UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
SMALL BUSINESS ISSUERS
UNDER SECTION 12 (b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
Global Entertainment Holdings/Equities, Inc.
(Name of Small Business Issuer in its charter)
Colorado 47-0811483
(State or other jurisdiction (IRS Employer Identification Number)
of incorporation or organization)
6235 South 90th Street, Omaha, NE 68127 (402) 331-3189
(Address of principal executive offices) (Issuer's Telephone Number)
Securities to be registered pursuant to section 12 (b) of the Act:
Title of each class to be registered: Name of each exchange on which each
class is to be registered:
Securities to be registered pursuant to section 12 (g) of the Act:
Title of each class to be registered: Name of each exchange on which each
class is to be registered:
Common stock
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Global Entertainment Holdings/Equities, Inc.
FORM 10-SB
TABLE OF CONTENTS
ITEM 1. DESCRIPTION OF BUSINESS 3
1:1 Forward-looking Statements 3
1:2 Company Description 4
1:3 Products and Services 5
1:4 Growth Strategy 6
1:5 Technology 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 8
2:1 Results of Operations 8
2:2 Liquidity and Capital Resources 10
2:3 Impact of Inflation 10
2:4 Contingencies 10
2:5 Year 2000 Risks 10
ITEM 3. DESCRIPTION OF PROPERTY 12
ITEM 4. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS 12
4:1 Security Ownership of Certain Beneficial Owners and Management 12
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS 13
5:1 Officers and Directors 13
ITEM 6. EXECUTIVE COMPENSATION 15
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 15
ITEM 8. LEGAL PROCEEDINGS 16
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 17
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES 18
ITEM 11. DESCRIPTION OF SECURITIES 19
11:1 Common Stock 19
11:2 Preferred Stock 20
11:3 Dividends 20
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS 21
ITEM 13. FINANCIAL STATEMENTS 22
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 22
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS 22
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ITEM 1. DESCRIPTION OF BUSINESS
1:1 Forward-looking Statements
This Registration Statement includes forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934 (the "Exchange
Act"). These statements are based on management's beliefs and assumptions, and
on information currently available to management. Forward-looking statements
include statements in which words such as "expect," "anticipate," "intend,"
"plan," "believe," "estimate," "consider," or similar expressions are used.
Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties and assumptions. The Company's future results and
stockholder values may differ materially from those expressed in these forward-
looking statements. Many of the factors that will determine these results and
values are beyond the Company's ability to control or predict. In addition, the
Company does not have any intention or obligation to update forward-looking
statements after the effectiveness of this Registration Statement, even if new
information, future events or other circumstances have made them incorrect or
misleading. For these statements, the Company claims the protection of the safe
harbor for forward-looking statements contained in Section 21E of the Exchange
Act.
Global Entertainment Holdings/Equities, Inc. (the "Company") was incorporated in
the State of Colorado as Masadi Resources, Inc. ("Masadi"), on July 10, 1997.
On February 10, 1998, Masadi filed with the State of Colorado, Articles of
Amendment to its Articles of Incorporation and changed its name to International
Beverage Corporation. On August 27, 1998, pursuant to a Merger Agreement,
International Beverage Corporation merged into Global Entertainment Holdings/
Equities, Inc. (Global). International Beverage Corporation became the
surviving corporation and on August 27, 1998, changed its name to Global
Entertainment Holdings/Equities, Inc. which is now known as the Company.
On June 30, 1998, Global, entered into an Agreement of Purchase and Sale whereby
Global acquired 100% of the issued and outstanding shares of Interactive Gaming
and Wagering NV, a Netherlands Antilles Corporation and is currently a wholly
owned subsidiary of the Company. Interactive Gaming and Wagering, was
incorporated in Curacao, Netherlands, Antilles on May 19, 1997, and is engaged
in the business of conception of software programs for the gaming and wagering
industry.
Masadi's purpose for incorporation was to pursue its business activity in the
oil and gas exploration and production business within the geographical
boundaries of the North American Continent with emphasis on the Continental
United States. On November 15, 1997, Masadi's shareholders voted to change its
business direction and pursue opportunities in the Beverage Industry and on
February 10, 1998, changed its name to International Beverage Corporation.
Pursuant to the change in business direction, International Beverage Corporation
entered into a Purchase and Sale Agreement with Beverage Source Worldwide, Inc.
whereby Beverage Source Worldwide, Inc. became a wholly owned subsidiary. The
Purchase and Sale Agreement with Beverage Source Worldwide, Inc. was
subsequently rescinded for non-performance by International Beverage Corporation
and Beverage Source Worldwide, Inc.
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International Beverage Corporation began trading on the OTC Bulletin Board on
March 18, 1998, under the symbol "IBVC". The Company, to better reflect its
name change to Global Entertainment Holdings/Equities, Inc., changed its
trading symbol on September 9, 1998, to "GAMM".
1:2 Company Description
The Company's stock is presently traded on the Over The Counter Bulletin Board
under the trading symbol "GAMM". The Company is a holding company that
concentrates its efforts in the area of Internet related companies, with special
attention to the online gaming software sector. The Company provides financial
advisory services, including; mergers and acquisitions, capital investment and
general investment banking services to emerging Internet related companies.
Currently, the Company owns 100% of the issued and outstanding stock of
Interactive Gaming and Wagering (IGW) and as of the September 20, 1999, acquired
100% of the issued and outstanding stock of Prevail Online, Inc. a Colorado
Corporation with principal offices in San Francisco, CA.
IGW is the Company's wholly owned subsidiary and is engaged in the development,
licensing and hosting of proprietary Internet gaming software. IGW's corporate
Website is www.interactive-gaming.com. IGW offers a turnkey service solution
to its software licensees, including online casino and sportsbook software, 800
call center sportsbook software, Website development and hosting, training,
gaming license consulting, facilities and telecommunications management.
Beginning in November of 1997, IGW has been engaged in testing and
implementation of its proprietary online sportsbook software through its initial
software licensee- www.VIPsports.com.
At June 30, 1998, IGW completed the testing and implementation of its
proprietary online sportsbook software also through www.VIPsports.com. As a
result, www.VIPsports.com has experienced significant business growth, which can
be directly attributed to the successful testing, and implementation program
provided by IGW.
As of the date of this Registration Statement, IGW has entered into licensing
contracts with several software licensees for its gaming software. The
following is a current list of the Company's ten fully operational software
licensee Websites.
1. www.vipsports.com
2. www.vipcasinos.com
3. www.5cardcharlie.com
4. www.fairdealsports.com
5. www.fairdealcasino.com
6. www.gamedaycasino.com
7. www.gamedaysportsbook.com
8. www.wssbcasino.com
9. www.wallstreetsuperbook.com
10. www.fivecardcharlie.com
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Prevail Online, Inc.
At September 20, 1999, the Company completed an agreement of purchase and sale
for the purchase and acquisition of 100% of the issued and outstanding stock of
Prevail Online, Inc., ("Prevail") a Colorado Corporation with its principle
office in San Francisco, CA. Pursuant to the terms of the acquisition, the
Company conducted a tax-free exchange of 163,500 shares of its common stock for
100 % of the issued and outstanding shares of Prevail. Prevail will operate as
a wholly owned subsidiary of the Company.
Prevail operates three independent online services that attract consumers with a
combination of highly focused content and superior marketing techniques which
has made its sites among the most popular on the Web. Prevail Online's services
deliver gaming directory information through its Website www.wheretobet.com,
real time sports gaming news and statistics through www.thesportsdaily.com, and
mainstream online wagering information via www.netbet.org.
1:3 Products and Services
Through its wholly owned subsidiaries, the Company develops and provides its
software products, Web publishing services and Web hosting services to the
independent licensees. To its licensees, the Company provides:
Set-up
1. Assistance in procuring of initial Internet gaming license with their
governing body.
2. Concept development and design of virtual casino "theme.".
3. Customization and system integration.
4. Hosting of servers.
5. Assistance in procuring secure electronic funds transfer capabilities and
monitoring of all funds flow.
Software Features
1. Real-time functionality.
2. All odds making rules and calculations.
3. Advanced graphical user interface for enhanced visual and audio effects.
4. Preservation and analysis of all gaming data, including win/loss, game
preferences and monitoring of player activities.
5. Accurate reporting of return on advertising Investment to optimize marketing
resources.
6. Provision of credit card processing e-commerce and other banking services.
Java Casino Games
IGW's Java games utilize the Java language to provide easily accessible online
games to the Company's licensees' Websites. The cross-platform nature of Java
makes it possible to play these games on all major operating systems, online,
with no download requirements. IGW software
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currently provides four (4) casino style Java Games (Videopoker, Blackjack,
Roulette, slots) for players to wager on, with several additional Java games
projected to be released throughout FY2000.
1:4 Growth Strategy
The development of telecommunications and the emergence of new technology have
created opportunities to develop new, efficient and secure ways to deliver
information and entertainment to consumers. The Company intends to capitalize
on its technological niche and expertise to become a world leader in online
gaming software systems. The Company's key strategic objectives are to: (i)
continue supporting core holdings of Internet gaming software development and
licensing; (ii) expand to other Internet markets, through acquisitions in the
content and publishing markets; and (iii) pursue opportunities in e-commerce.
The Company intends to implement its business strategy by: (i) continuing to
enhance its technology; (ii) seeking key strategic alliances and; (iii)
developing brand name recognition through cross marketing and merchandising.
Expand Market Integration
The Company intends to capitalize on its technological niche and early market
entry to capture a significant share of the Internet gaming software market.
The Company believes it is well positioned to achieve this goal since it
possesses the competitive advantage of being one of the first companies to
license proprietary turnkey gaming software and has established sufficient
initial quality brand recognition.
Maintain High Quality, Innovative Products and Services
The Company is focused on designing a gaming experience by using leading edge
technology. Additionally, licensees may benefit from other methods of revenue
generation, which traditional gaming machines cannot offer, such as advertising,
data collection and user analysis.
Continue Technology Development
The Company has achieved its technological niche through the development of its
proprietary software. Furthermore, the Company has made a strong commitment to
continue research and development activities to enhance its software and to
develop new applications for new markets. The Company will continue to use such
methods to protect its technology and moderate competition from current and
future entrants.
Sales and Marketing Strategy
The Company's sales and marketing are conducted through its Curacao offices and
its Omaha, Nebraska headquarters. As of September 20, 1999, the sales and
marketing team was comprised of six (6) sales and marketing professionals and
technicians. The managers hired to date
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are experienced professionals with in-depth knowledge of Internet software and
the gaming industries.
The Company is committed to maintaining a customer-driven organization and
continues to aggressively recruit and train additional staff for the marketing
department to assist the Company in achieving its sales goals.
Competitive Environment
The Company estimates that there are currently over 17 online gaming software
developers and over 300 gaming Websites on the World Wide Web.
Competition in the gaming software development and licensing markets come from
five primary segments:
1. Traditional Land-based Gaming
2. Internet Gaming
3. Electronic Gaming
4. Internet Service Providers
5. Other Entertainment / Media
The Company estimates the following list of companies represent the major
competition in the licensing of Internet gaming software: Starnet
Communications, Microgaming, Atlantic International Entertainment, Ltd.,
Chartwell Technology, Inc., Cryptologic, Inc. and Boss Media AB.
1:5 Technology
Redundant High-Speed Network
IGW has constructed a transaction-oriented server hosting facility with the
licensee in mind. Tightly integrated with the Internet connection, the server
farm offers a dedicated, fully duplexed gateway into the global Internet. Taking
advantage of newly implemented connectivity hardware and security software, the
facility guarantees an unprecedented level of performance and availability. The
system is composed of high speed Dell and Compaq servers and top of the line
Cisco and Nokia networking equipment. The mission critical system components,
such as the database and web servers, are fully fault tolerant, load-balanced,
mirrored and redundant, which protects the licensees from failures due to
malfunctioning equipment.
The highly scalable nature of IGW's system design makes provisioning for
additional capacity seamless. The network monitoring and security staff tracks
the system at all times to maintain constant awareness of the system's operating
parameters. New equipment and bandwidth will be procured as necessary to
compensate for increased activity or anticipated peak demands.
The high quality Internet connection at IGW's network facility in Curacao is
provided by Antelecom and Teleglobe and contributes to responsive game play and
uptime for the licensees.
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Each gaming transaction is stored on a database that is replicated for
redundancy and backed up online to prevent data loss.
In addition to IGW's digital network serving gaming content for its licensees,
the Company uses a state of the art proprietary e-commerce solution that
provides a high level of security and integrity for transmission of funds over
the Internet. IGW uses Secure Sockets Layer (SSL) to encrypt and protect
transmission of sensitive data like credit card information.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
2:1 Results of Operations
General
The Company derives its revenues principally from its wholly owned subsidiary
Interactive Gaming Wagering, NV. (IGW) which develops and licenses software. IGW
licenses its gaming software to third parties for a set up fee and monthly
maintenance fees and royalties.
Through research and development in the past four years, the Company identified
the opportunity of offering proprietary software and related services to online
gaming operators and successfully launched its first licensee in November 1997.
The Company encourages its licensee's to target only customers in countries that
regulate online gaming. Currently, there are several countries which support the
online gaming industry through regulation and/or taxation, including; such
nations as Sweden, Finland, Australia, Germany, Liechtenstein, the Netherlands
Antilles, Dominica and Antigua.
Since the beginning of fiscal 1999, revenues from all components of the software
licensing business, which include software licensing, Website services and
software licensing royalties have undergone tremendous growth and generated
revenues of $1,226,000, representing 125% of the total revenues for the twelve
months ended December 31, 1998.
The following tables set forth selected information from the statements of
operations and balance sheets for the twelve months ended December 31, 1998, and
for purposes of a mid year audit, selected information includes statements of
operations and balance sheets for six months ending June 30, 1999.
Selected Statement of Operations Information
For the Year Ended For Six Months Ended
December 31, 1998 June 30, 1999
Total Revenues $980,563 $1,248,968
Total Expenses 635,380 775,764
Income (Loss) From Operations 345,183 473,204
Total Other Income (Expense) (623,762) (69,472)
Net Profit (Loss) (278,579) 403,732
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Selected Balance Sheet Information
For the Year Ended For Six Months Ended
December 31, 1998 June 30, 1999
Total Current Assets (Deficiency) $1,088,155 $1,785,556
Total Current Liabilities 218,767 368,649
Total Property & Equipment 62,923 688,153
Total Liabilities 272,235 698,926
Total Other Assets 280,424 308,790
Total Assets 1,431,502 2,782,499
Net Shareholders' Equity 1,159,267 2,083,573
The Company's revenues increased 27% to $1,248,968 for the six months ended June
30, 1999 as compared to $980,563 for the twelve months ended December 31, 1998.
The growth is primarily due to additional revenues generated from software
licensing, and Website services for licensees. Revenue from software licensing,
which is the significant income source, accounts for 100% of the total revenues
for the six months ended June 30, 1999. At June 30, 1999, the Company had
entered into agreements with 6 licensees and as of September 20, 1999, the
Company supports 10 fully operational licensee Websites.
As the industry matures and the quality of the Company's gaming software is
proven within the industry, the Company expects to be able to attract
approximately one to two new licensees per month in the next fiscal year.
Operating expenses were $635,380 for the twelve months ended December 31, 1998
and $775,764 for the six months ended June 30, 1999. As a percentage of
revenues, operating expenses decreased from 65% to 62% as a result of
substantial revenue growth and efficiencies gained as the Company handled a
greater level of activity.
Income from operations for the twelve months ended December 31, 1998 was
$345,183, excluding a one time extraordinary write off of impaired assets
(Note #3) as compared to $473,204 for the six months ended June 30, 1999. The
growth was primarily the result of an increase in revenues from software
licensing.
The Company expects licensing revenues to continue to grow as more licensees
commence operations and royalties from the licensee's Internet gaming operations
increase.
Tax expense for the twelve months ended December 31, 1998 was $0, as compared to
$58,140 for the six months ended June 30, 1999. The majority of the Company's
income is generated
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from IGW in Curacao, which is subject to U.S. federal income tax when it exceeds
the taxes required in Curacao.
2:2 Liquidity and Capital Resources
At June 30, 1999, the Company had $232,571 in cash and cash equivalents, as
compared to $122,422 at December 31, 1998. The increase in cash balance is
mainly a result of the increased operating profits and financing activities.
Working capital at June 30, 1999 increased to $1,416,907 as compared to $869,388
at December 31, 1998. Accounts receivable at June 30, 1999 increased to
$1,384,507 as compared to $962,249 at December 31, 1998. The majority of the
receivables are from new licensees that were offered an installment payment plan
on the initial licensing fees and from operating licensees, which have a 30-day
term agreement for royalties.
Net cash generated from operating activities for the six months ended June 30,
1999 increased to $212,027 as compared to a net use of $383,494 for the twelve
months ended December 31, 1998. The increase in cash from operations was
primarily due to the write off of impaired assets of $670,844 at December 31,
1998 year-end and the increase in revenues.
Net cash used for investing activities for the six months ended June 30, 1999
was $764,310 as compared to $589,175 for the twelve months ended December 31,
1998. The increase was primarily due to increase in purchases of computer
equipment. Net cash provided by financing activities for the six months ended
June 30, 1999, was $668,780, as compared to $965,579 for the year ended December
31, 1998. The decrease was primarily due to the Company's decision not to issue
any additional equity securities.
2:3 Impact of Inflation
The Company believes that inflation has not had a material effect on its past
business.
2:4 Contingencies
The Company is not the subject of any lawsuit, except that which is indicated in
note #3 in the consolidated financial statements.
2:5 Year 2000 Risks
Currently, many computer systems, hardware and software products are coded to
accept only two digit entries in the date code field and, consequently, cannot
distinguish 21st century dates from 20th century dates. The interactions
between various software and hardware platforms often rely upon the date coding
system. As a result, many companies' software and computer systems may need to
be upgraded or replaced in order to function properly after the turn of the
century. The Company, its licensees and suppliers are reliant on computers and
related automated systems for daily business operations.
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Failure to achieve at least a minimum level of Year 2000 systems compliance by
both the company and its suppliers would have a material adverse effect on the
Company.
The Company has completed the process of identifying computer systems that could
be affected by the Year 2000 issue as it relates to the Company's internal
hardware and software, as well as third parties that provide the Company with
goods or services. Three categories or general areas have been identified for
review and analysis:
1. Systems providing licenses services. These include hardware and software
systems that are used to provide services to the Company's customers in the form
of Internet connectivity, e-mail servers, authentication servers, gaming
servers, database servers, etc. Hardware in the form of routers and switches
are also included in this area.
2. Third party vendors providing critical services including circuits,
hardware, long distance Internet connectivity and related products. These
include telco providers, suppliers of routers, modems, switches, odd feeds, etc.
3. Critical internal systems that support the Company's administrative systems
for billing and collecting, general accounting systems, computer networks, and
communication systems.
The Company has completed its Year 2000 compliance review and testing. In
regards to Item (1) listed above, systems providing customers services, the
Company's critical existing systems are no more than one year old and none of
these systems have Year 2000 problems. These systems have been inventoried and
a systems test has been completed. Many of the critical systems have been
migrated to new hardware and software platforms to increase reliability and
capacities. All newly acquired hardware systems, operating systems, and
software are required to have vendor certification for Year 2000 compliance.
In regard to Item (2) above - third party products and services - the Company's
significant vendors are large public companies such as; Sun Microsystems,
Microsoft, Oracle, Cisco, etc. These companies are all under SEC mandates to
report their compliance in all publicly filed documents. The Company has
initiated a compliance review program with these vendors during the first full
quarter of 1999 and will continue to track progress of all critical vendors for
compliance.
Item (3) above, critical internal systems, relates to internal systems for
company administrative and communications requirements.
Additionally, the Company has tested the existing systems for Year 2000
compliance. It has been determined that the existing billing and billing
presentment systems are Year 2000 compliant.
Based on growth, the Company plans to implement new hardware platforms and
software systems that should be Year 2000 compliant and therefore costs
specifically allocated to Year 2000 compliance may not be significant, and have
not been significant to date.
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The nature of the Company's business makes it dependent on computer hardware,
software, and operating systems that are susceptible to Year 2000 issues.
Failure to attain at least minimum levels of Year 2000 compliance would have a
material adverse effect on the Company's ability to deliver services.
The Company believes that its banking relationships, and transfer agent are Year
2000 Compliant. Should any of these third party vendors not be Year 2000
Compliant, the Company will experience little to no adverse material impact on
its cash flow or prohibit its ability to continue operations.
ITEM 3. DESCRIPTION OF PROPERTY
The Company's principal offices are located at 6235 S. 90th Street, Omaha,
Nebraska 68127. The Company currently leases 2,000 sq. ft. from 90th Street.
The lease is for a period through February 28, 2004 at a rate of $1,300 per
month and adjusts upward to $1,500 in the year 2004.
ITEM 4. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS
4:1 Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of the date hereof, based on
information obtained from the persons named below, with respect to the
beneficial ownership of the Common Stock by (i) each person known by the Company
to own beneficially 5% or more of the Common Stock, (ii) each director and
officer of the Company and (iii) all directors and officers as a group:
Name and Address of
Beneficial Owner Shares owned Beneficially(1) % Owned
Bryan Abboud(2)(4) 2,786,700 29%
Steve Abboud(4) 411,429 4%
Joann Abboud(4) 569,760 6%
Masadi Financial(5) 582,900 6%
Shining Star(3) 1,622,358 17%
Thomas Hawkins 3,000 .0003%
Officers, Directors and 5%
shareholders as a group (5 in number) 5,976,147 62%
Note (1) The number of shares of Common Stock owned are those "beneficially
owned" as determined under the rules of the Securities and Exchange
Commission, including any shares of Common Stock as to which a person
has sole or shared voting or investment power and any shares of Common
Stock which the person has the right to acquire within 60 days through
the exercise of any option, warrant or right.
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Note (2) No officer, director or security holder listed above owns any warrants,
options or rights, with the exception of Mr. Bryan Abboud, who has
options to purchase an additional 78,939 shares of the Company's common
stock. (See "Certain Relationships and Related Transactions.")
Note (3) Mr. Steve Abboud is a principal beneficial owner of 88% of the voting
stock of Shining Star and Mr. Bryan Abboud is a principal beneficial
owner of 12% of the voting stock of Shining Star.
Note (4) Bryan Abboud and Steve Abboud are brothers and Joann Abboud is the
mother of Bryan and Steve Abboud.
Note (5) Mr. Gene Abboud is the principal and beneficial owner of 50% of the
voting stock of Masadi Financial and is a second cousin of Bryan and
Steve Abboud.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
5:1 Officers and Directors
Name Age Position
Steven Abboud(1) 35 Director, President/CEO
Bryan Abboud(1) 29 Director, Chairman/Treasurer
Thomas Hawkins 48 Secretary
(1) These persons may be deemed "promoters" of the Company as that term is
defined under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
All Directors of the Company will hold office until the next annual meeting of
shareholders of the Company or until successors are duly elected and qualified.
The Officers of the Company are elected by the Board of Directors at the first
meeting after each annual meeting of the Company's shareholders, and hold office
until their death, or until they shall resign or have been removed.
STEVEN ABBOUD: Mr. Steven Abboud is a co-founder of Global Entertainment
Holdings/Equities, Inc. (GAMM) and since its inception has been a Director and
President of the Company. With his expertise in investment banking, Mr. Abboud
has been able to bring the Company from a position of insolvency in June of 1998
to a current equity value of approximately $2.0 million and a market
capitalization of $30 million. Mr. Abboud has been instrumental in providing
equity and debt financing, audit coordination and cost accounting to Interactive
Gaming and Wagering (IGW), a wholly owned subsidiary of the Company. Over the
past decade, Mr. Abboud has been responsible for numerous venture capital fund
raising activities, public and private offerings, financial consulting, investor
relations, mergers and acquisitions, and various other investment banking
services. He has established multiple contacts in the field of investment
banking. He also serves as a financial consultant to Masadi Financial Services,
Inc., Camelot Investments Inc., and Shining Star Investments Inc. Mr. Abboud
founded Shining Star Investments Inc. in 1989 where he holds the positions
President and Director. Prior to this, Mr. Abboud co-founded and managed Vista
International, a consumer electronics import/export mail
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order distribution center. Mr. Abboud received his Bachelor of Science in
Finance from Arizona State University.
BRYAN ABBOUD: Mr. Bryan Abboud is a co-founder and has been a Director and
Chairman of the Board of Directors of the Company since September of 1998, and
is the founder of Interactive Gaming & Wagering, N.V. (IGW), a wholly owned
subsidiary of Global Entertainment Holdings/Equities, Inc. Mr. Abboud also is a
co-founder and current board member of the Interactive Gaming Council, the
online gaming industry's premier trade association. During the past three
years, he has assembled personnel, arranged financing, and led the company into
the Internet Gaming Software Industry. Prior to founding IGW, Mr. Abboud was
involved for six years in upper management of a start-up company in the high-
tech consumer electronics industry. As Senior Vice President and a board member
of Multi-Vision Electronics, Mr. Abboud increased company sales 200%,
represented his company at trade shows, created strategies and managed all
persons in sales, public relations and graphic design. Mr. Abboud also served
as Vice President of Marketing and co-founder of Vista International, where he
was responsible for all U.S. sales, advertising and promotions. Mr. Abboud
successfully created and implemented marketing and public relation strategies
for Vista International focusing on both the consumer and the industry. Mr.
Abboud earned a Masters in International Management at the American Graduate
School of International Management (Thunderbird). He also received a Bachelor of
Science Degree in Commerce accelerating in Marketing, at Santa Clara University
and attended Sup de Co in Rouen, France.
THOMAS HAWKINS: Mr. Thomas Hawkins has been the Corporation Secretary since
June of 1999. Mr. Hawkins has had twenty years experience in Investment
Banking, and Financial Business Consulting and has participated in raising debt
and equity venture capital for start-up to small business concerns through
private placements and public offerings. Currently, Mr. Hawkins is employed as
a small business financial consultant for both private and public companies. In
such capacity, he organizes and works with client companies in preparing and
conducting their Annual and/or Special Shareholders Meetings, acts as Inspector
of Election and Balloting and assists in the preparation of the minutes of the
meetings. He is currently assisting Marina Capital, Inc. (a Utah corporation)
and Beeper Plus, Inc., (a publicly traded Nevada corporation) in the development
of their Proxy Statements for their scheduled Annual Shareholders Meetings. Mr.
Hawkins has been responsible for pricing, negotiating and structuring private
placement offerings and initial public offerings. He was a branch manager and
stock-trader for Citiwide Securities, Inc. In addition, Mr. Hawkins was
publisher for the Americana Corporate Finance Reporter, a national magazine
focusing on corporate finance strategies for small to medium sized companies.
Mr. Hawkins graduated from the University of Arizona with a BS Degree, in
Business and Public Administration. He was a member of Tip O'Neil's National
Democratic Speakers Club and has co-sponsored events surrounding the National
Democratic Black Caucuses in Washington, D.C. Mr. Hawkins has also coordinated
and conducted Investment Seminars.
Each outside Director receives no compensation for attending meetings of the
Board of Directors and all Directors are reimbursed for out-of-pocket expenses
incurred in connection with the Company's business.
14
<PAGE>
ITEM 6. EXECUTIVE COMPENSATION
Name and Principal Other Total
Position Year Annual Salary Compensation Compensation
Steven Abboud
President/CEO 1999 $48,000 $0 $48,000
Bryan Abboud
Chairman/Treasurer 1999 $0 $0 $0
Thomas Hawkins
Corporate Secretary 1999 $1,200 $10,000 $11,200
(Common Stock)
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Steve Abboud, President, CEO and Director of the Company, and Mr. Bryan
Abboud, Chairman of the Board and Treasurer of Global Entertainment Holdings/
Equities, Inc. and President of Interactive Gaming & Wagering, NV, are brothers
and are the principal beneficial owners of 88% and 12%, respectively, of the
voting stock of Shining Star, a shareholder of the Company.
Mr. Gene Abboud, a shareholder of the Company is a second cousin to Mr. Steve
Abboud and Mr. Bryan Abboud, and is the principal and beneficial owner of 50% of
the voting stock of Masadi Financial, a shareholder of the Company.
Ms. Christina Stanger, a shareholder of the Company, is the beneficial owner of
50% of the voting stock of Masadi Financial, a shareholder of the Company.
On December 31, 1998, Mr. Steve Abboud, the President of the Company, loaned the
Company $20,000 at an accrued interest of eight percent (8%) per annum.
On August 1, 1998, Mr. Bryan Abboud, the President of Interactive Gaming &
Wagering, N.V. and Chairman of the Company, loaned to the Company $20,000 at an
accrued interest of eight percent (8%) per annum.
Ms. Joann Abboud, a shareholder of the Company, is the mother to Mr. Steve
Abboud and Mr. Bryan Abboud, and is the beneficial owner of the voting stock of
Camelot Investments Inc., a
15
<PAGE>
shareholder of the Company. In addition, on July 1, 1997, Ms. Abboud by virtue
of a Loan Agreement, loaned to Interactive Gaming & Wagering, NV, a wholly owned
subsidiary of the Company, $75,000 at eight percent (8%) interest per annum.
This loan is due on demand. On June 21, 1999, Ms. Abboud, by virtue of a
Promissory Note, loaned the Company $225,000 with an interest rate of ten
percent (10%) per annum, due August 1, 2000. In addition, Ms. Abboud received
2,000 shares of the Company's $.001 par value common stock for $2.00.
On July 21, 1998, Mr. James Zilligen, by virtue of a Subscription Lending
Agreement with Stock Option "Kicker", loaned the Company $100,000 and as further
inducement to make the loan, received an option to purchase 15,000 shares of the
Company's $.001 par value common stock at a strike price of $1.25 per share. On
October 20, 1998, Mr. Zilligen exercised his option by paying to the Company,
$18,750.
ITEM 8. LEGAL PROCEEDINGS
Pursuant to an Agreement of Purchase between Masadi Resources, Inc., and
Beverage Source Worldwide) Inc., dated November 26, 1997, the Company issued
1,375,000 (pursuant to a three (3) for one (1) stock split) shares of its $.001
par value common stock in exchange for 1,500 shares of Beverage Sources
Worldwide, Inc. At December 31, 1997, the Company had advanced to its
subsidiary, Beverage Source Worldwide, Inc., $200,000 and in the early months of
1998 the Company advanced an additional $457,844 to Beverage Source Worldwide,
Inc. Minutes of an Emergency Meeting of the Board of Directors of the Company
dated April 2, 1998, noted that Beverage Source Worldwide, Inc. was without
funds and was currently facing bankruptcy if the Company did not advance
substantial working capital funds. On May 5, 1998, the Company filed a
Complaint in the Superior Court of California, County of San Diego, alleging
that from the closing of the Agreement of Purchase, officers and directors of
Beverage Source Worldwide, Inc., had breached their respective duties,
obligations and agreements with the Company, secreting and/or attempting to
secret the Companies assets, moving, transferring, assigning conveying
encumbrances, sequestering, using, disposing of, or shifting, any and all of the
assets and property of the Company, wrongfully withdrawing monies from the
Corporate bank accounts, misappropriating company funds, co-mingling the
operating expenses and costs of International Beverage Corporation or its wholly
owned subsidiary Beverage Source Worldwide, Inc., with independent business of
the officers and directors named in the suit. Further, that the named defendant
officers and directors engaged in an extensive pattern of discussion with
various entities for the specific purpose of merging one or all of the said
entities, without disclosing to such entities and their representatives that
Beverage Source Worldwide, Inc., was a wholly owned subsidiary of International
Beverage Corporation. In addition to the above general categories of the
complaint, there are numerous specific allegations of Malfeasance and Breach of
Fiduciary Duty. The complaint specifically intends that service of the summons
and complaint serve as notice of rescission of the Agreement dated November 26,
1997. The Company believes that the courts will validate such rescission.
Because of the rescission action taken with the filing of the complaint on May
5, 1998, the Company has not presented consolidated financial statements with
Beverage Source Worldwide, Inc. Further, the Company has made the assessment
that the rescission of the Agreement will be upheld by the Courts without
adverse effect to the Company and has made provisions for
17
<PAGE>
impaired assets and collectability losses at approximately 90% of the face value
of the amounts owed by Beverage Source Worldwide, Inc. This information is
noted in the year-end December 31, 1998 audited financials statements.
The Company has filed suit in the Superior Court of California, County of San
Diego. The suit names former officers and directors of International Beverage
Corporation and Beverage Source Worldwide and seeks rescission of the
acquisition of Beverage Source Worldwide, Inc., and damages in sums and amounts
presently unknown, but not less than $1,000,000.
The defendants have filed a counter complaint alleging damage in amounts not
less than $1,000,000.
The Company's Counsel has informally indicated that rescission and breach of
fiduciary duty present the strongest and most beneficial approvals for the
Company to pursue, as these causes of action offer both compensation and
punitive or exemplary damage option.
Counsel has indicated that rescission is substantially more likely than not to
occur and will not present any adverse effect to the Company. No estimate for
the award of damages can be made at this time.
The Company is not a party to any other litigation and none is contemplated nor
has any been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock currently trades on the NASD Over The Counter
Bulletin Board under the symbol "GAMM". The Company's high and low trading
price and volume for the past five (5) quarters are listed in the following
table:
Quarterly GAMM Stock Trading Summary
Quarter High Low Close Volume
3rd Quarter 1998 $6.50 $5.0625 $5.375 10,400
4th Quarter 1998 $13.125 $5.375 $8.125 83,800
1st Quarter 1999 $17.875 $6.25 $14.125 136,500
2nd Quarter 1999 $17.625 $10.125 $12.50 85,400
3rd Quarter 1999 $7.00* $1.87* NA NA
* 3:1 forward stock split ex date August 23, 1999.
17
<PAGE>
As of the date of this Registration Statement, the Company has outstanding
options to purchase 225,000 shares of its $.001 par value common stock, at
strike prices ranging from $0.33 to $4.00.
As of June 30, 1999, there were 8,937,651 shares of Common Stock considered to
be restricted, pursuant to Rule 144 under the Securities Act of 1933, as amended
(the "Securities Act").
Holders of Record:
As of June 30, 1999, there were eighty-four (84) holders of record of the
Company's Common Stock, and the number of beneficial holders was approximately
four (4).
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
As of June 30, 1999, the Company had 9,621,441 shares of its $.001 par value
common stock issued and outstanding of which 8,918,151 shares were issued in
transactions exempt by reason of Section 4(2) of the Securities Act of 1933, as
amended, and 703,290 shares were issued in transactions exempt by reason of Rule
504 of Regulation D promulgated pursuant to Section 3(b) of the Securities Act
of 1933, as amended.
On July 15, 1997, the Company issued to Mr. Michael A. Abboud 50,000 shares of
Common Stock for consideration of $50.00 and on July 16, 1997 the Company issued
to Mr. Michael Abboud, an additional 100,000 shares Common Stock as an
inducement to make a loan to the Company.
On July 15, 1997, the Company issued to Mr. Steven M. Abboud, 150,000 shares of
Common Stock for consideration of $150.00.
On July 15, 1997, the Company issued to Mr. Gene J. Abboud, 150,000 shares of
Common Stock for consideration of $150.00.
On July 15, 1997, the Company issued to Ms. Brenda J. Abboud, 50,000 shares of
Common Stock for consideration of $50.00.
On July 15, 1997, the Company issued to Mr. Michael S. Luther, 50,000 shares of
Common Stock for consideration of $50.00.
On July 15, 1997, the Company issued to Mr. Christopher P. Murray, 50,000 shares
of Common Stock for consideration of $50.00.
Between July 30, 1997 and August 28, 1997, as Masadi Resources, Inc., the
Company issued to twenty-one (21) individuals an aggregate of 1,450,000(1)
shares of its $.001 par value common stock at $.10 per share by virtue of Rule
504 of Regulation D offering promulgated pursuant to Section 3(b) of the
Securities Act of 1933, as amended, for a total consideration of $145,000 in
cash.
18
<PAGE>
On December 1, 1997, the Company issued 1,375,000 shares of the Company's $.001
par value Common Stock to Mark Darnell for 1,500 shares (100%) of the issued and
outstanding shares in BSW(3) as it related to the Agreement of Purchase and Sale
between the Company and Beverage Source Worldwide.
Between December 19, 1997 and March 16, 1998, as Masadi Resources, Inc., the
Company issued to twenty (20) individuals an aggregate of 159,500(1) shares of
its $.001 par value common stock at $4.00 per share by virtue of Rule 504 of
Regulation D promulgated pursuant to Section 3(b) of the Securities Act of 1933,
as amended, for a total consideration of $638,000 in cash.
On June 30, 1998, the Company pursuant to an Agreement of Purchase and Sale,
issued to Interactive Gaming & Wagering, NV, 5,134,500 shares of the Company's
$.001 par value common stock in exchange of 30,000 shares of Interactive Gaming
& Wagering.
On March 19, 1999, the Company ended the exercise period of the warrants issued
in the Private Placement Offering dated, December 10, 1997. The Company as a
result, issued 4,499(2), shares of its $.001 par value common stock at $14.00
per share for a total consideration of $62,986.
Between August 26, 1998 and August 19, 1999, the Company issued to twenty-one
(21) individuals an aggregate of 83,625 shares of its $.001 par value common
stock at an average price of $5.72 per share in transactions exempt from
registration by reason of Section 4(2) of the Securities Act of 1933, as amended
for a total consideration of $478,403 in cash.
(1) Does not reflect the one (1) for seven (7) reverse stock split effective as
of August 19, 1998 or the three (3) for one (1) forward stock split
effective as of August 23, 1999.
(2) Represents the amount of stock after the one (1) for seven (7) reverse stock
split, effective as of August 19, 1998, but does not reflect the three for
one forward stock split effective as of August 23, 1999.
(3) On May 5, 1998, the Company filed a Complaint in the Superior Court of
California, County of San Diego, alleging that from the closing of the
Agreement of Purchase, officers and directors of Beverage Source Worldwide,
Inc., had breached their respective duties, obligations and agreements with
the Company, the Company therefore, rescinded the 1,375,000 shares of stock
issued to Mark Darnell.
ITEM 11. DESCRIPTION OF SECURITIES
11:1 Common Stock
The authorized capital stock of the Company consists of 100,000,000 shares of
$.001 par value Common Stock. All shares have equal voting rights and are non-
assessable. Voting rights are not cumulative, and therefore, the holders of
more than fifty percent (50%) of the Common Stock of the Company could, if they
chose to do so, elect all the Directors.
19
<PAGE>
Upon liquidation, dissolution or winding up of the Company, the assets of the
Company, after the payment of liabilities, will be distributed pro rata to the
holders of the Common Stock. The holders of the Common Stock do not have
preemptive rights to subscribe for any securities of the Company and have no
right to require the Company to redeem or purchase their shares. The shares of
Common Stock presently outstanding are fully paid and non-assessable.
Holders of Common Stock are entitled to share equally in dividends when, and if
declared by the Board of Directors of the Company, out of funds legally
available thereof. The Company has not paid any cash dividends on its Common
Stock, and it is unlikely that any such dividends will be declared in the
foreseeable future.
As of the date hereof, the Company had outstanding 9,684,437 shares of common
stock.
11:2 Preferred Stock
The Company is authorized to issue 25,000,000 shares of Preferred Stock, no par
value, of which there have been no shares issued or outstanding as of the date
hereof.
In general, any of the Company's Preferred Stock may be issued in series from
time to time with such designation, rights, preferences and limitations as the
Board of Directors of the Company may determine by resolution. The rights,
preferences and limitations of separate series of Preferred Stock may differ
with respect to such matters as may be determined by the Board of Directors.
This is to include, without limitation, the rate of dividends, method and nature
of payment of dividends, terms of redemption, amounts payable on liquidation,
sinking fund provisions (if any), conversion rights (if any), and voting rights.
The potential exists therefore, that additional preferred stock might be issued
which would grant additional dividend preferences and liquidation preferences to
preferred shareholders. Unless the nature of a particular transaction and
applicable statutes require such approval, the Board of Directors has the
authority to issue these shares without shareholder approval. The issuance of
Preferred Stock may have the effect of delaying or preventing change in control
of the Company without any further action by shareholders.
11:3 Dividends
The Company has never paid a cash dividend on its Common Stock nor does the
Company anticipate paying cash dividends on its Common Stock in the near future.
It is the present policy of the Company not to pay cash dividends on the Common
Stock but to retain earnings, if any, to fund growth and expansion. Under
Colorado law, a company is prohibited from paying dividends if the company, as a
result of paying such dividends, would not be able to pay its debts as they come
due, or if the company's total liabilities and preferences to preferred
shareholders exceed total assets. Any payment of cash dividends of the Common
Stock in the future will be dependent upon the Company's financial condition,
results of operations, current and anticipated cash requirements, plans for
expansion, as well as other factors the Board of Directors deems relevant.
20
<PAGE>
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, (other
than an action by or in the right of the corporation) by reason of the fact that
he is or was a director, officer, employee, fiduciary or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against expenses
(including attorney fees), judgments, fines, and amounts paid in settlement
actually and reasonably believed to be in the best interests of the corporation
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, or conviction or upon a pleas of nolo
contenders or its equivalent shall not of itself create a presumption that the
person did not act in good faith and in a manner which he reasonably believed to
be in the best interests of the corporation and, with respect to any criminal
action or proceeding, had reasonable cause to believe his conduct was unlawful.
The corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending, or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorney fees) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in the best interests of the
corporation; but no indemnification shall be made in respect of any claim,
issue, or matter as to which such person has been adjudged to be liable for
negligence or misconduct in the performance of his duty to the corporation
unless and only to the extent that the court in which such action or suit was
brought determines upon application that, despite the adjudication of liability,
but in view of all circumstances of the case, such person is fairly and
reasonably entitled to indemnification for such expenses which such court deems
proper.
To the extent that a director, officer, employee, fiduciary or agent of a
corporation has been successful on the merits in defense of any action, suit, or
proceeding referred to in (a) or (b) of this Article VII or in defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
(including attorney fees) actually and reasonably incurred by him in connection
therewith.
Any indemnification under (a) or (b) of this Article VII (unless ordered by a
court) and as distinguished from (c) of this Article shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee, fiduciary or agent is proper
in the circumstances because he has meet the applicable standard of conduct set
forth in (a) or (b) above. Such determination shall be made by the board of
directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit,
21
<PAGE>
or proceeding, or, if such a quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs.
Expenses (including attorney's fees) incurred in defending a civil or criminal
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding as authorized in Section
(d) of this Article, upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount, unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Article.
The board of directors may exercise the corporation's power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under this Article.
The indemnification provided by this Article shall not be deemed exclusive of
any other rights to which those seeking indemnification may be entitled under
these Articles of Incorporation, the Bylaws, agreements, vote of the
shareholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs and
personal representatives of such a person.
ITEM 13. FINANCIAL STATEMENTS
/Letterhead/
Schvaneveldt & Company
Certified Public Accountant
275 East South Temple, Suite #300
Salt Lake City, Utah 84111
(801) 521-2392
Darrell T. Schvaneveldt, C.P.A.
Independent Auditors Report
Board of Directors
Global Entertainment Holdings/Equities, Inc.
I have audited the accompanying consolidated balance sheets of Global
Entertainment Holdings/Equities, Inc., as of June 30, 1999, December 31, 1998
and 1997, and the related consolidated statements of operations, stockholders'
equity, and cash flows for the period ended June 30, 1999 and the years then
ended December 31, 1998 and 1997. 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 audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and the significant
estimates made by management, as well as evaluating the overall financial
statements presentation. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion, the aforementioned consolidated financial statements present
fairly, in all material respects, the financial position of Global Entertainment
Holdings/Equities, Inc., as of June 30, 1999, December 31, 1998 and 1997, and
the consolidated results of its operations and its cash flows for the period
ended June 30, 1999 and the years ended December 31, 1998 and 1997, in
conformity with generally accepted accounting principles.
/S/ Schvaneveldt & Company
Salt Lake City, Utah
September 16, 1999
<TABLE>
Global Entertainment Holdings/Equities, Inc.
Consolidated Balance Sheets
June 30, 1999, December 31, 1998 and 1997
<CAPTION>
June December December
30, 1999 31, 1998 31, 1997
<S> <C> <C> <C>
Assets
Current Assets
Cash & Cash Equivalents (Note #2) $ 232,571 $ 122,422 $ 129,476
License Fees Receivable (Note #4) 1,384,507 962,249 -0-
Prepaid Expenses 123,138 3,484 -0-
Loan Receivable - Related Party (Note #7) -0- -0- 125,000
Interest Receivable 840 -0- -0-
Employee Accounts Receivable 44,500 -0- -0-
Total Current Assets 1,785,556 1,088,155 254,476
Property & Equipment (Note #6)
Automobile - Net 41,128 -0- -0-
Package Software - Net 7,296 4,859 -0-
Office Improvements - Net 24,090 1,970 -0-
Computer Equipment - Net 549,309 40,664 -0-
Furniture & Fixtures - Net 66,330 15,430 -0-
Total Property & Equipment 688,153 62,923 -0-
Other Assets
Cash in Escrow - Restricted 6,348 -0- -0-
Website Development and Design- Net 79,141 -0- -0-
Security Deposit 18,893 13,626 -0-
Software Design & Development - Net (Note #4) 154,408 216,798 -0-
Receivable BSW - Net (Note #3) 50,000 50,000 -0-
Notes Receivable - BSW -0- -0- 200,000
Investment - BSW (Note #3) -0- -0- 1,375
Total Other Assets 308,790 280,424 201,375
Total Assets $ 2,782,499 $ 1,431,502 $ 455,851
</TABLE>
The accompanying notes are an integral part of these financial statements
F-1
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc.
Consolidated Balance Sheets -Continued-
June 30, 1999, December 31, 1998 and 1997
<CAPTION>
June December December
30, 1999 31, 1998 31, 1997
<S> <C> <C> <C>
Liabilities & Stockholders' Equity
Current Liabilities
Accounts Payable $ 101,425 $ 23,844 $ -0-
Accrued Expenses 6,328 -0- -0-
Accrual Interest 9,805 12,565 -0-
Accrued Wages 13,350 17,800 -0-
Current Portion - Capital Leases (Note #7) 20,500 9,558 -0-
Current Portion - Notes Payable (Note#7) 50,000 50,000 -0-
Loans - Related Entities (Notes #7 & #13) 115,000 115,000 250,000
Note Payable - Line of Credit 4,101 -0- -0-
Income Taxes Payable 58,140 -0- -0-
Total Current Liabilities 378,649 228,767 250,000
Long Term Liabilities
Capital Lease Payable (Note #7) 55,277 13,026 -0-
Notes Payable (Note #7) 430,000 205,000 -0-
Less Current Portion (Note #7) ( 155,000) ( 164,558) -0-
Net Long Term Liabilities 330,277 53,468 -0-
Total Liabilities 708,926 282,235 250,000
Stockholders' Equity
Preferred Stock, 25,000,000 Shares Authorized,
at $.001 Par Value, None Issued
Common Stock 100,000,000 Shares Authorized,
Par Value of $.001; 9,621,441; 9,455,682
& 891,963 Shares Issued & Outstanding
Respectively Retroactively Restated 9,624 9,456 891
Paid In Capital 1,970,719 1,450,313 236,883
Retained Earnings (Deficit) 93,230 ( 310,502) ( 31,923)
Net Stockholders' Equity 2,073,573 1,149,267 205,851
Total Liabilities &
Stockholders' Equity $ 2,782,499 $ 1,431,502 $ 455,851
The accompanying notes are an integral part of these financial statements
F-2
<PAGE>
<CAPTION>
Global Entertainment Holdings/Equities, Inc.
Consolidated Statement of Operations
For the Period January 1, 1999 to June 30, 1999 and
the Years Ended December 31, 1998 and 1997
June December December
30, 1999 31, 1998 31, 1997
<S> <C> <C> <C>
Revenues
License Fees $ 1,227,498 $ 962,018 $ -0-
Hosting Income -0- 600 -0-
Miscellaneous Income 21,470 17,945 -0-
Total Revenues 1,248,968 980,563 -0-
Expenses
Amortization 63,390 110,592 -0-
Depreciation 72,585 35,299 -0-
Rents 83,567 78,855 1,041
Professional Fees 70,739 61,864 30,042
Travel 37,436 47,551 -0-
Administrative Expenses 202,467 153,103 1,865
Management Consulting 245,580 148,116 -0-
Total Expenses 775,764 635,380 32,948
Income from Operations 473,204 345,183 ( 32,948)
Other Income (Expenses)
Provisions for Income Tax ( 58,140) -0- -0-
Interest (Expense) ( 12,906) ( 21,220) ( 500)
Interest Income 1,574 782 1,525
Write Off Impaired Asset (Note #3) -0- ( 607,844) -0-
Forgiveness of Debt -0- 4,520 -0-
Total Other Income (Expenses) ( 69,472) ( 623,762) 1,025
Net Profit (Loss) $ 403,732 ($ 278,579) ($ 31,923)
Basic Earnings (Loss) Per Share .05 ($ .03) ($ .04)
Diluted Earnings Per Share $ .04 N/A N/A
Weighted Average Shares Outstanding
retroactively restated 9,531,057 7,855,533 799,998
Weighted Average Shares &
Options Outstanding 10,133,062 -0- -0-
The accompanying notes are an integral part of these financial statements
F-3
<PAGE>
<CAPTION>
Global Entertainment Holdings/Equities, Inc.
Statement of Stockholders' Equity
For the Period July 10, 1997 to June 30, 1999
Common Stock Paid In Retained
Shares Amount Capital Earnings
<S> <C> <C> <C> <C>
Balance, July 10, 1997 -0- $ -0- $ -0- $ -0-
Shares Issued to Incorporators for
Cash at $.002 Retroactively Restated 257,142 257 343
Shares Issued for Cash at $0.22 Per
Share Retroactively Restated 621,429 621 134,379
Shares Issued for Cash at $9.33 Per
Share Retroactively Restated 13,392 13 124,987
Cost of Shares Sold ( 22,826)
Net Loss for the Year Ended
December 31, 1997 ( 31,923)
Balance, December 31, 1997 891,963 891 236,883 ( 31,923)
Shares Issued for Cash at $9.38 Per
Share Retroactively Restated 54,693 54 512,946
Shares Issued for Cash at $0.22 Per
Share Retroactively Restated 720,000 720 159,280
Shares Issued to Acquire Interactive
Gaming & Wagering, NV. (Note #8) 5,134,500 5,135 143,752
Shares Issued for Cash at $0.61 Per
Share 107,670 108 65,695
Shares Issued to Original Shareholders
at $.001 Per Share 1,423,500 1,424 ( 950)
Shares Issued for Cash at $0.42 Per
Share 45,000 45 18,705
Shares Issued for Program Services at
$0.25 Per Share 888,696 889 221,475
Shares Issued for Cash at $1.67 Per
Share 51,000 51 84,949
The accompanying notes are an integral part of these financial statements
F-4
<PAGE>
<CAPTION>
Global Entertainment Holdings/Equities, Inc.
Statement of Stockholders' Equity -Continued-
For the Period July 10, 1997 to June 30, 1999
Common Stock Paid In Retained
Shares Amount Capital Earnings
<S> <C> <C> <C> <C>
Shares Issued for Services at $0.33
Per Share 8,160 8 2,715
Shares Issued for Director Fees at
$.001 Per Share 115,500 116 ( 77)
Shares Issued for Program Services
at $0.33 Per Share 15,000 15 4,940
Net Loss for the Year Ended
December 31, 1998 (278,579)
Balance, December 31, 1998 9,455,682 9,456 1,450,313 (310,502)
Shares Returned & Canceled ( 22,839) ( 22) 22
Shares Returned by Terminated
Employee ( 9,999) ( 9) 9
Shares Issued for Cash at $2.25
Per Share 30,000 30 67,470
Shares Issued for Cash at $2.50
Per Share 9,000 9 22,491
Shares Issued for Cash at $4.66
Per Share 13,497 13 62,972
Shares Issued for Cash at $2.66
Per Share 89,100 90 237,510
Shares Issued for Services
Rendered at $3.33 Per Share 39,000 39 129,944
Shares Issued for Services
Rendered at $0.001 Per Share 18,000 18 ( 12 )
Net Profit for Period Ended
June 30, 1999 403,732
Balance, June 30, 1999 9,621,441 $ 9,624 $ 1,970,719 $ 93,230
The accompanying notes are an integral part of these financial statements
F-5
<PAGE>
<CAPTION>
Global Entertainment Holdings/Equities, Inc.
Statements of Cash Flows
For the Period January 1, 1999 to June 30, 1999 and
the Years Ended December 31, 1998 and 1997
June December December
30, 1999 31, 1998 31, 1997
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net Income (Loss) $ 403,732 ($ 278,579) ($ 31,923)
Adjustment to Reconcile Net Income (Loss) to
Net Cash Provided by Operating Activities;
Amortization 63,390 110,592 -0-
Depreciation 72,585 35,299 -0-
Write off of Impaired Asset -0- 670,844 -0-
Forgiveness of Debt -0- ( 4,520) -0-
Non Cash Expenses 10,833 8,191 -0-
Rounding -0- 1 ( 1)
Change in Operating Assets & Liabilities;
(Increase) Decrease in Fees Receivable ( 422,258) ( 962,249) -0-
(Increase) Decrease in Prepaid Expenses ( 487) ( 3,484) -0-
(Increase) Decrease in Security Deposits ( 5,267) ( 13,798) -0-
Increase in Accounts Payable 77,581 23,844 -0-
Increase in Accrued Expenses 6,328 -0- -0-
Increase in Taxes Payable 58,140 -0- -0-
(Decrease) Increase in Accrued Interest ( 2,760) 12,565 -0-
(Decrease) Increase in Accrued Wages ( 4,450) 17,800 -0-
Increase in Loan Receivable -0- -0- ( 125,000)
(Increase) in Interest Receivable ( 840) -0- -0-
(Increase) in Employee Accounts Receivable ( 44,500) -0- -0-
(Increase) in Cash in Escrow Restricted ( 6,348) -0- -0-
Net Cash Provided (Used) in
Operating Activities 205,679 ( 383,494) ( 156,924)
Cash Flows from Investing Activities
Purchase of Website Design ( 85,279) -0- -0-
Purchase of Software Design & Development -0- ( 133,784) -0-
Purchase of Automobile ( 43,949) -0- -0-
Purchase of Package Software ( 2,812) ( 7,289) -0-
Purchase of Office Improvements ( 22,120) ( 1,970) -0-
Purchase of Computer Equipment ( 546,114) ( 67,173) -0-
Purchase of Furniture & Fixtures ( 64,036) ( 21,790) -0-
Loan to BSW -0- ( 456,844) ( 201,000)
Gaming & Wagering NV Purchase
Acquisition by Stock Issued -0- 99,675 -0-
Net Cash (Used) in Investing Activities ( 764,310) ( 589,175) ( 201,000)
The accompanying notes are an integral part of these financial statements
F-6
<PAGE>
<CAPTION>
Global Entertainment Holdings/Equities, Inc.
Statements of Cash Flows -Continued-
For the Period January 1, 1999 to June 30, 1999 and
the Years Ended December 31, 1998 and 1997
June December December
30, 1999 31, 1998 31, 1997
<S> <C> <C> <C>
Cash Flows from Financing Activities
Increase in Capital Lease Liabilities 66,414 19,608 -0-
Payments on Capital Lease Liabilities ( 13,221) ( 6,582) -0-
Increase in Loans 225,000 110,000 240,000
Sale of Common Stock 390,587 842,553 247,400
Net Cash Provided by
Financing Activities 668,780 965,579 487,400
Increase (Decrease) in Cash
& Cash Equivalents 110,149 ( 7,054) 129,476
Cash & Cash Equivalents at
Beginning of Period 122,422 129,476 -0-
Cash & Cash Equivalents at
End of Period $ 232,571 $ 122,422 $ 129,476
Disclosures from Operating Activities
Interest Expense $ 12,906 $ 21,220 $ 500
Taxes 58,140 -0- -0-
Significant Non Cash Transactions
Issued 5,134,500 Shares to Acquire
Interactive Gaming & Wagering, NV $ -0- $ 141,144 -0-
Issued 1,423,500 Shares to Incorporators -0- 474 -0-
Issued 8,160 Shares for Legal Services -0- 2,723 -0-
Issued 115,500 Shares for Director Fees -0- 39 -0-
Issued 15,000 Shares for Program Services -0- 5,000 -0-
Issued 39,000 shares for prepaid public relations 130,000 -0- -0-
Issued 18,000 shares for service 6 -0- -0-
The accompanying notes are an integral part of these financial statements
F-7
</TABLE>
<PAGE>
Global Entertainment Holdings/Equities, Inc.
Notes to Financial Statement
NOTE #1 - Organization
The Company was incorporated on July 10, 1997, under the laws of the state of
Colorado using the name Masadi Resources, Inc. On February 10, 1998, Articles
of Amendment were filed changing the name to International Beverage Corporation.
Pursuant to a Merger Agreement dated August 27, 1998, International Beverage
Corporation merged with Global Entertainment Holdings/Equities, Inc., and
subsequently the surviving corporation became known as Global Entertainment
Holdings/Equities, Inc.
The purpose of the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the laws of the state of Colorado.
The Company currently is engaged in, through its wholly owned subsidiary,
Interactive Gaming & Wagering NV., the conception and creation of computer
software programs for the gaming and wagering industry.
NOTE #2 - Significant Accounting Policies
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period when
the services are performed for the customer.
C. The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Basic Earnings Per Shares are computed by dividing income available to
common stockholders by the weighted average number of common shares
outstanding during the period. Diluted Earnings Per Share shall be
computed by including contingently issuable shares with the weighted
average shares outstanding during the period. When inclusion of the
contingently issuable shares would have an antidilutive effect upon
earnings per share no diluted earnings per share shall be presented.
E. Consolidation Policies: The accompanying consolidated financial
statements include the accounts of the company and its wholly-owned
subsidiary. Inter-company transactions and balances have been eliminated
in consolidation.
F. Depreciation: The cost of property and equipment is depreciated over the
estimated useful lives of the related assets. The cost of leasehold
improvements is amortized over the lesser of the length of the lease of
the related assets of the estimated lives of the assets. Depreciation
and amortization is computed on the straight line method.
G. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
H. Foreign Currency: All cash transactions in the Netherland Antilles are
conducted from the Antilles Banking Corporation in United States
dollars.
The accompanying notes are an integral part of these financial statements
F-8
<PAGE>
Global Entertainment Holdings/Equities, Inc.
Notes to Financial Statement -Continued-
NOTE #3 - Acquisition and Recission of Beverage Source Worldwide, Inc.
Pursuant to an Agreement of Purchase between Masadi Resources, Inc., and
Beverage Source Worldwide, Inc., dated November 26, 1997, the Company issued
1,375,000 shares of its $.001 par value common stock in exchange for 1,500
shares of Beverage Sources Worldwide, Inc. At December 31, 1997, the Company
had advanced to its subsidiary, Beverage Source Worldwide, Inc., $200,000 and in
the early months of 1998 the Company advanced and additional $457,844 to
Beverage Source Worldwide, Inc. Minutes of an Emergency Meeting of the Board
of Directors of the Company dated April 2, 1998, noted that Beverage Source
Worldwide, Inc., was without funds and was currently facing bankruptcy if the
Company did not advance substantial working capital funds. On May 5, 1998, the
Company filed a Complaint in the Superior Court of California, County of San
Diego, alleging that from the closing of the Agreement of Purchase, officers of
Beverage Source Worldwide, Inc., have breached their respective duties,
obligations and agreements with the Company, secreting and/or attempting to
secret the Companies assets, moving, transferring, assigning conveying
encumbrances, sequestering, using, disposing of, or shifting, any and all of the
assets and property of the Company, wrongfully withdrawing monies from the
Corporate bank accounts, misappropriating company funds, co-mingling the
operating expenses and cost or International Beverage Corporation or its wholly
owned subsidiary Beverage Source Worldwide, Inc., with independent business of
the officers and directors named in the suit. Further, that the named defendant
officers engaged in an extensive pattern of discussion with various entities for
the specific purpose of merging one or all of the said entities, without
disclosing to such entities and their representatives that Beverage Source
Worldwide, Inc., was a wholly owned subsidiary of the Company. In addition to
the above general categories of the complaint there are numerous specific
allegations of Malfeasance and Breach of Fiduciary Duty. The complaint
specifically intends that service of the summons and complaint serve as notice
of rescission of the agreement dated November 26, 1997. The Company believes
that such rescission will be validated by the courts.
The recission action taken with the filing of the complaint on May 5, 1998, and
the cessation of business activities by Beverage Source Worldwide, Inc., the
Company believes its control of Beverage Source Worldwide, Inc., was temporary
and that the cessation of business activities by the Officers of Beverage Source
Worldwide, Inc., cast significant doubt on the Company, as the parent company,
to control the subsidiary.
Further, the Company has made the assessment that the recission of the agreement
will be upheld by the courts without adverse effect to the Company and has made
provision for impaired assets and collectability losses at approximately 90% of
the fair value of the amounts owed the Company by Beverage Source Worldwide,
Inc.
The accompanying notes are an integral part of these financial statements
F-9
<PAGE>
Global Entertainment Holdings/Equities, Inc.
Notes to Financial Statement -Continued-
NOTE #4 - Software Development for Licensing & Recognition of Income from
Software Licensing
The Company has expensed costs to internally create computer software until such
time as technological feasibility was established. Technological feasibility is
considered to be established when a detail program design is completed. After
the detailed program design has been established the Company has capitalized the
costs of its software products it intends to license to the gaming and wagering
industry. Software development costs will be amortized on a ratio of the
current revenue to anticipated total revenue from the sales of the product or a
straight line amortization of the product cost over the estimated three years
useful life of the product master. Because the product is subject to rapid
technological advances the Company has elected to amortize its computer programs
software held for licensing over a three year period.
Revenue from the licensing of software programs is recognized when actual
delivery of the products has occurred, the fee is fixed and determinable, and
collectability is probable. Fees that Interactive Gaming and Wagering, Inc.,
may be entitled to that are based upon the Licensees' future sales are referred
to as royalties and are not recognized until such time as the Licensee has
actually earned revenue through the use of the software and in accordance with
the licensing agreement has notified Interactive Gaming and Wagering, Inc., of
its sales and has been verified by a representative of Interactive Gaming and
Wagering, Inc. Once Interactive Gaming and Wagering, Inc., has been notified
that royalties are due from the use of its products and collectability is
probable, royalty income is recognized. Revenues earned from efforts expended
to assist a purchaser establish a base for operations are known as hosting
revenues and are recognized upon receipt of the funds.
The Company does not engage in any gaming or wagering activities that could be
construed to be in competition with the activities of the licensing of its
software products.
NOTE #5 - Stockholders' Equity
Preferred Stock;
The Company has 25,000,000 shares of preferred stock $.001 par value
authorized. These preferred shares may be issued in one or more series at
the discretion of the Board of Directors.
Common Stock;
The Company has 100,000,000 shares of common stock $.001 par value
authorized. Each shareholder of record shall have one vote for each share
of common stock outstanding in his or her name on the books of the
Corporation. Cumulative voting shall not be allowed. No shareholder shall
have pre-emptive or similar rights.
The accompanying notes are an integral part of these financial statements
F-10
<PAGE>
Global Entertainment Holdings/Equities, Inc.
Notes to Financial Statement -Continued-
NOTE #5 - Stockholders' Equity -Continued-
Stock Options;
The Company will issue to the President of Interactive Gaming & Wagering,
NV, Stock Purchase Options, to be assigned at his discretion, which vest
according to the following: At year end 1998, if Interactive Gaming and
Wagering, Inc., has net earnings of $207,000, a three (3) year option to
purchase 225,000 shares of the Company's $.001 non-assessable, par value
common stock at a price not less than $1.50 per share. At year end 1999,
if Interactive Gaming and Wagering, Inc., has net earnings of $5,666,000,
a three (3) year option to purchase 1,800,000 shares of the Company's $.001
non-assessable, par value common stock at a price not less than $1.50 per
share. At year end 2000, if Interactive Gaming and Wagering, Inc., has net
earnings of $14,959,000, a three (3) year option to purchase 2,475,000
shares of the Company's $.001 non-assessable, par value common stock at a
price not less than $1.50 per share. Interactive Gaming & Wagering, NV, met
the net earnings requirements and will issue the options for 1998 in 1999.
Stock Split;
On August 19, 1998 the Company effected a one for seven reverse stock split
of its outstanding shares.Effective August 23, 1999, all outstanding common
shares of stock were split on a three for one basis. In the financial
statements presented at June 30, 1999 retroactive restatement of the
outstanding shares on the balance sheet, statement of stockholders' equity,
and the shares used to compute basic earnings per share and fully diluted
earnings per share has been made.
The accompanying notes are an integral part of these financial statements
F-11
<PAGE>
Global Entertainment Holdings/Equities, Inc.
Notes to Financial Statement -Continued-
NOTE #6 - Property, Equipment and Depreciation
The Company capitalized the purchase of equipment for purchase in excess of $300
per item. Capitalized amounts are depreciated over the estimated useful life of
the asset using the straight line method of depreciation. At June 30, 1999 and
December 31, 1998, the Company had property and equipment as follows:
<TABLE>
<CAPTION>
Accumulated Depreciation
Depreciation Cost Cost Expenses
Assets 1999 1998 Life 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C> <C>
Office Improvements $ 24,090 $ 1,970 $ -0- $ -0- $ -0- $ -0-
Computer Equipment 626,933 67,173 3 51,116 26,509 77,625 26,509
Furniture & Fixtures 85,826 21,790 3 13,136 6,360 19,496 6,360
Packages Software 10,101 7,289 3 375 2,430 2,805 2,430
Automobile 43,949 -0- 2,822 -0- 2,822 -0-
Totals $ 790,899 $ 98,222 $ 67,449 $ 35,299 $ 102,748 $ 35,299
Software Design for
Licensing $ 328,390 $ 327,390 $ 63,390 $ 110,592 $ 173,982 $ 110,592
Website Design &
Development 84,279 -0- 5,137 -0- 5,137 -0-
</TABLE>
NOTE #7 - Notes Payable
<TABLE>
<CAPTION>
The Company has the following notes payable obligations. 1999 1998 1997
<S> <C> <C> <C>
Note Payable to an Individual, Interest at 10%,
Due Date July 21, 2000 $ 100,000 $ 100,000 $ -0-
Note #1 to an Officer at 8% Interest, Due on Demand 20,000 20,000 -0-
Note #2 to an Officer at 8% Interest, Due on Demand 20,000 20,000 -0-
Note #3 to a Related Party at 8% Interest, Due on Demand 75,000 75,000 115,000
Note #4 to a Related Party 0% Interest -0- -0- 135,000
Note #5 to a Related Party 10% Interest, Due August 2000 225,000 -0- -0-
Total Notes Payable $ 440,000 $ 215,000 $ 250,000
Less Current Portion 165,000 165,000 250,000
Net Long Term Debt $ 275,000 $ 50,000 $ -0-
</TABLE>
The accompanying notes are an integral part of these financial statements
F-12
<PAGE>
Global Entertainment Holdings/Equities, Inc.
Notes to Financial Statement -Continued-
NOTE #7 - Notes Payable - Continued
Following are maturities of long term debt for each of the next five years.
Year Notes Payable Capital Lease
1999 $ 105,000 $ 18,044
2000 325,000 22,338
2001 -0- 17,556
2002 -0- 13,454
2003 -0- 4,385
Total $ 430,000 $ 75,777
During 1997, the Company issued a $125,000 Note Payable to a Stockholder for
25,000 Shares of Restricted Stock. As a result of the restriction the estimated
fair value of the stock cannot be determined at December 31, 1997. Management
elected to record the Restricted Shares at the same value as the note. The
Company intended to sell the securities in 1998 when the restriction period
expired in July. If the proceeds of the sale exceeded $196,000, which would be
paid to the stockholder, and the Company would keep the excess. As a result of
the recission of the Beverage Source Worldwide, Inc., Agreement, (Note #3), the
Restricted Shares were returned to the shareholders and the note payable was
canceled.
The Company has lease assets as follows;
Current
Asset Cost Balance Portion
Pentium Computer $ 14,348 $ 8,250 $ 4,782
Dell Computer 5,260 4,776 4,776
Automobile 43,949 42,095 3,922
Dell Computer 21,085 20,655 7,020
Total $ 84,642 $ 75,777 $ 20,500
The Company has computed U.S. federal income taxes on the revenue of its wholly
owned foreign subsidiary. Federal taxes are computed on current period revenues
net of net operating losses carried forward from proceeding period and credit
for foreign taxes. The Company has also recorded $16,369 in taxes due to the
Netherland Antilles based on earnings in Curacoa.
F-13
The accompanying notes are an integral part of these financial statements
<PAGE>
Global Entertainment Holdings/Equities, Inc.
Notes to Financial Statement -Continued-
NOTE #8 - Acquisition of Interactive Gaming and Wagering NV
Pursuant to an Agreement of Purchase and Sales date May 1998, the Company issued
5,134,500 shares of its common stock to acquire 30,000 shares, 100% of the
issued and outstanding shares of Interactive Gaming and Wagering NV, a
Netherlands Antilles Corporation.
Interactive Gaming and Wagering NV, was incorporated in Curacao, Netherlands
Antilles, on May 19, 1997, and is engaged in the conception and creation of
software programs for the gaming and wagering industry.
The acquisition of Interactive Gaming and Wagering NV, was accounted for using
the purchase method of accounting.
NOTE #9 - Income Taxes
The Company has incurred losses that can be carried forward to offset future
earnings if all provisions of the Internal Revenue Code are met. These losses
are as follows:
Expiration
Year of Loss Amount Date
1997 $ 31,923 2017
1998 278,579 2018
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax assets in
future years. Due to the uncertainty as to the utilization of the net operating
loss carryforward, an evaluation allowance has been made to the full extent of
any tax benefit that net operating losses may generate.
Current Tax Asset Value of Net Operating Loss
Carryforward at Current Prevailing Tax Rate 1999 1998
Federal Income Tax $ -0- $ 102,938
Evaluation Allowance -0- ( 102,938)
Net Tax Asset $ -0- $ -0-
Current Income Tax Expense $ 58,140 $ -0-
Deferred Income Tax Benefit -0- -0-
The accompanying notes are an integral part of these financial statements
F-14
<PAGE>
Global Entertainment Holdings/Equities, Inc.
Notes to Financial Statement -Continued-
NOTE #10 - Operating Lease Obligations
The Company leases office facilities in Omaha, Nebraska. The lease commenced
February 1, 1999 and terminates January 31, 2004. Lease obligations for the
term of the lease are as follows;
Year Amount
1999 $ 13,000
2000 15,850
2001 16,150
2002 16,450
2003 16,750
2004 1,400
Total $ 79,600
The subsidiary leases office facilities in Curacoa, Netherland Antilles. The
lease commences January 1, 1999 and terminates December 31, 2002. Lease
obligations for the term of the lease are as follows:
Year Amount
1999 $ 102,427
2000 124,760
2001 124,760
2002 69,698
Total $ 421,645
NOTE #11 - Concentration of Credit Risks
The Company maintains cash balances at several banks. Accounts at institutions
within the United States are insured by the Federal Deposit Insurance
Corporation up to $100,000. Deposits on occasion may exceed the insured
amounts.
Cash deposited in the Antilles Banking Corporation is held in United States
dollars and all payments from the account and deposits to the account are made
in U.S. dollars. This account is not insured but subject to the provisions of
the Netherland Antilles banking regulations.
NOTE #12 - Cash Set Aside for Property Acquisition
An employee of Interactive Gaming and Wagering, NV., imported an automobile from
the United States to Curacao. The Company placed in an escrow fund $6,348 for
possible custom duties on the employee's auto. Interactive Gaming & Wagering,
NV., has requested a waver of such custom duties from the government of Curacoa.
The accompanying notes are an integral part of these financial statements
F-15
<PAGE>
Global Entertainment Holdings/Equities, Inc.
Notes to Financial Statement -Continued-
NOTE #13 - Related Party Transactions
The President of Interactive Gaming & Wagering, N.V., has loaned the Company
$20,000. The Company has accrued interest on the loan at 8% interest per annum.
The President of Global Entertainment Holdings/Equities, Inc., has loaned the
Company $20,000 and interest has been accrued at 8% per annum. A related party
of the President of Interactive Gaming & Wagering, NV and of Global
Entertainment Holdings/Equities, Inc., has loaned to Interactive Gaming &
Wagering, NV $75,000 at 8% interest per annum. This loan is due on demand. In
addition this related party has loaned to Global Entertainment Holdings/
Equities, Inc., $225,000 with interest at 10% per annum due August 1, 2000.
NOTE #14 - Litigation
As previously noted in Note #3, the Company has filed suit in the Superior Court
of California, County of San Diego. The suit names former officers of
International Beverage Corporation and Beverage Source Worldwide and seeks
rescission of the acquisition of Beverage Source Worldwide, Inc., and damages in
sums and amounts presently unknown, but not less than $1,000,000.
The defendants have filed a counter complaint alleging damage in amounts not
less than $1,000,000.
The Company's Counsel has informally indicated that rescission and breach of
fiduciary duty present the strongest and most beneficial approvals for the
Company to pursue, as these causes of action offer both compensation and
punitive or exemplary damage option.
Counsel indicate that rescission is more likely than not to occur and will not
present any adverse effect to the Company. No estimate for the award of damages
can be made at this time.
NOTE #15 - Subsequent Events
The Company is negotiating to acquire 100% of the issued and outstanding stock
of Prevail Online, Inc, a Colorado Corporation, with principle offices in San
Francisco, California.
NOTE #16- Year 2000 Computer Compliance
The Company has completed its Year 2000 Compliance review and testing. Systems
providing customer services, the Company's critical existing systems are no more
than one year old and none of these systems have Year 2000 problems. These
systems have been inventoried and a Systems test has been completed. Many of
the critical systems have been migrated to new hardware and software platforms
to increase reliability and capacities. All newly acquired hardware systems,
operating systems, and software are required to have vendor certification for
Year 2000 compliance. Additionally, the Company has tested the existing systems
for Year 2000 Compliance. It has been determined that the existing billing and
billing presentment systems are Year 2000 compliant. Based on growth, the
Company plans to implement new hardware platforms and software systems that
should be Year 2000 compliant and therefore costs specifically allocated to Year
2000 compliance may not be significant, and have not been significant to date.
The nature of the Company's business makes it dependent on computer hardware,
software, and operating systems that are susceptible to Year 2000 issues.
Failure to attain at least minimum levels of Year 2000 compliance would have a
material adverse effect on the Company's ability to deliver Services. The
Company believes that its banking relationships, and transfer agent are Year
2000 Compliant. Should any of these third party vendors not be Year 2000
Compliant, the Company will experience little to no adverse material impact on
its cash flow or prohibit its ability to continue operations.
The accompanying notes are an integral part of these financial statements
F-16
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No.
Description of Document
2.0 Merger Agreement IBC-Global Entertainment Holdings/Equities, Inc.
2.1 Agreement of Purchase Global Entertainment Holdings/Equities, Inc.-IGW
2.2 Agreement Global Entertainment Holdings/Equities, Inc. and Prevail
Online, Inc.
3.0 Masadi Resources, Inc. Articles
3.1 Amendment name change Masadi Resources, Inc. to IBC
3.2 Transfer Masadi Resources, Inc. name and tradename to IBC
3.3 Amendment name change IBC to Global
3.4 Masadi Resources, Inc. Bylaws
4.0 Specimen form of Stock Certificate
10.0 Promissory Note Steven Abboud--$20,000
10.1 Promissory Note Bryan Abboud--$20,000
10.2 Promissory Note Joann Abboud--$75,000
10.3 Promissory Note Joann Abboud--$225,000
10.4 Subscription Agreement James Zilligen
10.5 Promissory Note James Zilligen--$100,000
10.6 Global Entertainment Holdings/Equities, Inc. Lease
21.0 List of Subsidiaries
27.0 Financial Data Schedule
DESCRIPTION OF EXHIBITS
The required exhibits are attached hereto.
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: October 11, 1999
Global Entertainment Holdings/Equities, Inc.
By:/s/Steven M. Abboud
MERGER AGREEMENT
INTERNATIONAL BEVERAGE CORPORATION
and
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
This plan and agreement of merger made and entered into by and between
International Beverage Corporation, a Colorado corporation, and Global
Entertainment Holdings/Equities, Inc., a Colorado corporation, referred to
collectively in this agreement as the constituent corporations.
The respective Board of Directors of the corporations deem it advisable that the
corporations merge into one corporation as the surviving corporation, as
specified in this agreement.
International Beverage Corporation, constituent corporation, has an authorized
capitalization of 100,000,000 common shares, par value $.001 per share, of which
318,970 shares are issued and outstanding, and 22,786 warrants, exercisable at
$14.00 per share which will expire on December 10, 1999. There are also
25,000,000 preferred shares, par value $001 per share, of which there are no
shares issued and outstanding.
Global Entertainment Holdings/Equities, Inc., constituent corporation, has an
authorized capitalization of 100,000,000 common shares, par value $001 per
share, of which 2,232,790 shares are issued and outstanding and, 25,000,000
preferred shares, par value $001 per share, of which there are no shares issued
and outstanding.
Now therefore, in consideration of these mutual covenants and agreements, the
constituent corporations agree as follows:
1. Merger and Surviving Corporation. Global Entertainment Holdings/
Equities, Inc., constituent corporation, the non-surviving corporation, is
merged into International Beverage Corporation, constituent corporation, as the
surviving corporation.
2. Conversion of Shares. The manner and basis of converting the shares of
the nonsurviving corporation into shares of the surviving corporation is as
follows:
a. None of the shares of any class of the capital stock of the surviving
corporation issued and outstanding as of the effective date of this merger shall
be converted as a result of the merger, and all these shares shall remain
unchanged.
b. 1,863,925 shares of the common stock of the non-surviving corporation
shall be and become 2,795,888 shares of the common stock of the surviving
corporation, whether surrendered for conversion and exchange or not, and shall
represent only shares in the surviving corporation for all corporate and legal
purposes, subject, however, to the rights of dissenting shareholders; and, the
shares shall be called in for cancellation and exchange for shares in the
surviving corporation on this merger taking effect on the preceding basis.
c. All treasury shares of each constituent corporation shall be cancelled
and not reissued upon this merger taking effect.
d. No fractional shares shall be issued by reason of the conversion and
exchange of shares, and any fractional interests arising in either constituent
corporation shall be eliminated by purchase by the surviving corporation.
<PAGE>
3. Approval of Shareholders and Directors. This Plan and Agreement of
Merger shall be submitted for approval, to the Board of Directors, and to the
shareholders, of each of the constituent corporations, in accordance with the
provisions of the Colorado Business Corporation Act, and their respective
articles of incorporation and bylaws as may be appropriate, to be accomplished
and concluded within the oncoming period of time ending September 15, 1998.
Should these submissions not be made or approvals of the directors and
shareholders of each constituent corporation not be secured or effected within
this period of time, and this Plan and Agreement not therefore approved and
adopted as contemplated, then it shall, without any further action of or by the
parties, other than certification to the other party of the results of the vote
by the secretary of the constituent corporation the shareholders of which shall
not have approved or adopted the plan and agreement of merger, be cancelled and
annulled, and the constituent corporations each discharged without liability to
the other.
4. Effect of Merger on Non-surviving Corporation. Upon this merger taking
effect, the constituent corporations, parties to this Agreement, shall be and
become a single corporation and be the surviving corporation designated in this
Agreement, the separate existence of the nonsurviving corporation shall cease,
and the surviving corporation shall have the rights, privileges, immunities, and
powers, and be subject to all the duties and liabilities of a corporation
organized under the Colorado Business Corporation Act.
5. Effect of Merger on Surviving Corporation. On this merger taking effect,
the surviving corporation shall possess all the rights, privileges, immunities,
and franchises, of a public as well as a private nature, of each of the merging
corporations, and all property, real, personal, and mixed, and all debts due on
whatever account, including subscriptions to shares, and all other choses in
action, and every other interest of or belonging to or due to each of the merged
corporations shall be deemed to be transferred to and vested in this single
corporation without further act or deed; and the title to any real estate, or
any interest vested in any of these corporations shall not revert or be in any
way impaired by reason of the merger. This transfer to and vesting in the
surviving corporation shall be deemed to occur by operation of law, and no
consent or approval of any other person shall be required in connection with any
transfer or vesting unless the consent or approval is specifically required in
the event of merger by law or by express provision in any contract, agreement,
decree, order, or other instrument to which any constituent corporation is a
party or by which it is bound.
6. Liabilities and Obligations. On this merger taking effect, the surviving
corporation shall become responsible and liable for all the liabilities and
obligations of each of the merged corporations; and any claim existing or action
or proceeding, whether civil or criminal, pending by or against any of these
corporations may be prosecuted as if the merger had not taken place, or the
surviving corporation may be substituted in its place. Neither the rights of
creditors nor any liens on the property of any of these corporation shall be
impaired by the merger.
7. Transfer of Property. The non-surviving corporation agrees that from
time to time and as and when requested by the surviving corporation or by its
successors or assigns, to execute and deliver or cause to be executed and
delivered all the deeds and instruments, assignments, assurances in the law, or
take action, as the surviving corporation may deem necessary or desirable to
vest in and confirm to the surviving corporation title to and possession of any
property of the non-surviving corporation acquired or to be acquired by reason
of the merger, and its proper officers and directors shall and will execute and
do all acts and things and execute any papers and documents that are necessary
or proper to carry out the purposes of this merger.
8. Articles of Incorporation. The articles of incorporation of the
surviving corporation as in
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effect on the date this merger takes effect shall continue in full force and
effect except as the articles may be necessarily amended or changed either by
the filing of this plan and agreement or by any amendment as is required to
comply and carry out any term or provision contained in this plan and agreement.
9. Bylaws. The bylaws of the surviving corporation as existing on the date
this merger takes effect shall be and remain the bylaws of the surviving
corporation until the bylaws are altered, amended or repealed according to the
provision made or as provided by law.
10. Officers. The officers of the surviving corporation, party to this
agreement, shall remain in office for the remainder of their respective terms of
office and until their successors shall have been elected and qualified.
11. Directors. The directors of the surviving corporation, party to this
Agreement, on this merger taking full effect, shall be three (3) in number and
be those persons named below, to serve for the remainder of their present terms
of office of the surviving corporation and/or until their successors shall have
been elected and qualified:
Directors Addresses
Michael S. Luther 1611 S. 91st Avenue-Omaha, NE 68124
Michael A. Abboud 11605 Westwood Lane-Omaha, NE 68144
Brenda J. Abboud 11904 Buckingham Rd-Austin, TX 78759
12. Warranties. The constituent corporations agree, and warrant each with
the other, that they will cooperate with the other in carrying out the terms and
provisions of this plan and Agreement; that they and each of them will not issue
or sell any shares of capital stock, except shares issued pursuant to rights or
warrants outstanding, issue rights to subscribe or options to purchase any
shares of their capital stock, amend the articles of incorporation or bylaws of
their corporation except as may be required to comply with the terms and
provisions of this Plan and Agreement, issue or contract any funded debt,
declare and pay any dividend or make any other distribution of surplus except a
regular quarterly dividend or scheduled dividend on preferred stock, undertake
or incur any obligations or liabilities except in the ordinary course of
business and those fees and expenses in connection with the negotiation and
consummation of this merger, mortgage, pledge or encumber any real or personal
property, or interest held by them, sell, assign or dispose of any trademark,
trade name, patent or other intangible assets, default in performance of any
material contract or other obligation, waive any right of substantial value,
invest in or purchase any security, equity or property not in the usual course
of business; and each of them represent that all state, federal and local taxes
and assessments, excise taxes, ad valorem taxes and sales taxes, withholding and
other employee related tax obligations, are currently paid and not in default.
13. Abandonment of Merger. Notwithstanding anything to the contrary or
implied in this plan, this Plan and Agreement may be abandoned without further
liability and obligation prior to the filing of the articles of merger, even if
subsequent to approval being given by the shareholders of both constituent
corporations, by the Board of Directors of either constituent corporation by
resolution duly adopted and notice received by the other constituent
corporation, in the event or on the contingency that:
a. A material adverse change occurs in the business, properties, operations
or financial condition of the other constituent corporation;
b. Any drastic or substantial change occurs in the economic or political
condition
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generally of Colorado or the United States which would affect the advisability
of completing the contemplated merger;
c. On the discovery that any financial statements, or other information
furnished by the other constituent corporation is highly inaccurate, misleading
in material respect, or omits important relevant data or information;
d. Either of the constituent corporations becomes involved in any
litigation not previously disclosed to the other, either pending or threatened,
which would materially affect the financial condition or reputation of the
constituent corporation so involved; and
e. Any action or suit to enjoin or restrain or restrict the contemplated
merger has been filed in any court or agency having jurisdiction in the matter.
14. Expenses. In the event the contemplated merger is not completed, each
constituent corporation, parties to this plan, shall bear their own expenses
incurred in the negotiation and processing of this Plan and Agreement. If the
contemplated merger is completed and takes effect, the surviving corporation
shall pay all expenses arising by reason of the merger or that remain owing and
unpaid by either constituent corporation.
15. Counterpart Agreements. This Plan and Agreement of Merger may be
executed in counterparts, each of which shall be deemed an original document,
but together they shall be deemed to constitute only one agreement.
16. Notices. Notice or other transmittals to the constituent corporations
shall be properly made or served if delivered by hand or by certified or
registered mail at or to the addresses listed below:
International Beverage Corporation Global Entertainment Holdings/Equities, Inc.
8949 J Street, #5 8949 J Street, #5
Omaha, NE 68127 Omaha, NE 68127
Dated: August 27, 1998
/s/Michael Luther
By: President
International Beverage Corporation
Attest:
/s/Brenda Abboud
Secretary
International Beverage Corporation
By: /s/Steven M. Abboud
President
Global Entertainment Holdings/Equities, Inc.
Attest:
/s/Crystal Secora
Secretary
Global Entertainment Holdings/Equities, Inc.
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ARTICLES OF MERGER
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporations adopt the following articles of merger:
First: The plan of merger approved by the shareholders of each of the
undersigned corporations is as set forth in Exhibit "A" which is attached hereto
and incorporated herein by reference immediately or upon the filing with the
Secretary of State for the State of Colorado.
Second: Shareholder approval of the plan of merger was not required [or, as
to each of the undersigned corporations, whose shareholders were required to
vote for approval, the number of votes cast for the plan by each voting group
entitled to vote separately on the merger was sufficient for approval by that
voting group].
Third: These articles are to become effective on September 25, 1998, unless
prior to the effective date they are abandoned and a statement of abandonment is
filed prior to the effective date.
Dated: August 27, 1998.
/s/Michael S. Luther /s/Steven M. Abboud
International Beverage Corporation Global Entertainment Holdings/Equities, Inc.
By: Michael S. Luther By: Steven M. Abboud
Title: President Title: President
AGREEMENT
OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE, dated this_____ day of May 1998, by
and between:
Global Entertainment Holdings/Equities, Inc., a Colorado Corporation
(herein referenced to as "Purchaser"), with its principle
office at 8949 J Street,Suite 5, Omaha, Nebraska 68127
and
Bryan Abboud, ("Major Shareholder"),
and
owners of all the outstanding stock
of the Seller, (herein collectively referenced to as "Shareholders")
and
Interactive Gaming & Wagering, NV or its assigns,
a Curacao Corporation (herein referred to as "Seller")
WITNESSETH:
WHEREAS, Purchaser has expressed an interest in the purchase and acquisition
of all of the issued and outstanding shares of Seller's capital stock, Seller
and its Shareholders; and
WHEREAS, Seller and Shareholders wish to sell on the terms and the
conditions and in the manner reflected herein, (100%) of the authorized, issued
and outstanding shares of capital stock of Seller; and
WHEREAS, Seller and Shareholders warrant that they own 100% of the issued
and outstanding capital stock of the Seller; and
WHEREAS, during the negotiations Purchaser was unable to verify the validity
of the financial, marketing, personnel and legal information furnished by
Seller; and
WHEREAS, Purchaser assumed the information provided by Sellers are true and
correct in all material respects and Purchaser and Seller reached the terms of
the acquisition of Seller's shares based upon this information; and
WHEREAS, Purchaser intends to conduct a thorough investigation of Seller's
business to independently verify this information; and
WHEREAS, Purchaser expects to expend substantial time, money and effort,
including both its internal staff and outside Consultants, investigating
Seller's business; and
WHEREAS, as a result of such investigation of the business of Seller,
Purchaser will divert much of its acquisition efforts away from other promising
prospects; and
WHEREAS, Purchaser agrees to provide Seller with a copy of all of its final
studies and reports in the event Purchaser elects not to purchase the shares of
Seller.
NOW, THEREFORE, in consideration of the premises and covenants and
Agreements contained herein, the Purchaser, and Seller agree to give and to
grant Purchaser a 90 day right to purchase its shares under the terms and
conditions set forth hereafter.
<PAGE>
1. EXECUTION OF AGREEMENT. This Agreement shall at all times from the date of
its execution be a binding obligation of Seller and Shareholders. The Purchaser
shall be, thereafter, fully bound by all the terms and conditions of this
Agreement and shall thereafter be liable for any breach thereof. Prior to the
execution of the Agreement, Purchaser may at any time and for any reason elect
not to purchase shares from the Seller and Shareholders and Purchaser shall on
account thereof not be liable for any damages or additional consideration accept
as expressly stated hereinafter in this Section 1. In the event Purchaser
elects not to purchase the shares, Purchaser agrees to deliver to Seller a copy
of all financial reports and studies made in connections with its investigation
of Seller. Further, Purchaser covenants and agrees not to disclose to
competitors any confidential information gained as a result of its investigation
of Seller's business.
2. PURCHASE AND SALE. Seller agrees to sell and transfer to Purchaser, and
Purchaser agrees to purchase from Seller, the shares to be sold (as hereinafter
defined) on the Closing Date, at the Purchase Price, and upon, and subject to
the terms and conditions hereinafter set forth.
ARTICLE I
DEFINITIONS
1.1 GENERAL CONSTRUCTION: For purposes hereof, except as otherwise
expressly provided:
1.1.1 Defined terms include the plural as well as the singular;
1.1.2 All accounting terms not otherwise defined have the meanings
assigned under generally accepted accounting principles;
1.1.3 All references to Exhibits are to all the Exhibits attached to
this Agreement; and
1.1.4 Pronouns of either gender or neuter shall include, as
appropriate, the other pronoun forms.
1.2 DEFINITIONS: As used in this Agreement, the following terms shall
have the following definitions.
1.2.1 Affiliate: When used with respect to a person, an "affiliate"
of that person is a person controlling, controlled by, or under common control
with that person.
1.2.2 Agreement: This Agreement, including all of its Exhibits and
all other documents specifically referred to in this Agreement that have been or
are to be delivered by a party to this Agreement to another such party in
connection with the Transaction and this Agreement and including all duly
adopted amendments, modifications, and supplements to or for this Agreement,
Exhibits and other documents.
1.2.3 Unaudited Financial Statements: With respect to the Seller,
Interactive Gaming and Wagering, NV.
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1.2.4 Closing: As defined in Article VIII.
1.2.5 Closing Date: As defined in Section 8.1.
1.2.6 Seller's Balance Sheet: Balance Sheet as of____________included
in the Unaudited Financial Statements.
1.2.7 Entity: A corporation, partnership, sole proprietorship, joint
venture, or other form of organization formed for the conduct of a business,
whether active or passive.
1.2.8 GAAP: Generally accepted accounting principles, as in effect on
the date of any statement, report or determination that purports to be, or is
required to be, prepared or made in accordance with GAAP. All references herein
to financial statements prepared in accordance with GAAP shall mean in
accordance with GAAP consistently applied throughout the periods to which
reference is made.
1.2.9 Inventories: The stock of goods held, if any, by the Seller
from time to time in the ordinary course of the business of the Seller, in the
form in which such inventories then are held or after incorporating with other
goods or items, or the like.
1.2.10 Purchaser's Financing: The Purchaser's public or private
offering of debt or equity instruments.
1.2.11 Liabilities: At any point in time (the "Determination Time"),
the obligations of a person or Entity, whether known or unknown, contingent or
absolute, recorded on its books or note, arising or resulting in any way from
facts, events, agreements, obligations or occurrences that existed or transpired
at a prior point in time, or resulted from the passage of time to the
Determination Time, but not including obligations accruing or payable after the
Determination Date to the extent (but only to the extent) that such obligations
(1) arise under previously existing agreements for services, benefits, or other
considerations, and (2) accrue or become payable with respect to services,
benefits, or other considerations received by the person or Entity after the
Determination Time.
1.2.12 Permits: Any permits, licenses, orders, approvals, franchises,
registrations, authorizations or other approvals from any federal, state, local
and foreign governmental or regulatory body or authority (public or self-
regulatory).
1.2.13 Subsidiary: A corporation with respect to which another Entity
owns, directly or indirectly, shares entitling it to elect a majority of the
Board of Directors or in which it has a majority of the equity interest.
1.2.14 Transaction: The purchase of all (100%) of the authorized,
issued and outstanding, no par value shares of capital stock of the Seller by
the Purchaser from the Shareholder, as provided in Article II of this Agreement,
Purchaser will exchange one million one hundred forty-one thousand (1,141,00)
shares of its .001 par value common stock for 30,000
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shares (100%) of all the Seller's authorized, issued and outstanding no par
value common stock.
ARTICLE II
THE TRANSACTION
THE TRANSACTION: Subject to the terms, conditions, provisions and limitations
contained in this Agreement, the Purchaser, in reliance upon the representations
and warranties of the Shareholder and Seller made herein and in the Exhibits
attached hereto, will at the Closing, acquire from the Shareholder and the
Shareholder, in reliance upon the representations and warranties of the
Purchaser and the majority Shareholders of the Purchaser, made herein will at
the Closing, transfer, convey and assign (with full assignment powers) to the
Purchaser, free and clear of any and all liens, charges or other encumbrance,
30,000 shares of common stock, no par value, of the Seller, comprising all
(100%) of the authorized, issued and outstanding shares of capital stock of the
Seller and representing their entire ownership of equity securities of the
Seller. Any corporate actions necessary to accomplish this or to obtain
outstanding shares of the Seller for conveyance to the Purchaser at Closing
shall be the sole responsibility of the Shareholder and the Seller; and, the
Purchaser hereby agrees to transfer, convey and assign (with full assignment
powers) to Sellers, one million one hundred forty-one thousand (1,141,00) shares
of the Purchaser's $.001 non-assessable, par value common stock which represents
68.04% of the Purchaser's issued and outstanding common stock, as of the
closing.
2.1 OPTIONS TO SHAREHOLDER: The Company will issue to the Shareholder, Bryan
Abboud, Stock Purchase Options, to be assigned at his discretion, based on the
following: At year end 1998, if the Company has net earnings of $423,000.00, a
three (3) year option to purchase 50,000 shares of the Company's $.001 non-
assessable, par value common stock at $1.00. At year end 1999, if the Company
has net earnings of $5,699,000, a three (3) year option to purchase 400,000
shares of the Company's $.001 non-assessable, par value common stock at $1.00.
At year end 2000, if the Company has net earnings of $15,309,000, a three (3)
year option to purchase 550,000 shares of the Company's $.001 non-assessable,
par value common stock at $1.00. See Projections, included therein and
referenced as Exhibit "A".
2.2 FAILURE OF SHAREHOLDER TO MEET PROJECTIONS: If at year end, Shareholder
has not met the projections as stated in section 2.1, the options will be issued
on a pro rata share, based on the actual net earnings of the Company. If the
Company has not attained any net earnings at each year end, no options will be
issued at that time.
2.2.1 The option holders shall be entitled to all of the benefits, in
the same ratio, as the common stock holders, in the event of a stock split.
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2.2.2 During the term of this Agreement, the Shareholder shall continue
to operate the Seller in accordance with its current operating policies and at
the closing of the written transaction, all franchise, distribution and purchase
agreements with the Seller or any other franchise or Internet Gaming and
Software operation shall remain in full force and effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDER AND THE SELLER
The Shareholder, jointly and severally, and the Seller make the following
representations and warranties to the Purchaser, each of which shall be deemed
material, and all of which are qualified with respect to the effect, if any,
that any potential claims by Interactive Gaming and Wagering, NV or any of their
controlling persons or Shareholders has or may have relating to this Agreement
and/or former relationships of Shareholder with those companies, which matters
have been discussed by the parties in detail prior to the execution of this
Agreement:
3.1 VALID CORPORATE EXISTENCE; QUALIFICATION: Seller is a corporation duly
organized, validly existing and in good standing under the laws of the Country
of Curacao. Seller has the corporate power and authority to carry on its
business as now being conducted. The Seller is duly qualified as a corporation
to do business, and is in good standing in each jurisdiction where the character
of the properties are owned or leased by it. A copy of the Seller's Certificate
of Incorporation (certified by the appropriate official of the Country of
Curacao) and by-laws and minute books (certified by the Seller's Secretary), as
amended to date, which will be delivered to the Purchaser at or prior to the
Closing, are true and complete copies of those documents as now in effect. The
minute books of the Seller contain accurate records of all meetings of its Board
of Directors, and stockholders since its incorporation, and accurately reflect
all transactions referred to therein.
3.2 CAPITALIZATION: The authorized capital stock of the Seller consists of
30,000 shares of common stock, no par value per share. There is no other
capital stock authorized for issuance. As of the date hereof, there are 30,000
shares of common stock validly issued and outstanding, fully paid and non-
assessable and no shares are reserved for issuance nor are there outstanding any
options, warrants, convertible instruments or other rights, agreements or
commitments to acquire common stock of the Seller. The shares are currently
held by the Shareholders (free and clear of all liens and encumbrances) as
follows:
3.3 CORPORATE AUTHORITY; BINDING NATURE OF AGREEMENT: The Seller has the power
to enter into this Agreement and to carry out its obligation hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Majority
Shareholders of the Seller and no other corporate proceedings on the
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<PAGE>
part of the Seller are necessary to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement constitutes the valid and binding obligation of the Seller and is
enforceable in accordance with its terms.
3.4 CONSENTS: There are no consents of governmental and other regulatory
agencies, foreign or domestic, and of other third parties required to be
received by or on the part of the Shareholder or the Seller, to enable it to
enter into and carry out this Agreement in all material respects.
3.5 FINANCIAL STATEMENTS: The Seller, prior to the Closing Date, will deliver
to the Purchaser, the Unaudited Financial Statements of the Seller. All of the
historical financial statements contained in such documents will have been
prepared from the books and records of the Seller. The Unaudited Financial
Statements and the consolidated audit will be prepared in accordance with GAAP,
and fairly and accurately reflect the financial position and condition of the
Seller as at the dates and for the periods indicated. Without limiting the
foregoing, at the date of the Seller's Balance Sheet, the Seller will have owned
each of the assets included in preparation of the Seller's Balance Sheet, and
for the valuation of such assets in the Seller's Balance Sheet, will not be for
more than their fair saleable value (on an item by item basis) at that date; and
the Seller will have no Liabilities other than those included in the Seller's
Balance Sheet, nor any Liabilities in amounts in excess of the amounts included
for them in the Seller Balance Sheet. From the date hereof, through the Closing
Date, the Seller will continue to prepare financial statements on the same basis
that it has done so in the past, will promptly deliver the same to the
Purchaser, and agrees that from and after such delivery, the foregoing
representations will be applicable to each financial statement so prepared and
delivered. The Unaudited Financial Statements will be prepared by the Company's
accountant, whose report thereon is included herein and referenced as Exhibit
"B".
3.6 NO UNDISCLOSED LIABILITIES: Except as set forth in the Seller's Balance
Sheet included in the Unaudited Financial Statements as Exhibit B, the Seller
has no material debts, liabilities or obligations, known or unknown, contingent
or absolute, in excess of $1,000, except those arising in the ordinary course of
business of the Seller and consistent with past practice.
3.7 ACTIONS SINCE THE SELLER'S BALANCE SHEET: Except as set forth and reflected
in this Agreement, since the date of the Seller's Balance Sheet, the Seller has
not:
3.7.1 incurred any material obligation or liability, known or unknown,
absolute or contingent, except those arising in the ordinary and usual course of
its business and those incurred in connection with the transactions contemplated
by this Agreement;
3.7.2 issued or sold, or agreed to issue or sell any capital stock of
the Seller or any securities convertible into or rights to acquire any such
capital stock or any dividend or distribution declared, set aside or paid on any
such capital stock;
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3.7.3 discharged or satisfied any lien or encumbrance, except in the
ordinary and usual course of business, or paid or satisfied any liability,
absolute or contingent, other than as set forth in the Seller's Balance Sheet in
the ordinary and usual course of business and those incurred in connection with
the transactions contemplated by this Agreement;
3.7.4 made any wage or salary increases or granted any bonuses other
than wage and salary increases and bonuses granted in accordance with its normal
salary increase and bonus policies;
3.7.5 mortgage, pledged or subjected to any lien, pledge, charge or
other encumbrance any of its properties or assets, or permitted any of its
property or assets to be subject to any lien or other encumbrance, except in the
ordinary and usual course of business;
3.7.6 sold, assigned or transferred any of its properties or assets,
except in the ordinary and usual course of business;
3.7.7 entered into any transaction or course of conduct not in the
ordinary and usual course of business;
3.7.8 waived any rights of substantial value, or canceled, modified or
waived any indebtedness for borrowed money held by it, except in the ordinary
and usual course of business;
3.7.9 made any loans or advances to any person or assumed, guaranteed,
endorsed or otherwise became responsible for the obligations of any person; or
3.7.10 incurred any indebtedness for borrowed money (except for
endorsement, for collection or deposit of negotiable instruments received in the
ordinary and usual course of business).
3.8 NO ADVERSE DEVELOPMENTS: Since the date of the Seller's Balance Sheet,
there has not been:
3.8.1 any material adverse changes in the assets, properties,
operations, financial condition or prospects of the Seller;
3.8.2 any damage, destruction or loss, whether covered by insurance or
not, having a material adverse effect on the business, operations, financial
condition or prospects of the Seller;
3.8.3 any entry into or termination of any material commitment,
contract, agreement or transaction affecting the Seller, including, without
limitation, any material borrowing or capital expenditure or sale or other
disposition of any material asset or assets, other than this Agreement and
agreements executed in the ordinary and usual course of business;
3.8.4 any transfer of or right granted under any material lease,
license, agreement, patent, trademark, trade name or copyright;
3.8.5 default or breach by the Seller in any material respect under any
contract or Permit;
3.8.6 any event other than in the ordinary and usual course of business
which could be
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reasonably expected to have a material adverse effect upon the business of the
Seller, and after reasonable inquiry by the Shareholder and the Seller, they
know of no development or threatened development of a nature that is, or which
could be reasonably expected to have a materially adverse effect upon the
business of the Seller or upon any of its assets, properties, operations or
financial conditions.
3.9 TAXES: All tax returns of Seller which are due have been duly filed and
are correct and all taxes, assessments and other governmental charges upon the
Seller which are shown to be due and payable thereon have been paid. All tax
returns of the Seller which become due prior to the Closing shall be timely
filed by the Seller. The Seller does not know of any ongoing tax audit,
proposed tax deficiency, assessment, charge or levy against it, the payment of
which is not adequately provided for on the books of the Seller. The Seller
will provide to the Purchaser prior to the Closing a true and correct copy of
its tax returns for the prior three years, any returns filed subsequent to the
date hereof.
3.10 OWNERSHIP OF ASSETS: The Seller owns outright, and has good, marketable
and insurable title to all of its assets and properties reflected in the
Seller's Balance Sheet of business since the Seller's Balance Sheet date, free
and clear of all liens, mortgages, pledges, conditional sales agreements,
restrictions on transfer or other encumbrances or charges whatsoever. The
Seller does not own any patents, copyrights, trademarks, trade names or other
similar intangible assets. No other person has any ownership or similar right
in, or contractual or other right to acquire any such right in, any of the
Seller's assets. The Shareholder and the Seller do not know of any potential
action by any party, governmental or other and no proceedings with respect
thereto have been instituted of which the Seller has notice that would
materially effect the Seller's ability to use and to utilize each of such assets
in its business. Exhibit "C" sets forth a listing of all major equipment owned
by the Seller, including a description thereof. All properties and other assets
owned by the Seller or used by the Seller in the conduct of its business are in
good operating condition and repair (ordinary wear and tear excepted), are
suitable for the conduct of its business as presently conducted, have been
properly maintained, and do not require any maintenance or repairs except for
routine maintenance and repairs that are not material in nature or in cost.
3.11 INSURANCE: Policies of fire, liability, workers compensation and other
forms of insurance maintained by the Seller, which are usual and customary in
the business of the Seller as to amount and scope, and are adequate to protect
the Seller against any reasonably foreseeable risk of loss, including business
interruption, are listed in Exhibit "D" and identifies for each policy, the
carrier, amount of coverage, annual premium, risks covered, placing broker or
agent, and other relevant information as to each. All policies listed in
Exhibit D have been provided to the
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Purchaser prior to the Closing. All premiums have been currently paid on such
policies, and all policies will be maintained and, if necessary, renewed through
the Closing Date. Neither the Shareholder nor the Seller have failed to give
any notice or present any claim under any such policy as to which any insurance
Seller is denying liability or defending under a reservation of rights clause or
otherwise.
3.12 LITIGATION, COMPLIANCE WITH LAW: There are no pending or threatened
actions, suits, proceedings or governmental investigations or reviews relating
to the Seller or any of its properties, assets or business or, to the knowledge
of the Shareholder or the Seller, any order, injunction, award or decree
outstanding, against the Seller or against or relating to any of its properties,
assets or business; and the Shareholder and the Seller, after reasonable
inquiry, knows of no basis for any such action, suits or proceedings or any such
governmental investigations, reviews, orders, injunctions or decrees. To the
knowledge of the Shareholder and the Seller, the Seller is not in violation of
any material law, regulation, ordinance, order, injunction, decree, award, or
other requirement of any governmental body, court or arbitrator relating to its
properties, assets or business.
3.13 COMPLIANCE WITH INSTRUMENTS; ETC: The Seller is not:
3.13.1 in default under any indenture, agreement or instrument to which
it is a party or by which it is bound; or
3.13.2 in violation of its Certificate of Incorporation, by-laws or of
any applicable law.
3.14 INVENTORIES: All Inventories of the Seller, whether or not reflected in
the Seller's Balance Sheet are of a quality and quantity usable and salable in
the ordinary course of business, except for obsolete items and items of below
standard quality, all of which in the aggregate are immaterial in amount. Items
included in such Inventories are carried on the books of the Seller, and are
valued on the Seller's Balance Sheet, at the lower of cost or market and, in any
event, are not greater than their net realizable value, on an item-by-item
basis, after appropriate deductions for cost of completion, marketing costs,
transportation expense and allocation of overhead. To the best knowledge of the
Seller, the Inventory is unadulterated and does not contain any ingredient or
substances prohibited by pertinent laws, rules or regulations and all labels for
and printed materials relating to the Inventory correctly represent the
ingredients thereto and comply with all laws, rules or regulations pertaining to
the labeling of the products comprising the Inventory.
3.15 TRADE NAMES: There are no trade names under which the Seller has conducted
any part of its business since inception.
3.16 REAL PROPERTY: The Seller owns no real property and leases the real
property. (See Lease, Exhibit "E")
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3.17 INTEREST IN COMPETITOR, SUPPLIERS OR CUSTOMERS: None of the officers,
directors or shareholders of the Seller or, to the best of their knowledge,
members of their immediate families, owns an interest in any person or firm
which is a competitor, supplier, or customer of or to the Seller or, has an
existing contractual relationship with the Seller.
3.18 ACCOUNTS PAYABLE: The accounts payable reflected on the Seller's Balance
Sheet, and those reflected in the most recent balance sheet included in the
Unaudited Financial Statements, and those reflected on the books of the Seller
at the time of the Closing, reflect all amounts owed by the Seller in respect of
trade accounts due and other payables of the Seller, and the actual Liability of
the Seller in respect of such obligations was not and will not be, on any of
such dates, in excess of the amounts, so reflected on the balance sheets or the
books of the Seller, as the case may be.
3.19 EMPLOYEES: To their best knowledge, the Seller has complied with all
laws, regulations and orders relating to the employees of its business,
including but not limited to OSHA, EEO, ERISA, and wages and hours. None of the
Seller's employees is represented by any labor union or collective bargaining
agent. The Seller does not maintain or make any employer contributions under
any bonus, profit sharing compensation, or other plans, agreements, trusts,
funds, or arrangements for the benefit of directors, officers or employees of,
or whose principal responsibilities relate to, the Seller, and there are no
employment, consulting, severance, or indemnification arrangements, agreements,
or understandings between the Seller and any current or former directors,
officers or other employees (or Affiliates thereof) of, or whose principal
responsibilities relate to, the Seller. Exhibit "F" identifies all present
employees of the Seller and their respective salaries. The Seller is not, and
following the Closing will not be, bound by any express or implied contract or
agreement to employ, directly or as a consultant or otherwise, any person for
any specific period of time, except as set forth pursuant to the provisions
hereof.
3.20 AGREEMENTS AND OBLIGATIONS; PERFORMANCE: Exhibit "G" sets forth a list of
material agreements to which the Seller is a party or is otherwise bound. Other
than these material agreements, the Seller is not party to or bound by any:
3.20.1 written or oral agreement or other contractual commitment,
understanding or obligation which involves aggregate payments or receipts in
excess of $2,000 that cannot be cancelled on 30 days or less notice without
penalty or premium or any continuing obligation or liability;
3.20.2 contractual obligation or contractual liability of any kind to
the Shareholder or Seller which will not be cancelled on or prior to the Closing
except as otherwise provided by this Agreement;
3.20.3 contract, arrangement, commitment or understanding with its
customers or any
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officer, employee, stockholder, director, representative or agent thereof for
the repurchase of products, sharing of fees, the rebating of charges to such
customers, bribes, kickbacks from such customers or other similar arrangements;
3.20.4 contract for the purchase or sale of any materials, products or
supplies or for any services, which commits or will commit it for a fixed term;
3.20.5 contract of employment with any employee not terminable at will
without penalty or premium or any continuing obligation or liability, except as
otherwise provided by this Agreement;
3.20.6 deferred compensation, bonus or incentive plan or agreement not
cancelled at will without penalty or premium or any continuing obligation or
liability which will not be cancelled on or prior to the Closing;
3.20.7 management or consulting agreement not terminable at will
without penalty or premium or any continuing obligation or liability which the
Seller and each such individual agree to cancel on the Closing Date;
3.20.8 lease for real or personal property (including borrowings
thereon) license or royalty agreements;
3.20.9 union or other collective bargaining agreement;
3.20.10 agreement, commitment or understanding relating to indebtedness
for borrowed money;
3.20.11 contract which, by its terms, requires the consent of any party
thereto, to the consummation of the transactions contemplated hereby;
3.20.12 contract containing covenants limiting the freedom of the
Seller to engage or compete in any line or business or with any person in any
geographical area;
3.20.13 contract or option relating to the acquisition or sale of any
business;
3.20.14 voting trust agreement or similar agreement;
3.20.15 option for the purchase of any asset, tangible or
intangible; or
3.20.16 other contract, agreement, commitment or understanding which
materially affects any of its properties, assets or business, whether directly
or indirectly, or which was entered into other than in the ordinary course of
business. The Seller has in all material respects performed all material
obligations required to be performed by it to date under all agreements to which
it is a party and is not in default in any material respect under any of its
agreements and has received no notice of any default or alleged default which
has not heretofore been cured or which notice has not heretofore been withdrawn.
3.21 COOPERATION IN FILING WITH SEC: The Shareholder and the Seller shall
cause its officers, directors, employees, accountants and attorneys to cooperate
fully with the Purchaser in
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connection with the filing of any statements, returns or notices with the
Securities and Exchange Commission or the preparation of any private offering
statements.
3.22 NO SUBSIDIARIES: The Seller does not have any subsidiaries and the Seller
and the Shareholder do not own directly or indirectly any equity interest in any
other business or entity which deals in or relates to the Internet gaming
industry. The Shareholder and the Seller shall transfer to the Purchaser all of
their right, title and interest in and to any such entity without any further
consideration payable to them by the Purchaser and shall execute such documents
as are necessary to effectuate this purpose.
3.23 NO BREACH: Neither the execution and delivery of this Agreement nor
compliance by the Shareholder and the Seller with any of the provisions hereof
nor the consummation of the transactions contemplated hereby, will:
3.23.1 violate, alone or with notice over the passage of time, result
in the material breach or termination of, or otherwise give any contracting
party the right to terminate, or declare a default under, the terms of any
material agreement or other material document or undertaking, oral or written to
which the Seller is a part or by which its properties or assets may be bound;
3.23.2 result in the imposition of any lien, mortgage, security
interest, pledge, encumbrance, easement, claim or other restriction or charge on
any of the assets of the Seller, and will not alter or impair any of the assets
of the Seller nor the Purchaser's ability to utilize in the same manner in which
they are currently utilized by the Seller in connection with its business;
3.23.3 violate any judgment, order, injunction, decree or award
against, or binding upon, the Seller or upon its properties or assets; or
3.23.4 violate any law or regulation of any jurisdiction relating to
the Seller, its assets or properties.
3.24 BROKERS: All negotiations relative to this Agreement and the Transaction
contemplated hereby have been carried on directly with the Purchaser without the
intervention of any broker, finder investment banker or other third party.
Shareholder and the Seller have not engaged, consented to, or authorized any
broker, finder, investment banker or any other third party to act on its behalf,
directly or indirectly, as a broker or finder in connection with this Agreement
and the Transaction, and the Shareholder and the Seller agree to indemnify the
Purchaser against, and to hold the Purchaser harmless from any claim for
brokerage or similar commission or other compensation which may be made against
the Purchaser by any third party in connection with any of the transactions
contemplated hereby which claim is based upon any action by the Shareholder or
the Seller.
3.25 UNTRUE OR OMITTED FACTS: No representation, warranty, document,
certificates or other
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writings furnished by the Shareholder or the Seller in this Agreement contains
any untrue statement of a material fact, or omits to state a fact necessary in
order to make such representations, warranties or statements not materially
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser makes the following representations and warranties to the
Shareholder, each of which shall be deemed material:
4.1 VALID CORPORATE EXISTENCE; QUALIFICATIONS: The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado. The Purchaser has the corporate power and authority to carry
on its business as now being conducted. There is no jurisdiction in which
failure to qualify would have a material adverse effect on the Purchaser or its
assets, properties or business. A copy of the Purchaser's Certificate of
Incorporation (certified by the appropriate official of the State of Colorado)
and by-laws and minute books (certified by the Purchaser's Secretary), as
amended to date, which will be delivered to the Shareholder and Seller at or
prior to the Closing, are true and complete copies of those documents as now in
effect. The minute books of the Purchaser contain accurate records of all
meetings of its Board of Directors, and stockholders since its inception, and
accurately reflect all transactions referred to therein.
4.2 CAPITALIZATION: The authorized capital stock of the Purchaser consists of
50,000,000 shares of $.001 par value, non-assessable, common stock, of which
536,000 shares are issued and outstanding, see Exhibit "H" for list of
shareholders. The Purchaser has other capital stock authorized for issuance
consisting of twenty-five million (25,000,000) shares of $.001 par value
Preferred Stock of which, there is none issued and outstanding at this time.
4.3 CORPORATE AUTHORITY; BINDING NATURE OF AGREEMENT: The Purchaser has the
power to enter into this Agreement and to carry out its obligation hereunder.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of the Purchaser and no other corporate proceedings on the part of the
Purchaser are necessary to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement constitutes the valid and binding obligation of the Purchaser and is
enforceable in accordance with its terms.
4.4 CONSENTS: There are no consents of governmental and other regulatory
agencies, foreign or domestic, and of other third parties required to be
received by or on the part of the Purchaser, to enable it to enter into and
carry out this Agreement in all material respects.
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4.5 BROKERS: All negotiations relative to this Agreement and the Transaction
contemplated hereby have been carried on directly with the Shareholders and the
Seller without the intervention of any broker, finder, investment banker or
other third party. The Purchaser has not engaged, consented to, or authorized
any broker, finder, investment banker or any other third party to act on its
behalf, directly or indirectly, as a broker or finder in connection with this
Agreement and the Transaction, and the Purchaser agrees to indemnify the
Shareholder and the Seller against, and to hold the Shareholder and the Seller
harmless from any claim for brokerage or similar commission or other
compensation which may be made against the Shareholder or the Seller by any
third party in connection with any of the transactions contemplated hereby which
claim is based upon any action by the Purchaser.
4.6 FINANCIAL STATEMENTS: The Purchaser, prior to the Closing Date, will
deliver to the Sellers, the Unaudited Financial Statements of the Purchaser.
All of the historical financial statements contained in such documents will have
been prepared from the books and records of the Purchaser. The Unaudited
Financial Statements and the consolidated audit will be prepared in accordance
with GAAP, and fairly and accurately reflect the financial position and
condition of the Purchaser as at the dates and for the periods indicated.
Without limiting the foregoing, at the date of the Purchaser's Balance Sheet,
the Purchaser will have owned each of the assets included in preparation of the
Purchaser's Balance Sheet, and for the valuation of such assets in the
Purchaser's Balance Sheet, will not be for more than their fair saleable value
(on an item by item basis) at that date; and the Purchaser will have no
Liabilities other than those included in the Purchaser's Balance Sheet, nor any
Liabilities in amounts in excess of the amounts included for them in the
Purchaser's Balance Sheet. From the date hereof, through the Closing Date, the
Purchaser will continue to prepare financial statements on the same basis that
it has done so in the past, will promptly deliver the same to the Sellers, and
agrees that from and after such delivery, the foregoing representations will be
applicable to each financial statement so prepared and delivered. The Unaudited
Financial Statements will be prepared by the Company's accountant, whose report
thereon is included herein and referenced as Exhibit "B".
4.7 NO UNDISCLOSED LIABILITIES: Except as set forth in the Purchaser's Balance
Sheet included in the Unaudited Financial Statements as Exhibit B, the Purchaser
has no material debts, liabilities or obligations, known or unknown, contingent
or absolute, in excess of $1,000, except those arising in the ordinary course of
business of the Purchaser and consistent with past practice.
4.8 LITIGATION, COMPLIANCE WITH LAW: There are no pending or threatened
actions, suits, proceedings or governmental investigations or reviews relating
to the Purchaser or any of its properties, assets or business or, to the
knowledge of the Purchaser, any order, injunction, award
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or decree outstanding, against the Purchaser or against or relating to any of
its properties, assets or business; and the Purchaser, after reasonable inquiry,
knows of no basis for any such action, suits or proceedings or any such
governmental investigations, reviews, orders, injunctions or decrees. To the
knowledge of the Purchaser, the Purchaser is not in violation of any material
law, regulation, ordinance, order, injunction, decree, award, or other
requirement of any governmental body, court or arbitrator relating to its
properties, assets or business.
4.9 AGREEMENTS AND OBLIGATIONS; PERFORMANCE: Exhibit "I" sets forth a list of
material agreements to which the Purchaser is a party or is otherwise bound.
Other than these material agreements, the Purchaser is not party to or bound by
any:
4.9.1 written or oral agreement or other contractual commitment,
understanding or obligation which involves aggregate payments or receipts in
excess of $2,000 that cannot be canceled on 30 days or less notice without
penalty or premium or any continuing obligation or liability;
4.9.2 contractual obligation or contractual liability of any kind to
the Purchaser which will not be canceled on or prior to the Closing except as
otherwise provided by this Agreement;
4.9.3 contract, arrangement, commitment or understanding with its
customers or any officer, employee, stockholder, director, representative or
agent thereof for the repurchase of products, sharing of fees, the rebating of
charges to such customers, bribes, kickbacks from such customers or other
similar arrangements;
4.9.4 contract for the purchase or sale of any materials, products or
supplies or for any services, which commits or will commit it for a fixed term;
4.9.5 contract of employment with any employee not terminable at will
without penalty or premium or any continuing obligation or liability, except as
otherwise provided by this Agreement;
4.9.6 deferred compensation, bonus or incentive plan or agreement not
canceled at will without penalty or premium or any continuing obligation or
liability which will not be canceled on or prior to the Closing;
4.9.7 management or consulting agreement not terminable at will
without penalty or premium or any continuing obligation or liability which the
Purchaser and each such individual agree to cancel on the Closing Date;
4.9.8 lease for real or personal property (including borrowings
thereon) license or royalty agreements;
4.9.9 union or other collective bargaining agreement;
4.9.10 agreement, commitment or understanding relating to indebtedness
for borrowed money;
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4.9.11 contract which, by its terms, requires the consent of any party
thereto, to the consummation of the transactions contemplated hereby;
4.9.12 contract containing covenants limiting the freedom of the
Purchaser to engage or compete in any line or business or with any person in any
geographical area;
4.9.13 contract or option relating to the acquisition or sale of any
business;
4.9.14 voting trust agreement or similar agreement;
4.9.15 option for the purchase of any asset, tangible or intangible; or
4.9.16 other contract, agreement, commitment or understanding which
materially affects any of its properties, assets or business, whether directly
or indirectly, or which was entered into other than in the ordinary course of
business. The Purchaser has in all material respects performed all material
obligations required to be performed by it to date under all agreements to which
it is a party and is not in default in any material respect under any of its
agreements and has received no notice of any default or alleged default which
has not heretofore been cured or which notice has not heretofore been withdrawn.
ARTICLE V
COVENANTS OF THE SHAREHOLDER AND THE SELLER
5.1 COVENANTS OF THE SHAREHOLDER AND THE SELLER: The Shareholder and the
Seller hereby covenants to, from and after the date hereof and until the Closing
or earlier termination of this Agreement, without the prior written consent of
the Purchaser:
5.1.1 Best Efforts: To take every action reasonably required of it
and use its best efforts to satisfy the conditions at closing as set forth in
this Agreement and otherwise to ensure the prompt and expedient consummation of
the Transaction substantially as contemplated by this Agreement, and will exert
all reasonable efforts to cause the Transaction to be consummated, provided in
all instances that the representations and warranties of the Purchaser in this
Agreement are and remain true and accurate and that the covenants and
agreements of the Purchaser in this Agreement are satisfied or appear capable of
being satisfied and subject, at all times, to the right and ability of the
directors of the Seller to satisfy their fiduciary obligations.
5.1.2 Access and Information: To afford the officers, attorneys,
accountants and other authorized representatives of the Purchaser (collectively,
the "Representatives"), free and full access, during regular business hours and
upon reasonable notice, to all of its books, records, contracts, commitments and
properties (including, without limitation, tax returns) at the Purchaser's own
expense, to review, examine and investigate the books, records and properties of
the Seller to determine the accuracy of the representations and warranties made
by the Shareholder and the Seller. The Shareholder and the Seller shall cause
its employees,
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accountants and attorneys to cooperate fully with said review,
examination and investigation. The Seller shall promptly furnish to the
Purchaser (i) all communications to its directors or to its Shareholder,
generally, (ii) internal monthly financial information concerning its business
properties and personnel as the Purchaser may reasonably request.
5.1.3 Insurance: To maintain in full force and effect insurance
coverage of a type and amount customary in its business, but not less than
presently in effect.
5.1.4 Discharge Taxes and Indebtedness: To pay and discharge, as they
become due, all taxes, assessments, debts, claims and other governmental or non-
governmental charges lawfully imposed upon on incurred by it or the properties
and assets of the Seller, except taxes, assessments, debts, claims and charges
contested in good faith in appropriate proceedings for which the Seller shall
have set aside adequate reserves for the payment of such tax, assessment, debt,
claim or charge. The Seller shall provide the Purchaser, upon the Purchaser's
request, evidence of payment of such taxes, assessments, debts, claims and
charges satisfactory to the Purchaser.
5.1.5 Compliance with Agreements; Compliance with Laws: To comply
with the terms and conditions of all material agreements, commitments or
instruments to which the Shareholder or the Seller is a party or by which he or
it may be bound. The Shareholder and the Seller shall duly comply in all
material respects with any material laws, ordinances, rules and regulations of
any foreign, federal, state or local government or any agency thereof, or any
writ, order or decree, and conform to all valid requirements of governmental
authorities relating to the conduct of its business, properties and assets. The
Seller also covenants to file all tax returns as they become due prior to the
Closing.
5.1.6 No Indebtedness: Not to incur any obligation or liability,
absolute or contingent, except for those incurred in the ordinary and usual
course of its business or in connection with the transactions contemplated by
this Agreement.
5.1.7 No Dividend, Retirement or Purchase of Stock: Not to declare or
pay any dividend or distribution, in cash or otherwise, or any shares of stock
of the Seller or redeem, return, purchase or otherwise acquire directly or
indirectly any shares of stock.
5.1.8 Conduct of Business Prior to Closing:
(i) to conduct its business only in the ordinary and usual
course and make no material change in any of its business practices and
policies;
(ii) to use its best efforts to preserve its business
organization intact, to keep available the services of its present employees and
consultants and to preserve its good will;
(iii) to maintain good relationships with suppliers, lenders,
creditors, employees, customers and others having business or financial
relationships with them;
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(iv) it shall not (a) amend its Certificate of Incorporation or
by-laws or (b) split, combine, or reclassify any of its outstanding securities;
(v) it shall not (a) adopt, enter into, or amend any bonus,
profit sharing, compensation, stock option, warrant, pension, retirement,
deferred compensation, employment, severance, termination, or other employee
benefit plan, agreement, trust fund, or arrangement for the benefit or welfare
of any officer, director or employee of the Seller or (b) agree to any material
(in relation to historical compensation) increase in compensation payable or to
become payable to, or any increase in the contractual term of employment of, any
such employee, except in the ordinary course of business in accordance with past
practice;
(vi) it shall not sell, lease, mortgage, encumber, or otherwise
dispose of or grant any interest in any of its assets or properties except for
sale, encumbrances and other dispositions or grants in the ordinary course of
business and consistent with past practice and except for liens for taxes not
yet due or liens or encumbrances that are not material in amount or effect and
do not impair the use of the property, or as specifically provided for or
permitted in this Agreement;
(vii) it shall not enter into, or terminate, any material
contract, agreement, commitment or understanding;
(viii) it will not hold any meetings of its board of directors,
or any committee thereof, or of its Shareholder, without giving a representative
selected by the Purchaser the option to attend the same (although the Seller may
request that such representative absent himself during that portion of any such
meeting that pertains to issues arising under this Agreement); and
(ix) it shall immediately notify the Purchaser of any event or
occurrence or emergency material to, and not in the ordinary and usual course of
business.
5.1.9 No Breach: Not to voluntarily take any action or do anything
which will cause a breach of or default respecting its covenants,
representations or warranties set forth herein and promptly to notify the
Purchaser of any event or fact which represents or is likely to cause such a
breach or default.
5.1.10 Publicity: Prior to the Closing, any written news releases by
the Seller pertaining to this Agreement or the Transaction shall be submitted to
the Purchaser for review and approval prior to release by the Seller, and shall
be released only in a form approved by the Purchaser, provided, however, that
such approval shall not be unreasonably withheld, and (b) such review and
approval shall not be required, if prior review and approval would prevent the
timely and accurate dissemination of such press release as required to comply,
in the judgment of counsel, with any applicable law, rule or policy.
5.1.11 Updating of Schedules and Exhibits: The Seller and
Shareholder shall notify the Purchaser of any changes, additions or event which
may cause any change in or addition to any
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Exhibits delivered by it under this Agreement, promptly after the occurrence of
the same and at the Closing by the delivery of updates of all Exhibits. No
notification pursuant to this Section shall be deemed to cure any breach of any
representation or warranty made in this Agreement unless the Purchaser
specifically agrees thereto in writing nor shall any such notification be
considered to constitute or give rise to a waiver by the Purchaser of any
condition set forth in this Agreement.
5.1.12 Understanding of Shareholder and Seller: Shareholders hereby
state and understand that the materials, including current financial statements,
current income tax returns prepared and delivered by Shareholders, and they are
familiar with the Business of Purchaser, and they are acquiring the Purchaser's
restricted shares under Section 4(2), commonly known as the private offering
exemption of the Securities Act of 1933, as amended.
ARTICLE VI
COVENANTS OF THE PURCHASER
6.1 COVENANTS OF THE PURCHASER: The Purchaser hereby covenants to, from and
after the date hereof and until the Closing or earlier termination of this
Agreement:
6.1.1 Best Efforts: To take every action reasonably required of in and
use its best efforts to satisfy the conditions to Closing set forth in this
Agreement and otherwise to ensure the prompt and expedient consummation of the
Transaction substantially as contemplated by this Agreement, and will exert all
reasonable efforts to cause the Transaction to be consummated, provided in all
instances that the representations and warranties of the Shareholder and the
Seller in this Agreement are and remain true and accurate and that the covenants
and agreements of the Shareholder and the Seller in this Agreement are satisfied
or appear capable of being satisfied and subject, at all times, to the right and
ability of the directors of the Purchaser to satisfy their fiduciary
obligations.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE SHAREHOLDER AND THE SELLER TO CLOSE
The obligation of the Shareholder and the Seller to enter into and complete the
Closing is subject to the fulfillment, prior to the Closing Date, of each of the
following conditions, any one or more of which may be waived by the Shareholder
or the Seller:
7.1 CONSENTS, LICENSES AND PERMITS: The Purchaser shall have obtained all
consents, licenses, permits, approvals and authorizations and waivers of third
parties necessary for the performance by it of all of its obligations under this
Agreement.
7.2 REPRESENTATIONS AND WARRANTIES: All representations and warranties of the
Purchaser set
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forth in this Agreement and in any written statement or other document delivered
pursuant hereto or in connection with the Transaction contemplated hereby shall
be true in all material respects as at the Closing Date, as if made at the
Closing and as of the Closing Date.
7.3 COVENANTS: The Purchaser shall have performed and complied in all material
respects with all covenants and each of its agreements and obligations required
by this Agreement to be performed or complied with prior to or at the Closing.
7.4 NO ACTIONS: No action, suit, proceeding or investigations shall have been
instituted against the Purchaser, and be continuing before a court or by a
governmental body or agency, or shall have been threatened and be unresolved, to
restrain or to prevent or to obtain damages in respect of, the carrying out of
the transactions contemplated hereby, or which might materially affect the right
of the Seller and the Shareholder in the Transaction after the Closing Date, or
which might have a materially adverse effect thereon.
7.5 APPROVAL OF BUSINESS PLAN: The Purchaser shall have approved the Business
Plan (Exhibit "J") and related pro formas (Exhibit A) provided by Interactive
Gaming and Wagering, NV.
7.6 ADDITIONAL DOCUMENTS: The Purchaser shall have delivered all such
certified resolutions, certificates and documents as the Shareholder or the
Seller or its counsel may have reasonably requested.
ARTICLE XIII
CLOSING
8.1 LOCATION AND TIME: The Closing provided for herein shall take place at the
offices of the Purchaser, located in the State of Nebraska. The date and time
of Closing shall be mutually determined by both parties.
8.2 ITEMS TO BE DELIVERED BY THE SHAREHOLDER OR THE SELLER: At the Closing,
the Shareholder and/or the Seller will deliver or cause to be delivered to the
Purchaser:
8.2.1 Stock certificates for 30,000 shares of common stock of the
Seller;
8.2.2 Unaudited financial statements;
8.2.3 Such other certified resolutions, documents and certificates as
are required to be delivered by the Shareholder or the Seller pursuant to the
provisions of the Agreement; and
8.3 ITEMS TO BE DELIVERED BY PURCHASER: At the Closing, the Purchaser will
deliver or cause to be delivered to the Shareholder:
8.3.1 The certificates required by Article II;
8.3.2 Such other certified resolutions, documents and certificates as
are required to be delivered by the Purchaser pursuant to the provisions of the
Agreement.
8.3.3 Unaudited financial statements.
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ARTICLE IX
POST CLOSING OBLIGATIONS
9.1 SURVIVAL: The parties hereto agree that their respective representations
and warranties shall survive the execution and delivery of this Agreement and
the consummation of the transactions provided for herein.
9.2 INDEMNIFICATION BY SHAREHOLDER AND THE SELLER: The Shareholder and the
Seller shall indemnify, save and keep the Purchaser, its successors and assigns,
forever harmless against and from all liabilities, demands, claims, actions or
causes of action, assessments, losses, penalties, costs, damages or expenses,
including reasonable attorneys' fees and expenses, of every kind, nature and
description, fixed or contingent, sustained or incurred by Purchaser, its
successors or assigns arising out of, resulting from, based upon or in
connection with:
9.2.1 any representation or warranty made by the Shareholder and the
Seller to the Purchaser herein or any violation of agreements or covenants or
any instrument or document delivered to Purchaser in connection herewith being
incorrect in any material respect; and
9.2.2 the failure of the Shareholder or the Seller to comply with, or
the breach by Shareholder or the Seller of any of the covenants and agreements
in this Agreement to be performed by Shareholder or the Seller.
9.3 INDEMNIFICATION BY THE PURCHASER: The Purchaser shall indemnify, save and
keep the Shareholder and the Seller, their successors and assigns, forever
harmless against and from all liabilities, demands, claims, actions or causes of
action, assessments, losses, penalties, costs, damages or expenses, including
reasonable attorneys' fees and expenses, of every kind, nature and description,
fixed or contingent, sustained or incurred by Shareholder and the Seller, its
successors or assigns arising out of, resulting from, based upon or in
connection with:
9.3.1 any representation or warranty made by Purchaser to Shareholder
or the Seller herein or any violation of agreements or covenants or any
instrument or document delivered to Shareholder and the Seller in connection
herewith being incorrect in any material respect provided a claim is asserted by
Shareholder or the Seller within one (1) year of the Closing Date.
9.3.2 the failure of the Purchaser to comply with, or the breach by
the Purchaser of any of the covenants and agreements in this Agreement to be
performed by the Purchaser;
9.4 DEFENSE OF CLAIMS: A party entitled to indemnification hereunder (an
"Indemnified Party") agrees to notify each party required to indemnity hereunder
(an "Indemnifying Party") with reasonable promptness of any claim asserted
against it in respect of which any Indemnifying Party may be liable under this
Agreement, which notification shall be accompanied by a written
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statement setting forth the basis of such claim and the manner of calculation
thereof. An Indemnifying Party shall have the right to defend any such claim at
its or his own expense and with counsel of its or his choice; provided, however,
that such counsel shall have been approved by the Indemnified Party prior to
engagement, which approval shall not be unreasonably withheld or delayed; and
provided further, that the Indemnified Party may participate in such defense, if
it so chooses, with its own counsel and at its own expense.
9.5 RIGHTS WITHOUT PREJUDICE: The rights of the parties under this Article IX
are without prejudice to any other rights or remedies that it may have by reason
of this Agreement or as otherwise provided by law.
9.6 CAPITALIZATION: As soon as Possible following the Closing, the Purchaser
shall use their best efforts to raise $920,000 of Capital through the issuance
of no more than five hundred thousand (500,000) shares of the Purchasers common
stock. Purchaser will raise four hundred sixty-thousand ($460,000), ninety (90)
days from the signing of this Agreement and the balance of four hundred sixty-
thousand ($460,000) will be raised within six (6) months from the signing of
this Agreement. Purchaser will provide Seller and the Company, seventy-thousand
($70,000) upon the signing of this Agreement in the form of a note. All other
proceeds from financing activities will be provided to the Seller in the form of
a Note payable to the Purchaser.
9.7 OPERATING AGREEMENTS: From and after the Closing, the Purchaser
Interactive Gaming and Wagering, NV shall operate as follows:
9.7.1 The name of the Purchaser may be changed to a name mutually
agreeable to the Shareholders, Seller and the Purchaser.
9.7.2 Interactive Gaming & Wagering, NV shall operate as a wholly owned
subsidiary of the Purchaser. No changes in the corporate organization of Global
Entertainment Holdings/Equities, Inc. shall be made without the consent of the
Board of Directors, or a majority Shareholder vote.
ARTICLE X
TERMINATION AND WAIVER
10.1 TERMINATION: This Agreement and the Transaction may be terminated at any
time prior to the Closing:
10.1.1 By mutual consent of the Seller and the Purchaser;
10.1.2 By the Seller if any of the conditions set forth in Article IV,
and by the Purchaser if any of the conditions set forth in Article III hereof,
shall not have been fulfilled on or prior to the Closing Date, or shall have
become incapable of fulfillment, and shall not have been waived. In the event
this Agreement is terminated as described above, this Agreement shall be void
and
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of no force and effect.
10.2 WAIVER: Any condition to the performance of the Seller, Shareholder and
the Purchaser which legally may be waived on or prior to the Closing Date may be
waived at any time by the party entitled to the benefit thereof by action taken
or authorized by an instrument in writing executed by the relevant party or
parties. The failure of any party at any time or times to require performance
of any provision hereof shall in no manner affect the right of such party at a
later time to enforce the same. No waiver by any party of the breach of any
term, covenant, representation or warranty contained in this Agreement as a
condition to such party's obligations hereunder shall release or affect any
liability resulting from such breach, and no waiver of any nature, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be or
construed as further or continuing waiver of any such condition or of any breach
of any other term, covenant, representation or warranty of this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 EXPENSES: Each of the parties hereto shall bear his or its own expenses
in connection herewith, including any expenses incurred if the proposed
transaction is abandoned at any time prior to the consummation thereof.
11.2 CONFIDENTIAL INFORMATION: Each party agrees that such party and its
representatives will hold in strict confidence all information and documents
received from the other parties and, if the transactions herein contemplated
shall not be consummated, each party will continue to hold such information and
documents in strict confidence and will return to such other parties all such
documents (including the Exhibits attached to this Agreement) then in such
receiving party's possession without retaining copies thereof; provided,
however, that each party's obligations under this Section 11.2 to maintain such
confidentiality shall not apply to any information or documents that are in the
public domain at the time furnished by the others or that become in the public
domain thereafter through any means other than as a result of any act of the
receiving party or of its agents, officers, directors or stockholders which
constitutes a breach of this Agreement, or that are required by applicable law
to be disclosed or which the Purchaser furnishes to its attorneys, accountants,
underwriters or other persons it deems necessary or advisable in connection with
the preparation of Purchaser's Refinancing. The parties agree that the remedy
at law for any breach of this Section 11.2 will be inadequate and a non-
breaching party will be entitled to injunctive relief to compel the breaching
party to perform or refrain from action required or prohibited hereunder.
11.3 MODIFICATION, TERMINATION OR WAIVER: This Agreement may be amended,
modified,
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superseded or terminated, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, but only by a written instrument
executed by the party waiving compliance. The failure of any party at any time
or times to require performance of any provisions hereof shall in no manner
affect the right of such party at a later time to enforce the same.
11.4 NOTICES: All notices, requests, demands and communications under or in
respect hereof shall be deemed to have been duly given and made if in writing if
delivered by hand or certified mail, return receipt requested to the party
concerned or by regular mail together with a facsimile transmission at its
address or fax number appearing below together with a copy as indicated.
Service shall be deemed to be effective by certified mail or by regular mail
together with a facsimile transmission on the date of mailing and transmitting.
The said addresses and fax numbers are as follows:
If to Shareholders and Seller: Bryan Abboud
Bapor Kibra, #3C
Willemstad, Curacao
Netherlands Antilles
011-599-9-465-5881 (fax)
with a copy to:
If to Purchaser: Global Entertainment Equities/Holdings, Inc.
Steven M. Abboud, (President)
8949 J Street, Suite 5
Omaha, Nebraska 68127
402-331-2899 (fax)
The parties may change the persons, addresses and fax numbers to which the
notices or other communications are to be sent by giving written notice of any
such change in the manner provided herein for giving notice.
11.5 BINDING EFFECT AND ASSIGNMENT: This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto;
provided, however, that no assignment of any rights or delegation of any
obligations provided for herein may be made by any party without the express
written consent of the other parties.
11.6 ENTIRE AGREEMENT: This Agreement contains the entire Agreement between
the parties with respect to the subject matter hereof.
11.7 EXHIBITS: The Exhibits attached hereto and the documents and instruments
referred to
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herein or required to be delivered simultaneously herewith or at the Closing are
expressly made a part of this Agreement as fully as though completely set forth
herein, and all references to this Agreement herein or in any of such Exhibits,
documents, or instruments shall be deemed to refer to and include all such
Exhibits, documents and instruments. All of the Exhibits referred to herein are
incorporated herein by reference.
11.8 GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with the laws of the State of Colorado applicable to agreements made
and to be performed entirely within that State, excluding the choice of law
rules thereof.
11.9 COUNTERPARTS: This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but which together shall constitute one
and the same instrument.
11.10 SECTION HEADINGS: The section headings contained in this Agreement are
inserted for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
11.11 JOINT AND SEVERAL: All obligations, representations, responsibilities
and the like of the Shareholder shall be joint and several.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the day and year first above written.
Purchaser: Global Entertainment Holding/Equities, Inc.
By: /s/Steven M. Abboud 6-30-98
Steven M. Abboud/President
/President
Seller: Interactive Gaming and Wagering, NV
By: /s/Bryan P. Abboud
Bryan P. Abboud/President
/President
By: /s/Bryan P. Abboud
______________/Shareholder
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Exhibits
A Projections
B Financial Statements (Purchaser & Seller)
C List of Major Equipment and assets owned by Seller
D Insurance Policies
E Leases
F List of Employees and Salaries of Seller
G Material Agreements of Seller
H List of Shareholders of Purchaser
I Material Agreements of Purchaser
J Business Plan
K List of Shareholders of Seller
26
AGREEMENT
OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE, dated this_____ day of August 1999, by
and between:
Global Entertainment Holdings/Equities, Inc., a Colorado Corporation
(herein referenced to as "Purchaser"), with its principle
office at 6235 S. 90th Street, Omaha, Nebraska 68127
and
Prevail Online, Inc. or its assigns,
a Colorado Corporation (herein referred to as "Seller"), with its principle
office at 817 Columbus Avenue, #145, San Francisco, California 94133
and
owners of all the outstanding stock
of the Seller, (herein collectively referenced to as "Shareholders")
WITNESSETH:
WHEREAS, Purchaser has expressed an interest in the purchase and acquisition
of all of the issued and outstanding shares of Seller's capital stock, Seller
and its Shareholders; and
WHEREAS, Seller and Shareholders wish to sell on the terms and the
conditions and in the manner reflected herein, (100%) of the issued and
outstanding shares of capital stock of Seller; and
WHEREAS, Seller and Shareholders warrant that they own 100% of the issued
and outstanding capital stock of the Seller; and
WHEREAS, during the negotiations Purchaser was unable to verify the validity
of the financial, marketing, personnel and legal information furnished by
Seller; and
WHEREAS, Purchaser assumed the information provided by Sellers are true and
correct in all material respects and Purchaser and Seller reached the terms of
the acquisition of Seller's shares based upon this information; and
WHEREAS, Purchaser intends to conduct a thorough investigation of Seller's
business to independently verify this information; and
WHEREAS, Purchaser expects to expend substantial time, money and effort,
including both its internal staff and outside Consultants, investigating
Seller's business; and
WHEREAS, as a result of such investigation of the business of Seller,
Purchaser will divert much of its acquisition efforts away from other promising
prospects; and
WHEREAS, Purchaser agrees to provide Seller with a copy of all of its final
studies and reports in the event Purchaser elects not to purchase the shares of
Seller.
NOW, THEREFORE, in consideration of the premises and covenants and
Agreements contained herein, the Purchaser, and Seller agree to give and to
grant Purchaser a 90 day right to
<PAGE>
purchase its shares under the terms and conditions set forth hereafter.
1. EXECUTION OF AGREEMENT. This Agreement shall at all times from the date of
its execution be a binding obligation of Seller and Shareholders. The Purchaser
shall be, thereafter, fully bound by all the terms and conditions of this
Agreement and shall thereafter be liable for any breach thereof. Prior to the
execution of the Agreement, Purchaser may at any time and for any reason elect
not to purchase shares from the Seller and Shareholders and Purchaser shall on
account thereof not be liable for any damages or additional consideration accept
as expressly stated hereinafter in this Section 1. In the event Purchaser
elects not to purchase the shares, Purchaser agrees to deliver to Seller a copy
of all financial reports and studies made in connections with its investigation
of Seller. Further, Purchaser covenants and agrees not to disclose to
competitors any confidential information gained as a result of its investigation
of Seller's business.
2. PURCHASE AND SALE. Seller agrees to sell and transfer to Purchaser, and
Purchaser agrees to purchase from Seller, the shares to be sold (as hereinafter
defined) on the Closing Date, at the Purchase Price, and upon, and subject to
the terms and conditions hereinafter set forth.
ARTICLE I
DEFINITIONS
1.1 GENERAL CONSTRUCTION: For purposes hereof, except as otherwise expressly
provided:
1.1.1 Defined terms include the plural as well as the singular;
1.1.2 All accounting terms not otherwise defined have the meanings
assigned under generally accepted accounting principles;
1.1.3 All references to Exhibits are to all the Exhibits attached to
this Agreement; and
1.1.4 Pronouns of either gender or neuter shall include, as
appropriate, the other pronoun forms.
1.2 DEFINITIONS: As used in this Agreement, the following terms shall have
the following definitions.
1.2.1 Affiliate: When used with respect to a person, an "affiliate"
of that person is a person controlling, controlled by, or under common control
with that person.
1.2.2 Agreement: This Agreement, including all of its Exhibits and
all other documents specifically referred to in this Agreement that have been or
are to be delivered by a party to this Agreement to another such party in
connection with the Transaction and this Agreement and including all duly
adopted amendments, modifications, and supplements to or for this Agreement,
Exhibits and other documents.
1.2.3 Unaudited Financial Statements: With respect to the Seller,
Prevail Online, Inc.
1.2.4 Closing: As defined in Article VIII.
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1.2.5 Closing Date: As defined in Section 8.1.
1.2.6 Seller's Balance Sheet: Balance Sheet as of_________ included
in the Unaudited Financial Statements.
1.2.7 Entity: A corporation, partnership, sole proprietorship, joint
venture, or other form of organization formed for the conduct of a business,
whether active or passive.
1.2.8 GAAP: Generally accepted accounting principles, as in effect on
the date of any statement, report or determination that purports to be, or is
required to be, prepared or made in accordance with GAAP. All references herein
to financial statements prepared in accordance with GAAP shall mean in
accordance with GAAP consistently applied throughout the periods to which
reference is made.
1.2.9 Inventories: The stock of goods held, if any, by the Seller
from time to time in the ordinary course of the business of the Seller, in the
form in which such inventories then are held or after incorporating with other
goods or items, or the like.
1.2.10 Liabilities: At any point in time (the "Determination Time"),
the obligations of a person or Entity, whether known or unknown, contingent or
absolute, recorded on its books or note, arising or resulting in any way from
facts, events, agreements, obligations or occurrences that existed or transpired
at a prior point in time, or resulted from the passage of time to the
Determination Time, but not including obligations accruing or payable after the
Determination Date to the extent (but only to the extent) that such obligations
(1) arise under previously existing agreements for services, benefits, or other
considerations, and (2) accrue or become payable with respect to services,
benefits, or other considerations received by the person or Entity after the
Determination Time.
1.2.11 Permits: Any permits, licenses, orders, approvals, franchises,
registrations, authorizations or other approvals from any federal, state, local
and foreign governmental or regulatory body or authority (public or self-
regulatory).
1.2.12 Subsidiary: A corporation with respect to which another Entity
owns, directly or indirectly, shares entitling it to elect a majority of the
Board of Directors or in which it has a majority of the equity interest.
1.2.13 Transaction: The purchase of all (100%) of the issued and
outstanding, .001 value shares of capital stock of the Seller by the Purchaser
from the Shareholder, as provided in Article II of this Agreement, Purchaser
will exchange One Hundred Sixty Three Thousand (163,000) of its $.001 par value
common stock for One Hundred (100,000) shares (100%) of all the Seller's, issued
and outstanding $.001 par value common stock.
3
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ARTICLE II
THE TRANSACTION
THE TRANSACTION: Subject to the terms, conditions, provisions and limitations
contained in this Agreement, the Purchaser, in reliance upon the
representations and warranties of the Shareholder and Seller made herein and in
the Exhibits attached hereto, will at the Closing, acquire from the Shareholder
and the Shareholder, in reliance upon the representations and warranties of the
Purchaser and the majority Shareholders of the Purchaser, made herein will at
the Closing, transfer, convey and assign (with full assignment powers) to the
Purchaser, free and clear of any and all liens, charges or other encumbrance,
100,000 shares of common stock, $.001 par value, of the Seller, comprising all
(100%) of the, issued and outstanding shares of capital stock of the Seller and
representing their entire ownership of equity securities of the Seller. Any
corporate actions necessary to accomplish this or to obtain outstanding shares
of the Seller for conveyance to the Purchaser at Closing shall be the sole
responsibility of the Shareholder and the Seller; and, the Purchaser hereby
agrees to transfer, convey and assign (with full assignment powers) to Sellers,
One Hundred Sixty Three Thousand (163,000) shares of the Purchaser's $.001 non-
assessable, par value common stock which represents 1.7% of the Purchaser's
issued and outstanding common stock, as of the closing.
2.1 OPTIONS TO SHAREHOLDER: Per the Letter of Intent to Enter into an
Executive Employment Agreement attached hereto as Exhibit "L", Purchaser will
grant to Seller 90,000 options in accordance with the terms set forth in above
referenced Exhibit "L" for the purpose of Executive Compensation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDER AND THE SELLER
The Shareholder, jointly and severally, and the Seller make the following
representations and warranties to the Purchaser, each of which shall be deemed
material, and all of which are qualified with respect to the effect, if any,
that any potential claims by Prevail Online, Inc. or any of their controlling
persons or Shareholders has or may have relating to this Agreement and/or former
relationships of Shareholder with those companies, which matters have been
discussed by the parties in detail prior to the execution of this Agreement:
3.1 VALID CORPORATE EXISTENCE; QUALIFICATION: Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado. Seller has the corporate power and authority to carry on its business
as now being conducted. The Seller is duly qualified as a corporation to do
business, and is in good standing in each jurisdiction where the character of
the properties are owned or leased by it. A copy of the Seller's Certificate of
Incorporation (certified by the appropriate official of the State of Colorado)
and by-laws
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<PAGE>
and minute books (certified by the Seller's Secretary), as amended to date,
which will be delivered to the Purchaser at or prior to the Closing, are true
and complete copies of those documents as now in effect. The minute books of
the Seller contain accurate records of all meetings of its Board of Directors,
and stockholders since its incorporation, and accurately reflect all
transactions referred to therein.
3.2 CAPITALIZATION: The authorized capital stock of the Seller consists of OK
75,000,000 shares of common stock, $.001 par value per share and 25,000,000
shares of preferred stock There is no other capital stock authorized for
issuance. As of the date hereof, there are 100,000 shares of common stock
validly issued and outstanding, fully paid and non-assessable and no shares are
reserved for issuance nor are there outstanding any options, warrants,
convertible instruments or other rights, agreements or commitments to acquire
common stock of the Seller. The shares are currently held by the Shareholders
(free and clear of all liens and encumbrances) as follows:
Ronald E. Pereira 93,577.98 93.6%;
Steven Finn 6,422.02 6.4%.
3.3 CORPORATE AUTHORITY; BINDING NATURE OF AGREEMENT: The Seller has the power
to enter into this Agreement and to carry out its obligation hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Majority
Shareholders of the Seller and no other corporate proceedings on the part of the
Seller are necessary to authorize the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby. This Agreement
constitutes the valid and binding obligation of the Seller and is enforceable in
accordance with its terms.
3.4 CONSENTS: There are no consents of governmental and other regulatory
agencies, foreign or domestic, and of other third parties required to be
received by or on the part of the Shareholder or the Seller, to enable it to
enter into and carry out this Agreement in all material respects.
3.5 FINANCIAL STATEMENTS: The Seller, at the closing Date, will deliver to the
Purchaser, the Unaudited Financial Statements of the Seller. All of the
historical financial statements contained in such documents will have been
prepared from the books and records of the Seller. The Unaudited Financial
Statements and the consolidated audit will be prepared in accordance with GAAP,
and fairly and accurately reflect the financial position and condition of the
Seller at the dates and for the periods indicated. Without limiting the
foregoing, at the date of the Seller's Balance Sheet, the Seller will have owned
each of the assets included in preparation of the Seller's Balance Sheet, and
for the valuation of such assets in the Seller's Balance Sheet, will not be for
more than their fair saleable value (on an item by item basis) at that date; and
the Seller will have no Liabilities other than those included in the Seller's
Balance Sheet, nor any Liabilities in amounts in excess of the amounts included
for them in the Seller Balance Sheet. From the date hereof, through the Closing
Date, the Seller will continue to prepare financial statements on the
5
<PAGE>
same basis that it has done so in the past, will promptly deliver the same to
the Purchaser, and agrees that from and after such delivery, the foregoing
representations will be applicable to each financial statement so prepared and
delivered. The Unaudited Financial Statements will be prepared by the
Company's accountant, whose report thereon is included herein and referenced as
Exhibit "B".
3.6 NO UNDISCLOSED LIABILITIES: Except as set forth in the Seller's Balance
Sheet included in the Unaudited Financial Statements as Exhibit B, the Seller
has no material debts, liabilities or obligations, known or unknown, contingent
or absolute, in excess of $1,000, except those arising in the ordinary course of
business of the Seller and consistent with past practice.
3.7 ACTIONS SINCE THE SELLER'S BALANCE SHEET: Except as set forth and reflected
in this Agreement, since the date of the Seller's Balance Sheet, the Seller has
not:
3.7.1 incurred any material obligation or liability, known or unknown,
absolute or contingent, except those arising in the ordinary and usual course of
its business and those incurred in connection with the transactions contemplated
by this Agreement;
3.7.2 issued or sold, or agreed to issue or sell any capital stock of
the Seller or any securities convertible into or rights to acquire any such
capital stock or any dividend or distribution declared, set aside or paid on any
such capital stock;
3.7.3 discharged or satisfied any lien or encumbrance, except in the
ordinary and usual course of business, or paid or satisfied any liability,
absolute or contingent, other than as set forth in the Seller's Balance Sheet in
the ordinary and usual course of business and those incurred in connection with
the transactions contemplated by this Agreement;
3.7.4 made any wage or salary increases or granted any bonuses other
than wage and salary increases and bonuses granted in accordance with its normal
salary increase and bonus policies;
3.7.5 mortgage, pledged or subjected to any lien, pledge, charge or
other encumbrance any of its properties or assets, or permitted any of its
property or assets to be subject to any lien or other encumbrance, except in the
ordinary and usual course of business;
3.7.6 sold, assigned or transferred any of its properties or assets,
except in the ordinary and usual course of business;
3.7.7 entered into any transaction or course of conduct not in the
ordinary and usual course of business;
3.7.8 waived any rights of substantial value, or canceled, modified or
waived any indebtedness for borrowed money held by it, except in the ordinary
and usual course of business;
3.7.9 made any loans or advances to any person or assumed, guaranteed,
endorsed or otherwise became responsible for the obligations of any person; or
3.7.10 incurred any indebtedness for borrowed money (except for
endorsement, for collection or deposit of negotiable instruments received in the
ordinary and usual course of
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business).
3.8 NO ADVERSE DEVELOPMENTS: Since the date of the Seller's Balance Sheet,
there has not been:
3.8.1 any material adverse changes in the assets, properties,
operations, financial condition or prospects of the Seller;
3.8.2 any damage, destruction or loss, whether covered by insurance or
not, having a material adverse effect on the business, operations, financial
condition or prospects of the Seller;
3.8.3 any entry into or termination of any material commitment,
contract, agreement or transaction affecting the Seller, including, without
limitation, any material borrowing or capital expenditure or sale or other
disposition of any material asset or assets, other than this Agreement and
agreements executed in the ordinary and usual course of business;
3.8.4 any transfer of or right granted under any material lease,
license, agreement, patent, trademark, trade name or copyright;
3.8.5 default or breach by the Seller in any material respect under any
contract or Permit;
3.8.6 any event other than in the ordinary and usual course of business
which could be reasonably expected to have a material adverse effect upon the
business of the Seller, and after reasonable inquiry by the Shareholder and the
Seller, they know of no development or threatened development of a nature that
is, or which could be reasonably expected to have a materially adverse effect
upon the business of the Seller or upon any of its assets, properties,
operations or financial conditions.
3.9 TAXES: All tax returns of Seller which are due have been duly filed and
are correct and all taxes, assessments and other governmental charges upon the
Seller which are shown to be due and payable thereon have been paid. All tax
returns of the Seller which become due prior to the Closing shall be timely
filed by the Seller. The Seller does not know of any ongoing tax audit,
proposed tax deficiency, assessment, charge or levy against it, the payment of
which is not adequately provided for on the books of the Seller. The Seller
will provide to the Purchaser prior to the Closing a true and correct copy of
its tax returns for the prior three years, any returns filed subsequent to the
date hereof.
3.10 OWNERSHIP OF ASSETS: The Seller owns outright, and has good, marketable
and insurable title to all of its assets and properties reflected in the
Seller's Balance Sheet of business since the Seller's Balance Sheet date, free
and clear of all liens, mortgages, pledges, conditional sales agreements,
restrictions on transfer or other encumbrances or charges whatsoever. The
Seller does not own any patents, copyrights, trademarks, trade names or other
similar intangible assets. No other person has any ownership or similar right
in, or contractual or other right to acquire any such right in, any of the
Seller's assets. The Shareholder and the Seller do not know of any potential
action by any party, governmental or other and no proceedings with respect
thereto have been instituted of which the Seller has notice that would
materially effect the Seller's ability to use and to utilize
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each of such assets in its business. Exhibit "C" sets forth a listing of all
major equipment owned by the Seller, including a description thereof. All
properties and other assets owned by the Seller or used by the Seller in the
conduct of its business are in good operating condition and repair (ordinary
wear and tear excepted), are suitable for the conduct of its business as
presently conducted, have been properly maintained, and do not require any
maintenance or repairs except for routine maintenance and repairs that are not
material in nature or in cost.
3.11 INSURANCE: Policies of fire, liability, workers compensation and other
forms of insurance maintained by the Seller, which are usual and customary in
the business of the Seller as to amount and scope, and are adequate to protect
the Seller against any reasonably foreseeable risk of loss, including business
interruption, are listed in Exhibit "D" and identifies for each policy, the
carrier, amount of coverage, annual premium, risks covered, placing broker or
agent, and other relevant information as to each. All policies listed in
Exhibit D have been provided to the Purchaser prior to the Closing. All
premiums have been currently paid on such policies, and all policies will be
maintained and, if necessary, renewed through the Closing Date. Neither the
Shareholder nor the Seller have failed to give any notice or present any claim
under any such policy as to which any insurance Seller is denying liability or
defending under a reservation of rights clause or otherwise.
3.12 LITIGATION, COMPLIANCE WITH LAW: There are no pending or threatened
actions, suits, proceedings or governmental investigations or reviews relating
to the Seller or any of its properties, assets or business or, to the knowledge
of the Shareholder or the Seller, any order, injunction, award or decree
outstanding, against the Seller or against or relating to any of its properties,
assets or business; and the Shareholder and the Seller, after reasonable
inquiry, knows of no basis for any such action, suits or proceedings or any such
governmental investigations, reviews, orders, injunctions or decrees. To the
knowledge of the Shareholder and the Seller, the Seller is not in violation of
any material law, regulation, ordinance, order, injunction, decree, award, or
other requirement of any governmental body, court or arbitrator relating to its
properties, assets or business.
3.13 COMPLIANCE WITH INSTRUMENTS; ETC: The Seller is not:
3.13.1 in default under any indenture, agreement or instrument to which
it is a party or by which it is bound; or
3.13.2 in violation of its Certificate of Incorporation, by-laws or of
any applicable law.
3.14 INVENTORIES: All Inventories of the Seller, whether or not reflected in
the Seller's Balance Sheet are of a quality and quantity usable and salable in
the ordinary course of business, except for obsolete items and items of below
standard quality, all of which in the aggregate are immaterial in amount. Items
included in such Inventories are carried on the books of the Seller, and are
valued on the Seller's Balance Sheet, at the lower of cost or market and, in any
event, are not greater than their net realizable value, on an item-by-item
basis, after appropriate deductions for cost of completion, marketing costs,
transportation expense and allocation of overhead. To the best
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knowledge of the Seller, the Inventory is unadulterated and does not contain any
ingredient or substances prohibited by pertinent laws, rules or regulations and
all labels for and printed materials relating to the Inventory correctly
represent the ingredients thereto and comply with all laws, rules or regulations
pertaining to the labeling of the products comprising the Inventory.
3.15 TRADE NAMES: There are no trade names under which the Seller has conducted
any part of its business since inception.
3.16 REAL PROPERTY: The Seller owns no real property and leases the real
property. (See Lease, Exhibit "E")
3.17 INTEREST IN COMPETITOR, SUPPLIERS OR CUSTOMERS: None of the officers,
directors or shareholders of the Seller or, to the best of their knowledge,
members of their immediate families, owns an interest in any person or firm
which is a competitor, supplier, or customer of or to the Seller or, has an
existing contractual relationship with the Seller.
3.18 ACCOUNTS PAYABLE: The accounts payable reflected on the Seller's Balance
Sheet, and those reflected in the most recent balance sheet included in the
Unaudited Financial Statements, and those reflected on the books of the Seller
at the time of the Closing, reflect all amounts owed by the Seller in respect of
trade accounts due and other payables of the Seller, and the actual Liability of
the Seller in respect of such obligations was not and will not be, on any of
such dates, in excess of the amounts, so reflected on the balance sheets or the
books of the Seller, as the case may be.
3.19 EMPLOYEES: To their best knowledge, the Seller has complied with all
laws, regulations and orders relating to the employees of its business,
including but not limited to OSHA, EEO, ERISA, and wages and hours. None of the
Seller's employees are represented by any labor union or collective bargaining
agent. The Seller does not maintain or make any employer contributions under
any bonus, profit sharing compensation, or other plans, agreements, trusts,
funds, or arrangements for the benefit of directors, officers or employees of,
or whose principal responsibilities relate to, the Seller, and with the
exception of the Letter of Intent to Enter into an Executive Employment
Agreement attached as Exhibit "L", there are no employment, consulting,
severance, or indemnification arrangements, agreements, or understandings
between the Seller and any current or former directors, officers or other
employees (or Affiliates thereof) of, or whose principal responsibilities relate
to, the Seller. Exhibit "F" identifies all present employees of the Seller and
their respective salaries. The Seller is not, and following the Closing will
not be, bound by any express or implied contract or agreement to employ,
directly or as a consultant or otherwise, any person for any specific period of
time, except as set forth pursuant to the provisions hereof.
3.20 AGREEMENTS AND OBLIGATIONS; PERFORMANCE: Exhibit "G" sets forth a list
of material agreements to which the Seller is a party or is otherwise bound.
Other than these material agreements, the Seller is not party to or bound by
any:
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3.20.1 written or oral agreement or other contractual commitment,
understanding or obligation which involves aggregate payments or receipts in
excess of $2,000 that cannot be cancelled on 30 days or less notice without
penalty or premium or any continuing obligation or liability;
3.20.2 contractual obligation or contractual liability of any kind to
the Shareholder or Seller which will not be cancelled on or prior to the Closing
except as otherwise provided by this Agreement;
3.20.3 contract, arrangement, commitment or understanding with its
customers or any officer, employee, stockholder, director, representative or
agent thereof for the repurchase of products, sharing of fees, the rebating of
charges to such customers, bribes, kickbacks from such customers or other
similar arrangements;
3.20.4 contract for the purchase or sale of any materials, products or
supplies or for any services, which commits or will commit it for a fixed term;
3.20.5 contract of employment with any employee not terminable at will
without penalty or premium or any continuing obligation or liability, except as
otherwise provided by this Agreement;
3.20.6 deferred compensation, bonus or incentive plan or agreement not
cancelled at will without penalty or premium or any continuing obligation or
liability which will not be cancelled on or prior to the Closing;
3.20.7 management or consulting agreement not terminable at will
without penalty or premium or any continuing obligation or liability which the
Seller and each such individual agree to cancel on the Closing Date;
3.20.8 lease for real or personal property (including borrowings
thereon) license or royalty agreements;
3.20.9 union or other collective bargaining agreement;
3.20.10 agreement, commitment or understanding relating to indebtedness
for borrowed money;
3.20.11 contract which, by its terms, requires the consent of any party
thereto, to the consummation of the transactions contemplated hereby;
3.20.12 contract containing covenants limiting the freedom of the
Seller to engage or compete in any line or business or with any person in any
geographical area;
3.20.13 contract or option relating to the acquisition or sale of any
business;
3.20.14 voting trust agreement or similar agreement;
3.20.15 option for the purchase of any asset, tangible or intangible;
or
3.20.16 other contract, agreement, commitment or understanding which
materially affects any of its properties, assets or business, whether directly
or indirectly, or which was entered into other than in the ordinary course of
business. The Seller has in all material respects
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performed all material obligations required to be performed by it to date under
all agreements to which it is a party and is not in default in any material
respect under any of its agreements and has received no notice of any default or
alleged default which has not heretofore been cured or which notice has not
heretofore been withdrawn.
3.21 COOPERATION IN FILING WITH SEC OR OTHER REGULATORY AGENCIES: The
Shareholders and the Seller shall cause its officers, directors, employees,
accountants and attorneys to cooperate fully with the Purchaser in connection
with the filing of any statements, public or private offerings, returns or
notices with the Securities and Exchange Commission, NASD, or any other
Regulatory Agency.
3.22 NO SUBSIDIARIES: The Seller does not have any subsidiaries and the Seller
and the Shareholder do not own directly or indirectly any equity interest in any
other business or entity which deals in or relates to the World Wide Web
Publishing industry. The Shareholder and the Seller shall transfer to the
Purchaser all of their right, title and interest in and to any such entity
without any further consideration payable to them by the Purchaser and shall
execute such documents as are necessary to effectuate this purpose.
3.23 NO BREACH: Neither the execution and delivery of this Agreement nor
compliance by the Shareholder and the Seller with any of the provisions hereof
nor the consummation of the transactions contemplated hereby, will:
3.23.1 violate, alone or with notice over the passage of time, result
in the material breach or termination of, or otherwise give any contracting
party the right to terminate, or declare a default under, the terms of any
material agreement or other material document or undertaking, oral or written to
which the Seller is a part or by which its properties or assets may be bound;
3.23.2 result in the imposition of any lien, mortgage, security
interest, pledge, encumbrance, easement, claim or other restriction or charge on
any of the assets of the Seller, and will not alter or impair any of the assets
of the Seller nor the Purchaser's ability to utilize in the same manner in which
they are currently utilized by the Seller in connection with its business;
3.23.3 violate any judgment, order, injunction, decree or award
against, or binding upon, the Seller or upon its properties or assets; or
3.23.4 violate any law or regulation of any jurisdiction relating to
the Seller, its assets or properties.
3.24 BROKERS: All negotiations relative to this Agreement and the Transaction
contemplated hereby have been carried on directly with the Purchaser without the
intervention of any broker, finder investment banker or other third party.
Shareholder and the Seller have not engaged, consented to, or authorized any
broker, finder, investment banker or any other third party to act on its behalf,
directly or indirectly, as a broker or finder in connection with this Agreement
and the Transaction, and the Shareholder and the Seller agree to indemnify the
Purchaser against, and to hold the Purchaser harmless from any claim for
brokerage or similar commission or other
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compensation which may be made against the Purchaser by any third party in
connection with any of the transactions contemplated hereby which claim is based
upon any action by the Shareholder or the Seller.
3.25 UNTRUE OR OMITTED FACTS: No representation, warranty, document,
certificates or other writings furnished by the Shareholder or the Seller in
this Agreement contains any untrue statement of a material fact, or omits to
state a fact necessary in order to make such representations, warranties or
statements not materially misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser makes the following representations and warranties to the
Shareholder, each of which shall be deemed material:
4.1 VALID CORPORATE EXISTENCE; QUALIFICATIONS: The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado. The Purchaser has the corporate power and authority to carry
on its business as now being conducted. There is no jurisdiction in which
failure to qualify would have a material adverse effect on the Purchaser or its
assets, properties or business. A copy of the Purchaser's Certificate of
Incorporation (certified by the appropriate official of the State of Colorado)
and by-laws and minute books (certified by the Purchaser's Secretary), as
amended to date, which will be delivered to the Shareholder and Seller at or
prior to the Closing, are true and complete copies of those documents as now in
effect. The minute books of the Purchaser contain accurate records of all
meetings of its Board of Directors, and stockholders since its inception, and
accurately reflect all transactions referred to therein.
4.2 CAPITALIZATION: (Steve needs to confirm these numbers)The authorized
capital stock of the Purchaser consists of 100,000,000 shares of $.001 par
value, non-assessable, common stock, of which 9,684,437 shares are issued and
outstanding, see Exhibit "H" for list of shareholders. The Purchaser has other
capital stock authorized for issuance consisting of twenty-five million
(25,000,000) shares of $.001 par value Preferred Stock of which, there is none
issued and outstanding at this time.
4.3 CORPORATE AUTHORITY; BINDING NATURE OF AGREEMENT: The Purchaser has the
power to enter into this Agreement and to carry out its obligation hereunder.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of the Purchaser and no other corporate proceedings on the part of the
Purchaser are necessary to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement constitutes the valid and binding obligation of the Purchaser and is
enforceable in accordance with its terms.
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4.4 CONSENTS: There are no consents of governmental and other regulatory
agencies, foreign or domestic, and of other third parties required to be
received by or on the part of the Purchaser, to enable it to enter into and
carry out this Agreement in all material respects.
4.5 BROKERS: All negotiations relative to this Agreement and the Transaction
contemplated hereby have been carried on directly with the Shareholders and the
Seller without the intervention of any broker, finder, investment banker or
other third party. The Purchaser has not engaged, consented to, or authorized
any broker, finder, investment banker or any other third party to act on its
behalf, directly or indirectly, as a broker or finder in connection with this
Agreement and the Transaction, and the Purchaser agrees to indemnify the
Shareholder and the Seller against, and to hold the Shareholder and the Seller
harmless from any claim for brokerage or similar commission or other
compensation which may be made against the Shareholder or the Seller by any
third party in connection with any of the transactions contemplated hereby which
claim is based upon any action by the Purchaser.
4.6 FINANCIAL STATEMENTS: The Purchaser, prior to the Closing Date, will
deliver to the Sellers, the Unaudited Financial Statements of the Purchaser.
All of the historical financial statements contained in such documents will have
been prepared from the books and records of the Purchaser. The Unaudited
Financial Statements and the consolidated audit will be prepared in accordance
with GAAP, and fairly and accurately reflect the financial position and
condition of the Purchaser as at the dates and for the periods indicated.
Without limiting the foregoing, at the date of the Purchaser's Balance Sheet,
the Purchaser will have owned each of the assets included in preparation of the
Purchaser's Balance Sheet, and for the valuation of such assets in the
Purchaser's Balance Sheet, will not be for more than their fair saleable value
(on an item by item basis) at that date; and the Purchaser will have no
Liabilities other than those included in the Purchaser's Balance Sheet, nor any
Liabilities in amounts in excess of the amounts included for them in the
Purchaser's Balance Sheet. From the date hereof, through the Closing Date, the
Purchaser will continue to prepare financial statements on the same basis that
it has done so in the past, will promptly deliver the same to the Sellers, and
agrees that from and after such delivery, the foregoing representations will be
applicable to each financial statement so prepared and delivered. The Unaudited
Financial Statements will be prepared by the Company's accountant, whose report
thereon is included herein and referenced as Exhibit "B".
4.7 NO UNDISCLOSED LIABILITIES: Except as set forth in the Purchaser's
Balance Sheet included in the Unaudited Financial Statements as Exhibit B, the
Purchaser has no material debts, liabilities or obligations, known or unknown,
contingent or absolute, in excess of $1,000, except those arising in the
ordinary course of business of the Purchaser and consistent with past practice.
4.8 LITIGATION, COMPLIANCE WITH LAW: There are no pending or threatened
actions, suits, proceedings or governmental investigations or reviews relating
to the Purchaser or any of its properties, assets or business or, to the
knowledge of the Purchaser, any order, injunction, award
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or decree outstanding, against the Purchaser or against or relating to any of
its properties, assets or business; and the Purchaser, after reasonable inquiry,
knows of no basis for any such action, suits or proceedings or any such
governmental investigations, reviews, orders, injunctions or decrees, with the
exception of the counter suit filed by former Directors and Officers of BSW,
formally a wholly owned subsidiary of the Purchaserto the knowledge of the
Purchaser, the Purchaser is not in violation of any material law, regulation,
ordinance, order, injunction, decree, award, or other requirement of any
governmental body, court or arbitrator relating to its properties, assets or
business.
ARTICLE V
COVENANTS OF THE SHAREHOLDER AND THE SELLER
5.1 COVENANTS OF THE SHAREHOLDER AND THE SELLER: The Shareholder and the
Seller hereby covenants to, from and after the date hereof and until the Closing
or earlier termination of this Agreement, without the prior written consent of
the Purchaser:
5.1.1 Best Efforts: To take every action reasonably required of it and
use its best efforts to satisfy the conditions at closing as set forth in this
Agreement and otherwise to ensure the prompt and expedient consummation of the
Transaction substantially as contemplated by this Agreement, and will exert all
reasonable efforts to cause the Transaction to be consummated, provided in all
instances that the representations and warranties of the Purchaser in this
Agreement are and remain true and accurate and that the covenants and agreements
of the Purchaser in this Agreement are satisfied or appear capable of being
satisfied and subject, at all times, to the right and ability of the directors
of the Seller to satisfy their fiduciary obligations.
5.1.2 Access and Information: To afford the officers, attorneys,
accountants and other authorized representatives of the Purchaser (collectively,
the "Representatives"), free and full access, during regular business hours and
upon reasonable notice, to all of its books, records, contracts, commitments and
properties (including, without limitation, tax returns) at the Purchaser's own
expense, to review, examine and investigate the books, records and properties of
the Seller to determine the accuracy of the representations and warranties made
by the Shareholder and the Seller. The Shareholder and the Seller shall cause
its employees, accountants and attorneys to cooperate fully with said review,
examination and investigation. The Seller shall promptly furnish to the
Purchaser (i) all communications to its directors or to its Shareholder,
generally, (ii) internal monthly financial information concerning its business
properties and personnel as the Purchaser may reasonably request.
5.1.3 Insurance: To maintain in full force and effect insurance
coverage of a type and amount customary in its business, but not less than
presently in effect.
5.1.4 Discharge Taxes and Indebtedness: To pay and discharge, as they
become due, all taxes, assessments, debts, claims and other governmental or non-
governmental charges lawfully imposed upon on incurred by it or the properties
and assets of the Seller, except taxes,
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assessments, debts, claims and charges contested in good faith in appropriate
proceedings for which the Seller shall have set aside adequate reserves for the
payment of such tax, assessment, debt, claim or charge. The Seller shall
provide the Purchaser, upon the Purchaser's request, evidence of payment of such
taxes, assessments, debts, claims and charges satisfactory to the Purchaser.
5.1.5 Compliance with Agreements; Compliance with Laws: To comply
with the terms and conditions of all material agreements, commitments or
instruments to which the Shareholder or the Seller is a party or by which he or
it may be bound. The Shareholder and the Seller shall duly comply in all
material respects with any material laws, ordinances, rules and regulations of
any foreign, federal, state or local government or any agency thereof, or any
writ, order or decree, and conform to all valid requirements of governmental
authorities relating to the conduct of its business, properties and assets. The
Seller also covenants to file all tax returns as they become due prior to the
Closing.
5.1.6 No Indebtedness: Not to incur any obligation or liability,
absolute or contingent, except for those incurred in the ordinary and usual
course of its business or in connection with the transactions contemplated by
this Agreement.
5.1.7 No Dividend, Retirement or Purchase of Stock: Not to declare or
pay any dividend or distribution, in cash or otherwise, or any shares of stock
of the Seller or redeem, return, purchase or otherwise acquire directly or
indirectly any shares of stock.
5.1.8 Conduct of Business Prior to Closing:
(i) to conduct its business only in the ordinary and usual
course and make no material change in any of its business practices and
policies;
(ii) to use its best efforts to preserve its business
organization intact, to keep available the services of its present employees and
consultants and to preserve its good will;
(iii) to maintain good relationships with suppliers, lenders,
creditors, employees, customers and others having business or financial
relationships with them;
(iv) it shall not (a) amend its Certificate of Incorporation or
by-laws or (b) split, combine, or reclassify any of its outstanding securities;
(v) it shall not (a) adopt, enter into, or amend any bonus,
profit sharing, compensation, stock option, warrant, pension, retirement,
deferred compensation, employment, severance, termination, or other employee
benefit plan, agreement, trust fund, or arrangement for the benefit or welfare
of any officer, director or employee of the Seller or (b) agree to any material
(in relation to historical compensation) increase in compensation payable or to
become payable to, or any increase in the contractual term of employment of, any
such employee, except in the ordinary course of business in accordance with past
practice;
(vi) it shall not sell, lease, mortgage, encumber, or otherwise
dispose of or grant any interest in any of its assets or properties except for
sale, encumbrances and other dispositions or
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grants in the ordinary course of business and consistent with past practice and
except for liens for taxes not yet due or liens or encumbrances that are not
material in amount or effect and do not impair the use of the property, or as
specifically provided for or permitted in this Agreement;
(vii) it shall not enter into, or terminate, any material
contract, agreement, commitment or understanding;
(viii) it will not hold any meetings of its board of directors,
or any committee thereof, or of its Shareholder, without giving a representative
selected by the Purchaser the option to attend the same (although the Seller may
request that such representative absent himself during that portion of any such
meeting that pertains to issues arising under this Agreement); and
(ix) it shall immediately notify the Purchaser of any event or
occurrence or emergency material to, and not in the ordinary and usual course of
business.
5.1.9 No Breach: Not to voluntarily take any action or do anything
which will cause a breach of or default respecting its covenants,
representations or warranties set forth herein and promptly to notify the
Purchaser of any event or fact which represents or is likely to cause such a
breach or default.
5.1.10 Publicity: Prior to the Closing, any written news releases by
the Seller pertaining to this Agreement or the Transaction shall be submitted to
the Purchaser for review and approval prior to release by the Seller, and shall
be released only in a form approved by the Purchaser, provided, however, that
such approval shall not be unreasonably withheld, and (b) such review and
approval shall not be required, if prior review and approval would prevent the
timely and accurate dissemination of such press release as required to comply,
in the judgment of counsel, with any applicable law, rule or policy.
5.1.11 Updating of Schedules and Exhibits: The Seller and
Shareholder shall notify the Purchaser of any changes, additions or event which
may cause any change in or addition to any Exhibits delivered by it under this
Agreement, promptly after the occurrence of the same and at the Closing by the
delivery of updates of all Exhibits. No notification pursuant to this Section
shall be deemed to cure any breach of any representation or warranty made in
this Agreement unless the Purchaser specifically agrees thereto in writing nor
shall any such notification be considered to constitute or give rise to a waiver
by the Purchaser of any condition set forth in this Agreement.
5.1.12 Understanding of Shareholder and Seller: Shareholders hereby
state and understand that the materials, including current financial statements,
current income tax returns prepared and delivered by Shareholders, and they are
familiar with the Business of Purchaser, and they are acquiring the Purchaser's
restricted shares under Section 4(2), commonly known as the private offering
exemption of the Securities Act of 1933, as amended.
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ARTICLE VI
COVENANTS OF THE PURCHASER
6.1 COVENANTS OF THE PURCHASER: The Purchaser hereby covenants to, from and
after the date hereof and until the Closing or earlier termination of this
Agreement:
6.1.1 Best Efforts: To take every action reasonably required of in and
use its best efforts to satisfy the conditions to Closing set forth in this
Agreement and otherwise to ensure the prompt and expedient consummation of the
Transaction substantially as contemplated by this Agreement, and will exert all
reasonable efforts to cause the Transaction to be consummated, provided in all
instances that the representations and warranties of the Shareholder and the
Seller in this Agreement are and remain true and accurate and that the covenants
and agreements of the Shareholder and the Seller in this Agreement are satisfied
or appear capable of being satisfied and subject, at all times, to the right and
ability of the directors of the Purchaser to satisfy their fiduciary
obligations.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE SHAREHOLDER AND THE SELLER TO CLOSE
The obligation of the Shareholder and the Seller to enter into and complete the
Closing is subject to the fulfillment, prior to the Closing Date, of each of the
following conditions, any one or more of which may be waived by the Shareholder
or the Seller:
7.1 CONSENTS, LICENSES AND PERMITS: The Purchaser shall have obtained all
consents, licenses, permits, approvals and authorizations and waivers of third
parties necessary for the performance by it of all of its obligations under this
Agreement.
7.2 REPRESENTATIONS AND WARRANTIES: All representations and warranties of the
Purchaser set forth in this Agreement and in any written statement or other
document delivered pursuant hereto or in connection with the Transaction
contemplated hereby shall be true in all material respects as at the Closing
Date, as if made at the Closing and as of the Closing Date.
7.3 COVENANTS: The Purchaser shall have performed and complied in all material
respects with all covenants and each of its agreements and obligations required
by this Agreement to be performed or complied with prior to or at the Closing.
7.4 NO ACTIONS: No action, suit, proceeding or investigations shall have been
instituted against the Purchaser, and be continuing before a court or by a
governmental body or agency, or shall have been threatened and be unresolved, to
restrain or to prevent or to obtain damages in respect of, the carrying out of
the transactions contemplated hereby, or which might materially affect the right
of the Seller and the Shareholder in the Transaction after the Closing Date, or
which might have a materially adverse effect thereon.
7.5 APPROVAL OF BUSINESS PLAN: The Purchaser shall have approved pro formas
(Exhibit A) provided by Prevail Online, Inc. and shall approve within six months
from the date of this
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Agreement the Business Plan (Exhibit "J").
7.6 ADDITIONAL DOCUMENTS: The Purchaser shall have delivered all such
certified resolutions, certificates and documents as the Shareholder or the
Seller or its counsel may have reasonably requested.
ARTICLE XIII
CLOSING
8.1 LOCATION AND TIME: The Closing provided for herein shall take place at the
offices of the Purchaser, located in the State of Nebraska. The date and time
of Closing shall be mutually determined by both parties.
8.2 ITEMS TO BE DELIVERED BY THE SHAREHOLDER OR THE SELLER: At the Closing,
the Shareholder and/or the Seller will deliver or cause to be delivered to the
Purchaser:
8.2.1 Stock certificates for 100,000 shares of common stock of the
Seller;
8.2.2 Unaudited financial statements;
8.2.3 Such other certified resolutions, documents and certificates as
are required to be delivered by the Shareholder or the Seller pursuant to the
provisions of the Agreement; and
8.3 ITEMS TO BE DELIVERED BY PURCHASER: At the Closing, the Purchaser will
deliver or cause to be delivered to the Shareholder:
8.3.1 Stock certificates required by Article II;
8.3.2 Such other certified resolutions, documents and certificates as
are required to be delivered by the Purchaser pursuant to the provisions of the
Agreement.
8.3.3 Unaudited financial statements.
ARTICLE IX
POST CLOSING OBLIGATIONS
9.1 SURVIVAL: The parties hereto agree that their respective representations
and warranties shall survive the execution and delivery of this Agreement and
the consummation of the transactions provided for herein.
9.2 INDEMNIFICATION BY SHAREHOLDER AND THE SELLER: The Shareholder and the
Seller shall indemnify, save and keep the Purchaser, its successors and assigns,
forever harmless against and from all liabilities, demands, claims, actions or
causes of action, assessments, losses, penalties, costs, damages or expenses,
including reasonable attorneys' fees and expenses, of every kind, nature and
description, fixed or contingent, sustained or incurred by Purchaser, its
successors or assigns arising out of, resulting from, based upon or in
connection with:
9.2.1 any representation or warranty made by the Shareholder and the
Seller to the Purchaser herein or any violation of agreements or covenants or
any instrument or document delivered to Purchaser in connection herewith being
incorrect in any material respect; and
9.2.2 the failure of the Shareholder or the Seller to comply with, or
the breach by
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Shareholder or the Seller of any of the covenants and agreements in this
Agreement to be performed by Shareholder or the Seller.
9.3 INDEMNIFICATION BY THE PURCHASER: The Purchaser shall indemnify, save and
keep the Shareholder and the Seller, their successors and assigns, forever
harmless against and from all liabilities, demands, claims, actions or causes of
action, assessments, losses, penalties, costs, damages or expenses, including
reasonable attorneys' fees and expenses, of every kind, nature and description,
fixed or contingent, sustained or incurred by Shareholder and the Seller, its
successors or assigns arising out of, resulting from, based upon or in
connection with:
9.3.1 any representation or warranty made by Purchaser to Shareholder
or the Seller herein or any violation of agreements or covenants or any
instrument or document delivered to Shareholder and the Seller in connection
herewith being incorrect in any material respect provided a claim is asserted by
Shareholder or the Seller within one (1) year of the Closing Date.
9.3.2 the failure of the Purchaser to comply with, or the breach by
the Purchaser of any of the covenants and agreements in this Agreement to be
performed by the Purchaser;
9.4 DEFENSE OF CLAIMS: A party entitled to indemnification hereunder (an
"Indemnified Party") agrees to notify each party required to indemnity hereunder
(an "Indemnifying Party") with reasonable promptness of any claim asserted
against it in respect of which any Indemnifying Party may be liable under this
Agreement, which notification shall be accompanied by a written statement
setting forth the basis of such claim and the manner of calculation thereof. An
Indemnifying Party shall have the right to defend any such claim at its or his
own expense and with counsel of its or his choice; provided, however, that such
counsel shall have been approved by the Indemnified Party prior to engagement,
which approval shall not be unreasonably withheld or delayed; and provided
further, that the Indemnified Party may participate in such defense, if it so
chooses, with its own counsel and at its own expense.
9.5 RIGHTS WITHOUT PREJUDICE: The rights of the parties under this Article IX
are without prejudice to any other rights or remedies that it may have by reason
of this Agreement or as otherwise provided by law.
9.6 Seller is sufficiently capitalized and has sufficient operating cash
inflows and thus requires no additional financing to implement its business
plan.
9.7 OPERATING AGREEMENTS: From and after the Closing, the Purchaser and
Prevail Online, Inc. shall operate as follows:
9.7.1 Prevail Online, Inc. shall operate as a wholly owned subsidiary
of the Purchaser. No changes in the corporate organization of Global
Entertainment Holdings/Equities, Inc. shall be made without the consent of the
Board of Directors, or a majority Shareholder vote.
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<PAGE>
ARTICLE X
TERMINATION AND WAIVER
10.1 TERMINATION: This Agreement and the Transaction may be terminated at any
time prior to the Closing:
10.1.1 By mutual consent of the Seller and the Purchaser;
10.1.2 By the Seller if any of the conditions set forth in Article IV,
and by the Purchaser if any of the conditions set forth in Article III hereof,
shall not have been fulfilled on or prior to the Closing Date, or shall have
become incapable of fulfillment, and shall not have been waived. In the event
this Agreement is terminated as described above, this Agreement shall be void
and of no force and effect.
10.2 WAIVER: Any condition to the performance of the Seller, Shareholder and
the Purchaser which legally may be waived on or prior to the Closing Date may be
waived at any time by the party entitled to the benefit thereof by action taken
or authorized by an instrument in writing executed by the relevant party or
parties. The failure of any party at any time or times to require performance
of any provision hereof shall in no manner affect the right of such party at a
later time to enforce the same. No waiver by any party of the breach of any
term, covenant, representation or warranty contained in this Agreement as a
condition to such party's obligations hereunder shall release or affect any
liability resulting from such breach, and no waiver of any nature, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be or
construed as further or continuing waiver of any such condition or of any breach
of any other term, covenant, representation or warranty of this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 EXPENSES: Each of the parties hereto shall bear his or its own expenses
in connection herewith, including any expenses incurred if the proposed
transaction is abandoned at any time prior to the consummation thereof.
11.2 CONFIDENTIAL INFORMATION: Each party agrees that such party and its
representatives will hold in strict confidence all information and documents
received from the other parties and, if the transactions herein contemplated
shall not be consummated, each party will continue to hold such information and
documents in strict confidence and will return to such other parties all such
documents (including the Exhibits attached to this Agreement) then in such
receiving party's possession without retaining copies thereof; provided,
however, that each party's obligations under this Section 11.2 to maintain such
confidentiality shall not apply to any information or documents that are in the
public domain at the time furnished by the others or that become in the public
domain thereafter through any means other than as a result of any act of the
receiving party or of its agents, officers, directors or stockholders which
constitutes a breach of this Agreement,
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<PAGE>
or that are required by applicable law to be disclosed or which the Purchaser
furnishes to its attorneys, accountants, underwriters or other persons it deems
necessary or advisable in connection with the preparation of Purchaser's
Refinancing. The parties agree that the remedy at law for any breach of this
Section 11.2 will be inadequate and a non-breaching party will be entitled to
injunctive relief to compel the breaching party to perform or refrain from
action required or prohibited hereunder.
11.3 MODIFICATION, TERMINATION OR WAIVER: This Agreement may be amended,
modified, superseded or terminated, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, but only by a
written instrument executed by the party waiving compliance. The failure of any
party at any time or times to require performance of any provisions hereof shall
in no manner affect the right of such party at a later time to enforce the same.
11.4 NOTICES: All notices, requests, demands and communications under or in
respect hereof shall be deemed to have been duly given and made if in writing if
delivered by hand or certified mail, return receipt requested to the party
concerned or by regular mail together with a facsimile transmission at its
address or fax number appearing below together with a copy as indicated.
Service shall be deemed to be effective by certified mail or by regular mail
together with a facsimile transmission on the date of mailing and transmitting.
The said addresses and fax numbers are as follows:
If to Shareholders and Seller: Prevail Online, Inc.
Ron Pereira
817 Columbus Ave., #145
San Francisco, CA
(415) 433-5209 (fax)
with a copy to:
If to Purchaser: Global Entertainment Equities/Holdings, Inc.
Steven M. Abboud, (President)
6235 S. 90th Street
Omaha, Nebraska 68127
402-331-2899 (fax)
The parties may change the persons, addresses and fax numbers to which the
notices or other communications are to be sent by giving written notice of any
such change in the manner provided herein for giving notice.
11.5 BINDING EFFECT AND ASSIGNMENT: This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto;
provided, however, that no
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assignment of any rights or delegation of any obligations provided for herein
may be made by any party without the express written consent of the other
parties.
11.6 ENTIRE AGREEMENT: This Agreement contains the entire Agreement between
the parties with respect to the subject matter hereof.
11.7 EXHIBITS: The Exhibits attached hereto and the documents and instruments
referred to herein or required to be delivered simultaneously herewith or at the
Closing are expressly made a part of this Agreement as fully as though
completely set forth herein, and all references to this Agreement herein or in
any of such Exhibits, documents, or instruments shall be deemed to refer to and
include all such Exhibits, documents and instruments. All of the Exhibits
referred to herein are incorporated herein by reference.
11.8 GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with the laws of the State of Colorado.
11.9 COUNTERPARTS: This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but which together shall constitute one
and the same instrument.
11.10 SECTION HEADINGS: The section headings contained in this Agreement are
inserted for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
11.11 JOINT AND SEVERAL: All obligations, representations, responsibilities
and the like of the Shareholder shall be joint and several.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the day and year first above written.
WITNESS: Purchaser: Global Entertainment Holding/Equities, Inc.
By:___________________
_____________/President
Seller: Prevail Online, Inc.
By:___________________
_____________/President
By:___________________
____________/Shareholder
22
<PAGE>
Exhibits
A Projections
B Financial Statements (Purchaser & Seller)
C List of Major Equipment and assets owned by Seller
D Insurance Policies
E Leases
F List of Employees and Salaries of Seller
G Material Agreements of Seller
H List of Shareholders of Purchaser
I Material Agreements of Purchaser
J Business Plan
K List of Shareholders of Seller
L Letter of Intent to Enter into an Executive Employment Agreement
23
ARTICLES OF INCORPORATION Received
1997 Jul 10 pm 1:24
OF Secretary of State
State of Colorado
MASADI RESOURCES, Inc.
The undersigned natural person, more than eighteen years of age, hereby
establishes a corporation pursuant to the statutes of Colorado and adopts the
following Articles of Incorporation:
FIRST: The name of the corporation is:
Masadi Resources, Inc.
Principal office: 555 E 10th Avenue., Suite 101
Denver, Colorado 80203
SECOND: The corporation shall have perpetual existence.
THIRD: (a) The purpose of the corporation is to engage in any lawful
act or activity for which corporations may be organizedunder the laws of the
State of Colorado.
(b) In furtherance of the foregoing purpose, the corporation
shall have and may exercise all of the rights, powers and privileges now or
hereafter conferred upon corporations organized under the laws of the State of
Colorado. In addition, it may do everything, necessary, suitable or proper for
the accomplishment of any of its corporation purposes.
FOURTH: (a) The aggregate number of shares which the corporation shall
have authority to issue is One hundred million (100,000,000) shares of common
stock, $.001 par value, and Twenty-five Million (25,000,000) shares of preferred
stock, $.001 par value. These preferred shares may be issued in one or more
series at the discretion of the Board of Directors.
1
<PAGE>
(b) Each shareholder of record shall have one vote for each
share of common stock standing in his or her name on the books of the
corporation and entitled to vote, except that in the election of directors he or
she shall have the right to vote such number of shares for as many persons as
there are directors to be elected. Cumulative voting shall not be allowed in
the election of directors or for any other purpose.
(c) No shareholder of the corporation shall have any preemptive
or similar right to acquire any additional unissued or treasure shares of stock,
or for other securities of any class, or for right, warrants, options to
purchase stock or for scrip, or for securities of any kind convertible into
stock or carrying stock purchase warrants or privileges.
(d) The board of directors may, from time to time, distribute
to the shareholders in partial liquidation, out of stated capital or capital
surplus of the corporation, a portion of its assets, in cash or property,
subject to the limitations contained in the statutes of Colorado.
FIFTH: The board of directors shall be composed of not less than two
nor more than nine directors. The initial board of directors of the corporation
who shall serve as directors until the first annual meeting of shareholders or
until their successors are elected and shall qualify are as follows:
NAMES ADDRESS
Michael A. Abboud 11605 Westwood Lane
President & Director Omaha, NE 68144
Brenda J. Abboud 11904 Buckingham Road
Treasurer & Director Austin, TX 78759
Michael S. Luther 1611 South 91st Avenue
Secretary & Director Omaha, NE 68124
Christopher P. Murray 2802 Field Crddk Court
Director Marietta, GA 30062
2
<PAGE>
SIXTH: The address of the initial registered office of the corporation
is: 555 East 10th Avenue, Suite 101, Denver, CO 80203.
The name and address of its initial registered agent is Raul N.
Rodriguez, 555 East 10th Avenue, Suite I01, Denver, CO 80203.
Signature of the registered agent: /s/Raul N. Rodriguez
Raul N. Rodriguez
SEVENTH: (a) The corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative, (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee, fiduciary
or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, fiduciary or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorney fees), judgments, fines, and amounts paid in
settlement actually and reasonably believed to be in the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, or conviction or
upon a pleas of nolo contenders or its equivalent shall not of itself create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in the best interests of the corporation and, with
respect to any criminal action or proceeding, had reasonable cause to believe
his conduct was unlawful.
(b) The corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, fiduciary or agent
of another corporation, partnership, joint venture, trust or other enterprise
3
<PAGE>
against expenses (including attorney fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in the best
interests of the corporation: but no indemnification shall be made in respect of
any claim, issue, or matter as to which such person has been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which such action or
suit was brought determines upon application that, despite the adjudication of
liability, but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnification for such expenses which such court
deems proper.
(c) To the extent that a director, officer, employee,
fiduciary or agent of a corporation has been successful on the merits in defense
of any action, suit, or proceeding referred to in (a) or (b) of this Article VII
or in defense of any claim, issue, or matter therein, he shall be indemnified
against expenses (including attorney fees) actually and reasonably incurred by
him in connection therewith.
(d) Any indemnification under (a) or (b) of this Article VII
(unless ordered by a court) and as distinguished from (c) of this Article shall
be made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee, fiduciary
or agent is proper in the circumstances because he has meet the applicable
standard of conduct set forth in (a) or (b)) above. Such determination shall be
made by the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit, or proceeding, or, if such
a quorum is not obtainable, or, even if obtainable if a quorum of disinterested
directors so directs.
(e) Expenses (including attorney's fees) incurred in
defending a civil or criminal action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding as authorized in Section (d) of this Article, upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to repay
Such amount, unless it shall ultimately be determined that he is
4
<PAGE>
entitled to be indemnified by the corporation as authorized in this Article.
(f) The board of directors may exercise the corporation's
power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under this Article.
(g) The indemnification provided by this Article shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under these Articles of Incorporation, the Bylaws, agreements, vote
of the shareholders or disinterested directors, or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs and
personal representatives of such a person.
EIGHTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the corporation and the same are
in furtherance of and not in limitation of the powers, conferred by law:
No contract or other transaction between this corporation and one or
more of its directors, officers, or stockholders or between this corporation and
any other corporation, firm or association in which one or more of its officers,
directors, or stockholders are officers, directors or stockholders shall be
either void or voidable (1) if at a meeting of' the board of directors or
committee authorizing or ratifying the contract of transaction there is a quorum
of persons not so interested in the contract or other transaction is approved by
a majority of such quorum or (2) if the contract or other transaction is
ratified at an annual or special meeting of stockholders, or (3) if the contract
or other transaction is just and reasonable to the corporation of the time it is
made, authorized or ratified.
5
<PAGE>
NINTH: The name and address of the incorporator is:
Raul N. Rodriguez
555 East 10th Avenue, Suite 101
Denver, CO 80203
DATED THIS: 10th DAY OF July, 1997.
/s/ Raul N. Rodriguez
Raul N. Rodriguez
Incorporator and Registered Agent
6
Mail to: Secretary of State For office use only 002
Corporations Section RECEIVED
1560 Broadway, Suite 200 1998 FEB 10 PM 4:00
Denver, CO 80202 SECRETARY OF STATE
(303) 894-2251 STATE OF COLORADO
MUST BE TYPED Fax (303) 894-2242
FILING FEE: $25.00
MUST SUBMIT TWO COPIES
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Please include a typed
self-addressed envelope
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is Masadi Resources, Inc.
SECOND: The following amendment to the Articles of Incorporation was adopted
December 1, 1997, as prescribed by the Colorado Business Corporation Act, in the
manner marked with an X below:
No shares have been issued or Directors Elected - Action by lncorporators
No shares have been issued but Directors Elected - Action by Directors
X Such amendment was adopted by the board of directors where shares have been
issued and shareholder action was not required.
Such amendment was adopted by a vote of the shareholders. The number of
shares voted for the amendment was sufficient for approval.
Resolved, that the Board of Directors agreed to change the name
of the Corporation from Masadi Resources, Inc. to International
Beverage Corporation to better reflect the business of the Company.
Third: The manner, if not set forth in such amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the amendment
shall be effected, is as follows:
If these amendments are to have a delayed effective date, please list that date:
(Not to exceed ninety (90) days from the date of filing)
Masadi Resources, Inc
By /s/Michael Abboud
Director and President
Title
FILING DOCUMENTS, NAMES, TRADEMARKS & REPORTS
Transfer of reserved corporate name, limited liability company name, or
limited partnership name (official form).
Mail to: Secretary of State For office use only
Corporations Section RECEIVED
1560 Broadway, Suite 200 1998 FEB 10 PM 3:59
Please include a typed Denver, CO 80202 SECRETARY OF STATE
self-addressed envelope (303) 894-2251 STATE OF COLORADO
Fax (303) 894-2242
MUST BE TYPED
FILING FEE: $10.00
MUST SUBMIT TWO COPIES
NOTICE OF TRANSFER OF RESERVED CORPORATE NAME
LIMITED LIABILITY COMPANY NAME OR LIMITED PARTNERSHIP NAME
OF
International Beverage Corporation
Pursuant to the provisions of the Colorado Business Corporation Act, Colorado
Limited Liability Company Act of the Colorado Limited Partnership Act of 1981,
you are hereby notified that the undersigned has transferred to
Masadi Resources, Inc.
whose address is 555 E. 10th Ave., Suite 101 Denver, CO 80203
the name of International Beverage Corporation
which was reserved in your office for the exclusive use of the undersigned on
November 19, 1997 for a period of one hundred twenty days thereafter.
Raul N. Rodriguez
Typed Name
555 E. 10th Ave.
Typed Address
Denver, CO 80203
By: /s/Raul N. Rodriguez
Signature
to:
Title
Mail to: Secretary of State For office use only 002
Corporations Section
1560 Broadway, Suite 200
Denver, CO 80202
(303) 894-2251
MUST BE TYPED Fax (303) 894-2242
FILING FEE: $25.00
MUST SUBMIT TWO COPIES
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Please include a typed
self-addressed envelope
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is International Beverage Corporation
SECOND: The following amendment to the Articles of Incorporation was adopted
August 27, 1998, as prescribed by the Colorado Business Corporation Act, in the
manner marked with an X below:
No shares have been issued or Directors Elected - Action by lncorporators
No shares have been issued but Directors Elected - Action by Directors
X Such amendment was adopted by the board of directors where shares have been
issued and shareholder action was not required.
Such amendment was adopted by a vote of the shareholders. The number of
shares voted for the amendment was sufficient for approval.
THIRD: If changing corporate name, the new name of the corporation is
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
FOURTH: The manner, if not set forth in such amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the amendment
shall be effected, is as follows:
If these amendments are to have a delayed effective date, please list that date:
(Not to exceed ninety (90) days from the date of filing)
Signature /s/Michael Abboud
Title Director
Revised 7/95
BYLAWS
OF
MASADI RESOURCES, INC.
ARTICLE I
Offices
1. Business Offices. The principal office of the Corporation shall be
located at 555 E. 10th Avenue, Suite 101, Denver, Colorado 80203, and the
Corporation may have one or more offices at such place or places within or
without the U. S. continent as the Board of Directors may from time to time
determine or as the business of the Corporation may require.
2. Registered Office. The registered office of the Corporation shall be
as forth in the Articles of Incorporation, unless changed as provided by the
Colorado Corporation Code.
ARTICLE II
Stockholders' Meetings
1. Annual Meetings. The annual meetings of stockholders for the election
of directors to succeed those whose terms expire and for the transaction of such
other business as may come before the meeting shall be held within six (6)
months after the close of the fiscal year of the Corporation, for the purposes
of electing directors, and transacting such other business as may properly come
before the meeting.
2. Special Meetings. Special meetings of stockholders for any purpose or
purposes, unless otherwise prescribed by statute or by the Articles of
Incorporation, may be called at any time by the President or by the Board of
Directors and shall be called by the President or Secretary upon the request
(which shall state the purpose or purposes therefor) of a majority of the Board
of Directors or of the holders of not less than ten per cent (10%) of the number
of shares of outstanding stock of the Corporation entitled to vote at the
meeting. Business transacted at any special meeting of stockholders shall be
limited to the purpose or purposes stated in the notice.
3. Place of Meetings. Meetings of stockholders shall be held at such place
or places as may be designated from time to time by the Board of Directors.
4. Notice of Meetings. Except as otherwise provided by statute, notice of
each meeting of stockholders, whether annual or special, shall
<PAGE>
be given not less than ten (10) nor more than sixty (60) days prior thereto to
each shareholder entitled to vote there at by delivering written or printed
notice thereof to such shareholder personally or by depositing the same in the
United States mail, postage prepaid, directed to the shareholder at his address
as it appears on the stock transfer books of the Corporation; provided, however,
that if the authorized shares of the Corporation are proposed to be increased,
at least thirty (30) days notice in like manner shall be given. The notice of
all meetings shall state the place, day and hour thereof. The notice of a
special meeting shall, in addition, state the purposes thereof.
(a) Notice of any meeting need not be given to any person who may become
a stockholder of record after the mailing of such notice and prior to the
meeting, or to any stockholder who attends such meeting, in person or by proxy,
or signed waiver of notice either before or after such meeting. Notice of any
adjourned meeting of stockholders need not be given, unless otherwise required
by statute.
5. Voting List. At least ten (10) days before every meeting of
stockholders, a complete list of the shareholders entitled to vote there at or
any adjournment thereof, arranged in alphabetical order, showing the address of
each shareholder and the number of shares registered in the name of each, shall
be prepared by the officer or agent of the Corporation who has charge of the
stock transfer books of the Corporation. Such list shall be open at the
principal office of the Corporation to the inspection of any shareholder during
usual business hours for a period of at least ten (10) days prior to such
meeting. Such list shall also be produced and kept at the time and place of the
meeting during the whole time thereof and subject to the inspection of any
shareholder who may be present.
6. Organization. The President or Vice President shall call meetings of
stockholders to order and act as chairman of such meetings. In the absence of
said officers, any shareholder entitled to vote thereat, or any proxy of any
such shareholder, may call the meetings to order and a chairman shall be elected
by a majority of the stockholders entitled to vote thereat. In the absence of
the Secretary and Assistant Secretary of the Corporation, any person appointed
by the chairman shall act as secretary of such meetings.
7. Agenda and Procedure. The Board of Directors shall have the
responsibility of establishing an agenda for each meeting of stockholders,
subject to the rights of stockholders to raise matters for consideration which
may otherwise properly be brought before the meeting although not included
within the agenda. The chairman shall be charged with the orderly conduct of
all meetings of stockholders; provided, however, that in the event of any
difference in opinion with respect to the proper course of action which cannot
be resolved by reference to statute, the Articles of Incorporation or these
Bylaws, Robert's Rule of Order (as last revised) shall govern the disposition of
the matter.
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<PAGE>
8. Quorum. (a) Except as otherwise provided herein, or by statute, or in
the Certificate of Incorporation (such certificate and any amendments thereof
being hereinafter collectively referred to as the "Certificate of
Incorporation"), at all meetings of stockholders of the Corporation, the
presence at the meetings of stockholders of the Corporation, presence at the
commencement of such meetings in person or by proxy of stockholders holding of
record a majority of the total number of shares of the Corporation then issued
and outstanding and entitled to vote, shall be necessary and sufficient to
constitute a quorum for the transaction of any business. The withdrawal of any
stockholder after the commencement of a meeting shall have no effect on the
existence of a quorum, after a quorum has been established at such meeting.
(b) Despite the absence of a quorum at any annual or special
meeting of stockholders, the stockholders, by a majority of the votes cast by
the holders of shares entitled to vote thereat, may adjourn the meeting.
9. Adjournment. When a meeting is for any reason adjourned to another time
or place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken.
At the adjourned meeting any business may be transacted which might have been
transacted at the original meeting.
10. Voting. (a) Each shareholder shall at every meeting of stockholders,
or with respect to corporate action which may be taken without a meeting, be
entitled to one vote for each share of stock having voting power held of record
by such shareholder on the record date designated therefor pursuant to section
3 of Article XI of these Bylaws (or the record date established pursuant to
statute in the absence of such designation); provided that the cumulative system
of voting for the election of directors or for any other purpose shall not be
allowed.
(b) Each shareholder so entitled to vote at a meeting of
stockholders, or to express consent or dissent to corporate action in writing
without a meeting, may vote or express such consent or dissent in person or may
authorize another person or persons to vote or act for him by proxy executed in
writing by such shareholder (or by his duly authorized attorney in fact) and
delivered to the secretary of the meeting (or if there is no meeting to the
Secretary of the Corporation); provided that no such proxy shall be voted or
acted upon after eleven (11) months from the date of its execution, unless such
proxy expressly provides for a longer period.
(c) When a quorum is present at any meeting of stockholders,
the vote of the holders of a majority of the shares of stock having voting power
present in person or represented by proxy shall
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decide any question brought before such meeting, unless the question is one upon
which by express provision of a statute, or the Articles of Incorporation, or
these Bylaws, a different vote is required, in which case such express provision
shall govern and control the decision on such question.
11. Inspectors. The chairman of the meeting may at any time appoint one
(1) inspector to serve at a meeting of the stockholders. Such inspectors shall
decide upon the qualifications of voters, including the validity of proxies,
accept and count the votes for and against the questions presented, report the
results of such votes, and subscribe and deliver to the secretary of the meeting
a certificate stating the number of shares of stock issued and outstanding and
entitled to vote thereon and the number of shares voted for and against the
questions presented. The inspectors need not be stockholders of the
Corporation, and any director or officer of the Corporation may be an inspector
on any question other than a vote for or against his election to any position
with the Corporation or on any other question in which he may be directly
interested.
ARTICLE III
Board of Directors
1. Election and Tenure. The business and affairs of the Corporation shall
be managed by a Board of Directors who shall be elected at the annual meetings
of stockholders by plurality vote. Each director shall be elected to serve and
to hold office until the next succeeding annual meeting and until his successor
shall be elected and shall qualify, or until his earlier death, resignation or
removal.
2. Number and Qualification. The Board of Directors shall consist of not
less than two nor more than nine members, unless and until otherwise determined
by vote of a majority of the entire Board of Directors. The number of Directors
shall not be less than two (2), unless all of the outstanding shares of stock
are owned beneficially and of record by less than two (2) stockholders, in which
event the number of directors shall not be less than the number of stockholders
or the minimum permitted by statute.
3. Organization Meetings. As soon as practicable after each annual
election of directors, the Board of Directors shall meet for the purpose of
organization, selection of a Chairman of the Board, election of officers and the
transaction of any other business.
4. Regular Meetings. Regular meetings of the Board of Directors shall be
held at such time or times as may be determined by the Board of Directors and
specified in the notice of such meeting.
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5. Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman of the Board or the President and shall be called by the
President or Secretary on the written request of any two (2) directors.
6. Place of Meetings. Any meeting of the Board of Directors may be held at
such place or places as shall from time to time be determined by the Board of
Directors or fixed by the Chairman of the Board and as shall be designated in
the notice of the meeting.
7. Notice of Meetings. Notice of each meeting of directors, whether
organizational, regular or special, shall be given to each director. If such
notice is given either (a) by delivering written or printed notice to a director
personally or (b) by telephone personally to such director, it shall be so given
at least two (2) days prior to the meeting. If such notice is given either (a)
by depositing a written or printed notice in the United States mail, postage
prepaid, or (b) by transmitting a cable or telegram or facsimile in all cases
directed to such director at his residence or place of business, it shall be so
given at least four (4) days prior to the meeting. The notice of all meetings
shall state the place, date and hour thereof, but need not, unless otherwise
required by statute, state the purpose or purposes thereof.
8. Election. Except as may otherwise be provided herein or in the
Certificate of Incorporation by way of cumulative voting rights the members of
the Board of Directors of the Corporation, who need not be stockholders, shall
be elected by a majority of the votes cast at a meeting of stockholders, by the
holders of shares of stock present in person or by proxy, entitled to vote in
the election.
9. Quorum. A majority of the number of directors fixed by paragraph 2 of
this Article III shall constitute a quorum at all meetings of the Board of
Directors, and the vote of a majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors. In the
absence of a quorum at any such meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice, other than
announcement at the meeting, until a quorum shall be present.
10. Organization, Agenda and Procedure. The Chairman of the Board or in
his absence any director chosen by a majority of the directors present shall act
as chairman of the meetings of the Board of Directors. In the absence of the
Secretary and Assistant Secretary, any person appointed by the chairman shall
act as secretary of such meetings. The agenda of and procedure for such
meetings shall be as determined by the Board of Directors.
11. Resignation. Any director of the Corporation may resign at any time by
giving written notice of his resignation to the Board of Directors,
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to the Chairman of the Board, the President, any Vice President or the Secretary
of the Corporation. Such resignation shall take effect at the date of receipt
of such notice or at any later time specified therein and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
12. Removal. Except as otherwise provided in the Articles of Incorporation
or in these Bylaws, any director may be removed, either with or without cause,
at any time, by the affirmative vote of the holders of a majority of the issued
and outstanding shares of stock entitled to vote for the election of directors
of the Corporation given at a special meeting of the stockholders called and
held for such purpose. The vacancy in the Board of Directors caused by any such
removal may be filled by such stockholders at such meeting or, if the
stockholders at such meeting shall fail to fill such vacancy, by the Board of
Directors as provided in paragraph 12 of this Article III.
13. Vacancies. Except as provided in paragraph 11 of this Article III, any
vacancy occurring for any reason in the Board of Directors may be filled by the
affirmative vote of a majority of the directors then in office, though less than
a quorum of the Board of Directors. Any directorship to be filled by the
affirmative vote of a majority of the directors then in office or by an election
at an annual meeting or at a special meeting of stockholders called for that
purpose. A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office and shall hold office until the
expiration of such term and until his successor shall be elected and shall
qualify or until his earlier death, resignation or removal. A director chosen
to fill a position resulting from an increase in the number of directors shall
hold office until the next annual meeting of stockholders and until his
successor shall be elected and shall qualify, or until his earlier death,
resignation or removal.
14. Executive Committee. The Board of Directors, by resolution adopted by
a majority of the number of directors fixed by paragraph 2 of this Article III,
may designate two (2) or more directors to constitute an executive committee,
which committee, to the extent provided in such resolution, shall have and may
Corporation.
15. Compensation of Directors. Each director may be allowed such amount
per annum or such fixed sum for attendance at each meeting of the Board of
Directors or any meeting of an executive committee, or both, as may be from time
to time fixed by resolution of the Board of Directors, together with
reimbursement for the reasonable and necessary expenses incurred by such
director in connection with the performance of his duties. Nothing herein
contained shall be construed to preclude any other capacity and receiving proper
compensation therefor.
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16. Duties and Powers. The Board of Directors shall be responsible for the
control and management of the affairs, property and interests of the Corporation
and may exercise all powers of the Corporation, except as are in the Certificate
of Incorporation or by statute expressly conferred upon or reserved to the
stockholders.
ARTICLE IV
Waiver of Notice and Action by Consent
1. Waiver of Notice. Whenever any notice whatever is required to be given
under the provisions of a statute or of the Articles of Incorporation, or by
these Bylaws, a waiver thereof either in writing signed by the person entitled
to said notice (or such person's agent or attorney in fact thereunto authorized)
or by telegraph, cable, facsimile or any other available method, whether before,
at or after the time stated therein, or the appearance of such person or persons
at such meeting in person or by proxy (except for the sole purpose of
challenging the propriety of the meeting), shall be deemed equivalent to such
notice.
2. Action Without a Meeting. Any action required or which may be taken at
a meeting of the directors, stockholders or members of any executive committee
of the Corporation, may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all of the directors,
stockholders, or members of the executive committee, as the case may be,
entitled to vote with respect to the subject matter thereof.
ARTICLE V
Officers
1. Election and Tenure. The Board of Directors annually shall elect a
President, a Secretary, and a Treasurer. The Board of Directors may also elect
or appoint such Vice Presidents, other officers and assistant officers as may be
determined by the Board of Directors. The Board of Directors may delegate to
any such officer the power to appoint or remove subordinate officers, agents, or
employees. Any two or more offices may be held by the same person, except the
offices of President and Secretary. Each officer so elected or appointed shall
continue in office until his successor shall be elected or appointed and shall
qualify, or until his successor shall be elected or appointed and shall qualify,
or until his earlier death, resignation or removal.
2. Resignation, Removal and Vacancies. Any officer may resign at any time
by giving written notice thereof to the Board of Directors or to the President.
Such resignation shall take effect on the date specified therein and no
acceptance of the same shall be necessary to render the same effective. Any
officer may at any time be removed the by the the
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affirmative vote of a majority of the number of directors specified in section 2
of Article III of these Bylaws, or by an executive committee thereunto duly
authorized. If any office becomes vacant for any reason, the vacancy may be
filled by the Board of Directors. An Officer appointed to fill a vacancy shall
be appointed for the unexpired term of his predecessor in office and shall
continue in office until his successor shall be elected or appointed and shall
qualify, or until his earlier death, resignation or removal.
3. President. The President shall be the chief executive officer of the
Corporation. He shall preside at all meetings of the stockholders and shall
have general and active management of the business of the Corporation. He shall
see that all orders and resolutions of the Board of Directors are carried into
effect and in general shall perform all duties as may from time to time be
assigned to him by the Board of Directors.
4. Vice President. The Vice President shall perform such duties and
possess such powers as from time to time may be assigned to them by the Board of
Directors or by the President. In the absence of the President or in the event
of his inability or refusal to act, the vice president (or in the event there be
more than one vice president, the vice presidents in the order designated, or
in the absence of any designation, then in the order of their election or
appointment) shall perform the duties of the President and when so performing
shall have all the powers of and be subject to all the restrictions upon the
President.
5. Secretary. The Secretary shall perform such duties and shall have such
powers as may from time to time be assigned to him by the Board of Directors or
the President. In addition, the Secretary shall perform such duties and have
such powers as are incident to the office of Secretary, including without
limitation the duty and power to give notice of all meetings of stockholders and
the Board of Directors, to attend such meetings and keep a record of the
proceedings, and to be custodian of corporate records and the corporate seal and
to affix and attest to the same on documents, the execution of which on behalf
of the Corporation is authorized by these Bylaws or by the action of the Board
of Directors.
6. Treasurer. The Treasurer shall perform such duties and shall have such
powers as may from time to time be assigned to him by the Board of Directors or
the President. In addition, the Treasurer shall perform such duties and have
such powers as are incident to the office of Treasurer, including without
limitation the duty and power to keep and be responsible for all funds and
securities of the Corporation, to deposit funds of the Corporation in
depositories selected in accordance with these Bylaws, disburse such funds as
ordered by the Board of Directors, making proper accounts thereof, and shall
render as required by the Board of Directors statements of all such transactions
as Treasurer and of the financial condition of the Corporation.
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7. Assistant Secretaries. The Assistant Secretaries shall perform such
duties and possess such powers as from time to time shall be assigned to them by
the Board of Directors , the President or the Secretary. In the absence,
inability or refusal to act of the Secretary, the Assistant Secretaries in the
order determined by the Board of Directors shall perform the duties and exercise
the powers of the Secretary.
8. Assistant Treasurers. The Assistant Treasurers shall perform such
duties and possess such powers as from time to time shall be assigned to them by
the Board of Directors, the President, or the Treasurer. In the absence,
inability or refusal to act of the Treasurer, the Assistant Treasurers in the
order determined by the Board of Directors shall perform the duties and exercise
the powers of the Treasurer.
9. Bond of Officers. The Board of Directors may require any officer to
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for such terms and conditions as
the Board of Directors may specify, including without limitation for the
faithful performance of his duties and for the restoration to the Corporation of
all property in his possession or under his belonging to the Corporation.
10. Salaries. Officers of the Corporation shall be entitled to such
salaries, emoluments, compensation or reimbursement as shall be fixed or allowed
from time to time by the Board of Directors.
ARTICLE VI
Indemnification
1. Third party actions. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of the
Corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another Corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, by him in connection with such action,
suit or proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not of itself create a presumption that the
person did not act in good faith and in a manner which he
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reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
2. Derivative Actions. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
Corporation, partnership, joint venture, trust, or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation, except that no indemnification shall be made
in respect of any claim, issue, or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Corporation unless and only to the extent that the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability and in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
3. Extent of Indemnification. To the extent that a director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in sections
1 and 2 of this Article VI, or in defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith.
4. Determination. Any indemnification under sections 1 and 2 of this
Article VI (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
officer, director and employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in sections 1 and 2 of
this Article VI. Such determination shall be made (a) by the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties to
such action, suitor proceeding, or (b) if such a quorum is not obtainable, or,
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (c) by the affirmative vote
of the holders of a majority of the shares of stock entitled to vote and
represented at a meeting called for such purpose.
5. Payment in Advance. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the Corporation in
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advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Directors as provided in Section 4 of this Article VI
upon receipt of an undertaking by or on behalf of the director, officer,
employee or agent to repay such amount unless it shall ultimately be determined
that he is entitled to be indemnified by the Corporation as authorized in this
Article VI.
6. Insurance. The Board of Directors may exercise the Corporation's power
to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another Corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability hereunder or
otherwise.
7. Other Coverage. The indemnification provided by this Article VI shall
not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under the Articles of Incorporation, these
Bylaws, agreement, vote of stockholders or disinterested directors, the Colorado
Corporation Code, or otherwise, both as to action in his official capacity and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs and personal representatives of such a
person.
ARTICLE VII
Execution of Instruments; Loans; Checks and Endorsements; Deposits; Proxies
1. Execution of Instruments. The President or any Vice President shall
have power to execute and deliver on behalf and in the name of the Corporation
any instrument requiring the signature of an officer of the Corporation, except
as otherwise provided in these Bylaws or where the execution and delivery
thereof shall be expressly delegated by the Board of Directors to some other
officer or agent of the Corporation. Unless authorized so to do by these Bylaws
or by the Board of Directors, no officer, agent or employee shall have any power
or authority to bind the Corporation in any way, to pledge its credit or to
render it liable pecuniarily for any purpose or in any amount.
2. Loans. No loan shall be contracted on behalf of the Corporation, and no
evidence of indebtedness shall be issued, endorsed or accepted in its name,
unless authorized by the Board of Directors or a standing committee designated
by the Board of Directors so to act. Such authority may be general or confined
to specific instances. When so authorized, the officer or officers thereunto
authorized may effect loans
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at any time for the Corporation from any bank or other entity and for such loans
may execute and deliver promissory notes or other evidences of indebtedness of
the Corporation, and when authorized as aforesaid, as security for the payment
of any and all loans (and any obligations incident thereto) of the Corporation,
may mortgage, pledge, or otherwise encumber any real or personal property, or
any interest therein, at any time owned or held by the Corporation, and to that
end may execute and deliver such instruments as may be necessary or proper in
the premises.
3. Checks and Endorsements. All checks, drafts or other orders for the
payment of money, obligations, notes or other evidences of indebtedness, bills
of lading, warehouse receipts, trade acceptances, and other such instruments
shall be signed or endorsed by such officers or agents of the Corporation as
shall from time to time be determined by resolution of the Board of Directors,
which resolution may provide for the use of facsimile signatures.
4. Deposits. All funds of the Corporation not otherwise employed shall be
deposited from time to time to the Corporation's credit in such banks or other
depositories as shall from time to time be determined by resolution of the Board
of Directors, which resolution may specify the officers or agents of the
Corporation who shall have the power, and the manner in which such power shall
be exercised, to make such deposits and to endorse, assign and deliver for
collection and deposit checks, drafts and other orders for the payment of money
payable to the Corporation or its order.
5. Proxies. Unless otherwise provided by resolution adopted by the Board
of Directors, the President or any Vice President may from time to time appoint
one or more agents or attorneys in fact of the Corporation, in the name and on
behalf of the Corporation, to cast the votes which the Corporation may be
entitled to cast as the holder of stock or other securities in any other
Corporation, association or other entity any of whose stock or other securities
may be held by the Corporation, at meetings of the holders of the stock or other
securities of such other Corporation, association or other entity, or to consent
in writing, in the name of the Corporation as such holder, to any action by such
other Corporation, association or other entity, and may instruct the person or
persons so appointed as to the manner of casting such votes or giving such
consent, and may execute or cause to be executed in the name and on behalf of
the Corporation and under its corporate seal, or otherwise, all such written
proxies or other instruments as he may deem necessary or proper in the premises.
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ARTICLE VIII
Shares of Stock
1. Certificates of Stock. Every holder of stock of the Corporation shall
be entitled to have a certificate certifying the number of shares owned by him
in the Corporation and designating the class of stock to which such shares
belong, which shall otherwise be in such form as is required by law and as the
Board of Directors shall prescribe. Each such certificate shall be signed by
the President or a Vice President and the Treasurer or any Assistant Treasurer
or the Secretary or any Assistant Secretary of the Corporation; provided,
however, that where such certificate is signed or countersigned by a transfer
agent or registrar (other than the Corporation or any employee of the
Corporation) the signatures of such officers of the Corporation may be in
facsimile form. In case any officer of the Corporation who shall have signed,
or whose facsimile signature shall have been placed on, any certificate shall
cease for any reason to be such officer before such certificate shall have been
issued or delivered by the Corporation, such certificate may nevertheless be
issued and delivered by the Corporation as though the person who signed such
certificate, or whose facsimile signature shall have been placed thereon, had
not ceased to be such officer of the Corporation.
2. Record. A record shall be kept of the name of each person or other
entity holding the stock represented by each certificate for shares of the
Corporation issued, the number of shares represented by each such certificate,
and the date thereof, and, in the case of cancellation, the date of
cancellation. The person or other entity in whose name shares of stock stand on
the books of the Corporation shall be deemed the owner thereof, and thus a
holder of record of such shares of stock. For all purposes as regards the
Corporation.
3. Transfer of Stock. Transfers of shares of the stock of the Corporation
shall be made only on the books of the Corporation by the registered holder
thereof, or by his attorney thereunto authorized, and on the surrender of the
certificate or certificates for such shares properly endorsed.
4. Transfer Agents and Registrars; Regulations. The Board of Directors may
appoint one or more transfer agents or registrars with respect to shares of
stock of the Corporation. The Board of Directors may make rules and regulations
as it may deem expedient, not inconsistent with these Bylaws, concerning the
issue, transfer and registration of certificates for shares of the stock of the
Corporation.
5. Lost, Destroyed or Mutilated Certificates. The holder of any
certificate representing shares of stock of the Corporation shall immediately
notify the Corporation of any loss or destruction of the certificate
representing the same. The Corporation may issue a new certificate
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in the place of any certificate previously issued by it, alleged to have been
lost or destroyed. On production of such evidence of loss or destruction as the
Board of Directors in its discretion may require, the owner of the lost or
destroyed certificate, or his legal representatives, to give the Corporation a
bond in such sum as the Board may direct, and with such surety or sureties as
may be satisfactory to the Board to indemnify the Corporation against any
claims, loss, liability or damage it may suffer on account of the issuance of
the new certificate. A new certificate may be issued without requiring any such
evidence or bond when, in the judgment of the Board of Directors, it is proper
to do so.
ARTICLE IX
Corporate Seal
1. Corporate Seal. The corporate seal shall be in such form, as shall be
approved by resolution of the Board of Directors. Said seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced. The impression of the seal may be made and attested by
either the Secretary or an Assistant Secretary for the authentication of
contracts or other papers requiring the seal.
ARTICLE X
Fiscal Year
1. Fiscal Year. The fiscal year of the Corporation shall be such year as
shall be established by the Board of Directors.
ARTICLE XI
Corporate Books and Records
1. Corporate Books. The books and records of the Corporation may be kept
within or without the State of Colorado at such place or places as may be from
time to time designated by the Board of Directors.
2. Addresses of Stockholders. Each shareholder shall furnish to the
Secretary of the Corporation or the Corporation's transfer agent an address to
which notices from the Corporation, including notices of meetings, may be
directed and if any shareholder shall fail so to designate such an address, it
shall be sufficient for any such notice to be directed to such shareholder at
his address last known to the Secretary or transfer agent.
3. Record Date. In lieu of closing the stock ledger of the Corporation,
the Board of Directors may fix, in advance, a date not exceeding sixty (60)
days, nor less then ten (10) days, as the record date for the determination of
stockholders entitled to receive notice of, or to
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vote at, any meeting of stockholders, or to consent to any proposal without a
meeting, or for the purposes of determining stockholders entitled to receive
payment of any dividends or allotment of any rights, or for the purpose of any
other action. If no record date is fixed, the record date for the determination
of stockholders entitled to notice of or to vote at a meeting of stockholders
shall be at the close of business on the day next preceding the day on which
notice is given, or, if no notice is given, the day preceding the day on which
the meeting is held; the record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the resolution of
the directors relating thereto is adopted. When a determination of stockholders
of record entitled to notice of or to vote at any meeting of stockholders has
been made as provided for herein, such determination shall apply to any
adjournment thereof, unless the directors fix a new record date for the
adjourned meeting.
4. Audits of Books and Accounts. The corporation's books and accounts
shall be audited at such times and by such auditors as shall be specified and
designated by resolution of the Board of Directors.
ARTICLE XII
Emergency Bylaws
1. Emergency Bylaws. The Board of Directors may adopt emergency Bylaws in
accordance with and pursuant to the provisions therefor from time to time set
forth in the Colorado Corporation code.
ARTICLE XIII
Amendments
1. Amendments. All Bylaws of the Corporation shall be subject to
alteration, amendment or repeal, and new bylaws may be added, by the affirmative
vote of a majority of a quorum of the members of the Board of Directors at any
regular or special meeting.
The undersigned directors have adopted the foregoing Bylaws as the initial
Bylaws of Global Entertainment Holdings/Equities, Inc.
15
Form of stock certificate
NOT VALID UNLESS COUNTERSIGNED BY TRANSFER AGENT
INCORPORATED UNDER THE LAWS OF THE STATE OF COLORADO
Number Shares
Global
Entertainment
Holdings/Equities, Inc.
AUTHORIZED COMMON STOCK: 100,000,000-PAR VALUE: $0.001
THIS CERTIFIES THAT:_____________________________
IS THE RECORD HOLDER OF:_________________________
-Shares of Global Entertainment Holdings/Equities, Inc. Common Stock-
transferable on the books of the Corporation in person or by duly
authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the
Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated:
NO SALE, OFFER TO SELL Countersigned Registered:
OR TRANSFER OF THE SHARES NATIONAL STOCK TRANSFER, INC.
REPRESENTED BY THIS CERFICATE 3098 SOUTH HIGHLAND DRIVE #485
SHALL BE MADE UNLESS A SALT LAKE CITY, UTAH 84106
REGISTRATION STATEMENT UNDEDR
THE FEDERAL SECURITIES (SEAL)
ACT OF 1933, AS AMENDED WITH
RESPECT TO SUCH SHARES IS
THEN IN EFFECT OR AN EXEMPTION
FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT IS THEN
IN FACT APPLICABLE TO By: /s/KG
SUCH SHARES Authorized Signature
____________________________ ______________________
Secretary President
PROMISSORY NOTE
U.S.: 20,000.00 Signed at: 6235 S. 90th Street, Omaha, NE
FOR VALUE RECIEVED. the undersigned INTERACTIVE GAMING & WAGERING ("Borrower")
promise(s) to pay unto STEVEN M. ABBOUD ("Noteholder"), on order, the principal
sum of Twenty Thousand Dollars ($20,000.00) with a flat 8% rate due on the
principal. Principal shall be payable by wire transfer to Noteholder, or such
other account as Noteholder may designate.
This Note is payable upon demand and may be prepaid in whole or in part at any
time without penalty.
In the event of default, Borrower shall be responsible for all costs of
collection, including, but not limited to, attorney fees.
Date: 12/31/98 /s/ Bryan P. Abboud
Borrower
Bryan P. Abboud, President
INTERACTIVE GAMING & WAGERING
Date: 12/31/98 /s/ Steven M. Abboud
Noteholder
STEVEN M. ABBOUD
PROMISSORY NOTE
U.S.: 20,000.00 Signed at: 6235 S. 90th Street, Omaha, NE
FOR VALUE RECIEVED. the undersigned INTERACTIVE GAMING & WAGERING ("Borrower")
promise(s) to pay unto BRYAN P. ABBOUD ("Noteholder"), on order, the principal
sum of Twenty Thousand Dollars ($20,000.00) with a flat 8% rate due on the
principal. Principal shall be payable by wire transfer to Noteholder, or such
other account as Noteholder may designate.
This Note is payable upon demand and may be prepaid in whole or in part at any
time without penalty.
In the event of default, Borrower shall be responsible for all costs of
collection, including, but not limited to, attorney fees.
Date: August 1, 1998 /s/ Bryan P. Abboud
Borrower
Bryan P. Abboud, President
INTERACTIVE GAMING & WAGERING
Date: August 1, 1998 /s/ Bryan P. Abboud
Noteholder
Bryan P. ABBOUD
PROMISSORY NOTE
U.S.: 75,000.00 Signed at: 6235 S. 90th Street, Omaha, NE
FOR VALUE RECIEVED. the undersigned INTERACTIVE GAMING & WAGERING ("Borrower")
promise(s) to pay unto JOANN ABBOUD ("Noteholder"), on order, the principal sum
of Seventy Five Thousand Dollars ($75,000.00) with a flat 8% rate due on the
principal. Principal shall be payable by wire transfer for credit to JOANN
ABBOUD, account #146404627961 US Bank, ABA#104000029, or such other account as
Noteholder may designate.
This Note is payable upon demand and may be prepaid in whole or in part at any
time without penalty.
In the event of default, Borrower shall be responsible for all costs of
collection, including, but not limited to, attorney fees.
Date: July 1, 1997 /s/Bryan P. Abboud
Borrower
Bryan P. Abboud, President
INTERACTIVE GAMING & WAGERING
Date: July 1, 1997
/s/Joann Abboud
Noteholder
JOANN ABBOUD
/Letterhead/
PROMISSORY NOTE
U.S.: $225,000 Signed at: 6235 s. 90th Street, Omaha, NE
FOR VALLUE RECEIVED, the undersigned, GLOBAL ENTERTAINMENT HOLDING/EQUITIES,
INC. (the "Borrower"), promise(s) to pay unto Joann Abboud ("Noteholder"), on
order, the principal sum of Two Hundred Twenty-Five Thousand Dollars and no
cents ($225,000.00) with a flat 10% rate due on the principal. Principal shall
be payable by wire transfer for credit to JOANN ABBOUD, account #146404627961,
US Bank, ABA#104000029, or such other account as Noteholder may designate. This
Note is to be paid 1st of each month in the amount of Eighteen Thousand Seven
Hundred Fifty dollars ($18,750) beginning August 1, 1999 in equal installments
until the final payment, which will include $22,500 in interest, totaling
$41,250 on August 1, 2000.
As incentive for this loan, Borrower will issue 2,000 shares of 144
stock at par value of $.001 per share from its authorized but unissued common
stock upon receipt of a payment in the amount of $2.00.
This Note may be prepaid in whole or in part at any time without
penalty.
In the event of default, Borrower shall be responsible for all costs of
collection, including, but not limited to, attorney fees.
Date: 6-21-99 /s/ Steven M. Abboud
Borrower
Steven M. Abboud, President/CEO
GLOBAL ENTERTAINMENT
HOLDINGS/EQUITIES, INC.
Date: 6-21-99 /s/ Steven M. Abboud
STEVEN M. ABBOUD (Personally)
Date: 6-21-99 /s/ Joann Abboud
Noteholder
JOANN ABBOUD
6235 South 90th Street Omaha, NE 68127 402-331-3189 Fax: 402-331-2899
LOAN AGREEMENT
With
STOCK OPTION "KICKER"
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT OR PERMIT RELATED THERETO OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS REQUIRED
UNDER THE SECURITIES ACT OF 1933.
This LOAN AGREEMENT, dated, this 21st day of July, 1998, is entered into by and
between Global Entertainment Holdings/Equities, Inc. ("GEHE"), a Colorado
corporation (the "Company"), and James Zilligan, the ("Subscriber" or "Lender").
WITNESSETH
A. WHEREAS, the Company desires to borrow money for operating capital to fund
expanded operations and various on going costs and expenses; and
B. WHEREAS, Subscriber/Lender desires to loan to the Company, and the Company
desires to borrow from Subscriber/Lender, the sum of One Hundred Thousand
and no cents ($100,000.00) upon and subject to the terms and conditions of
the Agreement, now therefore,
AGREEMENT
IN CONSIDERATION of the foregoing and the covenants and conditions set forth in
this Agreement, the parties agree as follows:
1. Term of Loan. Subscriber/Lender hereby agrees to loan to the Company, the
sum set forth above for a period of 24 months from the date of receipt of
funds by the Company from Subscriber/Lender, or until the Company shall
repay the loan and accrued interest, whichever shall come first. The
Company shall have the right to pre-pay the note at any time prior to the
due date without penalty and upon a Thirty (30) days notice to Subscriber/
Lender.
2. Interest Rate. The loan shall accrue simple interest at the rate of 10% per
annum; however, no payments of the principal and interest shall be made
during the first twelve (12) month period of the twenty-four (24) month
loan.
3. Repayment Terms of Loan. The first payment of accrued principal and
interest will begin on the 13th month and continue through the 23rd month;
this will constitute 50% of the loan repayment value with interest in equal
monthly installments. The balance will be paid on the 24th month by way of
a balloon payment.
4. Common Stock Option "Equity Kicker". In consideration and as an inducement
for the Subscriber/Lender in making the above-stated loan to the Company,
the Company shall cause to be issued to the Subscriber/Lender, a Stock
Option, pursuant to his option, as set forth herein;
(a) The number of shares of common stock in the option will be determined
by multiplying 15% by the loan amount as herein set forth. (A $100,000
loan will receive 15,000 shares as a "kicker".)
5. Terms of Option. At the option of the Subscriber/Lender, until the due date
of this loan, the Subscriber/Lender may, upon written notice to the Company,
elect to exercise the Option, into shares of the Company's common stock at
the strike price of $1.25 per share.
6. Loan Not Secured. The assets of the Company or its officers and directors
shall not secure this Promissory Note which Note is attached hereto as
Exhibit "A" and is incorporated herein by this reference.
7. Representations of Subscriber/Lender. Subscriber/Lender hereby represents,
warrants and agrees as follows:
(a) Subscriber/Lender is an accredited investor by, (i) having an
individual income of more than $200,000 per year in each of the most
recent two years and Subscriber/Lender reasonably expects to have an
income of at least $200,000 in the current year; OR (ii) Subscriber/
Lender and his or her spouse had joint income of more than $300,000 in
each of the two most recent years and they reasonably expect to have
such joint income in excess of $300,000 for the current year; OR (iii)
Subscriber/Lender has an individual net worth, or a combined net worth
with his (or her) spouse of at least $1,000,000 (for purposes of this
paragraph, "net worth" means the excess of total assets at fair market
value, including home an personal property, less total liabilities);
AND, (iv) Subscriber's individual net worth (or joint net worth with
his or her spouse) must exceed by at least ten (10) times the aggregate
value of this investment for which the Subscriber/Lender wishes to
subscribe.
(b) Subscriber/Lender is aware of the high degree of risk this Agreement
entails, and that the loan could be at risk in the event the business
of it's wholly owned subsidiary (Internet Gaming and Wagering, N.V.)
fails to meet it's financial projections, in which case the Company may
not be able to repay the loan on time or at all, and that the entire
loan amount might be lost, and further understands that the securities
underlying this Agreement ("Securities") are of a highly speculative
nature.
(c) Subscriber/Lender is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision about entering
into this Agreement.
(d) Subscriber/Lender understands that the Securities have not been
registered under the Securities Act of 1933 ("Securities Act") in
reliance upon a specific exemption therefrom which exemption depends
upon among other things, the bona fide nature of its investment,
intends as expressed herein. In this connection Subscriber/Lender
understands that in the view of the SEC, the statutory basis for such
exemptions may be unavailable if its representation was predicated
solely upon a present intention to hold the securities for a minimum
capital gain period specified under tax statuses for a deferred sale or
until an increase or decrease in the market price of the securities, or
for a period of one year, or any fixed period in the future.
(e) Subscriber/Lender is aware of the provisions of Rule 144, promulgated
under the Securities Act, which in substance, permits limited public
resale of "restricted securities" acquired, directly or indirectly,
from issuer thereof (or from an affiliate of such issuer), in a non-
public offering subject to the satisfaction of certain conditions,
including, among other things: the availability of certain public
information about the Company; the resale occurring not less than one
year after the party has purchased and paid for the securities to be
sold; the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934) and the
amount of securities being sold during any three month period not
exceeding the specified limitations stated therein.
(f) Subscriber/Lender further understands that at the time Subscriber/
Lender wishes to sell the Securities, there may be no public market
upon which to make such a sale, and even if such a public market
exists, the Company may not be able to satisfy the current public
information requirements of Rule 144, and that in such event,
Subscriber/Lender would be precluded from selling the Securities under
Rule 144, even if the one-year minimum holding period had been
satisfied.
(g) Subscriber/Lender further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other
registration exemption will be required, and that, notwithstanding the
fact that Rule 144 is not exclusive, the Staff of the SEC has expressed
its opinion that persons proposing to sell private placement securities
other than in a registered offering and otherwise than pursuant to Rule
144 will have a substantial burden of proof establishing that an
exemption from registration is available for such offers or sales, and
that such persons and their respective brokers who participate in such
transactions do so at their own risk.
8. Representations of the Corporation. The Company hereby represents and
warrant that:
(a) The Company is a corporation duly organized, existing and in good
standing under the laws of the State of Colorado, and has the corporate
power to carry on its present business.
(b) The Shares underlying this agreement have been duly authorized and upon
payment therefore in accordance with the terms hereof will be validly
issued and outstanding, fully paid and non-assessable, and free and
clear of liens, claims and encumbrances.
(c) The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock, of which no more than 3,300,000 shares are
currently issued and outstanding, or potentially committed to be
issued.
9. Company's Rights. The Board of Directors ("Board") of the Company shall
have sole control over any decision regarding any offering of the Company's
securities to the general public. If, at any time or from time to time, the
Company shall determine to register any of its common stock with the SEC,
and if the Board and Underwriter of such an offering determine that there
may be selling shareholders in such offering, Subscriber may join with other
selling shareholders on a pro-rata basis, as determined by the Board, in the
offering of all or a portion of Subscriber's shares. Subscriber/Lender
shall have no right to demand a registration of its securities, and shall
not have any right to join in a registration of the Company's securities of
either the Board or the Underwriter shall determine that there shall not be
selling shareholders in the registration.
10. Voting Rights. Subscriber/Lender shall have no voting rights in the shares
reserved under this Agreement until the Option is exercised and the shares
are issued.
11. Notice of Exercise. Subscriber/Lender shall notify the Company in writing
of its election to exercise the stock option at anytime prior to the due
date of the loan and upon Thirty (30) days notice.
11. Governing Law. This Agreement shall be governed by the laws of the State
of Nebraska.
12. Miscellaneous.
(a) Entire Agreement. This Agreement contains the entire agreement between
and among the parties and supersedes any prior written or oral
agreements between or among the parties concerning the subject matter
contained herein. There are no representations, agreements, or
understandings, oral or written, between or among the parties, relating
to the subject matter contained in this Agreement, which are not fully
expressed herein.
(b) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but such counterparts, when
taken together, shall constitute but one and the same agreement.
(c) Notice. Any notice, demand or other communication with respect to this
Agreement shall be in writing and shall be deemed delivered personally
to an authorized representative of either party, or if mailed, 48 hours
after deposit in the United States mail, postage prepaid, certified or
registered mail, return receipt requested, addressed to the party at
the address set forth below the signature hereto. Either party may
change the address to which notice shall be given by giving notice to
the other party.
If to the Company: Global Entertainment Holdings/Equities, Inc.
8949 J. St. Suite #5
Omaha, NE 68127
Tel: 402-331-3189
If to the Subscriber/Lender: James Zilligan
38 Shores Ave.
Naples, FL 34110
Tel: 941-592-5442
Fax: 941-592-1854
Email: [email protected]
In witness whereof the parties hereto have caused this Agreement to be executed
on the day and year indicated below.
Global Entertainment Holdings/Equities, Inc. James Zilligan (Subscriber/Lender)
/s/ Steven M Abboud /s/ James A. Zilligen
By ________________________ By __________________
Steven M Abboud James Zilligan
President
Date 7-21-98 Date 7-21-98
By /s/ Steven M. Abboud
Steven M. Abboud
Date 7-21-98
EXHIBIT "A"
PROMISSORY NOTE
$100,000.00 Dated July 21,1998
FOR VALLUE RECEIVED, the undersigned, Global Entertainment Holding/Equities,
Inc. (the "Company"), a Colorado Corporation, hereby promises to pay James A.
Zilligen, the principal sum of One Hundred Thousand Dollars and no cents
($100,000.00) plus 10% simple interest, within twenty-four months from the date
herein. The loan shall accrue interest for the first twelve (12) months;
however, no payments of the principal and interest will begin until the first
business day of the 13th month and continue through the 23fd month. This will
constitute 50% of the loan repayment value with interest in equal monthly
installments. The balance will be paid on the 24th month as a balloon payment.
Principal and interest shall be payable in lawful money of the United States at
such address as the Lender may specify by written notice or as indicated in the
Subscription/Lending Agreement.
The company may, at its discretion, prepay all or a portion of the principal and
accrued interest of this Note under the terms of the above mentioned Agreement.
This Note is construed under the laws of the State of Nebraska.
Global Entertainment Holding/Equities, Inc.
By: /s/Steven M. Abboud By: /s/Steven M. Abboud
Steven M. Abboud Steven M. Abboud
President Individually
James A. Zilligen By: /s/James A. Zilligen
James A. Zilligen
Lender
/s/Cryastal Secora 7/21/98
Witness Date
/s/Gene Abboud 7/21/98
Witness Date
90th St., LLC LEASE
This Lease is made and entered into this ___, day of JANUARY 1999,
between 90th St., LLC., a Nebraska Limited Liability Corporation (To be formed),
as Lessor and Global Entertainment Holdings/Equities, Inc. a Colorado
Corporation as Lessee.
1. Leased Premises: Lessor does hereby lease, demise and let unto the Lessee the
following described premises: 6235 So. 90th STREET, OMAHA, NE
2. Lease Term: The term of the lease shall commence on the 1st day of February,
and end on the 31st day of JANUARY, 2004, unless terminated as herein provided.
3. Statement: Lessee hereby agrees to provide to Lessor a financial statement of
principals whether Lessee is a sole proprietor, partnership, corporation,
company, etc., prior to the signing of said Lease by Lessor.
4. Acceptance and Occupancy. Occupancy of the Leased Premises by the Lessee
shall constitute acceptance by the Lessee.
5. Rental: Lessee shall and hereby agrees to pay the Lessor without demand,
deduction, or setoff, at such place or places as the Lessor may designate from
time to time in writing, rent in advance for said Leased Premises the sum of
Thirty Four Thousand Two Hundred dollars ($34,200.00), payable in monthly
installments as follows:
For the period from March 1, 1999 to February 28, 2000 $1300.00 per month.
For the period from March 1, 2000 to February 28, 2001 $1325.00 per month.
For the period from March l, 2001 to February 28, 2002 $1350.00 per month.
For the period from March 1, 2002 to February 28, 2003 $1375.00 per month.
For the period from March 1, 2003 to February 28, 2004 $1400.00 per month.
said rental to be payable monthly in advance, on the first day of each
successive month, at the office of Commercial Realty, INC., 5709 "F" STREET,
OMAHA, NEBRASKA 68117, or at such other place as the Lessor shall direct.
6. Security Deposit. Contemporaneously with the execution of this Lease, Lessee
shall deposit with Lessor the sum of Nine Hundred Fifty Dollars ($_0_) receipt
acknowledged as security for the performance by Lessee of each and every
obligation hereunder to be performed by Lessee. In the event of any default by
Lessee, Lessor may apply all or any part of such security deposit to cure the
default or to reimburse Lessor for any sum which Lessor may spend by reason of
such default. In the event of any such application or retention, Lessee shall,
on demand, pay to Lessor the sum so applied, or retained, which shall be added
to the security deposit, so that same shall be restored to its original amount.
If, at the end of this Lease term, Lessee shall not be in default of any
provision under this Lease, the security deposit, or any balance thereof, shall
be returned to the Lessee, without interest.
7. Late Charge: If the monthly rental is not received by Lessor on or before the
5th day of each month, Lessee agrees to pay Lessor a late charge in the amount
of five percent (5%) of the total amount outstanding.
8. Business Use: The Leased Premises shall be used and occupied only for ____
General Office Use _________________________________ and for no other purpose
without written consent of Lessor. Lessee agrees continuously and
uninterruptedly (except when prevented from doing so by reason of fire or other
casualty) to conduct its business in the Leased Premises during the lease term
and any extension thereof Lessee agrees promptly to comply with all laws,
ordinances, rules, and regulations affecting the Leased Premises and promulgated
by duly constituted governmental authorities affecting the cleanliness, safety,
use and occupation of the Leased Premises and any business thereon, and shall
pay all costs involved in such compliance.
9. Rules and Regulations: Lessee covenants and agrees with Lessor that it will
comply with all of the Rules and Regulations attached hereto as Exhibit "A".
10. Common Areas: Lessor agrees to provide at the building of which the Leased
Premises are a part, a parking area, which parking area shall be for the non-
exclusive use of the Lessor, all Lessees of the Building, and their respective
employees, agents, customers, and invitees.
For the purpose of this section and wherever else used in the Lease, the Common
Areas shall include, but shall not be limited to, parking areas, sidewalks or
other pedestrian walkways, landscaped areas, pick-up and delivery areas, streets
and other public areas, designed for the common use and benefit exclusive of
space in any building designated for rental to Lessees for commercial purposes,
as the same may exist from time to time.
INITIALS _____ _____
11. Use of Common Areas: Lessor hereby grants to Lessee, its employees, agents,
customers and invitees, the non-exclusive rights for and during the tem of this
Lease, and any renewal thereof, to use the common areas from time to time, such
use to be in common with Lessor and all Lessees of the Lessor.
12. Rules and Regulations, Supervision and Management: Lesser shall have the
right power and authority to establish and promulgate and therafter change or
modify all rules and regulations which it may in its sole discretion deem
necessary for the use of the Common Areas. All such Common Areas shall at all
times be subject to the exclusive control and management of Lessor so that the
Lessor will be in a position to make available efficient and convenient use
thereof. Lessee agrees to abide by and conform with all rules and regulations
pertaining to such Common Areas. Lessor shall have the right to construct,
maintain and operate lighting facilities, to police the Common Area from time to
time to change the area, location and arrangement of the Common Area and
facilities and accommodations thereof; to restrict employee parking to employee
parking areas, to temporarily close all or any portion of the Common Areas or
facilities to discourage non-customer parking and to do and perform such other
acts in and to said Common Areas and facilities. The exercise of good business
judgment regarding the aforesaid shall be determined by the Lessor in its sole
discretion.
13. Common Area Maintenance: In addition to the rent and other payments Lessee
agrees to make under this Lease, Lessee agrees to pay monthly in advance
Lessee's proportionate share, as determined hereinafter estimated by Lessor, the
costs to operate, maintain and manage the Common Areas of the Property. The
Common Areas expenses shall include, without limitation, the cost of the roof
repairs, snow removal water and sewer use fees, security and fire control
systems, lighting, painting, repairing, replacing, cleaning and heating and air
conditioning enclosed areas, specifically including landscaping and gardening,
parking lot, line painting, traffic control, sanitary control, liability and
other insurance premiums, cost of all rentals of machinery equipment used in
maintenance and operation, the cost of personnel to implement those services, to
direct parking and to police the common areas, and management fees not exceeding
5% of gross rentals collected. Within 60 days after the end of each calendar
year, Lessor shall give Lessee a statement of all costs and expenditures as
enumerated in this Section and a determination of Lessee's proportionate share,
the product of the mathematical equation obtained by multiplying the invoice
amount by a fraction (i) the numerator being the total number of gross leasable
square feet in the Leased Premises, (ii) the denominator being the total number
of square feet of the floor areas of all the Buildings in the Property (it is
agreed that the Lessee's original proportionate share is 2.9%).
If the amount actually paid by Lessee is less than its proportionate share for
that calendar year, the balance shall be paid within 10 days after the statement
is sent to Lessee, or in the alternative, any payment made by the Lessee in
excess of its share shall be credited to the next sums due from Lessee under
this Section. The statement shall also contain a determination by Lessor of the
monthly sum to be paid by Lessee during the succeeding months of the next
calendar year, which determination shall be based in part on the statement of
expense for the preceding year modified by any anticipated increases in the cost
of those services.
14. Lessor's Repairs: Lessor shall keep the foundations, exterior walls (except
store fronts, plate glass and other breakable materials used in structural
portions) and roof of the Building in which the Leased Premises are located in
good repair and, if necessary or required by the proper governmental
authorities, make modifications or replacements thereof. Lessor agrees that all
equipment installed by it as of the time of occupancy shall be in good working
order.
15. Lessee's Repairs: Lessee agrees, at Lessee's expense, at all times to keep
the Leased Premises and appurtenances thereto in good order, condition and
repair, clean, sanitary and safe, including but not limited to the replacement
of equipment, including heating, ventilating and air conditioning units,
fixtures and all broken glass (with glass of the same size and quality) and
shall in a manner satisfactory to the Lessor, decorate and paint the Leased
Premises when necessary to maintain at all times a clean and sightly appearance.
If Lessee refuses or neglects to commence any such repairs or replacements
within five (5) days after written demand, then and thereafter Lessor may, but
shall not be obligated to do so, make such repairs and replacements without
liability to Lessee for any loss or damage that may occur to Lessee's stock or
business by reason thereof, and, if Lessor makes such repairs, Lessee shall pay
to Lessor, on demand, as additional rent, the cost thereof together with
interest at the rate of ten percent (10%) per annum from the date of payment by
Lessor, and all such cost and interest shall become due and payable on the
rental payment date immediately following such completion. Lessee, at its
expense, shall replace all glass including plate glass, other breakable
materials used in structural portions and any interior and exterior windows and
doors in the Leased Premises which may become damaged or broken.
16. Alterations: Lessee shall not attach any fixtures or other articles to any
portion of the Leased Premises nor shall Lessee make any major alterations,
additions, improvements or changes whatsoever therein without in each instance,
first obtaining the written consent from the Lessor, and in addition thereto,
Lessee shall furnish such indemnification against liens, costs, damages and
expenses as may be required by Lessor. All alterations, additions, improvements
and fixtures (other than trade fixtures), which may be made or installed upon
the Leased Premises shall remain upon and be surrendered with the Leased
Premises as a part thereof, at the termination of this Lease, provided, however,
that Lessor may request the removal of any thereof, at the cost and expense of
Lessee.
INITIALS _____ _____
17. Trade Fixtures: Lessee agrees, at Lesse's expense, to install all trade
fixtures and such fixtures shall remain the property of Lessee. Upon the
expiration of the tenancy hereby created, if Lessor so requests in writing,
Lessee shall promptly, remove any additions, fixtures, and installations placed
in the Leased Premises by Lessee and repair any damaged occasioned by such
removal all at Lessee's expense. All trade fixtures belonging to Lessee which
are or may be put into the Leased Premises during the term hereof, whether
exempt or not from sale under execution and attachment under the laws of the
State of Nebraska, shall at all times be subject to a firs lien in favor of
Lessor for all rent, additional rent or other sums which may become due to
Lessor from Lessee under this Lease.
18. Liens: Lessee hereby agrees to promptly pay for any work done or material
furnished in or about the Leased Premises and not to suffer or permit any lien
to attach hereto and indemnify and hold harmless Lessor and the Leased Premises
from any damages, costs, expenses, and liens relating thereto.
19. Utilities: Lessee shall make its own arrangements for the furnishing of
water, sewer use fees, gas, electricity, heat, telephone, and any other required
utility services to the Leased Premises and shall be solely responsible for the
payment of all charges therefore. Lessor shall not be liable for any
interruption in, or failure to supply any utility service. Metering costs to be
Lessee's.
20. Liability Insurance: Lessee agrees to procure and maintain continuously
during the entire term of this Lease, a policy or policies of insurance in a
company or companies acceptable to Lessor, at its own cost and expense, insuring
Lessor and Lessee from all claims, demands or actions; such comprehensive
insurance shall protect and be written showing the Lessee as the named insured
and shall provide coverage of at least $100,000 for injuries to any one person,
$300.000.00 for injuries to persons in any one accident and $100,000.00 for
damage to property, made by or on behalf of any person or persons, firm or
corporation arising from, related to, or connected with the conduct and
operation of Lessee's business in the Leased Premises, or arising out of and
connected with the use and occupancy of sidewalks and other Common Areas by the
Lessee. All such insurance shall provide that Lessor shall be given a minimum
of ten (10) days' notice by the insurance company prior to cancellation,
termination or change of such insurance.
Lessee shall provide Lessor with copies of the policies or certificates
evidencing that such insurance is in full force and effect and stating the terms
and provisions thereof. If Lessee fails to comply with such requirements for
insurance, as aforesaid, Lessor may, but shall not be obligated to do so, obtain
such insurance and keep the same in affect and Lessee agrees to pay Lessor, upon
demand, the premium cost thereof plus interest at the rate of fifteen percent
(15%) per annum.
Lessee shall not carry any stock of goods or do anything in or about the
Leased Premises which will in any way tend to increase insurance rates thereon
or on the building in which the same are located. If Lessor shall consent to
such use, Lessee agrees to pay as addition rental any increase in premiums for
insurance against loss by fire, or extended coverage risks resulting from the
increased risk. If Lessee installs any electrical equipment that overloads the
power lines to the building, Lessee shall at its own expense, make whatever
changes are necessary to comply with the requirements of insurance underwriters,
insurance rating bureaus, utilities companies and governmental authorities
having jurisdiction.
21. Taxes on Lessee's Property: Lessee shall be liable for all taxes levied
against personal property and trade fixtures placed by Lessee in or about the
Leased Premises.
22. Real Property Taxes and Insurance Premiums: Lessee agrees to pay to Lessor
on demand, as additional rent, within ten (10) days from Lessee's receipt of
billing by Lessor, without set offs or deductions and without further notice or
demand, the following:
(a) Lessor agrees to pay before they become delinquent all real estate taxes
and special assessments lawfully levied or assessed against the above
described premises; however, Lessor may, at its expense, contest and dispute
the same and in such case the disputed item need not be paid until finally
adjudged to be valid. Lessee's liability under this Section shall be to pay
to the Lessor, as additional rent, within ten (10) days of demand and
presentation of photocopies of the tax statements and other written evidence
by Lessor, the product of the mathematical equation obtained by multiplying
the real estate tax by the Lessee's proportionate share as described in
Paragraph 13.
(b) Lessee's proportionate share of all real estate charges and insurances
expenses, described in paragraph 20, and Lessees's Common Area Maintenance
charges described in paragraph 13, during the Lease term shall be paid in
monthly installments on or before the first day of each calendar month in
advance, in an amount estimated by Lessor to be $343.00 per month.
23. Partial damage to Leased Premises: In the event the Leased Premises are
damaged by fire or other casualty, insurable under standard extended coverage
insurance, to the extent of twenty-five percent (25%) or less of the insurable
value of the Leased Premises, the damage shall promptly be repaired by Lessor,
at his cost and expense. If the casualty, the repairing or the rebuilding shall
render the Leased Premises not fit for occupancy either in whole or in part, a
proportionate abatement of the rent shall be allowed from the date of the
happening of the event causing the damage until the date when the Leased
Premises are again made fit for occupancy, said proportionate abatement to be
computed on the basis of the relation which the square foot areas of the space
in the Leased Premises rendered unfit for occupancy bears to the total square
foot area of the Leased Premises.
INITIALS _____ _____
24. Substantial Damage to Leased Premises and Building of Either Election: In
the event of any damage by fire or other casualty insurable under extended
coverage insurance.
(a) The Leased Premises shall be damaged to the extent of more than twenty-
five percent (25%) or
(b) The building in which the Leased Premises are located is damaged to the
extent of fifty percent (50%) or more of the cost of replacement of said
building, then in any such events, Lessor may elect either to repair or rebuild
the Leased Premises or the building in which the Leased Premises are situated or
to terminate this Lease, either of such election to be made by the giving of
written notice to such effect by Lessor to Lessee within sixty (60) days after
the date of the happening of the event causing the damage. If the casualty, the
repairing or the rebuilding shall render the Leased Premises not fit for
occupancy either in whole or in part, a proportionate abatement of the rent
shall be allowed from the date of the happening of the event causing the damage
until the date when the Leased Premises are again made fit for occupancy, said
proportionate abatement to be computed an the basis of the relation which the
square foot area of the space in the Leased Premises rendered unfit for
occupancy bears to the total square foot area of the Leased Premises.
25. Waiver of Damage: Lessor shall not be responsible for, nor liable to, Lessee
for any damage to the Leased Premises or to the Building in which the Leased
Premises are situated nor for any delay in repairing or rebuilding or inability
to repair or rebuild nor any other cause whatsoever beyond Lessor's control. All
property of the Lessee and all property kept stored or maintained in or upon the
Leased Premises, adjacent sidewalks, loading platform or other Common Areas
shall be at the sole risk of the Lessee.
26. Eminent Domain: If all the Leased Premises shall be taken under the right
of Eminent Domain by any public authority having the right to do so or if a
portion of the building is condemned preventing the practical use of the Leased
Premises for Lessee's purpose, this Lease, and all obligations hereunder, shall
terminate on the date title vests, pursuant to such proceedings In the event the
proper judicial authority does not divide the award to compensate the separate
loss of each party, the total award in such proceedings shall equitably be
distributed between the Lessor and Lessee, and if applicable, other Lessee's
occupying space in the building. If such taking does not prevent the practical
use of the Leased Premises for the purpose of the Lessee, then this Lease shall
continue.
27. Assignment by Lessee: Lessee shall not assign or in any manner transfer
this Lease or any interest therein nor sublet the Leased Premises or any part or
parts thereof, nor permit occupancy by anyone with, through of under it.
28. Entry by Lessor: Lessee agrees that Lessor, its agents, employees or
servants or any person authorized by Lessor may enter the Leased Premises for
the purpose of inspecting the condition of the same and to make such repairs,
additions, improvements, changes or alterations thereto or to the building of
which they are a part as Lessor may elect to make and to exhibit the same to
prospective purchasers of the building, in which the Premises are contained, and
to prospective Lessee's and to place in and upon said Leased Premises at such
places as may be determined by Lessor. "For Rent" signs, or notices, at any
time within ninety (90) days of termination of this Lease and Lessee undertakes
and agrees that neither Lessee nor any person within Lessee's control will
interfere with such signs and notices.
29. Holding Over: In the event Lessee remains in possession of the Leased
Premises after the expiration of the tenancy created hereunder, and without the
execution of a new Lease, it shall be deemed to be, occupying the Leased
Premises as a Lessee from month to month and shall pay as a monthly rent, two
times the rent specified for this tenancy and such holding over shall be subject
to and under and pursuant to all the other terms, conditions provisions and
obligations of the Lease in so far as the same are applicable to a month-to-
month tenancy. If the Leased Premises are not surrendered at the end of the
term, Lessee shall indemnify Lessor against loss or liability resulting from
delay by Lessee in so surrendering the Leased Premises, including, without
limitation; any claims made by any succeeding Lessee founded on such delay.
30. Notices: All notices and demands required or permitted to be given under
this Lease to Lessee shall be given in writing, be deposited in the United
States mail, certified and postage prepaid, and addressed to Lessee at the
Leased Premises, whether or not Lessee has departed from, abandoned or vacated
the Leased Premises. All notices and demands required or permitted to be given
under this Lease to Lessor shall be given in writing, be deposited in the United
States mail, certified and postage prepaid and addressed to Lessor, R&D Company,
Inc., 5709 "F" Street, Omaha, NE 68117, or at such other address as Lessor may
give to Lessee in writing from time to time.
31. Subordination: Lessee agrees that this Lease is, and shall be subordinate
to any mortgage, deed of trust or any other hypothecation for security which has
been or which hereafter may be placed by the Lessor upon said Leased Premises or
the land or building of which the Leased Premises are a part and such
subordination is hereby effective and self-operative without any further act by
Lessee. Notwithstanding the foregoing, Lessee agrees to execute upon demand,
any and all turner documents or instruments in addition to the Lease, which may
be deemed necessary or desired to effectuate such subordination.
32. Lien on Lessee's Property: Any and all property of every kind belonging to
the Lessee and located upon the premises at any time during the tem of this
Lease or any extension or renewal thereof, whether acquired by the Lessee before
or after the execution of this Lease, and whether or not exempt from sale under
execution or attachments under the laws of Nebraska, shall at all times be
subject to and bound with a first lien in favor of Lessor to secure the due
payment of all rents and the performance of all obligations of the Lessee
hereunder. Such lien may be enforced in the same manner as a security interest
as provided in the Uniform Commercial Code or in any other manner permitted by
law.
33. Default by Lessee: All covenants and agreements herein made and obligations
assumed are to be construed also as condition and these presents are agreed to
upon the express condition that if Lessee should fail to pay when due any of the
aforesaid installments of rent or late charges, or should fail to perform or
observe any of the covenants, agreements or obligations herein made or assumed
by Lessee, or if Lessee shall become insolvent or bankrupt, recast or modify
Lessee's debts or obligations or delay payment thereof or if any assignment be
made of Lessee's property for the benefit of creditors then and thenceforth, in
any said events this Lease may be forfeited and thereby becomes null and void at
the option of the Lessor and the Lessor may immediately or at any time
thereafter reenter said Leased Premises, or any part thereof in the name of
whole or repossess and have the same as of Lessor's former estate and remove
therefrom all goods and chattels not thereto property belonging, and expel said
Lessee and all other persons who may be in possession of said Leased Premises
and that to, without demand or notice. It is agreed however, that the monthly
installment of rent provided for above shall not be deemed in default until five
(5) days after written notice of default has been given to Lessee and the no
default shall be declared for the failure to perform or observe any of the other
covenants, agreements or obligations made or assumed by the Lessee until said
Lessee is given notice in writinq of such breach, and shall fail to perform the
agreement called for, or remove the default within five (5) days after mailing
of such notice by Lessor.
In the event Lessor shall exercise the aforesaid option to terminate, he
shall be entitled to receive from the Lessee thereafter the diffence in rental,
herein reserved for the unexpired portion of the term and any lesser net amount
which Lessor, in the exercise of reasonable diligence, is able to procure for
the unexpired portion of the term, each monthly difference being a separate
cause of action, which may or may not be accumulated and joined in one action at
Lessor's option. This right so reserved by the Lessor and granted by Lessee
constitute an essential part of the consideration for the Lessor's agreement to
Lease the said premises to Lessee, and the said reserved right may be exercised
in any of the contingencies provided for by this Lease, that is to say for the
violation and non-observance of any of the undertakings to be kept, observed, or
performed by the Lessee, its successors, or assigns.
34. Not Joint Venture, Etc.: Nothing herein contained shall be deemed or
construed by the parties hereto nor by any third party, as creatinq the
relationship of principal and agent or of partnership or of joint venture
between the parties hereto, it being understood and agreed that neither the
payment of additional rent nor other provisions contained herein, nor any acts
of the parties hereto, shall be deemed to create any relationship between the
parties hereto other that the relationship of Lessor and Lessee.
35. Strict Performance: The failure to insist upon strict performance by Lessee
of any of the covenants, conditions and agreements of the Lease shall not be
deemed a waiver of any of Lessor's rights or remedies and shall not be deemed a
waiver of any subsequent breach or default by Lessee of any of the covenants,
conditions and agreements of this Lease. No surrender of the Leased Premises
shall be accomplished by Lessor's acceptance of rental by any other means
whatsoever unless the same be evidenced by Lessor's written acceptance of such
as a surrender.
36. Lessor Not Responsible for Delays: Whenever a period of time is herein
provided for Lessor to do so or perform any act or thing, Lessor shall not be
liable or responsible for any delays due to strikes, riots, Acts of God,
shortages of labor or materials, national disasters, or any other cause not
dissimilar to those enumerated, beyond Lessor's reasonable control.
37. Peaceable Surrender: Lessee, upon expiration or termination of this Lease,
whether by lapse of time or otherwise, agrees peaceably to surrender to Lessor
the Leased Premises, including the alterations, additions, improvements, changed
and fixtures other than Lessee's movable trade fixtures in broom clean condition
and in good repair, except for Acts of God and ordinary wear and tear. Lessee
agrees at Lessor's requests to remove Lessee's trade fixtures upon any such
expiration or termination and repair all damage to the Leased Premises caused by
such removal. Lessee shall also surrender all keys for the Leased Premises to
Lessor at the place then fixed for payment of rent and shall inform Lessor of
combination locks, safes, and vaults, if any, on the Leased Premises.
38. Additional Construction: Lessor hereby reserves the right at any time to
make alterations or additions to, and to build additional stories on the
Building in which the Leased Premises are contained and to the construction
adjoining or adjacent to same which are herein referred to as "Building".
39. Estoppel Certificates: Lessee, from time to time upon written request from
Lessor, agrees to execute, acknowledge and deliver to Lessor, in form reasonably
satisfactory to Lessor and/or Lessor's mortgage, a written statement certifying
that Lessee has accepted the Leased Premises, that this Lease is unmodified and
in full force and effect (or, if there have been modifications, that this Lease
is in full force and effect as modified, setting forth the modifications), that
Lessor is not in default hereunder, the date to which the rent and other amounts
payable by Lessee have been paid in advance, if any, and such additional facts
as reasonably may be required by Lessor or Lessor's mortgages. Lessee
understands and agrees that any such statement delivered pursuant to this
section may be relied upon by any prospective purchaser of the Leased Premises
and their respective successors and assigns.
INITIALS _____ _____
40. Waiver of Claims: Each party hereto hereby waives any and all claims for
recovery which such party or anyone claiming through such party may have against
the other party hereto (or such other party's officers, agents or employees) for
or with respect to any loss or damage to such waiving party's property which is
insured under valid insurance policies, to the extent of any recovery actually
collectible under such insurance policies, whether or not such loss or damage is
caused by the negligence of such other party or such other party's agents,
employees, subtenants, concessionaires or licensees or of any other person or
persons for whose actions such other party may be responsible or liable;
provided, that the foregoing waiver shall be effective only when permitted by
the applicable insurance policy.
41. Cumulative Rights: The rights, options, elections and remedies of Lessor
contained in this Lease shall be cumulative and may be exercised on one or more
occasions; and none of them shall be construed as excluding any other or any
additional right, priority or remedy allowed or provided by law.
42. Time of Essence: Unless otherwise specifically provided herein, time is of
the essence of this Lease, and all provisions of this Lease relating to the time
of performance of any obligation under this Lease shall be strictly construed.
43. Lessor's Right to Cure Default: Lessor may, but shall not be obligated to,
cure at any time, without notice, any default by Lessee under this Lease;
whenever Lessor so elects, all costs and expenses incurred by Lessor in curing a
default, including without limitation reasonable attorney fees, together with
interest on the amount of costs and expenses so incurred at the rate of fifteen
percent (15%) per annum, shall be paid by the Lessee to the Lessor on demand.
44. Lessor's Expenses: In the event any legal proceeding shall be brought for
the recovery of possession of the Leased Premises, for the recovery of rent, or
for any other amount due under the provisions of this Lease, or by reason of any
breach of any of the covenants herein contained, on the part of Lessee to be
kept or performed, such breach being established, Lessee shall pay the Lessor
all expenses incurred therefore, including reasonable attorney fees.
45. No Right of Set-Off. No default or claim of default on the part of the
Lessor shall entitle Lessee to withhold any sums due under the provisions of
this Lease. Lessee acknowledges and agrees that it has waived any remedy
permitting it to withhold rent or to claim an offset against such rent in the
event of any claim breach on the part of the Lessor.
46. Entire Agreement: Lessor and Lessee hereby agree that this Lease shall be
governed by and interpreted pursuant to the laws of the State of Nebraska.
Lessor and Lessee further agree that this Lease as written, including exhibits,
represent the entire agreement between the parties hereto and that there are not
other agreements, written or verbal, between the parties hereto pertaining to
the Leased Premises or to the subject matter thereof and that all prior
agreements, negotiations and understandings are hereby merged in this Lease.
This Lease may not be amended or supplemented orally but only by an agreement in
writing which has been sighed by the party against whom enforcement of any such
amendment or supplement is sought.
47. Advertising: Lessee agrees to use the name of the Plaza 120 in any and all
advertising it does.
48. Net Lease: This is a net-net-net Lease and the parties agree and understand
that the Lessor will suffer to pay no expenses whatsoever for taxes, insurance,
gas, electric, water, sewer fee, improvements, repairs, changes or alterations,
special assessments, levies, management fees not exceeding 5% of gross rents
collected, or other charges against the real estate whatsoever, but that Lessee,
shall pay its proportionate share of the said real estate taxes, special
assessments, charges, common area charges, insurance and all other expenses in
the proportion as shown above in paragraph 13.
49. Signage: Lessee shall be responsible for installation of its signage which
signage shall be approved by lessor prior to installation. All expenses
associated with installation and removal of sign shall be home by lessee. At
termination of lease, lessee shall remove its sign from the premises.
50. Brokers: Commercial Realty, Inc. is the licensed real estate broker
representing the Lessor.
The _______________________ is the licensed real estate broker
representing the Lessee.
51. Additional Provisions: Lessor will finish the interior of the premises per
attached Exhibit B. Finish shall be comparable to that of Commercial Realty
offices.
INITIALS _____ _____
IN WITNESS WHEREOF, the parties hereto have executed this Lease this 15th day of
January, 1999.
Lessor: 90th St., LLC
_____________________________
By David E. Abboud, President
Lessee: Global Entertainment Holdings/Equities, Inc.
/s/Steve M. Abboud
By: President
Global Entertainment Holdings/Equities, Inc.
6235 South 90th Street
Omaha, Nebraska 68127
(402) 331-3189
The Company's two wholly owned operating subsidiaries are listed below:
1) Interactive Gaming and Wagering NV
Incorporated in Netherlands Antilles, on May 19, 1997
Principal office is located in Curacau, Netherlands Antilles
2) Prevail Online, Inc.
Incorporated in Colorado, U.S.A., on July 21, 1999
Principal office is located in San Francisco, California
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<NAME> Global Entertainment Holdings/Equities, Inc.
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