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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities of Small Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Web Capital Group, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Nevada 65-0937020
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
501 Brickell Key Drive, Suite 203, Miami, Florida, 33131
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(Address of principal executive offices, including zip code)
(305) 377-0064
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(Registrant's telephone number)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered: each class it to be registered:
(N/A) (N/A)
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which
to be so registered: each class is to be registered:
Common Stock, $0.001 par value (N/A)
Preferred Stock, $0.001 par value
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TABLE OF CONTENTS
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Item 1. Description of Business
Item 2. Management Discussion and Analysis of Financial Condition and Results
of Operations
Item 3. Description of Property
Item 4. Security Ownership of Certain Beneficial Owners and Management
Item 5. Directors, Executive Officers, Promoters and Control Persons
Item 6. Executive Compensation
Item 7. Certain Relationships and Related Transactions
Item 8. Legal Proceedings
Item 9. Market for Common Equity and Related Stockholder Matters
Item 10. Recent Sales of Unregistered Securities
Item 11. Description of Securities to be Registered
Item 12. Indemnification of Directors and Officers
Item 13. Financial Statements and Supplementary Data
Item 14. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
Item 15. Financial Statements and Exhibits
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Forward-Looking Statements
This Registration Statement on Form 10 includes forward-looking statements
within the meaning of the Securities Exchange Act of 1934 (the "Exchange Act").
These statements are based on management's current beliefs and assumptions about
the Registrant and the industry in which the Registrant competes in, and on
information currently available to management. Forward-looking statements
include, but are not limited to, the information concerning possible or assumed
future results of operations of the Registrant set forth under the headings
"Management's Discussion" and "Business" and include statements in which words
such as "expects," "anticipates," "intends," "plans," "believes," "estimates,"
"considers," or similar expressions are used.
Forward-looking statements also include all statements that express expectations
and projections with respect to future matters, including expected operating
results, market opportunities, acquisition opportunities, ability to compete,
and stock price.
Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties and assumptions. The Registrant's future results
and shareholder values may differ materially from those expressed or implied in
these forward-looking statements. Readers are cautioned not to put undue
reliance on any forward-looking statements. In addition, the Registrant does not
undertake to update forward-looking statements after the effectiveness of this
Registration Statement, even if new information, future events or other
circumstances have made them incorrect or misleading.
As used herein, "Web Capital Group," or "the Company" or "we" or "us" refers to
Web Capital Group, Inc.,and its consolidated subsidiaries.
ITEM 1 - DESCRIPTION OF BUSINESS
HISTORY OF COMPANY
Web Capital Group, Inc., ("Web Capital Group " or the "Company") was originally
incorporated under the laws of the State of Utah on April 28, 1980 as Rebel
Energy Corporation ("Rebel Energy"). The Company was organized for the purpose
of investing in energy-related properties, primarily in low-priced oil and gas
and unimproved lands and real estate. The Company was initially authorized to
issue 30,000,000 shares of common stock, $0.01 par value.
In August 1980, Rebel Energy completed an intra-state public offering of
securities to residents of Utah of 3,000,000 shares of common stock at a price
of $0.03 per share, resulting in $90,000 gross proceeds before deducting
offering costs. The offering was conducted pursuant to an exemption from the
registration requirements of the Securities Act of 1933, as amended, provided by
section 3(a)(1) of the Securities Act and Rule 147 promulgated thereunder with
respect to intrastate offerings. Following completion of its public offering,
Rebel Energy made investments in oil and gas properties which were subsequently
abandoned in 1985. As a result of the unsuccessful nature of its activities,
resources were exhausted, and the Company remained dormant from 1985 through
1989.
On December 20, 1989, Rebel Energy entered into an exchange agreement with Jet
Enterprises, Inc., pursuant to which Rebel Energy issued Jet Enterprises
24,000,000 restricted shares of common stock in exchange for $40,000 and the
assignment to Rebel Energy of two metalliferous mineral leases.
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On February 23, 1990, the Board of Directors authorized the increase of
Company's capitalization to 300,000,000, $0.001 par value, shares of common
stock, and 100,000,000, $0.001 par value, shares of preferred stock
On August 1, 1990, Sara Services, Inc. ("Sara Services") was incorporated in
Oklahoma for the purpose of merging with the Company so as to effect a
redomicile to Oklahoma. On August 3, 1990, the Company entered into a
share-exchange agreement with Sara Services, pursuant to which, Services agreed
to exchange all (1,000) of its outstanding shares of common stock for 23,000,000
shares of Company's common stock. The officers and directors of the Company were
appointed to the same respective offices and directorships with Sara Services.
On August 6, 1990, the Company shareholders approved a name change from Rebel
Energy Corporation to Sara Environmental, Inc. ("Sara Environmental").
Management believed the name change would better reflect the Company's current
operations of providing local, state and federal environmental compliance
reporting and personnel training services on behalf of its clients. Because all
of Company's assets and principal business activities were located and derived
from the state of Oklahoma and Management had to comply with corporate legal
requirements of both Utah and Oklahoma, the Company changed its domicile to
Oklahoma by merging with its wholly-owned Oklahoma subsidiary, Sara Services, in
February 1995. As part of the reorganization, the Board of Directors approved a
10-for-1 reverse stock split, reducing the Company's authorized shares of common
stock from 300,000,000 to 30,000,000, $0.01 par value, and from 100,000,000
shares of preferred stock, to 10,000,000 shares, $0.01 par value.
On November 27, 1996, the Board of Directors authorized a 40-for-1 reverse stock
split of Company's shares, reducing the issued and outstanding shares from
10,773,760 shares to 269,344 shares. The Board also increased the authorized
capital stock from 30,000,000 shares of common stock to 50,000,000 shares, and
approved the issuance of 1,000,000 shares of Preferred Class SC Voting Stock and
10,000,000 shares of Preferred Non-Voting stock in classes B though K,
Non-Voting stock to be used for acquisitions.
On November 27, 1996, the Company entered into several share exchange agreements
and issued the following (post-reverse) shares of stock:
(a) with the shareholders of GSP International, Inc. (currently operating under
the name "Janus Development Corporation"), a Nevada corporation. Pursuant to the
agreement, the Company acquired 100% (100,000 shares) of the issued and
outstanding shares of GSP, and in exchange, GSP stockholders received 1,000,000
shares of Company's common stock and 100,000 shares of Preferred class B stock;
(b) with the shareholders of Pro Beach Roller Hockey Tour ("Pro Beach"), an
asset operating as a company planning to incorporate as a California Limited
Liability Company. Pursuant to the agreement, the Company acquired 100% (800,000
units) of the Pro Beach membership units that were issued and outstanding, and
in exchange, Pro Beach stockholders received 1,500,000 shares of Company's
common stock;
(c) with the shareholders of Brandon 21st Century, Ltd. (later renamed Trillium
Communications, Ltd.) a Nevada corporation. Pursuant to the agreement, the
Company acquired 3,250,000 shares of common stock and in exchange, Brandon
stockholders received 2,000,000 shares of Company's common stock and 50,000
shares of Company's Preferred class B stock;
(d) with the shareholders of Trillium Management Group ("TMG"), an asset
operating as a company, to be incorporated as an individual limited liability
company under the laws of the state of California. Pursuant to the agreement,
the Company acquired 100% (100,000 units) of the TMG membership units that were
issued and outstanding, and in exchange, TMG stockholders received 1,000,000
shares of Company's common stock and 25,000 shares of Company's Preferred class
B stock;
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(e) with the shareholders of Trillium Marketing ("TMARK"), an asset operating as
a company planning to incorporate as a California Limited Liability Company.
Pursuant to the agreement, the Company acquired 100% (100,000 units) of the
TMARK membership units that were issued and outstanding, and in exchange, TMARK
stockholders received 1,000,000 shares of Company's common stock and 25,000
shares of Company's Preferred class B stock.
On May 7, 1997, the Company changed its name to Sara Hallitex Corporation. No
stock splits (reverse or forward) were effected at the time of the name change.
In October 1997, the Company issued 50,000 shares of its common stock,
restricted under Rule 144, to an individual, for settlement of debt of $37,500
and 20,700 shares of common stock, restricted under Rule 144, to certain
individuals, as consideration for consultation services.
In November 1997, the Company issued 1,000,000 shares of its common stock,
restricted under Rule 144, to Garrett K. Krause, Company's President and CEO, as
payment for management services under the Executive Employment Agreement dated
November 27, 1996.
In March 1998, the Company issued 899,999 shares of its common stock, restricted
under Rule 144, to an individual, as payment for debt of $674,999 and 529,622
shares of its common stock, restricted under Rule 144, to certain individuals,
as consideration for consultation and public relations services.
In May 1998, the Company issued 8,600 shares of its common stock, restricted
under Rule 144, to certain individuals, as payment for debt, valued at $.75 per
share, and 5,251 shares of its common stock, restricted under Rule 144, to
certain individuals, as consideration for consultation services
In March 1999, the Company issued a total of 5,166 shares of its common stock,
restricted under Rule 144, to certain individuals, as consideration for
consultation services.
In June 1999, the Company issued 1,000,000 shares of its common stock,
restricted under Rule 144, to Garrett K. Krause, Company's President and CEO, as
payment for management services under the Executive Employment Agreement dated
November 27, 1996.
On December 1, 1999, the Board of Directors authorized the conversion of
Company's Class B through K Preferred Stock into shares of Preferred Stock,
resulting in 10,000,000 shares of Preferred Stock, $0.001 par value.
On December 8, 1999, Web Capital Group, Inc. ("Web Capital Group") was
incorporated in Nevada for the purpose of merging with Sara Hallitex, (an
Oklahoma corporation) in order that the Company change its domicile to Nevada
(the "Reincorporation"). Web Capital Group has a capitalization of 50,000,000
shares, $0.001 par value of common stock and 10,000,000 shares, $0.001 par value
of preferred stock.
On December 22, 1999, Web Capital Group and Sara Hallitex signed Articles of
Merger, pursuant to which, each Sara Hallitex share of common stock was
converted into one (1) share of Web Capital Group common stock. Similarly, each
Sara Hallitex share of preferred stock was converted into one (1) share of Web
Capital Group preferred stock. Web Capital Group is governed by Nevada law and
by a new certificate of incorporation and bylaws. The officers and directors of
Sara Hallitex were appointed to the same respective offices and directorships
with Web Capital Group. The Merger Agreement has been approved and adopted by
each of the corporations and the Reincorporation of the Company is being
finalized pending the filing of merger documents with the Secretary of State of
Nevada and the Secretary of State of Oklahoma.
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Management's decision to change Company's domicile was based on the belief that
the Company's future business goals would be better served by being domiciled in
Nevada and because the simplification of corporate, legal and accounting
functions would represent a cost savings in terms of management time as well as
elimination of duplicitous expense. The name change to Web Capital Group was
effected to better reflect the Company's expanding focus on the e-business
industry and to better suit the Company's current and future business
objectives.
As of January 1, 2000, the Company has issued and outstanding, 10,308,482 shares
of common stock and 200,000 shares of preferred stock. Company's stock currently
trades on the Over-the-Counter Bulletin Board under the symbol "WBCG."
On January 13, 2000, the Company completed a private placement offering of
3,000,000 "restricted" (as that term is defined under Rule 144 of the Securities
Act of 1933) shares of its common stock at an offering price of $3.00 per share,
and options to purchase 3,000,000 shares of its common stock, with an exercise
price of $6.00 per share, to 3 "accredited" investors, resulting in $9,000,000
gross proceeds to the Company and proceeds from sale of the options. The
offering was pursuant to exemptions provided by Rule 506 of Regulation D and
Section 4(2) of the Securities Act of 1933.
BUSINESS OF COMPANY
Web Capital Group is a diversified, full service, public Internet venture
banking firm concerned with the acquisition, investment and development of
Internet-related companies, new technologies and projects. Rather than simply
raising venture capital for such emerging businesses, the Company invests,
develops and nurtures them through its interconnected network of companies by
providing management and expediting their ability to trade in the public market.
In return, the Company acquires a long-term equity position in taking these
ventures through their Initial Public Offerings. The Company believes that by
focusing exclusively on the e-commerce industry, the Company will be able to
capitalize on new and exciting opportunities and attract emerging-growth
companies. The Company intends to operate as a fully diversified Internet
financial services company by becoming a one-stop shop facilitator for the
public launching and continued management of Internet and web-related,
development-stage and emerging-growth companies.
COMPANY OPERATING STRATEGY
The Company's operating strategy is to use and integrate its extensive network
of relationships, which includes the Portfolio Companies, as well as industry,
technological and capital markets expertise, to develop and grow the business
strategies, technologies and projects of our Portfolio Companies. The Company
will focus on developing, operating, and investing in companies conducting
business primarily in the following segments of e-commerce: companies offering
business to business sales and distribution, companies selling e-commerce
software, and professional firms offering strategic guidance for pursuing
e-commerce opportunities. The Company will concentrate on e-commerce companies
at any stage of development, from the start-up stage, where the company is still
at the concept or proofing stage, to emerging, where the company is beginning to
commercialization and market penetration, to growth stage, where the company is
seeking enhancement or expansion of its market.
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INDUSTRY OVERVIEW
People and businesses are increasingly relying on the Internet to access and
share information, to purchase and sell products and services. By International
Data Corporation (IDC) estimates, an Information Technology research concern,
estimates at the end of 1998, more than 142 million people were using the
Internet to communicate, participate in discussion forums and obtain information
about goods and services. IDC projects this user base will grow to 502 million
people by the end of 2003. A rapidly growing number of businesses are using the
Internet to market and sell their products and streamline business operations.
According to Forrester Research, a leading technology research and computation
firm, 50% of all U.S.-based businesses will be online by 2002. Although still a
volatile market, the Internet's substantial growth has created tremendous market
opportunities for companies such as our Company. We will strive to focus
primarily on those segments within the Internet industry that have matured and
have exhibited a certain fundamental "staying power. The Company plans to
capitalize on Internet's expanding business sector by operating as a
full-service, Internet-related venture capital and incubator, connecting
emerging-growth Internet e-commerce companies, with capital financing and
related services.
COMPANY SERVICES
The company plans to offer the following financial and strategic business
services:
Venture Capital
Similar to a traditional venture capital company, Web Capital Group negotiates
with a prospective company, agreeing to acquire an equity interest in the
company in exchange for an initial investment. This initial capital investment
is used to bring the company closer to possible publicly-traded status. Web
Capital Group's equity stake is then used to increase its own Portfolio holdings
and also to issue dividends to its shareholders pursuant to Company's
"President's List" Dividend Program. The Company's Dividend Program allows its
shareholders to participate in every Web Capital Group opportunity both through
their individual portfolios as well as through share positions with the Company.
The Company utilizes this equity stake to increase its asset portfolio
appreciation and to leverage itself into additional investment and business
opportunities.
Investment Banking
Web Capital Group also acts as a "boutique" Internet based investment banking
firm in servicing the needs of a company by providing access to a number of
professional services. Services provided by the Company include: Financing
Services including initial capital infusions and Secondary Offerings; Securities
legal advice; A Securities & Exchange Commission (SEC)-approved CPA firm; Web
Capital Group financial relations consulting; Management & Board of Directors
consulting and assistance; Mergers & Acquisitions consulting and assistance;
Public Relations assistance; and Boutique investment banking and financing
consulting services.
Marketing
The Marketing division of Web Capital Group provides in-house Investor Relations
and Public Relations services for all its Portfolio Companies. Through our
communications department, institutional investors, brokerage firms and
individual investors have a direct liaison to every firm in the Web Capital
Group "family." Likewise, the Company's Public Relations unit handles all
pertinent information services providing press releases, press kits and general
Company news issues. This eliminates the need for outside firms and solidifies
the Company's status as a "one-stop shop," an all-encompassing venture banking
firm. The Company also generates cash flow through consulting fees from the
above-mentioned services as well as through exercising options and warrants
received from its subsidiaries.
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COMPANY HOLDINGS
As of January 1, 2000, the Company owns equity positions in eight (8) companies:
(1) The Company owns a 67.8% equity interest (or 7,000,000 shares of common
stock) in 3wVentures.com, Inc. and warrants to purchase 7,000,000 shares of
company's common stock at an exercise price of $5.00 per share; (2) upon
FutureVest.com, Inc.'s incorporation, a 77% equity interest or (10,000,000
shares of common stock) and 5,000,000 options to purchase shares of
FutureVest.com, Inc. common stock, at an exercise price of $10 per share; (3) in
SolutionNet International, Inc., a 7.5% equity interest (or 865,000 shares of
common stock) and warrants to purchase 1,000,000 shares of company's common
stock at an exercise price of $5.00 per share; (4) in USLab.com, Inc., a 20.1%
equity interest (or 2,233,945 shares of common stock) and warrants to purchase
1,000,000 shares of company's common stock at an exercise price of $5.00 per
share; (5) in Tril-MediaNet.com, Inc., a 23% equity interest (or 2,580,000
shares of common stock); (6) in TheMovieSource.com, Inc., a 7.5% equity interest
(or 500,000 shares of common stock) and warrants to purchase 500,000 shares of
company's common stock at an exercise price of $2,50 per share and warrants to
purchase 500,000 shares of company's common stock at an exercise price of $3.00
per share; (7) in Janus International, Inc., a 40.72% equity interest (or
7,750,000 shares); and (8) in ProTerra, Inc., a 90% investment interest.
Additionally, through Web Capital Group's present 67.8% interest in
3wVentures.com (3wVentures.com discussed below), the Company owns an additional
5.1% equity interest in SolutionNet International, Inc.; an additional 9.3%
equity interest in USLab.com, Inc.; an additional 3.2% equity interest in
Tril-MediaNet.com, Inc.; and an additional 5.1% equity interest in
TheMovieSource.com, Inc.
COMPANY SUBSIDIARIES
(1) 3wVentures.com
3wVentures.com, Inc. ("3wVentures.com"), is concerned with the development,
funding, incubation and management of online and Internet business
opportunities. Originally incorporated in the State of Nevada on June 8, 1999
under the name of SaraOnline.com, Inc., company's initial capitalization was
25,000,000 shares of $0.001 par value common stock. Initially established as an
Internet-focus division of Web Capital Group, 3wVentures.com, Inc. began
operations as a separate and independent company on July 1, 1999.
On July 1, 1999, Web Capital Group entered into a share-exchange agreement with
the company, pursuant to which, Web Capital Group acquired 10,000,000 shares of
common stock of 3wVentures.com, Inc. (formerly SaraOnline.com, Inc.) and
warrants to purchase 10,000,000 shares of common stock, exercise price of $5.00.
In exchange, 3wVentures.com, Inc. acquired 865,000 shares of common stock (or
7.5% equity interest) of SolutionNet International, Inc., 1,500,000 shares of
common stock (or 13.7% equity interest) of USLab.com, Inc., 1,500,000 shares of
common stock (or 13.6% equity interest) of Tril-MediaNet.com, Inc., 500,000
shares of common stock (or 7.5% equity interest) of TheMovieSource.com, Inc.
In July 1999, 3,000,000 of the 10,000,000 "restricted" (as that term is defined
under Rule 144 of the Securities Act of 1933) shares of common stock and
3,000,000 of the 10,000,000 warrants acquired by the Company pursuant to the
July 1999 agreement with 3wVentures.com, Inc., were distributed to the
shareholders of the Company pursuant to Company's Dividend Program.
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On December 8, 1999, SaraOnline.com, Inc. changed its name to 3wVentures.com,
Inc., to better reflect its current and future business objectives and the Board
of Directors authorized an increase of company's capitalization, resulting in
50,000,000 shares of common stock, $0.001 par value, and 10,000,000 shares of
preferred stock, $0.001 par value. As of January 1, 2000, Web Capital Group owns
a 67.8% (or 7,000,000 shares) equity interest in the company.
3wVentures.com is currently managing the operations of SolutionNet
International, Inc., USLab.com, Inc., Tril-MediaNet.com, Inc., and
TheMovieSource.com, Inc. The company will also manage the operations of the
Company's newly announced SiliconLosAngeles.com high technology incubator
facility, scheduled to open in April 2000. The company plans to become the
premier "Internet Incubator" by establishing a presence in major segments of the
economy and by creating create liquidity and profits for its shareholders. The
company believes that its singular focus on the incubation of emerging growth of
online business and Internet technologies and properties will allow it to
capitalize rapidly on new opportunities and to attract and develop future
leading-edge Internet-related companies.
In focusing its operations on incubating all online and Internet-related Web
Capital Group Companies, 3wVentures will enable Web Capital Group to continue to
provide venture banking services to every company being incubated by
3wVentures.com while at the same, continuing its expansion of its Internet
global venture banking operations.
3wVentures' new operating divisions, 3wLabs.com and 3wCapital.com, will focus on
providing venture capital funds and Internet Incubator facilities that will fund
and Incubate Internet commerce and other early stage Internet companies,
http://www.icp.com/tombstone.htm along with opportunistic investments in later
stage, high growth Internet firms. 3wLabs.com will operate as the incubator of
current and future Internet companies, technologies and projects. Initially, the
Company will open its SiliconLosAngeles.com incubator facility in Marina del
Rey, CA, with plans to open four additional facilities in the next 18 months.
3wCapital.com will facilitate internal venture capital and funding partnerships
for all the 3wVentures.com projects.
3wLabs.com Incubator Units
3wLabs.com is currently developing a number of comprehensive, fully integrated
state-of-the-art Internet incubator locations. Operating under the name
SiliconLosAngeles.com, the company's initial incubator facility will work in
conjunction with the 3wCapital.com operations and the FutureVest.com family of
investment banking, underwriting and e-finance companies. Within this structure,
FutureVest.com will conduct the IPO process as well as provide myriad e-finance
products and services to each and every portfolio company. Through 3wVenture's
incubator unit, the company will supply emerging growth Internet-based companies
and projects with a full range of resources to infuse these companies with the
development strategies and financial resources needed to rapidly introduce
innovative products and services.
Resources will include office space and the accompanying e-business network
infrastructure, consulting and services relating to development and technology,
graphic design, marketing, competitive research, legal, accounting and business
development support and services. In addition, this incubator will provide
advice on strategy, branding and corporate structure.
Through these state-of-the-art incubator labs, 3wVentures.com and its 3wCapital
Partners Venture Funds will ensure a constant flow of quality, top-tier IPO
prospects and opportunities. Conversely, with its strategic relationship with
FutureVest.com, a global e-finance firm, 3wVentures.com, through its unique
business model, will be able to incubate and finance the value of each and every
cutting edge e-business project in 3wVenture's pipeline, ensuring a seamless
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natural progression through the eventual IPO stage. In having the capacity to
spin out the portfolio companies as IPO's, the company will be able to conduct
IPO or other merger opportunities known as "liquidity events", providing the
company, its investors and shareholders with a suitable exit strategy and the
chance to unlock the monetary value of each portfolio company. In addition,
after a "liquidity event" has been realized, portfolio companies will then have
the monetary means to pursue acquisitions, business opportunities and to attract
a strong management team and dedicated staff.
To augment current and future West Coast Internet operations of 3wVentures.com,
the company is currently renovating a 50,000 square foot warehouse in Marina Del
Rey, CA. This facility is scheduled to be fully operational by April 2000.
Working in conjunction with future Internet incubator facilities,
SiliconLosAngeles.com will serve as the Company's Internet incubator extension
and will be ideally positioned to service and incubate projects from all facets
of the West Coast Internet spectrum, particularly the Silicon Valley, the
birthplace and hub of the Internet.
The Company's expansion plans include an additional high-tech Internet incubator
facility to be based in Miami, FL, gateway to the largely untapped Latin
American market. This South Florida facility will strive to exploit an
underserved Latin American market in providing a similar range of developmental
and technical strategies as well as financial support and services for emerging
growth Internet-based companies and projects focused on the primarily Spanish
speaking populace.
International Data Corporation estimates that Internet users throughout Latin
America will grow from roughly 2.5 million in 1997 to 20 million by 2003. The
Latin American market presents a tremendous business opportunity and
SiliconSouthBeach.com will stand in the vanguard of Internet-based firms poised
to benefit from enormous revenue potential. The company's expansion plans also
include the establishment of overseas incubator facilities in Europe and Asia,
as well as other potential worldwide locations.
As the incubator units of 3wLabs, SiliconLosAngeles.com and the additional
Internet incubator facilities, will aim to develop individual ideas into highly
focused and successful Internet businesses. Management believes that to succeed
in the dynamic Internet market, companies must achieve a rapid speed of
execution by tapping the services, support and knowledge of individuals and
organizations that have extensive experience in starting Internet companies.
3wCapital will serve as the initial funding and venture capital arm for every
project. SiliconLosAngeles.com will augment this process by providing an
all-encompassing array of related development services to ensure a cohesive,
seamless incubation process. In addition, with 3wCapital providing the initial
funding, each and every Portfolio Company will have complete access to a
wide-range of services offered by SiliconLosAngeles.com and future Internet
incubator facilities.
(2) FutureVest.com
FutureVest.com, Inc., is an e-finance corporation, currently in the process of
being formed under the laws of the Commonwealth of the Bahamas, and planning to
base its global operations in the Commonwealth of the Bahamas. The company plans
to use its Internet technology platform to offer a comprehensive range of online
trading & investment banking products and services including: e-brokerage,
e-banking, e-capital, e-mutual funds, e-insurance and trust services, Initial
Public Offerings, Secondary & Follow-on Offerings, private equity "Angel"
investments, research, online investing in stocks and mutual funds, and day
trading, all on a global scale. The company will also seek to vertically
integrate online brokerage, Web-based commercial banking, online insurance
services, online retirement services and products including IRA's and 401K's,
and online mortgage and lending services, creating a "one-shop shop" and
enhancing its product portfolio.
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In September 1999, Web Capital Group, Inc. entered into a Joint Venture and
Exchange Agreement (the "Agreement") with FutureVest Corporation, pursuant to
which, the parties agreed to create a "one-stop" e-finance organization to
operate under the name FutureVest.com, Inc. Also pursuant to the Agreement, Web
Capital would form a new Nevada corporation, FutureVest.com (USA), Inc., which
would assume certain investment banking, communications and operational assets
of Web Capital and would be merged into FutureVest.com, Inc. upon its
incorporation in the Commonwealth of the Bahamas, becoming FutureVest.com,
Inc.'s wholly-owned United States operating subsdiary.
In exchange for the Web Capital operations transferred to FutureVest.com (USA),
Inc., Web Capital will receive 10,000,000 shares of common stock of the newly
incorporated FutureVest.com, Inc. (the Bahamian company), or a 77% equity
interest, plus an additional 5,000,000 options to purchase shares of
FutureVest.com, Inc. common stock, at an exercise price of $10 per share.
Pursuant to the terms of the September 1999 joint venture and exchange
agreement, FutureVest.com (USA), Inc. was incorporated under the laws of the
State of Nevada on October 18, 1999. Web Capital has transferred all of its
Investment Banking, Public Relations, and Communications assets into
FutureVest.com (USA), Inc. and currently, the company is managing Web Capital's
US-based e-finance operations. Once FutureVest.com, Inc. is incorporated in the
Commonwealth of the Bahamas, FutureVest.com (USA), Inc. will merge with
FutureVest.com, Inc. to become its wholly-owned operating subsidiary, and Web
Capital will receive its equity interest.
In November 1999, FutureVest.com (USA), Inc. entered into a Acquisition
Agreement with RL Securities, Inc., a fully-licensed, NASD-registered,
Broker-Dealer firm that has been providing investment services for over 25
years. Pursuant to the agreement, FutureVest.com (USA), Inc. acquired a 24%
equity stake in RL Securities, Inc. and an option to purchase the remaining 76%
equity interest, pending NASD approval of the transaction. The parties also
agreed that RL Securities, Inc. would change its name to FutureVest Securities
(USA), Inc. and would operate as the Company's online brokerage, underwriting
and investment banking services unit.
FutureVest.com believes that a significant portion of the income derived from
its Bahamas-based operations will not be subject to tax by any of the following:
(1) The Commonwealth of the Bahamas, which currently does not have a corporate
income tax or capital gains; (2) select countries in which the company conducts
activities or in which customers of the company are located. The company bases
this belief upon the anticipated nature and conduct of its business, which may
change, and its understanding of its position under the tax laws of the various
countries in which it has assets or conducts activities, which position is
subject to review and possible challenge by taxing authorities and to possible
changes in laws, which may have retroactive effect. The company cannot predict
the amount of tax to which it may become subjected to and cannot be certain that
any of these factors would not have a material adverse effect on its business,
financial condition and results of operations. Although the company will enjoy
the benefit of a favorable tax code in the Bahamas, the company's operating
subsidiaries will abide by, and be subject to all international tax codes and
regulations in which they are conducting business.
FutureVest.com will operate as a Bahamas-based company with business dealings
conducted on a global basis. The company anticipates any and all
company-initiated mergers will qualify as a tax-free reorganization for United
States federal income tax purposes. In general, the shareholders of acquired
companies will not recognize any gain or loss on the exchange of common stock
with the company, except to the extent they receive cash instead of fractional
shares or otherwise as merger considerations. There will be no Bahamian tax of
any kind payable in respect to the exchange of shares in the company's merger
transactions. In the future, FutureVest.com will urge all shareholders-of-record
in transactions related to this matter to consult their own tax advisors to
discuss the tax consequences of any merger and or related transaction.
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COMPANY PORTFOLIO COMPANIES
As discussed above, the Company currently owns equity positions in several
Portfolio Companies: (1) SolutionNet International, Inc. is dedicated to the
development and marketing of proprietary, multi-application Internet Gateway
Information Technology (IT) solutions; (2) USLab.com, Inc. focuses on the
incubation and development of Internet companies that are "spun-out" once they
become mature and independent companies; (3) Tril-MediaNet.com, Inc. is a
developmental stage company that plans to operate in the newly emerging field of
"Intertainment"; (4) Janus International, Inc.'s objective is to focus on
projects relevant to the real estate and resort development industry; (5)
TheMovieSource.com, Inc., is an Internet e-commerce portal concerned with the
sale and distribution of filmed entertainment and music over the Internet; and
(6) ProTerra, Inc. is a dormant holding company that currently owns a United
States patent for controlled environment vaults, issued on October 11, 1988.
Investment Criteria
3wVentures.com's operating strategy is to integrate our Portfolio Companies into
a collaborative network that will leverage the collective knowledge and
resources. Since our goal is to hold our Portfolio Company interests for the
long-term, the Company plans to use these collective resources to actively
develop the business strategies, operations and management teams of our
Portfolio Companies. Company resources include the experience, industry
relationships and specific expertise of its management team, its portfolio
companies and its Advisory Board.
The Company will use the following investment strategies: 1. to create or
identify companies with the potential to become industry leaders; 2. to acquire
significant interests in portfolio companies and incorporate them into a
collaborative network; 3. to provide strategic guidance and operational support
to portfolio companies; and 4. to promote collaboration among portfolio
companies.
3wVentures.com's expertise in the Internet-related market will allow it to build
and identify companies that are positioned to succeed. When we evaluate whether
to enter a market by building a company or acquiring an interest in an existing
company, we will weight the following industry and portfolio company factors:
(a) Inefficiency. We will consider whether the industry suffers from
inefficiencies that may be alleviated through e-commerce. We will also consider
the relative amount of inefficiency, as more inefficient industries present
greater profit potential; (b) Competition. We will evaluate the amount of
competition that a potential Portfolio Company faces from e-commerce and
traditional businesses; (c) Market Maker Profit Potential. When evaluating
market makers, we will consider the number and dollar value of transactions in
the industry. In the multi-billion dollar industries that it targets, companies
that exhibit even incremental efficiency improvements present significant profit
potential; (d) Centralized Information Sources. When evaluating market makers,
we will consider whether the industry has existing product catalogs, trade
journals and other centralized sources of information regarding products,
prices, customers and other factors. The availability of this information makes
it easier for a market maker to facilitate communication and transactions. As a
rule, we will generally avoid industries where such information is unavailable.
(e) Infrastructure Service Provider Profit Potential. When evaluating
infrastructure service providers, the Company will examine the size of the
market opportunity, the profit potential in serving the target market and
whether the infrastructure service provider can provide assistance to its market
maker portfolio companies.
Acquisition of Interests in Portfolio Companies
After identifying an attractive potential Portfolio Company, Web Capital Group,
will either directly or through any one of its consolidated subsidiaries,
negotiate the acquisition of a significant interest in the company. As a
condition of an acquisition, the Company will require representation on the
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company's board of directors to ensure its ability to provide active guidance to
the Portfolio Company. Acquisitions will be structured so as to allow Portfolio
Company's management and key personnel to retain an equity stake in the company.
As a result of our prior successes and experience, we believe we have the
ability to complete acquisitions quickly and efficiently.
During negotiations with potential Portfolio Companies, we will emphasize the
value of our collaborative network. The Company believes having a Portfolio
Company network provides a genuine competitive advantage over other acquiring
firms in successfully consummating transactions. The Company's Portfolio
Companies, strategic investors and Advisory Board members assist in these
discussions and assist in other stages of the acquisition process, including the
initial evaluation of potential Portfolio Companies and due diligence.
Portfolio Company Criteria.
In evaluating prospective Portfolio Companies, we will take into consideration
the following: (a) Industry Leader. We will research and negotiate with a
company only if it believes that company has the products and skills to become a
leader in its industry; (b) Management Quality. We will assess the overall
quality and industry expertise of a potential Portfolio Company's management;
(c) Significant Ownership. We will consider whether the company will be able to
obtain a significant position in and exert influence over a potential Portfolio
Company; (d) Network Synergy. We will also consider the degree to which a
potential Portfolio Company may contribute to the collaborative network and the
benefits a company will reap from the network and operational resources; (e)
Liquidity Events. We will consider the degree to which a potential portfolio can
realize a "liquidity event." Management will look into and identify which
channel the company can use to unlock the value of the company in question
whether it is a public offering, merger or acquisition.
Support to Company Portfolio Companies
Key Strategic Relationships. The Company's management team, board members, and
full time professional staff possess an extensive combination of managerial,
financial, operational, and technological experience. They have extensive global
business relationships in markets that represent major e-commerce opportunities.
The Company intends to take full advantage of its executives and their contacts
to provide its Portfolio Companies with quick access to technology, strategic
relationships, transactions & personnel.
Merchant Banking. The Company provides both equity and debt capital, and assists
with all phases of mergers and acquisition activity of behalf of its Portfolio
Companies.
Global Marketing Assistance. The Company significantly increases its Portfolio
Companies business opportunities through its network of global offices and
extensive strategic relationships in both the commercial and governmental
sector. The Company believes that its management team, full time professionals,
and members of its board will assist its Portfolio Companies in identifying and
capitalizing on business development and strategic partnership opportunities
worldwide.
Community of Portfolio Companies. The Company has created a community of
web-centric businesses that jointly develop and exchange ideas, technologies,
products and services. The company will facilitate and encourage cooperation
among its Portfolio Companies to cross-market their products and services where
appropriate, which will increase brand recognition, penetration, and reduce
marketing costs for each company. In addition, the company will encourage the
exchange of best practices among Portfolio Companies in many areas, including
business formation, human resources management, sales, marketing, and technology
development. The Company may also develop or acquire companies that provide
technical, marketing and developmental support to other Portfolio Companies. The
Company believes its Portfolio Companies will enjoy enhanced visibility and
cross-marketing opportunities through their collective affiliation with Web
Capital Group.
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Operational Support Services. The Company will provide its development stage
Portfolio Companies with work space and related advisory services such as
accounting, legal, marketing, public and governmental relations, advertising,
human resources management and employee benefit plan development in both
Southern California and Miami, Florida to achieve rapid product or service
development, while minimizing the entrepreneurs' time, effort and related
expenses associated with these areas.
Web Capital Group Brand. The Company will emphasize a web-centric focus. The
Company intends to promote an entrepreneurial e-commerce intent by finding,
supporting, and advising web-centric entrepreneurs. The Company believes that as
it develops public awareness of its brand, it will be valuable to its Portfolio
Companies, providing them with enhanced visibility and a strong network of
strategic, technical and managerial support.
COMPANY DIVIDEND PROGRAM
We offer a unique way for our shareholders to participate directly in all
strategic acquisitions and opportunities offered by the Company. The Company's
dividend program was initially implemented in 1998 as the "Sara-IPO Dividend
Program." This Dividend Program has evolved into the Web Capital Group
President's List. The Dividend Program allows Company's shareholders to
participate directly in each strategic acquisition, investment opportunity, or
new Portfolio Company that our Company takes an equity interest. Shareholders
will be able to take advantage of these additional investments, both through
their equity position in the Company and through their individual investment
portfolios. The program also allows the Company shareholders to take part and
acquire equity interests in all current and secondary offerings done by the
Company's current and future Portfolio Companies.
To date and over a period of two years (1998-1999), the Company has issued
approximately over 19,421,326 shares of common stock to its shareholders
pursuant to its Dividend Program.
COMPETITION
Web Capital Group may face competition with its shareholders and Portfolio
Companies for Internet-related opportunities. Such competition, and the
complications posed by the designated directors may deter companies from
partnering with us and may limit our business opportunities. As competition for
Internet products and services is intense and as the market for business to
business (B2B) grows, the Company expects that competition will intensify.
Barriers to entry are minimal, and competitors can offer products and services
at a relatively low cost. Our Portfolio Companies will compete for a share of
customers': purchasing budget for services, materials and supplies with other
online providers and traditional distribution channels, dollars spent on
consulting services with many established information systems and management
consulting firms, advertising budget with online services and traditional
off-line media such as print and trade associations.
In addition, some of the Company's Portfolio Companies may compete to attract
and retain a critical mass of buyers and sellers. Several companies offer
competitive solutions that will compete with one or more of our Portfolio
Companies. We expect that additional companies will offer competing solutions on
a stand-alone or combined basis in the future. Furthermore, our Portfolio
Companies' competitors may develop Internet products or services that are
superior to, or have greater market acceptance than, the solutions offered by
our Portfolio Companies. If our Portfolio Companies are unable to compete
successfully against their competitors, our Portfolio Companies may fail. Many
of our Portfolio Companies' competitors will have greater brand recognition and
greater financial, marketing and other resources than our Portfolio Companies.
This may place our Portfolio Companies at a disadvantage in responding to their
competitors' pricing strategies, technological advances, advertising campaigns;
strategic partnerships and other initiatives.
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Our Company will also face competition from other capital providers including
publicly-traded Internet companies, venture capital companies and large
corporations. Many of these competitors have greater financial resources and
brand name recognition than we do. These competitors may limit our opportunity
to acquire interests in new Portfolio Companies. If we cannot acquire interests
in attractive companies, our strategy to build a collaborative network of
Portfolio Companies may not succeed.
RISK FACTORS
Consideration should be given to the risks described below before making an
investment decision in Web Capital Group. The risks and uncertainties described
below are not the only ones facing the Company and there may be additional risks
that are not presently known or are currently deemed immaterial All of the
following risks may impair the Company's business operations:
Future Capital Needs. The Company is financing its current operating expenses
with proceeds from private placements of equity, short-term debt and shareholder
loans. The Company intends to use proceeds from the sale of marketable
securities of the Company's expanding Portfolio Companies to fund our business
operations and future expansion plans. There is no guarantee that such funding
may be sufficient in the future, and the Company may need to obtain funding from
outside sources. The Company may also be required to take other actions which
may lessen the value of its common stock, including borrowing money on terms
that are not favorable to the Company.
Dependence on Continued Growth of the Internet and Internet Infrastracture. The
Company's future success is highly dependent upon continued growth in the use of
the Internet generally and, in particular, as a medium for advertising,
marketing, services and commerce. Commercial use of the Internet is at an early
stage of development, and market acceptance of the Internet as a medium for
advertising, information services and commerce is subject to a high level of
uncertainty. The relative effectiveness of the Internet as an advertising medium
as compared to traditional advertising media, for example, has not been
determined. Further, there can be no assurance that the required infrastructure
to support future Internet user and traffic growth or complementary products or
services necessary to make the Internet a viable commercial marketplace will be
developed, or, if they are developed, that the Internet will become a viable
commercial marketplace for products and services such as those offered by the
Company. If commercial use of the Internet fails to continue to expand, the
Company's business, results of operations and financial condition would be
adversely affected.
Rapid Changes in Technology and Distribution Channels. Because the use of the
Internet as a commercial medium is relatively recent and continues to evolve,
the market for the Company's products and services is characterized by rapidly
changing technology, evolving industry standards, frequent new product and
service introductions, shifting distribution channels, and changing customer
demands. Accordingly, the Company's future success will depend on its ability to
adapt to this rapidly evolving marketplace. There can be no assurance that the
Company will be able to adequately adapt its products and services or to acquire
new products and services that can compete successfully or that the Company will
be able to establish and maintain effective distribution channels. Failure to
maintain competitive product and service offerings and distribution channels
would have an adverse affect on the Company's business, results of operations
and financial condition. In addition, responding to these rapid technological
changes could require substantial expenditures by the Company and there can be
no assurance that such expenditures will yield a positive investment return.
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Intense Competition. The market for Internet products and services is highly
competitive and lacks significant barriers to entry. The Company expects
competition to intensify in the future. Numerous well-established companies and
smaller entrepreneurial companies are focusing significant resources on
developing and marketing products and services that will compete with the
Company's products and services. There can be no assurance that the Company will
be able to compete successfully or that competitive pressures, including
possible downward pressure on the prices it charges for its products and
services, will not adversely affect its business, results of operations and
financial condition.
Dependence on Certain Key Employees. Web Capital Group's performance is
significantly dependent on the performance of its executive officer, Garrett K.
Krause. Mr. Krause's familiarity with the Internet industry makes him especially
critical to Web Capital Group's success. In addition, the Company's success is
dependent on its ability to attract, train, retain, motivate high quality
personnel, especially for its management team. The loss of the service of
Company's key employees, Mr. Krause especially, may harm its business. The
Company's success also depends on its continuing ability to attract, train,
retain, and motivate other highly qualified technical and managerial personnel.
Competition for such personnel is very intense.
Growth of Management. It is expected that the Company's growth will place a
significant strain on its managerial, operational and financial resources. As
the number of the Company's Portfolio Companies grows, the Company may be
required to manage multiple relationships with various customers, strategic
partners and other third parties. These requirements will be exacerbated in the
event of further growth of the Company or in the number of its strategic
relationships or sponsorship arrangements. There can be no assurance that the
Company's systems, procedures or controls will be adequate to support the
Company's operations or that Management will be able to achieve the rapid
execution necessary to successfully offer its services and implement its
business plan. The Company's future operating results will also depend on its
ability to expand its marketing organization and expand its support organization
commensurate with the growth of its business and the Internet. If the Company is
unable to manage growth effectively, its business, results of operations and
financial condition will be adversely affected.
Risks Associated with Brand Development. The Company believes that establishing
and maintaining its brand names is a crucial aspect of its effort to continue to
expand and attract Internet business and that the importance of brand
recognition will increase in the future due to the growing number of Internet
companies. Promotion and enhancement of the Company's brand names will depend
largely on the Company's ability to provide consistently high-quality products
and services, which cannot be assured. If consumers do not perceive the
Company's existing products and services to be of high quality, or if the
Company introduces new products and services or enters into new business
ventures that are not favorably received by consumers, the value of the
Company's brand names could be diminished.
Dependence on Third-Party Relationships. The Company expects that in the future
it may become dependent on certain third-party relationships. These
relationships will include arrangements relating to the creation of traffic on
the Company's Web sites and resulting generation of advertising and commerce-
related revenue. The termination of, or the failure of such Web sites to renew
on reasonable terms, such relationships could have an adverse effect on the
Company's business, results of operations and financial condition. In the
future, the Company may also become dependent on other third-party relationships
with advertisers, sponsors and partners. Most of the arrangements will probably
not require minimum commitments to use the Company's services, are often not
exclusive and are often short-term or may be terminated at the convenience of
the other party. There can be no assurance that these third parties will not
reassess their commitment to the Company at any time in the future, or that they
will not develop their own competitive services or products. Further, there can
be no assurance that the services of these companies will achieve market
acceptance or commercial success and therefore there can be no assurance that
the Company's existing relationships will result in sustained or successful
business partnerships or significant revenues for the Company.
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Computer Operations. The Company's operations are dependent in part upon its
ability to protect its computer operating systems against physical damage from
fire, floods, earthquakes, power loss, telecommunications failures, break-ins
and similar events. The Company's data centers are equipped with generator back
up equipment, multiple fiber lines and other liquid and fire protection systems
for protection in case of disaster. Despite the implementation of physical and
network security measures by the Company, its servers are also vulnerable to
computer viruses, break-ins and similar disruptive problems. The occurrence of
any of these events could result in interruptions, delays or cessations in
service to users of the Company's products and services which could have a
material adverse effect on the Company's business, results of operations and
financial condition.
Ownership of Company. As of January 1, 2000, Garrett K. Krause, the Company's
Chairman, President, Chief Executive Officer and Director, controls
approximately 65.58 % of Company's outstanding common stock and 100% of
Company's outstanding preferred stock. Consequently, Mr. Krause has a
significant influence over the Company on most matters, including the election
of directors. The concentration of Web Company Group, Inc.'s share ownership may
delay or prevent a change of control in the Company, impede a merger or
consolidation or other transactions involving the Company.
YEAR 2000 COMPLIANCE
Many currently installed computer systems are coded to accept only two digit
entries in the date code field. Beginning in the year 2000, these code fields
will need to accept four digit entries to distinguish the 21st century dates
from the 20th century dates. Computer systems being used by many companies may
have to be upgraded to comply with the Year 2000. We have completed a review of
our internal computer systems, operations and products to determine the extent
to which our business could be vulnerable to potential errors and failures as a
result of the Year 2000 problem. The cost of this review was not significant.
Based upon our review, we believe that our internal computer systems, operations
and products are Year 2000 compliant and as a result, the Year 2000 problem will
not have a material adverse effect on our business, plan of operations or
financial results. Although we believe that our systems are fully Year 2000
compliant, we face the risk that suppliers of products and /or services or
systems that we may purchase or use in our operations are not Year 2000
compliant. If third parties cannot provide us with products, services and
systems that are Year 2000 compliant, our business, results of operations and
financial condition could be affected.
SOURCES AND AVAILABILITY OF RAW MATERIALS
The Company does not utilize any specialized raw materials. All necessary
required materials, if any, are readily available. The Company is not aware of
any existing or future problem that will materially affect the source and
availability of any materials which would be required by the Company.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
The Company is not dependent on one or a few major customers for its revenues.
The Company relies on its wide-range of "In-house" Portfolio Companies to
generate operating revenues and enhancement of Company's assets.
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PROPRIETARY RIGHTS, PATENTS, TRADEMARKS
The Company's success and ability to compete will be dependent in part on the
protection of its potential patents, trademarks, trade names, service marks and
other proprietary rights. The Company intends to rely on trade secret and
copyright laws to protect the intellectual property that it plans to develop,
but there can be no assurance that such laws will provide sufficient protection
to the Company, that others will not develop a service that are similar or
superior to the Company's, or that third parties will not copy or otherwise
obtain and use the Company's proprietary information without authorization. In
addition, the Company may rely on certain intellectual property licensed from
third parties, and may be required to license additional products or services in
the future, for use in the general operations of its business plan. The Company
currently has no licenses for the use of any specific products. There can be no
assurance that these third party licenses will be available or will continue to
be available to the Company on acceptable terms or at all. The inability to
enter into and maintain any of these licenses could have a material adverse
effect on the Company's business, financial condition or operating results.
Policing unauthorized use of the Company's proprietary and other intellectual
property rights could entail significant expense and could be difficult or
impossible. In addition, there can be no assurance that third parties will not
bring claims of copyright or trademark infringement against the Company or claim
that certain of the Company's processes or features violates a patent. There can
be no assurance that third parties will not claim that the Company has
misappropriated their creative ideas or formats or otherwise infringed upon
their proprietary rights. Any claims of infringement, with or without merit,
could be time consuming to defend, result in costly litigation, divert
management attention, or require the Company to enter into costly royalty or
licensing arrangements, to prevent further infringement which could have a
material adverse effect on the Company's business, financial condition or
operating results.
LICENSES, ROYALTY AGREEMENTS, LABOR CONTRACTS
The Company has not entered into any licensing, royalty agreements or labor
contracts with any individuals or entities.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES
Certain aspects of the Company's business, as that of its competitors and the
financial services industry in general, are subject to stringent regulation by
U.S. Federal and state regulatory agencies and securities exchanges and by
various non-U.S. governmental agencies or regulatory bodies, securities
exchanges, and central banks, each of which have been charged with the
protection of the financial markets and the interests of those participating in
those markets. These regulatory agencies in the United States include, among
others, the Securities and Exchange Commission ("SEC"), and the National
Association of Securities Dealers, Inc. (NASD). In other areas of the world,
these regulators include The Financial Services Authority ("FSA"), The
Securities and Futures Authority ("SFA"), among many others. Additional
legislation and regulations and changes in rules promulgated by the SEC or other
U.S. Federal and state governmental regulatory authorities and self-regulatory
organizations and by non-U.S. governments and governmental regulatory agencies
may directly affect the manner of operation and profitability of Web Capital
Group.
The SEC, various banking regulators, the Financial Accounting Standards Board,
and Congressional committees, among others, have launched a number of
initiatives which have the effect of increasing regulation, and requiring
greater disclosure, of financial instruments, including derivatives positions
and activities.
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The Company has voluntarily elected to file this Form 10-SB registration
statement in order to become a reporting company under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Following the effective date of
this registration statement, the Company will be subject to Regulation 14A of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), which
regulates proxy solicitations. Section 14(a) requires all companies with
securities registered pursuant to Section 12(g) thereof, to comply with the
rules and regulations of the Commission regarding proxy solicitations, as
outlined in Regulation 14A. Matters submitted to stockholders of the Company at
a special or annual meeting thereof or pursuant to a written consent will
require the Company to provide its stockholders with the information outlined in
Schedules 14A or 14C of Regulation 14; preliminary copies of this information
must be submitted to the Commission at least 10 days prior to the date that
definitive copies of this information are forwarded to stockholders.
The Company will also be required to file annual reports on Form 10-KSB and
quarterly reports on Form 10-QSB with the Commission on a regular basis, and
will be required to timely disclose certain events (e.g., changes in corporate
control, acquisitions or dispositions of a significant amount of assets other
than in the ordinary course of business, and bankruptcy) in a Current Report on
Form 8-K.
Management believes that it is in the Company's best interest to become subject
to the periodic reporting requirements as set forth above, in order to provide a
mechanism for the disclosure and publication of material information about the
Company and its financial condition to its shareholders and the financial
community. In the event that the Company's obligation to file periodic reports
is suspended under the Securities Exchange Act, it is the intention of the
Company to continue to voluntarily file period reports as if so required to do
so.
Management expects that these reporting obligations will increase the Company's
annual legal and accounting costs, but it is expected that revenue will be
sufficient to meet these costs.
RESEARCH AND DEVELOPMENT
The Company has not incurred expenses associated with research and development.
COMPLIANCE WITH ENVIRONMENTAL LAWS
The Company is a venture banking firm with operations in the venture capital and
financial industries, and thus does not come under any environmental
regulations.
DEPENDENCE ON KEY PERSONNEL
The Company's performance depends substantially on the performance of its
executive officers and key employees and on the ability to retain and motivate
highly qualified personnel, especially the management. The Company does not have
"key person" life insurance policies on any of its employees. The loss of the
services of any of its executive officers or other key employees could impair
the Company's finances or business prospects. The Company's future success also
depends on its continuing ability to identify, hire, train, and retain other
highly qualified technical and managerial personnel, especially software
developers. Competition for such personnel is intense, and the Company may not
be able to attract, assimilate, or retain other highly qualified technical and
managerial personnel in the future. The inability to attract and retain the
necessary technical and managerial personnel could impair the Company's finances
or business prospects.
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EMPLOYEES
As of January 1, 2000, the Company, including its two majority-owned
subsidiaries (3wVentures.com, Inc. and FutureVest.com, Inc.) employs a total of
25 persons on a full-time basis. This number does not include employees
currently employed by Company's Portfolio Companies. None of the Company's
employees are represented by a labor union. The Company believes that its
relations with its employees are good.
REPORTS TO SECURITY HOLDERS
The public may read and copy any materials this Company has filed with the SEC
at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Room by contacting the SEC at 1-800-SEC-0330. Alternatively, the
public may obtain information on the Company by accessing the Company's website
at www.webcapitalgroup.com.
ITEM 2 - FINANCIAL INFORMATION
SELECTIED FINANCIAL DATA
The following table contains selected financial data of the Company and is
qualified by the more detailed financial statements and the notes thereto
provided in this Registration Statement. The financial data as of and for the
period ended June 30, 1999, have been derived from the Company's financial
statements, which statements were audited by Clyde Bailey, Certified Public
Accountant.
Fiscal 1999 Financial Highlights
The Company has set new records for revenues and net income for the fiscal year
1999, both with a strong balance sheet and quality equity portfolio holdings. As
of June 30, 1999, the Company reported $18,947,432 in total assets, including
$1,876,587 in cash and deposits, an increase of 2,635 % over 1998 total assets
of $719,068.
Total Revenues $ 1,947,472
Net Income $ 509,366
Total Assets $ 18,947,432
Total Liabilities $ 9,103,296
Total Stockholders' Equity $ 9,844,136
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS
Plan of Operations
The Company's plan of operations for the coming years, as discussed above, is to
continue the implementation of its current business plan by acquiring and
investing in companies, projects and technologies, providing necessary
investment banking and venture capital services from initial financing and
incubation to managerial and operational assistance, in moving its portfolio
companies towards possible publicly-traded status. The Company's primary focus
will be to assist in the growth of its two majority-owned subsidiaries,
3wVentures.com, Inc. and FutureVest.com, Inc.
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A recent $9 million private placement will be used to fund the construction and
initial operation of 3wVentures.com's SiliconLosAngeles.com 50,000 square foot
Internet incubator facility. 3wVentures.com plans to finance, develop and manage
the operations of up to 50 emerging-growth Internet companies and projects at
this new facility. The Company will serve to provide a constant pipeline or
"deal flow" of new companies through its continued program of acquisitions and
investments.
Additionally, the Company will continue to fund and develop its FutureVest.com
subsidiary, scheduled for launch on the World Wide Web the first quarter of
calendar 2000. Currently, the Company is exploring additional
acquisition/investment targets in the banking, insurance & trust, mutual &
venture capital funds and mortgage & lending sectors to assimilate into
FutureVest.com's envisioned suite of e-finance products and services. The
Company intends to file applications for Initial Public Offerings of both
3wVentures.com and FutureVest.com during the course of calendar 2000.
Results of Operations
Net Earnings. For the period ending June 30,1999, the Company reported net
earnings of $509,366 or $0.055 earnings per share and total revenues of
$1,947,472, compared to net earnings of $364,675 or $0.049 earnings per share
and total revenues of $ 907,135 for the period ended June 30, 1998 and a loss of
($112,200) or ($0.027) per share for the period ended June 30, 1997. Company's
revenues are derived from services rendered to our Portfolio Companies, and
include management, marketing, consulting, accounting, and legal services.
Cost of Revenues. For the period ended June 30, 1999, cost of revenues were
$638,481, compared to $269,639, for the year ended 1998.
General and Administrative Expenses
Company's general and administrative costs consist primarily of employee
compensation, outside services such as legal, accounting and consulting, and
travel-related costs. Other expenses included costs to keep the Company in good
corporate standing, fees to Transfer Agents, and minimal expenses for office and
bank account administration. General and administrative expenses for the period
ended June 30, 1999, were $ 544,799, compared to $149,099, for the year ended
June 30, 1998, an increase of approximately 265%. The increase in expenses is
due from hiring new employees, opening our main executive office in Miami and
expenses associated with building our overall infrastructure.
Liquidity and Capital Expenditures
Liquidity
We have funded our operations primarily with proceeds from short-term and
long-term loans totaling approximately $3,919,291, including a $1,781,525
long-term loan from the Company's President and CEO, Garrett K. Krause. Existing
cash, cash equivalents and short-term investments, proceeds from a recent
private placement and other internal sources of cash flow are expected to be
sufficient to fund our cash requirements through the next 12 months, including
commitments to new and existing Portfolio Companies and general operations
requirements.
On January 13, 2000, the Company completed a private placement offering of
3,000,000 "restricted" shares of its common stock, at $3.00 a share and options
to purchase 3,000,000 Company common stock, at an exercise price of $6.00, to
purchase 3,000,000 shares of stock, resulting in $9,000,000 gross proceeds to
the Company plus any proceeds from the options. The Company plans to use these
proceeds to continue funding the development of 3wVentures.com, the Company's
incubating unit, and to finance the global operations of FutureVest.com, the
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<PAGE>
Company's new e-finance division. A portion of the new capital will be allocated
towards the development of SiliconLosAngeles.com, 3wVentures.com's 50,000 square
foot technology building and also towards the building of additional high-tech
Internet incubating facilities. The Company anticipates that new equity raised
will provide sufficient capital to support Company's continuing developmental
operations through fiscal year 2000, but there can be no assurance that this
expectation will be fully realized.
The Company intends to raise additional funds from private placement offerings
by Company's majority-owned subsidiaries and Portfolio Companies. Proceeds will
be used by each company to fund its own operations as they each move toward
launching their own initial public offerings. Web Capital Group will assist
these companies in implementing their proposed operations over the next 12
months, as they grow independently under the Web Capital Group banner.
Any future equity financing could have a substantial dilution of the interests
of current stockholders and any future debt financing could involve restrictive
covenants with respect to future capital raising activities and other financial
and operation matters. The Company believes that its existing capital resources
together with ongoing fund raising efforts will be sufficient to meet its
operating expenses and capital requirements. However, the Company's long-term
capital requirements will depend upon many factors, including but not limited
to, Company's ability to capitalize on the business opportunities associated
with the Internet, the rate of market acceptance of Company's products and
services as offered by Company's family of Portfolio Companies, the success of
Initial Public Offerings, and other factors, many of which are beyond the
Company's control.
Expenditures
The Company's expenditures consisted of $544,799 of general and administrative
expenses and $638,481 for cost of revenues.
ITEM 3 - DESCRIPTION OF PROPERTY
Location of Principal Properties
The Company is sub-leasing a total of 2,200 square feet of office space, located
at 501 Brickell Drive, Suite 203, Miami, Florida 33131. The current monthly rate
is $3,401.85, and the lease expires in March 2000. The Company anticipates that
it will negotiate to extend its Miami lease from 3 to 5 years. The Company is
also leasing a total of 3,000 square feet of office space, located at 4344
Promenade Way, Suite 102P, Marina del Rey, California 90292. The current monthly
rental rate is $5,750. The lease is a month-to-month tenancy.
Investment Policies
The Registrant does not have a policy of acquiring assets primarily for possible
capital gain or for income. Moreover, the Registrant does not have a policy of
making investments in real estate, real estate mortgages, and does not have
securities of or interests in persons primarily engaged in real estate
activities.
Description of Real Estate and Operating Data
The Registrant does not own any real estate properties and has no agreements to
acquire any such properties at this time.
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<PAGE>
ITEM 4 - SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT
The following table sets forth, as of January 1, 2000, the number and percentage
of outstanding shares of common stock, $0.001 par value, which, according to the
information supplied to the Company, were beneficially owned by (i) each current
officer and director of the Company; (ii) each person or entity known to
beneficially own more than 5% of the Company's Common Stock; and (iii) all
directors and executive officers as a group. The Company has no other class of
stock outstanding. The information is based on 10,308,482 shares of common stock
and 200,000 shares of preferred stock issued and outstanding as of the date of
this Registration. Except as otherwise indicated, the persons named in the table
below have sole voting and dispositive power with respect to all shares
beneficially owned.
<TABLE>
<CAPTION>
Title of Class Name and Address Number of Shares Percent of all shares
<S> <C> <C>
Common World Vest Holding Corp.(1) 3,500,000 34%
Stock Hurrican Hole Plaza
Paradise Island
Nassau, Bahamas
Common Garrett Krause Trust (2) 2,810,000 27.26%
Stock 2460 Matthew Road
Naoose Bay, B.C.
Canada, VOR 2RO
Common FutureVest Net Fund I (3) 444,445 4.4%
Stock Hurricane Hole Plaza
Paradise Island
Nassau Bahamas
Common FutureVest Net Fund II (4) 555,555 5.4%
Stock Hurricane Hole Plaza
Paradise Island
Nassau Bahamas
Preferred Garrett K. Krause 100,000 50%
Stock (President, Director, CEO)
4344 Promenade Way
Suite 102P
Marina del Rey, CA 90292
Preferred WorldVest Holding Corp (1) 100,000 50%
Stock Hurrican Hole Plaza
Paradise Island
Nassau, Bahamas
Common All officers and directors 6,760,000 65.6%
Stock as a group (Garrett K. Krause,
President, CEO, Director)
Preferred All officers and directors 200,000 100%
Stock as a group (Garrett K. Krause,
President, CEO, Director)
</TABLE>
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<PAGE>
(1) WorldVest Holding Corporation is controlled by Garrett K. Krause.
(2) Garrett Krause Trust is controlled by Garrett K.Krause.
(3)(4) FutureVest Net Fund I and FutureVest Net Fund II are both Managed Funds
managed by Sean Krause, brother of Garrett K. Krause.
Note - Garrett K. Krause controls a total of 6,760,000 shares (or 65.6%) of
Company's common stock and 200,000 shares (or 100%) of Company's preferred
stock.
The Company believes that the beneficial owners of securities listed above,
based on information furnished by such owners, have sole investment and voting
power with respect to such shares. 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. None
of the foregoing has any right to acquire other or additional shares of the
Company. Moreover, there is no existing arrangement that may result in a change
of control of the Company.
ITEM 5 - DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of the executive officers and
directors of the Company, the principal offices and positions with the Company
held by each person and the date such person became an executive officer or a
director of the Company. The executive officers of the Company are elected
annually by the Board of Directors and serve at the discretion of the Board of
Directors. The directors serve one-year terms and until their successors are
elected.
<TABLE>
<CAPTION>
Directors and Executive Officers
Name Age Position(s) Held Since
<S> <C> <C> <C>
Garrett K. Krause 33 Chairman, Chief Executive Officer, November 1996
President and Director
Kristen R. Corri 37 Vice-President and Director January 1, 2000
</TABLE>
Garrett K. Krause has been the Chairman, CEO, Chairman and Director of the
Company since November 1996. Mr. Krause founded the Company in 1996, with the
goal of acquiring and investing in companies, new technologies and projects,
that when fully-developed, would be "spun-off" as NASDAQ publicly traded
companies. Mr. Krause studied finance at the University of Calgary, Canada. He
began his business career in 1986 by developing a Point of Sale/Inventory
Control Software company. Within two years and after reaching sales in excess of
$3 million, he sold the company to a large competitor. Mr. Krause has an
extensive background in the investment banking industry: specializing in taking
small emerging-growth companies public, mergers and acquisitions, in addition to
corporate mergers and joint ventures. Over the years, Mr. Krause has honed his
public relations' skills with brokers and investors alike, making him both an
able, no-nonsense negotiator and an approachable leader. His successful track
record in the mergers and acquisitions, developmental and managerial support
arenas of public and private companies provides the Company with an invaluable
asset.
Kristen R. Corri has been the Vice President and Director of the Company since
January 1, 2000. Currently, Ms. Corri's focus is on the Company's finance
operating divisions, including those of FutureVest.com (USA), Inc. Ms. Corri's
responsibilities include the implementation of Company's marketing strategy as
well as overseeing a staff of Broker-Relations specialists in their daily
interaction with brokerage firms throughout the United States. Prior to working
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<PAGE>
with the Company, Ms. Corri served as the Vice President of Sales & Marketing
and Partner with S&C Food Distribution, from 1990 to 1997. While under her
direct supervision, the company expanded its product line to approximately 3,000
items, 12 delivery vehicles and 4,000 customers. She also was responsible for
formatting the company's business plan to meet its growth rate, which recognized
annual revenues increase to over $17 million in 1996 from $1.5 million in 1990.
The company was eventually sold for 10 times earnings. From 1997 to 1999, Ms.
Corri served as President and Broker-Consultant for Hannson & Associates LLC,
where she represented 38 manufacturers and maintained a client list of some 400
companies. Her duties included domestic and international product negotiation,
marketing development for clients ranging from major supermarket chains to
retail chains, including Starbuck's Coffee. She also created "store within a
store" programming in concentrating and maximizing within several leading retail
chains including Nordstrom, Bloomingdale's, Old Navy/Gap and Williams-Sonoma.
Ms. Corri's educational background includes a B.S. in Business Administration
from the University of California at Los Angeles.
Compensation of Directors
Directors of the Company currently are receiving no compensation for their
services in those capacities.
Family Relationships
Sean Krause is Garrett K. Krause's brother and is the beneficial owner of
100,000 shares of Company's common stock. Sean Krause is the Manager of a total
of 1,350,000 (or 13.1%) of Company's shares of common stock through the
following entities: Sean Krause Trust, Krause Family Trust, FutureVest Net Fund
I and FutureVest Net Fund II. There are no other family relationships between
any of the directors and executive officers of the Company and any person
beneficially owning or controlling more than 5% of its outstanding shares.
Legal Proceedings
The Company currently is not a party to any material litigation and to the
knowledge of this Company, no present or former director, executive officer or
person nominated to become a director or executive of the Company has ever:
(a) filed a bankruptcy petition by or against any business of which such person
was a general partner or executive officer at the time of the bankruptcy or
within two years prior to that time;
(b) had any conviction in a criminal proceeding or is being subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(c) been subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, or any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending, or otherwise limiting his
involvement in any type of business, securities or banking activities; or
(d) been found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Future Trading Commission to have violated a federal
or state securities or commodities law, and the judgment has not been reversed,
suspended or vacated.
ITEM 6 - EXECUTIVE COMPENSATION
Summary Compensation Table
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<PAGE>
The Summary Compensation Table lists certain compensation information for
services rendered by executive officers while serving in all capacities for the
period ended this date. Other than as set forth herein, no executive officer's
salary and bonus exceeded $100,000 in any of the applicable years. All listed
executive officers have not received any stock options or similar incentive
plans.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------
Name Year Salary Bonus Other Annual Compensation
And Principal
Position(s)
<S> <C> <C> <C> <C>
Garrett K. Krause 1999 $240,000 $250,000 1,000,000 shares common stock
President, Chief
Executive Officer,
Chairman of the
Board
Kristen R. Corri 1999 $76,000 n/a n/a
Vice-President
Director
</TABLE>
(1) The President of the Company, Garrett K. Krause was issued a total of
2,000,000 "restricted" shares of common stock, restricted under Rule 144, during
1997 and 1999. 1,000,000 of the shares were issued as bonus compensation in
connection with services performed during 1997 and the other 1,000,000 shares
were issued as bonus compensation in connection with services performed during
1998, pursuant to an Executive Employment Agreement dated November 27, 1996. An
additional 1,000,000 shares will be issued during the year 2000, pursuant to his
1996 employment agreement.
- --------------------------------------------------------------------------------
Long-Term Compensation
----------------------
Name Restricted Payouts
And Principal Stock Awards
Position(s)
Garrett K. Krause n/a n/a
President, Chief
Executive Officer,
Chairman of the
Board
Kristen R. Corri n/a n/a
Vice-President
Director
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<PAGE>
ITEM 7 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has made several issuances of stock to its President and CEO,
Garrett K. Krause, or entities controlled by him. During 1997 and 1999, the
Company issued 1,000,000 and 1,000,000 "restricted" shares of common stock,
respectively, to Mr. Krause as bonus compensation for services rendered in
managing the Company during 1997 and 1998. In November 1996, the Company issued
100,000 shares of its preferred stock, restricted under Rule 144, to Mr. Krause,
pursuant to share exchange agreements entered into in November 1996, and 100,000
"restricted" shares of preferred stock, to WorldVest Corporation, a corporation
that is 100% controlled by Garrett K. Krause, pursuant to share exchange
agreements dated November 27, 1996.
ITEM 8 - LEGAL PROCEEDINGS
The Company may from time to time be involved in various claims, lawsuits, and
disputes with third parties, or actions incidental to the operation of its
business. Currently, there is no litigation pending or threatened by or against
the Company.
ITEM 9 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
The following table sets forth the high and low bid prices for shares of the
Company Common Stock for the periods noted, as reported by the National Daily
Quotation Service and the NASD Bulletin Board. The quotations reflect prices in
the over-the-counter market between dealers in securities and do not include
retail mark-up, markdown or commission and do not necessarily represent actual
transactions. The Company's Common Stock was quoted under the symbol "SARH" from
1995 through 1997. Beginning on October 31, 1997, the stock was quoted under the
symbol "SHAL," and on December 21, 1999, the stock began being quoted under the
symbol "WBCG."
Symbol Calendar Quarter Ending Closing Bid Closing Ask
SHAL March 31, 1998 1 3/16 1 1/2
SHAL June 30, 1998 3 7/16 3 1/2
SHAL September 30, 1998 2 3/16 2.2812
SHAL December 31, 1998 3.2187 3 3/8
SHAL March 31, 1999 7 3/4 8 5/16
SHAL June 30, 1999 5 3/4 6 3/4
SHAL September 30, 1999 4 1/4 4 11/16
WBCG December 31, 1999 3 1/2 3 3/4
This form is being filed with the Securities and Exchange Commission (the "SEC")
in order to become a reporting company under the Exchange Act of 1934 and to
maintain the Company's quotation on the OTC Bulletin Board in compliance with
National Association of Securities Dealers, Inc. (NASD) Rules 6530 and 6540.
Pursuant to NASD Eligibility Rule 6530 (the "Rule") issued on January 4, 1999,
issuers who do not make current filings pursuant to Sections 13 and 15(d) of the
Securities Act of 1934 are ineligible for listing on the NASDAQ Over-the-Counter
Bulletin Board ("OTCBB"). Pursuant to the Rule, issuers who are not current with
such filing are subject to having the quotation of their securities removed from
the OTCBB pursuant to a phase-in schedule depending on each issuer's trading
symbol as reported on January 4, 1999. Such issuers may thereafter quote their
Common Stock on the National Quotation Bureaus "Pink Sheets" (the "Pink
Sheets"). Therefore, pursuant to the phase-in schedule, the Company is subject
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<PAGE>
to having the quotation of its securities removed from the OTCBB on April 5,
2000 until the Company becomes compliant with the Rule. One month prior to
having the quotation of their securities removed from the OTCBB, non-complying
issuers will have their trading symbol appended with an "E".
The Company is not currently in compliance with the Rule, and in the past, has
not made filings pursuant to Sections 13 and 15(d) of the Securities Act of
1934. The Company has filed this Registration Statement on Form 10 in order to
become a "reporting" company and therefore comply with the Rule. However, the
Company will remain subject to having quotation of its securities removed from
the OTCBB on March 31, 2000 and trading of its securities thereafter on the Pink
Sheets, until such time as the Securities and Exchange Commission (the "SEC")
has reviewed the Company's Form 10 and has stated that it has no further
comments. Should the SEC fail to clear all comments prior to March 31, 2000,
quotation of the Company's securities will be removed from the OTCBB and
thereafter traded on the Pink Sheets until such time as the SEC clears this
Registration Statement. Once the Company has complied with the Rule, it will be
once again become eligible for listing on the OTCBB and will seek to be
reinstated on the OTCBB or other appropriate exchange.
Number of Shareholders
Currently, the numbers of holders of record of the Common Stock of the Company
is 289.
Dividend Policy
The Company's Bylaws govern the issuance of dividends and such issuance is
within the discretion of the Board of Directors. Our Company offers a unique way
for our shareholders to participate directly in all strategic acquisitions by
the Company. The Company's dividend program, the President's List, (formerly
"Sara-IPO Dividend Program) was initially started during 1998. This program
allows the Company's shareholders to participate directly in each strategic
acquisition that the Company takes part in, both through their individual
portfolios as well as through their equity positions in the Company. The program
also allows the Company shareholders to take part and acquire equity interests
in all offerings done by the Company's current and future Portfolio Companies.
To date, the Company issued the following stock dividends to the shareholders of
the Company:
1.On April 15, 1998, the Company issued a 1-for-1 stock dividend of shares of
Janus International, Inc., representing approximately 8,227,318 shares of common
stock, restricted under Rule 144, pursuant to a stock purchase agreement between
Triumph Foods International, Inc., (currently, Janus International, Inc.) and
shareholders of X-SELNET Technology Group, Inc., dated November 6, 1998.
2. On September 26, 1998, the Company issued a 1-for-3 stock dividend of shares
of USLab.com, Inc., representing approximately 2,759,300 shares of common stock,
restricted under Rule 144, pursuant to Company's Dividend Program. (In 1999,
X-Selnet Technology Group ("X-Selnet") was merged into USLab.com, Inc., pursuant
to a share-exchange agreement. Consequently, the shares issued by X-Selnet are
treated as having been issued by USLab.com, Inc.)
3. On January 8, 1999, the Company issued a 1-for-5 stock dividend of shares of
Tril-MediaNet.com, Inc., representing approximately 1,959,013 shares of common
stock, restricted under Rule 144.
4. In February 1999, the Company issued a 1-for-10 stock dividend of shares of
SolutionNet International, Inc., representing approximately 1,059,583 shares of
common stock, restricted under Rule 144, pursuant to a share-exchange agreement
entered into between the Company and SolutionNet, dated April 2, 1999.
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<PAGE>
5. In April 1999, the Company issued a 1-for-10 stock dividend of shares of
USLab.com, representing approximately 1,283,567 shares of common stock,
restricted under Rule 144, pursuant to a share-exchange agreement between
USLab.com and X-Selnet Technology Group, Inc.
6. On May 26, 1999, the Company issued a 1-for-4 stock dividend of shares of
SaraOnline.com, (renamed 3wVentures.com, Inc.), representing approximately
2,526,317 shares of common stock, restricted under Rule 144.
7. On January 5, 2000, the Company issued a 1-for-5 stock dividend of shares of
FutureVest.com, (USA) Inc., representing approximately 2,061,696 shares of
common stock, restricted under Rule 144.
To date, the Company has issued approximately 19,359,630 shares of common stock
to its shareholders, pursuant to its Dividend Program.
ITEM 10 - RECENT SALES OF UNREGISTERED SECURITIES
In November 1996, the Company issued 6,500,000 shares of its common stock,
100,000 Class B shares of preferred stock (pre-preferred stock conversion), and
100,000 class C shares of preferred stock (pre-preferred stock conversion),
exempt pursuant to section 4(2) of the Securities Act of 1933, in connection
with five separate share exchange agreements dated November 1, 1996.
In October 1997, the Company issued 50,000 shares of "restricted" (as that term
is defined under Rule 144 of the Securities Act of 1933) common stock to an
individual, in settlement of prior debt of $50,000 and 20,700 shares of
"restricted" common stock, to certain individuals, in consideration for certain
consultation services valued at $20,700. Each issuance was exempt under section
4(2) of the Securities Act of 1933.
In November 1997, the Company issued 1,000,000 shares of "restricted" (as that
term is defined under Rule 144 of the Securities Act of 1933) common stock to
Garrett K. Krause, the Company's President and CEO, as bonus compensation valued
at $1,000,000. The issuance was made pursuant to an Executive Employment
Agreement dated November 27, 1996 and was exempt under section 4(2) of the
Securities Act of 1933.
In March 1998, the Company issued 899,999 shares of "restricted" (as that term
is defined under Rule 144 of the Securities Act of 1933) common stock to certain
individuals, in settlement of prior debt of $674,999 and 529,622 shares of
"restricted" common stock to certain individuals, as consideration for
consultation and public relations services. Each issuance was exempt under
section 4(2) of the Securities Act of 1933.
In May 1998, the Company issued 8,600 shares of "restricted" (as that term is
defined under Rule 144 of the Securities Act of 1933) common stock to certain
individuals, in settlement of prior debt, valued at $.75 per share and 5,251
shares of "restricted" (as that term is defined under Rule 144 of the Securities
Act of 1933) common stock to certain individuals, in consideration for
consultation services rendered. Each issuance was exempt pursuant to section
4(2) of the Securities Act of 1933.
In March 1999, the Company issued 5,166 of "restricted" common stock to certain
individuals, as consideration for consultation and public relations services.
The issuance was exempt under section 4(2) of the Securities Act of 1933.
In June 1999, the Company issued 1,000,000 shares of "restricted" (as that term
is defined under Rule 144 of the Securities Act of 1933) common stock to Garrett
K. Krause, the Company's President and CEO as bonus compensation valued at
$1,000,000. The issuance was made pursuant to an Executive Employment Agreement
dated November 27, 1996 and was exempt pursuant to section 4(2) of the
Securities Act of 1933.
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<PAGE>
On January 13, 2000, the Company completed a private placement offering of
3,000,000 shares of its common stock at an offering price of $3.00 per share,
and options to purchase 3,000,000 shares of its common stock, with an exercise
price of $6.00 per share, to 3 "accredited" investors, resulting in $9,000,000
in gross proceeds to the Company and proceeds from options. The offering was
made pursuant to exemptions offered under Rule 506 of Regulation D and Section
4(2) of the Securities Act of 1933.
ITEM 11 - DESCRIPTION OF SECURITIES
Common Stock
The Company's Articles of Incorporation authorize the issuance of 50,000,000
shares of Common Stock, $0.001 par value per shares, of which 10,308,482 were
outstanding as of January 1, 2000. Holders of shares of Common Stock are
entitled to one vote on each matter submitted to a vote of shareholders. Holders
of Common Stock have no cumulative voting rights. Holders of shares of Common
Stock are entitled to share ratably in dividends, if any, as may be declared,
from time to time by the Board of Directors, in its discretion, from funds
legally available therefore. To the extent that additional shares of the
Company's Common Stock are issued, the relative interests of the existing
stockholders may be diluted. Holders of common stock do not have any preemptive
or preferential rights to acquire any shares or securities of the Company,
including shares or securities held in the treasury of the Company. In the event
of a liquidation, dissolution, or winding up of the Company, the holders of
shares of Common Stock are entitled to share pro rata all assets remaining after
payment in full of all liabilities. Holders of Common Stock have no preemptive
rights or purchase the Company's common stock. There are no conversion rights or
redemption or sinking fund provisions with respect to the common stock. All of
the outstanding shares of Common Stock are fully paid and non-assessable.
Preferred Stock
The Company's Articles of Incorporation authorizes the issuance of 10,000,000
shares of Preferred Stock, $0.001 par value, of which 200,000 shares were issued
and outstanding as of January 1, 2000. The Company's Board of Directors has
authority, without action by the shareholders, to issue all or any portion of
the authorized but unissued preferred stock in one or more series and to
determine the voting rights, preferences as to dividends and liquidation,
conversion rights, and other rights of such series. Dividends in cash, property
or shares shall be paid upon the Preferred Stock for any year on a cumulative or
non-cumulative basis as determined by a resolution of the Board of Directors
prior to the issuance of such Preferred Stock, to the extent earned surplus for
each such year is available, in an amount as determined by resolution by the
Board of Directors prior to the issuance of such Preferred Stock. No other
dividend shall be paid on the Preferred Stock.
The Preferred Stock may be redeemed in whole or in part as determined by a
resolution of the Board of Directors prior to the issuance of such Preferred
Stock, upon prior notice to the holders of record of the Preferred Stock,
published, mailed and given in such manner and form and on such terms and
conditions as may be prescribed by the Bylaws or by resolution of the Board of
Directors, by payment in cash or Common Stock for each share of the Preferred
Stock to be redeemed, as determined by resolution of the Board of Directors
prior to the issuance of such Preferred Stock. Common Stock used to redeem
Preferred Stock shall be valued as determined by a resolution of the Board of
Directors prior to the issuance of such Preferred Stock. Any rights to or
arising from fractional shares shall be treated as rights to or arising from one
share. No such purchase or retirement shall be made if the capital of the
Company would be impaired thereby.
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<PAGE>
Holders of shares of Preferred Stock may convert each share of Preferred Stock
into shares of Common Stock at the rate of one (1) share of Preferred Stock to
ten (10) shares of Common Stock.
Debt Securities
The Registrant does not have any debt securities and the Registrant does not
anticipate or intend to register any other securities at this time.
Transfer Agent
The transfer agent is Securities Transfer Corporation, 16910 Dallas Pkwy, Suite
100, Dallas, Texas 75248, Telephone (972) 447-9890.
Shares Eligible for Resale
Of the 10,308,482 presently issued and outstanding shares of common stock,
8,608,482 are "restricted" securities as that term is defined under the
Securities Act (the "Act") of 1933. Said shares may be resold pursuant to the
provisions of Rule 144 under the Act or other exemptions, as described below.
In general, under Rule 144, a person (or persons whose shares are aggregated)
who has beneficially owned restricted securities of the Company for at least one
year, including any person who may be deemed to be an "affiliate" of the Company
(as the term "affiliate" is defined under the Act), is entitled to sell, within
any three-month period, a number of shares that does not exceed the greater of
(i) the average weekly trading volumes in the Company's Common Stock during the
four calendar weeks preceding such sale or (ii) 1 % of the shares of Common
Stock then outstanding. A person who is not deemed to be an "affiliate" of the
Company and who has held restricted shares for at least two years would be
entitled to sell such shares without regard to the resale limitations of Rule
144.
ITEM 12 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Bylaws and section 78,751 of the Nevada Revised Statutes for
indemnification of the Company's Officers and Directors in certain situations
where they might otherwise personally incur liability, judgments, penalties,
fines and expenses in connection with a proceeding or lawsuit to which they
might become parties because of their position with the Company. In general,
Directors and Officers are indemnified with respect to actions taken in good
faith in a manner reasonably believed to be in, or not opposed to, the best
interests of the Company, and with respect to any criminal action or proceeding,
actions that the indemnitee had no reasonable cause to believe were unlawful.
ITEM 13 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the Consolidated Financial Statements, together with the
notes thereto and the reports thereon appearing on pages F-1 through F-7 of this
Form 10.
31
<PAGE>
ITEM 14 - CHANGES IN ACCOUNTANTS
The Company has utilized the services of Clyde Bailey, Certified Public
Accountant as its principal accountant to audit the Company's financial
statements since 1996. The Company intends to continue using the services of Mr.
Bailey in the future in conducting the audits of its financial statements. There
have been no disagreements between any of the above-mentioned accountants of the
type required to be reported under item 14 since the date of their engagement.
ITEM 15 - FINANCIAL STATEMENTS AND EXHIBITS
a) INDEX TO FINANCIAL STATEMENTS
Audited Financial Statements for the periods ended
June 30, 1999, June 30, 1998, and June 30, 1997 .........................F-1
b) INDEX TO EXHIBITS
EXHIBIT NUMBER
2.1 Agreement of Merger dated December 22, 1999.
2.2 Joint Venture and Exchange Agreement dated September 22, 1999.
2.3 Share-Exchange Agreement dated July 1, 1999.
3.1 Articles of Incorporation of Web Capital Group, Inc., a Nevada
corporation, filed with the State of Nevada on December 8, 1999.
3.2 Bylaws of the Company adopted on December 5, 1999.
10.1 Sub-lease by and between Sara Hallitex Corporation and Nason & Nason,
Inc., relating to property located at 501 Brickell Key Drive, Miami,
Florida 33131.
10.2 Lease by and between Sara Hallitex Corporation and Marina City Club
Towers, relating to property located at 4344 Promenade Way, Suite 102P,
Marina del Rey, CA 90292
10.3 Executive Employment Agreement between the Company and Garrett K.
Krause, dated November 26, 1997.
10.4 Executive Employment Agreement between the Company and Kristen R.
Corri, dated January 1, 2000.
11.1 Statement regarding computation of Per-Share Earnings
21.1 Subsidiaries of Registrant
27.1 Financial Data Schedule
32
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
WEB CAPITAL GROUP, INC.
Date: January 21, 2000 By: /S/ Garrett K. Krause
--------------------------------
Garrett K. Krause, President
33
<PAGE>
F-1
Web Capital Group, Inc.
Audited Financial Statements For Periods Ended
June 30, 1999, June 30, 1998, and June 30, 1997
Table of Contents
1) Report of Independent Certified Public Accountant F-2
2) Balance Sheet - Assets F-3
3) Balance Sheet - Liabilities and Stockholder's Equity F-4
4) Statement of Operations F-5
5) Statement of Cash Flows F-6
6) Statement of Changes in Stockholders' Equity F-7
7) Notes to Financial Statement F-8
34
<PAGE>
F-2 Report Of Independent Certified Public Accountant
Board of Directors
Web Capital Group, Inc.
(formerly Sara Hallitex Corporation)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANT
- ---------------------------------------
I have audited the accompanying balance sheet of Web Capital Group (formerly
Sara Hallitex Corporation "Company") as of June 30, 1999 and 1998 and the
related statement of income and expenses, statement of changes in stockholders'
equity, and the statement of cash flows for the years ended June 30, 1999, 1998,
and 1997. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of June 30, 1999,
1998 and 1997 and the results of its operations for the years then ended in
conformity with generally accepted accounting principles.
Clyde Bailey P.C.
San Antonio, Texas
January 12, 2000
35
<PAGE>
<TABLE>
F-3
Web Capital Group, Inc.
(formerly Sara Hallitex Corporation)
Balance Sheet
As of June 30, 1999 and 1998
Assets
<CAPTION>
CURRENT ASSETS 1999 1998
- -------------- ---- ----
<S> <C> <C>
Cash 1,876,587 19,832
Accounts Receivable 1,961,367 -
Notes Receivable 416,082 515
Inventory - -
-------------- --------------
TOTAL CURRENT ASSETS 4,254,036 20,347
Investments 14,542,004 680,592
FIXED ASSETS
- ------------
Office Equipment 144,222 15,379
Vehicle 40,450 -
LEASEHOLD IMPROVEMENTS 1,129 -
Less: Allowance for Depreciation (37,159) -
-------------- --------------
148,642 15,379
OTHER ASSETS
- ------------
Deposits 2,750 2,750
Organization Costs, net 0 0
- -----------------------
DEFERRED TAX CREDIT - -
-------------- --------------
2,750 2750
-------------- --------------
Total Assets $ 18,947,432 $ 719,068
============== ==============
</TABLE>
36
<PAGE>
<TABLE>
F-4
Web Capital Group, Inc.
(Formerly Sara Hallitex Corp.)
Balance Sheet
As of June 30, 1999, 1998, 1997
Liabilities and Stockholders Equity
<CAPTION>
CURRENT LIABILITIES 1999 1998
- ------------------- ---- ----
<S> <C> <C>
Accounts Payable 14,981 2,260
Accrued Interest - -
Notes Payable, Current Portion 3,605,737 27,858
Federal Income Tax Payable 361,572 97,006
Federal Income Tax Payable-Comprehensive Income 4,802,467 -
ACCRUED EXPENSES 4,985 -
-------------- --------------
Total Current Liabilities 8,789,742 127,124
NON CURRENT LIABILITIES
- -----------------------
Note Payable 3,919,291 608,497
LESS PORTION SHOWN AS CURRENT (3,605,737) (27,858)
-------------- --------------
313,554 580,639
-------------- --------------
TOTAL LIABILITIES 9,103,296 707,763
Commitments and Contingencies - -
STOCKHOLDER'S EQUITY
- --------------------
Preferred Stock, 10,000,000 shares authorized
- ---------------------------------------------
$.001 par value, 200,000 Shares issued and
outstanding. 200 200
COMMON STOCK, 50,000,000 SHARES AUTHORIZED
$.001 par value, 10,308,482 and 9,303,316
Shares issued and outstanding 10,308 9,303
Accumulated other comprehensive income (loss) 9,322,460 0
Paid in Surplus 825,000 825,000
Retained Earnings (313,832) (823,198)
-------------- --------------
9,844,136 11,305
Total Liabilities and Stockholder Equity $ 18,947,432 $ 719,068
============== ==============
</TABLE>
37
<PAGE>
<TABLE>
F-5
Web Capital Group, Inc.
(Formerly Sara Hallitex Corp.)
Statement of Operations
For the Twelve Month Period Ended June 30, 1999, 1998, 1997
<CAPTION>
REVENUE 1999 1998 1997
- ------- ---- ---- ----
<S> <C> <C> <C>
Revenue 1,940,000 907,135 -
Other Revenue 7,472 - -
------------ ------------ ------------
Total Revenues 1,947,472 907,135 -
------------ ------------ ------------
COST OF REVENUES
----------------
PURCHASES AND OUTSIDE ORDERS 410,059 282,544 100,000
OTHER COST OF REVENUES 288,422 14,095 -
------------ ------------ ------------
Total Cost of Revenues 638,481 296,639 100,000
Gross Profit 1,308,991 610,496 (100,000)
GENERAL AND ADMINISTRATIVE EXPENSES
Interest 975 2,050 -
DEPRECIATION AND AMORTIZATION 37,160 - -
Professional Fee's 170,316 103,895 70,000
Rent 75,162 8,250 -
Supplies 14,922 4,643 -
Telephone 45,162 4,729 -
TRAVEL 93,120 18,421 -
- ------
OTHER EXPENSES 107,982 7,111 -
------------ ------------ ------------
Total General and Administrative
Expenses 544,799 149,099 70,000
Income (Loss) from Continuing Operations
Before other income and expenses and income taxes 764,192 461,397 (170,000)
OTHER INCOME
- ------------
Sale of Assets - - -
Interest Income 7,574 284 -
Total Other Income 7,574 284 -
Net Income (Loss) Before Income Taxes 771,766 461,681 (170,000)
------------ ------------ ------------
Income Tax (Expense) Benefit (262,400) (97,006) 57,800
------------ ------------ ------------
Provision for Income Taxes (262,400) (97,006) 57,800
Net Income (Loss) 509,366 364,675 (112,200)
------------ ------------ ------------
Net Income (Loss) Per Share 0.055 .049 (.027)
Weighted Average Number of Shares Outstanding. 9,303,316 7,453,540 4,080,200
</TABLE>
38
<PAGE>
<TABLE>
F-6
Web Capital Group Inc.
(Formerly Sara Hallitex Corp.)
Statement of Cash Flows
For the Twelve Month Period Ended June 30, 1999, 1998, 1997
<CAPTION>
Cash Flows from Operating Activities 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net Income (Loss) 509,366 364,675 (112,200)
Adjustments to Reconcile Excess
Contributions to Cash
Provided from Operations:
Depreciation 37,159 - -
Federal Income Tax Payable- 4,802,467 - -
Accounts Receivable (1,961,367) - -
COMPREHENSIVE INCOME 9,322,435 - -
ACCOUNTS PAYABLE 13,751 (97,740) 100,000
Other Assets - (2,750) -
Notes Receivable (415,567) (515) -
Deferred Tax Credit - (57,800) (57,800)
Federal Income Tax Payable 262,400 97,006 -
Accrued Expenses 4,985 - -
------------ ------------ ------------
Total Adjustments 12,066,263 53,801 42,200
NET CASH USED IN OPERATING ACTIVITIES 12,575,629 418,476 (70,000)
Cash Flows from Investing Activities
Investments (13,859,246) 202,208 -
Fixed Assets (170,422) (15,379) -
------------ ------------ ------------
Net Cash Used in Investing Activities (14,029,668) 186,829 -
CASH FLOW FROM FINANCING ACTIVITIES
- -----------------------------------
INCREASE IN LONG TERM DEBT 3,310,794 379,462 70,000
Extinguishments of Long Term Debts 0 (907,135) -
Paid -in- Capital 0 - -
------------ ------------ ------------
Net Cash Used in Financing Activity 3,310,794 (527,673) 70,000
NET INCREASE (DECREASE) IN CASH 1,856,755 9,832 -
Cash Balance, Begin of Period 19,832 - -
Cash Balance, End of Period $1,876,587 19,832 -
============ ============ ============
</TABLE>
39
<PAGE>
<TABLE>
F-7
Web Capital Group, Inc.
(Formerly Sara Hallitex Corp.)
Statement of Stockholders Equity
<CAPTION>
Common Accumulated
Preferred Shares Other
Preferred Common Shares Par Par Paid in Comprehensive Retained
Shares Shares Value Value Capital Income (Loss) Earnings Total
------------- -------------- ---------------- ---------- ---------- -------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance July 1, 1997 200,000 6,769,344 200 6,769 825,000 (1,187,873) (355,904)
Stock Issuance 2,533,972 2,534 - 2,354
Net Income (loss) 304,709 364,675
------------- -------------- ---------------- ---------- ---------- -------------- ----------- ----------
Balance June 30, 1998 200,000 9,303,316 200 9,303 825,000 (883,164) 11,305
COMPREHENSIVE INCOME (LOSS)
Net income (Loss) 509,366 509,366
Unrealized gain (Loss) on
Securities 9,322,460 9,322,460
----------
Total Comprehensive Income 9,831,826
Stock Issuance - 1,005,166 - 1,005 - 1,005
------------- -------------- ---------------- ---------- ---------- -------------- ----------- ----------
Balance June 30, 1999 200,000 10,308,482 200 10,308 825,000 9,322,460 (313,832) 9,844,136
============= ============== ================ ========== ========== ============== =========== ==========
</TABLE>
40
<PAGE>
F-8
Web Capital Group, Inc.
(formerly Sara Hallitex Corporation)
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
Organization
Web Capital Group, Inc., (formerly Sara Hallitex Corporation, or "Web
Capital " or the "Company") was originally incorporated in Utah on
April 28, 1980 as Rebel Energy Corporation ("Rebel Energy"). Rebel
Energy was organized for the primary purpose of investing in
energy-related properties, primarily in low-priced oil and gas and
unimproved lands and real estate. On August 1, 1990, Sara Services,
Inc. ("Sara Services") was incorporated in Oklahoma for the purpose of
merging with Rebel Energy in order to redomicile the Company to
Oklahoma. From 1985 through 1989, due to unsuccessful activities,
resources were exhausted and the Company remained dormant.
On August 3, 1990, Rebel Energy entered into a share-exchange agreement
with Sara Services, wherein Sara Services agreed to exchange all of its
outstanding shares of common stock for Rebel Energy common stock. This
transaction resulted in Sara Services becoming Rebel Energy's wholly
owned and operating subsidiary.
On August 6, 1990, Rebel Energy changed its name to Sara Environmental,
Inc. In February 1995, Sara Environmental changed its domicile to
Oklahoma by merging with its wholly owned Oklahoma subsidiary, Sara
Services. On May 7, 1997, the Company changed its name to Sara Hallitex
Corporation. Management felt the new name would better reflect the
Company's current operations and business plans.
On December 8, 1999, Web Capital Group, Inc. was incorporated in Nevada
for the purpose of merging with Sara Hallitex, in order to redomicile
the Company to Nevada. Web Capital's initial capitalization was
50,000,000 common shares, $0.001 par value and 10,000,000 preferred
shares, $0.001 par value.
On December 22, 1999, Web Capital and Sara Hallitex signed a Merger
Agreement, effectively merging Sara Hallitex into Web Capital Group.
As of June 30, 1999, Web Capital had 10,308,482 and 9,303,316 common
shares outstanding for the years ended June 30, 1999 and 1998,
respectively and 200,000 shares of preferred stock for the year ended
June 30, 1999.
Marketable Securities
In accordance with Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," (SFAS 115),
the Company classifies its investment portfolio according to the provisions of
SFAS 115 as either held to maturity, trading, or available for sale. At June 30,
1999 and 1998, the Company classified its investment portfolio as available for
sale and held to maturity. Securities available for sale are carried at fair
value with unrealized gains and losses included in stockholders' equity.
Gains or losses from the sale or redemption of the investments are determined
using the specific identification method.
Fixed Assets
Fixed asset consists of office equipment and furniture. These items are shown at
cost. The assets are being depreciated over the estimated useful life of the
assets. The equipment and office furniture is being depreciated over a five-year
life using the straight-line method of depreciation. A total of $37,159 is being
recognized during the period ended June 30, 1999 for depreciation expense.
41
<PAGE>
Federal Income Tax
The company is a regular C Corporation for federal income tax purposes. The
Company has adopted the provisions of Financial Accounting Standards Board
Statement No. 109, "Accounting for Income Taxes". The Company accounts for
income taxes pursuant to the provisions of the Financial Accounting Standards
Board Statement No. 109, "Accounting for Income Taxes", which requires an asset
and liability approach to calculating deferred income taxes. The asset and
liability approach requires the recognition of deferred tax liabilities and
assets for the expected future tax consequences of temporary differences between
the carrying amounts and the tax basis of assets and liabilities.
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 on
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. Revenues are recognized when earned and expenses when incurred.
Fixed assets are stated at cost. Depreciation and amortization using the
straight-line method for financial reporting purposes and accelerated methods
for income tax purposes.
The estimated useful lives are as follows:
Equipment 5 years
Earnings per Common Share
The Company adopted Financial Accounting Standards (SFAS) No.128, "Earnings Per
Share," which simplifies the computation of earnings per share requiring the
restatement of all prior periods.
Basic earnings per share are computed on the basis of the weighted average
number of common shares outstanding during each year.
Diluted earnings per share are computed on the basis of the weighted average
number of common shares and dilutive securities outstanding. Dilutive securities
having an anti-dilutive effect on diluted earnings per share are excluded from
the calculation.
Uninsured Cash Balances
The Company maintains its cash balances at several financial institutions.
Accounts at the institutions are secured by the Federal Deposit Insurance
Corporation (FDIC) up to $100,000 and securities are secured by the NASD/SIPC up
to $30,000,000. At June 30, 1999, there were no uninsured cash balances.
42
<PAGE>
Year 2000 Concerns
The Company has addressed the concerns of potential year 2000 computing
problems, both internally and with external parties and believes that
significant additional costs will not be incurred because of this circumstance.
The Company has performed an evaluation of its computer hardware and software
and has determined that recent enhancements and upgrades have brought its
systems significantly into compliance with the year 2000 phenomenon and that
existing support agreements are adequate to cope with any remaining issues.
Based upon equipment evaluations and analysis by consulting parties, management
does not believe that significant operational equipment modifications are
necessary.
Fair Value of Financial Instruments
The carrying value of financial instruments including marketable securities,
notes and loans receivables, accounts payable and notes payable approximate
their fair values at June 30, 1999.
Long-Lived Assets
Statement of Financial Accounting Standards No. 121 "Accounting for Impairment
of Long-Lived Assets to be Disposed of " requires, among other things,
impairment loss of assets to be held and gains or losses from assets that are
expected to be disposed of be included as a component of income from continuing
operations before taxes on income.
Comprehensive Income
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No.130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The Company has adopted this SFAS in the current year.
Segments of an Enterprise and Related Information
Statement of Financial Accounting Standards (SFAS) No. 131,"Disclosures about
Segments of an Enterprise and Related Information", supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise." SFAS 131
establishes standards for the way that public companies report information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. SFAS 131 defines
operating segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. The Company has evaluated this SFAS and does not believe it is
applicable at this time.
43
<PAGE>
RECLASSIFICATIONS
- -----------------
Certain reclassifications have been made to the prior year's financial
statements in order to conform to the current presentation.
NOTE 2 - MARKETABLE SECURITIES - INVESTMENTS
- --------------------------------------------
The carrying amounts of marketable securities as shown in the accompanying
balance sheet and their approximate market values at June 30, 1999 are as
follows:
The Company has acquired stock in certain publicly-traded companies in exchange
for its stock or for services. The stock is carried on the Balance Sheet at a
70% or more discount of the bid price as of June 30, 1999. The details of the
investments are as follows:
1) Janus International, Inc. - The Company holds 7,750,000 shares
of common stock, acquired on July 1, 1998. The Company holds a
40.72% equity ownership as of June 30, 1999. The price at the
date of acquisition was $1.19 per share and on June 30, 1999,
the price was $1.75 per share. The total market value at June
30, 1999 is $9,203,125.
2) USLab.com, Inc. - The Company holds 3,733,945 shares of common
stock, acquired on March 23, 1999. The Company holds a 33.53%
equity ownership as of June 30, 1999. The price at the date of
acquisition was $7.25 per share and on June 30, 1999, the
price was $7.25 per share. The total market value at June 30,
1999 is $27,071,101.
3) SolutionNet International, Inc. - The Company holds 1,730,000
shares of common stock, acquired on April 29, 1999. The
Company holds a 14.21% share of ownership as of June 30, 1999.
The price at the date of acquisition was $11.50 per share and
on June 30, 1999 the price was $12.00 per share. The total
market value at June 30, 1999 is $19,895,000.
4) Trillium Communications, Ltd. - The Company holds 5,400,000
shares of common stock, acquired on November 27, 1996. The
Company holds a 90.00% equity ownership as of June 30, 1999.
The price at the date of acquisition was $.67 per share and on
June 30, 1999, would carry a value of $3,618,000. (In August
1999, Trillium Communications, Ltd. was merged into
Tril-MediaNet.com, Inc.)
5) ProTerra, Inc. - The Company holds a 90% equity investment in
ProTerra, Inc. a dormant company that owns a patent for
controlled environment vaults. Patent number is 4,776,138,
issued on October 11, 1988, and is currently valued at $1.00
because the patent has no utility to Company's current
business operations. The Patent has been an asset of the
Company since the 1996 reorganization.
6) TheMovieSource.com, Corp. - The Company holds 1,000,000 shares
of common stock, $0.0001 par value, as a founding partner of a
new start-up company. The company anticipates an Initial
Public Offering of the stock at a price of $7.00 per share in
the second quarter of 2000.
The total market value of the marketable securities and stock investment is
$59,787,227. Due to restrictions on the stocks and the short operating history,
the investments have been valued by management at $14,482,037 on the Balance
Sheet. The Company anticipates that because of the current Internet market and
technology developments being funded the market values of these investments
could rapidly change causing a substantial increase in the amount of marketable
securities and stock investments the company will carry on its books.
44
<PAGE>
Unrealized gains on securities available for sale at June 30, 1999 are shown net
of income taxes as a component of stockholders' equity as "Accumulated other
comprehensive income".
NOTE 3 - STOCK-BASED COMPENSATION
- ---------------------------------
FASB Statement 123, Accounting for Stock-Based Compensation, requires the
company to provide pro forma information regarding net income per share as if
compensation cost for the Company's options had been determined in accordance
with the fair value based method prescribed in FASB Statement 123. The Company
has issued various shares of stock to individuals for consulting services as
disclosed in Note 5 - Common Stock for services. To date, the Company has
recorded the value of the stock at par value.
Note 4 - Income Taxes
- ---------------------
The components of the provision for income taxes are as follows:
June 30 June 30 June 30
Year ended December 31, 1999 1998 1997
- --------------------------- ----------------- ---------------- ----------------
Current:
Federal $ 262,400 $ 97,006
State -0- -0- $ (57,800)
- --------------------------- ----------------- ---------------- ----------------
$ 262,400 $ 97,006 $ (57,800)
- --------------------------- ----------------- ---------------- ----------------
Such income taxes are included in the accompanying consolidated
financial statements as follows:
- --------------------------- ----------------- ---------------- ----------------
Income from operations
Extraordinary Items $ 262,400 $ 97,006 $ (57,800)
- --------------------------- ----------------- ---------------- ----------------
$ 262,400 $ 97,006 $ (57,800)
- --------------------------- ----------------- ---------------- ----------------
The above provision has been calculated based on Federal and State
statutory rates.
Note 5 - Common Stock
- ---------------------
Several transactions have occurred in which stock was issued. The details of the
transactions are as follows:
o FOR THE YEAR ENDED JUNE 30, 1999
--------------------------------
1) March 1999: Issued 5,166 shares of common stock to individuals
for consulting services.
45
<PAGE>
2) June 1999: Issued 1,000,000 shares of common stock to Garrett
K. Krause for management services per Executive Employment
Agreement dated November 27, 1996.
A total of 1,005,166 shares of common stock were issued during the year
and are valued at par value ($1,005) in the statement of operations.
o FOR THE YEAR ENDED JUNE 30, 1998
--------------------------------
1) Oct 1997: Issued 90,700 shares of common stock to individuals
for consulting services.
2) Nov 1997: Issued 1,000,000 shares of common stock to Garrett
K. Krause for management services per Executive
Employment Agreement dated November 27, 1996.
3) March 1998: Issued 899,999 shares of common stock to settle
debt from prior years. The stock was valued at $.75 per
share to settle the debt.
4) March 1998: Issued 384,600 shares of common stock to individuals
for consulting services.
5) March 1998: Issued 145,022 shares of common stock to for consulting
services.
6) May 1998: Issued 8,600 shares of common stock to settle debt
from prior years. The stock was valued at $.75 per
share to settle the debt.
7) Other: Issued 5,251 shares of common stock to individuals for
consulting services.
o FOR THE YEAR ENDED JUNE 30, 1997
--------------------------------
On November 27, 1996, simultaneous with certain share-exchange
agreements entered into by the Company, the Board of Directors
authorized a 40-1 reverse split of Company shares of common stock,
reducing the issued and outstanding shares from 10,773,760 shares to
269,344. The Board also increased the authorized capital stock to
50,000,000 shares of common stock and approved the issuance of
1,000,000 shares of Preferred Class SC Voting Stock and 10,000,000
shares of Preferred Non-Voting stock in classes B though K.
1) Nov 1996: A total of 6,500,000 shares of common stock and
200,000 shares of preferred stock were issued pursuant
to a share-exchange agreement dated November 27, 1996.
Note 6 - Related Parties
- ------------------------
The Organization has significant related party transactions and/or relationships
with the following individuals and entities:
<TABLE>
<CAPTION>
<S> <C>
Garrett K. Krause, Krause Family Trust and
Garrett K. Krause Trust President / CEO of Web Capital Group, Inc.
WorldVest Holding Corporation 100% controlled by Garrett K. Krause
FutureVest Corporation and FutureVest Hedge fund controlled by Sean Krause brother of
Net Fund I and Net Fund II Garrett K. Krause
</TABLE>
46
<PAGE>
Note 7 - Notes Payable
- ----------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Garrett K. Krause $ 1,710,000 1,710,000
Garrett K. Krause $ 71,525 -
Wilmington Rexford, Inc. $ 892,912 892,912
FutureVest Corporation $ 475,000 475,000
Old Vendor Debt $ 163,268 -
SolutionNet International, Inc. $ 490,000 490,000
Other $ 116,586 37,825
------------ -----------
Totals $ 3,919,291 3,605,737
============ ===========
</TABLE>
Total interest recorded as paid is $975 and $2,050 for the period ended June 30,
1999 and 1998. Interest on most of the notes will be accrued starting July 1,
1999. The notes accrue interest at the rate of 10% per annum.
Future maturities are as follows: 2000 $150,286, 2001 $163,268
NOTE 8 - EARNINGS PER SHARE
- ---------------------------
The following reconciles the components of the earnings per share (EPS)
computation:
<TABLE>
<CAPTION>
Earning per common Share Income (Numerator) Shares (Denominator) Per-Share Amount
---------------------------------- ------------------------- ------------------------------ -------------------------
<S> <C> <C> <C> <C>
1997 Net Loss ($112,200) 4,080,200 ($.027)
1998 Net Income $364,675 7,453,540 $.049
1999 Net Income $509,366 9,303,316 $.055
</TABLE>
The number of shares (denominator) is based on the weighted number of shares
outstanding as of June 30, 1999, 1998 and 1997.
Note 9 - Subsequent Events
- --------------------------
Since the balance sheet date of June 30, 1999, the following material events
have occurred:
1. On July 1, 1999, the Company entered into a share-exchange agreement
with 3wVentures.com, (formerly SaraOnline.com, Inc.), a Nevada
corporation. Pursuant to the terms of the agreement, the Company
acquired 10,000,000, $0.001 par value shares of common stock of
3wVentures.com, Inc. and warrants, $0.001 par value, to purchase
10,000,000 shares of 3wVentures.com, Inc. In exchange, 3wVentures.com,
Inc. was capitalized by the Company with $30,822,500 of equity in
SolutionNet International, Inc., USLab.com, Inc., Trillium
Communications, Ltd., and TheMovieSource.com, Inc.
47
<PAGE>
In July 1999, the Company issued 3,000,000 shares of 3wVentures.com,
Inc. to Company's shareholders pursuant to Company's Dividend Program.
As of this date, the Company owns a 67.8% (or 7,000,000 shares) equity
interest in 3wVentures.com, Inc.
2. In August 1999, Trillium Communications, Ltd. was merged into
Tril-MediaNet.com, Inc. Pursuant to the terms of the merger agreement,
the Company acquired an equity interest in Tril-MediaNet.com, Inc.
Company's equity interest will be reflected in Company's future
financial statements.
3. In September 1999, the Company entered into a merger agreement with
FutureVest Corporation, a Bahamian corporation, pursuant to which the
parties agreed that a new e-finance global corporation would be formed
under the name of FutureVest.com, Inc., and which would operate in the
Commonwealth of the Bahamas. Pursuant to the terms of the agreement,
the Company stands to acquire 10,000,000, $0.001 par value shares of
common stock (or 77% equity interest) and 5,000,000 options to purchase
shares of FutureVest.com , Inc. common stock, at an exercise price of
$10 per share, once the company is formally incorporated. In exchange,
FutureVest.com, Inc. will acquire certain investment banking,
communications and operational assets of the Company.
4. In November 1999, FutureVest.com (USA), Inc. entered into an agreement,
to acquire a 24% equity interest in FutureVest Securities (USA), Inc.
(formerly RL Securities, Inc.), a securities and brokerage services
firm which has been providing investment services for over 25 years.
Currently, FutureVest.com (USA), Inc. has an option to purchase the
remaining 76% equity interest, pending NASD approval of the
transaction. The Company stands to acquire a 19% equity interest in
FutureVest Securities (USA), Inc. through its pending 77% holding in
FutureVest.com, Inc., once FutureVest.com, Inc. is formally
incorporated.
5. On December 8, 1999, Web Capital Group, Inc. was incorporated in Nevada
for the purpose of merging with the Company (Sara Hallitex) so as to
effect a redomicile to Nevada. Web Capital Group was authorized to
issue 50,000,000, $0.001 par value shares of common stock and
10,000,000, $0.001 par value shares of preferred stock. On December 22,
1999, Web Capital Group and Sara Hallitex signed Merger Agreement,
pursuant to which, each one (1) share of the issued and outstanding
stock of Sara Hallitex was converted into one (1) share of the issued
and outstanding stock of Web Capital Group.
6. On January 13, 2000, the Company completed a private placement offering
of 3,000,000 shares of "restricted" (as that term is defined under Rule
144 of the Securities Act of 1933) common stock, at a price of $3.00
per share, and options to purchase 3,000,000 shares of its common
stock, at an exercise price of $6.00, to 3 "accredited" investors,
pursuant to exemptions provided by Rule 506 of Regulation D and Section
4(2) of the Securities Act of 1933. The offering resulted in $9,000,000
in gross proceeds and proceeds from the sale of the options.
There were no other material subsequent events that have occurred since
the balance sheet date that warrants disclosure in these financial
statements.
48
EX-2.1
AGREEMENT OF MERGER
-------------------
AGREEMENT OF MERGER, entered into as of this 22nd day of December 1999, made by
and between Web Capital Group, Inc. (hereinafter "Web Capital Group "), a Nevada
corporation and Sara Hallitex Corporation ("Sara Hallitex"), an Oklahoma
corporation. Web Capital Group and Sara Hallitex Corporation are hereinafter
sometimes referred to collectively as the "Constituent Corporations."
WHEREAS, the Board of Directors of Sara Hallitex and Web Capital have determined
that it is in the best interest of the Constituents Corporations that Sara
Hallitex merge with and into Web Capital and that the shareholders of Sara
Hallitex exchange their shares of capital stock of Sara Hallitex for shares of
the capital stock of Web Capital. The transactions contemplated hereby is
hereinafter referred to as the "Merger"; and
WHEREAS, the principal purpose of the Merger is to effectuate a change of
corporate domicile from Oklahoma to Nevada.
HOW, THEREFORE, in consideration of the agreements hereinafter set forth, in
accordance with the Business Corporation Law of the State of Nevada and the
General Corporation Law of the State of Oklahoma, and for the purpose of setting
forth the terms and conditions of the Merger, the mode of completing the Merger,
and the manner of converting the shares of the capital stock of Sara Hallitex
into shares of stock of Web Capital Group, the parties agree as follows:
The Merger
1.1 Effective Time. The Merger shall be accomplished by filling appropriate
articles of merger with the Secretary of State of the State of Nevada and the
Secretary of State of the State of Oklahoma in a form acceptable under the
business corporation laws of such States as soon as practicable after execution
of this Merger Agreement. The Term "Effective Time" shall mean the time at which
all necessary Certificates of Merger have been issued by the Secretary of State
of the State of Nevada and the Secretary of State of the State of Oklahoma. If
one or both Secretaries of State need not issue a Certificate of Merger, the
filing with and acceptance by the relevant Secretary of State shall be deemed
the time of issuance of a Certificate of Merger for purposes of calculating the
"Effective Time."
1.2 Manner of Merger. At the Effective Time, Sara Hallitex shall be merged into
Web Capital Group, which shall be the corporation that survives the Merger. The
corporate existence of Web Capital Group with all its purposes, powers and
objects shall continue unaffected and unimpaired by the Merger; and as the
corporation surviving the Merger, Web Capital Group shall be governed by the
laws of the State of Nevada.and shall succeed to all rights, assets, liabilities
and obligations of Sara Hallitex, as provided in the business corporation laws
of the State of Oklahoma. The separate existence and corporate organizations of
Web Capital Group and Sara Hallitex shall cease at the Effective Time, and
thereafter Web Capital Group shall continue as Web Capital Group under the laws
of the State of Nevada under the new name of Web Capital Group, Inc., a Nevada
corporation. All the property, real and personal and mixed, and all debts or
other obligations due to Sara Hallitex, shall be transferred to and shall be
vested in Web Capital Group, without further act or deed, as provided in the
business laws of the States of Nevada and Oklahoma.
49
<PAGE>
1.3 Articles of Incorporation and Bylaws of Web Capital Group.
a. At the Effective Time, the Certificate of Incorporation of Web
Capital Group, a Nevada corporation, shall be the Certificate of Incorporation
of the Surviving Corporation.
b. The directors and officers of Sara Hallitex as of the Effective Time
shall be the directors and officers of Web Capital Group, until their successors
shall have been elected and qualified, or as otherwise provided by the General
Corporation Law of the State of Nevada and in the Bylaws of Web Capital Group.
If at the Effective Time a vacancy exists in the Board of Directors or in any of
the offices of Web Capital Group, such vacancy shall thereafter be filled in the
manner provided in the Bylaws of Web Capital Group.
1.4 Status and Conversion of Shares. The manner of converting the shares of
capital stock of Sara Hallitex outstanding immediately prior to the Merger into
shares of common stock of Web Capital Group shall be as follows:
a. At the Effective Time, each one (1) share of the issued and
outstanding $0.001 par value common stock of Sara Hallitex shall, by virtue of
the Merger and without any action on the part of the holder thereof, become and
be converted into one (1) share of the $0.001 par value common stock of Web
Capital Group. At the Effective Time, each one (1) share of the issued and
outstanding $0.001 par value preferred stock of Sara Hallitex shall, by virtue
of the Merger and without any action on the part of the holder thereof, become
and be converted into one (1) share of the $0.001 par value preferred stock of
Web Capital Group.
b. Any fractional shares of the capital stock of Web Capital Group
resulting from conversion under this paragraph 1.4 shall be rounded up to the
next whole share of capital stock in Web Capital Group.
c. Any shares of capital stock of Sara Hallitex held in treasury as of
the Effective Time shall, by virtue of the Merger and without any additional
action, become and be converted into shares held in the treasure of Web Capital
Group at the same rate of conversion stated in paragraph 1.4(a) above.
d. After the Effective Time, each holder of a certificate or
certificates theretofore representing outstanding shares of the capital stock of
Sara Hallitex may surrender such certificate or certificates to such agent or
agents as shall be appointed by Web Capital Group (the "Exchange Agent"), and
shall be entitled to receive in exchange therefore a certificate or certificates
representing the number of whole shares of capital stock of Web Capital Group
into which the shares of capital stock of Sara Hallitex theretofore represented
by the certificates so surrendered have been converted, at the conversion rate
stated in paragraph 1.4(a), above.
e. If any certificate evidencing shares of the capital stock of Sara
Hallitex is to be issued in a name other than the name in which the certificate
surrendered is registered, the certificate so surrendered shall be properly
endorsed and shall otherwise be in proper form for transfer. The person
requesting the transfer shall pay to the Exchange Agent any transfer or other
fees or taxes required by reason of the issuance of a certificate in name other
than that of the registered holder of the certificate surrendered.
f. Web Capital Group may, without notice to any person, terminate all
exchange agencies at any time after 120 days, following the Effective Time.
After such termination, all exchanges, payments and notices provided for in this
Agreement to be made to or by the Exchange Agent shall be made to or by Web
Capital Group.
2. Miscellaneous
2.1 The Surviving Corporation may be served with process in the State of
Oklahoma and the State of Nevada in any proceeding for enforcement of any
obligation of Web Capital Group as well as for enforcement of any obligations of
50
<PAGE>
the Surviving Corporation arising from the merger, including any suit or other
proceeding to enforce the right of any creditor or stockholder, and it does
hereby irrevocably appoint the Secretary of State of the State of Nevada and the
Secretary of State of the State of Oklahoma as its agents to accept service of
process in any such suit or other proceeding. The address to which a copy of
such process shall be mailed by the Registrar of Corporations is: 4344 Promenade
Way, Suite 102P, Marina del Rey, CA 90292.
2.2 Amendments. This Merger Agreement may be amended with the approval of the
Board of Directors of the Constituent Corporations at any time before or after
the approval hereof by their respective shareholders, but after any such
approval no amendment shall be made that substantially and adversely changes the
terms hereof as to any party without the approval of the shareholders of such
party.
2.3 Extension; Waiver. AT any time before the Effective Time, the Board of
Directors of either of the Constituent Corporations may (a) extend the time for
the performance of any of the obligations or other acts of another party hereto,
of (b) waive compliance by another party with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing duly executed and delivered on behalf of
such party.
THIS AGREEMENT OF MERGER shall be filed in the offices of the Secretary's of
State, for the States of Nevada and Oklahoma, and upon the filing of this
Agreement of Merger in the office of the Secretary of State of Nevada and
Oklahoma, the merger herein provided shall be effective.
IN WITNESS WHEREOF, the Constituent Corporations have executed this Merger
Agreement as of the day and year first above written.
Web Capital Group, Inc., a Nevada corporation
By:
Name: Garrett K. Krause
Title: President
Sara Hallitex Corporation, a Oklahoma corporation
By:
Name: Garrett K. Krause
Title: President
51
EX-2.2
Joint Venture and Exchange Agreement
Between
Sara Hallitex Corporation
And
FutureVest Corporation
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"), NOR REGISTERED UNDER ANY
STATE SECURITIES LAW. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
AGREEMENT FOR THE EXCHANGE OF ASSETS AND COMMON STOCK:
AGREEMENT made this 22nd day of September 1999 by and between SARA HALLITEX
CORPORATION, an Oklahoma corporation (hereinafter, called "SARA HALLITEX") and
FUTUREVEST CORPORATION, a Bahamian corporation (hereinafter, called
"FUTUREVEST").
In consideration of the mutual promises, covenants, and representations
contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXCHANGE OF ASSETS AND SECURITIES. Subject to the terms and conditions
of this Agreement, SARA HALLITEX agrees to transfer and surrender
ownership of all of its existing investment banking, communications and
operational assets to FUTUREVEST.COM, (USA) INC. ("FUTUREVEST.COM,
USA"), a corporation currently in the process of being formed. In
exchange, upon FUTUREVEST.COM, INC.'s incorporation in the Commonwealth
of the Bahamas, SARA HALLITEX will acquire 10,000,000 shares of
FUTUREVEST.COM INC. common stock (or a 77% equity interest in the
company) and 5,000,000 warrants to purchase shares of FUTUREVEST.COM,
INC. at an exercise price of $10 per share; and FUTUREVEST CORPORATION
will acquire 3,000,000 shares of FUTUREVEST.COM, INC. common stock and
1,000,0000 warrants to purchase shares of FUTUREVEST.COM, INC. common
stock, at an exercise price of $5 per share.
2. REPRESENTATIONS AND WARRANTIES. SARA HALLITEX represents and warrants
to FUTUREVEST the following:
i ORGANIZATION. SARA HALLITEX is a corporation duly organized,
validly existing, and in good standing under the laws of
Oklahoma, and has all the necessary corporate powers to own
properties and carry on a business, and is duly qualified to
do business and is in good standing in Oklahoma. All actions
taken by the incorporators, directors and shareholders of SARA
HALLITEX have been valid and in accordance with the laws of
the State of Oklahoma.
ii CAPITAL. The authorized capital stock of the SARA HALLITEX is
50,000,000 shares of common stock, $0.001 par value, of which
10,308,481 are issued and outstanding. All outstanding shares
are fully paid and non-assessable, free of liens,
encumbrances, options, restrictions, and legal or equitable
rights of others not a party to this Agreement. At closing,
there will be no outstanding subscriptions, options, rights,
warrants, convertible securities, or other agreements or
commitments obligating SARA HALLITEX to issue or to transfer
from the treasury any additional shares of its capital stock.
None of the outstanding shares of SARA HALLITEX are subject to
any stock restriction agreements. All of the shareholders of
SARA HALLITEX have valid title to such shares and acquired
their shares in a lawful transaction and in accordance with
the laws of the State of Oklahoma.
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<PAGE>
iii. FINANCIAL STATEMENT. Exhibit A to this Agreement includes the
balance sheet of SARA HALLITEX as of June 30, 1999, for the
period then ended. The balance sheet has been prepared in
accordance with generally accepted accounting principles
consistently followed by SARA HALLITEX throughout the period
indicated, and fairly present the financial position of SARA
HALLITEX as of the date of the balance sheet, and the results
of its operations for the period indicated.
iv. ABSENCE OF CHANGE. Since the date of the balance sheet, there
has not been any change in the financial condition or
operations of SARA HALLITEX, except changes in the ordinary
course of business, which changes have not, in the aggregate,
been materially adverse.
v. LIABILITIES. SARA HALLITEX does not have any debt, liability,
or obligation of any nature, whether accrued, absolute,
contingent, or otherwise, and whether due or to become due,
that is not reflected on SARA HALLITEX financial statement.
SARA HALLITEX is not aware of any pending, threatened or
asserted claims, lawsuits or contingencies involving SARA
HALLITEX or its common stock. There is no dispute of any kind
between SARA HALLITEX and any third party, and no such dispute
will exist at the closing of this Agreement. At the closing,
SARA HALLITEX will be free from any and all liabilities,
liens, claims and/or commitments.
vi ABILITY TO CARRY OUT OBLIGATION . SARA HALLITEX has the right,
power, and authority to enter into and perform its obligations
under this Agreement. The execution and delivery of this
Agreement by SARA HALLITEX and the performance by SARA
HALLITEX of its obligations hereunder will not cause,
constitute, or conflict with or result in (a) any breach or
violation or the provisions of, or constitute a default under
any license, indenture, mortgage, charter, instrument,
articles of incorporation, bylaw, or other agreement or
instrument to which SARA HALLITEX or its shareholders are a
party, or by which they may be bound, nor will any consents or
authorizations of any party other than those hereto be
required, (b) any event that would cause SARA HALLITEX to be
liable to any party, or (c) any event that would result in the
creation or imposition or any lien, charge or encumbrance on
any assets of SARA HALLITEX or upon the assets of SARA
HALLITEX to be acquired by FUTUREVEST.COM.
vii. FULL DISCLOSURE. None of the representations and warranties
made by SARA HALLITEX, or any certificate or memorandum
furnished or to be furnished by SARA HALLITEX, contains or
will contain any untrue statement of a material fact, or omit
any material fact the omission of which would be misleading.
viii. POWER OF ATTORNEY. No person holds a power of attorney from
SARA HALLITEX.
ix. COMPLIANCE WITH THE LAWS. SARA HALLITEX has complied with, and
is not in violation of any federal, state or local statue,
law, and/or regulation pertaining to SARA HALLITEX. SARA
HALLITEX has complied with all federal, and state securities
laws in connection with the issuance, sale and distribution of
its securities.
x. LITIGATION. SARA HALLITEX is not (and has not been) a party to
any suit, action, arbitration, or legal, administrative, or
other proceeding, or pending governmental investigation. To
the best of the knowledge of SARA HALLITEX, there is no basis
for any such action or proceeding and no such action or
proceeding is threatened against SARA HALLITEX and SARA
HALLITEX is not subject to or in default with respect to any
order, writ, injunction, or decree of any federal, state,
local, or foreign court, department, agency, or
instrumentality.
xi. CONDUCT OF BUSINESS. Prior to the closing, the SARA HALLITEX
shall conduct business in the normal course, and shall not (a)
sell, pledge, or assign any assets, (b) amend its article of
incorporation or By-laws, (c) declare dividends, redeem or
sell stock or other securities, (d) incur any liabilities, (e)
acquire or dispose of any assets, enter into any contract,
guarantee obligations of any third party, or (f) enter into
any other transaction.
53
<PAGE>
xii. CORPORATE DOCUMENTS. Copies of each of the following
documents, which are true, complete and correct in all
material respects, will be attached hereto and made an
integral part hereof to this Agreement:
(1) Articles of Incorporation;
(2) By-laws;
(3) Minutes of Shareholders Meetings;
(4) Minutes of Directors Meetings;
(5) List of Officers and Directors;
(6) Balance Sheet as described in Section 2(iii); and
(7) Stock register and stock records of SARA HALLITEX and
a current, accurate list of the SARA HALLITEX
shareholders.
xiii. DOCUMENTS. All minutes, consents or other documents pertaining
to SARA HALLITEX to be delivered at the closing shall be valid
and in accordance with the laws of the State of Oklahoma.
xiv. TITLE. The assets to be transferred to FUTUREVEST.COM will be,
at the closing, free and clear of all liens, security
interests, pledges, charges, claims, encumbrances and
restrictions of any kind.
3. FUTUREVEST REPRESENTS AND WARRANTS TO SARA HALLITEX THE FOLLOWING:
i. ORGANIZATION. FUTUREVEST is a corporation, duly organized,
validly existing, and in good standing under the laws of the
Commonwealth of the Bahamas, and has all the necessary
corporate powers to own properties and carry on a business,
and is duly qualified to do business and is in good standing
in the Commonwealth of the Bahamas. All actions taken by the
incorporators, directors and shareholders of FUTUREVEST have
been valid and in accordance with the laws of the Commonwealth
of the Bahamas.
ii. COUNSEL. FUTUREVEST and SARA HALLITEX represent and warrant
prior to the Closing, that they are represented by independent
counsel or have had the opportunity to retain independent
counsel to represent them in this transaction.
4. REPRESENTATIONS OF FUTUREVEST AND SARA HALLITEX:
i. INCORPORATION OF FUTUREVEST.COM, INC. FUTUREVEST and SARA
HALLITEX will take the necessary steps to cause the duly
incorporation of FUTUREVEST.COM, INC. under the laws of the
Commonwealth of the Bahamas. Upon its incorporation, SARA
HALLITEX will receive its 77% equity interest in
FUTUREVEST.COM, INC.
ii. INCORPORATION OF FUTUREVEST.COM, (USA), INC. SARA HALLITEX
will take the necessary steps to cause the duly incorporation
of FUTUREVEST.COM (USA), INC. under the laws of the State of
Nevada. Upon its incorporation, SARA HALLITEX will transfer
all of its investment banking, communications and operational
assets to FUTUREVEST.COM (USA) INC. and FUTUREVEST.COM (USA),
INC. will be responsible for managing all SARA HALLITEX
US-based e-finance operations.
54
<PAGE>
iii. MERGER OF FUTUREVEST.COM (USA), INC. WITH FUTUREVEST.COM,
(INC.). Upon FutureVest.com, Inc.'s incorporation in the
Common wealth of the Bahamas, FutureVest,com, Inc. (USA) will
merge with and into FutureVest.com, Inc, to become
FutureVest.com, Inc's wholly-owned operating subsidiary.
iii. COMPLETION OF AGREEMENT. Upon completion of the Agreement, all
investment banking, communications, and operational assets of
SARA HALLITEX will become the operational assets of
FUTUREVEST.COM, (USA) INC.
5. CLOSING. The closing of this transaction shall take place at the offices of
Sara Hallitex Corporation, 4344 Promenade Way. Suite 102P, Marina del Rey,
CA. 90292, upon receipt or exchange, as the case may be of the items
referenced in Section 6, below. Unless the closing of this transaction
takes place on or September 22, 1999, then either party may terminate this
Agreement.
6. DOCUMENTATION TO BE DELIVERED AT CLOSING.
i. BY SARA HALLITEX
----------------
(1) Board of Directors Minutes authorizing the transfer of certain
investment banking, communications and operational assets of
SARA HALLITEX.
(2) Balance sheet of SARA HALLITEX, dated June 30, 1999 for the
period then ended.
(3) All the business and corporate records of SARA HALLITEX,
including but not limited to, correspondence files, bank
statements, checkbooks, savings account books, minutes of
shareholders and directors meetings, financial statements,
shareholder listings, stock transfer records, agreements and
contracts.
(4) Such other minutes of SARA HALLITEX shareholders or directors
as may reasonably be required by FUTUREVEST.
ii. BY FUTUREVEST:
--------------
(1) Delivery to SARA HALLITEX, or to its Transfer Agent, of the
certificates representing 10,000,000 shares of common stock of
FUTUREVEST.COM, INC.
(2) Consents signed by a majority of shareholders of
FUTUREVEST.COM, INC. consenting to the terms of this
Agreement.
7. REMEDIES.
i. ARBITRATION. Any controversy or claim arising out of, or
relating to, this Agreement, or the making, performance, or
interpretation thereof, shall be settled by arbitration in Los
Angeles County, California in accordance with the Rules of the
American Arbitration Association then existing, and judgment
on the arbitration award may be entered in any court having
jurisdiction over the subject matter of the controversy.
8. MISCELLANEOUS.
i. CAPTIONS AND HEADINGS. The Article and paragraph headings
throughout this Agreement are for convenience and reference
only, and shall in no way be deemed to define, limit, or add
to the meaning of any provision of this Agreement.
ii. No ORAL CHANGE. The Agreement and any provision hereof, may
not be waived, changes, modified, or discharged orally, but
only by agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, or discharge
is sought.
55
<PAGE>
iii. NON WAIVER. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this
Agreement shall be deemed to have been made unless expressly
in writing and signed by the party against whom such waiver is
charged; and (i) the failure of any party to insist in any one
or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any
option herein contained shall not be construed as a waiver or
relinquishment for the future of any such provisions,
covenants, or conditions, (ii) the acceptance of performance
of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition or
provision hereof shall not be deemed a waiver of such breach
or failure, and (iii) no waiver by any party of one breach by
another party shall be construed as a waiver with respect to
any other or subsequent breach.
iv. TIME OF ESSENCE. Time is of the essence of the Agreement and
of each and every provision hereof.
v. ENTIRE AGREEMENT. This Agreement contains the entire agreement
and understanding between the parties hereto, and supersedes
all prior agreements and understandings.
vi. COUNTERPARTS. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed as
original, but all of which together shall constitute one and
the same instrument.
vii. NOTICES. All notices, requests, demands, and other
communications under this Agreement shall be in writing and
shall be deemed to have been duly given on the date of service
if served personally on the party to whom the notice is to be
given, or the third day after mailing if mailed to the party
to whom notice is to be given, by first class mail, registered
or certified, postage prepaid, and properly address, and by
fax, as follows:
FUTUREVEST CORPORATION SARA HALLITEX CORPORATION:
c/o 4344 Promenade, Way, 102P c/o 4344 Promenade, Way, 102P
Marina del Rey, CA 90292 Marina del Rey, CA 90292
IN WITNESS WHEREOF, the undersigned have executed this Agreement this 22nd day
of September, 1999.
FUTUREVEST CORPORATION SARA HALLITEX CORPORATION
- -------------------------------- --------------------------------
Sean Krause, as per the approval Garrett K. Krause, as per the
of the board of directors and approval the board of directors and
shareholders shareholders
56
EX-2.3
Agreement For The
Exchange Of Common Stock
Between
Sara Hallitex Corporation
And
SaraOnline.com, Inc.
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"), NOR REGISTERED UNDER ANY
STATE SECURITIES LAW. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
AGREEMENT FOR THE EXCHANGE OF COMMON STOCK
AGREEMENT made this 1st day of July, 1999 by and between SARA HALLITEX
CORPORATION, an Oklahoma corporation (hereinafter, called "SARA HALLITEX") and
SARAONLINE.COM, INC., a Nevada corporation (hereinafter, called "SARAONLINE").
In consideration of the mutual promises, covenants, and representations
contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXCHANGE OF SECURITIES. Subject to the terms and conditions of this
Agreement, SARA HALLITEX agrees to issue to the SARA ONLINE, SARA HALLITEX'
equity interest in the following: 865,000 shares of $0.001 par value common
stock of SolutionNet International, Inc.; 1,500,000 shares of $0.001 par
value common stock of USLab.com, Inc.; 1,500,000 shares of $0.001 par value
common stock of Tril-MediaNet.com, Inc.; and 500,000 shares of $0.001 par
value common stock of TheMovieSource.com, Inc. (hereinafter, collectively
called the "SHARES"), in exchange for 10,000,000 shares of the issued and
outstanding shares of SARAONLINE, such that SARAONLINE becomes a
majority-owned subsidiary of SARA HALLITEX..
2. REPRESENTATIONS AND WARRANTIES. SARA HALLITEX represents and warrants to
SARAONLINE the following:
i ORGANIZATION. SARA HALLITEX is a corporation duly organized, validly
existing, and in good standing under the laws of Oklahoma, and has all
the necessary corporate powers to own properties and carry on a
business, and is duly qualified to do business and is in good standing
in Oklahoma. All actions taken by the incorporators, directors and
shareholders of SARA HALLITEX have been valid and in accordance with
the laws of the State of Oklahoma.
ii CAPITAL. The authorized capital stock of the SARA HALLITEX is
50,000,000 shares of common stock, $0.001 par value, of which 269,344
are issued and outstanding after a 40-for-1 stock split. All
outstanding shares are fully paid and non-assessable, free of liens,
encumbrances, options, restrictions, and legal or equitable rights of
others not a party to this Agreement. At closing, there will be no
outstanding subscriptions, options, rights, warrants, convertible
securities, or other agreements or commitments obligating SARA HALLITEX
to issue or to transfer from the treasury any additional shares of its
capital stock. None of the outstanding shares of SARA HALLITEX are
subject to any stock restriction agreements. All of the shareholders of
SARA HALLITEX have valid title to such shares and acquired their shares
in a lawful transaction and in accordance with the laws of the State of
Oklahoma.
57
<PAGE>
iii. FINANCIAL STATEMENT. Exhibit A to this Agreement includes the balance
sheet of SARA HALLITEX as of June 30, 1999, for the period then ended.
The balance sheet has been prepared in accordance with generally
accepted accounting principles consistently followed by SARA HALLITEX
throughout the period indicated, and fairly present the financial
position of SARA HALLITEX as of the date of the balance sheet, and the
results of its operations for the period indicated.
iv. ABSENCE OF CHANGE. Since the date of the balance sheet, there has not
been any change in the financial condition or operations of SARA
HALLITEX, except changes in the ordinary course of business, which
changes have not, in the aggregate, been materially adverse.
v. LIABILITIES. SARA HALLITEX does not have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or
otherwise, and whether due or to become due, that is not reflected on
SARA HALLITEX financial statement. SARA HALLITEX is not aware of any
pending, threatened or asserted claims, lawsuits or contingencies
involving SARA HALLITEX or its common stock. There is no dispute of any
kind between SARA HALLITEX and any third party, and no such dispute
will exist at the closing of this Agreement. At the closing, SARA
HALLITEX will be free from any and all liabilities, liens, claims
and/or commitments.
vi ABILITY TO CARRY OUT OBLIGATION. SARA HALLITEX has the right, power,
and authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by SARA
HALLITEX and the performance by SARA HALLITEX of its obligations
hereunder will not cause, constitute, or conflict with or result in (a)
any breach or violation or the provisions of, or constitute a default
under any license, indenture, mortgage, charter, instrument, articles
of incorporation, bylaw, or other agreement or instrument to which SARA
HALLITEX or its shareholders are a party, or by which they may be
bound, nor will any consents or authorizations of any party other than
those hereto be required, (b) any event that would cause SARA HALLITEX
to be liable to any party, or (c) any event that would result in the
creation or imposition or any lien, charge or encumbrance on any assets
of SARA HALLITEX or upon the securities of SARA HALLITEX to be acquired
by SARAONLINE.
vii. FULL DISCLOSURE. None of the representations and warranties made by
SARA HALLITEX, or any certificate or memorandum furnished or to be
furnished by SARA HALLITEX, contains or will contain any untrue
statement of a material fact, or omit any material fact the omission of
which would be misleading.
viii. POWER OF ATTORNEY. No person holds a power of attorney from SARA
HALLITEX.
ix. COMPLIANCE WITH THE LAWS. SARA HALLITEX has complied with, and is not
in violation of any federal, state or local statue, law, and/or
regulation pertaining to SARA HALLITEX. SARA HALLITEX has complied with
all federal, and state securities laws in connection with the issuance,
sale and distribution of its securities.
X. LITIGATION. SARA HALLITEX is not (and has not been) a party to any
suit, action, arbitration, or legal, administrative, or other
proceeding, or pending governmental investigation. To the best of the
knowledge of SARA HALLITEX, there is no basis for any such action or
proceeding and no such action or proceeding is threatened against SARA
HALLITEX and SARA HALLITEX is not subject to or in default with respect
to any order, writ, injunction, or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality.
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<PAGE>
xi. CONDUCT OF BUSINESS. Prior to the closing, the SARA HALLITEX shall
conduct business in the normal course, and shall not (a) sell, pledge,
or assign any assets, (b) amend its article of incorporation or
By-laws, (c) declare dividends, redeem or sell stock or other
securities, (d) incur any liabilities, (e) acquire or dispose of any
assets, enter into any contract, guarantee obligations of any third
party, or (f) enter into any other transaction.
xii. CORPORATE DOCUMENTS. Copies of each of the following documents, which
are true, complete and correct in all material respects, will be
attached hereto and made an integral part hereof to this Agreement:
(1) Articles of Incorporation;
(2) By-laws;
(3) Minutes of Shareholders Meetings;
(4) Minutes of Directors Meetings;
(5) List of Officers and Directors;
(6) Balance Sheet as described in Section 2(iii); and
(7) Stock register and stock records of SARA HALLITEX and a current,
accurate list of the SARA HALLITEX shareholders.
xiii. DOCUMENTS. All minutes, consents or other documents pertaining to
SARA HALLITEX to be delivered at the closing shall be valid and in
accordance with the laws of the State of Oklahoma.
xiv. TITLE. The Shares to be issued to SARAONLINE will be, at the closing,
free and clear of all liens, security interests, pledges, charges,
claims, encumbrances and restrictions of any kind. None of such Shares
are or will be subject to any voting trust or agreement. No person
holds or has any right to receive any proxy or similar instrument with
respect to such shares, except as provided for in this Agreement, SARA
HALLITEX is not a party to any agreement which offers or grants to any
person the right to purchase or acquire any of the securities to be
issued to SARAONLINE. There is no applicable local, state or federal
law, rule or regulation, or decree which would, as a result of the
issuance of the Shares to SARAONLINE, impair, restrict, or delay
SARAONLINE's voting rights with respect to the Shares.
xv. LOCK-UP. SARA HALLITEX will cause, to the extent requested by any
underwriter, broker-dealer, market maker, or the like, of securities
of SARA HALLITEX, the shareholders of SARA HALLITEX to agree not to
sell or otherwise transfer or dispose of any or all of the shares of
SARA HALLITEX presently outstanding, during any period of time as so
requested. In order to enforce the foregoing covenant, SARA HALLITEX
agrees to impose stop-transfer instructions as to such stock.
3. SARAONLINE REPRESENTS AND WARRANTS TO SARA HALLITEX THE FOLLOWING:
iii. ORGANIZATION. SARAONLINE is a corporation, duly organized, validly
existing, and in good standing under the laws of the State of Nevada,
and has all the necessary corporate powers to own properties and carry
on a business, and is duly qualified to do business and is in good
standing in the State of Nevada. All actions taken by the
incorporators, directors and shareholders of SARAONLINE have been
valid and in accordance with the laws of the State of Nevada.
ii. SARAONLINE AND ISSUED STOCK. Exhibit A attached hereto and made an
integral part hereof, sets forth the names and shareholdings of 100%
of the shareholders.
59
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iii.COUNSEL. SARAONLINE and SARA HALLITEX represent and warrant prior to
the Closing, that they are represented by independent counsel or have
had the opportunity to retain independent counsel to represent them in
this transaction.
4. INVESTMENT INTENT. SARAONLINE agrees that the Shares being issued pursuant
to this Agreement may be sold, pledged, assigned, hypothecated or otherwise
transferred, with or without consideration (hereinafter called a
"Transfer"), only pursuant to an effective registration statement under the
1933 Act, or pursuant to an exemption from registration under the 1933 Act,
the availability of which is to be established to the satisfaction of SARA
HALLITEX. SARAONLINE agrees prior to any Transfer, to give written notice
to the SARA HALLITEX expressing SARAONLINE's desire to effect such Transfer
and describing the proposed Transfer.
5. CLOSING. The closing of this transaction shall take place at the offices of
Sara Hallitex Corporation, 4344 Promenade Way. Suite 102P, Marina del Rey,
CA. 90292, upon receipt or exchange, as the case may be of the items
referenced in Section 6, below. Unless the closing of this transaction
takes place on or before July 1, 1999, then either party may terminate this
Agreement.
6. DOCUMENTATION TO BE DELIVERED AT CLOSING.
i. BY SARA HALLITEX
----------------
(2) Board of Directors Minutes authorizing the issuance of a
certificate or certificates registered in the name of SARAONLINE
for the following:
(1) 865,000 shares of common stock of SolutionNet International,
Inc.;
(3) 1,500,000 shares of common stock of USLab.com, Inc.;
(4) 1,500,000 shares of common stock of Tril-MediaNet.com, Inc.;
and
(5) 500,000 shares of common stock of TheMovieSource.com, Inc.
registered in the name of SARAONLINE,
(2) Balance sheet of SARA HALLITEX, dated June 30, 1999 for the
period then ended.
(3) All the business and corporate records of SARA HALLITEX,
including but not limited to, correspondence files, bank
statements, checkbooks, savings account books, minutes of
shareholders and directors meetings, financial statements,
shareholder listings, stock transfer records, agreements and
contracts.
(4) Such other minutes of SARA HALLITEX shareholders or directors as
may reasonably be required by SARAONLINE.
ii. BY SARAONLINE:
--------------
(1) Delivery to SARA HALLITEX, or to its Transfer Agent, of the
certificates representing 10,000,000 shares of common stock of
SARAONLINE;
(2) Consents signed by a majority of shareholders of SARAONLINE
consenting to the terms of this Agreement.
7. REMEDIES.
ii. ARBITRATION. Any controversy or claim arising out of, or relating to,
this Agreement, or the making, performance, or interpretation thereof,
shall be settled by arbitration in Los Angeles County, California in
accordance with the Rules of the American Arbitration Association then
existing, and judgment on the arbitration award may be entered in any
court having jurisdiction over the subject matter of the controversy.
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<PAGE>
8. MISCELLANEOUS.
i. CAPTIONS AND HEADINGS. The Article and paragraph headings throughout
this Agreement are for convenience and reference only, and shall in no
way be deemed to define, limit, or add to the meaning of any provision
of this Agreement.
ii. No ORAL CHANGE. The Agreement and any provision hereof, may not be
waived, changes, modified, or discharged orally, but only by agreement
in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.
iii. NON WAIVER. Except as otherwise expressly provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the
party against whom such waiver is charged; and (i) the failure of any
party to insist in any one or more cases upon the performance of any
of the provisions, covenants, or conditions of this Agreement or to
exercise any option herein contained shall not be construed as a
waiver or relinquishment for the future of any such provisions,
covenants, or conditions, (ii) the acceptance of performance of
anything required by this Agreement to be performed with knowledge of
the breach or failure of a covenant, condition or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii) no
waiver by any party of one breach by another party shall be construed
as a waiver with respect to any other or subsequent breach.
iv. TIME OF ESSENCE. Time is of the essence of the Agreement and of each
and every provision hereof.
V. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings.
vi. COUNTERPARTS. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed as original, but all
of which together shall constitute one and the same instrument.
vii. NOTICES. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have
been duly given on the date of service if served personally on the
party to whom the notice is to be given, or the third day after
mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, and properly
address, and by fax, as follows:
SARAONLINE: SARA HALLITEX:
--------------
4344 Promenade Way, 102P 4344 Promenade Way, 102P
Marina del Rey, CA 90292 Marina del Rey, CA 90292
IN WITNESS WHEREOF, the undersigned have executed this Agreement this 1st day of
July, 1999.
SARAONLINE.COM, INC. SARA HALLITEX CORPORATION
- -------------------------------- --------------------------------
Garrett K. Krause, as per the approval of Garrett K. Krause, as per the
the board of directors and shareholders approval of the board of directors
and shareholders
61
EX-3.1
Articles of Incorporation
of
Web Capital Group, Inc.
Know All Men By These Present:
That we, the undersigned have voluntarily associated ourselves together for the
purpose of forming a corporation under the laws of the State of Nevada relating
to general corporation, and we do hereby certify:
Article I
That the name of the corporation is:
"Web Capital Group, Inc."
Article II
That the Resident Agent for the Corporation is:
Wilmington Capital LLC, 411 East Bonneville Avenue, #300, Las Vegas,
Nevada, 89101.
Article III
That the amount of authorized capital stock of this Corporation is
Fifty Million (50,000,000) shares of Common Stock, at $0.001 par value,
and Ten Million (10,000,000) shares of Preferred Stock, at $0.001 par
value. Such stock may be issued from time to time without action by the
stockholders for such consideration as may be fixed from time to time
by the Board of Directors, and shares so issued, shall be deemed fully
paid stock, and the holder of such shares shall not be liable for any
further payment thereon.
Article IV
That the members of the governing board of this Corporation shall be
styled as directors and the names and addresses of the first Board of
Directors are:
Name Address
Garrett K. Krause 4344 Promenade Way, Suite 102P
Marina del Rey, Ca 90292
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Article V
That the purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the general
corporation law of the State of Nevada or the United States of America.
Article VI
The names, addresses and signatures of Incorporators are:
Names Addresses
Holmes Stoner 4344 Promenade Way, # 102P
Marina del Rey, Ca 90292
___________________
Signature
In Witness Whereof, the undersigned being the Incorporators of Web Capital
Group, Inc., hereunto affix their signatures this 7th of December, 1999.
BY:_______________________
Holmes Stoner Jr.
On 7th day of December, 1999, before me, the undersigned, a Notary Public,
personally appeared, Holmes Stoner Jr., Incorporator of Web Capital Group, Inc.,
known to be the person described in and who executed the foregoing instrument,
and who acknowledged to me that they executed the same freely and who
voluntarily and for the uses and purposes therein mentioned.
In Witness Whereof, I have hereunto set my hand and affixed my official seal the
day and year first above written.
BY:_________________________
Notary Public Signature
(AFFIX NOTARY STAMP OR SEAL)
Article VII
I, Wilmington Capital Group, Inc., do hereby accept appointment as Resident
Agent for the above named corporation.
____________________________________ _______________
Signature of Resident Agent
Date
63
EX-3.2
Bylaws
of
Web Capital Group, Inc.
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. All annual meeting of the stockholders of the corporation and all
other meetings of stockholders shall be held either at the principal office or
at any other place which may be designated either by the Board, pursuant to
authority hereinafter granted or by the written consent of all the shareholders
entitled to vote thereat, given either before or after the meeting and filed
with the Secretary of the Corporation.
At least five (5) days written notice specifying the time and place, when and
where, the annual meeting shall be convened, shall be mailed in United States
Post Office addressed to each of the stockholders of record at the time of
issuing the notice at his or her or its address last known, as the same appears
on the books of the corporation.
Nevertheless, a failure to give such notice, or any irregularity in such notice,
shall not affect the validity of annual meetings or any of the proceedings had
at such meeting, and in such event these Bylaws shall be, and shall be deemed to
be, sufficient notice of such meeting without requirement of further notice.
SECTION 2. Special meetings of the stockholders may be held at the principal
office or elsewhere, whenever called be the president, or by the Board of
Directors, or by vote of, or by an instrument in writing signed by the holders
of not less than 10% of the issued and outstanding capital stock. At least ten
(10) days written notice of such meeting, specifying the day and hour and place,
when and where such meeting shall be convened, and the objects for calling the
same, shall be mailed in the United States Post Office, addressed to each of the
stockholders of record at the time of issuing the notice, and at his or her or
its address last known, as the same appears on the books of the corporation.
If all the stockholders of the corporation shall waive notice of special
meeting, no notice of such meeting shall be required, and whenever all the
stockholders shall meet in person or by proxy, such meeting shall be valid for
all purposes without call or notice, and at such meeting any corporate action
may be taken. The written certificates of the officer or officers calling any
special meeting setting forth the substance of the notice, and the time and
place of the mailing of the same to the several stockholders, and the respective
addresses to which the same were mailed, shall be prima facie evidence of the
manner and fact of the calling and giving such notice.
SECTION 3. All business lawful to be transacted by the stockholders of the
corporation may be transacted at any special meeting or at any adjournment
thereof. Only such business, however, shall be acted upon at special meeting of
the stockholders as shall have been referred to in the notice calling such
meetings, but any stockholders' meeting at which all of the outstanding capital
stock of the corporation is represented, either in person or by proxy, any
lawful business may be transacted, and such meeting shall be valid for all
purposes.
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SECTION 4. At all stockholders' meetings, the holders of a majority of the
shares entitled to vote at any meeting shall constitute a quorum for the
transaction of business. The stockholders present at a duly or held meeting at
which a quorum is present may continue to do business until adjourment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
If the holders of the amount of stock necessary to constitute a quorum shall
fail to attend, in person or by proxy, at the time and place fixed by these
Bylaws for any annual meeting, or fixed by a notice as above provided for a
special meeting, a majority in interest of the stockholders present in person or
by proxy may adjourn from time to time without notice other than by announcement
at the meeting, until holders of the amount of stock requisite to constitute a
quorum shall attend. At any such adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been transacted as
originally called.
SECTION 5. At each meeting of the stockholders, every stockholder shall be
entitled to vote in person or by his or her duly authorized proxy appointed by
instrument in writing subscribed by such stockholder or by his or her duly
authorized attorney. Each stockholder shall have one (1) vote for each share of
stock standing registered in his or her or its name on the books of the
corporation, ten (10) days preceding the day of such meeting. The votes for
Directors, and upon demand by any stockholder, the votes upon any question
before the meeting shall be by viva voce.
At each meeting of the stockholders, a full, true and complete list, in
alphabetical order, of all the stockholders entitled to vote at such meeting,
and indicating the number of shares held by each, certified by the Secretary of
the corporation, shall be furnished, which list shall be prepared at least ten
(10) days before such meeting, and shall be open to the inspection of the
stockholders, or their agents or proxies, at the place where such meeting is to
be held, and for ten (10) days prior thereto. Only the persons in whose names
shares of stock are registered on the books of the corporation for ten (10) days
proceeding the date of such meeting, as evidence by the list of stockholders so
furnished, shall be entitled to vote at such meeting. Proxies and powers of
attorney to vote must be filed with the Secretary of the corporation before an
election or a meeting of the stockholders, or they cannot be used at such
election or meeting.
SECTION 6. At each meeting of the stockholders, the polls shall be opened and
closed; the proxies and ballots issued, received, and taken in charge of, for
the purpose of the meeting, and all questions touching the qualifications of
voters and the validity of proxies, and the acceptance or rejection of votes,
shall be decided by two (2) inspectors. Such inspectors shall be appointed at
the meeting by the presiding officer of the meeting.
SECTION 7. At the stockholders' meetings, the regular order of business shall be
as follows:
1. Reading and approval of the Minutes of previous meeting or meetings;
2. Reports of the Board of Directors, the President, Treasurer and Secretary
of the corporation in the order named;
3. Reports of Committees; Election of Directors;
4. Unfinished business;
5. New business;
6. Adjournment.
ARTICLE II
- ----------
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DIRECTORS AND THEIR MEETINGS
- ----------------------------
SECTION 1. The Board of Directors of the corporation shall consist of not less
than one (1) nor more than twelve (12) persons who shall be chosen by the
stockholders annually at the annual meeting of the corporation, and who shall
hold office for one (1) year, and until their successors are elected and
qualify.
SECTION 2. When any vacancy occurs among the Directors by death, resignation,
disqualification or other cause, the stockholders, at any regular or special
meeting, or at any adjournment meeting thereof, or the remaining Directors, by
the affirmative vote of a majority thereof, shall elect a successor to hold
office for the unexpired portion of the term of the Director whose place shall
have become vacant and until his or her successor shall have been elected and
shall qualify.
SECTION 3. Meetings of the Directors shall be held at any reasonable place, with
sufficient notice given, which has been designated from time to time by
resolution of the Board or by written consent of all members of the Board. In
the absence of such designation, regular meetings shall be held at the principal
office of the Corporation.
SECTION 4. Without notice or call, the Board of Directors shall hold its first
annual meeting for the year immediately after the annual meeting of the
stockholders or immediately after the election of Directors at such annual
meeting.
Special meetings of the Board of Directors may be held on the call of the
President or Secretary on at least twenty four (24) hour notice prior to the
time of the meeting.
Any meeting of the Board, no matter where held, at which all of the members
shall be present, even though without or of which notice shall have been waived
by all absentees, provided a quorum shall be present, shall be valid for all
purposes unless otherwise indicated in the notice calling the meeting or in the
waiver of notice.
Any and all business may be transacted by any meeting of the Board of Directors,
either regular or special.
SECTION 5. A majority of the Board of Directors in office shall constitute a
quorum for the transaction of business, but if at any meeting of the Board there
be less than a quorum present, a majority of those present may adjourn from time
to time, until a quorum shall be present, and no notice of prescribed rules not
in conflict with these Bylaws for the conduct of its business; provided,
however, that in the fixing of salaries of the officers of the corporation, the
unanimous action of all of the directors shall be required.
SECTION 6. A Director need not be stockholder of the corporation.
SECTION 7. The Directors shall be allowed and paid all necessary expenses
incurred in attending any meeting of the Board, but shall not receive ant
compensation for their services as Directors until such time as the corporation
is able to declare and pay dividends on its capital stock.
SECTION 8. The Board of Directors shall make a report to the stockholders at
annual meetings of the stockholders of the condition of the corporation, and
shall, on request, furnish each of the stockholders with a true copy thereof.
The Board of Directors, in its discretion, may submit any contract or act for
approval or ratification at any annual meeting of the stockholders called for
the purpose of considering any such contract or act, which, if approved or
66
<PAGE>
ratified by the vote of the holders of a majority of the capital stock
represented in person or by proxy, shall be valid and binding upon the
corporation and upon all the stockholders thereof, as if it had been approved or
ratified by every stockholder of the corporation.
SECTION 9. The Board of Directors may, by resolution passed by a majority of the
whole Board, designate an Executive Committee. This committee shall consist of
two (2) or more members besides the President, who by virtue of his or her
office shall be a member and the chairman thereof. The committee shall in the
interim between the meetings of the Board, exercise all powers of that body in
accordance with the general policy of the corporation and under the direction of
the Board of Directors. It shall also attend to and supervise all the financial
operations of the corporation, and shall examine and audit all the corporation's
accounts at the close of each fiscal year, and at such other times, as it may
deem necessary. The Secretary shall be the Secretary of the Committee and shall
attend its meetings, and its meetings shall be held on the call of the
President. All members of the Committee must be given at least two (2) days
notice of meetings either by mail or telegraph or by personal communication,
either by telephone or otherwise. A majority of the members of the Committee
shall constitute a quorum. The Committee shall keep due records of all meetings
and actions of the Committee, and such records shall at all times be open to the
inspection of any Director.
SECTION 10. The Board of Directors is vested with the complete and unrestrained
authority in the management of all the affairs of the corporation, and is
authorized to exercise, its entire corporate authority.
SECTION 11. The regular order of business at meetings of the Board of Directors
shall be as follows:
1. Reading and approval of the minutes of any previous meeting or meetings;
2. Reports of officers and committeepersons;
3. Election of officers;
4. Unfinished business;
5. New business;
6. Adjournment.
ARTICLE III
- -----------
OFFICERS AND THEIR DUTIES
- -------------------------
SECTION 1. The Board of Directors, at its first meeting after the annual meeting
of stockholders, shall elect a president, a Vice President, a Secretary and a
Treasurer, to hold office for one (1) year next coming, and until their
successors are elected and qualify. The President and Vice President shall be
members of the board of directors. The Treasurer and secretary need not be
Directors; the offices of the Secretary and Treasurer may be held by one (1)
person.
Any vacancy in any of said offices may be filled by the Board of Directors.
The Board of Directors may from time to time, by resolution, appoint such
additional Vice Presidents and additional Assistant Secretaries, Assistant
Treasurers and Transfer Agents it may deem advisable; prescribe their duties,
and fix their compensation, and all such appointed officers shall be subject to
removal at any time by the Board of directors. All officers, agents and factors
shall be chosen and appointed in such manner and shall hold their office for
such terms as the Board of directors may by resolution prescribe.
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<PAGE>
SECTION 2. The President shall be the executive officer of the corporation and
shall have the supervision and, subject to the control of the Board of
directors, the direction of the corporation's affairs, with full power to
execute all resolutions and orders of the board of Directors not especially
entrusted to some other officer of the corporation .President shall be a member
of the Executive Committee, and the Chairman thereof; he or she shall preside at
all meetings of the Board of directors, and at all meetings of the stockholders,
and shall sign the certificates of stock issued by the corporation, and shall
perform such other duties as shall be prescribed by the Board of Directors.
SECTION 3. The vice President shall be vested with all the powers and perform
all the duties in the absence or inability to act of the President, including
the signing of Certificates of Stock issued by the corporation, and he or she
shall so perform such other duties as shall be prescribed by the Board of
Directors.
SECTION 4. The Treasurer shall have the custody of all the funds and securities
of the corporation. When necessary or proper, he or she shall endorse on behalf
of the corporation for collection checks, notes, and other obligations; he or
she shall jointly with such other officer as shall be designated by these
Bylaws, sign all check made by the corporation, and shall pay out and dispose of
the same under the direction of the Board of Directors. The Treasurer shall sign
with the President all bills of exchange and promissory notes of the
corporation; he or she shall also have the care and custody of the stocks,
bonds, certificates, vouches, evidence of debts, securities, and such other
property belonging to the corporation as the Board of Directors shall
designated; he or she shall sign all papers requires by law or by these Bylaws
or the Board of Directors to be signed by the Treasurer. Whenever required by
the Board of Directors, the Treasurer shall render a statement of the
corporations' cash account; he or she shall enter regularly in the books of the
corporation to be kept by him or her for the purpose, full and accurate accounts
of all monies received and paid by him or her on account of the corporation. The
Treasurer shall at all reasonable times exhibit the books of account to any
Director of the corporation during business hours, and shall perform all acts
incident to the position of Treasurer subject to the control of the Board of
Directors.
The Treasurer shall, if required by the Board of Directors, give bond to the
corporation conditioned for the faithful performance of all his or her duties as
Treasurer in such sum, and with such security as shall be approved by the Board
of Directors, the expense of such bond to be borne by the corporation.
SECTION 5. The board of Directors may appoint an Assistant Treasurer who shall
have such powers and perform such duties as may be prescribed by the Treasurer
of the corporation or by the Board of Directors, and the Board of Directors
shall require the Assistant Treasurer to give a bond to the corporation in such
sum and with such security as it shall approve, and conditioned for the faithful
performance of his or her duties by the corporation.
SECTION 6. The Secretary shall keep Minutes of all meetings of the Board of
Directors and the minutes of all meetings of the stockholders and of the
Executive Committee in books provided for that purpose. The Secretary shall
attend to the giving and serving of all notices of the corporation; he or she
may sign with the President or a Vice President, in the name of the corporation,
all contracts authorized by the Board of Directors or Executive Committee; he or
she shall have the custody of the corporate seal of the corporation; he or she
issued by the corporation; he or she shall have charge of the Stock Certificate
Books, Transfer Books and Stock Ledgers, and such other books and papers as the
Board of Directors or the Executive Committee may direct, all of which shall at
all reasonable times be open to the examination of any Director upon application
at the office of the corporation during normal business hour; and her or she
shall, in general, perform all the duties incident to the office of Secretary.
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SECTION 7. The Board of Directors may appoint and Assistant Secretary who shall
have such powers and perform such duties as may be prescribed by the Secretary
or by the Board of Directors.
SECTION 8. Unless otherwise ordered by the Board of Directors, the President
shall have full power and authority in behalf of the corporation to attend and
to act and to vote at any meetings of the stockholders of any corporation in
which the corporation may hold stock, and at any such meetings, shall possess
and may exercise any and all rights and powers incident to the ownership of such
stock, and which as the new owner thereof, the corporation might have the
possessed and exercised if present. The Board of Directors, by resolution, from
time to time, may confer like powers on any person or persons in place of the
President to represent the corporation for the purposes in this section
mentioned.
ARTICLE IV
- ----------
CAPITAL STOCK
- -------------
SECTION 1. The capital stock of the corporation shall be issued in such manner
and at such times and upon such conditions as shall be prescribed by the Board
of Directors.
SECTION 2. Ownership of stock in the corporation shall be evidence by
certificates of stock in such forms as shall be prescribed by the Board of
Directors, and shall be under the seal of the corporation and signed by the
President or the Vice President and also by the Secretary or the Assistant
Secretary.
All certificates shall be consecutively numbered; the name of the persons owning
the shares represented thereby with the number of such shares and the date of
issue shall be entered on the corporations' books. No certificates shall be
valid unless it is signed by the President or Vice President and by the
Secretary or assistant Secretary. All certificates surrendered to the
corporation shall be canceled and no new certificates shall be issued until the
former certificates for the same number of shares shall have been surrendered or
canceled
SECTION 3. No transfer of stock shall be valid as against the corporation except
on surrender and cancellation of the certificate therefore, made either in
person or under assignment, a new certificate shall be issued therefore.
Whenever any transfer shall be expressed as made for collateral security and not
absolutely, the same shall be so expressed in the entry of said transfer on the
books of the corporation.
SECTION 4. The Board of Directors shall have power and authority to make all
such rules and regulations not inconsistent herewith as it may deem expedient
concerning the issue, transfer and registration of certificates for shares of
the capital stock of the corporation. The Board of Directors may appoint a
transfer agent and a registrar of transfers and may require all stock
certificates to bear the signature of each transfer agent and such registrar of
transfer.
SECTION 5. The Stock Transfer Books shall be closed for all meetings of the
stockholders for a period of ten (10) days prior to such meetings and shall be
closed for the payment of dividends during such periods as from time to time may
be fixed by the Board of Directors, and during such periods no stock shall be
transferable.
SECTION 6. Any person or persons applying for a certificate of stock in lieu of
one alleged to have been lost or destroyed, shall make affidavit or affirmation
of the fact, and shall deposit with the corporation an affidavit. Whereupon, at
the end of six (6) months after the deposits of said affidavit and upon such
person or persons giving Bond of Indemnity to the corporation with surety to be
approved by the Board of Directors in double the current value of the stock
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against any damage, loss or inconvenience to the corporation, which may or can
arise in consequence of a new or duplicate certificate being issued in lieu of
the one lost or missing, the Board of Directors may cause to be issued to such
persons or person a new certificate, or a duplicate of the certificate so lost
or destroyed. The Board of Directors may, in its discretion, refuse to issue
such new or duplicate certificates save upon the order of some court having
jurisdiction in such manner, anything herein to the contrary notwithstanding.
ARTICLE V
- ---------
OFFICE AND BOOKS
- ----------------
Section 1. The principal office of the corporation in Miami shall be at: 501
Brickell Key Drive, Suite 203, Miami Florida, 33131, and the corporation may
have a principal office in any other state or territory as the Board of
Directors may designate.
Section 2. The Stock and Transfer Books of the corporation shall be kept at its
principal office in the County of Nevada, for the inspection of all who are
authorized or have the right to see the same, and for the transfer of stock. All
other books of the corporation shall be kept at such places as may be prescribed
by the Board of Directors. A copy of the Bylaws, duplicate Stock Ledger and
Articles of Incorporation of the corporation shall be kept at its principal
office in the State of Nevada, and shall be subject to the inspection of any of
the stockholders.
ARTICLE VI
- ----------
MISCELLANEOUS
- -------------
Section 1. The Board of Directors shall have power to reserve over and above the
capital stock paid in, such an amount, in its discretion, as it may deem
advisable to fix as a reserve fund, and may, from time to time, declare
dividends from the accumulated profits of the corporation in excess of the
amounts so reserved, and pay the same to the stockholders of the corporation,
and may also, if it deems the same advisable, declare stock dividends of the
unissued capital stock.
Section 2. No agreement, contract or obligation (other than checks in payment of
indebtedness incurred by the authority of the Board of Directors) involving the
payment of money or the credit of the corporation for more than dollars, shall
be made without authority of the Board of Directors, or of the Executive
Committee acting as such.
Section 3. Unless otherwise ordered by the board of Directors, all agreements
and contracts shall be signed by the President and the Secretary in the name and
on behalf of the corporation, and shall have the corporate seal thereto
attached.
Section 4. All monies of the corporation shall be deposited when and as received
by the Treasurer in such bank or banks or other depository as may from time to
time be designated by the Board of Directors, and such deposits shall be made in
the name of the corporation.
Section 5. No note, draft, acceptance, endorsement or other evidence of indebt
ness shall be valid or against the corporation unless the same shall be signed
by the President or a Vice President, and attested by the Secretary or an
Assistant Secretary, or signed by the Treasurer or an Assistant Treasurer, and
countersigned by the President, Vice President or Secretary, except that the
Treasurer or an Assistant Treasurer may, without countersignature, sign payroll
checks and make endorsements for deposit to the credit of the corporation in all
its duly authorized depositories. No check or order for money shall be signed in
blank by more than one (1) officer of the corporation.
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Section 6. No loan or advance of money shall be made by the corporation to any
stockholder or officer therein, unless the Board of Directors shall otherwise
authorize.
Section 7. No Director nor executive officer shall be entitled to any salary or
compensation for any services performed for the corporation, unless such salary
or compensation shall be fixed by resolution of the Board of Directors, adopted
by the unanimous vote of all the Directors voting in favor thereof.
Section 8. The corporation may take, acquire, hold, mortgage, sell, or otherwise
deal in stocks or bonds or securities of any other corporation, if and as often
as the Board of Directors shall elect.
Section 9. The Directors shall have power to authorize and cause to be executed,
mortgages and liens without limit as to amount upon the property and franchise
of this corporation, and pursuant to the affirmative vote, either in person or
by proxy, of the holders of a majority of the capital stock issued and
outstanding; the Directors shall have authority to dispose in manner of the
whole property of this corporation.
Section 10. The corporation shall have a corporate seal, the design thereof
being as follows:
ARTICLE VII
- -----------
AMENDMENT OF BYLAWS
- -------------------
Amendments and changes of these Bylaws may be made at any regular or special
meeting of the Board of Directors by a vote of not less than all of the entire
Board, or may be made by a vote of, or a consent in writing signed by, the
holders of the issued and outstanding capital stock.
CERTIFICATE OF ADOPTION OF BYLAWS OF WEB CAPITAL GROUP, INC., a Nevada
Corporation
ADOPTION BY BOARD OF DIRECTORS. The undersigned. Being all of the persons
appointed in the articles of Incorporation to act as the first Board of
Directors of the above named corporation (or being their duly appointed
successors) hereby assent to the foregoing Bylaws of said corporation.
IN WITNESS WHEREOF, we have hereunto set our hands this day of December 7, 1999.
Name Signature
CERTIFICATES BY SECRETARY OF ADOPTION BY DIRECTORS.
- ---------------------------------------------------
THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of the above named
corporation and that the above and foregoing Bylaws were adopted as the Bylaws
of said corporation on the date set forth above by the persons appointed in the
Articles of Incorporation to act as the first Directors of said corporation, or
their duly appointed successors.
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IN WITNESS WHEREOF, I have hereunto set my hand this day of December 7, 1999
- ----------------------------
Secretary
CERTIFICATE BY SECRETARY OF ADOPTION BY SHAREHOLDERS' VOTE.
- -----------------------------------------------------------
THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of the above
named corporation and that the above and foregoing Code of Bylaws was submitted
to the Shareholders at their first meeting held on the date set forth in the
Bylaws and recorded in the minutes thereof was ratified by the vote of
Shareholders entitled to exercise the majority of the voting power of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand this day of December 7, 1999
- ----------------------------
Secretary
72
EX-10.1
Sub-Lease Agreement
CONSENT TO SUBLEASE
THIS CONSENT TO SUBLEASE ("Consent Agreement") dated as of July1, 1999,
is made with reference to that certain sublease (the "Sublease") dated as of
July1, 1999 between Nason & Nason, Inc. ("Tenant") and Sara Hallitex Corporation
("Sublessee"), and is entered into between the foregoing parties and
FBEC-Brickell Key Centre, L.P. ("Landlord"), with reference to the following
facts:
A. Landlord (as successor to Swire Brickell One Inc.) and Tenant are
the parties to that certain master lease dated as of April 22, 1997, (the
"Master Lease"), respecting certain premises ("Premises") located in the
building located at 501 Brickell Key Drive, Miami, Florida 33131 and known as
Courvoisier Centre I (the "Building").
B. Tenant and Sublessee wish to enter into the Sublease respecting the
portion of the Premises described therein (the "Sublease Premises").
C. The Master Lease provides that Tenant may not enter into the
Sublease without Landlord's prior written approval.
D. Tenant and Sublessee have herewith presented the fully-executed
Sublease to Landlord for Landlord's approval, and Landlord is willing to approve
the same, upon all of the terms and conditions hereinafter appearing.
NOW, THEREFORE, for good and valuable consideration, Landlord hereby
consents to the execution and delivery of the Sublease by Tenant and Sublessee
on the terms and conditions set forth herein, and the parties hereto agree as
follows:
1. Neither the Master Lease, the Sublease nor this Consent Agreement
will be deemed to grant Sublessee any rights whatsoever against Landlord except
as expressly set forth in this Consent Agreement. Sublessee hereby acknowledges
and agrees that its sole remedy for any alleged or actual breach of its rights
under the Sublease in connection with the Sublease Premises will be solely
against Tenant.
2. The parties hereto intend the Sublease to be subject and subordinate
to all provisions of the Master Lease. Nothing in the Sublease will supersede
any of the terms, covenants or conditions of the Master Lease. Nothing in the
Sublease will in any way whatsoever expand the liability or obligations of
Landlord, whether to Tenant, Sublessee or any other person or entity, or
diminish the rights of Landlord against any person or entity liable or
responsible for the performance of the Lease. Landlord hereby expressly
disapproves anything in the Sublease that does so expand the liability or
obligations of Landlord or diminish such rights of Landlord.
3. This Consent Agreement will not release Tenant from any existing or
future duty, obligation or liability to Landlord pursuant to the Master Lease,
nor will this Consent Agreement change, modify or amend the Master Lease in any
manner. This Consent will not be deemed consent to any further subleases by
Tenant. Subtenant may not subsublease all or any portion of the Sublease
Premises or assign the Sublease except in accordance with the Master Lease
provisions pertaining to subleases and assignments, and in accordance with the
Sublease provisions (if any) pertaining to subsubleases and assignments.
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4. Notwithstanding anything herein to the contrary, this Consent
Agreement is not a consent or an agreement by Landlord to the particular terms
and conditions of the Sublease.
5. In addition to Landlord's rights under this Consent Agreement, in
the event Tenant is in default under any of the terms and provisions of the
Master Lease, Landlord may elect to receive directly from Sublessee all sums due
or payable to Tenant by Sublessee pursuant to the Sublease, and upon receipt of
Landlord's notice, Sublessee will thereafter pay to Landlord any and all sums
becoming due or payable under the Sublease and Tenant will receive from Landlord
a corresponding credit for such sums against any payments then due or thereafter
becoming due from Tenant. Neither the service of such written notice nor the
receipt of such direct payments will cause Landlord to assume any of Tenant's
duties, obligations or liabilities under the Sublease. Any termination of the
Master Lease for any cause whatever will at Landlord's option, either (a)
immediately terminate the Sublease or (b) operate as an assignment to Landlord
of any Sublease then existing between Tenant and Sublessee affecting all or a
portion of the Premises. Landlord will not be liable for any prepaid rents nor
any security deposits paid by Sublessee. Landlord will not be liable for any
other defaults of the Tenant under the Sublease. Sublessee will attorn to
Landlord upon Landlord's request.
6. This Consent Agreement will not be deemed an expressed or implied
affirmation or representation of any factual statements or recitations contained
in the Sublease, whether relating to the Master Lease or otherwise, it being
understood that Sublessee is fully responsible for reviewing and familiarizing
itself with all of the terms and conditions of the Master Lease.
7. Tenant's obligation to indemnify and hold Landlord harmless as set
forth in Article 22 of the Master Lease will include indemnification from any
claims arising from the use of the Premises, or any portion thereof, by
Sublessee, its agents, employees or contractors. The waivers and indemnities by
Tenant set forth in the Master Lease are hereby remade by Sublessee.
8. Sublessee hereby acknowledges that it has read and has knowledge of
all of the terms, provisions, rules and regulations of the Master Lease and
agrees not to do or omit to do anything which would cause Tenant to be in breach
of the Master Lease. Any such act or omission will also constitute a breach of
this Consent and will entitle Landlord to recover any damage, loss, cost or
expense which it thereby suffers, from Sublessee, whether or not Landlord
proceeds against Tenant.
9. Tenant and Subtenant hereby represent, covenant and warrant to
Landlord that no compensation or other consideration of any kind (including,
without limitation, the rendering of services or the supplying of goods or
materials for other than full and fair value), other than as set forth in the
Sublease, has been or will be paid by Tenant or Subtenant in connection with the
aforesaid Sublease.
10. In the event of any litigation between the parties hereto with
respect to the subject matter hereof, the unsuccessful party agrees to pay the
successful party all costs, expenses and reasonable attorney's fees incurred
therein by the successful party, which shall be included as a part of the
judgment therein rendered.
11. This Consent Agreement will be binding upon and inure to the
benefit of the parties' respective successors and assigns, subject to all
agreements and restrictions contained in the Master Lease, the Sublease and
herein with respect to subleasing, assignment, or other transfer. The agreements
contained herein constitute the entire understanding between the parties with
respect to the subject matter hereof, and supersede all prior agreements,
written or oral, inconsistent herewith. No amendment, modification or change
therein will be effective unless Landlord gives its prior written consent
thereto. This Consent Agreement may be amended only in writing, signed by all
parties hereto.
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12. Tenant and Sublessee agree to indemnify and hold Landlord harmless
from and against any loss, cost, expense, damage or liability, including
reasonable attorneys' fees, incurred as a result of a claim by any person or
entity (i) that it is entitled to a commission, finder's fee or like payment in
connection with the Sublease or (ii) relating to or arising out of the Sublease
or any related agreements or dealings.
13. To the extent there are any conflicts between the terms of the
Sublease and this Consent Agreement, the terms of this Consent Agreement will
control.
14. The liability of Landlord to Tenant or Sublessee or both under this
Consent Agreement will be limited to the interest of Landlord in the Building
and surrounding property, and Tenant agrees to look solely to Landlord's
interest in the Building and the surrounding property for the recovery of any
judgment from the Landlord, it being intended that Landlord will not be
personally liable for any judgment of deficiency.
15. Terms used but not defined in this Consent Agreement and which are
defined in the Master Lease will have the same meaning for purposes hereof as
they have in the Master Lease.
16. Tenant shall pay for the reasonable costs, including legal fees,
incurred by Landlord in connection with this Consent.
IN WITNESS WHEREOF, the following parties have executed this Consent to
Sublease as of the date first above written.
TENANT:
WITNESSES: NASON & NASON, INC.
By: ----------------------------------
Name:
Name: --------------------------------
Name: Its: ---------------------------------
SUBLESSEE:
SARA HALLITEX CORPORATION
By: ----------------------------------
Name:
Name: --------------------------------
Name: Its: ---------------------------------
LANDLORD:
By: ----------------------------------
Name:
Name: --------------------------------
Name: Its: ---------------------------------
75
EX-10.2
Standard Lease Agreement
Between
Marina City Club Towers (Landlord)
And
Sara Hallitex Corporation (Tenant)
THIS LEASE is executed at Marina del Rey, California, this 18th day of August
1998, by and between M.C.C. L.P. as "Lessor" and Sara Hallitex Corporation as
"Lessee".
1. DESCRIPTION OF PREMISES
Lessor leases to Lessee and Lessee leases from Lessor, upon the
covenants and conditions set forth in this lease agreement, premises known as
Apartment 102P and Apartment 103P of the building located at 4344 Promenade Way,
Marina del Rey, California (the "Premises"). Said building is part of the
apartment complex known as the Marina City Club Towers.
2. TERM
Except as otherwise provided in this Section, the term of this lease
shall commence on September 1, 1998 (the "Anticipated Lease Commencement Date"),
or upon occupancy of the Premises by Lessee, whichever is sooner, and shall
expire on August 31, 1999. If Lessor for any reason whatsoever cannot deliver
possession of the Premises to Lessee by the Anticipated Lease Commencement Date,
neither Lessor nor its employees or agents shall be liable for any damages
caused Lessee thereby. If Lessor's inability to deliver possession of the
Premises to Lessee is caused by Lessee, the lease term and Lessee's obligation
to pay rent shall nevertheless commence on the Anticipated Lease Commencement
Date. If Lessor's inability to deliver possession of the Premises is not caused
by Lessee, the lease term and Lessee's obligation to pay rent shall not commence
until ten (10) days after Lessor has given Lessee notice that the Premises are
ready for delivery to Lessee or upon occupancy of the Premises by Lessee,
whichever is sooner, and the lease term shall be extended by the number of days
elapsed between the Anticipated Lease Commencement Date and the expiration of
said ten-day period or the date of occupancy by Lessee; whichever is sooner;
provided, however, that if Lessor is unable to deliver possession of the
Premises within thirty (30) days after the Anticipated Lease Commencement Date
through no fault of Lessee, Lessee shall have the right to cancel this lease by
giving Lessor written notice to that effect at any time prior to the time Lessor
gives Lessee notice that the Premises are ready for Lessee's possession. If
Lessee so cancels, Lessor shall promptly refund to Lessee, without interests,
any rental and security deposit previously paid by Lessee, and neither party
shall have any further rights against, or obligations or liabilities to, the
other party under or pursuant to this lease or by reason of its cancellation.
3. RENT
Lessee agrees to pay monthly installments of rent in the amount of Five
Thousand Seven Hundred and Fifty Dollars ($5,750), payable in advance in lawful
money of the United States on the first day of each calendar month during the
term of this lease, with no prior notice or demand and free of all claims or set
offs against Lessor; provided, however that if the term commences on other than
the first calendar day of the month, the rent for that month and for any
fractional part of the month at the end of the term shall be a proportionate
part of the monthly rent then in effect. The sum of $5,750 dollars shall be paid
to Lessor upon execution of this lease by Lessee, of which $5,750 dollars shall
be applied to rent for the September 1998 first month of the term. Lessee hereby
acknowledges that the late payment by Lessee to Lessor of rent will cause Lessor
to incur costs not contemplated by this lease, the exact amount of which will be
impracticable or extremely difficult to ascertain. Such costs include, without
limitation, processing and accounting charges and administrative expenses.
Accordingly, if any installment of rent is not received by Lessor in full within
five (5) days after its due date, Lessee shall pay to Lessor a late charge equal
to six percent (6%) of such overdue amount or five dollars ($5) whichever is
greater. Lessee and Lessor hereby agree that such late charge represents a fair
and reasonable estimate of the cost Lessor will incur by reason of late payment
by Lessee and that the late charge is in addition to and not in lieu of any
interest charges Lessor may be entitled to under this lease or at law.
Acceptance of such late charge by Lessor shall in no event constitute a waiver
of Lessee's default with respect to such overdue amount, nor prevent Lessor from
exercising any of its other rights and remedies under this lease or at law.
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3. SECURITY DEPOSIT
In addition to the sums set forth in Section 3 above, Lessee shall
deposit with Lessor upon the execution of this lease by Lessee the sum of
$5,750, to be held by Lessor, without interest, as a security deposit. Lessor
may claim of (withhold from) the security deposit such amounts as are reasonably
necessary to remedy Lessee's defaults in the payment of rent, to repair damages
to the Prices caused by Lessee, exclusive of ordinary wear and tear, or to clean
the Premises, if necessary, upon termination of Lessee's tenancy. If during the
lease term, all or any portion of the security deposit is claimed by Lessor to
remedy Lessee's defaults in the payment of rent or to repair damages, Lessee,
immediately upon Lessor's written notice, shall pay to Lessor an amount
sufficient to restore the security deposit to the sum set forth above and
Lessee's failure to do so within five (5) days thereafter shall constitute a
material breach of this lease. The security deposit, less any portion thereof
claimed by Lessor pursuant to this Section, shall be returned to Lessee within
fourteen (14) days after expiration or termination of Lessee's tenancy, provided
that Lessee has vacated the Premises, and Lessor will furnish to Lessee an
itemized written statement of the basis for, and the amount of, any security
received and the disposition of such security and shall return any remaining
portion of such security to Lessee.
4. HOLDING OVER
If Lessee remains in possession of the Premises after the expiration of
the term hereof with the consent of the Lessor, such holding over shall not
operate as a renewal of this lease but shall create a month-to-month tenancy,
terminable by either party upon thirty (30) days, written notice to the other,
on the same terms and conditions as contained herein, except that the monthly
rental for each month shall be Lessor's list rate in effect for the Premises as
of the first calendar day of said month.
5. RESTRICTIONS ON USE OF PROPERTY
Lessee hereby agrees: (a) to use the Premises as a private residence
only and not to conduct any business or commercial enterprise of any kind
therein or therefrom; (b) that only Lessee and Lessee's immediate family may
reside in the Premises, provided, however, that not more than the number of
persons hereinafter specified may reside therein; (c) if Lessee permits
temporary guests to occupy the Premises from time to time, (i) the total number
of person occupying or using the Premises at any one time shall not exceed the
number of persons hereafter specified, (ii) Lessee will notify Lessor of any
guests permitted to occupy the Premises in Lessee's absence, and (iii) any
conduct by a guest of Lessee which constitutes a breach or violation of the
terms of this lease shall be deemed to be a breach by Lessee of this lease; (d)
not to engage in or permit any act or neglect that would increase the cost of
insurance of the Premises or the complex in which the Premises are located; (e)
not to permit more than a total of two people to reside in the Premises at any
time if it is a one bedroom apartment, or four people if it is a two bedroom
apartment, or six people if it is a three bedroom apartment or penthouse, and
none of whom may be a sublessee, assignee, or renter (except Lessee). RULES AND
REGULATIONS GOVERNING TENANCY IN THE MARINA CITY CLUB TOWERS (the "Rules and
Regulations") are attached hereto and made a part hereof. Lessee agrees to
comply with the Rules and Regulations, as they may from time to time be amended
or promulgated by Lessor, and any violation thereof shall constitute a material
breach of this lease. Nothing contained herein shall be deemed to impose any
liability upon Lessor for any violation of the Rules and Regulations, or breach
of any covenant or condition of any lease, by any tenant or occupant of the
Marina City Club Towers complex.
6. NOTICE OF MOVE-IN DATE; MOVE-OUT
Lessee shall comply with Lessor's move0in and move-out policy as in
effect at the time of move. Lessor reserves the right from time to time to
change its move-in and move-out policy. Lessor's present move-in and move-out
policy prohibits moves on Saturdays, Sundays, or holidays or at times other than
between the hours of 8:00am and 6:30pm, and requires advance notice and
arrangements fro a specific move-in and move-out date. Lessee shall assume full
responsibility for any damage to property or persons caused by Lessee or
Lessee's agents during the move-in or move-out process.
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7. CARE OF PREMISES; LIABILITY; LIMITATION OF LIABILITY
(a) By taking possession of or occupying the Premises, Lessee
acknowledges that Lessee has carefully examined the Premises
and the fixtures and equipment contained herein and that same
are in good order and repair, except only to the extent that
Lessor otherwise agrees in writing. Except as provided by law,
Lessee (i) shall maintain the Premises and the fixtures and
equipment in good condition and repair at Lessee's expense,
and upon expiration or termination of this lease shall
surrender the Premises and fixtures and equipment in clean
condition and in as good condition as reasonable and careful
use will permit; (ii) shall not alter, remodel or redecorate
the Premises without the prior written consent of Lessor and
any required consent of the Department of Beaches and Harbors
and the California Coastal Zone Conservation Commission, and
without first obtaining all other approvals and permits
required by any governmental agency, including the County
Department of Building and Safety. Any such approved work must
be performed by a California licensed contractor and must
comply with all applicable laws, rules and regulations. Lessee
shall notify Lessor prior to commencing any such approved
work, shall indemnify and hold harmless Lessor from and
against all liens for labor and materials and against any
damage to property or persons caused by or resulting in any
way from such work.
(b) Lessee shall not commit or suffer any waste to be committed on
the Premises. Prior to the expiration or termination of this
lease, Lessee, unless Lessor otherwise agrees in writing,
shall remove at Lessee's expense all wall, floor or ceiling
covering installed by or for the account of Lessee, and Lessee
shall pay for any damage to the walls, floors, ceiling or
other portions of the Premises caused thereby.
(c) Lessor shall not be liable for any loss of or damage to any
property of Lessee or of Lessee's family members, guests,
invitees, servants or agents caused by (i) the malfunctioning,
nonfunctioning, or leaking of any plumbing, air conditioning,
heating, gas, water, steam, electrical or other system,
piping, equipment or fixtures located in the Premises or the
building in which the Premises are located; or (ii) water or
moisture coming through the roof, ceilings, floors, walls,
windows, doors, skylights, or otherwise - unless such loss or
damage is caused by Lessor's willful injury or sole gross or
active negligence or breach of any duty imposed by law.
(d) Lessor shall have no liability whatsoever to Lessee , or
Lessee's family members, guests, invitees, servants or agents
for any loss, damage or injury (including death) to their
person or property caused by theft, vandalism or other acts or
neglect of third persons, including without limitation,
co-tenants or other occupants of the Marina City Club Towers
complex or the building in which the Premises are located,
unless Lessor is made responsible therefore by specific
provisions of the law.
(e) As part of the consideration to Lessor for entering into this
lease and establishing the amount of the monthly rental to be
paid by Lessee, Lessee agrees that the Lessor's ability shall
be limited as set forth in this Section 8 and that Lessee
shall assume or look to such insurance as Lessee may wish to
carry for, any such loss, damage or injury (including death);
provided, however, that nothing herein contained is intended
to create any third party beneficiary right.
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8. INDEMNIFICATION OF LESSOR BY LESSEE
Lessee shall indemnify and hold Lessor harmless from and against all
claims, costs, expenses (including reasonable attorney's fees), actions and
liabilities for personal injury to, or death of, any person or persons,
including, without limitation, Lessee or Lessee's family members, and damage to
or loss or destruction of property belonging to Lessee or any other person or
entity, including that belonging to or under the care, custody or control of
Lessor, caused by or resulting in any way from the acts or omissions of Lessee
or Lessee's family members, guests, invitees, servants or agents. The provisions
of this Section 9 does not waive any duty of Lessor to prevent personal injury,
death or property damage where the duty is imposed by law.
9. SUBLETTING AND ASSIGNMENT
Lessee shall not sublet the Premises or any part thereof or assign
Lessee's interest under this Lease whether such assignment be in whole or in
part or voluntarily or by operation of law. Any such subletting or assignment
shall be void and shall constitute a material breach and default under this
lease. Lessee hereby specifically acknowledges notice of Lessor's policy against
subletting or assignment. The acceptance of rent by Lessor from any person shall
not constitute and shall not be deemed to constitute a waiver by Lessor of the
provisions of this Section or of any other provision of this lease, not shall it
give any such person, other than Lessee, the right to possession or occupancy of
the Premises. Lessor shall have the right to assign, hypothecate or otherwise
dispose of all or any part of its rights and interests in, to and under this
lease to any person, firm, corporation or other entity.
10. UTILITIES AND SERVICE
Lessor shall provide Lessee with reasonable quantities of running
water at Lessor's expense. Electricity, telephone service and other utilities
are the responsibility of and shall be provided and paid for by the Lessee. Any
interruption or curtailment in any utility service, or in any services furnished
by Lessor, shall not entitle Lessee to any claim against Lessor, or to any
reduction in rent or delay in the payment thereof, nor shall the same constitute
a constructive or partial eviction, unless, with respect to services furnished
by Lessor, Lessor shall fail to take reasonable measures to restore such
service. Lessee acknowledges that it is Lessee's responsibility to have the
electric meter connected for the Premises prior to Lessee's move-in, and, in
addition it is Lessee's responsibility to have any phones installed.
Arrangements for cable for cable TV hookup and service, if desired by Lessee, as
well as billing and payment therefore, shall be handled by Lessee directly with
the cable TV Company, Lessor shall have no liability whatsoever to Lessee with
respect to the cable TV service.
12. PARKING PRIVILEGES
Lessor, at no additional charge to Lessee, hereby grants to Lessee a
license during the term of this lease to park a motor vehicle within the parking
space or spaces designated by Lessor. Lessor reserves the right to change the
location of such space(s) from time to time, but will not do so arbitrarily. Not
more than one vehicle shall be parked in any space, the space(s) shall be used
solely for the parking of motor vehicles and shall not be for repairing
vehicles, no recreational vehicle may be parked therein and excessive grease/oil
drippings must be cleaned up immediately at Lessee's expense or the vehicle must
be parked off premises. Lessor's determination as to whether a vehicle is a
recreational-type shall be final. Lessee shall not sublet, assign, rent or make
any charge to others for any parking space designated for Lessee's use. Lessee
and Lessee's family members, guests, invitees, servants and agents assume the
risk of damage or loss of any motor vehicle (or portion thereof of anything
therein or thereon) parked by them within said space(s) or parked elsewhere on
Lessor's property either with or without Lessor's approval. Lessee and Lessee's
family members, guests, invitees, servants and agents shall be liable for all
towing and other related expenses in the event any such person uses parking
space(s) or areas other than those designated by Lessor. The number of parking
spaces assigned to Lessee is________________(____________).
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13. LESSOR RIGHT OF ENTRY
Lessor and its agents and employees may enter the Premises in case of
emergencies; to make necessary or agreed repairs, decorations, alterations or
improvements or supply necessary or agreed services; to exhibit the Premises to
prospective or actual tenants, purchasers, mortgagers, workman or contractors;
when Lessee has abandoned or surrendered the Premises; or pursuant to a court
order. Except in case of an emergency, when Lessee has abandoned or surrendered
the Premises, or if it is impractical to do so, Lessor shall give Lessee
reasonable notice of Lessor's intent to enter and, except in case of emergency
or when Lessee has abandoned or surrendered the Premises, will enter only during
normal business hours unless Lessee otherwise consents at the time of entry.
Twenty-Four hours shall be presumed to be reasonable notice in absence of
evidence to the contrary. Lessee shall not change locks on the entry door to the
Premises or add additional locks without the prior written approval of Lessor
and if such approval is granted, Lessee shall provide Lessor with keys, at
Lessee's expense, to open such new or additional locks.
14. DAMAGE OR DESTRUCTION OF PREMISES
If the Premises are destroyed or rendered unlivable by fire or other
casualty not caused by the negligent or willful act or omission of Lessee, or
Lessee's family members, guests, invitees, servants or agents, this lease shall
terminate effective as of the date of such casualties except for the purpose of
enforcing the rights that then may have accrued hereunder. If only a part of the
Premises is destroyed or rendered unlivable by fire or other casualty not caused
by the negligent or willful act or omission of Lessee, or Lessee's fami8ly
members, guests, invitees, servants or agents, and the remainder of the Premises
are tenantable, Lessor shall with reasonable dispatch proceed to repair such
damage or destruction, and this lease shall remain in full force and effect;
provided, however, that rent attributable to the period of repair shall be
abated in the proportion which the damaged or destroyed part bears to the whole
of the Premises. Lessee shall not be entitled to any other compensation by
reason of such damage or destruction or the repairs required thereby.
15. EMINENT DOMAIN
If the Premises shall be taken by eminent domain, this lease shall
terminate effective as of the date possession of the Premises is taken by the
condemning authority and the rent shall be a portion as of said date. No portion
of any judgment or award rendered in any eminent domain proceedings shall belong
to Lessee.
16. DEFAULT
The occurrence of either or both of the following events shall
constitute a default and breach by Lessee hereunder;
(a) the failure by Lessee to make any payment of rent or any other
payment required to made by Lessee hereunder, has in when due,
where such failure shall continue for a period of (3) days after
writt4en notice thereof from Lessor to Lessee; or
(b) The failure by Lessee to observe or perform covenant, agreement
or obligation of this lease, express or implied, to be observed
or performed by Lessee, other than as described in sub paragraph
(a) above.
17. REMEDIES
In the event of any such default or breach of Lessee, Lessor may at any
time thereafter, in addition to pursing any other remedy now or hereafter
available to Lessor under the laws or judicial decisions: Terminate Lessee's
right to possession of the Premises by any lawful means, in which case this
lease shall terminate and Lessee shall immediately surrender possession to the
Lessor. In such event, Lessor shall be entitled to recover from Lessee all
damages accrued by Lessor by reason of Lessee default including, but not limited
to the cost of recovering possession of the Premises, expenses of reletting, any
real estate commissions actually paid, and, in accordance with section 1951.2 of
the California Civil Code, the worth at the time of award of : (I) the unpaid
rent which had been earned at the time oft termination, (II) Then amount by
which the unpaid rent which would have been earned after termination until the
time e of award exceeds the amount of such rental loss that Lessee proves could
have been reasonably avoided, and (III) the amount by which the unpaid rent for
the balance of the term after the time of award exceeds the amount of such
rental loss that Lessee proves could be reasonably avoided together with any
other amount necessary to compensate Lessor for all the detriment approximately
caused by Lessee's failure to perform Lessee's obligation to be hereunder or
which in the ordinary course of things would be likely to be therefrom.
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18. INTEREST CHARGES
Any amount due from Lessee pursuant to this lease which is not paid
when due shall bear interest at the rate of ten percent (10%) per annum from the
date due until paid in full. Payment of, or the right of Lessor to collect such
interest shall not excuse or cure any default by Lessee hereunder.
19. EXPENSE OF LITIGATION
If either party incurs any expense, including reasonable attorneys'
fees, in connection with any action or proceeding instituted by either party by
reason of any default or alleged default of the other party hereunder, the party
prevailing in such action or proceeding shall be entitled to recover its
reasonable expenses and attorneys' fees from the other party in an amount
determined by the court, whether or not such action goes to final judgment. In
the event of settlement or final judgment in which neither party is awarded all
of the relief prayed for, the prevailing party as determined by the court shall
be entitled to recover from the other party reasonable expenses and attorneys'
fees in the amount determined by the court.
20. SUBORDINATION
This lease, at Lessor's option, shall be subordinate to any ground
lease, facilities lease. mortgage, deed of trust, or any other hypothecation for
security now or hereafter placed upon the real property of which the Premises
are apart. Lessee shall execute any documents required to effectuate such
subordination and a failure to do so within (10) days after written demand shall
thereby make, constitute, an irrevocably appoint Lessor as Lessee's
attorney-in-fact and in Lessee's place and stead, to do so.
21. NOTICES
Any notice required or permitted hereunder shall be in writing and may be
served personally or by mail. If served by mail it shall be addressed, if
directed to Lessor, to Lessor at:
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------
(Attention: Leasing Department) or such other address as Lessor may from time to
time designate in writing to Lessee; or, if directed to Lessee, to Lessee at the
Premises, except that notice is given by Lessor pursuant to Section 2 hereof
shall be sent to Lessee either at Lessee's residential or business address as
shown on Lessee's lease application. Any notice given by mail shall be deemed
effective forty-eight (48) hours after deposit in the United States mail
registered or certified, postage pre-paid and addressed as specified above.
23. MISCELLANEOUS
(a) Lessor's consent to or approval of any act of Lessee requiring
Lessor'[s consent or approval shall not be deemed to render
unnecessary the obtaining of Lessor's consent to or approval of
any subsequent act by Lessee, whether or not similar to the act
so consented to or approved. The waiver by Lessor of any breach
of any term covenant, or condition of this lease shall not be
deemed to be a waiver of such term, covenant or condition or any
subsequent breach of the same term or any other term, covenant or
condition of this lease. The subsequent acceptance of rent by
Lessor shall not be deemed to be a waiver of any preceding
default or breach by Lessee under any term, covenant, or
condition of this lease other than the failure of Lessee to pay
the particular rental so accepted, regardless of Lessor's
knowledge of such proceeding default or breach at the time of
acceptance of such rent.
(b) The provisions of this lease shall be deemed independent and
severable, and the invalidity or partial invalidity or
enforceability of any provision, clause, sentence, or phrase
hereof shall not affect the validity of remaining provisions.
(c) Time is of the essence of this lease.
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(d) Each provision of this lease to be performed by Lessee shall be
deemed both a covenant and a condition.
(e) Each and all of the terms, covenants and agreements contained
herein shall be binding upon and shall inure to the benefit of
the respective heirs, executors, administrators and successors of
each of the parties hereto and the assignees of Lessor. If there
be more than one Lessee hereunder, the obligations of each shall
be joint and several.
(f) This lease, together with any Riders attached hereto and bearing
even date herewith and signed by Lessee and Lessor, constitutes
the entire agreement between the parties with respect to the
subject t matter hereof. Lessee has not relied on any statement
or representation of Lessor, its agents, officers, or employees,
except as herein specifically contained. This agreement may not
be modified except by aw written instrument duly executed by the
parties hereto or by their authorized agents or officers.
(g) The Premises are part of certain property that is leased from the
county of Los Angeles (the " County Lease"), and the within
Standard Apartment Lease Agreement, although not specifically so
designated herein is a sublease under the County Lease. Lessor is
the managing agent for the Lessee under the County Lease of the
premises and the property of which it forms apart. The County has
approved a plan pursuant to which specific residential units
including the Premises may be subleased for periods in excess of
one year. However, the County Lease requires that any such
sublease (including the within Standard Apartment Lease Agreement
if it is for a term in excess of one year) shall specifically
provide that the County shall have the absolute power as its sole
election to cancel such sublease at any time. Therefore, The
County shall have the absolute power at its sole election to
cancel the within Standard Apartment Lease Agreement at any time
if it is for a term in excess of one year. Neither the Lessee
under the County Lease nor Lessor, nor their respective
successors, assignees, officers, directors or employees shall
have any responsibility or liability whatsoever to Lessee for any
loss, costs, expenses or damages which are incurred or sustained
by Lessee as a result or consequence of any such cancellation by
the County.
(h) This lease may be executed in several original counterparts, all
of which shall be deemed to be one original, including any riders
attached thereto.
Lessee's attention is directed to Section 5 of this lease for provisions
relating to the terms and conditions, including rent, hat will be applicable in
the event Lessee remains in possession of the Premises after the expiation of
the term hereof with Lessor's consent.
Lessor: Lessee:
By:/s/ MCC L.P. By:/s/ Sara Hallitex Corporation
Sara Hallitex Corporation
82
EX-10.3
Sara Environmental, Inc.
Executive Employment Agreement
This Executive Employment Agreement ("the Agreement") is made and entered into
this November 27, 1996, by and between Garrett K. Krause (hereinafter referred
to as "Employee"), and Sara Environmental, Inc., an Oklahoma corporation,
(hereinafter referred to as "Company") with reference to the following facts and
objectives:
Recitals
A. Employee has been providing services as the President, Chief Executive
Officer, Chairman of the Board and related activities as an Employee of the
Company.
B. Company is a corporation organized and in good standing under the laws of the
State Oklahoma and desires to employ Employee under the terms and conditions of
this Agreement.
Now, therefore, in reliance on the foregoing Recitals, and in consideration of
the mutual promises and covenants contained herein, Company and Employee hereby
agree as follows:
1. Employment. During the term hereof, Company hereby employs Employee and
Employee hereby accepts and agrees to furnish Company with all the Employee's
skills and abilities under the designation as President, Chief Executive
Officer, and Chairman of the Board of the Company.
2. Duties. During the term of the Agreement, Employee shall devote all of
Employee's services, best efforts, and all reasonable work time (excluding
vacation and personal time) toward his employment with the Company, to further
Company's interests and to perform diligently and in good faith such duties as
are or may be, from time to time, required by Company in connection with his
employment hereunder. The Employee shall, at all times, comply with the policies
and procedures promulgated by the Company. The making of passive and personal
investments and conducting private business affairs not inconsistent with the
Agreement by the Employee shall not be prohibited under this Agreement.
3. Company's Authority. Employee shall perform in proper form orders,
directions, and policies by the Company to the Employee periodically not
inconsistent with the provisions of this Agreement. Employee agrees to accept
the decisions of the Company in the establishment and amendment of working
facilities, conditions, not otherwise agreed upon herein.
4. Term. The term of this Agreement shall begin on November 27, 1996 (the
"Effective Date") and shall be for a period of 5 years, with automatic renewal
terms of equal length subject to the Company's prior written notification of 30
days before the expiration of the original term of its decision not to renew
this Agreement, beginning on the Effective Date of this Agreement.
5. Compensation.
(a) Base Salary. In consideration of the faithful performance of the
above duties and responsibilities to and on behalf of the Company, the Company
agrees to pay the Employee during the period of Employee's employment with
Company a base annual salary of $240,000 (the "Base Salary"). The Base Salary
shall be due and payable semi-monthly or on a more frequent basis and reviewed
at the Employee's anniversary date by the Board of Directors of Company;
provided, however, that such Base Salary shall in any event be increased as of
January 1 of each calendar year at a rate greater than the percentage increase
in the National Consumer Price Index, as reported by the United States
Department of Labor for the immediately preceding calendar year, or as otherwise
determined by the Board of Directors (or Compensation Committee, if any) of the
Company.
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(b) Bonus. As further compensation, the Company may pay the Employee
such bonus or bonuses and stock options as may, from time to time, be awarded or
granted to the Employee by the Company exercising its sole and absolute
discretion.
(1) Stock Incentive Bonus Plan. The Company agrees to issue
Employee 1,000,000 shares of Company common stock, once a year, at the end of
each fiscal year, as part of an incentive program based upon Executive's efforts
to increase the value of the Company's stock.
(d) Employment Taxes. Unless otherwise provided by law, all
compensation paid to the Employee shall be subject to the customary withholding
tax, other employment taxes and withholding amounts as required with respect to
compensation paid by the Company to the Employee.
6. Health Insurance. The Company shall provide, at its expense, complete family
health insurance coverage for the Employee and his family. The Employee will be
eligible to participate in any other benefit program or plan offered to
similarly situated employees, subject to any limitations or restrictions
associated with said program or plan (such as waiting periods, vesting
schedules, and pre-existing condition limitations).
7. Business Expense. Business Expense of the Employee incurred in the
performance of his duties, including the costs of attending meetings, promotion,
and entertainment expenses shall be borne by the Company and reimbursable to
Employee upon presentation of appropriate documentation by the Employee to the
Company and compliance with Company's established practices and procedures.
8. Other Company Benefits. Employee shall be entitled to participate in all
employee benefit programs made available to Company's executives or salaried
employees generally, as such programs may be offered from time to time.
9. Absences. The Employee shall be entitled to 2 weeks away from work for paid
vacation. Company may, from time to time, allow Employee additional time away
from employment in the Company's sole discretion. The parties acknowledge that
such exercise of discretion in one event shall not create a right to also be
permitted reasonable numbers of days away from work for sick days or leaves of
absences.
10. Death of Disability. Except as otherwise provided in this paragraph 10, in
the event of Employee's death or "Disability" (as hereinafter defined) occurring
during the term of this Agreement, Employee or his estate, as the case may be,
shall be entitled to: (i) that portion of any unpaid salary together with the
benefits accrued and earned by Employee hereunder up to and including the last
day of the month in which the death or disability occurs, as the case may be,
(ii) any death or disability-related benefits pursuant to the insurance program
set forth above and any employee benefit plan to which Employee or his
beneficiary may be entitled hereunder; (iii) any unpaid Bonus Amount earned by
the Employee for the prior fiscal year of the Company and approved by Company if
such approval is required hereunder shall be prorated based upon the length of
Employee's service during the applicable year over 365 days; and (iv) a payment
equal to one year's Base Salary then in effect for Employee if the remaining
term of this Agreement is less than one year, or, if more than one year remains
under the Agreement, the Estate may elect to continue to receive the payments
due under the Agreement specified as salary. A "Disability" shall be deemed to
have occurred if Employee shall have been unable to discharge his normal duties
and job description under this Agreement for a period of ninety (90) days in the
aggregate during any consecutive four (4) month period, his employment shall
thereupon terminate at the end of the calendar month in which such period ends.
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11. Termination. Employee's employment with the Company shall be terminated if
any of the following occur:
(a) At the expiration of the term of this Agreement if Company gives
written notice of its intention not to renew this Agreement one hundred eighty
(180) days prior to the expiration of the term;
(a) On the death of the Employee;
(b) Whenever the Employee shall fail to cure or rectify a material
breach of any of the terms, covenants and conditions of this Agreement within
thirty (30) days after Employee receives written notice from the Company to cure
such default (except when terminated for those causes that allow immediate
termination as described in Section 12(b));
(c) For "Cause" as defined in Paragraph 14 below; or
(d) Upon the Disability of the Employee as set forth in Paragraph 12
above.
12. Definition of "Cause"
(a) For purposes of this Agreement, the term "Cause" shall include:
(i) incompetence, failure, inability, or refusal to perform assigned
duties;
(ii) gross negligence, willful misconduct or breach of fiduciary duty;
(iii) being under the influence of, or use, sale, distribution, or
possession of unauthorized or illegal drugs or intoxicating
beverages while on duty or on the Company's or a subsidiary's
premises;
(iv) willful destruction or defacement of Company's or a subsidiary's,
a customer's, or an employee's property;
(v) unauthorized disclosure of confidential information; and
(vi) continued and unexplained absences from work.
(b) For the purposes of this Agreement, Employee shall be immediately
terminated without notice for the following Causes:
(i) unauthorized entry into Company's secured non-public areas;
(ii) falsifying or altering the Company's or subsidiary's records;
(iii) theft, embezzlement, fraud or forgery
(iv) any act which results or was intended to result in significant
gain or personal enrichment to the Employee at the Company's
expense.
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13. Confidential and Secret Information/Company Property. Employee acknowledges
that he will have access to items used in the Company's business which the
Company deems to be secret, confidential, unique and valuable; were developed by
Company at a great cost and over a long period of time; and that disclosure of
any of these items to anyone other than Company's officers, directors, agents or
authorized employees will cause Company irreparable injury. Employee agrees that
upon termination of this Agreement, he will return any and all documentary
information or written documents to Company. Such items and information shall be
held in strict confidence by the Employee and shall not be revealed to any third
party unless otherwise required by law. All other material and property that may
be furnished to employee during the course of his employment with the Company
such as customer lists, customer tracking, automobiles, books and records shall
be and remain the Company's property and shall be returned to the Company at any
time upon demand.
14. Severance Pay. In the event Company terminates Employee's employment
hereunder, Company shall pay to Employee a sum equivalent to the balance of the
salary due to be paid under this Agreement or 300% of the Base Salary (excluding
bonuses and other compensation), whichever is greater.
15. Change of Control. Immediately upon a Change of Control, if Executive's
employment with the Company is terminated within twenty-four (24) months
following such Change of Control, either without cause or pursuant to this
Agreement, in addition to any other compensation or benefits payable pursuant to
this Agreement, Executive shall be entitled to: Payment in cash equal to four
times his Base Salary, plus immediate vesting of 100% of all Employee's stock;
stock options or other awards to the Executive under any of the Company's
incentive plans. The Executive's rights upon a Change of Control to benefit
under programs, plans and policies of the Company shall be determined according
to the terms and provisions of such programs, plans and policies.
16. Arbitration. Any and all disputes, controversies or claims arising under or
in conjunction with this Agreement other than the right to injunctive relief as
set forth in Paragraph 12 above, including without limitation, the general
validity or enforceability of this Agreement, shall be governed by the laws of
the State of California, without giving effect to its conflict of law provisions
and shall be submitted to binding arbitration rules of the American Arbitration
Association conducted in Los Angeles County, California. All expenses of any
arbitration shall be borne equally by the parties. The award to the arbitrator,
including any award of attorney's fees, shall be final and enforceable in the
courts of California. All costs of enforcing a judgment following the
arbitration are to be borne by the losing party. In reaching his or her
decision, the arbitrator shall have no authority to change or modify any
provision of this Agreement. Each party shall have the right to discovery in
accordance with the California Rules of Civil Procedure.
17. Modification. This Agreement shall not be modified, amended, supplemented,
or extended except by written consent executed by both the Company and Employee,
except as expressly provided herein to the contrary.
18. Assignment. Neither the Employee nor the Company shall voluntarily
subcontract or assign any of their respective rights, duties, or obligations
hereunder without first obtaining the other party's written consent.
19. Notice. Except as expressly provided to the contrary herein, any notices or
other communications required, permitted, or made necessary by the terms of this
Agreement may be given to the respective representatives of the Company and the
employee designated herein by written communication. Written notices shall be
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<PAGE>
personally delivered to the Company's representatives or the Employee as
appropriate or sent by the United States registered or certified mail, postage
prepaid, return receipt requested, addressed to the Company to its principal
corporate office and to the Employee at the Employee's residential address.
Notices sent by mail shall be deemed made, delivered, and received on the date
of the United States' postmark thereon. Upon receipt of notice Employee shall
have thirty (30) days to cure or rectify all items described in the Notice.
Federal Express and similar services shall be considered personal service or
delivery. Personal delivery of written notice hereunder may also be given by
facsimile or other electronic transmission (provided that the sender of a
telephone facsimile or other electronic transmission has received a facsimile
confirmation report showing the number to which the facsimile was transmitted).
Either party may change its address for notice by giving notice of such change
to the other party in the manner specified in this section.
20. No Waiver. No waiver of any breach or default in any of the terms and
provisions of this Agreement shall be deemed to constitute or be construed as a
waiver of the subsequent breach of default of the same, similar, or dissimilar
nature.
21. Choice of Law and Invalidity. The validity, construction, performance and
effect of this Agreement shall be governed by the laws of the State of Oklahoma.
In case any one or more of the provisions contained herein shall for any reason
be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other
provisions of this Agreement, but this Agreement shall be construed as if such
invalid, illegal, or unenforceable provisions contained herein shall, for any
reason, be held to be excessively broad to time, duration, geographical scope,
activity or subject, said provision shall be construed by limiting and reducing
it so as to be enforceable to the extent compatible with the then applicable
law, it being the intent of the parties hereto to give the maximum permitted
effect to the restrictions set forth herein.
22. Interpretation. If necessary to give effect to the terms and provisions
hereof, the masculine, feminine, and neuter gender in the singular and plural
number shall each be deemed to include the other whenever the context to
indicates. To the unenforceable, it is agreed that the essential terms of this
Agreement shall be and remain enforceable against the parties.
23. Headings. Headings to this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the scope, extent, or intent of this Agreement or any provision hereof.
24. Counterparts. This Agreement may be executed in any number of counterparts,
any of which may be constituted in the agreement between the parties hereto.
25. Time. Time is of the essence for all obligations contemplated in this
Agreement.
26. Entire Agreement. This Agreement, and any schedules and exhibits attached
thereto contain and set forth the entire Agreement between the parties with
respect to the subject matter hereof. All prior negotiations and agreements
between the parties with respect to the scope of this Agreement are mutually
rescinded, replaced, and superseded hereby.
27. Authority. The Company warrants and represents that it is a corporation
organized and existing under the laws of the State of Oklahoma, that the
undersigned is authorized to execute this Agreement on behalf of the Company;
that the employment of the Employee under the terms of this Agreement has been
duly authorized by the Company.
28. Inurement. Each covenant and condition in this Agreement shall be binding
on, and shall inure solely to the benefit of the parties to it, their respective
heirs, legal representatives, successors, and assigns.
32. Presumption. This Agreement or any section of this Agreement shall not be
construed against any party due to the fact that the Agreement or any section of
it was drafted by said party.
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<PAGE>
In Witness Whereof, the parties to this Employment Agreement have duly executed
it on the day and year first above written.
Employee:/s/ Garrett K. Krause Company: /s/ Sara Environmental, Inc.,
an Oklahoma corporation
88
EX-10.4
Web Capital Group, Inc.
(formerly Sara Hallitex Corporation)
Executive Employment Agreement
This Executive Employment Agreement ("the Agreement") is made and entered into
this 1st day of January, 2000, by and between Kristen R. Corri (hereinafter
referred to as "Employee"), and Web Capital Group, Inc., a Nevada corporation,
(hereinafter referred to as "Company") with reference to the following facts and
objectives:
Recitals
A. Company is a corporation organized and in good standing under the laws of the
State Nevada and desires to employ Employee under the terms and conditions of
this Agreement.
Now, therefore, in reliance on the foregoing Recitals, and in consideration of
the mutual promises and covenants contained herein, Company and Employee hereby
agree as follows:
1. Employment. During the term hereof, Company hereby employs Employee and
Employee hereby accepts and agrees to furnish Company with all the Employee's
skills and abilities under the designation as Vice President and Director of the
Company.
2. Duties. During the term of the Agreement, Employee shall devote all of
Employee's services, best efforts, and all reasonable work time (excluding
vacation and personal time) toward his employment with the Company, to further
Company's interests and to perform diligently and in good faith such duties as
are or may be, from time to time, required by Company in connection with his
employment hereunder. The Employee shall, at all times, comply with the policies
and procedures promulgated by the Company. The making of passive and personal
investments and conducting private business affairs not inconsistent with the
Agreement by the Employee shall not be prohibited under this Agreement.
3. Company's Authority. Employee shall perform in proper form orders,
directions, and policies by the Company to the Employee periodically not
inconsistent with the provisions of this Agreement. Employee agrees to accept
the decisions of the Company in the establishment and amendment of working
facilities, conditions, not otherwise agreed upon herein.
4. Term. The term of this Agreement shall begin on January 1, 2000 (the
"Effective Date") and shall be for a period of 5 years, with automatic renewal
terms of equal length subject to the Company's prior written notification of 30
days before the expiration of the original term of its decision not to renew
this Agreement, beginning on the Effective Date of this Agreement.
5. Compensation.
(a) Base Salary. In consideration of the faithful performance of the
above duties and responsibilities to and on behalf of the Company, the Company
agrees to pay the Employee during the period of Employee's employment with
Company a base annual salary of $76,000 (the "Base Salary"). The Base Salary
shall be due and payable semi-monthly or on a more frequent basis and reviewed
at the Employee's anniversary date by the Board of Directors of Company;
provided, however, that such Base Salary shall in any event be increased as of
January 1 of each calendar year at a rate greater than the percentage increase
in the National Consumer Price Index, as reported by the United States
Department of Labor for the immediately preceding calendar year, or as otherwise
determined by the Board of Directors (or Compensation Committee, if any) of the
Company.
(b) Bonus. As further compensation, the Company may pay the Employee
such bonus or bonuses and stock options as may, from time to time, be awarded or
granted to the Employee by the Company exercising its sole and absolute
discretion.
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(c) Employment Taxes. Unless otherwise provided by law, all
compensation paid to the Employee shall be subject to the customary withholding
tax, other employment taxes and withholding amounts as required with respect to
compensation paid by the Company to the Employee.
6. Health Insurance. The Company shall provide, at its expense, complete family
health insurance coverage for the Employee and his family. The Employee will be
eligible to participate in any other benefit program or plan offered to
similarly situated employees, subject to any limitations or restrictions
associated with said program or plan (such as waiting periods, vesting
schedules, and pre-existing condition limitations).
7. Business Expense. Business Expense of the Employee incurred in the
performance of his duties, including the costs of attending meetings, promotion,
and entertainment expenses shall be borne by the Company and reimbursable to
Employee upon presentation of appropriate documentation by the Employee to the
Company and compliance with Company's established practices and procedures.
8. Other Company Benefits. Employee shall be entitled to participate in all
employee benefit programs made available to Company's executives or salaried
employees generally, as such programs may be offered from time to time.
9. Absences. The Employee shall be entitled to 2 weeks away from work for paid
vacation. Company may, from time to time, allow Employee additional time away
from employment in the Company's sole discretion. The parties acknowledge that
such exercise of discretion in one event shall not create a right to also be
permitted reasonable numbers of days away from work for sick days or leaves of
absences.
10. Death of Disability. Except as otherwise provided in this paragraph 10, in
the event of Employee's death or "Disability" (as hereinafter defined) occurring
during the term of this Agreement, Employee or his estate, as the case may be,
shall be entitled to: (i) that portion of any unpaid salary together with the
benefits accrued and earned by Employee hereunder up to and including the last
day of the month in which the death or disability occurs, as the case may be,
(ii) any death or disability-related benefits pursuant to the insurance program
set forth above and any employee benefit plan to which Employee or his
beneficiary may be entitled hereunder; (iii) any unpaid Bonus Amount earned by
the Employee for the prior fiscal year of the Company and approved by Company if
such approval is required hereunder shall be prorated based upon the length of
Employee's service during the applicable year over 365 days; and (iv) a payment
equal to one year's Base Salary then in effect for Employee if the remaining
term of this Agreement is less than one year, or, if more than one year remains
under the Agreement, the Estate may elect to continue to receive the payments
due under the Agreement specified as salary. A "Disability" shall be deemed to
have occurred if Employee shall have been unable to discharge his normal duties
and job description under this Agreement for a period of ninety (90) days in the
aggregate during any consecutive four (4) month period, his employment shall
thereupon terminate at the end of the calendar month in which such period ends.
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11. Termination. Employee's employment with the Company shall be terminated if
any of the following occur:
(a) At the expiration of the term of this Agreement if Company gives
written notice of its intention not to renew this Agreement one hundred eighty
(180) days prior to the expiration of the term;
(e) On the death of the Employee;
(f) Whenever the Employee shall fail to cure or rectify a material
breach of any of the terms, covenants and conditions of this Agreement within
thirty (30) days after Employee receives written notice from the Company to cure
such default (except when terminated for those causes that allow immediate
termination as described in Section 12(b));
(g) For "Cause" as defined in Paragraph 14 below; or
(h) Upon the Disability of the Employee as set forth in Paragraph 12
above.
12. Definition of "Cause"
(c) For purposes of this Agreement, the term "Cause" shall include:
(i) incompetence, failure, inability, or refusal to perform assigned
duties;
(ii) gross negligence, willful misconduct or breach of fiduciary duty;
(iii) being under the influence of, or use, sale, distribution, or
possession of unauthorized or illegal drugs or intoxicating
beverages while on duty or on the Company's or a subsidiary's
premises;
(iv) willful destruction or defacement of Company's or a subsidiary's,
a customer's, or an employee's property;
(v) unauthorized disclosure of confidential information; and
(vi) continued and unexplained absences from work.
(d) For the purposes of this Agreement, Employee shall be immediately
terminated without notice for the following Causes:
(v) unauthorized entry into Company's secured non-public areas;
(vi) falsifying or altering the Company's or subsidiary's records;
(vii) theft, embezzlement, fraud or forgery
(viii) any act which results or was intended to result in significant
gain or personal enrichment to the Employee at the Company's
expense.
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13. Confidential and Secret Information/Company Property. Employee acknowledges
that he will have access to items used in the Company's business which the
Company deems to be secret, confidential, unique and valuable; were developed by
Company at a great cost and over a long period of time; and that disclosure of
any of these items to anyone other than Company's officers, directors, agents or
authorized employees will cause Company irreparable injury. Employee agrees that
upon termination of this Agreement, he will return any and all documentary
information or written documents to Company. Such items and information shall be
held in strict confidence by the Employee and shall not be revealed to any third
party unless otherwise required by law. All other material and property that may
be furnished to employee during the course of his employment with the Company
such as customer lists, customer tracking, automobiles, books and records shall
be and remain the Company's property and shall be returned to the Company at any
time upon demand.
14. Severance Pay. In the event Company terminates Employee's employment
hereunder, Company shall pay to Employee a sum equivalent to the balance of the
salary due to be paid under this Agreement or ____ of the Base Salary (excluding
bonuses and other compensation), whichever is greater.
15. Change of Control. Immediately upon a Change of Control, if Executive's
employment with the Company is terminated within twenty-four (24) months
following such Change of Control, either without cause or pursuant to this
Agreement, in addition to any other compensation or benefits payable pursuant to
this Agreement, Executive shall be entitled to: Payment in cash equal to four
times his Base Salary, plus immediate vesting of 100% of all Employee's stock;
stock options or other awards to the Executive under any of the Company's
incentive plans. The Executive's rights upon a Change of Control to benefit
under programs, plans and policies of the Company shall be determined according
to the terms and provisions of such programs, plans and policies.
16. Arbitration. Any and all disputes, controversies or claims arising under or
in conjunction with this Agreement other than the right to injunctive relief as
set forth in Paragraph 12 above, including without limitation, the general
validity or enforceability of this Agreement, shall be governed by the laws of
the State of California, without giving effect to its conflict of law provisions
and shall be submitted to binding arbitration rules of the American Arbitration
Association conducted in Los Angeles County, California. All expenses of any
arbitration shall be borne equally by the parties. The award to the arbitrator,
including any award of attorney's fees, shall be final and enforceable in the
courts of California. All costs of enforcing a judgment following the
arbitration are to be borne by the losing party. In reaching his or her
decision, the arbitrator shall have no authority to change or modify any
provision of this Agreement. Each party shall have the right to discovery in
accordance with the California Rules of Civil Procedure.
17. Modification. This Agreement shall not be modified, amended, supplemented,
or extended except by written consent executed by both the Company and Employee,
except as expressly provided herein to the contrary.
18. Assignment. Neither the Employee nor the Company shall voluntarily
subcontract or assign any of their respective rights, duties, or obligations
hereunder without first obtaining the other party's written consent.
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19. Notice. Except as expressly provided to the contrary herein, any notices or
other communications required, permitted, or made necessary by the terms of this
Agreement may be given to the respective representatives of the Company and the
employee designated herein by written communication. Written notices shall be
personally delivered to the Company's representatives or the Employee as
appropriate or sent by the United States registered or certified mail, postage
prepaid, return receipt requested, addressed to the Company to its principal
corporate office and to the Employee at the Employee's residential address.
Notices sent by mail shall be deemed made, delivered, and received on the date
of the United States' postmark thereon. Upon receipt of notice Employee shall
have thirty (30) days to cure or rectify all items described in the Notice.
Federal Express and similar services shall be considered personal service or
delivery. Personal delivery of written notice hereunder may also be given by
facsimile or other electronic transmission (provided that the sender of a
telephone facsimile or other electronic transmission has received a facsimile
confirmation report showing the number to which the facsimile was transmitted).
Either party may change its address for notice by giving notice of such change
to the other party in the manner specified in this section.
20. No Waiver. No waiver of any breach or default in any of the terms and
provisions of this Agreement shall be deemed to constitute or be construed as a
waiver of the subsequent breach of default of the same, similar, or dissimilar
nature.
21. Choice of Law and Invalidity. The validity, construction, performance and
effect of this Agreement shall be governed by the laws of the State of Nevada.
In case any one or more of the provisions contained herein shall for any reason
be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other
provisions of this Agreement, but this Agreement shall be construed as if such
invalid, illegal, or unenforceable provisions contained herein shall, for any
reason, be held to be excessively broad to time, duration, geographical scope,
activity or subject, said provision shall be construed by limiting and reducing
it so as to be enforceable to the extent compatible with the then applicable
law, it being the intent of the parties hereto to give the maximum permitted
effect to the restrictions set forth herein.
22. Interpretation. If necessary to give effect to the terms and provisions
hereof, the masculine, feminine, and neuter gender in the singular and plural
number shall each be deemed to include the other whenever the context to
indicates. To the unenforceable, it is agreed that the essential terms of this
Agreement shall be and remain enforceable against the parties.
23. Headings. Headings to this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the scope, extent, or intent of this Agreement or any provision hereof.
24. Counterparts. This Agreement may be executed in any number of counterparts,
any of which may be constituted in the agreement between the parties hereto.
25. Time. Time is of the essence for all obligations contemplated in this
Agreement.
26. Entire Agreement. This Agreement, and any schedules and exhibits attached
thereto contain and set forth the entire Agreement between the parties with
respect to the subject matter hereof. All prior negotiations and agreements
between the parties with respect to the scope of this Agreement are mutually
rescinded, replaced, and superseded hereby.
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27. Authority. The Company warrants and represents that it is a corporation
organized and existing under the laws of the State of Nevada, that the
undersigned is authorized to execute this Agreement on behalf of the Company;
that the employment of the Employee under the terms of this Agreement has been
duly authorized by the Company.
28. Inurement. Each covenant and condition in this Agreement shall be binding
on, and shall inure solely to the benefit of the parties to it, their respective
heirs, legal representatives, successors, and assigns.
32. Presumption. This Agreement or any section of this Agreement shall not be
construed against any party due to the fact that the Agreement or any section of
it was drafted by said party.
In Witness Whereof, the parties to this Employment Agreement have duly executed
it on the day and year first above written.
Employee:/s/ Kristen R. Corri Company: /s/
Web Capital Group, Inc.,
a Nevada corporation
94
EX-11.1
Statement Regarding Computation
Of
Per Share Earnings
For the period ended June 30, 1999, the Company reported net earnings of
$509,366 and $ $0.055 earnings per share.
95
EX-21.1
Subsidiaries of Registrant
Currently, the Company's two subsidiaries include 3wVentures.com, Inc. and
FutureVest.com, Inc. (currently FutureVest.com (USA), Inc.) Both of these
transactions and subsidiary operations have occurred after the June 30, 1999
financial statements.
The Company owns a 67.8% equity interest in 3wVentures.com, Inc. 3wVentures.com,
Inc. was incorporated on June 8, 1999, in Nevada, under the name of
SaraOnline.com, Inc.
Pursuant to a September 1999 Joint Venture and Exchange Agreement,
FutureVest.com, Inc., is currently in the process of being incorporated under
the laws of the Commonwealth of the Bahamas. Pursuant to this agreement, once
FutureVest.com is incorporated, assets of FutureVest.com (USA), Inc. will be
transferred into FutureVest.com, Inc., and in exchange, Web Capital will acquire
a majority equity interest (77%) in FutureVest.com, Inc.
96
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001103606
<NAME> Web Capital Group, Inc.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,876,587
<SECURITIES> 0
<RECEIVABLES> 2,377,449
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,254,036
<PP&E> 185,801
<DEPRECIATION> (37,159)
<TOTAL-ASSETS> 18,887,466
<CURRENT-LIABILITIES> 5,471,894
<BONDS> 3,312,049
0
200
<COMMON> 10,333
<OTHER-SE> 10,092,990
<TOTAL-LIABILITY-AND-EQUITY> 18,887,466
<SALES> 1,940,000
<TOTAL-REVENUES> 1,947,472
<CGS> 638,481
<TOTAL-COSTS> 544,799
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 975
<INCOME-PRETAX> 771,766
<INCOME-TAX> 262,400
<INCOME-CONTINUING> 509,366
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 509,366
<EPS-BASIC> 0.055
<EPS-DILUTED> 0.055
</TABLE>
