SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
youticket.com inc.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Nevada 88-0430607
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(State of Incorporation) (Issuer's I.R.S. Employer I.D. Number)
youticket.com inc.
4420 S. Arville, Suites 13 & 14
Las Vegas, NV 89103
(Address of principal executive offices and zip code)
(702) 876-8200
(Issuer's Telephone Number, Including Area Code)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $0.0001 par value per share
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ITEM 1. DESCRIPTION OF BUSINESS
Introduction
We operate an Internet show and tour ticketing website,
www.youticket.com, for the Las Vegas market. Through our wholly owned subsidiary
Visitcom, a Nevada corporation, we also provide show and tour ticketing and
reservation services to the Venetian Hotel in Las Vegas in conjunction with
Ticketmaster which provides us with both systems and market support. In addition
to selling tickets through our web site and ticket outlets, youticket.com also
enables customers to purchase its products via its toll-free telephone numbers,
1-877-YOU-TIXS,1-877-YOU-TKTS and 1-877-BIG-TIXS. Through one means or another
customers are able to purchase show and tour tickets and make reservations 365
days a year, 7 days a week and 24 hours a day.
Current Products and Services
We currently provide a ticketing and reservation service for show and
concert tickets, adventure packages and scenic tours in the Las Vegas and
surrounding areas. Our current product offerings include:
<TABLE>
SHOWS TOURS ADVENTURE PACKAGES
- ----- ----- ------------------
<S> <C> <C> <C>
American Superstars Lasting Impressions Bryce Canyon National Park Colorado River white water rafting
An Evening at La Legends in Concert Death Valley Hummer off-road adventures
Cage
Boylesque Les Trix Grand Canyon Lake Mead Jet Ski adventures
Caesars' Magical Love Him Tender Hoover Dam Western ranch excursions
Empire
Comedy Magic Radio City Rockettes Lake Mead
Crazy Girls Rick Thomas Las Vegas City
Elvis A. Rama Rivera Comedy Club Laughlin
Follies Bergere Spellbound Monument Valley
Forever Plaid Splash Primm Outlets
Hipnosis Steve Wyrich Red Rock Canyon
Headliners The Comedy Store Valley of Fire
Houdini The Dream King Zion National Park
Imagine The Star Trek
Experience
Jubilee
</TABLE>
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Market Opportunity
Las Vegas and Other Markets
Las Vegas is one of the largest tourism markets in the world. According
to the Las Vegas Convention and Visitors Bureau, the Las Vegas area received 30
million visitors in 1998, who spent close to $24 billion on entertainment. The
average Las Vegas visitor spends 3.7 nights within the city, and 48% of these
visitors will see at least one show. In addition, many Las Vegas visitors will
also take one of the many scenic tours to nearby locations such as the Grand
Canyon, Hoover Dam and the other nearby national parks.
We believe there are comparable tourism markets in other parts of North
America. These include, San Francisco, New Orleans, Orlando, Honolulu, various
casino markets such as Atlantic City, and vacation resorts such as Virginia
Beach and Branson. We believe that there is a market opportunity in these and
other markets for a comprehensive Internet based reservation and ticketing
service that offers both exciting content, in the form of online guides,
reviews, listings and other editorial content and providing visitors with the
ability to make a series of online transactions to satisfy their vacation needs.
E-Commerce Growth
Although we offer conventional telephone reservation and ticketing, we
see our greatest prospects for growth are via the Internet. As the Internet
population continues to grow, we see this as opening e-commerce opportunities to
sell an ever increasing range of products and services to visitors to not only
Las Vegas, but to many other resort destinations across North America.
As a result of the increasing popularity of the Internet with consumers
and businesses alike, e-commerce is undergoing significant growth. This growth
is due to several factors:
o A large and growing installed base of personal computers in
people's homes.
o The improving performance of personal computers in the workplace
and the home.
o The transformation from narrow-band to broadband, allowing
increased amounts of data across networks and systems in a
fraction of the time.
o Free and easy access to the Internet.
o Global, mass acceptance of the Internet as a communications and
commercial medium.
o Increasing acceptance of the Internet as a secure environment for
conducting transactions.
International Data Corporation, a market research firm, estimates that
the number of Internet users worldwide exceeded 159.0 million at the end of 1998
and anticipates this number will grow to over 510.0 million by the end of 2003.
International Data Corporation also estimates that worldwide e-commerce will
increase from approximately $50.0 billion in 1998 to approximately $1.3 trillion
by 2003.
E-commerce presents several advantages over traditional commerce by
bringing together traditionally fragmented, inefficient suppliers and
distribution channels, facilitating more efficient pricing models by better
matching buyers and sellers and empowering consumers by providing them with
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better information, resulting in more informed purchasing decisions.
The travel industry has taken particular advantage of the Internet's
growth. Travelers in the United States spent more than $470 billion on travel
and tourism in 1996, according to the Travel Industry Association of America.
According to a recent study by Forrester Research, Inc., about 5 million U.S.
households booked trips online in 1998. Forrester predicts that number will grow
to 9 million this year and 26 million--or one-fourth of all U.S. households--by
2003. The study also projects that U.S. households will spend approximately $7.8
billion booking trips online this year, and $29.4 billion in 2003.
Airlines, hotels and travel services advertise to reach the growing
number of people who use the Internet to make their travel plans. According to
Competitive Media Reporting, in 1995 the travel industry purchased over $2.3
billion in advertising through traditional vehicles such as broadcast and cable
television, radio, print and outdoor media to reach and influence customers.
Entertainment ticketing is also large and growing. The Internet has
emerged as a powerful medium for aggregating and disseminating event
information, selling tickets and related products, and marketing and promoting
events. According to Forrester Research, a market research firm, online
ticketing sales to marquee events, regular performances and sporting events are
expected to grow from $115.0 million in 1998 to an estimated $2.6 billion in
2003. The Internet creates advantages and conveniences for consumers and
entertainment organizations alike. Consumers' want a single web site where they
can find information about a wide range of events and conveniently buy tickets
to those events.
Business Strategy
Our subsidiary, Visitcom, has been operating in the Las Vegas market
since 1996, offering reservation and ticketing services to a number of shows,
tours, adventure packages and hotels. In the nearer future, we intend to expand
our product offerings to provide travel services, online guides and a
reservation system for additional theaters, tours and hotels and expand into
services for movies, restaurants, and golf tee-times. Our objective is to
develop a comprehensive, entertainment product offering for tourists to Las
Vegas and, during that process, solidify our market position and local and
Internet brand identity for the Las Vegas market. Using a tested, efficient and
effective business model, we then intend to expand into other tourist markets in
North America. Potential target markets for expansion include key tourist and
convention markets such as Anaheim, Orlando, Honolulu, New Orleans, San
Francisco, and San Diego, casino markets such as Atlantic City, Reno, Laughlin,
and Biloxi, and vacation resorts such as Branson, Myrtle Beach, Virginia Beach,
and Niagara Falls.
The basis for the development and expansion will be our web site and
e-commerce orientation. We plan to offer consumers and advertisers:
o An easy to use, fast and efficient web site.
o A one-stop shop with a wide selection of products and services that gives
them everything they need and want for a perfect vacation.
o Guides, reviews, listings and incisive editorial content that have a savvy,
young person's perspective to help people make smart decisions about their
resort plans.
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o The opportunity to comparison-shop across a broad spectrum of offerings in
several product and service categories.
o The ability to instantly complete safe and cost effective e-commerce
transactions.
We currently have strategic relationships with Ticketmaster, leading
hotels and casinos, media publications and a national car rental company. The
relationships with Ticketmaster and the Venetian Casino Resort are pursuant to
written agreements. These relationships are designed to build product offerings
and provide reliable ticketing systems. We will build on our existing alliances,
form new partnerships and acquire companies that target visitors to resort
destinations. Target acquisitions may include web sites in resort destinations,
online and offline tour guides and travel service companies. We will continue to
build the youticket.com brand name through expansion into new markets and the
acquisition of customer databases, products and content.
By targeting specified markets, and by focusing on the needs of
vacationers and conventioneers, we believe we can create a substantial market
niche for youticket.com without focused competition from the many reservation
and ticketing web sites such as Ticketmaster Online and Tickets.com that tend to
target larger urban metropolitan areas. We believe that we will benefit from a
first-mover advantage in the resort areas which we are targeting. We expect to
begin our North America expansion in the middle of 2000.
Ticketmaster - Las Vegas
In May, 1998, our subsidiary Visitcom entered into a hardware and
software rental agreement with Ticketmaster - Las Vegas. Under this agreement
Visitcom, Inc. retained and authorized Ticketmaster to act as their exclusive
hardware and software supplier for programming and storage of accounts with
respect to tickets for the attractions on the automated computerized ticketing
system developed by Ticketmaster utilizing telephones and ticket outlets with
terminals and ticket print-out capabilities linked to Ticketmaster's central
computer facility. The term of this agreement is for three years with an
automatic renewal for a successive two years unless either party notifies the
other not less than 90 days and no more than 120 days prior to the expiration of
the initial term.
The Venetian Casino Resort
In March, 1999, our subsidiary Visitcom entered into an agreement with
the Venetian Casino Resort to provide a leased ticketing system and training and
maintenance for set fee per ticket sold. The contract expires in April, 2001
with a thirty-day cancellation provision by either party.
Sales and Marketing Strategy
In the near term our principal marketing goal is to expand our product
offerings and increase our customer base. We plan to increase content on our web
site and increase the number of entertainment venues, restaurants, hotel
properties and other related tourist providers for which we provide reservation
and ticketing services. We principally will target resort visitors who access
the Internet seeking entertainment options for their visits to Las Vegas.
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We will use direct marketing, cross marketing and traditional marketing
to attract a loyal customer base. By gaining the trust of resort visitors, we
will develop a highly targeted, brand loyal audience who will serve as the base
for growth. We intend to use "opt-in" e-mail strategies to develop affiliate
programs that will encourage visitors to use the Company's web site.
Using our "opt-in" e-mail program, affiliate web site members will
receive a number of benefits such as notifications about special deals,
discounts on products and services, and news, reviews, and tips for getting
about in Las Vegas and other resort destinations. Members will be rewarded with
a variety of promotions and prizes such as the opportunity to win free
vacations, cash prizes, or products such as a new set of golf clubs. Loyal
members who have made purchases on youticket.com may receive gift certificates,
coupons and discounts.
Members may also be rewarded for telling people about our web site and
services. For example, a member will be rewarded with promotions or prizes for
telling people about us or a particular product or service. Through the
development of a loyal customer base, we will create an opportunity for
advertisers to reach a highly targeted audience who frequent resort
destinations. National advertisers such as airlines, national restaurant chains,
hotels and car rental companies will get an opportunity to target visitors to
numerous popular resort destinations. Local advertisers will get the opportunity
to advertise to people visiting their specific community. Local restaurants,
retailers, golf courses and the large base of companies that form the foundation
for a resort destination's local economy will find an excellent opportunity with
us.
To extend our reach, we will use cross-marketing strategies with other
forms and types of ticket agents and distributors to drive web traffic. The goal
is to use our existing as well as other agents' physical ticketing locations as
web site marketing vehicles. We will target these cross- marketing campaigns
with special incentives. For example, any visitor to our ticket locations who is
a web site member will get a discount on their purchase and vice-versa.
In addition we will also form alliances and partnerships with web
sites, media publications, hotels and casinos, restaurants, tour companies and
travel agencies.
Web Site Overview
Consumers who plan their trips online often have to visit numerous
sites before making their purchases. The process often takes a considerable
amount of time. People must wait for web sites to download and then register to
reach the information they need. In this long search, users will find dozens of
web sites that offer products and services for their trip. But few, if any,
provide full services for everything a resort destination offers. We intend to
connect our web site visitors to powerful e-commerce servers that track an
interconnected network of web sites providing a one-stop shop for all travel
needs to a particular destination. We believe our service will satisfy a growing
need among Internet users for effective and efficient one-stop online shopping.
We plan to provide advertisers with a web site that gives them the
opportunity to reach a wide range of tourists who we expect will spend
considerable time making their purchases. By holding this traffic, we will
provide advertisers an opportunity to efficiently target visitors who travel to
resort destinations. We plan to offer advertisers the opportunity to place
banner ads, messages or e-mail links throughout the site or in specific product
and service categories. For example, a golf course company may advertise on the
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home page, in the golf section or the lodging category. So when a consumer
reserves a hotel room, they will also be prompted to make a tee-time reservation
Once they make the tee time reservation, the consumer may also be exposed to a
banner ad for a golf store.
A key feature of the Company's web site will be its proprietary
e-commerce engine that will be designed to drive revenues by:
o Directing visitors to daily specials that may include ticket discounts,
bargain airfares and more.
o Leading visitors to buy hotel rooms, reserve golf tee times and other
products and services that enhance their existing itinerary.
o Holding traffic on the web site to create opportunities for generating
advertising revenues from sponsors who want to reach a targeted
demographic.
o Directing visitors to other youticket.com destinations where they may be
traveling as part of a vacation tour.
o Capturing demographic information for affiliate programs and promotions
that will include discounts, coupons and prizes. Demographic information
will be processed and managed for sales back to potential resort
destination visitors and carefully screened third-party customers.
We believe that traditional travel industry companies face a paradox.
In years past, these companies received commissions from airlines and other
travel companies for booking customers. The recent trend is for airline
companies to cut their commissions, forcing traditional travel companies to
reduce services to their customers. Pricing models are increasingly complex and
time sensitive. Prices change on a continual basis, making it a challenge to
provide customers with accurate price quotes. In the meantime, customers expect
more from their travel companies. They demand a high level of service and fast,
accurate prices on travel services.
We plan to take full advantage of the Internet's capabilities to solve
many of these issues. Visitors will have the ability to research
up-to-the-minute information on availability of flights, rooms, shows,
entertainment, golf tee-times, and tours. Consumers will feel empowered to
obtain the best prices and design the best vacation package that meets their
personal requirements, without the expense of using a traditional vacation
company. Also, as web technology improves, the ability to compare such items as
rooms and shows will be enhanced through the use of multimedia features such as
full-motion video footage that will provide the consumer with a real life
glimpse of what they are purchasing prior to their actual financial commitment.
The Internet's architecture also enables full automation of processes that
travel agents must often perform manually. This means more efficient systems and
less chance of operation losses.
In order to attract a larger audience to our web sites, we believe that
it needs to offer not only e-commerce opportunities, but also interesting and
entertaining editorial content, reviews, ratings, and detailed narrative
descriptions of its offerings. To establish an editorial base, we plan to form
joint ventures or purchase owners of relevant content such as local visitor
magazines.
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Through enhanced product selection, our visitor base will grow
significantly and will serve as the foundation for cross marketing and direct
marketing strategies. We will offer an increased number of shows and concerts,
tours and excursions, reservations for restaurants and golf tee- times,
recreation activities, accommodations at hotels, motels and other
establishments, and travel services.
Our web site currently generates revenues from sales of show tickets,
concerts, scenic tours and adventure packages. We will soon be selling hotel
accommodations, golf tee times and rental cars and in the future plan to add
airline travel, weddings and restaurant reservations. In addition we intend to
generate additional revenues by selling advertising.
All of the web sales are processed through DX Cart, a popular shopping
cart and authorized secure online credit card transaction processor. The website
can accept and process sale transactions 24 hours a day, 7 days a week with
online credit card confirmation.
In order to effectively compete with traditional retailers and other
web sites, as well as to overcome any hesitancy potential customers may have in
purchasing services over the Internet, we are planning to implement a customer
satisfaction program. Currently, we frequently deliver tickets ordered through
our website to our customers at their hotels. We believe that most e-commerce
companies do not provide users with real customer service. We intend to
differentiate our web site from other business web sites by providing live,
attentive customer service. We plan to implement a customer satisfaction system
which will manage customer service issues 24 hours a day, seven days a week,
both in person and online. We will incur substantial ongoing costs in connection
with the operation of this system, including fees payable to companies to which
we out-source parts of our customer satisfaction program.
Research and Development
We launched our website in 1999 and only then began to spend monies on
website development. In 1999 we spent approximately $29,000 on the development
of our website. In November 1999, we entered into a consulting agreement with
Reservision, Inc. for the continued development of our website. Reservision will
provide approximately 40 hours per month for development and support as required
by us to maintain and improve the website. The work that may be performed by
Reservision will belong to us, and they agree to assign their proprietary
rights, if any, to us. We will pay Reservision $3,500 per month for their
services during the term and reimburse Reservision for their pre-approved
expenses. We also have granted Reservision an option to purchase 15,000 shares
of common stock for each month of service performed. The option will vest six
months after the month of completed service and will be exercisable for four
years from vesting at $.01 per share. The agreement with Reservision may be
terminated at any time on 10 days written notice.
Proprietary Rights
We regard the protection of our intellectual property, including our
URLs "youticket.com" and "bigticket.com" as critical to our business. We also
rely on the proprietary technology of third parties, including TicketMaster,
Authorize Net and DXCart. Unauthorized use of the intellectual property used in
our business by third parties may damage our brand and our reputation. We rely
on intellectual property laws and confidentiality and license agreements with
key employees, customers and others to protect our intellectual property rights.
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Government Regulation
The laws governing Internet transactions remain largely unsettled, even
in the areas where there has been some legislative action. The adoption or
modification of laws or regulations relating to the Internet could increase our
costs and administrative burdens. It may take years to determine whether and how
existing laws such as those governing intellectual property, privacy, libel,
consumer protection and taxation apply to the Internet.
For example, although not yet enacted, Congress is considering laws
regarding Internet taxation. In addition, various jurisdictions already have
enacted laws that are not specifically directed to electronic commerce but that
could affect our business. The applicability of many of these laws to the
Internet is uncertain and could expose us to substantial liability.
The growth of the Internet and electronic commerce, coupled with
publicity regarding Internet fraud, may lead to the enactment of more stringent
consumer protection laws. These laws may impose additional burdens on our
business.
Several telecommunications carriers are seeking to have
telecommunications over the Internet regulated by the Federal Communications
Commission in the same manner as other telecommunications services.
Additionally, local telephone carriers have petitioned the Federal
Communications Commission to regulate Internet service providers and online
service providers in a manner similar to long distance telephone carriers and to
impose access fees on these providers. If either of these petitions are granted,
the costs of communicating on the Internet could increase substantially. This,
in turn, could slow the growth of use of the Internet. Any legislation or
regulation could materially adversely affect our business.
Competition
Our business is highly competitive. We compete with entertainment
organizations that handle their own ticket sales and distribution and
reservations through both traditional and on-line medium. These competitors
include international, national and local ticketing and reservation services.
Our primary competitor in Las Vegas is Allstate Ticketing which operates
multiple ticketing outlets and a web site focused on show tickets. On a national
level, Ticketmaster Online- CitySearch has an exclusive license to all of the
online ticketing for Ticketmaster Corporation. Another competitor is
Tickets.Com. We also compete with the internal reservation services of hotel
chains, airlines with their internal referrals and car rental companies. We also
compete with travel agencies, although we expect that some travel agents may use
our services. Our competitors vary in size and in the scope and breadth of the
services they offer, and the manner in which they offer their services.
E-commerce
The markets for reservation and ticketing services offered through
traditional channels and Internet channels are intensely competitive. We expect
competition to increase, especially in the e-commerce medium.
There are few barriers to the e-commerce market. The rapid growth of
the Internet in general, and online e-commerce activity specifically, has
attracted the attention of numerous companies. Competitors may enter into
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exclusive distribution arrangements with our theaters, hotels, tour companies
and transportation companies which might deny us access to various products.
Increased competition also could result in pricing pressures, increased
marketing expenditures and loss of market shares. Others may be operating
similar types of comprehensive services to our company in markets that we intend
to enter that could present a formidable barrier to entry.
Employees
We currently have six employees, of which three are senior executives
in the positions of president, controller, and sales manager.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward Looking Statements
When used in this Form 10 and in future filings by us with the
Securities and Exchange Commission, the words or phrases "will likely result,"
or "we expect," "will continue," "is anticipated," "estimated" or similar
expressions are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Readers are
cautioned not to place undue reliance on any forward-looking statements, each of
which speak only as of the date made. These statements are subject to risks and
uncertainties, some of which are described below. Actual results may differ
materially from historical earnings and those presently anticipated or
projected. We have no obligation to publicly release the result of any revisions
that may be made to any forward-looking statements to reflect anticipated events
or circumstances occurring after the date of such statements.
Selected Financial Data
Because we continue to develop our web site, products and services and
we are still in the earlier stages of development, selected financial data would
not be meaningful. Reference is made to the financial statements included
elsewhere in the document. The fiscal year is the calendar year. Included in the
document are the audited financial statements for the twelve-month periods
ending December 31st 1997 and 1998 and the un-audited financial statements for
the nine-month period ending September 30th 1999.
Acquisition of Visitcom, Inc.
On June 30, 1999, we acquired Visitcom, Inc., a Nevada corporation and
Las Vegas show and tour ticketing and service agency. The transaction was
accounted for as a purchase. We initially issued 14,327,140 shares of common
stock to purchase Visitcom. The market value of a share of common stock on the
date of this transaction was $0.25 per share. On September 3, 1999, based on
facts that appeared to alter the representations and warranties of the prior
stockholders of Visitcom, we entered into a settlement agreement with the prior
stockholders. Under this arrangement, 11,327,140 of the shares issued for the
acquisition were returned to us for cancellation and are being held as treasury
shares and we paid $100,000 to the surrendering stockholder. As part of the
settlement, on our behalf two stockholders transferred an aggregate of 300,000
shares to one of the prior stockholders of Visitcom. As an inducement for this
action by those stockholders, we issued a note to the transferring stockholders
in the amount of $93,750 which was subsequently converted into shares of common
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stock. The net purchase price of Visitcom exceeded the fair value of the net
assets acquired by $1,204,623, and is being amortized on a straight-line basis
over seven years.
youticket.com inc. did not have business operations until it acquired
Visitcom. Therefore, the results of operations described below are for the years
ending December 31st 1997 and 1998 are for Visitcom. The results of operations
described below for the nine month period ending September 30, 1999 are
unaudited pro-forma financial information for Visitcom and youticket.com
combined, assuming the acquisition had occurred on January 1st , 1999.
Qualified Report of Independent Certified Public Accountants.
Our independent accountants have qualified their report. They state
that the audited financial statements of youticket.com for the periods ended
December 31, 1997 and 1998 have been prepared assuming the Company will continue
as a going concern. They note that the significant losses of our company as of
December 31, 1998, raise substantial doubt about our ability to continue in
business.
The losses of our company have continued for the nine months ended
September 30, 1999. We have funded losses by the sale of additional securities.
We expect losses to continue. We have no sources of long-term capital. To the
extent losses continue and we are unable to fund them, we may have to curtail
aspects of our operations or cease operations altogether. We cannot predict how
long we will be able to remain operational into the future.
Results of Operations
Revenue
We had revenue of $239,780 for fiscal year 1997 and revenue of $767,163
for fiscal year 1998. Our revenues are primarily derived from show ticket, hotel
room and scenic tour sales via ticketing booths and our website. The increase in
sales was principally the result of increased number of ticketing booths in
operation and the launch of Visitcom's web site, www.bigticket.com, in 1998.
For the nine months ended September 30, 1999, we had pro-forma combined
revenues of $250,296. This drop in revenue is result of a change in direction
from focusing on low margin ticketing booth sales into higher margin web site
sales and the discontinuation of hotel room sales.
Cost of Revenue
The cost of revenue for fiscal year 1997 was $119,360 and for fiscal
year 1998 was $428,217. The cost of revenues for the nine months ended September
30, 1999 was $151,251. Cost of revenues represents the costs of the show
tickets, hotel rooms and scenic tours sold.
Selling, General and Administrative Expenses
The expenses for fiscal year 1997 were $190,948 and for fiscal year
1998 were $460,125. The principal increase in expenses is the result of
expansion into hotel room sales and the additional management personnel required
to oversee the number of ticket booths.
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For the nine months ended September 30, 1999, expenses were $731,011.
The reasons for the increase were due to costs associated with restructuring the
operations to discontinue the sale of hotel rooms, the operation of ticketing
booths, the development and launch of our new web site and amortization charge
associated with the Company's acquisition of Visitcom.
Net Losses
We had a loss of $70,528 for fiscal year 1997 and $121,179 for fiscal
year 1998. The principal reasons for the significant increase in losses were
expansion into hotel room sales and increase in the number of ticketing booths
operated during 1998.
We had a loss of $631,966 for the nine months ended September 30, 1999
or $0.04 per share basic and diluted. The principal reasons for the increase in
the losses were due to costs associated with restructuring the operations to
discontinue the sale of hotel room, the operation of ticketing booths, the
development and launch of our new web site and amortization charge associated
with the acquisition of Visitcom.
Liquidity and Capital Requirements
The working capital of youticket.com at December 31, 1998 was $333,534,
and there was a working capital deficit of $671,585 at September 30, 1999.
youticket.com had cash and cash equivalent assets of $4,117 at December 31, 1998
and $43,551 at September 30, 1999.
As part of the Visitcom acquisition, youticket.com assumed debt and
loans of $179,000. These were interest free. All of the outstanding debt and
loans at December 31, 1998 have been converted into common stock The total
number of common shares issued in consideration of these conversions is 380,000
shares of common stock.
The aggregate debt and loans from shareholders at September 30, 1999
was $293,750 and interest expense for the nine months then ended was $2,520. All
of the outstanding debt and loans at September 30, 1999 have been converted into
common stock. The total number of common shares issued in consideration of these
conversions is 598,412 shares of common stock.
Since September 30, 1999, our operations have been funded primarily by
the sale of common stock. On November 19, 1999 youticket.com sold 300,000 shares
of common stock for $0.50 per share and obtained $150,000 in cash. On December
17th, 1999 youticket.com entered into a two year convertible promissory note
with a shareholder and received $125,000. The note bears interest at the annual
rate of 10% payable at the maturity date.
We are currently seeking additional financing through the private
placement of common stock and/or debt. We believe the private placements will be
with individual investors who are "accredited investors." The terms of these
arrangements are still being negotiated and are contingent on many factors,
including determination of the final terms, due diligence by the purchasers,
regulatory compliance and obtaining the commitment of the investors. Funding is
also dependent on our business and financial prospects. No assurance can be
given that we will obtain any portion or all of these funds.
We have recently restructured our business operations. We no longer
operate any ticketing booths and focus our efforts primarily on e-commerce sales
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via our web site. As a result of this shift in strategy, we have reduced our
revenues, cost of revenues and selling, general and administrative expenses.
We will require additional financing to continue to develop our
business. Principally funds are required for web site development and marketing,
strategic acquisitions and operating losses. If we do not increase our income or
obtain funding, we will not be able to continue our business. Management cannot
determine how long we will be required to fund operational losses and our other
activities with funds from the sale of securities. Management believes the
amount of funds required now and in the future will be substantial. Except as
discussed above, we do not have any regular source of financing, including no
bank or private lending sources, or equity capital sources. No assurance can be
given that we will be able to develop sources of financing in the future when
funds are needed or on acceptable terms.
Year 2000
Overview
We have evaluated the potential impact of the situation commonly
referred to as the "Year 2000 Issue". Y2K concerns the inability of information
systems, primarily computer software programs, to properly recognize and process
date sensitive information relating to the year 2000 and beyond. Many of the
world's computer systems currently record years in a two-digit format. These
computer systems will be unable to property interpret dates beyond the year
1999, which could lead to business disruptions in the U.S. and internationally.
The potential costs and uncertainties associated with Y2K will depend on a
number of factors, including software, hardware and the nature of the industry
in which a company operates.
Accounting and Ticketing Systems
Because we have recently upgraded our accounting systems, and our
management believes that the computer programs it purchases are Y2K compliant,
our management believes these systems and programs are Y2K compliant. In
addition, management uses Ticketmaster's ticketing system, and they have been
informed by Ticketmaster that it is Y2K compliant for many of the our critical
computer needs.
Other Entity Compliance
We engage in electronic data interchange with other entities. The
entities with which we exchange data with are Y2K compliant. Tangently, however,
the failure of other entities to be Y2K compliant may cause our systems issues,
none of which are yet apparent to our management.
Contingency Planning
Our management does not have a contingency plan for its computer
systems that may be found not to be Y2K compliant. Management does not have a
contingency plan in the event a critical service, supplier or customer will not
be Y2K compliant.
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<PAGE>
Cost of Year 2000 Compliance
We have not spent any amount on Y2K compliance. For the future, we do
not expect to spend any material amount on Y2K compliance.
ITEM 3. DESCRIPTION OF PROPERTY
Our executive offices are located at 4420 S. Arville, Suites 13 & 14 in
Las Vegas, Nevada and our telephone number is (702) 876-8200. We rent this space
under a lease that expires in April 2000. The lease requires us to pay $1,159
per month during the term. We believe that the current office and our other
facilities are adequate to meet our needs into the near future.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the
beneficial ownership of shares of the common stock by (1) each person known to
be the owner of more than 5% of the outstanding shares of common stock, (2) each
director and (3) all executive officers and directors as a group. The
information is as of December 17, 1999, and it is based on information obtained
from each of the below named persons. On December 17, 1999 there were 14,951,272
shares of common stock outstanding.
Percent of
Number of Shares of Ownership of
Common Stock Common Stock
Name of Beneficial Owner (1) Beneficially* Owned Outstanding
- ---------------------------- ------------------- -----------
LeAnna Sidhu (2) 967,833 6.4%
Virginia Thompson (3) 25,000 0.2%
Alexander H. Williams __ 0.0%
DYDX Consulting, LLC (4) 1,899,220 12.7%
ZDG Investments Limited 1,431,360 9.8%
David Roff 1,017,096 6.8%
Al Landau 1,007,096 6.7%
Joel Roff 905,000 6.1%
Elizabeth Barbara Wells 3,000,000 20.1%
Directors and officers as a
group (3 persons) (5) 922,833 6.6%
* Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
issuable upon the exercise of options or warrants currently exercisable, or
exercisable or convertible within 60 days, are deemed outstanding for
computing the percentage ownership of the person holding such options or
warrants but are not deemed outstanding for computing the percentage
ownership of any other person.
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<PAGE>
(1) The address for each of LeAnna Sidhu, Virginia Thompson and Alexander H.
Williams is c/o 4420 S. Arville, Suites 13 &14, Las Vegas, Nevada 89103.
The address for each of ZDG Investments Limited, David Roff, Al Landau and
Joel Roff is c/o133 Richmond Street West, Suite 401, Toronto, Ontario, M5H
2L3. The address for DYDX LLC is 7300 N. Lehigh Avenue, Niles, IL 60714.
The address of Elizabeth Barbara Wells is 5304 Painted Lakes Way, Las
Vegas, Nevada 89129.
(2) Includes 877,833 shares owned by Catalyst Capital, LLC, a Nevada Limited
Liability Company, of which Ms. Sidhu is a member and a manager. Includes a
vested option to purchase 30,000 shares of common stock. Includes 60,000
shares subject to an employee option agreement which are currently
exercisable but does not include 300,000 shares subject to the employee
option agreement which are not currently exercisable vesting at the rate of
30,000 per month while Ms Sidhu is employed by us during 1999.
(3) Excludes 75,000 shares subject to an option agreement which are not
currently exercisable.
(4) Includes 248,000 shares owned by DYDX Corporation, an Illinois corporation.
DYDX Consulting, LLC and DYDX Corporation are owned by Nikolas Konstant.
(5) See note 2 for the shares included and excluded that are subject to
employee options.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our directors and officers as set forth in the table below.
Name Age Position
- ---- --- ---------
LeAnna Sidhu 33 Chairperson and President
Virginia Thompson 33 Treasurer and Director
Alexander H. Williams 35 Secretary and Director
Ms. LeAnna Sidhu has been president and chairperson since December,
1999. Prior to joining our company, during 1998 and 1999 Ms. Sidhu was assistant
director of advertising for both Bally's Hotel & Casino and the Paris Hotel and
Casino where she supervised the advertising launch of the new Paris Resort,
including their website. From 1992 to 1997 Ms. Sidhu worked for Pour Le Bebe
Inc., who operated the Baby Guess, Guess Kids and Guess Home apparel businesses
under license from Guess. Ms. Sidhu was the vice president of advertising. She
supervised the launch of the Guess Home business and numerous product line
launches for Baby Guess and Guess Kids. Ms. Sidhu attended Cal State University
at Sacramento.
Ms. Virginia Thompson has been the treasurer and a director since May
1999. Ms. Thompson also is the President of Tusk Studio, which she founded in
1990. In 1993, Ms. Thompson was one of two people who initially designed Las
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<PAGE>
Vegas Magazine. In 1995, she and a partner became owners of Las Vegas Magazine,
and she currently serves as Publisher and President of the magazine. Ms.
Thompson has a Bachelor of Arts degree from Montana State University.
Mr. Alexander H. Williams has been the secretary and a director of our
company since December 1999. He is president of Hazard Media, Inc., which he
founded in 1999. Mr. Williams advises Internet companies in marketing,
communications and business development. From 1997 to 1999, Mr. Williams worked
for Mentor Graphics, a technology company that develops systems and software
solutions for the world's largest semiconductor and electronics companies. Mr.
Williams was a strategic marketing manager for Mentor Graphics and worked more
than a year as the company's corporate writer, working on an interim basis as
the director of worldwide communications. From 1996 to 1997, Mr. Williams was
the business anchor in Portland, Oregon for KPTV and The Business Journal. From
1998 to 1996, Mr. Williams was a journalist, covering news for The Augusta
Chronicle, Times Herald-Record and HFN, a trade magazine for the home
furnishings industry. He also freelanced for Jupiter Communications and served
as the local reporter for Apple Computer's digital newspaper, broadcast at
Woodstock '94. Mr. Williams has a master of journalism degree from Northwestern
University's Medill School of Journalism and a bachelor of arts degree in french
literature from the University of Denver.
Board Meetings and Committees
During the period January 1, 1999 to November 30, 1999, the board of
directors met on 2 occasions and took written action on 18 occasions. All the
members of the board of directors attended the meetings. The written actions
were by unanimous consent. The board of directors has established no committees.
Directors serve for a term of one year after election or until their earlier
resignation or their successor is elected or appointed and qualified.
ITEM 6. EXECUTIVE COMPENSATION
Employment Agreement
We employ Ms. Sidhu as the chairperson and president of the company
under a one-year employment contract. The agreement commenced December 20, 1999
and ends on December 20, 2000. The agreement is terminable at any time by either
Ms. Sidhu or us on thirty days advance written notice, for any reason. Ms. Sidhu
is paid a monthly salary of $3,000. When we raise an aggregate of $500,000 of
capital after December 20, 1999, her monthly salary will increase to $7,000 per
month. Ms. Sidhu receives a car allowance of $500 and a medical allowance of
$500 until we offer a paid, comprehensive medical plan. We have also entered
into a separate indemnification agreement with Ms. Sidhu.
We granted an option under our stock option plan to Ms Sidhu in
connection with her employment as the chairperson and president. The option is
for an aggregate of 360,000 shares of common stock. The option vests at the rate
of 30,000 shares per month during her employment with us, commencing December
14, 1999. Once vested the option is exercisable at $.25 for seven years from the
vesting date. If Ms. Sidhu's employment is terminated for any reason, unvested
options will terminate and not be exercisable, but vested options will remain
exercisable for the seven year period.
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<PAGE>
Compensation of Other Officers
We currently do not pay any cash salaries to Ms. Virginia Thompson or
Mr. Alexander H. Williams for their services as officers or directors. We,
however, have issued Ms. Thompson an option to acquire up to 100,000 shares of
common stock of which 25,000 are vested and the balance vests in three equal
instalments in June 2000, December 2000 and June 2001. The exercise price is
$.2815 per share and they are exercisable until June 2004.
Remuneration of the Board of Directors
A director who is an employee does not receive any cash compensation as
a director. There is no plan in place for compensation of persons who are
directors who are not employees of the Company.
Stock Options
1999 Performance Equity Plan
On September 30, 1999, the board of directors adopted the 1999
Performance Equity Plan covering 3,000,000 shares of common stock. This plan is
subject to the approval of the stockholders prior to September 30, 2000. Under
the plan, we may issue awards to our directors, officers, employees and
consultants. The awards include stock options, restricted stock, deferred stock,
stock appreciation rights, reload options and other stock based awards. The plan
will terminate when there are no more shares of common stock available for
issuance or on September 30, 2009. The plan is administered by the board of
directors or a committee of the board of directors. These bodies have the
authority to determine the terms of any specific award, in compliance with the
general terms of the plan. Currently, there are 720,000 shares of common stock
reserved for outstanding awards under the plan including those issued to Ms.
Sidhu and Ms. Thompson. All of these awards are stock options, purchasable at
prices ranging from $.25 to $.2815 per share and exercisable until various dates
the last of which is in 2006.
Other Stock Options, Warrants and Convertible Securities
In addition to the outstanding awards under the 1999 Performance Equity
Plan and the options issued or issuable to Reservision, youticket.com has issued
options to acquire up to 615,000 shares of common stock. Of these options,
15,000 shares are purchasable at $.25 and 600,000 shares are purchasable at
$.3125. These options expire at different dates in 2004.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 8. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The authorized capital stock consists of 100,000,000 shares of capital
stock of which all the shares are common stock, $0.0001 par value. As of
December 17, 1999 there are 14,951,272 shares of common stock issued and
outstanding.
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<PAGE>
Common Stock
The holders of common stock are entitled to one vote per share on all
matters submitted to a vote of the shareholders. In addition, the holders are
entitled to receive ratably dividends, if any, as may be declared from time to
time by the board of directors out of legally available funds. In the event of
our dissolution, liquidation or winding-up, the holders of common stock are
entitled to share ratably in all assets remaining after payment of all our
liabilities and subject to the prior distribution rights of any preferred stock
that may be outstanding at that time. The holders of common stock do not have
cumulative voting rights or preemptive or other rights to acquire or subscribe
for additional, unissued or treasury shares, which means that the holders of
more than 50% of such outstanding shares, voting at an election of directors can
elect all the directors on the board of directors if they so choose and, in such
event, the holders of the remaining shares will not be able to elect any of the
directors. All outstanding shares of common stock are, and when issued, the
shares of common stock offered hereby, are fully paid and non-assessable.
Stock Transfer Agent
The stock transfer agent for the common stock is Olde Monmouth Stock
Transfer Co., Inc., 77 Memorial Parkway, Suite 101, Atlantic Highlands, New
Jersey 07716.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER STOCKHOLDER MATTERS
Market Information
Our common stock is traded on the OTC Bulletin Board under the symbol
UTIX. Our common stock is only traded on a limited or sporadic basis and this
should not be deemed to constitute an established public trading market. There
is no assurance that the common stock will be actively traded in the future.
Therefore, there can be no assurance that there will be liquidity in the common
stock.
Below is a table indicating the range of high and low bid information
for the common stock for each full quarterly period within the two most recent
fiscal years and for the first three quarters of 1999, the only quarters during
which the common stock has been publicly traded. This information was obtained
from Reuters, PLC.
Quarterly Period High Low
- ---------------- ----- ----
Fiscal Year 1999
Jan. 1 - Mar. 31 2.00 .375
Apr. 1 - Jun. 30 1.125 .19
Jul. 1 - Sep. 30 1.00 .281
Oct. 1 - Dec. 17 .25 .375
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<PAGE>
Holders
As of November 30, 1999, there were 39 holders of record of the common
stock.
Dividend Policy
We have never declared or paid cash dividends on the common stock and
anticipate that all future earnings will be retained for working capital and
business expansion. The payment of any future dividends will be at the sole
discretion of the board of directors and will depend upon, among other things,
future earnings, capital requirements, our financial condition and general
business conditions. Therefore, there can be no assurance that any dividends on
the common stock will be paid in the future.
ITEM 2. LEGAL PROCEEDINGS
Internal Revenue Service
The Internal Revenue Service brought an administrative claim in
September 1999 against Visitcom for unpaid payroll taxes from June 1996 through
June 1999 in the amount of $66,856.84. We have proposed a plan of repayment of
$10,000 as an initial payment and $5,000 thereafter per month until the payroll
tax liability and penalties are satisfied in full. While we are current in the
payments under the plan, the IRS will not seek collection of the full tax
amount. The IRS has agreed to consider this plan once we provide them with
audited financial statements of our consolidated company.
Steve Notario/RSVP Ticketing Contract Dispute
On July 23, 1999, Mr. Steven Notario notified Visitcom that he was owed
$32,257.62 as of July 31, 1999 derived from our RSVP Ticketing operations. Mr.
Notario alleges that he was employed to establish the RSVP Ticketing division
for the purpose of selling high-end show tickets in Las Vegas for a split of the
profits from all tickets sold. We believe that the amount of profit from this
business was substantially less than the asserted amount due to the number of
returned tickets and credit card charge backs. We intend to vigorously defend
any litigation that may result from this dispute.
Get Ranked Payable
Get Ranked, an Internet search engine placement provider, has notified
Visitcom that it is owed $13,013.34 and will discontinue services and pursue
collection remedies unless arrangements are made to satisfy their outstanding
invoice. We are reviewing the contract to verify the amount of this invoice and
the productivity of their services.
New Century Productions
Visitcom sub-leases a ticket booth from New Century Productions at the
Union Plaza in Las Vegas. On or about October 1, 1999, New Century served
Visitcom with a five day notice to pay back rent or in the alternative to quit.
The amount of back rent claimed is approximately $20,000. We have quit the
location.
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<PAGE>
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
BDO Seidman L.L.P., certified public accountants, were engaged by us on
November 4, 1999 as our independent accountants. Barry Friedman, CPA was
employed as the independent accountant prior to November 4, 1999 for an audit
performed November 27, 1998. We are unaware of any disagreements or other
issues, which are required to be disclosed by the rules and regulations
applicable to this Form 10-SB.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
(1) On May 9, 1996 we issued 25,000 as our organizational shares to our
founding shareholders. On November 19, 1998, these were split on the basis of
100 for 1 share.
(2) On May 5, 1999 we issued 672,860 shares to a director for the
conversion of then outstanding debt of $16,822. The exemption claimed from
registration under the Securities Act of 1993 was pursuant to Rule 504 of
Regulation D.
(3) On May 12, 1999, we issued 672,860 shares of common stock for the
conversion of outstanding debt of $16,821.50. We issued the shares to one person
pursuant to Section 4(2) of the Securities Act of 1933.
(4) On June 30, 1999, we issued promissory notes to three persons in
the aggregate amount of $100,000. These notes were issued pursuant to Section
4(2) of the Securities Act of 1933. These notes were converted into common stock
on November 19, 1999 (see below).
(5) On July 2, 1999, we issued 14,327,140 shares of common stock
pursuant to an Agreement and Plan of Reorganization. Under this agreement, we
acquired Visitcom, Inc. as a wholly-owned subsidiary. We issued the shares to
one person pursuant to Section 4(2) of the Securities Act of 1933. Subsequent to
the share issuance, the number of shares was reduced to 3,000,000 to adjust for
changes in the representations and warranties made by Visitcom, Inc. and its
owners. The 11,327,140 shares previously issued were returned to the capital of
the company and are being held as treasury shares.
(6) On September 3, 1999, we issued promissory notes to two persons in
the aggregate amount of $193,750. These notes were issued pursuant to Section
4(2) of the Securities Act of 1933. These notes were converted into common stock
on November 19, 1999 (see below).
(7) On September 14, 1999, we issued 380,000 shares of common stock as
consideration for settlement of outstanding debt of $204,000. We issued the
shares to one person pursuant to Section 4(2) of the Securities Act of 1933.
(8) On November 19, 1999, we issued 300,000 shares of common stock to
four accredited investors for an aggregate of $150,000, pursuant to individual
subscription agreements. We issued the shares pursuant to Section 4(2) of the
Securities Act of 1933.
(9) On November 19, 1999, we issued 598,412 shares of common stock for
the conversion of an aggregate of $299,206 of debt and accrued interest due to
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<PAGE>
two individuals and a limited liability company. We issued the shares pursuant
to Section 4(2) of the Securities Act of 1933.
(10) On December 17, 1999, we issued a convertible promissory note in
the amount of $125,000 convertible into shares of common stock, to a corporation
that is a shareholder. The principal and interest are convertible at a rate
equal to the greater of 60% of the average closing bid price of a share of
common stock for the five days ending two days prior to the conversion or $.005.
The note was issued pursuant to Section 4(2) of the Securities Act of 1933.
All the proceeds of the above offerings, unless otherwise indicated,
were used for general working capital purposes.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection 1 of Section 78.751 of Chapter 78 of the Nevada General
Corporations Law empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred 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 proceedings, 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, does not, of itself, create a
presumption that the person did not act in good faith in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation and that, with respect to any criminal action or proceeding, he had
reasonable cause to believe his action was unlawful.
Subsection 2 of Section 78.751 of the Nevada corporate law empowers a
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that he acted in any of the capacities set forth above, against expenses,
including amounts paid in settlement and attorneys' fees, actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in accordance with the standard set forth above,
except that no indemnification may be made in respect of any claim, issue or
mater as to which such person shall have been adjudged by a court of competent
jurisdiction after exhaustion of all appeals therefrom to be liable to the
corporation or for amounts paid in settlement to the corporation unless and only
to the extent that the court in which such action or suit was brought or other
court of competent jurisdiction determines that, in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
Section 78.751 of the Nevada corporate law further provides that, to
the extent a director or officer of a corporation has been successful on the
merits or otherwise in the defense of any action, suit or proceeding referred to
in subsection (1) and (2), or in the defense of any claim,
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<PAGE>
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith; that indemnification provided for by Section 78.751 of the Nevada
corporate law shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled and that the scope of indemnification shall
continue as to directors, officers, employees or agents who have ceased to hold
such positions, and to their heirs, executors and administrators. Finally,
Section 78.752 of the Nevada corporate law empowers the corporation to purchase
and maintain insurance on behalf of a director, officer, employee or agent of
the corporation against any liability asserted against him or incurred by him in
any such capacity or arising out of his status as such whether or not the
corporation would have the authority to indemnify him against such liabilities
and expenses.
Our bylaws provide that directors and officers will not be personally
liable for any of our obligations or for any breach duties or obligations
arising out of any acts or conduct of the director or officer performed for or
on behalf of us. We will indemnify and hold harmless each person and his heirs
and administrators who shall serve at any time hereafter as a director or
officer from and against any and all claims, judgments and liabilities to which
they become subject by reason of having been a director or officer, or by reason
of any action alleged to have been taken or omitted to have been taken by him as
a director or officer. We will reimburse the director or officer for all legal
or other expenses reasonably incurred in connection with any claim or liability;
however, those persons will not be indemnified against, or be reimbursed for,
any expense incurred in connection with any claim or liability arising out of
their own negligence or willful misconduct.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling our company
pursuant to the foregoing provisions, we have been informed that in the opinion
of the SEC, indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. In the event that a claim for
indemnification against liabilities, other than the payment by the company of
expenses incurred by a director, officer or controlling person in successful
defense of an y action, suit or proceeding, is asserted by such director,
officer or controlling person in connection with the securities being offered or
sold, we will, unless in the opinion of its counsel that the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the federal securities laws, and will be governed by the final
adjudication of such case.
We do not have any directors or officers liability insurance. We have
entered into an indemnification agreement with Ms. Sidhu.
PART F/S
Our financial statements are included in this report beginning on page
F-1, immediately following in this section.
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<PAGE>
YOUTICKET.COM, INC.
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1998
AND FOR THE NINE MONTH PERIOD
ENDED SEPTEMBER 30, 1998 AND 1999
F-1
<PAGE>
Youticket.com, Inc.
Index to Consolidated Financial Statements
Report of Independent Certified Public Accountants F-3
Consolidated Financial Statements
Consolidated Balance Sheets F-4
Consolidated Statements of Operations F-5
Consolidated Statements of Shareholders' Equity F-6
Consolidated Statements of Cash Flows F-7
Notes to Consolidated Financial Statements F-8
F-2
<PAGE>
Report on Independent Certified Public Accountants
To the Shareholders of
Youticket.com, Inc.
Las Vegas, Nevada
We have audited the accompanying consolidated balance sheets of Youticket.com,
Inc. as of December 31, 1997 and 1998 and the related statements of operation,
shareholders' equity and cash flows for each of the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation
of the financial statements. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements, referred to above,
present fairly, in all material respects, the financial position of
Youticket.com, Inc., as of December 31, 1997 and 1998 and the results of its
operations and cash flows for each of the years then ended in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the significant losses of the Company for the year ended
December 31, 1998, raise substantial doubt about its ability to continue as a
going concern. Management's plans concerning these matters are described in Note
1. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
BDO, Seidman LLP
November 2, 1999
Los Angeles, California
F-3
<PAGE>
Youticket.com
Consolidated Balance Sheets
<TABLE>
December 31, September 30,
------------------------------
1997 1998 1999
- --------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Assets
Current assets
Cash $ - $ - $ 43,551
Accounts receivable - - 3,473
Other assets - - 16,918
- --------------------------------------------------------------------------------------------------------------------
Total current assets - - 63,942
- --------------------------------------------------------------------------------------------------------------------
Property and equipment, net (Note 3) - - 7,407
Goodwill, net of amortization of $43,022 (Note 8) - - 1,161,601
- --------------------------------------------------------------------------------------------------------------------
Total assets $ - $ - $ 1,232,950
- --------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ - $ - $ 291,293
Other accrued liabilities - - 83,624
Accrued compensation - - 66,860
Related party debt (Note 4) - - 293,750
- --------------------------------------------------------------------------------------------------------------------
Total current liabilities - - 735,527
- --------------------------------------------------------------------------------------------------------------------
Commitments and contingencies (Note 5)
Shareholders' equity
Common stock, $0.0001 par value, 100,000,000 shares
authorized, 14,052,860 shares issued and
outstanding at September 30, 1999, 10,000,000 in
1997 and 1998 2,500 250 351
Additional paid in capital - 2,250 1,124,081
Treasury stock (Note 8) - - (193,750 )
Accumulated deficit (2,500 ) (2,500 ) (433,259 )
- --------------------------------------------------------------------------------------------------------------------
Total shareholder's equity - - 497,423
- --------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ - $ - $ 1,232,950
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
Youticket.com
Consolidated Statements of Operations
<TABLE>
Nine Months
Years Ended Ended
December 31, September 30,
--------------------------------
1997 1998 1999
- --------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Revenue $ - $ - $ 72,148
Cost of revenue - - 51,494
- --------------------------------------------------------------------------------------------------------------------
Gross profit - - 20,654
Selling, general and administrative expenses - - 408,391
Amortization of goodwill - - 43,022
- --------------------------------------------------------------------------------------------------------------------
Net loss $ - $ - $ (430,759 )
- --------------------------------------------------------------------------------------------------------------------
Net loss per common share - basic and diluted
(Note 2) - - $ (0.03 )
- --------------------------------------------------------------------------------------------------------------------
Weighted average number of common shares
outstanding 10,000,000 10,000,000 14,058,342
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
Youticket.com
Consolidated Statements of Shareholders' Equity
<TABLE>
Additional Total
Common Stock Paid-In Treasury Stock Accumulated Shareholders'
----------------------- ------------------------
Shares Amount Capital Shares Amount Deficit Equity
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1997 25,000 $ 2,500 $ - - $ - $ (2,500) $ -
Net loss for the year - - - - - - -
- ---------------------------------------------------------------------------------------------------------------------------
Balance, December 31,
1997 25,000 2,500 - - - (2,500) -
Changed par value from
no par value to $0.0001 - (2,498) 2,498 - - - -
Stock split 100:1 2,475,000 248 (248) - - - -
Net loss for the year - - - - - - -
- ---------------------------------------------------------------------------------------------------------------------------
Balance, December 31,
1998 2,500,000 250 2,250 - - (2,500) -
Stock split 4:1 7,500,000 - - - - - -
Common stock issued to a
related party (Note
4) (Unaudited) 672,860 17 168,198 - - - 168,215
Common stock issued for
business acquisition
(Note 8) (Unaudited) 14,327,140 358 3,581,427 - - 3,581,785
Common stock repurchased
(Note 8) (Unaudited) (11,327,140) (283) (2,831,785) (11,327,140) (193,750) - (3,025,818)
Conversion of debt to
common stock (Note 4)
(Unaudited) 380,000 9 203,991 - - - 204,000
Net loss - - - - - (430,759) (430,759)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, September 30,
1999 (unaudited) 14,052,860 $ 351 $ 1,124,081 (11,327,140) $ (193,750) $ (433,259) $ 497,423
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
Youticket.com
Consolidated Statements of Cash Flows
<TABLE>
Increase (Decrease) in Cash Nine Months
Years Ended Ended
December 31, September 30,
----------------------------
1997 1998 1999
- --------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ - $ - $ (430,759 )
Adjustments to reconcile net loss to net cash
(used in) operating activities:
Depreciation and amortization - - 44,906
Non-cash charges related to equity issuances
(Note 4) - - 151,376
Changes in operating assets and liabilities:
Accounts receivable - - (3,473 )
Other assets - - (16,918 )
Accounts payable - - 31,113
Other accrued liabilities - - 83,624
Accrued compensation - - 66,860
- --------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities - - (73,271 )
Cash flows from financing activities
Capital contribution (Note 4) - - 16,822
Proceeds from long-term related party debt
(Note 4) - - 293,750
Purchase of treasury stock (Note 8) - - (193,750 )
- --------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities - - 116,822
Increase in cash and cash equivalents - - 43,551
Cash and cash equivalents, beginning
of year - - -
- --------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year $ - $ - $ 43,551
- --------------------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash flow
Information
Excess over fair value of assets acquired (Note 8) $ - $ - $ 1,204,623
Debt converted to equity (Note 4) - - 204,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
F-7
<PAGE>
Youticket.com
Notes to Consolidated Financial Statements
Information with respect to the nine months ended September 30,
1999 is unaudited
Note 1 - Nature of Business
The Company
The Company was organized May 9, 1996, under the laws of the State of Nevada, as
BNE Associates, Inc.
On May 9, 1996, the Company issued 25,000 shares of its no par value common
stock for cash of $2,500.
On November 19, 1998, the State of Nevada approved the Company's restated
Articles of Incorporation, which increased its capitalization from 25,000 common
shares to 50,000,000 common shares. The par value was changed from no par value
to $.0001. On August 27, 1999, the Company increased the number of authorized
common shares from 50,000,000 shares to 100,000,000 shares.
On November 19, 1998, the Company forward split its common stock 100:1, thus
increasing the number of outstanding common shares from 25,000 shares to
2,500,000 shares, in 1999 the Company also did a 4:1 split increasing the number
of common shares to 10,000,000.
On January 11, 1999, the Company forward split its common stock 4:1, thus
increasing the number of outstanding common shares from 2,500,000 shares to
10,000,000 shares.
On June 30, 1999, the Company acquired Visitcom, Inc. ("Visitcom") (see Note 8)
and the Company changed its name to Youticket.com, Inc., (the "Company").
The Company operates an Internet show and tour ticketing website,
www.youticket.com, for the Las Vegas market. Through its wholly owned subsidiary
Visitcom, the Company also provides show and tour ticketing services to the
Venetial Hotel, the Union Plaza Hotel and Alamo Car Rental Service in
conjunction with Ticketmaster who provides the Company with both systems and
market support. In addition to selling tickets through its website and ticket
outlets, Youticket.com also enables customers to purchase its products via its
toll-free telephone numbers.
Going Concern
The Company has incurred significant operating losses and has working capital,
which raises substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of these uncertainties. Management's plans for
correcting these issues include raising equity through private placement
offerings, focusing the Company's business on their website business and
restructuring its operations to reduce operating expenses. However, there can be
no assurances that the Company will be able to secure additional capital or that
if such capital is available, whether the terms or conditions will be acceptable
to the Company.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, Visitcom, Inc. All significant intercompany
transactions and balances are eliminated.
F-8
<PAGE>
Youticket.com
Notes to Consolidated Financial Statements
Information with respect to the nine months ended September 30,
1999 is unaudited
Note 2 - Summary of Significant Accounting Policies
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation and
amortization which is computed using the straight-line method over estimated
lives of five to seven years. The Company capitalizes expenditures which
materially increase asset lives and charges ordinary repairs and maintenance to
operations as incurred.
Property and equipment are reviewed for impairment whenever events or
circumstances indicate that the assets' undiscounted expected cash flows are not
sufficient to recover its carrying amount. Impairment losses, if any, are
recorded currently.
Income Taxes
The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of events that have been recognized in the Company's
financial statements or tax returns. Deferred tax liabilities and assets are
determined based on the difference between the financial statement carrying
amounts and tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to reverse.
Loss Per Share
Basic earnings per share is calculated by dividing net income (loss) by the
weighted average number of common shares outstanding during the period. Diluted
earnings per share is calculated by dividing net income (loss) by the basic
shares outstanding and all dilutive securities, including stock options, but
does not include the impact of potential common shares which would be
antidilutive. These dilutive securities were anti-dilutive in 1999.
For the nine months ended September 30, 1999, potential dilutive securities
representing 880,000 outstanding stock options are not included in the earnings
per share calculation since their effect would be antidilutive.
Stock-Based Compensation
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
123, "Accounting for Stock-Based Compensation", which establishes a fair value
method of accounting for stock-based compensation plans. The provisions of this
Statement allow companies to either expense the estimated fair value of stock
options or to continue to follow the intrinsic value method set forth in
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees", but to disclose the pro forma effect on net income (loss) and net
income (loss) per share had the fair value of the stock options been expensed.
The Company has elected to continue to account for stock-based compensation
plans utilizing the intrinsic value method. Accordingly, the compensation cost
for stock options is measured as the excess, if any, of the fair market price of
the Company's stock at the date of grant above the amount an employee must pay
to acquire the stock.
F-9
<PAGE>
Youticket.com
Notes to Consolidated Financial Statements
Information with respect to the nine months ended September 30,
1999 is unaudited
Note 2 - Summary of Significant Accounting Policies (Continued)
In accordance with this Statement, the Company has provided footnote disclosure
with respect to stock-based employee compensation. The cost of stock-based
employee compensation is measured at the grant date based on the value of the
award and is recognized over the vesting period. The value of the stock-based
award is determined using a pricing model whereby compensation cost is the
excess of the fair value of the award as determined by the pricing model at
grant date or other measurement date above the amount an employee must pay to
acquire the stock.
Concentration of Credit Risk
Financial instruments which potentially expose the Company to concentration of
credit risk consist primarily of cash and cash equivalents and accounts
receivable. The company places its cash and cash equivalents with major
financial institutions. At times, cash balances may be in excess of the amounts
insured by the Federal Deposit Insurance Corporation, however, management
believes the risk of loss to be minimal.
The Company provides credit, in the normal course of business, to various
customers. The Company conducts on-going credit evaluations but does not obtain
collateral or other forms of security. The Company believes its credit policies
do not result in significant adverse risk and do not expect significant credit
related losses.
Revenue Recognition
The Company generates revenues primarily from per ticket convenience fees
charged directly to consumers who order tickets through the Company's website,
telephone sales center or retail outlets. In addition, the Company charges a
handling fee to consumers for tickets sold by the Company. The Company
recognizes convenience fee and handling fee revenue from ticket sales at the
time the sale is made.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual amounts could differ from those estimates.
Fair Value of Financial Instruments
The carrying value of the Company's financial instruments, consisting primarily
of accounts receivable, accounts payable and debt, approximates fair value due
to the relatively short maturity of these instruments and the borrowing costs to
the Company.
F-10
<PAGE>
Youticket.com
Notes to Consolidated Financial Statements
Information with respect to the nine months ended September 30,
1999 is unaudited
Note 2 - Summary of Significant Accounting Policies (Continued)
Interim Financial Information
The interim financial statements for the nine months ended September 30, 1999
are unaudited. In the opinion of management, such statements reflect all
adjustments (consisting of normal recurring adjustments) necessary for fair
presentation of the results of the interim period. The results of operations for
the nine months ended September 30, 1999 are not necessarily indicative of the
results for the entire year.
Note 3 - Property and Equipment
Property and equipment consists of the following:
<TABLE>
Year Ended Nine Months
December 31, Ended Estimated
1998 1997 1999 Useful Life
- -------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
5 to 7
Computer and office equipment $ - $ - $ 8,383 years
Furniture and fixtures - - 5,430 5 years
- -------------------------------------------------------------------------------------------------------------------
13,813
Less accumulated depreciation - - 6,406
- -------------------------------------------------------------------------------------------------------------------
$ - - $ 7,407
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Note 4 - Related Party Transactions
On May 5, 1999, the Company issued 672,860 shares of Common Stock, with a fair
market value of $0.25 per share, to a Director in exchange for cash proceeds of
$16,822. As a result of this issuance the Company has recorded compensation
expense of $151,393, which is included in general and administrative expense.
On September 1, 1999, the Company granted 400,000 stock options with an exercise
price of $0.3125, which was the fair market value of the shares on the date of
the grant, to a consultant to the Company. These options vest immediately and
expire on August 31, 2004. On the same day, the Company granted an additional
480,000 stock options with an exercise price of $0.3125, which was the fair
market value of the shares on the date of the grant, to this consultant to the
Company. These options vest at a rate of 80,000 options per month with the first
vesting on September 30, 1999. Non-vested options are canceled if the consultant
terminates his agreement with the Company. These options have an expiration date
of five years after the vesting date. The consultant left the Company in
November 1999.
On June 30, 1999, the Company issued three promissory notes to shareholders of
the Company in the amounts of $70,000, $15,000 and $15,000 in exchange for cash.
These notes, which are secured by the assets of the Company, bear interest at a
rate of 10% per annum, and have a maturity date of January 31, 2000, and were
converted to equity in November 1999 (see Note 10).
F-11
<PAGE>
Youticket.com
Notes to Consolidated Financial Statements
Information with respect to the nine months ended September 30,
1999 is unaudited
Note 4 - Related Party Transactions (Continued)
On September 3, 1999, the Company issued two promissory notes of $96,875 each to
two shareholders of the Company in exchange for cash. These notes are secured by
11,327,140 shares of the Company's common stock, which were repurchased from the
previous owners of Visitcom. The promissory notes bear interest at a rate of 10%
per annum and are due on demand (see Note 10).
Note 5 - Income Taxes
At September 30, 1999, the Company has a net deferred asset of approximately
$251,000, which has been fully offset by a valuation allowance. The net deferred
tax asset is comprised principally of net operating loss carryforwards.
At September 30, 1999, the Company has a federal operating loss carryforwards of
approximately $628,000. These net operating losses expire at various dates
through 2019. The amounts of and benefits from net operating loss carryforwards
may be limited based upon changes in ownership of the Company.
Note 6 - Commitments and Contingencies
The Company may also be a party to legal claims arising in the normal course of
business. In the opinion of management, resolution of such matters will not have
a material adverse effect on the financial position as operating results of the
Company.
The Company leases office space under a non-cancelable operating lease. The
following table sets forth minimum payments due by year under this lease:
Operating
Years ending December 31, Leases
- ---------------------------------------------------------------------------
1999 $ 62,577
2000 10,477
- ---------------------------------------------------------------------------
Total minimum lease payments $ 73,054
- ---------------------------------------------------------------------------
Note 7 - Stock Options
During 1999, the Company received advances of $204,000 which was converted into
380,000 shares of the Company's common stock, in September 1999. Conversion
price is based on the fair market value of the Company's common stock as of the
date of the transaction.
In September 1999, the board of directors of the Company approved a performance
equity plan that authorizes up to 3,000,000 shares to be issued. The Company has
reserved 3,000,000 shares of Common Stock for issuance under this plan. No
options were granted under this plan at September 30, 1999. Options were granted
in December 1999 (see "Subsequent Event" Note 10).
F-12
<PAGE>
Youticket.com
Notes to Consolidated Financial Statements
Information with respect to the nine months ended September 30,
1999 is unaudited
Note 7 - Stock Options (Continued)
The Company has also granted options under a non-qualified plan.
Weighted
Average
Exercise
Activity under these plans are as follows: Shares Price
-----------------------------------------------------------------------------
Outstanding at December 31, 1998 - $ -
Granted 880,000 0.3125
Exercised - -
Canceled - -
-----------------------------------------------------------------------------
Outstanding at September 30, 1999
(Unaudited) 880,000 $ 0.3125
- -------------------------------------------------------------------------------
Additional information relating to stock options outstanding and exercisable at
September 30, 1999, summarized by exercise price are as follows:
<TABLE>
Exercisable
Outstanding Weighted Average Weighted Average
-------------------------------------------------- ---------------------------
Exercise Price Life Exercise Exercise
Per share Shares (Years) Price Shares Price
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 0.3125 880,000 4.92 $ 0.3125 480,000 $ 0.3125
</TABLE>
Stock Based Compensation
All stock options issued to employees have an exercise price not less than the
fair market value of the Common Stock on the date of grant, and in accounting
for such options utilizing the intrinsic value method there is no related
compensation expense recorded in the Company's financial statements. If
compensation cost for stock-based compensation had been determined based on the
fair market value of the stock options on their dates of grant in accordance
with SFAS 123, the Company's net loss for the nine months ended September 30,
1999 would have been increased to the pro forma amounts presented below:
September 30,
1999
-----------------------------------------------------------------------------
Net loss (unaudited):
As reported $ (430,759)
Pro forma $ (510,695)
Basic and diluted income per common share (unaudited):
As reported $ (0.03)
Pro forma $ (0.04)
F-13
<PAGE>
Youticket.com
Notes to Consolidated Financial Statements
Information with respect to the nine months ended September 30,
1999 is unaudited
Note 7 - Stock Options (Continued)
The fair value of option grants is estimated on the date of grant utilizing the
Black-Scholes option-pricing model with the following weighted average
assumptions for options granted during 1999; expected life of option of four to
five and a half years, expected volatility of 62%, risk free interest rate of 6%
and a 0% dividend yield. The weighted average fair value at the grant date for
stock options granted during 1999 is $0.325 per option.
Note 8 - Business Acquisition
On June 30, 1999, the Company acquired Visitcom, Inc. ("Visitcom"), a Las Vegas
show and tour ticketing service agency. The Company issued 14,327,140 shares of
its common stock to purchase Visitcom. The market value of these shares on the
date of this transaction was $0.25 per share. On September 3, 1999, the Company
repurchased 11,327,140 shares of the original issuance for 100,000 in cash and
300,000 shares purchased from existing shareholders for $93,750 in cash. The
transaction was accounted for as a purchase. The net purchase price of Visitcom
exceeded the fair value of the net assets acquired by $1,204,623, which is being
amortized on a straight line basis over seven years. The results of operations
of Visitcom are included in the accompanying financial statements from the date
of acquisition.
The following summarized unaudited pro forma financial information assumes the
acquisition had occurred on January 1, 1999. The unaudited proforma results are
not necessarily indicative of the results which might actually have been
obtained had the acquisition occurred as of January 1, nor are they intended to
be indicative of future results of operations.
<TABLE>
Year ended Nine months ended
December 31, 1998 September 30, 1999
----------------------------------------------------- -------------------------------------------------------
Proforma Proforma
Proforma Consolidated Proforma Consolidated
Youticket, Visitcom, Youticket, Visitcom, Adjustments Amounts
Inc. Inc. Adjustments Amounts Inc. Inc.
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $ - $ 767,163 $ - $ 767,163 $ 72,148 $ 178,148 $ - $ 250,296
Cost of
Revenue - 428,217 - 428,217 51,494 99,757 - 151,251
- -----------------------------------------------------------------------------------------------------------------------------
Gross Profit - 338,946 - 338,946 20,654 78,391 - 99,045
Selling and
administrative (1) (1)
expenses - 460,125 172,089 632,214 451,413 199,553 86,045 731,011
- -----------------------------------------------------------------------------------------------------------------------------
Net loss $ - $ (121,179) $ $ (293,268) $ (430,759) $ (121,162) $ $ (631,966)
- -----------------------------------------------------------------------------------------------------------------------------
Loss per common share - basic
and diluted $ (0.01 ) $ (0.02 ) $ (0.03 ) $ (0.04)
Shares used in computing
earnings per share 14,058,342 14,058,342 14,058,342 14,058,342
</TABLE>
(1) To amortize goodwill in connection with the purchase of Visitcom on a
straight-line basis over seven years.
F-14
<PAGE>
Youticket.com
Notes to Consolidated Financial Statements
Information with respect to the nine months ended September 30,
1999 is unaudited
Note 9 - Subsequent Events
In December 1999, the Company granted 720,000 stock options under the stock
option plan at an average exercise price of $.266 per option. The options expire
in December 2004.
In November 1999, the $293,750 in related party debt was converted into 598,412
shares of common stock.
In November 1999, the Company issued 300,000 shares of common stock for $150,000
in cash.
In November 1999, the Company entered into an agreement with a website
development consultant whereby the consultant will receive $3,500 per month and
granted the option to purchase 15,000 shares of common stock, at $.01 per share,
for each month of service performed.
In November 1999, the Company canceled 280,000 stock options it had granted to a
consultant.
F-15
<PAGE>
VISITCOM, INC.
-----------------------
Financial Statements
For the Years Ended December 31, 1998 and 1997
-----------------------
<PAGE>
VISITCOM, INC.
INDEX TO FINANCIAL STATEMENTS
Page
----
Report of independent certified public accountants 3
Financial statements
Balance sheets 4
Statements of operations 5
Statements of shareholder's Equity 6
Statements of cash flows 7
Notes to financial statements 8-11
2
<PAGE>
Report on Independent Certified Public Accountants
To the Shareholder of
Visitcom, Inc.
Las Vegas, Nevada
We have audited the accompanying consolidated balance sheets of Visitcom, Inc.
(the "Company") as of December 31, 1998 and 1997 and the related statements of
operation, shareholder's deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation
of the financial statements. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements, referred to above, present fairly, in
all material respects, the financial position of Visitcom, Inc. as of December
31, 1998 and 1997 and the results of its operations and cash flows for the years
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the significant losses, negative working capital and
shareholders' deficit of the Company as of December 31, 1998 raise substantial
doubt about its ability to continue as a going concern. Management's plans
concerning these matters are described in Note 1. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
BDO, Seidman LLP
November 2, 1999
Los Angeles, California
3
<PAGE>
VISITCOM, INC.
BALANCE SHEETS
<TABLE>
December 31,
-----------------------------------
1998 1997
<S> <C> <C>
Assets
Current assets
Cash $ - $ -
Accounts receivable 4,117 12,969
-----------------------------------
Total current assets 4,117 12,969
-----------------------------------
Property and equipment, net (Note 3) 8,991 -
-----------------------------------
$ 13,108 $ 12,969
-----------------------------------
Liabilities and Shareholder's Deficit
Current liabilities
Bank overdraft $ 3,094 $ 1,670
Accounts payable 118,638 53,496
Notes payable (Note 4) 179,000 154,000
Accrued compensation 45,910 16,158
-----------------------------------
Total current liabilities 346,642 225,324
-----------------------------------
Commitments and contingencies (Note 5)
Shareholder's deficit
Common stock, .$0.01 par value, 25,000 shares
authorized, 20,000 shares issued and outstanding 200 200
Accumulated deficit (333,734) (212,555)
-----------------------------------
Total shareholder's deficit (333,534) (212,355)
-----------------------------------
Total liabilities and shareholder's deficit $ 13,108 $ 12,969
-----------------------------------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
VISITCOM, INC.
STATEMENTS OF OPERATIONS
December 31,
-----------------------------------
1998 1997
-----------------------------------
Revenue $ 767,163 $ 239,780
Cost of revenue 428,217 119,360
-----------------------------------
Gross profit 338,946 120,420
Selling, general and
administrative expenses 460,125 190,948
-----------------------------------
Net loss $ (121,179) $ (70,528)
-----------------------------------
See accompanying notes to financial statements.
5
<PAGE>
VISITCOM, INC.
STATEMENTS OF SHAREHOLDER'S DEFICIT
<TABLE>
Total
Common Stock Accumulated Shareholder's
-------------------------------
Shares Amount Deficit Deficit
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, January 1, 1997 20,000 $ 200 $ (142,027 ) $ (141,827 )
Net loss for the year - - (70,528 ) (70,528 )
---------------------------------------------------------------------------
Balance, December 31, 1997 20,000 200 (212,555 ) (212,355 )
Net loss for the year - - (121,179 ) (121,179 )
---------------------------------------------------------------------------
Balance, December 31, 1998 20,000 $ 200 $ (333,734 ) $ (333,534 )
---------------------------------------------------------------------------
</TABLE>
6
<PAGE>
VISITCOM, INC.
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash
<TABLE>
December 31,
---------------------------------
1998 1997
-----------------------------------
<S> <C> <C>
Cash flows from operating activities
Net loss $ (121,179) $ (70,528)
Adjustments to reconcile net loss to net cash used in
provided by operating activities:
Depreciation and amortization 4,822 -
Changes in operating assets and
liabilities:
Accounts receivable 8,852 (12,969)
Accounts payable 65,142 39,884
Accrued compensation 29,752 16,158
-----------------------------------
Net cash used in operating activities (12,611) (27,455)
-----------------------------------
Cash flows from investing activities
Purchase of property and equipment (13,813) -
-----------------------------------
Net cash used in investing activities (13,813) -
-----------------------------------
Cash flows from financing activities
Bank overdraft 1,424 (1,545)
Proceeds from related party debt (Note 4) 25,000 29,000
-----------------------------------
Net cash provided by financing activities 26,424 27,455
-----------------------------------
Increase in cash and cash equivalents - -
Cash and cash equivalents, beginning
of year - -
-----------------------------------
Cash and cash equivalents, end of year $ - $ -
-----------------------------------
</TABLE>
7
<PAGE>
VISITCOM, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS
The Company
Visitcom, Inc. (the "Company") operates an Internet show and tour ticketing
website for the Las Vegas market. The Company also provides show and tour
ticketing services to the Venetial Hotel, in conjunction with Ticketmaster who
provides the Company with both systems and market support. In addition to
selling tickets through its website, the Company also enables customers to
purchase its products via its toll-free telephone numbers.
As of June 30, 1999, all of the shares of the Company were acquired by
Youticket.com, Inc. ("Youticket.com"). These financial statements do not reflect
the results of this acquisition. See Note 7.
Going Concern
The Company has incurred significant operating losses and has negative working
capital and shareholders' equity, which raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of these
uncertainties. Management's plans for correcting these issues include raising
equity through private placement offerings, focusing the Company's business on
their website business and restructuring its operations to reduce operating
expenses. However, there can be no assurance that the Company will be able to
secure additional capital or that if such capital is available, whether the
terms of condition would be acceptable to the Company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation and
amortization which is computed using the straight-line method over estimated
lives of five to seven years. The Company capitalizes expenditures which
materially increase asset lives and charges ordinary repairs and maintenance to
operations as incurred.
Property and equipment are reviewed for impairment whenever events or
circumstances indicate that the assets' undiscounted expected cash flows are not
sufficient to recover its carrying amount. Impairment losses, if any, are
recorded currently.
Income Taxes
The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of events that have been recognized in the Company's
financial statements or tax returns. Deferred tax liabilities and assets are
determined based on the difference between the financial statement carrying
amounts and tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to reverse.
8
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Concentration of Credit Risk
Financial instruments which potentially expose the Company to concentration of
credit risk consist primarily of cash and accounts receivable. The company
places its cash with major financial institutions. At times, cash balances may
be in excess of the amounts insured by the Federal Deposit Insurance
Corporation, however, management believes the risk of loss to be minimal.
The Company provides credit, in the normal course of business, to various
customers. The Company conducts on-going credit evaluations but does not obtain
collateral or other forms of security. The Company believes its credit policies
do not result in significant adverse risk and do not expect significant credit
related losses.
Revenue Recognition
The Company generates revenues primarily from per ticket convenience fees
charged directly to consumers who order tickets through the Company's website,
telephone sales center or retail outlets. In addition, the Company charges a
handling fee to consumers for tickets sold by the Company. The Company
recognizes convenience fee and handling fee revenue from ticket sales at the
time the sale is made.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual amounts could differ from those estimates.
Fair Value of Financial Instruments
The carrying value of the Company's financial instruments, consisting primarily
of accounts receivable, accounts payable and debt, approximates fair value due
to the relatively short maturity of these instruments and the borrowing costs to
the Company.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
December 31,
------------------------- Estimated
1998 1997 Useful Life
---------------------------------------------
Computer and office equipment $ 8,383 $ - 5 to 7 years
Furniture and fixtures 5,430 - 5 years
---------------------------------------------
13,813 -
Less accumulated depreciation 4,822 -
---------------------------------------------
$ 8,991 $ -
---------------------------------------------
9
<PAGE>
NOTE 4 - NOTES PAYABLE TRANSACTIONS
Since 1994, an individual has made various loans to the Company. These loans are
secured by the assets of the Company, are non-interest bearing and are due on
demand. As of December 31, 1998 and 1997, the outstanding balance on these loans
were $179,000 and $154,000. In September 1999, the entire loan balance of
$204,000 was converted into 380,000 shares of Youticket.com's common stock. The
conversion price was based on the fair market value of Youticket.com's common
stock as of the date of the transaction.
NOTE 5 - INCOME TAXES
At December 31, 1998 and 1997, the Company has net deferred tax assets of
approximately $97,000 and $48,000, respectively, which are fully offset by
valuation allowances. Net deferred tax assets are comprised principally of net
operating loss carryforwards.
At December 31 1998 and 1997, the Company has federal operating loss
carryforwards of approximately $242,000 and $121,000, respectively. These net
operating losses expire at various dates through 2018. The amounts of and
benefits from net operating loss carryforwards may be limited based upon changes
in ownership of the Company.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Commitments
The Company leases office space under a non-cancelable operating lease. The
following table sets forth minimum payments due by year under this lease:
Operating
Years ending December 31, Leases
- ---------------------------------- ------------
1999 $ 62,577
2000 10,477
------------
Total minimum lease payments $ 73,054
------------
Rent expense was $55,726 and $15,131 for the years ended December 31, 1998 and
1997.
NOTE 7 - SUBSEQUENT EVENT
On June 30, 1999, all of the shares of the Company were purchased by
Youticket.com, Inc. The Company was purchased for a total consideration of
3,000,000 shares of Youticket.com and $193,750 in cash.
10
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NOTE 8 - YEAR 2000 (UNAUDITED)
Like other companies, the Company could be adversely affected if its computer
systems or those that its suppliers or customers use, do not properly process
and calculate date-related information and data from the period surrounding and
including January 1, 2000. This is commonly known as the "Year 2000" issue.
Additionally, this issue could impact non-computer systems and devices. At this
time, because of the complexities involved in the issue, management cannot
provide assurances that the Year 2000 issue will not have an impact on the
Company's operations.
11
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
(a) Exhibits
3.1* Certificate of Incorporation, as amended, of youticket.com inc.
3.2* By-laws of the Registrant
4.1* Form of common stock certificate of youticket.com inc.
4.2* Convertible Promissory Note between youticket.com inc. and ZDG
Holdings, Inc.
10.1* Agreement between Visitcom, Inc. and Venetian Casino Resort LLC
10.2* Hardware and TM System User Agreement between Visitcom, Inc. and
Ticketmaster - Las Vegas.
10.3* Employment and Indemnification Agreements between youticket.com
inc. and LeAnna Sidhu
10.4* Reservision, Inc. Website Development Agreement
10.5* 1999 Performance Equity Plan
21.1* Subsidiaries of Registrant
27.1* Financial Data Schedule
* Filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on the 30th day of
December, 1999.
YOUTICKET.COM, INC.
/s/ LeAnna Sidhu
-----------------------
LeAnna Sidhu, President
ARTICLES OF INCORPORATION
OF
BNE ASSOCIATES INC.
FIRST. The name of the corporation is:
BNE ASSOCIATES INC.
SECOND. Its registered office in the State of Nevada is
located at 2533 North Carson Street, Carson City, Nevada 89706 that this
Corporation may maintain an office, or offices, in such other place within or
without the State of Nevada as may be from time o time designated by the Board
of Directors, or by the By-Laws of said Corporation. and that this Corporation
may conduct all Corporation business of every kind and nature, including the
holding of all meetings of Directors and Stockholders, outside the State of
Nevada as well as within the State of Nevada.
THIRD. The objects for which this Corporation is formed are:
To engage in any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be
conferred upon corporations by any existing law.
(B) May at any time exercise such rights, privileges and
powers, when not inconsistent with the purposes and objects for which this
corporation is organized.
(C) Shall have power to have succession by its corporate name
for the period limited in its certificate or articles of incorporation, and when
no period is limited, perpetually, or until dissolved and its affairs wound up
according to law.
(D) Shall have power to sue and be sued in any court of law or
equity.
(E) Shall have power to make contracts.
<PAGE>
(F) Shall have power to hold, purchase and convey real and
personal estate and to mortgage or lease any such real and personal estate with
its franchises. The power to hold real and personal estate shall include the
power to take the same by devise or bequest in the State of Nevada, or in any
other state, territory or country.
(G) Shall have power to appoint such officers and agents as
the affairs of the corporation shall require, and to allow them suitable
compensation.
(H) Shall have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada, for the
management, regulation and government of its affairs and property, the transfer
of its stock, the transaction of its business, and the calling and holding of
meetings of its stockholders.
(I) Shall have power to wind up and dissolve itself, or be
wound up or dissolved.
(J) Shall have power to adopt and use a common seal or
stamp, and alter the same at pleasure. The use of a seal or stamp by the
corporation on any corporate documents is not necessary. The corporation may use
a seal or stamp, if it desires, but such use or nonuse shall not in any way
affect the legality of the document.
(K) Shall have power to borrow money and contract debts when
necessary for the transaction of its business, or for the exercise of its
corporate rights, privileges or franchises, or for any other lawful purpose of
its incorporation; to issue bonds, promissory notes, bills of exchange,
debentures, and other obligations and evidences of indebtedness, payable at a
specified time or times, or payable upon the happening of a specified event or
events, whether secured by mortgage, pledge or otherwise, or unsecured, for
money borrowed, or in payment for property purchased, or acquired, or for any
other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell,
2
<PAGE>
assign, transfer, mortgage, pledge or otherwise dispose of the shares of the
capital stock of, or any bonds, securities or evidences of the indebtedness
created by, any other corporation or corporations of the State of Nevada, or any
other state or government, and, while owners of such stock, bonds, securities or
evidences of indebtedness, to exercise all the rights, powers and privileges of
ownership, including the right to vote if any.
(M) Shall have power to purchase, hold, sell and transfer
shares of its own capital stock, and use therefor its capital, capital surplus,
surplus, or other property or fund.
(N) Shall have power to conduct business, have one or more
offices, and hold, purchase, mortgage and convey real and personal property in
the State of Nevada, and in any of the several states, territories, possessions
and dependencies of the United States, the District of Columbia, and any foreign
countries.
(O) Shall have power to do all and everything necessary and
proper for the accomplishment of the objects enumerated in its certificate or
articles of incorporation, or any amendment thereof, or necessary or incidental
to the protection and benefit of the corporation, and, in general, to carry on
any lawful business necessary or incidental to the attainment of the objects of
the corporation, whether or not such business is similar in nature to the
objects set forth in the certificate or articles of incorporation of the
corporation, or any amendment thereof.
(P) Shall have power to make donations for the public welfare
or for charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or
limited, or joint ventures, in connection with any lawful activities, as may be
allowed by law.
FOURTH. That the total number of common stock authorized that
may be issued by the Corporation is TWENTY-FIVE THOUSAND (25,000) shares of
3
<PAGE>
stock without nominal or par value and no other class of stock shall be
authorized. Said shares may be issued by the corporation from time to tine for
such considerations as may be fixed by the Board of Directors.
FIFTH. The governing board of this corporation shall be known
as directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be provided by the By-Laws of this
Corporation, providing that the number of directors shall not be reduced to
fewer than one (1).
The name and post office address of the first board of
Directors shall be one (1) in number and listed as follows:
NAME POST OFFICE ADDRESS
---- --------------------
Patrick McMullen 2533 North Carson Street
Carson City, Nevada 89706
SIXTH. The capital stock, after the amount of the
subscription price, or par value, has been paid in, shall not be subject to
assessment to pay the debts of the corporation.
SEVENTH. The name and post office address of the Incorporator
signing the Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
---- -------------------
Patrick McMullen 2533 North Carson Street
Carson City, Nevada 89706
EIGHTH. The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the registered or statutory address of this
corporation in the state of Nevada, shall be:
2533 North Carson Street
Carson City, Nevada 89706
4
<PAGE>
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders,
to make, alter or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and
above its capital stock paid in; to authorize and cause to be executed,
mortgages and liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to
designate one (1) or more committees, each committee to consist of one or more
of the Directors of the Corporation, which, to the extent provided in the
resolution, or in the By-Laws of the Corporation, shall have and may exercise
the powers of the Board of Directors in the management of the business and
affairs of the Corporation. Such committee, or committees, shall have such name,
or names, as may be stated in the By-Laws of the Corporation, or as may be
determined from time to time by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the
Stockholders holding stock entitling them to exercise at least a majority of the
voting power given at a Stockholders meeting called for that purpose, or when
authorized by the written consent of the holders of at least a majority of the
voting stock issued and outstanding, the Board of Directors shall have power and
authority at any meeting to sell, lease or exchange all of the property and
assets of the Corporation, including its good will and its corporate franchises,
upon such terms and conditions as its board of Directors deems expedient and for
the best interests of the Corporation.
5
<PAGE>
ELEVENTH. No shareholder shall be entitled as a matter of
right to subscribe for or receive additional hares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.
TWELFTH. No director or officer of the Corporation shall be
personally liable to the Corporation or any of its stockholders for damages for
breach of fiduciary duty as a director or officer involving any act or omission
of any such director or officer; provided. however, that the foregoing provision
shall not eliminate or limit the liability of a director or officer (i) for acts
or omissions which involve intentional misconduct, fraud or a knowing violation
of law, or (ii) the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes. Any repeal or modification of this Article by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director or
officer of the Corporation for acts or omissions prior to such repeal or
modification.
THIRTEENTH. This Corporation reserves the right to amend,
alter, change or repeal any provision contained in the Articles of
Incorporation, in the manner now or hereafter prescribed by statute, or by the
Articles of Incorporation, and all rights conferred upon Stockholders herein are
granted subject to this reservation.
6
<PAGE>
I, THE UNDERSIGNED, being the Incorporator hereinbefore named
for the purpose of forming a Corporation pursuant to the General Corporation Law
of the State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 9th day of May, 1996.
/s/ Patrick McMullen
------------------------
Patrick McMullen
STATE OF NEVADA )
) SS:
CARSON CITY )
On this 9th day of May, 1996, in Carson City, Nevada, before me, the
undersigned, a Notary Public in and for Carson City, State of Nevada, personally
appeared:
Patrick McMullen
Known to me to be the person whose name is subscribed to the foregoing document
and acknowledged to me that he executed the same.
/s/ Mark Shatas
----------------
Notary Public
I, Laughlin Associates, Inc. hereby accept as Resident Agent for the
previously named Corporation.
May 9, 1996 /s/ Patrick McMullen
- -----------------------------------------
Date: Service Coordinator
7
<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
BNE ASSOCIATES, INC.
The undersigned being the President and Secretary of BNE Associates, Inc., a
Nevada Corporation, hereby certify that by majority vote of the Board of
Directors and majority vote of the stockholders at a meeting hold on 9th May
1998, it was voted that this CERTIFICATE AMENDING ARTICLES OF INCORPORATION be
filed.
The undersigned further certify that ARTICLES "FIRST" and "FOUR" of the original
Articles of Incorporation filed on the 9th day of May 1996 herein are amended to
read as follows:
ARTICLE "ONE", NAME is amended to read:
The name of the Corporation shall be: "Occidental Rand Corporation".
RESOLVED that ARTICLE "FOUR" is hereby amended to road as follows:
The total number of authorized capital stock is increased to Fifty Mil1ion
(50,000,000) shares at $.0001par value per share shall be authorized. Said
shares at $.0001 par value may be issued by the corporation from time to time
for such consideration as may be fixed from time to time by the Board of
Directors.
RESOLVED that the Corporation declare a 1 to 100 forward stock split to be
effective May 25, 1999.
The undersigned hereby certify that they have on this 5th May, 1998 executed
this Certificate amending that original Articles of Incorporation heretofore
filed with the Secretary of State of Nevada.
/s/ Thomas McCausland
-----------------------------
Thomas McCausland, President
/s/ Nancy Jones
-----------------------------
Nancy Jones, Secretary
8
<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
OCCIDENTAL RAND CORPORATION
The undersigned, being the President and the Secretary of Occidental Rand
Corporation, a Nevada Corporation, hereby certify that by majority vote of the
Board of Directors and shareholders at a meeting held on December 30, 1998, it
was voted and adopted a resolution to amend the original Articles of
Incorporation as follows:
The undersigned further certify that FOUR of the original Articles of
Incorporation filed on 9th of May 1996 herein is amended to read as
follows:
ARTICLE FOUR, CAPITAL STOCK is amended to read:
The Corporation declares a 4 shares for each 1 share forward stock
split to be effective the 5th of January 1999.
The undersigned hereby certify that they have on December 30, 1998
executed this certificate Amending that original Articles of
Incorporation heretofore filed with the Secretary of State of Nevada.
/s/ Thomas McCausland
-----------------------------
Thomas McCausland, President
/s/ Nancy Jones
-----------------------------
Nancy Jones, Secretary
9
<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
OCCIDENTAL RAND CORPORATION
The undersigned, being the Treasurer and Secretary of Occidental Rand
Corporation, a Nevada corporation, hereby certify that by unanimous consent of
the Board of Directors and majority vote of the stockholders at a meeting held
on 27th August 1999, this certificate of amendment of the articles of
incorporation has been approved and adopted and that it shall be filed upon the
discretion of the officers of this corporation.
The undersigned further certify that Articles "FIRST" and "FOURTH" of
the original Articles of Incorporation filed on the 9th day of May 1996 and
amended on November 19, 1998 herein are amended as follows:
Article "ONE", is hereby amended to read:
The name of the Corporation shall be: "youticket.com inc."
Article "FOUR" is hereby amended to read as follows:
The authorized capital stock of the corporation shall be One
Hundred Million (100,000,000) shares of Common Stock, at
$.0001 par value per share. Said shares at $.0001 par value
may be issued by the corporation from time to time for such
consideration as may be fixed from time to time by the Board
of Directors.
The undersigned hereby certify that they have on this 27th day of
August 1999 executed this Certificate Amending the Articles of Incorporation
heretofore filed with the Secretary of Nevada.
/S/ Virginia Thompson
-----------------------------
Virginia Thompson, Treasurer
/S/ Brice Scheschuck
----------------------------
Brice Scheschuck, Secretary
BY LAWS
OF
YOUTICKET.COM INC.
(the "Corporation")
Article I.
Office
The Board of Directors shall designate and the Corporation shall
maintain a principal office. The location of the principal office may be changed
by the Board of Directors. The Corporation also may have offices in such other
places as the Board may from time to time designate. The location of the initial
principa1 office of the Corporation shall be designated by resolution.
Article II.
Shareholders Meetings
1. Annual Meetings
The annual meeting of the shareholders of the Corporation shall be held
at such place within or outside the State of Nevada as shall be set forth in
compliance with these Bylaws. The meeting shall be held on the 9th of May of
each year. If such day is a legal holiday, the meeting may be on the next
business day. This meeting shall be for the election of Directors and for the
transaction of such other business as may properly come before it.
2. Special Meetings
Special meetings of shareholders, other than those regulated by
statute, may be called by the President or upon written request of the holders
of 50% or more of the outstanding shares entitled to vote at such special
meeting. Written notice of such meeting stating the place, the date and hour of
the meeting, the purpose or purposes for which it is called, and the name of the
person by whom or at whose direction the meeting is called shall be given.
3. Notice of Shareholders Meetings
The Secretary shall give written notice stating the place, day, and
hour of the meeting, and in the case of a special meeting, the purpose or
purposes for which the meeting is called, which shall be delivered not less than
ten or more than fifty days before the date of the meeting, either personally
<PAGE>
or by mail to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, addressed to the shareholder at his address as it appears on the
books of the Corporation, with postage thereon prepaid. Attendance at the
meeting shall constitute a waiver of notice thereof.
4. Place of Meeting
The Board of Directors may designate any place, either within or
without the State of Nevada, as the place of meeting for any annual meeting or
for any special meeting called by the Board of Directors. A waiver of notice
signed by all shareholders entitled to vote at a meeting may designate any
place, either within or without the State of Nevada, as the place for the
holding of such meeting. If no designation is made, or if a special meeting is
otherwise called, the place of meeting shall be the principal office of the
Corporation.
5. Record Date
The Board of Directors may fix a date not less than ten nor more than
fifty days prior to any meeting as the record date for the purpose of
determining shareholders entitled to notice of and to vote at such meetings of
the shareholders. The transfer books may be closed by the Board of Directors for
a stated period not to exceed fifty days for the purpose of determining
shareholders entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other purpose.
6. Quorum
A majority of the outstanding shares of the Corporation entitled to
vote, represented in person or by proxy, shall constitute a quorum at a meeting
of shareholders. If less than a majority of the outstanding shares are
represented at a meeting, a majority of the shares so represented may adjourn
the meeting from rime to time without further notice. At a meeting resumed after
any such adjournment at which a quorum shall be present or represented, any
business may be transacted, which might have been transacted at the meeting as
originally noticed.
7. Voting
A holder of an outstanding share, entitled to vote at a meeting, may
vote at such meeting in person or by proxy. Except as may otherwise be provided
in the currently filed Articles of Incorporation, every shareholder shall be
entitled to one vote for each share standing in his name on the record of
shareholders. Except as herein or in the currently filed Articles of
Incorporation otherwise provided, all corporate action shall be determined by a
majority of the vote's cast at a meeting of shareholders by the holders of
shares entitled to vote thereon.
8. Proxies
At all meetings of shareholders, a shareholder may vote in person or by
proxy executed in writing by the shareholder or by his duly authorized
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<PAGE>
attorney-in-fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
six months from the date of its execution.
9. Informal Action by Shareholders
Any action required to be taken at a meeting of the shareholders, may
be taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by a majority of the shareholders entitled to vote with
respect to the subject matter thereof.
Article III.
Board Of Directors
1. General Powers
The business and affairs of the Corporation shall be managed by its
Board of Directors. The Board of Directors may adopt such rules and regulations
for he conduct of their meetings and the management of the Corporation as they
appropriate under the circumstances. The Board of Directors shall have authority
to authorize changes in the Corporation's capital structure.
2. Number, Tenure and Qualification
The number of Directors of the Corporation shall be a number as the
Directors may by resolution determine from time to time. Each of the Directors
shall hold office until the next annual meeting of shareholders and until his
successor shall have been elected and qualified.
3. Regular Meetings
A regular meeting of the Board of Directors shall be held without other
notice than by this Bylaw, immediately after and, at the same place as the
annual meeting of shareholders. The Board of Directors may provide, by
resolution, the time and place for the holding of additional regular meetings
without other notice than this resolution.
4. Special Meetings
Special meetings of the Board of Directors may be called by order of
the Chairman of the Board or the President. The Secretary shall give notice of
the time, place and purpose or purposes of each special meeting by mailing the
same at least two days before the meeting or by telephone, telegraphing or
telecopying the same at least one day before the meeting to each Director.
Meetings of the Board of Directors may be held by telephone conference call.
3
<PAGE>
5. Quorum
A majority of the members of the Board of Directors shall constitute a
quorum for the transaction of business, but less than a quorum may adjourn any
meeting from time to time until a quorum shall be present, whereupon the meeting
may be held, as adjourned, without further notice. At any meeting at which every
Director shall be present, even though without any formal notice, any business
may be transacted.
6. Manner of Acting
At all meetings of the Board of Directors, each Director shall have one
vote. The act of a majority of Directors present at a meeting shall be the act
of the full Board of Directors, provided that a quorum is present.
7. Vacancies
A vacancy in the Board of Directors shall be deemed to exist in the
case of death, resignation, or removal of any Director, or if the authorized
number of Directors is increased, or if the shareholders fail, at any meeting of
the shareholders, at which any Director is to be elected, to elect the full
authorized number of Director to be elected at that meeting.
8. Removals
Directors may be removed, at any time, by a vote of the shareholders
holding a majority of the shares outstanding and entitled to vote. Such vacancy
shall be filled by the Directors then in office, though less than a quorum, to
hold office until the next annual meeting or until his successor is duly elected
and qualified, except that any directorship to be filled by election by the
shareholders at the meeting at which the Director is removed. No reduction of
the authorized number of Directors shall have the effect of removing any
Director prior to the expiration of his term of office.
9. Resignation
A Director may resign at any time by delivering written notification
thereof to the President or Secretary of the Corporation. A resignation shall
become effective upon its acceptance by the Board of Directors; provided,
however, that if the Board of Directors has not acted thereon within ten days
from the date of its delivery, the resignation shall be deemed accepted.
10. Presumption of Assent
A Director of the Corporation who is present at a meeting of the Board
of Directors at which action on any corporate matter is taken shall be presumed
to have assented to the action(s) taken unless his dissent shall be placed in
the minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
4
<PAGE>
Secretary of the Corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a Director who voted in favor of such
action.
11. Compensation
By resolution of the Board of Directors, the Directors may be paid
their expenses, if any, of attendance at each meeting of the Board of Directors
or a stated salary as Director. No such payment shall preclude any Director from
serving the Corporation in any other capacity and receiving compensation
therefor.
12. Emergency Power
When, due to a national disaster or death, a majority of the Directors
are incapacitated or otherwise unable to attend the meetings and function as
Directors, the remaining members of the Board of Directors shall have all the
powers necessary to function as a complete Board, and for the purpose of doing
business and filling vacancies shall constitute a quorum, until such time as all
Directors can attend or vacancies can be filled pursuant to these Bylaws.
13. Chairman
The Board of Directors may elect from its own number a Chairman of the
Board, who shall preside at all meetings of the Board of Directors, and shall
perform such other duties as may be prescribed from time to time by the Board of
Directors. The Chairman may by appointment fill any vacancies on the Board of
Directors.
Article IV.
Officers
1. Number
The Officers of the Corporation shall be a President, one or more Vice
Presidents, and a Secretary and Treasurer, each of whom shall be elected by a
majority of the Board of Directors. Such other Officers and assistant Officers
as may be deemed necessary may be elected or appointed by the Board of
Directors. In its discretion, the Board of Directors may leave unfilled for any
such period as it may determine any office except those of President and
Secretary. Any two or more offices may be held by the same person. Officers may
or may not be Directors or shareholders of the Corporation.
2. Election and Term of Office
The Officers of the Corporation to be elected by the Board of Directors
shall be elected annually by the Board of Directors at the first meeting of the
Board of Directors held after each annual meeting of the shareholders. If the
5
<PAGE>
election of Officers shall not be held at such meeting, such election shall be
held as soon thereafter as convenient. Each Officer shall hold office until his
successor shall have been duly elected and shall have qualified or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided.
3. Resignations
Any Officer may resign at any time by delivering a written resignation
either to the President or to the Secretary. Unless otherwise specified therein,
such resignation shall take effect upon delivery.
4. Removal
Any Officer or agent may be removed by the Board of Directors whenever
in its judgment the best interests of the Corporation will be served thereby,
but such removal shall be without prejudice to the contract rights, if any, of
the person so removed. Election or appointment of an Officer or agent shall not
of itself create contract rights. Any such removal shall require a majority vote
of the Board of Directors, exclusive of the Officer in question if he is also a
Director.
5. Vacancies
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, or if a new office shall be created, may be
filled by the Board of Directors for the un-expired portion of the term.
6. President
The President shall be the chief executive and administrative officer
of the Corporation. He shall preside at all meetings of the stockholders and, in
the absence of the Chairman of the Board, at meetings of the Board of Directors.
He shall exercise such duties as customarily pertain to the office of President
and shall have general and active supervision over the property, business, and
affairs of the Corporation and over its several officers, agents, or employees
other than those appointed by the Board of Directors. He may sign, execute and
deliver in the name of the Corporation powers of attorney, contracts, bonds and
other obligations, and shall perform such other duties as may be prescribed from
time to time by the Board of Directors or by the Bylaws.
7. Vice President
The Vice President shall have such powers and perform such duties as
may be assigned to him by the Board of Directors or the President. In the
absence or disability of the President, the Vice President designated by the
Board or the President shall perform the duties and exercise the powers of the
President. A Vice President may sign and execute contracts and other obligations
pertaining to the regular course of his duties.
6
<PAGE>
8. Secretary
The Secretary shall keep the minutes of all meetings of the
stockholders and of the Board of Directors and, to the extent ordered by the
Board of Directors or the President, the minutes of meetings of all committees.
He shall cause notice to be given of meetings of stockholders, of the Board of
Directors, and of any committee appointed by the Board. He shall have custody of
the corporate seal and general charge of the records, documents and papers of
the Corporation not pertaining to the performance of the duties vested in other
Officers, which shall at all reasonable times be open to the examination of any
Directors. He may sign or execute contracts with the President or a Vice
President thereunto authorized in the name of the Corporation and affix the seal
of the Corporation thereto. He shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the Bylaws.
9. Treasurer
The Treasurer shall have general custody of the collection and
disbursement of funds of the Corporation. He shall endorse on behalf of the
Corporation for collection checks, notes and other obligations, and shall
deposit the same to the credit accounts to any Director of the Corporation upon
application at the office of the Corporation during business hours; and,
whenever required by the Board of Directors or the President, shall render a
statement of his accounts. He shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the Bylaws.
10. Other Officers
Other officers shall perform such duties and shall have such powers as
may be assigned to them by the Board of Directors.
11. Salaries
The salaries or other compensation of the officers of the Corporation
shall be fixed from time to time by the Board of Directors, except that the
Board of Directors may delegate to any person or group of persons the power to
fix the salaries or other compensation of any subordinate officers or agents. No
officer shall be prevented from receiving any such salary or compensation by
reason of the fact that he is also a Director of the Corporation.
12. Surety Bonds
In case the Board of Directors shall so require, any officer or agent
of the Corporation shall execute to the Corporation a bond in such sums and with
such surety or sureties as the Board of Directors may direct, conditioned upon
the faithful performance of his duties to the Corporation, including
responsibility for negligence and for the accounting for all property, moneys or
securities of the Corporation, which may come into his hands.
7
<PAGE>
Article V.
Contracts, Loans, Checks And Deposits
1. Contracts
The Board of Directors may authorize any Officer or Officers, agent or
agents, to enter into any contract or execute and deliver any instrument in the
name of and on behalf of the Corporation and such authority may be general or
confined to specific instances.
2. Loans
No loan or advance shall be contracted on behalf of the Corporation, no
negotiable paper or other evidence of its obligation under any loan or advance
shall be issued in its name, and no property of the Corporation shall be
mortgaged, pledged, hypothecated or transferred as security for the payment of
any loan, advance, indebtedness or liability of the Corporation unless and
except as authorized by the Board of Directors. Any such authorization may be
general or confined to specific instances.
3. Deposits
All funds of the Corporation not otherwise employed shall be deposited
from time to time to the credit of the Corporation in such banks, trust
companies or other depositories as the Board of Directors may select, or as nay
be selected by an officer or agent of the Corporation authorized to do so by the
Board of Directors.
4. Checks and Drafts
All notes, drafts, acceptances, checks, endorsements and evidence of
indebtedness of the Corporation shall be signed by such officer or officers or
such agent or agents of the Corporation and in such manner as the Board of
Directors from time to time may determine. Endorsements for deposits to the
credit of the Corporation in any of its duly authorized depositories shall be
made in such manner as the Board of Directors may from time to time determine.
5. Bonds and Debentures
Every bond or debenture issued by the Corporation shall be in the form
of an appropriate legal writing, which shall be signed by the President or Vice
President and by the Treasurer or by the Secretary, and sealed with the seal of
the Corporation. The seal may be facsimile, engraved or printed. Where such bond
or debenture is authenticated with the manual signature of an authorized officer
of the Corporation or other trustee designated by the indenture of trust or
other agreement under which such security is issued, the signature of any of the
Corporation's officers named thereon may be facsimile. In case any officer who
signed, or whose facsimile signature has been used on any such bond or
debenture, shall cease to be an officer of the Corporation for any reason before
8
<PAGE>
the same has been delivered by the Corporation, such bond or debenture may
nevertheless be adopted by the Corporation and issued and delivered as though
the person who signed it or whose facsimile signature has been used thereon had
not ceased to be such Officer.
Article VI.
Capital Stock
1. Certificate of Share
The shares of the Corporation shall be represented by certificates
prepared by the Board of Directors and signed by the President. The signatures
of such officers upon a certificate may be facsimiles if the certificate is
countersigned by a transfer agent or registered by a registrar other than the
Corporation itself or one of its employees. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books of the
Corporation. All certificates surrendered to the Corporation for transfer shall
be canceled except that in case of a lost, destroyed or mutilated certificate, a
new one may be issued therefor upon such terms and indemnity to the Corporation
as the Board of Directors may prescribe.
2. Transfer of Shares
Transfer of shares of the Corporation shall be made only on the stock
transfer books of the Corporation by the holder of record thereof or by his
legal representative, who shall furnish proper evidence of authority to
transfer, or by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the Corporation, and on surrender for
cancellation of the certificate for such shares. The person in whose name shares
stand on the books of the Corporation shall be deemed by the Corporation to be
the owner thereof for all purposes.
3. Transfer Agent and Registrar
The Board of Directors of shall have the power to appoint one or more
transfer agents and registrars for the transfer and registration of certificates
of stock of any class, and may require that stock certificates shall be
countersigned and registered by one or more of such transfer agents and
registrars.
4. Lost or Destroyed Certificates
The Corporation may issue a new certificate to replace any certificate
theretofore issued by it alleged to have been lost or destroyed. The Board of
Directors may require the owner of such a certificate or his legal
representative to give the Corporation a bond in such sum and with such sureties
as the Board of Directors may direct to indemnify the Corporation as transfer
9
<PAGE>
agents and
registrars, if any, against claims that may be made on account of the issuance
of such new certificates. A new certificate may be issued without requiring any
bond.
5. Consideration for Shares
The capital stock of the Corporation shall be issued for such
consideration as shall be fixed from time to time by the Board of Directors. In
the absence of fraud, the determination of the Board of Directors as to the
value of any property or services received in full or partial payment of shares
shall be conclusive.
6. Registered Shareholders
The Corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder thereof, in fact., and shall not be bound
to recognize any equitable or other claim to or on behalf of this Corporation to
any and all of the rights and powers incident to the ownership of such stock at
any such meeting, and shall have power and authority to execute and deliver
proxies and consents on behalf of this Corporation in connection with the
exercise by this Corporation of the rights and powers incident to the ownership
of such stock. The Board of Directors, from time to time, may confer like powers
upon any other person or persons.
Article VII.
Indemnification
No officer or Director shall be personally liable for any obligations
of the Corporation or for any duties or obligations arising out of any acts or
conduct of said officer or Director performed for or on behalf of the
Corporation. The Corporation shall and does hereby indemnify and hold harmless
each person and his heirs and administrators who shall serve at any time
hereafter as a Director or officer of the Corporation from and against any and
all claims, judgments and liabilities to which such persons shall become subject
by reason of his having heretofore or hereafter been a Director or officer of
the Corporation, or by reason of any action alleged to have heretofore or
hereafter taken or omitted to have been taken by him as such Director or
officer, and shall reimburse each such person for all legal and other expenses
reasonably incurred by him in connection with any such claim or liability,
including power to defend such persons from all suits or claims as provided for
under the provisions of the Nevada Revised Statutes; provided, however, that no
such persons shall be indemnified against, or be reimbursed for, any expense
incurred in connection with any claim or liability arising out of his own
negligence or willful misconduct. The rights accruing to any person under the
foregoing provisions of this section shall not exclude any other right to which
he may lawfully be entitled, nor shall anything herein contained restrict the
right of the Corporation to indemnify or reimburse such person in any proper
case, even though riot specifically herein provided for. The Corporation, its
Directors, officers, employees and agents shall be fully protected in taking any
action or making any payment, or in refusing so to do in reliance upon the
advice of counsel.
10
<PAGE>
Article VIII.
Notice
Whenever any notice is required to be given to any shareholder or
Director of the Corporation under the provisions of the Articles of
Incorporation, or under the provisions of the Nevada Statutes, a waiver thereof
in writing signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice. Attendance at any meeting shall constitute a waiver of
notice of such meetings, except where attendance is for the express purpose of
objecting to the holding of that meeting.
Article IX.
Amendments
These Bylaws may be altered, amended, repealed, or new Bylaws adopted
by a majority of the entire Board of Directors at any regular or special
meeting. Any Bylaw adopted by the Board may be repealed or changed by the action
of the shareholders.
Article X.
Fiscal Year
The fiscal year of the Corporation shall be fixed and may be varied by
resolution of the Board of Directors.
Article XI.
Dividends
The Board of Directors may at any regular or special meeting, as they
deem advisable, declare dividends payable out of the surplus of the Corporation.
Article XII.
Corporate Seal
The seal of the Corporation shall be in the form of a circle and shall
bear the name of the Corporation and the year of incorporation.
9 May 1996
11
<PAGE>
WRITTEN CONSENT
OF
OCCIDENTAL RAND CORPORATION
The undersigned, all the directors of Occidental Rand Corporation, a
Nevada corporation ("the Corporation"), hereby adopt the following resolutions:
RESOLVED that the Bylaws of Occidental Rand Corporation,
Article II. (Shareholders Meetings), Section 2. (Special Meetings) is
amended as follows:
Special meetings of shareholders, other than those
regulated by statute, may be called by the Chairman upon
written request of the holders of 50% or more of the
outstanding shares entitled to vote at such special meeting.
Written notice of such meeting stating the place, the date and
hour of the meeting, the purpose or purposes for which it is
called, and the name of the person by whom or at whose
discretion the meeting is called shall be given.
Dated: As of January 25,1999.
/s/ Robert Landau
--------------------------------------
Robert Landau, Chairman and Director
/s/ David Roff
--------------------------------------
David Roff, Treasurer and Director
/s/ Brice Scheschuk
--------------------------------------
Brice Scheschuk, Secretary and Director
12
NUMBER SHARES
YT
YOUTICKET.COM INC.
SEE REVERSE FOR
CERTAIN DEFINITIONS
INCORPORATED UNDER THE LAWS
OF THE STATE OF NEVADA
COMMON STOCK CUSIP 987823 10 1
THIS CERTIFIES THAT:
is owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF $.0001
PAR VALUE EACH OF YOUTICKET.COM INC. transferable on the books of the
Corporation in person or by attorney upon surrender of this certificate duly
endorsed or assigned. This certificate and the shares represented hereby are
subject to the laws of the State of Nevada, and to the Articles of Incorporation
and By-laws of the Corporation, as now or hereafter amended. This certificate is
not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
DATED: COUNTERSIGNED:
OLDE MONMOUTH STOCK TRANSFER CO., INC.
77 MEMORIAL PARKWAY, ATLANTIC HIGHLANDS, NJ 07716
TRANSFER AGENT
BY:
AUTHORIZED SIGNATURE
SECRETARY
YOUTICKET.COM, INC.
CONVERTIBLE PROMISSORY NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT"), OR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD,
ASSIGNED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
WITH RESPECT THERETO UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR
UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION IS NOT REQUIRED.
$125,000
December 17, 1999
FOR VALUE RECEIVED, YOUTICKET.COM, INC., a Nevada corporation
("Company"), with its principal office at 4420 S. Arville, Suites 13 & 14, Las
Vegas, Nevada 89103, promises to pay to the order of ZDG Investments Limited
("Holder"), c/o 23 Sandfield Road, Toronto, Ontario, M3B 2B5, or registered
assigns, on December 17, 2001, subject to the conversion rights of the Holder
described herein, or an Event of Default, as defined below (in any such event,
"Maturity Date"), the principal amount of $125,000, in legally available funds,
together with interest on the unpaid balance of said principal amount from time
to time outstanding at the rate of 10% per annum. If the Note is not paid in
full on the Maturity Date, interest shall accrue on the outstanding principal of
and interest on this Note from the Maturity Date up to and including the date of
payment at a rate equal to the lesser of sixteen (16%) percent per annum or the
maximum interest rate permitted by applicable law. Notwithstanding the
foregoing, this Note may be prepaid by the Company, prior to the Maturity Date
at any time in whole, but not in part, without penalty or premium. Payments of
principal and interest are to be made at the address of the Holder designated
above or at such other place as the Holder shall have notified the Company in
writing.
1. Events of Default.
(a) Upon the occurrence of any of the following events
(herein called "Events of Default"):
(i) The Company shall fail to pay the principal
of or interest on this Note on the Maturity Date,
(ii) (a) The Company shall commence any
proceeding or other action relating to it in bankruptcy or seek reorganization,
arrangement, readjustment of its debts, receivership, dissolution, liquidation,
winding-up, composition or any other relief under any bankruptcy law, or under
any other insolvency, reorganization, liquidation, dissolution, arrangement,
composition, readjustment of debt or any other similar act or law, of any
jurisdiction, domestic or foreign, now or hereafter existing or (b) the Company
<PAGE>
shall admit the material allegations of any petition or pleading in connection
with any such proceeding or (c) the Company shall apply for, or consent or
acquiesce to, the appointment of a receiver, conservator, trustee or similar
officer for it or for all or a substantial part of its property or (d) the
Company shall make a general assignment for the benefit of creditors,
(iii) (a) The commencement of any proceedings or the
taking of any other action against the Company in bankruptcy or seeking
reorganization, arrangement, readjustment of its debts, liquidation,
dissolution, arrangement, composition, or any other relief under any bankruptcy
law or any other similar act or law of any jurisdiction, domestic or foreign,
now or hereafter existing and the continuance of any of such events for sixty
(60) days undismissed, unbonded or undischarged or (c) the appointment of a
receiver, conservator, trustee or similar officer for the Com pany for any of
its property and the continuance of any of such events for sixty (60) days
undismissed, unbonded or undischarged or (d) the issuance of a warrant of
attachment, execution or similar process against any of the property of the
Company and the continuance of such event for sixty (60) days undismissed,
unbonded and undischarged,
(iv) The Company shall fail to comply with any of its
obligations under this Note provided, however, that with respect to a failure to
comply with any of the provisions of Sections 2.1(a) and (c) of this Note, such
failure is not remedied within thirty (30) days after the Company's receipt of
written notice of same,
(v) The Company shall default with respect to
any indebtedness of $25,000 or more for borrowed money (other than under this
Note) if either (a) the effect of such default is to accelerate the maturity of
such indebtedness (giving effect to any applicable grace periods) or (a) the
holder of such indebtedness declares the Company to be in default (giving effect
to any applicable grace periods), or
(vi) Any judgment or judgments against the
Company or any attachment, levy or execution against any of its properties for
any amount in excess of $25,000 in the aggregate shall remain unpaid, or shall
not be released, discharged, dismissed, stayed or fully bonded for a period of
45 days or more after its entry, issue or levy, as the case may be,
then, and in any such event, the Holder, at its option and without written
notice to the Company, may declare the entire principal amount of this Note then
outstanding together with accrued unpaid interest thereon immediately due and
payable, and the same shall forthwith become immediately due and payable without
presentment, demand, protest, or other notice of any kind, all of which are
expressly waived. The Events of Default listed herein are solely for the purpose
of protecting the interests of the Holder of this Note.
(b) Non-Waiver and Other Remedies. No course of dealing or
delay on the part of the Holder of this Note in exercising any right hereunder
shall operate as a waiver or otherwise prejudice the right of the Holder of this
Note. No remedy conferred hereby shall be exclusive of any other remedy referred
to herein or now or hereafter available at law, in equity, by statute or
otherwise.
2. Obligation to Pay Principal and Interest Covenants. No provision of this Note
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and interest on this Note at the place,
at the respective times, at the rates, and in the currency herein prescribed.
2
<PAGE>
2.1 Affirmative Covenants. The Company covenants and agrees that,
while this Note is outstanding, it shall:
(a) Pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income and profits, or upon any
properties belonging to it before the same shall be in default provided,
however, that the Company shall not be required to pay any such tax, assessment,
charge or levy which is being contested in good faith by proper proceedings and
adequate reserves for the accrual of same are maintained if required by
generally accepted accounting principles
(b) Preserve its corporate existence and continue to engage in
business of the same general type as conducted as of the date hereof
(c) Comply in all respects with all statutes, laws,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
permits, licenses, authorizations and requirements ("Requirement(s)") of all
governmental bodies, departments, commissions, boards, companies or associations
insuring the premises, courts, authorities, officials, or officers, which are
applicable to the Company except wherein the failure to comply would not have a
material adverse effect on the Company provided that nothing contained herein
shall prevent the Company from contesting the validity or the application of any
Requirements.
2.2 Negative Covenants. The Company covenants and agrees that
while this Note is outstanding it will not directly or indirectly:
(a) Guaranty or otherwise in any way become or be responsible
for indebtedness for borrowed money, or for obligations, in either case of any
of its officers, directors or principal stockholders or any of their affiliates,
contingently or otherwise, other than such guaranties, if any, existing as of
the date hereof,
(b) Declare or pay cash dividends,
(c) Sell, transfer or dispose of, any of its assets other than
in the ordinary course of its business and for fair value, or
(d) Purchase, redeem, retire or otherwise acquire for value
any of its capital stock now or hereafter outstanding.
3. Conversion.
3.1 The Holder of this Note shall have the right, at Holders' option,
at any time or from time to time, to convert the then outstanding principal
amount and accrued and unpaid interest thereon through the Conversion Date, into
the number of shares of Common Stock of the Company, $.001 par value ("Common
Stock") calculated in accordance with paragraph 3.2 below.
3
<PAGE>
3.2 The number of shares of Common Stock to be issued upon conversion
of the principal and unpaid interest will be determined by dividing the dollar
amount of the principal and unpaid interest being converted, by the greater of
(i) 60% of the average Closing Bid Price (as hereinafter defined) of the Common
Stock for the five consecutive trading days ending two days prior to the date of
the Written Notice (as hereinafter defined) or (ii) $.005. The "Closing Bid
Price" shall mean the closing bid price for the Company's Common Stock, as
reported by The Nasdaq Stock Market if the Common Stock is quoted on the Nasdaq
National Market or Nasdaq SmallCap Market, or the last sales price of the Common
Stock if the Common Stock is listed on a national securities exchange, whichever
is the principal trading market for the Common Stock. If the Common Stock is not
listed on a national securities exchange or quoted on the Nasdaq National Market
or Nasdaq SmallCap Market, but is traded in the over-the-counter market, the
Closing Bid Price shall mean the closing bid price for the Common Stock, as
reported by the OTC Bulletin Board or the National Quotation Bureau,
Incorporated, or similar publisher of such quotations. If the Closing Bid Price
cannot be determined pursuant to the above, the Closing Bid Price shall be such
price as the Board of Directors of the Company shall determine in good faith
with reference to available established market criteria.
3.3 Before any Holder shall be entitled to convert this Note into
shares of Common Stock, Holder shall give written notice ("Written Notice") to
the Company at its principal corporate office, of the election to convert this
Note and shall state therein the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. The Written Notice
must be delivered via telecopier prior to 3:00 p.m. EST on any day and shall be
deemed to be received by the Company upon receipt by it or by its general
counsel. The Company shall, as soon as practicable, but not later than ten
business days thereafter, issue and deliver to Holder, a certificate or
certificates for the number of shares of Common Stock to which Holder shall be
entitled as aforesaid. Simultaneously with delivery, Holder shall surrender this
Note for cancellation. The conversion shall be deemed to have been made
immediately prior to the close of business on the date which the Written Notice
is received by the Company in accordance herewith ("Conversion Date"), and the
person or persons entitled to receive the shares of Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
the shares of Common Stock as of the Conversion Date.
3.4 The Company shall not be required to issue fractions of shares of
Common Stock upon conversion of this Note. If any fractions of a share would,
but for this Section, be issuable upon any conversion, in lieu of such
fractional share the Company shall round up or down to the nearest whole number
of shares.
3.5 The Company shall reserve and shall at all times have reserved out
of its authorized but unissued shares of Common Stock sufficient shares of
Common Stock to permit the conversion of the then outstanding principal and
unpaid interest. All shares of Common Stock which may be issued upon conversion
of this Note shall be validly issued, fully paid and nonassessable. In order
that the Company may issue shares of Common Stock upon conversion of shares of
this Note, the Company will endeavor to comply with all applicable Federal and
state securities laws.
3.6 If any of the following shall occur: (i) any structural
reclassification or change of outstanding shares of Common Stock issuable upon
conversion of this Note (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), or (ii) any consolidation or merger to which the Company is a
party other than a merger in which the Company is the continuing corporation and
which does not result in any reclassification of, or change in, outstanding
shares of Common Stock, then in addition to all of the rights granted to the
holders herein, the Company, or such successor or purchasing corporation, as
4
<PAGE>
the case may be, shall, as a condition precedent to such reclassification,
change, consolidation or merger ("Corporate Change"), provide in its certificate
of incorporation or other charter document or other agreements that this Note
shall be convertible into the kind and amount of shares of capital stock and
other securities and property (including cash) receivable upon such Corporate
Change by the Holder upon conversion of this Note immediately prior to the
Corporate Change. If, in the case of any such Corporate Change, the stock or
other securities and property (including cash) receivable thereupon by a holder
of Common Stock includes shares of capital stock or other securities and
property of a corporation other than the corporation which is the successor of
the Company in such Corporate Change, then the certificate of incorporation or
other charter document of such other corporation or agreements shall contain
such additional provisions to protect the interests of the Holder as the Board
of Directors shall reasonably consider necessary by reason of the foregoing. The
provision of this Section shall similarly apply to successive Corporate Changes.
3.7 The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Section and in
the taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the Holders against impairment.
3.8 The Common Stock to be issued upon conversion of this Note will be
"restricted stock" as that term is defined under Rule 144, promulgated by the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended.
4. Miscellaneous.
4.1 Required Consent. The Company may not modify any of the terms of
this Note without the prior written consent of the Holder.
4.2 Lost Documents. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Note or
any Note exchanged for it, and (in the case of loss, theft or destruction) of
indemnity satisfactory to it, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
such Note, if mutilated, the Company will make and deliver in lieu of such Note
a new Note of like tenor and unpaid principal amount and dated as of the
original date of the Note.
4.3 Benefit. This Note shall be binding upon and inure to the benefit
of the parties hereto and their legal representatives, successors and assigns.
4.4 Notices and Addresses. All notices, offers, acceptances and any
other acts under this Note (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressee in person, by overnight courier
service or similar receipted delivery, or, if mailed, postage prepaid, by
certified mail, return receipt requested, as follows:
5
<PAGE>
To Holder: To Holder's address on page 1 of this Note
To the Company: 4420 S. Arville, Suites 13-14
Las Vegas, NV 89103
Attention: LeAnna Sidhu,
Fax. No. (702) 876-8630
With a copy to: Graubard Mollen & Miller
600 Third Avenue
New York, New York 10016-2097
Attn: Andrew D. Hudders, Esq.
Tel. No. (212) 818-8881
Fax. No. (212) 818-8800
or to such other address as any of them, by notice to the others may designate
from time to time. Time shall be counted to, or from, as the case may be, the
delivery in person, the day after an overnight mailing or five (5) business days
after mailing.
4.5 Governing Law. This Note and any dispute, disagreement, or issue of
construction or interpretation arising hereunder whether relating to its
execution, its validity, the obligations provided therein or performance shall
be governed and interpreted according to the law of the State of Nevada without
regard to principles of conflicts of law.
4.6 Section Headings. Section headings herein have been inserted for
reference only and shall not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part any of the terms or
provisions of this Note.
4.7 Collection Costs Attorney's Fees. In the event this Note is turned
over to an attorney for collection or Holder otherwise seeks advice of an
attorney in connection with the exercise of its rights hereunder, the Company
agrees to pay all reasonable costs of collection, including reasonable
attorney's fees and expenses and all out of pocket expenses incurred in
connection with such collection efforts, which amounts may, at the Holder's
option, be added to the principal hereof.
IN WITNESS WHEREOF, this Note has been executed and delivered
on the date specified above by the duly authorized representative of the
Company.
YOUTICKET.COM, INC.
By:____________________________________
Brice Scheschuk, Authorized Signatory
6
AGREEMENT
This Agreement made and entered this 19th day of March 1999, by and between
VisitCom, Inc. 3540 W. Sahara Ave. Las Vegas, NV 89102 a Nevada corporation
("VisitCom") and The Venetian Casino Resort, LLC, 3355 Las Vegas Blvd. Las
Vegas, NV 89109 ("Location"), each individually a "Party" and collectively the
"Parties."
WITNESSETH
WHEREAS, VisitCom with licensing rights with Ticketmaster, Inc. who has
developed and copyrighted a computerized ticketing system (the "System") for use
in selling show tickets, event tickets, sightseeing tours and other event or
performance admission tickets to the general public (collectively "Tickets");
and,
WHEREAS, VisitCom is authorized by Ticketmaster to lease the System to Location
(Exhibit "A") and is willing to lease the System to Location and Location is
desirous of leasing the System from VisitCom.
NOW, THEREFORE, in consideration of the above and of the terms, covenants and
conditions set forth herein, and other good and valuable consideration, receipt
of which is hereby acknowledged, the Parties hereto covenant and agree as
follows:
1. RECITALS INCORPORATED: The recitals set forth hereinabove are hereby
incorporated and merged into this Agreement as if repeated herein in full.
2. USE OF SYSTEM AND EQUIPMENT TO BE LEASED TO LOCATION BY
VISITCOM: For the consideration, and upon the terms and conditions set forth
herein, VisitCom hereby leases the use of its System to Location. Location
recognizes and agrees that the System shall remain under the sole and exclusive
control of VisitCom at all times during the term of this Agreement and that,
pursuant to the terms hereof, Location is only acquiring computer access (via
modem) to the information maintained in the System by VisitCom. During the term
hereof, Location shall be entitled to use the System to print Tickets in
VisitCom's inventory, sell said Tickets to the public and print and sell
Venetian tickets. Location shall not sell non-Venetian tickets in the VisitCom
inventory at a greater price than indicated by VisitCom.
(a) Equipment Required: VisitCom will provide Location with the
following equipment (on a per-workstation basis) at a monthly rental fee as
outlined in Section 5(a) herein:
1. Two (2) Computer terminals.
2. Two (2) Ticketmaster CPU/Thermal ticket printers.
3. Two (2) Modems.
4. All Necessary cables.
5. Two (2) 110 VAC surge suppressers.
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6. Blank Ticket stock, in a format and design
preapproved by Location, pursuant to Location's
ongoing needs throughout the life of this Agreement.
7. Two (2) computer work stations.
Location hereby covenants and agrees that the equipment furnished to it by
VisitCom pursuant to the terms of this Agreement shall forever remain the
property of VisitCom and is only being provided to Location to facilitate the
terms of this Agreement. Location further agrees not to take any action which
may impede or impair VisitCom's title to said equipment nor allow any lien or
charges to be placed against said equipment. Equipment is to be provided to
Location by VisitCom in good working condition and, but for reasonable wear and
tear, Location shall keep equipment in same condition during the term of this
agreement. (Refer to Section 4 for equipment maintenance responsibilities.) In
the event that, through normal wear and tear, said equipment becomes inoperative
during the term of this agreement, it shall be replaced by VisitCom at its sole
and exclusive expense.
(b) Additional Expenses: Location agrees that it shall be solely
responsible for the cost of acquiring and installing telephone lines, electrical
outlets and/or any other cost associated with Location's use of the System
including, but not limited to, the cost of personnel necessary to operate the
System at Location.
3. TERM OF AGREEMENT: This Agreement shall be for twenty-four (24) months, the
term commencing on the 1st day of May 1999. Except as otherwise set forth
herein, either Party, upon thirty (30) days written notice, may cancel this
Agreement at any time.
4. TRAINING AND MAINTENANCE: VisitCom agrees to provide on-site training in the
use of the System to Location's designated employees, at no cost to Location.
Additionally, during the term of this Agreement, VisitCom shall maintain the
computer hardware and software provided to Location on an "as needed" basis at
no cost to Location, unless the repairs are necessitated by the malicious acts
of Location, its agents, employees, servants or invites, in which event Location
shall solely be responsible for the cost of any necessary repairs at the rate of
$95.00 per hour plus the actual cost of replacement parts.
5. FEES PAYABLE BY LOCATION: In consideration of the license of hardware and
software to Location and VisitCom's continuing services to be performed in
connection herewith, VisitCom shall be entitled to a per Ticket service fee on
all non-Venetian Tickets sold by the Venetian from VisitCom's inventory. The
amount of the Service Fee shall be $3.50 per Ticket. Location shall retain the
Ticket commissions less any credit card fees. The current credit card "merchant
discount" fee is 2.25% of the amount of each transaction processed and is
subject to fluctuation up to 1% or higher.
6. PREMIUM TICKETS: VisitCom shall exclusively provide to Location any Tickets
that become available to it, but are not part of VisitCom's inventory,
hereinafter "Premium Tickets" & Concerts to location. Any commission fees
generated thusly shall be shared 75% VisitCom and 25% Location.
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7. REPORTING: VisitCom will provide Location with daily and weekly sales
reports.
8. UPDATE OF SYSTEM INFORMATION: VisitCom will utilize its best efforts to
insure that the information in the System is current, accurate, and up-to-date
at all times.
9. SALE OF TICKETS NOT INCLUDED IN SYSTEM PROHIBITED: Location
agrees that all non-Venetian events in VisitCom's inventory shall be sold
through the System. In the event that Location will make every effort to notify
VisitCom of the event's existence and, if VisitCom elects at its sole
discretion, VisitCom can add the event to the System.
10. NO AGENCY, PARTNERSHIP OR JOINT VENTURE: Location expressly
recognizes and agrees that even though the terms of this Agreement grant it
access to the System, Location is, and shall always remain, an independent
contractor and no form of agency, partnership, joint venture or the like shall
be created or result by virtue of the terms of this Agreement or Location's
access to the system. The Parties further expressly acknowledge that they have
no authority whatsoever to act for each other in any matter nor to bind or
commit each other to any act or course of conduct whatsoever.
11. NO MISREPRESENTATION, ADHERENCE TO RULES: The Parties further agree that
during the term of this Agreement, they, as well as their respective employees,
servants and agents shall take no action or make no statement or the like which
misrepresents, or tends to misrepresent, the other or damage, or tend to damage,
the other's relationship with their respective employees, agents, associates,
customers, suppliers, event sponsors, locations or venues. Additionally, during
the term of this Agreement, Location hereby agrees to be bound by, and to adhere
to, VisitCom's ticket sales, refund and exchange policy which provides that
VisitCom refunds/exchanges tickets up to one (1) hour prior to block release
(5:00 PM) for that day's event.
12. TICKETING: VisitCom, through its relationship with TicketMaster, will
provide top quality ticketing services to Location. Issued Tickets will be
pre-assigned seats for all show rooms that have assigned seats. In addition, the
seats assigned shall be very good to excellent in respect to each showroom.
13. OTHER EVENT TICKETING: VisitCom will, at its expense, customize other event
ticketing software as proscribed by Location to accommodate its individual
software ticketing needs.
14. DEFAULT BY LOCATION: Location hereby expressly agrees that its default of
any of the terms and provisions of this Agreement, including but not limited to
the payment of any sums to VisitCom when due, shall constitute a material breach
of this Agreement. Upon any material breach, and after providing Location with a
thirty (30) day notice to cure, VisitCom may terminate this Agreement, restrict
Locations access to the System and retake and repossess all of the equipment
provided to Locution pursuant to the terms hereof Upon termination, Location
hereby agrees to pay all undisputed sums then due VisitCom within five (3)
business days following termination.
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15. TRADE SECRETS, COPYRIGHT, NON-DISCLOSURE: Locution expressly recognizes,
covenants and agrees that the information contained in the System constitutes
privileged and confidential trade secrets. Location further recognizes,
covenants and agrees that VisitCom through Ticketmaster has copyrighted the
System and possesses valid and lawful copyrights rights in and to the
information contained in the System. At all times during the term of this
Agreement, Location shall fully protect and preserve the trade secret and
copyright rights of VisitCom and shall not, under any circumstances, disclose
the contents or method of operation of the System to any unauthorized third
party. The Parties covenant that they will treat all information received from
each other as they would the most confidential proprietary informa tion. Any
breach of this Section shall constitute a material breach of this Agreement and
shall further entitle the non-breaching Party to immediately cancel this
Agreement. Further, upon such termination, the breaching Party shall be liable
in damages or otherwise for all damages sustained by the non-breaching Party as
the result of Location's breach, including costs and actual attorney's fees
incurred or relating to the breach.
16. FAILURE OF, OR INTERRUPTION TO, SYSTEM: VisitCom shall not be liable to
Location in any regard during the term of this Agreement, the System fails, is
interrupted, or ceases to function in any manner. Location expressly recognizes
and agrees that in the event of such failure or interruption, VisitCom's sole
responsibility shall be to apply its best efforts to return the System to its
full operating capacity as rapidly as possible. However, it is the expectation
of the Parties that VisitCom continually provide services throughout the term of
this Agreement. In the event that VisitCom fails to provide said services, for
any reason (but for brief periods of service interruption not to exceed
seventy-two (72) hours), Location may terminate the Agreement. Upon termination,
Location agrees to pay all undisputed sums then due VisitCom, but nothing more.
17. AGREEMENT NOT ASSIGNABLE: This Agreement is not assignable by either Party
under any circumstances without the prior written consent of both Parties. Said
consent may be withheld by either Party and for any reason or no reason.
18. ENTIRE AGREEMENT: This is the entire agreement between VisitCom and Location
and supersedes all prior agreements or understandings with respect to the System
and/or the Parties' rights or remedies available at law. No alteration or
modification to the terms of this Agreement shall be valid unless signed in
writing by VisitCom and Location. In interpreting this Agreement, no rule of
construction shall be employed which may cause this Agreement to be more
strictly enforced against its drafter.
19. PARTIES BOUND: This Agreement shall be binding upon and inure to the benefit
of the Parties hereto, their heirs, executors, representatives, successors and
where permitted, assigns.
20. NOTICES: Whenever any notice is required or permitted to be given pursuant
to the terms of this Agreement, said notice shall be given in writing and shall
be presumed received three (3) days after deposit into the United States mails,
postage prepaid, certified return receipt or faxed.
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21. ATTORNEY FEES: In the event any Party to this Agreement commences legal
proceedings against any other Party to this Agreement, to enforce the terms
hereof, to declare rights hereunder or to dispute, question or raise any
question of fact, law or issue set forth in and resolved by the express terms of
this Agreement, as the result of a breach of any covenant, condition or
representation of this Agreement, or for any other reason, the prevailing Party
in any such proceeding shall be entitled to recover from the losing Party, its
costs of suit, including attorney's fees.
22. GOVERNING LAW: This Agreement has been entered into and executed in any
and/or all of the states and/or foreign countries as indicated directly above
the signature lines for the respective Parties executing this Agreement. Since
the Parties to this Agreement are so widely diverse geographically, as partial
consideration for the execution of this Agreement, the Parties hereto,
individually, jointly and collectively, hereby expressly acknowledge and agree
that for the ease and convenience of such Parties hereto, this Agreement shall
be interpreted in accordance with the laws of the State of Nevada and further
that in the event of dispute, jurisdiction and venue for the resolution of such
dispute shall properly lie in the state or federal courts of the County of
Clark, State of Nevada.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
the day and year first above written.
VisitCom LOCATION
- ---------------------------- ----------------------------
By: By:
Title: Title:
5
HARDWARE AND TM SYSTEM USER AGREEMENT
THIS HARDWARE AND SOFTWARE RENTAL AGREEMENT ("Agreement") is
entered into as of the ___ day of May, 1998, by and between Ticketmaster-Las
Vegas, a Nevada corporation ("Ticketmaster") and VisitCom, Inc., a Nevada
corporation ("User"), with reference to the following facts:
WHEREAS, User is a tourist targeted multi-medium marketing company that
enters into arrangements with persons or entities promoting, producing and/or
presenting (collectively, the "Promoters") entertainment event features to be
held in the greater Las Vegas, Nevada metropolitan area, in respect of which
events (the "Attractions") User has authority to sell tickets to the public.
WHEREAS, User acts as the agent of said Promoters with respect to the
sale and distribution of tickets to the Attractions, and operates various ticket
sales offices (collectively, the "Box Offices") located in the Las Vegas area,
which Box Offices are listed on Exhibit 1 attached hereto.
WHEREAS, User desires that Ticketmaster shall rent certain ticketing
equipment to User and that Ticketmaster shall provide User with access to the TM
System (as defined below), which User shall use in connection with sales of
tickets from the Box Offices, and that Ticketmaster will transfer or refer
certain callers (as defined below) to User's toll free number, all upon the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants set forth herein, the parties do hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the meanings indicated below:
(a) Caller: Persons calling Ticketmaster's call center for Las
Vegas area attractions.
(b) Facility: Any and all hotels or other venues at which an
Attraction is scheduled or presented.
(c) Hardware: All of that certain computer hardware,
communications equipment, terminals and hook-ups listed with particularity on
Exhibit 1, which is attached hereto and incorporated herein by this reference,
or otherwise supplied by Ticketmaster to User at any time during the term of
this Agreement.
(d) Software: All the computer software, including all
upgrades, new releases, new versions and modifications thereto during the term
of this Agreement, which User shall have access to in connection with the sale
of tickets for the Attractions through the TM System.
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(e) Ticket: A printed evidence of the right to occupy space at
or to attend an Attraction.
(f) Ticket Receipts: The face value of a Ticket, less any
amounts due and payable to Ticketmaster pursuant to this Agreement.
2. Term of Agreement. The term of this Agreement shad begin on the date
hereof and shall continue through the third anniversary hereof. Thereafter, the
term of this Agreement shall automatically be renewed for a successive two (2)
year period, unless either party notifies the other party in writing, not less
than ninety (90) nor more than one hundred twenty (120) days prior to the end of
the initial term or the then current renewal term, of its intention not to renew
this Agreement.
3. Exclusive Rights.
(a) User hereby retains and authorizes Ticketmaster to act as
their exclusive hardware and software supplier for the programming and storage
of accounts with respect to Tickets for the Attractions on the automated
computerized ticketing system developed by Ticketmaster utilizing telephones and
ticket outlets with terminals and ticket printout capabilities linked to a
central computer facility ("TM System").
(b) It is agreed and understood that neither Ticketmaster nor
User will guarantee that any minimum or fixed number of Tickets will be sold, or
referrals of Callers will be made, through the TM System with respect to any
Attraction. User hereby acknowledges that the travel-related referral services
described herein are of an experimental nature for Ticketmaster and Ticketmaster
does not represent that it has any experience or expertise in this area. User
further acknowledges that the likelihood of success of the travel-related
referral services is speculative and Ticketmaster has not made any guarantees in
connection therewith. User shall not use the services of any computerized
ticketing company or system (other than Ticketmaster) in connection with sales
of tickets during the term of this Agreement.
4. Hardware and Software/Use. During the term of this Agreement,
Ticketmaster shall provide to User the Hardware described in Exhibit 1 attached
hereto and on-line access to the Software. The Hardware and Software shall at
all times be and remain the sole and exclusive property of Ticketmaster, and
User shall have no right, title or interest therein or thereto except as a
licensed user thereof. User shall use the Hardware in a careful and proper
manner and shall comply with and conform to all Federal, state, municipal and
other laws, ordinances and regulations in any way relating to the possession,
use or maintenance of the Hardware. Neither User, nor its employees, agents,
servants or representatives, shall alter, modify, copy or add to the Hardware or
Software without the prior written consent of Ticketmaster. Except as may be
necessary to prevent damages to or destruction of the Hardware, User will not
move the Hardware nor permit such Hardware to be removed from the Box Offices
without Ticketmaster consent, which consent shall not be unreasonably withheld,
and User shall give Ticketmaster prompt written notice of any attachment or
other judicial process affecting any item of Hardware.
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5. Compensation. In consideration for the license by Ticketmaster of
the Hardware and Software to User and Ticketmaster's continuing services to be
performed in connection herewith, Ticketmaster shall be entitled to receive the
following fees and compensation described below. All such fees are deductible by
Ticketmaster on a weekly basis, or monthly basis with respect to fees described
in Section 5(c) below, from the settlement of Ticket Receipts pursuant to
Section 12 below, provided that to the extent such fees are not deducted by
Ticketmaster, User shall make immediate payment to Ticketmaster upon receipt of
an invoice.
(a) Ticketmaster's Service Fee: Ticketmaster shall be entitled
to receive from User a per Ticket service fee on all Tickets sold (the "Service
Fee"). The amount of the Service Fee shall initially be $3.00 per Ticket and
shall be automatically increased by $0.25 per Ticket on each anniversary of this
Agreement, unless otherwise mutually agreed to by the parties.
(b) Credit Card Sales: User may utilize the credit card
authorization network ("CCAN") contained within the TM System for Box Office
sales of Tickets for Attractions scheduled at any Facility for the fee described
below. User shall pay a merchant discount fee to Ticketmaster's merchant bank in
an amount equal to 2.25% of the amount of each transaction processed through the
CCAN. Ticketmaster's merchant bank shall establish an account in User's name and
User's account shall be debited, on a monthly basis, in the amount of the
cumulative discount fee for such month. The fee set forth above shall apply only
with respect to MasterCard and Visa card transactions. In the event that User
desires to process any other credit card transactions through the CCAN and such
transactions are acceptable to Ticketmaster, then the fees for such service
shall be mutually agreed upon by the parties. The fees set forth herein are
subject to automatic adjustment in the event that Ticketmaster's discount fee is
increased. User shall be responsible for any and all other amounts charged to
Ticketmaster by its bank for processing User's transactions, including, but not
limited to, chargebacks, fraudulent credit card use, and additional charges for
failure to meet the specific timing or other qualifications of MasterCard or
Visa or Ticketmaster's bank, whether or not said charges are due to the acts or
omissions of Ticketmaster. User shall, at its own cost, pay for any and all
equipment required in order for User to be connected to the CCAN. User hereby
agrees to reimburse Ticketmaster the total amount (ticket price and service
fees) of any credit card purchase for which Ticketmaster is charged back by a
bank for that credit card purchase, unless such chargeback was caused solely by
the negligence of Ticketmaster. Ticketmaster reserves the right to bill User for
any charge backs incurred with respect to any Attraction up to eighteen months
after the performance of the Attraction. Payment must be made upon receipt of
such billing. Ticketmaster does not guaran tee the operability of any CCAN
equipment and shall not be responsible for performing any maintenance services
on such equipment.
(c) Travel Agent Services Referral Fee: Ticketmaster shall be
entitled to receive from User twenty-five percent (25%) of the gross revenues
(including, but not limited to VisitCom's gross hotel room and car rental
commissions) received by User from or with respect to each Caller that
Ticketmaster transfers or refers to User's toll-free 1-800 telephone number.
(d) Telephone Line Charges: Ticketmaster shall be entitled to
receive from User $0.13 per each minute of transfer time billed to Ticketmaster
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in connection with telephone calls transferred by Ticketmaster to User's
toll-free 1-800 telephone number.
6. User's Responsibilities. User hereby agrees to perform the following
hereunder at User's sole expense:
(a) Enter into agreements with the applicable Promoters in
connection with all "Las Vegas" style entertainment productions.
(b) Ensure that each of the Box Offices is made available and
accessible for Ticket pick-up and distribution.
(c) Ensure that each of the Box Offices is enabled to
accommodate the TM System.
(d) Provide sufficient staffing and training to effectively
accommodate all incoming telephone calls for the purchase of Tickets.
(e) Provide a reasonable allocation of hotel rooms designated
for use by Callers.
(f) Provide a reasonable allocation of cars designated for
rental by Callers.
(g) Provide continuous marketing and advertising support
concerning the activities described herein in local publications (e.g., Las
Vegas High Roller magazine).
(h) Establish and maintain a dedicated toll-free 1-800
telephone number to enable Ticketmaster to transfer Callers to User.
(i) Provide Ticketmaster with the reports and accountings
described in Section 12 below.
7. Central Computer Facility. Ticketmaster shall, at its sole expense,
maintain a central computer facility at such location or locations as it shall
deem necessary for the operation of the TM System. The central computer facility
will be in operation 16 hours a day during each and every day of the year, and
will be adequately staffed to perform all ongoing licensed user assistance,
maintenance and repair services required to be performed by Ticketmaster under
this Agreement.
8. Maintenance and Repairs.
(a) Installation costs with respect to the Hardware shall be
the responsibility of Ticketmaster. The cost of all telephone line connections
between the central computer facility and the Box Offices, and all monthly line
costs with respect to the operation of the TM System between the Box Offices and
the central computer facility, shall be borne solely by User. Ticketmaster
agrees to provide ordinary and routine maintenance and repair of the TM System
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at the Box Offices at no additional cost to User, provided that such maintenance
or repair is not necessitated by the negligence of User, its employees, agents
or representatives. Ticketmaster represents and warrants that adequate service
and repair personnel on duty at the central computer facility will be available
to meet the reasonably anticipated service needs of User from time to time. In
the event of any breakdown or malfunction in the operation of the Hardware, or
difficulties encountered in connection with access to the Software, User agrees
to promptly notify Ticketmaster of any such malfunction to assist Ticketmaster
in performing its obligations hereunder. In the event of any emergency,
Ticketmaster further agrees to respond to such emergency as quickly as possible
to provide User with repair services.
(b) Nondurable operational supplies which are used at the Box
Offices in connection with the operation of the TM System, consisting of line
printer paper and printer ribbons, shall be paid for by User, and User shall be
responsible for maintaining adequate supplies thereof to assure continuous
operations at the Box Offices.
9. Limitation of Liability. In the event of any breach of this
Agreement by Ticketmaster which may be caused by the malfunction of the Hardware
or Software or by Ticketmaster's failure to provide required maintenance service
and to keep the TM System in operating condition, the limit of any claim of loss
by User shall be no greater than the proven financial loss sustained by virtue
of such breach. In no event shall Ticketmaster be liable for incidental or
consequential damages for any breach of this Agreement. Occasional short-term
interruptions of service which are not unreasonable under comparable industry
standards shall not be cause for any liability or claim against Ticketmaster
hereunder, nor shall any such occasion render Ticketmaster in default under this
Agreement.
10. Training of Box Office Employees. User shall staff each of the Box
Offices with such personnel as is required for the proper operation of the TM
System for Ticket sales and distributions. Ticketmaster shall, at its cost,
train a sufficient number of User's employees who shall be reasonably necessary
for the initial staffing of the Box Offices and for operation of the TM System
at the Box Offices and agrees to provide additional training to other employees
of User to the extent such training is necessary as a consequence of changes in,
or a modification of, the Hardware or Software or in Ticketmaster's method of
operation. To the extent of any change in personnel by User in connection with
the Box Office sales requiring additional training beyond that initially
contemplated hereunder, User agrees to reimburse Ticketmaster for its costs and
expenses incurred in connection with such additional training.
11. Attraction Set-Up. At least seven (7) business days in advance of
all Ticket sales, User shall furnish Ticketmaster with all necessary information
with respect to the sale of Tickets for all events, including, without
limitation, seating layout, Ticket structure, discounts permissible, Ticket
header information, color logos, entry information and such other information as
is necessary for the proper sale of Tickets. Notwithstanding anything contained
herein to the contrary, Ticketmaster shall have no responsibility and User shall
indemnify and hold Ticketmaster harmless from and against any and all
liabilities, claims, expenses (including reasonable attorneys' fees) or causes
of action resulting from the inaccuracy of any information furnished by User
pursuant hereto.
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12. Accounting Procedures.
(a) Sale of Tickets: User agrees to produce and sell Tickets
to all Attractions, collect the proceeds from such sales and remit all such
funds collected to Ticketmaster in accordance with the provisions of this
Agreement.
(b) Ticket Stock: Ticketmaster shall furnish User with blank
tickets for the first two (2) to three (3) months of the term hereof, until User
commences use of its own custom ticket stock. User shall be responsible for the
security of the ticket stock and risk of loss of the ticket stock shall shift to
User upon the delivery of ticket stock to User or User's authorized
representative, agent or employee. User shall make an accounting to Ticketmaster
for all unused ticket stock upon Ticketmaster's request, and Ticketmaster shall
have the right to inspect User's inventory of ticket stock during the normal
business hours of each Box Office as Ticketmaster deems necessary; provided,
however, the inspection shall not be conducted in a manner or during a time that
unreasonably interrupts User's sales of Tickets. User shall return to
Ticketmaster all Tickets which are returned to or voided on the TM System or are
canceled, defaced, mutilated or otherwise rendered unsalable. User shall be
responsible for any and all damages arising out of or resulting from missing or
unaccounted for Tickets, including, but not limited to, costs of ticket stock,
printing, and the face value of any such Tickets, if the face value is known, or
$2.00 per Ticket, if the face value is not known.
(c) Ticket Receipts: All receipts and proceeds from the sale
of Tickets shall remain the property of Ticketmaster, shall be segregated from
User's other assets and shall be held in trust by User on behalf of
Ticketmaster. User shall have no right, title or interest in or to the Ticket
proceeds or receipts. User shall deposit all proceeds twice weekly in an account
to be designated by Ticketmaster, in accordance with the terms of the Section
11(d) below. User shall not use any receipts or proceeds from the sale of
Tickets as its own property, or in the form of loans to itself, or as collateral
for loans from third parties to itself or otherwise, and such funds shall not be
subject to assignment or alienation by User or to the claims of creditors of
User. User acknowledges and agrees that its obligations to remit and pay to
Ticketmaster all receipts or monies due from sold or unaccounted for Tickets,
and the rights of Ticketmaster in and to such remittance and payment, shall be
absolute and unconditional and shall not be subject to any abatement, reduction,
setoff, defense, counterclaim or recoupment due or alleged to be due to, or by
reason of, any past, or present or future claims which User may have against
Ticketmaster, or against any person for any reason whatsoever.
(d) User's Payment Schedule: User shall make a daily
accounting for Ticket sales and unaccounted for Tickets based on computer, cash,
credit card and related sales reports for each Box Office. User shall remit to
and pay Ticketmaster in cash the aggregate amount for all Ticket sales, plus the
service fees for all such Ticket sales pursuant to Section 5, plus the aggregate
amount due for unaccounted for Tickets calculated pursuant to Section 11(b) on
the due dates as follows: on Tuesday of each week, User shall remit to and pay
Ticketmaster for sales generated on Thursday, Friday, Saturday and Sunday of the
preceding week; and on Thursday of each week, User shall pay Ticketmaster for
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sales generated on Monday, Tuesday and Wednesday of that same week.
Notwithstanding anything to the contrary above, in the event that User is
holding the sum of $100,000.00 dollars or more in Ticket Receipts at all Box
Offices, it shall immediately wire transfer all its Ticket Receipts to
Ticketmaster no later than the next business day. Remittances by User are to be
made to Ticketmaster agency account number 4600-170104 at Wells Fargo Bank, Los
Angeles by 11:00 a.m. on the days specified above. (e) Settlement: From the
gross ticket proceeds received from User pursuant to Section 11(d) above,
Ticketmaster shall first deduct and retain all monies Ticketmaster is entitled
to receive under this Agreement. Thereafter, on Friday of each week: 1)
Ticketmaster shall then deduct User's commissions to the extent designated by
User to Ticketmaster in advance in writing; and 2) Ticketmaster shall remit
payment of the remaining net Ticket Receipts for TM System Ticket sales to each
Facility, as designated by User, with respect to which Attractions occurred
during Monday through Sunday of the week preceding such payment date. Each
weekly payment shall be accompanied by a written accounting. Such payments by
Ticketmaster shall constitute full performance by Ticketmaster of its obligation
to make such settlement payments to User, the Facility, or to any person
whatsoever. User agrees to maintain complete and accurate books and records with
respect to the activities conducted in connection with this Agreement. In
connection with each deduction or payment referenced in Section 5(c) above, User
shall provide to Ticketmaster a written accounting, in a form to be reasonably
approved by Ticketmaster, detailing the gross revenues received by User from
each Caller transferred by Ticketmaster to User, the commissions due and payable
to Ticketmaster in respect of each such Caller, and such other information as
Ticketmaster may reasonably request. Ticketmaster shall have the right, during
normal business hours and upon reasonable notice, to inspect and make copies of
User's books and records with respect to the activities conducted in connection
with this Agreement as Ticketmaster deems necessary to assure compliance with
the terms of this Agreement. User agrees that Ticketmaster shall have no
responsibility or liability for refunds to consumers in any manner whatsoever.
13. Representations and Warranties.
(a) Each party is a corporation duly organized and in good
standing under the laws of the state of Nevada and has adequate power to enter
into and perform this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by each party and constitutes the valid, legal and binding agreement
of such party, enforceable in accord ance with its terms.
(c) The entering into and performance of this Agreement will
not result in any breach of, or constitute a default under, any other agreement
to which User is a party, including, without limitation thereby, any agreement
for the sale or other disposition of tickets.
(d) User has the sole and exclusive right and authority to act
as the agent of each Facility and/or Promoter, as applicable, for the purposes
set forth herein and has a contrac tual right to establish and maintain a Ticket
pickup and distribution center at each of the Box Offices.
7
<PAGE>
(e) There is no existing exclusive agreement or arrangement
between User or any applicable Promoter or Facility and any third party with
respect to the sale of Tickets to Attractions, and no future agreement between
User and any third party shall contain any provision inconsistent with any
provision of this Agreement.
(f) User has obtained all necessary licenses, permits,
agreements, clearances and consents required for User and Ticketmaster to
perform their respective services under this Agreement and the terms of this
Agreement are in accordance with all applicable federal, state and local laws,
rules and regulations.
14. Disclaimer. ALL IMPLIED WARRANTIES EXISTING BY OPERATION OF LAW,
INCLUDING SPECIFICALLY ANY IMPLIED WARRANTIES OF MERCHANT ABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, ARE EXPRESSLY DISCLAIMED AND NEGATED BY THE EXPRESS
WARRANTIES PROVIDED HEREIN.
15. Default by User. The occurrence of any of the following events,
continued for 30 days after receipt by User of written notice thereof and its
failure to cure the same shall, at Ticketmaster option, constitute an Event of
Default hereunder and operate to terminate this Agreement and User's right to
the use of the TM System and possession of the Hardware and Software:
(a) The nonpayment by User of any sum required hereunder to be
paid by User;
(b) the default by User under any material term, covenant or
condition of this Agreement, or breach by User of any material representation or
warranty contained herein;
(c) any affirmative act of insolvency by Use:, whether
voluntary or involuntary, or the filing by User, or any third person against
User, of any petition or action under any bankruptcy, reorganization, insolvency
or moratorium law or any other law or laws for the relief of, or relating to,
debtors; provided, however, that no such act shall constitute an Event of
Default unless and until User shall be unable to meet its obligations to
Ticketmaster under the terms of this Agreement; and
(d) the exposure of a substantial part User's property or any
part of the Hard ware to any levy, seizure, assignment or sale or by a creditor
or governmental agency.
Upon the happening of any of the foregoing Events of Default, (i) User
shall, without demand, forthwith pay to Ticketmaster all amounts due and owing
pursuant hereto, and (ii) Ticketmaster may, without notice to or demand upon
User, disconnect all Hardware and terminate access to the Software and related
services from the central computer facility, take immediate possession of the
Hardware wherever the same may be located without demand, notice or court order,
and terminate this Agreement.
No remedy referred to in this Section is intended to be exclusive, but
8
<PAGE>
each shall be cumulative and in addition to any other remedy above or otherwise
available to Ticketmaster at law or in equity.
16. Loss and Damage. User hereby assumes and shall bear the entire risk
of loss and damage to the Hardware, ordinary wear and tear excepted, whether or
not insured against, once installed, unless occasioned by the negligence of
Ticketmaster, from any and every cause whatsoever from the date of installation
at the Box Office until removal thereof following termination of this Agreement.
No such loss or damage to the Hardware shall impair any obligation of User under
this Agreement.
17. Insurance.
(a) User shall, at its own expense, provide and maintain at
all times during the term hereof insurance to protect the Hardware against loss
caused by fire (with extended coverage), vandalism, malicious mischief, theft,
or any other cause in an amount equal to the full replacement value of the
Hardware. Should User become unable to provide or maintain such insurance
coverage, User shall promptly notify Ticketmaster in writing prior to the
expiration of any such coverage, and thereafter, Ticketmaster shall have the
right, but shall not be obligated, to provide insurance coverage for the
occurrences specified above and charge User the costs of such insurance
coverage.
(b) User shall provide, at their sole expense, any and all
other forms of insurance, including, but not limited to, public liability and
property damage insurance, required for their protection and the protection of
Ticketmaster. User shall indemnify and hold Ticket master harmless from and
against any and all risks, claims, expenses (including reasonable attorneys'
fees) or causes of action arising from User's use, possession or operation of
the Hardware, except to the extent of damage caused by the negligence of
Ticketmaster in the repair or maintenance of the Hardware.
18. Miscellaneous.
(a) Taxes: User shall keep the Hardware free and clear of all
levies, liens and encumbrances.
(b) Surrender of Hardware: Upon the expiration or termination
of this Agreement, Principal shall return the Hardware to Ticketmaster in good
repair, condition and working order, ordinary wear and tear resulting from
proper use thereof alone excepted.
(c) Assignment and Sublease: Without the prior written consent
of Ticket master, User shall not (a) assign, transfer, pledge or hypothecate its
rights in this Agreement or any interest therein, or (b) permit the Hardware or
any part thereof to be used, or access to the Software or any part thereof to be
had, by anyone other than User or User's authorized em ployees. Any such
assignment shall not relieve User of any of its obligations hereunder. Any
assignment, transfer, pledge or hypothecation for which consent is required
hereby and which is made without such consent shall be void.
9
<PAGE>
(d) Indemnity: User shall indemnify Ticketmaster against, and
hold Ticketmaster harmless from, any and all claims, actions, damages, expenses
(including court costs and reasonable attorney's fees), obligations, losses,
liabilities and liens, imposed on, incurred by or asserted against,
Ticketmaster, its successors or assigns, or any joint venturer in Ticketmaster,
occurring as a result of User's management, operation or use of the Hardware,
Software, the TM System, the C.C.A.N. (including but not limited to monies
transferred to incorrect accounts or damages resulting from such transfers,
except to the extent of any willful misconduct by Ticketmaster) or as a result
of, or in connection with, any breach by User of this Agreement.
(e) No Joint Venture: The relationship of Ticketmaster and
User hereunder shall in no way be construed to create a joint venture or
partnership, or to constitute Ticketmaster as an agent or employee of User for
any purpose other than as set forth herein.
(f) Restrictive Covenant: User recognizes and acknowledges
that the TM System as it now exists, including the Hardware and Software
associated with the TM System and all improvements in the state of the art
relative thereto, represents a valuable, special and unique asset of
Ticketmaster. User consents and agrees that it will not, during or after the
term of this Agreement, disclose any information, design specifications,
programs, listings, documen tation or other supporting or related materials or
information of any nature or description whatsoever relating to the TM System,
the Hardware or the Software, or applications, adaptations and modifications
thereof, whether now existing or developed in the future, to any person, firm,
corporation, association or entity for any reason or purpose whatsoever;
provided, however, that this covenant shall not apply with respect to any
information which becomes a matter of general knowledge within the public domain
or if User is obligated to disclose same by reason of any court order, rule or
regulation applicable to the conduct of its business. User does further agree
and acknowledge that any remedy at law for any breach or threatened breach of
the provisions of this Section and the covenants set forth herein will be
inadequate and, accordingly, User grants to Ticketmaster the right and
entitlement to seek injunctive relief for any such breach or threatened breach
of the provisions and covenants herein in addition to, and not in limitation of,
any and all other remedies at law or in equity otherwise available to
Ticketmaster. The expiration or termination of this Agreement by either party
shall not terminate the continuing confidentiality obligations imposed on User
by the terms of this Agreement.
(g) Notices: Any notice required or permitted to be given by
the provisions hereof shall be conclusively deemed to have been received by a
party hereto on the day it is delivered to such party at the address indicated
under said party's signature (or at such other address as such party shall
specify to the other party in writing) or, if sent by registered or certified
mail, on the third business day after the date on which it is mailed to such
party at said address. Unless specifically stated to the contrary herein, all
notices required under this Agreement must be in writing.
(h) Attorney's Fees: In the event of any action at law or suit
in equity in relation to this Agreement, the prevailing party shall be entitled
10
<PAGE>
to a reasonable sum for its attorneys' fees.
(i) Applicable Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Nevada. Each party agrees
that this Agreement, and each of its terms and provisions, may be enforced
against any party hereto in any court of competent jurisdiction within the State
of Nevada, and each party hereto fully consents to and submits to the personal
jurisdiction of the State of Nevada for that purpose.
(j) Facility Agreements: In the event that any Attraction is
held at a Facility with which Ticketmaster now has, or may, at the time of the
Attraction, have a ticket service agreement, then, if such ticket agreement
covers the Attraction, this Agreement shall be superseded by such ticket service
agreement and shall not apply to such Attraction.
(k) Entire Agreement: This written Agreement and the Exhibit
hereto constitutes the sole and only agreement of the parties relating to the
matters covered hereby. Any prior or contemporaneous agreements, promises,
negotiations or representations not expressly set forth in this Agreement are of
no force or effect. This Agreement supersedes any and all exiting contracts and
agreements by the parties with respect to the subject matter covered herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
TICKETMASTER-LAS VEGAS, INC., VISITCOM, INC.,
a Nevada corporation a Nevada corporation
By:___________________________ By:___________________________
Title:__________________________ Title:__________________________
c/o Ticketmaster Ticketing Co., Inc. 3540 W. Sahara Avenue
3701 Wilshire Blvd., 7th Floor P.O. Box 164
Los Angeles, CA 90010 Las Vegas, NV 90102
Attn: Timothy J. Wood Attn: Gregory P. Wells
(213) 381-2000 (702) 648-7709
11
EMPLOYMENT AGREEMENT
AGREEMENT made this 20th day of December, 1999, between YouTicket.com inc., a
Nevada corporation ("Employer" and "Company") and LeAnna Sidhu ("Employee").
WHEREAS, Employer desires to employ Employee and Employee desires to be employed
by Employer upon the terms and conditions hereinafter set forth.
Accordingly, in consideration of mutual covenants herein contained, the parties
hereto agree as follows:
1. Employment. The Employer will employ the Employee as the President of the
Company reporting to the Board of Directors of the Company. The Employee will
act as the senior executive of the Company with such duties and responsibilities
as are consistent with that position and as assigned to the Employee by the
board of directors of the Company, including, but not limited to administration
of the various departments of the Company, overseeing the strategy of the
Company, implementing communication with various segments of the international
community, and preparing forecasts of the activities of the Company. With the
Employee's consent, the Board of Directors of the Company will elect her as a
director of the Company. The Employee will perform her responsibilities
principally from an office located in Las Vegas, NV, provided that she will
travel to other locations, from time to time, as required for the full and
proper performance of her duties and responsibilities.
2. Term of Employment. The employment term will commence on the date hereof
for a period of twelve months, unless sooner terminated as hereinafter provided.
3. Compensation and Related Matters
(a) Salary. The Employee will be paid a gross monthly salary of USD$3,000
payable in installments every other week, in arrears after deduction of
amounts as are required by law to be deducted therefrom, but all deductions
shall be deemed to have been received for all purposes hereby, by the
Employee as part of the gross remuneration herein before mentioned.
Subsequent to the date of this Agreement, upon the Company receiving
$500,000 of new capital her gross monthly salary will be increased to
USD$7,000.
(b) Expenses. During the term of the Employee's employment hereunder, the
Employee shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Employee in performing services
hereunder, including all expenses of travel and living expenses while away
from home on business or at the request of and in the service of the
Employer, provided that such expenses are incurred and accounted for and
are reasonable for an executive of her stature. .
(c) Vacation. During the term of the Employee's employment hereunder, the
Employee shall be entitled to take 15 business days of paid vacation, which
will accrue on a pro-rata basis. These vacation days shall be in addition
to paid sick leave days and to the Company's standard holidays.
(d) Car Allowance. Employee shall be paid a car allowance of $500 per month.
(e) Insurance. Employee shall be paid a medical and dental allowance of $500
per month until such time as the Company establishes its own executive
<PAGE>
medical and dental plan, at which time the Company will provide the same to
Employee and her immediate family at no cost to her.
(f) Cellular Telephone. The Company will reimburse Employee for business
related cellular telephone calls and for reasonable standard monthly
cellular telephone fees.
4. Stock Options. On the effective date of this agreement, Employee will
receive from the Company an option to purchase shares of Common Stock of the
Company. The option will be represented by separate agreement. The option will
provide the right to purchase up to 360,000 shares of Common Stock of the
Company vesting 30,000 options per month during the term of this agreement and
exercisable for five years from each vesting date. If the Employee is
terminated, all unvested options are immediately cancelled.
5. Termination.
(a) The Employer may terminate the Employee's employment hereunder for any
reason on not less than thirty (30) days written notice to the Employee,
except in the case of death and disability. The Employee's employment shall
immediately terminate upon Employee's death and as a result of Employee's
disability as defined herein. The Employee may terminate her employment
hereunder on not less than thirty (30) days written notice to the Employer.
(b) If the employee's employment hereunder is terminated, the Employer shall:
pay Employee a lump sum payment on the date of such termination in an
amount equal to one months' base salary, car allowance and insurance
allowance, plus reimburse Employee for any accrued but unused vacation days
up until the date of termination.
(c) Disability shall mean the Employee's incapacity due to physical or mental
illness which prevents her from carrying out her duties hereunder on a full
time basis for a period of three consecutive months or an aggregate of 90
days in any consecutive twelve month period after 30 day's advance notice
of termination is given by the Company (which may occur before or after the
end of the disability periods described above).
(d) Notice of Termination. Any termination of the Employee's employment by the
Employer or by the Employee (other than termination pursuant to death)
shall be communicated by written notice of termination to the other party
hereto.
6. Non-Competition. Except in furtherance of the business of the Employer and
as specifically provided in this Agreement, during the employment term and (for
a period of one year after the employment term) under this Agreement,
the Employee will not, on her own behalf or on behalf of any other person,
company, corporation, partnership or other entity or enterprise (collectively
"Person") directly or indirectly provided that the Employee is paid a one year
base salary, lump sum upon termination:
(a) divert or use the resources of the Employer or its affiliates to or for any
other Person;
(b) divert or use a business opportunity of the Employer or its affiliates to
or for any other Person,
(c) solicit any employees, agents or consultants of the Employer or its
affiliates to terminate their business relationship with the Employer or
its affiliates or to cause or encourage them to substantially alter their
business relationship with the Employer or its affiliates; or
(d) for any business purpose, solicit or otherwise communicate with any client
of the Employer or its affiliates or with any Person that is a reasonably
potential client of the Employer or its affiliates, with the intention of
hurting the relationship between that client and the Employer.
<PAGE>
7. Confidentiality. The Employee acknowledges that in and as a result of her
employment hereunder, she will be making use of, acquiring and/or adding to
confidential information of special and unique nature and value relating to such
matters as the Employer's and its affiliates trade secrets, systems, procedures,
manuals, confidential reports and lists of clients, as well as the nature and
type of services rendered by the Employer and its affiliates, and the equipment
and methods used by the Employer and its affiliates ("Confidential
lnformation"). As a material inducement to the Employer to enter into this
Agreement, and to pay to the Employee the compensation referred to in this
Agreement, Employee covenants and agrees that she shall not, at any time during
or following the term of her employment hereunder, directly or indirectly,
divulge or disclose, for any purpose whatsoever (other than in the course of her
employment duties where warranted), any of such Confidential Information which
has been obtained by or disclosed to her as a result of, Employee's employment
by the Employer. In the event of a breach or threatened breach by the Employee
of any of the provisions of this Section 7, the Employer and its affiliates, in
addition to and not in limitation of any other rights, remedies or damages
available to the Employer and its affiliates at law or in equity, shall be
entitled to a permanent injunction in order to prevent or to restrain any such
breach by Employee, or by Employee's partners, agents, representatives,
servants, employers, employees and/or any all persons directly or indirectly
acting for or with her.
The Employee acknowledges that, in and as a result of her employment hereunder,
she will acquire Confidential Information about the clients of the Employer and
its affiliates. Employee covenants and agrees that she shall not, at any time
during or following the term of employment hereunder, directly or indirectly,
divulge or disclose, for any purpose whatsoever (other than in the course of her
employment duties where warranted) any Confidential Information about the
client, which has been obtained by or disclosed to her as a result of her
employment with the Employer.
It should be noted that Confidential Information does not include any items
which: (i) prior to disclosure, is known to the public; (ii) after disclosure,
becomes known to the public or otherwise ceases to be a trade secret, through no
act or omission of the Employee in violation of this Agreement; (iii) is
required to be disclosed pursuant to applicable laws, rules or regulations or
government requirement or court order (provided, however, that Employee shall
promptly advise the Employer of its notice of any such requirement or order);
(v) is already rightfully in the Employee's possession at the time of
disclosure; (vi) is independently developed by or for the Employee; or (vii) is
received by the Employee from another person or entity whom the Employee
reasonably believes is not obligated to the Employer to keep the same
confidential.
8. Inventions and Other Intellectual Property. The Employee hereby agrees that
all right, title and interest in and to all of the Employee's "Discoveries" and
work product made during the term of employment related to the business of the
Employer or its affiliates, whether pursuant to this Agreement or otherwise,
shall belong solely to the Employer and its affiliates, whether or not they are
protected or protectable under applicable patent, trademark, service mark,
copyright or trade secret laws. For purposes of this Section 8, "Discoveries"
means all inventions, designs, discoveries, improvements and works of
authorship, including, without limitation, any information relating to the
Employer's, and its affiliates' know-how, processes, designs, computer programs
and routines, formulae, techniques, developments or experimental work, or
work-in-progress made or conceived or reduced to practice by the Employer. The
Employee agrees that all work or other material containing or reflecting any
Discoveries and work product shall be deemed to be work made for hire and shall
be owned by the Employer and its affiliates without further consideration. If it
is determined that any works not works made for hire, the Employee hereby
assigns to the Employer and its affiliates all of the Employee's right, title
and interest, including all rights of copyright, patent, and other intellectual
property rights, to or in such Discoveries or work product. The Employee
covenants that she shall keep the Employer and its affiliates informed of the
development of all Discoveries or work product made, conceived or reduced to
practice by the Employer and its affiliates, in whole or in part, alone or with
others, which either result from any work the Employee may do for, or at the
request of, the Employer and its affiliates, or are related to the Employer's
and its affiliates present or contemplated activities, investigations, or
<PAGE>
obligations. The Employee further agrees that at the Employer's and its
affiliates request and expense, she will execute any assignments or other
documents necessary to transfer any such Discoveries or work product to the
Employer and its affiliates and to cooperate with the Employer and its
affiliates or its nominee in perfecting the Employer's and its affiliates' title
(or the title of the Employer's or its affiliates nominee) in such materials.
The employee grants the Employer and its affiliates a permanent, non-exclusive,
paid-up and worldwide license under the Employee intellectual property rights in
any Discoveries or work product that is delivered to the Employer and its
affiliates by the Employee in connection with the performance of services for
the Employer and its affiliates to use, have used, make, have made, sell and
have sold such Discoveries and reproduce in quantities, prepares derivative
works and publicly display and distribute such work product.
9. Successors; Binding Agreement. The Employer will use its commercially
reasonable best efforts to require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Employer, by agreement in form and substance
satisfactory to the Employee, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Employer would be
required to perform it if no such succession had taken place. Failure of the
Employer to obtain such agreement prior to the effectiveness of any such
succession, however, shall not be a breach of this Agreement.
Employee shall not have the right to assign any obligation or benefit under this
Agreement to any person. This Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee's personal or
legal representatives, executors, administrators, successors, heirs,
distributes, devises and legatees. If the Employee should die or is legally
incapacitated while any amounts would still be payable to her hereunder if she
had continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the Employee's
devisee, legatee, or other designee or, if there be no such designee, to the
Employee's estate.
10. Return of Property. Upon the termination of the employment of Employee, all
property (including, but not limited to, keys, records, notes, data, memoranda,
models, credit cards and equipment) that is in the Employee's possession or
under the Employee's control, which is the property of the Company or related to
Company will be returned to Company by Employee or destroyed at the direction of
the Company, which destruction will be certified by Employee.
11. Indemnification. Employee is entitled to the rights of indemnification
available to officers and directors under the corporation law of the state of
incorporation of the Company and, if any, the provisions of the certificate of
incorporation and by-laws of the Company. To this end, simultaneous with the
execution of this Employment Agreement, the Company will enter into a more
formal Indemnification Agreement with Employee in substantially the same format
as is attached hereto on Exhibit 1. If the Company obtains director and officer
liability insurance or similar insurance coverage it will provide that Employee
will be covered thereunder at all times during which Employee is a director or
an officer of the Company.
12. Notice. For the purposes of this Agreement, notices, demands and all other
communications provided for in the Agreement shall be in writing and shall be
<PAGE>
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed as follows:
if to the Employee: LeAnna Sidhu
8936 Echo Ridge Drive
Las Vegas, NV 89117
if to the Employer: YouTicket.com Inc.
4420 S. Arville, Suite 13 and 14
Las Vegas, NV 89103
with a copy to: Andrew Hudders
Graubard Mollen & Miller
600 Third Avenue
New York, NY 10016
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
13. Miscellaneous. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by the Employee and the Employer. No waiver by either party hereto at any
time of any breach by the other hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party that are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Nevada.
14. Validity. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
15. Counterparts. This Agreement maybe executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Construction. It will be an irrefutable presumption that this agreement was
drafted by the Company and the Employee. The parties hereto also acknowledge the
ability and opportunity to have this agreement reviewed by independent counsel
of their own choosing prior to signing.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first above written.
YOUTICKET.COM INC.: EMPLOYEE:
By: ___________________________________ By: ______________________
Virginia Thompson, Authorized Signatory LeAnna Sidhu
<PAGE>
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement"), dated as of
this 20th day of December, 1999, is made by and between YouTicket.com, Inc., a
Nevada corporation (the "Company") and Leanna Sidhu (the "Indemnitee"), an
"agent" (as hereinafter defined) of the Company.
RECITALS
A. The Company recognizes that competent and experienced
persons are increasingly reluctant to serve as directors or officers of
corporations unless they are protected by comprehensive liability insurance or
indemnification, or both, due to increased exposure to litigation costs and
risks resulting from their service to such corporations, and due to the fact
that the exposure frequently bears no reasonable relationship to the
compensation of such directors and officers; and
B. The statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous, or conflicting,
and therefore fail to provide such directors and officers with adequate,
reliable knowledge of legal risks to which they are exposed or information
regarding the proper course of action to take; and
C. The Company and Indemnitee recognize that plaintiffs often
seek damages in such large amounts and the costs of litigation may be so
enormous (whether or not the case is meritorious), that the defense and/or
settlement of such litigation is often beyond the personal resources of officers
and directors; and
D. The Company believes that it is unfair for its directors
and officers to assume the risk of huge judgments and other expenses which may
occur in cases in which the director or officer received no personal profit and
in cases where the director or officer acted in good faith; and
E. The Company, after reasonable investigation, has determined
that the liability insurance coverage presently available to the Company
provides only limited protection and may not continue to be available at
acceptable premium rates. The Company believes that the interests of the Company
and its stockholders would best be served by a combination of such insurance (to
the extent it remains reasonably available) and the indemnification by the
Company of the directors and officers of the Company; and
F. Chapter 78 of the General Corporation Law of Nevada
("Chapter 78"), under which the Company is organized, empowers the Company to
indemnify its officers, directors, employees and agents by agreement and to
indemnify persons who serve, at the request of the Company, as the directors,
officers, employees or agents of other corporations or enterprises, and
expressly provides that the indemnification provided by Chapter 78 is not
exclusive; and
G. The board of directors of the Company (the "Board of
Directors") has determined that contractual indemnification as set forth herein
is not only reasonable and prudent but necessary to promote the best interests
of the Company and its stockholders; and
H. The Company desires and has requested the Indemnitee to
serve or continue to serve as a director or officer of the Company free from
undue concern for claims for damages arising out of or related to such services
to the Company; and
<PAGE>
I. The Indemnitee is willing to serve, or to continue to serve
as a director or officer of the Company, provided that the Indemnitee is
furnished the indemnity provided for herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Definitions.
(a) Agent. For purposes of this Agreement, "agent" of the
Company means any person who (i) is or was a director, officer, employee or
other agent of the Company or a subsidiary of the Company or (ii) is or was
serving at the request of, for the convenience of, or to represent the interests
of the Company or a subsidiary of the Company as a director, officer, employee
or agent of another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise.
(b) Expenses. For purposes of this Agreement, "expenses"
include all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys' fees and related disbursements,
other out-of-pocket costs and reasonable compensation for time spent by the
Indemnitee for which he is not otherwise compensated by the Company or any third
party, provided that the rate of compensation and estimated time involved are
approved in advance by the Board of Directors), actually and reasonably incurred
by the Indemnitee in connection with the investigation, defense or appeal of a
proceeding or establishing or enforcing a right to indemnification under this
Agreement; Chapter 78 or otherwise, and amounts paid in settlement by or on
behalf of the Indemnitee, but shall not include any judgments, fines or
penalties actually levied against the Indemnitee.
(c) Proceeding. For the purposes of this Agreement
"proceeding" means any threatened, pending, or completed action, suit or other
proceeding, whether civil, criminal, administrative, investigative or any other
type whatsoever.
(d) Subsidiary. For purposes of this Agreement, "subsidiary"
means any corporation of which more than fifty percent (50%) of the outstanding
voting securities are owned directly or indirectly by the Company, by the
Company and one or more other subsidiaries, or by one or more subsidiaries.
(e) Other Enterprise; Fines; Serving at the Request of the
Company. For Purposes of this Agreement, "other enterprise shall include
employee benefit plans; reference to "fines" shall include any excise tax
assessed with respect to any employee benefit plans; and references to "serving
at the request of the Company" shall include any service as a director, officer,
employee or agent of the Company which imposes duties on, or involves services
by, such director, officer, employee or agent with respect to any employee
benefit plan, its participants, or beneficiaries.
2. Agreement to Serve. The Indemnitee agrees to serve and/or continue
to serve as an agent of the Company at its will (or under separate agreement, if
such agreement exists), in the capacity the Indemnitee currently serves as an
agent of the Company, so long as the Indemnitee is duly appointed or elected and
qualified in accordance with the applicable provisions of the bylaws of the
Company or any subsidiary of the Company or until such time as the Indemnitee
<PAGE>
tenders his resignation in writing; provided, however, that nothing contained in
this Agreement is intended to create any right to continued employment of the
Indemnitee in any capacity or to adversely affect the rights of Indemnitee under
any indemnity agreement executed after the date hereof.
3. Indemnity in Third Party Proceedings and Derivative Actions. Subject
to Section 10 below, the Company shall indemnify the Indemnitee if the
Indemnitee is a party to or threatened to be made a party to or otherwise
involved in any proceeding (including a proceeding by or in the name of the
Company to procure a judgment in its favor) by reason of the fact that the
Indemnitee is or was an agent of the Company, or by reason of any act or
inaction by him in any such capacity, against any and all expenses and
liabilities of any type whatsoever (including, but not limited to, judgments,
fines and penalties), actually and reasonably incurred by him in connection with
the investigation, defense, settlement or appeal of such proceeding.
4. Indemnification of Expenses of Successful Party. In addition to any
other indemnity provided by this Agreement, to the extent that the Indemnitee
has been successful on the merits or otherwise in defense of any proceedings or
in defense of any claim, issue or matter therein, including the dismissal of any
action without prejudice, the Company shall indemnify the Indemnitee against all
expenses actually and reasonably incurred in connection with the investigation,
defense or appeal of such proceeding.
5. Partial Indemnification. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fines or penalties) actually and reasonably incurred
by him in the investigation, defense, settlement or appeal of a proceeding but
is not entitled, however, to indemnification for the total amount thereof, the
Company shall nevertheless indemnify the Indemnitee for the portion thereof to
which the Indemnitee is entitled.
6. Advancement of Expenses. Subject to Section 10 (b) below, the
Company shall advance reasonable expenses incurred by the Indemnitee in
connection with the investigation, defense, settlement or appeal of any
proceeding to which the Indemnitee is a party or is threatened to be made a
party by reason of the fact that the Indemnitee is or was an agent of the
Company. The Indemnitee hereby undertakes to repay such amounts advanced only
if, and to the extent that, it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified by the Company as authorized by
this Agreement. The advances to be made hereunder shall be paid by the Company
to or on behalf of the Indemnitee within thirty (30) days following delivery of
a written request with sufficient back-up therefor by the Indemnitee to the
Company.
7. Notice and Other Indemnification Procedures
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of or the threat of commencement of any proceeding, the Indemnitee
shall, if the Indemnitee believes that indemnification with respect thereto may
be sought from the Company under this Agreement, notify the Company of the
commencement or threat of commencement thereof.
(b) Any indemnification requested by the Indemnitee under
Section 3 hereof shall be made no later than thirty (30) days after receipt of
the written request of Indemnitee, unless a good faith determination is made
within said thirty (30) day period (i) by the Board of Directors of the Company
by a majority vote of a quorum thereof consisting of directors who are
disinterested in such proceedings, or (ii) in the event such a quorum is not
obtainable, at the election of the Company, either by independent legal counsel
in a written opinion addressed to the Indemnitee or by a panel of arbitrators,
<PAGE>
one of whom is selected by the Indemnitee, one of whom is selected by the
Company, and the last of whom is selected by the first two arbitrators so
selected, that the Indemnitee is not or (subject to final judgment or other
final adjudication as provided in Section 10 (a) below) ultimately will not be
entitled to indemnification hereunder.
(c) The Company shall indemnify the Indemnitee against all
expenses incurred in connection with any hearing or proceeding under this
Section 7 if the Indemnitee prevails in such hearing or proceeding.
(d) The Indemnitee shall indemnify the Company against all
expenses incurred in connection with any hearing or proceeding under this
Section 7 if the Company prevails in such hearing or proceeding.
8. Assumption of Defense. In the event the Company shall be obligated
to pay the expenses of any proceeding against the Indemnitee, the Company, if
appropriate, shall be entitled to assume the defense of such proceeding, with
counsel reasonably acceptable to the Indemnitee, upon the delivery to the
Indemnitee of written notice of its election to do so. After delivery of such
notice, approval of such counsel by the Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to the Indemnitee under
this Agreement for any fees of counsel subsequently incurred by the Indemnitee
with respect to the same proceeding, provided that (i) the Indemnitee shall have
the right to employ his counsel in such proceeding at the Indemnitee's expense;
and (ii) if (a) the employment of counsel by the Indemnitee has been previously
authorized in writing by the Company, (b) the Company shall have reasonably
concluded that there may be a conflict of interest between the Company and the
Indemnitee in the conduct of any such defense, or (c) the Company shall not, in
fact, have employed counsel to assume the defense of such proceeding within a
reasonable time, the fees and expenses of the Indemnitee's counsel shall be at
the expense of the Company.
9. Insurance. The Company may, but is not obligated to obtain
directors' and officers' liability insurance ("D&O Insurance") as may be or
become available with respect to which the Indemnitee is named as an insured.
Notwithstanding any other provision of this Agreement, the Company shall not be
obligated to indemnify the Indemnitee for expenses, judgments, fines or
penalties which have been paid directly to the Indemnitee by D&O Insurance. If
the Company has D&O Insurance in effect at the time the Company receives from
the Indemnitee any notice of the commencement of a proceeding, the Company shall
give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the policy. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such proceeding
in accordance with the terms of such policy.
10. Exceptions. Any provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:
(a) Certain Matters. To indemnify the Indemnitee on account of
any proceeding with respect to (i) which final judgment is rendered against the
Indemnitee for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the provisions of Section 16
(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of
any federal, state or local statute, including any statute which makes
actionable the use of non-public information or self-dealing or (ii) any
proceeding to the extent it is determined by final judgment or other final
adjudication that the Indemnitee's conduct was grossly negilgent, intentionally
fraudulent, criminal or in bad faith and not believed by the Indemnitee to be in
the best interests of the Company. For purposes of the foregoing sentence, a
<PAGE>
final judgment or other adjudication may be reached in either the underlying
proceeding or action in connection with which indemnification is sought or a
separate proceeding or action to establish rights and liabilities under this
Agreement; or
(b) Claims Initiated by Indemnitee. To indemnify or advance
expenses to the Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by the Indemnitee and not by way of defense, except with
respect to proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or otherwise as
required under Chapter 78, but such indemnification or advancement of expenses
may be provided by the Company in specific cases if the Board of Directors finds
it to be appropriate; or
(c) Action for Indemnification. To indemnify the Indemnitee
for any expenses incurred by the Indemnitee with respect to any proceeding
instituted by the Indemnitee to enforce or interpret this Agreement if the
Indemnitee does not prevail in such proceeding; or
(d) Unauthorized Settlements. To indemnify the Indemnitee
under this Agreement for any amounts paid in settlement of a proceeding effected
without the Company's written consent. The Company shall not settle any
proceeding without the Indemnitee's written consent. Neither the Company nor the
Indemnitee will unreasonably withhold consent to any proposed settlement;
provided, however, that the Company may in any event decline to consent to (or
to otherwise admit or agree to any liability for indemnification hereunder in
respect of) any proposed settlement if the Company determines (pursuant to
Section 7 (b) above) that the Indemnitee is not or ultimately will not be
entitled to indemnification hereunder; or
(e) Securities Act Liabilities. To Indemnify the Indemnitee or
otherwise act in violation of any undertaking in any registration statement
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Act"). The Indemnitee acknowledges that paragraph (i) of
Item 512 of Regulation S-K currently generally requires the Company to undertake
in connection with any registration statement filed under the Act to submit the
issue of the enforceability of the Indemnitee's rights under this Agreement in
connection with any liability under the Act on public policy grounds to a court
of appropriate jurisdiction and to be governed by any final adjudication of such
issue. The Indemnitee specifically agrees that any such undertaking shall
supersede the provisions of this Agreement and to be bound by any such
undertaking.
11. Non-Exclusivity. The provisions for indemnification and advancement
of expenses set forth in this Agreement shall not be deemed exclusive of any
other rights which the Indemnitee may have under any provision of law, the
Company's Certificate of Incorporation or Bylaws, in any court in which a
proceeding is brought, the vote of the Company's stockholders or disinterested
directors, other agreements or otherwise, both as to action in the Indemnitee's
official capacity and to action in another capacity while occupying his position
as an agent of the Company, and the Indemnitee's rights hereunder shall continue
after the Indemnitee has ceased acting as an agent of the Company and shall
inure to the benefit of the heirs, executors and administrators of the
Indemnitee.
12. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall execute all papers reasonably required
and shall do everything reasonably requested to secure such rights, including
the execution of such documents to enable the Company effectively to bring suit
to enforce such rights.
<PAGE>
13. Interpretation of Agreement. It is understood that the parties
hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent now or hereafter
permitted by law.
14. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever
in a jurisdiction, (i) the validity, legality and enforceability of the
remaining provisions of this Agreement (including without limitation all
portions of any paragraphs of this Agreement containing any such provision held
to be invalid, illegal or unenforceable) shall not in any way be affected or
impaired thereby in such jurisdiction, (ii) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, all portions of any
paragraph of this Agreement containing any such provision held to be invalid,
illegal, or unenforceable in such jurisdiction, and (iii) such invalidity,
illegality or unenforceability shall not affect the interpretation or
enforceability of this Agreement in any other jurisdiction.
15. Modification and Waiver. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
16. Successors and Assigns. The terms of this Agreement shall bind, and
shall inure to the benefit of, the successors and assigns of the parties hereto.
17. Notice. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
by telegram, telecopy or telex, upon answer back or other similar acknowledgment
of receipt, (ii) if delivered by hand and receipted for by the party addressee
or (iii) if mailed by certified or registered mail with postage prepaid, upon
actual receipt. Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written notice.
The address of Company for purposes of this paragraph is as follows:
YouTicket.com inc.
4420 S. Arville St., Suites 13 and 14
Las Vegas, NV 89103
Address for Indemnitee shall be as follows:
LeAnna Sidhu
8936 Echo Ridge Drive
Las Vegas, NV 89117
18. Governing Law. This Agreement shall be governed exclusively by and
construed according to the laws of the state of Nevada, as applied to contracts
between Nevada residents entered into and to be performed within and outside of
the state of Nevada.
<PAGE>
19. Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto and supersedes and replaces any and all prior agreements
and understandings, whether oral or written, express or implied, between the
parties with respect to the subject matter herein.
YOUTICKET.COM, INC. THE INDEMNIFIED PARTY:
A Nevada Corporation
By:
________________________________ ______________________________
Brice Scheschuk, LeAnna Sidhu
Authorized Signatory
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is entered into as of November 22,
1999 by and between YouTicket.com inc. ("UTIX"), a Nevada corporation and
Reservision, Inc. ("Consultant"), a Michigan Corporaton.
RECITALS
A. UTIX is a public-company whose Common Stock, with a par value of $.0001 per
share is quoted on the OTC Bulletin Board. UTIX is in the business of selling
tickets and tourist attractions on the Internet.
B. Consultant has experience developing web sites.
C. UTIX wishes to contract for web site development technical expertise.
AGREEMENT
NOW, THEREFORE, it is mutually agreed by and between the Parties as follows:
1. CONSULTING SERVICES. The consulting services contemplated by this Agreement
(the "Consulting Services") shall consist of approximately 40 hours (per
month) of development and support as needed to maintain and improve the
site and may include the following:
a) Develop the UTIX web site to incorporate new services as they are
contracted. Examples of new services include hotel room reservations,
golf reservations, weddings, etc. Technical development can range from
providing HTML to a co-branded web site to more complex back-end
development.
b) Perform routine maintenance on the UTIX web site to ensure it is
functioning appropriately.
c) Identify, recommend and implement key opportunities to build and retain
a steady stream of visitors to YouTicket.com.
d) Optimize the presence of YouTicket.com at the top Internet search
engines.
2. WORK FOR HIRE AND ASSIGNMENT OF PROPRIETARY RIGHTS. Consultant agrees that
any and all changes or suggested changes to any of the Company's assets,
including but not limited to the Company's web sites, that are considered
original works of authorship that are made by Consultant (either solely or
jointly with others) within in the scope of the services provided under
this Agreement and which are protectable by copyright are "works for hire"
pursuant to the United States Copyright Act (17 U.S.C., Section 10).
Consultant hereby assigns and agrees to assign in the future (when first
reduced to practice or first fixed in any tangible medium, as applicable)
to the Company, all Consultant's right, title and interest in and to any
and all Proprietary Rights and Proprietary Information whether or not
patentable or registrable under copyright or similar statutes, made or
conceived or reduced to practice or learned by Consultant, either alone or
<PAGE>
jointly with others, during the period of consulting services under this
Agreement. The term "Proprietary Rights" shall mean all trade secret,
patents, copyright, mask work and other intellectual property rights
throughout the world. The term "Proprietary Information" shall mean (i)
trade secrets, inventions, ideas, processes, formulas, source and object
codes, data, programs, other works of authorship, know-how, improvements,
discoveries, developments, designs and techniques, (ii) information
regarding plans for research, development, new products, marketing and
selling, business plans, budgets and unpublished financial statements,
licenses, prices and costs, suppliers and customers, and (iii) information
regarding the skills and compensation of other employees of the Company.
3. DUTIES EXPRESSLY EXCLUDED. This Agreement expressly excludes the Consultant
from providing any and all capital formation and/or public relations
services to the Company inclusive of, but not limited to (i) direct or
indirect promotion of the Company's securities; (ii) assistance in making
of a market in the Company's securities; and (iii) assistance in obtaining
debt and/or equity financing.
4. CONSIDERATION. The Company shall pay to the Consultant in accordance with
the Schedule set forth below as consideration for the services herein:
a) $3,500 per month (beginning on November 22, 1999), and
b) 15,000 non-qualified common stock purchase options per month
(beginning on November 22, 1999) with an exercise price of $0.01 per
option pursuant to a plan, a vesting date of six months from the date
of each month's issuance and an expiration date of four years from the
date of each month's issuance. The common stock underlying the options
will be registered with the Securities and Exchange Commission ("SEC")
by filing a Form S-8 at the Consultant's request, such request not to
be earlier than ninety (90) days after the Company's Form 10-SB is
effective with the SEC. The number of options will be adjusted
proportionately for any comprehensive changes in the company's capital
structure including stock splits, stock dividends, etc.
5. EXPENSES. UTIX shall bear the Consultant's out-of-pocket costs and expenses
to perform the Consulting Services as long as such costs are pre-approved
by UTIX.
6. TERM. The term of this Agreement commences November 22, 1999 and continues
until terminated by either party (the "Term"). This agreement may be
terminated by either party upon 10 days written notice or in the event
Consultant is in default (as defined below) in the performance of the
Consulting Services, which default is not cured within 10 days following
written notice thereof from UTIX. A "default" occurs when, in UTIX's sole
and exclusive judgment, Consultant is not satisfactorily performing the
Consulting Services.
7. CONSULTANT'S LIABILITY. In the absence of gross negligence or willful
misconduct on the part of the Consultant or the Consultant's breach of any
term of this Agreement, the Consultant shall not be liable to the Company
or to any officer, director, employee, shareholder or creditor of the
Company, for any act or omission in the course of or in connection with the
rendering or providing of services hereunder. Except in those cases where
gross negligence or willful misconduct of the Consultant or the breach by
the Consultant of any terms of this Agreement is alleged and proven, the
<PAGE>
Company agrees to defend, indemnify, and hold the Consultant harmless from
and against any and all reasonable costs, expenses and liability (including
reasonable attorney's fees paid in the defense of the Consultant) which may
in any way result from services rendered by the Consultant pursuant to or
in connection with this Agreement. This indemnification expressly excludes
any and all damages as a result of any actions or statements, on behalf of
the Company, made by the Consultant without the prior approval or
authorization of the Company.
8. COMPANY'S LIABILITY. The Consultant agrees to defend, indemnify, and hold
the Company harmless from and against any and all reasonable costs,
expenses and liability (including reasonable attorney's fees paid in
defense of the Company) which may in any way result pursuant to its gross
negligence or willful misconduct or in any connection with any actions
taken or statements made, on behalf of the Company, without the prior
approval or authorization of the Company or which are otherwise in
violation of applicable law.
9. CONSULTANT'S REPRESENTATIONS. The Consultant makes the following
representations:
a) Consultant has no prior or existing legally binding obligations that
are in conflict with its entering into this Agreement;
b) Consultant shall not offer or make payment of any consideration to
brokers, dealers, or others for purposes of inducing the purchase,
making of a market or recommendation for the purchase of the Company's
securities;
c) Consultant is not currently the subject of an investigation or inquiry
by the Securities and Exchange Commission, the NASD, or any state
securities commission;
d) Consultant's activities and operations fully comply with now and will
comply with in the future all applicable state and federal securities
laws and regulations;
e) Consultant understands that, as a result of its services, it may come
to possess material non-public information about the Company, and that
it has implemented internal control procedures designed to reasonably
insure that none of its employees, agents, consultants or affiliates,
trade in the securities of client companies while in possession of
material non-public information;
f) The Consultant at all times shall treat as the Company's confidential
trade secrets all data, information, ideas, knowledge and papers
pertaining to the affairs of the Company. Without limiting the
generality of the foregoing such trade secrets shall include: the
identity of the Company's customers, suppliers and prospective
customers and suppliers; the identity of the Company's creditors and
other sources of financing, the Company's estimating and costing
procedure and the cost and gross prices charged by the Company for its
products; the prices or other consideration charged to or required of
the Company by any of the suppliers or potential suppliers; the
Company's sales and promotional policies; and all information relating
to entertainment programs or properties being produced or otherwise
developed by the Company. The Consultant shall not reveal said trade
<PAGE>
secrets to others except in the proper exercise of its duties for the
Company, or use their knowledge thereof in any way that would be
detrimental to the interest of the Company unless compelled to
disclose such information by judicial or administrative process;
provided, however, that the divulging of information shall not be a
breach of this Agreement to the extent that such information was (i)
previously known by the party to which it is divulged, (ii) already in
the public domain, all through no fault of the Consultant, or (iii)
required to be disclosed by Consultant pursuant to judicial or
governmental order. The Consultant shall also treat all information
pertaining to the affairs of the Company's suppliers and customers and
prospective customers and suppliers as confidential trade secrets of
such customers and suppliers and prospective customers and suppliers;
and
g) Consultant agrees to notify the Company immediately if, at any time,
any of the representations and warranties made by the Consultant
herein are no longer true and correct or if a breach of any of the
representations and warranties made by the Consultant herein occurs.
10. COMPANY REPRESENTATIONS. The Company makes the following representations:
a) The Company is in good standing in the state of incorporation, Nevada.
11. ENTIRETY OF AGREEMENT. This Agreement sets forth the entire understanding
of the Parties with respect to the matters contemplated hereby. Any and all
previous agreements and understandings between or among the Parties
regarding the subject matter hereof, whether written or oral, are
superseded by this Agreement. This Agreement shall not be amended or
modified except by written instrument duly executed by each of the Parties.
12. ASSIGNMENT AND BINDING EFFECT. This Agreement may not be assigned without
the prior written consent of the other Party.
13. WAIVER. Any term or provision of this Agreement may be waived at any time
by the Party entitled to the benefit thereof by a written instrument duly
executed by such Party.
<PAGE>
14. NOTICES. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted hereunder shall be in writing
and shall be deemed given only if delivered personally or sent by
facsimile, or by registered or certified mail, postage prepaid, as follows:
If to UTIX to:
YouTicket.com inc.
4420 S. Arville St., Suite 13 and 14
Las Vegas, NV 89103
If to Consultant, to:
Reservision Inc.
216 E. Huron
Ann Arbor, MI 48104
or to such other address as the addressee may have specified in a
notice duly given to the sender as provided herein. Such notice, request,
demand, waiver, consent, approval or other communications will be deemed to have
been given as of the date so delivered, telephoned or mailed.
15. GOVERNING LAW. This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of Nevada.
16. NO BENEFIT TO OTHERS. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the
Parties hereto.
17. SEVERABILITY. Any provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of
such invalidity or unenforceability in such jurisdiction without
invalidating or rendering unenforceable the remaining provisions hereof,
and any such invalidity or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
18. HEADINGS. The headings of this Agreement are inserted solely for the
convenience of reference and are not part of, and are not intended to
govern, limit or aid in the construction of any term or provision hereof.
19. FURTHER ACTS. Each party agrees to perform any further acts and execute and
deliver any further documents that may be reasonably necessary to carry out
the provisions and intent of this Agreement.
20. ACKNOWLEDGMENT CONCERNING COUNSEL. Each party acknowledges that it had the
opportunity to employ separate and independent counsel of its own choosing
in connection with this Agreement.
<PAGE>
21. INDEPENDENT CONTRACTOR STATUS. There is no relationship, partnership,
agency, employment, franchise OR joint venture between the parties. The
parties have no authority to bind the other or incur any obligations on
their behalf.
22. COUNTERPARTS. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the date first above written.
YOUTICKET.COM INC.
A Nevada corporation
By: ____________________
Name: LeAnna Sidhu, President and Director
-----
An _____
By: ____________________
Name: _____, Authorized Signatory
Approved by Board of Directors on September 30, 1999
Approved by Stockholders on ______, 2000
YOUTICKET.COM INC.
1999 Performance Equity Plan
Section 1. Purpose; Definitions.
1.1 Purpose. The purpose of the youticket.com inc. (the "Company") 1999
Performance Equity Plan (the "Plan") is to enable the Company to offer to its
key employees, officers, directors and consultants whose past, present and/or
potential contributions to the Company and its Subsidiaries have been, are or
will be important to the success of the Company, an opportunity to acquire a
proprietary interest in the Company. The various types of long-term incentive
awards which may be provided under the Plan will enable the Company to respond
to changes in compensation practices, tax laws, accounting regulations and the
size and diversity of its businesses.
1.2 Definitions. For purposes of the Plan, the following terms
shall be defined as set forth below:
(a) "Agreement" means the agreement between the Company and
the Holder setting forth the terms and conditions of an award under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto and the regulations promulgated
thereunder.
(d) "Committee" means the Compensation Committee of the Board
or any other committee of the Board, which the Board may designate to administer
the Plan or any portion thereof. If no Committee is so designated, then all
references in this Plan to "Committee" shall mean the Board.
(e) "Common Stock" means the Common Stock of the Company, par
value $.0001 per share.
(f) "Company" means youticket.com inc., a corporation
organized under the laws of the State of Nevada.
(g) "Deferred Stock" means Stock to be received, under an
award made pursuant to Section 9, below, at the end of a specified deferral
period.
(h) "Disability" means disability as determined under
procedures established by the Committee for purposes of the Plan.
(i) "Effective Date" means the date set forth in Section 13.1,
below.
(j) "Fair Market Value", unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, means, as
of any given date: (i) if the Common Stock is listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the
last sale price of the Common Stock in the principal trading market for the
Common Stock on the last trading day preceding the date of grant of an award
hereunder, as reported by the exchange or Nasdaq, as the case may be; (ii) if
the Common Stock is not listed on a national securities exchange or quoted on
the Nasdaq National Market or Nasdaq SmallCap Market, but is traded in the
over-the-counter market, the closing bid price for the Common Stock on the last
trading day preceding the date of grant of an award hereunder for which such
quotations are reported by the OTC Bulletin Board or the National Quotation
<PAGE>
Bureau, Incorporated or similar publisher of such quotations; and (iii) if the
fair market value of the Common Stock cannot be determined pursuant to clause
(i) or (ii) above, such price as the Committee shall determine, in good faith.
(k) "Holder" means a person who has received an award under
the Plan.
(l) "Incentive Stock Option" means any Stock Option intended
to be and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(m) "Nonqualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
(n) "Normal Retirement" means retirement from active
employment with the Company or any Subsidiary on or after age 65.
(o) "Other Stock-Based Award" means an award under Section 10,
below, that is valued in whole or in part by reference to, or is otherwise based
upon, Stock.
(p) "Parent" means any present or future parent corporation of
the Company, as such term is defined in Section 424(e) of the Code.
(q) "Plan" means the youticket.com inc. 1999 Performance
Equity Plan, as hereinafter amended from time to time.
(r) "Restricted Stock" means Stock, received under an award
made pursuant to Section 8, below, that is subject to restrictions under said
Section 8.
(s) "SAR Value" means the excess of the Fair Market Value (on
the exercise date) of the number of shares for which the Stock Appreciation
Right is exercised over the exercise price that the participant would have
otherwise had to pay to exercise the related Stock Option and purchase the
relevant shares.
(t) "Stock" means the Common Stock of the Company, par value
$.0001 per share.
(u) "Stock Appreciation Right" means the right to receive from
the Company, on surrender of all or part of the related Stock Option, without a
cash payment to the Company, a number of shares of Common Stock equal to the SAR
Value divided by the exercise price of the Stock Option.
(v) "Stock Option" or "Option" means any option to purchase
shares of Stock which is granted pursuant to the Plan.
(w) "Stock Reload Option" means any option granted under
Section 6.3, below, as a result of the payment of the exercise price of a Stock
Option and/or the withholding tax related thereto in the form of Stock owned by
the Holder or the withholding of Stock by the Company.
(x) "Subsidiary" means any present or future subsidiary
corporation of the Company, as such term is defined in Section 424(f) of the
Code.
Section 2. Administration.
2.1 Committee Membership. The Plan shall be administered by the Board
or a Committee. Committee members shall serve for such term as the Board may in
each case determine, and shall be subject to removal at any time by the Board.
The Committee members, to the extent possible, shall be "non-employee" as
defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended.
2.2 Powers of Committee. The Committee shall have full authority to
award, pursuant to the terms of the Plan: (i) Stock Options, (ii) Stock
3181.1
<PAGE>
Appreciation Rights, (iii) Restricted Stock, (iv) Deferred Stock,(v) Stock
Reload Options and/or (vi) Other Stock-Based Awards. For purposes of
illustration and not of limitation, the Committee shall have the authority
(subject to the express provisions of this Plan):
(a) to select the officers, key employees, directors and
consultants of the Company or any Subsidiary to whom Stock Options, Stock
Appreciation Rights, Restricted Stock, Deferred Stock, Reload Stock Options
and/or Other Stock-Based Awards may from time to time be awarded hereunder.
(b) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, number of shares, share price or other consideration, such as other
securities of the Company or other property, any restrictions or limitations,
and any vesting, exchange, surrender, cancellation, acceleration, termination,
exercise or forfeiture provisions, as the Committee shall determine);
(c) to determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an award
granted hereunder;
(d) to determine the terms and conditions under which awards
granted hereunder are to operate on a tandem basis and/or in conjunction with or
apart from other equity awarded under this Plan and cash awards made by the
Company or any Subsidiary outside of this Plan;
(e) to permit a Holder to elect to defer a payment under the
Plan under such rules and procedures as the Committee may establish, including
the crediting of interest on deferred amounts denominated in cash and of
dividend equivalents on deferred amounts denominated in Stock;
(f) to determine the extent and circumstances under which
Stock and other amounts payable with respect to an award hereunder shall be
deferred which may be either automatic or at the election of the Holder; and
(g) to substitute (i) new Stock Options for previously granted
Stock Options, which previously granted Stock Options have higher option
exercise prices and/or contain other less favorable terms, and (ii) new awards
of any other type for previously granted awards of the same type, which
previously granted awards are upon less favorable terms.
2.3 Interpretation of Plan.
(a) Committee Authority. Subject to Section 12, below, the
Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any award issued under the Plan (and to determine the form and
substance of all Agreements relating thereto), and to otherwise supervise the
administration of the Plan. Subject to Section 12, below, all decisions made by
the Committee pursuant to the provisions of the Plan shall be made in the
Committee's sole discretion and shall be final and binding upon all persons,
including the Company, its Subsidiaries and Holders.
(b) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term or provision of the Plan relating to Incentive
Stock Options (including but limited to Stock Reload Options or Stock
Appreciation rights granted in conjunction with an Incentive Stock Option) or
any Agreement providing for Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify the Plan under Section 422 of the Code, or,
without the consent of the Holder(s) affected, to disqualify any Incentive Stock
Option under such Section 422.
Section 3. Stock Subject to Plan.
3.1 Number of Shares. The total number of shares of Common Stock
reserved and available for distribution under the Plan shall be 3,000,000
shares. Shares of Stock under the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares. If any shares of Stock that
<PAGE>
have been granted pursuant to a Stock Option cease to be subject to a Stock
Option, or if any shares of Stock that are subject to any Stock Appreciation
Right, Restricted Stock, Deferred Stock Award, Reload Stock Option or Other
Stock-Based Award granted hereunder are forfeited or any such award otherwise
terminates without a payment being made to the Holder in the form of Stock, such
shares shall again be available for distribution in connection with future
grants and awards under the Plan. Only net shares issued upon a stock-for-stock
exercise (including stock used for withholding taxes) shall be counted against
the number of shares available under the Plan.
3.2 Adjustment Upon Changes in Capitalization, Etc. In the event of any
change in the number of outstanding shares of Common Stock of the Company
occurring as the result of a stock split, reverse stock split or stock dividend
on the Common Stock, after the grant of an Award, the Company shall
proportionately adjust the number of shares of Stock subject to the Award and
the price to be paid on exercise of an Award as well as the aggregate number of
shares reserved for issuance under the Plan. Any right to acquire a fractional
share of Stock resulting from any adjustments will be rounded to the nearest
whole share of Stock. If the Company shall be the surviving corporation in any
merger, combination or consolidation, any outstanding Award shall pertain and
apply to the shares of Stock to which the Holder is entitled, without adjustment
for issuance by the Company of any securities in the merger, combination or
consolidation. In the event of a change in the par value of the Common Stock of
the Company which is subject to any outstanding Award, such Award will be deemed
to pertain to the shares of Stock resulting from any such change. To the extent
that the foregoing adjustments relate to the Common Stock of the Company, the
adjustments will be made by the Committee whose determination will be final,
binding and conclusive.
Section 4. Eligibility.
Awards may be made or granted to key employees, officers,
directors and consultants who are deemed to have rendered or to be able to
render significant services to the Company or its Subsidiaries and who are
deemed to have contributed or to have the potential to contribute to the success
of the Company. No Incentive Stock Option shall be granted to any person who is
not an employee of the Company or a Subsidiary at the time of grant.
Section 5. Required Six-Month Holding Period.
A period of not less than six months must elapse from the date of grant
of an award under the Plan, (i) before any disposition by a Holder of a
derivative security (as defined in Rule 16a-1 promulgated under the Securities
Exchange Act of 1934, as amended) issued under this Plan or (ii) before any
disposition by a Holder of any Stock purchased or granted pursuant to an award
under this Plan.
Section 6. Stock Options.
6.1 Grant and Exercise. Stock Options granted under the Plan may be of
two types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms, not inconsistent
with this Plan, or with respect to Incentive Stock Options, not inconsistent
with the Plan and the Code, as the Committee may from time to time approve. The
Committee shall have the authority to grant Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options and which may be
granted alone or in addition to other awards granted under the Plan. To the
extent that any Stock Option intended to qualify as an Incentive Stock Option
does not so qualify, it shall constitute a separate Nonqualified Stock Option.
An Incentive Stock Option may be granted only within the ten-year period
commencing from the Effective Date and may only be exercised within ten years of
the date of grant (or five years in the case of an Incentive Stock Option
granted to an optionee ("10% Stockholder") who, at the time of grant, owns Stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company.
6.2 Terms and Conditions. Stock Options granted under the Plan shall be
subject to the following terms and conditions:
<PAGE>
(a) Exercise Price. The exercise price per share of Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant and may not be less than 100% of the Fair Market Value of the
Stock as defined above; provided, however, that the exercise price of an
Incentive Stock Option granted to a 10% Stockholder shall not be less than 110%
of the Fair Market Value of the Stock.
(b) Option Term. Subject to the limitations in Section 6.1,
above, the term of each Stock Option shall be fixed by the Committee.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Committee and as set forth in Section 11, below. If the Committee provides,
in its discretion, that any Stock Option is exercisable only in installments,
i.e., that it vests over time, the Committee may waive such installment exercise
provisions at any time at or after the time of grant in whole or in part, based
upon such factors as the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment,
exercise and waiting period provisions are applicable in a particular case,
Stock Options may be exercised in whole or in part at any time during the term
of the Option, by giving written notice of exercise to the Company specifying
the number of shares of Stock to be purchased. Such notice shall be accompanied
by payment in full of the purchase price, which shall be in cash or, unless
otherwise provided in the Agreement, in shares of Stock (including Restricted
Stock and other contingent awards under this Plan) or, partly in cash and partly
in such Stock, or such other means which the Committee determines are consistent
with the Plan's purpose and applicable law. Cash payments shall be made by wire
transfer, certified or bank check or personal check, in each case payable to the
order of the Company; provided, however, that the Company shall not be required
to deliver certificates for shares of Stock with respect to which an Option is
exercised until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof. Payments in the form of Stock
shall be valued at the Fair Market Value of a share of Stock on the date prior
to the date of exercise. Such payments shall be made by delivery of stock
certificates in negotiable form which are effective to transfer good and valid
title thereto to the Company, free of any liens or encumbrances. Subject to the
terms of the Agreement, the Committee may, in its sole discretion, at the
request of the Holder, deliver upon the exercise of a Nonqualified Stock Option
a combination of shares of Deferred Stock and Common Stock; provided that,
notwithstanding the provisions of Section 9 of the Plan, such Deferred Stock
shall be fully vested and not subject to forfeiture. A Holder shall have none of
the rights of a stockholder with respect to the shares subject to the Option
until such shares shall be transferred to the Holder upon the exercise of the
Option.
(e) Transferability. Except as may be set forth in the
Agreement, no Stock Option shall be transferable by the Holder other than by
will or by the laws of descent and distribution, and all Stock Options shall be
exercisable, during the Holder's lifetime, only by the Holder.
(f) Termination by Reason of Death. If a Holder's employment
by the Company or a Subsidiary terminates by reason of death, any Stock Option
held by such Holder, unless otherwise determined by the Committee at the time of
grant and set forth in the Agreement, shall be fully vested and may thereafter
be exercised by the legal representative of the estate or by the legatee of the
Holder under the will of the Holder, for a period of one year (or such other
greater or lesser period as the Committee may specify at grant) from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.
(g) Termination by Reason of Disability. If a Holder's
employment by the Company or any Subsidiary terminates by reason of Disability,
any Stock Option held by such Holder, unless otherwise determined by the
Committee at the time of grant and set forth in the Agreement, shall be fully
vested and may thereafter be exercised by the Holder for a period of one year
(or such other greater or lesser period as the Committee may specify at the time
of grant) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.
(h) Other Termination. Subject to the provisions of Section
14.3, below, and unless otherwise determined by the Committee at the time of
<PAGE>
grant and set forth in the Agreement, if a Holder is an employee of the Company
or a Subsidiary at the time of grant and if such Holder's employment by the
Company or any Subsidiary terminates for any reason other than death or
Disability, the Stock Option shall thereupon automatically terminate, except
that if the Holder's employment is terminated by the Company or a Subsidiary
without cause or due to Normal Retirement, then the portion of such Stock Option
which has vested on the date of termination of employment may be exercised for
the lesser of three months after termination of employment or the balance of
such Stock Option's term.
(i) Additional Incentive Stock Option Limitation. In the case
of an Incentive Stock Option, the aggregate Fair Market Value of Stock
(determined at the time of grant of the Option) with respect to which Incentive
Stock Options become exercisable by a Holder during any calendar year (under all
such plans of the Company and its Parent and Subsidiary) shall not exceed
$100,000.
(j) Buyout and Settlement Provisions. The Committee may at any
time, in its sole discretion, offer to buy out a Stock Option previously
granted, based upon such terms and conditions as the Committee shall establish
and communicate to the Holder at the time that such offer is made.
(k) Stock Option Agreement. Each grant of a Stock Option shall
be confirmed by, and shall be subject to the terms of, the Agreement executed by
the Company and the Holder.
6.3 Stock Reload Option. The Committee may also grant to the Holder
(concurrently with the grant of an Incentive Stock Option and at or after the
time of grant in the case of a Nonqualified Stock Option) a Stock Reload Option
up to the amount of shares of Stock held by the Holder for at least six months
and used to pay all or part of the exercise price of an Option and, if any,
withheld by the Company as payment for withholding taxes. Such Stock Reload
Option shall have an exercise price equal to the Fair Market Value as of the
date of the Stock Reload Option grant. Unless the Committee determines
otherwise, a Stock Reload Option may be exercised commencing one year after it
is granted and shall expire on the date of expiration of the Option to which the
Reload Option is related.
Section 7. Stock Appreciation Rights.
7.1 Grant and Exercise. The Committee may grant Stock Appreciation
Rights to participants who have been, or are being granted, Options under the
Plan as a means of allowing such participants to exercise their Options without
the need to pay the exercise price in cash. In the case of a Nonqualified Stock
Option, a Stock Appreciation Right may be granted either at or after the time of
the grant of such Nonqualified Stock Option. In the case of an Incentive Stock
Option, a Stock Appreciation Right may be granted only at the time of the grant
of such Incentive Stock Option.
7.2 Terms and Conditions. Stock Appreciation Rights shall be subject to
the following terms and conditions:
(a) Exercisability. Stock Appreciation Rights shall be
exercisable as shall be determined by the Committee and set forth in the
Agreement, subject to the limitations, if any, imposed by the Code, with respect
to related Incentive Stock Options.
(b) Termination. A Stock Appreciation Right shall terminate
and shall no longer be exercisable upon the termination or exercise of the
related Stock Option.
(c) Method of Exercise. Stock Appreciation Rights shall be
exercisable upon such terms and conditions as shall be determined by the
Committee and set forth in the Agreement and by surrendering the applicable
portion of the related Stock Option. Upon such exercise and surrender, the
Holder shall be entitled to receive a number of Option Shares equal to the SAR
Value divided by the exercise price of the Option.
(d) Shares Affected Upon Plan. The granting of a Stock
Appreciation Right shall not affect the number of shares of Stock available
<PAGE>
under for awards under the Plan. The number of shares available for awards under
the Plan will, however, be reduced by the number of shares of Stock acquirable
upon exercise of the Stock Option to which such Stock Appreciation Right
relates.
Section 8. Restricted Stock.
8.1 Grant. Shares of Restricted Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be awarded, the number of shares to be awarded, the price
(if any) to be paid by the Holder, the time or times within which such awards
may be subject to forfeiture (the "Restriction Period"), the vesting schedule
and rights to acceleration thereof, and all other terms and conditions of the
awards.
8.2 Terms and Conditions. Each Restricted Stock award shall be subject
to the following terms and conditions:
(a) Certificates. Restricted Stock, when issued, will be
represented by a stock certificate or certificates registered in the name of the
Holder to whom such Restricted Stock shall have been awarded. During the
Restriction Period, certificates representing the Restricted Stock and any
securities constituting Retained Distributions (as defined below) shall bear a
legend to the effect that ownership of the Restricted Stock (and such Retained
Distributions), and the enjoyment of all rights appurtenant thereto, are subject
to the restrictions, terms and conditions provided in the Plan and the
Agreement. Such certificates shall be deposited by the Holder with the Company,
together with stock powers or other instruments of assignment, each endorsed in
blank, which will permit transfer to the Company of all or any portion of the
Restricted Stock and any securities constituting Retained Distributions that
shall be forfeited or that shall not become vested in accordance with the Plan
and the Agreement.
(b) Rights of Holder. Restricted Stock shall constitute issued
and outstanding shares of Common Stock for all corporate purposes. The Holder
will have the right to vote such Restricted Stock, to receive and retain all
regular cash dividends and other cash equivalent distributions as the Board may
in its sole discretion designate, pay or distribute on such Restricted Stock and
to exercise all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that (i) the Holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Stock until the Restriction Period shall have
expired and unless all other vesting requirements with respect thereto shall
have been fulfilled; (ii) the Company will retain custody of the stock
certificate or certificates representing the Restricted Stock during the
Restriction Period; (iii) other than regular cash dividends and other cash
equivalent distributions as the Board may in its sole discretion designate, pay
or distribute, the Company will retain custody of all distributions ("Retained
Distributions") made or declared with respect to the Restricted Stock (and such
Retained Distributions will be subject to the same restrictions, terms and
conditions as are applicable to the Restricted Stock) until such time, if ever,
as the Restricted Stock with respect to which such Retained Distributions shall
have been made, paid or declared shall have become vested and with respect to
which the Restriction Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in this Plan or the Agreement or
otherwise established by the Committee with respect to any Restricted Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock and any
Retained Distributions with respect thereto.
(c) Vesting; Forfeiture. Upon the expiration of the
Restriction Period with respect to each award of Restricted Stock and the
satisfaction of any other applicable restrictions, terms and conditions (i) all
or part of such Restricted Stock shall become vested in accordance with the
terms of the Agreement, subject to Section 11, below, and (ii) any Retained
Distributions with respect to such Restricted Stock shall become vested to the
extent that the Restricted Stock related thereto shall have become vested,
subject to Section 11, below. Any such Restricted Stock and Retained
Distributions that do not vest shall be forfeited to the Company and the Holder
shall not thereafter have any rights with respect to such Restricted Stock and
Retained Distributions that shall have been so forfeited.
<PAGE>
Section 9. Deferred Stock.
9.1 Grant. Shares of Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom and the time or times at which grants of Deferred
Stock will be awarded, the number of shares of Deferred Stock to be awarded to
any person, the duration of the period (the "Deferral Period") during which, and
the conditions under which, receipt of the shares will be deferred, and all the
other terms and conditions of the awards.
9.2 Terms and Conditions. Each Deferred Stock award shall be subject to
the following terms and conditions:
(a) Certificates. At the expiration of the Deferral Period (or
the Additional Deferral Period referred to in Section 9.2 (d) below, where
applicable), share certificates shall be issued and delivered to the Holder, or
his legal representative, representing the number equal to the shares covered by
the Deferred Stock award.
(b) Rights of Holder. A person entitled to receive Deferred
Stock shall not have any rights of a stockholder by virtue of such award until
the expiration of the applicable Deferral Period and the issuance and delivery
of the certificates representing such Stock. The shares of Stock issuable upon
expiration of the Deferral Period shall not be deemed outstanding by the Company
until the expiration of such Deferral Period and the issuance and delivery of
such Stock to the Holder.
(c) Vesting; Forfeiture. Upon the expiration of the Deferral
Period with respect to each award of Deferred Stock and the satisfaction of any
other applicable restrictions, terms and conditions all or part of such Deferred
Stock shall become vested in accordance with the terms of the Agreement, subject
to Section 11, below. Any such Deferred Stock that does not vest shall be
forfeited to the Company and the Holder shall not thereafter have any rights
with respect to such Deferred Stock.
(d) Additional Deferral Period. A Holder may request to, and
the Committee may at any time, defer the receipt of an award (or an installment
of an award) for an additional specified period or until a specified event (the
"Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock award (or such
installment).
Section 10. Other Stock-Based Awards.
10.1 Grant and Exercise. Other Stock-Based Awards may be awarded,
subject to limitations under applicable law, that are denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or related
to, shares of Common Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, purchase rights, shares of
Common Stock awarded which are not subject to any restrictions or conditions,
convertible or exchangeable debentures, or other rights convertible into shares
of Common Stock and awards valued by reference to the value of securities of or
the performance of specified Subsidiaries. Other Stock-Based Awards may be
awarded either alone or in addition to or in tandem with any other awards under
this Plan or any other plan of the Company.
10.2 Eligibility for Other Stock-Based Awards. The Committee shall
determine the eligible persons to whom and the time or times at which grants of
such other stock-based awards shall be made, the number of shares of Common
Stock to be awarded pursuant to such awards, and all other terms and conditions
of the awards.
10.3 Terms and Conditions. Each Other Stock-Based Award shall be
subject to such terms and conditions as may be determined by the Committee and
to Section 11, below.
Section 11. Accelerated Vesting and Exercisability.
If (i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 (the "Exchange Act"), is or becomes the
"beneficial owner" (as referred in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
<PAGE>
combined voting power of the Company's then outstanding securities in one or
more transactions, or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the board of
directors cease for any reason to constitute at least a majority thereof, unless
the election of each director who was not a director at the beginning of such
period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the beginning
of the periods, then, the vesting periods of any and all Options and other
awards granted and outstanding under the Plan shall be accelerated and all such
Options and awards will immediately and entirely vest, and the respective
holders thereof will have the immediate right to purchase and/or receive any and
all Stock subject to such Options and awards on the terms set forth in this Plan
and the respective agreements respecting such Options and awards.
Section 12. Amendment and Termination.
The Board may at any time, and from time to time, amend alter, suspend
or discontinue any of the provisions of the Plan, but no amendment, alteration,
suspension or discontinuance shall be made which would impair the rights of a
Holder under any Agreement theretofore entered into hereunder, without the
Holder's consent.
Section 13. Term of Plan.
13.1 Effective Date. The Plan shall be effective as of May 1, 1999
("Effective Date"), subject to the approval of the Plan by the Company's
stockholders within one year after the Effective Date. Any awards granted under
the Plan prior to such approval shall be effective when made (unless otherwise
specified by the Committee at the time of grant), but shall be conditioned upon,
and subject to, such approval of the Plan by the Company's stockholders and no
awards shall vest or otherwise become free of restrictions prior to such
approval.
13.2 Termination Date. Unless terminated by the Board, this Plan shall
continue to remain effective until such time no further awards may be granted
and all awards granted under the Plan are no longer outstanding. Notwithstanding
the foregoing, grants of Incentive Stock Options may only be made during the ten
year period following the Effective Date.
Section 14. General Provisions.
14.1 Written Agreements. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms of the Agreement executed by the
Company and the Holder. The Committee may terminate any award made under the
Plan if the Agreement relating thereto is not executed and returned to the
Company within 10 days after the Agreement has been delivered to the Holder for
his or her execution.
14.2 Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.
14.3 Employees.
(a) Engaging in Competition With the Company. In the event a
Holder's employment with the Company or a Subsidiary is terminated for any
reason whatsoever, and within twenty-four months after the date thereof such
Holder accepts employment with any competitor of, or otherwise engages in
competition with, the Company, the Committee, in its sole discretion, may
require such Holder to return to the Company the economic value of any award
which was realized or obtained by such Holder at any time during the period
beginning on that date which is six months prior to the date of such Holder's
termination of employment with the Company.
(b) Termination for Cause. The Committee may, in the event a
Holder's employment with the Company or a Subsidiary is terminated for cause,
<PAGE>
annul any award granted under this Plan to such employee and, in such event, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any award which was realized or obtained by such
Holder at any time during the period beginning on that date which is six months
prior to the date of such Holder's termination of employment with the Company.
(c) No Right of Employment. Nothing contained in the Plan or
in any award hereunder shall be deemed to confer upon any Holder who is an
employee of the Company or any Subsidiary any right to continued employment with
the Company or any Subsidiary, nor shall it interfere in any way with the right
of the Company or any Subsidiary to terminate the employment of any Holder who
is an employee at any time.
14.4 Investment Representations. The Committee may require each person
acquiring shares of Stock pursuant to a Stock Option or other award under the
Plan to represent to and agree with the Company in writing that the Holder is
acquiring the shares for investment without a view to distribution thereof.
14.5 Additional Incentive Arrangements. Nothing contained in the Plan
shall prevent the Board from adopting such other or additional incentive
arrangements as it may deem desirable, including, but not limited to, the
granting of Stock Options and the awarding of stock and cash otherwise than
under the Plan; and such arrangements may be either generally applicable or
applicable only in specific cases.
14.6 Withholding Taxes. Not later than the date as of which an amount
must first be included in the gross income of the Holder for Federal income tax
purposes with respect to any option or other award under the Plan, the Holder
shall pay to the Company, or make arrangements satisfactory to the Committee
regarding the payment of, any Federal, state and local taxes of any kind
required by law to be withheld or paid with respect to such amount. If permitted
by the Committee, tax withholding or payment obligations may be settled with
Common Stock, including Common Stock that is part of the award that gives rise
to the withholding requirement. The obligations of the Company under the Plan
shall be conditioned upon such payment or arrangements and the Company or the
Holder's employer (if not the Company) shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the Holder from the Company or any Subsidiary.
14.7 Governing Law. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Colorado (without regard to choice of law provisions).
14.8 Other Benefit Plans. Any award granted under the Plan shall not be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or any Subsidiary and shall not affect any benefits under any
other benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation (unless required by
specific reference in any such other plan to awards under this Plan).
14.9 Non-Transferability. Except as otherwise expressly provided in the
Plan or the Agreement, no right or benefit under the Plan may be alienated,
sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or
charged, and any attempt to alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void.
14.10 Applicable Laws. The obligations of the Company with respect to
all Stock Options and awards under the Plan shall be subject to (i) all
applicable laws, rules and regulations and such approvals by any governmental
agencies as may be required, including, without limitation, the Securities Act
of 1933, as amended, and (ii) the rules and regulations of any securities
exchange on which the Stock may be listed.
14.11 Conflicts. If any of the terms or provisions of the Plan or an
Agreement (with respect to Incentive Stock Options) conflict with the
requirements of Section 422 of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of said
Section 422 of the Code. Additionally, if this Plan or any Agreement does not
contain any provision required to be included herein under Section 422 of the
Code, such provision shall be deemed to be incorporated herein and therein with
the same force and effect as if such provision had been set out at length herein
<PAGE>
and therein. If any of the terms or provisions of any Agreement conflict with
any terms or provision of the Plan, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of the
Plan. Additionally, if any Agreement does not contain any provision required to
be included therein under the Plan, such provision shall be deemed to be
incorporated therein with the same force and effect as if such provision had
been set out at length therein.
14.12 Non-Registered Stock. The shares of Stock to be distributed under
this Plan have not been, as of the Effective Date, registered under the
Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to register the
Stock or to assist the Holder in obtaining an exemption from the various
registration requirements, or to list the Stock on a national securities
exchange.
14.13 Cash-Out of Exercisable Options. In connection with the sale of
substantially all the assets of the Company or a merger or combination of the
Company with another entity where the Company is not the survivor, and the
transaction is approved by the Board of the Directors and the stockholders as
provided under applicable law, in the discretion of the Board of Directors, the
terms of the transaction may provide that any exercisable Award under the Plan
may be terminated as part of the transaction on payment of the value of the
Award on the consummation date of the transaction in cash and/or securities as
determined by the Board of Directors in their discretion.
SUBSIDIARIES OF YOUTICKET.COM INC.
Name Jurisdiction
Visitcom, Inc. Nevada
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<PERIOD-END> SEP-30-1999
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<CURRENT-ASSETS> 63,942
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0
0
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