shall be open to inspection by shareholders or a duly
appointed representative of a shareholder.
9.2. Control Share Acquisition. The provisions relating to any control
share acquisition as contained in Florida Statutes now, or hereinafter amended,
and any successor provision shall not apply to the Corporation.
9.3. Quorum. The holders of shares entitled to one-third of the votes at a
meeting of shareholder's shall constitute a quorum.
9.4. Required Vote. Acts of shareholders shall require the approval of
holders of 50.01% of the outstanding votes of shareholders.
ARTICLE X
LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
To the fullest extent permitted by law, no director or officer of the
Corporation shall be personally liable to the Corporation or its shareholders
for damages for breach of any duty owed to the Corporation or its shareholders.
In addition, the Corporation shall have the power, in its By-Laws or in any
resolution of its stockholders or directors, to undertake to indemnify the
officers and directors of this corporation against any contingency or peril as
may be determined to be in the best interests of this corporation, and in
conjunction therewith, to procure, at this corporation's expense, policies of
insurance.
<PAGE>
ARTICLE XI
CONTRACTS
No contract or other transaction between this corporation and any person,
firm or corporation shall be affected by the fact that any officer or director
of this corporation is such other party or is, or at some time in the future
becomes, an officer, director or partner of such other contracting party, or has
now or hereafter a direct or indirect interest in such contract.
I hereby certify that the following was adopted by a majority vote of the
shareholders and directors of the corporation on August 10, 1998 and that the
number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto subscribed to and executed this
Amendment to Articles of Incorporation this on August 10, 1998.
Eric P. Littman, President
The foregoing instrument was acknowledged before me on August 10, 1998, by Eric
P. Littman, who is personally known to me.
Notary Public
My commission expires:
BYLAWS
OF
dot com Entertainment Group, Inc.
(A FLORIDA CORPORATION)
<PAGE>
TABLE OF CONTENTS
Page(s)
ARTICLE ONE OFFICES............................................................1
Section 1. Principal Office.....................................1
Section 2. Other Offices........................................1
ARTICLE TWO MEETINGS OF SHAREHOLDERS...........................................1
Section 1. Place................................................1
Section 2. Time of Annual Meeting...............................1
Section 3. Call of Special Meetings.............................1
Section 4. Conduct of Meetings..................................2
Section 5. Notice and Waiver of Notice..........................2
Section 6. Business and Nominations for
Annual and Special Meetings.........................2
Section 7. Quorum...............................................2
Section 8. Voting Rights Per Share..............................3
Section 9. Voting of Shares.....................................3
Section 10. Proxies..............................................3
Section 11. Shareholder List.....................................4
Section 12. Action Without Meeting...............................4
Section 13. Fixing Record Date...................................4
Section 14. Inspectors and Judges................................5
Section 15. Voting for Directors.................................5
ARTICLE THREE..................................................................5
ARTICLE Three DIRECTORS........................................................5
Section 1. Number; Term; Election; Qualification................5
Section 2. Resignation; Vacancies; Removal......................5
Section 3. Powers...............................................6
Section 4. Place of Meetings....................................6
Section 5. Annual Meetings......................................6
Section 6. Regular Meetings.....................................6
Section 7. Special Meetings and Notice..........................6
Section 8. Quorum and Required Vote.............................6
Section 9. Action Without Meeting...............................7
Section 10. Conference Telephone or Similar
Communications Equipment Meetings...................7
Section 11. Committees...........................................7
Section 12. Compensation of Directors............................7
<PAGE>
Page(s)
ARTICLE FOUR OFFICERS..........................................................8
Section 1. Positions............................................8
Section 2. Election of Specified Officers by Board..............8
Section 3. Election or Appointment of Other Officers............8
Section 4. Compensation.........................................8
Section 5. Term; Resignation; Removal; Vacancies................8
Section 6. Chairman of the Board................................9
Section 7. Chief Executive Officer..............................9
Section 8. President............................................9
Section 9. Vice Presidents......................................9
Section 10. Secretary............................................9
Section 11. Chief Financial Officer..............................9
Section 12. Treasurer...........................................10
Section 13. Other Officers; Employees and Agents................10
ARTICLE FIVE CERTIFICATES FOR SHARES..........................................10
Section 1. Issue of Certificates...............................10
Section 2. Legends for Preferences and
Restrictions on Transfer..........................10
Section 3. Facsimile Signatures................................11
Section 4. Lost Certificates...................................11
Section 5. Transfer of Shares..................................11
Section 6. Registered Shareholders.............................11
Section 7. Redemption of Control Shares........................11
ARTICLE SIX INDEMNIFICATION...................................................12
Section 1. Indemnification.....................................12
Section 2. Advancement of Expenses.............................12
Section 3. Severability........................................12
ARTICLE SEVEN GENERAL PROVISIONS..............................................13
Section 1. Dividends...........................................13
Section 2. Reserves............................................13
Section 3. Checks..............................................13
Section 4. Fiscal Year.........................................13
Section 5. Seal................................................13
Section 6. Gender..............................................13
ARTICLE EIGHT AMENDMENT OF BYLAWS.............................................13
ii
<PAGE>
BYLAWS
OF
dot com Entertainment Group, Inc.
ARTICLE ONE
OFFICES
Section 1. Principal Office. The principal office of dot com Entertainment
Group, Inc., a Florida corporation (the "Corporation"), shall be located at such
place determined by the Board of Directors of the Corporation (the "Board of
Directors") in accordance with applicable law.
Section 2. Other Offices. The Corporation may also have offices at such
other places, either within or without the State of Florida, as the Board of
Directors may from time to time determine or as the business of the Corporation
may require.
ARTICLE TWO
MEETINGS OF SHAREHOLDERS
Section 1. Place. All annual meetings of shareholders shall be held at such
place, within or without the State of Florida, as may be designated by the Board
of Directors and stated in the notice of the meeting or in a duly executed
waiver of notice thereof. Special meetings of shareholders may be held at such
place, within or without the State of Florida, and at such time as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Time of Annual Meeting. Annual meetings of shareholders shall be
held on such date and at such time fixed, from time to time, by the Board of
Directors, provided, that there shall be an annual meeting held every calendar
year at which the shareholders shall elect a board of directors and transact
such other business as may properly be brought before the meeting.
Section 3. Call of Special Meetings. Special meetings of the shareholders
shall be held if called in accordance with the procedures set forth in the
Corporation's Articles of Incorporation (the "Articles of Incorporation") for
the call of a special meeting of shareholders.
Section 4. Conduct of Meetings. The Chairman of the Board of Directors (or
in his absence, the President, or in his absence, such other designee of the
Chairman of the Board of Directors) shall preside at the annual and special
meetings of shareholders and shall be given full discretion in establishing the
rules and procedures to be followed in conducting the meetings, except as
otherwise provided by law or in these Bylaws.
<PAGE>
Section 5. Notice and Waiver of Notice. Except as otherwise provided by
law, written or printed notice stating the place, date and time of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) nor more than sixty
(60) days before the date of the meeting, either personally or by first-class
mail or other legally sufficient means, by or at the direction of the Chairman
of the Board, President, or the persons calling the meeting, to each shareholder
of record entitled to vote at such meeting. If the notice is mailed at least
thirty (30) days before the date of the meeting, it may be done by a class of
United States mail other than first class. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail addressed to the
shareholder at the address appearing on the stock transfer books of the
Corporation, with postage thereon prepaid. If a meeting is adjourned to another
time and/or place, and if an announcement of the adjourned time and/or place is
made at the meeting, it shall not be necessary to give notice of the adjourned
meeting unless the Board of Directors, after adjournment, fixes a new record
date for the adjourned meeting. Whenever any notice is required to be given to
any shareholder, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether signed before, during or after the time of the
meeting stated therein, and delivered to the Corporation for inclusion in the
minutes or filing with the corporate records, shall constitute an effective
waiver of such notice. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the shareholders need be specified in any
written waiver of notice. Attendance of a person at a meeting shall constitute a
waiver of (a) lack of or defective notice of such meeting, unless the person
objects at the beginning to the holding of the meeting or the transacting of any
business at the meeting, or (b) lack of or defective notice of a particular
matter at a meeting that is not within the purpose or purposes described in the
meeting notice, unless the person objects to considering such matter when it is
presented.
Section 6. Business and Nominations for Annual and Special Meetings.
Business transacted at any special meeting shall be confined to the purposes
stated in the notice thereof. At any annual meeting of shareholders, only such
business shall be conducted as shall have been properly brought before the
meeting in accordance with the requirements and procedures set forth in the
Articles of Incorporation. Only such persons who are nominated for election as
directors of the Corporation in accordance with the requirements and procedures
set forth in the Articles of Incorporation shall be eligible for election as
directors of the Corporation.
Section 7. Quorum. Shares entitled to vote as a separate voting group may
take action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. Except as otherwise provided in the Articles of
Incorporation or applicable law, shares representing a majority of the votes
pertaining to outstanding shares which are entitled to be cast on the matter by
the voting group constitute a quorum of that voting group for action on that
matter. If less than a quorum of shares are represented at a meeting, the
holders of a majority of the shares so represented may adjourn the meeting from
time to time. After a quorum has been established at any shareholders' meeting,
the subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a quorum, shall
not affect the validity of any action taken at the meeting or any adjournment
thereof. Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.
2
<PAGE>
Section 8. Voting Rights Per Share. Each outstanding share, regardless of
class, shall be entitled to vote on each matter submitted to a vote at a meeting
of shareholders, except to the extent that the voting rights of the shares of
any class are limited or denied by or pursuant to the Articles of Incorporation
or the Florida Business Corporation Act.
Section 9. Voting of Shares. A shareholder may vote at any meeting of
shareholders of the Corporation, either in person or by proxy. Shares standing
in the name of another corporation, domestic or foreign, may be voted by the
officer, agent or proxy designated by the bylaws of such corporate shareholder
or, in the absence of any applicable bylaw, by such person or persons as the
board of directors of the corporate shareholder may designate. In the absence of
any such designation, or, in case of conflicting designation by the corporate
shareholder, the chairman of the board, the president, any vice president, the
secretary and the treasurer of the corporate shareholder, in that order, shall
be presumed to be fully authorized to vote such shares. Shares held by an
administrator, executor, guardian, personal representative, or conservator may
be voted by such person, either in person or by proxy, without a transfer of
such shares into his name. Shares standing in the name of a trustee may be voted
by such person, either in person or by proxy, but no trustee shall be entitled
to vote shares held by such person without a transfer of such shares into his
name or the name of his nominee. Shares held by or under the control of a
receiver, a trustee in bankruptcy proceedings, or an assignee for the benefit of
creditors may be voted by such person without the transfer thereof into his
name. If shares stand of record in the names of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, tenants
by the entirety or otherwise, or if two or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary of the Corporation
is given notice to the contrary and is furnished with a copy of the instrument
or order appointing them or creating the relationship wherein it is so provided,
then acts with respect to voting shall have the following effect: (a) if only
one votes, in person or by proxy, his act binds all; (b) if more than one vote,
in person or by proxy, the act of the majority so voting binds all; (c) if more
than one vote, in person or by proxy, but the vote is evenly split on any
particular matter, each faction is entitled to vote the share or shares in
question proportionally; or (d) if the instrument or order so filed shows that
any such tenancy is held in unequal interest, a majority or a vote evenly split
for purposes hereof shall be a majority or a vote evenly split in interest. The
principles of this paragraph shall apply, insofar as possible, to execution of
proxies, waivers, consents, or objections and for the purpose of ascertaining
the presence of a quorum.
Section 10. Proxies. Any shareholder of the Corporation, other person
entitled to vote on behalf of a shareholder pursuant to law, or attorney-in-fact
for such persons may vote the shareholder's shares in person or by proxy. Any
shareholder of the Corporation may appoint a proxy to vote or otherwise act for
such person by signing an appointment form, either personally or by his
attorney-in-fact. An executed telegram or cablegram appearing to have been
transmitted by such person, or a photographic, photostatic, or equivalent
reproduction of an appointment form, shall be deemed a sufficient appointment
form. An appointment of a proxy is effective when received by the Secretary of
the Corporation (the "Secretary") or such other officer or agent which is
authorized to tabulate votes, and shall be valid for up to 11 months, unless a
longer period is expressly provided in the appointment form. The death or
incapacity of the shareholder appointing a proxy does not affect the right of
the Corporation to accept the proxy's authority unless notice of the death or
3
<PAGE>
incapacity is received by the Secretary or other officer or agent authorized to
tabulate votes before the proxy authority under the appointment is exercised. An
appointment of a proxy is revocable by the shareholder unless the appointment
form conspicuously states that it is irrevocable and the appointment is coupled
with an interest.
Section 11. Shareholder List. After fixing a record date for a meeting of
shareholders, the Corporation shall prepare an alphabetical list of the names of
all its shareholders who are entitled to notice of the meeting, arranged by
voting group with the address of, and the number and class and series, if any,
of shares held by each. The shareholders' list must be available for inspection
by any shareholder for a period of ten (10) days prior to the meeting or such
shorter time as exists between the record date and the meeting and continuing
through the meeting at the Corporation's principal office, at a place identified
in the meeting notice in the city where the meeting will be held, or at the
office of the Corporation's transfer agent or registrar. Any shareholder of the
Corporation or such person's agent or attorney is entitled on written demand to
inspect the shareholders' list (subject to the requirements of law), during
regular business hours and at his expense, during the period it is available for
inspection. The Corporation shall make the shareholders' list available at the
meeting of shareholders, and any shareholder or agent or attorney of such
shareholder is entitled to inspect the list at any time during the meeting or
any adjournment. The shareholders' list is prima facie evidence of the identity
of shareholders entitled to examine the shareholders' list or to vote at a
meeting of shareholders.
Section 12. Action Without Meeting. Any action required or permitted by law
to be taken at a meeting of shareholders may be taken without a meeting or
notice if a consent, or consents, in writing, setting forth the action so taken,
shall be dated and signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all voting groups and shares entitled to vote
thereon were present and voted with respect to the subject matter thereof, and
such consent shall be delivered to the Corporation, within the period required
by Section 607.0704 of the Florida Business Corporation Act, by delivery to its
principal office in the State of Florida, its principal place of business, the
Secretary or another officer or agent of the Corporation having custody of the
book in which proceedings of meetings of shareholders are recorded. Within ten
(10) days after obtaining such authorization by written consent, notice must be
given to those shareholders who have not consented in writing or who are not
entitled to vote on the action, in accordance with the requirements of Section
607.0704 of the Florida Business Corporation Act.
Section 13. Fixing Record Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any dividend, or in order
to make a determination of shareholders for any other proper purposes, the Board
of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than seventy
(70) days, and, in case of a meeting of shareholders, not less than ten (10)
days, before the meeting or action requiring such determination of shareholders.
If no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders or the determination of
shareholders entitled to receive payment of a dividend, the date before the day
on which the first notice of the meeting is mailed or the date on which the
resolutions of the Board of Directors declaring such
4
<PAGE>
dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this Section,
such determination shall apply to any adjournment thereof, except where the
Board of Directors fixes a new record date for the adjourned meeting.
Section 14. Inspectors and Judges. The Board of Directors in advance of any
meeting may, but need not, appoint one or more inspectors of election or judges
of the vote, as the case may be, to act at the meeting or any adjournment
thereof. If any inspector or inspectors, or judge or judges, are not appointed,
the person presiding at the meeting may, but need not, appoint one or more
inspectors or judges. In case any person who may be appointed as an inspector or
judge fails to appear or act, the vacancy may be filled by the Board of
Directors in advance of the meeting, or at the meeting by the person presiding
thereat. The inspectors or judges, if any, shall determine the number of shares
of stock outstanding and the voting power of each, the shares of stock
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots and consents, hear and determine
all challenges and questions arising in connection with the right to vote, count
and tabulate votes, ballots and consents, determine the result, and do such acts
as are proper to conduct the election or vote with fairness to all shareholders.
On request of the person presiding at the meeting, the inspector or inspectors
or judge or judges, if any, shall make a report in writing of any challenge,
question or matter determined by him or them, and execute a certificate of any
fact found by him or them.
Section 15. Voting for Directors. Unless otherwise provided in the Articles
of Incorporation, directors shall be elected by a plurality of the votes cast by
the shares entitled to vote in the election at a meeting at which a quorum is
present.
ARTICLE THREE
DIRECTORS
Section 1. Number; Term; Election; Qualification. The number of directors
of the Corporation shall be fixed from time to time, within the limits specified
by the Articles of Incorporation, by resolution of the Board of Directors.
Directors shall be elected in the manner and hold office for the term as
prescribed in the Articles of Incorporation. Directors must be natural persons
who are 18 years of age or older but need not be residents of the State of
Florida, shareholders of the Corporation or citizens of the United States.
Section 2. Resignation; Vacancies; Removal. A director may resign at any
time by giving written notice to the Board of Directors or the Chairman of the
Board. Such resignation shall take effect at the date of receipt of such notice
or at any later time specified therein; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
In the event the notice of resignation specifies a later effective date, the
Board of Directors may fill the pending vacancy (subject to the provisions of
the Articles of Incorporation) before the effective date if they provide that
the successor does not take office until the effective date. Director vacancies
shall be filled, and directors may be removed, in the manner prescribed in the
Corporation's Articles of Incorporation.
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Section 3. Powers. The business and affairs of the Corporation shall be
managed by the Board of Directors, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these Bylaws directed or required to be
exercised and done by the shareholders.
Section 4. Place of Meetings. Meetings of the Board of Directors, regular
or special, may be held either within or without the State of Florida.
Section 5. Annual Meetings. Unless scheduled for another time by the Board
of Directors, the first meeting of each newly elected Board of Directors shall
be held, without call or notice, immediately following each annual meeting of
shareholders.
Section 6. Regular Meetings. Regular meetings of the Board of Directors may
also be held without notice at such time and at such place as shall from time to
time be determined by the Board of Directors.
Section 7. Special Meetings and Notice. Special meetings of the Board of
Directors may be called by the President or Chairman of the Board and shall be
called by the Secretary on the written request of any two directors. At least
forty-eight (48) hours' prior written notice of the date, time and place of
special meetings of the Board of Directors shall be given to each director.
Except as required by law, neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting. Notices to
directors shall be in writing and delivered to the directors at their addresses
appearing on the books of the Corporation by personal delivery, mail or other
legally sufficient means. Subject to the provisions of the preceding sentence,
notice to directors may also be given by telegram, teletype or other form of
electronic communication. Notice by mail shall be deemed to be given at the time
when the same shall be received. Whenever any notice is required to be given to
any director, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before, during or after the meeting, shall
constitute an effective waiver of such notice. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting and a waiver of any
and all objections to the place of the meeting, the time of the meeting and the
manner in which it has been called or convened, except when a director states,
at the beginning of the meeting or promptly upon arrival at the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened.
Section 8. Quorum and Required Vote. A majority of the prescribed number of
directors determined as provided in the Articles of Incorporation shall
constitute a quorum for the transaction of business and the act of the majority
of the directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors, unless a greater number is required by the
Articles of Incorporation. Whenever, for any reason, a vacancy occurs in the
Board of Directors, a quorum shall consist of a majority of the remaining
directors until the vacancy has been filled. If a quorum shall not be present at
any meeting of the Board of Directors, a majority of the directors present
thereat may adjourn the meeting to another time and place, without notice other
than announcement at the time of adjournment. At such adjourned meeting at which
a quorum shall be present, any
6
<PAGE>
business may be transacted that might have been transacted at the meeting as
originally notified and called.
Section 9. Action Without Meeting. Any action required or permitted to be
taken at a meeting of the Board of Directors or committee thereof may be taken
without a meeting if a consent in writing, setting forth the action taken, is
signed by all of the members of the Board of Directors or the committee, as the
case may be, and such consent shall have the same force and effect as a
unanimous vote at a meeting. Action taken under this Section 9 is effective when
the last director signs the consent, unless the consent specifies a different
effective date. A consent signed under this Section 9 shall have the effect of a
meeting vote and may be described as such in any document.
Section 10. Conference Telephone or Similar Communications Equipment
Meetings. Directors and committee members may participate in and hold a meeting
by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other.
Participation in such a meeting shall constitute presence in person at the
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground the
meeting is not lawfully called or convened.
Section 11. Committees. The Board of Directors, by resolution adopted by a
majority of the whole Board of Directors, may designate from among its members
an executive committee and one or more other committees, each of which, to the
extent provided in such resolution, shall have and may exercise all of the
authority of the Board of Directors in the business and affairs of the
Corporation except where the action of the full Board of Directors is required
by applicable law. Each committee must have two or more members who serve at the
pleasure of the Board of Directors. The Board of Directors, by resolution
adopted in accordance with this Article Three, may designate one or more
directors as alternate members of any committee, who may act in the place and
stead of any absent member or members at any meeting of such committee.
Vacancies in the membership of a committee may be filled only by the Board of
Directors at a regular or special meeting of the Board of Directors. The
executive committee shall keep regular minutes of its proceedings and report the
same to the Board of Directors when required. The designation of any such
committee and the delegation thereto of authority shall not operate to relieve
the Board of Directors, or any member thereof, of any responsibility imposed
upon it or such member by law.
Section 12. Compensation of Directors. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Similarly, members of special or standing committees may be allowed
compensation for attendance at committee meetings or a stated salary as a
committee member and payment of expenses for attending committee meetings.
Directors may receive such other compensation as may be approved by the Board of
Directors.
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ARTICLE FOUR
OFFICERS
Section 1. Positions. The officers of the Corporation may consist of a
Chairman of the Board, a Chief Executive Officer, a President, one or more Vice
Presidents (any one or more of whom may be given the additional designation of
rank of Executive Vice President or Senior Vice President), a Secretary, a Chief
Financial Officer and a Treasurer. Any two or more offices may be held by the
same person. Officers other than the Chairman of the Board need not be members
of the Board of Directors. The Chairman of the Board must be a member of the
Board of Directors.
Section 2. Election of Specified Officers by Board. The Board of Directors
at its first meeting after each annual meeting of shareholders shall elect a
Chairman of the Board, a Chief Executive Officer, a President, one or more Vice
Presidents (including any Senior or Executive Vice Presidents), a Secretary, a
Chief Financial Officer and a Treasurer.
Section 3. Election or Appointment of Other Officers. Such other officers
and assistant officers and agents as may be deemed necessary may be elected or
appointed by the Board of Directors, or, unless otherwise specified herein,
appointed by the Chairman of the Board. The Board of Directors shall be advised
of appointments by the Chairman of the Board at or before the next scheduled
Board of Directors meeting.
Section 4. Compensation. The salaries, bonuses and other compensation of
the Chairman of the Board and all officers of the Corporation to be elected by
the Board of Directors pursuant to Section 2 of this Article Four shall be fixed
from time to time by the Board of Directors or pursuant to its direction. The
salaries of all other elected or appointed officers of the Corporation shall be
fixed from time to time by the Chairman of the Board or pursuant to his
direction.
Section 5. Term; Resignation; Removal; Vacancies. The officers of the
Corporation shall hold office until their successors are chosen and qualified.
Any officer or agent elected or appointed by the Board of Directors or the
Chairman of the Board may be removed, with or without cause, by the Board of
Directors, but such removal shall be without prejudice to the contract rights,
if any, of the person so removed. Any officer or agent appointed by the Chairman
of the Board pursuant to Section 3 of this Article Four may also be removed from
such office or position by the Board of Directors or the Chairman of the Board,
with or without cause. Any vacancy occurring in any office of the Corporation by
death, resignation, removal or otherwise shall be filled by the Board of
Directors, or, in the case of an officer appointed by the Chairman of the Board,
by the Chairman of the Board or the Board of Directors. Any officer of the
Corporation may resign from his respective office or position by delivering
notice to the Corporation, and such resignation shall be effective without
acceptance. Such resignation shall be effective when delivered unless the notice
specifies a later effective date. If a resignation is made effective at a later
date and the Corporation accepts the future effective date, the Board of
Directors may fill the pending vacancy before the effective date if the Board
provides that the successor does not take office until such effective date.
8
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Section 6. Chairman of the Board. The Chairman of the Board shall preside
at all meetings of the shareholders and the Board of Directors. The Chairman of
the Board shall also serve as the chairman of any executive committee.
Section 7. Chief Executive Officer. Subject to the control of the Board of
Directors, the Chief Executive Officer, in conjunction with the President, shall
have general and active management of the business of the Corporation, shall see
that all orders and resolutions of the Board of Directors are carried into
effect and shall have such powers and perform such duties as may be prescribed
by the Board of Directors. In the absence of the Chairman of the Board or in the
event the Board of Directors shall not have designated a Chairman of the Board,
the Chief Executive Officer shall preside at meetings of the shareholders and
the Board of Directors. The Chief Executive Officer shall also serve as the
vice-chairman of any executive committee.
Section 8. President. Subject to the control of the Board of Directors, the
President, in conjunction with the Chief Executive Officer, shall have general
and active management of the business of the Corporation and shall have such
powers and perform such duties as may be prescribed by the Board of Directors.
In the absence of the Chairman of the Board and the Chief Executive Officer or
in the event the Board of Directors shall not have designated a Chairman of the
Board and a Chief Executive Officer shall not have been elected, the President
shall preside at meetings of the shareholders and the Board of Directors. The
President shall also serve as the vice-chairman of any executive committee.
Section 9. Vice Presidents. The Vice Presidents, in the order of their
seniority, unless otherwise determined by the Board of Directors, shall, in the
absence or disability of the President and the Chief Executive Officer, perform
the duties and exercise the powers of the President. They shall perform such
other duties and have such other powers as the Board of Directors, the Chairman
of the Board or the Chief Executive Officer shall prescribe or as the President
may from time to time delegate. Executive Vice Presidents shall be senior to
Senior Vice Presidents, and Senior Vice Presidents shall be senior to all other
Vice Presidents.
Section 10. Secretary. The Secretary shall attend all meetings of the
shareholders and all meetings of the Board of Directors and record all the
proceedings of the meetings of the shareholders and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. The Secretary shall give, or cause to be
given, notice of all meetings of the shareholders and special meetings of the
Board of Directors and shall keep in safe custody the seal of the Corporation
and, when authorized by the Board of Directors, affix the same to any instrument
requiring it. The Secretary shall perform such other duties as may be prescribed
by the Board of Directors, the Chairman of the Board, the Chief Executive
Officer or the President.
Section 11. Chief Financial Officer. The Chief Financial Officer shall be
responsible for maintaining the financial integrity of the Corporation, shall
prepare the financial plans for the Corporation and shall monitor the financial
performance of the Corporation and its subsidiaries, as well as performing such
other duties as may be prescribed by the Board of Directors, the Chairman of the
Board, the Chief Executive Officer or the President.
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<PAGE>
Section 12. Treasurer. The Treasurer shall have the custody of corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. The Treasurer
shall disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the Chairman of the Board and the Board of Directors at its regular meetings or
when the Board of Directors so requires an account of all his transactions as
Treasurer and of the financial condition of the Corporation. The Treasurer shall
perform such other duties as may be prescribed by the Board of Directors, the
Chairman of the Board, the Chief Executive Officer or the President.
Section 13. Other Officers; Employees and Agents. Each and every other
officer, employee and agent of the Corporation shall possess, and may exercise,
such power and authority, and shall perform such duties, as may from time to
time be assigned to such person by the Board of Directors, the officer so
appointing such person or such officer or officers who may from time to time be
designated by the Board of Directors to exercise such supervisory authority.
ARTICLE FIVE
CERTIFICATES FOR SHARES
Section 1. Issue of Certificates. The shares of the Corporation shall be
represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates (and upon request every holder of uncertificated shares) shall
be entitled to have a certificate signed by or in the name of the Corporation by
the Chairman of the Board or a Vice Chairman of the Board, or the Chief
Executive Officer, President or Vice President, and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
Corporation, representing the number of shares registered in certificate form.
Section 2. Legends for Preferences and Restrictions on Transfer. The
designations, relative rights, preferences and limitations applicable to each
class of shares and the variations in rights, preferences and limitations
determined for each series within a class (and the authority of the Board of
Directors to determine variations for future series) shall be summarized on the
front or back of each certificate. Alternatively, each certificate may state
conspicuously on its front or back that the Corporation will furnish the
shareholder a full statement of this information on request and without charge.
Every certificate representing shares that are restricted as to the sale,
disposition, or transfer of such shares shall also indicate that such shares are
restricted as to transfer, and there shall be set forth or fairly summarized
upon the certificate, or the certificate shall indicate that the Corporation
will furnish to any shareholder upon request and without charge, a full
statement of such restrictions. If the Corporation issues any shares that are
not registered under the Securities Act
10
<PAGE>
of 1933, as amended, or not registered or qualified under the applicable state
securities laws, the transfer of any such shares shall be restricted
substantially in accordance with the following legend:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR PLEDGED WITHOUT
(1) REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ANY
APPLICABLE STATE LAW, OR (2) AT HOLDER'S EXPENSE, AN OPINION
(SATISFACTORY TO THE CORPORATION) OF COUNSEL (SATISFACTORY
TO THE CORPORATION) THAT REGISTRATION IS NOT REQUIRED."
Section 3. Facsimile Signatures. Any and all signatures on the certificate
may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
Section 4. Lost Certificates. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the Corporation may, in its discretion and as
a condition precedent to the issuance thereof, require the owner of such lost or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost or destroyed.
Section 5. Transfer of Shares. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 6. Registered Shareholders. The Corporation shall be entitled to
recognize the exclusive rights of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Florida.
Section 7. Redemption of Control Shares. As provided by the Florida
Business Corporation Act, if a person acquiring control shares of the
Corporation does not file an acquiring person statement with the Corporation,
the Corporation may, at the discretion of the Board of Directors, redeem the
control shares at the fair value thereof at any time during the 60-day period
after the last acquisition of such control shares. If a person acquiring control
shares of the
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Corporation files an acquiring person statement with the Corporation, the
control shares may be redeemed by the Corporation, at the discretion of the
Board of Directors, only if such shares are not accorded full voting rights by
the shareholders as provided by law.
ARTICLE SIX
INDEMNIFICATION
Section 1. Indemnification. Each person (including the heirs, executors,
administrators, or estate of such person) (a) who is or was a director or
officer of the Corporation, (b) who is or was an agent or employee of the
Corporation other than an officer, or (c) who is or was serving at the request
of the Corporation as its representative in the position of a director, officer,
agent or employee of another corporation, partnership, joint venture, trust or
other enterprise shall be indemnified by the Corporation as of right to the
fullest extent permitted or authorized by current or future legislation or by
current or future judicial or administrative decision (but, in the case of any
such future legislation or decision, only to the extent that it permits the
Corporation to provide broader indemnification rights than permitted prior to
such legislation or decision), against any fine, liability, cost or expense,
including attorneys' fees, asserted against him or incurred by him in his
capacity as such director, officer, agent, employee, or representative, or
arising out of his status as such director, which indemnification shall not be
exclusive of other rights to which those seeking an indemnification may be
entitled. The Corporation may maintain insurance, at its expense, to protect
itself and any such person against any such fine, liability, cost or expense,
whether or not the Corporation would have the legal power to directly indemnify
him against such liability.
Section 2. Advancement of Expenses. Costs, charges and expenses (including
attorneys' fees) incurred by a person referred to in Section 1 of this Article
Six in defending a civil or criminal suit, action or proceeding shall be paid by
the Corporation in advance of the final disposition thereof upon receipt, in the
case of an officer or director, of an undertaking to repay all amounts so
advanced in the event it shall ultimately be determined that such person is not
entitled to be indemnified by the Corporation as authorized by this Article Six,
and upon satisfaction of such other conditions as are required by current or
future legislation (but, with respect to future legislation, only to the extent
that it provides conditions less burdensome than those previously provided).
Such costs, charges and expenses incurred by other employees and agents may be
so paid upon such terms and conditions, if any, as the Board of Directors may
deem appropriate.
Section 3. Severability. If this Article Six or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each person described in Section 1 of
this Article Six to the fullest extent permitted by any applicable portion and
to the fullest extent permitted by law.
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ARTICLE SEVEN
GENERAL PROVISIONS
Section 1. Dividends. The Board of Directors may from time to time declare,
and the Corporation may pay, dividends on its outstanding shares in cash,
property, stock (including its own shares) or otherwise pursuant to law and
subject to the provisions of the Articles of Incorporation.
Section 2. Reserves. The Board of Directors may by resolution create a
reserve or reserves out of earned surplus for any proper purpose or purposes,
and may abolish any such reserve in the same manner.
Section 3. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each year, unless otherwise fixed by resolution of the Board of
Directors.
Section 5. Seal. The Board of Directors may adopt a corporate seal by
resolution. The corporate seal, if adopted, shall have inscribed thereon the
name and state of incorporation of the Corporation. The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.
Section 6. Gender. All words used in these Bylaws in the masculine gender
shall extend to and shall include the feminine and neutral genders.
ARTICLE EIGHT
AMENDMENT OF BYLAWS
Except as otherwise set forth herein, these Bylaws may be altered, amended
or repealed or new Bylaws may be adopted at any meeting of the Board of
Directors at which a quorum is present, by the affirmative vote of a majority of
the directors present at such meeting.
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PRESIDENT'S CERTIFICATE OF ADOPTION OF
THE BYLAWS OF DOT COM ENTERTAINMENT GROUP, INC.
I hereby certify:
That I am the duly elected President of dot com Entertainment Group, Inc.,
a Florida corporation;
That the foregoing Bylaws comprising thirteen (13) pages, constitute the
Bylaws of said corporation as duly adopted by the Board of Directors of the
Corporation on February 12th, 1999.
IN WITNESS WHEREOF, I have hereunder signed my name this 12th day of
February, 1999.
Scott White, President
14
Agreement
Between
PRECYSE CORPORATION
- and -
THE CYBERBINGO CORPORATION
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS 1
1.1 DEFINITIONS 1
"Confidential Information" 1
"Intellectual Property" 2
"Product Specification(s)" 2
"Related Materials" 2
"Software" 2
1.2 SCHEDULES 2
ARTICLE 2 - LICENSE GRANT 2
ARTICLE 3 - LICENSE FEES AND REPORTING 3
ARTICLE 4 - OBLIGATIONS OF THE LICENSOR 3
ARTICLE 5 - USERS OF THE SOFTWARE 3
ARTICLE 6 - SUPPORT AND MAINTENANCE 4
ARTICLE 7 - TERM 5
ARTICLE 8 - TERMINATION 5
ARTICLE 9 - ESCROW OF SOURCE CODE 5
ARTICLE 10 - WARRANTIES 6
ARTICLE 11 - INDEMNIFICATION 7
ARTICLE 12 - LIMITATION OF LIABILITY 8
ARTICLE 13 - GOVERNING LAW 8
ARTICLE 14 - CONFIDENTIALITY 8
ARTICLE 15 - ASSIGNABILITY 9
ARTICLE 16 - OWNERSHIP 9
ARTICLE 17 - GENERAL PROVISIONS 9
<PAGE>
ARTICLE 18 - ARBITRATION 11
SCHEDULE "A" - DESCRIPTION OF SOFTWARE
SCHEDULE "B" - ESCROW AGREEMENT
<PAGE>
TECHNOLOGY LICENSE AND MAINTENANCE AGREEMENT
THIS AGREEMENT made as of the 4th day of December, 1997.
B E T W E E N:
PRECYSE CORPORATION, a corporation incorporated pursuant to the laws of
Ontario
(hereinafter referred to as the "Licensor")
OF THE FIRST PART;
- and -
THE CYBERBINGO CORPORATION, a corporation incorporated pursuant to the laws
of Antigua
(hereinafter referred to as the "Licensee")
OF THE SECOND PART.
WHEREAS the Licensee wishes to operate an Internet-based "bingo" operation
on a Web server to be located in Antigua;
AND WHEREAS the Licensee wishes to license the Software and the Related
Materials (as hereinafter defined) and obtain related technical and advisory
services from the Licensor.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants contained in this Agreement, the parties hereto agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 DEFINITIONS
The parties agree that, the following terms have the following meanings:
(a) "Confidential Information" means the information provided by one party
to the other and designated as confidential in writing. Confidential
Information does not include information which is: publicly available
or becomes so other than by acts of a party; in lawful possession of a
party prior to it being provided by the other party; or, received by a
party from a third party where the third party is not in breach of a
duty not to disclose such information, and includes the Software and
the Related Materials.
<PAGE>
(b) "Intellectual Property" means the intellectual property, or other
rights licensed under this Agreement including, the copyrights
subsisting in the Software, the Confidential Information, and all of
the above as they are embodied in the Software and the Related
Materials.
(c) "Product Specification(s)" means the functional and technical
specifications for the Software previously provided by the Licensor to
the Licensee and includes such further functional and technical
specifications as may be agreed upon by the Licensor and the Licensee
from time to time.
(d) "Related Materials" means any and all human readable documentation
which is produced in relation to, and which is to be delivered with,
the Software, and such other documentation which may thereafter be
provided by the Licensor and includes such documentation that is
necessary for use of the Software by the Licensee.
(e) "Software" means the computer programs licensed to the Licensee
hereunder in machine-executable object code form only and as set out
in Schedule "A" to this Agreement, and each copy of, up-date of,
variation or enhancement to such computer programs.
1.2 SCHEDULES
The following are the schedules attached to and incorporated into this
Agreement by reference, and deemed to be a part hereof:
Schedule "A" - Description of Software and Description of
Support and Maintenance Services
Schedule "B" - Escrow Agreement
ARTICLE 2 - LICENSE GRANT
2.1 The Licensor hereby grants a world-wide non-exclusive license to the
Licensee to use the Software and the Related Materials associated therewith
for the term of this Agreement on a single server connected to the Internet
and located in Antigua or in another country with the consent of the
Licensor, not to be unreasonably withheld, subject to the terms and
conditions of this Agreement. The foregoing license granted may not be
revoked by the Licensor except at the termination of this Agreement.
2.2 The parties acknowledge that the license of the Software and the Related
Materials associated therewith is non-exclusive, and the Licensor may grant
further licenses for the use of the Software, the Related Materials, any
derivative works, or the Intellectual
<PAGE>
Property in relation thereto, anywhere world-wide.
ARTICLE 3 - LICENSE FEES AND REPORTING
3.1 The Licensee agrees to pay the Licensor a licensing fee of United States
One Thousand Five Hundred Dollars (U.S.$1,500.00), payable on the execution
of this Agreement (the "Initial Fee").
3.2 In addition to the Initial Fee, the Licensee agrees to pay to the Licensor,
the sum equal to fifty percent (50%) of its gross cash sales, such amount
to be remitted to the Licensor within ninety (90) days of each fiscal
quarter (the "Royalty"). The Royalty shall be accompanied by a quarterly
statement income, showing the total gross sales during the period, prepared
in accordance with GAAP.
3.3 The parties agree that the Licensor shall be authorized to charge
additional fees, which shall be negotiated by the parties from time to time
when new Software and related materials are required by the Licensee (the
"Additional License Fee"). At no time shall the Additional License Fee be
more than FIFTY THOUSAND DOLLARS ($50,000.00) for any single modification
to the Software or Related Materials.
3.4 During the term hereof, the Licensor shall also provide to the Licensee,
such support and maintenance for the Software and Related Materials as may
be required by the Licensee, from time to time. The parties agree that the
Licensor shall be authorized to charge additional fees for support and
maintenance, which shall be negotiated by the parties from time to time,
either on an hourly or monthly basis, as same are required from time to
time by the Licensee (the "Support Fee").
3.5 During the term hereof, the Licensor shall also provide to the Licensee,
such marketing, promotion and related advice as may be required by the
Licensee, from time to time. The parties agree that the Licensor shall be
authorized to charge additional fees for its marketing, promotion and
related services, which shall be negotiated by the parties from time to
time when same is required by the Licensee.
ARTICLE 4 - OBLIGATIONS OF THE LICENSOR
4.1 During the term hereof, the Licensor shall provide to the Licensee, at no
extra cost, such reasonable number of further copies of the Software and
the Related Materials as may be requested by the Licensee, from time to
time.
4.2 The Licensor agrees to make enhancements to the Software that are requested
by the
<PAGE>
Licensee. The parties agree that the Licensor shall be authorized to charge
an additional one-time fee, which shall be negotiated by the parties when
enhancements to the Software and the Related Materials are requested by the
Licensee (the "Enhancement Fee"). The Enhancement Fee shall be based on a
rate of United States Two Hundred Fifty Dollars (U.S.$250.00) per hour with
a minimum of United States Twenty-Five Thousand Dollars (U.S.$25,000.00)
per request (which may include more than one (1) enhancement).
ARTICLE 5 - USERS OF THE SOFTWARE
5.1 The Licensee shall be entitled to receive and have installed copies of the
then current versions of the Software and the Related Materials. The
Software may be accessed by any number of users on the Internet.
5.2 The License shall be entitled to make and use additional copies of the
Software and the Related Materials as necessary to support its intended use
of the Software. The Licensee covenants and agrees that all copies of the
Software and the Related Materials must contain such copyright and
proprietary notices as reasonably specified by the Licensor.
5.3 Upon termination of this Agreement, the Licensee shall return to the
Licensor or destroy all copies of the Software and the Related Materials in
the Licensee's possession, and the Licensee shall provide to the Licensor a
certificate of an officer of the Licensee confirming that the Software and
all Related Materials have been returned or destroyed as required.
5.4 The Licensee acknowledges and agrees that the Software may contain
technical protection features, including the use of date dependent license
codes, and/or hardware serialization, to restrict unauthorized copying or
use of the Software.
ARTICLE 6 - SUPPORT AND MAINTENANCE
6.1 The Licensor agrees to provide support and maintenance services, as further
described in Schedule "A", (the "Support and Maintenance Services"), for
the duration of this Agreement.
6.2 If during the term of this Agreement the Software or the Related Materials
fail to perform in accordance with the Product Specifications, or exhibit a
major error which cannot be reasonably circumvented (the foregoing shall be
collectively referred to as "Defects"), the Licensee shall advise the
Licensor of the Defects.
6.3 The Licensor shall, within five (5) days of the communication of the
existence of
<PAGE>
Defects referred to in section 6.2 from any source whatsoever, and at no
extra cost to the Licensee, correct the Defects.
ARTICLE 7 - TERM
7.1 This Agreement shall have an initial term of five (5) years (commencing on
the date first written above), and thereafter, shall automatically renew
for additional one (1) year terms unless written notice to terminate is
given by one party to the other at least ninety (90) days prior to the end
of the then current term.
ARTICLE 8 - TERMINATION
8.1 Either the Licensor or Licensee may terminate this Agreement immediately
upon the giving of written notice, to the defaulting party, upon the
occurrence of any of the following events:
(a) the insolvency of the defaulting party;
(b) the defaulting party executes an assignment for the benefit of its
creditors;
(c) the defaulting party dissolves, is wound up, ceases to carry on
business, or makes a bulk sale of its assets; or
(d) the defaulting party becomes subject to receivership, bankruptcy or
similar proceedings.
8.2 Upon the occurrence of a material default not otherwise specifically dealt
with under this Article 8, by either party, and the failure of such
defaulting party to cure such default within thirty (30) days after
receiving written notice thereof from the non-defaulting party, this
Agreement may be terminated by the non-defaulting party by giving written
notice of termination to the defaulting party, such termination to be
immediately effective upon the receipt of such notice of termination, and
without limitation to any other remedies available to the non-defaulting
party.
ARTICLE 9 - ESCROW OF SOURCE CODE
9.1 The parties hereto acknowledge that the Software source code, and
associated source code materials which are available or necessary to
generate, support or modify the machine-executable version of the Software,
shall be placed in escrow, pursuant to the provisions of the Escrow
Agreement attached as Schedule "B" to this Agreement, to be delivered to
the Licensee as provided for therein.
<PAGE>
ARTICLE 10 - WARRANTIES
10.1 The Licensor and Licensee warrant to each other as follows:
(a) each is duly incorporated and subsisting under the laws of its place
of incorporation;
(b) each has the power to and is authorized to enter into this Agreement;
(c) the carrying out of this Agreement will not breach or interfere with
any other agreement which the respective party has entered into; and
(d) neither will enter into another agreement the carrying out of which
would cause a material breach under this Agreement.
10.2 The Licensor warrants as follows:
(a) the Licensor is the owner of, and no other person has the right to
acquire ownership of or the right to use or license use of, the
Intellectual Property, the Software and the Related Materials;
(b) the Software and the Related Materials are original works;
(c) the Licensor has the right to license the Intellectual Property, the
Software and the Related Materials pursuant to the provisions hereto,
free of any claims, liens or encumbrances;
(d) the use of the Software and the Related Materials does not infringe
upon the intellectual property rights, including but not limited to
copyright, patent, trade secret, trade-mark or other proprietary
right, of others in Canada or Antigua, or, to the knowledge of the
Licensor, anywhere outside of Canada and Antigua;
(e) there are no existing or threatened legal proceedings brought against
the Licensor, in respect of its ownership of the Intellectual
Property, the Software or the Related Materials or its ability to
license use of same;
(f) the Software does not contain any programs undisclosed to the Licensee
which are intended to permit unauthorized access, or cause damage to
other programs, data or hardware, nor does the Software contain any
feature designed for the destruction of such data (i.e., computer
viruses);
<PAGE>
(g) the Licensor shall keep this Agreement, the Software and the Related
Materials free of any liens, claims and encumbrances;
(h) the Software shall, when properly operated and maintained, perform the
various functions and features without Defects, and shall operate in
accordance with the Product Specifications;
(i) the Related Materials accurately and completely describe the
operation, maintenance, performance and functionality of the Software,
and does so in sufficient detail to allow a user to install,
implement, integrate and operate the Software; and
(j) the Software is Year 2000 compliant and, more specifically, (i) is
designed to be used prior to, during and after the calendar year 2000
A.D. without error relating to date data, and shall operate
transparently to the user during such time periods, (ii) is capable of
operating without error relating to the product of date data which
represents or references different centuries or more than one century,
(iii) is designed such that all data fields, date-related user
interfaces and other interfaces include the indication of century, and
(iv) recognizes the Year 2000 as a leap year.
ARTICLE 11 - INDEMNIFICATION
11.1 The Licensor shall indemnify and save harmless the Licensee against all
claims (including liabilities and legal costs and disbursements) made
against the Licensee as a result of its rights under this Agreement,
alleging that any of the Software or the Related Materials constitutes
infringement or any copyright, patent, trademark, trade secret or other
intellectual property right of another.
11.2 The Licensee shall notify the Licensor as soon as possible upon any claim
being made against the Licensee, that use of the Software or the Related
Materials is alleged to be an infringement of the intellectual property
rights of another.
11.3 In the event that the Software or the Related Materials is finally held by
a court of competent jurisdiction to be an infringement of the intellectual
property rights of another or if a dispute is settled pursuant to which the
Licensee is prevented from using the Software or the Related Materials,
then the Licensor shall (without limiting the Licensee's rights pursuant to
this Agreement, at law or in equity):
(a) modify the Software or the Related Materials to make it non-
infringing;
(b) obtain a license for use of the Software or the Related Materials from
the other
<PAGE>
party; or
(c) provide a functionally equivalent alternative to the Software or the
Related Materials.
11.4 Without limiting the indemnity provided by the Licensor in section 11.1
hereof, each party covenants and agrees to indemnify and save harmless the
other party from and against any direct loss or damage suffered by the
other party, including but not limited to business profits, as a result of
any material breach of, non- compliance with or untruth of any of the
warranties, representations or covenants of that party contained in this
Agreement, in any schedule hereto, in any documents to be executed and
delivered pursuant to this Agreement or in any documents delivered in
connection with this Agreement or any claims by any other person regarding
matters which rose prior to or as a result of the entering into of this
Agreement, including, without limiting the generality of the foregoing, all
reasonable costs and expenses (including legal fees incurred in connection
with any such loss or damage and in connection with any claim under this
section).
ARTICLE 12 - LIMITATION OF LIABILITY
12.1 Except as expressly provided herein, there are no representations,
warranties or conditions, express or implied, statutory or otherwise,
relating to the Software, the Related Materials, the Intellectual Property
or any services to be provided by the Licensor, including but not limited
to, any implied warranty or condition of merchantability or fitness for a
particular purpose.
12.2 In no event will either party be liable to the other for any special,
indirect, incidental or consequential damages, including but not limited
to, indirect lost profits and lost revenues.
12.3 Except for a breach relating to confidentiality payment obligations or
proprietary rights, each party's liability to the other party for any
claim, demand or cause of action, whether based on contract (including
fundamental breach), tort (including negligence) or otherwise, for any
losses or damages arising out of or resulting from this Agreement, shall
not in the aggregate exceed U.S.$10,000.
ARTICLE 13 - GOVERNING LAW
13.1 This Agreement shall be interpreted and governed by the laws of the
Province of Ontario and the laws of Canada applicable herein.
ARTICLE 14 - CONFIDENTIALITY
<PAGE>
14.1 Each of the parties acknowledge that the other party's Confidential
Information is confidential, a trade secret, and is owned by the other
party. Each party will only use the other party's confidential information
for the purposes intended by this Agreement.
14.2 All parties to this Agreement will take all reasonable precautions to
maintain the confidentiality of any other party's Confidential Information
and to prevent the unauthorized disclosure to third parties of the
Confidential Information.
ARTICLE 15 - ASSIGNABILITY
15.1 This Agreement may not be assigned by either of the Licensor or the
Licensee in whole or in part except with the prior written consent of the
other party.
15.2 This Agreement is binding on the parties to this Agreement, their
successors, permitted assigns, heirs, executors and administrators.
ARTICLE 16 - OWNERSHIP
16.1 The Licensee acknowledges that the Licensor will at all times retain
ownership of the Software and associated Intellectual Property rights.
ARTICLE 17 - GENERAL PROVISIONS
17.1 This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof.
17.2 This Agreement cannot be modified or amended other than by written
modification made in writing and executed by the parties hereto.
17.3 All notices, requests, demands or other communications by the terms hereof
required or permitted to be given by one party to another shall be given in
writing by personal delivery, telecopy or by registered mail, postage
prepaid, addressed to such other party or delivered to such other party as
follows:
(a) to the Licensee at: The Cyberbingo Corporation
Unit #9 The Dollar Building
St. John's, Antigua
(b) to the Licensee at: Precyse Corporation
6 Adelaide Street East
10th Floor
Toronto, Ontario
M5C 3H6
<PAGE>
or at such other address as may be given by either of them to the other in
writing from time to time and such notices, requests, demands or other
communications shall be deemed to have been received when delivered or
transmitted by telecopy or, if mailed, forty-eight (48) hours after 12:01
a.m. on the day following the day of the mailing thereof; provided that if
any such notice, request, demand or other communication shall have been
mailed and if regular mail service shall be interrupted by strikes or
other irregularities, such notices, requests, demand or other
communications shall be deemed to have been received forty-eight (48)
hours after 12:01 a.m. on the day following the resumption of normal mail
service. Where a notice is given by telecopy, the hard copy of the
original notice shall be sent by prepaid regular mail on the next business
day after the original notice was sent.
17.4 The waiver by any party of a breach of this Agreement does not constitute
a waiver or other breaches or rights under this Agreement.
17.5 Delays or non-performance of any obligations under this Agreement caused
by events beyond the reasonable control of the party having the
obligation, shall not be a breach of this Agreement. The time of carrying
out the obligation shall extend or a period equal to the time over which
the conditions existed.
17.6 The headings in this Agreement are for reference purposes only and cannot
be used to construe the terms of the Agreement.
17.7 This Agreement does not establish a joint venture or partnership between
the Licensor or Licensee.
17.8 All dollar amounts referred to in this agreement shall be in United States
funds.
17.9 Time is of the essence of this Agreement and each part thereof.
17.10 The provisions of section 5.3 and Articles 11, 12, 13 and 14 shall survive
expiration or termination of this Agreement for any reason and shall
remain in force and effect until such time as the parties may mutually
agree to the release of the obligations contained therein.
ARTICLE 18 - ARBITRATION
18.1 If at any time during the term of this Agreement any dispute, difference
or question shall arise between or among any of the parties hereto
concerning the construction, meaning or effect of this Agreement or the
termination of this Agreement (other than a matter dealt with in this
Agreement or any agreement or covenant entered into
<PAGE>
pursuant thereto whereby such agreement or covenant specifically states
that a certain determination shall be final and binding), or the rights or
obligations of the parties hereto or their heirs, executors,
administrators, successors and assigns, then, every such dispute,
difference or question shall be submitted to and settled by arbitration and
the decision of the arbitrator, appointed as hereinafter provided, to deal
with such matters shall be accepted by all of the parties to such dispute,
difference or questions. The arbitration shall be conducted in Toronto,
Canada by a single arbitrator agreed upon by the parties to the matter. If,
within five (5) days after notice of the arbitration has been given by one
of such parties to the other or others, such parties cannot agree upon a
single arbitrator, then in such event, the arbitration shall be conducted
by a single arbitrator appointed by a Judge of the Ontario Court (General
Division) on the application of any such party with notice to the other or
others. The arbitration shall be conducted in accordance with the
provisions of the Arbitration Act (Ontario), as amended, or any successor
statute thereto, in force at the time of such dispute, difference or
question. The decision of the Arbitrator shall be final and binding upon
all parties to such dispute, difference or question, and there shall be no
appeal therefrom. The prevailing party shall be entitled to an award of
arbitration costs.
<PAGE>
IN WITNESS WHEREOF the parties have duly executed this Agreement as of the
date and year first above written.
PRECYSE CORPORATION
By:
-----------------------------------
Authorized Signing Officer
By:
-----------------------------------
Authorized Signing Officer
THE CYBERBINGO CORPORATION
By:
-----------------------------------
Authorized Signing Officer
By:
-----------------------------------
Authorized Signing Officer
<PAGE>
SCHEDULE "A"
DESCRIPTION OF SOFTWARE
"Software" means the "Cyberbingo" software and any other software developed for
the Licensor, or as a further enhancement, modification, upgrade or new version
of, "Cyberbingo". The Software shall correspond to the version of the Software
demonstrated to and tested by Licensee or its agents.
Attachment 1 to this Schedule A contains a more detailed description of the
Software.
DESCRIPTION OF SUPPORT AND MAINTENANCE SERVICES
Licensor shall:
provide Licensee with escalation procedures;
coordinate all third party on-site support contracts with local
service providers
remotely monitor and maintain the operation of the Web server and
associated systems (the "Cyberbingo System"), including installation
and use of remote control and notification agents;
respond within twenty-four (24) hours to any major problem or failure
of the Cyberbingo System and work continuously until the major problem
or failure is resolved so that the Cyberbingo System is operational
for commercial production purposes. In the event that a major problem
or failure of the Cyberbingo System cannot be resolved remotely within
forty-eight (48) hours then Licensee shall dispatch its personnel to
Licensee's premises (to arrive within a further forty-eight (48)
hours) in order to correct the major problem or failure;
make recommendations to the Licensee concerning the maintenance of
adequate replacement hardware in Antigua to permit local service
providers to rapidly restore the operation of the Cyberbingo System in
the event of a hardware failure; and
the Licensee shall be responsible to acquire, install and maintain the
recommended hardware configuration necessary for the operation of the
Cyberbingo System.
CONSULTING AGREEMENT
THIS AGREEMENT made the 16th day of March, 1999.
B E T W E E N:
COLIVAS ENTERPRISES LTD., a corporation incorporated under the
laws of the Province of Ontario,
(the "Consultant")
- and -
DOT COM ENTERTAINMENT GROUP INC, of the City of Buffalo, in the
State of New York, one of the United States of America,
(the "Company")
WHEREAS:
The Company wishes to retain the Consultant to perform certain consulting
and other services on its behalf and the Company has agreed to be so retained,
subject to the terms, conditions and covenants herein provided;
NOW THEREFORE, in consideration of the mutual covenants herein contained
and for other good and valuable consideration, the parties hereby agree as
follows:
1 ARTICLE - APPOINTMENT AND SERVICES OF THE CONSULTANT
2
2.1 Appointment
2.2
The Company hereby agrees to retain the services of the Consultant and the
Consultant agrees to be so retained, on and subject to the terms and conditions
herein contained.
1.1 Scope of Duties
1.2
During the term of this agreement, the Consultant shall have the following
duties and responsibilities:
<PAGE>
-2-
(a) Manage all Web development;
(b) Manage all customer related services;
(c) Manage a marketing initiative;
(d) Business development;
(e) technical consulting;
(f) such further and other positions, responsibilities, duties and
authority as may, from time to time, be agreed as between the Company
and the Consultant.
The Consultant agrees that the obligations herein before contemplated shall
be effected by the Consultant through the providing to the Company by the
Consultant of the services of the Consultant's President, Ted Colivas. As used
in this Agreement, any references to the service to be provided by the
Consultant shall be deemed to be a referenced as to the services of the
Consultant through the providing of the services of Mr. Colivas.
1.1 Time and Attention
1.2
Without limiting the generality of the provisions of paragraph 1.2 of this
Agreement, the Consultant and the Company agree that the Consultant shall not
entitled or required to exercise any discretion over employee matters. Rather,
all decisions with respect to employee matters shall be made by the directors
and/or Chief Executive Officer of the Company, as appropriate, with the
Consultant assisting only in respect of the lawful implementation of the
decision so made.
During the term of this agreement, the Consultant shall devote such of his
working time and attention to the business and affairs of the Company as may be
necessary to fulfill his duties hereunder. Notwithstanding the foregoing,
nothing in this agreement shall be construed so as to deem to restrict in any
way the freedom of the Consultant to conduct any other business or activity for
his individual profit provided that the Consultant shall not provide his
services to any person, firm or corporation engaged in any business competitive
with that, from time to time, carried on by the Company.
1.1 Location
1.2
The Consultant shall provide his services from the City of Mississauga,
Ontario, or from such other location within North America as the Consultant may,
in his sole discretion, determine.
<PAGE>
-3-
1 ARTICLE - REMUNERATION AND REIMBURSEMENT OF THE CONSULTANT
2
2.1 Consulting Fee
2.2
During the term of this agreement, in consideration of the services
rendered and expenses to be incurred hereunder, the Consultant shall receive
from the Company a consulting fee of Sixty ($60.00) Dollars, Can. funds, per
hour, payable monthly.
Consultant shall submit monthly invoices particularizing the number of
hours worked.
1 ARTICLE - CONFIDENTIALITY AND NON-COMPETITION
2
2.1 Confidentiality
2.2
The Consultant acknowledges that, in the course of carrying out his duties
hereunder, he will have access to and will be entrusted with confidential
information and trade secrets regarding the present and contemplated services,
processes, techniques, procedures, products, lines of merchandise, suppliers and
customers of the Company, the disclosure of any of which would be highly
detrimental to the best interests of the Company. The Consultant, therefore,
covenant and agrees with the Company that all such confidential records,
material and information and all trade secrets concerning the business and
affairs of the Company obtained by the Consultant in the course of performing
his duties hereunder shall remain the exclusive property of the Company.
Further, during the term of this agreement or at any time thereafter, the
Consultant shall not divulge the contents of such confidential records or any
such confidential information or trade secrets to any person, firm or
corporation other than the Company's authorized employees and the Consultant
shall not, following the termination of this agreement for any reason, use the
contents of such confidential records or such confidential information or trade
secrets for any purpose whatsoever.
1.1 Non-Solicitation
1.2
The Consultant hereby agrees that he will not at any time during the term
of this agreement and for a period of one (1) year thereafter, divulge to any
person, firm or corporation the name of any customer of the Company or solicit,
interfere with or endeavour to entice away from the Company any customer or any
person, firm or corporation in the habit of dealing with the Company or
interfere with or entice away any other employee of the Company and the Company
may apply for and have an injunction restraining breach or threatened breach of
the covenants herein contained.
<PAGE>
-4-
1.1 Non-Competition
1.2
The Consultant covenants and agrees with the Company that he will not,
during the term of this agreement or for a period of one (1) year thereafter
(without the prior written consent of the Company), directly or indirectly, in
any manner whatsoever, either individually or in partnership or jointly or in
conjunction with any other person or persons, firm or corporation, as principal,
agent, employee or in any other manner, carry on or be engaged in or concerned
with, within Canada or the United States of America, any business competitive
with that of the business, from time to time, carried on by the Company.
1 ARTICLE - TERM AND TERMINATION
2
2.1 Term
This agreement shall be effective from the date of execution hereof and
shall continue in full force and effect for a period of six (6) months, up to
and including September 16, 1999 unless sooner terminated in accordance with the
provisions of Section 4.2 provided that notwithstanding the foregoing, upon the
expiry of the original term, this agreement shall be automatically renewed for
an unlimited number of further terms of one (1) year each, unless, at least
ninety (90) days prior to the expiration of the initial term or any renewal
term, notice of intention to terminate this agreement is given in writing by the
Company to the Consultant or by the Consultant to the Company.
1.1 Termination by the Company
1.2
This agreement may be terminated by either party upon thirty (30) days'
written notice where cause is not alleged.
1.1 Termination for Cause
1.2
The Company may terminate this Agreement at any time for cause effectively
immediately, by written notice of termination to the Consultant setting forth
the basis for termination and without payment or any compensation either by way
of anticipated earnings or damages of any kind. For the purposes of this section
the term "cause" shall include, without limiting the generality of the
foregoing:
(a) a repeated and demonstrated failure on the part of the Consultant
to perform the material duties of the Consultant's services in a
competent manner and the failure of the Consultant to
substantially remedy such failure within a reasonable period of
time after receiving written notice of such failure from the
Company;
<PAGE>
-5-
(a) conduct involving fraud, dishonesty, material violation of the
Company's policies and procedures or material non-compliance with
the terms of this Agreement;
(a) the Consultant or any member of his Company or family receiving
any personal profit arising out of or in connection with a
transaction to which the Company is a party or with which the
Company is associated without making disclosure to or obtaining
the prior written consent of the Company;
(a) the failure by the Consultant to honour his fiduciary duties to
the Company, including the duty to act in the best interests of
the Company;
(a) the existence of circumstances which would justify the laying of
a charge or information against the Consultant with respect to
larceny, theft, embezelment, forgery, misappropriation,
wilfulness application or other fraudulent or dishonest acts;
(a) the failure of the Consultant to obey reasonable instructions
from an authorized representative of the Company that are not
consistent with the Consultant's offered services and not remedy
by the Consultant within a reasonable period of time after
receiving written notice of such disobedience; and
(a) subject to applicable law, the Consultant's use of illegal drugs
or abuse of controlled substances or habitual intoxication.
1 ARTICLE - GENERAL CONTRACT PROVISIONS
2
2.1 Independent Contractor
2.2
The parties acknowledge and agree that the Consultant is acting as an
independent contractor in carrying out his obligations pursuant to the terms of
this agreement and it is acknowledged and agreed that any employees or agents of
the Consultant shall be deemed or construed to be acting in such capacity and
not as employees or agents of the Company. The Consultant shall be solely liable
for all acts of his employees and agents and responsible for all payments and
withholdings in connection therewith.
<PAGE>
-6-
1.1 Severability
1.2
In the event that any provision herein or part thereof shall be deemed void
or invalid by a court of competent jurisdiction, the remaining provisions or
parts thereof shall be and remain in full force and effect. If, in any judicial
proceeding, any provision of this agreement is found to be so broad as to be
unenforceable, it is hereby agreed that such provision shall be interpreted to
be only so broad as to be enforceable.
1.1 Notices
1.2
All notices, requests, demands or other communications by the terms hereof
required or permitted to be given by one party to another shall be given in
writing by personal delivery or by registered mail, postage prepaid, addressed
to such other party or delivered to such other party as follows
(a) to the Company at:
300 Pearl Street
Suite 200
Buffalo, New York
U.S.A. 14202
(a) to the Consultant at:
878 Bloor Street East
Mississauga, Ontario
L4Y 2M9
or at such other address as may be given by any of them to the others in writing
from time to time and such notices, requests, demands or other communications
shall be deemed to have been received when delivered, or, if mailed, five (5)
business days following the date of mailing thereof; provided that if any such
notice, request, demand or other communication shall have been mailed and if
regular mail service shall be interrupted by strikes or other irregularities,
such notices, requests, demands or other communications shall be deemed to have
been received five (5) business days following the resumption of normal mail
service.
1.1 Entire Agreement
1.2
This agreement constitutes and expresses the whole agreement of the parties
hereto with reference to the provision by the Consultant of his services to the
Company and all other matters herein provided. All promises, representations,
collateral agreements and understandings relative thereto not incorporated
herein are hereby superseded and cancelled by this agreement.
<PAGE>
-7-
1.1 Governing Law
1.2
This agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario.
1.1 Time of the Essence
1.2
Time shall be of the essence of this agreement and of every part hereof.
1.1 Assignment, Binding Effect
1.2
Subject to the provisions of Article 5, this agreement is personal to the
Consultant and may not be assigned by him without the prior written consent of
the Company. Subject to the foregoing, this agreement shall enure to the benefit
of and be binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
IN WITNESS WHEREOF the parties hereto have duly executed this agreement
this 16th day of March, 1999.
SIGNED, SEALED AND DELIVERED ) COLIVAS ENTERPRISES LTD.
in the presence of: )
) Per:
) I have authority to bind the
) Corporation
)
)
) DOT COM ENTERTAINMENT
) GROUP INC.
)
) Per:
) I have authority to bind the
) Corporation
)
<PAGE>
-8-
CONSULTING AGREEMENT
B E T W E E N:
COLIVAS ENTERPRISES LTD.
- and -
DOT COM ENTERTAINMENT GROUP INC.
FOGLER, RUBINOFF
Barristers and Solicitors
Suite 4400, Royal Trust Tower
Box 95, Royal Toronto-Dominion Centre
Toronto, Ontario
M5K 1G8
CONSULTING AGREEMENT
THIS AGREEMENT made the __ day of ______, 19__.
B E T W E E N:
PERICOM SYSTEMS CORPORATION, a corporation incorporated under the
laws of the Province of Ontario,
(the "Consultant")
- and -
DOT COM ENTERTAINMENT GROUP INC, of the City of ___________, in
the State of ___________, one of the United States of America,
(the "Company")
WHEREAS:
The Company wishes to retain the Consultant to perform certain consulting
and other services on its behalf and the Company has agreed to be so retained,
subject to the terms, conditions and covenants herein provided;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the parties hereby
agree as follows:
1 ARTICLE - APPOINTMENT AND SERVICES OF THE CONSULTANT
2
2.1 Appointment
2.2
The Company hereby agrees to retain the services of the Consultant and the
Consultant agrees to be so retained, on and subject to the terms and conditions
herein contained.
1.1 Scope of Duties
1.2
During the term of this agreement, the Consultant shall have the following
duties and responsibilities:
(a) responsibility for the management of Company internal and client based
hardware/software systems and technical staff;
(b) lead Company development team;
(c) provide design and development services in the area of application
development ecommerce and systems integration
<PAGE>
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(d) design, develop and implement Company architecture;
(e) provide technical consulting and assist with product and service
direction and development
(f) such further and other positions, responsibilities, duties and
authority as may, from time to time, be agreed as between the Company
and the Consultant.
The Consultant agrees that the obligations herein before contemplated shall
be effected by the Consultant through the providing to the Company by the
Consultant of the services of the Consultant's President, Perry Malone. As used
in this Agreement, any references to the service to be provided by the
Consultant shall be deemed to be a referenced as to the services of the
Consultant through the providing of the services of Mr. Malone.
1.1 Time and Attention
1.2
Without limiting the generality of the provisions of paragraph 1.2 of this
Agreement, the Consultant and the Company agree that the Consultant shall not
entitled or required to exercise any discretion over employee matters. Rather,
all decisions with respect to employee matters shall be made by the directors
and/or Chief Executive Officer of the Company, as appropriate, with the
Consultant assisting only in respect of the lawful implementation of the
decision so made.
During the term of this agreement, the Consultant shall devote such of his
working time and attention to the business and affairs of the Company as may be
necessary to fulfill his duties hereunder. Notwithstanding the foregoing,
nothing in this agreement shall be construed so as to deem to restrict in any
way the freedom of the Consultant to conduct any other business or activity for
his individual profit provided that the Consultant shall not provide his
services to any person, firm or corporation engaged in any business competitive
with that, from time to time, carried on by the Company.
1.1 Location
1.2
The Consultant shall provide his services from the Town of Oakville,
Ontario, or from such other location within North America as the Consultant may,
in his sole discretion, determine.
<PAGE>
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ARTICLE - REMUNERATION AND REIMBURSEMENT OF THE CONSULTANT
1.1 Consulting Fee
1.2
During the term of this agreement, in consideration of the services
rendered and expenses to be incurred hereunder, the Consultant shall receive
from the Company a consulting fee of Eighty-five ($85.00) Dollars, Can.. funds,
per hour, payable monthly.
Consultant shall submit monthly invoices particularizing the number of
hours worked.
1 ARTICLE - CONFIDENTIALITY AND NON-COMPETITION
2
2.1 Confidentiality
2.2
The Consultant acknowledges that, in the course of carrying out his duties
hereunder, he will have access to and will be entrusted with confidential
information and trade secrets regarding the present and contemplated services,
processes, techniques, procedures, products, lines of merchandise, suppliers and
customers of the Company, the disclosure of any of which would be highly
detrimental to the best interests of the Company. The Consultant, therefore,
covenant and agrees with the Company that all such confidential records,
material and information and all trade secrets concerning the business and
affairs of the Company obtained by the Consultant in the course of performing
his duties hereunder shall remain the exclusive property of the Company.
Further, during the term of this agreement or at any time thereafter, the
Consultant shall not divulge the contents of such confidential records or any
such confidential information or trade secrets to any person, firm or
corporation other than the Company's authorized employees and the Consultant
shall not, following the termination of this agreement for any reason, use the
contents of such confidential records or such confidential information or trade
secrets for any purpose whatsoever.
1.1 Non-Solicitation
1.2
The Consultant hereby agrees that he will not at any time during the term
of this agreement and for a period of one (1) year thereafter, divulge to any
person, firm or corporation the name of any customer of the Company or solicit,
interfere with or endeavour to entice away from the Company any customer or any
person, firm or corporation in the habit of dealing with the Company or
interfere with or entice away any other employee of the Company and the Company
may apply for and have an injunction restraining breach or threatened breach of
the covenants herein contained.
<PAGE>
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1.1 Non-Competition
1.2
The Consultant covenants and agrees with the Company that he will not,
during the term of this agreement or for a period of one (1) year thereafter
(without the prior written consent of the Company), directly or indirectly, in
any manner whatsoever, either individually or in partnership or jointly or in
conjunction with any other person or persons, firm or corporation, as principal,
agent, employee or in any other manner, carry on or be engaged in or concerned
with, within Canada or the United States of America, any business competitive
with that of the business, from time to time, carried on by the Company.
1 ARTICLE - TERM AND TERMINATION
2
2.1 Term
This agreement shall be effective from the date of execution hereof and
shall continue in full force and effect up to and including August 31, 1999
unless sooner terminated in accordance with the provisions of Section ; provided
that notwithstanding the foregoing, upon the expiry of the original term, this
agreement shall be automatically renewed for an unlimited number of further
terms of one (1) year each, unless, at least ninety (90) days prior to the
expiration of the initial term or any renewal term, notice of intention to
terminate this agreement is given in writing by the Company to the Consultant or
by the Consultant to the Company.
1.1 Termination by the Company
1.2
This agreement may be terminated by either party upon thirty (30) days'
written notice where cause is not alleged.
1.1 Termination for Cause
1.2
The Company may terminate this Agreement at any time for cause effectively
immediately, by written notice of termination to the Consultant setting forth
the basis for termination and without payment or any compensation either by way
of anticipated earnings or damages of any kind. For the purposes of this section
the term "cause" shall include, without limiting the generality of the
foregoing:
(a) a repeated and demonstrated failure on the part of the Consultant to
perform the material duties of the Consultant's services in a competent
manner and the failure of the Consultant to substantially remedy such
failure within a reasonable period of time after receiving written notice
of such failure from the Company;
<PAGE>
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(a) conduct involving fraud, dishonesty, material violation of the Company's
policies and procedures or material non-compliance with the terms of this
Agreement;
(a) the Consultant or any member of his Company or family receiving any
personal profit arising out of or in connection with a transaction to which
the Company is a party or with which the Company is associated without
making disclosure to or obtaining the prior written consent of the Company;
(a) the failure by the Consultant to honour his fiduciary duties to the
Company, including the duty to act in the best interests of the Company;
(a) the existence of circumstances which would justify the laying of a charge
or information against the Consultant with respect to larceny, theft,
embezelment, forgery, misappropriation, wilfulness application or other
fraudulent or dishonest acts;
(a) the failure of the Consultant to obey reasonable instructions from an
authorized representative of the Company that are not consistent with the
Consultant's offered services and not remedy by the Consultant within a
reasonable period of time after receiving written notice of such
disobedience; and
(a) subject to applicable law, the Consultant's use of illegal drugs or abuse
of controlled substances or habitual intoxication.
1 ARTICLE - GENERAL CONTRACT PROVISIONS
2
2.1 Independent Contractor
2.2
The parties acknowledge and agree that the Consultant is acting as an
independent contractor in carrying out his obligations pursuant to the terms of
this agreement and it is acknowledged and agreed that any employees or agents of
the Consultant shall be deemed or construed to be acting in such capacity and
not as employees or agents of the Company. The Consultant shall be solely liable
for all acts of his employees and agents and responsible for all payments and
withholdings in connection therewith.
<PAGE>
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1.1 Severability
1.2
In the event that any provision herein or part thereof shall be deemed void
or invalid by a court of competent jurisdiction, the remaining provisions or
parts thereof shall be and remain in full force and effect. If, in any judicial
proceeding, any provision of this agreement is found to be so broad as to be
unenforceable, it is hereby agreed that such provision shall be interpreted to
be only so broad as to be enforceable.
1.1 Notices
1.2
All notices, requests, demands or other communications by the terms hereof
required or permitted to be given by one party to another shall be given in
writing by personal delivery or by registered mail, postage prepaid, addressed
to such other party or delivered to such other party as follows
(a) to the Company at:
(a) to the Consultant at:
or at such other address as may be given by any of them to the others in writing
from time to time and such notices, requests, demands or other communications
shall be deemed to have been received when delivered, or, if mailed, five (5)
business days following the date of mailing thereof; provided that if any such
notice, request, demand or other communication shall have been mailed and if
regular mail service shall be interrupted by strikes or other irregularities,
such notices, requests, demands or other communications shall be deemed to have
been received five (5) business days following the resumption of normal mail
service.
1.1 Entire Agreement
1.2
This agreement constitutes and expresses the whole agreement of the parties
hereto with reference to the provision by the Consultant of his services to the
Company and all other matters herein provided. All promises, representations,
collateral agreements and understandings relative thereto not incorporated
herein are hereby superseded and cancelled by this agreement.
<PAGE>
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1.1 Governing Law
1.2
This agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario.
1.1 Time of the Essence
1.2
Time shall be of the essence of this agreement and of every part hereof.
1.1 Assignment, Binding Effect
1.2
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Subject to the provisions of Article V, this agreement is personal to the
Consultant and may not be assigned by him without the prior written consent of
the Company. Subject to the foregoing, this agreement shall enure to the benefit
of and be binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
IN WITNESS WHEREOF the parties hereto have duly executed this agreement
this ___ day of ________, 19__.
SIGNED, SEALED AND DELIVERED ) PERICOM SYSTEMS CORPORATION
in the presence of: )
) Per:
) I have authority to bind the Corporation
)
)
)
) DOT COM ENTERTAINMENT
) GROUP INC.
)
) Per:
) I have authority to bind the Corporation
)
)
<PAGE>
-9-
CONSULTING AGREEMENT
B E T W E E N:
PERICOM SYSTEMS CORPORATION
- and -
DOT COM ENTERTAINMENT GROUP INC.
FOGLER, RUBINOFF
Barristers and Solicitors
Suite 4400, Royal Trust Tower
Box 95, Royal Toronto-Dominion Centre
Toronto, Ontario
M5K 1G8
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
The Precyse Corporation, Ontario, Canada 100%
