As filed with the Securities Exchange Commission on August __, 1999
U.S. 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 12(G) OF THE SECURITIES ACT OF 1934
www.eBIZnet.com, Inc.
---------------------
(Name of Small Business in Its Charter)
FLORIDA 65-0725217
- - - - ---------------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1197 W. Newport Center Drive, Suite 1195
Deerfield Beach, Florida 33442
- - - - ---------------------------------------- -----------------------------------
(Address of principal executive offices) (Zip Code)
(954) 570-9958 (954) 570-7873
- - - - ---------------------------------------- -----------------------------------
Issuers Telephone Number: Telecopier:
www.ebiznet.com
----------------------------------
Issuer's Website Address
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act: Common Stock, $0.001
par value
Common Stock
Purchase Warrants to
purchase shares of
Common Stock at
$1.00 per share.
1
<PAGE>
www.eBIZnet.com, Inc.
TABLE OF CONTENTS
PART I
Item 1. Description of Business
(a) Business Development
(b) Business of Issuer
(c) Reports to Shareholders
Item 2. Issuer's Plan of Operation
Item 3. Description of Property
Item 4. Security Ownership of Certain
Beneficial Owners and Management
Item 5. Directors, Executive Officers, Promoters
And Control Persons
Item 6. Executive Compensation
(a) Summary Compensation Table
(b) Options/SAR Grants
(c) Aggregated Options/SAR Exercises and Financial Year End
Option/SAR Value
(d) Long Term Incentive Plans
(e) Compensation of Directors
(f) Employment Contracts and Termination of Employment Or Change
in Control Arrangements
(g) Report on Repricing of Option/SARs
Item 7. Certain Relationships and Related Transactions
Item 8. Description of Securities
i
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
Item 2. Legal Proceedings
Item 3. Changes in and Disagreements With Accountants
Item 4. Recent Sales of Unregistered Securities
Item 5. Indemnification of Directors and Officers
PART F/S
Financial Statements
PART III
Item 1. Index to Exhibits
Item 2. Description of Exhibits
ii
<PAGE>
Part I
Item 1. Description of Business.
(a) Business Development:
The Company was incorporated in Florida in January 1997 under
the name Florida Internet Stock Exchange Inc. to develop and operate proprietary
websites. In October 1997, the Company changed its name to Florida Diet
Services, Inc. and began to focus its businesses on the development of its
proprietary website, www.dietplace.com, a multimedia interactive network
environment for the dissemination of human nutrition and dietary information and
for the promotion, marketing and sales of specialized food and nutrition diet
products. The Company, which adopted its current name in December 1998,
currently operates its business through five wholly owned subsidiaries, each
targeted at a different niche of the internet/information technology industry.
In December 1998, the Company purchased the shares of
Electronic Business Network, Inc., a Florida corporation formed in 1995 to
provide internet advertising and marketing services, including the creation of
websites and advertising banners for use at these sites.
In January 1999, the Company's wholly owned subsidiary, JBX
Online, Inc., purchased the assets of JBX Designs, Inc. d/b/a JBX Online, which
provides voice/data/network communications services and is developing
proprietary hardware and software products for use in the digital
telecommunications field.
In March 1999, the Company's wholly owned subsidiary, Global
Online Exchange, One, Inc., purchased the assets of International Trade
Exchange, Ltd., d/b/a International Credit Reserve Exchange (ICRE). ICRE is an
established internet barter exchange company.
In April 1999, the Company's wholly owned subsidiary, Global
Online Exchange, Inc., purchased the assets of Barter Accounting Software,
consisting of a proprietary barter accounting software program and related
goodwill.
(b) Business of Issuer:
(b)(1) Principal Products and Services and their Markets.
Electronic Business Network ("EBN"). EBN was formed in 1995 to
provide internet advertising and marketing services. During the past five years,
the use of the internet as an informational, entertainment and commercial medium
has grown explosively (See discussions of "Market" below). EBN has recognized
that a key to commercial success in this
1
<PAGE>
growing medium is the attraction of web "surfers" or users to a site and the
delivery of such surfers to advertisers. EBN has developed proprietary software
which enables the creation of fully functioning websites at the rate of more
than one site per second. As a result, EBN has assembled a substantial network
of websites, which it has organized within approximately 30 principal domains
owned by EBN in a variety of categories. These sites currently attract more than
ten (10) million viewers per month and more than twenty (20) million page views
per month. Due to the size and efficiency of its network, EBN believes it is
able to attract viewers at a relatively lower cost than its competitors, which
should enable it to sell banner advertising to other websites at lower prices.
The rapid growth of online advertising, as evidenced by the success of online
advertising agencies like Doubleclick and 24/7 Media, Inc., has broadened the
potential market for the Company's business.
Global Online Exchange, Inc. ("GOE"). GOE was formed in March,
1999 to develop and operate an online trade and exchange portal, in which barter
organizations, corporate trade exchanges, businesses and individuals will be
able to conduct barter transactions online in real time. Revenues are generated
by providing listing services, information transaction exchanges and escrow
services for the online barter community. According to the International
Reciprocal Trade Association ("IRTA"), a barter industry trade organization, the
barter community trades more than $9 billion per year in goods and services over
the internet. It is GOE's plan to provide a personalized portal for traders, who
will be able to trade products and services, participate in chat forums with
other traders and have access to news and regional information of interest to
the online barter community.
In March, 1999, GOE acquired the assets of International
Credit Reserve Exchange, Ltd. (ICRE), a company with eighteen (18) years
experience as a barter/trade exchange company. ICRE has over 300 active members
trading more than $2,000,000 annually. In addition, GOE purchased the assets of
Barter Accounting Software of Kansas City, MO in April, 1999. Barter Accounting
Software is the developer and owner of a widely used barter accounting software
program. GOE intends to utilize its new software and the existing clientele of
ICRE to seek and expand opportunities in the online barter industry.
JBX Designs, Inc. ("JBX"). JBX, based in Deerfield Beach,
Florida, was formed in January 1999 to provide voice, date and network
communication services to corporate clients. In January 1999, JBX purchased the
assets of JBX Designs, Inc., whose principal, John Boudreaux has more than
twelve (12) years experience in this field. Mr. Boudreaux is now employed by
JBX. The major current focus of JBX is the development of network access point
hardware and software, which allows for shared resources among telecommunication
service providers.
Capital Publications, Inc. ("CPC"). CPC provides financial and
business information for the online financial community through fifteen (15)
proprietary financial websites owned by EBN. The websites are Ginex.com,
Globalshareholders.com, Stockdoc.net, Smallcapmarkets.com, Harrisreport.com,
Topcaps.com, Ecomoney.com, Octpavilion.com,
2
<PAGE>
Newcaps.com, Stockleader.com, Talkingstock.com, Smallcapbytes.com,
Smallcapnet.com, Smallcap101.com and Smallcapinterviews.com. Advertising on
these sites are sold by EBN.
Stormcrow Studios ("Stormcrow"). Stormcrow was formed in April
1999 to develop multimedia content for use primarily on broadcast internet
websites. In April 1999, the Company employed Gerald Talifero to develop and
produce multimedia content for the Company. Stormcrow's current focus is the
production of multimedia advertisements for broadcast through the internet.
Stormcrow's work product is still in development.
(b)(2) Market:
The Internet. The Internet is a wide-area network, in which
computer users throughout the world can gain access to an almost endless flow of
information, communications and commerce. From its start in the 1960's as a
means for the U.S. Department of Defense to provide information across its
far-flung operations, the internet has become a universally used medium by which
scores of millions of people communicate, receive and provide information and
engage in ever-increasing amounts of commercial transactions, known as
eCommerce.
In the past several years, companies that have found ways to
provide safe and efficient eCommerce, such as Amazon.com, eBay, America Online,
Yahoo and others, have become household names almost overnight. In addition,
established commercial enterprises, such as Barnes & Noble, Charles Schwab and
others, have found their business challenged by online companies and have
responded by establishing successful eCommerce businesses of their own.
Internet Demographics. The internet marketplace has become one
of the fastest growing industries in the world today. Established media and
telecommunications companies are competing against new media startups and mature
software companies for market share. This rapid growth is attributed to
society's dependence on information and the pursuit of the next century's
business models.
In 1997, there were an estimated 50 million internet users
worldwide. By 1998, that number had increased to 200 million internet users,
with 96 million in the United States alone. Stanford Research Institute reports
that 70% of the internet population is made up of groups leading social change
and gravitating towards parts of society associated with innovation. Although
originally predominately male, the universe of web users has now become fairly
equally balanced between male and female. A.C. Nielsen reports that 51% of
people use the internet for entertainment. Yahoo!, the most popular internet
search engine, reported one billion page views during the month of June of 1998,
and claims that the most popular content category on its massive web site is
entertainment. This trend will continue to increase as the online experience
becomes richer in both depth and breadth of interactive content.
3
<PAGE>
Electronic Commerce on the Internet. The internet is an
increasingly significant global medium for communication and commerce. Growth in
internet usage has been driven by the emergence of the Web. Growth has been
buttressed further by enhancements in technology, which permit faster and more
secure transmission of information over the internet and a continuing drop in
prices for hardware and software needed to utilize the Web. As the number of
users has grown, retailers have been attracted to the internet as a medium for
reaching millions of consumers at low cost.
During 1996, $520 million in goods and services were sold
through the Web. In 1998, more than $10 billion in goods and services were sold
through the Web and Forrester Research estimates that in 2003, the amount of
goods and services sold over the internet to consumers will exceed $100 billion
and business to business eCommerce will exceed $1 trillion. To place those
numbers in context, in 1998, approximately 1% of all retail sales in the United
States were made through the internet. By 2001, that percentage is estimated to
increase to 6% of all retail sales.
The internet is evolving into a unique market channel, just as
retail stores, mail order catalogs and television shopping have previously
evolved as unique channels. By directly operating their own websites, internet
retailers can interact with customers in real-time by frequently adjusting their
product mix, pricing, and visual presentation. In addition, the global reach of
the internet allows retailers to build a large, geographically diverse customer
base more quickly than traditional retailers and catalog marketers. Unlike
traditional marketing channels, internet retailers do not have the burdensome
costs of a significant retail store infrastructure, the continuous printing and
mailing costs of a catalog marketer or the store personnel and call center costs
borne by traditional retailers and catalog marketers.
(b)(3) New Products or Services. The Company has not announced any
new products or services.
(b)(4) Competition. All phases of the internet and information
service industry are increasingly competitive. Many of the firms competing in
this industry have greater financial resources available to them than the
Company. The ability to compete successfully is dependent upon access to and
development of new technologies. In the internet advertising field, the ability
to compete successfully is based on developing innovative marketing techniques
that draw large numbers of visitors to websites. The click-through rates (number
of website visitors who "click through" to an advertisers' websites) for website
banner advertising is frequently less than 1%, which require advertisers to
attract significant numbers of visitors to the initial website.
The Company believes it is positioned to compete successfully
in this market based on its large network of websites to attract multiple web
surfers. However, it is competing against many advertising service providers,
including traditional advertising agencies as well as speciality internet
advertising agencies, many of which are significantly larger and more well
capitalized than the Company.
4
<PAGE>
The barter industry is, likewise, highly competitive. There
are currently hundreds of barter exchanges operating. The ability to succeed is
based substantially on being able to establish and promote a secure and reliable
environment in which trades can take place. Through the purchase of ICRE, an 18
year old barter exchange company, and Barter Accounting Software, one of the
more widely used barter accounting software products on the market, the Company
believes it will be able to achieve the key attributes to compete successfully.
However, the Company must establish a broad membership to create a vibrant
trading environment.
Internet content providers, such as the Company's CPC and
Stormcrow subsidiaries, are in intense demand as the number of websites needing
content continue to proliferate. Likewise, the number of content providers is
rapidly growing to fill this need. Such providers include established producers
of news and entertainment products, as well as smaller independent companies,
most of which have greater financial resources than the Company. As with any
content providers, the ability to compete is based on anticipating consumer
demands and taste and fulfilling them with quality products. The Company
believes that its method of operation should enable it to compete successfully
in this market.
(b)(5) Sources of Supply. The Company is not dependent on any
principal suppliers for a substantial part of its business. However, like all
internet companies, it is dependent on the continuing operability of the world
wide web to enable it to interact with its viewers. A breakdown in that system
would have an obvious negative impact on the Company's business.
(b)(6) Major Customers. The Company's major customers are
advertisers on its websites. The Company sells such advertising through its own
employees and through advertising sales representatives. In June 1999, the
Company entered into an agreement with Flycast Communications Corp., located in
San Francisco, California. Under that agreement, Flycast will sell advertising
space on certain of the Company's websites in exchange for a percentage of net
advertising revenues. In July 1999, the Company entered into a similar agreement
with 24/7 Media, Inc., located in New York City, under which 24/7 will sell
advertising space on certain of the Company's websites in exchange for a
percentage of net advertising revenues. The Company anticipates that a
substantial portion of its revenues during the next six months will be generated
under these two agreements. However, in the event either or both of those
entities is unable to generate advertising sales for the Company, the Company
believes there are sufficient alternative internet advertising agencies to
assist the Company in selling its advertisements.
(b)(7) Patents, Trademarks, License, etc. The Company has purchased
the exclusive rights to the tradenames Barter Accounting Software and ICRE for
use in its Global Online Exchange subsidiaries. The Company has also purchased
exclusive rights to the Barter Accounting Software. The Company intends to
protect all of its intellectual property through appropriate state and federal
registrations.
5
<PAGE>
(b)(8-9) Government Regulation and Approval. Currently, the
internet/information super highway is subject to government obscenity/decency
standards. The Company intends to comply fully with such standards. The
assignment and registration of web domain names have historically been
administered by Network Solutions, Inc. ("NSI") under license from the U.S.
government. NSI acts as a clearinghouse for website domain names and has adopted
regulations to resolve trademark related disputed between domain name users and
registered trademark owners. In 1999, the government opened this service to
other companies, which will compete with NSI for domain name registrants. The
Company currently registers its domain names with NSI. At such time as
additional registering companies become available, the Company may change such
use.
(b)(10) Research and Development. Since 1998, the Company has
expended in excess of $200,000 in the research and development of its
proprietary website generating software, its network access point hardware and
software and its online barter exchange business.
(b)(11) Environmental Compliance. The Company does not anticipate
any significant costs to comply with environmental laws and requirements.
(b)(12) Employees. As of August 20, 1999, the Company had 43
full-time employees, of whom four were employed by the Company, 28 were employed
by EBN, four were employed by JBX and seven were employed by GOE.
(c) Reports to Shareholders. At the time of the filing of this
registration statement, the Company is not subject to the information and
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Following the effective date of this registration statement,
the Company will be subject to the Exchange Act reporting requirements and, in
accordance therewith, will file reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information filed with the Commission by the Company
may be inspected and copied at the public reference facilities maintained by the
Commission at its principal offices at Judiciary Plaza, 450 5th Street NW,
Washington, D.C. 20549. Such reports, proxy statements and other information may
also be obtained from the website maintained by the Commission at
http://www.sec.gov. Copies of these materials can also be obtained at prescribed
rates from the public reference section of the Commission at its principal
offices in Washington D.C., as set forth above.
Item 2. Management's Discussion and Analysis or Plan of Operation.
The Company had no revenues from operations in 1997. In 1998, for
which year the Company's financial statements have been consolidated with
Electronic Business Network, Inc. which was acquired on December 2, 1998, the
Company had sales revenues of $306,224 and a net operating loss of $167,447. The
revenues were derived from the sale of interests in certain of the Company's
websites and the sale of advertising on its network of websites. In 1999, the
6
<PAGE>
Company purchased the assets of a barter exchange company, a barter accounting
software company and a voice/data communication, consulting and development
company, all in exchange for shares of its common stock. During the first two
quarters of 1999, the Company derived revenues from both its internet
advertising business and its developing barter exchange company. Revenues for
the three months and six months ended June 30, 1999 were $250,643 and $359,353,
respectively, as compared to $86,398 and $162,631, respectively, for the three
months and six months ended June 30, 1998. Cash and cash equivalents on June 30,
1999 were $64,586, as compared to $1,077 on June 30, 1998, due primarily to the
receipt of approximately $730,334 in revenues from the issuance of securities
during the first six months of 1999. Management believes that cash on hand, as
well as anticipated revenues and collection of accounts receivable, should be
sufficient to maintain continued operation of its internet advertising and
barter exchange operations, as well as the continued development of its
communications and multimedia production operations for the next twelve months.
Thereafter, management believes it may need additional financing or increased
revenues to continue its current and anticipated levels of development and
growth. There is no assurance that the Company will be able to raise such
additional financing or be able to generate sufficient additional revenues to
meet those requirements. The Company's primary activities and cash requirements
for the next twelve (12) months will be the continued operation of its internet
advertising and barter exchange business and further development of its
telecommunications hardware and software and multimedia content for broadcast
web sites. Management believes that its general and administraative expenses,
advertising and marketing expenses and contract labor expenses during the nex
twelve months will remain substantially consistent with the levels of such
expenses during the first six months of 1999, except for expenses which vary
directly with sales, should vary based on sales levels. The Company does not
anticipate any material changes in the number of employees during the next
twelve months, unless necessitated by an increase or decrease in the Company's
operations.
Item 3. Description of Property.
The Company's executive and administrative offices occupy
approximately 3200 square feet of office space at 1197 W. Newport Center Drive,
Suite 1195, Deerfield Beach, Florida. The Company leases this space from an
unaffiliated party on a verbal month-to-month basis, at a base rent of $2,304.00
per month. The Company's barter exchange subsidiary, Global Online Exchange,
Inc. has offices at 8061 Watson Road, Suite 131, St. Louis, Missouri 63119,
which it leases from an entity affiliated with the principal offices of that
subsidiary under a lease expiring in July, 2000.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth information as of August 13, 1999
with respect to the beneficial ownership of the Company's securities by officers
and directors, individually and as a group. To the Company's knowledge on August
13, 1999, there were no holders of more than 5% of the Company's Common Stock
other than R.C.C. Communications, Inc., Sharleen Glass,
7
<PAGE>
Garland E. Harris, Betty Weinstein, Yvonne Williams, Frank E. Lambrecht and
Michael D. Winkler. Unless otherwise indicated, all shares are beneficially
owned and sole investment and voting power is held by the beneficial owners
indicated. On August 13, 1999 there were 7,573,200 shares of Common Stock and
437,300 Common Stock Purchase Warrants outstanding. No shares of any other class
of capital stock are outstanding.
- - - - -------------------------------------------------------------------------------
Title of Class Name and address of Amount and nature Percent of
beneficial owner of beneficial owner Class
- - - - -------------------------------------------------------------------------------
Common Stock Sharleen Glass
11224 Marjoram Drive 425,000 5.6%
Palm Beach Gardens, FL 33418
- - - - -------------------------------------------------------------------------------
Garland E. Harris
Common Stock 1207 Hampton Blvd. 2,190,000 28.9%
N. Lauderdale, FL 33069
- - - - -------------------------------------------------------------------------------
Frank E. Lambrecht
Common Stock 634 N.E. 7th Avenue 425,000 5.6%
Boynton Beach, FL 33435
- - - - -------------------------------------------------------------------------------
R.C.C. Communications, Inc.
Common Stock 992 Galion Street 660,000 8.7%
Harrisburg, PA 17111
- - - - -------------------------------------------------------------------------------
Betty Weinstein
Common Stock 751-2 Coco Plum Circle 425,000 5.6%
Plantation, FL 33324
- - - - -------------------------------------------------------------------------------
Yvonne Williams
Common Stock 1200 West Avenue, #1125 425,000 5.6%
Miami Beach, FL 33139
- - - - -------------------------------------------------------------------------------
Michael D. Winkler
Common Stock 961 South Park Road, #110
Hollywood, FL 33021 425,000 5.6%
- - - - -------------------------------------------------------------------------------
8
<PAGE>
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The Company's executive officers and directors are as follows:
- - - - --------------------------------------------------------------------------------
Name Age Position
- - - - ---- --- --------
- - - - --------------------------------------------------------------------------------
Garland Harris 42 President, Chief Executive Officer,
Director
- - - - --------------------------------------------------------------------------------
Kevin T. Cabell 44 Director
- - - - --------------------------------------------------------------------------------
Rhonda Pruitt 45 Secretary
- - - - --------------------------------------------------------------------------------
Brooks Faulkenberry 53 Chief Operating Officer
- - - - --------------------------------------------------------------------------------
Harold Rice 57 Chief Financial Officer, Director
- - - - --------------------------------------------------------------------------------
The principal occupation, title and business experience of the
Company's executive officers and directors during the last five years, including
the names and locations of employers, is indicated below:
Garland E. Harris has been President, Chief Executive Officer and a Director of
the Company since December 1998. Prior to that, he was founder and president of
Electronic Business Network, Inc., located in North Lauderdale, Florida from
1994 to 1998, when EBN was acquired by the Company. He has over 19 years of
management, training and entrepreneurial-related experience. Mr. Harris has a
degree in Theology from Way College of Biblical Research, Rome City Indiana. He
also attended Stanford University, studying Architecture in 1977.
Brooks Faulkenberry, a native of El Paso, Texas, has been Chief Operating
Officer of the Company since August 1999. From 1994 to 1997, he was an
investment manager at BFFS Company, an El Paso, Texas financial consulting firm.
From 1997 to 1999, he was an investment banker at Mull, Paige & Associates, LLC
located in Deerfield Beach, Florida. Prior to 1994, he held executive positions
with Bassett National Bank, Warner-Lambert Co. and Scott Paper Company. Mr.
Faulkenberry attended the University of Texas at El Paso from 1965 to 1969,
majoring in finance.
Kevin T. Cabell has been a director of the Company since February 1999 and had
served the Company as a corporate consultant since such time. Mr. Cabell has
served as an independent financial consultant to a variety of corporations and
entrepreneurs since 1994. Prior to that, he held management positions in
regional and principal capacities with Dallas Research and Trading, Inc.,
Network 1, Inc. and Monmouth Investments. Mr. Cabell earned a Bachelor of
Science degree in Business Administration from the University of Illinois in
Urbana.
9
<PAGE>
Rhonda Pruitt has been employed by the Company since 1998 and, since March 1999,
has been its Secretary and Director of Corporate Operations. From 1994 to 1999,
Ms. Pruitt was V.P. of Operations for Harmon Development in Boca Raton, Florida.
She is also a real estate sales person/mortgage broker, operated a personnel
company in Deland, Florida and has worked in management positions with a number
of human resource companies, including Kelly Services. She holds a Bachelor of
Arts Degree in Communications from Florida Atlantic University.
Harold Rice was elected Chief Financial Officer of the Company in August 1999.
For the past five years he has been President of Barter Accounting Software, a
software development firm in Kansas City, Missouri, and President of Mid West
Accounting and Tax Service, also in Kansas City. Mr. Rice received both his
Bachelor of Arts degree in Psychology and a Masters degree in Public
Administration at the University of Missouri.
Item 6. Executive Compensation.
(a) Summary Compensation Table
<TABLE>
<CAPTION>
- - - - ----------------------------------------------------------------------------------------
Annual Compensation
Name And Year --------------------------------------------------
Principal Position Salary Bonus Other Annual Compen-sation
($) ($) ($)
(a) (b) (c) (d) (e)
- - - - ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Garland Harris
Chief Executive Officer,
Director 1998 104,000 0 0
- - - - ----------------------------------------------------------------------------------------
Willis Hale
Treasurer,
Chief Financial Officer 1998 88,400 0 0
- - - - ----------------------------------------------------------------------------------------
Sharleen Glass
President 1998 0 0 0
- - - - ----------------------------------------------------------------------------------------
</TABLE>
(b) Option/SAR Grants in Last Fiscal Year
(Individual Grants)
No stock options or SAR grants have been given by the Company.
(c) Aggregated Option/SAE Exercises in Last Fiscal Year And Fiscal
Year-End Option/SAR Values
None
10
<PAGE>
(d) Long Term Incentive Plans-Awards in Last Fiscal Year
The Company has no long-term incentive plans.
(e) Compensation of Directors
The Directors of the Company serve without any compensation for
their services as Directors.
(f) Employment Contracts
On January 15, 1999, the Company's subsidiary, JBX Online, Inc.
("JBX") entered into an employment contract with John Boudreaux,
pursuant to which Mr. Boudreaux was employed as President and Chief
Technical Officer of JBX. The Agreement provides for annual
compensation of $52,000, plus automobile, telephone and industry
dues and subscription benefits in an aggregate amount of $8,200 per
year. In addition, the Company agreed to pay Mr. Boudreaux an amount
equal to $100,000, $20,000 in 4 monthly installments of $5,000 each
commencing February, 1999, plus $80,000 in stocks, warrants or
options at the discretion of the Company due on or before January 1,
2000.
On February 19, 1999, the Company's subsidiary Global Online, Inc.
("GOE") entered into an employment contract with W. Allen Cochran,
pursuant to which Mr. Cochran was employed as President of GOE. The
Agreement provides for annual compensation of $52,000, plus
automobile, telephone and industry dues and subscription benefits in
the aggregate amount of $8,200 per year. In addition, the Company
agreed to grant Mr. Cochran an option to purchase 10,000 shares of
the Company's common stock at $1.00 per share at such time as the
Company adopts an employee stock option program. No options have
been granted to date.
(g) Report on Repricing of Options/SARS
Not applicable
Item 7. Certain Relationships and Related Transactions.
On January 30, 1997, the Company issued a total of 425,000 shares of
its Common Stock, par value $.001, to its founders in exchange for
pre-incorporation services and monetary advances provided by the founders on
behalf of the Company. The services and advances were valued at the par value of
the shares. During 1998, an additional 2,275,000 shares of its $.001 par value
Common Stock were issued to the founders in exchange for services and cash
contributions valued at the par value of the shares.
11
<PAGE>
In December 1998, the Company purchased the shares of Electronic
Business Network, Inc. from Garland Harris, the Company's president, and RCC
Communications, Inc. in exchange for 3,000,000 shares of the Company's Common
Stock. The acquisition was negotiated on an arms-length basis and Mr. Harris did
not become affiliated with the Company until the completion of the acquisition.
In 1998, Mr. Harris loaned $75,000 to the Company, which the Company
has agreed to repay on December 31, 1999 in a balloon payment plus interest at
12% per annum.
In January 1999, the Company purchased the assets of JBX Designs,
Ltd. in exchange for the issuance of 115,000 shares of the Company's Common
Stock to John Boudreaux, who is now the director of the Company's JBX Online
subsidiary. The acquisition was negotiated on an arm's length basis and Mr.
Boudreaux did not become affiliated with the Company until the completion of the
acquisition.
In March 1999, the Company purchased the assets of International
Trade Exchange, Ltd. ("ICRE") in exchange for the issuance of 75,000 shares of
the Company's Common Stock to W. Allen Cochran, who is now the director of the
Company's Global Online subsidiary. The acquisition was negotiated on an arm's
length basis and Mr. Cochran did not become affiliated with the Company until
the completion of the acquisition.
In April 1999, the Company purchased the assets of Barter Accounting
Software from Harold Rice, the Company's current chief financial officer and
member of the Company's board of directors, in exchange for 200,000 shares of
the Company's Common Stock. The acquisition was negotiated on an arm's length
basis and Mr. Rice did not become affiliated with the Company until the
completion of the acquisition.
Item 8. Description of Securities.
The Company's authorized capital stock consists of 25,000,000 shares
of common stock, $.001 par value per share, of which 7,573,200 were outstanding
as of August 13, 1999, and 5,000,000 shares of Preferred Stock, no par value as
to which the Board has the power to designate the rights, terms and preferences.
As of August 23, 1999, the Board had not designated or issued any Preferred
Stock.
Common Stock: As of August 13, 1999, 7,573,200 shares were issued
and outstanding. Holders of common stock are entitled to one vote for each share
of Common Stock owned of record on all matters to be voted on by stockholders,
including the election of directors. The holders of Common Stock are entitled to
receive such dividends, if any, as may be declared from time to time by the
Board of Directors, in its discretion, from funds legally available. The Common
Stock has no preemptive or other subscription rights, and there are no
conversion rights or redemption provisions. All outstanding Shares of Common
Stock are validly issued, fully paid and nonassessable.
12
<PAGE>
Undesignated Preferred Stock: The Company's Board of Directors
presently has the authority to issue up to 5,000,000 shares of no par value
preferred stock. Such shares may be issued upon such terms and conditions as the
Board of Directors may determine at the time of issuance without further action
of the Stockholders being required. Such preferred shares may or may not be: (i)
issued in series; (ii) convertible into shares of Common Stock; (iii) redeemable
by the Company; (iv) entitled to cumulative dividends; or (v) subject to other
appropriate terms and conditions. Issuance of Preferred Stock allowing its
convertibility into Common Shares may be considered a determinative factor with
regard to control as well as the future market value of the Company's present
outstanding Securities. The Board has no present intention of issuing any
preferred stock.
Other Securities to be Registered.
On July 7, 1998, the Company, in a Rule 504 Offering, offered
965,000 Common Stock Purchase Warrants at the price of $0.0005 per Warrant, each
of which is convertible into one share of Common Stock upon the payment of the
exercise price of $1.00 per share. As of August 23, 1999, there were 437,300
Warrants remaining outstanding. The Warrants expire on July 7, 2001. The Company
retains the right to decrease the exercise price, effect a change in the
"exchange ratio" (i.e., increase the number of shares to which each Warrant can
be exchanged) or extend the termination date. In the event that the Company
declares a stock split or stock dividend on the outstanding shares of Common
Stock, the exercise price and share exchange ratio of all Warrants then
remaining outstanding shall be adjusted to reflect such a split or dividend. Any
change in the terms of the Warrants by the Company may be considered a
determinative factor with regard to control as well as the future market value
of the Company's present outstanding Securities.
Transfer Agent: The Company's transfer agent is Florida Atlantic
Stock Transfer, Inc., 7130 Nob Hill Road, Tamarac, Florida 33321 (telephone
(954) 726-4954; telecopier (954) 726-6305).
Part II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters.
(a) Market Information.
The Company's Common Stock is traded over-the-counter on the
electronic bulletin board operated by the National Association of Securities
Dealers under the symbol "BIZN." The following table sets forth the high and low
bid prices quoted for the Company's Common Stock for since the inception of its
quotation on the bulletin board:
13
<PAGE>
HIGH LOW
1998 Fourth Quarter $9.50 $0.75
1999 First Quarter $10.25 $1.46875
1999 Second Quarter $3.3125 $1.00
The above quotations reflect inter-dealer prices, without retail
mark-up, mark- down or commission and may not represent actual transactions.
(b) Holders.
As of August 13, 1999, there were approximately 49 record holders of
the Company's Common Stock. Based on information from brokers and other
investment advisors, the Company estimates that there are approximately 225
beneficial holders of the Company's Common Stock.
(c) Dividends.
The Company has never declared or paid any cash dividends on its
Common Stock. The Company currently anticipates that all future earnings will be
retained by the Company to support its growth strategy. Accordingly, the Company
does not anticipate paying cash dividends on the Common Stock in the foreseeable
future.
Item 2. Legal proceedings.
The Company is not a party to any lawsuit, litigation, or regulatory
proceeding of any kind, filed, pending or threatened.
Item 3. Changes in and Disagreements with Accountants.
From the Company's inception until December 2, 1998, Harvey
Judkowitz, CPA was the principal independent auditor for the Company. On
December 2, 1998, the Company acquired Electronic Business Network, Inc. Upon
the completion of that acquisition, Michael J. Bongiovanni, P.A., C.P.A., which
had been the principal independent auditor for Electronic Business Network,
Inc., became the principal independent auditor for the Company.
At no time did Harvey Judkowitz, CPA, have any adverse opinion,
disclaimer of opinion or modification in his reports for the Company. At no time
was there any disagreement between Harvey Judkowitz, CPA and the Company with
respect to the financial information of the Company.
14
<PAGE>
Item 4. Recent Sales of Unregistered Securities.
The Company has issued the following securities in transactions not
registered under the Securities Act of 1933 (the "Act").
(a) Upon its organization, the Company issued 425,000 shares of its
$.001 par value Common Stock to its founders, at par value, in consideration for
pre-incorporation services and monetary advances. In 1998, the Company issued an
additional 2,275,000 shares to its founders, at par value, in consideration for
services and cash advances. Those shares were originally issued as follows:
Name Number of Shares Price
---- ---------------- -----
Paul M. Galant 425,000 $425
Sharleen B. Glass 425,000 $425
Frank E. Lambrecht 425,000 $425
Betty Weinstein 425,000 $425
Yvonne Williams 425,000 $425
Michael D. Winkler 425,000 $425
(b) Between February 16, 1998 and May 5, 1998, the Company sold an
aggregate of 45,500 shares of its Common Stock at $.50 per Share in connection
with an offering of 50,000 shares pursuant to Rule 504 under Regulation D of the
Act. There were 59 purchasers of these shares.
(c) In July 1998, the Company sold 965,000 Common Stock Purchase
Warrants at $.005 per Warrant pursuant to an offering of 965,000 Warrants
pursuant to Rule 504 under Regulation D of the Act. As of August 23, 1999, there
were 437,000 Warrants remaining unexercised.
(d) In December 1998, the Company issued 3,000,000 shares of its
Common Stock to the shareholders of Electronic Business Network, Inc., in
exchange for all outstanding shares of that company.
(e) In January 1999, the Company issued 115,000 shares of its Common
Stock to the shareholders of JBX Designs, Inc., in exchange for all the assets
of that company.
(f) In April 1999, the Company issued 75,000 shares of its Common
Stock to the shareholders of International Trade Exchange, Ltd., in exchange for
all the assets of that company.
(g) In April 1999, the Company issued 200,000 shares of its Common
Stock to the owner of Barter Accounting Software, in exchange for all the assets
of that company.
(h) On or about March 26, 1999, the Company entered into an
agreement with Wheatear Corporation, a Florida corporation, pursuant to which
Wheatear agreed to purchase 650,000 shares of the Company's common stock for the
purchase price of $435,000. The shares were issued to Wheatear on or about April
6, 1999 and the purchase price was paid by delivery of a promissory note,
pursuant to which Wheatear agreed to pay the sum of $435,000 in five weekly
installments commencing April 30, 1999, with its obligations secured by a pledge
of the underlying shares. Wheatear has defaulted in its payments, leaving an
unpaid balance of $277,500. The Company has commenced efforts to enforce its
rights against the pledge shares.
15
<PAGE>
All the shares issued under items (a) and (d) through (h) above are
restricted securities as that term is defined under Rule 144 promulgated under
the Act.
Item 5. Indemnification of Directors and Officers.
The Company's Articles of Incorporation contain a provision that
permits the Company to indemnify any officer, director or any former officer or
director, to the extent permitted by the General Corporation Act of the State of
Florida.
The Company's By-laws authorize the Company to indemnify its
officers and Directors to the fullest extent allowed under Florida corporate law
for claims brought against such persons in their capacity as officers or
directors. Under the Florida General Corporations Act 607.0850, such
indemnification is considered proper only when the officer or director has met
the applicable standard of conduct set forth in Sections 607.0850 (1) and (2).
Such indemnification would not shield the directors or officers from liability
for acts taken in bad faith or in a manner believed by them not to be in the
best interests of the Company or for criminal acts.
16
<PAGE>
Part F/S
<PAGE>
--------
CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com, Inc.
AS OF JUNE 30, 1999
AND FOR THE 3 MONTH AND SIX MONTH
PERIODS THEN ENDING
(UNAUDITED)
--------
18
<PAGE>
CONSOLIDATED BALANCE SHEETS
www.eBIZnet.com, Inc.
As of December 31, 1998 and June 30, 1999
<TABLE>
<CAPTION>
ASSETS (Unaudited)
December 31, 1998 June 30, 1999
----------------- -------------
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ -- $ 64,586
Accounts receivable 674 162,317
----------- -----------
TOTAL CURRENT ASSETS 674 226,903
PROPERTY & EQUIPMENT
Less: Accumulated Depreciation 18,273 28,732
TOTAL PROPERTY & (7,328) (11,174)
----------- -----------
EQUIPMENT 10,895 17,558
OTHER ASSETS
Goodwill and Customer Lists, net of accumulated
amortization of $ -0- and $163, 774 at December
31, 1998 & June 30, 1999, respectively 300,000 1,579,431
Organizational Cost, net of
accumulated amortization of
$9 and $35 at December 31, 1998
and June 30, 1999, respectively 516 490
----------- -----------
TOTAL OTHER ASSETS 100,516 1,579,921
TOTAL ASSETS $ 312,085 $ 1,824,382
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts Payable $ 257,817 $ 315,349
Shareholder Loans 78,144 89,221
Interest Payable 0 1,610
----------- -----------
TOTAL CURRENT LIABILITIES 335,961 406,180
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock ($.001 par value),
25,000,000 shares authorized:
5,745,500 and 7,573,200 issued and
outstanding at December 31, 1998
and June 30, 1999, respectively 5,745 7,573
Preferred Stock (no par value:
5,000,000 authorized, -0- issued) -- --
Additional Paid-In-Capital 95,771 2,302,898
Less: Treasury Stock at Cost -- (40,000)
Stock to be Issued 37,500 --
Retained Deficit (162,892) (852,269)
(23,786) 1,419,812
----------- -----------
TOTAL STOCKHOLDERS'
EQUITY $ 312,085 $ 1,824,382
=========== ===========
</TABLE>
19
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
www.eBIZnet.com, Inc.
For the Three and Six Months Ended June 30, 1999
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Three Months Ended Six Months Ended
June 30, 1999 June 30, 1999 June 30, 1998 June 30, 1998
------------------ ---------------- ------------------ ----------------
<S> <C> <C> <C> <C>
REVENUE
Sales $ 250,643 $ 359,353 $ 86,398 $ 162,631
Commissions (17,186) (28,096) (3,122) (13,083)
----------- ----------- ----------- -----------
GROSS PROFIT 233,457 331,257 83,276 149,548
OPERATING EXPENSES
Advertising $ 27,019 $ 28,347 $ -- 500
Amortization 82,039 163,800 -- --
Consultant 48,148 93,013 11,230 51,690
Contract Labor 186,434 379,518 63,356 87,826
Depreciation 1,348 1,698 -- --
Interest Expense 1,610 3,615 301 301
Office Expenses 27,908 38,567 7,716 11,284
Professional Fees 30,423 46,949 4,107 4,107
Salaries 53,173 57,104 -- --
Rent 26,609 47,010 1,260 1,576
Technical Expenses 73,600 95,814 30,883 58,877
Other Administrative Expenses 53,463 65,199 2,382 5,835
----------- ----------- ----------- -----------
TOTAL EXPENSES 611,774 1,020,634 121,237 221,996
----------- ----------- ----------- -----------
OPERATING LOSS $ (378,317) $ (689,377) $ (37,961) $ (72,447)
=========== =========== =========== ===========
Basic and Fully Diluted
Loss per Share $ (0.06) $ (0.10) N/A N/A
=========== =========== =========== ===========
Weighted Average
Shares Outstanding 5,970,0300 6,659,100 N/A N/A
=========== =========== =========== ===========
</TABLE>
20
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
www.eBIZnet.com, Inc.
For the Six Months Ended June 30, 1998
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Six Months Ended Six Months Ended
CASH FLOWS FROM OPERATING ACTIVITIES June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
Net Loss $ (689,377) $ (72,447)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation expense 1,698 --
Amortization expense 163,800 --
Increase in operating assets:
Accounts receivable (161,643) --
Increase (decrease) in operating liabilities:
Accounts payable 53,767 --
Interest payable 1,610 --
----------- -----------
NET CASH USED IN
OPERATING ACTIVITIES $ (630,145) $ (72,447)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment (10,450) --
----------- -----------
NET CASH USED IN
INVESTING ACTIVITIES $ (10,450) $ --
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shareholders loans $ 11,077 $ 71,947
Proceeds from other short-term loan 3,765 --
Proceeds from issuance of common stock 730,339 --
Repurchase of common stock (40,000) --
----------- -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 705,181 71,947
----------- -----------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 64,586 $ (500)
----------- -----------
Cash and cash Equivalents, beginning of period $ -- $ 1,677
----------- -----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 64,586 $ 1,077
=========== ===========
Supplemental Disclosures of Cash Flow Information:
Accounts receivable, equipment, customer lists, and goodwill
acquired for common stock $ 1,543,205 $ --
=========== ===========
</TABLE>
21
<PAGE>
--------
CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com, Inc.
DECEMBER 31, 1998 and MARCH 31, 1999
--------
22
<PAGE>
CONTENTS
================================================================================
INDEPENDENT AUDITOR'S REPORT............................................... 1
CONSOLIDATED BALANCE SHEETS
ASSETS, LIABILITIES AND STOCKHOLDERS' DEFICIT................... 2-3
CONSOLIDATED STATEMENTS OF OPERATIONS ..................................... 4-5
CONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY (DEFICIT)................................................ 6
CONSOLIDATED STATEMENTS OF CASH FLOWS...................................... 7-9
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS......................................................10-20
================================================================================
23
<PAGE>
Michael J. Bongiovanni, P.A., C.P.A.
12433 Willingdon Road
Charlotte, North Carolina 28078
================================================================================
Business (704) 904-2390
Facsimile (704) 948-6677
Voice Mail (954) 528-1899
Email: [email protected]
To the Board of Directors
www.eBIZnet.com, Inc.
1197 West Newport Center Drive
Deerfield Beach, Florida 33442
I have audited the accompanying consolidated balance sheets of
www.eBIZnet.com, Inc. as of December 31, 1998 and March 31, 1999 and the related
consolidated statements of operations, stockholders' equity (deficit), and cash
flows for the year ended December 31, 1998 and the three months ended March 31,
1999. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audits.
I conducted my audits in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are
free from material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audits provide a reasonable
basis for my opinion.
In my opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of www.eBIZnet.com, Inc. as of December 31, 1998 and March 31, 1999,
and the consolidated results of its operations and its cash flows for the year
ended December 31, 1998 and the three months ended March 31, 1999 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note A to the
financial statements, the Company has suffered recurring losses from operations,
its current liabilities exceeds its current assets and its cash flows from
operating activities are negative. This raises substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note O. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Michael J. Bongiovanni, C.P.A.
Michael J. Bongiovanni, C.P.A.
June 5, 1999
24
<PAGE>
CONSOLIDATED BALANCE SHEETS
www.eBIZnet.com Inc.
December 31, 1998 and March 31, 1999
<TABLE>
<CAPTION>
ASSETS 1998 1999
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ -- $ 2,558
Accounts Receivable 674 121,133
----------- -----------
TOTAL CURRENT ASSETS 674 123,691
PROPERTY AND EQUIPMENT
Computer Equipment 15,136 15,537
Furniture & Fixtures 1,994 1,994
Office Networking Equipment 1,143 1,143
Vehicle -- 1,000
Accumulated Depreciation (7,378) (7,728)
----------- -----------
TOTAL PROPERTY AND EQUIPMENT 10,895 11,946
OTHER ASSETS
Goodwill and Customer Lists, net of accumulated amortization
of $ - and $78,402 at December 31, 1998 and March 31,
1999, respectively 100,000 1,464,803
Purchased Shell, net of accumulated amortization
of $ - and $3,333 at December 31, 1998 and
March 31, 1999, respectively 200,000 196,667
Organizational Costs, net of
accumulated amortization of $9 and
$35 at December 31, 1998 and
March 31, 1999, respectively 516 490
----------- -----------
300,516 1,661,960
----------- -----------
TOTAL ASSETS $ 312,085 $ 1,797,597
=========== ===========
</TABLE>
See notes to audited consolidated financial statements and auditor's report.
25
<PAGE>
CONSOLIDATED BALANCE SHEETS (CONT.)
www.eBIZnet.com Inc.
December 31, 1998 and March 31, 1999
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
1998 1999
---- ----
<S> <C> <C>
CURRENT LIABILITIES
Accounts Payable - Trade $ 37,394 $ 84,168
Accounts Payable - Purchased Shell 200,000 200,000
Outstanding Checks in Excess
of Bank Balances 20,423 --
Shareholders Loans Payable 78,144 94,531
----------- -----------
TOTAL CURRENT LIABILITIES 335,961 378,699
LONG-TERM DEBT
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock ($.001 par value, 25,000,000 shares authorized;
5,745,500 and 6,195,600 shares issued and outstanding at
December 31, 1998
and March 31, 1999, respectively) 5,745 6,195
Preferred Stock (no par value, 5,000,000 shares
authorized, none issued) -- --
Additional Paid in Capital 95,771 1,886,655
Stock to be Issued 37,500 --
Retained Deficit (162,892) (473,952)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY (23,876) 1,418,898
----------- -----------
$ 312,085 $ 1,797,597
=========== ===========
</TABLE>
See notes to audited consolidated financial
statements and auditor's report.
26
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
1998 1999
---- ----
REVENUE
Net Sales $ 306,224 $ 108,710
Commissions on Sales (21,075) (10,910)
--------- ---------
GROSS PROFIT 285,149 97,800
OPERATING EXPENSES
Advertising $ 500 $ 1,328
Amortization 9 81,761
Automobile 4,146 3,995
Bank Charges 2,692 1,011
Computer Software 701 286
Consulting Fees 77,990 44,865
Contract Labor 174,506 193,084
Corporate Fringes 522 130
Depreciation 1,466 350
Dues & Fees 415 517
Meals & Entertainment 1,012 2,238
Miscellaneous -- 669
Outside Services 15,000 2,500
Office Supplies & Expense 1,249 974
Postage & Couriers 183 400
Professional Fees 13,849 16,526
Rent 5,460 20,401
Salaries & Wages -- 3,931
Taxes & Licenses 1,103 514
Telephone 13,316 6,785
Training & Seminars -- 808
Travel 3,963 1,854
Web Hosting, Trafficking & Development 134,514 21,928
--------- ---------
TOTAL EXPENSES 452,596 406,855
--------- ---------
OPERATING LOSS (167,447) (306,055)
See notes to audited consolidated financial
statements and auditor's report.
27
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS (CONT.)
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
1998 1999
---- ----
OTHER INCOME (EXPENSE)
Interest Income $ 75 $ --
Interest Expense (8,356) (2,005)
--------- ---------
TOTAL OTHER EXPENSE (8,281) (2,005)
--------- ---------
NET LOSS $(175,728) $(311,060)
Retained Earnings (Deficit),
Beginning of Period 12,836 (162,892)
--------- ---------
Retained Deficit, End of Period $(162,892) $(473,952)
========= =========
Basic and diluted net loss per common share $ (.07) $ (.05)
========= =========
See notes to audited consolidated financial
statements and auditor's report.
28
<PAGE>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
<TABLE>
<CAPTION>
Common Common Additional Retained
Shares Stock Paid-in Earnings
(000's) $ Capital (Deficit)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Balances, January 1, 1998 -- $ 1 $ 999 $ 12,836
Retroactive restatement (recapitalization)
of equity due to reverse acquisition
of public shell 5,745 $ 5,744 $ 94,772 --
Net loss for 1998 -- -- -- $ (175,728)
---------- ---------- ---------- ----------
Balances, December 31, 1998 5,745 $ 5,745 $ 95,771 $ (162,892)
Common stock issued in exchange
for subcontract labor and stock
promotional services 50 $ 50 $ 37,450 --
Common stock issued with exercise
of stock warrants 210 $ 210 $ 209,900 --
Common stock issued for acquisition
of JBX (Note J) 115 $ 115 $1,168,609 --
Common stock issued for acquisition
of ICRE (Note J) 75 $ 75 $ 374,925 --
Net loss for the three month ended
March 31, 1999 -- -- -- $ (311,060)
---------- ---------- ---------- ----------
Balances, March 31, 1999 6,195 $ 6,195 $1,886,655 $ (473,952)
========== ========== ========== ==========
</TABLE>
See notes to audited consolidated financial
statements and auditor's report.
29
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
<TABLE>
<CAPTION>
1998 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(175,728) $(311,060)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation expense 1,466 350
Amortization expense 9 81,761
Accrued interest expense (Note C) 6,517 2,005
Common stock issued for compensation
and promotional services 37,500 --
Increase in operating assets:
Accounts receivable (674) (20,459)
Increase (decrease) in operating liabilities:
Outstanding checks in excess of bank balance 20,423 (20,423)
Accounts payable - purchased shell 200,000 --
Accounts payable - trade (178,103) 46,774
--------- ---------
NET CASH USED IN
OPERATING ACTIVITIES (88,590) (221,052)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment (6,438) (1,401)
--------- ---------
NET CASH USED IN
INVESTING ACTIVITIES (6,438) (1,401)
See notes to audited consolidated financial
statements and auditor's report.
</TABLE>
30
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.)
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
1998 1999
---- ----
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shareholders loans (Note C) $ 75,000 $ 14,911
Proceeds from installment note payable - bank (Note B) 50,000 --
Repayment of installment note payable - bank (Note B) (50,000) --
Proceeds from other short-term loan 3,000 --
Repayment of other short-term loan (3,000) --
Incurrence of subcontractors' notes payable (Note D) 18,712 --
Repayment of subcontractor' notes payable (Note D) (18,712) --
Proceeds from issuance of common stock 4,079 210,100
Repayments of loans to shareholder (7,461) --
-------- --------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 71,618 225,011
-------- --------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $(23,410) $ 2,558
-------- --------
Cash and cash equivalents, beginning of period $ 23,410 $ --
-------- --------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ -- $ 2,558
======== ========
See notes to audited consolidated financial
statements and auditor's report.
31
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.)
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
1998 1999
---- ----
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest during the period $ 1,839 $ --
========= ============
Supplemental Disclosures of Noncash Financing
and Investing Activities:
Issuance of common stock in exchange
for services $ 37,500 $ --
========= ============
Goodwill and public shell acquired pertaining
to reverse merger on December 2, 1998 $ 300,000 $ --
========= ============
Accounts receivable, equipment, customer
lists, and goodwill acquired for common stock $ -- $ 1,543,205
========= ============
32
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity - Www.eBIZnet.com, Inc. was organized under the laws of the
State of Florida on January 29, 1997 and adopted its original name of Florida
Diet Services, Inc. effective October 13, 1997. On December 3, 1998,
www.wBIZnet.com, Inc. legally amended its Articles of Incorporation to effect a
name change from Florida Diet Services, Inc. to www.eBIZnet.com, Inc. and
commenced operations as of that date upon a reverse acquisition as described
below in Note J. Www.eBIZnet.com, Inc. had no prior operating history while
functioning under its former name of Florida Diet Services, Inc..
Www.eBIZnet.com, Inc., together with certain of its subsidiaries (the Company),
provides comprehensive Internet advertising and marketing services, including
the creation of web sites and advertising banners for use at those sites across
the world.
The Company also operates a barter exchange in the St. Louis, Missouri community
where corporations and individuals exchange goods and services with each other.
Fees are generated by the Company as a third-party record-keeper of members'
transactions and balances, which are denominated in trade dollars. The Company
uses the ratio of one trade dollar to one United States dollar in measuring and
accounting for purchases and sales. This one-for-one ratio is the pervasive
standard throughout the barter industry.
Inherent in the Company's Internet related business are various risks and
uncertainties, including its limited operating history, recent development of
the Internet advertising market and unproven acceptance and effectiveness of Web
advertising, unproven business model, risks associated with technological
change, and the limited history of commerce on the Internet. The Company's
success may depend in part upon the emergence of the Internet as a
communications medium, prospective product development efforts, and the
acceptance of the Company's solutions by the marketplace. The Company has
incurred recurring losses from operations since inception, its current
liabilities exceeds its current assets and its cash flows from operating
activities are negative. This raises substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note O.
Basis of Presentation - The consolidated financial statements included herein
include the accounts of the www.eBIZnet.com, Inc. and its wholly-owned
subsidiaries. All material intercompany transactions and balances have been
eliminated.
Accounts Receivable - Accounts receivable are charged to bad debt expense as
they are deemed uncollectible based upon a periodic review of the accounts. No
bad debt expense for the year
33
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
Accounts Receivable (cont.) - ended December 31, 1998 and the three months ended
March 31, 1999 was recorded. At December 31, 1998 and March 31, 1999, no
allowance for doubtful accounts was deemed necessary.
Credit is extended to customers based on an evaluation of their financial
condition, and collateral is not required. The Company performs ongoing credit
evaluations of its customers.
Property and Equipment - Property and equipment are recorded at cost and include
expenditures which substantially increase the productive lives of the existing
assets. Maintenance and repair costs are expensed as incurred. Depreciation is
provided using the straight-line method. Depreciation of property and equipment
is calculated over the management prescribed recovery periods which range from 5
to 39 years. Goodwill and purchased customer lists are amortized over periods
ranging from 3 to 15 years.
When a fixed asset is disposed of, its cost and related accumulated depreciation
are removed from the accounts. The difference between undepreciated cost and
proceeds from disposition is recorded as a gain or loss.
Long-Lived Assets - In accordance with Financial Accounting Standards Board
Statement of Financial Accounting Standard No.121 "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of", the carrying
value of intangible assets and other long-lived assets is reviewed by management
on a regular basis for the existence of facts or circumstances, both internally
and externally, that may suggest impairment. To date, no such impairment has
been indicated. Should there be an impairment in the future, the Company will
recognize the amount of the impairment based on discounted expected future cash
flows from the impaired assets.
Cash and Cash Equivalents - For purposes of the Consolidated Statements of Cash
Flows, the Company considers liquid investments with an original maturity of
three months or less to be cash equivalents.
Uninsured Deposits - At times during the year, the Company maintains cash
balances in bank accounts in excess of federally insured amounts.
Management's Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that effect the reported amounts of assets and
liabilities, disclosures of contingent assets and liabilities at the date of
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
34
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
Revenue Recognition - Revenue is recognized over the contract period as internet
related services are performed, provided collection of the resulting receivable
is probable. With respect to the Company's barter operations, revenue is
recognized at the time a trade or exchange occurs between a buying and a selling
customer of the trade exchange. If any material contingencies are present,
revenue recognition is delayed until all material contingencies are eliminated.
Further, no revenue is recognized unless collection of the applicable
consideration is probable.
Web Site Research and Development - Costs incurred in the development,
classification, organization of web site listings, and banner enhancements are
charged to expense as incurred.
Capitalized Software Costs - Software development costs are required to be
capitalized when a product's technological feasibility has been established by
completion of a working model of the product and ending when a product is
available for general release to customers. To date, completion of a working
model of its products and general release have substantially coincided. As a
result, the Company has not capitalized any software development costs since
such costs have not been significant.
Income Taxes - Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of deferred taxes related
primarily to differences between the bases of certain assets and liabilities for
financial and tax reporting. The deferred taxes represent the future tax return
consequences of those differences, which will either be taxable or deductible
when the assets and liabilities are recovered or settled.
Advertising Costs - Advertising costs are expensed as incurred. The Company does
not incur any direct-response advertising costs. Advertising expense totaled
$500 and $1,328 for the year ended December 31, 1998 and the three months ended
March 31, 1999, respectively.
Comprehensive Income (Loss) - As of January 1, 1998, the Company adopted
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income", which establishes standards for the
reporting and display of comprehensive income and its components in the
financial statements. There were no items of comprehensive income (loss)
applicable to the Company during the period covered in the financial statements.
35
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
NOTE B - INSTALLMENT NOTE PAYABLE
During the year ended December 31, 1998, the Company borrowed $50,000 from a
bank and incurred interest charges on this installment obligation in the amount
of $1,074. The loan was repaid in full during 1998 with the proceeds from the
maturity of a certificate of deposit with the bank. This line of credit carried
interest at 8.5% and was collateralized by the aforementioned fixed term
certificate of deposit in the amount of $50,000.
NOTE C - SHAREHOLDER LOANS PAYABLE
In March of 1998, the Company borrowed $75,000 in working capital debt financing
from one of the acquired Company's shareholders. The entire balance is payable
on December 31, 1999 with a balloon payment of principal and interest accrued at
12% per annum. Included in interest expense in the accompanying Consolidated
Statements of Operations and Retained Deficit is $6,517 and $2,005 in unpaid
interest accrued on these shareholder loans during the year ended December 31,
1998 and the three months ended March 31, 1999, respectively.
NOTE D - SUBCONTRACTORS' LOANS PAYABLE
During the year ended December 31, 1998, the Company incurred services from
various individuals pertaining to the construction of banner advertisements and
related web trafficking on the Company's web sites. The Company signed several
promissory notes with each of these parties totaling approximately $19,000,
including interest thereon, of which approximately $3,000 was payable to a party
related to one of the Company's shareholder. The promissory notes were repaid in
full during 1998 with interest thereon of 12% per annum.
NOTE E - RELATED PARTY TRANSACTIONS
The Company leases its corporate office facilities in South Florida under
cancelable month to month operating leases. The lease for its corporate
executive office in North Lauderdale, Florida is from its majority stockholder
and officer. The lease for its Deerfield Beach, Florida marketing and
development office is from one of the Company's shareholders. The lease for its
barter facility in St. Louis Missouri is from an entity owned by one of the
shareholders of the Company. The latter lease contains a one year renewal option
through January 31, 2000. All of the operating leases have remaining lease terms
of twelve months or less from the date of the latest balance sheet presented.
Rental payments and related expense for the year ending December 31, 1998 and
the three months ended March 31, 1999 were $5,460 and $20,401, respectively.
36
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
NOTE E - RELATED PARTY TRANSACTIONS (CONT.)
During the year ended December 31, 1998, the Company temporarily loaned $3,000
to a former officer. The loan was fully repaid during 1998 and was interest
free.
The Company received consulting services from a corporation related to the
Company's majority stockholder. During the year ended December 31, 1998 and the
three months ended March 31, 1999, the Company paid this corporation $25,468 and
$9,965, respectively.
NOTE F - RECENT ACCOUNTING PRONOUNCEMENTS
In June of 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities, which the Company has not been required to adopt. The
Statement, which is effective for fiscal years beginning after June 15, 1999,
establishes standards for accounting and reporting for derivative instruments
and hedging activities. The Company does not expect that the adoption of
Statement of Financial Accounting Standards No.133 will have a material impact
on its consolidated financial statements because the Company does not currently
hold any derivative instruments.
In March, 1998, the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position (SOP) No. 98-1 "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use", which establishes
guidelines for the accounting for the costs of all computer software developed
or obtained for internal use. The Company adopted this SOP effective for the
year ended December 31, 1998. The adoption of the SOP does not make a material
impact on the Company's consolidated financial statements.
In April, 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities". The SOP is effective for fiscal years beginning after December 15,
1998. The SOP requires costs of start-up activities and organization costs to be
expensed as incurred. The Company is required to adopt SOP 98-5 for the year
ended December 31, 1999, The adoption of SOP 98-5 is not expected to have a
material impact on the Company's consolidated financial statements.
37
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
NOTE G - EARNINGS PER SHARE (EPS)
The Company adopted Statement of Financial Accounting Standard (SFAS) No. 128
during the year. This statement requires dual presentation of basic and diluted
EPS with a reconciliation of the numerator and denominator of the EPS
computations. Basic earnings per share amounts are based on the weighted average
shares of common stock outstanding. If applicable, diluted earnings per share
would assume the conversion, exercise or issuance of all potential common stock
instruments such as options, warrants and convertible securities, unless the
effect is to reduce a loss or increase earnings per share. Accordingly, this
presentation has been adopted for all periods presented. There were no
adjustments required to net loss for all periods presented in the computation of
diluted earnings per share. The basic and diluted weighted average shares
outstanding for the year ended December 31, 1998 and the three months ended
March 31, 1999 are as follows:
1998 1999
---- ----
Weighted average outstanding common shares used
for basic and diluted EPS 2,594,453 6,036,658
========= =========
NOTE H - INCOME TAXES
Due to operating losses and the inability to recognize an income tax benefit
therefrom, there is no provision for current or deferred federal or state income
taxes for the year ended December 31, 1998 and the three months ended March 31,
1999.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amount used for federal and state income tax purposes.
The Company's deferred tax asset at December 31, 1998 and at March 31, 1999
consists of net operating loss carryforwards calculated using federal and state
effective tax rates which equated to approximately $70,000 and $190,000 less
valuation allowances in the amounts of approximately $70,000 and $190,000,
respectively. Because of the Company's lack of earnings history, the deferred
tax asset has been fully offset by a valuation allowance. The valuation
allowance increased by approximately $70,000 and $120,000 for the year ended
December 31, 1998 and the three months ended March 31, 1999, respectively.
38
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
NOTE H - INCOME TAXES (CONT.)
As of March 31, 1999, the Company had federal and state net operating loss
carryforwards of approximately $163,000 and $474,000, respectively.
Substantially all of the federal and state net operating loss carryforwards will
expire in 2014.
Utilization of the net operating losses may be subject to certain annual
limitations under Code Section 382 of the Internal Revenue Code of 1986, as
amended. The annual limitation may result in the expiration of net operating
losses before full utilization.
NOTE I - SEGMENT INFORMATION
The Company operates its comprehensive Internet advertising and marketing
services, including the creation of web sites and advertising banners for use at
those sites across the world from its offices located in Southern Florida.
Revenues are generated currently from within the United States.
The Company also operates a barter exchange business in the St. Louis, Missouri
area. The Company's management has determined the operating segments based on
how the business is managed and operated. The barter exchange company in St.
Louis, Missouri operates as an independent subsidiary with its own sales force
and operations departments.
Information for the barter exchange segment in the St. Louis, Missouri area as
of and for the period from March 12, 1999, date of acquisition, through March
31, 1999 is as follows:
Revenues from external customers $ 14,884
Segment operating loss $ (2,697)
Total assets $ 123,724
39
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
NOTE J - ACQUISITIONS
Electronic Business Network, Inc.: On December 2, 1998, the Company acquired
100% of the outstanding common stock of Electronic Business Network, Inc.
through the issuance of three million shares of its common stock with no readily
available market price at the time. The acquisition resulted in a tax-free
exchange for federal and state income tax purposes. The transaction was
accounted for as a reverse merger in accordance with Accounting Principles Board
Opinion No.16 wherein the shareholders of Electronic Business Network, Inc.
retained the majority of the outstanding stock of the Company after the merger.
Pro forma information, pertaining to the public shell, giving effect to the
aforementioned acquisition as if the acquisition took place January 1, 1998 and
through the date of acquisition, is as follows:
Public shell revenues $ --
Public shell expenses $29,950
The Purchase Shell intangible asset in the accompanying Consolidated Balance
Sheets is being amortized over fifteen years. Amortization of the purchased
shell for the year ended December 31, 1998 and the three months ended March 31,
1999 was $ - and $3,333, respectively. Amortization of the purchased goodwill
for the year ended December 31, 1998 and the three months ended March 31, 1999
was $ - and $1,667, respectively.
JBX Designs: During the three months ended March 31, 1999, the Company acquired
the assets and business of JBX Designs, Inc. and d.b.a. JBX Online of Deerfield
Beach, Florida, including its customer base. The purchase price paid was 115,000
shares of the Company's common stock. As of January 14, 1999, the fair market
value of the 115,000 shares of common stock approximated $1,150,000 and,
accordingly, the Company has used the fair market value of its shares to value
the transaction. The acquisition has been accounted for by the purchase method
of accounting. The purchase price was allocated to the following:
Goodwill $1,000,000
Customer Lists $ 150,000
The accompanying consolidated financial statements include the operations of JBX
Designs from January 14, 1999, the date of acquisition.
40
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
NOTE J - ACQUISITIONS (CONT.)
Goodwill represents the excess of the aggregate purchase price over the fair
value of the tangible and intangible assets acquired. Goodwill pertaining to the
technology purchased and customer lists resulting from the acquisition are being
amortized over three years and five years, respectively, on a straight-line
basis. Amortization expense for the goodwill and the customer lists for the
three months ended March 31, 1999 was $69,444 and $6,250, respectively.
International Trade Exchange Ltd.: During the three months ended March 31, 1999,
the Company acquired the assets and business of International Trade Exchange
Ltd., d.b.a. International Credit Reserve Exchange, Ltd., a.k.a. ICRE Ltd.,
including its entire customer base. The purchase price paid was 75,000 shares of
the Company's common stock. As of March 12, 1999, the fair market value of the
75,000 shares of common stock approximated $375,000 and, accordingly, the
Company has used the fair market value of its shares to value the transaction.
The acquisition was accounted for by the purchase method of accounting. The
purchase price was allocated to the following:
Accounts Receivable $100,000
Goodwill $225,000
Customer Lists $ 50,000
Fixed assets acquired were de minimums.
The accompanying consolidated financial statements include the operations of
ICRE from March 12, 1999, the date of acquisition.
Goodwill represents the excess of the aggregate purchase price over the fair
value of the tangible and intangible assets acquired. Goodwill and customer
lists resulting from this particular acquisition are being amortized over
fifteen years and five years, respectively, on a straight-line basis.
Amortization expense for the goodwill and the customer lists for the three
months ended March 31, 1999 was $625 and $416, respectively.
41
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
NOTE K - COMMITMENTS AND CONTINGENCIES
During the three months ended March 31, 1999 the Company entered into 2 separate
one-year employment agreements with individuals in various positions within the
Company. The agreements provide for compensation to these individuals, at the
annual rate of $104,000, collectively, plus fringe benefits including two weeks
paid vacation, Company provided health insurance, industry related dues and
subscriptions, a $500 monthly automobile allowance and a $100 monthly cellular
telephone allowance.
One of the two aforementioned contracts also provided, pursuant to a future
stock option program, the employee with an option to purchase 10,000 shares of
the Company's common stock at $1 per share.
As a further inducement in the other employment agreement, the Company committed
to pay the employee an additional $100,000 as follows: Four installments of
$5,000 on the 15th day of the month beginning in February, 1999, and $80,000 in
common stock, future warrants or future options at the Company's discretion, due
on or before January 1, 2000.
NOTE L - YEAR 2000 ISSUE
Due to the nature of the Company's computerized Internet operations, the Company
is substantially reliant on computers for the processing of critical data
leading into banner advertisements. The disruption of the processing of that
data could have a material adverse impact on the Company. It is management's
opinion that the estimated cost of remediation is immaterial to the financial
statements taken as a whole.
NOTE M - STOCK WARRANTS
The Company issued 965,000 non-qualified common stock purchase warrants during
the year ended December 31, 1998. Each warrant is convertible into one share of
the Company's common stock when exercised at a strike price of $1. The warrants
expire on July 7, 2001. During the three months ended March 31, 1999, the
Company received proceeds totaling $210,100 from the exercise of these warrants
to purchase 210,100 shares of common stock.
42
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
www.eBIZnet.com Inc.
For the Year Ended December 31, 1998 and the Three Months Ended March 31, 1999
NOTE N - CAPITAL STOCK
During the three months ended March 31, 1999, the Company physically issued
common stock to non-employees in exchange for subcontract labor and stock
promotional services valued at approximately $37,500 which was earned in
December of 1998. The non-cash expense was recorded at the fair market value at
the date of grant and is recorded and is included in the accompanying
Consolidated Statements of Operations and Consolidated Balance Sheets as of (at)
December 31, 1998
NOTE O - SUBSEQUENT EVENTS
Subsequent to March 31, 1999, the Company was in the process of executing a
contract for the sale of 650,000 shares of its common stock to an unrelated
investment group for approximately $450,000. The proceeds would make positive
the Company's current net working capital deficiency herein.
On May 10, 1999, the Company, though its barter exchange segment subsidiary,
acquired the rights and title to the trade name Barter Accounting Software
including developed software code, database routines, screen and report
formatting, user interfaces and installation procedures from an unrelated
individual in the state of Missouri. The purchase price paid was 200,000 shares
of the Company's common stock. As of May 10, 1999, the fair market value of the
200,000 shares of common stock approximated $350,000 and, accordingly, the
Company has used the fair market value of its shares to value the transaction.
The acquisition has been accounted for by the purchase method of accounting. The
purchase price was allocated to the costs of externally purchased software. The
capitalized software resulting from the acquisition is being amortized over
three years on a straight-line basis.
Under the terms of the agreement, if the 200,000 common shares reach a value on
liquidation of more than $5 subsequent to May 9, 2000, then one-half of the
amount over $5 per share is to be returned to the Company.
On April 30, 1999, the Company entered into a consulting services agreement with
an individual. The consultant shall provide internet website creation and
development services, audio and video production of commercials and
infomercials, and electronic animation for use in websites and in video
presentations. In exchange for these services, the Company is committed to pay
this individual $60,000 per annum at the rate of $5,000 per month.
Subsequent to year end, the Company received proceeds totaling $317,600 from the
exercise of 317,600 additional non-qualified common stock purchase warrants.
Each warrant was converted into one share of the Company's common stock at an
exercise price of $1.
43
<PAGE>
-1-
BALANCE SHEETS
ELECTRONIC BUSINESS NETWORK INC.
December 31, 1997 and 1996
<TABLE>
<CAPTION>
ASSETS 1997 1996
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash $ 23,410 $ 57
-------- --------
TOTAL CURRENT ASSETS 23,410 57
PROPERTY AND EQUIPMENT
Computer Equipment 10,000 10,000
Furniture & Fixtures 1,835 1,835
Less: Accumulated Depreciation (5,912) (2,262)
-------- --------
TOTAL PROPERTY AND EQUIPMENT 5,923 9,573
-------- --------
TOTAL ASSETS $ 29,333 $ 9,630
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable $ 15,497 $ -0-
-------- --------
TOTAL CURRENT LIABILITIES 15,497 -0-
LONG-TERM DEBT
STOCKHOLDER'S EQUITY
Common Stock 1 1
Additional Paid in Capital 999 999
Retained Earnings 12,836 8,630
-------- --------
TOTAL STOCKHOLDER'S EQUITY 13,836 9,630
-------- --------
$ 29,333 $ 9,630
======== ========
</TABLE>
See notes to financial statements
<PAGE>
-2-
STATEMENTS OF INCOME AND RETAINED EARNINGS
ELECTRONIC BUSINESS NETWORK INC.
For Years Ended December 31, 1997 and 1996
1997 1996
---- ----
REVENUE
Net Sales $ 139,603 $ 52,790
Commissions on Sales (20,604) (963)
--------- ---------
GROSS PROFIT 118,999 51,827
OPERATING EXPENSES
Advertising $ 4,948 $ 690
Automobile 0 3,786
Consulting Fees 58,794 19,062
Depreciation 3,650 2,262
Dues 580 86
Insurance 50 680
Taxes & Licenses 116 559
Office Supplies 3,305 2,046
Rent 2,168 1,900
Telephone 5,388 3,141
Training 1,485 -0-
Travel 134 800
--------- ---------
TOTAL EXPENSES 80,618 35,012
--------- ---------
NET INCOME $ 38,381 $ 16,815
Stockholder Distributions (34,175) (8,185)
Retained Earnings, Beginning of Year 8,630 -0-
--------- ---------
Retained Earnings, End of Year $ 12,836 $ 8,630
========= =========
See notes to financial statements
<PAGE>
-3-
STATEMENTS OF CASH FLOWS
ELECTRONIC BUSINESS NETWORK, INC.
For the Years Ended December 31, 1997 and 1996
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 38,381 $ 16,815
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation expense 3,650 2,262
Increase in operating liabilities:
Accounts payable 15,497 -0-
-------- --------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 57,528 19,077
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment -0- (11,835)
-------- --------
NET CASH USED IN
INVESTING ACTIVITIES -0- (11,835)
CASH FLOWS FROM FINANCING ACTIVITIES:
Stockholder distributions (34,175) (8,185)
Proceeds from issuance of common stock -0- 1,000
-------- --------
NET CASH USED IN
FINANCING ACTIVITIES (34,175) (7,185)
-------- --------
NET INCREASE IN
CASH AND CASH EQUIVALENTS $ 23,353 $ 57
Cash and cash equivalents, beginning of year $ 57 $ -0-
-------- --------
CASH AND CASH EQUIVALENTS
END OF YEAR $ 23,410 $ 57
======== ========
See notes to financial statements
<PAGE>
-4-
NOTES TO FINANCIAL STATEMENTS
ELECTRONIC BUSINESS NETWORK, INC.
For the Years Ended December 31, 1997 and 1996
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity - Electronic Business Network, Inc. was incorporated on
February 6, 1995 in the state of Florida. The Company provides Internet
advertising and marketing services, including the creation of web sites and
advertising banners for use at those sites across the world.
Accounts Receivable - Accounts receivable are charged to bad debt expense as
they are deemed uncollectible based upon a periodic review of the accounts. No
bad debt expense for the years ended December 31, 1997 and 1996 was recorded. At
December 31, 1997 and 1996, no allowance for doubtful accounts was deemed
necessary.
Property and Equipment - Property and equipment are recorded at cost and include
expenditures, which substantially increase the productive lives of the existing
assets. Maintenance and repair costs are expensed as incurred. Depreciation is
provided using the straight-line method and other methods, which approximate the
straight-line method. It is calculated over the prescribed Internal Revenue
Service recovery periods, which range from 5 to 39 years.
When a fixed asset is disposed of, its cost and related accumulated depreciation
are removed from the accounts. The difference between undepreciated cost and
proceeds from disposition is recorded as gain or loss.
Cash and Cash Equivalents - For purposes of the Statements of Cash Rows, the
Company considers liquid investments with an original maturity of three months
or less to be cash equivalents.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that effect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Revenue Recognition - Revenue is recognized over the contract period as services
are performed.
Web site development - Costs incurred in the development, classification, and
organization of web site listings, and banner enhancements are charged to
expense as incurred.
<PAGE>
-5-
NOTES TO FINANCIAL STATEMENTS
ELECTRONIC BUSINESS NETWORK, INC.
For the Years Ended December 31, 1997 and 1996
Income Taxes - The Company, with the consent of its sole stockholder, initially
elected to be taxed under the provisions of Subchapter S of the Internal Revenue
Code. Subchapter S provides that in lieu of corporate income taxes, the
stockholder separately accounts for his pro rata share of the Company's items of
income, deductions, losses and credits. Therefore, these financial statements do
not include any provision for corporate federal or state income taxes.
In May of 1998, the Company's then sole stockholder, individually sold 25% of
his common stock to an unrelated corporation. Accordingly, the Company's S
status was terminated and federal and state income tax liabilities could become
due in the future as of the date in which the disqualifying event occurred.
Advertising Costs - Advertising costs are expensed as incurred. The Company does
not incur any direct-response advertising costs. Advertising expense totaled
$4,948 and $690 for 1997 and 1996, respectively.
NOTE B - SUBSEQUENT EVENTS
At December 31, 1997 and 1996, there were 100 shares of common stock (par value
of $.01) authorized, issued and outstanding with the Company's sole stockholder.
On September 30, 1998, the Company amended its Articles of Incorporation to
effect an increase in the authorized number of shares of capital stock to
10,000,000 shares comprised of 9,000,000 shares of common stock having a par
value of $.01 and 1,000,000 shares, without a par value.
On September 17, 1998, the Company entered into a consulting contract with a
financial services firm whereby the firm provided the preparation of an offering
memorandum document for the Company in exchange for certain consideration by the
Company. As of the date of this report, the Company is currently committed to
paying 10,000 shares of its common stock to this firm.
In March of 1998, the Company borrowed $75,000 in working capital debt financing
from the Company's sole shareholder. The entire balance is payable on December
31, 1998 with a balloon payment of principal and interest accrued at 12% per
annum.
Subsequent to year-end, the Company borrowed $50,000 from a bank and
subsequently repaid the loan in full. This line of credit earned interest at
8.5% and was collateralized by a fixed term certificate of deposit.
<PAGE>
-6-
NOTES TO FINANCIAL STATEMENTS
ELECTRONIC BUSINESS NETWORK, INC.
For the Years Ended December 31, 1997 and 1996
NOTE B - SUBSEQUENT EVENTS (CONT.)
Subsequent to year-end, the Company incurred services from various individuals
and a company pertaining to the selling of banner advertisements on the
Company's web sites. As of the date of this report, the Company currently has
several signed promissory notes with each of these parties totaling $26,125 of
which $2,750 is payable to a party related to the Company's shareholder. The
promissory notes will be repaid within the upcoming twelve-month operating cycle
with interest at 12% per annum.
On December 2, 1998, the Company entered into a stock repurchase and retirement
agreement with a publicly traded shell company (purchaser), whereby the
purchaser acquired 100% of the issued and outstanding shares of capital stock of
the Company.
NOTE C - RELATED PARTY TRANSACTIONS
The Company leases its office facilities in North Lauderdale, Florida under a
cancelable month to month operating lease from its sole stockholder. Rental
payments and related expense for the years ending December 31, 1997 and 1996 was
$2,168 and $1,900, respectively.
NOTE D - YEAR 2000 ISSUE
Due to the nature of the Company's computerized Internet operations, the Company
is substantially reliant on computers for the processing of critical data
leading into banner advertisements. The disruption of the processing of that
data could have a material adverse impact on the Company. It is management's
opinion that the estimated cost of remediation is immaterial to the financial
statements taken as a whole.
NOTE E - FUTURE REPORTING REQUIREMENTS
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income, which the Company
has not been required to adopt. The Statement, which is effective for fiscal
years beginning after December 15, 1997, establishes standards for reporting and
display of comprehensive income and its components (revenues, expenses, gains
and losses) in a full set of general-purpose financial statements. This
statement requires that all items that are recognized under accounting standards
as components of comprehensive income be reported in a financial statement that
is displayed with the same prominence as other financial statements.
<PAGE>
Part III
Item 1. Index to Exhibits
Exhibit Number Description Page
- - - - -------------- ----------- ----
(3)
(i) Articles of Incorporation, As Amended
(ii) By-laws
(10) Material Contracts
(i) Acquisition Agreement between Florida Diet
Services, Inc., Electronic Business Network,
Inc. and Garland E. Harris dated December 3,
1998.
(ii) Asset Purchase Agreement between JBX Online,
Inc. and JBX Design, Inc. and DBA JBX Online
dated January 14,1999.
(iii) Asset Exchange Agreement between Global Online
Exchange.One, Inc. and International Trade
Exchange, Ltd dated March 12, 1999.
(iv) Asset Exchange Agreement between Global Online
Exchange, Inc. and Harold A. Rice dated May
10, 1999.
(v) Web Advertising Sales Agreement between
Electronic Business Network, Inc. and Flycast
Communications Corporation dated June 13,1999.
(vi) Network Affiliation Agreement between
Electronic Business Network, Inc. and 24/7
Media, Inc. dated July 27, 1999.
(vii) Employment Agreement between Global Online,
Inc. and W. Allen Cochran dated February 19,
1999.
44
<PAGE>
(viii) Employment Agreement between JBX Online, Inc.
and John Boudreaux dated January 15, 1999.
(21) Subsidiaries
(27) Financial Data Schedule
Item 2. Description of Exhibits
45
<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.
WWW.EBIZNET.COM, INC.
Date August 26, 1999 By: /S/ Garland E. Harris
-------------------------------------
Garland E. Harris, President
By: /S/ Harold Rice
-------------------------------------
Harold Rice, Chief Financial Officer
46
(3)(i)
ARTICLES OF INCORPORATION
OF
Florida InterNet Stock Exchange, Inc.
Article 1. The name of this Corporation is: Florida InterNet Stock Exchange Inc.
Article 2. This Corporation shall have perpetual existence commencing upon the
filing of these Articles of Incorporation by the Florida Secretary of State.
Article 3. This Corporation may engage in any lawful business activity permitted
under the General Corporation Act of the State of Florida.
Article 4. This Corporation is authorized to issue FIFTY-FIVE MILLION
(55,000,000) shares of Capital Stock as follows:
4.1 Preferred Stock. Five Million (5,000,000) shares of no par value
Preferred Stock, upon such terms and conditions as the Board of Directors may
determine at the time of issuance, without further action of stockholders being
required. Such preferred shares may or may not be issued in series, convertible
into shares of Common Stock, redeemable by the Company and entitled to
cumulative dividends. Other terms and conditions may be imposed at the time of
issuance.
4.2 Class "A" Common Stock. Twenty-Five Million (25,000,000) shares of
Class "A" Common Stock par value of $0.001 per share. The holders of Class "A"
Common Stock are entitled to one vote for each share held on all matters
submitted to a vote of shareholders. Holders of Class "A" Common Stock are
entitled to receive ratably such dividends, if any, as may be declared by the
Board of Directors out of funds legally available therefor, subject to any
preferential dividend rights of outstanding Preferred Stock. The holders of
Class "A" Common Stock have no preemptive, subscription, redemption or
conversion rights.
4.3 Class "B" Common Stock. Twenty-Five Million (25,000,000) shares of
Class "B" Common Stock par value of $0.001 per share. The holders of Class "B"
Common Stock are entitled to One Hundred votes for each share held on all
matters submitted to a vote of shareholders. Holders of Class "B" Common Stock
are entitled to receive ratably such dividends, if any, as may be declared by
the Board of Directors out of funds legally available therefor, subject to any
preferential dividend rights of outstanding Preferred Stock.
47
<PAGE>
The shares of the Class "B" Common Stock shall only be sold, transferred and
issued to securities broker-dealers who are registered with the Securities and
Exchange Commission and or the National Association of Securities Dealers Inc.,
in conjunction with membership in the Company's securities exchange.
4.4 Rights of Holders of Common Stock. Upon a liquidation, dissolution or
winding up of the Company, the holders of Class "A" and Class "B" Common Stock
are entitled to receive ratably the net assets of the Company available after
the payment of all debts and other liabilities, and subject further only to the
preferred rights of any outstanding Preferred Stock. The holders of Class "A"
and Class "B" Common stock have no preemptive, subscription, redemption or
conversion rights.
Article 5. The name and address of the initial Registered Agent is: Paul M.
Galant, 21218 St. Andrews Boulevard, Suite 226, Boca Raton, FL 33486
Article 6. The address of the Corporation is: 21218 St. Andrews Boulevard, Suite
226, Boca Raton, FL 33486.
Article 7. This Corporation shall initially have at least One Director and no
more than Nine Directors. The number of Directors may be increased or
diminished, from time to time, by the action of the board of directors or by the
majority vote of the stockholders.
Article 8. The By-Laws of this Corporation may be adopted, altered, amended or
repealed by the affirmative vote of a majority of the board of directors or the
Stockholders.
Article 9. This Corporation may indemnify any Office or Director, or any former
Officer or Director, to the full extent permitted by the General Corporation Act
of the State of Florida.
Article 10. The name and address of the person signing these Articles as
Incorporator is: Paul M. Galant, 21218 St. Andrews Boulevard, Suite 226, Boca
Raton, FL 33486
Article 11. This Corporation reserves the right to amend or repeal any
provisions contained in these Articles of Incorporation, in full accord with the
provisions of the General Corporation Act of the State of Florida.
48
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed these Articles of Incorporation
this 28th day of January, 1997.
/s/ Paul M. Galant
-----------------------------------
Paul M. Galant Incorporator
ACCEPTANCE BY REGISTERED AGENT
Having been named to accept service of process for the above stated Corporation,
at the place designated in Article V, of these Articles of Incorporation, the
Undersigned hereby agrees to act in this capacity, and further agrees to comply
with the provisions of all statutes relative to the proper and complete
discharge of his duties.
Dated the 28th day of January, 1997.
/s/ Paul M. Galant
-----------------------------------
Paul M. Galant Registered Agent
State of Florida, County of Palm Beach ) ss: Boca Raton
Before me, a Notary Public authorized in the State and County set forth above,
personally appeared Paul Galant, known to me and to me known to be the person
who, as Incorporator, executed the foregoing Articles of Incorporation of
Florida InterNet Stock Exchange Inc.; and he acknowledged before me that he duly
executed those Articles of Incorporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, in
the State of Florida, County of Palm Beach, this 28th day of January, 1997.
/s/ Arlene M. Flores
-----------------------------------
Notary Public, State of Florida
My Comm. Exp. 2/16/97
Bonded By Service Ins.
No. 00260019
FL D.L. #6453693411440
49
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
FLORIDA INTERNET STOCK EXCHANGE INC.
Article I. The name under which this Corporation was formed is:
FLORIDA INTERNET STOCK EXCHANGE INC.
Article II. The Articles of Incorporation of the Corporation were filed on the
29th day of January, 1997, by the Secretary of State of the State of Florida.
(Document #P97000010257)
Article III. Articles 1 and 4 of the Articles of Incorporation are hereby
deleted in their entirety, and respectively replaced by the following:
Article 1. The name of this Corporation is:
Florida Diet Services Inc.
Article 4. This Corporation is authorized to issue Thirty Million
(30,000,000) shares of Capital Stock as follows:
4.1 Preferred Stock. Five Million (5,000,000) shares of no par value
Preferred Stock, upon such terms and conditions as the Board of Directors may
determine at the time of issuance, without further action of the stockholders
being required. Such preferred shares may or may not be: issued in series,
convertible into shares of Common Stock, redeemable by the Company and entitled
to cumulative dividends. Other terms and conditions may be imposed at the time
of issuance.
4.2 Common Stock. Twenty-Five Million (25,000,000) shares of Common Stock,
having the par value of $0.001 per share. The holders of Common Stock are
entitled to one vote for each share held on all matters submitted to a vote of
shareholders. Holders of Common Stock are entitled to receive ratably such
dividends, if any, as may be declared by the Board of Directors out of funds
legally available therefor, subject to any preferential dividend rights of
outstanding Preferred Stock. The holders of Common Stock have no preemptive,
subscriptive, redemption or conversion rights.
Article V. The first Amendment to the Articles of Incorporation shall take
effect immediately upon its adoption by the undersigned, being the sole
stockholder and director of the corporation.
IN WITNESS WHEREOF, the undersigned under the penalty of perjury has executed
this Amendment to the Articles of Incorporation this 10th day of October, 1997.
/s/ Paul M. Gallant
---------------------------------------------
Paul M. Galant, Sole Stockholder and Director
President
50
<PAGE>
Articles Of Amendment
To The
Articles Of Incorporation
Of
Florida Diet Services Inc.
First. The Articles of Incorporation of the Corporation were filed on the 29th
day of January, 1997 by the Secretary of State of the State of Florida with the
official document number P97000010257.
Second. Article I of the Articles of Incorporation is hereby amended in its
entirety by the following:
Article I. The name of the Corporation is:
www.eBIZnet.com Inc.
Third. This Second Amendment to the Articles of Incorporation has been duly
adopted on November 25, 1998 pursuant to Florida Statutes 607.0704, by the
written consent of the holders of more than 92% of the issued and outstanding
shares of the corporation; and shall take effect upon the filing hereof by the
Secretary of the State of Florida. The number of votes cast by the shareholders
was sufficient for approval.
IN WITNESS WHEREOF, the undersigned under the penalty of perjury has executed
this Second Amendment to the Articles of Incorporation this 25th day of
November, 1998.
/s/ Sharleen B. Glass
------------------------------
Sharleen B. Glass
President/Director
51
(3)(ii)
CORPORATE BY-LAWS
OF
Florida Diet Services Inc.
ARTICLE ONE - OFFICES
The initial principal office of the corporation shall be established and
maintained in Boca Raton, Palm Beach County, State of Florida; or such other
place within or without the State of Florida, as the Board by resolution may,
from time to time, establish.
ARTICLE TWO - STOCKHOLDERS
2.1 PLACE OF MEETINGS. Stockholder's meetings shall be held at the principal
office of the corporation, or at such other place, within or without the State
of Florida, as the Board shall authorize.
2.2 ANNUAL MEETINGS. Effective calendar year 1998, the annual meeting of
Stockholders shall be held on the 15th day of June at 2:00 P.M. in each year;
however, if such date falls on a Sunday or a legal holiday, then such meeting
shall be held on the next business day following, at the same time, whereby the
stockholders shall transact any and all business properly brought before said
meeting.
2.3 SPECIAL MEETINGS. Special meetings of the Stockholders may be called by the
Board or by the president, or at the written request of the stockholders owning
a majority of the stock entitled to vote at such meeting. A meeting requested by
the Stockholders shall be called for a date not less than ten or more than sixty
days after such request is made. The secretary shall issue the call for the
meeting unless the president, the Board or the Stockholders shall designate
another to make said call.
2.4 NOTICE OF MEETINGS. All Notices for Stockholder meetings and any adjournment
therefor, shall be in writing and state the purposes, time and place for the
meeting. Notice shall be mailed to each Stockholder having the right and being
entitled to vote at such meetings, at the last address appearing for said
Stockholder upon the records of the corporation, not less than ten nor more than
sixty days prior to the date set for such meeting. In the case of stock
transfers occurring after such notice, no notice to the transferees will be
required. A Waiver of Notice may be made by any Stockholder, in writing, either
before, during or after the meeting.
2.5 RECORD DATE. The Board may fix a record date not more than forty days prior
to the date set for a meeting of Stockholders as the date as of which the
Stockholders of record who have the right to and are entitled to notice of and
to vote at such meeting and any adjournment thereof shall be determined. Notice
that such date has been fixed may be published in the city, town or county where
the principal office of the corporation is located and in each city or town
where a transfer agent of the stock of the corporation is located.
2.6 VOTING. Every Stockholder shall be entitled at each meeting, and upon each
proposal presented thereat, to one vote for each share of voting stock recorded
in said Stockholder's name on the books of the corporation on the record date as
fixed by the Board. If no record date was fixed, on the date of the meeting the
Stockholder Record books shall be produced at the meeting upon the request of
any Stockholder. Upon demand of any Stockholder, the vote for Directors and the
vote upon any question before the meeting, shall be written by ballot. All
elections for Directors shall be decided by plurality vote of the holders of the
Common
52
<PAGE>
Stock; all other questions shall be decided by majority vote. Unless otherwise
designated by the Board of Directors on their issuance, Preferred Stockholders
shall not have voting rights.
2.7 QUORUM. The presence, in person or by proxy, of Stockholders holding a
majority of the stock of the corporation entitled to vote shall constitute a
quorum at all meetings of the Stockholders. In case a quorum shall not be
present at any meeting, a majority in interest of the Stockholders entitled to
vote thereat present in person or by proxy, shall have power to adjourn the
meeting from time to time, without notice other than by announcement at the
meeting, until the requisite number of shares entitled to vote shall be
represented in person or by proxy. At any such adjourned meeting at which the
requisite number of shares entitled to vote is represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed; but only those Stockholders entitled to vote at the meeting as
originally noticed shall be entitled to vote at any adjournment or adjournments
thereof.
2.8. PROXIES. At any Stockholders' meeting or any adjournment thereof, any
Stockholder of record having the right to and entitled to vote thereat may be
represented and vote by proxy appointed in a written instrument. No such proxy
shall be voted after three years from the date of the instrument unless the
instrument provides for a longer period. In the event that any such instrument
provides for two or more persons to act as proxies, a majority of such persons
present at the meeting, or if only one be present, that one shall have all the
powers conferred by the proxy instrument upon all persons so designated unless
the instrument shall provide otherwise.
2.9 STOCKHOLDER LIST. After fixing a record date for a meeting, the corporation
shall prepare an alphabetical list of the names of all of its Stockholders who
are entitled to notice of a Stockholders meeting. Such list shall be arranged by
voting group with the names and addresses, number and class, and series if any,
of shares held by each. This list shall be available for inspection by any
Stockholder for a period of ten days prior to the meeting.
ARTICLE THREE - DIRECTORS
3.1 BOARD OF DIRECTORS. The business of the corporation shall be managed and its
corporate powers exercised by a Board of at least One and no more than Nine
directors, each of whom shall be of full age. It shall not be necessary for
Directors to be Stockholders.
3.1 ELECTION AND TERM OF DIRECTORS. Directors shall be elected at the annual
meeting of Stockholders and each Director shall hold office until his successor
has been elected and qualified or until the Director's prior resignation or
removal.
3.3 VACANCIES. If the office of any Director, member of a committee or other
office becomes vacant the remaining Directors may, by a majority vote, appoint
any qualified person to fill such vacancy for the unexpired term and until a
successor shall be duly chosen or elected and qualified.
3.4 REMOVAL OF DIRECTORS. Any and all of the Directors may be removed with or
without cause by vote of the holders of a majority of the stock entitled to vote
at a special meeting of Stockholders called for that purpose. Any Director may
be removed with or without cause by majority vote of the Board of Directors,
including the vote of the Director whose removal is being voted upon.
3.5 NEWLY CREATED DIRECTORSHIPS. The number of Directors may be increased from
time to time by amendment of these By-Laws adopted pursuant to Article Eight
hereof.
53
<PAGE>
3.6 RESIGNATION. A Director may resign at any time by giving written notice to
the Board, the president or the secretary of the corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt thereof
by the Board or such corporate officer, and the acceptance of the resignation
shall not be necessary to make it effective.
3.7 QUORUM. A majority of the Directors shall constitute a quorum for the
transaction of business. If at any meeting of the Board there shall be less than
a quorum present, a majority of those present may adjourn the meeting until a
quorum is obtained and no further notice thereof need be given other than by
announcement at the meeting which shall be so adjourned.
3.8 PLACE AND TIME OF BOARD MEETINGS. The Board may hold its meetings at the
office of the corporation or at such other places, within or without the State
of Florida, as it may from time to time determine.
3.9 REGULAR ANNUAL MEETING. The regular annual meeting of the Board shall be
held immediately following the annual meeting of the Stockholders at the place
of such annual Stockholders meeting.
3.10 NOTICE OF MEETINGS OF THE BOARD. Regular meetings of the Board may be held
without notice at such time and place as the Board shall from time to time
determine. Special meetings of the Board shall be held upon notice to the
Directors and may be called by the president upon three days notice delivered to
each Director either personally or by mail, telephone, or telegram. Upon the
written request of at least two directors, special meetings shall be called by
the president or by the secretary in like manner. Notice of a meeting need not
be given to any Director who submits a written Waiver of Notice, whether before,
during or after the meeting; nor to a Director who attends and participates in
the meeting without protesting the lack of notice prior to or upon the
commencement of such meeting.
3.11 EXECUTIVE AND OTHER COMMITTEES. The Board may, by appropriate resolution,
designate two or more of their number to one or more committees, which to the
extent provided in said resolution or these By-Laws, may exercise the powers of
the Board in the management of the business of the corporation.
3.12 COMPENSATION. The Board may provide for compensation to be paid to outside
(i.e., not otherwise employed by the Corporation) Directors for their services
as such. Alternatively the Board may provide each director with a fixed sum plus
reimbursement of necessary expenses actually incurred for their actual
attendance at the annual, regular and special meetings of the Board.
3.13 DUAL CAPACITY. Directors shall not be precluded from simultaneously serving
the corporation in any other capacity nor from receiving compensation from the
corporation for such services.
ARTICLE FOUR - OFFICERS
4.1 OFFICERS, ELECTION AND TERM.
A. The Board may elect or appoint a chairman, a president, one or more
vice presidents, a secretary, an assistant secretary, a treasurer and an
assistant treasurer and such other officers as it may determine who shall have
duties and powers as hereinafter provided.
B. All officers shall be elected or appointed to hold office until the
next Regular Annual Meeting of the Board and until their successors have been
elected or appointed and qualified.
54
<PAGE>
4.2 REMOVAL, RESIGNATION, COMPENSATION, ETC.
A. Any officer may be removed by the Board with or without cause.
B. In the event of the death, resignation or removal of an officer, the
Board may in its discretion, elect or appoint a successor to fill
the unexpired term.
C. Any two or more offices may be held by the same person.
D. The Board shall determine the compensation for all officers.
E. The Directors may require that any officer give security for the
faithful performance of the duties of such office.
4.3 CHAIRMAN. The Chairman of the Board, if one be elected, shall preside at all
meetings of the Board and shall have and perform such other duties from time to
time as may be assigned by the Board or the Executive Committee.
4.4 CHIEF EXECUTIVE OFFICER. From time to time the Board may elect either the
Chairman, the President or any other individual to serve the Corporation as the
Chief Executive Officer, with full responsibilities as the highest elected
officer for the conduct of the business operations of the Corporation. Such CEO
would allocate responsibilities to the President and other executive officers.
4.5 PRESIDENT. Unless otherwise determined by the Board, the president shall be
the chief executive officer of the corporation and shall have the general powers
and duties of supervision, management and control of the business of the
corporation as is usually vested in the office of the president of a
corporation, including presiding at all meetings of the Stockholders, and
presiding at board meetings in the absence of the Chairman. Unless the Board
provides otherwise, the president shall execute bonds, mortgages and other
contracts in behalf of the corporation, and shall cause the seal to be affixed
to any instrument when so required.
4.6 VICE-PRESIDENT. The vice-president shall perform such duties as from time to
time the Board shall prescribe or the president shall assign. During the absence
or disability of the president, the vice-president, or if there be more than
one, the senior executive vice-president, shall have all the powers and
functions of the president.
4.7 SECRETARY. The secretary shall: attend all Stockholder and Board meetings;
record all votes and minutes of all corporate proceedings; give or cause to be
given notice of all Stockholder and Directors meetings; maintain custody and
control of the corporate seal, affixing it upon instruments when required and
authorized to do so by the Board or the president; prepare or cause to be
prepared a certified list of Stockholders, in alphabetical order indicating the
number of shares of each respective class held by each such Stockholder; keep
all documents and corporate records as required by law and in a proper and safe
manner; and to perform such other duties as may be prescribed by the Board or
assigned by the president.
4.8 ASSISTANT SECRETARY. The assistant-secretary shall perform such duties and
functions as may be assigned by the secretary. During the absence or disability
of the secretary, the assistant-secretary, or if there are more than one, the
one so designated by the secretary or by the Board, shall have all of the powers
and functions of the secretary.
4.9 TREASURER. The treasurer shall: have the custody and control of the
corporate funds and securities; keep full and accurate books of account,
including the receipts and disbursements in the corporate accounts; record and
deposit all money and other valuables in the name and to the credit of the
corporation in such depositories as designated by the Board, preserving proper
vouchers therefor; render full statements of the
55
<PAGE>
books and records, including income, profit and loss, and the financial
condition of the corporation to the president and at the regular meetings of the
Board. The treasurer shall render a full and accurate financial report at the
annual meeting of the Stockholders. To ensure the accuracy of the reports which
the treasurer is responsible for preparing, all other officers of the
corporation shall provide the treasurer with such reports and statements as may
be requested from time to time. The treasurer shall perform such other duties as
may be required from time to time by the Board or as assigned by the president.
4.10 ASSISTANT-TREASURER. The assistant-treasurer shall perform such duties and
functions as may be assigned by the treasurer. During the absence or disability
of the treasurer, the assistant-treasurer, or if there are more than one, the
one so designated by the treasurer or by the Board, shall have all of the powers
and functions of the treasurer.
4.11 SURETIES AND BOND. The Board may require any officer or agent of the
corporation to provide the corporation with a surety bond in such sum and with
such surety as the Board may direct, to assure the faithful performance of
duties to the corporation, including responsibility for negligence and for the
accounting for all assets and property of the corporation for which such officer
or agent may be responsibility.
4.12 INDEMNIFICATION. The Company is authorized in its By-Laws to indemnify its
officers and directors to the fullest extent allowed under the provisions of the
State of Florida Corporation Laws for claims brought against such persons in
their capacity as officers and/or directors.
ARTICLE FIVE - CERTIFICATES FOR SHARES
5.1 CERTIFICATES. The shares of capital stock for which the corporation is
authorized to issue shall be represented by certificates, which shall be
numbered and recorded in the Stockholders Record and Transfer books upon their
issuance. Each certificate shall: exhibit the holder's name; the number of
shares owned; be duly signed by the president and secretary; and bear the seal
of the corporation. By resolution of the Board, facsimile signatures of such
officers may be used. In the event that the corporation appoints a transfer
agent and/or registrar, in order to be valid each certificate shall exhibit the
endorsed authorized signature of such agent.
5.2 LOST OR DESTROYED CERTIFICATES. The Board may direct that a new
certificate(s) be issued in place of previously issued by lost or destroyed
certificates upon the provision to the corporation of an affidavit by the
Stockholder(s) setting forth the facts surrounding the lost or destroyed
certificates. The Board may in its discretion and as a condition precedent to
the issuance of a replacement certificate, require that the Stockholder provide
a bond or other security, to indemnify the corporation in the event of a future
claim with respect to the certificate alleged to have been lost or destroyed.
5.3 TRANSFER OF SHARES. Upon surrender to the corporation (or its transfer
agent) 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(s) entitled
thereto, and the old certificate shall be canceled upon the Stock Transfer books
and records of the corporation, which shall be kept at its principal office.
Transfers made as collateral security, and not absolutely, shall be so indicated
upon the transfer ledger. No transfer shall be made during the ten days
immediately prior to the annual meeting of the Stockholders.
56
<PAGE>
5.4 APPOINTMENT OF TRANSFER AGENT. The Board shall have the power and authority
to appoint a duly licensed and SEC qualified stock transfer agency to provide
stock transfer, registrar and warrant agency services to the corporation.
5.5 CLOSING TRANSFER BOOKS. The Board shall have the power to close the share
transfer books of the corporation for a period of not more than ten days during
the thirty-day period immediately preceding: a) any Stockholders meeting; or b)
any date upon which Stockholders shall be called upon to or have a right to take
action without a meeting; or c) any date fixed for the payment of a dividend or
any other form of distribution.
Only those Stockholders of record at the time the transfer books are closed,
shall be recognized as such for the purposes of: receiving meeting notices,
voting at meetings, taking action without meeting , or receiving dividends or
other distributions.
ARTICLE SIX - DIVIDENDS
Out of funds which are legally available, the Board may at any regular or
special meeting, declare cash dividends payable upon the capital stock of the
corporation. Before declaring any such dividend there may be set apart out of
any funds so available, such sum or sums as the Board from time to time deems
proper for working capital, or as a reserve fund to meet contingencies, or for
equalizing dividends, or for such other purposes as the Board shall deem in the
best interests of the corporation.
ARTICLE SEVEN - CORPORATE SEAL
7.1 DESCRIPTION AND USE. The seal of the corporation shall be circular form, and
shall bear the name of the corporation, the year of its organization, and the
State of Incorporation. The seal may be used by causing it to be impressed
directly upon the instrument or writing to be sealed, or upon an adhesive
substance to be affixed thereto. The seal on the Certificates for shares, or on
any corporation obligation for the payment of money, may be facsimile, engraved,
or printed.
7.2 CONTROL AND CUSTODY. Except as otherwise directed by the Board, the
president of the corporation shall cause the seal to be affixed to any corporate
instruments, including bonds, mortgages and other contracts, in behalf of the
corporation. When so affixed, the secretary of the treasurer of the corporation
shall attest thereto. The secretary of the corporation shall bear primary
responsibility for maintaining custody and control of the seal at all times.
ARTICLE EIGHT - EXECUTION OF INSTRUMENTS
All corporate instruments and documents shall be signed or countersigned,
executed, verified or acknowledged by such officer or officers or other
person(s) as the Board may from time to time designate. All checks, drafts or
other orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation shall be signed by such officer or
officers, agent or agents of the corporation, and in such manner as shall be
determined from time to time by the Board.
57
<PAGE>
ARTICLE NINE - FISCAL YEAR
The corporation's fiscal year shall be the calendar year, ending on December
31st of each year, unless the Board shall determine otherwise prior to the end
of the Corporation's first year of existence.
ARTICLE TEN - NOTICE AND WAIVER OF NOTICE
Unless otherwise specifically provided to the contrary, all notices required by
these By-Laws shall be made, in writing and delivered by depositing same in the
United States post service mail depository in a sealed postage-paid wrapper,
properly addressed to the person entitled to notice, at the last known address
of such person. Such notice shall be deemed to have been given on the day of
such mailing. Stockholders not entitled to vote shall not be entitled to receive
notice of any meetings except as otherwise provided by Statute.
Before, during or after an event to which a Stockholder is entitled to notice,
any Stockholder may execute a written waiver of such notice, whether required by
these By-Laws, the Articles of Incorporation or any applicable statutes.
ARTICLE ELEVEN - CONSTRUCTION
Whenever a conflict arises between the language of these By-Laws and the
Articles of Incorporation, the Articles of Incorporation shall take precedence.
ARTICLE TWELVE - ACTION BY CONSENT
Any action taken by the Stockholders, the Directors or a Committee of the Board
may be taken upon written consent, without a meeting, pursuant to the applicable
provisions of the Florida Statutes.
ARTICLE TWELVE - ACTION BY CONSENT
Any action taken by the Stockholders, the Directors or a Committee of the Board
may be taken upon written consent, without a meeting, pursuant to the applicable
provisions of the Florida Statutes.
ARTICLE THIRTEEN - "AFFILIATED TRANSACTIONS"
In the event that the securities of the Corporation become publicly traded, the
Corporation shall not be subject to the "affiliated transactions" provisions of
Florida Statutes 607.0901.
ARTICLE FOURTEEN - AMENDMENTS
These By-Laws may be altered, changed, amended or repealed by the affirmative
vote of a majority of the stock issued and outstanding and entitled to vote
thereon, or the affirmative vote of a majority of the Board, at any meeting duly
called, and for which proper notice of the meeting and its purpose was given to
the Stockholders or the members of the Board, respectively.
58
<PAGE>
ARTICLE FIFTEEN - EMERGENCY BY-LAWS
Pursuant to the provisions of Florida Statutes 607.0207, in the event that a
quorum of the Directors cannot be readily assembled because of a catastrophic
event, any member of the Board may call an emergency meeting and notify all
other Directors using any means of communication available.
In the event of and solely during a catastrophic event any one member of the
Board shall constitute a quorum for the transaction of the corporation's
business. Any action taken in good faith and acted upon in accordance with these
By-Laws shall bind the corporation; and the corporation shall hold harmless any
Director, officer, employee or agent who undertakes an action pursuant to these
By-Laws.
59
(10) Material Contracts
(i) Acquisition Agreement between Florida Diet Services, Inc., Electronic
Business Network, Inc. and Garland E. Harris dated December 3, 1998.
Entered into by and between the following parties:
FLORIDA DIET SERVICES INC., ("FLDT") a Florida corporation, with its
principal offices at: 2263 NW 2nd Avenue, Suite 202, Boca Raton, Florida 33431;
ELECTRONIC BUSINESS NETWORK, INC., ("EBN") a Florida corporation presently
engaged in advertising and related operations for the World Wide Web and the
Internet; maintaining its principal offices at: 1207 Hampton Boulevard, N.
Lauderdale, Florida 33068;
GARLAND E. HARRIS, ("HARRIS") representing himself and RCC Communications,
Inc., as the owners of 100% of the Capital Stock of EBN.
NOW, THEREFORE, in consideration of the promises and the mutual and dependent
covenants hereinafter contained, the parties hereto represent, warrant, covenant
and agree as follows:
ARTICLE I
1.1 Plan of Acquisition. The Plan consists of the acquisition by FLDT of
all of the issued and outstanding shares of Capital Stock of EBN, in a
contemplated tax-free exchange for the issuance by FLDT to EBN shareholders of
3,000,000 shares of FLDT's authorized but presently unissued $0.001 par value
Common Stock. issuance of the foregoing shares shall be made at such time as all
of the terms and conditions set forth in this Agreement are satisfied.
As an added inducement to EBN shareholders to enter into this Transaction,.
Garland E. Harris, President and Director of EBN shall be elected to the board
of directors, and as President of FLDT upon the execution of this Agreement. Mr.
Willis Hale shall simultaneously be elected to serve as a member of the Board of
Directors.
1.2 Agreement to Consummate Transaction. Subject to the terms and
conditions of this Agreement, FLDT and EBN agree to consummate or cause to be
consummated the transaction contemplated hereby ("Transaction"), and agree that
the consummation of the Transaction is conditional upon the compliance with all
of the terms and conditions hereinstated.
1.3 Shareholder Approvals. Both parties shall obtain such shareholder
approvals, if any, which may be required under the laws of their respective
domiciles for the issuance of the shares as contemplated hereby.
1.4 Closing. Unless otherwise necessitated by subsequent occurrences, the
parties contemplate that this Agreement shall take effect immediately upon its
execution, and that the exchange of Certificates representing the respective
shares of each of the parties shall take place within a reasonable period of
time as may be necessitated by third party performance.
60
<PAGE>
1.5 Consummation of Transactions. If at the closing no condition exists
which would permit any of the parties to terminate this Agreement, or a
condition then exists and the party entitled to terminate because of that
condition elects not to do so, then and thereupon the parties will execute any
required documents to effectuate the transaction.
1.6 Acquisition of Shares. Upon and subject to the terms and conditions
herein stated, the Shareholder of EBN shall acquire all rights title and
interests in and to the previously described shares of the common Stock of FLDT.
1.7 Consideration, Issuance and Delivery of Stock. In consideration of the
delivery of all the issued and outstanding shares of the Capital Stock of EBN to
FLDT, and compliance by EBN with its warranties and undertakings contained
herein, FLDT shall deliver certificates representing the aggregate of 3,000,000
shares of FLDT Common Stock. All shares issuable pursuant to this Agreement will
be investment stock, and are subject to all restrictions upon resale, assignment
and transfer as may be imposed under the Securities Act of 1933, as amended; and
when so issued and delivered, such shares, each with an appropriate legend
thereupon, shall be fully paid and non-assessable. As a condition precedent to
the issuance of the certificates, EBN undertakes to provide duly executed
Investment Letters form each person in whose name any of the aforementioned
shares shall be issued.
1.8 Reverse Reorganization/Dilution. The parties acknowledge that, except
with the prior written consent of the present control shareholders, during a
period of two years from the execution hereof, FLDT will not effect a reverse
recapitalization or otherwise dilute the outstanding shares as of the date of
this Agreement, other than for the issuance of shares in an exchange for
valuable assets.
1.9 Present Capitalization. The parties acknowledge that FLDT's present
authorized capitalization consists of Twenty-Five (25,000,000) Million shares of
Common Stock, each of the par value of $0.001, and Five (5,000,000) Million no
par value shares of Preferred Stock.
ARTICLE II
Representations and Warranties
The parties mutually represent and warrant to the other as follows:
2.1 Organization and Good Standing. that each is a corporation duly
organized, validly existing and in good standing under the laws of their
respective states of incorporation; and each has the corporate power to acquire
or otherwise enter into a business combination with another enterprise and to
carry on its business as it is now being conducted. Copies of Certificates of
Incorporation, all amendments, and the corporate By-Laws of each shall be
delivered to the representative of the other party within fifteen (15) days form
the execution of this Agreement. The parties acknowledge that FLDT's Certificate
of Incorporation, all Amendments thereto and
61
<PAGE>
the Corporate By-laws, as presently in effect are contained in its 15c2-11
Information and Disclosure Statement, on file with the National Association of
Securities Dealers, Inc. and the SEC.
2.2 Authority. Each party has the corporate power to enter into this
Agreement and carry out the transactions contemplated hereby. The execution,
delivery and performance of the Agreement will have been duly and validly
authorized and adopted by resolution of the respective Board of Directors; and
this Agreement and the consummation of the Plan of Acquisition will have been
duly and validly authorized and approved by all necessary corporate action and
this Agreement will be legally binding, and enforceable in accordance in with
its terms, subject to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditor's rights generally from time to
time in effect and subject to principles of equity, which may affect the
availability of remedies with respect thereto. To the best knowledge of the
parties, the entering into this Agreement and its consummation of the
Transaction will not violate the provisions of (i) any applicable laws of the
United States or any other state or jurisdiction in which each does business;
(ii) their Certificates of Incorporation or By-Laws; or (iii) any judgment or
decree requiring the obtaining of permits, approvals, consents, authorizations
and modifications referred to in Section 4.3 hereof. Further, no default or
breach will occur in any material respect by virtue of the Plan of Acquisition
under any material contract, agreement, mortgage, indenture or other instrument,
of which either of the parties is a part or by which it is bound, and no
material right under any such existing contract, agreement, mortgage, indenture
or other instrument will be extinguished by virtue of the Agreement.
2.3 Absence of Material Changes. Except as permitted or contemplated by
this Agreement or otherwise disclosed, there has not been any material changes
in the financial or operating condition of either party.
2.4 Litigation. To the best knowledge of management of both parties
hereto, there are no judicial or administrative actions, suits, proceedings or
investigations pending, or threatened, against which might result in any
material change in their respective condition (financial or other), properties,
assets, business, operations or prospects of either party; or in any material
liability, or which question the validity of this Agreement, or of any action
taken or to be taken in connection herewith. There are no citations, fines or
penalties heretofore asserted against the parties under any federal, state or
local law relating to air or water pollution, or other environmental protection
matters, or relating to occupational health or safety.
2.5 Disclosing of Material Information. Neither this Agreement nor any
exhibit hereto contains any untrue statement or material fact, or admits to
state a material fact necessary to make the statements herein or therein not
misleading, relating to the business or affairs of each party hereto. There is
no fact known that materially adversely affects the business conditions
(financial or otherwise) or other prospects of either party, which has not been
set forth herein or otherwise disclosed.
ARTICLE III
62
<PAGE>
Covenants of the Parties
Each party covenants with the other as follows:
3.1 Negative covenants. From the date of this Agreement, neither party
will
3.1-1 Engage in any activities or transactions which will be
detrimental to the interests of its shareholders, other than conduct its normal
course of business;
3.1-2 Engage in any activities or transactions which would be
adverse to the interests of the shareholders of the other.
3.2 Affirmative covenants. Each party will do, or has done the following:
3.2-1 If required by the laws of their respective states of
incorporation, have obtained the required consent of their shareholders to
proceed with the Acquisition Agreement;
3.2-2 Use its best efforts to enhance the business organization and
retain the services of its officers, employees and "key" consultants;
3.2-3 Afford to the officers, attorneys, accountants and other
authorized representatives of the other party, full and free access to its
properties, books, tax returns and records, to provide a full and fair
opportunity to make such investigations as deemed necessary of the affairs of
the other party.
3.2-4 Promptly advise the other in writing of any materially adverse
change in the financial condition, business, operations or key personnel, any
breach of its representations or warranties contained herein, and any material
contract, agreement, license or other arrangement which, if in effect on the
date of this Agreement, should have been included in this Agreement;
3.2-5 Use its best efforts to accomplish all actions necessary to
consummate the Plan of Acquisition, including the satisfaction of all the
conditions set forth in this Agreement.
ARTICLE IV
Mutual Conditions
Neither party will be obligated to complete or cause to be completed the
transactions contemplated by this agreement unless the following conditions, and
any which may be set forth as a Schedule if annexed hereto as an integral part
hereof, have been met:
4.1 Absence of Restraint. No order to restrain, enjoin or otherwise
prevent the consummation of this Agreement, or the transactions contemplated
herein shall have been entered by any court or administrative body, and no
proceeding to obtain any such order shall have been commenced or shall be
threatened.
4.2 Absence of Termination. The obligations to consummate the transactions
contemplated hereby shall not have been canceled pursuant to sections 6.1.
4.3 Required Approvals. Each party shall have received all such approvals,
consents, authorizations or modifications as may be required to permit the
specific performance of their respective obligations under this Agreement, and
the consummations of the transactions herein
63
<PAGE>
contemplated (whether for governmental authorities or other persons), and each
party shall have received any and all permits and approvals from any regulatory
authority having jurisdiction required for the lawful consummation for the Plan
of Acquisition.
4.4 Compliance - Securities Laws. The parties hereto acknowledge that all
of the shares of Common Stock to be issued by FLDT in the consummation of this
Agreement are and shall be "restricted" shares under the Securities Act of 1933,
as amended. Each share shall have the following or similar restrictive legend
upon the face and or the reverse:
"The shares represented by this Certificate have not been registered under
the Securities Act of 1933. The shares have been acquired for Investment and may
not be sold, transferred or assigned in the absence of an effective registration
statement for these shares under the Securities Act of 1933 or an opinion of the
Company's counsel that registration is not required under said Act."
All shareholders of EBN shall execute an appropriate Investment Letter
indicating that:
(i) such shareholder is acquiring the shares of FLDT by virtue of this
business combination, will hold same as an investment, and does not then have a
present intention to sell, transfer or otherwise engage in a distribution of
such shares: and
(ii) any future sale or transfer shall only be made pursuant to an
effective SEC Registration Statement covering said shares, or pursuant to the
provisions of Rule 144 or other applicable exemption from registration, as
promulgated under the Act.
ARTICLE V
Conditions to Obligations
Neither party shall be obligated to complete or cause to be completed the
transactions contemplated by this Agreement unless the following conditions have
been met:
5.1 Compliance with Representations, Warranties and Covenants. I) All of
the representations and warranties contained in this Agreement are true and
shall be true in all material respects at and as of the date hereof; ii) Each
party shall have complied with and performed all of the covenants contained in
this Agreement to be performed by them; iii) evidence of compliance shall be by
appropriate schedules to be attached hereto and incorporated by reference and
certified as correct by the President of EBN.
5.2 Tax Opinion. If necessitated by the nature of the transaction, both
parties shall have received from their respective accountants, a letter to the
effect that in their opinion the income tax consequences of the Agreement to be
substantially as follows:
5.2-1 No gain or loss will be recognized by the shareholders of
either party upon receipt of the shares as provided for in the Agreement;
64
<PAGE>
5.2-2 The tax basis of the shares of stock received will be the
value placed upon said shares by the determination pursuant hereto of the value
of the transaction.
5.3 Opinion of counsel. The parties shall have received opinion letters
from their respective counsel that:
5.3-1 The respective party is a corporation, validly, organized,
legally existing and in good standing under the laws of the state of its
incorporation, and is authorized to conduct business in each jurisdiction in
which may be applicable; and has full corporate power and authority to own its
properties and to conduct its business as it is being conducted;
5.3-2 Each operating subsidiary corporation, if any, is validly
organized, legally existing and in good standing under the laws of the
jurisdiction in which domiciled, with full corporate power and authority to own
its properties and to conduct its business operations;
5.3-3 The respective party has the full corporate power to carry out
the transactions contemplated herein; this Agreement has been duly executed and
delivered and all necessary corporate action has been taken by the respective
Boards of Directors and shareholders.
ARTICLE VI
Miscellaneous
6.1 Termination. This Agreement may not be terminated or canceled, and the
transaction abandoned except:
6.1-1 By mutual consent of the Board of Directors of both parties;
or
6.1-2 By either party in the event that any of the conditions
specified in this Agreement (including any Schedules annexed hereto and made an
integral part hereof) by which the other party shall not have performed a stated
obligation to the satisfaction of the party seeking to terminate the Agreement
within any specific time as may be contemplated by the Agreement.
6.2 Effect of Termination. If this Agreement is terminated, this
Agreement, except as to Sections 6.3 and 6.4, shall no longer be of any force or
effect and there shall be no liability on the part of any party or its
respective directors, officers or shareholders provided, however, that in the
case of a termination without case by a party or a termination pursuant to
Section 6.1 hereof because of prior material default under or material breach of
this Agreement by another party, except in the case of deliberate fraud and
misrepresentation, including the intentional omission of a material fact,
neither party shall be responsible for the damages (including attorneys fees and
related costs) incurred by the other party hereto. All cash funds paid by either
party to the other, if any, shall be deemed liquidated damages and are not
refundable in the event that this Agreement is terminated for any reason
whatsoever.
65
<PAGE>
6.3 Return of Information; Confidentiality. In the event this Agreement is
terminated or the Plan of Acquisition is not consummated for any reason, the
parties agree that all written information and documents supplied by either to
each other shall be promptly returned to the other party at its request, and
each party shall each use its best efforts to cause confidential information to
continue to be treated as confidential and shall refrain from disclosure to any
third parties.
6.4 Costs and Expenses. Unless otherwise specifically provided for, all
costs and expenses incurred in connection with satisfying their respective
obligations under this Agreement will be paid by the party incurring the
expenses. In the event of a termination of this Agreement, pursuant to Article
VI, each party will bear their own expenses.
6.5 Extension of Time; Waivers. At any time:
6.5-1 Either party may extend the time for the performance of the
obligations or other as required by the other party, or (ii) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered pursuant hereto by the parties to the other,
and (iii) waive compliance with any of the agreements or conditions herein to be
performed by the other party. All performance waivers hereunder shall be in
writing and signed by the waiving party.
6.6 Reliance of Counsel. In rendering any opinion referred to herein,
counsel for the parties may rely upon factual matters, certificates of public
officials and corporate officers, opinions of corporate general counsel, and
such other evidence as counsel may reasonably deem appropriate; and as to
matters governed by laws of jurisdictions other than the United States or the
state in which said counsel is located, an opinion of local counsel in
jurisdictions, which counsel shall be satisfactory to the other parties in the
exercise of their reasonable judgment.
6.7 Notices. All notices by both parties to the other shall be in writing,
delivered by the U.S. Postal Service (certified, registered or overnight
express) with return receipt requested and addressed to the respective party at
the address stated hereinabove, or such other address as may hereafter be
provided and such change of address be acknowledged. Notice may be delivered by
private carrier -- express or overnight delivery, with written proof of receipt
required.
6.8 Amendment. This Agreement may only be altered, changed or modified by
an amendment in writing, which has been submitted to and approved by the board
of directors and or shareholders of the respective parties.
6.9 Assignment. The benefits and obligations hereunder shall inure to the
benefit of the parties and their successors in interest, including the heirs,
executors, legal representatives, successors and assigns. Notwithstanding the
foregoing, this Agreement, and the obligations hereunder, may only be assigned
by the written consent of the other party.
6.10 Change of Name. In contemplation of this Agreement, on December 2,
1998, FLDT has filed the appropriate documentation to effect a change in its
corporate name to
66
<PAGE>
www.eBIZnet.com.Inc.. Notice to the NASD (OTC Bulletin Board) and other
regulatory authorities, together with appropriate documentation shall be
immediately filed to inform said organization of the Acquisition described
hereinabove, and the change of corporate name.
6.11 Miscellaneous
6.11-1 Entire Agreement. This Agreement is the entire agreement
between the parties and supersedes all prior oral and written agreements with
regard to the subject matter hereof. All provisions of this Agreement shall
survive until such time as all conditions, whether their required performance is
contemporaneous or subsequent, shall have been completed as required hereunder.
6.11-2 Effective Date. This Agreement shall take effect only upon
its proper execution by duly authorized representatives of both parties. No
obligation hereunder shall arise until such time as this Agreement is so duly
executed.
6.11-3 Counterparts. This Agreement may be executed in several
counterparts, each of which will be deemed an original and all of which, taken
together, shall constitute one and the same instruments.
6.11-4 Facsimile Signatures. The electronically transmitted
facsimile signatures of one or more signatories hereto shall for all purposes
hereunder be deemed an original.
6.11-5 Surviving Clauses. The parties hereto specifically agree that
those provisions contained herein that by their nature require subsequent or
continuing performance, shall survive and shall be fully enforceable hereunder
by appropriate legal remedies.
6.11-6 Governing Law. This Agreement shall be governed in all
respects, including validity, interpretation and effect, pursuant to the laws of
the State of Florida.
6.11-7 Titles and Captions. The titles and captions of the Sections
and paragraphs of this Agreement are included solely for convenience or
reference, and shall have no effect upon the constructions or meanings of this
Agreement.
67
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this nine (9) page
Agreement as of the ___ day of December 1998
WITNESS: Florida Diet Services Inc.
__/s/_________ By: /s/ Sharleen B. Glass, Pres.
Sharleen B. Glass, President
WITNESS: Electronic Business Network, Inc.
By: /s/ Garland E. Harris, Pres.
Garland E. Harris, President
EBN Shareholders
/s/ Garland E. Harris
Garland E. Harris, Individually, and
Acting for RCC Communications Inc.
68
(ii) Asset Purchase Agreement between JBX
Online, Inc. and JBX Design, Inc. and
DBA JBX Online dated January 14,1999.
69
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ( The Agreement), is made and entered into as of
the 11 day of January, 1999, by and between JBX Online, Inc., a corporation
being formed as a wholly owned subsidiary of www. eBIZnet.com Inc., organized
and existing under the laws of the State of Florida (Purchaser), and JBX
Designs, Inc. and DBA JBX Online, a corporation organized and existing under the
laws of the State of Florida (Seller).
PREAMBLE
The parties hereto having completed appropriate due diligence investigations of
each other, the Purchaser desires to purchase and Seller desires to sell and
transfer certain assets of Seller presently used in the operation of the
business conducted by Seller, upon the terms and subject to the conditions set
forth herein.
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1
Sale and Purchase
Section 1.1 Sale and Transfer of Assets. Seller hereby agrees to sell, convey,
transfer, assign and deliver to Purchaser at closing, as hereinafter defined,
and Purchaser hereby agrees to purchase as herein provided, all the assets,
property, rights, interests, and business of Seller of every kind and
description, tangible of intangible and regardless of whether or not carried or
reflected in the books and records of Seller, used in the operation if the
Business, except for the assets and property described in Section 1.2 below. The
assets and property to be purchased and sold hereunder (collectively, the
Purchased Assets) include, but are not limited to, the following:
(a) All machinery, equipment (including office equipment), tools, furniture,
leasehold improvements and all other personal property owned by Seller, and used
in connection with the Business, including, but not limited to, those items
listed or referenced in Exhibit A attached hereto and incorporated herein
(collectively, the Fixed Assets), together with any expressed or implied
warranties by the manufactures or sellers of any item or component part thereof
and all maintenance records, brochures, catalogues and other documents relating
thereto or to the installation or functioning thereof which are now in or may
hereafter come onto the possession of Seller;
(b) All of Sellers right, title and interest in and to all contracts,
agreements, personal property leases, licenses, and commitments relating to the
operation of the Business;
(c) All business records - customer and supplier lists, mailing lists, payroll
and personnel records, formulae, specifications, reports, data, notes,
correspondence, contracts, files,
<PAGE>
and other documents in the possession of Seller relating to the operation of the
Business, excluding only the corporate records and minute books of Seller;
(d) All accounts receivable;
(e) All prepaid expenses, including but not limited to prepaid rent, prepaid
utilities and prepaid insurance premiums for coverage of the Purchased Assets
and for coverage of general liability for the operation of the Business;
(f) Any and all goodwill of Seller;
(g) All the Sellers rights, title and interest in the trade name, JBX Designs,
Inc. and DBA JBX Online and all the Sellers rights, title and interest in the
service mark, JBX Designs, Inc. and DBA JBX Online, (as registered with the
Florida (State) Secretary of State, Certificate of Registration No. 530971).
(h) All the Sellers inventory and other personal property held for sale or
consumption in the Business, including inventory on order or in transit to the
Business (collectively the Inventory) and;
(I) All computer software used in the operation of the Business.
Section 1.2 Excluded Assets. Anything in this Agreement to the contrary
notwithstanding, Seller is retaining title to, and possession of, and Seller is
not selling, conveying, transferring, assigning or delivering to Purchaser any
of Sellers rights, title or interest in, to or under any of the following assets
and property (collectively, the Excluded Assets);
(a) All refunds due in income or other taxes;
(b) All insurance contracts on the lives of the officers of Seller, and the cash
value of such policies, if any; and
(c) All Sellers causes of action, judgments, claims, demands and rights of
whatever nature against third parties arising out of or relating to events prior
to the Closing Date.
Section 1.3 Purchase Price. The purchase price payable to the Seller by the
Purchaser in consideration for the Purchased Assets shall be one hundred and
fifteen thousand shares (115,000) of www.eBIZnet.com Inc. Common Stock subject
to Rule 144 Restrictions. Valuation shall be determined as of the date hereof by
the closing bid price. The purchase price shall be allocated among the Purchased
Assets for federal and other income tax purposes, and for book purposes, in
accordance with Section 1060 with the Internal Revenue Code of 1986, and any
regulations promulgated pursuant thereto, as amended from time to time.
<PAGE>
The purchase price shall be paid by Purchaser to Seller as follows:
(a) Issuance at Closing of One Hundred Fifteen Thousand Shares of Common Stock
issued by www. eBIZnet.com Inc. Such shares shall be subject to transfer
restrictions as required under the provisions of SEC Rule 144 Common Stock. The
aforesaid shares shall be issued to John Boudreaux, 1038 Boca Springs Dr., Boca
Raton, Florida pursuant to Subsection 2.1(I) below; and
Section 1.4 Assumption of Certain Liabilities. As further consideration for the
Purchased Assets, at the Closing, Purchaser shall assume and agree to pay,
perform and discharge, when due, the executory liabilities and commitments
included in or pertaining to the Purchases Assets, but only to the extent of
twenty thousand dollars of Credit Card obligations that was incurred by Seller
in the ordinary course of business (the Assumed liabilities), and Excluding:
(a) Consequential damages arising out or any breach by Seller, at any time, of
any such contract, agreement, lease, license or commitment; and
(b) Noncontractual liabilities, claims or obligations arising out of or related
to Sellers operation of the Business prior to the Closing Date;
(c) Any liability of Seller for Federal, State of local income and franchise
taxes applicable to operations prior to the Closing Date, and for sales tax,
and any penalties, interest, fines or assessments in connection therewith;
(d) Any liability for commitments relating to the employment, relocation or
termination of any employees of Seller;
(e) Any matter required to be disclosed in response to Sellers representations
and warranties set forth in Article 2, but not so disclosed;
(f) Liabilities or obligations in respect of previous sales of the assets of
Seller outside of the ordinary course of business;
(g) Obligations or expenses of Seller in connection with the transactions
contemplated hereby, including, without limitations, legal and accounting fees
and expenses and brokerage finders fees due; and
(h) Liabilities imposed upon Seller as a result of litigation pending against
Seller as of Closing Date.
<PAGE>
ARTICLE 2
Representations and Warranties of Seller and Purchaser
Section 2.1 Representations and Warranties of Seller. Seller hereby represents
and warrants to Purchaser as follows:
(a) Due Incorporation and Organization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State Florida, with
all requisite corporate power and authority to carry on the Business as now
being conducted, and to own, operate, lease and utilize the assets, properties
and businesses of Seller, including the Business.
(b) Authority. Seller has the legal power and authority to enter into and
perform this Agreement and the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement by Seller and the
transactions contemplated by this Agreement have been duly and validly approved
and authorized by all necessary corporate and shareholder action of Seller.
(c) Personal Property Leases. Seller enjoys peaceful and undisturbed possession
under all leases of personal property. To the best of Sellers knowledge, all
such leases are valid and effective in accordance with their respective terms,
and no default with respect to such leases has occurred.
(d) Title to Personal Property. Seller has good and marketable title to all of
the Fixed Assets and other personal property conveyed hereunder (including owned
personal property that is not reflected on the Sellers balance sheet as a result
of being fully depreciated or not required to be reflected thereon in accordance
with generally accepted accounting principles), and all such personal property
is held by Seller free of all liens, encumbrances, security interests and
charges.
(e) Compliance with Applicable Laws. The Seller has complied with all laws,
regulations and orders applicable to the Business. The Business is not in
default with respect to any order, writ, injunction or decree of any court or
any court or Federal, State, Municipal or other Governmental authority or
agency. The Business as now operated does not violate any zoning ordinance,
restrictive covenant, administrative regulation, environmental law or
regulation, or any other provision of law.
(f) Taxes. The Seller has filed all Federal, State and local tax returns,
listings and reports required by law to be filed by it with respect to the
operation of the Business, and has paid or shall pay on the closing date all
taxes which are due pursuant to such returns, listings and reports.
(g) Actions Pending. There are no actions, suits or proceedings pending or, to
the knowledge of Seller, threatened against or affecting the Business at law or
in equity, or before any governmental or public office, agency or authority
which involves the
<PAGE>
Possibility of any liability or which may result in any adverse change in the
operation or ownership of the Business or the Purchased Assets.
(h) Condition of Leased Premises. The premises currently leased by Seller for
the operation of the Business (the Leased Premises), which premises are more
fully described in Exhibit C, and all mechanical systems and equipment serving
the premises are in good and operable condition.
(i) Brokers. Seller and Purchaser agree that there was no broker or finder who
brought about the subject transaction. Each party agrees to indemnify and save
harmless the other in the event of a third party claim.
(j) Condition of Fixed Assets. All Fixed Assets conveyed hereunder are in good
and operable condition, normal wear and tear excepted.
(k) Absence of Conflicts and Consent Requirements. Sellers execution and
delivery of this Agreement and performance of its obligations hereunder,
including the sale of the business and the Purchased Assets hereunder, do not
(i) conflict with or violate Sellers Articles of Incorporation or Bylaws, (ii)
violate or, alone or with notice or the passage of time, result in the material
breach or termination of, or otherwise give any contracting party the tight to
terminate or declare a default under, the terms of any written agreement to
which Seller is a party or by which its properties or assets may be bound; or
(iii) violate any judgment, order, decree, or to the knowledge of Seller, any
law, statute, regulation or other judicial or governmental restriction to which
Seller is subject.
(1) Licenses, Permits and Compliance with Law. Seller holds all licenses,
certificates, permits, franchises and rights from all appropriate Federal, State
or other public authorities necessary for the use of the Purchased Assets in the
operation of the Business, and all such material licenses, certificates,
permits, franchises and rights are set forth in Exhibit D attached hereto and
incorporated herein. Seller is presently conducting the Business so as to comply
with all applicable statutes, ordinances, rules, regulations and orders of any
governmental authority, including but not limited to any law, ordinance or
regulation relating to the handling, storage, transportation, treatment or
disposal of any Hazardous Substance as defined under the Comprehensive
Environmental Recovery Compensation and Liability Act (CERCLA), 42 U.S.C. 9601
et. seq., as amended, or any petroleum or petroleum-bases substance. Further, to
its knowledge, Seller is not presently charged with and Seller is not under
governmental investigation with respect to any actual or alleged violation of
any statute, ordinance, rule or regulation affection the Purchases Assets or the
Business.
Section 2.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as follows:
(a) Due Organization. Purchaser is a corporation duly organized, existing and in
good standing under the laws of the Stare of Florida.
<PAGE>
(b) Authority. Purchaser is authorize to do business in Florida. Purchaser has
the legal power and authority to enter into and perform this Agreement and the
transactions contemplated by this Agreement. The execution, delivery and
performance of this Agreement by Purchaser and the transactions contemplated by
this Agreement have been duly and validly approved and authorized by all
necessary corporate action of Purchaser. Neither the execution and delivery by
the Purchaser of this Agreement, nor the consummation of the transactions
contemplated hereby, not compliance by Purchaser with any of the provisions
hereof will:
(i) conflict with or result in a breach of any provision of the Articles of
Incorporation or Bylaws of Purchaser, or (ii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Purchaser or any
of its properties or assets.
(c) Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Purchaser in such a manner as not to
give rise, as the result of any action of Purchaser, to any valid claim against
the Seller for a brokerage commission, finders fee or other like payment.
ARTICLE 3
Closing
Section 3.1 Closing Date. The closing for the consummation of the transactions
contemplated by this Agreement (the Closing) shall take place at the offices of
the Purchaser on or before January 15, 1999..
Section 3.2 Obligations of Seller. At the closing, Seller shall deliver to
Purchaser, as appropriate:
(a) Such warranty deeds, leases, bills of sale, endorsements, assignments, and
other good and sufficient instruments of conveyance and transfer, and such
further assurances and evidences of conveyances as may be reasonably requested
by Purchaser in form satisfactory to Purchaser and its counsel, as shall be
effective to vest, in accordance with the terms of this Agreement, all rights,
title and interest in and to the Purchased Assets and other rights contemplated
by this Agreement;
(b) The books, records and other documents to be acquired by Purchaser pursuant
to Section 1.1(c) hereof;
(c) A Non-Compete and Employment Agreement pursuant to Section 4.5 hereof; and
(d) Copies certified by the Secretary or Assistant Secretary of Seller, of the
approval by the Board of Directors and all shareholders of Seller authorizing
the execution, delivery and performance of this Agreement and all other
agreements, documents and instruments relating hereto and the consummation of
the transactions contemplated hereby.
<PAGE>
Section 3.3 Obligations of Purchaser. At the closing, Purchaser shall execute
and/or deliver to Seller payment of the purchase price, including the execution
and delivery of the Note, Security Agreement and related Uniform Commercial Code
financing statements.
ARTICLE 4
Covenants of Seller
Seller agrees and covenants with Purchaser as follows:
Section 4.1 Conduct of the Business. Except as otherwise agreed to in writing by
Purchaser, Seller shall conduct the Business only in the ordinary course and
shall take no action which should interfere with or prevent performance of this
Agreement. Seller agrees that, unless Purchaser agrees in writing, until the
Closing Date:
(a) Preservation of the Business. Without purporting to make any commitment on
behalf of Purchaser, Seller shall exercise all reasonable efforts to: (i)
preserve intact the present business organization and personnel of Seller; (ii)
preserve the present relationship of Seller with all persons having business
dealings with Seller; (iii) preserve and maintain in force all licenses,
permits, registrations, franchises, and other similar rights applicable to the
Business; and (iv) comply with all laws applicable to the conduct of the
Business.
(b) Maintenance of the Purchased Assets. The Purchased Assets shall be
maintained in good repair, order and condition, reasonable wear and tear
excepted.
(c) Employment Agreement. Seller shall not enter into any employment or
consulting agreements or terminate any employee of the Business without prior
notice to the Purchaser.
(d) Insurance. The Seller shall maintain in full force insurance covering loss
or damage to the property conveyed hereunder and general liability coverage for
operation of the Business, and shall take all actions necessary to preserve all
rights under such insurance.
(e) Books and Records. Seller shall maintain complete and accurate books,
accounts and records for the Business in the usual, regular and ordinary manner,
and on a basis consistent with prior years.
(f) Compensation. Seller shall not: (i) increase the compensation payable to any
personnel of Seller except in the ordinary course of business and in accordance
with usual and customary compensation practices; or (ii) introduce any pension
of profit-sharing plan, or any other employee benefit arrangement affecting the
Business.
<PAGE>
(g) Accuracy of Representations and Warranties. Seller shall not take any action
which would render any representation or warranty made herein by Seller untrue
in any material respect as of the Closing Date.
Section 4.2 Notice of Breach or Failure of Condition. Seller will give notice
promptly to Purchaser of the occurrence of any event or the failure of any event
to occur that would preclude the satisfaction of any condition contained herein.
Section 4.3 Further Assurances. Seller shall promptly execute and deliver such
instruments and take such actions as Purchaser reasonably may request in order
to effect the transactions contemplated by this Agreement and to satisfy each of
the conditions set forth in Article 6 of this Agreement.
Section 4.4 Best Efforts of Seller to Obtain Consents. Seller shall use its best
efforts to obtain promptly all consents and authorizations of third parties, to
make all filings, and to give all notices to third parties which may be
necessary and reasonably required in order to effect, or in connection with, the
transactions contemplated by this Agreement.
Section 4.5 Non-Competition and Consulting Agreement. Seller and all
shareholders of Seller shall enter into an agreement with the Purchaser at
closing, which agreement shall be substantially in the form of Exhibit E
attached hereto and incorporated herein.
ARTICLE 5
Covenants of Purchaser and Seller
Section 5.1 Publicity. Purchaser and Seller agree to maintain in confidence
information concerning this Agreement and the transactions contemplated by this
Agreement. The parties shall consult with each other prior to any public
announcements or disclosures required by law to be made with respect to the
transactions contemplated by this Agreement, and no other announcements will be
made without mutual consent of the parties.
Section 5.2 Best Efforts. Purchaser and Seller will use their best efforts to
perform or cause to be satisfied each covenant or condition to be performed or
satisfied by them.
Section 5.3 Governmental and other Filings. Seller and Purchaser agree to
cooperate with each other in filing any necessary applications, reports or other
documents with any Federal; or State authorities having jurisdiction with
respect to the transactions contemplated by this Agreement and in seeking
necessary consultation with and favorable action by any such agencies,
authorities or bodies.
Section 5.4 Cooperation After Closing. After the Closing Date, Purchaser and
Seller shall whenever and as often as shall be reasonably required by the other,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any and
<PAGE>
all further instruments as may be necessary or expedient to consummate the
transactions provided for in this Agreement.
ARTICLE
Conditions to Sale
Section 6.1 Conditions Precedent to Obligations of Purchaser. All obligations of
Purchaser under this Agreement are, at the option of Purchaser, subject to and
shall be conditioned upon the satisfaction on or prior to the Closing Date, of
each of the following additional conditions:
(a) Representations, Warranties and Agreements of Seller. Except for changes
contemplated by this Agreement and changes occurring in the ordinary course of
business, the representations, warranties and agreements made by Seller herein
shall be true in all material respects on an as of the Closing Date with the
same effect as though such representations and warranties had been made or given
on and as of the Closing Date. Seller and all shareholders of Seller shall have
performed in all material respects the obligations, agreements and covenants
undertaken by them herein to be performed at or prior to the Closing Date
(b) Consents to Assignments. Purchaser shall have received evidence,
satisfactory to Purchaser and its counsel, that any necessary consents to the
assignments of the contracts agreements, leases, licenses and commitments
contemplated hereunder have been obtained.
(c) Necessary Approvals: Regulatory Authorizations. All authorizations and
approvals of any third parties, including Federal or State regulatory bodies and
officials, necessary, in the reasonable opinion of Purchaser, for the
consummation of the transactions contemplated by this Agreement, and the
continuation in all material respects of the business without interruption after
the Closing Date in substantially the manner in which such business is now
conducted, shall have been received and shall be in full force and effect.
(d) Corporate Authorization. All resolutions and actions necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby by Seller shall have been duly and
validly made and taken, and Seller shall have full power and right to consummate
the transactions contemplated hereby.
(e) Execution of New Lease. Purchaser and the Landlord of the premises shall
enter into a new lease of the Leased Premises on terms and conditions
satisfactory to Purchaser and its counsel; or approve an assignment of the
present Lease Agreement.
(f) Status and Condition of the Business and the Leased Premises. The Business
and the Leased Premises shall not have suffered, prior to the closing, any loss
or damage on
<PAGE>
account of fire, flood, accident or any other calamity to an extent that would
materially interfere with the conduct of the Business or materially impair its
value as a going concern, regardless of whether any such loss or losses have
been insured against. Purchaser shall have had full opportunity to enter upon
the Leased Premises and make such examinations thereof as it deems necessary.
The results of such examinations must be satisfactory to Purchaser, in its sole
discretion.
(g) Payment of Transfer Taxes. The Seller shall have paid or made provision for
payment of all transfer taxes sales taxes or other similar taxes, which become
due by reason of the transactions herein provided, if any.
Section 6.2 Conditions Precedent to Obligations of Seller. All obligations of
Seller under this Agreement are subject to and shall be conditioned upon the
satisfaction prior to the Closing Date, of each of the following conditions:
(a) Representations, Warranties and Agreements of Purchaser. The
representations, warranties and agreements made by Purchaser herein shall be
true in all material respects on and as of the Closing Date with the same effect
as though such representations and warranties had been made or given on and as
of the Closing Date with the same effect as though such representations and
warranties had been made or given on and as of the Closing Date, except as
affected by transactions contemplated hereby. Purchaser shall have performed in
all material respects the obligations, agreements and covenants undertaken
herein to be performed at or prior to the Closing Date.
(b) Corporate Authorization. All resolutions and actions necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby by Purchaser shall have been duly and
validly made and taken, and Purchaser shall have full power and right to
consummate the transactions contemplated hereby.
ARTICLE 8
Termination
Section 8.1 Termination by Mutual Consent. At any time on or prior to the
Closing Date, this Agreement may be terminated by the mutual consent of
Purchaser and Seller without liability on the part of any party. In the event of
the termination of this Agreement by mutual consent, this Agreement shall become
void and have no effect, without any liability on the part of any party or its
directors, officers or shareholders.
Section 8.2 Termination Upon Breach or Default. At any time on or prior to the
Closing Date, if a material default shall be made by a party in the observance
or in the due and timely performance of the covenants herein contained, or if
there shall have been a material breach by a party of any of the representations
and warranties set forty in this Agreement, Purchaser or Seller, as the case may
be, any terminate this Agreement
<PAGE>
without prejudice to its other rights and remedies, including such partys right
to recover its expenses, costs, and other damages.
Section 8.3 Termination Based Upon Conditions. If the conditions of this
Agreement to be complied with or performed by a party on or before the Closing
Date shall not have been complied with and such noncompliance or nonperformance
shall not have been waived, the party to whom the benefit of such condition runs
may terminate this Agreement without prejudice to its other rights and remedies,
including such partys right to recover its expenses, costs and other damages.
ARTICLE 9
Miscellaneous
Section 9.1 Bulk Sales Compliance. The parties agree to waive compliance with
the Bulk Sales provisions of the Uniform Commercial Code of the State of
Florida. The Seller agrees to hold harmless and indemnify Purchaser as to any
and all claims, damages, costs and expenses incurred by virtue of such waiver.
In the event that any such claims may hereafter arise, the Seller agrees to
satisfy such claims by the surrender to Purchaser of a sufficient quantity of
shares of www.eBIZnet.com Inc., from those being issued as consideration for
the subject transaction.
Section 9.2 Amendment. This agreement may be amended, modified or supplemented
in whole or in part only by an instrument in writing executed by both Purchaser
and Seller.
Section 9.3 Assignment. The parties agree that neither this Agreement nor any
rights created hereby shall be assignable by any party without the prior written
consent of the other party.
Section 9.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered to be an original instrument.
Section 9.5 Expenses. Seller and Purchaser shall each bear the respective
expenses incurred by them in connection with the negotiation, execution and
delivery of this Agreement and the consummation of he transactions contemplated
hereby.
Section 9.6 Entire Agreement. This Agreement contains the entire agreement
between Purchaser and Seller with respect to the sale of the Purchased Assets
and related transactions and supersedes all prior arrangements or understandings
with respect thereto.
Section 9.7 Descriptive Headings. The description headings are for convenience
of reference only and shall not control or affect the meaning or construction of
any provision of this Agreement.
<PAGE>
Section 9.8 Notices. All notices or other communications that are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
IF TO PURCHASER: Garland E. Harris, President
www. eBlZnet.com Inc.
1207 Hampton Blvd. North
Lauderdale, FL 33608
IF TO SELLER: John Boudreaux
JBX Designs, Inc. and DBA JBX Online
P0 Box 971052
Boca Raton, FL 33497
Section 9.9 Specific Performance. Seller acknowledges that the Purchased Assets
are unique and that if Seller fails to consummate the transactions contemplated
by this Agreement, such failure will cause irreparable harm to Purchaser for
which there will be no adequate remedy at law. Purchaser shall be entitled, in
addition to its other remedies at law, to specific performance of this Agreement
of Seller, without just cause, refuses to consummate the transactions
contemplated by this Agreement.
Section 9.10 Survival of Covenants, Representations, Warranties and
Indemnifications.
All covenants, representations and warranties made by any party to this
Agreement shall be deemed made for the purpose of inducing the other parties to
enter into this Agreement. The representations, warranties and covenants
contained in this Agreement shall, except as otherwise provided in this
Agreement, survive the Closing indefinitely. The provisions of Article 7 of this
Agreement shall survive the Closing indefinitely. The covenants, presentations
and warranties of both Seller and Purchaser are made only to and for the benefit
of the other party to this Agreement and shall not create or vest rights in
other persons.
Section 9.11 Controlling Law. This Agreement shall be governed by and construed
pursuant to the laws of Florida.
Section 9.12 Closing Date. Notwithstanding any provision herein to the contrary,
the Closing Date hereunder shall be the date of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement, consisting of 13
pages, including this page, to be executed by their authorized officers on the
date stated above.
PURCHASER: www.eBIZnet.com, Inc. ATTEST
BY /s/ Garland E. Harris BY: /s/ [ILLEGIBLE}
------------------------------------- ----------------------------
Name: Garland E. Harris Name:
Title: Chief Executive Officer --------------------------
SELLER: JBX Designs, Inc. and DBA JBX Online ATTEST"
BY: /s/ John Boudreaux BY: /s/ [ILLEGIBLE}
------------------------------------ ----------------------------
Name: John Boudreaux, As Name:
Sole Officer, Director, and Shareholder --------------------------
EXHIBIT A, B, C, D, E, etc.
(iii) Asset Exchange Agreement between
Global Online Exchange.One, Inc.
and International Trade Exchange, Ltd
dated March 12, 1999.
ASSET EXCHANGE AGREEMENT
THIS AGREEMENT, ("Agreement"), is made and entered into as of the 12th day of
March 1999, by and between
Global Online Exchange One, Inc. ("Purchaser") a corporation being
formed under the laws of the State of Florida as a wholly owned subsidiary of
www.eBIZnet.com, Inc. ("BIZN"); and
International Trade Exchange Ltd., d.b.a International Credit
Reserve Exchange, Ltd. a.k.a. ICRE Ltd., a corporation organized and existing
under the laws of the State of Missouri ("Seller").
WHEREAS,
The parties hereto having completed appropriate due diligence investigation of
each other, the Purchaser desires to acquire and Seller desires to assign and
transfer all or substantially all assets of Seller presently used in the
operation of the business conducted by Seller, upon the terms and subject to the
conditions set forth herein.
ACCORDINGLY, THE PARTIES MUTUALLY AGREE AS FOLLOWS:
ARTICLE 1
Acquisition and Exchange
Section 1.1 Assignment and Transfer of Assets. Seller hereby agrees to sell, and
Purchaser hereby agrees to purchase, all of the assets, property, rights,
interests and business of Seller of every kind and description, tangible or
intangible, and whether or not carried or reflected in the books and records of
Seller, listed in the operation of the Business; except for the assets and
property described in Section 1.2 below. Said acquisition shall be in the form
of an exchange of assets of Seller for stock to be acquired by BIZN pursuant to
Section 361, subsection (a)(2)(C) of the Internal Revenue Code. The assets and
property to be acquired hereunder (collectively, the "Purchased Assets")
include, but are not limited to, the following:
(A) All machinery, equipment (including office equipment), tools, furniture,
leasehold improvements and all other personal property owned by Seller, and used
in connection with the Business, including, but not limited to those items
listed or referenced in Exhibit A attached hereto and incorporated herein
(collectively, the Fixed Assets), together with any expressed or implied
warranties by the manufacturers or sellers of any item or component part thereof
an all
70
<PAGE>
maintenance records, brochures, catalogues an other documents relating thereto
or to the installation or functioning thereof which are now in or may hereafter
come into the possession of Seller.
(b) All of Sellers right, title and interest in and to all assets, agreements,
personal property, leases, licenses and commitments relating to the operation of
the Business;
(c) All business records, customer and supplier lists, mailing lists, payroll
and personnel records, formulae, specifications, reports, data, notes,
correspondence, files and other documents in the possession of Seller relating
to the operation of the Business, excluding only the corporate records and
minute books of Seller;
(d) All accounts receivable;
(e) All prepaid expenses, including but not limited to prepaid rent, prepaid
utilities and prepaid insurance premiums for coverage of the Purchased Assets
and for coverage of general liability for the operation of the Business;
(f) Any and all goodwill of Seller;
(g) All the Sellers rights, title and interest in the trade name International
Trade Exchange, Ltd., and d.b.a ICRE, Ltd. And all the Sellers rights, title and
interest in the service mark, ICRE, Inc., and registered with the Secretary of
State of the Sate of Missouri, as represented by Certificate of Registration No.
_____________________).
(h) All inventory and other personal property held for sale or consumption in
the Business, including inventory on order or in transit to the enterprise
(collectively the "Inventory") and;
(j) All computer software used in the operation of the Business.
Section 1.2 Excluded Assets. Anything in this Agreement to the contrary
notwithstanding, Seller is retaining title to, and possession of Sellers rights,
title and the interest in or to, or under, anyof the following assets and
property (collectively, the "Excluded Assets");
(a) All refunds either in income or other taxes;
(b) All insurance contracts on the l8ives of the officers of Seller, and the
cash value of such policies, if any; and
(c) All Sellers causes of action, judgments, claims, demands and rights of
whatever nature against third parties arising out of or relating to events prior
to the Closing Date.
The parties agree that the Excluded Assets are insubstantial as compared to the
Acquired Assets.
71
<PAGE>
Section 1.3 Acquisition Price. The acquisitionprice payable to the Seller by the
Purchaser in consideration for the Purchased Assets shall be seventy five
thousand shares (75,000) of Common Stock to be issued by BIZN subject to the
transfer restrictions under the Securities Act of 1933, as amended, the "Act".
Purchaser shll pay the acquisition price to Seller as follows:
(a) Shares to be issued at Closing. Seventy Five Thousand (75,000) shares of
BIZN's Common Stock. Such shares shall be issued subject to tthe restrictions
upon their resale or transfer as required under the provisions of the "Act". The
public offering or other transfer of such shares may only be made if same are
subsequently the subject of an effective registration under the Act or are
otherwise exempt from such registration requirements pursuant to an applicable
provision of the Act or specific rules or regulations promulgated thereunder.
Absent such registration or othe provision providing an exemption, the shares
may be sold or transferred pursuant to Rule 230,144. The aforesaid shares shall
be issued to W. Allen Cochran or designee, 8061 Watson Road, Suite 131, St.
Louis, MO 63119 pursuant to the Seller's Plan of Liquidation (hereinafter
described) to be adopted contemporaneously with Closing; and by also
(b) Assumption of Certain Liabilities. As further consideration for the
Purchased Assets, at the Closing, Purchaser shall agree to pay, perform and
discharge, when due, the executory liabilities and commitments included in or
pertaining to the Purchased Assets, but only to the extent as reflected in
Seller's balance sheets of 12/31/98; and excluding:
Consequential damages arising out of any breach by Seller, at any
time, of any such contract, agreement, lease, license, or commitment; and
Non-contractual liabilities, claims or obligations arising out of or
related to Sellers operation of the Business prior to the Closing Date;
Any liability of Seller for Federal, State or local income and
franchise taxed applicable to operations prior to the Closing Date, and for
sales tax and any penalties, interest, fees or assessments in connection
therewith;
Any liability for commitments relating to the employment, relocation
or terminations of any employees of Seller;
Any matter required to be disclosed in response to Sellers
representations and warranties set forth in Article 2, but not so disclosed;
Liabilities or obligations in respect of previous sales of the
assets of Seller outside of the ordinary course of business;
Obligations or expenses of Seller in connection with the
transactions contemplated hereby, including, without limitation, legal and
accounting fees and expenses and brokerage commissions or fees then due; and
72
<PAGE>
Liabilities imposed upon Seller as a result of litigation pending
against Seller as of Closing Date.
ARTICLE 2
Representations and Warranties of Seller and Purchaser
Section 2.1 Representations and Warranties of Seller. Seller hereby represents
and warrants to purchaser as follows:
(a) Organization. Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida, with all requisite
corporate power and authority to carry on the Business as now being conducted,
and to own, operate, lease and utilize the assets, properties and business of
Seller, including the Business.
(b) Authority. Seller has the legal power and authority to enter into and
perform this Agreement and the transactions contemplated by this Agreement. The
execution , delivery and performance of this Agreement by Seller and the
transactions contemplated by this Agreement have been duly and validly approved
and authorized by all necessary corporate and shareholder action of Seller;
(c) Personal Property Leases. Seller enjoys peaceful and undisturbed possession
under all leases of personal property. To the best of Sellers knowledge, all
such leases are valid and effective in accordance with their respective terms
and no default with respect to such leases has occurred.
(d) Title to Personal Property. Seller has good and marketable title to all of
the Purchased Assets and other personal property conveyed hereunder (including
owned personal property that is not reflected on the Seller's balance sheet as a
result of being fully amortized or not required to be reflected thereto in
accordance with generally accepted accounting principles, and all such personal
property is held by Seller free of all liens, encumbrances, security interests
and charges.
(e) Compliance with Applicable Laws. The Seller has complied with all laws,
regulations and orders applicable to the Business. The Business is not in
default with respect to any order, writ, injunction or decree of any court or
any court or Federal, State or other Governmental authority or agency. The
Business as now operated does not violate any rule, ordinance, restrictive
covenant, administrative regulation, environmental law or regulation, or any
other provision of law.
(f) Taxes. The Seller has filed all Federal, State and local tax returns,
listings and reports required by law to be filed by it with respect to the
operation of the Business, and has paid or shall pay on the closing date all
taxes which are due pursuant to such returns, listing and reports.
(g) Actions Pending. There are no actions, suits or proceedings pending or, to
the knowledge of Seller, threatened against or affecting the Business at law or
in equity, or before any
73
<PAGE>
governmental or public office, agency or authority which involve the possibility
of any liability or which may result in any adverse change in the operation or
ownership of the Business or the Purchased Assets.
(h) Condition of Leased Premises. The premises currently leased by Seller for
the operation of the Business (the :"Leased Premises") which premises are more
fully described in Exhibit C, and all mechanical systems and equipment serving
the premises are in good and operable condition.
( ) Brokers. Seller and Purchaser agree that there was no broker or finder who
brought about the subject transaction. Each party agrees to indemnify and hold
harmless the other in the event of a third party claim.
(j) Condition of Fixed Assets. All Fixed Assets conveyed hereunder are in good
and operable condition, normal wear and tear excepted.
(k) Absence of Conflicts and Consent Requirements. Seller's execution and
delivery of this Agreement and performance of its obligations hereunder,
including the sale of the business and the Purchased Assets hereunder, do not
(i) conflict with or violate Sellers Articles of Incorporation or Bylaws; (ii)
violate or, alone or with others or the passage of time, result in the material
breach or termination of, or otherwise give an contracting party the right to
terminate or declare a default under, the terms of any written agreement to
which Seller is a party or by which the properties or assets may be bound; or
(iii) violate any judgment, order, decree or to the knowledge of Seller, any
law, statute, regulation or other judicial or governmental restriction to which
Seller is subject.
Licenses, Permits and Compliance With law. Seller holds all
licenses, certificates, permits, franchises and rights from all appropriate
Federal, state or other public authorities necessary for the use of the
Purchased Assets int he operation of the Business, and all such material
licenses, certificates, permits, franchises and rights are set forth in Exhibit
D attached hereto and incorporated herein. Seller is presently conducting the
Business so as to comply with all applicable statutes, ordinances, rules,
regulations and orders of any governmental authority, including but not limited
to any law, ordinance or regulation relating to the handling, storage,
transportation, treatment or disposal of any Hazardous Substance as defined
under the Comprehensive Environmental Recovery Comensation and Liability Act
(CERCLA), 42 U.S.C. 9601 et. Seq., as amended, or any petroleum ro
petroleum-based substance. Further, to its knowledge, Seller is not presently
charged with and Seller is not under governmental investigation with respect to
any actual or alleged violation of any nature, ordinance rule or regulation
affecting the Purchase Assets or the Business.
Section 2.2 Representation and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as follows:
(a) Organization. Purchaser is, or will be, a corporation duly organized,
existing and in good standing under the laws of the State of Florida.
74
<PAGE>
(b) Authority. Purchaser is, or will be, authorized to conduct business in
Florida. Purchaser has, or will have, the legal power and authority to enter
into and perform this Agreement and the transactions contemplated by this
Agreement. The execution, delivery and performance of this Agreement by
Purchaser and the transactions contemplated by this Agreement have been duly and
validly approved and authorized by all necessary corporate action of Purchaser.
Neither the execution and delivery by the Purchaser of this Agreement, nor the
consummation of the transactions contemplated hereby, nor compliance by
Purchaser with any of the provisions hereof will: (i) conflict with or result in
a breach of any provisions of the Articles of Incorporation or Bylaws of
Purchaser, or (ii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Purchaser or any of its properties or assets.
(c) Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Purchaser in such a manner as not to
give rise, as the result of any motion of Purchaser, to any valid claim against
the Seller for a brokerage commission, finders fee or other such payment.
ARTICLE 3
Closing
Section 3.1 Closing Date. The closing for the consummation of the transaction
contemplated by this Agreement (the Closing) shall take place at the offices of
the Purchaser or by fax or other similar means, on or before March __, 1999.
Section 3.2 Obligations of Seller. At the closing, Seller shall deliver to
Purchaser, as appropriate:
(a) Such warranty deeds, loans, bills of sale, endorsements, assignments, and
other good and sufficient instruments of conveyance and transfer, and such
further assumptions and evidence of conveyance as may be reasonably requested by
Purchaser in form satisfactory to Purchaser and its counsel as shall be
effective to vest, in accordance with the terms of this Agreement, all rights,
title and interest in and to the Purchased Assets and other rights contemplated
by this Agreement;
(b) The books, records and other documents to be acquired by Purchaser pursuant
to Section 1.1(c) hereof;
(c) Copies certified by the Secretary or Assistant Secretary of Seller, of the
approval by the Board of Directors and all shareholders of Seller authorizing
the execution, delivery and performance of this Agreement and all other
agreements, documents and instruments relating hereto and the consummation of
the transactions contemplated hereby.
Section 3.3 Obligations of Purchaser. At the closing, Purchaser shall deliver to
Seller as payment of the acquisition price, certificate(s) representing the
75,000 shares of BIZN's Common
75
<PAGE>
Stock as herein above described fully paid, nonassessable and only issued
pursuant to the order of the Board of Directors of BIZN.
ARTICLE 4
Covenants of Seller
Seller agrees and covenants with Purchaser as follows:
Section 4.1 Conduct of the Business. Except as otherwise agreed to in writing by
purchaser, Seller shall conduct the Business only in the ordinary course and
shall take no action that should interfere with or prevent performance of this
Agreement, Seller agrees that, unless Purchaser agrees in writing until the
Closing Date:
(a) Preservation of the Business. Without purporting to make any commitment on
behalf of Purchase, Seller shall exercise all reasonable efforts to (i) preserve
intact the present business organization and personnel of Seller; (ii) preserve
the present relationship of Seller with all persons having business dealings
with Seller; (iii) preserve and maintain in force all licenses, permits,
registrations, franchisers and other similar rights applicable in the Business;
and (iv) comply with all laws applicable to the conduct of the Business;
(b) Maintenance of the Purchased Assets. The Purchased Assets shall be
maintained in good repair, order and condition, reasonable wear and tear
excepted;
(c) Employment Agreements. Seller shall not enter into any employment or
consulting agreements or terminate any employee of the Business without prior
notice to the Purchaser.
(d) Insurance. The Seller shall maintain in full force insurance covering loss
or damage to the property conveyed hereunder and general liability coverage for
operation of the Business, and shall take all actions necessary to preserve all
rights under such insurance.
(e) Books and Records. Seller shall maintain complete and accurate books,
accounts and records for the Business in the usual, regular and ordinary manner,
and on a basis consistent with prior years;
(f) Compensation. Seller shall not: (i) increase the compensation payable to any
personnel of Seller except in the ordinary course of business and in accordance
with usual and customary compensation practices; or (ii) introduce any pension
of profit-sharing plan or any other employee benefit arrangement affecting the
Business.
(g) Accuracy of Representations and Warranties. Seller shall not take any action
that would render any representation or warranty made herein by Seller untrue in
any material respect as of the Closing Date.
76
<PAGE>
Section 4.2 Notice of Breach or Failure of Conditions. Seller will give notice
promptly to Purchaser of the occurrence of any event or the failure of any event
to occur that would preclude the satisfaction of any conditions contained
herein.
Section 4.3 Further Assurances. Seller shall promptly execute and deliver such
instruments and take such actions as Purchaser reasonably may request in order
to effect the transactions contemplated by this Agreement and to satisfy each of
the conditions set forth in Article 6 of this Agreement.
Section 4.4 Best Efforts of Seller to Obtain Consents. Seller shall use its best
efforts to obtain promptly all consents and authorizations of third parties, to
make all filings, and to give all notices to third parties which may be
necessary and reasonably required in order to effect, or in connection with, the
transactions contemplated by this Agreement.
Section 4.5 Non-Competition, Management Services and Employment Agreements. W.
Allen Cochran, the Shareholder of Seller shall enter into an agreement withe
Purchaser after closing, as provided in Section 9.13 hereafter.
ARTICLE 5
Covenants of Purchaser and Seller
Section 5.1 Publicity. Purchaser and Seller agree to maintain in confidence
information concerning the Agreement and the transactions contemplated by this
Agreement. The parties shall consult with each other prior to any public
announcements or disclosures required by law to be made with respect to the
transactions contemplated by this Agreement, and no other announcements will be
made without mutual consent of the parties.
Section 5.2 Best Efforts. Purchaser and Seller will use their best efforts to
perform or cause to be satisfied each covenant or condition to be performed by
them.
Section 5.3 Governmental and Other Filings. Seller and Purchaser agree to
cooperate with each other in filing any necessary applications, reports or other
documents with any Federal or State authorities having jurisdiction with respect
to the transactions contemplated by this Agreement and in seeking necessary
consultation with and favorable action by any such agencies, authorities or
bodies.
Section 5.4 Cooperation After Closing. After the Closing Date, Purchaser and
Seller shall whenever and as often as shall be reasonably required by the other,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any and all further instruments as may be necessary or expedient to
consummate the transactions provided for in this Agreement.
ARTICLE 6
Conditions to Sale
77
<PAGE>
Section 6.1 Conditions Precedent to Obligations of Purchaser. All obligations of
Purchaser under this Agreement are, at the option of Purchaser, subject to and
shall be conditioned upon the satisfaction on or prior to the Closing Date, of
each of the following additional conditions:
(a) Representations, Warranties and Agreements of Seller. Except for changes
contemplated by this Agreemnt and changes occurring in the ordinary course of
business, the representations, warranties and agreements made by Seller herein
shall be true in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made or given
on and as of the Closing Date. Seller and all shareholders of Seller shall have
performed in all material respects the obligations, agreements and covenants
undertaken by them herrein to be performed on or prior to the Closing Date.
(b) Consents to Assignments. Purchaser shall have received evidence,
satisfactory to purchaser and its counsel, that any necessary consents to the
assignments of the contracts, agreements, leases, licenses and/or commitments
contemplated hereunder have been obtained.
(c) Necessary Approvals; Regulatory Authorizations. All authorizations and
approvals of any thrd parties including Federal or State regulatory bodies and
officials, necessary, in the reasonable opinion of Purchaser, for the
consummation of the transactions contemplated by this Agreement and the
continuation in all material respects of the business without interruption after
the Closing Date is substantially the manner in which such business in now
conducted, shall have been received and shall be in full force and effict.
(d) Corporate Authorizations. All resolutions and actions necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby by Seller shall have been duly and
validly made and taken and Seller shall lhave full power and right to consummate
the transactions contemplated hereby.
(e) Execution of New Lease. Purchaser and the Landlord of the premises shall
enter into a new lease of the Leased Premises on terms and conditions
satisfactory to Purchaser and its counsel; or approve the assignment of the
present lease Agreement.
(f) Status and Condition of the Business and the Leased Premises. The Business
and the Leased Premises shall not have suffered, prior to the closing, any loss
or damage on account of fire, flood, accident or any other calamity to an extent
that would materially interfere with the conduct of the Business or materially
impair its value as a going concern, regardless of whether any such loss or
losses have been insured against. Purchaser shall have had full opportunity to
enter upon the Leased Premises and make such examinations thereof as it deems
necessary. The results of such examinations must be satisfactory to Purchaser,
in its sole discretion.
(g) payment of Transfer taxes. The Seller shall have paid or made provision for
payment of all transfer taxes , sales taxes or other similar taxes, which
becomre due by reason of the transactions herein provided, if any.
78
<PAGE>
Section 6.2 Conditions Precedent to Obligations of Seller. All obligations of
Seller under this Agreement are subject to and shall be conditioned upon the
satisfaction prior to the Closing Date, of each of the following conditions:
(a) Representations, Warranties and Agreements of Purchaser. The
representations, warranties and agreements made by purchaser herein shall be
true in all material respects on and as of the Closing Date with the same effect
as though such representations and warranties had been made or given on and as
of the Closing Date with the same effect as though such representations and
warranties had been given on and as of the Closing Date, except as affected by
transactions contemplated hereby. Purchaser shall have performed in all material
respects the obligations, agreements and covenants undertaken herein to be
performed at or prior to the Closing Date.
(b) Corporate Authorizations. All resolutions and actions necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby by Purchaser, including actions by its
parent corporation, shall have been duly and validly made and taken, and
Purchaser shall have full power and right to consummate the transactions
contemplated hereby.
ARTICLE 7
Tax Treatment
Section 7.1 Cooperation. Seller and Purchaser agree that it is the intention of
this agreement that the acquisition and exchange herein contemplated result in a
tax free exchange to Seller for purposes of taxation under Section 368,
subsection (a)(2)(C) of the Internal Revenue Code, Seller and Purchaser shall
both account for such transaction for accounting and reporting purposes, in a
manner which is consistent with this transaction.
Section 7.2 Subsequent Events. Seller and Purchaser acknowledge that:
(a) pursuant to Seller's Plan of Liquidation, Seller shall be liquidated within
two (2) years of the Closing Date of this Agreement.
(b) after the Closing Date, Seller shall not engage in the active conduct of any
trade or business, except to the extent necessary to wind up its affairs.
ARTICLE 8
Termination
Section 8.1 Termination by Mutual Consent. At any time on or prior to the
Closing Date, this Agreement may be terminated by the mutual consent of
Purchaser and Seller without liability on the part of any party. In the event of
the termination of this Agreement by mutual consent, this Agreement shall become
void and have no effect. Without any liability on the part of any party or its
directors, officers or shareholders.
79
<PAGE>
Section 8.2 Termination Upon Breach or Default. At any time on or prior to the
Closing Date, if a material default shall be made by a party in the observance
or due and timely performance of the covenants herein contained, or if there
shall have been a material breach by a party of any of the representations and
warranties set forth in this Agreement, Purchaser or Seller, as the case may be,
may terminate this Agreement without prejudice to its other rights and remedies,
including such party's right to recover its expenses, costs, and other damages.
Section 8.3 Terminations Based Upon Conditions. If the conditions of this
Agreement to be complied with or performed by a party on or before the Closing
Date shall not have been complied with and such noncompliance of nonperformance
shall not have been waived, the party to whom the benefit of such condition runs
may terminate this Agreement without prejudice to the other rights and remedies,
including such party's rights to recover its expenses, costs and other provable
damages.
ARTICLE 9
Miscellaneous
Section 9.1 Bulk Sales Compliance. The parties agree to waive compliance with
the applicable Bulk Sales provisions of the Uniform Commercial Code of the State
of Missouri. The Seller agrees to hold harmless and indemnify Purchaser as to
any and all claims, damages, costs and expenses incurred by virtue of such
waiver. In the event that any such claims may hereafter arise, the Seller agrees
to satisfy such claims by the surrender to purchaser of a sufficient quantity of
shares of BIZN, from those being issued as consideration for the subject
transaction.
Section 9.2 Amendment. This agreement may be amended, modified or supplemented
in whole or in part only by an instrument in writing executed by both purchaser
and Seller.
Section 9.3 Assignment. The parties agree that neither this Agreement nor any
rights created hereby shall be assignable by any party without the prior written
consent of the other party.
Section 9.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered to be an original instrument.
Section 9.5 Expenses. Seller and Purchaser shall each bear the respective
expenses incurred by them in connection with the negotiation, execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
Section 9.6 Entire Agreement. This Agreement and the Employment Agreement
contains the entire agreement between Purchaser and Seller with respect to the
sale of the Purchased Assets and related transactions and supersede all prior
arrangements or understandings with respect thereto.
80
<PAGE>
Section 9.7 Descriptive Headings. The descriptive headings are used for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions of this Agreement.
Section 9.8 Notices. All notices or other communications that are required or
permitted hereunder shall be in writing and sufficient if delivered, personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
IF TO PURCHASER: Garland E. Harris, CEO
Global Online Exchange One, Inc.
1207 Hampton Blvd.
North Lauderdale, FL 33608
IF TO SELLER: W. Allen Cochran
International Credit Reserve Exchange, ltd.
International Trade Exchange, Ltd.
8061 Watson Road
Suite 131
St. Louis, MO 65119
Section 9.9 Specific Performance. Seller acknowledges that the Purchased Assets
are unique and that if Seller fails to consummate the transactions contemplated
by this Agreement, such failure will cause irreparable harm to Purchaser for
shich there will be no adequate remedy at law. Purchaser shall be entitled in
additional to its other remedies at law, to specific performance of this
Agreemeent if Seller, without just cause, refuses to consummate the transactions
contemplated by this Agreement.
Section 9.10 Survival of Covenants, Representations, warranties and
Indemnification.
All covenants, representations and warranties made by any party to this
Agreement shall be deemed made for the purpose of inducing the other parties to
enter into this Agreement. The representations, warranties and covenants
contained in this Agreement shall, except as otherwise provided in this
Agreement, survive the Closing indefinitely. The provisions of Article 7, and
any other sections which by their nature require subsequent performance, shall
survive the Closing until such time as their performance has been satisfactorily
completed. The covenants, presentations and warranties of both Seller and
Purchaser are made only to and for the benefit of the other party to this
Agreement and shall not create or vest rights in other persons.
Section 9.11 Controlling Law. This Agreement shall be governed by and construed
pursuant to the laws of the State of Florida.
Section 9.12 Closing Date. Unless there is provision herein to the contrary, the
Closing Date hereunder shall be the effective date of this Agreement.
81
<PAGE>
Section 9.13 Employment Agreements. Purchaser acknowledges that W. Allen Cochran
is essential to the successful continual operations of the business enterprise
and assets being acquired hereby. Therefore, it is the specific mutual intention
of the parties hereto that within a reasonable period of time frmo the date
hereof, the Purchaser and Mr. Cochran enter into a separate written employment
agreement upon such terms and conditions that are mutually satisfactory.
IN WITNESS WEREEOF. The parties have caused tis Agreemetn, consisting of 9
pages, including this page, to be executed by their authorized officers on the
date stated above.
PURCHASER ATTEST:
Global Online Exchange One, Inc.
BY: /S/ Garland E. Harris, CEO BY:
---------------------------------- -------------------
Garland E. Harris
Chief Executive Officer
SELLER:
International Trade Exchange Ltd.,
d.b.a. International Credit Reserve Exchange, Ltd.
a.k.a. ICRE, Ltd. ATTEST: 3/12/99
BY: /S/ W. Allen Cochran 3/12/99 BY: /S/ Jo Ann Cochran
---------------------------------- -------------------
W. Allen Cochran, As
CEO, Director and Shareholder
82
(iv) Asset Exchange Agreement between Global Online Exchange, Inc. and Harold A.
Rice dated May 10, 1999.
THIS AGREEMENT ("Agreement") is made and entered into as of the 10th day of May,
1999, by and between Global Online Exchange, Inc. ("Purchaser") a corporation
formed under the laws of the State of Florida as a wholly owned subsidiary of
www.eBIZnet.com, Inc. ("BIZN"); and Harold Rice, inventor, author and sole
proprietor operating in the state of Missouri ("Seller).
WHEREAS,
The parties hereto having completed appropriate due diligence or substantial
investigation of each other, the Purchaser desires to acquire and Seller desires
to assign and transfer all rights, title and interests in Barter Accounting
Software Business owned and developed by Seller, upon the terms and conditions
set forth herein.
ACCORDINGLY, THE PARTIES MUTUALLY AGREE AS FOLLOWS:
ARTICLE 1
Acquisition and Exchange
Section 1.1 Assignment and Transfer of Assets. Seller hereby agrees to sell, and
Purchaser hereby agrees to purchase, all of the assets, property, rights,
interests and business of Seller of every kind and description, tangible or
intangible, and whether or not carried or reflected in the books and records of
Seller, used in the operation of the business, except for the assets and
property described in Section 1.2 below. Said acquisition shall be in the form
of an exchange of assets of Seller for stock to be issued by BIZN pursuant to
Section 38, subsection (a)(2)(C) of the Internal Revenue Code. The assets and
property to be acquired hereunder (collectively, the "Purchased Assets")
include, but are not limited to, the following:
(a) All developed software source code, database routines, screen and report
formatting, user interfaces and installation procedures.
(b) Any and all goodwill of Seller;
(c) All the Seller's rights, title and interest in the trade name Barter
Accounting Software.
Section 1.2 Acquisition Price. The acquisition price payable to the Seller by
the Purchase in consideration for the Purchased Assets shall be two hundred
thousand shares (200,000) of Common Stock to be issued by BIZN subject to the
transfer restrictions under the Securities Act of 1933, as amended (the "Act").
Purchase shall pay the acquisition price to Seller as follows:
(a) Shares to be issued at Closing. Two hundred thousand (200,000) shares of
BIZN's Common Stock. Such shares shall be issued subject to the restrictions
upon their resale or transfer as required under the provisions of the Act. The
public resale or other transfer of such shares may only be made if same are
subsequently the subject of an effective registration under the Act or are
otherwise exempt from such registration requirements pursuant to an applicable
provision of the Act or specific rules or regulations promulgated thereunder.
Absent such registration or other provision providing an exemption, the shares
may be sold or transferred pursuant to Rule 230.144.
83
<PAGE>
The aforesaid shares shall be issued to Harold A. Rice or designee, 6320
Rockhill Road, Kansas City, Missouri, 64131.
(i) Consequential damages arising out of any breach by Seller, at any
time, of any such contract, agreement, lease, license or commitment; and
(ii) Non-contractual liabilities, claims or obligations arising out of or
related to Sellers operation of the Business prior to the Closing Date;
(iii) Any liability of Seller for Federal, State or local income and
franchise taxes applicable to operations prior to the Closing Date, and for
sales tax, and any penalties, interest, fines or assessments in connection
therewith;
(iv) Any liability for commitments relating to the employment, relocation
or termination of any employees of Seller;
(v) Any matter required to be disclosed in response to Seller's
representations and warranties set forth in Article 2, but not so disclosed;
(vi) Liabilities or obligations in respect of previous sales of the assets
of Seller outside of the ordinary course of business;
(vii) Obligations or expenses of Seller in connection with the
transactions contemplated hereby, including, without limitations, legal and
accounting fees and expenses and brokerage finders fees due; and;
(viii) Liabilities imposed upon Seller as a result of litigation pending
against Seller as of Closing Date.
ARTICLE 2
Representations and Warranties of Seller and Purchaser
Section 2.1 Representations and Warranties of Seller. Seller hereby represents
and warrant to Purchaser as follows:
(a) Organization. Seller is a sole proprietor, validly existing and in good
standing under the Laws of the State of Missouri, with all requisite corporate
power and authority to carry on the Business as now being conducted and to own,
operate, lease and utilize the assets, properties and businesses of Seller,
including the Business.
(b) Authority. Seller has the legal power and authority to enter into and
perform this Agreement and the transaction contemplated by this Agreement. The
execution, delivery and performance of this Agreement by Seller and the
transaction contemplated by this Agreement have been duly and validly approved
and authorized by all necessary corporate and shareholder action of Seller.
(d) Title to Personal Property. Seller has good and marketable title to all of
the Fixed Assets and other personal property conveyed hereunder (including owned
personal property that is not reflected on the Seller's balance sheet as a
result of being fully depreciated or not required to be reflected thereon in
accordance with generally accepted accounting principles), and all such personal
property is held by Seller free of all liens, encumbrances, security interests
and charges.
(e) Compliance with Applicable Laws. The Seller has complied with all laws,
regulations and orders applicable to the Business. The Business is not in
default with respect to any order, writ, injunction or decree of any court of
any Federal, State, Municipal or other Governmental authority
84
<PAGE>
or agency. The Business as now operated does not violate any zoning ordinance,
restrictive covenant, administrative regulation, environmental law or
regulation, or any other provision of law.
(f) Taxes. The Seller has filed all Federal, State, and local tax returns,
listings and reports required by law to be filed by it with respect to the
operation of the Business, and has paid or shall pay on the closing date all
taxes which are due pursuant to such returns, listings and reports.
(g) Actions Pending. There are no actions, suits or proceedings pending or, to
the knowledge of Seller, threatened against or affecting the Business at law or
in equity, or before any governmental or public office, agency or authority
which involves the possibility of any liability or which may result in any
adverse change in the operation or ownership of the Business of the Purchased
Assets.
(i) Brokers. Seller and Purchaser agree that there was no broker or finder
who brought about the subject transaction. Each party agrees to indemnify and
save harmless the other in the event of a third party claim.
Section 2.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as follows:
(a) Organization. Purchaser is, or will be, a corporation duly organized,
existing and in good standing under the laws of the State of Florida.
(b) Authority. Purchaser is, or will be, authorized to conduct business in
Florida. Purchaser has, or will have, the legal power and authority to enter
into and perform this Agreement and the transactions contemplated by this
Agreement. The execution, delivery and performance of this Agreement by
Purchaser and the transactions contemplated by this Agreement have been duly and
validly approved and authorized by all necessary corporate action of Purchaser.
Neither the execution and delivery by the Purchaser of this Agreement, nor the
consummation of the transactions contemplated hereby, nor compliance by
Purchaser with any of the provisions hereof will:
(i) conflict with or result in a breach of any provision of the Articles
of Incorporation or Bylaws of Purchaser or
(ii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Purchaser or any of its properties or assets.
(c) Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Purchaser in such a manner as not to
give rise, as the result of any action of Purchaser, to any valid claim against
the Seller for a brokerage commission, finder's fee or other like payment.
ARTICLE 3
Closing
Section 3.1 Closing Date. The closing for the consummation of the transactions
contemplated by this Agreement (the Closing) shall take place at the offices of
the Purchaser or by fax or other similar means, on or before May 10, 1999.
85
<PAGE>
Section 3.2 Obligations of Sellers. At the closing, Seller shall deliver to
Purchaser, as appropriate:
(a) Such warranty deeds, leases, bills of sale, endorsements, assignments, and
other good and sufficient instruments of conveyance and transfer, and such
further assurances and evidences of conveyances as may be reasonably requested
by Purchaser in form satisfactory to Purchaser and its counsel, as shall be
effective to vest, in accordance with the terms of this Agreement, all rights,
title and interest in and to the Purchased Assets and other rights contemplated
by this Agreement;
(b) The books, records and other documents to be acquired by Purchase pursuant
to Section 1.1 (c) hereof;
Section 3.3 Obligations of Purchaser. At the closing, Purchaser shall deliver to
Seller as payment of the acquisition price, certificate (s) representing the two
hundred thousand (200,000) shares of BIZN's Common Stock as herein above
described, fully paid, non-assessable and duly issued pursuant to the order of
the Board of Directors of BIZN.
ARTICLE 4
Covenants of Seller
Seller agrees and covenants with Purchaser as follows:
Section 4.0 Accuracy of Representations and Warranties. Seller shall not take
any action that would render any representation or warranty made herein by
Seller untrue in any material respect as of the Closing Date.
Section 4.1 Notice of Breach or Failure of Condition. Seller will give notice
promptly to Purchaser of the occurrence of any event or the failure of any event
to occur that would preclude the satisfaction of any condition contained herein.
ARTICLE 5
Covenants of Purchaser and Seller
Section 5.1 Publicity. Purchaser and Seller agree to maintain in confidence
information concerning this Agreement and the transactions contemplated by this
Agreement. The parties shall consult with each other prior to any public
announcements or disclosures required by law to be made with respect to the
transactions contemplated by this Agreement, and no other announcements will be
made without mutual consent of the parties.
Section 5.2 Best efforts. Purchaser and Seller will use their best efforts to
perform or cause to be satisfied each covenant or condition to be performed or
satisfied by them.
Section 5.3 Governmental and other Filings. Seller and Purchaser agree to
cooperate with each other in filing any necessary applications, reports or other
documents with any Federal or State authorities having jurisdiction with respect
to the transactions contemplated by this
86
<PAGE>
Agreement and in seeking necessary consultation with any favorable action by any
such agencies, authorities or bodies.
Section 5.4 Cooperation After Closing. After the Closing Date, Purchaser and
Seller shall whenever and as often as shall be reasonably required by the other,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered any and all further instruments as may be necessary or expedient to
consummate the transactions provided for in this Agreement.
(a) Future Inventions, Improvements Included with Assignment. This assignment
includes any future inventions and improvements on the assigned invention that
may be made by the inventor. Furthermore, inventor will for a period of ten
years after the assignment cause his (or her) employee (or associates) who are
engaged in research, development, and other inventive works to disclose to
assignee the right to these improvements so that assignee may receive the
improvements that were agreed to be granted to it. Inadvertent failure to comply
with this provision does not constitute a breach of the assignment however if
the inventor exercises due care and diligence.
(b) Cooperation Inventor and Assignee, Purchaser. Inventor must cooperate with
assignee so that assignee may fully enjoy the right, title and interest conveyed
herein. This duty to cooperate includes the prompt execution of all papers
necessary or desirable to perfect the right, title and interest conveyed herein.
It also includes the prompt execution of all petitions, oaths, declarations or
other papers necessary, or desirable for prosecuting the identified applications
and other related matters. This duty also requires prompt assistance and
cooperation in the prosecution or legal proceedings involving the inventions
and/or improvements thereon and the applications and patents thereon.
ARTICLE 6
Conditions to Sale
Section 6.1 Conditions Precedent to Obligations of Purchaser. All obligations of
Purchaser under this Agreement are, at the option of Purchaser, subject to and
shall be conditioned upon the satisfaction on or prior to the Closing Date, of
each of the following additional conditions:
(a) Representations, Warranties and Agreements of Seller. Except for changes
contemplated by this Agreement and changes occurring in the ordinary course of
business, the representations, warranties and agreements made by Seller herein
shall be true in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties have been made or
given on and as of the Closing Date. Seller and all shareholders of Seller shall
have performed in all material respects the obligations, agreements and
covenants undertaken by them herein to be performed at or prior to the Closing
Date.
(b) Payment of the Transfer Taxes. The Seller shall have paid or made provision
for payment of all transfer taxes, sales taxes or other similar taxes, which
become due by reason of the transactions herein provided, if any.
87
<PAGE>
Section 6.2 Conditions Precedent to Obligations of Seller. All obligations of
Seller under this Agreement are subject to and shall be conditioned upon the
satisfaction prior to the Closing Date, of each of the following conditions:
(a) Representations, Warranties and Agreements of Purchaser. The
representations, warranties and agreements made by Purchaser herein shall be
true in all material respects on and as of the Closing Date with the same effect
as though such representations and warranties have been made or given on and as
of the Closing Date, except as affected by transactions contemplated hereby.
Purchaser shall have performed in all material respects the obligations,
agreements and covenants undertaken herein to be performed at or prior to the
Closing Date.
(b) Corporate Authorization. All resolutions and actions necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby by Purchaser, including actions by its
parent corporation, shall have been duly and validly made and taken, and
Purchaser shall have full power and right to consummate the transactions
contemplated hereby.
ARTICLE 7
Tax Treatment
Section 7.1 Cooperation. Seller and Purchaser agree that it is the intention of
this agreement that the acquisition and exchange herein contemplated result in a
tax-free exchange to Seller for purpose of taxation under Section 368,
subsection (a)(2)(C) of the Internal Revenue Code. Seller and Purchaser shall
both account for such transaction, for accounting and reporting purposes, in a
manner which is consistent with this intention.
ARTICLE 8
Termination
Section 8.1 Termination by Mutual Consent. At any time on or prior to the
Closing Date, this Agreement may be terminated by the mutual consent of
Purchaser and Seller without liability on the part of any party. In the event of
the termination of this Agreement by mutual consent, this Agreement shall become
void and have no effect, without any liability on the part of any party or its
directors, officers or shareholders.
Section 8.2 Termination Upon Breach or Default. At any time on or prior to the
Closing Date, if a material default shall be made by a party in the observance
or in the due and timely performance of the covenants herein contained, or if
there shall have been a material breach by a party of any of the representations
and warranties set forth in this Agreement, Purchaser or Seller, as the case may
be, may terminate this Agreement without prejudice to its other rights and
remedies, including such party's right to recover its expenses, costs and other
damages.
Section 8.3 Termination Based Upon Conditions. If the conditions of this
Agreement to be complied with or performed by a party on or before the Closing
Date shall not have been complied with and such noncompliance or nonperformance
shall not have been waived, the party to whom
88
<PAGE>
the benefit of such condition runs may terminate this Agreement without
prejudice to its other rights and remedies, including such party's right to
recover its expenses, costs and other provable damages.
ARTICLE 9
Miscellaneous
Section 9.1 Amendment. This agreement may be amended, modified, or supplemented
in whole or in party only by an instrument in writing executed by both Purchaser
and Seller.
Section 9.2 Assignment. The parties agree that neither this Agreement nor any
rights created hereby shall be assignable by any party without the prior written
consent of the other party.
Section 9.3 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered to be an original instrument.
Section 9.5 Expenses. Seller and Purchaser shall each bear the respective
expenses incurred by them in connection with the negotiation, execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
Section 9.6 Entire Agreement. This Agreement and the Employment Agreement
contains the entire agreement between the Purchaser and Seller with respect to
the sale of the Purchased Assets and related transactions and supersedes all
prior arrangements or understandings with respect thereto.
Section 9.7 Descriptive Headings. The descriptive headings are used for
convenience of reference only and shall not control or affect the meaning or
construction of any provision of this Agreement.
Section 9.8. Notices. All notices or other communications that are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
IF TO PURCHASER: Garland E. Harris, CEO
Global Online Exchange, Inc.
1207 Hampton Blvd.
North Lauderdale, FL 33608
IF TO SELLER: Harold Rice
6320 Rockhill Road
Kansas City, Missouri 64131
Section 9.9 Specific Performance. Seller acknowledges that the Purchased Assets
are unique and that if Seller fails to consummate the transactions contemplated
by this Agreement, such
89
<PAGE>
failure will cause irreparable harm to Purchaser for which there will be no
adequate remedy at law. Purchaser shall be entitled, in addition to its other
remedies at law, to specific performance of this Agreement if Seller, without
just cause, refuses to consummate the transactions contemplated by this
Agreement.
Section 9.10 Survival of Covenants, Representations, Warranties and
Indemnification. All covenants, representations and warranties made by any party
to this Agreement shall be deemed made for the purpose of inducing the other
parties to enter into this Agreement. The representations, warranties and
covenants contained in this Agreement shall, except as otherwise provided in
this Agreement, survive the Closing indefinitely. The provisions of Article 7,
and any other sections which by their nature require subsequent performance,
shall survive the Closing until such time as their performance has been
satisfactorily completed. The covenants, representations and warranties of both
Seller and Purchaser are made only to and for the benefit of the other party to
this Agreement and shall not create or vest rights in other persons.
Section 9.11. Controlling Law. This Agreement shall be governed by and construed
pursuant to the laws of the State of Florida.
Section 9.12 Closing Date. Unless there is a provision herein to the contrary,
the Closing Date hereunder shall be the effective date of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement, consisting of 6
pages, including this page, to be executed by their authorized officers on the
date stated above.
PURCHASER
Global Online Exchange, Inc. Attest:
By: /s/ Garland E. Harris By: /s/ Rhonda Pruitt
Garland E. Harris
Chief Executive Officer
SELLER
Harold A. Rice
Barter Accounting Software Business Attest
By: /s/ Harold A. Rice By: /s/
Harold A. Rice as Sole Proprietor
90
(v) Web Advertising Sales Agreement between Electronic Business Network, Inc.and
Flycast Communications Corporation dated June 13,1999.
Company Name ("Affiliate") Stockdot.net
Primary Site(s) URL(s) www.stockdoc.net
Contact Person(s) Name Johanna Talifero
Phone 350-715-0135
E-mail [email protected]
FLYCAST NETWORK
Web Advertising Sales Agreement
This Agreement, dated June 13, 1999, describes the entire terms and
conditions for the sale of web advertising impressions on the Flycast
Network between Flycast Communications Corporation ("Flycast") and
stockdot.net (hereinafter "Affiliate").
Section 1.0 Definitions
1.1 Ad Spaces. The web page section(s) on Affiliate's web site registered
with Flycast that generate Impressions.
1.2 Advertisers. Customers who buy Impressions on the Flycast Network.
1.3 Affiliates. Web sites that register Ad Spaces for sale on the Flycast
Network.
1.4 Flycast. Flycast Communications Corporation, a California corporation.
1.5 Flycast Ad Management System. The tools and services provided by
Flycast to manage web advertising campaigns, including AdAgent(TM),
AdReporter(TM), SiteRegistry(TM), and SiteReporter(TM).
1.6 Flycast Network(TM). The network of web sites on which Advertisers can
purchase Impressions.
1.7 Impressions. Web advertising impressions sold or made available for
sale over the Flycast Network.
1.8 SiteRegistry(TM). The HTML form(s) on Flycast's web site used by
Affiliates to register their Ad Spaces with the Flycast Network, and to
set and adjust status information, and the terms and conditions of
membership with Flycast.
Section 2.0 Sale of Impressions
2.1 General.
Affiliate agrees to make Impressions available for sale on the Flycast
Network in accordance with the terms set forth in the Flycast Site
Registry.
2.2 Fulfillment.
Affiliate understands that Advertisers use information about available
Impressions on Affiliate's site to plan their Web media buys. Accordingly,
Affiliate agrees to provide all the Impressions reflected int eh Site
Registry for sale over the Flycast Network.
2.3 Payment to Affiliate.
91
<PAGE>
Flycast will pay Affiliate sixty percent (60%) of the Net Revenues
generated from the sale of Affiliate's Impressions through the Flycast
Network. For this purpose, "Net Revenues" meaning the revenues invoiced
and collected by Flycast, net of all agency commissions or similar charges
sold or credited in connection with the sale of the Impressions. If the
performance of ads placed on affiliate site consistently falls below
Flycast's network average for a period of two months, Flycast may
establish an over delivery schedule to bring affiliate up to standards.
2.4 Payment Terms.
Flycast will remit a monthly payment to Affiliate sixty (60) days after
the end of the month in which Impressions are sold through the Flycast
Network. For example, Affiliate will be paid by March 30 for ads placed
during the preceding month of January. A Flycast payment report
summarizing the Affiliate's activity will accompany payment for the month.
Flycast will accrue and hold monthly payments due to Affiliate until the
aggregate amount due exceeds $200 (or such Affiliate will not be involved
on buys of less than 52 CPM.
2.5 Discrepancies.
Affiliate has thirty (30) days from the receipt of payment to report any
discrepancy or to question the payment. Flycast and Affiliate will use
their best efforts to resolve any discrepancy or question quickly and
fairly. In case of a discrepancy between any report generated by Flycast's
SiteReporter (Flycast's online reporting application) and Flycast's final
billing information, the billing information will control.
2.6 Ad Blocking.
Flycast provides Affiliate an automated procedure for blocking selected
advertisers or advertisements from appearing on their Ad Spaces. Affiliate
is responsible for utilizing Flycast's ad blocking system in accordance
with the procedures set forth on Flycast's web site. Affiliate
acknowledges that Flycast's blocking system provides adequate protection
against appearance of unwanted or inappropriate advertisements or
advertisers on Affiliate's Ad Spaces. AFFILIATE AGREES THAT NEITHER
FLYCAST OR ANY ADVERTISER SHALL BE LIABLE FOR THE CONTENT OF ANY
ADVERTISEMENTS DELIVERED BY FLYCAST ON AFFILIATE'S AD SPACES.
2.7 Minimum Impressions; Term.
Affiliate agrees to make a minimum of 100,000 and an estimated 50,000,000
Impressions available for sale per month on the Flycast Network for at
least three (3) months from the date hereof. This Agreement will
automatically renew at the end of the initial term and will remain in
effect unless terminated by either party with 30 day's notice. Either
party may, at its sole option, terminate this Agreement in its entirety in
the event that (i) the other party breaches any of its material
obligations, representations or warranties under this Agreement and fails
to cure such breach within thirty (30) days of receiving notice thereof,
(ii) the other party is acquired by a third party that would reasonably be
determined to be involved in substantial business activities that are
directly competitive with the business of the terminating party, or (iii)
the other party initiates insolvency, receivership or bankruptcy
proceeding or any other proceedings for the settlement of debt, which are
not dismissed or resolved in such other party's favor within sixty (60)
days thereafter.
2.9 Promotional Impressions.
92
<PAGE>
Affiliate agrees to provide up to five percent (5%) of its delivered
Impressions to Flycast free of charge for use in collecting demographic
dates and for promoting the Affiliate and the Flycast Network.
2.9.1 Rights upon Termination.
On termination of this Agreement, all of Affiliate's rights to conduct the
activities set forth in this Agreement shall case. If this Agreement is
terminated for any reason, neither party will be liable to the other
because of such termination for damages for the loss of prospective
profits, anticipated sales, goodwill, or for expenditures, investments or
commitments made in connection with this Agreement. The termination of
this Agreement shall not relieve either party from its liability to pay
any fees that have accrued to the other party prior to the date of
termination. The parties' rights and obligations under Sections 3.6 to 3.8
shall survive expiration or termination of this Agreement.
Section 3.0 Standard Terms and Conditions.
3.1 Programming.
Affiliate will affect all necessary HTML changes with respect to the Ad
Spaces as described in Flycast SiteRegistry to enable Flycast to deliver
Impressions to Advertisers in accordance with this Agreement.
3.3 Quality Assurance.
Affiliate will maintain its web site and Ad Spaces in accordance with the
highest industry standards. Affiliate acknowledges that Flycast has no
responsibility to review the content of its web site(s) or Ad Spaces
without limiting the foregoing. Affiliate represents and warrants that:
a. Content Restrictions. Affiliate's web site(s) and Ad Spaces shall
not contain, or contain links to, content promoting the use of
alcohol, tobacco or illegal substances, nudity, sex, pornography, or
adult-oriented contents expletives or inappropriate language;
content promoting illegal activity, racism, hate, "spam", mail
fraud, pyramid schemes, or investment opportunities or advice not
permitted under law; content that is libelous or deemed
inappropriate by Flycast in its sole discretion.
b. Ad Spaces Location - Limitation. Affiliate agrees to place
Flycast Ad Spaces in a conspicuous location on pages on its web
site(s), at the top of the web page, or on the top one-third of an
expanded view of the page on a 640x480 monitor. In addition,
Affiliate agrees that it shall not display more than one 468x60
advertisement (whether or not provided by Flycast) on any single
page on which a Flycast Ad Space appears. Other smaller ad spaces
may be acceptable given that they do not deteriorate the integrity
of the page.
c. Valid Impressions. Affiliate shall not run "rodents" or "spiders"
against web site(s) or use any means to artificially increase the
Impressions available with respect to any Ad Spaces.
d. Refresh Pages. Affiliate may utilize "refresh banner rotations"
only for pages that have chat, video broadcast, audio broadcast, or
active gaming
93
<PAGE>
content. Such ads must not be refreshed more frequently than every
five (5) minutes.
e. Co-operation. Affiliate will cooperate with any reasonable
Flycast efforts or initiatives relating to auditing sites on the
Flycast Network, obtaining enhanced demographic information about
visitors to Affiliate's site(s), or other activity designed to
increase the value of the Flycast Network.
Affiliate understands and agrees that a violation of this Section 3.2 may
result in the suspension or termination of active advertising campaigns
running on Affiliate's Ad Spaces, removal of Affiliate's web site(s) from
the Flycast Network or any other action deemed necessary in Flycast's sole
discretion.
3.3 Proprietary Rights.
Affiliate agrees that it shall not have, nor will it claim, any right,
title or interest in any advertising content delivered by Flycast (other
than Affiliate's own advertising content). Affiliate understands that
Flycast grants Affiliate no license to Flycast advertising content, the
name "Flycast" or any derivative thereof, or any other trademarks, logos,
copyrights, patents, trade secrets, or other intellectual property rights
which are owned or controlled by Flycast and made available to Affiliate
in any manner.
3.4 Public Relations.
Flycast retains the right to refer to Affiliate in its web site, press
release and marketing collateral (per Affiliate's review and approval).
Affiliate agrees to provide to Flycast review and approval of all Flycast
mentions in press releases and marketing collateral.
3.5 Representation and Warranties.
Each party represents and warrants to the other party that such party has
the full corporate right, power and authority to enter into this Agreement
and to perform the acts required of it hereunder, and the execution of
this Agreement and the performance by such party of its obligations and
duties hereunder, do not and will not violate any agreement to which such
party is a party or by which it is otherwise bound; and when executed and
delivered by such party, this Agreement will constitute the legal, valid
and binding obligation of such party, enforceable against such party in
accordance with its term. Such party acknowledges that the other party
makes no representations, warranties or agreements (written or oral)
related to the subject matter except as expressly provided for in this
Agreement.
3.6 Limitation of Liability
The parties agree that: (i) Flycast exercises no control and has no
responsibility whatsoever over the content or quality of any advertising
materials or any Ad Spaces, (ii) use of Flycast's services is at
Affiliate's own risk, and (iii) this is not a contract for the sale of
goods and, therefore, is not subject to the Uniform Commercial Code,
EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE SERVICES ARE PROVIDED "AS IS" AND
"AS AVAILABLE" AND FLYCAST DISCLAIMS ALL WARRANTIES OF ANY KIND, WHETHER
EXPRESS OR IMPLIED, FOR THE ADVERTISING SERVICES, INCLUDING
94
<PAGE>
BUT NOT LIMITED TO THE IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING
OR COURSE OF
loss, cost, damage, or expense (including attorney's fees) incurred by Affiliate
or any advertiser in connection with an advertisers or Affiliates participation
in the Flycast Network Flycast makes no guarantees with respect to the services
rendered under this Agreement, and neither Flycast nor any of its officers,
directors, agents, Flycast Network members or sponsors shall have any liability
as a result of Flycast's performance of this Agreement, including, without
limitation, Internet disruption, interrupted service, errors or delays in
providing the service, levels of use or impressions, loss of data, failure to
provide delays in providing the service, levels of use or impressions, loss of
data, failure to provide requested subject categories, failure to meet Affiliate
or advertiser's requirements, or other injury, damage, or disruption to
advertiser or advertiser's web site. Without limiting the foregoing, Flycast's
entire liability under, for breach of, arising under, or related to this
Agreement or the services to be provided hereunder (whether in tort, contract or
any other theory), and Affiliate's sole remedy, is for Flycast, if possible, to
provide the services agreed hereunder or refund any amounts prepaid by Affiliate
related to the services giving rise to such liability, provided such refund
shall not exceed the aggregate charges for services rendered for the prior six
months under this Agreement that gave rise to such liability. In no event shall
Flycast be liable for indirect, exemplary, special, incidental or consequential
damages, or costs, including but nor limited to, any lost profits or revenues,
loss or use or goodwill, or any third party claims, even if such party has been
advised of the possibility of such damages
3.7. Nondisclosure and Confidential Information
Affiliate shall not disclose any of the terms and conditions of this Agreement
to any third party without the express written consent of Flycast Neither party
shall disclose to any third party the Confidential Information of the other
party and shall not use any such Confidential Information for any purpose other
than the purpose for which it was originally disclosed to the receiving party.
"Confidential Information" shall not include information that (i) is known to
the receiving party at the time it receives Confidential information; (ii) has
become publicly known through no wrongful act of the receiving party; (iii) has
been rightfully received by the receiving party from a third party authorized to
make such communication without restriction; (iv) has been approved for release
by written authorization of the disclosing party; or (v) is required by law to
be disclosed.
3 8. Indemnifications
Affiliate, at its own expense, shall indemnify, defend and hold Flycast and its
officers, directors, employees, agents, distributors and licensees harmless from
and against any judgments, losses, deficiencies, damages, liabilities, costs and
expenses (including reasonable attorneys' fees and expenses) incurred in
connection with claims arising out of publication of any content or information
published by Affiliate hereunder (including without limitation, any claim of
trademark or copyright infringement, liable, defamation or breach of
confidentiality) or any product or service related to such content or
information or any breach of a third party contract
3.9. Miscellaneous
a. Independent Contractors The parties to this Agreement are independent
contractors Neither party is an agent or partner of the other party. Neither
party shall have any right, power or authority to enter into any agreement for
or on behalf of, or under any obligation or liability of, or to otherwise bind,
the other party This Agreement shall not be interrupted or construed to create
an association, agency, joint venture or partnership between the parties or to
impose any liability attributable to such a relationship upon either party
b. Entire Agreement. This Agreement sets forth the entire Agreement between the
parties and supersedes prior proposals, agreements and representations between
the parties, whether written or oral, regarding the subject matter contained
herein. This Agreement may be changed only by mutual agreement of the parties in
writing This Agreement may be executed in any number of counterparts, each of
which shall be an original and all of which shall be an original and all of
which shall constitute together but one and the same document
c. Assignment. Affiliate may not assign or otherwise transfer, whether
voluntarily or by operation of law, any rights, or obligations under this
Agreement without the prior written consent of Flycast.
d. Governing Law/Notice. This Agreement shall be construed and interpreted
according to the laws of the State of California without reference to conflicts
of law provisions. The parties hereby consent to the exclusive jurisdiction of
the courts of San Francisco County, California. All written notice between the
parties shall be deemed to have been given if personally delivered, sent by
courier or certified, registered or certified airmail) to the address set forth
above (or as otherwise directed in writing) Unless otherwise provided herein,
all notices shall be deemed to have been duly given on: (a) the date of receipt
(or if delivery is refused, the date of such refused) if delivered personally,
by electronic mail or by courier, or (b) three (3) days after the date of
posting if transmitted by mail.
e. Waiver/Severability. The waiver by either party of a breach or right under
this Agreement will not constitute a waiver of any other or subsequent breach of
right. If any provision of this Agreement is found to be invalid or
unenforceable by a court of competent jurisdiction, such provision shall be
severed from the remainder of this Agreement, which will remain in full force
and effect.
f. Force Majeure. Flycast shall not be in default or otherwise liable for any
delay in or failure of its performance under this Agreement where such delay or
failure of its performance under this Agreement arises by reason of any Act of
God, or any government or any governmental body, acts of war, the elements,
strikes or labor disputes, or other cause beyond the control of Flycast.
Flycast Communications Corporation
By: /s/ Jeff Lehman
----------------------------------------
Title: Media Sales
Flycast Communications Corporation
Affiliate
By /s/ Johanna Talifero
----------------------------------------
Title: Sales Associate
(Company Name: Electronic Business Network)
95
(27)(vi) Network Affiliation Agreement between
Electronic Business Network, Inc. and
24/7 Media, Inc. dated July 27, 1999.
24/7 MEDIA INC.
NETWORK AFFILIATION
AGREEMENT
WHEREAS, the undersigned (hereinafter the "Network Affiliate") is
the operator and owner of the Internet Web site(s) (the "Web Site") specified on
the signature pages hereto:
WHEREAS, 24/7 Media, Inc. ("24/7"), a Delaware corporation with an
address at 1250 Broadway, 38th Floor, New York, NY 10001, operates a network of
Internet Web sites (the "24/7 Network") for which it solicits advertisers,
advertising agencies, buying services or others ("Advertisers") regarding the
placement of advertising banners and similar devices and sponsorships
("Advertising") for display on pages, screens, an other segments or spaces on
Web site reasonable suitable for the display of advertising and to which the
Tags (as defined in Section 2(A) below) can be affixed as provided herein (the
"Pages):
WHEREAS, Network Affiliate and 24/7 wish to include the Web Site in
the 24/7 Network;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is agreed as follows:
1. Affiliation.
The Network Affiliate hereby grants to 24/7 the worldwide exclusive right
to sell all Advertising on the Web Site.
2. Obligations of 24/7.
In furtherance of the foregoing, 24/7 covenants and agrees.
A. To provide the Network Affiliate, during the term of this Agreement
(the "Term") and only for use in the performance of this Agreement, with
unique tags in HTML/Java or other appropriate languages (the "Tabs") which
shall be affixed appropriately by Network Affiliate to the Web Site's
Pages to enable 24/7 to serve Advertising to those Pages;
96
<PAGE>
B. To utilize its best efforts to sell to Advertisers, Advertising on the
Web Site's pages, (including sales of the Web Site as a single site,
through multi-site packages and through the 24/7 Network package, at such
prices as 24/7 shall deem appropriate);
C. To serve Advertising to the Web Site's Pages;
D. To provide the Network Affiliate with notice, via on-line posting, of
new Advertising that has been solicited by 24/7 to be displayed on the Web
Site's Pages, and to use its best efforts to honor any decision by Network
Affiliate to decline any Advertising, in accordance with the provisions in
3(D) below;
E. To provide the Network Affiliate with real-time access to records that
will allow it to monitor the volume of paid Advertising delivered to the
Web Site's Pages and the revenue produced (subject to billing corrections
and adjustments) thereby; all such records, including data, statistical
information or other traffic analysis, produced or provided by 24/7 shall
be the joint property of 24/7 and Network Affiliate;
F. To deliver to the Network Affiliate a monthly statement showing
revenues earned by Network Affiliate during the calendar month and any
sum(s) due the Network Affiliate on account thereof pursuant to Section 4
hereof; and
G. To maintain suitable and qualified personnel in administrative, sales
and technical positions necessary for 24/7 to perform effectively the
terms of this Agreement.
3. Obligations of Network Affiliate.
The Network Affiliate covenants and agrees:
A. To use its best efforts to continue and maintain the Web Site and the
Web Site's Pages in a manner consistent with the intent and purpose of the Web
Site;
B. To insert the Tags on each of the Web Site's Pages an only on such
Pages in such a manner as to assume that the Advertising to be affixed to said
Tag is fully and clearly visible on the first Web Site page viewed when that
Page is viewed at a 640 X 480 pixel resolution;
C. To insert a button with the 24/7 logo on the Web Site's Home Page
directing potential advertisers to the 24/7 web site;
D. To notify 24/7 within one business day form the time of notice of any
new Advertising is given of the Network Affiliate's rejection of the new
Advertising shall be deemed acceptance thereof, until such time as Network
Affiliate notifies 24/7 of Network Affiliate's rejection thereof at which time
24/7 will use its best efforts to remove the Advertising;
97
<PAGE>
E. To furnish 24/7 with all subscribership, viewership, inventory, and
usage reports, reviews and audience studies, deliveries, census requirements,
and any other information regarding the Web Site and the Web Site's Pages as it
is reasonably available to the Network Affiliate and appropriate for use by 24/7
for the sale of Advertising; and
F. Not to engage, contract with, license or permit any person, firm or
entity (including the Network Affiliate and its employees) other than 24/7 and
its employees to sell, or represent the Network Affiliate for the sale of,
Advertising on the Web Site and to refer all advertising inquiries to 24/7.
4. Payments.
A. Advertisers shall be directed to pay 24/7 all cash and othe
rconsideration generated from the sale of Advertising by 24/7 and a percentage
shall be retained by 24/7 for the duration of the sponsorship regardless of the
date of termination of this Agreemnt). Within 45 days after the end of each
calendar month, 24/7 shall pay to the Ntwork Affiliate the Network Affiliate's
entire share of all revenue generated during that month, reduced only by any
advertising agency commissions retained by the agency or paid by 24/7, and by
24/7's commission for the sale of Advetising which shall be determined in
accordance with the following chart:
- - - - --------------------------------------------------------------------------------
Number of Impressions Percentage Retained by 24/7
Delivered in Proceeding Month for Current Month
- - - - --------------------------------------------------------------------------------
999,999 to 1,999,999 55%
- - - - --------------------------------------------------------------------------------
2,000,000 to 2,999,999 50%
- - - - --------------------------------------------------------------------------------
3,000,000 to 4,999,999 45%
- - - - --------------------------------------------------------------------------------
5,000,000 to 14,999,999 40%
- - - - --------------------------------------------------------------------------------
15,000,000+ 35%
- - - - --------------------------------------------------------------------------------
Network Affiliate represents and warrants that the number of impressions served
int he month preceeding the Effective Date was $15,000,000,and thus, subject to
verification of monthly ad immpressions, the initial percentage to be retained
by 24/7 is 35%. The percentage retained by 24/7 shall be lowered effective upon
network Affiliate's notifying 24/7 that the number of impressions delivered in
the preceeding month requires the percentage retain to be adjusted.
B. The Netowrk Affiliate may elect to have 24/7 serve promotional or
barter advertisements not sold by 24/7, for which Network Affililate wil lpay
24/7 a serving fee of $2.50 cost per thousand ("CPM"); such promotional and
barter advertisements shall not exceed thirty percent (30%) of the Pages.
98
<PAGE>
C. In the event any Advertiser remits any payment for Advertising sold by
24/7 directly to the Network Affiliate rather than to 24/7, the Network
Affiliate agrees to make prompt payment to 24/7 of any and all such payments.
D. Network Affiliate will be obligated to compensate 24/7 Media prior to
termination date.
E. Network Affiliate acknowledges that 24/7 has an ownership interest in
"clicktobuy.com" e-comerce service (the "Service") and that the Service includes
the placement of banners on the 244/7 Network, generally on a "cost per
transaction" basis an on terms no more favorable to clicktobuy.com than would be
made available to a party not affiliated with 24/7.
F. Network Affiliate also acknowledges that 24/7 owns and operates the
Profile database of demographic profiles (the "Database"). Network Affiliate
understands and agrees that the Payment in respect of Advertising sold that
employs the Database shall be calculated by subtracting from gross revenue a fee
for use of the Database, which fee shall be disclosed to Network Affiliate prior
to implementation and shall reasonably reflect 24/7's cost of developing and
operating the Database. Network Affiliate shall have the option not to accept
Advertising that the employs the Database.
5. Intellectual Property. All hardware, software, programs, codes, trade names,
technology, intellectual property, licenses, patents, trademarks, copyrights,
trade secrets, knowhow, and processes (collectively, the "24/7 Technology") used
by 24/7 under this Agreement shall remain the sole property of Network
Affiliate. 24/7 shall have no rights, title or interest in the Network Affiliate
Technology. Upon the expiration or termination of this Agreement, each party
shall promptly return all information, documents, manuals and other materials
belonging to the other party except as otherwise provided in this Agreement.
6. Confidentiality. 24/7 and Network Affiliate covenant to each other that
neither party shall disclose to any third party (other than its employees and
directors, in their capacity as such, and the employees and directors of any
affiliate on a need to know basis so long as they are bound by the terms of this
Agreement) any information regarding the terms and provisions of this Agreement
or any non-public confidential information which has been identified as such by
the other party hereto except (I) to the extent necessary to comply with any law
or valid order of a court or competent jurisdiction (or any regulatory or
administrative tribunal), in which event the party so complying shall so notify
the others as promptly as practicable (and, if possible, prior to making any
disclosure) and shall seek confidential treatment of such information, if
available; (ii) as part of its normal reporting or review procedure to its
auditors or its attorneys, as the case may be, so long as they are notified of
the provisions of this Agreement; (iii) in order to enforce its rights pursuant
to this Agreement; (iv) in connection with any filing with any governmental body
or as otherwise required by law, including the federal securities laws and any
applicable rules and regulations of any stock exchange or quotation system; and
(v) in a confidential disclosure made in connection with a contemplated
financing, merger, consolidation or sale of capital stock of 24/7 or the Network
Affiliate. Information which is or should be reasonably understood to be
confidential
99
<PAGE>
or proprietary includes, but is not limited to, information about the 24/7
Network, sales, cost and other unpublished financial information, product and
business plans, projections, marketing data, and sponsors but shall not include
information (a) already lawfully known to or independently developed by a party,
(b) disclosed in published materials, (c) generally known to the public, (d)
lawfully obtained from any third party or (e) required to be disclosed by law.
7. Term.
A. The term of this Agreement (the "Term") shall commence on the Effective
Date and shall continue for at least one year from the Effective Date. Either
party may terminate the Agreement by giving notice no earlier than eight months
after the Effective Date. Termination will be effective four (4) months after
the date on which written notice is given, as determined under the provisions of
Section 13 below, to the other party.
B. Notwithstanding Section A above, this Agreement may be terminated
by either party on 60 days' prior written notice to the other party upon the
occurrence of a material breach by the other party of any covenant, duty or
undertaking herein, which material breach continues without cure for a period of
30 days after written notice of such breach from the non-breaching party to the
breaching party.
C. Notwithstanding Section A or B above, this Agreement may be
terminated by 24/7 on written notice to the Network Affiliate upon the
occurrence of a material breach by network Affiliate of its covenants under
Section 8 of this Agreement, which material breach continues without cure for a
period of more than 48 hours after written notice of such breach from 24/7 to
network Affiliate of such breach, or which material breach occurs on more than
two occasions.
D. Notwithstanding Section A or B above, this Agreement may be
terminated by 24/7 on 30 days' prior written notice to the Network Affiliate if
the number of Impressions in any three consecutive months is less than one
million or if the average click through rate for any three-month period is less
than 0.25%.
8. Content of Web Site. Network Affiliate covenants and agrees not to include or
provide via the Web Site or the Web Site's Pages any material that is or may be
considered: (i) libelous, pornographic, obscene, or defamatory under any
federal or state law; (ii) an infringement of any third party's intellectual
property rights (including copyright, patent, trademark, trade secret or other
proprietary rights); or (iii) an infringement on any third party's rights of
publicity or privacy. Network Affiliate further covenants and agrees, with
respect to the operation of its Web Site and its Pages, to comply with all laws,
statutes, ordinances, and regulations.
9. Indemnification. Network Affiliate shall indemnify and hold harmless 24/7,
its advertisers and other suppliers and any related third parties, against and
in respect of any and all third party claims, suits, actions, proceeding (formal
and informal), investigations, judgments, deficiencies, damages, settlements,
liabilities, and legal and other expenses (including reasonable
100
<PAGE>
legal fees and expenses of attorneys chosen by 24/7) as and when incurred,
arising out of or based upon any act or omission or alleged act or alleged
omission by Network Affiliate in connection with the acceptance of, or the
performance or non-performance by Network Affiliate of any of its duties under
this Agreement or arising from the breach by Network Affiliate of its
warranties, representations or covenants contained in this Agreement. 24/7 shall
indemnify and hold harmless the Network Affiliate, against and in respect of any
and all third party claims, suits, actions, proceedings (formal and informal),
investigations, judgments, deficiencies, damages, settlements, liabilities and
legal and other expenses (including reasonable legal fees and expenses of
attorneys chosen by Network Affiliate) as and when incurred, arising out of or
based upon any act or omission or alleged act or alleged omission by 24/7 in
connection with the acceptance of, or the performance or non-performance by 24/7
of any of its duties under this Agreement or arising from the breach by 24/7 of
its warranties, representations or covenants contained in this Agreement.
10. No Poaching. Network Affiliate agrees that, during the Term and for a period
of one year from the end of the Term, neither it nor its affiliates will solicit
or recruit the services of any 24/7 employees, or hire any such employees.
11. No Waiver. This Agreement shall not be waived, modified, assigned or
transferred except by a written consent to that effect signed by Network
Affiliate and 24/7. Network Affiliate agrees that if it assigns or transfers
this Agreement, it shall cause such successive assignee, or transferee to assume
all of the rights and obligations hereunder. Any assignment, transfer, or
assumption shall not relieve the Network Affiliate of liability hereunder.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and performed therein, without regard to principles of conflicts of laws.
13. Notices. All notices required or permitted to be given hereunder shall be in
writing and either hand-delivered, telecopied, mailed by certified first class
mail, postage prepaid, or sent via electronic mail to the other party or parties
hereto at the address(es) set forth below. A notice shall be deemed given when
delivered personally, when the telecopied notice is transmitted by the sender,
three business days after mailing by certified first class mail, or on the
delivery date if delivered by electronic mail.
14. Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all prior agreements of the Parties with respect to the transactions
set forth herein and, except as otherwise expressly provided herein, is not
intended to confer upon any other person any rights or remedies hereunder.
15. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same document.
16. Force Majeure. Neither party shall be held liable or responsible to the
other party nor be deemed to have defaulted under or breached this Agreement for
failure or delay in fulfilling
101
<PAGE>
or performing any term of this Agreement when such failure or delay is caused by
or results from causes beyond the reasonable control of the affected party,
including but not limited to fire, floods, failure of communications systems or
networks, embargoes, war, acts of war (whether war is declared or not),
insurrections, riots, civil commotion, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other party; provided, however, that the party so
affected shall use reasonable commercial efforts to avoid or remove such causes
of nonperformance, and shall continue performance hereunder with reasonable
dispatch whenever such causes are removed. Either party shall provide the other
party with prompt written notice of any delay or failure to perform that occurs
by reason of force majeure. The parties shall mutually seek a resolution of the
delay or the failure to perform as noted above.
17. Severability. Should one or more provisions of this Agreement be or become
invalid, the parties hereto shall substitute, by mutual consent, valid
provisions for such invalid provisions which valid provisions in their economic
effect are sufficiently similar to the invalid provisions that it can be
reasonably assumed that the parties would have entered into this Agreement with
such valid provisions. In case such valid provisions cannot be agreed upon, the
invalidity of one or several provisions of this Agreement shall not affect the
validity of this Agreement as a whole, unless the invalid provisions are of such
essential importance to this Agreement that it is to be reasonably assumed that
the parties would not have entered into this Agreement without the invalid
provision.
18. Dispute Resolution. Any controversy or claim arising out of or relating to
the Agreement, or the breach thereof, shall be settled exclusively by
arbitration. Such arbitration shall be conducted before a single arbitrator in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. If arbitration is commenced by 24/7, it shall take
place in the city in the continental United States in which the principal U.S.A.
corporate offices of Network Affiliate are located. If Network Affiliate has no
corporate offices in the U.S.A. or if arbitration is commenced by Network
Affiliate, then arbitration shall take place in New York, New York. Judgment may
be entered on the arbitrator's award in any court having jurisdiction, and the
parties irrevocably consent to the jurisdiction of such court for that purpose.
The parties waive personal service in connection with any such arbitration; any
process or other papers under this provision may be served outside the home
state of Network Affiliate or New York by registered mail, return receipt
requested, or by personal service, provided a reasonable time for appearance or
response is allowed. All decisions of the arbitrator shall be final and binding
on the parties. The parties shall equally divide all costs of the American
Arbitration Association and the arbitrator. Each party shall bear its own legal
fees in any dispute. The arbitrator may grant injunctive or other relief.
19. Independent Contractors. 24/7 Media and Network Affiliate shall each act as
independent contractors. Neither party shall exercise control over the
activities and operations of the other party. 24/7 media and Network Affiliate
shall each conduct all of its business in its own name and as it deems fit,
provided it is not in derogation of the other's interests. Neither party shall
engage in any conduct inconsistent with its status as an independent contractor,
have
102
<PAGE>
authority to bind the other with respect to any agreement or other commitment
with any third party, nor enter into any commitment on behalf of the other,
except as expressly provided for by this Agreement.
103
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement this
27th day of July, 1999 (the "Effective Date").
24/7 MEDIA, INC.
By: /S/ Catherine Rocco
-------------------
Name: Catherine Rocco
Title: Director, Business Development
E-mail address: [email protected]
NETWORK AFFILIATE:
Name of Web Site: Capital Publishing
--------------------------
Web Site URL: www.cp-corp.com
------------------------------
Corporate Name of Web Site Owner: Electronic Business Networks, Inc.
Address: 1197 W. Newport Ctr. Dr.
--------------------------------
Address: Deerfield Beach, FL 33442
--------------------------------
By: /S/ Johanna Taufero
--------------------------------
Name: Johanna Taufero
Sales Director
E-mail address: [email protected]
---------------------------
(27)(vii) Employment Agreement between Global Online, Inc. and W. Allen
Cochran, dated February 19, 1999.
This Agreement for Employment is made on the 19th day of February, 1999 by and
between Global Online, Inc. (hereafter referred to as "Employer" or "Company")
and W. Allen Cochran (hereinafter referred to as "Employee").
The Employer shall employ Employee subject to the following terms and
conditions.
1. Employment for the above Employee shall commence on January 15, 1999.
2. The following duties and responsibilities shall be competently performed
by Employee.
President
1. Employee, during the continuance of his employment by the
Company, shall use his best efforts in the selection and supervision of
personnel, the conception, organization, execution and coordination of
operating, merchandising and expansion programs and the application thereto of
progressive
104
<PAGE>
techniques, controls, systems and procedures, as required to improve sales,
reduce expenses and otherwise increase profitability and protect and enhance the
image of the Company in relation to its personnel and the public.
2. Employee, in the fulfillment of such responsibilities and the
performance of such duties, shall be accountable to and be subject to the
direction and control of the Company's Board of Directors.
3. Employee shall devote as much of his time and attention and
energies and services as is reasonably needed for the fulfillment of such
responsibilities and performance of such duteis, serve on such committees to
which the Company may appoint him from time to time, exert his best efforts to
improve the business and condition of the Company.
In addition to the duties stated above, the Employee shall perform such further
and other duties required by the Employer.
3. The Employee shall work such hours as a required by the Employer for the
employee to competently perform the duties of his position. The Employee shall
use his or her best efforts on behalf of the Employer.
4. The Employee shall comply with all stated standards of performance, policies,
rules and regulations. The Employee shall also comply with such future Employer
policies, rules, regulations, performance standards and manuals as may be
published or amended from time to time.
5. Employment under this Agreement shall commence on February 19, 1999 and shall
continue undisturbed unles terminated prior to such time for cause.
6. The Employer shall make payment to the Employee a set amount as compensation
for services rendered. The Employee agrees to accept the sum of $52,000 per
year, payable weekly, in the amount of $1000. In addition to the above
compensation, the Employee will be entitled to the following "fringe benefits":
1. Two weeks paid vacation per year
2. Holidays, personal and sick days as allowed all employees
3. Single person health care insurance plan when available.
4. Industry related dues and subscriptions, $1000.00 annually
5. Automobile expenses of $500.00 monthly
5. Cell phone/pager expense of $100.00 monthly.
7. Company shall provide, pursuant to future employee stock option program,
employee with an option to purchase ten thousand (10,000) shares, for purchase
price of one dollar ($1.00) per share when available. All stock purchased under
this Option shall be adjusted to preserve the value of the bonus in the event of
a stock divident, stock split or reverse stock split, recapitalization, merger,
consolidation, reorganization, cash or property dividend exchange of shares,
repurchase of shares or any other change in the corporate structure of or by the
Company that in any such event materially affects the outstanding shares of
Stock.
8. Company's Board of Directors will evaluate Employee's salary compensation on
or before July 15, 1999 and annually thereafter.
9. This contract of employment may terminate upon the occurrence of any of the
following events: (a) The death of the Employee; (b) The failure of the Employee
to perform his duties satisfactorily after notice or warning thereof; c) for
just cause based upon non-performance of duties by Employer; (d) Economic
reasons
105
<PAGE>
of the Employer which may arise during the term of this Agreement and which may
be beyond the control of the Employer.
10. During the course of his/her employment, the undersigned shall promptly
disclose in writing to the Company all inventions, discoveries, concepts,
developments and innovations, conceived in whole or in party by the undersigned
or through assistance of the undersigned, directly or indirectly. Such shall be
disclosed whether conceived or developed during working hours or not, which (a)
Result from any work performed on behalf of the Company, or pursuant to a
research project for the Company, or (b) Relate in any manner to the existing
business of the Company, or c) Result from the use of the Company's time,
material, employees or facilities.
11. All rights, titles and interests to said inventions, concepts or innovations
are hereby assigned by the undersigned solely and completely to the Company, its
successors and assigns.
12. At the Company's request, the undersigned shall execute specific assignments
to any such invention, concept or innovation and execute, acknowledge and
deliver any additional documents required to obtain letters, patent, trademark
or copyright in any jurisdiction. The undersigned shall also, at the Company's
request and expense, assist in the defense and prosecution of said letters,
patent, trademark or copyright as may be required by the Company. This provision
shall survive termination of employee with the Company.
13. The Employee agrees that upon the termination of employment with said
Employer, that he shall not compete with the business of the Company, its
successors, or its assignees, neither shall he directly or indirectly undertake
or assist in the solicitation of any customer or account of the Employer
existing during the course of his employment with the Employer for a period of
one year or
1. Induce or attempt to persuade any former, current or future employee,
agent, manager, consultant, director or other participant in Company's business
to terminate such employment or other relationship in order to enter into any
relationship with the Employee, any business organization in which the employee
is a participant in any capacity whatsoever, or any other business organization
in competition with Company's business; or
2. Use contracts, proprietary information, trade secrets, confidential
information, customer lists, mailing lists, goodwill or other intangible
property used or useful in connection with the Company's business.
14. This Agreement may not be assigned without prior notice by either party.
Such assignment is subject to the mutual consent and approval of any such
assignment
15. This Agreement constitutes the complete understanding between the parties,
unless amended by a subsequent written instrument signed by the employer and
employee. Any dispute under this contract shall be required to be resolved by
binding arbitration of the parties hereto. Each party shall select one
arbitrator and both arbitrators shall select a third. The arbitration shall be
governed by the rules of the American Arbitration Association then in force and
effect.
W. Allen Cochran Garland E. Harris, CEO
Employee Global Online, Inc.
(27)(viii)
Employment Agreement between JBX Online, Inc. and John Boudreaux, dated January
15, 1999.
106
<PAGE>
This Agreement for Employment is made on the 15th day of January, 1999 by and
between JBX Online, Inc. (hereinafter referred to as "Employer" or "Company")
and John Boudreaux (hereinafter referred to as "Employee").
The Employer shall employ Employee subject to the following terms and
conditions.
1. Employment for the above Employee shall commence on January 15, 1999.
2. The following duties and responsibilities shall be competently performed
by the Employee:
President and Chief Technology Officer
1. Employee, during the continuance of his employment by the Company,
shall use his best efforts in the selection and supervision of personnel, the
conception, organization, execution and coordination of operating merchandising
and expansion programs, and the application thereto of progressive techniques,
controls, systems and procedures, as required to improve sales, reduce expenses
and otherwise increase profitability and protect and enhance the image of the
Company in relation to its personnel and the public.
2. Employee, in the fulfillment of such responsibilities and the
performance of such duties, shall be accountable to and be subject to the
direction and control of the Company's Board of Directors.
3. Employee shall devote as much of his time and attention and energies
and services as is reasonably needed for the fulfillment of such
responsibilities and performance of such duties, serve on such committees to
which the Company may appoint him from time to time, exert his best efforts to
improve the business and condition of the Company.
In addition to the duties stated above, the Employee shall perform such further
and other duties required by the Employer.
3. The Employee shall work such hours as are required by the Employer for the
employee to competently perform the duties of his position. The Employee shall
use his or her best efforts on behalf of the Employer.
4. The Employee shall comply with all stated standards of performance, policies,
rules and regulations. The Employee shall also comply with such future Employer
policies, rules, regulations, performance standards and manuals as may be
published or amended from time to time.
5. Employment under this Agreement shall commence on January 15, 1999 and shall
continue undisturbed unless terminated prior to such time for cause.
6. The Employer shall make payment to the Employee a set amount as compensation
for services rendered. The Employee agrees to accept the sum of $52,000 per
year, payable weekly, in the amount of $1000. In addition to the above
compensation, the Employee will be entitled to the following "fringe benefits".
1. Two weeks paid vacation per year.
2. Holidays, personal and sick days as allowed all employees
3. Single person health care insurance plan when available.
4. Industry related dues and subscriptions, $1000.00 annually
5. Automobile expenses of $500.00 monthly
6. Cellphone/pager expense of $100.00 monthly
107
<PAGE>
7. As further inducement, Company agrees to pay employee one hundred thousand
dollars ($100,000) as follows, four installments of five thousand dollars
($5,000.00), first installment due 2-15-99, second due 3- 15-99, third due
4-15-99, fourth 5-15-99, and eighty thousand dollars ($80,000) in stocks,
warrants, or options at Company's sole discretion, due on or before 01-01-2000.
7. Employee shall be entitled to participate in any Employee Stock Option Plan
that the Company may establish in the future. Such participation shall be on the
same basis as all other executive employees.
8. Company's Board of Directors will evaluate Employee's salary compensation on
or before July 15, 1999 and annually thereafter.
9. This contract of employment may terminate upon the occurrence of any of the
following events: (a) The death of the Employee; (b) The failure of the Employee
to perform his duties satisfactorily after notice or warning thereof; c) for
just cause based upon non-performance of duties by Employer; (d) Economic
reasons of the Employer which may arise during the term of this Agreement and
which may be beyond the control of the Employer.
10. During the course of his/her employment, the undersigned shall promptly
disclose in writing to the Company all inventions, discoveries, concepts,
developments and innovations, conceived in whole or in party by the undersigned
or through assistance of the undersigned, directly or indirectly. Such shall be
disclosed whether conceived or developed during working hours or not, which (a)
Result from any work performed on behalf of the Company, or pursuant to a
research project for the Company, or (b) Relate in any manner to the existing
business of the Company, or c) Result from the use of the Company's time,
material, employees or facilities.
11. All rights, titles and interests to said inventions, concepts or innovations
are hereby assigned by the undersigned solely and completely to the Company, its
successors and assigns.
12. At the Company's request, the undersigned shall execute specific assignments
to any such invention, concept or innovation and execute, acknowledge and
deliver any additional documents required to obtain letters, patent, trademark
or copyright in any jurisdiction. The undersigned shall also, at the Company's
request and expense, assist in the defense and prosecution of said letters,
patent, trademark or copyright as may be required by the Company. This provision
shall survive termination of employee with the Company.
13. The Employee agrees that upon the termination of employment with said
Employer, that he shall not compete with the business of the Company, its
successors, or its assignees, neither shall he directly or indirectly undertake
or assist in the solicitation of any customer or account of the Employer
existing during the course of his employment with the Employer for a period of
one year or
1. Induce or attempt to persuade any former, current or future employee,
agent, manager, consultant, director or other participant in Company's business
to terminate such employment or other relationship in order to enter into any
relationship with the Employee, any business organization in which the employee
is a participant in any capacity whatsoever, or any other business organization
in competition with Company's business; or
2. Use contracts, proprietary information, trade secrets, confidential
information, customer lists, mailing lists, goodwill or other intangible
property used or useful in connection with the Company's business.
14. This Agreement may not be assigned without prior notice by either party.
Such assignment is subject to the mutual consent and approval of any such
assignment
108
<PAGE>
15. This Agreement constitutes the complete understanding between the parties,
unless amended by a subsequent written instrument signed by the employer and
employee. Any dispute under this contract shall be required to be resolved by
binding arbitration or mediation.
/s/ John Boudreaux /s/ Garland E. Harris, CEO
John Boudreaux Garland E. Harris, CEO
Employee JBX Online, Inc.
109
(21) SUBSIDIARIES
<TABLE>
<CAPTION>
- - - - -----------------------------------------------------------------------------------------------
Subsidiary State of Incorporation Names Under Which Subsidiary
- - - - ---------- ---------------------- Does Business
-------------
- - - - -----------------------------------------------------------------------------------------------
<S> <C> <C>
Global Online Exchange, Inc. Florida Global Online Exchange, Inc.
- - - - -----------------------------------------------------------------------------------------------
Capital Publications, Inc. Florida Capital Publications, Inc.
- - - - -----------------------------------------------------------------------------------------------
JBX Online, Inc. Florida JBX Online, Inc.
JBX Designs
- - - - -----------------------------------------------------------------------------------------------
Global Online Exchange One, Inc. Florida International Credit Reserve
Exchange (ICRE)
- - - - -----------------------------------------------------------------------------------------------
Electronic Business Network, Inc. Florida Electronic Business Network, Inc.
Stormcrow Studios
- - - - -----------------------------------------------------------------------------------------------
</TABLE>
110
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S 1998 AUDITED FINANCIALS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1998
<PERIOD-END> Dec-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 674
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 674
<PP&E> 18,273
<DEPRECIATION> (7,378)
<TOTAL-ASSETS> 312,085
<CURRENT-LIABILITIES> 335,961
<BONDS> 0
0
0
<COMMON> 5,745
<OTHER-SE> 95,771
<TOTAL-LIABILITY-AND-EQUITY> 312,085
<SALES> 306,224
<TOTAL-REVENUES> 306,224
<CGS> (21,075)
<TOTAL-COSTS> (21,075)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (8,356)
<INCOME-PRETAX> (175,728)
<INCOME-TAX> 0
<INCOME-CONTINUING> (175,728)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (175,728)
<EPS-BASIC> (.07)
<EPS-DILUTED> (.07)
</TABLE>
